Bill C-476 (Historical)

An Act to amend the Bankruptcy and Insolvency Act and other Acts (unfunded pension plan liabilities)

This enactment amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to ensure that unfunded pension plans, liabilities are accorded the status of secure debts in the event of bankruptcy proceedings.
The enactment also amends the Canada Business Corporations Act to provide an efficacious procedure by which former employees of a bankrupt corporation who are owed amounts by the corporation can proceed with claims against its directors.
As well, the enactment amends the Employment Insurance Act to specify that payments made to a claimant out of the proceeds realized from the property of a bankrupt or by a government in the event of bankruptcy will not be deducted from benefits payable to an employment insurance claimant.
Finally, the enactment amends the Wage Earner Protection Program Act to include proposals, compromises and arrangements.

Pensions

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Madam Chair, in fact I originally proposed Bill C-476, the Nortel bill. It was not timely and the member took it over and brought it to committee, for which I thank him and for the work he has done on it.

It is very clear that we have a system in Canada. The old age security system, which started in 1927, was to end poverty. The CPP was intended to do the same thing. Both have worked reasonably well over the long term, but the reality is that going forward, as the member for York West was saying a few moments ago, with the number of people who are going to be facing retirement in the coming years, it is essential that we build and expand that foundation. By taking the core assets of CPP and increasing them over 35 years, we can double the portion that is available.

In Hamilton, U.S. Steel right now is trying to take away the defined benefit plan for steelworkers, and that is happening in multiple workplaces across the country. If we lose the defined benefit plan, what is going to catch these people if the market is down when they do retire? We have to work on that foundation.

Sustaining Canada's Economic Recovery Act

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I am pleased to rise today to speak to Bill C-47. It is certainly interesting to watch the debate as it has unfolded and listen to the Liberals talk about the corporate tax cuts and how they would stop them, when they were the party that started them when they were in government. It is just amazing.

The NDP has been consistent for the last number of years, calling for an end to these tax breaks, and suddenly the Liberals have jumped on board in a big way. I guess it is interesting when they take our speaking notes.

My particular focus today is going to be on pensions and seniors. I am kind of saddened because there has not been enough talk about the seniors' situation in the House during the debate.

You will know, Mr. Speaker, that I spent the last two years touring Canada talking and listening to Canada's seniors. I have been saying throughout the 38 community meetings that I have attended from coast to coast that it is time to change the conversation.

We have EI premiums and we have our pensions, which are deferred wages. Neither are payroll taxes. They are purchases that we make as Canadians to protect our future. That expression, payroll taxes, was started in Canada by the former Liberal government, and we have to take that language back and bring about that change, take it back away from corporate Canada, away from the right wingers who view this as their own particular territory.

Pensions are clearly the assets and money that belongs to workers. EI premiums are very clearly intended to purchase insurance against hard times. As I said, they are not payroll taxes, no matter who says they are. They are premiums for the provision of protection for workers and their families.

Two years ago when I met a number of delegations of seniors, they were talking to us and trying to get our attention, saying that there was a crisis developing on pensions in Canada. Neither the Liberals nor the Conservatives were seized with pensions at that time.

I reported to the House that the NDP held round tables two years ago, followed by months of intensive research, and on June 9 of that year we proposed an opposition day motion on pension reform. You will know, Mr. Speaker, that the NDP opposition day motion on pension reform was passed unanimously by the House.

That particular motion set out a road map for retirement security for seniors, a road map that to date the government has failed to implement. It was during the debate that our leader, the member for Toronto—Danforth, called for an immediate increase to the guaranteed income supplement to help 300,000 seniors who live below the poverty line. I will say that a majority of those seniors who live below the poverty line are women.

We also laid out a strategy for the doubling of CPP, and we said there must be a national pension insurance plan. Later in that year, October 22, 2009, the member for Toronto-—Danforth, our leader, and I released a New Democrat seniors retirement security plan.

I want to say again that the first line in the House that was spoken by the leader of our party was to address the situation with seniors who live in poverty. We must eliminate seniors poverty now, and it can be done.

This is a national disgrace, but how did it happen? How during 13 years of a Liberal government with five surplus budgets and five years of the current Conservative government did they allow this to happen on their watch?

It happened because the Prime Minister and the federal Liberals before him put the interests of Bay Street ahead of the interests of the workers and the pensioners of this country. I am here to say that our New Democratic caucus under the leadership of the member for Toronto—Danforth will no longer stand for this.

Today when I look at Bill C-47, I do not see the things seniors need. I remind the government that the NDP plan proposed an immediate increase to the GIS to close that seniors' poverty gap, and we can even put a price tag on it. Statistics Canada says fixing the poverty gap for seniors would cost less than $700 million.

This $700 million would ensure dignity and respect for the seniors who built this country. However it is not here in Bill C-47.

To pay for this particular boost for seniors, all it would take is the cancelling of one of the yearly tax breaks to the corporations of this country, the tax breaks that have been going to the banks and big oil and big gas.

Next, in consultation with the provinces, we can begin the process of strengthening the Canada pension plan. We know, and I have reported in the House before, that 63% of working Canadians today have no pension and no savings. How could they save when they are barely getting by? Consider that 93% of all working Canadians are part of the Canada and Quebec pension plans. There is no other option that will provide the advantages at so little cost.

Specifically, we are proposing a phasing in, in consultation with the provinces, of the doubling of CPP. I reported to the House just last week that pension expert Professor Kesselman and Jack Mintz, who worked for the government during the studies they have been doing, both agreed with the NDP plan for the increase in CPP. Our plan, as it is proposed, would increase the benefit from $908 a month to $1,817 to help secure a livable retirement for Canadians.

I also believe it is time for a national system of workplace pensions insurance. I am sure it is not news that underfunded pensions are an epidemic and collapsing pension plans are demanding a range of solutions. Today we are still fighting to move workers' underfunded pension assets to the front of the creditors line during CCAA and BIA.

Members will likely recall that I introduced Bill C-476 to protect pensions assets during CCAA and BIA in the House and another bill, Bill C-487, which would have done the same for LTD. Today I would suggest that one of the main problems facing Canadians is preserving private pension assets.

We are all aware in the House of the situation of Nortel workers. The Nortel workers became the poster children for the suffering workers who face companies using CCAA or BIA to avoid their responsibility to their workers and retirees. The frustrating thing for the NDP caucus remains the fact that the bill could have been before the House before the Nortel pensions were reduced to 64%, had the Liberals and Conservatives supported my original call for unanimous consent to address that motion. We could have helped those workers, instead of watching them lose over 30% of their pensions.

Beyond CCAA and BIA, the NDP recognized that workers also need insurance guaranteeing a minimum pension income when their workplace plans fail. As part of the NDP's seniors' retirement security plan, we proposed a self-financing mandatory insurance system funded by the plan's sponsors, and I stress the word “self-financing” as there would not be a cost to the government.

This is not as groundbreaking as it sounds. In fact, this is standard in the United States, Britain and elsewhere in the world. There are countries in which the governments actually back the pension plans. Where has Bill C-47 contemplated such important measures? The answer is it does not.

The NDP has proposed a national plan ensuring pension payouts are secured up to $2,500 a month. We insure our cars, we insure our homes and, in fact, we insure ourselves. Is it not common sense that we should insure our futures, our pension plans?

We are pleased that in June, as the last session of the House was ending before the summer break, the Minister of Finance agreed with the NDP plan for enhancing CPP. In fact, recently the Ontario minister of finance also agreed with New Democrats in our call to increase CPP.

I want to talk a bit about the government's actual spending priorities that we have heard repeatedly. They include $9 billion in corporate tax cuts so far with the one this year; $16 billion for stealth fighter jets; $9 billion for prisons, and I have suggestions of some people we might put in them; and $130 million last year in advertising. Yes, everyone heard that, $130 million spent on advertising. What did seniors get? They got $1.55 a month. People can imagine their disappointment.

Bankruptcy and Insolvency Act

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Madam Speaker, I am very pleased to finally have the opportunity to rise and speak to this most important issue. I thank the member for Thunder Bay—Rainy River who has taken up this bill. In 2008 the NDP started looking at the problems with pensions. Over the period of late 2008, early 2009, we had two consultative meetings and one of the things that began to surface were the stories around the serious situation of Nortel.

In 2009 I introduced a bill very similar to the member's, Bill C-476. It was the hope of the NDP, me and the people at Nortel that the bill would have been dealt with. We hoped that by February of this year we could have had it through all stages in the House, to committee and back to the House. It would have allowed for action that would have helped the situation of the Nortel workers in particular. Unfortunately, the government took the decision to prorogue and as a result there was a delay.

My Bill C-476 would not make it here except with the unanimous consent of the House. I raised it in this place and both sides of the House said no. Therefore, it put us in the position of having the good member for Thunder Bay—Rainy River using his order of precedence to put this bill forward, and that is important. A private member only has so many opportunities to move a bill and he set aside his own critic area in order to do the right thing for the workers of AbitibiBowater, Fraser Papers and others.

As we went forward in the debate, the Liberal Party spoke about 1963 and The Gazette, referring to the opposition. I will remind this place that it was Stanley Knowles who first proposed CPP and under a minority government of the Liberals, it was put forward.

Last fall, on the steps of our Parliament, speaker after speaker addressed the 4,000 Nortel workers about what we would try to do for them. In a subsequent throne speech, the government of the day said very clearly that it would look at the situation of bankruptcy, insolvency and pensions.

However, we have to change the debate. When we listen to the business community and certain people in the House, they talk about payroll taxes. When we think of pensions and the assets of them, those are deferred wages. Had the employees of those companies decided they wanted to invest on their own, they would not have negotiated with their companies to have a pension plan in the first place.

Imagine the horror when they wake up to a newspaper headline like the workers at Nortel did. Nortel had $2.4 billion in cash assets and $4 billion in other assets. It said that it would not cover the shortfall in the Nortel pension. Today, because of the delay of prorogation, because this matter did not get to the House, Nortel workers face a pension of 69%.

About two weeks ago, a couple that had retired from Nortel just before the 1990s visited my office in Hamilton East—Stoney Creek. Their pension to begin with was small because it had not had the growth period of the big money. They were going to lose 30% of their pension and their benefits. Along the line before of Bill C-476, I also put in Bill C-487 to address the long-term disability problems faced by workers at Nortel. In December some 400 of these good folks will lose all their LTD benefits. These workers are not re-employable and to be quite frank it is a tragedy because they will wind up on welfare.

Last week I stood with a Bloc member as the Bloc put forward a bill to address the guaranteed income supplement. In the House last June, we had an opposition day motion from the NDP. The first part of that motion was to address an immediate increase to the GIS. We also talked about doubling CPP, a national pension insurance plan. I was proud of members of the House because the motion passed unanimously.

Over the summer, I went to 19 different communities across the country. I listened to seniors talk about their fears on their pensions. One of the things that surfaced repeatedly was how low the GIS was and how it did not rise with the rate of inflation. This varied across the country. People who had retired from major corporations and thought their company had no chance of failure now faced problems.

We have heard about AbitibiBowater in the House many times from me, from the member for Thunder Bay—Rainy River and other members, particularly from Quebec and Northern Ontario. I ran into workers in B.C. who lost their pensions because the forestry industry had been wiped out. They clearly did not know what they were going to do.

In the House today is my good friend from Outremont, who at my request moved a motion at finance committee to have it look at pensions. Eighty-eight witnesses came before that committee and gave testimony about the situation faced by Canadians and Canadian pensions.

I have noticed, with concern, that the speaking notes of government members have changed. In committee, they were saying that they would look at this, that they were consulting. They were referring to the parliamentary secretary who was traveling the country, as was I. They made reference to those consultations. Now they are starting to talk about the opposition coming up with answers too quickly. I am afraid I have to disagree with that.

The NDP started on this file in 2008. We consulted with people during 2009. I went to 19 communities, now up to 26. We have listened to people.

We have listened to such people as Joel Harding, the CLC pension expert, Monica Townson, from the Canadian Centre for Policy Alternatives, Bob Baldwin, a pension expert, Don Drummond, an economist with TD Canada Trust and a gentleman whose name is used in the House quite frequently, Mike McCracken from Infometrica, Glen Hodgson, the senior vice-president and chief economist from the Conference Board of Canada, and others.

Members on all sides of the House have to really pause for a second when we look at Bill C-501. We need to understand the change in language of deferred wages.

Deferred wages means, very simply, it should be considered the property of the pensioners who will use that money for their retirement. Deferred wages are not a gift that the company has decided to set aside for them on their retirement. This is a sharing in a process that put aside moneys to give them dignity in their retirement.

Members of the government have talked to me about seeing their constituents leave their office and then going into food banks. We have heard the stories of Canadian veterans moving to food banks. Our seniors deserve much more than that.

In the opposition day motion about which I talked, the NDP proposed an immediate increase to the GIS, similar to what the Bloc and others have spoke about. We also talked about doubling the Canada pension plan.

Some people in the provinces and in the Liberal Party have talked about a supplementary voluntary CPP. In Canada 63% of working Canadians have no savings and no pension. It is very clear that the only way they will have a pension in 40 years is if we invest. If we grow the core assets in the CPP, and we do not have to add administration, then we can go forward. However, it must be mandatory to ensure that in 35 to 40 years Canadians will have a pension to rely on, a foundation for a pension plan.

Again, I thank the member for Thunder Bay—Rainy River for moving Bill C-501. I look forward to the support of the entire House when the bill comes to committee.

[Judy Sgro, Liberal, York West, ON]

Madam Speaker, I am pleased to have an opportunity to address Bill C-501, An Act to amend the Bankruptcy and Insolvency Act and other Acts. I say I am pleased because, as the opposition critic for seniors and pensions, I have been following this issue for quite some time. More importantly, I am glad to see Bill C-501 come to the floor because of the impact it could have for all Canadians.

In recent weeks, people such as the former and current employees of Nortel have come to understand that their pension benefits are in real jeopardy due to the financial insolvency of their employer. Many Canadians have followed that discussion and have seen the rallies that have happened all across Canada. In many cases, after working for a lifetime, these workers and many like them will be placed at the end of the line when it comes to benefiting from a Nortel settlement agreement.

Our current laws have done nothing to right this long-standing wrong. I for one will be voting to send Bill C-501 to committee where it can be explored and finally set into motion various actions that could help thousands of people across Canada. This measure has been a long time coming to the floor of the House, mostly because the government has been so desperate to stonewall on the entire issue of pension reform.

When I first raised the issue of pension reform with the Minister of Finance, I was met with a flat refusal to tackle the issue. The minister emphatically stated that this issue has no place in the federal realm and that it is a provincial responsibility. I pressed for federal leadership on this issue, citing the toll that was being taken on Canadian families and seniors. Again, the minister and his representatives told the House that this matter was best left to the provinces.

In October of last year, I called a group of experts and stakeholders together on Parliament Hill, over and above the round tables that I have held for well over a year across Canada. We set aside politics and explored some of the problems and potential solutions for Canada's retirement income security, coverage and adequacy systems. Once that convention was over, I shared the unedited finding of the group with the minister and offered my help in crafting a thoughtful response to the growing pension crisis. Again, the minister chose to keep his head in the sand.

The minister's parliamentary secretary went even further than that, openly mocking the entire event as recently as Friday's question period. Sadly, those taunts showed the existence of an even greater problem facing all of us and facing Canadians. Simply put, the government does not believe that there is a role for government to play in preserving the fiscal security of Canadian seniors.

To their credit, this is not a new position for the Conservatives. For example, I recently came across a November 8, 1963 edition of the Montreal Gazette. If one were to read that, one would see how the Conservatives of the day back in 1963 were hoping to derail the creation of the Canada pension plan. They said that the Liberal-sponsored plan would upset credit markets and undermine the private sector in Canada. It is now more than 40 years later and the sky has not fallen.

This trend of Conservative opposition to pension reform continues in more recent times. The same arguments the Conservatives used then are the same arguments they use today. When the current Prime Minister was the leader of the Canadian Alliance, he advocated for the elimination of the Canada pension plan in favour of super savings accounts. The premise of his plan was simple. Seniors would not get a Canada pension plan cheque each month, but they would be given the opportunity to put all of their extra money into a bank account for a really great interest rate.

The problem is that by eliminating the Canada pension plan, the Conservatives would have eliminated the source of income for tens of thousands of Canadian seniors. Imagine where we would be today if the Conservatives had been successful in thwarting the creation of the Canada pension plan, or if they had been successful in collapsing the Canada pension plan in favour of bank accounts for extra money. Let us just say that Canadian seniors have every right to be happy that the Conservatives' short-sightedness did not prevail. This brings me back to Bill C-501.

The bill clearly will have its flaws and we will all need to work on it to make sure it accomplishes the intent, and that is to protect pensions across Canada when companies are going bankrupt, but what it represents is a step in the right direction. It also can represent another step forward for Canadian seniors and pensioners.

The Liberal Party has a very long history of protecting and preserving Canada's retirement income, security and adequacy systems. While the caucus does not have a party position on Bill C-501, I would suspect Liberal members would work to ensure that Bill C-501 makes its way to committee without any further stalling by the government.

Even the NDP obviously acknowledges that the issue of pension reform is not cut and dried. After all, Bill C-501 is a re-write of Bill C-476, which had its first reading in the House of Commons on November 3, 2009.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you very much, Mr. Chair.

I've been outside of this hallowed place for 26 meetings, listening to very ordinary Canadians, people who don't necessarily have any real expertise with pensions.

You talked about the three pillars. Those in defined contribution plans or with RRSPs are in serious trouble right now, but I won't go deeper into that.

Mr. Campbell, I agree with you about the fragmentation of how we address this. One of the propositions the NDP has put forward calls for the doubling of CPP. Of course, that's going to be amortized over a long period of time before we accomplish it. It will increase the benefits--I think the maximum today is $907 a month--to $1,814 to form a base and strengthen that one pillar of the two pillars of the public plan.

We understand that sixty-some percent of working Canadians in total, both public and private, have no savings and no pensions at all. I'd like your comment on that.

Then if I could, Ms. Thompson, I'd like to talk to you for a moment about the fact that the NDP has a bill, Bill C-476. Air Canada went through CCAA. We're seeking to have preferred status given to pensions in both CCAA and BIA. I'd like your comments on that, please.

Speech from the Throne

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I too rise on a point of order. There is a serious situation facing Canada's pensioners. I would like to ask for unanimous consent to move the following motion which states that notwithstanding any order or usual practice of the House, Bill C-476, An Act to amend the Bankruptcy and Insolvency Act and other Acts (unfunded pension plan liabilities), be deemed to have been read a second time and referred to a committee of the whole, deemed considered in committee of the whole, deemed reported without amendment, deemed concurred in at report stage, and deemed read a third time and passed.

Bankruptcy and Insolvency Act

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

moved for leave to introduce Bill C-476, An Act to amend the Bankruptcy and Insolvency Act and other Acts (unfunded pension plan liabilities).

Mr. Speaker, I am pleased to rise today to table my latest bill in an ongoing effort to protect the pension plans of hard-working Canadians. The official name of my bill is an Act to amend the Bankruptcy and Insolvency Act and other acts. In 1927, it was J.S. Woodsworth, the leader of the CCF, who introduced Canada's first pension legislation, the old age security pension, as a way to address seniors' poverty. It was adopted by the minority Liberal government of the day. In the mid-1960s, again it was the NDP member, Stanley Knowles, who forced the minority Liberal government of Lester Pearson to adopt CPP, again to further address seniors' poverty.

Clearly it has been and remains the NDP that has shown the way on pension reform in Canada, and we continue that work with the tabling of this significant bill. I refer to my bill as the Nortel bill, because it would address in a real way the very serious situation these workers find themselves in as Nortel goes through the CCAA process. The Nortel bill amends the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act, among others, to ensure companies make good on their unfunded pension liabilities. The Nortel bill classifies these unfunded pension liabilities as preferred creditors and places them on the same tier as other secure debt to bondholders, investors and other such creditors. It is designed to prevent speculators from buying up assets on the cheap while leaving pension funds gutted and workers without the benefits they have earned.

In addition, the Nortel bill, through new procedures, helps former employees of bankrupt corporations to claim moneys owed. The bill also ensures that payouts resulting from bankruptcy will not be deducted from employment insurance benefits. Finally, unlike the situation with current pension protections, there is no cap on the amount of benefits protected. It would not be retroactive, meaning that for Nortel to benefit, a judge would need to order that the liquidation be conducted under the BIA.

Having consulted for many months with seniors' pension experts, I know the bill would give security and peace of mind to millions of Canadians.

(Motions deemed adopted, bill read the first time and printed)