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.

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, before us today is a bill the summary of which says it will give priority to unfunded liabilities and solvency deficiencies in pension plans during bankruptcy proceedings.

As a quick background, right now when a company goes bankrupt, its assets are typically liquidated and a court, a judge, will allocate the proceeds of that liquidation to creditors of all shapes and sizes. Some of them are bond holders, others are contractors with outstanding invoices, and others of course are employees with pension benefits that are deficient. They are not properly funded and therefore require injections of capital in order to make them whole.

These are ugly situations we have seen time and time again. They are particularly ugly because they tend to coincide with major drops in the stock market that reduce what is in a pension fund's assets, so we have a “when it rains, it pours” phenomenon. When companies typically go bankrupt, it is usually when the economy is doing badly. Therefore, the stock market drops and all the money in the pension fund that has been invested in the stock market drops with it. Therefore, the pension is under-capitalized and there is not enough money to pay out the beneficiaries.

What happens then is that the pension is given over to a guardian, usually a company like Morneau Shepell, for example, which just happens to be the case, and that company then converts it into an annuity, which pays out an annual salary to the pensioners that is inferior to what they had been promised in their defined benefit plan.

The problem with bankruptcies is that there are too many people who want what is too little money that is left over. What do we do about that? I will come to my view on that in a moment, but let me describe why this bill is important, especially today. Our corporations in Canada are now more indebted than ever before. Let me read a report from TD Economics, which states:

In fact, nonfinancial corporate debt is high also when compared to international peers. According to the Bank for International Settlements...Canada’s...debt-to-GDP ratio of 118.7 percent ranks third amongst G20 countries, trailing only China and France....

The report also says that debt payments are “close to historical highs” and “a higher share of corporate income is going to servicing debt”, even with today's low rates. What will happen when rates rise to historically normal levels? The answer is bankruptcies, because all this corporate debt, which is unsustainable today, will become doubly unsustainable when normal rates of interest are applied to it. Then those companies will go bankrupt and their workers will simultaneously see their pension fund depleted by dropping stock markets, and they will be left without the benefits they were promised.

The proposal from my hon. colleague is to see that in the case of bankruptcy, the pensions would be treated as currently unpaid wages are treated: That is to say, they are put at the front of the line, ahead of all the other creditors. The corporation would then liquidate its assets, and the first proceeds would go to make the pension whole. Only then would other lenders and creditors get a payout.

The counter-argument against this is that it would make it harder for companies to borrow money. After all, lenders would say that if they are behind the pensioners in the lineup in the event of a bankruptcy, then their risk level is higher. They stand to lose more and therefore will not lend the money. That is the thinking, and that is true, but the question I ask is whether that is entirely a bad incentive.

Should we not create a present-day incentive for CEOs to ensure that their pensions are not just well funded but rock-solid? If the pension is rock-solid, then lenders would have nothing to worry about in the event of a bankruptcy, because the pension would be able to stand on its own two feet. In other words, the proposal in this bill in principle could act as a present-day incentive for CEOs to put their pensions on a more solid ground lest they face penalty from lending markets.

Right now we have a perverse incentive. CEOs often underfund pension plans because in the present it causes them no problems. However, down the road, 15 or 20 years later, when they are long gone and have been paid all their bonuses and benefits, the pensions go under and it is not their problem anymore. We saw that with the bankruptcy of the automotive companies. For many years CEOs made promises to workers without any ability to keep those promises, and then taxpayers had to come in and clean up the mess of long-retired corporate management.

The benefit the bill might provide is that it would force companies to fund, and even overfund, their pensions in order to give confidence to lenders that, in the event of bankruptcy, their pensions would not consume more of the proceeds of bankruptcy. That kind of market incentive might be helpful in ensuring that present-day management gives our pensioners a solid ground and protects its financial viability against the worst unexpected events that could come down the road.

Let us imagine if a CEO said that instead of contributing the minimum amount to the pension fund to get by, he would contribute as much as it would take to make it foolproof against a massive recession, against a massive drop in the stock market and against even his company's own bankruptcy. That would be the ultimate benefit of a regime that incentivizes corporate management in the present to back up pensions in order to have the viability to raise money on debt markets.

I will not lie. There are certain challenges with the bill, and I think the member might even agree with that.

First, there are challenges of transition. Let us say a company today has committed some of its current assets in collateral to get loans. If we were to change the law all of a sudden, that collateral relationship, which is written into a contract, would be broken, and we would have a potential interruption of our financial system and some companies would end up in lawsuits with their present-day creditors.

Second, we would have to find a way to ensure there could still be collateralized arrangements. We do want our businesses to be able to point to their assets and say they are going to the markets to borrow some money against their assets to hire more workers, buy more machines and create more wealth here in Canada. However, what we need to do with the bill is ensure that it is crafted in a way that allows that to go on and, at the same time, incentivizes businesses to put their pensions on solid ground by ensuring that pensioners come at the front, rather than at the back, of the bus.

While I am not sure the bill has been perfectly crafted, and I do not know for sure if it could pass in its present form, I do think it is worth sending to committee for some study. What is clear is that if somebody works hard all their lives and their company goes bankrupt through no fault of their own, the pension on which they rely, and with which they were intending to pay for their housing, their food and even their long-term care, should not be stripped away from them. Businesses, within the context of the free-market system, should be incentivized to make today's decisions for tomorrow's pension security.

The principles in the bill may allow that to happen. Therefore, on behalf of Her Majesty's loyal opposition, I am here to announce that we will support sending the bill to committee at second reading.

We pledge to work with the hon. member to improve this bill and take her concerns into account in order to respect the principle of the bill while protecting the financial system, which includes all investments in our businesses.

We will be supporting the bill to send it to committee in order to advance the cause of pension security, and we will look to amend any problems so that we protect the financial system that is the lifeblood of jobs, while protecting the pensions that are the reward of a lifetime's hard work.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, I rise in the chamber as the NDP critic for pensions on what I believe is one of the most important matters in the pension portfolio before us today. The subject matter of the private member's bill, Bill C-253, regards protections of the employer-sponsored pensions for workers in the case where the employer is undergoing bankruptcy proceedings.

I would like to sincerely thank my Bloc colleague for using her spot in the priority list of Private Members' Business to bring forward these measures. As she knows, 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.

What I would like to talk about in the short amount of time I have is: first, the importance of pensions and the types of pensions we are talking about; second, the current situations by way of the acts of Parliament and some real accounts of the problem at hand when companies go bankrupt; and third, what Bill C-253 does and does not do.

My speech today will be as much for those at home as it is for those present in the chamber. It is important for all Canadians to know clearly what is at stake here in simple terms so they can ensure that their MP is doing the right thing when they cast their vote on this.

Pensions have become so commonplace in society that some may take their existence for granted. While the administration and accounting of the pension plans by those who manage them may be complicated, the concept is pretty simple and makes their importance clear.

During our working years, we put money away in regular amounts so that we can draw on that fund of money in our retirement years in order to live. Canada's government, like many other governments, has a segment of our pension sector which is socialized. For those of us who are fortunate enough to have contributed to the workforce, we pay into the Canada retirement income system that is made up of, among other things, the old age security, the guaranteed income supplement, the Canada pension plan and in Quebec, the Quebec pension plan.

While I go on about the importance of these retirement incomes and the necessity for their reform, this is not the matter of Bill C-253. The bill instead touches on what I call employer-sponsored pensions. Employer-sponsored pensions are those whereby in an agreement there exists an employer's obligation with respect to a pension plan that it sponsors for its employees. The employer agrees to deduct from their wages an agreed amount to remit to the pension plan fund and agrees to also remit an amount of its own, oftentimes equal to the employee's contributions.

This brings me to talk about the defined benefit pension plan versus defined contribution pension plan and it is important that we distinguish these in order to talk about Bill C-253.

With a defined contribution pension plan, the amount of income we receive is not set but rather depends on how much we happen to contribute and in fact, can drastically be reduced depending on how the investments in that fund were managed by the employer.

On the other hand, with the defined benefit pension plan, the amount of income we receive is set and the administrator of the fund is compelled to be responsible in investing our money. In this type of pension, there could be a pension deficit. This is considered unfunded liability.

We can discuss the problem that Bill C-253 proposes to fix, the situation where an employer is facing bankruptcy and who has obligations under an arrangement to provide an employer-sponsored pension plan. The bill proposes to change the existing laws that deal with such a situation. The Bankruptcy and Insolvency Act, BIA, covers the treatment of a bankrupt employer's obligations with respect to a pension plan and its sponsoring for its employees. The Companies' Creditors Arrangement Act, CCAA, provides a restructuring framework for insolvent companies. The BIA and CCAA provide for priority for the employer to pay both. The employer's contribution is deducted at source, but not remitted to the pension plan fund and employees' contributions owed, but are not remitted to the pension plan fund. In fact, under these laws, a court is disallowed from approving a proposal or plan unless these two are paid.

Here comes the problem. Unfunded liabilities like pension deficits in the case of defined benefit plans that are accrued and due to the pension plan's fund on the date of the bankruptcy come after secured creditors. This means that banks, investors and parent companies would be paid before the shortfalls in the pension plan are covered.

Pensions and benefits earned by workers are deferred wages, plain and simple. Denying workers what they have earned should be illegal, yet under these laws, corporations are allowed to take money meant for workers' pensions and divert them to pay off their secured creditors, like banks. Bill C-253 would stop this practice.

In recent years, workers have suffered significant losses to their pension plans in insolvency proceedings under the CCAA.

For example, Sears Canada initiated proceedings June 2017. The pension plan deficit was $206 million, with an expected recovery of only 8% to 10%, and would leave $200 million unrecovered.

Co-op Atlantic initiated proceedings in June 2015. The pension plan deficit was $63 million and only $7.7 million was recovered, leaving $54.3 million unrecovered.

Wabush Mines initiated proceedings in May 2015 and of the $55 million of the pension plan deficit, only $18 million was recovered, leaving $370 million unrecovered.

Nortel Networks Corporation, which we all know very well, initiated proceedings in January 2009 and of the $1.84 billion of the pension plan deficit, only a little over half was recovered, leaving $841million unrecovered.

For those who follow legislation closely, I would like to state, technically, what Bill C-253 would achieve if passed: it will amend the BIA to prohibit a court from approving an employer's proposal for bankruptcy if there are any unfunded liabilities or solvency deficiency in the associated pension plan of workers; it will require that any unfunded liability within the pension plan be paid in order for a court to approve an employer's bankruptcy plan and given them “super priority” status; it will amend the CCAA to require that an insolvent corporation entering into a “compromise”, which reprioritizes the payment of certain debts and liabilities over others, must pay unpaid amounts of any severance pay or compensation in lieu of notice.

There are some protections that Bill C-253 would not provide, and I would like to cover these.

My bill, Bill C-259, includes a provision that would prevent a judge, during a proceeding under the CCAA, from suspending benefits to employees or pensioners during the course of the proceedings. I think this is important and fair.

Another thing that Bill C-253 would not do is something new that I added to my version of the bill in this Parliament. It proposes to change the Pension Benefits Standards Act to allow the Superintendent of Financial Institutions to determine that the funding of a pension plan is underfunded and can order measures to be taken by the employer in order to correct the impairment.

I want to pass on some reflections on some commentary and quotes from the recent past on measures of these bills. For example:

I like the fact that the word “pension” means deferred income. When we go to work, work an eight-hour day or however many hours we put in, a great deal of consideration is given to the benefits that go beyond that hourly, weekly or monthly rate paid to us. A pension is a deferred income.

Who said that? It was the Parliamentary Secretary of the Leader of the Government in the House of Commons, the member for Winnipeg North.

The Liberals campaigned on a promise to improve the income retirement security for all Canadian seniors. It is time for the government to put a stop to this organized theft.

I encourage Canadians watching to call their members of Parliament and ask them to vote in favour of Bill C-253 at second reading and help start the process of ending pension theft by large corporations.

We can also talk about Laurentian University, which is going through the same problem right now. This is devastating. The whole process is being abused and it must be fixed. People's lives are going to be turned upside down on this one. The government must step in and change legislation.

I thank hon. members for their time, and I hope the bill will be given the important consideration that it warrants. I recommend to everybody to send Bill C-253 to committee.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, I want to remind the House of a historic moment. On May 20, 2016, during oral question period in the House of Commons, my dear Bloc Québécois colleague, the member for Manicouagan, asked the federal government if it would ensure that retirees are considered preferred creditors when companies go bankrupt.

The member asked this question after great misfortune struck the workers and pensioners of Cliffs Natural Resources. On January 27, 2015, the company announced that the affiliate operating its Bloom Lake facility on the North Shore had filed for protection under the Companies' Creditors Arrangement Act.

Since asking the federal government that question, my colleague has continued to work on this file, and I commend her for that. Her bill, which we are debating today, is so important.

Even so, the federal government has been sitting on this issue for around five years, all while companies like Cliffs, Sears, White Birch Paper and Groupe Capitales Médias went through restructuring. Anger is brewing among these companies' workers and pensioners, who feel like shareholders and senior executives walked away with their pension funds. It is a sad situation.

This has been going on for a long time. Conservatives and Liberals alike across several Parliaments propose bills, but the federal government never passes legislation and never protects pensions for workers and pensioners. The profits of executives and shareholders always come first.

I am sure that the vast majority of members in the House of Commons agree with the principle of protecting workers' pensions and the absolute need to end this injustice. Yes, I am calling it an injustice. Not protecting the pensions of workers and pensioners is nothing short of abetting an injustice in plain sight.

We need to put an end to this injustice with Bill C-253. We have to prevent other tragedies. Pensioners are in no position to go earn extra income. They are counting on a pension they paid into for their entire lives to ensure a certain quality of life. Since this is an injustice, we must stand together in solidarity and put mechanisms in place to protect them.

Canada is one of the most irresponsible countries in the world when it comes to protecting the pensions of workers and pensioners. This needs to change. The members of the House must seize this opportunity and pass Bill C-253. As MPs, we have a duty to fix the situation and amend the legislation to protect the pensions of workers and pensioners.

We need to do this for workers, pensioners and seniors, of course, but also for younger people who may not have access to the same social safety net. Unfortunately, things are not changing, and these tragedies will keep happening again and again in this globalized financial and industrial world. This world is going through a radical digital transformation, with more and more companies going through restructuring and the biggest, strongest players still crushing the smallest and weakest. It is the law of the market, the very essence of capitalism.

That is why we need to ensure that pension funds are bailed out and retirees' pensions are paid out in full. That is why we need to protect group insurance. That is why we need to take action to fix the situation and correct this injustice. If the responsibility is shared among everyone, it will be easier to bear.

We currently have two bankruptcy acts, one for businesses and one for individuals: the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act. These acts do not adequately protect workers' and retirees' pensions. Actually, they do not protect them at all. They do not protect group insurance either.

Currently, the law does not say anything about workers' group insurance. It is hard to see workers' and retirees' group insurance as a debt under the current regime if nobody tries to claim an amount to compensate pensioners for this loss.

The status quo is not an option for retired workers who have lost a significant chunk of their pension fund and their group insurance. Their rights were violated, and their anger must be appeased. This is a matter of dignity. I cannot imagine how angry a person would be if their hard-earned money were stolen. Injustice causes anger, and these retired workers feel that their days, their work, their creativity, their skill, their dedication and their trust were stolen from them. Their happiness and dignity were stolen from them.

Pensions are a major source of income for seniors. That financial flexibility completely changes the situation. It means more financial security and less stress for seniors in a world where everything seems to move so fast and, sometimes, in the wrong direction. This financial flexibility is essential to everyday life to pay for food, transportation, personal items, clothing, rent and fixed expenses.

This week, in the context of the budget, we spoke about the vulnerability of seniors. The budget does not solve everything. I recognize that there is something in the budget for seniors, but only for those 75 and over. Why create two classes of seniors? Why create unfairness? This bill also reminds us that not everyone has access to the same type of retirement. Perhaps the government should have been more generous to seniors in the budget by giving them additional ongoing assistance of $110 per month as of age 65. That would have helped them increase that financial flexibility that is so essential to their dignity and to the much-deserved pleasure of living the last years of their lives to the fullest after all their hard work.

What would Bill C-253 do? It would ensure fairer treatment for retired workers while maintaining fair treatment for creditors. It would amend the existing Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act such that, in the case of bankruptcy or restructuring, other creditors will not get access to what should be the workers' pension fund.

If the House of Commons passes this bill, there will finally be a law protecting workers and pensioners so they will never again lose their pension, which they earned by dint of hard work and dedication, sometimes at the cost of their physical and mental health. That last point is worth emphasizing.

The Bloc Québécois is obviously in favour of this bill, since it was introduced by one of our own. It is nearly identical to Bill C-372, which was introduced by the member for Manicouagan in 2016. This bill is the culmination of consultations with the people of the North Shore and with businesses and organizations in Quebec. The Bloc Québécois recognizes that a pension plan is a form of deferred wages and that it can help pensioners deal with the financial blow they are dealt when a former employer files for bankruptcy.

The bill would protect retired workers' group insurance plans, compel businesses to better fund their pension plans and enable the Standing Committee on Industry, Science and Technology to study this important social issue.

I want to acknowledge the chair and co-chair of the committee. The co-chair just spoke on behalf of the Conservatives. This is an issue we must consider very carefully and diligently. I serve with some amazing colleagues on this committee and the clerk and analysts do excellent work, so I know that the study called for in Bill C-253 will be both thorough and meaningful and that it will help resolve any impasses on this issue. The committee will have to find the time in our busy schedules to conduct this study.

The Bloc Québécois supports Bill C-253 because it is a reasonable improvement that will help achieve the goal of protecting the pensions and group insurance of employees and pensioners. It will also improve the quality of life of our seniors, who, I should point out, are the most vulnerable members of the population.

Let us also not forget that pensioners use their pensions to spend hundreds and hundreds of millions of dollars in the businesses located in the towns and villages of our regions, and are therefore at the very heart of the Quebec economy. Bill C-253 is a step in the right direction and must pass.

As a final point, I would like to mention that I used to sit on the board of directors of the Quebec pension plan. I will therefore be very pleased to dive back into the issues surrounding the dignity of employees and people's quality of life.

I invite our colleagues to support this bill, and I truly hope they do.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

As we resume debate, I will remind the hon. member that there are only three minutes now for debate and he will be able to continue his speech thereafter.

The hon. member for Kingston and the Islands.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, it is the second time today that this has happened, but it is fine. I look forward to continuing later on.

This is a very important bill, and I am really glad to see that this topic has been brought forward. Shortly after I was elected in 2015, I had the opportunity to meet with a number of executives from my riding, who were former executives of a DuPont plant in my riding, which is now Invista. They included former chief executive officer Peter Krause. He was leading the charge with this group of executives. What is really interesting is that they were not coming forward because they stood to gain from legislation like this, but because they were fighting on behalf of their friends, colleagues and people they came to know as family members. They were worried about Invista being owned by a multinational corporation and what that meant for their friends, the people they had worked with for 30 or 40 years.

They were looking specifically for what is in this legislation. Those executives were talking about the need to give superpriority to pension funds. I recall vividly having a number of conversations with them about it. I think I even had them come to Parliament Hill, and we had a meeting with a number of other MPs at the time and talked about it.

Before I get into some of the details on this, I must admit that, even though the government might not be voting in favour of the bill, I am very tempted personally to vote in favour of it. I cannot speak on behalf of the entire Liberal caucus, as the member for Carleton did earlier for the Conservatives, but I would be interested in hearing about what the committee could produce if they studied this and what recommendations they could give to secure pensions for so many people who are, quite frankly, worried. The reality of the situation is that we had a structure in place that did not allow people to contribute through RRSPs, or that significantly reduced this, because they were contributing through their employer into a pension. Now they are worried about how long their pensions will be around.

I am looking forward to continuing to talk about the legislation when it comes back around, but I will say that I am very much interested in it. At this stage, I can say that I think it is worthy of committee study.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

The time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the Order Paper.

It being 2:30 p.m., the House stands adjourned until Monday at 11 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 2:30 p.m.)

The House resumed April 23 consideration of the motion 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.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Madam Speaker, I am pleased to put some thoughts on the record today regarding Bill C-253. This bill would put pension plans in priority to secured creditors in the event of bankruptcy proceedings.

Prior to my life in politics, I practised commercial law for over 20 years as a partner in a downtown Winnipeg law firm. Much of my practice involved doing commercial loan securitization for financial institutions. For the most part, it was my job to ensure that proper legal documentation was in place to ensure a first charge against the assets of the borrower on behalf of the lender. A first charge was always essential to the security requirements of the lender.

The concept of a secured creditor having a first charge is also fundamental to the functioning of our economic system. Without that guarantee, lenders would be far more reluctant to make loans and would view this as a major risk in their security position. Many businesses require debt financing to function, do business, provide jobs for their communities and hire employees.

When I saw this bill, my first concern was what would financial institutions do if this law was changed, in other words, if pension funds had priority over the secured position of lending institutions. How would it affect existing indebtedness? In other words, that would be loans that have already been made predicated on a first charge against the borrower's assets.

I suspect many financial institutions would be very concerned and we could see some instances where they might say that if pensions were to come first, they could no longer take the risk and call in their loan. This is a likely outcome of this legislation as it is currently presented and could pose a serious threat to businesses that fall under federal jurisdiction for pensions and result in challenges for them. In other words, the bill could have the exact opposite effect from what it intends. It could force businesses to close if the lenders see this as an increase in the risk profile, an unacceptable risk, jeopardizing pension plans and pensioners.

On the other hand, one could also argue that this law would incentivize banks for new loans to insist that pension funds were secured and in solid shape by the company before they would agree to make a loan. The problem with this approach is that in the case of defined benefit plans, if there is a precipitous drop in the value of the assets of the fund or of the company after the loans are made, then it may still be difficult for the company to pay back the bank if it must first satisfy the pension plan. This could create a drive toward conversion of many plans to a defined contribution model.

Another problem can occur where a company is failing and needs to restructure its debt but cannot find a lender to take on the additional risk if it is forced to subordinate to pension obligations.

It is clear there are serious issues with any bill that has, as its goal, a fundamental shift in security prioritization away from lending institutions. However, as a society, we must also recognize the importance of labour. I can see the argument being made of why a bank should have priority over people who have worked their entire lives for the company. It is not the fault of those workers that the company went bankrupt and so their pensions should be protected. It is here that we have a conundrum. If lenders cannot be first, they may not lend. If they do not lend, there may not be a job. If pensioners do not receive their pensions in the event of a corporate bankruptcy, workers might not work and, again, there may not be a job.

This is a difficult predicament and as I was writing this speech, it made me think of the biblical tale of King Solomon’s baby. In that tale, two women claimed to be the mother of the child. To settle the dispute, Solomon decreed that the child be cut in two, upon which the true mother revealed herself by insisting the baby be given to the other woman to save its life.

I do not have any such Solomonesque wisdom in the case of pensions, banks and public companies, but I do think this bill, as it is presently constituted, could result in the end of some companies for lack of willing bank capitalization.

What this debate does make clear is that we must find a better way to support businesses and their employees, and I think we would be hard pressed to find anyone who disagrees with this idea. When bankruptcies occur, far too often there is a long list of creditors and individuals who need to be made whole and there is unfortunately not enough money to go around in many instances.

We also must consider the effects on the supply chain of a company that is unable to restructure its debt. What happens to the employees that work for the suppliers? There are all kinds of small business suppliers that could be shut out in the event of a bankruptcy.

A working paper by the OECD regarding priority creditor rights for pension funds discusses this issue. One of the arguments against measures like what Bill C-253 proposes is that, if this were allowed, a range of social issues could come forward claiming priority rights, such as health benefits or environmental claims to name a couple. Would these be prioritized over pensions? How would we decide that?

The OECD working paper makes also makes a strong case against changing the position of pension claims within the creditor rankings. This argument centres upon the fact that, aside from the complications of changing bankruptcy legislation, doing so may be harmful to capital markets and damaging to the investment climate.

If pension funds are given superpriority status, other creditors, who may be small trades and personal creditors, would be bumped down the line, increasing their credit risk. These suppliers may also be hesitant to provide their services in a pension superpriority environment. Also, lenders, given the additional risk, could in turn pass this risk on to businesses in the form of more expensive interest rates and capital. As well, the marketplace could be adversely impacted with increased bad debts and potential failures. This could result in less confidence in our financial markets. It could also make Canadian businesses less competitive vis-à-vis foreign jurisdictions that do not have such a law.

It could also be argued that any change in the ranking of pension obligations would have a negative impact on credit cost and availability. One alternative to help address the issue might instead be to make it illegal for shareholders to strip a company of its cash in the form of dividends when there is a pension shortfall. If we look at what happened with Sears Canada, it is an example of where this type of change would have benefited pensioners.

Its majority shareholder, an American hedge fund, took out billions in cash from the company. In 2005, the hedge fund took out $1.5 billion. In 2010, it took out $750 million, and in 2012, it took out $100 million. However, in 2007 there was already a pension shortfall of $36 million and that shortfall continued to widen, reaching $267 million by 2015. There would have been more than enough cash available to Sears Canada to cover its $36-million pension shortfall in 2007, and any other future shortfall, if cash were not being withdrawn from the company at a challenging time, so rules to prohibit dividend stripping when a pension is in a shortfall could be beneficial by allowing a company access to more cash to cover its losses. As a result, that could serve as an effective tool.

Another option could be pension plan insurance, which companies would pay into in the event a pension is unfunded and a company faces insolvency.

There are different alternatives to solving the problem this bill proposes to address. I believe at committee there will be more alternatives discussed. There we will have a chance to have a full discussion of the benefits and pitfalls to be brought forward and addressed by hearing from witnesses, such as workers, employers, academics, financial institutions and others. I think as we work toward a solution on this issue, we must remain focused on ensuring there is a balanced approach.

The security of pension plans for workers must remain top of mind, but we must also avoid measures that could discourage investors and lenders from trying to save a company in despair. King Solomon would expect nothing less of us.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, I am pleased to rise today to speak to a bill that we in the NDP think is long overdue. Of course, one of my colleagues from Hamilton presented a similar bill in the last Parliament to finally address pension obligations and the benefits that workers expect to receive when they pay into a pension plan over the course of their working life. They deserve their due.

It is one thing for members to talk about hypothetical situations, such as what this might mean for bank lending practices or what it might mean for creditors of various kinds. However, what is not hypothetical is that right now, when a company does go bankrupt, the pensions that workers have paid into for their entire working lives are not given the respect and priority they are due. What is not hypothetical is that real working people are losing out on the retirement that they paid into and saved for through a company pension. That is wrong. What is not hypothetical is that right now, when there is a bankruptcy proceeding, the very real investment on the part of the worker is not given the same due as the investment made by international hedge funds that expect to get their money back.

Frankly, we can work out the details, and the market will adjust to a new framework. We hear in other instances of the incredible faith, on the part of the Conservatives and Liberals alike, in the power of the market to adjust to new circumstances. Our argument is that there is a moral imperative here to ensure that people who have their entire future, their entire retirement, wrapped up in the future of a company and its plans get what they are owed. Of course, in some cases they may not be able to get everything they are owed because there is simply not enough money. However, they should not be last in the pecking order. They should not be waiting for the scraps off the table of international investors. They should be given their due alongside investors and lenders to ensure that their lives are not ruined.

We understand very well that lending institutions have to assess risk when they offer loans and that it has to be worked into a business plan. However, our current practice says that when businesses are making those business plans and lenders are assessing that risk, they can literally bank on being able to take away the pension contributions of workers. There is something fundamentally wrong with the idea of them knowing from the outset, whether it is a company, lender or investor, that they can take it to the bank, and that workers who currently work at a company and, in good faith, pay into a pension plan will get screwed in the event of a bankruptcy so that those investors or lenders can get paid out. Workers do not have an equal say at the table. That is what companies are allowed right now. It is wrong, and it is not a hypothetical situation. It is a real injustice that is taking place right now.

The role of government, if nothing else, is to set a fairer framework and a fairer set of rules for the economy to work under. Then it is up to players within the market to adapt to those rules. The NDP thinks it is of fundamental importance that we recognize the status of workers and their retirement funds and ensure that they have to be part of the business plan of a business and part of the business plan of lenders and investors so that they pay workers their due.

It is frustrating to have to keep talking about this, particularly in light of an election commitment by the Liberal Party, which is running the government right now. The Liberals keep saying they respect workers, that this is very important and that they are going to get to it, but they never really get around to it. However, we see proposal after proposal being brought forward by private members in order to fix this fundamental unfairness. The sooner we fix it, the sooner the markets can adjust to the new reality, and it is an adjustment that needs to come.

Workers need to know that they can pay into a pension plan and have it be there for them, and that they are not always going to be playing second fiddle to investors and others, as was the case in the example of Sears raised earlier. It is not hypothetical that the Sears pensioners lost a massive amount of their pension: It is true. They lost it at the point of bankruptcy, and a whole bunch of that money went to Sears' creditors. They lost it before, too, in terms of investors coming in and stripping the business of all its cash, and the company not making the payments it ought to have made into the pension fund.

There is a large issue around pensions. There are other issues and injustices with respect to how the system is set up that prejudices itself against workers and their pensions, which ought to be addressed. That is not an excuse not to move forward with a perfectly good proposal that would change the situation. It would, and actors within the market would have to adjust to that. That is the point.

The point is that the situation needs to change, because right now there is a serious wrong being done to workers who deserve an equal seat at the table, just as when Nortel went into bankruptcy and workers lost over half of their pension earnings.

These are the kinds of things that we need to do if we want to talk about the larger issue of pension reform. Employers should be making their regular contributions to company pension funds. We often see that employers are allowed to take vacations on contributions to their pension funds when things are going well, but of course the plan for pension funds is that contributions are made in poor years and in good years, and that the contributions made in the good years help put enough capital in the fund for it to ride out the bad years. When employers are allowed to take vacations on that, we sometimes see the accumulation of really extraordinary pension fund deficits.

Other arguments are trotted out about how pension funds are not sustainable and employers would have to contribute totally unrealistic amounts to the pension funds in order to keep them going. That is because in good years, instead of continuing to contribute to the funds, in some cases employers are allowed to not contribute anything at all. That is certainly a problem.

Many Conservative members in the House refer to the Canada pension plan as a simple payroll tax, which I think is a serious deception. It is something that employees and employers pay into as part of their wage package, in order to provide further retirement security once employees' working years are done.

When it was set up, the CPP was meant to be a third of a person's pension income. Their company pension would provide another third, and their personal savings would provide the final third. Frankly, we are talking about how to better protect company pensions for those who are fortunate enough to still have them. The fact is that many companies have been divesting themselves of pension risk altogether and are not providing real pension plans, certainly not defined pension plans. Something like 7 in 10 workers in Canada today do not have a pension at all.

We have not seen the Canada pension plan really pick up the slack in the way that it needs to in order to make sure that everybody could be contributing towards a defined benefit that would provide the cornerstone of their retirement income. Even now when we see a proposal from the government to raise the old age security amount, it is doing it in a way that, again, is unhelpful, by creating two classes of seniors rather than offering the same increase to all seniors 65 years old and older. The government is only offering it to seniors aged 75 and up, when we know that the very same income and cost pressures are there for seniors regardless of whether they are 75 or older, or 65 or older.

This piece of legislation is very important. It is important from a moral point of view. It is important from an economic point of view: There are advantages to protecting the incomes of seniors in our local communities who spend that money in our communities. Let us absolutely make it part of a larger package of reform to better protect and strengthen the pensions of Canadians from coast to coast to coast.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Resuming debate. The hon. member for Saint-Hyacinthe—Bagot.

There seems to be a technical problem, but it will be fixed fairly quickly. I would like to remind all speakers to be well prepared before speaking.

The hon. member for Saint-Hyacinthe—Bagot.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I apologize for the hiccup. I hope I will be forgiven, as it is my birthday today.

I am pleased to participate virtually in the debate surrounding Bill C-253, proposed by the hon. member for Manicouagan, of the Bloc Québécois. The purpose of this bill is to amend the Companies' Creditors Arrangement Act and the Bankruptcy and Insolvency Act. Bill C-253 is the logical continuation of Bill C-372 that the hon. member for Manicouagan introduced in 2016, during the previous Parliament.

At the time, this bill was only debated for an hour before it died on the Order Paper because the Liberal government did nothing. The purpose of the bill was to prevent other retirees from unfairly losing their pension funds that they have worked all their lives for, which is what happened to the workers at Cliffs Natural Resources.

Let us set the scene for a moment. In 2015, this U.S. company wants to place its two Canadian subsidiaries under the protection of the Companies' Creditors Arrangement Act. Meanwhile, Cliffs Natural Resources announces plans to restructure its activities with a view to shutting down its operations in eastern Canada. However, the restructuring had quite dire consequences, not only for existing employees, but also for pensioners, who lost much of their pension fund and group insurance.

That tragic situation was the impetus for the bill, which was intended to make legislative fixes, which my colleague will be much better able to confirm since I was not yet in the House at the time. Had Bill C-372 become law when the events had taken place a year earlier, the Cliffs Natural Resources pensioners would certainly have been given a bigger piece of the pie, namely the claim that was owed to them.

By proposing to amend the Companies' Creditors Arrangement Act and the Bankruptcy and Insolvency Act, I think that we are calling today for legislation that will ensure fairer treatment for retired workers while maintaining fair treatment for creditors.

The purpose of the bill is therefore to prevent other creditors from getting access to what, in the end, amounts to the workers' life savings in the case of bankruptcy or restructuring. That seems logical. Since seniors are more financially vulnerable than other demographics, today, we would like this bill to fill a gap that has been created by the Liberals' silence on the matter by providing proper, fair and equitable legal protection centred on two main initiatives.

First, before the court approves a business's proposal for bankruptcy or restructuring, it must account for the total amount of special payments, as well as the amount needed for the liquidation of unfunded liabilities or solvency deficiencies of pension plans.

In plain language, the company's proposal must provide for a pension fund bailout if the court is convinced the company is capable of doing that. This rule would protect workers' pensions from being cut off, and we think it is crucial to protecting workers' savings.

Second, a reread of the Bankruptcy and Insolvency Act reveals six categories of creditors: first, creditors whose claims are deemed to be held in trust; second, unpaid suppliers; third, super-priority creditors; fourth, secured creditors; fifth, preferred creditors; and sixth, ordinary, unsecured creditors.

Bill C-253, which we are arguing in favour of today, would add other payments and indemnifications to these six categories of creditors. For example, special payments would get preferred claim status. The same goes for indemnification for beneficiaries of group insurance plans in which the company participated as an employer. The total amount of special payments, as well as any amount required to liquidate unfunded liabilities or solvency deficiencies, would also be secured claims against the bankrupt's assets as of the date of bankruptcy.

In keeping with our principles and our values, my Bloc Québécois colleagues and I support this bill, which has been introduced for the second time by my colleague from Manicouagan, and we support it for many reasons. First, the bill will recognize that a pension plan is a form of deferred wages, and second, it will cushion the financial blow to pensioners when their former employer declares bankruptcy. I was just talking about that a moment ago. With our bill, bankrupt companies or ones that are restructuring their operations will have to provide the total amount of any special payments and the total amount needed to liquidate their unfunded liabilities or solvency deficits in the pension plan fund. In this same spirit, this bill is beneficial because it will protect retired workers' group insurance plans. It will also compel businesses to better fund their pension plans. Finally, it will enable the Standing Committee on Industry, Science and Technology to study this important social issue. That will surely please my Bloc Québécois colleague who sits on that committee, as well as all other members of the committee.

In closing, dear colleagues, if passed, our proposed Bill C-253 would protect workers and retirees so that they would never again lose the pensions that they earned after a lifetime of hard work. We find such injustices unacceptable. It is our moral duty to defend and respect active workers and retirees who, generation after generation, have slowly forged and are still forging the way of life we are fortunate to cherish today.

Ottawa's wait-and-see attitude and inaction have gone on long enough, and while this is the position that requires the least effort, it remains the least honourable. If we do nothing, history will judge our politicians by the way we let down the citizens, who spend more time looking backward than forward.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Madam Speaker, I am happy to join my colleagues in the debate over Bill C-253, as we consider the important issues of protecting the retirement security of Canadian employees and pensioners when an employer faces insolvency.

Our government recognizes that all Canadians deserve peace of mind when it comes to their retirement security. We have taken several major steps to strengthen all aspects of Canada's retirement income system, including enhancements to old age security and the Canada pension plan. At the same time, corporate insolvencies create a challenge for workplace pension plans, as well as for the economic security for employees who may have unpaid wages and benefits. Bill C-253, while well intentioned, takes a flawed approach to these issues.

By contrast, our government has taken important and practical steps to enhance the retirement security of all Canadians and better protect the interests of Canadian employees and pensioners in cases of employer insolvency. First, in 2019, the government made changes to insolvency corporate and pension laws to strengthen the protection for workplace pensions, taking a whole-of-government, evidence-based approach. These changes were based on feedback from national consultations with labour and pensioner groups, company lenders, experts and the public at large.

After listening to Canadians, our government enacted a comprehensive package to enhance retirement security via budget 2019, which strengthened security for pensioners and workers, but also built on the internationally recognized successes of Canada's marketplace framework laws. The changes made to our insolvency laws have made corporate restructuring fair, more transparent and more accessible for pensioners and workers. Participants in insolvency proceedings are now required to act in good faith. As well, corporate directors will have to think twice before approving excessive payments to executives at the expense of pensions or benefit plans in the lead-up to a firm's insolvency, as courts will have more powers to review these payments and find directors liable where appropriate.

In proceedings under the Companies' Creditors Arrangement Act, courts have been given greater power to order the disclosure of economic interests to enhance fairness and transparency in insolvency negotiations. The relief that a large corporation can seek on the first day of a CCAA restructuring is also now limited to what is absolutely necessary to avoid immediate liquidation. This means that pensioners and employees will have greater opportunities to participate in restructuring proceedings and make representations to the court before decisions are made on issues such as changes to employee group insurance benefit plans or pension contributions during the restructuring.

In our consultations, Canadians told us that a proactive approach to retirement security is the best and most sustainable approach. We received that message loud and clear, and that is why the government also amended federal corporate law to allow for more market oversight of corporate decision-making and worked to better align corporate incentives with the interests of workers and pensioners. Moreover, we have taken measures to restrain unreasonable executive compensation by requiring federally incorporated publicly traded corporations to hold advisory shareholder votes. Taken together, these measures will further regulate corporate behaviour and instill market discipline and oversight on corporate decision-makers.

Finally, our actions in budget 2019 also improved federally regulated pension plans by clarifying that if a pension plan is terminated, it must still provide the same benefits as when it was ongoing. Moreover, federal pension plans are permitted to transfer the responsibility to provide pensions to a regulated life insurance company to better protect pensions and pensioners from the risk of employer insolvency. In addition, our government has taken strong actions to directly support workers impacted by employer insolvency. The wage earner protection program provides financial assistance to Canadian workers who have lost their jobs and are owed wages, including termination and severance by their insolvent employer.

Since 2008, the program has paid more than $337 million in wages to nearly 129,000 Canadian workers. In 2018, this government increased the amount available to workers from four to seven weeks of insurable earnings.

In budget 2021, the government committed to further strengthening the program by eliminating a 6.82% deduction that was previously in place. Quite simply, these reforms will put more money in the pockets of Canadians who have lost their jobs and are owed wages by their employers.

The best way to protect economic and pension security is by preventing employer insolvency in the first place. This is an incredible challenge in the context of the COVID-19 pandemic, which has been so hard for so many of our businesses from coast to coast to coast. That is why an essential part of Canada's fight against COVID has been unprecedented federal financial supports for Canadians and Canadian businesses, which have helped keep insolvency levels down.

While the other side has dismissed these programs and the timely support they offer to Canadian families, businesses and workers, we made a promise to Canadians to have their backs through this pandemic for as long as it takes. In budget 2021, our government committed to extending these support measures as long as the fight against this virus requires it. The actions I just described will create better outcomes for pensioners and workers affected by the insolvency of their employer.

In contrast, Bill C-253 is coming from a good place, in terms of its intention of helping pensioners, but it takes a misguided approach in trying to do so. It would prevent some companies from restructuring, which would result in unnecessary job losses; hurt pensioners; harm small business; reduce access to credit and investment; and hurt Canadian competitiveness. Many firms are already struggling due to the pandemic. This bill would worsen, not improve, the situation.

I am pleased to say, however, that our government has taken effective action. Our insolvency and corporate law changes, our wage earner protection program improvements and support for businesses during the pandemic have all served to protect pensions and workers, while also supporting the central objectives of Canada's economic recovery. These measures help to ensure that our farms remain competitive and can continue to employ hard-working Canadians throughout the country.

[Larry Bagnell, Liberal, Parliamentary Secretary to the Minister of Economic Development and Official Languages (Canadian Northern Economic Development Agency)]

Madam Speaker, I am coming to you from the traditional territory of the Kwanlin Dün First Nation and the Ta’an Kwäch’än Council.

When I saw this was to be debated this afternoon, I thought I would like to add a few personal comments, because the issue of people's pensions has always been a point of passionate interest for me. In fact, over the years, I was aghast to learn that people could actually lose their pensions. I do not know if people who are in their golden years and live on pensions like the OAS, the Canada pension plan, or their company plan or a government plan think that those could all of a sudden partially or fully not be there. I do not think anyone ever thinks about that. I was aghast to find out that people could lose the pensions they had worked for all their life. I assume they have planned their life around living on those pensions when they are no longer able to work.

For years, I have been hearing from people who worked for Nortel. They lost their pension years ago, and must be in a terrible situation now.

The previous speaker outlined, in great detail, how this was a very complex legislated area and he outlined a number of positive steps the government had taken. It helped to enhance retirement security through the Budget Implementation Act, 2019 when it added balanced changes to the BIA, the CCAA, the Canada Business Corporations Act, the CBCA, and the Pension Benefits Standards Act, 1985, the PBSA. These changes followed national consultations with companies, labour groups, pensioners, experts and the general public. Therefore, along with those changes and the consultations, which the previous member mentioned, these are all steps in the right direction. In fact, I was really delighted when the government was able to work with the unions and make a deal with the provinces and territories to expand the Canada pension plan, which again is sustenance for people who otherwise would not have it or have access to it.

However, there are still situations where there are problems. What I want people to think about, whether this gets to committee or other forums, is how we solve the problem of protecting the money people and their company have put into a pension fund. People plan to retire on that money. They plan to use that to buy food or pay for heat in their senior years. I am not an economist or a pension expert so I do not know exactly how that would be done.

If hard-working people are putting aside contributions to a pension fund through their company, there should be some way to protect that. I do not know if that might mean legally requiring that money be put in a different bank account or an institution and it cannot be taken out. I am looking for an answer to the problem. Whether this bill is the answer or not, I do not know, but I certainly think this discussion has to occur.

That is why I am glad this concept is before Parliament. If that money were legally required to be separated, then I am not sure we would be debating this issue today. I think this has been debated at times in the past.

The Conservative speaker mentioned there were a number of solutions to this problem and that is all I am looking for, is a solution to this problem.

The NDP acknowledged what the Conservatives were saying in that this will change the financial situation and the financial systems. It would for secured creditors. Certainly, we have to look at a different system.

We want Canadian businesses to thrive. We want them to be competitive in the global world. I think the point was brought up earlier in the debate that we have to consider how to keep our companies competitive with those around the world because that is what our companies are competing with in this modern connected world. That is an important consideration as we determine a solution that must be found for this problem.

When the system is set up with rules in place so pensions are somehow protected, those people starting and running companies will know that right from the very beginning. Their business plans will be structured on that. Their financing will be structured on that, so there will be no surprises, and the business could move on under whatever those rules are.

A point was made about struggling companies and certainly, whatever the solution is, it has to make sure as much as possible that companies can be helped when they are getting close to insolvency. We want to keep them in place so there are still jobs for the workers. The solutions to that should not be the life savings of hard-working people. That should not be the solution to keeping a company solvent so people have jobs.

They have to find other methods to deal with the restructuring and keeping companies solvent, making sure they can get adequate financing, but it should not be on the backs of people who have worked their entire lives to support their families. When they get to a few years of rest and retirement, they should be able to have that support.

I am looking for whatever solution can be found for that. The problem still exists. Government has made very good progress toward improving the situation, but it needs to be completely improved so people's pensions will always be there.

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, it is a pleasure to be in the House tonight to conclude debate on my bill, Bill C-253, an act to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act with respect to pension plans and group insurance plans. The bill has a long name, but it is actually quite simple. I will move on to its principle.

What I want to do is protect the deferred salaries of employees, of pensioners. In other words, when people contribute to a defined benefit pension fund, they expect that when they retire, they will be able to get or have what they have earned over a lifetime of work and labour. This is a very simple principle. We do not want a company or multinational to walk away with a large chunk of the fund because it has underfunded the pension plan. In very simple terms, that is what Bill C-253 is seeking to address.

Of course, we have been told, in many different ways, about all the problems we might face with a bill like this one. While the principle is simple, the devil is obviously in the details, but I would like to remind the House that our primary goal is to work for the people.

During the debate, I heard many comments about how, in the end, the government did good things in its budget. Let us hope that is the case, but we cannot rely only on hope. What I am putting forward here is not a one-time budget measure. Rather, it is intended to be a permanent legislative measure, since we are legislators. I am therefore proposing a solution.

I would like to thank the many people who worked with me over the past few years. Things take a long time in the House. We have been working on this bill for five years with the help of many people, including workers, pensioners and unions in Quebec and the rest of Canada.

I have an extraordinary team who has believed in this bill since we began our work for one good and simple reason, and that is the fact that the people from my riding of Manicouagan asked for this bill. That is the standard by which we should always measure the work that we do here. The people of Manicouagan had a need for this bill and they made it clear even before I was elected. They made that need clear during the election campaign, when I met with them, so many people contributed to the development of this bill.

I would therefore like to thank my entire team, all the organizations, local agencies, unions, pensioners and many others. I would also like to thank all of my Bloc Québécois colleagues, who also believe in this bill and who worked on it with me. I obviously want to thank my colleagues in the House. I believe I heard that many of them will be at least voting in favour of the principle of Bill C-253 so that it can be examined in committee.

I would now like to say a few words to each party.

The official opposition indicated it would support the bill, saying that it could be improved upon—which is true of anything, in my opinion. I hope the opposition will support the bill and we can discuss it. As several colleagues have already said, we have been talking about it for many years, but no action has been taken.

With all due respect to the government, the fact that it is increasing old age security in no way responds to what I am asking here on behalf of my constituents and other Canadians. That might be a nice infomercial for the government, but it has nothing to do with what I am calling for.

The official opposition has said it will vote in favour of referring this to committee for study. At least some mental effort is being made.

As for the government, it will probably vote against it, even though I have heard several people applaud the solutions to the difficulty we are facing. Even at its own Liberal convention, several party members, including government members, tabled a resolution in favour of a bill like mine. I would expect the governing party to vote in favour of something called for by a majority of its members, possibly.

Furthermore, the bill presents a balanced position. We often hear fearmongering about how this is going to result in business closures, but no, this takes a balanced approach.

I will conclude with this example. When Cliffs Natural Resources went bankrupt, its main creditor was itself. It gave itself $400 million. That $400 million belonged to the pensioners in my riding. I would prefer that, with a bill like mine, this money be returned to the workers and pensioners, not to the multinationals that continue to turn a profit.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

The question is on the motion.

If a member of a recognized party present in the House wishes to request a recorded division or that the motion be adopted on division, I would invite them to rise and indicate it to the Chair.

The hon. member for Manicouagan.

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, I request a recorded division.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Pursuant to an order made on Monday, January 25, the division stands deferred until Wednesday, May 12, at the expiry of the time provided for Oral Questions.