Industry Minister Mélanie Joly has formally requested that the Competition Bureau investigate whether Cleveland-Cliffs Inc. (NYSE: CLF) acted in bad faith during its acquisition of Stelco Inc. The request follows testimony from CEO Lourenco Goncalves suggesting the takeover was intended to prevent Canadian steel from entering the U.S. market, potentially violating the Competition Act.
The move, reported by CTV News, marks a significant escalation in the dispute between the Canadian federal government and the U.S.-based steelmaker. Joly is seeking a thorough examination of the firm’s conduct, citing new evidence regarding the intent behind the 2024 acquisition that was not present when the Bureau previously issued a “no-action” letter.
Strategic Implications of the Competition Bureau Probe
- Regulatory Risk: The investigation targets the “bad faith” intent of the acquisition, which could lead to enforcement actions under the Competition Act.
- Employment Mandates: Ottawa is demanding compliance with legally binding commitments to maintain unionized employment levels through 2029.
- Potential Divestiture: Failure to resolve the dispute could result in court-ordered penalties of $10,000 per day or a forced sale of Stelco.
Joly Targets CEO Admissions of Market Control
The impetus for the investigation stems from statements made by Lourenco Goncalves regarding the strategic purpose of the Stelco purchase. According to CTV News, Joly pointed to Goncalves’ January 2026 testimony before a U.S. congressional hearing, where he stated the company acquired Stelco in part to prevent Canadian steel from flooding the U.S. market.
Here is my statement calling on the Competition Commissioner to review Stelco’s actions: pic.twitter.com/21oIQ9c12d
CBC News further reported that Goncalves made similar claims during an interview with Power & Politics, telling host David Cochrane, “I bought Stelco because I could not afford anymore having Stelco flooding the market here in the United States to the detriment of my own company.” Joly characterized these remarks as a “shocking admission” that indicates a disregard for fair competition within the Canadian marketplace.
The minister’s letter to acting competition commissioner Jeanne Pratt, obtained by The Globe and Mail, argues that these comments warrant a re-evaluation of the firm’s conduct. While the Bureau previously cleared the deal in 2024, Joly contends that the recent evidence regarding the firm’s intent necessitates new scrutiny.
Discrepancies in Layoff Figures and Employment Commitments
The conflict is centered on the labor force at Stelco’s Hamilton and Nanticoke, Ontario, facilities. On September 28, 2026, Stelco announced plans to lay off up to 500 workers, citing weak demand, competition from imports, and U.S. tariffs.
While the initial announcement suggested 500 job cuts, Cleveland-Cliffs and the union have confirmed that only 175 workers have been laid off to date, all located in Hamilton. Global News reported that the union representing Stelco workers stated only 40 jobs have been offered to impacted employees at the company’s Lake Erie facility.
The federal government maintains that Cleveland-Cliffs is in violation of obligations made under the Investment Canada Act, which reportedly required the company to keep unionized employee levels at 2024 levels through 2029. In an October 22 letter, Joly accused the company of championing U.S. tariffs on Canadian steel while simultaneously using those same tariffs to justify job cuts.
| Metric/Event | Details | Status/Source |
|---|---|---|
| Initial Layoff Estimate | 500 workers | Stelco (Sept 28) |
| Confirmed Layoffs | 175 workers | Cleveland-Cliffs/Union |
| Employment Guarantee | Maintain 2024 levels until 2029 | Investment Canada Act |
| Potential Daily Penalty | $10,000 per day | Federal Government |
Minister Faces Deadline Criticism
The timing of Joly’s request to the Competition Bureau coincides with the expiration of a 15-day deadline imposed by Ottawa for Cleveland-Cliffs to address the layoffs. Conservative MP Michael Guglielmin, chair of the Conservative Steel Caucus, has criticized the minister’s approach. According to CBC News, Guglielmin accused Joly of “shifting accountability” to the competition commissioner rather than pursuing direct legal action, noting it has been 31 days since her initial letter promising litigation.
Joly asks Comp Bureau to probe Stelco deal after CEO comments https://t.co/fF0XEHsmyu
Prime Minister Mark Carney has also weighed in on the matter. Global News reported that Carney stated it would be a “mistake” for Cleveland-Cliffs to fail to respect the obligations and commitments made during the acquisition.
Cleveland-Cliffs has maintained that it is in “full compliance” with its obligations. The company has attributed the workforce reductions to the 50% tariff on aluminum and steel imposed by the United States, a policy the company’s leadership has publicly supported. Despite the tension, Goncalves stated last week that he hopes to recall all workers before December 25, provided a plan to increase sales of Canadian-made steel to domestic customers succeeds.
Regulatory Uncertainty and Market Outlook
The Globe and Mail noted that while the Competition Bureau is an independent law enforcement agency, it is currently unclear what specific enforcement steps it might take. Industry experts suggest that if an investigation is launched, the timeline for a resolution could span months or even years.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
Joly asks Comp Bureau to probe Stelco deal after CEO comments https://t.co/mVMU4Qck9v
