In the year 2007 Stelco was purchased by the U.S. Steel Corporation for $1.1 billion.
At that time the deal was accepted by most, as guarantees were offered that Canadian operations would continue. This takeover should serve as an object lesson for us and entail a thorough review.
Stelco was founded in 1910, an amalgamation of several small firms. That organization survived the Great Depression of the 1930s, and was considered an efficient cornerstone of construction and manufacturing.
When this takeover was consummated, there were few complaints as it was just another example of the acquisition of a Canadian enterprise, a process that continued for decades. Now as the company founder, the U.S. parent offered the currently insolvent steel maker $185 million to keep the company afloat for a year.
A process is underway to sell the Hamilton and Ontario facilities. The company has accumulated a loss of $2 billion. This pending closure will take place despite the pledge of the parent firm to maintain Canadian operations. The U.S. company earned $247 million in its latest quarter, so certainly it did not need to end Canadian production for financial reasons.
Both Stelco and its rival Dofasco were the envy of competitors worldwide. It should be recognized that steel production is the foundation of industry. In developing nations such as China their first priority has been to rebuild the steel industry.
Here is a sector of our economy that was the pride of Canadian enterprise. Its absorption by the U.S. company is an outrage. All aspects of construction and manufacturing are dependent on steel.
In the early 1960s the takeover of Canadian companies was a major election issue. The aborted plan of Finance Minister Walter Gordon nearly brought down the governments of Prime Minister Pearson.
Later Prime Minister Trudeau started the Foreign Investment Review Agency to review and possibly veto, foreign purchases of our companies. Prime Minister Mulroney reinforced this with the establishment of the Investment Canada Act.
Nevertheless, this process persists. Witness the amalgamation of Tim Hortons with the U.S. Burger King. That already has resulted in the loss of many of Tim Hortons’ jobs.
Clearly, our government must show a greater resolve to stop this process; one that is so detrimental to our identity, our economy and employment.
This trend has gone on too long.