By Andrew Low
Ontario jobs and pensions at AbitibiBowater (TSX:ABH), which has mills in Thunder Bay, Fort Frances and Iroquois Falls, should be safe for now, according to a company spokesperson.
"At this point, there is no plan that any of the operations would stop," said AbitibiBowater spokesperson Jean-Philippe Côté.
The forestry and newspaper giant is currently under court-ordered bankruptcy protection in the Companies’ Creditors Arrangement Act, which gives it time to negotiate with its creditors.
Workers are currently receiving pension benefits and most are still going to work.
"My understanding is there is no problem foreseen in terms of the actually pension plan," Côté said. "It looks very safe."
Although pensions are in place, severance and special contributions are not being paid to Ontario employees during this time.
"It’s very difficult at this point to know exactly how and when the restructuring plan will unfold," said Côté. "This is a several month process."
During the next few months, the company will be running shutdowns at its mills and plants. The only one planned in Ontario is a two-week shutdown at the Thunder Bay site from May 16 to June 1. However, Côté said the reason is mainly due to poor market conditions and not restructuring. More shutdowns could be announced at anytime.
The shutdown has Gary Bragnalo and fellow employees of the Thunder Bay AbitibiBowater mill concerned.
"Guys are all worried about their jobs and we’re waiting it out," said Bragnalo, who is the president of the Communication, Energy and Paperworkers (CEP) Local 39.
While the mill is running a shutdown, health and dental plans are cancelled. This will be the first time that contributions to pension plans cannot be increased after a shutdown to make up for the missing payments.
To make matters more difficult, AbitibiBowater retirees were recently notified that they were listed as one of the company’s creditors.
The union is being flooded with calls from employees and retirees who are concerned about their pension plans, said Bragnalo.
At the provincial level, CEP is saying there is no cause for alarm at this point.
"Everything is stayed at this point in time," said Kim Ginter, administrative vice-president of the Ontario division of the union. "The contract is in place."
"They’re dealing with the creditors to try and figure out a restructuring plan," he said. "We’ll be involved in those talks sometime, but not currently."
If there is a pension shortfall, some protection may be available through the Ontario Pension Benefits Guarantee Fund, which pays workers pensions, but only to a maximum of $1,000 per month when a company no longer can. This would provide Ontario employees some protection, said Ginter.
The Financial Services Commission of Ontario, who handle the fund, was contacted, but would not comment on situations of a specific companies.
However, spokesperson Rowena McDougall said that while a company is still under government creditor protection in the CCAA, employees are not eligible to receive payments from the fund.
Ontario isn’t the only province where employees are struggling.
In Newfoundland and Labrador, Premier Danny Williams stated in April that the province would not reimburse AbitibiBowater’s employees’ severance and early retirement benefits, which total $27 million. The province has said they believe the company has an obligation to pay its workers.
In Quebec, the provincial court recently ruled that AbitibiBowater must honour their collective agreement and allow about 200 workers across the country to take their early retirement at 57, rather than 58.
The court ruled that the company’s efforts to unilaterally amend the collective agreement, which came into affect May 1, are illegal. Lawyers from AbitibiBowater argued the early retirement will cost the already bankrupt company an additional $68 million.
AbitibiBowater shares haven’t traded since April 15.
abitibibowater.com
