Secret U.S. Steel deal with Ottawa to stay sealed

The deal between the Canadian government and U.S. Steel that allowed the steelmaker to renege on its obligation to make steel in Canada — at plants in Hamilton and Nanticoke in Ontario — will remain a secret.

• Will courts agree to keep U.S. Steel deal with Ottawa secret?

An Ontario Superior Court judge ruled that while it is reasonable that the deal be open, for fairness in the bankruptcy protection process, he dismissed an unsealing motion, saying he didn't have the authority to make that happen. 

Gary Howe, president of Hamilton Local 1005 of the United Steelworkers Union called the decision "a disappointment, but not surprising."

He also said he believes the only next step for the union would be to "continue on with the CCCA [Canada's Companies' Creditors Arrangement Act] charade."

In their motion heard at the court a month earlier, lawyers for the United Steelworkers said it would be "fairness 101" to force disclosure of the out-of-court settlement reached between the two sides, after the government took legal action against U.S. Steel for not fulfilling its obligations set out when Stelco was purchased in 2007 by U.S. Steel. 

The plant was idled soon after the purchase, and with pensions hanging in the balance, the federal Industry Department sued in 2009. At issue is 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 (USSC), and filed for bankruptcy under the Canada's Companies' Creditors Arrangement Act (CCCA).

The written decision from Judge Herman Wilton-Siegel was dated May 19, 2015, and posted to the bankruptcy case monitor's website Wednesday morning. He said the "concern" for the union and the City of Hamilton to have all the facts about the steelmaker's Canadian operations, including any deal with the government, was "reasonable and understandable."

That sympathy was eroded when Wilton-Siegel wrote that the court had "no authority" to override the non-disclosure agreements set out in the Investment Canada Act (ICA), and was forced to dismiss the motion.

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 — a fact Wilton-Siegel recognized in his written ruling, but dismissed in his conclusions.

In dismissing their argument, Wilton-Siegel said the decision to disclose puts no weight on what the information is, leaving the union and the city in the dark about what obligations USSC has north of the border.

The judge concluded, "The provisions of the ICA leave the enforcement of undertakings in the hands of the minister, to be initiated at his discretion ... The court has no authority to override these provisions regardless of its views as to the potential benefits of disclosure in the present circumstances."