Finance Committee on May 17th, 2012

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Marston.

There are about three minutes left in this round. Ms. Nash, go ahead.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I'm just curious. Can you provide us with a bit more detail on those changes to the Air Canada pension plan? Where was there found to be a regulatory gap, if you will, or a change needed in the regulation? What specifically prompted the need for the change in regulation?

[Lynn Hemmings]

In the first instance, it was driven by Air Canada entering bankruptcy protection back in 2004. The regulations provided a funding schedule for making payments into their pension plan.

The second case was simply a funding schedule that was negotiated in conjunction with the unions and the planned sponsors, the retirees, to adopt a funding schedule for the pension plan. They signed an MOU, and subsequently the government put in place the regulations to effect that funding schedule.

[Peggy Nash, NDP, Parkdale—High Park, ON]

So these were changes that were in some shape or form negotiated and presumably under the guidance of OSFI, in terms of making, essentially, amendments to the pension plan. It would have been under the jurisdiction of OSFI, I assume.

[Lynn Hemmings]

OSFI has authority over federally regulated pension plans such as Air Canada, and it is their job to ensure compliance with regulations made under the PBSA.

[Peggy Nash, NDP, Parkdale—High Park, ON]

So essentially there was no regulatory provision for the changes that were made at that time, to avoid bankruptcy or whatever, but because they had been negotiated there was a regulation required to permit what had been done. Is that correct? Am I understanding you?

[Lynn Hemmings]

There are funding rules under the PBSA and the regulations that must be followed. If exceptions are to be made to those funding regulations, then a special regulation has to be introduced to set out what the funding schedule will be, and that was what was applied in the case of Air Canada.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I understand. Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

I'm going to go to Ms. Glover and then I'll come back.

Ms. Glover.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Mr. Chair.

Ms. Hemmings, do you have a copy of the letter that was sent?

[Lynn Hemmings]

I do not. I can certainly submit one to the committee. It is in French.

[Shelly Glover, Conservative, Saint Boniface, MB]

That would be much appreciated.

Who authored the letter?

[Lynn Hemmings]

I don't have the name off the top of my head.

[Shelly Glover, Conservative, Saint Boniface, MB]

I believe it may have been—

[Lynn Hemmings]

Mr. Rousseau comes to mind.

[Shelly Glover, Conservative, Saint Boniface, MB]

Mr. Rousseau and Madame Francine.... What's her name? She's from the NDP, in fact. Francine...?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Are you talking about Francine Raynault?

[Shelly Glover, Conservative, Saint Boniface, MB]

No. Bellavance?

In any event, if you could table the letter, I believe it was opposition members who actually wrote the letter. So further information could be obtained from their own side, if they need further details, but I'd appreciate it.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Glover.

There are four minutes left, Mr. Hoback, if you want to take the time.

[Randy Hoback, Conservative, Prince Albert, SK]

Colleagues, I think I can help you out here. I sat on the scrutiny of regulations committee, so I know how the process works. What happens is the legal.... It brings into a group of all parties made up of both the Senate and the House of Commons, and it will highlight issues that may or may not be a problem. It would make suggestions to have the department remedy a situation so that it would not be a problem.

So in this case, I would assume, it may or may not have been a problem, but they came back to the department and said change it so it's not a problem, guaranteed. So it's mainly housekeeping. It would have been internal legal, and then it would have been all parties that would have vetted it before we got back to this stage here.

[The Chair, Conservative, James Rajotte]

Thank you. That's very helpful.

Mr. Brison, did you have a point?

[Scott Brison, Liberal, Kings—Hants, NS]

Is there any federal fiscal impact of the proposed change?

[Lynn Hemmings]

No.

[Scott Brison, Liberal, Kings—Hants, NS]

Okay. Thank you.

[The Chair, Conservative, James Rajotte]

Okay. Thank you.

We'll go to Ms. Nash, then, please.