Appeal court to hear on Ottawa-U.S. Steel deal
15 October 2015
The bid to open the secret agreement between the federal government and United States Steel Corp. that ended a prosecution against the steel maker has been given new life.
The Ontario Court of Appeal has granted stakeholders in the U.S Steel Canada Inc. creditor-protection hearing the right to appeal a ruling by the Ontario Superior Court that sealed the agreement.
The 2011 agreement ended the federal government’s prosecution of U.S. Steel under the Investment Canada Act, which came after the Pittsburgh-based steel maker broke promises it made to Ottawa when it purchased then-Stelco Inc. in 2007. The company broke commitments made on jobs and steel production in Canada, but argued it had no choice because the recession of 2008-09 caused demand for steel throughout North America to plummet.
The settlement agreement provided new and enhanced undertakings by U.S. Steel, the government said when it announced the 2011 settlement.
The Ontario Superior Court rejected requests by such stakeholders as the United Steelworkers, salaried employees and retirees, the Ontario goverment and the City of Hamilton that details of the agreement be released.
The stakeholders said without the details of the agreement they could not properly assess the state of the company or participate properly in restructuring discussions under the Companies’ Creditors Arrangement Act. U.S. Steel Canada has been operating under CCAA protection since September, 2014.
Justice Herman Wilton-Siegel of the Ontario Superior Court ruled that the CCAA did not give him authority to override the confidentialty provisions of the Investment Canada Act.
A three-member Ontario Court of Appeal panel will examine his decision.