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Legislation that prioritizes pensions in bankruptcies passes House of Commons

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November 23, 2022
By Talent Canada

A closeup of the Peace Tower on Parliament Hill in Ottawa. Photo: Sharkshock/Adobe Stock

A federal bill that prioritizes paying pensions, before other liabilities, when a company goes bankrupt has passed in the House of Commons.

The Canadian Labour Congress applauded the passage of Bill C-228, which it said is designed to ensure employers will have to prioritize pension payments before moving on to other financial liabilities.

“Bill C-228 is about fairness for workers. We’re encouraged by the cross-party support for this legislation,” said Bea Bruske, president of the Canadian Labour Congress (CLC). “For decades we have seen companies pay out creditors, even pay out bonuses to executives after declaring bankruptcy, while workers wait at the back of the line. We are glad to finally see workers being prioritized over banks and CEOs in bankruptcies situations.”

CLC calls out MP over severance, termination pay provisions

The CLC said it was disappointed in the action of Liberal MP Kevin Lamoureux, which “resulted in the removal of important protections that would have given super priority to workers’ severance and termination,” it said.


Lamoreaux raised a procedural issue during debate over the bill, and sections that would have guaranteed severance and termination pay were removed from the bill, according to published reports.

“Pensions are earned and paid for by workers, and that money belongs to them. Workers depend on that money when they retire,” added Bruske. “It is frustrating and unjust that workers are left with crumbs when a company enters insolvency.”

Not a gift: CLC

The CLC then called on the Senate to pass the bill “urgently.”

“It is important to remember that workplace pensions are not gifts from the employer,” the CLC said. “Pensions are essential to the financial security and well-being of working people in Canada. Next to their homes, pension savings are one of the most important pools of assets that workers accumulate over their lifetimes. We believe defined benefits plans are an excellent way to attract and retain employees, and we are determined to maintain and improve these plans.”

Bruske rolled off the names of insolvent employers such as SEARS, Nortel and Stelco, where workers have lost pension income.

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