Thank you very much, Chair, and good morning, committee members. Thank you for the opportunity to be here today.
The Canadian Labour Congress is Canada's largest central labour body advocating on behalf of three million workers across Canada. In the brief time I have, I will focus on divisions 5, 6 and 7 of part 4 touching on the guaranteed income supplement, the Canada pension plan, changes to insolvency rules and amendments to the Canada Business Corporations Act. I will also touch on the Canada training credit.
I want to begin, however, by commending the government for a budget measure that is not contained in Bill C-97, namely its initial steps toward the implementation of a national pharmacare plan for Canada. Canada's unions are eager to see a universal single-payer system introduced in this country to address significant coverage gaps and the drug affordability crisis facing Canadians.
Turning to retirement benefits, Bill C-97 allows the proactive enrolment of CPP contributors aged 70 and over. The CLC welcomes this initiative as a very positive step. The bill also amends the Old Age Security Act to make improvements to the guaranteed income supplement and allowance for low-income seniors.
Extending the GIS earnings exemption to self-employment income, increasing the full exemption and introducing an additional partial exemption are important improvements that will make a meaningful difference in the lives of low-paid working seniors.
However, the GIS clawback will continue to apply to the first dollar of CPP and pension income, RRSP income, EI benefits and other income in retirement. On these income sources, a 75% or higher effective marginal tax rate continues to apply. For this reason, the CLC urges the government to undertake a comprehensive review of the GIS clawback in the context of all income sources in retirement.
With respect to changes to insolvency rules, in our view, Bill C-97's amendments to the Bankruptcy and Insolvency Act and Companies' Creditors Arrangements Act are inadequate and represent a missed opportunity to prevent the injustice of defined benefit plan members and retirees suffering benefit cuts when sponsors enter insolvency.
Bill C-97 will amend the Bankruptcy and Insolvency Act to allow a bankruptcy court to determine whether a share redemption or a payment of dividends in the year prior to the date of bankruptcy was made by an insolvent company or had the effect of making the corporation insolvent. If so, the court can now allow the trustee to recover these amounts. However, this would not have prevented the $1.4 billion in dividend payments approved by the directors of Sears Canada in the years prior to entering insolvency and liquidation in 2017, despite the windup deficit in the pension plan.
There is still no requirement for corporations to notify the pension regulator, much less seek the regulator's authorization if a sponsor with a pension deficit makes a dividend payment or engages in a share repurchase that represents a risk to benefit security.
To address this risk, Ontario introduced the disclosable event regime last year, and regulators in the United States and the United Kingdom have similar powers. The federal government can and must do far more to protect plan members in insolvency. Labour movement has been urging the government to either grant pension claims superpriority status in bankruptcy or introduce mandatory pension insurance in conjunction with provinces and territories.
Turning to continuous learning, Bill C-97 enacts the Canada training credit, part of the new Canada training benefit. The CLC welcomes this lifelong learning benefit; however, we are concerned that the four-week limit on training programs, the 600-hour eligibility requirement and low replacement rates of the EI training support benefit and the fact that the training credit can cover no more than half of tuition and training fees will limit the benefit's effectiveness and reach for low-paid precariously employed workers who most need training opportunities.
With respect to pay transparency, Bill C-97 amends the Canada Business Corporations Act to require federally registered public companies to disclose prescribed information regarding the well-being of employees, retirees and pensioners and the diversity of directors and senior management.
The CLC believes that this information should include the ratio between director and senior management compensation and median employee earnings. It should also include total employee compensation and median pensions and pay received by pensioners as well as the funded status of the pension plan.
Thank you, Chair. My time is up. I welcome any questions the committee might have.