Thank you very much, Madam Chair. It's good to be with you this morning.
I've been involved in this area for 40 years as a practitioner in a firm that represents exclusively pensioners, retirees, workers, insolvencies and of course other matters. In that time we've had some major cases and some major developments, but still we have a real problem with the protection of pensioners and disabled people, particularly in insolvencies. Most recently I've worked on the Nortel case and on the Sears case, or its beginnings, with my partner Andrew Hatnay, who also worked for the Wabush employees; I see they are also here. We've been involved in many of these insolvencies.
Regrettably, in 40 years of doing this, I've seen how hard pensioners get hit. These are unfunded future promises for their labour. Sometimes the corporations can fund them and sometimes they can't. Forty years ago we talked about surpluses most of the time. Now we talk about huge deficits, and also, a sign of the times, lower interest rates. That creates big problems for pensions and pensioners. When there's an insolvency, there is a big hit. We see pensions cut in half or even more, without any protection to speak of under our legislation.
I have to say that during those same 40 years, I and my colleagues have appeared before many committees of the Commons and the Senate. There have been many studies. I remember the first time, in the early 1980s, appearing before Senator Molson's Senate banking committee, when nothing much was being done. Now, at least, in the 2000s, since 2005 and 2006.... We had the wage earner protection program in 2009, and there have been some enhancements since 2018. This legislation has assisted mostly wage earners for lost wages, with maybe some current pension contributions as opposed to the big special contributions that represent the deficits in pension plans. It's helped active employees. It hasn't helped disabled employees who have unfunded disability programs, and it really hasn't helped pensioners in terms of special payments, but at least we made a dent in the early 2000s.
Regrettably, Canada stands way behind other OECD countries in this area. Even the U.S., with its more laissez-faire philosophy, has a pension benefits guarantee fund corporation that protects up to $60,000 U.S. a year in pensions. The U.K. Pension Protection Fund does even better. I think it's about 50,000 pounds. Here in Ontario we have a small guarantee fund that protects all of $1,500 a month in pensions. No other province has anything. The federal government has never acted. We created a wage earner protection fund for lost wages, but we haven't created a special fund for pensions.
In this respect, we are way behind other OECD countries. Other countries, besides the U.K. and the U.S., don't have this issue as much for another reason: They have much better public pension plans and social security programs than we do. Canada is really behind the times in this area. It is sad and an embarrassment, because it hurts pensioners. Having seen the devastation to people's pensions—you'll hear more about it today—we have to do something about it.
As an advocate, I recognize that insolvency is a zero-sum game, but the doomsday scenarios that are painted by those who say lending will dry up if you create a superpriority haven't proven to be true. We have a wage earner protection fund. We have a small superpriority for wages. Lending hasn't dried up.
In this respect, I want to quote some of the academic studies in this area. because there's one thing you can do here. I understand that a totally open-ended situation like Bill C-253, where there's a superpriority for all pension special payments and disabled payments, can be problematic. Professors Janis Sarra and Ronald Davis of UBC's Faculty of Law have done several studies for the federal government. The most recent one was dated January 2019. There was a letter to the Innovation, Science and Economic Development Canada director.
This is not my idea, but I totally endorse it. You can create the superpriority, like Bill C-253, and put a cap on it. They recommend a $50,000 cap for an individual pensioner's liability. That will not dry up lending. It might increase some prices of lending, but we've seen that lending hasn't dried up. The other thing to do is to create a federally sponsored guarantee fund. I should note that you can create a cap and you can make them rank equally with secured creditors.
With respect to a guarantee fund, I understand there are federal-provincial issues, but you should create a study to have the provinces and the federal government work in this area. That is important.
My time is up, so subject to any questions, that's all I have to say.