Mr. Speaker, I thank you for this opportunity to join the debate on Bill C-237 which is presented by the hon. member for Portneuf to guarantee superpriority to employees in the proceeds that would be realized from the bankruptcy of their employer firm.
This compelling issue, le célèbre fauteuil de mon collègue en face, has been the object of repeated parliamentary and provincial examinations before our Parliament, in seven bills and seven reports. Not only has superpriority been consistently rejected before, but also a fund from government revenues has been refused as was the tax.
In 1992 the previous government was obliged to drop the provisions for a wage claim payment program so as to ensure that the other provisions of the Bankruptcy and Insolvency Act referred to by my previous colleague on this side would be accepted. It did give workers a preferred claim to cover wages earned during the six months that preceded the bankruptcy, up to a limit of $2,000 a person. In striking contrast, the bill before us provides a first priority payment up to a limit of $9,000 per employee in the context of bankruptcy proceedings.
What the act also did, and this is important to our debate today, is it instituted a three-year review to examine the matter of bankruptcy and debt. So it is important not to jump the gun and obliterate that concerted effort of government and stakeholders.
With the passage of the 1992 act a consultation committee was struck, the Bankruptcy and Insolvency Advisory Committee, or BIAC. The government should be given time to exercise the three-year review. This committee, BIAC, co-ordinates consultations of insolvency stakeholders on a multilateral basis. BIAC is enabling us to bring stakeholders into the policy development process early on, and keep them on board right through to the end in a systematic way, to look at the issues and then to recommend options.
In the meantime, Industry Canada has been gathering data on the impact the 1992 revisions have had on the economy. We need to know the full extent of the problem and what is required to resolve it. For example, in how many insolvencies do employees lose wages? How much have they lost in total? Do they receive any of the wages owing from the trustee? How long does this
process take? In past cases how much money was available in the estate for paying creditors?
Related issues abound, many of which are fundamental. Here is one example of an important issue facing BIAC. The Colter and Tassé committees have recommended amendments to the Bankruptcy and Insolvency Act to deal with the increasing problem of international insolvencies. Indeed, in a global marketplace cross-border insolvency problems are not rare. This possibility is gaining huge significance in light of free trade and the NAFTA.
I ask you to bear with me, Mr. Speaker, as I move to a second point, which is one of the absolute issues arising from the legislation that is presented to us today, one with which you are abundantly familiar. As my hon. colleague has referred to previously, that is the priority of the crown which is above all would-be super priorities. The hon. member for St. Paul's gave us a tantalizing glimpse of the problem under this rubric. I wish to reinforce and amplify his remarks.
By way of explanation, under the Income Tax Act the crown has the super priority to a business's unpaid deductions for income tax, Canada pension plan and unemployment insurance. Bill C-237 would put the wage earners super priority ahead of that of the crown.
What is the end result if you do that? The employee might well get compensated for wages lost in the bankruptcy but the crown could find it does not have enough funds to make up unemployment insurance payments. Premiums would have to be raised. The cost of business would necessarily rise. More businesses already facing tighter loan money because of added responsibility for the wage earner super priority would face bankruptcy.
In a telling metaphor the hon. member for St. Paul's spoke of a vast ripple effect. I do not believe this bill pays enough attention to the ultimate reach of that ripple effect on business viability and job creation.
What is a priority? It is a moving, subtle thing that can apparently seem to defy logic. I will give one example, and it will be my final one, in an area touched by the committee on Canadian heritage of which I have the honour to be the chair.
Priority becomes a far more fragmented thing within the information based marketplace. To put it at its simplest level, the government has been approached by one set of representatives of that market and to get to cases I mean authors who are often their own copyright holders.
What happens to a copyright holder when a publisher goes bankrupt? An author-and I can claim to be a modest one in this regard-put years into writing a book, his or her whole life in some instances, his or her mind and spirit, and yet receives little or nothing if the publisher collapses leaving royalties unpaid. The unpaid author has to watch while suppliers quite possibly recover the cost of paper and ink that delivered his very book to print.
There is a system in place that may shed new light on these many interrelated problems that must be addressed together if any hope for a resolution is to be realized. It is in the interest of this country and of its labour force, which this bill wishes to help, that we give our review system, the one I referred to previously, a chance and that we allow a solution to come forth from the concerted effort of government and stakeholders.
It is equally in our national interest that we develop a global approach that allows our businesses to reorganize or to catch their second wind and have another go at it. We do not need or want a piecemeal approach which will only be remembered for its disastrous consequences.
This government wants a concerted effort that has regard for all workers, creditors, consumers and of course the crown itself. For this reason and at this time I do not support Bill C-237.