House of Commons Hansard #17 of the 37th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was pension.

Topics

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12:40 p.m.

Canadian Alliance

Randy White Langley—Abbotsford, BC

There we go. That is from the NDP. Basically she says yes. There we go. If it is a non-union company then that would be out of the investment portfolio of the CPP.

Could we imagine those kinds of values being brought in on behalf of our seniors who are waiting to retire and waiting for a certain amount of money to come to them at age 60 or age 65? I just cannot believe that we are facing this kind of logic here in the House today when we have so many better things to do. Quite frankly, this is going nowhere. There is little interest in it.

What we have today is a major catastrophe facing this nation on the ethical values of a government. Yes, we have concern over the funding of the Canada pension plan, yet these people across the way in the Liberal government have basically stolen $100 million or better and thrown it out the door. If we wanted to really do something for the Canada pension plan, we would go over across the way and say to them that if they would just put a little more ethics in their own activities, we would have a lot of money for seniors and could put it in the right direction. To stand here today in the House and to speak to some kind of value process perceived by the NDP in the investment portfolio of the Canada pension plan, I just cannot believe it.

Mr. Speaker, I am splitting my time with the member for Red Deer.

I want to speak about a couple of other things. The greater choice of the future of individuals lies in their ability to invest on the way through life. I would like to say that our party is in favour of looking at better options for investment, not just CPP, but options that perhaps would give better tax options to those who have RRSPs, greater flexibility to an RRSP style of fund, greater potential for increased income in their later years as opposed to reliance on just the Canada pension plan.

As we move into the next decade when we are going to see the Liberals replaced, I think we are going to see more of government potentially looking at seniors and how best they can be treated in terms of the maximization of their income at a fixed income level. I can assure the House and all those who are listening that it does not include a Canada pension plan that is based on investing in companies that have labour practices suitable to the government, contribute to environmental degradation, or whose conduct, practices or activities are similarly contradictory to Canadian values.

I also have invested in a number of environmental organizations over the years. Yes, I think that was my choice because I liked the kinds of products and the kinds of things they were doing in the environment, but also because I looked at the future growth and potential for myself and my family. It was not solely based on the fact that “it is a green plan, therefore I will invest”. There are many companies that are environmentally friendly that could not make a buck if they were in business for 40 years.

I can only say that I am disappointed that this kind of motion has been put forward to the House with such a crisis facing this country. I am also disappointed that some NDP members, if not all of them, are out there saying that this is the kind of logic they would put forward for all of the people retiring in Canada and this is what they would do for them. This program would be broke in a week.

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12:45 p.m.

NDP

Bev Desjarlais Churchill, MB

Mr. Speaker, we see today why we have two opposing views and two different parties representing different values within the House of Commons. I will comment specifically on what my colleague from the Conservative Party said. Actually, I am really pleased that there is such a difference between our views on things.

He says it is important that we deal with the ethical issues of what the government is doing because of the unethical things it is doing, but if we are going to make a buck it is okay to take Canada pension dollars and invest in unethical practices. Let us take, for example, one of the companies that is being accused or that we are pretty sure received some dollars in an underhanded manner from the taxpayers of Canada. Does he think it is okay that pension fund dollars should then be invested in those companies? How ethical is that? Maybe that is what his principles and values are built on. Mine are a whole lot stronger.

He suggested that it is wrong to believe in investing in ethical funds. I would suggest that if we put this to a vote of Canadians, they would tell him wholeheartedly that they do not want to be part of that, that they do not invest in companies that use four year olds to make rugs. That is reality. This is not something the NDP has made up.

International labour groups around the world have specific guidelines that they work with. If the Conservatives could get their heads out of the sand and stop wanting profit at any cost, they could look at ways that we believe should happen where one can get the profit. We are not suggesting not making dollars off the pension plans. We just think there are better ways of doing it than ripping off young children, than ripping off women and children in the world who are abused and used just because of who they are, so that we have some values. I would suggest--

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12:50 p.m.

The Acting Speaker (Mr. Bélair)

The hon. member for Langley—Abbotsford.

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12:50 p.m.

Canadian Alliance

Randy White Langley—Abbotsford, BC

Mr. Speaker, I must be missing something here. Is there any company in Canada that uses four year olds to make rugs? I am not aware of it. This kind of standard for investment in the Canada pension plan, if that the basis on which the NDP is working, I do not know. I do not know of any company in Canada that uses four year olds as child labour.

The fact of the matter is that the NDP has a disastrous record of investment in this country when it has briefly formed government. Its management style is based on issues like this, where the end result is that not only can it not make money, but it loses disastrous amounts of money and its spending efforts are usually worse than that.

Like I say, it can put this kind of motion to the House today, but there are big things facing this country right now and I wish the NDP would get along with the program and stop with this kind of philosophy where it thinks it is going to change the whole world of investment based on its values, because its values, quite frankly, within the operations and the investment portfolios of this nation, just do not fit.

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12:50 p.m.

NDP

Bev Desjarlais Churchill, MB

Mr. Speaker, there is no question that we would not fit under those types of guidelines, because we do believe that values and ethics count.

For the record, the Conservative member may not realize this. I was not talking just about Canada, because our pension plan invests outside of Canada. He may not have realized that. It does possibly invest in companies that would use four year olds. It does possibly do that and, quite frankly, there is nothing to stop it from doing that. Under his way of doing things, there should not be.

I use this as an analogy. Let us say that Canada has a law against cloning. However, our pension plan funds can then be invested in firms that are cloning somewhere else. What kinds of values or principles are those? Those are the values of the Conservative Party. They were the values of the Alliance Party. They were the values of the Reform Party. And it is time things changed, because they are not the values of Canadians.

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12:50 p.m.

Canadian Alliance

Randy White Langley—Abbotsford, BC

Mr. Speaker, as long as we do not clone the NDP, I guess we are okay here.

When I talk about investing, I do so on the a basis of knowledge. My concern is with this kind of irrational process that is being presented here today. I do believe I am right when I say, for instance, the CEO and executive staff of a company believe in the traditional definition of marriage, then in their mind the company should not really invest in something that is contrary to their values, if they were a government, that is an absurd point of view.

There we go again. They are acknowledging that I am right, basically. The investment portfolio business is a complex one and a needy one. All I could ask is that the government try to spend its money a lot more wisely than it has in the past and perhaps it could put a few of these dollars into the Canada pension plan.

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12:50 p.m.

Canadian Alliance

Bob Mills Red Deer, AB

Mr. Speaker, I, like the previous member, wonder why we are debating a motion like this when families are going bankrupt because of the agriculture crisis and when we have so many international problems with which we could be dealing.

I would like to put a different tone on this and talk about what we might do with the Canada pension plan as opposed to the motion itself.

We get kind of tired of the NDP's rhetoric that business is bad, Americans are bad, banks are bad, everybody is bad except them. It is interesting that it talks the line but basically it wants to share everybody else's wealth except for itself. It is sort of like the leader of that party coming for a free lunch every day when he has not even been elected to this place. The NDP members are on this gravy train and want the free lunch, which to me seems to be NDP philosophy.

They pride themselves on being the representatives who care about everything but let us look at their examples in B.C., in Saskatchewan and in Ontario for four years. Fortunately, however, Ontario was smart enough not to re-elect them ever again. It has been a disaster. I myself am a refugee from Saskatchewan. I graduated from university and got out under the wire at night to get away from that sort of socialist sharing of someone else's wealth by a party that has no concept of how to run a government or anything about it.

We have a culture of corruption going on across the way and one would think that would be what we would be talking about today.

CPP, as we all know, started in 1966. That was the period of time when all of us were told that government would take care of us from birth until death, that it would take care of everything: health care, pensions, jobs, funerals, everything. Much of society bought into that.

When the Canada pension plan was designed in 1966 we were told that the government would only have to collect about 5.5% of our income to take care of our pensions for the rest of our lives. The demographics of 1966 would have worked but in 1967 the two designers of the plan said that it would not work. They said that the government had made a mistake, that its calculations were wrong and that its modelling was wrong. They said that it had a demographic problem coming and that in 30 years this thing would go bankrupt.

Does anyone know what happened to those two economists? They were both fired. One of them now lives in Winnipeg and is quite willing to testify before the House and its committees at any time about what a horrible mistake the government made in the design of the Canada pension plan.

By 1988, exactly what the economists said would happen, happened and it was bankrupt. At that point we had to raise it over the next five years to 9.9%. In another 10 or 15 years, by 2015, we will have to raise it to 14.5% to make it sustainable. We are talking about taking 14.5% of every young person's salary and putting it into a pension for them many years down the road. The reason we have to do that is because of our demographics and because of all those seniors.

I put to the House that at that point in time young people will be saying “Whoa, we are not going to keep paying like this. If it is 14.5% now, where are you going and will there be anything there for us?” The whole question becomes whether there will be.

If we were to talk to businesses we would find out that they cannot afford to put in that kind of money and still hire staff. Ninety per cent of this country is run by small businesses. A small business cannot afford to put aside that much extra for payroll deductions so it just does not expand. It does not hire those extra people because it cannot afford those payroll deductions.

As a result, not only are our young people threatened with a 15% deduction but we threaten them with the potential of fewer and fewer jobs because businesses just cannot make it with those deductions.

It was interesting when I went out at about five in the morning to talk to about 150 oil guys who had just come off their rig. Their boss had set up coffee and donuts for them so they could listen to a politician for 15 minutes. I told them all that I knew they had just got paid and that I wanted them to look at the deductions on their pay stubs. I then asked them to ask themselves what they were receiving for each of the deductions.

I then asked them to stop at the CPP deduction so we could talk about it. Most of the men in the room were under 30 so I ask them if they thought the CPP would be there for them at 65. I also asked them if they were prepared to pay all that money. I told them that if they were to invest that money privately they could have a lot of money down the road in some 35 years from now.

Following up on that, I decided to take a trip to Chile and take a look at its pension plan. I started in Santiago and visited its bureaucracy which privatized, I think, in 1967 or 1968. It offered its people the option of a government run plan or a private plan. Everybody under 45 at that time opted for the private plan and everybody over 45 stayed on the government plan. That makes sense because obviously the people at 45 did not have time enough to invest and so they stayed on the government plan.

I spent three weeks looking at that but I do not have time to give all the details. However today over 90% of Chileans are on the private plan. The government plan still exists and is still administered and regulated by government but it is also a private plan.

It was compulsory that 10% of one's salary went into the pension plan. About six or seven years ago people were given the option of putting another 10% into the plan, which was 20% of their salary, and it was tax deductible. It was a way of saving money for retirement and the people themselves did it.

Under the plan they have plans A, B, C or D. It is set up by the government and each one contains a portfolio of investments. Plan A is very conservative. It is all of the blue chip stocks. Plan D is much more adventuresome and has a much greater chance of winning or losing. People choose either plan A, B, C or D and every three months they receive a statement.

I thought it sounded pretty good. I did a rather unscientific poll. I brought along a translator and decided to find out what people thought of their pension plan. I went to markets, to wealthy segments of Santiago, to a poor section and to a slum section. I told the people that I was a member of Parliament from Canada and that I wanted to know about their pension plan. They looked at me as if I were crazy but it was interesting to hear what they had to say. It did not matter their socio-economic position, people told me to wait a minute and ran into their houses. They came back out with their cards. I learned pretty quickly what the card was. It was their investment card. Every three months they received a statement showing that they had invested x number of dollars in shares under whichever category they had chosen and then it shows how their stock is doing. One guy told me that he bought his groceries at such and such a chain because he had those shares.

That has provided a $25 billion capital fund within the country that is invested in Chilean businesses and it prevents them from having to borrow money externally. It helps the country and the people. They are proud of it. They have a pension plan that is secure and it is theirs.

With the Canada pension plan we throw money into the well and it is for people who are retiring today. What about the young people sitting here? Where is their money going? Will it be there for them?

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1 p.m.

NDP

Bev Desjarlais Churchill, MB

Mr. Speaker, I do not know, but maybe grey matter does not work the same way in people.

I was in Chile as well. When I was there, people asked us about our public pension plan because their plan was not working. Money was being invested through private companies and those companies made the money. There was not enough money to provide pension plans for Chilean workers.

Who should Canadians believe? Should they believe the Conservatives, Alliance, Reformers who have had their heads in the sand and will not accept that an investment into Canadian infrastructure and Canadian municipalities is a sound investment that can be profitable and support a pension plan and that an investment into values, principles and companies is a sound investment? The Alliance, Reform, Conservatives, for the life of them, cannot accept the public working together to support the public and their fellow Canadians, and it is something that is wrong. I leave it to Canadians.

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1:05 p.m.

Canadian Alliance

Bob Mills Red Deer, AB

Mr. Speaker, obviously there is a philosophical gap here. I guess what the member does not understand is fact that competition makes things happen. She does not understand the fact that free enterprise makes things happen. She does not understand that having healthy competition and free enterprise keeps the culture of corruption from taking over, where bureaucracy upon bureaucracy is running things. I do not know what she is talking about.

When a business hires someone, it must match that pension contribution. If the individual puts 10% into the pension plan, the business puts in 10%. That 20% is under the control of the individuals. It is their money to be invested. However, they cannot take it out until they are 65. I have no idea what she is talking about.

Obviously, if we only talk to union heads in Chile, we may well get that message, but we certainly do not get it from the people on the street, and they are really the ones who matter.

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1:05 p.m.

Charleswood—St. James—Assiniboia
Manitoba

Liberal

John Harvard Parliamentary Secretary to the Minister of International Trade

Mr. Speaker, I have a question for the member for Red Deer, the home of women's curling this week. I saw the good member on television trying to raise money for the Sandra Schmirler Foundation, and I hope all went well.

Maybe I was not listening too closely to the member. He seemed to suggest, coming out of the conversation he had with some of the oil workers in his province of Alberta, that business, regardless of its size I suppose, really had no responsibility when it came to providing pensions for its employees. I just want to make sure because I would have thought there could be competitive questions, and it may be difficult for a lot of companies. I think he implied that if businesses do not want to provide pension benefits for whatever reason, it should be their business.

We do not take that attitude with respect to safety standards or pollution control standards. We ask businesses to provide and meet certain standards. I would have thought the same thing would apply to the question of pension benefits. People who have worked with companies for a good many years deserve some kind of standard of living in retirement. Is the member suggesting no responsibility at all when it comes to pensions?

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1:05 p.m.

Canadian Alliance

Bob Mills Red Deer, AB

Mr. Speaker, I thank the member for allowing me to clarify this. I also want to let him know that we raised over $100,000 for the Sandra Schmirler Foundation for sick children. It went extremely well. Those five hours were probably the best five hours I spent on the weekend.

In answer to his question, companies must and should want to provide pensions for their employees. That should not be an option. I did not in any way suggest it should be optional. It must be there. Companies should always provide encouragement to individuals to do that. I certainly did not want to leave that impression.

People should have the right to control that money. The government can run it if it wants to, but if we find out it can be done better and in a different way, we should at least examine that. I suggested Chile, Great Britain and the U.S. as examples. We should encourage pensions even more than we do.

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1:05 p.m.

Liberal

Clifford Lincoln Lac-Saint-Louis, QC

Mr. Speaker, I would like to begin by congratulating the hon. member for Winnipeg Centre. I believe the motion he has introduced will enable us to have a healthy debate, because it deals with issues we absolutely must discuss, as objectively as possible. It is a matter of great importance for each of us. One day, we ourselves and our children and grandchildren will all benefit from the Canada pension plan.

At the same time, it needs to be pointed out that not everything is bleak; not everything is negative. In fact, before the Canada Pension Plan Investment Board was established in 1998, the investment policy stated that all available funds after the payment of pensions to beneficiaries and of the system's administrative costs had to be invested in provincial bonds, at the prevailing federal interest rate.

The legislation that created the board in 1998 certainly changed things for the better. At the same time, many other steps were taken and it is vital that they be pointed out. As I said, not everything is negative; we are not starting from scratch.

Legislation on corporate responsibility was enacted on June 12, 2003 and a corporate ethics code was also adopted. We created a national contact point for Canada, an interdepartmental federal committee comprised of representatives of Foreign Affairs and International Trade, Industry, Human Resources Development, Environment, Natural Resources, Finance and the Canadian International Development Agency, mandated to raise awareness of the OECD guidelines for multinational enterprises and to ensure their implementation.

We developed an information kit on the production of reports on sustainable development. This was a joint effort of Industry, Environment and Foreign Affairs and International Trade with a view to providing information and guidelines for the production of these reports.

What the government attempted to do with the 1998 reform was to make the Canadian pension system self-sustaining, which it had ceased to be. This became a government priority. In fact, a whole series of well thought out changes were introduced with a view to bolstering the plan's financing, improve its investment practices, and reining in the increase in its costs.

The changes effected in 1997 brought in the following changes: better performing investments; changes to the calculation of certain benefits in order to control spiralling costs; regular reports on the CPP for Canadians; and contribution rates limited to no more than 10% for future generations.

In 1997, the chief actuary of the plan informed us that, if changes were not made to the plan and the way it was financed, our children and grandchildren would be paying over 14.2% of all pensionable earnings by 2030, divided 50-50 between employer and employee, for pensions. Today the figure is only 9.9%.

So there have been some salutary and positive reforms. The Canada pension plan of today is certainly far better balanced and far more stable than the one in place prior to the reform of 1997 and the legislation of 1998.

However, much needs to be looked at again. I believe it is really worthy of my colleague from Winnipeg Centre to have brought this subject forward.

As we look at the objectives of the Canada Pension Plan Investment Board under the act, we see that its objective No. 2 is to invest its assets with a view to achieving a maximum rate of return without undue risk or loss. If we look at the principles, the CPP Investment Board statutory mandate and fiduciary duty are based exclusively on investment considerations.

The CPP Investment Board believes that responsible corporate behaviour in such matters as the environment, employee practices, stakeholder relations, human rights, respect for domestic and international laws and ethical conduct generally contribute to enhanced long term investment returns. This is where I agree with my colleague from Winnipeg Centre that the objectives and the principles have to be looked at again. It has to be seen in a far more proactive and precise way than it is today.

To rely on the basic principle that we need to achieve a maximum rate of return without undue risk to loss and that our statutory mandate is based exclusively on investment considerations, belies the intention of using our corporate behaviour to decide on the criteria of the investment. Corporate behaviour can be very elastic and subjective. To say that responsible corporate behaviour in such matters as the environment, employee practices, stakeholder relations, human rights, respect for domestic and international laws and ethical conduct should be our reliance to decide on investment is very deficient.

I really believe the government should look at the whole aspect of both the principles and the objectives to ensure that at least the objectives and principles fit in with the gist of our policies and values as a government and as a country.

I could give examples. We have endorsed, with a large majority, the Kyoto protocol after much debate. The Kyoto protocol has certain obligations for us internationally to reduce our gas emissions. Yet, I would think that any company in the fossil fuel industry could say that it respects complete and utter corporate behaviour in matters of the environment, employee practices, stakeholder relations, human rights, respect for domestic and international laws and ethical conduct. It is just a matter of degree. It is a matter of really deciding what our basic value system is.

It would seem to me that it would not be asking too much for the principles of the CPP Investment Board and its objectives to make sure that whatever basic policies and criteria the government adopts--I think of examples such as the landmines convention-- that certainly language can be found to match those objectives and principles to what the government believes fundamentally to be its paramount policies and values.

In its principle No. 3, the CPP Investment Board believes that social investing means different things to different people and that the CPP Investment Board cannot reflect the divergent religious, economic, political, social and personal views of millions of Canadians in its investment decisions.

The same argument could be made about a government, that a government cannot reflect the divergent religious, economic, political, social and personal views of millions of Canadians in its legislation.

This is a cop-out. It is an excuse for complete paralysis in action. It seems to me that the government, through its agencies, must go forward and establish clear criteria so that the board of the CPP is well aware of the criteria that we set as a government and as a country. It should respect the basic policies, ideals and values that this country and this government represent.

Surely there is a possibility of broadening the objectives, making them far more precise and far tighter than they are today. Surely there is a possibility to add criteria that not only do not offend the various segments of the population, but at the same time reflect values that we all share as Canadians regardless of religion, class or creed.

I welcome the idea of the member for Winnipeg Centre who brought forward the motion to force this debate along. To say that what we have today is the perfect solution and can never be changed, amended or improved is to say that the government must be static regardless of the evolution of society.

When members of the official opposition say that it is impossible to qualify investments in terms of values, I think that is totally wrong. Society is evolving today in whatever sector to reflect the common values that we hold as a democratic society. Surely among the members here there is enough talent, conviction and commitment to arrive at wording which the Canada pension plan board could use to make our investments far more in tune with those same common values that we share.

Right now I believe the principles and objectives are too loose. They are far too open to subjectivity. They are far too open to the possibility that we should invest in corporations that do not reflect our policies and values.

I welcome this debate. I hope that instead of pouring cold water on the idea of the member for Winnipeg Centre that we will use it as a stepping stone for a constructive debate. This debate will help all the beneficiaries of the Canada pension plan now and in the future.

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1:20 p.m.

Bloc

Bernard Bigras Rosemont—Petite-Patrie, QC

Mr. Speaker, I must say, first, that I greatly appreciated the speech by my hon. colleague from Lac-Saint-Louis. I would like to say that I share his point of view, particularly with respect to the importance we should attach to the fact that the pension and retirement funds, and the associated investments, must meet certain criteria of responsibility and require more socially acceptable behaviour from the businesses that benefit from them.

Additionally, I believe there should be selection criteria based on social responsibility. This could even go so far as to exclude certain companies automatically if they do not meet certain standards.

The hon. member for Lac-Saint-Louis touched on an important issue, the Kyoto protocol. The Parliament of Canada has ratified this protocol.

I would like to ask my colleague a question. In the criteria for managers of pension funds, should we not, in fact, place a high value on this environmental responsibility? For example, to the extent that a company decided to respect the Kyoto protocol, it could receive some benefit in terms of investments by these managers. Conversely, if businesses refused to comply with the Kyoto requirements, they could be automatically excluded from the investments and decisions of the pension fund managers.

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1:20 p.m.

Liberal

Clifford Lincoln Lac-Saint-Louis, QC

Mr. Speaker, I am convinced that, in today's world where so many people know so much about investments, there are ways to reconcile the issue of maximum rate of return with very specific social responsibility criteria.

In fact, I fully agree with my colleague that it would be completely paradoxical for us, on the one hand, to implement certain environmental or health care policies, such as anti-smoking measures, while investing in companies trying in fact to avoid their national and international responsibilities or get around government policies.

I look at today's criteria and objectives and I wonder if these objectives are specific enough, for example, to prevent a major cigarette manufacturer from being selected as an investor by the Canada Pension Plan Investment Board. I am not too sure about this.

Consequently, I fully agree with my colleague that, at all costs, we must establish precise criteria to avoid falling into a paradoxical situation, such as supporting certain policies, as a Parliament and a democracy and, at the same time, trampling on these same principles in the CPP. That would be illogical.

It seems to me there are ways to amplify, identify and improve the current objectives and principles so they are much more restrictive and specific.

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1:25 p.m.

Canadian Alliance

Howard Hilstrom Selkirk—Interlake, MB

Mr. Speaker, my question for the member involves his statement that he believes Liberal values are synonymous with Canadian values. Nothing could be further from the truth. Some of the things the Liberals believe in are what some Canadians believe in. However, Canadians are not a group that believes everything the Liberals say are Canadian values are actually that.

The issues we have before the House, everything from the scandal to environmental issues, the member certainly cannot agree with. In the area of the investments by the Canada pension plan, he does not agree that the money should be going there. He seemed to be quite clear on that.

With all the wrong things and the bad judgment that is being used on the Canada pension plan by the Liberal government, how can he remain a member of the Liberal caucus?