Monitoring the situation isn’t good enough when pensions hang in the balance
My last column explored the potential for the government to use the existing Old Age Security lists to ensure that everyone who should be receiving the Guaranteed Income Supplement is doing so. It is a simple solution to a problem that sees more seniors getting by with less than need be. Sadly, that isn’t an isolated example of how the government could be doing more to ensure more Canadians are able to retire in dignity. This is because there are still instances of private plans collapsing or remaining underfunded during bankruptcy proceedings. For many, the practice amounts to theft and sadly, it is nothing new.
The phenomenon persists despite years of encouragement from New Democrats and pension advocates for the government to change how plans are treated during bankruptcy. Going back to Nortel’s collapse and more recently with that of Sears, pensioners have watched their underfunded plans shuffled to the back of the line as secured creditors are paid off. What most observers aren’t aware of is the fact that many of these secured creditors are often parent companies of the entity that is struggling. When considered that way, it shows how our bankruptcy laws are in need of an update.
It is important to remember that these pensions have been earned by employees who held up their end of the bargain only to lose out at the 11th hour. This is why New Democrats have proposed legislation to protect the pensions that workers and retirees have earned. The bill would also force companies to provide termination or severance pay before paying secured creditors. Under current legislation, large multinational corporations are using Canada’s inadequate bankruptcy laws to take money meant for workers’ pensions and divert it to creditors.
To date, the government refuses to help workers beyond “monitoring the situation”. Now there is more for the government to monitor after the collapse of global construction giant Carillion PLC. That company employs 43,000 people worldwide, including about 6,000 in Canada. Carillion filed for liquidation in mid-January after accumulating $2.5 billion in debt, of which almost half is a pension deficit. This is the same company that runs the Sault Area Hospital, which reports indicate will be able to continue operating without interruption.
What is clear is that workers, such as those caught up in the Sears collapse, need more than information sessions with Service Canada. They deserve to know their retirement is protected. The Innovation Minister said he would work with anyone that puts forward a proposal. It remains to be seen if that sentiment will see the government roll up their sleeves and work with New Democrats to ensure that no Canadian workers ever lose their earned pensions and benefits again.
It is imperative that we remember that at the heart of the issue are people. For some it is not as simple as going out and finding another job. Many are long since retired and at danger of not being able to afford long-term care because the pensions they earned were robbed by their employer. These are the people who must be the priority when company’s flounder. Without a strong position to protect pensions, this government only joins its predecessors in failing those who need help the most.