As part of the federal Conservative Party’s platform for the coming election, Leader Erin O’Toole is proposing a plan to secure pensions for Canadian workers.
“Canadian workers who have paid into a pension plan on every paycheque should be able to rely on it being there when they retire,” he said in a press release. “But far too often, we have seen workers, through no fault of their own, forced to take big cuts to their pensions when the company they worked for goes bankrupt. As Prime Minister, I will stand up for workers and introduce the necessary measures to protect hard-earned pensions.”
In addition to putting pension plan members first when the company sponsoring the plan goes bankrupt, the party is also promising to prevent executives from paying themselves bonuses while managing a company going through restructuring unless the pension plan is fully funded. As well, its platform includes requiring companies to be more transparent with their employees by mandating they report the funding status of their pension plans and no longer forcing underfunded pension plans to be converted to annuities.
The New Democratic Party is also focusing on pension plans with a promise to ensure members are at the front of the line when a company goes bankrupt — making sure unfunded pension liabilities owed to workers, and employees’ severance pay, are the top priority for repayment.
The party also said it would stop companies from paying out dividends and bonuses when pensions are under-funded and would create a mandatory, industry-financed pension insurance program.
“The federal government has a critical role to play in protecting defined benefit pensions across the country,” noted the NDP’s platform. “The Liberal and Conservatives’ openness to target-benefit plans in the public sector, which don’t guarantee stable benefits for retirees, puts defined benefit [plans] at risk for all Canadians — and we will immediately put a stop to this chipping away of retirement security.”
After making similar promises in its 2019 budget, the federal Liberal Party said in September 2019 that it would reform the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to improve retirement security and protect pension plans. So far, the Liberals’ 2021 platform doesn’t refer to pension plans.
However, Bill C-253, also titled the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans), was introduced in November 2020 by Bloc Quebequois member of parliament Marilène Gill. On May 12, 2021, a 189 to 139 vote in the House of Commons approved the general outline of its contents. During the vote, the draft of the bill received the support of all sitting members of opposition as well as 10 Liberal MPs.
If passed, Bill C-253, would force super-priority on Canadian pension plan members in the event of bankruptcy or plan windups.