Toronto, ON April 19,2023– After several attempts by different political parties, including the NDP, essential pension protection legislation is passed by the Senate. The “Act to Amend the Bankruptcy and Insolvency Act”, also known as the pension protection Act, legislation that the International Association of Machinists and Aerospace Workers (IAMAW) have advocated for decades will finally prioritize workers in cases of bankruptcy and insolvency.
The Act would apply to provincially and federally regulated plans, putting in place protections for workers’ hard earned pensions in cases of company bankruptcy or insolvency. The bill gives “super priority” to claims of defined benefit pension plans, which ensures that workers will never again lose their retirement income as a result of insolvency. “This is a major shift in the area of responsibility and accountability, and unfortunately, comes after millions of Canadians lost their pensions as a result of their employer declaring bankruptcy,” said David Chartrand, General Vice President of IAMAW Canada. David added, “the right thing doesn’t always align with political party lines, but this issue was too important to confine to party ideologies.”
Current legislation prioritizes lenders, shareholders and executives who all get paid even when a company goes under. “This is fundamentally unethical; it is wage theft. Pensions are deferred wages that workers consciously put aside for retirement,” commented David Chartrand. He went on to add, “allowing employers to use those monies to pay out lenders, shareholders and executives was hugely irresponsible and morally defunct on behalf of government.” Workers’ futures shouldn’t be at stake, nor should they pay for mistakes of their employers.
Sears and Nortel are only the starkest of examples of mass losses workers suffered, while the impact of those losses is borne by workers who were affected even today. At a time when fewer Canadian workers have pensions, and the public pension system is woefully inadequate, it’s encouraging that the government is taking action to protect existing pension plans. It’s hypocritical of the government to place responsibility of saving for retirement on individuals while eroding the public pension system, and not protecting retirement savings. Today’s announcement is a step in the right direction, and indication that the federal government may acknowledge some of the hardships of working people.
Although the road to making this Act law was long and tedious, it was worth the effort. “The work of unions is never done, but when we win, we win for all working people.”, stated David Chartrand. Moreover, this win is a reminder that without the supply and confidence arrangement between the NDP and Liberals, historic and socially significant legislation would still be in question.
The IAMAW represents workers in multiple sectors, and advocates for 55,000 workers across Canada, and nearly 700,000 across North America.