Up to 500 Stelco Workers Face Layoffs as Cleveland-Cliffs Idles Hamilton Plant

Up to 500 workers in Hamilton and Nanticoke, Ontario, will lose their jobs as Cleveland-Cliffs idles Stelco's Hamilton Works plant indefinitely starting Oct. 9, 2026 — and the ensuing legal fight could redefine what foreign buyers' employment commitments in Canada are actually worth.

Cleveland-Cliffs announced the layoffs on Sept. 28, 2026. Ron Wells, president of United Steelworkers Local 1005 in Hamilton, estimates 350 union members will lose work. Some will be offered positions at Lake Erie Works, but The Globe and Mail reports the transfers will not come close to covering the gap.

Why does the CEO say the layoffs are justified?

Lourenco Goncalves, CEO of Ohio-based Cleveland-Cliffs, told CBC News his company has every legal right to idle the plant. He argues free access to American buyers was an "underlying condition" of the terms his company accepted when it bought Stelco in 2024.

"I would not have acquired the Stelco if I knew that Canada and the United States would become what they became – enemies in trade," Goncalves said.

He told Global News the arithmetic is simple: "There's no market in Canada for the amount of galvanized steel we produce in Canada. We need to export… to the United States." Ottawa's Aug. 25, 2026 retaliatory tariff package, he said, cut off that access. "Until we reestablish that, there's nothing we can do, nothing."

What does the federal government argue?

At a Sept. 29, 2026 press conference in Vancouver, Prime Minister Mark Carney said workers had been "betrayed by the company," the National Post reported.

"The company made representations and has legal obligations for employment," Carney said. "We intend to use all powers that we have and pursue them to the full extent of the law."

Goncalves told Bloomberg he welcomes the confrontation: "We'll resolve this in court," he said, according to Quartz.

There is precedent. Ottawa sued U.S. Steel in 2009 over broken employment and production promises tied to its 2007 Stelco purchase. The government dropped the case after U.S. Steel agreed to keep both plants running until 2015 and invest at least $50 million more, per a Dec. 12, 2011 Industry Canada statement.

What were Cleveland-Cliffs' commitments?

Federal approval of the takeover under the Investment Canada Act rested on binding five-year undertakings, according to an Oct. 30, 2024 statement from then-Industry Minister François-Philippe Champagne. Cleveland-Cliffs agreed to:

• keep at least as many unionized employees as it had when the deal was announced in July 2024;
• retain the vast majority of non-unionized employees.

Did Ottawa offer alternatives?

Sources told Global News the federal government proposed bridge financing, loans and access to new Canadian markets. "Its decision to reject these practical proposals and continue with layoffs is extremely disappointing," said Gabrielle Landry, spokesperson for Industry Minister Mélanie Joly.

For the affected workers, timing compounds the uncertainty. "Christmas ain't that far away, and we have no idea the duration of these layoffs," Wells told CBC News.

Ottawa's tariff package extended the EI one-week waiting period waiver to Oct. 10, 2027 — a cushion, but unions caution that recent tariff relief still falls short of real certainty. With the wind-down beginning Oct. 9 and both sides publicly preparing for litigation, the case is likely to test whether Investment Canada Act undertakings can survive a trade war neither party anticipated.