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.

Myra Falls Mine

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, in my riding of North Island—Powell River, days before Christmas, with no notice, over 300 employees were told that the Myra Falls Mine was shutting down. I sat down with Unifor Local 3019, which is working hard with all levels of government to protect its workers. Its ask of me was simple: When will the rules finally be fixed in Canada to protect workers' pensions and local small businesses in our community when big projects shut down?

We know that the Bloc and the NDP pushed very hard to get Bill C-228 through this place last year. In fact, it received royal assent in April of last year, so where are the regulations? Where is the government in finally making workers a priority in this country? When will we see workers and their pensions at the top of the list instead of at the bottom?

Workers in Canada do not deserve this. Our small communities have seen these boom-and-bust cycles again and again. The workers and their local communities bear the weight of it. It is time that they were protected. We must get the regulations in place now.

Motions in amendment

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

Madam Speaker, of course, the best help that Canadians can get with affordability challenges is a well-paying job.

We know there are 605 media workers who are going to be out of a job because Metroland Media decided that it would shut down 70 print community papers.

One of the things that the government did, and I am quite happy to say worked with opposition parties to get it done, was Bill C-228, to provide pension protection in the case of bankruptcy.

However, the NDP had also negotiated amendments to protect the severance pay of workers. The member for Winnipeg North struck those provisions out on a point of order and then later denied unanimous consent in order to get them put back in.

I am wondering if the member wants to take this opportunity to talk to those 605 families and explain why he wanted to put the predators at Metroland Media ahead of those families getting their severance.

Protection of Pension Plans

[Marilène Gill, Bloc, Manicouagan, QC]

Mr. Speaker, pension plans are finally protected. The Senate has just passed Bill C‑228. After tabling this bill three times, every time I was elected, and after seven years of raising awareness, providing information, collaborating, coordinating, rallying public opinion and negotiating, I can finally say, to everyone who helped ensure pension plans would be protected in the event of bankruptcy or restructuring, “mission accomplished”.

I want to offer my warmest congratulations to the Cliffs retirees, who approached me in 2015 to speak on their behalf in Ottawa. From the bottom of my heart, I thank the United Steelworkers for believing in this cause and supporting it from start to finish. Their voice has been heard. I also want to thank my colleagues in both houses. On a more personal note, I especially want to thank the member for Sarnia—Lambton.

Workers and their unions are the ones who change things, and changing things requires strength, solidarity and respect.

Financial Protection for Fresh Fruit and Vegetable Farmers Act

[Darren Fisher, Liberal, Parliamentary Secretary to the Minister of Seniors]

Madam Speaker, it is always an honour to rise on behalf of the good people of Dartmouth—Cole Harbour, in Nova Scotia. I certainly appreciate the opportunity to discuss Bill C-280 with my esteemed colleagues here in the House today.

We will undoubtedly hear more about the merits of this bill from our colleagues. For my part, I will focus on offering an overview on the changes it would bring to our insolvency regime, in particular where it would place fresh produce sellers in relation to other creditors, including farmers of other types of perishable products, employees, pensioners and potentially smaller and more local suppliers.

To fully grasp Bill C-280, we must start by considering how our insolvency laws currently work. There are two main insolvency laws in Canada: the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act, the CCAA. These laws address both business and personal insolvencies.

Business insolvency solutions include both restructuring and liquidation options to distressed businesses to mitigate impacts and make the best of a bad situation. If restructuring is not feasible and a liquidation is required, the BIA ensures the orderly liquidation of assets and distribution of proceeds to creditors. At the top of the list are deemed trusts and superpriority creditors, which currently include limited amounts for farmers, fishers and unpaid suppliers, including the fresh produce suppliers that are meant to benefit from this bill. It also includes amounts owed to employees for unpaid wages. Next are secured creditors, followed by preferred creditors and unsecured creditors, which would include most unpaid suppliers, such as landlords and construction and repair businesses.

First, as I briefly mentioned, there is already a limited superpriority for Canadian farmers, fishers and aquaculturists, which entitles them to payment ahead of other creditors for amounts owing on products delivered within 15 days of bankruptcy. The superpriority available to farmers under this provision applies to the bankrupt buyer's inventory or the proceeds of the sale of the inventory. Unlike Bill C-280, the existing superpriority applies to all Canadian farmers, including producers of other perishable agricultural commodities such as milk and eggs.

Second, any unpaid suppliers of goods, including fresh produce sellers, can seek to recover unsold, identifiable goods from a bankrupt purchaser within 30 days of delivery. Canada's insolvency laws balance debtors' and creditors' interests, enabling businesses, including those in agriculture and agri-food, to access credit, invest, create jobs and treat creditors equitably.

Typically, changes to priority payments in insolvency are only made in exceptional circumstances. My colleagues may, for example, remember Bill C-228, which elevated the claims in insolvency for amounts owing to pensioners, who in some unfortunate cases have seen reductions in their pensions and retirement benefits due to the insolvency of their employers.

Bill C-280 creates a deemed trust for the claims of fresh produce sellers. A deemed trust is an extraordinary legal tool that, when used, makes the proceeds of a sale the property of the seller and not the buyer. Even if the seller is not yet paid, in an insolvency the deemed trust would let sellers recover amounts ahead of all creditors and outside of the insolvency process. This is a much stronger legal tool than is currently enjoyed by any other private commercial creditor group in insolvency.

First, the deemed trust would apply to the entire fresh produce supply chain. This means marketers, intermediaries and wholesalers of fresh produce who are engaging in everyday business transactions, just like every other supplier or wholesaler of other goods to the bankrupt purchaser. I note that this could also include multinational grocery corporations that wholesale fresh produce to their affiliates and large American sellers selling into Canada.

Second, it would apply to all the assets of the company, not just the inventory.

Third, whereas the existing protections for farmers apply only to produce from Canadian farms, American and other international fresh produce farmers and suppliers participating in a Canadian insolvency would benefit under Bill C-280.

Pension Protection

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

Mr. Speaker, I am very pleased to rise today and announce the passing in the Senate of my second private member's bill, Bill C-228, on pension protection.

This bill will ensure that pensioners who have worked their whole lives for a company will receive the pension benefit they are due. This is accomplished by providing transparency to know which funds are insolvent, providing a mechanism to transfer funds to make them solvent and, in the case of bankruptcy, putting pensions in priority ahead of creditors.

There have been many members of all parties in the House and the Senate who have been trying to pass such a bill for two decades. I want to thank all of my colleagues for their help with this. This is a great day for Canadian pensioners. No longer will we see companies go out of business and leave those who have worked hard their whole lives without any pension or with only part of a pension.

Thanks go to everyone in the House and the Senate who supported the bill. It is a great day for Canadian pensioners.

Speaker's Ruling

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Happy new year, Mr. Speaker.

Today, I would like to raise a point of order regarding an amendment to Bill C-21, an act to amend certain acts and to make certain consequential amendments (firearms). As stated on page 770 of House of Commons Procedure and Practice, third edition, “An amendment to a bill that was referred to a committee after second reading is out of order if it is beyond the scope and principle of the bill.”

The amendment in question, G-4, would amend clause 1 of Bill C-21, and the New Democrats have been clear in expressing our opposition to this amendment. The amendment seems to target those who use guns for hunting, for protecting farm animals from predators and for supporting safety in the backcountry. What is more, we have all heard from indigenous people that the amendments would not respect treaty rights nor the duty to consult.

Bill C-21 was originally intended to limit the number of handguns on our streets. Before the amendment was introduced, there was every reason to believe that Bill C-21 was on track to passing through this House before Christmas, but instead, the amendment was introduced at the eleventh hour with no ability to question witnesses about its impacts. It is a more than 200-page amendment to what was originally a 44-page bill. In our view, that constitutes an abuse of process. We are not asking the Speaker to judge the merits of the amendment. Instead, we are bringing forward a very important procedural point.

We believe, contrary to the committee's findings, that this amendment seeks to expand the scope of the bill as established at second reading since it addresses a new idea that was not considered at second reading.

The amendment is out of scope because the original Bill C-21 was meant to implement a handgun freeze. This amendment would drastically expand the definition of “prohibited firearm” in the Criminal Code to cover all sorts of long guns, including those commonly used for hunting and farming and by indigenous communities. This House never had a chance to debate this measure at second reading.

When the amendment was moved on November 22, 2022, the committee chair deemed that it was not beyond the scope of the bill. This decision was appealed, and the committee voted in favour of the committee chair's decision.

However, as we saw in the very clear Speaker's ruling on November 16, 2022, regarding amendments to Bill C-228, the ultimate decision on the scope of a bill rests with the House itself: “The Chair would like to remind members that the scope of a bill is not determined by its sponsor, by the government or even by the committee considering it, but by the House itself when it adopts the bill at second reading.”

In this situation, the committee adopted amendments that the Chair ultimately struck from the bill during consideration at report stage, because you, Mr. Speaker, ruled that the amendments were beyond the scope of Bill C‑228 as passed by the House at second reading. Although we realize that the Speaker usually does not rule on a matter that is still being debated in committee, we believe that in this particular situation your opinion is necessary and important.

The committee has been stuck for weeks debating this amendment, which is, in our opinion, out of the scope of the bill. It is possible that you would rule the amendment out of order at report stage, which would make the hours of debate at committee completely unnecessary. It would be in the interest of all parliamentarians to avoid the waste of time and energy spent debating an amendment that would ultimately be removed from the bill.

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order. Welcome to meeting 70 of the House of Commons Standing Committee on Finance.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Wednesday, November 16, 2022, the committee is meeting to proceed with the clause-by-clause consideration of Bill C-32, an act to implement certain provisions of the fall economic statement tabled in Parliament on November 3, 2022 and certain provisions of the budget tabled in Parliament on April 7, 2022.

Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Members are attending in person in the room and remotely using the Zoom application.

I would like to make a few comments for the benefit of the witnesses and the members.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your microphone, and please mute yourself when you are not speaking.

There is interpretation for those on Zoom. You have the choice at the bottom of your screen of either floor, English or French audio. For those in the room, you can use the earpiece and select the desired channel.

I remind everyone that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as well as we can. We appreciate your patience and understanding in this regard.

Members, before we go to clause-by-clause consideration of Bill C-32, you will have received the budget for the Bill C-228 study from the clerk on Tuesday. Everybody should have received it at 11:03 a.m.

I'm looking around for confirmation that everybody is good with that budget.

The House resumed from November 22 consideration of the motion 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 the third time and passed.

Pensions

[Justin Trudeau, Liberal, Prime Minister]

Mr. Speaker, we have always been there to protect pensioners and workers, unlike Conservative politicians, who continue to push for CPP and EI cuts. We will support Bill C-228, but we will take no lessons from a Conservative Party that waged war on labour for a decade and has nothing to offer Canadians but Bitcoin and buzzwords.

Pension Protection Act

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

Madam Speaker, it is a pleasure to be here at this, the final reading of this bill, before the vote tomorrow and hopefully the bill's going on to the Senate.

It has been a long journey. Over the last at least 10 years, possibly longer, there have been numerous efforts to bring forward bills to get the pension protection Canadians deserve.

Basically, when I looked at the work that had been done, in every one of them there was something that not everyone could agree on, so I cherry-picked from all the different ideas that people could agree on and said, “Let us at least do something. Let us move in the direction of good.”

That is how Bill C-228 came into being. Previously, there was a bill, Bill C-253 in the last parliamentary session, which made it to the industry committee. It was on the priority of pensions.

This bill would do three things.

It would table a report in the House on the solvency of pension funds, so we can have greater transparency and know which funds are in trouble.

It would create a mechanism for us to transfer funds into an insolvent fund from elsewhere in the business, with no tax implication, so we can fix the problem before it becomes a difficulty for the pensioner.

Then, in the event of a bankruptcy, we would pay out pensions in priority over secured creditors like large banks, preferred creditors, and unsecured creditors. That will put pensioners in a much better position. Pension funds will be solvent, in general, and when there is a bankruptcy, large creditors are way more likely to be able to survive one company's going bankrupt than an individual who has paid into their pension and is counting on it for their retirement.

The bill has had much study. It has heard input from all kinds of stakeholders, and we are here today with what I think is a really good balance of all the rights of the pensioners and those of the suppliers. I think we have a very acceptable balance.

I want to thank a number of people, the member for Elmwood—Transcona, the member for Manicouagan and the member for Joliette, as well as all the finance committee members. There have been numerous people who have helped this bill along, provided their input and provided suggestions to improve it. I want to thank the member for La Prairie, who traded his private member's spot for today in order to move this up quickly and get it over to the Senate.

It just shows that there is broad support for the bill. When we look at the concerns that were raised about the bill, there was one amendment that was made at committee to include severance pay and termination pay in the priority. I supported that. I said I supported it at second reading, but it was ruled out of scope by the Chair and eventually back in the House, where the Liberals wanted the Speaker to rule on it. I think the Speaker was correct in saying that committees do not have the power to put things in that are out of scope, but then we brought a unanimous consent motion.

The member for Elmwood—Transcona brought the motion to have the House decide to put that amendment back in. Unfortunately, at that point, the Liberals did not support that amendment, and the motion did not receive unanimous consent.

That amendment is now out of the bill. That was the controversial part. I think we can agree that the rest is the right thing to do for Canadians.

I am happy to hear the parliamentary secretary to the government House leader say tonight that he has not yet made his decision on how he is going to vote. I would encourage him to vote yes to Bill C-228.

Now is the time, in this parliamentary session, for us, after 10 years of bringing various and sundry bills, to finally do the right thing for Canadians and protect people who have worked their whole lives and paid into a pension fund. It is time to give it the priority it needs to have.

I look forward to the vote tomorrow, and I look forward to having all parties in the House support Bill C-228.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Madam Speaker, I am pleased to rise and speak to my colleague's bill, Bill C-228. I would like to thank the member for Sarnia—Lambton for introducing this bill and providing me with the opportunity to participate in this debate.

This bill comes at an important time for Canadians. Bill C-228 seeks to protect the pensions of workers in the private sector so that when a company goes bankrupt, pensioners receive the benefits they have worked long and hard to receive. It combines elements from previously introduced bills and would do three things. First, it would require that an annual report on the solvency of pension funds be tabled in the House of Commons. Second, it would provide mechanisms for companies to transfer funds to keep their pension funds solvent. Third, in the event that a company does go bankrupt, pensions would be paid out ahead of large creditors and executive bonuses.

For better clarity, not only does the bill seek to ensure that pension funds remain solvent by requiring annual reporting that demonstrates the pension funds are fully funded, but it would protect Canadian workers' pensions, as it creates mechanisms to help companies keep their pension plans solvent. Should a company's pension fund become insolvent, they will be able to transfer money into the pension fund without any tax implications. Encouraging companies to keep their pension funds solvent and providing them mechanisms that help them to achieve that is something that ultimately helps and protects working Canadians.

The solvency of pension funds is especially important now, as we are in a cost of living crisis. Seniors in particular are struggling at this time, as they live on fixed incomes that are being stretched by rising prices and inflation, which the government is fuelling with its inflationary spending. The government continues to deny the consequences of its inflationary spending, but we are confronted by them daily.

Canadians call me every day asking how the government expects them to keep up with the rising prices that are being caused by the government's out-of-control spending. The government has created an unpredictable economy with record-high inflation. Now, with its plan to triple the carbon tax, Canadians living on fixed incomes are being pushed to their limits.

With the unpredictability of the economy, record high inflation rates and the Liberal plan to raise taxes, the protection of pensions is vital. Canadians need to be secure in the knowledge that their pensions, which they have contributed to for many years, will not be at risk of disappearing overnight.

As inflation continues to rise, those who rely on pensions from the private sector are more vulnerable. They have to worry not only about their monthly payments being stretched thinner and thinner, but also that the company paying their pension may go bankrupt and use the pension fund to pay off its debts.

Over the past two years, we know that many businesses have struggled, many have not survived and many may be on the verge of making the decision to close their doors. Should this happen, many people may find their pensions at risk. Pensioners should not have to worry about the security of their pension. The dream of retiring for Canadians should not be washed away because the pension fund of their company was used to pay off debts and give bonuses to executives.

That is why our party believes that pension plans should be invested by independent trustees for the benefit of employees and should be held at arm's length, not accessible by a company or its creditors. By doing this, the pension fund will be solely focused on serving the workers who are contributing to it and drawing pensions out of it, and we will remove the ability for corporations to interfere with pension funds or cause them to become insolvent.

Another important aspect of this bill, supported by the independence of pension funds, is that in the event of bankruptcy, paying out pensions would become a priority, ensuring that seniors are not left behind. This will ensure that the many years of hard work by Canadian workers will still be rewarded with the pensions they have earned. It will also ensure that even in the case of bankruptcy, the dream of retirement will not be lost. Canadians will still be able to depend on the investments they have made in their companies' pension funds and plan for the future.

I am sure many of my colleagues in this place have heard from Canadians that they are finding it difficult to plan for their future when there is so much uncertainty due to the Liberals' inflation and the rising taxes.

This bill provides an opportunity for members to vote in favour of giving Canadians security in their golden years, allowing them to retire and enjoy the fruits of their labour.

The purpose of this bill is very clear. We want to protect the pensions of hard-working Canadians. The bill seeks to bring more stability to private pension funds and ensure that Canadians do not lose out. It is a step towards giving Canadians more certainty and control over their own lives and hard-earned money, making sure the money they have earned ends up in their own pockets.

I know similar bills have been introduced in the House previously, and I am happy to see that Bill C-228 has had broad support among other parties. Again, I want to thank my hon. colleague from Sarnia—Lambton and hope to see more initiatives in the House to help support Canadians.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Madam Speaker, many expressive words come to mind as I rise to speak to Bill C‑228 today in the House, a few hours before voting at third reading. My words are “privilege”, “honour” and “pride”.

Why? As parliamentarians we play a part in history. We have the opportunity to do something historic, namely to correct an injustice that has existed for far too many years by protecting retirement funds, the nest eggs of workers and retirees, in the event of a bankruptcy.

I do not think there should be any hesitation tomorrow when it comes time to vote. We should all stand up unanimously in the House to tell all workers and the unions that have been lobbying for years to convince parliamentarians to remedy this situation that we will finally do them justice. That is my plea today.

I would also like to commend the Conservative member for Sarnia—Lambton and thank her for her bill and for the work that was done on it across party lines with the NDP and my colleague from Manicouagan. It is really something when we are able to work together to advance the rights of workers. I really encourage the Liberals to join us. I heard the parliamentary secretary say in his speech earlier that he was still undecided about tomorrow's vote. What is there to be undecided about? There should be no hesitation on this issue.

If even just one company were to go bankrupt today, the human suffering would be terrible. A company going bankrupt results in job losses, relocations, unemployment and complete reorganization. When, on top of that, a company puts itself under creditor protection and pension plans are insolvent or have not been properly funded, retirees are faced with enormous losses to their pensions.

Consider the Cliffs mine on the north shore, or Nortel, or Aveos. There are situations like these—and this is a long list—where workers and retirees have seen all the savings they socked away during their working years melt away like snow on a sunny day.

We must remember one fundamental thing. Retirement is a deferred salary, compensation that is deferred until retirement. When a company goes bankrupt and that fund is unprotected, thousands of workers are put at risk. This concerns many workers in Canada.

I also really want to commend all the work done by my colleague, the member for Manicouagan. When Cliffs' mine on the north shore went bankrupt, she went to bat, took a stand and worked hard to introduce a bill that would protect pensioners and to ensure that this never happens again. There was one hour of debate, but at least there was debate, because, at the time, the government was against this idea. It made people aware of the fact that this should never happen again. Since then, there have been many such bills, but not one of them has passed and actually fixed the problem.

The latest bill on this subject was introduced by my colleague from Manicouagan in 2021. It was Bill C‑372, which passed at second reading and received the committee's unanimous approval. Unfortunately, it died on the Order Paper because a pointless election was called.

I said the passage of this bill would be a historic event. Fortunately, battles for pension funds are already being waged in the context of collective bargaining for unionized workers. This often causes conflict, because employers would like to make cuts to pension funds.

How many battles, strikes and disputes have hinged not only on pay, but also on pension funds? This is a difficult struggle for workers. Some workers have been left to fend for themselves after giving a company 30 or 40 years of their lives and contributing to a retirement fund. This kind of thing happens because we have never been aware of their reality or done enough to take a stand and fix the problem.

We have an important role to play as parliamentarians, because it is up to elected officials and the government to change things and bring in a safety net for our workers. The purpose of this bill is not to make pension plans priority creditors, but rather preferred creditors. The status of preferred creditor for wages is currently maintained in the event of bankruptcy.

I really must emphasize that there is no reason to hesitate. I often hear the Liberals say here in the House that they are there for the workers, that they will never let them down and that they want to protect their pension funds. Well, now is the time to walk the talk. Beyond the rhetoric, if they really want to protect workers, it is important to strengthen labour rights and protect pension funds in the event of insolvency or bankruptcy. That is what needs to be done. This should not even be a question.

It is also important to pass anti-scab legislation. Workers have been calling for this for years. It should have been brought in years ago. Labour disputes persist because, once again, employers under federal jurisdiction take advantage of the current situation to hire scabs, and this keeps the disputes going. One day, we are going to have to stand up for workers on this issue as well. It is time to stop consulting and start taking action.

Employment Insurance also needs to be reformed. The Canadian Labour Congress, the United Steelworkers and major labour organizations regularly come to the Hill to lobby to talk to parliamentarians about the reality of the working world today and to convince them to fix the situation. I do not even understand why the government is still dragging its feet on this.

The bill to protect retirement funds seeks to provide a guarantee in the event of misfortune such as an economic crisis, a recession or even a pandemic. In such situations, there are losses. In the case of Cliffs Natural Resources, even though the United Steelworkers managed to get a bit of money to the North Shore through legal means, pensions were still slashed by 9%.

A worker or retiree who is currently 80 is not going to go back to work. They end up using all of their savings just to survive. We cannot leave a single person in such a situation.

Canada is known for protecting basic rights and workers rights in the event of a bankruptcy. We have to protect their nest egg. I think it will be to our credit to adopt this bill unanimously. I want to acknowledge all the unions and every parliamentarian who decided to stand up and make this possible.

The House resumed from November 18 consideration of the motion 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 the third time and passed.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Madam Speaker, it is a pleasure to be here, or least to be with the House virtually. It is always an honour to rise on behalf of the good people of Central Okanagan—Similkameen—Nicola.

I would like to thank the member for Sarnia—Lambton for her leadership in this Parliament on this issue. God knows we need these issues brought up because, in some cases, the issue around pension reform and the need to resolve it is long standing and has happened over periods, not just of governments, but of decades.

We have two issues in this particular space when it relates to pensions. One is legacy pensions, which is broadly what we are dealing with today. The other one is new ones, meaning that fewer companies are deciding to use the standard defined benefit pension plan. I am just going to take a quick moment to share a few reasons why that is.

Obviously the business environment has changed. Technologies have come in. We have seen new business models operating that challenge the status quo and have created all sorts of issues for legacy businesses as technology continues to change things.

The government tried to deal with this by bringing in Bill C-27 in its first mandate, but that particular bill went nowhere because the government probably did not do its homework and got hung up over one particular area that people were contesting around conversion, the conversion of a defined benefit to a target pension plan.

The reason why I raise this issue is because the government has failed when it comes to addressing both legacy issues, as well as trying to invoke new methods for bringing in benefits, whether they be a target-based benefit or a defined benefit. If we want to see more people having secure retirements, then that is part of the solution. I do not think the government has done a very good job, which brings me back to legacy issues.

Defined benefit pensions, those are usually handled, most of the time, by the companies themselves. There is no legislation that says that when they are in a surplus position, who actually owns that. Is it the actual company or is it the pensioners or the current workers? That problem, unfortunately, does not happen that often because it is very seldom that these particular private, defined benefits are running at a surplus. In fact, it is the opposite.

We have seen cases such as Sears. I represent a riding that has a large percentage of seniors. They rely on that income. It breaks one's heart when one finds out that they are no longer going to be receiving the benefit they paid into.

There has been inaction on this by the Liberal government since it came into office, but I would not put it all on them. If we just look to those who are fortunate enough to have a pension program, and it is usually in the public sector, the answer has already been given by successive governments over the decades. If there is a shortfall, the taxpayer will fill that gap. However, for these private pensions, that has not been answered.

Unfortunately, we have seen recessions. We have seen where stock markets have been hit hard, in the early 2000s, obviously in the financial crisis in 2008-09, and the subsequent great recession, and now we are looking at where there is a lot of talk about a possible recession. This is the worst time to be bringing these things up.

When these issues happen, when scarcity is abound, this is where everyone tightens up and demands to have what they are owed. The member for Sarnia—Lambton has been trying, struggling through the process of a private member's bill, working through committee, to put a new balance in place that would at least address this.

We do have the Office of the Superintendent of Financial Institutions. Bill C-27 that I referred to earlier did talk about having more rules and oversight in place that would force new target benefits to come up with plans to bring themselves back into a surplus position when there is a drop.

That is really important because joint-sponsored pension plans often have these things where they will, on a temporary basis, cut some secondary benefits to smooth things out, and once the plan comes back into balance, then the regular benefits continue. Those kinds of tools, where a pension plan can smooth out those outflows to make sure there is always a plan to get back into surplus, work. It has been shown in joint-sponsored plans, and it could work in defined benefit programs as well, but the government has a responsibility to start the discussion.

Unfortunately, the government seems to have taken the opinion that, if one touches it, one has basically bought it. It has, so far, decided not to enter into this space since its retreat from Bill C-27. Again, this country deserves better. It deserves to have both certainty for the existing legacy pension plans out there in the federal space and, I believe, an overall discussion on provincial plans. So far, when it comes to that kind of discussion, successive ministers of finance, whether it be former minister Morneau, who is the minister no more, as I like to joke once in a while, or the current Minister of Finance, they have not made this a priority. Thus, this is where members of Parliament need to fill the gap.

The superpriority, although it is an essential process that has been pointed out by the Canadian public, where they feel that if the government cannot put in place a framework that assures them of that, then, by goodness, they should receive superpriority in the Bankruptcy and Insolvency Act at the very end. It is an option that will have trade-offs in the corporate side, where it will make it in some cases harder for corporations to receive financing for their bonds. However, in the absence of better leadership by the government, members of Parliament have been forced to do this.

It is terrible that we have a government in office that votes down, or I should say denies, unanimous consent. Members of Parliament wanted to see the superpriority component of this bill included. For the Liberal government to continually say no and use whatever tools it can just shows the government is completely opposed to anything in this space. That is lamentable because ultimately it is Canadians who do not have an assured pension, such as public servants or most of us, if we are vested, do.

I would encourage the government to come clean. I would encourage Canadians to talk to their members of Parliament. Most of all, I would encourage the government to start taking this issue seriously, put forward consultations with both provincial governments and the Canadian public on how it intends to deal with legacy issues if it is not going to go forward with the Bill C-228 provisions presented by the good member for Sarnia—Lambton.

I appreciate the opportunity to speak today and wish all of my colleagues a good day.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I want to begin by informing the House that Quebec is currently in mourning. We just learned of the death of Jean Lapointe, a great writer, composer, performer, actor and comedian who was very involved in society.

On behalf of the Bloc Québécois, I want to extend my sincere condolences to his son, Jean-Marie, to his family, friends and loved ones, and to all Quebeckers. We will remember him for his comedy shows and his songs. He used to say that we learn to live through song. Many of his acting roles had a profound effect on me. Take, for example, his role in the series Duplessis, where he did an extraordinary job of playing “Le Chef”, his roles in various films by my favourite filmmaker Marc-André Forcier, and the role he played in Les ordres. We pay tribute to his memory, his political commitment and the rehabilitation centre that bears his name.

Farewell Jean Lapointe, and thank you.

Let us now talk about the important Bill C-228

We are at third reading of this bill in the House of Commons. That is amazing. I want to sincerely congratulate the hon. member for Sarnia—Lambton for her masterful sponsorship of this bill and for managing to build consensus around a common goal. In committee, members of all parties contributed to the bill, including people like the hon. member for Elmwood—Transcona, who participated in the work and helped improve the bill.

In the House this afternoon, we are beginning third reading of a bill that will make a difference in people's lives, in the lives of workers and especially of the retirees who are entitled to these pensions.

As everyone has acknowledged, there have been several instances in recent decades when companies declared bankruptcy and their defined benefit pension funds were underfunded. That had a devastating impact on the company's retirees. They could no longer collect their full pension because the pension fund they were entitled to was underfunded.

In life, in a market economy based on supply and demand and capitalism, there are risks and bankruptcies occur. If a worker sees his company close and declare bankruptcy, it is a difficult situation, but that person will try to find another job and get on with their life.

What happens to pensioners? As the member for Sarnia—Lambton was saying, what happens to people who are 70 or 75 years old and depend on their pension when they suddenly learn that the company is bankrupt? The company has failed to meet its obligations and pensioners will no longer receive their pension, which is often the minimum amount required to live well or to survive. Those pensioners will no longer receive the full amount. They might lose half of their pension, for example, but they are too old and do not have the energy or the strength to return to work. These are terrible situations, unspeakable human tragedies. That is what Bill C‑228 would fix.

It truly is an extremely important bill. I am very pleased that it has reached third reading stage. I look forward to it receiving royal assent and making a real difference in people's lives.

I also want to acknowledge all the hard work done by my colleague from Manicouagan who was especially invested in this bill. She had introduced a similar bill in a previous Parliament that did not make it through the House. She continued trying, working with the member for Sarnia—Lambton, to see Bill C-228 through the legislative process.

My colleague from Manicouagan has been working closely with union members representing the workers who have gone through this kind of human problem. It was really a good faith, goodwill approach. What can we do to better protect workers? We know that a pension plan is a form of deferred wages.

During the negotiation, the union and management decide on salary and the terms and conditions. A lower salary is accepted in exchange for entitlement to group insurance or more generous pension funds, for example. The pension is therefore a type of deferred salary, and workers are entitled to it. However, we know that under the law, a company can underfund their pension fund for several years and allow shareholders to make more money on the backs of workers because it is failing in its duty.

This bill would make pension funds a greater priority for creditor payment in the event of a bankruptcy. This would take some of the pressure off the shoulders of workers and retired workers and would improve things. As the member for Sudbury said, if this bill is passed, it will not solve every problem. There is no ironclad guarantee and not everything will be resolved. The risk will remain, but it will not be as high. What this bill does is give particular consideration to underfunded pension funds and give them higher priority for creditor payment in the event of a bankruptcy.

One thing we observed in committee and in studies of similar bills was that none of the experts who came to talk to us, including unions, said they should be the top priority. Both pensioners and union members told us they want to give the company a chance to restructure, refinance and come up with a plan to save itself from bankruptcy.

This bill gives mortgage holders priority over pension funds. Everyone recognizes that that is important, although the Liberal Party still seems unsure. Some of our Standing Committee on Finance colleagues are, anyway. I have had personal conversations with a few ministers. Judging from the Liberal member's speech on this bill, there still seems to be some confusion about this.

This is about giving pension funds higher priority while still enabling the company to restructure to avoid bankruptcy. That is what everyone here wants, obviously. That is a very important element.

Several cases have been mentioned, including Sears, Stelco, Nortel, Cliff Natural Resources and White Birch. In all of those cases, the pension plan was not fully funded when the company went bankrupt and the workers are the ones who got shortchanged.

As the Liberal member for Sudbury was saying, pension fund managers, large corporations, or the employer, came to see us to say that they did not really like this. Obviously, they do not like this because they will have to fully fund the pension plans and recognize that the amount owed to workers must be included in the financial statements and paid within a few years, with the necessary flexibility. In my opinion, we found a good balance, but it means less money for shareholders and less money for executives simply because they are being forced to pay what they owe.

The Liberal member who spoke before me did not mention that. Every time the employer or pension fund managers raised an argument, the seniors' advocacy organizations and unions responded clearly and simply by proving that the argument did not hold water.

Employers tried to scare people. The Liberal Party still brings that up, but every argument raised in committee was immediately refuted by parties representing pensioners' interests. Fear tactics are often employed when economic issues and other somewhat complex issues come up. In this case, I think the committee did a good job of rebutting fear-based arguments.

I feel absolutely confident about this bill, but it does not fix every problem pensioners face. There is still a degree of risk, but it is lower. Employers do not like this because they know they will make less money. That is true, but they have to pay what they owe, plain and simple.

In closing, I want to once again acknowledge the incredible work of the member for Sarnia—Lambton. As I said, I am the member for Joliette, and the Quebec MNA for Joliette was Véronique Hivon, a person who was all about cross-party collaboration and always tried to prioritize the common good over partisanship. She accomplished a lot in that respect, and the member for Sarnia—Lambton has accomplished just as much here. I thank her and congratulate her.

[Viviane LaPointe, Liberal, Sudbury, ON]

Madam Speaker, I am pleased to participate in the debate on Bill C-228. We are studying this bill at third reading in the House after it was examined by the Standing Committee on Finance.

As reported back to the House by the committee, Bill C-228 would amend the treatment of pension claims in proceedings under the Bankruptcy and Insolvency Act, or BIA, and the Companies' Creditors Arrangement Act, the CCAA.

Under current law, unfunded pension liabilities and unpaid special payments are unsecured claims. Unfunded pension liabilities are the shortfall between a fund's current assets and amounts owed to pensioners. Pension special payments are additional contributions by employers that are sometimes required under pension legislation to reduce a pension deficit over time.

Bill C-228 would give both these pension claims a superpriority. In BIA bankruptcies and receiverships, pension claims would be paid out ahead of secured, preferred and unsecured claims. CCAA and BIA restructuring plans would need to provide for the payment of pension claims to obtain court approval.

As originally drafted, Bill C-228 provided for a five-year transition period before the pension changes took effect. The bill that was sent back to the House after study in committee provides for a four-year transition period, as proposed by the government members.

Bill C-228 would also amend the Pension Benefits Standards Act, 1985, or PBSA, under the responsibility of the Minister of Finance. The only PBSA amendment, as reported back by the committee, would amend the federal superintendent of financial institutions' existing requirement for an annual report to the Minister of Finance on the operation of the PBSA, which is tabled in Parliament. It would add additional content to this report related to the funding requirements of a federally regulated pension plan under the PBSA and require it to be transmitted to provincial counterparts.

I would note that Bill C-228, as referred to committee by the House, dealt with the treatment of both federal and provincial private pensions in insolvency proceedings under the Bankruptcy and Insolvency Act, or BIA; the Companies' Creditors Arrangement Act, or CCAA; and the regulation of federal pensions under the PBSA.

However, during the clause-by-clause study of Bill C-228, the committee broadened the scope of the bill beyond pensions by adding a new privileged claim for termination and severance pay owed to a worker by a bankrupt employer under the federal or provincial employment standards legislation or a collective agreement.

These amounts are currently considered unsecured debt. Under the amended Bill C-228, these debts would be paid in full before the claims of any other unsecured creditor.

The government clearly explained in the House and in committee that it understands the challenges that an employer's bankruptcy can present for retirees, current employees and their community. We continue to listen to the concerns expressed by Canadians on the important issues of retirement security, wage protection, and termination and severance pay.

Our government has taken measures to improve the retirement income and security of all Canadians, including retirees, and to improve the protection of Canadian workers who are owed unpaid wages and termination and severance pay by their bankrupt employers.

No one in the House doubts that Bill C-228 was introduced with good intentions in the interests of pensioners. Having said that, we should be mindful in our continuing debate on the bill that significant concerns were raised by expert witnesses and pension plan administrators during committee study that a superpriority for pension claims may have unintended negative consequences for both pensioners and employees of insolvent employers and the much larger number of pensioners and employees in the Canadian workplace as a whole.

We should also take serious note of the fact that the new preferred claim for termination and severance pay was introduced only during the committee's clause-by-clause consideration of the bill. As such, the committee did not have the benefit of the views of the House at second reading on this new priority claim. It also did not have the opportunity to hear the testimony of expert witnesses and ask questions regarding its potential impact on different employee groups, as well as other stakeholders and creditors in an insolvency proceeding.

Even though all members of the House share the desire of protecting the interests of retirees, we must also consider the significant negative consequences that a superpriority of the unfunded liabilities of a defined benefit pension plan could have for pensioners, employees, businesses and Canadian employers.

First, this superpriority can only protect pensioners from the consequences of the employer's bankruptcy in certain cases. We all know about past cases of bankruptcy where the pension plan deficits were very large, sometimes in the billions of dollars.

During study in committee of Bill C‑228 and similar private member bills, experts, lenders, promoters of pension plans and employers, and even certain unions, noted that a superpriority would not guarantee that pensioners would be fully protected in the event of an employer's bankruptcy if the employer did not have sufficient assets to cover the liability.

It is also crucial that we take note in our deliberations of the potential impact of a pension claim superpriority on the incentives of pension plan sponsors to continue to provide defined benefit pension plans to current employees. During the committee's study of the bill, pension plan experts and plan sponsors predicted that as many as 40% of private plan sponsors could terminate their defined benefit pension plans during the bill's transition period if Bill C-228 were to pass with a superpriority.

Private defined benefit pension plans currently have 1.2 million active employee members who are still accruing defined benefit pension entitlements. We should be very careful about the potential impact of a superpriority on these employees when we consider whether to support Bill C-228, as reported by the committee.

In some cases, retirees and workers are better served if the company can enter into a restructuring agreement and continue operations, which means pension and benefit plans would be funded.

Let us keep in mind that there have been successful restructurings involving unfunded pension liabilities that have taken place under the current processes in the Bankruptcy and Insolvency Act—including Stelco, AbitiBowater and Air Canada—where pension benefits were preserved even though the pension plans were significantly underfunded at the time of insolvency.

As we consider how to best protect pensioners and workers, we must also consider ways to balance the potential credit consequences of a pension superpriority for employers with pension plans. Lenders will price and allocate credit based on the risks of default and non-payment. If a pension deficit is payable ahead of all other claims, a responsible lender must take this risk into account, either through higher interest costs or reduced credit amounts.

The government made important changes to insolvency and corporate laws in 2019 to protect pensioner and worker interests in an employer insolvency. Corporate restructuring was made fairer, more transparent and more accessible for pensioners and workers. Federal corporate law amendments better aligned corporate incentives with the interests of workers and retirees, and provided greater scrutiny of corporate decision-making. Finally, Canada further improved its strong regulation of federal pension plans that already require full solvency funding.

While these measures have improved the retirement and security of employees, the government has also listened to the voices of pensioners and considered more balanced ways to protect their interests rather than a superpriority.

While no OECD country gives unfunded pension liabilities a superpriority—

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I am really pleased to have an opportunity to speak at this moment in the history of Bill C-228 and extend my deep appreciation to the member for Sarnia—Lambton. There have been many attempts in this place to ensure workers are secured creditors in bankruptcy. It should not be so hard. I will be voting for her bill with enthusiasm and merely want to thank her.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I want to sincerely commend all the work that the hon. member for Sarnia—Lambton has done on her private member's bill, Bill C‑228. As she so clearly explained again, it is a very important bill to better protect retirees who are entitled to a defined benefit package.

I want to commend her cross-party approach. We were able to work with members from each party and set aside partisan differences for the common good of workers and retirees. I tip my hat to the member.

Since this is a period for questions or comments, I will take the opportunity to make a comment. I tip my hat to the member. As she said, this issue has been raised so often in the House, and she is the one who finally managed, through her approach, to bring all the members of the House together to truly change people's lives.

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

moved that the bill be read the third time and passed.

Madam Speaker, I am very pleased to rise to speak to my private member's bill, Bill C-228, today at third reading. It was successfully passed as amended at the finance committee. Bill C-228 is centred on pension protection, working to prevent the loss of pensions for employees whose companies have declared bankruptcy.

Canadians deserve to know that the contributions they have made their whole lives will result in a secure financial future for themselves and their families, but the last few years have shown us that security can disappear in a moment. My bill would remedy this issue.

The bill 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. Finally, in the case of bankruptcy, pensions would be paid out ahead of large creditors and executive bonuses. The acceptance so far by this Parliament and the good work that has been done on the bill by all parties show that there is a common spirit and desire to improve pension security for Canadians. For that, the House has my sincere thanks.

Over the last 10 years, efforts by many parties and senators have been put forward to introduce bills to improve pension protection in Canada. I cherry-picked from all the ideas that were previously supported in the House and put them 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 live with is my goal here today.

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 and 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 the restructuring, Sears Canada faced heavy criticism for giving retention bonuses to 43 executives and senior managers, but 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 necessary funds for the company's pension plan, leaving more than 17,000 pensioners cheated of their full pensions.

Sears pensioners learned their pensions were going to be cut by 30%. Seventy-two-year-old Ron Husk of Mount Pearl, Newfoundland, 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 payment, but it made little difference overall. In today's era of extreme inflation, it is helping even less.

Looking back further, when the T. Eaton Company folded in 1999, the vast majority of its 24,500 employees were terminated without being paid termination pay and severance pay, as well as 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 cents on the dollar. There are several other noted cases where courts have ruled in 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’ Creditors Arrangement Act, also known as the CCAA. The court authorized Indalex to obtain debtor in possession, or DIP, financing, which would provide the company with loans to continue operating its businesses during the restructuring period. These DIP lenders had superior priority over the existing debt, equity and other claims.

At a hearing for approval of this motion in 2008, two groups of pension claimants opposed this distribution, asserting that the assets equal to the funding deficiencies in the two defined-benefit pension plans administered by Indalex were deemed to be held in trust and should be given to the pension plans in priority over the DIP lenders. The CCAA court ruled in favour of the DIP lenders, 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 House of Commons colleagues. Many MPs from all parties have come to see me to propose bills on this same topic.

Currently there is a requirement for an annual report on the solvency of a fund, but it goes to the superintendent of finance, and it is not clear what, if any, actions are taken. In fact from 2003 to 2020, there is evidence that companies continued to have insolvent pension funds. My bill would require this report to be tabled here for greater transparency and oversight. Currently the average federally managed fund is at 109% solvency, so it is a good time to implement the measures of this bill.

The second part of the bill is to allow companies with insolvent pension funds to transfer additional funds from other assets in the business into the pension fund, without tax implications, to make it solvent.

In October 2017 and again in 2020, the Bloc member for Manicouagan introduced her private member's bill, Bill C-253, which would amend the Bankruptcy and Insolvency Act and the CCAA. The bill would provide priority status for pensions in the event of bankruptcy proceedings. This bill 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 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 a mechanism to top up the fund and restore it to solvency. However, it was recommended to have several years for companies to get their funds in order before implementing the priority part.

Five years was the period suggested originally in the bill, but there were stakeholders who preferred to see it be three years. At committee, we were able to come to a compromise of four years for the coming into force of the priority portion of the bill. I want to also acknowledge that the Liberal member for Whitby sponsored an e-petition on pension protection, supporting this very issue.

My bill has been reviewed by a variety of stakeholders, from the Canadian Labour Congress to financial institutions and many pension associations nationally, 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...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 to me. 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 implementation schedule 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 within four years, it should indeed pay a higher interest rate to obtain credit because it really does present a higher risk.

In summary, this means reporting to Parliament on the solvency of funds for greater transparency so 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 pension they were promised.

An amendment was brought forward by the member for Elmwood—Transcona to include severance and termination pay at the same priority as pensions, ahead of secured creditors, and it was presented at finance committee. Indeed, discussions were held with all parties regarding this, and at second reading I said I would support this measure.

However, it was ruled out of scope by the clerk and the chair of the finance committee. The committee then voted in the majority to overturn the ruling of the chair and add this amendment to the bill.

Subsequently, the parliamentary secretary to the government House leader asked for a Speaker's ruling to eliminate the amendment since it was out of scope. The Speaker did rule it out of scope, and that amendment does not appear in the bill.

I respect the decision of the Speaker, although I am disappointed that this addition did not go forward, since I think people should receive their severance in the case of bankruptcy. However, with the priority falling after secured creditors, preferred creditors and unsecured creditors, it is unlikely they will get it, which contravenes the law in many provinces. In Ontario, for example, the law is that people get a minimum of one week of salary for every year of service.

Other amendments at committee included the deletion of clause 6, which eliminated a mechanism to get third party insurance on the insolvent portion of a pension fund. No one seemed to think this was as brilliant an idea as I originally thought. Clause 7 was also deleted to clean up sections 8.1 and 8.2, which were holdovers from previous legislation.

I want to thank everyone who helped to improve my bill at committee, and for passing it there expediently to bring it to this stage.

In summary, I am now asking all members of the House and the Senate to work to get this bill over the finish line and truly improve pension security for Canadians. We are so close. Let this 44th Parliament be the one to ensure that Canadians are able to live with dignity into their golden years.

Our continued efforts will ensure that Canadians are able to support themselves and their families with the pensions they have worked over a lifetime to earn. Please vote to support Bill C-228.

The House proceeded to the consideration of Bill C-228, An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985, as reported (with amendments) from the committee.

Amendment to Bill C-228 at Committee Stage

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

Madam Speaker, I appreciate the opportunity to raise this point of order. What I would like to do is just give a brief summary of the issue and give a couple of examples of parliamentary precedent that I think bear on the case and then propose a remedy.

This is with respect to Bill C-228. At committee, an amendment was moved to not only protect the pensions of workers when companies went bankrupt, but to also protect their termination and severance pay. It was an amendment that was agreed to by the bill's sponsor in advance of the second reading vote. It was ruled out of order by the committee chair. That was overturned by the committee itself. Subsequently, in response to a point of order by the member for Winnipeg North, that amendment protecting termination and severance pay was removed by the Speaker as being out of order.

There are a few examples in parliamentary history where amendments that were removed for the very same reason, which was that it was determined it was outside the scope of the bill, have been put back in with the unanimous consent of the House of Commons.

I refer specifically to June 17, 1986, when Speaker Bosley ruled three government motions in amendment at report stage of Bill C-106, at that time, were out of order because they went beyond the scope of the bill. The parliamentary secretary to the president of the Privy Council at that time asked Speaker Bosley whether the motions could be put to the House for unanimous consent. The Speaker agreed, and the amendment motions were reintroduced in the bill with the unanimous consent of the House.

Similarly, on April 28, 1992, the House was about to begin consideration at report stage of Bill C-54. The admissibility of three amendments to the bill, which had been adopted in committee, were called into question on a point of order. The three amendments were ruled out of order by the chairman of the committee, as two of the amendments sought to amend the parent act and a third, like these, went beyond the scope of the bill, but the chairman's decisions were overturned by the committee.

After hearing comments from other members, Speaker Fraser ruled immediately that the inadmissible amendments adopted by the committee to Bill C-54 be declared null and void and no longer form part of the bill as reported to the House. Right after the ruling, the amendments in question were agreed to by the House, once again, by unanimous consent.

I submitted these amendments again for report stage of the bill, which will begin tomorrow, so it is timely that I am raising this point of order now, with report stage of that bill pending for tomorrow, and—

Amendment to Bill C-228 at Committee Stage—Speaker's Ruling

[The Speaker, Liberal, Anthony Rota]

I am now prepared to rule on the point of order raised on November 14, 2022, by the parliamentary secretary to the government House leader regarding an amendment adopted by the Standing Committee on Finance during clause-by-clause consideration of Bill C-228, an act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Pension Benefits Standards Act, 1985.

In raising the point of order, the parliamentary secretary explained that the committee passed an amendment to protect termination and severance pay in case of bankruptcy. The chair of the committee ruled the amendment inadmissible on the grounds that it was beyond the scope of the bill. The decision was challenged and overturned. The committee then debated the amendment and adopted it.

According to the parliamentary secretary, this amendment broadens the scope and principle of the bill as agreed to at second reading. In addition, because the amendment introduces a new concept that was not contemplated at second reading, the parliamentary secretary argued that it should be removed from the version of the bill that will be considered at report stage and third reading.

However, the members for Niagara West and Sarnia—Lambton contended that decisions made by committees should not be overturned by the government of the day but allowed to stand in order to uphold their independence. For his part, the member for Elmwood—Transcona is of the view that the amendment should be allowed because the sponsor believed it to be relevant and it had also been referenced during debate at second reading.

After the report of the Standing Committee on Finance was presented to the House, the Chair was asked to ensure compliance with certain fundamental rules and practices and to consider if the committee had exceeded its powers with regard to an amendment included in its report. As Speaker Fraser explained on April 28, 1992, at page 9801 of the Debates:

When a bill is referred to a standing or legislative committee of the House, that committee is only empowered to adopt, amend or negative the clauses found in that piece of legislation and to report the bill to the House with or without amendments. The committee is restricted in its examination in a number of ways. It cannot…go beyond the scope of the bill as passed at second reading, and it cannot reach back to the parent act to make further amendments not contemplated in the bill no matter how tempting this may be.

The amendment at issue would create new clause 4.1 of the bill, which would protect the termination and severance pay that a bankrupt owes to various categories of its employees.

Bill C-228 is limited in scope. The summary of the bill at second reading states the following:

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.

The chair of the committee was right to conclude that the amendment is beyond the scope of the bill, as Bill C‑228 is intended to protect only employee pension funds and group insurance plans, not termination or severance pay for certain categories of employees in case of bankruptcy.

The Chair would like to remind members that the scope of a bill is not determined by its sponsor, by the government or even by the committee considering it, but by the House itself when it adopts the bill at second reading.

House of Commons Procedure and Practice, third edition, states the following on page 770: “An amendment to a bill that was referred to a committee after second reading is out of order if it is beyond the scope and principle of the bill.”

While the Chair recognizes that considering a bill at committee involves its share of challenges, committees must fulfill their mandate without exceeding their powers. Committees overstep the authority granted to them when they pass amendments that go beyond the scope of a bill referred to them after second reading.

In consequence, the Chair must rule the amendment adopted by the Standing Committee on Finance creating new clause 4.1 of Bill C-228 null and void, and order that it no longer form part of the bill that the committee reported to the House.

The Chair further orders a reprint of Bill C-228 so that the new version may be considered by the House at report stage.

I thank members for their attention.

Amendment to Bill C-228 at Committee Stage

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

Mr. Speaker, I am rising to follow up on the point of order that was raised earlier this week by the member for Winnipeg North in respect to Bill C-228.

The bill, presented by the member for Sarnia—Lambton, has to do with protection of pensions. The member forWinnipeg North highlighted that the finance committee had ruled a particular amendment having to do with the protection of severance and termination pay in the case of bankruptcy as being out of order.

I would like to call to the Speaker's attention, first of all, the fact that the committee did consider that question—

[Dean Allison, Conservative, Niagara West, ON]

Madam Speaker, with respect to the point of order that was raised earlier by the parliamentary secretary to the government House leader on the private member's bill, Bill C-228, let it be known that, when the amendment regarding severance was introduced, the chair ruled it out of order. The chair's ruling was then challenged and the majority of the committee voted to overturn the decision of the chair and to approve this amendment.

It is the Conservatives' opinion that the decisions of committees are not to be overruled by the government of the day. Therefore, as the Speaker considers the matter, we would ask that you uphold the independence of committees from outside control.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I rise on a point of order with respect to Bill C-228, an act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985, standing in the name of the member for Sarnia—Lambton.

Without commenting on the merits of the amendments proposed at the committee stage, I would like to draw to the attention of members an amendment that raises some procedural difficulties.

The amendment in question would add subparagraph 136(1)(d)(d.001) to the Bankruptcy and Insolvency Act. It is found in the new clause 4.1 of the bill. The amendment would seek to protect termination and severance pay in the case of a bankruptcy. This amendment, in my view, seeks to expand the scope and principle of the bill as set at second reading stage. Moreover, the amendment is a new concept that was not contemplated in the bill at second reading and therefore should be removed from the bill for consideration at report stage and third reading stage.

When the member for Elmwood—Transcona proposed the amendment, the chair of the committee ruled it inadmissible. For the benefit of members who do not sit on the finance committee, I will quote the ruling. It states:

My ruling is that Bill C-228 amends the Bankruptcy and Insolvency Act to provide for the solvency of pension funds in case of bankruptcy. The amendment seeks to create new categories of payments to specific former employees that would have to be paid by a bankrupt, which is not envisioned by the bill.

As House of Commons Procedure and Practice, third edition, states on page 770:

An amendment to a bill that was referred to committee after second reading is out of order if it is beyond the scope and principle of the bill.

In the opinion of the chair and for the above stated reason, the amendment brings a new concept that is beyond the scope of the bill, and therefore, I rule the amendment inadmissible.

A majority of the members on the finance committee voted to overturn the ruling of the chair and then proceeded to vote to adopt the amendment, which is now found in the bill as reprinted by the House on November 3.

I submit that the ruling of the chair of the finance committee was correct and that our procedures must be respected. As a result, the proper course of action to address this matter is to order a reprint of the bill without the offending amendment.

Finance

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Speaker, I have the honour to present, in both official languages, the seventh report of the Standing Committee on Finance in relation to Bill C-228, an act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985.

The committee has studied the bill and has decided to report the bill back to the House with amendments.

I would like to thank our finance committee clerks, Alexandre Roger and Carine Grand-Jean; legislative clerks Philippe Méla and Marie-Hélène Sauvé; committee assistant Lynda Gaudreault; all committee staff, interpreters, services, witnesses and officials; and all members of the finance committee.

[Andy Fillmore, Liberal, Halifax, NS]

They also stated that lenders would react to a superpriority that could take priority over existing loans by requiring employers to pay down their pension deficits. However, a transition period may not incentivize lenders and creditors to require employers to reduce pension deficits. It's also that lenders and creditors may use a transition period to reduce their exposure to potential loss by calling in loans and requiring the employer to pay down their debts ahead of the superpriority effective date. It's more likely that lenders would take such action with employers with large unfunded pension liabilities that are also at higher risk of insolvency as a result of business conditions or other financial distress, like high debt loads.

In such cases, debt repayment triggered by concerns over a pension superpriority would divert funds from potential investment by such employers, reducing their competitiveness and counterproductively increasing risks of insolvency for employers with pension deficits.

During FINA's study of the bill, pension experts and plan sponsors stated that a longer transition period, ideally seven to 10 years, could reduce the risk of these unintended consequences. It was also predicted that 40% of private pension plan sponsors could terminate their pension plans during the transition period if Bill C-228 were to pass. Private pension plans in Canada currently have 1.2 million active employee members still accruing pension entitlements.

We're reasonable on this side of the committee room. We've listened carefully to the testimony of witnesses who have different opinions and we've listened carefully to what our colleagues have said. Today, as you can refer to it in G-6 and G-7, we are looking to meet our esteemed colleagues halfway on the three to five, and propose a four-year transition period in the belief that this extra year will allow companies to reduce their deficits, renegotiate their loans with banks and reduce the risks of bankruptcies.

There we have it. The offer is four.

[Andy Fillmore, Liberal, Halifax, NS]

Chair, this is about the coming into force timeline. The current count is five years, but the bill proposes to reduce that down to three. Of course, as we heard from much of the testimony, the shorter transition period can have these unintended consequences as well. I might have called the pension priority the pension priority problem, but this is the short runway problem that we have here. The short runway increases the risk of loss to pensioners and active employee members of a defined benefit pension plan. The shorter period will exacerbate the negative economic consequences of Bill C-228 and in fact may have other unintended consequences that increase the risk of loss to pensioners and active employee members of defined-benefit pension plans.

Employers already in financial difficulty may be unable to reduce large pension deficits during the transition period. Pension legislation typically provides for at least five years of payments to reduce deficits, but lenders who face the risk of non-payment from borrowers with pension deficits when the superpriority comes into force may use the transition period to require employers to pay back debts instead of reducing deficits, increasing the risk of insolvency for some employers.

Employers may decide to discontinue defined benefit pension plans or group insurance plans during the transition period to avoid the impact of higher insolvency priorities on credit availability. Lenders with exposure to employers with pension deficits may pressure employers to take such action before insolvency.

Under the current pension funding regime, employers with pension deficits are required to make special payments to reduce them over time, typically three to five years, although pension regulators have discretion in some cases to change these timelines. However, employers with special payment obligations, particularly those with large pension deficits, that are also facing financial headwinds often have difficulty making the special payments, particularly if there have been severe market fluctuations or investment losses beyond the employer's control that have significantly increased the pension deficit.

We heard from witnesses at this committee representing retiree groups and unions that they prefer that the Bill C-228 superpriority take effect immediately upon royal assent. However, they also testified that they would accept a shorter transition period, asserting that a pension deficit superpriority would incentivize employers to reduce their pension deficits.

This is not a filibuster; it's almost over, I assure you.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

When the committee met with witnesses, we heard two diametrically opposed positions, just as the Standing Committee on Industry and Technology did when it studied a similar bill. On one hand, pension fund managers and employers expressed the view we just heard from the honourable parliamentary secretary; they were concerned about certain risks. On the other hand, seniors groups, unions and workers argued that those risks were completely unreasonable and cited examples to refute each one.

We heard two conflicting perspectives. My party is the one that stands up for seniors and unions. Do I think Bill C-228, as it's currently worded, poses serious risks to defined benefit pension plans or puts businesses in jeopardy? No, not at all. Workers and unionized employees care more about keeping their jobs than about being higher on the creditor payment list when a company is winding up. That is why, with all due respect, an amendment like this is unnecessary.

Witnesses representing seniors and unions assured the committee that that was the case. In my view, that's final.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

My ruling is that Bill C-228 amends the Bankruptcy and Insolvency Act to provide for the solvency of pension funds in case of bankruptcy. The amendment seeks to create new categories of payments to specific former employees that would have to be paid by a bankrupt, which is not envisioned by the bill.

As House of Commons Procedure and Practice, third edition, states on page 770:

An amendment to a bill that was referred to committee after second reading is out of order if it is beyond the scope and principle of the bill.

In the opinion of the chair and for the above stated reason, the amendment brings a new concept that is beyond the scope of the bill, and therefore, I rule the amendment inadmissible.

This does now allow for debate.

MP Blaikie, go ahead for a short comment.

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order.

Welcome to meeting 65 of the House of Commons Standing Committee on Finance.

Pursuant to the House order of reference adopted on Wednesday, June 22, 2022, and pursuant to the motion adopted by the committee on Wednesday, October 19, 2022, the committee is meeting to proceed with clause-by-clause consideration of Bill C-228, an act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Pension Benefits Standards Act, 1985

Today's meeting is taking place in a hybrid format pursuant to the House order of June 23, 2022. Members are attending in person in the room and remotely using the Zoom application.

I would like to make a few comments for the benefit of witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your microphone, and please mute your mike when you are not speaking.

There is interpretation. For those on Zoom, you have the choice at the bottom of your screen of floor, English or French. Those in the room can use the earpiece and select the desired channel.

I remind everyone that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as well as we can. We appreciate your patience and understanding in this regard.

I would now like to welcome our witnesses, who will help us with the clause-by-clause consideration of Bill C-228.

I wish to inform the committee that we have four witnesses with us. We did test them all. One is not able to participate since the testing could not go through. We do have one who has been tested and who is wearing a different headset, but I guess the audio does work and the interpreters are good with it. We will continue with that individual.

With us today, from the Department of Finance, we have Neil Mackinnon, who is the senior adviser, financial sector policy branch. From the Department of Industry, we have Martin Simard, who is the acting director general, marketplace framework policy branch; and Paul Morrison, manager of corporate, insolvency and competition directorate.

Pursuant to Standing Order 75(1), consideration of clause 1, the short title, is postponed.

Members, before we move to clause 2, following the advice of the legislative clerk, it would be better to go directly to the amendments that create new clause 4.1: NDP-1 first and then amendment G-3. The rationale for doing this is that G-1 refers to new paragraph 136(1)(d.001), created by amendment G-3, and amendment G-2 refers to new paragraph 60(1.5)(a.1), created by G-1.

We would need unanimous consent to do so. If members want further explanation on that, we do have the legislative clerk, Philippe Méla, with us today to explain.

Members, I'm just seeing if we have unanimous consent.

[The Chair, Liberal, Peter Fonseca]

Thank you, members. It has been adopted.

Also, for Bill C-228 the clerk has requested that our independent member is to submit any amendments in both official languages no later than 6 p.m. on Thursday, October 27, 2022. If everyone is okay with that, we will follow the same deadline, so get any amendments in by this Thursday at 6 p.m., please.

Is everybody okay with that? Terrific.

I would now like to welcome our witnesses.

From the Canadian Centre for Policy Alternatives, we have David Macdonald, senior economist. He is coming to us via video conference.

From the Canadian Chamber of Commerce, we have Alla Drigola Birk, senior director of parliamentary affairs and small and medium enterprises policy, and Alex Gray, senior director of fiscal and financial services policy.

From the Canadian Federation of Agriculture, we have Keith Currie, first vice-president, and Scott Ross, executive director.

From the Canadian Federation of Independent Business, we have Daniel Kelly, president and chief executive officer.

From Équiterre, we have Marc-André Viau, director of government relations.

Finally, from S.U.C.C.E.S.S., we have Queenie Choo, chief executive officer, who is with us via video conference.

With that, witnesses will have up to five minutes for opening remarks. We will start from the top with the Canadian Centre for Policy Alternatives.

You have five minutes.

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

Let me talk a bit about the calendar date for coming into force.

For the benefit of committee members and those who weren't here the other day, we heard there's a problem with the legislation in terms of picking a calendar day for the coming into force of Bill C-228. There was concern that, if there were companies going through bankruptcy proceedings, they would have to switch measures halfway through. I've consulted with the legislative clerk and she has verified that this is not the case. The coming into force means.... Only bankruptcy proceedings that start after the coming into force would be under the new measures. I just wanted the committee members to know that.

We also heard department officials say that federally managed pensions had five years to get solvent. Mr. Powell, you had some data that suggested they've been insolvent for more than five years. Can you comment?

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

Thank you, Chair.

Thank you again to our witnesses.

Mr. Powell, one of the mechanisms in Bill C-228 is the ability for a company that has an insolvent fund to transfer money into it without any tax implication, so they can basically top it up and fix it. You mentioned the Stelco situation and that what actually helped there to get the pensioners their pension was a revenue flow into their funds. Can you describe what happened there?

[Michael Powell]

I'm sorry. I had a lot to go through, so I was speaking quickly.

In 2005, the Wage Earner Protection Program Act was passed, and the wage earner protection program gave superpriority to unpaid wages, unpaid expenses and some other things. The issue is that.... If you make something a superpriority, what happens? The quote I had was from the Insolvency Institute of Canada, but you can find quotes from other similar organizations. Their quote was, “there could be a significant negative impact on Canadian productivity and employment since businesses...will have a tougher time getting financing, and their costs could rise dramatically.”

We've heard that today about Bill C-228, but nobody has provided any data that anything bad happened after WEPP. If it was that draconian, if the financial armageddon was going to occur, we should have data. These are things that people monitor.

[Andrea Boctor]

Mr. Lawrence, maybe I could answer on behalf of the ACPM.

We did poll our members. Some of Canada's largest defined benefit pension plan sponsors are included in that group. We asked them this: If Bill C-228 made their access to capital more expensive, what would they do? Over 40% of them said they would wind up their defined benefit pension plan. That is based on our membership. Anecdotally, I can tell you that it is backed up with the conversations I'm having. I cannot think of a more direct way of killing defined benefit pension plans in the private sector.

[Nicolas Lapierre]

As I said, Bill C‑228 is the result of work and consensus. This was also the case last year for the one presented by Ms. Gill, but I will focus on this one. We spent three years meeting with you in Ottawa. I won't name them, but some parties were extremely concerned that we were initially going to come before the banks. The number one argument from all the members who saw this as a problem was that it would prevent business recovery and investment. We have listened to you and we agree with you. It was difficult to reach a consensus on this bill, but we have reached it and we are satisfied with the bill. The work is done, there has been ample debate and we have all the ingredients to quickly resolve the situation and show Canadians that we care about their financial health.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you very much, that's very clear.

Basically, when workers negotiate their collective agreement, they either ask for a bigger hourly or annual wage, or they take a pay cut to get a better pension. If the company goes bankrupt and they have decided to take higher wages, they may not get their final paycheques; if they have made the trade-off of taking lower wages to get a better pension, the pension will be underfunded by the company, because the current law allows it. The company will tell their employees that it's legal and it's okay for them to lose 20% to 30% of their pension, as you were saying earlier.

What are your comments on the current situation, and on what Bill C‑228 does in fact solve, concretely, for pensioners?

[Michael Powell]

Yes, we actually got involved with the House of Commons committee petition that Ryan Turnbull sponsored. There were 12,332 Canadians who signed on, saying that pension protection was important to them.

We've also, at CFP, run some email campaigns, the most recent in support of Bill C-228. We had just under 7,000 Canadians from coast to coast to coast sign that. What I found most impressive—and if you've tried to do email campaigns, so you'll understand this—is that well over 50% of the people who used our email tool checked the box saying that they would like to be engaged further on this issue. To have a mailing list of 3,600 people who want to fight for your particular issue.... That is powerful.

[Chris Roberts]

Yes.

Again, there is just some confusion over the terms, the unspecified or undefined terms, in this portion of Bill C-228. For the purpose of clarity, and for the purposes of precision and simplicity, it is best to just eliminate those aspects, so yes, we'd agree.

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

Thank you, Mr. Chair.

Thank you to all the witnesses who are here.

I want to assure Monsieur Lapierre that the priority that is assigned in Bill C-228 is exactly that which was put into Bill C-253 by my Bloc colleague, Marilène Gill. It is before banks, secured creditors, preferred creditors and unsecured creditors.

I only have six minutes, so I am going to ask some quick questions.

My first question is for Mr. VanGorder.

Do you agree with the priority that we've assigned to pensions in Bill C-228?

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Lapierre.

To all the witnesses, thank you for your opening remarks.

We are going to move to our rounds of questions. In our first round, witnesses and members, it will be equal time for all the parties, which is six minutes. We are starting with the Conservatives, and we do have with us today MP Gladu, who is the author of Bill C-228.

MP Gladu, go ahead.

[Nicolas Lapierre, Area Coordinator, United Steelworkers]

Thank you very much, Mr. Chair.

Good evening to all the members of the committee, and thank you for your attention.

The United Steelworkers union represents 225,000 workers across Canada, 60,000 in the province of Quebec alone.

In 2017, 2018 and 2019, the USW met with more than 250 members of Parliament and senators to raise awareness of the need to amend the Companies' Creditors Arrangement Act and the Bankruptcy and Insolvency Act. For six weeks, more than 30 activists were on the Hill to raise awareness. They discussed the discussions and problems that arise when a company declares bankruptcy or goes into receivership.

The most striking example was Cliffs Natural Resources, a North Shore-based mining company, which placed itself under creditor protection. As a result, 1,700 retired workers and surviving spouses have seen their pension benefits reduced by 21% to 25%. As a result of various legal actions, several million dollars were recovered. Nevertheless, pensioners and surviving spouses suffered a loss of 8% to 10%. For some, this represented about $200 less per month, while for others, the loss was $600 to $700 per month. It is also important to understand that most private plans do not provide for cost-of-living adjustments. In the case of someone who retired in the 1980s, for example, because their benefits were not indexed, the impact of the reduction in 2015 was even greater.

During the six weeks of lobbying, we listened to you. I personally participated in the discussions. We were sensitive to some of the arguments, one of which was that it might prevent business recovery or prevent banks from granting loans to businesses. We were sensitive to that argument and we changed our position accordingly. Bill C‑228 proposed by MP Marilyn Gladu provides for just such a change in the order of priority of creditor claims. We would come right after the banks. So the argument that we were going to prevent companies from recovering no longer holds water. We have responded to some political parties who had a concern in this regard. Now, Bill C‑228 puts us behind the banks, but ahead of school boards and municipalities that want to collect taxes. So it's a significant leap for us and a very structuring gain for workers.

By the way, this would be a step forward not only for unionized workers, but also for non-unionized workers who have a defined benefit plan.

At the United Steelworkers, we believe that, as legislators, you have a role to protect Canadian citizens from a possible loss of income if a company seeks protection from its creditors.

I appeal to your sense of responsibility, your empathy, your concern for human beings, especially those in their 70s, 80s or 90s. These are human beings who are in distress. Canadian citizens voted for you because they had confidence in you to fulfil your role as legislator. It is now up to you to take advantage of this bill to say that enough is enough. This has been going on for decades. Several bills have been tabled. Moreover, Bill C‑228is the result of a consensus among all political parties.

In fact, I remind you that in 2021, there was consensus in the committee studying the previous bill. Unfortunately, an election was called, so we didn't get there, but we were very close. But there was a consensus and we did what you wanted. You were concerned that pensioners were coming before the banks. Now they come after the banks, but at least they are ahead of the municipalities. Bill C‑228 reflects a difficult consensus that takes your concerns into account. Banks come before us and pensioners come after.

Currently, we are picking up the breadcrumbs, picking up what is left, and that is not acceptable. If pensioners were to make a significant jump in the order of creditors, it would be a giant step for all workers, for all Canadians. Please, for the sake of our seniors, be diligent and put some water in your wine. Bill C‑228 is not perfect, but it is a very acceptable consensus as well as a giant step forward for workers.

I could name several situations, among them Cliffs Natural Resources, Sears in 2018, Mabe Canada, White Birch or Atlas Stainless Steel. How many similar situations will it take before we act?

I appeal to your sense of responsibility to citizens and your duty of care, and I ask you to endorse Bill C‑228 quickly, so that we can say once and for all that we have helped the middle class.

Thank you very much.

[Siobhan Vipond, Executive Vice-President, Canadian Labour Congress]

Thank you, Mr. Chair. Hello to you and all the committee members. Thank you for this opportunity to appear in front of you.

My name is Siobhán Vipond, and I'm the executive vice-president of the Canadian Labour Congress, Canada's largest central labour body. We, as Canada's unions, advocate on national issues on behalf of all workers from coast to coast to coast.

Pensions are essential to the financial security and well-being of working people. Canadian research shows that income from an employer pension plan can make the difference between financial security in retirement and a decline in living standards, compared to pre-retirement levels. Next to their homes, pension savings are one of the most important pools of assets that workers accumulate over their lifetimes.

It’s important to remember that workplace pensions are not gifts from employers. Pension benefits are deferred wages. Pensions are earned and paid for by workers, and workers depend on that money being there for them when they retire. Employers are legally obligated to provide those pensions when a worker retires. It is frustrating and unjust that this legal obligation can be torn up when a company enters insolvency.

When a company enters insolvency proceedings, workers and pensioners go to the back of the line. They are essentially treated like involuntary unsecured creditors of the firm, behind the banks and the secured creditors. No one asked workers and plan members if they would lend the value of their pension benefits to their employer. It's quite the opposite. Plan members trust that their employer will live up to the terms of the pension bargain.

Unlike commercial creditors, employees and pensioners are generally unable to protect themselves against the risk of their employer’s insolvency. If their previous employer enters bankruptcy, pensioners cannot easily return to work and find new and additional sources of income.

In 2018, Sears Canada pensioners outside Ontario learned that their pension benefits would be reduced by 30%. One Sears retiree in Calgary—which happens to be my hometown—who had worked for 44 years took a monthly pension cut of $800 a month. After a lifetime of work and a lifetime of pension contributions, his pension was slashed in retirement.

Another retiree, who had worked for 35 years, saw his pension drop by $450. In anticipation of benefit reductions, this 72-year-old pensioner took a job at Home Depot as a greeter. For many others, taking a minimum-wage job to make up for pension reductions is not a realistic option, nor should it be an expectation.

The way pensions and benefits are treated in insolvency is outrageous and unfair. Despite this, the government has not taken steps to extend protections to pensioners and plan members.

The government’s legislated changes in response to the Sears Canada debacle were woefully inadequate. In 2019, Bill C-97 made minor changes around the edges of the problem. None of these legislated changes would have prevented another Sears Canada, or the pain and suffering it caused for Sears pensioners.

This is especially frustrating since the evidence shows that many companies with underfunded pension plans could eliminate the solvency deficiencies of their plans by allocating just a portion of their shareholders' payouts to the pension plan. Studies show that many firms consciously choose to reward shareholders and senior executives, boosting the stock prices, rather than fully funding their pension plans. This leaves pensioners and plan members at risk if the company becomes insolvent.

Over the years, we at the CLC have supported numerous NDP and Bloc members' bills. None of these bills have been allowed to proceed. For years, we have urged governments to put in place national mandatory pension insurance akin to the Ontario pension benefits guarantee fund. We have been unable to get traction on this idea.

The CLC supports the passage of the revised Bill C-228, and we support the bill’s proposed changes to the CCAA and BIA. The proposed amendments to the Pension Benefits Standards Act are not well conceived and should be deleted from Bill C-228 in their entirety.

We will be very happy to answer any questions you may have. At the centre of this issue are the workers and pensioners across this country.

Thank you for your attention.

[Michael Powell, President, Canadian Federation of Pensioners]

Thank you.

We've submitted the specific changes we believe need to be made to Bill C-228, so I won't discuss those here.

I will be talking about some of the points included in the submission that we made supported by CFP and five other leading Canadians seniors' advocacy organizations.

The fundamental challenge for this committee is to choose between the status quo and extending superpriority in insolvency to the unfunded pension liability. We know the status quo, the intended consequences. We've heard of the personal stories and tragedies of those impacted. CFP estimates that since 1982, 250,000 vulnerable Canadian seniors have had their income reduced for the rest of their lives.

We've all heard the unintended consequences. Here is a quote that I have: “there could be a significant negative impact on Canadian productivity and employment since businesses...will have a tougher time getting financing, and their costs could rise dramatically.” If true, those consequences would have a significant impact on the Canadian economy, a measurable impact. That's why I don't understand why we're having this discussion. That quote is from the 2005 committee review of Bill C-55, the Wage Earner Protection Program Act.

WEPP extended superpriority to unpaid wages and other items in insolvency and was passed in 2005. Note that WEPP impacts every insolvency; extending superpriority to the unfunded pension liability would only impact the relatively small and declining number of companies with defined benefit pensions. Where are the binders of evidence of Canada's poor economic performance versus competitors since 2005? If these charges were true, we should be towards the bottom in GDP growth, at the top in unemployment, at the top in companies filing for insolvency, and at the top in liquidations. Where is the data?

The reality is that superpriority would simply put a price on abandoning pensions in insolvency. Today, the minute a company files, the pension deficit disappears like a puff of smoke.

Be honest: Knowing there's no penalty for underfunding a pension and no obligation that survives insolvency, what CEO is going to fully fund their pension? Allocating funds to the pension instead of, for example, dividends, when not legally required, would get you fired. As Mr. Schaan said on Monday, companies only do what is required. Another comment from Monday said that federally regulated pensions are not required to be 100% solvency funded, at least not as I understand the term “required”.

Statistics support this. From 2012 to 2020, on average, 73% of federally regulated plans were under 100% solvency; that's not required. As mentioned on Monday, the 2021 median funding was 109%, which means today is the time to act, because when that gap is small to get to full funding and many plans are fully funded, then companies can de-risk their pension and pose no threat to lenders going in the future.

We also know that companies are going to regulators and looking for contribution holidays, looking to reduce those solvency levels. Now is the time to step in and stop that. If you change the rules, corporate behaviour will change.

This was the case with Air Canada. At the time of its insolvency in 2003, Air Canada had a $1.3-billion pension deficit. Under ministry monitoring, by 2013 that deficit ballooned to $4.2 billion. In 2013, the finance minister at the time, Jim Flaherty, agreed to further relief, subject to restrictions until the pension was fully funded. Executive compensation increases, special bonuses, and other incentive plans were curtailed. The airline was prevented from paying dividends and buying back stock. With those restrictions in place, that pension was fully funded by May 2015. Monitor, and companies do what is required; change the rules, and behaviour will change.

In Canada, we have two levels of legislation, and pensions get whipsawed between them. We have insolvency legislation, and underneath it 11 different pension benefit acts.

ACPM—they're not unique, but they're here so I'm going to use them as an example—argue that pensions shouldn't be protected in insolvency, that insolvency is not the place, yet they advocate for the removal of solvency requirements in pension regulations. The most recent one I know of was in Saskatchewan a couple of years ago. It's online and you can find it. We know that anything less than 100% solvency funding increases the risk to pensioners. It leaves pensioners as acceptable collateral damage in insolvency.

Since 2005, proposed solutions from governments and the greater pension industry have all been based on shifting risk from the companies that willingly accepted the obligation to the pensioners without obtaining the pensioners' informed consent. This is the very definition of elder financial abuse.

Superpriority would at least partly address the power imbalance in insolvency.

This committee will determine whether to continue the status quo or to protect vulnerable Canadian seniors.

Thank you.

[Alex Gray, Senior Director, Fiscal and Financial Services Policy, Canadian Chamber of Commerce]

Good evening.

Thank you for having me here. I appreciate the opportunity to appear before this committee today.

Improving retirement security for pension plan members is a laudable goal, yet as Canadians continue to have concerns about their financial security in retirement, it is essential that Parliament not address this challenge in a manner that would negatively affect Canadian businesses, especially those that sponsor DB plans.

The legislative mechanisms proposed in Bill C-228 would impose material and adverse consequences on Canadian businesses of all sizes. I'll begin by discussing some of these unintended consequences. To end my remarks, I'll propose solutions that would protect retirement security without burdening the Canadian economy.

To start, Bill C-228 would increase the cost of credit for Canadian businesses that offer DB plans. Struggling companies would have greater difficulty securing loans, thereby undermining a core objective of insolvency legislation: to encourage successful restructurings that allow companies to continue employing Canadians, thereby mitigating the social and economic consequences of liquidations. Additionally, DB plan sponsors would reassess continuing to offer DB plans, thereby harming retirement security across the country.

As we prepare to enter unquestionably turbulent economic times, I must underscore that economic recovery depends on businesses' ability to access affordable credit so they can invest and grow. Bill C-228 would also force lenders to require more collateral and restrict companies' abilities to draw down credit facilities should a pension insolvency come into question. This is because financial institutions ensure systemic stability in part by accurately maintaining prudential regulatory requirements to prevent lending losses. At best, increasing the cost of doing business would impose a competitive disadvantage on Canadian companies that provide DB plans to their employees relative to their non-Canadian competitors. At worst, lenders could refuse to lend to said companies.

Additionally, Bill C-228 would increase the cost of doing business in Canada by imposing more stringent reporting requirements on companies maintaining DB plans. This is because creditors would face challenges in determining exposure to pension deficiencies. In the end, lenders would find themselves unable to make real-time credit decisions because solvency deficiencies are ultimately forecasts based on factors over which lenders have no control. I believe it would behoove the committee to hear from members of the lending community during this study.

I must also stress the consequences of imposing Bill C-228 on a timeline shorter than seven years. Minimizing the fallout for businesses would require considering the length of typical bargaining periods, generally three to five years, and pension plan valuation cycles, generally three years, as well as relevant notice periods to plan members on plan reforms, generally two years.

Those businesses that would need to move to defined contribution pension plans as a result of this legislation would incur significant costs. In such a scenario, DB plan members who are close to retirement would also need a great deal of time to settle with their employers. Additionally, any coming into force date should consider the progress of insolvency proceedings cycles, rather than the current approach of being imposed on a particular calendar date.

By way of providing constructive solutions to providing retirement income that would not burden Canadian businesses, which already operate in a time of economic precarity, the Canadian Chamber of Commerce would encourage amending the BIA and CCAA to allow for the appointment of pension insolvency trustees to wind down insolvent employers' pension plans. Said trustees would have the authority to maximize available pension dollars. This model, as has previously been mentioned, has been successfully deployed in Stelco pension plan members' receipt of full pension payments.

Another solution the government could study is paving the way for large multi-employer pension plans to subsume smaller pension plans from insolvent companies in order to leverage economies of scale. A pension insolvency trustee could also be empowered to merge insolvent company plans where deemed appropriate.

Upsetting the order of priority in insolvencies would impose adverse and unintended economic consequences across the economy, especially absent a broader consideration of Canada's insolvency legislative framework. Ultimately, the best solution for pensioners and employees of a distressed company is to encourage successful restructuring so that it can keep paying salaries and making contributions to its pension plan. If passed, Bill C-228 would discourage this universally desirable outcome, despite its merits and despite its laudable intent.

Thank you. I look forward to your questions.

[Bill VanGorder, Chief Operating Officer and Chief Policy Officer, Canadian Association of Retired Persons]

Thank you, Mr. Chairman and members of the committee, for this opportunity to speak to you today on Bill C-228.

My name is Bill VanGorder. I'm the chief operating officer of CARP, which is also known as the Canadian Association of Retired Persons. We're a national, non-partisan and not-for-profit organization that advocates for financial security, protection from ageism and improved health care for Canadians as they age. We have over 330,000 paid members in 30 chapters across Canada.

CARP seeks to play an active role in the creation of policy and legislation that impact older Canadians. CARP advocates on behalf of older Canadians at all levels of government and collaborates with other organizations on health, ageism, housing and financial issues, such as the issue we are on today.

CARP has been fighting for the protection of pensioners for over 20 years. When we created the Nova Scotia chapter of CARP, which I was involved in 20 years ago, one of the first planks in our policy platform was this issue. Our first board of directors had members of the Air Canada pensioners association, whose lives had been severely impacted by the Air Canada insolvency at that time. Pension protection continues to be one of CARP's seven advocacy priorities in 2022-23.

We have 330,000 paid members of CARP across Canada and we survey them on a regular basis. Their financial security continues to be their number one concern. They're all concerned about health, as all of us are, but certainly, their number one concern is whether or not they're going to have enough money to live on for the rest of their lives. Seniors are anxious that they're just not going to be able to do that.

Frankly, our members can't believe that after 20 years of advocacy, the current legislation allows the assets of a bankrupt or insolvent company to be divided among other secured creditors such as banks, the CRA and others, but doesn't move pensioners closer to the front of the line to improve their likelihood of receiving their full pension—a pension they've earned and planned for throughout their working careers. These aren't gifts or unearned benefits, but deferred wages that are earned by Canadians while they work and payable to them when they retire.

The changes that were made in the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act back in 2018 weren't enough. The current law is still unfair to older Canadians.

Inflation is anywhere from 5% to 7%. Food prices alone are up as much as 30%. The inequities across the country have to be addressed, and they have to be addressed now. These are changes that should have been made 20 years ago. Older Canadians are demanding action now. You know, if you're 80 years old and people tell you you have to wait three or four years for something to happen, that just doesn't wash.

CARP recommends actions that would protect pension investments with insurance policies that insure 100% of pension liabilities, and would ensure protection of seniors by amending the act to give pensioners priority status.

I'm not going to take your time by repeating the content of the letter that we and the other pensioners and seniors organizations sent you on September 21. I have other, more expert people in finance who are going to speak later from our group. CARP does want to emphasize that changes in Canada's laws must give underfunded pensions priority over large predators and halt the payout of executive bonuses in bankruptcy and insolvency issues.

The cases of Air Canada, Sears in 2017 and Nortel in 2009 are strikingly unfortunate examples of how tens of thousands of retirees are treated in bankruptcy and insolvency proceedings compared to secured financial lenders such as banks, bondholders and other stakeholders.

Protection of the financial security of older Canadian workers should be the absolute priority of this committee and the Parliament of Canada.

Thank you on behalf of the thousands of CARP members across the country who are looking for action today.

[Ross Dunlop, Executive Vice-President, Ellement Consulting Group, Association of Canadian Pension Management]

Thank you, Ric.

Good afternoon, everybody.

There is no other organization in Canada that has done more work promoting retirement security for plan members than ACPM, while at the same time creating an environment where plan sponsors continue to offer pension plans.

ACPM clearly understands the unfortunate situation when a plan sponsor fails and plan members might not receive 100% of their benefit entitlement. Providing secure benefits to plan members is something ACPM has been working on for decades.

ACPM believes that DB pension plans are very valuable benefits for plan members, but we need to recognize that employers choose voluntarily to create and support these plans. Pension plan coverage—particularly defined benefit—has declined in Canada fairly precipitously over the last number of years. Public sector DB plan membership in Canada—this is from StatsCan—was about 82% 20 years ago. It's 82% today. Twenty years ago, private sector DB plan membership was about 21%. Currently, it's around 9%. It's the 9% we're talking about today. That's the worry at ACPM: the deterioration of the 9%.

Our specific concerns relate to the fact that employers need credit and loans to operate, and that banks and bond holders will not lend, or charge significantly higher interest rates, if they are subordinate to pension plans. This will incent board CEOs and CFOs to terminate pension plans that are subject to this legislation. Even those employers who would never find themselves in a bankruptcy situation will be incented to terminate these plans and wind them up.

Although Bill C-228 has the admirable goal of giving priority to plan members in the event of a bankruptcy, we believe what will happen is that plans will be terminated. Bill C-228 would apply to very few plans, because those plans will have been wound up.

At this point, I'm going to hand things over to my colleague Andrea Boctor.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

The clerk has just emailed you the motion I want to make. If you need time to study it and discuss it, just let me know, but I don't think it's a problem. The motion reads as follows:

That, for its study of Bill C‑228, in the interest of concision and efficiency, the committee consider all the evidence and documents gathered by the Standing Committee on Industry, Science and Technology during the 2nd Session of the 43rd Parliament as part of its study of Bill C‑253.

You may recall that a bill similar to Bill C‑228 had been tabled and that the Standing Committee on Industry, Science and Technology had studied this issue thoroughly. Our committee should consider everything that was done by the previous committee on Bill C‑253.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Chair, I would like to make the following motion regarding the committee's work on Bill C‑228...

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

Thank you very much for that, on both counts, Mr. Chair.

You may recall that, at that time, I moved a motion with respect to how to dispense with Bill C-228. It's a little bit stale, given that we're hearing from witnesses today—which is wonderful, and I'm very glad to have them here—but I wonder if I might have unanimous consent from the committee to replace that motion that was on the table with the following, and perhaps we could pass it swiftly: that the committee dedicate the meetings of October 24 and 26 to pre-budget consultation hearings and dispense with clause-by-clause consideration of Bill C-228 on Monday, October 31.

I'm happy to motivate that, if you'd like, Mr. Chair. I think it speaks for itself in the context of the last day's discussion. If there are any questions, I'm happy to answer them, but if folks around the table are comfortable with that, then we could perhaps proceed to the decision.

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order.

Welcome to meeting number 62 of the House of Commons Standing Committee on Finance.

Pursuant to the House order of reference adopted on Wednesday, June 22, 2022, the committee is meeting to discuss Bill C-228, an act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985.

Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Members are attending in person in the room and remotely using the Zoom application.

I would like to make a few comments for the benefit of the witnesses and members.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. With regard to interpretation for those on Zoom, you have the choice, at the bottom of your screen, of floor, English or French. Those in the room can use the earpiece and select the desired channel.

I will remind you that all comments should be addressed through the chair. Members in the room, if you wish to speak, please raise your hand. Members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as well as we can. We appreciate your patience and understanding in this regard.

Members, before we move on to the election of the vice-chair, on the collective behalf of the finance committee, we would like to thank and take this opportunity to pay our respects and tribute to our friend and former colleague, the late Honourable Bill Blaikie, our friend MP Daniel Blaikie's father. The speeches in the House today were truly moving. We're with you, Daniel, in honouring and celebrating your father today.

Also, members, I do recognize that during our last meeting we had to end abruptly, cutting short MP Blaikie's time, owing to House resource constraints. As a mutual moment of courtesy on our behalf, I'd like to allow MP Blaikie the two-plus minutes of his remaining time.

MP Blaikie, the floor is yours.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Of course we want to see Mr. Chambers' motion passed at the end of this meeting. In this round, I requested exactly the same thing as Mr. Morantz, that we be told how many pension funds are currently underfunded.

Perhaps Ms. Wrye or Mr. Schaan could answer my last question. If Bill C‑228 passes, possibly with minor amendments, do you believe that businesses will continue to fund their pension plans?

[Mark Schaan]

If that company enters into either a restructuring or an insolvency policy, regardless of whether it's federally or provincially regulated, it will be subject to the rules of Bill C-228. It all comes from insolvency.

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

I appreciate your providing that information.

I want to get something else clear in my mind. Let's say, for example, that a bank has an existing loan with a federally regulated business that has a federally regulated pension fund. If this act were to come into force, would that loan—which was advanced before the act came into force—and that company be under the rules that would have then come into force under Bill C-228?

[Marilène Gill, Bloc, Manicouagan, QC]

Thank you, Mr. Chair.

I would like to thank the witnesses for sharing their experience and knowledge with us. Obviously, it will help us make informed decisions.

Mr. Schaan, you mentioned the fear businesses have with respect to the risks that would result from passing Bill C‑228. You also talked about the bill's complexity.

I would hope that committee members won't let this uncertainty keep them from taking action.

As my colleague Mr. Ste-Marie and several others have said, we've been talking about this for decades. I don't believe businesses would be caught by surprise if a bill like this were to be passed.

I'd like to talk about one more thing.

The risks, complexities and fears of businesses have come up a lot. When it comes down to it, I was elected by the people, and it's them who want to take this risk. They understand the complexity, but they're willing to play the game and see what happens. I, for one, don't believe they are protected right now, but I also feel the bill would protect them.

I hope that we can pass a bill that's to everyone's liking fairly quickly.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair. I'd ask that you please interrupt me after five minutes. I will be giving my last minute to my colleague Mrs. Gill.

I'd like to thank Ms. Wrye, Mr. Schaan, Mr. Morrison and Mr. Mackinnon for being with us and answering our questions. I also thank them for their opening remarks.

I will start by making a few comments for my colleagues on the committee.

First, I fully agree with Mr. Chambers' conclusion. He reminded us that this has been a topic of discussion for 10 years in the House and that the current Bill C‑228 was introduced last spring. I'm therefore anxiously waiting for the government party to put forward the required concordance amendments in terms of the existing framework, so that we can discuss them as soon as possible and improve the bill. Improvement is always the purpose of studying bills in committee.

Next, I would also like to thank the Library of Parliament research services. Our analysts do an outstanding job, and that's particularly the case for the briefing notes on Bill C‑228. Mr. Lambert‑Racine and Ms. Yong produced these notes. I congratulate them, they did a fine job.

In fact, I'm going to draw on one of the questions suggested in the briefing notes. I believe my question is for Department of Industry officials, but they will correct me if it isn't.

Could you provide some details on pension plan members? What's the situation right now? In the last 10 or 20 years, how many retirees have lost their pension due to their current or former employer's insolvency?

How much of the unfunded liability within pension plans have they recovered as unsecured creditors in insolvency proceedings under the current regime? In other words, how much of their pension have they lost?

[Kathleen Wrye]

Thank you, Mr. Chair.

Good evening. My name is Kathleen Wrye. I'm the director of the pensions policy team at Finance Canada. I'm here today to answer your questions about this private member's bill, Bill C‑228. I would also like to take this opportunity to provide a bit of context on the funding requirements in federal pension legislation, which is the Pension Benefits Standards Act, or PBSA for short, and how the legislation works to protect the pension benefits of defined benefit plan members and retirees.

I will also provide a few of the key comments we have on the proposed amendments to the PBSA in Bill C‑228 and how they interact with existing provisions in the act.

Under the PBSA, the federal government regulates the pension plans of Crown corporations and private sector plans covering areas of employment under federal jurisdiction, such as telecommunications, banking and interprovincial transportation, as well as private pension plans in the three territories.

The Office of the Superintendent of Financial Institutions is responsible for supervising federally regulated plans with the mandate to protect the rights and interests of plan beneficiaries. At this time, there are over 1,200 federally regulated pension plans. Over 400 of those plans are defined benefit or a combination of defined benefit and defined contribution. Approximately 7% of pension plans are federally regulated, with the remainder being regulated by the provinces.

The PBSA sets forth a number of requirements in respect to the funding and administration of plans that are designed to protect and promote pension benefit security for plan members while acknowledging that the financial health of plan sponsors is important for the continued operation of these plans.

Under the PBSA, there is a specific requirement for plan assets to be held separate from those of the employer. This protects plan assets from being seized by creditors in the event of bankruptcy proceedings.

Further, federally regulated defined benefit plans are generally required to be 100% funded on a solvency basis, which means that they must have enough assets to purchase annuities from a life insurance company to provide the promised pensions in the event of an employer insolvency. The employer is required to fund any funding shortfalls within a period of five years. As of December 31, 2021, the average estimated solvency ratio of federally regulated defined benefit plans was at 109%, meaning that the assets of these plans were, on average, 9% higher than their solvency liabilities.

To address solvency deficits and ensure benefit protection, plan sponsors are able to obtain a letter of credit in lieu of making any solvency special payments up to a limit of 15% of the plan solvency liabilities. The letter of credit amounts would be paid into the plan in the event of an employer insolvency, similar to insurance. Plan sponsors are also able to obtain life annuities from regulated life insurance companies either by purchasing them as a planned investment or by having insurance companies make pension payments directly to retirees. Transferring the obligation to make these payments to a life insurance company helps to secure pension benefits for plan members and retirees.

The use of insurance to meet funding requirements as proposed by the amendments in Bill C-228 would not be very different from the existing tools available to plan sponsors under the PBSA. However, I would note that the existing PBSA provisions are accompanied by a number of safeguards to ensure that pension benefits are protected, such as details regarding which institutions can provide letters of credit to plan sponsors. The current bill does not include any such safeguards to ensure that the insurance to be used would be appropriate for protecting retirement benefits.

I would also like to take this opportunity to raise the consideration related to the amendments regarding transparency requirements in the bill. Bill C-228 contains amendments that would require the superintendent to consult with the Office of the Chief Actuary on its annual report prior to its being tabled in Parliament, and to send this report to provincial ministers of finance and provincial security commissions. I would note for the committee's consideration that neither the Office of the Chief Actuary nor provincial ministries of finance or security commissions have any roles or responsibilities with respect to federally regulated private sector pension plans. As such, it is not clear what these amendments are intended to achieve, in particular as this report is already made available on OSFI's website.

To close, I would like to thank the committee for allowing me to provide some additional context and raise these considerations as part of its work to study the bill.

I look forward to answering any questions you may have or discussing other considerations with respect to the amendments to the PBSA proposed in Bill C-228.

Thank you.

[Mark Schaan, Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry]

Thank you, Mr. Chair, for the opportunity to speak to this committee about Bill C‑228.

I will confine my remarks only to the insolvency law aspects of the bill. My colleagues from Finance Canada we speak to the provisions of the bill affecting federal pension legislation.

Let me start by describing what the bill would do.

Canada's insolvency laws provide two sets of options to financially distressed companies—liquidation, or bankruptcy; and restructuring. The superpriority in Bill C‑228 would affect both options. Liquidation occurs when the company can no longer continue as a going concern. It must be wound up and its assets sold to pay the company's creditors. In bankruptcy, pension claims would change from unsecured status to superpriority status, meaning that they would be paid ahead of most other creditors.

The second impact of the bill would be on restructurings. Our insolvency laws are designed to encourage companies that are financially distressed but fundamentally viable to try to avoid liquidation through court-supervised restructuring plans with creditors. Bill C‑228 would change the current balance by requiring that a restructuring plan provide for payment in full of unfunded pension liabilities to receive court approval.

This quick presentation completed, I should note a few general contextual elements for the committee. Given our years of practice in analyzing and working with the domestic and international insolvency and bankruptcy systems, it is worth stating at the outset that the Canadian Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act are carefully considered and calibrated regimes. Our fundamental aim in the system is to avoid liquidations and allow restructurings where possible, to ensure an orderly and fair system that prevents gaming or a race to the courthouse, and to incentivize behaviours that maximize the value of the corporation and its returns for all workers and creditors.

Large corporations, such as those most likely to have defined benefit pension plans or to avail themselves of the Companies' Creditors Arrangement Act, are complicated entities with a number of competing interests. Shifts in one aspect of the regime will have implications and considerations for other aspects.

I will seek to highlight some of these areas of consideration for the committee, given the shifts that this bill would introduce.

It is also worth noting that this is an area to which we have dedicated considerable time and effort. In particular, I would note for the committee the important work proposed and implemented in the retirement security project, which saw changes to insolvency, corporate governance and federal pension laws with an eye towards the protection of pensioners and workers.

With that, I would begin by bringing some potential drafting issues to the committee's attention.

First, the committee should be aware that the bill uses terminology from federal pension law that may or may not be relevant to the various provincial pensions laws. The bill also does not distinguish between different types of pension plans with different employer funding obligations. My Finance colleagues would be happy to answer questions on these issues.

Second, I wanted to note that the five-year transition period, as drafted, is tied to a calendar date, to five years after coming into force. Insolvency law transition clauses are typically drafted to only affect proceedings that start after they come into force, to ensure that the rules do not change in the middle of an ongoing insolvency proceeding. Under Bill C‑228, a restructuring proceeding could start four years after coming into force, but the new superpriority could come into force a year later, changing the rules midstream and potentially reducing the chances of a successful restructuring.

I will now turn to a number of more substantive considerations the committee may want to investigate during its study of Bill C‑228.

First, the committee may want to look at the differential impact the bill could have on pensioners under different scenarios.

When the bankrupt assets are sufficient to cover unfunded pension liabilities, for instance, the bill may increase the amount that pensions could receive in a liquidation because they would be placed ahead of other creditors. When the bankrupt employer's assets are insufficient to cover the liability, which can be very large, it may be that losses could be locked in for pensioners without any prospect for further recovery given the impacts that the bill may have on restructurings or other possible futures of the plan.

Second, the committee may want to look into how the bill would change restructuring dynamics when a defined benefit pension plan is involved. We are all familiar with examples of insolvencies that resulted in pensioners not receiving their full benefits. On the other hand, there are also many examples of restructurings under current law where the pension plan was successfully preserved, along with the employer and ongoing jobs, such as Air Canada, Stelco and AbitibiBowater.

New superpriorities could, for example, shift the behaviour of players in the insolvency systems. With a new possibility that a secured creditor may be at risk of not receiving full payment given a pension deficit, that creditor may have a strong incentive to choose to race to the bank to call their loan, or similarly take steps to maximize their return in advance of an insolvency. It is possible that a change in the incentives in restructuring could trigger more insolvencies and even minimize the outcomes for pensioners when insolvency is triggered. The committee may want to speak to the creditor community to assess their views about the impact of this bill.

Similarly, the committee may want to consider the impact the bill could have on the availability of interim financing—that is, the special insolvency loans that insolvent companies must acquire to cover the restructuring costs.

[The Chair, Liberal, Peter Fonseca]

Oh, you're right on. You have three seconds, so you're right on time, MP Dzerowicz. You have a good internal clock.

Thank you very much, MP Gladu, for answering all those questions and for your private member's bill, Bill C-228. Thank you for your testimony.

We are going to suspend at this time as we bring in our second panel.

We just want to thank MP Gladu for all of her hard work.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie and MP Gladu.

A lot of work has been put in to get us to this point with Bill C-228.

We are going to move to our second round. We have time only for this round, for questions for MP Gladu. I thought we'd get into a third round.

I will take this opportunity to congratulate and welcome MP Hallan and MP Morantz. Of course, MP Chambers, you're a staple here. To MP Lawrence, I have already said it.

In our second round, we'll start with the Conservatives. We have MP Chambers up for five minutes.

[Marilène Gill, Bloc, Manicouagan, QC]

Thank you.

I'd like to thank Ms. Gladu for introducing Bill C‑228. Mr. Ste-Marie brought up the cross-party effort to discuss and amend the bill in a very collegial manner. I think that's a wonderful way to do things.

I will tell you the history of the bill. Ms. Gladu is aware that this bill came from the people. I, for one, can say that my constituents have been asking for a bill like this. Someone mentioned the last session of Parliament, but people have been talking about reforming these three laws for over 20 years. So this is nothing new. The NDP has also introduced several bills—I've introduced three myself. This session, because of the elections, we're talking to the same witnesses again. For example, Canada's Association for the Fifty-Plus, or CARP, supported my bill. CARP supported the bill that we almost had at second reading in June 2021.

Today, I'm hearing the entire committee, and I hope that our study can move forward quickly. I'm not saying that we'll cut corners, but we've already heard testimony on the subject. I would urge my colleagues to read the history of the bill so that we can finally get it passed. It's not perfect, but show me a perfect bill.

I'd like to see insurance included, for example. This bill is a potential solution for all Canadians hoping to recover the part of their salary that's due to them. We need to call it salary; we say pension fund, but this is a deferred salary, it belongs to Canadians. Workers decided to temporarily part with some of their salary to have a decent pension fund. They were promised something, and they should get it.

I don't have much time left, so I'd like to turn the floor over to my colleague Ms. Gladu.

What does she think could be improved? I feel she's very generous, and she was all ears when I was talking about insurance. Insurance was included in the bill I put forward because older people often need medication. What does she think about that?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair. I'd like to inform you that I'll be sharing my time with my colleague Mrs. Gill. We will have three minutes each to make it as fair as possible.

Good afternoon, everyone.

I'd like to welcome the newcomers from the Conservative Party to this committee.

Mr. Hallan, my colleague Mr. Brunelle-Duceppe, who sat on the Standing Committee on Citizenship and Immigration with you, has nothing but good things to say about you. It will be a pleasure to have your input on our committee.

I want to welcome you back, Mr. Morantz. Thank you for the tremendous work you've done on this committee. We're very fortunate to have you back.

Ms. Gladu, thank you for being here and for introducing Bill C‑228.

In Quebec, we often say that it's important to work transparently when all parties come together for the common good.

Ms. Gladu, your bill and the way you do things are a testament to the transparent approach. I hope this bill will bring real change for people across the country.

In your remarks, you mentioned a neighbour who worked at Sears and lost her pension when the company went bankrupt.

If your bill had been in force at that time, how would things have gone differently for your neighbour?

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Gladu, for your opening remarks and for taking us through how we got to this point on Bill C-228.

We're going to start with our first round. In our first round—you would know this—we will go through each party. Each party will have up to six minutes to ask questions.

We are starting with the Conservatives. I have MP Lawrence up first, for six minutes.

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

Thank you, Mr. Chair.

I'd also like to thank all the committee members.

I'm happy to be here today to tell you about my bill on workers' pensions.

Over the last 10 years, there have been numerous efforts in the Senate and in almost all parties in the House to find a way to protect the pensions of those workers who have worked their whole lives when, unfortunately, at the end of their careers, a company goes bankrupt and they don't get, in some cases, very many pennies on the dollar, or sometimes get no severance.

I looked at all the previous bills that had been brought forward. I looked to the parts that people could agree on, cherry-picked all those parts and put them together in Bill C-228. Then I added what I thought were my own brilliant ideas; we'll talk about whether they are or not.

That's where this came from. We know the history of all the companies—Eaton's, Sears, Nortel, Indalex, Grant Forest Products and so many more—that have gone bankrupt. Basically, a number of things were brought forward in the House. I see that my colleague Marilène Gill is here at committee today. She had a bill in the last Parliament that talked about making sure that pensions were paid out in priority, before large creditors. That went to the INDU committee and was very thoroughly studied, with a lot of witnesses. We were in a position where, with some minor changes, that thing would pass, but an election was called. I'm glad to be able to incorporate her great ideas into this.

There was a bill from Erin O'Toole. One of the good features in that bill was the tabling of a report on the solvency of funds to the House of Commons every year. This is not additional work. Currently there is a report that is done on the solvency of federally regulated funds, but it goes to the superintendent of finance. It's not clear what, if anything, is actually done to remediate these situations.

My bill will require the tabling of this in the House every year for greater transparency so that we can see where the troubled funds are. Then it adds a mechanism to be able to transfer money into the pension fund, without tax implication, to fix the problem. We want to prevent any of these situations from happening.

Then, in the case of bankruptcy, we would adopt a priority. The Bankruptcy and Insolvency Act is this document here. It's quite thick. For your benefit, I have provided a table prepared by the Library of Parliament that clearly shows the priority of where we're recommending pensions go: It's after the Canada and Quebec pension plans; all taxes that are payable; the employment insurance; suppliers' goods that were delivered shortly before the bankruptcy, and the same for agricultural products; unpaid salaries and allowances to $2,000 maximum; other salary contributions and the contribution to the pension plan; and costs incurred by a government to decontaminate land included in the bankrupt's assets. At that point, we would put in the pensions. After that would be secured claims, preferred claims and unsecured claims.

In terms of the feedback received from stakeholders, let's talk first about one of my brilliant ideas. I thought we should also add a mechanism so that if there was an insolvent pension fund, you could have third party insurance cover the insolvent portion. That might be helpful. Unfortunately, nobody liked this idea. Apparently, there's already a mechanism in place that allows people to transfer the risk to a third party, which is really the intent of that mechanism. So I would propose that we get rid of that part by striking clause 6.

Second, there was a drafting error. We tried to take out the part of the bill from Erin O'Toole that changed the type of pension. We feel that it's like a contract between the employer and the employee when they first start, and it's not right to change the deal at the end, after they have worked their whole lives. In order to get rid of proposed subsections 29(8.1) and 29(8.2), I am suggesting that we say no to clause 7.

There was another provision that had been recommended when this bill last went to INDU. There was a concern from the banking community that perhaps the mechanism would need to be changed so that the coming into force of some of the provisions, like the priority, should be delayed from the beginning. I'm suggesting a change from five years to three years. There's a proposal to perhaps add severance. I'm open to that discussion.

With that, I look forward to your questions and I look forward to your support of this bill.

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order.

Welcome to meeting number 61 of the House of Commons Standing Committee on Finance. Pursuant to the House order of reference adopted on Wednesday, June 22, 2022, the committee is meeting to discuss Bill C-228, an act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Pension Benefits Standards Act, 1985.

Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Members are attending in person in the room and remotely using the Zoom application.

I would like to make a few comments for the benefit of witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike. Please mute yourself when you are not speaking. There is interpretation for those on Zoom. You have the choice, at the bottom of your screen, of floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

I remind everyone that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as well as we can. We appreciate your patience and understanding in this regard.

I would now like to welcome, for our first panel, our witness, who is before us, the author of Bill C-228, MP Marilyn Gladu.

Welcome, MP Gladu, to our committee.

The House resumed from June 15 consideration of the motion 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 the second time and referred to a committee.

An Act to Change the Name of the Electoral District of Châteauguay—Lacolle

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, the member behind me says that the centre of Canada is Provencher. I can be certain that it is not, because I think that from Provencher someone could spit and hit the American border. Given the fact that my riding, Peace River—Westlock, is in northern Alberta and the centre of Alberta is a seven-hour drive from the American border, I can assure colleagues that the geographical centre of Canada is definitely not in Provencher.

That said, I have very much enjoyed speaking about the promised land, Peace River—Westlock, as I like to call it, but there are a host of other things that we could be discussing in this place as well.

The member for Edmonton West did speak about some of these things already, but I wanted to highlight some of the other private member's bills that have come forward from folks in our caucus, particularly Bill C-228, from the member for Sarnia—Lambton, which amends the Bankruptcy and Insolvency Act to ensure that folks are able to collect their pension funds over time. I want to reference Bill C-240, from the member for Charleswood—St. James—Assiniboia—Headingley, which amends the Income Tax Act to ensure that capital gains exemptions are granted to those whose estate goes to a charity. The member for Essex also has an amendment to the Income Tax Act to allow trades persons to deduct amounts for travelling.

That is some of the amazing work that our caucus is doing and I just wanted to highlight some of that.

Bankruptcy and Insolvency Act

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

Madam Speaker, it is very encouraging to hear all parties in the House agree that this bill needs to go to committee. Over the last 10 years, there have been multiple attempts by multiple parties to address the issue of pension protection in Canada. We have seen countless Canadians impacted: They have not received their severance or have received pennies on the dollar.

Bill C-228 would do three things. First, it would allow the annual report on the solvency of funds to be tabled here in the House so that it is a matter of public record and we know which funds are in trouble. Second, it would provide a mechanism to transfer money into those funds without tax implications to top them up and restore them to solvency. That is really where we want to be. Third, in the case of bankruptcy, the bill would make pensions a priority, after source deductions and taxes and suppliers take back their goods, but before large creditors and unsecured creditors. That is where we have put the priority for pensioners to receive their due.

I thank the member for Manicouagan and the member for Elmwood—Transcona for the many discussions we have had on things we need to do to the bill to try to address concerns. I also thank the members who have spoken tonight: the member for Kingston and the Islands, members from the Bloc, my colleague from Hastings—Lennox and Addington and even the member for Whitby, who presented a petition in the House on pension protection. This just shows that the time is right for us to work together and get this right at committee.

One thing we are going to be working on and talking about at committee is cleaning up some of the clauses. There were a number of bills and each one of them had something in it that everybody did not like. When we were cleaning up some of the things we did not like in the previous bill, Bill C-405, a couple of clauses got left behind, so we got rid of them.

The insurance idea is something people want to talk about at committee. Some people like that idea and some people do not. The NDP also correctly raised the point that pensions are not the only consideration; severance pay is too. It is something people have not received when companies are in bad shape. That should go in, with the same priority as pensions. I agree with that.

In trying to make sure that we do not get the unintended consequences that the member for Kingston and the Islands was talking about, one thing of concern is whether or not businesses can get adequate credit. We have allowed a different coming-into-force time. The reporting and topping up of funds would be immediate, but we would give a number of years before the priority part of this bill comes into force. That would allow businesses time to get their house in order, and I would argue that if they cannot get their act together, they are a greater financial risk, so they should pay the associated consequences for that.

I am happy to say that there is support in the Senate. If the bill makes it out of committee and goes to the other place, there is support from multiple parties in the Senate, from Senators Plett, Yussuff and Dalphond. There is also huge stakeholder support across the country. Letters have gone out everywhere from Mike Powell with the Canadian Federation of Pensioners, CARP and the number of other stakeholders that have come forward.

I am encouraged by what I have heard today. I know this is what Canadians want us to do. They want us to work together, have the discussions and work collaboratively. As the twice-named most collegial parliamentarian, it is my pleasure to work together across the aisles. This is important for seniors in our country and it is important for people who work their whole lives. We can do something great in this moment, so I encourage all members of the House to support Bill C-228 and send it to committee. Let us work together and get this done for Canadians.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Madam Speaker, I would like to begin by thanking my esteemed colleague, the member for Sarnia—Lambton, for introducing Bill C‑228 and for working across party lines throughout the process, working with all the opposition parties on a bill that matters very much to the Bloc Québécois.

I would also like to express my appreciation to my colleague from Manicouagan, who began working hard on Bill C‑228's precursor in 2015. She has really done some outstanding work.

We are here to talk about Bill C‑228, which amends the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act. The amendments would:

...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 that an employer may provide financial security in the form of insurance for any portion of the contributions that they are required to pay under subsections 9(1.‍1) and (1.‍2) of the Act....

Basically, this means that the enactment:

...to authorize the administrator of [a potentially] underfunded pension plan, in certain situations [including bankruptcy], to transfer or permit the transfer of any part of the assets or liabilities of the pension plan to another pension plan. The amendments also provide for the tabling of an annual report respecting the solvency of pension plans.

I would like to begin by providing a bit of context. My hon. colleague from Joliette touched on this.

One important factor in the history of all the bills on this issue is of course the bankruptcy of the American company Cliffs Natural Resources. The two Canadian subsidiaries operating its facilities, at Bloom Lake in Pointe-Noire and in Wabush, were placed under the protection of the Companies' Creditors Arrangement Act in 2015.

As a result, Cliffs Natural Resources announced plans to reorganize its operations with a view to closing down its operations in eastern Canada. This restructuring had serious repercussions for Cliffs' employees, as well as for its retired workers who lost much of their pension and group insurance.

During the 42th Parliament, that is from 2015 to 2019, my esteemed colleague, the member for Manicouagan, introduced Bill C‑372, a bill to protect workers' pension funds. Debated for just one hour, the bill, which was intended to prevent injustices like the injustice done to Cliffs workers, sought to ensure that this would not happen again and that other retirees would not lose the pensions they worked for all their lives. Unfortunately, the bill was never acted upon because the Liberal majority government at the time did not implement it.

Throughout the last Parliament, the Bloc Québécois worked very hard, particularly with the other opposition parties, to protect pension funds, but unfortunately that work did not bear fruit. To buy time, the government appointed the former minister of seniors to hold a consultation and, again, that led to absolutely nothing. Since then, we have also seen the bankruptcies of Sears and Groupe Capitales Médias.

With the economic turmoil caused by the pandemic, there is every reason to believe that there will be more bankruptcies and that workers must be protected to ensure that, in the event of a bankruptcy, they have access to a pension fund.

I would like to take this opportunity to quote a very important part of the press conference my esteemed colleague from Manicouagan gave, in collaboration with the esteemed member for Sarnia—Lambton: “A pension fund is deferred wages resulting from an agreement between workers and a company. When a company decides to breach that contract and pay off its debt by using that money, that is theft, plain and simple.”

While all the opposition parties have introduced a bill to protect workers' pensions, we have the opportunity, as parliamentarians, to move quickly through each stage of the legislative process to ensure that pension plans are protected as soon as possible. We have this opportunity because we are in a minority government. For once, the opposition parties can join forces, set partisanship aside, and get this bill passed to help these workers.

No one will be surprised to learn that the Bloc Québécois supports the principle of Bill C‑228. Currently, when an employer declares bankruptcy, what they owe the pension fund is considered an unsecured claim. Also, once secured creditors and preferred claims are paid, there is practically nothing left to replenish the undercapitalized pension funds. The result is that pensioners end up with reduced pensions, sometimes drastically so.

The overall objective of Bill C‑228 is quite similar, in that it is designed to better protect pension funds in the event of bankruptcy. When a company is being restructured in accordance with the Companies' Creditors Arrangement Act or when it is being liquidated in accordance with the Bankruptcy and Insolvency Act, Bill C‑228 would designate pension plans as preferred creditors, as was proposed in the Bloc Québécois bill that died on the Order Paper when the election was called before it reached report stage.

Bill C‑228 is, however, missing one of the provisions in the Bloc Québécois's bill, a provision that would have also designated group insurance plans as preferred creditors. We are prepared to accept this omission to ensure that this bill is passed. It does not provide the same level of protection for workers, although it is an improvement over what we have now.

Bill C-228 also contains amendments to the Pension Benefits Standards Act of 1985 that were not included in the Bloc Québécois bill. These changes only affect federally regulated businesses, such as telecommunications companies, banks and interprovincial or international transportation companies, or about 3% of Quebec's workforce. These changes provide some flexibility to the administrator of a pension fund. The bill allows an employer to purchase insurance to cover all or part of the pension fund's deficit. This provision harmonizes the federal legislation with the Ontario legislation, where there is an insurance fund for pensions. This is a good measure. Quebec should use it as an example.

When Capital Media went bankrupt, the retired workers from various local daily newspapers lost part of their pension, while those from Le Droit, based in Ottawa, managed to hang on to nearly all of theirs. Under this legislation, instead of emptying the pension fund upon bankruptcy, the administrator of the fund would be allowed to transfer it to another one. This measure does raise some questions. Does it salvage anything, or does it prevent the fund from being bailed out by the employer's assets? This would have to be examined.

Generally speaking, the bill is a step forward in protecting seniors. After all, a retired worker's pension is deferred wages, as my colleague fromManicouagan said. There is no reason why salary should be considered a priority claim, but not retirement.

Once and for all, we must put an end to this measure that is burdening Quebec workers and retirees. We must guarantee them the financial security they deserve. Once again, this bill draws heavily on former Bill C-253, which was introduced in the House.

We must lead by example. Workers' interests must come before partisanship. That is what we are doing today.

[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.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, I am very pleased to be speaking to Bill C-228, which addresses pensions in the case of bankruptcy or insolvency. For the NDP, this addresses something that has been a long-term concern for us. We know pensioners are really made fragile when they lose a significant part of their pension. We know it is absolutely devastating when workers who worked so hard for a company, workers who spent their lives dedicated and loyal doing that work, lose their pension on the other side or know they are going to lose their pension.

Whenever I think of this issue, I always think of Pat Horgan, who was a former member of my constituency. He passed away several years ago. I remember him sharing his story of his many years of dedication to Safeway, where he travelled quite a distance to work and support his family. He spent many, many years of his life working really hard. His amazing pension provided a solid foundation for his family. He retired early to care for a young son. Pat was making $2,700 a month, and when everything fell apart, his pension went from $2,700 down to $72 a month.

This happens to Canadians in our country, and that is why this type of legislation is so important. This is why we are holding the government to support this. It needs to understand that, when it puts Canadians in that situation, when it tells companies everybody is above the workers, it really disenfranchises those folks. It means that, when they retire, they do not have that stability.

Pat, in his retirement, had to go back to work. He had to go back to work to support his family. I remember him saying to me he was grateful he had the health and well-being to work, even though as he got older and older it became harder and harder for him. This is why it is so important that we are here today.

Pensions are deferred wages. This is how we plan for our future and for our retirement. When someone gets older, one faces multiple challenges because of aging. If someone does not have the pension they worked so hard for, and everybody else walks away with the money they need while that person is left in a fragile and vulnerable position, it is simply not fair. It is an injustice. It is unfair, and it finally needs to be dealt with. Worker pensions should not be at the bottom of the list. I am so hopeful this bill will get to where it needs to get because it would take the steps that are much needed toward fixing this.

I need to be honest. I was a little worried in the very beginning if I would support this bill or not. My caucus and I had some very important concerns, which we brought forward to the member for Sarnia—Lambton. Happily, some commitments, discussions and agreed upon changes, and I thank the member for that important work, will allow this caucus to vote in favour of the bill.

Because of this work, yesterday, together with the NDP member for Elmwood—Transcona, the Bloc member for Manicouagan and, of course, the member for Sarnia—Lambton, all three opposition parties were able to announce their collaboration on this bill.

I need to take this opportunity of course to thank my dear friend Mr. Scott Duvall, who is the former member of Parliament for Hamilton Mountain. He worked diligently both in the 42nd Parliament and the 43rd Parliament to get this work done and introduced his own bill in the 42nd Parliament. I know he worked so hard with the Bloc to get the bill through, and we did not see it get where it needed to in the other place because of an election that was called for no reason.

I am so happy to be having this discussion because Scott Duvall committed his life to this work. He lived through this. He came from a union background and had seen this happen. He had worked to support workers and was absolutely dedicated. I really respect the work he continues to do, and I hope this gets over the finish line. I know he would be really happy to see that.

Currently, we know our laws leave workers behind. I believe it is extremely important not only to amend the bankruptcy laws to ensure not only that unfunded liabilities for pension funds are honoured over both secured and unsecured creditors but also that companies can no longer stop payment of retirement benefits during the bankruptcy proceedings. This is another factor that is really important to understand.

These long processes have such a profound impact in the short term and long term for workers. We know that when there is the significant loss within a community of a big organization or business, it really has a profound impact, especially on smaller rural and remote communities like those that I represent. This is important. I am seeing this right now in a bit of a different circumstance with the mill in Powell River where folks are waiting to move on, but they are not getting any termination or severance pay. They are waiting for that. That is what happens in bankruptcies. People are waiting because all of the secured creditors get to go first. There is a pattern for businesses in trouble to leave workers hanging, unable to bridge the gap and move forward in a meaningful way. Our federal laws need to be improved to support workers.

That is the foundation of this for me and I hope it is for all of us as we vote on this. We have to make sure that workers are recognized in our country. All too often we have systems in place where workers stay poor while the people at the very top walk away with a lot of resources. When people work hard for a company, when they wake up every day and show their dedication and loyalty by showing up for work and helping that business grow its own resources, its own wealth, we have to make sure that when it gets tough, those people are not left behind.

As the NDP's spokesperson for seniors, I have spoken to many seniors who have had this experience and have significant challenges financially when they retire. It can become very significant if they lose their pensions.

One of the concerns I have with this bill is it does not really include protection for health care benefits during the insolvency process. This is concerning to me. I have talked to a significant number of seniors in my riding who really struggle with health care costs.

I was talking to someone not too long ago who was talking about diabetes medication and how hard it is to make ends meet now because that person does not have any extra resources. We also know that as people age, dental care becomes increasingly more important and is a huge deterrent to health. I have talked to seniors who struggle to chew their food and are having to blend their food in a blender to make sure they get the healthy nutrients they need.

One senior told me that she lost her pension because of a bankruptcy and is now in a position where she has significant dental work that needs to be done. She is trying to save up for it. She keeps getting a recurring infection in her gums. Her dental professionals are trying to make that work without her losing any more of her teeth. I cannot imagine being in that circumstance.

This is an important part. We need to make sure that those things are put in place. I know this is exactly why the NDP is fighting so hard to get dental care in this country for low-income people, especially vulnerable people with health issues, persons living with disabilities, seniors and children. We need to make sure that people have that opportunity. Often when people lose their dental health, they lose so many other opportunities in their life.

In closing, I look forward to having this bill go to committee and for all of us to work together to amend it and make some changes so that we can serve the workers across this country who build our communities, who pay their taxes and do all they can. We want to make sure when they retire that they are protected. Hopefully, we will get there.

I want to again thank the member who brought this bill forward for her hard work, her diligence and her ability to work across party lines. I think that is a real testament to some of the work we do in this place.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I am honoured to rise today to speak to Bill C‑228, which was introduced by the member for Sarnia—Lambton. This is a very important bill. I sincerely commend my colleague and congratulate her on the work she does in the House.

In theory, every elected member is allowed to introduce their own bill in the House of Commons during every Parliament. Not everyone has the opportunity to do so, since there is very little time. Each one of us would have all kinds of bills to introduce. When a member like the member for Sarnia—Lambton has the opportunity to introduce a bill, that is a very fortunate event, and I sincerely thank her for choosing this topic. This bill, if passed, will correct what I consider to be a serious injustice. Based on what we have been hearing in the House, I have a lot of faith that this bill will move forward. It may even be passed. I tip my hat to my colleague, sincerely.

In my riding of Joliette, my colleague Véronique Hivon represents us in the National Assembly. She has announced that she will not be seeking re‑election after 14 years of dedicated service. The lesson I take from her is that we need to work across party lines, make connections that go beyond party boundaries and political games, and work together for the common good to make a difference. I truly believe that each and every one of us is here in the House because we want to make things better for people, and the member for Sarnia—Lambton's Bill C‑228 is proof of that.

As my colleagues know, Bill C‑228 amends the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act to better protect workers' pension plans. When a business goes bankrupt, it is always a great tragedy. If it is a family business, then it is a tragedy for the family. It is also a tragedy for the community where the company does business. However, it is even more tragic for the workers who depend on the jobs that business provides to earn their living. Any bankruptcy is a tragedy, of course, but it particularly affects pensioners. That is what the bill before us would correct. It seeks to better protect pension plans in the event of bankruptcy.

Everyone remembers the case of White Birch, which went bankrupt in 2010, I believe. The workers lost about half of their pensions because the pension plan was not adequately funded. It was such a tragedy. Those people had worked hard all their lives—those were not easy jobs—to make enough money to be considered middle class and, for all those years, they had been contributing to a pension fund so they could retire. They believed they would work hard, get up early every morning to earn their keep, and then, at 65 or so, they would be able to go at a slower pace for the rest of their lives and enjoy what they had put aside through the pension plan. However, overnight, these people, who had budgeted very carefully, knowing that people have less income in retirement than when they are working, saw half their income disappear because the company went bankrupt.

Finally, we learned that pension funds, pension plans are unsecured creditors, so once the taxes owing to the government are paid, and all the other higher ranking creditors are paid, there is practically nothing left for underfunded pension liabilities like that. These are terrible situations that ruin lives.

The bill introduced by my esteemed colleague from Sarnia—Lambton includes several aspects, but basically it seeks to ensure that pension plans are given a higher priority when creditors are being paid off. This would help to better shelter pension funds to ensure that the pensions are paid.

Earlier, I spoke about working together across party lines, and so I thank the member for choosing to present her bill to the media together with my Bloc Québécois colleague, the member for Manicouagan.

During the 42nd Parliament, from 2015 to 2019, Cliffs, a company in my colleague from Manicouagan's riding, went bankrupt, leaving many workers in a difficult situation. The United Steelworkers stepped in and miraculously managed to reduce pension losses, but the harm had already been done. As a result, my colleague then introduced a bill similar to this one.

What is different today is that we have a minority government. The people voted this government in, but they did not give it free rein, which means that it must answer to all parliamentarians, a majority of whom are not from the same political party. That gives the House, this Parliament, some leverage and makes it possible for bills like my colleague's to be passed.

In this case, the Liberals might be changing their stance, since they want to study this bill in committee, so at least the bill will make it that far. Let us hope that we will be able to improve it and get it through the other stages. Obviously, there will be work to do in committee. Questions will need to be answered. We will have to make sure that we understand every part of the bill so that everything is done properly, according to the rules. That is what committee work is for. I am sure we can make that happen.

This issue is obviously very important to us. We see that federally regulated businesses would also be protected by the change to the Pension Benefits Standards Act, 1985. This affects 3% of the labour force in Quebec. In her bill, my colleague from Manicouagan also proposed raising group insurance to the rank of preferred creditor. This is not the case here and that is something that could be discussed by the committee.

As I was saying, the principle of the bill is honourable. The member did not have to introduce this bill, and I commend her for deciding to do so.

I will certainly ask a question in committee about the possibility of transferring rather than liquidating the pension fund. I will also have questions about the possibility of an employee taking out insurance to cover all or part of a potential deficit in the pension fund. When Groupe Capitales Médias declared bankruptcy, the workers of the various daily and weekly papers in Quebec belonging to the group lost part of their pensions. In contrast, workers at the newspaper Le Droit, based in Ottawa, will receive almost their entire pension thanks to insurance. This measure is already in place in Ontario, but not in Quebec, and I think that Quebec would do well to consider this model.

After the White Birch bankruptcy, the first case that really struck me, there was the Cliffs case on the north shore. I was elected at the same time as my colleague from Manicouagan, and this second case really shook us up. It was at that point that my colleagues and I got a better grasp of the issue. However, since then, there have been more cases. I just spoke about Groupe Capitales Médias, but there are others. I remember in particular the Sears bankruptcy, which the member for Sarnia—Lambton and I went through.

How many dozens or hundreds of families of retired workers run the risk of losing half or even more of their retirement pensions because a company did not adequately fund their pension plan before declaring bankruptcy? In my opinion, it is our role in the House as legislators to correct this shortcoming by raising the creditor ranking of pensioners so they are better protected.

In closing, I would like to again thank the member for Sarnia—Lambton.

[Mark Gerretsen, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons (Senate)]

Madam Speaker, Bill C-228 has been introduced by the member for Sarnia—Lambton, and I first want to express my support for her passion as it relates to the bill.

The concept of superpriority, in terms of making sure that it is put in the proper order, is something that I have been interested in since I first arrived in the House. I am very interested in seeing the bill go to committee so that the committee can do the proper work and send its recommendations back to the House. Unfortunately, over time, we have seen a shift in the way that corporations treat their employees, quite frankly. We have seen a number of corporations, and some even within my riding, declare bankruptcy and, as a result, give themselves the ability to neglect payments to pensioners in particular.

Shortly after I was elected, I was very impressed by a group from the Invista plant in Kingston, which manufactures nylon. A group of not employees, but managers came forward. They would not have been affected by any legislation such as this. The group was led by Peter Strauss and some other individuals from my riding. They came forward, as previous management of this plant, on behalf of the employees who would be affected when decisions were made to allow companies to declare bankruptcy in these positions. I was very moved by that, because it showed that there was deep concern.

We have to reflect on the fact that there are many pensioners out there who paid into pensions throughout their working careers and are, quite frankly, relying on this income at the end of their careers for their retirement. In many cases, individuals are limited with respect to how much they can contribute to RRSPs if they are expecting to receive a pension that they are paying into. It should certainly not be the fault of individual employees, pensioners, if a company declares bankruptcy once they have retired.

I was really concerned a few years ago after seeing some corporations declare bankruptcy. I think of Sears in particular, and when it declared bankruptcy. Prior to declaring bankruptcy, it started to move assets into other companies. For example, it moved buildings and land into other companies so that it could shield those assets from the bankruptcy and insolvency operations that would take place once the company put itself in that position. I can see the frustration that some individuals would have around circumstances like that, and I know that they would be extremely upset to discover that this type of activity had been happening. However, the reality is that this is the model allowed for these corporations.

I can appreciate the fact that if we set the environment for corporations to act in a certain way, they are going to act in that way. If we make it allowable for corporations to move assets around and basically skirt some responsibilities in the interests of profit, because there are very few human elements to the capitalist system, the default reaction unfortunately is that the very nature of it is going to encourage companies to do that. Therefore, it falls upon government, quite frankly: the policy-makers and lawmakers, to set the proper environment to ensure that individuals are properly taken care of in circumstances like this.

Having said all this, I was part of a small working group a number of years ago. We were looking at and studying this issue, and I know that there are some concerns out there. I do not, at this point, necessarily agree with those concerns, but I know that there are some around what this does to an individual corporation's ability to access financing from a bank. There are some out there that I recall having told us that it would make it more difficult to leverage capital, so I realize that there are various elements to this and variables that need to be considered. I really hope that at the end of the day we can focus on making sure that the individuals who have in good faith relied on institutions, in this case their employers, to manage their retirement funds have it done in a proper way.

I look forward to this bill continuing to go through the debate process. I am personally in support of seeing this go to committee so that the proper study can be done. I look forward to hearing about that as it comes back from committee, so that I can then inform myself to make a decision on how to vote for this. At this point, it is certainly something that I am very interested in, given the comments that I have made to this point.

The House resumed from April 1 consideration of the motion 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 the second time and referred to a committee.

[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)