I know that, Mr. Speaker. I apologize. The notes have his name and I guess I was not paying close attention to what I was reading.
Is the pension plan still registered under the Pension Benefits Standards Act, 1985? If it is, it means that the Canada Steamship Lines pension fund will be directly affected by this legislation. Does this put the minister in conflict of interest? That is a very important question that needs an answer.
The third question the Reform Party would like to have answered is a more important one. Why did the ethics counsellor have incorrect information about the registration of this pension fund. Who told him that the pension fund was not registered under the Pension Benefits Standards Act, 1985 currently before this House but only under the Pension Fund Societies Act? How did the misinformation come to him? Did it make its way from the minister's office? Was it an honest mistake or does it represent an attempt to mislead the ethics counsellor into thinking that the minister would not be directly affected by the act now before this House and cause the ethics counsellor to defend the minister when perhaps he should be warning him? We have made an access to information request to Mr. Wilson's office on this issue but we were refused any information he has on his file. We appealed this decision to the information commissioner but we think it is strange that all information would be denied us in a way directly contrary to the spirit of the conflict of interest and post-employment code for public office holders approved by the Liberal government in June 1994.
Allow me to read clause 3.2 of the code: “Public office holders have an obligation to perform their official duties and arrange their private affairs in a manner that will bear the closest public scrutiny, an obligation that is not fully discharged by simply acting within the law”.
It appears that the ethics counsellor does not want the public to have any insight into this matter, much less the closest public scrutiny the code requires.
We regard this as a serious issue and we encourage the ethics counsellor to lay before the public the documents that will bear the level of public scrutiny required in the code.
Continuing with what the ethics counsellor told us, he then said that the minister has doubly distanced himself from the passage of the bill because he left all ministerial work concerning the bill to the Secretary of State for International Financial Institutions. Combined with the suggestion that the bill would not impact the CSL Pension Fund Society, this was a kind of double indemnity against conflict of interest in the ethics counsellor's eyes.
However, I would remind the House that the Secretary of State for International Financial Institutions is not an independent minister. The present secretary of state was appointed by cabinet proclamation pursuant to section 11 of the Ministries and Ministers of State Act which was first passed by the Trudeau government in 1970. Section 11 of that act tells us that the duty of the minister is to assist any minister or ministers as having responsibility for any department and states that the secretary of state will make use of the services and facilities of the department.
A copy of the proclamation notice from the June 25, 1997 Gazette states that the present secretary of state was appointed pursuant to section 11 and it details the duties to assist the Minister of Finance in carrying out his responsibilities.
The secretary of state clearly takes his direction from the Minister of Finance and his job is to follow his orders. This looks like a suspiciously close relationship and it gives rise to the follow question. Since the minister's pension fund will be directly affected by this act and since the minister guiding it through the legislative process cannot rightly be called independent, is the Minister of Finance therefore in a conflict of interest?
We are suspicious about the secretary of state's independence for a particular reason. As I stated earlier, the Minister of Industry first introduced this bill into the House a year ago. This gives rise to yet another question. Presumably the Minister of Industry first introduced Bill S-3 because he bears responsibility for the Pension Fund Societies Act, an act that is separate from the Pension Benefits Standards Act, 1985. Why did the Minister of Industry then not reintroduce this act in this parliament? Why was it transferred from the Minister of Industry to the secretary of state, a junior minister under the direct control and supervision of the Minister of Finance?
We become even more suspicious when we note that in section 9 of the act now in question the rules for granting a surplus to an employer are considerably relaxed. There is no division formula in the present act. There is no vote required in the present regulations. We are not opposed to entrenching a formula in legislation, but in practice in the pension fund industry most companies hold a vote and receive the agreement of up to 100% of pensioners.
There are some examples. Last July active and retired employees of Jenisys Engineered Products voted 95% to divide a surplus. In December 1997 Unisys employees voted 99% in favour of a division of a pension fund surplus.
Since July 1990 regulation 10 of the Ontario pension benefits act has stipulated that for ongoing plans a plan sponsor must obtain 100% agreement of all members. Later that was changed to 90%, which is the current requirement.
Ontario's legislation may be restrictive but the idea that there would be a vote requiring the approval of just two-thirds of employees, and if between one-half and two-thirds of employees voted for the change it would go to an arbitrator who would make a final decision is an innovation in the industry. Only the provinces of B.C. and Quebec allow for mandatory arbitration.
This act will make the surplus much more accessible to the minister. The present role of the superintendent under the Pension Benefits Standards Act is to ensure the funded status of the plan that it remain solvent if any surplus is given. His role is not to hand out surpluses to employers or employees; the courts decide who gets any surplus.
The amendments to the Pension Benefits Standards Act in Bill S-3 actually broaden the role of the superintendent in that he must appoint an arbitrator if 50% of employees agree, a role he did not have before. The superintendent's office tells us that in the situation of an ongoing pension plan, like the minister's, it is very unlikely that the employer would get anything under the present act. The employer might try to approach employees for their agreement, but even if there is a vote the superintendent will still require that the courts give their blessing to any distribution.
If a plan is terminating, that is winding up, the superintendent makes a strictly legal decision based on the plan documents. If the plan itself is silent on who gets the surplus, it again ends up in the courts. In the minister's case where his company's plan is ongoing, the case would normally have gone to the courts. This act removes the issue from the courts and politicizes it to the point where only half the employees have to agree before the matter goes to an arbitrator. And get this: the arbitrator is appointed by the superintendent who in turn is appointed by the Minister of Finance.
This bill is so different from the norm that it begs two further obvious questions. The present superintendent, John Palmer, was himself appointed by the minister in September 1994. He presumably hopes to be reappointed when the superintendent's seven year term expires in 2001. The superintendent is therefore dependent on the minister, but the minister in turn depends on the superintendent to appoint an arbitrator to get the surplus. Is this not in itself a conflict of interest?
The seventh question is, at any point during which the legislation was being developed, did the minister have input into the make-up of the new surplus division formula? Could he have brought his considerable authority to bear with the intent of relaxing the legislative requirements necessary for an employer to have access to his own pension fund assets?
Our next concern is that the Superintendent of Financial Institutions regulates about 1,100 private pension plans. The Minister of Finance will argue that he is just one employer among many and that he will be treated like every other employer by this legislation. We would respond by quoting from the 1996 annual report of the superintendent released in March, in the section entitled “Surplus Refunds”:
In general, surplus must exceed the greater of 25% of the liabilities of the plan or 2 times the contribution of the employer to the normal cost of the plan, in order to qualify for a refund. Very few plans in surplus have levels of surplus above these thresholds.
If there were many other pensions plans governed by the Superintendent of Financial Institutions which are in the same surplus situation, this particular circumstance might not be so important. But should this act pass, the Canadian Steamship Lines Pension Fund Society has a surplus that could be made available to the minister of approximately $50 million. To me, this is not small change and it would accrue to an individual rather than a corporation.
An eighth question, part of which we asked through access to information, is how many other plans are regulated by the Superintendent of Financial Institutions with surpluses available to the employer in the neighbourhood of $50 million? If there are such companies, is the employer an individual such as the minister or a corporation in which no one has individual benefits? Is the minister claiming to treat himself as any other employer when he really belongs in a category all by himself? Will he receive a personal benefit from this legislation greater by far than almost all other employers in Canada?
This question was answered in part by an access to information request of April 1 which detailed for us all actuarial surpluses over $10 million that the Superintendent of Financial Institutions oversees.
Just 44 of the 1,100 plans that the superintendent oversees have surpluses over $10 million and only five of them have surpluses larger than $110 million. This means that the minister's pension fund surplus is one of the top five in the country.
This act will provide a benefit for him that only four other companies in the nation can beat. Those companies may not be individuals but corporations. We cannot know for sure, but in all likelihood the minister is the individual in Canada who will benefit the most from the passage of this legislation.
For all intents and purposes the minister is really in a unique situation rather than just one more employer among many.
Finally, we would like to receive the minister's personal assurance that he has kept out of the issue. We note that the president of the pension fund society of Canada Steamship Lines is Mr. Gordon Black, long time employee of CSL. Mr. Black is also listed on the board of directors of Canada Steamship Lines.
So that we might be assured that the minister is not consulting improperly with the president of the pension fund society who will look after the interests of the company in the surplus distribution process, we would like the minister to answer this question: has the minister spoken to or met with Mr. Black for any reason since January 1, 1997, just before the legislation was first tabled? If so, when? What was the subject of the meeting or meetings?
It is the job of the official opposition to conduct careful inquiries into these matters in order to ensure that no minister abuses a position of trust by passing legislation that would augment his or her private fortune.
We are not accusing the minister of wrongdoing. We are simply doing our job by asking questions. We are asking for full and complete disclosure on the part of the ethics counsellor and the minister himself so that the people of Canada can be fully satisfied as to the integrity of the Government of Canada.
This government ran on a platform of openness and accountability. Yet we have had such bizarre situations that the code of conduct for ministers has been kept secret from us. The prime minister alludes to it but never ever has presented a copy of it.
Here we have now a situation where there is a lot of question as to the propriety of this government actually passing this legislation.
At the beginning of my speech I said that the Liberals are associated with the colour red. I have raised a bunch of questions. They are red flag questions and they are questions that demand answers. These are questions that must be answered before this government proceeds to ram this legislation through, having all its members stand up in concert at the pull of their strings to vote in favour of this.
I urge the Liberal members who want to build or create for the first time this reputation of integrity that is so important for the Canadian people. They want to trust their government. I urge them to vote against this legislation. Why not let this be the first bill that this government actually loses? It comes from the Senate. There is no implication of anything like confidence in the government or anything on this. Let us defeat this one because of these unanswered questions.