In the News March 19
Canadian Pacific Serves Notice of Lockout to Teamsters Canada Rail Conference
Our Position and The Facts – Teamsters
The Teamsters Canada Rail Conference (TCRC) Eastern General Committee of Adjustment issued a statement on March 15, 2022 to counter misleading information distributed by Canadian Pacific (CP) on collective bargaining.
Workers’ Forum is reprinting excerpts from their statement entitled “Our Position and the Facts.”
“No doubt you have been reading the information distributed by CP regarding collective bargaining and given the numerous requests we feel it’s necessary to respond. As we continue to bargain in good faith, we are extremely disappointed to see the misleading statements released by CP, and the inaccurate picture being painted. As your TCRC leadership, we’d like to update you on our position and share the facts with you. We have consulted with both actuarial and legal support during this process and offer these comments.”
With regard to the status of the pension plan, the statement points out:
“The most recent actuarial valuation prepared as of January 1, 2021 shows the plan to be in a very healthy position with approximately $4 Billion of surplus on an ongoing long-term basis (145% funded). This surplus is expected to grow substantially in the future as the interest earned on the surplus alone is expected to total over $200 Million annually. With the fund’s favourable returns during 2021, the Plan’s current ongoing surplus position will be even greater.
“The Plan’s financial position on a solvency basis, which is a hypothetical windup, is also an important consideration when looking at the affordability of pension improvements. As of January 1, 2021, a healthy surplus of over $1 Billion would have existed had the Plan been wound up on that date. Again, with last year’s favourable investment return, along with an increase in prescribed interest rates, the Plan’s current hypothetical windup surplus will be even greater.
“The modest ongoing surplus, according to the Company, is in fact so large, that under the Income Tax Act rules it is considered excessive, and CP is now taking a contribution holiday. What this means is that the company is no longer contributing their share of the pension cost to the Plan and is saving $35 Million in contributions annually. Members continue to contribute approximately $40 Million towards their pensions while CP continues to benefit from the contribution holiday. Since Plan inception, approximately 30% of all money put into the fund has come from member contributions thereby contributing to the current surplus position.”
The union explains that in 2012 the Plan was not in such good shape and, based on an arbitration ruling at that time, pensions were capped to get the plan back on sustainable ground. The cap limited the pension provided to workers and reduced pension costs to CP. They say:
“Today, 2022, a decade later, our members have received no pension improvements and the same caps are still in place, despite the Pension Plan being in a significantly improved position. We did not agree to enter the company’s Pension Improvement Account as we were not willing to agree to the terms and forfeit the right to bargain pensions in the future. Instead, we decided to request pension improvements through the bargaining process which is where we are today.
“Contrary to what you may have read, our pension request is by no means unreasonable. We have asked for the pension cap to be raised by less than 5%, not much given this is the first pension increase in 10 years. This increase doesn’t even cover inflation during the period. We have also asked that all members, including new hires since 2013, be treated equitably and provided the same pension benefits as members hired prior to 2013.
“In terms of the cost to the Plan, the Union’s entire pension request is worth approximately 1% of the current ongoing surplus which is not much relative to how much members have contributed, and continue to contribute, to the Pension Plan. The company’s contribution holiday will not be impacted. It is difficult to comprehend how this request could be seen as unreasonable as suggested by the company.
“Please know that we are very concerned with the prospect of a lock out or strike for not only our members, but for all Canadians. We understand the potential impact of a work stoppage and are committed to getting to a resolution. At the same time, our demands are not unreasonable and there is no excuse why we should not be able to negotiate an acceptable collective agreement.”
The statement is signed:
General Chairman – CTY West
General Chairman – LE West
General Chairman – CTY East
General Chairman – LE East
(Workers’ Forum, posted March 19, 2022)