Mr. Speaker, I am pleased to have the privilege to stand in the House of Commons, Canada's highest court, we hope. We hope that it would take precedence over the Supreme Court of Canada.
We also have a responsibility in standing here. Today I represent not only the people of Canada, not only the people of my riding, but also I represent, hopefully, the interests of pensioners or potential pensioners in private plans around the country.
I would like to give a statement that will put you at ease, Mr. Speaker. That is, I am not going to use more than about 30 seconds to talk about the Senate today.
People out in the real world who are listening to this debate are probably not too aware of the fact that bills which initiate in the House of Commons begin with the letter C . This one happens to begin with the letter S , which means it started in the Senate. Of course we have reasons to believe that there are some untoward government motivations to quickly pass it in the Senate and then bring it here.
We believe very strongly in the Reform Party that that is backwards. Bills of this importance should definitely be initiated by the elected members of our parliamentary system and not by those who are appointed by political patronage connections.
This bill is called S-3. That means it started in the Senate. With that comment about the Senate, I am going to get on to some of the things which are particularly interesting to us.
I want to draw your attention, Mr. Speaker, and the attention of all of the Liberals who are pushing this legislation through and certainly the attention of Canadians to a very important aspect of Bill S-3.
The parliamentary secretary has already outlined some of the reasons for this bill. I have to admit there are many things in this bill we think are commendable and should be proceeded with. However, there are also some extremely odious components. As a member of the official opposition it is my duty and responsibility to draw those to everyone's attention.
Section 9.(2) in the Pension Benefits Standards Act, 1985 is fraught with a bit of a problem. It states that if an actuarial report filed under this section indicates that there is a surplus in a private pension fund, in other words if there is more money in the fund than what is needed to meet the obligations under a fixed benefit plan, that surplus may be refunded to the employer.
Section 9.(2) gives some conditions as to when, where and under what conditions the employer can get the money back. One of them is that the superintendent must consent to the refund. I will come back to this in a few seconds.
It also states that an employer has a claim to the surplus or part of it after being notified of the employer's proposal for a refund of that surplus or part of it if at least two-thirds of the persons in the different categories consent to it. If only 50% consent to it then the superintendent will appoint an arbitrator and will judge the matter.
Does that not raise a red flag? I know Liberals love red. There is a member across right now dressed in red and I think it looks great. We are familiar with the infamous red book. So red and Liberal sort of go together. In this case, however, I hope they see red. Red is also a warning. In traffic it means we need to stop. It is a warning for danger. Whenever there is extreme danger the colour red is used.
This is what I want to talk about. It so happens that section 9.(2) could directly impact on the personal holdings of the Minister of Finance. For at least a decade there has been a controversy about actuarial surpluses in private employer-employee pension plans, a situation that rarely occurred before the mid-1980s. Is the employer entitled to a surplus or are the workers?
This issue was brought to a head in 1986 when Conrad Black's Dominion stores took $63 million from three employee pension plans and were subsequently forced by Ontario's supreme court to return the funds. At that time a moratorium was put on all surpluses regulated by the province of Ontario and although this has been relaxed somewhat, provincial rules for the division of surpluses are still very stringent.
There are a number of questions that need to be answered about the minister's involvement in this legislation before the Reform Party can approve it and certainly before the Liberals should be passing this.
The Minister of Finance acquired Canada Steamship Lines in 1981. The Pension Fund Society of Canada Steamship Lines based on Montreal has had one of these defined benefit pension plans for its employees since 1940. The last actuarial evaluation of the plan on which we have information was done in December 1995 by A. Foster Higgins & Co. However, according to the Pension Fund Society's newsletters we know that the plan's assets have enjoyed spectacular growth in recent years, for example 21% in 1995, 20% in 1996 and 17% in 1997.
The society's obligation to the beneficiaries was $84 million in 1997. However, net assets in the plan were $252 million and the total surplus was valued $142 million in that year.
Under the present rules of the superintendent of financial institutions the employer, in this case the minister, is eligible to claim $118 million in surplus from this pension fund. He would probably not get all of it because he would have to strike a deal to give a part of it to pensioners in order to persuade at least 50% of them to agree to give him the surplus.
No contributions have been made to the plan by the employer since December 31, 1984 and by employees since December 31, 1991. There were 823 beneficiaries in 1996, after 25 had passed away in that year, which included 127 active employees.
The plan is committed to indexing benefits to 80% of inflation. Beneficiaries received an increase of 2% in 1996, representing 90% of inflation.
It is very timely for the Minister of Finance that the act be passed now. It was first introduced by the Minister of Industry in the House in March, 1997, then in the Senate by Senator Alisdair Graham last fall with a few minor changes. Under the bill if two-thirds of beneficiaries vote to release the surplus funds the employer can have them provided also that the superintendent of financial institutions agrees. If less than two-thirds but more than half agree, the matter must go to binding arbitration. The arbitrator is chosen by the superintendent if the parties cannot agree on a choice.
This information begs a number of important questions. The official opposition must receive adequate answers to them before approving this legislation.
Is the minister in a general conflict of interest when a bill from which he might benefit so significantly is passed under his general authority, a bill that receives all necessary support and impetus from his office? We have searched for an answer to this important question for some time. We spoke to ethics counsellor Howard Wilson January 30 about the minister's involvement with this legislation and he answered that the Canada Steamship Line's pension fund is incorporated under the Pension Fund Societies Act under the auspices of the Department of Industry and will not therefore be directly affected by the Pension Benefit Standards Act.
The ethics counsellor confirmed to us that the surplus in CSL's plan is about $140 million. However, we have obtained the 1996 financial statements for Canada Steamship Lines Pension Fund Society and a number of newsletters from the society. The newsletters comment often on the passage of the Pension Benefits Standards Act, 1985 as if it will be directly relevant to the surplus in their plan. The financial statements from 1996 actually state that the plan is registered under the Pension Benefits Standards Act, 1985 and the registration number is 55006.
We have also consulted with the Department of Industry and it has found a registration for the pension fund under the Pension Fund Societies Act. It is registered under both, while the ethics counsellor is under the impression that it is registered under one act only.
We would like an answer to our second question. Is Mr. Martin's pension plan still registered under the—