Industry Minister Mélanie Joly says Ottawa is consulting its lawyers about comments by Cleveland-Cliffs Inc. CEO Lourenco Goncalves, who suggested he bought Stelco to protect his American operations from Canadian competition.
Joly said on Oct. 28 that the federal government would examine the potential legal implications of Goncalves’ remarks. The U.S.-based owner of Stelco has nine days remaining to demonstrate how it plans to honour its job commitments at its Ontario steel mills.
“We’re in contact with our lawyers … to see what could be the consequences of such confessions,” she told reporters on Parliament Hill, referring to Goncalves’ comments during a televised interview.
Goncalves told CBC News on Oct. 27 that he bought Stelco because the Canadian company was flooding the U.S. market with steel and undercutting prices, which he said was detrimental to his own company. He also said he intended to sell Stelco in about a year, saying he had become “persona non grata” in Canada.
Cleveland-Cliffs announced plans on Sept. 28 to lay off up to 500 workers at Stelco’s Hamilton Works and Lake Erie Works in Nanticoke, Ont., citing U.S. tariffs, weak market demand and an oversupply of imported steel in Canada.
Joly had previously raised the possibility of forcing Cleveland-Cliffs to sell Stelco under the Investment Canada Act, saying several companies had expressed interest in acquiring the Canadian steelmaker’s assets.
In an Oct. 28 statement to the media, Goncalves said he hoped to recall 175 laid-off Hamilton workers before Christmas if Stelco could increase its Canadian sales.
The escalating dispute between Ottawa and Cleveland-Cliffs was a key topic on Parliament Hill on Oct. 28, with MPs weighing in on Goncalves’ remarks and the federal government’s efforts to enforce the company’s commitments.
Liberal MP Lisa Hepfner said she believed Cleveland-Cliffs deliberately undermined Stelco’s financial performance after acquiring it to strengthen its U.S. operations.
“They did not want that company to survive,” she said. “He took it over so it would not do well and then he would have a strong position with his U.S. assets.”
Liberal MP Yasir Naqvi, a former international trade lawyer, said Cleveland-Cliffs must honour the legally binding commitments it made when Ottawa approved its acquisition of Stelco, regardless of its reasons for buying the steelmaker.
“Those are ironclad obligations,” he told reporters. “There’s a lot of work that goes into undertaking those obligations, so the minister is absolutely right in this instance in really making sure that the company fulfils its obligation.”
Cleveland-Cliffs has maintained that it is complying with its commitments under the Investment Canada Act, disputing Ottawa’s allegations that it has breached its obligations. The company has said it expects to update its compliance report after the current reporting period ends on Oct. 31.
Conservative MP Kyle Seeback also raised the issue during question period on Oct. 26.
Seeback said Joly had repeatedly threatened legal action against companies that cut Canadian jobs without following through, and questioned whether she would take the same approach with Stelco’s American owner.
Seeback cited Joly’s previous threats to sue Stellantis over job losses, saying the government had neither launched a lawsuit nor restored the jobs. He accused Joly of taking the same approach with Cleveland-Cliffs.
“When will the minister stop the talk and get results? Does her word to workers actually mean anything?” he asked.
Seeback also pressed Joly on whether she would pursue legal action against Cleveland-Cliffs when the 15-day deadline set out in her Oct. 22 letter to the company expired.
Joly responded, “Yes.”
Conservative Leader Pierre Poilievre has also called on Ottawa to take Cleveland-Cliffs to court, saying the government should seek to restore jobs and production at Stelco or force the company to sell its Canadian operations to a new owner.
