Mr. Speaker, I will use this opportunity to speak briefly to Bill C-3 and some of the areas of concern to the NDP. We did not have an opportunity to raise many of them during the debate.
One of the issues I would like to raise in this short period of time is that there is nothing in Bill C-3 or the guidelines for investment that give direction to the Canada Pension Plan Investment Board to deal with ethical investments. In other words, even though this is a popular trend and a popular theme in many other pension plans, the pension board has very few guidelines because it is not mandated to invest locally to advance domestic businesses and it does not have to follow any ethical guidelines.
Theoretically, my pension plan dollars could be used to invest offshore in some sweatshop operation that I do not approve of, or in some tobacco industry investment that I do not approve of. We have very little or no say. There should have been a process whereby ethical screening would take place for any of these investments. Certainly one of the shortfalls of Bill C-3 is it fails to give direction to the board that Canadians by and large want ethical investments.
We argue that we do not have to accept a lower rate of return to invest ethically. In fact many of the green funds and the ethical investment funds on the market currently, some of the financial instruments, are outperforming general funds. We do not believe that is necessarily any kind of a compromise.
Speaking of the composition of the board, the documents circulated by the government which talk about Bill C-3 say that the board is made up of experts in the field, if I could put it that way, from the financial community, people who have a history and a background of dealing with large scale investments of this nature. Keep in mind that we are dealing with $120 billion to $130 billion within five years. That just has not been true.
At least one of the eleven people appointed is the former member of Parliament who represented my riding before I beat him in 1997. He is a university professor in political science with no experience or history in financial investments of this nature. Therefore, at least one is clearly a political patronage appointment, a reward or fallback position, so to speak. The composition of the board is still one of the real shortfalls of this whole idea.
Now $120 billion to $130 billion is being invested on the open market by a group of 12 people. It is being invested badly because in every quarterly report that has come out so far another $1 billion has been lost. Frankly we would have been better off if we had remained with the status quo and had not been seduced into the open market by the high rates of return during the high earning years when the IT sector was showing rates of return of 20%, et cetera. We were seduced into that market.
There is a rule in that sort of investment arena. One does not gamble with scared money. One does not go in there unless one is prepared and knowledgeable. Tourists are not brought to the table. Amateurs should not be part of the board.
Even when we lost $1 billion per quarter, the CEO's salary was doubled. In the first quarter that the board reported, $1.2 billion was lost. The CEO's salary was doubled, as a reward I suppose for that great track record, and his performance bonus was doubled.
This smacks of the worst kind of corporate governance that no one has any tolerance for any more after watching the corporate fraud fiascos in the United States as well as across the border in this country with Livent as of today. We seem to be replicating the very worst aspects of corporate governance rather than setting some new higher standard with a well structured board that meets, that has to report back more than every two years and that is composed not by Liberal patronage appointments but actually by qualified people.
First of all, I do not believe we should be rolling the dice with Canadian pension investments. We should be following the model of the Quebec pension plan, which mandates that a maximum rate of return is one objective, but secondary objectives are to promote business within the province of Quebec. That way we kill two birds with one stone and maximize the benefit of those hundreds of billions of dollars that will be invested.