Pauline Picard

[Pension Benefits Standards Act, 1985, November 5th, 2002]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I will rise again later to properly conclude this debate.

[Geneviève Verrier, November 4th, 2002]

Mr. Speaker, the Réseau des femmes d'affaires du Québec recently gave out awards to nine women who have excelled in business. This second edition of the awards had some 22 finalists.

I am proud to announce that Geneviève Verrier, Director of Operations for Alpha, an insurance company headquartered in Drummondville, was awarded the top prize in the category “executive or professional, SME”.

Since she joined Alpha in 1998, insurance premiums revenues rose from $8 million to $14 million.

This was not mere chance, but the result of a sustained effort by many people.

My congratulations to all those who contributed to the success of this SME in my area, and particular congratulations to Geneviève Verrier on her award.

[Budget Surplus, October 31st, 2002]

Mr. Speaker, taxes to Ottawa and to Quebec are paid by one and the same individual.

Does the minister not understand that the present fiscal imbalance is the result of individuals paying too much tax to Ottawa compared to the services they get from the federal government, and that a portion of these taxes would be put to far better use if it went to the level of government responsible for health care in particular?

[Budget Surplus, October 31st, 2002]

Mr. Speaker, in his economic statement yesterday, the Minister of Finance used the same strategy as his predecessor, which was to considerably underestimate the coming budget surplus in order to keep tens of billions of dollars out of the public debate on how it should be used.

Will the Minister of Finance admit that he has deliberately concealed the true figures on the surplus in order to continue to deny the existence of a serious fiscal imbalance between Ottawa and the provinces?

[Health Care System, October 28th, 2002]

Mr. Speaker, I thank my colleague for her comments. She has talked about points that have not been raised today. We are not talking about prevention, because we are debating a motion the meaning of which is hard to figure out.

This is ridiculous. It would have been much more interesting to have had a motion inviting a debate on precisely the points my colleague just raised.

Why did the government move this motion? I think it is not very clever. It did not have to look very far to come up with such a meaningless motion, which says that there is an on-going public discussion of the health care system.

The health care system has been talked about for years. We have been talking about it since cuts were made in the Canadian social transfer. Ever since, provincial governments have set up commissions to assess the needs and priorities of their citizens. In Quebec, the Clair commission did a fine job.

Why did the government appoint commissions such as the Romanow commission or have the Kirby committee produce a report? Today, all of a sudden, we are reminded that it might be a good idea to discuss the situation of our health care system in the House. Clearly, the government cannot fool the public all the time. What is going on here does not make sense. We saw it during oral question period. This is unprecedented.

Everyone was flabbergasted. If this goes on, we should stop our proceedings and adjourn, because it is ridiculous. It is beyond comprehension. In order to move motions such as this one, the government must really think that we cannot sit in this House. They tried to pull a fast one on us to be able to keep going next week, because seemingly there is not much on the legislative agenda.

This is really not serious. If the government had been serious, it would have used some of the money available, some of the surpluses that the Minister of Finance will announce. This is no secret. We know what the minister will announce on Wednesday in his economic statement. Everyone knows.

Indeed, everyone knows that there is an $8.9 billion surplus. If the government had been serious, it would have said, “We are having a debate because part of this surplus must be given back to the provinces to help deliver health services to the public”. It was agreed long ago that health care would be accessible to everyone, under the five basic principles governing health care services.

Now, there is a need for money. This is normal. Everyone agrees on the reasons why the provinces need money. As I said earlier, it is because of the aging population, because of the cost of drugs, because of the new technologies and because of research.

It is easy to understand. Why does the federal government stubbornly refuse to give the money back to the provinces, when their needs are so urgent?

[Health Care System, October 28th, 2002]

Mr. Speaker, might I begin by stating that this is not the most brilliant motion on which I have had the opportunity to speak. For us it is devoid of meaning and insignificant. I will justify our opinion by reading the motion:

That this House take note of the on-going public discussion of the future of the Canadian health care system.

The Liberal members across the way have not yet realized that their decision to slash transfer payments had serious consequences for the health system. I really wonder where they have been for the past ten years.

I believe we have had this motion moved today because the federal government is stuck and had nothing else to propose. It might have been worthwhile to consult the members of this House on fiscal imbalance or the financial leeway the Minister of Finance will soon be announcing to us. We could have discussed how part of that could have been transferred to the provinces for health services delivery.

As far as this motion is concerned, it seems that the Liberals in this House are the only ones who have not yet taken note of the fact that health care in Canada has been under discussion for some years now.

The mess the health care system is in is a harsh consequence and proof that fiscal imbalance indeed exists. The federal surplus announced for the past few months is clear proof that Ottawa is collecting too much for the services it delivers to the public.

With this surplus, the federal government keeps looking for opportunities to interfere in areas of provincial jurisdiction, and to create duplication and overlap.

How can the provinces manage to do any financial planning when here in Ottawa the federal government is resorting to its discretionary and arbitrary spending power. Over the years, the federal government has had many reminders that what it was doing was not the right approach. The provinces are short of money for health care, social services and education. The bulk of the responsibility for the health care system problems of the provinces lies, no doubt about it, with the federal government.

The conclusions of Quebec's Séguin commission, which confirmed the existence of fiscal imbalance, produced a broad consensus, not only among MNAs but also throughout the general public.

What more will it take for the Liberals to acknowledge that they are painting the provinces into a corner when it comes to their finances? Because of the fiscal imbalance, the provinces will have to deal with growing needs, particularly in the area of health funding. According to Conference Board projections, the pressure on Quebec's spending will come, for the most part, from the health care sector, which will eat up the lion's share of Quebec's revenues if nothing is done to rectify the fiscal imbalance.

This means that if we do not receive our fair share to fund the health care system—given that health care needs are growing due to an aging population, very high drug costs and high technology—not only Quebec, but the provinces will find it very difficult to fund their other responsibilities because health care will take up the largest share of their budgets.

The fiscal imbalance is in the process of becoming a fiscal strangulation. If this situation persists for long, Quebec and the provinces may be left unable to provide significant funding in other areas.

The federal government has no choice but to acknowledge the fiscal imbalance and take measures to correct it. If it continues to stubbornly deny this reality, given everything that has been said and written about the imbalance, we will have to conclude that it is acting in bad faith.

The Minister of Finance will present his economic update this week. Once again, he will announce that his wallet is fatter than he thought. The current Minister of Finance is no different from the last one: he too minimizes revenue and overestimates spending so as to make us think that tax revenue will be down and that we need to continue tightening our belts.

This type of accounting keeps a large amount of money away from the public eye. With this kind of bookkeeping, these amounts—almost $9 billion to the end of the current fiscal year, 2001-02—can be transferred directly to debt repayment. In this way, people do not have the opportunity to assess priorities or to transfer any money. Of this more than $8 billion that is being taken away from the public, $3, $4, or $5 billion could have been put back into the Canada health and social transfer to help the provinces with their health care system.

Yes, a surplus. The Minister of Finance tells us that he will use the same method as his predecessor, which is to continue to underestimate his revenues. That is what he is telling us when he says that he will be prudent.

We in the Bloc Quebecois predicted that the federal government would have a huge surplus. We said $10 billion; the government says $8.9 billion. We were not too far off. We were called stupid; we were told that we were out of touch with reality. As it turns out, we were right again.

Some members opposite claim that Quebec, among others, is jealous of the federal surplus and that is why it is fueling the discussion on the fiscal imbalance. Need I remind members that it is the way the federal government balanced its budget that has brought this imbalance to light? This imbalance began to exist in 1993, 1994 or 1995 when drastic cuts were made to transfers to the provinces. But the provinces are the ones that have to face the cost of the health care system.

The Liberal government's behaviour has been compared to that of a stingy brother-in-law who leaves the table just before the bill arrives. I could also compare it to a father who, to pay his gambling debts and finance his unreasonable expenses, decides to reduce his child support payments. This last example shows unfairness. However, in the case of two governments having the same taxpayers, it is an imbalance.

In health care, the provinces are the ones that have to absorb cost increases. They have had to bear the burden of increasing health care costs.

The figures released in June by Statistics Canada bore it out. While health costs for 2001-02 literally exploded in the face of the provinces, this Liberal federal government managed to reduce general spending, another clear indication of fiscal imbalance.

A journalist wrote in a Quebec paper this morning, “In Ottawa, they have found the solution to the problems that plague our health care system: Ottawa has to step in.”

The federal government has set the machine in motion to try to convince the public that this is necessary. Witness the Senate committee report tabled last Friday, and that of the Romanow commission.

Hinting at massive federal interference will do nothing to reassure us. Why is the federal government planning to cause chaos in health care?

What are we to make of an assertion like turning medicare into a more consistent and integrated national system instead of a combination of 13 increasingly unequal and dissimilar systems?

Do the Liberals intend to make the words universal and uniform interchangeable?

As far as the Kirby report tabled last Friday is concerned, how can digging into the pockets of the taxpayers to the tune of $5 billion, when the federal government is rolling in surpluses, be justified?

When it cut provincial transfers in 1993-94, the federal government created, as indicated earlier, the fiscal imbalance. While substantially reducing its share of health care funding, the federal government left the provinces to deal on their own with skyrocketing health costs.

Once again, we in the Bloc Quebecois are recommending that the government solve the fiscal imbalance problem. The surplus of recent years and those forecast for the next few years show that the government has the flexibility necessary to tackle the issue immediately.

The motion we are currently debating reads as follows, and I quote:

That this House take note of the on-going public discussion of the future of the Canadian health care system.

Yet, we have been concerned about this for a very long time. We sounded the alarm quite a while ago, but the people opposite were unmoved. Now they are waking up; our universal health care system has deteriorated to such an extent that alternatives like private health care paid out of the pockets of recipients have surfaced and are being discussed.

One of the positive points of the Kirby report is the recognition of the fact that the system is not viable in the long term under the current funding level. The report confirms what we have been contending since we first came here in 1993, namely that the federal government can no longer evade its responsibilities, but must assume them. How? By increasing its financial contribution, of course, but also by guaranteeing to the provinces that this funding will be stable and not affected by economic fluctuations.

As for the rest of the Kirby report, it is unfortunate that it neglected two important facts: first, the federal government does not know anything about health care management and, second, the provinces do not need new additional constraints. Their task is already complicated enough as it is.

Finally, while the provinces are condemning the fiscal imbalance that exists between them and the federal government, the federal Department of Finance is announcing an $8.9 billion surplus for the 2001-02 fiscal year.

Provincial fiscal balance is precarious all across Canada: Quebec has zero surplus, zero deficit and zero reserve; in Ontario, they have zero deficit, but a $1 billion reserve. These two provinces are on a tight rope and it would not take much to put their public finances in the red again.

It is desolation in British Columbia and not much better in Newfoundland and in Prince Edward Island, which are in a deficit situation. Saskatchewan has balanced its budget, while New Brunswick, Manitoba and Nova Scotia have managed to achieve microscopic surpluses.

By contrast with this sad picture, Ottawa is announcing surpluses. Yet, the aspiring Prime Minister and former Minister of Finance did not anticipate any surplus, only a balanced year at best.

Is this sound management of public funds? Not at all. The scandals and blunders that we have discovered and strongly condemned show rather clearly that the federal Liberal government is very prone to laxness and improvisation when it comes to managing taxpayers' money.

During the summer, the federal Minister of Intergovernmental Affairs circulated a document among the media to try to justify denying the existence of a fiscal imbalance.

He suggested, among other things, that the provinces have access to the same major tax bases: individual income tax, corporate tax, sales tax, specific taxes, and that they are free to make their own decisions.

The federal government is forgetting that there is a limit to taking money from taxpayers' pockets and that these tax grabs can have serious consequences, including moonlighting, smuggling, loss of competitiveness, taxpayer revolt and widespread disillusionment.

Liberals argue that provincial revenues exceed federal revenues. That is not particularly helpful to the debate, because it does not reflect what is needed. The federal government needs more money to finance old age pensions, native programs, technological research and development and security measures. But that accounts for only a fraction of what the provinces need.

It is very plain to see that the provinces expect to become less able to deal with their growing expenses, in part because of the dramatic increase in health costs. They demand that the federal government increase its contribution to health care funding, and rightly so.

Let us review some of the conclusions found in the Conference Board study on which the report of the Séguin Commission on fiscal imbalance is based.

Provinces are faced with a dramatic increase in health costs. These currently stand at $72 billion, but should reach close to $167 billion by 2020. Health costs are the fastest growing expenditure item for both the federal and the provincial governments. In 18 years, they will represent over 45% of all provincial revenues.

Of all the provincial sources of revenue, the one that has increased most slowly is the federal transfer payments, which have gone from $35 billion to $59 billion. Over the next 18 years, provincial health expenditures will rise nearly two times faster than all federal transfer payments, including equalization payments.

I will repeat that, so that everyone gets it: Over the next 18 years, provincial health expenditures will rise nearly two times faster than all federal transfer payments, including equalization payments.

The increase in expenditures for education will slow down because of our greying population. Education absorbs 22% of provincial revenues, and by 2020 this will be down to 19%. This is indeed a reality, but it will not be sufficient to compensate for the explosion in health costs.

What will the future of the provinces look like? Under these circumstances, they will have no choice but to sink back into deficits and debt. When the Bloc Quebecois had an opportunity to address fiscal imbalance in an opposition day last March, not one member of the party over there rose to speak, not even those primarily concerned, namely the ministers of intergovernmental affairs and of finance.

This is in strong contrast to their attitude outside this House, where they agree to provide the press with brief responses. If they cannot come up with an answer, one or the other of them will settle for the answer that fiscal imbalance is a conspiracy of the political pundits.

The Bloc Quebecois is, therefore, the only party capable of defending the interests of Quebeckers.

[Health, October 28th, 2002]

Mr. Speaker, the federal government's surplus for 2001-02 was close to $9 billion. The Bloc Quebecois estimates that the surplus for the current year, 2002-03, will be about $10 billion.

Instead of getting us to debate a meaningless motion here in the House today, should the government not be consulting us on how much of the surplus ought to be transferred to the provinces for health care?

[Health, October 28th, 2002]

Mr. Speaker, the Kirby report has proposed two approaches to increasing the share of health care funding, either a 1.5% increase in the GST or a variable national health insurance premium.

Since the federal government already has a substantial financial margin available to it, will it confirm, unequivocally, its rejection of these two scenarios?

[Canada Pension Plan, October 22nd, 2002]

Mr. Speaker, I am pleased to speak to Bill C-3, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act.

I am rather offended by the comments made by the member from the Canadian Alliance. He seems to despise one of the finest institutions that Quebec has created for its own growth. This can be clearly seen, it is creating jobs. The Caisse de dépôt du Québec has created the largest number of jobs; this has been confirmed by Statistics Canada data. It is largely responsible for the job creation and economic growth that we are now experiencing.

His comments demonstrate how little he knows Quebec's institutions, not to mention Quebeckers themselves. If the Alliance hopes to make inroads in Quebec someday, it will not be with this type of statements, which basically insult all Quebeckers who worked to set up these institutions.

I would like to provide some context on Bill C-3. First, the Canada Pension Plan Investment Board is closely modelled on the Quebec Caisse de dépôt et placement. It too has the mandate to achieve the best possible rate of return on the funds it receives from the Canada Pension Plan. Revenues generated through the investments will allow the CPP to pay Canadian workers their pensions.

The Canada Pension Plan Investment Board was established as a federal Crown corporation by an act of Parliament in December 1997 and made its first investment in March 1999. At that time, both the Bloc Quebecois and the Caisse de dépôt supported the bill overall. As I said earlier, we have our own pension plan, the Régie des rentes, which is managed by the Caisse de dépôt.

To summarize, this bill would consolidate the management of all Canada Pension Plan assets through the board, which should help ensure the stability of the public pension plan. The changes outlined should allow for the management of the operating balance and the portfolio of bonds to be transferred to the Canada Pension Plan Investment Board.

This bill seems justified in order to complete the transfer of all pension funds assets to the board. Again, the federal government is copying one of Quebec's proudest achievements, namely the Caisse de dépôt et placement du Québec.

We certainly support this initiative. However, I have some reservations about the provisions of the bill dealing with the limitations on foreign assets. I think we need a more thorough analysis to understand all their impacts. We must not forget, however, that if the board becomes too active abroad, it will lose the role of wealth creator it plays within Canada's borders and indirectly, sometimes, in Quebec.

As I said, the position of the Bloc Quebecois on this issue has not changed. As hon. members know, this bill was introduced during the first session and the government has now revived it. Our position since the last session has not changed. We support this government initiative and wish it as much success as the Caisse de dépôt et placement du Québec, created 36 years ago, has knowm to this day.

Once again, a model from Quebec that has left its mark has caught the attention of the House.

Like my colleague from Saint-Hyacinthe—Bagot before me, I would now like to draw a picture of the Caisse de dépôt et placement in order to inform hon. members of this House and Canadians about the positive things they could do with this major instrument which is the Pension Plan Investment Board.

For Quebeckers, the Caisse de dépôt et placement is somewhat the spearhead of their financial emancipation, as I already mentioned earlier. This is why I was stunned to hear the position of the Canadian Alliance. Again, it is as if they were putting Quebec down.

The Caisse de dépôt et placement helped Quebec become what it is today. We are happy that Canada is using it as a model and an instrument, as I said earlier, to support the assets of Canadians in a very positive way.

The nationalization of electricity, and the creation of the Régime des rentes and the Caisse de dépôt et placement to manage Quebeckers' savings, are probably the cornerstone of what we, Quebeckers, have become financially and economically in the last 36 years. And we are very proud of that, whatever our Canadian Alliance friends' views on the matter. The caisse is our cherished child; hands off. They think they can make a breakthrough in Quebec, but they will not win our support by turning their nose up at our tools and the means we have devised to pull ourselves out of the rut, out of poverty.

I realize that many Canadians keep a prying eye on the Caisse de dépôt et placement because it has become a major force on Canada's financial scene. This scares many people, including the big financiers on Bay Street, who have done everything they could to try to weaken the Caisse de dépôt et placement since it was first created. This is something that is a bit visceral with Canadians and Canadian financiers, especially those in Toronto.

People are upset to see how much Quebeckers have saved over 36 years through the Caisse de dépôt et placement, how much wealth its decisions have created during that period, and what a formidable financial force the caisse, which started out with capital of $1 million in 1966, has become. It is so formidable that it has become the 12th largest fund manager in North America. I will repeat for the Alliance members who may not have heard and for the last speaker: it has become the 12th largest fund manager in North America. It is the largest in Canada. Also, it ranks eighth in real estate holdings.

Of course, such success does not please everyone. I will remind the hon. members of sad events in our history, events such as the attempt in 1982 and the aborted attempt in 1983 to weaken the Caisse de dépôt et placement. But let us first review the rich history of the past 36 years.

The Caisse de dépôt et placement was created in the wake of the quiet revolution by one of the founders of this revolution, the main one, because he was then Premier of Quebec, Jean Lesage. In 1964, at the Quebec City conference, Mr. Lesage had a bit of a creative temper tantrum in reaction to Mr. Pearson's desire to impose a Canada-wide pension plan run by one manager, which of course was the federal government at the time. Quebec had already given thought to setting up a typically Quebec pension plan with just one caisse to manage these considerable savings.

I find it hard not to mention all those who laboured, both politically and technically, in the 1960s to build the Caisse de dépôt et placement. One of those involved was the late Michel Bélanger, who had been president of the Montreal Stock Exchange and a member of the Bélanger-Campeau commission. At the time, he was a senior government official and one of those who had come up with the idea of the Régie des rentes and the Caisse de dépôt et placement.

There were also Claude Castonguay, whom everyone knows, André Marier, Marcel Bélanger, Roland Giroux and Roland Parenteau.

There was also the first president, Claude Prieur, who started off in a little office in downtown Montreal, with very few means when he began as president of the Caisse de dépôt et placement du Québec.

I would like to quote Mario Pelletier, who wrote an excellent history of the Caisse de dépôt et placement du Québec. Mr. Pelletier wrote that, in January 1965, Claude Prieur, the first president of the Caisse de dépôt et placement du Québec, a manager with the powerful Sun Life company until then—he was a pretty sharp tack, as they say—moved in all alone into the decrepit office on McGill Street.

During the two months that went by before any income came in from the Régie des rentes, he was forced to take out loans in his own name, with no help whatsoever from the government, in order to set up what would later become the Caisse de dépôt, which now has $133 billion in capital.

Today, the Caisse de dépôt does $10 billion worth of transactions every working day. That was last year's average. Listen carefully, because this is important to highlight—and I am also mentioning it for the Canadian Alliance—we are talking about $10 billion worth of transactions each working day.

Last year alone, the Caisse de dépôt et placement du Québec carried out $2 trillion in transactions, or three times Canada's GDP.

I should point out that the term billion in English does not refer to the same thing as the term billion in French. We have thousands, millions, billions and, finally, trillions. In French, the term billions refers to a greater number than billions. So, there were $2.5 trillion worth of transactions last year, which is three times Canada's GDP, or more than $10 billion every working day. We are talking about the 12th largest manager of global assets in North America; it is the eighth largest in terms of real estate holdings. This is no small institution.

There is also another person who was involved in creating the Caisse de dépôt, whom I neglected to mention on purpose. It was Jacques Parizeau.

He worked very hard to make the Caisse de dépôt what it is today, an institution that has stood the test of time, with a few updates, mostly since the early 1990s, with respect to the Caisse de dépôt's international activities.

Mr. Parizeau was known at the time as a brilliant economist, recognized as such, a senior government official, a great builder of the Quebec state, and he would become, some years later, Quebec's finance minister, then premier.

Mr. Parizeau did not only contribute to making the Caisse de dépôt what it is today, being one of its main initiators. In fact, he played a key role in everything pertaining to the modernization and dynamism of Quebec's financial sector.

Mr. Parizeau drew from that experience with the Caisse de dépôt et placement and the Régie des rentes du Quebec, the Quebec pension plan, and from his experience as finance minister at the time, to develop modern tools to move Quebec forward, to move the Quebec business sector forward, and to get the business people to move forward, since the business sector of the late 1960s was quite different from what it has become today.

Among other things, the creation of the Caisse de dépôt et placement marked the start of a move toward a greater participation of small investors in Quebec's economic and financial evolution. This goes back to the Parizeau commission on guaranteed investment funds, which means guaranteed deposits.

Mr. Parizeau initiated this commission, which created the Régie de l'assurance-dépôts, guaranteeing small investors would keep a portion of their deposits in financial institutions. The security of their investments was guaranteed. From 1967 on, that was a big help for small investors in Quebec, enabling them to take part in the economic and financial evolution of the country they love and cherish.

Mr. Parizeau was also the one behind the stock savings plan created in 1979. Once again, his goal was to get everyone involved in the economic and financial progress of Quebec. He was also at the origin of the modernization of the tools for monitoring and properly administering our securities, such as the Commission des valeurs mobilières du Québec and the Inspecteur général des institutions financières.

It is based on this experience with the Caisse de dépôt et placement, from the work done by the original stakeholders behind its creation to the addition of fundamental and democratic tools to democratize the financial sector, that the Caisse de dépôt et placement was built up over time. It has evolved over the years and contributed to the creation of various companies that have grown into major undertakings, such as Alcan, Hydro-Quebec, and Bombardier. In this connection, let us keep in mind that the first government involvement was via the Caisse de dépôt et placement, with investments in Bombardier, Domtar, Vidéotron, Noranda and Canam Manac.

In 1985, the decision was made to focus more on small and medium size businesses that were the ones creating jobs in the regions. Investments were made in 63 companies, with an average performance of 30%. This is nothing to sneeze at, although my Canadian Alliance colleague looked down his nose somewhat at these figures, but for startup companies this is an extraordinary performance.

So much so that the Caisse de dépôt et placement became an incredible agent of the economic and financial development of Quebec and it was ranked tops among fund managers in Canada in the 2000 Reuters Survey, which Tempest carried out by contacting--not just anyone--but TSE 300 companies.

In the year 2000, the biggest companies in Canada considered—and this still holds true today—the Caisse de dépôt et placement du Québec, which is a source of pride for Quebeckers, to be a vital tool that has played a cutting-edge role in the financial emancipation of the people of Quebec since the late 1960s. Moreover, it is ranked as the best money manager in Canada.

In the context of globalization, the caisse model continues to be successful. We cannot escape globalization; it shapes our environment and affects us all.

Globalization is the source of both fear and enthusiasm, and is replete with both opportunities to be seized and pitfalls to be avoided. The Caisse de dépôt et placement is interested in globalization from the point of view of its investors, its impact on the development strategies of its partners, and of the role it will be required to play as a result.

For a number of years, the caisse has developed based on solid values with two aims: growth and cost-effective performance.

The caisse's assets have risen from their 1981 level of $11 billion, to $44 billion in early 1995, and now to in excess of $110 billion. Just do the math: ten times the 1981 level, and more than twice the 1995 level. That is what success in Quebec is all about.

The caisse continues to respect the decision of its board and its administration to provide its depositors and its clientele with the financial products necessary for a diversified and cautious portfolio, but one that is above all efficient.

In Quebec the caisse has bolstered the fund administration industry. Its objective is a simple one: to share its success with other similar funds. It administers mutual funds for Cartier, whose funds are available throughout Canada.

As far as performance goes, all we need say is that the 1999 results of all of its investment teams overshot their objectives, with an overall performance rating of 16.5%. This is worthy of mention because it is not seen very often.

I would point out to those who might underestimate this, that over a five-year period, most of the teams of the caisse were at the leading edge of their industry, with an overall performance in the order of 14.7%.

The caisse approach, as we call it, contributes to the growth of the economy of Quebec, the growth of our industries, the growth of our companies. As a result, the quality of life of millions of people in Quebec is enhanced, and their future assured. The caisse operates with respect for its members.

The approach the caisse takes in order to achieve those aims focuses on partnership. Whether in Quebec, in Canada, or elsewhere, the caisse draws upon the expertise and experience of its partners in their respective areas.

Another key to success is information. There is no doubt that the quality and the originality of the information available to its decision-makers play a major role. The caisse devotes significant resources to process and make use of the huge pool of information that its managers and partners have. As we can see, the caisse respects some fundamental values while actively promoting and developing these values.

It is obvious that the history of the caisse and the way it does business is rich in happy developments. Let me talk about a situation that occurred in 1982, although some may feel this is ancient history. However, it still has echoes today, particularly since 1993.

As members of the Standing Committee on Finance, Bloc Quebecois members--especially my colleague from Saint-Hyacinthe—Bagot--meet business people from across Canada. Some of them have shown contempt toward the Caisse de dépôt et placement.

When this bill was last debated, my Canadian Alliance colleagues were among its critics, as they are again today. We met Bay Street financiers who hate the Caisse de dépôt et placement, even though it makes a positive contribution to the Canadian economy and has become a key player in a number of so-called Canadian businesses that make Liberal, Conservative, Canadian Alliance or New Democrat members so proud.

Still, some continue to despise the Caisse de dépôt et placement and to say that it is bad, that it is rotten. Because the Caisse de dépôt comes from Quebec and has become Canada's largest manager, there is reluctance on the part of Canada to recognize achievements by Quebeckers. This is because until this financial emancipation occurred, it used to be said that Quebeckers were not cut out for business, economic and financial matters. But now that we have created something as fundamental as the Caisse de dépôt et placement, they are a little less eager to put down Quebeckers.

In 1982, the federal government decided to introduce Bill S-31. We still remember that Bill S-31, introduced by André Ouellet, then Minister of Consumer and Corporate Affairs, prohibited the Caisse de dépôt et placement from holding more than 10% of the stocks of major businesses in Canada. At the time, the Caisse de dépôt et placement was considering investing in Canadian Pacific.

This generated incredible controversy. Owned by Quebec interests and built on Quebeckers' savings, the Caisse de dépôt et placement would become CP's main shareholder. This created an incredible uproar in Canada, so much so that business people from English Canada decided to wage a war against the Caisse de dépôt et placement. This is why the Caisse de dépôt was not very popular at the time. It was impossible for Quebeckers to become CP's main shareholder.

They decided to put unbelievable pressure on the federal government to get it to introduce Bill S-31, which provided that the Caisse de dépôt et placement could not hold more than 10% of the shares of companies involved in interprovincial transportation.

This did not target Canadian Pacific alone—it was clear that the railways affected all of Canadian business. Do you want to know why? Because all Canadian businesses at the time had a stake in transportation. If it was not air transportation, it was shipping—in the oil industry, for example, it was in pipelines—or the railways, which was a secondary activity, but which was added on to manufacturing and also the service sector.

For the year that the saga of Bill S-31 dragged on, from 1982 to 1983, before the government finally withdrew the bill due to pressure from Quebec business, we Quebeckers lost incredible opportunities to invest the significant sum at the time—I think it was around $17 billion—that the Caisse de dépôt et placement held in capital.

During that year, we lost the ability to benefit from the increase in value of Canadian Pacific shares. In 1982, CP shares were worth $30. In 1983, they were worth $50. We could have made a $20 profit per share if the Caisse de dépôt et placement had been allowed to own more than 10% of CP shares. The caisse lost some $15 to $20 million dollars, with CP alone. We have to assess all opportunities that were lost because shares of other Canadian businesses could not be purchased, given that the provisions of Bill S-31 that were retroactive.

Before this bill, we were told it would be retroactive. If the Caisse de dépôt et placement had invested more than 10% in the specified businesses, it would have had to get rid of the difference. Selling shares when you are being forced to do so means you end up selling off shares at a loss.

This is what they were going to force the Caisse de dépôt et placement into, as it was getting too powerful for the liking of English Canadians. The president of the Toronto Stock Exchange at the time, Mr. Bunting, launched an incredible offensive to bring down the Caisse de dépôt. All of the big Canadian corporations like Bell Canada, Stelco, the Bank of Montreal, the Royal Bank, Dominion Textile, Nova, Inco and Hiram Walker fought against the Caisse de dépôt et placement to keep us from moving forward.

Totalling the losses, for example for 1982-83, we lost $100 million in opportunities in one year. This is a plausible figure because for CP alone it is around $15 million or $20 million. Given the average yield of the Caisse de dépôt et placement, between 1982 and 2001, this means over $1 billion of potential capital lost to Quebeckers.

Thus today the value of the Caisse de dépôt et placement is not $134 billion but $133 billion. Quebeckers would have had $1 billion more to invest and to build up their savings with.

Because of the Bill S-31 episode, we have $1 billion less, and that is a real annoyance. Today, here we are faced with your bill, which creates and consolidates the activities of the Canada Pension Plan Investment Board. We are here to support it, despite our memories of Bill S-31. We said to ourselves “Let us put that in the past for now”. People take much delight in recalling this episode.

But we are supporting you in this wonderful plan to create another sort of caisse de dépôt et placement in Canada, using the money in the pension plans of Canadians outside Quebec, because it will open up opportunities and thus democratize the economic growth of Canada.

As do all my colleagues from the Bloc, I wish you as much success with the Canada Pension Plan Investment Board as we have had with the caisse de dépôt et placement.

But I hope that nobody puts obstacles in the way of this wonderful initiative such as we have had to face since 1982. And there were all sorts of subsequent criticisms of the caisse de dépôt et placement. There were all the smear campaigns I have seen since I became a member of the Standing Committee on Finance. As a member of that committee, I have heard a lot of incredible comments.

When one visits Toronto and talks about the caisse, it is as though one had mentioned the plague. People are afraid of it. We are flattered by this reaction. But, at the same time, it would have been nice if, in the past, you had been as enthusiastic about the growth of the Caisse de dépôt et placement du Québec as we are now about the creation and consolidation of the activities of the Canada Pension Plan Investment Board.

I remind the House that we are in favour of this bill to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act. The board acts as an investment corporation not unlike the Caisse de dépôt du Québec with a mandate to invest the money from the Canada Pension Plan in order to get the best possible return.

The Quebec Caisse de dépôt et placement also provides support for clients interested in the long term strategic development of their business, regardless of where it is located in the world. It is an accessible partner much sought after by businesses that think big. It is among the most active investment bodies in the world in the area of private investments. People who are interested in exporting their products and services and opening up new markets will find the support they need at the caisse.

Furthermore, clients of the Quebec Caisse de dépôt et placement benefit from its worldwide network and its specialized services. I do not understand why the Canadian Alliance is against the bill before us, when the board in question would allow the regions to promote strategic development and provide support for businesses. These are businesses that want to think big, that hope to export and want support. I do not understand. What other kind of wonderful instrument are they trying to come up with or have they already come up with to replace an instrument as effective as the caisse de dépôt et placement? It has proven itself in Quebec and an equivalent body in Canada would definitely contribute to strategic development, as has been the experience in Quebec.

It also provides, at each major stage of expansion, a unique source of capital for businesses. It supports the sustained growth of businesses from all sectors of the economy, from the most traditional to the most modern ones. Its professionals, who are active in their respective areas of expertise, share their skills and know-how by making available to these businesses a one-stop financial service.

Regardless of the projects, including business start-ups, support for expansion, a public call for savings, local or international expansion, a merging or takeover, financial restructuring, asset acquisition, exports or setting up abroad, family property transfer, or the sale or redemption of stocks, the goal of the caisse is to build the future and make the present better.

The Caisse de dépôt et placement du Québec is active in all the world's major financial centres and it has been developing its skills as a manager of public funds for over 36 years. It uses its own expertise, along with that of its partners, that is the institutions and businesses. Its clientele, which is mostly made up of public organizations, puts its deposits in the hands of the experts of the Caisse de dépôt et placement, because the caisse's management, which relies on a combination of daring moves and caution, guarantees returns higher than the main reference indicators, year after year.

As I mentioned earlier, the Caisse de dépôt et placement is Canada's largest investor in the private placement and venture capital sector. It is the primary holder of bond certificates from Quebec's public sector, and it has the largest real property portfolio in Canada. I am repeating this so that members opposite can understand clearly: in order to develop new structures for the financial management of collective savings and take advantage of the best investment opportunities, the Caisse de dépôt et placement is the place to go.

It is making ever greater use of its experience abroad, particularly on emerging foreign markets. Through consulting services and in partnership with the local expertise available, it is involved in the setting up, management and administration of social and collective savings programs such as retirement funds.

The objective is twofold: to stimulate local financial markets through sound and rigorous management, and to be involved in the establishment of a social protection structure, in particular through the creation of retirement funds.

In conclusion, I hope that Canada can have such an instrument, which has contributed to the economic expansion of all of Quebec. This is the wish that I am making for all the other Canadians.

[Taxation, October 21st, 2002]

Mr. Speaker, clearly the current minister has kept the same approach as his predecessor.

Will the Minister of Finance acknowledge that the reason he is denying the existence of the fiscal imbalance and hiding the surplus like this is to avoid his obligations and deny Quebec and the provinces the opportunity to invest the money in health and education?