The Investment Canada Act, for the first time ever, is prosecuting a foreign corporation. U.S. Steel is being sued for not abiding by the acquisition terms set up by the Canadian government.

“The government is seeking up to $10,000 a day in penalties — or up to $14.6 million for the period in question — arguing that U.S. Steel broke its signed commitments to keep the average workforce at about 3,100 over the three years since its acquisition of Stelco, as well as maintain production levels,” according to The Canadian Press

Although it has been a year and a half after the case was started between Industry Minister Tony Clement and U.S. Steel, there is no set date when the case will be tried.

The Canadian Press says “In June, the Federal Court rejected U.S. Steel’s attempt to declare the whole proceeding unconstitutional.

On Monday, the U.S. giant was back before the Federal Court — this time arguing that a previous judge had erred in allowing intervener status to the union and a company that may want to buy the Hamilton and Nanticoke, Ont., operations.

The injection of the union, along with potential bidder Lakeside Steel Inc., into the case “has fundamentally altered the nature of the proceedings,” argued U.S. Steel lawyer Michael Barrack.

After a morning of arguments and counter-arguments, Justice David Near reserved judgment.

U.S. Steel has also appealed the rejection of its original challenge on the issue of the constitutionality of the investment act, with arguments scheduled for December.” U.S. Steel did admit to scaling back operations because of the recession, but “Lakeside lawyer David Wilson gave an alternative explanation for the curtailment of the Canadian operations — the Buy America provisions in the U.S. infrastructure stimulus programs. “Buy America created an incentive for U.S. Steel to favour its American operations over its Canadian operations,” he said.U.S. legislation favoured American suppliers on projects supported by stimulus funds.

In his submission, Barrack, the U.S. Steel lawyer, said allowing the union and Lakeside to intervene has changed the case because aside from the penalties, Lakeside is asking the court to force a sale of the company back into Canadian hands. Lakeside has expressed interest in purchasing the former Stelco operations.”

Lakeside said their reason for being involved was that the “case was a matter of public interest that went beyond a dispute between U.S. Steel and the minister of Industry.” Canada’s federal government said they will review the Investment Canada Act to ensure there will be a net benefit to Canada if foreign firms takeover local companies.