Mr. Speaker, my colleague from Kildonan—St. Paul, once again, has accurately and incitefully described the major components of this bill and areas where there is some possible adjustment required.
I think the government is generally on the right track with this particular bill. That is something we do not often admit to in this House because we do not often have the opportunity to do so, given what we see. However, in this case, it is on the right track.
Basically, we are talking about protection for wage earners. It is a very key component and something that we want to support. The Bankruptcy and Insolvency Act itself does a number of things. It provides for the liquidation of assets. It provides also for the distribution of what may be remaining to creditors. Even more important, it provides mechanisms by which renegotiations can take place, and possible reorganizations, of either the company or the individuals involved. When it comes to the Companies' Creditors Arrangement Act, CCAA, it is looking at proper provisions under court supervision in terms of how assets can be distributed.
There is currently a framework in terms of the order of payout. If a company or an individual is going bankrupt and money is owed to other individuals or other companies, there is actually a ranking, a preference order, in terms of who gets paid first. This is very important, especially to the person to whom the money is owed.
It can be simplified by saying the classifications are: the secured, the preferred and the deferred. The problem in terms of the wage earners category is they are under the second classification and they come behind those who are secured. They would qualify as preferred, but they are fourth even in that list of preferred. There are a number of other creditors who would get paid out before the wage earners in a particular company. The people who worked hard, the people who applied the sweat equity to the company itself, are way down the list.
Quite rightly, the government is recognizing, and we have been urging this for some time, that those wage earners be moved up in terms of the preference order so that their hard work can be recognized and in fact redeemed through this particular system.
The danger in any type of legislation like this of course is that we have to be very careful with the balancing because we could take pressure off of a company or an individual who is considering going bankrupt. That of course applies to every type of government insurance. We do run the risk of creating a moral hazard. Do we want to encourage the very type of behaviour we are trying to in fact discourage?
That is why we will be watching this bill and how it progresses. We will be watching it very closely to ensure we get the right balance here. We want wage earners to be taken care of. We do not want employers, in the case of individuals, to sleep well at night thinking that the government will come along and take care of all these employees and there will be no problem, and they can go ahead and claim bankruptcy without having anything resting on their shoulders. There is a balance that has to be achieved here. The government is on the right track, but we are going to have to watch this carefully as we move through possible amendment stages.
As we go through the bill, and this is not a small bill, it is exciting nighttime reading, and I know some people will be waiting for the video to come out, there is some important detail here that is going to have to be looked at carefully at the committee stage.
Again, I think the government is on the right track trying to streamline some of the administration and some of the efficiency aspects, but we are going to be watching this very carefully.
We want the wages to be paid out quickly. In fact, we are going to look at this and we may even propose, depending how the government addresses this, the creation of a separate fund for wages for workers. If we have a separate fund created, then we do not have to worry and wait unnecessarily. There will not be the time restraints and constraints that could follow and hard-working people wind up not getting their dollars, not getting the money they are owed. We are going to look at that carefully in terms of setting up a separate fund.
My colleague from Kildonan—St. Paul went into some detail related to student loans. This is a factor that has to be looked at, something that students are dealing with in terms of the debt that they carry into their working life and their career environments. We have to look at this very carefully. My colleague detailed some of that.
The best approach actually, as in health care, is prevention. The more we can do to prevent or help a student not acquire a huge debt load the better. The more we can help them dispense of their debt while still recognizing their moral responsibility to do so, the better off we are.
That is why on this side of the House the official opposition, under our leader, is proposing a contingency based plan for paying back loans. Students would pay back a loan contingent with the rate of income they are receiving at the time. When most of us graduated either from elementary school, high school or university, most of us did not immediately move into the high wage end of a company or the profession we wanted to pursue.
We started at the low end, making minimum wage usually, and then we became upwardly mobile. When students graduate, they have a debt load. Let us allow some time for them to pay it back recognizing their rate of income at a particular time. When they are making just a little bit of income, the payment schedule should be adjusted.
That is not in Bill C-55, but we are suggesting that type of approach, so students will not face what this legislation is proposing but a mechanism providing a way for them to dispense with their loan. We want to help those students and we want to help them in a responsible way.
Those are the main elements that we wanted to address at this particular phase of the bill. We will be looking forward to the amendment stage and working with our colleagues to ensure that hard working people are properly recognized when a company or an individual falls into default. We want to ensure we are doing all we can to see the reorganization of debt before we see the obligation to pay the debt removed through bankruptcy, and especially addressing the concerns of students.