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Paperworkers negotiate for protection against GST costs.

Paperworkers negotiate for protection against GST costs

The Canadian Paperworkers' Union (CPU), representing some 68,000 workers in the pulp and paper industry, will request a 16-per-cent wage increase over the next two years to compensate for the planned Goods and Services Tax (GST).

In most cases contracts expired at the start of April.

The demands are being made despite a slump in the newsprint industry which has resulted in layoffs at some pulp and paper plants in Ontario.

Last month 140 employees at a Gatineau Mill near Ottawa were laid off as a result of the slump in newsprint demand and recently a further 42 jobs were chopped at Normick-Perron Inc.'s milling operations in Kenogami, near Kirkland Lake. The mill in Kenogami processes wood chips for pulp and paper plants.

A published report indicated that representatives of Normick-Perron attributed the layoffs to the decrease in demand for paper.

The International Woodworkers' Union of America decided to accept the 42 layoffs instead of the alternative suggested by the company. The alternative offered the 77 employees was a reduction in their work week to three days.

Gerry Wood, service representative for the CPU in Northern Ontario, said the request for the 16-per-cent increase will be made for workers "to keep up with the cost of living."

He said the increase would be phased in at eight per cent each year.

With the advent of the Goods and Services Tax, Woods explained that workers in the paper industry will be "seven per cent behind on the spending power of their dollar."

From the strike house of Local 870 of the CPU, Woods explained the average wage in the industry is $13 per hour.

Local 870 has been on strike at Nordfibre, a North Bay-based fibreboard manufacturer, for more than eight months.


With contract negotiations looming with one of the largest newsprint producers in Northern Ontario, Abitibi-Price Inc., Woods anticipates there will be no difficulties. "We (CPU) feel that we have put forth a reasonable agenda."

The CPU presented its bargaining agenda to Abitibi-Price on April 2 and, according to Woods, talks are expected to begin this month.

Sharon Paul, vice-president of corporate and public affairs for Abitibi-Price, was unavailable for comment. However, a telephone hotline was set up by the company to answer any enquiries concerning up-coming contract talks.

According to the recorded message, "negotiations in the eastern Canada pulp and paper industry are off to a relatively slow start."

In their current three-year contract, the paperworkers settled for a wage increase of 9.5 per cent.

John McInnes, vice-president of the Ontario region of the CPU, which encompasses all of Ontario, stated in a published report that paperworkers wages have not kept up with inflation, with increases of only 25 to 45 cents per hour in some years.

"Companies have done very well in our estimation. If there is a moderate slump at this time, we don't feel that it is long-lasting or offsets profit gains of the past few years," McInnes said.

Woods said the CPU will be bargaining on "what they (the companies) have already earned," not on projected decreases in earnings.

"Each time we go into negotiations there seems to be a slump in the newsprint industry," he added.

The Canadian Paperworkers' Union will also be looking for a cost-of-living allowance (COLA) clause as protection against GST-induced inflation.

The enthusiasm for cost-of-living allowances is seen as part of a growing trend.

The clause is nothing new, said Woods. "It's been around for years and simply reflects the cost of living. Our pensions are indexed to the cost of living."

The union also wants the industry to accept an attrition clause, meaning that reduction of personnel could only occur through death, retirement or resignation.
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Title Annotation:Canadian Paperworkers Union to request wage increase due to Goods and Services Tax
Author:McDougall, Douglas
Publication:Northern Ontario Business
Date:May 1, 1990
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