OTTAWA – After a year of work Bill C-501 is now entering the final phases of the legislative process. With that being said there have been some important recent developments that have changed the very nature of the bill and how it may impact hard working Canadians.
The process for the drafting and tabling C-501 began in the fall of 2009 with a series of town-hall meetings that I hosted throughout our riding. It was around that time that AbitibiBowater was entering its court supervised restructuring and workers at that company were informed of a serious shortfall in their pension fund. At these meetings, workers from both AbitibiBowater and Buchanan Forest Products requested that I take some action in Ottawa to better protect their pensions and severance/termination pay during corporate bankruptcy proceedings. I agreed to do whatever I could to help.
Bill C-501 was my response to the requests of those AbitibiBowater and Buchanan workers and would have put the pensions and severance/termination pay of workers ahead of all other creditors during restructuring, bankruptcy, or liquidation proceedings. In many recent bankruptcy cases C-501 would have secured all or a very large portion of the money owed to workers. C-501 was tabled on March 24, 2010 and was debated over the following two months in the House of Commons before coming to a vote later that spring.
Soon after tabling C-501 the corporate lobbyists, primarily for the banking industry, started to work on my colleagues from the other parties in Ottawa, feeding them misinformation about the bill and basically claiming it would mean the end of capitalism in Canada. The fear mongering worked, and the other parties began to line up against C-501 early on – beginning with Members from the Conservative Party. Despite the opposition of the vast majority Conservatives (12 actually voted in favour) Bill C-501 passed its first vote in the House of Commons by a vote of 144-111 on May 26, 2010. A positive result to be sure.
Once the Industry Committee hearings finally began it quickly became obvious that Liberal MPs on the committee were aligning themselves with the Conservative members and taking a stand against the bill. At this point, I decided to take action and sought out a compromise with the other parties to modify the bill in a way that allowed pensions and severance to be elevated during bankruptcy proceedings from their current position at the bottom of the list of creditors to ahead of all others but just behind the claims of banks and primary lenders. I suggested this compromise after discussing the proposal in private with MPs from all parties and with the support of the country’s largest pensioners groups. Unfortunately, this compromise required the unanimous consent of MPs in the House of Commons, and the Conservative MPs present at the time opposed my motion to allow the compromise to move forward.
Following the defeat of my compromise motion the fate of C-501 took a turn for the worse with the Liberals saying they would oppose some minor amendments I was putting forward to tie up some loose ends on the bill. What happened next though was completely unexpected. In the final Industry Committee meeting for the bill on February 15, 2011 the Bloc Quebecois MPs joined with the Conservative MPs to strip out every clause of the bill that pertained to pensions. All that was left once those MPs were done stripping away the offending clauses was the protection of severance and termination pay for workers during restructuring, bankruptcy, and liquidation proceedings. The Conservatives and Bloc cut pension protection out entirely.
The determined efforts of the other three parties in Ottawa to undermine and strip down C-501 were successful and a setback to be sure, but all is not lost. Had the new version of C-501 been in place during the recent Buchanan liquidation proceedings, for example, each of the workers who lost their job would have received all of the severance and termination pay that they were owed, which in some cases was as much as $30,000. As it stands now, workers in Canada are only guaranteed a maximum of $3,000 in severance and termination pay, so the passage of C-501 could still secure the entire severance and termination pay owed to each and every working Canadian in the future.
In the end, I did absolutely everything I could to improve pension security in Canada, but it would seem the other parties are not yet ready to cooperate with one and other and commit to securing the retirement income of more than 6 million Canadian workers and their spouses. With that being said however, there is still a chance to get something positive done in Ottawa and I will continue to do everything I can to get C-501 passed this spring so we can at least protect the severance and termination pay of every working Canadian.
John Rafferty MP
Thunder Bay Rainy River