Bill C-27 (Historical)

An Act to amend the Pension Benefits Standards Act, 1985

This enactment amends the Pension Benefits Standards Act, 1985 to provide a framework for the establishment, administration and supervision of target benefit plans. It also amends the Act to permit pension plan administrators to purchase immediate or deferred life annuities for former members or survivors so as to satisfy an obligation to provide pension benefits if the obligation arises from a defined benefit provision.

Opposition Motion—Minister of Finance and Conflict of Interest Act

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Mr. Speaker, I note the Ethics Commissioner's direct advice to the finance minister was, “...if an official function provides you the opportunity to further your private interests, those of your relatives or friends...you are considered to be in a conflict of interest situation.” On that basis, the minister should not have been the one to introduce Bill C-27, flawed or not. He should have taken the highest standard as recommended in his mandate letter, and he has failed to do so.

[Bob Bratina, Liberal, Hamilton East—Stoney Creek, ON]

Mr. Speaker, the matter before us is about the ethical standards of an individual who has had an unassailable person history of ethical behaviour of the highest order. On the other hand, the important issue has been the potential impact of the proposed tax measures and subsequently the impacts of Bill C-27. What we are hearing is that the same question was asked 20 times over, so what we have had on behalf of the Canadian public is what to my mind is a terrible waste of time.

We had consultations, for instance in my own riding, on the tax reforms. We brought those consultations back. They are being reviewed by the finance minister and his staff. I just put further information before his staff and those people are happily engaged in dealing with those issues. However, we have not heard very much at all from the other side about the specifics of those reforms and the changes and potential changes. All we are hearing is an incessant personal attack against a man who has lived a life of very high ethical behaviour. Therefore, to my friend across the way, are you serving the public interest, the interest of your constituents, by avoiding the real issues, which are the tax reforms and the details of the bill, versus personal attacks against an individual?

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Mr. Speaker, I am honoured to be sharing my time with the member for Victoria.

This is such an interesting discussion. The member lauded the performance of the finance minister, but I want to take us back to the mandate letter that was given to the finance minister by the Prime Minister. He called on him to respect the values of a government. It stated:

We have promised Canadians a government that will bring real change--in both what we do and how we do it....We have also committed to set a higher bar for openness and transparency in government....It is important that we acknowledge mistakes when we make them. Canadians do not expect us to be perfect – they expect us to be honest, open, and sincere in our efforts to serve the public interest....you must uphold the highest standards of honesty and impartiality, and both the performance of your official duties and the arrangement of your private affairs should bear the closest public scrutiny. This is an obligation that is not fully discharged by simply acting within the law.

In summary, to me, this meant that not only the letter of the law must be upheld; the Prime Minister asked his ministers to go well beyond the letter of the law.

The finance minister let the public believe, including his fellow Liberal MPs and Bay Street colleagues, that he had placed his assets in a blind trust and he let them continue to sustain that belief for two years without correcting the record. Instead, he has been in a position to profit from policies he has advanced as finance minister over that two year period. The finance minister let that untruth stand. He took action last week, two years too late. It seems the only reason he took that action was because he was finally caught.

The finance minister was directed to take the highest ethical path. Instead, the government is barely scraping by. The minister's self-congratulatory tone last week about his belated tidy up of his ethical lapse is totally out of line. He belatedly took action that he should have taken two years ago if he had followed the Prime Minister's direction or the Ethics Commissioner's secondary advise, and if he had any common sense or clue about how this would play out in public.

This is particularly troublesome, given the hard summer we have had in the small business and entrepreneurial community, being accused of similar ethical lapses and exploitation of tax loopholes.

Paul Williams, a constituents from my riding of Nanaimo—Ladysmith, wrote:

While I certainly believe in tax fairness, I do not support what the Finance Minister is proposing and the uncertainly and harm that will result. The changes being contemplated go against the notion of tax fairness. In essence, the changes being contemplated will single out privately held business owners--many of whom are middle-class income earners--treating them worse than publicly held and foreign controlled businesses.

I have hundreds of letters like this. The finance minister's proposal scared small business owners and it unjustly accused them of wrongdoing.

As it turns out, the real tax loophole exploiter was the finance minister, which really is the icing on the cake of a really bad four months in the government. His self-congratulatory air last week of suddenly dismantling a so-called tax fairness proposal, which he said back in July he would not change a word of, and had in fact already written the legislation, was also out of line. If he had done what a real legislator would have done, he would have said that it was a consultation and he would have asked people what they thought. He would told people not to be alarmed, that he might or might not do it. Now, all of a sudden, he says that he is willing to hear the advice and willing to keep his election promise on the small business tax cut, which he previously said he would cancel.

He is now dealing with legislation. He is going to accept the rules that our NDP parliamentary leader proposed on facilitating the transfer of intergenerational companies. Six months ago, the Liberals voted it down. Then last week they used it as cover for a real mess. That shows they really do not have the ear and the tone of the country.

At the time of his election, the finance minister owned two million shares in Morneau Shepell worth $32.1 million. Apparently, that holding, as of Friday, would be worth $42 million. That means he has profited over $10 million over the last two years as finance minister.

However, he did not put them in a blind trust. He did not sell them in an arm's-length transaction, as required, within 120 days of taking office. It has since been revealed that Morneau Shepell has a contract with the Bank of Canada worth more than $8 million. The finance minister was asked nearly 20 times about his million shares that he still owns in Morneau Shepell, worth $20 million, before he admitted that he would actually give an answer. Finally, he failed to reveal the corporation that houses his French villa. CBC maintains that the minister only disclosed that corporation to the Conflict of Interest and Ethics Commissioner just last month, after CBC discovered its existence, and, really, that is when he started to answer questions on it.

It is undeniable, when we turn to Bill C-27, that if it were to become law, Morneau Shepell would significantly benefit in business and revenue, and as a massive investor, the finance minister would personally benefit from the passage of that bill. The minister brought that bill to Parliament. He could have had another member of the party do that, but, instead, he was the lead on it. This was done without consultation and certainly not with the support of constituents in my riding.

Morneau Shepell is a strong proponent and manager of the services related to target benefit pension plans, and could be just one of four firms in the country that would benefit from new pension administration rules if Bill C-27 becomes law. In fact, when the finance minister was at the helm of Morneau Shepell, it lobbied for increased use of target benefit pension plans and became the lead consultant for the Government of New Brunswick in exactly implementing this.

Five days after Bill C-27 was tabled, the value of shares in Morneau Shepell increased by almost 5%, which is an increase that could have allowed the minister to make as much as $2 million. This is really not a middle-class problem. At the very least, this is a striking perceived conflict of interest, since the minister was in a position to further his own private interests through his public duties as a finance minister.

Bill C-27, as much as it benefits Bay Street, would significantly harm workers and pensioners.

Here is what residents of Nanaimo—Ladysmith have told me about Bill C-27.

Pieter Terpstra from Nanaimo writes:

Please, say NO to bill C-27. I am a retired school teacher/logger/proprietor who relies solely on small pensions to survive. I do not want them converted to a target benefit plans. I spent my life working at many different jobs and it's wrong, for them to take away my security in my old age.

It's shameful that [the Prime Minister] promised to protect Defined Benefit Plans and now the government is considering this Bill to change that.

We also have a description of how harmful this is from Deborah Zellermeyer from Ladysmith. She writes:

Bill C-27 allows employers to convert good, defined benefit pension plans, which provide secure and predictable pension benefits, into a much less secure form of plan. Target benefit plans only aim to provide benefits, and they shift all the risk to active plan members and retirees.

Even Harper did not propose the bill, although he floated it, and the opposition was so strong.

The Ethics Commissioner said that she outlined the possible conflict when the finance minister met with her two years ago. She said that there is a loophole she thought should have been fixed, as had been recommended to the previous government as well. Therefore, as New Democrats, with our leader, Jagmeet Singh, we are trying to propose positive alternatives.

We want the Ethics Commissioner to launch a formal investigation into the finance minister. We want the finance minister to withdraw Bill C-27. We want the Liberal government to take the advice of the Ethics Commissioner and close these loopholes so that no future minister ever stumbles into the same morass that the finance minister has, fulfill the promise that Liberals offered to voters two years ago, and restore some faith in the current government.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I would like to thank my colleague for sharing his precious speaking time with me, allowing me to address the House concerning the motion before us today that we have been debating since this morning.

We have heard opinions from both sides of the House, but the Liberals have yet to say anything impressive in defence of the Minister of Finance. Rather, they have tried to change the channel. They have tried to take the focus off the problem at hand. For my part, for the 10 minutes allotted to me, I will stick to the motion before us.

The first part of this motion sets out the facts regarding the matter at hand, namely, the situation with the finance minister and his company, Morneau Shepell. The minister led us to believe that he had placed his shares in Morneau Shepell in a blind trust when in fact he had never done so. His story was even corroborated by his Liberal caucus colleagues. The minister had many opportunities to clarify this situation. Everyone believed that he had placed his holdings in a blind trust. The media reported that such was the case, and the minister even allowed his own company to believe that that is what he had done. When the truth came out, everyone saw that he had not in fact put his holdings in a blind trust. The minister had never bothered to set the record straight since being sworn in two years ago. Everyone believed that he was telling the truth about his holdings. The first part of the motion points out the discrepancy, which the Minister of Finance never bothered to clarify.

The second part of the motion deals with the fact that the minister used a loophole in the Conflict of Interest Act. I can confirm that there is indeed a loophole, not because I used it like the finance minister, but because I heard witnesses talking about it when they appeared before the Standing Committee on Access to Information, Privacy and Ethics, which I chaired for two years.

The Ethics Commissioner appeared before the committee to present her recommendations following her five-year review of the Conflict of Interest Act. That happened in 2013. The next review will take place in 2018 and will be a good opportunity to close the loophole that we are talking about today.

In 2013, the commissioner made over 70 recommendations to update the Conflict of Interest Act. Those recommendations apply to ministers and public office holders. They do not apply only to ministers, but also to some senior officials in the Canadian public service. These public office holders must obey this law. In 2013, the commissioner pointed out a number of problems with the act and proposed ways of making it more effective and updating it to reflect changes in technology.

In her report, she clearly states that the wording of the act specifies direct control, saying that a minister cannot have direct control over a company’s shares. She says that, according to the language, a minister could have indirect control. She raised this question as if she were a visionary who could see that infringements of the act might occur. A public office holder may decide to comply only with the letter of the law, that is, to avoid exercising direct control over a company’s shares, without complying with the spirit of the law.

I can just see the Minister of Finance and his army of lawyers and accountants going to the Office of the Conflict of Interest and Ethics Commissioner and asking a lot of questions, and being told that he cannot exercise direct control over shares, but that he can exercise indirect control over them.

His advisors and lawyers tell him that the only thing to do is to register a company without bothering to give it a name. He can just give it a number, then register it in Alberta where corporate income tax rates are lowest. He can register all of Morneau Shepell’s shares in his company. Thus, he will be the sole shareholder of a numbered company in Alberta.

His lawyers are very smart, and we must give them credit, because their job was to find loopholes in the act, and that is what they are paid for. They did what the minister asked. He asked them to find a way of allowing him to control his shares while complying with the letter of the law.

They told him that they found the solution, that all he had to do was register a company. That is what he did and, for two years, he has had us believe that his situation was in order and that he had even placed his assets in a blind trust. Of course, the blind trust would respect both the letter and the spirit of the law, although this raises questions in any case, because, at the end of his term, the minister can always put the assets back in his name.

There are some misgivings about blind trusts, but that would have at least complied with the spirit of the law. However, the minister decided to do something else, and that is why he is being asked today to apologize to the House. He put himself in a conflict of interest or in a situation strongly suggesting a conflict of interest.

If any ethics professors are looking for the perfect example of a situation that suggests a conflict of interest, I think this situation with the Minister of Finance is ideal.

The minister is still in control of his shares in a large Canadian company, Morneau Shepell. This company sometimes deals directly with the Government of Canada. In general, it specializes in pension administration.

The company's value even increased when the Minister of Finance, who still had control over his holdings, introduced a bill that was good for his company. We are not the ones who came up with the idea that Bill C-27 would benefit his company. He said so himself in 2013 that a bill like this could benefit his company and would be the ideal thing for the company's growth and positioning. He said that in 2013 when he was still part of the family business. We did not come up with the idea that he profited from this. We can simply look at the numbers and see that this was indeed the case. The market responded favourably when the bill was introduced even though it had not yet been passed.

As soon as the bill was introduced the markets responded favourably because investors felt that there was a potential for growth for Morneau Shepell.

The minister personally profited from the increased value in his company when he introduced the bill. Imagine what things would look like if the bill had passed.

The bill is still on the order paper, but it has not yet been passed. However, we can just imagine how much this company would profit from the bill passing.

Who benefits in the end?

The Minister of Finance does.

However, he finally gave in to the evidence and acknowledged his mistakes by changing his financial situation with the Conflict of Interest and Ethics Commissioner as a result of public pressure. He did not seem thrilled to do so. He had probably worked out some elaborate strategy to maintain control, but under pressure, the minister finally decided to change his situation.

He did so because he saw that he had no other choice.

I mused earlier about the minister and his lawyers before the Conflict of Interest and Ethics Commissioner, and I can also imagine another scenario, one where the Prime Minister called him and told him to sort this out or find another job.

I would say he did not have much choice. To suggest today that he did so willingly and because he wants to serve Canadians would be to take us for fools. I hope he apologizes so that we can turn the page on this once and for all.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, it is always a great honour to rise in the House to represent the people of Timmins—James Bay.

Over my last 14 years in Parliament, I have seen all manner of scandals. I have seen scandals that were just plain idiotic, tawdry behaviour, and scandals that were not really scandals at all, just that sometimes people made mistakes and had to account for errors in judgment. However, they were still accountable to the people of Canada. What we are talking about today in terms of a conflict of interest with the Minister of Finance, to me, speaks to the cynicism of the government and its approach to ordinary working Canadians who work hard and play by the rules.

The conflict of interest we are seeing with the finance minister is that, as the privatized pension king of Canada, he had a very clear financial interest in changing pension legislation. When he was presented as the finance minister for this Parliament, he did not explain to Canadians that he had set up—how would one even describe it—this numbered company that he moved his dividends and profits into, which maintained his connection to Morneau Shepell, the privatized pension operation of Canada.

What we hear from the Liberals is that this is a separate account and not really something that he had control of. It is the same as folks back home putting $100 into a cookie jar, being asked if they have $100, saying no, the cookie jar has $100, then being asked who owns the cookie jar, saying they do, being told that means they have $100, and them saying no, it is in the cookie jar. However, we are not talking about $100. We are talking about millions of dollars of direct benefit for Morneau Shepell.

I want to talk about three issues. The first is the Barbados tax haven that the finance minister has interest in and has been negotiating treaties for without recusing himself. The second is the issue of Bill C-27, which he brought forward without explanation or any prior public consultation, that would benefit the investors at Morneau Shepell, and the third is the one before us today across Canada, the abominable treatment of Sears workers. We were all shocked and appalled when we heard that Sears executives attempted to cut off the financial, dental, and medical rights of Sears pensioners as Sears was facing bankruptcy and, at the same time, paying $9.2 million to its executives. That kind of pension theft is not only legal in Canada, but executives get corporate bonuses for doing it.

I have been attacked on Twitter by the Liberal trolls who said that this was no bricks and mortar issue, it just went the way of the dodo. Sears was a top-notch corporation that was run into the ground by the hedge fund operator Eddie Lampert, who pretty much lost $10 billion of value. One does not cry for corporate bandits like Eddie Lampert and his crew, because as Sears was getting into trouble, its hedge fund operators basically loaned $500 million to Sears through taking 46 key properties as collateral assets. If Sears went down, those hedge fund operators walked away with the property. Therefore, they are sitting pretty.

We approached the finance minister and asked him to change that loophole to protect the pension rights of Sears workers. That is not asking for anything special. It is asking to ensure that when people have paid into a pension for their whole lives, it is not at the back of the line when creditors come, that it is considered part of the credit that has to be protected. The finance minister will not do it, and we did not know until October 17 that Morneau Shepell was getting the contract for the Sears workers. Is there a direct link? The direct link is that the dividends go to Morneau Shepell investors, of which the finance minister is one. That needs to be explained to Canadians.

I am deeply concerned about Bill C-27, because in 2013, as the head of Morneau Shepell, the current finance minister talked about the role that Morneau Shepell played in moving towards targeted benefit plans and how there was a need in Canada to change the legislation to benefit the investors of Morneau Shepell. When he became finance minister, he introduced Bill C-27, which was the legislation to do just that. What is striking about Bill C-27 is that there were no prior public consultations or public meetings. Therefore, who gave the advice to the finance minister to change legislation that would have an enormous impact on the company that he and his father helped found?

Bill C-27 is a clear conflict of interest. It is a conflict of interest that touches Canadians who are worried about the future of their defined pension benefits across the country. It is a right of Canadians to believe that parliamentarians will put the interests of the public ahead of their own pecuniary interests. That is the whole question of conflict of interest.

In the case of the Minister of Finance, bringing forward legislation that would have a direct benefit to his company without recusing himself is an abuse of his role as a minister of the crown and needs to be explained. It is also an abuse of the House, because we did not know that he was receiving dividends from Morneau Shepell throughout this period.

To note, I will be splitting my time with the member for Sherbrooke.

Now we find out about the Barbados tax havens. The Minister of Finance is signing a tax treaty with Barbados. I know Barbados sounds like a great place for sand and hanging on the beach, but it is notorious as a fiscal paradise for companies that do not want to pay their share. What is really disturbing about Barbados is that we found out that Morneau Shepell is involved down there. There is a direct financial interest. The minister did not recuse himself. How could he be working on a treaty with a place that is a notorious fiscal paradise when Canadians are paying their fair share and they are looking to the Minister of Finance for accountability?

I know my friends in the Liberal Party are in trouble on this issue, because whenever the Liberals are in trouble on a file, they start throwing out the term “middle class”. In fact, they say the “middle class and those wanting to join them”. Folks back home, if they were in some of kind university drinking game, where every time the Liberals said that in a speech they had to take a shot, they would be bombed at the end of the first five minutes.

I guess the Minister of Finance grew up in a different middle class than I grew up in. His middle class is going after dentists and farmers. His middle class is going after people who are suffering from diabetes. His middle class is going after employee discounts at restaurants in order to tax them. Meanwhile, the one first promise that the minister broke was the $840-million corporate stock loophole that would protect 8,000 insiders on Bay Street. He reassured Bay Street that he would have their back.

Right now the Liberals are saying that they are doing all of this for the middle class. They are setting up a tax haven treaty with Barbados for the middle class. The Minister of Finance is attacking the pension rights of Canadians across the country, through Bill C-27, for the middle class. Of course, the Sears workers, well, they are out of the middle class altogether.

It reminds me of when the Liberals were caught out on the Saudi arms deal. They were dealing with House of Saud to help the middle class. That was the Prime Minister. On their abandonment of electoral reform, he said we had to do it to protect the middle class. Cash for access was the golden one, where Chinese billionaires were paying $1,500 to meet with the Prime Minister. He was asked, “What could you possibly be meeting with Chinese billionaires about that was not a conflict of interest?” He said that they were talking about the middle class. Imagine that. Imagine that is what billionaires talk about.

This is about abuse of public trust. This is about a Minister of Finance who has broken the trust of the Canadian people and who owes an apology to this House. This is about a government that has to retract Bill C-27, because it is a clear conflict that will benefit the insiders of the Liberal Party and not Canadians.

We need to have some clarity. Canadians need to have trust that the government they elect is not going to be just looking after the interests of their friends on Bay Street but is going to pay attention, finally, to the Canadians who work hard, pay their taxes, and play by the rules, unlike the government.

Pensions

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, it is simple. The finance minister still owns a million shares in Morneau Shepell, a company that would directly profit by the passing of his bill, Bill C-27. This is a major conflict of interest.

Also, the government could have prevented the devastating effects of the Sears bankruptcy by simply changing Canada's bankruptcy insolvency laws. However, in true fashion, the Liberals continue to protect their rich corporate friends instead of protecting the pensions and benefits of middle-class Canadians. When will the finance minister stop this attack on workers' pensions, abandon Bill C-27, and protect workers?

Ethics

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, we have questions about the minister's conflicts of interest.

He tabled a bill that will benefit him personally. He told Canadians he would put his assets in a blind trust but then failed to do so. He is up to his neck in conflicts of interest.

All we want to know, yes or no, is whether the minister recused himself from all discussions, especially those around Bill C-27.

[Shannon Stubbs, Conservative, Lakeland, AB]

Mr. Speaker, last October, the current finance minister himself introduced Bill C-27, which will set up the same target benefit plans that he had called for as executive chair of Morneau Shepell. The finance minister has finally put his assets in a blind trust, but that does not fix the problem. Canadians are concerned about how he has admitted that he has no moral compass of his own. For the last two years, he introduced and crafted legislation that directly benefits himself and his billion-dollar family company. Why did the finance minister not recuse himself from all discussions about Bill C-27?

[Shannon Stubbs, Conservative, Lakeland, AB]

Mr. Speaker, there is nothing virtuous about a circle where the finance minister uses his power to make decisions to benefit himself and his company. In 2013, when the current finance minister was the executive chair of Morneau Shepell, he said, “We need legislation enabling Target Benefit Plans.” Then, once he became the finance minister, he introduced that very legislation. The finance minister has been receiving roughly $65,000 a month from Morneau Shepell the entire time. That is an obvious conflict. Did the finance minister recuse himself from all discussions about Bill C-27?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, that is precisely the problem. They take action only when they realize they have been cornered and people are criticizing them. That is what is happening with the Minister of Finance.

Morneau Shepell is applying the government's laws and the Minister of Finance is the one writing those laws. It is a direct conflict of interest and we saw that with Bill C-27.

My question is quite simple: when did the Minister of Finance get permission from the ethics commissioner to introduce Bill C-27?

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, the reality is that the minister keeps blaming the Ethics Commissioner for his own actions but, wait, the minister committed to that same commissioner, in writing, to abstain from matters related to Morneau Shepell.

Again, did the finance minister get written permission to introduce Bill C-27, a bill that profited him and his family business?

Pensions

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, for two years, I have called on the Liberal government to keep its election promise to improve the retirement security of Canadians. Unfortunately, the government has failed to respond. Now the government wants to wage a war on secure defined benefit plans, which many Canadian workers depend on for their retirement.

Bill C-27 would make it easier for companies to convert their defined benefit plans to targeted benefit plans. Employers would benefit by facing much less risk. Employees would be given all the risk. Gone are the days when people could look forward to retiring with a pension that allowed them to live with the dignity they deserve. The finance minister's company will make millions off of Bill C-27. In fact, the value of his stock went up almost $2 million in the five days after he introduced the new legislation. That is more than most Canadians make in a lifetime.

Is this a conflict of interest? Canadians certainly think so. Do the right thing for Canadian workers and withdraw Bill C-27 immediately.

Opposition Motion—Minister of Finance and Conflict of Interest Act

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Indeed. What good fortune. The Minister of Finance may just have one million shares. That is debatable. He probably has two million shares in Morneau Shepell, and he introduces Bill C-27, which would bring business to his own company, from which he profits.

Bill C-27 would replace defined benefits with target benefits. These benefits are essentially like Jell-O. It is a Jell-O retirement plan in which no one has any idea how much they will have in retirement. There is a target, an objective. For example, you would like to have $1,000 a month, but there is no guarantee that this will happen. This type of plan is extremely complicated to manage. Companies like Morneau Shepell manage them.

Did the Minister of Finance place all of his assets and shares in a blind trust, as he indicated in the beginning when he was elected?

Surprise, surprise, Madam Speaker, the answer is no. I can feel the disappointment.

The Minister of Finance is a very smart, but sometimes wily, man, and he used a loophole to avoid putting his shares and assets in a blind trust. He put them in a numbered company. He thought that no one would realize, and meanwhile, his own company, and therefore his own bank account, would profit from Bill C-27, which he introduced.

The Minister of Finance put himself in a blatant conflict of interest. As soon as Bill C-27 was introduced, it had an effect on the markets. Morneau Shepell shares went up.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

I stand corrected, Madam Speaker; the member for Hochelaga says it can happen once or twice.

Despite its constant refrain about the middle class and those working hard to join it, it seems like all of the decisions made by this government actually benefit the top 1%, the very elite to which the finance minister belongs. I will come back to this.

The Liberal government brags that it has helped middle-class Canadians by lowering the tax rate for some of them. However, bear in mind that the Liberal tax cut primarily benefits people earning at least $120,000 a year. Anyone who earns less than $45,000 a year falls under their radar. They do not exist. People who earn $30,000, $35,000, or $42,000 a year do not fit in the Liberal Party's definition of the middle class and do not need help. Bear that in mind, because it is important to remember that the people who benefited most from the personal income tax rate adjustment scheme were those earning more than $120,000 a year. It is unbelievable.

Furthermore, the Liberals broke their promise to put an end to CEO stock-option tax loopholes, which cost us $800 million a year. The Liberals are not going to go after CEOs or the richest 1% because that would mean going after their Bay Street buddies. Instead they will keep picking on the little guy.

Not only is the tax cut utterly laughable, as it will not help the low-income Canadians who need help the most, but a tax loophole that benefits CEOs remains untouched, and Canada is still doing business with tax havens.

In March, the NDP moved a motion in the House, and all of the Liberal Party members voted in favour of it. Among other things, the motion called on the government to take a close look at all of our tax treaties with tax havens, such as Barbados and the Cayman Islands. The Liberals went ahead and did that. Then they said the list was incomplete and that there might be one more to add to it.

The NDP was so naive. We thought the Liberal vote meant the government would shorten the list of countries with which it does business, but the government is actually making that list longer. It added the Cook Islands, a British protectorate down around New Zealand whose corporate tax rate is zero. People who stash money there pay no tax. Then they bring it back to Canada, claim that it was taxed in another jurisdiction, and avoid paying tax in Canada.

Here is a very conservative estimate I am sure my friends will like: every year, we lose between $5 billion and $8 billion because of tax havens. Those numbers come from Statistics Canada. It is probably much more than that because we have no real way of knowing.

In that same vein, the Liberals never attack people who take advantage of the system and use the personal income tax rate, the CEO loophole, and tax havens to avoid paying their fair share. What do the Liberals do instead? They introduce Bill C-27, a direct attack on our country's employee pension plans, which were negotiated in good faith with employers. These pension plans provide employees with a guaranteed amount once the employees reach old age. These are defined benefit pension plans, which means that these people know that they can count on getting a certain amount every month on retirement. This allows them to budget for expenses such as rent and vacations, and for helping out their grandchildren financially when they go to university.

The Liberal government is attacking defined benefit pension plans with Bill C-27. The thing is, the Minister of Finance's company, Morneau Shepell, specializes in managing pension plans.

[Sheri Benson, NDP, Saskatoon West, SK]

Madam Speaker, I will be splitting my time with the member for Rosemont—La Petite-Patrie.

Today we are debating what the finance minister would like Canadians and parliamentarians to believe was just a series of misfortunate events, a “distraction”, to use the minister's own words.

I do not share the Minister of Finance's assessment of the matters we are debating today. Instead, respectfully, I would say what has transpired for the minister is not a distraction, is not an administrative error, and certainly is not of the making because of the advice of the Ethics and Conflict of Interest Commissioner, but instead an error in judgment made by the minister. The minister must now find a way forward, so that Canadians can trust that their interests are first and foremost in his mind.

Let me share specifically what we are debating today since we have gone a bit off track when we heard from members on the other side.

What are these so-called distractions?

After being elected to Parliament in 2015, the Minister of Finance led Canadians to believe that he had placed his shares in Morneau Shepell into a blind trust while having never done so. He used a loophole in the Conflict of Interest Act to place his shares in a private numbered company instead of divesting them or placing them in a blind trust.

On October 19, 2016, the minister sponsored Bill C-27, a bill that would reasonably be expected, by reasonable people, to profit Morneau Shepell and the Minister of Finance in light of his continued ownership of shares in Morneau Shepell and through a company he also controls.

The minister remained in charge of regulating the pension industry in which he has a personal economic interest.

Finally, he has failed to live to up to the ethical standards set forth by the Prime Minister in his mandate letter to the minister.

The motion also clearly outlines what needs to happen going forward, a proposal so that the Minister of Finance is not distracted by circumstances of his own making and can resume his focus on the important work of a finance minister.

The motion provides a way forward for all ministers and all parliamentarians by asking the government to close the loopholes in the Conflict of Interest Act as recommended by the Conflict of Interest and Ethics Commissioner.

Two years ago, like many Canadians I believed that the then newly elected Liberal government was going to lead differently and bring real change. I personally, along with many others here in the House, made the decision to run for political office to change Parliament and government for the better so that we could better serve all Canadians. More specifically, I ran to advocate for the constituents of Saskatoon West, the community where I have lived and worked for over 30 years.

I have taken every opportunity to point out when I believe the government has followed through on commitments that help my constituents, when, as the labour critic, the government has made important policy changes that support workers' rights and make workplaces safer. I have also pointed out when the government did not follow through on commitments and promises that it made during the election.

When I read the Prime Minister's mandate letters to his cabinet ministers, I was optimistic that we would see a different kind of government, not only in stark contrast to the previous government but a different kind of Liberal government than we have seen in the past. I believed that what was written down on paper in the ministerial mandate letters would be acted upon and would be more than just words.

Here are some excerpts from the finance minister's mandate letter that stood out for me personally and led me to be optimistic that real change was not just possible but indeed would happen:

“We have promised Canadians a government that will bring real change—in both what we do and how we do it”.

“We have also committed to set a higher bar for openness and transparency in government”.

“Its important that we acknowledge mistakes when we make them.”

Finally, the phrase most relevant to today's debate:

...you must uphold the highest standards of honesty and impartiality, and both the performance of your official duties and the arrangement of your private affairs should bear the closest public scrutiny. This is an obligation that is not fully discharged by simply acting within the law.

Last week, the finance minister, because of pressure from the opposition and an investigation by journalists, did the right thing and after two years as the finance minister, divested himself and his family of all shares in Morneau Shepell. This was the right thing to do.

Madam Speaker, I would say that the finance minister still has more to do to live up to the Prime Minister's expectations, as stated in his mandate letter. Let me elaborate by focusing on Bill C-27.

The tabling of Bill C-27 by the finance minister when he still had business interests in his company, and thus would benefit if the bill were enacted, also put the minister at odds with what was asked of him in his mandate letter from the Prime Minister. This clearly was a conflict of interest. It is possible that he may have indeed personally benefited from simply tabling Bill C-27. I say this because we know that shares in Morneau Shepell increased in value after the bill was tabled.

We also know from news reports that the Minister of Finance, while still in private life, advocated for such a bill. The bill would amend the pension act, allowing employers to change their current commitment to defined pension plans to target benefit pension plans. Morneau Shepell is a major provider of these types of benefit plans.

Bill C-27, should it be enacted, would erode pension security for thousands of federally regulated workers by allowing employers to remove their legal obligations to current and future retirees by converting defined pension plans, even retroactively, to target benefit plans. The bill would allow all the financial risk in future pension benefits to be shifted to individual workers.

Beyond the fact that the Minister of Finance would have benefited financially from the bill, and beyond the fact that he presented a bill that would make changes in regulations that he advocated for in his private life as a business owner, Bill C-27 was introduced without any consultation with Canadians, pensioners, or unions. As well, it broke a specific election promise made by the Prime Minister. When the previous Conservative government proposed similar legislation, it was met with such opposition by retirees and other stakeholders that the effort was abandoned.

I ask the minister why he introduced the legislation. Does he not see how Canadians and parliamentarians would be somewhat suspicious about in whose interest the minister acted when tabling Bill C-27? I would respectfully ask the minister to do the right thing and tell Parliament and Canadians that he will not proceed with Bill C-27.

I believe that Canadians expect the Minister of Finance to go above and beyond, not simply to technically be in compliance with ethical guidelines but to do in word and deed as he was asked by the Prime Minister in his mandate letter, and that is to carry out his duties so that his actions can “bear the closest public scrutiny. This is an obligation that is not fully discharged simply by acting within the law.”

Canadians deserve a finance minister who does not see questions about ethics as distractions. Canadians deserve a finance minister who acknowledges that he has made a mistake.

I believe I have outlined a number of actions the government and the finance minister could take to move forward for the benefit of all Canadians, such as eliminating loopholes in the Conflict of Interest Act, protecting federally regulated defined pension plans, and following through on commitments made by the government during the election.

There is always an opportunity to do the right thing. I urge the Minister of Finance and the government to do the right thing as soon as possible.