March 30, 2017

Standing Committee on International Trade
Meets to Discuss the Steel Industry

Disgraceful Performance on
Parliament Hill


Standing Committee on International Trade Meets to Discuss the Steel Industry
Disgraceful Performance on Parliament Hill - Rolf Gerstenberger

Hands Off Pensions and Benefits!
Stand with Wabush Miners in Their Struggle for What Is Theirs by Right!
Wabush Mines Retirees Oppose Theft of Their Pensions and Medical Benefits - Jim Skinner, Wabush Pension Committee

Standing Committee on International Trade Meets to Discuss the Steel Industry

Disgraceful Performance on Parliament Hill

Workers' Forum asked Rolf Gerstenberger, the retired President of USW Local 1005 to comment on the discussion of the steel industry held by the Standing Committee on International Trade on Parliament Hill on March 9. Members from the Liberals, Conservatives and NDP attended the meeting. The invited speakers were William Miller from Amalgamated Trading Ltd., Joseph Galimberti from the Canadian Steel Producers Association, Ian Lee from Carleton University and the Macdonald-Laurier Institute, and Ken Neumann and Shaker Jamal from the National Office of the United Steelworkers.


Rolf Gerstenberger: The entire nonsense about unfair trade and the necessity for free and fair trade is to divert the working class from demanding real solutions to real problems here at home. Solutions begin at home within a nation-building project. They do not begin with attacking others for what they are doing and waging predatory wars to steal from others for empire-building.

In a nutshell, the discussion was a truly disgraceful performance from all involved, especially those who are supposed to represent the interests of steelworkers. The 11,000 words in the official transcript are infuriating. Not one word represented the reality steelworkers and their productive industry face. Not one word was spoken of the disastrous cycle of the steel sector and its recurring crises or how to remedy the situation. Not one word was said to alleviate the anxiety of our retirees who have been stripped of their benefits or to lift the anxiety they feel about their pensions. Not one word was heard on the specific concerns of steelworkers at Stelco and Algoma over the direction of their industry. To let the financial oligarchy and governments off the hook for the disasters they have caused and not hold them to account, the Standing Committee discussion was all ridiculous smoke and mirrors about China and how the Chinese are to blame for the problems we have faced for over twenty years.

Mr. Miller from Amalgamated Trading gave the only presentation that even remotely dealt with the Canadian steel sector but only from the wholesale import side out west. He pointed out that without much steel production in BC, his company imports almost everything it sells mainly because transporting steel from Asia to BC is cheaper than from Ontario. He said the price of moving steel from Asia to Vancouver by sea is $45 to $50 per metric ton while from Ontario to western Canada it averages out to $120 per metric ton by rail and nearly $200 per metric ton via truck.

Miller's presentation showed the importance of having a steel industry in all regions in a country as vast as Canada. But of course, that was not his logic because as a wholesale/importer he wants to be the middleman and not have a local steel industry directly supplying customers in his region or having a state institution playing the important role of managing the overall industry, especially bringing stability to market prices and conformity between supply and demand without recurring crises. Miller was at the hearing to argue for the narrow private interests of his company. Similar to all the others, he has no outlook for a nation-building project that would have an independent Canadian steel sector in all regions as a bulwark of a dynamic interrelated self-reliant economy.

Any nation-building project in the twenty-first century requires robust state intervention to restrict the financial oligarchy in how it invests the social wealth workers produce. The antics of U.S. Steel and others wrecking our productive forces and stealing what belongs to Canadian workers by right should be considered criminal acts. To not match production with the apparent demand of the Canadian economy for steel is ridiculous. The wild swings in market prices for steel that have little or no relation to its price of production are not necessary at all. We have a government not of laws but of police powers which includes the judiciary. It is using specifically the Companies' Creditors Arrangement Act, the hated CCAA, to shift the burden of their man-made out-of-control economic crises onto the backs of workers and retirees as per the demand of the international financial oligarchy.

In Justice Newbould's latest CCAA ruling for Essar Algoma Steel, he ordered the steel mill to pay the debtor-in-possession, the oligarchs led by Deutsche Bank who control the process, an extra $1.25 million for a "technical default" because Algoma Steel has not yet extracted $22.2 million in concessions from steelworkers and salaried employees, which the court ordered it to do by March 22. Further, to facilitate taking away what belongs to workers by right, Newbould has ordered the Algoma steelworkers and salaried employees' negotiating committees sequestered incommunicado in Toronto until they agree to those concessions. This at a time Algoma Steel is booming because we are in one of our temporary upswings in the steel sector.

Stelco, also under CCAA, is feeling the upswing as well with cash-on-hand expected to reach $300 million by June but the judge in charge still does not see fit to reinstate our legal entitlement to post-retirement benefits even when a cash crisis was his original "reason" for taking them away. The judge is poised to force through a disastrous sell-out to another gang of U.S. oligarchs called Bedrock who want to eliminate all of Stelco's social responsibilities for pensions, benefits, steel production, employment and environmental remediation. Everything must be taken off the balance books, they scream, to free the oligarchs to make a killing.

But there in Ottawa, our illustrious group of Parliamentarians and invitees want to ignore all that and hide behind U.S. imperialist-type bombast that all our problems are the fault of the Chinese for selling us cheap steel. They are complaining about somebody selling them something for cheaper than it's worth! They could care less about nation-building in Canada and a new direction for the economy without crises. Whom do they represent? All the major steel companies in Canada are foreign owned and they all have their own interests and preoccupations that have nothing to do with nation-building in Canada. The name of the one group should be the Global Steel Oligopolies Association because it has nothing to do with the interests of Canadians and building something stable and of value right here.

WF: What about the union representatives?

RG: Their reality conflicts with the imaginary world concocted in the halls of power. Their headquarters in Pittsburgh and the White House say that U.S. companies are victims of unfair trade practices mainly by Mexico and China. It is nonsensical even as concerns the U.S. but why is it repeated for Canada? The very suggestion that the most destructive, thieving and expansionist empire the world has ever known is a victim is plain nonsense. The empire that for years has roamed the world hunting for resources and working people to pillage and exploit even through regime change and war calls itself a victim.

The developing countries send cheap goods to the U.S. under the WTO and free trade agreements and a section of the thieving U.S. ruling elite complain. They have to complain about others being at fault for the problems U.S. workers face as that is the only feeble reason they can think of to explain the economic crisis in the United States itself. The developing countries are forced to buy U.S. bonds so that they can have U.S. dollars for use in settling their international trade and to protect their own currencies from billionaire U.S. speculators like George Soros and yet a section of the thieving U.S. ruling elite complain about the U.S. debt being too high, even though they have no intention of ever paying it back, but because of it, they must cut back spending on social programs for the most vulnerable of their people. They can't even organize a modern health care system worthy of the name.

According to the Government of Canada and those who participated in this so-called discussion on the steel industry, Canada doesn't exist. It's part of an integrated North American economy. We should just give up thinking about building something worthy here in Canada, which we could control, and surrender total control of the economy and other affairs to Trump and his henchmen like Commerce Secretary Wilbur Ross and they will take care of us. They in turn will deal with the Chinese in the way U.S. imperialism knows best through dictate, destruction and war. Iraq, Libya and Syria are the template of what the U.S. has in store for the world. We steelworkers have firsthand knowledge of what a nasty piece of work Wilbur Ross is and how cruel he can be to serve his private interests. He personally profited from the misery and destruction of the steel industry in both the US. and Canada.

The ministers of the Trudeau government want us to be happy with some crumbs thrown our way by the Trump administration and give up any aspirations of having our own steel sector and a national economy under our control without economic crises that can guarantee the well-being and rights of all.

Ignoring the needs of steel members and retirees in the USW is not acceptable. To divert attention by talking about building a bridge in Montreal with foreign steel is a joke given all the corruption involved in these infrastructure projects. Quebec doesn't even have a steel industry to speak of anymore. The oligopolies ruined it. Quebec used to have a state-owned steel producer but it was privatized and wrecked in the anti-social feeding frenzy of the last twenty years.

We spoke out against U.S. Steel taking over Stelco in 2007 and remained far from eerily silent when USS cratered the place just as we predicted it would do. We warned anybody who would listen that U.S. Steel was out to destroy Stelco as a competitor and had no intention of meeting its public and legal commitments under the Investment Canada Act. Why would we in Hamilton and steelworkers in the Soo fall into a mindless dither about China as the enemy when USS, Deutsche Bank and these gigantic investment funds from the U.S. are spitting in our face and continuously robbing us blind? We know who the enemy is because it's right there in front of us not 10,000 kilometres away! These are the views our representatives should be giving.

WF: What are you proposing?

RG: USW 1005 is demanding a public inquiry into the CCAA to expose how the theft of everything that belongs to us and our communities by right is made "legal" and that our rights must be upheld and provided with a guarantee. What kind of rule of law is it which openly steals from the workers to benefit the rich?

As far as solutions to the steel crisis, USW Local 1005 has been proposing solutions to the steel crisis since 2004, but none of these great ones in Ottawa or Toronto have ever said a word in reply or engaged us in discussion. They have just ignored us and allowed the situation to become worse and worse. Local 1005 has raised the issue of the anarchy in the industry with its wild price swings and constant shutdowns but we always receive the same idiotic response: It's the hidden hand of the market; there is no alternative. They are the ones in control of the entire show while we are told to just let the economy run its course without conscious control. Their hidden hand of the market is not so hidden. It is very deft at taking money from our pockets and putting it into theirs, yet we should bow down to it and complain like ignorant dolts that it's all China's fault and not hold the real culprits to account.

The disgraceful display in the standing committee shows once again, as if we need any more lessons, that the working class must have its own independent politics and institutions that speak and act for it on all matters and in all venues. Workers do not want or need those who simply repeat the politics, words, outlook and line of the thieving ruling oligarchs who have proven in practice they are not fit to rule. It is clear it is up to the workers on their own to bring into being a twenty-first century nation-building project and new direction for the economy that guarantees the rights and well-being of us all. We workers can and must hold these oligarchs to account. We want a public inquiry into CCAA and we want our jobs, pensions and benefits as well as what belongs to us and Hamilton and Canada by right.

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Hands Off Pensions and Benefits

Stand with Wabush Miners in Their Struggle for
What Is Theirs by Right!

Wabush miners are waging a determined battle to recuperate the pension and medical benefits the U.S. mining oligopoly Cliffs Natural Resources has stolen from them while under the police powers of the Companies' Creditors Arrangement Act (CCAA). Most of the affected workers live in Labrador with a smaller number in Quebec.

Wabush Mines workers and retirees are fighting for what is theirs by right through agreements they made in selling their capacity to work to the mine employer. The retirees urgently need their rightful benefits as they and their spouses grow older with many workers suffering the harsh effects of years of mining. The pensions and benefits were negotiated for life and are legally theirs according to their collective agreements and other arrangements under labour and pension laws.

The U.S. oligopoly has taken out of the local and provincial economy millions of dollars in profit from the work of Canadian miners mining iron ore for use in producing steel. For Canadian authorities to allow Cliffs Natural Resources to slip back to the U.S. without being held to account for its legal commitments is criminal injustice. The onus is on the provincial and federal governments to force Cliffs to live up to its obligations or otherwise make arrangements to guarantee the rights of the Wabush workers.

Justice Stephen Hamilton of the Quebec Superior Court in Montreal using the police powers of the CCAA granted protection to Cliffs' Wabush assets in Labrador on May 20, 2015. Several months earlier, the Court granted CCAA protection to Cliffs' Bloom Lake assets in Quebec. This is a ploy of Cliffs' Natural Resources to divest itself of its legal obligations to workers, suppliers, small creditors, the surrounding municipalities and for environmental remediation. Cliffs is using the CCAA to put its enormous assets in the U.S. beyond the reach of Canadian workers even though those assets include profits from Canada. In addition to using the protection of the CCAA to rid itself of its legal obligations, Cliffs is conspiring to liquidate and sell the productive mining assets in Labrador and abscond with what it can to the United States.

In a further CCAA order on June 26, 2015, Justice Hamilton ruled that Cliffs could cease making any special payments into the pension funds of its Wabush employees. Cliffs and the state authorities have long known that the pension funds were underfunded and if wound up without special funding would be incapable of meeting the legal benefits retirees negotiated in binding agreements.

The justice also allowed the oligopoly to stop paying health and life insurance benefits for pensioners. The cumulative hardships that these measures represent for the Wabush Mine workers and pensioners are immense and the Wabush Pension Committee is active in demanding justice for all workers involved and to hold the oligopoly and governments to account. The situation of the Wabush miners is one more example of the injustice of the police powers of the CCAA that must cease. All agreements between workers and their state and private employers in the sale of their capacity to work must be honoured and guaranteed for life.

The U.S. oligarchs and their co-conspirators in the Canadian state must be held to account and the rights of all Cliffs' former workers upheld and guaranteed.

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Retirees Oppose Theft of Pensions and
Medical Benefits
"We Are Saying that All This Was Negotiated in Contracts for Life
and Has to Be Reinstated"

Workers' Forum recently talked with Jim Skinner, a member of the Wabush Pension Committee about the fight workers and retirees are waging against the decisions of the CCAA courts and to uphold their rights. Jim is a former President of United Steelworkers Local 6285 representing workers at Wabush Mines located in Labrador.


Workers' Forum: What is the context of the fight that Wabush Mines workers and retirees are waging?

Jim Skinner: Cliffs idled the Wabush mine in February 2014, and officially shut it down in October of the same year. What they did was to divest themselves of the company; they separated the U.S. parent from the Canadian division. Then they announced that they were going to apply for receivership. At that moment there was no move from governments to do anything. Cliffs was granted CCAA and everybody thought they would restructure and come back again. But instead they started to liquidate their Canadian assets.

Because the CCAA receivership is a federal jurisdiction, it has to be held in the province where the head office is located. The head office is in Montreal so everything has gone through the Superior Court in Quebec. We (in Labrador) are very far removed from the Court. We have a lawyer there with the USW and the non-unionized staff has a lawyer from Koskie Minsky but it is very difficult to receive the information we need.

When we started to check the Pension Act in Newfoundland we found that it is stronger than the one in Quebec. Right now the Newfoundland and Labrador government is going through the process of applying an interpretation to appeal the decision of the Court not to hear the case in Newfoundland because we all agree that the Newfoundland legislation contains more protection for working people. If we were to win our deemed trust case in Newfoundland, we would have a chance to sue and to recover some of our pension cuts because the employees would be listed as secured creditors. Right now we are not secured creditors because the banks and businesses are taken care of before working people.

(According to lawyers of the Wabush pensioners, a "deemed trust" means that pensioners' money is not considered part of the employer's assets because it is deemed to be held in trust for the plan members. Therefore this money is legally protected, including under bankruptcy proceedings. On this matter of deemed trust, Newfoundland and Labrador pension legislation is considered to be stronger than Quebec legislation. -- WF Note).

Under CCAA, a company has a period of time to restructure and decide what is going to happen with the assets. Bankruptcy protection has been extended now for 2 years and they have extended it once again to June 2017. They are probably going to extend it again because Cliffs wants to sell their assets and move the proceeds to the U.S.

Cliffs also owned Bloom Lake mine in Quebec. They bought that for $4.3 billion and sold it for $10.3 million! We have a problem with that as one of the people on the Board of Directors of Champion is also the Vice-President of Cliffs. It is a fire sale and we think there is some collusion there. But Cliffs cannot be sued while under CCAA. (Champion bought Bloom Lake mine in 2015 -- WF Note.)

WF: What is the current situation Wabush retirees are facing?

JS: We were notified in 2015 with only nine day's notice that we would be losing all our health and life insurance benefits. They received permission from the court not to pay any bills under CCAA, which include their pension obligations and their obligations towards these health benefits. The judge allowed that.

When they stopped putting any more money into the pension plans, of course the plans will go bankrupt. You have 3,000 retirees receiving pension benefits every month; the funds will go bankrupt. The Newfoundland government ordered the pension funds to be wound up. They made an assessment of them, and said the plans are $50 million underfunded. The union people were cut 21 per cent of their benefits and the non-unionized members were cut 25 per cent (they have a separate plan). We are fighting this right now.

The Superintendent of Pensions in Newfoundland and Labrador had the authority to order Cliffs to pay into that fund before they went into CCAA. It had a window of six months before CCAA. The government should have ordered Cliffs to make the special payments towards the deficit in the plan prior to allowing them to go into CCAA. Now we have the federal and provincial governments blaming each other.

There are not enough words in the dictionary to tell you what a desperate situation our members are in. We have people dying because they can't afford their medications. We have people with heart disease who have to decide whether to keep a roof over their head or put food on the table; whether to take all of their medications or take them every other day or even once a week, or cutting their pills in half. We have some widows that cannot afford any medication at all. They have applied for government assistance but up until now the government has not helped anybody.

WF: What is the work you are doing to seek redress within this dire situation?

JS: We have a committee that was formed in Wabush to lobby both levels of government and keep people informed of what is going on. We are saying that all this was negotiated in contracts for life and has to be reinstated. If I take my example, when I retired I received a letter from Cliffs outlining how much money I would get per month and what my health benefits would be. That was for me, and if I should die it would be provided for life for my spouse. We all had that in a letter.

Under CCAA bankruptcy protection, there are no laws. The problem we face is that we depend on our elected representatives to protect what we have negotiated and to protect the laws of the land. When you find yourself in this situation of the CCAA, like the people at Stelco and others, these representatives leave us adrift. We live in a free society and we keep electing these people all the time and they keep doing this to us.

We want our health benefits and life insurance to be reinstated. This is a contract for life. We feel that the government should protect that and force Cliffs to make the payments to provide all the benefits for all their retirees. When you are older and you retire you can't go and buy a plan for medical coverage. Companies in most cases won't allow you to do that and if they do allow it; it is going to be very expensive. Second, along with that, they should force the company to make the payments into the pension fund.

The government also holds a $50 million bond for environmental cleanup, like any mine. We want them to look at that bond and make sure that the company does not get away with this and that they do not get their bond back. All the money Cliffs is making right now in selling equipment and other assets is controlled by the monitor and the monitor is controlled by the Judge of the Superior Court. We want to make sure that part of that money is used to pay off the workers, to pay what is owed to the workers not only to the major corporations and the banks.

Cliffs is trying to make a deal with a company to take over Wabush operations and take over part of their environment obligations so that they can get part of that bond back to pad their bank accounts in the United States. It would be wrong and criminal if our government would agree to that. That is what is happening right now. They are padding their bank accounts. The only ones that are making money are Cliffs by selling their assets and the lawyers that are there with their delaying tactics.

This whole situation requires intervention from both levels of government, federal and provincial. Legislation has to be more correlated to reflect on protecting workers' rights. We have to make sure that our governments are there to protect the workers and not to protect multinational corporations that come in and rape our resources and then go home and leave everybody on their own.

From day one, we filed a petition with the federal government to change CCAA so as to make workers creditors, that kind of stuff. We got an answer back from the government that basically they can't change these things because the U.S. is a free trade partner. They expressed a lot of sympathy but we are not looking for sympathy. We want to make sure that this does not happen to anybody else.

On a continuous basis we are lobbying our Members of the House of Assembly. We are educating them because a lot of them do not know anything about CCAA, do not know about bankruptcy, about liquidation, about how people are hurting.

WF: In conclusion, what would you like to add?

JS: We are telling the people, if you are not affected yet, get on board. Learn about the situation we face, help us to make changes so that this does not affect you tomorrow.

These things are going to happen as long as governments allow these multinational companies or local companies or any company to take advantage of workers. This has to change. Anybody that negotiates a contract, it should be enshrined in law and protected. I do not have to tell the workers in Hamilton and surrounding areas about these things because they have been fighting on these issues for years. They know what I am talking about and I have learned from them.

Together we are stronger.

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