Court upholds Investment Canada Act enforcement provision
On June 14, 2010, the Federal Court of Canada released its decision dismissing US Steel’s constitutional challenge of the Investment Canada Act provision providing for enforcement of undertakings that may be given by investors to obtain Ministerial approval of transactions that are subject to the ICA. The challenge was brought as an application in proceeding commenced by the Attorney General of Canada (“AGC”) for an order enforcing certain employment and capital expenditure undertakings given by US Steel in respect of its 2007 acquisition of Stelco, and for the imposition of a penalty of $10,000 for each day of alleged non-compliance.
The court found that the potential monetary penalty was not penal in nature, but was rather intended by Parliament to promote and ensure the legislative objectives of the Investment Canada Act. Therefore, section 11 of the Charter, which provides rights to persons who are charged with an offence, did not apply.
The court also found that the procedural rights that were available in the proceeding brought by the AGC were sufficient to conclude that US Steel’s right to a fair hearing in accordance with the principles of fundamental justice under s. 2(3) of the Bill of Rights was not violated.
