Bill C-228

Pension Protection Act

An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985

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.
It also amends the Pension Benefits Standards Act, 1985 to provide for the tabling of an annual report respecting the solvency of pension plans.

Bankruptcy and Insolvency Act

[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.

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

Madam Speaker, I am pleased to rise today to speak to Bill C-228, because it is a bill that grapples with a very important and long-standing issue in Canada's bankruptcy laws.

For far too long, Canadian workers who have had the company either that they work at or used to work at go into bankruptcy have seen their retirement plans and their pensions up for grabs as part of insolvency proceedings. They are having to get in line behind some of the big banks and financial institutions, who are doing very well and get paid out before they do, the people who contributed in good faith over the course of years, in fact, decades in order to be able to safeguard a retirement plan for themselves and for their families.

It is an important issue and something that we have to deal with. I appreciate that the member for Sarnia—Lambton put forth this effort to deal with this issue.

I also thank the member for Manicouagan who has been working hard to resolve this major issue over the past several Parliaments.

I would remiss if I did not give a big thanks to Scott Duvall, a former member of Parliament for Hamilton Mountain and a proud steelworker out of Hamilton, who I think developed the gold standard on how to address this deficiency in our bankruptcy laws. It is something I have tried to honour by re-presenting his bill from the last Parliament as Bill C-225 in this Parliament.

Some of the features of Scott's bill that I think are important would not only amend the bankruptcy laws so that the unfunded liabilities of pension funds take precedence over secured and unsecured creditors, but also seek to ensure that companies cannot stop the payment of retirement benefits during bankruptcy proceedings. It would also require companies to pay any termination or severance pay owing before paying secured creditors.

I think Scott really put together a package on something that he knows well as a steelworker out of Hamilton. He worked for Stelco for many years, and he was an officer in the union that represented those workers. He saw first-hand the really brutal effects of this kind of game that companies sometimes choose to play in bankruptcy proceedings. The kicker, of course, is that sometimes it is the multinational parent company of the very company that is declaring bankruptcy that is a secured creditor and gets paid out before the workers they made the pension promise to and who contributed in good faith. That is one of the further perversions in the state of bankruptcy law in Canada that have to be addressed.

The member for Durham at one point in the last Parliament or the Parliament previous made an attempt to broach this issue in ways that, frankly, we found unsatisfactory and did not think really got to the point. However, I think it is a promising sign that the member for Sarnia—Lambton has addressed the question of so-called superpriority, where pensioners actually are in the line of creditors who have to be paid out in the case of bankruptcy. We welcome that development in this iteration of a Conservative private member's bill on this topic.

I think it is a promising sign to have Conservatives in the fold, to have the Bloc with a demonstrated history of good advocacy on this issue, to have the New Democrats who have cared a lot about this and to have a Liberal government that did commit, in 2015, to take action on this issue and has had some lines in subsequent budgets about trying to deal with it. However, the important fact to note is that, for as much as there has been some commitments on the part of the government, it has not happened yet.

Unlike certain policies, particularly ones that require spending, the virtue of this issue is that it can be solved by legislators with or without the permission or support of government, particularly in the context of a minority Parliament. Where there is good faith, and we have heard some important and sincere signals of good faith from the member for Sarnia—Lambton to work through some of the issues in this particular bill, then we can make progress. As people know, New Democrats are very committed to working with people, whatever their party, if we think we can make progress on important issues that have a direct impact on people.

I do want to flag some of the issues that I think come out of this particular piece of legislation. I alluded to one of those issues earlier in my question to the member for Sarnia—Lambton. I think there is concern about the ability of fund administrators, consulting only with the superintendent, to be able to change the terms and conditions of pension plans.

Of course, we heard loud and clear from Canadians across the country when the government tabled Bill C-27, which would have allowed for a significant restructuring of pension plans without appropriate permission from members or some consent of members, but we know that unfortunately sometimes companies engage in fear campaigns with their membership about the consequences of not doing what the company wants. The company will say the fund will not be solvent and the members are going to lose all their benefits. Often times, there is a lot of misinformation and disinformation in those communication campaigns with members.

We heard loud and clear that people who have defined benefit pensions do not want the rug pulled out from under them. They want to make sure that continues to be the case. We think that it is important that, no matter who it is, whether the superintendent or plan administrator, that they not be able to make unilateral changes to the terms of conditions of a person's plan without their informed consent and without some further rules around what can be done, because sometimes members are told certain things that may or may not be true. If a clause like this is going to go ahead, there needs to be a lot more said about the direction that would be given to plan administrators and the superintendent on how they could try to restructure a plan before taking it to the membership. That is an important point to make.

I also would want to look more carefully at the ability of companies to buy insurance against their unfunded pension liabilities as opposed to simply having to fund them out of their own resources. Insurance sometimes can be used as a tool, but it can also create cracks that people fall through. If it ends up being that the terms and conditions of the insurance do not quite match the circumstances surrounding that particular insolvency, then we might see a company discharged of its obligation to its pensioners without the insurance actually coming through and providing the full support of people's full pension, which they should have a right to.

This point was made earlier but I want to make it again. It is really important to note that, when we talk about people's private pensions, which they have contributed to usually over the course of decades, this is not a handout, this is not a charity thing and this is not a nice thing to have. It is part of the wage package. This is deferred wages.

I think Canadians would be outraged if, in a bankruptcy insolvency, the company could call up their former workers to say they had paid them a bunch of wages and now they want it back, and those people would have to pay their wages back from 1975 because the company got itself into trouble and expects the employees to bail it out.

It is no different when the company goes after the assets in the pension fund because those assets were never meant for the business of the company. They were always meant for the workers who showed up to work, did their part, held up their end of the bargain and made their contributions. They deserve to get the pension they were promised. When we, as legislators, fail to ensure that that pension promise is protected, we hurt not only the people who worked and contributed in good faith over all of those years and their families, but also the very idea of the pension promise at all.

I belong not only to a political party but to a political movement that wants to see more people have defined benefit pensions because it is future people can bank on. When we allow bankruptcy proceedings to undermine the pension promise, what we are saying to workers now is that they should be skeptical of a defined benefit pension plan, that they cannot trust it and maybe they should be investing elsewhere. However, we know that often that does not come to fruition. It is difficult as an individual investor in the market to be able to get the kind of pension security one needs, which is why defined benefit pensions have been such an important tool for working Canadians to carve out a meaningful retirement over the years.

It is why it is so important that we do that, and it is why New Democrats are committed to working with people in this place, as well as with retirees, workers and the organizations that represent them, to make sure that we can get a fix to this problem quickly and we can do it in the best possible way.

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, I am very pleased to rise today to speak to Bill C‑228, which was introduced by my colleague from Sarnia—Lambton. I want to officially thank her. I may also have done so during my comments. I have thanked her personally but wanted to do so in the House. This is the kind of collaboration that allows us as parliamentarians to go even further, and this was confirmed in all of the questions and comments we have heard.

I do not think anyone in the House will be surprised to hear that I took a serious look at this bill. Again, there is absolutely no partisanship here. As my colleague from Sarnia—Lambton pointed out, I have introduced two bills on similar topics: Bill C‑372 in 2017, the same day that Sears declared bankruptcy, and Bill C‑253, during the previous Parliament, which has become Bill C‑264. It is an endorsement of everything going on in the House, because there is really a movement to get this bill passed.

Before I get to the matter at hand, I want to thank the people who worked on this bill, and I am sure my colleague will agree with me on this. This bill really affects everyone, Quebeckers and Canadians, in all types of businesses. We heard about Sears, but in my region this happened with a multinational mining company called Cliffs Natural Resources. I say “my region”, but there were also other areas affected.

Many people worked on this bill. Individuals, workers and retiree organizations all testified. My colleague mentioned some who have been supporting this bill since 2017. This bill is supported by approximately four million people across Canada, Quebec included, as well as by associations representing retirees and seniors. When we think about it, four million people out of approximately 40 million is a large proportion of the population that is asking the House of Commons to take action to protect pension funds.

I would particularly like to thank Gordon St‑Gelais, Kathleen Bound, Mario Levac, Nicolas Lapierre, Dominique Lemieux, Sandra Lévesque, Manon, Claire, Pierre, Ghislain, Anthony and Serge. There are so many others. I do not have time to name them all, but they are the ones who breathed life into this bill.

I repeat, my colleague from Sarnia—Lambton's bill really affects everyone. That is clear because, in my case, the very idea for the bill came from Cliffs Natural Resources retirees. That is real proof. Sometimes there is cynicism in politics, but this bill takes some of that away, because the bill really comes from the people. It shows that institutions can work properly when the will is there. I wanted to point that out to show that an MP is nothing without their constituents. If we want to represent them properly, then we need to listen to them.

Let me get right into it. Bill C‑228 should have no trouble getting to committee and then to the Senate. It should not even have any trouble getting through the upcoming vote. It has already gone through significant study in committee. For example, it was very important to me that there be protection for insurance. That was removed from Bill C‑228, but other mechanisms were added, and we will have to take a close look at them because there are still a lot of unknowns despite all the studies. Even so, I think everyone who supported Bill C‑253 will support Bill C‑228. I say everyone because all four parties were on the committee, so I do not see how anyone could be against this bill.

Why not fast-track it?

We could move it all the way through to royal assent pretty quickly. A number of senators were interested in my bill, so they will also be interested in the bill introduced by my colleague from Sarnia—Lambton. I really think things will move along very quickly.

I have 10 pages of notes and I am only on the second one, but if I can at the very least convey my enthusiasm and my hope that everyone votes in favour of this bill, I will consider that a success.

I could get into the more technical aspects of the bill because people are always interested in the scope of a bill. The spirit of my colleague's bill is the same.

What we are really trying to do is save the retirement nest eggs of workers who have accumulated a salary for years, what we call deferred wages. I always feel compelled to remind people of this, because I sometimes hear surprising questions in the House. I think I even heard some answers today with references to CPP, which has absolutely nothing to do with this bill.

What we are talking about here is really a pension fund. Workers pay into a pension fund and agree to give up part of their salary for a certain period of time. Instead of receiving $25 an hour, for example, they will receive $22 an hour. The union and the employer negotiate this so they can build up a pension fund for the employees' retirement. In other words, this is something they have already paid for, but when a company files for protection under the Bankruptcy and Insolvency Act or the Companies' Creditors Arrangement Act, they could lose it.

For example, back home in my riding, the Cliffs pensioners lost roughly 25% of their pension fund. I should mention that pension funds are not indexed. If a retiree had $1,000 in 1995, it no longer had the same value in 2005 or in 2015, and that value will be different in 2025 too. This is already a loss for those people, and it can become enormous in some situations.

Insurance is also very important to me because when these people lose their insurance, they are often older. At 65, 70, 75 or 80 years old, it is harder to get insured. They often need more care and drugs—such is life—but they cannot get the same care they used to get. By the way, this may be the part of the bill I agree with the least, because this issue is very important to me. I have talked to people who have experienced hardship, like people with cancer who cannot afford decent care because companies went bankrupt.

We are not talking about small businesses, but multinationals. These are companies with significant revenues that should have managed their pension fund better in order to hang on to it.

I have spoken with people who lived through these tragedies. I think of them every time we talk about these bills in the House and study them in committee. This is very much a human issue, and I think we can do something about it. This bill is not calling for huge changes. It is not calling for all of the money to be returned to retirees and for nothing to be given to the creditors. That is not what this is about. This is a reasonable bill.

As I said, everyone in the House is in agreement, but even in the different sectors, companies agree on the principle of placing retirees higher on the list of priorities, without making them the only priority. I point this out because that exaggeration is one common criticism of this type of bill.

In closing, I would like to express my appreciation for everyone, including my House of Commons colleagues, who is working or wants to work to advance a bill like this one. I want to applaud the strength of people in my riding and other ridings, particularly people from MABE, Sears, Nortel, Cliffs and Eaton, which we talked about earlier. I thank them for their ongoing work because they are the ones supporting what we are trying to get done here and they are the reason we here are so aware of this issue and on the verge of passing a bill. There are just a few steps to go.

I also want to highlight the level of solidarity people have shown. Our parties do not always see eye to eye, but we have found a way to rise above our differences, work together and come to a compromise. Being an MP means making compromises, not compromising who we are, but seeking compromise, and that is something we can do. For me, it is also about respect. We respect one another, just as we respect workers and our constituents. All that makes me very excited about the the idea that we can get this bill passed.

I would once again like to express my support to my colleague from Sarnia—Lambton. I think she is doing amazing work. We will certainly get this legislation passed, whether it is this bill or any other bill along the same lines, such as mine. Why not?

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, I want to thank my colleague from Sarnia—Lambton for introducing Bill C-228 and for being so open-minded in the House. I heard examples of this several times today.

She said that we are ready to adopt this type of bill, and I completely agree. I want her to know that she will have my support and that of the Bloc Québécois on her bill. I think it could be referred to committee very quickly.

I would like to revisit the June 2021 committee meeting, which I attended. Everyone was in agreement, even on the question of the three-year or five-year period given to companies to make the appropriate changes.

I would like to know whether she thinks this time limit could even be removed entirely, which was a proposal supported by the member for Carleton.

[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.

Government Business No. 7--Proceedings on Bill C-12

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

Mr. Speaker, it is a pleasure to rise today to talk about one of my favourite topics, seniors, and I have now become one.

I think it is really important that we have this discussion today. This is an opportunity for us to pull what I would call an ugly scab off of the issue of affordability for seniors, especially those living on a fixed income. This is a wound that has been festering for some time, and I want to start off by taking a look at the actual numbers and the situation that many Canadians are finding themselves in.

There are single seniors living on a fixed income getting OAS, GIS and CPP. For those who would get OAS, depending on the work that they did in their career, they might get as much as $7,700 a year. They might get, from GIS, if they received the maximum, about $11,500. If they had worked a long time and they had maximized their CPP, they might be getting around $9800.

What that works out to every month is somewhere between $2000 and $2400, depending on where they are on the scale. That is it.

These are people, if they are getting GIS, that do not have huge nest eggs. They do not have huge savings to draw upon to get them out of a bad situation. Today, the folks who define the Canadian poverty line define that line as 50% of the median income. For a single person, they are saying anybody who makes less than $3600 a month is actually living at or below the poverty line. All of these seniors we are talking about are already living below the poverty line, after they have worked their whole lives and after they have built the nation.

All this rhetoric coming from the other side is ironic. Even in the 2020 throne speech, we heard the words, “Elders deserve to be safe, respected and live in dignity.” Well, if they deserve to be respected, and if they deserve to live in dignity, that is certainly not what we are seeing today.

I want to start by describing the situation before the pandemic. I will then talk about what happened during the pandemic and where the need for Bill C-12 comes from. I want to then talk about the lack of government action when all of these issues were being raised, and make a few comments to follow up based on that.

Initially during the pandemic, recognizing that people were struggling and many people had lost their jobs, the government did make an effort and the Conservatives did support many programs to replace the income that people had been making.

Sadly, many of the people we are talking about, who are on fixed incomes, had to go out and take on other jobs just to make ends meet, just to heat their homes and have groceries on the table. In my view, that is totally unacceptable for the seniors who built the country. However, that was the reality.

What did the Liberals do during the pandemic? They decided to increase the carbon tax twice. Not just once, but twice. This put up the cost of groceries, home heating and basically all goods. At the same time, we have seen inflation increasing to where we are today at nearly 5%. People on a fixed income have zero ability to adapt to that.

We know that the lack of action we have seen in the affordable housing crisis has also just gotten worse during this pandemic. Even in a riding like mine, which is not a metropolitan riding, a person cannot find something to rent for less than $1000 a month. If someone is on a fixed income, and they are only getting $2000 a month, there will not be a lot left over for food, groceries and heating.

To get seniors living at what we are calling the poverty line might take as much as $1000 or $1500 a month, depending on the location they are living in. The government is great to talk about the increases they have made to GIS in the past that raised them $60 a month. However, at the same time, Kathleen Wynne and the Ontario Liberals raised electricity prices, so people were paying $130 more a month. They were even further behind. That is not the kind of action we need from government.

Then we saw the government come with a plan to give seniors, but only those over the age of 75, a one-time payment of $500 in August, just as it was calling an election, to remind those seniors over the age of 75 to not forget about it. Those between the ages of 65 and 75 who were living on a fixed income got nothing. As well, the government is promising a raise for those over the age of 75 for the summer of 2022.

I am happy to see the mandate letter of the minister now includes all seniors over 65. What she will actually do is another story, because we always see a lot of talk and not much action. I do not know why those aged 65 to 75 were excluded. I heard all the time at the doors in my riding about how they were finding it just as tough to live as those over the age of 75.

If we keep in mind that these people do not have any other income to draw on, we can see the government was aware of the problem very early on. In March of 2020, at the start of the pandemic, I was already emailing the then minister of seniors to say that we had a problem. The people who took CERB who were also on GIS would have their GIS impacted the next year. This was raised in March of 2020. In March of 2020 the government was aware that it was a problem, and nothing was done at that time.

One of the issues I have with the government bringing this bill here today, and deciding that it needs to be rushed through, after over a year of inaction, is that there was a fix for these seniors who had their GIS reduced, who cannot pay their rent or buy food to eat. Some in my riding lost their homes and have become homeless, and they needed that money immediately.

The government had the ability to put the money in their accounts immediately. How do I know this? Let us think about it. The government knows who gets the GIS. It is deposited in the accounts of those seniors every month. It knows who got the CERB, because it deposited that into their accounts as well. It certainly knew how to put in that $500 “do not forget to vote for us” payment for the people over age 75 in August.

Therefore, it could have just as easily recognized the impact this was going to have, put that money into their accounts and reconciled it later. It did that with the 800,000 Canadians who received a benefit to which they were not entitled, and which it is now trying to reconcile.

With the hardships that Canadian have faced, these seniors who call my office are crying. They are losing their homes. They cannot afford to eat. Something has gone wrong, perhaps with their car, and they now have no ability and no mobility. It is unfortunate that the Liberals could not, at the very least, address the problem and then come back to fill in any gaps in the legislation. They have not had any issue in the past doing things through orders in council and using various tricks, which do not involve coming to Parliament, to get whatever it is they want to spend. However, when it comes to seniors, they just forgot about them.

After I flagged the problem in March, the minister said the government would deal with it. Then it paid out benefits to people who lived in other countries. It paid out benefits to people who were ineligible. When the new minister came in in October, I asked her if there was something that could be done about it, because I had people in my riding who were writing me stories that were enough to make one cry. I could certainly read out their testimonies.

In May of 2020, the Minister of Seniors was before the Standing Committee on Human Resources, Skills and Social Development and was given a prepared binder by the department officials. In that binder, under section 7.2, under the heading of “Questions and Answers: COVID‑19 Economic Response Plan”, the question in the book reads, “Will income from the Canadian emergency response benefit be used in the calculation of guaranteed income supplement benefits?” The answer was “It is considered to be taxable income and must be considered when determining entitlement to the guaranteed income supplement, GIS, and the allowances”. Therefore, the government actually knew then that the problem existed, but it has done nothing for a year, and here we are.

The Conservatives brought a very reasonable amendment. We understand, and we want to see seniors get their money. However, not to make this point too many times, the government could do that today if it really had the political will, but it does not. We said that we have to respect the parliamentary process. We see, too many times, the Liberals wanting to avoid parliamentary process and wanting to push things through the House. We see that they have already limited debate on the bill, as they do on many other bills, after saying they would never do that.

Here we are. We need time to debate the bill and time to amend it, because of some of the things that happened over the course of the pandemic where programs were put in place that had shortcomings, which were pointed out immediately and were never repaired. We can think of the many small businesses that were impacted at the beginning of the pandemic when they were not eligible if they were sole proprietorships. They were not eligible if the business had just started up and did not have a full year of revenue and business statements to show. There were quite a number of people who were impacted because the programs that were rolled out were flawed. Why were they flawed? It was because the Liberals tried to rush them through Parliament.

I would argue that it is worth taking some time, and I think the Conservatives brought quite a measured little amendment to this motion that would give us the time that we need to look into making sure that everything is as it should be. In our amendment, we are saying to send it to committee, get the Minister of Seniors there so that we can hear everything from her and her departmental officials, ask all the questions, identify those things that need to be repaired and fix them. We could then immediately do the clause-by-clause, make the amendments that need to be made, bring it back to the House and then get in the express lane and not use any amendments at report stage or anything like that but go right to third reading and off to the Senate.

Keep in mind that the Senate is not even sitting in the next week. We can say “emergency”, but due process is that it goes through the stages of this House and then it goes to the other place, which is not even sitting. We can hurry up here, but they will not be there to receive it and process it.

We need to correct the problem because seniors are already in a bad place. I talked about the small amount of money that seniors are making. I talked about how dire it is getting, and it is only going to get worse as we see the supply-chain issues that are currently being impacted by the trucker mandates and the lack of action on the part of the Prime Minister to address this.

As a sidebar, I think it is unbelievable that the Prime Minister has called for the Emergencies Act to be put in place when he was not even using the actions he already had the power to take in order to end the supply-chain issues that are driving up the cost of everything and making this problem even worse.

Seniors are going to have a very difficult time waiting another six months before they receive their payments, so I encourage the government to do what it can to make sure that seniors receive their payments as soon as possible after we have the discussion on the bill. At the same time, I must say that we have to look ahead to the future. We have one in six seniors in the country right now, and it will be one in four in just a few years. We cannot allow them to be this far away from living, at least, at the poverty line.

Some of the measures that can be taken would be to accelerate the OAS and GIS payments. I know the Bloc and the Conservatives supported a motion in the last Parliament that did not go ahead because of the present government. I encourage the government to try to get seniors back to where they need to be, and I am going to do my part.

There are seniors who thought they were going to be able to retire with a pension and are unfortunately not able to do that or have less pension than they expected because their employer went bankrupt. I am bringing a private member's bill forward, Bill C-228, the pension protection act, which would cause businesses to every year table a report on the solvency of their fund so that we have transparency to see whether those funds are in good shape. If they are not, it would provide a mechanism for funds to be transferred in without tax implications. Then, if the organization cannot transfer and top up the fund immediately, they would have the ability to get insurance while they are able to, over a series of years, restore the fund to solvency. In the case of bankruptcy, pensions would be paid out to seniors and they would be paid out before large bonuses to executives and large creditors.

This would solve the problems of many seniors, including those who have lost their employment due to the bankruptcies of Eatons, Sears, Algoma, Caterpillar, Nortel and numerous other companies that have left employees in that situation. We can see from the information I read at the beginning of my speech that if seniors have to rely on OAS, GIS and maybe CPP, they are still living below the level that Canadians would consider acceptable. We cannot have that for our seniors. It is very hard for our seniors when they see new people coming into the country who are receiving more money than they are making, when they helped build the country. I think we can agree that we want all Canadians to be living with a reasonable standard of living.

The last thing I am going to say on this topic of Bill C-12 is that I do need to commend the new Minister of Seniors for at least bringing the legislation forth in reasonable time. She is not the one who knew about it last year and did nothing, so at least we have the bill before us today. As has been said, the Conservatives will support this to go to committee, but we will have our eyes on the legislation to ensure it is solid and we are not going to see more loopholes that would cause further issues for our seniors.

At the same time, I could not get up and speak about seniors in this place without talking about some of the other advocacy I have done on behalf of seniors. As members know, I brought forward a palliative care bill in the first session of Parliament, and I would say there has never been more of a need to continue the work done on that. Now, with the pandemic, we have been distracted from that. I would encourage the government to come up with a plan to exit the pandemic and restore the economy, so that we can then start talking about some of the other issues that are facing seniors. They certainly need to have good options at end of life to get the dignity the throne speech indicated. They certainly need to be able to get the drugs and essential medicines they require.

Certainly, I want to see the government do something on that, but today the call is for the government to listen to the Conservatives and take our advice. Let us support the motion my colleague brought forward, which says, let us get this to committee, all sit down, roll up our sleeves, get the amendments that are needed and then get this done. Let us not make seniors wait until July 2022 to receive the payments they desperately need today in order to keep them from becoming, in some cases, homeless.

Bankruptcy and Insolvency Act

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

moved for leave to introduce Bill C-228, An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985.

Mr. Speaker, I am pleased to rise to introduce my bill.

The pension protections act would ensure that people who have worked and paid into pension funds would actually receive that benefit. We have all heard so often about companies going bankrupt and leaving their employees with no pensions or pennies on the dollar. My bill would address this by requiring a report on the solvency of the funds to be tabled here in Parliament for greater transparency. It would create a mechanism to transfer money into a fund to make it solvent without tax implication or to get insurance on the insolvent part and, in the case of bankruptcy, it would pay out pensions in priority before big executive salaries and large creditors.

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