Cleveland-Cliffs CEO Lourenco Goncalves has blamed Canada’s government as the driving force behind the company’s plans to lay off hundreds of Stelco steel workers in Ontario.
During an earnings call Monday, he said that Canada’s domestic market for galvanized steel, which has a zinc coating applied to prevent rust and corrosion, is not big enough for producers Stelco and ArcelorMittal, as well as the “avalanche of imports” that have not been adequately reduced by the country’s tariff-rate quota system.
Goncalves said he and other steel producers have advised Canada’s government on steps needed to address the issue, but “we were not successful.” Last quarter, he mentioned possible negative outcomes of inaction. Canada countered with “last-minute” financial support that, Goncalves argued, Stelco does not need.
“The last piece of the puzzle to be addressed by the Canadian government is galvanized steel,” he told investors on the call. “And then we would be able to bring the workers back and restart production at the galvanized department in Hamilton, Ontario.”
On Sept. 28, Cleveland-Cliffs moved to temporarily lay off up to 500 steelworkers at Stelco operations in Hamilton and Nanticoke, Ontario, citing the impact of elevated U.S. tariffs on galvanized steel, the Globe and Mail reported. As part of its acquisition of Stelco, Cleveland-Cliffs agreed to maintain at least the same number of unionized workers in Canada for five years.
Melanie Joly, Canada’s minister of industry, has warned Cleveland-Cliffs the layoffs would go against its agreement and urged the company to implement employment guarantees or face possible legal action.
“We will use the full force of the law and every tool at our disposal to keep this strategic capacity operational,” Joly posted Friday on social media platform X. “They must keep jobs in Canada or face the prospect of having to sell their Canadian assets.”
Despite the layoffs, Stelco has recently become profitable. Canada’s enhanced tariff-rate quotes implemented in December 2025 and later updated in June have worked for hot-rolled steel, Goncalves said. As a result, he noted that Stelco’s third quarter was its strongest since the company was acquired two years ago.
If Canada’s government used its power to unilaterally block or severely reduce imports of galvanized steel into its domestic market, Goncalves said Stelco could “immediately bring back all the temporarily laid-off workers because that would immediately give us a market to sell and the ability to produce galvanized steel.”
