Canadian Government Threatens To Punish Steel Maker Over Tariff Layoffs

The fundamental nature of socialist economics is to use governments to rig markets in favor of certain groups and outcomes.  Canada has been exploiting this dynamic for decades (along with their proximity to the largest consumer market in the world), in order to secure optimal benefit for their GDP and their liberal leadership.  US tariffs, love them or hate them, are one of the few mechanisms available to level the playing field against countries (and corporations) that abuse global trade. 

Rather than admitting that the jig is up and accepting that trading with the US is going to require more balanced arrangements from now on, the Mark Carney Administration has decided that Canada is entitled to special privileges when engaging in commerce with America.  If they can’t have unfair advantages, then they will go to war with the US instead. 

It sounds like madness given that Canada relies on the US for over 76% of their export sales, and exports are over 30% of Canada’s total GDP.   Meanwhile, the US only sells 16% of its exports in Canada, and exports make up a comparatively small 11% of American GDP.  There’s no debating it:  Without the US, Canada’s economy will implode.  Without Canada, the US will barely notice. 

Carney’s war campaign is already off to a rocky start, with 42,000 jobs lost in August and another 68,000 jobs lost in September.  That’s 110,000 workers laid off in only two months in a country with a population roughly the same size as California.  The majority of these losses are due to Canadian-based manufacturers and companies shifting operations outside the country, or shuttering factories until the tariff situation changes. 

These mass layoffs are embarrassing Carney, who ran his campaign on a platform of big job gains.  In response, the liberals are applying typical socialist pressure in order to prevent job losses from continuing. 

Ottawa is weighing legal options against steel producer Cleveland-Cliffs (the U.S. owner of Canada-based steelmaker Stelco) after the company rejected a federal demand to stop planned layoffs.  Current projections expect around Stelco layoffs for approximately 500 employees.    

To put this in perspective, consider the audacity of the threat:  A US based company opens steel plants in Canada and creates thousands of jobs.  Tariff negotiations fall apart because the Canadian government is too greedy to accept more balanced trade standards.  Tariffs then force Canadian based manufacturers to make cuts to stay solvent.  The Canadian government that demands those companies continue employing Canadian workers at a loss, and if they don’t, they will face fines, lawsuits and other legal punishments.  

Industry Minister Mélanie Joly said the government expects Stelco to honor the employment undertakings it gave under the Investment Canada Act when Cleveland-Cliffs acquired the company in 2024 (Selco had little choice in the matter and this was before tariffs were considered a possibility). 

Those commitments included maintaining at least the same number of unionized employees and the vast majority of non-unionized employees for five years. Joly stated that a business decision or change in market conditions cannot justify non-compliance, and that “everything is on the table.”  In other words, they don’t care about the extraordinary circumstances of the trade war they created.      

Under Section 40 of the Investment Canada Act, possible measures include financial penalties, a court order requiring compliance, or an order forcing the company to sell its Canadian assets (which would create far more job losses). Joly did not confirm that court action would be launched; she said the government is reviewing Cleveland-Cliffs’ letter and remains open to discussions.  Stelco has already begun the layoffs.  

You create jobs in their country, and then they decide this is your obligation instead of you doing them a solid.  In other words, you can check out any time you like, but you can never leave.  This is the way of socialism.  

Carney was supposed to be the liberal but “improved option” over former Primer Minister Justin Trudeau, who left the office in disgrace and the nation with a faltering economy.  However, Carney is proving to be even more of a disaster than Trudeau.     

The liberals in Canada have also been beating their chests and posturing over the trade war, declaring that they don’t need the US and will find “better partners” who “share their values”.  This is clearly not going to go the way they imagine, given the immense cost increases associated with exporting to anyone other than the US.  There is no viable consumer replacement for the US market.  

Layoffs are likely to accelerate in Canada over the next several months unless a deal is struck in the near term.