Senator Dalphond: I have two questions. The first question is about the Pension Benefits Standards Act — the question was asked by Senator Marty Deacon. It applies only to federal pension funds. It doesn’t apply to most pension funds that are regulated by the provinces. Am I right or wrong?

Senator Wells: You’re wrong. I don’t want to say this again, but you’re wrong. It would apply to both federal and provincial pensions.

Hon. Percy E. Downe: Honourable senators, I just realized, in listening to the last speaker, that we are almost in a conflict of interest because if the Government of Canada goes broke, our pensions will be protected under this provision.

Colleagues, we’ve all heard the stories: A company goes under, the creditors line up, and the workers and retirees of that company find themselves at the very end of that line. After those creditors are done, the workers and retirees get what is left. If what’s left isn’t enough to fund their pensions or health benefits, well, that’s the way it goes.

We all remember Nortel. At its peak, they employed almost 95,000 people — 25,000 in Canada alone — but that all ended in 2013. Whatever the cause of Nortel’s collapse — mismanagement on the part of senior executives or the Chinese government hacking and selling trade secrets — it is the impact of their bankruptcy that informs the bill we are debating.

Colleagues, similar bills have been brought forward in the past. In preparing this speech, I looked at correspondence I received during one such debate, correspondence from former Nortel employees facing financial hardship, if not ruin, as a result of its collapse; stories of workers unable to work due to disability. Family members wrote to me, saying:

He thought himself very fortunate that he had been working for a company that supplied the wonderful pension benefits held by Nortel. Can you imagine his shock when he was told that these benefits, in fact, did not exist?

They used words like “nightmare,” “desperation,” “shock and horror,” “financial destruction,” but there was another theme as well — anger — anger at seeing senior executives walk away with bonuses and severance packages while employees and pensioners found themselves at the end of their ropes and at the end of the line.

It happened again with Sears. The company goes under. It is revealed that the pension fund had been grossly underfunded, even though, between 2005 and 2013, Sears Canada paid about $3 billion in dividends to shareholders. The employees, current and retired, are left in the lurch. In fact, the story of Sears is even more shocking. Whereas the fate of Nortel may be attributed to market forces, there was something else at play with Sears Canada.

I mentioned the $3 billion in dividends starting in 2005. That year, its American parent company was purchased by a billionaire hedge fund manager. From events that followed, one can assume that the “management” of Sears Canada had a job not so much to build the company as to strip it. Flagship stores in major cities, the financial services branch, which was a money‑maker at the time, and other assets were sold off, providing a dividend yield to shareholders much higher than what other companies were providing at the same time.

And yet, all this time, Sears Canada’s pension fund was underfunded by hundreds of millions of dollars, a situation that continued despite numerous warnings from Sears employees and pensioners. When the end finally happened, when there were no more assets to sell off, the company filed for bankruptcy in 2017, and creditors lined up, with pensioners at the end of the line again.

So the person selling couches or fridges in the Sears outlet in Charlottetown lost almost everything, but the hedge fund manager could buy a 300-foot yacht — not that I begrudge him his 300-foot yacht, but I do begrudge the lost pensions and benefits that paid for it.

Honourable senators, as was stated repeatedly during study of this bill in the House of Commons, pensions are not gifts provided at the whim of some employer. They are wages earned by employees, deferred until their retirement.

This bill, like those that came before it, seeks to recognize their contribution in a tangible way, by ensuring that, in the case of a company that has failed, those who worked to build that company have a greater claim on those assets that remain than those who would profit from its demise.

Honourable senators, this bill passed 318 to 0 in the House of Commons. That burst of energy, activity and even manic behaviour by the members of the House of Commons, after years and years of refusing to take any action, requires a sober second review by the Senate. Having said that, I believe this bill is long overdue, and the Senate may find ways at committee to improve it and correct any errors or omissions.

I take no joy in the anticipated final passing of this legislation. Parliament should be ashamed that it has taken so many years to do the right thing, and the sadness that connects to its eventual passing is that so many hard-working men and women, and their families, suffered so much while waiting for Parliament to finally take action.

Thank you, colleagues.