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House of Commons Hansard #44 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was cpp.

Topics

Business Of The HouseOral Question Period

3 p.m.

The Speaker

I have notice of two points of privilege. I will hear those in just one moment.

Ways And MeansOral Question Period

3 p.m.

Willowdale Ontario

Liberal

Jim Peterson LiberalSecretary of State (International Financial Institutions)

Mr. Speaker, pursuant to Standing Order 83(1), I wish to table a notice of a ways and means motion to amend the Excise Tax Act, as well as an explanatory note. I ask that an order of the day be designated for consideration of the motion.

PrivilegeOral Question Period

3 p.m.

Progressive Conservative

Norman E. Doyle Progressive Conservative St. John's East, NL

Mr. Speaker, I rise today on a question of privilege. I have sent you the required notice of my intention to do so today. I have also informed the House leader of the Reform Party.

Earlier today during debate on Bill C-2, my leader was interrupted by out of order remarks by the member for Okanagan—Shuswap. Following an admonition by the Chair, the member failed to come to order and left his seat making threatening gestures inviting the member for Sherbrooke to engage in a brawl.

The member had to be restrained by the member for Prince George—Bulkley Valley who is his colleague.

With great regret, I feel this must be formally brought to the attention of the Chair. It is not the first time that the member has engaged in this kind of activity. On February 4, 1997 the member for Okanagan—Shuswap created a spectacle in this Chamber when he used threatening gestures and profane language to another member.

Mr. Speaker, it clearly constitutes disorderly conduct, but it also constitutes contempt of the entire House. Threats against members and intimidation are well-known breaches of privilege and they have been found to be in contempt by the House. It is conduct which is clearly meant to interfere with the rights of members to speak freely and within the rules of the House.

The member for Okanagan—Shuswap, not only does he owe the House an apology, but it is time that the House was given the opportunity to judge his continued misconduct. It is not a matter which should be dealt with solely by you, Sir. The House as well should be permitted to judge the matter in the light of parliamentary law on contempt for the House.

Should you find, Your Honour, that a prima facie case of privilege is clear, I would be prepared to move a motion referring the member's conduct to the standing committee.

PrivilegeOral Question Period

3:05 p.m.

The Speaker

Let us hear what the House leader for the opposition has to say.

PrivilegeOral Question Period

3:05 p.m.

Reform

Randy White Reform Langley—Abbotsford, BC

Mr. Speaker, I am not sure whether this is a point of privilege. I suppose a member of this House if he is particularly offended by something should look at what happens if the member himself introduces some bad language in the House.

I think to try to get some media attention for the leader of the Conservatives and for himself is inappropriate in this House in this manner by making such accusations on our member.

PrivilegeOral Question Period

3:05 p.m.

The Speaker

The hon. member in question is here in the House now. His name has been mentioned. Perhaps he could clarify the situation.

PrivilegeOral Question Period

3:05 p.m.

Reform

Darrel Stinson Reform Okanagan—Shuswap, BC

Mr. Speaker, I was not in my chair at the time this took place. There were some words exchanged. I left the seat over there to come over here.

I cannot raise a point of order until I sit in my proper seat. Is that not the rule of the House? So I came across here to raise a point of order on what was being said because the language that was being used was not acceptable in this House. This is when it all happened, Mr. Speaker.

PrivilegeOral Question Period

3:05 p.m.

The Speaker

My colleagues, from what I have heard now I am not sure whether we have a point of privilege. Surely there was some disorder in the House. I spoke very briefly with my colleague who was in the Chair at the time.

It is always regrettable when anything like this happens in the House. We are getting close to the end of the session. Sometimes in the heat of debate words are exchanged. I plead with you that this type of conduct among our members is not acceptable for us here in the House of Commons. I would hope that all hon. members would take this to heart.

I would encourage that this type of thing not happen again in the House of Commons, and surely not happen at any time in the midst of debate.

My colleagues, what I will undertake to do is I will look at the blues and I will look at what was on the tape. If it is necessary, I will come back to the House. But please take my admonition to heart for all of you that this type of thing should never occur again in the House. This point is closed.

I am going to go to a question of privilege. I had notice from the hon. member for Sarnia—Lambton.

PrivilegeOral Question Period

3:10 p.m.

Liberal

Roger Gallaway Liberal Sarnia—Lambton, ON

Mr. Speaker, I rise on a question of privilege generally relating to Standing Order 94.

This morning I received at my office a notice with respect to a private members' draw that will be held tomorrow, December 5. A draw was held on November 25 at which time I believe six bills and three motions were drawn.

As members are aware, the normal way of doing this in the House is to allow the private members items on the order of precedence to decrease to 15 at which time a draw is held. A draw was held a week ago and the committee is within the 10-day time period as specified by the standing orders to determine which bills and motions will be votable and which bills and motions will not be votable.

In response to an inquiry I made to the Private Members' Business Office this morning, I was advised that there was an irregularity with respect to motions and for that reason it was having another draw. My point is that if there was an irregularity with respect to motions, then perhaps the correct measure would fall with respect to the draw of motions. I am not certain what that irregularity is.

There are presently four votable bills listed on the Order Paper. The committee is seized with the consideration of six others at the moment. A decision for that must be made by midnight next Monday. By adding three more bills to the order, those people who will be drawn tomorrow with bills, if one of the six is selected from the draw of November 25, it will preclude those who will be drawn tomorrow, December 5, from ever having a votable bill. Alternatively, it will change the odds for those who had a bill drawn on November 25 in terms of going from one to six to one to nine.

Having had a bill drawn on November 25 I would like to know if the odds have changed for me.

PrivilegeOral Question Period

3:10 p.m.

The Speaker

My colleague, I do not know that you have a question of privilege but you surely have a point of grievance. I will look into that and I will get back to the House before noon tomorrow. I will let the House know what my findings are at that time.

I have a point of order from the hon. member for Dewdney—Alouette.

Points Of OrderOral Question Period

December 4th, 1997 / 3:10 p.m.

Reform

Grant McNally Reform Dewdney—Alouette, BC

Mr. Speaker, my point of order arises from a question I asked in the House yesterday in regard to Mr. Ken Vollman, the vice-chair of the NEB. Upon further examination it has been determined that Mr. Vollman's expenditures were within appropriate guidelines. I called Mr. Vollman today and apologized to him for any damage caused to his good reputation by my comments in this House yesterday.

Mr. Vollman did indicate that I should mention in this House the way the information was disclosed so that this does not happen again in the spending of public moneys. Again I apologize to the House and to Mr. Vollman.

Points Of OrderOral Question Period

3:10 p.m.

Wascana Saskatchewan

Liberal

Ralph Goodale LiberalMinister of Natural Resources and Minister responsible for the Canadian Wheat Board

Mr. Speaker, the question from yesterday to which the hon. gentleman has just referred was a question directed to me in the House.

On that same point of order, let me say that I am very pleased to hear the member's apology in respect of Mr. Vollman. I am certain that Mr. Vollman is even more pleased that the record has been corrected and that there is no slur against his character or his reputation. I thank the hon. gentleman for having the courage to recant on this point. I hope that all hon. members will be very cautious when dealing with the reputations of people in this House.

The House resumed consideration of the motion that 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, be read the third time and passed.

Canada Pension Plan Investment Board ActGovernment Orders

3:15 p.m.

Hillsborough P.E.I.

Liberal

George Proud LiberalParliamentary Secretary to Minister of Veterans Affairs

Mr. Speaker, I am pleased to offer my comments on Bill C-2 as we take part in this very colourful and hotly debated third reading today.

In my remarks I want to emphasize how we are earning the confidence of Canadians in the Canada pension plan that will be there for them. I want to talk about how this bill is a comprehensive package that will maintain the security of our citizens.

First, it should be made clear to all of us that the Canada pension plan is a defining feature of the quality of life in Canada. In the three decades since the plan was introduced by the Liberal government of the day, the Canada pension plan has become firmly established as a the cornerstone of our social policy.

This is not just some monument to enlightened thinking in our past. It is a key part of the planning for tomorrow's retirement for virtually all Canadians outside of Quebec and with its Quebec counterpart provides a very uniform portable protection from coast to coast.

In the last few years, however, concerns have been expressed about the viability of the Canada pension plan. A leading magazine, Maclean's , put this in sharp perspective a few months ago. It polled Canadians and found that two-thirds of our fellow citizens were not confident that the Canada pension plan would be around when they needed it.

Canadians heard statements like the one made by the Canada pension plan's chief actuary and they were concerned. I believe we all know that he projected that at current ratios of contributions to benefits paid, the Canada pension plan would be exhausted by the year 2015. Their concerns were rooted in more than finances.

Expert analysis showed us that the rules of the plan had to be updated to reflect the realities of today's world as well as tomorrow's. The facts were clear, the need for action obvious.

This government has acted to preserve the Canada pension plan for all Canadians. The changes to the plan that are before this House in Bill C-2 are not the product of tinkering in Ottawa. They are the result of a long and wide-ranging process of public consultation that began during our last term in office. They represent a complete and balanced package.

This process of consultation was jointly conducted with our counterparts in the provincial and territorial governments and professionals in Canada's actuarial and insurance professions. The consultations reached out to the representatives of social planning organizations, seniors, youth and persons with disabilities as well as interested private individuals.

In short, these consultations involved a large number of Canadians who had views and concerns about building a stronger Canada pension plan. One of the clearest messages that Canada's governments heard during the consultations was that Canadians want and need the Canada pension plan.

To hear some people talk, you would swear that the Canada pension plan was an anachronism, a throwback to the sixties. Those people should get out of their ivory towers and listen to Canadians. People on the streets of this country would tell them something quite different.

Canadians told us in no uncertain terms to preserve the Canada pension plan, change it if necessary, but preserve it. We heard them. We listened and the result is this Bill C-2.

This bill is more than an effort to address today's valid concerns. It launches a plan for the future. Bill C-2 recognizes how different our economy and our society have become since the year when the plan began. It makes the changes necessary to sustain the Canada pension plan.

Three-quarters of those changes are on the financing side of the ledger. They respond to the gap between the contribution rates and the benefit payouts. In fact, I am sure that members recall that the chief actuary in the Canada pension plan projected that contribution rates would have to increase to 14.2% of income covered by the plan by the year 2030, that is unless changes were made.

This government and our provincial partners agreed that 14.2% of income was too high. We knew that it would be more than Canadians would be willing to pay. Therefore, we went to work.

We looked at what experts and at what ordinary citizens alike told us as we set out to rebalance the relationship between the Canada pension plan income and expenses.

One key part of the response is addressed in Bill C-2 through the proposals that would increase contribution rates over a seven-year period.

In this way, contributions will increase each year and reach 9.9% of covered income by the year 2003. Then, we will hold the contributions at this rate indefinitely.

Some hon. members have been quick to leap to their feet with shouts of tax grab. The reality is quite different, and I want to set them straight.

Canada pension plan contributions are not a tax. They are contributions toward pensions. They are an investment by Canadians in their own future. That is hardly a tax. It is planning prudently for tomorrow.

Let me add more information on this point. Canada pension plan contributions will not go into the government's general revenues. Canada pension plan contributions will not go to anything other than the Canada pension plan.

Let me make another point to show how hollow tax grab claims are. Are contributions to company plans taxes? Of course not. In fact, both the Canada pension plan premiums and company pension plan contributions reduce the taxes we pay.

The simple fact is this. Both are investments in the future and I think it is important that Canadians understand that. Bill C-2 is very, very clear. These contributions will not get mixed into some government coffers. They will become part of a separate investment fund. An independent body will manage and will invest this money on behalf of a plan and its contributors.

Those investments will go into a diversified securities portfolio and should earn higher rates of return than the status quo. That improved investment performance should help us lower the long term contribution rate by providing more income to help pay the benefits for future generations.

Opposition parties in this House have consistently avoided providing a comprehensive alternative. Each is unable to say how they would meet our obligations to people receiving benefits today, those who expect to do so soon and those who have many years to go in their working lives.

This government and our counterparts in the eight provincial capitals have a plan. It is called Bill C-2 and it is right on the agenda. Bill C-2 is about ensuring a sustainable, affordable and fairer Canada pension plan. It is about giving peace of mind to Canadians who are getting pensions now and for those who are looking ahead to receiving pensions in the future.

This bill is about ensuring fairness between the generations in our country so that our children and grandchildren do not have to pay as high as 14% of their earnings.

As I hear the comments about this or that aspect of Bill C-2, I find nothing that shakes my conviction that this is a sound piece of legislation. It is balanced. It is fair. It is the right direction for us to go. It represents the complete package that Canadians told us they want.

Canada Pension Plan Investment Board ActGovernment Orders

3:20 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I appreciate the comments of the member. I think the member well appreciates the importance of a secure, guaranteed, indexed plan for Canadians to help our seniors to enjoy in dignity their retirement.

I would like to ask the member his opinion about the Reform Party's suggestion that we should abandon the CPP and move to some sort of RRSP scheme in which individual Canadians would have to manage their own pension affairs in lieu of having the benefits of the current plan and whether or not the member feels that that kind of plan would provide the same kind of protection and security for Canadians.

Canada Pension Plan Investment Board ActGovernment Orders

3:20 p.m.

Liberal

George Proud Liberal Hillsborough, PE

Mr. Speaker, I thank my colleague for his question. Everybody has their own opinion on what would do for a pension plan. Let us look at the realities of this. The reality is that this Canada pension plan was brought into being because of the fact that a lot of people cannot or do not contribute to their own pension plan. A lot of them cannot for various reasons and it is not their fault.

Therefore, back in the 1960s this plan was devised to take care of those people at the end of their working time when the company did not provide a pension, or maybe they were self-employed and there was no pension plan available and they had nothing but the old age security.

This was a terrible situation for people to be in. I have seen that happen to people on the street where I lived. To make matters worse, when the person who received the old age security passed away, the spouse was left with nothing. This is why this type of plan is necessary. I believe it is necessary and obviously the majority of Canadians believe this type of plan is necessary.

There is a large segment of society that for one reason or another do not contribute to RRSPs. That is a fact. There are RRSPs and they will be there in the future. I think they are a tremendous thing for people who have the ability to contribute to them. However, I also believe that there has to be some kind of social safety net that we are always talking about. This is a social safety net. This is a big part of it and Canadians want it. I believe it is very necessary, along with RRSPs.

Canada Pension Plan Investment Board ActGovernment Orders

3:25 p.m.

Reform

Ted White Reform North Vancouver, BC

Mr. Speaker, the hon. member just mentioned how important it is to have a social safety net and completely ignores the fact that this so-called social safety net has an unfunded liability of something like $600 billion. It will be in total collapse if we do not deal with the problem right away.

I remember in the previous Parliament to this one, at the beginning when the Reform was asking questions about the CPP and pointing out that it was in danger of collapse, the finance minister and members on that side constantly said “There is no problem. It's a wonderful program.” It was one of these Liberal gifts to mankind. Now, in this Parliament I heard the finance minister just weeks ago in question period say that everyone knows that the CPP is in trouble and needs to be fixed.

While I am pleased to see the Liberals realizing that there is a problem after denying in the last Parliament that there was a problem, I would like the member to explain to me how he can promote this as a good program, a good social safety net when it has an unfunded liability of close to $600 billion and everybody admits that it is in hopeless disarray. There is evidence that similar programs around the world have gone under and have had to be replaced with contributory programs like RRSP style programs. Why does he keep defending something that is indefensible?

Canada Pension Plan Investment Board ActGovernment Orders

3:25 p.m.

Liberal

George Proud Liberal Hillsborough, PE

Mr. Speaker, I want to thank my colleague across the way for his questions.

The hon. member referred to what the finance minister said. However, I for one, along with everybody in Canada knew that over the last number of years that the plan was having problems. We stabilized the problem with Bill C-2 in consultation with Canadians who told us clearly, without any question, that they wanted this Canada pension plan and that they wanted it brought into line so that they, their children and grandchildren would have pension benefits.

We can use all kinds of ways to skirt around this. The fact of the matter remains that Canadians believe in this Canada pension plan. Yes, it has to be managed in such a way that there will be money there for people in the future. I am convinced that we are doing this today with Bill C-2. I am not only convinced, but the people of Canada are convinced because they have demanded that we do this.

Canada Pension Plan Investment Board ActGovernment Orders

3:25 p.m.

Bloc

Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

Mr. Speaker, I would like to inform you first off and thus let our competent clerks know that I will be sharing my time with the member for Laval East.

Bill C-2 to reform the Canada pension plan now before the House has arrived four years late. It is however vital for Quebeckers contributing to the CPP.

Few Quebeckers are actually affected by this plan; fewer that one half of one per cent of the residents of Quebec receive CPP benefits. The statistics may not perhaps be accurate, but we are talking about some 12,000 Quebeckers. However, they and the people of Canada have not all had the opportunity to set up a private pension plan, and we must ensure they have an income when they decide to retire.

I said the bill is four years late. When the Liberals took over the government in 1993, they knew then that the plan was in trouble. Instead of assuming its responsibilities, the government focused on improving the retirement fund, but did not change the rules for disability benefits or contributions.

Had the current Liberal government assumed its responsibilities, the increase in contributions would be minimal, and the ordinary worker would not be penalized in the contributions he makes.

Even though our party agrees with the bill, and we are in favour of the current reform, I still have some remarks, which, should the government take them into consideration, would significantly improve benefits and provide a much more comfortable retirement to recipients, the people we represent, the people who sent us here.

Let us take a look at death benefits. Low income workers are often not protected by life insurance. Still, their families have a right, just like any other Quebecker or Canadian, to plan a decent funeral. The proposed reform provides for death benefits equivalent to six times the actual retirement benefits, up to a maximum of $2,500. The plan that we have in Quebec is much more generous, since the maximum allowed is $3,350. Yet, the premiums paid are the same.

I now come to the issue of disability benefits. The federal government is experiencing a lot of problems with the disability benefit program.

In September, the Auditor General of Canada, Denis Desautels, blamed the government for the unjustified escalation of the costs relating to disability benefits. He said the increase was the result of regulations that are too lax as regards disability benefits. Disability benefits should be paid only to people who cannot perform any remunerative work and for whom there is absolutely no possibility of being cured, given current medical knowledge. If the federal government adopted such a position, it would make the auditor general happy and the plan would be in better shape.

My purpose is not to penalize workers when they get sick. However, there are other social programs in Canada, and also private insurance programs, that cover disability. The purpose of a pension plan is to allow a contributor to retire or get financial support if he or she is incapable of performing any type of work.

Let us now look at premiums. The current contribution rate is 5.85%. The bill proposes to raise the rate to 6% in 1997, which will then reach a maximum of 9.9% by the year 2003, and remain at that level until the year 2010.

As I pointed out at the beginning, if the government had taken its responsibilities in 1993, the increase would not be so drastic and the plan would be in better shape. However, under the circumstances, we have no choice but to increase contributions, if we want to reduce the intergenerational unfairness by making baby boomers who, on average, will work for another 20 years or so, pay contributions that are more in line with the benefits they will get when they retire.

I have a warning for the government about the public pension plan. Millions of provincial government employees have agreed to receive reduced benefits from their private pension plan when they turn 65 and start receiving CPP or CPQ benefits. They agreed to such a cut because, at age 65, old age security was expected to make up for it.

But there is a snag: the current Minister of Finance plans to change the rules of the game by turning the existing old age security into a seniors' benefit by the year 2001.

I am aware that this remark concerns neither the existing nor the proposed Canada pension plan. But when dealing with the issue of retirement, we must make sure that the various plans are consistent. Count on me to remind the government of this fact when the time comes to calculate old age security based on family income.

The fourth point I would like to address concerns the auditor of the board. All these contributions collected and invested will have to be kept safe. The auditor should be appointed for five years and only be removed for just cause. In addition, the minister should cause a special examination to be carried out in respect of the operations of the board or any of its subsidiaries every six years. It would also be important that the governor in council be able to make regulations respecting the investments the board or its subsidiaries may make by ensuring that the end result is the maximum return for the pension fund.

To conclude, the bill currently before us is a good bill for the citizens of Canada and Quebec. However, some amendments are absolutely essential and I hope that the amendments proposed by my party, the Bloc Quebecois, will be accepted when the bill is reviewed clause by clause.

What the Bloc Quebecois wants is simply that there be better distributive justice, that there be concern for the underprivileged, for the people who have fears, for the elderly who are alone in their kitchens and worry that the fund might not always be there for them.

What the Bloc Quebecois wants is more fairness. We want to ensure that the wealthy pay their fair share of taxes and that there will not be two social classes in Canada. The rich are getting richer and driving bigger cars, while the poor are getting poorer. We should ask ourselves whether there would be enough money available to improve Canada's social programs if the 62,000 profitable companies that paid no taxes had paid their fair share.

One after the other, our big banks are announcing record profits. This is outrageous. If banks paid their fair share in taxes on their profits and stopped crushing poor workers by pulling the plug when they can no longer pay their mortgage or by repossessing their cars when they cannot make their payments, perhaps there would be better distributive justice and we would be able to avoid the contribution rate increases we are seeing today in Canada's social programs.

So this is what our party is calling for and I hope that our amendments will be seriously considered by this government if it really has a heart and soul.

Canada Pension Plan Investment Board ActGovernment Orders

3:35 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I have a comment and a question for the member. The member mentioned a few items, all of which have to do with the issue of what has been called intergenerational equity.

All members will know that under the current system pensioners today receive approximately $7 for every $1 they put in. This occurs because pensioners presently receiving pensions did not have full working careers. The plan came into effect in 1966. Benefits started to be paid in 1967. In fact full benefits started to be paid by 1970.

The member will also know that if one worked from 1966 to 1996, made the maximum amount and paid the maximum premiums each and every year, the accumulative premiums that any pensioner would have put in would accumulate to about $10,200, even though the annual payout was $8,800.

Clearly this is the reason the chief actuary found that we could no longer continue to pay the low premium rates that we are paying and still have those kinds of benefits.

The member raised an interesting point. Canadians said that they wanted to insulate today's seniors to make sure their benefits were not affected. Under Bill C-2 Canadian seniors, pensioners and those receiving disability benefits should be assured that their benefits will not be impacted by the changes in Bill C-2.

The question I have for the member concerns the aspect of how to make it fairer for those who have already worked some part of their career and perhaps are approaching retirement as opposed to those who are younger. The member knows that currently the rates are planned to go up to 10.1% in the year 2010. Bill C-2 is introducing a higher rate earlier so that we smooth the benefit out.

Does the member disagree with advancing the schedule of rates to begin in 1998, or is he in fact saying that somehow today's seniors should have to pay more for the benefits they currently enjoy?

Canada Pension Plan Investment Board ActGovernment Orders

3:40 p.m.

Bloc

Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

Mr. Speaker, I am not sure whether the hon. member has understood what I said. First of all, our party has announced that it agrees with the bill.

Our party will be proposing improvements to the bill, through our critic, the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques. What we do hold against this government, to which the hon. member who has just asked the question belongs, since he is a Liberal MP with several mandates under his belt—to go back to the catechism we had to learn when we were a little younger, in which there were different kinds of sins—is a sin, not of commission, but of omission.

It has done nothing. It has been lax ever since 1993. As soon as the Liberals came to power in 1993, when they became aware of the state this plan was in, they ought to have acted, got something accomplished. Why, now that we are nearly in 1998, has nothing been done since 1993?

I know that if the hon. member had a second chance to speak, he would say “Yes, but nothing was done during the two mandates of the Conservative government”. That is true, yes, nothing was done in 1984, and in 1988, but that just confirms what the Bloc Quebecois has always said “Liberal or Conservative, it is six of one and half a dozen of the other. They are all alike”.

Canada Pension Plan Investment Board ActGovernment Orders

3:40 p.m.

Reform

Roy H. Bailey Reform Souris—Moose Mountain, SK

Mr. Speaker, I have a question for my hon. friend in the bloc party. He mentioned the fact that the death benefit under the Quebec pension plan was higher than that in the rest of Canada.

I heard of a problem recently. When human resources were handling a death benefit out of Regina, from the time of death until the payment was made used to be six weeks. Last October, before the move, the average time for those constituents to obtain the death benefit settlement was five months.

Under the minister's plan does it take five months for someone to get a death benefit settlement?

Canada Pension Plan Investment Board ActGovernment Orders

3:40 p.m.

Bloc

Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

I am pleased that my Reform colleague, who sits with me on the transport committee, has given me a promotion. I have moved up to being a minister in the Government of Quebec.

I would be delighted to be a minister in the government of a sovereign Quebec, but having decided to stay here for a time, I would like to tell him that I am not in a position to confirm or deny his five months figure.

I am convinced that some Liberal colleagues will want to respond that the Quebec pension plan is the envy of all Canadians. It is an effective plan that has proven itself. I hope that in Quebec we do not just do wrong things.

Canada Pension Plan Investment Board ActGovernment Orders

3:45 p.m.

Bloc

Maud Debien Bloc Laval East, QC

Mr. Speaker, Bill C-2, which we have been considering for several days, proposes a reform of the Canada pension plan and the establishment of the Canada Pension Plan Investment Board, and it is not a moment too soon, as my colleague from Beauport—Montmorency—Orléans pointed out.

These changes had become essential in order to ensure the long term financial viability of the Canada pension plan. The amendments are justified by demographic and intergenerational equity concerns.

In the next 35 years, the percentage of people over 65 years of age will almost double, reaching 23% in 2030. When the plan was set up, there were eight contributors for every retiree. Unless something is done, by 2030, the ratio will be three workers for every retiree.

More specifically, this bill serves to increase the capitalization of the plan, improve investments and reduce administrative costs. The government needs the approval of two- thirds of the provinces representing two-thirds of the population in order to effect these changes. Consultations have given the federal government the support of eight provinces and enabled it to get on with reforming its pension plan.

As you know, Quebec is not affected by this reform, because, since 1965, it has administered its own pension plan, the Quebec pension plan. But it gave its support for the amendments proposed by the federal government. In fact, the Government of Quebec is also undertaking a series of improvements to its pension plan, through Bill 149, in order to ensure intergenerational equity.

The CPP is funded by means of obligatory contributions from employees, employers and the self-employed. All Canadian workers between the ages of 18 and 70 will be affected by this important and necessary effort since, last year, 10 million people paid into the plan. Last year as well, close to 3.5 million Canadians drew CPP benefits.

In Quebec, the situation is different because, as I mentioned earlier, the Caisse de dépôt et placement administers our plan. There are 12,882 Quebeckers receiving pension benefits from the federal government, however, and the Bloc Quebecois feels that these benefits should be adequate.

These people fall into three groups: the first consists of members of the Canadian Armed Forces and the RCMP living in Quebec; the second of individuals now living in Quebec and already drawing CPP; and, finally, individuals living in Quebec who have worked all their life in another province.

Right now, the plan is undercapitalized. To put it more simply, the plan is underfunded and will run out of money by 2015. If the federal government had not done something, the fund would have become depleted and coming generations would have paid a heavy price. It is not too late to take action.

This bill will ensure that there is a reserve of five years' worth of benefits, instead of two, meaning that the fund, which now stands at $39 billion, would have to reach $135 billion by 2007.

I feel like saying that the federal government is showing good sense in the bill we are looking at, even if it comes a bit late, as I have said. That has not always been the case in the past, for example with the employment insurance fund. Under the pretext of wanting to be prepared for the eventuality of dramatic rises in unemployment, and therefore in the number of claims for benefits, the federal government instituted employment insurance, with a fund which will reach $13 billion by the end of 1997, and $19 billion by 1998.

Although the government has given workers and employers a little break with employment insurance premiums, the employment insurance fund surplus is still indecent and, as we all know, is being used only for the government's accounting purposes. But that is another problem, and another debate.

In order to increase the funding or capitalization of the plan, the bill creates a Canada Pension Plan Investment Board, a sort of Canadian version of the Caisse de dépôt. The mandate of this new institution differs somewhat from that of the Caisse de dépôt et placement. Its mandate will be to earn the best possible rates of return. As for the Quebec fund, it also has an economic mandate we must not forget, namely to invest the money in the pension fund wisely and to use it as a tool of economic development.

It should be mentioned that, at the present time, the CPP policy takes the form of assets placed by the provinces in non-negotiable bonds. Those provinces so wishing may borrow this money at the rate of federal government bonds. As we can see, this is not a very good way to make the money of future Canadian pensioners grow.

I would like to say a few words about Quebec's Caisse de dépôt et placement in the hope that the new Canada Pension Plan Investment Board might one day take a page from its book. The Caisse de dépôt et placement manages the savings of all Quebeckers, but it should be emphasized that its mandate includes the important requirement that it serve as an economic lever, something not found in the CPP's mandate. This measure has allowed Quebec to develop and become competitive over the past 32 years. For example, the Caisse put up $16 billion to fund the James Bay project, thus helping create tens of thousands of jobs for Quebeckers.

Under the terms of its economic mandate, the Caisse de dépôt et placement must meet the financial needs of businesses as effectively as possible, invest profitably, provide support for the growth of Quebec businesses abroad, promote exports, and maximize use of the international network of financial and industrial partners.

Quebeckers are proud of their Caisse de dépôt et placement. They are leaders in the field and have supported hundreds of projects that contribute to the economic development of Quebec and the creation of jobs. The Caisse de dépôt et placement is also the largest fund manager in Canada and ranks among the top 100 in North America, investing in North American, European and Asian markets. It also has the largest real estate portfolio in Canada's commercial, residential and office sectors. This flagship of Quebec's innovation now has close to $62.4 billion in assets and has generated investment income of over $47 billion since it was first created.

It was a decision by the people of Quebec that gave the Caisse de dépôt et placement its mandate. In creating the investment board, the federal government has preferred to stick to improving the plan's performance and protecting Canadians against premium increases. That is its decision.

As we mentioned, the major changes introduced by this bill are vital if the plan is to be viable, affordable and equitable.

It should be remembered that the plan will be subject to a review by the federal government every three years and that the ministers of finance will be meeting every five years to set the contribution rates—

Canada Pension Plan Investment Board ActGovernment Orders

3:55 p.m.

The Deputy Speaker

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