Barrett uses Finance Committee to highlight steelworkers plight, MPP questions government strategy re: foreign owned companies

For Immediate Release:
February 12, 2010

Nanticoke – This winter, Finance Committee pre-budget hearings have provided a forum for MPP Toby Barrett to raise the US Steel issue.

In response to testimony from Erin Wier, Economist with the United Steel Workers Union’s Canadian national office, Barrett asked: “With respect to primary industry, do you feel that the Ontario government-the Canadian government, for that matter-has an adequate strategy with respect to dealing with some of the very large foreign-owned companies? I think of US Steel; I think of Vale Inco. Both of those companies, at present, are having a tremendous impact, not only on workers but also on the production of steel and metals.”

During discussion Mr. Barrett more specifically explained, “…we have a company in Canada that purchased Canadian plants, and those Canadian plants are now vulnerable to foreign competition from plants owned by the same company. I’m referring to US Steel and what has happened to the Hilton Works and Lake Erie Works. Of course, the company would indicate that they’ve got to wait for the economy to come back and the price of steel to return, and whether this goes back to Obama’s Made in America and why steel is being shipped up from Gary for Canadian use. But as a result, as far as employment, Local 8782 has 1,100 laid-off workers and 157 locked-out workers.”

Economist Weir responded with: “I would share your concern and surprise that US Steel has closed down the Lake Erie Works. Certainly, I think that was seen to be one of the more efficient and cost-effective facilities in North America…..In terms of vulnerability to international competition, that could be heightened by having the company also owning facilities in the United States.”

Weir also explained that as long as Canadian taxes are below the American federal corporate tax rate, any corporate tax reductions here have the effect of transferring revenue from Canadian or Ontarian treasuries to Washington.

As he stated, US based corporations, “pay the American federal corporate tax rate minus the taxes that they’ve already paid in Canada. So the effect of reducing Canadian corporate taxes further below the 35% American federal rate is not to give more money to American corporations with operations in Ontario, but rather to redirect their tax payments from the government of Ontario to the government of the United States. Maintaining the 14% Ontario corporate income tax rate would retain more of these revenues in Ontario.”
Barrett later noted that the recent $7 billion Samsung energy deal is an agreement that will mean taxpayer dollars going out the door and over the border to a foreign company. He added that Opposition Leader Tim Hudak has asked that the provincial auditor be brought in to vet the details of the Samsung arrangement.

Back in Committee, Barrett again highlighted a gaping loophole that is leaving locked-out US Steel workers in the cold: “…for those laid off, EI runs out this spring, those who are locked out never did get EI,” reported Barrett. “There’s a problem here. If you’re locked out, for purposes of EI, it’s not counted as an excluded week. You don’t exist, essentially.”

Weir in responding to Barrett stated: “we do tend to take the view that if the employer chooses to lock us out, that’s analogous to being laid off involuntarily, and the workers in that situation should receive employment insurance benefits. I would note that in many American states, locked-out workers would receive unemployment benefits, so I’m very glad that you and others are making the case for that kind of reform in Canada.”

Barrett continues to address the US Steel issue with Labour Minister Peter Fonseca, and has also indicated his support for Hamilton East-Stoney Creek MPP Paul Miller’s Private Members Bill slated for debate April 15th that is designed to bring in a fair system for those locked-out.

In conclusion, Barrett pointed out on committee: “We know a significant amount of money went to the auto sector, and a significant amount of money is flowing through the municipal sector in stimulus funding.

ranted… if we build cars, we produce steel, but I don’t see the direct kind of grants or funding, say, for the primary industry, for the steel industry.”
Weir responded: “I think that’s an accurate observation, that there has been quite extensive support for the auto industry. Certainly, I’m in favour of that support, but it would be nice for the government to recognize the importance of having steel manufacturing in Ontario to sustain all of the other manufacturing industry, including autos, that is built on that. I think you’re absolutely right that the province should probably pay a little more attention to supporting the steel sector as well.”

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For more information, please contact MPP Toby Barrett at
(519) 428-0446 or (905)-765-8413, 1-800-903-8629