House of Commons Hansard #117 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was wheat.

Topics

Depository Bills And Notes ActGovernment Orders

7:10 p.m.

Northumberland Ontario

Liberal

Christine Stewart Liberalfor the Secretary of State (International Financial Institutions)

moved that the bill be read the third time and passed.

Depository Bills And Notes ActGovernment Orders

7:10 p.m.

Stoney Creek Ontario

Liberal

Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, it is my pleasure to present Bill S-9 for third and final reading in the House of Commons. This bill establishes a new act to be known as the depository bills and notes act.

The proposed legislation is rather technical in nature but it is extremely important to the efficiency of capital markets in Canada. The proposed new act updates federal legislation to bring it into line with the way that trades and financial instruments are processed today.

As hon. members are aware, advances in information technology are changing the way that businesses in every sector of the economy operate. There is no doubt that the financial sector has probably been more affected by these changes than most.

Competitive pressures in the financial sector are intense. They ensure that new ways of doing business are constantly being found to make financial practices and markets more efficient. The depository bills and notes act is just one measure being introduced by this government to help support and encourage the modernization of our financial sector.

The specific area of activity covered by this legislation is the processing of transactions in certain financial instruments that come under federal law. A key element of modern market practice is the holding of financial instruments in central depositories.

When an instrument held in a central depository is sold, ownership of that instrument is transferred from seller to buyer by means of an entry on the books of the depository. This means that there is no longer any need to arrange for the physical transfer of the instrument from one party to another.

The use of securities depositories has obvious advantages in terms of both the safety and efficiency of transactions in financial markets. While transfers of many financial instruments are already handled in this way, the proposed legislation will expand the list of eligible instruments to include two new types of instruments, namely depository bills and depository notes. Bankers acceptances and commercial paper will now be eligible to be held in a central depository. Bill S-9 also establishes that changes of ownership of these instruments will be affected by making the appropriate entries in the records of the depository by book entry.

This legislation is necessary because the existing rules governing these types of instruments as set out in the Bills of Exchange Act were written well before the establishment of central depositories and still refer to being in physical possession of a financial instrument when describing the rights of the parties involved in a transaction. These requirements of the Bills of Exchange Act have so far precluded the use of a depository for financial instruments that are subject to that legislation.

In other words, because this legislation has not been amended to accommodate modern practices, the full use of central depositories has been held back. The legislation before us, the depository bills and notes act, addresses this situation.

The new act ensures that in law the purchaser has the same legal rights with such modifications as are necessary in the circumstances as a purchaser of a bill or note under the Bills of Exchange Act without requiring the actual delivery of the instrument.

The introduction of these new financial instruments in no way precludes individuals or institutions from purchasing and holding other bills and notes that still fall under the authority of the Bills of Exchange Act.

To distinguish these new types of instruments from other similar securities they will be marked on their face with wording that indicates that they are depository bills and notes subject to the depository bills and notes act.

The benefits of extending the use of central depositories should not be delayed any further. The Canadian depository for securities would like to make bankers acceptances and commercial paper eligible to be held in their depository this fall. Passage of the legislation would allow them to do that.

The introduction of the depository bills and notes act is consistent with the recommendations made by the private sector group concerned with the workings of the international financial system commonly known as the G-30. This group is calling for the widespread introduction of securities depository systems and book entry transaction recording on the basis that they will improve the efficiency of the money markets. This initiative is also supported by all elements of the financial community.

A related technical amendment to the Financial Administration Act has been included in the legislation. The Financial Administration Act permits negotiable instruments such as T-bills and government bonds to be traded in the market. However, there is a technical legal issue regarding the definition of negotiable instrument and whether it includes government debt for which there is no physical certificate. The amendment will make it clear that government debt of this kind can be traded.

Bill S-9 deserves speedy passage and I urge my hon. colleagues to concur so that we may move on to other legislation.

Depository Bills And Notes ActGovernment Orders

7:15 p.m.

Reform

John Williams Reform St. Albert, AB

Mr. Speaker, Bill S-9, an act respecting depository bills and bills of exchange, is one of those complex acts that seem to be of interest only to accountants, stockbrokers, bankers and the type of people who have had to ask for some changes in the legislation in order to improve the efficiency of the agencies they use every day to facilitate the movement of money. That is what Bill S-9 is all about, to ensure the finances of this country flow more smoothly because unfortunately the legal profession has caught up with us and made simple bills of exchange.

When I studied bills of exchange many years ago, it was down to a simple statement about what exactly a bill of exchange was and it was all included on a simple piece of paper, a promise to pay signed by one person to another, and so on. I will not bore members with the exact definition of a bill of exchange.

The lawyers got hold of a bill of exchange and added clause after clause and indemnifications and other rules and regulations to the point now that these bills of exchange are practically in book form rather than a single piece of paper. As a result, when we want to move a bill of exchange or have a piece of paper pass from one to the other, we have to pass a book, a whole raft of papers to ensure that legal liability is covered off and indemnification is covered off and so on. That has become cumbersome in this electronic age and that is why Bill S-9 has been introduced here to improve the situation.

Without getting into long details, the concept of the bill is to leave the big book of rules and regulations and definition of bills of exchange in one central depository and therefore to pass a piece of paper referring to this document in a central depository, saying we agree to abide by the rules and regulations without having to pass the whole book or documents from one person to another as evidence of the debt. There is now one piece of paper saying we refer to all the rules and regulations in the central depository and that is where they will remain and we can refer to them at any time.

I am concerned that perhaps a generation from now this single piece of paper that we now pass as evidence to the central depository record is going to get bigger and bigger and soon we will require a new Bill S-9 with a new single piece of paper referring to the documents which refer to the original documents. Who knows where we are going to end up.

Efficiencies are in order and required. That is why the Reform Party has seen fit to support this bill. We are the party of opposition so we have reluctantly decided that in the interests of efficiency, improved financial markets and the interests of Reform it would be beneficial that we support this bill. On that basis I will close and leave the more complex remarks to my colleagues.

Depository Bills And Notes ActGovernment Orders

7:20 p.m.

Progressive Conservative

Jean Dubé Progressive Conservative Madawaska—Restigouche, NB

Mr. Speaker, I am pleased to join in the debate to Bill S-9, an act respecting depository bills and notes and to amend the Financial Administration Act.

Departmental officials have indicated that the depository bills and notes act is a technical piece of legislation needed to support improvements in the efficiency of capital markets in Canada. The bill is intended to modernize outdated federal legislation dealing with the transfer of banker's acceptances and commercial bills.

The bill addresses mobilization, meaning a physical instrument will be used but will be held in custody by a clearing house or the like until book entries can be made to show transfer of ownership. With the new technology available today there is no longer a paper transfer during a trade. A simple book entry is made. This bill does not actually spell out which one of these two acts is the case. Instead the transaction is governed by the rules of the depository house.

I would like to know whether this is common with similar legislation in other financial markets. For instance, if two individuals entered into an agreement where one's interest is transferred to the other but the depository is not notified of the transaction until just before maturity, who has the legal right to the interest before the custodian of the bill has been notified? Is it the buyer or the seller?

Furthermore, this legislation deals with electronic transactions and pushes the markets further away from the old system of paper trading and any protection offered against the millennium bug or what is now known as the Y2K risk.

A leading economist from New York, Edward Yardeni, has suggested that the Y2K problem is far worse than the American government likes to admit, partly out of the government's fear over lawsuits.

Depository Bills And Notes ActGovernment Orders

7:25 p.m.

Reform

Chuck Strahl Reform Fraser Valley, BC

Mr. Speaker, we have already gone through quite a few of the details of this technical bill and I think most people watching, unless they are in the banking business or are dealing in the buying and selling of depository bills and notes and so on, are going to find this a dry and dusty debate.

I want to point out one thing about this bill that makes me a reluctant convert to agree to it. I do not claim any expertise, but the contents look pretty straightforward. They remove the requirements for actual physical transactions under the depository notes and bills. In other words, we can go electronic as we are heading into the 21st century and all that.

The number of this bill is S-9. S stands for Senate, Senate-9. There are other words that start with S that could also perhaps describe the Senate.

The reason I am not totally happy with this bill is that it originated in the Senate. The Senate has this privilege, but it is interesting that increasingly the government chooses to use the Senate to start the debate on these bills. It is happy to do so because the official opposition is not present in the Senate.

The Senate is filled with good, loyal, elderly statesmen, shall we say, who thrive on protocol, alcohol and geritol and are able in their collective wisdom to give so-called sober second thought. The problem is that this bill is not going there for sober second thought. It went there for the semi-sober first look.

The difficulty that many of us in the House of Commons have with that, all of us on the opposition side, is that commonly bills should originate in the House of Commons. They should go through first and second reading. They should go to committee. They should come back. They should go through the report stage. They should suffer through the amendments. They should endure the slings and arrows of the opposition.

They should go through the close scrutiny this place provides over a course of weeks usually and then having done all of that, they should then go through the Senate. It should not be that type of Senate, but be that as it may, we are stuck with it for now. Then they should go to the Senate. The Senate should give bills that sober second look and then, having done that, they should go for royal assent and away we go. That is normally the way bills go.

This bill originated in the Senate where there is no opposition. The official opposition is not present in the Senate. It goes through whatever machinations go on through there. I do not even know how the system works in that other place. Then it comes here and we are sort of supposed to rubber stamp it. That is what bothers me about this bill.

We are now up to S-9. I do not think we had nine in the entire last parliament and now we are up to nine bills already originating from the Senate. The Senate gets the first crack at it. It gets the first amendments. It does the hearings. It does whatever it is going to do to it all without the official opposition. At the end of it, it is just handed to us and we are expected to get out the rubber stamp, flop the approved sign on it, off to the GG it goes and Bob's your uncle.

Unfortunately we are not able to do that in that proper order. That is why this bill is less ideal than it could be. The government should bring legislation into the House of Commons. That is the proper way to do it. It should be dealt with by all parties in this place because this is a representative place of the Canadian mosaic. This represents people who support the government, people who oppose the government, a diverse group of ideas. No one has the monopoly on the truth, but at least you get a little exchange of ideas here. It goes to committee, the same thing, and so on.

But when it originates in the Senate, the process is wrong. It is skewed. It is wrong. The other place gets legitimacy that it does not deserve. Although I will vote in favour of this bill because the contents seem in order and I believe it will help to modernize our banking industry, the process is wrong. It is flawed.

In that sense the government is thumbing its nose at Canadians, saying it does not matter that we voted in members of the government, members of the opposition. We are just going to bypass that process and go directly to the Senate. Do not pass go. Do not collect $200. Just live with it. That should get them a go to jail card. The big halt should be put on it right there because the process is flawed.

I wanted to talk about the number of the bill, Bill S-9. Every time the government starts a bill in the Senate I will speak against it for that reason alone. That place does not deserve to have the first crack at it. It deserves to be here with us who are elected and not with those who are appointed.

I will support the bill, but I will oppose where it originated.

Depository Bills And Notes ActGovernment Orders

7:30 p.m.

Reform

Mike Scott Reform Skeena, BC

Mr. Speaker, I thank my hon. colleague for his intervention. I certainly agree with everything he had to say. I just want to ask him a question.

When the hon. member looks at the fact that we are already up to S-9 in this parliament—and I believe he is right that in the last parliament we had very few bills that originated in the Senate—does he think that the reason for this perversion of process, the reason we are having so many bills generated in the Senate and coming to the House, is the lack of a parliamentary agenda on the part of the Liberal government?

Does the hon. member think that is the reason this phenomenon is so prominent in this parliament? Could my hon. colleague take a couple of minutes to expand on the parliamentary agenda of the Liberal government?

Depository Bills And Notes ActGovernment Orders

7:30 p.m.

Reform

Chuck Strahl Reform Fraser Valley, BC

Mr. Speaker, I thank the hon. member for Skeena for that question.

There is a paucity of legislation on anything meaningful coming from the government. It is interesting that even on the Senate side the senators are saying “There is nothing for us to do”. I guess that is why the government gives them bills to start there. In other words there is no legislation coming in a timely fashion from the House of Commons, going through the committee structure, going through first, second and third readings, going through report stage amendments, going through votes and off to the Senate.

This pushes the level of credulity almost to the maximum. Even the Senate says there is not enough for it to do. I thought counting flowers on the wall did not bother them at all over there. I thought there was general glee when there was little to do. In fact most Canadians wonder what it is they do there anyway.

They are even complaining there is nothing to do. The reason is—and the viewers at home should know this as well—the legislative agenda of the government is so slim and so weak that not only in the Senate but even in the House of Commons we find ourselves, I would not say killing time but looking for the visionary type bills that can move the country forward. Instead we have housekeeping bills. Again, we are happy to pass the bill, but would it not be better to have a plethora of meaningful bills which would help form a vision of where we want the country to go?

The difference between dreaming and a vision is that dreams are just idle chatter and conversation but a vision is a how-to plan with meat on its bones that can make something happen, that can make the country better. When we do not have meat on the bones we have slim pickings, to use that analogy. We are faced with that again in this session.

It is like the government got elected a year ago and now says “Hey, we got elected. Does anybody know what we should do?” It has been running around since then saying “I am not sure what we should do but here is a housekeeping bill on allowing them to have a physical transaction under depository notes and bills that could be computer driven and not just an actual piece of paper that we hand to one another. There is a visionary statement. That will bring us rip snorting into the 21st century. What will we do with all the vision contained in these bills?”

The truth is that it is just weak. It is flaccid. It has palsy. It has no zip to it. It is viagraless. It has no potency. It has nothing to give it life. Weak, flaccid, limp bills kind of go through the system but do not really have any effect. It is thin soup and slim pickings. It means that we deal with these issues because we have to.

We will deal with them, but there is nothing visionary in this legislative agenda. That is unfortunate because Canadians would grasp on to that. If they could figure out where the government was going they would gladly help it get there. The problem is this bill, notwithstanding the whole legislative slim pickings, does not give enough of a vision statement that Canadians can rally around the flag, so to speak, to take us forward. That is too bad.

The Senate is not helping. It is just trying to get work to do over there and it has said as much. It does not have enough to do. It is wondering what it is supposed to do. It is probably even wondering what its purpose is any more. Besides all that the government has a weak legislative agenda. It is not a visionary agenda. It is the kind of thing that it is difficult to get Canadians excited about when this is the bill we are to stay late tonight to pass hopefully in a few minutes.

Depository Bills And Notes ActGovernment Orders

7:35 p.m.

Progressive Conservative

Peter MacKay Progressive Conservative Pictou—Antigonish—Guysborough, NS

Mr. Speaker, I listened with great interest to the remarks of the hon. member, my friend from the Reform Party.

I cannot disagree substantially with what the member says about the flaccid, weak, thin soup legislative agenda of the government.c I take from his remarks that what he is telling the House and what he is encouraging is that the Senate take a more active role in the parliamentary process and that if we saw more substantive bills coming out the Senate the Reform might perhaps soften its position when it comes to the Senate and its general participation in the process.

We know that on occasion—and we have even seen it in this session—we have substantial bills coming out of the Senate, bills that have been passed and have received the approval of the House, as is often the case and as the process properly works.

I would therefore ask the hon. member if he would encourage the Senate to partake more actively in substantive bills by injecting viagra into the agenda of the other house to work toward bringing more legislation to the floor of this House? If that is the agenda the Reform would like to see take place I suggest that is quite a shift in position for that party.

Depository Bills And Notes ActGovernment Orders

7:35 p.m.

Reform

Chuck Strahl Reform Fraser Valley, BC

Mr. Speaker, it would be more than a shift in a position. It would be a complete lobotomy and I am not prepared to go that far.

I am only pointing out what the Senate says in general, that it does not have any meaningful work to do. We can list some things we think could be meaningful for it. We think there could be a very meaningful role for it in reviewing the appointment process. Right now the Prime Minister appoints thousands of people who seldom get the scrutiny or any scrutiny they deserve. A properly elected Senate could have an effective role in riding herd on the power of the Prime Minister's office.

Another thing the Senate could do is hold hearings on the appointments of supreme court justices, for example; the information commissioner we are now dealing with in this place; or the privacy commissioner, the watchdog on ethics. There could be good roles for the Senate including sober second thought on legislation. It could serve a legitimate role in that regard if it had the legitimacy that an election would bring.

I was not suggesting in my speech that the role should be increased to say that is where the bill should originate. I was quite clear in saying that bills should originate in this place. The role of an elected Senate with the integrity and legitimacy that an elected Senate would bring would give it the opportunity for sober second thought.

I know many of the senators over there right now have said in times past that they feel their own role would be enhanced if they were elected into that position instead of appointed. Right now their situation is a difficult one. In a sense I feel sorry for senators. They have to go through the motions. They have to rubber stamp stuff. They have to go through them before they go to the governor general. I think many of them are starting to question the role and legitimacy of their institution.

I am happy to go through a long list of good roles for an elected Senate, but I would not include in that initiating legislation in an appointed Senate that bypasses the House of Commons as the first legitimate look at legislation. I would not approve that. Nor would it ever pass mustard at a Reform Party policy convention or over a Reform cup of coffee.

Depository Bills And Notes ActGovernment Orders

7:40 p.m.

The Deputy Speaker

The time for questions and comments has expired. Is the House ready for the question?

Depository Bills And Notes ActGovernment Orders

7:40 p.m.

Some hon. members

Question.

Depository Bills And Notes ActGovernment Orders

7:40 p.m.

The Deputy Speaker

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

Depository Bills And Notes ActGovernment Orders

7:40 p.m.

Some hon. members

Agreed.

Depository Bills And Notes ActGovernment Orders

7:40 p.m.

An hon. member

On division.

(Motion agreed to, bill read the third time and passed)

The House resumed from June 5 consideration of the motion 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 third time and passed.

Pension Benefits Standards Act, 1985Government Orders

7:40 p.m.

Reform

Chuck Strahl Reform Fraser Valley, BC

Mr. Speaker, I unfortunately was not part of the debate on Friday. I would point out that this bill has the title of S-3. That is a problem title.

I do not want to go through it again because people have probably heard the argument before. However I want to point out that there are a couple of problems. There are some problems with the bill itself. We have some questions as to some of the privileges the bill will confer on certain people and their ability to transfer funds from pension funds.

This bill originated in the Senate. I point out again that the process is backward. I will explain it to the government again. It should bring bills into the House of Commons. This is where people have been elected to bring in a legislative package. I understand it is the government's prerogative, but the government has to bring bills in here so that opposition parties can have the first go at them. Then they go off to committee. We propose amendments. We hear from experts and other witnesses. We call people before us. We go through the whole process. That is how we devise good legislation.

Following the best legislation that can be created in committee, it comes back to the House for report stage. The report stage allows us to go through it section by section. If it needs improvements we propose amendments. We say “This is how it can be made better. This is a part that is not clear enough or is too ambiguous. Let us delete it”. Collectively we through the whole process. It goes to committee of the whole. We debate. We fine tune. We try to make something better.

Even when we agree with a piece of legislation there is often something the government could say. There are very few perfect bills or perfect people. Mistakes are made and are corrected. We get things back on track and then we go to a vote. That having been done it is sent to the other place and the process is finished off.

However, when a bill originates in the Senate the official opposition is not there because the Prime Minister appoints senators. The Senate is not elected.

Alberta right now, Mr. Speaker, you will be happy to know is going through the Senate electoral process. Coming in this fall's municipal elections Albertans will be selecting a Senate nominee to put forward to the Prime Minister. The premier of Alberta will say, once the selection process is done, that the person the people of Alberta—I will not speak for all Albertans, they are going to speak at the polls, what a privilege—have selected is whoever it might be.

We think it carries the judgment of the people. It carries the judgment of the legislature. It carries the judgment of that region. We would like the Prime Minister, as a first step, to appoint that person to the Senate as the legitimate person to be in the other place.

If the Reform Party happened to be associated with that person then we would have at least some representation there. We would have some idea of what those guys are doing in their spare time. We could at least say when they introduce a bill in the Senate that we had a crack at it.

This bill is like the others. It is a backward process. It will never be legitimized in my mind to go to the other place first. It should come here. I think Canadians understand that. When it is explained at a public meeting, they are asked where they think it should go, to the Senate, where they do not have an inkling of who gets appointed there unless they have long Liberal coattails, or to the House of Commons?

People will invariably say “Listen, I elected you guys to get that job done. It better go there first because that is what your job is”.

When it is sent to the Senate it is kicked around among the old boys' club there. They go off to see Mr. MacEachen, if he is kicking around. They get advice from him. Of course he is not supposed to be there but be that as it may, they will get some advice from him and they will talk about it. I do not know what all they do over there. Then it comes here and we are just supposed to rubber stamp it. I do not think so. It should come here first. Then it can go to the Senate and they can waste their time with it as they see fit.

This is the place for legitimate legislation. Bill S-3 is the third one. We just passed Bill S-9. It means that increasingly the government is using this tactic far more than it did in the last parliament. That is unfortunate and it is a bad trend. That is why I want to speak against that part of Bill S-3.

Pension Benefits Standards Act, 1985Government Orders

7:45 p.m.

Reform

Jim Pankiw Reform Saskatoon—Humboldt, SK

Mr. Speaker, the hon. member for Fraser Valley said that the legislative agenda of the Liberal government is weak and lacks vision.

Would he be willing to share with the House what the legislative agenda of the Reform Party will be when it forms the government in 2001?

Pension Benefits Standards Act, 1985Government Orders

7:45 p.m.

Reform

Chuck Strahl Reform Fraser Valley, BC

Mr. Speaker, it is always a pleasure to talk about the vision of one's own party and to try to communicate to people in this forum and in public forums across the country the kind of things we think Canadians are going to rally around in the next election.

That is always a debate and it will be a debate for another election. Several themes can be found that Canadians will rally around. One increasingly is going to be the fiscal issue.

They will say “What does the future hold? What are you going to offer me? Is there any prospect of tax relief down the road? Can I see that there is a package of ideas? What are you going to do with the surplus? Are you going to continue to create more new programs? Will you lower our taxes and reduce bureaucracy and pay down some of that debt while we have this surplus so that our children and our grandchildren will have some prospects of even lower taxes and less government interference?”

By the next election, people are going to be saying that a $15 billion or $20 billion UI surplus is too high. It is way too high. It entails job-killing payroll taxes. Increasingly parties on this side of the House are saying that that surplus is too high. It hurts jobs. It hurts families. It hurts entrepreneurs. It has to be cut back. There is the whole fiscal package.

Second, I have talked about some of the democratic and parliamentary reforms I think Canadians are more than willing to embrace. I talked earlier about the Senate and the fact that Canadians do not believe there is any legitimacy to that other place.

Besides Senate reform which is obvious, people are going to look for the democratic and parliamentary reforms that will give them the faith that change is possible. For a change they will hold the reins on the politicians they send to Ottawa.

That is going to involve things like the use of a referendum when people want to bring that forward so that they can have an actual say on these issues. It is going to mean freer votes in the House of Commons where people do not lose their jobs or lose their positions just because they happen to vote against the government or for a piece of legislation or defeat a bill. It does not have to defeat the government. There will be some democratic changes.

People are going to ask what is going to be done with the thousands of appointments. I looked through the Gazette the other day and I saw as bold as brass the name of the person I defeated in the 1993 election. He is now the chairman of the board of referees of the UI fund in my region. He was defeated in 1993. He is a Liberal. He was defeated. Of course all Liberals were defeated in my area. They get used to it. As a payoff for this fellow the Prime Minister says “Who have we not looked after lately? That guy who was defeated back in 1993 has not done any work lately so how about we give him a job as chairman of the board of referees?” And they just did it.

I think Canadians are right to ask why is it that all the defeated Liberal candidates get jobs at taxpayers' expense. “I turfed that guy out. I did not give him a job. He did not have my confidence and now he has got a job”.

Third, when we talk about the vision of the country, people are going to ask what is it that we can offer to Canadians from coast to coast that they will rally round when it comes to the division of powers and the future of our country. How are we going to handle the provincial, federal, municipal power structure in this country. How are we going to handle that to help us to bring us together as a country yet not cause division between provinces like we have had too often over the last few years? That is a legitimate question.

One of the first things we would do is recognize municipal governments as one of the first levels of government closest to the people. We should bring those people in when we have federal-provincial talks. We should have representatives, not thousands, but representatives of municipal governments at those tables.

For example we say we are going to have this new interprovincial-federal agreement that has to do with some kind of distribution of some sort of services, maybe a CAPC program, some sort of program that has federal dollars involved, organized by the provinces and administered by local governments. The CAPC program is a perfect example.

Rather than give the late night phone call to the municipalities, somewhere along the line we should have them in at the start and ask “How can we make this program work for you? How can we tailor it so that it has flexibility for you?” Let us get the municipalities involved in the big picture as well as just in the administration of the local fire hydrants. They need to be part of that and I think we can help there.

The whole process of the division of powers between the provinces and the feds is a big issue that can unify the country. We can say we are going to make this place focus on a fewer number of chores but we are going to do them well. Then we will give over to them a whole bunch of other packages including control of culture, language and health care. All those things are going to be left with the provinces because constitutionally that is where they should be.

We are going to do fewer things but we are going to do them well. We are going to do national defence. We are going to make sure that interprovincial trade barriers are struck down. We are going to have international trade. We are going to have international agreements, WTO and GATT and their successors and so on. We are going to look after this, they are going to look after that. We will not tromp on their territory, but they should respect that ours is going to be held firmly as well.

Those are the kinds of things that when people ask if it will help them get a job, we can say yes it will. It will help to secure their future so that not every level of government is interfering with them. We will help them do that. It will lower their taxes so that they can look after their families, so that they can start and keep a business going. We will make it more democratically accountable so they can have confidence that the people they send to Ottawa will have a real impact and that they will be able to give them direction. They will not have to just salute the flag and obey the party line.

When I talk to people. those are the kinds of things they say they like. They ask to be convinced that we can pull it off, but at least it is a vision different from what we have now. In the next election, if we are able to get the discussion on to those big issues, the Reform Party will do perfectly well. More important, the country will do well because those issues need to be settled so that people can move forward with confidence in the future and not just say it has to be the same old way it has always been because that is just the way it has been and how could we ever change it. We can change it. It can be better. All political parties would do well to make those positive changes rather than say the status quo is the way it has to be.

Pension Benefits Standards Act, 1985Government Orders

7:55 p.m.

Progressive Conservative

André Harvey Progressive Conservative Chicoutimi, QC

Mr. Speaker, I have two short, very objective questions for my colleague, for whom I have a great deal of respect and with whom I enjoy working, if he wants to return jurisdiction for certain matters, including language, to the provinces. I ask him whether it is not the federal government's role to protect minorities, because our track record on minorities in this country is not too wonderful.

That is the first point on which I would very honestly like his opinion. It does not seem to me that giving the provinces complete responsibility will be much of a guarantee for our minorities.

Second, and this is my final question, I would like to know which article in his party's new electoral platform has to do with its partnership with Quebec's separatists. What promise would he like to have in his party's next electoral platform? There does not seem to be much promise in this, in my view.

Pension Benefits Standards Act, 1985Government Orders

7:55 p.m.

Reform

Chuck Strahl Reform Fraser Valley, BC

Mr. Speaker, those are two issues which do not dominate the discussions out in the area where I live. The linguistic issues we deal with are somewhat different than the ones we deal with in parliament, but nonetheless I am happy to talk about them.

In my area the linguistic issues are how many people who speak Punjabi do we need in our local hospitals? That is a linguistic issue from Abbotsford. How can we provide services to the couple hundred thousand unilingual Chinese immigrants in the lower mainland? That is a linguistic issue in the lower mainland. When we talk about linguistic issues on the west coast it is a far different issue than it is here. The issues that dominate the national media so to speak do not dominate our local issues at all. They are just not commonly talked about.

I take it the member is talking specifically about the use of French and English, the two dominant languages in Canada and the role of the federal government in protecting minority rights. The Reform Party has always said that the federal government does have a role in the protection of rights of individuals but not in the promotion of the culture or language in a particular province.

For example, in the province of Quebec where the member comes from the role of the federal government under a Reform government would not be to promote the French language or culture. We think it is a dynamic language and culture and it is a great thing for Canada and for Quebec. However, the promotion of culture and language is a role of the provincial government.

The role of the federal government is restricted to the protection of minority rights. In other words if someone is using the heavy hand to steamroll over a minority right wherever it might be in the country, then the federal government does have a role to step in.

The promotion of language and culture is a provincial responsibility. There should not be an item in the federal government that says it is going to spend X amount of dollars promoting culture in any of the provinces. It just will not happen. That is a job which should be left with the provinces and we are not going to interfere in that.

It gives the provinces the assurance that the money they spend and the efforts they make are going to be directed as they see fit. It means that people in all regions of the country are not going to have a policy that often makes no sense at all in the lower mainland of British Columbia be the same policy as that in Chicoutimi. It just does not mesh. One policy does not fit all.

In British Columbia, at least, I can say that the current government policy is a real puzzle which says that it is the one size fits all national policy on culture and language. In the lower mainland they just look at one another and say “Where are these people coming from?” It just does not make a lick of sense. We have all kinds of linguistic problems, but also linguistic opportunities because of the cultural diversity that we have in the lower mainland. We take advantage of that. We have a window on the world because of the diversity in the lower mainland.

The Official Languages Act, for example, is so irrelevant in the lower mainland that people really do not even know what it is that anybody could even be conceivably talking about. They just do not understand how that policy is relevant in the lower mainland, and it is not relevant.

There are some separatists in Quebec who are hopeless to deal with. They want to leave Canada for every real and imagined problem. They just say “Everything is hopeless. Nobody loves me. I'm going out to the garden to eat worms”. That is their response to everything.

There are, however, other people in Quebec who over the last 20 years have said “I am not really a separatist, but I am so frustrated with a federal government that says this is the way it has to be”. This is federal-provincial jurisdiction, and so on, and nothing can change. It has to remain so forever. Many of those people say “Is there any other option but separatism?” We say to those people “Yes, there is. There is a troisième voie. There is a third vision, an option, that is not separatism, but it is not the status quo either. It is something better, but different than what we have now”. Those are the kinds of people we want to talk to. Those who say “We are going to leave because we don't want to talk to anybody. We are not going to debate. We are never going to argue”, we cannot talk to them because their minds are made up.

Pension Benefits Standards Act, 1985Government Orders

8 p.m.

Reform

John Williams Reform St. Albert, AB

Mr. Speaker, I am pleased to continue the debate on Bill S-3. I listened closely to the comments made by my colleague for Fraser Valley and of course the Reform Party endorses what he says, that we do not like this bill coming to us via the Senate. The bill should have been introduced here in the House of Commons. In that way the government could get the real views of the official opposition rather than the view of some senator who has been firmly entrenched down the hall for many years.

That being said, the bill does have some good points. The Reform Party is not unduly opposed to this particular bill. It will regularize and strengthen pension plan supervision by the Office of the Superintendent of Financial Institutions to ensure that the plan holder's funds are protected as best as possible and managed as best as possible.

In this day and age of small business wanting to provide better benefits to their employees, it will allow small business to set up pension plans at a much reduced cost by basically adopting a template that is laid out by the government, by administering it themselves rather than a trustee and so on.

These things of course we endorse in the Reform Party because we believe that strengthening the free enterprise system is beneficial. Strengthening benefits to employees is beneficial. To provide them with job security and real benefits in their employment is beneficial and this plan goes a long way in doing that.

It also deals with the issue of surpluses in plans. Some plans have done very well in the stock market of late. Of course, it is not just pension plans that have done well in the stock market these last number of years. Individuals, as well, have made all kinds of money.

Bill S-3 deals with distributing surpluses. It says that if there is a vote of two-thirds of the members in favour of a particular proposal then that proposal will take effect. If the proposal is to return the surplus to the employer, then that is exactly what will happen and the employer will have a refund of its contributions, or even have access to the surplus in the plan even though it did not contribute to it in the first place. That is done by vote of the membership and it is a reasonably democratic process which I do not think we would have fault with under most circumstances.

However, there is one particular circumstance that does come to my attention which is the conflict of interest for the Minister of Finance. The first thing we have to point out is that the motion introducing Bill S-3 in the House of Commons was a motion proposed by the Minister of Finance. That gives me a bit of concern because the Minister of Finance, as we know, is a very successful businessman, as well as being the Minister of Finance and a parliamentarian.

It is common knowledge that the minister was the president of the Canada Steamship Lines and is a major shareholder in that organization. Like many employers, Canada Steamship Lines has a pension plan for the benefit of its members which has a surplus that I am sure most people would be proud of. It has a surplus in excess of $100 million. The question is: Where does that surplus belong?

Bill S-3 will create a process by which the ownership of the company can have access to the fund. I believe that the Minister of Finance has placed himself in a conflict of interest position by virtue of the fact that he proposed the bill. His company, and he personally as a major shareholder of that company, could potentially benefit from this bill once it passes the House of Commons.

We talked to the ethics commissioner and he felt that it really would not have any impact on the Minister of Finance because his pension was registered under a different act. We thought that if that was what the ethics commissioner told us, then perhaps that was the end of the story. We have faith in the ethics of the ethics commissioner, or I thought we had faith in the ethics of the ethics commissioner.

However, over the years we have raised some serious doubts about that very point right here as members of the opposition. I again raise the issue because the financial statements of the Pension Fund Society of Canada Steamship Lines Limited annual report, December 31, 1996, state that the plan is registered under the Pension Benefits Standards Act, 1985, registration No. 55006. Bill S-3 amends the Pension Benefits Standards Act.

Therefore, the ethics commissioner is absolutely wrong or he does not know his ethics. That is a serious point.

To further strengthen my argument, I took a look at the bulletins put out by the CSL pension fund. The October 1997 bulletin regarding the plan surplus states:

We expect Bill S-3 to be passed as early as December but more likely in early 1998. The regulations which ultimately will accompany the bill are not likely to be submitted until after its passage. Until we see the regulations we cannot determine how the Society will be affected.

It goes on to state:

We can only reiterate our previous advice that as yet there has been no decision to proceed with a surplus distribution proposal and no surplus distribution proposal will occur without advice to members and full consultation and agreement thereafter.

The bulletin is from the plan to its members and specifically refers to the fact that Bill S-3 is very much in control of their pension plan. Therefore, the ethics commissioner is quite wrong in advising us to the contrary. Also it quite specifically refers to the fact that they intend to have a distribution after the passage of Bill S-3.

I come back to my point that the motion to have the House deal with Bill S-3 was introduced by the Minister of Finance. I think the Minister of Finance should clarify his position regarding Bill S-3.

While he has brought down budgets and balanced the budget of the Government of Canada, which is a great achievement on his part, we would not want his reputation to be tarnished in any way, shape or form by the fact that he has allowed his office, his position and himself to be compromised by a small thing such as Bill S-3.

As I said, the Minister of Finance, first, owes this House an explanation as to why he introduced the bill and why it was not introduced by anyone else. I understand that the Minister of Industry introduced a bill in the previous parliament. It was virtually identical to this bill and it was introduced by the Minister of Industry. Why the change?

At the same time, I think that the Minister of Finance would not do anybody a service if he voted on this bill when it comes up for a vote. These are important issues.

In conclusion, the fact that it comes from the Senate is an affront to this place. The technical part of the bill has significant merit, but it also has dealings with Canada Steamship Lines of which, as we know, the Minister of Finance is a major shareholder.

By virtue of the documents that I have quoted from here today, there is no doubt whatsoever that the pension plan of Canada Steamship Lines is governed by the Pension Benefits Standards Act and the intent after this bill goes through is to introduce a motion to distribute the surplus which, as I mentioned, is in excess of $100 million and somebody stands to benefit a great deal.

That is why I would hope that the Minister of Finance would explain his position to this House.

Pension Benefits Standards Act, 1985Government Orders

8:10 p.m.

Liberal

Ivan Grose Liberal Oshawa, ON

Mr. Speaker, a lot of what has been said here tonight I consider to be blather. To discuss it in this House at this time is my idea of having nothing to do. But the member opposite raised a point that I think should be addressed and that is the Minister of Finance's ownership of shares in Canada Steamship Lines.

As the member opposite knows, that ownership and those shares are in a blind trust. That is the law. If the member opposite wishes to challenge the validity of that blind trust, I would suggest he do it rather than doing it through the ethics commissioner, and I would also suggest that he do it outside this House.

Pension Benefits Standards Act, 1985Government Orders

8:10 p.m.

Reform

John Williams Reform St. Albert, AB

Mr. Speaker, first, I did not challenge the ethics of the ethics commissioner and, second, I asked the Minister of Finance to explain his position to this House. I did not accuse him of anything whatsoever.

We all know that prior to his career in politics the Minister of Finance was the president of Canada Steamship Lines and presumably placed his shares in a blind trust. If I were the Minister of Finance I would be very surprised to find that these shares were all gone when I left office, returned to private life and checked the blind trust to find out what was in there. I am sure if he finds that the shares of Canada Steamship Lines are gone he will be asking somebody for an explanation.

Perception is important and I ask that the Minister of Finance provide this House with an explanation.

Pension Benefits Standards Act, 1985Government Orders

8:10 p.m.

Stoney Creek Ontario

Liberal

Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, during debate on this legislation on Friday of last week the member for Elk Island put forward a series of questions concerning Bill S-3 and the Minister of Finance which were similar to the statements made by the hon. member for St. Albert.

The member asked, so I will reply, and I would like to reply on the record.

First of all, at no stage of the process was the Minister of Finance involved in the preparation of Bill S-3, nor did he have discussions with officials with respect to its content, nor did he receive representations on its impact. Indeed, the Minister of Finance specifically requested that the department not involve him in any aspect of this legislation whatsoever.

I would like to quote directly from a memorandum prepared on October 4, 1995 by then deputy minister of finance David Dodge. The memorandum was addressed to the Minister of Finance and copied to the then secretary of state for international financial institutions and read as follows:

The purpose of this memorandum is to advise you that the Office of the Superintendent of Financial Institutions is dealing with a matter in which you are in a potential or apparent conflict of interest and therefore should not become involved.

In your letter of March 3, 1994, you asked that you not be involved in any discussion or decision making process involving Passage Holdings Ltd. This matter involves the pension plan for members of the Canadian Maritime Officers Union; beneficiaries of the pension plan include persons employed on ships owned and operated by the CSL Group, a subsidiary of Passage Holdings, and the CSL Group is a contributor to the pension plan. OSFI has not as yet forwarded any documents to you and, after discussion with the office of the Ethics Counsellor, Departmental and OSFI officials have been instructed to ensure that you are not to be involved in this matter in any way.

In this case this may not be sufficient, as the issues may become public, or the persons involved may seek your assistance. Mr. Peters (then secretary of state) is aware of this matter and has been briefed by OSFI officials as part of the responsibility you asked him to assume for the Pension Benefits Standards Act. Should you be asked any questions in the House, or receive any inquiries directly from the public, you should decline to become involved and allow Mr. Peters to respond on behalf of the government.

I am forwarding a copy of this memorandum to the Ethics Counsellor and the Clerk of the Privy Council so that they are aware of this situation.

In keeping with the spirit of openness and transparency the finance minister has adhered to, I would certainly make the document available to other members of the House.

Accordingly Bill S-3 was first introduced into the House in 1995 under the sponsorship of the Minister of Industry. Following the 1997 general election it was reintroduced directly in the other place by the Leader of the Government in the Senate.

Throughout the process the Secretary of State for International Financial Institutions has taken responsibility for the management of the legislation within the Department of Finance and with the Office of the Superintendent for Financial Institutions.

I would simply reiterate that there is no basis whatsoever for any suggestion of conflict. The minister has remained entirely uninvolved with the handling of Bill S-3 and has taken every step necessary to remove himself from any aspect of the bill.

I trust this puts this matter to rest.

Pension Benefits Standards Act, 1985Government Orders

8:15 p.m.

Reform

John Williams Reform St. Albert, AB

Mr. Speaker, the previous speaker made specific reference to the fact that the ethics counsellor had been consulted and had rendered his opinions and so on and so forth.

My notes state that we spoke to the ethics counsellor on January 30 about the minister's involvement or lack thereof with the legislation. The ethics counsellor answered that the Canada Steamship Lines pension fund was incorporated under the Pension Funds Societies Act under the auspices of the Department of Industry and would not therefore be directly affected by the Pension Benefits Standards Act.

That is why in my speech I made specific reference to the ethics of the ethics counsellor who obviously was quite willing to give us the wrong information, to mislead us in our assessment of the situation. Obviously he was involved in a much earlier situation and knew the problem related to the Minister of Finance. That demonstrates the lack of ethics of the ethics counsellor.

I reiterate that the motion was introduced in the House by the Minister of Finance. The parliamentary secretary tells us that the Minister of Finance did everything in his power to remove himself from the bill, yet he could have quite easily had another minister or even the secretary of state introduce the motion. Obviously he preferred to do it.

I am not sure—and I am talking about appearance and perception being very important in these matters—that the secretary of state would be sufficient. He is an assistant to the minister. The present secretary of state was appointed by cabinet proclamation pursuant section 11 of the Ministers of State Act first past by Prime Minister Trudeau in 1970.

Section 11 of the act tells us that the duty of the minister is to assist the minister or ministers having responsibility for any department and states that the secretary of state will make use of the services and facilities of the department. Therefore we know that the secretary of state has full access to Department of Finance officials and offices.

Further, on June 25, 1997, the Gazette states that the secretary of state was appointed pursuant to section 11 and the details of the duty of the secretary state are to assist the Minister of Finance in the carrying out of his responsibilities. Therefore the secretary of state is not removed from the Minister of Finance but is an assistant to the Minister of Finance.

I again raise the question and ask for confirmation of why the Minister of Finance introduced this motion in the House of Commons when it could have been introduced by the Minister of Industry, as it was previously, if the Minister of Finance specifically knew that he had a definite conflict in terms of the particular bill?