Northern Transportation Company Ltd. (NTCL) says it has a decision to make.
Since April 27, the financially-troubled company has had court protection under the Companies’ Creditors Arrangement Act (CCAA) to facilitate restructuring and refinancing of its operations, and that protection is set to expire on Oct. 31 unless it is extended.
“It was a difficult decision to enter into this CCAA process but the company explored all available options and we were left with no other option,” said Mark Fleming, vice-president of the Inuvialuit Development Corporation, which owns NTCL, in a brief written statement to The Hub on Oct. 22. “The company is evaluating the merits of extending the CCAA process and a decision will be made in the next week.”
On April 27, the Court of Queen’s Bench of Alberta granted an order providing protection for NTCL, and PricewaterhouseCoopers Inc. was named as monitor.
Since then, extensions of the stay of proceedings was first granted to Sept. 22 and then to Oct. 31.
On Oct. 20, the monitor filed a report to the court supporting the company’s application to extend the stay of proceedings to Jan. 18, 2017, and to continue to pay special pension plan payments into trust. The application will be heard on Oct. 26.
The pensions have become a controversial issue, which was even discussed in the legislative assembly on Oct. 18.
Hay River North MLA Rocky (R.J.) Simpson said NTCL has made an application with the court to cease its special payments to top up an underfunded employee pension plan.
“The plan is only funded to around 80 per cent, with a shortfall of about $22 million,” he said.
Simpson said, if NTCL is successful with its application, the 622 pension recipients will be the ones to eat the $22 million.
“NTCL has stated that the existence of the pension plan was a significant impediment to finding a buyer to carry on NTCL’s business,” the MLA said. “Many people I’ve talked to see this as adding insult to injury, and it sounds a bit to me as NTCL’s attempt to justify not living up to its obligation.”
Simpson asked Finance Minister Robert C. McLeod if there is any role the GNWT is taking or willing to take to protect the pensions of the former NTCL employees.
Noting that NTCL is a private company, McLeod said the government hasn’t had much contact with any of the parties involved.
Meanwhile, NTCL recently sent lay-off notices to some employees.
“The notice went out to employees, the vast majority of which were seasonal,” said Fleming in his written comments to The Hub. “We can’t provide any personal or individual information about these employees, due to privacy issues. We are following all requirements through this process and are in touch with employees to answer questions and provide other details they may require.”
In a brief statement, the Union of Canadian Transportation Employees/Public Service Alliance of Canada (UCTE/PSAC) said NTCL issued the permanent layoff notices in the last two weeks, including a request that affected workers sign a severance/release notice absolving the company from further action.
“After some discussions with the employer, UCTE/PSAC legal counsel has received notification that NTCL will issue revised severance and release statements with revised submission dates to all impacted employees sometime (this) week,” the union stated. “Therefore, the PSAC/UCTE advises affected members not to sign or submit the previously issued severance offers and release forms.”
The union added it has also been advised that NTCL legal counsel will attest, in writing, that the proposed release statements will not impact employee pension claims.
Neither NTCL nor the union responded to The Hub’s request to confirm how many people received layoff notices and where they reside.