Hon. Hassan Yussuff: Thank you, minister, for being here today. I want to thank you again for all the good work that’s happening across the country, especially on the file you’re responsible for.

As you may know, I spend a great deal of my time advocating on behalf of working people across this country. In that context, I was a co-chair of the task force to phase out coal-fired generation in our country. Workers embraced the 10 recommendations that were made as part of our task force report. I know that the government has certainly been consulting workers in regard to implementing Just Transition legislation.

Can you assure our colleagues here in the Senate that sometime in the near future — which means spring of next year — we could see your government acting on the Just Transition program? Would that also include all of the elements recommended by our Just Transition Task Force for Canadian Coal Power Workers and Communities?

Hon. Hassan Yussuff: Honourable senators, I find myself in this very interesting moment in my life. I’m the critic of a bill that I can be a critic of, so I will try my best to tell you the best story I can invoke as to why this piece of legislation before us is worthy of our consideration and support.

I rise today to speak to Bill C-228, the pension protection act. Although this bill deals with the complex, confusing and often hard-to-describe subject of bankruptcy law, fundamentally it is about something that everyone in this chamber can easily understand and wants not only for themselves, but for their children and grandchildren to retire with.

Simply, people want and deserve a dignified and respectful retirement. That is what this bill is all about. It ensures that people’s dignity and respect are not kept at the back of the line, but instead will be placed at the front of the line in a bankruptcy when their pension plan is not fully funded.

Senators, we have all heard the devastating stories of pensioners who worked all their lives for companies like Nortel, Sears Canada and White Birch on a promise that they would have security in their retirement, only to find that security replaced with fear, anxiety and uncertainty when their company faced bankruptcy and their pension plan was not fully funded.

Since 1982, more than 250,000 seniors have suffered pension losses when their company underfunded their pensions and went bankrupt. The current bankruptcy laws kept those quarter million pensioners at the back of the line when their company went into bankruptcy. Bill C-228 will change the status quo and puts workers and pensioners first in line when a company goes bankrupt.

Colleagues, today I want to talk about why we should support this bill. It is to ensure retirees can live with the dignity and respect they have earned and deserve in their retirement.

Senators, let me start with some context for this bill. Bill C-228 deals with employer-sponsored pension plans, particularly defined benefit plans. Data shows there are currently some 1.2 million Canadians in private sector defined benefit plans, and it is estimated that 2.8 million retirees have the same.

Employer-sponsored pension plans are part of the collective bargaining process and agreement between employees and employers. They are negotiated and agreed to in the same way as wages. Workers will often agree to lower wage increases, preferring that money go into the pension plan to provide more security for their retirement.

What does that mean? In essence, pensions are deferred wages: Rather than being paid immediately, they are earned while working and payable upon retirement. Fundamentally, an employer-sponsored pension plan is a promise — a promise made between the employer and their employees. The employees commit to work to help their company succeed and grow today for their financial retirement security of tomorrow. The employer, in return, promises to fully fund their pension commitment. That is what is expected of each party — no less, no more.

Senators, I want to be clear that employee pension plan benefits are negotiated and earned. They are not a charitable handout. Employees negotiate and agree to have part of their wages being deferred to enjoy a better and more secure retirement — a retirement with dignity. That is the deal.

For retirees, the bankruptcy of their former employer whose pensions are underfunded can have dire consequences, not for a month or a year, but for the rest of their lives, as we have seen in past bankruptcies of other companies. It means their fixed income is reduced and it will be more difficult to pay for the necessities of life. Pensioners have had to sell their homes or their cars, or have had to choose between groceries, putting oil in the furnace, medication or even going back to work at a very late stage in their life despite the fact they had planned for their retirement.

So what will the amendments proposed in Bill C-228 do to help protect pensioners’ retirement security? This bill will give employer-sponsored pension plans a superpriority in the case of bankruptcy and insolvency. That means that when a company goes bankrupt or seeks to restructure under the Companies’ Creditors Arrangement Act, pension plan deficits will go to the front of the line, ahead of secured creditors, when funds are distributed.

The goal of the bill is to protect the pensions of retirees of companies that end up in insolvency, like General Chemical, Eaton’s and Co-op Atlantic. In those cases, there was not enough money left in the pension fund to pay all of the liabilities, and because pension plans are unsecured creditors under current bankruptcy laws, pensioners were left to take a very painful cut in their retirement income.

Critics of the bill say that giving superpriority to pensioners ahead of secured creditors like banks will have a negative effect on lending, either preventing companies from getting loans or increasing the cost of loans.

Here is the truth: Secured creditors make informed investment decisions and adjust the terms of loans based on the risk of the investment every day. That’s what banks do. They are sophisticated lenders that can easily assess risks even when they are hard to define or measure.

Workers and retirees, on the other hand, do not have the same opportunity or ability to diversify risk and pension investments. Pension plans are often their only savings, and they have no control over the investments. They have no option but to trust that the promise their employer made — that their pension fund would be fully funded — is kept. Their retirement future is dependent on that trust.

Unfortunately, for far too many, that trust has been broken. Bill C-228 is insurance for workers and retirees against employers breaking that trust and devastating their retirement security.

Here is another thing about superpriorities in bankruptcy law. The Bankruptcy and Insolvency Act already provides for a series of priorities that rank ahead of unsecured and secured debt, including taxes owing, Canada Pension Plan and Employment Insurance contributions, recently delivered goods and up to $2,000 in salary.

The banks and other secured lenders already must factor in these superpriorities when they assess risk and consider lending to a company. I am confident they have the expertise and sophistication to factor in a superpriority for pensioners.

However, I know this is a big change that involves complex laws. That is why it is a fair compromise to allow banks and the pension investment industry four years after the bill is passed to adapt before it comes into effect.

The bill also requires an annual report on federally regulated pension fund solvency to be tabled in the House of Commons to provide more transparency on the health of pension funds within the federal sector, because on the provincial side, of course, provincial governments have that authority.

Colleagues, over 250,000 pensioners have had their retirement future turned upside down over the last 40 years. I ask you a simple question: After a lifetime of hard work, should anybody have to struggle to make ends meet in their retirement? This bill ensures that the answer is “no.”

Critics of the changes to bankruptcy laws in this bill would often talk about the unintended consequences, so I want to take a few minutes to talk about that — not the unproven unintended consequences of passing Bill C-228, but the real unintended consequences of the current bankruptcy laws that will persist if this bill is not passed. The unintended consequences of the status quo have resulted in some 250,000 pensioners over the last 40 years having their retirement blindsided with devastating effect because their former employer went into bankruptcy, and the deficit in their pension fund was at the back of the line when it came to trying to recoup the money it was owed.

I know the former employees of Sears, Eaton’s, Caterpillar and Co-op Atlantic truly felt, and had to live their remaining years with, the unintended consequences of our current bankruptcy laws.

Imagine dedicating your working life to one company for more than 27 years, only to find out you are out of a job and won’t be getting the full pension you’ve paid into all your life. Is that fair?

That was the reality that was faced by 62-year-old Gail Paul of Corner Brook, Newfoundland, and more than 17,000 Sears workers across Canada who were either close to retirement or already retired, and who lost almost 20% of their pension income for the rest of their lives. That’s what they had to face when their company went bankrupt, because they were unsecured creditors and the assets of their bankrupt company were not going to go to fund their pension plan because they were not a priority of previous governments and legislators at the federal level.

Honourable senators, the pensioners of companies like Wabush Mines, Timminco, Smoky River Coal and other companies whose pension plans were slashed are real people. You know them. They are friends; they are neighbours. They are even family members. They have faced real hardship because of the current bankruptcy laws in our country.

I ask that you hear their stories because they have a lot to say about the unintended consequences of not passing this bill. If Bill C-228 had been the law, many of these retirees would have had a dignified and respectful retirement. That is what is possible if we pass this bill.

Colleagues, before I conclude, I want to acknowledge the activists and advocates who have worked relentlessly and tirelessly over the last two decades, fighting to make the amendments to the proposed Bill C-228 a reality. One of them is standing before you today. I want to start with the parliamentarians who began proposing private members’ bills and public bills going back some 15 years. They forged the path that eventually led to MP Marilyn Gladu working with all parties in the other place to achieve unanimous support to pass this bill last month in the other place.

I also want to recognize the labour groups such as the United Steelworkers, Unifor and the Canadian Labour Congress, who have fought for this day to come, not only for their pensioners but for their members who will one day rely on their pensions in retirement.

Finally, I want to recognize the pension advocacy groups who were here yesterday. They have never given up fighting for fairness and justice. These groups have fought not only for their own benefits — which they won’t get as a result of the passing of this bill — but for the next generation of pensioners should we pass this bill. I am speaking of groups such as CanAge; the Canadian Association of Retired Persons, or CARP; the Canadian Federation of Pensioners; the Canadian Network for the Prevention of Elder Abuse; Réseau FADOQ; the Congress of Union Retirees of Canada, or CURC; and National Pensioners Federation. I thank them for their hard work and their unwavering determination to change the laws that put them and their families at the back of the line.

In conclusion, colleagues, I want you to think about the unfairness in the current bankruptcy laws, which have caused so much pain for people who only wanted to retire with dignity and respect. These men and women have worked all their lives expecting the secure retirement that was promised to them by their employer-sponsored pension plan.

I want each of you to think about what it would be like for you and your family if, after working your entire life and retiring believing you have a guaranteed retirement income to rely on, you found out the company you worked for went bankrupt, and your pension will be cut 20% or more because the company pension plan was underfunded and in deficit. Your pension savings go to the back of the line during the bankruptcy proceedings.

That is the reality right now because of the current bankruptcy laws, laws that do not protect the interests of pensioners when companies go bankrupt or reorganize. Companies make promises to employees that they accept as being true: that they will have a guaranteed retirement income when they retire. The pension is a condition of employment to which both the employer and the employees contribute. An employer who fails to properly fund their pension plan is at fault in the same way as an employer who fails to pay workers their agreed-upon wages.

Senators, we would find it unacceptable to allow an employer to not pay their employees the wages that were earned and owed. Allowing companies not to pay deferred wages should be equally unacceptable. You will hear from the critics of this bill, who will talk about potential unintended consequences. I want you to remember that the unintended consequences of the current laws are already known all too well by pensioners whose dignity and respect have been placed at the back of the line for far too long.

Colleagues, a lifetime of work should not leave someone to face insecurity and poverty in retirement because of an unjust law in this great land of ours. This bill can change that. I urge you to support it to get it to committee, where we will hear the witnesses. More importantly, it will come back to you for a final vote. I am hoping that, after decades of history, we can finally write the law in the way it was intended, to ensure that workers can have dignity and that companies can continue to be successful and to contribute to this great land of ours. Thank you so much.