House of Commons Hansard #132 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was bankruptcy.

Topics

Questions on the Order PaperRoutine Proceedings

3:20 p.m.

Beauséjour New Brunswick

Liberal

Dominic LeBlanc LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Madam Speaker, I ask that all questions be allowed to stand.

Questions on the Order PaperRoutine Proceedings

3:20 p.m.

The Acting Speaker (Hon. Jean Augustine)

Is that agreed?

Questions on the Order PaperRoutine Proceedings

3:20 p.m.

Some hon. members

Agreed.

Motions for PapersRoutine Proceedings

3:20 p.m.

Beauséjour New Brunswick

Liberal

Dominic LeBlanc LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Madam Speaker, I ask that all Notices of Motions for the Production of Papers be allowed to stand.

Motions for PapersRoutine Proceedings

3:20 p.m.

The Acting Speaker (Hon. Jean Augustine)

Is that agreed?

Motions for PapersRoutine Proceedings

3:20 p.m.

Some hon. members

Agreed.

The House resumed from October 4 consideration of the motion that Bill C-55, An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make consequential amendments to other Acts, be read the second time and referred to a committee.

Wage Earner Protection Program ActGovernment Orders

3:20 p.m.

Conservative

Gurmant Grewal Conservative Newton—North Delta, BC

Madam Speaker, yesterday when I was talking about participating in the debate on Bill C-55 I mentioned a few changes this bill was recommending, particularly regarding employees. When an employer goes bankrupt, the wages earned by employees should be paid prior to other creditors.

I also talked about the impact on small businesses, as well as financial institutions. I also talked about locked in RRSPs not being part of the payments during bankruptcy.

Then I talked about the bill's impact on students. As members know and as the report states, the Senate banking committee recommended that student debt be eligible to be erased in a bankruptcy five years after the student completed his or her studies. In the case of hardship, the recommendation was that the court be allowed to discharge student loan debt in a period of time shorter than five years.

Bill C-55 does not go as far as the Senate committee recommendation. Instead, the government proposes amending the law to allow student loans to be eligible to be written off in a bankruptcy if a student has terminated his or her studies seven or more years ago. Also, higher student loan limits and higher tuition fees ensure that the students will continue to graduate with higher debt loads. However, many graduates find few job opportunities. If they end up seeking bankruptcy, it is a decision not taken lightly.

The Liberal government is seeking to doubly punish the students. While the Liberals allow their friends and donors to get away with repaying only 2.4% of grants to loans, they expect young people to pay 100% of the student loans. Who are they trying to punish?

I am disappointed to see that Bill C-55 neglects to offer protection to firms that are suppliers to bankrupt companies. The reality is that the bankruptcy of one company can drag down many others with it, especially when suppliers are small businesses.

The current system is unfair to workers as well as to the students. It must be changed. The Conservative Party generally supports these amendments. We will allow the bill to pass, but we will continue to seek further clarifications.

Wage Earner Protection Program ActGovernment Orders

3:25 p.m.

Bloc

Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC

Madam Speaker, I listened closely to the speech by the member for Newton—North Delta. I was pleasantly surprised by his remarks on student debt and bankruptcy by former students.

People are often prejudiced against former students. They think that declaring bankruptcy is easier for graduates than for other socio-economic groups. They also believe that students are more eager than others to get rid of their debts by declaring bankruptcy. However, as the member for Newton—North Delta said, it is not easier for graduates than for anyone else. In reality, this must be a very psychologically and emotionally difficult process.

No doubt the member for Newton—North Delta would be willing to support an amendment that the Bloc Québécois intends to move in committee on this particular aspect of Bill C-55. Why make former students wait seven years before they can discharge their student debt when declaring personal bankruptcy? This waiting period is so arbitrary, as was the ten-year waiting period set out in the previous legislation. Why not five, four or three years, or even nothing?

In keeping with its commitments in recent years, particularly those set out in its 2004 election platform, the Bloc Québécois will move an amendment in committee to eliminate this mandatory waiting period before former students can discharge their student debts during a personal bankruptcy.

I want to hear what the member for Newton—North Delta thinks about this.

Wage Earner Protection Program ActGovernment Orders

3:25 p.m.

Conservative

Gurmant Grewal Conservative Newton—North Delta, BC

Madam Speaker, I appreciate the comments of the hon. member from the Bloc, and I do think that how students are treated in this country is a serious concern, particularly when we know that tuition fees have been skyrocketing.

In British Columbia, the average student tuition fee is about $5,000, but students make barely $10 an hour when they work to finance their education. On average, a student graduating with a bachelor's degree owes more than $20,000 in government debt. Private loans are not included in that amount. A government debt of $20,000 is too high. Then, when students graduate, they find that either there are not enough jobs for them or the jobs are not the type where they will be making enough money to pay back their loans. This is a serious concern.

On the amendment the hon. member is talking about, the time period for terminating the debt used to be 10 years after the students terminated their studies, but the Senate committee has recommended that it be five years. The government is saying it should be seven years. I do not think there should be any time limit like that. The member is right. There should be no arbitrary time limit. It should depend on the student's circumstances. If the student is facing undue hardship in repaying the borrowed money, the limit is supposed to be lower than five years, but again, it is not very clear.

Therefore, I suggested toward the end of my speech that we would be seeking clarification on those amendments. We will review the amendment the member is talking about once the amendment is made; this amendment has not been made in committee. We are open to the amendments. The Conservative Party does not want either students or workers to suffer. That is what I explained earlier and argued for in the bill.

I look forward to the amendment the member is suggesting, Then we will make a decision. Certainly we do not want to punish students when they try to get higher education by borrowing money for their studies.

Wage Earner Protection Program ActGovernment Orders

3:30 p.m.

Conservative

Jim Abbott Conservative Kootenay—Columbia, BC

Madam Speaker, I am very pleased to rise to speak to this bill, primarily because in the 13 years that I have had the privilege of being the member for Kootenay—Columbia, I have always taken very seriously the issue of workers and people in my community who are in the labour market .

This was driven home particularly in 1993, immediately after I was elected. There was a massive bankruptcy of a very major corporation in my constituency. There were wages owed. There were very severe difficulties with pensions. I am proud to say that through the hard work of my staff and my office in Cranbrook we managed to do what was right for the workers, at least to the greatest extent possible.

I have never wavered in my commitment to the workers or to the companies and businesses in my constituency and I try to represent them as aggressively and as well as I possibly can in this chamber, but it was through that massive bankruptcy and the work we had to do on behalf of the people who had been formerly employed by the bankrupt company that I became acutely aware of some of the stories of real hardship.

It was therefore very interesting to me to be working and finding myself in a small degree of agreement with the member for Winnipeg Centre. It is very difficult for me to have any kind of very frequent connection with some of the more socialist thoughts of the NDP. NDP members have a tendency to be a bit pie in the sky; however, the member for Winnipeg Centre and I, although we have had some differences of opinion, have also found some common ground.

Certainly, the way that the NDP was proposing to handle this issue to be able to give greater protection to workers in the event of bankruptcy was not one that was possibly acceptable to my way of thinking and certainly not to my caucus or the leader of our party. So what we did was sit down together, recognizing that there was a common objective. We wanted to arrive at the same place.

We sat down. I am sure that in speeches prior to mine from members of our caucus, members have heard our very competent member of the shadow cabinet stand in his place and describe the fact that we actually formed an ad hoc committee within our caucus, under the leadership and with the direction of the leader of the Conservative Party, to try to take a look at how we could resolve this issue.

We took a look at two things on the basis of the initiative that had been brought forward by the member for Winnipeg Centre. The first was the issue of wages and the second was the issue of pensions in the event of bankruptcy. We decided that those two issues, although they appeared on the surface to be the same, were significantly different, certainly in the way in which bankruptcy could handle them.

Then, when the Minister of Labour and Housing came forward with Bill C-55, I took a very hard, independent look at the bill, along with the other members of our caucus committee, and came to the conclusion that, while the government had approached this from a different angle than we would have approached it, nonetheless there were some real grounds to be able to move forward and the nitpicking and the details could be taken care of at committee.

I note that the majority of bankruptcies occurs in sectors that employ a large number of workers who are low paid, part time, or on temporary contracts, who do not have the protection of a union. This does not mean that this bill will not be applicable to workers who are part of a union or to workers who are part of a larger corporation, but the reality is that 60% of bankruptcies occur in the retail, food and accommodation, personal services, and small manufacturing sectors. The other interesting statistic is that 70% of bankruptcies occur among businesses with fewer than 10 employees, which also tend to offer precarious conditions of employment.

The $3,000 cap ensures that the basic levels of earnings are covered. The $3,000 cap means that the amount eligible under the wage earner protection program, WEPP, would be equivalent to one month's annual industrial wage for full time workers or four weeks' maximum insurable earnings under employment insurance. The $3,000 cap is sufficient to cover virtually all wage claims due to bankruptcy because the current average claim is about $1,500 and 97% of current wage claims are under $3,000.

There will always be exceptions. I can imagine a time when, unfortunately, there may be a bankruptcy which we perhaps cannot even foresee at this particular point and someone is going to try to stuff my words back into my mouth by saying, “See, I was one of those people over $3,000”, or “See, this was a large corporation”.

Those statistics are nonetheless very meaningful statistics and we have to do legislation in the chamber that is reflective of what is going to do the most good for the most people.

I have always cautioned people, whether they are managers or whether they are people in companies that have unions or do not have unions or whatever it is; it does not make any difference. I have said that we have to be very cautious. In a bankruptcy, the reason why there is a bankruptcy is that, by definition, the liabilities exceed the assets that can be liquidated and realized against those liabilities.

In a situation where we have a company that has gone into business in good faith and has basically said that it needs a $10,000 line of credit or a $100,000 line of credit from whatever the lending institution is, the lending institution then takes a look at the covenant, the person and the assets. If the lending institution wants to protect itself against a rather large amount of money, it asks what it can do to legally attach an asset to make sure that it will be repaid. That is simply called security. The money is advanced.

This bill does not affect that money. As I have explained again and again to people who have talked to me about this issue, it is very important to understand that when we say we are going to allow wages to be taken in advance of money that could be realized from a fixed or a secured asset, we depreciate the value of that asset and therefore lower the amount of money that would be available to the company in the first place. That is a very, very important consideration.

I see my friend from the NDP shaking his head. He cannot argue with the reality. If he were a lending institution, which I am sure would be unusual for an NDP member, and he could have a $50,000 asset, he would be prepared to advance up to $30,000 on that $50,000 asset. If someone told him that wages could possibly take $10,000 or $15,000 away from that asset in the event of bankruptcy, he would have to rethink how much he would actually be prepared to advance to the company in the first place. Anything that is done to reduce the value of a security for a potential lender reduces the amount of money the lender will give to the company. There is no way around that.

Therefore, I am a little concerned about the unsecured creditors, the people who would be providing the widgets, the gaskets, the switches, the rods, the clips, the flanges, the paper or the copiers, whatever it is that is being provided to the company on an unsecured basis. For those companies, particularly if this is an ongoing business and they become concerned about the potential of the business going into bankruptcy, in regard to the availability of credit, because there can be a charge with the superpriority that is put into this legislation and the potential for there to be this charge, there is going to be some difficulty and some reticence on the part of unsecured creditors in dealing with existing businesses.

Nothing comes for free. The money has to come from somewhere and it should never come out of general revenue. This is a business venture in which people are deciding that they are going to be working for wages or working for some form of remuneration.

That said, I believe, as does my party, that there is more than sufficient merit in the bill for it to move forward at second reading. When it gets into committee, all of the details that our critics and I are concerned about can be looked at.

I think there is a sufficient spirit of cooperation in this House to see that workers are properly taken care of. We should be able to come back from committee with probably an improved bill.

Wage Earner Protection Program ActGovernment Orders

3:40 p.m.

Chatham-Kent—Essex Ontario

Liberal

Jerry Pickard LiberalParliamentary Secretary to the Minister of Industry

Madam Speaker, I really appreciate the presentation that I have just heard. It was dead on, in my opinion. Oftentimes both sides of the House do not agree.

The point the government has been trying to make is there needs to be balance. There needs to be balance between the workers, balance between the lenders and borrowers, balance that keeps jobs, balance that keeps our business flow in an appropriate system so that money will be lent, so that workers will be protected and so that the system works.

My colleague across the way presented his case so well. Does he see any other way to bring further balance to the system? Our goal was to bring balance, which I believe is there. There may be some added things my colleague could bring forward because he was so good on what he presented.

Wage Earner Protection Program ActGovernment Orders

3:40 p.m.

Conservative

Jim Abbott Conservative Kootenay—Columbia, BC

Madam Speaker, I appreciate the comments. It must be a frosty Friday, because I am agreeing with a Liberal.

One of the other ideas which I think really deserves a look-see is the idea of there being a small contingency fund put into the EI fund, that is, not from EI premiums. There should be a small contingency fund set into EI funding so that does not come out of general revenue. There might be consideration taken to not having the superpriority. In other words, it would be paid out of the fund from the extra premium that would be collected on EI funds. That way the actual cost of this potential benefit to the workers would come directly from their employment.

That would be another way to do it. It would not upset the relationship between the borrower and the lender.

Wage Earner Protection Program ActGovernment Orders

3:40 p.m.

NDP

Yvon Godin NDP Acadie—Bathurst, NB

Madam Speaker, I would like to thank the hon. member for Kootenay—Columbia, who is agreeing with the Liberals today. He also agrees with the NDP. I think he is on the right track for the future. He is welcome, with his good sides, leaning somewhat toward the left, perhaps even with a socialist touch.

Does the hon. member really think that today, in 2005, the situation is acceptable? Take for example a Canadian working for a company, who has completed his or her week of work. The fact of the matter is that companies seldom go bankrupt overnight. One seldom wakes up on Friday morning and, by evening, the company has declared bankruptcy. Knowing that bankruptcy is imminent, how can one figure that the employee, the man or woman, the Canadian who has worked for a company does not deserve to get paid for the work he or she has done for that company?

I believe that the situation is unacceptable. This shows lack of respect for workers. If legislation is in place which applies to all companies and financial institutions across the country, does the member really think that financial institutions are going to refuse to lend money to a company? Will they say, “We do not lend to companies”? I for one do not think so. This is but one of the ways that workers are penalized, like with pension funds in the event of a bankruptcy.

I would like the hon. member to comment on that.

Wage Earner Protection Program ActGovernment Orders

3:45 p.m.

Conservative

Jim Abbott Conservative Kootenay—Columbia, BC

Madam Speaker, the money has to come from somewhere. That is the reality.

The bill effectively makes sure that compensation up to a cap of $3,000 is taken care of. The statistics that I have read out are that the actual amount that will likely be sought by workers will only be $1,500, statistically.

I think that all members of the House are in agreement that there must be respect for the work that people do and that they must be properly compensated. That is taken care of.

The difference between the NDP and me and particularly the Conservative Party is the recognition that somebody somewhere has to pay. If I pledge an asset and if that asset could potentially be depreciated by the amount of potential claim against that asset by workers, then that will be the value of the asset. It will be the value of the asset minus the potential claim which will be the net value of the asset and that is the amount that the lender will choose to lend.

We cannot as politicians say to a lending institution that it must lend money. That institution must make that choice. It is a voluntary choice.

Wage Earner Protection Program ActGovernment Orders

3:45 p.m.

Liberal

Brenda Chamberlain Liberal Guelph, ON

Madam Speaker, I really enjoyed a lot of the remarks made by the member for Kootenay—Columbia. I appreciate the support for this legislation. It is important legislation.

I rise in the House today to speak to Bill C-55, an act to establish the wage earner protection program act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make amendments to other acts. The House has witnessed much good debate on this legislation already. I know it will continue in committee should the House see fit to send the bill there, and I feel very confident that it will.

I think all in the House would agree that this is a very important piece of legislation. It is the result of extensive consultations with Canadians and stakeholders all across this great country.

The bill's four main objectives are to encourage viable but financially troubled companies to restructure as an alternative to bankruptcy, to better protect workers' claims for unpaid wages and vacation pay, to make the bankruptcy system fairer and reduce abuse, and to improve the administration of that system. These objectives offer positive changes for businesses and employees alike. This will serve to help the continued strength of our economy.

I know full well the difficulty that people experience when a company is in financial difficulty. The turmoil people personally feel is hard on them and their families. They worry about their next paycheque and what will happen if worst comes to worst and their employer shuts down. That alone is very hard on families. Then begins the task of recovering the wages that other people owe them. It is not pleasant and a task many Canadians consider far too difficult. For those who do attempt it, far too often they find, quite frankly, that they are unsuccessful.

That is one of the reasons I support this bill. We are making workers' claims for unpaid wages and vacation pay a higher priority than secured creditors' claims in bankruptcy situations. Workers will benefit from a limited superpriority for unpaid wage claims up to $2,000. The people who need it most will be given increased priority.

This legislation also establishes the wage earner protection program. The responsibility for this program will be housed under the portfolio of my colleague from southwestern Ontario, the Minister of Labour. He is very familiar with the challenges facing hard-working Canadians. Quite frankly, I cannot think of a better minister to administer this program.

The minister has indicated that an estimated 10,000 to 15,000 workers in every workplace across this country in both federal and provincial jurisdictions are left with unpaid wages or reduced pensions due to employer bankruptcies in Canada. The wage earner protection program will for the first time in history provide workers with a guaranteed payment for unpaid wages up to $3,000. This is a good thing and I am proud that the government is acting.

I also like the fact that the government will recover a portion of the cost of this program by making claims against the employer's estate, thereby making it unnecessary for an employee to do so. I know that some of my colleagues in the New Democratic Party have questioned the sufficiency of only being able to draw $3,000 in back wages. I think that is a fair question and one which should be given further consideration in committee.

The minister indicated that the $3,000 figure represented approximately 97% of the usual amount of wages lost. If the committee has a reasonable recommendation of a different amount that members can support, I look forward to giving it every consideration. From the minister's remarks in the House, I would say that he does also.

I also know that my colleagues in the NDP have questions about the limited superpriority for wage claims up to $2,000. Here again I think that the committee has work to do. The minister has indicated that there is evidence to support this figure. I think the committee should see what this evidence is and should give that serious consideration also.

Concern over their pensions is another issue that many Canadians worry about when their employer goes bankrupt. I am glad to note that Bill C-55 addresses this too. Many workers rely on their company pensions for retirement. Faced with the loss of this retirement income, many would be put into severe financial difficulty. It is just not right that the pensions of those workers are sometimes used to pay other creditors instead of being returned to those who have paid into them. The proposed reforms would improve on this situation.

One of my colleagues from the reform alliance Conservative Party was concerned that these initiatives might relocate the burden from employers to government and that these initiatives might encourage companies facing potential bankruptcies to offload responsibilities to government. The government is aware of this possibility and has taken that into account in the legislation.

We are seeking to help those employees who have faced an unfortunate and unexpected event, not to shift the burden to the taxpayer or government. If the provisions within the legislation to this end are not sufficient, I am sure that the committee will come forward with additional recommendations.

Wage Earner Protection Program ActGovernment Orders

3:50 p.m.

Conservative

Dick Harris Conservative Cariboo—Prince George, BC

Madam Speaker, I rise on a point of order to perhaps help the member opposite who referred to a party in the House as the reform alliance Conservative Party. I know no party in the House that has those names. There is the Conservative Party of Canada which is the official opposition of this Parliament.

Wage Earner Protection Program ActGovernment Orders

3:50 p.m.

The Acting Speaker (Hon. Jean Augustine)

Thank you for the information but that is not a point of order.

Wage Earner Protection Program ActGovernment Orders

3:50 p.m.

Liberal

Brenda Chamberlain Liberal Guelph, ON

Madam Speaker, since I have been in the House as long as the hon. member, I know he was a member of all those parties.

It is my understanding that my colleagues across the way will seek to introduce numerous amendments to the legislation. I say that it is good to see them coming aboard with the government legislation. It is a step in the right direction, both with this legislation and on working together for all Canadians.

My community of Guelph is also home to the University of Guelph and therefore another aspect of the legislation is particularly appealing to me. As a university town, a great many of our young people, plus a great many more who come from across Canada, take the opportunity to attend our fine university and then start out on the road to build a life for themselves in our beautiful community.

Therefore my staff and I are very familiar with the challenges that student debt presents. I am very glad to see that the legislation would allow student loan debt to be eligible for discharge in bankruptcy if seven years have passed since the former student terminated his or her studies. It offers greater flexibility for those young Canadians who may have hit a bump in the road of life. Most students want to pay off their debt but sometimes this may not be possible for one reason or another. I am glad that we are creating additional options for Canadians in financial difficulty. I know my colleagues from the NDP would like this passage of time requirement to be further reduced and this too merits further consideration in committee.

I also like it that the legislation puts forward reforms to the Companies' Creditors Arrangement Act. This would help companies in difficulty to avoid putting employees out of work altogether by providing additional options and assistance to restructure and return to profitability. This, too, is a good thing.

Many members have made excellent points in the House and I am sure many more will be made in committee. However I want to indicate that the legislation is a good step and there seems to be interest and support within the House for the legislation. I hope we can move forward swiftly on this as it is a positive change for Canada and for Canadians. I would ask all members from all parties to move it forward.

Wage Earner Protection Program ActGovernment Orders

3:55 p.m.

Bloc

Yves Lessard Bloc Chambly—Borduas, QC

Madam Speaker, before proceeding with my speech, I would like to put a question to the hon. member who just spoke.

On behalf of the Liberal Party, the government party, she is now applauding Bill C-55. She indicated that she had been in this place for quite a long time. This means that she is familiar with the fundamentals of the House and, I would assume, with older bills, but primarily more recent ones.

Could she tell us why, in October 2003, her party opposed a NDP motion to ensure that, starting in October 2003, wage and income protection measures would be taken to protect workers in the event of a bankruptcy? This has resulted in two years of wage protection in the event of a bankruptcy being lost.

I would like to hear the hon. member on that.

Wage Earner Protection Program ActGovernment Orders

3:55 p.m.

Liberal

Brenda Chamberlain Liberal Guelph, ON

Madam Speaker, that is a good point. There is no doubt that good ideas come from all sources in this House, absolutely.

With that particular piece of legislation, there were some flaws in it, quite frankly. We have tried to go back and get this right. It is important. When we look at the statistics we see that 10,000 to 15,000 workers annually have unpaid wage claims when employers go bankrupt. That is huge and we have to do something to address that.

I am really pleased that the hon. member is in support of this and wants to move ahead with this. As I said, I think all members have indicated pretty strong support when they have spoken. The idea is good. It is a sound idea and definitely its time has come, so let us move it forward.

Wage Earner Protection Program ActGovernment Orders

3:55 p.m.

Conservative

Jeff Watson Conservative Essex, ON

Madam Speaker, speaking of good ideas, one of the ones that was missing in Bill C-55 of course was any protection for unfunded pension liability.

The truth is that the government rushed through the legislation because it had to keep a commitment, when it had a gun to its head, to the NDP for propping them up to stay in power here. It rushed this legislation through and missed the important component that is a companion to this legislation, which is to protect workers when it comes to unfunded pension liability. Why did it neglect workers? Why did it leave them out of the legislation?

Wage Earner Protection Program ActGovernment Orders

3:55 p.m.

Liberal

Brenda Chamberlain Liberal Guelph, ON

Madam Speaker, there will be much debate in committee and if there is need for further action I am sure the committee will recommend it and things will come back to this House. I have no doubt about it.

However, under this legislation, 97% of the people would be satisfied in full. What is key is that when people are going away without money and they do not have the ability to put food on the table or lights on, this bill would go a long way to address that.

I implore the House to move forward on this legislation. I think everybody has spoken one way or another. If there are certain areas in which they would like to see changes, that is fair enough and that can be decided in committee, but let us move and let us move quickly.

Wage Earner Protection Program ActGovernment Orders

4 p.m.

Bloc

Yves Lessard Bloc Chambly—Borduas, QC

Madam Speaker, I am pleased to address this very important bill, which seeks to protect wage earners when their employer goes bankrupt, through amendments to the Bankruptcy and Insolvency Act, to the Companies' Creditors Arrangement Act and, of course, to others acts, as I will explain in my comments.

We are pleased to hear, from the Liberal Party, arguments that reflect those made in the fall of 2003 by both NDP and Bloc Québécois members, who were convinced of the need for such protection. At the time, the NDP had presented a motion to that effect, but the Liberal Party had voted against it.

According to the figures quoted by the hon. member for Guelph, each year, between 10,000 and 15,000 workers suffer losses of wages that are owed to them when their employer goes bankrupt. We knew that in the fall of 2003. I do not want to reflect on the past, but it is rather sad and upsetting that, over the past two years, workers were prevented from enjoying such protection. The Liberal Party was aware of the situation, but it still voted against that motion.

I also want to draw an analogy with another bill that was tabled by the Bloc Québécois just recently, during the spring. This bill was debated and supported by my Bloc Québécois colleagues, including the hon. member for Saint-Bruno—Saint-Hubert, who also took part in the debate on the current legislation, Bill C-55, at second reading. The bill proposed by the Bloc dealt with job protection during labour disputes, and more specifically with replacement workers.

In recent years, this issue has been debated countless times in the House. Again, it is because of the Liberal Party, which defeated it by 12 votes, if that bill was rejected. The Liberal Party, and particularly the ministers, voted against this legislation.

So, I am drawing an analogy between that bill and the one currently before the House. Why did the government wait so long and let workers suffer so much before adopting constructive measures?

We support the principle of Bill C-55. However, a number of amendments to be presented in committee will have to be included in it.

It would be rather useful to review the way the law is currently worded, in order to have a proper understanding of the content and scope of Bill C-55, as well as the necessary amendments.

At the present time, there are two kinds of creditors when there is a bankruptcy: the primary creditors, which are termed secured claims, and the secondary claims. Secured claims include all those secured by mortgage or some tangible form of guarantee. Employers have never had such a security, and all other types of claims have to be satisfied before they get to the workers.

Then there are the non-secured claims. There is a whole series of these, and wages rank only fourth. Higher in the list are funeral expenses, administration costs, and deductions payable to superintendents. Wages come only after all these, so it is a rare occurrence indeed for workers to receive compensation for work done or monies owing to them. Sometimes these amounts make all the difference, and at least provide them with an income and the ability to live in dignity until some other recourse comes along.

There is an expression used in labour law, in fact a statement of principle: “All work deserves pay”. The same thing must apply in this case. It is amazing that there is no protection for workers in the event of bankruptcy in the year 2005. The bill will, of course, remedy that shortcoming. Just how it will do so, we will come back to later.

The responsibilities of trustees in bankruptcy will also be broadened. At the present time, the time period and the amount distributed are governed by law. There is a time limit of six months for wages owed, and a maximum amount of $2,000.

Now, for the Employment Insurance Act. Workers who lose their jobs still use the term “unemployment insurance”. We are all aware of the philosophy that lay behind the Liberal Party's decision to change its name. The connotation was that the insurance was there to ensure people of work, yet we all know very well that it was an insurance in the event of misfortune, of job loss. So it should still be called “unemployment insurance”.

Currently a worker has to use up all of his resources before he can get employment insurance, which is another major shortcoming that needs to be corrected. The whole matter of earnings during a waiting period, a period of unemployment, undeclared earnings during a claim for benefits period, and earnings within the framework of employment benefits or allocation of earnings during a program, are things that further put off when the worker receives employment insurance. The Bloc Québécois called on the government to correct this for a number of years.

As I was saying earlier, other hon. members in this House joined the Bloc in finally correcting this matter in 2005. Better late than never. We will support this bill by providing a number of corrections and changes.

Let us now talk about the very nature of the bill, which is said to create the wage earner protection program. Under this new legislation, the federal government will cover up to a maximum of $3,000 of the wages of wage earners in the event of a bankruptcy. We are quite pleased with this measure. We have no objection to the government becoming the primary guarantor and taking the appropriate measures to seize or recover the money owed by the company. That was the second aspect.

Contrary to the past claims of the current government, it is interesting to discover that the related costs are quite limited. An hon. member from the Liberal party reminded us earlier that there are 10,000 to 15,000 workers a year who will be affected by this measure. That is no small figure.

What would it cost the government should it be unable to recover the money owed to workers? For the first year, it would cost $32 million. In the worst case scenario, it could cost up to $50 million. This is not much at all for this kind of palliative measure, which makes the delay in implementing such a measure even more questionable. It is certainly a cause for joy, and all the more so since these amounts are theoretical in the sense that the government will be able to recover some of that money. In certain situations, it will recover all the money owed, based on the value of the company.

With Bill C-55, the federal government would create a priority higher than secured creditors for workers' claims of unpaid wages and vacation pay. I will take this opportunity to mention something that was raised earlier by another member, and that is the need for more coercive or more direct measures to protect the pension funds of these workers.

Since I seem to have enough time left, I will elaborate on this issue.

Indeed, I have time to deal with the pension protection scheme. The bill also creates a mechanism. Thus, under the bill, a court would be able to authorize a proposal for bankruptcy or for an arrangement only when proof has been made—the interesting thing is that there are three very clear conditions—“that employee and employer contributions to the pension plan that had not been paid at the time of bankruptcy or receivership have been paid or that the court is satisfied that the contributions will be paid under the arrangement, or that the involved parties made an agreement”.

So, this first measure is being taken. And if these obligations were not met, the court could ask that the money in the pension plan be used in priority in the claim payment. In this way, workers would not be penalized by the bankruptcy, because their pension would be protected.

This leads me to an aspect that is not in this bill and that might very well have been. In the advent of a bankruptcy, of course, wage earners will be able to get their salary back. However, this would come to an end at some point. What is due is due. People need money to survive. However, when they do not have any income, they rely first, of course, on employment insurance, which we commonly call “unemployment insurance”. Thus, the amounts payable to wage earners should not delay the receiving of employment insurance benefits. When people have exhausted their employment insurance benefits, if they have worked beyond the age of 55, what will happen to them? They will have nothing. Will they wait for their pension?

It is during debates on this bill, that we need to be concerned about this, as the Bloc has done tirelessly. We have reminded the other parliamentarians that POWA, the program for older worker adjustment, needs to be reinstated. This program assists workers when they no longer have an income, because of their age and the fact that there are no more jobs available in the regions. This is often the case for young people, but it is even worse for older workers. This way, they would receive an income. For now, we believe that EI should be paid out of the consolidated fund. This would allow older workers to receive benefits, and therefore an income, until they are eligible for their Quebec pension, along with an adjustment. This would help them until they are eligible for the old age pension.

This program would not cost more than $50 million in the first year, for individuals who are truly unable to find other employment. At worst, in subsequent years, it would cost $75 million. So, this is peanuts for an EI budget of $16 billion.

We wonder why it is taking the government so long to implement this measure, when we know that thousands of jobs are being cut and that older workers are unable to find employment. They are appealing to programs of last resort, often without receiving anything. As a result, they are being reduced to poverty.

It would be interesting for the government to find out what happens to older workers who are unable to find a job and have no income. People say that a government is judged by how it treats its seniors and its children.

The current government would get a nice taste of reality if it examined the fate it has imposed upon older workers who are unable to find a job now and who have no income.

The last point I want to raise relates to labour unions. There is another measure we welcome. Sometimes, in very specific conditions, even before bankruptcy, it can be established that a company is in a bad situation because of circumstances over which it has no control, like foreign competition on our markets. Here, it would often be competitors from Asia. That could push a company to bankruptcy. The measure would allow the re-opening of collective agreements. In such a case, the court would have to evaluate the situation and if appropriate, there would be discussions with labour unions. Then new measures could be agreed upon and introduced.

In the case where the unions made concessions, for example, where employees would have to accept a salary reduction, as we have seen recently, the employees collectively, through their union, would also become creditors. That is another interesting provision.

Other members will undoubtedly talk about students going bankrupt. After a number of years, they should not be forced to reimburse their loans, even if they go bankrupt. When it has been established that their bankruptcy is real, they should be treated like any other citizen who goes bankrupt and their debt should be completely erased.

I will conclude on that. That is our position. There are surely a lot of other points to raise. I will try to do that while answering questions.

Wage Earner Protection Program ActGovernment Orders

4:15 p.m.

Bloc

Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC

Madam Speaker, first I want to thank my colleague for his excellent presentation, his great sense of analysis and his speech, which made his ideas come across so clearly. Congratulations to my colleague from Chambly—Borduas.

He raised some particularly interesting points on the Liberal government's attitude toward protecting workers. He mentioned, among other things, the fact that the Liberals did not support the anti-scab bill the Bloc Québécois introduced in April. The bill was defeated by 12 votes. It should be noted that those who contributed to its defeat were Liberals from Quebec. We were very hurt by this, but workers were hurt even more.

In 2003, when our colleague from Winnipeg Centre introduced a similar bill on protecting workers, the Liberals defeated it.

In December 2004, when the same NDP colleague from Winnipeg Centre introduced another bill on protecting workers, the Liberals did not seem in favour of it whatsoever.

Now all of sudden, a few months later, they reach into their magical hat and pull out a little rabbit with small ears and presto, we have Bill C-55. And they seem quite attentive to the needs of workers and quite sensitive to workers who lose their jobs when their companies go bankrupt.

This change of heart is welcome. It is a step in the right direction. We see that they have thought about this. We also see that every action taken by our colleague from Winnipeg Centre and by the Bloc Québécois was seen through all the way to the Minister of Labour and Housing. As I said, this change of heart is welcome. We hope to find the same attitude when we present amendments on student loans in committee.

I have a question for the hon. member for Chambly—Borduas on the program for older worker adjustment, whose importance he illustrated so eloquently. Does he believe the Bloc Québécois should propose an amendment in committee requiring the government to include in the Wage Earner Protection Program some aspects that would allow POWA to be implemented?