House of Commons Hansard #12 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was cpp.
Environment and Sustainable Development
The Speaker
I have the honour to lay upon the table, pursuant to subsection 23(3) of the Auditor General Act, the report of the Commissioner of the Environment and Sustainable Development to the House of Commons for the year 2002.
This report is deemed permanently referred to the Standing Committee on Environment and Sustainable Development.
Don Boudria LiberalMinister of State and Leader of the Government in the House of Commons
Mr. Speaker, pursuant to Standing Order 56.1 I move that the first report of the Standing Committee on Procedure and House Affairs be concurred in.
Committees of the HouseRoutine Proceedings
The Speaker
Will those members who object to the motion please rise in their places.
And more than 25 members having risen:
Committees of the HouseRoutine Proceedings
The Speaker
The motion is deemed to have been withdrawn.
(Motion withdrawn)
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, I have the pleasure to present two petitions today. The first petition is on the issue of stem cell research.
Petitioners from my riding of Mississauga South and across Canada would like to draw to the attention of the House that Canadians support ethical stem cell research which already has shown encouraging potential for cures and therapies. They also point out that non-embryonic stem cells, also known as adult stem cells, have shown significant progress without the immune rejection or ethical problems associated with embryonic stem cells.
The petitioners therefore call upon Parliament to focus its legislative support on adult stem cell research to find the cures and therapies necessary for Canadians.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, the second petition has to do with fetal alcohol syndrome.
The petitioners, again from Mississauga South and across Canada, would like to draw to the attention of the House that fetal alcohol syndrome and other alcohol related birth defects are 100% preventable. They also would like to point out that consumption of alcohol does pose a risk to pregnant women.
The petitioners would therefore like to petition Parliament to mandate health warning labels on the containers of alcoholic beverages to caution expectant mothers and others of the risks associated with alcohol consumption.
Guy St-Julien Liberal Abitibi—Baie-James—Nunavik, QC
Mr. Speaker, I would like to table a petition signed by residents of Akulivik, a municipality of Nunavik, which is addressed to the federal government and concerns one of its departments, which ordered the killing of Inuit sled dogs from 1950 to 1969.
The federal government adopted a policy in support of these killings, and did not hold public consultations with the Inuit communities of New Quebec. Consequently, we are asking for a public inquiry into the federal dog killing policy that was implemented in Nunavik.
Chuck Cadman Canadian Alliance Surrey North, BC
Mr. Speaker, pursuant to Standing Order 36 I have the pleasure to present a petition containing the names of 1,030 residents of the lower mainland of British Columbia. These folks are concerned about the issue of child pornography and call upon Parliament to protect our children by taking all necessary steps to ensure that all materials that promote or glorify pedophilia or sado-masochistic activities involving children are outlawed.
Jay Hill Canadian Alliance Prince George—Peace River, BC
Mr. Speaker, pursuant to Standing Order 36 I would like to table five petitions containing 675 signatures from constituents in my riding of Prince George--Peace River.
The petitioners find child pornography to be deplorable and call upon Parliament to take all necessary steps to outlaw all forms of child pornography in Canada. The clear majority of Canadians condemn child pornography and support definitive legislation that will effectively remove the problem from our society.
I note that Focus on the Family is in Ottawa today to continue its campaign to stamp out child pornography in our country and I support its initiatives.
Rick Casson Canadian Alliance Lethbridge, AB
Mr. Speaker, I have two separate petitions here today.
Pursuant to Standing Order 36 I would like to table the first petition with 30 names on it calling upon Parliament to focus its legislative support on adult stem cell research to find the cures and therapies necessary to treat the illness and diseases of suffering Canadians. These people are concerned about the use of embryonic stem cell research.
Rick Casson Canadian Alliance Lethbridge, AB
Mr. Speaker, I have six petitions containing 1,499 signatures. Constituents in my riding have worked very hard over the summer to collect these names. They call upon Parliament to protect our children by taking all necessary steps to ensure that all materials that promote or glorify pedophilia or sado-masochistic activities involving children are outlawed.
During this week when the child pornography issue is being highlighted here in Ottawa and across Canada, this is an ideal time to table these petitions, and I support the petition wholeheartedly.
PetitionsRoutine Proceedings
The Deputy Speaker
Before we continue with petitions, I just want to remind the House that it is contrary to our rules to either associate or dissociate ourselves with petitions.
John Duncan Canadian Alliance Vancouver Island North, BC
Mr. Speaker, I have two petitions signed by over 350 individuals from my riding of Vancouver Island North.
The petitioners are asking Parliament to ensure that all necessary steps are taken to protect our children from any material promoting child pornography, to make it clear that any such exploitation of children will be met with swift punishment and that all necessary steps will be taken to outlaw such material.
Jim Pankiw Canadian Alliance Saskatoon—Humboldt, SK
Mr. Speaker, I have a petition here from Robert Hook and others in Saskatoon.
The petitioners request that Parliament focus legislative support on adult stem cell research to find cures for serious debilitating diseases.
Clifford Lincoln Liberal Lac-Saint-Louis, QC
Mr. Speaker, I rise on a point of order. I arrived a few minutes late and I apologize. I missed the call for introduction of private members' bills and the tabling of reports from parliamentary delegations. I would like to ask the consent of the House to introduce them very briefly. I have two private members' bills and a delegation report.
PetitionsRoutine Proceedings
The Deputy Speaker
Is there unanimous consent to revert to reports and private members' business?
Geoff Regan LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, I ask that all questions be allowed to stand.
Claude Drouin Liberalfor the Minister of Finance
moved that Bill C-3, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act, be read the second time and referred to a committee.
Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance
Mr. Speaker, I am pleased to present Bill C-3 for second reading in the House today.
Bill C-3 would amend the Canada pension plan, CPP, and the Canada Pension Plan Investment Board, CPPIB, Act in order to accomplish a prudent and accelerated transfer of CPP assets to the CPPIB. This transfer would represent the final step in the process of transferring CPP assets not required to pay current pensions and benefits to a market based independent investment organization. Before discussing the bill, I would like to take a few minutes to provide some background that will help to put these measures in context.
As hon. members know, the federal government is fully committed to making Canada's retirement income system secure to all Canadians. Today Canadians from all walks of life take this system for granted without realizing that it did not always exist. Years ago caring for older citizens and those with disabilities was solely the responsibility of individual families. With the introduction of the Income Tax Act in 1917, the federal government was able to adopt national social programs such as Canada's first old age pension in 1927, which at that time included a means test.
Following the second world war other programs such as employment insurance, family allowance and a universal old age security program were introduced. There was also a need for a public pension plan, a portable national pension, that could be carried from job to job and from province to province. This need was met in 1966 with the introduction of the Canada pension plan, a compulsory earnings based national plan to which all working Canadians could contribute.
The CPP provides wage earners with retirement income and financial assistance to their families in the event of death or disability. Set up jointly by the federal and provincial governments, the CPP was designed to complement, not replace, personal savings and private employment pension plans. It should be noted that Quebec administers its own complementary plan, the Quebec pension plan.
As hon. members know, the Canada pension plan is one of three supporting pillars of Canada's retirement income system. This system is a blend of public and private pension provisions and is considered internationally as one of the most effective ways to provide for retirement income needs.
The first pillar is our old age security program provides public pensions for senior citizens and ensures all Canadians a basic income in retirement.
The second pillar is the Canada pension plan, the focus of today's debate.
The third pillar, the private component of the system, includes tax assisted fully funded employer sponsored pension plans, registered retirement savings plans and other private savings.
Some 30 years after the Canada pension plan was launched concerns were raised about its sustainability. In the early 1990s the Chief Actuary of Canada warned that CPP assets, the equivalent of two years of benefits, would be depleted by 2015 and that contribution rates would have to increase to more than 14% by 2030 if the plan remained exactly as it was. These concerns needed to be addressed. After all, future generations of Canadians, including our children and grandchildren, needed assurance that the plan would be there for them at a reasonable cost.
As the plan's joint stewards the federal and provincial governments subsequently released a document entitled “An Information Paper for Consultations on the Canada Pension Plan” which outlined the challenges facing CPP in the coming years and options for reform.
In February 1996 the federal and provincial governments announced that joint cross country public consultations with Canadians would be held on the Canada pension plan to find out what ordinary citizens wanted to see done. Guided by panels of federal, provincial and territorial elected representatives, extensive consultations were held in every province and territory. Governments heard from actuaries, pension experts, social planning groups, chambers of commerce, seniors groups, youth organizations and many concerned individuals.
A common theme emerged during the consultations. It became clear that Canadians wanted the government to preserve the Canada pension plan by strengthening its financing, improving its investment practices and moderating the growth costs of benefits.
In 1997 the federal and provincial governments adopted a balanced approach to CPP reform so that the plan could meet the demand of the coming years when the baby boomers would be retiring.
Changes to the plan included limited changes to benefits and their administration, a moderate increase in CPP contribution rates and the building up of a larger asset pool while baby boomers were still in the workforce. The asset pool would be invested in the markets and managed at arm's length from government for the best possible rates of return. All together these measures ensured that a contribution rate of 9.9% would be sufficient to maintain sustainability of the plan indefinitely.
These reforms, which were endorsed by the provincial and federal finance ministers five years ago, will help ensure that Canadians have a pension plan on which they can always depend.
In the three actuarial reports since the reforms, the chief actuary has confirmed the long term viability and financial sustainability of the CPP.
A new market investment policy to be implemented by an independent organization, known as the Canada Pension Plan Investment Board, was a key element of CPP reform. The CPPIB was set up in 1998 and began operations the following year.
Before the CPPIB was established, the CPP investment policy dictated that all funds not immediately required to pay benefits and administrative costs had to be invested in provincial government bonds at the federal government's investment rate. This represented an undiversified portfolio of securities and an interest rate subsidy to the provinces.
The creation of the CPPIB, with a mandate to invest in the best interests of CPP contributors and beneficiaries and to maximize investment returns without undue risk of loss, meant that CPP could be partially funded, in contrast to the 1966 “pay as you go” CPP. The CPPIB reflects a fundamental policy change with respect to investment CPP funds.
The CPP funds that are not needed to pay benefits and expenses are transferred to the CPPIB and prudently invested in a diversified portfolio of market securities in the best interests of contributors and beneficiaries. Certain CPP assets will remain with the federal government and are the focus of Bill C-3 which I will discuss in a moment.
Before doing so, I want to point out that the CPPIB functions within an investment policy framework that is similar to other large public pension plans in Canada, such as the Ontario Teachers' Pension Plan and the Ontario Municipal Employees' Retirement System, OMERS.
For example, it operates under similar investment rules which require the prudent management of pension plan assets in the interests of plan contributors and beneficiaries and is free to hire its own independent professional managers. The Canada Pension Plan Investment Board is subject to the foreign property rule like other pension funds.
I would like to make a few additional comments about the CPPIB and how it functions before discussing the bill.
It is important to understand that the governance framework of the CPPIB was designed to ensure full transparency and accountability. Because the CPPIB operates at arm's length from governments and is responsible for billions of dollars of retirement funds belonging to CPP contributors and beneficiaries, it is imperative that the board be fully accountable to the public and governments. CPPIB funds are managed prudently to the highest professional standards, with qualified managers making investment decisions.
Let me assure the House that the CPP Investment Board is fully accountable to CPP plan members and federal and provincial governments. It keeps Canadians well informed of its policy operations and investments in a number of ways.
First, the CPPIB makes its investment policies and financial results public. Second, it releases quarterly financial statements. Third, the CPPIB publishes an annual report that is tabled in Parliament. Fourth, the board holds regular public meetings in each participating province at least every two years to allow public discussions and input. Fifth, the CPPIB maintains a very informative website.
Full accountability is also assured through a robust process, with strong checks and balances, that is in place for identifying and appointing CPPIB directors. Great care was taken in structuring the CPPIB to ensure that its board of directors was independent and accountable to CPP contributors and beneficiaries.
Following consultations with the ministers of finance in the participating provinces, the federal government appoints directors with high qualifications. The Minister of Finance also consults with provincial ministers of finance and with the board of directors on the appointment of the chair of the CPPIB.
Directors are chosen from a list of qualified candidates recommended by a joint federal-provincial nominating committee which is comprised of one representative from each of the nine participating provinces. The criteria used by the nominating committee to identify potential candidates for director have been made public. In addition, in making appointments to the board of directors, consideration is given to ensuring that a sufficient number of directors have proven financial ability or relevant work experience to ensure that the CPPIB carries out its objectives. As a result, individuals who sit as directors have extensive business, financial and investment expertise.
I am pleased to say that the independence and quality of the CPPIB of directors has received strong support from public and pension management experts.
Independence from government in making investment decisions is critical to the CPPIB success and public confidence in the CPP investment policy. This is of the utmost importance because the money that the CPPIB invests today, and the higher returns earned, will be used by the CPP to help pay the pensions of working Canadians who will begin retiring 20 years from now.
Let me turn now to the measures we are debating today.
Through Bill C-3, the federal and provincial governments are implementing the final steps of CPP reform launched in 1997. All CPP assets remaining with the federal government would be transferred to the CPPIB over a three-year period. These assets include a cash reserve and a large portfolio of mostly provincial government bonds. These asset transfers will represent the last steps of the path established by the federal-provincial governments in 1997 to invest in CPP assets not immediately required to pay benefits in the market by an independent professional investment board.
There are several advantages to putting all CPP assets under one independent, professional organization.
To begin, consolidating all assets under one organization will put CPP on the same footing as other major public pension plans, thereby providing fund managers with the flexibility to determine the best asset mix and investment strategies to manage risks and optimize returns for all CPP assets.
Analysis undertaken by the chief actuary of Canada indicate that CPP assets fully invested in the market would be expected to earn a greater return and thereby grow more rapidly for the benefit of present and future CPP contributors.
The benefit of the transfer of assets under Bill C-3 is very significant. Based on the financial projections in the chief actuary's 19th report, CPP assets would increase by approximately $85 billion over the next 50 years and by $72 billion in 2050.
Obviously this welcome result would add considerably to the soundness of the Canada pension plan and enhance the confidence of Canadians in their public pension plan. In addition, transferring the CPP bond portfolio to the CPP investment board over three years would provide for a smooth transition for capital markets, provincial borrowing programs and CPPIB.
Finally, all changes in the CPP and CPPIB legislation would require the approval of the provinces. I am happy to report to the House that provincial and territorial governments unanimously support these changes. This is important. Also, before the new legislation comes into force the provinces would need to formally approve the changes.
Bill C-3 essentially completes the process that the federal and provincial governments began in 1997 of investing CPP assets in the market by an independent professional investment board.
The end result of this move for the Canada pension plan would be increased performance, better diversification, and enhanced risk management of the entire CPP portfolio.
I wish to remind the House that during the 1997 public consultations on CPP reform, Canadians told their governments to fix CPP and to fix it right. Canadians also told their governments to preserve the CPP by strengthening its financing, improving its investment practices and moderating the growth costs of benefits. The provincial and federal governments have addressed these requests.
I should mention that the transfer of CPP assets to the CPPIB would have no impact on the Quebec pension plan which is administered separately from CPP.
The establishment of the Canada pension plan in 1966 was one of the most important public policy initiatives ever undertaken in the country. The plan reflects a national belief that retirement for working Canadians should not be a time for hardship. It also captures the Canadian value of shared responsibility among contributors and governments to provide reliable support to wage earning Canadians after they cease active work.
Ours is a government with a conscience. Together with the 1997 reforms the measures in the bill would ensure that the Canada pension plan remains on sound financial footing for future generations. With the transfer of all CPP assets to the CPP investment board Canadians can now feel secure that prudent, sound investment diversification, as well as increased performance would result.
I urge all hon. members to support the passage of this legislation without delay.
Clifford Lincoln Liberal Lac-Saint-Louis, QC
Mr. Speaker, I rise on a point of order. I have spoken to members of all parties and I think you would find consent to revert to the routine order of business, but strictly and solely for the purpose of introducing two private members' bills which I will not read. All I will say is that one refers to chemical pesticides and the other to automotive fuels.
Canada Pension PlanGovernment Orders
The Deputy Speaker
Does the hon. member for Lac-Saint-Louis have unanimous consent of the House to revert to routine proceedings?