Bill C-3 (Historical)

An Act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act

Canada Pension Plan

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Madam Speaker, my remarks will not be lengthy. The House will know why they are not going to be lengthy after I begin my preamble. Listening to the debate today made me think about the issue of relevance. It is definitely a fact that most of what is being discussed today is in some way relevant to the Canada pension plan, most of it.

I have noticed that members on both sides of the House have taken advantage of the debate on Bill C-3 to raise issues relevant to the Canada pension plan. That is all well and good, except that the bill in question is relatively a housekeeping bill with five or six types of changes to the existing Canada pension plan.

Maybe those elements in the bill are just too darn boring for everybody. Maybe they are not that important. It makes me wonder why we just would not adopt the provisions and move on to debate something else. It is not that the Canada pension plan is not a worthy subject of debate. It is just that the debate today is supposed to be on the contents of the bill, yet the debate seems to be on more general issues involving the Canada pension plan.

We have heard about the process of appointments to the pension plan investment board. We have heard about how the pension plan should be investing its capital, the level of benefits to those who receive the pension, the survivor pension or the disability pension, and the health of the plan itself. All of these are important public issues but none of them deal with the contents of the bill.

I will try to focus my remarks on the bill itself. I know that earlier speakers will have done that. I know it may be boring, but such is the nature of these types of legislative amendments. Let me address the five or six changes just so the record can show it and so we can all be bored as we get ready for members' statements and question period.

As everyone knows, the 1998 legislation created a Canada Pension Plan Investment Board which would take all of the money contributed into the plan, or most of it, and invest it to obtain a return to the plan higher than that which was originally being obtained by the silly practice of lending the pension plan moneys to the provinces. That practice was based on a political deal struck two or three decades ago here in Ottawa. The money was lent out from the pension plan pool to the provinces, I suppose at appropriate rates of interest but using investment methods that did not allow for any appreciation or accumulation of capital. Most of that money is still outstanding I guess. The money was lent. The provinces owe it. They pay interest and they repay it over time.

That provided very little in the way of growth to the pension plan pool. That became painfully obvious in the 1980s and 1990s as we saw other public pension plans grow, public pension plans where the funds were invested in the capital markets in a prudent fashion. There are several pension funds in Canada and the United States which have grown hugely with prudent investments, even grown beyond expectations. There are private pension plans that have so much money they have to take some of it back. There are fights by labour unions and corporations about how much money should be taken back because the pension plan has been invested so wisely.

Here we have our own public Canada pension plan and to some degree the Quebec pension plan, which does not run exactly the same way but in a sense runs in tandem for the same objectives. We have now allowed the definite investment of these moneys which proves beneficial for our whole country over the long term and medium term.

The first tinkering amendment to that existing legislation is one which seems to be pretty trite stuff. It would allow some or all of the money which, by law, has to be held not in the investment account but in the plan account, which was three months worth of capital sitting there just in case it was needed, to be turned over to the investment account so it can be invested as well. At the same time as we do that, the pension plan itself needs a legal mechanism to draw back from the investment account the money it needs monthly, daily or whatever to run the pension plan. It pulls it back from the capital markets.

Those two amendments run in tandem. They make sense. We could ask why those provisions were not there before. They were not there when the amendments were made in 1998. Some elements of the original pension plan legislation were kept in place and better foresight on the part of the managers and the government now allows us to see that we should make these changes.

There is also the matter of long term investments held not by the investment fund but by the Minister of Finance. Over all of the years, the Minister of Finance, on behalf of the Government of Canada and on behalf of Canadians, was the named owner of many investments that the fund had. Those investments are principally loans to provinces.

Just to pick an example, the province of British Columbia or Ontario owes the Canada pension fund $20 billion. The debt instrument reflecting that account is in the name of the Minister of Finance for Canada. This amendment will allow the Minister of Finance, who is statutorily obliged to be the named owner as trustee, to turn those long term investments over a three year period over to the investment fund.

It is possible in theory that the investment fund in prudence and with good investment intent may decide to actually sell some of that debt. It may decide to cash it in now depending on the interest rates, sell the money that is owed by Ontario on the open market, take the cash and reinvest it elsewhere.

I hope I am not making it sound like the investment board is into funny money investments and playing Monopoly with our pension funds. These are financing and investment techniques that are in use now and if used properly and prudently will serve the beneficiaries, the annuitants of our national pension plan, the Canada pension plan.

At some point in time over the last few years it has been questioned whether or not our Canada pension plan should have to live by the same foreign investment rules that our personal pension plans, statutory pension plans, RRSPs, have to live with. There is a limit on how much Canadian law will allow a statute based pension plan to invest in foreign funds. Forgive me for not knowing precisely what it is, but I think it is 20% now. That is a cap on how much can be invested in foreign funds.

Should our pension plan be able to be invested in no foreign funds or some and how much? This statutory amendment makes it clear that our Canada pension plan will follow the same rules as all of our other pension plans. If I am correct that the limit is 20%, that is the limit of investment of our Canada pension plan funds.

[Antoine Dubé, Bloc, Lévis-Et-Chutes-De-La-Chaudière, QC]

Madam Speaker, although I do not share some of the member's views, I must admit that I agree with what he had to say about the debate we are having on Bill C-3, namely that because the House was prorogued we have been forced, as it were, to do again what we had already started, a waste of time that could have been avoided if the House had not been prorogued.

One wonders why we had to have a throne speech when several bills still remained to be considered. And last, these bills are being brought back to the House and committee work will have to be done all over again. On this point I agree with the previous speaker.

However, he also mentioned the Caisse de dépôt et placement du Québec and the fact that the caisse had problems one year with some of its investments. It is true that there was a drop once, but to my knowledge it has happened only once in over 30 years since the caisse was created; and during all that time it has been making investments and profits. It is extremely profitable.

I would like the member to give us the opportunity to somewhat change his opinion of the Caisse de dépôt et placement du Québec. In keeping with his party's ideology, he favours both private and public investments. Is he criticizing the current pension plan? He is critical of the government's position, which we support since, for all intents and purposes, it is the same as what we have in Quebec with the Caisse de dépôt et placement.

I would like the member to tell us what solution his party is advocating to make sure that, at the end of the day, taking into account demography, the demographic deficit and so on, our young people too will able to enjoy a pension. I would like to hear what he has to say about that.

Moreover, as I sit on the Standing Committee on Human Rights, I know that the member is concerned about how little money is being invested abroad. I would like him to reassure me as to what his party's position is regarding ethical investment, that is refraining from investing in businesses around the world when it goes against human rights.

[Charlie Penson, Canadian Alliance, Peace River, AB]

Madam Speaker, there was quite a bit there. The member talked about the Canada Pension Plan Investment Board. The board is appointed by the cabinet of the Liberal government. He talks about its record. My point in talking about Canadian investment is that it cannot exceed the 30% foreign investment limits that we are all governed by.

If the hon. member was listening, my point was that the Canadian market for such a big investment fund is rather a small market. Countries, such as Chile, after about 15 years of having investment by people in their individual RRSPs or in retirement funds, decided that it was too small a country in terms of overall investment and it needed to spread it across investments outside of Chile. That way the risk was not quite so high. If it suffered a major downturn in its economy it was spreading the risk.

It seems to me that when there is $48 billion, and it will rise rapidly, dumped into the Canadian market in terms of where it will be invested, it does limit the ability to spread that risk. That is the point I was making.

In terms of the provinces buying into this, the provinces have benefited quite a bit in the past. There have been low interest loans from the Canada Pension Plan Investment Board that the provinces can still maintain. In fact, the provinces get to roll this whole thing over one more time if they wish in order to buy. That is the rule of the Bill C-3 legislation. Some of the interest rates the provinces are paying, unlike what the member talked about of a 6% return, is more in the range of 1.5% to 2%. The provinces have had a pretty good deal out of the Canada pension plan in the past. Maybe it is not in their interest to change that with these low interest rates.

I would think that the member would want to look at the dynamics of what is happening to our aging population and how we will address the issue of how we will have retirement income for young people in the future. This is the major concern I have and it should also be the concern of the members.

The former chief actuary of the Canada pension plan recognized the problem of having retirement income for our young people in the future. He recognized that the 6% or the 5.8% that was going into the Canada pension plan fund in terms of deductions was not enough and that it had to be raised. In fact, it was raised to 9.9%. The former chief actuary suggested that it still would not be enough and most people agree that it will fall short.

I know the Liberal government is pinning its hopes on the Canada Pension Plan Investment Board to make good investment decisions to make up some of that shortfall.

The member says that the board is at an arm's length from government. Crown corporations are at an arm's length from government and the Export Development Corporation is one of those. In fact, members cannot get information from the EDC because we are told we must go through the minister. Some of their investments are falling pretty flat these days. They are subject to too much political interference or the possibility of political interference on who to invest in.

We all know that the Liberals have some favoured corporations in Canada that have funded some of the campaigns of the major politicians in the House today. The Liberals continue to fund those corporations.

Our concern is that these investments will not necessarily be made with the best interests of Canadians in mind. It might be in the interests of those corporations and the Liberal government. That is our concern.

[Charlie Penson, Canadian Alliance, Peace River, AB]

Madam Speaker, it seems we have hit a nerve on the other side. I guess I know why. These are the architects of a failed plan. Not only do they not recognize it is a failed plan, they continue to make the same mistakes over and over again. This is really not anything new.

It does not just deal with the Canada pension plan and Bill C-3. It applies to a whole bunch of sectors. The government is more concerned about looking good with window dressing legislation than it is about addressing serious problems of Canadian society. I would put this in the same class as a number of those other problems that it is not really serious about. It wants to look good but it is not concerned about the young people of the country having a retirement income. Otherwise it would do something about changing this plan to respect young people when they are coming up and ensuring they have the same kind of retirement income that the rest of us have.

It does us all a big disservice not to recognize the changing demographics of the country, the aging population as it is coming forward, and to understand how we will deal with a shrinking workforce paying for the retirement incomes of a lot more people. We must address this issue. It must be taken seriously. We all want to have retirement income when it is our turn, but this current plan will not help in that regard.

My prediction is that in the next few years under this scenario we will have to increase Canada pension plan deductions again, probably up to 15%. That is what the last chief actuary said before he was fired. It may be even more than that. If we are not going to have replacement people coming into our country to replace our population, where will the money come from to provide for this plan?

Other countries are looking at this. It is not just Canada. The United States is looking at the issue. Great Britain has the same problem, maybe even worse in terms of birth rate than we do. Chile has undertaken a major program on pension reform that goes back some 10 to 15 years. It has worked out a system that seems to be working there. It is giving young people an opportunity to invest their income into some pension plans from a diverse group.

Canadians are not well served by this legislation. We will oppose it and hope that something better comes forward to serve young Canadians and their need for retirement income.

[Charlie Penson, Canadian Alliance, Peace River, AB]

Madam Speaker, I am happy to rise today to speak to Bill C-3, an act to amend the Canada Pension Plan Act that has been brought back in this Parliament after Parliament prorogued last spring.

The main thrust of Bill C-3 is to propose a transfer of all amounts held in the Department of Finance within the Canada pension plan account, including the bond portfolio which is worth about $40 billion. It is the transfer to the Canada Pension Plan Investment Board. This transfer would take place over a three year period.

Bill C-3 would establish a means for the transfer of assets between the Department of Finance and the CPP Investment Board so that immediate payout obligations of the plan can be met. The legislation also spells out how the provincial securities currently held in the account may be redeemed or replaced. Lastly, the bill would apply to the Canadian pension plan fund the 30% foreign content limit that applies to registered retirement savings plans and employer and union sponsored pension plans in Canada.

While Bill C-3 is a step in the government's planned development of the public pension plan, managed at arm's length by a crown corporation, the bill is more than a housekeeping bill. The Canadian Alliance is opposed to the Liberal solution of bilking Canadian workers and employers out of billions of dollars to pay for a plan that is unquestionably unfair to younger generations in our society.

The Canada pension plan was devised over 36 years ago by a Liberal government with a noble objective, one which I believe all members then and now can agree on, to provide retirement security to all Canadians and to reduce poverty among seniors. A mandatory pension plan was devised and paid for through equal payroll contributions and deductions from workers and employers.

Back in 1966 Canadians were told that their payroll deductions required to fund the Canada pension plan would never go above 5.5%. However, how times change. When the plan was designed it was assumed that there would be six taxpaying workers for every dependent retiree. Of course, we know that has changed significantly. The member for South Surrey—White Rock—Langley just talked about the changing demographics in our society. Anybody who does not have a plan to deal with that is in for some nasty surprises.

We know that the birth rate in Canada for every two people is 1.2, not even a replacement factor for those people. It will certainly have a major impact on how governments operate and how we will continue to fund retirement savings with a bigger percentage of our society being in the older category and less people in the younger group paying the bills.

From 1966 to 1982, annual Canada pension plan contributions exceeded the plan's annual benefit payouts. The funds were invested in provincial bonds and the plan's assets accumulated to almost $24 billion. Beginning in 1983, however, contributions fell short of benefits. Nevertheless, the interest on the $24 billion was sufficient to keep the overall CPP in surplus for another 10 years. By 1992, the pool of assets had grown to $42 billion.

However, in 1993, the year this current Liberal government took office, was the year that the culmination of contributions and interest could not produce the revenue required to cover the stream of benefits. That was a major turning point. The Canadian pension plan's chief actuary warned that without changes the plan would be in very deep trouble, especially when the baby boomer generation began to reach 65 in about the year 2012.

By 1997 Canada pension plan's assets had fallen to $35.5 billion. During the fall of that year the Liberal government introduced Bill C-2 which was designed to save the Canada pension plan by the only way it knows how to govern: take more money from Canadian taxpayers. We see it over and over again and again this year in the Speech from the Throne.

The Liberal government showed its contempt for Canadian taxpayers and Parliament all at the same time by invoking closure after a mere eight hours of debate on a huge issue that Canadians needed to be concerned about.

Starting in 1998, Canadians saw their take home pay shrink as contribution rates for both employees and employers were jacked up in a series of increases to the Canada pension plan.

Canada pension plan premiums went from 5.5% on the average industrial wage income to 9.4% where it is currently. By 2003 it will be up to 9.9%. That is a staggering 73% increase and the biggest tax grab in Canadian history. What is really scary is that the former chief actuary of the Canada pension plan had suggested during that time that a rate higher than 9.9% was necessary to save the pension plan. However that did not suit the former finance minister's plans for his political career and instead of listening to the chief actuary he had him fired. That solved a lot. I guess what goes around comes around. Eventually the former finance minister met the same fate himself and he was fired.

With more money flowing into the Canada pension plan as a result of these jacked up rates, the plan's total revenue exceeded benefits slightly in 1998 and by 2000 contributions alone were high enough to cover all the benefits. By the end of 2001 Canada pension plan assets were approaching $48 billion. Yet despite extracting all that money from Canadian taxpayers, the Canada pension plan's unfunded liability is estimated to be a whopping $430 billion. Just in case people cannot relate that to what is currently in the plan, the current plan's assets are approaching $48 billion but the liability is $430 billion. It has almost 10 times as much in liability as we have funds to cover it.

The current chief actuary of the Canada pension plan, the one who replaced the one fired by the finance minister, admits that the contributions will once again fall short of benefit payouts but the government is betting on the Canada Pension Plan Investment Board to beat that system. We heard from the member for Burnaby--Douglas that he was concerned about that because the Canada Pension Plan Investment Board had losses when the market went down.

The member for Lanark—Carleton, who spoke before me, also has a big concern with this. Our concern is not so much that there is a Canada Pension Plan Investment Board, it is that government tends to use these boards for political expediency and political operatives. Pressure can be put on these boards to invest in favoured companies that happen to give a lot of money to the governing party of the day, and which maybe the Liberals favour. We know the Quebec pension plan has had difficulty managing its money wisely and it tends to be politically motivated.

The other problem is that in a small market like Canada the huge amount of money has a disproportionate effect on our markets. What does it invest in? At one time Nortel made up 30% of the Toronto Stock Exchange. We know where it is at today and I think the Canada pension plan also knows where it is at because that was one of its major investments at the time, but what else do we invest in if we have to invest in Canada? Even more so, the legislation would restrict the Canada Pension Plan Investment Board to invest 70% of all that it has in Canada. There is a 30% foreign investment rule restriction that ties the hands of the Canada Pension Plan Investment Board.

Employers and the self-employed are feeling the brunt of the Liberal CPP tax grab. The Canadian Federation of Independent Business is currently conducting a letter writing campaign on the subject of the government's job killing payroll taxes. It notes that while employers received a 7¢ reduction in their employment insurance premiums, Canada pension plan premiums went up by 40¢ and they are set to increase another 25¢ in 2003. Everything the employers gained back in the employment insurance premium reductions has been eaten up by Canada pension plan increases.

If the government plans to see the CPP hike through, I would hope that at least it would look at the mangled EI program where revenues far outstrip EI costs and disappear into general revenue.

The worst injustice by the Liberal government and its CPP hike is the intergenerational unfairness. Mr. Ménard admits that every Canadian worker born after 1980 will see their Canada pension plan investment will offer them a 2% return on investment for their retirement. However those who retired in 1995, a different generation, will receive a 9% return on their investment.

What does that say to our young people who are expected to pay the bills? They are expected to pay the bills for our generation's retirement and they will not even have enough for their own as a result of this mismanaged plan. That is totally unfair and it simply will not work. As these young people get into positions of power in government and other places in society they will not accept this. They will throw it off. It seems to me that it would be better to change our plans now than to have a mangled system thrown out down the road in 10 years by the generation that sees this as being totally unfair.

The fact is that the Canada pension plan will take in just under 10% of income to receive 25% after age 65. The average annual payout is $5,500 a year. The best one can hope to receive from CPP is under $9,000 a year.

We talked about how things have changed and are changing in terms of demographics. The number of seniors in Canada will double to 22% of the population by the year 2031. This will place a heavy burden on workers who support pension and health programs.

I am sure that hon. members know if they examine their hearts on this issue that when the young people of today form the majority in this country they will be sorely tempted to change the plan to ensure that they will get some of the benefits that will now only go to the people who are currently in the plan.

The Canadian Alliance does not believe that our future security lies in the wages of a shrinking workforce. Rather, it lies in the vast productivity and production capacity of the economy. We value retirement security as a vital element of independence. The Canadian Alliance policy platform states that we will honour obligations to retired Canadians and those close to retirement under the current state run programs. We will also maintain support for low income seniors. However, and this is a very important distinction, the Canadian Alliance believes that future retirees deserve a greater choice between a government managed pension plan and a mandatory personal plan.

With the objective of giving Canadians greater control of their own affairs and retirement plans, we will eliminate the foreign investment restriction for retirement investments and devise options to allow individuals greater opportunity to save for themselves as we see that the current system failed its original objective from 1966. Times have changed considerably in terms of demographics.

What we are interested in is fairness in the system and a system that will actually work for future generations. That is why we think the Canada pension plan in its current form is failing young Canadians who are coming up. We are concerned that when young Canadians discover this as they become adults and they come into positions of authority, that they will take matters into their own hands and make changes. Instead of waiting for that to happen, let us look forward a little, be proactive and try to devise a plan that works and will work for future Canadians and will respect the demographic change happening in Canada. As I said earlier, we have an aging population.

We hear a lot of chatter from the other side but the fact of the matter is that it is the Liberal government--

[Charles Caccia, Liberal, Davenport, ON]

Madam Speaker, the Liberal Party to which I belong is the party that gave Canada the Canada pension plan, the old age security, the guaranteed income supplement, the widows' allowances, the child benefits and so on. In other words, it is the Liberal Party that has given Canada a vast array of programs and measures that are the foundation of our social security system.

I am very proud of that fact and I think we on this side of the House are all very proud of our record. We welcome suggestions to improve it, but I must also indicate that our record has been an outstanding one and all we want to achieve now with Bill C-3 is to improve upon it.

[Charles Caccia, Liberal, Davenport, ON]

Madam Speaker, the context of this debate is the fact that the Canada pension plan will have a very sizeable investment to manage. I am told that by the year 2012, will be an amount of between $120 billion and $150 billion. This is quite a responsibility. It is understandable therefore that so many colleagues wish to participate in the debate. This is the broad context. In my brief remarks I will talk about how to invest, where to invest, the issue of ethical screening, the issue of return on investments, what people tell us about the CPP, and frequent complaints.

I will begin with the question of how to invest it. There is a unique opportunity for the board to be instituted by way of Bill C-3 to proceed in a rather creative manner in finding ways to establish its long term program by investing in a manner that will facilitate the construction of infrastructures. Examples would include: sewer separation; the rehabilitation of toxic sites; and initiatives that would lead to energy conservation and energy shifts in order to help Canada achieve its Kyoto goals. In other words, a number of investments would have a municipal flavour in relation to water and air quality and also a flavour that would somehow be coordinated with the long term objectives of the Government of Canada in the decades ahead.

On the topic of where to invest, many interventions have been made. We definitely seem to differ in our approach from that of the official opposition. Many of us on the Liberal side feel very strongly that investments should be made in Canada and that they should be intended to facilitate, as I mentioned a moment ago, the long term pursuit of Canadian interests, particularly in relation to air and water quality and the very difficult pursuit of sustainable development.

The issue of ethical screening was raised in the previous session by the member for Regina—Qu'Appelle, whom I congratulate. He and I are on the same wavelength in the sense that an ethical screening procedure ought to be incorporated by the board to be established by this legislation. This screening would ensure that the funds were not allocated to opportunities which are contrary to the public interest, which are contrary to long term goals, be they human rights or be they other very difficult objectives that the government intends to pursue.

On the return on investments, we will see from the record that the debate has been quite intensive. I tend to agree with those who wish to adopt a policy for stable and guaranteed investments rather than investments of a speculative nature. These funds are Canadians' hard-earned savings. Therefore it would be a natural conclusion to recommend that the funds be invested in a manner whereby they would be safe and productive, even if not in a spectacular manner in terms of interest rates, but safe and guaranteed.

My next topic is what people are telling us about the level of Canada pension plan payments. Canadians are increasingly concerned about the erosion of the purchasing power of the dollar, namely the effects of inflation, and it has been kept down to a minimum. Nevertheless, the pensions are less significant today than they were a few years ago. Therefore, the time has come for a revision of the Canada pension plan payment policy so as to allow for higher pensions for those who qualify.

We all know that higher pensions will require greater and larger contributions, which is a burden both to the employee and the employer. Nevertheless, a very strong case can be made that a good, healthy pension scheme, and Canada can say that it has one of the best pension schemes in the world, certainly reinforces social cohesion. Social cohesion is a very important factor these days, namely the ability of operating as a mutually supportive society. The element of the pension level is an important contributor to the cement which binds us together and makes us function every day.

I would argue in favour of a review of the system so as to permit an increase in the level of pension. This cannot be done in isolation. Evidently not only the CPP system will have to be examined, but also old age security and in particular, the guaranteed income supplement, which is a very important instrument in the overall pension policy. That kind of supplement goes to people who do not have a Canada pension to draw from and who can only rely on old age security, if they qualify for it.

It seems to me that the entire pension sector ought to have the attention of the Department of Finance, so ably represented by the parliamentary secretary in this debate, and also HRDC and other departments so as to produce a coherent and constructive long term policy. The time has arrived to do that.

The next item is the frequent complaints in relation to the Canada pension plan. I must repeat the complaint about the five year rule for the acceptance of disability claims. It is a rule that has had its time. It has also damaged potential claimants who have seen their claims rejected. It seems to me that this five year rule needs to be re-examined and possibly changed, let us say, to seven years or perhaps 10 years, so as to permit people who are disabled to make their claim and receive it without being denied.

Another complaint that has been raised in recent times is the delays on the part of the pension appeals board. The pension appeals board is probably understaffed. The claimants who appeal have to wait long periods of time until a decision is made. We have seen cases with waiting periods of up to two years. Obviously this is not good. It also does not compare well to two decades ago when the waiting period was six months at most. There has been some slippage. I submit that this item requires attention on the part of the authorities in charge of the Canada pension plan.

We need to pay close and regular attention to Canada's current pension regime and ensure that our seniors do not live in poverty. This exercise of revision should be a regular one rather than one done at infrequent intervals, as seems to have been the case in the past.

It seems to me that the debate on Bill C-3 and the amendments to the Canada Pension Plan Investment Board Act is a terrific opportunity for all of us to make proposals on how to invest carefully but also in a creative and new manner. Considering the large amount in question, we have everything to gain in investments that will lead to improvements in the health condition of the population and in projects that are oriented toward health and the environment which will improve water and air quality, human condition and ultimately the economic condition of the country.

Clear evidence has emerged in recent years that shows that health and the economy are closely interlinked. Pension funds offer a great occasion to look at opportunities to improve our performance in relation to basic elements such as water and air. I hope the comments made in the course of this debate will help to move in that direction.

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Madam Speaker, my colleague across the way made some comments which, as I had indicated in my speech, I want to reinforce because I was concerned there was some suggestion about the politicization of the CPPIB board of directors.

I want to make it clear to the House and to this member that the board of directors is independent and accountable. The ministers of finance federally and provincially appoint directors with high qualifications. There is consultation with the provinces. The directors are chosen from a qualified list of candidates recommended by a joint federal-provincial committee, one from the federal government and from the nine participating provinces. The criteria that is used for this nominating process is a public document and is out there for the public to see.

In making the appointments it should be emphasized that the directors must have proven financial ability and relevant work experience for them to carry out the objectives of the CPPIB. As a result the people who sit on that board of directors have extensive business, financial and investment expertise.

I want to emphasize the independence and the quality of the board because the hon. member implied that somehow there may be government, that is, Liberal Party bias in the selection. That is of course nonsense given the fact that nine participating provinces and the federal government are nominating a list of candidates. Both Conservative and New Democratic governments as well are nominating. It is important for the public to know that the independence is there.

I am sure that this was maybe an oversight by the member, but I wanted to emphasize this on the public record and any comment that the member might make. Otherwise I was pleased with his comments about the direction of Bill C-3. I also want to emphasize that these proposals have the support of all of the provincial and territorial governments involved and the changes are now before the House.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

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.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, I am pleased to speak to Bill C-3, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act.

I am rather offended by the comments made by the member from the Canadian Alliance. He seems to despise one of the finest institutions that Quebec has created for its own growth. This can be clearly seen, it is creating jobs. The Caisse de dépôt du Québec has created the largest number of jobs; this has been confirmed by Statistics Canada data. It is largely responsible for the job creation and economic growth that we are now experiencing.

His comments demonstrate how little he knows Quebec's institutions, not to mention Quebeckers themselves. If the Alliance hopes to make inroads in Quebec someday, it will not be with this type of statements, which basically insult all Quebeckers who worked to set up these institutions.

I would like to provide some context on Bill C-3. First, the Canada Pension Plan Investment Board is closely modelled on the Quebec Caisse de dépôt et placement. It too has the mandate to achieve the best possible rate of return on the funds it receives from the Canada Pension Plan. Revenues generated through the investments will allow the CPP to pay Canadian workers their pensions.

The Canada Pension Plan Investment Board was established as a federal Crown corporation by an act of Parliament in December 1997 and made its first investment in March 1999. At that time, both the Bloc Quebecois and the Caisse de dépôt supported the bill overall. As I said earlier, we have our own pension plan, the Régie des rentes, which is managed by the Caisse de dépôt.

To summarize, this bill would consolidate the management of all Canada Pension Plan assets through the board, which should help ensure the stability of the public pension plan. The changes outlined should allow for the management of the operating balance and the portfolio of bonds to be transferred to the Canada Pension Plan Investment Board.

This bill seems justified in order to complete the transfer of all pension funds assets to the board. Again, the federal government is copying one of Quebec's proudest achievements, namely the Caisse de dépôt et placement du Québec.

We certainly support this initiative. However, I have some reservations about the provisions of the bill dealing with the limitations on foreign assets. I think we need a more thorough analysis to understand all their impacts. We must not forget, however, that if the board becomes too active abroad, it will lose the role of wealth creator it plays within Canada's borders and indirectly, sometimes, in Quebec.

As I said, the position of the Bloc Quebecois on this issue has not changed. As hon. members know, this bill was introduced during the first session and the government has now revived it. Our position since the last session has not changed. We support this government initiative and wish it as much success as the Caisse de dépôt et placement du Québec, created 36 years ago, has knowm to this day.

Once again, a model from Quebec that has left its mark has caught the attention of the House.

Like my colleague from Saint-Hyacinthe—Bagot before me, I would now like to draw a picture of the Caisse de dépôt et placement in order to inform hon. members of this House and Canadians about the positive things they could do with this major instrument which is the Pension Plan Investment Board.

For Quebeckers, the Caisse de dépôt et placement is somewhat the spearhead of their financial emancipation, as I already mentioned earlier. This is why I was stunned to hear the position of the Canadian Alliance. Again, it is as if they were putting Quebec down.

The Caisse de dépôt et placement helped Quebec become what it is today. We are happy that Canada is using it as a model and an instrument, as I said earlier, to support the assets of Canadians in a very positive way.

The nationalization of electricity, and the creation of the Régime des rentes and the Caisse de dépôt et placement to manage Quebeckers' savings, are probably the cornerstone of what we, Quebeckers, have become financially and economically in the last 36 years. And we are very proud of that, whatever our Canadian Alliance friends' views on the matter. The caisse is our cherished child; hands off. They think they can make a breakthrough in Quebec, but they will not win our support by turning their nose up at our tools and the means we have devised to pull ourselves out of the rut, out of poverty.

I realize that many Canadians keep a prying eye on the Caisse de dépôt et placement because it has become a major force on Canada's financial scene. This scares many people, including the big financiers on Bay Street, who have done everything they could to try to weaken the Caisse de dépôt et placement since it was first created. This is something that is a bit visceral with Canadians and Canadian financiers, especially those in Toronto.

People are upset to see how much Quebeckers have saved over 36 years through the Caisse de dépôt et placement, how much wealth its decisions have created during that period, and what a formidable financial force the caisse, which started out with capital of $1 million in 1966, has become. It is so formidable that it has become the 12th largest fund manager in North America. I will repeat for the Alliance members who may not have heard and for the last speaker: it has become the 12th largest fund manager in North America. It is the largest in Canada. Also, it ranks eighth in real estate holdings.

Of course, such success does not please everyone. I will remind the hon. members of sad events in our history, events such as the attempt in 1982 and the aborted attempt in 1983 to weaken the Caisse de dépôt et placement. But let us first review the rich history of the past 36 years.

The Caisse de dépôt et placement was created in the wake of the quiet revolution by one of the founders of this revolution, the main one, because he was then Premier of Quebec, Jean Lesage. In 1964, at the Quebec City conference, Mr. Lesage had a bit of a creative temper tantrum in reaction to Mr. Pearson's desire to impose a Canada-wide pension plan run by one manager, which of course was the federal government at the time. Quebec had already given thought to setting up a typically Quebec pension plan with just one caisse to manage these considerable savings.

I find it hard not to mention all those who laboured, both politically and technically, in the 1960s to build the Caisse de dépôt et placement. One of those involved was the late Michel Bélanger, who had been president of the Montreal Stock Exchange and a member of the Bélanger-Campeau commission. At the time, he was a senior government official and one of those who had come up with the idea of the Régie des rentes and the Caisse de dépôt et placement.

There were also Claude Castonguay, whom everyone knows, André Marier, Marcel Bélanger, Roland Giroux and Roland Parenteau.

There was also the first president, Claude Prieur, who started off in a little office in downtown Montreal, with very few means when he began as president of the Caisse de dépôt et placement du Québec.

I would like to quote Mario Pelletier, who wrote an excellent history of the Caisse de dépôt et placement du Québec. Mr. Pelletier wrote that, in January 1965, Claude Prieur, the first president of the Caisse de dépôt et placement du Québec, a manager with the powerful Sun Life company until then—he was a pretty sharp tack, as they say—moved in all alone into the decrepit office on McGill Street.

During the two months that went by before any income came in from the Régie des rentes, he was forced to take out loans in his own name, with no help whatsoever from the government, in order to set up what would later become the Caisse de dépôt, which now has $133 billion in capital.

Today, the Caisse de dépôt does $10 billion worth of transactions every working day. That was last year's average. Listen carefully, because this is important to highlight—and I am also mentioning it for the Canadian Alliance—we are talking about $10 billion worth of transactions each working day.

Last year alone, the Caisse de dépôt et placement du Québec carried out $2 trillion in transactions, or three times Canada's GDP.

I should point out that the term billion in English does not refer to the same thing as the term billion in French. We have thousands, millions, billions and, finally, trillions. In French, the term billions refers to a greater number than billions. So, there were $2.5 trillion worth of transactions last year, which is three times Canada's GDP, or more than $10 billion every working day. We are talking about the 12th largest manager of global assets in North America; it is the eighth largest in terms of real estate holdings. This is no small institution.

There is also another person who was involved in creating the Caisse de dépôt, whom I neglected to mention on purpose. It was Jacques Parizeau.

He worked very hard to make the Caisse de dépôt what it is today, an institution that has stood the test of time, with a few updates, mostly since the early 1990s, with respect to the Caisse de dépôt's international activities.

Mr. Parizeau was known at the time as a brilliant economist, recognized as such, a senior government official, a great builder of the Quebec state, and he would become, some years later, Quebec's finance minister, then premier.

Mr. Parizeau did not only contribute to making the Caisse de dépôt what it is today, being one of its main initiators. In fact, he played a key role in everything pertaining to the modernization and dynamism of Quebec's financial sector.

Mr. Parizeau drew from that experience with the Caisse de dépôt et placement and the Régie des rentes du Quebec, the Quebec pension plan, and from his experience as finance minister at the time, to develop modern tools to move Quebec forward, to move the Quebec business sector forward, and to get the business people to move forward, since the business sector of the late 1960s was quite different from what it has become today.

Among other things, the creation of the Caisse de dépôt et placement marked the start of a move toward a greater participation of small investors in Quebec's economic and financial evolution. This goes back to the Parizeau commission on guaranteed investment funds, which means guaranteed deposits.

Mr. Parizeau initiated this commission, which created the Régie de l'assurance-dépôts, guaranteeing small investors would keep a portion of their deposits in financial institutions. The security of their investments was guaranteed. From 1967 on, that was a big help for small investors in Quebec, enabling them to take part in the economic and financial evolution of the country they love and cherish.

Mr. Parizeau was also the one behind the stock savings plan created in 1979. Once again, his goal was to get everyone involved in the economic and financial progress of Quebec. He was also at the origin of the modernization of the tools for monitoring and properly administering our securities, such as the Commission des valeurs mobilières du Québec and the Inspecteur général des institutions financières.

It is based on this experience with the Caisse de dépôt et placement, from the work done by the original stakeholders behind its creation to the addition of fundamental and democratic tools to democratize the financial sector, that the Caisse de dépôt et placement was built up over time. It has evolved over the years and contributed to the creation of various companies that have grown into major undertakings, such as Alcan, Hydro-Quebec, and Bombardier. In this connection, let us keep in mind that the first government involvement was via the Caisse de dépôt et placement, with investments in Bombardier, Domtar, Vidéotron, Noranda and Canam Manac.

In 1985, the decision was made to focus more on small and medium size businesses that were the ones creating jobs in the regions. Investments were made in 63 companies, with an average performance of 30%. This is nothing to sneeze at, although my Canadian Alliance colleague looked down his nose somewhat at these figures, but for startup companies this is an extraordinary performance.

So much so that the Caisse de dépôt et placement became an incredible agent of the economic and financial development of Quebec and it was ranked tops among fund managers in Canada in the 2000 Reuters Survey, which Tempest carried out by contacting--not just anyone--but TSE 300 companies.

In the year 2000, the biggest companies in Canada considered—and this still holds true today—the Caisse de dépôt et placement du Québec, which is a source of pride for Quebeckers, to be a vital tool that has played a cutting-edge role in the financial emancipation of the people of Quebec since the late 1960s. Moreover, it is ranked as the best money manager in Canada.

In the context of globalization, the caisse model continues to be successful. We cannot escape globalization; it shapes our environment and affects us all.

Globalization is the source of both fear and enthusiasm, and is replete with both opportunities to be seized and pitfalls to be avoided. The Caisse de dépôt et placement is interested in globalization from the point of view of its investors, its impact on the development strategies of its partners, and of the role it will be required to play as a result.

For a number of years, the caisse has developed based on solid values with two aims: growth and cost-effective performance.

The caisse's assets have risen from their 1981 level of $11 billion, to $44 billion in early 1995, and now to in excess of $110 billion. Just do the math: ten times the 1981 level, and more than twice the 1995 level. That is what success in Quebec is all about.

The caisse continues to respect the decision of its board and its administration to provide its depositors and its clientele with the financial products necessary for a diversified and cautious portfolio, but one that is above all efficient.

In Quebec the caisse has bolstered the fund administration industry. Its objective is a simple one: to share its success with other similar funds. It administers mutual funds for Cartier, whose funds are available throughout Canada.

As far as performance goes, all we need say is that the 1999 results of all of its investment teams overshot their objectives, with an overall performance rating of 16.5%. This is worthy of mention because it is not seen very often.

I would point out to those who might underestimate this, that over a five-year period, most of the teams of the caisse were at the leading edge of their industry, with an overall performance in the order of 14.7%.

The caisse approach, as we call it, contributes to the growth of the economy of Quebec, the growth of our industries, the growth of our companies. As a result, the quality of life of millions of people in Quebec is enhanced, and their future assured. The caisse operates with respect for its members.

The approach the caisse takes in order to achieve those aims focuses on partnership. Whether in Quebec, in Canada, or elsewhere, the caisse draws upon the expertise and experience of its partners in their respective areas.

Another key to success is information. There is no doubt that the quality and the originality of the information available to its decision-makers play a major role. The caisse devotes significant resources to process and make use of the huge pool of information that its managers and partners have. As we can see, the caisse respects some fundamental values while actively promoting and developing these values.

It is obvious that the history of the caisse and the way it does business is rich in happy developments. Let me talk about a situation that occurred in 1982, although some may feel this is ancient history. However, it still has echoes today, particularly since 1993.

As members of the Standing Committee on Finance, Bloc Quebecois members--especially my colleague from Saint-Hyacinthe—Bagot--meet business people from across Canada. Some of them have shown contempt toward the Caisse de dépôt et placement.

When this bill was last debated, my Canadian Alliance colleagues were among its critics, as they are again today. We met Bay Street financiers who hate the Caisse de dépôt et placement, even though it makes a positive contribution to the Canadian economy and has become a key player in a number of so-called Canadian businesses that make Liberal, Conservative, Canadian Alliance or New Democrat members so proud.

Still, some continue to despise the Caisse de dépôt et placement and to say that it is bad, that it is rotten. Because the Caisse de dépôt comes from Quebec and has become Canada's largest manager, there is reluctance on the part of Canada to recognize achievements by Quebeckers. This is because until this financial emancipation occurred, it used to be said that Quebeckers were not cut out for business, economic and financial matters. But now that we have created something as fundamental as the Caisse de dépôt et placement, they are a little less eager to put down Quebeckers.

In 1982, the federal government decided to introduce Bill S-31. We still remember that Bill S-31, introduced by André Ouellet, then Minister of Consumer and Corporate Affairs, prohibited the Caisse de dépôt et placement from holding more than 10% of the stocks of major businesses in Canada. At the time, the Caisse de dépôt et placement was considering investing in Canadian Pacific.

This generated incredible controversy. Owned by Quebec interests and built on Quebeckers' savings, the Caisse de dépôt et placement would become CP's main shareholder. This created an incredible uproar in Canada, so much so that business people from English Canada decided to wage a war against the Caisse de dépôt et placement. This is why the Caisse de dépôt was not very popular at the time. It was impossible for Quebeckers to become CP's main shareholder.

They decided to put unbelievable pressure on the federal government to get it to introduce Bill S-31, which provided that the Caisse de dépôt et placement could not hold more than 10% of the shares of companies involved in interprovincial transportation.

This did not target Canadian Pacific alone—it was clear that the railways affected all of Canadian business. Do you want to know why? Because all Canadian businesses at the time had a stake in transportation. If it was not air transportation, it was shipping—in the oil industry, for example, it was in pipelines—or the railways, which was a secondary activity, but which was added on to manufacturing and also the service sector.

For the year that the saga of Bill S-31 dragged on, from 1982 to 1983, before the government finally withdrew the bill due to pressure from Quebec business, we Quebeckers lost incredible opportunities to invest the significant sum at the time—I think it was around $17 billion—that the Caisse de dépôt et placement held in capital.

During that year, we lost the ability to benefit from the increase in value of Canadian Pacific shares. In 1982, CP shares were worth $30. In 1983, they were worth $50. We could have made a $20 profit per share if the Caisse de dépôt et placement had been allowed to own more than 10% of CP shares. The caisse lost some $15 to $20 million dollars, with CP alone. We have to assess all opportunities that were lost because shares of other Canadian businesses could not be purchased, given that the provisions of Bill S-31 that were retroactive.

Before this bill, we were told it would be retroactive. If the Caisse de dépôt et placement had invested more than 10% in the specified businesses, it would have had to get rid of the difference. Selling shares when you are being forced to do so means you end up selling off shares at a loss.

This is what they were going to force the Caisse de dépôt et placement into, as it was getting too powerful for the liking of English Canadians. The president of the Toronto Stock Exchange at the time, Mr. Bunting, launched an incredible offensive to bring down the Caisse de dépôt. All of the big Canadian corporations like Bell Canada, Stelco, the Bank of Montreal, the Royal Bank, Dominion Textile, Nova, Inco and Hiram Walker fought against the Caisse de dépôt et placement to keep us from moving forward.

Totalling the losses, for example for 1982-83, we lost $100 million in opportunities in one year. This is a plausible figure because for CP alone it is around $15 million or $20 million. Given the average yield of the Caisse de dépôt et placement, between 1982 and 2001, this means over $1 billion of potential capital lost to Quebeckers.

Thus today the value of the Caisse de dépôt et placement is not $134 billion but $133 billion. Quebeckers would have had $1 billion more to invest and to build up their savings with.

Because of the Bill S-31 episode, we have $1 billion less, and that is a real annoyance. Today, here we are faced with your bill, which creates and consolidates the activities of the Canada Pension Plan Investment Board. We are here to support it, despite our memories of Bill S-31. We said to ourselves “Let us put that in the past for now”. People take much delight in recalling this episode.

But we are supporting you in this wonderful plan to create another sort of caisse de dépôt et placement in Canada, using the money in the pension plans of Canadians outside Quebec, because it will open up opportunities and thus democratize the economic growth of Canada.

As do all my colleagues from the Bloc, I wish you as much success with the Canada Pension Plan Investment Board as we have had with the caisse de dépôt et placement.

But I hope that nobody puts obstacles in the way of this wonderful initiative such as we have had to face since 1982. And there were all sorts of subsequent criticisms of the caisse de dépôt et placement. There were all the smear campaigns I have seen since I became a member of the Standing Committee on Finance. As a member of that committee, I have heard a lot of incredible comments.

When one visits Toronto and talks about the caisse, it is as though one had mentioned the plague. People are afraid of it. We are flattered by this reaction. But, at the same time, it would have been nice if, in the past, you had been as enthusiastic about the growth of the Caisse de dépôt et placement du Québec as we are now about the creation and consolidation of the activities of the Canada Pension Plan Investment Board.

I remind the House that we are in favour of this bill to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act. The board acts as an investment corporation not unlike the Caisse de dépôt du Québec with a mandate to invest the money from the Canada Pension Plan in order to get the best possible return.

The Quebec Caisse de dépôt et placement also provides support for clients interested in the long term strategic development of their business, regardless of where it is located in the world. It is an accessible partner much sought after by businesses that think big. It is among the most active investment bodies in the world in the area of private investments. People who are interested in exporting their products and services and opening up new markets will find the support they need at the caisse.

Furthermore, clients of the Quebec Caisse de dépôt et placement benefit from its worldwide network and its specialized services. I do not understand why the Canadian Alliance is against the bill before us, when the board in question would allow the regions to promote strategic development and provide support for businesses. These are businesses that want to think big, that hope to export and want support. I do not understand. What other kind of wonderful instrument are they trying to come up with or have they already come up with to replace an instrument as effective as the caisse de dépôt et placement? It has proven itself in Quebec and an equivalent body in Canada would definitely contribute to strategic development, as has been the experience in Quebec.

It also provides, at each major stage of expansion, a unique source of capital for businesses. It supports the sustained growth of businesses from all sectors of the economy, from the most traditional to the most modern ones. Its professionals, who are active in their respective areas of expertise, share their skills and know-how by making available to these businesses a one-stop financial service.

Regardless of the projects, including business start-ups, support for expansion, a public call for savings, local or international expansion, a merging or takeover, financial restructuring, asset acquisition, exports or setting up abroad, family property transfer, or the sale or redemption of stocks, the goal of the caisse is to build the future and make the present better.

The Caisse de dépôt et placement du Québec is active in all the world's major financial centres and it has been developing its skills as a manager of public funds for over 36 years. It uses its own expertise, along with that of its partners, that is the institutions and businesses. Its clientele, which is mostly made up of public organizations, puts its deposits in the hands of the experts of the Caisse de dépôt et placement, because the caisse's management, which relies on a combination of daring moves and caution, guarantees returns higher than the main reference indicators, year after year.

As I mentioned earlier, the Caisse de dépôt et placement is Canada's largest investor in the private placement and venture capital sector. It is the primary holder of bond certificates from Quebec's public sector, and it has the largest real property portfolio in Canada. I am repeating this so that members opposite can understand clearly: in order to develop new structures for the financial management of collective savings and take advantage of the best investment opportunities, the Caisse de dépôt et placement is the place to go.

It is making ever greater use of its experience abroad, particularly on emerging foreign markets. Through consulting services and in partnership with the local expertise available, it is involved in the setting up, management and administration of social and collective savings programs such as retirement funds.

The objective is twofold: to stimulate local financial markets through sound and rigorous management, and to be involved in the establishment of a social protection structure, in particular through the creation of retirement funds.

In conclusion, I hope that Canada can have such an instrument, which has contributed to the economic expansion of all of Quebec. This is the wish that I am making for all the other Canadians.

[Scott Reid, Canadian Alliance, Lanark—Carleton, ON]

Mr. Speaker, I am rising today to respond to government Bill C-3, formerly Bill C-58, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act. The bill is being introduced at second reading because it was introduced, died on the order paper and has been reintroduced in this Parliament.

The bill's functions, as stated by the government, are to achieve the following four goals: first, it would permit the transfer of money from the Canada pension plan account to the Canada pension plan investment board; second, it would permit the transfer of assets held by the finance minister to the account for technical reasons; third, it would apply to the Canada pension plan fund, the 30% foreign content limit that applies to registered retirement savings plans and also to employer and union sponsored pension plans in Canada; and fourth, it would deal with assorted housekeeping and technical amendments.

As presented by the parliamentary secretary, he suggests there is an overriding theme of providing greater security to Canadian seniors. I would contest that. The bill is merely another stage in a long progression of pension legislation and pension proposals put forward by the government and more particularly by the former finance minister now running for the Liberal leadership. It is designed to dip into the assets of Canada's pension system, whether they be the assets of the Canada pension plan, the non-secured and promised assets of old age security or the private moneys that have been set aside in RRSPs and in union and company sponsored pension plans. It would use those assets for purposes other than guaranteeing the retirement incomes of Canadians. I will demonstrate that in the course of my speech.

This theme goes back to the very beginning of the government, right back to the time when the former finance minister, the member for LaSalle—Émard, became finance minister and proceeded to look at how he could deal at the time with the government's debt crisis. I would like to show what he did to get his hands on these assets for purposes other than guaranteeing the best possible retirement incomes for Canadian seniors. I will point out that there have been three steps in this process. This particular piece of legislation, Bill C-3, represents the third step in this three stage process.

First, in 1994-95, early in his tenure, the then finance minister floated a series of trial balloons. Canada faced a tremendous potential shortfall in its ability to raise revenues, an enormous debt crisis. We faced an enormous deficit at the time. The minister tried to find ways of raising such revenues, including a number of problems before him at that time, through clawing back pensions and dipping into pension funds.

One example is an article in the Financial Post on December 31, 1994, which recorded how this was a trial balloon being floated, as these things often are, through an exclusive to one newspaper. It recorded how the government would try to place a capital tax on firms through which RRSP investments were made. RRSPs have to be invested through a bank, a trust company or an institution of that sort. The idea was that a capital tax would be placed on these firms based on the amounts invested in or through those firms. It would have been presented as a tax on corporations as the public relations spin, but in reality it would have been a tax on the capital placed in registered retirement savings plans.

That did not sell very well. It was withdrawn and the finance minister, the member for LaSalle—Émard, floated another trial balloon in early December of that year, which also did not work out very well, but he was trying. He proposed a 1% direct capital tax on RRSPs every year. This would have caused average Canadians to pay a total of $4,141 extra over their lifetime in taxes on RRSPs with no benefit at the end of that process to reflect the cost that had gone in.

Of course, the cost to the average Canadian would have been much higher because as that money was taken out it lost its capacity to earn interest or be sheltered from income tax. The result would have been that the average benefit to the average Canadian of this tax on RRSPs would have been a loss in RRSP retirement income of 36% in order to get that 1% capital tax for the purpose of dealing with the government's short term financial goals.

A second trial balloon which was put out and which was successfully implemented was a proposal to roll back the age at which RRSPs are rolled over into RRIFs, or Registered Retirement Income Funds, from age 71 to age 69. I will not go into the arguments that were presented by the former finance minister in favour of that particular proposal. I will simply point out that it is exactly the wrong measure to take, given that the average lifespan is expanding and therefore there is a greater long term need for that pension income.

What should be happening is that the age at which money is required to be rolled over should increase as the average lifespan and therefore the average retirement age increases. This hurts all Canadian seniors, particularly female seniors because women live substantially longer than men and therefore can expect to have a retirement that is on average 30% to 50% longer than their husbands or than male Canadians. This means that this measure directly and specifically focussed the impact of the government's short term financial needs and placed it on the shoulders of elderly females who, incidentally, are one of the highest poverty groups in the entire country.

The second prong of this three-pronged approach to get those pension assets for the government's own goals and diverting those funds from the only long term goal that should matter, which is increasing and maximizing the pension incomes of Canadian seniors, took place in an attack the former minister of finance launched in the mid-1990s on old age security.

Many people are aware of the fact that the Canada pension plan has not been properly secured for the past few decades due to faults in its original design. However, the old age security system, the old age pension, guaranteed income supplement and so on, have no security whatsoever. These problems, which are not accounted for in the same way as the Canada pension plan, attract less publicity. This is a huge problem the government has not dealt with. However it did raise the issue in, I believe, 1996. Its approach at the time was to replace old age security with something called the seniors benefit. This would have solved the problem of the lack of financing for the old age security system by essentially raising the height of the clawback on seniors pensions. This would have had the effect of raising the clawback when one took into account all forms of pension income, as high in some cases as 90%.

The goal of the proposed bill at that time seemed pretty clear to a number of groups, including my own party and the Canadian Association of Retired Persons, and we fought very vigorously against it and it was withdrawn. That was the second prong of the approach. It would have captured billions of dollars for the federal government but it would have substantially reduced the incomes of perhaps most Canadian seniors.

The third attempt to divert funds away from the sole goal of increasing the pension income of Canadian seniors is the government's attack on the Canada pension plan. This process, of which Bill C-3 is part, started in 1997 with a bill that was moved by the former minister of finance and the current candidate for the leadership of the Liberal Party, which raised the payroll tax significantly and created the Canada Pension Plan Investment Board. This process is being completed today with this bill.

I want to spend a little bit of time talking about some of the problems that exist with this current legislation and will cause us to invest money based upon considerations other than producing the best possible return on investment, which should be and could be its sole goal if the government cared about making that its sole goal.

I will begin with the underlying philosophy of the former minister of finance which may explain why he chose this model for the legislation. I would emphasize that the bill we are discussing today is very much the product of the former finance minister. It is coming back unamended from the form that he proposed when he was still the minister of finance.

Going back to January 26, 1990, I would like to quote an article from the Toronto Star which says the following things about the minister of finance:

The Canada pension plan should be broken up, and its money used to set up regional funds to back promising businesses across the country, Liberal leadership candidate Paul Martin says.... Money now going to the Canada pension plan should be channelled into a chain of--

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I am pleased to present Bill C-3 for second reading in the House today.

Bill C-3 would amend the Canada pension plan, CPP, and the Canada Pension Plan Investment Board, CPPIB, Act in order to accomplish a prudent and accelerated transfer of CPP assets to the CPPIB. This transfer would represent the final step in the process of transferring CPP assets not required to pay current pensions and benefits to a market based independent investment organization. Before discussing the bill, I would like to take a few minutes to provide some background that will help to put these measures in context.

As hon. members know, the federal government is fully committed to making Canada's retirement income system secure to all Canadians. Today Canadians from all walks of life take this system for granted without realizing that it did not always exist. Years ago caring for older citizens and those with disabilities was solely the responsibility of individual families. With the introduction of the Income Tax Act in 1917, the federal government was able to adopt national social programs such as Canada's first old age pension in 1927, which at that time included a means test.

Following the second world war other programs such as employment insurance, family allowance and a universal old age security program were introduced. There was also a need for a public pension plan, a portable national pension, that could be carried from job to job and from province to province. This need was met in 1966 with the introduction of the Canada pension plan, a compulsory earnings based national plan to which all working Canadians could contribute.

The CPP provides wage earners with retirement income and financial assistance to their families in the event of death or disability. Set up jointly by the federal and provincial governments, the CPP was designed to complement, not replace, personal savings and private employment pension plans. It should be noted that Quebec administers its own complementary plan, the Quebec pension plan.

As hon. members know, the Canada pension plan is one of three supporting pillars of Canada's retirement income system. This system is a blend of public and private pension provisions and is considered internationally as one of the most effective ways to provide for retirement income needs.

The first pillar is our old age security program provides public pensions for senior citizens and ensures all Canadians a basic income in retirement.

The second pillar is the Canada pension plan, the focus of today's debate.

The third pillar, the private component of the system, includes tax assisted fully funded employer sponsored pension plans, registered retirement savings plans and other private savings.

Some 30 years after the Canada pension plan was launched concerns were raised about its sustainability. In the early 1990s the Chief Actuary of Canada warned that CPP assets, the equivalent of two years of benefits, would be depleted by 2015 and that contribution rates would have to increase to more than 14% by 2030 if the plan remained exactly as it was. These concerns needed to be addressed. After all, future generations of Canadians, including our children and grandchildren, needed assurance that the plan would be there for them at a reasonable cost.

As the plan's joint stewards the federal and provincial governments subsequently released a document entitled “An Information Paper for Consultations on the Canada Pension Plan” which outlined the challenges facing CPP in the coming years and options for reform.

In February 1996 the federal and provincial governments announced that joint cross country public consultations with Canadians would be held on the Canada pension plan to find out what ordinary citizens wanted to see done. Guided by panels of federal, provincial and territorial elected representatives, extensive consultations were held in every province and territory. Governments heard from actuaries, pension experts, social planning groups, chambers of commerce, seniors groups, youth organizations and many concerned individuals.

A common theme emerged during the consultations. It became clear that Canadians wanted the government to preserve the Canada pension plan by strengthening its financing, improving its investment practices and moderating the growth costs of benefits.

In 1997 the federal and provincial governments adopted a balanced approach to CPP reform so that the plan could meet the demand of the coming years when the baby boomers would be retiring.

Changes to the plan included limited changes to benefits and their administration, a moderate increase in CPP contribution rates and the building up of a larger asset pool while baby boomers were still in the workforce. The asset pool would be invested in the markets and managed at arm's length from government for the best possible rates of return. All together these measures ensured that a contribution rate of 9.9% would be sufficient to maintain sustainability of the plan indefinitely.

These reforms, which were endorsed by the provincial and federal finance ministers five years ago, will help ensure that Canadians have a pension plan on which they can always depend.

In the three actuarial reports since the reforms, the chief actuary has confirmed the long term viability and financial sustainability of the CPP.

A new market investment policy to be implemented by an independent organization, known as the Canada Pension Plan Investment Board, was a key element of CPP reform. The CPPIB was set up in 1998 and began operations the following year.

Before the CPPIB was established, the CPP investment policy dictated that all funds not immediately required to pay benefits and administrative costs had to be invested in provincial government bonds at the federal government's investment rate. This represented an undiversified portfolio of securities and an interest rate subsidy to the provinces.

The creation of the CPPIB, with a mandate to invest in the best interests of CPP contributors and beneficiaries and to maximize investment returns without undue risk of loss, meant that CPP could be partially funded, in contrast to the 1966 “pay as you go” CPP. The CPPIB reflects a fundamental policy change with respect to investment CPP funds.

The CPP funds that are not needed to pay benefits and expenses are transferred to the CPPIB and prudently invested in a diversified portfolio of market securities in the best interests of contributors and beneficiaries. Certain CPP assets will remain with the federal government and are the focus of Bill C-3 which I will discuss in a moment.

Before doing so, I want to point out that the CPPIB functions within an investment policy framework that is similar to other large public pension plans in Canada, such as the Ontario Teachers' Pension Plan and the Ontario Municipal Employees' Retirement System, OMERS.

For example, it operates under similar investment rules which require the prudent management of pension plan assets in the interests of plan contributors and beneficiaries and is free to hire its own independent professional managers. The Canada Pension Plan Investment Board is subject to the foreign property rule like other pension funds.

I would like to make a few additional comments about the CPPIB and how it functions before discussing the bill.

It is important to understand that the governance framework of the CPPIB was designed to ensure full transparency and accountability. Because the CPPIB operates at arm's length from governments and is responsible for billions of dollars of retirement funds belonging to CPP contributors and beneficiaries, it is imperative that the board be fully accountable to the public and governments. CPPIB funds are managed prudently to the highest professional standards, with qualified managers making investment decisions.

Let me assure the House that the CPP Investment Board is fully accountable to CPP plan members and federal and provincial governments. It keeps Canadians well informed of its policy operations and investments in a number of ways.

First, the CPPIB makes its investment policies and financial results public. Second, it releases quarterly financial statements. Third, the CPPIB publishes an annual report that is tabled in Parliament. Fourth, the board holds regular public meetings in each participating province at least every two years to allow public discussions and input. Fifth, the CPPIB maintains a very informative website.

Full accountability is also assured through a robust process, with strong checks and balances, that is in place for identifying and appointing CPPIB directors. Great care was taken in structuring the CPPIB to ensure that its board of directors was independent and accountable to CPP contributors and beneficiaries.

Following consultations with the ministers of finance in the participating provinces, the federal government appoints directors with high qualifications. The Minister of Finance also consults with provincial ministers of finance and with the board of directors on the appointment of the chair of the CPPIB.

Directors are chosen from a list of qualified candidates recommended by a joint federal-provincial nominating committee which is comprised of one representative from each of the nine participating provinces. The criteria used by the nominating committee to identify potential candidates for director have been made public. In addition, in making appointments to the board of directors, consideration is given to ensuring that a sufficient number of directors have proven financial ability or relevant work experience to ensure that the CPPIB carries out its objectives. As a result, individuals who sit as directors have extensive business, financial and investment expertise.

I am pleased to say that the independence and quality of the CPPIB of directors has received strong support from public and pension management experts.

Independence from government in making investment decisions is critical to the CPPIB success and public confidence in the CPP investment policy. This is of the utmost importance because the money that the CPPIB invests today, and the higher returns earned, will be used by the CPP to help pay the pensions of working Canadians who will begin retiring 20 years from now.

Let me turn now to the measures we are debating today.

Through Bill C-3, the federal and provincial governments are implementing the final steps of CPP reform launched in 1997. All CPP assets remaining with the federal government would be transferred to the CPPIB over a three-year period. These assets include a cash reserve and a large portfolio of mostly provincial government bonds. These asset transfers will represent the last steps of the path established by the federal-provincial governments in 1997 to invest in CPP assets not immediately required to pay benefits in the market by an independent professional investment board.

There are several advantages to putting all CPP assets under one independent, professional organization.

To begin, consolidating all assets under one organization will put CPP on the same footing as other major public pension plans, thereby providing fund managers with the flexibility to determine the best asset mix and investment strategies to manage risks and optimize returns for all CPP assets.

Analysis undertaken by the chief actuary of Canada indicate that CPP assets fully invested in the market would be expected to earn a greater return and thereby grow more rapidly for the benefit of present and future CPP contributors.

The benefit of the transfer of assets under Bill C-3 is very significant. Based on the financial projections in the chief actuary's 19th report, CPP assets would increase by approximately $85 billion over the next 50 years and by $72 billion in 2050.

Obviously this welcome result would add considerably to the soundness of the Canada pension plan and enhance the confidence of Canadians in their public pension plan. In addition, transferring the CPP bond portfolio to the CPP investment board over three years would provide for a smooth transition for capital markets, provincial borrowing programs and CPPIB.

Finally, all changes in the CPP and CPPIB legislation would require the approval of the provinces. I am happy to report to the House that provincial and territorial governments unanimously support these changes. This is important. Also, before the new legislation comes into force the provinces would need to formally approve the changes.

Bill C-3 essentially completes the process that the federal and provincial governments began in 1997 of investing CPP assets in the market by an independent professional investment board.

The end result of this move for the Canada pension plan would be increased performance, better diversification, and enhanced risk management of the entire CPP portfolio.

I wish to remind the House that during the 1997 public consultations on CPP reform, Canadians told their governments to fix CPP and to fix it right. Canadians also told their governments to preserve the CPP by strengthening its financing, improving its investment practices and moderating the growth costs of benefits. The provincial and federal governments have addressed these requests.

I should mention that the transfer of CPP assets to the CPPIB would have no impact on the Quebec pension plan which is administered separately from CPP.

The establishment of the Canada pension plan in 1966 was one of the most important public policy initiatives ever undertaken in the country. The plan reflects a national belief that retirement for working Canadians should not be a time for hardship. It also captures the Canadian value of shared responsibility among contributors and governments to provide reliable support to wage earning Canadians after they cease active work.

Ours is a government with a conscience. Together with the 1997 reforms the measures in the bill would ensure that the Canada pension plan remains on sound financial footing for future generations. With the transfer of all CPP assets to the CPP investment board Canadians can now feel secure that prudent, sound investment diversification, as well as increased performance would result.

I urge all hon. members to support the passage of this legislation without delay.

[Claude Drouin, Liberal, for the Minister of Finance]

moved that Bill C-3, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act, be read the second time and referred to a committee.

Business of the House

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

Mr. Speaker, obviously the government will not stop functioning. It works all the time, seven days a week.

This afternoon we will continue with Bill C-4, the nuclear waste legislation. It will be followed by Bill C-2 respecting the Yukon and Bill C-3, if we have time available, respecting the Canada pension plan investment legislation.

Tomorrow shall be the sixth and final day of the address debate. This will result in a deferred vote until our return. Next week is a constituency week for all hon. members. When we return we will pick up the legislative agenda where we left off today. I will add that Bill C-14, the diamonds legislation, was introduced earlier today.

I should like to announce that the first allotted day shall take place on Thursday, October 24.

Canada Pension Plan

[Don Boudria, Liberal, for the Minister of Finance]

moved for leave to introduce Bill C-3, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act.

(Motions deemed adopted, bill read the first time and printed)