Mr. Speaker, thank you for this opportunity to participate in the debate on this bill presented by the hon. member for Portneuf that would give employees and travelling salesmen higher priority than other creditors in the proceeds realized from the property of a bankrupt party.
The bill before us provides for payment up to a limit of $9,000 per person as the first priority in bankruptcy proceedings. The existing legislation does, in fact, cover workers. In it, workers benefit from a preferred claim to cover wages they earned during the six months immediately preceding the bankruptcy, for up to $2,000. The current legislation is not a perfect solution to the wage earner protection issue, but it is an immense improvement from the situation that existed before the Bankruptcy and Insolvency Act was amended in 1992 as a result of Bill C-22.
Hon. members may recall that before then, workers had a preferred claim for only up to $500 in unpaid wages and commissions. That level was established in 1949, when $500 represented three months' wages. Since 1949, numerous attempts have been made to improve wage earner protection. In 1970, the report of the study committee on bankruptcy and insolvency legislation recommended doubling the preferred amount, from $500 to $1,000.
Bill C-60, tabled in 1975, contained a provision for the full super-priority of wage claims up to $2,000.
In 1980, the Standing Senate Committee on Banking, Trade and Commerce assessed three possible solutions. The first was to establish a super-priority for wage claims, ranking them before all secured creditors' claims. This is the solution proposed to us today by the hon. member for Portneuf.
The second proposal was to establish a modified priority for wage earners, ranking their claims before claims of creditors with security on current assets, such as cash, inventory or receivables.
The third possibility was the creation of a wage earner protection fund.
The committee maintained that administering super-priority and modified priority would be very difficult, the biggest problem being how to share the burden among the secured creditors, given the large number of possible guarantees. Super-priority was very likely to limit access to credit for labour-intensive industries. Payment would certainly not be guaranteed, much less the speed of payment.
The Senate committee recommended establishing a wage earner protection fund that would be financed by all employers, based on the number of their employees, and by employees themselves, who would contribute a modest amount.
So it went, that between the Senate committee report of 1980 and the new Bankruptcy and Insolvency Act of 1992, several more reports were to address the same perplexing issue of protecting the interests of wage earners.
In total, there have been seven bills and seven reports all trying to address this recurring issue. Super-priority has been proposed before. It has been examined and rejected, as has the proposal of a fund from government revenues or a tax.
In the coming months, the Minister of Industry will receive the recommendations of the Bankruptcy and Insolvency Advisory Committee that has been struck to look into reform of the Bankruptcy and Insolvency Act. In the meantime, Industry Canada has been collecting data to help us make more informed decisions. When we examine these issues, we need to know the full extent of the problem, and how much it would take to resolve it.
We must be able to answer a number of key questions before we can make intelligent choices on the options available to us.
In how many bankruptcies do employees lose their wages? How much have they lost so far? Do the trustees refund part of the wages owed to them? How soon are these refunds made? To date, how much money has been available from the bankrup parties' property to pay creditors?
I am sure that my colleagues on both sides of the House will want to reflect on these questions before they set about to reform the bankruptcy laws to provide some kind of wage earner protection. We do not have the answers now. We cannot assess the impact that Bill C-237 might have. I would suggest that this House let the government proceed with its fact-finding. I would also suggest that it give the government time to receive the recommendations of the advisory committee. On that basis, I
will vote against the legislation before us, and I recommend that my hon. colleagues do the same.
In total there have been seven bills and seven reports all trying to address this recurring issue. Super priority has been proposed before. It has been examined at some length and rejected as has the proposal of a fund from government revenues or a tax.
In the coming months the Minister of Industry will receive the recommendations of the bankruptcy and insolvency advisory committee that has been struck to look into reform of the Bankruptcy and Insolvency Act.
I believe we need to know and have this report before we can proceed in the best possible way.