Adam Bramburger
Beaver Staff
A delegation of concerned pensioners visited Hastings-Lennox and Addington MP Mike Bossio Thursday to push for legislated protection of Canadians’ pensions.
The visit was part of a national day of action organized by the Canadian Association of Retired Persons (CARP) and the Canadian Federation of Pensioners (CFOP) motivated by the fact over 16,000 Sears Canada pensioners lost over $250 million in pension earnings after the failed retailer declared bankruptcy last year and closed all of its locations, yet still paid shareholder dividends and executive bonuses.
“We want to see legislation that would ensure pensioners get paid first, not last,” said John Stinson, one of three CARP members who discussed the issue with Bossio for about a half-hour.
Stinson said Sears is just one example of a larger issue that CARP estimates could impact more than a million Canadian workers. He added it has far-reaching impacts.
Hastings-Lennox and Addington MP Mike Bossio (second from left) meets with Canadian Association of Retired Persons members (from left) Jim Barton, John Stinson, and Pieter Kooimans. (Adam Bramburger/staff)
“There are so many defined benefit plans and it may be only a relatively small number of them that are in serious trouble, but the issue is in front of everybody. The Sears problem has put it in front of everybody,” he said. “You have a constant unease by a lot of people that something is going to happen to their plan… It causes a lot of anxiety and it probably has an impact on the economy as well. If people start to worry that their pension is going to be there and they have benefits, they’re very reluctant to go and spend their money. They don’t know what to do in a lot of cases.”
The disturbing thing, he said, is companies not fully funding pensions are doing so within the law.
Another delegate, Jim Barton, indicated that he and Stinson are DuPont pensioners and they and many other area residents are concerned about the status of their pensions following a September merger with Dow Chemical.
“The concern we have is that once they split the Dow-DuPont company into three pieces, we have no idea where the pensions will go. The concern in all of this is that they will simply close or collapse the entity that owns our pension. They can choose to bankrupt it,” he said. “Some new entity that is not a DuPont thing will take over the business in Canada, but won’t have any interest in the DuPont pension. I believe we have a brewing case of Sears coming. When it happens, there will be no legislation that will protect us.”
Bossio said he was quite familiar with pensioners losing what has been promised to them. In fact, the issue hit him fairly close to home. As a high-tech recruiter, the Ontario-based Nortel Networks was one of his biggest clients. The company kept growing and in 1999, it hired 36,000 people in one year. Boss recognized it grew too big, too fast and when the dot-com bubble came crashing down, it spelled disaster for many.
“I saw a lot of friends lose their pensions as a result of it,” he said.
Bossio added that many of those people had their pension funded by stock options and many people didn’t expect it to crash so quickly. He said market factors have also impacted more recent corporate collapses because people were confident because of a low-interest, high-growth environment prior to a recessive period caused by the 2008 global fiscal crisis.
“Companies were caught off guard. They didn’t have to fund pensions before because interest rates and growth were high enough they didn’t have to do that,” he said.
The MP added, however, that in the years that followed some corporations have still had some of their most profitable years ever, which indicates the pendulum may have moved too far toward profit.
Bossio said he’s been working behind the scenes for changes in pension law, lobbying the various caucuses in government to discuss the issue and get it on the government’s agenda. He told the CARP members he prefers working that way than making public statements without considering all the moving parts and impacts of legislative change. He said the process likely will take some time to bear fruit.
“It’s not going to be in this budget. We’re working to hopefully get it in the next budget, or a worst-case scenario, it becomes part of the party platform for the next election.”
During Thursday’s discussion, Bossio said he’s hoping to have proactive legislation in place.
“To me, I want to do it before the fact and I want to do it so that you’re not going to get bonuses or dividends paid out unless the pension plan is fully funded,” he said. “I don’t know what impact something like that has on the competitive of Canada to continue to attract companies.”
He said there are many examples of countries that have similar protective legislation, but stressed it is important to find a “Made-in-Canada” approach that fits its economy. Bossio said he’s also pushing for change, like increasing the income threshold to qualify for the Guaranteed Income Supplement, to ensure seniors are less vulnerable.
CARP, CFOP and like-minded partner agencies including the Sears Canada Retiree Association and the Canadian Labour Congress have also collected over 28,000 signatures on a petition to give unfunded pension liability super-priority status under the the Companies’ Creditors Arrangement Act and the Bankruptcy and Insolvency Act to ensure pensions are paid out. Locally, they said over 1,100 people have signed in the Kingston and Napanee areas.
Bossio agreed to make a joint submission with Kingston and the Islands MP Mark Gerretsen recognizing the request. He urged CARP members to keep campaigning.
“Sustained pressure is what it’s going to take. It’s not enough for one MP to get up and do it or 20 MPs. The more pressure we have across the country, hopefully at some point we get 338 MPs that are standing up for change.”