Stelco Inc. has informed Ottawa it is not in violation of its Investment Canada Act job commitments, and it is proceeding as planned with hundreds of layoffs in Canada.

Stelco, which is owned by U.S. steelmaker Cleveland-Cliffs Inc., said on Sept. 28 that it was laying off up to 500 workers in Hamilton and Nanticoke, Ont., saying it couldn’t compete in galvanized steel as a result of the trade war.

When the federal government approved Cliffs’ $3.4-billion acquisition of Stelco in 2024, it imposed legally binding conditions, including maintaining at least the same number of unionized employees in Canada for five years, as well as the vast majority of non-unionized workers.

On Monday Industry Minister Mélanie Joly issued the Cleveland-based steelmaker an ultimatum to map out a plan within five business days for complying with its employment guarantees under the Investment Canada Act or possibly face legal action.

In the company’s response letter obtained by The Globe and Mail, Stelco president and general counsel Paul Simon on Friday told Ms. Joly the steelmaker is in fact not in violation of its commitments, citing a legal technicality around the promises, and the government’s own ICA guidelines.