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.

On the agenda

MPs speaking

Also speaking

Donald Sproule  Chair, National Committee, Nortel Retirees' and Former Employees' Protection Committee
Bernard Neuschwander  Chair, Québec Region, Nortel Retirees' and Former Employees' Protection Committee
Gaston Fréchette  President of the Subcommittee, Retraités et actifs de Mine Jeffrey d'Asbestos, Association des retraités d'Asbestos Inc.
Diane Urquhart  Independent Financial Analyst, As an Individual
Gladys Comeau  As an Individual
Diane Contant Blanchard  Secretary, Regroupement des retraités des Aciers Atlas, As an Individual
Pierre St-Michel  As an Individual

5:15 p.m.

Liberal

Martha Hall Findlay Liberal Willowdale, ON

But that survivor pension, absent the challenges of Nortel, would have stayed with you for the rest for your life.

5:15 p.m.

As an Individual

Gladys Comeau

Yes, it would, definitely.

It's difficult. What can I tell you? It's nice to see there are those from different provinces here, so I cannot just ask Quebec to help me, but I hope the others do too.

5:15 p.m.

Liberal

Martha Hall Findlay Liberal Willowdale, ON

I will venture, Ms. Comeau, notwithstanding some of the challenges back and forth, that all of us from all parties are very actively engaged and interested in this consultation process.

I want to thank you all.

5:15 p.m.

Conservative

The Chair Conservative James Rajotte

Mr. Fréchette wanted to comment, Ms. Hall Findlay.

5:15 p.m.

President of the Subcommittee, Retraités et actifs de Mine Jeffrey d'Asbestos, Association des retraités d'Asbestos Inc.

Gaston Fréchette

In Quebec, there is even legislation that deals with private sector pensions. Under this legislation, when a worker decides to take his pension, his spouse must be present. If the spouse does not wish to be present, he or she must sign for what will happen if either of the two spouses dies. The legislation has been on the books for about four or five years.

5:15 p.m.

Liberal

Martha Hall Findlay Liberal Willowdale, ON

Thank you.

5:15 p.m.

Conservative

The Chair Conservative James Rajotte

Merci.

We'll go to Mr. Wallace, please.

March 25th, 2010 / 5:20 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Thank you, Mr. Chair.

I want to thank every one of you for coming.

I only have a couple of questions and then I'm going to pass it back to the chair for the chair to ask a few questions.

First of all, Ms. Urquhart, I really appreciate the presentation you gave today and the numbers that are here. I understand you're going to be providing the actual study that you provided to...I don't know if they're clients, or how it works. Do you mind if we have that peer-reviewed? Because numbers can lie and be manoeuvred. To confirm the number of the social services piece, I would feel more comfortable if I got that peer-reviewed. Do you have any issue with that?

5:20 p.m.

Independent Financial Analyst, As an Individual

Diane Urquhart

Sure, in fact work in the public.... It's been broadly circulated with invitations to anyone who would like to make suggestions as to where I may not have it right. So far, no one has produced any contrary studies, but you're more than welcome to send it anywhere in the world.

5:20 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Thank you.

I have one question just for clarification for my own.... We're hearing about September and a reduction of 30%, and so on. Has your pension income, monthly cheque, whatever it is, been reduced yet?

5:20 p.m.

Chair, National Committee, Nortel Retirees' and Former Employees' Protection Committee

Donald Sproule

No, it hasn't--the basic pension plan.... There are other plans where people have had reductions, but for the majority of people, for the--

5:20 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

So are you assuming it's happening, or you've been notified?

5:20 p.m.

Chair, National Committee, Nortel Retirees' and Former Employees' Protection Committee

Donald Sproule

No, we've been notified.

5:20 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Notified, okay. I just wanted clarification.

5:20 p.m.

Chair, National Committee, Nortel Retirees' and Former Employees' Protection Committee

Donald Sproule

In fact we've been under negotiation with the corporation to stretch that out to give us some time.

5:20 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Okay.

I'll pass it back to you, Mr. Chair.

5:20 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you very much, Mr. Wallace.

I want to follow up on some of the questions from Mr. Pacetti.

Madam Urquhart, you were saying Nortel was not forthright. If I understand you correctly, they were not being forthright with respect to their long-term disability plan. My understanding is the same as Mr. Pacetti's. In normal cases a third party, Sun Life or whoever, would manage this so it's not a troublesome thing, as has happened in this situation. Can I just make sure I'm understanding correctly? The company, in this case, was not forthright with respect to long-term disability?

5:20 p.m.

Independent Financial Analyst, As an Individual

Diane Urquhart

They were not forthright with respect to two matters.

They did not adequately advise the employees of Nortel that when they made their own employee contributions to raise the amount paid, or when the employer made his own contributions, those contributions of money were not going to a third-party insurance company. Post-2005, they did admit and give qualifications that this is self-insured, but they would play the role of an insurance company.

The other wrongdoing was that there was a trustee agreement that required employer contributions to be put in each year to fund the present and the future long-term disability wage-loss replacement claims and medical claims. Those employer contributions have not been made for many years.

5:20 p.m.

Conservative

The Chair Conservative James Rajotte

You talk about moving up the pensioners, but you talk about the long-term disability in terms of moving it up in terms of the priority status with the BIA. Do you also then have to amend, whether it's the BIA or another act, to ensure there is accountability and transparency between a company and its employees, as did not happen in this case?

5:20 p.m.

Independent Financial Analyst, As an Individual

Diane Urquhart

We'd like to see the BIA amended, because it's going to deal with all circumstances, now and forever, whether you have a trust account or a trustee agreement or whether you're simply providing those long-term disability benefits on a self-insured basis. We'd like to take this first step with the BIA amendment; it would, however, also make sense to proceed to make other amendments in other areas, such as the federal corporations act, the federal labour act, and all the provincial acts.

I would like encourage the Conservative government not to wait, the reason being the ratification of the UN Convention on the Rights of Persons with Disabilities. It says every actor in the network of actors who is working with the disabled must do what it can to ensure that the rights of the disabled are protected, so I'd like to see the federal government move with the BIA. I'm of the view that it should go now, it should go first, and it should go in any case. We shouldn't wait for the provinces. We should make the further amendments that should be done to repair this problem once and for all.

5:20 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

I had more questions, but my time is up. I enforce it on others, so I'll enforce it on myself.

Go ahead, Mr. Rafferty, for the final round, please.

5:20 p.m.

NDP

John Rafferty NDP Thunder Bay—Rainy River, ON

Thank you, Mr. Chair.

I know everyone's going to run out and get a look at Bill C-501 to see what I tabled yesterday. I'll give you the summary quickly here.

This enactment amends the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act to ensure that unfunded pension plan liabilities are accorded the status of secure debts in the event of bankruptcy proceedings. The enactment also amends the Canada Business Corporations Act to provide an efficacious procedure by which former employees of a bankrupt corporation who were owed amounts by the corporation can proceed with claims against its directors.

That's the summary of Bill C-501. I hope everyone has a look.

Ms. Urquhart, I thank you for talking about the cost, and the cost of not acting, which you talked about earlier. This bill that I have brought forward is a reworked bill from Wayne Marston, Hamilton East--Stoney Creek, and I think it's going to be acceptable to all parties once they have a look at it. One of the reasons I brought it forward is that tens of thousands of forestry workers in my riding in northern Ontario and tens of thousands more forestry workers right across this country, as well as manufacturing workers, did not receive any severance and did not receive any of their pension or their deferred wages. That is going to be a question in a second. What is happening now is that employment insurance is running out for many of those people, and they'll soon be on the welfare rolls, so if you want to talk about the cost of not acting, that's one of the costs.

I have a question for Mr. St-Michel. One of the things you said earlier--and this is my translation, so I hope it's right--is that the employer told you that a pension is a part of your salary that we don't give you right away. I call that “deferred wages”; I think you called it “forgone wages”. I wonder if you'd like to make a few more comments on that in the small time we have left.

5:25 p.m.

As an Individual

Pierre St-Michel

I may not have been clear. I meant to say that it is also a deferred salary. Whether the salary is paid immediately or later...

In the years when we were working, we had no choice: there was a pension plan and we had to pay into it. We were told that part of our salary was not paid to us directly, but that when we retired, it would be guaranteed, we would have a pension. But now look at what has happened. For the past five years, our pensions have been cut by between 30 and 58%, depending on the fund. That is an enormous amount, and we have to cope with it.

5:25 p.m.

NDP

John Rafferty NDP Thunder Bay—Rainy River, ON

One of the things that everybody has to understand around this table--and I think they do now--is that the deferred wages are owed to the workers. They earned that money. That's an important principle to understand.

5:25 p.m.

Conservative

The Chair Conservative James Rajotte

Mr. Fréchette would also like to comment.