U.S. Steel loses in Canadian court

A ruling by the Federal Court Monday has cleared the way for Ottawa's lawsuit against United States Steel over its acquisition of Hamilton, Ont.-based Stelco in 2007.

The court ruled the government has the power to impose penalties against U. S. Steel and rejected the steel giant's argument that the Charter of Rights and Freedoms negates some parts of the Investment Canada Act.

The company had promised to preserve jobs and make new investment at the Stelco operations in Hamilton, Ont., and Nanticoke, Ont., but closed the plantsduring the recession.

Ottawa had sought to impose fines on U.S. Steel for breaking its promises, but the firm argued that the recession was beyond its control and prevented it from living up to its commitments.

The company had argued in Federal Court that parts of the Investment Canada Act violate the Charter of Rights and Freedoms and the rights itprovides for corporations.