An Act to amend the Pension Benefits Standards Act, 1985 and the Companies’ Creditors Arrangement Act (pension plans)

This bill was last introduced in the 42nd Parliament, 1st Session, which ended in September 2019.


Erin O'Toole  Conservative

Introduced as a private member’s bill. (These don’t often become law.)


Defeated, as of Nov. 28, 2018
(This bill did not become law.)


This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Pension Benefits Standards Act, 1985 to authorize the administrator of an underfunded pension plan, in certain situations, to amend the plan or to transfer or permit the transfer of any part of the assets or liabilities of the pension plan to another pension plan. The amendments also provide for the tabling of an annual report respecting the solvency of pension plans.
The enactment also amends the Companies’ Creditors Arrangement Act to provide for conditions respecting the approval of any plan offering incentives to certain directors, officers or employees to remain in the company’s employ.


All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.


Nov. 28, 2018 Failed 2nd reading of Bill C-405, An Act to amend the Pension Benefits Standards Act, 1985 and the Companies’ Creditors Arrangement Act (pension plans)

October 19th, 2022 / 5:45 p.m.
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Marilyn Gladu Conservative Sarnia—Lambton, ON

Yes, it was actually a drafting error on my part. That was a leftover from Bill C-405. We tried to get rid of that part of the phrasing. That will definitely need to go out.

The other thing I understand is that the Canadian Labour Congress has concerns about the suggestion of the insurance mechanism to get a third party to insure a pension.

Is it true that you'd like to see that part deleted as well?

Bankruptcy and Insolvency ActPrivate Members' Business

June 15th, 2022 / 6:20 p.m.
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Marilyn Gladu Conservative Sarnia—Lambton, ON

Madam Speaker, it is very encouraging to hear all parties in the House agree that this bill needs to go to committee. Over the last 10 years, there have been multiple attempts by multiple parties to address the issue of pension protection in Canada. We have seen countless Canadians impacted: They have not received their severance or have received pennies on the dollar.

Bill C-228 would do three things. First, it would allow the annual report on the solvency of funds to be tabled here in the House so that it is a matter of public record and we know which funds are in trouble. Second, it would provide a mechanism to transfer money into those funds without tax implications to top them up and restore them to solvency. That is really where we want to be. Third, in the case of bankruptcy, the bill would make pensions a priority, after source deductions and taxes and suppliers take back their goods, but before large creditors and unsecured creditors. That is where we have put the priority for pensioners to receive their due.

I thank the member for Manicouagan and the member for Elmwood—Transcona for the many discussions we have had on things we need to do to the bill to try to address concerns. I also thank the members who have spoken tonight: the member for Kingston and the Islands, members from the Bloc, my colleague from Hastings—Lennox and Addington and even the member for Whitby, who presented a petition in the House on pension protection. This just shows that the time is right for us to work together and get this right at committee.

One thing we are going to be working on and talking about at committee is cleaning up some of the clauses. There were a number of bills and each one of them had something in it that everybody did not like. When we were cleaning up some of the things we did not like in the previous bill, Bill C-405, a couple of clauses got left behind, so we got rid of them.

The insurance idea is something people want to talk about at committee. Some people like that idea and some people do not. The NDP also correctly raised the point that pensions are not the only consideration; severance pay is too. It is something people have not received when companies are in bad shape. That should go in, with the same priority as pensions. I agree with that.

In trying to make sure that we do not get the unintended consequences that the member for Kingston and the Islands was talking about, one thing of concern is whether or not businesses can get adequate credit. We have allowed a different coming-into-force time. The reporting and topping up of funds would be immediate, but we would give a number of years before the priority part of this bill comes into force. That would allow businesses time to get their house in order, and I would argue that if they cannot get their act together, they are a greater financial risk, so they should pay the associated consequences for that.

I am happy to say that there is support in the Senate. If the bill makes it out of committee and goes to the other place, there is support from multiple parties in the Senate, from Senators Plett, Yussuff and Dalphond. There is also huge stakeholder support across the country. Letters have gone out everywhere from Mike Powell with the Canadian Federation of Pensioners, CARP and the number of other stakeholders that have come forward.

I am encouraged by what I have heard today. I know this is what Canadians want us to do. They want us to work together, have the discussions and work collaboratively. As the twice-named most collegial parliamentarian, it is my pleasure to work together across the aisles. This is important for seniors in our country and it is important for people who work their whole lives. We can do something great in this moment, so I encourage all members of the House to support Bill C-228 and send it to committee. Let us work together and get this done for Canadians.

Bankruptcy and Insolvency ActPrivate Members' Business

June 15th, 2022 / 6 p.m.
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Shelby Kramp-Neuman Conservative Hastings—Lennox and Addington, ON

Madam Speaker, I am very happy to rise today to speak to this very important piece of legislation tabled by my colleague from Sarnia—Lambton.

Pension protection has been at the forefront of our legislature for what seems like years. Every Parliament has had various attempts to protect worker pensions from insolvency. They are tabled and it seems that every Parliament has this issue which we all agree is important, but it dies on the Order Paper.

Hopefully, Bill C-228, an act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985, will finally see our legislature take concrete action to protect Canadian workers and their hard-earned pensions.

Bill C-228 amends the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act to ensure that claims in respect of unfunded liabilities or its 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 plans and provide benefits to, or in respect of, its employees or former employees.

This area has particular importance to me given my previous career as a financial adviser and current career as the official opposition's shadow minister for seniors. Workers spend their entire lives building something for them to enjoy during their golden years. Bill C-228 is a big step forward in securing those years for future generations.

This legislation builds off two previous pieces of legislation that were before the House: Bill C-405 in the 42nd Parliament and Bill C-253 in the 43rd Parliament.

Bill C-405, which was tabled by my hon. colleague from Durham, was unfortunately defeated at second reading. The logic from the government according to the now Minister of Justice, was that the “proposed changes reduce the flexibility of courts based on particular situations and facts. These current flexibilities help to achieve the best outcome for the company and the pensioners and they might conflict with important policy objectives.” The NDP felt that the legislation did not accurately protect pensions.

The following Parliament saw a little more progress on the file. The member for Manicouagan managed to garner enough support to send her attempt to committee despite opposition from the Liberals, who claimed:

[T]he employee group benefit claims would be weakened and that could ultimately weaken companies in their ability to restructure and affect that sense of competitiveness of firms with respect to defined benefit pension plans as well as group insurance benefit plans, which would not necessarily help pensioners and workers in all cases. It has the potential to threaten the existence of defined pension plans.

While the bill may not have been perfect, we on this side of the House were willing to put the financial security of Canadians ahead of any partisan differences and we pledged to send the bill to committee so that it could be improved. Over seven meetings and after consultations with dozens of witnesses and expert testimony, the bill was returned to Parliament amended and improved.

I bring up Bill C-253 because this legislation that we are speaking about here today is very much a spiritual successor to that earlier piece of legislation. The two pieces of legislation share a very large amount of the same text. What Bill C-228 does is build on the very good work that was done on the file in the last parliamentary sitting by amending the Pension Benefits Standards Act, 1985, to empower the Superintendent of Financial Institutions to determine that the funding of a pension plan is impaired or that the pension plan administrator is at risk and to set out measures to be taken by the employer in respect of the funding of the plan in such cases.

Michael Powell, president of the Canadian Federation of Pensioners, said:

We support Bill C-253 and the extension of superpriority to pension deficits. This is the simplest solution to meaningfully improve pension protection for Canadian seniors.

In our Canadian regulatory environment, the only single place to protect pensions is within insolvency regulations. This committee and Parliament face a decision between the status quo—which leaves seniors' future financial well-being at risk and perpetuates an unfair system designed to exclude seniors from protecting their own financial interests, an unfair system that has been proven to significantly harm older Canadians—and a new future that offers protection to vulnerable seniors.

Mr. Hassan Yussuff, former president of the Canadian Labour Congress, was also supportive, saying, “The CLC, of course, supports Bill C-253, and I want to thank the members who voted to advance this bill.”

Unfortunately, an election call meant the death knell for Bill C-253. While the bill itself is dead, the spirit of co-operation among all parties that followed Bill C-253 need not be.

During debate on Bill C-253, the legislation's previous iteration of Bill C-228, the former member for Hamilton Mountain called for support of the legislation, even though he had a similar piece of legislation tabled before the House, Bill C-259. Unless I missed my mark, that legislation has been reintroduced in this Parliament by the member for Elmwood—Transcona as Bill C-225. The former member for Hamilton Mountain said, “I feel strongly about the necessity of these protections put forward, so much that my bill, Bill C-259, contains equivalent measures to every article contained in this bill. I would like to let her and the House know that I am calling on all my NDP colleagues to support the bill at second reading and I hope to see it get to committee.”

I hope my honourable friend and his party will continue down the path of co-operation and multipartisanship that his predecessor did.

I mentioned earlier how I had a previous life as a financial adviser. I saw first-hand the complete destruction of livelihoods that tore through Hastings—Lennox and Addington when Nortel and Sears went belly up. The financial security of nearly 37,000 Canadians went up in smoke overnight.

These were terrible lessons that affected every single one of our ridings and lessons that we cannot continue to ignore. We, as a legislature, need to work toward protecting Canadian pensioners. We have before us a piece of legislation that has previously received support from the majority of parties in this House. It is a piece of legislation that, in fact, has been tabled by two separate parties. How often can we say that? It is a piece of legislation that has already gone through the scrutiny of a parliamentary committee and debate.

I would suggest to my colleagues in the House that we do the right thing, pass Bill C-228 into law and avoid the fate of so many other attempts to protect Canadian pensioners.

Bankruptcy and Insolvency ActPrivate Members' Business

April 1st, 2022 / 2:20 p.m.
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Chris Lewis Conservative Essex, ON

Madam Speaker, it is my pleasure to rise in the House today to speak to Bill C-228, a bill brought forward by my good friend and colleague, the MP for Sarnia—Lambton.

The intent of this excellently drafted bill is to offer concrete pension protection for Canadian seniors, something that is seriously lacking in Canada’s existing laws. In the context of rising inflation, the alarming increase in our national debt and climbing daily costs, this bill is never more needed than now. As the cost of living keeps going up, seniors will be left without enough to live on if their pensions are subject to insolvency.

A pension is the portion of a worker’s wages that companies put aside for the worker’s retirement. This is not only money that employees have earned; it is understood to be their reward for their years of hard work. It is heartbreaking to hear countless stories of employees who have had their pensions drastically cut and their plans for retirement dashed. One local example of the devastation that results in the absence of adequate pension protection is the former General Chemical plant, a company that was located in the town of Amherstburg in my riding. On the brink of bankruptcy, it pulled up stakes, leaving only hardship in its wake.

In an article in the Windsor Star in 2010, recently updated in 2020, we learned of Fran McLean and how she was impacted. Fran worked for 47 years at the Amherstburg plant. A significant portion of the money Fran had worked hard to set aside for her retirement during those 47 years was lost. She had worked all those years at the same company, sacrificing her time and energy and the better part of her life, only to have the bulk of her pension income taken from her.

Fran’s pension income fell from $2,500 to $1,900, and then came a final cut to $1,000 a month. Imagine the impact of an income cut of $1,500 during retirement years. What does this kind of situation do to a person's mental health? What does it do to their family? What does it say about our nation and the value we put on the seniors who have built our communities?

One of the greatest days of my life was when my grandson, Levi, came into this world. He is a joy to be with. One thing I especially look forward to as he grows up is to be able to buy him hockey gear and take him out for fun activities together with his grammy, my beautiful wife Allison, when we retire, but for those who have lost a major part of their pension, this can be a huge challenge. Now, on top of all that, inflation is making it difficult to even pay for necessities, never mind the things that bring us joy.

Those who have worked hard to contribute to their pensions in the first place now live in fear that without the proper laws in place to protect those pensions, all can be lost. Workers are not even considered priority creditors, and sometimes, as was the case at General Chemical, they are not at the table at all. That is just not right.

I want Canada to lead the way in rewarding hard-working seniors in what are supposed to be their golden years. I just do not see that with the current laws regarding pensions. All Canadians should have a secure and dignified retirement, along with peace of mind when it comes to the contributions they have made to their retirement pensions.

As General Chemical and Sears have shown, the security of a pension can be lost in a moment. We must and can do better for our seniors.

Cody Cooper lives in my riding. He is president of the Chrysler Canada retirees organization. Mr. Cooper puts it like this: “We need to stop using pensions as piggy banks to solve liquidity problems. It doesn’t cost taxpayers anything to ensure people get the pensions they worked their whole lives for.”

That is exactly right. We are not asking the government to pay money to anyone it does not belong to. To be clear, prioritizing workers during bankruptcy does not cost the taxpayer anything. If a company signs a contract with an employee, that agreement should be kept to the end of their employment, and in the case of a pension, to the end of the person’s life. A company should not be able to back out when it comes time to pay.

Bill C-228 brings together past bills of a similar nature and would add some new and significant changes to the existing legislation. The current legislation makes it optional for companies to act on insolvency. Meanwhile, courts can step in, but only voluntarily. This must change.

Bill C-228 answers the problem of pension insolvency in three main areas. First, it would require that an annual report on the solvency of pension funds be tabled here in the House of Commons for greater transparency and oversight. This is exactly the kind of issue that needs more transparency and oversight from the government. Second, it would provide a mechanism to transfer funds into a pension fund to restore it to solvency, to ensure the insolvent portion until the fund can be restored. These first two points will make sure there is scrutiny to ensure that pension funds are solvent, that they remain solvent or that they are fixed if they are starting to slip. Third, in the case of bankruptcy, pensions would be paid out ahead of large creditors and especially executive bonuses. With respect to the latter, companies have been giving out bonuses or paying off their debt to creditors before they pay their employees' pensions. This is a classic example of the rich getting richer.

My good friend and colleague, the MP for Sarnia—Lambton, has shared in her op-ed in The Sarnia Observer that one of her neighbours was let go amid Sears's bankruptcy. At the end of the day, she was only paid 70¢ on the dollar, yet “All the executives got big bonuses”, she said, and “That is just not right.”

In the case of the Sears bankruptcy, former employees had the pain of losing their jobs at Sears and a portion of their pensions from the $270-million deficit in the pension plan. Bill McKinnon from Windsor, who started at Sears in 1975, said, “For us pensioners that were counting on that, we’ve lost our medical, we’ve lost our life insurance, we’ve lost our dental, we’ve lost our prescriptions, and by the looks of it, we’re going to lose over 20 per cent of our pension.”

The Canadian Association of Retired Persons, CARP, did a survey of its members who had pensions, and almost 40% said they were afraid they were going to outlive their money. This is the reality of the current legislation. Seniors have no control of their own money and no control over their finances for their retirement years.

Laura Tamblyn Watts is the chief executive of CanAge, a non-partisan national advocacy group for seniors, and a lawyer and seniors advocate. She said that “everyday Canadians” may not understand the technical terms in the law, but they understand the Sears Canada story. She notes, “For instance, if you tell somebody that the pensioners at Sears in the U.S. didn't lose any money or any benefits—but they lost 20 per cent (of their pension payments) in Canada and really all of their benefits—people are shocked to understand that the U.S. has better protection.”

Bill C-228 has taken into consideration the content of several previous bills, such as Bill C-405 from the Conservative MP for Durham, Bill C-253 from the Bloc member for Manicouagan and a bill from the NDP member for Elmwood—Transcona, who reintroduced the bill by former MP Scott Duvall. That was Bill C-259 in 2020 and is now Bill C-225. In drafting this bill, my hon. colleague has studied and researched the current laws, and has included the many organizations, experts and individuals needed to make this bill a success.

My colleague, the MP for Sarnia—Lambton, is open to amendments to this bill as debate and research continue at committee. Anything proposed that would improve pension protection for our seniors would be on the table for review. That is why I am more than happy to support this excellent bill. I commend my colleague for bringing this issue before the House. Furthermore, in my new role as shadow minister for labour, I am thrilled that this long overdue legislation has been presented to the House. Let us act now before we have another General Chemical or Sears. It is always a good time to do the right thing.

Bankruptcy and Insolvency ActPrivate Members' Business

April 1st, 2022 / 1:30 p.m.
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Marilyn Gladu Conservative Sarnia—Lambton, ON

moved that Bill C-228, An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985, be read a second time and referred to a committee.

Madam Speaker, today is April Fool's Day, so I could not start this speech without saying that one would have to be a fool not to support my private member's bill.

My private member's bill is centred on pension protection and working to prevent the loss of pensions for employees whose companies have declared bankruptcy. Canadians deserve to know that the contributions they have made over their whole lives will result in a secure financial future for themselves and for their families. However, the last few years have shown us that security can disappear in a moment. We need to do better for Canadians.

My bill would remedy this issue. It would do three things. First, it would require that an annual report on the solvency of pension funds be tabled here in the House of Commons for greater transparency and oversight.

Second, it would provide a mechanism to transfer funds into a pension fund to restore it to solvency or to ensure the insolvent portion until the funds could be restored.

Finally, in the case of bankruptcy, pensions would be paid out ahead of large creditors and executive bonuses.

To put things in context, I want to point out that there have been far too many cases of businesses that have declared bankruptcy to the great detriment of their own employees.

Nortel Networks declared bankruptcy in 2009, leaving 200,000 Canadians to fend for themselves when it came to their pensions. An article published in the Financial Post in 2016 entitled “The big lesson from Nortel Networks: Pension plans aren't a guarantee” gave a detailed account of the battle waged by these employees as they tried to recover even part of their share of Nortel's assets, which were estimated at $7.3 billion. Legal and consulting fees totalled over $1.9 billion, which further reduced the amount these former employees were seeking.

According to CBC, at the end of 2016, former Nortel employees were pleased with the agreement they reached under which they would get a payout of 40¢ on the dollar. That was an improvement over the 10¢ on the dollar they were initially offered.

However, in 2020, the employees lost out again when the Ontario pension benefits guarantee fund managed to reclaim some $200 million from monies allocated to pensioners in Nortel's bankruptcy proceedings.

In all, the whole mess with Nortel turned into a more than 11-year battle for former employees who failed several times while simply trying to obtain the financial security to which they were entitled. That is just one example.

Sears Canada is another infamous case, perhaps one of the most well known. Between 2005 and 2013, Sears Canada paid more than $3 billion in dividends to shareholders, even as it was operating at a loss and its pension plan was underfunded by about $133 million.

In 2017, Sears Canada declared bankruptcy after attempting to restructure. During that restructuring, Sears Canada faced heavy criticism for giving retention bonuses to 43 executives and senior managers, when it did not plan to offer severance to laid-off employees. Allegedly, the bonuses were intended to maintain the morale of senior staff at the cost of providing the necessary funds to the company's pension plan, leaving more than 17,000 pensioners cheated of their full pensions.

Sears pensioners learned that their payments were going to be cut by 30%. Of Mount Pearl, Newfoundland, 72-year old Ron Husk told the CBC that the cut caused his monthly pension payment to drop by $450. Many said they would have to go back to work in sales in their seventies. Pensioners in Ontario fared marginally better because of the provincial mechanism that protects the first $1,500 of a pensioner's payments, but it made little difference overall and in today's era of extreme inflation it is helping even less.

Looking back further, when the Eaton company folded in 1999, the vast majority of its 24,500 employees were terminated without being paid termination pay, severance pay and other amounts owed to them. All employee and retiree health and other benefits were cancelled. In the end, the liquidator released payments to employees and retirees of just 53.7¢ on the dollar.

There are several other noted cases in which courts have ruled in the favour of creditors and lenders over pensioners, including Indalex, Stelco and Grant Forest Products, among others. In the Indalex case, Indalex Limited obtained creditor protection under the Companies' Creditor Arrangement Act, known as the CCWA. The court authorized Indalex to obtain debtor in possession, or DIP, financing, which would provide the company with loans to allow it to continue operating its business during the restructuring period. These DIP lenders had superpriority over the existing debt equity and other claims.

At a hearing for the approval of this motion in 2008, two groups of pension claimants opposed the distribution, asserting that assets equal to the funding deficiencies in two defined benefit pension plans administered by Indalex were deemed to be held in trust and should be given to the pension plan in priority over the DIP lender. The CCWA court ruled in favour of the DIP lender, not the pensioners. This decision was upheld and became a precedent for the Grant Forest Products case.

Sadly, many other examples of workers who did not receive their full pensions exist.

There is no doubt that this has been a problem for a long time. The government needs to intervene by taking stringent measures to rectify this and protect Canadian workers. I want to acknowledge the contribution of some of my colleagues in the House. Many MPs from all parties came to see me to present bills on this same topic.

In 2018, my colleague, the member for Durham, introduced Bill C‑405 on pension benefits standards in order to authorize the administrator of an underfunded pension plan, in certain situations, to amend the plan or to transfer or permit the transfer of any part of the assets or liabilities of the pension plan to another pension plan. This bill did not receive enough support, because changing the type of pension or the benefit amount means breaching the contract signed by employees who worked for a company for a certain number of years and thought they would receive a certain pension.

His bill also called for the tabling of an annual report in Parliament respecting the solvency of pension plans, which I thought was a useful and brilliant provision.

Currently, there is a requirement for an annual report on the solvency of a fund, but it goes to the superintendent of finance and what, if any, actions are taken is not clear. In fact, there is evidence, with companies like Air Canada, that pension fund insolvency has been allowed to continue for far too many years. My bill would require this report to be tabled here, for greater transparency and oversight.

In October 2017 and again in 2020, the Bloc member for Manicouagan introduced a private member's bill, Bill C-253, which would have amended the Bankruptcy and Insolvency Act and the CCAA. The bill would have provided priority status for pensions in the event of bankruptcy proceedings. It ultimately made it to committee but died on the Order Paper when the Liberals called the election. I have incorporated her bill here with some suggestions that were brought forward.

There was concern that implementing an immediate priority for pensions could have unintended consequences. The suggestion was to have the coming into force of the reporting on the insolvency of funds to happen immediately, along with the mechanism to top up the fund to restore it to solvency. It was recommended to have several years of time for companies to get their funds in order before implementing the priority part. Five years was suggested in the bill, but there are stakeholders who would prefer to see it at three years. I am flexible about this, and these are exactly the types of conversations that need to happen when the bill goes to committee.

Most recently, the NDP member for Elmwood—Transcona reintroduced work first put forward by former MP Scott Duvall. What was originally Bill C-259 in 2020 would amend the 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 would also provide that an employer had to maintain group insurance plans that provide benefits to or in respect of its employees or former employees. This was the part of the bill that was a sticking point. This bill would also amend the Pension Benefits Standards Act to empower the superintendent of financial institutions to determine that the funding of a pension plan is impaired or that the pension plan administrator is at risk, and to set out measures to be taken by the employer in respect of the funding of the plan in such cases.

What I did was cherry-pick from all of the ideas that were previously supported by the House and put them all together in Bill C-228. Learning from both the numerous cases of company collapse and the various pension protection bills that came before to improve pension protection in a way we can all agree on is my goal here today. I also want to acknowledge that the Liberal member for Whitby is sponsoring e-petition 3893 on pension protections, supporting this very issue.

My bill has been reviewed by a variety of stakeholders, including the Canadian Federation of Pensioners and the Canadian Association of Retired Persons. Bill VanGorder, the chief operating officer of CARP, offered this quote:

Most older Canadians have fixed incomes but face rising costs, growing inflation, an unpredictable economy and retirement savings that suffer as a result. The Canadian Association of Retired Persons (CARP) believes it is vital that the Federal Government protect pensioners by giving them ‘priority’ status and creates a pension insurance program that insures 100% of pension liabilities. This proposal would go a long way in making that happen.

Some banks and large financial institutions have expressed their reluctance. They are concerned that if pensioners are given priority, companies with insolvent funds will have to pay higher interest rates to obtain credit and will be less likely to apply for credit.

This is part of the reason why the timing of the implementation should allow time for companies with insolvent funds to get their finances in order.

I would like to point out that if a company cannot restore the solvency of its fund after a period of five years, it should indeed pay a higher interest rate to obtain credit, because it really does present a higher risk.

The Canadian Labour Congress would like unions to have a say in how priorities are set when it comes to pensions.

If we can agree on the priority status and include that in the legislation, so that it is not subject to whim or pressure, I think that would strengthen pension protection.

In summary, this is reporting to Parliament on the solvency of funds for greater transparency so that we can ensure actions are being taken to protect pensions; creating a mechanism to top up the funds to restore solvency; and, in the event of bankruptcy, ensuring that people who have worked their whole lives receive the pensions they were promised.

The Library of Parliament has created an excellent table from the three-inch-thick Bankruptcy and Insolvency Act to show where I am suggesting pensions go in the priority of discussion. They would come after source deductions for CPP, QPP and EI and taxes due; after suppliers take back their goods delivered within a month of bankruptcy; after salaries up to $2,000 and the associated contributions; and before secured claims, preferred claims and unsecured claims.

Many members of the House in all parties have indicated their support for getting this bill to committee. I am open to consideration of other suggestions on how we can work to improve this bill to provide a successful outcome for Canadians, and I look forward to the industry committee's review of the bill.

I want to thank my colleagues for all their support in drafting this bill, and the MPs for Durham, Manicouagan and Elmwood—Transcona for their efforts to enhance pension protection. I would also like to thank Mr. VanGorder for his support and Mr. Mike Powell, the president of the Canadian Federation of Pensioners, for his invaluable help on this bill.

Finally, I want to end with a call to action. For many years, the House and the Senate have tried to address this issue. We have the opportunity now, as members of Parliament in difficult times, to come together and ensure that Canadians no longer find their pensions and retirement in jeopardy. We can work together to ensure that Canadians are able to live in dignity in their golden years, able to support themselves and their families with their hard-earned pensions.

Let us show Canadians that we have their interests at heart and support Bill C-228.

Bankruptcy and Insolvency ActPrivate Members' Business

June 7th, 2019 / 1:50 p.m.
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Erin O'Toole Conservative Durham, ON

Madam Speaker, I am honoured to give a speech on this bill. I would also like to thank the member for Manicouagan for her bill on this very important topic.

Retirement security is a very important issue. Seniors' overall financial security is an even more important issue for Conservatives.

I agree that there is a problem with our pensions at the moment, but I do not agree with the solution put forward in this bill.

I do not support this bill because it will create more problems for businesses in financial crisis.

Last year, I introduced Bill C-405, which deals with this issue. Neither the Bloc Québécois nor the other parties supported my bill, which is a shame because my bill did not create problems for small businesses.

There were fewer problems with Bill C-405, which I introduced, because while we can agree that there is a problem with underfunded pension liabilities for pension plans, not the contribution-based plans but the defined benefit plans, when the pension is underfunded, we know it is a problem if there is insolvency of a company.

If we changed the bankruptcy laws to a point where we caused more companies at risk to become insolvent, to liquidate, the solution being proposed by the Bloc would actually be worse than what they are trying to cure, even though we are in agreement.

My bill tried to address the issue of underfunded pension liabilities without the impact that changing the bankruptcy laws for Canada and the insolvency laws in the CCAA would do.

My bill would have ended the unfairness of excessive payments that exacerbate pension shortfalls. It would have helped protect workers wanting to retire by giving administrators options to protect and improve the pension funds.

Furthermore, my bill would have increased transparency and accountability by improving the national reports on the solvency of pension plans. It proposed a lot of solutions, without any of the problems caused by Bill C-372.

There is a way to tackle the public policy challenges of underfunded defined contribution pension plans without causing harm to businesses that are in financial distress, which will not be able to receive financing if they have an underfunded pension, because they will not be loaned money by creditors. I agree with the MP's public policy issue here, but we have to have a solution that does not cause disruptions in her province, in my province and across the country.

One interesting point the member may not know is that Ontario has a pension benefits guarantee fund. We have talked a lot about Sears employees. Some of the Sears employees, in Ontario at least, will get assistance from the pension benefits guarantee fund. Other provinces do not have that, so it would be unfair to Ontario, which funds and backstops a pension benefits guarantee fund, to change national insolvency legislation.

I worked as a lawyer on the insolvency and the protection process for Air Canada, which I know that member thinks highly of as our national carrier, based in Montreal. I was at the law firm Stikeman Elliott, which represented Air Canada in its restructuring, and it successfully restructured, as many MPs will know when they take Air Canada back to their provinces later today.

CCAA puts a focus on restructuring, not on liquidating. Restructuring a company saves all the jobs; saves the pension by keeping it a going concern; makes all the suppliers whole, for the most part, or tries to; and keeps that business operating. In the case of Air Canada, restructuring kept it in place to provide an important service that a lot of Canadians use. Therefore, our focus when companies are in trouble must be to help the company survive.

If the company survives, the pension fund is fine. If the company does not survive, then the liquidation will take place, and even if we applied superpriority to pensions, with most companies it would still only amount to pennies on the dollar or a much-reduced pension outcome. My bill, Bill C-405, tried to give pension administrators the ability to keep that fund going within another fund so that the pensioners who were stranded could get the upside of an existing fund through the pooling of resources and the ability for their returns to go up.

In an insolvency, all the pension administrator can do is buy an annuity. As a result, those pensioners will be locked into a far lower annuity payment amount, because that annuity has to be purchased at a time when the markets are likely bad, and it will basically guarantee a bad outcome for pensioners.

What is the solution? It is to keep companies operating. CCAA's focus is on maintaining those companies as going concerns, as well as their pensions and their employees.

Let us take out some of the abuse. Bill C-405 proposed to take out some of the abuse occurring through key employee retention plan payments, whereby companies give large executive payments that seem to drain the company of resources while the pension was underfunded. Bill C-405 also tried to work with provincial securities regulators to make sure that there was a national health report on pensions each year. Canada already produces one, but it does not collaborate with the provinces, where most of these pensions are administered. The federal government can change insolvency legislation, but these are actually, in many cases, provincial pension funds.

Sears Canada had its assets hollowed out by its main shareholder in the United States, thereby stripping out resources that could have been used for the pension. In cases like Sears, some of those actions could be prevented by securities laws and securities regulation, so my approach was also to have a report in which all levels of government and security commissions would look at ways to prevent the stripping out of resources.

A lot of people out there, including great people at the Canadian Federation of Pensioners, CARP and others, see changing our bankruptcy and insolvency laws as a magic bullet. It is not. I do not think anyone wants to see more companies driven into liquidation. We want to see them survive, but how can we backstop and preserve payments to these pensioners?

I think there is a way to do it without the negative consequences of superpriority, as it is called. Why do I know that this approach is better? It is because multiple governments at multiple levels have never fulfilled on pension superpriority, and even bills here in this Parliament are coming late in the session, because the studies have shown that more companies will go under as a result. We want the companies to survive so that the jobs and the pensions are preserved, which is what CCAA and restructuring legislation are about.

I want to thank the member for her bill and thank her for the opportunity to speak to the elements of the issue that I agree with her is an issue we have to tackle.

Budget Implementation Act, 2019, No. 1Government Orders

June 4th, 2019 / 7:55 p.m.
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David Sweet Conservative Flamborough—Glanbrook, ON

Mr. Speaker, it is an honour to rise in this place to speak to Bill C-97, the budget implementation act.

I am profoundly concerned.

The federal budget is a government's opportunity to present its plan for the country and its economy. It is its opportunity to demonstrate to Canadians that true political leadership is the art of the possible.

It is concerning that rather than accomplish the possible things that could help Canadians prosper, the Liberal party refuses to recognize that more and more Canadians are just getting by and not getting ahead.

Canadians need budget measures that at least acknowledge their struggles and help provide them some relief from the escalating costs of day-to-day life, not ones that simply continue the Liberals' long history of tax-and-spend policies that instead hurt families, businesses and the sustainability of government programs on which people rely.

Again, in this budget, there is no plan. Instead, Canadians are getting tax increases that only make their situation worse.

There is no question that over the past four years Canadians have suffered under a Liberal government that misses opportunities, mortgages our children's futures, lacks a plan and neglects the needs of workers and families.

Let us talk about the concerns of the constituents I represent in Flamborough—Glanbrook and what they have been feeling as far as Liberal neglect is concerned.

In the greater city of Hamilton, thousands of Stelco workers and pensioners have been forced to deal with great uncertainty and have really struggled after the company moved into creditor protection on two different occasions, 2004 and 2014. These are Canadians who have or are at risk of losing their dream of a dignified retirement after decades of hard work.

What I have heard from every pensioner who has reached out to me on this issue is that he or she has serious concerns that the bankruptcy process puts investors ahead of pensioners.

Bankruptcies at Sears and Nortel over the years have resulted in similar dire circumstances for their pensioners. Thousands of Sears employees were out of work when the store closed in December 2017, yet there was no real pension protection for employees who had been there for 10, 20, 30 years or more.

A pension is deferred wages. That it is even possible to lose deferred wages is totally unacceptable.

The Liberals promised action years ago. More empty promises in this budget do not a plan make.

Our previous Conservative government took an important first step when we brought in changes that required companies to fulfill their pension obligations when they sought creditor protection. I am happy that change was made because it was a crucial first step toward protecting pensioners. However, there are many more steps to take. That was just the first and more needs to be done.

It is possible to make changes to our laws and regulations to improve protections for pensioners. The question becomes, what changes should be made and how do we make those changes? This is not a question to which one party has all the answers.

It is not my intention to over simplify the challenge before us. I remind my colleagues that political leadership is the art of the possible. Millions of Canadians rely on their pensions. This issue is too important to avoid action because the problem is too complex. Nor should members be divided down partisan lines. We have to make this change possible.

That is why, in 2017, I called upon the government to charge one of our parliamentary committees to review the Bankruptcy and Insolvency Act, the Companies' Creditor Arrangement Act and the Investment Canada Act. That was 18 months ago.

I strongly believe a parliamentary committee is the ideal place to begin. A parliamentary study allows members of all parties to examine important statutes and regulations and provide their input on the matter. In hearing from stakeholders, public servants, legal and industry experts, a committee study allows members to determine where exactly the issues are and what exactly is possible. All of the testimony would be a matter of public record, meaning that those arguing for and against changes would be subject to scrutiny, and rightfully so.

Committee members then have the opportunity to make recommendations to the government as to what problems need to be addressed and how they could be addressed.

Having previously chaired the Standing Committee on Industry, Science and Technology and understanding the issues that come before it, that would make a lot of sense.

Unfortunately, when my Conservative colleagues brought forward a motion to begin such a study at committee, the Liberals voted it down. Instead of taking advantage of the power of a parliamentary committee, the Liberals blocked that study and made it clear that looking at new ways to protect pensioners was not a priority for the government. In the 18 months since, we have essentially heard nothing from the Liberals regarding pension protections. A lot could have been done by now if the Liberals had the will.

Ironically, in the latest budget, the Liberals committed to giving pensioners greater peace of mind by “enhancing retirement security”. Is this vague commitment what pensioners have been waiting for all these years? The Liberals are not prepared to take the very possible and meaningful steps to follow through on those words. While moves toward greater transparency in the process are all well and good, the budget falls far short of actually providing concrete protections for pensioners when their company files for creditor protection.

It is not just the official opposition that sees this legislation as woefully lacking. The Canadian Association of Retired Persons and the Canadian Federation of Pensioners agree that Bill C-97 falls well short.

When I met with the United Steelworkers a few weeks ago, they made it abundantly clear to me that this was their number one priority, because there are still workers and pensioners who are struggling, stressed out and concerned for their futures.

This issue should transcend partisan boundaries. My Conservative colleague, the hon. member for Durham, when he introduced Bill C-405 to begin making changes to better protect pensioners, said that “securing the retirement and pension security of Canadians is another time that we should work together on all sides of this House to bring certainty to hundreds of thousands of Canadians in their retirement.”

The hon. NDP member for Hamilton Mountain, who has offered his own private member's bill on pensions as well, referred to the issue as a “legislative crisis”.

Even the Liberal Minister of Seniors, who is also the member for a neighbour riding of mine, Hamilton West—Ancaster—Dundas, told the CBC that more study was needed on pensions. That begs the question: If the position of the Liberal government is that more study is needed, why did the Liberals vote down a Conservative motion to study pension protections at committee? I think Canadians deserve an answer to that question, and the government better have a reason that is better that petty partisanship. The financial security and safety of our retirees is far too important for that.

I reiterate my belief that a complete review of the legislation governing pensions and insolvency is needed, one that considers the perspectives of all stakeholders: workers, business leaders, industry experts, civil servants, bondholders, banks, and suppliers who, by the way, get victimized very regularly as well when a company goes out of business. Small suppliers who have a handful of employees are forced into bankruptcy and their employees lose their jobs because they are so far down the list as well. They should be part of the stakeholders who come before our committee, and so many others, who can give their testimony in regard to how bankruptcy should be handled and the priority in which the claims should be made. This is not and never will be an issue that only one party can solve on its own.

The Liberals did not want dialogue, and it is reflected in this bill because their proposals are not only inadequate but fail to even broach the crux of the issue. This is not an issue that can be meaningfully addressed in a massive omnibus budget bill. I implore the Liberal executive to allow committees to do what they do best. The issue requires an approach that allows members of all parties to take the time to have an in-depth debate on this specific issue without the looming threat of time allocation to get the budget through.

Pensioners work hard for decades to earn a dignified retirement. I am certain that my colleagues right here in the House, who are vested with a pension, would scream quite loudly if all of a sudden it was limited or taken away. The least we can do as elected representatives of Canadian workers and pensioners is to take the issue seriously and provide meaningful changes to protect them.

While we may not be able to make all stakeholders completely happy, it is possible to do much more and better for workers. Let us get this on the front burner now before another 18 months go by.

The House resumed from November 23 consideration of the motion that Bill C-405, An Act to amend the Pension Benefits Standards Act, 1985 and the Companies’ Creditors Arrangement Act (pension plans), be read the second time and referred to a committee.

Pension Benefits Standards ActPrivate Members' Business

November 23rd, 2018 / 2:20 p.m.
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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.

Pension Benefits Standards ActPrivate Members' Business

November 23rd, 2018 / 2:10 p.m.
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Gérard Deltell Conservative Louis-Saint-Laurent, QC

Mr. Speaker, I am very happy to speak to Bill C-405 at this stage. It was introduced by my colleague, the member for Durham, as distinguished an MP as ever there was, who had a brilliant career as a military officer. Before being elected by the people of Durham and serving as a minister of the crown in the Harper government, he was also a corporate litigator, so he knows this issue inside out and knows the concerns of businesses, suppliers and employees.

As a result, we believe Bill C-405 strikes a balance between all parties—the business, its employees and its suppliers—when a business, unfortunately, goes bankrupt.

Let me say that our thoughts are with all those who worked very hard for their company over the years and who were left in the lurch when their employer went belly up.

In my riding, there are people who worked for Sears and other companies. I cannot say his name since I was not able to obtain permission ahead of time, but I want to acknowledge an outstanding volunteer in my riding who is involved in charitable activities. He works a lot with the Montcalm Knights of Columbus in Loretteville. I want to acknowledge him because he has brought up the the Sears situation often enough with me. I think of him when I rise in the House to talk about this subject.

As I said earlier, when it comes to pension funds, we need to find a fair balance between the workers—who are the first to be affected by a bankruptcy—and the other parties involved. This includes the company itself, which never wants to go bankrupt, unless it is run by scoundrels or boors, and the suppliers, who put their trust in the company and the owners, and who also end up high and dry when their partners unfortunately go bankrupt.

In our minds, Bill C-405 gives business owners the flexibility they need to avoid bankruptcy, and it gives employees the chance to come out on top. In addition, the bill would prevent partner companies, like the suppliers of the company affected, from having to pay the price for the mismanagement, tough breaks, or problems that led the company to bankruptcy.

This bill will give company managers more flexibility. However, the bill requires these managers to be more transparent about how they had been managing the company, especially with respect to the pension fund. This bill also provides for safeguards to prevent company administrators from playing around with the workers' pension fund.

Because it strikes that balance, we believe that this bill deserves to be appreciated and passed. It offers a solution to this very serious problem. Ultimately, we hope that all companies can avoid bankruptcy. However, it does happen that businesses go bankrupt and have no other choice but to make necessary but unfortunate decisions. Most importantly, this bill gives businesses the flexibility they need to take a step back before getting back into business in a more positive and constructive way.

Once a company goes bankrupt, it is hard to go back. As the perhaps somewhat overused saying goes, “you can't put the toothpaste back in the tube”. Once a company goes bankrupt, it has to live with the consequences, so it is important to prevent that from happening.

In general, what can be done to prevent a company from going bankrupt? First, it requires sound management. Second, the government needs to stop increasing the tax burden on businesses. This may not be the main topic of my speech, but it is important to remember that imposing a Liberal carbon tax will not do anything to help our businesses prosper.

Maintaining or adding more taxes, as the Liberals have been doing for the past three years, will not help either, nor will mounting frontal attacks, as the government did when it had the Minister of Finance table the proposed tax changes for small and medium-sized businesses on July 18, 2017, in which the government treated business owners as potential fraudsters who were abusing the system. As someone already said outside the House, not all small business owners behave the way the Prime Minister does in his business dealings, quite the contrary.

That is why we need to do everything we can to prevent companies from going bankrupt. The best way for the government to do that is by reducing red tape, by offering more flexibility for financial transactions, and most importantly, by not creating any new taxes as the government has done.

I am pleased to close by saying that, for us, this bill is a step in the right direction to solve the problem facing pensioners in bankruptcy proceedings. It is about having the option to prioritize the status of pensioners when companies are dealing with bankruptcy. As we know, pensioners currently rank in sixth place when a bankruptcy is being finalized. Perhaps we could increase the margin. I have spoken with unions, union members and bankruptcy trustees about this. They all say that, generally speaking, if that is done at the very beginning, it could create more problems, because it will hamper the company's access to financing and greater flexibility in an effort to possibly avoid the bankruptcy. No one wants that.

Giving employees super priority is more likely to create problems in the medium and long term than provide any short-term solutions and could have critical repercussions. That is why we think Bill C-405, an act to amend the Pension Benefits Standards Act, 1985 and the Companies’ Creditors Arrangement Act with regard to pension plans, introduced by my colleague from Durham, deserves the support of all members of the House.

Pension Benefits Standards ActPrivate Members' Business

November 23rd, 2018 / 2 p.m.
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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.

Pension Benefits Standards ActPrivate Members' Business

November 23rd, 2018 / 1:55 p.m.
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Jennifer O'Connell Parliamentary Secretary to the Minister of Finance (Youth Economic Opportunity), Lib.

Mr. Speaker, I am glad to have this opportunity to speak with my hon. colleagues to Bill C-405, which would amend the Pension Benefits Standards Act of 1985, or the PBSA, as well as the Companies' Creditors Arrangement Act, or the CCAA.

Before turning to the bill, I want to remind us all that Canadians work hard and expect their government to do the same. They expect us to make smart and responsible investments that grow the economy now and for the long term. Canadians understand that when we invest in the middle class and in people working hard to join it, everyone benefits.

Canadians expect their hard work will bring about a better quality of life, one where their families and children have greater opportunities and a bright future ahead of them. As well, after a lifetime of hard work, Canadians have earned a safe, secure and dignified retirement. That is why we have some concerns with the bill before the House today.

Bill C-405 was introduced in the spirit of providing greater flexibility for companies to address their pension deficits and protecting Canadians' retirement security. However, the bill contains problematic and unnecessary changes that would endanger Canadians' hard-earned pension benefits.

To give a bit more context, I would like to remind the House of some of the measures the government is undertaking to support Canadians' retirement goals.

In June 2016, we reached a historic agreement with the provinces to enhance the Canada pension plan. The strengthened CPP will provide more money to Canadians when they retire, so they can worry less about their savings and focus more on enjoying time with their families. Increased CPP contributions will be slowly phased in over a seven-year period, starting next January. It will take roughly 40 years of contributions for a worker to fully accumulate the enhanced benefit, which will raise the maximum CPP retirement benefit up to 50%.

To make this clearer, I will provide an example. Today, the current maximum benefit is just over $13,850. If the CPP enhancement were fully in place today, it would represent an increase of nearly $7,300 on that amount, to a maximum benefit of more than $21,100 in today's dollars.

The increase is due to two changes. First, the government is increasing the level of earnings replacement provided by the CPP from one-quarter to one-third of eligible earnings. This means an individual making $55,000 a year in today's dollars over their working life will receive approximately $4,500 more per year when they retire.

Second, it will increase by 14% the maximum income range covered by the CPP, so those who earn more will receive more in retirement.

Now that similar enhancements to the Quebec pension plan are also in place, all Canadian workers can look forward to a more secure retirement. In 2017, the government built on this achievement by reaching an agreement with provincial partners to further strengthen the CPP. Budget 2018 included measures that will give greater benefits to parents whose income drops after the birth or adoption of a child. It also included measures that will provide greater benefits for persons with disabilities, for spouses who are widowed at a young age, and for the estate of lower-income contributors.

These new benefit enhancements will be implemented without raising CPP contribution rates. Strengthening the economy and growing the middle class are important, but so too is making sure people working hard to join the middle class have the help they need to succeed. This is why the Government of Canada has taken steps to ensure more and more people benefit from Canada's economic growth.

In addition to enhancing the CPP, the government also strengthened the guaranteed income supplement. This action provides greater income security for close to 900,000 low-income, single seniors, 70% of whom are women. The enhanced guaranteed income supplement has lifted 57,000 vulnerable seniors out of poverty.

Coming back to Bill C-405, this bill would weaken the security of retirement benefits for workers and pensioners, undermining the government's achievements in enhancing our retirement income system.

The bill would allow the restructuring of employees to reduce pension benefits, subject only to the consent of a minority of plan members. It would allow employers to walk away from their pension promises instead of fulfilling their legal obligation to fully fund all benefits.

As such, the bill runs counter to the government's commitment to find a balanced way to address retirement security. The bill would also harm the ability of companies to retain key employees when undergoing restructuring proceedings. This could make it more difficult to complete a successful restructuring that keeps the company in business and preserves jobs.

In conclusion, over the last three years, our government has been focused on strengthening and growing the middle class, offering real help to people working hard to join it. The government is also focused on building an economy that works for everyone, and the results speak for themselves.

Since we came to office, Canadians have created more than half a million new full-time jobs; the unemployment rate is at the lowest level this country has seen in four decades, and the youth unemployment rate has dropped two percentage points since the beginning of last year. The Canadian economy was also remarkably strong last year, with growth that outpaced all the other G7 countries. It is expected that Canada will remain among the fastest-growing economies this year and next.

We are proud of these achievements, because they are proof positive that our investment and innovations are reaping rewards for all Canadians. However, Bill C-405 would weaken benefit security, running counter to the achievements our government has made and those we are pursuing. For that reason, I urge every member of this House to oppose the bill.

Pension Benefits Standards ActPrivate Members' Business

November 23rd, 2018 / 1:40 p.m.
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Pat Kelly Conservative Calgary Rocky Ridge, AB

Mr. Speaker, perhaps my friend from Sherbrooke might have misunderstood what the bill sets out to do. It does in fact set out to address many of the problems he identified in his speech. There is certainly a problem with the way pension assets are addressed in a bankruptcy proceeding. I completely agree with him on that point. This legislation is part of a solution to some of these issues.

In a free and competitive economy, firms compete with each other for goods and services to consumers. This is the most efficient and effective way for people to get what they want.

However, in a free society with a market economy, businesses will fail from time to time. When a business fails, we need to have appropriate laws in place so companies that have to restructure under bankruptcy remain viable, but can minimize losses to investors, to creditors, to past and present employees and ensure fairness.

Bill C-405 addresses a weakness in Canada's balance between these competing interests in its approach to pensions and bankruptcy and insolvency law. The bill provides a timely and practical approach to an issue that concerns unfunded pensions and bankruptcy cases.

Before speaking further on the content, I want to take a moment to thank the member for Durham for tackling this issue through a private member's bill.

Private members' bills are a great way for opposition members from all parties, as well as non-government members within the governing party, to contribute to the legislative process even if they are not members of the government.

The legislation is great example of a way, through Private Members' Business, we can tackle a problem with a precisely targeted practical and non-ideological approach to a national problem. I encourage all my colleagues from all parties to support this common sense bill.

Canada's current bankruptcy and insolvency laws suffer from weaknesses, which exacerbate unfunded pensions when a business fails.

First, when administering pension plans during bankruptcy proceedings, Canadian companies are required to purchase annuities in order to make payments in the plan. These annuities return only a fraction of what pensioners are owed and prevent pensioners from agreeing to other investment options to salvage their contributions. It often has the effect of forcing the conversion of pension assets at precisely the wrong possible time.

Corporate bankruptcies are more likely to happen at exactly the same time as a general downturn in the economy and in financial markets. What actually causes the bankruptcy in the first place will also cause a conversion of pension assets at the least advantageous time and at the least advantageous valuations. It creates a perfect storm that can destroy pension assets. Administrators of pension plans currently have no flexibility for how best to preserve existing assets in a pension fund.

The second problem is that companies at any time undergoing bankruptcy proceedings need to have strong leadership to guide them back to profitability. They need to have their best employees in order to have any chance to recover.

However, at the same time, paying retention bonuses to executives or key employees of firms with an unfunded pension liability is unfair. Employees do not want to see company executives receiving bonuses, while they are losing their job, having their wages or hours reduced or simply having to endure the strain of uncertainty during a difficult time. Key employees are going to be needed to somehow be retained if a business is going to survive. Limiting or putting conditions on key employee retention payments are needed in cases where a business that has failed has an unfunded pension liability.

The third problem is that pension plans often are opaque. Important information about a pension plans sustainability can be difficult to access by its members. Canadians should be able to see how their pension plan is doing and be able to press their employer to adequately fund a pension.

The best way to solve the problem of unfunded pension liabilities is to not allow a pension to become unfunded in the first place.

By introducing Bill C-405, the member for Durham proposes a solution to these three problems.

The bill would allow pension administrators to secure approval from pensioners to amend the plan or to transfer assets to other plans instead of having to buy annuities at the worst possible time. This would allow more funds to stay in the plan or be reinvested to continue earning returns while bankruptcy proceedings were in progress. It would give administrators more flexibility to salvage the value held in the plan and it would give plan members more say in how their plan would be managed. The bill would ensure plan members themselves would be the ones who would determine whether the administrators would keep the assets invested or convert them to annuities.

Bill C-405 would also improve fairness when restructuring companies have unfunded pensions. It would limit the key employee retention payments that executives could receive during the restructuring, setting pre-conditions for such payments to be made and limiting their size. These measures would prevent executives, officers and owners from profiting from mismanagement and would incentivize them to keep pension plans in good order.

The bill sets the right balance between protecting employee assets and ensuring the business has the best opportunity to recover.

Third, the bill would give past and present employees greater access to information about their plan by requiring an annual public report on its health. It would also facilitate coordination with provincial governments and securities regulators around pension sustainability.

Again, the most effective way to deal with the problem of unfunded pensions is to stop or discourage them from becoming unfunded in the first place. Greater transparency is a key to that objective. With greater transparency comes greater incentive from management to ensure pensions are viable.

These are reasonable means to increase protection for Canadian pensioners, without harming competitiveness and access to capital. The member for Durham explained these points in detail in the first hour of debate, but I will focus on why these measures are superior to other proposals that have been put forward, in particular, the option of creating a super-priority for pensions, which some members of the House would prefer.

Like many of my parliamentary colleagues across Canada, I have received many letters from constituents urging me to protect Canadian pensioners through the creation of a super-priority for pensions in bankruptcy and insolvency cases. They often mention particular examples that are heartbreaking in the way employees have lost their savings after working for many years. They mention companies like Sears, Algoma, Nortel and many others.

We all are tremendously sympathetic to pensioners of companies like those and other failed businesses when the business could not meet its pension obligations. However, creating a super-priority for pensions will not fix the problem. In fact, a super-priority would probably make the problem worse.

Super-priority for pensions would risk creating disincentives to outside investment. It could undermine investor confidence, which would mean more business failures, bankruptcies, lost employment and lost pensions. Super-priority would also make it much more difficult for a business that is being restructured to attract investment at a critical time.

I recognize that some in the House might disagree with me on the issue of super-priority, but why not support the bill anyway? The bill clearly would move the balance of competing interests in the event of a corporate bankruptcy toward workers and pensioners. The bill is surely a move in the direction that those who favour super-priority would want to take us.

The bill would do many things. Therefore, I encourage members to vote for it for what it does rather than what it does not do. The bill would change the current rules to allow more businesses to recover from bankruptcy, more pension assets to be salvaged during bankruptcy, regulate retention bonuses to be paid during bankruptcy and increase transparency on pension plans before they become subject to a bankruptcy proceedings in the first place. The bill is good for workers, for pensioners, for shareholders and creditors.

In conclusion, Canadian workers deserve practical laws that protect their interests and the years of hard work they have put into their companies and pensions. Such laws must strike the best balance between allowing companies to restructure and not being a disincentive to investment. This bill would achieve that balance. I encourage all members of the House to support the bill.

Pension Benefits Standards ActPrivate Members' Business

November 23rd, 2018 / 1:35 p.m.
See context


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.

Pension Benefits Standards ActPrivate Members' Business

November 23rd, 2018 / 1:35 p.m.
See context


The Assistant Deputy Speaker Liberal Anthony Rota

It is Bill C-405, an act to amend the Pension Benefits Standards Act, 1985 and the Companies’ Creditors Arrangement Act with regard to pension plans. We are at the second reading.