Court to Reconsider Whether 'Secret' Deal Between U. S. Steel, Canadian Government Can Be Made Public
10/15/2015 - The Canadian courts will be taking a look at whether a 4-year-old deal between United States Steel Corporation and the Canadian government can remain confidential.
The deal, reached in 2011, ended a lawsuit against the steelmaker over broken promises relating to its acquisition of the former Stelco operation, now called U. S. Steel Canada (USSC).
As The Hamilton Spectator newspaper explains:
“The controversial deal was reached in 2011 after Ottawa took the Pittsburgh, Pa.-based steelmaker to court under the Investment Canada Act over reneging on promises made before buying the former Stelco Inc. in 2007. Commitments on jobs and steel production were broken while the company argued unforeseen hardships in the North American steel market gave it no choice.”
The Investment Canada Act governs foreign investments in Canada.
With U. S. Steel Canada having entered creditor protection, some, including the United Steelworkers union and the Ontario provincial government, have been pushing for the agreement to be unsealed.
Without the details, they could not properly assess the state of the company or participate properly in restructuring discussions, they argued, according to The Globe and Mail newspaper.
The groups had asked the judge overseeing USSC’s creditor protection case to open the agreement. While he agreed that it was a reasonable thing to do, he said he couldn’t because he didn’t have the authority under Canada’s Companies’ Creditors Arrangement Act.
Now, the newspapers said, the Ontario Court of Appeal has granted the groups the right to appeal the judge’s ruling.
Interest in having the terms of the deal made public has been all the more invigorated by the judge’s decision to allow U.S. Steel to split off USSC into an independent company and to excuse it from commitments to making pension fund contributions and to paying for retiree health insurance.
The decision also establishes a 15-month timeline for USSC to become fully independent of U. S. Steel.
James Moore, Canada’s Industry Minister, said the federal government could again sue USSC over the broken commitments, calling its actions “unacceptable.”
"We are the only government that has taken U. S. Steel Canada to court and are not afraid to do so again," he said, according to the CBC.
As The Hamilton Spectator newspaper explains:
“The controversial deal was reached in 2011 after Ottawa took the Pittsburgh, Pa.-based steelmaker to court under the Investment Canada Act over reneging on promises made before buying the former Stelco Inc. in 2007. Commitments on jobs and steel production were broken while the company argued unforeseen hardships in the North American steel market gave it no choice.”
The Investment Canada Act governs foreign investments in Canada.
With U. S. Steel Canada having entered creditor protection, some, including the United Steelworkers union and the Ontario provincial government, have been pushing for the agreement to be unsealed.
Without the details, they could not properly assess the state of the company or participate properly in restructuring discussions, they argued, according to The Globe and Mail newspaper.
The groups had asked the judge overseeing USSC’s creditor protection case to open the agreement. While he agreed that it was a reasonable thing to do, he said he couldn’t because he didn’t have the authority under Canada’s Companies’ Creditors Arrangement Act.
Now, the newspapers said, the Ontario Court of Appeal has granted the groups the right to appeal the judge’s ruling.
Interest in having the terms of the deal made public has been all the more invigorated by the judge’s decision to allow U.S. Steel to split off USSC into an independent company and to excuse it from commitments to making pension fund contributions and to paying for retiree health insurance.
The decision also establishes a 15-month timeline for USSC to become fully independent of U. S. Steel.
James Moore, Canada’s Industry Minister, said the federal government could again sue USSC over the broken commitments, calling its actions “unacceptable.”
"We are the only government that has taken U. S. Steel Canada to court and are not afraid to do so again," he said, according to the CBC.
