Madam Speaker, it is with pleasure that I rise today to speak on Bill C-3, an act to amend the Canada pension plan. It is worth noting that this was originally introduced as Bill C-58 in the first session. This government is the first government in the history of the Canadian Parliament to have twice as many throne speeches as budgets and it has again unnecessarily delayed legislation, allowing legislation to die on the order paper which then has to be introduced again, discussed again and ultimately passed.
From purely a parliamentary productivity perspective it is ludicrous that the government, in the interest of re-imaging its supposed vision for the country and trying to polish the Prime Minister's legacy, actually delays action. A good legacy for any government would be action. A bad legacy, I would posit, is one that delays action. This is a government that time and time again talks but does not act.
Throne speeches are typically more about talking than acting. Budgets are about acting. The government should have had a fall budget for full accountability and action to address some of the issues facing Canadians, whether it is the capital markets downturn, notwithstanding what has happened in the last week, which hopefully will be sustainable. But by and large Canadians are concerned about the future of their retirement plans. Increasingly, every month when they get their RRSP statements they have great concern about their futures.
Clearly the Canada pension plan is an important cornerstone of the future retirement savings plan of most or all Canadians and certainly is one that is supported broadly by a wide range of Canadians who support the notion of a government pension plan, one that is secure but also one that maximizes their retirement income in retirement.
Earlier in the comments of my colleague from Burnaby--Douglas he said that he was waiting with bated breath to hear what my comments would be on this. I suggest, if we look at market performance historically over the long term, that in fact participation with a diversified portfolio in the equities market over the long term is a far better way to build equity and ensure a secure retirement than the previous treatment of the Canada pension plan capital pool, which was to lend it to provinces at substandard rates.
If we look at the union funds and the pension funds in Canada, whether it is teachers' unions, or OMERS, which I believe is the largest investor in the capital markets in Canada, or many of the government unions that invest in the capital markets, all those individuals and pension funds that invest in the capital markets, we see that they invest in the capital markets because they realize that maximizing the retirement incomes of their membership in the long term requires prudent participation in the capital markets. I would urge the member, as a member of a political party that espouses equality and egalitarianism, and suggest that he ought not to deny all Canadians the opportunities that union members have currently to benefit from participation in the capital markets in order to maximize their retirement incomes.
This movement of the Canada pension plan capital pool toward capital markets is one that in the long term, and I think the hon. member will share this, will benefit Canadians and improve their retirement incomes. Notwithstanding what has happened in the last year to two years in the capital markets, by and large the return last year on the Canada pension plan, compared to most mutual funds and most investment portfolio manager records in the last year, was actually fairly good. That is not to say that it was a positive return. I do not know too many investors or portfolio managers who enjoyed positive returns over the last year, but we cannot pick market timing completely.
The Canada pension plan has to be invested for the long term. Good portfolio management expertise will prevail with the right quality of skill sets on the management level. That is one of the reasons why it is so important that the board of the Canada pension plan be chosen very carefully. We have had and continue to have significant concerns about the way the government makes order in council appointments. The correlation between Liberal Party contributions and an appearance in the board's order in council appointments is uncanny. The degree to which this level of partisanship can threaten the potential quality of a board is very important.
When we are talking about the future retirement incomes of Canadians, it is absolutely essential that the individuals on these boards be beyond reproach, that they be chosen with absolutely no inclination or partisan influences. I would hope that we would see a greater commitment from the government to selecting the absolutely best possible members of the Canadian pension plan board, based on their expertise, experience and understanding of investment principles in the capital markets, and not based on either Liberal memberships or their propensity to contribute to the Liberal Party funds.
I believe that we also have to take a serious look at other ways to address the demographic time bomb that exists in terms of Canadian retirement planning right now. Moving forward, we are really just a few years away, just 10 or 20 years depending on the demographer, from seeing a significant reduction in the number of Canadians who are actually working and paying taxes, along with a significant increase in the number of people who will be drawing. As such, I support the increase of, for instance, RRSP contribution limits. That is one way in which we can defer taxes to the future as people withdraw from these RRSPs. Also, the increase in RRSP contribution limits would give Canadians an opportunity to shelter more income today than they would otherwise be able to.
With the most recent changes in the tax brackets, there is an anomaly in our tax system now. The current $13,500 RRSP contribution limit is not consistent with where our tax brackets are, so we ought to see a significant increase in the contribution limit. It is not a write-off of tax revenue for the government. In fact it is a deferral of tax revenue to a time when we are going to need a tax revenue even more than we do today.
I would also urge the government to use the infusion of the CPP capital into the capital markets as an opportunity to move more aggressively to raise foreign content limits, to allow Canadian investors to achieve a greater level of geographic diversification in their RRSPs, which is important from a portfolio management perspective. Currently many of the mutual funds and the professional managers are already flouting the foreign content limit. It seems perverse to create rules that can be escaped by highly paid financial and tax advisers and by mutual fund managers and not have this available to the ordinary Canadian investor. That is exactly the perverse system that the government has today in terms of our foreign content limit on RRSPs.
Beyond that, it is time for us to consider some new approaches, to give Canadians more options in terms of ensuring that they have adequate retirement incomes in the future. One suggestion, for instance, would be to allow Canadians an opportunity through a new approach to employment insurance policy. We know that the government has benefited significantly by padding its books with outrageous employment insurance surpluses. Perhaps it would be a good idea to use some of those surpluses to actually strengthen Canada's employment insurance system in the following way.
Perhaps after paying into the employment insurance system for a period of 10 years, for instance, as part of a vesting period, if you will, Canadian workers ought to receive a statement every year telling them that their employment insurance account balance is whatever it happens to be. It will not be a terrific investment because clearly for those who do not draw from employment insurance frequently, or who in many cases do not draw at all, their contributions will be used to top up those of people who draw more frequently. But the fact is that some recognition for those who do not draw frequently would make a great deal of sense. To actually reward people who do not draw from EI frequently would accomplish some of what the Liberals wanted. The Liberals moved to reduce benefits for those who draw seasonally, but in some ways we could accomplish the same end goal with a lot less hardship if we were to find ways to reward those who do not draw frequently.
Also, what about the notion of allowing Canadians to withdraw money from their EI accounts to further their education, to upgrade their skills, to study a computer course, or for an MBA or a CFA, to go from being underemployed to fully employed? That would be consistent with labour market mobility, which we recognize as being important in today's society and a hyper-competitive global environment.
What about allowing Canadians, after a lifetime of paying into EI, to roll some of their EI account balance into their RRSPs? I have heard so many times from people in my constituency that they have paid into EI for 15, 20 or 30 years, have never drawn a cent and will never be able to. This would be one way to reward Canadians for not drawing from EI. It would be a way to augment their retirement savings. It would be an EI system that works for people who work. I think that might make sense when we are considering issues of helping Canadians ensure a more prosperous and secure retirement future.
I hope that the dire predictions of the member for Burnaby--Douglas for the capital markets do not come true. When he points to the Enrons and the WorldComs he is pointing to some of the most egregious examples of corporate governance offences. In the U.S., we are seeing the Sarbanes-Oxley act, a strong action by U.S. government to enforce and bring forward concrete action to improve the corporate governance framework in the U.S. In Canada we are seeing absolutely nothing. There is talk, but there is no action.
There is the recent appointment of Harold MacKay as the chairman of yet another task force, and the government loves task forces, to study the corporate governance issue, when there are some tangible steps that could be taken to improve corporate governance in Canada today. I think that the federal government should be working with some of the provincial governments. For instance, for 30 years there has been discussion on the notion of a national securities commission.
I say to some of my colleagues from the Bloc about the issue of a national securities commission that I recognize wholly that securities regulations are within the provincial jurisdictions, but the fact is that there could be greater cooperation between the various provinces with the federal government playing a leadership role in working with the provinces to ensure that there are across Canada very uniform approaches to securities regulations. That would benefit people on the buying side of the market in terms of raising capital. It would also benefit us in the long run, by greater resources, focus and expertise, with a greater protection of investors. These investors, whether they are in Quebec, Nova Scotia or Ontario, are concerned about the future of their retirement holdings. They want to know that the greatest efforts are being made across the country to ensure that securities commissions have the level of expertise and resources required to enforce consistent, uniform securities regulations and to be able to do so forcefully.
Currently, we have about 10 securities commissions in Canada. Many of them are underfunded and underresourced such as, Nova Scotia, P.E.I., Newfoundland and New Brunswick. The Canadian capital market is only 1.5% of the global capital markets. For us to divide those capital markets into 10 or 11 securities commissions does not make a great deal of sense. What it means is that we do not have the resources or the expertise at the provincial levels to do as good a job as we would if there were a national effort.
I recognize the inherent complexities of these proposals but I submit to my colleagues from the Bloc that it bears consideration in the interests of all Canadian investors, whether they live in Quebec, Ontario or British Columbia. The best possible expertise and resources must be committed in a uniform way across Canada to ensure that the WorldCom and Enron type of debauches do not threaten to further damage trust in the capital markets. Currently the capital market issues are surrounding trust. Not seeing action taken by the Canadian government, while we see such aggressive action taken by the U.S. government, is something that is purely unacceptable. I am concerned as well.
Mr. Harold MacKay presented an excellent report, as head of the task force on the future of the financial services sector. That excellent, objective, thorough report was butchered by the government. It was more interested in plucking the politically palatable from it and ignoring some of the important public policy parts of a report that might have been controversial but which would have furthered the interests of the financial services sector in Canada.
One of the things that work well in Canada is our financial services sector. That is a sector which has the capacity to lead globally, yet we have taken the perverse steps in Canada of handcuffing our financial services sector while at the same time exposing it to foreign competition. Whether it is in the banking sector, the insurance side or the trust companies, we do not have a financial services sector that fears foreign competition, but there is significant trepidation about the notion of being exposed to foreign competition and having their hands tied behind their backs. That is exactly what our current financial services regime in Canada is doing. We have significant concerns about that.
In addition to supporting the direction of this legislation, I would hope that the government does not delay developing and implementing policies to improve the confidence of Canadians in the capital markets. The corporate governance issue is critical and we must address that in Canada. The U.S. government is affecting change in that regard and taking dramatic and important steps. I would hope the Canadian government would do the same.
I would hope the government would also increase flexibility with RRSP limits and reduce foreign content limits, which would help Canadians save in their RRSPs. Further, the government ought to consider the notion of helping Canadians, through their EI contributions, further augment their retirement savings and ultimate security.
