Finance Committee on April 13th, 2010

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

I'd like to thank each one of you for coming today and meeting with us. As a fairly new member of the finance committee studying these things, I know that these are complex issues, and I really appreciate Ms. Ducharme's observations that these are complex issues that need more than quick-fix solutions. I appreciate that.

I want to take a little bit of time to state that I believe this is why our finance committee has been consulting with numerous stakeholders and individual Canadians like yourselves to get feedback from you on these issues. Also, as was noted by my colleague, our Minister of Finance and the parliamentary secretary have begun cross-country consultations. We have a Senate committee that is studying this very serious issue, as well as at least six provinces that are doing a study provincially.

I want to get a sense from you folks here--and I would open it up to anyone here at the table--if in your view it is important for us to be consulting with Canadians at this time.

[The Chair, Conservative, James Rajotte]

Is that directed at anyone specifically?

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

We could start with Ms. Ducharme.

[Patty Ducharme]

Sure.

I think it's critically important that consultation be taking place with Canadians, with organizations that represent Canadian workers, so unions, associations, and not just with corporate Canada. I think it's critically important as well that we look at this as a collective responsibility as opposed to individualizing the problem.

I know there are currently consultations taking place across Canada about financial literacy. Really, I have to question if a company like Nortel can go bankrupt and the pensioners there are going to have limited access or significantly reduced access to their pension funds. What's the likelihood that Joe or Betty Bop are going to be able to prepare themselves for their long-term retirement?

I think as a society we have to face the fact that we need to overhaul our public pension plan and access to that so that all Canadians are entitled to a minimal standard of living in retirement. At present, it would be our position that when we're looking at less than $15,000 for people to get the GIS, we're not looking after seniors in Canada.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

Ms. Johannink, would you mind?

[Melanie Johannink]

Sure. There are a few issues in my head.

There are going to be a lot of people retiring in the next 15 to 20 years, so you have to look at the broader scope, not just today and into the future. Find out what's wrong, because issues like companies going into bankruptcy do cause a lot of financial hardship for people my age, who have to pay for kids' education. That money just significantly depletes.

There has to be a full, all-encompassing review of what you're doing. If you just focus on the pensions, you're missing out on people such as the disabled, who have kids and who can't work, and then there are the people like me, who are losing a lot of money for their future retirement. I don't want to be a burden on any types of programs when I'm older.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

I appreciate that, and I agree with you, which is why I'm disappointed to have read today in Heather Scoffield's column in the Canadian Press that the Liberals say that the Conservatives have made up their minds and are merely holding useless public consultations to play for time.

This is an important issue, and we need to take the time to hear from Canadians, as you said, on the very complex and multi-layered issues we have in front of us.

I do want to ask you another question, Ms. Johannink. You stated in your opening remarks that the federal government is causing your loss by wiping out provincial employment protection laws that workers fought decades to get. I need to understand better what it is you're referring to there, because I'm not sure what you meant by that.

[Melanie Johannink]

Okay, sure.

When a company declares bankruptcy, you lose all of the Employment Standards Act minimum, which is, on average, a week per year, plus six weeks if you've been there over a certain number of years. So I lost 26 weeks at the table when they declared bankruptcy. I walked out and I was right on the taxpayers' liability. So all those years of hard work to work towards getting an employment standards act in provincial legislation is gone. That completely disappears federally.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

[Paul Hanrieder]

Federal bankruptcy overrules all provincial legislation, and unfortunately, those amounts are protected provincially but not federally. It's a tactic for a bankrupt company to use federal protection to overcome those.

The other gentleman, Mr. Paillé, said.... I really think we need to further enforce these creditor requirements, because people are using them to throw these obligations out the window. If there was more of a requirement in provincial legislation, it would force people to reconsider bankruptcy, knowing that they have those costs.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

Do I have any time left?

[The Chair, Conservative, James Rajotte]

Yes, you have a minute left.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Okay, one more question.

I guess I would throw this question out, again to either Mr. Gagné or Ms. Ducharme.

Are you aware of another country that provides for an unlimited preferred claim for unfunded pension liability?

[The Chair, Conservative, James Rajotte]

We have three people who want to comment.

Mr. Gagné, please.

[Renaud Gagné]

I believe that our neighbours to the South protect pensions up to $56,000 or $59,000. That is a great improvement in terms of protection. If we had that in the pulp and paper industry, I believe we would cover the vast majority of our members. And we don't need to go very far to see that. In Ontario, they already have additional protection that is not available in Quebec.

As was mentioned earlier, we have all kinds of legislation in Quebec on labour standards, notice of termination, layoff pay, and even the Labour Code, in cases of dismissal. We come before Judge Otis, who takes 20 minutes to decide whether someone should be in or not. If we don't defend that person, we can be prosecuted under Quebec legislation. So, things are really becoming very complex.

[Sylvain de Margerie]

The situation is about the same in the United Kingdom as it is in the United States. For example, the pension protection mechanism they use there does not involve preferential status in cases of bankruptcy, but rather, a government guarantee. In that case, the government is the one that goes after the company as a creditor.

Having said that, the situation is completely different when the US government sits down at the table to negotiate in cases of insolvency. There we are definitely not in an equitable position. What we are concerned about is that all of Nortel's assets will move south through the influence of the US government, because the Government of Canada is doing absolutely nothing.

[The Chair, Conservative, James Rajotte]

Merci.

Ms. Ducharme, do you want to add something very briefly?

[Patty Ducharme]

No. I'm quite satisfied with the answers that have been given by the other witnesses.

[The Chair, Conservative, James Rajotte]

Thank you.

[Melanie Johannink]

I can add to that.

[The Chair, Conservative, James Rajotte]

Sorry, members are limited in their time, and everybody is running over their time today--that is unless there is unanimous consent to allow it. She's at about eight minutes plus. Do colleagues want to hear from...?

Mr. Marston, you do. Okay.

[Melanie Johannink]

I have brought a study, if you wouldn't mind me tabling it.

There are three of them. One is from Australia. They moved over to preferred status, and they didn't see any change in the cost of credit. I have that and I can table it.

[Mike Wallace, Conservative, Burlington, ON]

What year was that?

[Melanie Johannink]

It was 2005.

[The Chair, Conservative, James Rajotte]

Can you provide that to the clerk? Then we'll pass it along.