Thanks very much.
If pension liabilities are moved above other creditors in a company, we believe their rating agencies and investors stand to lose billions of dollars. It would increase the borrowing cost for companies and reduce their access to raising funding for investment. I can't underscore the importance of how important the bond market is to Canadian businesses. When a company wants to go out and build a bridge, build a lumber mill, or improve their broadband networks, they go to the bond market first. This is a critical source of funding in the market, and it is where companies will primarily go.
The consequences of implementing this bill will be overwhelming. We estimate, in a report that we published earlier this week, that we'd be looking at something in the order of $4 billion to $7 billion of destroyed wealth. Keep in mind that not all of these investors, these bondholders, are sophisticated mutual funds and insurance companies. Many of the people who hold these bonds are actually retail investors, other pensioners. These people are perhaps not sophisticated enough to hedge some of these bets. I think we should ignore looking at some of the junk bonds, but look at the people who stand to lose: the people who are initially holding these bonds.
Contrary to what you heard on Tuesday, there's also no easy way for bondholders to insure themselves. I believe we could see a number of unexpected and harmful consequences from this bill, in particular--and ironically--an increase in the bankruptcy risk for many companies, as well as a reduction in their capital investment, which would lead to lower productivity and job growth. Canada would be less attractive for foreign investment.
Ultimately, the low interest rate is really to blame. In a few years, as interest rates rise, I think you'll see many of these solvency deficits turning into large, inefficient surpluses.
I'll turn things back over to Mr. Everson.