The problems we are facing are not unique to Nortel as many companies are facing difficulties. We expect these problems will continue and pensions will be a major political issue for the next decade. We need to take focussed action on several fronts to help those former employees who have been or will be hurt by the events that follow from Nortel's filing for bankruptcy protection in January, 2009.
We have a legal thrust, working closely with and guiding Koskie Minsky as well as retained actuaries and business advisors, to ensure former employees are favourably treated by the courts.
Our political action thrust makes use of our distributed membership to engage as many federal and provincial politicians as possible to convince them of the need to protect such a vulnerable group. In particular, the problems faced by the pensioners are due to systemic failures of federal and provincial legislation affecting pensions, more than the shortfall in Nortel's pension contributions.
We have a media thrust to ensure the public and the media recognize the problems facing former Nortel employees. We must demonstrate that we are not "fat cats", but valued members of society whose rights are being denied and who are being robbed of deferred compensation and termination benefits that should be guaranteed by law.
Although we would have preferred for Nortel to restructure and emerge from CCAA, allowing the company to resume normal pension payments and pay statutory termination benefits, there are currently no signs that Nortel plans to remain in business. Nortel has now announced that the company will be broken-up and has sold off most of the assets. Therefore, our strategy is to:
Maximize the fair value of the Nortel Canada estate.
Seek immediate amendments to the federal Bankruptcy and Insolvency Act (BIA) and Companies' Creditors Arrangement Act (CCAA) to give priority in liquidation to claims of former employees regarding pension fund deficit, unpaid severance, and loss of health care, long term disability, and life insurance benefits.
Ask Industry Canada to place conditions under the Investment Canada Act or other statutes to require part of the proceeds of sales of Nortel businesses, buildings, R&D tax credits and other assets to be used to pay retiree and former employee claims.
Seek reimbursement to former Nortel employees from taxing authorities for personal taxes prepaid for lost benefits.