Industry Minister Mélanie Joly says the government is still reviewing Stelco’s response to Ottawa’s legal threat over hundreds of layoffs, but warns a court could force the company to sell its Canadian assets, on Wednesday.

Stelco began issuing layoff notices this week after announcing plans to lay off up to 500 workers at its Hamilton and Lake Erie facilities.

On Oct. 5, Joly wrote to Stelco President Paul Simon, giving its American parent company, Cleveland-Cliffs, five business days to show how it would honour the legally binding commitments it made when it acquired Stelco in 2024, including maintaining unionized employment levels, or face possible legal action.

“A business decision, or even a change in market condition cannot be used to not follow the condition,” Joly said, adding that the government is still in the process of reviewing the letter.

Under Section 40 of the Investment Canada Act, Joly said, a court could force the company to comply with its commitments, impose financial penalties or order it to divest its Canadian assets.

“Everything is on the table,” she said. “I’m always open to sit down with the company and find a solution, but we’re looking at everything that is possible to keep jobs in Canada.”

Asked whether the government is moving ahead with a lawsuit, Joly declined to say, telling reporters she had already answered the questions.

Joly added she’s also been in contact with union leaders, calling what’s happening at Stelco and Hamilton “unacceptable.”

READ MORE: Federal government should ‘nationalize’ Stelco to protect jobs, says NDP Leader Avi Lewis

In its response, Stelco said they remain in compliance and instead, blamed the 50 per cent U.S. tariffs for its 58 per cent drop in cold-rolled and coated steel exports.

NDP Leader Avi Lewis and Ontario NDP Leader Marit Stiles have called on Ottawa to nationalize the company, arguing a court process would take years.

Meanwhile, Conservative Leader Pierre Poilievre wants Ottawa to sue right away.