U.S. Steel Canada retirees to ask judge to reinstate their benefits

A pack of steelworkers will head to a Toronto courtroom Wednesday to show support for a motion asking a judge to force U.S. Steel Canada to begin paying their benefits again.

The benefits would cost the company $3.5 million per month to reinstate, according to documents filed in court ahead of Wednesday's hearing.

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But retired steelworkers argue the cost of not providing the benefits is far higher, and is being borne by retirees.

"Many retirees are not attending routine and preventative dental appointments or getting eye glasses," according to an affidavit filed ahead of the hearing.

Some of the retirees were in the middle of dental processes when the benefits cut out, leaving them with discomfort for eating or talking. Others found out their benefits had been cut when they were at the pharmacy to refill prescriptions. Union reps describe many tearful phone calls with retirees confronting an uncertain reality, some of which stories are included in the court documents.

The steelworkers argue the company is doing better than expected and should kick in the benefits again.

'Health has been destroyed or terribly damaged' at work

U.S. Steel Canada was allowed to stop its payment of the benefits, known as "other post-employment benefits" or "OPEBs", last October after Judge Herman Wilton-Siegel ruled the Canadian company could separate from its Pittsburgh-based parent and suspend the benefits as a "cash conservation measure".

That move came after the Pittsburgh parent diverted business from the Canadian operations, sending them instead to U.S. mills.

Many of the retirees had spent their entire adult lives working at Stelco, and didn't know how to access health benefits on their own, according to a motion filed by the United Steelworkers union and retired salaried workers.

"The benefits are critically important for vulnerable and ill retirees, many of whose health has been destroyed or terribly damaged by years of working in dangerous and heavily polluted environments," the motion says.

'It is not close to being a replacement'

The province set aside $3 million initially, and added another $2.5 million recently, to help with some urgent cases, prescriptions and health needs.

But the steelworkers say people are falling through the gaps in the coverage from that temporary fund.

Bill Missen is one of the salaried pensioners and was formerly a senior vice president with Stelco.

"While the Transition Fund is greatly appreciated," Missen said in his filing, "it is not close to being a replacement of the [U.S. Steel Canada post-retirement benefits]."

For one, he said he represents 300 people who live outside of the province and thus don't qualify for the transition fund.

And the fund excludes expenses like regular dental appointments, vision and hearing checkups, "paramedical" expenses like orthotics and physiotherapy and psychological counseling, Missen said.

'Critical to many retirees'

Missen said he's reviewed the company's financials and believes that U.S. Steel Canada would be able to reinstate the benefits without having to draw on its standing loan.

The benefits, he said, "are critical to many retirees who rely upon these benefits without which they are exposed to significant hardship."

"The fact that such crucial benefits could be suspended by a court was not just shocking, but has led many retirees to believe that their pensions are similarly vulnerable and could be taken away by the court to benefit the company," the steelworkers' motion says.

Bonuses and extensions

These arguments come as U.S. Steel Canada is asking for court permission to grant retention bonuses to "35 key employees" whom it says would be integral to keeping the company going in the event of a successful sale.

The company will also be asking the court to extend its bankruptcy protection until Nov. 30 to continue negotiations and vetting in its sale process begun in January. The period was scheduled to expire Thursday.

The Pittsburgh-based U.S. Steel argues in response that the deadline should only be extended to Aug. 12, arguing the process has gone on long enough and U.S. Steel Canada is showing a "lack of urgency".

U.S. Steel Canada entered the Companies' Creditors Arrangement Act in Sept. 2014. A previous sales process ended without a successful buyer.