Industry Minister Mélanie Joly said Wednesday that the company must honour the employment commitments it made when it acquired Stelco in 2024, warning Ottawa would use "the full force of the law" if it fails to comply, according to The Canadian Press.

In an Oct. 5 letter, she gave Stelco president Paul Simon five business days to explain how the company would meet those commitments. As of Wednesday, Ottawa had not received a response.

When Ottawa approved the deal in October 2024, it attached binding five-year undertakings, including maintaining at least the same number of unionized employees and most non-unionized staff, and honouring collective agreements, benefits and pensions. Joly has said enforcement could include court orders, penalties or a forced sale, remedies a superior court can order under the Investment Canada Act.

Cleveland-Cliffs pitched the takeover as a win for Canada, promising significant Canadian employment and at least $60 million in capital investment over three years.

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Chief executive Lourenco Goncalves now argues the trade relationship has changed the economics of the deal. In interviews summarized by Human Resources Director, he said access to American customers was an underlying condition of the acquisition, that Canada can't absorb all the galvanized steel the company produces, and that Cleveland-Cliffs has the legal right to idle Hamilton Works.

U.S. Section 232 tariffs on Canadian steel were raised to 50% in June 2025. Joly, however, pointed to Goncalves' own support for those tariffs and rejected the idea that the disruption excuses the company's obligations.

Stelco plans to indefinitely idle Hamilton's cold-rolled and coated operations on or around Oct. 9 and concentrate production at Lake Erie Works in Nanticoke.

CHCH reported up to 500 employees across both sites could be affected. A company spokesperson told CityNews it expects a significant number of Hamilton workers to be absorbed at Lake Erie, though not every position is guaranteed.