The fate the Hudson’s Bay Company (HBC), is in jeopardy as the company undergoes restructuring under the Companies’ Creditors Arrangement Act (CCAA). The March 7, 2025, filing has sent shockwaves through the retail industry, raising serious concerns for the company’s 9,400 active employees and thousands of retirees whose livelihoods are at stake. Legal representatives for affected workers are now scrambling to ensure their financial futures are protected amid what could be one of the most consequential retail liquidations in Canadian history.
Hudson’s Bay was granted court protection from its creditors on March 7, 2025, under the CCAA. Last week the company had an initial plan to keep roughly 40 Hudson’s Bay stores open, a move contingent on landlords waiving rent payments for a period and possibly investing in those locations to sustain their operations.
However, late Friday, Hudson’s Bay announced that discussions with landlords had been unsuccessful. The company secured only limited financing, which, according to a press release issued on Friday, would “require the full liquidation of the entire business” unless an alternative source of significant capital could be found.
At the Monday March 17 court hearing, a lawyer representing Hudson’s Bay employees and retirees opposed the liquidation moving forward so quickly, warning that it could become “one of the biggest mass terminations in Canada” since the failure of Sears Canada. Of the thousands of staff across the country, roughly 647 are unionized, according to court documents. Any failure to secure alternative financing would also likely force the wind-up of the company’s pension plans.
Mass Terminations and the Fight for Severance
If HBC proceeds with liquidation, the immediate termination of thousands of employees is expected. Under employment standards laws, terminated employees are entitled to severance and notice pay, but whether HBC can fulfill these obligations remains uncertain.
One potential avenue of relief is the Wage Earner Protection Plan (WEPP), a federal program that provides up to $8,844.22 per employee toward unpaid severance and wages. However, WEPP does not automatically apply in CCAA proceedings, meaning workers may face lengthy legal battles before receiving compensation.
Pensions : Will Retirees Be Left Behind?
The Hudson’s Bay Company Pension Plan (HBC Plan) is a registered pension fund under the Ontario Pension Benefits Act. It includes both defined benefit and defined contribution components, covering a large number of past and present employees. The company has confirmed that the restructuring does not affect pension benefits accrued under the HBC Pension Plan, with assets held in a trust.
Disability and Other Benefits at Risk
Beyond pensions, health benefits, life insurance, and disability payments are all at risk. The termination of HBC’s employee benefits programs would leave disabled workers without crucial support, further deepening the financial strain on former employees.
“There are employees currently on disability who depend on these payments for their daily living expenses,” the Aide Memoire states. “If these benefits are cut off, it will be devastating.”
What Happens Next?
With HBC’s CCAA proceedings ongoing, the company has yet to release a definitive plan regarding its stores, employees, and other obligations. Unless a last-minute buyer emerges, full liquidation is the most probable outcome.
For now, the fate of thousands of Canadian workers and retirees remains in limbo, as they await clarity on their financial futures.
The coming weeks will be critical in determining whether employees receive fair severance and whether legal precedents will be upheld. One thing remains clear: the collapse of Hudson’s Bay could leave a lasting mark on Canada’s retail and labour landscape.
Instead of companies having their own pension plans, why aren’t they all forced to pay into a central fund like the CPP, managed by a governing body, that can’t be touched if the company closes, is sold or goes bankrupt? Unlike the CPP, it could be optional with companies deciding whether to have this as an employee benefit. Centralising would mean it would be portable and follow you as you changed jobs and the larger fund would have a larger pool to invest.
Federal Bill C 228, Pension Protection Plan, passed in 2023, should protect their defined pensions.
Hi it’s Anthony from the Canadian Association of Retired Persons. Hoping to learn more about the pensions that might be in peril and what CARP can do help
As noted in the above article the ‘restructuring’ apparently doesn’t affect the company’s pension plan however, insolvency and bankruptcy can (as per Eaton’s/Sears case) and retirees have to seriously consider this.