30 November 2010
Hon. Grant Mitchell:
Honourable senators, I rise to agree with exactly that sentiment. Let me tell you why I have a great deal of difficulty with the way things stand now. I had the pleasure, certainly the challenge, of sitting in on the Bill C-10 review with the Standing Senate Committee on National Finance earlier this year. Of course, we reviewed the Nortel situation. We had a number of witnesses, as we always do about issues like that, and, as the discussion progressed, I began to wonder why it is that pensioners, and in this case disability pensioners, would be so far down the list of priorities when it comes to credit or ranking, particularly given that the government itself had, just several years before, established the Wage Earners Protection Act, which moved wage earners up the ranking so that, in the event something like this occurred, they would have greater standing and a greater chance of getting paid. If it is good enough for wage earners, who would still have a chance to get another job, if worst came to the worst, and protect themselves and their families, surely pensioners who live on their pensions, just as wage earners live on their wage, and disability pensioners would have an even greater argument for being raised up the list or the ranking of creditors.
I asked one of the private sector experts, I believe from a national accounting firm, why it would be that pensioners would be subordinated in ranking, in line for getting paid in the event of a bankruptcy, behind much more powerful interests, like the banks? What they said was very telling and striking to me. They said that if the pension liability was moved up the ranking ahead of secured creditors, like the banks, then the cost of borrowing for companies would go up. It would go up, of course, because the banks would not have access to that money now going to pensioners or disability pensioners. Therefore, in the event of a failure, they would not stand to recoup as much money. The implicit cost is greater. They therefore would charge higher interest rates if that ranking were to be readjusted in favour of pensioners.
I said to myself, how can that possibly be fair? Why would we in this country ask pensioners to subsidize the cost of borrowing for big companies? It seems surreptitious. It seems unfair and behind the scenes. It is complicated, of course, so perhaps it is easy to slip by, but that is exactly what this issue is about. It says that the banks are more important, and the company's interest in being able to pay not quite as much money in interest on its borrowings is more important than the basic livelihood of people who simply cannot recover if they lose the benefit. They do not have another chance.
It seems very straightforward to me, why would we not put a priority on people who are disabled? Why would we not put a priority on people who rely on their pensions to live?
One of the very powerful things that I appreciated about what Senator Eggleton said was how he brought this issue down from the abstract — people out there, pensioners — to real people who have families, lives, fears and hopes, and who confront a future without much security at this time. I am very glad of that, and I would hope that we could think about those people as people and not as some abstract issue.
Also, I was encouraged, tentatively hopeful, when I heard the leader say today that she could not talk about it because they actually were doing something. I will put all kinds of hope in the thought that she meant that they are doing something for these people. I would ask that perhaps they could do it before Christmas so that these people, who are real people and who are suffering, will be able to enjoy that period of the year as well.
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