Hon. Pierrette Ringuette moved second reading of Bill S-214, An Act to amend the Bankruptcy and Insolvency Act and other Acts (unfunded pension plan liabilities).
She said: Honourable senators, I rise today to speak on second reading of Bill S-214, An Act to amend the Bankruptcy and Insolvency Act and other Acts (unfunded pension plan liabilities). Bill S-214 is the same legislation that I tabled in December 2009, then known as Bill S-245, legislation that was an unfortunate casualty of this government's poor decision to prorogue Parliament.
This legislation, if passed, would give the pensioners of companies that declare bankruptcy preferred creditor status during bankruptcy proceedings, allowing those who have spent their working lives preparing for their retirement a better opportunity to hold on to some of the money that is rightfully owed to them and put them on the same level playing field as other creditors, creditors who have had a much shorter relationship with the bankrupt company in question.
This bill is similar to the Wage Earner Protection Program Act, which the Senate passed in 2005. The Liberal government rightly maintained at the time that salaries owed to employees of a company in receivership should have some priority.
My friends opposite no doubt came around to this opinion, because the Conservative government expanded the program in its Economic Action Plan. Since we agreed to give employees preferred creditor status, but we did not give pensioners the same status, it is high time we corrected this imbalance.
Sadly, Canada has fallen behind with respect to the protection of pensioners during bankruptcy proceedings. Ms. Diane Urquhart, an independent financial analyst, recently testified before the Finance Committee of the House of Commons, saying:
Canada lags the world in protection of its terminated employees, pensioners, survivors and long-term disabled employees during bankruptcy. I did a study over the Christmas-New Year season and found that 40 of 53 countries studied by the OECD have preferred or better status for employee benefits or they have a public pension benefit guarantee insurance program.
I want to give honourable senators an example. In my own region of New Brunswick, the County of Madawaska is linked with the other side of a river by a bridge. We are also brought together by a pulp and paper mill. The pulp is being produced in Edmunston, New Brunswick, and being pushed via vapour to the other side of the river in Madawaska, Maine, where they produce coated paper. The employees of the Madawaska, Maine, Fraser Mill have protection of their pension plan by federal legislation in the U.S. Their counterparts in the same company, working in Edmunston, New Brunswick, have absolutely nothing. This bill will try to redress that particular discrepancy.
Honourable senators, let us be absolutely clear. The legislation we are considering, Bill S-214, is not a government handout. This is not a burden on the Canadian taxpayers. This will not affect the government's bottom line. In fact, if this bill is not adopted, tens of thousands of Canadians, who should have received a decent retirement income with medical benefits, will be living near the poverty line and entitled to the GST tax credit, the Guaranteed Income Supplement, medication from provincial government programs, and much more.
Let me be absolutely clear. If we do not pass Bill S-214, employees and retirees from bankrupt corporations will need government financial assistance through many different programs, and that will definitely be at a cost to the Canadian taxpayer over many years to come.
This legislation will provide just a little more security, transparency and, most importantly, fairness into bankruptcy proceedings, specifically with respect to the money that is owed to pensioners.
Unfortunately, my colleagues opposite have not grasped the urgency of the situation. We may hear about Nortel, AbitibiBowater or Fraser Papers every day, but the Conservative government continues to ignore the pensioners.
The Minister of Finance has decided to order another study instead of taking action. With all due respect to the Minister of Finance and my colleagues opposite, that is not enough. These pensioners do not have time to wait for the results of another government study.
A vivid reminder of the urgent need for action was provided just last Friday when a Justice of the Ontario Superior Court rejected a temporary deal between Nortel Networks Corporation and its pensioners and disabled employees. The deal itself would have allowed former employees to take advantage of any changes to the Bankruptcy Act to increase their benefits up to the end of this year. Unfortunately, the court found this deal unfairly penalized other Nortel creditors because of the lack of a defined amount. Therefore, as of March 31, 2010 — that is tomorrow — there will be no funds for these benefits or pension plans unless another temporary agreement is reached.
As a result of this ruling, some pensioners and those receiving long-term disability payments fear their benefits will disappear tomorrow. It is difficult for pensioners to make long-term plans when their benefits suddenly expire one week after an unfortunate court ruling.
However, this bill is not only about the Nortel pensioners or the AbitibiBowater pensioners. It is about all pensioners across Canada who are worried that a lifetime of work, a lifetime of paying into their company pension plan, and a lifetime of stability and security will become the latest casualty of this economic downturn.
Honourable senators, let us be absolutely clear: In this debate, pension plans are simply deferred wages for employees. That is why it is absolutely necessary for us to take action and amend the Bankruptcy and Insolvency Act to provide the same protection to these long-term deferred wages as we agreed to in the Wage Earner Protection Program.
Honourable senators, I hope this bill will not become another partisan hot potato in this chamber. Pensioners should not be held as political or economic hostages. Pensioners need this legislation as quickly as possible. Let us move this bill quickly to committee where we can hear from the experts on both sides and come out with a bill that all senators can support. I know for a fact that all honourable senators take the needs of our pensioners seriously. Let us prove that we can work together and pass Bill S-214. The clock is ticking for too many people who already need our help.
This is not a matter of the government giving handouts; it is a matter of protecting the pensioners who contributed to their pension plans throughout their careers. This bill would simply help them get the money owing to them.