Evidence of meeting #7 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.
4:50 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
Thank you very much. Merci à tout le monde.
Is there more time?
4:50 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
If it's all right, I'll share it with my colleague, Mr. Pacetti.
4:50 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you, Ms. Findlay.
Thank you, Mr. Chair.
If I could start, then maybe I'll continue on the next round.
Ms. Johannink, I'd just basically like to take a step back, because I think in your brief you say, “In Nortel’s liquidation, my money will be taken out of the country, forcing me to use my retirement savings.”
What exactly does that mean?
4:50 p.m.
As an Individual
I'll explain that to you. There's a U.S. unsecured creditor committee. The moneys are held in kind of a bank, a repository, in the U.S. The rest of the money is in the U.K. The money in the estate that I would be paid out for my severance is in Canada, and that is next to nothing. So there's no--
4:50 p.m.
As an Individual
The Nortel estate. They keep those funds when they sell off parts of their business. They're keeping it in a holding tank, and that's in the U.S. I think it's Morgan Stanley that's holding that money. So there's no money in Canada. I'll be paid out of the U.S. estate and that money will be gone.
4:50 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Who does the U.S. money belong to, or the U.K. money?
4:50 p.m.
As an Individual
That's the other issue, because there's no sense of equalizing that money to each of the different countries under the BIA. Basically, I will be paid out of the Canadian estate and there will be nothing left.
4:50 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
I'll go back to the other one, because I know you had a point with this, Mr. Hanrieder. What happens with the employees from the U.K. or other employees around the world?
4:50 p.m.
As an Individual
The U.S. might end up with 50¢, 60¢ on the dollar, and the same with the U.K. We might end up with 10¢.
4:50 p.m.
Liberal
4:50 p.m.
As an Individual
Yes, they will. They also have some type of preferred status in their CCAA or BIA equivalent.
4:50 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Okay, we'll continue the discussion.
Thank you, Mr. Chair.
4:50 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. Pacetti.
Mr. Carrier, please.
You have five minutes.
4:50 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
Thank you.
Good afternoon, ladies and gentlemen. I am very pleased that you are able to be here today.
In the Bloc Québécois, we are very concerned about the fate of workers and the economically disadvantaged. In principle, there is some government protection in the form of the Guaranteed Income Supplement, even though we are well aware of the problem of low retirement income and possible pension income losses.
For several years now, the Bloc Québécois has been able to secure the passage of a number of private members' bills that propose increasing the GIS, given that the Canadian government is keeping seniors' income below the poverty line. So, at the end of the consultations that are now underway, I hope that one of the first actions the government will consider is an increase in the Guaranteed Income Supplement.
Having said that, I would like to discuss pensions. We do not all need the Guaranteed Income Supplement. Some people are able, through their employment, to accumulate a comfortable pension on which to live on as they grow older. In January of 2009, legislation was passed in Quebec to ensure that the pension funds of bankrupt companies would be taken over by the Quebec Pension Plan, the equivalent of which in Canada is the Canada Pension Plan. That legislation is not yet in effect, because the regulations have still not been passed. It is very recent; it has been around for about a year. Because this hasn't been discussed by any of you, I would like to ask whether you think this is an option the government may want to pursue for its own pension plan—we talked about the current amount in there—namely, taking over the pension plans of companies that fail?
I would ask that each of you comment on that potential solution. I hope it was clear in the translation.
4:55 p.m.
As an Individual
Sir, I'm going to hand it over to Paul because he's in a different province from me and their laws are a lot different.
In Ontario we have the Ontario Pension Benefits Guarantee Fund trying to help out Nortel workers now. I think Quebec is doing additional work with the income supplements. In Paul's case, there's nothing in his province.
4:55 p.m.
Professional Engineer, As an Individual
Yes, in Alberta, there is no pension guarantee fund, so the 69% that we were talking about will be all an Alberta pensioner will ever receive.
I think there's generalized comfort in doing something like that, especially trying to vest Nortel's pension at this point when the market is so low, a five-year reprieve to allow some of it to recover. It's not all underfunding; it's partly because the market is down so low. If they were to roll up the pension at this point, it could be as low as 69%. If the investments are allowed to recover somewhat in five years, that could be a lot closer to 100% funding.
I agree with you. I think it would work in other provinces.
4:55 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
In the other provinces, you don't have the equivalent of the Quebec Pension Plan. In all the other provinces, the Canada Pension Plan applies. Do you think the Canada Pension Plan could take over the private pension plans of companies that go bankrupt? That would resolve the responsibility issue.
4:55 p.m.
Professional Engineer, As an Individual
As long as there are other rules around it, the quality of the investments and other things, and as long as we had a regulated method to control those pension plans and ensure they were safer than they were privately held, absolutely, I fully agree with that. Anything that will allow these investments to recover at a time when economics have forced everything down would be a great thing.
4:55 p.m.
As an Individual
I'll answer in English because I think some of the anglophones didn't understand your first question.
Quebec is in a unique situation. They have the equivalent of CPP. What they are offering to the companies is...when a pension fund goes bust, it's essentially amalgamated into the equivalent of CPP, RRQ in Quebec, and they administer it. So you don't have to dissolve the pension fund; it can go on, and people can keep on getting annuities. I think that's a very interesting initiative of the Province of Quebec, and definitely it is something the CPP can look at.
For lots of pensioners, having to handle a big cash settlement from their fund being dissolved and having to buy an annuity on the private market is not a good deal.