Pensions, property taxes debated at U.S. Steel mediation
The company pays $5.8 million in taxes per year as of February
Will pensioners still have health benefits? Does U.S. Steel Canada want to defer paying its Hamilton property taxes, or does it want a precedent-setting exemption?
After five days of mediation, the public is no closer to knowing the answers to those questions.
U.S. Steel Canada and its stakeholders were locked in mediation in Toronto from Thursday to Tuesday. That includes the United Steelworkers union (USW), which is battling the company's request to stop paying health benefits to its pensioners.
That also includes city finance officials, who are concerned about the company's unusual request to suspend paying its property taxes — a move that could impact every tax bill in the city.
But the sessions are closed door, and participants are tight lipped.
"There's nothing we can say right now other than things are progressing along positively," said Gary Howe, president of USW Local 1005 in Hamilton. "We're trying to come up with a solution to everything."
But Howe couldn't say much more, and is unhappy that he can't. "I hate this," he said of the closed-door nature of the negotiations.
For its part, the city is no closer to answers either. Larry Friday, Hamilton's director of taxation, only knew that the city hadn't had much of a chance to make its case during the sessions, and that he expected a conference call in the next two days.
Friday said the answer to the property tax question is an important one.
The company pays $5.8 million in taxes per year as of February, when it successfully applied for a reassessment and signed an agreement with the city about it, Friday said. But that agreement dictates that the company pay its taxes.
"There's a risk of the courts ruling on something that puts us at risk of them not paying their taxes," he said.
- U.S. Steel should pay its property taxes, city argues in mediation hearing
- Steelworkers union pledges to fight for retiree health benefits
- U.S. Steel wants to suspend payments of benefits and property taxes
The mediation session is just the latest in a long, complex complex saga of the steelmaker and the city of Hamilton, one Mayor Fred Eisenberger has likened to "a slow, painful grind."
U.S. Steel purchased the Hamilton works from Stelco in 2007, but in doing so, signed a private deal with the federal government that union and opposition MPs have been fighting to make public for years.
Then in 2010, the company temporarily halted iron and steel making in Hamilton, only to make it permanent in October 2013. Then last September, U.S. Steel Canada entered Companies' Creditors Arrangement Act (CCAA) bankruptcy protection proceedings, citing years of losses totaling $2.4 billion since 2009.
Its goal is to sell the operations, although its CCAA protection only lasts until Dec. 11. The company has applied to extend that, which landed it in mediation that started Thursday and lasted through the weekend.
Three local Liberal candidates – Bob Bratina of Hamilton East-Stoney Creek, Anne Tennier of Hamilton Centre and Shaun Burt of Hamilton Mountain, issued a joint media release on Sunday admonishing what they say is the Conservative government's silence about the loss of pension benefits.
"This government's lack of action to protect pensioners in the Statutory Review of the Bankruptcy and Insolvenvy Act and the CCAA was completely unacceptable," said Bratina, who dealt with the issue as mayor of Hamilton from 2010 to 2014.
Where the parties stand:
Conservative
David Sweet, incumbent MP running in Flamborough-Glanbrook, told CBC Hamilton this month that he "hopes that the best situation prevails out of the bankruptcy protection process." Sweet said he was key in bringing the CanmetMATERIALS lab to Hamilton — a lab where the findings are used in the fabrication and processing of metals and materials.
When asked about the private nature of the 2007 agreement, and whether a future agreement could be public in the event of the steelmaker's sale, Sweet said he didn't see that situation being recreated, but "I've seen stranger things happen."
Liberal
In their joint media release, Bratina, Tennier and Burt claim that the Conservative's plans to protect workers and pensions have failed. The candidates have also been critical of the secrecy of the 2007 agreement. "The Investment Canada Act must be amended to introduce new transparency and enforceability measures to ensure clear and long-term benefits are achieved for Canadians when a foreign takeover takes place," Burt said.
Bratina said that the Liberals would include pensioners in any consultation and planning to change their existing plans.
NDP
Wayne Marston, incumbent for Hamilton East-Stoney Creek, also opposed the secrecy of the 2007 deal. But his concern now is whether what happened will repeat itself with other private deals, in the steel industry or elsewhere. "If you're going to be party to a deal that's using public money, you should make it public," he said. "If you're going to spend taxpayers dollars, you can't hide the deal."
Marston said as pension critic, he introduced legislation that would put pensioners at the head of the line in the event of bankruptcy. If the NDP were elected, "I would expect that's something we'll try to do," he said.