With the Federal Court of Canada’s June decision in The Attorney General of Canada v. United States Steel Corporation and U.S. Steel Canada Inc., the Canadian government has won the first round in its battle to hold foreign acquirers to promises they make while getting approval to take over a domestic company.
The suit against U.S. Steel marked the first time the Canadian government had taken a company to court under the Investment Canada Act (ICA), enacted in 1984. The government alleged that U.S. Steel had contravened promises to maintain employment and productivity levels at its Ontario plants. U.S. Steel responded by arguing that the enforcement proceedings were unconstitutional as they violated the company’s rights under the Canadian Charter of Rights and Freedoms, the Canadian equivalent of the U.S. Bill of Rights.
