Your last question.
Evidence of meeting #5 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was nortel.
A recording is available from Parliament.
Evidence of meeting #5 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was nortel.
A recording is available from Parliament.
5:05 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
So how can this be avoided in the future if a company does decide to self-insure?
5:05 p.m.
Independent Financial Analyst, As an Individual
I think it would be avoided if you made the Bankruptcy and Insolvency Act.... We'd like you to do that on an urgent basis.
We'd also like the long-term disabled to be put ahead of the other employee groups, because I'm—
5:05 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
So it wouldn't matter if it were self-insured or not?
5:05 p.m.
Independent Financial Analyst, As an Individual
Then it wouldn't matter whether or not you had a health and welfare trust, whether you had a trust account at all, whether you had a trustee agreement. It would be irrelevant. And it would in fact be a very good way to provide long-term disability benefits on a self-insured basis, because you would only have to come up with the goods at the time of the bankruptcy.
5:10 p.m.
Conservative
5:10 p.m.
Conservative
Ted Menzies Conservative Macleod, AB
Thank you, Mr. Chair.
Thank you to all of our witnesses for coming here today. I appreciate how difficult it is to talk about your personal circumstances, so we do appreciate your comments. As much as the opposition is criticizing us for consulting, that's exactly what we're doing today.
I've met with Donald Sproule on a couple of different occasions, and with Diane Urquhart. Hearing from you folks is what we need to do. I am learning more things again today, even after dealing with pensions for two years and hearing from people all across the country.
So for the opposition to suggest that we make a decision right now, we need to know how that decision would impact future pensions.
5:10 p.m.
Conservative
Ted Menzies Conservative Macleod, AB
Well, Mr. Paillé, if you want to talk back, I would point out that I had invited you to my office and asked if you had comments to make and whether you would contribute to this conversation. I'm still waiting for an answer, so if you'd show a little respect and if you have an answer, let's talk about it later on; otherwise, this is my opportunity to ask some questions.
All of the individuals here today at one point were under provincial jurisdiction, and I think that's something that isn't understood. Diane, I think you understand that, and Don, of course.
What Mr. St-Michel just said is very troubling, and what happened to him is absolutely wrong. That sort of thing shouldn't happen.
However, there is provincial jurisdiction and there is federal jurisdiction, and I think there is a lot of uncertainty. When it gets into a bankruptcy situation, it is a federal responsibility, and we've said that we're looking at that. The Minister of Industry is responsible for that and is taking a serious look at it. Believe me, the industry department is watching these hearings and listening to what you're saying, so we do appreciate your comments.
However, there have been some comments made. Ms. Urquhart, over a number of appearances, you have provided us with some good statistics and good comments, but I'm concerned about other comments made about this pension guarantee fund. At a previous appearance, we had Edward Whitehouse speaking to us, a pension expert with the OECD. When John McCallum asked him how good these pension guarantee funds were, Mr. Whitehouse's comment was, “I'm afraid that I don't think there is a good international example of one of these types of insurance funds”, and he went on to make other comments about these in the U.S. and U.K. They're not effective.
We want to find something that's effective. We saw what happened in Ontario. There was supposed to be one there. It's gone.
Do you have suggestions how we can build a better one than all of the other OECD countries have, and who have failed with theirs? Is that where we want to go? Give us some insight, please.
5:10 p.m.
Independent Financial Analyst, As an Individual
I would rather that you spend your time on providing preferred status for the pensioners and the terminated workers and that you give a preferred plus, or super-priority, for the long-term disabled. In that manner we can be assured that when there is money in the corporations the moneys are going to fulfill the commitments of the deferred wage and the insurance-like product that they offered employees.
I personally am not a big fan of public insurance guaranteed plans. I'm concerned that it does give the opportunity for an offloading of legacy costs that were committed to by the corporation. If they have funds to honour those obligations, those funds should be used first. I don't like to see the opportunity to take thousands of people and put them onto a public insurance plan, which is then borne by all corporations.
5:10 p.m.
Conservative
Ted Menzies Conservative Macleod, AB
The concern I have--and this is a personal view--is that if there's a pension benefit fund, a guarantee fund, then it takes the onus away from a sponsor to live up to his or her promise.
5:10 p.m.
Chair, National Committee, Nortel Retirees' and Former Employees' Protection Committee
I'm certainly not an expert in this area, but I know there are proposals around that would actually stop some of the downloading that happens in corporations to the public insurance funds.
When I went in front of the finance committee of the Ontario Legislature to talk about the Ontario fund, I said could you please connect the dots. Yes, the fund is underfunded right now, but if they had priority ranking in terms of bankruptcy, then the Ontario recoveries and payouts for that pension benefit guarantee fund would be reduced. Again, I think it is not an either/or.
I do believe that number one is changing the bankruptcy laws. That would actually allow Ontario, which had an expert commission that said let's increase the payout of that pension benefit guarantee fund.... If you get changes to the bankruptcy laws, that would have a very good feedback loop.
5:15 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you.
Thank you, Mr. Menzies.
We'll go to Ms. Hall Findlay, please.
5:15 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
Thank you, Mr. Chair.
Thank you, everybody, for being here.
Ms. Comeau, a personal thank you. Obviously it takes something to come here and participate, so it is much appreciated.
Can you explain to me—and you'll have to bear with my ignorance of this—a little about what your husband did with regard to his pension to allow you to have a survivor pension? Can you explain a bit about how that worked?
5:15 p.m.
As an Individual
Thank you for asking this.
When it was time for my husband to retire, he opted for a reduced pension--I believe it was 10%--so that if something happened, and of course that was the case, I would receive a pension. As an old age pensioner I have Régie des rentes du Québec, but this survivor pension makes all the difference in the world.
He had 10% off his full pension. That was what we started with. When he passed away, I received 60% of the pension he was receiving at the time of his passing. We're talking about an extra 30%. This is a lot. Think about it: 10% meant 40% more off, and now over 30%, I believe.
5:15 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
Let me get this straight. He agreed to take 10% less than what he was going to get--
5:15 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
In each year that he got 10% less, you were then able to receive 60% of that 10% amount.
5:15 p.m.
As an Individual
Let's say he received 90% of his whole pension. When he passed away I received 60% of that 90%--
5:15 p.m.
As an Individual
--which would be 54%, si je ne me trompe pas. Is that right?
5:15 p.m.
Independent Financial Analyst, As an Individual
I think we also have to consider that his pension, which was 90%, was 60%. People don't retire at their working wage. They get 60% of their working wage. Then he takes 90% of 60%, so now he has 54%. Then she takes 60% of 54%, so—who can do the math here?—that is 35%, and then take another cut of a third--
