Debates of Nov. 26th, 1997

Canada Pension Plan Investment Board Act

[Michelle Dockrill, NDP, Bras D'Or, NS]

Mr. Speaker, like my colleague from Regina—Lumsden—Lake Centre, I stand today and support Motions Nos. 1 and 24 in Group No. 1 on behalf of Atlantic Canada.

Coming from Atlantic Canada I have a difficult time understanding why the government would not want to support Motion No. 1. We in Cape Breton have been very well aware of government patronage over the years. I have to say that when I hear the government talk about priding itself on openness and accountability, this is a surefire way to ensure that accountability and openness. We have seen years of patronage. This is like allowing the mouse to mind the cheese.

What is really important is that this will ensure a balance between the private and public aspects of the so-called changes to the CPP which are going to benefit all Canadians. I must say there is a large number of seniors in my riding of Bras d'Or and they are not as confident that these changes are going to benefit them.

With respect to Motion No. 24, it is quite simple. It is asking the chief actuary to do the job the government has not been able to do or has refused to do. It is the right of Canadians to be told what the fund is going to cost them and what benefits they will receive or what benefits they will lose. As I said, Mr. Speaker, my comments were going to be brief and hopefully we will get an opportunity at a later date for some of the other what I see as really good amendments.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

Pursuant to the order made earlier this day, all the motions in Group No. 1 are deemed to have been put, recorded divisions deemed requested and deferred.

We will now proceed to debate on the motions in Group No. 2. Pursuant to the agreement reached earlier this day, the motion in Group No. 2 is deemed proposed and seconded.

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

moved:

Motion No. 2

That Bill C-2 be amended by deleting Clause 37.

Mr. Speaker, I would like to explain to members of this House why it is imperative to delete clause 37 of Bill C-2, which reads as follows:

1. The Board and its subsidiaries shall invest their assets in such a way that tax would not be payable by them under subsection 206(2) of the Income Tax Act if Part XI of that Act applied to them.

Pursuant to this clause, the Canada pension plan investment board should act as if it were governed by the provisions of the Income Tax Act dealing with the foreign content of pension plan portfolios. This means that the new board would not be allowed to invest more than 20% of its assets outside Canada.

Because we believe the board should have the power to make investments that will best protect the interests of the plan's beneficiaries, clause 37 must be struck from the bill.

In fact, the government should increase and even eliminate the limit put on foreign investments, instead of extending it to other types of investments. We must make sure the board is free to choose the investments likely to provide the best return, regardless of any political consideration.

Also, maintaining restrictions on foreign content could trigger major problems.

First, limiting investments abroad could prevent the board from building a portfolio that is sufficiently diversified to reduce financial risks. We all know that this issue is an important one and that it is time to restore Canadians' confidence in a pension plan that was once their pride.

Second, this constraint also has the effect of reducing the competitiveness of Canadian businesses. Knowing that there is a large and secure capital base on which they can rely, they have less motive to be effective and efficient than if they were in direct competition with foreign companies.

Third, and this is certainly an important concern, it prevents Canadians from receiving a fair return on their pension savings: their money is tied up in a stock market that represents only 3% of the capital in the global market.

Quoted in the Ottawa Citizen , Professor James Pesando from the University of Toronto summarizes and illustrates better than I can the concerns that were raised. He said, and I quote:

“You have heard that expression `don't put all your eggs in one basket'. Just imagine that the CPP fund in the extreme case was invested only in Canadian stocks and bonds and then in 2005 Quebec secedes. That would be devastating in terms of its impact on share prices and bond markets in Canada”.

Professor Pesando continued:

<“Think about what would happen if 50% of those funds were invested offshore. Not only would they continue to do well, but the drop in the Canadian—would mean the returns would be magnified”.

It is not complicated: Bill C-2's provisions setting out the rules on the portfolio's foreign content deprive Canadians of over $700 million annually. By eliminating clause 37, that is by eliminating these rules, the market value of the Canada pension plan could increase by 20 to 25%. This is no small amount. I would even say it is significant.

The government should stop limiting potential investments by millions of Canadians and should act to eliminate this outdated and archaic requirement.

It is in fact that same government that is saying to these same taxpayers that they should be more responsible in financing their retirement. I am saying that the government should act more consistently.

During the electoral campaign last spring, the Progressive Conservative Party clearly stated that it wanted changes to the rules governing registered retirement savings plans in order to gradually eliminate restrictions on foreign investments.

Its main argument at that time also applies very well to the issue of the Canada pension plan today: Canadians have the right to seek the best possible return from the market.

To achieve this, it is essential that the investment board be allowed to make its investments in the best interests of the Canada pension plan's beneficiaries.

That is why I urge my colleagues in this House to vote in favour of this motion.

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

Mr. Speaker, this amendment may be one of the single most important amendments which have come forward. I believe nearly every witness I heard at committee commented on the management and investment of our retirement fund. They said that this 20% rule should be changed, that it should be lifted. This amendment, of course, would do that.

Currently, pension funds in Canada are limited with respect to freedom of investment. Only one-fifth or 20% can be invested offshore.

To put this in context, the global capital pool is very large and Canadian investments comprise only 3% of it. In other words, Canadians are expected, indeed forced, to put almost all of their investments upon which their retirement security depends into a very small capital pool. This does not give us the best return and the best security.

As the member who just spoke indicated, it substantially limits the kind of return we can hope to achieve. It does not maximize the investment return which we can hope to achieve.

This is particularly important for poorer Canadians. People who have money, who have companies registered offshore, who have family trusts and all of those good things can diversify their assets to the point where this rule does not substantially hurt them. However, for lower income Canadians who have almost all of their retirement savings invested by these mandatory payments into the Canada pension plan, this restriction and the consequential limitation of the investment return they hope to receive means a great deal. If we want to provide particularly low-income Canadians with a secure portion of retirement that they can count on, we simply have to get rid of this 20% foreign investment rule.

As I said, this is not just something that a couple of opposition parties are talking about, although certainly if we think so, that should be persuasive. We are joined by almost every single witness that appeared before the committee, including actuaries, accountants, pension fund managers, economists, analysts of all kinds, some of the most respected thinkers in this country.

I wish that it was the finance minister's name on here as the mover of this amendment. That would indicate that we were going to get this matter taken care of. Since it was an opposition member who had the wit and the courage to put this forward, I would certainly hope that all members of the House would support this amendment. If they do not support any other one, I would say this is the one to support, particularly for the benefit of the most vulnerable members of our society who need the best return we can possibly give them on their pension and retirement investment.

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

Mr. Speaker, today we can situate this amendment within a context in which the Canada pension plan has, in the past, not had a very high yield when reinvesting the money paid into it. The reason for this is certainly that the cost-effectiveness of the plan was not really an objective, unlike Quebec's Caisse de dépôt et placement, which was intended to increase the yield on its investments as much as possible.

Today, then, in reading the proposed amendment, we see there is a continuity with this, in the desire for the investment board to try to solve this problem of profitability of the plan's investments.

It is, however, important to carry out a fairly detailed analysis, because the section of the act they wish to do away with says that the funds invested by the investment board must be handled differently than that invested in registered retirement savings plans. What is not said is that the 20% rule cannot help but be changed, but this will be done by considering all of the tax implications, for the RRSPs as well, and perhaps even other implications there may be within the Canadian federal taxation system.

So, the question we should be asking today is whether this is the right time to be changing the rules of the game in this bill, when no similar change will be made to RRSPs. In my opinion, parliamentarians should look at this with a concern for co-ordinated and logical taxation in Canada.

The investment board will surely permit a better return on investment, because it has been given the criteria for economic performance. In terms of investment objectives, types of investment, the only remaining constraint concerns the 20% maximum during the time the tax legislation in question applies.

So we see that within this no undue pressure is being applied to investment choices if, suddenly, tomorrow or in the coming years the board could invest as it likes outside Canada.

However, if this option is not available through RRSPs, we will end up with a double standard. The government will no longer be behaving like an employer and a lawmaker, but as an investor and a lawmaker and will not be giving private pension plans parity and the chance to the same investments. I think that at that point we could run the risk of making this sort of amendment.

So I think it would be better, in the context of the pre-budget consultations currently underway for the next budget, to take a look at the relevance of giving everyone equal opportunity. As the bill now stands, the day the tax system is changed, this amendment will apply to RRSPs, as it will to the Canada pension plan investment board.

This would, in my view, be more ethical and would avoid putting the government in a difficult situation vis-à-vis the representations that might be made to it in the amendments to come regarding RRSP rules. When the door is opened, it must be opened for everybody, so that the change will affect everyone equally, so that the government and private investors who must now contend with the 20% rule in every other sector will start off on an equal footing.

So, for these various reasons, we do not think it advisable to make this amendment today. It will be necessary to verify whether the change will be made for all investment programs affected.

In conclusion, the Canada pension plan investment board is the cornerstone of this bill. A major effort is already under way to obtain a better return on the money invested by the public in the CPP. Investments will be carefully monitored and special studies to evaluate effectiveness will also be possible. I think that now is not the time to remove the equality that will exist among the various investment vehicles. This change would be more appropriate in the context of a fiscal debate.

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

Mr. Speaker, I am pleased to say a few words on Motion No. 2. I want to say a few words because I am a bit puzzled with respect to my colleagues who are moving this and supporting this motion.

The premise that the Reform Party and the Conservative Party put forward with respect to this issue on Canada pension plan amendments is they want Canadian taxpayers to give tax deductions to individuals and businesses that make CPP contributions, give tax breaks in Canada, yet they want the money invested outside Canada.

I do not understand the rationale for this. Maybe they have not heard of the Hang Seng or Tokyo or some of the other foreign markets that seem to be in a little turmoil.

It seems to me if tax breaks are going to be given in Canada for deductions with respect to pension plans, then maybe the money should be invested in Canada to support the businesses that are hiring people and building our country. I do not understand this.

However, the Reform and the Conservatives talk about back to the future. They are winding the clock back to 1897, 100 years back to the future when it was archaic. I think it is outrageous what they are proposing.

Let us just clarify this one more time. The Conservative Party is the party of Brian Mulroney and Grant Devine and the harem that is now in jail. We have the Reform Party which is the party of Grant Devine and Brian Mulroney. They want to support tax expenditures in this country to invest outside our country for their friends. Who are their friends?

[An hon. member]

Call them the reverse party.

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

We know who their friends are. Their friends are people like Conrad Black. My colleague across the floor from the Liberal Party says that the Reform Party should be called the reverse party. That is probably a suggestion others have as well. Others suggest that maybe it is the reformatories, we do not know. There are many things people use to refer to these individuals and their parties because they keep wanting to reform and change the way Canadians govern themselves, the way we have built our country, the way we have encouraged small business to build up this country from the grassroots.

Reformers are like ostriches with their heads in the sand who say that they are close to the grassroots. The problem is they are buried in the sand and do not understand what grassroots is all about. If you ask anybody in this country if we should give tax deductions to Canadians to invest outside our country they will say “I don't think so”. If we are going to give tax deductions, we would rather give them to Canadians to build our economy, to reinvest in our communities, to reinvest in our small businesses.

I am puzzled as to why the Reformers are proposing this. The only conclusion is they are very supportive of these individuals who have lots of money. My advice to them is that if they want to invest outside of Canada, they should take their own money out of their own pockets, out of their own farms and businesses if they have them and go and invest in Fukuoka, Japan or in Kumamoto, Japan or in Kuala Lumpur, Malaysia or go and invest in Indonesia. There are some good gold stocks in Indonesia they could probably invest in. I do not happen to have any because I do not do that sort of thing. I have problems enough, as most Canadians do, investing in things they know, never mind in countries they have never heard of before.

We must look at this proposal by the reformatories and defeat it as quickly as possible.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I want to add a couple of points with regard to this report stage motion which deals with restriction on foreign investment. Currently investments are restricted to 20% foreign content. That rule applies to other pension plans. It is the same rule that applies to personal RRSPs. As the previous speaker said, these are all instruments or vehicles under which Canadians get tax consideration for having made those investments.

The rhetorical question to ask is should the Canada pension plan investment fund have different rules or latitude from that extended to other investors providing for their retirement through registered pension plans or RRSPs. I have some concerns that the differential may lead to some adverse consequences and some challenges simply because the rules are not consistently applied in Canada.

The issue of the borrowing requirements of Canada has to be taken into account in view of the fact that the Government of Canada is not borrowing anymore. Although the deficit is not totally eliminated at this time, the non-cash charges mean the government is in a position where it is not a player in the market. It does not have an appetite for new capital at this time other than for debt that is maturing and has to be rolled over.

There are some dynamics that occur in the marketplace. Although Reform has indicated Canada is only 3% of capital markets, it is still a substantial marketplace in which there is broad latitude to invest.

It would appear to me that nobody in this House can support this motion. I will check it. Motion No. 2 basically states that clause 37 be deleted. Clause 37 is the clause that states that the investment shall be subject to the same rules that are applied to RRSPs.

It appears to me that if the clause is deleted so that the 20% rule does not apply, in the absence of anything else, that means there would be unrestricted foreign investment. I do not know how anybody in this House could leave this bill in the shape where the investors of the funds of Canadians, the Canada pension plan, could invest anywhere they wanted, totally outside of Canada. I will check that. If that is the fact, I doubt there is anybody in this House who can support Motion No. 2.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I have just a few words to say in response to what the hon. member for Regina—Lumsden—Lake Centre was saying.

He made some references to Reform and some of them were a little unkind. I want him to know that as a fellow hon. member I respect him anyway. I hope he learns to clean up his thinking. That will then clean up his speaking.

I would like to say a few words about this whole general concept. There is this anti anything outside Canada bias by some people. Yet we find, for example, the Liberal government at a snap of a finger will lend $1.5 billion to China to finance a nuclear reactor, a country which has not signed on to any nuclear non-proliferation agreement, a country which does not comply with environmental standards, a country which we presume will maybe some time pay back this $1.5 billion by goods it produces or whatever. We hope that is true. The government is thinking it can do that with taxpayer money.

If we are going to say we do not want to do that, that we are going to do everything inside Canada only, I think we will entirely loose our trade. Very frankly one of our strongest trading partners is also one of our strongest economic partners, the United States. If we are able to invest some of our retirement money in the United States, it has to be at least as secure as the money invested in Canada in most instances. It seems to me rather arbitrary to say that we should not do this.

There is another aspect to this that is very important. There is not a gift or a payment by other taxpayers when someone puts money into an RRSP. The same thing is true when we invest in the Canada pension plan fund. The fact is if some of that money is invested from outside the country, it comes back with a return. According to the rules on both Canada pension and RRSP that money is then taxable on receipt.

Why on earth would we say we do not want any American money in Canada? If we can take $100 and have it bring back another $100 because it has been invested there for a number of years at a good interest rate, it brings $100 into this country from an international market that was not here before. It is now going to be taxed at regular tax rates. So it not only adds to the wealth of the country but it also produces tax revenue for the government at the time of retirement, as all RRSPs do.

The member from the NDP has some really cute statements. I like that one about Reform getting at the grassroots. He had it wrong about the sand part and the head. We do want to listen to the people. We want to do what is best for them. He is cute in that regard, but I really think he should start thinking a little more globally, a little more laterally, think a little more beyond a very narrow focus that the NDP seems to be stuck in. That has kept it at the low level of public support it has enjoyed over the last 50 years.

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

Mr. Speaker, I just want to make a couple of points on this motion and get some facts on the record.

Canadian pension funds and individuals saving through RRSPs can invest up to 20% of their assets abroad. It is a statement and a fact that I think most Canadians are aware of.

It should also be said that this 20% is a significant amount of international diversification and additional international exposure can also be gained by investing in Canadian companies with international operations. However, the 20% foreign property rule also ensures that a significant portion of tax assisted savings is invested in Canada.

We should also point out the fact that in recent days international markets have not performed well. Present rules are intended to provide a sort of balance for Canadian investors.

It is also important to mention studies by experts like Mr. Slater who stated that Canada's capital markets could absorb the increase in the CPP fund. The fact is that our capital market is quite healthy. It does provide substantial rates of return. Let us also remember that the changes to C-2 are increasing the rates of return to the Canada pension plan. So we are all moving in the same direction.

I also want to point out a statement that was made by the hon. member from the Reform Party who said that it was important to listen to the people because they are connected to the grassroots. I am sure every member of this House takes the opportunity of listening to constituents and trying to reflect their concerns here in this House of Commons.

It is also important to note that Canadians have indicated through public consultations that they want the CPP fund to be invested like other pension funds. Today in Canada pension funds are allowed to invest up to 20% of their assets in foreign securities. The CPP will follow the same limitation. It does allow for diversification to enhance returns but it also ensures that CPP funds are invested predominantly in Canada.

As was stated earlier, the intent of the government is to ensure the financial stability of this plan. It is crucial that the changes that we have been making to the CPP provide for that financial sustainability. With this particular motion we would be treating the Canada pension plan in isolation. Making changes to the Canada pension plan or if we did make changes to other tax assisted programs, it would not be fair.

What we are saying is that the CPP fund will follow the same limitations. If the foreign property rule were to change at some point in the future then we would see the Canada pension plan reflect that change. Therefore, if in the future the 20% foreign property rule were eliminated, although no one is saying it will be eliminated and we are not advocating its elimination, then the Canada pension plan fund, as requested by Canadians through prior consultations, would be treated like other pension plans in Canada.

What C-2 does is treat the Canada pension plan like other pension plans throughout this country.

I believe it is important to make those points. Other members have made similar points. I would certainly encourage members of this House not to support Motion No. 2 for the reasons stated.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The question on Motion No. 2 is deemed to have been put, a division deemed demanded and deferred pursuant to special order made earlier this day.

The next question is on Group No. 3, Motion No. 8.

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

moved:

Motion No. 8

That Bill C-2, in Clause 53, be amended by adding after line 15 on page 28 the following:

“(1.1) A regulation made under paragraph (1)(b) must reflect the objects of the Board as set out in section 5.”

Mr. Speaker, this is another amendment to Bill C-2. It is still time for government members to see the light and to support amendments that will make the Canada pension plan more fair, more transparent, more performing and more accountable to those who contribute to it. I hope government members will support this amendment.

This is an addition to clause 53 of the bill, which deals with the regulations that the governor in council may make.

In its current form, clause 53 basically provides that the governor in council may make regulations: (a) specifying which provisions of the Pension Benefits Standards Act of 1985 apply to the board; (b) respecting the investments the board may make; (c) prescribing anything that the act provides.

Clause 53 also deals with the coming into effect of regulations. We are pleased to see that a regulation has no force or effect until it has been approved by at least two thirds of the participating provinces having in total not less than two thirds of the population.

The purpose of our proposed amendment to clause 53 is to require the governor in council to take into account the objects of the board, as set out in clause 5 of the bill.

Allow me to read clause 5 so that hon. members can understand the scope of the obligation that we want to impose on the governor in council:

1. The objects of the Board are a ) to manage any amounts that are transferred to it under section 111 of the Canada Pension Plan in the best interests of the contributors and beneficiaries under that Act; and b ) to invest its assets with a view to achieving a maximum rate of return, without undue risk of loss, having regard to the factors that may affect the funding of the Canada Pension Plan and the ability of the Canada Pension Plan to meet its financial obligations.

Therefore, by passing our amendment the governor in council would be bound by this mission as it is detailed in clause 5. This would ensure that after the three year phase-in period the government exercises its ability to restrict investment under clause 53(1)(b) in a manner that reflects the best interest of the beneficiaries.

This would be done by requiring that such regulations be made with a view to ensuring that the plan's investment advisers are subject to the prudent person rule. To take effect, any regulation that is not passed with a view to those objectives would have to be approved by two-thirds of the participating provinces with two-thirds of the population.

Bill C-2 provides the government with the ability to set through regulations the kinds of investments the board may make. This may preclude the board from making investments that are in the best interests of the beneficiaries, for example, through limits on foreign investments or the government could choose to simply list certain sectors at the expense of others.

We want to ensure that this plan operates in the best interest of the beneficiaries free from any political, economic and social objectives.

[Pierre De Savoye, Bloc, Portneuf, QC]

Mr. Speaker, I would like to comment on what our colleague from the Conservative Party has just said.

First, we know that with this bill, workers and companies will have to contribute more to a fund so that when people go on retirement, they will receive an amount that may not be very high but that will nevertheless be essential.

We know also that if we do not act now, it will not be long before the Canada pension plan can no longer meet its obligations. That is why, I repeat, the Bloc Quebecois supports this bill.

But also, when money is taken from employers and employees, it is also taken from the economy in which they are living, and these are considerable amounts that workers or employers will not be able to recycle in the economic system through the purchase of goods and services. It is therefore essential that the money that will be taken and given to an agency responsible for reinvesting it be invested in a way that allows these communities to continue to rely on the economic activity they require to survive.

However, if I heard correctly, the motion that has just been presented would allow and would require the investment board to reinvest without taking into consideration the social aspects or the economic impacts in the community. I believe that in fact this agency should have a social conscience.

I would like to mention in this respect the case of Quebec and its Caisse de dépôt et placement which has in fact allowed the Government of Quebec to ensure greater economic returns for Quebec in keeping with the requirements of Quebec society. It seems to me that the federal government would be well advised to consider what is being done in Quebec in this area and to do the same.

That is in fact my interpretation of what it wants to do with the bill we are considering. It seems to me that any amendment that would not limit the board's ability to make investments through which Canadians can obtain a better return not only when they retire but also now when they are contributing is a step in the right direction. Any amendment that would go against that objective would be a step in the wrong direction.

I think it is also important to note that for an employer or an employee who will see next year an increase in his or her contributions to the Canada pension plan, this will have an impact in terms of competitiveness. I was pleased when the Minister of Human Resources Development announced a reduction in employment insurance contributions. I consider that this also is a step in the right direction, because it will allow in fact to maintain payroll taxes and other deductions at an acceptable level.

However, the Minister of Human Resources Development did not bother unfortunately to consider the retroactive effect of an increase in contributions for the current year, and this will definitely have an impact on the personal disposable income of each worker and on the production and operating costs of every business.

In economic terms, this has a significant adverse effect. And in the future, as the contribution rate slowly increases, it will be important to reassure our business community, our businesses and their employees that adjustments to employment insurance premiums or other measures will indeed counterbalance the drain on corporate or personal finances caused by contributions to the Canada pension plan.

This is a matter of economic balance. We cannot dip into a lake indefinitely and hope it will keep filling up by itself. It will need water sooner or later. He who draws water out of a lake has to ensure that a soothing rain falls on the area, other wise it will dry up. This is a simple principle, and the example was an obvious one, but that is reality. Businesses and employees cannot keep on paying indefinitely.

At one point, the economic balance will be destroyed and this will have repercussions on our society, as it will slow the economy down, with fewer businesses employing fewer people, who will produce fewer goods that fewer consumers will be able to buy. That is not what Bill C-2 seeks to do. However, it would be important that the government side give the business community and our workers some indication that it is aware of this and will take appropriate measures to protect the sound balance I just mentioned.

In closing, allow me to say that, in Quebec, we are 35 years ahead on this pension plan issue. We have a pension plan in Quebec. Quebec's experience was a good experience, and I only hope that our Canadian friends make the most of it.

[Rick Laliberte, NDP, Churchill River, SK]

Mr. Speaker, I would like to speak against the amendment which basically targets the investments of the board on a high return on international markets and possibly domestic markets, but there is no consciousness of Canadian here.

Our responsibility is to invest our pensions for future generations. It is a social cycle where the youth provide a means for the elderly, the underprivileged and the disabled. It is a human cycle. That is our purpose.

When we have this huge fund for investment purposes we should be consciously aware of Canadian content and Canadian needs. At sometime in the future, beside the investment requirement, our targets could be set on the highest rate of return on investment and disregard the environmental needs or the economic needs of a region of Canada. Instead it could be sent offshore into an Asian region where the return could be 20%. It could be a nice, juicy return. The money could be invested in another region which promises a higher return.

Here we have a chance to invest it in an underprivileged region. It would give a certain workforce in the region more wages in their pockets to contribute to the investment fund. It is a cycle. The more we work, the more the investment fund will work.

The concept of Canadians being Canadian is what is being tested by the amendment. We have to think of the Canadian picture and the Canadian future.

The investment future is a means of our purchasing the economic engine of the future. We can invest it strategically. Hopefully the investment board will do that. If it is restricted to investing only in higher returns, our Canadian concept and our Canadian vision will be dimmed.

I speak against the amendment and encourage other members to reflect on the Canadian need and the Canadian perspective for the betterment of our future.

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

Mr. Speaker, if any Canadians watching the debate were wondering about the necessity of the amendment, they had only to listen to the Bloc Quebecois and the NDP to be scared right out of their socks.

The amendment would make it necessary for the board and for cabinet, in making regulations respecting how the board invests, to be guided simply and solely by what is in the best interest of contributors and beneficiaries.

This is our retirement we are playing with here. What words do we hear from the socialists? We have to invest “strategically”. We have to have a “social conscience”. I can just see the socialists getting into government, licking their chops over having these billions of dollars to do their wonderful social engineering experiments with. It would be our pensions they would be playing with.

If we do not have an amendment which prevents a future cabinet from indulging in that kind of nonsense, this kind of doctrinaire driven investment, our pension security goes right out the window. We would have all those with noble intentions to save the country or to save this or that industry, having our money to play with. It is bad enough that we are paying so much in taxes for social engineers to dispose of, to waste and to fritter away as they have for years and years. Now they want to use our pension plan.

I hope Canadians watching this debate run, not walk, to their faxes, phones and e-mail machines to say: “For God's sake, members of Parliament, include this amendment and make sure that whatever you do with our pension funds you are guided simply and solely by what is in our best interest and what will get us the best return, secure future pensions, and keep the mitts of social engineers and economic central planners off our pension plans”.

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

Mr. Speaker, I would like to speak to this motion because, frankly, I was rather surprised by the remarks of the Reform Party member before me.

He accuses the other parties in the House of not responsibly studying this bill and yet, in committee, the model proposed by the Reform Party was shown systematically to not necessarily be sufficient for all Canadians and really had no future here.

Today we are considering an amendment to the bill at report stage aimed at ensuring that action the governor in council may decide to take regarding the management of the investment board be in keeping with the mandate of the board.

I think we have to acknowledge that this is an interesting amendment. I do not think the Reform Party said it either, but I find it a bit surprising, at the stage we have reached in considering the bill and the contribution made by all the parties. I think there has to be some sort of balance in the way return is made on investment in the Canada pension plan, like the Quebec pension plan. Under the bill the investment board would be mandated to ensure profitability only.

A limit has been set so that there will be no more than 20% of foreign investments. An earlier demonstration has explained very well why these things are being put into place.

It can also be understood on the other hand that the present draft amendment is not aimed at changing the basis of the bill, but at improving it, as the person moving it sees it. I believe this point of view can be shared, by saying that, yes, the investment board will be given a clear mandate, in other words to seek the best possible economic return. At the same time, however, we want to make sure that the proposed amendment, when the government brings in regulations on this, will be in keeping with the mandate of the investment board.

In this way there is an attempt to avoid excesses, and perhaps a sudden need by the Canadian government to exceed the mandate of the investment board. This can go both ways. It could be a decision by the government to have the capital invested in projects not directly linked with the clear mandate of the investment board, but it could go the other way as well. If we want to respect the statutory scheme, if we wish to ensure that its logic is respected as the bottom line, this amendment must be considered in order.

Would we not end up in a sort of a dead-end situation, an unacceptable impasse, if the government could adopt regulations which would run counter to the objectives of the investment board? I think that, within its general mandate of good government acting in the best interests of society, the government will always have the opportunity to take decisions which strike it being best for the future of its people, but that expanded power must not necessarily be via regulatory channels. It may be a good thing to retain this right, having it operate via measures which require legislation, in order to ensure that things are not done in a sort of underhanded way.

For this reason, the amendment on the table is worthy of consideration and of being judged on its worth. It must be looked at within the general objective of the statutory scheme. That objective is to ensure that the investment board can maximize its outcome and do so with a government which respects that mandate. This is the spirit in which we will support this amendment.

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

Mr. Speaker, Bill C-2 reflects what Canadians have said throughout the consultation process. In fact the motion would eliminate the restrictions that apply to other pension plans in Canada, essentially specific restrictions that are part of the fed-prov agreement.

The regulations which are part of Bill C-2 require applying the appropriate provisions and regulations of the Pension Benefits Standards Act to the new CPP investment board, regulations that in fact state things like the fund could not hold more than 30% of voting shares of a company or that it could not invest more than 10% in the security of a single company.

As joint stewards of the plan and as a result of the fed-prov negotiations and agreements, Bill C-2 will specify the arrangements under which provinces will have access to portions of the new CPP funds the board allocates to bonds.

Essentially the investment the fund makes requires that domestic equity be passive and that it be reviewed after three years. Provinces will have a guarantee of access to a portion of the new funds and thereafter, after three years, their access will reflect a percentage of provincial and municipal bonds held by pension funds in Canada.

That being said and despite the restrictions, the chief actuary still says the fund will receive a 3.8 per cent real rate of return, which is a good rate of return and one that reflects the priorities and the best interest of Canadians.

[The Acting Speaker (Mr. McClelland)]

It being 5.30 o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's order paper.

Canadians

[Gurmant Grewal, Reform, Surrey Central, BC]

moved:

That a legislative committee of this House be instructed to prepare and bring in a bill, in accordance with Standing Order 68(4)( b ), to prevent the reference to and designation of any Canadian or group of Canadians in a hyphenated form, based on race, religion, colour or place of origin.

Mr. Speaker, on behalf of the people of Surrey Central and on behalf of the silent majority in Canada I am pleased to introduce my private member's Motion No. 24 calling for the introduction of legislation which would prevent the reference and designation of any Canadian or group of Canadians in a hyphenated form based on race, religion, colour or place of origin.

I have many reasons and experiences personally in my life which have compelled me to introduce Motion No. 24 concerning hyphenated Canadians, but let me first clear the air. This motion is non-partisan and is put forward with the best interests in mind for the people and the future of our beloved country of Canada.

Canada is a country of immigrants. I respect the diversity of Canada and its cultural mosaic. Our diversity is our asset, not a liability. We do not oppose the multicultural fact of Canada but taxpayer funded official multiculturalism as a Government of Canada objective, that is the commercialization of multiculturalism.

It is time to review our 25 year old expensive and divisive multicultural policy. It needs not only a tune-up but an overhaul. Let us not look 25 years backward. There is no use crying over spilt milk. Let us look beyond our noses. Let us look to the future and believe in the reality and changing dynamics of Canada. Emphasis should be on enhancing the equality of Canadians.

Most people view themselves as Canadians, yet the government has been collecting information about their ancestral origins and referring to them accordingly. The census is becoming more and more precarious. In the 1991 census Stats Canada asked the question “to which ethnic or cultural group did your ancestors belong?” It listed 15 ethnic or cultural groups as choices but not Canadian as a group.

The current ministry of multiculturalism has three goals: fostering Canadian identity and belonging, assisting with integration, and creating social justice by eliminating the barriers to equality. None of these goals can be achieved under the present federal multiculturalism policy by encouraging hyphenation of Canadians.

Hyphenation of Canadians weakens and dilutes the Canadian identity and belonging. Hyphenation inhibits integration and rather assists segregation of our population. Hyphenation of Canadians fosters barriers to equality rather than eliminating those barriers. Hyphenation does more harm than good. In fact, we see that the government is going in a completely opposite direction, 180° from the objective we want to achieve.

Rather than uniting Canada and sustaining our multicultural reality, we are going completely in the opposite direction on this. The current policy is promoting diversity at the expense of unity and equality. As parliamentarians it is our obligation to ensure our laws and policies achieve the desired outcome.

We have many differences among all of us. Two individuals are different unless they are identical twins or perhaps if they are cloned. A person could be, for example, a woman and at the same time a mother. She could be fat, short, with a particular ethnicity, language, colour, religion, et cetera. That is okay. We respect that.

Like everyone else, I am equally proud of my ethnicity, my culture and my religion. Like everyone else, I have chosen Canada as my home. This is the future of my children and my family. This is where our hopes and opportunities are and I am proud of that, like everyone else. Canada has been generous to me and my family. I and my family are proud to hold a Canadian passport. Like everyone else, I am proud to be a Canadian. But the hyphen still interferes with my pride.

This government encourages new Canadians to be called something like Indo Canadians, Chinese Canadians, Italian Canadians, not just Canadians.

The other day on TV the Secretary of State for Multiculturalism and the Status of Women said she is proud to be a Trinidad Canadian. She is a Canadian government minister. When will she call herself a proud Canadian? When will she call a Canadian a Canadian? When will she have a Canada first attitude? Those are the questions many Canadians are asking. But just as in our question period in the House, they do not get answers.

It is time to define Canadian culture for the 21st century. During this century we have seen enough evidence in many African and Middle Eastern countries of the consequences of dividing populations based on ethnicity, race, religion or tribe. It is never too late. We can still learn lessons to keep us united and strong, rather than divided and segregated, particularly at a time when we are working hard to heal fractious wounds and to keep Canada united.

Hyphenation and multicultural policies promote too much diversity at the expense of unity and equality. Reminding us of our different origins is less useful in building a unified country than emphasizing the things we have in common.

We have too many differences based on race, religion, culture, ethnicity, et cetera, but we have only one common similarity, we are all Canadians.

The children in our schools have differences, but we call them students. The men and women in the army have differences, but we call them soldiers. Citizens in our country have differences, but why should we not call ourselves Canadians? In fact, the definition of multiculturalism should be a single society united by shared laws, values, future aspirations and responsibilities.

Let individuals and groups have full freedom to promote their own culture, their own religions, heritage, et cetera. If the truth be told, current multiculturalism is actually multifacialism. Hyphenation brands us like commodities, but we are all equal human beings. It creates different tiers of Canadians.

Are there some Canadians who are more Canadian than others? Every Canadian has the right to be 100% Canadian and not a sub-Canadian.

How foolish it sounds when someone says even Canadians voted for Chinese Canadians or Indo Canadians or Italian Canadians.

This government's practices and policies unnecessarily fuel division, frictions, jealousies and prevent and discourage integration of various communities and, in fact, are a precursor to discrimination.

Canadians continue to search with increasing urgency for ways to cross lines of colour, culture and religion. Yet the more we criss-cross these lines which establish our identity, the more it becomes evident that the very lines that define us also confine us.

What can we do? Surrendering a hyphen is one thing. That tiny little splash of ink called a hyphen unites words but acts as a wedge to distance words and keep them apart. The best way to draw a line is simply to withdraw that line. Sooner or later we have to get rid of the stigma of hyphenated Canadianism, otherwise our children, our grandchildren and their grandchildren will continue to be identified with prefixes like Indo, Chinese, Italian, French, English and even Trinidad when they are described as Canadians. Canadians in other countries are not called Canado Indian. They are not called Canado Chinese, Canado French or Canado Italian.

How about true origins in history? Many may be Aryan before being Chinese or Indian. Should we call them Aryan Chinese Canadians? How about those with mixed ethnicity like Ukranian Polish French Italian Canadian? What should we call them? It is possible in our country to have brothers and sisters in one family who could have been born in Trinidad, India and Canada, but they would still be a family of Canadians. It is as simple as that.

The essence of the Canadian bill of rights and the charter of rights and freedoms is to uphold every individual as equal before and under the law and free from discrimination. We should sensitize Canadians to each other and stress not the differences that divide us but the similarities that unite us.

Hyphenation and promotion of cultural diversity by government encourages ethnic differences that lead immigrants to adopt a psychology of separation from mainstream culture. It isolates ethnic racial groups in distinct enclaves by fostering an inward focus mentality that drives a wedge between Canadian of different backgrounds. Let us not create multicultural tensions or invoke jealousies but foster an atmosphere of harmony and love.

Motion No. 24 has raised more than just a few eyebrows. It has generated an outpouring of support from across Canada to my office. From the feedback I have received I know I am not alone. There are many more Canadians across this great land who feel the same way. One Canadian even sent me a five dollar bill to have a drink in his name.

My office has received many telephone calls, letters and e-mail messages. People have even stopped me on the street to tell me of their support of my efforts to draw attention to those problems caused by the use of hyphenation.

I have so many quotes to share but time does not permit me. I wanted to quote from about 60 letters.

We must all work together to pursue equality and unity but it is vital that government lead the way. It will certainly bridge the gap. It will be a step forward toward the elimination of racial barriers. Let us not be partisan on this significant issue. Let us embrace what is common among all of us. Let us promote, encourage and put Canada first. Let us put our effort into keeping Canada not only united but together and strong. Let us not create multicultural tensions or invoke jealousy but foster an atmosphere of harmony and love. Let us all be 100% Canadians and not sub-Canadians. Let us start thinking about and defining Canadian culture.

In all honesty, I hoped to bridge the political divide and gain the consensus from all sides of this House to address what I and many other Canadians believe to be a problem, including many members from various parties whom I talked to and including the lonely independent member of this House.

Let us work together, recognize the merit of motion 24. This is what the silent Canadian majority want. Motion 24, if implemented by the government, will certainly bridge the gap. It will be a step forward toward eliminating racial barriers. It is everyone's responsibility to find solutions, but it is important that the government lead the way.

Let us do what is in the best interests of all Canadians and Canada. I urge all the hon. members, including you Mr. Speaker, not to look to your political stripes but to look into your own heart and stand up united in support of motion 24.

[Hedy Fry, Liberal, Secretary of State (Multiculturalism)(Status of Women)]

Mr. Speaker, may I say from the outset that although I consider this motion misguided, I am absolutely sure that its impetus was my colleague's sincere love for Canada and his desire to ensure that Canada remains whole and united.

Having said that I want you to know, Mr. Speaker, that my basic objection to this motion, since there is no official policy about calling oneself a hyphenated Canadian, is there is no law that designates that one must do that. The wording of this motion seeks to prevent freedom of speech. It seeks to prevent the freedom of a person to define themselves in any way that they choose.

I share my colleague's opinion regarding respect, but I urge him to take a closer look at Canada. Our country is not one-dimensional. Our collective identity is complex, as are the individuals that make it up.

Our geography is one of the most diverse there is, our history is a mosaic of events that shaped our country, and our population is made up of representatives of every culture in the world. These factors enrich our identity.

Do we deny the diversity of our landscape? Do we deny the many events that mark our progress in national maturity? Should we deny the reality of our geography, of our regions? Should we deny the reality of cultural diversity? Of course not. Even my colleague agrees with me on this. He freely admits that he is not opposed to multiculturalism. This certainly indicates good sense because we are a multicultural country whether we like it or not.

It makes it all the more difficult to understand the motion we are debating today. I can only believe that my colleague does not fully understand Canada's multicultural policy or what changes it has wrought in Canadian society.

For example, had it not been for Canada's multicultural policy and its supporting program, federal government initiatives, it is questionable whether my colleague would be sitting in the House today as a member of Parliament exercising his right to debate the issue of multiculturalism. This House reflects to an unprecedented degree the cultural diversity that is and has been for a long, long time a primary characteristic of our society.

Here is the figure. Forty-one MPs in this House are first generation Canadians. This is what the multiculturalism policy is about, about equality, about justice, about representation and about the right to define ourselves in any way we choose. It is not about hyphenation.

Earlier I referred to this motion as misguided. That is at its best. At its worst it is an affront to everything Canada stands for in the area of human rights. I remind you, Mr. Speaker, next year Canada will be commemorating the 50th Anniversary of the United Nations' Declaration of Human Rights which was drafted by a Canadian.

My colleague wanted to speak on behalf of all Canadians, as though we all shared his opinion about our individual identity.

With all due respect, I do not think this is the case. Canadians in all communities are proud of their heritage and take advantage of the freedom available to them to express this pride. In my opinion, this is proof that Canada is a country that respects individual rights and freedom of expression. One does not have to deny one's background to be welcome in Canada.

I consider myself completely Canadian, but I do not hesitate to admit that my origins are in Trinidad. As a Canadian, I can take advantage of the freedoms that are allowed me to express my opinions and to present myself as the person that I am. It is my right to say who I am. I can say I am a woman, a doctor, a Catholic or a member of Parliament.

I also have the right, if I wish, to say that I was born in Trinidad because I am a complex being. I am made up of many different things that make me who I am. At any time in my own life and in my life cycle I may need to refer to the different aspects of my person, my character and the things that have made me to this day who I am.

Canada's multiculturalism policy, born out of our sense of justice and fair play, encourages Canadians to acknowledge, understand, accept and respect the reality of our cultural diversity knowing that it will not be a means of discrimination. It will not prevent them from participating fully in every single aspect of Canadian economic, social, political and cultural life.

It is in fact the ability of Canadians to refer to themselves according to the colour of their skin, their sexual orientation and their gender in whatever way they choose to feel secure that who they are in fact is respected or are respected by the people of this country. We do not have to become one mass of people, one amorphous mass, one cloned group where we all have to be exactly like everyone else to be accepted.

It does just the opposite. This policy is there to assist all Canadians to become full participants in Canadian society with the dignity and self-confidence that comes from personal pride. I say that an element of personal pride for many people is their family heritage.

Ask any Canadian of Scottish background how he or she feels on hearing a pipe band strike up—or should I have said Scottish Canadian before it is too late if my hon. colleague has his way.

The multiculturalism policy is about identity, self-knowledge, personal pride and self-respect. These are qualities that are important not only to every Canadian but to every individual human being. Canadians who are confident about themselves and what they can do and offer to Canada are infinitely more valuable to our society than Canadians who must wipe the slate of their personal history completely clean in order to appeal to some artificial ideal of what it is to be a Canadian.

The perfect Canadian is one who I can say, I or my father or my grandmother chose to come to this country and make it my home. I am proud of that. I know who I am, I know what I can do and I am willing to contribute my share to keeping Canada the great country that it is without giving myself away and without having to give up who I am.

This is what multiculturalism policy is all about. It ensures that Canadians can live their lives in respect without fear that anything that they are, their colour, their gender, their sexual orientation or their religion, will remove them from participating.

My colleague's motion is obviously misguided. However, it is also the thin end of the wedge. I have to ask myself, once I and every other Canadian are forbidden to refer to ourselves according to our roots or our origins, what is the next step? Do I tear up my birth certificate which shows that I was born in Trinidad? Will I have to find some way to change the colour of my skin because it is certainly going to define me regardless of what I call myself?

A long time ago, Sir John A. Macdonald tried to form a country that was distinct from our people to the south, the United States. We have striven to have a country that is a melting pot and not an assimilated mass of people who are all seeking to be cloned and to be alike.

Should neither of these views carry any weight, the House might want to consider a third view: that this motion is a bad joke and in bad taste. On those grounds alone it should be dismissed forthwith.