Debates of Nov. 26th, 1997

Request For Emergency Debate

[The Speaker]

I am in receipt of a notice of motion under Standing Order 52 for an emergency debate from the hon. member for West Kootenay—Okanagan.

[Jim Gouk, Reform, West Kootenay—Okanagan, BC]

Mr. Speaker, I rise once again in accordance with Standing Orders 52(1) and 52(2) to seek leave for an emergency debate on the question of the post office situation.

I made this application last Thursday. You ruled at that time that it was a relatively new strike and it was not in your opinion an emergency at that point in time but that perhaps later it would be.

The strike has now been going on for a week. There does not seem to be any guarantee, certainly, or even any realistic likelihood that it is coming to an end. Therefore I think it is appropriate to request your consideration again, not so we can talk specifically about back to work legislation but so we can get all the issues on the floor.

We are hearing conflictions about how much the strike is costing business. We are hearing conflictions about how much unemployment it is causing. We are even hearing conflictions from various ministers on their position.

I would like all members of the House to put their concerns on the floor and discuss them rationally to see what solutions we can come to.

[The Speaker]

The hon. member rightly points out that he has already asked for an emergency debate on this topic. He was kind enough to send me a second letter with his reasons for asking for an emergency debate at this time.

I am still of the view at this time that it does not meet the requirements for an emergency debate.

[Jim Gouk, Reform, West Kootenay—Okanagan, BC]

Mr. Speaker, I rise on a point of order. For my guidance so that I do not waste the time of the House or yourself, could you tell me what would constitute an emergency for this purpose?

[The Speaker]

I am sure the hon. member will put forth another motion at some other time and at that time I will decide if it constitutes reason for an emergency debate.

The House proceeded to the consideration of Bill C-2, an act to establish the Canada Pension Plan Investment Board and to amend the Canada Pension Plan and the Old Age Security Act and to make consequential amendments to other acts, as reported (with amendment) from the committee.

Canada Pension Plan Investment Board Act

[The Deputy Speaker]

There are 25 motions and amendments standing on the notice paper for the report stage of Bill C-2.

Motions Nos. 4, 6 and 7 are the same as amendments presented and negatived in committee. Accordingly, pursuant to Standing Order 76.1(5), they have not been selected.

The other motions will be grouped for debate as follows:

Group No. 1: Motions Nos. 1, 3, 5, 21, 23 and 24.

Group No. 2: Motion No. 2.

Group No. 3: Motion No. 8.

Group No. 4: Motion No. 9.

Group No. 5: Motions Nos. 10 and 12.

Group No. 6: Motions Nos. 11, 13 to 19 and 22.

Group No. 7: Motions Nos. 20 and 25.

The voting patterns for the motions within each group are available at the table. The Chair will remind the House of each pattern at the time of voting.

I shall now propose Motions. Nos. 1, 3, 5, 21, 23 and 24 to the House.

[Peter Adams, Liberal, Peterborough, ON]

Mr. Speaker, there have been consultations among all parties and I believe you would find unanimous consent for an order of the House that would deem all amendments that have been found in order at the report stage of Bill C-2 to have been read by the Chair and to have been duly moved and seconded and to further provide that, when there is no further debate, the amendments will be deemed to have been put and a recorded division requested.

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

[The Deputy Speaker]

Accordingly, Motions Nos. 1, 3, 5, 21, 23 and 24 have been deemed to have been read, moved, seconded and put to the House.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

moved:

Motion No. 1

That Bill C-2, in Clause 8, be amended by adding after line 21 on page 4 the following:

“(3) The Governor in Council may appoint a panel of experts to review the conflict of interest procedures established by the board of directors under paragraph (2)(b) and to recommend changes to those procedures.

(4) The Governor in Council may direct the board of directors to adopt any of the recommendations of the panel of experts and to ensure that any procedures adopted are made available to the public.”

[Jean Dubé, Progressive Conservative, Madawaska—Restigouche, NB]

moved:

Motion No. 3

That Bill C-2, in Clause 42, be amended by replacing lines 40 to 42 on page 21 with the following:

“appointed for a term of five years by the board of directors, and may be removed at any time by the board of directors for cause.

(1.1) If the board of directors decide to remove the auditor before the auditor's five-year term ends, the board of directors must notify the appropriate provincial Minister of each of the participating provinces giving the reasons for the decision.

(1.2) The auditor may not be removed unless at least two thirds of the participating provinces having in total not less than two thirds of the population of all of the participating provinces has agreed in writing to the removal.

(1.3) An auditor who resigns before the end of the five-year term shall notify the board of directors, the Minister and the appropriate Minister of each of the participating provinces giving the reasons for the resignation and make those reasons available to the public.

(1.4) Where the auditor has resigned or been removed, no person or firm shall accept an appointment or consent to be appointed as auditor until the person or firm has requested and received from the other auditor a written statement of the circumstances and reasons why the other auditor resigned or why, in the other auditor's opinion, the other auditor was removed.

(1.5) Notwithstanding subsection (1.4), a person or firm may accept an appointment or consent to be appointed as auditor if, within fifteen days after a request under that subsection is made, no reply from the other auditor is received.

(1.6) Unless subsection (1.5) applies, an appointment as auditor is void if subsection (1.4) has not been complied with.”

[Paul Martin, Liberal, Minister of Finance]

moved:

Motion No. 5

That Bill C-2, in Clause 47, be amended by replacing lines 10 and 11 on page 25 with the following:

“47. (1) The Minister shall cause a special examination to be carried out at least once every six years in respect of the”

[Paul Martin, Liberal, Minister of Finance]

moved:

Motion No. 21

That Bill C-2, in Clause 91, be amended by adding after line 22 on page 72 the following:

“(4) The Investment Board and its auditor shall provide the Auditor General of Canada with any records, accounts, statements or other information that in the opinion of the Auditor General of Canada are necessary to audit the annual financial statements of the Canada Pension Plan.”

[Diane Ablonczy, Reform, Calgary Nose Hill, AB]

moved:

Motion No. 23

That Bill C-2, in Clause 94, be amended by replacing line 19 on page 74 with the following:

“subsection (5), and after reasonable public hearings before the House of Commons standing committee on Finance, by regulation amend the”

[Lorne Nystrom, NDP, Qu'Appelle, SK]

moved:

Motion No. 24

That Bill C-2, in Clause 96, be amended by replacing lines 24 to 26 on page 81 with the following:

“period in which the report is prepared;

(d) set out the manner in which that contribution rate was calculated; and (e) describe how the contribution rates presently set out under this Act will affect the income level of future retirees as well as their income share relative to the income of those working.”

Mr. Speaker, I want to say a few words on a couple of the motions I have presented under Group No. 1 before the House at this time.

The first motion we are dealing with asks to establish a panel of experts to review the conflict of interest procedures established by the board of directors. We are talking about the board of directors of the new investment fund that will be established.

We believe it is very important that there be an independent panel of experts which will help to set up a court of conflict for the boards. The reason is that we want to make sure the board is as independent as possible from the government. It seems wise to have an independent panel of experts. It makes it more independent from the government. It is fairer, more transparent and something that should be done. I hope the government across the way would be willing to consider it.

In committee a number of amendments were moved. On many of the amendments in committee the four opposition parties were in agreement but the government did not accept them. It has now had a chance to think about another whole series of amendments. I hope this time around it will be a bit more receptive to some of the wise ideas coming from the opposition parties in the House.

The second amendment I am moving in Group No. 1 is Motion No. 24. This will establish a new reporting requirement by the chief actuary in terms of how he or she reviews the Canada pension plan.

Right now the actuary only focuses on costs. In the future the actuary should focus as well on forecasting the income of seniors. That has not been done. What will be the income of seniors in 20 years or 30 years? That is a very important aspect of the bill before us today. Those are the kinds of things I believe should be done.

We support the idea of a pay as you go plan, but a number of things in the new Canada pension plan bill are not fair and not progressive. There have to be a number of changes to make the plan more progressive. It is important to say that at the beginning of the debate.

For the most part the Canada pension plan cannot be amended without the support of two-thirds of provinces representing two-thirds of the people of the country in addition to the federal Parliament of Canada.

When the provinces were negotiating with the government a while back, the federal government obtained the support of eight of the ten provinces. The two provinces not in support of the amendments being made to the Canada pension plan are the provinces of Saskatchewan and British Columbia, both of which have NDP governments.

I come from Saskatchewan and want to and do reflect, on behalf of my party, a number of concerns of those two governments about the amendments moved at committee stage and again here at report stage. Now we are finding that there is going to be a rapid escalation in the premiums facing workers and employers of this country. In fact over the next three years after this bill takes effect on January 1 there will be an increase in premiums of some 73%. That is a rapid escalation in premiums that will be very difficult to meet by a number of people.

It is particularly going to be difficult for the self-employed and more and more people are self-employed. The self-employed have to pay both sides of the premiums, the employer and employee premiums. Instead of being the current 5.3% or 5.4%, in six years they are going to have to pay 9.9% of their earnings in terms of CPP benefits. That is going to be very difficult for the self-employed and very difficult indeed in terms of many workers who are receiving wages at the lower end of the scale.

We are also very concerned that the whole thing is not progressive enough, that the basic yearly exemption of $3,500 is no longer going to be indexed. From 1966 on, that exemption was always indexed so that when the cost of living went up, the basic exemption also went up, giving a bit of a break to low income people. That is going to be eliminated and it is going to be a hardship on a great number of people across this country.

On the other hand, the maximum on which one has to pay contributions is going to be $35,800 per year. We are suggesting that that should be increased as well so that people who are making more money, such as members of Parliament, senators, the Minister of Finance or many of the wealthier people in this country can pay a greater share of those CPP benefits.

Again that was a suggestion made by two of the governments during the round of negotiations on changes to the Canada pension plan. It is another area which I believe we should look at.

The contributions are going up and they are going up in a very regressive way. That regressive way is also going to hit generationally as younger people, many of whom are not in the workforce yet, are going to be paying more and more in order to pay the CPP to people who are retired or who are going to retire in the next five or ten years. That is also very unfair.

On the side of the benefits, on the side of the recipients we are also seeing very regressive changes under the amendments to the Canada pension plan. The benefits are going to drop. They are going to drop in particular for low income people, the majority of whom of course are women in this country.

We are also going to see a drop in the survivor's benefits. With respect to the survivor's and death benefits, once again most of those recipients are women because women live longer than men. There are more widows than widowers. It is going to discriminate against women in this country. That of course is a concern to us as well.

Those are some of the concerns we have about the changes that are being made to the Canada pension plan. We strongly believe in a public pension system in this country. We do not believe as the Reform Party is suggesting that we should privatize the whole thing or abolish the existing Canada pension plan or the public pension plan and move to a super RRSP plan.

If we do that, what do we do with the so-called unfunded liability of $600 million that is going to increase to over $1 billion within a few short years? How do we do that? How do we cover that? Those are questions that have not been answered appropriately in terms of getting rid of the Canada pension plan, in terms of a radical solution for the problem that is facing us today.

The other thing that should be pointed out is that the Canada pension plan is not strictly a pension plan. In fact it is misnamed. It should really be the Canada pension and insurance plan. A lot of the money, about one-third of it, is paid out for insurance benefits. It is somewhere around that amount. When we are looking at insurance benefits in terms of CPP disability, which by the way will be harder to get under the amendments, survivor's benefits, death benefits and all of these other benefits are really insurance benefits.

If we were to privatize the Canada pension plan, what happens to the insurance side of it? Those questions have not been answered.

I do not think those are amendments that should be seriously considered at all by the Parliament of Canada. The important thing is to make sure that this country has a very strong public pension plan.

CPP in its first 30 years has been a great social program in terms of helping to redistribute some income in Canada. If we look at the statistics we find that the number of seniors who are living in poverty is a lot lower today than it was in 1966 when the Canada pension plan was first formed. Any regressive change in the CPP in terms of who has to pay the premiums and who will get the benefits is something which is not going in the right direction.

On behalf of my party I have recommended a whole series of amendments, two of them in this particular group, which will help improve the Canada pension plan to make it more transparent, to make it more accountable.

An independent group that would advise on the code of conduct is something the government can certainly live with. It is not going to detract in any way, shape or form from the Canada pension plan to have an independent group to advise on how to set up the code of conduct and look at conflict of interest rules for the board of directors of this new investment fund.

The new investment fund is going to be a big fund. It will eventually be over $100 billion, perhaps the largest investment fund or largest pension fund in this country in a few short years. It is important that there be very stringent, very transparent conflict of interest rules. Some of the people who will be investing in that fund will be involved in other investment organizations. It is very important that they be at arm's length from any kind of conflict of interest.

Those are some of the reasons why I am moving these amendments. I hope the government will be receptive to some of these amendments. I am reminded that the government across the way had the vote of only 38% of the people so the majority is actually on this side. Therefore, the government should take some of our advice very seriously.

[Jean Dubé, Progressive Conservative, Madawaska—Restigouche, NB]

Mr. Speaker, the motion I moved that is currently under study concerns the mandate of the auditor of the investment board.

We in the Progressive Conservative Party are very concerned about the problems this issue raises, because the Canada pension plan investment board will have huge responsibilities and power. It will oversee the billions of dollars invested by Canadian employers and employees. It will be playing with the financial future of thousands and thousands of Canadians.

Transparency and accountability are therefore of the utmost importance if we want to ensure this sizeable fund is well managed. This is why we wanted to clarify the provisions of clause 42 of Bill C-2.

We first start our amendments to clause 42 by extending the auditor's term from one year as it presently stands in the bill to five years. The one year term set out in Bill C-2 is too short a term to allow for continuity. With such an important fund it does not make sense to allow the possibility to change auditors every year. It does not make for sound administrative practices. We want to make sure the funds will be properly managed and allowing the auditor to have a five year term will help in achieving that goal.

The second amendment we would make on clause 42 is to stipulate that removing the auditor can only be done with just cause. As it stands now, clause 42 says that the auditor of the board may be removed at any time by the board of directors. This is clearly insufficient.

This provision clearly needs clarification because, as it stands now, it would allow the auditor of the board to be removed at any time, without just cause and without anyone having to account to anyone as to the reasons for doing so.

Such vagueness, such discretion invites abuse of power on the part of the board of directors, and that cannot be permitted.

What we propose is that the board of directors may remove the auditor at any time. However they must do so with cause and those causes must be made public.

In our amendments, disclosure provisions start in subsection 1.1. It stipulates that if the board decides to remove the auditor it must notify the appropriate provincial minister of each of the participating provinces of that removal. The board must also provide the provincial ministers with a reason for that removal.

It is important to note here that the provinces are an important and integral part of the Canada pension plan. Yet under the current bill they need not be made aware of such an important issue as the reason to remove the auditor or even the removal itself.

It is true that under clause 43 provinces are informed of the resignation or removal of the auditor. However this is only when the auditor herself objects to her removal or has to resign because of differences with the board. The provinces are therefore made aware of a done deed and they have no power to change anything.

That is why we went one step further in our amendments. In subsection 1.2 of our amendments we indicate that the auditor may not be removed unless at least two-thirds of the provinces representing two-thirds of the population agree in writing to that removal.

I hope that my colleagues understand and acknowledge that corporate auditors such as will be the auditor for the CPP board are there to protect shareholders, not the board of directors. The same principle ought to be applied to the Canada pension plan investment board. Furthermore, the protection of shareholders is a recognized principle in Canadian law.

Our amendments reflect this widely used principle such as is found in section 344 of the Insurance Companies Act which requires shareholders to be told the reasons for the auditor's dismissal and to vote on that dismissal. In our case, the provinces stand in as proxies for the shareholders with the standard two-thirds rule replacing the shareholders meeting. Similar rules are part of the Bank Act of Canada, the Canada Business Corporations Act and the Trust Companies Act.

In subsection 1.2 I explained the process to be used in case an auditor is removed by the board. Subsection 1.3 explains the process to occur when an auditor resigns. In this case our amendment would require that the auditor notify not only the board of directors of a resignation, but also must notify the minister and the appropriate minister of each of the participating provinces. Notably the auditor would also be required to provide the reasons for the resignation and the auditor must make those reasons available to the public.

This is again common practice in a corporate world and those principles should be applied to the Canada pension plan investment board.

To ensure full disclosure of the circumstances of the removal or resignation of an auditor, we provided for the requirement for any new auditor to obtain a written statement from the outgoing auditor. This statement would state the circumstances and reasons of the resignation or removal.

It is important to note here that something is missing in French version of subsection (1.4), as compared to the English version. On the third line, we should read “d'avoir demandé et obtenu” instead of just “d'avoir obtenu”.

This would reflect the English wording “has requested and received”. This is an omission that has an effect on subsections (1.5) and (1.6).

Now getting back to the relevance of subsection (1.4), as I explained earlier, there are practices in the corporate world that should be applied to the operation and management of the Canada pension plan investment board.

It is a matter of transparency and accountability. We want to ensure that the funds entrusted to the investment board will be managed properly and that reputable administrative practices are used.

By providing that the incoming auditor must ask the other auditor why he or she resigned or was removed, we are echoing a provision of section 345 of the Insurance Companies Act.

It is so important that the new auditor comply with this requirement that he or she cannot accept this appointment without first having received the written statement of the circumstances and reasons behind the other auditor's resignation or removal.

In clause (1.5), we make an exception to clause (1.4). If the new auditor did indeed request a written statement from the former auditor, but that the latter did not provide a reply within 15 days, the new auditor may nevertheless accept his appointment as auditor. This would avoid having too long a period without an audit being conducted.

In clause (1.6), we reiterate that an appointment as auditor is void if clause (1.4) has not been complied with. For example, if a person accepts an appointment as auditor without having requested a written statement from the former auditor, the appointment will be void.

To conclude, this explains the amendments provided in Motion No. 3 now before the House. As I mentioned at the beginning of my comments, these clarifications to clause 42 of Bill C-2 have to do with the mandate of the auditor of the investment board. Our amendments help ensure the board's transparency and limit the powers of the board of directors, for the benefit of Canadians as shareholders of the fund.

I urge all hon. members to support the motion.

[Diane Ablonczy, Reform, Calgary Nose Hill, AB]

Mr. Speaker, the name of my riding is quite appropriate today since I have a bad cold. That is another story.

Today begins a very gripping debate on proposed amendments to Bill C-2. Those Canadians who watch the proceedings of this House will probably want to be reminded that Bill C-2 deals with the proposed changes by the government to the Canada pension plan.

This stage of the proceedings is called report stage where the bill is reported to the House. Amendments are proposed to the bill for the House to vote on. Then the bill goes into third reading or final debate stage before it is voted on.

These are amendments now that we are talking about today to the CPP bill. There are six groups of amendments and we are now discussing Group No. 1.

Group No. 1 has six different amendments in it. I assume they are all grouped together because they deal with accountability. Under this bill there is a big fund of money set up and it is managed by people who will be talked about later.

This group of amendments talks about how the fund managers need to report and account for their actions. There were six amendments put forward to deal with this. These were not the only amendments to deal with the way the fund managers operate and are accountable.

There were quite a number of amendments, as the previous speaker mentioned, put forward at the committee stage. All those were voted down by the Liberal majority even though, as has been said, the opposition was, in a rare show of good sense, unanimous in supporting the amendments which would have made the account and its management a great deal more open and transparent.

Considering that they have in their hot little hands a large chunk of our retirement security, one would think that the more we can do to make this thing open and accountable and transparent, we would be eager, willing and prepared to do that.

Unfortunately there does seem to be some reluctance on the part of some members from the government to do that.

Let me talk briefly about the six amendments that have been put forward because I support all but one of them, just so the public knows what the opposition and the government are proposing to make this fund a little more accountable.

The first motion is the one that has been spoken about by my colleague from the NDP. Essentially what that does is say that the cabinet can set up a panel of experts to review the conflict of interest procedures which the directors, the board that manages this fund, put into place.

In a sense the cabinet appoints the fund managers and this amendment says the cabinet can appoint some experts to breath down the necks of the fund managers. In a way it is political appointees looking over the shoulder of other political appointees.

I suppose we could wish there were a bit more arm's length arrangement to all this. However, it is a step in the right direction. At least somebody, even if a political appointee, is going to look over the shoulders of these board managers and it seems to me that gives us at least another kind of avenue of comfort to know that somebody has some review mechanism or review responsibility for these conflict of interest procedures.

We certainly do not want these conflict of interest procedures to be like the cabinet conflict of interest procedures we heard much about but have never seen. There seems to be this sort of talk about conflict of interest procedures but nobody sees them, nobody really seems to be able to make sure they are followed. It would be very useful, at least in this case, to move in that direction.

So we do support that amendment by the NDP.

The next amendment is one by my colleague from the PC party. We have just heard about this, so I will not go on at any length. Instead of an auditor being appointed every year, year by year, it gives the auditor a term of five years.

There are two important things here. One is of course that the auditor has some staying power in this whole scheme of things. There is no revolving door of auditors where someone comes in cold. This is a huge fund. It manages literally billions of dollars and it does take some knowledge and expertise to do a proper audit.

So rather than having a possible revolving door of auditors, there is somebody who has a grip on the thing and some stability and some tenure and who can look after it. As the proposer of the amendment mentioned, if the auditor were not doing their job, they could certainly be booted out the door before five years, but there would be some good reason to do so.

The other thing to mention is that this five year term, generally speaking, would outlive a government, so to speak. We would not have quite so much of the auditing of the thing tied to whomever is in power at a particular time. I think this is an excellent amendment and should be supported.

The third amendment is by the government. I do not know if the government intends to speak to it. It is a good amendment.

The act presently provides that a special examination of the operations of the board may be carried out at least once every six years. In other words, there may be no special examination at all. This amendment changes “may” to “shall” so there has to be a special examination at least once every six years. Again, it is a step in the right direction. This is our retirement at stake. To mandate a special examination on top of some of the other accountability measures surely would not be amiss. So we support that.

The government is also bringing in what I call the amendment from the hon. member from Prince George—Bulkley Valley because that member of the Reform Party challenged the finance minister in question period on the fact that the auditor general was not the entity or the person with the audit responsibility for this huge fund.

It seems strange to us that Parliament appoints an auditor general to oversee the operations of government but somehow this huge fund of billions of dollars had its own auditor whom the board, appointed by the cabinet, chose. We feel very strongly that the auditor general should have every ability and every bit of information necessary to conduct his own audit of this fund, and this amendment would allow that.

We commend the government on this amendment. In fact, it is the very first time it has agreed to such a measure, because in committee it turned all these kinds of measures down.

However, now that the auditor general has had a word with it, the government has recognized that it cannot have an auditor general of a country and have an aspect of the operations of government, particularly such a large aspect, not explicitly subject to his operations.

With respect to the motion I have introduced, it would require that the schedule of rates charged under the CPP, the contribution levels, not be changed except after reasonable public hearings. Presently the act says it can be changed by cabinet. We say no. If people are going to have to pay more bucks they should at least get to say something about it. We say there would have to be public hearings before changes are made.

I would like to have said a few passionate words about Motion No. 24, but unfortunately I do not have time. However, the motion has been ably spoken to by the NDP member and I will leave it at that.

I believe these are good amendments and I hope they will be supported by the House.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I am pleased to speak at the report stage of Bill C-2, which creates Canada pension plan investment board and which carries out an in-depth reform of the Canada pension plan.

It is important, I think, to begin with a brief overview of the key elements which led up to the drafting of this bill. The first point I would like to speak to is that the Canada pension plan had got pretty well out of date and no longer really met the needs. It was headed toward an incredible deficit. It was absolutely vital for a decision to be taken in order to remedy the situation.

I am rather proud that they turned to Quebec in order to see what had been done with the Quebec pension plan. An equivalent pension plan was created in 1964, in the early sixties, during the term of Prime Minister Pearson whose view of federalism allowed Quebeckers the leeway to create institutions specific to them if they so wished. They did so in the area of pensions with the creation of the Quebec pension plan which, moreover, has always performed better than the Canada pension plan.

At the same time, the decision was made to manage pension funds and other funds, but particularly the pension funds, by creating the Caisse de dépôt et placement. Some 30 years later, along comes the federal government with the decision to create a similar body so as to have a satisfactory yield from the investments made.

The bill to create the Canada pension plan investment board is, therefore, a sort of practical and concrete acknowledgement of the efforts that have been made in Quebec. There might be a lesson to be learned here by the present government on the leeway that should be given to Quebec on the issue of social programs, and perhaps in another three, four or five years, before Quebec becomes sovereign, we will have been able to make a contribution to the implementation of other still more satisfying programs.

Today, at report stage, we need to look particularly at a number of amendments made by various parties. We have to see whether they would improve the act. I refer particularly to Motion No. 5, the one tabled by the government, which says that, when the auditor general needs to make a special audit, the government is committed to a special audit every six years. I think this is an outcome of the work done in committee. It is an amendment proposed by one of the opposition parties. It was not accepted at first reading, but the government agreed to dig a little deeper. Today we have this motion, which, like Motion No. 21, will ensure better distribution of information. Thus these motions may be interesting.

The same is true of the NDP motion on conflict of interest. I think, with the size of the amounts managed by the Canada pension plan investment board and by the whole new Canada pension plan, it is clear that conflicts of interest must be prevented and that everything will be done legally and appear to be done legally.

The Conservatives have also tabled an amendment. It aims at ensuring increased autonomy for the auditor general.

We must look in greater detail; we must analyze it properly to ensure it is not already included in other provisions of the bill.

The first group of amendments therefore contains a series of clauses intended to improve the bill, according to how you look at them. This leads us to the realization that the bill will achieve a certain consensus across Canada.

Unfortunately, the Reform Party has a whole other view, that of privatizing the entire pension plan. I think this view is not in tune with our values of social justice. In this regard, I think that the Reform Party should listen to the public some more to make sure its position is the right one.

I would like to point out that the Canada pension plan covers some 12,000 people in Quebec. The others are covered by the pension plan of Quebec, which has already carried out a consultation similar to that being done by the Government of Canada. The two plans have certain identical elements. This is relevant, because it makes it possible to transfer the plans of people who have worked in Ontario or another anglophone province to Quebec, should they move there. To a certain extent, this is automatic, which is useful.

It also allows members of the Canadian armed forces and the Royal Canadian Mounted Police to be covered under the Canada pension plan. This is a practice that has caused problems in the past. It shows that, as far as Quebeckers are concerned, the main pension plan is the Quebec pension plan. It is the plan under which almost everyone is covered. For the 12,000 individuals involved, it may be important, but on the whole, Quebeckers are much more interested in the Quebec pension plan.

I would also like to bring to the attention of the House the fact that these amendments to the Canada pension plan come within the scope of a more comprehensive reform of the retirement income system, which includes the Canada pension plan, or the Quebec pension plan in Quebec, and old age security and guaranteed income supplement.

In this regard, the Bloc Quebecois has very serious concerns about what the existing pension plan will be replaced with. Just as people currently covered by this plan, who are already receiving benefits under the plan, are assured that existing conditions will be maintained, so will those currently receiving what is commonly known as old age pensions.

Under the plan to be established, on which broad consultation should be conducted, starting in 1998, it will be important that both young people and those in their forties have an opportunity to select a pension plan with full knowledge of the facts and that a plan that does not provide for intergenerational balance, which is one of the objectives of the pension plan currently being considered, not be imposed on them.

This is an element that can be found in Bill C-2, the Canada pension plan bill, and this principle is also included in the Quebec pension plan reform. Efforts are made to create a better intergenerational balance, by increasing premiums now so that everyone can contribute as much as possible toward what they will be getting out of the system later. This way, there is no surprise and younger generations will not have to pay disproportionately for retirees who contributed less in the past, percentage-wise. This applies to baby boomers in particular.

There are interesting adjustments in this regard in the bill. There are the amendments that we find in the first group. These are interesting features that will make it possible to improve the legislation, after the stages we have seen so far, that is, consultation in all provinces, recommendations resulting from this consultation, and the work in committee, where we heard from groups who came to make representations along the lines of what is contained in a number of amendments.

I think that it is important not only that the Canada pension plan be more effective than in the past, that it match the effectiveness of the Quebec pension plan, but that there also be an appearance of fairness, and amendments such as that of the NDP, for instance, to ensure better management of conflict of interest.

I think this is important and interesting because the system introduced will be in place for many years. There has been no reform of the Canada pension plan since it was first introduced. We are therefore looking at a system that will have to work for 10, 20 or 30 years. We must make sure that the bill will be the best possible.

I hope the government will give it the necessary attention, because opposition parties have taken a constructive approach so as to ensure it is the best bill possible. This is what we want to continue to do with the suggestions made today.

I urge the government to pay attention to the votable motions among the group of amendments so that, in 10, 15, or 20 years, the system is successful and so that people can be as proud in Canada, whatever it looks like then, of the results achieved as we are of the Quebec pension plan. In any event, compared to the CPP, the QPP has done well, and the federal government has recognized this, judging by what we see in the bill.

[Tony Valeri, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I think it is important that we restate again today at report stage of Bill C-2, which is amendments to the Canada pension plan, that Canadians from all walks of life want assurances that the CPP will really be there when they need it and when they retire. They want assurances that it will never be taken away from them.

I think these are legitimate aspirations that everyone from all sides of the House shares. What we are doing is of course making sure that the financial sustainability will never again be at risk, that in fact the CPP funds will be invested in the same way as the private pension plans and that Canadians start to receive regular statements of their pension and earnings.

Specifically on the motions in Group No. 1, Motion No. 1 in particular talks about the conflict of interest procedures. I think it is important to note that the board's conflict of interest procedures will be made public and that will be subject to scrutiny not only of experts, but also the public at large. The conflict of interest provisions contained in the legislation are widely regarded by experts to be quite stringent.

I want to make a point of clarification. The first speaker as we kicked off the debate today at report stage made a point that the investment board was not independent. I want to state again that that is not true. It is an arm's length board.

The board will be working for the best interests of the plan members. In fact the whole basis of establishing this board is to ensure that it is an arm's length board and that there is accountability built into that board.

There was the comment about how women were being treated unfairly. It is important that we make reference to the gender analysis that was put forward that showed that in fact women would receive $2.56 of benefits for every dollar of contribution.

Motion No. 3 talks about appointing the auditor for a five-year term. I think it is also important that we make the point that it is standard corporate practice to appoint an auditor for one year, but nothing is preventing the board from reappointing that auditor for subsequent terms.

In the case of resignation or removal of the board's auditor, the act already requires that a statement explaining the reasons for the resignation or removal be sent to the finance minister and the finance ministers of participating provinces.

There has to be a reason for the resignation or removal by the board and that provides the accountability and the transparency. Again, I want to reiterate that the board is an arm's length corporation.

I want to make reference now to the two proposed amendments that the government has put forward, the first of which will in fact clarify that the auditor general will have access to all the information that he considers necessary to conduct his overall audits of the CPP. On the basis of this change, the auditor general has indicated that he is satisfied with the audit provisions of Bill C-2 and has written to the finance committee chair to this effect.

The second amendment will require that the CPP investment board be subject to special examination at least once every six years. Bill C-2 currently provides for special examinations but it does not specify the fact of minimum frequency.

I want to restate that these amendments are a result of the committee work and the contributions that the various members of the committee have made in the discussion on Bill C-2. The fact that we are moving to put a timeframe on the special examination once every six years is a slight change from the original motion that was put forward in committee.

That change is there to coincide with the review that is to take place every three years. The auditor general would have to perform a special examination on the second triennial review so if there were any challenges to the plan, the Minister of Finance would be able to address them at that time.

I have some additional information about the board and its accountability since there has been a fair amount of discussion in this first part of the debate on Group No. 1 on the accountability to Parliament and to Canadians.

The legislation makes the investment board fully accountable to Parliament and to the Canadian public. Experts in pension fund governance have praised the accountability provisions of Bill C-2 for being extremely rigorous. The Ministers of Finance and Human Resources Development will be required to prepare an annual report on the CPP which will be tabled in Parliament and also sent to the provincial finance ministers. The report will include the audited financial statements of the CPP investment board as well as the report of the auditor general in those statements in his overall audit of the CPP.

The amendment we have made clarifies a provision that was included in the bill already. It merely clarifies for the House that the auditor general would have had access to any and all information that would be required to complete his audit of the consolidated financial statements of the Canada pension plan.

We have responded to the issues that a number of members of this House have made with respect to the auditor general's access to information by bringing forward these two amendments. These amendments also address the request for the auditor general to conduct these special examinations over a period of time. We have indicated that every six years would be suitable since at the second review of the plan the finance minister would be able to address any issues of concern.

The board will keep Canadians well informed of its investment activities. It is important for us to tell Canadians that the board will be managing this large pool of money in a very transparent fashion. Canadians will be fully aware of this. The board will make Canadians well aware of its investment activities by making its investment policy standards and procedures public, releasing quarterly financial statements, publishing annual reports and the board's members will be holding regular meetings in each province to allow for public discussion and input with respect to their work as members of the investment board.

I will comment briefly on the last motion which is related to Motion No. 23. It requires that any changes to contribution rates resulting from the three yearly reviews by the federal and provincial governments be subject to public consultation by the finance committee. The finance minister has stated over and over again that any major changes to the Canada pension plan in the future will be subject to consultation with Canadians and that all changes to contributions require the consent of two-thirds of the provinces and two-thirds of the population.

Any changes large enough to require legislation would always be referred to an appropriate committee of the House for review as a matter of course.

Therefore there really is no need for this proposed motion. The process is already in place. It is a standard process and one that the Minister of Finance is on record as stating he asked for.

With respect to the motions which were put forward in the first grouping, I want to say that certainly every member of this House is committed to ensuring there is financial sustainability in the Canada pension plan. The changes to Bill C-2 are responding to the public consultations which took place over a period of time. Canadians had an opportunity for input and to talk about what they would like to do and would like to see happen with respect to the Canada pension plan. The message was overwhelmingly that they wanted to have the Canada pension plan sustainable, safe and in place for them in retirement. The changes in the amendments being put forward in Bill C-2 speak to those concerns of Canadians.

I look forward to the speedy passage of this bill so we can continue to do our work in ensuring that we reflect the priorities of Canadians as we move forward.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the parliamentary secretary has thoroughly covered the report stage motions in Group No. 1. I would like to add a couple of notes for the benefit of all members.

As members know, the chief actuary in his 15th report, his last report, let it be known that the Canada pension plan would not be sustainable past the year 2015 unless certain changes were made. That is one of the reasons we are here today.

As a result of that report and as a result of the prescribed reviews of the Canada pension plan, discussion documents were prepared. Extensive cross Canada consultations were held with all vested interests, with seniors, women, labour, corporations and everyone who wanted to appear before the panel, who sought input into changes or options that could be made with regard to the Canada pension plan.

Canadians should be assured that these changes which have come before the House on Bill C-2 are as a result of exhaustive consultation with Canadians across Canada.

By law any change to the Canada pension plan requires the approval of at least two-thirds of the provinces representing not less than two-thirds of the population of the country. All of the proposed changes which are coming forward in Bill C-2 have received the requisite support from the provinces. Canadians should be assured that this is clearly as a result of extensive consultation and has the full support of the majority of the provinces of Canada.

It is also important to assure all members, particularly today's seniors who are current beneficiaries of the CPP and any other Canadians who receive other benefits such as disability benefits, that their current benefits will not be affected by the changes being considered by the House under Bill C-2. It bears repeating that seniors should be assured that their current benefits under the Canada pension plan will not be affected.

The parliamentary secretary dealt with many of these points. I will simply move on and repeat that the benefits as a result of these changes under the CPP will continue to be secure. They will continue to be guaranteed. They will continue to be indexed so that all Canadians can enjoy the benefits of the Canada pension plan for generations to come. That is the reason we are here.

Finally, with regard to the Canada pension plan investment board, members should know that one of the features of the current plan is that funds accumulated by the plan have been invested in provincial bonds at federal rates. To ensure that Canadians get the lowest possible rates of premium to pay into the plan, one of the big changes being proposed is the creation of the Canada pension plan investment board, a board selected in consultation with the provinces. Its members are experts in investment. The board will ensure that the funds received by the Canada pension plan will be invested as wisely as possible to earn the optimal return for the benefit of all Canadians.

Canadians should be assured that the changes being made here respond to the concerns raised by the chief actuary and respond to the needs of all Canadians that the Canada pension plan system will be there for generations to come.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I am very pleased as a member of the New Democratic Party to participate in this debate.

I stand in this House in support of two motions that the NDP have put forward to improve Bill C-2. I refer specifically to Motion No. 1 in Group No. 1. This motion will replace with an amendment where the government may set out an independent panel of experts to review publicly disclosed and externally enforceable conflict of interest rules.

Why would we propose these changes? An independent panel of experts should help set up a code of conduct for the board of directors. I know the Liberals are very concerned about having codes of conduct because whenever that phrase is used, the Liberals seem to get caught breaking all the rules of the code of conduct.

I am absolutely petrified, apprehensive and not confident in what the Liberals are saying. They are telling this House and the people of Canada that Canadians can be assured that the Liberals are undertaking a program that will benefit them. Let me talk for a few minutes about how Canadians are so sure of the Liberal record when it comes to social safety programs.

Members and other Canadians may recall members of Parliament who preceded us in this Chamber, members in high regard, members like Major James Coldwell, a CCF member of Parliament from Regina. Many years ago members will recall the names of J.S. Woodsworth, Stanley Knowles and Tommy Douglas. What these four CCF and NDP members of Parliament had in common was that they did not rest assured with assurances from Liberal governments previous to this one that they were going to support the benefits of Canadians in their later years.

As a matter of fact, these individuals, Woodsworth, Coldwell, Douglas and Stanley Knowles, fought tooth and nail for all of their political careers stretching some 35 years in a certain member's experience, fighting for pensions for Canadians. And who opposed those pensions? It was the Liberal Party, Liberal governments in the past and before that Conservative governments. If it was not for these four individuals and many other like-minded Canadians, we would not have a pension program in this country.

When I hear the Liberals opposite stand in their place and say rest assured Canadians, we are going to look after you, I think Canadians should be doubly aware and doubly concerned about something rotten in the state of Canada with respect to this pension plan. The record is very clear.

What I want to talk about in respect of these amendments is why does the government not support an independent panel of experts being created to outline a code of conduct for the board of directors? Is it because it is going to appoint the wealthy friends of the Minister of Finance? Is it going to appoint people like Conrad Black, a good friend of the prime minister of this country? They golf together, ride horses together and do all sorts of things together. What they do have in common with respect to all of Canada is that they tend to put the screws to those on the lower income scale. That is unacceptable in this day and age in this country.

Why are the Liberals not supporting such an amendment for a code of conduct? I think people should ask that question. When Liberals give them assurances that they are protecting their interests, I do not think those assurances are sufficient.

The true test of progress in our society somebody once said is not whether we add to the abundance to those who have much, but whether we provide enough for those who have too little. With respect to this test of progress on this bill and these amendments that the government is opposing, the Government of Canada is falling far short of passing this test of progress. It is not providing enough for those who do have little. What it is doing is making sure that those who have abundant incomes and assets are going to maintain and roll those assets at an accelerated scale at the expense of those who have very little.

The second amendment the NDP is putting forward is Motion No. 24. We are suggesting that there be a requirement for the chief actuary to forecast income from public benefits of future retirees relative to the earnings of those who are working. Why the change? Because we have an actuary who has been instructed by the Minister of Finance, and some people refer to him as the Scrooge of Canada and others have more unflattering names, but we will not get into those because we do not want to get into name calling at this point.

Why not allow the actuary and some of these Canada pension plan employees to provide some analysis of the costs of the plan and the benefits to seniors and older Canadians who will qualify for this pension? Why can they not share information publicly which would outline what retirees will receive 15 and 20 years down the road? It has projected what we are going to be paying, it has projected what it is going to cost, but it will not tell Canadians the truth about how much they will receive for paying for all these benefits.

I am asking the government to reconsider. If it really believes what it says that it is going to assure Canadians that it has the confidence of all of the provinces, then it will undertake to support these amendments.

I might add when the member opposite stood in the House and said that he had the support of two-thirds of the provinces, that eight of the ten are supporting Bill C-2 unamended, how many are from the CCF-NDP form of government? Not one. Who did the NDP and the CCF fight tooth and nail, year after year, decade after decade to obtain pensions? The NDP and the CCF fought the Liberals year after year, decade after decade for pensions on behalf of seniors. We were able to obtain the pension plan in the country after many decades of fighting and now they are asking why the NDP province of Saskatchewan, where I come from and represent, and the NDP province of British Columbia are not supporting the bill.

Canadians should be asking this question of themselves. They should be asking this question of the Liberal members of Parliament. When the Liberal members go back to their ridings constituents should ask them why the NDP provinces, the NDP who fought for pensions in this Parliament and this country are not supporting Bill C-2? Why are they not embracing all these changes?

[An hon. member]

Tell us.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

We will get into that later in the other amendments, but I think my time is running out. We have all sorts of information that we want to share. I am sure all members are open minded and very willing to listen to some of these suggestions and recommendations. I certainly look forward to sharing them.