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Results: 1 - 15 of 71
Hassan Yussuff
View Hassan Yussuff Profile
Hassan Yussuff
2021-06-01 11:12
Thank you, Chair.
First let me thank the committee for the opportunity to present to you today.
I represent the Canadian Labour Congress, Canada's largest central labour body in the country, and it speaks on national issues on behalf of three million working men and women from coast to coast. The CLC, of course, supports Bill C-253, and I want to thank the members who voted to advance this bill.
For years, the CLC has advocated changing the bankruptcy laws in our country. Workers and pensioners should be first in line, not last, when it comes to paying creditors. Workers pay for their defined benefits, pensions and other post-retirement employment benefits by deferring part of their compensation. Employers have a legal obligation to pay these promised pensions in retirement. It is totally unacceptable that earned benefits are taken away from pensioners, through no fault of their own, at a time in their lives when they are least able to adjust. Pensioners cannot simply go back to work when their pensions are cut. They need the post-retirement drug coverage and benefits that they have earned through working for a lifetime.
This tragedy has gone on too long. It has occurred too often. It cannot go on any longer. It is time to fix this problem.
The insolvency process is rigged against working people. The recent Laurentian University example shows how small unions are isolated and besieged by CCAA proceedings. Workers are threatened with devastating job losses unless they agree to make deep concessions to wages, pensions and benefits.
The CLC believes that public institutions should be excluded altogether from the CCAA and the BIA. The federal insolvency laws are meant for commercial corporate reorganizations. They were never meant to provide cover for provincial governments that refuse to live up to their fiscal obligations and expect workers and pensioners to pay the costs. The CLC would prefer that the claims of workers and pensioners be moved to the front of the line, as Bill C-253 seeks to do.
If there is no consensus to do so, the CLC believes that all parties should consider granting pensioners' and employees' claims the status of “preferred claim”. This would place them immediately behind the secure creditors in priority of claims, but ahead of unsecured creditors. We believe that treating employees' claims as preferred claims will materially improve outcomes for workers and pensioners.
However, getting the data to establish this is not easy. Currently the data is controlled by the big accounting firms—especially Ernst & Young, KPMG, Deloitte and PricewaterhouseCoopers —that act as monitors in CCAA proceedings and trustees in bankruptcies. There is a clear public policy purpose for making this data available for researchers. We are seeking aggregate anonymized data for large business insolvencies in which pension deficits are involved. We are not seeking commercially sensitive data. In our view, the superintendent of bankruptcy should be required to obtain this data from monitors and make it available to researchers.
We also recommend that the federal government conduct a feasibility study to establish a national mandatory pension insurance scheme for Canada. This study should form the basis of discussions with the provinces to establish a national scheme to rescue stranded pensions.
Finally, the government must stop company executives from enriching themselves and shareholders when there is a serious pension deficit.
The 2017 Sears Canada CCAA filing and liquidation was an outrage. Beginning in 2010, Sears paid $1.5 billion to shareholders in dividends and share buybacks. By doing so, Sears paid five and a half times more to its shareholders than it would have cost to entirely erase the deficit in its DB pension plan. Sears' decision in 2013 to pay a $500-million dividend when the pension deficit stood at $313 million would alone have been enough to eliminate the deficit. Instead, Sears Canada pensioners outside of Ontario were forced to accept cuts in benefits. This is a profound injustice. It should never be permitted to happen again.
Thank you very much. I look forward to any questions that committee members may have.
I wish all the best to you.
View Scott Duvall Profile
NDP (ON)
Thank you.
One of the things that Mr. Yussuff said—and I feel it's outrageous that this could actually happen—is that when Sears paid $500 million to dividends in 2013, they still had a $313-million pension deficit. How can we prevent companies from doing this in the future? They're the ones that plan going into CCAA. How do we stop this paying of dividends when there is a huge debt in the pension fund?
Maybe Mr. Lemieux wants to answer.
Dominic Lemieux
View Dominic Lemieux Profile
Dominic Lemieux
2021-06-01 12:24
This amounts to taking money out of our pensioners' pockets and redistributing it to shareholders, who are well off, for the most part.
I would come back to my initial proposal. First, Bill C‑253 has to be passed. In addition, the provinces have to ensure that pension funds are 100% funded. It is indecent for a company to give money to its shareholders when it is not paying its contribution to the pension fund. That is the same thing as me, as a head of household who is about to retire, being in debt and my credit cards being maxed out, but deciding to head south for two weeks. It would make no sense to leave my children like that, in a vulnerable position. Well, that is exactly what we allow, in Canada: taking money from pensioners' pockets, from the most vulnerable people, and distributing it to company shareholders.
View Ted Falk Profile
CPC (MB)
View Ted Falk Profile
2021-05-17 13:27
Thanks, Mr. Chair.
That is a lot of money, but it's over 38 years, so I appreciate that.
Has the calculation been done on that amount of money to find out whether it is actually fair compensation for royalties related to the oil and gas sector?
Samuel Millar
View Samuel Millar Profile
Samuel Millar
2021-05-17 13:27
The amount for the payments is tied to the expected dividends that Canada would receive from its part ownership in the Hibernia project. It's tied to the equity share in the Hibernia project, rather than to an amount that would be collected from royalties through the production of oil and gas.
Samuel Millar
View Samuel Millar Profile
Samuel Millar
2021-05-17 13:28
I'm not entirely sure I can answer the question as posed. The amount is tied to the specific equity share in this project and to the dividends that were expected from it over that period of time.
View Wayne Easter Profile
Lib. (PE)
Thank you all.
We'll move on to part 1(t), “extending the income tax deferral available for certain patronage dividends paid in shares by an agricultural cooperative corporation to payments made before 2026”.
On that one, I forget the explanation from the other night. Can somebody give me a little bit of an explanation? What's the intent here?
Trevor McGowan
View Trevor McGowan Profile
Trevor McGowan
2021-05-13 17:38
Agricultural co-operatives can pay patronage dividends to their members. This would extend an income tax deferral on the amount of any patronage dividends received until the time that the shares are exercised.
The specific issue is that when these agricultural co-operatives pay patronage dividends to their members, that can carry with it certain immediate tax consequences, absent this deferral in the act. These co-operatives were having to pay amounts out to their members so that they could satisfy the tax liability that came along with the patronage dividends, which were causing cash-flow issues for these co-operatives.
What this measure would do is extend, in respect to eligible shares issued before 2026, an existing temporary deferral that allows those immediate tax consequences—taxation, basically—to be deferred until the disposition of the shares. It helps co-operatives with their cash flow.
View Peter Julian Profile
NDP (BC)
Thank you very much, Madam Freeland. Yes, I want to get back to other questions. I'm taking your answers as “no”, for the moment, on both.
On the wage subsidy, it is very controversial. Billions of dollars have been misused for dividends, stock buybacks and massive executive bonuses. The government has acknowledged that by kind of putting in place something for June 5 that doesn't include dividends and doesn't include stock buybacks, and yet the government has been saying all along that money should not be used for dividends, stock buybacks and executive bonuses, that the money should go to the workers.
My question is very simple and twofold. First off, will the government insist that a company that has laid off its workers and paid dividends and executive bonuses pay the money back?
Second, we wrote to you on January 5 asking for the full list of amounts that companies have received under the wage subsidy. Will you release those amounts so that Canadians can actually judge for themselves how the wage subsidy has been distributed?
View Chrystia Freeland Profile
Lib. (ON)
Thank you, Mr. Julian, and Mr. Chair.
Mr. Julian, let me start by emphasizing what from my perspective is the most important reality about the wage subsidy, which is that this program has allowed literally millions of Canadians to continue to be employed, 5.3 millions across the country.
There are 621,000 jobs, Mr. Julian, in your province of British Columbia that have been supported by the wage subsidy. That's important for two reasons. These are people who continue to have an income, and they are people who continue to have a job. Maintaining that connection to your employer is absolutely essential. It is something that only the employer can help do. It's not something the government can do. That's why for us providing support that would keep people having an income and keep them connected to their jobs was absolutely essential, and the disclosure requirements for the wage subsidy were detailed in the initial wage subsidy legislation, which all parties supported.
View Andrew Scheer Profile
CPC (SK)
This year, on March 31, Canada Mortgage and Housing Corporation, CMHC, announced a special dividend payment of $3.5 billion to the Government of Canada; that is, a transfer from CMHC directly to the Government of Canada. This means the premiums of those first-time homebuyers, who are low- and middle-income Canadians who can't afford to put more than 20% down on their mortgage, went to pay a $3.5-billion dividend to the government. Is that correct?
Romy Bowers
View Romy Bowers Profile
Romy Bowers
2021-05-11 11:56
It is correct that in March of this year we issued a special dividend. The circumstances for that dividend were quite unique. Typically, we issue dividends on a quarterly basis, as do many commercial entities, based on the revenues we earn from our commercial businesses. With the onset of COVID over a year and a half ago, we suspended our dividend because of the uncertainty of the economic conditions, so that we could preserve capital in the event of unforeseen circumstances. During this period, our revenues accumulated and our capital levels accumulated as well. We chose to issue a dividend as economic conditions became better with the alleviation of some of the COVID pressures, and that's the reason the dividend was a large amount.
View Andrew Scheer Profile
CPC (SK)
It says here on CMHC's website that that quarterly dividend is $250 million, so that's exactly a billion dollars a year if it's $250 million a quarter. That's off the backs of premium payers. That special dividend that goes into the government's coffers is directly on the backs of low- and middle-income Canadians and, as you just mentioned, first-time homebuyers. The federal government has scooped up the profits made on the backs of hard-working first-time homebuyers. Is that correct?
Romy Bowers
View Romy Bowers Profile
Romy Bowers
2021-05-11 11:58
It is correct that we pay about $250 million in dividends on a quarterly basis, and that's a result of the risk-based premiums that we charge for our mortgage insurance and securitization businesses. That's in line with the mandate that we have to support financial stability as part of the National Housing Act. We are also bound by the dividend framework that implicates all financial Crowns, and we make an effort to make sure that any excess capital or revenue that we earn is returned to our stakeholder, the Government of Canada.
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