Ottawa examines Stelco remedies, including possible nationalization

In Toronto on October 16, Mélanie Joly said she was examining all options under the Investment Canada Act, including possible nationalization of Stelco, Reuters reports. She alleges multiple breaches of Cleveland-Cliffs’ commitments and points to a court process. [13]

The legal framework

Section 40 provides for an application to a superior court following failure to comply with a demand. If the legal conditions are met, the court may order compliance with written undertakings or divestment of control of the business, among other remedies. This mechanism does not establish that such an order has been issued against Stelco. [14]

On October 13, Marit Stiles asked Doug Ford to work with Mark Carney on a plan for public ownership of Stelco. The Ontario NDP leader presents this option as a way to protect jobs. This is an opposition proposal. [11]

Global News reports the proposal on October 13. [12]

Stelco denies breaching its commitments, Global News reported October 12. [10]

Pierre Poilievre called on Ottawa to sue Stelco’s American owner on October 9, The Canadian Press reports. He seeks the recall of workers and a production restart, or a sale to a Canadian owner willing to resume operations. [9]

A political plan

The plan published by the Conservative Party calls for enforcement of the acquisition’s employment guarantees. It also proposes action against steel imports it considers unfairly traded and the removal of industrial carbon pricing. These are opposition proposals. [8]

More than 60 jobs are expected to be affected at Lake Erie Works this month, The Haldimand Press reports on October 8. Union president John McElroy says about 20 production positions are available to affected workers, including those from Hamilton. The company has not confirmed the local total to the newspaper. [7]

Mélanie Joly sent an October 5 letter requesting a compliance plan within five business days, The Canadian Press reported on October 9. The government raises the possibility of legal action if commitments are not met. [9]

A demand, not a judgment

According to that report, Ottawa is considering legal action if commitments are not met. No court ruling is announced. [6]

United Steelworkers Locals 1005 and 8782 challenged Cleveland-Cliffs’ explanation for planned Stelco layoffs on October 1. They ask the federal government to enforce commitments made when the company was acquired. [4]

On September 29, Mark Carney pledged action against Cleveland-Cliffs, CHCH reports. Its September 30 report said layoffs were scheduled to begin on October 9. [1]

Earlier commitments

When announcing the acquisition in July 2024, Cleveland-Cliffs pledged to maintain significant operations in Hamilton and Nanticoke and significant employment levels in Canada. [2]

CEO Lourenco Goncalves cites weak demand, Global News reports. [3]

An uncertain outcome

CHCH reports a worker’s concerns and notes that legal action would take time. Neither job retention nor a court outcome is guaranteed. [1]

The October 1 report

In its October 1 report, The Canadian Press corroborated the union statement and said the company had not immediately responded to its request for comment. The union’s allegations are not a court finding. [5]