Mr. Speaker, thank you for giving me the opportunity to speak to Motion No. 537, which has to do with the takeover of Stelco by U.S. Steel.
Before I begin, I would like to commend the hard work done by the member for Hamilton Centre, for whom I have a great deal of respect. He has a lot of experience and served as minister of correctional services in the Ontario legislature. He is also very passionate about defending the rights of workers, so I was not surprised to see him move such a motion in the House. He believes in it. It is very important to him.
Motion No. 537 by my colleague from Hamilton Centre urges the government to do three things: first of all, to apologize for approving the U.S. Steel takeover of Stelco on the grounds that it has failed to provide a net benefit; second, to make public the commitments U.S. Steel agreed to under the Investment Canada Act in respect of the acquisition of Stelco Inc. in 2007, and the 2011 out-of-court settlement, concerning employment and production guarantees and maintenance of the employee pension system—and I will come back to this part later—and third, to take action to ensure employee pensions are protected, including amending the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act.
I would like to take a moment to explain the first point of the motion moved by my NDP colleague. I will then talk about the third part of the motion, because it applies to a similar situation, one just as upsetting, that happened in my riding over five years ago.
Let us look at what the first point is all about. Why ask the government to apologize for approving the takeover of Stelco by U.S. Steel because there was no net benefit? Let me give a little background on what motivated us to do that. Before it was called U.S. Steel, the company was called Stelco. It was a company that specialized in steel manufacturing that operated in southwestern Ontario.
In 2004, Stelco declared that it had $545 million in long-term debt and a $1.3 billion deficit in pension funding obligations. Therefore, Stelco applied for bankruptcy protection under the Bankruptcy and Insolvency Act, and the Companies' Creditors Arrangement Act.
In March 2006, Stelco came out of Companies' Creditors Arrangement Act protection after selling off different production units. In 2007, in a transaction that was subject to review for approval under the Investment Canada Act, U.S. Steel purchased Stelco for $1.9 billion—$1.1 billion in cash and $800 million in assumed debt.
U.S. Steel undertook to maintain jobs and production and honour pension obligations by making $70 million in annual payments to the employee pension funds to return them to solvency by 2015. Based on that information, the federal government approved the takeover with the understanding that it would be a “net benefit” to Canada.
This is where the story takes a terrible turn. In 2008-09, 700 workers were laid off in Hamilton. That is certainly not a net benefit. There was also the shutdown of the majority of operations in Canada, which is certainly not a net benefit, and the 11-month lockout of the workers in Hamilton and Nanticoke. Then the federal government took U.S. Steel to Federal Court for failing to meet its undertakings on production and pensions. They settled out of court in 2011.
The company undertook to continue producing steel in Canada and make at least $50 million in capital investments to maintain its Canadian facilities. Then it started all over again. In 2013, almost 1,000 workers were locked out for four months. In 2014, U.S. Steel filed for bankruptcy protection, claiming an $800 million shortfall with respect to pensions, of course. Pensioners are still facing the possibility of having their pensions reduced by 30%.
My colleague from Hamilton Centre is right: workers and Canadians deserve an apology from the government for approving the takeover by U.S. Steel. It is obvious that what happened was not a net benefit to Canada. When we see such situations, it is also clear that the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act need a complete overhaul.
Only the NDP, with the decades of work that it has done in defence of the rights of workers and the middle class in Canada, will have the political courage to address these issues. We will begin in eight months.
Unfortunately, what the U.S. Steel workers are going through all too closely resembles what happened to F.F. Soucy workers in my riding. F.F. Soucy was bought out by the American company White Birch Paper in 2007. From 2010 until just recently, retirees were living under the threat of having their pensions cut dramatically. Workers aged 55 and under stood to lose up to 70% of their pension. That is huge.
The retirees had to wait until January 2015 for a judge to rule that they would receive the amounts they had been owed since December 2012. It is shameful that these retirees have been waiting since December 2012 to get what they are owed. The judge also decided that they would be paid 90% of their original pension. That was five years of stress and lost income for these retired men and women who were not guilty of anything more than earning an honest living under a legally negotiated agreement.
The representatives of the F.F. Soucy retirees are right. This case shows why the laws need to be strengthened to ensure that pension plans are given preferred creditor status in Canada.
I will support the motion by my colleague from Hamilton Centre, since too many events in recent history have proven that this motion is appropriate and necessary.
In southeastern Ontario, as in Rivière-du-Loup and all across Canada, there are too many transactions that provide no net benefit to Canadians and too many retirees who have seen their pensions suffer. This needs to change. I am proud to rise with my colleagues in the NDP who are showing, with Motion No. 537, that they do not just talk about their values, but they are also prepared to act on those values right now. Some colleagues are telling me that there are other cases, like Nortel. I would like all my colleagues to have a chance to speak. There are a lot of examples.
In the minute I have left, I would like to put this all in perspective. There seems to be this complete obsession on the right, which can be found across the country, but you hear it a lot on right-wing radio in Quebec, with denigrating unionized workers, and it has gotten completely out of hand.
We need to remind the public that these agreements came out of a completely legal negotiation process. When workers say that they are entitled to something, it is because they have a completely legal agreement. We need to remind the public of what happens in the communities affected. Take, for example, the 200 or so F.F. Soucy retirees who spent years worrying about losing 70% of their retirement income. Just imagine the stress of being in your sixties, having worked for 30 or 35 years and no longer being sure that you will get 70% of your income for your remaining years. Imagine that stress.
Communities and people who are not unionized—such as restaurant owners—have to understand that when hundreds of retirees suddenly see their income collapse because one party did not hold up its end of the pension payment agreement, that is bad for everyone. If, year after year, a retiree is afraid of losing 70% of his income or actually does lose 30% of it, will he still have discretionary funds to spend at cafés and restaurants every weekend? This has a direct impact on the whole community.
When right wingers go on and on about how unions are useless, that has a negative impact on workers and working conditions in the industrial sector. Ultimately, communities suffer. That is what people need to be reminded of. The right has a tendency to get completely hysterical when it comes to the basic rights of workers.