Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 13 - Evidence - November 18, 2010
OTTAWA, Thursday, November 18, 2010
The Standing Senate Committee on Banking, Trade and Commerce met this day at 10:30 a.m. to study Bill S-216, an Act to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act in order to protect beneficiaries of long-term disability benefit plans.
Senator Céline Hervieux-Payette (Vice-Chair) in the chair.
[Translation]
The Deputy Chair: I call the meeting to order. I would like to welcome this morning's witnesses. I am Senator Céline Hervieux-Payette and I am pleased to be chairing this meeting.
The first thing I would like to do is to introduce my colleagues. We have some new faces, including Senator Yonah Martin from British Columbia.
[English]
Next we have Senator Don Plett from Manitoba, Senator Kelvin Ogilvie from Nova Scotia, and Senator Wilfred Moore from Nova Scotia. These are my regular colleagues in this committee.
From Ontario, we have Senator Vim Kochhar and Senator Art Eggleton; Senator Pana Merchant from Saskatchewan; Senator Elizabeth Marshall from Newfoundland and Labrador; Senator Stephen Greene from Nova Scotia; and Senator Mac Harb from Ontario.
This morning, on the first panel, we have Ms. Susan Kennedy, Ms. Josée Marin, Ms. Diane Urquhart, Mr. Peter Burns, and Mr. Jim Derkson by video conference. Welcome.
Susan Kennedy, Court-appointed Representative, Nortel Disabled Employees not represented by CAW Canada: Honourable senators, I represent about 280 of the Nortel disabled employees in the Companies' Creditors Arrangement Act, CCAA, and the Bankruptcy and Insolvency Act proceedings. I would like to thank 38 of the disabled employees and their family members who wrote impact statements in a document that you may have picked up over there. Thanks to the committee clerk, Line Gravel, for getting that set up in time for today.
I asked people to explain how their lives would be affected if Bill S-216 was not passed. Today I would like to share a little bit of their stories with you. One lady finished breast cancer treatment in September 2009. She actually went back to work and then in January 2010 found out that the cancer had spread to her lungs. She says:
I am still undergoing treatment and the cancer is just starting to show signs of slowing down. . . . I will have this for the rest of my life and will be walking the tightrope between treatment and waiting to see if the treatment is still working!
. . . My cost of medication is over $5,000 per year . . . . I have no idea how I'm going to cover this. . . . Without the current medication for treatment, the cancer will spread rapidly. I will lose my home . . . . I have been trying to figure out a way to cover basic living and have been unable to come up with anything other than welfare — which is unthinkable to me.
. . . Constant worry about what will happen when the disability payments stop on December 31, 2010 is a nightmare.
As might be expected, the majority of the letter writers were worried about being unable to pay their medical expenses after December 31. Ten people mentioned that they thought they would have to sell their homes that they had lived in all their lives; five said they would be unable to pay their rent; some just did not even know what they would be able to afford after that because they do not know how much money they will have. Here is quite a different story:
On Thursday May 27 2010, an orange sun was setting along the railway tracks from Ottawa to Carp and a beautiful doe had just crossed my path. Thank God for such an idyllic setting in which to end my life. I tried to help my kids mow a couple of lawns for tuition money, given Nortel's bankruptcy, but it had been too much.
Somehow, I'm still here, still "recovering" from depression.
. . . My wife and toddlers lost their father to three-day sleeps and suicidal escapades. Often I do household chores. Sometimes I walk the railway tracks.
I literally gave my life for this third-world Canadian company. Will the loss of income affect me? More than once, it's nearly tripped me off the tightrope.
Actually, five people mentioned suicidal thoughts in their stories, and one person described an actual suicide attempt, and I bawled my eyes out when I read these. I know it is a rough situation to be in, and it hits everyone differently. The fact that people are giving this kind of reaction tells me that it is really important to give disabled employees some hope, give them feedback, if possible, about where we are getting with Bill S-216. It is making progress, and we want people to have hope and not to give up.
Many people mentioned their children in their letters, and there were a total of 36 kids around 35 people who wrote letters. Those kids will also be impacted by the loss of the long-term disability, LTD, benefits in ways that I had not quite imagined for all of them. Twenty of the kids' parents mentioned they would no longer be able to contribute to their children's university expenses. Other parents were more worried about the loss of medical benefits for their children. One mother's story was this:
. . . I went on long term disability. At that time and within a few short years of each other, both of my children were diagnosed with life threatening diseases. My youngest child, at birth was diagnosed with a Multi-Cystic Dysplastic Kidney disorder, and lost a kidney to this congenital disease. His remaining kidney continued to have problems and we spent a great deal of time at CHEO. Then about a year and a half later my then five year old child was diagnosed with Leukemia.
I cannot tell you how terrifying it feels when you are sick to find out that your children are sick too. All you can think of is protecting them and caring for them above all else. Throughout those years of caring for both my sons, sometimes I felt like I was holding their hand, as hard as they were holding mine, every time we walked towards the hospital doors. . .
I always feel that we, as Canadians citizens, are just a reflection of how we care for and take responsibility for our most vulnerable. This is why this bill is so important.
Six of the disabled Nortel employees' children were also disabled or suffering from serious illnesses themselves. This is just out of the 35 who wrote letters. It would probably be impossible or expensive to get replacement health care plans for these children, partly because of the cost and partly because they are disabled, but Bill S-216 I believe would provide this, and that would provide a lot of relief to their parents who are so worried right now.
Many people described the stress they are feeling right now, as we approach December 31, 2010, when their LTD benefits will end, and they are very scared. Here are a few examples:
This loss of income is devastating to my husband and I. The stress this situation has put on me personally has adversely affected my health even further, with blood pressure problems, lack of sleep and other health related problems. My quality of life has worsened because of the fear of losing this income.
Another example:
I find it urgent to tell you how I personally will be affected as a result of Nortel's Insolvency UNLESS Bill S-216 is passed. I am not married. I live alone in an apartment that likes their rent on the 1st of every month. I am expecting my final cheque from Nortel on November 26. I don't know how I will make sure my rent is paid in time. I am afraid of being evicted. Thoughts run through my mind that I may have to become homeless and live on the street. I live from paycheque to paycheque and have no RRSPS or money saved.
An important advantage of Bill S-216 is that it protects both the wage replacement benefits and the medical benefits. Some of the impact statements showed that people really do need both of these protected, and Bill S-216 is one of the only ways I have seen that does that. A stroke survivor said:
To help look after me, my wife has quit her job. Without the medical benefits, we don't know how to pay for my essential medications . . . Without the disability benefits, we are not sure how to pay for our rents, household expenses and help our children with their university tuitions.
A sister of a person on LTD, who happens to be an occupational therapist who works with disabled people all the time, said:
. . . I do understand the effects of stress on people who have illnesses and disabilities. One thing that is clear, is that if the disability income and medical coverage stops suddenly as is planned, this will have far reaching implications on these affected individuals' health and welfare, relationships, families and most importantly their ability to cope and make decisions.
People are already struggling to make decisions. I see this every day in the emails I receive. They are wondering when to retire, what to do with the lump sum payment from the health and welfare chest, will it be taxable or not, will they be able to enrol in the Manulife health care plan or not.
A brother of a disabled person said:
I am the Power of Attorney for my sister, a 50 year old woman with MS and Diabetes. . . . She is residing permanently in a full pay retirement home. She needs ongoing support with basic needs and must live in assistive housing. With MS and Diabetes she has significant medical expenses that must be met. Without her ongoing wage and benefit support she will not only lose the ability to meet these expenses she will lose the ability to financially support her three school-age children. Additionally, she will lose the ability to provide medical and dental benefits for her children. Her former husband does not have benefits. This is an impossible situation! She has no ability to go out and find another job. She can't work. She is prone to depression and the prospects for the future are frightening for her, her children and her aging parents. . . . As a family we are doing all that we can but our Government must protect the most vulnerable in society. That is what Canada stands for.
Senator Eggleton, in my opinion, Bill S-216 provides a safety net that will help disabled employees and their families in the event of a bankruptcy like Nortel's. Please, senators, support Bill S-216 to help Nortel's disabled employees and to prevent other disabled employees in the future from ever having to go through the stressful and frightening process of being unsecured creditors in a bankruptcy. It allows us to continue our lives as they were before the bankruptcy process started and does not require disabled, stressed out and depressed people to make difficult and frightening decisions about their futures.
Josée Marin, as an individual: I am Josée Marin. I am one of the 400. I suffer from scleroderma and Crohn's disease, which are both autoimmune diseases. Scleroderma will slowly turn me into a stone while I am still alive, until I die from organ failure. Crohn's is attacking my bowel and my spine right now. I also have to live with anaphylaxis, severe allergies that can be triggered at any time and kill me. My prospect of survival is really grim; I know that. I can feel it every day. I wish I could live the remainder of my life decently, instead of living in stress and holding my breath, because in the end this bill might very well decide if I live or die.
The most important point I want to make is that I, and other disabled workers, need our disability just to survive. Now that every other recourse has failed, our only hope is Bill S-216. Other workplace benefits do have strong legislative protection, so in the future, maybe government should consider the same for a disability plan. For us now, it is only Bill S-216 that can help, and I hope and pray that you will enact it as soon as possible, because for me and other disabled workers, time is of the essence.
We do not know what will happen with Nortel. There is no certainty yet. I know that on December 31 I am fired and I am financially ruined.
In the CCAA process, there was supposed to be a government agency looking over things. That government agency is called the Office of the Superintendent of Bankruptcy Canada. It had no force of law when Nortel went under, because the act was amended only in September. Our interests have never been represented well by the monitor, Ernst & Young. I know we are few and have no political or financial power, but I do not think we deserve to die.
I have the disability plan from Nortel here, and I would like to table it.
I heard yesterday that these plans cost a lot of money. I would like to remind you that it is the government that encouraged the establishment of health and welfare trusts, and to do so they give a generous tax deduction to employers, which are subject to clear rules. Nortel did not comply at all with these rules, and there is no consequence to them, only to us.
On top of that, we had a trust agreement that I will table also, and the trust was not protected by the trustee, neither before nor during CCAA, with the result that the trust is almost drained today. In 2005, the trust was fully funded.
As a result of that, like Massey Combines Corporation 20 years ago, and Eaton's, we face the loss of our disability benefits.
[Translation]
Bill S-216 is an emergency measure, a first step to better laws that will ensure sick and dying people will never again be subjected to such a process.
The CCAA process is unbearably long and offers no certainty and little hope. Indeed, if Nortel were ever to go bankrupt, it could take years for the money to start to flow, and in small amounts when it may no longer matter because it will be too late. Sick people need financial security. Without it there is no quality of life left.
Losing your health and ability to work, earn and contribute is never acceptable. However, the supreme injustice is when you learn that after all, it might not be your illness that extinguishes you but your employer's broken promise because you can no longer support yourself, meet your own needs, buy what you need or travel to see your doctor even though you were responsible and protected yourself against this very situation by buying extra insurance — like I did — from the employer in which you had faith.
The day you learn that your income might disappear because you did not have real insurance after all is even worse than the day you learn you are sick. You are now uninsurable for the rest of your life and there is no solution. It is either destitution or death and no matter how courageous and feisty you are, there is no hope.
If you think Nortel is broke. Think again. A lot of evidence points to quite the opposite.
As Sue has said, I am getting increasing numbers of people calling me for help because they now know who I am. They are in tears begging me to help them. They tell me that they are at the end of their rope and do not think they will make it to December 31. While everyone else is celebrating, these people will be on their way out.
The only advice I can give to all those callers I speak to day after day is: hang in there. Something will happen. This situation is not tenable.
I would like to leave you with one last comment. Our fate rests in your hands. We are professionals and took all the necessary steps to avoid this very predicament. This begs the question of how and why we got into this situation. I do not think that we deserve to die because of Nortel's broken promises and failure to properly manage its business.
The Deputy Chair: We will now hear from Ms. Diane Urquhart. She is an independent financial analyst. You have the floor.
[English]
Diane A. Urquhart, Independent Financial Analyst, as an individual: Good morning. I am a financial expert, and I have 30 years of experience in the investment field. I am on an unpaid retainer, working for the Nortel dissenting long- term disabled employees.
It is my opinion that Bill S-216 will substantially improve the safety of self-insured, long-term disability wage loss replacement and medical reimbursement. I say this because, in general, self-insured long-term disability benefits are offered only by large corporations, not by mid-sized and small corporations. I have examined Moody's Corporate Default and Recovery Rates for the past 22 years. We can see from this that for the unsecured creditors for all of the companies on average that have defaulted in the world, there is substantial recovery at the unsecured creditor level. As a consequence, if the long-term disability wage loss replacement and medical benefits were given preferred status above the unsecured creditors, while not for certain in all cases, we can say that in general, in large corporations, the bankruptcy estates will have sufficient assets, enough to pay not only the secured creditors but also likely to pay the wage loss replacement, as well as the medical reimbursement for the disabled.
The reason we can say this with such conviction is that the LTD benefits have costs and claims that are very small. In Canada, I estimate that the actuarial liabilities for all of the long-term disabled employees today in self-insured plans would be $5 billion to $9 billion. The data is not good for getting more precise numbers, but I am confident that, on the basis of the methodologies that I have used, this is a reasonable estimate.
You would know that there is also an effort to have preferred or higher status for pension fund deficits. By comparison, the LTD liability of $9 billion compares to $415 billion for the liabilities of the defined benefit pension plans of corporations of Canada.
I will use now the worst case of $9 billion in liabilities for LTD employees. There is no way for us to determine, on the basis of any published information, how much of that is actually not funded. However, if we assume that they are all underfunded to a similar degree as Nortel, which is a 75 per cent deficit, I am confident in saying regarding the long-term disability deficits in Canada, as a whole, that if every corporation that has a plan were to go bankrupt, the amount of deficit in these LTD plans would be no more than 1 per cent of the total capital of all the corporations in Canada that have LTD plans and defined benefit plans.
To put perspective on all of what we heard yesterday from the Canadian Bankers Association and the transportation and communications employer group, that this was a very expensive provision, I am highly confident in concluding, as a financial expert, that if all the deficits of the land are 1 per cent of the capital structure, this cannot be so.
I want to add also, regarding the Nortel Canadian estate in and of itself, that Senator Eggleton gave an estimate of $86 million being required to make this group whole with respect to its wage loss replacement and its medical reimbursement. While there could be some additional actuarial liabilities determined to make this as high of $100 million, I am confident that any amount between $86 million and $106 million is well within the means of the Nortel estate to pay. A number was quoted yesterday of $6 billion in the global estate. You would know there are three different estates. This amount of money will be paid from the Canadian estate. That matter will be the subject of a great deal of mediation and negotiation, but it would be surprising to me that the Canadian estate would not end up with at least $1 billion. For us to seek something in the order of $100 million from a $1 billion estate is a reasonable expectation that even the Canadian estate is well within its means to pay.
I would like to turn to the matter of whether this could affect the cost of doing business in Canada. LTD wage loss replacement and medical reimbursement are paid only to the long-term disabled. There are 9 per 1,000 workers in Canada. That is the national average for how many are expected to become disabled in the workforce. That is a percentage point of 0.90 per cent. In the numbers I gave you earlier for how many disabled persons are in self-insured plans, my estimates would be that that ranges from 12,000 persons to 23,000 persons. Not only is this a bill with a transition clause that seeks to remedy what I am almost prepared to say is a fiasco, certainly, a human crisis, for the 400 persons at Nortel, I am satisfied that Bill S-216 would also make sure that this would never happen again to the other 12,000 to 23,000 persons who are presently disabled and in these unsafe self-insured plans.
Not all of them, of course, will be subject to the remedy of Bill S-216. Not only do you have to have the first contingency of becoming disabled, but your employer also has to go bankrupt. The cost of this is minimal, as I indicated previously.
It is important to note that Bill S-216 is a provision that does not require a mandatory insurance. It does not require full funding. I think everyone in the room would probably agree it would be good to have a holistic solution. However, a holistic solution is facing a considerable amount of opposition as well, and so we cannot say that we can pass on Bill S-216 and go to some other solution. That other solution cannot help Nortel, and in any case it faces considerable opposition.
On the matter of costs, the beauty of Bill S-216 as a solution, as a start, and almost as a solution that can serve the purpose — and this is what was quoted in the Toronto Star editorial — is that Bill S-216 has you pay the piper in the end. You can have long-term disability benefits in the marketplace, which we would say were unsafe, but they are not unsafe until the time that the employer is bankrupt. As long as the employer is operating as an ongoing concern, it is able to pay for the income and the medicines out of the revenues of the business. It is only at the bankruptcy that there is a problem. Bill S-216 says pay the piper in the end for offering a benefit that was unsafe, that no one knew was unsafe until the bankruptcy.
This is a very good solution, in fact, to a problem that afflicts only a small percentage of society in disability in the first instance and, after that, the second contingency of employer bankruptcy. This solution allows no impact whatsoever on the operating costs of Canadian business as a consequence.
On the cost of credit, I gave testimony earlier this week at the House of Commons Standing Committee on Industry, Science and Technology. I believe there is a consensus amongst financial experts, including the Royal Bank of Canada and Towers Watson, that if all the employee benefits of Canada were given priority status above unsecured creditors, the impact on the Canadian bond market, on the investment-grade market, would be 0.20 per cent. That is for pensions, severance and long-term disability benefits, and the bond market would suffer a correction of 1.5 per cent. It is clearly in the case of LTD where you have only an $89-billion liability versus a $414-billion liability that we are a minor fraction. I would estimate that it is 5 per cent of the 20 basis points.
It is almost trivial to say that the amount of impact that there would be on the Canadian debt markets of passing Bill S-216 would be 1 basis point higher cost of credit. Instead of 3.25 per cent, it would be 3.26 per cent. As a consequence, this whole matter of all the issues that have been raised with respect to cost of credit and availability of credit are absolutely not defensible by any of the experts in respect to the LTD.
Those who say that the sky is falling, that the market would have major corrections and that it would be catastrophic for the ability of Canadian corporations to be competitive and do business have not brought numbers. The Canadian Bankers Association apparently has not even read the work of the Royal Bank of Canada, which was given in testimony earlier in the week.
There was a question yesterday about how Bill S-216, with a transition clause, could supersede a settlement agreement signed on March 31. I would like to table the view that that settlement agreement was reached under medical duress. From my perspective as an independent analyst who has sat through many bankruptcy proceedings, that settlement shows that the bankruptcy process is broken and has failed in serving the needs of the disabled because it has turned a blind eye and disallowed a number of people to have access to justice in order to execute the laws that are currently in place. I will leave that to a question. I hope someone will ask me more on that point.
We believe that the bankruptcy court has failed the disabled in the Nortel case and that there are provisions there that led to our not being able to get the remedy that should otherwise have been accessible through litigation.
Finally, I believe there was a discussion about the transition clause yesterday. We are of the view that the current clause arguably does apply to Nortel, but the preference would be that the amendment be made, and the law firm that I am working with on behalf of the dissenting has submitted suggestions there as well.
With respect to this transitional provision, in my opinion — we look at litigation as well in the context of financial examination — I would be hard pressed to conclude that there would be any party that would be willing to litigate against the most vulnerable Canadians in Canada who are about to be pushed into poverty and homelessness. The reputational damage to any plaintiff that sought to do that would be weighed, if any organization were to consider such.
I would also note that as a result of the evidence of the wrongdoing and the withdrawal of the money and the assets of the health and welfare trust, anyone who were to litigate on the transition clause would certainly be dealing with the cross claim of the disabled, certainly the dissenting disabled, who would be expecting to have over $60 million returned to the health and welfare trust as a substitute for the transitional clause. There would be no financial benefit to litigate because we would bring the evidence before the courts again and perhaps with proper adjudication and litigation.
On that point, as far as we are concerned, Parliament is paramount in any case. The decision is in your hands, as Ms. Marin indicated. You have heard the testimony of the severe consequences. I am prepared to say that this is a debacle of the highest order that Canada has not witnessed. If this is to proceed, it will be an immense crisis for the disabled. I would not want to be the party who is making the decision that will cause people to commit suicide or suffer death as a result of the absence of medicines and certainly would not want to be part of a society that will impose poverty on people through no fault of their own, who were told that they had insurance.
Peter Burns, as an individual: Honourable senators, I am a disabled employee of Nortel. This morning I feel the weight of 375 people sitting on my shoulders. I hope you can feel them, too.
The long-term disabled employees of the insolvent Nortel need your help. Nortel sold me disability wage loss insurance, life insurance, pension accruals, drug plans, dental plans and medical benefits for me and my family. I am here because Nortel will not honour any of it.
I am able to function for only a few hours each day, and I will invest it with you today to speak about Bill S-216. I will return home later, in crushing pain, and hope for sleep.
I need to know that governments care about what happens to properly insured people and their families. We are now caught in a feeding frenzy of corporate bankruptcy greed. When I am fired in 42 days, I will lose my benefits and I will not be able to support myself or my dependents.
I am an engineer with two master's degrees, one in astrophysics and another in control systems engineering. I was awarded a patent while at Nortel, which saved them nearly $1 billion. Prior to Nortel, I worked in the nuclear power stations that light this room.
One day, a tumour was found on my spine. My scientific and engineering career came to an end. I have a spinal cord injury, brain injury, severe chronic pain, spasms, short-term memory loss and an auditory processing disorder. My rising medical costs exceed $30,000 each year.
To have clarity and defend myself here, for instance, I must reduce my medication and suffer the consequences later. Then comes the worst part: My loved ones are forced to watch.
It is in my nature as a scientist still to observe and understand. I have three key points from those observations. First, everyone understands the need, purpose and importance of insurance for our families. In 1990, I got cancer and I nearly went bankrupt. When I became cured and I joined Nortel, I took all the insurance I could find. I will also let you know that I got a mortgage at one point and I turned down long-term disability insurance on that mortgage because Nortel's plan was so good.
Second, this Nortel insolvency does not add up to me. There are contradictions, and here is what I learned: During bankruptcy protection, Nortel scooped $500 million in bonuses and incentives. When asked to return the $59 million missing from our trust, they said they were broke. Insolvency must be the wrong term for Nortel.
Nortel realizes that self-insurance is unsafe because now it provides real insurance for its working employees, but of course sees no obligation to us.
Third, the disabled like me live in bodies that are a nightmare. Can you imagine this nightmare? You worked for Nortel.
There is no doubt in my mind that a country is measured by the way it allows its citizens to be treated. The disabled are now bracing themselves for the worst. Some have already perished. Many of us will soon be alone, and not just a few will prepare for a quick end.
This insolvency is just about greed. This greed is allowed to impoverish and kill people who insured themselves properly. We also trust that the government will make sure that this bill is relevant to us and also make sure it will help us.
Please, imagine yourselves in our shoes this morning and help us live by passing Bill S-216.
Jim Derkson, Consultant, Council of Canadians with Disabilities: Thank you very much on behalf of CCD, the Council of Canadians with Disabilities, for inviting us to this table. We are an organization of organizations of people with disabilities. There are nine organizations in nine provinces, another in a territory, which have chapters throughout their regions of people with various kinds of disabilities. We also encompass six national organizations that, again, have chapters and member groups throughout the country. We are a human rights organization of persons with disabilities. As such, we have many concerns. Of these, poverty is one of our central concerns.
Senate committees do important work. Last year, the Standing Senate Committee on Social Affairs, Science and Technology, chaired by Senators Eggleton and Segal, gave us an excellent report on poverty with many exemplary recommendations. Many of these, in turn, were reflected in yesterday's report of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.
This committee today is addressing another important aspect of the systemic structure of persistent poverty among people with disabilities in Canada. It is a great concern to us that 5.6 million, or 32 per cent of Canadian workers, are without any long-term disability income benefits in the workplace according to the Canadian Life and Health Insurance Association. We think that represents an unacceptable risk of the impoverishment that often comes with disabilities.
It is also of great concern that 1.1 million, or 7 per cent of workers, have what is now demonstrated through the bankruptcy of Nortel to be an unsafe self-insured form of long-term disability income benefits. We appreciate that your committee has Bill S-216 to address this risk.
We are currently researching poverty among Canadians with disabilities. In a just released report by the Caledon Institute of Social Policy, we find, using data from 2006, that 27.1 per cent of people with severe disabilities lived on low incomes compared to 15.9 per cent of persons with mild or moderate disabilities and 10.7 per cent for those with no disabilities. Of course, these rates are a great deal higher than they would be for non-disabled persons.
Another report shows us that these low income levels are deceptively low because the low-income cut-offs used do not take into account the out-of-pocket cash value of non-insured disability-specific expenses, such as the costs of aids and devices for mobility, such as my wheelchair; communication, voice amplifiers, keyboard devices; learning; Braille output or speech access devices for computers; medications, as we have heard in testimony today, for psychological well-being or pain management; or services such as attendants, tutors, note takers and so on.
Nearly half a million working-age people with disabilities — 499,960 or 20.5 per cent of all those with disabilities in Canada — live on low household incomes. This demonstrates the association of disability and poverty.
Many of us in the Council of Canadians with Disabilities were disabled early in life. We grew up being used to our disability and often the poverty that went with it. For those who are disabled later in life, there is the trauma of the disability and then the new trauma of the poverty that comes when income sources like long-term disability are no longer available.
As I said, we are a human rights organization. As such, we have promoted and participated in the development of human rights instruments at the international, national and provincial levels.
I do not want to read black letter law; I do not intend to approach it that way. However, the spirit of these instruments carries with it a consensus about our values in society. Canada ratified the UN Convention on the Rights of Persons with Disabilities on March 11, 2010, this year. I will read from Article 1:
The purpose of the present Convention is to promote, protect and ensure the full and equal enjoyment of all human rights and fundamental freedoms by all persons with disabilities, and to promote respect for their inherent dignity.
Under "General obligations" in Article 4 we find the following:
a. To adopt all appropriate legislative, administrative and other measures for the implementation of the rights recognized in the present Convention.
This UN convention goes on to address adequate standard of living and social protection in Article 28. I would only add a brief quote from our own Charter of Rights and Freedoms. Section 15 reads:
(1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
It is this protection of the law that we would look to this committee for, especially in regard to breaking down another aspect of the comprehensive structuring of disability together with poverty in our society.
The Deputy Chair: Thank you, Mr. Derkson.
Senator Kochhar: Thank you all very much. You made compelling presentations.
They were compelling arguments, and I believe what Nortel did was not right. I, too, am disturbed with the plight of disabled Nortel employees. I am very sympathetic. I am prepared to support the bill if for one minute I could be convinced that this bill will have the desired results. I am convinced that this bill will do more damage than good for the Nortel disabled employees.
If this bill were to proceed and litigation resulted because of our actions, what would that mean for those waiting for LTD? What would happen to those other Nortel employees' pensions? How long could this be before the courts? Estimate the short or long range of it. If this issue were to go before the Supreme Court, as a witness testified earlier is a possibility, how long would that take? Could our actions create more uncertainty and more chaos for those who are involved?
Thinking about these long-term things, I think this bill will do more damage than good. That is my personal opinion.
The Chair: Does anyone want to reply?
Ms. Urquhart: First, the bill can have the amendment that was proposed, and Parliament is paramount. If the wording is clear, the paramountcy would not give opportunities for litigation. The issue would be who would do the litigation and against whom.
On the basis of the evidence that there has been a withdrawal of money from the health and welfare trust, and because of the consequences of the decisions to date, which are that this disabled group is going in poverty, it is my opinion, based on sitting in the courtroom and having dialogue with the various parties, that certainly the bondholders would not want to be litigating this for the sake of $59 million when there is evidence that it was wrongfully removed; but for the fact that we did not have the opportunity to litigate, that has not been proven. They would have to be prepared to take reputational damage, and I would say no financial institution on earth would want to litigate against 400 people who are being placed in poverty when the evidence is that the prior management of a corporation, which by the way has had eight executives take securities violation settlements in the United States and for which three executives have gone through the court system for criminal charges, and for which the withdrawal of the money relates to the trust, comingled the money. In my opinion, it would be unlikely that there would be litigation, and if there would, that it would be cross-litigation.
The next point I would make in that regard is that, as I noted, there is $1.1 billion likely in the Canadian estate. I cannot speak for the legal counsel, but based on my knowledge of how they think, they would be going to the court to seek that there be a carve-out of money in order for this matter to be properly executed. What we are dealing with now, without Bill S-216, is certain poverty — certain death in some cases. It would not be appropriate, I would think, to take the position that if parties were to litigate that the consequence of that would be that the others could not come to some financial resolution. The pension fund will wind up no matter what. It is already out of the hands of the estate, for which there is a settlement outside of Ontario of 65 cents on the dollar, and the average settlement for pensioners in Ontario is 90 cents on the dollar. The vast majority will be made whole. We are okay on the pension side.
We are then dealing with the severed workers. They are a small group, and for the most part they have had to get back to work. I do not see that they are an activist group.
In the case of the bondholders, again, no financial institution in its right mind would litigate against 400 suffering Canadians when it was their management team who caused the wrongful removal of the money.
Parliament is paramount, and in any case it is worth noting that the dissenting long-term disabled are filing an appeal as well with respect to the last health and welfare trust decision. There is litigation going on anyway. I would disagree with the conclusion that you have reached with respect to the litigation matters because I think this is of sufficient public opinion and awareness through media that it is what people speak about in the Tim Hortons coffee shops; people talk about those poor Nortel people and what the court system and the Nortel management have done, so it would be difficult for people to litigate and to hold their heads high regarding their objective.
Senator Eggleton: I want to pick up on that because I think that is an excellent response. No one who was here yesterday indicated what kind of cause for action there would be to take a matter to court. You can always say that you can take anything to court at any time, but there is no basis for cause of action. If this becomes law and with the amendment that I will propose in the transition clause, clause 8, will you sue the government for passing a law? They are not likely to get very far. There is no basis in law for them to do this. It is a flimsy, weak argument and excuse that we have heard. There is no basis for it.
The point that the witness is making, and maybe we can expand on it, is that we are talking about $100 million as an absolute maximum, and it could be as low as $68 million, to satisfy the claims that the company should be living up to that it promised its employees, and that is out of assets that are $6 billion or, as Ms. Urquhart says, $1.1 billion in the Canadian context. You could take this into a court and spend an awful lot of time. Some of those junk bondholders might well decide they want to take a bit of a haircut — they may even have insurance on their bonds — for the sake of the time factor, because the time will cost them an awful lot of money as well. As Ms. Urquhart says, these people want to stop something that is for 400 sick and disabled people, particularly when all sorts of countries in the world, all our major trading partners, do at least this, if not more. They do it already. Have their markets fallen apart? Were they taken to court and sued on it? No.
The Deputy Chair: I think that was more a reply to Senator Kochhar. I understand that you have good arguments but, in all fairness, we have three more witnesses. I would like to change the panel and then address the whole question. I thank our witnesses for coming here this morning. I hope that we will find a proper solution to this dramatic question.
[Translation]
I am pleased to welcome Mr. Jeremy Bell, who will speak first, as well as Mr. James Pierlot and Mr. Frank Swedlove. Welcome. Mr. Bell, you have the floor.
[English]
Jeremy Bell, Chief Actuary, Chief Investment Officer, Actuarial Services, HealthCare Benefit Trust: Thank you for inviting me. I am honoured to be here in front of your committee. I am the chief actuary of the HealthCare Benefit Trust. We are a health and welfare trust that resides in British Columbia. We are within the public sector and provide long-term disability benefits to everyone who works in the health care industry in British Columbia, as well as to some employees of the community and social services industry of British Columbia.
We are one of the largest plans, with about $1 billion in assets and liabilities. Almost all of that is LTD, long-term disability, assets and liabilities. I have 6,400 active claimants who exist inside of my plan for long-term disability right now. This is not the most popular place to be talking about being a self-funded plan right now, but we are distinct from the way Nortel did things in that we voluntarily apply pension funding rules to the way we administer our plan. We are funded by the government, so bankruptcy is a bit more of an abstract issue that could be affecting us; we are on different terms.
I also come with experience from the Canadian Institute of Actuaries. I am on the group insurance committee and just chaired the task force to respond to this same issue on the public policy issues for administrative services only or self-funded LTD plans. That is going through or has been approved and will be coming out soon.
In general, self-insurance makes sense, but it can be dangerous. I think everyone here would agree with the danger because we have seen how it shows up in real life. There are cost savings associated with self-insurance in certain circumstances, such as large employers where bankruptcy is remote, in particular. I would point out that you can provide flexibility in cost savings to yourselves by being self-insured. It does not make any sense whatsoever for the smallest types of employers. Only jumbo employers can handle the volatility associated with being self-insured for these sorts of benefits. In general, you would be pointing to organizations the size of Nortel or larger when you are talking about this.
My first comment on Bill S-216, and I think this has been referenced a few other times here, is that it is not enough in general to fix the system. There still can be issues associated with disability or with bankruptcies where there is not enough money that reaches that level or that tranche of creditor. Something more needs to happen afterwards, whether that be required funding along the lines of a pension system or mandating insurance. These are the same sorts of options as the Canadian Life and Health Insurance Association and the Canadian Institute of Actuaries have talked about. Something in one of those directions needs to happen as a follow-up to this. This is an interim step as opposed to a final step to be considered in the LTD system.
Given that, though, it is extremely important to note that Bill S-216 does not impair either one of those two things from happening further. This is an interim step where you take this step and either one of those two things could still happen extremely naturally as a follow on. Bill S-216 is a good stopgap measure, because either one of those two solutions requires provincial and federal coordination in order for those things to happen. I do not know whether anyone will go bankrupt in the next year or two, but it is important that, if you can have something in place that provides a certain level of protection between now and then, you can get there through the passing of Bill S-216.
Required funding is largely my preference, as opposed to mandating insurance, but either one is valid to protect the benefit security of people who are disabled. Required funding actually enhances that solution, sitting on top of that. The unfunded portion would be treated that way.
On the retroactive application in the Nortel case, you always have to pause for consideration on that. It is not a natural thing to have retroactive application of laws. In this instance, however, it does correct a subsidy that exists between the LTD beneficiaries and the existing creditors. From my understanding of the way that the trust was funded, it was not funded on a sound actuarial basis, as was required in the documents. This actually corrects a particular issue. In general, I do not think that retroactive application makes sense, but in this limited case I think it does make sense.
There are two things from yesterday's testimony that I wanted to touch upon. One is the credit market issues. I am a small but I guess not trivial player in the investment world. I am in charge of investing $400 million of bonds for us, and I am an external investment committee member to a large public sector plan in Alberta that is in charge of investing about $1 billion in bonds. I have just been appointed, because of investment expertise, to British Columbia's Municipal Investment Plan, which invests about $6 billion in bonds.
After hearing the discussion yesterday, I can say I was unmoved. I do not think there will be any implication of any real note associated with passing Bill S-216 on bond yields at any level of tranche sitting inside there. That is just my understanding and based on listening to that. There is academic evidence and all the rest, but my pulse on touching people in that industry is that it will not particularly matter because the dollar amounts are not significant enough to really do much.
Then the other point was that fewer people are covered by LTD plans. Whether that will be the case if this bill passes, I think that is a non-issue. Self-insured plans cover only absolutely jumbo employers. Jumbo employers will always be offering LTD plans, and this does not affect the cost for the smaller employers.
James Pierlot, Pension Lawyer and Consultant, as an individual: As senators are aware, beneficiaries of a long-term disability plan of an insolvent or bankrupt employer are generally unsecured creditors under the Bankruptcy and Insolvency Act and the CCAA. This lack of creditor protection can, and does, mean loss of benefits if there are insolvency and insufficient assets to provide the LTD benefits.
My expertise is primarily in the area of pension plans and pension funding, which are similar. Pension plans and LTD plans are similar in the sense that both are intended to provide income replacement to workers during periods when they can no longer engage in gainful employment, either due to old age or due to disability that could have arisen because of accident, illness or some workplace incident, which is often the case.
In the case of pension plans, there is a requirement to fund them. There is a rigorous federal and provincial regime for federally regulated companies. There is the Pension Benefits Standards Act, and each province, with the exception of Prince Edward Island, has legislation that requires funding of pension plans to a solvency standard, which means that if the pension plan winds up there will be enough money there to pay for the benefits, irrespective of the financial situation of the employer.
On the other hand, with LTD plans, there is no funding requirement. There are three kinds of plans. You can have administrative services only; you can have an insured plan; or you can have a plan backed by a fund. It is the employer's option to choose.
Given the similarity between these two kinds of plans, that both are there to provide income insurance to people who are unable to earn for themselves, it kind of begs the question: Why the double standard between the two kinds of pension plans? Mr. Bell touched on that in his testimony. This is an area that cries out for additional provincial regulation. It is a matter of provincial responsibility.
However, what faces us right now is a situation with a small number of extremely vulnerable people, and there is a solution here that provides a way of dealing with this situation and also of providing a level of security going forward for other employees who are in this situation.
Bill S-216 is a modest incremental change that is consistent with other recent changes to insolvency legislation that provided limited creditor protection for pension plan contributions and unpaid wages. As Mr. Bell has testified and others more competent in the area of finances than I have testified, the effect on an employer's ability to raise capital is expected to be minimal. This is intuitively obvious, given that out of the 30,000 employees that Nortel had at its peak in Canada, there are 400 disabled.
I support Bill S-216. It is an important first step to improving benefit security for Canada's most vulnerable workers. I have also made a submission to the committee that addresses some technical issues associated with the bill. They are really quite minimal; I would describe this bill as having good bones. It is clear to me what its intent is. I believe it is quite workable. The submissions I have made to the committee are in the spirit of moving it forward closer to something that it would look like in its final version.
Frank Swedlove, President, Canadian Life and Health Insurance Association: I am pleased to have the opportunity to be here today on behalf of the Canadian Life and Health Insurance Association to comment on Bill S-216.
[Translation]
The Canadian life and health insurance industry understands the critical importance of ensuring that employees on Long-term Disabilty or LTD are protected in the event of a plan sponsor's financial stress or insolvency. The life and health insurance industry has a longstanding role in providing safe and reliable LTD plans to Canadians.
In September, the CLHIA prepared a policy paper on Protecting Canadians' Long Term Disability Benefits in which we present our analysis and recommendations for addressing this important issue. We have provided copies of this paper to the Committee.
[English]
Senator Eggleton stated in his March 30, 2010, speech on the second reading of Bill S-216 that the purpose of this bill is to protect employees on long-term disability. The life and health insurance industry is 100 per cent supportive of this goal. History has shown that when an employer becomes insolvent and its LTD plan was uninsured, disabled employees can lose their benefits. This creates a severe financial and emotional burden on some of the most vulnerable people in society, since they often have few, if any, prospects of returning to work in the future.
We recognize that this bill attempts to address this issue. However, in many bankruptcies, there are insufficient funds available, and so such an approach may not ultimately protect those with underfunded LTD plans. Providing preferred status to those on LTD in the event of their employer's bankruptcy is an after-the-fact solution. It fundamentally relies on there being adequate funds available in bankruptcy to cover all future liabilities for those on LTD.
Currently in Canada there is little regulation on self-insured plans, which was the case with Nortel. There is no requirement that employers set aside adequate reserves to cover future liabilities arising from these plans. If reserves are set aside, there is no restriction on how those funds are invested. There is also no obligation to keep funds in trust to protect them from other creditors.
As a result, there are no protections in place to ensure there are adequate funds available to support ongoing LTD claims in the event of an employer's bankruptcy.
Broadly, there are two ways to address this issue. One approach is to require a plan sponsor to establish reserves under a separate disability fund, which is substantially the same actuarial requirement as insured plans. However, there is no regulatory structure in place to insure sufficient funds have been allocated. At the end of the day, there is no guarantee that sufficient funds will be available.
Alternatively, requiring that LTD plans be offered on an insured basis provides the maximum protection for disabled employees and ensures they are paid regardless of their plan's financial status. We believe that this is ultimately the best route forward to address the protection of those on LTD.
I will provide you with an overview of how insured plans work and the protections they afford to those on long-term disability. With insured plans, the risk of financial liability for providing the LTD benefits is transferred to the insurer. In order to meet expected future payment obligations, the insurer sets up a reserve fund that requires actuarial evaluation and reporting. As an added level of protection, insurers are required to hold a capital cushion to support their obligations. This capital can be drawn upon in the event that more workers than expected experience disabilities.
The key point is that the insurer's responsibility with respect to disability benefits continues even when the plan sponsor experiences financial difficulty or after the plan is terminated. Indeed, after a plan sponsor's bankruptcy, the insurer will continue to receive benefits for disabilities that began when the group policy was in force.
Government regulators monitor insurance companies to ensure they maintain sufficient assets to meet their liabilities. In the extremely unlikely case that a Canadian insurance company becomes insolvent, the relevant prudential regulator would step in to ensure an orderly windup or restructuring process with a minimal impact on policyholders. In such cases, the full asset base of the insurer is available to support disabled employees. In fact, disabled employees and other policyholders rank ahead of other creditors in such situations. Should the assets of the insurer be insufficient to cover all claims, long-term disabled employees would be covered by Assuris, which would continue to insure that payments of up to $2,000 per month or 85 per cent of the monthly benefit, whichever is greater, are made to such employees.
[Translation]
In order to protect those on LTD, it is crucial that there be funds available to support all ongoing disability liabilities even if the employer is bankrupt.
The most effective option to achieve the public policy objective of fully protecting individuals on LTD, with minimum administrative cost and complexity, is clearly to require that LTD plans be offered on an insured basis.
[English]
The life and health insurance industry's fulsome policy position on this issue is included in your package for your information.
Thank you for your time. I would be pleased to respond to any questions.
The Deputy Chair: I have a little clarification from Mr. Pierlot. We can make amendments at the committee level, but we can also do them when we report to the Senate.
Did you make some specific recommendations about possible amendments that would fine-tune this bill that we could introduce at the next stage? We would like the bill to be as perfect as possible, if perfection can be done by Parliament. I am wondering whether what you are proposing would not guarantee but certainly give some certainty around the administration of this in the future and also against any kind of legal action against the bill.
Mr. Pierlot: Thank you for the question. When I went through the bill, it was clear to me that the intent was to secure disability plan benefits, so the amendments that I suggested — and I am not saying they are perfect — are intended to assist the bill to achieve that end. I will give you several examples of what the amendments are focused on.
There are some small changes in there of a technical nature to accommodate multi-employer disability plans, because not all disability plans are single employer. There is another change to accommodate individuals who might be on a waiting period on a short-term disability plan, so that if they would become entitled to long-term disability benefits after the date of the bankruptcy, they would still get them. It is a technical transitional issue. There are a few points in there to address surplus assets and deficiencies and how those might be addressed.
I have also inserted into the bill the option, as suggested by Mr. Swedlove, that settling the whole insurance obligation via transfer to an insurance company could be quite an attractive option in some circumstances. That simply adds to the options of the bill.
With respect to the litigation issue that was discussed earlier, I have also inserted about 10 words at the end in clause 8 so that the bill would apply more clearly; I think the bill does apply, but I wanted to reduce any ambiguity that the bill might not apply to current proceedings under way.
That would probably adequately address the litigation issue. If you want me to speak more on the litigation issue, I am happy to do so.
The Deputy Chair: I do not want to take all the time, but I have a short question for Mr. Bell.
You mentioned that there were three different steps, and this could be the first step, but in fact as legislators we would have to start discussion with the provinces to ensure that in the future we do not have that kind of situation and that it can be corrected. Part of it would be to have the insured plan administered and funded on a regular basis through an insurance group, paying a premium, both employee and employer. The money would be there, whether the company goes down or not.
We have some homework to do after this bill. We would pass this bill, possibly with some of your amendments, and at the same time look to the future.
You come from B.C. and you deal with Alberta. Do you feel the provinces would be ready to go ahead in solving a problem that Canada seems to be afflicted with more than most of its partners?
Mr. Bell: I do not have my finger on the pulse of exactly what they would do. I would imagine that the provinces would be interested in talking about that. It fits with the discussion they have had on pensions over the last year and a bit. I do not think it would be a brand new discussion for them.
The Deputy Chair: I have made my point.
Senator Eggleton: Those are excellent points and answers. I want to explore this litigation issue a little more, because that is the issue that seems to keep coming up.
Mr. Pierlot, you are the lawyer here. The other two may by chance have law degrees, but you are the lawyer and the expert on this particular subject. I want to ask you about the possibilities of this getting tied up in litigation. We are hearing that maybe this will not serve people very well, particularly the Nortel people who are running out of time, that this could end up in the courts for a lengthy period of time and not serve them.
That is a key argument. I would like to hear more from you on that.
Mr. Pierlot: Thank you, senator. Part of my response will be to repeat some of the points you have heard before. This is not a legal statement but more a commonsensical statement: The optics of litigating in this particular circumstance are not particularly good. You have a very sympathetic group of people who would suffer as a consequence of the litigation. If I were a bondholder, I do not think I would want to go there.
The second point I want to make — Senator Eggleton alluded to this earlier — is that to litigate or to have any chance of success in a litigation, you need a cause of action. You need some basis in law to actually commence a cause of action, to sue someone. In this case, I struggle a little bit to figure out whom I would sue. If I were a person who did not like this bill, whom would I sue? Can I commence an action against the federal government for passing a piece of legislation that I do not like? I could if I can make some kind of an argument under the Charter or the Bill of Rights. You cannot really have a piece of legislation set aside unless there is some other principle of law that applies that you can appeal to with which that legislation conflicts.
In the case of the Charter, there has been a spotty record trying to litigate on economic rights. The courts have tended to shy away from granting economic rights under the Charter, so that would be a problematic area.
The other possibility would be to make some kind of an argument that clause 8 of the bill, which essentially makes the bill apply to current proceedings, is not applicable in the circumstances. I would put in some understanding that that was the intent. I added a bit of additional wording to deal with that situation.
I think that probably my main issue is not really seeing where the cause of action would lie.
The other point I would like to make is that, as was mentioned in earlier testimony, there is an issue outstanding that is currently being litigated that is being taken to the Court of Appeal on an agreement that was signed. If this bill were passed, it could potentially make that litigation moot and actually reduce the likelihood of future litigation.
Those are my comments on that. If there are further questions, I am happy to answer them.
Senator Eggleton: Could I also ask about the time factor? Litigation can go on for some period of time. Looking at a cost-benefit analysis, there is the amount of less than $100 million versus the $6 billion in global assets or the $1 billion in Canadian assets. It seems there has to be some cost-benefit analysis done by people before they decide to enter into a court case. Could you comment on that?
Mr. Pierlot: In this context, litigation is a commercial decision. People will do it if it makes business sense, and they will not do it if it does not make sense. It would take quite a bit of time for such an issue to be litigated. It has been a few years since I litigated, but the last time I did, it could take 12 to 18 months to get before the Superior Court on an issue. Maybe you could accelerate the schedule. Then if it goes to the Court of Appeal, it could take another year or two. It is not unusual for an action to take 7 to 10 years to get from the Superior Court to the Supreme Court.
I understand from previous testimony that the Canadian estate of Nortel is about $1 billion. Here, we are talking about maybe $60 million to $80 million at play. If I were a creditor, I would be concerned about the risk that that litigation could hold up my larger claim, because I would probably want to make sure that I received most of what I was entitled to. I would be concerned that I might be delayed in realizing my claim on the larger piece.
Senator Eggleton: Mr. Swedlove, you quite correctly point out that more needs to be done. In fact, you have all pointed out that more needs to be done here than just Bill S-216. However, Bill S-216 is intended as a first step, or a stopgap. It is actually the only way that we can deal with the current issue of Nortel and perhaps some other bankruptcy issues, or CCAA issues, over the next little while until something comes together, bearing in mind that something coming together could involve consultations with the federal government and the provinces. We all know that takes a long time. Can you see Bill S-216 in that light?
Mr. Swedlove: Yes, senator, I can see it in that light. Obviously, if there were an agreement amongst the provinces and the federal government that all LTDs were to be insured policies, I am not quite sure of any need for Bill S-216. You are correct to say it would be somewhat of a stopgap measure. We are aggressively bringing this issue to provinces. We have written to all the provinces, and we are following up discussions with ministers because we think this is of extreme importance. We are hoping that as the provinces look at their insurance legislation, which they are doing in any event as we establish a new uniform act for insurance, they will take this into account in the short term.
In the meantime, you are correct, senator, that this could act as a stopgap measure.
Senator Eggleton: If I may, I will ask one more question, Mr. Swedlove. According to Nortel employees, for years, when they had claims, a cheque would come from an insurance company. They said they were not aware of the fact that the company is actually self-insured. The insurance company was only there to administer, but they did not find this out for several years.
Do you feel there needs to be an obligation on the part of the company to tell people what the nature of the fund is and the nature of paying for their claims? Does the insurance company not feel abused that it is out front and appears to be the villain, in some cases, but in fact it is simply administering the fund? Can you comment on that?
Mr. Swedlove: This is a real issue — the lack of understanding as to what the employee is actually receiving. In our policy paper that we brought out in September, we noted the fact that in most cases people are not aware that it is an administrative services only arrangement as opposed to an insured policy.
Increasingly, it is becoming clear on cheques that are sent in the case of administrative services only policies that it is done by an insurance company acting on behalf of the employer. There are changes in that area. I agree that there can be some elements of confusion.
Alberta and British Columbia have laws that require disclosure that it is an administrative services only policy. However, sometimes an employee has been an employee for many years before becoming disabled, and that person may not be aware or remember receiving that kind of disclosure.
In our view, disclosure could be helpful, but it is insufficient to really deal with the problem.
Senator Eggleton: With respect to Mr. Pierlot's suggestion on the transition clause, clause 8, I intend to move an amendment at the appropriate time that will be the same as the one he is suggesting. I agree with you about any other possibilities or something that could be subsequently looked at. Time is of the essence for putting this into place.
[Translation]
The Deputy Chair: If there are no further questions, I would like to thank our witnesses and suspend proceedings for a couple of minutes. We will then move on to the clause-by-clause consideration of Bill S-216.
[English]
Senator Greene: I would like to make a motion. My motion is that we adjourn the meeting. I want to do that because we have heard some excellent testimony today with lots of possibilities for amending the legislation. I am not in a position to vote for the legislation as it is, and I do not know and do not understand the impact yet of all of the amendments that have been proposed. I would like to be able to do that. I think that moving to clause-by-clause study right now is premature, so I move to adjourn the meeting.
Senator Eggleton: I do have a comment. There has not been any amendment put to this point in time. I intend to put one simple amendment forward that I actually read out yesterday. I do not know why that should cause a problem. That is the only amendment I intend to move.
I do want to point out, though, as has been said so many times, and as these people said here today, time is running out for these people if we do not get this before Parliament before the Christmas break. It is not as if this is a new concept that needs more time for consideration. It has been around since the spring. I introduced it in March; it got second reading in June. It has been around a long time. I intend to put only this one small amendment. I would like us to proceed to deal with this matter in the sense of urgency for helping these people by the end of the year.
[Translation]
The Deputy Chair: Thank you, I just wanted clarification. Until when do you wish to adjourn?
[English]
Do you want to adjourn until the next meeting?
Senator Greene: That is at the call of the chair and the deputy chair.
The Deputy Chair: I am asking you.
Senator Greene: I certainly agree with Senator Eggleton that time is of the essence. I am equally convinced that the bill in its current form will not satisfy the time requirement because it must go to the House of Commons, and it could be an endless situation there. Perhaps as soon as possible — I am open to that.
The Deputy Chair: We have a regular meeting every week. Do you suggest that we have a special meeting to deal with that? I think the steering committee could contemplate that. As far as I am concerned, I would be willing to add a meeting next week, as early as possible, to deal with the amendments that were proposed by one of the witnesses and deal with this properly. We will have them in our hands, and they will be translated, and we could deal with that next week.
Senator Greene: Well, again, that is up to the steering committee. I would like to see what they have to say about that. I am not opposed to it. Let us put it that way.
The Deputy Chair: Okay. Is everyone agreed on the adjournment?
Senator Ogilvie: To be certain, Madam Chair, my understanding is, then, that the motion is to adjourn the meeting, the date to be determined and recommended by the steering committee; is that the motion?
The Deputy Chair: Yes.
Senator Greene: Yes.
Senator Ogilvie: Thank you.
Senator Harb: May I make a friendly amendment to that? Is it at all possible that Senator Eggleton's amendment be tabled so that at least you have it tabled? We are all acting in good faith here, and I think our intention is to find a resolution that is a win-win resolution. As such, it would be good at least to table it. If we receive it, that will allow the secretariat to prepare it as part of the document for when we come back.
We have not heard anything earth shattering telling us that what Senator Eggleton is proposing will cause troubles. If anything, from everything we have heard, there is a plus to it; there is no negative to it, notwithstanding the one comment we heard yesterday.
If we want to really act in good faith — and I do believe we are all acting in good faith — I recommend we receive it and table it. We do not have to vote.
The Deputy Chair: Like the other amendments?
Senator Harb: Just to receive it and table it so at least —
Senator Greene: Like the other amendments that our witnesses are proposing. Would that be okay?
The Deputy Chair: Are you willing to table your amendment?
Senator Eggleton: Yes, I will table the amendment. If you want to look at clause 8 of the bill, on the very last page, the wording you see there would stand. There is no change in terms of leaving the wording as it is, but an additional few words would be added.
After the word "section," instead of a period put a comma and then the following words: "and notwithstanding any Judgment or Order by any Court during those proceedings."
I will read it one more time. I have it here both in English and in French, and the clerk has a copy: "Notwithstanding any Judgment or Order by any Court during those proceedings."
The purpose of this is to give even greater certainty. When the bill was originally drafted and presented to the Senate, there had not been a judgment exercised by the court in dealing with the CCAA issue of the health and welfare trust fund. Since then, under the existing rules, they have put forward an order. While the original wording was intended to cover it, in any event this additional wording just adds a greater degree of certainty. It is the same wording that Mr. Pierlot also suggested here.
The only other thing I wish to say is that I am very concerned about adjournment of this because of the time factor. I cannot support adjournment. If that is the wish of the committee to do it, then so be it —
Senator Plett: It is not debatable.
Senator Eggleton: — but I would ask for a recorded vote.
Line Gravel, Clerk of the Committee: I will take a recorded vote, then.
Senator Harb: May I make a suggestion, colleague? This committee really works on a non-partisan basis. We try everything we can in order to provide accommodations. I presume even if your motion were to be dealt with now and we vote on it, it would take us until next week anyway in order to table it back in the Senate and all that.
What we are trying to do — and I presume my colleague is trying to do — is to take a bit of time in order to digest what the witnesses told us yesterday and today and, perhaps, to go back and see also what the administration may have in mind, given what they have heard, in the hope that we will be able to move forward with this. Of course we will have a chance to vote on it one way or another at the next meeting. Those few days will give us the opportunity to see if we can come up with some sort of positive resolution to it that will be taken to the Senate. It is my hope that, notwithstanding anything, on Tuesday we will be able to report back to the Senate, or at the meeting after the next meeting we will be able to report back to the Senate. It would be fantastic if we had something that is unanimous that we can all agree to, in the sense that we can have a situation where we can help those we want to help.
That is the only reason. It is quite obvious we will not win in the nays, notwithstanding that, but also at the same time, in the spirit of good cooperation and good faith, maybe that is what we should do.
Senator Eggleton: I appreciate your argument on this, but I have yet to hear any argument from those who are representing the government side with respect to how they feel on this issue in support of it.
The Deputy Chair: Senator Eggleton, I think we have heard your argument, and we know you are passionate about your bill.
Senator Eggleton: All right.
The Deputy Chair: I know it is not a debatable motion and we have to take into account at least the fact that we were flexible in terms of allowing Senator Harb also to express himself and Senator Greene giving some rationale. Further discussion would certainly not bring more support. What is important is to have the bill pass. If we can improve it, we will improve it. I will be sitting on the steering committee, and I will certainly press, according to Senator Greene, who is also with me, to have it as soon as possible, which would be at the next meeting of our committee next week, on Wednesday.
I have not seen the amendments that have been proposed, so as far as I am concerned in good faith a few more days would certainly be a — but it is your choice. If you want a recorded vote, I cannot prohibit it. However, I think Senator Moore would agree with me.
Senator Eggleton: Okay. I will take the recommendation of my colleagues and not call for a recorded vote, but I am still opposed to the adjournment.
The Deputy Chair: The meeting is adjourned.
(The committee adjourned.)