Stelco CEO Lourenco Goncalves stated that the company is “having a great year” and “making money,” despite hundreds of Hamilton, Ontario steelworkers receiving layoff notices. The job cuts are attributed to an ongoing trade war fueled by U.S. President Donald Trump. Cleveland-Cliffs, Stelco’s parent company, bought Stelco in 2024 and Goncalves had previously assured Canadian officials of a secure future for the plant and its employees.
Goncalves described the layoffs as temporary and indicated plans to rehire workers, but the federal government views these actions as a breach of promises made during the takeover. Industry Minister Mélanie Joly has suggested potential financial penalties for Stelco or even a forced sale of assets. Goncalves has characterized Ottawa’s stance as bullying and harassment and stated the company is prepared for legal action.
Stelco’s Production Adjustments and Layoffs
Goncalves made these remarks during an interview with BNN Bloomberg on October 15. He explained the job cuts as a business decision aimed at concentrating production. Cleveland-Cliffs announced the partial closure of its Hamilton operation and the dismissal of up to 500 employees, citing U.S. tariffs as the cause.
In an October 9 letter to Joly, Stelco President Paul Simon reported a 58% decrease in Canadian exports of cold-rolled and coated steel to the U.S. compared to pre-trade war levels. Simon also mentioned the company’s preparation to restart its Hamilton finishing operations, though no specific timeline was provided. This situation occurs as Canada‘s broader job market faces challenges, with Statistics Canada reporting a loss of 68,000 jobs in September and Ontario’s unemployment rate reaching 7%.
Employment Standards and Government Support
In Ontario, the Employment Standards Act generally permits layoffs for up to 13 weeks within a 20-week period. This duration can extend to 35 weeks in a 52-week period if the employer continues certain payments, such as benefits. Layoffs exceeding these limits are typically considered terminations, potentially triggering termination and severance pay. Union agreements may have different layoff provisions. Provincial regulations also vary.
For eligible employees, Employment Insurance (EI) regular benefits provide 55% of average insurable weekly earnings, capped at $729 per week in 2026. The federal government has implemented temporary EI relief measures due to the trade war. For claims starting between October 11, 2026, and October 9, 2027, the one-week waiting period for EI benefits is waived. Severance or vacation pay will not delay or reduce benefits. Workers with extensive EI contribution histories may qualify for up to 20 additional weeks of benefits for claims initiated by June 12, 2027.
Laid-off workers are advised to apply for EI immediately, review their layoff notices and employment contracts for recall rights and benefit details, and mark the 13-week and 35-week layoff limits on their calendars. Consulting a union representative or employment lawyer is recommended if recall does not occur within these periods. Financial planning should account for EI-level income, and communication with lenders and landlords is advised before missing payments. Tapping into a Tax-Free Savings Account (TFSA) before a Registered Retirement Savings Plan (RRSP) is suggested, as TFSA withdrawals are tax-free and the contribution room is reinstated.
Given the potential for litigation between Ottawa and Cleveland-Cliffs and the absence of a restart date, workers are encouraged to plan for an extended period of unemployment, treating any recall as a bonus rather than a guaranteed income source. The situation at Stelco highlights the precariousness of employment amidst trade disputes and corporate restructuring, impacting workers who face immediate financial pressures.