44th Parl. 1st Sess.
November 22, 2022 10:00AM
Madam Speaker, I thank the hon. member for Sarnia—Lambton for introducing Bill C‑228, which seeks to protect our workers' and our seniors' pensions.
I would like to begin by describing the current situation. Right now, companies offer pension plans with specific eligibility criteria and benefits. However, when such a company goes bankrupt, the pension plans may not contain enough money to cover the cost of all the promises the company made to its employees. That has happened a number of times in this country's history. One example is Nortel, once the largest employer in the national capital in Ottawa. When that tech giant went bankrupt, the pension funds were insufficient. There was not enough money to pay the pensions promised to the company's retirees. Many employees have asked me why the company was not required to use the proceeds of the sale of its assets to make up that shortfall.
Under the legislation that was in place at the time and is still in force today, in the event of bankruptcy or insolvency, a company must sell all its assets and pay back anyone who has loaned it money and all the individuals or entities to whom it owes money. Obviously, when a company goes bankrupt, it does not have enough money to pay all its creditors, and this means that some people will lose out. Those who lose out may be the banks that have loaned money to the business or the suppliers to the business that have not been paid. In some cases, it could be the pensioners, because there is not enough money in the pension fund to pay the promised pensions.
There is no good solution, and inevitably, some people will lose out. In most cases, it is good people who lose out when there are bankruptcies. Also, when a bankruptcy occurs, pensions are in a difficult situation, because big companies typically go bankrupt when the economy is in bad shape or when stock markets are falling. It is possible that both situations may happen at the same time, depriving the pension funds of the money needed to pay out the pensions.
Businesses should obviously set aside sufficient funds to guarantee that, in the event of bankruptcy or falling stock markets, it will have enough money to fund these pensions. However, right now, businesses do not have to pay these pension liabilities before paying other creditors. That is legal and the courts decide who gets what.
Some are opposed to the idea of giving priority to pension funds as the bill proposes. They believe that this will make it more difficult for a business to raise money from investors and get loans from banks. Bankers will not want to lend them money because, in the event of bankruptcy, the money will go to the pension fund. It is true that it will be more difficult to repay other creditors if the pension fund does not have enough money, but this bill would incentivize CEOs to properly fund their pension fund so that investors will be confident that, in the event of a bankruptcy, the money will be there.
Personally, I think this bill is not only compassionate towards people who have worked and expected to receive this money, but also a way to force the market to consider whether the pension fund is adequate today, not 20 years from now, when the company declares bankruptcy.
This will force CEOs to invest enough money today to secure the future and the retirement of their workers. If they want to get loans, they will have to prove themselves to the market.
People who work their entire lives and are promised a pension should receive it, and that is why the official opposition will support this bill and we will work to bring it into force.
I would like to thank the hon. member for Sarnia—Lambton, who represents working-class people in her constituency. We know of the grand refineries that do so much of the necessary energy refining for Ontario and that turn our raw materials into final end-use products. These are the hard-working people who should be able to count on their pensions. That is why our colleague, the member for Sarnia—Lambton, has brought this initiative forward.
As a quick background, right now, when a company goes bankrupt, all the creditors are roughly on equal footing unless they have secured credit and unless they have collateralized their loan against a particular asset within a company. This means the money can run out as the liquidation happens before a pension shortfall is corrected. This happened to Nortel when it went bankrupt in Ottawa: The largest private sector employer at the time went bankrupt and the pension fund was down. Often, bankruptcies happen when the economy crashes, and that is just when the stock market crashes, which means the funds invested in the pension fund drop dramatically. That awful convergence of factors means that pensioners could be down 30%, 40% or 50%.
This bill would put pensioners at the top of the list and give them superpriority in the event of bankruptcy so that when assets are sold, the pension fund gets made whole before other creditors get paid. Some will say this will make it harder for businesses to raise money. That is only the case if their pension is not properly funded. If it is funded properly, the investor will not have to worry about being knocked back behind the pensioners in the event of bankruptcy. The pension fund will already have sufficient dollars with a significant buffer that will protect the viability of the pensioners, and all the other creditors will be in the same position they were without this bill.
What the bill would do is incentivize CEOs to make the investments today to make sure their pension funds are in good shape down the road. What happened during the 2008 financial crisis was similar to when Warren Buffet said: When the tide goes out, we find out who was not wearing a bathing suit. That is the case with pension funds. When the tide goes out and the economy crashes, we find out which companies were not investing enough in the viability of their plans. They are then in trouble and are looking for a bailout from everyone else, including the workers who have to take a shortfall.
I would like to think that CEOs today would put aside the money for that ugly day down the road when there is a recession so that if God forbid they go bankrupt or God forbid the markets crash, their pension fund is secured. This bill would incentivize them to do that. If they do not, lenders will be worried about lending to them. A lender would go to them and say, “Listen, I would like to buy your bonds or give you a directed loan, but I'm concerned that your pension fund isn't fully solid and that I would fall behind that fund in the event of a bankruptcy.” That would put real-time, immediate pressure on the management of every country to solidify its pension funds in the here and now while times are good in order to raise debt and raise capital for the future.
It is for that reason, and for the reason that we must be compassionate to those who have worked hard all their lives, who are counting on those pensions to pay for their golden years and who have earned them, that we have made a promise and that the promise will be kept. That is why the Conservatives are proud to be supporting the bill by our fellow colleague, the member for Sarnia—Lambton, to secure and protect the pensions of our hard-working Canadians.
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Madam Speaker, I am pleased to have the opportunity to speak to this important bill today.
As a left-leaning progressive politician and union man, it is really important for me to be here in the House to support the initiative of the member who introduced this private member's bill. This initiative is completely in line with the values of the NDP, which has been the political party of workers since its foundation.
We have always been there to fight to give workers decent working conditions, decent work schedules, decent insurance, and adequate and decent wages so that they and their families and children can have a good quality of life.
With that perspective, the fight to protect people's retirement plans and pensions when a business goes bankrupt has always been a major concern for the NDP, as the working class party and the labour party. This is not the first time we have debated this issue. I must point out the work of NDP colleagues in the previous caucus who fought for this, who were pioneers and who worked very hard.
I am thinking of Chris Charlton, Wayne Marston and Scott Duvall, who, before retiring from political life, took up this cause. All the work done by my current colleagues in the NDP caucus and past colleagues has ensured that today we are about to arrive at solution that, although not perfect, is positive.
However, I cannot help but point out that when Chris Charlton, Wayne Marston and Scott Duvall introduced similar bills to protect the rights of pensioners, the Conservative Party systematically voted against them.
Today, we find ourselves in a new situation. I am pleased to note that the Conservative Party seems to have gone on the road to Damascus and seen the light. They have had a change of heart, and I hope that it is not being opportunistic in order to portray itself to voters as the friend of workers for the next election, but that it is something more deeply rooted and serious.
I always welcome spontaneous conversions, but I also remember that, when he was a minister in Stephen Harper's government, the Leader of the Opposition was one of the harshest critics of workers' rights. He levied sustained, systematic attacks against worker and union movements with bills such as C‑377 and C‑525, which would have weakened or even wiped out unions in Canada and Quebec. That is always on my mind, so I am always a little apprehensive, a little suspicious because, as a minister, he repeatedly attacked the union movement that stands up for workers' rights. I think people need to be aware and keep that in mind right now. Nevertheless, I applaud the work of the Conservative Party member who introduced this bill, which the NDP obviously supports because it is about time.
We have seen extremely tragic situations where people who dedicated their lives to a business, to a company, who set money aside, wound up in extremely difficult, trying situations when their company went bankrupt.
For example, when Sears went bankrupt, people in Quebec, Ontario and western Canada saw their pensions drop by 20%, 25% or 30% per month. These people lost hundreds of dollars because they were not priority creditors under the law. Bankers and investors took precedence over the workers who had, in some cases, devoted their entire lives to these companies and counted on them. This is not a question of charity, a gift to these workers. It is their money. They set aside wages for years, decades, to cover their golden years. It is their money.
It is good that today, as parliamentarians in the House of Commons, we can act soon to help these people, to protect them and to avoid dramatic situations like those we have seen with Sears and many other companies.
I will tell a quick personal story. I was a teenager when my grandfather died. I am from Saint-Jean-sur-Richelieu, and my grandfather Urgel worked at Singer for 44 years. Singer was the big factory that drew people to the town for work. It employed thousands of people. My grandfather worked there for 44 years and then he retired. A few years later, Singer went bankrupt. Not only did it go bankrupt, but its executives took off with the pension fund. Those folks just took the money and ran.
The Singer pensioners had to fight in court for years. They had to hire lawyers to get some of their money back. Unfortunately, by the end of the long legal proceedings, my grandfather, like many of his co-workers, had died. My grandmother did finally receive a small portion of the pension that Singer had stolen from them. This is just a family example, not a personal one, because it did not affect me. However, I was told this story, and it really did affect my family. The fact that no one had any protection at the time, the fact that the workers were not considered priority creditors ahead of the investors and bankers, really affected my family.
The NDP chooses to put people first and stand up for them ahead of the banks, and we are not afraid that people are going to stop investing in Canada and that the sky is going to fall because of it. In fact, I think we can go even further. When the rules of the game are known and they are the same for everyone, then investors can make informed investments, knowing what the rules are, what the consequences of bankruptcy will be and who will be paid first because it is their money first and foremost.
The bill could have been improved. My NDP colleague, the member for Elmwood—Transcona, tried to do so by proposing an amendment in committee to protect not only pensions and retirement plans, but also severance pay. Oddly enough, the committee chair ruled that the amendment was out of order, that it fell outside the scope of the bill. However, this friendly amendment had been welcomed by the member of Parliament who is is responsible for this bill. It is therefore rather odd that the Liberal chair of the committee would reject a friendly amendment, which seemed to me to be perfectly in order since it concerned the rights of workers in the event of a company's bankruptcy. It was done in exactly the same spirit, and the majority of the committee members agreed with the amendment.
That decision was upheld by a Speaker's ruling. The NDP tried to pass a unanimous consent motion to undo the Speaker's ruling, which is something that can be done and is well within the rules. Unfortunately, some Liberal members refused to overturn the Speaker's ruling, refused to respect the will of the committee, and refused to protect the rights of workers when it comes to severance pay. Usually, in the House, we do not know who said no. However, oddly enough, the member for Winnipeg North said he was not the only person who said “no”. In saying that, he himself admitted, as the member for Winnipeg North, that he had said no to this request from the NDP for unanimous consent to respect the will of the majority of committee members. However, he never explained why he, as the member for Winnipeg North, or why the Liberal Party members were against protecting severance pay in the event of bankruptcy.
For a party that claims to be a friend of unions and a friend of workers, that is rather odd and contradictory. I look forward to hearing the member for Winnipeg North explain to us why he opposed this measure when he is a democrat and respects the will of the committee. While the three opposition parties agreed on this amendment, he said no in the House and opposed workers' rights. I look forward to hearing the member for Winnipeg North explain why.
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Madam Speaker, I am pleased to rise and speak to my colleague's bill, Bill C-228. I would like to thank the member for Sarnia—Lambton for introducing this bill and providing me with the opportunity to participate in this debate.
This bill comes at an important time for Canadians. Bill C-228 seeks to protect the pensions of workers in the private sector so that when a company goes bankrupt, pensioners receive the benefits they have worked long and hard to receive. It combines elements from previously introduced bills and would do three things. First, it would require that an annual report on the solvency of pension funds be tabled in the House of Commons. Second, it would provide mechanisms for companies to transfer funds to keep their pension funds solvent. Third, in the event that a company does go bankrupt, pensions would be paid out ahead of large creditors and executive bonuses.
For better clarity, not only does the bill seek to ensure that pension funds remain solvent by requiring annual reporting that demonstrates the pension funds are fully funded, but it would protect Canadian workers' pensions, as it creates mechanisms to help companies keep their pension plans solvent. Should a company's pension fund become insolvent, they will be able to transfer money into the pension fund without any tax implications. Encouraging companies to keep their pension funds solvent and providing them mechanisms that help them to achieve that is something that ultimately helps and protects working Canadians.
The solvency of pension funds is especially important now, as we are in a cost of living crisis. Seniors in particular are struggling at this time, as they live on fixed incomes that are being stretched by rising prices and inflation, which the government is fuelling with its inflationary spending. The government continues to deny the consequences of its inflationary spending, but we are confronted by them daily.
Canadians call me every day asking how the government expects them to keep up with the rising prices that are being caused by the government's out-of-control spending. The government has created an unpredictable economy with record-high inflation. Now, with its plan to triple the carbon tax, Canadians living on fixed incomes are being pushed to their limits.
With the unpredictability of the economy, record high inflation rates and the Liberal plan to raise taxes, the protection of pensions is vital. Canadians need to be secure in the knowledge that their pensions, which they have contributed to for many years, will not be at risk of disappearing overnight.
As inflation continues to rise, those who rely on pensions from the private sector are more vulnerable. They have to worry not only about their monthly payments being stretched thinner and thinner, but also that the company paying their pension may go bankrupt and use the pension fund to pay off its debts.
Over the past two years, we know that many businesses have struggled, many have not survived and many may be on the verge of making the decision to close their doors. Should this happen, many people may find their pensions at risk. Pensioners should not have to worry about the security of their pension. The dream of retiring for Canadians should not be washed away because the pension fund of their company was used to pay off debts and give bonuses to executives.
That is why our party believes that pension plans should be invested by independent trustees for the benefit of employees and should be held at arm's length, not accessible by a company or its creditors. By doing this, the pension fund will be solely focused on serving the workers who are contributing to it and drawing pensions out of it, and we will remove the ability for corporations to interfere with pension funds or cause them to become insolvent.
Another important aspect of this bill, supported by the independence of pension funds, is that in the event of bankruptcy, paying out pensions would become a priority, ensuring that seniors are not left behind. This will ensure that the many years of hard work by Canadian workers will still be rewarded with the pensions they have earned. It will also ensure that even in the case of bankruptcy, the dream of retirement will not be lost. Canadians will still be able to depend on the investments they have made in their companies' pension funds and plan for the future.
I am sure many of my colleagues in this place have heard from Canadians that they are finding it difficult to plan for their future when there is so much uncertainty due to the Liberals' inflation and the rising taxes.
This bill provides an opportunity for members to vote in favour of giving Canadians security in their golden years, allowing them to retire and enjoy the fruits of their labour.
The purpose of this bill is very clear. We want to protect the pensions of hard-working Canadians. The bill seeks to bring more stability to private pension funds and ensure that Canadians do not lose out. It is a step towards giving Canadians more certainty and control over their own lives and hard-earned money, making sure the money they have earned ends up in their own pockets.
I know similar bills have been introduced in the House previously, and I am happy to see that Bill C-228 has had broad support among other parties. Again, I want to thank my hon. colleague from Sarnia—Lambton and hope to see more initiatives in the House to help support Canadians.
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