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e-3893 (Economy and finance)

E-petition
Initiated by Michael Powell from Whitby, Ontario

Original language of petition: English

Petition to the Minister of Innovation, Science and Industry

Whereas:
  • Over 4 million Canadians depend on a defined benefit pension for their financial security in retirement;
  • These pensions are deferred wages earned by Canadians while they were working and are payable to them after retirement;
  • After years of hard work and dedication, pensioners deserve the full pension to which their former employer committed;
  • Since 1982, more than 250,000 Canadian seniors have suffered the loss of pension income due to corporate insolvency;
  • In 2019, the federal government made initial steps to make insolvency proceedings fairer and more transparent, making changes to federal corporate laws, making company directors liable for excessive and unreasonable payments made to executives in the lead up to insolvency;
  • However, the pandemic has put pressure on business, increasing the risk of insolvency and we have since seen examples where companies have continued to underfund their pensions putting the financial security of Canadian defined benefit pensioners at risk; and
  • Action on this issue is needed, as Canada cannot afford another pension insolvency like those of Sears and Nortel which had a negative impact on the financial security of many seniors.
We, the undersigned, residents of Canada, call upon the Minister of Innovation, Science and Industry to work with all Canadian parliamentarians to undertake a direct consultation, generating specific goals and timeline to ensure that vulnerable seniors receive 100% of their pension to which their employer committed.

Response by the Minister of Innovation, Science and Industry

Signed by (Minister or Parliamentary Secretary): THE HON. FRANÇOIS-PHILIPPE CHAMPAGNE

The Government would like to thank the petitioners for sharing their views on how to strengthen retirement security for pensioners in cases of employer insolvency. The Government welcomes input on these important issues.

The Government of Canada understands the importance of pension and retirement security for Canadians and the consequences of employer insolvency on current and former employees, retirees and their communities. The Government notably acknowledges that some pensioners with defined benefit pension plans continue to face risks in cases of employer insolvency for a portion of their retirement income. Canadians deserve peace of mind when it comes to their retirement security.

This is why the Government has taken significant steps to strengthen Canada’s Retirement Income System, including enhancements to Old Age Security and the Canada Pension Plan. Since 2016, these include:

  • A ten per cent increase to the maximum Guaranteed Income Supplement (GIS) benefit for single seniors;
  • Reversing the announced increase to the eligibility age for Old Age Security (OAS) and GIS back to age 65 from 67; and
  • A ten per cent increase to the OAS pension for seniors aged 75 and over.

Federal and provincial pension laws regulate pension funding and require pension fund assets to be held in trust, for the sole benefit of pensioners. They are completely protected from the claims of other creditors during an insolvency. Pension plan sponsors must also make periodic contribution payments to the pension trust fund to ensure sustainability of the plan over time. In some cases, regulators will notably require special payments to reduce unfunded liabilities – that is where there is a deficit between a pension plan’s current assets and its future obligations to pensioners.

Canada’s insolvency laws (such as the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA)) aim to strike the proper balance between the competing interests of debtors and creditors when a company in financial difficulty restructures. This includes favoring restructuring processes that can allow companies to re-emerge as financially viable businesses, saving jobs, pensions, and economic value. When restructuration is not possible, insolvency laws facilitate orderly liquidations that enhance recoveries for employees, pensioners and creditors – helping make very difficult situations easier to bear.

In 2019, the Government also enacted changes to better protect workplace pensions from employer insolvency by making proceedings fairer, more transparent and more accessible for pensioners and workers; providing better oversight of corporate behaviour; and improving sustainability and benefit security for federally regulated pensions.

The marketplace functions of insolvency laws will play an important role in supporting our economy as it recovers from the COVID-19 pandemic and as Canadian businesses and individuals face pressures and uncertainty from geopolitical instability, supply chain constraints, and rising energy prices and interest rates. They will work as a backstop and complement to the Government’s investments in skills, innovation and growth to help build a resilient and sustainable economy that strengthens the middle class and leaves no one behind.

Open for signature
March 7, 2022, at 2:31 p.m. (EDT)
Closed for signature
June 5, 2022, at 2:31 p.m. (EDT)
Presented to the House of Commons
Ryan Turnbull (Whitby)
June 15, 2022 (Petition No. 441-00585)
Government response tabled
August 17, 2022
Photo - Ryan Turnbull
Whitby
Liberal Caucus
Ontario
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