The federal government has dropped its case against United States Steel Corp. (X-N25.85-1.63-5.93%) over the company’s broken promises to Ottawa to maintain jobs after its 2007 takeover of Hamilton-based Stelco.

Industry Minister Christian Paradis announced the move in the House of Commons Monday, saying that the company had agreed to “significant new and enhanced undertakings” in return for the government’s move, after what the minister described as “extensive negotiations.”

Under the deal, Mr. Paradis said, U.S. Steel pledges to keep producing steel in Canada, operate its Lake Erie and Hamilton plants until 2015 and invest at least $50-million in its Canadian facilities by December, 2015, over and above its original pledge of $200-million by October, 2012.

The company also pledged to give $3-million to “community and educational programs” in Hamilton and Nanticoke, with $1-million due by February, 2012.

“U.S. Steel’s new commitments, many of which run to 2015, will provide benefits that in all likelihood would not have been obtained through the court process,” Mr. Paradis said.

A lawyer for U.S. Steel declined to comment.

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