Madam Speaker, the current bankruptcy laws were clearly written by the monied class. Big money has controlled things in Ottawa for so long that it is no surprise that all the laws are structured in such a way as to look after the interests of big money. That is the case in the current bankruptcy laws. Employees, workers, have been left hung out to dry in the event of bankruptcies in alarming numbers.
There are approximately 10,000 commercial bankruptcies per year in Canada, with over 100,000 employees owed back wages, benefits and pension contributions. It is a huge problem. Some of the estimates are as much as $2 billion per year are owed to employees due to bankruptcies. Imagine the impact of that.
The government finally has listened to the years of pleas from members of various parties to do something about this. I personally had a private member's bill that called upon the government to address the issue of bankruptcy.
One of the key elements in Bill C-55 is the wage earner protection program. For the record and history books, this is the manifestation of a commitment negotiated with the government by the NDP in Bill C-48, or what we call the NDP/Liberal budget of 2005. The Liberal government is living up to the commitment made at the bargaining table with our leader, the member for Toronto—Danforth. We find ourselves with the wage earner program.
Under this proposal, an employee can seek restitution for up to $3,000 for back wages left owing. The government would then seek compensation from the trustee of the bankruptcy, wait in line and be reimbursed. It proposes as much as $2,000. It is an idea that we can agree to in concept. My colleague from Hamilton Centre may be able to expand on it. This was an NDP idea that was put in place in the province of Ontario by the NDP government in the early 1990's.
My problem with it is the figure is too low. We do not believe a $3,000 compensation would compensate as many affected workers as the Minister of Labour would have us believe. Partly, it should not just be back wages and holiday pay. It should also include severance pay or termination pay which may be included in a person's terms and conditions of employment. It also should include commissions for salespeople who may work in retail sales who get their commissions at the end of every month. That could amount to many thousands of dollars.
We believe that threshold limit of $3,000 is not adequate and that the employees should be able to seek compensation for wages, holiday pay, termination pay, severance pay and commission for salespeople.
We also are critical that there is a three month exemption. If someone has worked for the company for less than three months, that employee is not eligible for this program. I do not see the logic in that. In fact someone who has only worked for less than three months is more vulnerable than a person who has 20 years of service if there are two weeks back wages owing. That person may have been catching up on their personal finances. We are critical of both those issues and will be moving amendments to that effect.
The second element of the bill has to do with student loans. My colleague from the Bloc has pretty much reflected our criticisms of the proposed amendment to the student loan provisions. Let us be clear. The 10 year limit that students have to wait before they can declare personal bankruptcy is like a life sentence. This is crazy. Why should they be treated any differently than any other Canadian?
This came into effect only when the Government of Canada off-loaded the student loan system to the banks. When it privatized and contracted out the student loan program, the banks, in assuming the responsibility, demanded that they did not want kids to get out from under their debt for 10 years. That is baloney. The NDP supports the idea, especially in the cases of hardship, that the discharge in the event of student loan debt should be no different from ordinary Canadians. We will be negotiating that down with the ruling party.
One of the most important terms of this new bill is the Companies' Creditors Arrangement Act amendments. Under the current rules, and we have checked this out and had it confirmed recently, a judge may unilaterally and arbitrarily alter the terms and conditions of a collective agreement of the employees. When a company goes under the CCAA and is seeking to avoid bankruptcy, a judge may alter the creditors' arrangements or collective agreements unilaterally. This is fundamentally wrong. We cannot and will not abide by that.
The amendment put forward by the federal government states that a judge may intervene to the point that he or she may direct the parties, labour and management, to sit down at the bargaining table and try to negotiate amendments to the collective agreement, but the judge may not unilaterally impose changes to the collective agreement. This is a step forward, providing we can be abundantly sure that the default position will be the status quo. In other words, if the two parties at the bargaining table reach an impasse, the default position will be to revert back to the collective agreement which will stand in full force and effect as it is. Providing that is the understanding, we will support element three of the bill.
The final element of the bill we also support, and I will leave more details of this to my colleague from Hamilton Centre. It deals with personal bankruptcies, in this case for very wealthy people making $200,000 a year or more, which very few do. Usually only heads of crown corporations like David Dingwall make more than $200,000 a year. They would not be allowed to have their taxes discharged in the event of bankruptcy for a period of five years, during which time they would have to try to negotiate a payback period. In other words, the people of Canada have a chance to be made whole if these high income earners try to welsh out on the back taxes they owe to Canada.
I believe this traces its origins back to the Radwanski scandal. George Radwanski, the former privacy commissioner, owed $650,000 in back taxes and it was forgiven 24 hours before he started his job as a $230,000 a year privacy commissioner. There was no payback whatsoever to Canadians. That could not happen under the provisions of this new bill. He would have had to sit down and negotiate a five year payback period. In that scenario, making $230,000 a year as a privacy commissioner, he could have paid back $100,000 a year to the people of Canada and still earned a good salary as privacy commissioner. I support element four of Bill C-55.
We will support Bill C-55 because it is better than the status quo. It gives some relief to wage earners who are affected by bankruptcy. There are some good elements to it. We will be fighting for amendments at committee.