Finance Committee on May 17th, 2006

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

There are 1,200 federally regulated private pension plans.

[Nicholas Le Pan]

Right.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

There are umpteen thousands of other plans that are not regulated at all?

[Nicholas Le Pan]

No. OSFI administers the Pension Benefits Standards Act, the PBSA, which applies to federal employers. So that's certain groups in certain sectors, interprovincial transport, virtually all the employers in the territories, that sort of thing. We have about 10% of the action nationally, so the other 90% of private pension plans would be regulated by the provinces, the biggest provinces being Quebec, Ontario, Alberta, and B.C.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Do you work in concert with them, passing advice back and forth on certain issues?

[Nicholas Le Pan]

Yes. There are a variety of mechanisms. There are some employers that have multiple plans, where one of the plans is a provincial plan and one of the plans is regulated federally, because the employer is in different businesses. Then there's more cooperation in those kinds of cases if there are problems. But, yes, there are different arrangements.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

If you determine there is a problem with a federally regulated pension plan, how do you go about getting involved in that? Who becomes aware of that? When does it become a more public issue so that people are protected and know that there's an issue with their pension plan?

[Nicholas Le Pan]

The legislation's regulations require regular disclosure to members in their annual disclosure statements about the solvency position of plans.

We would become involved and aware through several possible channels. We do our own estimates of what we think the solvency of plans is based on the information provided previously to us. We update that. Occasionally we will then say, oh, we think this plan is slipping into problems, and we'll go back and verify before we reach a conclusion.

In some cases, the information will come to us from the plan, from its regular filings. In some cases, the information will come to us separately. Then our involvement depends on the case. For example, if it was contribution holidays, where plans have slipped into deficit but they're still taking contribution holidays, that's permitted by the rules, but sometimes we don't think that's safe and sound. If we estimated the plan had shifted into deficit and was still taking contribution holidays, we went back to the plan and said, look, either you stop, or, if you don't stop, you have to inform all the members and there has to be a formal board resolution. Many of them stop. It depends on the case.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Mr. Chairman.

[The Chair, Conservative, Brian Pallister]

Mr. Harvey, you have five minutes.

[Luc Harvey, Conservative, Louis-Hébert, QC]

Your core business is the regulation and supervision of financial institutions. Do you have the same jurisdiction over aboriginal territories?

[Nicholas Le Pan]

We regulate and supervise institutions that are set up under the Bank Act, the Insurance Companies Act.

If an aboriginal financial institution were set up under the Bank Act, it could come under our jurisdiction. It is not a question of territory, but rather of institutions, under aboriginal authority or—

[Luc Harvey, Conservative, Louis-Hébert, QC]

That was not my question.

If one were to open a credit union on an Indian reserve, in terms of transactions, would you—

[Nicholas Le Pan]

Federal legislation governs banks, life insurance companies, etc. Caisses populaires and credit unions, etc., are governed by the provinces.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

You deal with all of the institutions having a federal charter.

[Nicholas Le Pan]

Yes, all institutions chartered by the federal government, that is to say banks, insurance companies, etc.

[Luc Harvey, Conservative, Louis-Hébert, QC]

Therefore, you have nothing to do with credit unions.

[Nicholas Le Pan]

Precisely. We deal with anything involving the solvency of federally chartered institutions.

[Luc Harvey, Conservative, Louis-Hébert, QC]

Nor do you supervise foreign exchange offices that are not connected to anything.

[Nicholas Le Pan]

Exactly.

[Luc Harvey, Conservative, Louis-Hébert, QC]

Could it be in your interest to oversee them?

[Nicholas Le Pan]

I respect my mandate and I want to do a good job in that respect.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

And you are doing a good job.

[Nicholas Le Pan]

I know. And I have no desire to increase my powers here and there. I am not an empire builder. If the government needs us to increase...

[Luc Harvey, Conservative, Louis-Hébert, QC]

That was not my question.

Do you believe it would be justified for you to be called upon to intervene in these areas, given that we are after all discussing banking services, as Ms. Wasylycia-Leis was saying when she talked about businesses that cash cheques at very high interest rates?