Mr. Speaker, I share the member's curiosity as to how this might play out. If I am a lender and a venture capitalist, I am going to put some money in, I am going to set financing terms which meet the risks and the rewards and I am going to consider the prospect of business success or failure. That is what venture capitalists do.
However, if we change the laws that all of a sudden say we may be a first secured creditor for the bonds that are owing to us, but we are going to change the rules of the game, all of a sudden there is another class of effectively secured creditors, being the employees, I think the House would agree that from day one as long as there is a dollar of unpaid wages, a dollar of unpaid wages is a dollar of unpaid wages. I do not care how long an employee has been there. That is the right thing.
However, we have some transitional provisions. Maybe this is something the committee has to consider. I do not want to delay, but if we are talking about $30 million to $50 million, maybe a transitional provision could be put into this. Maybe there is a way to smooth this so the government may pick up the unpaid wages itself and not recover during some transitional period. At least there would be a phase-in.
However, when we change the rules of the game, somebody will win and somebody will lose. Who knows, depending on the level of business failures, it could very well be a significant loss to the secured creditors and I am not sure if that is fair either. That is the idea of balance. I am not sure how that will happen.
These are important aspects at which the committee will have to look. I am glad we are talking about this now at second reading. It will go to committee and I am sure we will hear these answers and get the numbers. Let us find out what the numbers are because we need to know. Estimates at 10,000 to 15,000 and 13ยข on the dollar, et cetera, I am not sure what that translates into in terms of a business of an average size.
However, I know it is a lot better under the Companies' Creditors Arrangement Act than it would be under the bankruptcy act. Under the bankruptcy act there is no possibility of ongoing operations to make up and continue to operate. Usually under the CCAA the amount of exposure for the creditors is limited to the amounts owing at the time they went into court protection, but they are 100% guaranteed from that day forward. Under the existing laws the CCAA is preferable. However, we have a lot of companies that there is just no solution whatsoever. The haircut that creditors have to take is just too great and no one is prepared to continue on under any circumstances.