Chris Selley: Handing a ‘blank cheque’ to Stelco wouldn’t have been so unusual for Canada
- Stelco, a historic Canadian steel company, is indefinitely idling its cold-rolled and galvanized operations, risking 350 to 500 jobs despite government conditions tied to its 2024 sale to Cleveland-Cliffs.
- Prime Minister Mark Carney expressed disappointment and vowed to enforce employment conditions, but skepticism remains about the government's ability to hold the company accountable based on past experiences with industrial bailouts and corporate relocation.
- The article highlights a recurring pattern in Canada where politicians protest corporate job cuts or relocations but rarely recover public funds or prevent such moves, citing examples like Bombardier's CSeries sale and auto industry bailouts.
- While government subsidies and corporate welfare have become entrenched in Canada’s political landscape, the steel industry no longer dominates Hamilton’s economy, making Stelco less critical despite the city's identity as "Steeltown."
Barring some successful last-minute inducement, Stelco — that is, the Steel Company of Canada, est. 1910, Hamilton, Ont. — is “indefinitely” idling its cold-rolled and galvanized operations, at an estimated cost of 350 to 500 jobs.
Prime Minister Mark Carney is “very disappointed.” He has vowed to pursue remedy under the terms of the government approval of Stelco’s 2024 sale to Cleveland-Cliffs, the Ohio-based steel colossus. (Alas for Hamilton, and every other steel town, there are several steel towns across North America.)
Those terms, as the government tells it, stipulate that Stelco must “continue to employ at least the same number of unionized employees and the vast majority of non-unionized employees as were employed when the transaction was announced,” per a statement from Innovation, Science and Economic Development Canada. The condition is supposedly “binding.”
We’ll see. I wouldn’t run to Polymarket to bet on it. If those rules were transparently, unambiguously binding, we presumably wouldn’t be having this discussion. Cleveland-Cliffs would just sheepishly be cutting cheques or abandoning its relocation plans entirely and erecting some kind of steel apology statue in Hamilton’s Jackson Square.
Over the years, how many politicians have you heard saying, “I’m mad as hell and will see them in court” after a company pulls out, steps back or rejiggers Canadian versus international operations. Do you ever remember anything coming of all that high dudgeon? When it does, it’s usually pretty meagre.
It’s tough to demand your money back when the recipient is insolvent, of course. Come on down, Sweden’s Northvolt and its now-abandoned $7-billion battery plant near Montreal.
It’s just as tough if the company is a “Quebec champion.” Remember Bombardier up and selling its CSeries program to Airbus for a song? We paid for those stupid planes, which are now Airbus A220s. Delta Air Lines has 93 of them in their fleet. Air Canada has 47 flying around, laughing at us, mocking our very sovereignty.
The 2008 bailouts at GM and Stellantis came with a $2.8-billion loss to taxpayers, according to one analysis. Then there were the many other trips to the well for the Big Three in southern Ontario. The feds are taking Stellantis to court for moving Jeep Compass production from Brampton, Ont., after taking hundreds of millions of taxpayer dollars to retool the plant.
And there are many other examples, and they follow a familiar pattern: “You can’t do that!” says politician; company does it; everyone has a few minutes to rage; and then regular life resumes, with no one really following up on how much money, if any, we get back or don’t.
Global News sources framed the Stelco situation interestingly, one can reasonably presume with government approval. Team Canada apparently tried “everything we could.”
But, one source said, Cleveland-Cliffs CEO Lourenco Goncalves “quite literally said ‘nope,’ we don’t want your help unless it’s a blank cheque to the tune of billions with no conditions.”
Well then … you didn’t try everything you could, did you? And honestly, it seems almost quaint at this point to stress over “blank cheques.” What else would you call all the loan guarantees, tax breaks and other inducements that go flying out across the border to greener pastures? Call it what you like, why would it be a line in the sand?
The virtue of corporate welfare achieved total ideological capture in Ottawa some time ago. Once Conservative prime minister Stephen Harper learned to stop worrying and love the subsidies, it was all over.
The Dawn of Trump has made it downright competitive: “Only (insert party here) will support Canadian workers while this appalling government allows jobs to escape,” which is code for “spending outrageous amounts per job — amounts that, if given directly to the affected employees, would lead to hundreds of new, healthy, productive and self-sustaining businesses and tremendous happiness.”
I don’t know what I expected from Carney on this front, but I don’t think I expected such full-bore support for government involvement in industry. Certainly it has never made more sense politically. God knows the Americans do this sort of thing too — they tend to be less abashed about it — and we are in an all-out pissing contest with Washington that we didn’t start or want, and the point of competitive pissing, like every other sport, is to win.
For the record, per Hamilton’s local investment council, there are 441,000 employed people in the city’s metropolitan area, but it’s not called Retail-and-Wholesale Jobstown (the single biggest employment sector). It’s Steeltown, and therefore it must always make steel, even more than Windsor, Ont., must always make automobiles and parts. We cannot abide change. But the mill isn’t essential for the Hamilton economy.
I have much respect for steelworkers. It’s one of the proudest trades. But there just aren’t that many of them. Stelco can’t drive the agenda any more than any other company employing a couple of thousand people.
National Post cselley@postmedia.com