Wabush Mines Update for Pensioners
Labrador West MHA Graham Letto would like to advise constituents of a Reference decision of the Newfoundland Court of Appeal released on January 15, 2018 that relates to former workers at Wabush Mines.
When Cliffs Natural Resources shut down Wabush Mines in 2014, the company left the workers’ pension plans with deficits of more than $50 million combined. Under the federal Companies Creditors Arrangement Act (CCAA) protection, the company was permitted to stop paying into the pension fund.
These plans became underfunded, which resulted in monthly payments to pensioners being reduced. Health and life insurance benefits were also cut.Since that time, MHA Letto, the Government of Newfoundland and Labrador and members of the Wabush Pension Committee have been fighting for Wabush Mines pensioners, and advocating for changes to federal law to protect workers instead of companies in times of closure.
The Provincial Government asked the Newfoundland and Labrador Court of Appeal for an interpretation of the Pension Benefits Act, in particular Section 32, to interpret pension protections for those affected by a company closure.
The Court of Appeal found that, firstly, the deemed trust clause in provincial legislation should protect pensioners and that companies are responsible for fully funding pension plans, and secondly, the plan administrator is recognized as a secured creditor in a CCAA process.“We hope this decision is helpful in explaining the proper interpretation of the law of the Province to the Quebec Superior Court in future decisions,” says MHA Letto. “I am thankful for the support of Premier Dwight Ball and Justice and Public Safety Minister Andrew Parsons in moving this issue forward.”
The court decision is available online here.