Brunswick Smelter workers to vote on strike over pension, benefits issues

Employees at Glencore Canada’s Brunswick Smelter operation are considering striking over what their union is calling “never-ending” concession demands from the company on pensions and benefits packages.

While members of the United Steelworkers Local 7085 are expected to vote on a strike on March 28 and 29, negotiations between the employer and the union, which represents 280 employees in Belledune, N.B., have been ongoing for more than five months. The previous contract expired on Feb. 28, 2019. 

The union says the mining company wants smelter employees who are members of the defined benefit pension plan to pay a percentage into the plan themselves. It also plans to eliminate a voluntary early retirement plan and wants to make changes to employees’ health, dental and drug coverage.

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According to Lawrence McKay, the United Steelworkers’ area coordinator for Atlantic Canada and the union’s lead negotiator, Glencore Canada’s proposed changes would be another hit for workers after a major change to their pension plan in the last union contract. In that four-year contract, which took effect in 2015, the company closed the DB plan to employees with less than 12 years of seniority at the company and switched them over to a defined contribution arrangement.

McKay says about 120 employees are in a DB plan and around 160 are in DC.

When the parties negotiated the previous contract, Glencore Canada told the union it needed concessions for its parent company, major mining firm Glencore, to invest in the smelter’s plant, says McKay.

“They got their investment, they’re in the process . . . of starting stage two of the renovation and expansion on the plant itself, but now they’re back looking for more. Enough’s enough.” 

Glencore Canada declined to comment specifically on the potential strike.

“We strongly believe the best outcome for all parties can be reached at the negotiation table,” says Alexis Segal, Glencore Canada’s head of government relations, corporate affairs and communications.

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The company’s proposed change to the DB plan would see those members put four per cent from each paycheque into the plan. The company currently pays 100 per cent of plan contributions.

McKay says the biggest hit for employees would be the elimination of the voluntary early retirement plan, which allows DB plan members to retire before turning 65 and still receive their full pension amount. If eliminated, plan members who chose to retire early would be subject to provincial regulation that reduces their pension amount by six per cent per year ahead of when they’re scheduled to retire.

Glencore Canada has also put forward changes to the health and dental plan. For the drug coverage, the proposed changes would increase the amount employees pay on each prescription to $8 from the current $5, as well as reducing coverage to a set list of medications. “Not all medication covered now will be covered after and we don’t know what that list is,” says McKay.

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According to Glencore’s 2018 annual results, the present value of its DB obligation in Canada is just over $1.82 billion, with about $1.32 billion of that owed to pensioners. It also reported a pension deficit of US$124 million.

The company noted it’s expecting to pay about US$138 million into Canadian pension plans over the next five years and is anticipating contributions of US$83 million to DB plans and retiree medical plans in all the countries it operates in.