One of Toronto’s longest labour dispute is a little more interesting after USW says BMO financed an iffy mortgage to a group that had recently gone through bankruptcy.
TORONTO—The United Steelworkers (USW) says it is holding the Bank of Montreal’s (BMO) board of directors responsible for a questionable loan the union says is prolonging a historic strike in Toronto.
Members of USW Local 526 have been on the picket line since 2009 at Toronto manufacturer Infinity Rubber in one of the city’s longest labour disputes.
USW says it is questioning the bank’s decision to offer new financing to a group that had recently gone through a bankruptcy and was embroiled in a continuing labour dispute.
Workers at Etobicoke-based Infinity Rubber have been on strike since December 2009, when the company demanded they take a 25 per cent wage cut and 50 per cent benefits reduction. These cuts would have been in addition to significant wage reductions the workers had already agreed to in 2008 to help the company through the recession.
Infinity Rubber is the successor to Biltrite Industries, a company that declared bankruptcy in 2009.
Biltrite purchased the Toronto plant for less than one-third of its book value and started running it as Infinity Rubber. The initial acquisition was financed with a high-interest mortgage from Callidus Capital Corporation, a company specializing in high-risk loans for those who can’t get bank credit.
Infinity Rubber then transferred the land on which the plant operates to BRI Holdings Inc.—a holding company incorporated by Infinity Rubber’s top managers—and refinanced the operation with a new mortgage from the Bank of Montreal.
“The impact of this strike has been devastating on our members. Workers have lost homes and cars. It’s a terrible situation,” says Ken Neumann. “BMO can’t just hide behind the veil of client confidentiality.”