Dipac

The Parliament of Canada recently tabled Bill C-501 which seeks to redress the situation faced by pensioners where their employer has filed for either bankruptcy protection, or bankruptcy itself, under provisions of the Company Creditors Agreement Act (CCAA) and the Business Investment Act (BIA). Among other points, these two federal acts govern the priority status of the various creditors seeking settlements from bankruptcy proceedings.

Currently a number of well known Canadian companies (such as Nortel, Fraser Papers, Abitibi Bowater, etc.) are involved in such proceedings. Under existing legislation, any pension plan funding shortfall that might exist (almost certain to be the case) has virtually ZERO competitive ranking opposite any settlement monies that may be forthcoming.

It is very understandable that employees and pensioners of such companies are worried sick with their prospects. Many impacted individuals have written letters to the Prime Minister and various MPs pleading for justice and the retroactive enactment of this legislation.

While current and future 'DIPAC' retirees under our pension plan are not presently facing similar prospects, we could be.......... thus our interest in Bill C-501 is both personal and empathetic.

Following are two examples of these letters:

Example #1

As a Nortel Pensioner in Ontario, I am urgently asking for your positive support of Bill C-501 to amend the outdated Bankruptcy & Insolvency Laws in Canada.

I am asking for your cooperation in setting aside any other differences you may have with our Opposition Parties in Canada and/or any influences that are being brought upon you by outside sources.   YOU are the Ruling Government and we are confident you will feel obligated to support the people you represent.   The amendment of this Bill would come at NO expense to you or to the taxpayers of Canada.

Justice in bankruptcy must prevail in our Country for our future and the future of generations to come.

It is our sincere request and our urgent need that this Bill be made retroactive to January 13, 2009 for the sake of those of us who now face bankruptcy ourselves without your intervention.

Sincerely,

Example #2

I am writing to plead for your support of Bill C-501 that would afford some protection for Canadian pensions when pension plan sponsors face bankruptcy or seek creditor protection under CCAA. I speak from personal experience. My employer, Fraser Papers Inc. sought CCAA protection on June 18, 2009. Since then, Ontario Superior Court rulings associated with these CCAA proceedings have granted Fraser Papers immunity from its pension fund debts. Fraser ceased all contributions to its four Canadian plans (NB and QC), and to its USA plan. USA retirees will be protected from loss of pension income. However, Fraser's Canadian retirees will not benefit from similar protection. As a result, beneficiaries of Fraser's New Brunswick salaried retirees pension fund will lose 31% of their pensions effective May 1, 2010. Beneficiaries of Fraser's other Canadian pension funds are expected to lose similar portions of their pension income. This situation is even worse than what Nortel retirees are currently at risk of losing.

In addition, Fraser's salaried retirees lost health and dental coverage that was previously considered part of their retirement compensation. Therefore, since January 1, 2010, these retirees are forced to pay for health and dental coverage out of their own pockets - further aggravating their precarious financial situation. There are also widows of deceased Fraser Papers retirees who are living on fixed incomes that only comprise a fraction (e.g. 60%) of their spouse's former pensions. For them, this remaining pension income will be reduced by another 31% - a situation that is simply unjust.

Retirees and future retirees from Nortel and numerous other companies in difficulty are still awaiting their fate. Bill C-501 would provide security for these individuals who do not deserve to have their pension income taken away from them - as is about to happen to me and other Fraser Papers retirees. Please show some compassion and support this Bill. Canadian taxpayers deserve better than what is happening to too many retirees across this great country. Numerous other developed countries long ago realized the risks associated with allowing companies to abandon pension plans having significant deficits, and adopted legislation that afforded protection to beneficiaries of these pension plans.

Please do the right thing in this instance. Don't allow rightfully earned money to be taken away from Canadian pensioners while banks, bond dealers, and many other creditors are able to walk away fully reimbursed.

Thank you for acting in accordance with your conscience.

Regards,