Debates of Dec. 13th, 2002

The House proceeded to the consideration of Bill C-3, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act, as reported without amendment from the committee.

Canada Pension Plan

[The Speaker]

There is one motion in amendment standing on the Notice Paper for the report stage of Bill C-3. Motion No. 1 will be debated and voted upon.

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

moved

That Bill C-3, in Clause 15, be amended by replacing lines 41 to 46 on page 9 and lines 1 to 5 on page 10 with the following:

“15. Section 37 of the Act is repealed.”

Mr. Speaker, I am here to discuss a very important amendment to Bill C-3, which is an act to amend the Canada pension plan and the Canada Pension Plan Investment Board Act.

In general terms the bill is a disappointment, not so much for what it includes, which is on the whole unobjectionable, but for what it fails to include. It fails to include measures that would make the management board politician proof, that is completely secure from political interference, and it also fails to ensure that the Canada pension plan money that is invested through the investment board--and we are talking about an amount that will eventually total something in the nature of $100 billion--cannot be used for any purpose other than maximizing the rate of return for the beneficiaries of the Canada pension plan, which is the only purpose for which pension moneys should ever be invested and not, for example, some of the proposals that have been made in the course of the discussion of this bill.

Pension moneys should never be invested for the purpose of industrial or regional development, or for the furthering of ethical as opposed to other types of investments. If we choose to make the decision, for example, that we want to forbid the investment in certain areas, we ought to make it illegal to invest in certain areas. We ought not to lower the rate of return that the Canada pension plan earns by restricting it from investing in these areas.

These were all proposals that had been made, some of them by the former minister of finance, the member for LaSalle--Émard, who was the author of the bill.

The amendment I am proposing today is designed to eliminate one of these limitations, the most important of the limitations, upon the invested returns that the Canada pension plan can expect to earn through its investment board. This is the provision that forbids more than 30% of the moneys invested through the Canada Pension Plan Investment Board from being invested outside Canada.

Let me explain the technical aspects of the amendment I am proposing. I have referred in the amendment, in section 15 of the bill, to another section of another bill. The way section 15 currently is worded, it makes a series of changes to section 37 of the Canada Pension Plan Investment Board Act, a prior act that was passed several years ago. Section 37 of the Canada Pension Plan Investment Board Act refers in turn to a section of the Income Tax Act which states that pension plans, whether they be corporate, union or registered retirement savings plans, are not permitted to invest more than 30% of their assets outside of Canada.

What I am proposing is to change section 15 of the act currently under consideration to now read, “Section 37 of the Act...”, that is of the Canada Pension Plan Investment Board Act, “...is repealed”, thereby removing the cap on the percentage that might be invested outside of Canada.

The reason for this is straightforward. The Canadian economy represents something between 2% and 3% of the total world economy. When a decision is made to restrict the percentage of the Canada pension plan moneys that can be invested outside of Canada, we make the decision to take that 70% of Canada pension plan money and require it to be invested in less than 3% of the world economy, and not, I might add, the fastest growing 2% to 3% of the world economy.

We make a decision therefore to reduce the rate of return that will be earned by that 70% of the Canada Pension Plan Investment Board money. To give a sense of just how significant this is, in committee I asked the chief actuary of Canada, who was appearing as a witness, what the rate of return would be on the three main components of the Investment Board moneys.

The three components are a series of provincial government bonds which earn, quite frankly, a very unsatisfactory rate of return, largely because of a sweetheart deal that was cut with the provinces by the government and the former finance minister in order to secure the support of the provincial governments. This ensures that they will get a preferential, extra low rate of interest on the bonds that they sell to the Canada pension plan. This will result in billions of dollars, which should go into the pension plan and eventually be paid out to Canadian pensioners, being taken out instead and given to the provinces to be used on whatever projects they see fit.

The second component is the money that will be invested internationally. The expectation is that we will get a reasonably good rate of return; about 5.5%. The moneys that are invested in the Canadian equities market are anticipated to get about a 4.5% return. On that component, which is something in the neighbourhood of $25 billion to $30 billion, we should get a 1% lower rate of return out of the total capital per year. In fact, measured by comparison to the 5.5% rate of return, we can see it is substantially lower. It is about a 20% lower rate of return every year, year after year compounding, and therefore this will result in literally billions of dollars lost permanently to Canadian pensioners.

In the end, this will result in either the Canada pension plan having to hike its premiums yet further to well over 10% in order to pay for these benefits; or it will result in Canada pension plan benefits being cut so that pensioners will not get the moneys that they were promised. It may not happen to the current generation of pensioners, or at least those who are fairly well on in their senior years, but it will happen to those who are expecting to retire, as I am, some 30 years from now. They will almost certainly find themselves with a reduced--

[Peter Adams, Liberal, Peterborough, ON]

It will be sooner than that.

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

I can point out to the members who are making jokes that members of this House have a special pension plan that is set up to provide more generous benefits than those provided through the Canada pension plan. That of course is a consequence of the fact that we get to choose our own pension plan, whereas Canadians must live with whatever we give them. It seems to me that we ought to give them the best rate of return possible.

A woman who is aged 65 today and who has a 50% chance of living to be 90 will depend on the CPP to pay her benefits 25 years from now. If the pension plan is not secure and those rates are not guaranteed, she may very well find herself at 90 years old facing a cut in her pensions.

Could this happen? It already has happened. The former finance minister, the hon. member for LaSalle—Émard, actually did cut Canada pension plan benefits very slightly, but he did it nonetheless, when he was making his first run of changes to this plan several years ago.

There are a number of problems with the decision to put restrictions on foreign content for Canada pension plan investment moneys. One is, as I mentioned, a lower rate of return. A second one is a higher rate of risk. When we put all our eggs in one national basket we face currency risk. If the government continues to allow the value of the Canadian dollar to fall, and it seems to be a pattern that we have seen from the government, then we can expect to have the Canada pension plan pay substantially lesser returns than it would have. That is not calculated into the actuarial projections.

We can expect to see transaction costs. When we have a very large fund like this one working away in a single small market as a huge component of that market, it automatically bids up costs when it attempts to purchase into equities in that market. When it attempts to sell, it drives down the price. It automatically therefore suffers a substantial penalty. How much of a penalty? The curious thing is that when I raised this question in committee, the ministerial officials had not done any research on this topic. This very important factor is not taken into account in costing out this program and the rate of return. In other words, that 4.5% rate of return, which is already inadequate, is in fact illusory.

Something else happens. Because a plan like this is predictable in the amount of money that goes in and the amount of money that comes out, and we can look at actuarial tables, it is possible for other investors to predict when it will put money in and when it will take money out. They can, as the expression goes, “game the system”. They can plan to take advantage by holding back on assets when there is an attempt to buy in by flooding the market and making themselves buyers when the plan is tempted to sell out. That will result in still further reductions in the rate of return on the plan. This also is not taken into account.

As a final point I would like to note that despite the attempt, which I assume was designed to ensure that moneys would be captured within the Canadian capital market under this legislation, that is not what will happen. In fact, what will happen is that better informed investors that would have made wiser investments in the Canadian economy will be forced out by these large sums of money, and the result will be that no more money will go into the Canadian economy and it will go in in a less informed way.

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, shortly I will address the amendment before the House, but I first want address the Canada pension plan. We and the provinces have been joint stewards of this plan initiated back in 1997 in terms of the reforms. In the early 1990s, the Chief Actuary of Canada questioned the sustainability of the Canada pension plan. This government, along with its provincial partners, heeded that warning and we now have reforms that of course bring forward a schedule of increases in CPP contribution rates. We are building up a larger asset pool before baby boomers retire. As we know, the fact was that the moneys were not keeping up and the pool would have dried up. Therefore, investing in the markets at arm's length is another important requirement, which we have in this legislation. As well, slowing the growth costs of benefits through administrative and expenditure measures is very important.

Hon. members will recall that a key element of the reform was a new market investment policy for the plan, and the CPP Investment Board was established. Clearly the need existed for an independent organization, and I stress that because it is very important to note the independence of the board.

Prior to 1999 when the Canada Pension Plan Investment Board began operations, the investment policy in place for CPP required that the funds not immediately needed to pay the benefits be invested in provincial government bonds at a federal government interest rate. That policy of course resulted in an undiversified portfolio of securities and an interest rate subsidy to the provinces.

Fortunately, now that we have the CPPIB, we have an investment market policy. Since 1999, the funds that are not immediately required to pay benefits and expenses are transferred to the board and are prudently invested in a diversified portfolio of market securities in the best interests of the contributors and the beneficiaries.

I would point out that we have an all star board of directors, with its members recommended by provincial finance ministers in conjunction with the federal Minister of Finance. They manage prudently, as I have said, billions of dollars on behalf of Canadians. The board is fully accountable to CPP members and to governments through annual reports and material on the website, again making sure that although it is at arm's length from government it is accountable to Parliament and to the very people who benefit from the plan.

It is a market investment policy that is of course consistent with other pension plans. One might think of OMERS, the municipal employees retirement system, or the Ontario teachers' pension plan, which some members are familiar with.

It is important that certain assets have remained with the federal government. These assets included an operating reserve of about $6 billion and a large portfolio mostly made up of provincial government bonds valued around $32 billion. Under Bill C-3 these remaining assets will be transferred over a three year period to the CPPIB. That of course is very important. As I have said, we have an outstanding board made up of investment professionals, people who know how to invest money, and they are doing it in a prudent fashion. That again is important for all members to note.

Here we are developing a more coherent policy in terms of investment, which I think is important for those who will benefit from this plan. A point that must be stressed is that it puts it on the same footing as other public pension plans, providing CPPIB investment managers with the flexibility to determine the appropriate mix of investment strategies for the Canada pension plan, which again I think is important. It is also important to remember that the transfer of the remaining assets over the three year period will help to ensure that the transfer is absorbed smoothly by the capital markets and the CPPIB in terms of the provincial borrowing programs as well.Again, this is extremely important.

The amendment being proposed here has to do with section 37 of the Canada Pension Plan Investment Board Act. The issue is one of the foreign property rule. I will not support the amendment, because in terms of government policy the 30% limit strikes a balance between two important objectives that I think the House should be aware of: ensuring that there is a significant portion of tax assisted retirement savings invested in Canada and providing diversification opportunities for pension plans and RRSP owners. The government is conscious of the need to maintain an appropriate balance. The minister certainly is aware of achieving those objectives and making sure that the impact is appropriate. The foreign property limit was increased from 20% in 1999 to its current 30%.

In fact, I will provide some background history for those members who may not be aware of this. During the initial period of the reforms in 1997, as I have said, expanding the foreign property rule was in fact part of those very discussions. It was a key recommendation from the Senate banking committee from its review of the legislation.

We know that initially in the 1971 budget it was at 10%. Of course what has happened over the years is that we have increased it to 20% and now to 30%. I think that is prudent. I think that makes a lot of sense. Again this is in keeping with government policy. I think it provides the objectives we need in terms of the plan.

[An hon. member]

A good balance.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

My colleague says it is a good balance. It is very important to maintain balance, both domestically and abroad. Again, we want to make sure of this. Obviously the objective is important in terms of making sure that it is consistent, and consistent with other plans. That is why I will not support the amendment of my colleague across the way: It would not be consistent. I have already said that in 1999 we increased it from 20% to 30%, so we are continually reviewing the foreign property rule. It is not as though we have not responded to this issue. In fact, we are continuing to do so I think in a very responsible way.

We need sustainability. Sustainability is very important, as I have said before. If we had not increased the dollars that were going into the plan from contributors, the benefits would have gone up while the amount of money going into it was going down. It would have dried up. What has happened is that the rates will go up faster than they otherwise would have, but not as high as they could have because of the prudent, responsible and appropriate steps taken by the government.

On this side of the House we recognize the issue of the foreign property rule. We recognize that we have increased the percentage, but I do not think it would be appropriate at this time to take the steps outlined across the way. I would urge hon. members not to support this amendment.

[Peter Stoffer, NDP, Sackville—Musquodoboit Valley—Eastern Shore, NS]

Mr. Speaker, it is a great pleasure to rise on this debate. One of the biggest concerns the New Democrats have had, and my colleague from Regina—Qu'Appelle has been mentioning it for quite some time, is the fact that the entire Canada Pension Plan Investment Board exists without an ethical screen.

Whether the Alliance has an amendment or whether the Liberals want to fool around and sort of debate that issue a bit longer, the reality is that in many instances we will be using pension dollars to the detriment of Canadian society. One of the items I brought up before, and that I will bring up again and again, is a question I asked at the committee hearing we had less than a couple of weeks ago. I asked Mr. MacNaughton, the head of the pension board, if right now we are using Canada pension investment dollars from Canadians across the country to invest in companies such as tobacco companies. Without hesitation, he said yes. At the same time the federal government invests millions of dollars to try to get Canadians to stop smoking.

I know that the government is saying it should be an arm's length board, which eventually means out of reach, but that is what it is, and the government is saying the board should be able to invest the funds as it sees fit being that it is a board of eminent people who have great experience in investing large amounts of money throughout the country and internationally. No one is going to argue their individual or probably collective successes, but the Government of Canada and Canadian parliamentarians do have an obligation in regard to the health and safety of Canadians. The reality is that there should have been an ethical screen at the pension board to ensure that our dollars do not go to the detriment of the health of Canadians. For the life of me, I cannot see why anybody would argue the facts on why we are investing pension dollars in tobacco companies.

There is another concern we have. Pension dollars are from employees and employers. What happens? With the 30% investment rule, the pension board can be investing in companies in the United States, for example, that could conceivably manufacture, sell and create landmines. We do not know, because there is no ethical screen. The fact is that this country signed the landmine treaty to abolish and get rid of landmines throughout the world. We were very strong on that. The former foreign affairs minister, Lloyd Axworthy, said that himself, but yet our pension dollars may very well be invested in companies in the United States that manufacture landmines, or anything else for that matter. It could be nuclear weaponry. We simply do not know.

If these companies are publicly traded companies or a privately traded companies, if that is the correct terminology, on the various stock exchanges around the world, the pension board can invest in those funds. That is what makes us nervous. We do not believe that the pension dollars of Canadians should be going into those types of companies. That is why we demanded and insisted upon an ethical screen. Unfortunately we cannot support this type of legislation until that type of screen is put in place.

There is another thing that just boggles the mind here. With the 30% foreign investment rule, the reality is that the pension board can be investing in companies that are in direct competition with Canadian companies. One wonders what we are doing. Pension dollars should be going to benefit Canadian companies and the Canadian public at large. We should not be investing in companies that compete directly with our own. That inadvertently is what is happening. We think that should change.

We think that Canadians by and large want a pension plan that will be there when they need it. We think there are alternative methods, such as labour venture funds and environmental funds et cetera, that would actually not only bring a rate of return that is satisfactory to Canadians but also would help build this country by helping help small business, labourers, and the disenfranchised. Our country would become better and stronger by investing funds internally and building up the assets of the country. We think that is the way to do it.

I will repeat it one last time before I sit down. We should not in any way, shape or form be using pension dollars to invest in tobacco companies or companies of that nature that do harm to the Canadian people.

At the same, if we are going to invest millions of taxpayer dollars to get people to stop smoking, then we are being very two-faced. Again, it is hypocrisy at its greatest.

We should ensure that we do not invest that money in companies that, for example, make landmines. Also, we should not invest in companies that compete directly with our Canadian companies. Again that is being two-faced.

If the government brings in those changes, the New Democratic Party will again look at the pension investment board.

Before I sit down, Mr. Speaker, on behalf of the party, federally and provincially, we would like to wish you and all the workers, staff and members of Parliament on the merriest of Christmases and a happy new year.

[Loyola Hearn, Progressive Conservative, St. John's West, NL]

Mr. Speaker, I will be extremely brief. We support the bill.

[An hon. member]

Of course you do.

[Loyola Hearn, Progressive Conservative, St. John's West, NL]

My colleague says, “Of course you do”. Everyone should support this. The changes recommended will strengthen the protection aspect of the Canada pension plan.

My colleague talked a lot about investing locally. Nobody has a problem with investing locally within Canada. However the board has the responsibility of creating and protecting a fund for every Canadian as he or she reaches retirement age. It has to ensure that there will be something there at the end of the day. If we invest for investment's sake and not worry about the return on the investment, then I am afraid our future will be very insecure.

If we look at the history of the Canada pension board, which goes right back to the work done by the Diefenbaker government and eventually it came into effect, there were concerns about the amount of funds within the fund to deal with more and more people who were coming on stream.

As we advance through the years, we have more people involved in the labour force and more people are paying into the fund. However we are reaching the stage where a bulk of retirees each year are starting to draw from the fund. We have to have a good board investing wisely with proper transparency and accountability. If we do what the NDP suggests, invest locally for the sake of investing and not worry about the return, we might help local industry somewhat and local business but we could ruin the pension plan. We have to be careful. We can keep that in mind and invest where there are good investments and good returns on those investments.

If we do not get good returns for our investments, down the road there may be nothing in the fund. Whereas right now under the present plan with its present direction and if things go well, in 50 years' time the plan will be the greatest investment in Canada itself.

Consequently, the direction set is good and the work is good. The bill will tighten up the protective measures even more. With that, we support the bill and we think it is a step in the right direction.

[Peter Adams, Liberal, Peterborough, ON]

Mr. Speaker, like my colleague, I am very interested in the Canada pension plan in general. I followed very closely the changes that have been made to make it truly sustainable.

There is no doubt that there have been quite dramatic changes in the demographics of the country. I think we all realize not only is the country still growing but the percentage of older people is growing. All the projections suggest that the proportion of senior citizens as a proportion of the entire population will get larger and larger. Therefore a variety of steps were necessary to strengthen the Canada pension plan. I certainly support them.

Like some other colleagues here, from to time I receive complaints from people who ask why the rates are going up and that kind of thing. To make the fund sustainable, one thing we had to do was look at the figures for the next 30 to 40 years, look at what the demands on the pension plan would be and then work out rates that truly reflected those figures, with the new vision we have of the way Canada will age.

We did that in a very fair and balanced way. It was not a huge increase over night. It was gradually phased in. The premium levels are higher but not as high as they would have been had we left the matter, as is often the case in the House, I regret to say. We tend to put things off because of political pressure.

The rates were changed. That has been one of the important ways we have tried to make this truly sustainable so that for generations to come people will know the Canada pension will be there them. This is not just the pension for when we reach retirement age, it also throughout one's life gives the safety net of the CPP disability pension which is also supported from the same fund.

The other measure, the one we are discussing today, is the so-called foreign property rule. We might ask how can we make a pension plan sustainable. One way is to ensure that people put in the right amount of money so that there is a good sum of money for the future.

The other question is how are we best going to use the moneys that we actually have in the plan. That is always a matter of serious debate. Some investments return a great deal but are very risky, some return very little but are very safe and so on. In this case we have a board of excellent, very highly qualified Canadians looking after the investment side of Canada pension.

Also, as a part of the move to make it sustainable, we have gradually brought up the percentage that can be invested abroad. It is now 30%. Not very long ago it was only 10%. I know some people become nervous about that. It is human nature that we have much greater faith in our own institutions and our own businesses than those overseas. If we look at the way we work, invest and trade already, a great deal of our wealth comes from overseas. We are a small country in terms of population, we are relatively wealthy, highly educated and we have remarkable natural resources. I suspect that in one sense we could live behind our fence and subsist better than any other nation in the world. However to keep our standard of living, we to trade abroad.

As a simple example, our farmers are the best in the world. We have an incredible range of climate so we can grow a variety of crops. We have an incredible range of soil so we can grow a variety of crops. We have highly educated, highly sophisticated farmers in every commodity group. We grow not only grapes and corn in Ontario but we also grow kiwi fruit. Farming is very diverse. However, even with all the benefits that our farmers have for this wonderful local environment in which they work, 50% of the farm gate income of our farmers comes from overseas.

I mention that in connection with the foreign property rule which we are discussing. The question really is, why should we invest 30% overseas? The answer is so our CPP fund can tap into the wealth of the rest of the world. We produce 2% of the gross product of the entire world, so we are tapping into the other 98%. That is a very important point.

Having followed this CPP matter with great care, I view it as appropriate at this time, given the nature of the world economy, that 30% of the investments of the CPP could and should be overseas so we can have access to the wealth which is out there. I want to stress though that this is not some novelty or something that we just dreamt up here in Ottawa. This also has been the pattern with provincial and other major pension plans in Canada. Some of those have been mentioned in the debate this morning.

At this level of the foreign property rule, CPP is treated like all the pension plans in Canada. If that were not the case, in a very real sense we would be penalizing all Canadians. All Canadians invest in this pension plan and we would put them at a disadvantage compared to people who invest in other pension plans. They have an opportunity, with their weekly, monthly payments into CPP, to get the benefits of up to 30% foreign investment. That is appropriate and it is fair. It brings the CPP in line with other pension plans. It also creates a balance in another sense. It ensures that a significant portion of tax assisted retirement savings are invested in Canada and provides diversification opportunities for the pension fund and for RRSP beneficiaries.

This is a very large fund. I for one would certainly never support the idea that all moneys in the pension plan be invested overseas in other operations. This is not the intention. I support the fact that 70% of these funds are and should be invested in Canada. The idea with the other 30% allows Canadians, as we do in other forms of trade, to benefit from wealth which can be generated overseas. There is a balance in that sense also.

This was mentioned earlier and I should repeat it for the record. In the initial set of reforms in 1977, expanding the foreign property rule was one of the key recommendations of the Senate banking committee. It was proposed in its review of the amendments to the CPP legislation. The foreign property rule was initially introduced in the 1971 budget, setting a limit of 10% on the value of foreign investment held in tax assisted saving plans such as RRSPs and registered pension plans. As my colleague earlier described, since then the 10% has been gradually relaxed and it is now at 30%. This is a level at which I am comfortable. As the member for Peterborough, I become less comfortable if we move beyond this limit.

I am a strong supporter of the Canada pension plan. I believe it is one of the safety nets which makes Canada a very special place. It is small but it is something which is there for everybody when they retire and it there for every worker should he or she become disabled. It is important for the Canada pension plan to be totally sustainable and the current foreign property rule that allows 30% investment overseas will help make it sustainable.

[John Williams, Canadian Alliance, St. Albert, AB]

Mr. Speaker, I rise to speak on Bill C-3 and the amendment put forward by my colleague from Lanark—Carleton, who feels that the bill would be improved by the amendment.

I would like to talk about the Canada pension plan in general and the fact that this has been set up for many years to provide pensions to our citizens in the years that they want to call their golden years or sunset years when they can sit at home and enjoy the fruits of their labours.

We have had some considerable concern over the last number of years about the capacity of the plan to do exactly what it was intended to do. Members may recall that the Minister of Finance brought out some new premium structure that would see the Canada pension plan premium rate jump to 9.9% of earnings.

It seems rather strange that he would arrive at the figure of 9.9%. We in the Alliance felt that he was pulling the wool over our eyes, that it would require a substantially higher amount of contributions to sustain the fund as we get into the baby boomer years. He has maintained that 9.9% was that maximum, just a hint and a fraction short of the double digits. I was surprised that he did not go to 9.99%.

I think that the Liberals are pulling the wool over our eyes because we are getting into the baby boomers. We only have to look around this see place and see the amount of grey hair. We are supposed to be representative of--

[Some hon. members]

Oh, oh.

[John Williams, Canadian Alliance, St. Albert, AB]

Some members are taking offence, I think.

We only have to take a look around and see the age, if not the colour of the hair in this place--Mr. Speaker, I am glad to see that you are taking no offence--to see that since we are representative of our society, society is aging. We are also living longer while we are aging and the baby boomers hope to be around until the age of 80 or perhaps even 85 or 90. So if we retire at the age of 65 the Canada pension plan would have to pay for us for about 20 years. The Minister of Finance says not to worry, that 9.9% would do it. We are quite apprehensive.

Let us take a look at how the Liberal Party got into this game of private investment. We had the greatest boom in the stock market starting in 1980 and it went all the way to 1999, almost a 20 year run, at which time the growth was exponential. There were millionaires and billionaires practically on every street corner rather than beggars. People were saying, “I made another extra million dollars today”. Toward the end of that boom the government decided to take the money out of the staid Government of Canada bonds where it had been getting 5%, 6% and 7% returns and put it into the stock market and bingo, what do we find? Losses.

[An hon. member]

Bad timing.

[John Williams, Canadian Alliance, St. Albert, AB]

Not only was it bad timing, but it seems to be the way that the government works. Every time we turn around it is losses, losses in the Canada pension plan, the gun registry, HRDC, and the advertising approach.

I wonder what the current Minister of Finance would suggest today if he goes back and does his numbers, and takes a look at the actuarial projections of the Canada pension plan, as it is currently losing money, as to whether that 9.9% is still appropriate. If it is not, the government has a responsibility to be open and transparent. That is not its strong suit

A democratic government should be open and transparent and should tell Canadians exactly how things are supposed to be. We know the government was not open and transparent on the gun registry. It did everything it could to hide from Parliament and from the Canadian public. The Auditor General told us that this thing had gone from a $2 million program to a billion dollar boondoggle.

It is unfortunate that taxpayers are hoping and expecting the government to do the right thing, provide efficiency, productivity, and programs that they want, however every time they turn around there is another big loss, a billion dollar boondoggle.

Every rule in the book was broken during the advertising program with Groupaction and $40 million of our money went right down the drain because the government said that the rules did not matter. It was all about saving the country. That was the Prime Minister's way of doing things, but perhaps we could have saved the country in a better way if the Liberals had got up and fought for this country back at the time of the referendum, rather than sitting back and expecting that they would win by default.

These are the types of things that we have. Regarding the billion dollar at HRDC, the government said, “Don't tell anybody what is going on, please, because the news is bad”.

I am getting some heckling from the other side, Mr. Speaker. I understand that this is the last day before we go home for Christmas and I thought everybody would be in such good spirits, so that they would be applauding me from the other side rather than heckling me. This is supposed to be the time of good will, good cheer and good wishes.

[An hon. member]

And good bookkeeping.

[John Williams, Canadian Alliance, St. Albert, AB]

And good bookkeeping too.

On the Canada pension plan, at this time of Christmas and when I think about gifts and being able to provide for the needy, that is what it is supposed to do all year every year from now and into the future, not just the next two weeks over the Christmas break.

The Canada pension plan has to be secure. That is why we want the government to report to Parliament so it can explain to us and be prepared to stand up and justify its figures so that we can see that the job is being done properly and done right.

I understand the Minister of Finance will be bringing forward a budget in February. He is the new Minister of Finance who is also the Deputy Prime Minister, and in the running for the Prime Minister's job. How he will have time to figure out a budget, I do not know, but he said that he will bring one forward. I hope that he explains in the budget how he can justify telling Canadians that 9.9% of their salary for Canada pension plan contributions will be sufficient because I have my serious doubts.

Therefore, in the interest of openness and transparency I would think that the Minister of Finance would be more than willing to go to the finance committee and explain his numbers to let the public know how these projections, when Canada pension plan is losing money, would be able to do the job.

The Canada pension plan allows for some money to be invested overseas which perhaps is not a bad thing. However now we will be turning over even the cash to the Canada pension plan board and I can only hope that is a good thing too. When it loses money on the investment side we hope it can figure out how not to lose the money in the cash account.

I understand that the government's chief actuary estimated that the proposed changes would increase the returns on CPP assets by about $75 billion over 50 years. That is one wonderful projection by presumably a wonderful actuary. If he can figure out how we would increase the return by $75 billion over 50 years when the CPP board could not figure out how to make even a dime over one year because it lost money.

I would hope that we can put our trust in the CPP board as we put our trust in Santa Claus and I wish you, Mr. Speaker, and everybody else a Merry Christmas.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I am intrigued with this Canada pension plan. I was a young man just starting my career in 1966 when the Canada pension plan was brought in. I remember at that time that some advice had been given by different people to the government bureaucrats, and some from the government bureaucrats, saying that it must be set up to be financially sound and stable. There were questions even then regarding whether the Liberal government of the day should be getting into this thing at all because before that there was no Canada pension plan.

The Canada pension plan is not a wonderful scheme for people who do not happen to work during their lifetime. For example, people like my own wife, who, because of our choice to have a full time mom in the home, has never been the recipient of a weekly or a monthly salary. She has not been able to contribute to the Canada pension plan and gets no pension. It is only for those who presumably already have the means whereby they can put away some extra money to supplement the income they would get from the old age pension. This was not well done because it was badly set up.

I remember an actuary from the government suggesting that the rates of contribution were not high enough to make it sustainable. He was summarily fired, not unlike the actuary a year or two ago who suggested that changes should be made and who disagreed with the former minister of finance. He too was fired because of that advice.

We need to take sound financial advice from actuaries and others so that the Canada pension plan is sustainable and is financially sound because Canadians are expecting it.

[The Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Speaker]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.