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Wabush Mines pension increases coming soon but workers hit with increased taxes

Rita Pynn, co-chairwoman of the Wabush Mines pension committee, says the group wants medical rebates to be tax exempt.
Rita Pynn, co-chairwoman of the Wabush Mines pension committee, says the group wants medical rebates to be tax exempt. - Mike Power

Another battle brewing for miners


The last three years have been tough for a lot of former Wabush Mines employees.

The mine closed in 2015, and in 2016, workers had their pensions reduced between 21 per cent for unionized workers and 25 per cent for staff. Medical benefits and life insurance were also terminated.

What followed was the formation of the local Wabush Mines pension committee, co-chaired by Ron Barron - who represented the unionized workers - and Rita Pynn, who represented non-unionized staff. Lawyers filed a class-action lawsuit around the reduction.

“It was tough for everybody," says Pynn, “but we fought for what was ours."

For many workers, losing the medical benefits and seeing their pensions reduced was a major blow.

Last year, Jane Walsh told The Aurora the $400 a month for medications that now had to come out of her pocket was stressful, adding that others had even larger bills.

After a series of court proceedings, a settlement was reached more than a year ago. Workers got a rebate in lieu of medical benefits, and pensions will be restored to about 92 per cent of their original number.

It shouldn't have happened: union

Tom Riggs of Wabush worked at Wabush Mines from 1965 until 2000, and served as the union president. 

“The news that pensions were being reduced and medical and life insurance was gone came as a big shock to people,” he said. “Most people thought those benefits were written in stone, and to lose them was devastating for some.”

Riggs commends those who fought to get the pension increases and the rebate in lieu of taxes.

A former union president of the Steelworkers at Wabush Mines, Jim Skinner recently said that it was a "long, hard fight" and called on governments to enact legislation to protect workers and the things they legally bargained for through union agreements. He also says it never should have been necessary for the pension committee to have to take on the class-action suit.

The new pension rates are scheduled to come into effect in May, and a lump sum payment for what was reduced is due in April. In a Facebook post, Skinner says, “Former workers who were in the bargaining unit will get 93.8 percent, which is good, but we are still not getting back everything that was stolen from us by Cliffs, the former Wabush Mines owner."

The rebates in lieu of medical benefits arrived last fall. The amounts for each person varied, and some were substantial. But there's another fight brewing, says Pynn.

Tax exemption required

Recently,  mine workers who got the rebates got a big surprise in the form of T4 slips for the rebates, says Pynn. That means some people will see a big increase in their earnings and therefore will pay a lot of unexpected taxes on those dollars.

“I’ve been speaking with people who say they will be liable for four or five thousand dollars in taxes," she said.

Both Pynn and Barron are asking the government to make the rebates tax exempt.

“There have been cases with similar situations in Canada’s past and we are asking for the same treatment for the Wabush workers,” she said.

 According to Pynn, the medical payments were not taxed in the past and they don’t think the rebates should be either. 

“Some people had to go to work in order to be able to afford their meds, and some lost EI benefits, though some had them restored," Pynn said. Pynn is hoping the government will act quickly and she says workers who are impacted should hold off a while before filing their taxes. With time still available before the deadline to file taxes, she is hoping to have a response from the government soon.

"When we heard the pensions were being increased and we were being compensated for the loss of medical benefits, we thought the war was over, but now it seems like we have another battle on our hands," she says, but she remains undaunted.

"One we will fight as long and as hard as we did for our pensions."


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