moved that Bill , be read the second time and referred to a committee.
He said: Madam Speaker, I would like to thank my colleagues on the government side. The fact that we can see the clock as 5:30, when it is 5:15, shows we can work together on policy and items from time to time.
Perhaps securing the retirement and pension security of Canadians is another time that we should work together on all sides of this House to bring certainty to hundreds of thousands of Canadians in their retirement. I am proposing, with Bill , a modest proposal, harkening back to Mr. Swift, where we can actually make progress while also respecting other initiatives. Some of my friends in the NDP and other parties have ideas with respect to securing and safeguarding the pensions of Canadians' defined benefit pension plans in circumstances of insolvency. However, we should not just wait for a magic bullet; let us make progress today on an important public policy issue, and that brings us to this bill.
All politicians, whether we have been here generations, like it seems the has been, or are new to this Parliament, know the headlines: Nortel Networks, insolvency and liquidations, the leading stock-market company for a time is no longer with us. People are still annuitizing that pension plan and the stranded pensioners. There are Collins & Aikman and Livent. Sears has been in the headlines, where pensioners across the country are going to be facing less in retirement. They thought they had worked hard for that secured defined benefit pension, and they are finding that, in the circumstances of insolvency, they are not.
We have also seen some circumstances where there has been success in the restructuring of companies in bankruptcy or in insolvency proceedings, and they restructure outside the other end with a variety of degrees of success. We have seen it in multiple instances in Ontario with many companies. They include Stelco, of course; and Algoma, which is emerging from CCAA protection in the coming weeks. That has appeared to preserve 2,700 jobs. We saw that with Abitibi, which is now Resolute Forest Products and doing very well.
I worked on that first-hand, as a brand new articling student and lawyer in the CCAA restructuring of Air Canada. Thousands of jobs and an important service for our country were preserved because the insolvency procedure worked and the pension plan that was at risk is healthy now. People retained their jobs.
Therefore, the goal for anyone, in politics and in advocacy outside of here, should always be to maintain these businesses as a going concern. That helps the employees now; that helps the retirees now and in the future; and it is by working together to make sure it is restructured. We do not see thousands of people laid off and pensioners left stranded.
This is an area where one of the elements of Bill will make us work more collaboratively with the provinces and territories, and highlight this issue with Canadians and regulators like security commissions because there is a lot they can do. We have seen that in the Sears case, where special dividends squandered goodwill and capital that could have been used to make up shortfalls in the pension. This should be an all-hands-on-deck approach, not an approach where I am not going to support any bill unless it is my bill. Bill would make progress for Canadian pensioners, and that is why we should support it.
Many Canadians may not be familiar with many of the cases I cited. I worked on some insolvencies, as a lawyer. This is also a good time to publicly educate on what restructuring is meant to do. Large companies, greater than $5 million in revenues, will generally proceed with the Companies' Creditors Arrangement Act, CCAA, where they will have a plan of arrangement and all creditors will have to have a court-monitored plan to restructure the company. Sometimes there is debtor-in-possession financing, meaning that a new company coming in to try to help the restructuring will take precedence on receiving some of the capital back if the restructuring is not successful.
However, as I said, the goal should always be restructuring. We should have a goal of the Air Canada scenario that I saw as a young lawyer: a successful restructuring, a strong company now, no massive layoffs of employees, secured benefits and a pension that is healthy now. The going concern of the company should be our goal, because then we still have an employer contributing to a pension, and any shortfalls can be made up.
With the Bankruptcy and Insolvency Act, that is for smaller companies not eligible for CCAA, where they will make a proposal in bankruptcy.
The issue that brought me to bring my first private member's bill, Bill relates to one of the earliest concerns I had as a brand new member of Parliament in Durham. General Motors salaried employees in a group called GENMO, Mike Powell and Brian Rutherford, came in to see me, and I saw the distress caused. The near insolvency of General Motors led many pensioners to see that their pension was only funded to an amount in the 70% range, due to changes made in the Ontario government years before. They were facing many decades, potentially, in retirement, likely receiving 20% to 30% less.
Right now, pension administrators, when there is an insolvency that is not successful, have to annuitize the pension. What they do is they take what is left, and they have to then use a large amount of those resources to buy an annuity to provide a steady stream of payments to those stranded pensioners. If they already have 75% of their value, in an underfunded pension, and they have to annuitize and lose another 10% or 15%, they are then going to be in a circumstance where they could be receiving 60% of what they thought they would have from their defined benefit pension in retirement. That should not be acceptable.
I am happy to say the key thrust of Bill is we should modernize legislation to make sure that pensions, as much as possible, can be kept as a going concern, so that they can still be growing, so that they can have the benefit of the pooling of resources and large numbers of people within the plan. That is the aggregating benefit. That is the first principle of this bill that would be changed, the ability for pension administrators to preserve and enhance that fund.
There are other successful pensions that would perhaps like to have assets transferred over, so that they would have a fund within a successful, well-managed fund, and they would have the benefit of pooling of resources, pooling of numbers and a potential upside.
Rather than, right away, knowing, in an insolvency situation, they are going to annuitize and everyone is going to get less than what they are already going to get under an underfunded plan, this would allow for a potential upside. If the pension plan it transfers into has success, these pensioners would have success. It will secure and enhance.
The second thing it will do is it will bring more fairness to this. We have seen the headlines that drive pensioners crazy, where they see massive executive contracts to retain executives in the restructuring. We just have to look at the headlines to see this. We have seen it with Sears, Target and others. These contracts for executives are often massively larger than all the employees. It is squandering the funds in what are called key employee retention plans.
This bill will provide much more ability for pensioners and the court to restrict those excessive key executive retention plan payments, bringing more fairness to the process for the average worker, to try to bring back some confidence in the process for these Canadians.
The third thing it will establish is a national reporting mechanism, working with the chief actuary of Canada, the provinces, the territories and security regulators, making sure that more Canadians know how many pension plans are in an underfunded situation and what risks there are to thousands of Canadians in their retirement.
This is a particularly acute issue in southern Ontario where there is a number of older defined benefit plans of companies reaching financial distress. It is not just losing the jobs of the employees, it is often much larger numbers of retirees within the greater Toronto and Hamilton area in particular. This will educate and get collaboration. This will preserve their funds. This will bring fairness to executive retention programs.
As I said, we want some of the key people to restructure that company, because the goal should be to maintain that company as a going concern, where the employees are safeguarded, creditors will agree to working with them to get more in the long run and pensions will be secured because the pension plan will continue to be paid into. There can even be a plan to put it back into a balanced state.
Therefore, there is nothing in Bill that would conflict with the super-priority demands of unions and other groups. There is nothing in Bill that would be a step back. It is steady progress down the field. Let us make progress for tens of thousands of Canadians while advancing other bills that some people might want, but that might require a Hail Mary pass that I do not think will come.
Why is it important to educate Canadians? Only 40% of Canadians have a pension. The good thing is that despite the real risks to a lot of the old traditionally defined benefit pension plans after the global recession in 2008-09, things are getting better. According to last year's report from the Financial Services Commission of Ontario, there has been a decrease in the number of underfunded defined benefit plans, mainly in Ontario. In one year alone, from 2016 to 2017, the percentage of underfunded plans went from 30% to just 22%. Even better, the projected mean solvency of the average plan in Ontario went up from 91% to 96%.
I remind people that the time and strategy of these plans and making sure that employees are more a part of it are all critical. As one expert reminded me, the year before Nortel's insolvency, their pension plan was almost fully funded, in the high nineties in percentage wise. However, market conditions and the plan's inability to change quickly, as well as the lack of the success of the restructuring, left pensioners holding the bag. That is why we are here with Bill . As one expert told me repeatedly, “You don't wind up a plan at the worst possible time”. In fact, many families in the Ottawa region where we sit would know that they are still providing an annuity for the Nortel pension plan. They are still annuitizing that plan. They are now locking in a lower rate for those people for good. Bill would allow the administrators more options for preserving the resources and for upside growth.
Thus, if there is the potential for people to have better retirement outcomes and they are facing these risks from a defined benefit plan, why would we not all agree on it? We can all agree that we 15 minutes ahead of time in the House here now. We are just coming up to 5:30. Why can we not agree to make steady progress on an issue that we are all receiving emails about now?
When the former Conservative government enhanced the wage earner protection plan, protecting more of the earnings of current employees in the context of an insolvency, the Senate committee that was used largely to consult on insolvency and bankruptcy stated directly that the better approach was not to go to super priority. That is why the former Conservative government did not succeed. That is why the Liberal government is not going to do it. People are going to wait for a magic bullet that is never coming, so Bill will make progress.
Here is what the Senate committee report said about super priority in the case of an insolvent defined benefit plan. It stated:
|| The Committee believes that granting the pension protection sought by some of the witnesses would be sufficiently unfair to other stakeholders that we cannot recommend the changes suggested. For example, we feel that super priority status could unnecessarily reduce the moneys available for distribution to creditors. In turn, credit availability and the cost of credit could be negatively affected, and all those seeking credit in Canada would be disadvantaged.
We are in Small Business Week. Higher credit costs impact every business, whether or not they have a pension for their employees or are the small or medium-sized businesses we are celebrating today. With higher costs of credit and fewer companies able to restructure, that is not sound public policy.
As I said, Bill does not preclude our having a debate on super priority. When it was looked at carefully 10 years ago, it was clear that if it were kept as a benchmark and a person wanted to keep that company as a going concern for the employees for its economic activity and for the safety and security of the pension, restructuring then has to be the option. Allowing companies to get debtor and possession financing and allowing them to restructure under CCAA is good for job protection.
I want to thank the many people I consulted in respect of Bill , because I learned, as a parliamentarian, a lot about this issue. I am very proud to have worked with my friend Andrea Boctor, at Stikeman Elliott. I met her when we were working on the insolvency of Air Canada. She is one of the leaders in the field. I already mentioned Mike Powell and Brian Rutherford—
Mr. Speaker, thank you for allowing me to join my colleagues in discussing private member's Bill .
My hon. colleague mentioned Professor Jacob Ziegel at the University of Toronto. I would like to mention another one of his colleagues, having attended a number of his consumer and corporate law workshops over the years. My first law job was working on a pension task force in the Province of Ontario for Professor Martin Friedland, a colleague of Jake Ziegel. In that context, I got to know a lot about pensions and to know Cliff Pilkey very well. Here I would note that in addition to his prowess on pensions, he could also play a pretty mean game of pool.
We recognize as a government that there are difficulties with insolvencies and we are committed to getting feedback from pensioners, workers, companies, and lenders in order to move forward with a whole-of-government evidence-based approach to enhancing retirement security for all Canadians.
To put it briefly, the problem with a number of these ideas is that they attack one little point in a complex equilibrium, when in a defined pension plan a benefit is being promised in the future based on actuarial assumptions now. Therefore, there are a number of different challenges there, and merely focusing on one little part of the picture will not necessarily lead to a just or equitable result.
Bill would amend federal legislation dealing with pensions and insolvency. Other members will be addressing pension matters, and therefore I will instead focus on issues regarding insolvency and corporate restructuring.
Bill C-405 amends the Companies' Creditors Arrangement Act, the CCAA, in order to prohibit approval by the courts of key employee retention plans, known as KERPs, which give incentives to some employees and directors so they will continue to work for an insolvent company, unless certain conditions are met, including: the employee retained must be vital to the company and the employee must have received an offer from a competitor. There will be a ceiling on any incentive offered.
Additionally, for companies with underfunded pensions, in order for a KERP to be approved by the courts, the bill would require that an agreement be reached by the company and the plan administrator to pay the unpaid pension contributions, which correspond to the normal payments that the company must regularly make to the pension fund.
The CCAA is an important marketplace law that supports the Canadian economy in a number of ways. The CCAA promotes the restructuring of financially distressed businesses over their liquidation where possible. This is a preferable outcome. While insolvency is an unfortunate fact in modern economies, a successful company restructuring can help minimize the negative impacts on the many affected parties, preserve company value, maintain jobs and supplier relationships, and allow companies to continue funding pensions and benefits. Therefore, in most cases, keeping the company viable over the long term is the best result for everyone, including pensioners.
Indeed, the CCAA has worked well, helping to prevent the failure of important companies, such as Air Canada, AbitibiBowater, and Stelco, which continue to operate and provide good jobs.
Where a viable restructuring plan is not possible, the CCAA provides a framework to maximize the value of company assets for equitable distribution to creditors and the preservation of jobs and business value in a timely, efficient and impartial manner, using a process that is transparent and predictable.
To address the issue of KERPs, it is useful to outline exactly how the CCAA works. This legislation allows companies in financial difficulty with debt of more than $5 million to negotiate a restructuring agreement with creditors by means of a process that has been tested, is well thought out, is set out in legislation and is part of established practices.
Procedurally, the courts oversee any restructuring carried out in accordance with the CCAA. This gives the courts considerable flexibility in dealing with particular cases and in taking action to facilitate negotiations and preserve the value of a company. All of this is vital to ensuring that the process is fair and is in the best interests of the public.
The CCAA provides for a stay of proceedings to prevent creditors from taking legal action and to allow the company to continue operating, paying its employees and providing services. In many cases, the company covers the legal fees for pensioners and other vulnerable groups to ensure that they are able to participate meaningfully in the negotiations.
Under the CCAA, creditors and the company may agree on a restructuring plan, but this plan must be voted on by creditors and then approved by the courts. As a result, we must look at the possibility of changing how KERPs are handled in the event of insolvency. We must remember that the CCAA does not expressly authorize the approval of KERPs.
The courts have inherent jurisdiction over case management and therefore have authority over the creation of KERPs. The courts have developed tests to determine whether a KERP would help make a restructuring successful.
The bill would reduce judicial discretion over the approval of key employee retention plans, which raises a number of problems.
First, given their precarious financial position, some companies might have a hard time retaining the necessary key employees to guide them in the process. A KERP could prevent a company from losing its employees and increase the chances of achieving a successful restructuring.
Second, when approving offers to employees, the courts look at whether the knowledge and skills of the retained employees are easily replaceable, whether the KERP has been approved by the court-appointed comptroller and whether key employees consider other options in the absence of a KERP.
When weighing these factors, the court will seek to strike a fair balance between competing interests and the creation of conditions conducive to a successful restructuring. It is preferable that this flexibility remain in the hands of the courts to ensure that it is used judiciously.
Third, we must also keep in mind the complexity of corporate restructuring. Indeed, no two cases are exactly alike. A great strength of the CCAA is its flexibility to allow parties to make a deal that suits their circumstances and interests. This flexibility is properly circumscribed by court supervision and the exercise of judicial discretion to balance competing interests in the proceeding. We must therefore consider whether restricting the flexibility of courts to act would support the important goal of promoting restructuring where possible.
Fourth, as described, the CCAA already provides a court-supervised process through which creditors may protect their interests during the proceedings. Creditors and other stakeholders, including employees and pensioners, may make representations to the court as to whether a KERP is appropriate in the circumstances.
Finally, while the bill links KERP approval to the payment of unremitted pension contributions, I note that the CCAA already provides an effective super-priority for these payments before a restructuring plan can be approved, which means they would be paid ahead of payments to key employees.
In sum, these 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 pensioners and they might conflict with important policy objectives.
Mr. Speaker, I rise today to speak to the private member's bill, Bill , an act to amend the Pension Benefits Standards Act, 1985 and the Companies’ Creditors Arrangement Act, pension plans, sponsored by the member for . I want to thank the hon. member for acknowledging the bankruptcy and pension benefits act needs to be changed. However, this is the only thanks I will be giving him on this issue.
Over the last 10 years, we have seen an increased focus in the province with Canada's inadequate bankruptcy and insolvency laws. The cases of Nortel, Wabush Mines, Stelco and, most recently, Sears have brought into national focus the fact that workers at large companies that go bankrupt are offered very little protection from investors and banks. Sometimes international hedge fund operators make out like bandits.
As a solution to this problem to fix Canada's inadequate bankruptcy and insolvency laws, the measures outlined in the bill are in complete opposition to NDP proposals, policies, initiatives and values. The bill helps to make clear that the approach favoured by the Conservatives and ironically by the Liberal government is to protect the interests of large business and their investors, while throwing Canadian workers under the bus.
There are presently four private members' bills in Parliament that address the legislative crisis and present solutions for fixing those problems. Three are in favour of increasing protection for workers and retirees in the Canadian public. The bill stands alone as it focuses on protecting and increasing the advantages enjoyed by big business, the financial sector and well-off company executives.
Chris Roberts, policy director for the Canadian Labour Congress, sums it up neatly when he says, “Right now a number of private member bills in the House and Senate are trying to honour the pension promises made to workers and retirees. Bill C-405 is not one of these. This bill would make it easier for employers to walk away from their obligation, with the consent of only a minority of beneficiaries. This legislation goes in precisely the wrong direction.”
Many Canadian companies use our inadequate bankruptcy laws to effectively gain concessions from their employees and escape responsibility for often huge pension deficits they themselves have created. Workers are then left with the threat of reduced pension and health care benefits.
The bill would make it easier for employers to manipulate laws by allowing those with existing defined benefit pension plans to convert those plans to target benefit or defined contribution plans, which would transfer all the risk onto the employees. Employers would let off the hook and allowed to walk away from their responsibility to provide secure retirement benefits to their employees.
Workplace pensions are deferred wages that employees agree to put aside until their retirement. This is critical to understand. Allowing companies to walk away with these funds is theft, pure and simple. The measures in the bill are in stark opposition to the approach proposed by the NDP to fix Canada's flawed bankruptcy and insolvency laws that would actually protect the pensions and benefits of Canadian workers and retirees.
My bill, Bill , Liberal Senator Art Eggleton's bill, Bill , and the Bloc's bill, Bill present solutions that would actually protect the pension funds of Canadian workers and retirees when a large Canadian company goes bankrupt. Chief among the proposals presented in the two bills are measures to heighten the priority of paying back deficits to workers' pension funds to the same level as secured creditors. Currently those payments are only considered at the same level as unsecured creditors who often only receive pennies on the dollar for any monies they are owed.
One the most offensive things that happens during the bankruptcy proceedings is that executives give themselves huge bonuses. The very people who ran the company into the ground get big rewards and it is done because the law allows it to happen.
Nortel executives got over $200 million in bonuses. Sears executives got $9.2 million. Stelco executives got $1.2 5 million. When I tell that to people at the town halls I have been doing when I go across the country, people ask me if I am kidding them. I have to tell them that I am not, that this really happens because the law allows it to happen.
Canadians know this is not right and they are demanding that the laws be changed. Remember that this all happens while workers and retirees get their benefits cut off, employees lose vacation, severance and termination pay, and small suppliers get stiffed on money they are owed.
The proposals in this bill dealing with executive compensation would do nothing to prevent the excessive rewards handed out during bankruptcy proceedings. The many executives who are paid largely through stock options and bonuses would not be affected by the new rules laid out in this bill. Executive bonuses during bankruptcy proceedings should be outlawed, pure and simple. Why should executives get bonuses to begin with when workers are, at the same time, being asked to make concessions? This is so obvious to the majority of working Canadians and it is time that we change the laws to make this happen.
It is also time for the government to get serious about changing the laws it knows are hurting workers and retirees and are threatening the retirement security of Canadian seniors. This is not a new issue. The problem has been happening for decades. The Liberal Party even went so far as to pass a resolution at its last policy convention calling on its own government to provide pension security.
In 2009, at the height of the Nortel mess, the leader of the Liberal Party stood outside this building and told workers that he would do everything he could to make sure this kind of problem did not happen again, and during the 2015 election campaign, the current came to my city of Hamilton and told workers that he would use every tool in the tool box to change the laws and fix the problem. The Liberals did not tell the truth. They did not live up to their promises.
The disconnect between the government and the needs of Canadian workers is hard to understand. The tells workers that he cares, but does nothing; the tells Canadians she wants to come up with the right solution, but then refuses to consult anyone; and the has a “let them eat cake” moment and tells the Sears pensioners, who are losing 30% of their pensions, that they can rely on the CPP and El. They should be ashamed of themselves and the Conservatives should be embarrassed and ashamed to offer legislation that would further threaten the well-being of Canadian workers and retirees.
We were elected to the House to protect Canadians, not to allow their pensions to be stolen because of inadequate legislation. It is in our interest to prioritize the interests of Canadians when it comes to these bankruptcy proceedings to ensure that the company pays, not the pensioner and not the Canadian taxpayer. This bill would not do that, which is why the NDP cannot support Bill .
Mr. Speaker, imagine someone who has worked for 30 some years and has contributed to their workplace pension from every paycheque during that time. Obviously, that plan would be their plan for their golden years. It is a pension that would help pay for some of their expenses and perhaps even give them a chance to enjoy a vacation or a few luxuries they perhaps did not have when they were a little younger. What happens if a year or two before retirement their company goes bankrupt? What happens when their company can no longer pay out the pension the person has been counting on for decades? Well, pensioners in Canada have seen this happen before. We saw it with Nortel, and recently with Sears. Those are two examples that come to mind.
The issue of pension shortfalls has certainly shaken Canadians' confidence in the sustainability of defined benefit pension plans. We cannot blame them. This is a nightmare that is facing many of these workers, and it is a long one. They probably have a lot of sleepless nights and spend a lot of time worrying how it will all work out in the end. They are not sure. They are wondering if it will force them to look at shelving their retirement plans and maybe returning to work for a long period of time, well past what they had anticipated. They may be thinking they should have perhaps saved a little more money for their retirement, but they thought they had this pension plan to rely upon. They wonder what they are going to do now. They wonder what happened to all the money they had invested into the pension plan. Those are the kinds of questions going though their heads.
That is why I am pleased to stand here today in support of my colleague, the member for and his bill, Bill . It addresses these concerns in a balanced sort of way.
I want to clear up some of the misconceptions we just heard regarding the legislation, because the bill would really aim to create peace of mind through flexibility, by making underfunded pension plans more nimble so that more benefits for pensioners could be recovered in these kinds of situations, in a balanced way.
The bill would also improve accountability and transparency by creating a more robust requirement for government agencies to report to Parliament and Canadians. Companies facing bankruptcy would also be prevented from exploiting loopholes or abusing certain rules that would allow for payouts to executives while the pensions are underfunded. Therefore, there is a delicate balance that needs to be achieved between addressing the concerns of sustainability of defined benefit pensions and not adversely affecting other creditors, the bottom lines of companies, etc. Both of those are important, and I believe that Bill seeks to address those issues in a balanced way.
It goes without saying that the best way to ensure the health of pensions and ensure retirement security for Canadian workers would be to keep companies in business. That is the ideal. It means we have to make sure we create a competitive field for companies to succeed. It means always looking at ways to lower taxes, which is obviously the opposite of what we have seen from the Liberal government, whether payroll taxes, carbon taxes, removal of tax credits, or going after small business owners by branding them as tax cheats and trying to gain more revenue out of them that way.
All of these things are the opposite of what we should be seeking to do as a government. It should be trying to make the opportunities easier for our job creators by lowering taxes and ensuring we are not putting up unnecessary roadblocks and barriers to their success. It certainly means not bringing in a job-killing carbon tax that would hurt Canadians' chances of getting a job, or the ability of businesses to compete and grow and therefore create more jobs.
However, I do not want to get too far down the line of the failures of the Liberal government, because we could talk for hours about that, so I will just move back a little more toward this unfortunate reality.
Despite the efforts made to ensure that we are creating a level playing field and giving opportunities to businesses to be competitive and to able to succeed and to create opportunities and jobs, sometimes companies will fail. Hard-working, loyal employees can be left in the dark in those situations. They can be unsure about the future of their pensions.
This bill would amend the Pension Benefits Standards Act of 1985 to authorize the administrator of a pension plan to amend an underfunded pension plan in certain situations, and to provide for the tabling of an annual report on the solvency of pension plans. Again, that is the transparency we are talking about.
The bill would also amend the Companies' Creditors Arrangement Act to add limitations on orders made to cover certain costs. Now, members might be asking how the bill would do that. Let me try to provide some answers.
The bill would add flexibility to the refinancing, replacement or amendment of terminated pension plans with unfunded liabilities, so that administrators can obtain the highest payments possible. That flexibility obviously would give them the ability to try to make sure that the best possible arrangement can be worked out.
It would also limit the degree to which large bonuses and pensions could be given to executives while pensions for regular workers go underfunded. We have all seen the headlines, like the Global News story from July 2017 that “Sears managers, executives get $9.2M in bonuses while thousands laid off”.
Obviously we have seen headlines like that, and it frustrates and angers anyone who sees them, other than maybe those people who were getting the bonuses, but that is a pretty small number of Canadians. We need to be focused on the workers, the people who are hearing about being laid off. It certainly is not fair to them. It is something that needs to be addressed; there is no doubt about that.
Previous arrangements with super priority, I do not think are an option. These arrangements create issues in the credit and bond markets that can lead to more insolvency, which obviously does not help anyone.
This week is Small Business Week when we think about small businesses. Many times, some of those other creditors can be small businesses. Because they are small, sometimes when they are dealing with a large company, it can be their only, or one of their only, customers. When small business owners are not able to get paid for the services or goods they are providing those businesses, it could drive some of those small businesses out of work. That means their families and employees would lose out. We have to be conscious of that as well. We need a plan that creates security and transparency for Canadians.
Another example in this area was Wabush Mines, which shut down in 2014. Their workers saw their pensions slashed by 21% to 25%, because their plan was not fully funded. Then the health benefits for 2,400 retirees were cut as well. Some of those workers saw cuts of more than $1,000 a month to their pensions. They worked hard for their benefits, and they were left with a lot less than they had planned for. In this case, there was no priority for pensions during the restructuring proceeding, and the pensions were underfunded. Proceedings took place and the pensions ended up being wound up after liquidation. That process meant that the fixed rate annuity then only paid the pensioners a small fraction of the total amount they had originally agreed to. Obviously, that is something we want to try to address.
That is what this bill does. It would provide greater flexibility for the administrator in situations like that to manage the funds of an underfunded pension at its windup. That would really help. It is something that could have been done already if this bill had been in place. They could have purchased a variable annuity or could have created a group plan that would utilize economies of scale and help pool the risk. Both of those options would have produced higher returns for those pensioners over time. That is what they would have ended up with under this bill.
We can look at other cases, such as Nortel, Sears, Target and others. People were caught by surprise that the pensions were underfunded. The transparency and accountability that Bill would help in that regard. At the very least, there would obviously be greater transparency and accountability, but there would also be the flexibility and nimbleness needed to address these issues.
I certainly hope all members of the House will choose to support a bill that would be able to address those issues for workers in a balanced kind of way so we can give the nimbleness and flexibility needed.
Mr. Speaker, it is always a pleasure to rise and share some thoughts and opinions on what is before the House.
This afternoon, we are debating Bill . It is somewhat interesting to note that the legislation is coming from an individual who I would classify as a fairly influential member of the official opposition. For a number of years, I sat on the opposition benches and the member sat on the government benches both as a backbencher and in cabinet.
Back then I did get the chance to talk about pensions on a number of occasions. I would have thought the member, who has proposed this legislation, would have had a bit more clout back then to have brought forward some of the changes he has proposed today. This issue is not new. It has been around for many years.
I sympathize with workers who find themselves in the difficult position of possibly facing bankruptcy, or a realignment of companies, or trying to manage their financial affairs. This will have a profound impact on them and their pensions.
I listened to my NDP friend who I thought was a little unfair in his criticism toward the government. He tried to give a false impression to Canadians. Our government has been very progressive with respect to dealing with pension-related issues and maybe that is a good way for me to start off tonight.
The went to Hamilton and to many different locations to talk about pension issues. I have also talked about this. We realize just how important pensions are to Canadians.
A number of years ago, when I was a MLA, I was walking along a picket line with some of my brothers within the union movement in Manitoba. I want to refer to the private sector in particular. I was shocked that people would work for decades and receive very little pension. What came to mind was the need for a national government to take the issues of pension and pension security seriously.
Canadians are dependent on the private sector to continue to cultivate and grow the economy with incentives at times from government, and it has seen relative success over the last couple of years.
When I came to Ottawa in 2010, this was an important issue for me. In my years in opposition I would try to hold the government of the day accountable for some of its decisions and lack of action on this important file. The Harper government did not step up at all. Let me give a few examples.
Many of us who were around at the time will recall when former prime minister Stephen Harper was somewhere in Europe and announced that his government would increase the age of retirement to 67 from 65. He was not even in the country. I suspect I might have been the first member in the House of Commons to talk about that, even though it was not substantiated.
We have a who made a commitment when he was the leader of the third party inside the chamber that the Liberals would fix that issue, because the Conservatives, in making that decision, were putting the livelihoods of many thousands of seniors at great risk as they started to edge toward retirement. Therefore, one of the first actions we took as a government was to reduce the age from 67 to 65 for OAS recipients, and that applied to everyone.
However, not wanting to settle for just that, there were a number of other initiatives that were taken. How many times have I had the good fortune to be able to stand inside this House in the last couple of years and talk about this government, led by our , and our approach to the guaranteed income supplement? Imagine the poorest of our seniors in every region of the country getting a substantial increase because of that policy change.
Then we talked about Sears and the many other employees, the hardships and anxiety that had been caused, and those who are in the workforce today who want to ensure they have pensionable monies going forward. Our government will do what it can with respect to companies like Sears. We are very sympathetic to that.
I truly believe that where there is progress to be made we will make that progress. A good demonstration of that is the CPP. For years we had a federal government that closed its eyes to it, and when we—