Bill C-253 (Historical)

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

This enactment amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to ensure that claims in respect of unfunded liabilities or solvency deficiencies of pension plans and claims relating to the cessation of an employer’s participation in group insurance plans are paid in priority in the event of bankruptcy proceedings.

Bankruptcy and Insolvency Act

[Marilène Gill, Bloc, Manicouagan, QC]

moved that Bill C-253, An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans), be read the second time and referred to a committee.

Madam Speaker, I am pleased to rise today in the House to speak to my bill, Bill C-253. I want to start by thanking my colleague from Thérèse-De Blainville for her invaluable support, both practical and symbolic, in the development and drafting of this bill.

I must admit I am experiencing some déjà vu. In 2017, during the previous Parliament, I introduced Bill C-372, which was very similar to the one we are debating today. The House was unfortunately dissolved before Bill C-372 could be put to a vote, but I hope to see this new version get passed.

For a bit of background, I will have to go back in time to talk about how Bill C-253 came to be. Cliffs Natural Resources, a wealthy U.S. multinational mining corporation, once had affiliates in my riding, in Sept-Îles and at Bloom Lake near Fermont. The company employed many of my constituents and people from Labrador, and it was part of the lives of many North Shore workers for many years.

In 2015, the company filed for creditor protection for its Sept-Îles and Bloom Lake affiliates under the Companies' Creditors Arrangement Act. After declaring bankruptcy for these affiliates, the company announced it was ending group insurance for its pensioners and slashing their retirement fund. By discontinuing contributions to the pension fund, Cliffs Natural Resources ran up a $30-million solvency deficit, which was taken from the workers.

Some 700 pensioners, people from my region and from my riding, lost their group insurance and nearly 25% of their pension fund in the Cliffs Natural Resources disaster, but that is not all. These people were forced into an extremely tenuous situation. They expected a peaceful, secure retirement but suddenly found themselves on the brink of ruin. They had no inkling that financial worries and trouble would come back to haunt them.

Fortunately, the Cliffs Natural Resources pensioners, or their widows or spouses, as the case may be, did receive compensation. It was thanks not to the House's legislative efforts but to the tenacity of the Cliffs pensioners' association and the support of United Steelworkers that they were partially compensated for the money that was stolen from them.

The purpose of Bill C-253 is to make sure we never see another tragedy like the ones that have happened in our community, or with other companies, such as White Birch, Mabe Canada and Sears Canada, or even like the ones that the COVID-19 crisis is causing right now.

Canadian law does not adequately protect workers' rights, so it is our duty to end this injustice as soon as possible before history repeats itself and the rights of workers and pensioners are once again trampled upon.

The Bloc Québécois has always been a voice for workers and defended their rights in the House. Bill C-253 reflects our commitments and our actions. Driven by a relentless sense of justice, the Bloc Québécois will never stop stepping up to protect the rights of workers and to prevent them from being cheated, particularly through such unfortunate bankruptcies.

The solution to the problem is perfectly simple. I would like to draw the attention of the House to two points that are the very pillars of my bill.

First, it is vitally important to recognize pensions for what they are: deferred wages, negotiated between the employer and employees through the union and recognized by both parties. Accordingly, pension plans must be considered preferred claims, and paying them out must be considered a priority. To stop the looting, companies must be forced to live up to their commitments to workers.

Second, pensioners must be compensated for the loss of their group insurance, which has obvious negative repercussions for them and their families. Going back to the example of Cliffs Natural Resources, the workers and pensioners were unfairly penalized for a bankruptcy for which they were in no way responsible. They were deprived of money they had worked for. It was their due.

The Liberal Party of Canada just held their convention. I was pleasantly surprised when the Liberals adopted a resolution recognizing that pensions are deferred wages. I hope they will also be pleased when they remember that this was in both Bill C-253 and its previous version, Bill C-372. Logically, the Liberals cannot deny that slashing pension plans during a company bankruptcy constitutes theft, so they will surely vote for Bill C-253.

Of course, Bill C-253 was drafted with the Cliffs pensioners and their spouses in mind. The bill reflects their life stories and the misfortunes they had to contend with.

I want to sincerely thank the Cliffs pensioners' association, which demonstrated ingenuity, empathy and tenacity in the face of the colossal problems that their former employer's bankruptcy caused for them. I want to give a huge thank you to Gordon, Cécile, Daniel, Rodrigue, the other Rodrigue, Serge, and also Nico, as well as all of the others I cannot name in the House, for their invaluable contributions. They know who they are. Their hard work served as the inspiration for this bill. They are proof that the voice and will of the people can be heard loud and clear in Parliament. This is their space, and I sincerely hope that their fight will inspire others, so that no one else has to go through what they did.

Before I conclude, I want to comment on another rather surprising action that the Liberal government has taken to amend the Companies' Creditors Arrangement Act.

At the beginning of the week, a private member's bill to amend the Companies' Creditors Arrangement Act in connection with the situation at Laurentian University was introduced by the member for Sudbury. That bill excludes post-secondary teaching institutions from the definition of company. I am confused. The government had an opportunity to significantly improve the legislation — I say an opportunity, but it has had several — but all it did was add a simple exception to make itself look good and restore its image after what happened at Laurentian University.

Bill C-253 goes much further and truly protects those who need protection for the long term, not the creditors, not businesses and even less so the government, but the workers and what they are planning to live on, the money to fund the retirement they have looked forward to their entire lives.

Bill C-253 proposes real change by amending the order of priority of companies' creditors. Bill C-253 ensures that workers will not be penalized if their former employer declares bankruptcy. It reassures those workers by promising that they will not lose their deferred wages, meaning their pension plans and group insurance.

We have seen hundreds of tragedies where workers have lost their money. Sears, Capital Media Group and Cliffs are just a few of the many examples, and I want to reiterate that the current pandemic is only going to result in more cases like these.

Urgent action must be taken to end these injustices once and for all and to protect our workers' nest eggs. I am asking my colleagues to pass this bill quickly so that other pensioners, who dream of a secure retirement, do not have their modest dream shattered. They worked hard for a comfortable retirement.

On behalf of the workers, pensioners and seniors for whom I am speaking today, I urge my colleagues to share my concerns about laws that do not provide proper long-term protection for our workers. We have a duty to act and make real, much-needed changes to bankruptcy laws in order to protect pension plans and group insurance.

Let us vote for our fellow citizens. Let us vote in favour of Bill C-253.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Madam Speaker, I would like to thank the member for her speech.

I had planned on introducing a similar bill, so I will be supporting this one. However, I do have an idea for an amendment.

I think it is good to have a priority to make sure that people get their pensions before creditors get anything. However, I think it would be even better if businesses had to have liquidity, and had to declare bankruptcy, at the point that they could not pay their pensions, so that we do not wait until after they are bankrupt for people to have to pay.

Would the member be open to this kind of an amendment?

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, I am very pleased to hear that my colleague wants to support the bill.

Of course, I hope that it will be referred to committee so that changes can be made, because everything can be improved.

That said, I am not familiar with the bill she was talking about. I just hope that it is not similar to Bill C-405, from the previous Parliament, which went against the intention of my bill.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the President of the Queen’s Privy Council for Canada and Minister of Intergovernmental Affairs and to the Leader of the Government in the House of Commons]

Madam Speaker, I am wondering if the member could indicate if she has any concerns in regard to how her bill could incentivize companies to actually liquidate over restructuring, which would ultimately cause some very serious issues in terms of defined benefit plans.

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, I thank my colleague for his question.

That is the argument we always hear. I therefore invite my colleague from Winnipeg North to read my bill, which on balance is absolutely reasonable.

My bill is a compromise between the desire to restructure corporations, because we want people to keep working, and a bailout, so that those who retire can also get what they are owed. As I said, pensions are deferred wages that belong to the workers.

I heard several arguments in favour of this bill. The member opposite could even look to members of the Liberal Party of Canada who specifically suggested what is in my bill.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, in 2015, the Liberal government promised the Canadian people that it would change and make sure that their pensions would be protected. In 2019, the Liberal government did make some amendments, but they seemed to be cosmetic.

Does the member agree with me that the changes the Liberals made did not do anything to protect the pensions under CCAA?

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, I thank my colleague, and I share his views on defending the rights of pensioners and workers.

In fact, I do believe it was cosmetic. We saw this in 2014 and 2019, and also in 2018.

I would like to remind the House that in 2018, when a review was being conducted, a committee was studying the Companies' Creditors Arrangement Act. It had to be revised. The Bloc Québécois was not involved, but all committee members from all parties of the House agreed that no amendment would be made to the Companies' Creditors Arrangement Act.

I naturally hope that concrete action is taken. My bill is one example of what can be done.

[Louise Charbonneau, Bloc, Trois-Rivières, QC]

Madam Speaker, I commend my colleague for her excellent speech. That is a great idea.

I would like to once again point out that seniors are the ones affected by these kinds of events. I would like my colleague to explain what happens with drug coverage and life insurance in such cases.

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, I want pensioners to be compensated when they lose their insurance. Most of them have experienced great hardship. When they needed medication or were fighting cancer, many of them found themselves penniless.

We need to find ways to let them keep their insurance or to be compensated for a certain amount of time.

By creating two classes of seniors, the Liberal government clearly showed us that seniors are not a Liberal priority. We are seeing that again with the promises they make to pensioners but never keep.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Before I recognize the next speaker, I would like to remind members who are participating virtually to mute their microphones unless they have the floor.

Resuming debate, the hon. parliamentary secretary to the government House leader.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the President of the Queen’s Privy Council for Canada and Minister of Intergovernmental Affairs and to the Leader of the Government in the House of Commons]

Madam Speaker, prior to debating the bill, I want to add comments. The member was just speaking about promises to seniors and the two classes of seniors. It is interesting whether it is the Bloc, New Democrats or even Conservatives, how they are being critical of us for fulfilling a campaign promise. It should not come—

[Carol Hughes, NDP, Assistant Deputy Speaker and Deputy Chair of Committees of the Whole]

Order. The member for Manicouagan on a point of order.

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, I just wanted to say that I think the member for Winnipeg North is off topic.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

As the member knows, there is some flexibility during speeches. The hon. parliamentary secretary is just starting his speech, and I am certain it will be relevant. Let us wait and see.

I remind the hon. parliamentary secretary to ensure that his speech is relevant.

Resuming debate. The hon. parliamentary secretary.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, let me digest that for about five seconds. That is ridiculous. I just finished commenting on something that the member just provided an answer to a question on the bill.

Let me get right to the point of the legislation itself. I asked the member a question on how Bill C-253, in its current format, would provide an incentive for companies to liquidate as opposed to restructuring. In response she suggested that I needed to read the bill. It is not a question of reading the bill as much as it understanding the potential consequence of the legislation. She has not been able to alleviate those concerns as she has indicated in her response to me that she is already somewhat aware of this.

Pensions do matter. Pensions are very important to Canadians. The Liberal Party talked about retirement plans at the last AGM. Retirement plans are a deferred future income. We need to be there for Canadians in a very real way. The Government of Canada has been there, dealing with and continuing to work on ways we can enhance pensions.

In fact, as was referred to earlier, I would remind the hon. member that the national government worked with different provincial and territorial governments to get increases to CPP, which will ensure that all workers contributing to CPP will have that much more when it comes time to retire.

We recognize how important pensions are. We also need to realize that pensions come in different forms. When I think of pensions, it would be wonderful if all pensions were funded pensions, that the money associated with those future expenditures would be put aside and protected so pensioners would have no issues whatsoever.

Unfortunately that is not the reality. That is not just within the private sector, but it is in the public sector as well. Often what we find is that employers, and governments, will create unfunded pension plans. Those pension plans are based on revenue or income. There can be hybrid pension plans. A good example of that is in fact the CPP.

There are many different forms of pensions out there. Personally, I like the hybrid version because I believe that is very workable, even though it is not necessarily the ideal.

When I look at the bill, the 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.

That is why I am a bit surprised. The Conservatives seem to want to support the legislation. I do not quite understand their arguments and will wait to hear from the Conservative members. Maybe they could address that specifically. Do they not have any fears with respect to companies that might, as a result, want to liquidate over restructuring? It is a very serious issue.

We recognize that after a lifetime of hard work, Canadians do deserve to have that peace of mind when it does come time for security. Many years ago, I can remember walking on a picket line out in Transcona. Today's industries have modified significantly, but there is still a lot of work that needs to be done. When I was walking this picket line in the early nineties, I was amazed to find that there are workers who have been working for over 30 years and they are getting $400 or $500 as a pension after that long commitment to a business. That is not rare, unfortunately.

We have seen significant improvements over the years, but it is important for all of us to do what we can to advocate because we all have a responsibility to ensure that people have that disposable income when it comes time for retirement. On that issue alone, I could speak extensively on why we have some programs, particularly in Manitoba, that will start off financial supports for seniors at age 55 and why some seniors at an older age require additional support. That will be for another day, but the bottom line is we do need to recognize that after a lifetime of hard work, there is a need to ensure peace of mind for Canadian workers. If I genuinely felt this legislation that was going to be achieving that, I would be far more open to supporting it, but I am not convinced of that now.

We are taking, I believe, as a government, a holistic approach, one that is based on evidence in terms of addressing retirement security for all Canadians. As a government, we have held national consultations, heard from pensioners, workers, lenders and companies on these very important issues. As I said, over the years, there has been CPP enhancement, working with different stakeholders, working in consultation with seniors, increases to the guaranteed income supplement and the budgetary announcement, most recently, in regard to 75 and over, in fulfillment of that election campaign.

We have taken these steps also to make insolvency proceedings fairer and more transparent. That ensures there is a higher likelihood of oversight over corporate behaviour; for example, by giving courts greater ability to review and claw back unreasonable executive pay that leads up to insolvency. Nothing really gets to the core of the problem and causes a great sense of frustration when workers feel that their pensions, and justifiably so, are being squandered or not being given enough attention, and yet there are huge bonuses going toward corporate greed. We have been taking steps. I appreciate my time is running out. We will continue to advocate for pensions for workers any time of the day.