One of the hurdles keeping the contentious "secret deal" struck in 2011 between the federal government and U.S. Steel sealed was removed on Tuesday.
The Ontario Court of Appeal decided that the Investment Canada Act does not prevent the terms of that deal from being released. That was the authority that Ontario Superior Court Justice Herman Wilton-Siegel had previously said was keeping him from releasing the deal's terms last spring.
The Ontario Court of Appeals decided last fall that it would reconsider the request to open the "secret deal" struck between the Canadian government and U.S. Steel in 2011, in which the feds dropped a lawsuit against the American steel manufacturer even after it had broken promises to manufacture steel in Canada.
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Wilton-Siegel ruled in May that while he thought the terms of the deal would have bearing on the bankruptcy case, he didn't have the power under the Investment Canada Act to unseal the document.
Now the appeals court has referred the matter back to Wilton-Siegel, who is overseeing the CCAA process. He can now further review the request from the city of Hamilton and steelworkers that the deal be unsealed.
Bill Ferguson, president of USW Local 8782, represents workers and pensioners from U.S. Steel Canada's Nanticoke operations.
"We're the key stakeholders," Ferguson said. "We're the ones who have everything to lose."
He called on Wilton-Siegel to "do the right thing" and unseal the deal.
Next, it will be up to the other parties in the bankruptcy process to decide whether they want to claim that the deal should still be secret under the terms of regular settlement law, without the extra layer of Investment Canada Act.
It's unknown at this time when such a motion would come before the court.
The appeals court decision came at the same time that the parties have been in court for the last two weeks on a claim from U.S. Steel that the more than $2.2 billion it invested in the former Stelco is debt, not an equity investment in the Canadian operations.
Most at issue, recently, was a "revolver loan," which is essentially a line of credit extended to U.S. Steel Canada. In 2010, its ceiling was $350 million, but it was subsequently amended to allow the Canadian operations to withdraw up to $500 million, and then $600 million.
Each time, the agreement stated that the loan would be in default if the borrower (U.S. Steel Canada) was "unable to meet debts."
Experts are at odds over how that phrase should be read, and spent hours sparring over it in court Friday.
Those hearings were in closing arguments Tuesday and are expected to wrap up Wednesday.