An Ontario judge has approved a plan to sever U.S. Steel Canada from its parent company, suspend health benefits and pension payments, and get a reprieve from paying property taxes. It's part of a transition plan which will allow U.S. Steel Canada to form and manage its own company.
U.S. Steel has operations in Hamilton and Nanticoke and had threatened to close if it didn't get its way. The court decision has left 20,000 pensioners bitter and angry.
For decades, the Hamilton steelworks operation was one of the biggest in North America. But like so much of the steel industry along the Great Lakes and northeastern U.S., it has fallen into decline.
At the time, the company was owned by Stelco. In 2007, Stelco sold to U.S. Steel. The conditions of that sale, agreed to with the Canadian government, remain confidential to this day.
Gary Howe has been a steelworker for more than 30 years. He is the president of Steelworkers Local 1005 in Hamilton.
"Well, we don't know what they were. The only thing that we knew through the federal government is it was supposed to be a net benefit to Canada and then all the information and all the deals that they had were secret under the investment Canada Act," said Howe.
A year later, the recession of 2008 saw the beginning of a major downturn in the steel market. By last year, U.S. Steel Canada went into bankruptcy protection after several years of losses totaling $2.4 billion. Now, as part of a restructuring, it wants to stop making certain pension plan contributions and to stop paying health benefits to some 20,000 pensioners.
One of them is Cecil Crook, a steelworker for 37 years.
"They're just doing a number on us. They're taking away our healthcare, my dental, my vision, drugs, the whole nine yards," said Crook.
Although Crook feels bitterness toward U.S. Steel, he also blames Canada's former prime minister, Stephen Harper.
"He signed a paper saying they could do this," Crook said.
It's not just the pensioners who will feel the impact. U.S. Steel also wants the City of Hamilton to write off $6 million in municipal taxes.
"For a $6 million overall hit, let's say, that would cause us to look at a tax increase of one percent to make up that shortfall," said Fred Eisenberger, the mayor of Hamilton.
Less than a mile from Hamilton's industrial sector is the office of Steelworkers Local 1005. Union leaders, like 1005's vice president Dennis Van Meer, say U.S. steel caused the crisis because it set up its Canadian operations to fail.
"I believe they're trying to get out of their pension obligations, restructure their business and refinance their debt and it's business as usual," said Van Meer.
Van Meer says the restructuring has set a dangerous precedent and possibly a blueprint for other big corporations to follow in Canada and even in the U.S.
While the steel industry in the region has taken on the mantle of the Rust Belt and only the skeletons of the once-mighty industry remain, the 20,000 retired workers of U.S. Steel Canada will soon join the uncertainty and tougher times facing so many of their counterparts to the south. They'll continue to get their pensions and health benefits until the end of the year. Then it's uncertain what comes next.
