Madam Speaker, sitting in between the two hon. members, it was much like watching a tennis match left and right. My neck is sore from the last five to ten minutes of debate, but at least it was lively.
I am thankful for the opportunity to talk about Bill C-3. I have some concerns with regard to the bill, as do my New Democratic colleagues. There are three main points I would like to talk about.
The first is the lack of rules with regard to pension funds and how they would be administered, monitored and where they would go. The second is that there does not seem to be a comprehensive business plan for such a large investment that is really in a public trust through the Canada pension plan and the historic relevance to Canadians. The third is just outright bad timing, looking at the market right now. If a person's house were on fire, the person would not rush the furniture back inside the house.
This is very bad timing. We have seen tremendous upheaval and losses in markets. They will be rushing public funds, suitcases full of Canadian taxpayers' money, into the fire and making them very vulnerable at a time when the market needs to straighten itself out.
The Canada pension plan is one of those pillars in Canada and in the free world with regard to securing some type of relevance and more important, some type of stability for one's working commitment and then having the ability to retire with security. It is about the ability for a person to pay for his or her housing, food and clothing and to participate in a meaningful social life once the person has completed his or her term of service in the workplace. That is something that is being put at risk with regard to this particular amendment.
That is one of the reasons the timing element is so critical. By 2012 there will be $120 billion to $150 billion that will be put into the basic domain and at risk. That is a concern because that growth is something that should be secured as opposed to potentially put at risk at this particular time.
Today we saw the release of an ethics package by the Deputy Prime Minister. Canadians are yearning for more ethical conduct in Parliament. As well they are looking for more ethical conduct in the business community. We have seen the recent scandals. A few examples are Enron, WorldCom and Arthur Andersen, where there has been clear void of ethics in terms of reporting their financial earnings, what their business plans have been and what their actual profits were. That is a real concern. That is no different from the ethics issue in Parliament.
Canadians feel really uncomfortable with the current conditions and the treatment by the business community in business practices that have cost them earnings that they and their families have worked for. They have put that in the trust of investment and they have not had returns but have had significant losses. I do not think there have been many people who invest in the market who have not been affected by some of these things. Some of it is poor ethical behaviour on behalf of corporations. They have boards of directors too and some of them may not have been aware of all the things that were happening with their prospective businesses.
That brings me to the appointment of the 12 member board. There does not seem to be a clear process with regard to the appointment being independent. It is going to be a patronage system. It is not going to be representative of the public trust, being the actual pensioners and their earnings, citizens or different types of representative organizations. They are going to be appointments. That is not very fair and that is not proper. More important, it is going to lead to some very questionable practices.
Even if the 12 members are selected in earnest, their decisions in terms of the financial investments could have ties with regard to patronage or government contracts, all of those things. Whether it is intentional or unintentional, it casts a cloud of concern or at least ill repute over the whole process. We need to make sure that the Canada pension plan is one that is above reproach.
Canadians want to feel comfortable that their pension and future are tied significantly to a process that is pure, pristine and proper and not one that can be evolved through patronage appointments and basically who the appointees supported and how they contributed. That is the potential element with regard to the process that is underway.
We have had in this last stock market year 14% to 33% losses where normally we would have had 8%. Once again the timing is bad. We know that there is volatility. We know it is not resolved.
We know that the United States is having a difficult time with its economy. The latest projections are that it will actually have to borrow money. It will be in a deficit and it will have to borrow money to give tax incentives back to its citizens. We know that the market might be connected toward its productivity in terms of Canada and that makes us more vulnerable.
One of the concerns we have is the 30% in foreign ownership and once again the lack of rules with regard to the process. I quote from the actual document:
Our legislation specifically prohibits us from engaging in any investment activities other than maximizing investment returns....The policy further states that we will not accept or reject investments based on non-investment criteria.
That is very disconcerting because we could have the potential of no screening of where the money in the funds goes. We could actually prop up businesses as well as products that are harmful to the objectives of the Canadian government and Canadian people, whether it be sweatshops, arms production or any of the child labour situations that we have seen evolve. There will not be that due process and the board will not focus on that either. That will not be a criteria.
If Canadians had the reverse happening to them, where we had other investors propping up investment opportunities in Canada that had significant economic and social impacts on our communities, we would not feel very comfortable about it. I think that role by Canada would be very shameful if we had situations evolve where we had business investments made on the backs of immoral or questionable practices just so that we could extract a couple of percentage points more out of the system.
With regard to the opportunities that are facing the country, the challenges also lead to opportunities. With some of the funds there could be more of a focus on the municipal bonds programs or the Ontario bonds program. I note they do not pay the same rates of return as other opportunities but there is one taxpayer and the fact is that if we do not achieve the full result from the actual investment in terms of maximizing profit with maximized return, we will have stability. There are plenty of infrastructure opportunities to build our economy and to build our business community through the bond system.
I know municipally we have always sold bonds and they have been sold out within a day or two. They present anything from 6% to 7% at times for the actual return which is solid in terms of the inflation rate. It also provides an opportunity for the municipality to retrieve long term vision and goals so that we are able to build society, a community and advance our future business plans as a people.
We have to keep that in mind because there is only one taxpayer. Perhaps in getting a sense of security we would lose a couple of points. We could save because we know that even in the last results the Canada Pension Plan Investment Board lost $1.5 billion on stocks, just from April to June. We know that the money could have been paid off through lending to municipal projects or provincial projects that were actually offering successful rates of return. It is actually a win-win.
There is a real problem with regard to the bill and the lack of public participation. We have a problem with regard to the actual reporting of the board. It has 12 members. We know that they will be selected by the minister and they are going to be above reproach.
We have a situation where the fund will be up to $150 billion by 2012 and there will have been only four board meetings accountable to the public by then, one every two years. We will have $150 billion potentially and the board will only have to report to Parliament and to the citizens of Canada four times. That is incredible. It is an incredible public trust on people who are appointed through a patronage system and I do not think it is proper. It is shameful because it puts this situation at risk.
Canadians are looking for more stability now. We have our situation with our health care, our pensions and with regard to deciding upon where we want to move forward with social planning. We do not want to put things further at risk. For that reason, I cannot support this bill. I believe it should be turned down by the government, especially in the time frame we have right now.