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.
5:05 p.m.
Conservative
5:05 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you, Mr. Chairman. Again, thank you to the witnesses.
To follow up, Mr. Hanrieder, I think you had something to say regarding...if the government does make this retroactive amendment, how certain is it going to be that Nortel employees will get paid?
5:05 p.m.
Professional Engineer, As an Individual
A bad situation is developing there. They've used accounting principles to minimize the cash in the Canadian estate and right now the majority, as Melanie was saying, is in the U.S. estate. They had $2.4 billion cash. Nortel Canada has always been a research and development centre, so they put money into Canada but they called it a cost centre.
Through accounting principles, they've been able to move some of the debts of the restructuring into Canada to minimize the payments that would come to a Canadian employee. So we're in a situation now where potentially 15¢ on the dollar would be paid to a Canadian. A U.S. person could get 65¢ on the dollar, even though they did exactly the same job but just happened to be on the other side of the border.
5:05 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
I understand that. That's why I'm asking. So even if you do have retroactivity--
5:05 p.m.
Professional Engineer, As an Individual
There are possibilities. There are provisions in the NAFTA agreement that could allow equalization between the U.S. estate and the Canadian estate, if our government supports us in forcing that. We could force equal resolution. There are terms in NAFTA--I can provide them to you--that say that in a situation such as this, it has to be equalized and it's agreed by the U.S. government.
5:05 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Because nothing is going to prevent future companies that go bankrupt to plan around this, even though they know that employees are going to suffer.
5:05 p.m.
Professional Engineer, As an Individual
We have to have the preferred status to make the company more cognizant of this, and then they're less likely to induce a bankruptcy to make profits. But if we leave it open, they can keep doing this, and $1.2 billion off your books is pretty darn good in comparison to other options. If they stayed solvent, that would take a long time to recover.
5:05 p.m.
Liberal
5:05 p.m.
As an Individual
Yes. If you included priority for LTD folks above everybody else because they have nothing to begin with, there would be enough money in the Canadian estate to pay them. I also want to point out that even if there is a shortfall in the Canadian estate assets, getting 30% or 40% instead of 15% is a hell of a lot better.
5:05 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
But if there's money missing in the Canadian accounts, how would you be able to supplement that? I still don't see how you can force somebody to bring in money from overseas operations.
My understanding too is that Nortel has not necessarily claimed credit protection in all the countries. I may be wrong.
5:05 p.m.
As an Individual
There are just three countries, and that was an arrangement made through the lawyers to put the money into the U.S. as a holding tank. So again, we're going to be paid out of the Canadian estate, and there has been no discussion as far as any type of equalization.
5:05 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
But there have been some representations from your groups that have been able to make a deal with the judges. What would happen in that case? Would the judges be able to force the money to come over?
5:05 p.m.
Conservative
5:05 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Thank you, Mr. Chair.
Thank you for coming.
Ms. Ducharme, I appreciate your coming in and telling us about the health of the public service plan. But you're really here to talk about an additional CPP plan that the unions are promoting. What does an employee now contribute to CPP? Is it 4%? I can't remember off the top of my head.
5:05 p.m.
National Executive Vice-President, Executive Office, Public Service Alliance of Canada
I don't know the percentage off the top of my head. The integrated amount I believe is 7%, and it's an integrated--
5:05 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Between the employee and the employer. Is that what you mean by integrated?
5:05 p.m.
National Executive Vice-President, Executive Office, Public Service Alliance of Canada
It's 9.9%.
5:05 p.m.
National Executive Vice-President, Executive Office, Public Service Alliance of Canada
It's the total, but it's integrated--the superannuation contribution and the benefit.
5:05 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Okay. So you're advocating--and let's use round numbers--for 18% total. You're asking that it be doubled over seven years. Is that correct?
5:10 p.m.
National Executive Vice-President, Executive Office, Public Service Alliance of Canada
That's correct.
5:10 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
You're asking the taxpayer to come up with half of that. The employee would come up with the other half, so it would double what employees are putting into the plan.
How do you ask your rank and file whether they agree to that? Have you actually asked them if they're interested in doubling their CPP contributions?
5:10 p.m.
National Executive Vice-President, Executive Office, Public Service Alliance of Canada
Are you asking if we've done a referendum with our membership with respect to what they pay?
