The Liberal government says it has "no plan" to change the law to protect Canadian pensioners when companies like Sears file for bankruptcy, but they are open to discussing the issue.

Uncertainty over the future of Sears pensions in the wake of the retail giant's bankruptcy have led those advocating for improved protections for pensioners to pressure the government to change the law.

"We need legislative change," said Wanda Morris, vice-president of The Canadian Association for Retired Persons, CARP, a national non-profit advocacy group that campaigns for healthcare and financial security for retirees.

"So, right now there is no plan to do that. Obviously, we're open to discussions," said Innovation Minister Navdeep Bains. "It's not a matter of not wanting to. Right now, we're engaging and we're willing to work with anyone that wants to put forward proposals."

The New Democrats said they will table a private members bill this fall proposing amendments to both the Bankruptcy and Insolvency Act and the the Companies' Creditors Arrangement Act.

The NDP said the changes will put pensioners before creditors when a company files for bankruptcy

"When we're talking about pensioners, we're talking about people with decades worth of experience and of wages deferred. They don't have other pensions to pull on. They are extremely vulnerable and we need to protect them," added Morris, whose group was on Parliament Hill Wednesday to lobby MPs.

Pensioner 'super-priority'

As the law currently stands, pensioners hold no priority when it comes to dividing up assets during bankruptcy proceedings.

"If we let companies walk away from their pension obligations then people turn to public services and we as taxpayers are left on the hook, and that's not fair," said Morris.

The notion of a pensioner "super-priority" proposed by Morris is backed by both the Bloc Québécois and the NDP.

As Sears Canada declares bankruptcy, what protections are in place for employees' pensions? 12:13

The Bloc has already tabled Bill C-372, a private members bill proposing amendments to existing laws. NDP pensions critic Scott Duvall said he will table his own private members bill soon.

Duvall said government must work to close loopholes and put pensioners and workers first instead of "big fat corporations and CEOs."

He said constituents in his riding have told him stories about having their benefits or pensions affected by bankruptcy proceedings.

"I have had people crying at their doors saying Scott, what's happening? My benefits are cut off. I need my medical. I need my medicine. I have diabetes. Now all of a sudden they're broke," Duvall told reporters in Ottawa Wednesday.

'Unacceptable'

"It's clear that we have to do something, I just don't know what it is. But it can't be continuously companies coming in and just abandoning, and people end up picking up the pieces of their lives. I just find it unacceptable" said Conservative Deputy Leader Lisa Raitt, who has a family member affected by the Sears closure.

Raitt said she has asked Duvall for a meeting to better understand what the NDP is proposing. However, when pressed, Raitt said she was not advocating for greater government intervention.

"We're going to look for a policy solution and we're going to work with the NDP...to see if there is any commonality between what NDP policy would be and what we possibly think a good Conservative solve would be," Raitt added.

Wanda Morris, vice president of advocacy for CARP, is calling on the government to change laws to better protect pensioners in bankruptcy. (CBC)

Earlier Wednesday, former industry minister Tony Clement said what Sears pensioners are going through "breaks my heart" but that legislation to protect pensioners poses a dilemma.

"How do you create the hierarchy of rights so that lenders will still lend to companies with a reasonable expectation that they can get their money out if something goes wrong and protect the employees who have given part of their earnings and have a reasonable expectation of pension rights," said Clement.

Minister Bains said Wednesday that the government will "engage" with the NDP and Bloc on their proposed changes and "look at the implications" of granting priority to pensioners in bankruptcy proceedings.

Raitt said if the Liberals were really interested in working on a solution they would have "ponied up by now."

"Right now, our short-term and immediate concern are the workers and their families and we want to make sure that we're able to provide assistance to them during the difficult time," said Bains.