Bill C-55 (Historical)

Wage Earner Protection Program Act

An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make consequential amendments to other Acts

This enactment establishes the Wage Earner Protection Program Act. That Act provides for the payment of wages to individuals whose employment is terminated and who are owed wages by employers who are bankrupt or subject to receivership. It sets out the conditions of eligibility to receive payments, the maximum amount covered by the Program, the application, review and appeal process of the Program and the administrative arrangements for its implementation, including enforcement mechanisms. The Act provides regulation-making powers for carrying out the purposes of the Act and it provides for a review of the Act five years after its coming into force.
This enactment also contains amendments to the Bankruptcy and Insolvency Act. Those amendments include changes to the appointment and oversight functions of the Superintendent of Bankruptcy, as well as to the obligations and powers of trustees in bankruptcy, interim receivers and receivers. The amendments also expand the Act to cover income trusts. Also, new provisions regarding corporate proposals are created to address, among other things, the treatment of contracts, collective agreements, interim financing and governance arrangements. Changes are made to the priority of charges, including in respect of wages and pension contributions. The scope of application of consumer proposals is expanded. New provisions are introduced to deal with bankrupts with high income tax debts and those with surplus income, to exempt registered retirement savings plans from seizure, and to allow for the automatic discharge of second-time bankrupts. The period of eligibility of discharge of student debts is reduced. There are changes to the treatment of preferences as well as numerous technical changes. The amendments also provide for a review of the Act after five years.
This enactment also contains amendments to the Companies’ Creditors Arrangement Act. Many of the amendments parallel those made to provisions dealing with corporate proposals in the Bankruptcy and Insolvency Act. The amendments also expand the Act to cover income trusts. The scope of application of the initial stay is clarified, notably regarding regulatory measures. New provisions are introduced regarding the treatment of contracts, collective agreements, interim financing and governance arrangements. The appointment and role of the monitor are further clarified and made subject to the oversight of the Superintendent of Bankruptcy. A new Part on cross-border insolvencies is added. The amendments also provide for a review of the Act after five years.

[Michael Powell]

Yes. It was Bill C‑55. It was debated in 2005 and passed. I don't have the date in front of me, but it was passed in 2005.

[Michael Powell, President, Canadian Federation of Pensioners]

Thank you.

We've submitted the specific changes we believe need to be made to Bill C-228, so I won't discuss those here.

I will be talking about some of the points included in the submission that we made supported by CFP and five other leading Canadians seniors' advocacy organizations.

The fundamental challenge for this committee is to choose between the status quo and extending superpriority in insolvency to the unfunded pension liability. We know the status quo, the intended consequences. We've heard of the personal stories and tragedies of those impacted. CFP estimates that since 1982, 250,000 vulnerable Canadian seniors have had their income reduced for the rest of their lives.

We've all heard the unintended consequences. Here is a quote that I have: “there could be a significant negative impact on Canadian productivity and employment since businesses...will have a tougher time getting financing, and their costs could rise dramatically.” If true, those consequences would have a significant impact on the Canadian economy, a measurable impact. That's why I don't understand why we're having this discussion. That quote is from the 2005 committee review of Bill C-55, the Wage Earner Protection Program Act.

WEPP extended superpriority to unpaid wages and other items in insolvency and was passed in 2005. Note that WEPP impacts every insolvency; extending superpriority to the unfunded pension liability would only impact the relatively small and declining number of companies with defined benefit pensions. Where are the binders of evidence of Canada's poor economic performance versus competitors since 2005? If these charges were true, we should be towards the bottom in GDP growth, at the top in unemployment, at the top in companies filing for insolvency, and at the top in liquidations. Where is the data?

The reality is that superpriority would simply put a price on abandoning pensions in insolvency. Today, the minute a company files, the pension deficit disappears like a puff of smoke.

Be honest: Knowing there's no penalty for underfunding a pension and no obligation that survives insolvency, what CEO is going to fully fund their pension? Allocating funds to the pension instead of, for example, dividends, when not legally required, would get you fired. As Mr. Schaan said on Monday, companies only do what is required. Another comment from Monday said that federally regulated pensions are not required to be 100% solvency funded, at least not as I understand the term “required”.

Statistics support this. From 2012 to 2020, on average, 73% of federally regulated plans were under 100% solvency; that's not required. As mentioned on Monday, the 2021 median funding was 109%, which means today is the time to act, because when that gap is small to get to full funding and many plans are fully funded, then companies can de-risk their pension and pose no threat to lenders going in the future.

We also know that companies are going to regulators and looking for contribution holidays, looking to reduce those solvency levels. Now is the time to step in and stop that. If you change the rules, corporate behaviour will change.

This was the case with Air Canada. At the time of its insolvency in 2003, Air Canada had a $1.3-billion pension deficit. Under ministry monitoring, by 2013 that deficit ballooned to $4.2 billion. In 2013, the finance minister at the time, Jim Flaherty, agreed to further relief, subject to restrictions until the pension was fully funded. Executive compensation increases, special bonuses, and other incentive plans were curtailed. The airline was prevented from paying dividends and buying back stock. With those restrictions in place, that pension was fully funded by May 2015. Monitor, and companies do what is required; change the rules, and behaviour will change.

In Canada, we have two levels of legislation, and pensions get whipsawed between them. We have insolvency legislation, and underneath it 11 different pension benefit acts.

ACPM—they're not unique, but they're here so I'm going to use them as an example—argue that pensions shouldn't be protected in insolvency, that insolvency is not the place, yet they advocate for the removal of solvency requirements in pension regulations. The most recent one I know of was in Saskatchewan a couple of years ago. It's online and you can find it. We know that anything less than 100% solvency funding increases the risk to pensioners. It leaves pensioners as acceptable collateral damage in insolvency.

Since 2005, proposed solutions from governments and the greater pension industry have all been based on shifting risk from the companies that willingly accepted the obligation to the pensioners without obtaining the pensioners' informed consent. This is the very definition of elder financial abuse.

Superpriority would at least partly address the power imbalance in insolvency.

This committee will determine whether to continue the status quo or to protect vulnerable Canadian seniors.

Thank you.

[Luc Desnoyers, Bloc, Rivière-des-Mille-Îles, QC]

I am not confusing the two acts.

Bill C-55 received royal assent on November 25, 2005. Then, in 2008, certain sections of the act came into force. The act, by the way, was passed in late 2005, under a Liberal government.

The Conservatives have enacted some sections, but I think that the section on pensions has been forgotten—a section that is awfully important given today's economic climate.

Opposition Motion—Compliance with the Charter of the French language regarding enterprises under federal jurisdiction located in Quebec

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, the member should do his homework. It is not surprising that he has not defended Quebec workers because he does not know his history.

The objective of Bill C-55 was to amend the Bankruptcy and Insolvency Act. Of course, it included a section that created a program to protect the earnings of workers whose employer had declared bankruptcy. That was a part of Bill C-55. I invite all those who are listening to us now to look for the bill on the Internet. It is a bill that dates from 2006 or 2007. In fact, the largest part of this bill deals with an overhaul of the Bankruptcy and Insolvency Act.

I will return to this example, because it is an excellent one. It is a bit complicated to explain and that is why it never made the headlines. Bill C-55 included a section that stated that from now on some RRSPs could be seized by big finance companies. Not only has this Conservative government done nothing to protect the savings of workers, but, worse, it has done nothing to protect the Quebec Civil Code. How can one believe that this Conservative government is open to the Quebec nation? It is not. It took the Bloc Québécois six months to get it to listen to reason. I say that it is a good example, but it is an excellent example. There is no need to prove the usefulness of the Bloc, but from time to time we must remind everyone just how useful the Bloc is. In the end, the Bloc Québécois used a unanimous motion from the Quebec National Assembly to make this government listen to reason. The government finally gave in and accepted the amendment from the Bloc.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, I would like to reread the Bloc Québécois' opposition day motion.

—following the recognition of the Quebec nation by this House, the government should move from words to deeds and propose measures to solidify that recognition, including compliance with the language of labour relations of Quebec’s Charter of the French language regarding enterprises under federal jurisdiction located in Quebec.

In this regard, I would like to respond to the member for Lévis—Bellechasse, who is gloating that everything is going so well and that 94% of Quebeckers speak French at work. If this is the case, it should be included in the act. If this reflects the real situation, they should put it in writing, support the Bloc Québécois' motion and formalize this ideal situation that exists in Lévis—Bellechasse.

The fact remains that Quebeckers are a nation. By recognizing this, the House of Commons automatically recognized its attributes, in particular its language, its culture, its model of integration and its Civil Code, but we will talk about it later. French is the official language of Quebec, except for the federal government, which recognizes two official languages. However, the federal government does not expressly recognize Quebec's culture. Whenever the federal government comes to Quebec to promote bilingualism, particularly in Montreal, it weakens French. Whenever French is supported in Quebec, it helps francophones outside Quebec.

However, the federal government imposes an integration model. It imposes multiculturalism, which runs counter to the Quebec integration model of interculturalism.

The Bloc Québécois recommends, therefore, that the federal government recognize and comply with the Charter of the French Language in Quebec, specifically with regard to enterprises under federal jurisdiction, that it exempt Quebec from its multicultural policy and that it grant Quebec regulatory power over radio broadcasting and telecommunications.

This would be a start in a genuine recognition of the Quebec nation. In fact, although the Conservative party prides itself on its openness towards Quebec, it has done absolutely nothing for the people of Quebec, except for recognizing the nation, which was, let us recall, a Bloc Québécois initiative.

It was the Bloc Québécois that, on an opposition day like today, introduced a motion that called for the recognition of Quebec as a nation. This government, that really just intended to obstruct and deceive us, used a shameful political tactic and applauded itself as it said that it was going to recognize Quebec as a nation, but within a united Canada. We will see later that Quebec was already a nation before Canada even existed.

As I have just mentioned, a little more than a year ago, on Monday, November 27, 2006, the House of Commons agreed to the following motion by 265 votes to 16:

That this House recognize that the Québécois form a nation within a united Canada.

This was, as it still is, a great victory for the Bloc, but it was above all a victory for all the people of Quebec. To be recognized as a nation is no small matter, and it comes with privileges and rights. But on these, the government is silent.

Even so, it was still the first time that Canada recognized our existence as a national community. It is the first country to do so and we hope that it will not be the last.

Applied to persons, the term nation refers to a “group of people, generally fairly large, distinguished by its awareness of its unity and a desire to live together” according to the definition in the Robert dictionary. In short, “nation” is the community to which we belong, the group with which we identify, and within which we debate and decide how our society is to be organized.

And because a nation is the special place where political decisions can be made, recognizing a nation means recognizing a political entity with legitimate political rights and aspirations.

By recognizing the Quebec nation, the House of Commons recognized the right of Quebeckers to control the social, economic and cultural development of Quebec themselves. By stating that the Quebec nation is composed of all residents of Quebec, regardless of their origin or mother tongue or the region where they live, the federal government recognized that the Quebec nation has a clear geographic base, made up of all of the territory of Quebec. In so doing, Canada declared that calls for partition are illegitimate.

In short, recognition of the Quebec nation also means recognition of the legitimacy of Quebec’s repeated demands that Quebeckers have the powers and resources that are needed in order to develop their own society. To date, unfortunately, Canada has not yet acted on that recognition, and continues to behave as if it was composed of a single nation. Here again, we can see this Conservative government’s lack of openness to Quebec and to Quebeckers. As we shall soon see, this government’s openness to Quebeckers is a myth; it is an urban legend. Recognition of a nation must in fact be more than symbolic.

Nations have rights, and they have one right in particular, the right to self-determination, the right to decide the course of their own development. Quebec can choose the course of its own development by becoming sovereign. We know that this is the first choice of the Bloc Québécois. Just as it can choose to try to get the powers and resources it needs in order to achieve that by working to renew federalism. That is not our choice. But both options are legitimate, and we recognize that.

While waiting for Quebec to be sovereign, the Bloc Québécois works to promote the sovereignty of Quebec every day. The Bloc works to defend the interests of the Quebec nation. Even without recognition by Canada, the Quebec nation continues to exist, to pay its taxes, to have interests that are unique to it and that are often very different from Canada’s. The Bloc continues to defend the interests and promote the values of the Quebec nation. If Quebeckers form a nation, it is not up to Canadians to decide how they plan to organize their society.

Because Quebec is the homeland of the Quebec nation, it must have the resources to control its own development. To that end, the Bloc Québécois plans to work to resolve a number of priority issues, including the fiscal imbalance, because that has still not been resolved. Because the Government of Quebec is our national government, it must resolve this problem. As long as it persists, Quebec does not have the resources to implement the choices of Quebeckers, and what Quebec does depends on the goodwill of Canada.

Culture and communications are two other priority issues for the Bloc Québécois. Because Quebeckers form a nation, telecommunications and broadcasting must be under Quebec’s jurisdiction. As well, because the Quebec nation exists, Ottawa must recognize Quebec’s culture and identity in its cultural policies and legislation.

Quebec's standing on the international scene is a third priority issue for the Bloc Québécois. Because Quebeckers form a nation, they must be able to express themselves on the international scene in their jurisdictions. Quebec is fully sovereign in the jurisdictions the Constitution gives it. It must be able to fully exercise its powers in those jurisdictions, including in international relations.

What is a nation? The word “nation” can refer to two different things. When applied to a state or territory, the word “nation” can mean “country”. That is the meaning of the word in United Nations, an organization of which Quebec cannot unfortunately be a member yet because it is not sovereign. So, if the motion said “Quebec is a nation”, some people could say that that means that Quebec is a country. But that is not what the motion says. It asks the House to recognize that “the Québécois form a nation within a united Canada.”

When the word “nation” is applied to people, it does not mean “country”. According to the Larousse dictionary, it designates a “large human community which, most of the time, lives on a common territory and has historic, linguistic and cultural unity and the desire to live together”. That is the meaning of today's motion.

In Quebec, there is a long-time consensus that Quebeckers form a nation. On October 30, 2003, the Quebec National Assembly unanimously adopted the following motion: “That the National Assembly reaffirm that the people of Quebec form a nation”. The motion does not say that Quebeckers form a nation if Canada remains what it is or if Quebec opts for sovereignty. It simply says that the people of Quebec form a nation. There was a reason why the National Assembly chose to reaffirm the existence of a Quebec nation.

This resolution repeated what all the Quebec governments have been saying for decades. I will quote a few, including Maurice Duplessis, the leader of the Union Nationale party, who said “The Canadian confederation is a treaty of union between two nations”. He said that in April 1946, not yesterday.

Jean Lesage, a Liberal, said:

Quebec did not defend provincial autonomy simply for the principle of it, but because, for Quebec, autonomy was the specific condition not for its survival, which is assured, but for its affirmation as a people and a nation.

Jean Lesage, a good Liberal and former premier of Quebec, said that in November 1963.

Daniel Johnson Sr., another unionist, said:

The Constitution should not have as its sole purpose to federate territories, but also to associate in equality two linguistic and cultural communities, two founding peoples, two societies, two nations.

I could also quote René Lévesque:

Canada is composed of two equal nations; Quebec is the home and the heart of one of those nations and, as it possesses all the attributes of a distinct national community, it has an inalienable right to self-determination...This right to control its own national destiny is the most fundamental right that Quebec society has.

That was in June 1980.

Jacques Parizeau, a good PQ premier, said:

To date, Canada's basic law has failed to recognize Quebeckers as a nation, a people or even a distinct society. That is a sad commentary.

Lucien Bouchard was once a Conservative, but he finally opened his eyes and realized that the Quebec nation deserved better than the Conservative Party. In October 1999, he said:

Quebec is the only majority francophone society on the North American continent with a well-defined land base and political institutions which it controls. The Quebec people have all the classic attributes of a nation... The Quebec people adhere to the democratic concept of a nation characterized by its language, French, and a diverse culture, and which is broadly open to international immigration.

The Bloc Québécois' Bill C-482 is extremely important. We know that it was introduced in this House by the hon. member for Drummond. The bill calls on the federal government—because it was obvious that the federal government did not have the will to do so—to recognize the Charter of the French Language within Quebec and extend its application to businesses under federal jurisdiction and—as we will see later—more specifically under the Canada Labour Code.

To avoid any ambiguity, it is essential to state specifically in the Official Languages Act that French is Quebec's official language. It must be done because this Conservative government is promoting bilingualism in Quebec. And Quebec being totally surrounded by a sea of anglophones and being constantly bombarded by the anglophone culture through television, radio and the Internet, when bilingualism is being promoted in a nation like Quebec and in a city like Montreal, the French language loses ground, particularly in Montreal. The situation is probably not as critical in Lévis—Bellechasse, but in Montreal the French language is certainly losing ground: 25% of Montrealers work in English.

This amendment is not purely symbolic. It states, to a certain extent, the intent of the legislator. In this regard, the Barreau du Québec said this:

Jurisprudence, also, seems to consistently demonstrate that the preamble is always important, though the circumstances in a matter, such as the clarity of the provision, justifies setting aside any indications of intent that may be found in the preamble.

It then becomes an insurance policy provided that the body of the act is also amended. The Official Languages Act essentially applies to the Government of Canada and its institutions, and as mentioned earlier, under section 16 of the Canadian Charter of Rights and Freedoms, it is impossible to amend any provisions dealing with institutionalized bilingualism within the federal government without amending the Constitution.

However, two parts of the act can be amended, namely part VII, which deals with the advancement of English and French in Canadian society, and part X, which deals in part with the mandate of the Commissioner of Official Languages.

The amendments proposed by the Bloc Québécois will require a commitment by the federal government not to interfere with the objectives of the Charter of the French Language. It is important to remind members that the recognition of the Charter of the French Language does not in any way diminish the rights and privileges of the anglophone minority in Quebec under the Canadian Charter of Rights and Freedoms. These amendments are strictly limited to the power of the federal government to interfere with language policy in Quebec.

The specific mention of a provincial legislation in a federal statute is allowed, and it is even common. This is called a statutory reference. It means that the government recognizes the provisions made by another Canadian legislature. For example, the Canada Labour Code includes a statutory reference about minimum wage that says the provinces are to set the hourly minimum wage. This is section 178 of the Canada Labour Code. The bill contains an amendment dealing with that.

Almost 10% of the labour force in Quebec is under the Canada Labour Code. These workers are under federal jurisdiction and are employed by companies that do not comply with Bill 101. A federal piece of legislation is needed in order to have them comply. In this regard, two or three industries are usually mentioned, but I will give a more extensive listing.

The Canada Labour Code applies to: works or undertakings connecting a province with another province or country, such as railways, bus operations, trucking, pipelines, ferries, tunnels, bridges, canals, telephone and cable systems; all extra-provincial shipping and services connected with such shipping, such as longshoring; air transport, aircraft and airports; radio and television broadcasting—all our radio and television stations in Quebec; banks; defined operations of specific works that have been declared by Parliament to be for the general advantage of Canada or of two or more provinces, such as flour, feed and seed cleaning mills, feed warehouses, grain elevators and uranium mining and processing; and Federal Crown corporations where they are engaged in works or undertakings that fall within section 91 of the Constitution Act, 1867, or where they are an agency of the Crown, for example the Canadian Broadcasting Corporation and the St. Lawrence Seaway Authority.

Here are examples of the number of employees in some of the enterprises coming under the Canada Labour Code. Bell Canada, which is under federal jurisdiction, had 17,241 employees in 2006. In the financial sector, the Royal Bank has 7,600 and the National Bank of Canada has 10,299. In the interprovincial transportation sector, Air Canada has 7,657.

It is estimated that there are approximately 200,000 Quebeckers working in an environment that does not comply with Bill 101 in Quebec, that is a little less than 10% of Quebec workers. The amendment proposed by the Bloc Québécois adds to Part 1 of the Canada Labour Code a provision that stipulates that “any federal work, undertaking or business carrying on activities in Quebec is subject to the requirements of the Charter of the French Language”. That provision responds to the demand made in the Larose report of 2001. I refer to Gérald Larose, then and still president of the Conseil de la souveraineté.

I can give a very good example of this Conservative government's lack of respect for the Quebec nation. It occurred last year right after the recognition of the Quebec nation. That motion was, I repeat, adopted in this House in November 2006. Within a week or two of that date, the Minister of Labour tabled Bill C-55 in this House.

This bill, which was a reworking of the bankruptcy legislation, contained a clause that ran counter to the Quebec Civil Code and made certain RRSPs seizable. What this Conservative government wanted was to see bankrupt small investors lose the money they had put aside over the years to certain major finance companies I shall not name here. Major credit card companies. That is what this government wanted to do, which runs counter to one of the things that differentiates the Quebec nation, its civil code. This runs counter to the values of the Quebec nation. This is not the approach we take to working people. We respect what they have put aside over the years.

Finally, after six months, the Bloc Québécois managed to get that legislation amended. Not a single Conservative member of this House spoke up for the investors of Quebec.

Bill C-12

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, thanks to the Bloc Québécois, Bill C-12 was amended to protect one of the fundamental differences that sets the Quebec nation apart: its civil code. As a result, the bill protects Quebeckers' RRSPs from seizure.

The Conservative government's Bill C-12, previously known as Bill C-55, would have undermined Quebec legislation in defiance of a motion passed unanimously by Quebec's National Assembly.

The Bloc Québécois can say “mission accomplished” because Bill C-12, as amended by the Bloc Québécois, received royal assent on December 14. The act also covers the wage earner protection program, which the Conservative government must immediately implement so that workers whose employers declare bankruptcy can recover lost wages.

Given the current economic climate, the government has been inexplicably slow to implement the wage earner protection program. The Bloc Québécois will put pressure on the Conservative government until it implements this program, which should be as soon as possible.

Extension of Sitting Hours

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I was happy to allow the House leader for the Bloc to go ahead of me in the usual order.

I will be sharing my time with the member for Windsor—Tecumseh.

I want to spend a few minutes laying out what is going on here.

First, we are all aware, as members of the House, that we receive a calendar every year. The calendar is very clear in that the House is intended to sit until June 22. We all agreed to this, all parties, through the whips. It is something with which we are all familiar.

We also are aware that on this day the government can, as it has done, move a motion for the extension of hours. We are debating a motion now as to whether the hours should be extended from June 13 to June 21 to 10 p.m. every night. The question that is really before us is this. Is this a warranted measure? After hearing the government House leader, this is a crisis that the government has manufactured.

Let us be very clear about what has taken place. This is happening because of the incompetence of the government in the management of its legislative agenda, its lack of consultation with opposition parties and its lack of calling its own bills. For example, we heard the government House leader talk about the budget bill, Bill C-52. He has said that he wants to get it through. There were 11 days when the Conservatives could have called the bill for second reading and they failed to do so. Instead they brought in all kinds of other bills that were quite inconsequential. If the budget were so important, they had ample opportunity to bring the bill forward for second reading.

I point out on the record that once it went through second reading, when the Conservatives finally brought it forward into the House and it went to the finance committee, the finance committee met for four sessions only to hear witnesses. It in effect fast-tracked that bill. It heard witnesses very quickly on a budget bill, which is core to our whole reason for being here. Then it was brought back to the House. We had one day of debate on the report stage. Now we are now debating third reading.

When we look at what has happened, it is clearly a manipulation by the government itself on its own agenda. I think what is happening is the Conservatives have brought forward this motion today for extension, even though they are saying the extended hours would go to June 21, so they can cut a deal to get out of here early. If we get out of here early and they get their budget bill, which we know they want, there will be no committees, no question period and no debate on other bills. That clearly needs to be put on the record.

In terms of management of other business, we have heard the government House leader say today that all these justice bills have to come forward. If we look at the agenda of the justice committee, the government made it a priority to deal with private members' business. It has taken up the valuable time of the committee to deal with private members' bills. Now we are being told it has all these other bills that it wants to get through. It really does not cut it. It does not make sense.

I really appreciate the position you took on Friday, Mr. Speaker. At the very last moment on Friday, the government tried to bring in a very rare Standing Order, used for emergency debates, to deal with Bill C-52 and extend the hours to rush the bill through. To your credit, you listened to what members in the House had to say and you made the correct decision in the end. I want to thank you for that. These things are really important. We have to play in a way that is open and transparent, and I do not believe the government is doing that at this point. Therefore, we are very suspicious and skeptical about the agenda.

Again, another irony is the Conservatives are saying that they want to extend the hours of debate. Yet we have never seen the light of day for Bill C-30, the clean air and climate change bill that came out of committee. The bill was amended by the opposition. It is a bill that would work, and it has the support of the majority of members in the House. However, the government itself is refusing to call it forward. We will stay here for as long as it takes to debate that bill. We consider it is an urgent matter that Canadians want us to address.

We will stay here for as long as it takes to debate that bill. We consider it is an urgent matter, which Canadians want us to address. It is a priority that goes beyond all partisanship, but I did not hear the government House leader mention that bill.

The Conservatives would rather get out of here, not having to bear the public scrutiny in question period and committees and not debate all the other bills. They just want to get the budget through. I fear they have made a deal with the official opposition. I do not know that, but I can almost guarantee, even though these extended hours will be approved, in a couple of days, maybe Wednesday, they will find a way to adjourn the House. That is really their agenda.

As the Bloc House leader has mentioned, one bill that we believe must be brought forward is the ways and means motion. It used to be called Bill C-55, which was the wage earner protection bill protecting workers from bankruptcy. This has been an outstanding matter.

The government, again, has not engaged in adequate consultation with the opposition parties, which want to get this bill through. It was passed in a previous Parliament, but was never given royal assent. It is an absolute injustice that today workers still do not have protection from bankruptcy. Millions of dollars have been lost, legitimately earned and deserved wages of workers because they have not had the protection of that bill.

I want to put on the record today that this attempt by the government to bring in extended hours is really about adjourning the House. It wants to get a very bad budget bill through. It looks like the official opposition is now complicit in getting through a budget bill, which, as we have seen, is a disaster in Atlantic Canada in that it has broken the accord. It is a disaster in terms of so many other areas, whether it is housing and homelessness, student summer programs or the environment.

We know the government wants to get the budget passed and that is all it cares about. I am very concerned we are facilitating its agenda under the guise of extending hours when really what it will do is rush to adjourn the House. We know it does not want to be accountable or go through question period.

Let us not forget that the Conservatives were filibustering in the committees. The Conservative members were making the committees dysfunctional. Why? Because they did not want business to go ahead in committees.

We found out about their 200 page playbook, a handbook for all the tactics that its members and chairs could use in the committees. This is further evidence that the Conservatives real game plan is not to deal with all the legislation about which the government House leader spoke. They want to rush through a bad budget bill that has barely been debated.

Nobody is holding up the budget bill, by the way. There are no tactics being employed by the opposition to hold it up. We want to have an adequate debate. We want to ensure that people can say, on the record, what they think about the budget because we have a lot of criticisms about it.

Let us be very clear. The motion today is under the guise that government members are ready to work and extend the hours of the House until 10 p.m. every night. Really it is about getting out of here, for the Conservatives to get beyond public scrutiny, to shut down the House, committees and question period once the budget bill is passed. That is what we will see happen.

Budget Implementation Act, 2007

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I will be very brief because I am so surprised that I am actually in agreement with something that one of the government cabinet ministers would say that I really do not quite know what to do. I am in agreement that the Liberal record is not actually anything to crow about.

In particular, I want to take the member back to Bill C-55. I have spoken in the House about how the manufacturing sector in my community is being decimated and I will talk about that again later when I get my own turn to speak. Members will recall that we hoped that at a minimum the Liberal government would address wage and pension protections in cases where companies went bankrupt.

The member will want to speak about the Liberal government's record some more, but the Liberals introduced Bill C-55. The bill did not do enough on pensions but at least the Liberals started to move forward on wage protection. That bill passed through the House. It passed through the Senate. It received royal assent, but when push came to shove, that bill was never proclaimed. Once again the Liberal government let down workers right across the country.

Wage Earner Protection Program Act

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Speaker, 16 long months have gone by since all parties in this House unanimously passed Bill C-55, which received royal assent during the previous Parliament. Wage earner protection provisions will ensure that workers get paid if their employer goes bankrupt.

Can the Minister of Labour explain what has changed since all of the parties agreed to fast-track this bill and why hard-working Canadians and Quebeckers still do not have this important protection?

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, I am deeply concerned and alarmed by the inaction on Bill C-55, the wage earner protection program. The bill, which was adopted in the 38th Parliament, has yet to be proclaimed by the government.

The bill is so crucial to so many who have lost their jobs. Bill C-55, or what should be known as chapter 47 on the status of Canada, puts the needs of individual workers ahead of corporations and creditors.

The essence of Bill C-55 is that working people deserve respect and justice. When a company is bankrupt, under the current system, the company and the trustees are under no obligation to ensure that salaries and pensions for their workers are the primary priority for payment. Bill C-55 would remedy this, ensuring that workers would not be left out in the cold.

Due to the inaction of the Conservative government, Canadian manufacturing jobs are being lost at an ever increasing rate. The Conservative government refuses to take any action to protect these jobs in the textile, automotive, forestry, fisheries and other sectors. The least it can do is to ensure that when these companies declare bankruptcy, their workers are protected.

The government has a duty to act. For all the noise the Conservative Party likes to make about leadership, it does not seem to understand that leaders lead through action. The Conservatives claim to support the bill, but if they do, why will they not do the right thing, move the appropriate motions and make the bill law?

Its actions lead me to the sad realization that rather than leading our country, the Conservative Party is simply unwilling to do what is needed to benefit Canadian people. It has made it abundantly clear that if it does not produce headlines, it is not a priority for the Conservatives.

Anyone can climb on a soapbox and proclaim to care about Canadians, but a real leader takes action. A real leader looks at ways to make Parliament work, not to obstruct it and its committees. Real leadership inspires the country, it does not produce inaccurate and unfounded attack ads that mislead and misrepresent. Real leadership is about standing up for what is right and just for all Canadians, not just for the wealthy few.

Real leaders roll up their sleeves and work on the real details on issues like Bill C-55. This is because they make such a difference in the lives of people and Canadians.

Canadians do not need million dollar campaign ads that speak of leadership, but deliver nothing of substance from those who paid for them. If the Conservatives want to show Canadians any leadership, then they are going to have to actually get up and lead. Bill C-55 is an excellent and long overdue opportunity to do just that.

When will the government show the slightest glimmer of leadership and follow the Liberal example on Bill C-55? Let us make this bill law now. It is the right thing to do.

[Daniel Petit, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, in 2005, Bill C-55 was unanimously passed by the House. On December 8, 2006 the Minister of Labour tabled a notice of motion in order to finally table the bill. This bill is now being delayed by the Bloc Québécois, which, as usual, would rather see legislation that would help Canadian and Quebec workers fail.

Can the Minister of Labour tell us when the wage earner protection bill will be tabled?

Canada Elections Act

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, this is another opportunity for me to rise on a bill that is far from revolutionary. I have said so several times, and I believe that the same sentiment has been expressed many times in this House in the past few months. It is hard to be opposed to this bill. But at the same time, it does not attack the root of the problem of voter turnout, which is not dropping dramatically, but declining from year to year, particularly at the federal level.

This bill is intended to increase voter turnout. It proposes to add two advance polling days on the two Sundays prior to polling day. All the polling stations that will be open on the day of the general election would be open on the Sunday before that day, maximizing—according to the bill's sponsors—voting opportunities until polls close on the Monday after the second Sunday. On the other advance polling days, a limited number of polling stations would be open, as is the case now.

It seems to me to be a bit simplistic to expect that adding advance polling days will reverse the strong downward trend in voter turnout. However, we cannot oppose a relatively minor measure that would create a real opportunity for some people to vote on the added Sundays. We will therefore not vote against this bill. However, in our opinion, this is a minor measure that will not correct the strong downward trend in voter turnout. The government needs to attack the real causes of this decrease, which are diverse.

I want to give the figures for some past elections, which show that voter turnout at advance polls does not have a substantial or significant impact on general voter turnout on polling day.

For example, here are the results from Quebec for the 1997 federal election. Approximately 704,000 people voted at advance polls, some 3.6% of everyone who voted in the 1997 election. Again, I am referring to the federal election, but these figures pertain only to voters in Quebec. The overall voter turnout was 67%.

In 2006, during the last federal election, 1.5 million voters voted at advance polls in Quebec, or 6.8%. Thus, 6.8% voted in advance. One might have expected this to translate into much higher voter turnout, since the number of people who voted at advance polls nearly doubled. Yet, when we look at the overall voter turnout in the 2006 election, for Quebec, it was only 64.7%. We can therefore see that increasing the number of days of advance polling does not necessarily lead to higher voter turnout overall.

In that regard, we must ask ourselves whether the money it would cost to open polling stations the Sunday before an election—since, as we heard, all polling stations would be open that day—could not be used much more productively towards increasing overall voter turnout.

For instance, the total number of polling stations in each riding could have been increased, to make them more accessible. Also, particularly for our seniors, we could have tried to find ways to ensure they do not have to travel. I think there is a long list of possible solutions that would have been much more effective in increasing voter turnout, which, as we know, is decreasing every year.

Once again, I believe that the crux of the problem is not a function of the mechanics but of the general context and our citizens' views of politics. This holds true for Canada, and to a certain extent for Quebec, which nevertheless has a higher voter turnout. We have noticed it also in the United States and in France, although this last presidential election was quite exceptional with voter turnout of 85%. It may be an exception, but that is all for the best. Perhaps there is a change in the trend.

In my view, this fairly widespread tendency—particularly in industrialized countries where voter turnout is decreasing with every election—should lead us to look more closely at the general public's perception of politicians and of politics. For example, almost every government that has taken power, here in Ottawa and in many western countries, has told us—and the Minister of Industry is one of the best examples that I know of—that nothing can be done about the effects of globalization and market forces, and that the strongest must be able to crush the weakest as it is the law of nature manifesting itself in society.

That is wrong. A good part of the population, a good number of voters, have been led to believe that voting for representatives when electing a government is pointless because they are unable to solve their problems. What can the federal government do to help a worker from Saint-Michel-des-Saints who is losing his job because a Louisiana-Pacific sawmill and waferboard plant are shutting down?

The Minister of Industry is constantly telling us that nothing can be done, that these are the results of market forces and that no manner of industrial policy will prevent it. It could not have been prevented. But I say that it could have been prevented.

I would like to remind the House that, since 2003, the Bloc Québécois has been promoting a plan to help the forestry industry get through the current crisis. However, the previous Liberal government and the current Conservative government have always hidden behind market forces and the unrelenting effects of globalization. We know very well that when the citizens' democratic will is expressed through its democratic institutions, we are capable of putting a stop to things, of changing the course of events in economic, social or environmental matters.

For example, some countries, such as France, have said they did not want to be part of the multilateral agreement on investment and the Organisation for Economic Co-operation and Development, because they were negotiating privately. This would diminish the role of the state and its ability to exercise its sovereignty. France was able to stop this agreement, and this decision was made in the general interest.

At that time, the French president did not say that he could do nothing about it because of market forces and that this was the natural tendency. On the contrary, he said that this was not the direction in which he wanted to see French society and all other societies in the world go.

Currently, there is a disillusionment with respect to politics that is the fault of politicians. Obviously I am not talking about all politicians, but about those who, like the Minister of Industry, say that democratic institutions and political power no longer have any influence over economic, environmental and social matters. Not only are they responsible for this disillusionment, but they have also created in the population—this is true in Canada, Quebec, Europe, Latin America and the United States—a protectionist sentiment against opening up markets and borders. For three or four years, the Doha round has been blocked by the inability of governments to turn the people of the countries involved in favour of opening up the markets with rules, of course. Politicians could have made rules, but they did not want to. Because politicians did not want to make rules, the process collapsed.

It primarily collapsed because of the demonstrations in Seattle. But the developing countries said that in the last round, the developed countries had advantages, but had not done what was necessary to open their markets. So the developing countries decided to put a stop to it.

This happened because of the approach adopted by the Minister of Industry and the Conservative government. Not only did this approach lead to the current standstill in WTO and Free Trade Area of the Americas negotiations, but it also led to political disenchantment. This way of thinking is false because if we want to, we can use politics to influence economic, cultural, social and environmental issues. This way of thinking has led to disillusionment among many people who believe that voting is pointless because even citizens' representatives are powerless to help them get through difficult situations.

Unfortunately, politicians like our Minister of Industry and our Prime Minister have caused problems in other areas as well. This is also about transparency. We must not fool ourselves: the sponsorship scandal really hurt the Liberal Party of Canada, especially in Quebec, and that is a good thing. However, unfortunately, it also hurt politicians as a whole.

Our governments have demonstrated their ineptitude. I am referring to the Liberal government, but I have a feeling that the Conservative government is heading in the same direction by trying to fiddle with things. In so doing, they have discredited their own political activities as well as all politicians, and that is a real shame. They got caught red-handed, which is exactly what they deserved.

We are currently facing another situation. With respect to Option Canada, the Prime Minister can launch an independent public inquiry to uncover everything that happened during the 1995 referendum. Let us not forget that the government invested $11 million—no small sum—through Option Canada and the Canadian Unity Council. I would also like to mention that each camp—the yes camp and the no camp—was entitled to $5 million. Option Canada spent as much as both camps combined. In all, the federal government invested over twice as much as the yes camp.

The Prime Minister's refusal to launch an investigation to get to the bottom of this is, understandably, creating doubt among Canadians It suggests that the first thing a government would try to do is hide as much as possible from the public, by creating organizations such as Option Canada, which break the law. This time, it was Quebec's Referendum Act. Theoretically, politicians should be the ones to ensure respect for the law, since parliamentarians are the ones who make the law.

This creates rather serious uneasiness. We saw this uneasiness during the sponsorship scandal. We are seeing it again now, because of the Prime Minister's refusal to create a commission of inquiry to get to the bottom of the Option Canada scandal. This is a second factor in our problem with voter turnout. Unfortunately, more and more people are losing faith in the role of MPs and therefore choose not to vote.

In his response, the minister responsible for economic development said so many things that are out of touch with reality and the facts that, if I were a regular citizen, I would not vote for the Conservatives—I can assure this House that that will never happen, nor have I ever even considered it, in all my years of voting. This creates a degree of cynicism. I will give some examples.

Question period took place barely a few hours ago. I will give the example of one of this government's ministers. Earlier today, the Minister of Industry was in my line of fire, now, it is the Minister of Labour. What did that minister say in response to a question from a Liberal member, who asked him what was happening with the bill on bankruptcy, once known as Bill C-55?

The Minister of Labour stood up and said that everyone agrees, but the Bloc Québécois is blocking the bill. That is absolutely false. The Bloc Québécois is not blocking the bill. The minister is blocking it by digging in his heels on an amendment that the governments of Quebec and the other provinces want in order to ensure that the federal legislation will be consistent with provincial legislation. I have here the proposed amendment on which we worked together with the Government of Quebec. The minister has been aware of this for several weeks now. However, he is misrepresenting reality by saying that the Bloc is preventing the passage of this bill. We are in favour of the bill, but we are also in favour of respecting Quebec's jurisdictions. In his response, the minister completely misrepresented reality. What we are trying to do with this amendment is protect Quebec's power to exclude certain heritage property in bankruptcy situations, to keep RRSPs and RRSFs in comprehensive plans and to respond in a simple and effective manner to the concerns raised by Quebec's finance minister, a Liberal and a federalist. I am talking about Mr. Audet.

Once again, words were taken out of context and reality was misrepresented. Everyone is well aware that the Minister of Labour was not describing reality. Again, they are discrediting the ability of politicians, hon. members, ministers and members of this government in particular, to respond to questions accurately and truthfully.

On other occasions the debate is completely diverted. I am thinking of the Minister of Labour in his role as Minister of the Economic Development Agency of Canada.

The Minister of Canadian Heritage and Status of Women was asked about the $60 million over two years for festivals. Some festivals are starting to have serious problems. Mr. Bachand, Quebec's tourism minister, warned Conservative ministers when they come to Quebec not to make too many appearances at festivals because he was not sure they would be welcome. Again, Mr. Bachand is a Liberal and a federalist.

For several days now, we have been trying to ask the Minister of Canadian Heritage and Status of Women why she has been unable to establish criteria to distribute the $30 million allocated to festivals this year. This is true for Quebec, and it is also true for the rest of Canada. Her answers do not really make sense.

My colleague from Gaspésie—Îles-de-la-Madeleine brought the issue up again by sharing the example of a festival in the Magdalen Islands that lost its permit in a competition because it did not have the necessary funds. Then the Minister of Labour and Minister of the Economic Development Agency of Canada for the Regions of Quebec—the same minister I was talking about earlier—rose to say that last year, the government invested a certain amount of money to promote the event, but that this year, since the event has already been promoted, it invested a little less. He did not answer the question. The question was for the Minister of Canadian Heritage concerning a new program to replace the old program that the Liberals messed up with the sponsorship scandal. Festivals, exhibitions and cultural events need the government's support. They did not answer the question; they are avoiding the issue.

This sort of conduct has increased in recent years, especially here in Ottawa, and has discouraged many people from voting. It is very clear that by adding two days of advance polling, Bill C-55 will not solve this fundamental problem.

All parliamentarians need to do some serious soul-searching about their ability not only to see the truth for what it is and give honest answers to the questions they are asked, but also to shoulder their responsibilities instead of hiding behind so-called market forces and the inevitable effects of globalization. They are creating a sort of skepticism and defeatism among members of the public. Once again, even though we are seeing this more here in Ottawa than in Quebec City, it will still have an impact if nothing is done to correct things.

I will close by saying that the Prime Minister was asked to apologize for the federal government's actions during the referendum campaign, when the government violated the Referendum Act. He refused to do so. I am happy, though, that this afternoon, the Premier of Quebec, Jean Charest, condemned the violations of the Referendum Act, even though he had initially had the same reaction as the Prime Minister. I believe that his response may signal that politics will be cleaned up. It is to be hoped that a new generation of politicians—and I am not referring to age—will change these practices and promote greater voter participation in our electoral process.

Statutes Repeal Act

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, this morning I am honoured to address Bill S-202, the statutes repeal act.

Let me begin by congratulating the member for Joliette on his appointment as House leader for the Bloc Québécois. I know that he will bring his not only his experience but his commitment to this place to that job. I also want to thank the member for Roberval—Lac-Saint-Jean for his work in that position up to this point. They are different MPs, I know, and they bring different perspectives to that important task in this place.

I also want to thank the member for Mississauga South for presenting this Senate bill, the statutes repeal act, here in the House for our consideration. I know that it comes out of his commitment to the functioning of this place. He takes a great interest in how the chamber works and I appreciate his initiative around this important legislation.

As we have heard, this legislation seeks to address the fact that a number of pieces of legislation have never come into effect. They have never been enacted even though they have passed through the legislative process here in the House and also in the other place. For some reason, the government has chosen not to enact them.

That came as somewhat of a surprise to me even though I have worked in this place for many years. The fact that the government could choose not to implement legislation that had been passed by the House of Commons and the Senate, that it had that prerogative, is something that I still find passing strange. I find it strange that governments would sponsor legislation, take it through the process in both chambers, with members giving it their due and careful consideration, and see it go through all the stages of the various readings in the House and Senate and ultimately be passed, yet for some reason choose not to implement that legislation, and it would also not seek to repeal that legislation. It would just let it sit there on the books without effect for many years.

Indeed, I understand how that is a problem and I understand the need for some kind of housekeeping measures, both to bring accountability for the legislative process and to ensure that governments are doing their duty and following the will of the legislative branch of our government. I think this bill is a very important piece of legislation. It is important to consider what we do with legislation that has been on the books for many years and has not been enacted.

Generally there are several ways in which this is dealt with in legislation. All legislation has a coming into effect clause, which is usually the last clause of the legislation and which talks about when the legislation will come into effect. In some legislation that is very clearly stated: that it comes into effect at the point of royal assent or sometimes on a specific timetable with specific dates. In those cases, there is not a problem in terms of that legislation not becoming effective, not being enacted and not actually being carried out.

The problem is in the situation where the coming into effect legislation talks about the date to be determined by the governor in council, when the government is given the opportunity to determine the timeline for the coming into effect of legislation. Often there is a good reason for that. It may be that there are further negotiations with other levels of government that have to happen. It may be that regulations have to be developed to allow for the implementation of that legislation.

However, it is in those situations that the prerogative begins for the government to delay or even not implement legislation. That is where I think we need to be more diligent, perhaps, as members of Parliament. I certainly will be careful to look at that clause in any legislation that I am directly involved with in this place in the future, because I think that is where we as legislators can exercise our abilities to ensure that the legislation we work on and support comes into effect in a reasonable length of time and actually does happen. I think that is a place where we need to be more careful.

I would also hope that governments might take more direct responsibility in a situation where problems do crop up with legislation that has been passed but which governments feel they cannot go forward with. They should take responsibility to bring back legislation to repeal something that has already been passed, to convince the people in this place, who have responsibility for the people of Canada to work on that legislation and to make judgments about that legislation. A government must give representatives the opportunity to understand the problems with the legislation as the government sees it and to make a decision about whether it should go forward or not.

We have heard that there are two complete bills, the Motor Vehicle Fuel Consumption Standards Act from the early 1980s and the Canadian Heritage Languages Institute Act from the early 1990s that have not been implemented. I do not know what was in those pieces of legislation that caused them to not be implemented by the government. When I see the title of the first one, the Motor Vehicle Fuel Consumption Standards Act, I wonder if it had come into effect we might have solved some of the problems that we are facing today since it seemed to be an early attempt to deal with that important issue back in the 1980s.

I also understand that there are 57 other pieces of legislation that would be affected by this bill and it seems reasonable that there should be a review of that legislation. However, I want to make sure that we do not lose the opportunity to hold governments accountable for important legislation that was passed, and that we do indulge and we are careful about the politics between the legislative branch and the executive branch of government. We sometimes have to as legislators push the governor in council, the government, to act on legislation and for very good reasons.

I will use as an example my experience since I arrived in this place with a piece of the Immigration and Refugee Protection Act which was passed in 2001 dealing with the refugee appeal division. I know this is not exactly applicable to the Statutes Repeal Act, but it gives an example of the kind of situation we are talking about.

The Immigration and Refugee Protection Act, IRPA, was passed in 2001 and one feature of that act was the establishment of the refugee appeal division which was a paper screening process that gave refugee claimants an appeal of a decision made by the Immigration and Refugee Board. That refugee appeal division was established in law as a compromise in the debate on the immigration and refugee appeal division.

The government of the day wanted to reduce the panels which heard refugee claims from two members to one member, but concerns of other members of Parliament were that a two member panel gave an opportunity for corrections of errors that might be made in the process, whereas a one member panel did not afford that opportunity for fairness and justice, hence the RAD was introduced as a compromise to ensure fairness in the system.

Since then, the governments of the day have refused to implement the refugee appeal division, and every refugee and immigrant serving organization in the country and many internationally have called on the government to implement that. The previous Liberal government and the current Conservative government have faced those strong calls from NGOs which work with refugees to implement that division to bring a modicum of fairness to the process.

The governments of the day have refused to do that. It is part of the law. It was passed as part of the law, but the fact that the law also gave the governor in council the ability to determine the timetable for the implementation of that law, these particular sections have never been implemented.

This brings us to the strange situation where the member for Laval, with the support of her colleague, the member for Vaudreuil-Soulanges, have drafted a private member's bill, Bill C-280, An Act to Amend the Immigration and Refugee Protection Act (coming into force of sections 110, 111 and 171). However, this is a private member's bill to implement legislation that has already been passed by Parliament. It seems a strange step to have to take, but many members of Parliament in all parties have called for the government to take this action.

That is one example of the kind of situation we get into, where this chamber made a decision and the Senate also made a decision on this legislation. The legislation was passed. An important piece was added as part of the debate on that and yet the government has chosen never to implement it. Many of us feel that it is a very serious problem with our immigration law.

There are other examples. There is the wage earners protection bill, Bill C-55 which dealt with corporate bankruptcies and putting workers first in the lineup to receive compensation. Parts of that have not been acted on even though it was passed in this place. There are sections of the Labour Code which face the same situation. We do need an effective mechanism to review those pieces of legislation and I am glad that Bill S-202 gives us that opportunity.

Wage Earner Protection Program Act

[Jean-Pierre Blackburn, Conservative, Minister of Labour and Minister of the Economic Development Agency of Canada for the Regions of Quebec]

Mr. Speaker, I would like to remind the hon. member once again that Bill C-55, which really would protect employees’ wages in case of bankruptcy, still exists. We still intend to bring it before the House. If the opposition members can arrive at a consensus on this bill that reflects the unanimous will of the House during the previous Parliament, we will introduce it this very day.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, frankly, the minister did not answer the question. What he said is not accurate. When Bill C-55 was passed last November, the Conservatives supported it. This bill ensured that employees would be compensated for wages not paid in the six months prior to the bankruptcy of their employer. It provided that employees who found themselves in this situation would receive up to $3,000.

Why has the government turned its back on this bill and, at the same time, on working people?

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, over 15 months ago, Bill C-55 was passed by Parliament. The bill was supported by all parties, including the Conservatives. It would compensate employees in cases where employers went bankrupt.

The government has had over a year to make a small technical amendment and proclaim the bill into law, but all we get from the government is silence.

Why is the government stalling wage protection for hard-working families in Canada?

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Mr. Speaker, as has already been said in this House, the government wants to have the necessary technical amendments to Bill C-55 adopted, to be able to implement the wage earner protection program.

Considering the government's heavy legislative agenda, the Minister of Labour hopes to count on the unanimous support of this House in order to expedite the adoption of the necessary technical amendments, thus ensuring the effectiveness of the program.

I am just as eager as my colleague to pass this act and implement the program.

[Jacques Gourde, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, I am pleased to rise today to answer the question asked by the hon. member for Saint-Bruno—Saint-Hubert.

As the member knows, the Wage Earner Protection Program Act was part of Bill C-55, which proposed a comprehensive reform of Canadian bankruptcy legislation, the purpose of which was to adapt that scheme to better reflect the needs of businesses, investors and employees.

In the last Parliament, Bill C-55 passed very quickly, thanks to the unanimous support of members of all parties.

When Bill C-55 was passed in 2005, it was understood that the legislation would be examined in greater depth by the Senate committee responsible for the matter later, with the aim of resolving certain technical problems before it came into force.

In fact, the members of the Senate committee asked that implementation of the legislation be postponed until after June 30, 2006, so that they could study it further.

That is the background against which the Minister of Labour and Minister of Industry worked together to draft a bill to amend that legislation.

I would like to discuss the main technical amendments that we would like to introduce so that we can be sure that the wage earner protection program operates as was originally intended by Parliament.

One of those amendments is to authorize the wage earner protection program to pay bankruptcy trustees for work done in connection with administering the program in certain circumstances, to facilitate equitable access to the program by employees who have not been paid.

Another amendment is to change the eligibility requirements to make them fairer, while reducing the risk of abuse.

On December 8, the Minister of Labour tabled a notice of ways and means motion so that the bill to make these technical amendments could be introduced. He urged the opposition to support the motion and the bill, so that this important legislation could be implemented as soon as possible.

Given the government's full legislative agenda, the Minister of Labour hopes to be able to count on the unanimous support of all parties so that this bill can be submitted to the Senate in as short a time as possible.

My government again urges all members of the House to support this important legislation.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, thank you for the opportunity to speak today in this adjournment debate, to come back to Bill C-55, An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make consequential amendments to other Acts.

As we all know, this bill proposes the creation of a wage earner protection program for workers whose businesses have gone bankrupt.

For quite some time now, the Bloc Québécois has been working with the United Steelworkers on proposals to amend the Bankruptcy and Insolvency Act, in order to ensure that employee wages and pension funds are the first debts in line to be reimbursed when companies go bankrupt.

That is why the Bloc Québécois was eager to support Bill C-55 when it was presented in this House a year and a half ago, in spite of the bill's imperfections and our many reservations.

However, certain principles of social justice were included in Bill C-55: employees must be paid for the hours they have worked; unlike large corporations, workers have nothing but their salary as a source of income; workers' pension funds are sacred.

For the benefit of the people listening to us now so that they understand, I would just like to go back over the bill a little bit and especially the wage earner protection program.

The federal government would cover up to $3,000 of the unpaid wages due to employees when their employer goes bankrupt. The payments made under this program are taxable but take other contributions into account.

This means that regardless of the value of the employer’s property, employees will get most if not all their unpaid wages. The Department of Industry estimates that $3,000 will cover 97% of the unpaid wage claims.

In return, employees who receive a WEPP payment will have to forfeit to the federal government any right they have under the Bankruptcy and Insolvency Act to file a claim up to the amount that they have already received from WEPP. The government would therefore be responsible for recovering the amount it paid to employees under WEPP.

This was an acceptable mechanism, and although obviously unprecedented in Canada or Quebec, it was satisfactory. The advantage was that employees would be paid more quickly. There was also a little provision on the pension protection plan that was very welcome as well.

So what happened to this bill? It passed unanimously in the House in November 2005, but then the new Conservative government that arrived on January 23, 2006 put it aside.

Furthermore, every time I asked questions about it in the House, the labour minister just said that it was coming. That is the answer I got last November 22.

So now I would like to know when it is coming. Can the parliamentary secretary tell me what is happening with this bill? When does he think he will come up with some solutions? There are between 9,000 and 10,000 commercial bankruptcies a year.

Does the current budget still contain the $32 million provision needed for the wage earner protection program?

Canada Pension Plan

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I am pleased to speak to Bill C-36.

Although this has been termed a housekeeping bill, it is unfortunate that we did not take this opportunity to examine some of the other issues that are facing seniors in this country. It is unfortunate that we did not take the steps the NDP proposed in the seniors' charter to address some of the very real issues that confront seniors in our country today.

Canadians are worried about a number of different issues. Canadians are worried, for example, about the solvency of their pension plans. In the previous Parliament a substantial amount of work had been done to look at protecting those pension plans for seniors. One proposal was that if a company should be so unfortunate as to go bankrupt, the protection of workers' pensions needed to be front and centre.

The NDP had argued very strongly for much stronger measures than actually came forward in former C-55. One step which parliamentarians and I am sure all Canadians would support would be to make sure that workers' pensions are protected, and that when a company went bankrupt, the workers' pensions would be the first to be paid and would not be somewhere far down the line.

In addition, we have discovered that since the mid-1990s, seniors' incomes have reached a ceiling. The gap between seniors' revenue and that of other Canadians is increasing. We have talked about fairness and affordability. We have talked about a prosperity gap. Seniors are truly facing that prosperity gap.

According to the government's own National Advisory Council on Aging, between 1997 and 2003, the mean income of senior households increased by $4,100 while the average income of other Canadian households increased by $9,000. The situation is even worse for seniors who are living on their own. Sometimes people only pay attention to numbers. In total, over a quarter of a million seniors live under the low income cut-off, or as we also say, below the poverty line.

There are many groups of people who are adversely affected as they age. One such group of people who are adversely affected is women. There is a recent Ottawa Citizen article entitled, “Late CPP applicants lose thousands in benefits: Women hit hardest by 11-month limit on retroactive payments”. I am going to quote from that article because it is helpful when there are other words out there besides those of parliamentarians.

Opposition Motion--National Anti-poverty Strategy

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, first and foremost, I would like to congratulate the hon. member for Sault Ste. Marie and thank him for raising the debate on poverty here in the House today. It has been quite some time since we have discussed this issue as seriously as this here in the House. The premises set out by my colleague from Sault Ste. Marie are good, and he has accurately identified the causes, effects and consequences of poverty in Canada and Quebec.

I would also like to remind the House that, in 1990, a motion was unanimously adopted right here in this House, promising to eliminate child poverty within 10 years. That was in 1990 and the promise was supposed to be fulfilled by the year 2000. Yet, now, in 2007, the situation is even more appalling than it was before.

Once again, I would like to thank the hon. member for Sault Ste. Marie for raising this debate on poverty and the working conditions I mentioned. As I said, the NDP premises are good. I believe they identified the causes correctly and gave a good analysis. The member for Sault Ste. Marie gave an excellent analysis. He is right: those least well off and most vulnerable are left to fend for themselves, especially by this Conservative government, this right-wing government whose main ideology is based on every man for himself and the law of the jungle.

We saw this earlier from the hon. member for Edmonton—Mill Woods—Beaumont, whose analyses were based not on compassion or empathy, but rather on a cold, economic analysis. Furthermore, I must add, this is not just a misstep by the government. It believes in this ideology. It feels compassion for the oil companies in Alberta. Indeed, we can see and feel that.

This government says it is getting things done. Of course it is. It reduced the GST by 1%, but a person needs to have money in order to buy things. This may be true for low income workers and students who want to succeed, as the hon. member for Edmonton—Mill Woods—Beaumont was saying. It is true we have to give them a chance. Nonetheless, there are some people who did not get a chance at all and we have to help them. There are people who are unable to work—those who are disabled, those who are illiterate, seniors, young families, the homeless—who need this helping hand.

It is not good enough to tell these people that the oil companies in Alberta will get millions of dollars, but they can have the scraps. We must truly help other categories of people who are living below the poverty line. I am talking about the current Conservative government, but the Liberal government was no better. It made drastic cuts, to employment insurance in particular. It totally changed the program and turned it into a tax in disguise instead of making it a program to help the unemployed.

The Conservative government is hawkish. It is investing billions of dollars in war equipment and military expenses and cutting subsidies to the least fortunate. I will give some examples. This government bases its ideology on repressing people instead of helping them or providing funding for prevention. It is the sheriff of Nottingham instead of Robin Hood.

This government does not have the same values as Quebeckers. In Quebec we have developed a strategy to combat poverty, to provide a social safety net to help the less fortunate. We have compassion, empathy and sympathy. We understand the distress and anxiety of people living below the poverty line. We are trying to help them in every way possible to improve their situation, with a stronger economy, but we are also trying to help people who cannot make it on their own.

The Bloc staunchly defends the interests of the unemployed, older workers, women, minority groups and all Quebeckers, while the federal government, whether Liberal or Conservative, has abolished or limited the programs designed specifically for low income earners.

The Bloc Québécois acknowledges the importance of a national anti-poverty strategy. When we use the word “national”, we are referring to the nation of Quebec. Thus, we recognize the strategy of the Quebec nation. The responsibility of the federal government is to provide adequate and temporary financial support—through transfers to Quebec—for the work of the governments, the provinces and Quebec in the fight against poverty.

The Bloc Québécois feels that, far from providing support, a pan-Canadian strategy established by the federal government duplicates what is being done in Quebec and in certain provinces.

The Bloc Québécois strongly believes that the minimum wage should not be the only aspect considered. There are other avenues used by the Quebec government—$7 child care, benefits for low-income families, the lowest possible tuition fees—that are achieving real results in the fight against poverty.

As for the minimum wage, the Bloc Québécois would prefer that the federal government take some of the measures that for too long it has refused to implement, such as improving the EI program, financing the older worker support program, using the huge CMHC surpluses to finance the construction of affordable housing, and restoring funding for women's and literacy groups.

Finally, the Bloc Québécois is asking the federal government to immediately take measures to assist aboriginal peoples who are truly living in poverty. Poverty is found in society but it is also found at work. Sometimes our work is not enough to lift us out of poverty.

That is why the Bloc Québécois takes workers' needs into account. For example, we have introduced—and will reintroduce—a bill on preventive withdrawal in order to avoid having two categories of female workers in Quebec. Some are entitled to only five months at 55% of their gross salary to withdraw from an unhealthy work environment and experience the joys of pregnancy and a new baby. Other female workers in Quebec benefit from a real preventive withdrawal program that allows women working in an environment that is not good for their pregnancy to leave the work environment with 90% of their net salary. That is the sort of program that should also be put in place for workers governed by the Canada Labour Code.

This government should have introduced another program. It is an NDP initiative that was reintroduced by the Liberal government and should have been brought in by the Conservative government last December. I am talking about Bill C-55, which sought to establish a wage earner protection program in case of bankruptcy. It is time this Conservative government reintroduced this bill in the House so that we can quickly adopt this protection for wage earners when the company where they work goes bankrupt.

Bill C-257, An Act to amend the Canada Labour Code (replacement workers), would also help workers. Workers are currently on strike at CN. The company is spending more time challenging the legality of the strike, hiring American scabs, creating dissent among the new workers by hiring retirees and using all sorts of stalling tactics than actually sitting down with the unions to negotiate proper, balanced conditions. Meanwhile, the scabs are getting involved in a dispute that has nothing to do with them. This is unacceptable, and it is time this House adopted the anti-scab bill.

As for the actual minimum wage, section 178 of the Canada Labour Code reads as follows: “—not less than the minimum hourly rate fixed, from time to time, by or under an Act of the legislature of the province where the employee is usually employed—”. Currently, the province, Quebec, determines the minimum wage. The Bloc Québécois feels that this is as it should be. We see no reason to change this, no reason to give the federal government another opportunity to interfere in Quebec's areas of jurisdiction.

Quebec sets the minimum wage, and does a good job of it too. If there is any disagreement, we in Quebec discuss it with various unions, the FTQ, the CSN, social groups and the government. Together, we decide what the minimum wage should be. That way, we avoid creating two classes of workers—those who earn $8 an hour under the Quebec Labour Code and those who earn more or less than that under the Canada Labour Code.

That way, there is no problem. Minimum wage is the same for everyone.

In addition to creating two classes of workers, unfortunately, not many people would benefit from this legislation. We know that 267,000 workers in Canada are covered under the Canada Labour Code and only 1% of them—18,000 people—would be affected by the NDP's measure. Yes, it would help some people, but I think this work needs to be done on a provincial level.

As for poverty in society, let us talk about employment insurance. If this government wants to do something, it must fix the employment insurance program, stop using it as a hidden tax and return the $40 billion to the workers.

The Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities made 28 recommendations. All the government has to do is follow them. That way, we will be able to say that the government is really doing something to fight poverty.

I would also like to talk about the program for older worker adjustment, POWA. More and more, older workers are feeling POWA-less, if you will excuse the awful pun. The situation is getting worse and worse for older workers. We know that globalization is causing more and more workers to lose their jobs because more and more manufacturers are closing their doors.

Older workers, who sometimes have difficulty finding new jobs, need a bridge between when their company goes bankrupt, about when they are 55 or older, and when they begin receiving their Canada pension or Quebec pension.

I would also like to talk about child care. What the government did with respect to child care is an absolute scandal. At the federal level, there is a child care expense deduction. Canadians who pay the full cost benefit greatly. Conversely, since 200,000 children in Quebec attend day care centres at only one fifth of the cost—$7 a day—parents in Quebec can only receive one fifth of the federal tax credit.

Given its refusal to adjust its taxation for the $7-a-day child care program in Quebec, the federal government has thereby taken nearly $1.5 billion from parents since 1998. This amount, taken away from parents in Quebec, is compensated by the Government of Quebec, since it assumes 80% of the cost of affordable child care. When it comes to child care, Quebec pays and Ottawa pockets the money. Year after year, the federal government steals $250 million from parents in Quebec, or, on average, $1,316 per child. That is more than the $1,200, which of course is taxable, that the government proposed to give them in its last budget. This works out to a net loss of $116 per child per family. The Conservative government says it wants to give parents the freedom to choose.

The first thing to be done is to stop penalizing parents in Quebec for having chosen to set up an affordable child care system. The federal government's fiscal policies must stop penalizing Quebec for having created a child care program that is unique in North America. Furthermore, the OECD calls it the best program in Canada and one of the best in the world.

For years the Bloc Québécois has been calling on the federal government to transfer to the Government of Quebec the money it is saving on the backs of Quebec families. This transfer would allow the Government of Quebec to invest in its family policy. When the federal government includes child care funding as part of resolving the fiscal imbalance, as the Minister of Industry promised to do in February 2006, it should also take into account the punitive effects of its tax system on Quebec parents. Resolving the fiscal imbalance should be comprehensive; but to be fair, it should not be uniform.

Let us now look at another aspect: the guaranteed income supplement for older persons. This is another Liberal government scandal and the Conservative government is heading down the same path.

In 2001, the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities identified, remarked and underscored that 68,000 people in Quebec were not receiving their guaranteed income supplement. The least fortunate in society receive a minimum and minimal pension. The federal government—whether Liberal or Conservative—through its management of this program, is preventing tens of thousands of people from receiving the guaranteed income supplement to which they are entitled. It is a real scandal.

The Bloc Québécois—thanks to our former member for Mauricie—launched a major campaign throughout Quebec to try to reach the least fortunate, the isolated, the sick, people who are unable to read or who do not speak either of the two official languages.

These are the most vulnerable individuals in our society. Thanks to the Bloc Québécois, today they receive the guaranteed income supplement of $6,600.

This Conservative government should pay them what they are owed, because it used these delaying tactics to avoid paying them earlier.

If this Conservative government wants to do something for the most disadvantaged, it should pay the retroactivity to seniors who need this guaranteed income supplement, because the government owes it to them.

As you are rising, Mr. Speaker, I assume I have little time left. However, I have yet to speak of social housing.

Wage Earner Protection Program Act

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, even though Bill C-55, which seeks to protect employees' wages in the event a company goes bankrupt, received royal assent last year, it still has not taken effect. The Minister of Labour tells us that it is coming. In June, the minister said, “It is coming”. In committee last month, he again said, “It is coming”. And last weekend, the Minister of Labour even boasted in his riding that “it is coming”.

Could the Minister of Labour be more specific and just give us a date, just a date, and meet that date?

Human Resources and Skills Development—Main Estimates 2006-07

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Chair, I guess I will never get a clear answer from this minister. Nevertheless, as I said, because I am always so optimistic, I will continue to talk to him about Bill C-55.

In the Estimates, I did not see adequate financial reserves to implement Bill C-55. The previous government had told us that the wage earner protection program would cost between $30 million and $50 million. If I divide by the number of months left in this year—because the minister told me that it was a matter of weeks—can he tell me in which part of the budget I can find the wage earner protection program for employees in businesses that have gone bankrupt?

[Jean-Pierre Blackburn, Conservative, Jonquière—Alma, QC]

Also, as part of the reform of insolvency legislation, the Wage Earner Protection Program Act was adopted earlier, as I mentioned, although it has yet to be promulgated. As with any new law, a great deal remains to be done before it is implemented. This is the context for stating that we should be ready in the very near future.

Finally, I would like to discuss the upcoming parliamentary review of the Employment Equity Act. This year will mark the 20th anniversary of the original legislation. We can be proud of this milestone and remarkable progress has been made.

Four months ago, I tabled in the House the annual report on employment equity and the results are rather encouraging. They show how the law has helped improve employment of members of the designated groups—women, visible minorities, the disabled and aboriginals.

As required by the legislation, this was the second five-year review of this act. It was favourably received and we are prepared for the task at hand.

As I mentioned in my introduction, we continue to focus on Canada's workplaces. These workplaces are only the best they can be when their partners—management and workers—work together like true partners, to solve their problems.

As minister, my main task is to bring them together, to act as an honest broker and to do my best to settle their differences. At the same time, I want to ensure that workers have the best—

Labour

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, Canada's manufacturing sector is being decimated and governments are standing idly by as industrial plants close and their workers become Wal-Mart greeters.

In the last Parliament, all parties agreed that the wages, pensions and collective agreements of workers needed to be protected when companies shut down.

Bill C-55 passed through the House but the Liberals refused to proclaim it into law.

If the government will not live up to its responsibility to develop an industrial strategy to save Canadian jobs, will the Minister of Labour at least do right by Canadian workers and bring forward the bill that would protect the benefits they have already earned?

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, as members know, Bill C-55, containing the Wage Earner Protection Program Act, was proposed and passed into law with the unanimous support of all political parties in the House of Commons and the Senate. Bill C-55 also includes a comprehensive reform of Canada's insolvency laws, including the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act. As such, Bill C-55 provided a balanced and complete package of reforms on bankruptcy.

In particular, the wage earner protection program has strong support from parliamentarians, labour unions, the insolvency community and employers. This program should be brought into force as soon as possible. The current insolvency system does not provide adequate protection for unpaid wage earners. An estimated 10,000 to 20,000 workers a year are left with unpaid wage claims due to employer bankruptcies. That is why the wage earner protection program was proposed. The program will improve the protection of workers during the insolvency process.

The protection of unpaid wage earners has been a major issue during every attempt at insolvency reform over the past 30 years and the issue has never been resolved.

The wage earner protection program will address this issue by providing certain payments of up to $3,000 to workers for unpaid wages and earned but unused vacation pay, so that payment of wages will no longer depend on the amount of assets of the bankrupt employer. It is estimated that this will satisfy 97% of unpaid wage claims in full. In addition, the wage earner protection program will provide prompt payment of wages so that workers receive payment of their wage claims when they need it most.

We cannot deny the importance of implementing this program in a timely fashion. However, before the Wage Earner Protection Program Act can come into force, some technical amendments have to be made to ensure that the program will be effective. The regulations necessary to operate the act must be prepared and considerable work needs to be done before implementation.

We do not have to convince Canadians that it is important to protect vulnerable workers who suffer an economic setback through no fault of their own. We do not have to convince Canadians that it is the right thing to do.

This government also understands that protecting Canadian workers when employers declare bankruptcy is the right thing to do.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, I would like to talk about the Bankruptcy and Insolvency Act, the famous Bill C-55, adopted in this House almost a year ago, in November 2005. That bill created a salary protection program for workers in case of bankruptcy.

A long time ago, the Bloc Québécois made a commitment to the unions to propose amendments to the Bankruptcy and Insolvency Act to ensure that the salaries of employees and pension funds would be the first debts to be paid in the case of the bankruptcy of a business.

The current situation is unsatisfactory. Under the legislation now in effect in our country, an employee who has worked all his or her life for the same company could be left with nothing if the company went bankrupt. In the face of that fact, the Bloc Québécois decided to press the government to correct the flaws in the current legislation and to ensure better protection for workers’ salaries.

A year and a half ago, the government of the day tabled a bill in this House, Bill C-55. That bill conformed to the principles of social justice that employees must be paid for the hours they have worked. Workers have nothing but their salary as a source of income. Workers’ pension funds are sacred. No one works all his or her life to end up as impoverished as someone who did not worked so hard for so long.

As I mentioned previously, Bill C-55 created the wage earner protection program, WEPP. Bill C-55 consisted of two components. The first component, dealt with protection of wages, WEPP. The second component dealt with the revision of the Bankruptcy and Insolvency Act. While the WEPP component was not perfect, there were still real benefits related to that program. For example, workers whose company went bankrupt could apply for employment insurance and be eligible for an allowance of up to $3,000 of unpaid wages when the employer declared bankruptcy. The payments made under the program were taxable and took into account other applicable contributions. In this way, regardless of the value of the employer’s assets, workers could obtain the greater part, if not all, of their unpaid wages.

The Department of Industry estimated that $3,000 per worker would be enough to cover 97% of all unpaid wage claims. The government also estimated that this would cost the Treasury $32 million a year or, in very bad years, $50 million. Meanwhile, the government is running $13 billion surpluses.

I think that the Bloc Québécois disagreed with some aspects of the bill but voted in favour of it because it seemed to be a great improvement on the current situation.

The purpose of this adjournment debate is to ask the minister what he is doing. I asked him this question last June in the House and he said that there were some problems with Bill C-55 and it could not be implemented right away. He said, though, that he would take care of everything and would soon have more to tell us. Unfortunately, nothing came of this because it is now October and still there is no news about this bill.

Basically, I want to know two things. First, what parts and clauses of the bill are causing problems? I would also like to know when the minister expects to introduce it again in the House, return to it or just enact it.

I would also like to suggest to the minister that if it is the bankruptcy part that is causing a problem, he just needs to enact the wage earner protection program.

Business of the House

[The Speaker]

I am sure the House is glad to hear the news, but I do not think it is a point of order.

(Bill C-53. On the Order: Government Orders:)

November 16, 2005--The Minister of Justice--Consideration at report stage and second reading of Bill C-53, An Act to Amend the Criminal Code (proceeds of crime) and the Controlled Drugs and Substances Act and to make consequential amendments to another Act, as reported by the Standing Committee on Justice, Human Rights, Public Safety and Emergency Preparedness, without amendment.

(Bill concurred in at report stage, read a third time and passed)

(Bill C-54. On the Order: Government Orders:)

November 3, 2005--Resuming consideration of the motion of the Minister of Indian Affairs and Northern Development that Bill C-54, An Act to provide first nations with the option of managing and regulating oil and gas exploration and exploitation and of receiving moneys otherwise held for them by Canada, be read the third time and passed.

(Bill read the third time and passed)

(Bill C-55. On the Order: Government Orders:)

October 5, 2005--Minister of Industry--An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts.

(Bill concurred in at report stage, read the third time and passed)

(Bill C-66. On the Order: Government Orders:)

November 1, 2005--Resuming consideration of the motion of the Minister of Finance that Bill C-66, An Act to authorize payments to provide assistance in relation to energy costs, housing energy consumption and public transit infrastructure, and to make consequential amendments to certain Acts, be now read a second time and referred to the Standing Committee on Finance.

(Bill read a second time, referred to and reported from committee without amendment, concurred in at report stage, read the third time and passed)

[Tony Valeri, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I think you would find unanimous consent for the following. I move:

That Bill C-53 be deemed to have been concurred in at report stage and read a third time and passed on division;

That Bill C-54 be deemed to have been read a third time and passed on division;

That Bill C-55 be deemed to have been reported from the committee with the following amendments presented by the government:

That Bill C-55, in clause 131, be amended by replacing line 41 on page 127 with the following:

as provided in this section or under the laws of the

That Bill C-55, in clause 131, be amended by adding after line 11 on page 129 the following:

(8) For greater certainty, any collective agreement that the company and the bargaining agent have not agreed to revise remains in force, and the court shall not alter its terms.

and that the said bill be deemed to have been concurred in at report stage and read a third time and passed on division;

That Bill C-66 be deemed to have been read a second time, referred to and reported from committee without amendment, concurred in at report stage and read a third time and passed on division.

Supply

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I wish to thank the member for Hamilton Centre for sharing his time with me and I want to begin by echoing something that the member said.

One of the elders from the Cowichan tribes in my riding has expressed a concern over the years about how often we talk and how we do not listen. He said, “I know you can hear me, but are you listening?” In the great tradition of Parliament, we have often thought that this was a place for debate, discussion, the exchange of ideas and thoughts, and sometimes for compromise.

I want to put compromise in the context of the kind of language that is important for parliamentarians to bring to this discussion. According to the Oxford English dictionary, compromise is a coming to terms or arrangement of a dispute by concessions on both sides; partial surrender of one's position for the sake of coming to terms; the concession or terms offered by either side.

It seems that is what we are talking about when we talk about compromise today. We are talking about various parties coming together and coming up with a solution that will work for all Canadians, not just for one particular group who are desperate to hang onto power for however many days they can do that.

In the tradition of other great parliamentarians, I want to quote from Lester B. Pearson's Nobel acceptance speech. This is a good reminder of the kind of tradition that we have the opportunity to bring here, the kind of discussion and debate that we could have the opportunity to engage in. Mr. Pearson said:

In his response to the situations he has to meet as a person, the individual accepts the fact that his own single will cannot prevail against that of his group or his society. If he tries to make it prevail against the general will, he will be in trouble. So he compromises and agrees and tolerates.

It seems to me we have 37% of the House unwilling to compromise. We have 37% of the House unwilling to tolerate the kind of discussion that brings another view to the table, that says there are important issues before the House right now that we want to clear up. There are important issues such as Bill C-55, Bill C-66, and the first ministers and aboriginal meeting next week.

These are important issues that we are willing to stay at the table and work together on to ensure that these issues are passed satisfactorily for Canadians. This is an opportunity for the House to demonstrate its goodwill in meeting the needs of Canadians.

Let me briefly speak about Bill C-66. We are coming up to wintertime. We have snowflakes falling in Ottawa as I speak. This is an important bill to ensure that Canadians who are the least advantaged and who are at most risk in our world have access to the benefits that are available under Bill C-66. I would urge all members to look at this very good compromise solution that has been offered by the NDP and work hard together to pass this important piece of legislation.

We have heard much talk over the last several months about democratic deficit. We have heard the Prime Minister talk about how important it is for the government and for all parties to look at electoral reform. The member for Ottawa Centre put a very good proposal before the House. We thought we had a commitment to move forward on electoral reform that would make a difference on how each and every one of us behaved in the House, and how each and every citizen was represented in the House. Have we had any action? None. We are still waiting for that process to be put in place.

The reason I specifically wanted to talk about electoral reform is because the very premise of having electoral reform, a proportional representation system in the House, would mean that every one of us would have to come to the House with a willingness and a tolerance for compromise. It would be the very foundation of working together around a collaborative consensus kind of a way. It would be the very foundation of ensuring each and every Canadian voice was heard when members voted.

It would be the very foundation of working together around a collaborative consensus kind of a way. It would be the very foundation of making sure each and every Canadian voice was heard when they voted.

We have had a Prime Minister who has thumbed his nose at electoral reform. He has thumbed his nose at the democratic deficit and it appears that he will thumb his nose at this very sensible compromise that the House has proposed, a compromise that would allow us to clear the business, avoid a holiday election, avoid Liberal campaigning at taxpayer expense in January and have us go to the polls in February. That seems like a very excellent compromise.

I want to talk a bit more about electoral reform and how important it is for the House to address this democratic deficit. Many of us are very well aware of the fact that only 65 out of the about 300 seats in this House are held by women. We know from studies that have been all over the world that electoral reform increases the equality of representation in our democratic systems. Again, we had this opportunity to do this. Have we had any action? Absolutely not. The Prime Minister has not said one about moving forward on these kinds of initiatives.

In these last days, whether there is other action that happens over this next couple of weeks or whether we reach our natural conclusion in the middle of December, we have heard much talk over this last couple of days about how the sky is falling. We have heard much talk from the government, the Liberal benches, about how if we do not do this the world will come to an end and if we do not do that the world will come to an end. The Liberals have been around for 12 years and all of a sudden, with a few weeks left in the sitting of the House, all of this business is going to be done at the very last minute. I am shocked.

The Liberals have had 12 years to get on with this kind of business. We have had 18 months for the Liberals to get on with this kind of business and we still wait.

Today I met with the National Farmers Union and they were talking about the kinds of issues that must be taken care of in the next 10 days. I asked them how long the discussion had been going on. It has been eight years that we have been talking about these very important issues for farmers and in the last week the deal is coming very close to fruition.

What has been happening for the last 7 years and 51 weeks? All of a sudden the deal is coming to a conclusion. What a miracle. Of course it is just before Christmas and perhaps miracles do happen at this time of year, but it seems like there are so many miracles that are happening all of a sudden.

It is beyond belief that the work that could have been done over the last 12 years has not been accomplished. We still do not have enough affordable housing in the country. We still have women who do not qualify for employment insurance. We still have women who are living on substandard wages because of the Canada pension plan that does not recognize their needs. We still have farmers who do not have a decent income. We still do not have any resolution to the softwood lumber issue and many other issues, such as the BSE. I could go on and on about the failure of the government to meet its commitments to the Canadian people.

Why would we now not come to this compromise solution that would allow us to finish the business that is currently before the House, go into an election that misses the Christmas period and give Canadians a chance to talk about the kind of government they want, the kind of solutions that the NDP brings forward, of government that truly puts the interests of Canadians first.

We talk about the common sense compromise which is actually predicated on the fact that people are willing to come to the table and talk to each other. It is predicated upon the fact that we listen to people in a meaningful way and that we are willing to take our agendas and park them at the door to really work on solutions in the interests of all Canadians.

However we can see that is not been what has been before us. I would urge all members of this House to support the motion that is before the House today so we can give Canadians an opportunity to see the business concluded, enjoy Christmas with their families and then call an election in January.

[David Christopherson, NDP, Hamilton Centre, ON]

Mr. Speaker, I appreciate the opportunity to address the House today on a very important motion. I wish to advise the House that I will be sharing my time with my colleague from Nanaimo—Cowichan.

This is one of the more important things that we will debate during the time and life of this minority government, for the simple reason that we are trying to find an agreement on when we can hold the election. Nothing can be more important to the life of a Parliament than its ending, because at that point, of course, all stops.

That is the whole issue. We are trying to prevent the grinding down of the House to the point where nothing happens. We will quickly get to that point if we do not find an agreement. We are almost there. We now have the Conservatives, the Bloc and the NDP in agreement through a process of compromise. It has been stated by MPs from each of those other two caucuses and our caucus that everybody indeed gave a little. It is the nature of compromise. For the most part, it is what makes Canada tick.

Here we are, in the most Canadian tradition, three-quarters of the way to a compromise that would meet all the requirements that everyone has, at least to the point that they could live with it. Everybody gets their main points and gives a little on a few other things.

The Gomery report was mentioned by the previous speaker. Our compromise today allows that to come out. People will have the Gomery report, part two, even though I would say with all due respect that I could not imagine members of a caucus in the House saying that they are going to disagree with any recommendation that Justice Gomery makes in part two. Notwithstanding that, it will still come out prior to election day. The Prime Minister said that was important. We disagreed with him on his point, but the compromise provides that part two of Gomery will be in the hands of voters before they go into the balloting booth. That meets one of the government's requirements.

More important, this compromise allows us to get through a number of bills that we have all agreed need to get through the House. As an example, I will mention Bill C-55. Again, it is not a perfect piece of legislation, but thanks to the work of my colleague from Winnipeg Centre, there are things in there that are definitely going to benefit working people. We are prepared to see that it gets through.

Now, with the amendment to it, I would hope that we are not going to get bogged down in voting procedures, but I hear that is possible. That would be a shame. It is an important bill. With the minor amendment, to which the government has agreed, we definitely will have moved the yardsticks forward, at least notionally.

It does not, however, address the issues that are contained in Bill C-281, the workers first bill. Again, it was introduced by my colleague from Winnipeg Centre. This is the bill that in the case of a bankruptcy takes pensions and puts them to the top of the list so that workers and the decades of work that they have done are not lost and they are the first ones to receive whatever money might be available afterward. The banks, the suppliers and the government right now stand in line ahead of the workers. Bill C-55 does not do what Bill C-281 would, but it will make some improvements if the common sense compromise that the opposition is putting forward today passes that bill.

Another example is Bill C-66, the energy rebates. I do not imagine there is anybody in the House who is opposed to the notion that we would try get some relief to those individuals and families who are in most need given what is happening to fuel prices and the fact that we are heading into a Canadian winter. That bill can pass under this compromise. There are two other bills that are equally important to other Canadians. I will not get into the details. They will pass the House under this compromise.

We might ask ourselves why it is not happening. I would have to say it goes to the same reason why there was a Gomery report in the first place and why there is a rage across the land. It is the arrogance of the current governing Liberal Party. It is pure arrogance.

The Prime Minister of the day does not have the support of almost two-thirds of Canadians and almost two-thirds of the House, yet the Prime Minister and the Liberal Party believe that under their culture of entitlement they are entitled to govern as if they were almost imperial. They are there and there they shall stay, they believe.

All we are asking is for a little humility and a little compromise and for them to recognize the fact that even though they have been driving around in the limos for a dozen years without a break, in the last election the party that is currently in power was not returned with a majority. The people of Canada sent that party a message. The problem is that the Prime Minister will not listen to that message. He will not listen to Canadians. He will not listen to other parliamentarians. He will not listen to anyone except other Liberals and their strategists, who, by the way, are still doing quite well in Canada, thanks very much.

Notwithstanding Gomery, and I am not suggesting there is anything wrong, but boy it did raise the eyebrows when we saw another article today about another contract to Mr. David Herle, who is with Decima Research, to do work for the recent mini-budget.

I will just say parenthetically that what is interesting is the fact that the limit for having to go to tender is $25,000. Under that, contracts do not have to go to tender. Is that not interesting? It is pure coincidence, I am sure.

I am absolutely certain it is a mere coincidence that even though $25,000 is the limit, Mr. Herle managed to just tuck underneath at $23,112. Therefore, there was no need to bother going out to ask anyone else if they might want some of that work. The government can continue to give it to whom? To the key strategist for the Liberal Party of Canada. It does not stop.

The Prime Minister and the Liberal Party ask what the difference is. Eight weeks, they say, and they ask why the opposition is getting all cranked up about this. We are very concerned about continuing to give the keys to the Challenger jets and the limos and all the other perks and tools of office to a party that clearly is prepared to use Canadians' money for their own partisan purposes. We want to bring it to a halt. We think that Canadians want to bring all of this to a halt, but we will let the election decide that part of it.

It has been mentioned that this is somehow unconstitutional, that we are doing this horrible thing to the traditions of Parliament, that it is terrible what we are doing in breaking with tradition and almost being illegal in what we are doing.

First of all, let us make the record very clear. It has already been mentioned that a challenge to this motion was placed this morning. By whom? Let us ask ourselves who would challenge it. Oh, right, the Liberals. They challenged it and tried to deny this motion even coming to the floor. The Speaker ruled that it was entirely in order. Nothing that we are talking about right now vis-à-vis this motion is out of order.

As for the issue of the constitutionality of what we are attempting to do, I am not a parliamentary expert, but I was the Deputy Speaker in the Ontario legislature and I have some notion of how the rules of Parliament run. I have to say that when the Prime Minister stands up and makes a public commitment to a particular date or time period for an election, that is all it is. He does not have to follow that. The Prime Minister can change his mind any time he wants. There is nothing to hold him to that. There is no constitutional trigger, no legal lock-in, to this position. It is just that the Prime Minister has said that he is going to have this election sometime in the early spring.

All we are asking is that it be recalibrated. All we are asking is that the Prime Minister stand up and say that in the interests of Parliament, out of respect for the minority Parliament Canadians sent here, out of respect for the need to get these bills through, out of respect for the first ministers conference with the aboriginal leaders, out of respect for all those things, he is prepared to revise the date on which he said he would call the election, at which point he will trigger his constitutional authority and ask the Governor General to dissolve Parliament and issue the writs for an election. That is all.

It is not a big parliamentary deal, but it does seem to be a big personal deal for the Prime Minister. We are asking, we are imploring, we are pleading, and we are demanding that the Prime Minister of the day respect the majority of the House and the majority of the country. We are demanding that the Prime Minister give us an election timeframe that we can all live with, that is fair to everyone, and gets the important business of this House done. That is a good common sense compromise.

Business of the House

[Tony Valeri, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, we will continue this afternoon with the opposition motion.

On Tuesday, November 22 and Thursday, November 24, we will have allotted days. The opposition House leaders are in fact considering a special House order to expedite Bill C-53, Bill C-54, Bill C-55 and Bill C-66 through all stages with a recorded vote at third reading. I hope we can come to an agreement on that special House order and proceed in that fashion.

If we cannot agree on that special order, then tomorrow we will begin with reference before second reading of Bill C-71, the first nations commercial bill; report stage of Bill S-37, respecting the Hague convention; second reading of Bill S-36, the rough diamonds bill; and reference before second reading of Bill C-72, the bill amending the DNA legislation. We will continue with this business next week, adding the report stage of Bill C-57, the financial governance bill, and other unfinished items.

With respect to the comment about the Chamber of Commerce, it is very clear, and I said this earlier, that Bill C-66 and the ways and means motion are in fact confidence motions. Although I am not sure I should do this, I am taking at the hon. member's word the public statements that in fact those members do support Bill C-66 and the ways and means motion with respect to taxes. Given his comment, I guess I should reconsider and speak to him once again since his party has flip-flopped on a number of occasions.

With respect to prorogation, I have to say that this rumour created by the Conservative Party was merely to keep the NDP in line with its confidence motion that it will put forward in the coming weeks.

Supply

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, at the outset, I will be splitting my time with the hon. member for Winnipeg Centre.

The NDP leader, the member for Toronto—Danforth, referred to this as an historic day, thanks to this motion, to get things done for Canadians over the next few weeks and to advance a reasonable compromise that three parties, the majority of the House, support. We can get important legislation passed, such as Bill C-55 to protect the pensions of workers. We can get the fuel rebates in Bill C-66 to the people who need them the most.

We know nothing prevents the Prime Minister from setting a date at the advice of this Parliament. The motion provides a real opportunity to address the democratic deficit that the Prime Minister promised to fix. An election delayed until the spring would only make that democratic deficit worse. The Liberals would like taxpayers to fund an extra two months of pre-election spending announcements and travel around the country. This is wrong and it will not happen.

I would like to speak about the first nations conference because it has been raised here as a difficulty that we may in fact be creating. This is important to me, my caucus and my riding where there are two great first nations communities, Garden River and Batchewana. I want to address the aboriginal concerns regarding an early election.

First nations leaders have been in touch with me with regard to concerns about an early election disrupting the first ministers meeting in Kelowna next week. The NDP has a long, proud and clear record of support for first nations, Métis and Inuit objectives, unparalleled by any other party.

The member for Winnipeg Centre campaigned against the first nations governance bill. My entire caucus stood behind his aboriginal affairs committee filibuster to bring attention to Indian residential school abuse. New Democrats believe we must finally achieve fair compensation for survivors and lasting reconciliation for all of us.

The whole compromise will have the effect of protecting that first ministers meeting. All the opposition parties now agree that meeting should be protected. It also honours the principles of first nations of consensus and compromise.

I came to Ottawa wanting to do politics differently, to work positively with elected officials locally at all levels and from different parties. We came to the House of Commons in a minority Parliament to make it work and to be productive. To the best of our ability, we have done this. Our better balanced budget produced results for working Canadians in housing, protecting pensions, post-secondary tuition, the environment and aboriginal communities.

The government did not want to recognize what Canadians told it on June 28 of last year. Canadians said no to the Liberals ruling again as a majority government. Canadians elected the House with the majority of MPs from different parties other than the Liberal Party. We have had confirmed by the Gomery report the width and breadth of the culture of entitlement that has Liberals putting themselves and their party before the Canadian people or our country.

I have come to work but have not seen much of the government's recognition of a minority Parliament or working collaboratively.

First, there is a paucity of legislation, except for housekeeping bills. Even the housekeeping bills, like the ones to give legal standing for the Departments of Social Development and Human Resources and Skills Development, came a year after those departments were up and running and budgets were being spent. Even when we tried to bring amendments to that bill, every last one of them was turned down.

In committee we see the lack of recognition of a minority Parliament, refusing to work productively to get things done for Canadians.

We raised the deplorable treatment of the voluntary sector by the government's new call for proposals process. For the longest time, rather than getting to the bottom of this, the Liberals were more interested in censuring me than in doing the investigation. God help the whistleblowers under any legislation if this is the way people who bring out grave injustices that need righting will be treated.

My motion to conduct hearings across Canada on the Canadian social transfer was passed in June in the human resources committee. Roy Romanow said that these hearings would be the most important dialogue Canadians would have, even more important than health care. However, since we came back in the fall we have seen nothing but foot dragging in the committee not to have these hearings actually take place. These hearings have not happened and it looks like they will not happen before the government falls.

The Liberals' culture of entitlement has them believing in some divine right to rule and to ignore the will of Canadians and the will of Parliament. This Liberal culture is alive in my own riding, as well, with riding executives sending statements to the media that voters should elect a Liberal MP if they want to get anything in the riding.

Has the Liberal Party learned nothing from the sponsorship scandal, of government ministers ignoring the will of those who were elected by voters and not inviting those members of Parliament to announcements of the federal moneys being spent, Canadian money, I might add, not Liberal money, as they believe? In my riding this has lead to the unprecedented resolution of city council to ensure that politicians at all levels of government, regardless of their party, are invited to these announcements.

This motion introducing this compromise is a hallmark of what can happen in a minority Parliament. Usually, with a compromise, it takes people a little while to get around to accepting it. I hope the government will listen to Canadians and to the majority of the members of Parliament and agree to this sensible approach.

The Prime Minister himself said that he wanted to get some work done this fall, including the first ministers' meeting with aboriginal and first nations. The second thing he said was that he did not want an election over Christmas. The third thing he said was that he wanted to ensure that Gomery's second report was in front of the voters before an election. Those were the things he wanted.

We said yes to all those things and our proposal to have the election called in January for a vote in mid-February would accomplish all those goals.

[Jack Layton, NDP, Toronto—Danforth, ON]

Mr. Speaker, this is a historic day in this Chamber in that a proposal is before the House that could bring all parties together in a spirit of compromise in a minority Parliament to achieve a number of key shared objectives. When that happens it is a salutary moment in this chamber. It is one that we need to consider very seriously. We need to examine the arguments why such a course of action is not only sensible, in the sense of being very much a common sense proposition, but also serves the interests of Canadians which is after all why we are here.

The objective is to get things done for Canadians over the next number of weeks and then move into an election after the holiday season in January for a voting day in the middle of February.

Three parties in the House have indicated that spirit of compromise in coming forward with this proposal. The only party so far that has refused to exercise that spirit of compromise, that sense of working together to find a common sense road ahead in order to achieve important objectives for Canadians, sadly is the very party whose unethical conduct has created the situation that we are in today.

The fact is that nothing, but nothing, prevents the Prime Minister from setting an election date on the advice of Parliament. It is, if I may say so, typical Liberal arrogance that a majority vote of Parliament is seen somehow to be irrelevant or an obstacle.

Just because something has not been done before does not mean that it might not be in fact a very good idea. The Prime Minister promised transformative change and suggested that it was required in order to fix the democratic deficit. We agree. However, now he refuses to compromise even though a majority of the House is going to be voting in favour of this advice. In other words, the Prime Minister will not be respecting the will of Parliament.

That does not sound to me, nor do I believe it will sound to Canadians, as though the democratic deficit is being addressed in a positive way. In fact, what it does is it leaves us with a sense that the democratic deficit is growing. We have a political party that received only 37% of the vote wishing to ignore the views of the House as expressed by parties representing almost two-thirds of Canadians. That, I would submit, is not the appropriate conduct for a Prime Minister of this country or for his political party.

Let us examine some of the issues here. First, we have been told by the Prime Minister and members of his party that what we are talking about is “only eight weeks”. In other words, the difference between the date that the Prime Minister has already set. He has already taken the view that there needs to be an election to determine whether his party can carry on in government as a result of the findings and recommendations of a respected justice who has examined a scandal and reported on it.

The Prime Minister has said that Canadians need to have the opportunity to judge on the findings, the recommendations, and the political party about which the investigation was conducted. We agree. The only question is when.

His proposal is on or about March 1. Our proposal, which will be coming from the majority of members in the chamber when we see the vote next week, suggests the beginning of January. Those are the eight weeks that we are speaking about.

What is to happen in those eight weeks? First, the House is not sitting for five of those weeks. In other words, the democratic process of members rising in the House to propose actions on key issues affecting Canadians, the process of questioning the government on its actions and holding it to account, the idea that we should be considering spending or legislation to correct the many unsolved problems that have been left to fester for 12 long years, is simply unable to be conducted during five of those weeks.

Is the Prime Minister suggesting that somehow those five weeks in particular are irrelevant to Canadians? We submit that by having the election in March those weeks are lost as working weeks for parliamentarians to work for Canadians. Therefore, there is no effective and good argument not to be having an election because during those five weeks we are literally shut out of this place in any event.

Of course, there will be something going on during those five weeks. We can be sure that vehicles such as the Challenger will be regularly booked, that there will be a number of press releases and announcements, probably from coast to coast to coast in this country, all paid for, by the way, by the taxpayer. These announcements and spending decisions will already be made by the House of Commons. As a matter of fact, what will be happening during the five weeks that we are talking about is a public relations campaign, not the actions of anything relevant to this particular House.

We will be having a publicly financed public relations campaign. Then the House will return for three more weeks. What is to take place in those three weeks? A budget will be tabled on which a vote will not be able to happen because the Prime Minister has said there will be an election on or about March 1, a budget which will not precipitate or produce any positive action whatsoever and will dominate the three weeks.

Our proposal is simply that this business of the eight weeks being somehow significant or relevant to addressing the issues of Canadians is false. The work that needs to be done by the House should take place between now and the holidays, and that is what we want to see.

There is a solution to the situation confronting Parliament today. It is a matter of common sense.

In the spring, we managed to keep Parliament going because the Liberals agreed to some of our good ideas. This fall, we submitted proposals, but unfortunately the Liberals chose to not work with us to obtain results beneficial to people.

The Liberal Party cannot decide when it will be judged. The people did not elect a majority government, and all parties must be prepared to make compromises.

I believe there is a reasonable solution. There are options other than an election during the holiday period, which no one wants. In addition, no one wants a Liberal Party that thinks it alone can decide when its comportment should be judged.

With this motion, we are requesting an election be called in early January and the vote held in mid-February. This proposal will thus permit Parliament to pass housekeeping legislation, including some very important bills, and will make it possible for the first meeting between first ministers and native leaders to be held. It will also provide an opportunity for the clean-up in Canadian politics that is needed in order to get back to basics, to produce specific results of benefit to the public.

The difference between last spring and this fall is this. In the spring Liberal corruption created a parliamentary crisis. When the NDP offered good ideas to get things done for people, the Liberals were forced to agree. In the fall, Liberal corruption again created a crisis, but this time the Liberals refused to get things done for people, as the NDP suggested, such as protecting public health care in this country.

This minority Parliament is unusual in that the governing party's unethical conduct has hung over it throughout its life, creating an artificial limit to Parliament's life as established by the Prime Minister. Nothing will happen after the holidays except an expensive taxpayer-funded Liberal pre-election campaign. Let us just formalize when the election will begin. It will be underway, at taxpayer expense, so let us have it conducted under the rules of Elections Canada, with a formal initiation of the electoral process in January.

In the meantime, let us get Bill C-55 passed, a bill to protect workers' wages and pensions when there is a bankruptcy, something our party has urged for many years. It is a bill that three straight Liberal majorities did not produce. It only has come forward in the context of a minority Parliament because the NDP gets things done for working people.

Let us get Bill C-66 passed to get energy rebates to people. Parties from all sides have called for action from the government dealing with the energy price crisis.

Let us let the public transit money and energy efficiency money flow. I remind the House that this money is only there because of the NDP proposals with regard to the budget last spring. That is when we took out the corporate tax cuts and replaced them with precisely these investments that people need.

Let us allow the first ministers meeting with the aboriginal leaders to occur. Twelve years of Liberal government have left aboriginal people often living in third world conditions, and it is about time something was done about it.

The culture of entitlement to which Justice Gomery referred is, unfortunately, alive and well. The Liberal Party thinks that 37% of the support of Canadians entitles it to 100% of the power. There is no sense that there is any need to work with the representatives of Canadians from various other parties who, collectively, have the support of 63% of Canadians.

The common sense compromise that we have proposed would allow people to hear the second Justice Gomery report, which will arrive before voting day. This would enable Canadians to incorporate the recommendations in their thinking and parties would be speaking about those recommendations. In fact, some parties already have advanced proposals for reform. I am very proud of the proposals that have been brought forward by the member for Ottawa Centre, just to name an excellent example of what is before us.

However, the proposal from the Liberal Party to set the date on March 1 essentially establishes a timeline that is in the hands of the Liberal Party to be in charge of pretending to fix its own scandal and then graciously allowing people to vote.

It is true that the common sense compromise is exactly as originally promised by the Prime Minister last spring. He was under the impression at the time that Justice Gomery would deliver his final report on December 15. Our proposal would have an election taking place exactly when the Prime Minister promised Canadians it would.

The Prime Minister is taking advantage of the fact that Justice Gomery has asked for some extra time to prepare his recommendations, and the House will not be sitting during this extra time period. This simply would provide a free opportunity for Liberals and their cabinet ministers to fly all over the country, at public expense, and talk about how terrific they are. There would be no work done in that period because the House would not be sitting.

It is shameful. What we call for is the spirit of compromise.

I ask this simple question, and I have asked it in this House before. Why, when three party leaders of the four in the House are willing to compromise, as one should in a minority Parliament situation where no party has a majority of the support, is the fourth party is withholding that consent and sense of compromise?

It is not that the Prime Minister cannot compromise because of some rule that exists. We hear this spurious notion that somehow the motion is not constitutional. Those who would take a look at it now that it is written and before the House will realize it is. I can cite some sources. Members do not have to take my word for it.

Julius Grey, a prominent constitutional lawyer, says that there is nothing that prevents this from happening.

Here are some quotes from Hugo Cyr, a constitutional law professor at the Université du Québec à Montréal.

I quote:

There is nothing unconstitutional in this motion.

Parliament may be dissolved for a number of reasons following a vote of censure, a vote of non-confidence and a decision by the Governor General, on the advice of the Prime Minister or simply because the end of the five-year period has been reached. In other words, loss of confidence is not the only reason for the dissolution of Parliament.

Since nothing prevents the Prime Minister from announcing ahead of time the date he will ask the Governor General to dissolve Parliament, something the Prime Minister has done on a number of occasions, nothing prevents him from stating ahead of time in a motion put before the House the date on which the request will be made.

Nothing prevents the House from telling the Prime Minister what it considers the appropriate time to ask the Governor General to dissolve Parliament.

I also can quote a law professor from the University of Alberta, one who is also the former attorney general of the country, now the Deputy Prime Minister of our country, who indicated that there was no obstacle to the Prime Minister accepting such advice.

I simply draw the attention of the House to the fact that we have an historic opportunity in a minority Parliament to do what Canadians and the Prime Minister have said that they want to see happen: first, get work done during the fall; second, avoid an election over the holidays; and third, have in the hands of voters the findings and recommendations of Justice Gomery about Liberal corruption. All these things are worthwhile objectives.

There is much work that can be done this fall. It would be better for Canadians not to have to participate or pay attention to electioneering in a season where their children are at home and they are able to spend time with family, thinking about values and about the future in ways that are celebratory and important.

The compromise suggestion respectfully submitted in the House would accomplish those objectives. The only objective that would not be accomplished is one that has never been stated publicly. The government has never referenced or submitted the business it would do in the wintertime. This is period of time when the House would not sit and when no meaningful business could be conducted. The only plan we have had is a plan for the fall. We propose that we work on that plan together. The Liberal Party and its leadership has suggest they do not want to participate. They would rather simply be on their own in January to sell themselves at our expense. We will not have it.

We want this compromise adopted and we call upon Canadians to urge the government to abandon its arrogance of 12 years and to begin to work with the members of Parliament whom they elected.

Wage Earner Protection Program Act

[Larry Bagnell, Liberal, Parliamentary Secretary to the Minister of Natural Resources]

Madam Speaker, I am pleased to speak in support of Bill C-55, an act to establish the wage earner protection program act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make consequential amendments to other acts. Many members have already expressed support for the principles of this bill. In my view this clearly demonstrates the need for this piece of legislation.

Bill C-55 will help thousands of Canadians who must rely on a fair and effective insolvency system to deal with the situation of financial distress.

Stakeholders from a broad spectrum of interests, insolvency professionals in the legal and accounting communities, labour groups, associations of creditors, the business and financial community and consumer groups have been demanding improvements in our insolvency system. Bill C-55 will do just that. It will make our system fairer and more attuned to today's marketplace environment as well as help Canadians to overcome problems associated with bankruptcy. The bill will bring about many important changes.

First, the bill significantly enhances the protection of workers when their employer goes bankrupt or undergoes a restructuring process. The creation of the wage earner protection program act is a major breakthrough. Numerous previous attempts to deal with this issue have been made over the past 25 years and they have all failed.

I firmly believe that the solution proposed in Bill C-55 not only greatly expands the protection to workers, but does so in a balanced and reasonable way that mitigates the adverse impact on credit.

Let us not forget that bankruptcy is always about sharing the burden, because by definition bankruptcy means that there are insufficient assets to pay all the creditors. Bill C-55 ensures that the burden is shared in a fair and equitable manner by taxpayers, lenders and other creditors.

Second, the bill further encourages restructuring as an alternative to bankruptcy. The Companies' Creditors Arrangement Act, which governs all major corporate restructuring, has not been substantially modified since it was first enacted in the 1930s. It needs to be modernized to improve the predictability and consistency of the restructuring process.

Many new provisions are proposed in Bill C-55, including the treatment of contract, the provision of interim financing, governance arrangements and transparency and notification procedures. It also introduces clear rules to govern the treatment of collective agreements during a restructuring process, which fully respects labour law principles while recognizing labour costs may need to be dealt with to ensure a successful restructuring.

Third, the bill makes the bankruptcy system fairer while reducing the potential scope for abuse. Many changes proposed in Bill C-55 are directed at redressing inequities. In this regard I want to emphasize the proposal to exempt all RRSPs from seizure in bankruptcy.

Under the current rules, only registered pension plans with employers and some RRSPs held with a life insurance plan are protected. There is no reason for treating retirement savings differently. Bill C-55 will ensure that all Canadians have the same exemption for their retirement savings.

Fourth, the bill contains a number of technical amendments to clarify the law and improve the administration of the insolvency system. Several amendments pertain to clarifying the role and conduct of trustees, receivers, and monitor as well the supervisory functions of the Office of the Superintendent of Bankruptcy. While perhaps very technical, these amendments are clearly needed if we want our system to operate efficiently and with fairness.

Bill C-55 is the result of an extensive consultation process. The Senate committee conducted public hearings in 2003 and received more than 40 submissions. Its report contained detailed recommendations for changes to Canada's insolvency laws. In fact, the committee submitted more than 50 specific recommendations and a vast majority have been translated into the provisions of Bill C-55.

It is quite clear that this legislation is of interest to a very large number of Canadians. I am convinced that Bill C-55 deserves the full support of the House. I urge that the bill proceed expeditiously to the committee review stage.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Madam Speaker, I appreciate my colleague's question.

We favour having the law apply to everybody. In the past, if a student, two years after finishing their studies, could not pay back their debt, that student had a right, just like anybody else, to file for bankruptcy.

One feels sorry for the student, in a way. Let us take a frequent occurrence in rural areas. People pursue their studies in a university out of their region, they come back home, but they do not find work. They already have to start paying back their debt, even though they do not have a job.

From the start, the student in debt is treated in the same manner as a person who has filed for bankruptcy. The student has no right to file for bankruptcy, but the debt is recorded with collection agencies. They get their first job. They want to buy a car, but have no right to do so, because collection agencies have a file on them. They want to buy a house to get a start in life, but cannot do so because their debt is recorded with collection agencies, and all that even though they have not filed for bankruptcy. In fact, the mistreatment they suffer is twofold. It is discrimination. It is not fair that they be considered second-class citizens.

The government has introduced this measure because too many students were going bankrupt. If this is the case, perhaps we should analyze the cost for the student. What did the government do? It balanced its budget and had a zero deficit, saying that it did not want to transfer the debt to the future generation, but wanted to pay it before the arrival of the future generation. What it did was transfer the debt to the future generation directly through universities. After university, it is now the student who is in debt, not the country. The debt has been transferred to these young students. Who are these students? They are our children. This is what the government has done. It has put our children in dire straits. This is what this Parliament has done. It is not right.

Perhaps several members here already belong to big corporations, represent these and do not have any problem paying for their children. However, there are parents in Canada who cannot pay for their children and these latter are forced to go into debt.

It is quite sad. The government has put into debt many young students in Canada who cannot go back.

Nowadays, a young university student graduates with $40,000 in debt. If they have met someone who has studied at the university level and they decide to live together, that translates into a $80,000 debt. Suppose they do not work at the same place and both buy a small car costing $10,000, the debt soars to $100,000. If they want to buy a $80,000 house—and that is not expensive—the debt reaches $180,000 and they have not had babies yet. That is what the government has done to our children.

Bill C-55 provides an opportunity to adjust the situation so as to help our students. We should grant them the same rights in the area of bankruptcy and help them pay their student debts, not bury them in debt as is the case today.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Madam Speaker, it is my pleasure to rise to speak to Bill C-55. I particularly want to thank the hon. member for Winnipeg Centre for the battle he has been fighting for workers for many years.

That has been recognized in this House. Earlier, I heard the Conservative member for Kootenay—Columbia allude to the job done by the member for Winnipeg Centre, and the Bloc Québécois member for Chambly—Borduas acknowledged it as well. This goes to show that discussions have been ongoing in the House of Commons for a number of years. Unfortunately, the then majority government consistently denied workers the opportunity to benefit from wage protection and pension protection in the event of a bankruptcy.

We will recall how shameful and outrageous it was in New Brunswick, when Nakawick went bankrupt, to see employees who had worked for the company for 30 years, who were 53 years old and had not reached retirement age, lose their pension fund.

We have to remember that, when a collective agreement is negotiated, that is part of the so-called package. When you negotiate a collective agreement and the employer agrees to a 12% increase over three years, the pension plan is part of that 12% that the employees have obtained.

What message is this sending? I am not talking about now, because I am in favour of Bill C-55. It is a step in the right direction, but I do not think that it goes far enough. Are we sending unions and employees a message, saying, “Do not negotiate private pension funds. Ask for the maximum amount of money instead. You will be much safer if you handle your money yourself”?

The fact is that an agreement has been signed at the negotiating table, providing that the workers would have a pension fund and that the company would be responsible for setting money aside for these workers.

I am suggesting that this may not be the appropriate legislation. Indeed, when we look at pension funds, instead of having a bill, we should say that a company is responsible for setting aside a fund that neither the company nor any creditor that might come back to collect money following a bankruptcy can touch. That money would be set aside and guaranteed to be there. It would be put in a fund for workers.

As I already mentioned, I find it absolutely appalling when we look at the wage issue. It does not make sense that a man and a woman who get up every morning and go to work for a company, who help it make money over a period of 30 or 40 years, would suddenly find themselves in trouble because the company has filed for bankruptcy after spending too much and not closely monitoring its finances. All of a sudden, at the end of a week, it decides to go bankrupt. As for the workers, it is too bad, but they are not getting anything. It is the banks that will get money before anyone else does.

As regards students, for example, the government is telling them, “You will have 10 years to go bankrupt”, as if students were second-class citizens. By contrast, large corporations would be first-class citizens and would be protected. The Liberal government, and also the Conservative government when it was in office, have always protected big companies.

As we can see in the last budget, the government wanted to grant a $4.6 billion tax cut to large corporations. The Conservatives were not happy when the NDP said no to this minority government. Instead of giving this $4.6 billion to large corporations, we want it to go to ordinary Canadians. We want affordable housing and we want money to be set aside for that purpose, to the tune of $1.5 billion. We want this $1.5 billion to be used to reduce the debt of students, children and Canadians.

Nevertheless, the Conservatives complain daily in the House about how the Liberal government has bowed to the demands of the NDP by giving something to ordinary, everyday people. As if it were disgraceful to give students money. As if it were disgraceful to demand affordable housing so that the homeless can find suitable accommodation. That is how the Liberals saw it. Since they are a minority government, they had to give in. Otherwise, they would have had to put up their little election signs.

The Conservatives cannot believe that the money has not gone to big business. They are upset about it. Once again, they are defending the big banks. I am convinced that if any legislation in Canada were to put the workers first, the workers would be protected.

It is the public who votes in an election, not corporations or the great friends of the government. In fact, a company president gets only one vote. Consider Inco in Sudbury. If it has 8,000 employees, then that many people get to vote for politicians. Inco, however, has only one president.

How can this government show such little respect for the workers and try to make us believe all kinds of things? It is incredible. I was listening earlier to one of my Liberal colleagues say that by not paying them, they are protecting them. He said that they should be happy, since they being protected. He is trying to make them believe that if the money were not given to the bank than they might not have had a job. This is what they want people to believe. Furthermore, this government is trying not only to make us believe but also swallow the fact that workers who leave their employment are not entitled to EI. And if they make a mistake in their EI application, they might end up owing the government $10,000.

However, Mr. Dingwall can resign his position and get a $500,000 severance package. The government feels responsible for a former Liberal minister who has resigned his position. So, it gives him a half a million dollars. But when lowly workers leave their job, they are not entitled to EI. This is completely unfair.

I believe it is time we had a bill, one to which amendments could be made, particularly concerning students, so that they can be treated just like any other Canadian. I hope Canadians are aware of how they are treated. Workers are not entitled to their pension money if there is a bankruptcy, but the banks can get their money. A former minister who is working for the government leaves his job for no valid reason—he should perhaps have been sacked—and is entitled to half a million dollars.

An ordinary worker let go for misconduct is not eligible for EI, but Mr. Dingwall, with his $750,000 in expenses and his $274,000 salary, a man who even claimed the cost of a little pack of chewing gum, is entitled to a half million. Unbelievable.

In another case, a person who has stolen $1.5 million from the Government of Canada writes a $1 million cheque to pay it back and avoids going to jail. What is more, that person acquires the job of going around to our universities telling our students how not to get caught. Unbelievable. What kind of world are we living in?

Personally, I hope Canadians are going to wake up and clearly tell the government, or any political party, that they will no longer put up with this. They want protection. Someone who goes to work wants to get the wages he is entitled to according to the number of hours worked. If the company has been able to enjoy all these profits over the years, the worker at the very least deserves his pay at the end. He also deserves payments from the pension fund that was negotiated for him.

He also deserves a respectable life and a respectable retirement.

This is why we support Bill C-55. It does not go far enough, in my opinion. We should work on it and broaden its scope. All colleagues in the House should sincerely support it. It is not enough to express one's support for workers, while the major corporations and the banks are the ones really getting the support.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Madam Speaker, I am pleased to address this very important bill, which seeks to protect wage earners when their employer goes bankrupt, through amendments to the Bankruptcy and Insolvency Act, to the Companies' Creditors Arrangement Act and, of course, to others acts, as I will explain in my comments.

We are pleased to hear, from the Liberal Party, arguments that reflect those made in the fall of 2003 by both NDP and Bloc Québécois members, who were convinced of the need for such protection. At the time, the NDP had presented a motion to that effect, but the Liberal Party had voted against it.

According to the figures quoted by the hon. member for Guelph, each year, between 10,000 and 15,000 workers suffer losses of wages that are owed to them when their employer goes bankrupt. We knew that in the fall of 2003. I do not want to reflect on the past, but it is rather sad and upsetting that, over the past two years, workers were prevented from enjoying such protection. The Liberal Party was aware of the situation, but it still voted against that motion.

I also want to draw an analogy with another bill that was tabled by the Bloc Québécois just recently, during the spring. This bill was debated and supported by my Bloc Québécois colleagues, including the hon. member for Saint-Bruno—Saint-Hubert, who also took part in the debate on the current legislation, Bill C-55, at second reading. The bill proposed by the Bloc dealt with job protection during labour disputes, and more specifically with replacement workers.

In recent years, this issue has been debated countless times in the House. Again, it is because of the Liberal Party, which defeated it by 12 votes, if that bill was rejected. The Liberal Party, and particularly the ministers, voted against this legislation.

So, I am drawing an analogy between that bill and the one currently before the House. Why did the government wait so long and let workers suffer so much before adopting constructive measures?

We support the principle of Bill C-55. However, a number of amendments to be presented in committee will have to be included in it.

It would be rather useful to review the way the law is currently worded, in order to have a proper understanding of the content and scope of Bill C-55, as well as the necessary amendments.

At the present time, there are two kinds of creditors when there is a bankruptcy: the primary creditors, which are termed secured claims, and the secondary claims. Secured claims include all those secured by mortgage or some tangible form of guarantee. Employers have never had such a security, and all other types of claims have to be satisfied before they get to the workers.

Then there are the non-secured claims. There is a whole series of these, and wages rank only fourth. Higher in the list are funeral expenses, administration costs, and deductions payable to superintendents. Wages come only after all these, so it is a rare occurrence indeed for workers to receive compensation for work done or monies owing to them. Sometimes these amounts make all the difference, and at least provide them with an income and the ability to live in dignity until some other recourse comes along.

There is an expression used in labour law, in fact a statement of principle: “All work deserves pay”. The same thing must apply in this case. It is amazing that there is no protection for workers in the event of bankruptcy in the year 2005. The bill will, of course, remedy that shortcoming. Just how it will do so, we will come back to later.

The responsibilities of trustees in bankruptcy will also be broadened. At the present time, the time period and the amount distributed are governed by law. There is a time limit of six months for wages owed, and a maximum amount of $2,000.

Now, for the Employment Insurance Act. Workers who lose their jobs still use the term “unemployment insurance”. We are all aware of the philosophy that lay behind the Liberal Party's decision to change its name. The connotation was that the insurance was there to ensure people of work, yet we all know very well that it was an insurance in the event of misfortune, of job loss. So it should still be called “unemployment insurance”.

Currently a worker has to use up all of his resources before he can get employment insurance, which is another major shortcoming that needs to be corrected. The whole matter of earnings during a waiting period, a period of unemployment, undeclared earnings during a claim for benefits period, and earnings within the framework of employment benefits or allocation of earnings during a program, are things that further put off when the worker receives employment insurance. The Bloc Québécois called on the government to correct this for a number of years.

As I was saying earlier, other hon. members in this House joined the Bloc in finally correcting this matter in 2005. Better late than never. We will support this bill by providing a number of corrections and changes.

Let us now talk about the very nature of the bill, which is said to create the wage earner protection program. Under this new legislation, the federal government will cover up to a maximum of $3,000 of the wages of wage earners in the event of a bankruptcy. We are quite pleased with this measure. We have no objection to the government becoming the primary guarantor and taking the appropriate measures to seize or recover the money owed by the company. That was the second aspect.

Contrary to the past claims of the current government, it is interesting to discover that the related costs are quite limited. An hon. member from the Liberal party reminded us earlier that there are 10,000 to 15,000 workers a year who will be affected by this measure. That is no small figure.

What would it cost the government should it be unable to recover the money owed to workers? For the first year, it would cost $32 million. In the worst case scenario, it could cost up to $50 million. This is not much at all for this kind of palliative measure, which makes the delay in implementing such a measure even more questionable. It is certainly a cause for joy, and all the more so since these amounts are theoretical in the sense that the government will be able to recover some of that money. In certain situations, it will recover all the money owed, based on the value of the company.

With Bill C-55, the federal government would create a priority higher than secured creditors for workers' claims of unpaid wages and vacation pay. I will take this opportunity to mention something that was raised earlier by another member, and that is the need for more coercive or more direct measures to protect the pension funds of these workers.

Since I seem to have enough time left, I will elaborate on this issue.

Indeed, I have time to deal with the pension protection scheme. The bill also creates a mechanism. Thus, under the bill, a court would be able to authorize a proposal for bankruptcy or for an arrangement only when proof has been made—the interesting thing is that there are three very clear conditions—“that employee and employer contributions to the pension plan that had not been paid at the time of bankruptcy or receivership have been paid or that the court is satisfied that the contributions will be paid under the arrangement, or that the involved parties made an agreement”.

So, this first measure is being taken. And if these obligations were not met, the court could ask that the money in the pension plan be used in priority in the claim payment. In this way, workers would not be penalized by the bankruptcy, because their pension would be protected.

This leads me to an aspect that is not in this bill and that might very well have been. In the advent of a bankruptcy, of course, wage earners will be able to get their salary back. However, this would come to an end at some point. What is due is due. People need money to survive. However, when they do not have any income, they rely first, of course, on employment insurance, which we commonly call “unemployment insurance”. Thus, the amounts payable to wage earners should not delay the receiving of employment insurance benefits. When people have exhausted their employment insurance benefits, if they have worked beyond the age of 55, what will happen to them? They will have nothing. Will they wait for their pension?

It is during debates on this bill, that we need to be concerned about this, as the Bloc has done tirelessly. We have reminded the other parliamentarians that POWA, the program for older worker adjustment, needs to be reinstated. This program assists workers when they no longer have an income, because of their age and the fact that there are no more jobs available in the regions. This is often the case for young people, but it is even worse for older workers. This way, they would receive an income. For now, we believe that EI should be paid out of the consolidated fund. This would allow older workers to receive benefits, and therefore an income, until they are eligible for their Quebec pension, along with an adjustment. This would help them until they are eligible for the old age pension.

This program would not cost more than $50 million in the first year, for individuals who are truly unable to find other employment. At worst, in subsequent years, it would cost $75 million. So, this is peanuts for an EI budget of $16 billion.

We wonder why it is taking the government so long to implement this measure, when we know that thousands of jobs are being cut and that older workers are unable to find employment. They are appealing to programs of last resort, often without receiving anything. As a result, they are being reduced to poverty.

It would be interesting for the government to find out what happens to older workers who are unable to find a job and have no income. People say that a government is judged by how it treats its seniors and its children.

The current government would get a nice taste of reality if it examined the fate it has imposed upon older workers who are unable to find a job now and who have no income.

The last point I want to raise relates to labour unions. There is another measure we welcome. Sometimes, in very specific conditions, even before bankruptcy, it can be established that a company is in a bad situation because of circumstances over which it has no control, like foreign competition on our markets. Here, it would often be competitors from Asia. That could push a company to bankruptcy. The measure would allow the re-opening of collective agreements. In such a case, the court would have to evaluate the situation and if appropriate, there would be discussions with labour unions. Then new measures could be agreed upon and introduced.

In the case where the unions made concessions, for example, where employees would have to accept a salary reduction, as we have seen recently, the employees collectively, through their union, would also become creditors. That is another interesting provision.

Other members will undoubtedly talk about students going bankrupt. After a number of years, they should not be forced to reimburse their loans, even if they go bankrupt. When it has been established that their bankruptcy is real, they should be treated like any other citizen who goes bankrupt and their debt should be completely erased.

I will conclude on that. That is our position. There are surely a lot of other points to raise. I will try to do that while answering questions.

[Jeff Watson, Conservative, Essex, ON]

Madam Speaker, speaking of good ideas, one of the ones that was missing in Bill C-55 of course was any protection for unfunded pension liability.

The truth is that the government rushed through the legislation because it had to keep a commitment, when it had a gun to its head, to the NDP for propping them up to stay in power here. It rushed this legislation through and missed the important component that is a companion to this legislation, which is to protect workers when it comes to unfunded pension liability. Why did it neglect workers? Why did it leave them out of the legislation?

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Madam Speaker, before proceeding with my speech, I would like to put a question to the hon. member who just spoke.

On behalf of the Liberal Party, the government party, she is now applauding Bill C-55. She indicated that she had been in this place for quite a long time. This means that she is familiar with the fundamentals of the House and, I would assume, with older bills, but primarily more recent ones.

Could she tell us why, in October 2003, her party opposed a NDP motion to ensure that, starting in October 2003, wage and income protection measures would be taken to protect workers in the event of a bankruptcy? This has resulted in two years of wage protection in the event of a bankruptcy being lost.

I would like to hear the hon. member on that.

[Brenda Chamberlain, Liberal, Guelph, ON]

Madam Speaker, I really enjoyed a lot of the remarks made by the member for Kootenay—Columbia. I appreciate the support for this legislation. It is important legislation.

I rise in the House today to speak to Bill C-55, an act to establish the wage earner protection program act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make amendments to other acts. The House has witnessed much good debate on this legislation already. I know it will continue in committee should the House see fit to send the bill there, and I feel very confident that it will.

I think all in the House would agree that this is a very important piece of legislation. It is the result of extensive consultations with Canadians and stakeholders all across this great country.

The bill's four main objectives are to encourage viable but financially troubled companies to restructure as an alternative to bankruptcy, to better protect workers' claims for unpaid wages and vacation pay, to make the bankruptcy system fairer and reduce abuse, and to improve the administration of that system. These objectives offer positive changes for businesses and employees alike. This will serve to help the continued strength of our economy.

I know full well the difficulty that people experience when a company is in financial difficulty. The turmoil people personally feel is hard on them and their families. They worry about their next paycheque and what will happen if worst comes to worst and their employer shuts down. That alone is very hard on families. Then begins the task of recovering the wages that other people owe them. It is not pleasant and a task many Canadians consider far too difficult. For those who do attempt it, far too often they find, quite frankly, that they are unsuccessful.

That is one of the reasons I support this bill. We are making workers' claims for unpaid wages and vacation pay a higher priority than secured creditors' claims in bankruptcy situations. Workers will benefit from a limited superpriority for unpaid wage claims up to $2,000. The people who need it most will be given increased priority.

This legislation also establishes the wage earner protection program. The responsibility for this program will be housed under the portfolio of my colleague from southwestern Ontario, the Minister of Labour. He is very familiar with the challenges facing hard-working Canadians. Quite frankly, I cannot think of a better minister to administer this program.

The minister has indicated that an estimated 10,000 to 15,000 workers in every workplace across this country in both federal and provincial jurisdictions are left with unpaid wages or reduced pensions due to employer bankruptcies in Canada. The wage earner protection program will for the first time in history provide workers with a guaranteed payment for unpaid wages up to $3,000. This is a good thing and I am proud that the government is acting.

I also like the fact that the government will recover a portion of the cost of this program by making claims against the employer's estate, thereby making it unnecessary for an employee to do so. I know that some of my colleagues in the New Democratic Party have questioned the sufficiency of only being able to draw $3,000 in back wages. I think that is a fair question and one which should be given further consideration in committee.

The minister indicated that the $3,000 figure represented approximately 97% of the usual amount of wages lost. If the committee has a reasonable recommendation of a different amount that members can support, I look forward to giving it every consideration. From the minister's remarks in the House, I would say that he does also.

I also know that my colleagues in the NDP have questions about the limited superpriority for wage claims up to $2,000. Here again I think that the committee has work to do. The minister has indicated that there is evidence to support this figure. I think the committee should see what this evidence is and should give that serious consideration also.

Concern over their pensions is another issue that many Canadians worry about when their employer goes bankrupt. I am glad to note that Bill C-55 addresses this too. Many workers rely on their company pensions for retirement. Faced with the loss of this retirement income, many would be put into severe financial difficulty. It is just not right that the pensions of those workers are sometimes used to pay other creditors instead of being returned to those who have paid into them. The proposed reforms would improve on this situation.

One of my colleagues from the reform alliance Conservative Party was concerned that these initiatives might relocate the burden from employers to government and that these initiatives might encourage companies facing potential bankruptcies to offload responsibilities to government. The government is aware of this possibility and has taken that into account in the legislation.

We are seeking to help those employees who have faced an unfortunate and unexpected event, not to shift the burden to the taxpayer or government. If the provisions within the legislation to this end are not sufficient, I am sure that the committee will come forward with additional recommendations.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Madam Speaker, I am very pleased to rise to speak to this bill, primarily because in the 13 years that I have had the privilege of being the member for Kootenay—Columbia, I have always taken very seriously the issue of workers and people in my community who are in the labour market .

This was driven home particularly in 1993, immediately after I was elected. There was a massive bankruptcy of a very major corporation in my constituency. There were wages owed. There were very severe difficulties with pensions. I am proud to say that through the hard work of my staff and my office in Cranbrook we managed to do what was right for the workers, at least to the greatest extent possible.

I have never wavered in my commitment to the workers or to the companies and businesses in my constituency and I try to represent them as aggressively and as well as I possibly can in this chamber, but it was through that massive bankruptcy and the work we had to do on behalf of the people who had been formerly employed by the bankrupt company that I became acutely aware of some of the stories of real hardship.

It was therefore very interesting to me to be working and finding myself in a small degree of agreement with the member for Winnipeg Centre. It is very difficult for me to have any kind of very frequent connection with some of the more socialist thoughts of the NDP. NDP members have a tendency to be a bit pie in the sky; however, the member for Winnipeg Centre and I, although we have had some differences of opinion, have also found some common ground.

Certainly, the way that the NDP was proposing to handle this issue to be able to give greater protection to workers in the event of bankruptcy was not one that was possibly acceptable to my way of thinking and certainly not to my caucus or the leader of our party. So what we did was sit down together, recognizing that there was a common objective. We wanted to arrive at the same place.

We sat down. I am sure that in speeches prior to mine from members of our caucus, members have heard our very competent member of the shadow cabinet stand in his place and describe the fact that we actually formed an ad hoc committee within our caucus, under the leadership and with the direction of the leader of the Conservative Party, to try to take a look at how we could resolve this issue.

We took a look at two things on the basis of the initiative that had been brought forward by the member for Winnipeg Centre. The first was the issue of wages and the second was the issue of pensions in the event of bankruptcy. We decided that those two issues, although they appeared on the surface to be the same, were significantly different, certainly in the way in which bankruptcy could handle them.

Then, when the Minister of Labour and Housing came forward with Bill C-55, I took a very hard, independent look at the bill, along with the other members of our caucus committee, and came to the conclusion that, while the government had approached this from a different angle than we would have approached it, nonetheless there were some real grounds to be able to move forward and the nitpicking and the details could be taken care of at committee.

I note that the majority of bankruptcies occurs in sectors that employ a large number of workers who are low paid, part time, or on temporary contracts, who do not have the protection of a union. This does not mean that this bill will not be applicable to workers who are part of a union or to workers who are part of a larger corporation, but the reality is that 60% of bankruptcies occur in the retail, food and accommodation, personal services, and small manufacturing sectors. The other interesting statistic is that 70% of bankruptcies occur among businesses with fewer than 10 employees, which also tend to offer precarious conditions of employment.

The $3,000 cap ensures that the basic levels of earnings are covered. The $3,000 cap means that the amount eligible under the wage earner protection program, WEPP, would be equivalent to one month's annual industrial wage for full time workers or four weeks' maximum insurable earnings under employment insurance. The $3,000 cap is sufficient to cover virtually all wage claims due to bankruptcy because the current average claim is about $1,500 and 97% of current wage claims are under $3,000.

There will always be exceptions. I can imagine a time when, unfortunately, there may be a bankruptcy which we perhaps cannot even foresee at this particular point and someone is going to try to stuff my words back into my mouth by saying, “See, I was one of those people over $3,000”, or “See, this was a large corporation”.

Those statistics are nonetheless very meaningful statistics and we have to do legislation in the chamber that is reflective of what is going to do the most good for the most people.

I have always cautioned people, whether they are managers or whether they are people in companies that have unions or do not have unions or whatever it is; it does not make any difference. I have said that we have to be very cautious. In a bankruptcy, the reason why there is a bankruptcy is that, by definition, the liabilities exceed the assets that can be liquidated and realized against those liabilities.

In a situation where we have a company that has gone into business in good faith and has basically said that it needs a $10,000 line of credit or a $100,000 line of credit from whatever the lending institution is, the lending institution then takes a look at the covenant, the person and the assets. If the lending institution wants to protect itself against a rather large amount of money, it asks what it can do to legally attach an asset to make sure that it will be repaid. That is simply called security. The money is advanced.

This bill does not affect that money. As I have explained again and again to people who have talked to me about this issue, it is very important to understand that when we say we are going to allow wages to be taken in advance of money that could be realized from a fixed or a secured asset, we depreciate the value of that asset and therefore lower the amount of money that would be available to the company in the first place. That is a very, very important consideration.

I see my friend from the NDP shaking his head. He cannot argue with the reality. If he were a lending institution, which I am sure would be unusual for an NDP member, and he could have a $50,000 asset, he would be prepared to advance up to $30,000 on that $50,000 asset. If someone told him that wages could possibly take $10,000 or $15,000 away from that asset in the event of bankruptcy, he would have to rethink how much he would actually be prepared to advance to the company in the first place. Anything that is done to reduce the value of a security for a potential lender reduces the amount of money the lender will give to the company. There is no way around that.

Therefore, I am a little concerned about the unsecured creditors, the people who would be providing the widgets, the gaskets, the switches, the rods, the clips, the flanges, the paper or the copiers, whatever it is that is being provided to the company on an unsecured basis. For those companies, particularly if this is an ongoing business and they become concerned about the potential of the business going into bankruptcy, in regard to the availability of credit, because there can be a charge with the superpriority that is put into this legislation and the potential for there to be this charge, there is going to be some difficulty and some reticence on the part of unsecured creditors in dealing with existing businesses.

Nothing comes for free. The money has to come from somewhere and it should never come out of general revenue. This is a business venture in which people are deciding that they are going to be working for wages or working for some form of remuneration.

That said, I believe, as does my party, that there is more than sufficient merit in the bill for it to move forward at second reading. When it gets into committee, all of the details that our critics and I are concerned about can be looked at.

I think there is a sufficient spirit of cooperation in this House to see that workers are properly taken care of. We should be able to come back from committee with probably an improved bill.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Madam Speaker, I listened closely to the speech by the member for Newton—North Delta. I was pleasantly surprised by his remarks on student debt and bankruptcy by former students.

People are often prejudiced against former students. They think that declaring bankruptcy is easier for graduates than for other socio-economic groups. They also believe that students are more eager than others to get rid of their debts by declaring bankruptcy. However, as the member for Newton—North Delta said, it is not easier for graduates than for anyone else. In reality, this must be a very psychologically and emotionally difficult process.

No doubt the member for Newton—North Delta would be willing to support an amendment that the Bloc Québécois intends to move in committee on this particular aspect of Bill C-55. Why make former students wait seven years before they can discharge their student debt when declaring personal bankruptcy? This waiting period is so arbitrary, as was the ten-year waiting period set out in the previous legislation. Why not five, four or three years, or even nothing?

In keeping with its commitments in recent years, particularly those set out in its 2004 election platform, the Bloc Québécois will move an amendment in committee to eliminate this mandatory waiting period before former students can discharge their student debts during a personal bankruptcy.

I want to hear what the member for Newton—North Delta thinks about this.

[Gurmant Grewal, Conservative, Newton—North Delta, BC]

Madam Speaker, yesterday when I was talking about participating in the debate on Bill C-55 I mentioned a few changes this bill was recommending, particularly regarding employees. When an employer goes bankrupt, the wages earned by employees should be paid prior to other creditors.

I also talked about the impact on small businesses, as well as financial institutions. I also talked about locked in RRSPs not being part of the payments during bankruptcy.

Then I talked about the bill's impact on students. As members know and as the report states, the Senate banking committee recommended that student debt be eligible to be erased in a bankruptcy five years after the student completed his or her studies. In the case of hardship, the recommendation was that the court be allowed to discharge student loan debt in a period of time shorter than five years.

Bill C-55 does not go as far as the Senate committee recommendation. Instead, the government proposes amending the law to allow student loans to be eligible to be written off in a bankruptcy if a student has terminated his or her studies seven or more years ago. Also, higher student loan limits and higher tuition fees ensure that the students will continue to graduate with higher debt loads. However, many graduates find few job opportunities. If they end up seeking bankruptcy, it is a decision not taken lightly.

The Liberal government is seeking to doubly punish the students. While the Liberals allow their friends and donors to get away with repaying only 2.4% of grants to loans, they expect young people to pay 100% of the student loans. Who are they trying to punish?

I am disappointed to see that Bill C-55 neglects to offer protection to firms that are suppliers to bankrupt companies. The reality is that the bankruptcy of one company can drag down many others with it, especially when suppliers are small businesses.

The current system is unfair to workers as well as to the students. It must be changed. The Conservative Party generally supports these amendments. We will allow the bill to pass, but we will continue to seek further clarifications.

[Gurmant Grewal, Conservative, Newton—North Delta, BC]

Mr. Speaker, I am pleased to rise on behalf of the constituents of Newton—North Delta to participate in the debate on Bill C-55. I will be splitting my time with the hon. member for Kootenay—Columbia.

The bill makes many changes to the law governing bankruptcy and insolvency. The changes include the creation of the wage earner protection program act to ensure employees of bankrupt companies receive their unpaid wages in a timely manner. There is the reduction from 10 years to 7 years in the period during which a student debt may not be discharged through bankruptcy. Locked in RRSPs would no longer be part of the assets which may be taken in a bankruptcy. There are changes to encourage the restructuring of viable but financially troubled companies. Also, income trusts will now be covered.

Most of the major proposed changes are ones recommended in the report of the Senate banking committee published in November 2003. Many of the committee's recommendations, however, especially regarding consumer debt, have been watered down or not included in the bill.

In Canada every week dozens of companies declare bankruptcy and close down. There is a threat of interest rate hikes in the near future. This is bad news for indebted Canadians. Excessive borrowing by many households over the past few years suggests that they have little freedom to absorb economic shocks with higher interest rates or skyrocketing home heating costs.

A 1% jump in consumer borrowing rates would cost non-mortgage-holding Canadians an average of $35 per month and mortgage holders an average of $130 per month. These seemingly small sums could be catastrophic for today's highly leveraged households. As legislators we must keep all of this in mind as we consider changes to the nation's bankruptcy laws.

The wage earner protection program is the centrepiece of Bill C-55. The program is intended to help protect workers by providing a guaranteed payment of wages owed up to $3,000 should their employer declare bankruptcy. Right now workers' claims for unpaid wages rank after secured creditors' claims. As a result, many employees have to wait from one to three years to get a small portion of the wages owed to them, generally 13¢ per dollar on average. Under the proposed program affected workers could make their wage claim immediately and should receive their money about six weeks later.

The government has made changes to the ranking of who gets paid first to put wages ahead of secured creditors. As a result, employees will get up to $2,000 in back wages before the banks are paid.

Just last week there was a constituent in my office who had lost wages owed to him when his employer went bankrupt. Over the last couple of years with lumber mills closing in British Columbia as a consequence of the softwood lumber dispute and which the government has failed to do anything about, there have been many others who have visited my office with similar complaints.

Workers of bankrupt businesses are often the most vulnerable. They work in low wage jobs and live from paycheque to paycheque to keep a roof over their heads and food on the table. The wage earner protection program is a good idea whose time should have come long ago.

Putting workers ahead of secured creditors, however, may reduce the amount of money banks are willing to lend to businesses. In the short term this could result in an increase in the number of small business bankruptcies. Lending institutions may have to adjust lines of credit or demand loans because they feel they are undersecured. Already it is difficult for small businesses to borrow money in Canada and we know that small businesses are the engine of our economy.

If it becomes more challenging, the small businessman will either falter or they may not get off the ground. This change to the bankruptcy law would also reduce what companies can spend to buy inventory and fill orders which, ultimately, could cost more jobs.

The government estimates that the cost of this WEPP program could reach $50 million per year. Given the government's track record on managing taxpayer dollars, such as the gun registry, the HRDC boondoggle or the sponsorship scandal, it is likely that the cost will be even higher.

In its report, the Senate banking committee recommended that student debt be eligible to be erased in a bankruptcy five years after the student has completed his or her studies. This is very important because many students in Canada depend on loans to further their education. In cases of hardship, the recommendation was that the court be allowed to discharge student loan debt in a period of time shorter than five years.

Bill C-55 does not go as far as recommended by the committee. Instead, the government proposes amending the law to allow student loans to be eligible to be written off in a bankruptcy if a student has terminated his studies seven or more years ago. In cases of undue hardship, a bankrupt may apply to court to obtain a discharge of the student loans after five years.

Most trustees in bankruptcy and insolvency lawyers believe that this proposed amendment should be changed to allow student debt to be erased in the same timeframe as the other dischargeable debt; that is, when the bankrupt is discharged.

The law as it stands and the proposed amendment are discriminatory. It is also in violation of one of the major tenets of Canadian bankruptcy that an honest but unfortunate debtor deserves a fresh financial start.

Half of the students in college and university are borrowing at record levels to finance their education hoping their investment will pay off. Loans are becoming essential for many students, as soaring tuition fees make it necessary and nearly impossible for youth to afford school through summer jobs or part-time work alone.

Last year the average tuition fee in British Columbia was nearly $5,000 but few students make more than $10 an hour. On average, students graduating with bachelor degrees owe more than $20,000 in government debt, not including private loans. This year the Liberals increased student loan limits from $165 to $210 per week. Higher student loan limits and higher tuition costs ensure that students will continue to graduate with higher debt loads.

I am disappointed to see that Bill C-55 neglects to offer protection to firms as well as to students to the extent that it should be needed.

The Conservative Party generally supports some of the amendments. We will be seeking further clarification on the impact these proposed changes will have on Bill C-55 when we review the bill in committee.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, prior to the introduction of Bill C-55 there was going to be, if my memory serves me well, introduction of a private member's bill sponsored by the member for Winnipeg Centre. I think it was Bill C-281. I was prepared to support that bill, as I am prepared to support Bill C-55.

One question I have is on a point of clarification. Before I get to that let me say that I am prepared to support this bill even though there are some questions as to whether the passage of this legislation might tighten up the financing options of some small businesses. Lending institutions may feel that they are getting squeezed out of what might be a situation in which they had to recover money but are dropped in the order of preference. There may be some question as to whether lending institutions are going to be as willing to lend money to small and medium size businesses in the future.

I still think this is an important piece of legislation. It has certainly been my realization that when insolvency and bankruptcy occur, the people who, quite frankly, really get screwed are the workers. This is an important step to ensure that at least the working men and women who perhaps have worked for 25 or 30 years at a company that eventually goes bankrupt have some recompense.

My question is one of clarification and it deals with pensions. Let us assume hypothetically that someone had worked for 35 years for a company and was already receiving a pension. How will this bill deal with that? Let us assume for a moment that the individual who was in a contributory pension plan had over the course of his or her lifetime contributed close to $100,000 into a pension fund and had received, because he or she had retired a number of years earlier, $50,000 in benefits and then the company eventually went bankrupt. What steps, if any, does this legislation take to protect the pension of that individual? Exactly what rights would that person have under this legislation?

[Marlene Jennings, Liberal, Parliamentary Secretary to the Prime Minister (Canada—U.S.)]

Mr. Speaker, I am very pleased to have an opportunity to participate in the debate on this government bill.

I am pleased to speak in support of Bill C-55 which proposes a comprehensive reform to Canada's insolvency system. The bill itself, as was just mentioned, is called the wage earner protection program act.

Insolvency legislation is a critical market place framework law. It influences the assessment of credit risks. It impacts on entrepreneurship and competitiveness. Insolvency legislation also enables resources to remain productive or to be efficiently redeployed. It preserves assets and permits a fair distribution among creditors. Insolvency legislation provides a mechanism for the restructuring of debtors' financial affairs.

In past years, however, insolvency issues have been getting increased public attention. A number of high profile companies, such as Air Canada and Stelco, have used the insolvency system to restructure, attracting considerable media coverage. Stelco, for instance, is the principal owner of a company in my riding which has been affected obviously by the use of the insolvency system that we have in place.

Insolvency stakeholders, including practitioners, labour unions and even judges, have publicly talked about the impact of insolvency legislation on the Canadian economy and keep drawing attention to these issues.

I am a lawyer by training and I can remember one of the courses that I had to take in law school was bankruptcy law and insolvency. While l found it to be quite dry, it ended up being one of the courses where I got some of my best marks, so I remember a little bit of it. I will not claim to remember a lot of it. Precisely because there have been a number of high profile companies that have used the insolvency system that we have here in Canada and because we have had stakeholders who have talked publicly about the impact that this legislation or our existing framework has on the Canadian economy, I have tried to educate myself a little bit more about it and try to remember some of what I learned in law school.

Indeed, business insolvencies have a sizable economic impact. Approximately 12,000 businesses use the Bankruptcy and Insolvency Act annually. This includes bankruptcies and proposals. Another 50 cases proceed under the Companies' Creditors Arrangement Act, CCAA. While smaller in number, the cases under CCAA typically involve large, publicly traded companies. The impact of insolvency proceedings are always significant for those involved whether it be shareholders, business partners, suppliers, customers, lending institutions and of course, the workers, the employees of those very companies that embark on insolvency proceedings.

There have been reforms in 1992 and again in 1997, but despite these reforms there is a broad consensus that another round of reform is required. The government needs to ensure that our insolvency system responds to the needs of the work market place and provides the necessary protection to those who are adversely affected by bankruptcy, namely, the workers.

At the forefront of Bill C-55 is a clear recognition on the part of the government that the present insolvency system lacks an effective way to protect workers whose employers go bankrupt.

The wage earner protection program act established by Bill C-55 would remedy this problem. It would ensure that workers receive compensation for the wages owed and the vacation earned but not paid, up to a maximum of $3,000 per worker. This program would ensure that these amounts are paid in a timely manner and are not dependent on whether or not there are sufficient assets in the bankrupt estate.

Under the current system, Canadian workers have to wait, possibly as long as three years, until the insolvency proceeding is completed and those with secured assets or interests have been fully paid prior to the workers receiving the pay that they have earned and for the vacations that they have earned but had not yet taken, and even then in most cases they wind up being paid only a fraction of the wages owed to them.

In fact, under the current system, three-quarters of workers receive nothing when their employer goes bankrupt. On average, those who do receive something under the insolvency proceedings, once the secured interests have been paid, that is, the creditors who have secured interests under the current law, only 13¢ on the dollar is left to pay the workers. That is it. For every dollar the workers are owed, if they are lucky they receive 13¢, but three-quarters of them receive zip, zero, nada, niente. If there are any other languages that someone in the House knows to say “nothing”, use it, because that is what the workers receive.

Often the most vulnerable workers are adversely affected. They are frequently in low wage jobs in small companies in sales, services and the construction industry. That is simply not fair. If there is one thing that Canadians pride themselves on, and if there is one thing that most if not all members of Parliament in this House pride themselves on, it is trying to be fair. We try to be fair when we review legislation to ensure that it is reasonable, justified, and that it actually does achieve most of the benefits that it is supposed to.

These workers never agreed to be creditors to their employers. They agreed to do a job for x number of hours for a specific amount of pay and to receive certain benefits, and if they maintained their side of the bargain, the employer had a condition and a bargain to pay them. Unfortunately, when companies go bankrupt, three-quarters of the workers receive nothing.

It is not part of the workers' contracts where they agree that if their company or employer goes bankrupt, they will be creditors for whatever wages or vacations they have earned and are owed. They did not sign a contract like that, so it is not fair that they should have to stand at the back of the line in order to get paid. Why should they run the risk of coming up empty-handed? They are not secured creditors. That is not part of the contract that they sign with their employer.

It is precisely for those reasons, among others, that the government has tabled Bill C-55, the establishment of the wage earner protection program act. It is about fairness and about helping Canada's most vulnerable workers. Bill C-55 will ensure that workers get their wages quickly when they most need them.

Under the proposed legislation, affected workers will be able to make their wage claim right away and should receive their money about six weeks later. That will be good news for these workers.

Another important step taken in Bill C-55 is to address the concerns over the lack of predictability and consistency in the application of the insolvency law, specifically the Companies' Creditors Arrangement Act. The CCAA has very few rules and has primarily evolved through judge made law.

I am sure that the Conservatives will be very happy to hear this, because they are always talking about judicial activism and that law making and rule making should be up to the elected officials and the House. I am sure they will be in agreement that there is a pressing need for increased legislative guidance so as to ensure that all players in the insolvency context are equipped to defend their interests.

The international insolvency context has also evolved in the last decade. An increasing number of Canadian companies have U.S. subsidiaries. They have significant assets in the U.S. and important U.S. creditors. More Canadian companies are filing currently under chapter 11 of the U.S. bankruptcy code as cross-border insolvencies are becoming more frequent.

However, there have been some companies that have filed primarily under chapter 11. This raises no policy issue if it is the result of a business decision by the company. The decision to file primarily under chapter 11 of the U.S. bankruptcy code should not be because there are gaps in the Canadian insolvency system. With Bill C-55 the government wishes to ensure that our insolvency system reflects the needs and reality of the Canadian marketplace. It seeks to ensure that our system is equipped to deal effectively with complex cases.

In conclusion, the reform of the Canadian insolvency legislation proposed in Bill C-55 is comprehensive and balanced. I believe it clearly serves Canadian interests. I would urge all members of the House to support Bill C-55 and to allow its reference to committee as quickly as possible.

[Jim Prentice, Conservative, Calgary North Centre, AB]

Mr. Speaker, it is my privilege to rise and speak today to Bill C-55, the wage earner protection program act, which is before the House. I will be speaking generally in favour of the concept underlying the legislation while taking issue with some of the specifics which form part of the government's proposal.

I would like to acknowledge the work of a number of members of the House. First, the member for Winnipeg Centre did a great deal of work in terms of putting Bill C-281 before the House. I have worked with this member very closely. We do not always agree on issues, but I do respect the philosophy with which he has brought this matter forward and the private member's bill that he brought is a precursor to Bill C-55.

I would also like to acknowledge the hard work of the member for Edmonton—Leduc who is our critic in this area. He has worked very diligently, has examined this very complex legislation, and has led the Conservative Party in its very able response to the legislation. The member for Souris—Moose Mountain, our labour critic, has also worked with him and similarly been responsible for the carriage of this legislation.

My comments follow those of the member for Vancouver Island North. It is worth pointing out that he has been a very outspoken advocate on behalf of working Canadians and the protection of working Canadians under this legislation. He served on the subcommittee of the Conservative shadow cabinet which brought this concept to the House earlier this year in May.

There is some unanimity in the House in terms of the spirit which underlies this legislation, but there are important differences between the way the Conservative Party and the government has approached this issue. I wish to draw the attention of the House to the May 3 motion which was put before the House of Commons. It read:

That, in the opinion of the House, immediate steps be taken to amend the Employment Insurance Act to provide for the establishment of a workers' protection fund that is funded and administered under the Employment Insurance Act to protect workers wages, medical and dental premiums, and severance payments to an amount of $5,000 per employee in the event of a business bankruptcy or insolvency.

Herein lies the genesis or the concept behind Bill C-55, but there are important differences between the Conservative position and that of the government which I will underscore in my comments this afternoon.

Generally speaking, I favour the wage earner protection program aspects of Bill C-55 and I will direct my comments exclusively to those provisions of the legislation. There are equally complicated provisions that deal with other aspects of the Bankruptcy Act. I will not be turning my mind to those today. The wage earner protection program features of this legislation are quite important because they provide protection for everyday working Canadians who find themselves caught up in the nightmare of a bankruptcy or an insolvency or a creditor protection scheme.

This is a matter that I have some experience with on a personal basis. In my own family, I recall being a young lawyer many, many years ago and my mother, who was an employee of a company called the Betty Shop, found her employer to be in a state of bankruptcy and insolvency. I remember how difficult it was for her when she discovered that she had absolutely no protection or priority as a wage earner. That company went bankrupt and it was my mother who was out of pocket with her wages because there was no government program to cover the company. She had absolutely no security under the Bankruptcy Act. That was 15 to 20 years ago, so I am pleased to stand here today on behalf of her and other working Canadians who find themselves in similar circumstances.

It is important that the House is drawing together to protect working Canadians, so that they do not suffer those kinds of losses in the event of a bankruptcy.

It is important that the matter proceed to committee and that the committee conduct a very diligent and searching review of the legislation that is in front of the House. Bill C-55 is quite complex and detailed in terms of the priority regime that it creates and the legislative balance that it strikes.

It is important that the committee hear from people in the legal and banking professions and the labour unions to make sure that the appropriate balance is struck with the legislation, because it is a question of balance. It is a question of striking a balance between protecting wage earners on the one hand and making sure on the other that we do not disrupt the balance which is at the heart of creditor relationships in the country. This is something I know in particular the member for Edmonton—Leduc and the member for Souris—Moose Mountain have spoken about but it requires some emphasis.

The priority scheme in the event of a bankruptcy is extremely complicated. It strikes a delicate balance between those who work in businesses and those who finance businesses. We must be very careful with this legislation that we do not disrupt that balance, because the ultimate losers will be working Canadians. It will be working Canadians at the end of the day who will suffer the consequences if it becomes more difficult to finance a business.

No one should think that by according superpriority status to one category of claims, in this case past wage earning claims, somehow it will be simply the secured creditors, the banks, who accept that loss. In fact, the way it works in the law of the business world is that the banks and other secured creditors will make darned sure that they have adequate security ahead of time. They will simply add the wage claims to the security which they seek which will make it harder for people to finance businesses. Essentially it will add to the equity that business people need before they can finance a business, because there will have to be adequate equity ahead of the other business assets to protect the banks. We have to be very careful of the balance which is struck.

There is one thing I am puzzled by. The motion that the Conservative Party put forward linked the employment wage protection, which is so important, and the Conservative Party specified an amount of $5,000 per person, not the $3,000 suggested by the government, but it linked it equally importantly to the Employment Insurance Act by ensuring that those claims would be paid from the employment insurance system. The government in a sense would guarantee wage earner claims in the event of a bankruptcy, up to the amount of $5,000 and it would be covered out of the premiums that had been paid by employers and employees to the employment insurance fund.

What the government is proposing is something that is in fact quite different from that. First, the protection is offered only up to the level of $3,000 per employee, which is much less generous than what had been proposed by the Conservative Party, much less protective of working class Canadians. Second, there is this very puzzling feature such that the money which is paid out under Bill C-55, the $3,000, can then be recovered by the government from the bankrupt estate, yet it can only be recovered in the sum of $2,000. This is very puzzling. I hope that the committee has a look at this.

I do not know why we would put forward a legislated system that compensates wage earners for $3,000, yet allows the government to pursue recompense or security protection only to the tune of $2,000. That simply makes no sense. There is no reason that the Government of Canada, if it is protecting wage earners and being subrogated in its position, should not have the position to step forward and seek full recompense for the amount of $3,000.

There are other features of the legislation which I think are sensible. One concern that we must have in looking at the legislation is whether it puts forward a government system which simply involves more government. I do not find that in the legislation.

I note there are extensive responsibilities in clause 21 which have been imposed on the bankruptcy trustee and receiver. It is their responsibility to police the system, to make sure they have identified the claim, determined the amount of wages, informed the individuals and provided the minister with the report. There is also a sunset provision relating to this aspect of the legislation. From the way it will work, I do not think it will necessarily produce more government in this country, but it will provide protection for working Canadians up to the sum of $3,000 in principal. That is something we support as Conservatives, although we would have sought legislation which provided even greater protection for Canadians.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, I thank my colleague the hon. member for Vancouver Island North for this excellent speech.

However, there is one element of Bill C-55 which he did not address. This concerns students faced with bankruptcy. Bill C-55 proposes a change to the rules governing the bankruptcy of former students, since at present the Bankruptcy and Insolvency Act says that persons reduced to bankruptcy cannot be discharged from a student debt if they are still at school or if they finished their studies less than 10 years previously. Bill C-55 would bring that period down to seven years.

The Bloc Québécois has for a very long time been committed, although more formally in its 2004 election platform, to abolishing the waiting period during which students cannot be released from their debts through bankruptcy. We believe that there are prejudices that cause certain persons to believe that it is easy to declare bankruptcy, even though we know that a judge has to rule on that question, and normally a judge would dismiss any far-fetched applications. There are also prejudices which hold that students are more inclined than other social groups to try and shirk their commitments, such as student debt. Yet no study has ever proven this.

Furthermore, the change from ten years to seven is very arbitrary. This bill speaks of seven years, but it could well be five. And why not four? Why not three? While we are at it, why not zero? So the Bloc Québécois could be expected to submit an amendment in committee to abolish this waiting period before students can include their education debts in a bankruptcy.

The hon. member from the Conservative Party said that all the parties here present have their hearts in the right place in terms of wanting to defend wage earners. Former students are also wage earners. I was wondering if the party represented by the hon. member for Vancouver Island North would forget about these prejudices and support the Bloc Québécois amendment that will be submitted in committee.

[John Duncan, Conservative, Vancouver Island North, BC]

Mr. Speaker, I think this has been a good day with a good set of debates on Bill C-55, which is an act to establish the wage earner protection program act and also to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act, and to make consequential amendments to other acts.

Amazingly, we actually have a consensus from all parties in the House of Commons that we need legislation in this area. This bodes well for the fact that we have people who go to work every day and expect to be paid for their day's wages. Very often their medical and dental premiums are covered as part of that package. They will have other benefits paid for and so on.

Lo and behold, I think all of us in this place represent large enough constituencies such that over and over again we have seen instances where this does not occur. In some cases it leads not only to devastating personal circumstances, but on a very large scale it can affect whole communities where those communities are tied largely to one employer.

I certainly have that circumstance in my riding, along with the unhappy circumstance that the employer ended in insolvency. There was a restructuring, which also ended in insolvency, and we are now into another restructuring exercise which we are hopeful will conclude successfully. This community, the community of Port Alice, with its specialty cellulose mill, has been through a lot over the last couple of years and that has demonstrated the shortcomings of the status quo in terms of how workers' earnings protections are handled.

Bill C-281, the private member's bill from the NDP member for Winnipeg Centre, promoted an initiative in this place for all parties to get their act together in terms of doing something about this matter, which resulted in Bill C-55.

If one were to take a look at Bill C-55, it would be hard not to agree with the thrust of Bill C-55 and not hard to disagree with some of its details, because this is an area that is quite complex. For example, any attempt to try to change the creditor priority can have a positive effect on one party and a negative effect on another party and sometimes can be counterproductive for both parties. In order for me to explain that, I will probably have to give an example, but it does point out why we need to hold hearings on the issue. It is a complex area of law.

The bill is important to many people and consistent with the fact that I have a large union-certified membership in my riding. I have taken an active interest in these kinds of issues in my 12 years representing that area.

I joined the shadow cabinet subcommittee, which we put together as the Conservative caucus, to develop and propose a wage earner protection fund in the case of a bankruptcy. On May 3, 2005 the Conservative shadow cabinet approved a comprehensive proposal that would be funded through the Employment Insurance Act. Consistent with this report, the Conservative caucus tabled a motion in the House of Commons which reads:

That, in the opinion of the House, immediate steps be taken to amend the Employment Insurance Act to provide for the establishment of a workers' protection fund that is funded and administered under the Employment Insurance Act to protect workers wages, medical and dental premiums, and severance payments to an amount of $5,000 per employee in the event of a business bankruptcy or insolvency.

This demonstrates our direction and intent at that point. On June 3, one month later, the government tabled a bill to establish a wage earner protection program. The government's bill would create a fund which would pay laid off employees up to $3,000 per employee in lost wages. The NDP proposed a similar program, of course, in Bill C-281 that gives super priority to workers in the event of a bankruptcy.

The difficulty we would have in the example that I have quoted, which was the Port Alice cellulose mill with something like what is proposed in Bill C-281, is the fact that the level of assets would be the determinant of how much an employee would receive and this would also be almost certain to result in a long wait for the employee to receive anything.

This is why the direction that Bill C-55 takes, in that specific area of the bill, is actually better because payment would be more quickly achieved. There is no time that is more appropriate for employees to receive their paycheques than when they were expecting them or very shortly thereafter.

The assets were being run down on a monthly basis and at the end of May, the 330 or so employees at the cellulose mill would have had a payout much less than $3,000 per employee. That is another way that Bill C-55 does have some improvements over the private member's bill first enunciated as Bill C-281.

However, we need to look at this in a broad way. I think all of the parties have their hearts in the right place in terms of trying to protect the workforce from employers that have, in some cases, actually gone out of their way to hide from them the fact that they have not been paying into things like their medical and dental premiums.

There was even the case, in the situation I was talking about, where a family support garnishee program had been shorted. In other words, the payments had not been forwarded. That employee was in trouble not just from a financial standpoint in not receiving wages and benefits but owed a payment through the courts that should have been automatic.

These are some of the wrinkles that can occur. We have to avoid an incentive to drive businesses having difficulties into early insolvency in order to keep the asset base up. That occurs as well.

Wage Earner Protection Program

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to speak to a very important issue. Bill C-55 is critical. For the first time we have legislation before us that would allow workers to be put on the top of the heap as opposed to on the bottom of the heap when bankruptcy happens.

I can speak from personal experience. My brother worked for years at a plastics company here in Canada. He was a very diligent worker who went to work every single day. He made sure he made his contributions to the union, to his pension, and to the United Way. The company declared bankruptcy and went to the United States. The company not only took the workers' wages, but it also took their pensions.

It is very important to note that pensions are a deferred wage. They are a negotiated settlement among the workers, management and owners of a company. Pensions are deferred wages. They are important not only to the workers but also to our society. Pension earnings are a requirement for seniors in their lives after they have finished working. They are wages owed to them through their own planning and through arrangements made with management and the company. Those pensions belong to them. It is important to note that. This is missing from Bill C-55 and it is something our party is going to work on.

The company where my brother worked took the pension money. It also took the United Way money that the workers had contributed. It literally robbed the community of the contributions which the workers had made for the benefit of others.

The United Way in my community has had the highest donation per worker for a number of years. The money provides a full range of programs and services for people in need. I commend the executive director of our United Way, Sheila Wisdom. We have been challenged lately because many jobs have been lost in the auto industry and we have had to make sure that the United Way campaign expands into other groups and organizations.

We do not need companies leaving and taking money that workers have contributed toward their pensions. Sadly enough, Bill C-55 does not yet address this issue.

I want to continue the discussion with regard to students declaring bankruptcy. It is unconscionable that students have to wait 10 years to declare bankruptcy. We have witnessed a very significant escalation in tuition costs across the country, as well as other costs associated with going to school, such as apartment rentals, books, or other supports. Those costs have all gone up significantly and as a result, students have gone into more debt.

Young people have to be trained. People going back to college or university have to invest a lot of money in training, and they can accumulate a lot of debt as a result. With the record the students have with respect to repayment of their loans, they have earned the right to be treated better rather than being chastised at the 10 year limit. That is unacceptable.

As this crisis continues in terms of the educational system needing the necessary funds to run the programs, the training and the degree of technological improvements that are so important to compete in the world, people are increasingly being put into debt when they exit school and pursue their careers.

Some people are going to school later in life. They are not able to earn the necessary wages to pay off the debt. This also delays the start of families, which is a very important issue. Canadians are having children later in life. We need to put supports in place to avoid that. It is important that Bill C-55 address this problem.

I look forward to seeing amendments to this legislation. I am still not satisfied with the seven years. That can be improved.

I would like to note one of the other important issues related to this. It is the fact that as I started my speech this evening it is the first time ever that there is some mechanism whereby workers are at the front of the line, through the fact that they get $3,000 back in wages. That is very important. When a company goes bankrupt, for whatever reason, whether it is mismanagement or good management and the market conditions change, people lose their employment and do not have an opportunity to plan appropriately.

Three thousand dollars is a mere pittance. People cannot get by on that for very long, but at least it is something immediate that people can get. It will provide some sense of stability for them and their families as they look for employment transitions. That is important.

What I cannot understand about the legislation, though, is that the government will then try to get only $2,000 back. Why would it only go back for $2,000, not $3,000, from the company after insolvency? I do not understand that logic. I do not know why it would not, on behalf of taxpayers, try to recover the full amount. This should be looked at for sure.

The member for Winnipeg Centre has worked very hard on his private member's legislation on these matters, Bill C-281, which is much better than this bill, but this bill does have some elements of his. I want to recognize the fact that he has been able to push the debate on the matter this far and get Bill C-55 some attention because there has been a reaction. I am a member of the industry committee, where Bill C-281 has actually been sitting for a while. If we do not get to that bill right away, we will be looking at Bill C-55 as well. It at least encourages some modest improvements.

The member for Winnipeg Centre should be acknowledged for bringing this issue to the forefront far sooner than many expected. He has done similar work on the oil and gas industry with progressive legislation and also with a series of other bills. I want to acknowledge that and the pension issue, which I think definitely needs to be expanded upon.

Also important is the fact that the bill is going to take away a procedure that right now allows a judge, on a whim, to basically throw out a collective agreement between a company and a union. That is an atrocious abuse of an agreement collectively negotiated between a company and a union. The bill will require dialogue, and that was the spirit when this was originally dreamed up in the 1930s: that there would be some actual collective working together at the table before the judge would make some type of arbitrary decision in regard to anyone. This is important because the deals negotiated in terms of pensions, wages, benefits and all of those things come out of good faith negotiations.

Let me note that this is what should be happening with the CBC right now. The lockout should end. People should be back working together to make sure that they actually have a good agreement.

So that dialogue is what the judge will be doing in this new agreement. That is very important because it also, I believe, will create a healthier environment for the future.

We also want to note that it will be very important to change the legislation in regard to the $200,000 tax debt no longer being eligible for automatic discharge. It is something that could be abusive. We think this would be an important change to the legislation.

Last, I want to touch on the Radwanski example of the loophole that is finally going to be closed. It is unconscionable that an individual in our society can get hundreds of thousands of dollars of tax relief and then one day later receive a job for a quarter of a million dollars a year. That is unacceptable. This change is a very important one, because that was an absolute abuse of the people who get up and go to work every single day just to make a living.

(Bill S-31. On the Order: Government Orders)

June 22, 2005 — The Minister of Transport — Second reading, report stage and third reading of Bill S-31, An Act to authorize the construction and maintenance of a bridge over the St. Lawrence River and a bridge over the Beauharnois Canal for the purpose of completing Highway 30.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, I would like to thank my colleague from the NDP for having made this presentation on Bill C-55.

Regarding students faced with bankruptcy, I understand as well that he is very sensitive to their debt problems. Bill C-55 proposes a major change to the rules governing this debt.

At present, the Bankruptcy and Insolvency Act provides that people who go bankrupt cannot be discharged from their student debt before ten years have passed. Bill C-55 would reduce this period from ten to seven years.

The Bloc Québécois has been trying for a very long time, and more formally in its election platform of 2004, to abolish this waiting period. It is a period based on prejudice. The first is that it is easy to go bankrupt. We know, however, that a judge must normally make a ruling and reject frivolous requests. This waiting period is also based on the belief that students are more inclined than any other social group to want to go bankrupt in order to rid themselves of their student debt and start over. Well, there are no studies that show this.

The change from ten to seven years seems rather strange to us. It is very arbitrary. Why seven years? Why not six or five years? While we are at it, why not just make former students citizens like everyone else and state that all their debts are included when they go bankrupt?

Obviously the Bloc will propose an amendment in committee. I would like to know what the NDP member thinks in this regard. Will he support the Bloc amendment?

[Lynne Yelich, Conservative, Blackstrap, SK]

Mr. Speaker, I noticed the member spoke about student loans. Right now the current legislation says that an individual can apply for discharge 10 years after he or she ceases to be a student. Bill C-55 talks about applying a discharge after seven years and allowing a hardship discharge after five years. I noticed Bill C-281 does not cover it. I am just wondering whether the member supports the discharge clause.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I will be splitting my time with the member for Windsor West.

I am very happy to bring forward discussion on Bill C-55 today, the first part of the NDP's plan to address the issue of workers' wages in the event of bankruptcies. I will come back to that in a moment.

Bill C-55 is in large part a result of the NDP's negotiation for a better balanced budget last spring where we saw for the first time in some time a federal budget that actually responded to the needs of ordinary Canadians from coast to coast to coast. Part of our agenda has been wage protection. The other part of our agenda is pension protection. I have to flag the member for Winnipeg Centre's Bill C-281 which would protect pensions in the event of bankruptcy. We need to see is both wage protection and pension protection. We are happy to see that initial addressing of the NDP's concern, which we have had for some time, in Bill C-55.

Ordinary Canadians are having a harder and harder time of it. Over the past 15 years most Canadian family incomes have eroded. Lower income Canadians, working Canadians, Canadians in the middle class have lost 5% to 10% in real terms in family income over the past 15 years. That is the unfortunate legacy of both the Conservative government and the current Liberal government. Over this 15 year period Canadians are having a harder and harder time of it. Real income has declined at the same time as we have seen overtime charges and longer and longer working weeks. It is skyrocketing up to 33%. Canadian families are working harder and harder for less and less. They are working longer and longer weeks for smaller and smaller real income.

In addition, they have had no protection in the event of bankruptcies. That is why the NDP caucus pushed very hard last spring to change the budget to eliminate the corporate income tax cuts put forward by the Liberal government and to put in place wage earner protection. We will be working equally hard to put in place pension protection.

I would like to briefly work through the four key elements of the bill, most of which we support and some of which needs to be modified. We are hoping in committee to push forward those amendments. These are the kinds of changes that will help make a difference on the main streets of the country, from coast to coast to coast. We have seen Bay Street receive a lot of attention over the last 10 or 15 years. Now it is main street's turn. As a result of pushing forward these amendments, we hope to make Bill C-55 better.

First let us talk about the key elements. I would like to address the issue of the threshold of $3,000 that would go to wage earners in the event of bankruptcy. That is an important first step in addressing workers' concerns in the event of bankruptcies. We have 10,000 bankruptcies a year in our country. We need to ensure that workers are protected. However, we believe the $3,000 threshold is not high enough to address the valid concerns that come out of bankruptcies and how workers are impacted.

We have seen a couple of elements that are very positive. For example, the change that does not allow judges to arbitrarily change collective agreements any more is an important step in recognizing collective bargaining rights. Now we finally have union and management sitting down and if there is mutual agreement to make changes through a collective bargaining process, that may take place. It is not to be imposed by an outside judge. It is not to be imposed on the workers. That is a important key improvement in Bill C-55.

We also are strongly in support of closing the loopholes that we have seen in the tax system, particularly for wealthy Canadians.

We saw with the George Radwanski affair where a wealthy civil servant started a new job at $230,000 a year and saw back taxes of $630,000 basically rubbed out with the stroke of a pen. It is a type of income tax system where ordinary Canadians are paying their taxes, ensuring that their responsibility to their community and country is kept. Yet wealthier Canadians have had the option to simply have their back taxes written off, even in the case of somebody like Mr. Radwanski who was starting a job which paid almost a quarter of a million dollars a year. It is very important that we close this loophole.

We in the NDP have been fighting the types of loopholes that exist. The member for Winnipeg Centre has been one of the strongest proponents in this regard. We need a tax system that is fair to all Canadians, where all Canadians pay their fair share. That is our collective wealth and our collective resources to deal with things like our health care system, to help support new child care programs, to help support working families. It is extremely important that we do not have these loopholes. It is extremely important that we not allow certain wealthy individuals to get off from paying taxes that they owe to the nation, to our country, to all Canadians.

We are certainly in favour of these key elements. There are other elements as I mentioned that need to be addressed in committee. As we adopt this bill in principle and send it to committee, we need to pay particular attention to these key issues, such as the threshold which I mentioned is too low, and particularly the elements affecting students.

What we are saying right now with the current bill, if there are no amendments, is that a student who undertakes student debt because of the current chaos in the post-secondary education funding in the country is chained to that debt for a 10 year period. Yet we know that inadequate funding for post-secondary education and inadequate supports for students across the country have led to the debt crisis among students. Many students have had no other option because there has not been the support in place for post-secondary education.

Our post-secondary critic, the member for Halifax, has been front and centre in this regard, pushing forward an agenda that meets the needs of students. We need to make sure that this bill does not handcuff students and does not treat them differently from how other Canadians are treated in the event of bankruptcy.

Still, it is important that certain elements of this legislation be adopted. We know full well that workers all over Canada have been suffering for the last 15 years because of policies put in place by this Liberal government and the Conservative government that came before it. Indeed, family incomes were reduced by 5 to 10%. A majority of Canadians have been hit.

It is important that we amend the Bankruptcy and Insolvency Act in order to help workers who lost their job because their company went bankrupt. This is what the NDP tried to negotiate last spring.

First, we want to deal with the issue of the money owed by these businesses to their employees. Second, with Bill C-281, we want to deal also with pensions lost because of the bankruptcy of businesses. The NDP member for Winnipeg Centre raises the issue of pensions and the CPP and the fact that we must protect the pensions of workers. This is the second aspect of the proposal that the NDP will make to this Parliament.

Consequently, we support Bill C-55, at first, in principle, so that, later on, in committee, we can improve it and ensure that it better protects the interests of all Canadians.

Wage Earner Protection Program Act

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, it is estimated that some 10,000 to 15,000 employees each year in both federal and provincial jurisdictions receive no unpaid wages as a result of the bankruptcy or insolvency of the companies or organizations that they have worked for.

This is an issue where I think Canadians would agree that the security status of employees who have made a company work may not be able to survive very well without having received wages owing. We must consider that a company that is imminently coming into some difficulty and the period during which wages would be unpaid is not necessarily since the last regular paycheque. It may in fact be an extended period. There could be a substantial amount of money involved.

I also understand that for those who do receive moneys, the average payout is about 13¢ on the dollar. Having said that, there is no question that Bill C-55 is an important bill. I hope the bill will have the support of the House following the rigorous review and consultation by the standing committee.

Bill C-55 is entitled an act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts. Most people will know what we are talking about in terms wage protection. They will also probably have a general idea about bankruptcy and insolvency. Most Canadians have heard these terms.

One piece of legislation people may not be familiar with is the Companies' Creditors Arrangement Act. It is a vehicle that has been around for a long time. As a matter of fact, before I became a member of Parliament I practised as a chartered accountant. I actually was involved with a company that went under the Companies' Creditors Arrangement Act. I thought I would very briefly explain what that means.

A company which gets into some difficulty and would otherwise be petitioned into bankruptcy by a creditor, such as a bank or a bondholder or whatever, has an opportunity under the CCAA to petition the courts to freeze the operations, as it were, in terms of its financial obligations. This provision gives them some time to come up with a plan to make a settlement with all of the outstanding creditors.

The courts would appoint a trustee to go in and takeover the operations and management of the company. In my experience, the most effective way in which trustees do that is they seize control of the bank account.

Following the appointment of the trustee, the interesting difference between bankruptcy and going under the Companies' Creditors Arrangement Act is that the company is allowed to continue to operate and that all persons and businesses who continue to be suppliers of goods and services to the company have preferred or first status in terms of payment. They will be paid. They are guaranteed to be paid, even though they may be owed other moneys leading up to the date under which they made the petition under the Companies' Creditors Arrangement Act.

That is an extremely popular and very important act because it does give companies an opportunity to survive once they can get some relief from the existing creditors which they may not otherwise be able to deal with. Very often a plan is put together which proposes certain details as to all the outstanding creditors and how much they will receive and be paid through the trustee. Then the business would carry on.

The whole proposal, though, is subject to the approval of all the creditors before the courts. As long as all of them agree to the proposal of the company, then the various creditors would take the settlements that they are entitled to and the company would carry on under the restructured basis. That may involve, as some refer to it, taking a haircut for the bondholders. There may be a moratorium on assets or forgiveness, or there may in fact simply be the same distribution of some percentage on the dollars. However, the livelihood of the business could in fact survive.

From what I have heard in the debate so far, I am please there is support here. I want to briefly remind the House of the elements. It is a very long bill but I think members will understand that it is important to establish a program like this and make the necessary amendments both to the Bankruptcy and Insolvency Act and to the Companies' Creditors Arrangement Act which takes a great deal of integration of the existing and proposed laws.

The enactment not only deals with those who are owed wages by employers who are bankrupt or subject to receivership, but it also sets out the conditions for the eligibility for payment. It is the process for the program and the administration arrangements for the implementation and enforcement mechanism. It also provides regulation making powers for carrying out the purposes of the act and provides for a review of the act within five years. I think this is very important.

From time to time I have seen legislation come before the House that does not provide for a periodic review to be done. I am hoping this becomes a regular feature of legislation. We need to ensure that it is kept up to date and that it happens on an automatic basis rather than at the discretion of the government of the day.

The bill also contains amendments to the Bankruptcy and Insolvency Act. Those amendments include changes to the appointment and oversight functions of the Superintendent of Bankruptcy, as well as the obligations and amendments. They also expand the act to cover income trusts which is certainly a current topic of interest to many Canadians.

New corporate proposals have been created to address, among other things, the treatment of contracts and collective agreements which is important. It would provide the authority to amend the term of collective agreements. Other proposals are interim financing and governance arrangements and changes are made to the priority of charges, including with respect to wages and pension contributions, which are basic parts of the wage protection program.

The scope and application of consumer proposals is expanded. New provisions have been introduced to deal with bankruptcies, protecting retirement savings plans from seizure and to allow for the automatic discharge of second time bankrupts which is a matter that comes up from time to time.

The period of eligibility of discharge of student debt is reduced and members have addressed this area of concern. As I had indicated in my question to the member, part of the comment was that 95% of students pay their loans on time.

There are changes in the treatment of preferences, as well as other numerous technical changes.

As I indicated, there are amendments to the Companies' Creditors Arrangement Act. This is slightly different. They are to the same effect as the changes to the Bankruptcy and Insolvency Act. The amendments also expand the act to cover income trusts. I note again that the issue is being dealt with.

The scope and application of the initial stay is clarified, as I explained, and the nature of petition under this act. We have introduced new provisions regarding the treatment of contracts, collective agreements, interim financing and governance arrangements.

As members of the House can see, there are substantive issues and areas that are being dealt with to ensure that the bill is balanced and fair.

I had an opportunity to follow the debate earlier and I noted some of the points that were made by other members. I heard points that I did not know so I thought I could perhaps share them with members.

It is a matter of how these reforms will improve the protection to workers whose employers undergo restructuring or become bankrupt. As I indicated earlier, some 10,000 to 15,000 employees each year find that they receive nothing when something like this happens. That is not just with regard to their wages. It also may affect their pension benefits. In many cases there are horror stories where pensions have accumulated significant unfunded liabilities as a consequence of the failing business and its inability to meet its current obligations with regard to discharging an unfunded liability under pension plans.

Under our current system, three-quarters of unpaid workers in a bankruptcy receive nothing for their work. It is really interesting. The average payout was only $13 and the existing federal-provincial labour laws protect the workers who perform work but are not paid by their employers. However these labour laws cease to be in effect when bankruptcy or receivership occurs so they fall through the cracks, which is why it is important that this bill be here.

The program obviously has to operate efficiently and there will be a significant cost in doing that. It is estimated that it will cost about $30 million a year. In the event that we spike in terms of the total number of bankruptcies, that could increase to about $50 million. This is not an insignificant expenditure or contingency for the Government of Canada to protect these but it is important that the moneys be provided quickly to the employees so that they at least have some continuity while, hopefully, under the Companies' Creditors Arrangement Act, a deal would be struck with the existing creditors and their jobs may in fact be secure.

In the event of bankruptcy I do not think anybody wins but the lawyers and that is probably too bad. However it is a very substantial investment and it is important to protect the workers to the greatest extent possible.

There is an expectation that there will be a recovery of about half of those costs once arrangements are made with the creditors and payouts are made. Under the wage earner protection program, the government will assume the workers' claims against the bankrupt employer's estate so that the employee will somehow be represented in this process by the government being the spokesperson or the intermediary in this process.

The point was made that the limited superiority for unpaid wages balances the risk of bankruptcy between employers and other creditors of the bankrupt company. As I raised with the member from Coquihalla, there probably is a question that the committee should consider because there is a limit on the amounts that can be paid to employees of some $3,000. I am aware of the case that I was involved in where wages were unpaid for some time. It was not that we had a paycheque last week, two weeks ago or last month. It could be for an extended period where the employees are basically told that the company is trying to survive, that it cannot pay them now but that they should hang in there. However those are legitimate wages and I know there has to be some balance.

I am not sure what the current thinking would be and certainly the mark of the industry with regard to how much protection can be provided without impinging on the preferred or the fully secured status of bondholders who put the money up front and who in fact may very well be represented by someone's RRSP client or their investment in an organization that has provided funding. There are other parties that are directly or indirectly involved, so that if there is a loss, the money is neither created or destroyed, it just changes hands. In this regard there may have to be some offsets.

However if we were to have a serious impingement upon the security level that a first secured bondholder may have, if the laws indicated that they would be subrogated to unpaid wages for a much larger amount or something like this, the capital providers, those who provide the bonds to the company, may have built into their costs, the interests rates that they are charging to the company, a risk premium on the interest rate. We have to be careful about not disrupting the security level that they hold but at the same time try to balance the interest of the wage earners and those who provide the capital for the company.

I would like to mention one other thing. In most bills we usually see consequential amendments to other acts and in this one I believe there are three acts and the Canada Labour Code. There will be an amendment to the Canada Labour Code. The parties may agree to revise the term of a collective agreement without the approval of the board. That will be pretty important and it may be part of the arrangement.

One can understand when a company restructures to deal with all of its unsecured creditors, et cetera, it continues under the Companies' Creditors Arrangement Act and then all of a sudden it has union difficulties and decides it is time for a new contract which throws the company back into a situation. This is an important change which they may want to consider, for instance, extending the term of a collective agreement to ensure that there is some opportunity for the company to get on its feet and be able to deal with labour demands. I think that will be an interesting discussion as well in the committee.

There are some amendments to the Canada pension plan, particularly with regard to employer and employee contributions and the related interest during that period. Moneys held in trust by a company with regard to payroll deductions have secured status so they will have to be addressed. Similarly, the Employment Insurance Act will have a similar amendment to deal with that.

Finally, there is also a change to the Income Tax Act in a case where the minister has knowledge or suspects that a particular person is or will become, within one year, liable to make payments. There are some complications but it is interesting that they pick these things up. I find it to be a very difficult bill to read. One does need to have some of the other legislation and I think one also has to be close to the labour realities out there and some of the conditions.

I think the witnesses that will be heard by the committee will be providing an excellent education to members about the realities of what happens when employees lose wages to the extent that 75% would get nothing and those who receive something only get 13¢ on the dollar compounded with the likely impairment of their pension benefits.

This is an extremely important bill. I gather from the debate so far that the parties are very supportive of ensuring we have an appropriate bill to deal with the interests of not only wage earners but also with existing creditors to ensure there is a balanced approach to this and that we make sure wage earners are not put in an untenable situation.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, my question also has to do with the wage earner protection program aspect of Bill C-55. The bill, as put forward by the Liberals, makes workers who have less than three months on the job ineligible to make an application for compensation out of this program. Would my colleague's party share our view that it does not make any sense at all? If employees have less than three months on the job, they are even more vulnerable and perhaps need the compensation more than individuals who have had 20 years of employment to put life savings together.

[Stockwell Day, Conservative, Okanagan—Coquihalla, BC]

Mr. Speaker, my colleague from Kildonan—St. Paul, once again, has accurately and incitefully described the major components of this bill and areas where there is some possible adjustment required.

I think the government is generally on the right track with this particular bill. That is something we do not often admit to in this House because we do not often have the opportunity to do so, given what we see. However, in this case, it is on the right track.

Basically, we are talking about protection for wage earners. It is a very key component and something that we want to support. The Bankruptcy and Insolvency Act itself does a number of things. It provides for the liquidation of assets. It provides also for the distribution of what may be remaining to creditors. Even more important, it provides mechanisms by which renegotiations can take place, and possible reorganizations, of either the company or the individuals involved. When it comes to the Companies' Creditors Arrangement Act, CCAA, it is looking at proper provisions under court supervision in terms of how assets can be distributed.

There is currently a framework in terms of the order of payout. If a company or an individual is going bankrupt and money is owed to other individuals or other companies, there is actually a ranking, a preference order, in terms of who gets paid first. This is very important, especially to the person to whom the money is owed.

It can be simplified by saying the classifications are: the secured, the preferred and the deferred. The problem in terms of the wage earners category is they are under the second classification and they come behind those who are secured. They would qualify as preferred, but they are fourth even in that list of preferred. There are a number of other creditors who would get paid out before the wage earners in a particular company. The people who worked hard, the people who applied the sweat equity to the company itself, are way down the list.

Quite rightly, the government is recognizing, and we have been urging this for some time, that those wage earners be moved up in terms of the preference order so that their hard work can be recognized and in fact redeemed through this particular system.

The danger in any type of legislation like this of course is that we have to be very careful with the balancing because we could take pressure off of a company or an individual who is considering going bankrupt. That of course applies to every type of government insurance. We do run the risk of creating a moral hazard. Do we want to encourage the very type of behaviour we are trying to in fact discourage?

That is why we will be watching this bill and how it progresses. We will be watching it very closely to ensure we get the right balance here. We want wage earners to be taken care of. We do not want employers, in the case of individuals, to sleep well at night thinking that the government will come along and take care of all these employees and there will be no problem, and they can go ahead and claim bankruptcy without having anything resting on their shoulders. There is a balance that has to be achieved here. The government is on the right track, but we are going to have to watch this carefully as we move through possible amendment stages.

As we go through the bill, and this is not a small bill, it is exciting nighttime reading, and I know some people will be waiting for the video to come out, there is some important detail here that is going to have to be looked at carefully at the committee stage.

Again, I think the government is on the right track trying to streamline some of the administration and some of the efficiency aspects, but we are going to be watching this very carefully.

We want the wages to be paid out quickly. In fact, we are going to look at this and we may even propose, depending how the government addresses this, the creation of a separate fund for wages for workers. If we have a separate fund created, then we do not have to worry and wait unnecessarily. There will not be the time restraints and constraints that could follow and hard-working people wind up not getting their dollars, not getting the money they are owed. We are going to look at that carefully in terms of setting up a separate fund.

My colleague from Kildonan—St. Paul went into some detail related to student loans. This is a factor that has to be looked at, something that students are dealing with in terms of the debt that they carry into their working life and their career environments. We have to look at this very carefully. My colleague detailed some of that.

The best approach actually, as in health care, is prevention. The more we can do to prevent or help a student not acquire a huge debt load the better. The more we can help them dispense of their debt while still recognizing their moral responsibility to do so, the better off we are.

That is why on this side of the House the official opposition, under our leader, is proposing a contingency based plan for paying back loans. Students would pay back a loan contingent with the rate of income they are receiving at the time. When most of us graduated either from elementary school, high school or university, most of us did not immediately move into the high wage end of a company or the profession we wanted to pursue.

We started at the low end, making minimum wage usually, and then we became upwardly mobile. When students graduate, they have a debt load. Let us allow some time for them to pay it back recognizing their rate of income at a particular time. When they are making just a little bit of income, the payment schedule should be adjusted.

That is not in Bill C-55, but we are suggesting that type of approach, so students will not face what this legislation is proposing but a mechanism providing a way for them to dispense with their loan. We want to help those students and we want to help them in a responsible way.

Those are the main elements that we wanted to address at this particular phase of the bill. We will be looking forward to the amendment stage and working with our colleagues to ensure that hard working people are properly recognized when a company or an individual falls into default. We want to ensure we are doing all we can to see the reorganization of debt before we see the obligation to pay the debt removed through bankruptcy, and especially addressing the concerns of students.

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Mr. Speaker, I am pleased to rise today to put some comments on record concerning Bill C-55. I will be speaking to three aspects of the bill: the creditors ranking aspect, RRSPs, and the student loans aspect. Bill C-55 is an act to establish the wage earner protection program act and to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act.

I will be sharing my time with the member for Okanagan—Coquihalla.

Annually, more than 11,000 businesses and 100,000 individuals use the Bankruptcy and Insolvency Act. While business bankruptcies have declined in Canada recently, consumer bankruptcies continue to rise. When a personal or corporate bankruptcy occurs, the BIA provides a mechanism for insolvent or business debtors to avoid bankruptcy by negotiating arrangements with their creditors to reorganize the debtor's financial affairs.

The CCAA provides a legislative framework for the reorganization of insolvent corporate debtors under the court's supervision. Currently, secured creditors rank first in a bankruptcy. Consequently, a trustee takes title to a debtor's property subject to the rights of the secured creditors in that property while unpaid wages rank fourth in the list of creditors.

As we can see, it becomes very worrisome for the people who are working in the business involved when a bankruptcy occurs. The Bankruptcy and Insolvency Act was up for review by Parliament in 2002. The Senate reviewed it, making 53 recommendations at that time. Recently the member for Winnipeg Centre introduced a private member's bill in Parliament that would allow employees to be paid before other secured creditors.

A CPC committee reviewed that private member's bill and proposed a CPC wage earner protection plan that would draw from the employment insurance fund. The government would pay employees up to two pay periods of unpaid wages before the bankruptcy was declared and up to approximately $3,000 in wages and vacation pay. The government would then assume that the employees would claim against the assets of the company.

Companies are encouraged to restructure rather than file for bankruptcy. There has been a problem with inequities in the treatment of personal bankruptcies and these will be addressed. Reforms will improve the administration of the system and several provisions in both the BIA and CCAA will be clarified and modernized.

The bill is a good first step. However, there are some concerns. Wages should be paid quickly, but the government should set up a separate fund to pay wages rather than change the ranking of those payments.

Also, the use of superpriority status interferes with secured transactions to some extent and is not a preferred course. The creditors who lose security over inventory, accounts receivable or cash are granted the equivalent of the workers' preferred status. This lacks the degree of certainty that secured creditors require.

Members on this side of the House support the quick payment of unpaid wages to employees; however, while this bill should have top priority, it should not be passed in a day. Hearings will be very important due to the complex nature of the legislation. Members on this side of the House anticipate proposing some amendments at the committee level and will seek to clarify the implications of the bill to all concerned.

Reform is needed in this area to better protect those adversely affected by the potential bankruptcy. Facilitating restructuring as an alternative to bankruptcy to save jobs and keep businesses viable is critical to an efficient marketplace. Restructuring can preserve employment and lead to better returns for creditors.

The bill also speaks to exempting all registered retirement savings plans and RRIFs from being liquidated on behalf of creditors should an investor declare a personal bankruptcy. Currently, many life-insured based RRSP products, such as segregated funds and employer sponsored registered pension plans, are exempt, while regular RRSPs are wide open to creditors. This poses a huge gap between employers who force their employees to save and those Canadian citizens who choose to do it on their own.

However, this does not mean that this legislation will give us a massive RRSP contribution one day so we can declare bankruptcy the next and pull out all the money a week later. The draft bill proposes that contributions made 12 months prior to bankruptcy will not be exempt from seizure.

Protecting RRSPs from seizure is consistent with the public policy of encouraging and helping Canadians to save for retirement. This is especially important to employees who cannot participate in their employer sponsored pension plan and for self-employed business people and professionals. This creates a level playing field.

The complexities of this bill merit public hearings and careful examination.

On the last point, I will speak about student loans. It is proposed that student loan debt will be eligible for discharge at bankruptcy if seven years have passed since the former student has terminated his or her studies. Currently, student loan debt can only be discharged after 10 years from the termination of studies. In addition, in cases of undue hardship, a bankrupt may apply to the court to obtain the discharge of the student loans after five years.

I will point out that the member for Newmarket—Aurora, just four weeks before leaving this side of the House to take up the post of Minister of Human Resources in the government, voted for a private member's bill that would have reduced to two years the waiting time before graduates would be permitted to apply for bankruptcy relief. The bill was defeated.

I must say that Bill C-55 is a very complex bill. It has many aspects. Many important aspects need to be reformed to assist in this very stressful time during bankruptcy and insolvency, so that both businesses and wage earners feel as if they have a future and so people can retain their homes and their lifestyles.

In conclusion, I very much look forward to hearing more about the bill and to having some input. on it. It is a top priority bill and the reformation is long overdue in this aspect.

Business of the House

[Tony Valeri, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I would like to lay out the business for the next week.

We will continue this afternoon with Bill C-55, which is the wage earner protection program. Then we will proceed to the second reading of Bill C-57, the financial institutions bill, followed by second reading of Bill C-54, which is the first nations oil and gas and moneys management act.

Tomorrow we will consider report stage and, if possible, third reading of Bill C-25 respecting Radarsat. I understand as well that there are some ongoing discussions about the disposal of Bill C-63, amending the Canada Elections Act. We would also like to deal with Bill S-38 respecting the spirits trade and Bill S-31 respecting autoroute 30.

On Monday we propose to commence report stage of Bill C-11, which is the whistleblower bill. We would like to give this bill priority all week in the hope of completing all of the remaining stages.

We would then return to any business left over from this week and, if there is time, begin consideration of Bill C-44, the transport bill; Bill C-28, the food and drug legislation; Bill S-37, respecting the Hague convention; Bill S-36, the diamonds bill; and Bill C-52, the fisheries bill.

With respect to the business of supply during the present period, Mr. Speaker, I will reconfirm that you confirmed to the House that there will be seven allotted days during this period. In response directly to the opposition House leader's question, as per our discussion at the House leader's meeting this past Tuesday, we understood we would schedule the supply days after the Thanksgiving break.

In any event, it will be a topic that I look forward to discussing with House leaders at our meeting this coming Tuesday, so that we can in fact schedule all the required opposition days.

Wage Earner Protection Program Act

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I am pleased to have the opportunity to speak to the second reading of Bill C-55, an act to establish the wage earner protection program act and to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act.

As members know, insolvency laws cover both personal and commercial situations. For my part, I will be focusing these comments on the commercial side of Bill C-55. In particular, I will be addressing those amendments which deal with commercial reorganizations. I would, however, first like to elaborate on the importance of our insolvency laws.

Data from the Office of the Superintendent of Bankruptcy illustrates the extent to which businesses experienced financial difficulties. In 2004, notwithstanding the tremendous health of our economy thanks to the excellent government we have, notwithstanding that, there were still some 8,200 businesses that filed for bankruptcy for various reasons. These firms had approximately $800 million in assets and over $3 billion in liabilities. As we can see, there were, at least in some situations, a lot more liabilities than there were belongings.

Unfortunately, there is no detailed statistical breakdown on the Companies' Creditors Arrangement Act cases, as there has not been a central registry. However, it is estimated that there are more than 50 cases under the Companies' Creditors Arrangement Act each and every year. It is generally accepted that the restructuring of major companies take place under the CCAA rather than the Bankruptcy and Insolvency Act. One of the goals of Bill C-55 is the creation of a central registry for the Companies' Creditors Arrangement Act cases within the Office of the Superintendent of Bankruptcy, which would enable statistical and other analysis of the restructuring process.

Canada's economy is a market economy based on entrepreneurship and risk taking. As we all know, risk taking is integral to the functioning of the marketplace and it is fundamental to success in a market based economy. This is particularly the case with today's increased global competition.

Risk taking also helps to ensure that Canada's prosperity is maintained and continues to move forward. In other words, risk taking is the essential ingredient of economic growth and jobs. When risk taking is promoted and encouraged, by definition there will be failures. If there were not failures, there would not have been a risk. There are many successes, but some failures, unfortunately. Supporting risk taking behaviour, because of the prosperity it brings, also means that our laws must deal with the cost of these failures, however unfortunate they are.

From this perspective, the obvious role for bankruptcy and insolvency laws is to provide the legislative framework by which non-viable firms are liquidated and dissolved. In these situations, the business assets are sold off, the business closes its doors and, unfortunately, employees lose their jobs. The situation is almost always devastating for those involved. Jobs are lost. Small communities and single-industry towns are faced with decreased economic activity and prospects, not to forget the principals in the companies, who have invested sometimes everything they had, and who also sometimes lose their life savings in the failure of the business in question. They should not be forgotten in all of this either.

However, bankruptcy and insolvency laws provide a framework to permit and facilitate potentially viable but financially distressed firms to survive and hopefully to continue to operate. They should allow and encourage the financial restructuring of firms which have a reasonable expectation to return to financial health but which at the present moment are not capable of meeting their current obligations.

Bill C-55 makes many improvements that promote restructuring. These changes are necessary and indeed critical to improving the reorganizational provisions in both the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act.

Interim financing, while not explicitly covered in the current legislation, is a critical issue for reorganizing companies. This short term financing allows a company to continue to operate while finalizing its restructuring. Courts have permitted interim financing but have done so on a case by case basis.

Bill C-55 would add both the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act ground rules for the granting of interim financing.

By providing factors to be considered directly within the legislation, the parties involved would be better able to understand when and under what circumstances the court will grant interim financing. These new rules would provide a much greater degree of predictability and should help companies obtain the financing needed during the critical restructuring period.

The proposed amendments would also allow a restructuring company to terminate certain agreements where it is necessary for the viability of its restructuring process and would not be overly injurious to the other party to the agreement. This amendment would make it easier for companies to escape economically damaging contracts while providing the other parties to the agreement with a right to claim damages caused by the disclaimer. This amendment would ensure greater clarity in the process and would create a more orderly process for disclaiming contracts and ensuring successful reorganization plans.

Collective agreements, however, do not fall into the group of contracts that can be disclaimed by debtors. These agreements will remain in force until the parties agree to change them. Bill C-55 would create a process that would allow the parties to negotiate but would not force workers to make concessions.

The bill would also make changes to the role of key participants in the insolvency process. Interim receivers would be just that, interim. Limits on their power and on the term of their appointment would mean that they would no longer be allowed to operate for extended periods of time.

To cover the gap, we are creating a national receiver that would be able to operate in any province. The bill would also clarify the role of the monitor in a Companies' Creditors Arrangement Act case, ensuring that the monitor would be a qualified trustee, acting in accordance with the code of conduct and responsibilities placed upon trustees under the Bankruptcy and Insolvency Act.

The changes would also improve the transparency of the process by establishing clear rules regarding notice to creditors and by providing that payment of the third party costs may be paid out of the debtors' assets to allow all key parties to effectively participate. It would also allow courts to remove directors who unreasonably impair the restructuring process and it would allow them to make orders indemnifying the directors from liability.

The proposed legislation also contains amendments to the provisions governing international insolvency. Bill C-55 adopts the United Nations Commission on International Trade Law, or UNCITRAL model laws, for dealing with cross-border insolvency and should facilitate cooperation with foreign jurisdictions.

Our largest trading partner, the United States, recently approved the adoption of the same model. Therefore, standardized rules governing international insolvencies are becoming increasingly important to foreign investors. Adopting the most up to date and comprehensive rule in this area will make Canada a more attractive place to invest.

There is no doubt that Canada's insolvency laws fundamentally contribute to the efficient functioning of the marketplace. These rules of the game provide predictability and security to the marketplace participants, both domestically and foreign. It is important that marketplace framework laws, such as insolvency laws, be kept up to date and respond to the needs of the marketplace. Bill C-55 responds to the new issues that have emerged from a rapidly changing marketplace. I urge all members to support the provisions in Bill C-55 and of course the bill overall, along with its reference to committee.

As I said earlier, it is a pleasure for me to speak in the House at second reading of Bill C-55, an act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act. As I said already, insolvency legislation applies to individuals and businesses. So does the legislation before the House today.

I am pleased to hear our colleagues propose various amendments on protection for workers. I am eager to see the bill go before the committee. We will ensure that the bill has the broadest scope possible, while maintaining balance, encouraging investments in business and—as has been said so eloquently a number of occasions—protecting the rights of workers.

Some might ask why we are doing the insolvency reform now. An efficient and well functioning insolvency system is vital to our economy. I believe I was sitting in the House in opposition when we started these reforms in the 1990's but many issues were left unresolved and new issues have emerged with our rapidly changing marketplace.

As I indicated a few moments ago, the United Nations and the United States have adopted that model and it is incorporated in the bill we have today. Therefore it is important that the marketplace framework laws, such as the insolvency laws, be kept up to date, respond to the needs of the market and to a degree, as well, to the needs of the international conventions that we sign on to.

We all know that extensive consultations were conducted regarding the bill. As was indicated a little earlier, there was a broad consensus to reform and to modernize Canada's insolvency laws. The proposal before us today reflects the input received from a broad spectrum of stakeholders, such as, insolvency practitioners, representatives of the financial and business communities, labour groups, for which I am proud, consumers' associations and, of course, members of the academic community.

The Senate committee on banking, trade and commerce also conducted public hearings in 2003 and made a number of recommendations for changes to the law and I understand that some of these recommendations are found in the bill that is before us now at second reading.

The reforms in question, if I were to summarize them in the little bit of time that is left, have four main objectives. First, it would encourage restructuring of viable businesses as an alternative to bankruptcy. In this regard, the Companies' Creditors Arrangement Act will be significantly modified to provide increased predictability while preserving flexibility.

Second, the reform would improve the protection for workers in bankruptcy. We have heard a lot about that issue particularly over the last little while. The bill creates a legislative framework for the wage earner protection program that will ensure that workers get compensation for their unpaid wages in the event of an insolvency.

Third, the bill is designed to make the insolvency system fairer and to reduce the potential for abuse. For instance, the bill introduces an exemption for RRSPs and lowers the period of discharge for student loans while it tightens the rules for debtors with surplus income and those with high income tax debts.

Fourth, the bill contains a number of technical amendments to improve the administration of the insolvency act. I raised the issue of the recommendations made by the Senate committee and the work of the committee was very helpful, I might add, and provided a solid basis for developing many of these proposals.

Finally, in response to the issue of Bill C-281, or the wage earner protection raised by other members later, the bill proposes a comprehensive reform to Canada's insolvency system.

In summary, those are basically the highlights of the bill. I urge the committee to do a thorough review and improve it where necessary so that we can further improve on Canada's laws, creating at the same time a favourable climate for investment, both domestic investment and investment from an outside country, while at the same time increasing the protection for consumers, wage earners and others where it is provided in the legislation.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, I too wish to add my voice to this chorus of praise, and at the same time reassure my colleague from Verchères—Les Patriotes that we have only praise for him.

Incidentally, as labour critic, I must tell him that I feel quite honoured by this diversion of the debate. We were debating Bill C-55. I view as a privilege the fact that the member for Verchères—Les Patriotes would chose to make this very touching announcement while we are considering a bill dealing with the interests of workers.

My colleague from Shefford, who is the deputy labour critic, is asking me to convey the message to him that he too feels very honoured.

It is very likely that the member for Verchères—Les Patriotes had a good reason for choosing to make this announcement during the debate on Bill C-55. The fact is that he is himself an indefatigable worker. I have known him personally since 1993, when we had the pleasure of working together. He has always worked very steadfastly and rigorously.

As we know, rigour is the trademark of Bloc members. Our batting average is very high, still our colleague from Verchères—Les Patriotes outdoes us. He has always had dignity as a leitmotif in whatever he did.

Finally, I must add that he was the Bloc Québécois whip—I do not remember for exactly how long. And a highly efficient one too. My colleagues and I are grateful to him for that.

I know that the Bloc will find the time and place to pay tribute to him more appropriately. At this time we will just tell him how much we all regret his departure.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, my question will actually be a comment. It will not concern the subject matter of Bill C-55. Instead, it will be directed, through you, at the man.

A few weeks ago, I gave a speech which, apart from the fact that it was much longer, said essentially the same thing as what our colleague told us today. I too would like to say what a pleasure it has been for me to work with him. I am speaking for myself and, as the longest serving member of our caucus in the House of Commons, on behalf of all my hon. colleagues, I am sure.

Over the years, he has filled many positions within his party, as have I in mine. We have both been officers of this House. I am sure that I speak on behalf of all parliamentarians in saying that he has always discharged his duties in a very dignified manner.

When he arrived in this House, he was among the youngest parliamentarians. As surprising as it may sound, 12 years later, he is 12 years older, and others are now younger than him. Granted, there are many more who are younger than me. Some parliamentarians were not even born when I arrived at the House of Commons in 1966. My hon. colleague opposite could probably be included among them. I understand that he was 1 year old.

This was just a comment to say that, at any rate, as far as I am concerned, he has been a good member and a good colleague. If I were to ask anything of him, it would probably be this. In his remarks, he mentioned the volunteers working within political parties. I am not being partisan. This goes for all parties, without exception. I think that volunteers are the great heroes of democracy. They work hard; during election campaigns, they head off to the headquarters with their lunch boxes as if they were going to work, to give their time, and they give a lot of it. They ask for nothing in return, besides an opportunity to participate in this exercise in democracy.

Are they not the real heroes of democracy? I respectfully submit that these are the great heroes of democracy to whom all of us, parliamentarians and other elected officials, even those who are not elected but who are less involved than these people, the citizens of this country, owe a debt of gratitude.

[Stéphane Bergeron, Bloc, Verchères—Les Patriotes, QC]

Mr. Speaker, to begin with, if you would permit me, I would like to warmly thank my colleague from Shefford. I thank him for his concern in permitting me to express myself today on this bill. I also thank him for being so flexible, for at first I was supposed to speak ahead of him, but gradually we reorganized things. So very great thanks to my colleague from Shefford.

It is with some emotion that I take the floor today on Bill C-55, an Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangements Act and to make consequential amendments to other Acts. Not only is this bill important to me, but this is probably one of the last speeches I will give in this House. I therefore ask the indulgence of the Speaker and my colleagues should I ever digress.

We must be very aware of the fact that when there are brutal closures or bankruptcies of companies, the fate of the workers is often tragic. Their families have to suffer the consequences of this as well.

Thus far, these employees do not rank very high in priority among the creditors when the time comes to wind up a company's remaining assets. So, as was mentioned earlier, we find wages and severance allowances unpaid, and, sometimes, pensions lost or heavily mortgaged. After working all their lives for one firm, often these people find themselves without resources, without a pension fund, and often with a reduced likelihood of returning to the labour market.

It is imperative that this Parliament consider the tragic situation of these employees who are the victims of brutal corporate closures or bankruptcies. It is high time that we did so.

A number of my constituents experienced such a situation when the Aciers Atlas plant closed in Sorel-Tracy. In fact, the Aciers Atlas retired steelworkers' association contacted me to ask Parliament to pass legislation to deal with this problem. That people should be lobbying for this is nothing new. The Steelworkers have been pressuring parliamentarians for months to look into this glaring problem. This was due in large part to the worrying situation of a number of steel plants, particularly in the Hamilton region.

After that, our colleague from Winnipeg Centre introduced Bill C-281, a bill we supported 100%. We must admit we even helped our colleague prepare the bill.

Obviously, we are extremely pleased to see the government step in with Bill C-55. In this way, we are assured that the existing legal framework will be improved in order to protect workers and ensure that they are among the preferred creditors when a company is dissolved.

As was said earlier, we support the principle of Bill C-55, but it still contains a number of irritants and gaps, particularly with regard to the concept of secured creditor. The Government of Quebec should be consulted as to how this new legislation may work with the provisions of the Civil Code.

A few moments ago, my colleague from Saint-Bruno—Saint-Hubert spoke quite pertinently about the waiting period that students face before being allowed to discharge their student loans through bankruptcy. This is another area of concern with regard to Bill C-55, as is the issue of penalizing individuals receiving EI benefits, who may be taxed on the benefits they receive when a company is dissolved.

We will have to ensure that a number of amendments and improvements are made to the bill in later stages, so that it is able to truly respond to the very legitimate expectations of workers and pensioners of companies that may one day close.

As I said earlier, I am very happy to speak on this issue. It is clear just how important it is to me.

As I said, I will be leaving this place soon for another arena where I hope I will be able to continue to serve and to meet new challenges.

I would like to take the few minutes I have left to thank all my present and former colleagues in this House. It has been a great privilege and honour for me to be able to sit in this House and be surrounded by extraordinary people here to represent their constituents in Canada and in Quebec.

I would like also to say goodbye to everyone here, House staff, clerks, security personnel and so on. I have particularly fond memories of the late Major General Cloutier, with whom I worked closely during my time as chief whip for the Bloc Québécois.

I also want to acknowledge and thank the legal advisors, and in particular Diane Davidson, an extraordinary woman now working with Elections Canada. These legal experts provide such devoted services to parliamentarians. Then there are the maintenance staff, the support staff, the food services people, the mail room employees, the pages, the researchers and Library staff, in short, all personnel of the House, past and present, who make it possible for us to do as worthy and efficient a job as possible of serving our fellow citizens.

I wish to mention the efficient, competent and devoted staff of the Bloc Québécois in general, and in particular the ones who have worked with me since 1993, who have made it possible for me to do this exciting job of representing the people of Verchères and Verchères—Les-Patriotes in the House of Commons. Words are not enough to express my great appreciation for their devotion, which has made it possible for me, I hope, to do my job as effectively and appropriately as possible.

And then there are the countless volunteers who have worked in the federal riding of Verchères and later Verchères—Les-Patriotes, the ones who have made it possible for me to be here for four terms, a total of some 12 years.

I wish to pay particular tribute to my family, my wife Johanne and my daughter Audrée-Anne. Without them, I could never have fulfilled this mission for the past 12 years.

Lastly, Mr. Speaker, I would be remiss if I did not express my equally warm and heartfelt thanks to the people of the federal riding of Verchères and Verchères—Les-Patriotes, who have showed their faith in me in four elections, who invested in me and reiterated their confidence in me. There is no way I can fully express my gratitude for the touching support they have manifested in me on four occasions, starting in 1993.

I thank them for allowing me to go through the exciting adventure of representing them in the House of Commons. I hope I always lived up to their expectations.

[Gérard Asselin, Bloc, Manicouagan, QC]

Mr. Speaker, I would like to congratulate the member for Shefford on his fine speech. He took the time to prepare well so that he could speak on behalf and in the name of working people. He concluded by saying that this is a good bill. It is good, but not excellent.

There is a stage that it must still go through, namely consideration by the parliamentary committee where the opposition parties will present amendments. We will see how much goodwill the minister has after the Bloc Québécois makes amendments to improve the situation of employees in bankruptcy cases.

It was said that this is a step forward and that the minister introduced this bill. The department that created this loosely knit Bill C-55 has dropped a few stitches. We are going to fix that and make a few amendments in committee. Then we will see how much good faith the government has. My colleague in the Liberal Party just said that they consulted widely and listened. However, this bill does not correspond exactly with what workers want in case of bankruptcy.

Wages should be protected. Some people have sacrificed weeks and even months of wages and found themselves facing bankruptcy. Their wages were completely lost. An employee's pension fund should be protected, that is to say, the part paid by the employee and the employer. This is something that they negotiated in collective agreements.

We should ensure that people have immediate access to employment insurance, with no waiting period. We should also make sure that POWA, the program for older worker adjustment, applies right away insofar as training or temporary assistance is concerned while people wait for their pension entitlement. One hundred percent of everything these people have invested over many years in the company pension fund must go in. It must be placed in a specific fund, a guaranteed fund, and paid out at 100%.

I would like to ask the member for Shefford my question. I see that 10 minutes are not enough in view of all his knowledge, research and dedication to working people. The member for Shefford could easily have given us a 40-minute presentation. But he was allowed only ten minutes. I would like him to explain the essence of the amendments he wants to make in order to fix Bill C-55 and make it a real bill for the working people of Quebec.

[Hedy Fry, Liberal, Parliamentary Secretary to the Minister of Citizenship and Immigration]

Mr. Speaker, I am pleased to express my support for Bill C-55, which proposes a comprehensive set of reforms to Canada's insolvency system.

Bankruptcy is not a pleasant subject. No one enjoys the thought of financial hardship or the pain that goes along with it, but we must not forget that bankruptcy is a fact of life in a dynamic and evolving market economy.

Entrepreneurs need to borrow money to bring their ideas to the marketplace. Firms issue debt obligations to finance their investments and to create working capital. Consumers use credit to buy homes and goods and services that they need.

Borrowers must have a way to escape debt when it becomes insurmountable, but the rules must be fair so that creditors can assess their risk. An economy without bankruptcies would be an economy without credit markets. Entrepreneurship would be stifled, corporate expansion would be halted, and financially troubled individuals would be sentenced to live their lives under the weight of unmanageable debt.

By facilitating a fresh start, insolvency law promotes innovation and helps to push the economy on to new levels of productivity and competitiveness.

The reforms in this bill have four major elements. These elements are: one, to encourage restructuring of viable businesses; two, to improve protection for workers in bankruptcy as preferred creditors; three, to introduce an exemption for RRSPs and to lower the period of discharge for student loans to seven years, while tightening at the same time the rules for debtors with surplus income and with large income tax debt; and four, certain technical amendments to improve the administration of the insolvency system.

Before we go any further, let us look at some of the numbers. Last year over 100,000 individuals used the Bankruptcy and Insolvency Act. This accounted for over $11 billion in liabilities and resulted in $4 billion being redeployed into the economy. There were more than 50 corporate restructurings during that time period under the Companies' Creditors Arrangement Act. One of the largest was an $8 billion debt. That is right, $8 billion in liabilities in one case only.

The reforms in this bill will ensure that there is greater transparency in the process and a better ability for parties to defend their interests. Perhaps more important, it will promote fairness and efficiency in the marketplace so that more of the debt is recovered so that it can be plowed back into the system.

Today in individual cases there are now four bankruptcies for every thousand Canadians over 16 years of age. A similar growth has been observed in other countries. On the business side the growth in the number of bankruptcies has been much smaller in Canada. In fact, since our peak in the mid-1990s, the number of bankruptcies has decreased significantly. Canada used to have a business bankruptcy rate very much higher than that of the United States, but now we are actually noting that we have the same basic bankruptcy rate, which is four per thousand business establishments.

There is one other trend that is worth noting. In recent years more and more businesses and individuals are taking the opportunity to restructure their debt by something called a proposal. A proposal and restructuring in general allows a debtor to avoid bankruptcy while paying the creditor less than the full value of the debt. More than that, the creditor is receiving money it would never have received if the person had gone bankrupt. It is a better outcome for both and it is a very important part of the changes in this bill.

Since 1992 the number of restructurings has considerably increased because people are finding it is a win-win situation. A key goal of Bill C-55 is to improve that even more and to help people to restructure.

Before I go any further, I want to talk about how we got to this point. There was an extensive consultative process in 2001 and 2002 to identify issues and options to reform the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act. This consultation process produced the report on the operation and administration of the Bankruptcy and Insolvency Act and Companies' Creditors Arrangement Act which was tabled in Parliament in late 2002. Meanwhile in a parallel process the Office of the Superintendent of Bankruptcy appointed a personal insolvency task force to give some solutions to the problem.

In 2003 the Senate Standing Committee on Banking, Trade and Commerce conducted public hearings, reviewed more than 40 submissions and came up with a report entitled “Debtors and Creditors Sharing the Burden”. This report was published in November 2004 and contained detailed recommendations.

The consultation process was very extensive. In other words, nobody made this up. Everyone tried to find out some of the best answers. This included hearing from stakeholders from a broad spectrum of interests such as insolvency practitioners, representatives of financial institutions, the legal community, labour and business, consumer associations, students and members of the academic community. They all brought forward very flexible and creative solutions.

The bill in front of us is a culmination of all of that input. The proposals are basically four in nature. They are comprehensive, well informed and based on sound research. I believe they will ensure that Canada has a world class insolvency law that will support our dynamic economy, protect jobs, and ensure that Canada remains a good place to invest, to do business and to live.

Bill C-55 will provide better protection for workers through the creation of the wage earner protection program. There is the superpriority for wage provisions relating to collective agreements as we saw in the bill.

The novelty of this bill is it will do all of this while minimizing as much as possible any adverse effect on access to capital. We do not want to stymie access to capital. The impact on lenders has been minimized while not over-burdening taxpayers.

Most of the OECD countries have taken measures to protect employees in case of the bankruptcy of their employer. In Canada we have debated this issue for almost 25 years. Bill C-55 represents a major breakthrough and is indicative of the economic policy leadership of the government.

The bill will also make Canada more attractive to international investors by adopting the United Nations Commission on International Trade Laws model law on cross-border insolvency. Corporate insolvencies are more often stretching across borders as we well know. The adoption of the model law would make it easier for creditors to assess their risks in various jurisdictions and to avoid the necessity of duplicating proceedings in different jurisdictions. It would create a better ability for people to assess where they want to go and how they want to borrow and who wants to lend them money. The model law is being adopted by our major trading partners, including the United States and Japan, and we must follow suit.

This is an important piece of legislation. I urge all members of the House to support it.

[Werner Schmidt, Conservative, Kelowna, BC]

Mr. Speaker, it is an honour for me to enter into the debate on Bill C-55. My colleagues have been lucid on a number of aspects of the bill which are very significant, and I concur with their positions.

I will limit my remarks to one particular aspect of the bill which has to do with the inclusion of income trusts, one aspect that is covered by the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act. The issue has to do with an element that is relatively new. It has become very significant and is the subject of rather significant controversy in Canada today.

What are income trusts, which I think have been surreptitiously inserted into the act as just a tiny amendment? In the first act, in the BIA, it suggests that a person now be defined as including an income trust. The CCAA, which is the Companies' Creditors Arrangement Act, defines an income trust as a unit holder and the trust itself is traded on a recognized stock market and covered under the provisions of the act.

What are these instruments? They are complex and sophisticated financial entities. By the underlying asset or group of assets, most of the income these assets generate is distributed to unit holders. They are kind of the equivalent of a shareholder yet they are not. They are unit holders and they are very different.

An income trust is formed when an operating entity creates a trust instead of offering its securities directly to the public. The proceeds from the sale of the units are used to purchase the common shares and high yield debt of the operating entity. It is important for us to recognize that they buy the equity and high yield debt of the operating entity. The combination of the trust's equity and debt holdings allows the income to flow through to unit holders, usually tax free.

There are essentially three types of income trusts: business income trusts, energy trusts and REITs.

The business income trust typically acquires all or substantially all of the issued equity and debt of an operating entity. Under a common business income trust structure, the trust earns income primarily from interest payments received on the debt of the operating entity. Business income trusts are used in many sectors such as manufacturing, food distribution and power generation and distribution.

Energy trusts are quite different. They earn royalty income from resource properties through a royalty interest or earn primarily interest income through the holding of equity and debt of the operating entity.

The third class are REITs, real estate income trusts. These generally acquire income producing real property under an income through leasing the property to an operating entity or they earn primarily interest income through the holding of equity debt of an operating entity.

Business income trusts are particularly useful for mature businesses that are not seeking additional capital because it increases their ability to distribute earnings. As the popularity of income trusts increases, more and more businesses are contemplating converting all or part of their operations to income trusts. The most recent was speculation of a Canadian bank to convert part of its business into an income trust. That among other matters brought a knee-jerk reaction from the Minister of Finance. It sent a shiver through Canada's capital markets and caused a deluge of anger from seniors across the country.

There are two different issues here, but nevertheless the one instance has to do with income trusts and their recognition and the other one has to do with the tax structure and how to deal with taxes. I will not deal with the tax structure. That is for another time.

In the context of Bill C-55, we also must note that while banks are not covered by the Bankruptcy and Insolvency Act or the CCAA, the Companies' Creditors Arrangement Act, an income trust, if the bill is passed in its present form, will put a bank's income trust, if it experiences financial difficulty, under the provisions of the BIA and the CCAA. On the one hand we have the bank never covered by the BIA. On the other hand if it forms an income trust, the part that is in the income trust will be covered by the bankruptcy act.

No one knows what the implications of such an event would be at this time. To pass a law without at least some consideration of possible implications would, in my opinion, not only be shortsighted but indeed irresponsible.

Let us now remind ourselves that income trusts, business, energy or REITs, typically acquire all or substantially all of the issued equity and debt of an operating entity. Since the income trusts hold debt, let us examine this debt, in a very preliminary way admittedly because we do not have time to get into all the details.

There are at least two classes of debt. The equity that is treated as debt by the income trust is non-arm's-length, private market debt that pays a coupon determined by the operating company's management. Although this debt is covered by a debt indenture, the debt generally does not carry the covenants or protection of a public market debt. It is subordinated to other claims on the operating company and should be viewed as equity for all purposes except tax purposes.

The debt held by the income trust is distinct from third party arm's-length debt issued by the operating company. Third party creditors that lend to an operating company owned by an income trust are in the same position as creditors to a corporation. Interest payments on bank loans or fixed income debt are paid out of pre-tax income. This debt pays a market rate of interest and has the same covenants as other bank loans and public market issues. Most important, the third party debt issued by the operating company has a superior claim on the assets of the operating company. When calculating the leverage of the operating company, however, only the third party debt is considered because the debt held by the income trust is treated as equity.

It is now evident that the inclusion of income trusts under the provisions of the BIA and CCAA is not a simple matter. It has been the subject of some study for years. It is becoming increasingly important as the popularity of income trusts increases. In fact, recently one of these income trusts declared bankruptcy in Ontario although there is no provision under the existing Bankruptcy and Insolvency Act for it to do so.

As the popularity of income trusts increases, the number of structures increases the probability of business failures in this area. We do not like to talk about this very much because after all we do not like to talk about business failures and it is much better to talk about successful business enterprises.

We need to recognize that if we are going to be dealing with this we have to be very careful to prepare ourselves for this. One might ask how important this is as a sector of the Canadian economy. In 2000 the market capitalization of income trusts was about $18 billion. In 2004 it rose to $118.7 billion. There are some reports, depending on which one is looked at, it is approaching $180 billion. That is a very significant market capitalization.

We have seen that these income trusts are sophisticated financial instruments. They own equity in operating entities, debts of operating entities and may indeed incur debts as income trusts in themselves.

The amendments apply only to income trusts, the units of which are traded on a registered stock market and are subject to the rules and regulations of security commissions. Those are the ones we are dealing with. There may be other income trusts that are not registered but those are not the ones covered by this act.

Whether those rules and regulations would be adequate in the case of a financially troubled income trust to determine asset value remains to be determined, particularly in cases where an income trust might hold less than 50% interest in an operating entity. The income trust might find it difficult to get direct access to that operating entity's financial information because it does not have a controlling interest.

While I am not prepared to oppose the inclusion of income trusts in the BIA and CCAA as being proposed to us now, I need to be assured that investors and creditors will be adequately protected if this bill is passed.

[Gérard Asselin, Bloc, Manicouagan, QC]

Mr. Speaker, this morning, the Minister of Labour and Housing explained the principle of Bill C-55. It seems as though they are merely paying lip service to this bill. They say that it will be passed and that it is a step forward. Obviously, any effort to improve working conditions, job security and the state of affairs after a bankruptcy is a step forward.

When such a bill is before the House, the Bloc Québécois can assure the government of its full cooperation so that all the necessary changes can be made in committee in order to make this a viable, useful and effective bill.

There is talk of this being a step forward, but it may be the smallest of steps. What is needed is a big step or even a leap forward. Already, Parliament is decades behind when it comes to working conditions in the event of a bankruptcy. We are talking about protecting wages, pension plans and students declaring bankruptcy.

Like the NDP, the Bloc Québécois has already assured the government of its full cooperation and willingness to improve Bill C-55 in committee.

I want to ask the Conservative member the following question. Does the Conservative Party believe that this bill is satisfactory? Does it intend to introduce improvements and amendments in committee in order to ensure that this is a viable and useful bill?

[Jeff Watson, Conservative, Essex, ON]

Madam Speaker, I appreciate the opportunity to speak to Bill C-55. It has taken two years from the time of the report to get wage earner protection legislation before this House, but Bill C-55 is not sufficient in scope. It leaves out an important component that I wish were being discussed here today. I am going to get to a question very shortly. What is left out is unfunded pension liability in situations of bankruptcy protection.

General Chemical Canada is in my riding. We can argue about whether that was a planned bankruptcy or not. I have some suspicions about that. There was a serious unfunded liability for pensions left over in this situation. Bill C-55 addresses only the wage protection that employees would get in a situation like that, but there is this other important component that is not being dealt with.

We found out in the situation with General Chemical Canada that there was no real proper monitoring of the pension fund and there is really no mechanism available to help workers who are not going to get full pension at the end of their careers. I understand that this legislation will not help the employees of General Chemical Canada because there is no retroactivity here, but we want to avoid situations like these in the future.

I have a simple question for the parliamentary secretary. Why is the unfunded pension liability protection for workers not included? Why did the government not bring it forward at this time as part of dealing not only with wage earner protection but with the other component that is important to workers in cases of bankruptcy protection? Why is the government continuing to leave workers twisting in the wind on this one?

[Jerry Pickard, Liberal, Parliamentary Secretary to the Minister of Industry]

Madam Speaker, it is my honour and privilege to speak to the second reading of Bill C-55, an act to establish the wage earner protection program act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make consequential amendments to other acts.

The passage of the bill will have real effects on the economy and on individual Canadians. It will affect entrepreneurs, large and small creditors, lending institutions, consumers, workers and students. Approximately 100,000 personal bankruptcies and 10,000 business bankruptcies occur each year, affecting more than $11 billion of debts and redeployment of $4.5 billion of assets.

Bill C-55 will ensure the Canadian insolvency system meets the needs of the Canadian marketplace as well as contributes to the socio-economic objectives of helping Canadians in financial distress.

Canada's insolvency system centres around two main statutes, the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act.

Allow me to explain briefly what each statute does and how they interconnect. The Bankruptcy and Insolvency Act, or BIA, provides the legislative basis for dealing with both personal and commercial insolvency issues. Under the BIA there are two options available. When an individual or company declares bankruptcy, the act provides for the liquidation of bankrupt assets by the trustee and the distribution of proceeds in a fair and orderly way to the creditors.

Alternatively, the act provides a means for persons or companies to avoid bankruptcy by negotiating a settlement with their creditors. It is called the proposal. Under the act the use of proposals has grown considerably in recent years and they now account for 15% of all filings by individuals and 25% of corporate filings under the BIA.

The Companies' Creditors Arrangement Act, or CCAA, applies only to corporate insolvencies involving debts over $5 million. Its purpose is to establish a framework to govern the restructuring of companies. The CCAA provides for a court driven process whereby a company obtains a court order to prevent its creditors from taking action against negotiating an arrangement with its creditors. The use of the CCAA has greatly expanded over the past decade, and most restructuring of large insolvent companies is now handled under the CCAA.

There is a broad consensus among stakeholders that reforms to the insolvency legislation are needed. Bill C-55 has four primary objectives.

First, as the Minister of Labour and Housing has outlined, Bill C-55 greatly enhances the protection of workers where their employer goes bankrupt or undergoes a restructuring process.

Second, it seeks to further encourage restructuring as an alternative to bankruptcy. Restructuring produces better results for creditors, saves jobs and enhances competitiveness.

Third, the bill is intended to make the bankruptcy system fairer and to reduce the scope for abuse. Bankruptcy law is about sharing the burden. Hence it is essential that we consider fair and equitable agreements by all parties.

Fourth, the administration of the system will be improved as many provisions in both the BIA and CCAA need to be clarified and modernized in order to ensure a more effective and predictable insolvency system.

Let me offer specific examples on how Bill C-55 is going to improve our insolvency system. To foster the use of reorganization as an alternative to bankruptcy, the CCAA will be substantially rewritten providing guidance and certainty where none previously existed and codifying existing practice while still preserving the flexibility that has made the CCAA such a successful restructuring vehicle.

Several new rules will ensure greater transparency in the process and a better ability for the active parties to defend their interests. This includes rules on interim financing; the termination of assets of contracts; governance arrangements of the debtor company, including the role of the monitor who will need to be the trustee; the sales of assets outside the ordinary course of business; and the application of regulatory measures.

Finally, this bill will greatly improve the administration of Canada's insolvency system through a number of changes affecting the role and power of trustees, including when they act as monitors in CCAA cases and as receivers on behalf of secured creditors. The supervisory role of the Office of the Superintendent of Bankruptcy is clarified and also includes the establishment of a central registry for the CCAA cases.

It is widely accepted that insolvency rules that govern personal insolvency play an important socio-economic role. They permit honest but unfortunate individuals who experience significant financial difficulty to discharge their debts, obtain a fresh start and thereby have the best possible chance to restore their financial situation.

At the same time, a well functioning insolvency system strikes the appropriate balance among competing interests in circumstances in which by definition there is not enough money to go around. Accordingly, it is important that the system be designed in such a way that it functions effectively and efficiently and provides the right incentives so that it deters potential abuses.

Bill C-55 accomplishes these objectives. It does so through tailored improvements to the Bankruptcy and Insolvency Act. By way of background, the proposed changes to the Bankruptcy and Insolvency Act which impact on individuals were extensively examined by the personal insolvency task force, the PITF, during the period of 2000 to 2002. The PITF was an independent panel established by the Office of the Superintendent of Bankruptcy with membership from all principal stakeholder groups, including creditors, trustees, consumer credit counsellors, lawyers, judiciary and academics.

The PITF released its report in August 2002. The report served as the main point of reference for representations that were made before the Senate Standing Committee on Banking, Trade and Commerce, which conducted its own review of Canada's insolvency legislation in 2003. That is to say that the consumer insolvency issues addressed in Bill C-55 have been the subject matter of extensive debate and consideration by both the PITF and the Senate committee.

In the area of consumer bankruptcy, one of the key challenges is the growing number of cases. Consumer bankruptcies have significantly increased over the past decades, from 1,500 in 1967 to some 84,500 cases last year. The number of insolvencies is tied to many factors, including challenges in consumer lending practices, higher levels of personal indebtedness, and a more tolerant attitude toward bankruptcy.

Since 1998, however, the annual average growth in consumer bankruptcies has decreased to approximately 2% per year, compared to 12% for the preceding three decades.

During the same period, the number of consumer proposals has more than doubled and now represent approximately 16% of all filings. This reform will continue to encourage the use of consumer proposals which offer the debtor an alternative to bankruptcy and typically result in higher recovery by creditors. For instance, the threshold for a consumer proposal has been increased from $75,000 to $250,000, thereby allowing more individuals to choose to make a proposal rather than file for bankruptcy.

Among the significant changes introduced to the consumer insolvency system by Bill C-55 is a provision to curb the potential for strategic behaviour by individuals seeking to extinguish large income tax debts. The bill eliminates the eligibility for automatic discharge for those debtors with personal income tax debts exceeding $200,000, where it represents 75% or more of unsecured debts. Instead, these individuals have to seek a court order for discharge and the court would be able to fix conditions relating to the discharge.

In keeping with the principle that those individuals filing for bankruptcy who have the financial means to repay a portion of their debts ought to do so, Bill C-55 provides for amendments to existing surplus income provisions. Under the proposed regime, first time bankrupts with surplus incomes will be required to pay a portion of their surplus income to their creditors for a period of 21 months, an increase of approximately 12 months to the present situation.

Reform of consumer insolvency provisions is also aimed at making the current system fairer for individuals. This includes the elimination of inequitable treatment of retirement savings plans and improved treatment of student loans and bankruptcies.

Under the existing laws, some retirement savings plans, namely, those associated with life insurance policies and registered pension plans, are generally exempt from seizure in the bankruptcy. Other types of registered retirement savings plans, on the other hand, such as those held by banks, brokerages or in self-directed funds, are generally not exempt from seizure in bankruptcy. The difference in treatment of various retirement savings plans seems to conflict with the public policy goal of encouraging Canadians generally to save for retirement.

Under Bill C-55, the registered retirement savings plans, regardless of whether the savings are a part of the employer sponsored pension plan or whether they are held in a life insurance savings plan, will enjoy the same protection from seizure and bankruptcy.

The bill contemplates that certain requirements must be met in order to ensure the public policy goal is fulfilled and to avoid the incentive for strategic behaviour. Specifically, contributions made within 12 months of bankruptcy and the amounts in excess of the cap would be available to creditors. Furthermore, there is a requirement that the savings be locked in until retirement.

In respect to student loans, the bill proposes that the waiting period before which a student loan debt may be discharged in bankruptcy will be reduced from 10 years to seven years. Furthermore, the bill would reduce the period before which the application may be made to the court to have a student loan debt discharged on the basis of undue financial hardship. That would be reduced from 10 years to five years.

One of the functions of bankruptcy law is to define which parts of the bankrupt property are available to be divided among creditors and which parts will remain under their control. In recent years a series of court decisions has cast doubt on traditional interpretations of which parts of the bankrupt property are available to creditors. The decisions reveal ambiguities in the wording and legislation. These are clarified through changes by the proposed bill.

In addition, proposed changes to provisions which address the way in which the Canadian insolvency system is administered are designated to improve the integrity of the system as a whole. A number of the procedural changes to the consumer insolvency provisions will enable the process to be streamlined along the lines recommended by the PITF. It is anticipated that these changes will result in a system which is better able to respond to the needs of individual debtors and their creditors.

In the Speech from the Throne, as well as the budget, the government clearly staked out its commitment to encourage entrepreneurship and risk taking. It has committed itself to creating a society and a business climate where educated and skilled people want to live and work, as well as a country that is the best place to do business while providing effective safety nets for individuals in financial difficulty.

Bill C-55 is a significant step to ensure that we respect Canada's insolvency laws, that the framework is right, that the rules are fair and equitable and that the regulatory structure is smart and responds to the needs of the marketplace. I am confident that the measures proposed in this bill will have broad support among Canadians. I urge all members of the House to support this important legislation.

[Alan Tonks, Liberal, York South—Weston, ON]

Madam Speaker, I have a huge amount of respect for the member, in particular his experience at the provincial level. The subject matter in terms of the protection of pensions in bankruptcy and so on is extremely important. I congratulate the member for his intense presentation on that.

My question has to do with jurisdiction. I understand how the architecture of Bill C-55 concentrates on the issue of pension protection in bankruptcy, but in terms of the regulators and regulations there is as much a provincial role with respect to this issue. I wonder if there is a two-pronged response that could be made in addition to the contents of this bill.

Could the member please elaborate on what additional initiatives should be taken with respect to provincial jurisdiction? I know he has a great deal of background in that particular area.

[David Christopherson, NDP, Hamilton Centre, ON]

Madam Speaker, I want to thank my colleague from Winnipeg Centre for the leadership he has shown on this issue and on Bill C-281, the workers first bill, which does actually speak to the issue of protecting pensions in a real and meaningful way.

I want to break out a couple of the pieces that my colleague has already raised and dissect them a little more. First, I would like to join with my colleague in setting the record straight. I was reading yesterday's Hansard where the minister said in his opening comments, referring to Bill C-55 and wage protection, “This type of program is not radical or new, but it is for our country”.

On a technicality, on a federal basis it is, but within our nation, within the country, my friend from Winnipeg Centre is absolutely right. The Bob Rae government, the first NDP government in Ontario, brought in as its very first bill an employee wage protection plan that did exactly what Bill C-55 speaks about. In fact, it went a little further. Let us understand that the NDP has a track record of taking commitments on these issues, putting them into legislation and making them real, and doing it long before other parties in this place have seen it as a priority and enacted it.

What is important in this story, though, in addition to setting the record straight as to whether or not this is ground breaking legislation, is to understand that in the Province of Ontario right now, as a I stand in this place, that law has gone. That protection for workers has gone. That law was ripped out and that protection does not exist in Ontario right now. Why? Because the Conservative government of Mike Harris eliminated it and took away those rights. Let us understand that when it comes to workers' rights, really, at the end of the day, we are either with them or we are against them. It is clear where Harris was and where the NDP and Bob Rae were. It is good that this is happening. Parts of the bill are important and do provide protection, but it is far from ground breaking in the context of Canada as a nation.

Again, the bill has some good elements in it. There is no question about that. It needs serious work in committee and we are hoping we will get the commitment from all the other parties. Certainly, today, it sounds like our colleagues in the Bloc are prepared to roll up their sleeves and make the amendments necessary to give effect to what Bill C-55 purports to do, but without that work, the bill will fall short. However, we will support it. There are some good things in the bill and we will make it better, but it does not protect pensions.

I am emphasizing the comments of my colleague from Winnipeg Centre that it does not protect pensions. It will take Bill C-281, the workers first bill or one like it to do that. Let us remember that in the case of a bankruptcy, again articulated by my friend, under the currently law, if our pensions are not totally funded, we are at the bottom of the list. The banks, the creditors and the government come first. Workers are at the bottom.

It is interesting that the minister said in his comments yesterday: “--protection of workers whose employers undergo restructuring and become bankrupt. I am very passionate about this topic”. Great. Let us see some passion behind Bill C-281 and make some real changes that provide real protection for workers. That is the kind of passion we want to see from the Minister of Labour.

In the last couple of moments I want to deal with section 33. My colleague has talked about that. The minister made some reference to it where he said:

Canadian workers suffer lost wages, reduced pension benefits and uncertainty that their collective agreements may be unilaterally changed by a court.

The working assumption right now is that federal judges do have the power. That is the current wording. That is somewhat unclear and the first thing that the committee has to do is establish whether or not judges currently have that power. If that takes us into some legal battle, so be it. However, we cannot adequately deal with section 33 until there is an absolute determination as to whether or not, under existing legislation in its entirety, a judge is allowed the power to step in, in the case of bankruptcies and restructuring, and unilaterally order that collective agreements be changed. Let me say parenthetically that they are never changed to the benefit of workers, they are always changed to reduce the benefits that are in those collective agreements. That is the worry.

If they do have that power now, then subsections 33(1) and 33(2) take us two-thirds of the way, but there needs to be another amendment, an amendment that we would call the local 1005 steelworkers amendment. In the question and answer part of the package the minister released, there is the kind of protection that my friend from Winnipeg Centre spoke of. It says that a judge, upon application of the employer, can give a court order that negotiations can begin and it forces the two parties to sit down.

In the context of judges having unilateral power, if that is now curtailed to only direct an order that there be a negotiation at a table, then that is a good thing because it would then be more restrictive. It is taking away the authority and putting it into bargaining. What is missing is what is included in the questions and answers. It is missing in the legislation and it asks, what happens if they cannot agree to any concessions?

The questions and answers part of the package put out by the minister said that the agreement would then stand pat as it is. Every word, every comma and the expiry date, and that package, the collective agreement as it was, then goes in as part of the proposal that is put forward to the creditors as to whether or not that is acceptable. It may help the proposal float. It may sink it but nonetheless in law it would establish that judges will not unilaterally change it and that one cannot be forced to make changes at the bargaining table.

The employer representatives begin by saying their niceties, then the other side looks at them and says, we have no interest in changing anything in our collective agreement right now and we will meet you at the end of the expiry date and until then we do not need to talk about this collective agreement in terms of amendments any further. Period. End of meeting. The contract would stay in place. The powers of the federal judges would have been curtailed and the labour movement would have maintained the rights that it currently has to collectively bargain on behalf of its employees without a judge or anybody else unilaterally changing that.

If it is determined, however, that judges do not have that power right now and that it becomes the accepted interpretation by all, that they do not have it, then we want section 33 out of there because it means that we are now, through Bill C-55, giving judges the power to intervene in the collective bargaining process in a way that they currently do not have the power to do. We are not interested in amending section 33 with a new subsection 33(3) in that case. We want and will demand that the entire section 33 be removed. Make no mistake. This issue will be a major determinant as to whether or not the bill meets the test.

I have not heard from the minister. The minister said in his language that there is uncertainty. There is and that is why we want the uncertainty removed. It should be replaced by clarity, so that we know if judges have that power or not. Depending on the definitive answer to that, what will happen with section 33 will then make itself apparent in a way to which I have already spoken.

Bill C-55, as imperfect as it is, contains some benefits and is here for two reasons. One of them is not because the Liberals care that much about workers. The other is because the NDP through the member for Winnipeg Centre introduced Bill C-281 in terms of protecting pensions and putting them at the top of the creditors list, and the government was on the dime. It was on the spot and it had to do something.

To date, the government has not told us it is prepared to make that legislative change, although on the campaign trail the Liberals were all full of protection for workers and pensions. It was so motherhood and apple pie one would be shocked to believe it had not already become the law.

The second reason Bill C-55 is here is that it was ordered and demanded in the NDP budget amendment Bill C-48.

Those are the reasons it is here. The NDP drove this bill to be here. We will work with colleagues in the House to make this bill as good as it should be. We will continue to fight for Bill C-281. That is not going off the radar screen just because Bill C-55 is here. Those pensions will be protected.

[Gérard Asselin, Bloc, Manicouagan, QC]

Madam Speaker, I would like to fully understand Bill C-55. I want to be sure that the workers in a company are well protected.

There are workers who have been employed by a company and have contributed to it for years. They made a choice during collective agreement negotiations to earn a bit less in wages in order to put a bit more money into their retirement fund. These people made a choice in the present but for the future. I would like to be sure that Bill C-55 does a good job of protecting these workers.

If someone invests in a pension fund for years, it should be exclusive to that person. It is obvious that if the employees' and employer's retirement fund is in the form of a consolidated fund within the company, if the company should ever go bankrupt, everything goes down.

It should be said that the government itself is hardly setting an example with employment insurance. It appropriates the insurance paid by employees and employers and puts the surpluses into a consolidated fund that it uses for its own purposes and to make itself look like a good manager. It is not setting a good example for companies.

Companies should establish a separate fund, reserved and untouchable, into which the employees' contributions to their pension fund would be paid as well as the employer's.

We never hope that a company goes bankrupt, but unfortunately this happens sometimes when assets and liabilities get out of line and the company finds itself with its back to the wall. It has no other choice than to declare bankruptcy. When this happens, the retirement fund that employees have negotiated should be untouchable. The employer's and employees' contributions should be fully reimbursed immediately when a company goes bankrupt. Employees can then reinvest this money in a particular fund of their choosing, for example an RRSP.

The current situation is unacceptable, in my view, for employees who made a choice when their collective agreements were being negotiated to sacrifice some of their wages in order to put the money into their retirement fund. It is unfortunate that when a company goes bankrupt, people can lose everything and find themselves on the verge of bankruptcy, just like the company.

Does the member agree with me that Bill C-55 should force companies to refrain from meddling with retirement funds and ensure that these funds are reserved exclusively for the people who contributed to them?

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, the current bankruptcy laws were clearly written by the monied class. Big money has controlled things in Ottawa for so long that it is no surprise that all the laws are structured in such a way as to look after the interests of big money. That is the case in the current bankruptcy laws. Employees, workers, have been left hung out to dry in the event of bankruptcies in alarming numbers.

There are approximately 10,000 commercial bankruptcies per year in Canada, with over 100,000 employees owed back wages, benefits and pension contributions. It is a huge problem. Some of the estimates are as much as $2 billion per year are owed to employees due to bankruptcies. Imagine the impact of that.

The government finally has listened to the years of pleas from members of various parties to do something about this. I personally had a private member's bill that called upon the government to address the issue of bankruptcy.

One of the key elements in Bill C-55 is the wage earner protection program. For the record and history books, this is the manifestation of a commitment negotiated with the government by the NDP in Bill C-48, or what we call the NDP/Liberal budget of 2005. The Liberal government is living up to the commitment made at the bargaining table with our leader, the member for Toronto—Danforth. We find ourselves with the wage earner program.

Under this proposal, an employee can seek restitution for up to $3,000 for back wages left owing. The government would then seek compensation from the trustee of the bankruptcy, wait in line and be reimbursed. It proposes as much as $2,000. It is an idea that we can agree to in concept. My colleague from Hamilton Centre may be able to expand on it. This was an NDP idea that was put in place in the province of Ontario by the NDP government in the early 1990's.

My problem with it is the figure is too low. We do not believe a $3,000 compensation would compensate as many affected workers as the Minister of Labour would have us believe. Partly, it should not just be back wages and holiday pay. It should also include severance pay or termination pay which may be included in a person's terms and conditions of employment. It also should include commissions for salespeople who may work in retail sales who get their commissions at the end of every month. That could amount to many thousands of dollars.

We believe that threshold limit of $3,000 is not adequate and that the employees should be able to seek compensation for wages, holiday pay, termination pay, severance pay and commission for salespeople.

We also are critical that there is a three month exemption. If someone has worked for the company for less than three months, that employee is not eligible for this program. I do not see the logic in that. In fact someone who has only worked for less than three months is more vulnerable than a person who has 20 years of service if there are two weeks back wages owing. That person may have been catching up on their personal finances. We are critical of both those issues and will be moving amendments to that effect.

The second element of the bill has to do with student loans. My colleague from the Bloc has pretty much reflected our criticisms of the proposed amendment to the student loan provisions. Let us be clear. The 10 year limit that students have to wait before they can declare personal bankruptcy is like a life sentence. This is crazy. Why should they be treated any differently than any other Canadian?

This came into effect only when the Government of Canada off-loaded the student loan system to the banks. When it privatized and contracted out the student loan program, the banks, in assuming the responsibility, demanded that they did not want kids to get out from under their debt for 10 years. That is baloney. The NDP supports the idea, especially in the cases of hardship, that the discharge in the event of student loan debt should be no different from ordinary Canadians. We will be negotiating that down with the ruling party.

One of the most important terms of this new bill is the Companies' Creditors Arrangement Act amendments. Under the current rules, and we have checked this out and had it confirmed recently, a judge may unilaterally and arbitrarily alter the terms and conditions of a collective agreement of the employees. When a company goes under the CCAA and is seeking to avoid bankruptcy, a judge may alter the creditors' arrangements or collective agreements unilaterally. This is fundamentally wrong. We cannot and will not abide by that.

The amendment put forward by the federal government states that a judge may intervene to the point that he or she may direct the parties, labour and management, to sit down at the bargaining table and try to negotiate amendments to the collective agreement, but the judge may not unilaterally impose changes to the collective agreement. This is a step forward, providing we can be abundantly sure that the default position will be the status quo. In other words, if the two parties at the bargaining table reach an impasse, the default position will be to revert back to the collective agreement which will stand in full force and effect as it is. Providing that is the understanding, we will support element three of the bill.

The final element of the bill we also support, and I will leave more details of this to my colleague from Hamilton Centre. It deals with personal bankruptcies, in this case for very wealthy people making $200,000 a year or more, which very few do. Usually only heads of crown corporations like David Dingwall make more than $200,000 a year. They would not be allowed to have their taxes discharged in the event of bankruptcy for a period of five years, during which time they would have to try to negotiate a payback period. In other words, the people of Canada have a chance to be made whole if these high income earners try to welsh out on the back taxes they owe to Canada.

I believe this traces its origins back to the Radwanski scandal. George Radwanski, the former privacy commissioner, owed $650,000 in back taxes and it was forgiven 24 hours before he started his job as a $230,000 a year privacy commissioner. There was no payback whatsoever to Canadians. That could not happen under the provisions of this new bill. He would have had to sit down and negotiate a five year payback period. In that scenario, making $230,000 a year as a privacy commissioner, he could have paid back $100,000 a year to the people of Canada and still earned a good salary as privacy commissioner. I support element four of Bill C-55.

We will support Bill C-55 because it is better than the status quo. It gives some relief to wage earners who are affected by bankruptcy. There are some good elements to it. We will be fighting for amendments at committee.

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, the point I was making I will make within the context of my speech. As much as we welcome the introduction of Bill C-55 and as much as we are pleased to be dealing with the important issue of benefits for employees who are the victims of a bankruptcy, we are critical in that the bill would do nothing to protect those employees who may lose their pensions altogether in a bankruptcy. In other words, if there is a $50 million shortfall in the pension plan when the company goes bankrupt, nothing in the bill guarantees the pensions of those workers. That was the point I was making to my colleague from the Bloc.

I will comment on the bill in some systematic order because there are four key elements to it. I disagree with my colleague from the Conservative Party. This is not a complicated bill. It is quite straightforward. It finds its origins in the principle that in the event of a bankruptcy the rights of workers should be paramount, they should be first, not dead last in order of priority as per the existing bankruptcy laws.

I would ask if there might be unanimous consent in the House to allow me to split my time with colleague from Hamilton Centre.

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, I am grateful for the points brought forward by my colleague from the Bloc. In her opening comments she said that we were critical that Bill C-55 did nothing to protect workers' pensions in the event of a bankruptcy. In other words, if there were a massive shortfall in a pension of $20 million or $30 million, the employees of that bankrupt company would still be without their pensions at the end of the day. Could she elaborate on that point?

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Madam Speaker, I will start by thanking my colleague from Manicouagan for his excellent question and its excellent link with POWA, the program for older worker adjustment.

Even if Bill C-55 provides a wage earner protection program, we do not yet know what will come of it. The minister has referred to precedents established in the United Kingdom and Australia. It will be necessary to go there and see for ourselves how it works in practice here, eventually, and whether workers do indeed get what they are owed.

There will still, however, be the problem of one segment of the working population: the ones aged 50 or 55 whose employer goes bankrupt and who will never get back what is owing to them and will never be able to bridge the time between their last pay cheque and their first pension cheque. These older workers need help. Some need retraining, but most need financial assistance to make it until pension age.

The connection made by my colleague from Manicouagan is a very interesting one. If it were possible, that could be part of Bill C-55. For the moment, this good bill needs complementing with POWA for older workers.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Madam Speaker, the Bloc Québécois has been working together for a long time with the steelworkers' union, among others, on proposals to amend the Bankruptcy and Insolvency Act to ensure that employee wages and pension funds are the first debts in line to be reimbursed when companies go bankrupt. Why? Because the current situation is badly flawed.

Under the current legislation in Canada, employees who work all their lives for the same company can find themselves left with nothing if it goes bankrupt. Employees lose not only their wages for hours they actually worked but also all their contributions to the company pension plan. When the Bloc Québécois found this out, it decided to hound the government to ensure that the flaws in the current legislation were corrected and wages better protected.

In October 2003, for example, the Bloc Québécois voted in favour of a motion brought before the House by the NDP. This motion asked the government to amend the Bankruptcy and Insolvency Act to ensure that the wages and pension funds due to employees are the first debts in line to be repaid in case of bankruptcy. Unfortunately, the Liberal Party voted against this motion at that time and it was therefore defeated.

When on November 15, 2004 an NDP member introduced a bill to protect wages, which was similar to the government's current Bill C-55, the Bloc was an enthusiastic supporter. My colleague from Shefford even said in this House that if the NDP had not introduced such a bill, the Bloc would have. This is indicative of the Bloc's affinity for a bill like this, Bill C-55, which it finds satisfactory. I would not go so far as to say that it finds it fully satisfactory, but it considers it a step in the right direction. It is a little step, to be sure, but still in the right direction.

In our view, another milestone has been reached in the direction of respect for working people and their dignity. The social justice principles recognized and upheld here require employees to be paid for all the hours that they have worked. Workers' wages are the only income that they have, in contrast to big corporations and bankers, for example, who have mortgages with companies that go bankrupt. Workers' pension funds are sacred. People do not work their whole lives to be left as destitute as if they had not worked hard all that time. It does not make any sense.

The new wage protection mechanism is interesting, because, as we know, Bill C-55 creates the wage earner protection program. Under this program, the federal government assumes up to $3,000 of wages owed to workers if their employer goes bankrupt. Payments made under this program are taxable and are subject to any applicable deductions.This means that, regardless of what assets the employer has, workers will be able to receive most, if not all, of their unpaid wages.

The Minister of Industry feels that this amount of $3,000 would cover 97% of unpaid wage claims, but it remains to be seen what will happen with the remaining 3%. The same thing goes for the precedents the minister has referred to.

On the other hand, workers receiving payment under the WEPP will have to transfer to the federal government their right of claim under the Bankruptcy and Insolvency Act for an amount equivalent to the benefit they have received. The government will then seek to recover the amount paid out to the workers.

This appears to be an acceptable mechanism, and we are told there are precedents for it. We will need to see what those are. The minister was not very forthcoming about them just now. We need to see how this has worked in Australia and the United Kingdom, whether workers have indeed recovered what was owed to them, and whether indeed 97% of workers recovered all that was owed to them.

The government estimates the annual cost of the program at $32 million annually, a maximum of $50 million in particularly bad years with a lot of bankruptcies. This will mean more money paid out to workers, but since the federal government will be able to recover a portion of what it has paid out by virtue of having become the holder of the right of claim, it will be compensated in part for these payments.

With Bill C-55, the federal government would create a priority higher than guaranteed creditors for workers' claims of unpaid wages and vacation pay. Their claims would take precedence over current assets such as cash, up to the not insignificant amount of $2,000.

As was said earlier, the advantage is that workers will receive their money a lot faster than they would under the existing order in which creditors are paid. They would no longer have to wait for months and years; it would most likely be a matter of weeks. If this program does not run into the same kind of trouble as the gun control program, workers will be paid faster.

However, it seems that 3% of workers will not recover all the money owed to them. We will have to see to what extent this is indeed the case and what we can do to help these workers.

Members understand that since workers will have assigned their right to claim to the federal government, it will become the preferred creditor.

Let us look now at the pension protection scheme. Bill C-55 introduces a mechanism to protect the workers' pension plans.

Under Bill C-55, a court would be able to authorize a proposal for bankruptcy or for an arrangement only when proof has been made. This means that employee and employer contributions to the pension plan that had not been paid at the time of bankruptcy or receivership have been paid or that the court is satisfied that the contributions will be paid under the arrangement, or that the involved parties made an agreement.

In addition, regular pension contributions by employees and their employers that had not been not paid when bankruptcy or receivership was declared will have priority over secured creditors in cases where the employer could not avoid bankruptcy and liquidation of its assets.

This will not solve everything. Nonetheless, as mentioned earlier, it is small step in the right direction.

There also are retirees whose income will decrease, while others will lose almost all their income. Again, this will improve the situation slightly. What is more, it establishes the principle that workers must receive the benefits from the retirement fund they contributed to over the years.

I see that my time is running out. I want to speak specifically about student loan bankruptcy. Bill C-55 proposes amending the rules for student bankruptcy. Currently, the Bankruptcy Act stipulates that a person filing for bankruptcy cannot be discharged from a student loan if that person is still at school or finished school less than 10 years earlier.

Under Bill C-55, a person can be discharged from student loans, through bankruptcy, seven years after finishing school instead of ten. The bill also allows a court to discharge a bankrupt from student loans if that person stopped going to school five years prior and has excessive financial difficulties.

I must say that the Bloc Québécois has been long committed, but only formally in the 2004 election campaign, to abolishing the period during which a student cannot be discharged, through bankruptcy, of his or her student loans. To that end, the Bloc Québécois supported Bill C-236, introduced by the NDP, which proposed reducing the period to two years. Any change that leans toward abolishing this waiting period will get the Bloc's approval.

Allow us to say that this discrimination against former students is based on the prejudices some people have toward those who declare bankruptcy. Such prejudices includes thinking it is easy to declare bankruptcy, when it is common knowledge that a judge has to decide on the matter and deny any outrageous claims. Another prejudice suggests that students are more inclined than other social groups to try to get out of commitments like debt. However, there are no studies to prove that.

Basically, the change from ten to seven years is arbitrary. Why not six or two years, or nothing at all? You can expect the Bloc Québécois to propose an amendment to this section during study in committee.

Finally, this bill is far from perfect. In fact, as I said, it is a small step in the right direction. The Bloc Québécois is in favour of the principle of BIll C-55, even though it is fully aware that employees usually have no means of protecting themselves when the employer is in a precarious financial situation.

Employees do not have the same capacity as financial institutions to absorb a loss of income for hours worked. Their salary is their only source of income, unlike the banks and the mortgage creditors.

It is difficult for an employee to assess the risks of working for a given company. When an employer is in financial difficulty, its best staff members may decide to leave the firm to avoid losing income, thus further limiting the employer's ability to deal with the problem.

The Bloc Québécois is formally committed to correcting the current situation, which is inadequate. It is pleased to see the federal government recognizing that major changes to the Bankruptcy and Insolvency Act are necessary to ensure better protection for wages and pension funds.

However, while it shares workers' enthusiasm about the introduction of Bill C-55, the Bloc Québécois notes that many future improvements will be required to respond to the lack of protection for workers' salaries, severance pay, vacation pay and pension funds.

The bill also addresses a number of separate subjects, such as student bankruptcy. An amendment will be submitted in committee. The Bloc Québécois has committed to abolishing the waiting period during which students cannot be discharged from their debt by bankruptcy, and we will be reviewing this in committee.

And so, these are the topics Bloc Québécois intends to bring up for discussion when this bill is studied in committee.

[Robert Vincent, Bloc, Shefford, QC]

Madam Speaker, in my opinion, Bill C-55 is a good bill that the unions and the workers have been awaiting impatiently for years. However, there is a problem with this bill. There is something missing and it needs to be pointed out. The minister said that the workers had vehicles and mortgages and that they needed these funds to pay for all that. So allowing them restitution of $3,000 in the event their employer declares bankruptcy would be a good thing.

There is another important aspect, and the member mentioned it earlier. He said that business owners were being treated unfairly. But so are the workers. Let me explain.

Collective agreements always contain a clause on severance pay in the event a business closes. Workers pay for this directly through payroll deductions. A collective agreement is the result of bargaining. A percentage of the envelope that the employer could give the workers as wages and wage increases is transferred into a severance pay fund. As a result, workers receive one week's salary per year of service.

This is not fair to workers. My question is for the member. Why are workers not able to recover all their money if a company declares bankruptcy? Why should workers have to pay the price for the bankruptcy by losing the money set aside in the event the company closed?

A worker with 20 years' seniority is entitled to 20 weeks' salary from the employer. This 20-week period allows workers to pay their bills until they find another job. Under this bill, yes, workers can recover part of their salary. However, there is a two-week waiting period for EI and, quite often, older workers are the ones affected. I will come back to this point.

With this bill, we should consider unionized workers who are entitled to this severance pay. They paid for it with their own money, directly from the increases they would have earned if they had not agreed to wage deferrals.

Should we put something directly in Bill C-55 so that these workers can recover their investment?

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Madam Speaker, my colleague's question gives me the opportunity to explain. I know it is not related specifically to Bill C-55, but it is related to income trusts.

The member mentioned that the United States does not have income trusts. That is true. However, it also do not have double taxation on dividends. If double taxation of dividends were not done in Canada, then we would not need income trusts. Income trusts allow the company to pass on the profits to their investors. People say that is evading taxes. What it does is pass on profits to the investors and thereby companies do not pay the double taxation to the government.

It is interesting, but it is a fundamental difference between the New Democratic Party and the Conservative Party. If we look at productivity and competitiveness, I do not believe the path to productivity and competitiveness is by double taxing those people who are taking their hard earned dollars and investing it in companies in Canada. That is what investors are doing.

By double taxing companies, we are not increasing our productivity and competitiveness. We are in fact lessening our productivity and competitiveness by giving more resources to the government, by double taxing those people who are taking their own hard earned capital to invest in our companies in Canada. That is exactly the wrong path to go down.

If the finance minister wants to come forward and say that the government will stop double taxing investors who take their hard earned money and put it into companies in Canada, we in the Conservative Party would probably say that we should look at that. That is what the United States does and maybe that would be even a better way to go than the income trust angle.

If we want jobs to be created, whether it is in northwestern British Columbia, on the east coast or anywhere else in Canada, we need Canadians to use their excess capital to invest in companies here.

Our biggest problem in Canada with productivity and competitiveness today is a lack of access to capital by small and medium size companies. If we go to any research institution in any field across the country, talk to the head of the NRC, the ARC or whomever else, they will say that our number one issue in Canada is productivity and competitiveness.

The forestry sector has been hit by unfair trade practices by our colleagues. It has had to put up $5 million in duties. This sector has actually made profits because it has responded by becoming more efficient and more competitive. The forestry sector has not done this by evading taxes. I think, frankly, it has been by trying not to pay double taxation to the government and passing on some gains to investors. The investors can then use the surplus money to reinvest back into the communities across the country.

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Madam Speaker, it is my pleasure to address Bill C-55, an act to establish the wage earner protection program act and also to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and make consequential amendments to other acts.

This is very complicated but important legislation. I am pleased to say that my Conservative colleagues have shown a great interest in the bill. A number of them will be speaking to the various aspects of it and the amendments. We will be proposing amendments at committee stage on this bill which we think will improve the bill.

It is appropriate, and the minister mentioned this, that we should recognize the member for Winnipeg Centre who raised this issue in a private member's bill. It should be noted that he brought the issue to Parliament's attention. Our party certainly appreciated his efforts in this area. We did have some disagreements, but our response, I thought, was very responsible.

We formed an internal committee under the leadership of our labour critic to try to formulate our party position on the issue even prior to the government bill being introduced. We wanted to be ready as a party to debate this issue substantively. Today I would like to offer our party's position on this legislation, but obviously other Conservative members will expand the comments in other areas.

Our view is that Bill C-55 is a good first step. We recognize that both the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act need to be amended.

It is a sad fact that every week dozens of companies and individuals declare bankruptcy in this country. We need to make sure that we amend our bankruptcy legislation so that it is clear and workable. Some 11,000 businesses and 100,000 individuals use the Bankruptcy and Insolvency Act on an annual basis. Therefore, I support making changes to both acts.

One particular proposal I support is that bankrupt individuals with more than $200,000 in personal income tax debt representing 75% or more of their total unsecured liabilities will not be eligible for an automatic discharge.

I am also pleased that we are trying to bring our bankruptcy laws in line with international insolvency laws. That being said, there are some problems with Bill C-55 that we will be seeking to remedy at committee. I have made some efforts to be in touch with various associations, organizations, labour groups and people in the private sector who are anxious to make representations on the bill. Hopefully they will all be able to do so at committee.

We will seek to clarify some issues because the legislation is rather complicated, particularly on the bankruptcy side.

The first issue I want to touch upon is wage earner protection. I want to be clear that prior to this legislation our party fully supported, as we do now, the payment of unpaid wages in a quick manner.

Bill C-55 will compensate individuals for amounts earned but not paid during the six months preceding the bankruptcy or receivership of their employer. The wage earner protection program will be funded by the consolidated revenue fund, which is essentially the taxpayers of Canada. Payments of up to $3,000 will be made to employees. I support the expedited payments to workers who are caught in bankruptcy proceedings. It is an appropriate amount of income to be paid in these situations.

Our party does have some concerns with the proposed change in the rank of creditors. Though it may sound strange, good national and provincial bankruptcy and insolvency laws improve the investment environment. Investors gain confidence knowing that should something go wrong, a stable system is in place to protect what is left of their assets.

With that in mind, wages are currently paid fifth after secured creditors and other preferred creditors. I am concerned that elevating wages above secured creditors may lead to increased financing costs for small business owners and therefore fewer investments. While I support the wage earner protection program, I do not believe that the rank should be changed from fifth to third or to a limited superpriority status. I want to be clear on this. We are not opposing payments to the workers. That should be done and it is something that our party supports.

Our party is concerned that once the government pays the worker, the government then takes a position and its position as a creditor is what has changed from fifth to third. Our concern is that this may impact the investment climate, particularly for small and medium size businesses that are attempting to access capital. I believe my colleague from Edmonton addressed that in a question to the minister.

We look forward to input from the Canadian Federation for Independent Business. I know it is concerned about this specific issue. In an attempt to address an imbalance in a system for workers for a small amount of income, we should not in remedying that injustice cause an injustice to small business owners who are creating an awful lot of jobs across this country.

We think it could be left in fifth place where it is currently. To be clear, the worker would be paid but the government would take fifth place and therefore not upset the investment climate for small and medium size businesses. My colleague from Souris—Moose Mountain will be addressing the wage earner protection program in his speech in great detail.

What I want to touch on next is the whole issue of RRSPs. Under the current laws if people go bankrupt, the trustee will seize their RRSPs. Bill C-55 will make RRSPs exempt from seizure with a few exceptions. For instance, contributions made in the 12 months prior to bankruptcy will not be exempt.

RRSPs have become a contentious issue. For example, the province of Saskatchewan exempts RRSPs entirely in bankruptcy proceedings. One of the issues we will need to address at the committee stage is whether or not there should be a cap on the dollar value of the RRSP. While pension plans can safely accumulate, RRSPs are still partly vulnerable and self-employed individuals could lose their investments and security upon bankruptcy.

This is something that was called for by investors and self-employed people who use RRSPs to build up their nest egg for retirement. We think it is a reasonable change to make, such that if people in their 40s or 50s have to declare bankruptcy, their entire nest egg will not be taken from them at that stage. Obviously the exception of the 12 months prior is to prevent someone from loading up his or her RRSP in the last few months and then declaring bankruptcy. This is a good change, especially for entrepreneurs who rely very heavily on RRSPs for their retirement years.

In addition, the bill is silent on registered education savings plans. This is an issue on which the Senate committee on banking made a recommendation in 2003 in its comprehensive report regarding bankruptcy and insolvency. I was remiss in not complimenting the report and the senators who worked on it, as well as the member from Winnipeg. The report was certainly instrumental in bringing forward a lot of the changes to the bankruptcy laws. The Conservative senators who worked on it did an absolutely outstanding job, in my view.

In addition, Bill C-55 makes changes to the treatment of student loans. Currently student loans are not discharged in a bankruptcy unless 10 years has passed since the applicant was a student. Bill C-55 reduces the period from 10 years to 7 years. In other words, the student loans of a person who goes bankrupt after having ceased being a full time or part time student for seven years will be automatically discharged. The Senate banking committee report which I referred to earlier recommended that there only be a five year wait before the discharge of student loans. I know the New Democratic Party would prefer the time period of two years.

The second issue regarding student loans is hardship. There is a provision to allow for the discharge of a student loan due to hardship. Bill C-55 allows a bankrupt person to apply to the court to obtain a discharge on the grounds of hardship five years after the person has ceased to be a full time or part time student. Five years in this case may be too long if we add in the additional issue of hardship, but that is certainly something the industry committee can look at more closely. It is a reality that all post-secondary education costs have risen since the Liberals have been in office.

While many individuals successfully finance their education and repay all their student loans on time, some Canadians are burdened by student loans to the point where they have difficulty providing for the basic necessities of life. Therefore, I think the so-called hardship clause should be examined in detail at committee.

Another issue that Bill C-55 raises is that of income trusts. This has become a very topical issue recently with the Minister of Finance, quite frankly in my view, making an absolutely unprecedented interference in the marketplace, in our investment community. This is disrupting the retirement nest eggs of thousands and thousands of Canadians. It is affecting the investment climate in perhaps the most negative way in recent years. I just cannot believe a finance minister would act so imprudently. It is an absolute disgrace.

We in the Conservative Party under our finance critic, the member for Medicine Hat, have argued that we need certainty in our investment community. We should also realize, though, that it is mainly middle class Canadians who have a lot of their retirement funds tied up in the stock markets. To cause markets to decline precipitously overnight because of the imprudent actions of the finance minister is unconscionable. I hope that decision will be reversed, but unfortunately, I do not think it will be unless there is a change of government.

The whole issue of income trusts is raised in the bill. My colleague, the member for Kelowna—Lake Country, the vice-chair of the Standing Committee on Industry will be addressing the whole issue of income trusts in his speech, how they are affected by the bill and what should be done. I do not know whether the government is intending to change how it will address income trusts with the recent actions by the finance minister, but that is something the government should address.

I want to conclude by saying that consumer insolvency has increased on average by 12.8% per year since 1968. Business bankruptcies are decreasing, which is good news. We do like the parts of the bill particularly that amend the bankruptcy legislation, which encourage restructuring of viable but financially troubled companies. Obviously, we would like to see it worked out rather than going to bankruptcy, if it is at all possible. A lot of the recommendations made to address the Bankruptcy Act that were in the Senate report in our view would lead to less regulation, less interference and would make it more efficient. Those initiatives that address that part of the act we certainly support.

We also recognize that we need better protection for wages. We are fully prepared to support that, but we obviously want the issue of where the government ties in, in terms of the creditors issue to be addressed at committee.

We do support the principles in the bill. We will be supporting the bill at second reading. At committee we will be asking all sorts of witnesses to come forward with their thoughts on the bill. We will be proposing some amendments. We hope other parties will approach the bill in the same reasonable, prudent manner that we have, and in the end we can address all of these issues in a very responsible manner.

[Joe Fontana, Liberal, Minister of Labour and Housing]

Mr. Speaker, as I began my debate yesterday with regard to Bill C-55, the wage earner protection program, I indicated that I think this is a fundamental new bill that speaks to the aspirations of working men and women who get up each and every day to work and expect to be paid for the work and the time they have put in.

Bill C-55, a combined effort with my colleague, the Minister of Industry, is about helping working men and women, about the protection of workers whose employers are undergoing restructuring or become bankrupt. Under the current system, as I said yesterday, too many workers are vulnerable when employers enter into a restructuring or file for bankruptcy. Canadian workers suffer lost wages, reduced pension benefits and an uncertainty that the collective agreements in place may be unilaterally challenged by a court. That is unacceptable to this government and, I am sure, unacceptable to most members in the House.

Let me explain again what this program will mean for those unpaid workers. Under the current system in a bankruptcy, three-quarters of the workers receive nothing for their work even though they had gone to work for their employers. At the end of the day, three-quarters of them get absolutely nothing. Overall, the average payout is only about 13¢ on the dollar. That is why I believe this bill is important for working men and women.

The situation facing unpaid workers in Canada exposes a real gap in our system. Clearly, changes are needed. That is why this government is taking action to protect workers' wages. For example, we are now proposing new measures in this bill that will provide workers guaranteed payment for unpaid wages of up to $3,000. An estimated 10,000 to 15,000 workers in all sectors, in all provinces, in both jurisdictions, are left with unpaid wages or reduced pensions due to employer bankruptcies in Canada. We intend to rectify that situation.

The reforms will also amend the Bankruptcy and Insolvency Act to establish a limited superpriority for unpaid wage claims of up to $2,000. Under the new limited superpriority, a unpaid worker will be one of the first to be paid from the current assets of the bankrupt employer.

The limited superpriority for unpaid wages better balances the risk of bankruptcy between employees and other creditors of the bankrupt company. We believe that right now the burden weighs too heavily on the employees and that workers' wages, their time, their effort and their covenant to go to work each and every day must be respected. I believe this will also assist the government in recouping its costs in the wage earner protection program because it will be the government which will try to recoup this from the estate of the bankrupt company and the workers will not necessarily have to do that.

The payment of up to $3,000 will immediately be paid to those workers who are waiting for their wages to be paid for work they have already done. To provide a better balancing of risks, secured creditors whose security was comprised by the limited superpriority will be granted a preferred claim to the extent that their security was compromised. This will reduce the effects of the reforms on secured creditors.

The issue of pensions also concerns many Canadian workers. Currently when a company goes bankrupt, contributions taken from employees' paycheques may not be paid to the pension plan for them, and the contributions that employers should have made are only paid after almost every other creditor gets paid. I am sure we would all agree that this is unacceptable. People go to work each and every day, each and every week, each and every year, and surely at the end of their working career, through a choice of their own, perhaps, their pensions ought to be there. The proposed reforms would improve this situation.

In a bankruptcy, a receivership, a proposal or a CCAA filing, contributions that an employer should have made or that were deducted from an employee's paycheque would be required to be paid into the pension plan for the benefit of workers because most other creditors get paid.

When employers are trying to restructure under the Companies' Creditors Arrangement Act to avoid bankruptcy, this reform would provide a mechanism whereby employers and unions could try to renegotiate the collective agreements under the relevant labour legislation, and that is because this government believes in collective bargaining. It believes that the arrangements that have been made between an employer and its employees should be respected and not be allowed to be taken away, that contract that has been entered into should not be frivolously taken away from the parties. If there is no arrangement that can be made, then existing collective agreements remain in force. I believe that is an important principle to which we want to adhere.

If changes were agreed to, the union representing the employees would have a right to claim in the bankruptcy an equal amount to the concessions that they granted as damages and this amount would be as an unsecured creditor. Again, that speaks to a great principle. Above all it would guarantee workers' rights again under existing collective agreements.

The reforms would also clarify that the regulatory procedures available under any labour legislation would be allowed to continue when an employer is trying to restructure under the insolvency regime. This would ensure that the rights and the obligations of the employers, unions and employees in the areas of industrial relations, occupational health and safety and labour standards would continue to be enforced by the regulators. However regulators would continue to be stayed if they were acting as a creditor to the employer.

We have listened to the stakeholders and to our partners. We have listened to Mr. Georgetti at the CLC; to Mr. Hassan Yussuff, the secretary-treasurer; to Mr. Buzz Hargrove from the CAW; and to Mr. Ken Neumann from the United Steelworkers Union. We have consulted widely with the small business community to ensure that this is a balanced act that speaks to not only the needs and the requirements of small business but, more important, to the working men and women who in fact make businesses successful and make this economy so successful.

Therefore we have put forward an ambitious legislative agenda. I believe there is consensus in the House to support the bill. I would hope that the other parties support the bill. The day has come that we stand up for working men and women in this country, protect their wages, protect their pensions, protect their collective bargaining and the negotiations that have taken place. We believe this is a forward looking plan that speaks to our constituents, to the men and women who, each and every day, get up and go to work. All they expect is to be paid their wages, that their pensions are in place and that their collective agreements will stand.

We look forward to the support of all parties. This is too important of an issue for us to play politics with. We would hope that the committee would deal with it as quickly as possible so we can become law in the next number of weeks.

[Joe Fontana, Liberal, for the Minister of Industry]

moved that Bill C-55, An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make consequential amendments to other Acts, be read the second time and referred to a committee.

Madam Speaker, in the time that is left today, I am pleased to speak to a very important bill, Bill C-55, which is a balanced and comprehensive reform package for insolvency legislation tabled by my hon. colleague, the Minister of Industry. The proposed changes will modernize our insolvency legislation, ensuring that the system better responds to the needs of the marketplace.

Just as important, I want to talk about how the reforms will improve the protection of workers whose employers undergo restructuring or become bankrupt. I am very passionate about this topic. Under our current system, too many workers are vulnerable when their employers enter into a restructuring or file for bankruptcy. Canadian workers suffer lost wages, reduced pension benefits and uncertainty that their collective agreements may be unilaterally changed by a court.

The government has heard from Canadian workers about the need to ensure that they are more fairly treated when their employers suffer economic hardship. The reforms introduced by my colleague will do just that.

For example, we are proposing new measures, including the wage earner protection program, for the first time in our history which will provide workers with a guaranteed payment for unpaid wages up to $3,000. An estimated 10,000 to 15,000 workers in every workplace across the country in both federal and provincial jurisdictions are left with unpaid wages or reduced pensions due to employer bankruptcies in Canada. These workers did not agree to become lenders to their employers when they were hired. They cannot afford to bear the risk of coming up empty-handed after they have done their hard work each and every day. They need to have their paycheques to buy groceries, to pay their mortgages and to pay their car payments.

Let me explain what the program will really mean for these workers. Under the current system three-quarters of unpaid workers in a bankruptcy receive nothing for their work, zero. The average payout overall is only 13¢ on the dollar. In Canada, existing federal and provincial labour laws protect the workers who perform work but are not paid by their employers. However, these labour laws cease to be in effect when a bankruptcy or receivership occurs, because currently, bankruptcy law supersedes labour laws in these cases.

The situation facing unpaid workers in Canada exposes a clear gap in our system. Clearly, changes are needed. That is why the government is acting on behalf of the workers of Canada. The wage earner protection program will apply when an employer goes bankrupt, or is put into receivership under the Bankruptcy and Insolvency Act. These are the employees who are unpaid. The employees can apply to the program to have their wages paid, up to $3,000, immediately upon that occurrence.

The wage earner protection program will operate efficiently. It will be delivered seamlessly, building on the existing relationships between trustees and receivers and the employment insurance system.

This type of program is not radical or new, but it is for our country. Many countries already have a similar program to protect their workers, such as the United Kingdom and Australia. The cost of the program is only going to be $30 million a year. In the event of a dramatic increase in the number of bankruptcies, it could go as high as $50 million. That is not a big investment from the Canadian government to protect the working men and women of this country.

The government expects to recover up to half of the program payouts as a creditor to the employer. Under the wage earner protection program, the government will assume the workers' claims against their bankrupt employer's estate. This means that the government will recover a portion of its costs by making claims against the employer's estate and therefore, the employee does not have to do it.

The reforms will also amend the Bankruptcy and Insolvency Act to establish a limited superpriority for unpaid wage claims up to $2,000. Under the new limited superpriority an unpaid worker will be one of the first to be paid from the current assets of the bankrupt employer.

The limited superpriority for unpaid wages balances the risk of bankruptcy between the employees and other creditors of the bankrupt company. Right now the burden weighs too heavily on the employees. It will assist the government in recouping its costs for the wage earner protection program by making more assets of bankrupt companies available for the employees and wage claims. That is putting the employees first.

I will have more to say about this tomorrow morning.

Extension of Sitting Period

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I thank my colleague from Yukon for his enlightening words. I must say that it is always a pleasure to listen to such a cultivated individual as my colleague from the Yukon as he shares his views in such an eloquent fashion.

I would like his views on one aspect of what is known as the NDP's better balanced budget deal, an aspect that is not raised as frequently as it should be. It is the element that I am perhaps most proud of and is something that is not found so much in Bill C-48 as it is in Bill C-55: the wage protection fund.

The workers' wage protection fund was part of the negotiations between the NDP and the Liberals. It is a special fund whereby in the event of bankruptcy workers would not have to wait their turn with the other unsecured creditors when the trustee is discharging the proceeds from the assets of the bankrupt company.

This is important because there are many commercial bankruptcies in Canada in which the employees are owed back wages, holiday pay or pension contributions. I think it was an incredibly compassionate move on the part of the two principal parties who negotiated this deal to include these unemployed workers who may be owed back wages, et cetera. This will find itself in Bill C-55.

I would ask my colleague from Yukon if he could enlighten me as to how a party that used to call itself the grassroots party could turn its back on unemployed, grassroots, individual workers who were victims of a bankruptcy and who would not get their back wages. Now they will. I wonder if he could enlighten me on how any party that professes to stand up for working people could vote against a wage protection fund on behalf of working people.

Business of the House

[Tony Valeri, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, our principal legislative objectives continue to be Bill C-43, the third reading vote of which will take place after question period, and Bill C-48. The government believes these bills reflect public interest and the enactment of both of these bills is required before the House adjourns for the summer. As the hon. member mentioned, if the House does not pass Bill C-48, we will be here in July and August. Consequently, we will continue to give these bills priority until they are disposed of.

We will then consider report stage of Bill C-38, the civil marriage bill; Bill C-25; Bill C-28; Bill C-52, the Fisheries Act; Bill C-47; Bill C-53; Bill C-55, the bankruptcy bill; and Bill C-37, the do not call legislation.

Wage Earner Protection Program Act

[Ken Dryden, Liberal, for the Minister of Industry]

moved for leave to introduce Bill C-55, an act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make consequential amendments to other acts.

(Motions deemed adopted, bill read the first time and printed)