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BC Federation of Retired Union

BC FORUM News - From The Advocate, Spring, 2022


Bill C-228 and you


Why Bill C-228 an Act to amend the Bankruptcy & Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985 is so important to pensioners.

The following information is courtesy of Michael Powell, President of the Canadian Federation of Pensioners (CFP). The complete text is available on their website at

The Canadian Federation of Pensioners (CFP) advocates on behalf of defined benefit pension plans and their members. Founded in 2005, the CFP is the united voice of 22 retiree groups, representing 300,000 defined benefit pensioners, who work together to improve pension security across Canada.

Pension protection is sadly lacking and much needed in Canada. Since 1982, more than 250,000 Canadian vulnerable seniors have suffered the loss of pension income for the rest of their lives due to corporate insolvency. There are still over 4 million Canadians counting on their defined benefit pensions.


What is a defined benefit (DB) pension?

• A defined benefit pension plan is part of an employee’s total compensation package and is legally considered deferred compensation.

• A defined benefit pension consists of deferred wages that are earned while an employee is working and collected when they retire.

• The annual pension amount is calculated using a formula that reflects an employee’s salary, length of service and age.

• Pensioners have planned their retirement based on their defined pension income.

• Pension income is taxable in the hands of pensioners.


How are DB pensions regulated in Canada?

• The pension regulatory framework in Canada is very complex.

• Canada has two tiers of legislation that impact pension security. Eleven different jurisdictions are responsible for pension legislation and regulation.

• Federal insolvency legislation is the primary legislation. In the event of a conflict, it supersedes other pension-related legislation.

• Pensions are also governed by additional federal and provincial pension benefit and corporate governance legislation.


What is the risk to defined benefit pensions?

• There are no real protections for defined benefit pensions when a company goes bankrupt.

• The risk to defined benefit pensions occurs when a company becomes insolvent and its pension is underfunded.

• When companies are in trouble but haven’t yet become insolvent, pensioners are powerless to intervene and secure their pensions. All other creditors can negotiate terms to protect their interests.

• Insolvency law does not treat pensioners fairly. Unlike creditors, pensioners are not automatically able to negotiate their terms when assets are divided. They aren’t even allocated a seat at the table, unless the court grants them one.



So, while it is extremely seldom that I ask anyone to stand in support of an action presented by a conservative member of parliament, I am asking just that of you now. MP Marilyn Gladu, Sarnia–Lambton brought Bill C-228 forward and by the time you are reading this edition of The Advocate it will likely have gone through second reading. Previous bills that would have enacted the changes to the Bankruptcy and Insolvency Act to protect pensions died on the order floor. I am asking you to call, write, text or e-mail your MP and ask that she/he/they support Bill C-228.


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