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Questions on offer to refinery employees

By Daniel Jungwirth

December 3, 2019

What increases are being offered?

An 11.75 per cent wage increase is being offered across the board to all unionized workers. On average, this is a $12,000 raise over the life of the contract. All unionized workers have been offered access to the Company’s performance plan (The plan details need to be negotiated at the bargaining table). Enhanced benefits, including a pay-direct drug card. 

What is the “National Pattern?”

Unifor Canada negotiates wage increases with one of the oil majors in the refining sector (Suncor, Shell, Imperial Oil) and then hopes that other refineries will follow suit. However, refineries are not compelled to provide this wage increase. In 2019, we have decided to agree to this substantial wage increase. 

Why does the Union indicate that you are asking for a -17.5 per cent rollback?

The Company has not proposed a -17.5 per cent “rollback” or pay cut. That is simply untrue. As an example, asking an employee to contribute to their own pension is not a wage rollback—it’s still their money and they receive it as part of their retirement income in the future. Likewise, the Company did not cut the employee savings plan but rather proposed to replace it with another plan. We have already offered an 11.75 per cent wage increase over four years, which is very positive. The Company has informed the Union there are several proposals we are prepared to discuss if the Unifor 594 Executive is willing to engage in meaningful negotiations.

Why have you chosen this round of negotiations to propose changes to the pension plan?

By making the changes now, we protect high-paying jobs now and well into the future. These changes are about the long-term sustainability of the Refinery. We realize that the low-carbon economy of the future is coming. To survive long-term, we must change our business and significantly invest to guarantee that CRC remains competitive. Currently, unionized employees pay 0 per cent into their pension. The current pension costs us $50 to $100 million ($72 million in 2019) per year in funding commitments. We know that when we project our financial situation five to 10 years from now, we simply can’t sustain those types of payments in a low-carbon economy. We must make changes to protect our current and future employees while we can afford to. We are simply asking unionized employees to pay a share of their pension in order to ensure the long-term viability of their future careers.

Also of note—the share our unionized employees pay still needs to be bargained, but the Unifor 594 Executive refuse to even talk about it. 

What is your pension offer?

Currently, we have offered them a choice between staying on their current Defined Benefit (DB) Pension Plan or moving to our Defined Contribution (DC) plan. Both are industry-matching options.

If employees remain in the DB, they will have to contribute to it. Unfortunately, they have been unwilling to negotiate what percentage they will contribute, so the rest of the terms remain as simply a proposal.

If employees move to the DC, they have the option to contribute 0 per cent, and the company will contribute six per cent. If they choose to contribute up to another four per cent, the company will match it for a total company contribution of 10 per cent. This makes the value of the DC 14 per cent. If they choose this option, they will also receive a Retirement Allowance when they reach their retirement date.

What is a Retiring Allowance (RA)?

The RA is how we ensure our employees who move from the DB Pension Plan to the DC Pension Plan are assured of a great retirement. Upon moving to the DC, all employees will move the full value of their current DB into a new plan. The RA is an additional payment (the majority are six-figure payments) that they will get when they retire. This will ensure that we have captured the future value of their money and compensated them for making the transition. Our entire management team made this transition in 2019. Our employees will continue to have a great retirement.

Why did you build a work camp?

We built the work camp for three reasons. First, to protect the refinery in the event of a labour disruption. We simply can’t have the refinery left vulnerable if the Union 594 Executive takes the workforce out. Second, under the same theme, we have to protect our people, our community and our asset by being prepared for our highly-skilled management team to assume control of the refinery. Third, we have to protect the Western Canadian fuel supply. Our economy is driven by transportation and agriculture. Our job is to fuel Western Canada, and we have to continue to do that regardless of the circumstances. We owe that to our owners, our customers and all Western Canadians.