Thank you, Mr. Chairman.
I am a pension actuary with 30 years of experience. I was asked to read the bill and come along and comment. Having read the bill and having listened to the earlier presentations, I have three concerns.
The first is that the bill as drafted doesn't really live up to its intent. As I understand it, the intent is to create a tax credit for people who were promised things from pension plans and didn't get them. I believe that what the bill does, as written, is give a 22% tax credit every year to everybody in receipt of a pension. So in order to achieve the intent, it needs redrafting.
Second, it won't be an easy redrafting. It's never easy to change anything to do with pensions in the Income Tax Act, because the pension provisions are so complicated.
Again, as drafted, if we just put in the concept that people getting less than they're supposed to get do get a credit, we're going to inadvertently get things like the Ontario Teachers' Pension Plan found when it rechecked all the pension calculations. It found thousands of people who for years hadn't been paid what they were supposed to be getting, because of clerical error, and then they went and retroactively fixed that.
I suspect that if this bill had been in, even if we fixed it to address losses, every one of those people would have been able to collect a tax credit for their prior years when they were underpaid, even though the error would subsequently have been fixed. So you have to zero in on losses and you have to zero in on bankruptcy.
Third, we heard earlier that this is a problem that exists for two companies, that it doesn't exist in any province other than Quebec, and that it won't happen in the future. I don't see how anyone could reach that conclusion. If you look at the Pension Benefits Guarantee Fund in Ontario, you'll see that it guarantees pensions up to $1,000. It doesn't guarantee any indexing.
This means that any Nortel pensioner who receives more than $1,000 a month is going to have a claim for such a credit. And it also means that any Nortel pensioners who receive up to $1,000 a month will have a claim for their foregone indexing because their indexing isn't going to be guaranteed and they will likely forfeit part of it.
So it's not going to be easy to fix the drafting.
Now, if people think this is a laudable intent, I'm sure the people who draft the parts of the Income Tax Act, who deal with pensions, can figure out a way to do this, but I'll be shocked if it turns out to be an easy way, because they're going to have to look at settlement by lump sum, settlement by pension, settlement by annuity purchase, deferred settlements, immediate settlements, settlements subject to guarantee funds, settlements not subject to guarantee funds, and settlements subject to Bill 30 in Quebec. So it's going to be a tricky thing.
The last thing is the fairness issue. I've heard a lot about the injustice, and I understand the injustice. When people are promised pensions and don't get them, they're right to be angry. If it happens to me, I'm going to be angry too.
But there are a lot of people whose retirement savings take hits. In 2008, almost everybody with an RRSP invested in the Canadian stock market took a 40% hit. People who gave their money to Earl Jones lost all their money. People who invested in Bre-X and Nortel lost all their money.
So in retirement savings, unfortunately, we have financial crises, we have investment frauds, and we have Ponzi schemes. We have a bunch of ugly things that shouldn't happen. We have armies of people who take losses. The concern I have is how we decide that certain losses deserve tax credits and other losses get no attention whatsoever.
I know you're short of time, so I'll end my comments there.
Thank you.