For years the PPSA has contained a provision that provided for a deemed trust for pension claims. In many instances, the courts did not enforce this provision because insolvency laws are federal laws. The Indalex decision changed that by recognizing that the windup deficiency of a pension plan is protected by the provincial law. In the last budget, there is a statement which indicates that the Liberal government will change the PPSA to prevent the windup liability from being given priority in insolvency. It was done without any fanfare and buried in the budget papers.
The manner in which this issue has been dealt with to date cannot be characterized as encouraging open dialogue. It smacks of a backroom discussion with financial service providers without any attempt to involve other pension stakeholders. The PPSA provision (s. 30(7)) should be left as it is. This government has a duty to protect the promises made to pension plan members - not simply facilitate placing pension claims at the back of the line. Canada already has measurably weaker protections than most G7 countries, including the United States. At the very least, the intent, as disclosed in the Budget 2013, should have been openly identified rather than buried in the hope that no one will notice.
My idea is not a new one. Leave the provision on the books as is. Second, if the Government persists in pursuing this agenda, be open as to the intent and facilitate dialogue amongst the stakeholders including pension plan members and their representatives.
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