Hamilton, ON – The federal NDP Pension Critic, Scott Duvall – Hamilton Mountain MP – announced he will introduce a private member’s bill this fall to protect workers’ pensions when their employer is allowed to restructure their financial affairs under the Company Creditors Arrangement Act.
“The pensions earned by workers are deferred wages, plain and simple, explained Duvall. “Diverting, withholding or seizing those funds should be illegal. The current system under the Liberals is broken. They need to stand up for Canadian retirees and stop the organized theft of workers’ pensions.”
Under the Act, secured creditors, including lenders like banks and debt holders, top the list to get their money back. Workers and their benefits are usually at the end of the line.
Duvall’s Bill proposes to ensure that workers receive the same amount of consideration as the secured creditors when a company files under CCAA. Canadian companies can file for protection from their creditors under the act. It’s a law that allows corporations time to work out their financial difficulties. Under the law a company has 90 days to develop a plan so it can continue operating. As long as the act is in place, creditors are not allowed to take action to collect any monies owed to them. Since 2009, the government has granted 286 companies creditors under the bankruptcy laws including one of Hamilton’s major employers – Stelco – which has filed three times in the past decade.
Sears Canada is the latest corporation to take advantage of the loopholes provided under CCAA. In June, Sears announced it was seeking court protection from creditors, allowing the company to fire 2,900 employees and eliminate their medical and pension benefits. Sears also filed a court motion to suspend monthly payments to employees’ pension plan and retirees’ post-retirement benefit plan.
“They do it because they are allowed to get away with it,” explained Duvall. “It’s not the company’s money, it’s the workers’ money and this legalized theft has to stop,” demanded NDP leader Tom Mulcair. “Justin Trudeau promised reform of this act when he was running for office, now that he’s there, he’s forgotten that promise, but we’re not going to let him forget, he made a commitment to Canadians and the NDP will fight to see that he keeps it.”