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Steam billows from a stack at the U.S. Steel Canada plant in Hamilton in this file photo taken March 4, 2009. The deal that the company struck with Ottawa to avoid punishment will remain secret following an Ontario court ruling.

MIKE CASSESE/REUTERS

Details of the secret deal that ended prosecution of U.S. Steel Canada Inc. by the federal government will remain confidential, an Ontario Superior Court judge has ruled.

The provisions of the Investment Canada Act "establish a very tight non-disclosure regime," Justice Herman Wilton-Siegel said in rejecting motions by the United Steelworkers union, active and retired salaried employees, and the City of Hamilton that the secret agreement be made public as part of the U.S. Steel Canada creditor-protection process under the Companies' Creditors Arrangement Act (CCAA).

Industry Canada and U.S. Steel Canada reached the deal to end the prosecution in December, 2011. The federal government had sought to penalize the steel maker and its parent, United States Steel Corp., for failing to meet job and production commitments the company made when it won approval under the Investment Canada Act to take over Stelco Inc. in 2007.

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The non-disclosure provisions of the federal legislation apply to both companies and the federal government, Justice Wilton-Siegel ruled and they also leave the enforcement of undertakings up to the federal Industry Minister.

"The court has no authority to override these provisions regardless of its views as to the potential benefits of disclosure in the present circumstances," he wrote.

Lawyers for the union and the salaried are assessing whether to seek leave to appeal the ruling.

They argued in a hearing last month that not knowing what is in the deal means they are handicapped in negotiations with U.S. Steel, which is the largest creditor of U.S. Steel Canada and has said it may bid to reacquire some or all of the Canadian assets it put into CCAA protection last year.

U.S. Steel Canada was granted CCAA protection last September in what is effectively the second trip through bankruptcy protection for the former Stelco, which was the subject of a long and acrimonious restructuring between 2004 and 2006.

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