A business review conducted at the end of 2008 suggested the need to concentrate steelmaking at more efficient plants in the United States, the firm told Ottawa.
But the steelmaker did not provide the economic analysis that led to this conclusion, said John Syme, a lawyer for the government.
"The suggestion that U.S. Steel doesn't have any idea why there was a problem with their justification simply doesn't hold water," Syme told the court yesterday.
The federal government is defending the Investment Canada Act against a legal challenge by U.S. Steel. The steelmaker says the act is flawed because it imposes significant penal sanctions -- including fines of up to $10,000 a day and a possible forced sale -- while denying companies the protections of a criminal proceeding. It wants the case against it dismissed, arguing the act is unconstitutional and violates the firm's right to a fair hearing under the Charter of Rights and Freedoms. That includes the right to know the government's full case and the evidence it is relying on.