Inflation fears loom large in contract talks between Steelworkers, Algoma Steel

Algoma Steel is thanking the province for its support as the steelmaker transitions from blast-furnace steel making to electric arc furnaces. (Mike McDonald/CTV News)

With the collective agreement set to expire at the end of the month, Algoma Steel says it is offering workers a raise of 10.6 per cent over three years.

Negotiators for more than 2,000 members of United Steelworkers Local 2251 are proposing a contract that includes a 16 per cent raise over the same time – six per cent in years one and two, and four per cent in the final year.

Both offers include cost of living allowances, but the company says the union's proposal amounts to a 20 per cent hike when the COLA is factored in.

In a message from the company to union members, Algoma CEP Michael Garcia said their proposal is the same as the offer recently accepted by members of Local 2724.

"To put Algoma’s current wage proposal in perspective, it is important to note that Algoma’s current production wage rate is approximately $7.25 per hour higher than Stelco, and approximately $3.19 per hour higher AM Dofasco," Garcia said in the message.

"Closer to home, Algoma’s current production wage rate is approximately $1.54 per hour higher than Tenaris."

But union negotiators took issue with the idea that COLA protection amounts to a wage increase, calling it "the COLA myth perpetrated by Algoma and our sister Local 2724."

"It is a form of insurance that only pays if inflation rises," the union said in a message to members.

"It should be noted that Algoma’s product price increases with increases in inflation to protect their profits. COLA does the same for our wages and is not a separate wage increase!"

Talks continue despite the impasse. Company spokesperson Brenda Stenta said in an email the parties met Thursday.

"We expect negotiations will continue," Stenta said.

"The company continues to work toward reaching an agreement before the contract expires on July 31."