Thank you very much, Mr. Chairman.
I didn't think I'd be back so soon in front of this committee. I'll be brief, to respect the other witnesses.
The Nortel pensioners have met, and I wanted to give you some idea of some decisions they've had to make over the last five days.
When I was in front of you last Thursday, I stated that we had an opportunity to continue our health benefit plans until the end of the year. We'd also reached an agreement that our pension plan would not be wound up until September 30 of this year, at which time we would take a cutback of about 31% of our pension plan. This wasn't referenced in my handout, but I did state that this was all subject to court approval.
I honestly thought that when we went in front of the judge on March 3, the judge would approve the agreement. In the agreement, we actually gave up the right to higher priority ranking in the winding up of Nortel under CCAA. What we did ask for, and we fought hard for this, was the right, should the BIA law change prior to Nortel's moving into bankruptcy--assuming that the government, under those new bankruptcy law changes, would grant us higher priority status--to argue for that higher priority ranking in the bankruptcy courts.
One day later, at four o'clock last Friday, the judge ruled that he would not approve the settlement agreement with this clause, which I call H2, because it did not remove the uncertainty and doubt of the final agreement for other Canadian creditors, such as the bond holders and the Unsecured Creditors Committee.
Now when I began this process of bankruptcy and bankruptcy litigation with Nortel, I was told by my counsel that this is the Wild West--you never know what's going to happen. We, as pensioners, have suffered in this Wild West in terms of trying to get what we believe is justly ours.
With three business days left, we were left to make a decision. Do we assume that the federal government is going to act on our behalf and change the Bankruptcy and Insolvency Act? And do we stop our health benefits on Wednesday of this week? Do we assume that the federal government is going to work on our behalf and change the BIA, or do we face the possibility of having the pension plan wound up on Wednesday? There's a small group of the terminated who were going to get $3,000 from the termination agreement, and they were going to lose that as well.
So we had to make a bet. We did not believe that the federal government was going to act in time on our behalf. We could not take the risk. The people on long-term disability were facing similar decisions. So this morning, we instructed our counsel to go in front of the judge and remove this clause that gave us faint hope in terms of the bankruptcy laws being changed. We expect to have a full court hearing tomorrow. With that, we will preserve our health payments to the end of the year. And it will give us some time before the pension plan windup on September 30 so that we can negotiate with the Ontario government to implement what we call the “pension orphanage”.
When I talked to you on Thursday, I said that we were looking for fairness in bankruptcy laws. Hopefully you understood that the pensioners, the people on long-term disability, and the terminated are not fairly pitted against the bond holders and other creditors. We are all dependent on a single corporation for our pension plans.
At the same hearing, we heard from a Mr. Fréchette, a pensioner from Atlas Steel. He said that if the bankruptcy laws had changed in time for them, it would have made a difference. The gentleman from Atlas Steel said that they understood that any changes weren't going to affect them and help them out in time but that they came forward to help out the people from Nortel and to change unjust laws.
Every month, when Nortel pensioners open up their pension stubs, we will be reminded of the inequity of the system and of whether governments acted or not on our behalf. The Nortel Retirees' and Former Employees' Protection Committee will continue to lobby Parliament and the Government of Canada for changes to these bankruptcy laws. We figure that they are extremely unjust.
Finally, this is my faint hope clause, and it rests with the Government of Canada: the Government of Canada, being the supreme law of the land, still has the potential to make retroactive changes to the bankruptcy laws and to help some 20,000 Canadians who are affected by this insolvency. At the same time, it can save the downloading of some $355 million to Canadian taxpayers because of the costs of this insolvency.
Thank you.