Mr. Speaker, I cannot help but respond to the hon. parliamentary secretary. I think this is absolutely the first bill that the Liberal government has introduced which is perfect.
I have noticed that the feeling of arrogance, the feeling of completeness and the feeling of superiority to everyone else is beginning to grow and develop on that side of the House. That is the first sign that there is something wrong. If there was nothing wrong, then they would not have to say they were perfect. Everybody would know it. I believe one has to take issue with that.
I was also struck by the comment the hon. parliamentary secretary made about the mission to Chile. I certainly concur. I was a participant in that particular mission. It was an excellent mission, which was extremely well organized and very well done. I think it will produce jobs in Canada and it will move the housing market forward in Chile. However, I submit that was done under the existing Canada Mortgage and Housing Corporation Act. It was very successful. The Canada Mortgage and Housing Corporation can indeed and has entered into those particular activities.
I would like to draw to the hon. member's attention the particular clause that would be amended by the proposed amendment. Clause 29 on page 20 would replace section 14 with the following:
The Corporation may establish branches and employ agents.
It is a carte blanche to establish branches and employ agents anywhere, wherever the CMHC wishes to do so.
The mandate of the Canada Mortgage and Housing Corporation is to implement and to make operational, to administer if you will, the National Housing Act. That is the purpose of the Canada Mortgage and Housing Corporation. The mandate of the Canada Mortgage and Housing Corporation is to implement and to put into operation the housing policy of the federal government.
If this corporation can establish branches and agents, and an agent can act as if it were the government or the corporation, and in this case it would be an agent of the corporation, it means that the agent is the corporation wherever that branch or agent sets up office. That is the issue.
The amendment is not intended in any way, shape or form to restrict the operation of the Canada Mortgage and Housing Corporation to do the kind of thing that it did in Chile or in other parts of the world. However, it definitely is the intention to restrict the Canada Mortgage and Housing Corporation to insure mortgages in Canada, not in Germany or Japan or Chile or anywhere else in the world. That is a totally different issue. The hon. member should review that.
There may be an honest disagreement in opinion and perhaps legal counsel ought to be sought. However, it is abundantly clear to me that the intent and purpose of the Canada Mortgage and Housing Corporation is to serve Canadians first and foremost. That is its purpose. If that purpose is going to be jeopardized by diverting its attention to other countries in the world, then it has lost its primary function. Let us keep that very clearly in mind.
The other issue that appears in this bill with the amendments and the new proposals is that there is absolutely no transparency in the financial dealings of the Canada Mortgage and Housing Corporation. There is no indication of where the profits will go. It simply says that the Canada Mortgage and Housing Corporation shall pay, for example, from the mortgage insurance fund to the consolidated revenues of Canada a fee, or moneys. It does not even call it a fee. The clause states that these shall be considered expenses. At the moment there is a $602 million surplus in the mortgage insurance fund.
Can money be paid to the consolidated revenue fund? Under the current provisions of the act, no. When we asked the officials of the Canada Mortgage and Housing Corporation how much it had paid to the consolidated revenue fund, they said there had been no payment. We asked if that would change under the provisions of the new act and they said that, yes, it would. Then we asked them what the guidelines would be and what the policies and principles would be that would determine how much money would be taken from the surplus either in the mortgage insurance fund or from any other operation that the Canada Mortgage and Housing Corporation would get into. The president began to speak and immediately the minister interrupted and said that would be determined at some later time and they did not know. That is not transparent, nor is it responsible and accountable.
There are no provisions in this bill. It simply says that the Canada Mortgage and Housing Corporation may invest. It does not say where, it does not say how much, it does not say from what sources, but it may invest money somewhere, somehow, in land, buildings, stocks, bonds or other mortgages. It is not clear at all.
Neither is there a provision that these investments, whatever they might be, have to be guided by the same kind of guidelines that exist for the insurance companies under the Insurance Companies Act. Neither are there any guidelines as to what it has to do in terms of maintaining a prudential portfolio. All of this is left wide open and the administration of the Canada Mortgage and Housing Corporation can do whatever it wants to do.
I believe that is an inherent flaw in the bill. As a minimum the bill ought to subject the financial operations of the Canada Mortgage and Housing Corporation to the same restrictions that are there for insurance companies and other financial institutions in Canada. That is the minimum.
In the final analysis, if the Canada Mortgage and Housing Corporation invests its money improperly and loses money, who is going to pay? The taxpayer is going to pay and that is a terrible intrusion. If a bank or an insurance company acts in a fiduciary and responsible manner and must abide by the rules and regulations of the Office of the Superintendent of Financial Institutions, then surely a crown corporation should be no less concerned about the security of the money it invests. That is one provision that is not in the bill which I think should be included.
I will speak briefly about capitalization. It is interesting that the corporation has capitalization of $25 million. There is a new provision in the proposed bill that capitalization may be increased by the governor in council. There are two problems here. First, why should the governor in council determine the capitalization of the Canada Mortgage and Housing Corporation? If it is going to be changed, then it ought to be done by parliament and not by the governor in council.
Second, it seems almost a nonsensical kind of provision in the first place because the capitalization of the Canada Mortgage and Housing Corporation is simply a paper entry. Behind Canada Mortgage and Housing Corporation are all the resources and the financial clout of the federal government. To capitalize the corporation at $25 million or any other number is simply a book entry. We need to be very careful in that regard. Let us face it. The corporation has huge investments and exposure in the marketplace. It has insured something like $280 billion worth of mortgages.
Another point we need to look at is the way in which CMHC can actually intrude into and become an intermediary in the financial marketplace. Why should a crown corporation enter into the financial marketplace and intrude directly with all the clout of the federal government and thereby virtually override and bully every other financial institution simply because it has all the resources of the nation at its disposal and the other companies do not?
If the Canada Mortgage and Housing Corporation is to be on a fair and equal playing field with the others on a commercial basis, it ought to have the same operational principles and guidelines governing its operations as other institutions, and it does not. Therefore I believe CHMC has an unfair advantage and it should not have that advantage.