Madam Speaker, I am pleased to rise today to speak to a bill that we in the NDP think is long overdue. Of course, one of my colleagues from Hamilton presented a similar bill in the last Parliament to finally address pension obligations and the benefits that workers expect to receive when they pay into a pension plan over the course of their working life. They deserve their due.
It is one thing for members to talk about hypothetical situations, such as what this might mean for bank lending practices or what it might mean for creditors of various kinds. However, what is not hypothetical is that right now, when a company does go bankrupt, the pensions that workers have paid into for their entire working lives are not given the respect and priority they are due. What is not hypothetical is that real working people are losing out on the retirement that they paid into and saved for through a company pension. That is wrong. What is not hypothetical is that right now, when there is a bankruptcy proceeding, the very real investment on the part of the worker is not given the same due as the investment made by international hedge funds that expect to get their money back.
Frankly, we can work out the details, and the market will adjust to a new framework. We hear in other instances of the incredible faith, on the part of the Conservatives and Liberals alike, in the power of the market to adjust to new circumstances. Our argument is that there is a moral imperative here to ensure that people who have their entire future, their entire retirement, wrapped up in the future of a company and its plans get what they are owed. Of course, in some cases they may not be able to get everything they are owed because there is simply not enough money. However, they should not be last in the pecking order. They should not be waiting for the scraps off the table of international investors. They should be given their due alongside investors and lenders to ensure that their lives are not ruined.
We understand very well that lending institutions have to assess risk when they offer loans and that it has to be worked into a business plan. However, our current practice says that when businesses are making those business plans and lenders are assessing that risk, they can literally bank on being able to take away the pension contributions of workers. There is something fundamentally wrong with the idea of them knowing from the outset, whether it is a company, lender or investor, that they can take it to the bank, and that workers who currently work at a company and, in good faith, pay into a pension plan will get screwed in the event of a bankruptcy so that those investors or lenders can get paid out. Workers do not have an equal say at the table. That is what companies are allowed right now. It is wrong, and it is not a hypothetical situation. It is a real injustice that is taking place right now.
The role of government, if nothing else, is to set a fairer framework and a fairer set of rules for the economy to work under. Then it is up to players within the market to adapt to those rules. The NDP thinks it is of fundamental importance that we recognize the status of workers and their retirement funds and ensure that they have to be part of the business plan of a business and part of the business plan of lenders and investors so that they pay workers their due.
It is frustrating to have to keep talking about this, particularly in light of an election commitment by the Liberal Party, which is running the government right now. The Liberals keep saying they respect workers, that this is very important and that they are going to get to it, but they never really get around to it. However, we see proposal after proposal being brought forward by private members in order to fix this fundamental unfairness. The sooner we fix it, the sooner the markets can adjust to the new reality, and it is an adjustment that needs to come.
Workers need to know that they can pay into a pension plan and have it be there for them, and that they are not always going to be playing second fiddle to investors and others, as was the case in the example of Sears raised earlier. It is not hypothetical that the Sears pensioners lost a massive amount of their pension: It is true. They lost it at the point of bankruptcy, and a whole bunch of that money went to Sears' creditors. They lost it before, too, in terms of investors coming in and stripping the business of all its cash, and the company not making the payments it ought to have made into the pension fund.
There is a large issue around pensions. There are other issues and injustices with respect to how the system is set up that prejudices itself against workers and their pensions, which ought to be addressed. That is not an excuse not to move forward with a perfectly good proposal that would change the situation. It would, and actors within the market would have to adjust to that. That is the point.
The point is that the situation needs to change, because right now there is a serious wrong being done to workers who deserve an equal seat at the table, just as when Nortel went into bankruptcy and workers lost over half of their pension earnings.
These are the kinds of things that we need to do if we want to talk about the larger issue of pension reform. Employers should be making their regular contributions to company pension funds. We often see that employers are allowed to take vacations on contributions to their pension funds when things are going well, but of course the plan for pension funds is that contributions are made in poor years and in good years, and that the contributions made in the good years help put enough capital in the fund for it to ride out the bad years. When employers are allowed to take vacations on that, we sometimes see the accumulation of really extraordinary pension fund deficits.
Other arguments are trotted out about how pension funds are not sustainable and employers would have to contribute totally unrealistic amounts to the pension funds in order to keep them going. That is because in good years, instead of continuing to contribute to the funds, in some cases employers are allowed to not contribute anything at all. That is certainly a problem.
Many Conservative members in the House refer to the Canada pension plan as a simple payroll tax, which I think is a serious deception. It is something that employees and employers pay into as part of their wage package, in order to provide further retirement security once employees' working years are done.
When it was set up, the CPP was meant to be a third of a person's pension income. Their company pension would provide another third, and their personal savings would provide the final third. Frankly, we are talking about how to better protect company pensions for those who are fortunate enough to still have them. The fact is that many companies have been divesting themselves of pension risk altogether and are not providing real pension plans, certainly not defined pension plans. Something like 7 in 10 workers in Canada today do not have a pension at all.
We have not seen the Canada pension plan really pick up the slack in the way that it needs to in order to make sure that everybody could be contributing towards a defined benefit that would provide the cornerstone of their retirement income. Even now when we see a proposal from the government to raise the old age security amount, it is doing it in a way that, again, is unhelpful, by creating two classes of seniors rather than offering the same increase to all seniors 65 years old and older. The government is only offering it to seniors aged 75 and up, when we know that the very same income and cost pressures are there for seniors regardless of whether they are 75 or older, or 65 or older.
This piece of legislation is very important. It is important from a moral point of view. It is important from an economic point of view: There are advantages to protecting the incomes of seniors in our local communities who spend that money in our communities. Let us absolutely make it part of a larger package of reform to better protect and strengthen the pensions of Canadians from coast to coast to coast.