The Canadian government announced that it has begun legal proceedings against American industry giant US Steel to force the reopening of two Ontario factories it says were shut down illegally.

Mr Tony Clement Canadian Industry Minister said "When US Steel acquired Stelco Inc in 2007, it committed to a series of undertakings regarding, among others, capital expenditures, research and development and production.”

He said "I have carefully reviewed US Steel's response to my letter. I remain of the view that US Steel is not complying with its undertakings, and I am not satisfied by its explanations for non-compliance.”

He announced that "I am therefore announcing today that, on my instructions, an application has been filed with the Federal Court of Canada asking the Court to order appropriate measures to remedy this situation."

US Steel announced in March that it would temporarily close the two facilities, which it acquired from Canadian Stelco. US Steel said that the closures were necessary because of declining demand in the steel sector, but the measure put 1,500 employees out of work and has angered the Canadian government.

In early May, Canadian Industry Minister Mr Tony Clement sent the steel giant a letter calling on them to comply with the conditions attached to its purchase of the Stelco facilities. Mr Clement noted that a failure to comply with the terms of the purchase agreement would result in punitive action, including a possible fine of CAD 10,000 a day.