44th Parl. 1st Sess.
June 15, 2022 02:00PM
Madam Speaker, I am very happy to rise today to speak to this very important piece of legislation tabled by my colleague from Sarnia—Lambton.
Pension protection has been at the forefront of our legislature for what seems like years. Every Parliament has had various attempts to protect worker pensions from insolvency. They are tabled and it seems that every Parliament has this issue which we all agree is important, but it dies on the Order Paper.
Hopefully, Bill C-228, an act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985, will finally see our legislature take concrete action to protect Canadian workers and their hard-earned pensions.
Bill C-228 amends the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act to ensure that claims in respect of unfunded liabilities or its solvency deficiencies of a pension plan are accorded priority in the event of bankruptcy proceedings. It also provides that an employer has to maintain group insurance plans and provide benefits to, or in respect of, its employees or former employees.
This area has particular importance to me given my previous career as a financial adviser and current career as the official opposition's shadow minister for seniors. Workers spend their entire lives building something for them to enjoy during their golden years. Bill C-228 is a big step forward in securing those years for future generations.
This legislation builds off two previous pieces of legislation that were before the House: Bill C-405 in the 42nd Parliament and Bill C-253 in the 43rd Parliament.
Bill C-405, which was tabled by my hon. colleague from Durham, was unfortunately defeated at second reading. The logic from the government according to the now Minister of Justice, was that the “proposed changes reduce the flexibility of courts based on particular situations and facts. These current flexibilities help to achieve the best outcome for the company and the pensioners and they might conflict with important policy objectives.” The NDP felt that the legislation did not accurately protect pensions.
The following Parliament saw a little more progress on the file. The member for Manicouagan managed to garner enough support to send her attempt to committee despite opposition from the Liberals, who claimed:
[T]he employee group benefit claims would be weakened and that could ultimately weaken companies in their ability to restructure and affect that sense of competitiveness of firms with respect to defined benefit pension plans as well as group insurance benefit plans, which would not necessarily help pensioners and workers in all cases. It has the potential to threaten the existence of defined pension plans.
While the bill may not have been perfect, we on this side of the House were willing to put the financial security of Canadians ahead of any partisan differences and we pledged to send the bill to committee so that it could be improved. Over seven meetings and after consultations with dozens of witnesses and expert testimony, the bill was returned to Parliament amended and improved.
I bring up Bill C-253 because this legislation that we are speaking about here today is very much a spiritual successor to that earlier piece of legislation. The two pieces of legislation share a very large amount of the same text. What Bill C-228 does is build on the very good work that was done on the file in the last parliamentary sitting by amending the Pension Benefits Standards Act, 1985, to empower the Superintendent of Financial Institutions to determine that the funding of a pension plan is impaired or that the pension plan administrator is at risk and to set out measures to be taken by the employer in respect of the funding of the plan in such cases.
Michael Powell, president of the Canadian Federation of Pensioners, said:
We support Bill C-253 and the extension of superpriority to pension deficits. This is the simplest solution to meaningfully improve pension protection for Canadian seniors.
In our Canadian regulatory environment, the only single place to protect pensions is within insolvency regulations. This committee and Parliament face a decision between the status quo—which leaves seniors' future financial well-being at risk and perpetuates an unfair system designed to exclude seniors from protecting their own financial interests, an unfair system that has been proven to significantly harm older Canadians—and a new future that offers protection to vulnerable seniors.
Mr. Hassan Yussuff, former president of the Canadian Labour Congress, was also supportive, saying, “The CLC, of course, supports Bill C-253, and I want to thank the members who voted to advance this bill.”
Unfortunately, an election call meant the death knell for Bill C-253. While the bill itself is dead, the spirit of co-operation among all parties that followed Bill C-253 need not be.
During debate on Bill C-253, the legislation's previous iteration of Bill C-228, the former member for Hamilton Mountain called for support of the legislation, even though he had a similar piece of legislation tabled before the House, Bill C-259. Unless I missed my mark, that legislation has been reintroduced in this Parliament by the member for Elmwood—Transcona as Bill C-225. The former member for Hamilton Mountain said, “I feel strongly about the necessity of these protections put forward, so much that my bill, Bill C-259, contains equivalent measures to every article contained in this bill. I would like to let her and the House know that I am calling on all my NDP colleagues to support the bill at second reading and I hope to see it get to committee.”
I hope my honourable friend and his party will continue down the path of co-operation and multipartisanship that his predecessor did.
I mentioned earlier how I had a previous life as a financial adviser. I saw first-hand the complete destruction of livelihoods that tore through Hastings—Lennox and Addington when Nortel and Sears went belly up. The financial security of nearly 37,000 Canadians went up in smoke overnight.
These were terrible lessons that affected every single one of our ridings and lessons that we cannot continue to ignore. We, as a legislature, need to work toward protecting Canadian pensioners. We have before us a piece of legislation that has previously received support from the majority of parties in this House. It is a piece of legislation that, in fact, has been tabled by two separate parties. How often can we say that? It is a piece of legislation that has already gone through the scrutiny of a parliamentary committee and debate.
I would suggest to my colleagues in the House that we do the right thing, pass Bill C-228 into law and avoid the fate of so many other attempts to protect Canadian pensioners.
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Madam Speaker, I would like to begin by thanking my esteemed colleague, the member for Sarnia—Lambton, for introducing Bill C‑228 and for working across party lines throughout the process, working with all the opposition parties on a bill that matters very much to the Bloc Québécois.
I would also like to express my appreciation to my colleague from Manicouagan, who began working hard on Bill C‑228's precursor in 2015. She has really done some outstanding work.
We are here to talk about Bill C‑228, which amends the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act. The amendments would:
...ensure that claims in respect of unfunded liabilities or solvency deficiencies of pension plans and claims relating to the cessation of an employer’s participation in group insurance plans are paid in priority in the event of bankruptcy proceedings.
It also amends the Pension Benefits Standards Act, 1985 to provide that an employer may provide financial security in the form of insurance for any portion of the contributions that they are required to pay under subsections 9(1.1) and (1.2) of the Act....
Basically, this means that the enactment:
...to authorize the administrator of [a potentially] underfunded pension plan, in certain situations [including bankruptcy], to transfer or permit the transfer of any part of the assets or liabilities of the pension plan to another pension plan. The amendments also provide for the tabling of an annual report respecting the solvency of pension plans.
I would like to begin by providing a bit of context. My hon. colleague from Joliette touched on this.
One important factor in the history of all the bills on this issue is of course the bankruptcy of the American company Cliffs Natural Resources. The two Canadian subsidiaries operating its facilities, at Bloom Lake in Pointe-Noire and in Wabush, were placed under the protection of the Companies' Creditors Arrangement Act in 2015.
As a result, Cliffs Natural Resources announced plans to reorganize its operations with a view to closing down its operations in eastern Canada. This restructuring had serious repercussions for Cliffs' employees, as well as for its retired workers who lost much of their pension and group insurance.
During the 42th Parliament, that is from 2015 to 2019, my esteemed colleague, the member for Manicouagan, introduced Bill C‑372, a bill to protect workers' pension funds. Debated for just one hour, the bill, which was intended to prevent injustices like the injustice done to Cliffs workers, sought to ensure that this would not happen again and that other retirees would not lose the pensions they worked for all their lives. Unfortunately, the bill was never acted upon because the Liberal majority government at the time did not implement it.
Throughout the last Parliament, the Bloc Québécois worked very hard, particularly with the other opposition parties, to protect pension funds, but unfortunately that work did not bear fruit. To buy time, the government appointed the former minister of seniors to hold a consultation and, again, that led to absolutely nothing. Since then, we have also seen the bankruptcies of Sears and Groupe Capitales Médias.
With the economic turmoil caused by the pandemic, there is every reason to believe that there will be more bankruptcies and that workers must be protected to ensure that, in the event of a bankruptcy, they have access to a pension fund.
I would like to take this opportunity to quote a very important part of the press conference my esteemed colleague from Manicouagan gave, in collaboration with the esteemed member for Sarnia—Lambton: “A pension fund is deferred wages resulting from an agreement between workers and a company. When a company decides to breach that contract and pay off its debt by using that money, that is theft, plain and simple.”
While all the opposition parties have introduced a bill to protect workers' pensions, we have the opportunity, as parliamentarians, to move quickly through each stage of the legislative process to ensure that pension plans are protected as soon as possible. We have this opportunity because we are in a minority government. For once, the opposition parties can join forces, set partisanship aside, and get this bill passed to help these workers.
No one will be surprised to learn that the Bloc Québécois supports the principle of Bill C‑228. Currently, when an employer declares bankruptcy, what they owe the pension fund is considered an unsecured claim. Also, once secured creditors and preferred claims are paid, there is practically nothing left to replenish the undercapitalized pension funds. The result is that pensioners end up with reduced pensions, sometimes drastically so.
The overall objective of Bill C‑228 is quite similar, in that it is designed to better protect pension funds in the event of bankruptcy. When a company is being restructured in accordance with the Companies' Creditors Arrangement Act or when it is being liquidated in accordance with the Bankruptcy and Insolvency Act, Bill C‑228 would designate pension plans as preferred creditors, as was proposed in the Bloc Québécois bill that died on the Order Paper when the election was called before it reached report stage.
Bill C‑228 is, however, missing one of the provisions in the Bloc Québécois's bill, a provision that would have also designated group insurance plans as preferred creditors. We are prepared to accept this omission to ensure that this bill is passed. It does not provide the same level of protection for workers, although it is an improvement over what we have now.
Bill C-228 also contains amendments to the Pension Benefits Standards Act of 1985 that were not included in the Bloc Québécois bill. These changes only affect federally regulated businesses, such as telecommunications companies, banks and interprovincial or international transportation companies, or about 3% of Quebec's workforce. These changes provide some flexibility to the administrator of a pension fund. The bill allows an employer to purchase insurance to cover all or part of the pension fund's deficit. This provision harmonizes the federal legislation with the Ontario legislation, where there is an insurance fund for pensions. This is a good measure. Quebec should use it as an example.
When Capital Media went bankrupt, the retired workers from various local daily newspapers lost part of their pension, while those from Le Droit, based in Ottawa, managed to hang on to nearly all of theirs. Under this legislation, instead of emptying the pension fund upon bankruptcy, the administrator of the fund would be allowed to transfer it to another one. This measure does raise some questions. Does it salvage anything, or does it prevent the fund from being bailed out by the employer's assets? This would have to be examined.
Generally speaking, the bill is a step forward in protecting seniors. After all, a retired worker's pension is deferred wages, as my colleague fromManicouagan said. There is no reason why salary should be considered a priority claim, but not retirement.
Once and for all, we must put an end to this measure that is burdening Quebec workers and retirees. We must guarantee them the financial security they deserve. Once again, this bill draws heavily on former Bill C-253, which was introduced in the House.
We must lead by example. Workers' interests must come before partisanship. That is what we are doing today.
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Madam Speaker, it is very encouraging to hear all parties in the House agree that this bill needs to go to committee. Over the last 10 years, there have been multiple attempts by multiple parties to address the issue of pension protection in Canada. We have seen countless Canadians impacted: They have not received their severance or have received pennies on the dollar.
Bill C-228 would do three things. First, it would allow the annual report on the solvency of funds to be tabled here in the House so that it is a matter of public record and we know which funds are in trouble. Second, it would provide a mechanism to transfer money into those funds without tax implications to top them up and restore them to solvency. That is really where we want to be. Third, in the case of bankruptcy, the bill would make pensions a priority, after source deductions and taxes and suppliers take back their goods, but before large creditors and unsecured creditors. That is where we have put the priority for pensioners to receive their due.
I thank the member for Manicouagan and the member for Elmwood—Transcona for the many discussions we have had on things we need to do to the bill to try to address concerns. I also thank the members who have spoken tonight: the member for Kingston and the Islands, members from the Bloc, my colleague from Hastings—Lennox and Addington and even the member for Whitby, who presented a petition in the House on pension protection. This just shows that the time is right for us to work together and get this right at committee.
One thing we are going to be working on and talking about at committee is cleaning up some of the clauses. There were a number of bills and each one of them had something in it that everybody did not like. When we were cleaning up some of the things we did not like in the previous bill, Bill C-405, a couple of clauses got left behind, so we got rid of them.
The insurance idea is something people want to talk about at committee. Some people like that idea and some people do not. The NDP also correctly raised the point that pensions are not the only consideration; severance pay is too. It is something people have not received when companies are in bad shape. That should go in, with the same priority as pensions. I agree with that.
In trying to make sure that we do not get the unintended consequences that the member for Kingston and the Islands was talking about, one thing of concern is whether or not businesses can get adequate credit. We have allowed a different coming-into-force time. The reporting and topping up of funds would be immediate, but we would give a number of years before the priority part of this bill comes into force. That would allow businesses time to get their house in order, and I would argue that if they cannot get their act together, they are a greater financial risk, so they should pay the associated consequences for that.
I am happy to say that there is support in the Senate. If the bill makes it out of committee and goes to the other place, there is support from multiple parties in the Senate, from Senators Plett, Yussuff and Dalphond. There is also huge stakeholder support across the country. Letters have gone out everywhere from Mike Powell with the Canadian Federation of Pensioners, CARP and the number of other stakeholders that have come forward.
I am encouraged by what I have heard today. I know this is what Canadians want us to do. They want us to work together, have the discussions and work collaboratively. As the twice-named most collegial parliamentarian, it is my pleasure to work together across the aisles. This is important for seniors in our country and it is important for people who work their whole lives. We can do something great in this moment, so I encourage all members of the House to support Bill C-228 and send it to committee. Let us work together and get this done for Canadians.
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