After years of debate in the federal Parliament, the bill that aims to better protect defined benefit pension plans during business failures has been adopted in final instance in the Senate.
Bill C-228 will amend federal corporate bankruptcy and insolvency legislation to give their employees top priority among creditors to bail out unfunded liabilities in defined benefit pension plans.
Thus, by placing pension liabilities ahead of secured and unsecured creditors during an insolvency process, participants in these pension plans will have a better chance of retaining most, if not almost all, of their benefits. of retirement.
Among others, the promoters of Bill C-228 have often referred to notorious bankruptcies such as those of the retailer Sears Canada and the company Nortel Networks.
In both cases, these bankruptcies left hundreds of their ex-employees with greatly diminished pension amounts by sidelining the funding deficit of their pension fund plans, which was supplanted by the other creditors of these companies.
Bill C-228, introduced by Conservative MP Marilyn Gladu, had already received unanimous consent from all parties in the House of Commons at the end of 2022.
It was passed without amendment Tuesday night by the Senate in Ottawa.
“This bill will greatly increase our chances of having money, since we are no longer the last to help ourselves [in the event of bankruptcy]. We’re going to be among the first creditors, so it’s a great victory for the labor movement, but it’s also a victory for all Canadian workers, unionized or not, who have a defined benefit [pension] plan.” Nicolas Lapierre, Steelworkers regional coordinator for eastern Quebec, told The Canadian Press.
For her part, the president of the FTQ, Magali Picard, was also delighted with the adoption of a long-awaited bill for years.
“This law corrects a great injustice. For too long, during business bankruptcies, managers have run away with pockets full of bonuses of all kinds and creditors have dipped into the pension fund, while workers themselves have had to suffer a significant reduction in their services. The courts will now have to give priority to bailing out deficit pension funds, ”commented Ms. Picard, still at The Canadian Press.
