Stelco Inc. will recall 175 laid-off workers and restart its Hamilton finishing operations on Dec. 1, 2026, after federal pressure and customer commitments reversed a September shutdown.
Canadian steelmaker Stelco Inc. is recalling 175 laid-off steel workers effective Dec. 1, 2026, ending a weeks-long standoff between Ottawa and the company’s U.S. parent, Cleveland-Cliffs Inc. The company announced Friday that sufficient demand from customers for its steel put it in a position to bring back the employees and restart its cold-rolled and galvanized finishing operations in Hamilton, Ontario.
The restart reverses a September shutdown that put the steelmaker on a collision course with the federal government. On Sept. 28, Stelco announced it was laying off up to 500 workers at two plants in Hamilton and Nanticoke, Ontario, igniting a political firestorm that drew immediate scrutiny from Industry Minister Mélanie Joly.
Ottawa Threatens Court Action over Stelco Layoff Commitments
Cleveland-Cliffs blamed the initial layoffs on weak demand, difficult market conditions, U.S. tariffs on Canadian steel, and a deluge of cheap foreign imports. However, Ottawa asserted that the Ohio-based parent company had violated legally binding commitments made during its $3.4 billion acquisition of Stelco in 2024, including a pledge to maintain unionized headcount at 2024 levels through 2029.
Before Friday’s reversal, Joly gave management an ultimatum, stating she would seek a court order to force Cleveland-Cliffs to sell Stelco unless she heard from leadership by the end of the day.
Tensions rose further following remarks from Cleveland-Cliffs CEO Lourenco Goncalves indicating he bought Stelco to protect his company’s U.S. tariffs on Canadian steel, prompting Ottawa to consult lawyers regarding his remarks.
Impacted Employees Receive Back Pay as Hamilton Plant Restarts
Under the agreement reached for Dec. 1, 2026, all impacted employees will be compensated retroactively for standard wages missed while off the job. Full production at the Hamilton facility will take several weeks to resume due to necessary recalibration and re-staffing after the two-month idle period.
“I would like to thank our valued customers for the faith they have placed in us, and our workers for the patience and resilience they have continued to demonstrate during this challenging period,” said Paul Simon, Stelco president, in a statement.
In its statement, Cleveland-Cliffs maintained that customers agreed to support the Hamilton operations “despite the lack of response from the federal government to address the shortfalls in their tariff-response program.”
Union Reaction
Local labor representatives welcomed the resolution, pointing to government enforcement of the Investment Canada Act as a decisive factor in securing the workers’ return.
“We are happy the government held them accountable, enforced the Investment Canada Act, got our members back in a relatively short period of time, and made them whole,” said Ron Wells, president of United Steelworkers Local 1005, in an interview.
Speaking alongside union leadership at a news conference in Hamilton on Friday evening, Joly emphasized how the outcome will affect foreign investors operating in Canada.
“This fight was absolutely worth it,” Joly said. “We’re also sending a message this is a country of the rule of the law and that the law applies to everyone, notwithstanding the size of your wallet.”
At the Hamilton Works operation, parent company Cleveland-Cliffs had previously laid off 175 workers in September. In an internal letter to employees on Sept. 28, Stelco said that up to 500 workers at both its Hamilton Works and Lake Erie Works operations could be affected by the layoffs.
Ron Wells, president of United Steelworkers Local 1005, confirmed that 175 workers were laid off in Hamilton while no layoffs occurred at Lake Erie Works. While Industry Minister Mélanie Joly pointed to Stelco’s five-year commitment to maintain employment levels of about 2,400 workers after acquiring the steel maker in 2024, Cleveland-Cliffs CEO Lourenco Goncalves maintained the company operated within its Investment Canada Act commitments.