US Steel fights lawsuit levied by Canadian government

Tuesday, 12 January 2010 21:19:53 (GMT+2)

In a Toronto hearing held on Tuesday, US Steel Corp. urged a Canadian judge to dismiss a federal lawsuit which accuses the firm of violating the Investment Canada Act.

In court, Michael Barrack, US Steel's council, summarized the case, filed by Trade Minister Tony Clement last summer. "The government is asking for C$14 million (US$13.5 million) in fines, or an order forcing US Steel to sell the Canadian operations for failing to meet commitments that include maintaining employment levels and steel production at the plants in Hamilton, Ontario," said Barrack.

Barrack said US Steel is challenging the case on the grounds that the Investment Canada Act is unconstitutional because it is too vague and does not provide clear options for a company to defend itself.

US Steel's constitutional challenge to the Act is the first since it was put into law in 1984. The Act provides for the review of "significant investments" (assets worth over $312 million) in Canada by non-Canadian entities. The Canadian government will make its arguments in court on Wednesday.

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