March 20, 2014 - No. 30
April 7 Quebec Election
A New Direction for Quebec --
Stop Paying the Rich!
Increase Funding for Social Programs!
• Marxist-Leninist Party of Quebec Participates
in Quebec Election
Whose Economy? Our
Economy! Who Decides? We Decide!
• Quebec Civic Workers' Defence of Their
Interests Is Not the Cause of Retirement Fund Deficits -
• Persistent Problem in Agreement Between Alcoa
and Quebec Government
• Features of Hydroelectricity Agreement with
Alcoa - Normand Fournier
• Quebec Forestry Workers Reject Resolute
Forest Products' "New Model" - Interview, Pierre
National Union of Pulp and Paper Workers, Kénogami
April 7 Quebec Election
Marxist-Leninist Party of Quebec Participates
in Quebec Election
Marxist-Leninist Party of Quebec (PMLQ) is fielding 24 candidates in
the general election called for
- for a sovereign and independent Quebec;
- for a modern constitution and democratic renewal;
- for a new direction for the economy so as to guarantee
the well-being of the people and the social and natural environment.
"It is the people who should be sovereign and we
encourage them to participate in democratic renewal of the political
process and to define their own position on the present and the
future," says PMLQ leader Pierre Chénier. "Wealth is created by
those who work hard every day to meet their needs and those
of society. They must be at the heart of decisions that affect them and
decide for themselves the direction of the political, economic,
cultural and social affairs of Quebec. Their role cannot be reduced, as
is the case
today, to that of a pool of votes for one political party or
After nominations close on March 22, information on the
names and ridings will be available on the PMLQ website
(www.pmlq.qc.ca). Daily information on
the views of candidates, workers
and the youth can also be found on the PMLQ website in Chantier
Whose Economy? Our Economy! Who Decides?
Quebec Civic Workers' Defence of Their Interests Is
Not the Cause of Retirement Fund Deficits
There is much talk at present about pension deficits in
the municipal sector in Quebec. The main cause of actuarial deficits of
pension funds in the sector is the aggressive investment policy of
municipal pension fund managers who delivered the retirement savings of
employees to speculators and financial fraudsters.
Still carrying an actuarial deficit from before the
municipal amalgamations in 2002, retirement savings were greatly
affected by the financial crisis of 2008, and to a lesser extent by
lower yields in 2011 that generated a negative return. In 2008 alone,
more than 25 per cent of the assets of certain funds were lost.
Participants lost the equivalent of nearly 10 of the 30 or more years
during which they had contributed.
Quebec City civic workers
and supporters demonstrate outside National Assembly, October 23, 2014.
"Deficient risk management," in the words of the Amours
report, was made possible or facilitated by the
legislative oversight or legal constraint, as the municipal sector is
excluded from the provisions for other sectors such as insurance
Why did municipal pension fund managers take unnecessary
In the 1990s, stock returns and interest rates led
municipal employers to increasingly expect high returns on
contributions to fund the plans.
Municipal employers used the surplus generated to take
contribution holidays and were very reluctant to reinvest the surplus
in special "rainy day" funds. They preferred contribution holidays.
"A veritable investment performance culture gradually
developed, to the detriment of managing risks on the basis of
liabilities." (Amours report, page 55)
But in the early 2000s, dividend yields and interest
rates fell. The Canadian bond yields also fell as they were
increasingly in demand from pension funds. The results were less than
what was projected, which led to actuarial deficits.
Employers may have been excited at the idea of
contribution holidays, which were rarely the case for contributing
employees, some of whom used any surplus to improve their benefits,
however, the Supplemental Pension
Plans Act provides for an equalization
contribution borne entirely by employers if there is
a difference between expected returns and results.
On December 31, 2011, there were 170 municipal pension
plans for 122,000 participants. The deficit of these plans in terms of
capitalization has reached $4 billion and must be repaid over a period
of 15 years according to law.
Taking into account that the repayment of deficits from
the early 2000s is stretched over 15 years, the impact of amortization
is increasingly felt in municipal budgets. In addition, with the
drastic drop of 2008, municipal pension fund managers can no longer
rely on high dividend yields or high interest rates to
"balance" the funds. It is therefore the taxpayers who must take up the
Governments through their fiscal policies rescued the
financial sector in 2008, but they did not support retirement savings
to keep them from collapsing.
The fact that retirement savings have not been protected
from financial fraud and reckless risk-taking has led to a weakened
capacity and greater difficulty in managing other issues affecting
pensions, such as people's increased lifespan.
There are programs for compulsive gamblers but obviously
these programs do not exist for pension fund managers. The truth is
that the fund that pays retirees' pensions, that must do the same for
future retirees, was played away and it is the taxpayers (the very same
ones who municipal authorities claim to defend)
who must pay for the amortization.
In Quebec City, the additional tax contribution in 2013
is $2.3 million for property owners, taxpayers, who will pass on a
portion of the bill to tenants. For the city of Old Quebec, this
represents $12 to $250 for the "average residence."
Is the role of government to protect retirement savings
to ensure the right to retire or to protect the invisible hand or be
the invisible hand delivering these savings to speculators and
fraudsters? To ask the question is to answer it.
1. Amours Report, Report of the Expert Committee on the
Future of the Pension System in Quebec. The Committee of Experts was
mandated by the Régie des rentes du Québec to produce the
report, which was presented in April 2013. The report is entitled
Innovating for a
Sustainable Retirement System: A
Social Contract to Strengthen the Financial Security of All
Québec Workers. The full text is available here.
Persistent Problem in Agreement Between Alcoa and
The agreement reached recently between U.S.-based
aluminum producer Alcoa and the
Quebec government on hydro rates does not solve the question of
building a resource sector and an economy whose development is decided
by the people and serves their needs. The use of threats instead of
negotiation remains a weapon in the hands of
monopolies. The agreement signed between Alcoa and the government is
said to have been negotiated because there was an agreement concluded
but it is the result of threats and the threats and blackmail persist.
The signed agreement is itself the termination, based on threats, of a
signed agreement between Alcoa
and the Charest government in 2008. If Alcoa can threaten to close its
factories in Quebec if electricity prices accepted in the 2008
agreement now come into force, it may do so again with this new
agreement under all sorts of pretexts. The workers and the people of
do not want to live in perpetual anxiety about
job losses and loss of manufacturing production that are important to
their well-being and the economy.
Quebeckers have no control
over the different aspects of
the agreement signed. What is certain is that hydro rates well below
the industrial rate were granted and now other monopolies are knocking
at the door for lower hydro rates. The $250 million pledged investment,
which cancels out the much larger investments
that were to be made to the Baie-Comeau aluminum
smelter -- investments promised to adapt production facilities for
increased demand expected from the automotive industry and the
electrification of transportation -- are promises that can be abandoned
just as quickly as they were made if Alcoa declares
an economic downturn as an excuse. Alcoa is currently using low
aluminum prices on the world market to justify its threats, but it
doesn't speak of the role it and other aluminum monopolies play in
manipulating these prices or the role that monopolies play in creating
anarchy and chaos in the global economy.
The problem persists because the workers and the people
have no more control today than yesterday over the economic decisions
and the levers that would enable them to play on the various factors at
work and set a new direction for the economy to make it serve the
people and not private monopoly interests.
That is what the workers are addressing in their struggles for their
rights because without this there can be no economic security.
Features of Hydroelectricity Agreement with Alcoa
On February 25, the Quebec government and Alcoa, an
American multinational, announced that they had reached an agreement on
electricity rates. The agreement with Hydro-Quebec for the Becancour
and Deschambault plants is for 15 years and for the Baie-Comeau plant,
The parties involved did not disclose the rate
"negotiated" for the duration of this agreement. There is talk of a
"renewed preferential rate" according to Radio-Canada, which would be
below three cents per KWh.
Price to Pay to Reach an Agreement
Saving the Alcoa plant in Baie-Comeau comes at a price.
For this plant alone Quebeckers will pay $150 million per year in the
foreseeable future. The total loss in hydro electricity rates is $210
million per year for the three Alcoa plants in Quebec.
The modernization of the
Baie-Comeau plant, valued at
more than $1 billion under the agreement signed with the Jean Charest
Liberal government in 2008, has been abandoned in the new agreement.
Alcoa said that it will invest $250 million over five years in its
three plants in Quebec: $150 million is planned
to optimize the casting centre of the Baie-Comeau plant, $71 million
will be allocated to the Becancour plant.
The government gave Alcoa a modulated rate program in
relation to aluminum prices on international markets. This is what the
company demanded at the Commission on the future of Quebec's energy
sector, threatening to close the three aluminum smelters if the Quebec
In exchange for a "renewed preferential rate" Alcoa is
now a partner of the government's transportation electrification
strategy. This agreement "has become a springboard to make Quebec a
world leader in electric transportation," said Premier Pauline Marois.
Since 2002, 900 jobs were lost in Alcoa, 700 of them
since 2008. The company employs approximately 2,000 people in Central
Quebec and 900 in Baie-Comeau.
Let's review the events preceding this agreement. In
October 2013, Alcoa threatened the Marois government that it would
close its three smelters in Quebec if a new electricity rate that would
keep the company in the first percentile of plants benefiting from the
lowest international electricity rates was not granted.
At that time, Alcoa, under special and favourable contracts, paid about
2.8 cents per KWh. In an agreement with the previous Quebec government,
this rate should have increased to the preferential L rate (for large
consumers), at 4.3 cents per kWh in 2014. Alcoa claimed that future
increases would increase its electricity
bill by $250 million per year to $570 million, and that its
profitability and its ability to compete internationally were
threatened because of the increase.
In February 2014, Alcoa had an agreement with the City
of Baie-Comeau on the municipal valuation of the plant. Alcoa
challenged Baie-Comeau's role in the assessment, which was $261.6
million. According to the agreement, the plant's valuation decreases by
$19 million for 2013, $24 million in 2014 and $29
million in 2015. The justification for the lower tax bill that results
from the reduced valuation is the closure of the old Soderberg aluminum
smelter. The City of Baie-Comeau will receive $769,000 less in 2013,
and $887,000 and $1.1 million less for the years 2014 and 2015,
Regarding the abandoned agreement for the modernization
of the Baie-Comeau plant, "[W]e believe that aluminum prices will
recover and at that time, in a few years, a modernization project could
be foreseen for Baie-Comeau," said Minister of Natural Resources and
Minister Responsible for Northern Development, Martine Ouellet. "What
we have in place save[s] Baie-Comeau," she added.
"We needed to build quality jobs in the region," said
Pauline Marois during the announcement in Baie-Comeau. "I am
particularly proud of the conclusion of this agreement, which marks a
new beginning in our relationship with Alcoa, in addition to ensuring
the sustainability of its operations in Quebec and maintaining
quality jobs in our region for a period of at least 15 years. [...] Our
government is using its electric transport strategy to mobilize many
players, such as Alcoa, around an ambitious and promising vision for
the future," she said.
For her part, Minister Martine Ouellet cited the
development of an air-aluminum battery with Alcoa and its partner
Phinergy. In addition, she presents the automobile industry's use of 22
million alloy plates as an outlet to "use the electricity surplus for
economic development [...] Many innovations are expected
in the automotive sector over the next few years, and Quebec is relying
on the capacity of its dynamic companies such as Alcoa to innovate, in
order to distinguish itself."
Following this announcement, the National Union of
Baie-Comeau Aluminum Employees said that "insecurity has been hovering
over Baie-Comeau in recent months." The union president, Michel
Desbiens, said he was reassured that 900 jobs will remain. "It was
becoming hard for families," he said. "But, yes,
we would have liked to have the modernization [of the plant] in the
agreement," he added.
Quebec Forestry Workers Reject
Products' "New Model"
closure of paper machine number 6, at Resolute Forest Products
Kenogami mill, November 26, 2011. (FTQ)
Last December the Quebec Confederation of National
Trade Unions (CSN), representing workers (other than the paper machine
employees and office workers) at the Resolute Forest Products' (RFP)
Kénogami paper mill in the Saguenay-Lac-Saint-Jean region issued
a press release announcing that workers refuse
to accept another demand for concessions from RFP. This demand exposes
both RFP's use of threats and its attempt to impose what it calls its
"new model" of working conditions. Chantier
politique recently spoke
with Pierre Thériault, President of the National Union of Pulp
and Paper Workers of Kénogami. TML
Daily is reprinting this interview. RFP has a network of seven
hydroelectric power plants in the Saguenay-Lac-Saint-Jean region
(Hydro-Saguenay), including the Jim Gray facility on the Shipshaw River
that feeds the Kénogami and Alma paper mills. Access to this
energy resource, which is a great privilege for
RFP, is subject to agreements with the Quebec government, including
Bill 8, which provides the investment and maintenance obligations of
the forestry monopoly for its plants. The lease of the Shipshaw River
plant expired at the end of 2011 and the Liberal government at the time
terminated the lease because RFP
refused to commit to making investments for the next 10 years. More
than two years later, RFP still owns and operates the plant.
Chantier politique: The union issued a
press release in late 2013 that said the Kénogami paper mill
workers have rejected new concessions demanded by Resolute Forest
Products. Can you tell us more about this?
Pierre Thériault: This demand
addresses workers that I represent who are unionized with the CSN,
about 115 workers, including workers in pulp production, on the
railroad, shipping wood chips, finishing and maintenance. The plant
includes sixty workers who work on the paper machine
itself, who are unionized with Unifor (formerly CEP), and a dozen
clerks who are members of the Canadian Office and Professional
Employees' Union (COPE/SEPB).
To give a little background, in early 2012, Resolute
Forest Products closed machine No. 6. Our factory now operates with
only one machine. When they closed the No. 6 machine, they made drastic
job cuts to reduce their production costs to a minimum. Nearly 130 jobs
We thought after that we would have some peace. The
bosses met with us in November 2013 and asked us to reopen our contract
because they wanted to reduce our workforce by about thirty positions
in order to give those jobs to subcontractors. They wanted us to give
up railway workers, workers who ship
the wood chips, finishing workers and some maintenance workers. They
didn't make demands for machine workers as such this time.
They made this demand five months before the end of our
collective agreement. Our agreement expires April 30, 2014. There is no
urgency. At Kénogami, our cost of production is excellent, it is
one of the lowest in the company. They don't want to reduce costs
because we are not profitable; they want to establish
a pattern. What Resolute Forest Products wants is to create a model.
CP: How would you describe this new
PT: They recently restarted the Dolbeau
and Gatineau plants, factories that were closed in 2009. They reopened
them but as a condition to reopening they sat with the workers there
and asked them if they were willing to accept lower working conditions
and the workers, understandably, said
yes. This is the new model they are trying to implement in other plants
in Quebec; maximum outsourcing, subcontracting wherever they can.
Resolute toured factories one after another. It is worth
mentioning that Resolute employs threats everywhere, whether in Alma,
the Laurentians, Baie-Comeau and elsewhere. Resolute started with
the Laurentians two years ago and demanded concessions. The workers
there said no and two days later Resolute
announced their indefinite closure due to lack of orders. We know very
well that it was not true. It was retaliation for the stand of the
workers there because we started getting the orders at Kénogami
from the Laurentians. We had evidence that the orders were there.
At Kénogami we decided to say no because
otherwise there will be no end to it.
At the General Assembly, which took place in early
December, we went over their demands. The members spoke. We held the
vote; 99 per cent of the workers voted to reject the employer's demands
and wait for negotiations. About 75 per cent of our members were
present, which is a high number these days.
I warned my members that we could expect retaliation.
I look forward to
negotiations. With negotiations the company has the right to lock out
workers. We'll see where the balance of power falls. We feel we still
have a balance of power because of our hydroelectricity facilities.
CP: What role do you see the
hydroelectric plants playing in your case?
PT: [When the lease expired,] the
government at the time -- Mr. Clément Gignac was Minister of
Natural Resources -- announced that it was taking possession of the
plant because the company had not complied with Bill 8. Bill 8 is the
law that covers the management of hydropower
plants on the Shipshaw River. The law demands they invest about $400
million in their facilities in Saguenay-Lac-Saint-Jean between 2012 and
2022. When he saw this, Mr. Garneau, CEO of Resolute, said he would not
invest in those facilities. He failed to negotiate with the government
and the government took
possession of the plant. However, the surrender was not real because
since then RFP continues to maintain the plant and enjoy its benefits.
The Parti Québécois government took the matter in hand
and appointed a negotiator. Negotiations are going on between the
government and RFP through the negotiator.
What the law says is that in addition to requiring
investments for the right to use water from the Shipshaw River and
these plants, the Alma and Kénogami plants must be in operation.
It is perhaps here that we find our balance of power at the moment and
which explains why Resolute has not retaliated for our
decision to refuse to reopen our collective agreement as it did
We're demanding they respect the law. All we're asking
is that they make the investments required by law.
CP:What do you want to say in
PT: At Kénogami we're working to
save our jobs; these are quality jobs. Outsourcing our jobs will mean
not only that we lose jobs here in Kénogami, it also means we
will lose quality jobs and this will also lead to the community's
impoverishment. When there are only $13-$14 per hour
jobs in our community, the whole economy will suffer. They are hiring
non-unionized subcontractors. Often they will hire one qualified person
at $20 an hour and the others at $14-$15 per hour, no pension, no
benefits. We want to keep our quality jobs in our factories.
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