Debates of April 26th, 2010

Bankruptcy and Insolvency Act

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

moved that Bill C-501, An Act to amend the Bankruptcy and Insolvency Act and other Acts (pension protection), be read the second time and referred to a committee.

Mr. Speaker, I am pleased today to introduce my private member's bill, Bill C-501, for debate.

Canadians know that New Democrats have always, in good times and bad, looked out for the interests of hard-working men and women in Canada, and that we have done so from day one. We are also the only group of parliamentarians that has always made pension security a top concern. Like our member for Hamilton East—Stoney Creek, I am proud to continue this strong and principled tradition today.

Bill C-501 will do, suprisingly, what has never been done before. It will secure the pensions of all Canadians whose employers have fallen on hard times, that have undertaken restructuring, entered bankruptcy protection, or have collapsed entirely and had their assets sold off.

If passed, Bill C-501 should mean that every working Canadian can take comfort in knowing that their pension, their retirement, is secure in its entirety.

I am sure that all members in this place, no matter what region they represent, have constituents in their ridings whose pensions have been lost due to bankruptcy or the restructuring of their employer, and have many others whose pensions are at risk today. This is, sadly, something that we all have in common, but it is also something that should unite us in a common cause.

Record job losses, the decline of entire industries, like forestry and manufacturing, the collapse of large employers, like Nortel Networks and AbitibiBowater, are throwing tens of thousands of hard-working Canadians out of work. These hard-working Canadians, through no fault of their own, are finding out, after years and years of work, that their pensions and retirement income are threatened.

With thousands of pensions lost in recent years and many thousands more under threat, I would not hesitate to call what we are experiencing a full-blown pension crisis. The forestry sector has been in a near-decade long decline and has taken many large corporations and mills down with it.

AbitibiBowater, one of the largest employers in my riding, is undergoing restructuring after filing for creditor protection. When their books were finally opened, it was found that the pension fund, which holds the retirement income of nearly 20,000 hard-working Canadians, was underfunded by about $1.3 billion.

Literally thousands of people in my riding of Thunder Bay—Rainy River, who counted on their pensions being there when they retired, were faced with losing up to 40% of their retirement income. That was not just money that they were given or promised, that was money that they have earned.

At town halls meetings, in correspondence and in phone calls, my constituents have asked me to help them, to fix this problem, to bring them justice, and to secure their pensions. Bill C-501 is my response.

Bill C-501 is a simple, effective bill that should secure every pension in Canada without costing the Canadian government or Canadian taxpayers a cent. It will secure termination and severance pay in the event of bankruptcy. It will mean that unfunded pension liabilities and the shortfalls in pension plans are moved from unsecured status to secured status. It would close loopholes that have allowed companies that go into restructuring proceedings to leave their retirees high and dry.

The changes to existing legislation that are contained in Bill C-501 are simple, effective, and could secure more than four million pensions in Canada at no cost to the government.

As this bill moves forward and we examine the contents and the possible effects of this bill, we must do so knowing that there is no social or economic problem that exists in a vacuum. A pension problem of one employer affects not just the retirement income of one employee but more often than not that of their spouse as well.

A loss of retirement income means a loss of security, a loss of wealth, a loss of independence, and a loss of dignity for workers, their spouses and their families as they try to enjoy the peace and rewards of their retirement.

A loss of retirement income will also affect their children who, though most of them will be adults, worry as all children do about their parents as they enter what should become their golden years. It may mean that those children spend more of their time, energy, and financial resources to secure their parents' retirement, to help them live in the dignified peace that they are entitled to.

A loss of pension income for one worker will likely be accompanied by the loss of pension income for hundreds, if not thousands of other workers. Such a large scale loss in one local economy is sure to take its toll on small and local businesses.

Take 40% of the household income of 1,000 families out of a local economy and see if commerce does not suffer. Local commerce will suffer, small businesses will go under, and more jobs and pensions will be lost.

For many small northern and rural communities where a single mill, mine or manufacturer employs a huge percentage of the local population, a loss of pension income, just like the loss of jobs, is devastating to the local economy.

Living in northwestern Ontario, I have seen such loss with my own eyes, but I have made a commitment to the people who have elected me. I have promised them to do my utmost to ensure that I support policies that save our local jobs and protect our local pensions.

Earlier, I mentioned the many constituents who have raised their concerns about pension security with me in various ways, so I would like to take a moment to acknowledge them on the record for raising their concerns. They are: Marvin Pupeza of the Ontario CEP; George Chabot and Bill Shine of the CEP in Fort Frances; Gary Bragnolo and John Jaciuk of the CEP in Thunder Bay; and many hundreds of citizens in Thunder Bay--Rainy River including: Robert Elvish, Dr. Bob Lidkea, Barry Bailey, John McGrath, Joe Hanlon, and all our friends at USW. They have all indicated to me that something needs to be done.

There are many others, too many to name today, but I would also like to thank them all for taking the time to raise my awareness about their situations.

I would like to conclude my remarks by saying that this legislation is long overdue. Hard-working Canadians are entitled to their compensation, to retire in dignity, and to know that their pensions are secure under any circumstances.

They earn their pensions and those pensions must be there when they retire. We must close the loopholes that allow underfunded pension plans to be put at the back of the line of claimants and creditors, when a company enters restructuring or declares bankruptcy or has its remaining assets sold off.

They should know that I, like all the members in this place, would like to see all creditors receive all that is owed to them in these unfortunate circumstances. There can be no question of that.

I believe that, while banks and investors should be paid, it is the people who must come first. With so many companies undergoing restructuring, in bankruptcy, or even worse, we must remember that there are many more who are on the verge. With so much economic uncertainty still we must pass Bill C-501 and we must pass the bill quickly.

Those millions of Canadians who are facing an uncertain future deserve to know now that their pensions and their retirement income are secure.

I have talked to many members in the House about this bill, hoping to get their support. I have talked to a number of Conservative members. The one question they always have is, what about the investors, if we move workers' pensions from unsecured to secured, people will not want to invest any more?

This is my response. My response to that has been and will always be this. Are they telling me that people do not invest in companies because they have great management? Do they not invest in companies because they have a fabulous product, they have great workers, they have a wonderful plant, they have a terrific future and wonderful marketing, and they are likely going to make a whole lot of money? Do people not invest in companies like that or do they invest in companies, so they can use someone else's money for their cashflow or investments?

I would suggest that people invest in companies because they are good companies. Moving pensions from unsecured to secured would ensure that these companies have excellent workers and they will continue to be because they will go to work every day knowing that some day, after 30 or 40 years of work for a company, they are going to have a retirement that they can count on. That is what we are doing today.

I urge all members of the House from all parties, from all regions of Canada, to help pass the bill quickly on behalf of my constituents and on behalf of their constituents. Let us prove the skeptics and the naysayers wrong and show that we can all work together in this place, that we all can get things done for people who have placed their trust in us.

[Mike Wallace, Conservative, Burlington, ON]

Madam Speaker, I want to thank my hon. colleague for his speech and for presenting this bill to the House. As a member of the finance committee, we are now in the midst of a study on pensions. We have had a tremendous number of individuals and organizations come to see us.

I want a small clarification on the bill. The people who have come to see us have been asking for legislation to move from unsecured individuals or creditors as pensioners to preferred secured, not oversecured and not super ahead of creditors. There is a request for preferred status whereby a group of employees would receive their wages owed first, then the secured creditors, then the other creditors. Is this bill moving them ahead of the secured status to the super secured status, or is it doing what people have been asking for, which is preferred status, below secured?

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Madam Speaker, it sounds, certainly, as if the folks on this side of the House are going to be supporting this and I am glad to hear that. It is a very good question. I am not sure exactly what the member means by super creditor status.

The way the bill is designed is that the secured status that I am asking for in the bill falls actually in the fourth category from the top, so that would not be called a super creditor. I think the super creditor, in fact, is the Crown and it is the one who always get the money first. Anyway, we are in the fourth category. As I said earlier, everyone in this House wants to see this succeed. Everyone in the House has indicated that we need pension reform and we need lots of other pension reform. Of course our party has a wonderful platform already on all sorts of pension issues. This is a small part of the puzzle, but a small part that we can all pass quickly.

[Alan Tonks, Liberal, York South—Weston, ON]

Madam Speaker, I wonder if the member could give the House a little bit more information. How would the approach of his bill compare to, for example, the government following the lead of some of the provincial premiers who are talking about establishing a supplementary Canada pension plan that would allow Canadians to put their extra savings toward future retirement income?

The second initiative that has been talked about is to roll underfunded pension plans into the Canada pension plan. These are two approaches. I know the member is dealing with the residual in terms of insolvency and who should be protected in that case, but I wonder if there is a macro plan that could deal on a larger scale with the whole issue of pensions in addition to the initiative that he has entrenched in his private member's bill. How does that approach compare with the approaches that have been talked about from time to time?

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Madam Speaker, those are really two separate issues. The things we are calling for, and which I believe the Liberal Party supports, involve the Canada pension plan and more people having more access. It is the most successful retirement plan in Canada. It is not for profit and a wonderful plan that can be enhanced for everybody.

This bill deals with one particular element of pensions that has only been brought forward in the last year and a half after a number of closings and bankruptcies. The urgency is that we do what, quite frankly, most of the other western industrialized countries have done, which is play catch-up and move our pension systems out of the dark ages and into the rest of the western world.

This bill is the very first step. It deals with one particular item but I am sure that over the next couple of years there will be a lot of pension discussion on the wide-ranging issue of pensions and, in particular, CPP.

[Mike Wallace, Conservative, Burlington, ON]

Madam Speaker, I am pleased to speak to the important issue raised in Bill C-501 put forward by my colleague, the hon. member for Thunder Bay—Rainy River, dealing with unfunded pension liabilities.

The bill is a sign of his and his party's concern about pensions and the income security of Canadians in or approaching retirement. This is a concern shared by the government as evidenced by the number of initiatives that we have undertaken in response to the concerns of many Canadians across the country.

We appear to be coming out of the recent economic downturn experienced by countries all around the world. In that regard, I am pleased to point to the April 7 OECD interim economic assessment report that noted that the Canadian economy grew 6.2% in the first quarter of this year compared to 1.9% overall growth estimated for the other G7 countries. Our economy will continue to expand in the second quarter at 4.5%, twice the G7 average.

I mention this because a healthy economy can only be good for the stability of companies, the pension funds they support and the employees who will benefit from them. However, I do not suggest that this is not a reason for concern for individuals and for their companies that have not weathered the economic storm well.

During the downturn, which has led to a number of employers filing under insolvency legislation, many people, especially senior citizens, were understandably concerned that their pensions would be affected. While Canada is showing signs of emerging from this downturn, the financial well-being of these older Canadians must not be taken for granted.

Although the government has undertaken a number of specific initiatives to deal with those heartfelt concerns, debate on this bill allows us an opportunity to stand back and see where we are when it comes to our pension and bankruptcy legislation. The best place to start is in understanding exactly what the current legislation covers.

Canada's insolvency regime relies mainly on two statutes: the Bankruptcy and Insolvency Act, often called the BIA, and the Companies Creditors Arrangement Act, or the CCAA. These two statutes set the rules for the process of bankruptcy or, in the alternative, companies restructuring. Both are important pieces of marketplace framework legislation. They influence Canada's economic health, so much so that we must take great care not to tinker with their provisions on a piecemeal basis.

In broad strokes, the following is how the legislation works.

In bankruptcy, a trustee in bankruptcy seizes the non-exempt assets of the bankrupt company and sells, liquidates and distributes the proceeds of the sale among the creditors according to the distribution scheme set out in the BIA.

In the alternative, a company may choose to restructure. In restructuring, the company becomes a debtor rather than bankrupt. Rather, it works with an insolvency professional to try to find a repayment scheme for its debts that will satisfy the debtor's creditors and allow the firm to continue perhaps in a different and restructured form.

Historically, creditors receive better recovery under restructuring than they would if the debtor simply became bankrupt. Furthermore, it is better for jobs, growth and opportunity as it allows for the quick redeployment of assets from insolvent businesses to new and profitable ventures in a controlled and orderly manner, which is essential in today's economy.

That brings me to today's debate. One of the objectives of the insolvency legislation is to balance the competing interests of creditors, including employees and pensioners, for the scarce resources available in insolvency files as there is not usually enough money to satisfy the full claims of all creditors.

Great care must be taken when amending insolvency legislation because if the proper balance is not achieved, it is possible that the cost and availability of credit for companies with defined benefit pension plans could be negatively affected. This could, in turn, reduce the ability of companies to create or continue to fund benefit pension plans for their employees.

We also should be mindful that while exploring the various ways to help pensioners of insolvent companies, we do not impose additional constraints on reorganizing firms that could interfere in the reorganization process and eventually push still viable businesses into bankruptcy. Evidence has shown that restructuring and reorganization, as opposed to bankruptcy, provide better recovery for creditors and help to save jobs, which ultimately protects employees' wages and pensions.

I leave it to my colleagues to go over in greater detail the factors of which we must be mindful in considering the implications of pension protection in insolvency for the interests of stakeholders and the economy as a whole.

In the Speech from the Throne, the government committed to explore ways to better protect workers when their employers go bankrupt, and it certainly understands the value of secure and sustainable pension plans.

In order to promote more secure private sector pensions in the federal sphere, in October 2009, the government announced a comprehensive reform plan for the federal private pension plan legislation and regulatory framework. Many of these significant pension reforms announced by the finance minister are to be implemented through Bill C-9, the jobs and economic growth bill.

The Minister of Finance has also announced consultations with Canadians to obtain their input on this important matter, as well as consultations with his provincial and territorial counterparts that are currently ongoing concerning retirement security. A review of policy options is scheduled for the finance ministers' meeting to be held in May 2010.

In considering this bill, we must be mindful of the larger issue of pension and retirement income security. We must consider as well the interaction of this bill with the initiatives that are currently ongoing to promote the security of pensions as an important component of the retirement income security system. The government is considering all of these factors in fulfilling its commitment to explore ways to better protect workers whose employers go bankrupt.

I have a final note on this issue. Based on our experience at committee, I want to be clear on the present structure of the BIA. In fact, there is a super-priority group of current employees of a company that is looking at bankruptcy. That money that is available goes to those wages that are earned but not paid and they are a super-priority.

The next level is the secure level of debtor, which, to be frank, is the banks, those that have security against the bankrupt company in terms of hard assets and so on. It is really the banking level that most people consider.

The third level at present is everybody else, which includes the pensioners but also includes the suppliers, bondholders and a number of other debt instruments that companies use to operate.

This bill, from my understanding, and I will need some clarification as we debate this bill further, would move the pensioners above the secure level into the super-priority area. That was what was indicated in the speech by the mover of the motion. I will check into that further. However, what the Nortel employees who came to see us at the finance committee said is that they do not want to be a super-priority. They do not believe they could qualify for the secure level but they would be interested in a preferred position, ahead of suppliers and ahead of bondholders.

Through the debate over the next number of weeks on this and if it makes it through to committee, those are the questions that, as a member of the finance committee, I will be asking the mover to ensure we have clarification on what this bill would do. We need to be very careful when making these changes to the Bankruptcy and Insolvency Act to ensure everyone is treated fairly through this process.

[Judy Sgro, Liberal, York West, ON]

Madam Speaker, I am pleased to have an opportunity to address Bill C-501, An Act to amend the Bankruptcy and Insolvency Act and other Acts. I say I am pleased because, as the opposition critic for seniors and pensions, I have been following this issue for quite some time. More importantly, I am glad to see Bill C-501 come to the floor because of the impact it could have for all Canadians.

In recent weeks, people such as the former and current employees of Nortel have come to understand that their pension benefits are in real jeopardy due to the financial insolvency of their employer. Many Canadians have followed that discussion and have seen the rallies that have happened all across Canada. In many cases, after working for a lifetime, these workers and many like them will be placed at the end of the line when it comes to benefiting from a Nortel settlement agreement.

Our current laws have done nothing to right this long-standing wrong. I for one will be voting to send Bill C-501 to committee where it can be explored and finally set into motion various actions that could help thousands of people across Canada. This measure has been a long time coming to the floor of the House, mostly because the government has been so desperate to stonewall on the entire issue of pension reform.

When I first raised the issue of pension reform with the Minister of Finance, I was met with a flat refusal to tackle the issue. The minister emphatically stated that this issue has no place in the federal realm and that it is a provincial responsibility. I pressed for federal leadership on this issue, citing the toll that was being taken on Canadian families and seniors. Again, the minister and his representatives told the House that this matter was best left to the provinces.

In October of last year, I called a group of experts and stakeholders together on Parliament Hill, over and above the round tables that I have held for well over a year across Canada. We set aside politics and explored some of the problems and potential solutions for Canada's retirement income security, coverage and adequacy systems. Once that convention was over, I shared the unedited finding of the group with the minister and offered my help in crafting a thoughtful response to the growing pension crisis. Again, the minister chose to keep his head in the sand.

The minister's parliamentary secretary went even further than that, openly mocking the entire event as recently as Friday's question period. Sadly, those taunts showed the existence of an even greater problem facing all of us and facing Canadians. Simply put, the government does not believe that there is a role for government to play in preserving the fiscal security of Canadian seniors.

To their credit, this is not a new position for the Conservatives. For example, I recently came across a November 8, 1963 edition of the Montreal Gazette. If one were to read that, one would see how the Conservatives of the day back in 1963 were hoping to derail the creation of the Canada pension plan. They said that the Liberal-sponsored plan would upset credit markets and undermine the private sector in Canada. It is now more than 40 years later and the sky has not fallen.

This trend of Conservative opposition to pension reform continues in more recent times. The same arguments the Conservatives used then are the same arguments they use today. When the current Prime Minister was the leader of the Canadian Alliance, he advocated for the elimination of the Canada pension plan in favour of super savings accounts. The premise of his plan was simple. Seniors would not get a Canada pension plan cheque each month, but they would be given the opportunity to put all of their extra money into a bank account for a really great interest rate.

The problem is that by eliminating the Canada pension plan, the Conservatives would have eliminated the source of income for tens of thousands of Canadian seniors. Imagine where we would be today if the Conservatives had been successful in thwarting the creation of the Canada pension plan, or if they had been successful in collapsing the Canada pension plan in favour of bank accounts for extra money. Let us just say that Canadian seniors have every right to be happy that the Conservatives' short-sightedness did not prevail. This brings me back to Bill C-501.

The bill clearly will have its flaws and we will all need to work on it to make sure it accomplishes the intent, and that is to protect pensions across Canada when companies are going bankrupt, but what it represents is a step in the right direction. It also can represent another step forward for Canadian seniors and pensioners.

The Liberal Party has a very long history of protecting and preserving Canada's retirement income, security and adequacy systems. While the caucus does not have a party position on Bill C-501, I would suspect Liberal members would work to ensure that Bill C-501 makes its way to committee without any further stalling by the government.

Even the NDP obviously acknowledges that the issue of pension reform is not cut and dried. After all, Bill C-501 is a re-write of Bill C-476, which had its first reading in the House of Commons on November 3, 2009.

[An hon. member]

Aren't they the people who stole $50 million from the public service pension?

[An hon. member]

And they still haven't put it back.

[The Acting Speaker, NDP, Denise Savoie]

Order, please. I am sure the hon. member looks forward to answering questions, but I would ask that we allow her to finish her comments. The hon. member, please.

[Judy Sgro, Liberal, York West, ON]

Madam Speaker, both legislative packages sought to place people further up the list of priority in cases where an employer becomes insolvent. I believe this would help to enhance fairness during bankruptcy proceedings. It would also serve to help protect people from having the rug pulled out from under their feet when their employer becomes insolvent after a lifetime of work and investment.

I also believe that Bill C-501 would complement some of the other reforms that the Liberal Party has proposed, things like creating a supplemental Canada pension plan, establishing a stranded pension agency and measures such as those contained in Bill S-216. I should mention that Bill S-216, which was introduced by a Liberal senator, would seek to do some similar things with disability benefits as Bill C-501 seeks to do with pensions.

Despite the past denials and the stall tactics put forward by the government, I know that pension reform is a subject members of all political persuasions can support. With that in mind, I want to pay tribute to my colleagues, such as the member for Thunder Bay—Rainy River, the mover of the motion, the member for Ottawa—Vanier, the member for Madawaska—Restigouche, and the member for Random—Burin—St. George's. These four members and many others have made pension reform a top priority, and I thank them for their efforts.

I am pleased to offer my support for Bill C-501 and I eagerly look forward to collaboratively dealing with it further in committee.

I certainly renew my calls for the Minister of Finance, his parliamentary secretary and the government as a whole to get on board with the need that exists out there. Current seniors, former and current employees of companies like Nortel and AbitibiBowater, and future pensioners all have a right to expect that we will take this matter seriously.

Canada is sitting on the cusp of an unprecedented population shift. The baby boomers are getting ready to retire and that will present a range of challenges for the social structures of this country. The upside is that we can see it coming, so if we adopt a proactive approach, many of those challenges can be mitigated or resolved in advance. If we sit idle, I fear those challenges may overwhelm our ability to deal with them, a scenario that would threaten the future income security of an entire generation of Canadians.

I am pleased to lend my support to current seniors, former and current employees of companies like Nortel and AbitibiBowater and future pensioners alike. I certainly hope that all members of the House will support sending the bill to committee.

[The Acting Speaker, NDP, Denise Savoie]

I am sorry, there are no questions and comments.

The hon. member for Rivière-des-Mille-Îles.

[Luc Desnoyers, Bloc, Rivière-des-Mille-Îles, QC]

Madam Speaker, I am pleased to take part in this important debate, in light of the situation facing Canadians and Quebeckers.

We have weathered all sorts of financial and economic crises, but now, because of a major pension plan crisis, pensioners are faced with major reductions in their pensions. I am talking about people like the employees of Nortel, Atlas Stainless Steels and the Jeffrey mine. We have to look at all the possible solutions to these problems.

Bill C-501 amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to ensure that unfunded pension plan liabilities are accorded the status of secure debts in the event of bankruptcy proceedings. It also amends the Canada Business Corporations Act to provide a new procedure by which former employees of a bankrupt corporation who are owed amounts by the corporation can proceed with claims against its directors.

In times of economic crisis, pension funds lose value when security prices drop. If a company goes bankrupt at that point, its pension fund will not be able to cover retirees' pensions.

I would now like to talk about the protections that pension plans currently provide. Under the new provisions in the legislation, regular contributions that have not been paid when a company goes bankrupt or into receivership take priority over all the debtor's assets. But the same does not hold true for unfunded pension plan liabilities.

Regular contributions that have not been paid at the time of bankruptcy include the amounts deducted from employees' paycheques to be paid into the pension plan and all unpaid employer's contributions. This priority does not apply to special payments ordered by the pension regulator to liquidate an unfunded liability or claims related to such unfunded liability.

The limited super-priority ranks below the rights of unpaid suppliers to repossess goods under section 81.1 of the BIA; the claims of farmers, fishermen and aquaculturalists in respect of unpaid products supplied to the bankrupt or insolvent employer, under section 81.2 of the BIA; unremitted income tax deductions, which are deemed to be held in trust; and priority wage claims.

Bill C-501 contains three measures. First, it would give priority status to pensions plans with unfunded liabilities. This way, in case of bankruptcy, retirees will be among the first to be paid and will have precedence over the banks.

Second, the bill ensures that the assets guarantee the termination or severance pay of any clerk, servant, travelling salesperson, labourer or worker.

Third, it offers retirees who were wronged by their employer a procedure that is supposedly more effective for making claims against directors—members of the board of directors. In fact, subsection 119(1) of the Canada Business Corporations Act states:

Directors of a corporation are jointly and severally, or solidarily, liable to employees of the corporation for all debts not exceeding six months wages payable to each such employee for services performed for the corporation while they are such directors respectively.

The Bloc Québécois supports workers and retired workers. We have always promoted social justice.

We can understand the frustrations and the concerns of people who have lost their retirement income because their retirement fund was inadequate at the time the company they worked for ceased operations. They are unfairly deprived of a source of income they were counting on.

For a long time, we have been wanting to look at giving pensions plans with unfunded liabilities preferred creditor status, as well as making directors accountable.

We feel these measures are fair as long as they do not compromise business development or competitiveness or unduly affect the labour market.

The Bloc Québécois would like to hear from witnesses in committee in order to understand these effects. For example, an increase in unemployment and social assistance recipients would be too high a price to pay to protect pension funds against stock exchange fluctuations. Other measures could then be considered.

We must remember that despite the urgent need to help pensioners who were hard hit by the economic crisis, the Conservatives prorogued Parliament, thus slowing down the process of studying bills.

The Bloc Québécois' interest in protecting pensioners and workers is not a recent phenomenon. Not only have we waged a lengthy battle to stop the looting of the employment insurance fund and increase benefits for recipients, but we have spoken in favour of many other initiatives, including wage protection in the event of bankruptcy and the creation of a tax credit to protect pensions, which are measures that we ourselves proposed.

During the summer of 2009, we defended Nortel pensioners and we continue to do so. At that time, we should have given them the opportunity to appear before the committee that was studying the impact of the sale of, among other things, Nortel's wireless division to Ericsson in order to allow them to share their fears and questions with elected members. Unfortunately, the Conservatives and Liberals preferred to shut down the debate.

This fall, to deal with the pension situation, the Bloc Québécois proposed a series of measures, one of which was that the federal government follow Quebec's lead and take trusteeship over the pension plans of federally regulated bankrupt businesses. This would prevent these pension funds from being liquidated while the markets are at their lowest.

Another proposal was to get rid of the six-month delay for the wage earner protection program. Victims of massive layoffs followed by delayed bankruptcy, which is something we have seen, would then be eligible for the severance they are due.

We also proposed raising the contribution limits for pension funds to 125% of the break-even point, which would encourage a pension reserve. The government went back to this after trying to pass the buck to the provinces.

Another measure is Bill C-290, which would provide a refundable tax credit equal to 22% of the loss sustained by beneficiaries of a pension running a deficit. Despite Conservative opposition to the bill, it will soon be studied in committee.

We are also talking about changing the threshold for automatic review of foreign acquisitions from $1 billion to $300 million. Such a measure would ensure that companies like Nortel would not be sold off at a discount or piece by piece.

We are also discussing bringing in preferred creditor status for disabled employees who lose their benefits following an employer's bankruptcy. These people are desperate and destitute because, in Nortel's case, they will lose over 70% of their benefits even though they still have to cover significant medical costs. None of these people were negligent. They had every reason to believe that they were properly insured by an insurance company.

The Bloc Québécois supports pension supervision to help avoid high-risk investments, such as numerous investments in a single company. We have to consider all of our options.

Lastly, workers expect to benefit from the pensions funds that they spend their lives contributing to. Parliament cannot ignore the needs of these workers and those who have already retired.

That is why the Bloc Québécois supports Bill C-501 in principle.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Madam Speaker, I am very pleased to finally have the opportunity to rise and speak to this most important issue. I thank the member for Thunder Bay—Rainy River who has taken up this bill. In 2008 the NDP started looking at the problems with pensions. Over the period of late 2008, early 2009, we had two consultative meetings and one of the things that began to surface were the stories around the serious situation of Nortel.

In 2009 I introduced a bill very similar to the member's, Bill C-476. It was the hope of the NDP, me and the people at Nortel that the bill would have been dealt with. We hoped that by February of this year we could have had it through all stages in the House, to committee and back to the House. It would have allowed for action that would have helped the situation of the Nortel workers in particular. Unfortunately, the government took the decision to prorogue and as a result there was a delay.

My Bill C-476 would not make it here except with the unanimous consent of the House. I raised it in this place and both sides of the House said no. Therefore, it put us in the position of having the good member for Thunder Bay—Rainy River using his order of precedence to put this bill forward, and that is important. A private member only has so many opportunities to move a bill and he set aside his own critic area in order to do the right thing for the workers of AbitibiBowater, Fraser Papers and others.

As we went forward in the debate, the Liberal Party spoke about 1963 and The Gazette, referring to the opposition. I will remind this place that it was Stanley Knowles who first proposed CPP and under a minority government of the Liberals, it was put forward.

Last fall, on the steps of our Parliament, speaker after speaker addressed the 4,000 Nortel workers about what we would try to do for them. In a subsequent throne speech, the government of the day said very clearly that it would look at the situation of bankruptcy, insolvency and pensions.

However, we have to change the debate. When we listen to the business community and certain people in the House, they talk about payroll taxes. When we think of pensions and the assets of them, those are deferred wages. Had the employees of those companies decided they wanted to invest on their own, they would not have negotiated with their companies to have a pension plan in the first place.

Imagine the horror when they wake up to a newspaper headline like the workers at Nortel did. Nortel had $2.4 billion in cash assets and $4 billion in other assets. It said that it would not cover the shortfall in the Nortel pension. Today, because of the delay of prorogation, because this matter did not get to the House, Nortel workers face a pension of 69%.

About two weeks ago, a couple that had retired from Nortel just before the 1990s visited my office in Hamilton East—Stoney Creek. Their pension to begin with was small because it had not had the growth period of the big money. They were going to lose 30% of their pension and their benefits. Along the line before of Bill C-476, I also put in Bill C-487 to address the long-term disability problems faced by workers at Nortel. In December some 400 of these good folks will lose all their LTD benefits. These workers are not re-employable and to be quite frank it is a tragedy because they will wind up on welfare.

Last week I stood with a Bloc member as the Bloc put forward a bill to address the guaranteed income supplement. In the House last June, we had an opposition day motion from the NDP. The first part of that motion was to address an immediate increase to the GIS. We also talked about doubling CPP, a national pension insurance plan. I was proud of members of the House because the motion passed unanimously.

Over the summer, I went to 19 different communities across the country. I listened to seniors talk about their fears on their pensions. One of the things that surfaced repeatedly was how low the GIS was and how it did not rise with the rate of inflation. This varied across the country. People who had retired from major corporations and thought their company had no chance of failure now faced problems.

We have heard about AbitibiBowater in the House many times from me, from the member for Thunder Bay—Rainy River and other members, particularly from Quebec and Northern Ontario. I ran into workers in B.C. who lost their pensions because the forestry industry had been wiped out. They clearly did not know what they were going to do.

In the House today is my good friend from Outremont, who at my request moved a motion at finance committee to have it look at pensions. Eighty-eight witnesses came before that committee and gave testimony about the situation faced by Canadians and Canadian pensions.

I have noticed, with concern, that the speaking notes of government members have changed. In committee, they were saying that they would look at this, that they were consulting. They were referring to the parliamentary secretary who was traveling the country, as was I. They made reference to those consultations. Now they are starting to talk about the opposition coming up with answers too quickly. I am afraid I have to disagree with that.

The NDP started on this file in 2008. We consulted with people during 2009. I went to 19 communities, now up to 26. We have listened to people.

We have listened to such people as Joel Harding, the CLC pension expert, Monica Townson, from the Canadian Centre for Policy Alternatives, Bob Baldwin, a pension expert, Don Drummond, an economist with TD Canada Trust and a gentleman whose name is used in the House quite frequently, Mike McCracken from Infometrica, Glen Hodgson, the senior vice-president and chief economist from the Conference Board of Canada, and others.

Members on all sides of the House have to really pause for a second when we look at Bill C-501. We need to understand the change in language of deferred wages.

Deferred wages means, very simply, it should be considered the property of the pensioners who will use that money for their retirement. Deferred wages are not a gift that the company has decided to set aside for them on their retirement. This is a sharing in a process that put aside moneys to give them dignity in their retirement.

Members of the government have talked to me about seeing their constituents leave their office and then going into food banks. We have heard the stories of Canadian veterans moving to food banks. Our seniors deserve much more than that.

In the opposition day motion about which I talked, the NDP proposed an immediate increase to the GIS, similar to what the Bloc and others have spoke about. We also talked about doubling the Canada pension plan.

Some people in the provinces and in the Liberal Party have talked about a supplementary voluntary CPP. In Canada 63% of working Canadians have no savings and no pension. It is very clear that the only way they will have a pension in 40 years is if we invest. If we grow the core assets in the CPP, and we do not have to add administration, then we can go forward. However, it must be mandatory to ensure that in 35 to 40 years Canadians will have a pension to rely on, a foundation for a pension plan.

Again, I thank the member for Thunder Bay—Rainy River for moving Bill C-501. I look forward to the support of the entire House when the bill comes to committee.

[Merv Tweed, Conservative, Brandon—Souris, MB]

Madam Speaker, I too welcome the opportunity to speak on the issue of pensions, the proposed amendments to the Bankruptcy and Insolvency Act, and the Companies' Creditors Arrangement Act as envisaged by Bill C-501.

I think it is certainly appropriate that we have these conversations and discussions in regard to dealing with the issues that impact Canadians in such a way. My comments today will be on the necessity that we must always keep in mind the potential economic effects of a higher priority in insolvency for unfunded pension liabilities, and in particular the importance of considering the impact such a priority may have on capital markets and the access to credit for Canadian companies.

I would like to begin by acknowledging the challenges that are being faced by today's Canadian pensioners and their families in this uncertain economic environment, and it is for that reason that our government has taken and will continue to take measures that will better protect the pensions and pensioners.

Indeed, the government committed, through the throne speech of last March, to explore ways to better protect workers when their employers go bankrupt. Canada's insolvency and restructuring laws are an important part of our economic framework legislation and play a key role in making our economy strong and stable. They strive to find the proper balance between the competing interests of debtors and creditors as well as those between the various categories of creditors. I say competing because, of course, there are usually insufficient assets in the debtor's estate to satisfy the entire amount of debt owed to creditors.

To meet that test of balance, the law has to be fair and be seen to be fair by all those who might be affected by its provisions. To do otherwise could lead to unintended consequences.

It is of fundamental importance that insolvency legislation be structured in such a way that it does not impede our ability to promote a competitive marketplace nor impinge on our ability to increase the availability of credit to businesses and maintain efficient capital markets.

Rational and reasoned legislation contributes to building confidence in the economy, to improve the competitiveness of Canadian businesses, and serves to make Canada a more innovative and productive country. Without such a principled approach, our efforts could result in little long-term relief for potential aggrieved parties.

While assessing the various ways to protect workers and their pensions, the government must be mindful of the effects such changes may have, including the effect they could have on credit markets, which are integral to the smooth operation of businesses in Canada.

Here is what is critical. Amounts related to unfunded pension liabilities can represent significant claims in bankruptcy and can arise without any wrongdoing on the part of the employer. Let me emphasize this point, if I may. Several external factors, such as investment performance, can affect the funding level of a defined benefit pension plan. Therefore, a plan can be underfunded even if the employer provides for all regular contributions, which are already protected by a super priority in insolvency and other required payments in a timely manner.

We should remember that, when a company is insolvent, its assets are usually insufficient to cover all the claims. This means that everyone will not be fully paid. I will continue.

[The Acting Speaker, NDP, Denise Savoie]

The hon. member will have almost six minutes left when this debate resumes.

The time provided for the consideration of private members' business has now expired, and the order is dropped to the bottom of the order of precedence on the order paper.

Balanced Refugee Reform Act

[Jason Kenney, Conservative, Minister of Citizenship]

moved that Bill C-11, An Act to amend the Immigration and Refugee Protection Act and the Federal Courts Act, be read the second time and referred to a committee.

Madam Speaker, I am pleased to rise here today to speak to Bill C-11, the balanced refugee reform act.

This bill and related reforms would reinforce Canada's humanitarian tradition as a place of refuge for victims of persecution and torture, while improving our asylum system to ensure that it is balanced, fast and fair. The bill would ensure faster protection of bona fide refugees, reinforce procedural fairness by implementing a robust refugee appeals division at the IRB and ensure faster removal of those who seek to abuse Canada's generosity by making asylum claims.

Canada has always been a place of refuge for victims of persecution, warfare and oppression. English Canada was founded by refugees fleeing the American revolution, the United Empire Loyalists. Canada was the north star of the underground railroad for escaped slaves from the southern United States.

In 1956, Canada welcomed some 40,000 refugees of Soviet communism fleeing the invasion of Budapest. In 1979 and 1980, Canadian churches and families welcomed some 50,000 Vietnamese or Indochinese boat people, creating the magnificent foundations of our privately sponsored refugee program.

Having said that, there have been moments when we turned our backs on those most urgently in need of our help. We think, of course, of the example of the European Jewish refugees during the second world war who Canada refused to accept, detailed in the great historical work None is Too Many written by Harold Troper and Irving Abella.

We must learn from the mistakes of that period so that we never repeat them. I believe we have learned from those mistakes, because Canada has welcomed some one million refugees to make a new start here in Canada in security and with our protection since the second world war.

There remain an estimated 10.5 million refugees, according to the UN High Commissioner for Refugees, around the world. Every year, some 20 developed democracies resettle about 100,000 refugees, and from that number Canada annually resettles between 10,000 and 12,000 or 1 out of every 10 refugees resettled globally, second only to the United States with 10 times our population.

The government is also active with our international partners to help those in need. Take, for example, the government's commitment to resettle up to 5,000 Bhutanese refugees from Nepal over several years. We have already welcomed more than 850 Bhutanese refugees in several communities across Canada. In addition, we have also completed the resettlement of more than 3,900 Karens from Thailand.

I was very proud last year to announce a special program to welcome to Canada over the course of three years some 12,000 refugees from the conflict in Iraq. I visited some of these families in Damascus, Syria, last May and I must say I still remain touched and deeply moved after hearing their stories of violence and persecution, often on religious grounds.

Everywhere I go across the country, I encourage community groups, church groups, faith groups and others to participate in our privately-sponsored refugee program to help rescue those Iraqi refugees and other people in need of our support around the world.

In addition to all those things, we have increased our support for the UNHCR in its important work to help displaced populations on the ground. In fact, to quote Abraham Abraham, the UNHCR representative to Canada, “Canada, a major settlement country and a major donor to UNHCR activities worldwide, has for the time in its funding of UNHCR's global operations worldwide reached a new level of over $51 million, making this the highest ever annual Canadian grant to the UN refugee agency”.

I am proud that happened under this government.

In spite of our many achievements, I believe that in the context of balanced reform to our refugee system, Canada can and should do more to help those in need of our protection. That is why, as part of this broader package of reform to our refugee systems, including our asylum system, I have announced our intention to increase the number of resettled refugees welcomed to Canada by 2,500 individuals, to 14,000. We would continue to lead the world and set an example for other countries.

I propose, in the context of refugee reform, that we increase by some 20% or $9 million the refugee assistance program to provide initial assistance for the successful integration of government-assisted refugees typically coming from UN camps. I have also announced, as part of these increases and targets, an increase of some 2,000 positions for people to come through the very effective, privately sponsored refugee program.

Bizarrely, these huge increases in Canada's generosity that I announced were criticized by one individual claiming to speak on behalf of refugee organizations, demonstrating that there are some in this debate who are neither objective nor balanced in their approach. However, I must say that I was gratified to see the overwhelmingly positive response from those who actually work with refugees, not just issue press releases but actually do the practical work with people who need a new start.

For example, Mr. Abraham of the UNHCR said, “This is an encouraging move in the right direction that yet again demonstrates the humanitarian commitment of Canada to provide protection to needy refugees for whom resettlement is the only solution enabling them to rebuild their shattered lives with respect and dignity”.

Mr. Tsehai of Canadian Lutheran World Relief expressed his “sincere appreciation and deep gratitude for your announcement to increase the PSR target to a 6,500 annual level”.

A coalition of sponsorship agreement holders, groups that bring the refugees to Canada, said they were “thrilled with the news”.

There can be no doubt that this government is committed to continuing Canada's proud humanitarian tradition of protecting those in need, but let me turn my attention to the asylum system.

We also have, as all members will know, a very robust, highly regarded and extraordinarily fair charter-compliant legal system for the consideration of asylum claims made by refugee claimants arriving in Canada. Unfortunately the system has many serious, longstanding problems and everyone knows it.

I would like to credit the member for Vaughan, the official opposition immigration critic, for having raised this issue as early as 18 months ago and doing so in a non-partisan fashion. I would also like to commend the Leader of the Opposition for having pointed to the problems in our asylum system, which must be addressed.

One of the problems is that we have had long, very large backlogs in asylum claims as a permanent feature of the system. The average size of the asylum backlog in our system over the past 10 or 15 years has been 40,000 people waiting for a hearing on their applications for asylum protection in Canada. That means that, typically, people have been waiting about a year to get even a hearing. Right now the backlog is as high as 60,000 people waiting for a decision or a hearing on their applications, meaning that people have to wait 19 months for a hearing. This is not acceptable. We must do better.

If someone manages to escape one of Ahmadinejad's prisons in Iran and he arrives at one of our airports with the scars of torture fresh on his back, we do not offer him a quick pathway to security and protection in Canada. We give him a form and say we will check back with him in 19 months.

That is not good enough. Frankly, those who defend the status quo, who say that these permanent, huge backlogs and the large number of false claims, which contribute enormously to those backlogs, are acceptable, have taken the wrong position with respect to our moral obligation to provide speedy protection to those in need of it.

The truth is this. Too many people try to use our asylum system as a back door to gain entry into Canada, rather than wait patiently to come here through the immigration process. The result is that too many people abuse our system in an effort to jump the immigration queue. There are a number of problems with the current system, which encourage unfounded claims.

How do I make this assessment that there are many unfounded claims? In the last two years, we have seen that some 58% of the claims for asylum made in Canada were subsequently deemed to be unfounded or not in need of our protection. Many of those claims are actually withdrawn by the claimants. I will give one example.

I suspect if we went to any of our constituencies and asked people what they think is the most likely source of refugee claims in Canada, they might say Iran, North Korea, Somalia or Iraq. In point of fact, it is an EU democracy, Hungary. Last year, there were 2,500 claims. Subsequently, 97% of claimants from that European democracy went on to withdraw or abandon their own claims, indicating to us that they do not need our protection. Why they came and went through the asylum system is a good question. A clue may be found in a criminal investigation into allegations of human trafficking involving many of these claimants who are being victimized, allegedly, by a human trafficking ring.

However, of the 2,500 claims made from that EU democracy, only 3 claims were found to be in need of our protection. Therefore, with six out of ten claims being made, which were subsequently found not to be in need of Canada's protection, and with Canada receiving one of the highest levels of asylum claims in the world with a 60% increase in the number of claims filed between 2006 and 2008, all of this to me indicates that Canada has become, regrettably, a country of choice for those who seek to migrate, not through the normal legal system, but by inventing claims often facilitated by unscrupulous agents and third parties in the immigration industry.

These problems are serious. Even the Auditor General has pointed to the backlogs creating this pull factor for false claims. What we seek to do in these reforms is to create and reinforce balance that respects our obligation to provide due process that is compliant with the charter and with the United Nations conventions on torture and refugees to asylum claimants, balance that does not restrict access to the asylum system for those who believe they have a need for our protection but balance that will provide faster protection decisions for legitimate refugees while providing faster removals for the many who actually come here seeking to abuse Canada's generosity.

How do we propose to do that? First, there would be an initial information gathering interview that would provide earlier contact with an officer from the IRB than claimants now have. Although these officers would not decide on claims, they would be able to identify claims that appear well founded and could recommend expedited processing for them. What this means for people who have managed to escape persecution is that they would not have to wait a year and a half for protection but could receive it in a matter of weeks.

I understand that some claimants may be too traumatized to explain what prompted their claim. That is why during an interview if the officer determines that a claimant is in this situation, he or she could have the discretion to postpone the interview until the claimant could receive the appropriate guidance and support.

The information that officers would gather, coupled with solid facts about the nature of their claim, would lead to hearings at the refugee protection division, staffed by a highly trained, independent public servant, within 60 days. In cases where there is a good reason for delay, there would be that flexibility, but an information gathering interview within eight days and a hearing at the IRB within sixty days would be the norm.

The proposed new system would also include, and this is very important, a full appeal for most claimants. Unlike the appeal process proposed in the past and the one dormant in our current legislation, this refugee appeal division, or RAD, would allow for the introduction of new evidence and, in certain circumstances, provide for an oral hearing.

By the way, that is responding to a demand from some of the opposition parties for a very long time. I should point out that when the Liberal government was in office, three subsequent immigration ministers and the government took the position that they could not implement the RAD until there was a streamlining of the overall asylum system. We are now providing that streamlining. It is time to say yes to the appeal division in the context of a more efficient but still fair system.

I will now turn my attention to one of the more contentious aspects of the legislation, which would be to allow for the designation of certain countries as being safe. The nationals from those countries, under these reforms, would still, and I emphasize still, have the same access they currently do to our asylum system. They would still have access to an appeal by our independent judiciary at the Federal Court. They would still have access to a fully charter compliant process that actually exceeds our international obligations but the consideration of those unfounded claims from designated safe countries would move somewhat more expeditiously, reducing the process by about four months by not allowing them to make two appeals, the first one being to the refugee appeal division.

Someone said that this is unfair or inappropriate. No less authority than the UN High Commissioner for Refugees, Antonio Guterres, said here in Ottawa on March 24, “there are indeed safe countries of origin. There are indeed countries in which there is a presumption that refugee claims will probably be not as strong as in other countries”.

He went on to say that we could not deny access to the initial hearing, which we do not in our proposed reforms, and that it was important to have a fair and transparent process for designating these countries, as do most western European asylum systems whose example we are emulating in these reforms.

I wan to be absolutely clear that the proposition is not to create a comprehensive list of all countries designated as safe or unsafe. To the contrary. The criteria would be the following. A country would need to be designated as safe. We propose that this designation process would be in the hands of a panel of senior public servants who would make consultations with UNHCR and would refer to independent human rights supports by NGOs. The criteria would be: if a country is a principal source of asylum claims to Canada, the overwhelming majority of which are unfounded; and if such a country is a signatory to and in compliance with international human rights instruments, which has a strong human rights record and which offers state protection to its citizens, including vulnerable individuals.

Why do we need this? The reason is that periodically we see huge spikes in unfounded claims from democratic countries. Twenty-five years ago it was Portugal, not under a dictatorship, but a social democratic government. Thousands of claims were received and almost all of them were found to be false. What did Canada do? It imposed a visa.

In 2000, it was Chile, not under Pinochet, but a social democratic government, the most stable and prosperous democracy in South America. We received thousands of claims and almost all of them were found not to be in need of Canada's protection. How did we respond? We imposed a visa on Chile. In 2003 and 2004, it was Costa Rica, the most stable and prosperous democracy in Central America. We received thousands of claims and almost all of them were found to be not in need of our protection. Canada imposed a visa. In 1997, it was Hungary and Czechoslovakia. Thousands of claims were received and almost all were unfounded. We imposed a visa. Now I mention the situation with respect to Hungary.

When we see these spikes, it is important to understand that these are not just happening spontaneously. We have solid reason to believe that behind these waves of unfounded claims from democratic countries, there are often networks encouraging, facilitating, advising people, commercial networks, the bottom feeders in the immigration industry or sometimes there is evidence of even criminal networks.

All we are saying is that we need a tool other than the imposition of visas to address those spikes in unfounded claims. I appreciate the support and agreement of the Leader of the Opposition in this respect. Last August, in Saint John, New Brunswick, he said, “I want a legitimate, lawful refugee system that to get to the openness point welcomes genuine refugees”. He then said, Look, there are a number of countries in the world in which we cannot accept a bona fide refugee claim because you do not have cause, you do not have just cause coming from those countries. It is rough and ready but otherwise we will have refugee fraud and nobody wants that, including bona fide refugees”.

The Leader of the Opposition may have gone a little bit too far in suggesting that we deny access to the asylum system to claimants from safe countries, but his general concept is entirely sensible and has been endorsed by virtually every newspaper in the country, for example, that has editorialized on this matter.

As I said, these reforms have been broadly endorsed. Eighty-four percent of Canadians say that the government should take steps to reform the refugee determination system,. Eighty-one percent of Canadians agree that refugee claims should be dealt with more quickly so that genuine refugees can settle in Canada faster and bogus claimants can be sent home more quick. By a margin of four to one, Canadians agree that more needs to be done to quickly remove from Canada people whose refugee claims are unfounded and rejected.

The Toronto Star has said, “the government deserves credit for showing the political will to act on an issue ducked by many of our predecessors”. The Globe and Mail says, “Canada has a crying need for a revamped refugee determination system”. The Montreal Gazette says, ”these reforms are a solid and a sensible attempt to reform the system”. Peter Schowler, former IRB chairman and head of the refugee think-tank at the University of Ottawa says, “the Conservative government has managed to propose a system that is both fast and fair, striking a reasonable balance between the two”. The Canadian Lawyer Magazine says, ”the lawyers in the immigration field probably support these reforms”.

These are balanced, reasonable reforms that I believe all members in all parties can support. I will be open to reasonable amendments that achieve the objective of a fast and fair system when this bill gets to committee. I hope that on this urgent issue we will all put aside partisan politics to some degree to allow our humanitarian tradition to prevail so that we can improve and protect the important humanitarian tradition of providing protection to those in need of it.

[Maurizio Bevilacqua, Liberal, Vaughan, ON]

Mr. Speaker, as the minister knows, I have been consulting with my colleagues on the Liberal side extensively on this particular bill and, as with any public policy debate, there are those who are against and those who are for. Even when there are criticisms, they vary.

I have some very specific questions. Is the minister willing to be flexible in the following key areas? To ensure the initial process is procedurally sound and fair and does not cause unnecessary delays at later stages, is the minister willing to look at the feasibility of the timelines in the refugee package, as well as possible provisions to ensure claimants have appropriate legal requirements? On that same point, is the minister willing to provide further clarity around the independence and qualifications of the proposed bureaucratic first line decision makers?

On the issue that he raised, the designated country of origin provision is possibly the most controversial provision of the bill. My colleagues, in their consultations, have brought forth concerns relating to the actual establishment of the designated country of origin list, its criteria, purpose and potential to compromise the protection of legitimate refugees. They have also taken note of the concern cited by the UNHCR, which I am sure the minister is well aware of.

I would also like to know if the minister is open to further measures to increase the transparency and accountability of the designated country of origin process, as well as the currently proposed degree of ministerial discretion.

Finally, is the government willing to look at introducing more flexibility into its proposal on the accessibility of applications on humanitarian and compassionate grounds to ensure that nobody will fall through the cracks?

[Jason Kenney, Conservative, Calgary Southeast, AB]

Madam Speaker, I want to thank my colleague from Vaughan, the official opposition immigration critic and a distinguished member of the House, for addressing this issue with a great degree of responsibility and openness to the need for reform and for having been the first member of this place to raise the need for reform 18 months ago.

He has asked a lot of very substantive questions. I am not sure that I can give him an adequate detailed answer in the moments available, but my general answer to all four questions is, yes. The government is disposed to having a serious dialogue on this at committee to consider and to accept reasonable amendments as long as they meet the objective of a system that is both fast and fair. I think the broad consensus is that we need to get to that.

With respect to the timelines, we propose in the bill an eight day triage interview so that claimants can directly give to a highly trained public servant at the IRB the nature of their claim and the basic facts about their claim without prejudice to the initial hearing that they will have, on average, some 60 days subsequent.

These timelines are actually longer than in many other western countries and their asylum systems. I should also mention that many other countries, like the United Kingdom and the United States, detain nearly 100% of asylum claimants upon arrival. We are not proposing to do that or to increase the use of detention in our system.

However, with respect to timelines, I am open to arguments on this point but I believe that it is essential. If we want to remove the incentive from the tens of thousands of false claims made in the country, the system must be fast. People know they cannot stay in Canada for years and use our public resources if they are not bona fide claimants, which is why I will make an argument at committee that we need to maintain the ambitious timelines.

I look forward to giving the member a very detailed explanation at committee of the independence and the nature of the hiring, training and pay levels that we anticipate for the independent public service decision makers at the refugee protection division of the IRB. I would also invite the member to call before the committee the chairman of the IRB who could give him details on this issue.

With respect to the transparency for the designation of safe countries and the criteria, I would like to signal our openness to reasonable amendments on that point in particular. I would be quite prepared to share with the committee our draft regulations that will frame the process for designating safe countries. I would also be prepared to accept an amendment at committee that clearly states in the legislation what the criteria is for the designation of safe countries.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Madam Speaker, the minister's speech this morning is very helpful in this discussion.

He was right to point out that citizens of Canada are very active participants in our refugee system. The private sponsorship program is one example of that. However, he knows there are many individuals and organizations in every community in Canada that are actively engaged in refugee resettlement and sponsorship. I am glad the minister said he is open to reasonable amendments to the legislation, because there have been many suggestions around that.

Unfortunately, this is a refugee bill that was presented without significant prior consultation. In the past, the pattern has been that there has been specific consultation on proposed legislation. That did not happen this time.

It has generated many requests to the minister that before we begin this second reading debate, the legislation be referred to committee so that the broadest possible discussion could happen, the broadest number of revisions and suggestions could be considered at committee. Unfortunately, by beginning the second reading debate this morning, the minister has clearly denied that request and said that there will not be that very open and broad discussion at committee.

I am just wondering why the minister has apparently shut the door on that kind of consultation and vigorous discussion of the legislation at committee.

[Jason Kenney, Conservative, Calgary Southeast, AB]

Madam Speaker, regrettably, I have to correct the member.

Many people, including many stakeholders in the field of immigration and media observers have commented on the fact that the government's approach to consultation on this bill prior to its introduction was a model of reaching out and trying to build consensus based on consultation.

Lorne Waldman, no friend of this government, one of the most prominent immigration lawyers in the country, wrote in his op-ed last month, “I have to praise the government for the consultation”.

The Toronto Star, no friend of this government, said that I have “drawn on years of analysis and research by his departmental officials” and I have “also consulted widely and pledged to co-operate with opposition MPs on constructive amendments”.

The Lawyers Weekly said “Bill C-11, tabled in the Commons March 30...won instant praise from the bar for its goal of accelerating the delay-plagued refugee determination process”, et cetera.

I have pages and pages of quotes from stakeholders. There is one stakeholder in this field who, as I mentioned, was even critical of the government's increase in support for refugees and our increased resettlement targets. I cannot account for those who are neither balanced nor objective in this debate.

I am pleased to say that the consultation is probably unprecedented. The member could speak to his party's immigration critic, a very competent critic, who was given a briefing on this bill before it was introduced. I do not know how often that happens. Not very often is the answer.

The bottom line is we are open to reasonable debate and amendments at committee. We are proceeding with this in the normal parliamentary fashion, which is that we have a debate on the principles of the bill at second reading, it then goes to committee where amendments can be considered, and I have already signalled our willingness to accept some, and then it comes back to the House for further consideration at report stage.

There is no curtailing of consultation. To the contrary, I think this is a model of how a minority Parliament can and should work. We hope the NDP will play a constructive role in that.

[Gary Lunn, Conservative, Minister of State (Sport)]

Madam Speaker, first of all, let me commend the minister. This issue is something I have felt passionate about.

Madam Speaker, you and I would both remember people coming to the west coast years back. We did those people no service or justice as it took years to process them and they all ended up going back after admitting being economic refugees.

I would like the minister to boil down, for the people watching, in real terms, how long it takes under the current system, for people to go through all appeals, and what will happen after the legislation?

[Jason Kenney, Conservative, Calgary Southeast, AB]

Madam Speaker, it takes at least four to five years for a false claimant to have run through all of the procedures in the current system. Under the new system the claimant would be removed within a year of a failed appeal decision.

We reduce by several years the period during which a false claimant stays in Canada. On the flip side, a bona fide claimant would go from having to wait for 19 months for a protection decision to a few weeks or two to three months maximum under the proposed reforms.

[Maurizio Bevilacqua, Liberal, Vaughan, ON]

Madam Speaker, it is critical that we examine the legislation before us and ensure that the refugee system reform measures will fix the refugee system challenges our country faces. Let us put the system into its proper context.

Today we have a backlog of 63,000 refugee claims. People in genuine need of protection wait about 19 months for processing claims. We have witnessed the drastic 50% decrease in the number of finalized claims and an almost 50% increase in the cost to finalize a single claim. The estimated cost to taxpayers is approximately $29,000 for processing each claimant.

There was a delay by the Conservative government in filling vacancies at the Immigration and Refugee Board which negatively affected the performance of the board. The minister's 2009-10 report on planning and priorities states that the shortfall in decision makers has contributed to the growth of the pending case inventory and to increased average of processing times. In addition, the Auditor General, in the March 2009 report of the Auditor General of Canada, chapter two, asserts her concern for the need to timely and efficiently appoint and reappoint decision makers to the IRB.

These facts and others made the case for comprehensive refugee reform very obvious and an absolute priority. Although reform of the refugee system is needed, we must ensure that it is fair, efficient and just. While the reform package incorporates some Liberal recommendations such as the refugee appeal division, we have to do due diligence on the bill. After all, there are concerns about what has occurred in the past four years, such as slow processing times and longer wait periods for persons claiming refugee status so, caution is in fact warranted.

Therefore, before any refugee reform legislation is implemented, we will ensure that it meets our standards of procedural fairness, that it is just, fast and efficient and that it does not undermine the trust many people place in our system. Obviously, as the minister alluded to, Canadians cannot afford further poorly implemented band-aid solutions like the imposition of visas on individuals from countries such as Mexico and the Czech Republic as happened last summer. This is the reason we will seek assurances that this reform package is going to meet the highest standard of public policy-making.

In 2004, the former Liberal government implemented changes to the appointment process for the Immigration and Refugee Board. Changes included an advisory panel made up of lawyers, academics and others involved in the refugee process which screened all applicants for the IRB. When the present government came to power, unfortunately it delayed appointments. Everyone knows the result of that has been a ballooning refugee backlog. This is what the bill is also trying to address.

In addition to the growing backlog of applications, there has been concern expressed about the integrity of our system. As I said earlier, recent spikes in claims from certain countries have resulted in an ad hoc use of visa restriction to constrict application volumes. As mentioned earlier, significant examples of this occurred last summer when in response to a spike in claims from Mexico and the Czech Republic, the Minister of Citizenship and Immigration imposed visa restrictions on both countries. When we impose visa restrictions, we can jeopardize or strain relationships with countries, in the case of Mexico with one of our North American economic partners. In the case of the Czech Republic, there were also bad feelings created in the European Union as a result.

The government's justification for the bill is focused on streamlining the system to deal with the growing application backlog, providing further flexibility to the minister to deal with the unusual spikes in refugee claims from democratic source countries and streamlining the removal process for unsuccessful applicants.

The bill proposes changes to almost every stage of the in-Canada process. Currently, people with successful claims are waiting an average of 19 months for a decision and it takes an average of four or five years to process and remove an unsuccessful claimant.

Information is currently gathered within 28 days through a personal information form. Under this bill, personal information would be gathered within eight days of a claim through an interview process. It is hoped that this will avoid delays related to incomplete forms and late paperwork. However, there have been significant concerns that this timeline is unrealistic and will result in claimants being unable to get appropriate counsel.

Possible changes around timelines and appropriate legal aid protection should be considered. We cannot afford to have a system where legal counsel is effectively denied and where a poor decision will lead perhaps to a number of time-consuming adjournments.

In the current system, a first-level decision is made by a governor in council appointee within about 18 months. Under the new process, the first-level decision would be made by an IRB public servant within about 60 days. Other countries that have public servant first-level decision makers tend to have higher rates of successful appeals. This can make the process less efficient overall and undermine trust in the refugee determination system.

For instance, the UNHCR has expressed concerns that administrative decision makers in the United Kingdom are inadequately trained and are not producing quality credibility assessments at hearings. Although CIC officials claim that the decision makers in the new system would be senior level and would be highly trained, there is no guarantee of that in this package. The fact that decision makers are housed in the independent IRB may alleviate some concerns regarding their independence, but close assessment of their qualifications, training and hiring processes will be required.

Concerns have also been raised about the 60 day timeline, whether it is realistic and whether it will limit a claimant's ability to obtain representation and compile a proper case within this timeline. Review of these timelines and possible further legal aid support will be required.

There is currently no appeal within the IRB and review is left to the Federal Court. It should be noted that the concept of a refugee appeals division was part of the initial Liberal plan for the Immigration and Refugee Protection Act.

The bill would create a new refugee appeals division, RAD, staffed by governor in council appointees to review negative first-level decisions. The target for the appeal process in this case would be within four months. Most of the appeals would be paper based, but there would be an opportunity for an oral hearing and the introduction of new evidence that was not available at the time of the first hearing.

In the United Kingdom, 89% of the initial 2007 decisions were appealed and 23% of those initial refusals were overturned. This has led to a huge court backlog of 450,000 cases as of 2008 in the United Kingdom, which may take between 10 to 18 years to resolve. By comparison, in Canada only 1% of asylum appeals are currently successful.

Guidelines are expected to clearly set out when an oral hearing is necessary and when an appeal should proceed in writing. The adjudicator's decision to proceed in writing or not would create an additional administrative decision that could be appealed to the Federal Court.

The primary concern about the introduction of the RAD would be to ensure that the first-level decision is conducted in a way that protects procedural fairness and fundamental justice sufficiently to avoid the RAD becoming another bottleneck in the process.

The system does not currently include a designated country of origin list. The bill would provide the minister with discretion to create designated countries of origin. This is one of the most contentious proposed changes.

The UNHCR has already expressed concern that any such process must take into account the gender and sexual orientation persecution issues in many democratic countries. This may also create diplomatic problems as countries lobby to be put on the list or may be insulted that they have been left off.

UNHCR has previously indicated that safe country of origin practices are acceptable as a procedural tool provided we have safeguards in place. The bill would remove access to the RAD for individuals from designated countries of origin. However, claimants can still have a negative decision reviewed by the Federal Court.

There are still unanswered questions about the process for adding countries to the designated country of origin list. Although we have been assured that this will be used as a last resort to avoid the imposition of visas in countries in good human rights records, issues of fairness and fundamental justice will have to be addressed.

Legal experts are pointing to a major difference between Canada's proposed legislation and that of European countries. The word “safe” does not appear anywhere in the relevant section of Bill C-11. This omission, they say, places too much legal discretion in the hands of the minister and raises serious questions about the law's potential use. It may be appropriate to look at the process by which countries are designated and incorporates some level of independence for selection or parliamentary oversight through amendments.

Currently a claimant has access to multiple appeal processes, including the Federal Court, after each additional rejection. The bill would restrict access to other avenues of appeal for one year following the last negative decision. That means that once the IRB, or RAD, if triggered, has rendered its decision, post decision processes will be barred for one year to allow for removal within that year. Applicants would retain the ability to appeal to the Federal Court. For the information of members, barred avenues include pre-removal risk assessment, section 25, a humanitarian and compassionate grounds application, applications for temporary residence and administrative deferrals of removal.

There would also be a ban on concurrent applications under the refugee protection system and under section 25 of the Immigration and Refugee Protection Act on humanitarian and compassionate grounds. Prior to the first level decision, applicants in the refugee system would be required to select which stream they would like to pursue. Unsuccessful refugee applicants would be banned from section 25 applications for one year from their final IRB determination. After one year from the final IRB decision, the section 25 avenue would again be reopened or open to the applicant. Any time bars to accessing pre-removal assessment or humanitarian and compassionate applications would still need to be reasonable and procedurally fair, as the life, freedom and security of the applicant could be at stake pending the outcome of these decisions.

The humanitarian and compassionate review process operates as an avenue of last resort for persons who do not fit into any of the categories in IRPA to appeal directly to the minister. Limiting access to humanitarian and compassionate grounds could lead to people being deported in the face of humanitarian injustices and safeguards. This will require close review. This issue will require further study to assess the practicality of closing all these avenues of recourse.

The reform package proposes $540.7 million over five years and $85.4 million in ongoing funding. The $540 million is broken down into $324 million over five years for the development of the new refugee system, $126 million to address the backlog and $90 over five years to increase the number of refugees resettled from abroad.

The concern we have, and I have stated this to the minister, is that these funds were not set out in budget 2010 and the Conservatives told us program spending was frozen for the next several years. The minister has stated that these funds are in the fiscal framework, so it will have to be determined what will be cut to take into account these new expenditures. For instance, according to budget 2010, CBSA was actually identified as a source of savings of $54 million in 2011 and $58.4 million in 2012-13 through streamlining and cuts, but had been allocated $142 million in new money under this plan. Questions about transparency and accountability of funding are of concern. We want to ensure that the investment Canadian taxpayers make actually goes where it is supposed to go.

There has been a wide variety of reaction to the tabling of Bill C-11 and even prior to the introduction of the bill. For example, the UN High Commissioner was concerned prior to the introduction of the bill about the countries of origin idea. He stated that the new measures must recognize such things as “sexual preference”, are “grounds for persecution even in democracies”. He also noted other potential issues about gender.

Another individual, Professor Peter Showler, notes that the requirement that the first hearing take place within 60 days after a very quick interview is too quick and impractical. It is impractical in the sense that the refugee will not be able to find a lawyer, inform the lawyer, let the lawyer gather the evidence and present that evidence at the hearing. If that first hearing is not a good hearing, the entire system will unravel fairly quickly. He suggests that 120 days would be a more realistic time frame.

Lastly, the Canadian Council of Refugees does not agree with any of the major changes in the bill, stating that the introduction of a list of “safe countries of origin” is a mistake and has basically criticized the entire approach.

The Liberal Party and the Auditor General of Canada have noted the need to reform the refugee system for a while now. We must address some of the flaws that I have stated, however, there are some positive steps in this bill regarding needed refugee reform.

We must examine the effectiveness and fairness of the timelines for the first decisions so that they are realistic and ensure that the refugees are adequately represented. Refugees may face logistical challenges in acquiring the necessary materials to support their cases due to poor infrastructure in source countries or translation requirements. We must ensure the fundamental justice of vulnerable people involved in the system and ensure a flawed first-level process does not result in a backed up system at the appeal level, like they are struggling with in other jurisdictions such as the United Kingdom. It is important that we ensure that all claimants have equal and fair access to the appropriate legal representation.

In the case of the quality of first level decision-makers, it is important that the government provide more specific details about the independence and qualification of the proposed first line decision-makers.

Clause 12 of Bill C-11 would give the minister the authority to designate a country, or part of a country, or class of nationals of a country, according to criteria to be established by regulation. Persons from designated areas of classes may not appeal negative refugee protection decisions to the Refugee Appeal Division. Nor may the minister appeal cases involving these people. Instead applicants and the minister would need to seek leave to appeal the first level decision from the federal court. The designated authority of origin clause may be problematic in its design, as it may present concerns of transparency and accountability.

Several lawyers and academics have raised concerns about the specific wording of the provision in Bill C-11, which refers to “designated countries of origin” rather than “safe countries of origin”. They argue that the current wording provides the minister with too much discretion in designating countries and that it is susceptible to politicization.

Bill C-11 would make several changes to the humanitarian and compassionate grounds for foreign nationals in Canada. For instance, according to subclause 4(1), the minister may not examine requests to remaining Canada's permanent residents on humanitarian and compassionate grounds if less than 12 months have passed since the final negative IRB decision.

It is obvious that we have presented a credible case for changes to a number of elements of Bill C-11. As Canadians, we take pride in the fact that our country offers a safe haven to so many who are victims of fear, discrimination or persecution in their home countries. Throughout this parliamentary debate, our focus must be on creating the best possible refugee system.

[Jason Kenney, Conservative, Minister of Citizenship]

Madam Speaker, I commend my colleague, the hon. member for Vaughan, for his thoughtful and constructive remarks. I have a couple of comments more than questions.

First, his suggestion that the current problems in the system are the result of a lack of appointments too the IRB by this government, I would like to respond to that. In point of fact there has been a permanent backlog in the system. On average, the backlog has been 40,000 cases.

When our government took office, we inherited, from our predecessors, a backlog of some 20,000 asylum cases pending decisions at the RPD. In the subsequent three years, there was a huge growth in the number of claims. In fact, the IRB, when fully staffed and fully funded as it is, can finalize about 25,000 protection decisions a year. Between 2006 and 2009, the number of claims exceeded the maximum processing capability of the IRB by about 20,000 cases.

Therefore, we inherited a backlog of 20,000. About 20,000 cases in the current backlog are as a result of an excess of claims over the fully funded capacity of the IRB to render decisions.

It is true, however, that a percentage, about one-third of the current backlog, could be attributed to a temporary shortfall in appointments, which was not arbitrary. It was the result of our government accepting a more rigorous pre-screening process.

I would like to commend the member for York West, former minister of citizenship and immigration, for her positive improvements to the pre-screening process for IRB members. I think we enhanced those.

In fact now, only 10% of the people who apply for membership to the IRB are actually referred to the minister for consideration. Since I became minister, some 16 months ago, I have recommended, and cabinet has accepted, the appointment of 65 new members, 34 reappointments, for 99 appointments to the IRB, and the refugee protection division is now at 99%, 126 of 127 members. Therefore, we did everything we could. The basic architecture of the system needs to change.

I have one other comment. On the issue of public service decision-makers at the refugee protection division, what we have proposed is exactly the same thing that exists on the other side of the IRB, the immigration division, which is what the Liberal government adopted as a structure for decision-making when it brought in the Immigration and Refugee Protection Act in 2002. Essentially we are following the template of our predecessors in that respect.