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November 17, 2014
Ford's Refusal to Invest in
Windsor
The Necessity to Change the
Investment Premise
Ford's
Refusal
to Invest in Windsor
• The Necessity to Change the Investment Premise
- K.C. Adams
Falling Natural
Resource Prices and Mine Closures
• Morose Climate in Quebec's Mining Sector - Normand Fournier
Federal Public
Servants Tackle Attacks in Government's Latest Omnibus Legislation
• Bargaining Strategy Deals with Threats Posed
by Bill C-4
- Professional Institute of the Public Service of Canada
• What You Should Know About Bill C-4
Ford's Refusal to Invest in Windsor
The Necessity to Change the
Investment Premise
- K.C. Adams -
The Ford Motor Company refused to invest in
Windsor despite offers from governments and organized autoworkers
to pay over $1-billion of the proposed $1.5 billion investment.[1]
In response, Ontario Premier Wynne says the government needs to
determine what factors are encouraging automakers to build new
assembly plants elsewhere and not in Canada.
For Wynne the issue for Canadians is to pinpoint what
the
monopolies want, and subsequently better meet their demands. If
Canadians follow this process, Wynne suggests, then investment
will flow into the province and country and wealth will trickle
down to the people in the form of jobs and taxes to exchange for
the value of social programs, public services and
infrastructure.
Investments that begin from the premise of serving the
global
monopolies and their aim to make as much money as possible in the
shortest time continue throughout their existence with the same
underlying premise. The owners of monopoly capital and their aim
dominate the investment and do everything to fulfill their aim.
They demand workers and governments serve the same aim from the
beginning and for as long as owners of monopoly capital decide
their aim is being met and the original premise of serving their
demands is honoured.
 The path suggested by
Premier Wynne and other official political
leaders perpetuates a situation where Canadians do not exercise
control over their broad economy. The premise of serving the
monopolies to encourage them to invest guarantees instability,
insecurity and loss of control of the economy to global finance
capital. Whenever the narrow private interests of investors lead
them to disinvest, such as now at Stelco under the control of
U.S. Steel, how can Canadians argue with the decision? Canadians,
or more precisely their official political leaders, agreed with
the original premise to give U.S. Steel permission to invest
because it served the narrow private interests and aim of its
investors. Now apparently, it serves them to disinvest, and not
only disinvest but demand Canadians repay the global investors
for having invested in Ontario.
U.S. Steel has put its Canadian investment under
bankruptcy
protection to ensure that as it disinvests it takes back to the
U.S. an amount equal to or greater than its original investment.
U.S. Steel wants this amount to come out of pensions and other
post-employment obligations, a provincial loan of $150-million,
outstanding bills for supplies and services, the sale of Stelco
assets, any value steelworkers produce at the two mills while
under bankruptcy protection, and any commitment towards
environmental cleanup.[2]
To challenge U.S. Steel's right to disinvest requires
repudiation
of the federal and Ontario governments' original agreement with
the premise that the investment must serve the narrow private
interests and aim of U.S. Steel and not the public interests of
Canadians and their aim for a stable all-sided economy that
guarantees the people's rights, well-being and security.
Canadians face the problem of overcoming the original
premise
governing why monopolies invest. Investments under the control of
the working people would have the aim of extended reproduction of
the economy to serve the rights, well-being, needs and security
of the people of Ontario and Canada and the humanization of the
social and natural environments. This broad investment aim to
serve the public interest requires restriction of monopoly right
and the narrow private interests and aim of owners of monopoly
capital. A change in the premise means change throughout the life
of the investment. This change puts control into the hands of the
people and specifically those Canadians who do the work. This
change is necessary as the old premise is finished as a way of
doing business.
Canada is open for business but on terms set by the
Canadian
people and under their control and aim, not on terms set by
international finance capital and under their control and aim.
The investment premise has to change.
Notes
1. See "Ford
Investment
in
the
Oakville
Plant and Refusal to Invest in Windsor," Workers' Forum Online, November 5,
2014.
2. See "U.S.
Steel's
Phony Bankruptcy," Workers'
Forum Online, October 20, 2014.
Falling Natural Resource Prices and
Mine Closures
Morose Climate in Quebec's Mining
Sector
- Normand Fournier -
In order to understand what is taking place within
Quebec's mining industry, the national and international situation must
be looked into and studied, as none of the important decisions in the
sector are being made in Quebec or in Canada.
Internationally, Rio Tinto, BHP Billiton and Vale
(nicknamed the Big Three) are waging an all-out war against their
competition worldwide. They have created a surplus of iron ore -- 50
million tons in 2014 and 160 million tons in 2015, per Goldman Sachs.
They have forced down the price of various ores -- iron ore dropped
from $143/ton in 2013 to less than $80/ton in 2014. They have also
flooded China, the main iron market. China consumes close to 70 per
cent of all iron ore transported by ship worldwide. During the same
period, the prices of gold, platinum, copper, nickel, chrome and even
rare earth metals have fallen.
In Quebec
 When the Charest
government's Plan Nord was announced in 2011, a multitude of mining
projects with what capital-centred theory calls "production costs" that
were previously considered too high, resurfaced, as the price of iron
ore at the time had reached levels considered profitable -- $150 to
$180 per ton.
In November 2014, the price of iron is now $78 to $80
per ton. In Quebec, the Big Three have a "production cost" of between
$43 to $45 per ton. At the same time mine closures and bankruptcies
continue to take place one after the other -- Cliffs Natural Resources'
Bloom Lake Mine in Fermont, ArcelorMittal's Mont-Wright Mine in
Fermont, the Scully Mine in Wabush and Labrador Iron Mines which will
not be producing in 2014, as their "production costs" -- actually the
transferred value reproduced by the miners and other workers involved
in the production process -- exceed $80 per ton. As for Quebec Lithium,
it filed for bankruptcy in October. Expansion projects have been put on
ice -- Cliffs in Fermont, Iron Ore Company of Canada and New
Millennium.
Mining investment companies are selling off their assets -- Cliffs,
ArcelorMittal and IOC have put their Fermont camp facilities up for
sale. Both mining and exploration companies are unable to fund their
mining projects. Included in that category are the mining companies
Cliffs, Alderon, New Millennium, Adriana, Royal Nickel Corporation,
Nemaska Lithium, Niogold, the Arnaud mine in Sept-Îles and Quebec
Lithium.
While this is taking place, the Big Three continue to
flood the iron market. Their combined production forecast is 900
million tons of iron for 2014, or 40 per cent of world demand. Former
CEO of the Iron Ore Company of Canada, Terry Bowles, was quoted by Le Devoir as saying, "There were
major expansions in Australia and in Brazil, all going into production
at the same time, and not the best time at that." Rio Tinto, BHP
Billiton and Vale have increased their production volumes. For example
in Quebec, ArcelorMittal invested $1.6 billion to increase its
production from 16 to 24 million tons, while Rio Tinto in Carol Lake
invested $1 billion to increase its ore production from 17 to 22
million tons.
Only the Chinese mining companies WISCO and Jilin Jien
and India's Tata, are maintaining their exploration and expansion
projects in the Labrador Trough.
The persisting morose climate in Quebec's mining sector
is the result of an important struggle taking place worldwide. Falling
natural resource prices and mine closures are only the consequences.
During Premier Philippe Couillard's recent economic mission to China,
no agreements in the mining sector were signed. For those who work in
the mines the issue to be sorted out is how to resolve the impasse.
Laid off workers from
Cliff's Wabush mine wait to be flown out, November 19, 2012.
Mining Company Cliffs Natural Resources Closures
Cliffs' facilities in Sept-Îles have been closed
since the summer. These include the iron ore pellet plant and port
facilities. As well, the Lake Bloom mine in Fermont will cease its
activities next December, if its owner is unable to find a partner to
develop Phase II. There is talk that 165 jobs will be lost in
Sept-Îles and 400 in Fermont, most of which are subcontracted
jobs.
On October 31, Cliffs also announced the closure of its
Canadian Wabush Mines in Labrador. The closure will result in the
layoff of 400 Newfoundland employees and about one hundred Quebec
employees in Sept-Îles involved in iron transshipments. The
closures follow the 2012 takeover of the Cleveland-based mining
company's Board of Directors by Casablanca Capital Hedge Fund, that
demanded Cliffs rid itself of its Canadian assets.
Quebec Lithium Seeks Bankruptcy Protection
Despite the growing demand for lithium worldwide as well
as rising prices, Quebec Lithium filed for bankruptcy protection on
October 8. The majority of the 200 employees at the mine located in La
Corne in the Abitibi region were laid off. The repercussions of the
Quebec Lithium closure are also being felt in Barraute, a neighbouring
municipality, where more than 30 residents worked at the mine. The
construction of a new road to connect La Corne to Barraute has been
stopped.
On numerous occasions Quebec Lithium has received
financial aid from the Quebec government. In 2012, it was provided with
a loan guarantee of $60 million from the Charest government to start up
the project. In addition it has been granted various subsidies by the
Quebec government to fund exploration. In 2014, Quebec Lithium received
funding of $5 million from Investissement Québec, although the
company was experiencing serious cash flow problems.
Quebec Lithium is owned by RB Energy. Its lithium
reserves are estimated at more than 55 million tons and annual
production was set at 20,000 tons per year. Capital costs are over $324
million. This corresponds to the amount invested with regard to initial
forecasts of $204 million. Each ton of lithium produced by the mine had
a reproduced transferred-value ("production cost") of U.S.$2,600.
Lithium carbonate sold at U.S.$6,000 per ton (baseline scenario price).
In 2012, the price of lithium carbonate reached U.S.$8,000 per ton.
As well, Quebec Lithium has not paid a single dollar for
the financial guarantee set at $25.6 million. This amount was intended
for the restoration of the mine site after operations were completed.
Therefore theoretically this represents $90.6 million that Quebec will
lose with the closure of Quebec Lithium. In addition, this case
demonstrates that the Quebec government has not ensured the application
and enforcement of the Mining Act.
The
Quebec government refuses to stand up to mining corporations,
leaving Quebeckers to foot the bill to restore abandoned mine sites.
There are more than 700 abandoned mine sites in Quebec and the bill for
their restoration is estimated at $ 1.2 billion.
Arnaud Mine
This apatite mine is still waiting for environmental
approval from the Bureau des audiences publiques sur l'environnement
(BAPE) to begin its development. The proposed open pit mine has divided
the population of Sept-Îles for several years. The population has
held several protests against the project. "It exceeds current
environmental standards," according to Dr. Isabelle Gingras, a resident
of Sept-Îles.
The project, with an estimated value of $750 million, is
under the management of the Norwegian company Yara International ASA,
the world's largest producer of fertilizer, and Investissement
Québec. The pit is 3.8 kilometres long by 800 metres wide and
240 metres deep. Its proponents say it will create 330 direct jobs and
425 indirect jobs.
Federal Public Servants Tackle
Attacks in Government's Latest Omnibus Legislation
Bargaining Strategy Deals with
Threats Posed by Bill C-4
- Professional Institute of the Public
Service of Canada -
Over 90% of the Professional Institute of the Public
Service of Canada (PIPSC) members' collective agreements expire in
2014. The current round of bargaining coincides with deep, ongoing
program and staff cuts and government assaults against unions and
labour rights.
In January, a PIPSC bargaining conference laid the
groundwork for a high degree of solidarity. More than 200 PIPSC members
met in Ottawa to develop a strategy for collective bargaining with the
federal government. They closely assessed the government's latest
omnibus legislation -- Bill C-4 [Economic Action Plan 2013 Act No. 2]
-- and developed plans to challenge or at least mitigate its impacts on
collective bargaining as well as the impacts of the government's
promised assaults on salaries, sick leave and employee performance.
After two days of meetings, they agreed to a collective
bargaining strategy that deals squarely with the threats posed to its
members and the public by Bill C-4 and similar anti-union legislation
introduced by the Harper government.
The agreement outlines six commitments undertaken to
help coordinate the union's response to the Conservative government's
assault on salaries, sick leave and employee performance as well as the
union's right to seek arbitration and to strike. They include
commitments to ensure broader public engagement on bargaining
activities, greater collaboration with other unions to defend free
collective bargaining, and more effective member mobilization through
the union's new Better Together member engagement initiative.
The commitment to broader public engagement is
considered particularly important. President Daviau commented,
"Secrecy, misrepresentation and lack of accountability have been the
hallmarks of this government's labour agenda. The Parliamentary Budget
Office has had to go to court to learn even the numbers of federal
workers affected by the massive 2012 budget cuts." Polls show declining
faith in this government, and Institute members are no exception. The
government has an opportunity to undo the damage done to federal labour
relations by its unrelenting agenda of cuts to staff, programs and
services and wilful misrepresentation of public service salaries, sick
leave and employee performance. In too many areas -- from climate
change to child poverty, the economy to labour legislation -- the
government is failing Canadians and public servants. The country's
largest employer simply cannot continue to behave recklessly either
with its employees or with the public. The heavy-handed measures
adopted by the government under Bill C-4 have served more to galvanize
than to discourage union members in advance of bargaining.
Solidarity Among All Federal Unions
Thanks to a solidarity pact agreed in January, for the
first time the Institute will be able to coordinate with the 18 unions
representing all 300,000 federal public service employees during this
round of negotiations. This close collaboration has already led the
unions to consider a joint legal strategy to challenge Bill C-4, the
omnibus legislation that attempts to force many of our PIPSC groups
into a potential strike position for the first time.
What You Should Know about Bill C-4
Workers' Forum
is posting below an item by the Professional Institute of the Public
Service of Canada (PIPSC) explaining the implications of Bill C-4 for
its members.
***
In 2013 the Harper Government drastically altered the
rules of collective bargaining and tilted the playing field in their
favour with Bill C-4. It is vital that PIPSC members understand these
changes and their significance, since under the new rules disputes can
only be referred to a third party arbitrator under very limited
circumstances.
The Changes in a Nutshell
Essential Services
The new legislation gives the employer unilateral
control over what work is considered "essential," unlimited ability to
make this determination, and the discretion to amend this designation
at any time.
Strike/Conciliation Is Now the Default; Interest
Arbitration Is Very Limited
The arbitration option will be removed for all
bargaining units or groups except those where 80% of employees perform
work that is deemed "essential." Groups that do not meet the 80%
threshold are automatically put on the conciliation-strike route. In
the event of a work stoppage, if a portion of your work is designated
"essential," you will have to carry out all functions of your job - not
just those deemed essential. You will not have the right to refuse
overtime, call-back or work on weekends.
Negotiations
The notice-to-bargain period is extended from 3 months
to 12 months.
The compensation and research function of the Public
Service Labour Relations Board (PSLRB) will be discontinued.
Arbitration
Before Bill C-4, groups could choose arbitration as a
method of dispute resolution.
Now, arbitration is only possible if both parties
consent or that 80% of the functions of a group are designated as
essential.
Arbitration and conciliation boards no longer take into
account two factors in making their decision: 1) recruitment and
retention and 2) the financial position of the government on its fiscal
policies.
Arbitration and conciliation boards are less
independent, as the new President of the new Public Service Labour
Relations and Employment Board (PSLREB) may force them to reconsider a
decision.
Significance of Changes
These changes will result in most PIPSC groups moving
from the arbitration route to the conciliation/strike method of dispute
resolution. Being on the conciliation/strike route means that should an
impasse in bargaining occur, arbitration is no longer available to the
group to resolve the dispute. The group will have a choice between
capitulating to the employer's demand or striking.
In this bargaining environment, mobilization and strike
preparation become essential.
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