The collapse in a crucial category of Canadian steel exports has become the centre of a growing fight over jobs, tariffs and promises made during a foreign takeover. Stelco, owned by Ohio-based Cleveland-Cliffs, says Canadian shipments of cold-rolled and coated steel to the United States fell 58% from a pre-trade-war benchmark. The company is using that decline to explain plans affecting up to 500 Ontario workers.
But the dispute is no longer only about markets. Conservative Leader Pierre Poilievre is questioning whether the Liberal government secured adequate employment protections when it approved the acquisition in 2024. Ottawa insists those commitments still apply, while Stelco disputes allegations of a breach.
For steelworkers in Hamilton and Nanticoke, the consequences are immediate. Production is being reduced, layoffs have begun, and the future of hundreds of skilled industrial jobs remains uncertain.
What the 58% Export Decline Actually Measures
The most striking number in Stelco’s account is 58%, but it has a specific meaning. In an October 9 letter to Industry Minister Mélanie Joly, Stelco president Paul Simon said Canadian exports of cold-rolled and coated steel to the United States fell by 226,000 tonnes in the second quarter of 2026 compared with the average quarter in 2024. The percentage describes shipments in those product categories across Canada. It does not mean Stelco’s own sales, or all Canadian steel exports, declined by 58%.
Cold-rolled steel is processed into thinner, smoother material, while coated products include galvanized steel used in vehicles, construction and appliances. Simon presented the export comparison to explain why Stelco’s Hamilton finishing operations have become difficult to sustain. The figures were reported from the company’s correspondence by The Canadian Press and should be understood as Stelco’s stated assessment, rather than an independently verified total for every part of the industry. Even with that distinction, the reported contraction illustrates the scale of the challenges facing Canadian steel producers.
A Shrinking Canadian Market Adds to the Pressure
Losing access to American customers is only part of Stelco’s explanation. Simon also reported that Canadian demand for cold-rolled and coated steel had dropped 10%, while imported products still supplied 45% of that domestic market. Together with weaker exports, he estimated that the addressable market for Hamilton Works had contracted by more than one million tonnes annually. That exceeds twice the facility’s historical yearly output in those product lines, according to the company.
These claims illustrate the squeeze on a business with substantial fixed costs. Steel finishing lines need enough orders to cover equipment, energy and labour expenses, even when fewer coils are moving through the plant. Cleveland-Cliffs chief executive Lourenco Goncalves has argued that the Canadian market cannot readily support Stelco, rival ArcelorMittal Dofasco and substantial imports at the same time. He has described galvanized steel operations running at approximately 50% to 55% capacity as economically unsustainable. Import share alone, however, does not establish illegal dumping; it shows why the debate over competition and protection has intensified.
Hamilton’s Finishing Shutdown Is Not a Closure of All Stelco
Stelco announced in late September that it would indefinitely idle its cold-rolled and coated steel operations at Hamilton Works, beginning around October 9. Those operations turn steel into products used by manufacturers and construction-related businesses. The company also identified impacts at Lake Erie Works in Nanticoke, where steel is made and hot-rolled into coils. Some coils previously moved onward to Hamilton for additional processing, so a reduction in finishing demand can affect jobs at both sites.
The plan could affect up to 500 employees, but that figure represents projected layoffs across operations, not proof that 500 people have already left their jobs. Stelco has said it would concentrate steel production at Lake Erie Works and explore employment opportunities for some Hamilton workers there. The word “indefinitely” is important: management has not provided a firm date to restart the idled lines. Equally, the announcement does not mean every Stelco operation is shutting down. Steelmaking and finishing are separate stages, and the company’s decisions affect them differently.
The 2024 Takeover Came With Five-Year Promises
When Cleveland-Cliffs acquired Stelco in November 2024, the transaction was more than a change of shareholders. The Ohio company had valued the business at approximately US$2.5 billion in its acquisition announcement, and Ottawa reviewed the investment under the Investment Canada Act. Then-industry minister François-Philippe Champagne announced approval in October 2024, contingent on five-year undertakings designed to preserve benefits for Canada, including employment protections.
The publicly disclosed commitments called for at least the same number of unionized employees and retention of the vast majority of non-unionized staff as at the deal’s announcement. They also addressed Stelco’s Hamilton headquarters, collective agreements, pensions, capital investment and research activities. These were binding obligations, not merely promotional promises. However, the public summary does not resolve how every contractual provision applies to a temporary layoff or prolonged production interruption. That distinction is now central to the disagreement between the federal government and Stelco’s American parent. Whether those safeguards provide the protection originally intended has become a pressing political and legal question.
Poilievre Is Challenging the Liberals’ Original Safeguards
At an October 13 news conference in Windsor, Conservative Leader Pierre Poilievre questioned whether the Liberal government had done enough to protect Stelco employees before allowing Cleveland-Cliffs to buy the company. His challenge focused on the 2024 approval itself: were the promises negotiated strongly enough, and can they actually protect paycheques when production stops? The approval took place under a previous Liberal administration, while Prime Minister Mark Carney’s government now faces the consequences.
Poilievre had already proposed a five-part response at a Burlington appearance on October 9. It included taking legal action against Cleveland-Cliffs, tightening defences against foreign steel dumping, removing the industrial carbon tax, accelerating liquefied natural gas projects and pursuing a tariff-free arrangement with Washington. These are political proposals, not measures already delivered. His criticism also does not establish a legal breach: the enforceability of the 2024 undertakings must be assessed against their actual terms and the law. For the Conservatives, the controversy raises questions about accountability during foreign acquisitions.
Ottawa and Stelco Disagree on What the Job Guarantees Require
Industry Minister Mélanie Joly demanded a plan from Stelco outlining how Cleveland-Cliffs would honour its 2024 commitments. Stelco responded in an October 9 letter from president and general counsel Paul Simon, who argued that deteriorating trade conditions made the Hamilton finishing operation financially unsustainable. He contended that the undertakings do not require employment to remain above a specified number every day throughout the five-year period, and that the planned layoffs do not violate them.
Joly has rejected the suggestion that changing market conditions cancel binding promises. On October 10, she said government lawyers were reviewing the company’s response and enforcement options remained available. The Investment Canada Act allows Ottawa to pursue compliance demands and, in appropriate circumstances, seek court orders covering compliance, divestiture or penalties. Those remedies require legal processes; none is an automatic consequence of announcing layoffs. As of October 14, the disagreement should be described as a contested interpretation, not a court-established violation. The question is whether the employment commitments remain enforceable under circumstances neither side anticipated when the takeover was approved.
American Tariffs Have Created an Awkward Ownership Paradox
The United States increased Section 232 tariffs on covered steel imports to 50% in June 2025, sharply changing the economics of selling Canadian-made steel south of the border. Later American measures adjusted some product classifications, but the high duty on major steel categories remains a central obstacle for exporters. A mill designed around continental customers cannot quickly replace years of cross-border relationships simply by searching for buyers at home.
The political complication is that Cleveland-Cliffs is an American company whose chief executive has publicly praised U.S. steel tariffs as protection for American producers. Goncalves has also urged Canada to impose tougher barriers against overseas steel, advancing what he calls a “Fortress North America” approach. Joly has pointed to his support for American tariffs while rejecting those duties as grounds to abandon worker commitments in Canada. The opposing arguments show how policies beneficial to one part of a multinational steelmaker can hurt another part of its business. Canadian workers are confronting consequences that extend well beyond decisions made at their own plants.
Canada’s Import Controls Have Not Ended the Dispute
Ottawa has not left the steel market completely unprotected. Since December 2025, Canada’s tariff-rate quota system has generally limited specified steel imports from countries without a free-trade agreement to 20% of their 2024 volumes, and from certain free-trade partners outside North America to 75%. Covered shipments exceeding those thresholds face a 50% surtax. Canada, the United States and Mexico are exempt from that particular quota regime, and other tariff rules and relief provisions also apply.
Stelco nonetheless argues that imports still command too much of the cold-rolled and coated market to support domestic producers. Ottawa says quotas are intended to resist trade diversion without depriving Canadian manufacturers of needed inputs. It has separately introduced procurement rules favouring Canadian steel in large federal construction and defence projects. Neither side’s position is a complete solution: purchasing policies cannot instantly replace lost export orders, while restrictions must also consider manufacturers dependent on specialized imported grades. The dispute illustrates how difficult it is to protect domestic producers without raising costs for businesses that use steel.
Steelworkers Are Living With the Uncertainty Now
The first layoff notices began reaching Hamilton workers in early October. Ron Wells, president of United Steelworkers Local 1005, said about 90 employees were expected to receive notices in the first week, with roughly 330 Hamilton jobs affected as the shutdown unfolded. At Lake Erie Works, Local 8782 president John McElroy warned that another 40 to 50 employees could face layoffs later in October. These were union estimates at the time, not a final audited count.
For workers, the distinction between temporary and indefinite can feel painfully thin. Bills and family expenses continue even when a production line goes quiet. Wells said employees felt caught in a political dispute, while McElroy emphasized how many households rely on steelmaking wages. Goncalves says displaced employees can return if a trade agreement restores viable orders, and that temporarily reducing operations protects other jobs. But there is no guaranteed recall date, leaving families to plan around uncertain income. Experienced steelworkers may be able to find alternative employment, but comparable wages and benefits are not necessarily easy to replace.
A Restart Depends on More Than Winning the Political Argument
Stelco says it intends to keep its Hamilton finishing equipment in a condition that would allow production to resume with limited additional cost and delay. Yet it has not committed to a restart date. Simon argued that government assistance offered for maintenance and capital expenses would not fix the underlying shortage of customer orders. Ottawa maintains that help was available to preserve employment, making the refusal another point of contention.
The political alternatives are diverging. Poilievre wants court action and renewed talks for tariff-free access to the American market. New Democratic Party Leader Avi Lewis has proposed public ownership to prevent further losses of Canadian steel capacity. Each approach raises questions about timing, costs and whether sufficient buyers would return. For Hamilton and Nanticoke, the meaningful milestones will be clearer employment protections, steadier orders and a credible operating schedule. Until then, the 58% export decline is not merely a trade statistic; it is a warning about how quickly a disrupted market can reach workers’ homes.
