Finance Committee on April 13th, 2010

[The Chair, Conservative, James Rajotte]

Merci.

[Renaud Gagné]

That would certainly be a step in the right direction. However, at one point we proposed the creation of a trust on an ongoing basis. When money is transferred to the Quebec Pension Plan, it is because the plan is being wound down. If we want the Quebec government to assume responsibility--

[The Chair, Conservative, James Rajotte]

Okay.

[Renaud Gagné]

-- it will first be necessary to provide for assistance from the federal government, so that it can provide protection, be in a position to take greater risks, increase the value and purchase the pension once it is complete.

[Patty Ducharme]

We certainly see economies of scale and efficiencies from rolling them into a larger plan. If it ensures that workers continue to be able to draw their pensions, we would certainly support such a proposal.

[The Chair, Conservative, James Rajotte]

Thank you.

Colleagues, I'll just remind you that if you want to ask a question of all five witnesses and give them enough time, you should try to shorten your questions, if you can, please.

Mr. Généreux, you have five minutes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chairman.

I would like to thank all of you for being here today.

With respect to the problems facing Nortel employees, we are certainly extremely sympathetic. However, I would like to put in context what Mr. Gagné said earlier about the economic crisis and everything else that is occurring in various sectors of the Canadian economy. It has to be said that the current economic crisis is the most significant one we have seen since 1930. There were quite a few others between the two and there have been ups and downs. The fundamental difference between this crisis and all the others that we have weathered in the last 100 years is the speed at which it hit us. It has had a significant impact on today's realities.

Having said that, Mr. Gagné, I would like to address my question to you in particular, because you made a number of interesting comments earlier. You talked about innovation in the union movement, mentioning the member-funded pension plan. That was the term you used. Perhaps you could enlighten us further.

[Renaud Gagné]

The FTQ presented a proposal to the Government of Quebec regarding the introduction of a multi-employer defined benefit pension plan. Under this plan, the employer contribution is a fixed amount. Because it is a multi-employer plan, the companies do not assume the risk. On the other hand, rather than a plan that is limited in terms of the reserve—for example, to 100% or 105%—this type of plan could go as high as 130%, meaning that when there are stock market fluctuations, the pension amount will not be reduced. In other words, there is a need to build up a large reserve, to be sure that the money will be there. The problem we encountered in the past is that companies would take premium holidays when everything was fine, but when the situation deteriorated subsequently, there was no more money left or not enough. So, that is the type of plan we are advocating in future in order to avoid--

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Is it in place at this time?

[Renaud Gagné]

Yes, it is.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Let's talk about the “multi-employer” aspect of it. Does that mean that there can be different kinds of companies that participate, of different sizes and from different industries?

[Renaud Gagné]

Yes, exactly, except that the benefit will differ depending on what you purchase in terms of value.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

In fact, the pension benefit that the worker will eventually receive depends on what he or she has invested.

[Renaud Gagné]

That is the way it is for all companies and all employees, when buying a pension benefit.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

How many members do you represent? You talked about 7,000 workers and 10,000 retirees. What percentage of workers do you represent in each of the three areas?

[Renaud Gagné]

We have 45,000 members.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

In Quebec, how many potential workers do you represent in all the industries combined?

[Renaud Gagné]

Are you talking about these industries?

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Yes.

[Renaud Gagné]

We represent about 80% in the different industries.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

In terms of retroactivity, I would like to address a question to Ms. Johannink.

Regarding the retroactivity you're talking about, what would be the right moment to go back to? What you have lived through with Nortel, of course, has not only happened to you; it has happened to others in the past.

Why do you want to go back?

[Melanie Johannink]

First of all, you have to look at the process and see how broken the process is, when taking a look at getting a BIA amendment and a CCAA amendment to be retroactive to include companies that are currently in it. I don't know how you could take it back any further, but that would also include the Nortel people. They would be covered, as would the AbitibiBowater and Fraser Papers people, whose companies are also going through difficult times.

We had to do the settlement agreement. It was a very quiet agreement that was not even disclosed to us. I was running a significant BIA campaign to try to get a change. I thought I was getting somewhere and then they just slammed us with a settlement agreement that gave me a $3,000 loan.

So the process is definitely broken. A retroactive BIA amendment would impact that agreement, as long as it were retroactive for all companies currently in it.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

The process has happened in different ways in other companies. Other witnesses have come here and told us this happened to them ten years ago in different ways, but the conclusion was the same as what happened to you.

How far do you think the government should go back to compensate all those people?

[Melanie Johannink]

It would be companies that are currently in CCAA heading into BIA.

Paul, can you add to that? You can't go back to companies that have closed their doors. That's just way too late, but you could, under the acts the companies are currently in.

[Paul Hanrieder]

We have to do something sooner rather than later to ensure that companies stop going into bankruptcy just to avoid these costs, right? Nortel saved $165 million on our side on pensioners and over $1.2 billion on other sides by stepping away from these obligations. So we have to do something now that causes some impact so that future bankruptcies for similar reasons are stopped. There has to be some retroactivity to this or else it's some time in the future.