Madam Speaker, I am pleased to address this very important bill, which seeks to protect wage earners when their employer goes bankrupt, through amendments to the Bankruptcy and Insolvency Act, to the Companies' Creditors Arrangement Act and, of course, to others acts, as I will explain in my comments.
We are pleased to hear, from the Liberal Party, arguments that reflect those made in the fall of 2003 by both NDP and Bloc Québécois members, who were convinced of the need for such protection. At the time, the NDP had presented a motion to that effect, but the Liberal Party had voted against it.
According to the figures quoted by the hon. member for Guelph, each year, between 10,000 and 15,000 workers suffer losses of wages that are owed to them when their employer goes bankrupt. We knew that in the fall of 2003. I do not want to reflect on the past, but it is rather sad and upsetting that, over the past two years, workers were prevented from enjoying such protection. The Liberal Party was aware of the situation, but it still voted against that motion.
I also want to draw an analogy with another bill that was tabled by the Bloc Québécois just recently, during the spring. This bill was debated and supported by my Bloc Québécois colleagues, including the hon. member for Saint-Bruno—Saint-Hubert, who also took part in the debate on the current legislation, Bill C-55, at second reading. The bill proposed by the Bloc dealt with job protection during labour disputes, and more specifically with replacement workers.
In recent years, this issue has been debated countless times in the House. Again, it is because of the Liberal Party, which defeated it by 12 votes, if that bill was rejected. The Liberal Party, and particularly the ministers, voted against this legislation.
So, I am drawing an analogy between that bill and the one currently before the House. Why did the government wait so long and let workers suffer so much before adopting constructive measures?
We support the principle of Bill C-55. However, a number of amendments to be presented in committee will have to be included in it.
It would be rather useful to review the way the law is currently worded, in order to have a proper understanding of the content and scope of Bill C-55, as well as the necessary amendments.
At the present time, there are two kinds of creditors when there is a bankruptcy: the primary creditors, which are termed secured claims, and the secondary claims. Secured claims include all those secured by mortgage or some tangible form of guarantee. Employers have never had such a security, and all other types of claims have to be satisfied before they get to the workers.
Then there are the non-secured claims. There is a whole series of these, and wages rank only fourth. Higher in the list are funeral expenses, administration costs, and deductions payable to superintendents. Wages come only after all these, so it is a rare occurrence indeed for workers to receive compensation for work done or monies owing to them. Sometimes these amounts make all the difference, and at least provide them with an income and the ability to live in dignity until some other recourse comes along.
There is an expression used in labour law, in fact a statement of principle: “All work deserves pay”. The same thing must apply in this case. It is amazing that there is no protection for workers in the event of bankruptcy in the year 2005. The bill will, of course, remedy that shortcoming. Just how it will do so, we will come back to later.
The responsibilities of trustees in bankruptcy will also be broadened. At the present time, the time period and the amount distributed are governed by law. There is a time limit of six months for wages owed, and a maximum amount of $2,000.
Now, for the Employment Insurance Act. Workers who lose their jobs still use the term “unemployment insurance”. We are all aware of the philosophy that lay behind the Liberal Party's decision to change its name. The connotation was that the insurance was there to ensure people of work, yet we all know very well that it was an insurance in the event of misfortune, of job loss. So it should still be called “unemployment insurance”.
Currently a worker has to use up all of his resources before he can get employment insurance, which is another major shortcoming that needs to be corrected. The whole matter of earnings during a waiting period, a period of unemployment, undeclared earnings during a claim for benefits period, and earnings within the framework of employment benefits or allocation of earnings during a program, are things that further put off when the worker receives employment insurance. The Bloc Québécois called on the government to correct this for a number of years.
As I was saying earlier, other hon. members in this House joined the Bloc in finally correcting this matter in 2005. Better late than never. We will support this bill by providing a number of corrections and changes.
Let us now talk about the very nature of the bill, which is said to create the wage earner protection program. Under this new legislation, the federal government will cover up to a maximum of $3,000 of the wages of wage earners in the event of a bankruptcy. We are quite pleased with this measure. We have no objection to the government becoming the primary guarantor and taking the appropriate measures to seize or recover the money owed by the company. That was the second aspect.
Contrary to the past claims of the current government, it is interesting to discover that the related costs are quite limited. An hon. member from the Liberal party reminded us earlier that there are 10,000 to 15,000 workers a year who will be affected by this measure. That is no small figure.
What would it cost the government should it be unable to recover the money owed to workers? For the first year, it would cost $32 million. In the worst case scenario, it could cost up to $50 million. This is not much at all for this kind of palliative measure, which makes the delay in implementing such a measure even more questionable. It is certainly a cause for joy, and all the more so since these amounts are theoretical in the sense that the government will be able to recover some of that money. In certain situations, it will recover all the money owed, based on the value of the company.
With Bill C-55, the federal government would create a priority higher than secured creditors for workers' claims of unpaid wages and vacation pay. I will take this opportunity to mention something that was raised earlier by another member, and that is the need for more coercive or more direct measures to protect the pension funds of these workers.
Since I seem to have enough time left, I will elaborate on this issue.
Indeed, I have time to deal with the pension protection scheme. The bill also creates a mechanism. Thus, under the bill, a court would be able to authorize a proposal for bankruptcy or for an arrangement only when proof has been made—the interesting thing is that there are three very clear conditions—“that employee and employer contributions to the pension plan that had not been paid at the time of bankruptcy or receivership have been paid or that the court is satisfied that the contributions will be paid under the arrangement, or that the involved parties made an agreement”.
So, this first measure is being taken. And if these obligations were not met, the court could ask that the money in the pension plan be used in priority in the claim payment. In this way, workers would not be penalized by the bankruptcy, because their pension would be protected.
This leads me to an aspect that is not in this bill and that might very well have been. In the advent of a bankruptcy, of course, wage earners will be able to get their salary back. However, this would come to an end at some point. What is due is due. People need money to survive. However, when they do not have any income, they rely first, of course, on employment insurance, which we commonly call “unemployment insurance”. Thus, the amounts payable to wage earners should not delay the receiving of employment insurance benefits. When people have exhausted their employment insurance benefits, if they have worked beyond the age of 55, what will happen to them? They will have nothing. Will they wait for their pension?
It is during debates on this bill, that we need to be concerned about this, as the Bloc has done tirelessly. We have reminded the other parliamentarians that POWA, the program for older worker adjustment, needs to be reinstated. This program assists workers when they no longer have an income, because of their age and the fact that there are no more jobs available in the regions. This is often the case for young people, but it is even worse for older workers. This way, they would receive an income. For now, we believe that EI should be paid out of the consolidated fund. This would allow older workers to receive benefits, and therefore an income, until they are eligible for their Quebec pension, along with an adjustment. This would help them until they are eligible for the old age pension.
This program would not cost more than $50 million in the first year, for individuals who are truly unable to find other employment. At worst, in subsequent years, it would cost $75 million. So, this is peanuts for an EI budget of $16 billion.
We wonder why it is taking the government so long to implement this measure, when we know that thousands of jobs are being cut and that older workers are unable to find employment. They are appealing to programs of last resort, often without receiving anything. As a result, they are being reduced to poverty.
It would be interesting for the government to find out what happens to older workers who are unable to find a job and have no income. People say that a government is judged by how it treats its seniors and its children.
The current government would get a nice taste of reality if it examined the fate it has imposed upon older workers who are unable to find a job now and who have no income.
The last point I want to raise relates to labour unions. There is another measure we welcome. Sometimes, in very specific conditions, even before bankruptcy, it can be established that a company is in a bad situation because of circumstances over which it has no control, like foreign competition on our markets. Here, it would often be competitors from Asia. That could push a company to bankruptcy. The measure would allow the re-opening of collective agreements. In such a case, the court would have to evaluate the situation and if appropriate, there would be discussions with labour unions. Then new measures could be agreed upon and introduced.
In the case where the unions made concessions, for example, where employees would have to accept a salary reduction, as we have seen recently, the employees collectively, through their union, would also become creditors. That is another interesting provision.
Other members will undoubtedly talk about students going bankrupt. After a number of years, they should not be forced to reimburse their loans, even if they go bankrupt. When it has been established that their bankruptcy is real, they should be treated like any other citizen who goes bankrupt and their debt should be completely erased.
I will conclude on that. That is our position. There are surely a lot of other points to raise. I will try to do that while answering questions.