Evidence of meeting #44 for Industry, Science and Technology in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pensioners.
A recording is available from Parliament.
Liberal
The Chair Liberal Sherry Romanado
Thank you very much.
Our next round of questions goes to MP Duvall.
You have the floor for six minutes.
NDP
Scott Duvall NDP Hamilton Mountain, ON
Thank you. I want to thank all the guests for coming here today and giving us some feedback on this important issue.
My first question was going to be for Mr. Powell because he has mentioned it, but even Mr. Book mentioned it. There's been talk at committee about delaying when the measures of this bill will kick in. I've heard, and it's been thrown out there, approximately a three-year delay. Would that be for existing...for people who are already in the procedures?
I'm only asking that question because if we allow a three-year delay for when this bill will be implemented the way it's written, to me there would be a race for applicants trying to get there before time.
I was wanting to hear Mr. Powell's comments on that, please.
President, GENMO Salaried Pension Organization
Thank you, Mr. Duvall.
I think when I talk about that and when I look at a three-year delay or some amount of time—I don't know if three years is the correct amount—there does have to be a reordering of the agreements between the borrowers and the lenders. That has to occur, whatever time that takes.
I don't like the idea of saying that it only starts to happen after three years. It goes into effect now and they have three years to make the adjustments, so that you don't legally get into the situation of it being enforceable for three years. You don't give them three years to enter into long-term agreements that would avoid having to fall under the regime of the law. The regime of the law will be there. You have three years to structure yourself to be prepared for it.
I'm not a lawyer who writes legislation. I don't know how you would write that, but that's the meaning that I have.
NDP
Scott Duvall NDP Hamilton Mountain, ON
Thank you.
Mr. Eady, I want to thank you for all the hard work you've done representing the Sears retirees. You're an amazing person, and so is the group you're working with. I know you guys have gone through a hard time.
Would putting the unfunded portion of the pension plan up to superpriority and ahead of other secured creditors, as Bill C-253 will be doing, have helped save the Sears pensioners?
Sears Retiree and Court-Appointed Representative of Sears Retirees, Store and Catalogue Retiree Group
Yes. The simple answer is yes.
NDP
Scott Duvall NDP Hamilton Mountain, ON
Okay. There's been some talk of moving up the unfunded part of the pension in the pecking order but still leaving them behind the banks. Would that have saved the Sears pensioners?
Sears Retiree and Court-Appointed Representative of Sears Retirees, Store and Catalogue Retiree Group
I'm not certain. I don't believe so. There were really only the super creditors and the rest in this case. The employees were part of the super creditors and the banks. I don't believe it would have made any meaningful difference to Sears pensioners.
I don't agree with that process. Pensioners need to be treated at least equally to other debtors with regard to the debt that is owed them. It's easy to say that all creditors are debtors, but you have a different type of debt with a pension plan. It's a long-term outstanding debt. Pensioners have to be treated as super creditors to make it meaningful, and it would have been meaningful for Sears pensioners.
Scott Duvall NDP Hamilton Mountain, ON
Thank you.
Mr. Eady, with regard to the case of Sears—and I know it was devastating for people across Canada and it really highlighted our current situation—do you believe the status quo we have now, the rules, are inadequate? It was so easy for Sears to go into CCAA and claim bankruptcy to relieve themselves of their liabilities and actually make a profit for some others.
Sears Retiree and Court-Appointed Representative of Sears Retirees, Store and Catalogue Retiree Group
That's a complicated question, Mr. Duvall. The situation that Sears found itself in is not unique but it is substantially different from other examples, like that of Nortel. The Sears situation involved a specific business practice the hedge fund used against the company. There are no laws in Canada that interfere in that process. Should there be? Well, that's a wholly different question for another day. Maybe they should be addressed as well. However, in this case they did what was legal, and I'm not here to dispute that.
The CCAA has now morphed from a restructuring law to what appears to be an orderly bankruptcy law. There's no doubt in my mind that Sears knew they were going to close that business out when they sought court protection, but they used the CCAA laws to be able to get DIP money and to organize it, maybe to the benefit of the company and maybe not.
NDP
Scott Duvall NDP Hamilton Mountain, ON
Okay.
Ms. Watts, I want to thank you for the work you do.
Do you believe it is imperative—imperative—that we deal with this issue in this term of government to make sure there are changes made that would protect the pensioners you represent?
Liberal
The Chair Liberal Sherry Romanado
Thank you so much. I think she saw the card waving, so she was very quick.
We have only about six minutes remaining in the first hour. Because there is a transition time for us to log off of this meeting and to log into the next portion, which is in camera, and because we have a hard stop at one o'clock for interpreters, my suggestion would be that we end at the end of the first round, if that's okay with the members of the committee, so we can move into the in camera portion. Is that okay with the committee?
That's perfect. Thank you so much.
With that, I'd like to thank you, witnesses, for being with us today. Your testimony will help us look at this bill through a lens of all of the stakeholders who are affected with respect to pension plans.
Thank you again.
Thank you for your statements and comments.
As a gentle reminder to committee members, any drafted amendments for this bill must be given to the clerk by 4 p.m. today.
With that, I would like to thank everyone for being with us.
Members, if you could please log off this Zoom and log on to the in camera portion, we will see you shortly. Thank you very much.
