MP proposes protection for pensions

TORONTO — An Ontario backbench member of Parliament tabled a bill Monday to amend Canada’s insolvency laws so they offer more protections to pension plans, post-retirement benefits and severance when a company is in deep financial trouble.

The treatment of pensions during court-supervised restructurings has been a long-simmering issue but has attracted new attention since Sears Canada sought protection under the Companies Creditors Arrangement Act in July.

In addition to ending postretirement health benefits and severance payments immediately, Sears Canada’s collapse meant future pension payments could be cut if there aren’t sufficient assets to make up its solvency deficit.

Scott Duvall, a New Democrat MP who represents a riding in Hamilton, Ont., said Monday in the Commons that his amendments would make changes to the Bankruptcy and Insolvency Act as well as the CCAA. “We must fix the imbalances to current legislation and provide Canadian workers, retirees and their families the protection they expect and deserve,” Duvall said.

Bills introduced by backbench members of Parliament seldom make it through the legislative process to become law, but some advocates for change say the Sears Canada case has tapped into widespread anger about Canada’s insolvency laws.