Finance Committee on June 18th, 2009

[Mike S. Zafirovski]

No. We've had very active discussions with EDC, but we did not come to areas of direct assistance there.

[Thomas Mulcair, NDP, Outremont, QC]

On several occasions during your presentation you talked about increasing the value to be available for all stakeholders.

[Mike S. Zafirovski]

Correct.

[Thomas Mulcair, NDP, Outremont, QC]

Do you consider the people in this room—your former employees—to be among those stakeholders?

[Mike S. Zafirovski]

Absolutely--pensioners, current and former employees.

[Thomas Mulcair, NDP, Outremont, QC]

But right now they're in the same position as a distressed bondholder on Wall Street, aren't they? They're relegated to the back of the pack.

Has your analysis and the decisions you've taken been a function--depending on which countries you've put yourself in bankruptcy protection in--of what would be available from various states and governments in those different jurisdictions and whether you put yourself into bankruptcy or try to make it a going concern? Because if it's protected in bankruptcy, you can do things like pay yourselves $45 million in bonuses; but if it's a going concern, it's going to be under a different light, isn't it?

[Mike S. Zafirovski]

That's not really true.

I'll comment on the first one. There is no one in the back of the line. Whether you're a supplier--

[Thomas Mulcair, NDP, Outremont, QC]

There is. There are secured creditors out there, and the employees are not secured creditors.

[Mike S. Zafirovski]

No, there are no secured creditors, sir. There is no one back.... There are the active, ongoing employees, there are consultants or parties that are serving the various stakeholders, but there are no secured creditors.

[The Chair, Conservative, James Rajotte]

You have 30 seconds, Mr. Mulcair.

[Thomas Mulcair, NDP, Outremont, QC]

You say there's no back of the line, but I put it to you again--and I'll end where I started--that the people who are in back of you are in the back of the line, because they don't get to ask for $45 million in bonuses, they don't get their severance, they're not getting anything, and they're watching their pensions being whittled away.

So I invite you again to spend the next hour of your time listening to these people, because they're the ones who are feeling the pain.

Thank you.

[Applause]

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Mulcair.

I'll just remind members of the audience that it is time for members' questions. I'd just ask you to please respect that.

We'll go to Mr. McCallum, please.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chair.

And thank you, Mr. Zafirovski, for being here today.

I'd just like to associate myself with my colleague from the NDP, and I hope you will be able to find the time to stay an extra hour to listen to all these people.

It's quite obvious this is an extremely sad case, I know you say for yourself, and more so, I would say, for the others in this room. But it is also for Canada. Before I came into politics I worked for the Royal Bank, and at one point Nortel was worth more in terms of market capitalization than the Royal Bank of Canada. And look where Nortel is today.

I've heard from some Nortel people about the possibility of government help. I'd just like to pursue a little bit of Mr. Mulcair's line of questioning.

In terms of your discussions, whether with Mr. Flaherty, Mr. Clement, Mr. Harper, or any other government officials, did you propose to them some sort of plan for the government to provide help, not so that Nortel would survive totally intact, but to maximize the number of R and D, high-skilled jobs in Canada?

We've had bailouts around the world and in this country. It seems to me that when you have thousands of high-tech, highly skilled R and D people, when innovation and ideas are the way of the future in this country, it's not only a loss to Nortel but it's also a loss to the country if all of those people go south of the border or elsewhere in the world and are lost to the country.

So did you put that case to the government, and if so, how did you put that case, and what did the government say?

[Mike S. Zafirovski]

We did have a number of very in-depth discussions in November, December, and January. There were a number of cases presented to the government during active discussions. But there are no specific actions that came out of those.

[John McCallum, Liberal, Markham—Unionville, ON]

But with all due respect, “productive discussions” sounds a bit like the descriptions of the recent conversations between Mr. Ignatieff and Mr. Harper. “Productive meetings” and words like that are used when you don't want to tell people what happened.

I am asking you what actually did happen. In terms of Mr. Ignatieff andMr. Harper, we heard after a couple of days what did happen, but the meetings you had were a long time ago. So my question is, what specific proposals did you make to the government for some kind of assistance, whether to keep the jobs, to help the pensioners, or any other proposals you put on the table, and what was their answer?

And I don't want to just hear “we had productive discussions”.

[Mike S. Zafirovski]

We did have lots of discussions. Preserving employment was at the top of the list.

We are currently pursuing a number of discussions internally and with outside companies as to the best way to preserve value for the company, including preserving employment. The government has been active in those, and they may be supporting some future activities. But we did have a specific ask, and that specific ask did not materialize.

[John McCallum, Liberal, Markham—Unionville, ON]

So you did ask for something specific and the government said no.

[Mike S. Zafirovski]

Correct.

[John McCallum, Liberal, Markham—Unionville, ON]

And what did you ask for?

[Mike S. Zafirovski]

Sir, this is obviously.... Those were private discussions, and they were very active discussions, as I'm sure--

[John McCallum, Liberal, Markham—Unionville, ON]

Well, In a parliamentary committee you're supposed to answer the questions. Can you tell me at least the general nature of the proposals to which the government said no? What was it you were asking them to do?

[Mike S. Zafirovski]

There was a general request for financial assistance for a period of time.

[John McCallum, Liberal, Markham—Unionville, ON]

How much?

[Mike S. Zafirovski]

Those were—

[John McCallum, Liberal, Markham—Unionville, ON]

You requested financial assistance to do what? You wanted it for the pensioners, or for other purposes?