Mr. Speaker, I want to thank my colleague from Winnipeg Centre for having introduced Bill C-281. As I have already said elsewhere, if he had not introduced it, I would have been happy to do so in my capacity as Bloc Québécois labour critic.
There is no point in repeating that the Bloc Québécois supports the bill in principle. Obviously, employees normally have no way to protect themselves when their employer experiences financial difficulties. Unlike financial institutions, which have more than one source of income, employees do not have the same ability to absorb a loss of income for hours they have already worked.
Obviously, it is difficult for employees to assess the risks of working for a particular company. When an employer has financial problems, its best resources may decide to leave to avoid losing any income, which would further decrease the employer's chances of resolving his problems.
I want to reiterate the commitments the Bloc Québécois made during the last election campaign. The BQ committed to proposing amendments to the Bankruptcy and Insolvency Act so that the wages and pension funds of employees would be the first debts paid if a company went bankrupt.
The current situation, as we know, is inadequate. Under the current legislation, an employee who has worked all his or her life for the same firm can end up without any income if that company goes bankrupt. The employee loses not only future salary income, but also all contributions to the company pension plan.
For example, in 2003, the workers and retirees of the Canadian Steel Foundries in Montreal found themselves with an unfunded pension fund when the foundry closed. In that case, the guaranteed creditors were owed $5 million, which left nothing to pay for the system's unfunded liabilities, such as the pension fund, amounting to $260,000. The employees' pension benefits were reduced but the bank was able to recover its $5 million.
The Bloc Québécois voted in favour of a motion brought before the House by the NDP in October 2003, asking the government to amend the Bankruptcy Act to ensure that the wages and pensions of employees would be the first debts paid in case of bankruptcy. Unfortunately, the Liberal Party voted against that motion and the bill was not passed.
Today, as I said, the Bloc will vote in favour of this bill but during the adoption process, it will propose certain amendments. For example, the Bloc will propose the creation of a fund to guarantee pension benefits, which could provide protection to participants in pension plans that are unfunded when the business closes. Such a fund exists in Ontario.
The wage guarantee has not been changed since 1975. The $2,000 amount would be equal to around $7,300 in 2004 dollars, according to the Bank of Canada's conversion as of December 3, 2004. It should be increased and indexed.
The fact is that the rights of creditors and the rights of workers are seriously out of balance. Secured creditors are usually the ones who can forgo that guarantee, that is, they can survive financially without a guarantee.
Creditors at the top of the list, financial institutions and large suppliers, have the expertise not only to assess a company's risks, but also to create a guarantee in a legal context. In contrast, employees do not have the opportunity nor very often the information they would need to obtain any guarantee that their hours of work will really be rewarded.
Employees cannot easily absorb a loss of income, unlike financial institutions that have several sources of income.
Even though the proceeds of their activities might be higher than wages, financial institutions diversify their risk, which a regular employee cannot do.
Thus, by giving first priority to unpaid wages, Bill C-281 would reduce the burden on an employee who has just lost his job and, need I remind you, would be a better social measure.
It is important to note that there is no guarantee employees would receive the full value of their unpaid wages, since the amount paid would depend on the value of assets being liquidated. Nonetheless, the money paid back would be even less if we kept the current system.
Some have said that making unpaid wages a first priority might inhibit the borrowing capacity of the companies, particularly those with a very large payroll. Some also say that the rules for borrowing could become stricter and that interest rates could increase if lenders no longer had priority status.
In response to these arguments, let us remember that financial institutions broadly diversify their risks and that wages are often much lower than capital costs.
These days, pay day is usually every two weeks, which greatly limits the risk of having huge amounts to pay in wages.
Passing this bill would shake up the bankruptcy and insolvency rules and standards, which have for too long gone undisturbed.
However, this restructuring is more than necessary, since the business world is constantly changing and workers can no longer be so sure about the future of the companies that employ them.
It is wrong not to ensure a minimum of protection for workers' wages and certain benefits, such as the pension funds they contribute to their entire lives while their employer has enjoyed profits.
To those who claim that amending the act will cause major problems for companies in terms of financing, they should never forget that the operation and success of a company depend in large part on its workers.
It is unthinkable that in the quest for profits and the lowest possible operating costs, we are failing to show due respect for workers.