Debates of Nov. 5th, 2002

Public Safety Act, 2002

[The Acting Speaker (Mr. Bélair)]

In fact, I had forgotten to tell the hon. member that there are six minutes left before private members' business.

[Jean-Yves Roy, Bloc, Matapédia—Matane, QC]

Mr. Speaker, I will try to make my speech as short as possible.

[Serge Cardin, Bloc, Sherbrooke, QC]

There is either too much time or not enough time.

[Jean-Yves Roy, Bloc, Matapédia—Matane, QC]

As my colleague from Sherbrooke says, there is either too much time or not enough time. In my opinion, there is surely not enough time. I would point out that we are talking about a bill that is an improved version of Bills C-55 and C-42, that is, Bill C-17.

When I spoke before on Bill C-55 as well as on Bill C-42, I asked myself a very basic question: Was Bill C-55 really necessary? Was it not in fact legislation introduced, let us say, at a very critical moment, in a wave of panic, after the events of September 11? And we all thought then, after seeing the legislation, that the government actually already had all the means it required to respond to what happened as a result of the events of September 11.

However, the debate continued. We made representations, particularly as regards controlled access military zones, about which we were very concerned. During oral question period and in our comments, we often mentioned, as an example, that overnight the federal government could unilaterally decree Quebec City a controlled access military zone, since there are military facilities within that city.

Fortunately, the government realized the excessive nature of Bill C-55. The issue of controlled access military zones is completely or almost completely solved, largely because of the work of opposition and Bloc Quebecois members. This proposal was removed from the legislation in the form that it had when Bill C-55 was introduced.

The other issue is that of interim orders. We also fought this proposal when it was made in Bill C-55 and, later on, in Bill C-42. Bill C-17 also includes provisions on interim orders, but the timeframes for their tabling in Parliament and approval by cabinet have been considerably reduced. However, these interim orders and timeframes remain. Our main problem is the lack of prior verification for compliance, as the hon. member for Laval Centre mentioned earlier. There is still no prior verification for compliance in the case of interim orders.

The third problem that we mentioned at the time was the exchange of information. Personally, I am very concerned that the government may again create a file that will include information on a large segment of the public, on travellers, on air passengers. This file will be created. The government says yes, but the information that will be included in this file will have to be destroyed within 48 hours by the Royal Canadian Mounted Police. However, a small provision provides that, if necessary, the RCMP will be allowed to keep this information for a longer period.

I am quite concerned about this file that would be set up. We have seen cases in the past where files have been created. Orders were even given for those files to be destroyed. Just think about the Department of Human Resources Development, for example. Later on, we discovered that, unfortunately, the files had not been destroyed, that they still existed and that they contained a great deal of information about people.

At the time, a lot of the information was false. The data were completely wrong because the file had not been properly kept. Somehow, all the information got mixed up. So I am concerned about that. Unfortunately, this kind of file is still mentioned in the bill. The privacy commissioner also shares this concern.

Finally, I would say that, as citizens, we are the ones responsible for protecting our privacy. As citizens, it is our responsibility to tell the government that we will not accept any further interference in our private lives and that we do not want the government to create files. We will not allow the government to once again take our privacy and use it for its own purposes, whether the motive is security or something else.

[The Acting Speaker (Mr. Bélair)]

I must inform the member for Matapédia—Matane that he will have 14 minutes left when we resume debate on Bill C-17.

It being 5.53 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

Pension Benefits Standards Act, 1985

[Pauline Picard, Bloc, Drummond, QC]

moved that Bill C-226, an act to amend the Pension Benefits Standards Act, 1985 (investment criteria), be read the second time and referred to a committee.

Mr. Speaker, I would first like to thank my colleague from Sherbrooke for seconding this very important bill. I am a bit disappointed because I know that Parliament refused to make it a votable item. I would still like to make you and the population aware of the intent of this bill.

The purpose of this bill is to amend section 7.4 of the Pension Benefits Standards Act, 1985, by adding the following after subsection (1):

(1.1) The administrator shall, after the end of each fiscal year, prepare a report setting out the social, ethical and environmental factors that have been considered, during that period, in the selection, retention and liquidation of investments under the administrator's responsibility and in the exercise of any rights related to those investments, including voting rights, and shall provide a copy of the report, free of charge, to every member who requests it.

What this means is that pension fund administrators, such as those responsible for the government's superannuation fund, would be required to prepare a report to inform the shareholders of the factors that were considered in the selection of investments.

This bill asks: why did you invest in a particular company and how did you invest? It does not require pension fund administrators to make socially responsible investments, but it is a step in the right direction. Administrators would be required to tell us why they invested in a particular company. It is a small step in the right direction but, unfortunately, the government chose to ignore it.

However, other countries have done something about that. For example, in July 2001, France enacted legislation to include in its social security code the requirement to take social, ethical and environmental factors into account.

Until now, both the law and the practice limited this legal concept, simply requiring administrators to defend the proprietary interest of investors in the funds. Beyond the quest for a satisfactory financial return, we are now looking at the means to achieve that. Are all the means acceptable? That is the question we must ask ourselves.

I know that pension fund administrators have an obligation to ensure a high return on the investments for which they are responsible, but more and more countries are adopting a code of ethics that prohibits them from investing in companies that have no respect for human rights.

It is not the first time that the Bloc Quebecois has spoken in favour of socially responsible investments. Since Parliament will not vote on this issue, members can be sure that I will make other efforts to have a simple principle included in legislation: that social, ethical and environmental factors be taken into account in pension fund investments.

It is possible take action to ensure that the funds destined for providing a future for the men and women of this country are not invested in companies the operations of which are liable to increase the social and environmental risks to which we are exposed.

This means that, if people were more aware, or if they were to learn that their savings were invested in companies using child labour for instance, in order to get a high rate of return, would these people who entrust their savings to administrators not make those administrators more aware of how they feel, by telling them “We want a high return, yes, but not at any price”.

I gave an example of companies using child labour. There are also companies that pollute our environment. We know that there is increasing public awareness of those industries that emit greenhouse gases. The investors are more and more aware. They do not want to see their money going to help pollute the planet. That is why I say it would be desirable for fund administrators to have the possibility of putting a code of ethics in place so as to be able to listen to their investors and to be more attuned to where investments should go.

We are all aware that, in this era of globalization, companies move from one country to another according to the laws of the market place. Unfortunately, what attracts companies to certain countries too desperate to refuse such investments is their lack of respect for human rights, social rights and the environment.

Socially responsible investment consists in integrating social or environmental criteria, or both, into every investment decision, without giving up on financial advantage. These criteria are complementary to the traditional financial analysis, and make it possible to have specific investment funds tailored to an individual or institutional clientele.

In its final report tabled last January, the Canadian Democracy and Corporate Accountability Commission reached a consensus on 24 recommendations. As well, a national survey carried out between September 28 and October 8, 2001 by Research and Development Inc. concluded that Canadians, as well as Quebeckers, whether business people or not, are wondering more and more about businesses' responsibility to the society of which they are a part.

France, the United States, the United Kingdom and Germany already have innovative policies in place. In the U.K., there is a minister whose portfolio covers corporate social responsibility. In the U.S. a number of states have expanded the powers of company boards. The European Union has even published a discussion paper on corporate social responsibility.

What has Canada done? If it had been chosen as a votable bill, Bill C-226 would have been a first step. Instead, Canada is sitting back and falling far behind compared to other countries that are pioneers when it comes to making corporations more socially responsible. While Canada is lagging behind, initiatives are sprouting up all over the place. After the wave of activist shareholders, now we are seeing portfolio managers who can be considered equally activist.

The unions have also discovered that they wield considerable power through their members' pension funds. This is the case with the CSN and the FTQ, who are interested in the socialization of capital.

In Ontario, one of the largest pension funds, the Ontario Teachers' pension plan, has adopted the following policy:

Consequently, non-financial considerations cannot take precedence over risk and return considerations in the management of the pension fund. Nevertheless, we believe that careful consideration of issues of social responsibility by companies and their Boards will enhance long-term shareholder value.

In the United States, one out of every eight dollars in pension plans will be invested in socially responsible investments. This will likely increase, since we have seen how people are concerned about financial scandals. More and more pension plan administrators are making socially responsible investments, with the support of their members.

Just this Friday, the University of Montreal announced that it was implementing a policy to invest in ethical funds. The university management came to this decision based on a report from a task force on responsible investing and purchasing. The university accounts add up to close to $2 billion. That is a lot of money, when you think of $2 billion for the University of Montreal alone.

From now on, the pension plan administrators will ensure that all of their capital is invested in companies that are concerned about the social development of the societies in which they do business.

The decision made by the University of Montreal is not unique in Canada. The University of Toronto is already on stream. Chances are that this is a growing trend and that other Quebec universities will follow suit.

In Canada, we find that without a clear definition of their fiduciary obligations pension plan managers believe that they do not have enough flexibility to take social responsibility into account when making a decision. Such managers do not want the rate of return to be relegated to the back seat. They lack the framework and the legislation that would give them the authority or the means to consider ethical factors. These managers are afraid of being accused of not yielding a high rate of return. This is why today it is very important to raise the issue and give these managers in Canada a code that would allow them to invest in socially responsible investments.

Such investments are not aimed at diminishing the wealth of the pension plan members. Several studies were conducted on the performance of ethical funds. The results do not confirm the fears of certain managers, who believe that ethical funds yield lower rates of return than similar funds.

In 1998, the Weisenberg firm looked at the performance of some 183 American ethical funds. It reached the conclusion that these funds had better rates of return than others in the same category, and that they have a slightly higher level of risk. So we should not be afraid of putting our money into funds where the companies are concerned with ethics, the environment, and support, or do not violate human rights. These 183 American funds that deal with ethical investments are said to have a high rate of return. This does not eliminate the level of risk, which is slightly higher than for funds that do not deal with ethical investments.

In conclusion, I will say that the debate on the social responsibility of companies is ongoing in our society. The purpose of the legislative amendment I wanted to introduce through Bill C-226 was to make the work of pension plan managers more transparent and to better inform plan members. Knowing what considerations were taken into account when making investments, employees could better influence the decisions made by their portfolio managers.

I will rise again later to properly conclude this debate.

[Geoff Regan, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, the Standing Committee on Finance is travelling the country as part of the prebudget consultations. Therefore, I am pleased to rise on behalf of my colleague and seatmate, the Parliamentary Secretary to the Minister of Finance, to speak today to Bill C-226 which proposes to amend the Pension Benefits Standards Act, 1985 with respect to reporting to plan members.

The interest of the bill's sponsor, the hon. member for Drummond, in this issue is appreciate and duly noted. I thank my hon. colleague for bringing this matter to the floor of the House for debate.

Basically, the amendment in Bill C-226 would require the administrator of federally registered pension plans to prepare an annual report on the social, ethical and environmental factors that were taken into consideration during the previous fiscal year in the selection, retention and liquidation of investments.

Before directly addressing the amendment, I would like to provide some background that will help to put this matter in context. I will begin with a general overview of the pension plan system in Canada.

As hon. members know, the purpose of pension plans is to provide retirement benefits for plan beneficiaries. Our system includes both public pension plans and private pensions. The public pension plans include the Canada pension plan, the Quebec pension plan and old age security.

Private pension plans consist of occupational pension plans, otherwise called registered pension plans. They cover both defined benefit and defined contribution plans which are provided as part of an employment contract. The PBSA sets minimum standards for registered pension plans.

The federal and provincial governments also provide tax assistance to savings in registered pension plans and retirement savings plans or RRSPs to encourage and assist income replacement in retirement. It should be noted that private pension plans are voluntary but must be registered, either federally or provincially.

The bill before us today proposes to amend the Pension Benefits Standards Act, 1985. The PBSA, as the act is usually referred to, is the main federal statute that regulates private pension plans in federally chartered areas such as banking, interprovincial transportation and telecommunications. Over 1,100 pension plans fall under the purview of this Act. The Office of the Superintendent of Financial Institutions, otherwise known as OSFI, administers the PBSA.

I should mention, too, that other federal statutes like the Income Tax Act impact on private pension plans. In addition, it should be noted that most private pension plans are governed by pension standards legislation in the provinces, except for Prince Edward Island, which is the only province without its own pension legislation.

The PBSA has several goals. It sets minimum standards for funding, investments, membership eligibility, vesting, locking-in, portability of benefits, death benefits and members' rights to information.

In its role as administrator of the Pension Benefits Standards Act, OSFI makes every effort to protect the rights of pension plan members, having due regard for the voluntary nature of pension plan sponsorship. OSFI is committed to ensuring that losses to plan members are minimized.

Bill C-226 focuses on the duties of pension plan administrators under the PBSA. As we know, a pension plan administrator is the entity responsible for running a pension plan. Allow me briefly to review their role.

In many cases, the administrator is the employer who established the pension plan. However the administrator may also be a board of trustees if the plan is a multi-employer pension plan or a pension committee defined in the terms of the pension plan.

The administrator is charged with several responsibilities, including ensuring that the pension plan and its funding are administered in accordance with the law and the provisions of the plan. Among other things, an administrator is responsible for: registering the pension plan and plan amendments; providing information to members; responding to member questions about the plan; prudently managing the pension fund; and filing required documents with OSFI. These are serious responsibilities.

May I remind the House that, back in 1998, this House passed Bill S-3, which included various measures designed to enhance the supervision of federally regulated private pension plans.

One of the changes back then included a means to facilitate agreements between employers and plan beneficiaries on the distribution of pension plan surpluses.

Of direct interest to this debate were two other measures in that bill, both of which affected pension plan administrators. Those changes included: enhancing plan governance by placing more emphasis on the importance of the responsibilities of plan administrators; and requiring the administrator to provide more information to plan members and former members on the financial condition of the plan.

Honourable members should also know that pension plan administrators have a duty-of-care requirement. This means that they must take all relevant matters and issues into consideration when making decisions affecting plan assets.

It is the plan administrator's duty to act in the best interest of the employer and the plan's beneficiaries. They have a fiduciary duty to maximize the rate of return, while at the same time ensuring the solvency and security of the fund and its ability to pay out promised benefits.

Turning to Bill C-226, let me say at the outset that I agree that transparency of pension plan investment policy is a key priority.

In my remarks today, I have outlined several measures in our current system, which ensure that this goal is met. Let me expand further.

As I indicated, the Pension Benefits Standards Act already requires that a pension plan administrator act in the best interests of the employer and the plan's beneficiaries.

In addition, the administrator is required to provide a written statement of investment policies and procedures—often called an SIP&P—with respect to the plan's portfolio of investments and loans to a member or other beneficiary, if requested. The SIP&P must communicate the investment philosophy of the plan administrator and, among other things, provide details on all categories of investments and loans.

Further, pension plan administrators must reference all factors that may affect the funding, solvency and ability of the plan to meet its financial obligations. These rules are already on the books.

Another built-in check in the system is the fact that pension plan members have the right to establish a pension council and the council may ask the plan administrator to disclose any ethical, social and environmental concerns taken into consideration in making investment decisions.

In other words, the current statute already largely meets the purpose of Bill C-226. The government believes that the Pension Benefit Standards Act and its Regulations establish the right climate to ensure that pension administrators are responsive to the concerns and objectives of plan members and employers. Under the current system, pension plan members through their pension councils have the flexibility to decide on the appropriate reporting for the plan—and this reporting could include ethical, social and environmental factors.

At this point, the government does not believe that reporting on these factors should be a requirement as proposed by this bill. Ensuring sound secure pension systems is a priority for the government. Recent reforms to the Canada Pension Plan together with recent PBSA amendments and regulations demonstrate this commitment.

I can assure the House that the government will continue to make changes to the Pension Benefits Standards Act when, and if, required. However, given the built-in checks and balances and the existing duties and responsibilities of pension plan administrators under the PBSA, the amendment we are debating today is not necessary.

Therefore, I am unable to support Bill C-226 and would encourage my honourable colleagues to follow suit.

[Scott Reid, Canadian Alliance, Lanark—Carleton, ON]

Mr. Speaker, I too am addressing Bill C-226, an act to amend the Pension Benefits Standards Act, 1985 (investment criteria). It is a very small act that would modify section 7.4 of the Pension Benefits Standards Act of 1985.

Section 7.4 of the said act has the effect of requiring the administrator of any registered pension plan to file certain documents. These are pretty straightforward under the current act. They simply give information to ensure that various duties are being carried out, that the administrator's name and address is provided, and that the names and addresses of the persons who work with the body, that is the administrator, if the administrator is some kind of corporate or collective body.

The proposed act would add the following:

The administrator shall, at the end of each fiscal year, prepare a report setting out the social, ethical and environmental factors that have been considered, during that period, in the selection, retention and liquidation of investments--

I will return to that in a second, but before I do I want to stop and say that the bill, whatever its merits, is a non-votable item, and that is regrettable. The whole question of the administration of our pension system is one that deserves to be discussed at length, including all private proposals on it. Indeed, all private members' business brought before the House ought to be votable, not to simply die after one hour's debate. I would go on at more length about it except that it eat into the time I have to debate the issue at hand.

The substantive comments I have in regard to the proposed bill fall under three heads. First, I want to mention the fact that the bill relates to our registered pension system. We have a number of pension systems in Canada that overlap the Canada pension plan which is a mandatory contributory plan that is income dependent and is meant to replace income. We have the old age pension and the guaranteed income supplement which simply provide a base level of income that no pensioner can fall beneath, regardless of their income during their working years. We also have a registered system, which is also like the Canada pension plan, contributory, but is administered outside of government under government regulations.

This group of pensions, which tends to be known as RSPs, registered savings plans, or RRSPs, registered retirement savings plans, is part of the pension system that is perhaps the most actuarially secure and which I think has the greatest promise of providing for the retirement income of persons who are reasonably far from retirement age due to the actuarial insecurity, both of the Canada pension plan and of the other pensions plans that I described.

The registration system, which the Pension Benefits Standards Act controls, has some benefits but it also leads to a great deal of administrative expense. This is a fundamental problem with our registered pension system. The costs that are accumulated over the life of a registered retirement savings plan to administer and to comply with the reporting requirements of the Pension Benefits Standards Act are very considerable. Because they are accumulated within the RRSP and prevent the RRSP from accumulating greater wealth over time, this actually results in each registered retirement savings plan being substantially smaller than it would otherwise be when it is rolled over. That is particularly true with regard to the smaller pensions that are accumulated by persons of more modest means.

It seems to me that in general the practice of requiring very detailed reporting of registered retirement plans is one that is not beneficial to pensioners and which could be amended easily by the government so as to provide the same level or even better level of security for pensioners but not the tremendous regulatory burden. Of course, the proposals that are put forward in Bill C-226 do add, to a modest degree, to that regulatory burden.

Let me go on to my second point, the question of whether this is needed. Is the kind of reporting proposed here needed? I can certainly see the reason why the hon. member, in proposing the bill, put forward these suggestions. She has a genuine concern that our investments in Canada be channelled into ethical, environmentally responsible and socially responsible investments. That is a worthwhile sentiment to have.

I do think it is worth noting that this kind of investment vehicle is already available in Canada. There are already ethical investment funds that set out different kinds of criteria. If we are particularly concerned about the environment and we wish to make sure that our investment moneys will go only to funds that are environmentally responsible, we can direct our money in that direction. Similarly, there are ethical investment funds that have made sure, for example, to steer clear of investments in foreign countries that engage in human rights abuses. Those vehicles are available as well.

It seems to me that in fact the need being addressed here is already largely being addressed by the marketplace itself. I worry when the government starts to interfere and get involved in this kind of regulation that rather than the openness that the hon. member talked about in her speech when introducing this bill we are going to see strict rules developed that would limit the kind of reporting that can go on. I think that is a very real concern. It is not implied in the text of this bill, but I think we need to be aware of that danger. This is often what happens when government gets involved in promoting openness. In fact, it does not promote openness in practice.

The next point I want to raise, and this deals directly with the text of the bill, is whether or not this would actually work, whether or not we actually would get the kind of openness in reporting that the member is hoping to achieve. Under the terms of the bill as it is written we would have a report once a year in which the administrator would set out the social, ethical and environmental factors that have been considered. What strikes me about this is that what the administrator is reporting on are the administrator's own motivations. As for self-reporting on something that went on within one's own head, I am not sure we can guarantee that we will get a full, open and honest consideration or revelation of what was going on. One always hopes that is the case but there is no guarantee, so for that reason I am not sure that anything is actually being accomplished through the bill.

If it is a corporate body, it is a bit different. I can see that perhaps there would be some revelation of the minutes of meetings and discussions that had gone on. Perhaps there would be some form of administrative guidelines adopted by the corporate group administering the fund to state that they do not want to invest in the following kinds of investments, perhaps investments that might in some way endanger an endangered species, or perhaps they want to steer clear of investments in areas where it might lead to human rights abuse or be seen as human rights abuse. I can see how that could be done, but I wonder if we would achieve the kinds of goals being laid out here through following the text of the law as it is written.

I do think that when we set out to write laws we ought always to remember, as they say, that the devil is in the details. It is not enough to express the sentiment. I think it is necessary to actually sit down and make sure that those sentiments will be reflected in concrete action.

I must say that the bill strikes me as being more a motion, and it would perhaps have been better to bring it before the House in the form of a motion, expressing the sense of the House and then encouraging the House to develop rules that are more concrete than those laid out here. As a bill I think it is not really that workable, although as I said before I do respect the sentiment that the hon. member is expressing in putting forward this piece of legislation.

[Wendy Lill, NDP, Dartmouth, NS]

Mr. Speaker, it is my pleasure to rise today to speak to Bill C-226, an act to amend the Pension Benefits Standards Act, 1985. The intent of the bill is to have an administrator prepare a report each year setting out the social, ethical and environmental factors that were considered in the investment of the money in the fund each year.

I am in total support of this private member's bill and I believe the NDP is as well. The NDP is in solid support of any measures which would strengthen and deepen the transparency and accountability of public pension funds.

Canadians depend on the viability of their pension funds. It is clear and simple. We need them for our old age and for times of vulnerability. Whether it is QPP or CPP Canadians with disabilities depend on these funds to provide them with income support when they are no longer able to work. We must have confidence that the investments which our pension managers are making are effective and we must ensure that they are ethical.

I agree with the member for Drummond that we must have a rigorous and regular reporting on how our funds are being invested because our future depends on it. This is in fact our future nest egg as a nation and as a people.

Recently my colleague from Winnipeg Centre spoke about Bill C-3, the act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act. He spoke about the alarming state of the Canada Pension Plan Investment Board. He asked the question which needs to be addressed by all parliamentarians: Is it a good idea for us to be investing on the open market with Canadian pension plan savings?

If we look at the actual experience in the last period of time since the Canada pension plan board was struck and put in charge of investing our hard earned pension contributions, the experience has in a word been terrible. One could have done better by playing pin the tail on the donkey when it comes to the stock market investments it made.

Unfortunately, the investment board chose to enter the stock market at exactly the wrong time. It was seduced by the high earnings in the bubble that took place in the high tech sector when people were getting returns of 20% and 30% per year on their investments. The board wanted a part in that but in fact entered at the wrong time and lost a fortune. It was our fortune.

Originally the board was given $11 billion to invest on our behalf. In the first return that came back it had lost $1.5 billion. Not only did this management board manage our funds badly but it then proceeded to reward the chief administrator of the fund. In the first quarter financial statement the board doubled the CEO's salary even though he lost $1.5 billion in the first venture in the stock market. It also doubled his performance bonus. His performance bonus went from $140,000 a year to over $200,000 a year. If the board rewarded bad behaviour so generously I wonder what it would do if it showed a profit?

We seem to have adopted the worst corporate models in the structure of this board but not the best practices or some of the unique structures that we must have in place now to manage the money of Canadians. This is taxpayers' money being invested on the private market.

The fund has grown not because we have made smart investments but because the rate of contributions has been massively increased. It is now at $53 billion in spite of the fact that at the next quarterly report the board reported a loss of $800 million. In the quarter after that it lost $1.5 billion. In the quarter ending in September 2002 it lost $1.3 billion. The fund is hemorrhaging. We are making bad investments. The people we have put in charge of our retirement savings are investing badly on our behalf.

Whether it is a good idea or not to be involved in the stock market, we cannot argue with the fact that if we had not gone down that road there would be billions of dollars which would not be lost and would at least be sitting there and could in fact be invested in other ways. It could be invested in municipalities, in provinces, or in low interest infrastructure loans that would benefit Canadians. It would not have been invested offshore, which is the experience we have now.

The NDP promotes socially responsible investment of workers' benefit funds, such as the Crocus Fund in Manitoba. We support this bill. We support the call for any regular critique of the social, ethical and environmental considerations involved in the investment of our public funds. We support the idea of an ethical screen for the CPP investment fund through public hearings and consultations with those who have developed ethical screens in the private and cooperative sector. We support the ban of CPP investment in industries that harm people, such as big tobacco industries.

The considerable experience with ethical screening has shown that introducing an ethical screen when making investment decisions does not mean earning a lower rate of return on investment. Experience has shown that ethical investments not only enhance social capital but are financially wise investments as well.

The NDP is committed to continuing a publicly funded pension plan because it works. Our public pension system is the cornerstone of Canada's retirement system. The CPP has brought most Canadians seniors out of poverty and allowed them to retire in dignity.

We support Bill C-226 and the safeguards it would put in place to protect the ethical, environmental and social standards. I regret that so far the bill has not been made votable because it would have a considerable impact on strengthening the public pension plan structure.

[Inky Mark, Canadian Alliance, Dauphin—Swan River, MB]

Mr. Speaker, on behalf of the PC Party of Canada it is a pleasure to rise to take part in this debate on Bill C-226, an act to amend the Pension Benefits Standards Act.

This bill would amend the Pension Benefits Standards Act insofar as it would require the administrators of a pension plan to prepare a specific annual report. This report would summarize the social, ethical, and environmental factors that were considered during the previous fiscal year in the selection, retention and liquidation of investments under the administrator's responsibility. A copy of the report would have to be provided to every member who requested it.

The PBSA is an act respecting pension plans that are organized and administered for the benefit of persons employed in connection with certain federal works, undertakings and businesses. The Canada pension plan does not come under the auspices of the PBSA. This proposed requirement to compel an administrator to file a report listing the social, ethical and environmental factors that might have been involved when making investments seems, perhaps, redundant if, in fact, it is accountability on investment criteria that the private member is seeking.

One can only assume why this amendment was put before the House. Possibly the hon. member did not want any pension administrator investing funds in certain companies for various reasons, ethical governance breaches, companies having suspect foreign practices or companies operating with a poor environmental track record. These are important issues that the employees and employers party to any private pension plan in a federally regulated undertaking should take note of. However, there is more than one way to ensure that pension plan administrators invest in an economically sound and prudent fashion.

The increase of regulatory requirements, which is what this bill would bring, might not be the answer to any real or perceived accountability problem. Parliament should be looking at ways to reduce regulatory requirements as opposed to increasing them while still ensuring the efficacy of any legislation.

Bill C-226 proposes to amend subsection 7.4(1) of the act, ostensibly to ensure that the administrator's investments are ethically and environmentally sound, et cetera. This amendment might not be needed considering the other sections that already exist in the act.

Section 7 of the act currently stipulates how some administrators are appointed. This section could possibly be used to ensure that any administrator appointment invest according to the wishes of the employer or employee. There are accountability safeguards already in place. Section 7 reads as follows:

1. (1) The administrator of a pension plan shall be

(a) in the case of a multi-employer pension plan established under one or more collective agreements, a board of trustees or other similar body constituted in accordance with the terms of the plan or the collective agreement or agreements to manage the affairs of the plan;

(b) in the case of a multi-employer pension plan not described in paragraph (a), a pension committee constituted in accordance with the terms of the plan, subject to section 7.1, to manage the affairs of the plan; or

(c) in the case of a pension plan other than a multi-employer pension plan,

(i) the employer, or

(ii) if the plan is established under one or more collective agreements and the terms of the plan or the collective agreement or agreements to manage the affairs of the plan provide for the constitution of a board of trustees or other similar body, that body.

(2) In the case of a simplified pension plan, the administrator of the pension plan shall be the prescribed person or body.

7.1 A pension committee must

(a) if a majority of the pension plan members so requests, include a representative of the plan members; and

(b) if the pension plan has fifty or more retired members and a majority of the retired members so requests, include a representative of the retired members.

Thus, we already have in place provisions where investors can actually be involved in scrutinizing the investment.

Section 8 of the act also deals with accountability issues, namely the standard of care that must be exercised by administrators when investing funds.

Section 13 deals with information that the administrator must furnish to the Superintendent of Financial Institutions. Section 13 states:

The administrator of a pension plan shall provide to the plan members, former members and any other persons entitled to pension benefits or refunds under the plan, at the time and in the manner specified by the Superintendent, any information that the Superintendent specifies.

Section 13, if utilized, could possibly be used as a tool to get the information that Bill C-226 seeks without the amendment. In other words there are already sections in the act to do what the amendment intends to do.

Furthermore, not rooted in any legislation is the premise that pensioners need only ask administrators for the social, ethical and environmental indices he or she took into consideration when administering the pension's funds.

Should the administrator not want to furnish the information, there are certain avenues open to the information seeker. Some are legislated avenues and some are not.

In addition, if the administrator feels unduly constrained by various criteria concerning investment standards, environmental or otherwise, the pensions and pensioners might suffer financial hardship if an administrator shied away from excellent investment opportunities that have negligible environmental breaches.

The bottom line is that pensioners want money in their bank accounts so they can put food on the table and a roof over their head.

On strictly a housekeeping note, this amendment should not be proposed as subsection 7.4(1.1). Rather the new amendment should properly be placed with the rest of the administrative reporting requirements as listed under section 12. It is important to keep legislation coherent and all possible provisions that deal with similar matters should be grouped together. Section 12 is titled “Duty to Provide Information”. This, one would think, is where the amendment should go.

On a final note, sections 33 to 37 are the inspection and enforcement provisions of the act. Certainly at first glance they seem fairly well equipped to deal with unruly administrators.

[The Acting Speaker (Mr. Bélair)]

The hon. member for Drummond has five minutes to conclude this debate.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, the intent of Bill C-226 is to require the administrator of a pension plan to prepare an annual report on the social, ethical and environmental factors that have been considered, during the previous year, in the selection, retention and liquidation of investments under the administrator's responsibility.

That means the administrator presents an annual report and indicates how and why the funds were invested. Ultimately, the intent of the bill is to increase transparency regarding the choices made by the administrator of the workers' savings.

To answer the question of the government member, the legislative amendment will not force pension committees to make socially responsible investments. That would be desirable. That is what we would like, but this amendment would go as far as to compel them to adopt a policy of making socially responsible investments and informing the plan's members about it.

What we are asking for today is just a step in the right direction. Let us take that step and, later, we can strengthen the legislation or amend it to make that demand on administrators. For the time being, however, the responsible thing to do would have been for the government to support this bill, which would have allowed us to do so. Administrators would like to be required to submit an annual report, but this possibility is not available to them at present because of the absence from the legislation of a specific definition of what fiduciary obligations are.

Our government colleague said earlier that the amendment would impose an obligation on administrators. That is not the purpose of this bill. Noting in this bill will force pension committees to make socially responsible investments. What the amendment does say, however, is that it would desirable for them to do so.

Canada-wide, this represents nearly $600 billion, including $90 billion for federally regulated corporations. This money collected from the workers has become one of the major forces driving globalization. These investors have in their hands considerable power to influence the creation of sustainable development all over the world.

The legislative amendment would have businesses draw up a more detailed balance sheet than a mere financial statement. My colleague also said that all investors have to do is ask for the statement and the administrators will provide it. However, we seldom see a single investor ask for a statement. It would take someone with no concern for transparency to say, “No problem; they will get a statement if they ask for it”. Often, one has to go through access to information to get it. That can take months. These are cumbersome administrative procedures.

To ensure maximum transparency and flexibility, why not ask pension plan administrators to present an annual report—that is perfectly acceptable—and tell us how they invested our money?

Mr. Speaker, at this time, I wish to seek the consent of the House to make this bill votable.

[The Acting Speaker (Mr. Bélair)]

You have heard the question. Is there unanimous consent to make this bill votable?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. Bélair)]

The time provided for the consideration of private members' business has now expired. As the motion has not been designated as a votable item, the order is dropped from the Order Paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Roger Gallaway, Liberal, Sarnia—Lambton, ON]

Mr. Speaker, one of the most important issues facing consumers in the province of Ontario these days is the cost of hydro. As a result of that, a few weeks ago I posed to the Minister of Finance the question, why are Ontario consumers paying goods and services tax on what is called the debt reduction charge on their hydro bill?

The debt reduction charge is a device of the provincial government that is based upon a percentage of consumption. It is money which is extracted from hydro users in Ontario. It flows directly from their bill through their local utility to a corporation called the Ontario Electricity Financial Corporation which pays off the debt of the former Ontario Hydro.

GST is a rather innocuous thing; we pay 5¢ here or 7¢ there. Let us consider that Ontario residents are going to repay a debt which is in excess of $17 billion. On that amount, they have the pleasure of paying GST at the rate of 7% which amounts to more than $1.2 billion.

We are in the remarkable scenario where one level of government has written up a very large debt and another level of government will benefit because the other was incompetent. Let me give an example of how this whole scenario is so outrageous. If one were to borrow $1,000 from a bank at 10% and agreed to repay it in one year, one would pay $1,100 and would be done with it. If the bank were to call and say it wanted another $77 in GST, the person would be outraged.

People in Ontario are outraged because the finance department is saying the GST is fixed in, that there are a lot of reasons and it is all very technical, but it gets to collect more than $1.2 billion. The finance department is the beneficiary of the misfortune of the consumers in Ontario.

It is fine to say that Mr. Eves should change his position and should restructure his bill. That is easy to say in this place also. However the end result is that Ontario consumers are going to shell out $1.2 billion which we are going to receive here and we have delivered neither goods nor services. It comes as a great surprise to people who understood that the GST was to be paid if they received some tangible good or service. Neither apply in this case. The end result is that people are outraged.

We are now in a scenario where we should come around to something called equity, and I am referring to equity as being fairness. It is incumbent upon the finance department to think about the fairness of this. The finance department should think about Ontario consumers. Those who are hard pressed to pay their hydro bills are now enriching the finance department by more than $1 billion simply because they have the misfortune of living in Ontario where Ontario Hydro ran up a debt.

[Aileen Carroll, Liberal, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, I appreciate the opportunity to comment on the hon. member's question regarding the application of the GST to the Ontario debt requirement charge.

Let me begin by saying that the GST is calculated on the final amount charged for supply of a good or service. That final amount includes most federal and provincial levies, duties and fees imposed upon the supplier or the recipient of the supply. The debt retirement charge is part of the total price paid by consumers for electricity. As indicated in a Government of Ontario press release of October 17, this charge replaces debt servicing costs previously included in electricity bills as part of the price paid by consumers. In other words, consumers have historically paid GST on hydro rates. That included a component used to service Ontario's debt. The amount was not previously shown separately on the electricity bill.

The fact that electricity bills in Ontario now include an explicit charge in respect of debt servicing by the province does not affect the application of the GST. The general rule that was adopted at the inception of the GST is that any federal, provincial or municipal levy in respect of a good or service is included in the value on which the GST applies unless a specific exception is made for it. The notable exceptions are the general sales taxes of the provinces, which since the inception of the GST obviously have not been part of the GST base.

In accordance with this approach, the GST currently applies to all federal excise taxes and duties. The GST also applies to the air traveller's security charge. Some examples of provincial and municipal taxes and fees included in the GST base are gasoline and tobacco taxes, liquor taxes or mark-ups, environmental levies such as the tire taxes, parking fees, and certain utility surcharges. This approach therefore maintains the broad base and the fairness of the GST.

Finally, I would add that the Government of Ontario made the decision to charge Ontario electricity consumers for the servicing and repayment of the former Ontario Hydro debt through a charge applying to their consumption. The provincial government had every reason to expect that by adopting that particular approach GST would apply in the normal manner, consistent with the approach I outlined earlier. Had the province of Ontario decided to fund the servicing and repayment of the debt through general taxation revenue there would have been no application of GST, again consistent with the normal rules. Again, it is just the Ontario government not taking the route that was available to it.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, on October 30, I asked the Minister of Foreign Affairs a question on the confinement in a Maine jail of Michel Jalbert. Mr. Jalbert was jailed for neglecting to declare a gas purchase made at a gas station located on the other side of the border. Mr. Jalbert was arrested on October 11.

In response to my question—and I thank the foreign affairs minister for this—somebody was assigned to meet with Mr. Jalbert and his lawyer to make sure that he was treated fairly and rapidly. Unfortunately, even though Larissa Blavatska, the person who has been assigned to his case, has met with Mr. Jalbert, it seems that the American authorities still want to make an example of this case.

I would urge the foreign affairs minister and his department to double their efforts, to return to the charge and to approach the American government once more. We obviously cannot interfere with the American judicial system, but I think that we have pertinent information that could be communicated to the Americans.

For example, there is a precedent dating back to 1980. There is a letter on file that shows that Americans were tolerant of citizens who went to buy gas at this station. There was a practice that had been accepted for a long time. Also, Mr. Jalbert is not a terrorist. He is not someone who intended to cross the border to commit some crime.

Despite the climate that exists on the American side and that we can understand because of the whole issue of terrorism, I am asking the minister and the Department of Foreign Affairs to make additional efforts to ensure that Mr. Jalbert rapidly receives fair and equitable treatment and, if possible, is reunited with his family before Christmas.

Unfortunately, at the present time, if he does not plead guilty to the charges, he may stay in jail for several months. We are talking about two to six months. If he pleads guilty to the two charges, he will have to face the immigration officials.

Thus, in this situation, I think there is room for some common sense. The department must continue to take action that will persuade the Americans to agree to treat this case as what it is—an unfortunate situation in a context where the Americans have tolerated the same thing by many people in the past.

I ask the department to take further action along these lines.

[Aileen Carroll, Liberal, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, first of all, I would like to thank the member for his work on this case.

Our colleague and members of Mr. Jalbert's family can rest assured that our consular representatives in the United States are taking this case very seriously and that all appropriate consular services will be offered to Mr. Jalbert. We will also continue to provide Mr. Jalbert with all the help he needs.

The authorization to allow foreigners or visitors into a country is the sole prerogative of that country alone. In Mr. Jalbert's case, the country in question is the United States. After September 11, the Immigration and Naturalization Service of the United States implemented the changes made in the American immigration legislation. That legislation was strengthened and is being rigorously enforced.

Since September 11, the Canadian government also made changes in its own legislation and its personnel at the border. We also want to strengthen security at the Canada-United States border, while ensuring the free circulation of goods and people.

We know that the new security measures put in place by our two governments closely affect residents of communities located along the Canada-U.S. border. In several places, it is no longer possible to cross the border as easily as it used to be. This is a reality that we must adjust to, regardless of where we live, whether it is Windsor, in Ontario, Coutts, in Alberta, or Pohénégamook, in Quebec.

However, rest assured that we continue to work in close cooperation with the U.S. authorities to establish an intelligent border for the 21st century, an effective and safe border, a border that is closed to terrorism, but open to trade.

Over 300,000 persons cross the Canada-U.S. border daily. In the vast majority of cases, these crossings do not pose any problems. Unfortunately, in some cases, people are stopped by Canadian or American customs officials because they violated the laws of the country.

As for Mr. Jalbert, he was arrested, according to U.S. authorities, because he crossed the border without the necessary authorization. According to the U.S. customs officer, he was also in possession of a firearm. Moreover, U.S. authorities said that Mr. Jalbert did not legally have the right to enter the United States, because of his criminal record. Like all Canadian citizens, Mr. Jalbert has the right to see a consular official while he is jailed abroad.

On November 1, a consular officer from the Canadian consulate general in Boston travelled to Bangor to meet with Mr. Jalbert and his lawyer. Our consular officer was able to talk with Mr. Jalbert for close to 30 minutes. She explained the charges against Mr. Jalbert. She also offered her complete support if Mr. Jalbert and his lawyer needed her help.

However, the consular officer cannot put an end to the legal proceedings. Her role is to ensure that Canadian nationals imprisoned abroad are treated properly.

It is up to Mr. Jalbert and to his lawyer to take the necessary decisions about the charges laid against him.

Our thoughts are with the family and friends of Mr. Jalbert. They can rest assured that Mr. Jalbert is benefiting from the complete support and services of our consulate general in Boston. We hope that this issue will be positively resolved as soon as possible. Obviously, the Government of Canada intends to do everything it can to help Mr. Jalbert.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I will use the minute I have left to reiterate the need to increase the number of representations.

I have a letter signed by a U.S. treasury department customs official on June 18, 1980, that clearly claims a certain tolerance at this border point.

We are indeed asking for a smart border, in other words a border where customs officials can make decisions according to reality, having regard to the actual circumstances. The idea is not to exempt Mr. Jalbert from the application of the law. He told me this personally. I think he learned the lesson of his life at this border point.

Would it not be possible for the Canadian government, by circulating this document or using some other means, to keep making representations without being accused of interference with the U.S. legal system, so that Mr. Jalbert can go back to his family and we can resolve the custom issue in Pohenegamook? The bottom line is that the cause of the present situation is much more than a simple matter of physical installations.

[Aileen Carroll, Liberal, Barrie—Simcoe—Bradford, ON]

Mr. Speaker, I appreciate that this area of Quebec and the adjacent American property is an area which in the past always had an easy and relaxed border. Unfortunately since September 11 there are few easy and relaxed borders.

I will say that we do appreciate very much the work that the hon. member is doing on this. Mr. Jalbert is receiving the services and the full support of our consular representative in Boston as well as the services of an American lawyer, but he must now make a decision with regard to the charges brought against him. We are not in a position to comment on the legal process underway.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, on October 30, 2002, I asked a question in the House of Commons. My question started like this:

Mr. Speaker, the employment insurance fund has a surplus of $40 billion. The Auditor General says that this is $25 billion too much.

Under the law or the regulations, a cap of $15 billion is adequate for the employment insurance fund.

My question was for the Prime Minister and I asked him if he was “not tired of balancing the budget on the backs of workers who have lost their jobs?” Was he not tired of seeing all those workers who had lost their jobs and of taking their contributions to balance his budget or to get rid of the deficit? The Prime Minister answered as follows:

Mr. Speaker, the member should appreciate the fact that when we came to power, the premiums were supposed to be $3.30.

We cancelled the increase planned by the Tories and reduced the premiums for workers and employers. Workers now contribute $2.20. I presume this will continue to drop as the economy continues to perform well.

He went on to say:

There are 2.5 million more people working in Canada since we implemented sound economic policies for the country. I hope the hon. member will one day acknowledge this.

How can I acknowledge this when, just yesterday, we heard again in the media that 300,000 children have to rely on food banks every month? That is the Liberal legacy. They should not be proud of that.

In a few moments, the Parliamentary Secretary to the Minister of Human Resources Development, the member for Laval West, will rise, and I am eager to hear what she has to say about my question and these comments. Following the 2000 elections, the parliamentary committee made proposals to the government. We all agreed that changes to the employment insurance plan were required.

It is not the first time that I say in the House of Commons that I have never seen anyone protest in the street because premiums were too high. I have never seen an employer cry because premiums were too high. But I have seen people cry because they could not get employment insurance. People phone my office because we have a 20% unemployment rate.

My question is for the government. Was employment insurance not created to help the workers? In 1989, members of Parliament voted unanimously to end poverty in Canada. Only yesterday, we learned that 300,000 children go to the food bank every month. The federal government cannot be proud of what it has done to our economy. Where did the 2.5 million people who got jobs come from? Are they foreigners who have settled here?

People are still not working in my riding, where the unemployment rate is 20%. Where are the economic programs that were supposed to put the people back to work instead of helping big cities like Toronto, Vancouver, Montreal, Laval and other such areas? It just does not cut in my riding. Some of our unemployed cannot even get EI benefits. Even the Auditor General has said that the surplus is $25 billion too high.

I would like to know what the federal government intends to do to solve this problem and help the unemployed, to whom the EI fund belongs?

[Raymonde Folco, Liberal, Parliamentary Secretary to the Minister of Human Resources Development]

Mr. Speaker, I thank the hon. member opposite who asked for clarifications on such a complex issue. In spite of his good intentions, I would like to correct some of the points he made, which I feel are completely wrong.

Allow me first of all to say that we have taken a balanced and careful approach in our management of the employment insurance account, improving the benefits and reducing the premiums.

In fact, the employment insurance plan is working well. It is strong and meets the needs of Canadians when they need help. According to the 2000 Employment Insurance Monitoring and Assessment Report, 88% of paid Canadian workers would be eligible for benefits it they needed them.

In fact the surplus in the EI account today is due largely to the fact that the economy is doing well and unemployment rates are lower. More people are paying premiums than collecting benefits, and this is good news.

Since 1986, the EI account has been consolidated with the books of Canada on the advice of the auditor general at the time. On March 19 the current Auditor General said, at the public accounts committee, and I quote, “In our view, this is the correct method of accounting and it complies with accounting standards”.

Moneys can only be charged to the EI account to be spent for purposes of the EI program but revenues in the account are available for general purposes until required for EI expenses. In recognition of the temporary use of EI revenues, interest is credited to the EI accounts when it carries a surplus.

We must be cautious in our management of the funds in the employment insurance plan in order to ensure its viability. Of course we do not want to find ourselves in the situation where we would have to increase the premiums to absorb a deficit.

The employment insurance premiums have been reduced over the last eight years. Indeed, we reduced the rates from $3.07 in 1994 to $2.20 in 2002. This decrease will allow contributors to save approximately $6.8 billion in 2002 compared to 1994.

I challenge the hon. member's comments about the employment insurance account. We have improved the benefits; we have extended from 25 to 50 weeks the parental and maternity benefits period. Mothers who apply for sickness benefits before or after having applied for maternity benefits can now get all their special benefits. The pilot project for small weeks is now an integral part of the employment insurance plan. We have removed the intensity rule and adjusted the clawback provision.

The member opposite was present at the committee meetings when we discussed this. Moreover, the employment insurance plan includes several provisions to help low income families. The Government of Canada is committed to keeping a close eye on the employment insurance plan and assessing it to ensure that it keeps meeting the needs of Canadians.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, the hon. member opposite says I was sitting on the committee. She is right. But she was also on the committee which recommended changes that her own government subsequently refused. I wonder why she recommended changes and why she is suggesting now that I do not have my figures right.

The parliamentary secretary is also telling us that, at this time, 84% of those who apply would qualify--