Bill C-2 (39th Parliament, 1st Session) Committee on May 31st, 2006

[The Chair, Conservative, David Tilson]

The committee has your paper, and may have questions.

Mr. Fyfe, do you have some very brief comments?

[Gordon Fyfe, President and Chief Executive Officer, Public Sector Pension Investment Board]

That's fine. I think they will come out in questions from the floor.

[The Chair, Conservative, David Tilson]

Great.

Mr. Owen.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Thank you.

I'd like to thank you all for being here and for the work you do on our behalf.

Perhaps I'll jump in on the access to information issue, Mr. Fyfe. On the exemptions provided in the act for the pension fund specifically, could you explain why those go beyond the commercially confidential information exemptions in the Access to Information Act? And what is special about your particular organization that makes this extra certainty or underlining necessary?

[Gordon Fyfe]

There are two exemptions. The first is proposed section 18.1, which protects PSP's own commercial or investment information. The second exemption is proposed section 20.2, which provides protection for third party information.

Let me deal first with proposed section 18.1, on our own commercial investment information. PSP was created by Parliament to make money. The intention was to make money for our three pension plans. The more money PSP is able to make, then the less everyone is going to need to contribute to these plans in the future. That's all three plans plus the government, because they are also a contributor.

So the more money we make, the less contributions are required. The inverse is also true, that the less money we make, the more contributions may be required in the future for a given level of benefits.

The way we make this money is in the financial and capital markets of the world. The amount of money to be made in these markets is finite. If we're making money, somebody else is not making that money. If we're not making it, it goes to someone else--

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Excuse me, Mr. Fyfe, but perhaps I misstated my question. I don't want to have you spending time on things I wasn't quite interested in.

I understand perfectly, and your paper makes very clear, the importance--the vital, fundamental importance, in fact--of keeping this material confidential. I am just wondering why the exemption provisions in the existing Access to Information Act are not sufficient to provide that protection.

[Gordon Fyfe]

Okay. I'll ask Assunta, our general counsel, to answer specifically on the legal aspects of that.

[Assunta Di Lorenzo, First Vice-President, General Counsel and Corporate Secretary, Public Sector Pension Investment Board]

Mr. Chairman, we believe that the current exemption provided in the Access to Information Act contains subjective qualifications that are subject to interpretation; therefore, it would lead to numerous complaints being presented to the Information Commissioner.

Third-party information protection is based on a proof that the third party has consistently kept the information confidential. We need private investments with general partners who do not wish to partner with organizations where there's a risk of their information being disclosed.

We believe the current exemptions that are proposed in Bill C-2 are clearer and more unequivocal. When we go to various parts of the world and try to do business with partners, we could tell them this is a specific protection given to PSPIB, this is what it means, and it's in plain English. They'll understand and they will not object to doing business with us.

Mr. Fyfe could perhaps describe the detriment that we would have in terms of monetary value if we're not able to access those partners.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

That's very helpful.

It's been presented to us by another witness that with the similar exemption in the act with respect to investigative information coming out of a lawful investigation, for example, by CSIS or the RCMP, there may be an analogy between the ultimate and absolute importance of keeping that information confidential.

Perhaps the analogy could be further pushed to sharing information with other law enforcement agencies either here or abroad that might otherwise, as with your investment partners, not feel comfortable sharing with you without that exemption. Is there something of a higher order of importance or a more fundamental nature of confidentiality beyond law enforcement agencies perhaps working internationally?

[Assunta Di Lorenzo]

Well, I believe that in trying to comply with this legislation we also have to try to fulfill our legislative mandate, which is to provide the necessary return without undue risk. I believe the proposed exemptions do not take anything away; you're not gaining anything more by giving us the proposed exemptions. The exemptions will only help us to tell those partners that we will not disclose the information.

At the end of the day, if we have to make those returns, we need to have access to those first quartile partners. Therefore, if that's our legislated mandate, I would feel it's different from the example that you gave.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Thank you.

[Paul Cantor]

Mr. Owen, if I might, I wouldn't want to leave the committee with the view that we're seeking to establish a parallelism with agencies such as CSIS that are concerned with the security of our nation.

As Mr. Fyfe says, we're in the business of making money. We seek this confidentiality in order to get the best partners in the world, and they will only deal with us if we can guarantee them confidentiality of their information. It's not the same as the secrets of state, but it is important in terms of providing a reduction to the risk that employees and employers will have to pay more in the long run for their pensions.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Thank you. That deals very well with my question.

[The Chair, Conservative, David Tilson]

We're going to have to move on.

Madam Guay.

[Monique Guay, Bloc, Rivière-du-Nord, QC]

I will be brief because time is running out. You really do need that confidentiality because the bill does not protect you. You require an exemption—is that what you're saying?

[Assunta Di Lorenzo]

We need Bill C-2's exemption because it is clearer than the one contained in the current legislation, as it does not contain words that could be subject to interpretation. For example, current wording includes important values that could harm competitiveness. That's subjective. Therefore, an organization could refuse to disclose information, which could then lead to a complaint to the commissioner, which could then lead to the Federal Court.

Even if we manage to prevent the disclosure of information, the partners we want to do business with won't be willing to run the risk of having to disclose their financial statements, which constitute confidential information. Take, for example, the private equity market, where money is loaned to people to invest. We want to be able to reassure them that although we are subject to legislation, we are not obliged to disclose their investments. We need much clearer exemptions than those contained in current legislation.

[Monique Guay, Bloc, Rivière-du-Nord, QC]

Could you give us a written recommendation on that point? Could you send us a document? You have until midday on Friday to send us amendments to the bill because we will be soon moving on to clause-by-clause consideration. We're moving quickly because the government wants quick passage of the bill.

[Assunta Di Lorenzo]

I believe our position is that this bill is fine as drafted. Sections 18.1 and 20.2 are satisfactory.

[Monique Guay, Bloc, Rivière-du-Nord, QC]

You don't want any changes.

Then make that your recommendation. If someone were to propose changes to those points, we would then have your recommendation in hand to the effect that they should not be amended.

[The Chair, Conservative, David Tilson]

Vous avez fini?

Okay, we'll move on to Mr. Martin.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Mr. Chair, and thank you, witnesses.

The Department of Finance and the Bank of Canada deal with sensitive information all the time, too, and they operate currently under the discretionary exemptions as regulated by the Information Commissioner. Is that correct...the Department of Finance, certainly?

There are exemptions in the existing Access to Information Act for commercially sensitive information, and so on, so that people can have access to information, to those sensitive agencies, and it's left up to the information commissioner whether or not that information should be released in cases like that, where commercially sensitive information is not released.

Why, then, should you get not just an exemption, but an automatic exclusion forever, permanently? That's what's in Bill C-2. You would get an exclusion forever, automatically, without anybody saying yes or no as to whether the public has a right to this information. I don't get that.

[Paul Cantor]

The Department of Finance, of course being a department of government, would be subject to the Access to Information Act, as you describe. They are not in the business of doing business, and, on that basis, don't need to deal with partners on the same basis as do we.

[Pat Martin, NDP, Winnipeg Centre, MB]

That would turn the financial market on its head if it's leaked out, if it's sensitive information.

[Paul Cantor]

Indeed.

I think we should make clear.... If I can put this in terms of what we did when I was the president of National Trust and we were trying to deal with the issue of confidentiality there, we ended up with the conclusion, because we were a publicly traded company, that nothing we did needed to be confidential except the information that related to our customers, the information that related to our employees as individuals, our financial statements before they were published, and our marketing plans.

So in your comparison to the Department of Finance, and in respect of all the activities of PSPIB that do not relate to our dealings with particular clients or customers, we strongly endorse the accountability act as it stands, with no exceptions or exclusions in respect of the information that relates to us. So the kind of information you would get from the Department of Finance we are ready and willing to provide in response to requests for information.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you. I understand. I've been a trustee on employee benefit plans in the past and I understand a bit about it.

What sort of actuarial surplus do you...? Just to be more specific, is this $3.5 billion per year the total contributions, or is it the amount after liabilities?