Stelco to lay off up to 500 workers amid production shift, citing U.S. tariffs

Stelco Holdings Inc. is laying off hundreds of workers as it moves to idle finishing operations at its plant in Hamilton, Ont. amid a production shift spurred by U.S. tariffs.

In a memo to employees seen by The Canadian Press, the company says up to 500 employees could be affected across its Hamilton and Lake Erie facilities. 

The company said the action was "unfortunate but necessary" to ensure its survival, noting the imposition of U.S. tariffs has significantly shrunk the market for its cold rolled and galvanized products.

"In Q2 2026, demand for these products in the markets traditionally serviced by Stelco declined by almost 25 per cent over the quarterly average in 2024," the memo reads. 

"This includes a 10 per cent decrease in market demand in Canada as our customers and manufacturers of steel products are also being challenged by the trade crisis."

Stelco said that while actions taken by the federal government have reduced imports, volumes remain too high for Stelco to be able to bridge the gap the trade tensions have created in the market.   

The company says the indefinite idle is part of a plan to concentrate production at its Lake Erie facility in Nanticoke, Ont.    

Pat Persico, a spokesperson for parent company Cleveland-Cliffs Inc., says Stelco's product mix will change but that the tonnage of steel production will not be affected.     

Persico added that the company expects a "significant" number of employees affected by the indefinite idle at its Hamilton facility to be absorbed by its Lake Erie Works operations. 

"Very importantly, job opportunities at Lake Erie Works will be offered to Hamilton employees," he said in a statement. 

U.S.-based Cleveland-Cliffs Inc. acquired Stelco in 2024.

The move is the latest in a series of challenges for Canada's steel industry. 

Last December, Algoma Steel announced plans to lay off more than 1,000 workers, amounting to about a third of its total head count. Alongside the layoffs, it accelerated a transition to new equipment in response to U.S. tariffs. 

In June of last year, ArcelorMittal Long Products Canada announced it was closing its wire drawing mill in Hamilton, putting 153 employees out of work. 

This report by The Canadian Press was first published Sept. 28, 2026.

By Daniel Johnson | Copyright 2026, The Canadian Press. All rights reserved.