The stated purpose of Bill C-228 is commendable; However, the means proposed to achieve this end are flawed and will have serious and undesirable unintended consequences – including for those interest groups that parliamentarians want to help

TORONTO, Oct. 18, 2022 (GLOBE NEWSWIRE) — In a letter to the House of Commons Standing Committee on FinanceThe Association of Canadian Pension Administrators (ACARR) commented on Bill C-228, noting serious, undesirable and unintended consequences should the bill go into effect and outlining alternative approaches to safeguarding retirees’ pensions to achieve the same goal without risk of reaching damage to the retirement income system.

Among the unintended negative consequences, ACPM notes that Normal course lending is becoming more difficult, expensive, or impossible for some defined benefit (DB) plan sponsors, noting that the prioritization of pension plan deficits created by Bill C-228 would fundamentally change the risk profile assessed by creditors. In addition, the letter notes that almost all countries in the world, including the United States, do not use an over-priority approach to bankruptcy and that such an approach would make it even more difficult for Canada to attract business investment.

Another possible negative consequence of Bill C-228 as it stands is that Many defined benefit plans are terminated due to the increased costs and credit burden faced by plan sponsors. These measures would have wider implications for Canada’s pension system, leading to further erosion of DB plan coverage and…