Canada makes deal with U.S. Steel

Case for breaking job promises dropped, $50-million investment pledged

The federal government has dropped its case against U.S. Steel Corp. that started when Canada sought to fine the company for not following through with job-protection promises made when it bought Canadian steelmaker Stelco. In turn, the company has promised to invest an additional $50-million in Canada’s manufacturing industry until at least 2015.

In November 2011, Canada's top court granted the government the right to continue legal action against the steelmaker which could lead to fines of $10,000 a day, starting from Nov. 1, 2008. The ruling said U.S. Steel’s decision to shut down two former Stelco plants violated guarantees the company made about maintaining employment levels. The total fines were estimated to be more than $11 million.

"The government and U.S. Steel have come to an agreement that ends the court proceedings," Minister of Industry Christian Paradis told the House of Commons. “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.”

U.S. Steel will also contribute $3 million towards community and educational programs in Hamilton and Nanticoke, Ont., as part of the settlement, Paradis said.

Unions representing steelworkers say the deal with the American manufacturer betrays Canadian employees.

“This is an outrage,” said Canadian director of the United Steelworkers (USW) Ken Neumann. “Instead of upholding a legally-binding agreement, the Conservatives have become party to a foreign corporation breaking commitments to Canadian families and communities.”

“The Canadian government allowed U.S. Steel to buy Stelco based on binding commitments, including maintaining 3,105 workers and producing more than 13 million tons of steel,” said USW director for Ontario and Atlantic Canada, Wayne Fraser. “Instead, U.S. Steel — now with the full sanction of the Conservative government — has drastically cut jobs and production in Canada.”

U.S. Steel said it’s pleased to continue working with Canada.

“We are pleased to have resolved amicably this unfortunate dispute with the government of Canada,” U.S. Steel said in a statement. “The resolution reflects our ongoing and long-term interest in doing business in Canada.”

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