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 bankruptcy.

Topics

Wage Earner Protection Program Act
Government Orders

1:30 p.m.

The Deputy Speaker

Is there unanimous consent?

Wage Earner Protection Program Act
Government Orders

1:30 p.m.

Some hon. members

Agreed.

Wage Earner Protection Program Act
Government Orders

1:30 p.m.

Conservative

John Duncan Vancouver Island North, BC

Mr. Speaker, I thank the member for Glengarry—Prescott—Russell, because he has indeed read my mind and I think the will of the House right now.

In a sense, we have just heard a farewell speech from our esteemed colleague from the Bloc. He is someone who has travelled widely and also has had many overlaps with other members over the 12 years he has been here. I have been here that same length of time. I also know that some of the newer members have a strikingly high opinion of all of their dealings with the member for Verchères—Les Patriotes.

I have some very vivid memories of the member, particularly from the trade portfolio when I held that portfolio as critic, and also from some international travel. They say that we do not really know someone until we travel with them and then we see them warts and all. Those of us who have been put on the same bus,on the same airplane or in the same routine, very often in a strange or foreign land for an extended period of time, get to know each other very well. I would say that the member for Verchères—Les Patriotes has indubitably passed all those tests.

The respect that the member carried had a personal impact on me. There was a point in time when there was a document produced by him which was sent to all members of Parliament. I read that document, which was a very lengthy document, and I could tell that he had poured his heart and soul into writing it. It was basically an analysis and a description of the expulsion of the Acadians. I know there is a personal family connection for the member and I knew that this was something he thought about for a long time. I complimented him on the quality and calibre of the writing. It certainly provided me with a point of view I highly respected, one that touched my heart. This is the kind of member of Parliament that we have been blessed with in this place for the last 12 years.

I feel compelled to wish my colleague good fortune in where he is going. I know that my colleague from Blackstrap beside me could not help but notice the passion that the member brought to the job and to his endeavours.

At this time, if the member for Verchères—Les Patriotes wishes to respond to my non-question, he would be more than welcome to do so.

Wage Earner Protection Program Act
Government Orders

1:35 p.m.

Bloc

Stéphane Bergeron Verchères—Les Patriotes, QC

Mr. Speaker, I will be brief. I must say that it is starting to be somewhat embarrassing to have to reply to every compliment paid to me. I am deeply touched and moved by so much praise.

I am also touched by the generosity of the House, which has agreed to extend by 10 minutes the time for questions and comments to allow members who may wish to pay me tribute to do so. Those who will be speaking next may have something other than praise to say, who knows. That said, I thank my hon. colleagues for being so kind and graceful to me.

I would be remiss if I concluded these remarks without thanking my hon. colleague for what he said and telling him how much I too appreciated the opportunity of working together on the issue of international trade. He should know that it was a great pleasure for me to work with him on those occasions when, for instance, we went on trade missions outside Canada.

Wage Earner Protection Program Act
Government Orders

1:35 p.m.

Bloc

Carole Lavallée 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.

Wage Earner Protection Program Act
Government Orders

September 29th, 2005 / 1:35 p.m.

Bloc

Stéphane Bergeron Verchères—Les Patriotes, QC

Mr. Speaker, I have been greatly moved by all the comments and praise. These are particularly meaningful when they come from members of one's own party.

I thank my colleague from Saint-Bruno—Saint-Hubert, whose words were, I gather, on behalf of a number of Bloc Québécois colleagues.

Wage Earner Protection Program Act
Government Orders

1:35 p.m.

Some hon. members

All of us.

Wage Earner Protection Program Act
Government Orders

1:35 p.m.

Bloc

Stéphane Bergeron Verchères—Les Patriotes, QC

I am told she was speaking on behalf of all my colleagues in the Bloc Québécois in delivering this message, not one of farewell, but rather of au revoir. I will, in fact, never be far away. I have always said that, from the moment I announced my intention of leaving the House of Commons before long.

It is now my turn to express my appreciation and consideration to all past and present Bloc Québécois colleagues. It has been a real pleasure and a great honour to work with them.

I am absolutely sure that I have made the right decision. I am leaving, more than ever convinced of the importance and pertinence of the Bloc Québécois. I am leaving, more than ever convinced that the Bloc Québécois, in conjunction with the Parti Québécois and the other sovereignist forces in Quebec, will lead Quebec to its logical destiny, that is as a member of the concert of nations.

Wage Earner Protection Program Act
Government Orders

1:40 p.m.

The Deputy Speaker

I thank the hon. member for Verchères—Les Patriotes for his speech and his personal comments.

When I was first elected in 1993, at the same time as the hon. member, I was totally unilingual. He was the whip for the Bloc and I for the Opposition, and so I told him that my problem with French was that he spoke too fast for me. I think that was the problem.

The hon. member is a real professional, a true democrat, a good man and a good friend. Good luck, my friend.

Wage Earner Protection Program Act
Government Orders

1:40 p.m.

Liberal

Don Boudria 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.

Wage Earner Protection Program Act
Government Orders

1:55 p.m.

Bloc

Gérard Asselin Manicouagan, QC

Mr. Speaker, I want to ask the member for Glengarry—Prescott—Russell what he thinks about workers who invested in company pension funds for many years but then lost everything when their company went bankrupt because the contributions from employees and the employer were put into the company's consolidated fund.

Does he agree with me that the pension funds of these workers should be protected by law? These pension funds could be put into trusts, consolidated funds or guaranteed special-purpose funds, so that workers whose company goes bankrupt will not lose the money they put in their pension fund.

Wage Earner Protection Program Act
Government Orders

1:55 p.m.

Liberal

Don Boudria Glengarry—Prescott—Russell, ON

Mr. Speaker, I agree entirely. I do not know if I am going to commit a faux pas in the eyes of some, but in my view, we should be protecting even more than accrued unpaid wages, which are in fact previously accrued assets. At some point in the case of insolvency, if someone is a worker, he or she can decide not to provide services any more, but a worker cannot withdraw past contributions.

In my view, the threshold is even more important when it is a matter of contributions to a retirement fund or any previous contribution at all. These are accrued assets, and the way things stand now, the conditions cannot be changed by the worker.

At most, employees can say that since the employer is not paying anymore, they are leaving right away. This is technically possible when such a situation arises. However, nothing can be done to change a previously established condition, in particular one related to contributions made to a retirement fund 17 years earlier. This can no longer be changed.

That is why the protection in this regard should probably be increased to better shield these kinds of assets, if I can call them such.

Wage Earner Protection Program Act
Government Orders

2 p.m.

The Deputy Speaker

There will be an additional eight minutes after question period for further questions and comments. We will now move to statements by members.

Crime Prevention
Statements By Members

2 p.m.

Liberal

Paul Szabo Mississauga South, ON

Mr. Speaker, safe homes and safe streets make safe communities. We as federal legislators help through progressive legislation which responds to the realities of criminal activity and which provides effective deterrence and other crime prevention measures.

Policing authorities and the courts also need the means and resources to enforce and defend our laws. National, provincial and community crime prevention organizations contribute through education, training and research. Business and industry does its role through their support of community based crime prevention initiatives, and our families play a role by providing guidance and encouragement to youth and others they encounter.

We all have a role to play and we can all help if we are better informed about the facts related to crime in our own communities. Therefore, I want to advise the House that last weekend I participated in the fifth annual Mississauga crime awareness day which was attended by over 10,000 residents.

I would specifically like to recognize and congratulate the Mississauga Chinese Business Association who organizes this event which has helped Mississauga to remain one of the safest communities in all of Canada.

Age of Consent
Statements By Members

2 p.m.

Conservative

Vic Toews Provencher, MB

Mr. Speaker, I rise today to express my deep disappointment with the Liberal government's failure to protect Canadian children by voting yesterday against two Conservative Party initiatives to raise the age of sexual consent from 14 to 16.

Canada has one of the lowest age of sexual consent laws in the world. This fact has put our children at risk of exploitation from much older sexual predators. The Minister of Justice claims that children between the ages of 14 and 18 are already protected by the Criminal Code. However, anyone who understands how a criminal trial works knows that these provisions place the burden of the trial on the shoulders of the young victims making prosecution very difficult.

The decision by the Liberals to oppose raising the age of sexual consent is a matter for which the people of Canada will ultimately hold this government to account.