Bill C-27 (Historical)

An Act to amend the Pension Benefits Standards Act, 1985

This enactment amends the Pension Benefits Standards Act, 1985 to provide a framework for the establishment, administration and supervision of target benefit plans. It also amends the Act to permit pension plan administrators to purchase immediate or deferred life annuities for former members or survivors so as to satisfy an obligation to provide pension benefits if the obligation arises from a defined benefit provision.

Pensions

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, I have two petitions to table on behalf of my constituents.

One petition calls on the Government of Canada to withdraw Bill C-27, due to the petitioners' belief that it may harm retirement security for seniors.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I have a petition signed by some 200 people from Smithers and Telkwa and Babine Lake describing their frustration and concern over Bill C-27, which is a pension bill the government introduced at one point but that we have not seen for some time.

Their concern is about moving the defined benefit plans people have been paying into for, in some cases, their entire working lives out to targeted benefit plans, which, of course, is a great reduction in their pensions. Many of these petitioners are not public servants but are supporting public servants and others who have paid into these pension plans with the clear expectation that the law would be followed. They reject Bill C-27 and hope the government continues to ignore its existence.

Pension Benefits Standards Act

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, I would like to begin my remarks by saying that today is indeed a very black Friday for workers.

In addition, the government has introduced a bill to require Canada Post mail carriers to return to work, despite the fact that they were in the middle of negotiating a collective agreement freely and in good faith. After only 11 months, the government has decided to intrude on these negotiations and force them back to work. We are being allowed less than three hours of debate for the bill, which we have already started debating and will continue to debate this afternoon. This is abominable conduct from a government that says that workers' rights should be very important. It says it respects bargaining rights, but its actions paint a different picture.

What is more, in 2011, when the Conservatives imposed back-to-work legislation for these same Canada Post employees, the Liberals got all worked up, saying that it was terribly disrespectful and violated workers' rights. Now they are doing exactly the same thing, with even fewer scruples, because they are giving MPs even less time to debate and defend workers.

In addition, today, the Conservatives are introducing a bill that will make pension benefits even more precarious. Bill C-405, an act to amend the Pension Benefits Standards Act, 1985 and the Companies’ Creditors Arrangement Act with respect to pension plans, which was introduced by the member for Durham, seeks to transfer all the risks of deferred wages to workers by replacing defined benefits. Under defined benefit plans, when someone is working, a portion of their salary is deferred, set aside for their retirement. They know exactly how much money they will receive every year from the day they retire.

The Conservatives are doing the same thing as the Liberals did with Bill C-27. However, that bill has been put on hold for the time being because of the outcry from workers. It actually made the headlines. The NDP denounced the situation. My colleague from Hamilton Mountain did a tremendous job of demonstrating how this change would put the future of workers at risk and create two pension plans, one for those who have already accumulated some pension money and another for young people who are just entering the workforce. The young people would get a different and much more precarious pension plan. I will explain as I go along.

The end result would be that even though people would continue to have a known fixed amount at retirement, instead of receiving a fixed payment, the benefits would vary depending on the performance of the investments and the market. That is what the Conservatives are proposing. We know that investments sometimes do very well. They can yield a good amount one year, and then the next year, if the performance is negative, there might be no money for pensioners.

Do workers really want an income that fluctuates from year to year, an income that they cannot predict? I do not think so. Do they want a negative differential of $15,000 from one year to the next? How can they budget for renovations? How can they deal with a contingency? How can they plan a trip? Pensioners have contributed and set aside money their entire lives, but that money could go up in smoke because of this bill.

This goes against NDP values. It should also be contrary to what the Liberals are proposing in the way of protections for workers. This really puts the future of workers at risk.

That is like telling young people entering the workforce that even though they do the same work and make the same contributions to their pension, they might not get the same pension as those who have been working for the same company for 10 years. That is what will happen under Bill C-405. Is it fair for every worker to pay the same amount but not get the same pension at the end of the line? No. I think the answer is obvious.

The NDP is strongly opposed to this type of bill. Just look at what happened in the Sears scandal. Legislation is indispensable for protecting workers' pensions when businesses go bankrupt, and Canada's legislation in this area is woefully inadequate.

Pensions are supposed to be paid, and deferred wages are supposed to be paid for by creditors, but that is not happening. Under the current Bankruptcy and Insolvency Act, secured creditors always get paid first. Workers' pension funds always come second. In fact, that money is always the last to get paid out. In almost every case, there is practically nothing left to pay back the workers' pension fund.

Retired Sears employees were not the first to be severely affected by the bankruptcy of a Canadian company. Many will remember the collapse of Nortel. The star of Canada's high-tech industry was snuffed out in 2009. It was one of the largest bankruptcy cases in Canadian history. Thousands of Canadians lost their jobs, with no severance or termination pay. Nortel's pension plan had a $2.5-billion shortfall. After eight years of negotiations, Nortel employees learned that their pension benefits would be cut by 30% to 45%.

Let us go back to the Sears case, which happened not long ago. Thousands of employees were laid off without severance or termination pay. However, we know that Sears executives paid themselves bonuses totalling several billion dollars, while their employees were thrown out on the street. Many of them had to find new jobs, which can be hard for people who worked in the same place for 25, 30 or 40 years. Some had no degrees. They found themselves in a tough spot, because it is extremely difficult to find a job at age 50 or 55 these days.

The NDP supports the idea of making it illegal to pay loyalty bonuses to executives who drove a company into bankruptcy. We also want companies to be required to keep their pension plans solvent and to limit unfunded liability. When companies are allowed to get out of these payments, they are essentially stealing workers' pensions, and this is unacceptable.

I do not find this legislation particularly surprising coming from the Conservatives. However, on this dark November 23, at a time when the government is trying to stop free negotiation for postal workers, this bill comes at a bad time.

We will certainly oppose this bill because we want to protect workers' pension plans for all generations, including workers in my generation and our children's generation, and we want to make sure that the risks are shared. In fact, the NDP does not want there to be any risk at all. We believes that all generations of workers who contribute should receive fair, defined benefits.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, my apologies. I was not exactly sure which bill we were debating today.

My colleague's bill, Bill C-405, deals with Canadians' pension benefits. Clearly, this is an extremely delicate subject, as we were able to see with the government's approach to Bill C-27. This sought to allow Crown corporations, and ultimately all other employers in Canada, to change the category of defined benefit retirement plans to target benefit plans.

The direction that the government took is really bad. Thanks to the pressure from many Canadians and from unions, the government seems to have decided to keep the idea of introducing target benefit plans on hold. That means that retirees' benefits will change over time.

When you sign a collective agreement and a defined benefit pension plan, you know what to expect when you retire. With Bill C-27, the government was ready to move forward and change that standard, replacing it with a target benefit plan, that is, one in which benefits can change over time. If that were the case, employees would not get the same amounts as if the defined benefits were maintained.

My colleague's bill is similar to that one. It seeks to enable employers who already offer defined benefit pension plans to convert them into target benefit plans or defined contribution pension plans, which are slightly different, and thereby transfer all of the risk to workers and absolve employers from the obligation to provide their employees with predictable pension benefits.

Pension plans are deferred wages. As I said earlier, they are often negotiated as part of collective agreements.

This bill would change benefits that were negotiated ahead of time and, as I just mentioned, it would also transfer the burden to employees since, in a defined benefit pension plan, the burden is on the employer to deliver what it promised to its employees.

In target benefit plans or defined contribution pension plans, the burden is on employees, who are forced to bear the brunt of any losses that may occur if a company, Crown corporation or government can no longer fulfill its retirement obligations. There has been a lot of debate about that in 2018. This reality has been catching up with workers over the past several years. Employers, whether government or private, are waking up to the fact that, in the future, they will not be able to fulfill the working conditions and retirement pensions that they promised to employees, even though they signed agreements to that effect, and so they are changing the benefits along the way. They are changing conditions that were negotiated. That is unacceptable. It goes completely against the spirit of negotiation and violates a signed agreement to which the two parties agreed and in which both parties must keep their commitments.

Unfortunately, we know what side the Conservatives are on in this kind of debate that affects workers and employers. They always side with the employer. What we are seeing today with Bill C-405 is nothing new.

The bill before us is diametrically opposed to the NDP's proposed approach to correcting major shortcomings in Canada's bankruptcy and insolvency legislation and protecting Canadian workers' and retirees' pensions and benefits. This is 2018, and workers are facing a whole new reality. We have seen it in the past, and we saw it again recently with Sears. Not only can the pension benefit terms and conditions be changed, but pensions can be cancelled altogether. I know workers in Sherbrooke, my region, who worked for 30 years and then suddenly found themselves in that very situation. The employer went bankrupt and closed up shop, and workers' pensions evaporated.

Those employees worked for years to build up their pensions. That money belongs to them. It is deferred income. They worked their whole lives to save that money, and then from one day to the next, their employer was no longer in a position to give the money that belongs to them.

Sears is the latest example, but this is something we have seen in Estrie as well. I know a person who worked at Olymel in Magog. That person, along with everyone else who worked there, lost their pension because their employer suddenly announced that it was no longer able to honour the conditions they had initially agreed to. The workers' money went up in smoke.

That leads to very sad situations. Some of these people are elderly and have to go back to work because they lost all the benefits they were promised initially. They are left in the lurch. They have to go back to work and, for some of them, the working conditions are not nearly as good as when they were working for a business that was thriving and prospering but suddenly had to shut down.

Unfortunately, the Conservatives are unlikely to surprise us today with such a bill to stop executives from giving themselves excessive bonuses in any liquidation and bankruptcy procedures.

I mentioned Sears, but there have been other cases of bankruptcy where the executives took off with the employees' savings. That money does not necessarily always go to the creditors. Sometimes it winds up in the pockets of the executives of those companies. Then the executives or shareholders tell the board of directors that after liquidating the company's assets, that is, before putting the money in their own pockets, there is nothing left for everyone else. There is nothing left for the other creditors.

We in the NDP believe that workers are the priority creditors. That has always been our position. When a company goes bankrupt, the priority creditors are the workers. Whether it is salaries, unpaid sick leave or pensions, priority must be given to what has already been promised, before the banks are even consulted to proceed with the liquidation and pay out the creditors. The workers should always come first.

Unfortunately, once again, we know whose side the Conservatives are on: the employers and the executives. They allow these unacceptable situations to continue, and that is a shame. Bill C-405 does not solve anything. On the contrary, it makes matters worse.

Pensions

[Mark Warawa, Conservative, Langley—Aldergrove, BC]

Mr. Speaker, the second petition is with respect to pensions. The petitioners indicate that the Prime Minister promised in writing that defined benefit plans, which had already been paid for by employees and pensioners, should not be retroactively changed into targeted benefit plans. They also say that Bill C-27, tabled by the Minister of Finance, precisely permits this change that the government promised would not happen.

The petitioners call for the Government of Canada to withdraw Bill C-27.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Mr. Speaker, I am very pleased today to present a petition on behalf of the residents primarily from my community of Nelson, British Columbia. The petition concerns Bill C-27.

People have put away money from deferred wages into their pension plans for years and they are very much concerned about the possibility that these defined benefit plans will be changed to target benefit plans.

The petitioners therefore ask that the Government of Canada to withdraw Bill C-27, which is an act to amend the Pension Benefits Standards Act of 1985.

[Gerald Jennings, National Association of Federal Retirees]

Thank you.

My name is Gerald—Gerry, please—Jennings. I'm here representing the National Association of Federal Retirees, and I'll get right at it.

Canadian seniors are living longer than ever before and are on course to reach 25% of Canada's population by 2030. Defined pension benefits are the most effective means of achieving retirement income security. Retirees with defined pension plans are less likely to rely on government assistance, such as guaranteed income supplements.

A barrier to retirement security is House of Commons Bill C-27, an act to amend the Pension Benefits Standards Act, 1985. Bill C-27 will enable defined benefit pension plans to be replaced by targeted benefit plans. Defined benefit pension plans invest in Canadian equities, real estate and infrastructure such as railways, bridges, airports, utilities and pipelines. Pension funds are uniquely poised to invest in Canada and Canada's Infrastructure Bank.

The National Association of Federal Retirees asks the government to withdraw Bill C-27 to ensure that Canadian retirees continue to contribute to our economy and economic growth and not become a burden upon it.

Thank you.

[Patricia Baye, As an Individual]

Thank you and good morning to everybody.

I'm here representing the National Association of Federal Retirees, which has branches all across Canada, and I am from the branch here in Victoria, which has approximately 4,000 members. On behalf of the branch, there are a couple of items I would like to point out to the pre-budget committee for consideration.

As a seniors group, we would like to look after not just seniors from our group but also all Canadian seniors. We would like the committee to consider having a comprehensive national seniors strategy for the provinces and territories. We would like you to address affordable and appropriate housing to promote friendly communities and combat the isolation of seniors and ageism.

We would also like to see that you ensure robust and sustainable social services and improve the focus on seniors' housing, community care and caregivers. We would also like you to consider creating a feasible and affordable pharmacare program for all Canadians. Also, we would like you to guarantee income security for all Canadians and ensure that retirement savings regimes are effective and that Canadian retirement security needs are met to assist Canadians in building improved retirement security.

We would like the government to honour the promises made to retirees when pension plans change. We would also like you to immediately withdraw Bill C-27 and to continue to improve the Canada Pension Plan and the old age security.

We would hope that this report would be out by the spring so we can look at it and see everything that has gone, and we hope too that this government will resolve by 2019 the Phoenix pay system so that all issues are cleared up and that all retirees and employees are properly compensated.

Thank you.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Mr. Speaker, I have two petitions, both regarding pension policy in Canada.

These petitioners point out that in the 2015 federal election, Canadians were clearly promised in writing that defined benefit plans, which had already been paid for by employees and pensioners, should not be retroactively changed into target benefit plans, and that Bill C-27, tabled by the Minister of Finance, precisely permits this change, thereby jeopardizing the retirement income security of Canadians who have negotiated defined benefit plans as a form of deferred wages.

These petitioners call on the Government of Canada to withdraw Bill C-27, an act to amend the Pension Benefits Standards Act.

[Serge Boisseau, National Association of Federal Retirees]

Hello, Mr. Chair.

My name is Serge Boisseau. I'm the second vice-president of the National Association of Federal Retirees, Quebec branch. The association has 175,000 members in Canada.

We are calling on the government to help Canadians improve their retirement security, to keep its promises to retirees when it amends the pension programs, and to continue to improve the Canada pension plan and old age security.

The first step in that direction would be the immediate withdrawal of Bill C-27, which enables employers to break pension-related promises to their employees. The defined benefit pension plan is the most effective way of ensuring retirement security.

In short, retirees are important to our economy. Their retirement security benefits not only them but also their communities and the entire country.

Retirees continue to be active consumers, whether it be by travelling, paying taxes or making consumer purchases. Good retirement income security leads to better health, which reduces the burden on the health care system.

Thank you and have a pleasant day.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, today I am tabling a petition, largely from members of my riding in Port Hardy and Port McNeill, who have serious concerns and are calling to see the withdrawal of Bill C-27, an act to amend the Pension Benefits Standards Act.

People in my riding are very concerned. They were promised in writing that the defined benefit plans, which have already been paid for by employees and pensioners, should not be retroactively changed into target benefit plans. The tabling of this bill by the Minister of Finance permits precisely this change, thereby jeopardizing the retirement income security of Canadians who have negotiated defined benefit plans as a form of deferred wages.

The petitioners are calling on the Government of Canada to withdraw Bill C-27, an act to amend the Pension Benefits Standards Act. I hope that the government will take this petition from these communities seriously.

[Marie Lorraine Scott, National Association of Federal Retirees]

I'm Lorraine Scott. I'm president of the National Association of Federal Retirees here in the Saint John district, covering from Sussex all the way down to St. Stephen at the border.

I'm here basically to talk about pension security for seniors in regard to Bill C-27. Federal government employees have a pension. The average pension of a government employee is $23,000 per year. We're afraid of Bill C-27 being implemented, because we'll go from a deferred pension plan to a targeted pension plan, which will affect the members of the retirees association—all retirees and future retirees. Too many government employees, and many of you yourselves, could be affected by this change.

We would like to see Bill C-27 reneged. We want it removed so that the pension plans that we have will remain the same, remain targeted and be fully indexed. That is our mission from the national association.

Thank you.

[Shirley Pierce, Advocacy Officer, Prince Edward Island, National Association of Federal Retirees]

Good morning.

I'm happy to be here on National Seniors Day. I represent the National Association of Federal Retirees. It has about 180,000 members, who are retirees of the public service, the Canadian Armed Forces, and the Royal Canadian Mounted Police, as well as retired federal judges. Our association has advocated for improvements to the financial security, health and well-being of our members and all Canadians for more than 50 years. I have some recommendations.

The first one is that, along with our provinces and territories, the federal government lead the implementation of a comprehensive national seniors strategy that addresses the social determinants of health, including access to affordable and appropriate housing, retirement income security, and robust and sustainable social services. This must include taking action on improving senior-focused home and community care, developing and promoting age-friendly community principles, increasing support for caregivers, and combatting isolation and ageism.

The second is that this government help Canadians build better retirement security, honour the promises made to retirees when pension plans are changed, and continue to improve CPP and OAS. A good first step in achieving this would be the immediate withdrawal of Bill C-27.

Third is that the federal government follow through on the budget 2018 commitment to consult on retirement security. To ensure that our current retirement savings regimes are effective and that Canadian retirement security needs are met, hold public, transparent consultations by spring 2019 with retirees and pensioner organizations, veterans, academics, policy experts, labour and business leaders, and others to map Canada's path to retirement security.

Last is that this government ensure that retirees and employees are properly compensated and invest appropriate funds and continue to work with labour and retiree partners to resolve the Phoenix pay system issues.

Thank you.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Mr. Speaker, I am very happy to present a petition on behalf of my constituents who are concerned about the future of their pensions and particularly related to Bill C-27, An Act to amend the Pension Benefits Standards Act, 1985.

Security in one's retirement is really important to all Canadians, certainly important to the people of Kootenay—Columbia. Basically, they are asking that the government withdraw Bill C-27.

[Alain Trépanier]

Mr. Chair, my name is Alain Trépanier. I am from Vancouver, British Columbia. I represent the National Association of Federal Retirees.

Our second recommendation is that this government help Canadians build better retirement security, honour the promises made to retirees when pension plans are changed and continue to improve CPP and OAS. A good first step in achieving this would be the immediate withdrawal of Bill C-27.

Our third recommendation is that the federal government follow through on the budget 2018 commitment to consult on retirement security to ensure that current retirement savings regimes are effective and that Canadians' retirement security needs are met. This should include a consultation process with retiree and pensioner organizations, veterans associations, academics, subject matter experts, labour, business leaders and others to map our country's path to retirement security.

Thank you very much.