Finance Committee on March 6th, 2012

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Clause 30 makes the employer not liable. We just adopted a provision where the employer and the administrator can exchange certain favours. Should a contributor feel hard done by and want to sue, the contributor must generally prove three things: that there was fault, that there was damage, and that there is a causal link between the two. But now you are adding the obligation to request that the corporate veil be lifted. Isn't that a bit excessive? There is already protection under the customary provisions of civil law, but you are requiring contributors who feel they have been wronged, robbed, to ask that the corporate veil be lifted under clause 30.

[Leah Anderson]

The purpose of this amendment is.... Just by way of background, in the initial defined benefit or defined contribution context, it's the employer who is the sponsor of these plans. In the PRPP context, we're taking that responsibility away from the employer and putting it on the administrator. This is a key element in terms of what we hope to find is the attractiveness of these plans for employers: that they have a lot less liability and have less administrative cost to deliver them. That is our expectation: that these will be attractive to small businesses.

Without such a provision, making them responsible for the acts of the administrator—things such as investment returns, their fiduciary obligation about how they invest their funds—would create a real risk that employers.... It's not actually their role and responsibility to provide those services, yet they would ultimately be responsible.

This is a bit of a safe harbour for them, in terms of those responsibilities that are directly for the administrator. There are many responsibilities on the employer, as enumerated in this act, which still stand, such as the one we were explaining earlier vis-à-vis inducement. So this is not a blanket exemption from any responsibility; they have clear responsibilities, which are elaborated.

[The Chair, Conservative, James Rajotte]

I have Mr. Jean on this point.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I don't need to speak, if Mr. Giguère has been convinced by that.

[The Chair, Conservative, James Rajotte]

Are you satisfied with that answer?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

No, but I will vote against it.

[The Chair, Conservative, James Rajotte]

Mr. Jean, would you like to speak to this?

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

It only makes sense. No employers would allow their employees to sign up to the contract, if this weren't included, because it excludes civil liability in relation to things that are not any doings by them. If the employers are not responsible for deciding where to administer the funds or where to invest them, they need to be exempted from any liability respecting those matters, because they would be lumped together in a lawsuit.

If, for instance, 10,000 employees wanted to sue the administrator of the fund, they would be part of that lawsuit, if they're not excluded. Why should they be part of a lawsuit in relation to decisions they had nothing to do with? They're just there as part and parcel to help facilitate the employee and the administrator of the fund.

[The Chair, Conservative, James Rajotte]

Mr. Giguère, you have the floor.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

My dear colleague, basically your point of view is acceptable insofar as previously you recognized that, first, the employer exclusively decided on the administrator and that, second, that employer could receive inducements from an administrator without it necessarily being to the advantage of the contributors. So, with respect to those two points, these contributors find themselves facing fault: there would be fault on the employer's part for choosing a bad administrator. The contributors would have lost their money. There would be causality, which must be proven legally. A judge will not accept a fishing expedition, that an employer is being sued just because you want to. There has to be an element of proof.

In this case, we're saying that, even if these three things are established, these people are going to come up against a clause that exonerates liability. That's what I have a problem with.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

That wouldn't include criminal liability. The Criminal Code would still stand and any charges that would follow from it. It would only make sense. Nobody would do it otherwise.

[The Chair, Conservative, James Rajotte]

We'll leave that as an ongoing discussion, perhaps.

We have had a request for a recorded vote on clause 30.

(Clause 30 agreed to: yeas 7; nays 4)

(Clauses 31 to 33 inclusive agreed to on division)

We come to clause 34.

I'll just remind members that my ruling on amendment NDP-1, that the concept is beyond the scope of the bill and therefore was inadmissible, applies to amendment NDP-4 as well.

(Clauses 34 and 35 agreed to on division)

(On clause 36—Revocation of registration)

We will go to clause 36, and we have amendment NDP-5, which is on page 7 of our amendments document.

Monsieur Giguère, I will ask you to move that.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Chair, do you find clause 36 admissible?

[An hon. member]

You have to propose it first.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

I proposed it and it was accepted.

[The Chair, Conservative, James Rajotte]

I'm not supposed to give a ruling until you move it, but I think you'll probably like my ruling.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

But I proposed it.

[An hon. member]

Yes, but you haven't explained it.

[The Chair, Conservative, James Rajotte]

Go ahead, Monsieur Giguère.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Basically, this clause refers to a certain number of timeframes for revocation. Unfortunately, the problem is with the timeframes, and an administrator at fault may commit even more errors.

It basically involves an almost immediate revocation. It isn't bound to the timeframes specified.

[The Chair, Conservative, James Rajotte]

Thank you. This amendment is in order.

I will seek debate from colleagues, or from officials, if there are any who wish to comment on the amendment.

Ms. Taraschuk.

[Carol Taraschuk]

If there is a situation in which members are at risk, likely this wouldn't be the route that the superintendent would take; rather, he would replace the administrator and transfer all the assets out of their control.

The use of this power is very severe, because the revocation of registration actually terminates the whole pension plan. Members' further participation in a PRPP would cease, and it would have to be wound up, unless the superintendent replaces the administrator for the wind-up purposes. But if there is a risk to members, there is no requirement for a length of time that the superintendent has to notify about replacing the administrator, and that would be the action more likely taken.

[The Chair, Conservative, James Rajotte]

Thank you.

(Amendment negatived)

(Clause 36 agreed to on division)

[The Chair, Conservative, James Rajotte]

I do not have an amendment until clause 41; therefore I will seek to group clauses 37 to 40 together. Are there questions on...?

Mr. Giguère, on which clause do you have a question?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Chair, I would like some clarification on clauses 39 and 40.