Workers opt to shut mill

SAULT STE. MARIE, Ont.—Workers at St. Marys Paper will close the mill rather than agree to concessions involving their pension plan, a union official said yesterday.
The Communications, Energy and Paperworkers Union of Canada says management wants to wind up the workers’ pension plan and start a new company to access $19 million from the Ontario Pension Benefits Guarantee Fund to subsidize the existing defined benefit pension plan.
That move would result in a “significant reduction” to the pensions its 140 retirees and 380 employees receive, union representative Fred Bond said.
He declined to say how much money workers will lose.
“The employer keeps coming and asking for more,” Bond said at a press conference. “The employees are not prepared to give up their pension plan.”
The paper mill sought bankruptcy protection in the fall after several years of financial troubles.
As part of its restructuring effort, the company and its workers have to reach an agreement about a $20 million unfunded liability in the pension plan.
The union says it gave management a proposal in late January that would keep the mill operating and protect the pension plan.
The company has yet to respond to the proposal.
“We’re trying our best to keep this mill open,” said Bond.
Representatives for St. Marys could not be reached for comment.
Sault Ste. Marie MP Tony Martin said the restructuring should not affect worker pensions.
“Pensions should never be on the table during these kinds of restructurings,” he argued. “They are deferred wages and the only thing between workers and poverty in their retirements.”
The federal government, however, can help St. Marys modernize its equipment once a restructuring plan is ready, Martin added.
Sault MPP David Orazietti said the provincial government is trying to help.
He says the government is setting up loan guarantees for when the company comes out of bankruptcy protection.
“We want to try to help in a way that will make the company sustainable well into the future and to direct our resources to initiatives that will make that the outcome,” he stressed.
On Jan. 30, St. Marys was granted another 59 days to complete its restructuring plan.
An initial three-month protection order expired Jan. 31.