Bill C-384 (Historical)

An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance programs)

This enactment amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to ensure that claims in respect of unfunded liabilities or solvency deficiencies of a pension plan are accorded priority in the event of bankruptcy proceedings. It also provides that an employer has to maintain group insurance programs that provide benefits to or in respect of its employees or former employees.

Bankruptcy and Insolvency Act

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, I know my grandchildren, my grandson and granddaughter are watching. I want to say hello to Oliver and Lena while I have the chance.

I rise today to speak to the private member's bill, Bill C-372, an act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act, pension plans and group insurance plans, sponsored by the member for Manicouagan.

First I would like to thank the member for bringing the bill forward. Like my Bill C-384, and like former Senator Eggleton's Bill S-253, the bill would bring about legislative changes needed to protect the economic well-being of Canadian workers and their families.

As members in the House will know, I have invested a great deal of my time advocating for the protection of workers' pensions and benefits. I have been pushing the government for over three years to bring forward legislation. However, no, the government is too afraid to offend its corporate friends. It hides behind fancy words like “unintended consequences” and consultations meant only for show. The government has made it very clear what side it is on, and it is not the side of Canadian workers, retirees and their families.

I have been a member of the United Steelworkers Union for 35 years, 25 of those years spent on the shop floor at Stelco in Hamilton and for 10 of those years, acting as president of my local union at the Stelco plant called Stelwire.

In 2004, I was part of the negotiating team that spent two years working through the first bankruptcy restricting procedure under the CCAA and just two years go watched as my former union wrapped up negotiations in its second go-around on the restructuring under the CCAA.

As members can imagine, the inequities and difficulties caused by the inadequacy of Canada's bankruptcy and insolvency laws are of great interest and concern to me. I have seen the damage caused by our inadequate laws, and I am determined to see them changed. The rights of workers to fair and stable pensions and secure benefits has been a concern to me my whole working life.

This is why I am so happy to see legislation that secures workers' pensions and benefits finally come to the floor of the House of Commons. Make no mistake, I would have rather seen my own bill, Bill C-384, up for debate first, but there is enough in common between this bill and my bill that I and the rest of my caucus colleagues will support its passage.

I salute my colleague from Manicouagan for bringing forward a bill that will protect Canadian workers, retirees and their families, and I say “merci beaucoup”.

Many Canadian companies use Canada's bankruptcy laws to effectively gain concessions from their employees and escape responsibility for often huge pension deficits they themselves have created. Workers are then left with the threat of reduced pensions and health care benefits.

Large multinational corporations are also using Canada's inadequate bankruptcy laws to take money meant for workers' pensions and divert it to pay off their secure creditors, which are often their parent companies. This is organized theft. Pensions are, after all, deferred wages, plain and simple. Diverting, withholding or seizing those funds should be illegal. Changing Canada's inadequate bankruptcy and insolvency laws is all about fairness for workers.

It is important to point out that the Liberals campaigned on a promise to improve the income retirement security of all Canadian seniors, but have refused to take any meaningful action. Changes proposed in recent budget legislation encouraging parties to act in good faith and clarifying the discretion of judges in CCAA proceeding does nothing concrete to protect workers' pensions and benefits.

Chris Roberts, policy director at the Canadian Labour Congress, had this to say about pension provisions in the government's budget implementation act. He said that modifications brought to Bill C-97 on the Bankruptcy and Insolvency Act as well as to the Companies' Creditors Arrangement Act “are inadequate and represent a missed opportunity to prevent” members of a defined benefits program and retirees from being the victims of injustices that would result from losing their benefits when businesses became insolvent.

What is even more disheartening is that the government refused to even acknowledge the grim future of the workers and retirees involved in recent bankruptcy proceedings like Sears, Stelco, Wabush and Cliffs mines.

This bill would amend the Bankruptcy and Insolvency Act and the CCAA so that companies would have to bring any pension plan fund to 100% before paying any secured creditors. It would also make amendments to require companies to pay any termination or severance pay owing before paying any secured creditors.

These amendments would inject some fairness and protection into a process that often sees the interests of workers, retirees and their families placed behind all others in a bankruptcy, liquidation or restructuring process.

The recent collapse of Sears Canada has focused attention on the injustices inherent in the Canada bankruptcy and insolvency laws. These amendments would help to fix these imbalances and provide Canadian workers, retirees and their families with the protection they expect and deserve.

Our current bankruptcy laws give priority to investors, banks and parent companies over workers' pensions and benefits. Time and again, proceedings under those laws have resulted in the interests of workers being overshadowed by the interests of rich investors and banks. Workers often lose severance pay benefits, pension benefits and health benefits. People in management also make out like bandits, giving themselves huge bonuses while cutting off the benefits of workers and retirees.

This is an equity issue. At a time when 82% of the wealth in this country is going to the top 1%, and we see executives at Sears being paid over $6.5 million in bonuses while the workers are denied severance or termination pay, have their benefits cut off and see their pensions reduced, we have to recognize and work to eliminate the growing gap between the haves and have-nots in this country. It is a matter of basic decency and human rights. Every Canadian deserves no less.

It is important that I point out one significant difference between my bill, Bill C-384, and the bill before us. I also have to say that I hope it is a difference that can be addressed at committee through what I would like to think would be a friendly amendment. In my private member's bill, there is a clause that would prevent a company from stopping the payment of any retirement benefits during any proceedings under the BIA or the CCAA. This is a fairly common practice, and it causes great hardship for workers and retirees. The exclusion of any language dealing with this problem is the only substantial difference I can see between my bill and the bill before us today.

These legislative changes would inject some fairness into a process that often sees the interests of workers, retirees and their families placed behind all others in a bankruptcy, liquidation or restructuring process. Canadians know that it is wrong to allow pensions and benefits to be stolen and are demanding that our inadequate bankruptcy and insolvency laws be changed to protect workers, retirees and their families.

I have gone across this country to many town hall meetings to listen to people who are concerned. Many people do not know that in our bankruptcy laws, their pensions can be reduced. They think it is a shame. They cannot believe that it is even happening in our country.

What I am trying to get at is that people want to see a change, and they are sending a strong message. In Hamilton, in 2015, I made that commitment to my constituents in Hamilton Mountain and all Hamiltonians. When I crossed the country, I also made that commitment to Canadians. I made a promise that I would fight in this House to make sure that we no longer lose. This is our money. It is deferred wages. When I made that commitment, I know that many others made that commitment and promise, especially all the members from Hamilton. I am going to keep my promise. That is why I am supporting this bill. I expect the other members from Hamilton to support this bill and keep their promise to Hamiltonians also.

In closing, I want to thank the sponsor of this bill. I believe that it is time to change. We have to stop the fearmongering by big corporations that say that they will not get investments. That is just false. We have to turn the tide to make sure that retirees and workers get the money they negotiated all through their lives and that it is not stolen by corporations that want to unload their liabilities because they made mistakes in running their companies.

I thank the members for the time. I hope everyone supports this. We made promises. Let us keep them.

Accessible Canada Act

[Jenny Kwan, NDP, Vancouver East, BC]

Mr. Speaker, I have been listening to the debate all evening. One of the issues I was wondering about and would like to invite my colleague's comments on is this.

My colleague, the member for Windsor—Tecumseh, tabled a private member's bill, Bill C-384. In that bill, she called on the government to create a one-stop shopping system for individuals with disabilities to access federal government programs, such as the Canada pension plan disability benefits, the disability tax credit, the registered disabilities savings plan, the veterans disability pension plan and the opportunities fund. That is to say that instead of having to go through multiple application systems within the federal government, filling out all the forms and providing verification for their disability, they would only have to do it once. Once they had done that, they would then be able to quality for all of those programs under the federal government's jurisdiction. Sadly, the private member's bill proposed by our colleague, the member for Windsor—Tecumseh, was defeated by the government members. For the life of me, I do not understand why the government would create barriers to people with disabilities' access to critical programs that all Canadians should have easy access to. That streamlining process would also reduce the bureaucracy within government.

Could my colleague comment on that?

[Chris Roberts]

That's certainly the position of the CLC and many unions, that this was a missed opportunity. Even if the government had been unwilling to grant straight-out superpriority status for the pension deficit claim, there are many ways in which the government could have entertained an evidence-based discussion about what changes to the order of priorities, the hierarchy of claims in bankruptcy and insolvency, might have been sufficient in future cases to have a meaningful impact on pensioners and plan members.

Given that there are private members' bills on this, namely Bill C-384 and Bill C-372, and a bill from the Senate as well, there's an opportunity to get the evidence on the table to really understand what opportunities exist within the existing statute, even short of superpriority, but we haven't seen that debate occurring.

Pension Benefits Standards Act

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, there has been much confusion today and much surprise, frankly, at the fact that my NDP colleagues did not even know the name, number, or the content of the bill. That should concern all pensioners. The speech given by the member for Pickering—Uxbridge shows that she did not know the bill either and spoke about unrelated terms.

I am seeking a compromise. It reminds me of the humourist Stephen Fry who said, “Compromise is stalling between two fools.” Maybe I am one of those fools, but certainly when my other friends in the House today did not speak on the content of my bill, it shows that we cannot seem to get anything done.

I would welcome my friends from the NDP making comparisons with Bill C-384, which will not pass the House. If they want to talk about super-priority and a whole range of other issues related to defined benefit risks in insolvency, vote for this bill and bring forward witnesses at committee. This is a substantive measure to make progress.

I have never suggested this is the magic bullet that will solve all issues, but of the 19 million workers we have in Canada, only about 4.2 million still have a defined benefit pension plan. If a company is approaching insolvency and has an underfunded plan, those people are at risk. Our Companies' Creditors Arrangement Act allows for the preservation of firms. I have worked on this as a corporate lawyer on the preservation of Air Canada, and many members will be taking that airline home this weekend. It did not go bankrupt. All the retirees were not left in the lurch. The suppliers' jobs were preserved. Keeping a company a going concern is the goal of CCAA proceedings. We do not want to see liquidations. That is the intent. Make progress on three key areas and that is what Bill C-405 does.

First, it allows pension administrators to preserve and enhance the funds that are left. As my colleague from Calgary said quite eloquently, when there is insolvency and liquidations, there are usually bad economic times. That is the worst time possible to annuitize that remaining fund. If it is already underfunded and only 80% of the funds are available for retirees, the annuity they have to purchase at the worst time to preserve payments might take another 10% or so away from that. We need to preserve and enhance those funds. That is one thing the bill would do. Why would anyone oppose that?

If we want to argue about the threshold of how many pensioners have to vote for approval of the administrator to merge the fund with another plan or do something to preserve and enhance those assets, let us debate that at committee. Let us have experts say whether the threshold should be that one-third reject the plan or that one-third approve it, but at least we need to have options to preserve and potentially give pensioners better returns in the future. Keep that fund going with enhanced pooling of resources and all the benefits of the plan. That is one thing.

The second thing the bill does is eliminate the abuse and unfairness of key employee retention plan payments. My friends from the NDP talked a lot about Nortel and other companies, with $200 million being paid out unfairly in many people's view to senior executives. This would constrain that. This would curb that by changing our insolvency regime, by denying companies' ability to make unfair, large bonuses and payments while there is an underlying pension liability. It would also allow national reporting to the OSC at the provincial legislatures, because pensions are provincial and federal.

I would like to thank many people who have helped me in the process. There is Brian Rutherford, my pal from GENMO. Even though they do not agree with the substance of some elements, this is what I brought forward. There are also Don Raymond, Keith Ambachtsheer, Rob Corkum, Paul Forestell, Andrea Boctor at Stikeman Elliott, and Natasha Monkman, a pension lawyer from Curtis.

Pensioners are emailing all of us. Yesterday, I spoke with Vic Morden who worked on these issues for a union for many years. He thinks the bill is a step forward. Wayne Routley, Jennifer Bankay, Charlotte Wooler, Margaret Ann Dobbin, Thomas Airey and Alexander Fox all have have concerns about the viability of their pensions in the future or their security in retirement.

Bill C-405 would make tangible steps and we should send it to committee. If the NDP want to look at super-priority or other issues, those can be considered at committee.

We are in a situation where the Liberals would rather have no progress than make substantive progress in the three areas I mentioned. I predict that a bill on super-priority will not pass in this Parliament. Therefore, why would we not at least provide the certainty for pensioners that this bill does?

I would like the other parties to put politics aside. Let us make steady progress, pass the bill at second reading, and let us talk more about the risks to pensioners at committee.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, I rise today to speak to the private member's bill, Bill C-405, an act to amend the Pension Benefits Standards Act, 1985 and the Companies’ Creditors Arrangement Act, pension plans, sponsored by the member for Oshawa. I want to thank the hon. member for acknowledging the bankruptcy and pension benefits act needs to be changed. However, this is the only thanks I will be giving him on this issue.

Over the last 10 years, we have seen an increased focus in the province with Canada's inadequate bankruptcy and insolvency laws. The cases of Nortel, Wabush Mines, Stelco and, most recently, Sears have brought into national focus the fact that workers at large companies that go bankrupt are offered very little protection from investors and banks. Sometimes international hedge fund operators make out like bandits.

As a solution to this problem to fix Canada's inadequate bankruptcy and insolvency laws, the measures outlined in the bill are in complete opposition to NDP proposals, policies, initiatives and values. The bill helps to make clear that the approach favoured by the Conservatives and ironically by the Liberal government is to protect the interests of large business and their investors, while throwing Canadian workers under the bus.

There are presently four private members' bills in Parliament that address the legislative crisis and present solutions for fixing those problems. Three are in favour of increasing protection for workers and retirees in the Canadian public. The bill stands alone as it focuses on protecting and increasing the advantages enjoyed by big business, the financial sector and well-off company executives.

Chris Roberts, policy director for the Canadian Labour Congress, sums it up neatly when he says, “Right now a number of private member bills in the House and Senate are trying to honour the pension promises made to workers and retirees. Bill C-405 is not one of these. This bill would make it easier for employers to walk away from their obligation, with the consent of only a minority of beneficiaries. This legislation goes in precisely the wrong direction.”

Many Canadian companies use our inadequate bankruptcy laws to effectively gain concessions from their employees and escape responsibility for often huge pension deficits they themselves have created. Workers are then left with the threat of reduced pension and health care benefits.

The bill would make it easier for employers to manipulate laws by allowing those with existing defined benefit pension plans to convert those plans to target benefit or defined contribution plans, which would transfer all the risk onto the employees. Employers would let off the hook and allowed to walk away from their responsibility to provide secure retirement benefits to their employees.

Workplace pensions are deferred wages that employees agree to put aside until their retirement. This is critical to understand. Allowing companies to walk away with these funds is theft, pure and simple. The measures in the bill are in stark opposition to the approach proposed by the NDP to fix Canada's flawed bankruptcy and insolvency laws that would actually protect the pensions and benefits of Canadian workers and retirees.

My bill, Bill C-384, Liberal Senator Art Eggleton's bill, Bill S-253, and the Bloc's bill, Bill C-372 present solutions that would actually protect the pension funds of Canadian workers and retirees when a large Canadian company goes bankrupt. Chief among the proposals presented in the two bills are measures to heighten the priority of paying back deficits to workers' pension funds to the same level as secured creditors. Currently those payments are only considered at the same level as unsecured creditors who often only receive pennies on the dollar for any monies they are owed.

One the most offensive things that happens during the bankruptcy proceedings is that executives give themselves huge bonuses. The very people who ran the company into the ground get big rewards and it is done because the law allows it to happen.

Nortel executives got over $200 million in bonuses. Sears executives got $9.2 million. Stelco executives got $1.2 5 million. When I tell that to people at the town halls I have been doing when I go across the country, people ask me if I am kidding them. I have to tell them that I am not, that this really happens because the law allows it to happen.

Canadians know this is not right and they are demanding that the laws be changed. Remember that this all happens while workers and retirees get their benefits cut off, employees lose vacation, severance and termination pay, and small suppliers get stiffed on money they are owed.

The proposals in this bill dealing with executive compensation would do nothing to prevent the excessive rewards handed out during bankruptcy proceedings. The many executives who are paid largely through stock options and bonuses would not be affected by the new rules laid out in this bill. Executive bonuses during bankruptcy proceedings should be outlawed, pure and simple. Why should executives get bonuses to begin with when workers are, at the same time, being asked to make concessions? This is so obvious to the majority of working Canadians and it is time that we change the laws to make this happen.

It is also time for the government to get serious about changing the laws it knows are hurting workers and retirees and are threatening the retirement security of Canadian seniors. This is not a new issue. The problem has been happening for decades. The Liberal Party even went so far as to pass a resolution at its last policy convention calling on its own government to provide pension security.

In 2009, at the height of the Nortel mess, the leader of the Liberal Party stood outside this building and told workers that he would do everything he could to make sure this kind of problem did not happen again, and during the 2015 election campaign, the current Prime Minister came to my city of Hamilton and told workers that he would use every tool in the tool box to change the laws and fix the problem. The Liberals did not tell the truth. They did not live up to their promises.

The disconnect between the government and the needs of Canadian workers is hard to understand. The innovation minister tells workers that he cares, but does nothing; the seniors minister tells Canadians she wants to come up with the right solution, but then refuses to consult anyone; and the Prime Minister has a “let them eat cake” moment and tells the Sears pensioners, who are losing 30% of their pensions, that they can rely on the CPP and El. They should be ashamed of themselves and the Conservatives should be embarrassed and ashamed to offer legislation that would further threaten the well-being of Canadian workers and retirees.

We were elected to the House to protect Canadians, not to allow their pensions to be stolen because of inadequate legislation. It is in our interest to prioritize the interests of Canadians when it comes to these bankruptcy proceedings to ensure that the company pays, not the pensioner and not the Canadian taxpayer. This bill would not do that, which is why the NDP cannot support Bill C-405.

Pensions

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, after three years the government has done little to help Canadian seniors and retirees.

The Prime Minister promised during the election campaign to use every tool in the toolbox to fix Canada's flawed bankruptcy and insolvency law to protect workers' pensions, but so far has done nothing.

After news that 18,000 Sears retirees would lose 30% of their pensions, we still heard nothing from the government.

The government made a promise to consult in its last budget, but clearly Liberal promises are not worth the paper they are written on.

Changing the laws to protect workers' pensions is not hard. My Bill C-384 and Liberal Senator Art Eggleton's Bill S-253 lay out straightforward measures to fix the problems. Still, the government refuses to act.

For three years I have been asking the government to change the laws and protect Canadian pensioners. Every time I get back the same non-answers. This lack of respect is insulting to Canadian workers and retirees.

Let us stop the pension theft.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, the Liberals have no plan in the budget. Workers and retirees expect their government to change Canada's bankruptcy and insolvency laws to protect their interests and to end the theft of their pensions. The government and the party's resolutions talk nothing more than consultations. Canadians do not need more consultations. They need action. The NDP has given the government the fix in Bill C-384.

When will the government get on with the job instead of fooling around with these meaningless “calls for inaction”?

[Karine Trudel, NDP, Jonquière, QC]

Mr. Speaker, the government has so far failed to come up with any solutions to help workers and retirees who have been negatively affected by recent bankruptcy proceedings, such as the closure of Sears. At this weekend's Liberal convention, the party encouraged the government to finally do something. The NDP put forward a much more practical proposal in Bill C-384 that would put an end to pension theft once and for all.

Will the government support this bill?

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, the government needs to understand that pensions are deferred wages. Denying workers the pension money they have earned is theft, plain and simple.

Thousands of Canadian workers who have lost hard-earned benefits and pensions due to Canada's inadequate bankruptcy and insolvency laws know this all too well. Why does it happen? It is because the law allows it to happen.

No one can blame workers for being skeptical of the government's commitment to addressing retirement security and their weak-kneed promise to obtain feedback through further conversation. How much more evidence-based feedback does the government need than the thousands of Canadian workers who have lost health care benefits and value from their pensions?

The government must get serious about changing Canada's inadequate bankruptcy and insolvency laws, and make the changes presented in my private members bill, Bill C-384. Those changes would go a long way to helping protect the well-being and retirement security of Canadian workers. As I have travelled across the country in recent months, Canadian workers have made it clear that they want action, not more conversation. End the pension theft.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, the Prime Minister is claiming to have made significant commitments to the budget to end pension theft, but this is just not true. There were no answers from the Prime Minister during his PR trip last week about changing the laws to protect workers' pensions. Workers have had enough talk. It is time for action. We can and we must end pension theft now.

When will the government outline a real plan for the protection of workers' pensions, like the one I have already presented in Bill C-384?

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, nine years after Nortel failed, leaving its pensioners in the lurch, Sears Canada did the same, terminating 15,000 employees, denying severance or termination pay, and cutting off benefits. At the same time, Sears executives were given over $6 million in bonuses.

Last month, the Prime Minister said that displaced Sears employees could fall back on El and CPP. Sadly, he does not understand that in Canada, the scales are weighted in favour of large corporations and the richest in society. Hard-working Canadians play by a different set of rules or are told to wait at the end of the line.

This is why I have introduced Bill C-384, which offers a simple proposal for ending pension theft. My bill includes amendments to Canada's inadequate bankruptcy laws to ensure that workers' pensions, along with any severance packages, will be paid out ahead of wealthy creditors, banks, and parent companies whenever a company files for bankruptcy protection. These changes would have a profound effect on the lives of many workers and pensioners.

We can and must do more. We have offered the government a solution, and now it is time for it to act.

Bankruptcy and Insolvency Act

[Scott Duvall, NDP, Hamilton Mountain, ON]

moved for leave to introduce Bill C-384, An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance programs).

Mr. Speaker, I would like to take this time to thank my seconder, my colleague who has done great work and works very hard in this House, and who has also helped me a lot on this bill.

I rise today to introduce a private member's bill titled, an act to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act. This bill will amend the Bankruptcy and Insolvency Act and the CCAA so that companies will have to bring any pension plan fund to 100% before paying any other secured creditors. It also makes amendments to require companies to pay any termination or severance pay owing before paying any secured creditors.

Other amendments will prevent a company from stopping the payment of any post-retirement benefits during any proceedings under the BIA or CCAA. These amendments will inject some fairness into a process that often sees the interests of workers, retirees, and their families placed behind all others.

We must fix the imbalances in current legislation and provide Canadian workers, retirees, and their families with the protection they expect and deserve. I am hopeful that all my colleagues in Parliament will put aside their partisan differences and support this bill. Canadian workers, retirees, and their families deserve no less.

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