The Minister of Industry in Canada is urging the Competition Bureau to look into the parent company of Stelco after its CEO revealed to CBC News that his acquisition of the Hamilton steelmaker was aimed at preventing it from undercutting his operations in the U.S.
On Friday, Mélanie Joly announced that she has reached out to the competition commissioner, requesting a review to determine if Cleveland-Cliffs’s actions violated the Competition Act.
“If the negotiations and acquisition were carried out in bad faith, Canadians deserve transparency. The company should face the repercussions,” she stated.
During an interview last week, Cleveland-Cliffs CEO Lourenco Goncalves told CBC’s Power & Politics with David Cochrane that he purchased Stelco to prevent the company from flooding the U.S. market, which would negatively impact his own business.
Industry Minister Mélanie Joly stated that she contacted the government’s legal team after the CEO of Stelco’s American parent company disclosed that his motivation for acquiring the Hamilton steelmaker was to prevent it from undercutting his U.S. operations.
Joly described Goncalves’s statement as a “shocking admission” and indicated she consulted with the department’s legal advisors to assess if there should be any legal consequences.
“It is the duty of the commissioner to investigate this situation thoroughly and, if necessary, take proper actions,” she remarked on Friday.
Goncalves’s comments were made following Joly’s ultimatum to the company to reverse its layoffs at Stelco or risk facing legal repercussions.
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The government asserts that when it acquired Stelco, the company committed to maintaining its unionized workforce at 2024 levels through 2029.
Joly’s request coincides with the conclusion of Ottawa’s 15-day timeframe for the company to respond to the alleged breach of these commitments.
Cleveland-Cliffs contends that it is in “full compliance” with the obligations established under the Investment Canada Act.
Conservative MP Michael Guglielmin, a former executive in the steel industry, has urged Joly to initiate a lawsuit against Cleveland-Cliffs, accusing her of deflecting accountability to the competition commissioner.
“It has been 31 days since Minister Joly sent her initial letter to Stelco, threatening legal action if they did not reverse their layoffs,” he stated. “Today’s announcement is not new. Conservatives have been calling for the minister to take legal action for weeks.”
On September 28, Stelco announced intentions to lay off as many as 500 employees at its steel mills in Hamilton and Nanticoke, Ontario, attributing the decision to U.S. tariffs, weak demand for Canadian steel, and competition from imported steel products.
Nonetheless, both Cleveland-Cliffs and the union have recently confirmed that only 175 employees have been laid off thus far, all from the Hamilton location.