Peggy Revell
Frustration, outrage, and a call for government action rang out as more than 40 people attended an emergency “town hall” meeting on the forestry crisis and AbitibiBowater bankruptcy hosted by local MP John Rafferty last Thursday evening at La Place Rendez-Vous here.
“We’d like to hear stories, but also solutions,” Rafferty told the crowd made up of mill workers, pensioners, small business owners, and local residents.
“You’re all on the ground floor here, you probably wake up in the middle of the night with solutions, so let’s have a wide-open discussion and feel free to speak your mind,” he stressed.
But before opening up the floor to comments, Rafferty gave a quick update concerning AbitibiBowater’s situation after having spoken with one of the company’s vice-presidents in Montreal.
“I was assured that contractors who were doing work right now were getting paid from that point of credit protection onwards, and will continue to get paid,” he noted.
Rafferty also recounted how he asked the vice-president to give a realistic picture as to whether, in the next few years, the region’s two AbitibiBowater mills were “still going to be AbitibiBowaters and still going to be operating.”
While the vice-president’s response was that there can be no guarantees, Rafferty said he was told that having the hog boiler was a “really good plus,” making Fort Frances “way up on the list of properties that they [AbitibiBowater] will be protecting.”
In terms of the schedule for credit protection, Rafferty told those on hand that he had been informed AbitibiBowater hopes to have its plans before the banks and courts for consideration within two months, and that the smaller businesses and creditors which haven’t been paid are expected to be paid in 12-16 months.
“That sounded like an awful long time for me but I understand, in the creditor protection business, that’s actually not bad length of time,” Rafferty said.
But for the small business owners, considered unsecured creditors, having protection and being paid what they are owed was one of the top things that needed to be done.
Some on Thursday night spoke of second mortgages, or taking out loans to stay afloat that put not just business on the line, but even their family home.
“What we need is what we’re owed,” stated one small business owner to applause from the crowd.
“You just wait on the small businesses to see how many are going to fail,” Robin Woolsey, a custom hauling subcontractor, warned about the future. “This is just getting started.
“We’ve tripped, but we haven’t fallen,” he added. “We’re going to be able to hang on for a while, but how long are we going to hang on?”
Woolsey noted if a small business wants to borrow money of any kind to help them make it through, that means having to guarantee everything.
“You have to guarantee your property, you’ve got to guarantee your equipment,” he explained. “But how are you going to pay for your equipment if they haven’t paid you for what you’ve done?
“Once you get down and you’ve got your creditors that you owe, and you want to start back up, who’s going to give you the money to start?” he asked. “Then you’ve got to go and borrow more money, and see what happens and try to ride the wave and hopefully everything is going to improve?
“There’s lots of guys in the boat on the bottom end that, they’ll be able to struggle along for a little while, but one more glitch in the program and the grid is out.
“There’ll be a lot of us guys who will be gone,” he stressed.
While local businesses are feeling the “immediate pain” of having lost thousands of dollars because of the current bankruptcy phase AbitibiBowater is undergoing, mill workers have contributed similar amounts over the years to their pension plans that might also be lost, noted Herman Pruys, president of IAM Local 771.
“A lot of our retired folks are asking about pension solvency,” he said. “Our last reported solvency rate was 89.1 percent, but that was 2007’s figures.”
“It’s devastating to watch normal and everyday people lose their life savings,” remarked retired mill worker Alan Bedard, who garnered applause at the end of his speech.
“[To] watch workers that have worked for years lose their pensions and their retirements, and a CEO gets before they file for bankruptcy, takes their money out, takes their incentive pay out, takes all their pension out and then steps back and looks at the government for more money, coming out of the taxpayers pocket that are you and I.”
Bedard called for a code of ethics for CEOs who would take this money before their company goes into bankruptcy, a code of ethics for politicians, as well as a national forestry strategy that would give timber rights to citizens, not corporations.
Protecting pensions was one of the topics addressed by NDP leader, Jack Layton, who addressed Thursday night’s meeting via speaker phone.
Layton pointed out that last spring the “Workers First” law was written, and part of that law would put pensioners at the “front of the line” in the case of bankruptcy.
“We actually managed to get it through the House of Commons last spring,” Layton said. “But incredibly, the part of the law that deals with protecting pensions in the case of bankruptcy has not been proclaimed by the Harper government.
“In other words, it’s passed, it has the Governor General’s signature, but the prime minister and cabinet have to take the step to put it into force, and they refuse to do it.”
Another issue Ottawa was called upon to take action on was the so-called “black liquor” tax credit in the United States.
“I think what really hurts the mill right now is this ‘black liquor’ tax credit that’s going on in the U.S.,” noted Pruys. “Some of the big mills, there’s two of them in Tennessee, they’re profiting to the tune of $2 million a week simply on the ‘black liquor’ tax credit, so they don’t care if they even sell their product.
“They’re just getting all the money.”
This tax credit , put into place by the U.S. government back in 2002, gives money to mills if they use alternative energy sources.
But a loophole in this law has meant some U.S. paper mills have been adding diesel fuel to black liquor (a by-product of the pulping process), then are able claim it’s an alternative fuel and collect millions from the American government, Rafferty explained.
“And the funny thing is it’s not really an alternate fuel,” he noted.
“I did a little calculation, and these two AbitibiBowater mills in this riding [Fort Frances and Thunder Bay] would get under this American subsidy—if we had this same subsidy—they would be getting $154 billion [cash] annually from the Canadian government for burning alternate fuels.”
Rafferty assured the crowd he’s already spoken with the federal natural resources minister about the issue, as well as spoken in the House of Commons about it.
“I’ve asked the government to either force the Americans to do away with this subsidy or to match it,” he said. “Whether the Americans stop their subsidy or we equal the subsidy, it’s going to help our marketplace considerably.”
Last last week, the federal government did announce it would be joining the European Union, Brazil, and Chile in protesting against the “black liquor” tax credit.
“As leaders, we all know we’re in a terrible time, but we need a government to get us through the trough and to the other side because there is a future,” Stephen Boon, national rep for the Communications, Energy and Paperworkers Union of Canada, said when he took the microphone Thursday night.
Boon pointed to how auto-maker suppliers are being protected, how governments have stepped in to help support faltering banks, and how the province of Quebec has stepped forward to give bridge financing of $100 million to AbitibiBowater.
“But right now, the [federal] government can’t sit on the sidelines and say, ‘We’ll let the chips fall where they may’ as the Americans do the opposite and help their industry.”
For many issues, Ottawa has stepped aside and said it was provincial jurisdiction, Boon noted, but added there are things the federal government can take action on, such as the “black liquor” subsidies or helping to secure financing for the troubled forestry sector.
“Instead, this government has sat back, at a federal level, and said sink or swim on your own, we have no part of it,, we have no concern with it,” charged Boon.
“And certainly now we’re seeing the repercussions on the small business, the pensioners, and on communities.”
