Mr. Speaker, it is with pleasure that I rise on Bill C-78. Let us be clear. The government suggests that the main objective of this legislation is to improve the financial management of the three public sector pension and superannuation plans. The government's intention is consistent with its intention since 1993 to further concentrate its power among a very few.
There has been a secular decline in the role of parliament in the decisions made that affect Canadians. It began actually in the late 1960s. This continues and in fact has been expedited by the government. Bill C-78 is a further example of the effort by the government to concentrate power in the hands of a very few.
Increased management by the government with this legislation is defined as increased control, increased power and increased domination. It is a common characteristic of every initiative undertaken by members of the government. The power that they want to increase for themselves comes at a direct cost to parliament and to parliamentarians.
The fact is that prior to this legislation any change in the contribution rate had to be approved by parliament. After this legislation that power will rest with the treasury board president at a time when Canadians are saying they want more accountability, more input, and parliamentarians need to have more responsibility.
I believe Mark Twain once said that a bad job is one with lots of responsibility but no authority. Effectively that is what parliamentarians are being given these days. We are given lots of responsibility in many ways but really no authority. This is one of the areas, the pension plans for public servants, where Canadians deserve better. Canadians deserve due diligence and parliamentary participation to ensure that in the long term these pension plans survive and are there for the future, and that the interest of all Canadians are represented in this public policy.
The bill effectively provides the mechanism for the government to withdraw the current $28 billion surplus from the federal pension plan over a period of 15 years, and any future surpluses can be withdrawn. The legislation will permit treasury board ministers without parliament in the future to determine the use of these surpluses and to set contribution rates.
The projected surpluses starting in the year 2000 will be about $2 billion to $3 billion per year which is a large sum of money. To have that money again going directly into the government's discretionary spending or being put toward whatever pet projects the government wants to pursue at a particular time, particularly before an election, is exposing the Liberal government to a significant temptation.
It is a temptation the Liberals welcome. It is one they are actually preparing for with this legislation. They will have access to more money to spend on purposes that are important to them, to spend on the next election and to spend getting ready by bribing Canadians with their own money. It will not be spent on the types of policies that are important for Canadians in the future and that will provide for a better quality of life and greater competitiveness in the 21st century. Instead it will be spent on the types of policies that will try to convince Canadians in the short term that the government has their best interest at heart.
This legislation is another example of government contempt and lack of appreciation for parliament. As I mentioned earlier, under this legislation there is no provision for parliament to hold the government accountable for withdrawals and for changes in the contribution rates.
This is highly analogous to the situation with the EI fund and what has happened since 1993. The government has taken $19 billion from the EI fund and at the same time has used that money to pad its books to make its own fiscal numbers look better than they actually are. It has maintained unnecessarily high EI premiums. At the same time it has reduced benefits in a draconian and cruel way in many sectors and in many regions of the country.
Currently in the EI fund, for instance, only 30% of those people who are paying into employment insurance actually qualify when they need to collect employment insurance. The government is maintaining this unfair practice simply because it wants access to that steady pool of capital, that influx of capital.
The government has an insatiable thirst for cold hard cash that it can spend on unrelated programs and policies. The government has a very circuitous approach to bookkeeping and a number of times has offended the auditor general with its less than straightforward bookkeeping. In fact one would need to be a forensic auditor to understand some of the provisions in the recent budget.
The fact that the government would use the EI fund to facilitate spending in other programs is clearly unethical and regressive. The amount of EI premiums paid by a Canadian making $39,000 will be the same as the amount of premiums being paid by a Canadian making $300,000. It is an inordinately unfair tax on lower and middle income Canadians.
The government is comfortable with its practice because it is a pool of capital. It can try to hide behind the guise of having an employment insurance program with an EI premium which in fact is an EI tax.
The reason I am discussing government treatment of the EI program is that it is completely analogous with its proposed treatment through Bill C-78 of the superannuation funds. As I mentioned, the government has an insatiable appetite for money. It has a questionable approach to financial and bookkeeping practices. In this case we are not arguing with the government's legal ability to do this. The Federal Superannuates National Association has actually sought legal advice and has agreed that the government has the legal ability to do this.
The question is one of what is right, what is correct, from an ethical perspective. Traditionally 40% of the contributions have been made by the employers and 60% by the employees. If the government is proposing to take a withdrawal from this fund there should be a requirement that a commensurate reinvestment be made in improved benefits. For instance, if the contribution rate were 60:40 and the government were to choose to withdraw $6 billion from the surplus, there should be a requirement that $4 billion be reinvested in better benefits for those people who have paid in, the members of these plans. That is clearly fair.
That the government would not even engage in a dialogue on splitting the surplus with its partner, the employees who have paid into the program over the course of their careers, is actually appalling.
There are some improved benefits. The dental benefit has been improved in the programs, and we commend that. We also see recognition of same sex survivor benefits. This is one case where the government has acted pre-emptively to avoid court action. Numerous court precedents have been set recently in the interpretation of Canada's Charter of Rights and Freedoms which demonstrate quite clearly that the government is not in a position to discriminate based on sexual orientation.
The government in this case is moving, I guess one could say, one step ahead of the sheriff. That is better than being one step behind the sheriff or being dragged kicking and screaming into the 21st century, as we have seen governments in Canada in recent months and years effectively waiting for the judiciary to force them to take these actions.
This action is consistent with the realities of Canada in 1999. Governments have to lead on these issues, have to take positions such as this one and have to recognize same sex benefits as opposed to being dragged kicking and screaming by the court system.
The issue of the proposed investment board is one that on the surface looks very positive. We are pleased to see that the pension funds will be invested in external financial markets to maximize returns on behalf of superannuates.
It is laughable sometimes, though, when the government proposes an arm's length operation of these boards from the government. I would suggest that with the government arm's length relationships have very short arms.
The Canada Pension Plan Investment Board, for instance, has 12 members, 6 of whom are major contributors to the Liberal Party of Canada. If one works it out statistically, only 0.2% of Canadians are contributors to the Liberal Party of Canada. Perhaps it is even fewer for my party, but I am not bitter. It is no coincidence that so many members of the Canada Pension Plan Investment Board are Liberal supporters and contributors.
I expect when we see this investment board announced we will see a similar consistency in terms of Liberal political interference in the appointment process to these boards that will be making investment decisions for the future retirement funds of Canadians.
If there is political interference in the decisions applying to the appointment of the boards in these cases, Canadians should be concerned about political interference in the decisions and the investments made by these boards. That is a very significant concern to Canadians. I hope we consider it very carefully in the House because it is a significant risk.
Although the government purports to be trying to maximize the returns for superannuates through these changes, the fund will still be limited by the foreign content rule so that only 20% of the fund can be invested in foreign markets. The fact is that the Canadian equities markets have grossly underperformed competitive equities markets in other countries.
Since 1993 the Dow Jones industrial average has grown in value by 180%. The S&P 500 has grown by 172%. During the same period of time the Toronto Stock Exchange has grown in value by 60%.
Wealth is relative and if we deny Canadians an opportunity to achieve geographic diversification by investing as many global mutual funds do around the world to maximize the returns and to spread out their risks, we are denying Canadians the ability to build maximum wealth and retirement income in the next century.
Another issue is one we have with government policy on RRSPs. We are increasingly saying to Canadians that they must plan ahead, that they must invest for their own retirements and that they must take responsibility. At the same time we are not giving Canadians the means and freedom by which to make the best possible decisions.
The superannuation fund will again be denied the opportunity to have a maximum level of growth and a reduction in the level of risk through geographic diversification.
It is estimated that the foreign content rule costs .2% of Canadian pension funds and mutual funds based in RRSP assets. In the long term that means a 3% to 4% reduction in pension benefits for Canadians.
Some people have argued against eliminating or reducing the foreign content rule saying it would take money out of the Canadian equities market, the capital that we need in Canada. I would argue that with the Canada pension plan reform, the Canada pension plan investment fund and the superannuation investment fund, which will be invested privately, it is a perfect opportunity to invest capital from these huge, copious quantities of quid coming out of these programs into the domestic equities market.
This is the perfect time for the government to take this step. It will help provide an ameliorative step to prevent any negative impact on the Canadian equities market. There will be more capital available for both the Canadian equities market and the foreign equities market. It can be phased in over a period of time.
If we are serious about improving the quality of life and standard of living for Canadians, the government should not be forcing Canadians to invest the bulk of their retirement savings into Canadian markets, which represents 1.5% of the global equities markets. It clearly defies the logic of good portfolio management. I have some concerns about that.
The legislation at hand will make available through a surplus about $2.5 billion per year starting April 1, 2000. It will provide significantly more freedom in the future to a government to use this money for whatever purposes it wants. These pension funds were developed to provide for the long term security in retirement for the superannuates. They were not designed to provide slush funds for governing parties.
The government will say that this is a defined benefit and, since it is responsible for the payments of the pensions regardless, it has a right to do whatever it wants. We are not arguing with its legal ability to do this. We are arguing with the ethics of doing it. When the members pay a contribution rate of 40%, there should at least be an acknowledgement that there should be a significant improvement in the benefits paid out prior to a significant reduction or withdrawal of the surplus.
The other thing I noted was that the CPP actuary will be making the recommendations relative to the setting of the premiums. I remember a chap by the name of Bernard Dussault who was a CPP actuary. If I remember correctly, the government fired him. The smoking gun that the government had, indicated that he was fired because of his inability or lack of desire to hide the truth about the future of the Canada pension plan.
The last thing we need is a system that creates more potential for abuse of power, more Bernard Dussault situations where good civil servants are fired for telling the truth, and situations where there are reductions in the power of parliamentarians in designing the type of public policy Canadians need and a commensurate increase in the power of the government to do whatever it wants with money because of its insatiable appetite for spending in any area.
We look forward to debating this issue over the next few weeks. I would hope that members of parliament take very seriously the potential wrath of seniors in the next federal election. I believe seniors are the people who deserve to be listened to, and in the next federal election they will make their case very clear.