BC FORUM News
MP Scott Duvall responds to letter
MP Scott Duvall (Hamilton Mountain) has sent a reply to BC FORUM regarding a letter he was copied on that was sent to Canada’s Minister of Finance as part of the Canadian Labour Congress initiative to protect Canadian workers:
by email, August 21, 2020
Thank you for providing me with a copy of the letter you sent to the Finance Minister as part of the Canadian Labour Congress initiative to protect Canadian workers.
I share your concern about the increased risk of business bankruptcies as a result of the pandemic and the effect on jobs, pensions and well-being of Canadian families.
When large Canadian companies can’t pay their bills, they have two options. They can file for bankruptcy, sell off all their assets, and pay their creditors what they can out of what is left. Or, if they have over $5 million dollars in debt, they can file for protection under the Companies Creditors Arrangement Act (CCAA) and negotiate a deal with their creditors which will allow them to keep operating.
Over and over again proceedings under the CCAA result in the interests of workers being overshadowed by the interests of financiers and secured creditors. Workers often lose jobs, severance pay, benefits and pensions. Management often make out like bandits, giving themselves huge bonuses, while cutting off the benefits of workers and retirees benefits.
Many Canadian companies use the CCAA to effectively gain concessions from their employees and escape responsibility for often huge pension deficits they themselves have created. Workers are left with the threat of reduced pensions and health care benefits.
Many try to spin the narrative the CCAA is good for workers because it results in companies being able to continue operations and save jobs. In fact, the main beneficiaries are the financiers, banks, insurance companies and management that most often walk away with a tidy return on their investments and relief from their obligations to workers’ pension funds and other monies owed to workers.
This is all made possible by the fact the CCAA is a process with few rules and a huge amount of judicial discretion. The CCAA was written in 1933 during the height of the depression in order to protect the interests of bondholders facing the threat of bankruptcy, the closing of their business, and the loss of their investment. Aside from a few minor tweaks, the legislation has not change very much.
Large multinational corporations are using Canada’s inadequate bankruptcy laws to take money meant for workers’ pensions and divert it to pay off their secure creditors who are often their parent companies. This is organized theft.
Pensions are deferred wages, plain and simple. Diverting, withholding or seizing those funds should be illegal. It is all about fairness for workers!
The Liberals have promised for a long time to improve the income retirement security of all Canadian seniors but have refused to propose solutions for, or even acknowledge, the grim future of the workers and retirees involved in recent bankruptcy proceedings.
In the coming months you will hear the Liberals claim amendments they made to bankruptcy laws last year will protect Canadian workers. Don’t be fooled. The changes they made are largely cosmetic and will do very little to help workers and pensioners through the impending bankruptcy crises.
What Canadians need now is strong leadership and changes to existing legislation that have real impact.
The NDP will re-introduce measures formerly contained in Bill C-384 when the House of Commons resumes in the Fall. The legislation will change Canada’s Bankruptcy and Insolvency laws requiring companies to; bring any pension plan fund to 100% before paying any secured creditors; require companies to pay any termination or severance pay owing before paying any secured creditors, and, prevent companies from stopping the payment of any retirement benefits during any proceedings under the BIA or CCAA.
Our new bill will also introduce measures to help prevent executives and shareholders lining their pockets at the expense of workers and the pensions they paid into. The new legislation will also restrict federally regulated businesses from issuing dividends or share buy-backs when there is a pension deficit.
It’s time the government take real action. We will continue to fight for an increase in OAS, GIS, and CPP benefits. Ideas like a mandatory pension insurance fund are innovative approaches we will continue to pursue.
After a lifetime of work Canadians should not have to worry about their retirement income security and should be allowed to retire with the dignity they deserve.
Scott Duvall, Member of Parliament Hamilton Mountain