Hi, there.
I come before you today as one of many thousands of Canadian workers who have been numbed by the abuse of the existing BIA and CCAA processes. I am the person who initiated the petition presented in the House numerous times to change the BIA and the CCAA to protect all Canadians impacted by a corporate bankruptcy to have a preferred status. Unpaid severance has long-term impacts on hundreds of thousands of people, as dipping into retirement savings becomes a necessity to pay mortgages and bills to avoid personal bankruptcy while looking for new work.
On the date of termination I and other severed employees lost all severance, including Employment Standards Act minimums, benefits, and an underfunded portion of my pension. I am downloaded onto the taxpayer's purse, and employment insurance is my only income. EI means barely living above the poverty line. During this global economic recession, a time when it is so difficult for many to get a new job, the government is failing to protect the EI fund and allowing employers to escape paying any severance. Taxpaying Canadians are left to fund the shortfall, despite companies' having billions of dollars on their balance sheets and paying millions of dollars in executive bonuses.
Severed employees are a separate group with no current recourse. Bondholders have access to credit default swaps, a form of insurance available to offset the credit losses and gain windfall profits. In bankruptcy, credit default swaps are an expropriation of an individual's net worth and are not a private matter; they are a public matter impacting thousands of Canadians who are harmed by bankruptcy, yet employees have no ability as such. How can the government allow the judges involved to interpret that it is the CCAA's and BIA's intent for me to be treated like a junk bond holder? The existing archaic acts are assisting foreign investors to reap an inappropriate share of the bankruptcy assets, and with the existing BIA and CCAA, the federal government is leaving me on the street.
In the Nortel case, the U.S. and U.K. unsecured creditors are also after the Canadian purse, with lawsuits against the estate in this specific bankruptcy. EI is paying severed employees in bankruptcy with taxpayers' money, and now there is a significant potential that estate funds will leave the country, as the federal government does not step up and block these out-of-country windfalls. It's the federal government's responsibility to change the act to protect all funds that are to be paid in Canada and to ensure they are kept in Canada. Nortel is a Canadian company, and now most of the financial estate is no longer here.
The hardest hit are employee-related claims. Once Nortel went into CCAA, an unsecured creditor committee was established to work with unsecured creditor claims, enabling other organizations to generate side deals to claim most of their money owed. Employee-related claims are the largest unsecured creditor claims at Nortel, and there is no seat at the table for us. How can this happen? The process is unjustifiable.
Our duly appointed legal representation allowed people to be personally appointed, rather than committee voted, to represent me in an agreement related to a Nortel settlement agreement. The members were forced to sign a non-disclosure agreement that prohibited communicating to us on the Nortel progress. This agreement allowed me to get $3,000--a loan of my personal money owed to me--in exchange for allowing pensioners to have benefit coverages until the end of the year. I am now legally bound by an agreement without being consulted. To me, this is abusive. We were unable to choose our own legal counsel or our personal representation, and now we have no information on our situation because of the non-disclosure agreement. No other severed employees in other countries have been placed in this situation. Canadian severed employees' rights are now relinquished for another's gain.
I fully believe the federal government is legally able to make the CCAA and BIA amendments retroactive to all proceedings commenced prior to the implementation of an amendment in order to protect unpaid severance and unfunded pension owed for hard-working Canadians.
Unpaid severance and underfunding of my pension denies me the ability to save for my own retirement. Loss of severance means reduced retirement savings, reduced immediate savings, and a significant loss to the overall economy due to gaps and lack of process to protect employees in the existing BIA and CCAA legislation.
Severance is part of an Employment Standards Act minimum and a corporate responsibility. With existing federal acts trumping all provincial acts, we walk away with pennies as others receive a windfall. My unpaid severance and pension losses are due to an abuse; it's not a compromise I should be asked to make.