Assistance for Former Nortel Workers

(Response to question raised by Hon. Jim Munson on October 1, 2009)

The government is obviously concerned about the impact of the current economic reality on employees in Canada and their families, including those from Nortel Networks (Nortel).

Nortel commenced proceedings under the Companies’ Creditors Arrangement Act (CCAA) on January 15th, 2009. Under Canada’s insolvency laws, all creditors — lenders, suppliers, employees, and foreigners — are treated equally. Furthermore, under the CCAA each creditor is entitled to vote whether to accept a proposed plan of arrangement that would determine each creditor’s recovery.

Under the Bankruptcy and Insolvency Act (BIA), should Nortel become bankrupt, creditors are paid based on their priority. The priority of employee claims, however, has been amended recently, for example, the Wage Earner Protection Program ensures payment of up to $3,250 for unpaid wages, including severance and termination pay, and the BIA grants a special priority for outstanding pension contributions such that those amounts will be paid to the pension fund ahead of even secured creditors.

As announced in Budget 2009, Canada’s Economic Action Plan will provide $46.5 billion in federal support to the economy over the next two years to provide economic stimulus and job creation. Also, as part of the Canadian Skills and Transition Strategy, the government is providing $8.3 billion for a number of initiatives to assist Canadians during these uncertain times, including enhancements to Employment Insurance and more funding for skills and training development to help Canadians get better jobs, while giving Canada a more flexible, knowledgeable workforce and a competitive edge in the global economy.

The Government of Canada wishes to see the Information and Communications Technologies (ICT) sector and all other sectors of the Canadian economy prosper. We are putting in place the conditions for ideas and for companies to thrive. We recognize the important role that the ICT sector and research excellence plays in furthering innovation and competitiveness, as well as creating well paying jobs for Canadians. This is why our first three budgets had more than $7 billion invested in new Science and Technology funding, and more than $5.1 billion in Budget 2009 alone, one of the largest investments in Science and Technology in Canada’s history.

Furthermore, the Government of Canada sees the ICT sector as an important part of Canada’s overall digital economy, and is making significant investments through the Economic Action Plan, including:

  • 100 percent capital cost allowance rate for computer hardware and systems software acquired between January 27, 2009 and February 1, 2011
  • $500 million provision to help fund Canada Health Infoway and its goal of enabling 50 per cent of Canadians to access their electronic health record by 2010
  • $225 million allocation over three years to develop and implement a strategy on extending broadband coverage to un-served communities
  • $200 million over two years for the National Research Council’s Industrial Research Assistance Program, to allow the program to double its contributions to emerging knowledge-based companies
  • Renewed commitments to public investment in research by expanding the Canada Graduate Scholarships Program and funding for the national granting councils. Waterloo’s Institute for Quantum Computing received a $50 million allocation for the construction of its new facility
  • Continued efforts to reduce the general level of corporate income tax