Study forecasts US Steel closure could cost Hamilton millions

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McMaster University business and economics professor Marvin Ryder says the closure of US Steel Canada will likely have less of an negative impact than suggested by a city of Hamilton study.

Ryder says the city study emphasizes the maximum impact from lost tax revenues and selling city sewer and water services to US Steel and its predecessor Stelco. However Ryder says the offset to the city from current US Steel tax revenues is likely less than $3 million.

He also believes losses to former Stelco and US Steel pensioners won’t be as bad as the study indicates. “If – big if – the pension fund is only 75 per cent funded and these pensioners had to take a 25 per cent hit, it would piull $28 million out of the economy. That’s the worst-case scenario.”

“We actually know that if it is true that it’s 75 per cent underfunded when this all comes to an end, there would be a provincial top-up that would counteract that so I don’t think that the number’s $28 million, maybe the hit is $20 million, but I also don’t think the pension fund is 75 per cent funded.”

“I think by the time we get the report next month it will be 80, 85 per cent underfunded. Still not good, but getting better as every month goes by.”

Ryder suggests Hamilton can recover from the US Steel Canada closure.