TORONTO The widely held stereotype of
Canadians being a polite, respectful and orderly bunch can be
quickly shattered by looking at the country's long history of
acrimonious labor disputes in the mining sector.
Extracting Canada's rich bounty of mineral resources is only
possible by employing a work force that is organized and
largely unionized, setting the stage for heated confrontations
that frequently result in work stoppages and the occasional
picket line scuffle.
To resolve differences, negotiators must get to know one
another, understand each other's motives and limits, and build
credibility within a long-term relationship. But a dramatic
change in the corporate landscape over the past few years has
meant rebuilding these partnerships.
Much of Canada's big mining operations are now under foreign
ownership. Xstrata Plc, Vale and Rio Tinto have replaced names
such as Falconbridge Ltd., Inco Ltd. and Alcan Inc. that were
around for generations. With global multinationals now in
control, negotiators for the Canadian Auto Workers union and
the United Steelworkers union, which vehemently opposed the
foreign acquisitions, find themselves in uncharted territory.
While many of the same company negotiators remain at the table,
the people who hold the purse strings now reside thousands of
miles away in boardrooms where Canadian operations are just one
small piece of their global business empire.
So far, the verdict is still out on whether foreign
ownership has helped or hindered labor-management relations. In
early 2007, executives with Switzerland-based Xstrata reached a
new three-year pact with the CAW at the former
Falconbridge-branded Sudbury, Ontario, operations, the first
time in a decade that workers there signed a contract without a
work stoppage. In September, Vale Inco Ltd. workers in
Thompson, Manitoba, gave their blessing to a new contract with
minimum talk of a labor disruption.
But hopes for a new era of positive labor relations were
diminished at the start of October, when workers at Xstrata's
Kidd Creek metallurgical operations in Timmins,
Ontario-formerly the possession of Noranda Inc. and
Falconbridge-walked off the job. The prolonged dispute saw
accusations from both sides of unfair bargaining tactics.
Unlike the earlier Sudbury and Thompson agreements, the Kidd
Creek contract was unfortunate enough to be up for renewal at a
time when the credit crisis was reaching a fever pitch, sending
world markets and economies into a tailspin. It was undoubtedly
not a moment when Xstrata would be easily willing to put more
money on the table or make concessions on issues such as job
This all makes for an uneasy backdrop for some key
negotiations in 2009, most notably at Vale Inco, where labor
contracts in both Sudbury and at Voisey's Bay in Labrador are
up for renewal.
When Vale Inco's Manitoba labor pact was reached, both sides
expressed considerable admiration for each other that almost
sounded gleeful. Les Ellsworth, the lead negotiator for the
USW, went as far as saying he was "excited" about presenting
the contract to workers, suggesting things went so well at
Thompson that Sudbury negotiators had much to look forward to.
"Sudbury, I believe, will get a good contract. They got a good
start, let's put it that way," Ellsworth told AMM back
But a Vale Inco spokesman was quick to point out that each
contract negotiation is handled unto itself, and warned against
drawing links between the two. That's probably prudent advice.
While Thompson could serve as a framework for Sudbury, the
Ontario operation has different cost scales, productivity
levels, infrastructure requirements and other variables. And,
of course, the acceleration of the financial crisis since
September is sure to be felt at the bargaining table.
Sudbury has one of the most expensive work forces in the
global base mining industry, and Brazil's Vale will set its
agenda based on expected return on investment. Turning a profit
in an era of depressed nickel prices, sluggish demand and high
input costs for everything from explosives to fuel won't be an
easy task. Open-ended bonuses based on the price of nickel
could become a thing of the past. Many of the same challenges
face Voisey's Bay, where the current labor contract expires at
the end of March, two months before the Sudbury pact must be
Despite all these challenges, there are reasons to be
optimistic. A work stoppage at Kidd Creek wasn't avoided, but
union officials there are linking the core of the dispute to
the inherited scars from the past and not to the new foreign
ownership. "Our problems at Kidd were there long before Xstrata
took over," Hemi Mitic, assistant to the president of the CAW,
said. "I think the relationship has actually moved in a better
direction. There is more openness, more sharing of information
and consulting. At least at the local level there was a marked
improvement, and we've noticed it in Sudbury as well."