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Feds could sue over U.S. Steel benefits: Industry minister

The federal government has sued U.S. Steel before, and could sue again over "unacceptable" behaviour toward its former employees, said Industry Minister James Moore in a statement Monday.

Friday decision included suspending health-care benefits to pensioners

A U.S. Steel Canada sign stands near the company's Hamilton Works facility. The American arm of U.S. Steel is now seeking billions in debt from it's Canadian counterpart. (John Rieti/CBC)
Industry Minister James Moore said Monday the federal government has sued U.S. Steel before and is not afraid to again. (Sean Kilpatrick/Canadian Press)
The federal government has sued U.S. Steel before, and could sue again over "unacceptable" behaviour toward its former employees, said Industry Minister James Moore in a statement Monday.

Moore was responding to Friday's Superior Court decision allowing the steel maker to sever ties with its Canadian counterpart.

"We are the only government that has taken U.S. Steel Canada to court and are not afraid to do so again," he said. 

The government has faced criticism over its handling of first the sale of Stelco to U.S. Steel in 2007. The government sued, as Moore mentioned, but dropped that original suit against the parent U.S. Steel after reaching a settlement in 2011 that's been decried as a "secret deal" that left pensioners and steelworkers in the dark regarding negotiations and bankruptcy proceedings. 

Moore was not available Monday to clarify whether the government has definite plans to sue or appeal the judge's ruling. With the ruling coming just over a week before the federal election, the court ruling has generated reaction and comment from all three main parties. 

Moore's statement came three days after NDP leader Tom Mulcair blasted the Conservative government over its handling of the U.S. Steel file.

"Today, our thoughts are with the thousands of families who have had their health benefits eliminated because Stephen Harper and the Conservatives chose the interests of the American-owned U.S. Steel over the needs of Canadian workers," he said in a statement Friday.

"The decision today, the most recent consequence of an American takeover that the Conservatives rubber-stamped, allowed U.S. Steel to walk away from its commitments to more than 20,000 pensioners and the city of Hamilton," Mulcair added.

'Abandoning these workers and their families'

Some background: Stelco, Inc., was purchased in 2007 by U.S. Steel. The plant was idled soon after the purchase, and with pensions hanging in the balance, the federal Industry Department sued in 2009 but dropped the suit in 2011.

Since then, U.S. Steel separated itself on paper from its Canadian operations in Hamilton and Nanticoke, referring to them collectively as U.S. Steel Canada, and filed for bankruptcy. In May, an Ontario Superior Court judge ruled that the secret deal between the Canadian government and U.S. Steel that allowed the steelmaker to renege on its obligation to make steel in Canada would remain a secret.

Steel workers and pensioners protest in front of a courthouse in Toronto as U.S. Steel makes its case inside to stop paying benefits and property taxes. (Nazima Walji/CBC)
Friday, a bankruptcy court judge approved a transition plan that will sever U.S. Steel Canada from its U.S. parent and allowed the company to suspend health-care benefits for tens of thousands of retirees.

Moore had strong words for the decision that leaves pensioners in the lurch. The court's decision allows the steel company to "shirk" its obligations, Moore said. He said the government would work to hold U.S. Steel Canada to account for benefits and pensions for its workers.

"It is unacceptable that U.S. Steel Canada is abandoning these workers and their families," he said. "While it is important that the company be given the tools it needs to become viable long into the future, this should not ever mean allowing them to wash their hands of those to whom they should be grateful."

'Heartbreaking' ruling

The Friday ruling was "heartbreaking," said local Conservative candidates David Sweet and Dean Allison, running in the Flamborough-Glanbrook and Niagara West ridings respectively. They issued a statement commending the minister's response.

"We share the profound disappointment and anxiety of pensioners and their families," the statement reads. 

Liberal candidates in Hamilton and Burlington have taken the Conservatives to task over the U.S. Steel situation along the campaign trail. 

Burlington Liberal candidate Karina Gould called developments an example of "the Conservative government's failure to stand up for Canadian workers and how far they've let the Canadian steel industry slip away."

Three more local Liberal candidates – Bob Bratina of Hamilton East-Stoney Creek, Anne Tennier of Hamilton Centre and Shaun Burt of Hamilton Mountain, issued a joint media release late last month, before the ruling, admonishing what they called then the Conservative government's silence about the loss of pension benefits.

In his statement, Mulcair emphasized that pension benefits are not "gifts" but rather compensation earned and deferred until retirement. 

With files from Samantha Craggs, Jeff Green and the Canadian Press

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