Canada Weighs Nationalizing Stelco: Joly Warns Cleveland-Cliffs Over 500 Hamilton Layoffs

Ottawa just played its scariest card in the Stelco fight. Speaking at the Canadian Club in Toronto on Friday, Industry Minister Mélanie Joly said the federal government is exploring every option under the Investment Canada Act — including nationalizing the Hamilton steelmaker — if its American owner keeps breaking job promises.

Let that sink in. Nationalizing a steel plant. In 2026, in Canada. This is how high the stakes have gotten between Ottawa and Cleveland-Cliffs, the Ohio-based company that bought Stelco two years ago.

The promises Cleveland-Cliffs made — and broke

When Cleveland-Cliffs closed its C$3.4 billion purchase of Stelco in November 2024, the deal came with legally binding five-year undertakings: keep the head office in Hamilton, maintain unionized headcount, keep the vast majority of non-union staff, honour the collective agreements, and keep investing in the plants.

Then came September 28. Stelco announced it would indefinitely idle its cold-rolled and coated operations at Hamilton Works — the lines that make the galvanized steel feeding Canada's auto and appliance industries — and cut up to 500 workers across Hamilton and Lake Erie. The company blamed 50% US tariffs on Canadian steel.

Joly wasn't buying it. On October 5 she sent Stelco president Paul Simon a letter giving the company five business days to produce a compliance plan. A week later: no response. On Friday she escalated, telling reporters the government believes "there has been multiple breaches of commitments" and that Section 40 of the Investment Canada Act gives Ottawa the tools to enforce them through the courts.

The Canadian Press on Joly's warning to Cleveland-Cliffs (Oct. 16, 2026).

The tariff irony Joly keeps hammering

Here's the part that clearly infuriates Ottawa. Cleveland-Cliffs CEO Lourenco Goncalves has publicly cheered the very US steel tariffs his company blames for the layoffs. Goncalves has called the Section 232 duties "the most successful policy implemented on trade in the United States ever." On CBC's Rosemary Barton Live he insisted the layoffs are temporary — workers will be recalled once a trade deal lands — and that the agreement sets no daily headcount requirement.

Joly's answer: "They cannot say that this is now an act of God or force majeure." Her line at the Canadian Club was blunter: "Cleveland-Cliffs must uphold its commitments, full stop. They must keep the jobs in Canada or face the prospect of having to sell their Canadian assets."

Ottawa's options — and the 2009 precedent

Section 40 of the Investment Canada Act lets the government ask a superior court to order compliance, impose penalties — daily fines for breaching undertakings were raised to $25,000 — or, in the extreme, order a sale of the business. Reuters reported Friday that outright nationalization is genuinely on the table.

This isn't theoretical. In 2009, Ottawa took Stelco's previous American owner, US Steel, to court over broken employment undertakings — the only time Canada had ever done that. The case settled in 2011 with a $50 million capital commitment. Joly's team knows the playbook.

For the 500 workers waiting on their fate — United Steelworkers Local 1005 estimates 350 Hamilton steelworkers alone — the court fight could take months or years. Local president Ron Wells told CTV the layoffs look like "a manufactured crisis" to pressure Ottawa on a trade deal, and that members "want to get back to work now."

My read: Joly is done warning. The nationalization talk is partly leverage, partly real — and either way, Cleveland-Cliffs just learned that Ottawa's patience has a limit.

Sources

• Reuters — Canada exploring Stelco nationalization, industry minister says
• The Canadian Press via EuropeSays — Joly warns Stelco owner to protect jobs or face forced sale of Canadian assets
• SteelOrbis — Canada calls on Cleveland-Cliffs to submit plan on Stelco job commitments