Five Exhibits from the 2014 Pensions Heist

by Doug Nesbitt

Montreal City Hall after firefighters and municipal workers make their anger known (source: National Post)
Montreal City Hall after firefighters and municipal workers make their anger known about attack on pensions (source: National Post)

Five important pension fights have erupted across the country in recent months. Employers, public and private, are once again going after pensions in what amounts to a heist.

Every generation of worker is facing the attack: new hires, veteran employees, and the retired. In every case, the public and private employers want to replace plans with guaranteed pay outs (“defined benefit”) with pensions that pay out based on stock markets or company performance (“defined contribution”). Check out Pensions 101 for an essential read on different types of pensions.

But pension plans are healthy in Canada. The pensions “time bomb” is being used by government and corporations to get what they want. Corporations want plans without defined benefits so they can use the money to gamble on the stock market, and bust up union power. Governments want to cut spending for the 1% austerity agenda and weaken public sector unions.

Here are the five fights that show us why we need to find a way to rebuild a coordinated pensions campaign for all workers, inside and outside the unions.

Bombardier in Thunder Bay
Toronto’s new sleek streetcars are built here but the 900 workers of Unifor Local 1075 have been on strike since mid-July because Bombardier wants to weaken the pension plan for new hires and push through other concessions. This is another case of a “two-tier” pension, or two-tier contract.

Bombardier made $572 million in profits in 2013 and its CEO Pierre Beaudoin “earns” $6 million in annual compensation

Bombardier has become a lot more aggressive in recent years. The same Thunder Bay workers had to strike for three days in 2011 against the same attack on pensions. Bombadier workers at the La Pocatiere, Quebec plant also struck against attacks on pensions for five weeks in late 2012. Neither workplace had seen a strike or lockout in at least a couple decades.

Bombardier’s attack on pensions is about reaping more profits, not saving a company in hard times. Bombardier made $572 million in profits in 2013 and its CEO Pierre Beaudoin “earns” $6 million in annual compensation for never being on an assembly line or in a workshop.

June 4: Walking off the job at Cascade Aerospace
June 4: Walking off the job at Cascade Aerospace (source: Unifor)

Cascade Aerospace in Abbotsford BC
Over 400 aerospace workers represented by Unifor Local 114 began their strike on June 4. The company wanted not just a two-tier pension system, but cuts to health benefits and vacation time for new hires. The workers were striking on behalf of the next generation of workers: people who don’t even work there yet. The union members recognized that a two-tier contract was a divide & conquer strategy that would undermine solidarity within the workplace. Like Bombardier, Cascade is benefiting from major government contracts, including repairing the large airlift Hercules C-130 planes.

After a tentative agreement was ratified following mediation, the strikers returned to work on August 25. Gavin McGarrigle, the lead Unifor negotiator, told the Vancouver Sun that the union agreed to changes on vacation and pensions but that it won’t affect workers during the life of the new four-year contract. “”We look at this as a truce and we’ll continue to build Cascade and go back to the bargaining table and seek to deal with those issues next time, long before they impact any members,” McGarrigle said.

ArcelorMittal lockout at Contrecoeur
On August 6, nearly 300 Steelworkers were locked out at the ArcelorMittal plant northeast of Montreal after rejecting a contract offer by a narrow 52 percent. Like Bombardier and Cascade Aerospace, ArcelorMittal wanted to impose a two-tier pension plan. Young workers would lose their a defined benefit pension plan for a defined contribution pension plan, meaning their retirement would be uncertain and based on market forces. The lockout ended in less than two weeks after workers voted 84 percent to accept a contract proposed by a mediator. The employer contribution will remain the same but the union is responsible for any future debt or surplus in the plan.

Regina’s Civic Pension Plan
The Regina Civic Pension Plan covers 4,000 current employees and 2,000 retirees, including firefighters, librarians, bus drivers, teaching assistants, and other city workers for five different employers. The plan offers, on average, a very modest $1,600/month or just shy of $20,000/year.

After the 2008 economic crash, Regina City Council voted to break the terms of its own pension bylaw and provincial law to not increase contributions

The City of Regina and the Saskatchewan Superintendent of Pensions are putting the plan in jeopardy due to their own mismanagement and failures, not the fault of workers. After the 2008 economic crash, Regina City Council voted to break the terms of its own pension bylaw and provincial law to not increase contributions. The provincial pension regulator then failed to enforce the law and make the city pay its fair share. All the while, workers have continued to pay their share.

In fact, workers have already made concessions by taking on more risk for the plan in order to protect the plan’s defined benefits. Now the City of Regina is trying to run away from a Letter of Intent to protect the defined benefit program. The City wants to turn it into yet another defined contribution plan with uncertain benefits.

Making matters worse, the Saskatchewan Superintendent of Pensions recently announced it was considering cancelling the Regina Civic Employees pension plan.

The unions representing the workers – CUPE, the Amalgamated Transit Union, Saskatchewan Union of Nurses, and the Regina Professional Fire Fighters Association – are now campaigning for the City to Honour Our Deal and defend good pensions.

Quebec’s municipal pension plan

Protest against pension attack at Montreal City Hall June 17 2014 (source: National Post)
Protest against pension attack at Montreal City Hall June 17 2014 (source: National Post)

The Quebec Liberals are attacking a province-wide pension plan for municipal workers (municipalities fall under provincial jurisdiction according to Confederation). “Loi 3” or Bill 3 will make workers more responsible for a $4 billion deficit in the pension plan that was not created by the workers in the first place.

Don Pittis, writing for CBC, makes the point that “the pension deficit can be traced back, in part, to a previous attempt to balance the province’s books. Back in the nineties, Quebec downloaded hundreds of millions in costs to the municipalities. To help them deal with those expenses, since pension plan investment returns were strong at the time, municipalities were permitted to take a pension-contribution holiday.”

Once again, workers, not the politicians and their right-wing ideologies of today or the 1990s, are to blame for the mess.

The government is conducting public hearings on Bill 3 but as the unions point out, the hearings are just window-dressing and will likely not sway a government that is already set on offloading the burden to workers.

The president of the 10,000-strong Montreal municipal white collar workers union has not ruled out a general strike against Bill 3

Workers and their unions have responded with escalating militancy. A number of unions have hounded politicians across the province, while the president of the 10,000-strong Montreal municipal white collar workers union has not ruled out a general strike against Bill 3.

Most dramatically, firefighters stormed City Hall chambers on August 18, threw water at city councillors, tossed their papers, and caused a ruckus with horns and whistles. They carried a banner “Coderre Voleur”, describing Montreal Mayor Denis Coderre as a thief.

Only four months ago, Denis Coderre was allowed a platform to speak at the Canadian Labour Congress convention in Montreal. The CLC has no campaign around pensions right now, as a promising campaign on pensions a few years ago was shut off by the CLC leadership in favour of closed-door meetings with politicians.

 

 

 

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2 thoughts on “Five Exhibits from the 2014 Pensions Heist

  1. This attack on workers’ pensions is not rational.
    It is logic: the logic of capitalism.
    The constant drive to maximize profit by squeezing it from those who produce wealth: workers.
    Capitalism cannot be managed or reformed.
    Until capitalism is removed nothing will change especially when organized labour is led mainly by class collaborators.

  2. At the University of California, Berkeley (public sector), the Regents imposed on non-unionized workers a two-tier pension plan. One at a time, the unions as their contracts came up were agreeing or sticking it out to try and stop it. Then the nurses, the most powerful union because of the medical centers, figured out that the two tier benefits could be almost totally stopped by increasing the employee contribution of all workers by 1%. The university agreed with them, so it became a new position of strength albeit made at the expense of worker contributions, but by all.

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