House of Commons Hansard #64 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was children.
Janko Peric Liberal Cambridge, ON
Mr. Speaker, pursuant to Standing Order 36 I have the privilege to present to the House a petition from some 100 concerned citizens of my riding of Cambridge.
The petitioners wish to bring to the attention of the House the fact that one Canadian child in four dies before birth from induced abortion. More than half of Canadians believe that human life should be protected prior to birth. There is still no law protecting unborn children.
Larry Spencer Canadian Alliance Regina—Lumsden—Lake Centre, SK
Mr. Speaker, I have a petition from a number of fine citizens of the province of Ontario.
The petitioners call upon Parliament to modify legislation to ensure that both parents can be fully involved in the life of a child after divorce. They are asking that specifically designated shared parenting be included in legislation. The petitioners are also asking that the support guidelines for the taxation system be such that support is not taxed in the hands of either party.
Guy St-Julien Liberal Abitibi—Baie-James—Nunavik, QC
Mr. Speaker, I would like to present a petition signed by hundreds of residents of Nunavik communities, namely Akulivik, Inukjuak, and Kuujjuaq. The petitioners point out that the federal government, through one of its departments, ordered the killing of Inuit sled dogs in New Quebec, now called Nunavik, from 1950 to 1969.
The federal government did not hold public consultations with the Inuit communities in New Quebec. The killing of these dogs had a tragic social, economic and cultural impact on the Inuit in Nunavik. We are requesting a public inquiry, and the federal government has made no attempt to implement corrective measures to help the Inuit in Nunavik preserve their way of life.
Norman E. Doyle Progressive Conservative St. John's East, NL
Mr. Speaker, I have a petition from 250 people from St. John's East who wish to call to the attention of the House the degrading nature of pornography to individuals and society as a whole. They call upon the House of Commons to bring in legislation with a view to curbing the production and distribution of pornographic material.
Don Boudria LiberalMinister of State and Leader of the Government in the House of Commons
Mr. Speaker, I rise on a point of order. There have been further consultations and I wish to be quite clear. Pursuant to the same terms as a moment ago I would like to move that the following items be disposed of as follows. I move:
That the amendments to Bill C-3, Bill C-19 and Bill C-22 be deemed to have been withdrawn.
Mr. Speaker, I am moving that the amendments be deemed to have been withdrawn, nothing else, that is, all amendments and/or subamendments on Bill C-3, Bill C-19 and Bill C-22.
Business of the HouseRoutine Proceedings
The Speaker
Does the hon. government House leader have unanimous consent of the House to move the motion?
Business of the HouseRoutine Proceedings
The Speaker
The House has heard the terms of the motion? Is it the pleasure of the House to adopt the motion?
Business of the HouseRoutine Proceedings
Some hon. members
Agreed.
(Amendments deemed withdrawn)
Don Boudria Liberal Glengarry—Prescott—Russell, ON
Geoff Regan LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, I ask that all questions be allowed to stand.
The House resumed from January 31 consideration of the motion that Bill C-3, An Act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act, be read the third time and passed.
Pierre Paquette Bloc Joliette, QC
Mr. Speaker, I am very pleased to rise today to speak for the second time about Bill C-3, which deals with the establishment of the Canada pension plan investment board.
As I said previously, the Bloc Quebecois supports this bill. This initiative is very similar to the one Quebec took in the 1960s when it established the Caisse de dépôt et placement du Québec. This bill puts the final touch to a reform that is already underway, by transferring the Canada Pension Plan's assets to the board.
This is as good a time as any, just a few days after the finance minister tabled his budget, to point out the link between the bill and an issue of great concern to Canadians and Quebeckers, namely our aging population. As we know, the number of retirees will increase over the next few decades. The latest budget, which mentions the consequences of Bill C-3, does not adequately address the issue of making sure Canadians and Quebeckers will have sufficient savings upon retirement to keep them from poverty's doorstep. In this respect, Bill C-3 only deals in part with the issues of the aging population and the number of retirees.
There is still a lot of work to do and, as I said yesterday, I would have expected this budget to announce a thorough rethinking of the ways we, as a society, can make sure Canadians and Quebeckers put aside the money they will need when they retire.
The only rather worthwhile thing the finance minister has come up with in the budget is a measure to raise the limit of RRSPs from $13,500 to $18,000 over a number of years, but this will only benefit a minority of Canadians and Quebeckers. In Quebec, only 1.5% of taxpayers contribute the maximum of $13,500.
The budget did not put enough emphasis on this, and that is unfortunate. Although Bill C-3 is a major step toward ensuring that workers have adequate retirement incomes in the coming years, I have to admit, unfortunately, that this is just a drop in the bucket, compared to the challenges facing society in Canada and Quebec.
Therefore, as I said at the beginning of my speech, we will be voting in favour of Bill C-3. The Canadian Alliance has withdrawn its amendment, which, in our view, was totally inappropriate. When society agrees to defer tax payments for a number of Canadians, it is entitled to expect that the savings will be reinvested in Canada and in Quebec first.
As I mentioned earlier, the Bloc Quebecois will be supporting the government on Bill C-3, although we do realize that it is a just a tiny drop in the bucket, given the scope of the problem.
Peter Stoffer NDP Sackville—Musquodoboit Valley—Eastern Shore, NS
Mr. Speaker, I thank my hon. colleague from the Bloc for his comments, but does the Bloc not agree that there should be an ethical screen when it comes to the CPP? What I mean by an ethical screen is that it would invest in companies, in our environment and in labour and would not invest in companies such as tobacco companies. We know that right now the CPP Investment Board invests directly in tobacco companies. Does the member agree that they should or does he think they should not?
Pierre Paquette Bloc Joliette, QC
Mr. Speaker, I hope the board of directors of the new investment board will adopt an ethical investment policy.
As I said earlier, we are entitled to expect that what Canadians save, because Canadian society as a whole had agreed to defer income taxe for acertain number of years, will be used for absolutely irreprochable purposes, from an ethical standpoint.
I hope the board of directors of the investment board will implement such a policy, by banning all investments in tax havens and in businesses operating in those jurisdictions.
Therefore, for the time being, I will leave things up to the future board of directors. If this is not enough, then we may have to consider establishing a supervisory body.
While I have the floor, let me announce that, within the next few weeks, I will be introducing a bill providing for restrictions on Canadian investments in tax havens. That will give us the opportunity to discuss this issue further.
Peter Stoffer NDP Sackville—Musquodoboit Valley—Eastern Shore, NS
Mr. Speaker, it gives me great pleasure to rise on behalf of my party to debate the merits of the CPP Investment Board and the bill.
One of the biggest problems that we as New Democrats have with the bill is that there is absolutely no ethical screen to direct and guide the directors on where to invest that money. It is true that we cannot tell them where to invest in every aspect, but we should be able, through legislation by the federal and provincial governments, to ensure that this money, which belongs to Canadians, does not go into companies that inadvertently or directly kill thousands of Canadians every year.
We all know that tobacco kills. That is a fact. We all know that the government spends millions and millions of dollars through Health Canada, Industry Canada and other avenues to try to get people to quit smoking and not to start in the first place. At the same time, the government is allowing a private board to invest billions upon billions of dollars of Canadians' money in companies like tobacco companies.
A while ago I asked Mr. John McNaughton of the board, “Do my pension dollars in the CPP go into investment in tobacco companies?” He said yes.
There is no ethical screen or green screen on the board. The board invests in publicly traded stocks and obviously tries to maximize the return on investment. It is rather hypocritical for parliamentarians or any legislatures to allow that to happen and then on the other hand spend millions upon millions of dollars on advertising and other avenues to get people to quit smoking. That is just one example of a problem we have. We insist and demand that there be an ethical screen placed before the board so that it will invest in companies that do not do direct harm to Canadians.
Another problem we have is the 30% foreign investment rule. The directors are allowed to invest 30% of the money in overseas markets. The government and Parliament voted for the landmine treaty. We voted to get rid of landmines from the face of the earth, but with that 30% foreign investment rule, Canadian pension dollars inadvertently could be invested in companies in the United States, for example, that make landmines. We have no idea if they are or not, but the fact is that this is what the rule exposes us to.
Again it is rather hypocritical that inadvertently we would invest Canadian pension dollars in foreign companies that could be making landmines. We simply cannot allow that to happen. We cannot on the one hand say that we are opposed to landmines, let us get rid of landmines, we do not want them on the earth and we will spend millions of dollars trying to get rid of landmines, and on the other hand use Canadian pension dollars to invest in overseas companies that make landmines. With an ethical and green screen we can prevent that from happening.
There is another thing about this, and I am really surprised that the business community has not picked up on it yet. Maybe businesses will when it hits them. With the 30% investment rule, we could be using Canadian pension dollars to invest in foreign companies that compete directly with our own Canadian based companies. We have to ask ourselves why we would do that. Why would we allow the 30% rule of the Canada pension board to allow it to invest in companies overseas or in the United States, for example, that compete directly with our own companies within Canada?
I honestly believe that the government and the people who put this together had our best interests at heart in terms of maximizing return on investment to ensure that the pension plan is there for our children and our children's children. I can appreciate that, but at the same time we should not be using Canadian pension dollars to invest in companies that compete with our own companies or in companies that may be making landmines, or even weapons of mass destruction, if we want to carry it on further. We also should not be using our investment dollars to invest in tobacco companies, which kill thousands of Canadians every year. That could be averted with an ethical and green screen.
The CPP Investment Board will have billions of dollars of clout. It will have a lot to say about how that money is invested in the market. A lot of companies and markets around the world will look at trying to attract that type of investment. With that kind of clout, it should be at the table saying that it will not invest in companies that directly kill Canadians. Tobacco companies kill thousands of Canadians. Companies that make landmines kill or maim thousands of unsuspecting people in the world every day.
Also, we should not allow the investment board to invest in companies that directly compete with our own. Using Canadian dollars to help foreign companies compete against Canadian companies is simply unacceptable. Until that type of screen is put forward, we in the NDP will have difficulty with this bill and with that investment board.
We hope the government and other legislators will take our concerns to heart. We hope they will put those types of screens in place so we can ensure the integrity of the investments and protect Canadian citizens wherever they live in this great country.
Norman E. Doyle Progressive Conservative St. John's East, NL
Mr. Speaker, I am pleased to say a few words on Bill C-3, the Canada Pension Plan. As we said when we spoke on this bill before, there is nothing major in the bill that would necessitate voting against it so we will be supporting the bill.
The bill would consolidate management of all CPP investments under the Canada Pension Plan Investment Board. It would no longer require the CPP to hold cash reserves equal to three months of benefits. The bill would also make various technical amendments as well.
The Canada pension plan is a very important cornerstone of the future retirement savings plan of most or all of Canadians. Certainly it is one plan that is broadly supported by a wide range of Canadians. Canadians support the notion of a secure government pension plan but also of course it maximizes their retirement income.
Generally, Canada's system of retirement saving has three main pillars. The first is the universal old age security and the low income supplement. Second, there are the earnings based Canada and Quebec pension plans as well. Third, there are private retirement savings and pension plans.
The Diefenbaker government initiated the work leading up to the 1966 introduction of the CPP. Progressive Conservatives have traditionally viewed the CPP as a fundamental part of Canada's social safety net, an obligation that government must meet and government has to honour. More than 2.8 million Canadians outside Quebec receive retirement benefits of up to $9,345 a year, depending upon how long they contributed and their employment earnings. Special benefits are also provided for people with disabilities, widows, widowers and orphans. The Quebec pension plan is not a lot different.
For three decades the CPP was a “pay-as-you-go” plan. Premiums only provided a fund equal to two years of benefit. By 1997, there was only $40 billion in that fund, while the cost of promised future benefits totalled $600 billion. Without changes to the overall plan, premiums would rise to 14.2% of pensionable earnings by the year 2030.
In 1997 Ottawa and the provinces agreed to two major changes to the CPP. The first was to increase premiums more rapidly than had been previously planned but to cap them at 9.9% in 2003, which would be $4.95 for employees and $4.95 for employers. This equalled an $11 billion increase in the annual premium revenues. The plan right now is sustainable over the long run at next year's rate. All Canadians will receive the benefits that they have been promised and that is a very good thing.
Second, changes were made to the way benefits were calculated reducing slightly the pensions of new beneficiaries, reducing the death benefit and making it harder to get disability benefits.
Third, new funds flowing into CPP funds would be invested in the marketplace and managed by an arm's length agency, which is the CPP Investment Board. Previously funds not immediately needed to pay for benefits were loaned to the provinces at the rate paid by the federal government on its long term bonds.
By 2010, CPP assets will equal $142 billion. By 2050, they will approach $1.6 trillion. Therefore, by the turn of the decade, the CPP will be by far the largest investment vehicle in all of Canada.
The CPP actuary says that the changes in the bill would increase returns on CPP assets by $75 billion over 50 years. That reflects both the higher returns of a more diversified portfolio and a reduction on the amount of money that earns lower returns as part of the cash reserve. This movement of the Canada pension plan beneficiary pool toward capital markets is one that in the long term should benefit all Canadians and improve their retirement incomes.
Notwithstanding what has happened in the last year or two in the capital markets, by and large managers recorded that the return last year on the Canada pension plan compared to most mutual funds and investment portfolios was fairly good.
The CPP Investment Board's governance model is built on two fundamental principles. First, the investment professionals must be able to make their decisions without political interference, which is a good thing. Second, there must be full accountability and reporting to Parliament, to the provinces and to the people of Canada.
The legislation seems to be carefully crafted to effect accountability while ensuring independence. Whether it actually plays out that way remains to be seen. Time will tell. However it is a start in the right direction. For example, the legislation would require the board to have a sufficient number of directors with proven financial ability or relevant work experience. Why the standard would be anything lower really is not an issue. In fact that should be the minimum prerequisite.
How the directors are appointed is a departure from the traditional practice for crown corporations. The committee appointed by federal and provincial finance ministers would nominate candidates and the federal minister would select candidates from the nominating lists of the committee in consultation with the provinces. At the end of the day the appointments would still come by way of a final recommendation from the Minister of Finance, only to be rubber stamped by an order in council. That may or may not produce the very best people, but let us hope it does.
The proposed bill is a very good step in the right direction. As a result, future boards will consist of professionals with accounting, actuarial, economic and investment credentials. They will be experienced in the private and public sectors and will bring to the board informed opinions on public and private sector governance.
There are other proposed legislative measures to ensure transparency and accountability. The board will also appoint external and internal auditors who will report directly to the audit committee of the board.
Despite these powers, government can check on what is being done with the public's money. Indeed the federal finance minister will be required to authorize a special examination of the CPP Investment Board books, records, systems and practices every six years. Perhaps there might have been some utility in the suggestion of performing examinations more frequently.
Our political and public accountability is especially important at a time when some Canadians may be worried about equity markets. The Canada pension plan has to be invested for the long term. Good portfolio management expertise will prevail with the right quality of people at the management level. That one reason why it is so important that the board of the Canada pension plan be chosen very carefully.
We have had and continue to have significant concerns about the way in which the government makes order in council appointments. The correlation between Liberal Party contributions and the appearance in the board's order in council appointments is somewhat unsettling. The degree to which this level of partisanship can threaten the potential quality of the board is a very important consideration. When we are talking about the future retirement incomes of Canadians it is absolutely essential that the individuals on these boards be beyond reproach and that they be chosen by absolutely no partisan influence.
Furthermore, the government has to take a look at other ways to address Canadian retirement planning right now. We are just a few years away from seeing a significant reduction in the number of Canadians who are actually working and paying taxes, along with a significant increase in the number of people who will be drawing pensions.
Therefore the government should heed the finance committee's report and the PC's dissenting report both calling for the increase of RRSP contribution limits. Of course, we have seen that over the last few days. Hopefully this is a step in the right direction. It is one way in which we can defer taxes to the future as people withdraw from the these RRSPs.
The Progressive Conservative Party supports the bill but we want to make sure that the elderly in Canada do not suffer due to rigid policies and misguided principles or bureaucratic holdups. As I said a moment ago, the bill is a step in the right direction.
John Bryden Liberal Ancaster—Dundas—Flamborough—Aldershot, ON
Mr. Speaker, let me begin by noting that I think it is quite unreasonable to suggest that any government would choose members to the pension investment board based on partisan politics or based on anything other than their expertise. That is an unacceptable suggestion. I am surprised the member made it.
Still in that context, I wonder if the member could give me an idea of what he thinks the pension investment board should be doing relative to Canadian equities versus foreign equities. My problem with what has happened is certainly the market has plummeted since the rules were changed. Does he not feel that the pension funds of Canadians should be targeted on investing in Canadian industries and Canadian equities rather than foreign equities?
Norman E. Doyle Progressive Conservative St. John's East, NL
Mr. Speaker, first I will address the first part of the hon. member's comments.
It is important that the board of the CPP be viewed as an independent board. We have seen it so often in the past where these order in council appointments are really only rubber stamps and that we do not always get the very best people. Even though in this particular case some of the recommendations for these members of the board come from committees. However these committees are often only rubber stamps of government as well.
We have to ensure that the Canada pension plan remains viable. As I said a moment ago, I think the government is moving in the right direction. The markets right now are very volatile. Hopefully the board and the actuaries will keep a very close watch on what is happening and ensure that Canadians have a good retirement plan for the future.
Peter Stoffer NDP Sackville—Musquodoboit Valley—Eastern Shore, NS
Mr. Speaker, does my colleague and friend from Newfoundland and the Conservative Party of Canada not believe that there should be an ethical screen placed on the board? The reason I say that is that in meetings we had with the board last year, John McNaughton of the board said that they directly invested pension dollars into tobacco companies.
He knows and I know that tobacco kills thousands of Canadians every year. Yet we spend millions of taxpayer dollars to try to get people to stop smoking or to not start smoking.
Would he and the Conservative Party not believe that there should be an ethical screen to ensure that type of investment does not exist?
Norman E. Doyle Progressive Conservative St. John's East, NL
Mr. Speaker, I know where the hon. member is coming from and I agree with him to a certain extent. However I believe the board should always have the freedom to invest in whatever areas it wishes to invest in. We are talking about a good investment portfolio for the Canada pension plan. It has to be invested for the long term. Good portfolio management expertise will prevail with the right quality of people at the management level.
We all have our personal thoughts on tobacco and how it affects the nation as a whole but I think we have to ensure that the management board has the freedom to make the good managerial decisions that need to be made for the long term benefit of the plan.
John Bryden Liberal Ancaster—Dundas—Flamborough—Aldershot, ON
Mr. Speaker, the member missed the point that I was trying to make in my earlier question and that was whether or not he favoured the billions and billions of Canadian dollars that are in the Canadian pension fund being invested in Canadian equities and Canadian securities in Canada rather than allowing the Canada pension board to invest in foreign markets, not just the United States but Hong Kong or wherever else. Surely we should try to use this money to the advantage of Canadians.
Norman E. Doyle Progressive Conservative St. John's East, NL
Mr. Speaker, I would agree with the hon. gentleman that whenever possible the money should be invested in Canada. I am certainly not an expert in finances and how these things should be invested. That is generally left to the people who are on the board and to the people who are expert in the area.
However my initial reaction would have to be that wherever possible the money should be invested in Canada for the good of Canada, and that is the long term good of the fund being preserved.