Ottawa takes U.S. Steel to court over cutbacks

Industry Minister Tony Clement has gone to court to force U.S. Steel to live up to certain promises it made when it bought Stelco Inc. in 2007.

Clement asked the company on May 5 to justify production cutbacks announced earlier this year. On Friday, he said in a news release: "U.S. Steel is not complying with its undertakings, and I am not satisfied by its explanations for non-compliance."

U.S. Steel's general counsel and senior vice-president, James Garraux, said it would fight the government, and complained Clement had ignored "numerous requests" to meet the company.

He also said the government  had disregarded ministry guidelines about foreign investment.

The United Steelworkers welcomed Clement's move but also called for the minister to disclose the commitments U.S. Steel made to it to get federal approval to take over Stelco.

The undertakings Clement referred to involved, among other things, capital expenditures, research and development and production. The details have never been made public, but commitments to maintain a certain level of production imply certain employment levels.

The United Steelworkers union said it asked Clement to look into U.S. Steel on March 25, three weeks after the company temporarily shut down its Hamilton mill and closed most of its Lake Erie operations, affecting up to 1,500 jobs.

Some workers have been recalled recently.

Clement said the government filed an application with the Federal Court of Canada asking the court to order "appropriate measures" to remedy the situation.