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—