An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985 (pension plans and group insurance programs)

This bill was last introduced in the 43rd Parliament, 2nd Session, which ended in August 2021.


Scott Duvall  NDP

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


Outside the Order of Precedence (a private member's bill that hasn't yet won the draw that determines which private member's bills can be debated), as of Dec. 3, 2020
(This bill did not become law.)


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

This enactment amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to ensure that claims in respect of unfunded liabilities or solvency deficiencies of a pension plan are accorded priority in the event of bankruptcy proceedings. It also provides that an employer has to maintain group insurance programs that provide benefits to or in respect of its employees or former employees.
This enactment also amends the Pension Benefits Standards Act, 1985 to empower the Superintendent of Financial Institutions to determine that the funding of a pension plan is impaired or that the pension plan administrator is at risk and to set out measures to be taken by the employer in respect of the funding of the plan in such cases.


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

Bankruptcy and Insolvency ActPrivate Members' Business

June 15th, 2022 / 6 p.m.
See context


Shelby Kramp-Neuman Conservative Hastings—Lennox and Addington, ON

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

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

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

Bill C-228 amends the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act to ensure that claims in respect of unfunded liabilities or its solvency deficiencies of a pension plan are accorded priority in the event of bankruptcy proceedings. It also provides that an employer has to maintain group insurance plans and provide benefits to, or in respect of, its employees or former employees.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bankruptcy and Insolvency ActPrivate Members' Business

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bankruptcy and Insolvency ActPrivate Members' Business

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

May 25th, 2021 / 12:20 p.m.
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Marilène Gill Bloc Manicouagan, QC

I would like to thank my colleague for his excellent question and his introduction, which I fully agree with.

My bill is about defending workers and pensioners, not the banks. I was not elected by banks, but by the people, some of whom are workers. That is the first thing.

In fact, my bill is very simple. It's extremely simple, although I have been told that the devil is in the details and it could have a big impact. There are a lot of assumptions about the bill, but only when we pass it can we see what is actually happening and confirm those assumptions. We are working with theories right now. The idea of introducing a simple bill is that it also gets passed quickly. There was a consensus among the central labour bodies that I have been consulting for a number of years. We talked to a lot of people, including workers and pensioners.

As my colleague Mr. Barsalou-Duval, whom I like and with whom I have already discussed this, said in the House, the bill could obviously be improved. However, the more we improve it, the less likely it is to meet the needs of the greatest number of people, because we will be stuck on details and mechanics. I hope that it will be adopted quickly.

What Bill C-259 contains is not bad, quite the contrary. I absolutely agree with that, as does my party. However, as you also mentioned, Mr. Masse, we have seen how it works in committee. It takes a lot of time. If we want to do the job right, we should even sit this summer. I would be willing to come back and testify all summer so that this bill could finally go back to the House. I'm exaggerating, but sometimes you have to be ready to do what it takes to finally get a bill passed.

I think the simplicity of the bill would allow it to be sent back to the House quickly. We can make improvements, but if we can get something done after 20 years, I think that would be amazing.

May 25th, 2021 / 12:15 p.m.
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Brian Masse NDP Windsor West, ON

Thank you, Madam Chair.

It's an interesting meeting and an important one. There are important positions for everybody to get out, and I do appreciate that.

I want to say, though, that I've been a little surprised by this bill in the sense that we've had so much concern exercised on the banks. I've been lobbied. When Manley tried to change the banks under the Paul Martin regime, we had endless streams of banks and the banking association coming to us and saying that they had to be more like the American banks or they'd be swallowed up and that they couldn't compete. Then later on, the word was that they saved Canada, despite getting massive bailouts during the economic downturn under the Harper regime to get their creditors.... Most recently, during the pandemic, they got significant action immediately from the government. In fact, the first act by the government was to protect the banks and some of their nefarious loans, which have actually made them vulnerable in many respects.

I'd like to spend the rest of my time not on the concern exercised on the banks, but on some workers' issues, because I believe workers do deserve some restitution.

My good friend Scott Duvall from Hamilton has a bill, Bill C-259, which is similar to yours, Madam Gill. I want to thank you for your hard work on the bill and for bringing it to committee. One of the differences is that his bill calls for not allowing a judge to suspend the benefits of employees at a time of bankruptcy, under the Companies’ Creditors Arrangement Act.

Can you talk a bit about why your bill doesn't include that aspect? What are the benefits or negatives of not having that in there? Unfortunately, sometimes pensioners are swizzled during the process too. That's really what the proposed section tries to eliminate.

Bankruptcy and Insolvency ActPrivate Members' Business

April 23rd, 2021 / 2:05 p.m.
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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.

Bankruptcy and Insolvency ActRoutine Proceedings

December 3rd, 2020 / 10:35 a.m.
See context


Scott Duvall NDP Hamilton Mountain, ON

moved for leave to introduce Bill C-259, An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985 (pension plans and group insurance programs).

Madam Speaker, it is my honour to introduce a private member's bill that would protect the pensions and benefits already earned by Canadian workers and retirees. I would sincerely like to thank my colleague for Hamilton Centre for seconding this bill.

Pensions and benefits earned by workers are deferred wages, plain and simple. Anything that denies workers what they have earned should be illegal. Under current legislation, employers are using Canada's inadequate bankruptcy laws to take money meant for workers' pensions and divert them to pay off their secured creditors. This bill would stop that practice and ensure workers get what they have worked hard to earn.

The Liberals have promised for years to change the laws, but have failed to follow through. It is time for the government to stand up for Canadian workers and their families.

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