This reasonable and necessary benefit serves to attract the talent needed to provide a strong, effective government for this great country. By allowing CCAA to lump severance in with unsecured creditor claims, the value of severance for building strong companies is being lost, and Canada suffers.
The Nortel bankruptcy is one of the most complex international insolvency cases in history. I have only touched on a few issues related to severance. There are many abuses of the current law and many opportunities for improving the insolvency process.
I hope I have provided some points demonstrating that severed employees are a distinct group of creditors. Suppliers and lenders can protect themselves against insolvencies; employees cannot. CCAA takes away entirely timely severance. The severed are most severely impacted, instantly losing their only source of income and the means to support their families. Removing the severance increases the cost to the state and lowers other creditors' returns. CCAA is undermining the value severance brings to building a strong economy.
I hope these points and the discussion following will convince you that changes are required to protect the hardworking Canadians who build the companies and wealth in this country. I urge this committee to work together and to ensure that Bill C-501 prompts the appropriate changes to the CCAA and the BIA to ensure that timely severance is paid.
Thank you.