Minister of Industry Mélanie Joly responds to questions from journalists before a meeting of the Liberal caucus, on Parliament Hill in Ottawa, on Oct. 7, 2026. The Canadian Press/Justin Tang
Industry Minister Mélanie Joly says the federal government could seek financial penalties or a forced sale of Stelco’s Canadian assets if the steelmaker proceeds with its layoffs of up to 500 steelworkers.
“A few possible outcomes of a court process can lead to financial penalties towards a company, forcing them to abide by the commitment, and also a forced divestiture, so forcing them to sell their Canadian assets. Everything is on the table,” Joly told reporters in Ottawa on Oct. 14.
Joly said the federal government expects that Stelco will follow through with its employment commitments, and that a change in market conditions “cannot be used to not follow” those commitments.
“I’m always open to sit down with the company and find a solution, but we’re looking at everything that is possible to keep jobs in Canada,” she said.
Expanding on her comments on Oct. 15, Joly said the federal government had hired the “best lawyers” to help it pursue legal action against Stelco.
“Meanwhile, if Stelco wants to come back to the table to negotiate, I’m always open to that,” she added.
Stelco announced on Sept. 28 that it would indefinitely idle finishing operations at its Hamilton Works facility, citing “market uncertainty.” The company said the move could affect up to 500 workers across its Hamilton and Lake Erie facilities. Some workers have since received layoff notices.
In a letter to Stelco dated Oct. 5, Joly said the planned job cuts could violate binding employment commitments made by Ohio-based parent company Cleveland-Cliffs when the federal government approved its $3.4 billion acquisition of Stelco under the Investment Canada Act in 2024.
The government says the commitments included maintaining at least the same number of unionized employees and the vast majority of non-unionized employees as when the acquisition was announced, for five years.
Stelco’s President Paul Simon said
in an Oct. 9letter responding to Joly that Canadian exports of cold-rolled and coated steel to the United States had fallen by 58 percent due to 50 percent U.S. tariffs on steel, and that Stelco could not continue to produce these products in Canada without “incurring significant losses that are not sustainable.”
Simon argued that the employment commitments do not prohibit layoffs or require the company to maintain a specified employment level every day throughout the five-year period.
He also described Canada’s existing trade protections as “woefully inadequate” to support a sustainable market for the Canadian and U.S. steel industries.
Joly has previously said Stelco chose not to seek support from federal programs intended to protect jobs vulnerable to U.S. tariffs.
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