Sears Mess Shows How Little Liberals Think of Working Canadians

Ken Neumann Op-Ed
Published by the Huffington Post

Canadians are justifiably appalled by the plight of thousands of employees and pensioners who are being victimized by the bankruptcy protection manoeuvring of Sears Canada. Thousands have been laid off and even more stand to lose the severance, benefits and pensions that they earned, while Sears pays millions in bonuses to executives and managers.

Sadly, however, Canadians should not be surprised by the Sears scandal and the scope of the devastation that so many will suffer. Successive Liberal and Conservative federal governments have allowed such scenarios to occur by repeatedly rejecting legislative reforms that would protect employees, pensioners and their families.

Members and retirees of my union, the United Steelworkers, know all too well the pain and anguish caused by unfair bankruptcy and insolvency laws that Liberal and Conservative governments have steadfastly maintained for decades.

Some of the most recent victims include more than 20,000 U.S. Steel Canada retirees whose crucial health benefits were eliminated and thousands of former employees and retirees of Cliffs Natural Resources who lost their health benefits and suffered deep cuts to pensions they earned over a lifetime of work.

Imagine a terminally ill pensioner who loses health benefits overnight and is forced to choose between buying food or potentially life-saving medication. Or retirees whose pensions were abruptly cut by $1,000 a month because their governments — quite intentionally — ensure they remain at the back of the queue in corporate insolvency cases, while the claims of big banks and wealthy investors come first.

Even the Supreme Court of Canada has noted that successive governments have made a deliberate choice to favour creditors such as banks and major investors over vulnerable pensioners and employees.

In a case that my union fought in the courts for several years, the Supreme Court sympathized with pensioners from the insolvent Toronto operations of multinational corporation Indalex. However, in its 2013 ruling, the Supreme Court determined that, under the terms of existing legislation, cuts to the Indalex retirees' pensions were lawful.

"There are good reasons for giving special protection to members of pension plans in insolvency proceedings," Supreme Court justices stated. But Parliament "chose not to" enact legislation to protect pensioners, they said.

It was also noted that during the Liberal government regime of the early- and mid-2000s, Liberal-dominated committees in the House of Commons and in the Senate took turns studying reforms to bankruptcy and insolvency legislation. In both cases, the Liberals opted not to stand up for the interests of workers and pensioners.

Canadian workers and pensioners want more than hollow words of sympathy when their money is diverted from their pensions and benefits in favour of banks and wealthy investors.

But after being turfed from office, the same Liberals changed their tune. Then-Liberal leader Michael Ignatieff vowed that his party, if re-elected, would change the law to protect workers and pensioners and ensure they would no longer be "left at the back of queue in insolvency and bankruptcy."

"It's not right. We agree with you," Ignatieff famously told thousands of laid-off Nortel workers in 2009. Following the Liberals' return to power in 2015, that promise appears to have been all but forgotten.

So it is particularly galling to hear the current Liberal government express sympathy for "the difficult circumstances" now faced by Sears workers and retirees. At least one Liberal MP has unabashedly chastised Sears and publicly called on the company to "do the right thing" for pensioners.

Of course, there is no acknowledgement from the Liberal government that, with its overwhelming majority in Parliament, it actually could "do the right thing" by enacting legislative reforms to better protect Canadians' wages, pensions and benefits.

Experts in bankruptcy and restructuring law have put forward practical and realistic legislative reforms that would protect employees and pensioners, without causing economic upheaval.

For example, amending the Bankruptcy and Insolvency Act (BIA) to give priority to severance packages, retirement benefits and money owed to pension plans "would be the easiest thing in the world" and would not result in undue harm to the business climate, says one expert on pension and benefit issues in insolvency cases.

Ultimately, reforming laws such as the BIA and the Companies' Creditor Arrangement Act is primarily a political choice. In other words, whose interests does the government of the day truly want to serve? That is the question facing the current Liberal government.

Canadian workers and pensioners want more than hollow words of sympathy when their money is diverted from their pensions and benefits in favour of banks and wealthy investors.

Canadians rightfully expect their government to "do the right thing."

View the op-ed in the Huffington Post

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