You have about four minutes.
Evidence of meeting #6 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cpp.
A recording is available from Parliament.
Evidence of meeting #6 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cpp.
A recording is available from Parliament.
5:20 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
This will work perfectly because I'd like to change the topic for just a moment.
Hollinger Canadian Newspapers purchased CanWest in 2000. At the time of the sale, the pension funds were carved off as assets of the newspaper and remained with Hollinger, and to be managed.... Well, my office is receiving letters from people now. Apparently, Ernst & Young is sending out letters to them saying that for the time being their pension benefits will continue to be paid; they are neither insured nor pre-funded but are paid from the available assets of the company.
That's a pretty ominous letter for anybody to receive. I would suggest to you it's even more ominous than what the Nortel folks went through. So I would just like to submit the following to anybody who'd like to respond to this. This suggestion really talks to the fact that we need a national pension insurance program to backstop these programs. One of our proposals in the NDP was for such a plan to be funded by the plan holders. The Netherlands backstops it, and Japan and Britain both have plans at this point in time. I'd like a response to that, if you could.
Mr. Perkin, I think you spoke about trying to go forward with plans rather than wrapping them up, and this is exactly the thinking that's behind part of this proposition, that if we had this plan, perhaps CPPIB could manage it. The national summit that everybody's talking about is one of those opportunities to discuss that. So I'd just like your commentary on that.
5:20 p.m.
President, Association of Canadian Pension Management
I understand the guarantee fund notion, but if you look at the track record of Ontario's Pension Benefits Guarantee Fund, which pales in comparison with what the Pension Benefit Guaranty Corporation has seen in the United States, I understand that the guarantee fund in Ontario currently takes in about $48 million a year in assessments from those very pension plans covered by that fund. I'd be quick to point out that not every pension plan is covered by the guarantee fund. The public sector plans are not, for example.
The concern we have is what you're starting to see now, that the Government of Ontario has just pumped in, I think, about $250 million and has just promised another $500 million in last week's budget. Those are taxpayers' dollars they're committing to the guarantee fund to help backstop the pension plans that are having difficulties.
You can empathize with the pensioners who find themselves in that situation. Quite frankly, we don't believe that the guarantee fund in Ontario is a properly self-insured arrangement. We don't believe that it works the way it was perhaps originally intended to, and that's why we're publicly on record as opposing any further expansion of the guarantee fund in Ontario or elsewhere in Canada.
We would prefer to see efforts made to improve and enhance the funding of pension plans that would be affected by the guarantee fund's defined benefit plans. There are a number of funding and other issues relating to that, which we could get into at another time, but we would actually like to see better funded pension plans, and then you don't have the need for the guarantee fund.
Obviously, there are other issues that we can talk about in terms of the Bankruptcy and Insolvency Act, or perhaps this other arrangement that the Expert Commission on Pensions in Ontario suggested, about managing the funds of an insolvent company, but again, those are other issues for another discussion perhaps.
5:25 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
I appreciate your comments because they again speak to—
5:25 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
It's not going to be a question, just a comment.
They speak to the need for a national summit, though, because there has to be a well-rounded approach to pensions, to assets management, and all of those things.
5:25 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you very much.
Thank you for your questions.
Thank you very much for your presentations and for your responses to our questions here today.
I believe there was a request by Mr. Hiebert to Mr. Perkin for some additional information. If any of you have anything further to share with the committee, please do send it to the clerk and we will ensure that all members get it.
Thank you for your time today, colleagues.
The meeting is adjourned.