House of Commons Hansard #429 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was c-59.

Topics

National Security Act, 2017Government Orders

1:15 p.m.

Conservative

Erin O'Toole Conservative Durham, ON

Madam Speaker, I always enjoy my friend from Winnipeg North. I know he loves my using his assault-on-democracy quote with respect to omnibus bills. The frequency of the Liberals' time allocation and closure in the last few weeks of Parliament would really make Peter Van Loan blush. He should review some of his speeches of outrage in the previous Parliament.

Let me address the member's issues. As I reminded him when he railed on about Bill C-51, he voted for it. The Prime Minister, at that time the leader of the third party, praised the preventive-arrest measures. Now the Liberals are throwing those out the window. Much like everything with this Prime Minister, it is just not as advertised. I have heard that a few times.

We generally support intelligence oversight, as the member will note from my remarks. That was difficult to do in a minority government at times. During the majority government it was not something that was looked at, but we have spoken in favour of it at times. I have spoken of it, and in fact Peter MacKay spoke in favour of it back around 2006.

The final piece the member said about rights is critical. Public safety is a balancing between our important freedoms, liberties and rights and our public safety and security, and we certainly should be very careful. However, as I said, there are legal thresholds required for preventive arrest, and baked into them are evidence, a threshold and a trust in law enforcement to follow in conjunction with the Crown.

We have the best legal system in the world. We have the best law enforcement in the world. It can always be better and we can make it better, but we cannot tie law enforcement agencies' hands. If someone is killed in a mosque or while guarding the Tomb of the Unknown Soldier, his or her rights are erased, so let us not bind the hands of law enforcement agents, who have a tough job in keeping Canadians safe. That is why we do not support the provision in Bill C-59.

National Security Act, 2017Government Orders

1:15 p.m.

NDP

Wayne Stetski NDP Kootenay—Columbia, BC

Madam Speaker, in the 2015 election Bill C-51 was front and centre in my riding. There were rallies held across the riding against Bill C-51. People were really angry with the Conservative government for putting it forward. They were almost equally angry with the Liberals for supporting it at that time.

Regarding this current bill, Bill C-59, I want to quote from Cara Zwibel, acting general counsel, Canadian Civil Liberties Association. She said:

All Canadian laws must comply with the Charter. Bill C-59 tries harder than its predecessor, but fails to fix some of the unconstitutional elements...contested in...Bill C-51. Troublingly, C-59 also allows intelligence agencies to engage in conduct that threatens freedom of expression, freedom of association, privacy, and public safety. The government has taken a first step, but a great deal more is needed. Canada must get it right on national security.

I am interested in my colleague's comments on this statement that Bill C-59 continues to threaten freedom of expression, freedom of association, privacy and public safety.

National Security Act, 2017Government Orders

1:15 p.m.

Conservative

Erin O'Toole Conservative Durham, ON

Madam Speaker, with respect to privacy, I refer the member to the comments of the Privacy Commissioner, who has provided testimony that directly contradicts what the member is saying. At least the NDP has been intellectually consistent with respect to the elements of Bill C-51. The Liberals voted for it, and now they are undoing it. The Liberals praised some of the elements on preventative arrest and now are caving on them. I think that is due more to electoral fortunes that anything else.

I refer the member for Kootenay—Columbia, and anyone protesting in his riding, to look at the testimony of Patrice Vincent's sister, Louise Vincent, from March 2015, who said:

It would have probably been able to prepare even more material for the attorney general who, with a lower burden of proof, would have agreed to issue a warrant. On October 20 of last year, Martin Couture-Rouleau very likely would have been in prison, and my brother would not be dead.

Law enforcement knew that this young man, Mr. Rouleau, was a threat, and in fact, they had discussed with the Crown whether the burden for preventative arrest could be met.

We are not requiring no burden, but we are also not saying to law enforcement that they have to be ready to go to trial if they fear that there is an imminent risk to public safety and security. Patrice Vincent had not done anything to Mr. Rouleau. He had a uniform on, and law enforcement could not protect him. That is why our laws have to reflect the world we live in, not a perfect world, not a dream world. We have to balance rights and liberties alongside public safety and security.

Putting the threshold too high puts Canadians at risk, and that is why we have been consistent on this point. The Liberals have not been. At least that member has been consistent, and I respect that, but we, forming the next government, will have to make sure that we can tell Canadians that we will always make their safety a priority.

National Security Act, 2017Government Orders

1:20 p.m.

Liberal

Frank Baylis Liberal Pierrefonds—Dollard, QC

Madam Speaker, interestingly, the member for Durham mentions his friend Sulemaan Ahmed, who also turns out to be my friend. I happen to know how much work he and his whole cohort of parents have put into making this bill come to life in terms of getting their children off the no-fly list, where they do not belong. I think he would be shocked to know that his friend from Durham is no longer supporting this measure.

Can he explain to us why he is doing this to his good friend Sulemaan?

National Security Act, 2017Government Orders

1:20 p.m.

Conservative

Erin O'Toole Conservative Durham, ON

Madam Speaker, he is not surprised, because I spoke to him about 30 minutes ago as a courtesy. He is a wonderful Canadian, as are the parents of the no-fly list kids. I explained to him that our commitment, should we form government in the fall, is to deliver the redress system faster and more effectively than the government, which has lumped it into an omnibus bill.

I explained to him that when there is an omnibus bill, we have to look at what elements we support and what elements we do not. This is why the member for Winnipeg North used to rail about omnibus bills when he was on this side of the chamber, which he soon will be again.

However, I want to thank the member for that question, because at the end of the day, leaving the partisanship aside, we should thank families like the Ahmed family and others for their thoughtful advocacy. They worked with both sides of the House, appeared at committee and did a really innovative social media campaign, so much so that I think there is a business case study on their effective advocacy.

Both the hon. member and I can say to Sulemaan that this is something we have identified as a gap. The Liberals have put it into this bill. We are making a commitment to make it a priority, should we form government. Both sides are committed to fixing that element of the no-fly list quandary.

At the end of the day, we should thank Canadians for engaging with parliamentarians. We represent them. We are not perfect, nor are any bills perfect, but their advocacy helps make positive change. I want to thank them for doing that.

Notice of time allocation motionNational Security Act, 2017Government Orders

1:20 p.m.

Waterloo Ontario

Liberal

Bardish Chagger LiberalLeader of the Government in the House of Commons

Madam Speaker, I think the member for Durham has been quite clear that although things might not be perfect, it is important we move them ahead.

That is exactly why I would like to advise that an agreement could not be reached under the provisions of Standing Orders 78(1) or 78(2) with respect to the consideration of certain amendments to Bill C-59, an act respecting national security matters.

Under the provisions of Standing Order 78(3), I give notice that a minister of the Crown will propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of the said amendments.

Bill C-101—Notice of time allocation motionCustoms TariffGovernment Orders

June 7th, 2019 / 1:25 p.m.

Waterloo Ontario

Liberal

Bardish Chagger LiberalLeader of the Government in the House of Commons

Madam Speaker, an agreement could not be reached under the provisions of Standing Orders 78(1) or 78(2) with respect to the second reading stage of Bill C-101, an act to amend the Customs Tariff and the Canadian International Trade Tribunal Act.

Under the provisions of Standing Order 78(3), I give notice that a minister of the Crown will propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the said stage.

Notice of Closure MotionNational Security Act, 2017Government Orders

1:25 p.m.

Waterloo Ontario

Liberal

Bardish Chagger LiberalLeader of the Government in the House of Commons

Madam Speaker, while I am on my feet, should we not be able to find a way forward, I wish to give notice that with respect to the consideration of Senate amendments to Bill C-59, an act respecting national security matters, at the next sitting of the House a minister of the Crown shall move, pursuant to Standing Order 57, that debate be not further adjourned.

Notice of Closure MotionCustoms TariffGovernment Orders

1:25 p.m.

Waterloo Ontario

Liberal

Bardish Chagger LiberalLeader of the Government in the House of Commons

Madam Speaker, with respect to the consideration of second reading stage of Bill C-101, an act to amend the Customs Tariff and the Canadian International Trade Tribunal Act, I wish to give notice that at the next sitting of the House a minister of the Crown shall move, pursuant to Standing Order 57, that debate be not further adjourned.

Hopefully we will be able to find a better way forward.

The House resumed consideration of the motion in relation to the amendments made by the Senate to Bill C-59, An Act respecting national security matters, and of the amendment.

National Security Act, 2017Government Orders

1:25 p.m.

Conservative

Leona Alleslev Conservative Aurora—Oak Ridges—Richmond Hill, ON

Madam Speaker, it is an honour and a privilege to have the opportunity to speak to such an important bill today.

Yesterday marked the 75th anniversary of D-Day, a very important turning point in the Second World War and one where Canada was overwhelmingly able to contribute and further the cause of peace and security in the world.

Why do I bring that up? This is a piece of legislation respecting national security matters and one that we must take very seriously, given the nature of the threats that are facing not only Canada here at home, but the world, at this point.

For the first time in many years, we are seeing the rise of great powers. We are seeing an increase in the number of threats that are facing our country, and those threats are not coming only in terms of troops on the ground or weapons or guns being fired. Those threats are coming from what we call non-traditional or asymmetric threats. We can be sitting at home and we find that information manipulation, cyber-threats and online instigating of violence are having a significant contribution on people who would want to commit these acts.

We must be vigilant. Democracy is fragile. Those men who sacrificed their lives 70 years ago for what we have today must be honoured. How do we honour them? Yes, we remember the incredible sacrifice they made, but we have also been entrusted with preserving the security and the values for which our nation stands going forward.

What are those values? Those values are safeguarding the freedom of individual liberty, the principles of democracy and the rule of law. Every time any one of those things is eroded, we must stand and be counted to ensure that we do honour their memory and we remember what exactly they fought for and what we must also fight for into the future.

What would Bill C-59 actually do? Bill C-59 is trying to make it appear that the Liberal government takes national security threats seriously. In a world of increasing threats, the government wants to show that it is doing something. Unfortunately, it is more about show than actual reality.

Significant parts of the bill take existing legislation and muddy the waters. They make it weaker. They make the wording so that it is more difficult to execute on. Instead of giving money to the areas that will further pointy-end national security efforts, the government is putting money into more bureaucracy and more red tape and ensuring that nothing actually gets done.

This is highly disconcerting. If Canadians do not understand what the threats are, and if our national security agencies and our law enforcement people have less ability, less legislation, weaker and more confusing legislation and more bureaucracy to execute on making sure we are safe and secure, then what exactly are we trying to accomplish?

That is one of the more fundamental reasons why Conservative members cannot support the bill. It is a lot of bureaucracy. It is a lot of smoke and mirrors. It is an attempt to make it look like the Liberals are taking national security seriously, when in fact it compounds the problem and confuses the issue.

The Liberals have combined it all into one organization, the national security and intelligence review agency, and we are not able to see what that organization is going to do and what its mandate will be.

National Security Act, 2017Government Orders

1:30 p.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

Unfortunately, we have to end the debate here for now, but the hon. member for Aurora—Oak Ridges—Richmond Hill will have 15 minutes the next time this matter is before the House.

It being 1:30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

Bankruptcy and Insolvency ActPrivate Members' Business

1:30 p.m.

Bloc

Marilène Gill Bloc Manicouagan, QC

moved that Bill C-372, An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans) be read the second time and referred to a committee.

Madam Speaker, on October 17, 2017, when Sears Canada announced it was declaring bankruptcy, I introduced Bill C-372, An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act. The 20,000 tragedies that were unfolding sadly echoed the 1,000 tragedies that Manicouagan experienced in 2015 and harshly but clearly illustrated the need for my bill.

In January 2015, Cliffs Natural Resources, an American company operating in Fermont and Sept-Îles, Quebec, and Wabush, filed for protection under the Companies' Creditors Arrangement Act.

Overnight, some 1,000 retirees lost nearly a quarter of their pensions as well as their group insurance. Through a negotiated, collective agreement, these workers agreed to forego part of their salary, to defer it to a pension fund. When Cliffs declared bankruptcy, that money was stolen from the workers. We have seen our share of tragedies back home on the North Shore.

These are human tragedies with faces and names. For nearly 30 years, Bertrand Thériault from Sept-Îles worked at the Cliffs pellet plant. For nearly 30 years, he held up his end of the contract, in the dust. Mr. Thériault and his wife were forced to sell their home. On top of that, Mr. Thériault had to come out of retirement and start repairing bikes at Canadian Tire.

The bankruptcy also affected Dolorès Chevarie and her husband, who is dealing with cancer. After Cliffs went out of business, the couple found themselves in a very tough situation when they lost their health insurance. These seniors racked up thousands of dollars in medical bills. They just wanted to be healthy. They did not have that kind of money. What are they being asked to do? Even though the multinational corporation went on turning a profit for its shareholders during and even after the bankruptcy process, it came at the expense of people like Bertrand Thériault and Dolorès Chevarie. True, our laws allow these tragedies to happen, but we, as legislators, have the power to change them. Politicians are often perceived as being powerless, but that is simply because they choose to be powerless. Today, I urge the House to demonstrate what politics can achieve by using the one thing that is at all members' disposal: our will.

What I am proposing with Bill C-372 is a fundamental change to the way our laws treat the pension funds of workers and retirees. At present, our laws define the unfunded liability of pension funds as an unsecured claim, on the same level as a phone bill or credit card debt. The same goes for funds intended to be used to compensate workers for losing their group health insurance.

Throughout their careers, workers give up a significant portion of their day-to-day wages to pay into a pension because they know this will make it possible for them to have some income when they retire. When the employer agrees to pay into a pension fund, it undertakes, under the terms of the collective agreement, which is a contract, to have workers receive what they have accrued once they have completed their years of service. Workers' wages belong to the workers. Workers' deferred wages also belong to the workers. No one would deny that.

If our laws rightfully assign a very high priority to unpaid wages as a liability, they do not assign this same priority to actuarial unfunded pension liabilities. The law is not consistent because it creates two categories of wages. We must correct this anomaly. The principle of deferred wages must be enshrined in law in a fair manner. I will repeat that a pension fund consists of deferred wages. Thus, by law, it must be returned in full to workers and pensioners.

Members will agree that this is a grave injustice. When this is acknowledged by Parliament, we as legislators will act to rectify it. What I am proposing with Bill C-372 is that we acknowledge the problem, take action and always strive for greater justice. My bill is very simple. It has five clauses that amend two acts. Clauses 1 to 4 amend the Bankruptcy and Insolvency Act and clause 5 amends the Companies' Creditors Arrangement Act.

First, my bill ensures that, in the case of bankruptcy, no proposal in respect of an employer who participates in a pension plan, regardless of its nature, will be approved by the court unless it provides for the payment of an amount equal to the sum of all special payments. In practical terms, that means that workers' pensions will no longer be cut in the case of bankruptcy or restructuring, as has happened many times.

Clause 2 of the bill would turn this unfunded liability into secured debt against the employer's assets. Those who oppose this idea claim that such a measure would lead to higher credit costs for businesses and could prompt banks to no longer give out loans. In response, I would like to quote independent financial analyst Diane Urquhart, who stated the following before the Standing Committee on Finance in 2010:

...for those that are investment grade and have pension fund deficits...the impact on the cost of capital...[would be] 0.16%. This is an amount that is easily borne, and should be borne, when you consider the social cost that comes when these companies...seek to enter bankruptcy for the purpose of double-dipping and making profit.

A single company's collapse would not put the big banks out on the street, but the inconsistency of our laws can do just that to our pensioners.

Clause 3 of the bill would ensure that, in the event of a receivership, special payments would also be guaranteed on the bankruptcy assets.

Clause 4 is innovative as it introduces the concept of protecting group insurance as a preferred claim. I think it is necessary to make group insurance a higher priority, because it is a benefit that is received through work and that deserves greater protection since, again, it is a part of the compensation package. Beyond that, our continued denial of these facts amounts to knowingly jeopardizing the security of our seniors as well as the rights that workers have fought for.

Lastly, clause 5 of the bill would amend the CCAA to ensure that, in the event of restructuring, the court could not approve a proposal that robs workers of part of their pension or fails to compensate them for the loss of their group insurance.

If passed, Bill C-372 will fix the injustice of brazen pension theft. It will protect this income for retirees so that no one else will ever go through the same ordeal as the Cliffs pensioners.

In closing, I should point out that the most-lobbied government member is the minister responsible for the CCAA. I know that all federalist parties support the report issued by the previous government, which proposed the status quo regarding the CCAA.

I know the banks will not like my bill. I know they can afford to pay a lot of lobbyists. I know they do not want Bill C-372 and they will do everything they can to kill it. I know all of that. Unfortunately, I also know that in a perhaps not too distant future, other companies will go bankrupt, since crises are bound to happen in a capitalist system. I also know that if my bill does not pass, more families will experience hardships, just like the ones in my riding did. My bill is not about taking an opportunity or having the privilege of making things better; it is about our duty to make a change.

When I vote yes on this bill, I will be thinking of the pensioners not only of Cliffs, but also Nortel, Sears, Mabe, Stelco and so many others, and I will know deep in my soul that it is the right thing to do. I hope all parliamentarians will think of them when it comes time to vote.

I hope all my colleagues will have their conscience perfectly in line with their moral principles, because after all, we were elected to represent our constituents. We must never forget that. I never forget it. I never will forget it, and I will always represent them with dignity and pride.

Bankruptcy and Insolvency ActPrivate Members' Business

1:40 p.m.

Liberal

Linda Lapointe Liberal Rivière-des-Mille-Îles, QC

Madam Speaker, I would like to know if the member for Manicouagan believes her bill will solve all the problems we have seen.

Budget 2019 addresses these problems and will solve some of them.

Bankruptcy and Insolvency ActPrivate Members' Business

1:40 p.m.

Bloc

Marilène Gill Bloc Manicouagan, QC

Madam Speaker, my colleague may not have understood the purpose of my bill.

This is a legislative measure. At the risk of clarifying the government's own budget, it does not contain a single measure to help the people I talked about, nor does the government want to introduce legislation to help them. If it wanted to, I imagine it would have done so at some point in the past four years.

As I said earlier, this could have been done back when the parties had a chance to respond to the report on the CCAA when it was under review. The government could have voted to make changes to help pensioners, but it voted to maintain the status quo.

Bankruptcy and Insolvency ActPrivate Members' Business

1:40 p.m.

NDP

Scott Duvall NDP Hamilton Mountain, ON

Madam Speaker, in her speech the member mentioned Sears, Nortel, Cliffs mines, Wabush mines and others. Does she see these companies' abuse of the current legislation as a way of unloading the liabilities onto workers?

Bankruptcy and Insolvency ActPrivate Members' Business

1:40 p.m.

Bloc

Marilène Gill Bloc Manicouagan, QC

Madam Speaker, if I understand correctly, my colleague is wondering if there is a way to abuse the legislation.

There is a case that I find especially interesting. It is about a multinational, Cliffs, that decided to end its operations in Quebec and Newfoundland and Labrador. It declared bankruptcy in 2015, but it is still operating. It made $199 million in profits in 2016, $371 million in 2017, and $1.1 billion last year.

To me, it seems obvious that the companies have the means to pay the retirees and workers what they are owed. If we do not have legislation obliging companies to do so, they will continue to make profits on the backs of workers.

Bankruptcy and Insolvency ActPrivate Members' Business

1:40 p.m.

Liberal

Linda Lapointe Liberal Rivière-des-Mille-Îles, QC

Madam Speaker, I thank my colleague for her bill and what she proposed earlier. I invite her to listen to my comments to clarify the situation and what amendments will be made to legislation.

Earlier, she spoke about the workers at Sears. I really empathize with Sears pensioners because a Sears store located in my riding shut down. That affects all members. Everyone here is very attuned to this issue.

All Canadians deserve peace of mind when it comes to their retirement security. Our government recognizes this, which is why it has taken a number of significant steps during its mandate to enhance Canada's retirement income system, including enhancements to the old age security program and the Canada pension plan.

At the same time, our government recognizes that recent corporate insolvencies, such as those mentioned earlier, have created challenges for workers, pensioners and even small and medium-sized businesses, such as contractors and suppliers. For this reason, our government committed in budget 2018 to undertake a whole-of-government, evidence-based approach to improve retirement security.

In 2018, our government held national consultations to seek comprehensive feedback on ways to enhance retirement security. We met with labour and pensioner groups, companies, lenders, experts, and more still. We also received formal submissions from many stakeholders. The public at large made its views known on these important issues as well, with more than 4,400 online submissions. People also reached out to their MPs, myself included.

After listening to Canadians, the government proposed a comprehensive package to enhance retirement security in its 2019 budget bill.

Bill C-372, however, is less ambitious in scope, proposing three changes to Canada's insolvency laws that could have disastrous and negative consequences on the Canadian marketplace and firm competitiveness.

Let us talk about Canadian insolvency laws. it is first necessary to briefly describe Canada’s effective insolvency system. Canada has two main insolvency statutes, the Bankruptcy and Insolvency Act, which governs bankruptcies and restructurings for small businesses, and the Companies’ Creditors Arrangement Act, or CCAA, which governs the restructuring of larger corporations, with over $5 million in debt.

These two laws have clear and predictable rules regarding the order of creditor payment upon firm wind up and the negotiability of credit claims in firm restructuring discussions. These rules are specifically designed to support the core objectives of Canada’s insolvency regime, which include preventing a rush to the courthouse and promoting the restructuring of financially-distressed but viable firms, where possible, with the ultimate goal of preserving good jobs and economic value within Canada.

Under the Companies’ Creditors Arrangement Act regime, for example, many insolvent companies have avoided liquidation that would have crystallized losses in underfunded pension plans and employee benefit plans and eliminated good-paying jobs. Instead, these firms were able to stay in business, preserve good middle-class jobs, and continue to fund pension and benefit plans.

In addition, our insolvency system contains certain checks and balances to protect pensions. First, pension contributions are held in trust for the sole benefit of pensioners. Second, unpaid past pension contributions are paid ahead of secured creditors. Third, all restructuring deals require both creditor and court approval to ensure fairness. What is more, courts often order the debtor company to provide at its own expense legal representation for pensioners and employees in the insolvency proceedings.

Bill C-372 proposes to change these laws in three ways that could undermine the system’s core objectives and have negative economic consequences.

First, it proposes to amend the BIA and CCAA to give unfunded pension liabilities and unpaid special payments a superpriority, meaning that these claims would be paid in full ahead of almost all other creditors in an insolvency proceeding.

An unfunded pension liability is the difference between a pension fund's current assets and future liabilities. Special payments are additional employer contributions that are sometimes ordered by pension regulators to compensate for fund deficits over time.

Second, the bill creates a preferred claim in bankruptcies to indemnify employee losses associated with group insurance benefit plans, such as life, disability, health or dental benefits, meaning that they would be paid before unsecured creditors but after secured creditors. The bill also requires these payments to be made in full in CCAA restructuring plans.

Third, the bill creates a preferred claim for unpaid severance and termination pay. I will now set out my main concerns.

The bill’s proposals would weaken companies’ ability to restructure. Pension deficits can be very large, in some cases in the billions of dollars.

An indemnity for employee benefit plans could also be very large. A superpriority that ranked such shortfalls ahead of all other claims, and a requirement that employees must be fully indemnified for benefit losses in CCAA plans, would reduce the incentives of all other creditors to support a restructuring deal. This would make a sale of the company as a going concern extremely unlikely. Companies could also lose access to interim financing, often essential to secure for a restructuring.

Instead of supporting a restructuring deal that could save the company, secured creditors faced with a pension superpriority could act strategically by reducing their exposure to these companies by requiring them to pay down their debts before the start of insolvency proceedings. Indeed, if the measures in this bill had been in place in the past, many successful restructurings under Canada’s insolvency systems would not have occurred, resulting in greater job and pensions losses.

Next, firms with defined benefit pension plans or group insurance benefits could see higher costs and lower availability of credit, as well as reduced competitiveness.

I had much more to say but I am nearly out of time. In closing, the bill before us today does not provide an evidenced-based, whole-of-government approach to enhancing retirement security. It would weaken the ability of companies to restructure to preserve jobs and pension benefits. Furthermore, it would hurt competitiveness, while at the same time not always helping workers and pensioners.

I am pleased to say, however, that the government's proposed measures will protect pensions and workers, while also supporting the central objectives of Canada's effective marketplace laws. We are ensuring that firms remain competitive and continue to employ hard-working Canadians throughout the country.

Bankruptcy and Insolvency ActPrivate Members' Business

1:50 p.m.

Conservative

Erin O'Toole Conservative Durham, ON

Madam Speaker, I am honoured to give a speech on this bill. I would also like to thank the member for Manicouagan for her bill on this very important topic.

Retirement security is a very important issue. Seniors' overall financial security is an even more important issue for Conservatives.

I agree that there is a problem with our pensions at the moment, but I do not agree with the solution put forward in this bill.

I do not support this bill because it will create more problems for businesses in financial crisis.

Last year, I introduced Bill C-405, which deals with this issue. Neither the Bloc Québécois nor the other parties supported my bill, which is a shame because my bill did not create problems for small businesses.

There were fewer problems with Bill C-405, which I introduced, because while we can agree that there is a problem with underfunded pension liabilities for pension plans, not the contribution-based plans but the defined benefit plans, when the pension is underfunded, we know it is a problem if there is insolvency of a company.

If we changed the bankruptcy laws to a point where we caused more companies at risk to become insolvent, to liquidate, the solution being proposed by the Bloc would actually be worse than what they are trying to cure, even though we are in agreement.

My bill tried to address the issue of underfunded pension liabilities without the impact that changing the bankruptcy laws for Canada and the insolvency laws in the CCAA would do.

My bill would have ended the unfairness of excessive payments that exacerbate pension shortfalls. It would have helped protect workers wanting to retire by giving administrators options to protect and improve the pension funds.

Furthermore, my bill would have increased transparency and accountability by improving the national reports on the solvency of pension plans. It proposed a lot of solutions, without any of the problems caused by Bill C-372.

There is a way to tackle the public policy challenges of underfunded defined contribution pension plans without causing harm to businesses that are in financial distress, which will not be able to receive financing if they have an underfunded pension, because they will not be loaned money by creditors. I agree with the MP's public policy issue here, but we have to have a solution that does not cause disruptions in her province, in my province and across the country.

One interesting point the member may not know is that Ontario has a pension benefits guarantee fund. We have talked a lot about Sears employees. Some of the Sears employees, in Ontario at least, will get assistance from the pension benefits guarantee fund. Other provinces do not have that, so it would be unfair to Ontario, which funds and backstops a pension benefits guarantee fund, to change national insolvency legislation.

I worked as a lawyer on the insolvency and the protection process for Air Canada, which I know that member thinks highly of as our national carrier, based in Montreal. I was at the law firm Stikeman Elliott, which represented Air Canada in its restructuring, and it successfully restructured, as many MPs will know when they take Air Canada back to their provinces later today.

CCAA puts a focus on restructuring, not on liquidating. Restructuring a company saves all the jobs; saves the pension by keeping it a going concern; makes all the suppliers whole, for the most part, or tries to; and keeps that business operating. In the case of Air Canada, restructuring kept it in place to provide an important service that a lot of Canadians use. Therefore, our focus when companies are in trouble must be to help the company survive.

If the company survives, the pension fund is fine. If the company does not survive, then the liquidation will take place, and even if we applied superpriority to pensions, with most companies it would still only amount to pennies on the dollar or a much-reduced pension outcome. My bill, Bill C-405, tried to give pension administrators the ability to keep that fund going within another fund so that the pensioners who were stranded could get the upside of an existing fund through the pooling of resources and the ability for their returns to go up.

In an insolvency, all the pension administrator can do is buy an annuity. As a result, those pensioners will be locked into a far lower annuity payment amount, because that annuity has to be purchased at a time when the markets are likely bad, and it will basically guarantee a bad outcome for pensioners.

What is the solution? It is to keep companies operating. CCAA's focus is on maintaining those companies as going concerns, as well as their pensions and their employees.

Let us take out some of the abuse. Bill C-405 proposed to take out some of the abuse occurring through key employee retention plan payments, whereby companies give large executive payments that seem to drain the company of resources while the pension was underfunded. Bill C-405 also tried to work with provincial securities regulators to make sure that there was a national health report on pensions each year. Canada already produces one, but it does not collaborate with the provinces, where most of these pensions are administered. The federal government can change insolvency legislation, but these are actually, in many cases, provincial pension funds.

Sears Canada had its assets hollowed out by its main shareholder in the United States, thereby stripping out resources that could have been used for the pension. In cases like Sears, some of those actions could be prevented by securities laws and securities regulation, so my approach was also to have a report in which all levels of government and security commissions would look at ways to prevent the stripping out of resources.

A lot of people out there, including great people at the Canadian Federation of Pensioners, CARP and others, see changing our bankruptcy and insolvency laws as a magic bullet. It is not. I do not think anyone wants to see more companies driven into liquidation. We want to see them survive, but how can we backstop and preserve payments to these pensioners?

I think there is a way to do it without the negative consequences of superpriority, as it is called. Why do I know that this approach is better? It is because multiple governments at multiple levels have never fulfilled on pension superpriority, and even bills here in this Parliament are coming late in the session, because the studies have shown that more companies will go under as a result. We want the companies to survive so that the jobs and the pensions are preserved, which is what CCAA and restructuring legislation are about.

I want to thank the member for her bill and thank her for the opportunity to speak to the elements of the issue that I agree with her is an issue we have to tackle.

Bankruptcy and Insolvency ActPrivate Members' Business

2 p.m.

NDP

Scott Duvall NDP Hamilton Mountain, ON

Madam Speaker, I know my grandchildren, my grandson and granddaughter are watching. I want to say hello to Oliver and Lena while I have the chance.

I rise today to speak to the private member's bill, Bill C-372, an act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act, pension plans and group insurance plans, sponsored by the member for Manicouagan.

First I would like to thank the member for bringing the bill forward. Like my Bill C-384, and like former Senator Eggleton's Bill S-253, the bill would bring about legislative changes needed to protect the economic well-being of Canadian workers and their families.

As members in the House will know, I have invested a great deal of my time advocating for the protection of workers' pensions and benefits. I have been pushing the government for over three years to bring forward legislation. However, no, the government is too afraid to offend its corporate friends. It hides behind fancy words like “unintended consequences” and consultations meant only for show. The government has made it very clear what side it is on, and it is not the side of Canadian workers, retirees and their families.

I have been a member of the United Steelworkers Union for 35 years, 25 of those years spent on the shop floor at Stelco in Hamilton and for 10 of those years, acting as president of my local union at the Stelco plant called Stelwire.

In 2004, I was part of the negotiating team that spent two years working through the first bankruptcy restricting procedure under the CCAA and just two years go watched as my former union wrapped up negotiations in its second go-around on the restructuring under the CCAA.

As members can imagine, the inequities and difficulties caused by the inadequacy of Canada's bankruptcy and insolvency laws are of great interest and concern to me. I have seen the damage caused by our inadequate laws, and I am determined to see them changed. The rights of workers to fair and stable pensions and secure benefits has been a concern to me my whole working life.

This is why I am so happy to see legislation that secures workers' pensions and benefits finally come to the floor of the House of Commons. Make no mistake, I would have rather seen my own bill, Bill C-384, up for debate first, but there is enough in common between this bill and my bill that I and the rest of my caucus colleagues will support its passage.

I salute my colleague from Manicouagan for bringing forward a bill that will protect Canadian workers, retirees and their families, and I say “merci beaucoup”.

Many Canadian companies use Canada's bankruptcy laws to effectively gain concessions from their employees and escape responsibility for often huge pension deficits they themselves have created. Workers are then left with the threat of reduced pensions and health care benefits.

Large multinational corporations are also using Canada's inadequate bankruptcy laws to take money meant for workers' pensions and divert it to pay off their secure creditors, which are often their parent companies. This is organized theft. Pensions are, after all, deferred wages, plain and simple. Diverting, withholding or seizing those funds should be illegal. Changing Canada's inadequate bankruptcy and insolvency laws is all about fairness for workers.

It is important to point out that the Liberals campaigned on a promise to improve the income retirement security of all Canadian seniors, but have refused to take any meaningful action. Changes proposed in recent budget legislation encouraging parties to act in good faith and clarifying the discretion of judges in CCAA proceeding does nothing concrete to protect workers' pensions and benefits.

Chris Roberts, policy director at the Canadian Labour Congress, had this to say about pension provisions in the government's budget implementation act. He said that modifications brought to Bill C-97 on the Bankruptcy and Insolvency Act as well as to the Companies' Creditors Arrangement Act “are inadequate and represent a missed opportunity to prevent” members of a defined benefits program and retirees from being the victims of injustices that would result from losing their benefits when businesses became insolvent.

What is even more disheartening is that the government refused to even acknowledge the grim future of the workers and retirees involved in recent bankruptcy proceedings like Sears, Stelco, Wabush and Cliffs mines.

This bill would amend the Bankruptcy and Insolvency Act and the CCAA so that companies would have to bring any pension plan fund to 100% before paying any secured creditors. It would also make amendments to require companies to pay any termination or severance pay owing before paying any secured creditors.

These amendments would inject some fairness and protection into a process that often sees the interests of workers, retirees and their families placed behind all others in a bankruptcy, liquidation or restructuring process.

The recent collapse of Sears Canada has focused attention on the injustices inherent in the Canada bankruptcy and insolvency laws. These amendments would help to fix these imbalances and provide Canadian workers, retirees and their families with the protection they expect and deserve.

Our current bankruptcy laws give priority to investors, banks and parent companies over workers' pensions and benefits. Time and again, proceedings under those laws have resulted in the interests of workers being overshadowed by the interests of rich investors and banks. Workers often lose severance pay benefits, pension benefits and health benefits. People in management also make out like bandits, giving themselves huge bonuses while cutting off the benefits of workers and retirees.

This is an equity issue. At a time when 82% of the wealth in this country is going to the top 1%, and we see executives at Sears being paid over $6.5 million in bonuses while the workers are denied severance or termination pay, have their benefits cut off and see their pensions reduced, we have to recognize and work to eliminate the growing gap between the haves and have-nots in this country. It is a matter of basic decency and human rights. Every Canadian deserves no less.

It is important that I point out one significant difference between my bill, Bill C-384, and the bill before us. I also have to say that I hope it is a difference that can be addressed at committee through what I would like to think would be a friendly amendment. In my private member's bill, there is a clause that would prevent a company from stopping the payment of any retirement benefits during any proceedings under the BIA or the CCAA. This is a fairly common practice, and it causes great hardship for workers and retirees. The exclusion of any language dealing with this problem is the only substantial difference I can see between my bill and the bill before us today.

These legislative changes would inject some fairness into a process that often sees the interests of workers, retirees and their families placed behind all others in a bankruptcy, liquidation or restructuring process. Canadians know that it is wrong to allow pensions and benefits to be stolen and are demanding that our inadequate bankruptcy and insolvency laws be changed to protect workers, retirees and their families.

I have gone across this country to many town hall meetings to listen to people who are concerned. Many people do not know that in our bankruptcy laws, their pensions can be reduced. They think it is a shame. They cannot believe that it is even happening in our country.

What I am trying to get at is that people want to see a change, and they are sending a strong message. In Hamilton, in 2015, I made that commitment to my constituents in Hamilton Mountain and all Hamiltonians. When I crossed the country, I also made that commitment to Canadians. I made a promise that I would fight in this House to make sure that we no longer lose. This is our money. It is deferred wages. When I made that commitment, I know that many others made that commitment and promise, especially all the members from Hamilton. I am going to keep my promise. That is why I am supporting this bill. I expect the other members from Hamilton to support this bill and keep their promise to Hamiltonians also.

In closing, I want to thank the sponsor of this bill. I believe that it is time to change. We have to stop the fearmongering by big corporations that say that they will not get investments. That is just false. We have to turn the tide to make sure that retirees and workers get the money they negotiated all through their lives and that it is not stolen by corporations that want to unload their liabilities because they made mistakes in running their companies.

I thank the members for the time. I hope everyone supports this. We made promises. Let us keep them.

Bankruptcy and Insolvency ActPrivate Members' Business

2:10 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Madam Speaker, the issue of pensions has always been of keen interest to me, going back to the days when I was a member of the Manitoba legislative assembly. As has been pointed out, not only the national government but also the provincial governments have to play a critical role in this.

I like the fact that the word “pension” means deferred income. When we go to work, work an eight-hour day or however many hours we put in, a great deal of consideration is given to the benefits that go beyond that hourly, weekly or monthly rate paid to us. A pension is a deferred income.

Therefore, it is important we not take the view that no sacrifice has been made. Whether they are private or public pensions, they are part of the incomes of people. Instead of receiving that income today, they want that additional income for retirement. Therefore, we can only imagine the impact it would have on people to have their pensions denied or threatened, especially when they have worked for many years and have put in their time to justify that income upon retirement.

Going back to the early nineties, I can recall walking along a picket line in which there were many of my constituents. I was quite surprised and shocked to hear the degree to which many private companies had marginal pensions at best. This was a relatively large company. I listened to what the workers had to say regarding the types of things for which they were fighting. One of those issues was pensions. They wanted to ensure they would have a reasonable pension when it came time for them to retire. Imagine putting in 30-plus years, especially in a labour situation, and getting only $400 a month out of that, after contributing to a pension plan all those years. It was that strike situation, and walking along that line and listening to the workers, that made me realize how much pensions really mattered.

Although that occurred back in the early nineties, my interest in pensions has never diminished. However, when we talk about pensions, I recognize that we need to factor in the fact that it is not just the responsibility of the federal. The provinces play a critical role as well. One of the things I can really appreciate is the fact that it crosses party lines. For progressive steps to be taken, it is often about leadership from within.

I would challenge members who sometimes believe one party is better than another. I am referring to my New Democratic friends. One of the policies that came out during the NDP government in Ontario related to pensions. My colleague across the way who just spoke might recall this. Those members might recall that in this policy was a clause called, “too big to fall”. It looked at using pension funds as a tool to support a company's expansion and survival. NDP cabinet members sat around that table and allowed it to take place.

That greatly diminished the security of pensions. As much as we like to point fingers at the private sector or other parties, I think it is important to recognize that one of the greatest failures, from a government policy perspective, was when the NDP was in power in the province of Ontario. There was a significant change, which had a profoundly negative impact on the idea of pensions. I believe that what we need to see are proactive approaches from governments at all levels to strengthen the security of pensions.

Let us look at the last budget we introduced. We put in a policy that would restrain unreasonable executive payments by requiring publicly traded companies to hold non-binding say-on-pay shareholder votes and to allow courts to scrutinize them, and, if appropriate, hold directors liable for unreasonable executive payments made in the lead-up to insolvency.

There is nothing that annoys workers more than seeing a company having financial difficulty go for bankruptcy and then hearing of these multi-million dollar payouts to directors or management. I see that as taking away from pension funds.

Yesterday we were talking about the budget implementation bill. This budget would take tangible action that would provide additional security for pension funds. I think it strikes a positive chord to many workers who at times feel threatened because of what is taking place in companies. Through this budget, we would now have a court process to indirectly monitor these executive and directors payouts. Many go into millions of dollars at the cost of the person working on the factory floor, in a retail outlet, or wherever else it may be.

When I think of pensions and the issue of insolvency and bankruptcy, there are things the government can do at both the federal and provincial level. I am glad that we have been able to address it, at least in part. There are always opportunities to look at ways to enhance it. I look forward, over the next number of years, to hopefully be able to dig in deeper on the issue.

This government has been working with stakeholders to ensure that it takes action that will benefit workers and our economy. Pensions matter. That is why we put so much emphasis on achieving the CPP agreement with the different provinces. For the first time in 15 or so years, we actually got the provinces and the federal government coming to an agreement on CPP contributions so that working people will get more money when it comes time to retire. That is why we invested more money in the guaranteed income supplement.

This government appreciates the value of pensions for seniors and workers. That is why we have taken this action today, and there is going to be so much more we can and will be doing in the future.

Bankruptcy and Insolvency ActPrivate Members' Business

2:20 p.m.

Liberal

Francis Scarpaleggia Liberal Lac-Saint-Louis, QC

Madam Speaker, I truly appreciate the opportunity to speak to this issue, and I will mention why.

First of all, it is clearly an important issue. Income security in retirement is something that people work toward. However, people do not really give much thought to it until they approach retirement in their later years.

When pensions were solid and secure, our society really did not pay that much attention to the potential risks in the future if the economy changed, for example if returns on investments diminished or if companies, because of newly competitive environments, faced financial difficulties and sometimes even insolvency and bankruptcy.

Early on, when the population was a bit younger and the demographics were different, people just paid into company pensions and really did not think about the possibility that someday that nest egg might not be there or that it might be smaller than anticipated.

My engagement with the issue began shortly after I was elected in 2004, and it was because I have very many constituents who worked for companies whose pension plans did not produce at the end because of bankruptcy.

I have many former Nortel employees living in my riding of Lac-Saint-Louis. There was a major Nortel facility down the highway from where the riding is located. Many of my constituents had very good careers there, only to find out one day that their pension payments were going to be much less than they had anticipated.

I also have many Air Canada employees living in my riding of Lac-Saint-Louis. While the company is doing very well today, there was a time when we did not know if the company was going to continue to be a going concern, and there was actually a deficit in the pension plan. I am not sure exactly where things line up with the pension plan right now, but it is much better than it was maybe 10 or 15 years ago.

Various stakeholder groups have been meeting with me over the years, including the Nortel pensioners and the Air Canada Pionairs, who are the retirees of Air Canada. As I said, I have many Air Canada employees in my riding because the riding is in close proximity to the airport.

Until not long ago I also had a facility called Indalex in my riding that made the news about pensions. That case went to Ontario Superior Court and has become a rather well-known pension case.

The government has also been engaged with this issue. Groups like CARP and others have interacted with the government to press for greater protections for pensioners, and the government has listened. It may not have come up with all of the solutions yet; there may be more solutions coming in the future to what is an extremely complex problem.

While the issue of pensions is important and while it concerns a growing number of people who are focused on it, it is also one of the more complex issues. It is a financial issue. It involves markets. Anything that involves actuaries is by definition complex, and it may be a little hard to understand all the facets of it.

The government has taken the issue seriously. In budget 2018, the government committed to undertaking stakeholder consultations and consultations with the broader Canadian population on measures that could be taken to ameliorate the situation beyond what many groups have called for, and by that I mean the solution of giving superpriority to pensioners in bankruptcy proceedings.

However, the government, while it stopped short of that, for now anyway, did take the issue seriously and tasked the Minister of Innovation, Science and Economic Development to undertake consultations. These consultations were undertaken, and we saw some results of these consultations in the 2019 budget.

Bankruptcy and Insolvency ActPrivate Members' Business

2:30 p.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

Unfortunately, the time for our business has expired. Therefore, the hon. member will have three and a half minutes the next time this matter is before the House.

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.

It being 2:30 p.m. this House stands adjourned until next Monday at 11 a.m., pursuant to Standing Order 24(1). I wish everyone a great weekend.

(The House adjourned at 2:30 p.m.)