44th Parl. 1st Sess.
April 1, 2022 10:00AM
Madam Speaker, I want to thank the member for Sarnia—Lambton for bringing this forward for debate. I am looking forward to providing more remarks on the bill later.
In respect to some of the provisions around the Pension Benefits Standards Act, some of the concerns that have been raised around those provisions have to do with the ability of an administrator. With just the permission of the superintendent and not the informed consent of plan members or their representatives, an administrator could drastically change the nature of the pension and the terms and conditions of that pension. When the member says she is open to amendments on the bill, I wonder if she is open to amendments with respect to that section.
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Madam Speaker, I am pleased to rise today to speak to Bill C-228, because it is a bill that grapples with a very important and long-standing issue in Canada's bankruptcy laws.
For far too long, Canadian workers who have had the company either that they work at or used to work at go into bankruptcy have seen their retirement plans and their pensions up for grabs as part of insolvency proceedings. They are having to get in line behind some of the big banks and financial institutions, who are doing very well and get paid out before they do, the people who contributed in good faith over the course of years, in fact, decades in order to be able to safeguard a retirement plan for themselves and for their families.
It is an important issue and something that we have to deal with. I appreciate that the member for Sarnia—Lambton put forth this effort to deal with this issue.
I also thank the member for Manicouagan who has been working hard to resolve this major issue over the past several Parliaments.
I would remiss if I did not give a big thanks to Scott Duvall, a former member of Parliament for Hamilton Mountain and a proud steelworker out of Hamilton, who I think developed the gold standard on how to address this deficiency in our bankruptcy laws. It is something I have tried to honour by re-presenting his bill from the last Parliament as Bill C-225 in this Parliament.
Some of the features of Scott's bill that I think are important would not only amend the bankruptcy laws so that the unfunded liabilities of pension funds take precedence over secured and unsecured creditors, but also seek to ensure that companies cannot stop the payment of retirement benefits during bankruptcy proceedings. It would also require companies to pay any termination or severance pay owing before paying secured creditors.
I think Scott really put together a package on something that he knows well as a steelworker out of Hamilton. He worked for Stelco for many years, and he was an officer in the union that represented those workers. He saw first-hand the really brutal effects of this kind of game that companies sometimes choose to play in bankruptcy proceedings. The kicker, of course, is that sometimes it is the multinational parent company of the very company that is declaring bankruptcy that is a secured creditor and gets paid out before the workers they made the pension promise to and who contributed in good faith. That is one of the further perversions in the state of bankruptcy law in Canada that have to be addressed.
The member for Durham at one point in the last Parliament or the Parliament previous made an attempt to broach this issue in ways that, frankly, we found unsatisfactory and did not think really got to the point. However, I think it is a promising sign that the member for Sarnia—Lambton has addressed the question of so-called superpriority, where pensioners actually are in the line of creditors who have to be paid out in the case of bankruptcy. We welcome that development in this iteration of a Conservative private member's bill on this topic.
I think it is a promising sign to have Conservatives in the fold, to have the Bloc with a demonstrated history of good advocacy on this issue, to have the New Democrats who have cared a lot about this and to have a Liberal government that did commit, in 2015, to take action on this issue and has had some lines in subsequent budgets about trying to deal with it. However, the important fact to note is that, for as much as there has been some commitments on the part of the government, it has not happened yet.
Unlike certain policies, particularly ones that require spending, the virtue of this issue is that it can be solved by legislators with or without the permission or support of government, particularly in the context of a minority Parliament. Where there is good faith, and we have heard some important and sincere signals of good faith from the member for Sarnia—Lambton to work through some of the issues in this particular bill, then we can make progress. As people know, New Democrats are very committed to working with people, whatever their party, if we think we can make progress on important issues that have a direct impact on people.
I do want to flag some of the issues that I think come out of this particular piece of legislation. I alluded to one of those issues earlier in my question to the member for Sarnia—Lambton. I think there is concern about the ability of fund administrators, consulting only with the superintendent, to be able to change the terms and conditions of pension plans.
Of course, we heard loud and clear from Canadians across the country when the government tabled Bill C-27, which would have allowed for a significant restructuring of pension plans without appropriate permission from members or some consent of members, but we know that unfortunately sometimes companies engage in fear campaigns with their membership about the consequences of not doing what the company wants. The company will say the fund will not be solvent and the members are going to lose all their benefits. Often times, there is a lot of misinformation and disinformation in those communication campaigns with members.
We heard loud and clear that people who have defined benefit pensions do not want the rug pulled out from under them. They want to make sure that continues to be the case. We think that it is important that, no matter who it is, whether the superintendent or plan administrator, that they not be able to make unilateral changes to the terms of conditions of a person's plan without their informed consent and without some further rules around what can be done, because sometimes members are told certain things that may or may not be true. If a clause like this is going to go ahead, there needs to be a lot more said about the direction that would be given to plan administrators and the superintendent on how they could try to restructure a plan before taking it to the membership. That is an important point to make.
I also would want to look more carefully at the ability of companies to buy insurance against their unfunded pension liabilities as opposed to simply having to fund them out of their own resources. Insurance sometimes can be used as a tool, but it can also create cracks that people fall through. If it ends up being that the terms and conditions of the insurance do not quite match the circumstances surrounding that particular insolvency, then we might see a company discharged of its obligation to its pensioners without the insurance actually coming through and providing the full support of people's full pension, which they should have a right to.
This point was made earlier but I want to make it again. It is really important to note that, when we talk about people's private pensions, which they have contributed to usually over the course of decades, this is not a handout, this is not a charity thing and this is not a nice thing to have. It is part of the wage package. This is deferred wages.
I think Canadians would be outraged if, in a bankruptcy insolvency, the company could call up their former workers to say they had paid them a bunch of wages and now they want it back, and those people would have to pay their wages back from 1975 because the company got itself into trouble and expects the employees to bail it out.
It is no different when the company goes after the assets in the pension fund because those assets were never meant for the business of the company. They were always meant for the workers who showed up to work, did their part, held up their end of the bargain and made their contributions. They deserve to get the pension they were promised. When we, as legislators, fail to ensure that that pension promise is protected, we hurt not only the people who worked and contributed in good faith over all of those years and their families, but also the very idea of the pension promise at all.
I belong not only to a political party but to a political movement that wants to see more people have defined benefit pensions because it is future people can bank on. When we allow bankruptcy proceedings to undermine the pension promise, what we are saying to workers now is that they should be skeptical of a defined benefit pension plan, that they cannot trust it and maybe they should be investing elsewhere. However, we know that often that does not come to fruition. It is difficult as an individual investor in the market to be able to get the kind of pension security one needs, which is why defined benefit pensions have been such an important tool for working Canadians to carve out a meaningful retirement over the years.
It is why it is so important that we do that, and it is why New Democrats are committed to working with people in this place, as well as with retirees, workers and the organizations that represent them, to make sure that we can get a fix to this problem quickly and we can do it in the best possible way.
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