The federal NDP kicked off a weekend caucus strategy session in Hamilton with a rally to argue for federal legislation to protect pensioners in bankruptcy proceedings.
Hamilton Mountain MP Scott Duvall, the New Democrats’ pension critic, told a crowd at the United Steelworkers’ Hall on Barton Street East Friday that he will introduce a private member’s bill this fall to “protect workers’ pensions and benefits, and force companies to provide termination or severance pay, before paying secured creditors.”
The issue has been a long simmering one with labour unions and was a major area of contention during the nearly three-year, court-supervised restructuring of U.S. Steel Canada. The company emerged from creditor protection June 30 with a new owner – Bedrock Industries – and an old name, Stelco.
But pensioners were smarting. The court allowed the company to suspend health benefit payments for about a year and a half while the company was under creditor protection through the Companies’ Creditors and Arrangement Act. (CCAA).
Those benefits, for the most part, have resumed with the newly restructured company. But pensioners are worried that a funding scheme to keep the pension plan solvent will eventually falter. Among other things, it calls for unused Stelco land to be cleaned up and sold to be used as a revenue source to cover pension obligations in the future.
Duvall, along with departing NDP leader Tom Mulcair, said another example of how the legislation is unfair to workers is with Sears Canada. The company is in creditor protection and its workers are facing a potential reduction in their pensions.
“This needs to be about fairness for workers. We will continue to fight for a Canada that works for everyone and will make sure corporations and multinationals can’t steal the pensions their workers and retirees have earned,” said Duvall.
The NDP says the current legislation allows money that should go to workers’ pensions to be given to secured creditors instead. And in many cases, the secured creditor is the insolvent or creditor-protected firm’s parent company.
Stelco’s largest secured creditor was U.S. Steel in the United States. The $500 million restructuring deal saw the American company receive $130 million.
The Duvall bill would require pension plans to be 100 per cent funded before secured creditors are paid. As well, companies would not be allowed to suspend retirement benefits in court-supervised restructurings, which happened with U.S. Steel Canada.