Finance Committee on June 1st, 2010

[Mike Wallace, Conservative, Burlington, ON]

That's $10 billion.

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

It's not $10 billion. It's like $50 million. I'm talking about the PBO estimates.

So I guess my question is, if one specified very clearly this was only to apply in the case of bankruptcy, would that not limit the technical difficulty of redrafting the bill quite a lot because you're being quite specific?

[Malcolm Hamilton]

It would limit the scope and it would limit the cost to government because it would apply in far fewer circumstances.

I don't think it does much to fix the technical complexity, because if you look... For instance, some Nortel people will settle by transferring lump sums to lock in RRSPs. That really doesn't even create a ripple in their tax return. There is no inclusion. There is no deduction. It's not at all visible. So you'd have to create an event where there was none to identify how much should have been transferred had they not had a loss, versus what was transferred.

In other cases, when you have a pension benefit guarantee fund claim—so part of the money is the pension fund and part of it is the guarantee fund—the loss in any given year might be different than it is in other years, given indexing and other things, so you basically create a tax reporting requirement whereby you have to constantly keep track not just of what is paid, which is the easy thing, but of what would have been paid in an alternative world where this loss hadn't occurred. That's a formidable task.

I don't think administration should be used as an excuse for not doing something that you think is worth doing, but I wouldn't underestimate the challenge of getting this properly drafted so that it doesn't inadvertently apply in a number of cases where it wasn't intended to apply.

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

Fine, thank you very much.

My time for asking questions is up now. I will turn it over to Mr. Pacetti.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I would like to be given some background information, and my question is addressed to Ms. Blanchard and Mr. Fréchette.

How did the pension fund go bankrupt? Because my time is limited, I would ask that you keep your answer brief, as I have other questions to ask.

[Diane Blanchard]

Mr. St-Michel will answer since he has not had a chance to speak yet.

[Pierre St-Michel]

Ordinarily, contributions should have been made to the pension fund to keep it solvent, but those contributions were not made. Furthermore, in the case of retirees from Atlas Stainless Steels, the retirement committee did not have liability insurance, but these people were unaware of that. The contributions were not made and people there did not want to claim them from the company because they wanted it to survive; so we are the ones who paid the price. We gave the company an indirect subsidy with the money from our retirement fund, and that is why we are here today.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So, it was not intentional and everyone was showing good will—at least the employees were. That may not have been the case for the employer.

Briefly, can you tell me whether the 1,200 affected workers are all over the age of 65?

[Gaston Fréchette]

There were between 1,200 and 1,330 employees. There are about 250 left who have not yet reached retirement age. They may be 61, 62 or 63 years old now.

You asked why we lost our pensions. Well, it is because the employer, even though it was required under the legislation… That is why it is a very different situation compared to what Mr. Hamilton talked about. Mr. Hamilton referred to Earl Jones and the fact they had lost their taxes. But our pension fund was covered under a collective agreement, and there was legislation in place guaranteeing that. The employer was required to contribute the money that was missing from the pension funds. It is important not to forget that. I did not invest with Earl Jones to earn 40% interest. We were paying a percentage of our own wages toward our pensions, which were administered by CIBC. But one day, we woke up to discover there was a $55 million loss. So, we should not be lumped in with people who… Nobody likes losing money, but the money we lost is not money we invested… It is our money, and we are not the ones who chose the investments.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I understand. I only have one minute left and I have another question.

How much do your members expect to receive if this bill passes?

[Gaston Fréchette]

Could you repeat your question?

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

How much do your members expect to receive if this bill passes?

[Gaston Fréchette]

Anything we receive will already be greatly appreciated.

We noted that Bill C-290 talks about a 22% credit, which would be very satisfactory. We would be very pleased with that.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Fine, but how much does that represent, on average, for each individual who is affected?

[Gaston Fréchette]

René, I do not understand the question.

[René Langlois, Secretary, Sous-comité des retraités et travailleurs encore actifs de Mine Jeffrey, Association des retraités d'Asbestos Inc.]

We have lost between $5,000 and $6,000.

[A voice]

Yes, between $5,000 and $6,000.

[Gaston Fréchette]

On an annual basis, we have lost between $5,000 and $6,000.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

On average. And what about in your group, Mr. St-Michel and Ms. Blanchard?

[Pierre St-Michel]

In our group, there are a lot of people with pensions of less than $1,000. The oldest ones have pensions of about $800, others, $600, and others still receive even less than that. They are not very large amounts in their case. For the youngest among them, the pension amount is a little higher. There are people who are paying taxes. Some of them are not paying any, but there also some who pay taxes.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So the amounts vary then?

[Pierre St-Michel]

Yes, they vary enormously. However, a lot of people have a pension of less than $1,000. We have not actually calculated the average.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Fine, thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much.

Thank you, Mr. Pacetti.

Mr. Paillé, for seven minutes.

[Daniel Paillé, Bloc, Hochelaga, QC]

It seems inevitable that the bill will have to be changed, but we are not here to nitpick. As I see it, we are here to make decisions.

Mr. Hamilton, when you say that we cannot decide on this or that or the other thing, that just is not correct.

And I would like to come back to the main reason this committee exists, which is to let people know that we are not impervious to their distress. But it just is not possible to compare levels of distress. People are in distress, period. We have people here today who are in distress. In the House of Commons, and in this committee, we have the power to do something, and when you have the ability to do something, as far as we are concerned, you have a duty to act.

From the outset, you have had the support of the Official Opposition, the NDP and the Bloc Québécois. Earlier, you welcomed Mr. Menzies' concern. But we take our hats off to you. You took yours off to parliamentarians earlier, but I think it should be the reverse. We should take our hats off to these people, because what makes no sense. You may laugh, but it is not funny to hear someone say that they have to wait for time to pass, 2011, 2012, 2013—for 60 months there has been nothing—72, 84, 96 months, and on and on, until they die. Yes, that is right: when they die, that will be it.