For generations, Hamilton’s steel industry has provided the kind of stable, well-paying jobs that support families and entire neighbourhoods. Now, hundreds of those jobs are at risk as Canada’s steelmakers confront an increasingly difficult reality: Donald Trump’s tariffs may not be going away anytime soon.
On October 8, 2026, a senior Canadian steel industry representative warned that American trade restrictions could remain in place for the long term. The warning came as Stelco, one of Hamilton’s best-known steelmakers, began issuing layoff notices to employees.
The unfolding crisis has also triggered a confrontation between Ottawa and Stelco’s American parent company, Cleveland-Cliffs, over promises made when it purchased the Canadian business in 2024.
Canadian Steel Industry Warns Tariffs Could Become Permanent Reality
Canada’s steel industry is increasingly preparing for a future in which high American tariffs are a lasting business obstacle rather than a temporary negotiating tactic. John Cuddihy, vice-president of climate and environment at the Canadian Steel Producers Association, delivered that warning during an October 8 appearance before the Senate’s foreign affairs and international trade committee. Cuddihy explained that American steel producers have benefited financially from Trump’s trade restrictions, creating powerful incentives to maintain them. He indicated that eliminating the tariffs across the board could prove politically and economically difficult for Washington.
The warning represents a significant concern for Canadian manufacturers that have traditionally depended on access to American customers. Cuddihy urged Ottawa to strengthen its Buy Canadian procurement rules rather than assume negotiations would quickly restore previous trading conditions. His assessment was a forecast, not a confirmed decision by Washington to maintain the tariffs indefinitely. Nevertheless, steel companies must make decisions about production, staffing and investment long before the outcome of trade negotiations becomes clear. For workers in cities such as Hamilton, the possibility of prolonged restrictions raises troubling questions about the future of stable manufacturing employment.
Hundreds of Stelco Workers Face Layoffs in Hamilton
The consequences of the trade conflict are already reaching the factory floor at Stelco’s Hamilton Works facility. The company announced plans on September 28 to indefinitely idle its cold-rolled and coated steel operations, putting up to 500 jobs at risk across its Hamilton and Lake Erie facilities. United Steelworkers Local 1005 president Ron Wells initially estimated that approximately 350 Hamilton workers would be affected. By October 8, roughly 330 Hamilton employees were expected to receive layoff notices over a three-week period, with additional reductions anticipated elsewhere in the company’s operations.
The first individual notices were issued on October 7, with approximately 90 Hamilton employees expected to receive them during the initial week. The first layoffs were scheduled to take effect on Sunday, October 11. These developments have transformed an announcement about future job cuts into an immediate employment crisis. Many affected employees have spent years developing specialized skills that are not easily transferred to other workplaces. Although Cleveland-Cliffs describes the layoffs as temporary, there is currently no confirmed date for recalling everyone. That uncertainty leaves families trying to plan their finances without knowing whether their employment interruption will last weeks, months or considerably longer.
Hamilton Families Are Feeling the Impact Before the Shutdown
Behind the employment figures are workers who expected to continue building their futures at Stelco. Jordan Williams, a Hamilton utility technician who began working for the company in 2022, told CHCH News that he received his layoff notice on October 7. A father of two young children, Williams described the emotional shock of learning he would not be returning to work after the Thanksgiving long weekend. He had received an earlier warning about possible layoffs, but the reality of being handed a notice still caught him off guard. The financial implications, he explained, would affect his entire family.
Union representatives say employees have received very little notice before their final scheduled shifts. Wells reported that some workers were being informed during their last shifts that they should not return the following week. The union has negotiated a supplemental unemployment benefit fund, and affected employees may also qualify for Employment Insurance. However, those supports cannot necessarily replace the stability of a regular steelmaking salary. Beyond mortgage payments, groceries and household bills, workers are confronting the emotional strain of suddenly losing a job they believed would provide long-term security.
Stelco Says Its Canadian Market Has Become Too Small
Stelco’s explanation for the shutdown centres on a troubling decline in demand for specific types of steel. The company’s Hamilton Works facility specializes in cold-rolled and galvanized products, which are used in applications ranging from automotive manufacturing to construction. In an internal company memo reported in September, Stelco said demand for its cold-rolled and galvanized products in traditional markets had fallen by nearly 25% during the second quarter of 2026 compared with the quarterly average in 2024. Management argues that reduced access to American customers, combined with continued imports into Canada, has made these operations financially unsustainable.
Cleveland-Cliffs chief executive Lourenco Goncalves offered a similar explanation on October 8. He said the Canadian market could not absorb the combined galvanized steel output of Stelco, ArcelorMittal Dofasco and imported competitors. According to Goncalves, the company’s galvanized operations had been running at approximately 50% to 55% capacity, insufficient for profitable production. Stelco is therefore concentrating steelmaking at its Lake Erie Works facility in Nanticoke, while idling finishing operations in Hamilton. This does not mean every Stelco operation is closing, but it removes important processing capacity and jobs from Hamilton’s industrial economy.
Trump’s 50% Steel Tariff Has Reshaped Cross-Border Trade
The trade barriers disrupting Canadian steel production began escalating in March 2025, when the Trump administration introduced 25% tariffs on steel and aluminum imports. Washington doubled those duties to 50% on June 4, 2025, using Section 232 of the Trade Expansion Act, which allows trade restrictions justified on national security grounds. Subsequent presidential proclamations in 2026 revised the treatment of steel, aluminum and certain manufactured products containing those metals. Covered primary steel products continue to face a 50% tariff, although different rates and rules apply to some derivative products.
Canada’s exposure to the American market explains why those measures have been especially damaging. According to the federal Department of Finance, Canadian steel producers exported just over half their production in 2024, with more than 90% of those exports destined for the United States. Companies built supply chains around relatively predictable access to customers across the border. When tariffs substantially increased the cost of that trade, Canadian producers faced an immediate competitive disadvantage. Research by Statistics Canada into the earlier 2018–2019 tariff dispute found that the value and volume of tariffed Canadian steel and aluminum exports fell by approximately half relative to comparable untariffed products. The experience demonstrates how quickly trade barriers can disrupt established markets.
Stelco’s American Owner Has Supported Trump’s Tariff Policies
The ownership situation adds another controversial dimension to the layoffs. Cleveland-Cliffs, headquartered in Ohio, completed its acquisition of Stelco on November 1, 2024, in a transaction initially valued at approximately C$3.4 billion in enterprise value. At the time, Goncalves emphasized the benefits of expanding integrated steel production across North America and preserving well-paying union jobs. Less than two years later, employees at its Canadian operations are losing work partly because of American trade restrictions that the company’s leadership has publicly supported.
Goncalves has defended Trump’s Section 232 tariffs, describing them as highly successful American trade policy. He has also advocated what he calls a Fortress North America approach, under which Canada and the United States would better protect their steel industries against imports from other countries while restoring cross-border access for Canadian products. Critics see an uncomfortable contradiction between his support for American tariffs and the resulting pressure on Canadian workers. Goncalves rejects suggestions that political considerations or his support for Trump drove the layoff decision. He maintains that weak demand, insufficient import protections in Canada and the absence of a bilateral steel agreement explain the company’s actions.
Ottawa Says Cleveland-Cliffs Must Honour Its Employment Promises
The federal government is challenging Cleveland-Cliffs over commitments made before the American company received permission to acquire Stelco. In October 2024, then-industry minister François-Philippe Champagne approved the takeover under the Investment Canada Act. The approval included legally binding commitments lasting five years. Among them were requirements to maintain at least the same number of unionized employees and the vast majority of non-unionized workers employed when the transaction was announced. Cleveland-Cliffs also committed to maintaining Stelco’s Hamilton head office, honouring collective agreements and pension obligations, and making significant investments in Canadian operations.
Industry Minister Mélanie Joly has argued that those commitments remain enforceable despite changing economic conditions. In a letter sent to Stelco president Paul Simon on October 5, she demanded a plan explaining how the company would honour its obligations and requested a response within five business days. The government has warned that non-compliance could lead to court proceedings, potentially including orders to meet commitments, financial penalties or a forced sale. Cleveland-Cliffs disputes the government’s characterization and says it is preparing a formal response. No court has yet determined that the company breached its undertakings, leaving a potentially significant legal dispute unresolved.
Hamilton Has Faced a Similar Fight With American Steel Owners Before
For longtime Hamilton steelworkers, the current confrontation carries uncomfortable echoes of an earlier ownership dispute. U.S. Steel purchased Stelco in 2007, promising to maintain production and employment levels as part of the federal government’s approval. However, following the global financial crisis, the company reduced operations and laid off employees. Ottawa eventually challenged whether U.S. Steel had honoured its commitments under the Investment Canada Act. In 2009, the federal government formally demanded compliance and subsequently initiated court proceedings after concluding the company’s explanations were insufficient.
The dispute ended in December 2011 with a negotiated settlement rather than a final court judgment requiring the original commitments to be fulfilled. U.S. Steel agreed to continue operating its Hamilton and Lake Erie facilities until 2015, make at least C$50 million in additional capital investments and contribute C$3 million to local community and educational initiatives. That history helps explain why the current Stelco dispute is being taken so seriously. Canada’s investment legislation provides mechanisms for holding foreign buyers accountable, but enforcement can involve lengthy negotiations and litigation. For employees facing immediate layoffs, a legal victory months or years later would not necessarily replace the income lost in the meantime.
The Steel Employment Crisis Extends Beyond Hamilton
Stelco’s Hamilton operations are not the only facilities facing reductions. At Lake Erie Works in Nanticoke, union representatives anticipate that approximately 40 to 50 employees could be laid off as early as October 24. The reductions are connected to changes involving steel pickling lines, which remove surface oxidation from hot-rolled steel before further processing. John McElroy, president of United Steelworkers Local 8782, has expressed concern about the limited availability of comparable high-paying jobs in the surrounding region. The union is working with management to identify opportunities for affected employees to perform work otherwise assigned to outside contractors.
Other Canadian steelmakers have already made substantial employment reductions while adapting to tariffs and changing production methods. Algoma Steel in Sault Ste. Marie issued layoff notices to approximately 1,005 unionized workers in December 2025, effective March 23, 2026, as it accelerated its transition to electric arc furnace steelmaking. The company has also documented significant losses of American business. During the second quarter of 2026, U.S.-bound shipments accounted for approximately 23% of total steel shipments, compared with 54% in the same period of 2025. Algoma reported C$18.7 million in direct tariff costs during that quarter. Although its technological transition was already planned, the trade dispute accelerated major changes in its operations and workforce.
Buy Canadian Rules Are Becoming More Important to Steelmakers
With American market access increasingly uncertain, Canadian steel producers are pressing governments to use domestic purchasing power more effectively. The federal government introduced stronger Buy Canadian procurement requirements in December 2025, including rules requiring Canadian-produced steel, aluminum and wood in eligible defence and construction contracts valued at C$25 million or more, provided the materials represent at least C$250,000 of the contract and Canadian supply is available. Separate procurement preferences for Canadian suppliers and content were subsequently extended to qualifying strategic contracts worth C$5 million or more. These measures are designed to channel more government spending toward businesses operating domestically.
Ottawa has also introduced transportation assistance intended to make Canadian steel more competitive across provincial boundaries. In August 2026, the federal government launched a C$100 million program covering 50% of eligible interprovincial rail and marine shipping costs for Canadian steel, subject to program limits and available funding. The initiative is intended to help producers reach customers elsewhere in Canada without absorbing the full expense of long-distance transportation. However, federal procurement and freight assistance cannot immediately replace the scale of the American market. For Stelco and other manufacturers, a lasting solution would likely require stronger Canadian demand, more diversified export opportunities and improved access to existing North American customers.
Workers Face an Uncertain Future as Trade Negotiations Continue
Cleveland-Cliffs insists that the Stelco layoffs are temporary and that affected workers can return once a Canada–U.S. steel trade agreement restores commercially viable market access. Goncalves said on October 8 that he expects an agreement eventually, although he acknowledged that he cannot predict when it will happen. The company maintains that its decision is about inadequate orders rather than a desire to eliminate Canadian jobs permanently. Prime Minister Mark Carney has argued that financial assistance was available to maintain employment, but Goncalves counters that additional funding would not solve the underlying shortage of demand.
There is little immediate certainty coming from Washington. On October 8, U.S. Trade Representative Jamieson Greer said the administration was maintaining its position in negotiations with Canada, even as communication continued between officials. That leaves Hamilton workers caught between federal enforcement efforts, corporate decisions and trade negotiations over which they have almost no control. The next developments will include Cleveland-Cliffs’ response to Ottawa’s demand for an employment plan and whether the company proceeds with its scheduled reductions. For an industry accustomed to surviving economic downturns, the central concern is now more fundamental: how to protect Canadian steelmaking jobs if high American tariffs remain part of the economic landscape for years.
