I do not know why I am being heckled by the Canadian Alliance. They are not even heckling on topic. It is really quite bizarre.
When the board does report back once every two years, there are not even the same rights that shareholders have at meetings. At least at a shareholders' meeting the shareholders can move a motion, an amendment or a resolution and maybe give direction to the board as to how they would like it to conduct itself.
We do not have that privilege. We do not have that right. We will be told how it did and did not do. I suppose the board will allow us to speak at the mikes and say a few things, but there is certainly nothing binding about those meetings. It is completely undemocratic. It has nothing to do with good corporate governance. It encompasses none of the basic tenets of good governance, which is now gaining a certain popularity throughout the investment world.
These are some of our serious concerns about Bill C-3. I would add that the fund controlled by the Canada Pension Plan Investment Board will become so massive that it will be impossible to invest that amount of money throughout Canada, even the 70% that will be invested in Canada, without political implications. Some of the decisions made by this 12-person political patronage board will surely be driven by some regional political or sectoral political influence. We cannot move that amount of money around Canada without causing a wave, a ripple effect. This is billions and billions of dollars. What if it were decided that an area needed some political tweaking, perhaps, a little more economic activity? Instead of the government spending some money there in economic development, it could simply direct its political patronage employees, and I will say could, to invest a whole bunch of money in that particular region, sector or industry sector. These are all worries that are very valid and very real. I am not saying that this will happen. I am saying it could happen without the proper guidelines and controls built into the system. None of that do we see in Bill C-3.
This bill started out as Bill C-58. We had a similar debate when it was introduced. I believe it was introduced last spring and had second reading on June 21 before Parliament prorogued. We had these same debates and frankly we were optimistic because we thought we had made a sufficient number of points. We thought that when Bill C-58 was reintroduced and tabled as Bill C-3 some of those concerns would have been addressed, the very least of which is the ethical guidelines. The government chose not to avail itself of the window of opportunity to give us some satisfaction on these issues.
On the issue of ethical guidelines, we do not even have to compromise profits. As many members here will attest, for instance, some of the ethical mutual funds perform better than the general mutual funds. I would argue that ethical investment funds can perform at least as well and in many cases better.
In terms of foreign investment, if I may I will restate the argument that we do not want our pension plan invested offshore. We want it to do the maximum amount of good in terms of secondary benefits in this country. Again, the experience to date has been, ideology aside, that those offshore investments of the Canada pension plan investment fund have lost 3%. They are minus 3%. They are showing a negative. In the investments made locally, other than stock market investments, which have been disastrous, there has been an average gain of 13%. Investing domestically has actually performed better than investing internationally, so we really do not need any more arguments.
First, we can be ethical and show a better rate of return. Second, we can be domestic and show a better rate of return. Third, we could be a lot more transparent and introduce a code of good corporate governance at least in terms of the structure of the 12-person investment board. Last, we could have a board that would be accountable to the Canadian people in a structure that at least would report back more than once every two years, something that I think is almost comical. There also should be some give and take, some mechanism or vehicle by which the Canadian people could make their wishes known and which would be binding on the board in terms of giving direction, through some kind of motion, plebiscite, vote or process. We have none of that.
No one tried very hard with respect to Bill C-3 to meet any of the concerns that we raised last spring with Bill C-58 and which we now see again before us in the same type of document. We in the NDP are disappointed, and as might be expected our caucus will vote against Bill C-3 based on the items I cited and many others.