U.S. Steel and Canadian Government Reach Settlement in Investment Canada Act Enforcement Proceedings

Last month the Canadian Minister of Industry, the Honourable Christian Paradis, announced that "U.S. Steel has given significant new and enhanced undertakings under the Investment Canada Act (Act) that provide the basis for the government to settle its lawsuit against U.S. Steel." Minister Paradis has accepted U.S. Steel’s new commitments (many of which run to 2015) and requested that that the Attorney General of Canada discontinue the court action against U.S. Steel.


In 2007, U.S. Steel acquired Stelco Inc. The acquisition was subject to review and approval under the Act. As part of the approval process, U.S. Steel made undertakings (including production and employment commitments) to the Canadian government to demonstrate that the acquisition was likely to be of net benefit to Canada. In March 2009, U.S. Steel shut down two Canadian plants, citing market conditions as forcing the closures and layoffs. In July 2009, the Canadian government, not satisfied that U.S. Steel was honouring its commitments, sought a court order requiring U.S. Steel to comply with its undertakings on production and employment. This represented the first time that the Canadian government has sought a court order to enforce undertakings under the Act. Up until last month, U.S. Steel and the Canadian government have been involved in legal proceedings in connection with the government’s 2009 application.

Settlement Between Government of Canada and U.S. Steel

The Minister of Industry said that the settlement "demonstrates U. S. Steel's sustained commitment to operating in Canada." Minister Paradis further explained:

"U. S. Steel's new commitments, many of which run to 2015, will provide benefits that in all likelihood would not have been obtained through the court process. Under the settlement, U. S. Steel has committed to continue to produce steel in Canada; operate at both Lake Erie and Hamilton plants until 2015, generating continued economic activity; and make at least $50 million in capital investments to maintain the Canadian facilities by December 2015, over and above its original undertaking to invest $200 million by October 31, 2012."

U. S. Steel also committed to make financial contributions of $3 million toward community and educational programs in areas where the plants are located.