Madam Speaker, my remarks will not be lengthy. The House will know why they are not going to be lengthy after I begin my preamble. Listening to the debate today made me think about the issue of relevance. It is definitely a fact that most of what is being discussed today is in some way relevant to the Canada pension plan, most of it.
I have noticed that members on both sides of the House have taken advantage of the debate on Bill C-3 to raise issues relevant to the Canada pension plan. That is all well and good, except that the bill in question is relatively a housekeeping bill with five or six types of changes to the existing Canada pension plan.
Maybe those elements in the bill are just too darn boring for everybody. Maybe they are not that important. It makes me wonder why we just would not adopt the provisions and move on to debate something else. It is not that the Canada pension plan is not a worthy subject of debate. It is just that the debate today is supposed to be on the contents of the bill, yet the debate seems to be on more general issues involving the Canada pension plan.
We have heard about the process of appointments to the pension plan investment board. We have heard about how the pension plan should be investing its capital, the level of benefits to those who receive the pension, the survivor pension or the disability pension, and the health of the plan itself. All of these are important public issues but none of them deal with the contents of the bill.
I will try to focus my remarks on the bill itself. I know that earlier speakers will have done that. I know it may be boring, but such is the nature of these types of legislative amendments. Let me address the five or six changes just so the record can show it and so we can all be bored as we get ready for members' statements and question period.
As everyone knows, the 1998 legislation created a Canada Pension Plan Investment Board which would take all of the money contributed into the plan, or most of it, and invest it to obtain a return to the plan higher than that which was originally being obtained by the silly practice of lending the pension plan moneys to the provinces. That practice was based on a political deal struck two or three decades ago here in Ottawa. The money was lent out from the pension plan pool to the provinces, I suppose at appropriate rates of interest but using investment methods that did not allow for any appreciation or accumulation of capital. Most of that money is still outstanding I guess. The money was lent. The provinces owe it. They pay interest and they repay it over time.
That provided very little in the way of growth to the pension plan pool. That became painfully obvious in the 1980s and 1990s as we saw other public pension plans grow, public pension plans where the funds were invested in the capital markets in a prudent fashion. There are several pension funds in Canada and the United States which have grown hugely with prudent investments, even grown beyond expectations. There are private pension plans that have so much money they have to take some of it back. There are fights by labour unions and corporations about how much money should be taken back because the pension plan has been invested so wisely.
Here we have our own public Canada pension plan and to some degree the Quebec pension plan, which does not run exactly the same way but in a sense runs in tandem for the same objectives. We have now allowed the definite investment of these moneys which proves beneficial for our whole country over the long term and medium term.
The first tinkering amendment to that existing legislation is one which seems to be pretty trite stuff. It would allow some or all of the money which, by law, has to be held not in the investment account but in the plan account, which was three months worth of capital sitting there just in case it was needed, to be turned over to the investment account so it can be invested as well. At the same time as we do that, the pension plan itself needs a legal mechanism to draw back from the investment account the money it needs monthly, daily or whatever to run the pension plan. It pulls it back from the capital markets.
Those two amendments run in tandem. They make sense. We could ask why those provisions were not there before. They were not there when the amendments were made in 1998. Some elements of the original pension plan legislation were kept in place and better foresight on the part of the managers and the government now allows us to see that we should make these changes.
There is also the matter of long term investments held not by the investment fund but by the Minister of Finance. Over all of the years, the Minister of Finance, on behalf of the Government of Canada and on behalf of Canadians, was the named owner of many investments that the fund had. Those investments are principally loans to provinces.
Just to pick an example, the province of British Columbia or Ontario owes the Canada pension fund $20 billion. The debt instrument reflecting that account is in the name of the Minister of Finance for Canada. This amendment will allow the Minister of Finance, who is statutorily obliged to be the named owner as trustee, to turn those long term investments over a three year period over to the investment fund.
It is possible in theory that the investment fund in prudence and with good investment intent may decide to actually sell some of that debt. It may decide to cash it in now depending on the interest rates, sell the money that is owed by Ontario on the open market, take the cash and reinvest it elsewhere.
I hope I am not making it sound like the investment board is into funny money investments and playing Monopoly with our pension funds. These are financing and investment techniques that are in use now and if used properly and prudently will serve the beneficiaries, the annuitants of our national pension plan, the Canada pension plan.
At some point in time over the last few years it has been questioned whether or not our Canada pension plan should have to live by the same foreign investment rules that our personal pension plans, statutory pension plans, RRSPs, have to live with. There is a limit on how much Canadian law will allow a statute based pension plan to invest in foreign funds. Forgive me for not knowing precisely what it is, but I think it is 20% now. That is a cap on how much can be invested in foreign funds.
Should our pension plan be able to be invested in no foreign funds or some and how much? This statutory amendment makes it clear that our Canada pension plan will follow the same rules as all of our other pension plans. If I am correct that the limit is 20%, that is the limit of investment of our Canada pension plan funds.