MPs Propose Changing Law To Protect Pensioners After Sears Canada Bankruptcy

Giving pensioners higher priority in bankruptcy proceedings would be a big step towards supporting Canadian workers and preventing failed execs from pocketing huge bonuses while their companies go down in flames.

In the wake of the Sears Canada bankruptcy, where the top execs pocketed millions in bonuses while loyal employees who spent decades with the company were screwed out of their pensions, there is a growing move to change the law to protect pensioners when companies go bankrupt.

The momentum comes as outrage grows over the treatment of Sears’ pensioners.

It is truly a despicable situation. People had money taken out of their paycheques for years and years going towards their pensions. They worked hard, were loyal to Sears Canada, followed all the rules, and were counting on their pension when they retired. Then, Sears went bankrupt and the executives who “led” the company to failure gave themselves a big reward and left many workers with nothing.

Disgusting is too kind a word for that kind of behaviour.

Unfortunately, the law lets Sears Canada executives get away with it, since pensioners don’t have priority when companies go bankrupt and the remaining assets are split up.

Now, both the NDP and Bloc Quebecois are planning to support legislation that will make pensioners a “super priority” in bankruptcy proceedings.

As noted in a recent report, “The Bloc has already tabled Bill C-372, a private members bill proposing amendments to existing laws. NDP pensions critic Scott Duvall said he will table his own private members bill soon. Duvall said government must work to close loopholes and put pensioners and workers first instead of “big fat corporations and CEOs.”

While both the Conservatives and Liberals failed to improve the system previously, they have a chance to do the right thing now. Deputy Conservative Leader Lisa Raitt has expressed a willingness to meet with the NDP to discuss it, while the Liberals say the want to “engage” on the issue. Both of those parties deserve heavy criticism for failing to act in the past, so they should jump at the chance to make up for that failure.

As we know, the government needs to support Canadian businesses with lower taxes, fewer regulations, and trade policy that protects Canadian companies and jobs. They also need to support Canadian workers, and that means ensuring that companies can’t screw over pensioners while failed execs pocket huge wads of cash.

Giving pensioners higher priority in bankruptcy proceedings is a long overdue change, and it’s one all parties should support.

Spencer Fernando

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3 comments Add yours
  1. Although I do agree that it is horrible what the Sears Execs have done to their best employees. I do not agree that Legislation should be passed to protect pensioners. This is mixed market economy, Government Interference in the Private Sector, outright Socialism. Whichever permutation you prefer. When you work in the Private Sector these risks exist. Business Bankruptcy, down-sizing to lay-offs, etc. I do not believe taxpayers should front any costs toward the passing of bills like this one, as well as it is the right of the big execs in a private company to close up, jump ship and leave everyone to sink if they want too. Does that mean it’s moral or right, No of course not. But it is their right; it is a risk the employees where aware of when they were hired. Any business could go belly up. I think a more fair solution would be legislation making it easier for the employees to sue the Execs of Sears for what is owed to them, legislation that ensures their legal fees and time spent in court would also be subsidised (by the accused and not the government) if the case is won. This problem could be solved in a court of law with minimal Government Interference and cost to taxpayer.

  2. The argument comes down to whether it is better to be screwed by global corporations or national governments. I would have to go with national governments, provided their strings to global corporations could be severed. The way things stand with the ex-Sears employees, Sears has fobbed off their welfare onto the Canadian taxpayer anyway. The employees should they win a lump sum settlement from Sears would lose most of it in taxes. The top Sears executives will simply hide – I mean “invest” their million dollar payouts with the likes of our top politicians and avoid the pitfalls of being a small business operator in Canada.

  3. Levi – do you work for the Government? When there is a change in Government in two years will “public servants” (hahaha) be losing their pensions? We all know that politicians all get severance pay and “lifestyle adjustment” bonuses when they lose an election, even though they know up front they are being hired on term employment. Using your argument, civil servants should be losing their pensions as well.

    With pension funds gifted to the same execs that ran the company into poverty, the employees will have no money to even try to sue. No lawyer is going to spend years going to court to fight a case they will never win and do it for free.

    Sears is going into receivership and should now be run by the receiver. Lay off the execs and pay the staff till closing day. Staff should all get some sort of pension as the suppliers can write off their receivables and therefore should be next in line. Execs must be the very last to be considered as they are the ones that failed.

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