Human Resources Committee on June 1st, 2020

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

That's absolutely right. Your point is well taken.

As you know, through private members' bills, our party has advocated for the protection of pension funds in the event of bankruptcy. You've always made similar recommendations, but especially at election time.

What would reprioritizing pension fund creditors mean to pensioners?

[Dominic Lemieux]

I'll give you a concrete example. Let's say a business goes bankrupt with a $10-million deficit in pension fund obligations. Banks would be paid before workers, as would insurance companies, municipalities and school boards. If 500 people were already retired, that would mean they would lose up to 20% of their pension benefits, which is a lot to them.

Consider an 88-year-old retiree who receives a small annuity of $800 from her pension fund. If the company goes bankrupt, that retiree could lose $200 of her $800 annuity every month. That would be devastating to her. She can't get that money back, unlike banks. No Canadian bank, insurance company or municipality would be at risk of going bankrupt because it couldn't recover a missing $10 million from a pension fund.

Let's use the example of Mabe, an appliance company in Montreal that went under. The employees lost a big chunk of their pensions. It's not true that the city of Montreal would have gone bankrupt had it been paid after the pensioners or school boards.

What we are asking for is protection for those pensioners. They are often among the least fortunate in society, especially those who are older. They aren't able to start over and rejoin the workforce to earn a bit of money so they can make ends meet. As we see it, that protection is paramount.

The idea is not to hurt companies who file for protection under the Companies' Creditors Arrangement Act. On the contrary, we want to contribute to their recovery. Banks, however, rake in $10 billion in profits every year. It makes no sense for banks, insurance companies, municipalities and school boards to be paid before pensioners. We are asking that pensioners be given higher priority on the list of creditors. We aren't saying that they should be first on the list, but they should be ahead of banks and big insurance companies.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Thank you.

I gather, then, that it's definitely going to take a change in legislation, as we were hoping for. Until then, however, isn't there some interim solution we can work on, some effort we can make to protect people's nest eggs?

[Dominic Lemieux]

Some provinces have special funds, but not Quebec. One thing that would help all Canadians would be to amend the Bankruptcy and Insolvency Act. That would be quick and easy. It's the only way to protect affected pensioners in the short term.

In normal times, businesses go bankrupt, but in times of crisis, many more will. That's why amending Canada's Bankruptcy and Insolvency Act is imperative.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Chabot and Mr. Lemieux.

The final questioner for the evening is Mr. Duvall.

You have the floor for six minutes, sir.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Thank you.

I want to thank our witnesses for coming in today. I certainly respect and appreciate all the work they do for Canadian workers and all the supports they give.

Mr. Dias and Mr. Neumann both mentioned in their statements the amount of SUB money, supplementary unemployment benefits. I know it's a negotiated benefit and that Unifor has done a great campaign along with the steelworkers in trying to get this corrected.

I was told at an earlier session that people are allowed to collect SUB while on CERB, up to $1,000. Were you aware of that?

[Jerry Dias]

There can be, of course, a top-up of CERB of up to $1,000. However, they were very specific in the last communication on May 8 that no SUB could be used, period.

Here's how ridiculous the ruling is. Generally workers would end up on EI to a maximum of $573.00 a week. In the auto industry, for example, we have workers who, over and above that, are topped up anywhere between $400 and $600 a week. If I'm a skilled tradesperson with a $2,400-a-month top-up, $1,000 doesn't do it, if I qualify.

What I really can't get my head around is why the government would stop corporations from paying a contractual obligation. We've had, for example, Ford, General Motors and Chrysler reach out to the federal government to say that they don't understand, that they want to pay, and that it's their contractual obligation. The government's argument was that somehow by allowing SUB to be paid on top of CERB, it would push companies to lay people off to push some of the cost onto federal government.

The fact of the matter is that telling the companies they don't have to pay anything is an incentive to lay people off, because now there's no cost at all, including the payment of the SUB.

It's a foolish strategy.

[Scott Duvall, NDP, Hamilton Mountain, ON]

I agree.

Mr. Neumann, are you aware of the $1,000 that we're now being told you can collect in SUB payments when you're on CERB?

[Ken Neumann]

Yes, that was a recent announcement.

Let me just begin by saying that I apologize that the microphone didn't work for the translation.

I submitted my submission and comments. I hope you had a chance to review them.

We're no different from Unifor. We're in the same situation.

We go to the bargaining table, and we set aside this money, the SUB plans, that we've been encouraged to negotiate. That money has been there. It's been there collectively. It's no different when we negotiate pension plans. That's money that comes out of the package and that is put there for the workers to use when they are in need.

We can't think of a time of greater need than now.

We had early indications that the government was going to allow the SUB to go through, but obviously that's gone sideways on us. I think as Jerry just said, the $1,000 doesn't really get you to what you need if you're in that higher-wage income, if you're a tradesman. We have it in the steel industry and whatnot. We're in the same boat.

It's a ridiculous thing. The government can fix it and they need to fix it. One thousand dollars just doesn't do it.

When there was a commitment initially that they would use the SUB funds.

Those are funds that everybody, in good faith, went to the bargaining table and signed on the dotted line for so they would be there for the benefit of workers when required.

[Scott Duvall, NDP, Hamilton Mountain, ON]

I thank you for that.

Mr. Lemieux, you mentioned the Bankruptcy and Insolvency Act, and I know that you guys have done some great work.

My understanding is that the government feels that the changes made to it a year and a half ago were adequate.

Do you feel that going forward we're going to see a spike in bankruptcies? People are going to be at risk of losing not only their pensions but also thousands and thousands of dollars in termination pay, in severance payments, and in their health care benefits.

Do you believe the government should be acting now to change legislation to protect workers? How essential is it to do that?

[Dominic Lemieux]

Yes, we certainly expect to see bankruptcies caused by the pandemic.

In 2020, it's inconceivable that, in Canada, the interests of banks and insurance companies take precedence over the interests of retirees.

We need only look to the income tax returns retirees file every year, as compared with the huge profits Canadian banks report every single year.

I think it's high time that the government put people before Canadian banks and insurance companies. After all, we are talking about retirees who were the backbone of the country, men and women who worked hard for many years. Changing that piece of federal legislation is paramount, especially during the pandemic.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Again, I thank you.

I know we're running out of time, but I just want to thank Mr. Dias, Mr. Neumann and Mr. Lemieux for all the work they do.

We have to get to the bottom of the SUB payments. I can't understand why the government wants to take away taxable income on something that doesn't cost them a dime.

Thank you very much.

[The Chair, Liberal, Sean Casey]

Thank you very much, Mr Duvall.

Thank you very much to our witnesses. Thanks for your patience with the technological challenges.

Folks, if you wish to supplement your answers in any way, if you were a bit shortchanged on time, it's always an option, to the extent that you haven't done so already, for you to provide further information in writing to the committee. It will be considered, just as your thoughtful testimony has been today.

Thank you—

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

I have a point of order, Chair.

[The Chair, Liberal, Sean Casey]

Mr. Vis, go ahead.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

This is mostly for the committee members. It's really unfortunate. There's a lot of important stuff to discuss in these meetings, and I think it took about 20 minutes to get going in the second round. These are big national organizations that deserve to have a voice at this committee. Whether we agree with them or not, everyone needs to be heard.

I'm wondering what assurances you can give us committee members, moving forward, that some of these technological issues will be addressed. From what I understand, other parliamentary committees aren't facing the same technological challenges that we've been facing on a number of occasions now.

We all want to do our jobs effectively, sir.

[The Chair, Liberal, Sean Casey]

Thank you, Mr. Vis.

Be assured that we are doing our best, and I'm not sure that I agree with your premise that it's only us. We're doing better than we did at the outset, but we still have mountains to climb.

Again, thank you, everyone.

The meeting is adjourned.