Thank you for allowing Leith Wheeler Investment Counsel the opportunity to present before the committee.
Leith Wheeler Investment Counsel Ltd. is an employee-owned investment firm managing over $11 billion in investment portfolios on behalf of our clients. Approximately 10% of these portfolios are managed for individual high net worth clients, and 90% of the assets are managed for institutional clients. Institutionally, we manage portfolios for foundations, endowments, corporations, and first nation clients, as well as for pension trust funds and health and welfare trusts. Many of the pension and benefit plans that we manage portfolios for are associated with labour organizations, but others are not.
As an investment manager, we support disclosure of information. Without adequate information about the companies or securities we're investing in, we would be unable to assess the merits of an investment. From our perspective, the intent of Bill C-377, to provide improved disclosure of information, is understandable. Our concern, though, is that if this bill is enacted, any potential benefits from the legislation would be more than offset by negative unintended consequences.
Pension plans and health and welfare trusts have had a difficult time over the last few years. Liabilities have increased due to declining interest rates and increased life expectancy, while equity markets have not kept up with the growth in liabilities. According to Mercer, the solvency position of Canadian pension plans stood at 80% on September 30, 2012. Benefit trusts are grappling with similar issues and rising health care costs.
Our experience has been that the trustees of pension and health and welfare trust funds have been extremely diligent in carrying out their fiduciary duty to the members of their plans. This has included controlling the cost of the plan. Without this prudent stewardship, we believe the trust fund insolvency position would be worse.
It is in the interests of all Canadians to ensure that everyone has a decent pension. I'm sure that Mr. Hiebert and the members of the committee share this objective. However, we believe one of the unintended consequences of Bill C-377 is that the costs of compliance with this proposed piece of legislation will significantly increase the costs of any pension or benefit plan that has any members who are part of a labour organization. This is a significant part of the workforce who will be affected. This will result either in reduced pensions or benefits for members of the affected plan or in the employer or employee making increased contributions.
If increased costs negatively impact the solvency position of these plans, this could threaten their existence, increasing the demand on government and ultimately the Canadian taxpayer to fill the gap. This is not a desirable result.
It also results in inequality, as other pension and benefit plans, sometimes with the same employer, would not be subject to these costs. This seems very unfair to us. Pension and benefit plans are already subject to a significant amount of disclosure, while the trustees have a legal fiduciary obligation to operate the plan in the best interests of the beneficiaries. They currently must file annual financial statements with the CRA and are also subject to regulation and disclosure under federal and provincial legislation. We do not believe the additional disclosure contemplated under the proposed legislation is necessary.
The public listing of the purchase and sale of securities within a portfolio could also negatively impact the competitive advantage of investment managers and cause certain investment managers to refrain from managing assets associated with labour organizations. We're happy to, and we do, provide regulators, trustees, independent consultants, and auditors with any of the information they require.
In summary, we believe the unintended consequences of the proposed legislation outweigh the benefits, and we request that the legislation be withdrawn.
Thank you for listening to our submission.