Thank you, Mr. Chair.
In response to concerns about the security of workplace pension plans in the context of some corporate insolvencies, the government committed in Budget 2018 to undertake a whole-of-government, evidence-based approach to enhancing retirement security for Canadians. Consultations in late 2018 with workers, pensioners, companies and the public resulted in more than 4,400 online submissions, in addition to formal written submissions from stakeholder groups, on this important issue.
As a result of this work, the government proposes legislative amendments to federal insolvency, corporate governance and pension statutes. These amendments will enhance retirement security while continuing to support Canada's marketplace framework laws as strong platforms for economic growth, innovation and jobs for Canadians.
I'll briefly describe what division 5 of part 4 amends, and it amends a number of statutes.
First it amends the Bankruptcy and Insolvency Act to, first, clarify that the duty of good faith applies to all parties in proceedings, giving courts another tool to ensure that parties act honestly, reasonably and candidly. Second, it provides courts with further powers to address executive payments made before an insolvency, where appropriate, deterring executives from taking actions contrary to the interests of employees and pensioners. Third, it exempts registered disability savings plans from seizure by creditors in bankruptcy proceedings, providing assurance that the funds in these accounts are safe.
Division 5 of part 4 also amends the Companies’ Creditors Arrangement Act, and it does so in three key ways. First, it limits the scope of initial court orders and interim financing. It lessens the chances of extraordinary relief, such as suspension of pension contributions being granted at the outset, and gives courts more time to hear all parties' views before making more consequential orders. Second, it requires creditors to disclose their real economic interests in proceedings, if required by courts, helping to preserve fairness in insolvency negotiations by rectifying information imbalances amongst the parties. Third, in line with the Bankruptcy and Insolvency Act change, it clarifies that the duty of good faith applies to all parties.
Division 5 of part 4 also amends the Canada Business Corporations Act to, first, require publicly traded corporations to report on policies that pertain to workers' and pensioners' interests and the recovery of certain incentive-based compensation, providing more market oversight and encouraging conversations about factors impacting corporate strategy and decision-making processes. Second, it would clarify that corporate directors may consider employee and pensioner interests, among others, in their decision-making, encouraging directors to take a more comprehensive approach to assessing the long-term interests of the company. Third, it would require publicly traded corporations to hold non-binding shareholder advisory votes on executive compensation, facilitating conversations about more balanced executive compensation schemes in certain cases.
Finally, there are changes to the Pension Benefits Standards Act, 1985, which my colleagues from Finance will detail.