In The NewsChris Hersh Comments on U.S. Steel's Investment Canada Act Battle With OttawaPublished: 06/30/2010 In the Report on Business Law Page on June 30, 2010, Chris Hersh explains the impact of a recent appeal filed by U.S. Steel Corp. relating to the application of the Investment Canada Act. The industry giant is challenging a June 14 Federal Court ruling that upheld the powers of the Government of Canada to go after foreign companies accused of failing to live up to promised made in order to secure approval for takeover of a Canadian firm. U.S. Steel acquired Stelco Inc. in 2007 after assurances that it would maintain employment and boost production at the two Stelco plants. It subsequently laid off 2,400 workers and reduced production, citing unfavourable economic conditions. After this turn of events, Industry Minister Tony Clement made the decision to take U.S. Steel to court on the matter, marking the first time a suit has been filed under these Investment Canada Act provisions since the legislation was put in place in 1984. Chris Hersh remarks that the federal government's actions in this unique case are unlikely to discourage foreign investment in Canada. However, he predicts that it will cause investors to pause and consider before closing or moving production. |