U.S. Steel Canada: twelve years to a surplus

The report Ernst & Young Inc. filed with the Commercial List on August 19 is its sixtieth as Monitor of U. S. Steel Canada Inc. — a company that implemented its CCAA plan, exited these proceedings and became Stelco Inc. more than nine years ago, per Sixtieth Report of the Monitor, August 19, 2026, paras. 1, 14. EY was appointed on September 16, 2014, when the company sought protection with its five pension plans in deficit, and the machinery built in 2017 to fund that deficit — a land partnership, a deficit funding trust, a pension agreement with the Province — has outlived the insolvency by nearly a decade, per Factum of the Board of Trustees for the Pension Deficit Funding Trust and the Stelco Legacy Pensions RCA Trust, August 20, 2026, paras. 2–6.

What that machinery holds now is a surplus. On August 21, the trustees of the Pension Deficit Funding Trust and the Stelco Legacy Pensions RCA Trust came to court asking to distribute more than $150 million to roughly 11,400 pensioners and beneficiaries of Stelco, per Factum of the Board of Trustees, August 20, 2026, para. 1.

The long tail of the land deal

The CCAA plan sanctioned on June 9, 2017 sold USSC's business to Bedrock Industries and set aside certain real property in a special purpose structure — Legacy Lands LP and its related entities, the "Land Vehicle" — to be monetized for the benefit of employee and pensioner stakeholders, with EY appointed Interim Land Restructuring Officer to run it, per Sixtieth Report of the Monitor, August 19, 2026, paras. 9–13. The monetization took seven years and much of the docket: years of litigation with land purchaser DGAP Investments Ltd., a securities purchase agreement that was approved in 2023 and then did not close, and finally an amended version under which Stelco bought the Land Vehicle outright. Both that transaction and DGAP's purchase of roughly 4,100 acres of residual farm land closed on June 21, 2024, per Sixtieth Report of the Monitor, August 19, 2026, paras. 17–23.

The court then ordered the sale proceeds distributed to the PDFT, less reserves: the Monitor's own reserve, cut from $8.5 million to $2 million once the transactions had closed; a $1.5 million holdback against a broker's commission claim by Cushman & Wakefield ULC; and a $1.5 million reserve held by Koskie Minsky LLP as representative counsel for salaried employees and retirees, per Securities Purchase Agreement Proceeds Distribution, Allocation and Reserve Order, July 31, 2024, para. 6 and Sixtieth Report of the Monitor, August 19, 2026, paras. 25–27. The last live dispute — Cushman & Wakefield's motion for commissions on the Stelco transaction — was dismissed by a decision dated April 29, 2025, with the broker agreeing to pay $35,000 in costs to the Monitor and $10,000 to the salaried retirees' benefits trust, per Sixtieth Report of the Monitor, August 19, 2026, para. 29.

Since then, silence on the docket — until this month.

The deficit that became a surplus

The PDFT was designed for a poorer world. Its mandate was to take the land money and pour it into the five Stelco pension plans, and only if the plans were somehow made whole to pass anything through to the pensioners themselves, per Factum of the Board of Trustees, August 20, 2026, paras. 9, 13. The trustees' factum calls what happened instead "a dramatic—and very positive—change in circumstances": all five plans reached full funding and were wound up — the Hamilton salaried plan on March 31, 2020, the other four on December 31, 2022 — and every one of them wound up in surplus, which has already been distributed to members, "much faster than anyone hoped or expected," per Factum of the Board of Trustees, August 20, 2026, paras. 2, 14.

The surplus created a second problem, which is the reason the RCA Trust exists at all. The 2017 pension agreement required Stelco to keep contributing until the plans' liabilities were fully and finally settled, but provided no vehicle to receive contributions once the plans were solvent. So on January 31, 2023, Stelco and the Financial Services Regulatory Authority of Ontario amended the agreement to create one, per Factum of the Board of Trustees, August 20, 2026, paras. 24–25. Between them, the two trusts now hold the money this motion is about. The trustees who administer them are current or former Stelco employees, volunteers appointed by USW Locals 1005 and 8782 and the salaried employees' advisory committee, per Factum of the Board of Trustees, August 20, 2026, para. 12.

What the trustees asked for

The heart of the motion is a methodology change. The PDFT agreement as drafted distributes on a single axis — each member's share of benefit liabilities at final settlement. The plan surpluses, by contrast, were split 50/50: half allocated by wind-up liability, half by monthly pension value. The trustees want the trusts to follow the surplus formula, and their factum is candid about why: a liability-based distribution tends to favour active members, who hold ancillary benefits pensioners do not, while a pension-value distribution tends to favour older and longer-service pensioners; splitting the difference produces "fewer 'winners and losers'," per Factum of the Board of Trustees, August 20, 2026, paras. 17–19, 67.