Canada Drops Suit Against US Steel
The Minister of Industry for the government of Canada announced yesterday (December 12th) they had reached a settlement with U.S. Steel after the company provided the country “…significant new and enhanced undertakings under the Investment Canada Act….” The Minister of Industry has accepted the company’s new commitments and in turn has requested that the court action against U.S. Steel be “discontinued.”
A U.S. Steel spokesperson told SMU in an email this morning: "We are pleased to have resolved amicably this unfortunate dispute with the Government of Canada. The resolution reflects our ongoing and long term interest in doing business in Canada. We now turn our full attention to producing and selling steel products in Canada consistently with our core values of workplace safety and environmental stewardship. We intend to be valued corporate citizens in Canada."
In Minister Christian Paradis press statement he detailed the new commitment made by U.S. Steel to the Canadian government:
"Recently U. S. Steel approached me with a proposal for new and enhanced undertakings. After extensive negotiations a settlement has been reached that demonstrates U. S. Steel's sustained commitment to operating in Canada.
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.
Further, U. S. Steel has committed to make financial contributions of $3 million toward community and educational programs in Hamilton and Nanticoke. This contribution starts immediately. U. S. Steel will contribute $1 million by early February 2012.
Going forward, this settlement means that U. S. Steel will continue operations in Canada that provide economic benefit to the communities of Hamilton and Nanticoke.”
When U.S. Steel purchased the former Stelco plants – Lake Erie and Hamilton – in 2007 they had made commitments to the Canadian government of minimum production and employment levels. In 2008 we had the financial melt-down and subsequent recession which U.S. Steel responded to by shutting down and laying off workers at both facilities. The company also locked out the workers at both plants for almost one year each (at different times as their contracts do not run concurrent with one another) in order to change the retirement provisions at both facilities.
U.S. Steel was sued by the Canadian government over violations to the Investment Canada Act. After appealing the validity of the suit and failing to convince a Canadian court in their challenge to the constitutionality of the lawsuit, U.S. Steel was facing the prospect of losing the original suit in court and facing fines and other penalties. This new agreement stops legal proceedings against the company by the government of Canada.
Steel Market Update requested a comment from USW Local 1005 which represents the workers at Hamilton and we are also attempting to find out if the agreement calls for USS to fire up the blast furnace at the Hamilton facility. We are waiting responses on both at this time.