Canadian Appeal Court rules against US Steel

The Appeal Court found that the case presented by US Steel, in an attempt to have the lawsuit thrown out entirely was based on "opinion and argument" rather than evidence.

Initially filed in July 2009, the case alleges US Steel failed to meet production and employment agreements made Stelco Inc. when it acquired the plant in 2007. 

At the time of the sale, US Steel made commitments to the Province of Ontario with regard to Stelco's main pension plans and operations, stating they would make "significant capital expenditures" at the Hamilton and Lake Erie facilities, as well as to facilitate the "continuing development of steelmaking technology in Ontario".  US Steel further guaranteed Stelco's pension funding obligations under a pension agreement entered into by Stelco and the Province in 2006.

The controversy at the heart of the case centers around US Steel's decision to temporarily close mills two separate mills in Ontario due to the global recession.   US Steel did not deny that promises were in fact broken, but instead compelled the Court to consider how the global economic meltdown impacted world demand for steel. 

In finding in favor of the crown, the Federal Court of Appeal referred to the role and purpose of the Investment Canada Act (including encouraging employment opportunities for Canadians) as a "valid public purpose."

"This ruling stands up for the principles for which the Investment Canada Act was created: the economic and social benefit of Canadians and Canadian communities in any foreign ownership of our natural resources and industries," said Ken Neumann, United Steelworkers (USW) National Director for Canada.

"This is an important day in the process of making companies like US Steel live up to their promises and provide a ‘net benefit' to Canada, Canadians and our communities," said Paula Turtle, USW's Senior Legal Counsel.

"The federal court's decision not to stay the proceeding of this important case underscores the law's role in upholding important public policy, and the urgency of these matters to Canadian workers and communities," said Neumann.