Exactly!
Evidence of meeting #45 for Industry, Science and Technology in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bankruptcy.
A recording is available from Parliament.
Evidence of meeting #45 for Industry, Science and Technology in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bankruptcy.
A recording is available from Parliament.
Conservative
The Chair Conservative David Sweet
Thank you, Mr. Hanlon.
Monsieur Bouchard, vous disposez de cinq minutes.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Thank you, Mr. Chair.
Good afternoon, ladies and gentlemen. Thank you for coming to testify.
You have spoken about the great difficulties that you have had since losing your respective jobs. In addition to losing your job, you have been deprived of severance pay, and even your pension has been drastically reduced.
I presume that most of you have reviewed Bill C-501. I'd like to hear your thoughts on a solution that could be proposed. What would you say if the federal government assumed the trusteeship of the pension fund, like the government of Quebec, to avoid disposal at a loss? In the case of a quick disposal, the pension funds would really be insolvent, it's true. But if there was a better period, there could be more monetary interest added to the value of the pension funds. Do you think this would provide better protection to retirees with respect to Bill C-501?
Perhaps Mr. Wacheski, Mr. Hanlon and Mr. Hanrieder could answer this question.
As an Individual
From our perspective of being severed, we had an opportunity to extract what pension we could as we got severed. I think an approach whereby a pension is being managed to give an option to some of the pensioners is a good possibility. If the companies funded the pensions properly in the first place, we probably wouldn't be in this position.
I don't know if Paul has anything to say.
Professional Engineer, As an Individual
I can add a few more comments.
I think that would be a favourable opportunity. As some will be aware, the Ontario pension guarantee has stepped up to help with the Nortel pension, but a westerner or anybody outside of Ontario doesn't have those same protections. They're still getting similar impacts to their pensions, despite what Ontario has done. I think that would be a good measure; it would help all pensioners, not just the larger group.
President, Local 2693, United Steelworkers
I think we need to take a look at what we can do in regard to pensions overall. We know one of the problems with all pension plans, whether they're into bankruptcy or not into bankruptcy right now, is the solvency issue. It's because of the downturn in the economy. We need to take a look at that, basically, so we don't jeopardize them.
In regard to CCAA, we need to look at whatever option is there to ensure that the worker is not going to take a penalty and take a cut. We need to have the financial institutions making dollars, but when they're making billions of dollars in profits....
When there was a downturn in the economy, we didn't see any banks across Canada go bankrupt. What we see, though, is that we have to pay $12.95 a month for our bank services and $1.50 to take money out of a machine. We need to look to ensure that the workers are treated fairly and properly, because they have no other opportunities. They can't raise fees here and there. They have to use everything in their power in order to survive.
If you reduce a pensioner's benefits by 20%, 30%, 40% or 50%, all you've done is basically ruin their lifestyle. Some of them can't even afford to continue to pay for their house or to look after and maintain their house. We need to look at whatever is out there in order to ensure pensioners are going to receive what they've earned over their years of employment.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Mr. Hanlon said that the workers don't have many ways to protect themselves when a company goes bankrupt or closes.
The companies told us that if we adopted Bill C-501, there would be an increase in the cost of capital. So we are facing two situations that could be considered to be opposing. Mr. Hanlon, you were talking about means.
Would there be changes or amendments to make to Bill C-501? What could be done to give companies flexibility, but also meet the needs of those people who are concerned, like you?
Conservative
The Chair Conservative David Sweet
Mr. Hanlon, unfortunately the ball has been passed to you again. Can you make it very brief?
President, Local 2693, United Steelworkers
I believe Bill C-501 is going in the right direction in assisting workers. I speak passionately on it, because as a rep and the president of our local I've unfortunately had to deal with the thousands of members who are facing the problems I've spoken about here today.
Can we do anything politically as a federal government to ensure that they have livelihoods, that their pensions survive, and that they get the severance and termination pay they deserve? That's all in our means to do, and we should do it.
Bill C-501 is a good start, but is there something else we can do? We should be doing that today, because the financial institutions aren't going to loan money today based on the changes of Bill C-501. I say that because it's the economy: in the forest industry, lumber prices are down in the toilet--
Conservative
The Chair Conservative David Sweet
Mr. Rafferty is next. You have five minutes, please.
Mr. Rafferty might allow you to continue.
I apologize. It's Mr. Lake first, and then Mr. Rafferty.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
It always feels like 10 minutes when you talk.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
I'm just kidding, Mr. Rafferty.
This is an important part of the process for us. We have a unique panel in this set-up. We're hearing from people who have been impacted. I think it's very important for us to have the opportunity to hear from all of you.
One of the things we've heard as we've gone through the first few panels is that this bill clearly has no retroactive effect. Does everybody have a clear understanding of that? Everybody's nodding. Good.
There's another thing I want to clarify about bankruptcy. So often it seems to get distilled down to a “workers versus big companies” concept, but the reality is that it's far more complicated. Let's face it: in relation to the Nortel company, many of the owners of Nortel were Canadians who had Nortel stock in their RRSPs or pension funds. One hand's up there. I'm sure most of you were in that boat.
Many of those pension funds that held Nortel stocks would have been union pension funds, so the workers Mr. Hanlon talks about would have been impacted by the bankruptcy as well. It's obviously very complex.
Unfortunately, we only get five minutes. Mr. Hanrieder, how old were you when you started working for Nortel, if you don't mind my asking?
Professional Engineer, As an Individual
I started basically out of school, so I was around 22.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
I'm just going to throw the ball to you. Let's say you were talking to someone who was in a circumstance similar to yours when you were at that age and stage in your life, someone who was going to work for a big company similar to Nortel, one that had a defined pension plan and all of those things. I know at that age you probably never had any idea that this would happen. It never would have crossed your mind.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
What would you tell that person if you had the chance to talk to them now?
Professional Engineer, As an Individual
It's a difficult one. You come out of school and want to work for a good employer. You plan to work for that employer for the rest of your life because it's a company with a good pension plan and those kinds of things. Unfortunately, with the way the markets have changed, investment opportunities, etc., have all forced companies to be somewhat less loyal to their employees, so now the employees have to start looking out for themselves.
When I was with Nortel, you always thought the company had your best interests at heart. It's very clear at this point that those best interests were where the money and the shareholders and other things were. Employees have to watch out for that and be able to survive that kind of thing, because there are no other mechanisms. EI, obviously, isn't the case.
Anybody who worked for Nortel was almost a fanatic about being at Nortel. You were fully invested in the company. I know people who gave up their marriages and other things to work overtime for Nortel. They just pillaged their lives because they were so invested in that company. Unfortunately we were multiply invested. We had stock options, RRSPs, retirement savings, etc., all in Nortel, so if anything, we were more than three times affected by this.
November 18th, 2010 / 12:55 p.m.
As an Individual
If I could sum it up, Paul, what I've learned is this: trust no one.
Two months before our company declares bankruptcy, our CIO stood in front of the whole company, and when asked if there was any chance we could be going bankrupt, answered, “No, there is no chance. We have money to lead us through for three years”.
Then we were going to lay off half of my division, and at the eleventh hour they said, “No, let's not lay them off”. A week later they declared bankruptcy. They were just avoiding.... I think they knew what they were doing all the time. It was planned well ahead. I'm sure they talked about it with all their lawyers and everybody else.
In summary, trust no one.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Trust is an issue, obviously, and we've heard that from several stakeholders.
Mr. Hanrieder, being prepared for other circumstances is another thing, preparing on the side. Did you have no idea you needed to do that? It would never have crossed your mind at the time?
Professional Engineer, As an Individual
No. Exactly as Tony said, we were very firmly told, “Don't worry”. There were a lot of people who were very concerned and they were looking for other employment. At that time the economy was much better, and if they had left, they would have landed much better on their feet. They duped us into basically sticking around and holding out to the point of bankruptcy.
I was actually terminated from Nortel, and I was within two weeks of receiving.... Nortel had a policy of giving two months of pay to help find a job. I was within two weeks of receiving my cheque for $87,000. I had not worked for the company for a month and a half when the bankruptcy happened.
