Marty Morantz

[Points of Order, May 25th, 2021]

Mr. Speaker, during my S. O. 31 today, when I was honouring a member of my community, somebody, and I am sure it was inadvertent, coughed, interrupted the feed and appeared on the screen.

I would like to request the opportunity to redo it.

[Public Safety, May 25th, 2021]

Mr. Speaker, in 2018, the House voted to condemn Iran for its ongoing sponsorship of terrorism and called on the government to list the IRGC as a terrorist entity. It has been three long years and the government still refuses to respect the will of the House even after this latest ruling confirming that the downing of flight 752 was an intentional act of terrorism.

When will the Minister of Public Safety finally declare the IRGC, which is responsible for the deaths of 85 Canadians, as a terrorist entity?

[Community Leader, May 25th, 2021]

Madam Speaker, today, I want to congratulate and thank my friend and community hero, Will Gault. Will has faced challenges and adversity in his life, but he never gave up. He now owns a successful small business in our community, Willy Dogs, and grills up the best hot dogs in Winnipeg.

Last week, I was pleased to stop by Willy Dogs to grab lunch and support his campaign to thank front-line hospital workers for their amazing dedication throughout the pandemic.

Will is selling specially priced vouchers that anyone can purchase to buy lunch for front-line hospital workers as a thanks for their tireless work. Whether it be through this campaign to support health care workers or fundraising for the Bruce Oake Recovery Centre to support those on the path to recovery from addiction, Will is always looking for ways to help support our community.

I thank Will for all that he does.

[Foreign Affairs, May 14th, 2021]

Madam Speaker, violence has erupted in Israel, the West Bank and Gaza. Hamas has fired thousands of rockets into civilian areas, demonstrating its obvious intent to kill as many Israeli citizens as possible. This, along with deliberatively setting up bases in civilian areas using Palestinian civilians as human shields, constitutes war crimes.

The Minister of Foreign Affairs' statements to date on this violence have been ambiguous at best. Will the minister state unequivocally today that he supports Israel's right to defend itself, just as President Biden has done?

[Human Rights, May 14th, 2021]

Madam Speaker, today we remember the victims of the Pontian Greek genocide, who were brutally exterminated and oppressed a century ago. The Ottoman Empire carried out a campaign of ethnic cleansing against its Christian Greek population during the first World War.

A period of horrific violence took place until 1922, during which hundreds of thousands of Greek Pontians were incarcerated, deported, forced into death marches or systematically executed. Sadly, since these acts of intolerance, violence and hate took place, the world must still learn from our past to prevent similar acts from ever taking place again.

On behalf of our Conservative caucus, I join with the Greek community and all Canadians in remembrance of this horrific chapter in human history. We must never again let atrocities like these happen and always speak out against systemic discrimination and injustices.

[Bankruptcy and Insolvency Act, May 11th, 2021]

Madam Speaker, I am pleased to put some thoughts on the record today regarding Bill C-253. This bill would put pension plans in priority to secured creditors in the event of bankruptcy proceedings.

Prior to my life in politics, I practised commercial law for over 20 years as a partner in a downtown Winnipeg law firm. Much of my practice involved doing commercial loan securitization for financial institutions. For the most part, it was my job to ensure that proper legal documentation was in place to ensure a first charge against the assets of the borrower on behalf of the lender. A first charge was always essential to the security requirements of the lender.

The concept of a secured creditor having a first charge is also fundamental to the functioning of our economic system. Without that guarantee, lenders would be far more reluctant to make loans and would view this as a major risk in their security position. Many businesses require debt financing to function, do business, provide jobs for their communities and hire employees.

When I saw this bill, my first concern was what would financial institutions do if this law was changed, in other words, if pension funds had priority over the secured position of lending institutions. How would it affect existing indebtedness? In other words, that would be loans that have already been made predicated on a first charge against the borrower's assets.

I suspect many financial institutions would be very concerned and we could see some instances where they might say that if pensions were to come first, they could no longer take the risk and call in their loan. This is a likely outcome of this legislation as it is currently presented and could pose a serious threat to businesses that fall under federal jurisdiction for pensions and result in challenges for them. In other words, the bill could have the exact opposite effect from what it intends. It could force businesses to close if the lenders see this as an increase in the risk profile, an unacceptable risk, jeopardizing pension plans and pensioners.

On the other hand, one could also argue that this law would incentivize banks for new loans to insist that pension funds were secured and in solid shape by the company before they would agree to make a loan. The problem with this approach is that in the case of defined benefit plans, if there is a precipitous drop in the value of the assets of the fund or of the company after the loans are made, then it may still be difficult for the company to pay back the bank if it must first satisfy the pension plan. This could create a drive toward conversion of many plans to a defined contribution model.

Another problem can occur where a company is failing and needs to restructure its debt but cannot find a lender to take on the additional risk if it is forced to subordinate to pension obligations.

It is clear there are serious issues with any bill that has, as its goal, a fundamental shift in security prioritization away from lending institutions. However, as a society, we must also recognize the importance of labour. I can see the argument being made of why a bank should have priority over people who have worked their entire lives for the company. It is not the fault of those workers that the company went bankrupt and so their pensions should be protected. It is here that we have a conundrum. If lenders cannot be first, they may not lend. If they do not lend, there may not be a job. If pensioners do not receive their pensions in the event of a corporate bankruptcy, workers might not work and, again, there may not be a job.

This is a difficult predicament and as I was writing this speech, it made me think of the biblical tale of King Solomon’s baby. In that tale, two women claimed to be the mother of the child. To settle the dispute, Solomon decreed that the child be cut in two, upon which the true mother revealed herself by insisting the baby be given to the other woman to save its life.

I do not have any such Solomonesque wisdom in the case of pensions, banks and public companies, but I do think this bill, as it is presently constituted, could result in the end of some companies for lack of willing bank capitalization.

What this debate does make clear is that we must find a better way to support businesses and their employees, and I think we would be hard pressed to find anyone who disagrees with this idea. When bankruptcies occur, far too often there is a long list of creditors and individuals who need to be made whole and there is unfortunately not enough money to go around in many instances.

We also must consider the effects on the supply chain of a company that is unable to restructure its debt. What happens to the employees that work for the suppliers? There are all kinds of small business suppliers that could be shut out in the event of a bankruptcy.

A working paper by the OECD regarding priority creditor rights for pension funds discusses this issue. One of the arguments against measures like what Bill C-253 proposes is that, if this were allowed, a range of social issues could come forward claiming priority rights, such as health benefits or environmental claims to name a couple. Would these be prioritized over pensions? How would we decide that?

The OECD working paper makes also makes a strong case against changing the position of pension claims within the creditor rankings. This argument centres upon the fact that, aside from the complications of changing bankruptcy legislation, doing so may be harmful to capital markets and damaging to the investment climate.

If pension funds are given superpriority status, other creditors, who may be small trades and personal creditors, would be bumped down the line, increasing their credit risk. These suppliers may also be hesitant to provide their services in a pension superpriority environment. Also, lenders, given the additional risk, could in turn pass this risk on to businesses in the form of more expensive interest rates and capital. As well, the marketplace could be adversely impacted with increased bad debts and potential failures. This could result in less confidence in our financial markets. It could also make Canadian businesses less competitive vis-à-vis foreign jurisdictions that do not have such a law.

It could also be argued that any change in the ranking of pension obligations would have a negative impact on credit cost and availability. One alternative to help address the issue might instead be to make it illegal for shareholders to strip a company of its cash in the form of dividends when there is a pension shortfall. If we look at what happened with Sears Canada, it is an example of where this type of change would have benefited pensioners.

Its majority shareholder, an American hedge fund, took out billions in cash from the company. In 2005, the hedge fund took out $1.5 billion. In 2010, it took out $750 million, and in 2012, it took out $100 million. However, in 2007 there was already a pension shortfall of $36 million and that shortfall continued to widen, reaching $267 million by 2015. There would have been more than enough cash available to Sears Canada to cover its $36-million pension shortfall in 2007, and any other future shortfall, if cash were not being withdrawn from the company at a challenging time, so rules to prohibit dividend stripping when a pension is in a shortfall could be beneficial by allowing a company access to more cash to cover its losses. As a result, that could serve as an effective tool.

Another option could be pension plan insurance, which companies would pay into in the event a pension is unfunded and a company faces insolvency.

There are different alternatives to solving the problem this bill proposes to address. I believe at committee there will be more alternatives discussed. There we will have a chance to have a full discussion of the benefits and pitfalls to be brought forward and addressed by hearing from witnesses, such as workers, employers, academics, financial institutions and others. I think as we work toward a solution on this issue, we must remain focused on ensuring there is a balanced approach.

The security of pension plans for workers must remain top of mind, but we must also avoid measures that could discourage investors and lenders from trying to save a company in despair. King Solomon would expect nothing less of us.

[Budget Implementation Act, 2021, No. 1, May 11th, 2021]

Mr. Speaker, the member spoke quite a bit about the promises made and promises kept. I recall that in the 2019 campaign, a promise was made on reducing cellular phone bills by 25%. I am somewhat concerned that in the 721-page budget document that was presented recently there was not a mention of that promise. Will this promise be kept or will it be another on the long list of promises that have been broken by his government?

[Budget Implementation Act, 2021, No. 1, May 11th, 2021]

Madam Speaker, I know the member did touch very briefly on the issue of fiscal responsibility, but it is that area I want to discuss with her.

A couple weeks ago when the finance minister made her speech, she basically said, and I am paraphrasing, that it would be irresponsible not to incur more prospective debt because interest rates are so low. I know this morning the headline on CNBC is that the 10-year Treasury yield in the U.S. has risen amid inflation fears.

Last week, U.S. Secretary of the Treasury Janet Yellen said she was concerned that interest rates might have to go up because of inflationary concerns. The Minister of Finance in New Zealand, who is a Labour minister, also recently said they will move to reduce debt and return to surplus as a responsible government should.

Given all of this, why is the Liberal government not following suit and taking heed, with respect to the possibility of inflation and interest rates rising, by bringing in fiscal anchors and a plan to get back to balance?

[Jewish Heritage Month, May 10th, 2021]

Mr. Speaker, this month of May marks Jewish Heritage Month. Jews throughout Canada's history have made extraordinary contributions to the fabric of our nation and have helped make it the greatest country in the world.

Whether it be the Bronfman family and their contributions in business and philanthropy; in politics and government with former minister of finance Joe Oliver; in the entertainment world with the likes of none other than Captain James T. Kirk, captain of the Starship Enterprise, William Shatner; or, for the younger crowd out there, Canada's own superstar, Grammy award-winning singer-songwriter Drake, the Canadian Jewish community has made significant contributions to the growth and prosperity of Canada while overcoming tremendous obstacles.

This month, let us remember to celebrate and educate future generations about the inspirational role that Jewish Canadians have played and continue to play in communities across the country. On behalf of our entire Conservative team, I want to wish a happy Jewish Heritage Month to my fellow Jewish Canadians across the country.

[The Economy, May 6th, 2021]

Mr. Speaker, Canadians are looking ahead to rounding the corner on COVID-19, and our country is at a crossroads. Our country’s future is at stake and Canadians must choose which path to recovery they can trust.

Our Conservative recovery plan will secure our future to help those who have struggled the most through this pandemic get back to work with a stable, good-paying job. Our plan will take immediate action to help the hardest hit sectors, helping those who have suffered the most, including women and young Canadians. We will enact a comprehensive jobs plan to get Canadians back to work across the country and recover the one million jobs lost during the pandemic. We will work to support small businesses and provide incentives to invest in, rebuild and start new businesses.

I believe it is time for a new path forward, one of security and certainty. That is exactly what Conservatives can and will deliver.