Bill C-231 (Historical)

An Act to amend the Canada Pension Plan Investment Board Act (investments)

This enactment amends the Canada Pension Plan Investment Board Act to specify that the investment policies, standards and procedures established by the board of directors shall provide that no investment may be made or held in any entity that engages in certain practices.

Canada Pension Plan Investment Board Act

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

moved that Bill C-231, An Act to amend the Canada Pension Plan Investment Board Act (investments), be read the second time and referred to a committee.

Mr. Speaker, it is indeed a great and rare honour to be able to stand in the House of Commons to sponsor and present a piece of legislation for my colleagues to consider. I hope that between now and March of next year, when we will likely come to a vote, I can convince more than a few of my colleagues that this bill has merit and deserves to go to committee.

Today, I am pleased to kick off the debate on Bill C-231, an act to amend the Canada Pension Plan Investment Board Act. The behaviour of corporations around the world is coming under increasing scrutiny as more and more people are demanding action. Here in Canada we have also acknowledged the problem, most notably when the Liberal government decided to establish an ombudsperson for responsible enterprise, who is supposed to received and review claims of human rights abuses arising from companies abroad in the mining, oil and gas, and garment sectors.

The NDP has long been a leader in demanding more corporate responsibility. Most recently in the final days of the 42nd Parliament, the member for New Westminster—Burnaby brought forward his bill, Bill C-331, which would have allowed for gross violations of human, labour and environmental rights to be brought before a Canadian federal court.

The idea behind my bill, Bill C-231, is the questionable investments that are funding bad corporate actors. It is an idea that many people in Canada have long been concerned with, and it led me to further research in order to put the Canada pension plan's investments under closer scrutiny.

The Canada pension plan is an important pillar of our country's retirement system. Every year, millions of Canadians pay into the plan, which provides retirement, disability, survivor and death benefits to millions more. It is a sacred contract in recognizing years of hard work. Managing the careful balance between beneficiaries and contributors requires due diligence to the CPP fund, which is governed by the Canada Pension Plan Investment Board.

Through its careful investing strategy, the CPP fund is now valued at over $400 billion and is one of the largest pension funds in the world. I also want to note that the members of the CPP Investment Board have reached out to me over the last couple of years about my proposed legislation and to talk about their policy on responsible investing, which “aspires to integrate [environmental, social and governance] factors into investment management processes”. However, the document goes on to state that the investment board does not “screen stocks or eliminate investments based on ESG factors.”

This is the crux of the matter. Nowhere in the Canada Pension Plan Investment Board Act is there any mention of ESG factors or ethical business practices. There is no mention of human rights, labour rights or environmental rights. All we are left with is a policy, which itself admits that ESG factors, while a strong guideline, are non-binding in its investment decisions. The overriding duty of the investment board is to maximize investment returns without undue risk of loss. This is clarified in section 5 of the Act.

It is here that people will probably want to stop me and say, “So what? That is fine, and we should leave it that way. After all, the board has managed to grow the fund in a spectacular fashion, putting its financial health for future beneficiaries on a good path.”

I agree the fund is in fantastic condition, and I have no doubt that the managers of the investment board are doing their utmost to continue this work, but, and it is a big but, when we take a deep dive into the investment holdings of the CPPIB, we find a laundry list of problematic investments.

Before I get into the details of Bill C-231 itself, I think it would be helpful for members of the House to understand precisely what I am talking about when I refer to problematic investments. I am extremely grateful to the Library of Parliament for assisting me in this research, but I am also grateful to organizations such as Corporate Knights and various news outlets that have exposed CPP investment holdings, which many of us would find, at the very least, questionable.

Let us start with the Responsible Mining Index. The most recent data I have is from 2018, and it ranks companies on their performance on economic, social and governance practices. The companies are scored out of 36 points. The research I was able to obtain from the CPPIB's holdings shows that our pension dollars were invested in companies that scored in the low single digits. One company scored a 2.6.

KnowTheChain's 2018 Food and Beverage Benchmark Findings Report rates food and beverage companies on their efforts to address the risks of forced labour in their supply chains. The companies in their research are scored out of 100. Again, the research I was able to obtain from the CPPIB's holdings show that our pension dollars were invested in companies that scored in the low single digits. One company scored a four; another scored seven, and that is out of 100.

From 2000 until 2015, Public Eye hosted awards of shame competitions intended for companies with poor social responsibility records. As it is stated on the website, all of them are corporations whose business activities have been characterized by human rights violations, environmental destruction, immoral tax practices or corruption. Again, the research I was able to obtain from the Investment Board's holdings shows that our pension dollars were invested in many of the companies listed there.

Corporate Knights is a publication that defines itself as the most prominent magazine in the clean capitalism media space. It defines clean capitalism as “an economic system in which prices incorporate social, economic and ecological benefits and costs, and [actors] know the full impacts of their...actions.” Its research shows that our pension dollars are exposed to companies engaged in blocking climate policy, blocking climate resolutions, forced or child labour, severe environmental damage and severe human rights violations.

We, of course, are all aware of the very real and imminent danger that climate change is posing to our world. It will be the defining issue of the 21st century, and our actions in the next 10 years will determine how we meet this challenge. Despite this fact, the Canada Pension Plan Investment Board continues to invest our pension dollars in major carbon emitters.

CDP's 2017 report on major carbon emitters compiled a list of the world's top greenhouse gas producers, and among the Investment Board's holdings were Gazprom, which was responsible for 3.9%, and Coal India, which was responsible for 1.9% of global industrial greenhouse gas emissions.

ShareAction is a charity that has spent the last 12 years building the movement for responsible investment. It is now taking the movement worldwide to transform the investment system and unlock its potential to be a force for good. It released a report in 2018 entitled “Pensions in a Changing Climate”, which assesses the pension sector's response to the recommendations of the Task Force on Climate-related Financial Disclosures.

It did an analysis of the world's 100 largest public pension funds and their approach to climate-related risks and opportunities, and they ranked the Canada Pension Plan Investment Board in 32nd place with only a CCC rating. This ranking shows that we are only starting to take action on climate risk. As the task force stated in its report, large global pension funds have a responsibility to manage their funds in the long-term interests of their members and beneficiaries, which includes building appropriate responses to climate change as a material investment risk.

There have also been new stories over the last couple of years showing that the Canada Pension Plan Investment Board invested in private American prison companies that were operating migrant detention camps along the U.S.-Mexico border. I could go on and on with even more examples of problematic investments. It certainly is a laundry list, but I must be mindful of the time.

What is clear is that the Canada Pension Plan Investment Board's policy on responsible investing has not prevented it from investing our public pension dollars in companies with extremely poor corporate social responsibility records. Bill C-231 would step in to amend section 35 of the act by providing that the investment policies, standards and procedures take into account environmental, social and governance factors, and that our investments cannot be held in an entity if there are reasons to believe it has performed acts or carried out work contrary to ethical business practices, including the commission of human, labour and environmental rights violations.

The bill also allows provides for no investment being allowed in a company that produces arms or munitions of war that are prohibited under international law, or in any company directing acts of corruption. It is important to note that nothing in my bill would change the mandate of the Canada Pension Plan Investment Board, which is to maximize investment returns without undue risk of loss. My bill also does not change the fact that the investment decisions are left in the hands of the investment board and that it is up to them, through the existing section 51 of the act, to explain how their investments were in accordance with the act in their annual report to Parliament.

There are numerous examples around the world, but let us start with one at home. Here in Quebec regarding pension law, we have the CDPQ, which manages 41 public and quasi-public organizations. It is governed by legislation in the province of Quebec, which requires that the board of directors adopt a socially responsible investment policy.

In Sweden, Sweden's national pension insurance funds, the AP Funds Act of 2000, requires state pension funds to take environmental and social considerations into account without relinquishing the overall goal of a higher return on capital. The funds must include environmental and ethical standards in their investment policies and annually report to the government how they would adhere to those practices. Those Swedish funds are worth approximately $154 billion.

In Norway, the largest pension fund in the world, the Government Pension Fund Global is governed by regulations that were passed by its Parliament in 2004 to provide a legal framework emphasizing international human rights and environmental standards. Despite these being labelled as guidelines, the regulations are legally binding. For example, companies can be put under observation or be excluded if there is an unacceptable risk that the company contributes to, or is responsible for, serious or systematic human rights violations, such as murder, torture, deprivation of liberty, forced labour and the worst forms of child labour; or any serious violations on the rights of individuals in situations of war or conflict. As I said, Norway's pension is the largest in the world. It is valued at over $1 trillion and it has these governing factors.

In the last couple of minutes that I have, allow me to conclude by saying this. We all know that money makes the world go around. It is a well-trodden phrase, but it is true. Trillions of dollars are invested in the companies that we buy from, that employ us and that shape the world we live in. A lot of this money belongs to ordinary people and we all have a stake in the way it is spent, but many of the decisions on how it is invested are made behind closed doors. The investment system can be a force for good, but only if these decisions are made openly and with more than short-term profit in mind. We do not want our pension funds to, in any way, cause human misery around the world.

I do not think we often realize just how lucky we are to live in a place like Canada where we enjoy the rule of law and have strong institutions and accountability measures in place to hold corporations to account for their actions. People around the world should have the right to live in a healthy and ecologically based environment. They should have the right to be fairly compensated and respected for the work that they do. They should have the right to life, liberty and security of the person, free from slavery and torture.

We can no longer remain silent on these issues and it is time to demand that our CPP funds do the same. I hope my colleagues will give their utmost consideration to the bill before them and I am looking forward to any questions they may have.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons]

Madam Speaker, the federal government works in co-operation with the provinces. The reality is that it takes both levels of government to see things such as increases in premiums and so forth with CPP. To what degree does the member think that the provinces should have some input in terms of what the member is suggesting?

Secondly, RRSPs are supported by tax measures. When looking at RRSP investments through private investors, would the member apply those same principles to those types of funds?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, if the member looks at the wording of my bill, he will note that at the very end it has a section showing how this bill would come into force. It does specifically reference that the provincial legislatures would have to give their assent, much as they would have to for any changes to the act governing the Canada pension plan itself.

Given all of the examples I gave in my speech of the problematic investments that have been made by the CPP, it is quite obvious to me that we need something more. We need stronger legislation in place to ensure our pension funds are not promoting any kind of human misery around the world. With any RRSP or other kind of investment, we should certainly look at the rules governing those as well to make sure they indeed are meeting the interests of the Canadian people.

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

Madam Speaker, I thank my colleague for his bill and his very inspiring speech.

It is often said that buying is voting, but investing is also voting. In my opinion, the least we can do is to ensure that our investments are ethical choices that correspond to our values and principles, the values and principles of a democracy.

Our investments should be ethical and respect our values. How is that not already the case?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, it is important to note that in the existing act it provides for the investment board to table an annual report to Parliament to explain how it is meeting these standards. As I said in my remarks, the largest pension fund in the world, managed by the Government of Norway, which has over $1 trillion in assets, already has these guidelines in place. They are law. This fund has grown to over $1 trillion and it is able to make money in an ethical way. We can look at such examples and follow suit.

I honestly believe that if we were to canvass the Canadian public and look at the evidence that I presented in my speech, none of them would support our pension funds funding any kind of human misery around the world. It is time to step up to the plate and ensure we put an end to these practices.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, has the member had any discussions with the provincial entities with respect to the bill?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

No, Madam Speaker, I have not had any discussions with provincial entities. Unfortunately, the resources afforded to me as a private member are fairly limited. I can tell the member that I have spent the better part of two years researching this issue and I am very grateful to organizations like Corporate Knights and the Library of Parliament that have outlined these problems.

Surely, the Parliamentary Secretary to the Leader of the Government in the House of Commons can acknowledge, given the evidence I presented in my speech, that there is a problem, that the policy on responsible investing is not meeting its achieved goals. If he is happy with our investments causing human misery around the world, he can vote according, but I think the Canadian public would have something else to say. It is up to us to lead by example in the federal leadership role and encourage provinces to follow our lead.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons]

Madam Speaker, it is a pleasure to rise and address the legislation the member brought forward to the House today. I would like to acknowledge how important the CPP is to Canadians. The CPP is a leading example of a sound pension plan, through management and governance, that I believe is recognized around the world as being so.

The member made reference to the hundreds of billions of dollars we are talking about, and this is money that belongs to Canadians. It is money being vested to ensure when Canadians retire they have a better opportunity to live an enhanced lifestyle. It is meant to put food on tables and pay for a wide variety of bills. It is something Canadians hold very closely to their hearts.

Back in the early or mid-sixties, I believe it was Lester B. Pearson, a Liberal prime minister, who brought in the pension plan, believing at the time that Canadians needed to have such a plan to ensure once they retired they would have the funds necessary to enjoy retirement. We have seen it evolve into what it is today, a fund recognized around the world that continues to grow by billions of dollars every decade.

What the member is attempting to do here is indeed very noble. I have spoken in the chamber in the past about the social corporate responsibilities of doing the right thing, and at times that means one has to take action. I want to pose a very important question to the member: To what degree have the provinces been brought in to this debate?

For years I sat in opposition and would challenge the Harper government as to why it was not working with the provinces to increase the CPP contribution. After years of no increases, I believed we were limiting the potential dividends being paid to people retiring once they hit the 60 or 65 age category. I realized back then that it took the support of the provinces, through negotiations, for any real changes to be made to the CPP. We can talk a great deal about it and debate it inside the chamber, but we need to be able to extend that hand to our provincial and territorial jurisdictions so we can have the dialogue.

I believe there is a very important gap that needs to be addressed. I am hoping to hear in particular from members supporting this legislation on the degree of work they believe should have been done in that area. We went through many years of Stephen Harper where there were no negotiations.

One of the things I talked about in the past is that shortly after forming government back in 2015, the Prime Minister mandated our ministries to look at ways they could reach out to the provinces and address the need to increase the CPP.

I am not 100% sure, but I think the Conservation opposition day motion coming up later today is actually in opposition to some of the increases we are proposing for CPP.

It is not easy to accomplish what this government has, in regard to increases in the CPP, so that people will have more disposable income when they retire.

If members talked at length with seniors in our communities, they would find that retirement funds are absolutely critical. That is one of the reasons we left the CPP increases with the provinces, in terms of the negotiations that took place, but we also looked at other pension funds, such as the guaranteed income supplement and the old age supplement. We saw increases shortly after we took office in 2015. We used those mechanisms during the pandemic to give additional one-time payments to seniors. These actions clearly demonstrate that the government has an interest in retirement pensions.

On the issue of how we invest in those retirement pensions, the Canada Pension Plan Investment Board has done well for Canadians for many years now. It has demonstrated that in the returns it has received for the monies collected through workers. I have immense respect for the work it has done. The investment board has a spectrum of things it considers prior to making those investments.

The types of changes the member is proposing we pass today need to be discussed with our provincial and territorial partners, at the very least. We are talking about over a quarter of a trillion dollars. That is literally hundreds of billions of dollars.

I floated a question to the member regarding RRSPs. We are talking about hundreds of millions, to billions, of dollars. Canadians invest in RRSPs, which are tax subsidized. Would the same principles that the member is talking about here be universally applied to those? When I posed the question to the member, his response was yes. If the answer is yes, then we are talking about other financial institutions: the big banks and those others that invest in RRSPs, and other forms of government assistance toward retirement. It opens into a new area of human rights. That is a much larger picture.

The member made reference to corporate social responsibilities. We could look at ways in which we have, through private member's bills and government bills, tried to influence corporate behaviour. It does not only apply here in Canada, but around the world for Canadian companies no matter where they operate. That is why I said, toward the beginning, that what the member is attempting to achieve is very noble. There is a much bigger picture we need to look at.

My time has expired and I am thankful for the opportunity to share a few words because I realize how important this issue is. Citizens of our country want the government to act where it can.

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, today I rise to address Bill C-231, which on the surface appears to be a noble attempt to direct our pension funds exclusively toward the common good, but the old adage is that the how is even more important than the what. The devil is in the details, and because the hon. member who proposes this bill is afraid of the devil he has avoided the details altogether in this bill.

The member proposes an amendment to the Canada Pension Plan Investment Board Act that would create a new requirement, which states:

The investment policies, standards and procedures, taking into account environmental, social and governance factors, shall provide that no investment may be made or held in an entity if there are reasons to believe that the entity has performed acts or carried out work contrary to ethical business practices, including...

...the commission of human, labour or environmental rights violations...

What is meant by all of the terminology the member puts in but does not define? We do not know what is meant because the member does not tell us, nor does he provide us with an arbitrator anywhere in the Canadian system that would determine when any such business practices have been violated or when human labour or environmental rights have been in some way offended. He leaves it to our imagination to determine what he means by each of these terms.

With respect to ethical business practices, we know there are some members of the NDP who consider it unethical for businesses to run a profit at all. Excluding profitable businesses from the CPP's portfolio would guarantee impoverishment to Canadians who rely on the fund's returns in order to live out a dignified retirement.

Let us move on to additional criteria the member said would exclude a company from receiving CPP investments. These are environmental violations. The member has written that it would be a violation to invest in oil and gas companies. I am quoting him here when he laments, “the CPPIB is investing billions of your pension dollars into the oil and gas sector”, something he would presumably ban from happening if this bill were adopted. Our pension fund would be banned from investing in Canada's largest exporting industry: the oil and gas sector, which produces more jobs for indigenous Canadians than any other private sector industry. Our resource sector would be banned from receiving funds invested by our pension system at a time when Albertans are considering pulling out of the CPP altogether because of the fact they are demographically younger, and contribute more on a per capita basis, than the other eight provinces that are members of the fund. We are going to look Albertans in the eye and tell them they should stay in the CPP pension fund while that fund specifically bans its managers from investing in Alberta's biggest industry. What an insult to the men and women who have worked in that industry for so long and done so much good for our federation.

On the broader definition that the bill provides of “unethical business practices”, I reached out to the CPPIB and asked what kinds of companies in Canada would be banned from getting Canadian investment under this legislation. It said only the 10 biggest companies on the Toronto Stock Exchange, all 10 of them by valuation, would be banned from receiving investment from the CPPIB. These are companies such as Shopify, Enbridge and the Royal Bank. On a combined basis, these 10 companies, which employ literally millions of Canadians, would be banned from receiving investments from their very own pension fund.

Whether that was the member's intention, I do not know. In fact, I rather doubt it, but that is not important. Writing laws is like programming computers: The machine does what it is programmed to do. If the CPPIB is programmed to ban all of these entities from receiving investment, that is what the managers will be forced to do. In fact, if the principles in this bill were actually applied, I wonder whether the fund would even be able to buy bonds in the Canadian government. CPPIB said that it would only be allowed to buy bonds in the Canadian government if the bill passed. I do not think it would even be allowed to do that.

Let us think about it. The Liberal government cannot provide clean drinking water to first nations people, which violates human rights. Now, because of the incompetence of federal ministers who cannot keep their word and provide clean drinking water, the government itself might be banned from receiving bond investments from the CPPIB. The government violated its own environment promises. It has not planted a single tree. This could be perceived as an environmental violation. The government signed off on letting the City of Montreal pour millions of litres of raw sewage into our waters, which is another violation of environmental rights. Could we possibly buy bonds in the City of Montreal or the Government of Canada when such violations have occurred? Of course not.

Because of its poor drafting, this legislation, however well intentioned, cannot reasonably be implemented, even if it were desirable. However, it does give us an opportunity to discuss a new and growing risk that I have worried quietly about for a long time. The CPPIB was depoliticized back in the 1990s. It is a credit to the then Liberal government that it took what was a nearly bankrupt shell, which was highly politicized and whose funds were directed by politicians, and said that it was going to get the sticky fingers and incompetent hands of politicians out of the pensions of Canadians, and it was going to put it in the hands, effectively, of a group of private sector professionals to invest it and obtain a return.

Since that time, the fund has grown from insolvency to $456 billion: almost a half a trillion dollars. Now, I hesitated to say that in this place, because a lot of politicians just got really big eyes, thinking, “Oh my goodness, what could we do with that.” Oh, the schemes they could come up with to deploy a half a trillion dollars. My goodness, they are rubbing their hands together. If only viewers back home could see it. There are politicians rubbing their hands together, thinking about that very thought right now.

Let me give an example of how our government is already leveraging that well. This Prime Minister constantly says that we have the lowest debt-to-GDP ratio in the G7. True, it was an inheritance and had nothing to do with him, but the only reason it is true is because that $456 billion is deducted from our gross debt to get a much lower net debt and give the appearance that we have a low national debt.

Already, that money, which represents 20% of our GDP, is being leveraged in the minds of the government to justify its irresponsible spending. How long will it be, if the government keeps spending at this pace, before it starts to say, “Oh my goodness, we are out of money. We are broke, and now we need to start looking at that big pot of gold that Canadians had set aside.”

We on the Conservative side will fight tooth and nail to keep the hands of politicians off the pensions of Canadians. We see it already, with the former minister of the environment urging the CPPIB to invest in her pet environmental projects, similar to what happened provincially in Ontario when it almost bankrupted its electrical system doing the exact same thing.

We know many would like to defund our energy sector. We, on the Conservative side, will fight to keep the CPP depoliticized with the single purpose of giving an honest return to our hard-working Canadian employees and the retirees who depend on that fund.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I first want to commend the member for Cowichan—Malahat—Langford on his bill and his speech.

I will begin my speech by saying that the Bloc Québécois agrees with the spirit of this bill. No one can oppose efforts to prevent Canada's public nest egg from being invested in companies that behave unethically either here or abroad. We should not encourage companies that break the law either here or abroad. The managers of Canadian pension funds should be no exception.

This bill makes me want to question the leaders of the Canada Pension Plan Investment Board, or CPPIB. I would be interested in talking to them because I do not understand why the CPPIB is currently investing in corrupt companies.

This bill is worthwhile, but I would be surprised if it had much of an impact on the CPPIB's current investments. I will be talking not only about what passing this bill would mean, but also about some things that I would like to see added to it, should it be passed by the House.

First, I would like to talk about the $600 million-plus invested in shares in oil and gas companies. In Canada, transportation and oil and gas development account for over half, or 52%, of our emissions. Alberta pollutes more than Quebec and Ontario combined.

Our retirement funds need to get with the program and stop investing in sectors that make it harder for us to achieve the Paris Agreement targets. The CPPIB should take its cue from the people in charge of the Quebec pension plan. The Caisse de dépôt et placement du Québec, which is responsible for the Government and Public Employees Retirement Plan Fund, has a plan to reduce investment in polluting industries that is much more ambitious than the CPPIB's. In 2017, together with 11 partners from all over the world, the Caisse launched the Net-Zero Asset Owner Alliance, whose members are working to transition their portfolios to net-zero emissions by 2050. The Caisse also has a plan to reduce its carbon footprint by 25% per dollar invested by 2025. I see potential for a good conversation about this with the CPPIB, one that might persuade it to see the Caisse's strategy as a very viable option.

I would also like to talk to them about their decision to invest $900 million in Calpine Corporation. As many people know, Quebec wants to become the battery of North America by exporting its hydroelectricity to the north-eastern United States.

It is easy to imagine the positive impact this would have on reducing GHG emissions, increasing Quebec's collective prosperity and meeting the Paris targets. Everybody would benefit. This would be the equivalent of taking 700,000 cars off the road. However, Calpine produces electricity from gas. It has invested $600 million to oppose Hydro-Québec's plan to build a high tension power line to provide Americans with clean, abundant and cheaper electricity. It is rallying the public to call for a referendum to block the project. It is unbelievable. Canadian taxpayers are investing their money in fossil fuels in the United States and, in the process, also financing a protest movement against a Quebec green energy project.

I would also like to address another topic with the board, and that is the fight against tax havens. Currently the government is being complicit by entering into non-double taxation agreements with countries that are known tax havens. It is being complicit by tinkering with the rules, such as allowing Barbados to be used as a tax haven under an obscure rule, which goes against the treaty signed between Canada and that small Caribbean country. While its economy is not very big, Barbados is one of the places with the most direct foreign investment coming from Canada. It is outrageous that the government is allowing this to happen.

During the last Parliament, I moved a motion calling for this loophole to be closed, but every Liberal, except one, and every Conservative voted against it.

I will quote the spokesman for Collectif Échec aux paradis fiscaux, Claude Vaillancourt:

At the height of the Panama papers scandal, the Prime Minister publicly boasted that he would be keeping an eye on Canadians who might be tempted by tax avoidance, but now he is refusing to take real action to close one of the biggest doors to tax avoidance. It is simply unacceptable. He needs to walk the talk.

Since the days when Paul Martin served as finance minister, governments have been spineless, and we must therefore continue to hope that leaders with influence, such as the board, will take action to change things. They must commit to no longer investing in companies operating in tax havens and to withdraw from these businesses as soon as possible.

Just because the federal government has made tax evasion and avoidance legal it does not mean that profiting from it is ethical. I believe that we must have this discussion because, if we continue down this road, our middle-class citizens and SMEs will continue to bear the burden of taxes. However, I have the impression that this will be a less than agreeable discussion.

This is how the CPPIB responded when it was rocked by the Paradise papers, and I quote: “ We structure our foreign investments to maximize after-tax returns for our contributors and recipients.” This is from a Radio-Canada article. It did not even offer an apology by saying that it had been busted and would change its ways.

Since it is profitable to use questionable or even outright illegal schemes, they will continue to do so. If it is not possible to have a profitable pension fund that meets its actuarial expenses, something is rotten in the state of Denmark, as Shakespeare said, or, in this case, the state of Canada.

The article continues:

Pension fund managers claim that they comply with tax laws wherever they do business.

They point out that pension funds are not taxed in Canada. As is the case with RRSPs, taxes are paid by workers when they withdraw their benefits after retirement. The use of tax havens therefore does not have an impact on federal or provincial coffers.

Other countries have different tax rules. Pension funds structure their investments so as to legally limit the double taxation of their profits.

Basically, they use tax havens because they are easily accessible, good for their bottom line and, until the government fixes the problem, profitable. Some companies even specialize in these kinds of schemes and are sometimes very close to this government. One example is Morneau Sheppell—“Morneau”, as in Bill Morneau, the former finance minister who left in the wake of the WE Charity scandal.

To sum it all up, Canada signs agreements with countries where, for a few hundred thousand dollars, wealthy corporations can hire firms to avoid paying taxes. To increase their profit margins, the CPPIB and other pension funds take advantage of loopholes in the tax system to increase the funds' profits. Meanwhile, the government hunts down large and small tax evaders, but for the largest of the large, the door to tax avoidance has been left wide open.

Obviously, I sometimes get carried away when talking about tax havens, because this really irks me. I will now get back to the substance of the bill.

Another potential improvement would be the disclosure of investments with respect to the proposed paragraphs 35(2)(a), (b) and (c). I would also like to add investments in the immoral polluting economy to that list. This would enable all Canadians who contribute to a fund to know whether they are investing in these types of companies. It would also enable the CPPIB to identify successes and improvements.

As I already pointed out earlier, one cannot really disagree with this bill, but the bill is vague, which means that it lacks teeth. For example, the absence of a clause requiring that funds stop investing in fossil fuels and in tax havens shows that there is work to be done. This bill is a step in the right direction, but I think that it could be improved, and I am prepared to work with my colleagues here in the House to do so. This is truly a step in the right direction, and I think we are in a position to make some improvements without significantly altering the spirit of the bill.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, it is a great pleasure to rise to speak to Bill C-231. I am so glad to see the bill has been brought forward, as it addresses the very important issue of how money in federally sponsored plans will be invested in the interest of all Canadians. I would like to acknowledge my colleague from Cowichan—Malahat—Langford and his staff for all their hard work in bringing the bill to the House.

The bill takes the investment approach of the Canada Pension Plan Investment Board, which is responsible for managing the funds that will be used to pay CPP beneficiaries well into the future. The management of this fund is critically important to the future well-being of Canadian workers and retirees, but the no-holds-barred investment mandate of the fund managers requires some real common-sense tweaking.

I first became aware of the potential problems with the board's management mandate in 2016 when a colleague of mine, a member from Victoria, sent me an email detailing severe human rights abuses at a mining site in Eritrea that was owned by a Canadian mining company. The email further detailed that the Canada Pension Plan Investment Board was a significant shareholder in the Canadian mining company and was at least indirectly tied to the abuse occurring at the Bisha mining site in Eritrea. My staff and I were shocked as we unearthed more information about the abuses. Military personnel were being employed to basically keep the mine workers in a state of slave labour, and this included arbitrary arrests and detentions and even killing workers who were not producing desired results. I seriously wondered how this was possible. How could the fund that Canadians pay into to secure their retirement be used to support such obvious and tragic human rights abuses?

As my staff and I continued to study the question, the answer started to become clear. The mandate of the Canadian Pension Plan Investment Board, with a huge fund of over $400 billion, 1,500 full-time employees and offices on three continents, was to make as much money as it possibly could through its investments, with very little holding it back. This is its mandate, as defined by the CPPIB Act:

(c) to invest its assets with a view to achieving a maximum rate of return, without undue risk of loss, having regard to the factors that may affect the funding of the Canada Pension Plan and the ability of the Canada Pension Plan to meet its financial obligations on any given business day.

As members can see, the only limitation, to put it in plain English, is this: Do not lose any money.

We thought there must be some certainty, with all these restrictions, on how this board could invest the monies of hard-working Canadians. We continued through the act and researched the board's internal documentation, but we could find no restrictions at all. What we did find were guidelines, committees and policies, none of which were binding and none of which seemed to have much of an effect on the enormous number of investment decisions made by the board. More and more, the board's investment oversight seemed to be a function of its PR department rather than anything related to the operational and investment departments.

Shortly after receiving the email from my colleague, I attended a meeting at the parliamentary finance committee at which the representatives of the CPPIB, including its president, were scheduled to appear. I decided to take some of my own concerns and questions directly to them. I asked them if they were aware the mining company they had invested in to the tune of one and a half million shares was engaged in supplying labour to the Bisha mine under conditions that have been described as slave labour. I also asked if they could describe the measures and procedures they have in place to ensure that they avoid investing in companies linked to human rights violations.

I think the CPPIB representatives were caught off guard and unprepared for such a line of questioning. The answers I received were what we would expect from a company president or a company lawyer when they really do not have a good answer: empty and hollow allusions to guidelines and good intentions. However, I did get a promise that someone from the board would follow up and give me a more detailed answer in the days following the committee meeting.

What I ended up getting was a letter from their chief PR person. In this letter, he spouted some vague commitment to being good corporate citizens, but also said this:

Nevsun Resources represents one of approximately 2,500 public companies we are invested in around the world. As at March 31, 2016, CPP Investment Board held 1,519,000 shares in Nevsun Resources totalling a market value of $6 million. We sold much of our position since our last reporting period and our current exposure to the company totals less than $1 million....

I was a bit dumbfounded by this response. The letter seemed to be saying that, because it invested in so many companies worldwide, it could not possibly know what was going on with them. This hardly seems to be a reasonable approach. I was even more shocked by the dubious logic. It is like saying now we are only 20% responsible for investing in a company that is killing its workers, which does not add up and it defies any kind of common sense. I do not think it is something most Canadians would believe.

This is a very important bill. Right now, the CPPIB, which again is responsible for the fund that hard-working Canadians contribute to every year, is investing in companies involved in weapons manufacturing, private for-profit American prisons that detain immigrants and children, companies that are guilty of serious human rights violations and companies responsible for contributing to the global climate crisis.

Is it unreasonable to expect that an organization dedicated to investing public funds should do so with some types of ethical restrictions? I do not think so, and I think many Canadians would agree. What we want and what this bill seeks to do is to have the Canadian Pension Plan Investment Board take a proactive approach of due diligence in its investment policies, leveraging our more than $400-billion pension fund by investing only in companies with ethical business practices and divesting from those that create weapons of war, contribute to climate change and other environmental problems or oppress people around the world through unethical labour practices and human rights violations.

It makes no sense to me, and I think to most Canadians, that the government should not be able to do something about questionable investments made by funds that are governed by acts of Parliament. The situation with Revera long-term care homes is a good case in point. Revera is a for-profit company, wholly owned by the Public Sector Pension Investment Board, an entity created by the federal government to manage pension funds from public sector workers. Revera has been roundly criticized for the mismanagement of its homes, especially during the pandemic.

During the first wave of COVID-19, its homes had the most number of deaths in the industry, and during the second wave, it is again seeing significant outbreaks in its homes across the country. CBC has just announced that Revera had another 100 outbreaks of COVID-19 this morning, including 50 of its workers. There is a course of complaints from its workers about understaffing, a lack of PPE, and overtime and pandemic bonuses are not even being paid.

The problems at Revera are the same that we have found throughout the for-profit, long-term care sector right across the country. It is a model that does not work for guaranteeing the safety of our loved ones. As with some other problematic investments of the CPPIB, it is a problem that the government can do something about.

As Canadians who pay into the fund, which is managed by the CPPIB, we are, by extension, all shareholders in the companies that benefit from the fund's investments. A lot of influence can be had by divesting from companies that conduct themselves in a way that we view as objectionable or unethical. By amending section 35 of the CPPIB Act, which is what this bill seeks to achieve, we can require the board to take a proactive approach to ethical investment, and I am sure that is what Canadians want.

Today, I have heard that a lot of people here believe in the bill in principle, and I encourage us all to work together. Let us move the bill forward and get it passed. I encourage all my colleagues to support the bill today.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Madam Speaker, I am pleased to rise today to contribute to this debate. Ensuring that Canadians have the ability to have a secure and dignified retirement is very important to the government.

The bill before us, Bill C-231, proposes to amend the Canada Pension Plan Investment Board Act to specify that the investment policies, standards and procedures established by the board of directors forbids investments in any entity that engages in certain practices.

Federal and provincial governments created the Canada Pension Plan Investment Board, or CPPIB, in 1997 as an arm's-length organization to prudently invest the surplus funds of the Canada pension plan to ensure its long-term sustainability. CPPIB is now recognized internationally as a leading example of sound pension plan management and governance.

More importantly, its governance structure was designed to allow it to operate free of political interference, while still being accountable to the federal and provincial governments that are the stewards of the CPP. That is to say that CPPIB works on behalf of Canadians and not for the government. This independent governance is widely recognized as a central feature of its success and effectiveness in achieving its mandate to maximize return without undue risk of loss and to manage amounts transferred to it in the best interests of contributors and beneficiaries.

CPPIB's investments have been consistently drawing above average rates of return—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Unfortunately, I must interrupt. The hon. member will have eight minutes the next time this matter is before the House. The time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the Order Paper.

The House resumed from December 7, 2020, consideration of the motion that Bill C-231, An Act to amend the Canada Pension Plan Investment Board Act (investments), be read the second time and referred to a committee.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Madam Speaker, the last time I spoke to this bill was in 2020 and I am resuming where I left off at that time.

The CPPIB's investments have been consistently drawing above-average rates of return. The fund, combining both the base CPP and additional CPP accounts, achieved 10-year and five-year annualized net real returns of 10.5% and 9.6%, respectively.

The CPP fund is now at $556.7 billion and the chief actuary, during her last independent review, confirmed that the plan continues to be sustainable for the next 75 years at current contribution rates. This means that Canadians can have confidence that the CPP will be there for them when they retire.

Let us take a closer look at Bill C-231.

This legislation proposes to amend the investment policies, standards and procedures established by the board of directors of the Canada Pension Plan Investment Board to ensure that no investments can be made or held in entities that have performed acts or carried out work contrary to ethical business practices or have violated human rights, labour or environmental laws.

The bill's intent is certainly noble and laudable, but I believe that it needs to be examined carefully to ensure that there are no unintended consequences. For instance, by prescribing certain investment policies, will this bill conflict with the independent governance of the board?

It is worth repeating that this independent governance is an important element of the board's success and effectiveness. While the board is accountable to federal and provincial finance ministers, it operates at arm's length from these levels of government. The board's investment decisions are not influenced by political direction, regional, social or economic issues, or any non-investment objectives whatsoever. This bill could set a precedent and lead to further calls to restrict the board's activities.

Such a change would certainly threaten the board's independence, but could also threaten the long-term viability of the Canada pension plan.

I would also like to point out that the bill does not set an objective standard with which the CPPIB can comply. The bill would introduce a legal requirement to prohibit investment in entities that undertake unethical business practices, without defining this term. This lack of specificity could open investment decisions up to challenges or litigation from stakeholders. Additionally, we need to consider whether the bill would create an uneven playing field at the investor level and at the company level.

At the investor level, it would be unfair to target only the CPPIB since its competitors, such as other Canadian and foreign pension funds, sovereign wealth funds and major institutional investors, would not be constrained by these rules.

Finally, an amendment such as the one proposed in this bill would require the consent of seven out of 10 provinces, having at least two-thirds of the population of all provinces, in order to come into effect.

The CPPIB explains rather transparently on its own website the policies, resources and strategies it applies to account for environmental, social and governance factors in its investment decisions, as well as the measures it takes as an asset owner.

In fact, the CPPIB recently published an update to its sustainable investment policy that reflects its growing conviction of the importance of accounting for environmental, social and governance risks and possibilities within an increasingly competitive commercial business environment.

The CPPIB is an active member of the Financial Stability Board's Task Force on Climate-Related Disclosures, a founding signatory of the Principles for Responsible Investment network and a partner of the OECD project on long-term investment by institutional investors.

The government is committed to strengthening public pensions and improving the quality of life for seniors now and for generations to come. This includes enhancing the Canada pension plan, which will raise the maximum CPP retirement benefit by up to 50% over time. The enhancement represents a major strengthening of one of the three pillars of Canada's retirement income system, along with the old age security program and voluntary tax-assisted private savings. It will significantly increase retirement security for Canadian families, particularly middle-income families and families without workplace pension plan coverage.

In closing, I would like to note that Canada's seniors worked hard to support their families, build strong communities and contribute to the growth of our economy.

Although many people plan on closing the professional chapter of their lives, especially low-income seniors, retirement can be an intimidating prospect that comes with the risk of financial insecurity and a feeling of isolation.

Thanks to the measures that the government has put in place since 2015, we are helping seniors keep more money in their pockets, receive the CPP benefits to which they are entitled and remain active in their community.

We know that the funds in the Canada pension plan are in good hands and that the plan is actuarially sound for several generations to come. The CPPIB should be allowed to continue to fulfill its mandate free of interference. I therefore encourage hon. members to carefully consider the bill before them.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, it is once again an honour to be able to rise in this place and enter into debate. Today, we are discussing the private member's bill, Bill C-231.

To provide context to this bill, it is basically proposing a number of amendments that, quite frankly, I would suggest have a laudable objective of ensuring that dollars from the fund that pays the Canada pension plan are not being spent in a way that contributes to the commission of human, labour or environmental rights violations; contributes to the production of arms, ammunition, implements of munitions of war prohibited under international law; or benefits individuals or acts of corruption under the Corruption of Foreign Public Officials Act. The bill we are debating suggests a laudable goal. It is unfortunate that the bill itself would not provide the ability to accomplish those things.

I will stop there and explain a bit for those who are watching how the CPP, Canada's pension plan, works. Canadians employed across the country pay into the Canada pension plan fund. That fund, a number of decades ago, was made non-political through the establishment of the Canadian Pension Plan Investment Board, the CPPIB. That board is there to ensure something very important, which is that the dollars paid by Canadians into the Canada pension plan are invested independently of the hands of politicians that would try to use those dollars for possibly activist or corrupt causes.

That separation is important to ensure that, ultimately, taxpayers and employees who pay into the CPP with their Canadian dollars can trust this fund. I appreciate that the previous member mentioned that the fund currently stands at a value of approximately $556 billion. That is more than half a trillion dollars, not of the government's money, but of the hard-working women and men from across the country who have contributed to that fund.

Every Canadian expects that government and all its facets, including organizations such as the Canada Pension Plan Investment Board, will conduct itself in an ethical and virtuous way. We hear often today about causes such as ESG, or environmental, social and governance, investing in ESG causes. This is to ensure that dollars are invested in a way that does not negatively impact the environment or people in developing countries, and that it does not benefit corruption. That is a fair discussion to have.

However, the problem with this bill is that it more or less says what we want to accomplish but, and there is a big “but” here, it does not provide a framework to ensure that. Specifically, I have heard often from members of all other political parties in this House about how there are so many significant challenges regarding investments or actions related to the energy industry.

I will unpack that for members here today. There are many that would suggest that a dollar invested into anything related to energy is a dollar too much. The problem with this bill is that it would empower politicians to determine whether investments could be made in something like Canadian energy.

The devastating consequences that would have on our economy cannot be understated. Further, it would have devastating consequences in our world. Canada is a world leader on exactly what I talked about earlier, ESG, environmental, social and governance, causes. Canada is already a world leader on that, and we are always striving to do better as well. This bill would empower a bureaucrat or politician to make a determination as to what should or should not be invested in based on the political whims of a cabinet minister.

I appreciate the fact that the Liberals seem to not be in support of this bill. That is good, because it is troubling when I hear Liberal cabinet ministers talk about our needing to use things like the CPP to build our green future. I can assure members that if the Liberal government had its way, Alberta would be shut down. It is tragic that these activist pursuits are being conflated with the actual good practices that protect something Canadians need to depend on. Empowering activists' ability in regard to investments that are one of the most important and sustainable parts of Canada's social infrastructure would be tragic for the future of Canada. It would basically turn a half-a-trillion-dollar fund into a weapon for activist causes. That simply cannot stand.

My hon. colleague from Carleton dug into some of the impacts that could result from this type of legislation, specifically the broader definition of what is described in this bill as unethical business practices. When the CPPIB was asked about that, it said very clearly that using such a broad definition would mean that it could not invest in some of the top companies in our nation. The consequences of that would be dramatic. I shudder to think about the fact this weaponization of half a trillion dollars, not of government money, not of an activist cause's money, would put at risk the futures of seniors, present and future, who depend on this money. Further, if we look at how some of these causes have been implemented throughout history and the rhetoric that has resulted, it is certainly not in the best interests of Canadians.

The left talks about wanting bigger, more generous social programs, and it is fair to have those debates, especially at a time when Canadians have demanded much from their government, but the Conservatives have been very outspoken on ensuring the efficient and effective delivery of those programs. We could go on at length about our criticisms of how the Liberals have mismanaged much of the spending over the last year or so, but what I find ironic is that the left will talk about these laudable initiatives, which is fair, as few Canadians would disagree with the fact we want ethical investments and to ensure environmental sustainability, but that when it comes down to the very foundation of accomplishing what is being talked about, it would result in instability. That is no more present than the fact that in my home province of Alberta we are a leader in the world when it comes to the environment.

[An hon. member]

Oh, oh!

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, I can hear my friend from the NDP laughing at this. I would remind him that we can actually produce net-zero oil in Alberta. I hope that he will join me in celebrating that incredible technological accomplishment.

The Liberals want bigger, more generous social programs without ensuring a sustainable and secure way to deliver those programs not just today, but also financing them into the future and ensuring that there is sustainability and security going forward. It is a tragic irony to see that this bill fails to address the specifics of what would be a laudable goal, on which it simply fails to deliver.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Madam Speaker, I was caught off guard by my colleague's closing statement to the effect that Alberta is a leader in the world when it comes to the environment, but I will pull myself together and start my speech.

Bill C-231 is a worthwhile bill, and I thank my colleague from Cowichan—Malahat—Langford for introducing it in Parliament.

I think one of the best ways to reduce our greenhouse gas emissions is to stop funding the companies that produce them. This seems logical to me, and I think it goes without saying. Almost everyone believes that the environment is important. The environment is almost as widely loved as apple pie. Everyone loves the environment, except maybe the half of this Parliament and this country who think that funding our own extinction is the best way to support our economy.

The bill we are debating today would, in a small way, address that dogma, which is so unbelievably persistent. Every single day we lose more opportunities to protect the environment. That is why I agree with the principle my colleague has proposed. His bill is creative and, even though it does not directly affect Quebeckers, I recognize that every small step matters.

That said, I am once again disappointed in this government. Instead of taking real action on the environment, it is still thinking small, and when it does act, it acts on structures rather than taking steps that would have a direct impact. While Quebec and most provincial governments are already taking action, successive federal governments have had poor track records, regardless of political stripe.

Let us get back to the topic at hand. Today, we are asking a very relevant question: Should we let the billions of dollars saved by Canadians outside Quebec be spent just anywhere in the name of a completely outdated economic growth model, or should we set limits to ensure the Canada pension plan investment board invests responsibly?

I personally support the latter option. In its most recent recovery plan, my party asked the government to stop investing in fossil fuels, whether it be directly or indirectly, through subsidies or tax benefits. We believe that this money would be better spent on the transition to clean energy, which would pay off handsomely. The bill introduced by the member from Cowichan—Malahat—Langford is consistent with the simple idea I mentioned earlier, which was to stop funding polluters.

However, I am a bit saddened to see that Bill C-231 really has no teeth. Ultimately, if the Liberals vote in favour, it would be one of those small measures they could boast about having brought in. We need to keep in mind that the proposed restrictions on investment decisions would not change much in the Canada pension plan portfolio. In short, the bill would be nothing more than “virtue signalling” to clear the government's conscience. Here are some reasons why.

Let us start with arms companies. It is unlikely that funds from the Canada pension plan's portfolio are currently invested in companies that manufacture weapons or that violate human rights, but let us take a moment to really savour the irony of the fact that Canada sells weapons to Saudi Arabia, only to turn around and congratulate itself on forbidding the CPP investment board to invest in arms companies.

I still agree with the substance of the bill, but when it comes to companies that violate human rights, once again, this all looks good on paper. My colleague must be a fan of dark humour, because we both know perfectly well that this Liberal government could not even be bothered to create an office of the Canadian ombudsperson for responsible enterprise with adequate power to punish offending companies. Worse still, most of the countries where these companies that violate human rights are surreptitiously registered have no legislation governing them. In practice, I do not know who will decide whether the board can invest in a company or not, but the government certainly will not help it figure that out.

Similarly, targeting companies that violate environmental or labour laws means getting involved in a long debate about the facts. Moreover, these companies are allowed to anchor their logistics chains in countries with very sketchy environmental and labour practices. We have only to think of China, with everything going on in Xinjiang with the Uighurs. Other than NGOs, nobody is exposing problematic companies and practices.

That is particularly difficult when it comes to the environment, because there would have to be environmental laws in the first place, as well as reason to believe that those laws have been broken. Unfortunately, the one depends on the other. We would also need whistle-blowers, who, let us be clear, risk their careers and their lives by speaking out.

Nothing in this bill would prevent the Canada Pension Plan Investment Board from investing even more heavily in oil companies, as long as they are not obviously breaking any environmental laws; in mining companies, as long as they are not officially eliminating opponents to their projects; or in arms manufacturers, as long as they are manufacturing the non-lethal parts of tanks. We therefore have no way of resolving the real problem.

I would like to add that I am surprised that the bill contains no mention of companies based in whole or in part in tax havens. If we are going to virtue-signal, we might as well have included that too.

If I were unkind, I could say that the bill is extremely idealistic because the problem is much too big to be solved within the scope of one section of an act. However, I am kind. Although this is a small step, it is a step in the right direction. Enshrining the concept of sustainable, responsible investment in federal legislation is objectively a good thing, and it is better than nothing.

However, let us keep in mind what this government is doing right now. The government says that Canada is not selling weapons to Saudi Arabia, only Jeeps. The Prime Minister clearly said it during the 2015 election campaign.

I would call a Jeep with a machine gun in the back seat a weapon. If I were to drive around Lac-Saint-Jean in a Jeep like the ones currently being sold to Saudi Arabia, there is a good chance that I would quickly be arrested, and rightly so.

From 2017 to 2020 alone, this government subsidized the oil and gas industry to the tune of almost $24 billion. During that same period, the government provided just $971 million to the forestry industry, even though this industry can play a role in the energy transition because it combats greenhouse gases and because many oil-based products can be replaced with wood byproducts. I want to point out that 75% of that money is in the form of loans, so the government will get its money back.

If we trust the government's figures, the bill seems good. The bill needs some teeth, though, and we know that this government cannot be trusted when it comes to investments in the oil and gas industry, the environment, human rights or arms.

In summary, I agree with the principle of Bill C-231 because, although it is just a small step, it is at least a step in the right direction.

[Matthew Green, NDP, Hamilton Centre, ON]

Madam Speaker, I would like to begin by just acknowledging the arguments put forward by my friend from the Bloc Québécois, who suggested that because he is a nice person, he would not want to suggest that this bill is somehow engaged in what he called “virtue signalling.” He raised some points around virtue signalling, and said that because he was nice, he would not say that.

In response, because I am also nice, I would suggest that he is actually not being naive about what is before us here today.

I am proud to rise on Bill C-231, an act to amend the Canada Pension Plan Investment Board Act in relation to investments, which has been put forward by the very learned MP from Cowichan—Malahat—Langford, who is bringing to us today a very serious response to all of the rhetoric we hear in this House about an international rules-based order.

The CPP is one of the largest pension funds in the world. As we have heard in the debate today, it totals almost half a trillion dollars. Bill C-231 seeks to amend the investment policies, standards and procedures of the Canada Pension Plan Investment Board, which manages the funds not needed to pay current beneficiaries. The amendments will require a proactive approach to due diligence with consideration towards ethical business practices in environment, labour and human rights.

As New Democrats, we understand that Canadians expect the investments of the CPP fund to be carried out with certain principles in mind. Despite its adherence to policy on responsible investing, this investment board has billions of dollars of our pension funds tied up in the oil and gas sector, weapons manufacturing, and other companies that do not always operate within ethical business practices. These include corporations that have been highlighted by the Public Eye Awards, which focus a spotlight on companies that have some of the very worst human rights and environmental records, and mining companies that have received single-digit scores on the Responsible Mining Index.

The Liberal Party talked about the lack of specificity. We heard that, in fact, from our friends in the Bloc. Let us be clear about specificity. I am going to take my time to drill down into what some of these examples might look like.

I will begin by saying that I think my Conservative friends missed their opportunity in this debate, which was to point out the cognitive dissonance of the Liberal government in having before us gun restriction laws on assault rifles and assault weapons while simultaneously, under our current laws, allowing the CPP to invest in these very weapons.

According to a CBC article in 2019, “Canadians who want to steer clear of investing in gun companies are out of luck if they pay into the Canada Pension Plan.

“CPP owns shares in American firearm manufacturers, including the parent company of handgun manufacturer Smith & Wesson, assault rifle maker Ruger, and Olin Corp., which produces ammunition for the AR-15, the weapon of choice for many perpetrators of mass shootings.”

The Alberta pension fund does not even own these shares anymore. The B.C. pension fund and Quebec do not own any.

It appears, then, that there is a bit of a consensus among provinces. We heard the Conservatives suggesting that we would have to get consensus on this stuff. It appears that the consensus is already there, because even those provincial pension funds think that these companies are too hot to handle. The CPP owns more of gun companies than BlackRock Asset Management Canada Limited.

As Canadians who pay into the fund, we are by extension the shareholders in the companies that benefit from the fund's investments. There is a lot of influence that could be had by divesting from companies that conduct themselves unethically or violate human rights or labour or environmental laws.

I have heard the Conservatives talking all week about virtue signalling. That is a very problematic term, and yet here they are, talking about Magnitsky sanctions against state operators who are involved in these human rights abuses. The hypocrisy is that the Conservative caucus fails to hold to account private corporations around the world that are involved in these types of atrocities and human rights abuses. They want to have a free market for international crime when it comes to profit, but when it comes to state actors, they want to pretend they are on the side of international human rights. We know this. We have heard it this week.

Divestment would be an opportunity available to us through amending section 35 of the CPPIB Act, which is what this legislation seeks to achieve by requiring the board of directors to take a proactive approach in ethical investments.

Let us look at a few of the examples of the types of impacts being experienced around the world.

Last week, the Peruvian organization, Derechos Humanos Sin Frontera/Human Rights Without Borders, wrote an open letter to the Peruvian delegation at the Prospectors & Developers Association's convention in Toronto and a more detailed letter to the Canadian mining company Hudbay. The letters denounced police repression against locals peacefully protesting stalled negotiations between Hudbay and the province on a framework agreement for the company's mine in Peru. At least 17 protesters were injured.

This speaks to a story we hear in Canada. We know that in the global south many of these people in these places like Peru are indigenous people. These are violations of the UN Declaration for the Rights of Indigenous Peoples. In the same way the Liberal government would violate indigenous rights in this country on behalf of oil and gas by refusing to provide free, prior and informed consent, it is more than willing in the CPP to take its investments abroad and do the same.

MiningWatch Canada in its mandate letter talks about creating better control for corporations. It states that Canadian mining companies operate around the world and dominate in the amount of capital raised in exploration. Bay Street funds the mining sector globally. However, there are no regulations in its activities to prevent it from profiting from weak protections for the environment, workers, indigenous peoples and human rights in the host countries.

In April 2019, the Liberal Minister of International Trade commissioned an external legal review to advise him on how to best equip the Canadian ombudsman for responsible enterprise with sufficient tools to engage in credible and effective investigation of alleged human rights abuses and to ensure that he had the powers to compel witnesses and documents. True to form, the performative Liberal government would like to speak the language of justice and human rights, but when it comes down to actually putting teeth in legislation to hold big businesses and corporations accountable, the Liberals do the sleight of hand. They say one thing to the public and they do something else when it comes to creating systems that will hold these people accountable.

For a year and a half, the government buried the results of the timed-bound external legal review and failed to give CORE the powers that were promised and the reviews that were confirmed as needed.

Last February, the Canadian Network on Corporate Accountability, which works tirelessly to ensure that Canadian mining, oil and gas companies respect human rights and the environment, when working abroad, stated, “The Government of Canada has caved to industry demands and is ignoring and concealing expert legal advice it commissioned on how to give the Canadian Ombudsperson for Responsible Enterprise (CORE) the powers it needs to do its job.”

The government has legal advice. When it talks about us not having specificity, we have these frameworks in place. The government just fails and refuses to act on them. The Liberals have the legal advice by the McIsaac report and for over a year and a half, they have failed to act on the report's findings and make that report public. The report had to be leaked by civil society just to see the light of day.

“By ignoring and hiding its own expert advice, the federal government is showing it is more interested in appeasing the demands of the mining industry than upholding its human rights obligations or making good on its promises.” That was a quote from Emily Dwyer, the coordinator for the Canadian Network on Corporate Accountability. She states, “The Government of Canada has turned its back on the communities and workers harmed by Canadian companies overseas.”

The element of the bill seeks to ensure labour rights are respected. This would have a positive impact by leveraging the CPP, which has funding purchasing power and the ability to punish corporations, through our divestment, with poor human rights track records, where labour practices are discriminatory against women. The government is a self-proclaimed feminist government. The Liberals have the ability to provide these GBA+ analysis that they talk about abroad, yet they refuse to act.

As New Democrats, we want a Pension Plan Board to take a proactive approach and due diligence in its investment policies. We want to leverage the half a billion dollars of investment and we want to ensure that all the companies have ethical business—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

The hon. member for West Vancouver—Sunshine Coast—Sea to Sky Country.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Madam Speaker, it is a great pleasure to join the debate today on the private member's bill of my hon. colleague from Cowichan—Malahat—Langford. It raises some important questions on the role of the Canada pension plan.

I believe that the vast majority of Canadians do not want their money invested in companies that do business in a way that is abhorrent to Canadian values. Increasingly, Canadians, especially younger Canadians, are insisting that their entire portfolio be invested in companies that have robust environmental, social and governance standards. Some studies have shown that over 75% of those born after 1965 see it as increasingly important to consider ESG standards when investing and that responsible investing is the way of the future. Members can firmly count me as one of those people.

Canadian banks are starting to take note, but they too have a long way to go to meet this growing demand. Definitions of responsible investing by the big five banks still allow them to invest in areas that may run afoul of the topics that Bill C-231 brings forth.

Portfolios should not only put their money in companies with strong ESG standards because there is a growing demand from consumers. We know that companies with strong ESG standards tend to vastly outperform the market, and evidence demonstrates that a better ESG score translates to about 10% lower costs of capital. The reasons for this are obvious. These companies have cost efficiencies from use of inputs and other resources, better regulatory relationships and investment optimization, and less overall risk when robust ESG and anti-corruption compliance measures are in place.

As the world swiftly transforms to a lower-carbon and net-zero future, companies that currently actively manage their emissions can assure their investors that they will be prepared for regulatory risks down the road. In this regard, Mark Carney, the former governor of the Bank of Canada, former governor of the Bank of England and current UN special envoy on climate action and finance, said, “...those who invest in [achieving net zero]...and who are part of the solution will be rewarded. Those who are...still part of the problem will be punished.”

Just as Canadians want their private money invested in companies that are not complicit in human labour or environmental crimes, they also expect that public money, especially their pensions, will follow similar guidelines. That brings us to the matter at hand today.

The Canada pension plan has steadily grown over time, and its returns have vastly outperformed the market average. The CPP Investment Board was created as an organization independent of the government in 1997 to monitor and invest funds held by the CPP. The board reports quarterly on its performance and annually to Parliament through our Minister of Finance, and board members are appointed by the Minister of Finance in consultation with the provinces and a nominating committee. Its model is recognized internationally for sound management and governance, and its independence is highlighted as one of the reasons for this. As of the end of last year, the assets under management of the CPP exceeded $475 billion.

While the CPP has provided strong growth of pensions over time, the changing nature of investor preference is not isolated to private banks. Canadians are also expecting that their investments are not unduly put at risk through exposure to companies that are not prepared for the energy transformations that are currently under way, or that could be debarred or otherwise ostracized for committing acts of bribery or human rights abuses.

In terms of monitoring investments, the CPPIB currently asks that companies report material ESG risks and opportunities relevant to their industry and business models. It has also indicated a preference for companies to align their reporting with the standards of the Sustainability Accounting Standards Board, or SASB, and the Financial Stability Board's Task Force on Climate-related Financial Disclosures, or TCFD.

Both SASB and TCFD have created standards for businesses to identify, manage and communicate financially material sustainability information to their investors. Generally, they divide climate risks into two major categories: risks related to the transition to a lower-carbon economy and risks related to the physical impacts of climate change. Where companies in its portfolio do not follow such a standard, the CPP has the ability to utilize its proxy voting rights to push for disclosure along these lines and to improve ESG performance more widely. While completely divesting a company holds appeal to many, oftentimes much more can be accomplished from driving change in practice and reporting as a shareholder, as unpopular as that can sometimes be.

The approach that CPP takes on climate involves bottom-up assessments for new investments from the perspective of climate change and a top-down approach to measure its entire portfolio risk over time. This is smart from both an environmental and economic perspective, and it has informed a couple of notable shifts.

The first is a steady departure from fossil fuel investments. Last May, former CEO Mark Machin noted that fossil fuel producers and services made up only 2.8% of the board's investments as of March 31, 2020. That is a reduction of 4.6% from two years earlier.

The second, as showcased in the CPP's latest report on sustainable investing, is that investments in global renewable energy companies more than doubled to $6.6 billion in the year to June 30, 2020. These are important changes because the numbers show that renewable energy investments are greatly outperforming those in the fossil fuel sector. Reports have shown that over the last five years, investments in fossil fuels have yielded an average of a 7.2% loss, while renewable energy investments have grown by 73%.

Of investments in the last year, the top 30 global clean energy companies have grown between three and four times in size. I know this very well because I have some of these leading clean-tech companies, Carbon Engineering for example, in my riding.

We need transparency in markets so investors can adequately assess risk of carbon exposure. The driving force behind the creation of Canada's expert panel on sustainable finance in 2018 was for it to make recommendations that could scale and align finance in Canada with our country's climate and economic goals.

Among the 15 recommendations outlined to attain our goals, the panel recommended we embed climate-related risk into the monitoring, regulation and supervision of Canada's financials systems. It further recommended that we promote sustainable investment as business as usual within Canada's asset management community.

This is also one of the reasons to support Bill C-12, Canadian Net-Zero Emissions Accountability Act, which, among other things, would require the minister of finance to report annually on how it is managing its financial risks and opportunities related to climate change. This obligation would require the government to report on all of its operations, including crown corporations such as Export Development Canada and the Business Development Bank of Canada.

I believe that this disclosure should extend to CPP. Canadians should have a full picture of the climate-related risks associated with their investments, both those made in Canada and those made internationally, as well as the areas where we can profit. CPP officials have been leading calls for such disclosure within that portfolio. The same can be said for ensuring that CPP does not support companies that are committing human rights abuses and risk undermining our proud commitment to upholding human rights in the world.

The current government has already introduced numerous policies and mechanisms to make sure that Canadian companies are not complicit in human rights abuses in Canada and abroad. Notably, to further strengthen Canada's commitment to responsible business conduct, we appointed a Canadian ombudsman of responsible enterprise in April 2019, whose duty it is to review claims of alleged human rights abuses rising from the operations of Canadian companies abroad in the mining, oil and gas, and garment sectors. Following credible reports of human rights violations affecting Uighurs and other ethnic minorities in Xinxiang, China, Canada adopted several measures to address the risk of goods produced by forced labour from any country from entering Canada and to protect Canadian businesses from becoming annoyingly complicit in the abuse.

A further step I would like to see this Parliament take is to adopt Bill S-216, an act to enact the modern slavery act and to amend the Customs Tariff, which would impose an obligation on entities to report on the measures being taken to prevent and reduce the risk of forced labour or child labour being used at any step in the production of goods in Canada or those imported into Canada. Like Bill C-12, the standards contained in the proposed modern slavery act should apply to the CPP. These disclosures are not just about the moral imperative. Any smart investor seeks to understand the level of risk in its investments, and the CPP is no exception.

To the bill itself, I very much agree with its intents and purposes. Few Canadians would believe we should support businesses running afoul of the human labour or environmental abuses it mentions. I do, however, have serious concerns about the way it has been drafted. The language of this bill is dangerously vague and overly broad in stating that:

...no investment may be made or held in an entity if there are reasons to believe that the entity has performed acts or carried out work contrary to ethical business practices....

This could include just about any unsubstantiated report rather than actual, factual occurrences. To ascertain when there may be a reason to believe something had occurred could result in absolute paralysis of the CPP. As well, companies would be considered guilty until proven innocent.

It also does not define what would constitute a human labour or environmental rights violation that would bar investment. For example, I think we can all agree that we do not want to invest in—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

The hon. member for St. John's East.

[Jack Harris, NDP, St. John's East, NL]

Madam Speaker, I am pleased to have an opportunity to speak on this bill introduced by my colleague, the hon. member for Cowichan—Malahat—Langford. Bill C-231, An Act to amend the Canada Pension Plan Investment Board Act (investments), introduces an obligation on behalf of the Canada Pension Plan Investment Board to take into account matters they say they take into account on environmental, social and governance issues; however, they are not required to take these into account, because they are governed by rules that tell them what their mandate is and what principles they have to use with respect to investments.

It has been suggested by other members, particularly from the Liberal government side, that having controls on investments would not interfere with the Canada Pension Plan Investment Board's investments being done in accordance with financial principles. The only rule that is passed in the mandate of the Canada Pension Plan Investment Board is very important for us to understand. It says this mandate is:

...to invest the assets of the CPP Fund with a view to achieving a maximum rate of return without undue risk of loss.

It has regard to:

...the factors that may affect the funding of the Canada Pension Plan and its ability to meet its financial obligations [on any given business day].

As we know, it has been a very successful investment board. It has made good returns on behalf of the Canadians who rely on the Canada Pension Plan for their pension, and is sustainable, according to a recent audit, for the next 75 years, at the existing rate of contributions. That is a very positive thing, but there is no obligation.

We just heard the member for West Vancouver—Sunshine Coast—Sea to Sky Country say that using ethical, environmental, social and governance issues as litmus tests for investments actually helps. That is a good thing. That is good to know, so people should take comfort in knowing that if obligations are imposed on the Canada Pension Plan Investment Board to follow these guidelines, it will not result in a loss of income or a loss of benefits to the beneficiaries of this fund: the people of Canada to whom this is important.

We have a situation today, in Canada and around the world, with huge investment funds such as the Canada Pension Plan Investment Board, nearly worth more than half a trillion dollars, the Caisse de dépôt et placement du Québec, the Alberta pension investment fund, which has been spoken of, and the B.C. pension plan. These are huge pension funds that can influence what happens in the investment world, not only in Canada, because their investments are not restricted to Canada or Canadian corporations. They are worldwide. Diversity in investments is always recommended to individual investors as being a good thing. Other countries are doing the same thing and investing around the world.

The fact is that there needs to be some control on this to ensure, first of all, that the Canada Pension Plan Investment Board has the power to make choices based on matters involving ethical, environmental, social and governance issues, as well as human rights issues. It needs to have that power because, under its mandate, in some cases it could be required to invest in a company that was violating human rights but was providing a bigger rate of return than a company that was not. We see that possibility throughout all kinds of industries, whether weapons industries or others that support the military.

I wanted to use my time to talk about one particular human rights situation that is very relevant to this bill: the situation in Myanmar, where significant human rights violations are going on. We have a genocide before the International Criminal Court, which Canada supports, and a military that has significant investments that return money to it and allow it to conduct its genocide and take over the country and not rely on public funds. It has significant investments, some of which are held by the Canada Pension Plan Investment Board.

When asked about the problem with that, the response from the spokesperson of the board was that many of these companies are reputable. Among the Myanmar military-related stocks owned by CPPIB, there are, according to CPPIB's global head of public affairs and communications, “highly-reputable multinational companies providing their clients with exceptional products and services”. The profits of those companies, which are directly owned by the military of Myanmar, go back to the Myanmar military for its operations in supporting its activities, which is something the Canada Pension Plan Investment Board should not be investing in. Canadians would not want their pension security to be reliant on this. It is a good reason why the bill needs to be passed, and there are many more.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I first want to thank and recognize my NDP colleagues, the members for Hamilton Mountain, Hamilton Centre and St. John's East, for their contributions to the debate on this bill and for their support.

With great financial power comes great responsibility. The Canada pension plan fund, valued at half a trillion dollars, has the kind of financial firepower that can literally move markets with its investments. Where and how this money is invested can have great consequences around the world and here at home. We live in an increasingly globalized world where multinational corporations valued at billions of dollars have an incredible amount of power at their disposal.

Many of these corporations have extracted obscene amounts of wealth from countries with corrupt or despotic governments that do not have the same labour or human rights protections we take for granted here in Canada. The working class in those countries is exploited for low wages and often suffer from poor working conditions. Their populations do not enjoy the protection of the law and are often victims of state security forces. When it comes to fighting for their environmental rights, the right to live in a safe, clean and healthy environment, they are often brutally shoved aside so as not to interrupt profit.

The corporations that continue to exploit these inequalities and degrade and pollute our world in the name of profit must be held to account. Corporate social responsibility must be enforced by law and through the ethical investment of our pension funds.

In my introductory speech on this bill, I laid out clear examples of how our CPP funds have been invested in companies with problematic track records. This included references to the MiningWatch index, the Food and Beverage Benchmark Findings Report, the Public Eye awards of shame and research from the magazine Corporate Knights. The information was cross-referenced by the Library of Parliament and verified.

There have been numerous reports in newspapers detailing the problematic investments made by the Canada Pension Plan Investment Board. The fact of the matter is that despite the board's policy on responsible investing, our Canada pension plan funds have been exposed to companies that block climate policy and climate resolutions, cause severe environmental damage, and use forced or child labour with severe human rights violations as a result.

There are clear examples around the world where countries are legislating corporate social responsibility. Germany has taken a step toward forcing companies to take responsibility for any labour or environmental abuses in their supply global chains. A new law allows for hefty fines if those companies' contractors abroad are found to breach human rights or environmental rules.

Sweden's national pension funds must include environmental and ethical standards in its investment policies and report annually to the government on how it would adhere to those practices. Moreover, Norway's pension plan is governed by regulations that provide a legal framework emphasizing international human rights and environmental standards.

Canada's current lack of ambition in legislating in this area is truly shameful. Since I introduced this bill, wild and untrue allegations have been made by some of our media and Conservatives, so let me be very clear about two things. Nothing in my bill would allow any political interference or direction of the investment decisions of the CPPIB, and nothing in this bill would change that board's mandate, which is to maximize investment returns without undue risk of loss.

When it comes to debate on this bill, the Conservatives have made it very clear in their speeches that despite clear evidence of problematic investments that could violate human labour or environmental rights, they are fine with profit over people. This, unfortunately, is not surprising for a party that too often remains wilfully blind to bad corporate behaviour.

The Liberals, it seems, while bringing their customary platitudes about noble intentions, will also vote against the bill. I remain hopeful that some of them will see the light and vote with the NDP to send this bill to committee for further study.

Allow me to conclude by saying that even if this bill does not pass, this issue is not going away. There will be increased scrutiny of our investments going forward. I again urge my colleagues to support Bill C-231 so that our pension investments will not contribute to human misery around the world.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

It being 2:30 p.m., the time provided for debate has expired. If a member of a recognized party present in the House wishes to request a recorded division or that the motion be adopted on division, I would invite them to rise and indicate it to the Chair.

[Matthew Green, NDP, Hamilton Centre, ON]

Madam Speaker, I respectfully request a recorded division on Bill C-231, an act to amend the Canada Pension Plan Investment Board Act (investments).

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

Pursuant to order made on Monday, January 25, the recorded division stands deferred until Wednesday, March 24, at the expiry of the time provided for Oral Questions.

It being 2:30 p.m., the House stands adjourned until Monday, March 22, at 11 a.m., pursuant to Standing Orders 28(2) and 24(1).

(The House adjourned at 2:30 p.m.)