Stel Salaried Pensioners Organization (SSPO) Inc.

Mr. Rodney B. Mott June 5, 2006
President and Chief Executive Officer
Stelco Inc.
386 Wilcox Street
P.O. Box 2030
Hamilton, Ontario L8N 3T1

Dear Mr. Mott:

Re: Unilateral Reduction of Health and Welfare Benefits for Salaried Retirees

We are writing to request a meeting to discuss the impact of the announced reductions to the health and welfare benefits currently provided to Stelco Pensioners.

The Stel-Salaried Pensioners Organization (the "SSPO") continues to represent the interests of over 4,200 salaried pensioners who retired from Stelco Inc., the Lake Erie Steel Company, Stelpipe Ltd. and Welland Pipe Ltd. (the "Stelco Pensioners").

On behalf of our membership, we would like to register our strong opposition to the unilateral reduction of our health and welfare benefits. When we retired, it was with the understanding that our health and welfare benefits would continue, without reduction, for the rest of our lives. It is our position that our health and welfare benefits crystallized at retirement, that we are vested in those benefits, and that they cannot be reduced.

We are also disappointed that these changes to our health and welfare benefits were announced without any consultation with the SSPO or any of our membership.

It is our belief that, with the provincial loan agreement, Stelco has the means to achieve its stated goal of returning the company to profitability without reducing the health and welfare benefits provided to Salaried Pensioners. These benefits to salaried pensioners remain affordable and reductions are not necessary.

We are considering the pursuit of all legal remedies to the full extent of the law to restore our health and welfare benefits to the levels promised to us on our retirement dates.

In addition, the announced reductions will be felt severely by the most vulnerable of our membership, as the cuts were made with absolutely no regard for the hardship they will impose on those without the financial means to personally absorb the additional costs. This situation requires discussion.

We look forward to your response including dates on which you will be available to discuss these issues.

Yours truly,

G.W. Dallin

For the SSPO Board of Directors