Up to 500 workers face layoffs as the U.S.-owned steelmaker blames tariffs — but the company made a legally binding commitment to protect these jobs when Ottawa approved its sale in 2024.

Stelco Holdings Inc. is indefinitely idling the cold-rolled and coated operations at its Hamilton Works plant, a decision the company says is necessary for its survival but that Prime Minister Mark Carney and the local steelworkers' union say breaks a legally binding commitment made just two years ago. The wind-down began October 9, and the company says up to 500 employees could be affected across its Hamilton and Nanticoke, Ont. operations.

What Stelco actually said

In a memo obtained by CBC News, Stelco vice-president of sales Frederic Fafard told employees the move was "an unfortunate but necessary action to help ensure the survival of Stelco in what has become a challenging and unsustainable market for cold-rolled and coated products," pointing to "ongoing and sustained trade disruptions impacting the Canadian steel industry." The company said its market for these specific products has contracted sharply while foreign imports of the same goods remain elevated — a double squeeze of lost U.S. sales and continued competition at home.

United Steelworkers Local 1005 president Ron Wells confirmed 350 layoffs at the Hamilton site specifically, with the company shifting concentration to its Lake Erie Works plant in Nanticoke. Cleveland-Cliffs Inc., Stelco's Ohio-based parent company, said some affected Hamilton workers would be offered positions at Lake Erie Works — but Wells said there are only 46 openings there for the hundreds being laid off in Hamilton, calling the gap between the offer and the need stark.

Why this is different from an ordinary layoff

What makes this case politically charged is a specific promise: when Ottawa approved Cleveland-Cliffs' $3.4 billion purchase of Stelco in 2024, the company agreed to maintain Stelco's roughly 1,000-employee Canadian footprint and keep its headquarters in Hamilton for five years, as a condition of the deal going through. Carney, speaking in Vancouver, said the government was "very disappointed" by the decision and that affected workers and their families had been "betrayed" by the company, adding that Ottawa would pursue Stelco "to the full extent of the law" if the commitments were breached. Industry Minister Mélanie Joly has also been named by the union as responsible for enforcing the original takeover conditions.

Not an isolated incident

Stelco's announcement lands in a steel sector already under pressure: U.S. tariffs of up to 50% on Canadian steel and aluminum have been in place since Trump signed an executive order in June, on top of broader tariffs affecting the industry since earlier in his term. Economist Colin Mang of McMaster University called the layoffs "a consequence of our trade war with the United States," noting Stelco's position is worsened by continued import penetration from third countries even as its own U.S. access has shrunk. The same week, Trump touted a new steel plant investment in Iowa, framing it as proof his tariffs are bringing steel production back to American soil — the mirror image of what's happening in Hamilton.

What happens next

The dispute now sits in an unusual position: a trade policy fight playing out through a specific corporate promise rather than through tariff schedules alone. Whether Ottawa can or will actually enforce the five-year jobs commitment against a company citing genuine market conditions is untested, and the outcome will likely shape how seriously future foreign buyers treat similar conditions attached to Canadian industrial takeovers. For Hamilton specifically, the mayor has said "the fight is not over," while the 350 laid-off workers face the layoffs taking effect with limited internal transfer options and no clear end date to the trade conditions that caused them.