Judge expected to allow U.S. Steel Canada to suspend benefits, property taxes, pension fund payments

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U.S. Steel Canada was back in court this morning, one day after the bombshell proposal by its American parent to cut it loose.

More than a hundred former steel workers packed the courtroom today for the hour-long hearing. Ontario Superior Court justice Herman Wilton Segal has reserved his decision on a motion that would temporarily suspend pension and outside benefit payments and municipal property tax payments for U.S. Steel Canada.

He will release a short order tomorrow giving his decision, and on Tuesday he will release his decision in full with the reasons attached.

This morning lawyers for U.S. Steel argued that there is not enough money available to continue these payments and still keep the company operating next year. They argued that even with what they are calling cash conservation efforts they will continue to lose $6 to $8 million per month in Canada and that for 2016, the payment of these benefits alone will cost the company about $100 million while the financing available for that period of 2016 amounts to only $75 million.

U.S. Steel says restructuring has failed, and they intend to sever the Canadian operations from its american parent company. U.S. Steel Canada can then proceed on its own, or be sold.

It appears that the judge has accepted those arguments this morning. He has given an indication that there will be at least a temporary suspension of outside benefit, pension and tax payments coming down from his decision. That has the union, its members and their families worried.

United Steelworkers local 1005 president Gary Howe: “What’s happened to these pensioners is unthinkable. They’ve worked their entire life; now for some of them when they’re sick, and they got sick from working there, they have no benefits. Its unthinkable.”

Lake Erie works local 8782 president Bill Ferguson: “What they’re telling us is that its going to be a temporary fix. That’s indicating that this is going to go through. The real problem for all of us is, the people that this affects are the people that are the least able to absorb this blow.”

Trinity Gnatuck, Grade 9 student: “I don’t want to see generations grow up and not have their pensions and have to pay for medical care you know. It’s kind of sad to know that this may fall, and break, and everyone’s going to be sick and and die because nobody can do anything about it. It’s scary to watch generations grow up, it really is.”

The pensioners will still continue to receive their pension payments each month. However, U.S. Steel will no longer put any more money into the pension fund after the end of 2015. Other post employment benefits such as drug, dental and vision plans will all be suspended.

For some of the pensioners who are spending $1,000 or more per month for drugs and in poor health, that is a terrible, terrible blow.

CHCH’s Scot Urquhart will have more on the story tonight on the Evening News at 6.