Finance Committee on June 1st, 2010

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

However, in everything that I have read, there is no mention of the word “bankruptcy”. How can a bill deal with bankruptcy if the word “bankruptcy” does not appear in the bill?

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

The tax credit applies in cases involving lost income as a result of pension funds that have declined or have been lost. Our intention and that of the legislators has always been to address cases involving company failures and closures.

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

I agree with that objective. However, I do not see how this bill allows us to attain that objective.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

That is exactly what we asked for and the result we received from the law clerk is what you have in front of you. The intent truly is the one we have explained today.

In terms of the discrepancies between certain estimates, Mr. Page will be appearing as a witness, and you can ask him how he arrived at $53 million. He says there may be other cases that are affected, but as we pointed out in our testimony, we have found no other such cases. Mr. Page says that there may be others and that the cost could be as high as $53 million.

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

Is it true that this bill applies only to pension funds that fall within federal jurisdiction?

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

Most pension plans fall within provincial jurisdiction. This legislation would apply in any province to any pension fund with a deficit following a bankruptcy or closure. It provides a 22% tax credit for incurred losses. When Mr. Page talks about $50 million in his analysis, he is referring to companies in difficulty. We are not talking about companies in difficulty; we are talking about companies that declare bankruptcy or shut down.

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

So, that should limit the cost.

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

Yes, enormously. Our estimate is that it could cost between $1 million and $1.8 million in the first year. That would decline subsequently, because people do not live forever.

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

I understand.

I want to be sure I understand. This bill would apply to all pension plans, provincial or federal. Is that correct?

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

Yes, it would apply to any company with a federal or provincial charter.

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

Fine, thank you.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

I would just like to clarify one thing, Mr. McCallum, with respect to bankruptcies. Obviously, we have always said—and I have said this as well in my speeches—that we are open to any amendments that would enhance the bill without, of course, penalizing the people we are seeking to assist with this legislation. We are not at all against the idea of specifying that this applies to bankruptcies.

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

The current title of the bill is: An Act to amend the Income Tax Act (tax credit for loss of retirement income). We could add to the title by including the words “following a company failure or closure”. That way, it would be in the title and would better describe the intent.

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

Fine, thank you very much.

[The Chair, Conservative, James Rajotte]

Mr. Carrier, please. You have five minutes.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I would like to welcome my colleagues.

I want to commend you on your bill. I found the comments made by Mr. Généreux earlier to the effect that this bill would only help the workers of two companies, to be offensive. You were saying that it would affect 1,400 workers from these two companies.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

It is a little more than that. It is about 1,450.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

In reality, we are not talking about two companies, but of 1,400 workers experiencing financial difficulties because of inconsistencies in legislation that left them unprotected. Our role as parliamentarians is to try and correct the situation and improve the lot of our fellow citizens. Pension plans across the country are currently being reviewed, but if important corrective action is needed immediately, I think we have a duty to take that action.

Earlier, Mr. Plamondon gave an example. When there is an injustice, when someone is wrongly jailed, that person may receive financial compensation for any miscarriage of justice may have occurred. That does not apply to only one individual. It goes without saying that this is a bill that all parliamentarians should support. I would like to ask you something. You were saying that, based on your research, you would be surprised if other companies found themselves in the same predicament. Does that mean that, in each of the provinces, laws have been passed to protect workers and preserve their pension fund?

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

Yes. To our knowledge, that is the case in Ontario and Quebec. It definitely applies to Alberta and British Columbia as well. There are laws in place in all the provinces, and it would be quite exceptional if one province did not have one. As I say, we researched this with the assistance of the network of unions that exists all across Canada. We made inquiries to find out whether other companies were in similar circumstances, but we found none.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Carrier, I would like to give you an example in response to your surprise at Mr. Généreux's saying that this only affects two companies.

In my riding, there is a little boy who has an extremely rare disease. He cannot be exposed to sunlight. When he is, unfortunately, his skin burns. I believe there are only two such cases in Quebec and the condition of the little boy who lives in my riding is even more serious than that of the other individual, who does have some tolerance. I might have thought to myself that it is really unfortunate that this little boy is not entitled to the disability tax credit. And do you know why he is not entitled to it? Because, in order to be entitled to receive the disability tax credit, you must have received treatment. But there is no treatment for this particular disease. In order to receive the disability tax credit, you must be taking a certain amount of medication every week. There are certain criteria to be met. However, there is no medication available for the disease that afflicts this child.

So, I had two choices. Either I could just say to myself: well, it's too bad, but he does not meet the criteria, so he is not entitled to the tax credit. My other choice was to make representations to the Minister. I did not introduce a bill dealing with this, but I did make representations for there to be an exemption, so that this child can receive the tax credit. It was a long process but a fruitful one. And I am doing the same thing now, after meeting with retirees from my riding who told me they made contributions expecting to receive a certain amount of money when they retired and that they have lost a significant percentage of the income.

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I am going to use them.

I heard you say earlier that, according to the bill, this refundable tax credit would not be retroactive. Is that right?

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Yes, that is right.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

So, it is urgent to resolve this as soon as possible. I believe you were talking about bankruptcies that occurred in 2002, were you not?

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

In 2002-2003.