Former workers are struggling due to slashed pensions and health benefit cuts
Several years following the shutdown of a Labrador mine, people who used to work there are struggling after cuts to their health benefits and pensions.
Their ordeal started in 2014 when US-based Cliffs Natural Resources shut down its Wabush iron ore mine, according to CBC News. Blaming high costs, falling prices, and sagging global demand, the company ceased production at Wabush. As part of a debt restructuring effort, its operations in Labrador and at Bloom Lake in Quebec were put under creditor protection under the Companies' Creditors Arrangement Act.
This was felt by more than 2,400 retirees who have lost their health benefits and had their pensions slashed by 21% to 25%. “I lost over $1,000 a month on my pension,” said retiree and former United Steelworkers local president Jim Skinner, attributing the cuts to an incompletely funded company pension plan. “I've lost all of my medical insurance, all of my life insurance.”
“We have people that are in worse shape than I am,” continued Skinner, who worked at the Wabush mine for 35 years. “We have a terminally ill pensioner now who has been forced to choose between buying food and life-saving medication.”
Union leaders point to the case as the latest illustration of retirees being abandoned by multinational companies that close operations and leave the country. Skinner, along with current union leaders, is pushing for an emergency meeting with federal and provincial politicians to formulate an assistance plan.
They’re also calling for legislation that would prioritize workers and pensioners over other creditors when companies declare bankruptcy or seek creditor protection. “The way it's set up now, secured creditors come first,” Marty Warren, Ontario and Atlantic Canada director for the United Steelworkers, told CBC News. “Workers get what's left. And by then, normally there's nothing left.”
A spokeswoman for Service NL Minister Perry Trimper said the governing Liberals and opposition parties have issued a joint call for a review of federal bankruptcy laws, which could help Wabush Mines pensioners or at least strengthen worker protections in the future.
In a recent letter to shareholders, Cliffs Natural Resources President, Chairman, and CEO Lourenco Goncalves called 2016 a “turnaround” year for the company, with shares appreciating 432% in 2016. With higher ore prices and an improving business climate in the US, Cliffs is positioned for even better performance.
Margie Hoben — married to Gary Hoben, who worked at the mine for 32 years — developed heart problems after the two of them moved to Clarenville, NL to have better access to healthcare. “I'm terminal with heart disease,” she said, “and it's medications that I need to buy that we just can't afford now.
“I don't want anything that we didn't work for,” she continued. “It's just when you work so hard for everything that you have, and then all of a sudden somebody says: 'No, you can't. You're not having this anymore. We're taking it.’”
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Their ordeal started in 2014 when US-based Cliffs Natural Resources shut down its Wabush iron ore mine, according to CBC News. Blaming high costs, falling prices, and sagging global demand, the company ceased production at Wabush. As part of a debt restructuring effort, its operations in Labrador and at Bloom Lake in Quebec were put under creditor protection under the Companies' Creditors Arrangement Act.
This was felt by more than 2,400 retirees who have lost their health benefits and had their pensions slashed by 21% to 25%. “I lost over $1,000 a month on my pension,” said retiree and former United Steelworkers local president Jim Skinner, attributing the cuts to an incompletely funded company pension plan. “I've lost all of my medical insurance, all of my life insurance.”
“We have people that are in worse shape than I am,” continued Skinner, who worked at the Wabush mine for 35 years. “We have a terminally ill pensioner now who has been forced to choose between buying food and life-saving medication.”
Union leaders point to the case as the latest illustration of retirees being abandoned by multinational companies that close operations and leave the country. Skinner, along with current union leaders, is pushing for an emergency meeting with federal and provincial politicians to formulate an assistance plan.
They’re also calling for legislation that would prioritize workers and pensioners over other creditors when companies declare bankruptcy or seek creditor protection. “The way it's set up now, secured creditors come first,” Marty Warren, Ontario and Atlantic Canada director for the United Steelworkers, told CBC News. “Workers get what's left. And by then, normally there's nothing left.”
A spokeswoman for Service NL Minister Perry Trimper said the governing Liberals and opposition parties have issued a joint call for a review of federal bankruptcy laws, which could help Wabush Mines pensioners or at least strengthen worker protections in the future.
In a recent letter to shareholders, Cliffs Natural Resources President, Chairman, and CEO Lourenco Goncalves called 2016 a “turnaround” year for the company, with shares appreciating 432% in 2016. With higher ore prices and an improving business climate in the US, Cliffs is positioned for even better performance.
Margie Hoben — married to Gary Hoben, who worked at the mine for 32 years — developed heart problems after the two of them moved to Clarenville, NL to have better access to healthcare. “I'm terminal with heart disease,” she said, “and it's medications that I need to buy that we just can't afford now.
“I don't want anything that we didn't work for,” she continued. “It's just when you work so hard for everything that you have, and then all of a sudden somebody says: 'No, you can't. You're not having this anymore. We're taking it.’”
Related stories:
Longer lifespans could stress Canadian workforce, healthcare, and pensions: experts
Ontario teacher fights for right to benefits past 65
