The Association of Canadian Pension Management’s top priority in 2023 is convincing Canada’s senate to amend or block the passage of Bill C-228, according to Ric Marrero, the association’s president and chief executive officer.
“Our first priority is to keep monitoring Bill C-228, which is now in the senate. Our members think it would cause a lot of disruption and the close of private sector [defined benefit] plans. We’re monitoring that and intend to make any interventions that are necessary with the senate.”
The private members bill would provide super-priority to DB pension plan members during plan windups or employer bankruptcies. In addition to the ACPM, a number of other organizations, including the Canadian Bankers Association, the Canadian Chamber of Commerce, the Canadian Manufacturers and Exporters and the Pension Investment Association of Canada, oppose the bill.
In November, representatives of those organizations expressed their concerns about the bill to the government’s standing committee on finance. Despite these efforts, the bill was passed with the support of all sitting MPs later that month. “What we found disappointing was the lack of due diligence on the part of the subcommittee, [which] didn’t really have much interest in hearing about alternatives to super-priority,” says Marrero.
In speaking to the parliamentary subcommittee, the ACPM’s three witnesses — Marrero; Andrea Boctor, partner and chair of the pensions and benefits group at Osler Hoskin Harcourt LLP; and Ross Dunlop, executive vice-president of Ellement Consulting Group — highlighted several concerns about the bill. “It requires that pension plans be 100 per cent funded,” says Marrero. “It doesn’t explain how plans in Ontario and in other provinces that only have to be 85 per cent funded would be treated.”
While that experience left Marrero disappointed, he wasn’t surprised. “Elected officials tend to politicize things — Bill C-228 is a great example of that. All parties want to be the party to solve pensions. It’s a wonderful headline.”
He has more confidence in the unelected senate. At the end of January, the ACPM intends to speak to the upper house’s subcommittee. “The problem right now is that the text of the bill is so poorly drafted, it’s impossible to understand how it would apply,” says Marrero. “We think the senate should either amend it dramatically or send it back to the house for reconsideration.”
Should it pass in its current form, he believes it will cause lasting problems for Canada’s private DB pensions. “Lawyers will spend a lot of time hashing it out in court. . . . It’s not because the ACPM is against plan security — absolutely not. We are against bad legislation — and this is pretty bad.”