Debates of May 11th, 2021

Budget Implementation Act, 2021, No. 1

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, I rise today to point out that this extremely costly 700-page half-trillion-dollar budget will raise the cost of living for working class people. When money is printed to pay bills, the cost of living is driven up, increasing inflation, which drives up interest rates. Those higher interest rates that will apply to record levels of household corporate and governmental debt will lead to an inevitable debt crisis.

The government is not giving anything. It actually is taking away and it is doing so through the most surreptitious and insidious method, which is an inflation tax brought on by heavy doses of printing money, which is going to hurt the working class while helping the super-rich and causing a debt crisis. We should not be going in that the direction.

[Mario Simard, Bloc, Jonquière, QC]

Madam Speaker, I really like the member for Carleton and I enjoy his presentations.

He spoke to us about modern monetary theory. We do not agree on it. In terms of approaches to political economics, I do not share the classical view.

However, I would like to draw a parallel. In the budget, I would like to see a new theory, modern oil and gas theory. This theory tells us that we can reduce our GHGs through the oil and gas industry. That is the strategy that the government is proposing with the green plan they have introduced, more specifically the $17 billion to be invested in grey hydrogen.

I do not know if my colleague sees the parallel I am trying to draw. Does he think that oil and gas can be used to reduce carbon in a green recovery plan? Is that not a little like the modern monetary theory he was telling us about earlier?

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, I think the theory he is referring to is the one about how, in Quebec, the most popular vehicle is the Ford F-150. What goes in a Ford F-150? Oil.

The Bloc Québécois is constantly asking for subsidies for Bombardier to cover the cost of airplane construction and huge executive bonuses. What goes in those planes? Oil.

Right now, the Bloc Québécois and Quebeckers are worried about Line 5 being shut down, depriving Quebeckers of half the oil destined for refineries in Montreal and Lévis. They are worried people will not be able to go to work. What goes in those pipelines? Oil.

Acknowledging that we have to reduce oil consumption and greenhouse gas emissions is all well and good, but we also have to acknowledge that oil is important, that it exists and that it should come from Alberta, Saskatchewan and Newfoundland, not from other countries.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Madam Speaker, my colleague's intervention was very illuminating as to his perspective on things. He expressed a lot of concerns about the budget and, of course, I have concerns with it as well. I suspect that our concerns are very different. I am concerned that people will not thrive as we finish the third wave. I am concerned that we do not have paid sick leave. I am concerned that we do not have dental care and that there is not enough support for post-secondary students.

The member's colleague from Red Deer—Lacombe just talked about how 98% of Canadians, from his perspective, had access to pharmacare. Does the member believe that and if so, how?

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, the vast majority of Canadians do have access to drug coverage either through their employer or through their provincial social assistance. A small minority do not. We should look at how we can address that.

What shocks me with the NDP, once again, is how its members seem to have no problem with this money printing exercise even though it has been proven, and the Governor of the Bank of Canada has admitted, it balloons the assets of the super-rich while diluting the wages of the working class. It is an inflation tax that transfers money from the have nots to the have yachts. I would think the NDP, which claims to care so much about the gap between rich and poor, would have something to say about that inflation tax.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, I am glad to speak to the budget implementation act, and I want to congratulate my friend from Carleton for an excellent speech.

It is very clear that the Liberals' so-called stimulus fund in this budget is really all about spending on Liberal pet projects and partisan priorities, not creating jobs and growing our economy. We continue to see no plan to get back to a balanced budget. We know spending in certain areas is completely out of control. This budget has been panned by the parliamentary budget officer and a number of financial experts. Editorials in major newspapers have not given it a passing grade.

It has been said many times through this debate that the Prime Minister of Canada, the Liberal Prime Minister, has racked up more national debt in the past six years than all previous prime ministers and governments of all political stripes in the 150-year history of Canada.

My granddaughter's birthday is today, and Sarah turns one, and I wish her a happy birthday. When she was born last year, she was already on the hook for over $31,700 of her share of the national debt. Today, she is now on the hook for almost $40,000. That is how much it has gone up because of the Liberal government.

There is no doubt we are dealing with a pandemic and there is no doubt a lot of emergency spending had to happen. However, we also know that a lot of money has been wasted and has gone into Liberal priorities, not the priorities of Canadians. As has been said many times, we are getting very concerned about the cost of this borrowing and how all this new printed money that is being pumped into the economy is going to impact inflation.

Whether we are looking at new home prices or when trying to buy lumber at a local lumber store to rebuild a fence or put a new deck in the backward, all these prices are skyrocketing because of this injection of cheap money printed by the Government of Canada.

We went through this once before under Prime Minister Pierre Elliott Trudeau. I took out my first mortgage to buy some farm land back in 1984. Because inflation was out of control and the Bank of Canada was trying to control it, interest rates were pegged at over 21% for mortgage borrowing. If we have that type of escalation in the cost of borrowing, there is no way people will be able to afford the homes they bought. They will be more than mortgage poor; they will be into foreclosures. The Government of Canada's borrowing will grow exponentially and it will have to take money from other programs just to pay down the interest on this huge debt, totalling over $1.4 trillion.

In this budget, we have another $101 billion in new spending over the next three years. We have a deficit left over from last year of $354 billion. This is not sustainable and we need to ensure we do not bring forward programs that will be structural and cause structural deficits. We have to ensure the assistance is there, but that it is short-lived and is removed as soon as we start to recover. The PBO has already said that we need to continue to balance our spending so we can adjust as people come of the recession caused by COVID.

We have to remember that today's deficits are tomorrow's taxes, and 74% of Canadians, according to a Nanos poll, have already said that they are incredibly concerned about the deficits the government is racking up under the Liberals.

One of the things missing in this budget is that there is nothing to increase productivity and competitiveness. When we were in government under Stephen Harper, we provided dollars to businesses to accelerate their capital gains losses against any equipment they were buying to increase productivity. They could buy new machinery or tools for their shops.

By increasing productivity and increasing competitiveness so they would be able to compete on the world market, they were creating more jobs. By creating more jobs, Canadians are back at work. They are stimulating the economy, because they are spending more, and they are paying taxes.

The budget we have in front of us right now is not a growth budget, and it fails to have any way to get Canada into a position of prosperity down the road. As I said, the Parliamentary Budget Officer said that a significant amount of the spending in this budget by the Liberals will not stimulate the jobs or create any economic growth, and that is going to hurt the long-term outlook on this budget, which is that they are expecting to see growth exponentially to fund that debt down the road.

I am really concerned about how this is affecting local businesses, especially in my riding of Selkirk—Interlake—Eastman. So many businesses are slipping through the cracks, especially seasonal operations. Here we are, going into a second summer under COVID with lockdowns and no ability for so many different businesses to operate.

I am thinking about caterers. I had a conversation with Danny's Whole Hog recently. All the weddings that were booked for this summer have now been cancelled. The company went last summer with almost no events to do and no catering available, and its barbecue business right now is pretty much dead. Instead of running 20-plus teams around the province, doing barbecues every weekend, it is down to only several staff. The owner is glad that he has had access to the wage subsidy program, but there is no guarantee that it is going to be extended down the road, especially as these seasonal businesses do not have revenues once they get through the summer and fall, and by then it is going to be too late for many of these companies.

There are summer camps in my riding, along beautiful Lake Manitoba, Lake Winnipeg and over in the Whiteshell: Camp Arnes, Camp Massad, Gimli Bible Camp and Camp Cedarwood. They did not have any campers last summer and again camp has already been cancelled for this summer, so they are looking for help.

One of my constituents, Jennifer Mills, has just been so tenacious in dealing with the loss of revenues to her company. She is in the carnival business. I have a neat industry in my riding where we have three main carnivals that go and set up at the midways, local fairs, rodeos and festivals: Canuck Amusements, Select Shows and Wonder Shows. Again, they are going into the second summer, over 20 months now without any revenue, and there have been no programs to support them. Jennifer has emailed the Liberal government over 200 times over the last 20 months, and still nobody has bothered to respond to her, whether the Minister of Small Business, the Minister of Finance or anyone.

That does not even deal with hairdressers, restaurants, libraries, outfitters and museums. They are all suffering, yet there is no help coming from the government for most of those businesses.

Agriculture is key to this economy. It is key to my riding. It is in my blood, as I am a farmer myself. I look at my family and immediate family and I am worried about young farmers and how they are going to be bearing the cost of these programs. I am glad to see that after we asked the Minister of Agriculture for a year to exclude the carbon tax on propane and natural gas that is used for drying crops, the Liberals are finally doing that and refunding it. It is a start.

This budget is proposing funding for more efficient grain dryers and farm equipment not powered by diesel fuel. There are no alternatives out there, and young farmers depend upon having to use used equipment. They buy used equipment, which is going to be based on older technology, so diesel fuel is the lifeblood of agriculture. If we want to eat, diesel fuel is going to be part of that for a very long time to come. There is no reference here to how the government is going to reward farmers for bringing in better crop rotation, low-till practices, zero-till practices and carbon sequestration. It is a public good, but there is nothing there.

Farming depends upon trade, and there is no funding in this budget to help our farmers trade more, especially as places like Communist China become more unpredictable on whether we will be able to access it.

I have more to say, and I will deal with that in the questions and answers afterwards, but I am glad to be able to get on the record talking about the gaps and the failures of the Liberal budget.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, I have heard Conservatives today talk about how this budget is not going to do anything for Canadians and will certainly cripple our economy, in their opinion. I respect that opinion. However, it is not an opinion that is shared by everybody. The former governor of the Bank of Canada, who I might add was a Stephen Harper appointee, had the following comments in relation to the government's plan. He said, “ingredients that one needs to have in a sustainable plan are present, and that was done without a meaningful increase in taxes of any kind.”

Would the member like to reflect on the comments that were made by the former governor of the Bank of Canada, who was appointed by Stephen Harper?

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, the member for Kingston and the Islands can pat himself on the back all he wants. The Liberals may not increase taxes in this budget, but they will. It is just a matter of time, because these massive out-of-control deficits are not sustainable.

The one thing we need to remember is that the number one ask of the provinces was help with health care. We are dealing with COVID-19, and hospitals are overwhelmed. There are not enough nurses, doctors, health care aides and other support staff. We know the provinces wanted the federal government to step in and be a partner. What did it do? The Liberals turned their backs on the provinces and funding health care properly, and instead are now sticking out their hands to the provinces and asking them to be their partners on a national child care program. This is something that the Liberals have been promising for the last 20 years and have failed to deliver each and every time. The provinces cannot afford to be in a national child care plan while we are dealing with a national pandemic.

[Matthew Green, NDP, Hamilton Centre, ON]

Madam Speaker, we have heard many Conservatives today bemoaning what has happened with the working class. This is newfound language the Conservatives have found with the working class, yet we have not heard any critiques whatsoever of the Liberal government's $750 billion Bay Street bailout. We have not heard anything about companies like Imperial Oil, which took $120 million in subsidies and then paid out $300 million in dividends.

What does the member tell the farmers in his riding about all the big corporations that have been at the trough while small businesses and rural farmers in his constituency continue to suffer?

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, the farmers in my riding want the government to get out of the way. They want to eliminate the red tape. They want to get away from all the enforcement of new regulations that do nothing to enhance productivity or to allow farmers to feed the world. We need to make sure processors are there to buy and process our products so we can export them around the world.

There is one thing in this budget I did not get the chance to talk about. I am the critic for national defence. There is new money in the budget, and I congratulate the government for finally realizing that we need to invest in our sovereignty and put more money into modernizing NORAD, we need to do our responsibility under NATO, and we need to deal with sexual misconduct and gender-based violence within the armed forces. The one thing I am worried about is that out of all of the funding it announced, over half of it is, as the budget says, “Funds Sourced From Existing Departmental Resources”.

Essentially, the government is robbing Peter to pay Paul. Those dollars have been transferred out of military infrastructure, which will hurt the overall competitiveness or capability of our armed forces in dealing with security threats in the future.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Madam Speaker, my colleague talked quite a bit about small businesses and the small business sector. Conservatives have supported more inclusive expanded programs during the entire pandemic, but one issue that I hear about quite a bit in Kelowna—Lake Country, and I wonder if the member hears this as well, is that businesses that opened in late 2019 or early 2020 are still ineligible for a lot of COVID relief programs. They are hit even harder because quite often they have personal and business debt intertwined.

How does this budget work to give hope to small businesses through an economic recovery plan that the member can see?

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, I thank the member for Kelowna—Lake Country for her comments, and this is the one thing we are very concerned about. A lot of our seasonal businesses, especially in my riding of Selkirk—Interlake—Eastman, have a lot of people come up from the City of Winnipeg, from other places across the country and internationally, but they are not coming these days. People are taking staycations at home with all of these lockdowns and limitations.

However, there is little offered in this budget that provides long-term hope to those businesses, especially those that have not been able to access the programs that are out there. Maybe they are ma-and-pa-type operations that do not have the opportunity to use things like a wage subsidy program or an emergency business account, and we have to remember that the emergency business account is just another loan. There may be some relief for it down the road, but it just means inheriting more debt and that, of course, has to be paid back.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

It being 5:56 p.m. the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

The House resumed April 23 consideration of the motion that Bill C-253, 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.

Bankruptcy and Insolvency Act

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Madam Speaker, I am pleased to put some thoughts on the record today regarding Bill C-253. This bill would put pension plans in priority to secured creditors in the event of bankruptcy proceedings.

Prior to my life in politics, I practised commercial law for over 20 years as a partner in a downtown Winnipeg law firm. Much of my practice involved doing commercial loan securitization for financial institutions. For the most part, it was my job to ensure that proper legal documentation was in place to ensure a first charge against the assets of the borrower on behalf of the lender. A first charge was always essential to the security requirements of the lender.

The concept of a secured creditor having a first charge is also fundamental to the functioning of our economic system. Without that guarantee, lenders would be far more reluctant to make loans and would view this as a major risk in their security position. Many businesses require debt financing to function, do business, provide jobs for their communities and hire employees.

When I saw this bill, my first concern was what would financial institutions do if this law was changed, in other words, if pension funds had priority over the secured position of lending institutions. How would it affect existing indebtedness? In other words, that would be loans that have already been made predicated on a first charge against the borrower's assets.

I suspect many financial institutions would be very concerned and we could see some instances where they might say that if pensions were to come first, they could no longer take the risk and call in their loan. This is a likely outcome of this legislation as it is currently presented and could pose a serious threat to businesses that fall under federal jurisdiction for pensions and result in challenges for them. In other words, the bill could have the exact opposite effect from what it intends. It could force businesses to close if the lenders see this as an increase in the risk profile, an unacceptable risk, jeopardizing pension plans and pensioners.

On the other hand, one could also argue that this law would incentivize banks for new loans to insist that pension funds were secured and in solid shape by the company before they would agree to make a loan. The problem with this approach is that in the case of defined benefit plans, if there is a precipitous drop in the value of the assets of the fund or of the company after the loans are made, then it may still be difficult for the company to pay back the bank if it must first satisfy the pension plan. This could create a drive toward conversion of many plans to a defined contribution model.

Another problem can occur where a company is failing and needs to restructure its debt but cannot find a lender to take on the additional risk if it is forced to subordinate to pension obligations.

It is clear there are serious issues with any bill that has, as its goal, a fundamental shift in security prioritization away from lending institutions. However, as a society, we must also recognize the importance of labour. I can see the argument being made of why a bank should have priority over people who have worked their entire lives for the company. It is not the fault of those workers that the company went bankrupt and so their pensions should be protected. It is here that we have a conundrum. If lenders cannot be first, they may not lend. If they do not lend, there may not be a job. If pensioners do not receive their pensions in the event of a corporate bankruptcy, workers might not work and, again, there may not be a job.

This is a difficult predicament and as I was writing this speech, it made me think of the biblical tale of King Solomon’s baby. In that tale, two women claimed to be the mother of the child. To settle the dispute, Solomon decreed that the child be cut in two, upon which the true mother revealed herself by insisting the baby be given to the other woman to save its life.

I do not have any such Solomonesque wisdom in the case of pensions, banks and public companies, but I do think this bill, as it is presently constituted, could result in the end of some companies for lack of willing bank capitalization.

What this debate does make clear is that we must find a better way to support businesses and their employees, and I think we would be hard pressed to find anyone who disagrees with this idea. When bankruptcies occur, far too often there is a long list of creditors and individuals who need to be made whole and there is unfortunately not enough money to go around in many instances.

We also must consider the effects on the supply chain of a company that is unable to restructure its debt. What happens to the employees that work for the suppliers? There are all kinds of small business suppliers that could be shut out in the event of a bankruptcy.

A working paper by the OECD regarding priority creditor rights for pension funds discusses this issue. One of the arguments against measures like what Bill C-253 proposes is that, if this were allowed, a range of social issues could come forward claiming priority rights, such as health benefits or environmental claims to name a couple. Would these be prioritized over pensions? How would we decide that?

The OECD working paper makes also makes a strong case against changing the position of pension claims within the creditor rankings. This argument centres upon the fact that, aside from the complications of changing bankruptcy legislation, doing so may be harmful to capital markets and damaging to the investment climate.

If pension funds are given superpriority status, other creditors, who may be small trades and personal creditors, would be bumped down the line, increasing their credit risk. These suppliers may also be hesitant to provide their services in a pension superpriority environment. Also, lenders, given the additional risk, could in turn pass this risk on to businesses in the form of more expensive interest rates and capital. As well, the marketplace could be adversely impacted with increased bad debts and potential failures. This could result in less confidence in our financial markets. It could also make Canadian businesses less competitive vis-à-vis foreign jurisdictions that do not have such a law.

It could also be argued that any change in the ranking of pension obligations would have a negative impact on credit cost and availability. One alternative to help address the issue might instead be to make it illegal for shareholders to strip a company of its cash in the form of dividends when there is a pension shortfall. If we look at what happened with Sears Canada, it is an example of where this type of change would have benefited pensioners.

Its majority shareholder, an American hedge fund, took out billions in cash from the company. In 2005, the hedge fund took out $1.5 billion. In 2010, it took out $750 million, and in 2012, it took out $100 million. However, in 2007 there was already a pension shortfall of $36 million and that shortfall continued to widen, reaching $267 million by 2015. There would have been more than enough cash available to Sears Canada to cover its $36-million pension shortfall in 2007, and any other future shortfall, if cash were not being withdrawn from the company at a challenging time, so rules to prohibit dividend stripping when a pension is in a shortfall could be beneficial by allowing a company access to more cash to cover its losses. As a result, that could serve as an effective tool.

Another option could be pension plan insurance, which companies would pay into in the event a pension is unfunded and a company faces insolvency.

There are different alternatives to solving the problem this bill proposes to address. I believe at committee there will be more alternatives discussed. There we will have a chance to have a full discussion of the benefits and pitfalls to be brought forward and addressed by hearing from witnesses, such as workers, employers, academics, financial institutions and others. I think as we work toward a solution on this issue, we must remain focused on ensuring there is a balanced approach.

The security of pension plans for workers must remain top of mind, but we must also avoid measures that could discourage investors and lenders from trying to save a company in despair. King Solomon would expect nothing less of us.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

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.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Resuming debate. The hon. member for Saint-Hyacinthe—Bagot.

There seems to be a technical problem, but it will be fixed fairly quickly. I would like to remind all speakers to be well prepared before speaking.

The hon. member for Saint-Hyacinthe—Bagot.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I apologize for the hiccup. I hope I will be forgiven, as it is my birthday today.

I am pleased to participate virtually in the debate surrounding Bill C-253, proposed by the hon. member for Manicouagan, of the Bloc Québécois. The purpose of this bill is to amend the Companies' Creditors Arrangement Act and the Bankruptcy and Insolvency Act. Bill C-253 is the logical continuation of Bill C-372 that the hon. member for Manicouagan introduced in 2016, during the previous Parliament.

At the time, this bill was only debated for an hour before it died on the Order Paper because the Liberal government did nothing. The purpose of the bill was to prevent other retirees from unfairly losing their pension funds that they have worked all their lives for, which is what happened to the workers at Cliffs Natural Resources.

Let us set the scene for a moment. In 2015, this U.S. company wants to place its two Canadian subsidiaries under the protection of the Companies' Creditors Arrangement Act. Meanwhile, Cliffs Natural Resources announces plans to restructure its activities with a view to shutting down its operations in eastern Canada. However, the restructuring had quite dire consequences, not only for existing employees, but also for pensioners, who lost much of their pension fund and group insurance.

That tragic situation was the impetus for the bill, which was intended to make legislative fixes, which my colleague will be much better able to confirm since I was not yet in the House at the time. Had Bill C-372 become law when the events had taken place a year earlier, the Cliffs Natural Resources pensioners would certainly have been given a bigger piece of the pie, namely the claim that was owed to them.

By proposing to amend the Companies' Creditors Arrangement Act and the Bankruptcy and Insolvency Act, I think that we are calling today for legislation that will ensure fairer treatment for retired workers while maintaining fair treatment for creditors.

The purpose of the bill is therefore to prevent other creditors from getting access to what, in the end, amounts to the workers' life savings in the case of bankruptcy or restructuring. That seems logical. Since seniors are more financially vulnerable than other demographics, today, we would like this bill to fill a gap that has been created by the Liberals' silence on the matter by providing proper, fair and equitable legal protection centred on two main initiatives.

First, before the court approves a business's proposal for bankruptcy or restructuring, it must account for the total amount of special payments, as well as the amount needed for the liquidation of unfunded liabilities or solvency deficiencies of pension plans.

In plain language, the company's proposal must provide for a pension fund bailout if the court is convinced the company is capable of doing that. This rule would protect workers' pensions from being cut off, and we think it is crucial to protecting workers' savings.

Second, a reread of the Bankruptcy and Insolvency Act reveals six categories of creditors: first, creditors whose claims are deemed to be held in trust; second, unpaid suppliers; third, super-priority creditors; fourth, secured creditors; fifth, preferred creditors; and sixth, ordinary, unsecured creditors.

Bill C-253, which we are arguing in favour of today, would add other payments and indemnifications to these six categories of creditors. For example, special payments would get preferred claim status. The same goes for indemnification for beneficiaries of group insurance plans in which the company participated as an employer. The total amount of special payments, as well as any amount required to liquidate unfunded liabilities or solvency deficiencies, would also be secured claims against the bankrupt's assets as of the date of bankruptcy.

In keeping with our principles and our values, my Bloc Québécois colleagues and I support this bill, which has been introduced for the second time by my colleague from Manicouagan, and we support it for many reasons. First, the bill will recognize that a pension plan is a form of deferred wages, and second, it will cushion the financial blow to pensioners when their former employer declares bankruptcy. I was just talking about that a moment ago. With our bill, bankrupt companies or ones that are restructuring their operations will have to provide the total amount of any special payments and the total amount needed to liquidate their unfunded liabilities or solvency deficits in the pension plan fund. In this same spirit, this bill is beneficial because it will protect retired workers' group insurance plans. It will also compel businesses to better fund their pension plans. Finally, it will enable the Standing Committee on Industry, Science and Technology to study this important social issue. That will surely please my Bloc Québécois colleague who sits on that committee, as well as all other members of the committee.

In closing, dear colleagues, if passed, our proposed Bill C-253 would protect workers and retirees so that they would never again lose the pensions that they earned after a lifetime of hard work. We find such injustices unacceptable. It is our moral duty to defend and respect active workers and retirees who, generation after generation, have slowly forged and are still forging the way of life we are fortunate to cherish today.

Ottawa's wait-and-see attitude and inaction have gone on long enough, and while this is the position that requires the least effort, it remains the least honourable. If we do nothing, history will judge our politicians by the way we let down the citizens, who spend more time looking backward than forward.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Madam Speaker, I am happy to join my colleagues in the debate over Bill C-253, as we consider the important issues of protecting the retirement security of Canadian employees and pensioners when an employer faces insolvency.

Our government recognizes that all Canadians deserve peace of mind when it comes to their retirement security. We have taken several major steps to strengthen all aspects of Canada's retirement income system, including enhancements to old age security and the Canada pension plan. At the same time, corporate insolvencies create a challenge for workplace pension plans, as well as for the economic security for employees who may have unpaid wages and benefits. Bill C-253, while well intentioned, takes a flawed approach to these issues.

By contrast, our government has taken important and practical steps to enhance the retirement security of all Canadians and better protect the interests of Canadian employees and pensioners in cases of employer insolvency. First, in 2019, the government made changes to insolvency corporate and pension laws to strengthen the protection for workplace pensions, taking a whole-of-government, evidence-based approach. These changes were based on feedback from national consultations with labour and pensioner groups, company lenders, experts and the public at large.

After listening to Canadians, our government enacted a comprehensive package to enhance retirement security via budget 2019, which strengthened security for pensioners and workers, but also built on the internationally recognized successes of Canada's marketplace framework laws. The changes made to our insolvency laws have made corporate restructuring fair, more transparent and more accessible for pensioners and workers. Participants in insolvency proceedings are now required to act in good faith. As well, corporate directors will have to think twice before approving excessive payments to executives at the expense of pensions or benefit plans in the lead-up to a firm's insolvency, as courts will have more powers to review these payments and find directors liable where appropriate.

In proceedings under the Companies' Creditors Arrangement Act, courts have been given greater power to order the disclosure of economic interests to enhance fairness and transparency in insolvency negotiations. The relief that a large corporation can seek on the first day of a CCAA restructuring is also now limited to what is absolutely necessary to avoid immediate liquidation. This means that pensioners and employees will have greater opportunities to participate in restructuring proceedings and make representations to the court before decisions are made on issues such as changes to employee group insurance benefit plans or pension contributions during the restructuring.

In our consultations, Canadians told us that a proactive approach to retirement security is the best and most sustainable approach. We received that message loud and clear, and that is why the government also amended federal corporate law to allow for more market oversight of corporate decision-making and worked to better align corporate incentives with the interests of workers and pensioners. Moreover, we have taken measures to restrain unreasonable executive compensation by requiring federally incorporated publicly traded corporations to hold advisory shareholder votes. Taken together, these measures will further regulate corporate behaviour and instill market discipline and oversight on corporate decision-makers.

Finally, our actions in budget 2019 also improved federally regulated pension plans by clarifying that if a pension plan is terminated, it must still provide the same benefits as when it was ongoing. Moreover, federal pension plans are permitted to transfer the responsibility to provide pensions to a regulated life insurance company to better protect pensions and pensioners from the risk of employer insolvency. In addition, our government has taken strong actions to directly support workers impacted by employer insolvency. The wage earner protection program provides financial assistance to Canadian workers who have lost their jobs and are owed wages, including termination and severance by their insolvent employer.

Since 2008, the program has paid more than $337 million in wages to nearly 129,000 Canadian workers. In 2018, this government increased the amount available to workers from four to seven weeks of insurable earnings.

In budget 2021, the government committed to further strengthening the program by eliminating a 6.82% deduction that was previously in place. Quite simply, these reforms will put more money in the pockets of Canadians who have lost their jobs and are owed wages by their employers.

The best way to protect economic and pension security is by preventing employer insolvency in the first place. This is an incredible challenge in the context of the COVID-19 pandemic, which has been so hard for so many of our businesses from coast to coast to coast. That is why an essential part of Canada's fight against COVID has been unprecedented federal financial supports for Canadians and Canadian businesses, which have helped keep insolvency levels down.

While the other side has dismissed these programs and the timely support they offer to Canadian families, businesses and workers, we made a promise to Canadians to have their backs through this pandemic for as long as it takes. In budget 2021, our government committed to extending these support measures as long as the fight against this virus requires it. The actions I just described will create better outcomes for pensioners and workers affected by the insolvency of their employer.

In contrast, Bill C-253 is coming from a good place, in terms of its intention of helping pensioners, but it takes a misguided approach in trying to do so. It would prevent some companies from restructuring, which would result in unnecessary job losses; hurt pensioners; harm small business; reduce access to credit and investment; and hurt Canadian competitiveness. Many firms are already struggling due to the pandemic. This bill would worsen, not improve, the situation.

I am pleased to say, however, that our government has taken effective action. Our insolvency and corporate law changes, our wage earner protection program improvements and support for businesses during the pandemic have all served to protect pensions and workers, while also supporting the central objectives of Canada's economic recovery. These measures help to ensure that our farms remain competitive and can continue to employ hard-working Canadians throughout the country.

[Larry Bagnell, Liberal, Parliamentary Secretary to the Minister of Economic Development and Official Languages (Canadian Northern Economic Development Agency)]

Madam Speaker, I am coming to you from the traditional territory of the Kwanlin Dün First Nation and the Ta’an Kwäch’än Council.

When I saw this was to be debated this afternoon, I thought I would like to add a few personal comments, because the issue of people's pensions has always been a point of passionate interest for me. In fact, over the years, I was aghast to learn that people could actually lose their pensions. I do not know if people who are in their golden years and live on pensions like the OAS, the Canada pension plan, or their company plan or a government plan think that those could all of a sudden partially or fully not be there. I do not think anyone ever thinks about that. I was aghast to find out that people could lose the pensions they had worked for all their life. I assume they have planned their life around living on those pensions when they are no longer able to work.

For years, I have been hearing from people who worked for Nortel. They lost their pension years ago, and must be in a terrible situation now.

The previous speaker outlined, in great detail, how this was a very complex legislated area and he outlined a number of positive steps the government had taken. It helped to enhance retirement security through the Budget Implementation Act, 2019 when it added balanced changes to the BIA, the CCAA, the Canada Business Corporations Act, the CBCA, and the Pension Benefits Standards Act, 1985, the PBSA. These changes followed national consultations with companies, labour groups, pensioners, experts and the general public. Therefore, along with those changes and the consultations, which the previous member mentioned, these are all steps in the right direction. In fact, I was really delighted when the government was able to work with the unions and make a deal with the provinces and territories to expand the Canada pension plan, which again is sustenance for people who otherwise would not have it or have access to it.

However, there are still situations where there are problems. What I want people to think about, whether this gets to committee or other forums, is how we solve the problem of protecting the money people and their company have put into a pension fund. People plan to retire on that money. They plan to use that to buy food or pay for heat in their senior years. I am not an economist or a pension expert so I do not know exactly how that would be done.

If hard-working people are putting aside contributions to a pension fund through their company, there should be some way to protect that. I do not know if that might mean legally requiring that money be put in a different bank account or an institution and it cannot be taken out. I am looking for an answer to the problem. Whether this bill is the answer or not, I do not know, but I certainly think this discussion has to occur.

That is why I am glad this concept is before Parliament. If that money were legally required to be separated, then I am not sure we would be debating this issue today. I think this has been debated at times in the past.

The Conservative speaker mentioned there were a number of solutions to this problem and that is all I am looking for, is a solution to this problem.

The NDP acknowledged what the Conservatives were saying in that this will change the financial situation and the financial systems. It would for secured creditors. Certainly, we have to look at a different system.

We want Canadian businesses to thrive. We want them to be competitive in the global world. I think the point was brought up earlier in the debate that we have to consider how to keep our companies competitive with those around the world because that is what our companies are competing with in this modern connected world. That is an important consideration as we determine a solution that must be found for this problem.

When the system is set up with rules in place so pensions are somehow protected, those people starting and running companies will know that right from the very beginning. Their business plans will be structured on that. Their financing will be structured on that, so there will be no surprises, and the business could move on under whatever those rules are.

A point was made about struggling companies and certainly, whatever the solution is, it has to make sure as much as possible that companies can be helped when they are getting close to insolvency. We want to keep them in place so there are still jobs for the workers. The solutions to that should not be the life savings of hard-working people. That should not be the solution to keeping a company solvent so people have jobs.

They have to find other methods to deal with the restructuring and keeping companies solvent, making sure they can get adequate financing, but it should not be on the backs of people who have worked their entire lives to support their families. When they get to a few years of rest and retirement, they should be able to have that support.

I am looking for whatever solution can be found for that. The problem still exists. Government has made very good progress toward improving the situation, but it needs to be completely improved so people's pensions will always be there.

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, it is a pleasure to be in the House tonight to conclude debate on my bill, Bill C-253, an act to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act with respect to pension plans and group insurance plans. The bill has a long name, but it is actually quite simple. I will move on to its principle.

What I want to do is protect the deferred salaries of employees, of pensioners. In other words, when people contribute to a defined benefit pension fund, they expect that when they retire, they will be able to get or have what they have earned over a lifetime of work and labour. This is a very simple principle. We do not want a company or multinational to walk away with a large chunk of the fund because it has underfunded the pension plan. In very simple terms, that is what Bill C-253 is seeking to address.

Of course, we have been told, in many different ways, about all the problems we might face with a bill like this one. While the principle is simple, the devil is obviously in the details, but I would like to remind the House that our primary goal is to work for the people.

During the debate, I heard many comments about how, in the end, the government did good things in its budget. Let us hope that is the case, but we cannot rely only on hope. What I am putting forward here is not a one-time budget measure. Rather, it is intended to be a permanent legislative measure, since we are legislators. I am therefore proposing a solution.

I would like to thank the many people who worked with me over the past few years. Things take a long time in the House. We have been working on this bill for five years with the help of many people, including workers, pensioners and unions in Quebec and the rest of Canada.

I have an extraordinary team who has believed in this bill since we began our work for one good and simple reason, and that is the fact that the people from my riding of Manicouagan asked for this bill. That is the standard by which we should always measure the work that we do here. The people of Manicouagan had a need for this bill and they made it clear even before I was elected. They made that need clear during the election campaign, when I met with them, so many people contributed to the development of this bill.

I would therefore like to thank my entire team, all the organizations, local agencies, unions, pensioners and many others. I would also like to thank all of my Bloc Québécois colleagues, who also believe in this bill and who worked on it with me. I obviously want to thank my colleagues in the House. I believe I heard that many of them will be at least voting in favour of the principle of Bill C-253 so that it can be examined in committee.

I would now like to say a few words to each party.

The official opposition indicated it would support the bill, saying that it could be improved upon—which is true of anything, in my opinion. I hope the opposition will support the bill and we can discuss it. As several colleagues have already said, we have been talking about it for many years, but no action has been taken.

With all due respect to the government, the fact that it is increasing old age security in no way responds to what I am asking here on behalf of my constituents and other Canadians. That might be a nice infomercial for the government, but it has nothing to do with what I am calling for.

The official opposition has said it will vote in favour of referring this to committee for study. At least some mental effort is being made.

As for the government, it will probably vote against it, even though I have heard several people applaud the solutions to the difficulty we are facing. Even at its own Liberal convention, several party members, including government members, tabled a resolution in favour of a bill like mine. I would expect the governing party to vote in favour of something called for by a majority of its members, possibly.

Furthermore, the bill presents a balanced position. We often hear fearmongering about how this is going to result in business closures, but no, this takes a balanced approach.

I will conclude with this example. When Cliffs Natural Resources went bankrupt, its main creditor was itself. It gave itself $400 million. That $400 million belonged to the pensioners in my riding. I would prefer that, with a bill like mine, this money be returned to the workers and pensioners, not to the multinationals that continue to turn a profit.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

The question is on the motion.

If a member of a recognized party present in the House wishes to request a recorded division or that the motion be adopted on division, I would invite them to rise and indicate it to the Chair.

The hon. member for Manicouagan.

[Marilène Gill, Bloc, Manicouagan, QC]

Madam Speaker, I request a recorded division.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Pursuant to an order made on Monday, January 25, the division stands deferred until Wednesday, May 12, at the expiry of the time provided for Oral Questions.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.