Finance Committee on Oct. 17th, 2022

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

There are pension protections in other countries. If you think about severance, which is one of the things we may want to add into this, the States has a severance guarantee of up to $15,000. They don't guarantee the full thing, but they guarantee it up to $15,000.

Europe has a more generous program and a pension backstop that is more reflective of the Ontario regime that you talked about. Ontario is one of the few provinces that have a backstop in case a company goes bankrupt, so that the pensioners at least get $1,500, I believe.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Baker. That's the time.

We are moving to the Bloc. I have MP Ste-Marie with us. We also have MP Gill joining us, of course, who had a similar private member's bill.

Welcome, MP Ste-Marie. The floor is yours for six minutes.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair. I'd like to inform you that I'll be sharing my time with my colleague Mrs. Gill. We will have three minutes each to make it as fair as possible.

Good afternoon, everyone.

I'd like to welcome the newcomers from the Conservative Party to this committee.

Mr. Hallan, my colleague Mr. Brunelle-Duceppe, who sat on the Standing Committee on Citizenship and Immigration with you, has nothing but good things to say about you. It will be a pleasure to have your input on our committee.

I want to welcome you back, Mr. Morantz. Thank you for the tremendous work you've done on this committee. We're very fortunate to have you back.

Ms. Gladu, thank you for being here and for introducing Bill C‑228.

In Quebec, we often say that it's important to work transparently when all parties come together for the common good.

Ms. Gladu, your bill and the way you do things are a testament to the transparent approach. I hope this bill will bring real change for people across the country.

In your remarks, you mentioned a neighbour who worked at Sears and lost her pension when the company went bankrupt.

If your bill had been in force at that time, how would things have gone differently for your neighbour?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you very much for the question.

My neighbour had to continue working for five years, otherwise she would have only received 70% of her pension, which is not a good thing at the end of one's career.

The Sears cases are not the worst. Some people have lost their full pension plan and severance pay.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Excellent, thank you.

Under your bill, your neighbour wouldn't have had to work five more years. Is that right?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Absolutely.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Okay.

I will now turn the floor over to my colleague Mrs. Gill.

[Marilène Gill, Bloc, Manicouagan, QC]

Thank you.

I'd like to thank Ms. Gladu for introducing Bill C‑228. Mr. Ste-Marie brought up the cross-party effort to discuss and amend the bill in a very collegial manner. I think that's a wonderful way to do things.

I will tell you the history of the bill. Ms. Gladu is aware that this bill came from the people. I, for one, can say that my constituents have been asking for a bill like this. Someone mentioned the last session of Parliament, but people have been talking about reforming these three laws for over 20 years. So this is nothing new. The NDP has also introduced several bills—I've introduced three myself. This session, because of the elections, we're talking to the same witnesses again. For example, Canada's Association for the Fifty-Plus, or CARP, supported my bill. CARP supported the bill that we almost had at second reading in June 2021.

Today, I'm hearing the entire committee, and I hope that our study can move forward quickly. I'm not saying that we'll cut corners, but we've already heard testimony on the subject. I would urge my colleagues to read the history of the bill so that we can finally get it passed. It's not perfect, but show me a perfect bill.

I'd like to see insurance included, for example. This bill is a potential solution for all Canadians hoping to recover the part of their salary that's due to them. We need to call it salary; we say pension fund, but this is a deferred salary, it belongs to Canadians. Workers decided to temporarily part with some of their salary to have a decent pension fund. They were promised something, and they should get it.

I don't have much time left, so I'd like to turn the floor over to my colleague Ms. Gladu.

What does she think could be improved? I feel she's very generous, and she was all ears when I was talking about insurance. Insurance was included in the bill I put forward because older people often need medication. What does she think about that?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you very much.

I've been called the most collegial MP twice. That's the way I work. I feel that when we talk to each other, we come up with better solutions.

I quite like the idea of including insurance. Seniors need medication, for one. Having said that, I don't think the federal government is best suited to deal with things like that. Take, for example, passports. Do we want the federal government handling prescription drugs? I don't think so.

I had thought about including insurance in the pension plan, but not for drugs or other benefits because it's hard to figure out the costs. There are many programs out there. It's complicated.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie and MP Gill. You got a lot into that time.

Now we're going to move to the NDP.

To finish this round, we have MP Blaikie for six minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

First, I want to thank Ms. Gladu and Mrs. Gill very much for their work on this issue. People have been discussing the need for legislative change for a long time. However, this legislative gap has yet to be addressed, and as a result, tens of thousands of Canadians have lost all or a significant portion of their pensions.

For New Democrats, this bill is really about recognizing that it's not just capital investment that deserves to be protected. When workers work for a company, they invest their time, talent, and skill. They do that on a contractual basis with certain kinds of returns that are supposed to be there for them. That's not just their wages; it's other things, including their pension.

I think of what workers pay into the Canada pension plan and employment insurance. They pay that sometimes, if they're fortunate to be in a workplace...not fortunate, but in a workplace where people put in the time and effort to unionize and to negotiate pension plans for themselves and their fellow workers.

They also deserve to see that return on investment that was a matter of contract. It's a sad reflection on Canada that at the moment our laws don't guarantee that return on investment, even as people who are already fortunate enough to have the money to put up for the success of certain kinds of companies do get that protection. We know we can protect these investments. We know that through good law, we can make good on the return on investment.

We need to recognize that capital investment is not the only kind of investment that people make in order to see companies succeed. We need to protect that return for workers just as much as, or more than, we do for shareholders and investors.

That, to me, is what this project is about. It's why I was proud to re-present a bill that an NDP colleague of mine, Scott Duvall, had done a lot of work on in the 42nd and 43rd Parliaments. It's why I was glad to talk to both Ms. Gladu and Madame Gill about their respective efforts on the same file to try to come to a common understanding about how we can move forward.

I am happy to hear that we'll be able to remove certain clauses from the bill, which Marilyn made mention of in her opening remarks, and also add in language around the protection of severance and termination pay, which, as I said, is part of the terms and conditions of employment. People deserve similar protection as other types of investment, when a company is ultimately unsuccessful and has to apply for bankruptcy.

When we talk about the kind of general state of decline for defined benefit pensions that we've seen in Canada now for some time, this is not just an important protection for those who did work under a defined benefit regime and can't go back to work another 30 years now that they're retired. They're 70 years old, and the company has gone bankrupt. They don't have that option. They don't have a diversified portfolio in a way that Ms. Gladu was talking about earlier.

It's also an important part of the strategy to protect defined benefit plans that do exist, because we've seen companies like Stelco, for instance, where these loopholes in Canadian bankruptcy law are used as part of a divestment strategy to be able to relieve the company of its obligations under its defined benefit pension plan.

I'm talking about companies where we've seen a Canadian subsidiary declare bankruptcy. It gives everyone a haircut on their pension. It's actually the American counterpart that then takes over the company, and it does likewise. The Canadian subsidiary steps back in, and every time workers are getting dinged on their pension. It's the same company. It's ultimately the same set of shareholders who are the beneficiaries of these moves, and it's the same workers who continue to see a decline in their pension.

This is not just important from the point of view of trying to protect the value of defined benefit plans that are already there; it's also part of talking about potential risk to the culture of defined benefit plans. I hate to say it, because I've been part of a political movement fighting against it, but the fact is that the trend line has been downward for defined benefit pension plans.

One of the ways companies have already adopted that strategy for independent reasons, and have executed the strategy, has been through the deficiencies of our bankruptcy law. That's why it's so important to protect it. It's why, over time, I see this as part of pushing back against that movement of companies divesting their defined benefit pension obligations.

I want to turn the floor over to you, Marilyn, with the little time that I have remaining, to talk about termination and severance pay, and the importance of protecting that as part of the package that workers go to work for every day.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Ms. Gladu, go ahead.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you so much, Chair, and thank you to MP Blaikie for all his work and for bringing forward the bill that Scott Duvall previously brought forward.

As he said, these are deferred wages. There is a contract that you enter into, and you pay into your pension fund. You have severance terms that are all agreed to, and then at the end of the day, when the company goes bankrupt, in many cases executives get their bonuses, lawyers get paid, and it's billions, but people don't get their severance.

I'm absolutely supportive of putting that in here. I think it's important, and we want to make sure workers do get their wages. We talked to many stakeholders in the labour movement, like the Canadian Labour Congress and others, who are happy with the bill and the amendments we've talked about.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie and MP Gladu.

A lot of work has been put in to get us to this point with Bill C-228.

We are going to move to our second round. We have time only for this round, for questions for MP Gladu. I thought we'd get into a third round.

I will take this opportunity to congratulate and welcome MP Hallan and MP Morantz. Of course, MP Chambers, you're a staple here. To MP Lawrence, I have already said it.

In our second round, we'll start with the Conservatives. We have MP Chambers up for five minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

First, congratulations to Ms. Gladu on having this bill brought before the committee, and to all the other members who worked on this over the years.

We've heard some questions about potential or unintended consequences. The truth is, a version of this bill has been debated in various Parliaments over the last 10 years or so. In fact, a study was done in the last Parliament at the industry committee.

Do you think some of the concerns have been addressed previously and we can rely on that in this Parliament?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you for the question.

I would say a number of things.

First of all, I think having a different “coming into force” and giving businesses a number of years to get their fiscal house in order with respect to the solvency of their funds is an important change.

I would also highlight that this bill covers federally regulated pensions. FYI, that's 9% of pension funds in Canada. It's not everything I wanted to do, but, many times, the provinces follow suit.

To MP Blaikie's point on the number of people doing a defined benefit pension, that pool is shrinking. I think all of those things will move us in the direction of good. That's why it's so important to get this bill over the line. If we want to do future improvements and future things, that's great for another day. Really, this is the moment and we need to seize it.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

You talked about some of the egregious examples, previously. Two come to mind, in recent times. One would be the Sears bankruptcy proceedings. The other one is Nortel.

The interesting thing about the Nortel case is that pensioners took a significant reduction in benefits before finding out that the intellectual property at Nortel was worth some $9 billion. The primary beneficiaries of the found IP value happened to be those individuals who advised the company—in the form of legal fees and accountant fees. Those fees increased. Bills were well over a billion dollars, which went to professionals who work in the industry. That example is one of the real reasons why people are frustrated with the current rules, as they exist.

Is that true?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Absolutely, that is true. There are many cases, not just Nortel, where billions of dollars were paid out to others but the pensioners were left on the hook.

As I said previously, larger companies have a greater ability to absorb a loss from one investment, whereas pensioners count on this for their golden years. They don't have the ability to recover.

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Chair, since it's Ms. Gill's bill, I would yield the floor to her, if she has a couple of questions—if that's okay with the committee.

[The Chair, Liberal, Peter Fonseca]

Madame Gill, you have about a minute and a half.

[Marilène Gill, Bloc, Manicouagan, QC]

Thank you, Mr. Chair.

My colleague is very kind. I didn't expect I would have the opportunity to ask more questions.

In recent studies for similar bills, certain stereotypical arguments have been put forward. For example, it was said that businesses would not recover and that the banks wouldn't be as quick to lend money.

What does my colleague have to say about all the scare tactics being used to ensure that this issue won't be addressed in a bill?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Chair, I'd like to thank my colleague for her question.

I believe the situation isn't as bad as the banks are making it out to be. In my opinion, businesses will have to have recovered after three or five years. If they haven't, certain free market risks will come into play.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Gill and MP Chambers.

You were very quick on your feet there, MP Gill. You got it going right away.

We are moving over to the Liberals. I have PS Fillmore up for five minutes.

[Andy Fillmore, Liberal, Halifax, NS]

Thanks very much, Mr. Chair.

Thank you, MP Gladu, for your work on this. Some of the energy was being expended, I think, on trying to make the case that the changes are needed. I don't think energy needs to be expended there. I think everyone around the table is likely in agreement that there need to be improved protections for pensioners. In fact, the government has made a number of changes and would be supportive of the right changes that are contained in your bill, I think, with some adjustment.

I have just a quick question before I go on. The stakeholders you've heard from who felt the three-year coming into force was okay.... Which stakeholders were they?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

The Canadian Federation of Pensioners, CARP, the NDP and the Bloc all felt that five years was too long to allow and that three years would be adequate.