By Bea Bruske, President of the Canadian Labour Congress as published in The Hill Times
No matter who we are, most of us want financial security for ourselves and our families when we retire. We give our all and spend decades dedicating our time and energy to our employers. When we retire, we depend on our hard-earned pensions to provide financial security after a lifetime of work.
But when companies restructure or go bankrupt, too often, we see workers being forced to wait at the back of the line, where they stand to lose everything they worked for their entire life.
We have seen companies pay out creditors and hand out bonuses to executives and shareholders. Pensioners are not the culprits when employers become insolvent, but they are frequently made the scapegoat. Thousands have faced poverty in retirement as a result.
It is important to keep in mind that workplace pensions are not gifts from the employer. Defined benefit pensions are deferred wages. They are earned and paid for by workers. Next to their homes, pension savings are one of the most important pools of assets that workers accumulate over their lifetimes.
However, current federal pension and insolvency laws fail to adequately address pension losses in insolvency. Many of us know someone that ended up with the short end of the stick in one of the recent high-profile insolvency cases.
Workers from Nortel waited seven years to see any part of the pension they were owed. In the case of Sears’ bankruptcy, 17,000 workers saw their pensions significantly reduced—a pension they earned and relied on. With changes to their pension, a retired worker’s income is impacted for the rest of their life.
We say: Enough is enough.
After months of scrutinizing and several debates in Parliament, our elected officials finally agreed that it was time to put workers and pensioners before big banks and CEOs—something Canada’s unions have demanded for decades—and passed Bill C-228 (Pension Protection Act) unanimously.
The bill would amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act. Once adopted, it would ensure workers’ and retirees’ pensions receive super-priority status in bankruptcy and insolvency cases.
Now the bill is in the hands of the Senate. After improvements in the House, Bill C-228 passed the Senate Banking Committee unamended. In the coming weeks, senators will have a final opportunity to debate and vote on Bill C-228, and we are urging them to act quickly and pass this much-needed and long-overdue legislation. Protecting pensions is about fairness for workers and pensioners. Bill C-228 will ultimately provide financial security and peace of mind to millions of families.
As it stands, workers are often left without compensation because they were last in line for repayment, after big banks and creditors. Some workers have even lost their entire pension, which is unacceptable. After a lifetime of hard work, no retiree should have to struggle to make ends meet. Workers should always be the first priority, not the last.
Our ask to senators is simple: pass Bill C-228 into law without further delay.
Bea Bruske is president of the Canadian Labour Congress. Follow her on Twitter @PresidentCLC