House of Commons Hansard #128 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was workers.

Topics

Highway 30 Completion Bridges Act
Government Orders

4:55 p.m.

The Deputy Speaker

Is it the pleasure of the House to adopt the motion?

Highway 30 Completion Bridges Act
Government Orders

4:55 p.m.

Some hon. members

Agreed.

(Motion agreed to, bill read the second time, considered in committee, reported without amendment, concurred in, read the third time and passed)

The House resumed consideration of the motion 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.

Wage Earner Protection Program Act
Government Orders

September 29th, 2005 / 4:55 p.m.

Conservative

Lynne Yelich Blackstrap, SK

Mr. Speaker, I would like to ask the member about the proposed legislation and the student loans again, about applying for discharge after seven years but allowing hardship discharge after five. I wonder if the member would support an amendment to allow application for hardship at any time.

I also want to hear the member's comments on the exemption for RRSPs. Currently RRSPs related to insurance are exempt, but most others are not. In the proposed legislation, a wider range of retirement savings and products would be exempt from seizure in bankruptcy. I am wondering if the member supports either/or.

I also would like him to comment on pensions and whether there should not be a push to tighten pension laws so that companies cannot underfund them.

Wage Earner Protection Program Act
Government Orders

5 p.m.

NDP

Brian Masse Windsor West, ON

Mr. Speaker, I think it is important to focus on the student issue in this bill. I believe we should be moving toward treating students like everyone else in terms of bankruptcy. I think it is very condescending not to. It was when the government outsourced the student financing element to the banks that this 10 year provision was created.

I know that people who go to school want to pay back what Canadians have provided for them. People who are in our school system are not thieves. They are not abusive. They are individuals who are going to better themselves. In every system we are going to have some problems and we have to seek that out, but in terms of repayment of student loans we are not having a problem to a significant degree.

I would argue that there is more benefit to treating them the same as everyone else. It would give us a stronger educational system because people would know that they would not have a life sentence. After 10 years if students cannot declare bankruptcy, they have the amount of the debt they have accumulated and the spiral of problems they have related to employment, and their life gets significantly difficult. That erodes all the benefits of the training they have undergone in university or in colleges such as the one I have mentioned, my local college, St. Clair College, a fine institution.

With regard to the issue on underfunding pensions, I think the member for Blackstrap makes an excellent point. The pension issue is one that is critical to all Canadians. In fact, I have introduced the notion of a seniors' charter of rights. Part of that is to protect pensions. Underfunding pensions is a significant problem that becomes a burden not only to the individuals but also to the country. I think that is a separate piece of legislation, but I think it is an important issue that has not had the attention it deserves. It is one that really undermines our economy because it can have significant consequences.

Wage Earner Protection Program Act
Government Orders

5 p.m.

Conservative

John Duncan 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 Act
Government Orders

5:10 p.m.

Bloc

Carole Lavallée 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.

Wage Earner Protection Program Act
Government Orders

5:15 p.m.

Conservative

John Duncan Vancouver Island North, BC

Mr. Speaker, I am not sure I fully comprehended the question.

In terms of the amendment dealing with student loan repayments, I have no difficulty with what the Bloc is presenting. I think that is an appropriate amendment. For example, we would support an amendment to apply for discharge after seven years and to allow for discharge based on hardship at any time. I think we are basically on the same wavelength. I am not sure if that is what the Bloc member was driving at or not.

Wage Earner Protection Program Act
Government Orders

5:15 p.m.

Conservative

Jim Prentice 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.

Wage Earner Protection Program Act
Government Orders

5:25 p.m.

Esquimalt—Juan de Fuca
B.C.

Liberal

Keith Martin Parliamentary Secretary to the Minister of National Defence

Mr. Speaker, the member's comments were well received and well researched. As he knows, the government has put forward this wage earner protection plan for the protection of workers across the country who from time to time are confronted with the horrible situation where the company they work for has gone into receivership or bankruptcy.

Our government has listened very carefully to those workers and has come up with a plan to try to address a concern that grips them at the very heart and soul of their being. The particular problem workers are confronted with, which is the loss of their pension plan, is something that affects their future security. That is why we have come up with the wage earner protection plan to address this issue.

The minister estimates that the amount that workers will receive will cost the taxpayer and the government's coffers about $50 million. We think this is money well spent. It is being spent on workers, as I said before, who are confronted by a horrific situation where their future income security and pension security is being compromised.

If the hon. member disagrees with the amount of money that the minister and our government has proposed a worker would receive, what money would he propose that a worker receive? Would he put a cap on it? How would he figure this out? What moneys would he give to a worker confronted by this problem?

Wage Earner Protection Program Act
Government Orders

5:30 p.m.

Conservative

Jim Prentice Calgary North Centre, AB

Mr. Speaker, essentially the Conservative Party had suggested that the protection be capped at the amount of $5,000 per employee, as opposed to $3,000 per employee, which is what we find in the legislation. I do not see why we would not see greater protection for working class Canadians. I think in the House there is a consensus on the kind of protection that everyday people need in the event of a bankruptcy. Three thousand dollars is a start. I do not know why we would not go with the Conservative proposal, which was for $5,000.

Wage Earner Protection Program Act
Government Orders

5:30 p.m.

The Acting Speaker (Mr. Marcel Proulx)

It being 5:30 p.m., the House will now proceed to the consideration of private members' business, as listed on today's order paper.

The House resumed from June 1 consideration of the motion.

Textile and Clothing Industries
Private Members' Business

5:30 p.m.

Bloc

Marc Boulianne Mégantic—L'Érable, QC

Mr. Speaker, I am very pleased to rise today on the motion of the Bloc Québécois regarding textile and clothing.

People working in these sectors do not know what tomorrow will bring. Closures are rampant and jobs are disappearing.

In the last several years, we have seen a shift toward low wage countries in the production of clothing and textile. This shift has increased with the elimination of the quota system.

In Quebec, for example, where most Canadian clothing and textile industries are located, clothing imports are on the rise and are increasingly coming from emerging and developing countries, particularly China, which captures alone more than 40% of Quebec imports.

The decline of textile and clothing industries will worsen if the current Liberal government does not act in the short and long term by taking rigorous measures.

Statistics show that clothing manufacturing lost a third of its manpower between 2002 and 2005, a loss of almost 20,000 jobs held mostly by female workers. In my region, Chaudière-Appalaches, this represents a loss of 52% of the manpower.

In addition, since the end of the Multifibre Arrangement, the losses have been mounting. People in this sector are very worried. Worry has become the daily lot of people in my riding, who feel more abandoned than ever by the Liberal Party.

Worst of all, the government's response—that is to say, the response of this party—reveals not only its inertia but a lack of humanity. They simply said that the problem was not as bad as all that and we should just try gradually to keep the system as it is.

Since the start of the year, 500 jobs have been lost in my riding of Mégantic—L'Érable. The vast majority of these jobs, as I said earlier, were filled by women, mothers of families, adolescent girls or mothers raising families on their own. But that does not disturb this government at all.

Plants in the RCMs of Granite, Amiante and Érable are closing, while the government remains arrogantly devoid of all humanity. The loss of 500 jobs is really something. I can name a few of the companies where these job losses occurred: Avanti in the Érable area; Canadel in the Lac-Mégantic area; Confection East Broughton; Confection Patry and Keystone. Those are all companies that closed or moved to Mexico. At the last Canadel plant in the Lac-Mégantic area, 185 people lost their jobs.

The government refuses to offer any solutions. The people in my riding have not given up. A little while ago, there was a petition to pressure the government to do something and get some results or solutions. In three weeks, more than 7,000 people signed our petition. This was an extremely important sign of solidarity to show that the government is an accomplice in this piece of our economy that is unfortunately going down. The workers in our region, in our riding, will just turn to other sectors or lose their jobs.

The plant closings in the textile industry are a trend that is not about to stop so long as the government does not take radical action.

There are solutions. The Bloc Québécois has some to propose to the government, but unfortunately it does not listen.

We already said that we need quota monitoring. China is obviously a major problem. Since the quotas were eliminated there has been a complete invasion. In fact, China accounts for almost 40% of our imports. Until we see an aggressive intervention in this regard, China will continue to invade our market.

Under WTO rules, countries can restore quotas for periods of 3 to 5 years. That could reduce imports by about 7%. That would be an extremely important measure that we should take and it is among the solutions put forth by the Bloc.

There is also another practice that should be stopped and it is the importation of foreign-made clothes without any customs duties. We must act against the invasion of foreign products. The U.S. did it. The EU is doing it for linen. Each country is reacting at one time or another to put a stop to the invasion of its market.

At the end of my intervention, I would like to move an amendment.

I move, seconded by the hon. member for Montcalm and with the support of the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, the following amendment:

That the motion be amended by deleting all the words after the word “particularly” and substituting the following:

“by allowing clothing made with Canadian textiles but manufactured abroad to be imported without customs duties and by creating an income support program for older workers.”

Textile and Clothing Industries
Private Members' Business

5:35 p.m.

The Acting Speaker (Mr. Marcel Proulx)

This amendment is in order.

The member for Drummond.