June 5, 2003

BQ

Jocelyne Girard-Bujold

Bloc Québécois

Ms. Jocelyne Girard-Bujold (Jonquière, BQ)

Mr. Speaker, I want to congratulate my hon. colleague from the NDP for her excellent speech.

Sometimes the truth can be shocking and the hon. member spoke the truth that really needed to be brought out. All of the issues she mentioned are being talked about by the general public, and we should open up the debate so the ordinary people can make themselves heard.

How do the hon. members from the Alliance feel about this? The hon. members on the benches of power are quiet; that is certainly a surprise. When you hear someone crying wolf, it is not always wise to trust them.

I would like to ask the hon. member to elaborate on her claims with regard to the price of gasoline. I am in complete agreement with her because, in Quebec, 99% of the gasoline tax is invested in highway improvements. The federal tax includes an excise tax of 10¢ and a special tax of 1.5¢ to pay down the deficit, and there is also the GST, not one cent of which goes toward improving the highway system, even though the Federation of Canadian Municipalities has asked that $15 billion be invested over the next 10 years.

I would like to hear her comments on this.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
NDP

Bev Desjarlais

New Democratic Party

Mrs. Bev Desjarlais

Mr. Speaker, once again to emphasize, Manitobans showed that very strongly on Tuesday. They support a government that ensures services are provided. I think Canadians overall do not mind paying their fair share. If the federal government was providing services for Canadians like it did once upon a time, a long time ago, we would not have people upset about paying some taxes. It is when the services are not provided.

The government failed for years to put enough dollars into health care, and it continues to fail to put enough dollars into infrastructure. The Federation of Canadian Municipalities has stated that it wants to see more dollars go into that. I know it is a leadership thing, and we have heard to promises that they will get all this infrastructure money. They have a guarantee from one of the leadership candidates, and not so much of a guarantee from another one.

With all the promises being made however, the person making the really huge promises is the former finance minister. He was the one who said that they would not get any of the money, that he wanted it. He wanted to have a surplus in the EI fund. He wanted to use the CPP pension dollars. He wanted to pay down the debt. He did not want to give anything back to Canadians. As a result we have a crisis in infrastructure throughout the nation, certainly in first nation communities. Whoever become the prime minister, It will take an awful lot to fix the mess.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
BQ

Mario Laframboise

Bloc Québécois

Mr. Mario Laframboise (Argenteuil—Papineau—Mirabel, BQ)

Mr. Speaker, I am pleased to speak to this bill on lobbyists. The first question that comes to mind is how it is that we have a bill on lobbyists now, in 2003.

If we have such a bill, it is because the lobbyists have become so important to the way this Parliament operates that we now need to regulate them. That is the problem.

If they have become so important, it is because the MPs, the ministers, the decision-makers, and particularly the MPs of the party in power for the past 40 years have not played their proper role. They have avoided discussing issues and have not defended their constituents, the consumers against big business, but have let private individuals do it for them instead. That is the problem.

The problem is that we are here today discussing lobbyist legislation on which, not having much choice, the Bloc Quebecois will probably vote yea. But it is still an unfortunate situation. Whom do lobbyists defend? The ordinary consumer, the public, the majority of the people in our ridings? No. Most lobbyists are looking out for big business, and that is the problem.

I will give just a few examples, starting with the banks. I am an MP of the class of 2000, in other words the last general election. The first matters raised in this House that I found of interest related to credit card interest.

From time to time, MPs introduce private members' bills or motions in an attempt to bring the banks back into line, as they keep on making taxpayers' lives miserable with stupendously high interest rates on credit cards.

In the three years I have been here, interest rates on department store credit cards has gone up 1% a year. During that same time, MPs here in this House have been tearing out their hair and commenting “Look, this makes no sense whatsoever”. That is true. The same thing goes for the major banks, with their 19% credit charges as I speak. While the interest rate in Canada has never been as low, the banks and department stores have again managed to convince the members, the government, that they still need to charge exorbitant interest rates.

There are discussions and debates in the House about this. Why do we never manage to vote on these motions and bills? It is because lobbyists make representations to the ministers and government members so that in the end it is impossible to regulate credit card interest rates.

I cannot believe it. It is really something. For the past 40 years, the members have relinquished their powers to lobbyists. They prefer to see people working for them. I understand my hon. colleague from Jonquière. The hon. member has been here for several years, I believe.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
BQ

Jocelyne Girard-Bujold

Bloc Québécois

Mrs. Jocelyne Girard-Bujold

Six years.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
BQ

Mario Laframboise

Bloc Québécois

Mr. Mario Laframboise

Six years now. In this Parliament, we have met all kinds of people who are not members, but they are here. They often have titles such as government affairs officer; they are responsible for an enterprise related to governmental affairs. They dare not even call themselves lobbyists; they dare not even say it. They have titles and business cards, and they buzz around Parliament.

That is the problem: these people have been allowed to influence power. Often, since they have budgets, they can make investments—as they would see it—in the campaign funds of members and, more often than not, these are government members. They are not rushing to invest in the opposition parties. That is the reality.

What can the public conclude? It can conclude that, today, the House of Commons is discussing lobbyist legislation. However, in the meantime, in real life, credit card interest rates have never been higher. I can guarantee that, next year, the interest rates of credit cards issued by most major stores and banks will increase another 1%. When the House of Commons starts making too much noise and talking about trying to change credit card interest rates, the major banks come out with lower interest credit cards.

Except that they will offer it to their best clients, who, for the most part, do not have a monthly balance on their credit card. That is how they do it. They would never reduce the rate for their clients who are unable to make ends meet and have to carry over a balance every month. Those are the people who see their credit card interest rate increase by 1% a year. The same thing will happen next year despite the fact that interest rates and the Bank of Canada rate have never been lower. That is the harsh reality.

What is the use in having MPs if we allow lobbyists for banks and major store chains to dictate what direction to take and maintain, in Quebec and in the rest of Canada, such high interest rates on credit cards?

I will give another example; that of oil companies. My colleague gave this example earlier. I hear the Canadian Alliance members saying that there is no collusion and that this was analyzed by the committee. The reality is that oil companies never made more money than during the last crisis when they increased the price of gas as much as they did.

If there had not been enough raw materials and if it had been so difficult, what would they have done to keep clients? They would have tried to lower the prices and show that they were having difficulties, but they did the opposite. They increased the price and have never made more money than in the past six months.

Some might try to say there is no collusion, but that is not true. A committee analyzed the situation. The oil companies' numbers come out every three months. The dividends are indicated and we can read them in all the papers. People are not naive. Oil companies have made more money than ever since the price of gas went up.

Today, in this House, we are being told there is no collusion, that nothing is going on, and that the competition commissioner need not intervene. The public is not naive. Pardon the expression, but people are not stupid. They realize that somewhere, something is not right. The oil companies have made more money than ever in the past two years, since they increased the price of gas. It is always the same thing. They all increase the price at the same time, almost to the minute.

Meanwhile, we members of Parliament want to debate in committee, regardless of the name this committee may be given; what the public wants is for us to discuss the issue of rising gasoline prices, and the fact that oil and gas companies have never made so much money at its expense. That is what it wants us to discuss.

Because of the lobbyists, the government does not dare do so. The commissioner of competition does not have the necessary powers, and the committee is unable to render a decision. We are told that there is no collusion. There is always an excuse. In the mean time, we are not resolving the real problem, the one the public has with oil prices which are excessively high given the profits the oil and gas companies are making.

There should be a way in this society to be reasonable and to prevent multinationals from having control over everything at the expense of the poor consumer.

Once again, because of lobbies, a bill is being introduced today to try and counterbalance the work of lobbyists, but that will not resolve the issue of rising oil prices and humongous profits made by oil and gas companies. That is the reality.

I will take another recent example, that of shipowners. At present, there is pilotage all along the St. Lawrence River, as there has been for hundreds of years. There is pilotage on most major seaways giving access to the heartland, and there are specialized pilots. There is pilotage on the Mississippi, in the U.S., and on other rivers in Europe.

When a seaway goes inland, pilotage is mandatory, to protect the environment. People have been trained to pilot through specific areas. We have pilots associations for the stretches between the Escoumins and Quebec City, Quebec City and Montreal, Montreal and the Great Lakes, and around the Great Lakes. These are all people who have been trained to prevent a disaster. If an oil tanker were to run aground in the St. Lawrence River, with tidal water moving toward Quebec City and the ebb and flow making water flow past Quebec City as far as Trois-Rivières, the entire river would be contaminated. That is why we have pilots.

They have existed for 150 years. This was decided back then. These days, there is the shipowners' lobby. Just last week, it got an opposition member to move a motion in the Standing Committee on Transport to abolish pilotage for Canadian ships. Canadian shipowners, clearly, have decided that they had better help themselves before the future Prime Minister arrives on the scene, since the member for LaSalle—Émard is himself a shipowner. They tried to solve the problem. It makes no sense. For ten years, we have been trying to get risk assessments. They have yet to be done. Transport Canada is still in the process of doing risk assessment studies for the whole St. Lawrence seaway, all the way up to the Great Lakes. They are still not finished.

In the meantime, because there are political deadlines looming—a new Prime Minister who will surely be chosen in the fall—they want to solve the shipowners' problem. Once again, the shipowners' lobby is trying to get its idea through. We have seen them prowling the halls for about a month now; they have probably visited the office of every member. They arrive with their cards that say government liaison officer for the shipowners' association and they try to pressure us.

The problem is that today, we are debating a bill on lobbyists, when this lobbying should have been done, and should be done by every member in this House. We are here to represent the public. Lobbyists were not elected to defend the interests of constituents. They are paid to defend private interests. That is reality for lobbyists. Politicians are here to defend the interests of their constituents, and that is what we must do. Today, we need to be much stricter with lobbyists and try to regulate them as much as possible to prevent Parliament from becoming a useless institution.

I have mentioned three examples. It is not true that the House acted on the issue of interest rates on credit cards. That is wrong; the House of Commons has never done anything for consumers with respect to credit card interest rates. That is the case, nor will we ever do anything either. As long as there are lobbyists, this will be a problem.

With respect to the oil companies, we in this House will never succeed in regulating gasoline price increases or the astounding increases in oil company profits. You will never do it; the Liberal members will never do it. Why not? Because the lobbyists come and try to explain that it is much more profitable to support them rather than regulate their activities.

It is the same thing for the shipowners. The abolition of pilotage on the St. Lawrence will probably happen one day. I hope it never does. But then you see the strength of the lobbyists and the way they want to act quickly before the new Liberal Party leader, the member for LaSalle—Émard, takes over. Once more, I think all the people who live along the St. Lawrence River will be the ones to pay the price. One day, they will be victims of a catastrophe, because Parliament—the hon. members in this House—did not do what they should. They caved in to pressure from lobbyists and eventually there will be a catastrophe on the St. Lawrence.

It is hard for people who love their work. I hope that all of us, in this House, love what we do; we love politics. It is hard to realize that we are limited, but it is even more difficult to realize that we are limiting ourselves. We let the lobbyists in. We let them do their work, defending private interests against the common good of the people. That is what we are doing. We are all guilty.

Today, we are trying to make amendments, and the amendments proposed by the Bloc have been rejected because they are too strict, that this should not be permitted, that they must not tsay what needs watching, that they must not explain who they have met with, and so on. We can never be strict enough with lobbyists because they are only in it for the money. They are paid to do their work. And the better they do it, the higher their salaries. That is reality for a lobbyist.

It will not change. We are the only ones who can set limits to tell them that, if they are that good, they can tell us who they have been meeting with, and why. And we can tell the people that such and such a company uses the top lobbyists who defend certain kinds of interests.

Once again, the Bloc Quebecois will support this since it is a bit better than what we had before. I hope that, one day, we will be able to regulate, on our own and without the involvement of lobbies, consumer credit card interest rates, which have increased by 1% per year over the past three years, although the interest rate set by the Bank of Canada has never been lower. That is the reality.

I hope too that we will be able to regulate the astronomical profits being made by the oil and gas companies at the expense of consumers. This can be called collusion or competition. No matter what you call it, what people, drivers, taxi drivers and truckers are going through is not human: they see the oil and gas companies getting rich while their income is decreasing. Something must be done.

The same is true of the shipowners. An effort must be made to control this powerful lobby. Pilotage on the St. Lawrence is an institution that has existed for more than 150 years. Some people are trying to protect the environment and are acting as the public's eyes and ears to avoid an environmental catastrophe. Once again, we will not let the shipowners resort to powerful lobbying to try to destroy this tradition of safety, on behalf of an industry that would like to resolve its problem before the hon. member for LaSalle—Émard becomes the leader of the Liberal Party of Canada and the next Prime Minister.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
LIB

Serge Marcil

Liberal

Mr. Serge Marcil (Parliamentary Secretary to the Minister of Industry, Lib.)

Mr. Speaker, it is rather unfortunate that my colleague across the way has focussed solely on lobbyists who represent the private sector.

Bill C-15 is not only about lobbyists representing the private sector. As well as these who are seeking to meet members, ministers, public servants, there are also lobbyists representing not for profit organizations, public bodies and community groups. There are plenty, and I often have them come to my office. I often have visits from them.

They are merely trying to make a point, and goodness knows the hon. member has belaboured it. In all of the speeches I have heard, there were comments about all manner of things that had nothing to do with the main subject at hand, which is the amendment made to Bill C-15.

I would like to see the member also address the fact that Bill C-15 obliges people to file returns. Legislation on lobbyists is not there to stop lobbying. It is there rather to encourage that activity and provide a framework for it, so that there will be greater transparency and so that the public will know who they are and what they are doing. That is the purpose of this bill.

As a result, it concerns the entire community, all public and parapublic bodies, all NGOs, and there are plenty of them. I will give one example. Sainte-Cécile cathedral in my riding was burned down. How many people do you suppose wanted to meet with the people at Canadian Heritage? They want to meet the minister or the senior officials to discuss their problem. They are not coming here to make money, but to look for help. As a result, they want to have the opportunity to meet with decision-makers. We want to know who these lobbyists are and what positions they held previously. That is what the proposed amendment will clarify.

So, Bill C-15, which has existed for many years, goes even further than the lobbying legislation which exists in Quebec and which was introduced only last year. Quebec did not have lobbying legislation until then. The province was forced to pass legislation last year, or two years ago, because of scandals that surfaced under the former PQ government that was in power at the time. Quebec understood that there needed to be rules for people, especially former employees who worked in offices and who were setting up companies and lobbying. That is what the Government of Quebec learned, and so it drafted legislation to regulate lobbying.

The bill before us amends an act that has been around for years and, in fact, promotes access to officials, politicians or ministers. The bill on a code of conduct for members, for parliamentarians also further clarifies the role of members of Parliament. Contrary to what my colleague opposite says, the role of members of Parliament is not to lobby.

Members are elected to study legislation, to sit in the House and to vote on bills. Our main role is not to lobby for a business or an organization in our riding. That is not the basic role of a parliamentarian. We are here to draft, debate and vote on legislation.

It would be nice if the member opposite could at least have a more open mind and discuss some of the benefits of the act to amend the Lobbyists Registration Act in Canada in his speech.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
BQ

Mario Laframboise

Bloc Québécois

Mr. Mario Laframboise

Mr. Speaker, first I want to thank the hon. parliamentary secretary for explaining his role as a member, because that is not my role. He is here to make the public understand the Liberal government's policy. My role is to defend the public's interests and present them to the government. That is the difference, and it is considerable.

To this end, with regard to the whole lobbying issue, it is not community organizations that make requests that are, frequently, written about in all the papers and that become common knowledge. It is well known why the representatives of a church that burnt down have come to Ottawa: they are asking for funds to re-build the church. Everyone knows this.

When it comes to the banks, oil and gas companies and shipping companies, we want to know what they are doing behind our backs with the members and the ministers, at the public's expense. That is what we want to know.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
BQ

Marcel Gagnon

Bloc Québécois

Mr. Marcel Gagnon (Champlain, BQ)

Mr. Speaker, I savoured the last speech, because it hit the nail on the head. We saw the reaction of members opposite. Hitting the nail on the head produced this kind of reaction.

I would like my hon. colleague to go a little further. We referred to shipowners working to take away the St. Lawrence River pilots. I know that the hon. member is anticipating my question, and I am anxious to hear his answer. At present, ships sailing up the St. Lawrence River are for the most part refused entry into the U.S. These are poison ships. Do you know that these ships are a threat? They are not inspected upon entering the river. They are a threat but we have an insurance policy in that we have pilots who are familiar with the St. Lawrence River.

Imagine what is going to happen with these ships hauling dangerous cargo if these pilots who know the river so well are taken away. The St. Lawrence River is not an ocean. It runs down the middle of Quebec. It is the heart of Quebec. Let us consider for a moment what would happen if a ship sank on Lake Saint-Pierre. All of Quebec would be devastated for years to come.

Wanting to interfere with that is bad lobbying. I also want the hon. member to tell me what exactly he likes in the firearms lobby, for example.

I have a problem with Lake Saint-Pierre. We want it to be decontaminated, because there are 300,000 shells in it right now. This apparently happened just like that. Of these 300,000 shells, 10,000 are unexploded and continue to pose a threat at the bottom of the lake.

That is not all. The firearms lobby is so powerful that it is considering setting up north of La Tuque. Mr. Speaker, you who have practised sports have known Maurice Richard as I did. At the end of the hockey season, this great athlete used to say, “I am going north of La Tuque to enjoy the peace and quiet”. Now they want to have weapon experimentation ranges in that area. The lobby is pushing for that, arguing that it will protect the environment.

I would like my hon. colleague from Argenteuil—Papineau—Labelle to elaborate on these two aspects.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
BQ

Mario Laframboise

Bloc Québécois

Mr. Mario Laframboise

Mr. Speaker, I thank the hon. member for Champlain for his question.

First, when I said that the risk analysis of pilotage on the St. Lawrence was not complete, that is the truth. It is not finished. Personally, I believe pilotage should not be abolished. In fact, the pilots should be given more power so they will be able to inspect the infamous poison ships that cross the oceans and come into our waters, and that Transport Canada does not have time to inspect, because of the lack of personnel. That is the reality.

We are very lucky to have people whose duty it is to ride on every ship that enters the St. Lawrence. Rather than dispensing with their services, why not make better use of them by giving them more responsibilities, so that they would act as even better eyes and ears on the river?

And as for arms, we in this Parliament are used to mixed messages, and that is the truth. While someone is announcing a decontamination project, someone else is announcing a new firing range in the same region. That is how the Liberal government operates. It is hard to swallow.

I can understand that this was difficult to swallow for the parliamentary secretary, who is trying to pass measures to regulate lobbyists. I repeat: for all those consumers who pay ridiculously high interest rates on their credit cards, there will never be enough regulations governing what lobbyists do. For all those citizens who are paying too much at the gas pumps while the oil companies are getting richer at their expense, there will never be enough regulations governing what lobbyists do. For those who might make the St. Lawrence River dangerous for all those living near its banks, there will never be enough regulations governing what lobbyists do to prevent shipowners from having another emergency amendment passed, while waiting for the arrival of the next leader of the Liberal Party of Canada, a shipowner by trade.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
NDP

Pat Martin

New Democratic Party

Mr. Pat Martin (Winnipeg Centre, NDP)

Mr. Speaker, I am pleased to have the opportunity to join in the debate on Bill C-15. I want to thank other members for their contributions to the debate today. I found them helpful and I learned a great deal.

I want to thank my colleague from Churchill for her energetic and enthusiastic intervention. She touched on a great number of concerns that ordinary Canadians have about lobbyists particularly about having undue influence in our Canadian political system. That is the way I could summarize the apprehensions many Canadians feel.

Canadians feel that there could be a trend and a tendency for lobbyists to have such influence in our Canadian political structure so as to undermine democracy. Many people look at the United States in a critical light and recognize that lobbyists play an incredibly important role on Capital Hill. Most Canadians do not have an appetite to see us going in that direction.

In the American political structure with more independent free votes, more effort is made to ensure that congressmen and senators vote in a certain way because they more or less have to earn the votes one by one instead of along party lines. Many people believe Washington is driven by lobbyists and feel they play an incredibly influential role in how it operates. In that country, a lobbyist is the highest on the pecking order in the sphere of political strength. Canadians do not want to see us going down that road, and that is why they welcome a firm and clear regulatory regime within which lobbyists may operate.

We all recognize the fact that lobbyists play a legitimate role in bringing specific issues to the attention of members of Parliament. The only lobbyists I welcome into my office as a rule are those from the non-profit sector. However, lobbyists do come to Parliament Hill with the legitimate purpose of trying to make members of Parliament more aware of issues of their concern. I think of the effective and legitimate annual lobby of firefighters. There is no self-interest involved in that lobby. It is a matter of health and safety issues et cetera. Many non-profit organizations do knock on our doors on a regular basis.

The lobbyists we need to regulate are those representing personal gain, self-interest, profit et cetera. We do not want our decision-makers influenced in an undue way by the overwhelming influence of these people.

I would like to quote from Democracy Watch, an organization that has been very diligent in following these matters. The coordinator of Democracy Watch, Duff Conacher, commented on the recent Senate committee on rules and procedures as it dealt with the Lobbyists Registration Act. He said:

The federal Liberals proposed lobbying law changes are not enough to end secret lobbying or unethical ties between lobbyists and politicians.

Mr. Conacher was speaking for many Canadians when he said that they do not see enough in Bill C-15 to satisfy them that the regulations are tight enough to put an end to the secret lobbying that we know takes place. We are not being inflammatory or saying anything outlandish when we say that we have reason to believe that secret lobbying takes place without being fully reported. We have reason to believe that there has been and may still be unethical ties between lobbyists and politicians, or as was pointed out by the member for Churchill, even more commonality between lobbyists and senior bureaucrats. It is not necessary that they reach the actual cabinet minister.

It is probably very rare that lobbyists gets through all the various shielding that goes on around cabinet ministers and get to the individual cabinet minister, but certainly they get to visit and see senior bureaucrats with no record and no obligation to make public or to make known those meetings that may take place.

We are not satisfied with the current amendments to the Lobbyists Registration Act. Speaking on behalf of many Canadians, the amendments are not rigid or stringent enough to safely say that we can put an end to secret lobbying or unethical ties.

Some of the key loopholes in Bill C-15 that still need to be closed and that still exist are loopholes that some commentators have said are big enough to drive a truck through in terms of the opportunities that are there for abuse and misuse. I will not go into specific industries, but people have mentioned some industries that concentrate a great deal on lobbying on the Hill such as the drug industry, the oil industry, et cetera. We believe that there is not full transparency in the activities of the paid lobbyists on behalf of some of those key industries.

A key loophole that still remains in Bill C-15, even after the Senate committee has had a go at it, is the fact that ministers and other senior public officials should be required to disclose, on a searchable Internet site, who is lobbying them and ensure that all lobbying is exposed. That is not automatically available. We should know who is trying to influence what minister or what senior bureaucrat at any given time.

Those of us who have the research capabilities could dig back. After a piece of legislation has been introduced some of us who may be curious to know just what motivated the government to introduce that legislation may do some research, track backwards and find which lobbyists have been aggressively pushing for this, but it is not easy and it is not readily available. It certainly is not readily available on any Internet site, as is being proposed by Democracy Watch, so that ordinary Canadians, anybody who could operate an Internet site better than I, would be able to find out who is lobbying who at any given time.

I think it would be very revealing, looking at major capital expenditures such as military investments, specifically the helicopter deal, to see how much lobbying is going on by the various helicopter manufacturers that are trying to sell products to the Canadian government. It is not readily available and it would be very interesting to most Canadians.

We also believe that Bill C-15 leaves loopholes in that hired lobbyists should also be required to disclose past offices that they may have held, if they were a public servant or a politician at one time, or held any other public office. Corporate and organization lobbyists would be required to do so, but we believe that all other individual lobbyists should be required to disclose fully their past c.v. and their track record. Some are obvious. We have paid lobbyists in Ottawa, on the Hill, who are former members of Parliament. I suppose that is a matter of public record. It is fairly self-evident to anybody who follows these things, but we should know if they were at any time senior public servants who may have had dealings with that industry in their capacity representing the federal government.

If those same individuals are now registered lobbyists, we should know because it is too close a connection, it is too tight, and they may be using privileged information or information that they gleaned while they were in the employ and the trust of the federal government. That information could be advantageous to them in their new capacity as lobbyists. Again, we have the right to know that.

We are also concerned about a very specific point. The exemption of section 3(2) in Bill C-15, which amends section 4(2)(c) of the Lobbyists Registration Act, should be removed from the bill because it would allow lobbyists who are only requesting information to avoid registration.

That surely opens the door for abuse. Some lobbyists will be excluded from the obligation to be registered if they say that they are only lobbying for the purpose of getting information from the government. It is a rare thing that an organization or a private interest would hire someone to go to the government just to obtain information. If a person stated that was the purpose for lobbying on the Hill, that person would go under the radar. No one would have to register at all. Who knows what lobbying really goes on once the door is closed and once there is access to the people involved. We believe that specific point should be addressed.

I know it is the purpose of this debate tonight to deal with the specifics of Bill C-15. Therefore the exemption in subclause 3(2) of Bill C-15, which amends subsection 4(2)(c) of the Lobbyists Registration Act, should be removed from the bill. That is the strong view of the NDP caucus.

Also lobbyists should be required by law to disclose how much they spend on a lobbying campaign. That information again is not readily available. If that information were readily available, I think journalists or any interested party, including ordinary Canadians, may be interested to know. Certainly a red flag should go up if there is a huge amount of money being dedicated to a specific campaign, and that is cause for concern. We should be aware that this private interest is so motivated that it feels compelled to spend $.5 million or $1 million on a lobbying effort. The country should know that.

We would want to question the people who have a serious interest in this issue and ask what the motivation is and the opportunity for gain. Perhaps it warrants more scrutiny by parliamentarians and by the general public. I am surprised that is not law already. I learned a great deal just by reviewing the details surrounding the Lobbyists Registration Act, and I think a lot of Canadians believe this is already the case. In fact I think they would be disappointed to learn that we do not already have these safeguards and measures in place to plug any opportunity where there is room for abuse.

Lobbyists as well should be prohibited by law from working in senior campaign positions for any politician or candidate for public office. That raises an interesting point. What about Earnscliffe? Did Earnscliffe not play an active role just recently in a fairly high profile leadership campaign race? Does it not have paid lobbyists? Is that not what it does on Parliament Hill? That is a graphic illustration of an example that we would want to see disclosed. We are aware of that now anyway, so I suppose that particular example does not pose any problem. However in other examples it is not self-evident, with a less high profile situation perhaps.

We believe lobbyists should be prohibited by law from working in senior campaign positions for any politician or candidate for public office. I think one precludes the other. They cannot have it both ways, I do not believe. We are trying to avoid this kind of incestuous relationship.

Also, lobbyists should be prohibited from working for the government or having business ties to anyone who works for the government, such as if a lobbyist's spouse is working for the government. We know there are examples of that as well. The connection is just simply too close. We would speak strongly for making that change to ensure that lobbyists are prohibited by law from working in senior campaign positions or from working for the government or having business ties to anyone who works for the government, business ties or personal ties I would add.

The prohibition on lobbying the government for ex-ministers and ex-senior public officials should be increased to five years, not the current situation. It is too brief. We believe five years would be long enough to span one term of office, one session of Parliament, possibly even one government. The government may change within a five year period. It is too fresh to simply leave such a senior position, like an ex-minister, an ex-senior public official or a deputy minister, for instance, and then 12 months and one day later become a lobbyist.

This is what we found with Chuck Guité, the deputy minister in the Groupaction scandal. He left his job, a senior position, with all the scandals associated with Groupaction. One year and one day later he was registered as a lobbyist for the public relations firm's associations. I do not have the names. He was working on the Hill 366 days after leaving that senior position in public works where he was the one who awarded those very contracts to those very people he now represents. That is too close. There is too much opportunity and room for abuse. That is a good example of a name that should certainly raise the alarm with anyone.

Another point raised by Mr. Conacher with Democracy Watch, and I would argue on behalf of ordinary Canadians, is that he believes the proposed new ethics commissioner to be created under Bill C-34 should also enforce the lobbyists code of conduct rather than the registrar of lobbyists as proposed in Bill C-34. We believe that would prevent any conflict in ruling. That could be a role. If we had an independent ethics commissioner, or even the ethics commissioner to be created under Bill C-34, that person should enforce the lobbyist code of conduct, instead of the registrar of lobbyists, to put more distance and have more objectivity.

I am pleased that a number of presenters raised this connection. I suppose it is not a coincidence that we are dealing with Bill C-15 and Bill C-34 simultaneously in the same week in the House of Commons. I believe there is a direct connection between the campaign finance bill, the elections financing act, and the Registration of Lobbyists Act. Surely people can see that we want to take big money out of politics.

We do not believe anybody should be able to buy an election in this country. We have seen what happens in the United States where big money, soft money and all the terms they use down there has far too much influence, undermines and even bastardizes democracy in that sense. These two are inexorably linked, because one of the biggest promises a lobbyist can bring to a government to buy influence is the opportunity to make campaign contributions.

I see an opportunity in both of these bills to make Canada more democratic, but I also see shortcomings. Bill C-24 does not go far enough and it still allows far too much business contributions. It strips away trade union contributions but still allows individual franchises of the same company to donate $1,000 each, whereas a national union with 100 locals can only donate $1,000. That is my criticism of Bill C-24.

Just to wrap it up then, I believe there is a direct correlation. Bill C-15 does not go far enough in the ways that I have outlined, the seven different points that I have raised. Bill C-24 does not go far enough in that it treats trade union contributions more strictly than it does business campaign contributions. The connection is lobbyists will no longer be able to say that if one favours their client, their client will likely make a large campaign contribution to one's political party. That is a legitimately a good thing. We believe that only a registered voter should be able to make a political campaign contribution. That is what we have done in the province of Manitoba. There is not even any provincial government money to offset the lack of union and business donations. The rule is clean, pure and simple that only a registered voter can make a political campaign contribution, and that is the way it should be.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
CA

James Rajotte

Canadian Alliance

Mr. James Rajotte (Edmonton Southwest, Canadian Alliance)

Mr. Speaker, I listened with interest to my colleague's speech on the Lobbyists Registration Act and he raised some good points. He spoke about a number of the witnesses who appeared before the industry committee when we were studying the bill. He was correct in saying that many of them had serious concerns not only with the bill itself, but with some of the things that should have been in the bill that were not.

He touched on one with regard to the independent ethics commissioner. As he has pointed out, independence is needed to effectively deal with complaints as they regard lobbyists. We have transparency now in the fact that lobbyists register and they are available on the website where people can find who is registered and for what they are lobbying. The concern for many of us in this chamber is the fact that we need an independent authority, not just an appointment of the prime minister of the governing party but an independent officer of Parliament itself to deal with complaints. If someone has an allegation to make against a certain lobbyist for something, then that should be made to an independent ethics commissioner.

Does the member think the proposed independent ethics commissioner addresses this concern? I believe it does not. Does he think that to be truly independent, the person should be appointed by all parliamentarians, by the House itself, so the person is an officer of Parliament rather than being an appointment of the prime minister or of the governing party?

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
NDP

Pat Martin

New Democratic Party

Mr. Pat Martin

Mr. Speaker, my thanks to my friend from Edmonton for the question. It is the well stated position of the NDP that we believe the ethics commissioner should be an independent ethics commissioner appointed by agreement in Parliament, not appointed by the prime minister. We have stated that over and over again. I think certainly all the opposition parties are in firm agreement that it is the only way the ethics commissioner will be of any use to Parliament. We have seen the experience before with the appointed watchdogs for ethics, et cetera, and we do not believe that is of any value whatsoever.

I appreciate the input and the remarks from the member from Edmonton. We are on the same wavelength on the ethics commissioner. He did not share with us if he believes the enforcement of the lobbyists code of conduct should be a role for the ethics commissioner. Even though it is not my role to ask questions of him, I would be interested to know if the Canadian Alliance would agree that we should be putting more distance between the lobbyists code of conduct and the registrar of lobbyists in terms of the enforcement. It would be an appropriate role for the ethics commissioner.

I would also be interested to know if the hon. member or other hon. members in various parties agree that one of the most advantageous things about having a revamped Lobbyists Registration Act will be the benefit from the elections finances act and the direct correlation. We have good reason to believe that much of the conversation that takes place when a lobbyist is doing his or her job with a senior bureaucrat or a minister, if the lobbyist can get the bureaucrat or minister to Hy's long enough, has to do with the promise of campaign contributions. We certainly have reason to believe there is a direct correlation.

We have seen the experience of business development loans or technology partnership loans. Those businesses that receive what we call corporate welfare are often the same companies that are the most generous to the ruling party, and that is not just exclusive to this current government. Ottawa has operated for many years.

I believe quite strongly that within a very short period of time Canada will be a better place by virtue of the elections finances act and a much more rigid and more tightly regulated lobbyists regime.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
?

The Deputy Speaker

Before I give the floor over for questions and comments, I want to make the House aware there is approximately one minute left before we proceed to private members' business.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
CA

James Rajotte

Canadian Alliance

Mr. James Rajotte

Mr. Speaker, in that case I will be very brief and I will take this opportunity to answer my colleague's question. We would in fact like to see the ethics commissioner be the person who, above and beyond the lobbyists register, deals with any complaints or allegations made within the Lobbyists Registration Act.

Further to that, does he have any cases that he could point to that he feels were unsatisfactorily addressed by either the ethics counsellor or the lobbyists register, which did look after the registration act itself?

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
NDP

Pat Martin

New Democratic Party

Mr. Pat Martin

Mr. Speaker, I will simply close by saying that Bill C-15, an act to amend the Lobbyists Registration Act, is full of half measures that show us and the general public that the Liberal government sees nothing wrong with the federal government being driven behind closed doors by wealthy corporations to carry on the practice of lobbying, as it has since time immemorial in this place. We are not satisfied that Bill C-15 will clean up lobbying on Parliament Hill.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
?

The Deputy Speaker

It being 6:07 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

Topic:   Government Orders
Subtopic:   Lobbyists Registration Act
Permalink
NDP

Bev Desjarlais

New Democratic Party

Mrs. Bev Desjarlais (Churchill, NDP)

moved:

That, in the opinion of this House, the government should amend bankruptcy legislation to ensure that wages and pensions owed to employees are the first debts repaid when a bankruptcy occurs.

Mr. Speaker, it is an honour to lead off the debate today on my latest private member's Motion No. 400.

I have had the privilege on a number of occasions to have my private member's motions or bills drawn and, quite frankly, I have had others made votable previously, very important issues related to what is often referred to as corporate manslaughter or the Westray legislation.

In the new process of private members' bills I had the opportunity for this motion to be drawn and I was extremely pleased, especially at this point in time when we do have the issue of employees' pensions and the risk of those pension funds not being there. It is very timely here in Canada, if not from a day to day basis with each member of Parliament, as we travel our airlines.

The issue we are debating today is an extremely important one for me as the member of Parliament for the riding of Churchill. What I am proposing with the motion is that the government amend the current bankruptcy legislation. The amendment I propose would ensure that wages and pensions owed to employees would be the first debts paid when a bankruptcy occurs.

Far too often in Canada we see employees being left at the bottom of the list when a bankruptcy happens. Far too often we see Canadians who have worked hard their entire lives having their pensions endangered by bankruptcy.

One can imagine working for a company for 30 years or more, retiring and looking forward to enjoying a pension for which one has worked hard, and then hearing that a former employer is going bankrupt and one's pension is in danger.

Certainly each of us as members of Parliament come here, serve a period of time, which a lot of Canadians feel is a very short period of time, before we are able to gain a pension from our employment. However, let us imagine sitting in this House for 20 years or 25 years. I have some colleagues who have been here that length of time. I believe the House leader from the governing party has been here a fair length of time.

I may have my issues with the Prime Minister but I acknowledge his dedication for 40 years to public service. One can imagine what it would be like if the Prime Minister could not receive his pension when it was all done. He has a doozy of a pension and he has had a good wage over the years. However let us imagine having a wage of maybe $40,000 or $45,000 a year and setting money aside for retirement, and then it is not there. We would not have had the benefit of a $150,000 or a $200,000 salary year after year to tuck money away.

We would have had enough to make a go of it, to put food on the table for our family, to pay for a home, the children's post-secondary education, hydro, gasoline or whatever and then something happens, our pensions are ripped away from us and we are left with nothing except possibly some OAS and maybe welfare. I can only imagine the thoughts and concerns that might come to the mind of an individual facing that crisis.

It is for that reason that this motion is so important. The motion is designed to highlight the inequities in our current bankruptcy legislation. The current process puts the needs of banks and creditors ahead of unpaid employee wages and pensions.

I would like to explain first the bankruptcy process with respect to employee wages, after which I will discuss the impact of bankruptcy on pensions.

When a company files for bankruptcy in Canada, the government is the first to be paid. These are called source deductions and they include the Canada pension plan, income tax and employment insurance payments. A company takes these items as deductions from the wages of employees and holds them in trust for the government to be remitted at a later date.

My understanding of it is that it is not to be that much of a later date. These payments are usually supposed to made on a monthly basis or every couple of months but we know there are companies that for some reason or other sometimes do not get those source deductions paid.

If there is a bankruptcy the Government of Canada makes sure it takes the money it is owed first. I am a little begrudging of this, especially when I see EI premiums being paid and there is a huge surplus. The government makes sure it gets its payments first and puts the workers at the bottom.

The next group to get paid are the secured creditors. These are institutions, such as banks, whose loans are secured by items such as company assets. These secured creditors have an arrangement similar to that of a home mortgage. If the company cannot make a payment on its loan the secured creditor arrives to repossess a company asset.

The third group in the list of claimants in a bankruptcy case are the preferred creditors. Within the grouping of preferred creditors the claimant list is prioritized: legal cost and the levy for the superintendent of bankruptcy comes before employees. In this prioritized list employees are listed fourth in order of importance.

Why are employees listed below all the others? These employees have worked hard for their companies. In many cases they have built the company, struggled through the hard times, given their sweat and, in some cases, given their blood and their lives, and they are put at the bottom of the heap. When a company goes bankrupt they are given the bottom position.

The issue of unpaid employee wages during a bankruptcy is not new. The government has known about this issue for many years. In a report prepared for Industry Canada in 1998, the problem of unpaid employee wages during a bankruptcy was addressed. The report acknowledged that employees were poor risk bearers, simply put, employees could not afford to lose out on their wages. They do not have access to repossessing the company's assets.

Unlike other creditors, such as banks, who are able to bear the impact of the loss of revenue, employees have no mechanism for disbursing the income of lost wages. As I said, many are from wages that are not $150,000 to $200,000 a year jobs where one might be able to stash some money away. They are from jobs where one might have made $20,000, $25,000 or $45,000. Even after all other creditors in front of an employee are paid, if anything remains the employee, under the current legislation, is entitled to a maximum of $2,000 in compensation.

What if employees are owed more? In this example I am only referring to wages, not to other items which might be of financial interest to the employees, such as vacation pay or severance pay. I am referring only to wages. Two thousand dollars seems a small amount to be paid for losing one's job plus the work that one has already provided to the company and not getting paid for it.

This is an issue of fairness and equality. Ensuring the unpaid wages and pensions are given first priority in a bankruptcy situation is only reasonable and it is time we made these changes. Workers in this country must come first.

The 1998 report shows that the Liberal government has had this information, has known about this problem and has decided to do nothing about it. Even in light of recent high profile bankruptcies, such as Enron and WorldCom, the government and the candidate for the leader of the Liberal Party, the former finance minister, continue to ignore an important issue.

We can pick from many examples over the years that illustrate the need for change in the bankruptcy legislation. With regard to pensions, Enron and WorldCom are just a few recent examples of where we have seen a significant impact of a bankruptcy on current and former employees.

In the case of Enron, while many top executives and their friends made millions of dollars selling Enron stock before the collapse, ordinary employees who on the average had 62% of their retirement assets invested in the company, lost a total of $1.2 billion U.S. from their pension fund. Many lost almost all their retirement savings.

In the case of WorldCom employees, they saw stark reductions in their retirement savings. Some 40% of the employees of the firm had invested in the pension plan.

Perhaps the example of Air Canada might better illustrate the importance of my motion. Air Canada's problems have provided a wake-up call on pension funds. Air Canada has not yet gone bankrupt. It has simply filed for bankruptcy protection under the Companies' Creditors Arrangement Act.

The act provides protection for Air Canada from the company's creditors while it attempts to restructure. In the case of Air Canada's pension, filing under the CCAA has revealed that its pension plan has a $1.3 billion deficit. Air Canada has 12 plans that it administers with some 50,000 employees relying on these plans for their retirement savings.

If Air Canada were to go bankrupt, why then in all fairness would the employees' pensions not be the first on the list to be paid ahead of the banks and creditors? These employees have earned the right, through their hard work, to see that their investment is insured. Simply, these employees have earned the right to see that their trust in the company's ability to manage their pension fund be repaid.

Even more telling in this case is the fact that the Office of the Superintendent of Financial Institutions has applied to amend specific elements of the court order in respect of Air Canada and its subsidiaries.

The OSFI is seeking to put Air Canada pensioners first. The OSFI wants to amend the court order so that amounts due or accrued to the pension fund are not subject to the CCAA restructuring proceedings. These amounts will move ahead in the list of prioritized creditors. That is the right way to do things.

I will not comment today on how the Office of the Superintendent of Financial Institutions allowed the Air Canada pension fund to accumulate such a large deficit by granting company contributory holidays at a time of industry-wide uncertainty. I agree with the OSFI that in the talks regarding moneys due from a company during bankruptcy or simply during restructuring that the employees' interests, whether they are pension plans, unpaid wages, holidays or whatever should be moved to the top of any asset distribution scheme.

Bankruptcies are difficult for all stakeholders but most difficult for employees. It is a time when employees, both current and former, worry about everything from mortgage payments to job security. They should not have to worry about the possibility of unpaid wages for their pension benefits.

The motion calls on the government to ensure that funds owed to employees are the first debts paid when a bankruptcy occurs. Employees are an integral part of any company and as such deserve the right to be the first to receive financial compensation.

Former employees who are receiving pension benefits have planned their retirement years around their investment in a company pension program. Do we not have an obligation to see that pension plans and employee wages are put first ahead of all other creditors?

We have an obligation to see that the interests of employees are fulfilled. Employees are often those who can least afford to incur such a risk as lost wages or diminished pensions. Employees are often the most vulnerable creditors and are unlikely to bargain for compensation due to the risk of non-payment.

Over the past three decades there have been many proposals to amend Canada's bankruptcy law in order to put employees first. Even with all the discussion that has taken place during that time little change has happened. Pension and unpaid wages continue to be placed behind the list of creditors. I think this says that the government does not value workers and it is time to change that.

I encourage my colleagues to support this legislation. It is right for workers. It is right for Canadians and it is right for our country as a whole.

Topic:   Private Members' Business
Subtopic:   Bankruptcy Legislation
Permalink
LIB

Serge Marcil

Liberal

Mr. Serge Marcil (Parliamentary Secretary to the Minister of Industry, Lib.)

Mr. Speaker, first, I would like to thank the hon. member for having shared his concerns about the former employees of bankrupt companies. This is not a partisan issue. All of us here in the House are concerned by the problems faced by employees in this situation. We all agree, I am sure, that employees whose employer has declared bankruptcy without paying them their wages are very vulnerable. They face immediate and serious financial difficulties. They need protection.

However, this is not a simple matter. Each solution has its drawbacks and, on numerous occasions, Parliament has been unable to agree on the most equitable approach.

Over the years, various governments have proposed different solutions to protect employees that are good for both the economy and Canadian workers. The problem of unpaid wages and pension contributions when a company goes bankrupt has been considered by the House many times in the past. I am sure that all the members want to find the fairest solution possible.

This motion is very straightforward. It proposes to grant preferred protection to wage claims and pension claims, above all other debts.

At first sight, granting preferred protection to such wage claims and pension claims seems an obvious and effective solution with regard to employees whose employer has declared bankruptcy. Unfortunately, resolving this problem is more complicated than it first seems. As the numerous discussions on bankruptcy law have shown, preferred protection, as is the case for many other options, poses various problems.

One difficulty—and this is where previous proposals have failed—arises from the fact that preferred protection might have an effect on the ability of a company to obtain credit. This could be an important factor when it comes to risk assessment by commercial credit companies and contribute to lower credit being provided. This could have a negative impact on employment and the interests of workers in general. Commercial bankruptcy law plays an important role in risk distribution on financial markets.

I am not saying that preferred protection should be rejected as a means for responding to the wage and pension claims with regard to bankruptcies. I am simply indicating that this is a complex issue that has been discussed for a long time and that requires certain compromises.

Several attempts have been made in the past to amend the legislation. The basic principle of wage earner protection was established 50 years ago in the Bankruptcy Act, 1949. Since that time five committees have reported the possible changes: the Tassé study committee in 1970, the Landry committee in 1981, the Colter advisory committee in 1986, the advisory committee on adjustments in 1989, and the bankruptcy and insolvency advisory committee in 1994. None of their recommendations for wage earner protection were implemented.

Since 1975, eight bills have been introduced in the House and in the other place to amend the act. Only one of these bills substantially altered the provisions for wage earner protection, the bill involving the 1992 amendments to the act.

These committees and bills proposed or analyzed a wide range of approaches including wage earner protection funds financed by contributions from employers, from employers and employees, or by the government through general revenues.

Some bills proposed super priority protection for wage claims. Some bills proposed raising the ranking of wage and pension contribution claims among preferred creditors.

There is a great deal of divergence on who should pay for the cost of wage and pension contribution claims. It was nearly impossible to obtain a consensus on better ways to proceed than what is currently in the Bankruptcy and Insolvency Act. That is why the protection of wage earners requires further examination and consultation.

Despite the amendments to the Bankruptcy and Insolvency Act, 1992, wage earners are still faced with particular problems when their employer declares bankruptcy and they lose their pay and pension contributions. They are vulnerable creditors who often cannot afford to suffer such losses.

As well, they generally lack sufficient information to assess the risk of not being paid what is owing to them by their employer.

To protect employees, the act as modified in 1992 gives preferred status of up to $2,000 in wage claims for services provided in the six months immediately before the employer's bankruptcy. It also protects up to $1,000 in disbursements for sales people.

In the preferred ranking, wage claims are given priority over claims of ordinary creditors but wage claims rank behind those of secured creditors.

Protection for pension contributions is provided in federal and provincial pension legislation, much of which gives secured creditors status to claim unpaid pension contributions.

Very few people would argue against the principle of protecting the claims of wage earners. Fairness weighs in favour of protecting them.

In practical terms wage earners are more likely to have their unpaid wages claims satisfied than ordinary creditors because of their preferred status. In some circumstances as well, secured creditors may allow trustees to pay accrued wages to which the employees are not entitled, strictly speaking.

Industry Canada, which is responsible for the Bankruptcy and Insolvency Act, is aware of the need to protect wage earners whose employers face bankruptcy.

In 1992, Parliament amended the Bankruptcy and Insolvency Act to extend the protection of unpaid wages. In particular, Parliament found it appropriate to increase the protection for wages earned up to six months prior to bankruptcy. This represents a doubling of the previous length of time. In 1992, Parliament also quadrupled the maximum amount that could be claimed from $500 to $2,000.

Further review of this important issue is currently under way. I am pleased to bring members up to date on the plans of Industry Canada to strengthen the Bankruptcy and Insolvency Act.

First, in 2001, the department released a discussion paper addressing wage earner protection.

Following the release of this discussion paper, Industry Canada officials undertook cross-Canada consultations with stakeholders to help identify a fair solution.

The act was referred to the Standing Senate Committee on Banking, Trade and Commerce. To assist the committee, Industry Canada prepared a report describing the wage and pension protection problem, proposing possible solutions and setting out the views expressed by stakeholders about these options proposed.

I can say that the parties were generally of the opinion that wage earners are vulnerable creditors who need protection when their employers go bankrupt. There was considerable support for enhancing the priority protection for wage earners. However, the views expressed varied greatly as to the relative priority they should be given.

The committee has undertaken its study and will no doubt give the matter full consideration.

In conclusion, the minister provided these details to give my hon. colleagues from all parties an assessment of the situation.

I submit that there is great interest in the whole question of wage earner protection following bankruptcies, but finding a fairer solution than what is now available will require a good deal of hard and thoughtful work during the forthcoming parliamentary review.

As I said in my opening remarks, this is not a partisan issue. Several different governments have already grappled with the question. Each option for wage earner protection has its advantages and disadvantages.

Industry Canada is currently working to identify a fair solution to ensure the protection of workers whose employers go bankrupt.

Topic:   Private Members' Business
Subtopic:   Bankruptcy Legislation
Permalink
CA

James Rajotte

Canadian Alliance

Mr. James Rajotte (Edmonton Southwest, Canadian Alliance)

Mr. Speaker, I certainly appreciate the opportunity to speak to the issue raised by the member for Churchill in this private member's motion.

I would like to point out that the whole issue of bankruptcy and insolvency legislation is certainly a matter under discussion. There are three reviews of which I am aware that deal with this issue. One is by the Personal Insolvency Task Force of 2002. Another review is by the Insolvency Institute of Canada and the Canadian Association of Insolvency and Restructuring Professionals' joint task force on business insolvency law reform. The third is by the review of the Standing Senate Committee on Banking, Trade and Commerce.

At the outset I would like to give due credit to the member for Churchill for bringing a very timely issue to the House. The motion reads:

That, in the opinion of this House, the government should amend bankruptcy legislation to ensure that wages and pensions owed to employees are the first debts repaid when a bankruptcy occurs.

Undoubtedly, the Canadian Alliance would like for all wages and pensions to be paid in the cases of firms that do go bankrupt. We have received a number of letters on this issue and we certainly empathize with those who are left without their due wages. We recognize that employees are the most exposed in any bankruptcy and are the least able to absorb losses.

Bankruptcy legislation in Canada does have some quirks. For instance, while the federal government ultimately is in charge of bankruptcies, it is the provincial governments that set out the things that are in fact exempted. In reviewing the history of bankruptcy and insolvency law in Canada, I would like to paraphrase from the Insolvency Institute of Canada and the Canadian Association of Insolvency and Restructuring Professionals' recent joint task force on business insolvency law reform:

Canadian insolvency statutes are largely based on the English bankruptcy and company statutes of the late 19th century.... During the 1980s, influenced by the 1978 changes in U.S. bankruptcy law and primarily as a result of developments in the western provinces (particularly Alberta and British Columbia), Canada became the second major country in the world after the United States to develop a reorganization culture. These are very important strengths which make the Canadian system superior to the U.S. system by minimizing transaction costs, minimizing the resources devoted to the insolvency system itself, and minimizing the...effects of companies operating for long periods of time with the benefit of court protection.

Although there may be a need to review this legislation, we should recognize that it certainly does have some strengths.

Under the Bankruptcy and Insolvency Act, creditors are classified as follows: first, secured creditors; second, preferred creditors; third, ordinary creditors; and fourth, deferred creditors. These classifications determine where creditors rank in relation to their claims against the bankrupted debtor's assets.

Secured creditors rank first because a trustee in bankruptcy takes title to a debtor's property, subject to the rights of the secured creditors in that property. Unpaid wages currently rank fourth in the next list of creditors, the second group, preferred creditors. These include, in order: first, testamentary and funeral expenses of a deceased bankrupt; second, fees and expenses of the trustee in bankruptcy and legal costs; third, the superintendent of bankruptcy's levy; fourth, unpaid wages and salaries of employees earned within six months prior to the employer's bankruptcy, up to a maximum of $2,000, and salespersons' expenses of up to $1,000 during that six month period.

One can see how the first three within this second list of preferred creditors, we would assume, would not be great amounts. Basically, as we understand the motion, it would move unpaid wages to not only first on the list of preferred creditors but also in fact above secured creditors.

With respect to the whole issue of pensions, the member for Churchill spoke very well about the obvious concern many people have with regard to pensions, with regard to them being unfunded as has been reported recently in a lot of the papers in Canada. Obviously Air Canada stands out as a very notable example. I think that is a legitimate concern. My suggestion would be that this whole issue of unfunded pensions would be better addressed through the Pensions Act rather then through the Bankruptcy and Insolvency Act.

Though it may sound strange to some, good bankruptcy and insolvency laws do make for good investments. Investors gain confidence knowing that should something go wrong, there is a stable system in place to protect what is left of their assets.

I have a few concerns with the motion. First, it overlooks the fact that insolvency and bankruptcy laws contribute to the initial startup of a company because they provide assurances to creditors that their risk in investing in a company or idea will have some degree of security.

When we think of investors in companies we often think of extremely large companies and extremely large investors, but that is not always the case. In fact most businesses in the country are small businesses. When people invest a lot of their life savings in a small business or in a friend's small business, we need to have some degree of security for them. In many cases that is as much of a wage or pension for them as anything else. That is why this is one concern that should certainly be raised.

The second concern I have is that the motion overlooks the entire restructuring process. Canadian law has been criticized for not allowing companies that enter into bankruptcy protection to restructure. That would be the second concern with this motion as stated in the sense that we do not want in some situations a company to not be able to restructure because it is afraid of having to pay wages and pensions first off.

I should note that within the Canadian Alliance obviously we have a policy of free votes on private members' business. I have it on good account that some of my colleagues in the Alliance may disagree with me on this issue, which is entirely their right. Therefore, I would not be too surprised if a few of them actually voted for this motion. I can understand why some individuals would support the motion, as I think the intent is certainly a good one.

Perhaps as a piece of advice, and I hope the member who moved the motion receives it with the graciousness intended, and that is, I myself could certainly support a motion that perhaps stated “That in the opinion of this House the government should study bankruptcy legislation to determine whether wages and pensions owed to employees should be the first debts repaid when a bankruptcy occurs”.

Frankly, there are some concerns I have, particularly as it regards smaller investors who put a lot of their income into a company, as to whether they should be the first or whether wages and pensions should be the first. I think that is a legitimate debate. I am not prepared at this point to simply say that the wages should be the first debts that are repaid.

While I do not support the motion, I certainly appreciate its intent. I am glad to have had the opportunity to discuss this issue in the House today.

Topic:   Private Members' Business
Subtopic:   Bankruptcy Legislation
Permalink
BQ

Pierre Paquette

Bloc Québécois

Mr. Pierre Paquette (Joliette, BQ)

Mr. Speaker, first, I would like to congratulate the hon. member for Churchill for her initiative. I believe her motion is not only a step toward correcting an unfair situation—and I think she proved that well—for workers, but is full of common sense.

I shall read the motion, because I think it is important that everyone keeps it in mind for the rest of the debate.

That, in the opinion of this House, the government should amend bankruptcy legislation to ensure that wages and pensions owed to employees are the first debts repaid when a bankruptcy occurs.

As the hon. member for Churchill has already said, workers are the first victims in a bankruptcy. As a general rule, when there is a bankruptcy, decisions have been made by the administrators and owners of the companies, and they also pay the price, but on the basis of their own responsibility. The workers, however, usually do not have much control over the way their work is organized, or the way the company is organized, and find themselves paying for all the damage.

As things stand now with the Bankruptcy and Insolvency Act, I recognize some of the same spirit as in the Employment Insurance Act. Under that act, the two-week waiting period somehow implies that the victims of temporary or permanent layoffs have created their own situation. Thus, it has been decided that part of the cost of a layoff should be paid by the victims, the workers.

We find the same spirit in the bankruptcy act, which provides that the workers—the employees—find themselves very far down the list of creditors when the assets are sold.

The hon. member for Churchill mentioned that, but I think it is worth repeating. We know that the first ones in line to be paid are the governments, for such amounts owing as income tax, benefit premiums and other taxes.

The second group would be the secured creditors, in particular, the major banks. At this time, with the record profits that some of them have been making, they are not really to be pitied.

There is a third group of creditors called preferred creditors. This group of creditors includes employees, is only ranked fourth and has a preferred claim that is limited to $2,000.

What historically was to be legislation protecting creditors, particularly small creditors and employees, is now completely changed and devoid of its original intent.

With regard to case law, it is extremely important to see how this legislation, which is unfair, has a domino effect on other legislation, particularly provincial laws, in Quebec, for instance.

I will give an example that took place just two weeks ago. In recent years, case law has taken a direction that has little to do with the historical objective I mentioned earlier of protecting creditors, particularly small creditors and employees.

For employees, especially, three or four years ago there was a decision handed down, known as Barrette v. Crabtree Estate, in which the Supreme Court ruled that it was not possible to consider notice of dismissal as a debt since no services were performed for the corporation. Since then, various courts have given restrictive interpretations, particularly in Quebec.

As I was saying, based on this restrictive interpretation that wages must be in compensation for services rendered, but that everything else—such as benefits—is not considered wages by the Supreme Court, the court ruled that it was not a debt because it does not flow from services performed for the corporation.

So case law in this instance only adds to the problems with the Bankruptcy and Insolvency Act. I think that the motion moved by the member for Churchill is a step in the right direction, even though I think we need to make some clarifications in future debate. A motion is an opinion given by the House to the government.

I hope that this motion is adopted. There needs to be debate on this, particularly the notion of what constitutes wages. As I was saying, three or four years ago, the Supreme Court's ruling contained a very restrictive interpretation of what constitutes wages. Wages are remuneration paid for services performed.

Quebec's Court of Appeal gave similar rulings in 1998 and 1999, which means that now, in the context of case law, the real issue is not wages, but services performed.

This restrictive interpretation is found in a judgment that just came down by Quebec's Court of Appeal on May 5, in a case between the Syndicat des travailleurs et des travailleuses du restaurant Le Deauville, affiliated with the CSN, v. the owner. You will recall that I was the general secretary of the CSN for eight years, so I still feel close to this labour federation.

The Appeal Court decision upholds the restrictive interpretation of wages, based on the Supreme Court decision. Naturally, the union had its case dismissed. I will go into more detail. The parliamentary secretary was completely right, this is not a partisan issue. However, in my view, the case law aspect should be added to the current debate on Motion M-400 put forward by the member for Churchill.

The Appeal Court ruled in favour of the owner, the administrators against the union. I can assure members that the CSN will appeal the decision.

We know—this was mentioned by all the stakeholders—that wage earners are preferred creditors, but only up to $2,000. To get more than $2,000, one has to file suit against the administrators under the Companies Act, which is an area of Quebec jurisdiction.

The wage earners from Le Deauville restaurant decided to go to court to recover amounts of just over $79,000 representing statutory holidays, sick leave, group insurance premiums, union dues and compensation benefits in lieu of notice. We are talking about a very significant amount of money.

The owner of the restaurant had had difficulties. Over the years, he had failed to pay the insurance policy, as provided for in the collective agreements, and which is a wage issue. As a result, the policy was cancelled in August 1998. There had been no paid sick leave since 1997. This was money owed the wage earners that had never been paid to them.

The question the union asked with a view to recovering all this money was what exactly a wage is. We are confronted to two different notions of wage. That is why I think that Motion M-400 by the hon. member for Churchill opens a debate which should extend to this whole issue. Finally, is wage compensation, in legal tender and benefits having a monetary value, for the work or services of a wage earner or is it, as ruled by the Supreme Court, simply compensation for services rendered.

It seems to me that, when wages are negotiated in a collective agreement, wage is not only the hourly wage paid, but all financial benefits. In fact, employers remind us of that on a regular basis.

It seems to me therefore that the concept of wages must be clarified and that it must encompass all financial benefits. What is of interest in the court decision is that the appeal court states that, lacking any additional legislative guidelines, provision of services by the employee represents the cornerstone of directors' personal responsibility for company debts.

The Quebec court of appeal is therefore calling upon lawmakers, which include elected members of Parliament, to clarify a number of concepts that have evolved over time. It seems to me that Motion M-400 ought to comprise the point made by the hon. member for Churchill relating to making workers secured creditors, but that another concept needs to be added: that wages must include all financial benefits derived from work. It is extremely important, therefore, that we work around that concept.

If Parliament wants to work seriously, Motion M-400 must be adopted, because it will force us into some extremely complex debates. I am aware of that, but they are also unavoidable. This must be done if we really have the interests of the Canadian and Quebec population at heart, since, as we all know, most of them work for private companies that are liable to go bankrupt and these workers unfortunately very often end up deprived of their rights.

To that end, therefore, that is to trigger a debate on all these concepts relating to the Bankruptcy and Insolvency Act, we are going to support Motion No. 400 without reservation. Unlike the Alliance members, despite this being a free vote, all members of the Bloc Quebecois are going to vote in support of the motion by the member for Churchill.

Topic:   Private Members' Business
Subtopic:   Bankruptcy Legislation
Permalink

June 5, 2003