The layoffs at Stelco's Hamilton steelworks have begun. The company started handing out individual notices on Wednesday, with about 90 workers expected to receive them this week and the first cuts taking effect on Sunday, Ron Wells, president of United Steelworkers Local 1005, said, according to The Canadian Press. Roughly 330 Hamilton workers are expected to be affected over the next three weeks, Wells said, with more at Stelco's Lake Erie Works in Nanticoke. He told CBC Hamilton he expects 300 to 350 layoffs in Hamilton. Stelco announced last week that it plans to lay off up to 500 workers across its Hamilton and Lake Erie sites.
On Thursday the head of Stelco's parent company said they would be reversed if the two countries settle their dispute over steel. Lourenco Goncalves, chairman and chief executive of Ohio-based Cleveland-Cliffs, which bought Stelco in 2024, said the workers would be recalled once Canada and the United States reach a trade deal on steel.
"It's a temporary layoff," Goncalves said. "I do believe that one day we're going to have a trade deal, I just don't know when."
"Once this trade deal is reached and we're back and able to produce and sell galvanized steel, we will bring back these people."
Too much capacity, he says
Hamilton Works produces cold-rolled and galvanized steel, and the company plans to idle both operations. Goncalves's case is that Canada alone is not a big enough market. He said it cannot support galvanized production from both Stelco and ArcelorMittal Dofasco, as well as imports.
"There's not enough orders there for us," he said. "You can't operate in an efficient and profitable way running at 50 or 55 per cent capacity. That's what we have been facing with galvanized steel."
He has said before that the ability to sell into the United States was a condition of the purchase, and that he would not have bought Stelco had he known the two countries would become enemies in trade, CBC Hamilton noted.
He also argues the cuts protect the rest of the workforce. "I did not betray anyone," he said on Thursday. "I'm temporarily laying off 350 and I'm still hopeful that we're going to have a trade agreement and I can bring these 350 workers back and continue to grow."
Ottawa says the jobs were promised
The federal government's position is that market conditions do not matter. When Cleveland-Cliffs bought Stelco in a $3.4 billion cash-and-stock deal in 2024, it gave undertakings under the Investment Canada Act, including to continue to employ at least the same number of unionised employees, and the vast majority of non-unionised ones, as when the deal was announced, CBC News reported.
In a letter to Stelco president Paul Simon on Monday, Industry Minister Mélanie Joly gave the company five business days to set out how it would meet those commitments, or face an application to the courts. "The Government of Canada takes compliance with undertakings seriously," she wrote. She said the commitments did not cease to apply because business strategy or market conditions had changed.
Joly then went further, telling reporters that because Goncalves has publicly supported American steel tariffs, the company cannot describe the effect of those tariffs as beyond its control. She said Ottawa would pursue enforcement if the company did not produce a plan to meet all its commitments, including maintaining more than 1,500 jobs, Radio Canada International reported. Goncalves called her comments "totally unfair" and "just playing with words," The Canadian Press reported.
He said Cleveland-Cliffs would respond by Tuesday, inside the deadline, with two submissions: one answering the minister's demand for a plan, and a more detailed one with commercially sensitive information that he said would be protected under the Act. He would not say what either contains.
He does not oppose tariffs as such. He described the American Section 232 steel tariffs as the most successful trade policy the United States has ever implemented, and said Canada should adopt similar protections, as part of what he calls "Fortress North America."
What happened last time
There is one precedent, and it involves the same plant. In 2007 U.S. Steel bought Stelco and gave employment and production undertakings. When the 2008 financial crisis sapped demand, it closed most of the Canadian operations and laid off more than 1,500 employees. The Attorney General of Canada sued in July 2009, and the case was settled out of court in 2011 without a judgment, CBC News reported. "As far as the public record shows, it is the only time Ottawa has gone to court over commitments like this," the Toronto business lawyer Nassira El Hadri told the broadcaster. The new undertakings agreed in the settlement did not include minimum headcounts, and U.S. Steel Canada filed for creditor protection in 2014.
On the floor
For the workers the legal argument is distant. Under Ontario's Employment Standards Act, Wells told CBC Hamilton, the company does not have to give advance notice of a temporary layoff shorter than 35 weeks, so a worker can receive a notice and be laid off the same day. One worker told CBC he received his notice on Wednesday, effective Sunday.
"I think almost all the workers I've talked to, they feel that this shutdown and layoff isn't necessary," Wells said. "There's a market out there for our product and we're being used as pawns in a political game."
At Lake Erie Works, between 40 and 50 workers could be laid off as early as 24 October as the company cuts back its pickling lines, said John McElroy, president of United Steelworkers Local 8782. The federal and Ontario governments on Tuesday announced $203,000 for job retraining for 75 steel and manufacturing workers.
It is the second time this week that the future of a large Ontario workforce has been tied to a condition set by a foreign-owned company, after Unifor said Stellantis would match the Ford and GM contracts only if the union accepted the sale of its Brampton plant. The difference at Stelco is that the government holds a written promise. Tuesday's response will show whether Cleveland-Cliffs thinks the trade war voids it.
The start of individual notices, the expected number and timing of Hamilton layoffs, the Lake Erie Works cuts, the quotations from Lourenco Goncalves, Ron Wells and John McElroy, the plan to respond by Tuesday, the description of the two submissions and Joly's rejection of the tariff argument are as reported by The Canadian Press on 8 October 2026. The three-week schedule, the Employment Standards Act rule on notice, Wells's further remarks and the retraining funding are as reported by CBC Hamilton on 8 October 2026. Joly's letter, its quotations, the five-business-day deadline, the 2024 purchase price and the terms of the undertakings are as reported by CBC News on 6 October 2026. Joly's remarks to reporters are as reported by Radio Canada International on 8 October 2026, which dated them to Wednesday; CBC News dated the same remarks to Tuesday, so this report gives no day; her remark on the 1,500 jobs is from the same report. The history of the 2009 lawsuit against U.S. Steel and its settlement is as reported by CBC News on 8 October 2026. The analysis is our own.
