Industry committee  So I think that gives a perspective.

Industry committee  Basically, I've looked at the market as a whole: all of the bank debt, all of the bond debt, the pension deficit, and then the equity in the economy. I think I've sorted out in my mind that for the economy as a whole, as long as the recovery is 40% in the bankruptcy, then the secured creditors and the pension deficit would be covered.

Industry committee  Yes, I was a financial expert in the asset-backed commercial paper bankruptcy, which was the largest bankruptcy in Canada. It involved $220 billion of credit default swaps. I have updated my analysis and have determined that there are $4.5 trillion of credit default swaps on the global junk bond market.

Industry committee  First of all, the impact is negative 1.5%, not what you just said. I said 20 basis points, so that's 0.20%. So if the mid-term bond now is at 3.25% interest rate, I'm saying that's going to go to 3.45% interest rate, so that's a difference of 0.20%. When the interest rate goes up, the value of the bond goes down.

Industry committee  I'm going to speak technically this morning on the impact of Bill C-501 on the cost of credit. My conclusion is that the cost-of-credit impact is small on investment-grade owners and corporations with defined benefit pension plans. By comparison, the impact is small relative to the high damages and costs to retirees and severed workers of maintaining the status quo.

Finance committee  I just want to make the comment that we're very concerned about the Nortel Canada estate. Nortel's bankruptcy process is being driven out of New York, by the unsecured creditors committee. It's entirely possible that the Canadian estate will not have significant funds in it. My estimates are that approximately $1 billion out of the $6 billion could end here.

Finance committee  Sure, in fact work in the public.... It's been broadly circulated with invitations to anyone who would like to make suggestions as to where I may not have it right. So far, no one has produced any contrary studies, but you're more than welcome to send it anywhere in the world.

Finance committee  They were not forthright with respect to two matters. They did not adequately advise the employees of Nortel that when they made their own employee contributions to raise the amount paid, or when the employer made his own contributions, those contributions of money were not going to a third-party insurance company.

Finance committee  We'd like to see the BIA amended, because it's going to deal with all circumstances, now and forever, whether you have a trust account or a trustee agreement or whether you're simply providing those long-term disability benefits on a self-insured basis. We'd like to take this first step with the BIA amendment; it would, however, also make sense to proceed to make other amendments in other areas, such as the federal corporations act, the federal labour act, and all the provincial acts.

Finance committee  I think we also have to consider that his pension, which was 90%, was 60%. People don't retire at their working wage. They get 60% of their working wage. Then he takes 90% of 60%, so now he has 54%. Then she takes 60% of 54%, so—who can do the math here?—that is 35%, and then take another cut of a third--

Finance committee  I would rather that you spend your time on providing preferred status for the pensioners and the terminated workers and that you give a preferred plus, or super-priority, for the long-term disabled. In that manner we can be assured that when there is money in the corporations the moneys are going to fulfill the commitments of the deferred wage and the insurance-like product that they offered employees.

Finance committee  I agree with you.

Finance committee  There's a substantial—

Finance committee  The problem has arisen because there is a substantial number of corporations that self-insure their long-term disability benefits. That means they are acting in the role of an insurance company.

Finance committee  What happened in the Nortel case was that it was misrepresented. Up until 2005 there were no disclosures that would lead anyone to believe they had a long-term benefit that was not insured by a third party. Remember, this is a non-unionized environment, and post-2005 Nortel indicated for the first time that the plan was self-insured, but said that it, Nortel, was playing a role similar to that of an insurance company.