Court to reconsider opening 'secret deal' between feds, U.S. Steel

The "secret deal" in the ongoing saga of U.S. Steel has a new chance to be unsealed.

The Ontario Court of Appeals decided Wednesday that it will reconsider a request to open a "secret deal" struck between the Canadian government and U.S. Steel in 2011, in which the feds dropped a lawsuit against the American steel manufacturer even after it had broken promises to manufacture steel in Canada.

That deal has been secret, its terms concealed from even pensioners and the city of Hamilton, but lawyers for the pensioners have argued that much in the ongoing negotiations hinges on it.

Ontario Superior Court Judge Herman Wilton-Siegel ruled in May that while he thought the terms of the deal would have bearing on the bankruptcy case, he didn't have the power to unseal the document. 

Now, the appeals court has granted stakeholders the right to appeal that decision. 

• Everyone needs to work together for U.S. Steel Canada to survive: judge
• Feds could sue over U.S. Steel pension benefits: Industry minister
• Secret U.S. Steel deal with Ottawa to stay sealed

The secret deal

The government sued U.S. Steel in 2007 for not fulfilling its obligations after purchasing plants from the former Stelco, Inc. 

The Canadian plants were idled soon after the purchase, and with pensions hanging in the balance, the federal Industry Department sued in 2009. At issue are the details of why the lawsuit was dropped.

Since then, U.S. Steel separated itself, on paper, from its Canadian operations, referring to them collectively as U.S. Steel Canada, and filed for bankruptcy under the Canada's Companies' Creditors Arrangement Act.

In a decision released in full on Wednesday, Wilton-Siegel agreed to a plan that would sever ties between U.S. Steel Canada and its American parent.

The plan: 

• Halts the attempted bankruptcy protection sale of assets.
• Leaves U.S Steel Canada as a separate company that will sink or swim on its own.
• Allows USSC to suspend health-care benefits to some 20,600 pensioners.
• Allows USSC to suspend paying its property taxes. 

In their earlier attempts to unseal the deal, lawyers for the steelworkers union and the City of Hamilton said the details of that settlement were important for upcoming negotiations, bankruptcy creditor dealings or a sale of the plants in Hamilton and Nanticoke.

Bill Ferguson, president of United Steelworkers (USW) Local 8782 in Nanticoke, told CBC Hamilton the union plans to meet with its lawyers Thursday to discuss the decision.

Meanwhile, Hamilton city council voted Wednesday night to ask the provincial and federal governments to take ultimate responsibility for U.S. Steel pensions.