Sue Barnes

[Supply, May 14th, 1998]

Madam Speaker, I will be sharing my time with the member for Waterloo—Wellington.

It is a pleasure to speak to this motion because the examples of leadership this government has shown with respect to the Canadian forces are demonstrated day in and day out by the very pride we have for the dedication, the skill and the professionalism of Canada's soldiers, sailors, airmen and airwomen.

Pride in the Canadian military has very deep roots and today's Canadian forces draw inspiration from the courage, commitment and accomplishments of the hundreds of thousands of their countrymen and women who served before them for this country in war and in peace.

This government has proudly demonstrated the great honour of being the custodian of the distinguished military heritage we have. I believe the need to maintain Canadians' pride in their military tradition is a responsibility which we must and do take very seriously.

I know that the men and women of the forces also take that tradition very seriously. They are currently experiencing a period of intense operational activity and they continue to perform every mission with great skill and courage.

The mission of the Canadian forces is to defend Canada and Canadian interests and values while contributing to international peace and security.

As we all know, the world is in the midst of incredibly dramatic changes. One example is that NATO will expand to include former members of the Warsaw Pact. We are full, active partners in collective security organizations like NATO and NORAD because Canadians believe their security is indivisible from that of our allies, old and new. We continue to contribute to UN peacekeeping missions and other multilateral operations because Canadians believe they have a duty to promote stability and alleviate the suffering which is often caused by armed conflict.

Canada has participated in virtually every peacekeeping mission ever organized, with more than 100,000 women and men posted all over the world during the last half century.

Peacekeeping also requires patience and discipline, as well as innovation and courage. We have made some mistakes on our peacekeeping missions, and some serious ones, but we have also achieved some remarkable successes and, on balance, we have as a nation done a great job.

The Canadian forces in the former Yugoslavia helped to prevent fighting from spreading to other parts of the region. They saved countless lives by assisting in the delivery of humanitarian supplies and preventing more massive assaults on civilian populations.

Peacekeeping and peacemaking are proud and dangerous undertakings to which the army, navy and air force all contribute.

The responsibilities of the Canadian forces also include the surveillance and control of Canadian territory, air space and maritime areas of jurisdiction. They include the securing of borders against illegal activities, fisheries and environmental protection, the protection of Canadians from all manner of disaster and, when required, aid of the civil power.

There is no way of knowing what the 21st century holds for Canada, nor what the challenges and tasks will be for the Canadian forces. The totally unforeseen changes that have occurred on the international stage in the past 10 years are a guarantee of that.

The question is: How will the Canadian forces prepare for the challenges of the 21st century?

In the government's view the choice is clear. We must retain multipurpose, combat-capable forces to carry out the essential mission of defending Canada and contributing to international peace and security.

If the Canadian forces are to meet the challenges of the 21st century and carry out the roles provided by the government, roles which Canadians support, they must be flexible, well equipped, thoroughly trained and able to fight if necessary.

Throughout the 20th century our allies have depended on Canada as a reliable contributing partner to the preservation of international peace and security. The courage and the commitment of the men and women, along with our equipment, our training and our skills, have enabled Canada to participate with the most modern and professional armed forces in the world.

We have made a choice to maintain Canada's historic role and stature as a nation in NORAD and NATO. To do this we must continue to provide the Canadian forces with the tools to do the job.

The government has announced over $1 billion in equipment purchases. We have an obligation to spend the taxpayers' money wisely. That is why, wherever possible, we are choosing to buy off the shelf commercial technology to upgrade the equipment now in our inventory, or in some cases to consider purchasing used equipment.

The government is also restructuring the forces, downsizing headquarters, reducing infrastructure and improving management practices to enhance operational efficiency and to provide Canadians the best value for their defence dollars.

Numerous initiatives are under way and we are seeing excellent progress. In 1994 we had 52 bases and stations, far too many for the size of today's military. Today the number has been reduced by more than half to 24.

In my childhood I lived in PMQs in Zweibrucken, Germany; Centralia, Ontario; Bagotville, Quebec; and Trenton, Ontario. My father was a proud member of the RCAF and I am very proud of him and others who serve.

The Canadian forces need our support and they need our understanding. They must be given missions that are clear, realistic and achievable. They deserve our respect and our gratitude. No matter what challenges we face, no matter what choices we make, we must ensure that we do what is best for our men and women of the Canadian forces and for Canada. That is why the government has embarked on an examination of quality of life issues which face our military personnel and their families.

We have asked the Standing Committee on National Defence and Veterans Affairs to undertake an extensive comprehensive examination of the people issues so important to a modern military. This committee has been travelling across Canada and has visited our troops serving abroad. They are hearing firsthand what we need to hear, the very concerns of the Canadian people serving us.

The committee is planning to present the report in the fall and the government will at that time again demonstrate the leadership necessary by taking concrete action as required and I am confident it will do so.

Our vision of the future is that of a revitalized Canadian military made up of multipurpose, combat-capable troops, both regular and reserve, ready and able to carry out any of the operations entrusted to them.

In my city of London, Ontario we are extremely proud of the 1st Hussars, a most decorated reserve unit with a sterling and long history. In the last month I had the very real honour of being able to inspect the quarter guard. That was a very proud and memorable moment.

Also within the last month I was pleased to address the men and women graduates of our Canadian military colleges who reside in southwestern Ontario. I know that these leaders are willing to accept their mantle of leadership. They understand that service is before self.

The Canadian forces of tomorrow will continue to be a streamlined command and control structure that will be capable of producing the best possible combat forces in the most efficient and cost effective manner possible. We will be proud of them.

Our defence policy is founded upon our hopes for and understanding of a changing world and the values Canadians wish to protect, promote and perpetuate. At its heart is the example set by these thousands of men and women who for over 130 years have provided loyal and courageous service to Canada and the world.

It is very important to thank them as we stand in this Chamber today and on those occasions when we deliver ourselves in service to our country. I would like to thank them on the basis of my knowledge, understanding and appreciation of the commitments of the men and women who serve in our Canadian Armed Forces.

[Forestry, May 8th, 1998]

Mr. Speaker, recently a new initiative on sustainable forestry development was signed by representatives of government and industry.

That document was the outcome of a recent congress held in the national capital to make the Canadian public aware of the need to manage the forests in such a way that they can be perpetuated as a resource and continue to support the economic development of many Canadian communities.

The strategy includes a Canada-wide forestry science and technology action plan, which was drawn up by the scientific community.

It was also agreed at the congress that the public and private sectors will promote the candidacy of Quebec City as the host of the 2003 world forestry congress

[Canadian Unity, May 5th, 1998]

Mr. Speaker, in 1867, the two linguistic communities, the anglophones and the francophones, decided to unite to form a confederation whose existence is now firmly established and must continue to exist.

Other communities also made an essential contribution to our development and helped Canada become what it is today, that is a country which is the envy of the world.

Canadian unity is our strength and our pride. It is also a guarantee of stability and of a better future for all Canadians.

As a member representing an anglophone riding in the heart of southwestern Ontario, I want to say that my Canada includes Quebec.

[Pension Benefits Standards Act, 1985, April 3rd, 1998]

Mr. Speaker, I will try to wrap it up a little earlier than the full 29 minutes.

I believe when I left off I was speaking about standardizing pension plan contracts and transferring, especially for the small employer, some plan administration responsibility to financial institutions as a cost reduction measure. The details of this regime will be introduced later through regulations.

I would like to move now to speak about reducing regulatory burden.

Under Bill S-3 the Minister of Finance would be able to enter into a multilateral supervisory agreement that is currently being developed by OSFI and the provincial pension regulators through the Canadian Association of Pension Supervisory Authorities, known as CAPSA.

OSFI has been participating in this development for upwards of two years now. By reducing the number of rules to be complied with the regulatory burden facing multi-jurisdictional plans will be reduced. This goal is consistent with the government's objective of reducing overall regulatory burden.

While a number of issues remain to be worked out it makes sense to include the authority to enter into this agreement now to make way for future reductions in regulatory burden. In drafting this package I should point out that the government reviewed legislation in other jurisdictions in order to benefit from their experience and to minimize any regulatory differences.

I have highlighted the key principles underlying the proposed legislation and now I want to turn to some of the specifics of Bill S-3 itself.

I will start with OSFI's supervisory focus, wherein Bill S-3 replaces OSFI's obligation to review all plan documents and amendments with the requirement that plan administrators certify at the time of their filing that documents and amendments meet the regulatory requirements.

This change focuses the ultimate responsibility for the plan administration where it belongs, on the plan administrators. In turn, this allows OSFI to allocate resources to solvency concerns or higher risk plans. This refocusing is consistent with the government's intention to further clarify OSFI's mandate. It must also be noted that OSFI retains the right to review documents and amendments on a case by case basis and will do so as appropriate.

As I mentioned earlier, the superintendent currently has very limited powers to take remedial actions with respect to a pension plan. Bill S-3 introduces several specific new authorities and I will only describe the most important of these.

The most significant is the authority to issue directions of compliance to plans regarding conduct which is contrary to safe and sound financial or business practices and for breaches of the act. This is similar to the power in the financial institutions legislation.

Bill S-3 introduces an appropriate due process along with the authority for the superintendent to seek a court order requiring compliance with the direction. In addition, Bill S-3 gives the superintendent the authority to attend and call meetings with an administrator or to require an administrator to call a meeting with members and other professionals in attendance.

This authority could be used when OSFI believes that the pension plan members or all the members of a particular plan's board of trustees are not fully apprised of the problem. The superintendent will also have the authority to obtain independent professional advice at the expense of the plan. Some plans routinely neglect to file reports required by OSFI to adequately monitor plan solvency. This authority will help the superintendent to have these reports prepared.

Finally, the superintendent will be able to remove an administrator and appoint a replacement when a plan is being wound up and circumstances suggest that members' interests are not best served by the incumbent.

I am going to take a minute to cover the funding rules which have been advanced under this bill.

Under Bill S-3 the superintendent must approve any benefit enhancements that reduce the plan solvency ratio below the prescribed rates or levels. This reflects the government's belief that it is not appropriate for pension plans already experiencing financial difficulties to make improvements when there is no way for the employer to increase funding.

I have received some concerns, as I am sure my colleagues have, with respect to this approach. It is important for this House to understand what concerns have been voiced and to know that the government is working to address them.

First, we want the House to realize that the concerns being raised relate primarily to the solvency threshold which plans must maintain in order to improve benefits. This bill does not specify that threshold. Those details will be provided in the regulations.

Our original white paper indicated the government was looking at requiring that plans now show a solvency ratio of 105% after an amendment, with this requirement being phased in steadily over approximately a 15 year period. Subsequently a range of experts was consulted on this proposal. Professional and industry groups and unions have pointed out that this threshold may be too high and that more flexibility is desired. Consultation is continuing on the regulation that will provide the details behind this provision while recognizing that it serves pension plan members no great service to be promised benefit improvements that cannot be delivered.

Alternatives are being considered for achieving the same result. This could involve a lower threshold accompanied by realistic commitments from the plan to fund itself in an appropriate manner. There may also be other options that will emerge as this work is further fleshed out. It should be made clear that the government will undertake considerable consultation prior to the issuance of the regulations associated in particular with this provision.

I will spend a couple of moments on the arbitration process for surplus assets. In the white paper interested parties were invited to comment on proposals dealing with entitlement to pension plan surplus assets. Many comments were received but not many concrete suggestions were made. Most comments indicated that this is a difficult area to legislate and any improvement would be welcomed.

The government believes that Bill S-3 facilitates arrangements between employers and employees concerning the use of surplus assets in two ways. It provides a lower cost alternative to going to court and it promotes an environment where employers and employees work toward a mutually satisfactory compromise.

Briefly, Bill S-3 proposes that if entitlement to surplus assets is not clearly demonstrated in the pension plan documents then the employer can propose to the employees a surplus withdrawal.

If more than two thirds of the employees consent and required solvency thresholds are met, the superintendent may approve the withdrawal. For ongoing plans, if less than two thirds but more than one half of the employees consent, then the employer can opt to seek arbitration.

Originally Bill S-3 provided that for plans being wound up if less than two thirds but more than one half of the employees consented, arbitration would be mandatory. As I noted earlier, the Senate made a few amendments to the bill, all dealing with the surplus issue. The Senate was concerned about certain situations regarding plans in the wind-ups.

From the point of view of pension plan members and retirees, the timely statement, settlement and distribution of surplus assets is a priority. We agree that this is a concern. As such, the original bill had a certain no man's land. No definitive action to deal with surplus assets or surplus was required if less than one half of the employees consented to a proposal.

The Senate passed an amendment that requires arbitration within 18 months after the termination of the plan, irrespective of consent levels achieved for any proposals. The Senate also questioned the intent of the requirement for the superintendent to approve the withdrawal. Clearly the intent is there to ensure that certain minimum solvency thresholds are maintained. Obviously the superintendent is not going to consent to a surplus withdrawal that would jeopardize plan solvency.

The Senate agreed with the intent but perceived that the original drafting of Bill S-3 provided the superintendent with pervasive scope for not consenting to a surplus withdrawal, in particular if the superintendent did not think that the deal was fair.

There was a concern that if an employer went through the rather lengthy consent and arbitration process the superintendent could arbitrarily deny the withdrawal. As such, an amendment was passed by the Senate which requires that the superintendent in deciding whether to consent to a refund must recognize the claim of the employer to the surplus or part of the surplus, as arbitrated under the provisions of the act.

The government believes that the Senate amendments fill gaps in Bill S-3, and we appreciate the additions. Other more technical amendments were also passed.

The measures in this bill are the result of a broad consultation process. When drafting this legislation the comments received on the initial proposals contained in the white paper were considered and the appropriate amendments made. Provincial ministers responsible for the supervision of provincial pension acts were also invited to comment and there was ongoing consultation among pension supervisors throughout CAPSA.

Other proposals in the white paper not addressed in this legislation will be introduced later through regulation. Areas such as additional disclosure requirements and funding rules are already dealt with through regulations, and this approach will continue.

In other cases such as planned governance and investments, the government believes it is more appropriate to develop best practices. We recognize that the size and other attributes of individual pension plans will effect governance structures and investment strategies.

Considerable additional consultation will take place prior to the implementation of these regulations and any resulting guidelines.

At this time, on behalf of the government I would like to thank the Senate and the many industry participants and other stakeholders who provided constructive and insightful advice. I can assure them that the government looks forward to additional feedback on its regulations and guidelines in the future.

I have highlighted the important issues dealt with in this legislation. Bill S-3 will enhance the stability of Canada's private pension plan regime to the benefit of plan members throughout Canada. Of that we are confident.

I encourage my hon. colleagues in the House to give speedy passage to this bill and I thank them for their attention.

[Taxation, April 3rd, 1998]

Mr. Speaker, I wish to thank the hon. member for his question.

Revenue Canada does have special programs especially at this time of the year. The community volunteer program has over 15,000 volunteers across the country helping over 282,000 people prepare their tax returns. I stress that Revenue Canada employees, on their time, help train these volunteers. That is very commendable and it works well.

Telefile is enabling about eight million people with very straightforward simple tax returns to do their tax files from their homes.

[Pension Benefits Standards Act, 1985, April 3rd, 1998]

Madam Speaker, I appreciate this opportunity to speak today in support of Bill S-3. This legislation offers concrete and well-considered measures to enhance the supervision of federally regulated private pension plans.

As hon. members know, this bill was introduced through the Senate on September 30 last year and was reported back on November 4 with seven amendments. I would like to take this opportunity to thank the Senate committee for its rigorous review of the bill and the thoughtful amendments that were made. I will highlight the thrust of these amendments later.

Updating the Pension Benefits Standards Act 1985, or the PBSA as it is usually called, is long overdue. I would like to explain to my hon. colleagues that the PBSA is the legislation that governs private pension plans in sectors subject to federal jurisdiction. Examples of these sectors include banking, interprovincial transportation and telecommunications.

The PBSA is administered by the Office of the Superintendent of Financial Institutions, or OSFI as it is usually called, on behalf of our federal government. Of Canada's 16,000 pension plans, 1,100 are covered by the PBSA. They represent approximately $45 billion or 10% of the asset value of all private pension plans in Canada.

With the number of Canadian seniors growing rapidly, I want to assure the House that ensuring sound secure pension plan systems has been and continues to be a priority of the government. My hon. colleagues know that over the past two years the government has embarked on a dramatic reform to the public component of the national pension system.

Not only is the old age security program being transformed into a revised seniors benefit, but also more recently there was the federal-provincial agreement to reform the Canada pension plan. These are two of the three pillars of retirement security for Canadians.

Private pension plans represent that vital third pillar. Here too there is a need for action, although much less dramatic since prudent supervision and good governance are the issues that need to be addressed with respect to private pension plans.

As I stated earlier, these changes are long overdue. The PBSA has not been materially revised since it came into force in early 1987. This is in contrast to the federal institutions legislation where the supervisory and prudential systems were significantly strengthened in 1992, 1995 and again in 1997.

There is no question that the PBSA needs to be updated. While most federally regulated pension plans are fully funded, some pension plans have come under financial pressure as a result of both demographic and economic factors. These include the aging workforce and corporate downsizing we have experienced in Canada. These are two factors which make pension funding relatively more expensive for employers.

In this environment there have also been solvency concerns with some plans while others have been wound up without sufficient assets to pay all the promised benefits. In these situations the employer, whether a single employer or an industry group, experienced economic difficulty.

In addition many pension plans made substantial improvements to pension benefits in the 1980s with the expectation that employers would always be able to fund them. This also added to the challenges. In some cases insufficient contributions were made to fund these improvements.

As these problems emerged it became clear that the current prudential and supervisory framework is not equipped to deal with problem plans. The range of powers and regulatory components needed are not there. Bill S-3 meets these challenges. Under this legislation the federal government and the Office of the Superintendent of Financial Institutions will have additional necessary powers to work with plans that are experiencing problems.

I want to go into the basic principles. I want to assure hon. members that these are not patchwork band-aid measures. The measures in Bill S-3 flow from a series of basic principles outlined in the government's July 1996 white paper.

Included are the principles that private pension plans are supervised for the benefit of members, retirees and other beneficiaries; that the pension regulatory and supervisory framework should contain the incentives and safeguards necessary to reduce the possibility that pension promises are not met; and also that early intervention in and resolution of pension plans experiencing some difficulty should occur.

Outside supervision cannot and will not be expected to guarantee that pension promises will always be met nor can it be a substitute for good governance of the plans by the administrators of those plans. Regulation and supervision must be cost effective.

The regulatory framework for private pension plans should not impose undue costs on existing plans or unduly inhibit the creation of new pension plans. Members of private plans should receive adequate information from the administrator concerning the financial condition of their plan. There must be appropriate accountability and transparency in the supervisory process.

I want to discuss the basic principles in more detail. The first principle helps us to focus on what pension plans are. They are really employee benefits.

Employers, and often employees, contribute to these plans but let us keep in mind that employees often have no opportunity to withdraw from their employer plan while they work for the organization. Without the opportunity to cease making contributions, employees must rely on the plan's administrator to make sound financial decisions with their money so that benefits will be available for them in the future. It is precisely because of this situation that the government believes OSFI must have new powers to resolve the troubled plan's problems early on.

Clearly when an employer's economic difficulties affect a pension plan and a plan fails to manage its risks, it is to the advantage of the plan's members, retirees and other beneficiaries to have the situation resolved promptly.

This should not necessarily mean that the plan be terminated. There may well be other approaches and actions that can more fully preserve the employees' contributions and benefits. Yet termination is currently the only supervisory tool available to OSFI. This leads to another closely related point.

It is important that our regulatory approach recognize that the termination of a pension plan with insufficient assets to pay the promised benefits does not in and of itself represent a failure of the supervisory process. Even in vibrant economies, pension plans occasionally terminate with insufficient assets to pay the promised benefits. The health of pension plans is inescapably tied to the health of the pension plan employer and the industry in which it operates.

In a market economy some companies will inevitably encounter problems. This is simply business reality. The corollary then is clear. With insufficient assets to pay all promised benefits, no supervisory system could even begin to forestall any pension plan termination without the authority and resources to oversee all management decisions made by the sponsor.

Even if it could work in theory, such total supervision is neither feasible nor desirable. Without question this is not a viable approach in a dynamic economy like that which Canada enjoys. What is required is a balanced approach that melds appropriate supervision with responsible internal governance.

I would like to highlight one final principle. That is the need for transparency of the supervisory system, a similar one to the financial institutions supervisory system. If the financial condition of a pension plan deteriorates, it is important that pension plan administrators understand the steps authorities could be expected to take. This understanding provides a realistic and credible incentive for plan supervisors to act in a timely fashion. Furthermore the supervisor must have a clearly defined role.

Amendments in this bill to OSFI's mandate include recognition of the importance of OSFI taking prompt action to deal with pension plans in trouble. To complement Bill S-3, a guide to intervention clarifying actions that could be expected in the role of OSFI in various situations has also been introduced. This guide is similar to ones issued for financial institutions.

I would like to move on to another aspect of this legislation. Bill S-3 allows for the future introduction of a simplified pension plan. This measure is intended to help small employers and to foster an environment that provides incentives for the creation of new pension plans.

The low pension plan participation rate of small businesses suggests that the traditional pension plans do not adequately meet the needs and expectations of small employers. The government believes that action is necessary and needed to correct this situation. Bill S-3 opens the door for the creation of a cost effective regime for pension plans below a certain size, for example, one with 250 members.

In a simplified pension plan, financial institutions could propose standard pension contracts containing both general and specific provisions for the small employer. In addition, financial institutions would be responsible for administering the pension plan.

Standardizing pension plan contracts and transferring responsibilities for plan administration to financial institutions will greatly reduce costs for the small employer. The details of this regime will be introduced later through regulations.

[John Davidson, April 2nd, 1998]

Mr. Speaker, three years ago my constituent, John Davidson, pushed his son Jesse in his wheelchair across Ontario. That 3,300 kilometre journey raised well over $1 million which was put toward research into genetic diseases.

Now John prepares for an even greater journey. Starting next Friday, April 10, in St. John's, Newfoundland, John Davidson begins his walk of a minimum of 30 kilometres a day for gene research, arriving in British Columbia hopefully 250 days later.

“Jesse's Journey—A Father's Tribute” is also dedicated to hard working fathers who constantly undertake to provide the best for their families and communities. John Davidson is such a father, and I will join him as he starts his journey.

I urge my colleagues across the House to welcome him in their ridings and Canadians everywhere to support him and his cause.

“Get ready Newfoundland, you are going to be first”.

[Film And Television Industry, March 24th, 1998]

Mr. Speaker, I thank the member for his question.

The recently announced film or television production services tax credit which is administered by the Department of National Revenue has only been the latest example of our efforts. This extra $55 million in support has helped create jobs in British Columbia, in fact over 12,500 jobs in this particular area. This is wonderful for Canada. It is good for Canadian culture. It is especially good for British Columbia.

[Supply, March 17th, 1998]

Mr. Speaker, I would like to ask the member opposite, but of course I am constrained from doing so, what his party has done to discipline those members who threw the flags in this House.

[Supply, March 17th, 1998]

Mr. Speaker, it is interesting that the member has shown up for this debate. I am glad he is here.

I am here because I am on House duty today. Members of Parliament come to this place to work. This is part of my work, being in this House at a time when I am responsible to be here, to partake in the debate of the day and I will do that.

I wonder if the member opposite knows that is a part of the work of this House.