Thank you, Chair.
I appreciate the intervention, and I do recall your earlier statements on the record in support, and I thank you for acknowledging those today.
We did hear directly from the Association of Canadian Pension Management, the Canadian Bankers Association, the Canadian Chamber of Commerce, the Canadian Manufacturers & Exporters and the Pension Investment Association of Canada that this legislation as proposed, with the superpriority as it's written today, would fundamentally alter the risk profile that is assessed by creditors, who in turn would need to adjust their own approaches.
They said, “Should this legislation pass, creditors would likely [need] to adjust for the increased risk profile that would stem from the potential of not having a loan repaid”, and they would adjust in one or more of the following ways: one, “requiring more or different sources of collateral and other credit enhancements from companies that received loans”; two, “applying higher interest rates on loans, which increases the debt servicing costs for companies”; and three, “restricting a company's ability to further draw down credit...thereby potentially precipitating more bankruptcies” and, of course, job losses. They said, “In addition to negatively impacting companies facing insolvency, this would have the broader impact of creating a disincentive for employers to establish—or even maintain—defined benefit pension plans knowing that their access to credit would be constrained compared to maintaining a defined contribution pension plan.”
I think we have heard with great clarity from the folks who are still in the business of operating the companies that are creating the wealth that is required to meet these pension liabilities. I believe we need to listen to those voices just as carefully and perhaps even more so than the folks who are deservedly waiting at the other end of this machine that creates the wealth for the wealth that they've created for themselves over time.
If we proceed with the superpriority, the foundation of that machine that is creating the wealth and the income for retirees and the income for the current workers is irrevocably altered. The credit risk profile is altered. The business proposition for these companies is irrevocably altered. We are playing with fire here, and I am extremely worried for the unintended outcomes that we may cause here.
