Industry Minister Mélanie Joly was pressed on Parliament Hill on Wednesday about where Ottawa's fight with Stelco stands — and all she would say is that the government is still reviewing the company's letter. That letter, a seven-page response from Stelco president Paul Simon dated October 9, tells a blunter story: Stelco is going ahead with idling the finishing lines at its Hamilton Works plant and laying off up to 500 workers across Hamilton and its Lake Erie Works facility, and it says the federal government's steel protections are the reason it has no other choice.
The numbers in the letter are stark. Canadian exports of cold-rolled and coated steel to the United States fell by 226,000 tonnes in the second quarter of 2026 compared with the 2024 quarterly average before the trade war — a plunge of 58 per cent under Washington's 50 per cent tariffs. Foreign imports, meanwhile, have taken 45 per cent of the Canadian market for those products despite Ottawa's import restrictions, and domestic demand has dropped another 10 per cent. Simon wrote that the market for Hamilton Works' products has shrunk by more than a million tonnes a year, and called Canada's existing trade protections "woefully inadequate" to sustain two domestic producers.
"Stelco cannot continue to produce cold-rolled and coated steel products without incurring significant losses that are not sustainable. As such, we will continue with the idling of Hamilton Works."
The legal fight is over the promises Cleveland-Cliffs, Stelco's U.S.-based owner, made when Ottawa approved its takeover in 2024 — approval was contingent on keeping at least the same number of unionized workers and the vast majority of non-unionized employees for five years. Joly had demanded Stelco explain how it would honour those commitments, gave it five days to respond, and raised the prospect of legal action. Simon's answer: the claim that the layoffs breach the undertakings is "false," because the commitments do not prohibit layoffs or require headcount to stay above a set level every day of the five years. He added that Ottawa had notice as early as July that the Hamilton lines might be idled indefinitely, and that federal officials themselves later floated revising the commitments. Joly's public position, stated October 10, is that the commitments remain in force and all options are on the table. Simon also rejected Ottawa's offer of funding toward maintenance and capital costs in exchange for keeping workers on, calling it "a last-ditch effort to cover for an inadequate Canadian trade regime" that does nothing about the missing orders.
Stelco says the Hamilton finishing operations can restart with minimal additional cost and time when conditions change — but it gave no timetable. For now, up to 500 Ontario steelworkers are losing their jobs while the file sits on the minister's desk under review.
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