House of Commons Hansard #87 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was plan.

Topics

The House resumed from April 2 consideration of the motion that Bill C-38, an act to amend the National Parks Act, be read the second time and referred to a committee.

National Parks Act
Government Orders

10:05 a.m.

Bloc

Stéphane Bergeron Verchères, QC

Madam Speaker, it is a pleasure to participate today in the debate at second reading of Bill C-38, an act to amend the National Parks Act.

This bill will not necessitate a lengthy debate as it contains a single clause adding Tuktut Nogait National Park in the Northwest Territories to the list of national parks in Schedule I to the act.

The added Part XII specifies the boundaries of the new park, which covers 16,340 square kilometres or 6,310 square miles. Future negotiations may result in park boundaries being expanded to include land that is currently part of Nunavut and traditional Sahtu Dene and Metis territories, which would increase the total area covered by the park to 28,190 square kilometres.

In 1995, the Government of the Northwest Territories, the Inuit of Nunavut and the Sahtu Dene and Metis agreed to leave the area to ensure the interim protection of the future location of the national park once the project has been completed.

The name of the park will be Tuktut Nogait National Park, which means “caribou fawn” in the Siglik dialect of Inuvialukton.

As indicated in the press release from the secretary of state responsible for Parks Canada announcing the tabling of this bill, this is a most appropriate name since the new park will protect the calving grounds of the Bluenose caribou.

The park is located in Melville Hills, east of Inuvik, in the Northwest Territories. It represents the natural region of tundra hills in the Canadian national parks system. Melville Hills consist of tundra vegetation, rolling hills and deep canyons. Its rich biodiversity is uncharacteristic of Arctic regions and comes from the variety of microhabitats it incorporates.

The many cliffs and ramparts provide ideal nesting areas for birds of prey. Moreover, the lush vegetation of the hills and the valleys provides an excellent habitat for caribou and musk sheep.

The closest inhabited place is Paulatuk, where we find a Inuvialuit community of about 300.

The park protects a natural site blessed with impressive tundra landscapes—spectacular canyons, many caribou, musk sheep, wolves, birds and other wild species from the North—as well as archaeological sites which confirm that there was a human presence thousands of years ago. These natural lands will enrich Canada's natural parks network, whose reputation is already well established around the world.

The territory covered by the park has a great cultural and economic importance for the region's population. Tuktut Nogait also has many features that are of interest to the scientific community. The high altitude areas escaped glaciation and served as a refuge to the biota during the Wisconsin glacial stage.

The only comparable zone in all of the Arctic's continental regions is found in northern Yukon. The park has a number of pingos, which are steep, ice-cored mounds. It also has one of the largest population of eagles and falcons in the Northwest Territories.

From a scientific point of view, it is interesting to see signs of a human presence throughout the region. Contrary to what one might think, a large area of the park was inhabited a number of times during the last millennium. The interpretation of archeological sites raises important questions about the culture of Thule Inuit in that area, and about the origins of Inuit society.

The region provides visitors with an opportunity to discover untouched Arctic landscapes, and to observe wildlife and plant life. Activities include hiking, camping, birdwatching, nature watching and photography.

Among the points of interest, let us mention the spectacular canyons along the Hornaday and Brock rivers, the impressive LaRonciere Falls, and the abundance of birds, wildlife and wild flowers. Visitors can also familiarize themselves with the life, culture and history of northern peoples.

The first European to visit this part of the Arctic coast was Samuel Hearne, of the Hudson's Bay Company. He descended the Coppermine River in 1771 in search of copper deposits, the abundance of which had been considerably exaggerated.

The Tuktut Nogait region was not visited again until over 50 years later. Between 1821 and 1852, the royal navy renewed the search for the Northwest Passage. Many explorers, including John Franklin, surveyed the coastline. After 1900, eminent researchers such as Vilhjalmur Stefansson, R.M. Anderson and Diamond Jenness, studied the region and its people.

The agreement creating the park was signed in 1996 by Canada, the Government of the Northwest Territories, and four representatives of the Inuvialuit: the Inuvialuit regional corporation, the Inuvialuit game management council, the Paulatuk community corporation, and the Paulatuk committee of hunters and trappers.

The purpose of the agreement creating the park was to fulfil the commitments made by the federal government to the Inuvialuit native peoples when it passed the Western Arctic (Inuvialuit) Claims Settlement Act in 1984. This legislation implemented an agreement that conclusively settled Inuvialuit claims over certain lands in the Northwest Territories and the Yukon territory that they traditionally used and occupied.

As compensation for the extinction of their ancestral claims, rights, titles and interests, the agreement provided that certain lands would be granted to or set aside for the Inuvialuit, and upheld their right to hunt, fish, trap and conduct commercial activities thereon, subject to certain limitations.

The agreement was intended to give the Inuvialuit a way to retain their cultural identity and values within a rapidly evolving Nordic society, while making them full participants in that society and its economy. The agreement contained the requirement to protect the fauna, environment and biological production of the Arctic.

Creation of the Tuktut Nogiat park is, therefore, an offshoot of the Convention recognized in the Western Arctic (Inuvialuit) Claims Settlement Act.

This becomes obvious when the objectives of the park's creation are examined. They are: to protect the Bluenose caribou herd and its calving and post-calving habitat; to protect in perpetuity a natural area in the Tundra Hills region, and encourage the public to understand and appreciate the region in such a way as to leave it intact for coming generations; to encourage collaboration between the Inuvialuit, the Government of Canada and the Government of the Northwest Territories with respect to the planning, operation and management of the park; to encourage and support the creation and maintaining of jobs and businesses in the region, by encouraging subsistence use of the park; to encourage greater understanding and respect of the cultural heritage of the Inuvialuit and their natural environment; to create an environment suited to long-term research into its ecological and cultural heritage; and to preserve the ecological integrity of the park.

The park board will be responsible for reconciling these various objectives of preserving nature, economic and tourism development, and the respect of aboriginal traditions. This body will have a membership of five, two appointed by the Inuvialuit, two by the federal government, one of these on the recommendation of the Government of the Northwest Territories, and a chair to be appointed with the agreement of all parties.

The legislation proposed today will provide this national park with complete protection according to the limits set out in the 1996 agreement under the National Parks Act and regulations.

Even if we are in agreement with the principle of this bill, it seems we are being called upon to deal with it rapidly.

This bill was introduced at first reading on Monday, March 30, and here we are today, April 3, at second reading. The documents relating to the analysis of this bill, a press release and a briefing note, are still warm from arriving in such a hurry.

It is interesting to note that the government is assuming the park will be created. On page 102 of Heritage Canada's estimates, Tuktut Nogait appears as one of the three Northwest Territories parks. And yet, Bill C-38 has not been passed.

I think it would have been wiser and less presumptuous to add the word “planned” beside the name of the park. It would take little for us to question whether this was not a breach of the privileges of this House.

We will approve this bill in principle at second reading. But we reserve judgement until we have had time to read the agreements that led to this bill and until we hear the witnesses interested in this bill in the course of the public hearings that will be held by the Standing Committee on Canadian Heritage.

National Parks Act
Government Orders

10:15 a.m.

Reform

Jay Hill Prince George—Peace River, BC

Mr. Speaker, I listened with great interest to the comments about this bill by my colleague from the Bloc Quebecois. As he indicated, Bill C-38 does establish the boundaries for a new national park in the Northwest Territories. Last night the critic for parks from the official opposition, my colleague for Saskatoon—Humboldt, spoke at some length about this legislation.

I had the opportunity to raise a similar issue out of concern for the Porcupine caribou herd. This is another herd of caribou in the far north that happens to be in the western end of Yukon and its calving grounds overlap into Alaska. I raised that issue on September 29, 1995. I think it is quite appropriate that the government has moved to protect the Bluenose herd east of Inuvik.

The Reform Party is supporting this legislation. Comments from the Bloc member indicate his party is supporting this legislation which is moving very quickly through the process so the very fragile environment up north can be protected.

One of the concerns I have is to achieve a balance between the economic interests of the nation with protecting the environment and specific species of plant and animal life. This is especially relevant in the far north where those conditions are very fragile.

I am reminded of a couple of recent events in northern British Columbia. One was when the B.C. government moved to establish a provincial park in an area known as Tatshenshini-Alsek region in the northwestern corner of British Columbia. There was a projected $1 billion mine that was going to go into that region. That ultimately was cancelled once that region was turned into a park.

In the background research for this park in the Northwest Territories some exploration rights had been granted earlier in error to a company called Darnley Bay Resources. Fortunately it did relinquish its exploration rights for that part that was included in the park.

Does the hon. member believe that there is a necessity to achieve a balance to include all the stakeholders, the industry and the people who derive their livelihood from the land, whether it be trappers or hunters or tourists, to ensure that it is not only in the best interests of the environment of the country but so we can achieve that balance between environmental protection and the protection of our economy?

National Parks Act
Government Orders

10:20 a.m.

Bloc

Stéphane Bergeron Verchères, QC

Madam Speaker, I thank my hon. colleague for his edifying remarks on this bill and the creation of this national park.

I believe I said in my speech that the bill of course contains provision for protection of the park's ecosystem. Accordingly, I think my colleague would agree that, in protecting the unique ecosystem of the Tuktut Nogait park, we will be able to turn the park into a tourist site unique in North America.

I indicated that the only similar or comparable site is to be found in the northern Yukon. In addition to the tourist activities that should not only continue but increase and involve the native populations of the territory, I also referred in my speech to the fact that we should involve local populations in the region's commercial and economic development.

I do not think that the bill excludes the possibility of economic and commercial development of the territory, far from it. It simply aims to provide a framework for protecting the ecosystem and the cultures and values of the Inuvialuit that live there. It also makes provision for economic and commercial development, outside of this protective framework.

National Parks Act
Government Orders

10:20 a.m.

Reform

Jay Hill Prince George—Peace River, BC

Madam Speaker, I listened attentively to my hon. colleague's reply. He may have missed the point I was trying to make.

When provinces or the federal government establishes parks there will no longer be any development within those boundaries. A case is the recent mining activities in the Northwest Territories and the new found wealth with the diamond mining activities in jobs and increased economic activities. What I was trying to get the hon. member to comment on is that once the park boundaries are formed, we exclude those types of activities. We will not have mining within the boundaries of that park, no matter what is eventually found in the way of underground resources.

Does he believe that before we establish parks across the country all the necessary research be done so that the country and the people understand very clearly what they may be giving up when we establish the boundaries and exclude industrial activity? I am not denying that this is necessary in this case to protect the calving grounds of the Bluenose caribou herd.

National Parks Act
Government Orders

10:20 a.m.

Bloc

Stéphane Bergeron Verchères, QC

Madam Speaker, I think I now understand better the hon. member's question, and I thank him.

We are indeed faced with a dilemma as to whether we should give priority to the protection of our ecosystem, at the expense of possible industrial development.

It is a very real dilemma. A more in-depth study of the bill by a committee and the hearing of witnesses will help us see just what the implications are.

I believe the bill still allows for development of the land for economic purposes. We have to determine how far this development can go. Is this national park subject to the same restrictions as Canada's other national parks? All this will have to be closely examined in committee.

However, I should remind the Reform Party member that the objectives pursued by such a bill include some basic elements. Fundamental issues are at stake, including the protection of the region's ecosystem, which is unique in North America, and that of the culture and heritage of the people who live in that territory.

Therefore, as I pointed out earlier, there are extraordinary opportunities for economic development that must also be taken into account in assessing the benefits and the drawbacks for local people, when they give up, as the hon. member mentioned, certain rights for the establishment of a national park.

National Parks Act
Government Orders

10:25 a.m.

NDP

Wendy Lill Dartmouth, NS

Madam Speaker, on behalf of my colleague, the member Churchill River and the NDP parks critic, I am very glad to speak on Bill C-38, an act to amend the National Parks Act.

The purpose of this bill is to establish the boundaries for a new national park in Canada's western Arctic called Tuktut Nogait. New Democrats support Bill C-38. Tuktut Nogait national park is an important step toward the completion of the Parks Canada objective for national parks, to protect for all time representative natural areas of Canadian significance in a system of national parks and to encourage public understanding, appreciation and enjoyment of this natural heritage so as to leave it unimpaired for future generations.

Our system of national parks and national historic sites is one of Canada's, indeed the world's, greatest treasures. This noble effort began a century ago with Banff National Park and continues with Tuktut Nogait today. This vision for the preservation of Canada's natural spaces rests on a fundamental principle to protect a representative sample of each of our special landscapes. Canada was divided into 39 distinct national park natural regions with physiology and vegetation as a basis for policy to achieve this goal.

To date just over 60% of this goal has been completed. A great deal of work and political leadership is required to complete the vision. Unfortunately it is not expected that the noble effort of the national park system will be completed by the Liberal government by the year 2000, another failed promise.

Tuktut Nogait national park is representative of the tundra hills, a unique region of the Canadian shield. This tundra landscape includes spectacular river canyons, areas of scientific interest, archeological sites and abundant wildlife. Elevated areas within the park's boundaries are designated as refugia. A refugium is an area with a population of organisms that can survive through periods of unfavourable conditions. Northern Yukon is the only other comparable area of the mainland Arctic with similar biota. Canadians will recall that this government abandoned a glacial refugium in Alberta.

In this park evidence of human use and occupation over the last millennium exists. Protection of the hundreds of archeological sites is imperative. The knowledge garnered from these sites will provide answers to questions on the development of Thule Inuit culture in the regions and the origins of Inuit society.

Visitors to the park will experience a pristine Arctic wilderness. The wilderness, birds and vegetation cover the spectrum of northern species. Abundant caribou, musk ox, wolves, birds and other northern wildlife will be protected by the national park designation.

It was a community idea to protect this area, a portion of the Melville Hills east of Inuvik in the Northwest Territories, which led to a community prepared conservation plan in 1989. The primary goals contained in the 1996 parks agreement were to protect the Bluenose caribou herd and its calving and post-calving habitat and to protect for all time a representative natural area of Canadian significance.

Paulatuk, the closest community to the park, recognized the importance of this area and acted upon the community wishes to preserve this integral part of its history, culture and livelihood. On behalf of the New Democrats I would like to commend Paulatuk for the initiative, dedication and perseverance to establish Tuktut Nogait.

Seven years of consultation and discussions led to the consensus decision of 1996. The boundaries are set out in Bill C-38 in accordance with the 1996 agreement signed by the Government of Canada, the Northwest Territories, the Inuvialuit Regional Corporation, the Inuvialuit Game Council, the Paulatuk Community Corporation and the Paulatuk Hunters and Trappers Committee.

The boundaries for Tuktut Nogait are unique for several reasons. I ask my colleagues to pay attention to what I am about to say on this point. It is important that we understand the very complex origin of this national park to better appreciate the incredible levels of co-operation and consensus building which led to the bill before the House today.

Tuktut Nogait lies within three land claim agreement areas: the Inuvialuit Settlement Region or ISR, which encompasses approximately 58% of the park area; the Nunavut Settlement Region including about 36% of the area; and the Sahtu Dene and Metis claim area including about 6% of the park.

I call upon my colleagues to imagine the consultation, discussions and negotiations that evolved across the years between the different parties united in a common purpose to protect this significant natural area.

Tuktut Nogait national park includes over 16,000 square kilometres. The parties came together around the absolute necessity of protecting the core calving ground vital for the Bluenose herd's survival. The parks name, Tuktut Nogait, means caribou calves in the Siglik dialect, a direct reference to the park's purpose. I also note at this time that this area is important to the Bathurst herd in addition to the Bluenose herd.

The reason for explaining the significance of the consensus forming is relevant when one considers recent efforts to change the boundaries of the park. It is an issue that will arise during committee submissions and will contribute to the final decisions on the ratification of Bill C-38 boundaries as outlined today.

As my colleagues are no doubt aware, there is a magnetic anomaly that straddles the Tuktut Nogait's western boundary. This anomaly is said to rival the Voisey's Bay discovery and, if developed, could be a source of jobs and fiscal rewards to the region and of mineral extraction interests. Some 80% of the anomaly is located outside the park boundaries. In 1994 Darnley Bay Resources Limited of Toronto voluntarily relinquished exploration rights to the remaining 20%, the area within the park boundaries.

Now the developers have changed their minds and Darnley Bay launched a recent effort to delete an approximate 415 square kilometres from the park boundaries.

This may not seem like such a big concern, especially when to most observers looking at a flat map the proposed area the developers wish to delete appears insignificant when compared to the overall scope of the park. Nothing could be further from the truth for several reasons. First and foremost, the thought that it is okay to shrink a national park boundary to permit mineral development is reprehensible.

It would be hypocritical for the government to chastise our American neighbours regarding development impacts upon the Porcupine herd calving grounds in Alaska's Arctic National Wildlife Reserve while allowing development to harm the Bluenose herd calving grounds.

The second reason is that the location of the proposed deletion is crucial to the overall biodiversity of the park. The deleted area includes a section of the Hornaday River, critical char spawning habitat and acknowledged in company reports as part of Paulatuk's summer and fall fishing areas.

The third reason is that it is the summer and fall caribou harvesting area. A founding principle for the degrees of co-operation exhibited by all participants during the consensus process was the need to ensure the continuing provision of traditional sustenance and subsistence for the Inuvialuit, the Sahtu Dene, the Gwich'in and Metis people.

Also the proposed deletion includes the most probable main entry point to the park. Does a mining interest wish to dictate access to the park or collect gate fees? The proposed deletion area is located in the Inuvialuit settlement area. They are in agreement with the developers and the territorial government for exclusion. The Sahtu Dene and the Gwich'in are opposed to the deletion. They fear the impact such development may have upon the core calving and post-calving grounds.

As parliamentarians it is our duty to question the abrupt change in direction, a switch from the preservation of lands and heritage to a wish for development and its impact upon future generations.

Why the sudden need for a deletion, an exemption by one participant that runs counter to the continuing process and perseverance of the other participants? Are extracted ores more valuable than the survival of the 100,000 strong Bluenose caribou herd?

For centuries this herd has helped support northern peoples across Canada's Arctic, spanning thousands of kilometres and dozens of communities. Does one mineral discovery merit the impact upon all native northern peoples?

Why the sudden need to change the boundaries after seven years of consensus building? Will the addition of an approximate 20% in development areas increase southern investment in the project for the benefit of those lucky shareholders involved?

I will take this moment to state clearly that the New Democratic Party is neither anti-mining nor anti-development. We believe, though, that the development can occur and support projects that are environmentally, socially and economically sustainable.

Contrary to recent decisions by the Liberal government such as the Cheviot decision where a federal minister okayed the destruction of fish habitat, the NDP fully support the sustainable development principles as described by the Brundtland commission in 1987:

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

I believe the principle of sustainable development is the reason Paulatuk set out to protect this area in 1989 and led to the bill before us today.

I call to the attention of my colleagues that this is not a recent discovery or find. The first clue to the anomaly was identified in 1955, over 40 years ago. In 1969 the geological survey of Canada described the Paulatuk find, titled the Darnley Bay gravity anomaly, as the strongest gravity anomaly in North America.

The following year a magnetic anomaly was identified coincident with the gravity anomaly. I am not a geologist, obviously. However I can understand the excitement in the mining industry during the early 1990s when sampling of basic sills identified minor amounts of copper, nickel and platinum group elements. At that time things were looking pretty good for extraction and the environmental implications on the Bluenose core calving grounds.

After decades of speculation about a significant mineral find surrounding Paulatuk, exploration permits were awarded to Darnley Bay Resources. In 1994, after the sampling results were favourable to extraction, Darnley Bay voluntarily relinquished those permits within the park boundaries.

Why the change? Is it the depressed metals markets? What became of the founding principles for the co-operation to protect critical wildlife habitat and to preserve a representative example of the Tundra Hills natural region?

Those are the questions and answers we still have to discuss at committee. They are some of the questions and answers we will face as parliamentarians as we defend the 1996 boundaries.

I thank the government for displaying a rare instance of intestinal fortitude and moral conscience in an environmental matter. The minister of heritage has changed direction on park commercialization levels on occasion. The lack of Liberal foresight and planning and a lack of respect for Jasper National Park, a world heritage site, resulted in an international condemnation and a terse letter from UNESCO regarding the Cheviot decision.

Liberal ignorance in habitat protection through the Cheviot decision evolved into legal challenges and Canadians learning about another international embarrassment via their morning newspapers and televised news conferences. Canadians are continually learning about poor Liberal habitat policies and the repeated loss of our reputation as protectors of wilderness areas and stewards of a clean environment.

The decision to protect and to honour the 1996 agreement on the Tuktut Nogait national park boundaries is a rare occurrence for the government and a decision that the New Democratic Party will support.

As Bill C-38 is discussed at committee I urge my colleagues not to be swayed by submissions and witnesses that put forward a variety of arguments to promote boundary changes. As a submitter presents facts and data that suggest 5% of the core calving area can be removed, I ask them to question where that 5% is located and the significant effect that a small 5% slice could have upon the overall Bluenose caribou population; the loss of char spawning areas; where muskox will mate; the further loss of Canada's extremely limited refugium areas; and the impact upon fragile wild flowers and lichens where few footsteps have tread.

When jobs are discussed they should remember the capacity for sustainable development and the unforgiving limits the tundra environment allows for habitat and species recovery, and the centuries required to repair basic intrusion.

When socioeconomics are discussed they should remember the benefits that are presented through eco-tourism and the unique variety of enterprises available to the community: bird watching, hiking, camping, natural appreciation, natural and environmental sciences, archeology and photography. The list continues.

Ten years of studies of the Bluenose herd have identified the necessity for the preservation and the location of core calving and post-calving areas. They should not be swayed by pro-development arguments that more studies are required.

We must protect the current boundaries of Bill C-38, the designation of Tuktut Nogait national park in the National Parks Act for generations yet unborn. To shrink a national park boundary to permit mineral development is reprehensible and should not be tolerated.

National Parks Act
Government Orders

10:40 a.m.

Progressive Conservative

Mark Muise West Nova, NS

Madam Speaker, I rise today to speak in favour of Bill C-38, an act to amend the National Parks Act to include Tuktut Nogait in the schedule of national parks.

The proposed site for Tuktuk Nogait Park is close to Paulatuk, in the western part of Canada's Arctic. In 1989, the community of Paulatuk submitted to the federal government a conservation plan recommending that a new park be established to protect the calving ground of the Bluenose caribou herd.

In 1993 the federal government announced its willingness to establish a national park near Paulatuk. In 1996 the governments of Canada and the Northwest Territories, the Inuvialuit Regional Corporation, the Inuvialuit Game Council, the Paulatuk Community Corporation and the Paulatuk Hunters and Trappers Committee signed an agreement to establish a national park in the Inuvialuit settlement region near Paulatuk in the Northwest Territories.

The agreement also recognized the boundaries of Tuktut Nogait which represent approximately 16,304 square kilometres. It is also important to note that this area represents the Tundra Hill national region, an area not currently represented under the national parks system.

It is unfortunate that it has taken the government so long to bring in a simple piece of legislation that would see the establishment of Tuktut Nogait. In consequence, the government has delayed the creation of long term meaningful jobs and economic growth for the north.

As the members of the House heard yesterday, the Government of the Northwest Territories is reviewing a request by the Inuvialuit Regional Corporation to remove part of the lands agreed upon in the 1996 agreement. What we are talking about here is the removal of 415 square kilometres to permit mineral development within the core calving ground of the Bluenose caribou herd.

My party is not against mineral development but we cannot start carving out parts of our national parks to make mining companies more attractive to investors. The proposed reduction of Tuktut Nogait for mineral development would set a dangerous precedent for this park and other parks that are not protected under the National Parks Act.

I would like to remind the House that we are awaiting amendments to our ore legislation for seven other parks which represent 20% of the national parks system. I want to assure my colleagues that my party will continue its efforts to ensure that our natural heritage is preserved for our generation and generations to come.

We would hope this government would move more quickly in future, especially in light of its commitment of completing the national parks system by the year 2000.

In closing I want to congratulate all of the stakeholders for their ongoing efforts in establishing a national park in the Tundra Hill national region. I thank them for their contribution to the protection of Canada's ecological integrity.

National Parks Act
Government Orders

10:45 a.m.

The Acting Speaker (Ms. Thibeault)

Is the House ready for the question?

National Parks Act
Government Orders

10:45 a.m.

Some hon. members

Question.

National Parks Act
Government Orders

10:45 a.m.

The Acting Speaker (Ms. Thibeault)

Is it the pleasure of the House to adopt the motion?

National Parks Act
Government Orders

10:45 a.m.

Some hon. members

Agreed.

(Motion agreed to, bill read the second time and referred to a committee)

Pension Benefits Standards Act, 1985
Government Orders

10:45 a.m.

York Centre
Ontario

Liberal

Art Eggleton for the Secretary of State for International Financial Institutions)

moved that Bill S-3, an act to amend the Pension Benefits Standards Act, 1985 and the Office of the Superintendent of Financial Institutions Act, be read the second time and referred to a committee.

Pension Benefits Standards Act, 1985
Government Orders

10:45 a.m.

London West
Ontario

Liberal

Sue Barnes Parliamentary Secretary to Minister of National Revenue

Madam Speaker, I appreciate this opportunity to speak today in support of Bill S-3. This legislation offers concrete and well-considered measures to enhance the supervision of federally regulated private pension plans.

As hon. members know, this bill was introduced through the Senate on September 30 last year and was reported back on November 4 with seven amendments. I would like to take this opportunity to thank the Senate committee for its rigorous review of the bill and the thoughtful amendments that were made. I will highlight the thrust of these amendments later.

Updating the Pension Benefits Standards Act 1985, or the PBSA as it is usually called, is long overdue. I would like to explain to my hon. colleagues that the PBSA is the legislation that governs private pension plans in sectors subject to federal jurisdiction. Examples of these sectors include banking, interprovincial transportation and telecommunications.

The PBSA is administered by the Office of the Superintendent of Financial Institutions, or OSFI as it is usually called, on behalf of our federal government. Of Canada's 16,000 pension plans, 1,100 are covered by the PBSA. They represent approximately $45 billion or 10% of the asset value of all private pension plans in Canada.

With the number of Canadian seniors growing rapidly, I want to assure the House that ensuring sound secure pension plan systems has been and continues to be a priority of the government. My hon. colleagues know that over the past two years the government has embarked on a dramatic reform to the public component of the national pension system.

Not only is the old age security program being transformed into a revised seniors benefit, but also more recently there was the federal-provincial agreement to reform the Canada pension plan. These are two of the three pillars of retirement security for Canadians.

Private pension plans represent that vital third pillar. Here too there is a need for action, although much less dramatic since prudent supervision and good governance are the issues that need to be addressed with respect to private pension plans.

As I stated earlier, these changes are long overdue. The PBSA has not been materially revised since it came into force in early 1987. This is in contrast to the federal institutions legislation where the supervisory and prudential systems were significantly strengthened in 1992, 1995 and again in 1997.

There is no question that the PBSA needs to be updated. While most federally regulated pension plans are fully funded, some pension plans have come under financial pressure as a result of both demographic and economic factors. These include the aging workforce and corporate downsizing we have experienced in Canada. These are two factors which make pension funding relatively more expensive for employers.

In this environment there have also been solvency concerns with some plans while others have been wound up without sufficient assets to pay all the promised benefits. In these situations the employer, whether a single employer or an industry group, experienced economic difficulty.

In addition many pension plans made substantial improvements to pension benefits in the 1980s with the expectation that employers would always be able to fund them. This also added to the challenges. In some cases insufficient contributions were made to fund these improvements.

As these problems emerged it became clear that the current prudential and supervisory framework is not equipped to deal with problem plans. The range of powers and regulatory components needed are not there. Bill S-3 meets these challenges. Under this legislation the federal government and the Office of the Superintendent of Financial Institutions will have additional necessary powers to work with plans that are experiencing problems.

I want to go into the basic principles. I want to assure hon. members that these are not patchwork band-aid measures. The measures in Bill S-3 flow from a series of basic principles outlined in the government's July 1996 white paper.

Included are the principles that private pension plans are supervised for the benefit of members, retirees and other beneficiaries; that the pension regulatory and supervisory framework should contain the incentives and safeguards necessary to reduce the possibility that pension promises are not met; and also that early intervention in and resolution of pension plans experiencing some difficulty should occur.

Outside supervision cannot and will not be expected to guarantee that pension promises will always be met nor can it be a substitute for good governance of the plans by the administrators of those plans. Regulation and supervision must be cost effective.

The regulatory framework for private pension plans should not impose undue costs on existing plans or unduly inhibit the creation of new pension plans. Members of private plans should receive adequate information from the administrator concerning the financial condition of their plan. There must be appropriate accountability and transparency in the supervisory process.

I want to discuss the basic principles in more detail. The first principle helps us to focus on what pension plans are. They are really employee benefits.

Employers, and often employees, contribute to these plans but let us keep in mind that employees often have no opportunity to withdraw from their employer plan while they work for the organization. Without the opportunity to cease making contributions, employees must rely on the plan's administrator to make sound financial decisions with their money so that benefits will be available for them in the future. It is precisely because of this situation that the government believes OSFI must have new powers to resolve the troubled plan's problems early on.

Clearly when an employer's economic difficulties affect a pension plan and a plan fails to manage its risks, it is to the advantage of the plan's members, retirees and other beneficiaries to have the situation resolved promptly.

This should not necessarily mean that the plan be terminated. There may well be other approaches and actions that can more fully preserve the employees' contributions and benefits. Yet termination is currently the only supervisory tool available to OSFI. This leads to another closely related point.

It is important that our regulatory approach recognize that the termination of a pension plan with insufficient assets to pay the promised benefits does not in and of itself represent a failure of the supervisory process. Even in vibrant economies, pension plans occasionally terminate with insufficient assets to pay the promised benefits. The health of pension plans is inescapably tied to the health of the pension plan employer and the industry in which it operates.

In a market economy some companies will inevitably encounter problems. This is simply business reality. The corollary then is clear. With insufficient assets to pay all promised benefits, no supervisory system could even begin to forestall any pension plan termination without the authority and resources to oversee all management decisions made by the sponsor.

Even if it could work in theory, such total supervision is neither feasible nor desirable. Without question this is not a viable approach in a dynamic economy like that which Canada enjoys. What is required is a balanced approach that melds appropriate supervision with responsible internal governance.

I would like to highlight one final principle. That is the need for transparency of the supervisory system, a similar one to the financial institutions supervisory system. If the financial condition of a pension plan deteriorates, it is important that pension plan administrators understand the steps authorities could be expected to take. This understanding provides a realistic and credible incentive for plan supervisors to act in a timely fashion. Furthermore the supervisor must have a clearly defined role.

Amendments in this bill to OSFI's mandate include recognition of the importance of OSFI taking prompt action to deal with pension plans in trouble. To complement Bill S-3, a guide to intervention clarifying actions that could be expected in the role of OSFI in various situations has also been introduced. This guide is similar to ones issued for financial institutions.

I would like to move on to another aspect of this legislation. Bill S-3 allows for the future introduction of a simplified pension plan. This measure is intended to help small employers and to foster an environment that provides incentives for the creation of new pension plans.

The low pension plan participation rate of small businesses suggests that the traditional pension plans do not adequately meet the needs and expectations of small employers. The government believes that action is necessary and needed to correct this situation. Bill S-3 opens the door for the creation of a cost effective regime for pension plans below a certain size, for example, one with 250 members.

In a simplified pension plan, financial institutions could propose standard pension contracts containing both general and specific provisions for the small employer. In addition, financial institutions would be responsible for administering the pension plan.

Standardizing pension plan contracts and transferring responsibilities for plan administration to financial institutions will greatly reduce costs for the small employer. The details of this regime will be introduced later through regulations.

Pension Benefits Standards Act, 1985
Government Orders

10:55 a.m.

The Deputy Speaker

I am sorry to interrupt the hon. member, but it being 11.00 a.m. it is time to proceed to Statements by Members.