Thank you very much, Mr. Chairman.
I would also like to introduce the people to my left. They are two economists with the Research Department of the Bloc Québécois, Jean-David Beaulieu and Odile Rochon. So, if there are any questions about the numbers, we may want to call on them for assistance.
This is a bill we are all very familiar with, because I introduced it for the first time in 2007. At the time, it was Bill C-445. I would like to give you some background to explain how I came up with the idea of introducing this bill. I might add that it was developed in cooperation not only with a number of MPs, but also with people who have been affected—retirees who lost a lot of money in their pension plan.
You have already introduced my MP colleague, Louis Plamondon. He, my colleague representing Chambly—Borduas, Mr. Yves Lessard, who is here at this table, and myself all met with the people from the Jeffrey Mine and Atlas Stainless Steels a few years back. They asked us what could be done under the federal tax system to help them out, given the loss that they had suffered under their pension plans.
After some discussion and brainstorming, we concluded that a bill introducing a tax credit would be the best solution. In that regard, I take my hat off to Mr. Gaston Fréchette. He lives in my riding and is the chair of the Jeffrey Mine Retiree and Active Workers Sub-Committee. He is the one who proposed the idea of a tax credit that would soften the blow for retirees whose pension plan was cut following the closure or failure of their employer's company.
So, Bill C-445 was introduced for the first time in 2007. I have just given you a brief explanation of the discussions that led up to this solution. Because of the election in 2008, this bill died on the order paper.
Today, Mr. Chairman and colleagues, we come before you, at this stage in the process, to discuss Bill C-290 which, if I am not mistaken, was introduced again in February of 2009.
Following that, we also received a great deal of support. I believe that some witnesses will be coming here to add their voices to those of the pensioners from these two companies located in our respective ridings. A petition has also circulated. In our region, we have gathered more than 2,000 signatures in support of this request for a tax credit through Bill C-290. We also have the support of the Fédération de l'âge d'or du Québec, or FADOQ—at least, of its president— for this bill.
I would like now to briefly explain what happened at the Jeffrey Mine. A bankruptcy occurred in 2002. On average, people lost 40% of their pension. Approximately 1,200 workers were affected by this. In fact, under their pension plan, people lost some $55 million. Atlas Stainless Steels, located in Sorel, went bankrupt in 2003. Workers there lost between 28% and 58%—almost 60%—of their pension funds. Approximately 250 workers are affected. On average, they lost $6,000 each. As you see, there is quite a gap: some lost almost 30%, while others lost 58%.
There is one question we have been asked frequently. Are there currently other cases that could be eligible for this 22% tax credit proposed under Bill C-290? To our knowledge, there are none at the present time. Could other industries eventually fall under it and could other workers also be penalized? The answer is yes. Having said that, such cases will have to involve workers whose employer has gone bankrupt and shut down, as well as workers who have actually lost part of their pension funds.
The solution we are proposing is a 22% tax credit. It is the equivalent of the federal marginal tax rate that applies to the middle class. I will explain by way of an example. If someone was expecting to receive $20,000 under his pension fund and ended up with only $12,000, he would be looking at a loss of $8,000. So, it is based on that loss that the tax credit is determined. The tax credit would be $1,760, non taxable and transferable to a surviving spouse, but not retroactive.
I said earlier that the bill only applies to retirees who have been cheated through income losses under their pension plan following a closure or bankruptcy. This is not a virtual loss, as it would be for someone who loses his pension funds because of the economic crisis or because the stock market falls. He could not suddenly claim a tax credit because, in actual fact, he would not already have lost the money. The idea is not to make up for an actuarial deficit resulting from a stock market drop. That point must be absolutely clear.
I would like to provide a further clarification, Mr. Chairman. There are legislative amendments which, in our opinion, would mean that there would not be a lot of other companies or retirees who could avail themselves of this tax credit, even though one may think the door is always open. It is important to realize that Bill 30 is already in effect in Quebec. In Ontario, the Pension Benefits Guarantee Fund has been set up. In other provinces as well, there are laws in effect which prevent such unfairness from occurring, at least we hope so. That means that these kinds of situations will be very few in number. There is also the Bankruptcy and Insolvency Act which has been amended by the Parliament of Canada. The benefits must be paid into the pension plan before the court accepts the bankruptcy. Therefore, any contributions due by the employer are paid out of the company's assets. Before an employer can declare bankruptcy, those contributions must be made, which obviously makes an enormous difference. I believe that amendment came into effect last September 18.
I am not telling you anything you do not already know when I say that regulations will be introduced once the bill is in effect, in order to restrict the scope of some of these measures. But the initial idea was to help workers who have been cheated out of their pension—to help retirees. Thus far, I must say we have received the support of the Opposition parties at every reading. The Bloc Québécois obviously voted in favour. Only the Conservative Party has opposed this bill. Today will be an opportunity for you to ask us questions. We will be very pleased to answer them, Mr. Chairman.
Thank you very much.
