Bill C-405 (Historical)

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

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.

Bankruptcy and Insolvency Act

[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.

[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.

[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.

Pension Protection Act

[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 Act

[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. 1

[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.

General Motors Plant Closure

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

Madam Speaker, I appreciate that the member for London—Fanshawe certainly knows the heritage of the old GM Defense company in London as well.

The issue of 2009 brings up a great question. There was going to be insolvency affecting not only hundreds of thousands of jobs but all the retirees. I remind my friend from Hamilton Mountain that he can still vote for Bill C-405, which came out of concerns from General Motors' pensioners about less flexibility. They were worried that all pensioners would be left out.

We do not have insolvency here. I spoke to Mark Cameron, who was in the Prime Minister's Office at the time. The requirement to produce 16% was the result of the negotiation. At the time of the bailout, 16% was how much was being produced in Canada. As part of Canadian participation and the Province of Ontario, GM maintained that. That was the longest time period for vehicle cycles, going out several, that could be agreed to, and I would remind the member that it was done on an urgent basis to prevent a massive failure.

I think Parliament has acted before to address the shock from the great global recession. Now is a time to address the signal being sent that our manufacturing environment in Ontario has some underlying competitiveness issues. The mini-budget released a few days ago by the finance minister is not enough to address some of the concerns that have been there since payroll tax increases and others. Let us use this debate tonight to come up with a plan to address some of these underlying competitiveness issues.