Canada's Industry Minister, Tony Clement, sent a letter to US Steel this week, demanding that the company live up to the production and other business commitments it made to the Canadian federal government when it took over the former Stelco Inc. plants in 2007.
Mr. Clement said Wednesday he sent the letter in response to US Steel's recent temporary idling of its Canadian operations. In March, US Steel announced that it was temporarily shutting down most production at its operations in Hamilton and Nanticoke, both in Ontario, idling an estimated 1,500 employees.
"(US Steel) committed to a series of undertakings regarding, among others, capital expenditures, research and development and production," the minister said in a statement. "US Steel has recently cut production and laid off employees at its Canadian operations. While I recognize that these are challenging economic times, we expect the company to live up to its commitments."
Canada has now taken the first step in the enforcement process under the Investment Canada Act that governs foreign acquisitions of Canadian corporations, which is to issue a formal letter. Moving forward, Clement warned US Steel that Canada has a number of options, "including unwinding the deal, seeking court penalties of $10,000 per day and seeking a court ruling that would force a rectification of the situation to the deal that was signed."
Clement said that US Steel has 10 days to respond to the letter.