Canadian multinationals Stelco and Stellantis are facing scrutiny for allegedly breaking their commitments to the Canadian government. Cleveland-Cliffs Inc., the U.S.-based parent company of Stelco, recently laid off up to 500 workers at its Hamilton and Nanticoke plants, citing U.S. tariffs and weak demand. This move comes despite Cleveland-Cliffs posting its strongest quarter in three years, with US$5.61-billion in revenue. Ottawa claims these layoffs violate the binding commitments Cleveland-Cliffs made under the Investment Canada Act when it acquired Stelco in 2024, which included promises to maintain employment and production until 2029.
Similarly, Stellantis NV is shifting production of the next-generation Jeep Compass from Brampton, Ontario, to Belvidere, Illinois, a decision Ottawa asserts violates Stellantis’ investment agreement. The company received over $220-million in Canadian public support but denied breaching its contract. Between 2022 and 2025, Stellantis paid almost €15-billion in dividends to shareholders, raising questions about the return on investment for Canadian taxpayers.
These cases highlight a broader issue in Canada’s branch-plant economy, where foreign-owned companies prioritize their own financial interests over commitments to Canadian jobs and production. Industry Minister Mélanie Joly has given Cleveland-Cliffs 15 days to reverse the Stelco layoffs or face legal action, including monetary penalties and a possible forced divestiture. Critics argue that the government’s reliance on foreign ownership has degraded productivity and made Canada economically vulnerable.
Experts suggest redirecting public funds toward Canadian-owned industries to ensure lasting jobs and ownership. However, governments hesitate due to potential conflicts with established interests and trading partners. The reshoring trend is expected to continue, prompting calls for a rethink in how Canada supports and builds domestic businesses to ensure long-term prosperity.