Keiper Closure Highlights Need for Severance Legislation

LONDON – The unwelcome announcement that 200 more Londoners will be out of work when the decade old Keiper plant closes its doors is yet another example of the immediate need for reforms around the handling of severance packages says London-Fanshawe MP Irene Mathyssen.

“The announcement of the Keiper closure was a terrible way to start 2011,” says Mathyssen. “People in our community—particularly in the manufacturing sector—are struggling to find any employment opportunities. This situation highlights what New Democrats have been saying for months, the economic recovery is shaky at best and all the ‘new’ jobs the Conservative government has been so proudly bragging about have only been jobs of a temporary or part-time nature. We need to be creating stable, good paying, long term jobs that let people enjoy a reasonable quality of life before we start claiming this recession is over.”

Mathyssen says the Keiper plant closure also highlights the need for the government to adopt the proposals she has put forward in Bill C-601 to amend the handling of severance packages in regard to both Employment Insurance and RRSP contributions. Mathyssen’s legislation would remove severance pay from EI calculations, enabling laid off workers to start collecting benefits immediately and where they are able, allowing workers to save their severance pay in an RRSP regardless of their RRSP contribution ceilings.

“These changes might allow a worker to use a severance package to pay down or pay off a mortgage or a car, to stretch their meager EI benefits further. For older workers who may only have a few working years left, the RRSP transfer might be vital to their retirement savings,” says Mathyssen.

When Mathyssen tabled the legislation in December, Minister Flaherty publicly commented that he would have the Finance Department review Mathyssen’s proposals.

“I am asking the Finance Minister to do the right thing for working people. There are 200 families who are going to need help from Keiper, hundreds more when Ford Talbotville closes this summer, and tens of thousands of others in communities from coast-to coast-to coast. We don’t need more partisan rhetoric, we need action! I invite the Finance Minister to work with me for the speedy passage of Bill C-601”