Finance Committee on April 13th, 2010

[Melanie Johannink]

I will, yes.

[The Chair, Conservative, James Rajotte]

Thank you.

Go ahead, Mr. Marston, please.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you, Chair.

I just want to say, in answer to Ms. Block's question, that the United States, Britain, Australia, and Japan have it in one form or another. In the Netherlands, the government itself backs their pension plans. There's a variety. And as the young lady has just indicated, Australia is still considered the fourth best country in the world to invest in, so they haven't been damaged by this at all.

On June 16, the NDP had an opposition day motion, which set out a road map, and in that motion we talked about a national pension insurance plan. I think it was Ms. Ducharme who said that we insure our cars, our homes, and us, so why not pensions? It's logical. We talked about the doubling of the CPP and investments in GIS and old age security. The reason I raise that is that the motion passed unanimously in the House. Now, mind you, it didn't change law, obviously, but it set out a road map as to where we should try to get to. At that time, the members were in agreement with it.

Ms. Ducharme, I'd like to put a question to you, but before I do, I'll interrupt myself.

To our Liberal colleagues here, the NDP will support Mr. Eggleton's bill. I put a note off to Judy Sgro to that effect earlier. We'd be most pleased to.

There are two CPP doubling plans out there. One is by the Liberals, which talks about a supplementary plan that attaches to CPP, which would require new administration and would be voluntary. The NDP has proposed that we increase the core assets of CPP, with no additional administration, but that it be mandatory. Which would be better?

[Patty Ducharme]

The first was a doubling of the plan, and the second was...?

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

It's a supplementary plan. The Liberals have proposed an additional premium to fund it.

[Patty Ducharme]

I think a mandatory plan would meet the needs of Canadians. Quite frankly, I think when we leave it in the hands of people to make a decision—and we're looking at young families with kids, with mortgages, with student loans, with assorted debt—having a mandatory plan definitely puts us all onside in making arrangements for our golden years.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Further on the LTD issue, when speaking to some people, they've said it would take $200 million to buy annuities to cover the losses for the 400 people at Nortel. I think we heard earlier today they had $2.4 billion in cash assets at the time. It's very clear that companies are getting rewarded for dumping their employees. These same executives have decided not to pay severance. They've decided to proceed with the dismantling of the company and take bonuses to boot. It is outrageous.

I want to thank you for raising Bill C-501 in your commentary. It's a bill the NDP has put before the House. I had put forward Bill C-476 before to address the Nortel situation, but I was too far down in precedence. John Rafferty, the member for Thunder Bay—Rainy River, put forward this bill. Hopefully, we can get the support of other members, because it will be coming forward in this session and will give us an opportunity to deal with that.

I've written myself too many notes in the middle of all this stuff, because it's a little on the complex side.

There's one thing that people did not touch on today. I understand we have our public system. People make some private investments. We have the “three-legged stool”, which was talked about, and RRSPs, but 63% of working Canadians today have no savings and no pensions. The doubling of the CPP strikes me as a foundation for going forward. Nobody is suggesting it's a replacement for what we have or a replacement for the private sector. There's still room. When you see a number that big, I again think we have to address the situation.

I'd like to hear any commentary you'd like to make along those lines.

[Patty Ducharme]

Further to that, only 33% of Canadians have public sector or private sector pension plans. If we're serious about dealing with the issue of poverty and old age, we have to ensure that more people have pension plans, that the pension plans are protected, and that corporations set up dedicated funds they can't steal from during situations of financial hardship. We have to ensure the pension plans are well funded and are used for the purpose for which they've been established.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Gagné, the situation with AbitibiBowater strikes me as being very similar to the Nortel situation.

I've said before at this committee that we have to change the dialogue. We have to start talking about the fact that the pension funds are the property of the workers--it's deferred wages--as opposed to the thinking that it's company assets. Until we reach that level, I think we'll have difficulty moving forward in some of these situations.

For the proposition on the change to the bankruptcy laws, would that still be timely enough to assist AbitibiBowater?

[Renaud Gagné]

There is no doubt that would improve things in future because the company would be released from full responsibility for deficits in the new plan that would be introduced. However, as far as the past is concerned, that would resolve nothing.

Where a company is having trouble coming out from under the CCAA, two or three years later, given that the paper industry continues to decline and to opt for this kind of protection, we still would be no further ahead in terms of our retirees or future retirees, because the plan would still not be deemed a preferred claim.

At the present time, the company is selling its assets and is telling us it will cover the deficit. It is still in discussions with the governments of Quebec and Ontario to find a solution to the payments problem where there is insolvency. Will the money be there? In future, will we be certain that this money is protected for pensioners? I am really not sure about that.

[The Chair, Conservative, James Rajotte]

You have some more time left. You have at least 30 seconds.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

I'd like to hear your opinion on the fact that the finance minister said he's listening to Canadians.

The parliamentary secretary went on a tour. I went to 24 communities and listened to seniors talk about the fact that some women have to eat cat food to get protein. They make $1,162 a month when they're on the GIS and old age security. I know of members on the government side who have seen constituents go to food banks.

In this situation, I think we talk a lot about pensions and such, but I was pleased to hear people talk about an increase to the GIS and OAS as well. There's a tendency in this discussion to look solely at the pension funds, CPP, and private pensions, but we need a top-up.

Mr. Flaherty is visiting communities. We've heard that it costs $375 to attend the hearings. Do you know any seniors who could afford to go to those hearings?

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Marston.

We'll go to Ms. Hall Findlay, please.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you, Mr. Chairman.

Thank you all for your testimony today.

I have a fairly simple question for each of you.

I heard earlier a fair bit of commentary from a number of our colleagues, but in particular from Ms. Block, for whom I have great respect. It was repeated several times that this is a complex issue.

It actually isn't very complex, and amendments to the BIA and the CCAA are actually pretty simple. Changing priority status for a particular group of people is actually a relatively simple concept.

I would like in particular to ask because.... There are two issues. One is the larger pension issue, and the two of you have addressed that very effectively, Monsieur de Margerie. The long-term disability issue strikes us as being--not to show preference--an easier to manage piece of this.

As my colleague Mr. McCallum said earlier.... He did rise in the House today and ask a question. He prefaced it by saying that this should be a non-partisan issue. We have reached out to the government and to the opposition parties to ask if we can address.... At the very least, let's deal with the long-term disability piece.

What has the government said to each one of you as a reason for not acting right away, when we all know it is within our capability to do so? If I can just very briefly ask you, what reason have you been given?

[Melanie Johannink]

When I first initiated the petition, I spoke to my MP and he handed the petition in--the 12,000 one that I got--and he said there's no chance; you guys are just going to be eating on the floor. You guys are at the bottom of the barrel.

[Martha Hall Findlay, Liberal, Willowdale, ON]

But no reason for that?

[Melanie Johannink]

No. And why.... You've got to understand. This is for the people. This is the voice of Canada. This is not just for some junk bond holder to take our money and go and leave the country.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Mr. Hanrieder.

[Paul Hanrieder]

They always talk about the cost of credit, right? If you put the bankruptcy amendments in there, it's going to make people less likely to invest in companies and it would hurt the business interests in Canada.

But as Melanie has proposed, that's less than a 16% impact in countries that have actually done this. So really we think it's a silly excuse. It's time to start moving forward and getting this solved.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Monsieur de Margerie, the cost of capital can't be an issue with regard specifically to addressing the long-term disability piece with Nortel. What reason have you been given?

[Sylvain de Margerie]

The main response I've gotten.... And I'm happy to see that you, Mr. McCallum and Mr. Marston, are aware of the LTD situation already.

I've written letters to all deputies and all senators. The most common response I get is that they are looking at the old age pension situation and they'll take care of it. So they do not realize the dire situation that the people on LTD are in.

[Martha Hall Findlay, Liberal, Willowdale, ON]

So, in effect, it's not a reason, I think.

[Renaud Gagné]

On the government side, they have not really been listening. Other than hearing us out, I have the feeling that they don't understand the pulp and paper industry, even though it has created so many jobs—jobs that have fostered Canada's development. We have received no help whatsoever, and that applies as well to the pension issue. So, we are certainly not out of the woods yet.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Merci.

[Patty Ducharme]

We have not been in a situation such as the Nortel workers to date. So we haven't been given any answers by the Government of Canada.