Canadian bill C-501 and Manley Lobbying against it.

The NRPC site for members only has published details on the statements by John Manley regarding what he calls myths put out by pensioners about Canada's protection for retirees if affected by bankruptcy, and the impact on Canada of providing priority to pensioners to ensure that the trust fund is made solvent before other creditors are paid.

If you are an NRPC member, you can access it in the members only section of the NRPC web site. (Link in the right hand column)

Manley identifies five myths,(as he calls them). The NRPC has provided specific and detailed rebuttals to each of the myths. If you plan to write letters on this to your MP, consult the NRPC site for details.

Essentially Manley is siding with the bond holders and big business interests to block bill C-501, and his opinion is certainly biased.

In the first area Manley claims that very few industrialized nations provide this kind of super priority. We all know that Canada is way behind the US, the UK, Germany, and other civilized nations where pensioners are treated with respect and honor, as opposed to Canada where we as Nortel pensioners and disabled people have been cast aside and our plight ignored.

Manley also claims that Canada has already taken steps to protect defined benefit plans and that Canada leads in this area. As a typical politician, his references do not directly address the issues of trust fund insolvency and his remarks only apply to a very small percentage of Canadian retirees.

Manley raises the old big business fear monger, that a bill such as C-501 would drive more companies into bankruptcy. What he fails to think about is a new culture that bill C-501 would create whereby all stakeholders would take part in ensuring pension trust funds are correctly funded, audited regularly at shorter intervals,with properly calculated contributions made, rather than the sloppy approach currently in place.

Building on the previous idea, Manley also has claimed that Bill C-501 would negatively impact bondholders and make credit harder to obtain for a company. Detailed financial analyses carried out by a consultant to the NRPC and reported on at previous webinars, and to the government, has clearly identified that the impact would be negligible. In the US for example, the PBGC has had priority status over other investors for many years, and that hasn't had a major effect.

The final area that Manley attacks is the continuance of defined benefit plans. He claims that Bill C-501 would raise the cost of defined benefit plans. I find that hard to believe. If a company is funding the plan properly there shouldn't be any negative impact.

The issue is the Canadian law which allows companies to under contribute and let the plan fall behind for too long a period. In Nortel's case for example, the last real plan evaluation was in 2006 and at that time it was underfunded. The extra payments required by law to make up that deficit were far too low as the economy tanked and the fund lost money, and there was no emergency review and reassessment until after Nortel had declared CCAA and chapter 11. The law is at fault. The government created this situation with their poor oversight legislation. Now when it comes to correcting that for the unfortunates who will suffer because of these incompetents, they, and people like Manley, won't step up and do the right thing.