Mr. Speaker, it is a pleasure to rise today and discuss Bill C-237. This bill proposes to change the priority of payment of claims provided for in the Bankruptcy Act so that employees be the first to be paid in case of their employer's bankruptcy.
The hon. member for Portneuf is proposing to pay these claims, up to a limit of $9,000, to each employee of the bankrupt business. I congratulate him for this very commendable initiative.
At first glance, and before thoroughly examining the consequences of this bill, I would have been tempted to support it. However, after some deep thinking and research on the issue, I came to another conclusion, at least for the time being.
I would like to remind the hon. member that the contents of Bill C-237 have been proposed many times in the past. And each time, that proposal or another one such as this has been thoroughly examined. I am alluding here to seven pieces of legislation that have been moved since 1970 on the issue of employee protection, as well as seven other reports that were tabled on that issue since that time.
Finally, these failures led the previous government to forgo the provisions relating to the wage claim payment program in order to have other provisions of the Bankruptcy and Insolvency Act adopted. There should be a clear message here.
There is still room for improvements, but the present situation is better than the one which prevailed in 1992, when the act was reviewed.
At that time, employees could expect only $500 if they lost their jobs when their employer went bankrupt. Now, workers have a privileged claim up to $2,000 for the six months preceding the bankruptcy. The new provisions of the legislation provide that no tribunal can approve a proposal unless it includes payment of wages owed to the workers up to $2,000 per worker.
Bankruptcy and insolvency are complex issues, but the general picture is easy to grasp. There is a single cake of finite size. If you cut a bigger slice for one group, let us say the employees, clearly the remaining slices will be smaller. If a super-priority is given to one of the parties, it will be more difficult to pay the others, including secured creditors.
We have no other choice but to look at the whole picture, which requires time, expertise and concerted efforts. We must, at least, have a good idea of the impact one priority will have on all the others. Even if all parties co-operate and work harmoniously, a certain balance will have to be struck when dividing the cake.
Who should carry the burden of paying the employees up to $9,000 in the present difficult situation? What would the consequences of such a measure be on credit institutions, when fledgling or shaky companies come knocking on their doors with a potential debt of $9,000 per employee? What will they say to these companies who might employ more people than they should? Can we accept that they be penalized because they created jobs in an economy where jobs are difficult to come by?
Moreover, should employees show solidarity and assume, with those who really benefit, part of the financing necessary to protect a large work force? Briefly, let us say that we do not know precisely what measure would protect the workers more effectively, but Industry Canada continues to collect data, while the debate goes on. At the very least, establishing a super-priority, whether for employees, creditors or consumers, would have serious implications for everybody concerned.
The whole economy will feel the consequences. Until the government has answers to these questions and many other crucial and closely related questions which directly affect the superpriority issue, it is useless to try to deal with the complexities of specific priority claims. The claims of employees are part and parcel of the larger issue of bankruptcy reform, that we will be debating in upcoming months.
I would be hard-pressed to choose between the priority rights of the employees, or those of the suppliers, who have the right to take back their merchandise, or those of the buyers who made their purchases in good faith, not knowing that those goods were about to be repossessed. Again, if we put companies in such a position that they have to close down or if we create a situation where their available capital will disappear, their employees will have to look for jobs somewhere else.
We are still at an early stage, maybe not so early if one considers the history of Canadian workers, who had been expecting for a long time what they finally obtained in 1992, but nevertheless it is early in the context of the new legislation and of the related review process which should be completed by 1995.
It was a fierce battle from the beginning, and it took 40 years before we could get a revision of the Bankruptcy Act in 1992. There was widespread consultation of the people concerned because lots of diverging interests were at stake.
Perhaps those questions should not even be discussed in the context of general legislation on insolvency. The government must consider a debtor company's capacity to negotiate its successful restructuring.
Again, this is a web of very complex problems. In order to devise legal options that really work, the people concerned and the government must co-operate. We must all work to maintain the process by means of a review after three years and people must inform the government of any aspect which is of importance to them.
Another way to protect the reform, in political terms, is to try to guarantee government the largest possible consensus among stakeholders on any future reform. That is what we are trying to do with our consultation and partnership approach.
I am convinced that the member for Portneuf has no desire to introduce a bill that would imperil the jobs of those very workers that he is trying to protect. I am equally convinced that he would not want to help a small number of workers at the expense of the majority. In no way am I questioning the good intentions of this bill's promoter. I am not necessarily taking sides in this matter. I am merely trying to obtain more information in order to understand the real effect of this superpriority.
In my opinion, the House should consider employee protection in the larger context of bankruptcy, and to do so, it should wait for the results of studies already under way. I also feel that it is too early to evaluate the repercussions of the priorities which, as I said, are mentioned in the new Bankruptcy and Insolvency Act. We must tackle the various aspects of bankruptcy, ranging from the international to the individual level.
The House should go ahead with its review and allow the government enough time to receive its advisory committee's recommendations on the matter. Consequently, the House should reject Bill C-237, at least for the time being.