House of Commons Hansard #211 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was funds.
The House resumed from June 17 consideration of the motion that Bill Bill C-58, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act, be read the second time and referred to a committee.
Charles Caccia Liberal Davenport, ON
Mr. Speaker, this is an important bill because it provides an opportunity to discuss the content of the bill and some general features that are not included in it but which might be desirable for a number of reasons.
Canadians do place a tremendous value in the content of this measure and a tremendous value in its social significance as to how far and to what extent in detail the Canada pension plan meets our social needs and contributes to the development of what we could call social cohesion.
In the bill it is being proposed that the funds of the Canada pension plan be invested in the private sector stock market and other forms of investment which I imagine is the result of very thorough studies which might have given an indication that this is a safe way of investing the pension fund of Canadians.
I have some reservations about the initiative because investing in financial markets leaves the fund vulnerable to market fluctuations and to the vagaries of the private sector. Therefore I am not quite certain that this is a good idea.
At the present time it seems to me at least that Canada savings bonds have performed a very good role in providing safe investments and some very high returns even at a time when interest rates are very low.
For that reason I urge the committee during its study of the bill to make absolutely certain that this is a desirable measure and perhaps introduce some amendments to the bill that will still maintain a very large window of opportunity for the investments of the Canada pension plan funds in the form of bonds and other public sector investments which, as I mentioned earlier, are safe in the long term and provide some good, solid returns. To sum this up, it seems to me that it would be best not to engage in speculative activities with public funds.
The bill does not deal with very much else. Therefore I feel compelled to raise a question that has been raised on a number of occasions in previous discussions of the Canada pension plan, namely the five year disability clause. This clause causes unnecessary hardship to a number of Canadians. We have direct experience of this with people who visit our constituency office. Beyond that, from the study that we have conducted over the years about cases of Canadians who have been rejected because they could not meet this stringent clause, it would be highly desirable in future amendments of the Canada pension plan to extend the five year clause to seven years. That would seem to be a more reasonable and fairer way of dealing with people who, for instance, may be suffering from some kind of recurring disease but who also have lapses.
I want to refer to a specific case. A person with lupus applied for disability and was denied. The disease then became worse. When the person finally reapplied she was beyond the five year limit and was disqualified for the purposes of the Canada pension disability.
I am sure that hon. members in the House have come across similar cases of a denial of a disability pension because of the five year clause. I hope there will be an opportunity one day soon to improve this particular measure.
I want to say a few words about the Pension Appeals Board. The hearings are presently two years behind. They used to be, at the most, six months behind. When we make inquiries about the delays we are told they are due to the absence of a sufficient number of judges. It would seem only fair that this method be raised here because everyone would agree that Canadians should not be subjected to two years of waiting for a hearing, sometimes under hardships or being incapacitated or injured.
I would like the minister to take note of that problem. It is not something that requires an amendment. It is purely an administrative measure that can be taken by intensifying the search and hiring the appropriate judges. We need to reduce the two year waiting period to roughly six months for Canadians who need to turn to this appeal process. That would seem to be a reasonable request.
An issue that was covered in the media a day or two ago concerned the Canada pension plan apparently discriminating against common-law spouses. Common-law spouses are being refused survivors' pensions if they did not live with their partner at the time of the partner's death. The judgment handed down by the Federal Court of Appeal states that the Canada pension plan does discriminate in these types of cases.
The case referred to in the media concerns Ms. Betty Hodge, a 61 year old Ontario resident, who was denied a CPP survivor's pension after her common-law husband of more than 20 years apparently died in mid-1994.
It seems that we have a number of issues outside the scope of the bill that need attention.
I would conclude by expressing the hope that the government will find it possible in the fall or next year to bring forward a bill that will improve the quality of the Canada pension plan. We are certain of the fact that the Canada pension system is a pillar of Canadian social security, an absolute necessity for the well-being of people who retire and, as I mentioned earlier, it contributes considerably to social cohesion.
I would like to think that the Canada pension plan will receive the constant attention of the Government of Canada so as to improve its features and make it stronger and more relevant to the needs of Canadians. Society changes and evolves and sometimes the cost of living can increase after retirement, especially for some seniors who may have to take care of their grandchildren, and for other reasons.
Rob Anders Canadian Alliance Calgary West, AB
Mr. Speaker, the member talked about Canada savings bonds providing the federal government with more funds. I first question I want to ask is quite serious. As taxpayers, many people would have trepidation with providing the government huge sums of money when they see what sometimes gets done with it. I would point, for example, to the human resources development scandal not that long ago where $1 billion was misplaced or not accounted for. That is only one example of many.
I sometimes question whether the idea of providing the government with increased revenues via Canada savings bonds is a legitimate policy on behalf of the Canadian taxpayers. I am not sure it actually serves the interests of the country as well as the hon. member might think. I would like him to comment on the feasibility of loaning more money to the government when its track record is not so good.
I served on the finance committee when the pension plan changes were last going through. For example, we in the opposition wanted to bring up representatives from the Chilean government to find out about the Chilean system. As the situation stands now in Chile, individuals know exactly how much money is in their pension fund. It is not something that is dabbled with by the government. It is a privately held account and the money can be invested in a number of private investment vehicles.
I know the member has some objections to that, but the crux of what I am getting at is that we can ask the average person in Chile how much is invested in the fund in total, how much has been deposited in a given year and what the return on investment is. I would argue that members in this place are probably some of the better informed in the country on issues of pension. Here we are debating it today.
If I were to look across the way and ask some of the hon. members how much they had put into their pension and what the return was on their investment I think some of the people debating this very law today would not have as firm a handle on it as the average Chilean would. I would ask the member why we were not allowed to bring people up from Chile on this whole question of pension reform, because I think the Chileans have done some laudable things.
I have a third question for the hon. member. We did have testimony in that committee meeting from the person who manages the Ontario teachers' pension fund. It is the largest private sector pension fund in the country. It is worth over $10 billion or at least was at that time but I imagine it is substantially larger now. That individual told us that with the changes the government brought in whereby 9.9% of someone's salary would be skimmed off for CPP purposes, it would at best buy the government an election or perhaps two. The reason he said that was that the actuarial analysis indicates that the max out of the fund will happen in about 2017 based on current demographic projections.
However, despite the 9.9% deduction right now, the fund will not be able to sustain itself. He thought that increasing it to 9.9% was a co-optive scheme by the government to try to increase the amount of revenue funds right now to cover it off for an election or maybe a second election but that after that the fund would not be sustainable and would be bankrupt anyway. He thought substantial changes were better sooner rather than later.
There are three questions. The first question has to do with giving money to the government. I do not single out the Liberal government for this because many other governments have wasted taxpayer funds. The second question deals with the fact that the Chileans were not allowed to present evidence. The third question concerns the whole idea of it basically being something that will be a massive liability. I look at the pages today and I do not think any of them seriously believe they will be able to collect a pension. It is a huge liability that we will not be able to sustain.
Charles Caccia Liberal Davenport, ON
Mr. Speaker, I do not know whether there is sufficient time to answer all three questions but I will try.
On the first question, it seems to me that the investments in Canada savings bonds are investments in the state, in what we believe to be the role of the government, regardless of the party that is in power. Most Canada savings bonds investments are for five years or more. Maybe in five years another party will be in power. We do not know. However the fact is that Canada savings bonds are a vehicle for investment for those who believe in the future of Canada.
I invest my savings in Canada savings bonds, for instance. I find it one way of supporting Canada. I am sure that many Canadians do the same. Therefore, I would not link Canada savings bonds with the performance of any department. There are always mistakes and shortcomings. What counts is the confidence of Canadians in their country and the bonds are one way of expressing that. Maybe it is a form of patriotism. Who knows? Nevertheless, it is a good form of patriotism. I would urge the member to do the same and invest some of his savings in Canada savings bonds one of these days.
Second, the Chilean system, as well as some other systems all over the world, may have some features which are better than ours. We should look at them. However it does not mean that we have to send a committee to Chile or bring an expert from Chile. If the committee decided not to call an expert, the majority of the committee, in this democratic process, must have felt that it was not necessary. Particularly today, with the Internet and other forms of instant communications, it should not be too difficult to reach and obtain details, even through the relevant UN organization, about the positive features of the Chilean system. We can learn from the Chileans, the Europeans and many others also.
I think we have a good system. All we need to do is have faith in it and improve it.
That leads me to the third question and the predictions of the hon. member that the sustainability of the fund in the long term is in doubt or is even questionable. I do not think so. That is the assumption made by some. His party has actually advocated the replacement of the CPP with a private sector system. I do not believe that at all and I reject that notion.
I would like to see the Canada pension plan as the main central source of pension funding and pension support for Canadians. Then those who can afford it can build their own little private schemes if they like. However the public sector has to be protected and the vast majority of Canadians cannot afford to fund their future and their retirement by way of a private sector system.
This has been the strength of the Liberal Party over decades. Part of our social security approach is that of ensuring that a minimum is provided via the public sector and the taxation system. That is why we do not believe, as the hon. member does, in the reduction of taxes because taxes are essential to do certain things, such as the enhancement and strengthening of the Canada pension plan. If the percentage of contributions to which the hon. member made reference to would require an increase in years to come, and this is a matter for actuaries to decide and well beyond my ability to comprehend, I am sure that a vast majority of Canadians would support it. I would be glad to fight an election on that. I am sure that we would win.
Paul Szabo LiberalParliamentary Secretary to the Minister of Public Works and Government Services
Mr. Speaker, I simply want to congratulate the hon. member for Davenport for raising the issue of the disability credit. Many Canadians do not realize that, in addition to getting the pension benefits as well as survivor benefits and death benefits, the CPP program does provide disability benefits for Canadians who become disabled during their working career and have no other coverage. It is a very important element but it is expensive and it is part of the cost.
Could the member tell us whether there was any other opportunity with regard to the amendments. Because this is jointly administered between the federal and provincial governments, has he raised this matter with the provincial representatives to seek support for the change about which he spoke?
Charles Caccia Liberal Davenport, ON
Mr. Speaker, very briefly the answer is no, I have not. I will seek the guidance of the parliamentary secretary to proceed in that direction.
Marlene Catterall Liberal Ottawa West—Nepean, ON
Mr. Speaker, discussions have taken place between all parties as well as with the member for South Surrey—White Rock—Langley concerning the taking of the division on Bill C-292, scheduled at the conclusion of private members' business later this day and I believe you would find consent for the following motion. I move:
That at the conclusion of today's debate on Bill C-292, all questions necessary to dispose of the motion be deemed put, a recorded division deemed requested and deferred to Wednesday, September 18 at the expiry of government orders.
Business of the HouseGovernment Orders
The Speaker
Does the hon. chief government whip have the unanimous consent of the House to propose this motion?
Business of the HouseGovernment Orders
The Speaker
The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?
The House resumed consideration of the motion that Bill C-58, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act, be read the second time and referred to a committee.
Lorne Nystrom NDP Regina—Qu'Appelle, SK
Mr. Speaker, Bill C-58, follows the 1997 government policy of moving away from a “pay as you go” pension system, with a system of a two year reserve fund, to a more fully funded pension system with a five year reserve fund managed by an arm's length investment board. We have had the “pay as you go” pension system since the days of Lester Pearson,
The CPP Investment Board, a crown corporation, was created by an act of parliament in 1997, one of the first acts that we passed in the House of Commons after the election. It has a mandate to focus strictly on the prudent rate of return. The CPPIB, which is the Canadian Pension Plan Investment Board, is expected to cover 25% of liabilities by the year 2012. The total amount of funds managed by the board at that time will be in the range of $120 billion to $150 billion, which would make it by far the largest investment fund in the country.
The investment board will implement a market oriented approach as controlled by a 12 member board of directors appointed by the Minister of Finance with input from the provincial ministers of finance. The members of the board are largely representative of the financial community and the board has some 40 employees who co-ordinate the investment board with large financial institutions.
Bill C-58 is an amendment to the Canada pension plan and the Canada Pension Plan Investment Board Act. Essentially what it would do is transfer the control of CPP reserve funds to the Canada Pension Plan Investment Board over a three year period. The board also implements the Liberal policy of allowing the CPP Investment Board to hold 30% of its investments in foreign property, in line with the budget of December 2001.
The government contends that the transfer of CPP funds would increase the strength of the Canada Pension Plan Investment Board by allowing for a higher rate of return on investments. The argument in support of a better rate of return rests on the historical performance of financial markets that generally outperform the rate of return of government securities. Moreover the Liberal government across the way contends that increasing the limit on foreign investment would also improve the rate of return. Currently the Canada pension plan holds investments worth some $53.6 billion, which as I said before is expected to increase to $120 billion to $150 billion by the year 2012, really a very large investment fund.
The Canada Pension Plan Investment Board should represent all stakeholders, not just the financial community. Right now the CPPIB does not represent all the stakeholders. Labour for example is not represented. The trade union movement, which represents millions of workers in the country, is not represented. Pensioners are not represented, yet they are very much at the heart of being important stakeholders in Canada pension plan.
However the banks and the brokerage firms, with the short term goal of increasing their profits, manage the board. The CPPIB invests on behalf of some 16 million Canadians but is only required to hold public meetings once every two years. The Canada Pension Plan Investment Board should be committed to a balanced representation so that pensioners as well as investors can have a say in the management of the fund. More transparency and more accountability is important in any open, free and democratic society.
Funds that are generated at taxpayer expense in my opinion should not be invested in foreign markets. We are not, and I certainly am not, against foreign investment for private investment groups but the dollars from a pension plan fund that is funded by taxpayers should be invested in Canadian companies and in Canadian securities. In other words, let us use the Canadian public pension fund to invest in the Canadian economy, strengthening our economy and creating jobs for future generations.
Investing government securities will help the economy by channeling money to the provinces and municipalities where it will fund improved infrastructure, housing initiatives and other projects, which are sorely needed as the infrastructure in this country has deteriorated in many ways right across Canada. I think of housing. I think of the water system and the water treatment system. I think of roads and transportation. I think of railways and many other public investments that could be much helped by CPP investment money.
Investment in Canadian businesses, especially new businesses, is important for the economy. In the United States, pension funds provide nearly 50% of venture capital. Canadian entrepreneurs should have access to such venture capital through the Canada Pension Plan Investment Board. The returns on investments in government securities and Canadian businesses may be less initially, but the new jobs created by reinvesting in the Canadian economy will create new pensions for new pensioners and increase the funds of the Canada pension plan.
The Canada Pension Plan Investment Board should implement the use of ethical screening for investment. This is something I have raised in the House of Commons on more than one occasion and also at the finance committee with the Minister of Finance. Why not use an ethical screen to make sure that the investments made by the board are made on an ethical basis?
The Canada Pension Plan Investment Board must have ethical screening to prevent investment in companies with poor environmental standards, for example, or with poor child labour standards or sweatshops, and to prevent investment in tobacco companies and other companies that harm people. Currently the CPPIB does not have an ethical screen for its investments. It has been shown that ethical screening does not reduce the rate of return. In fact, if one looks at many ethical funds in the country, one sees that their rate of return is not reduced but is in some cases higher than that of the funds that do not have an ethical screen. I think of the ethical funds in the credit union movement, for example, which have a very good track record in Canada.
It is interesting to note as we debate the Canada pension plan and look at the review of the CPP that the CPPIB now plans to invest some $350 million in foreign companies over the next five years. Companies involved in leveraged buyouts will receive a good deal of this. As of March 31, 2002, the Canada Pension Plan Investment Board has a realized a cumulative loss of $64.8 million, despite reporting portfolio gains in recent years of up to 40.1%. Since its inception the board has had a healthy return in Canadian equity investments, annualized at the rate of 13.8%, and has had a consistent loss on foreign investment, at an annualized rate of -0.3%.
Until 1997, provinces borrowed funds in 20 year loans from the CPP at a preferred rate, the cost to the government to lend these funds. They were lent to provincial governments at cost. Now they borrow the money at market rates set by the Minister of Finance. Of course that becomes more expensive to the provinces over the long run than it was under the previous rules and regulations of the Canada pension plan.
The market value of the CPP Investment Board is $14.2 billion in terms of what is currently invested in equity, with 70% of investment in Canada and Canadian companies, 15% in the United States and American companies, and 15% in other nations and other companies. As a matter of fact there was an article this morning in the Ottawa Citizen in which the headline stated “CPP [Canada Pension Plan] puts $500M [million] into risky business”. The sub-headline stated “It plunges into angel funds and venture capital” funds. The article is raising some concern about the risk for the Canadian pensioner who contributes to the Canada pension fund. The article also states that some $2 billion Canadian will be going into the American private equity funds over the next few years and some $537 million Canadian into European buyout funds over the next few years.
There is this move to invest more and more of Canadian taxpayers' money and pension money into foreign funds, foreign equities and buyout funds, to invest in certain equity funds that are highly risky on behalf of the people who are the owners of the Canada pension plan.
According to the Canada Pension Plan Investment Board, concerning the issue of ethical screening its position is the following:
Our legislation specifically prohibits us from engaging in any investment activities other than maximizing investment returns...The policy fully states that we will not accept or reject investments on non-investment criteria.
That is the position of the board when it comes to ethical investments and I am saying that we should look at an amendment to make sure that we have an ethical screen.
Tobacco is a very good example of that. Tobacco and cigarette smoking are very harmful and very costly in terms of the health of Canadians and the funds of our country. I do not think we should be investing the Canada pension plan money in Philip Morris or any other tobacco companies. We do not want to send a signal that smoking is a good thing for the people of this country, yet the government across the way so far has not agreed to look at an ethical screen. I know that some members across the way would support the idea of an ethical screen on tobacco. I have heard them speak out against tobacco and talk about a national campaign to stop cigarette smoking in the country.
So on the one hand we have the government advertising to young people and others that they should stop smoking and we have spent hundreds of thousands of dollars over the years in campaigns to stop smoking, but on the other hand we have the Canada Pension Plan Investment Board investing in tobacco companies. It is doing the exact opposite of a policy that the Government of Canada is advocating. Here we have a conflict in policy and a contradiction between the left hand and the right hand of the government.
The rates of return for the 2001 fiscal year, which ended in March 2002, were a modest 3.4% for equity. This is lower than the return on government bonds, which I think was 5% for the same period of time. Investment outside of government securities involves risk. For an entity mandated to reduce the risks as well as to realize a profit, government securities are a lot stronger investment. Certainly the facts on that in the last year or two speak for themselves.
In 2001, Canada Pension Plan Investment Board investments in private firms suffered a loss while government securities remained stable. I think a lot of people in this country, including the member for Davenport, would appreciate a stable, guaranteed rate of return for our nation's public pension fund, which is the foundation on which to build retirement income for each and every single Canadian.
The real rate of return for the Canada Pension Plan Investment Board is about 7%. The change in government securities returning 1% or 2% less would be worth the growth in the economy from the investment and the low risk, because we would be investing in our own country, investing in our own businesses and investing in our own infrastructure. We would be investing in public programs of value to Canadian people. We would be growing the economy and having all the spinoffs from a growing economy with fewer people unemployed and so on.
The total assets of the Canada Pension Plan Investment Board come to $53.6 billion. This includes the two year fund of $40 billion that was initially transferred from the Canada pension plan. Government bonds total nearly $32.6 billion. Some $13.8 billion is invested in publicly traded companies. Nearly $400 million is currently invested in venture capital and buyout funds. The fund is meant to represent 25% of the liabilities, leaving the system largely pay as you go. When the Canada pension plan was first established in the 1960s it was a pay as you go plan and remained one until the amendments of recent years by the Liberal government.
As we look at what is before us today, I would recommend that we oppose the bill unless changes are made that provide the CPPIB with a mandate to put an ethical screen in place. I also would like to see the bill's provision for investment in foreign markets eliminated, because I think we should put the money from Canada's large pension fund into Canada.
Investing in private equities is a way of improving the rate of return for CPP funds. It makes sense if they are in Canada, but having no ethical screen for those investments is bad policy. Canadians are forced to pay their CPP premiums into an investment fund that has no rules against investing in tobacco or companies that make use of child labour or companies that have very poor environmental standards. The government must develop an ethical screen for the CPP investment fund through public hearings and consultations with those who have developed ethical screens in the private and co-operative sectors. In that regard I would mention the credit union movement, which has seven, eight or nine different ethical investment funds for the credit union movement in the country. Improvements to pension legislation should also give employees the opportunity to decide if they want an ethical screen to be part of the investment decision in their pension fund.
Finally, at this time we should also bring in an amendment to the Canada Pension Plan Investment Board legislation that would provide for representation of other stakeholders on the board of directors. Here I am thinking of the pensioners themselves who should be represented on the board. Here I am thinking of the trade union movement, which represents the workers who will be future pensioners. They too should have representation on the board of directors.
If we do these things, if we have the ethical screen and representation on the board for the working people and retirees, and if we roll back the amount of money going into foreign markets with more money going into the Canadian markets such as the provinces and municipalities at low interest rates at cost to the federal government, with those three things, I think we would have a Canada pension fund that would reflect what the Canadian people want.
When I go across the country people tell me they are concerned about their security in terms of the Canada pension fund. They are worried about the future of the Canada pension fund. I believe there is no need in a country as wealthy as ours to worry about the future security of our major pension fund, but if more of it were invested in Canada, in provincial bonds and bonds to municipalities, schools and hospitals, it would strengthen the economy and the pension fund itself would be that much more secure.
I hope we can have a real debate on this in committee and come out of it making some amendments in those areas to make the Canada pension fund, which is the foundation for retirement income in the country, an even better fund for the Canadian people in the years that lie ahead.
Paul Szabo LiberalParliamentary Secretary to the Minister of Public Works and Government Services
Mr. Speaker, having been on the finance committee when Bill C-2 to create the investment board was first dealt with by the House, I was astounded to hear some of the statements made by the member in referring to the CPP plan when it was started back in 1966 as a pay as you go plan. This shows a fundamental lack of knowledge of what happened when the CPP was created.
At the time Canadians who had come through the depression years had very little opportunity to provide for their retirement years. It was a decision by the Canadian people through their elected representatives to establish the CPP fund. It allowed Canadians in that situation to begin receiving pension or retirement benefits right off the bat, even without having contributed anything into the plan. It is not a pay as you go plan. It is Canadians taking care of their own. It is Canadians working today and making contributions to a plan which is used to pay benefits to those who had no opportunity to provide for their retirement. I am sorry that the member mischaracterized the Canada pension plan.
The member has mistakenly characterized the Canada Pension Plan Investment Board as the instrument of pension administration. The fact is that the Canada Pension Plan Act deals with what benefits are available, whether they are survivor benefits, death benefits, disability benefits, et cetera. That is the instrument which is jointly administered and operated by the provinces and the federal government.
The member would like to have representatives from labour, trade unions, pensioners, and future pensioners on the board. If we start making lists, several different groups will be represented, and once we start making lists someone gets left off.
The Canada pension plan is set up and operated by the governments of Canada, provincial and federal, to ensure there are appropriate pension benefits for Canadians.
Today's pensioners get $8 for every $1 they put into the plan. Today there are five workers for one pensioner and because of our aging society it will be down to three workers for one pensioner. For that reason premiums have had to go up to sustain the plan over the long term.
To suggest that we should somehow manage the investment board for a bunch of other policy objectives is fundamentally wrong simply because these moneys are collected on behalf of Canadians to provide them with pension benefits. It is not there as an instrument for other social or economic objectives. We already support venture funds. We already support the applicable screening of investments in tobacco issues as the member mentioned.
The member has mischaracterized the board as an instrument of policy rather than an instrument to ensure that the market is not distorted with a very large investment fund. It was set up so investments would not be all over the place but rather would reflect the purchasing and selling patterns of the stock exchange as a whole so it had no undue influence on the markets which the member is suggesting that it does. Setting it up that way ensures that returns will be comparable to what other investors would get, ergo the 30% foreign investment limit, which is exactly what Canadians are permitted now under the Income Tax Act.
The member has some explaining to do as to why he has misled the House on these important issues.
Lorne Nystrom NDP Regina—Qu'Appelle, SK
Mr. Speaker, I am surprised the member across the way would say what he said.
I said that the plan that was instituted back in the 1960s had a pay as you go philosophy. That is exactly how it was set up. I know it was kick-started and pensioners qualified right away. My father got a small CPP payout fairly early from the plan, as did other people of his generation. The whole philosophy was pay as you go.
It was changed by the amendments in 1997 when it started to move away from a pay as you go pension plan to having some of the money set aside for an investment fund that would be directed by the Canada Pension Plan Investment Board. There was a change in philosophy and we debated that in the finance committee at the time.
The Alliance Party, which was called the Reform Party in those days, wanted to go even further. In essence it wanted to privatize the Canada pension plan fund and set up huge RRSP type funds. It would be taken out of the public sector altogether and everybody would have their own private pension fund or private pension plan that was totally in the private market. That was the debate in the finance committee at the time.
The Liberal government came up with changes which were a bit of a compromise, where more money is going into the investment board to be managed. Now it wants more and more money, some 30%, to go into the foreign markets. There is a change from the pay as you go philosophy which was there in the beginning by the people who originated the Canada pension plan in the days of Lester Pearson and Tommy Douglas.
When I talk about stakeholders I only mentioned two stakeholders. The member said how many stakeholders do I want on the board? I mentioned the workers and the retirees.
Lorne Nystrom NDP Regina—Qu'Appelle, SK
Workers, labour and trade unions are all the same. Let us have some trade union representation on the board. Trade unions represent workers. Trade unions represent the people who work in this country. There should be some trade union representation on the board. I moved an amendment during the debate on this legislation a few years ago in the finance committee.
I said that the pensioners should have some kind of a voice as well. There are 12 people on the board of directors. Why could there not be labour and pensioner representation, current pensioners and future pensioners? It makes sense. We have that kind of representations on other boards as well. We have boards that have stakeholders on them.
It is not prohibitive, but it is up to the judgment of the Minister of Finance and the recommendations of provincial ministers of finance. The provincial ministers of finance do not appoint somebody to the board; they make recommendations. If the provincial minister of finance in New Brunswick recommends someone, that person is only on the board through the grace of the federal Minister of Finance. Again, it centralizes so much power in the hands of the Minister of Finance.
Let us open it up and be a little more democratic. There are all kinds of precedents for representation on boards. The new crown corporation for air security has on its board representation from the stakeholders, from the airport authorities and the airlines.
The finance committee accepted my amendment to have representation of the trade unions to represent the workers on the board. That was overturned by the House of Commons on a recommendation coming from the Prime Minister's office.
It is not a radical idea. It is just a matter of opening it up and making it more democratic and more accountable for the Canadian people. What is wrong with having pensioners sit on the board? What is wrong with having workers sit on the board? They would provide valuable input for the people who are making the decisions as to where those investments go.
The last point is the ethical screen. Why would there not be an ethical screen that would disallow investment in tobacco, for example? The federal government is spending all kinds of money on an advertising campaign saying that people, in particular children, should not get hooked on cigarettes. On one hand the government says not to get hooked on cigarettes and let us get away from tobacco. On the other hand, the CPP Investment Board can invest in Phillip Morris and other tobacco companies. It does not make any sense. I am surprised how conservative the member across the way is.
Rob Anders Canadian Alliance Calgary West, AB
Mr. Speaker, the member talked about ethical screening. He also talked about the trade union movement being involved in deciding how the pension money is spent.
I seem to remember something about the teamsters, Hoffa and Las Vegas and a whole number of things but I am not going to dwell on it. As often happens in this place, I was distracted by what the government member was saying and instead I am going to focus on that.
I listened to a good chunk of the speech by the member for Regina--Qu'Appelle. I do not believe that he mentioned the theft of public sector pension funds by the government in the last parliament. I seem to remember billions of dollars were taken out of public sector pension funds that had been accumulated over the years and invested by the government.
As a matter of fact I look at the guards who are protecting us today in the House. I recognize that it was their pension funds that the government raided to the tune of billions of dollars which were literally sucked out of the fund. The government thought it was too large and basically was a nest egg to go after to try to balance the budget and allow the finance minister some wiggle room.
Does the member have any thoughts, any particular musings, or anything he needs to get off his chest with regard to the government's theft of billions of dollars from the public sector pension funds during the last parliament?
Lorne Nystrom NDP Regina—Qu'Appelle, SK
Mr. Speaker, that is a very tough and direct question. Of course I have concerns about the fancy bookkeeping of the federal government. It happens time and time again. I share some of the concerns that the member has mentioned.
I want to mention another one that makes me very angry. It is the use of the EI fund. Workers pay into the EI fund as do employers pay into the EI fund. The accumulated surplus in the EI fund is some $42 billion. The federal government sees that going into the consolidated revenue fund, which is the general fund of the government.
The previous minister of finance viewed using the funds of the workers and employers to eliminate the deficit and pay down the debt. That is a very fancy way of making sure there is a balanced budget. It is not fair because the ordinary working people are paying that money. It is a theft of the money of the working people. It is just not the way to view public finances.
The EI fund should be separate. It is an insurance fund. It provides insurance and benefits for people who lose their jobs.
Time and time again there is creative bookkeeping used in terms of the EI fund and in terms of pension funds. Funds move back and forth between the consolidated revenue fund and crown corporations. More transparency and more accountability is needed. That is why a fixed budget date is needed, so that we have a more democratic parliamentary system.
I could go on at length about this issue but I see that I have run out of time.
Nancy Karetak-Lindell Liberal Nunavut, NU
Mr. Speaker, today is National Aboriginal Day, a day when Canadians from sea to sea to sea celebrate the culture and achievements of Canada's aboriginal people.
I celebrate the strength and the courage of the people. I celebrate the adaptability of the people. I celebrate the youth who have so many opportunities but also many challenges.
I celebrate the great knowledge that we have to share with the country, and even though we did not have a written language until very recently, the ability to pass on all that information, knowledge and creativity. I celebrate the creativity and the artistic ability of the aboriginal people.
I am very pleased to share this day with Canadians. I ask all my colleagues to join me in wishing all Canadians a very happy National Aboriginal Day.
Rahim Jaffer Canadian Alliance Edmonton Strathcona, AB
Mr. Speaker, research can save lives. It can help us discover medicine to treat diseases that we never thought possible. It can help us reduce hospital stays and improve our overall quality of life.
We know that Canada's health care system needs adjustments. There are too few doctors and too many long lineups. The future will see an influx of seniors who will no doubt rely on our health care system, and it is not ready.
One way to help, however, is to support the development of new medicine, but the approval time for the new medicines is too long. The time it takes to review and approve new drug submissions is longer than Health Canada's own targets. Its target is 345 days but it now takes it 717 days. That is almost double. It is also a year longer than it takes the United States.
We are talking about saving and/or improving lives, and our neighbours in the U.S.A. are getting medicine a year before Canadians. They are getting well while Canadians are getting sick. That is not acceptable.
We must improve drug approval times. After all, time is a luxury that some Canadians do not have.
Wayne Easter Liberal Malpeque, PE
Mr. Speaker, I would like to take this occasion to pay a special tribute to a great Canadian author who passed away today at the age of 71: Timothy Findley.
Mr. Findley was a renowned Canadian author who received recognition and accolades around the world for his work. Included on his list of awards is our Governor General's Literacy Award and an appointment as an Officer of the Order of Canada.
Mr. Findley began his writing career in 1967 creating many great works, one being The Piano Man's Daughter . He also wrote several plays, short stories and television, radio and film scripts. Even in this arena Timothy Findley excelled, for which he earned an ACTRA Award. Mr. Findley was also very active in the Canadian writing community and was the president of the Canadian chapter of PEN International.
Perhaps I may close with a quote from critic Eugene Benson who said of Timothy Findley that “He has written only masterpieces”.
On behalf of all citizens I express my sincere condolences to the family and friends of Mr. Timothy Findley.
Sophia Leung Liberal Vancouver Kingsway, BC
The Italian Cultural Centre Society in my riding in Vancouver will be celebrating Italian Week 2002 from June 23 to June 28 with folk dances, musical entertainment, homemade Italian food and many other delightful programs.
The Italian Canadians have played an important role in the development of our country. I congratulate President Leonard Bruno, Donatella Geller and the many volunteers for their hard work in organizing this event.
I ask all members to join me in saluting all the dedicated members of Vancouver's Italian Cultural Centre Society for making this celebration possible.
Marcel Proulx Liberal Hull—Aylmer, QC
Mr. Speaker, Monday, June 24 is Saint-Jean-Baptiste Day, the great festival of all French Canadians.
Together, we shall celebrate our diversity and our identity. We will proclaim our pride in a country that continually celebrates the richness of the French language.
I invite all Canadians to gather round a bonfire of friendship, to dance and to raise their voices in song.
Bonne fête, francophones du Canada.
Andy Burton Canadian Alliance Skeena, BC
Mr. Speaker, for the second time in the last year a situation has arisen in my riding involving a band council and a school board. Last year's problem was resolved quickly after I raised it in the House.
In this instance school district 52 is owed some $640,000 by the Kitkatla Band for educational services provided. The chief of the band has stated that it will not pay the amount owed. As a result Prince Rupert School District No. 52 will not be signing a local education agreement with the Kitkatla Band even though the band now wishes to do so.
The money owed must be forthcoming to school district 52 in order for needed educational services to be provided for Kitkatla children. A speedy resolution to this matter must be pursued by the minister and his staff to ensure that the necessary agreements are in place for the future and that this situation does not recur.
I trust that like the last time this will be quickly resolved.