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Bill C-228: Prioritizing the workers

November 04, 2022

CBA National talked to Simon Archer about changes to bankruptcy legislation that will move employee pension plans to the front of the line

The Canadian Bar Association magazine, CBA National, spoke to Simon Archer about a private member’s bill that is edging closer to becoming law. As the article explains, Bill C-228 “will give company pension plans a super-priority in the case of bankruptcy and insolvency. It means that when a company goes bankrupt or applies for a plan of arrangement under the Companies’ Creditors Arrangement Act (CCAA), pension fund deficits will go to the front of the line, ahead of secured creditors when funds are distributed. In addition, some severance pay will also get a super-priority.”

Bay Street is not very happy with the legislation and has suggested that it will kill defined benefit pension plans. CBA National asked Simon Archer about that prediction.

Simon Archer, a partner at Goldblatt Partners and an expert on pensions who works closely with labour unions, also doubts that C-228 will kill pension plans. “I’m not convinced that putting in a super-priority will drive all DB plans out of existence,” Archer told CBA National. “The vast majority of DB plans are bargained for or have a union association,” so their future can only be decided through negotiation.

Archer says the banks only have themselves to blame if the legislation passes. “The banks were just sleeping and not watching,” he said, noting that it’s not an issue that the banks are anxious to be vocal about. “The politics of this are quite sensitive, so being seen to step on pensioners is not good politics. You’re not going to see the banks trash the pensioner bill.”

Read the article here.


Simon Archer

Practice Areas

Bankruptcy & Insolvency Law, Pension & Benefits Law