Jerry Pickard

[Canada Pension Plan Investment Board Act, October 7th, 1997]

Mr. Speaker, the obvious reality is that people are paying into the plan. We have separate management of the plan by financial experts. They are experts in insurance policies. They are experts in social planning. They are experts in disability payments. They are experts in all areas CPP covers. They tell us the contributions—and we see it in the actuarial numbers—have not and will not pay for the retirements of the future.

We did not take this role on to stand back and not deal with it until we are at a critical stage. Paul Martin had the foresight to take the issue on immediately—

[Canada Pension Plan Investment Board Act, October 7th, 1997]

Mr. Speaker, I appreciate the question from my colleague. I am surprised because he was sitting in the House when the Liberal government was elected in 1993.

The member referred to the unemployment fund. The first measure that the government undertook in 1993 was to stop an increase scheduled by the Tory government before we were elected. Then under three subsequent budgets we reduced the EI contributions, once, twice, three times. We reduced them in every succeeding budget. For the member to suggest that we increased them, I wonder where he has been for the last three and a half years. Certainly he has not been studying the legislation.

I would like to continue on that point which he opened the door for and reiterate very firmly so all Canadians understand, that we will have a fund. It will be a tax deductible contribution by Canadians. It will pay for the CPP benefit. It will be administered by a separate body. Not one penny of contributions will go to the general revenue fund. They will go to the CPP fund and will be used to pay for benefits down the line.

It is important for Canadians to understand that there were changes made in the 1989 legislation that allowed more people to qualify for CPP and increased the flat rate. We actually increased the rates that people could receive under the CPP and we set up the plan for more people to qualify. As a result it affected the bottom line of the fund historically. That is one of the reasons that it is not able to pay for the costs in the future.

These minor alterations will set that balance straight and maintain an appropriate balance so all seniors will be allowed to receive CPP.

[Canada Pension Plan Investment Board Act, October 7th, 1997]

Mr. Speaker, that was very kind of you. The folks across the way could listen and learn a bit about the CPP legislation. Then they would understand. There is a very good colleague across the way who happens to be a parliamentary secretary who is helping them understand some of the finer details and we very much appreciate that.

In the review of what I talked about yesterday it is critical to understand that the legislation which started 30 years ago needed some upgrading to be brought into the reality of today's society. Certainly when the chief actuary reported that there was a tremendous imbalance in the relationship between the contributions on the one hand and the payouts on the other hand and that it would not be a long sustainable plan, the finance minister took it upon himself to make certain corrections were made.

As I pointed out, the minister did not move along in this in some way in that he did not hide the fact that this plan needed revision. He went about it in a very open clear obvious way. He did consultations with all provincial and territorial governments in trying to examine the direction we should go. He talked to professional actuaries across the country, insurance experts. He talked to social planners, seniors, youth and the disabled to make certain that all the elements of society that are affected by the Canada pension plan were taken into account.

The consultations took a very long period of time. The answer that came back from Canadians was to keep the CPP and to make changes if necessary. The message was that the CPP is a very vital part of Canadian society, a very foundation under which we operate and one that needs to be maintained.

I also pointed out that there were some distortions when talking about the CPP. Many colleagues across the way have suggested that it is a tax grab. Quite the contrary. This is a savings plan, an investment fund that will be managed by an independent body. Any profits that come to the management of that independent body will go back into the fund. No dollars will go into general revenue. It is an independent fund that will be managed separately.

CPP contributions are tax deductible and therefore a tax deductible process that is put in place for the future of Canadians, for seniors of today. When we look at it, there is no question that it is a very vital program.

Anyone who says it is a tax grab is saying “Don't put any more money into it”. If that is the case, the reality is that if no more money goes in, payments do not go out. In reality what they are saying is no CPP for low income seniors in the future. That is a shame because that is removing the vital foundation under which this country operates which is to look after the seniors of this land. To say “Don't put money into the CPP” is to say “Low income seniors, we don't care about you”. I have a tremendous concern about that.

The basic features remain the same today as they were before. What we were told as well through these consultation processes that I pointed out yesterday was to go very easy. We were told not to go at this process very rapidly to alienate, hurt or upset any group in society. The plan was put in place so that changes would occur over a seven year period. Those adjustments would not be put in immediately. They would be spread over a seven year period and therefore it would not be a catastrophe or a blow to any group in our society.

Thus I have arrived at the point where I finished last night and I am continuing today. The impact of the changes will be shared among retirees, future survivors of retirees and recipients of disability benefits.

As noted earlier, one currently in receipt of a retirement pension under the CPP will not see that pension change. Let me state that again because that is something everyone in this House and everyone in society should be aware of. If you are in receipt of a CPP pension today, that will not change. All of those people who have pensions now can look forward to that same pension over the years without change.

However retirement pensions for future beneficiaries would change since the calculation would be based on five year maximum earnings instead of the current three. As an example of that impact of the proposed change, the maximum monthly pension based on the year's figures would drop from $736 to $724. That proposed change means a $12 a month change in benefits. That is a minimal change. It has been designed to be minimal, not to upset or destroy the balance but to make it affordable and make those changes minimal.

There are also changes proposed in the disability benefits of the CPP. As of now, to qualify for a disability pension an applicant must have contributed to the CPP in two of the last three years, or five of the last ten years. The bill proposes to change that requirement so that to be eligible for the benefit you must contribute in four of the last six years.

Changes are also proposed to the formula which will be used to calculate the disability levels. Under these proposals, pensionable earnings would be based on the applicant's maximum pensionable earnings at the time of disability.

I see I have a short time left to finish and there are a couple of points I would like to underline. We found ourselves in a position from the actuarial studies that stated that changes had to occur in the plan. We have tried to make those changes as easy and spread over a longer period of time as possible. We believe it is very vital that all seniors have pensionable earnings. We believe that seniors must be protected with the Canada pension plan and it has to be put in place to be sustainable.

Anybody who says you cannot increase the rates is saying you cannot pay benefits to seniors in the future. That is the reality. It is either pay into the plan and pay the benefits, or do not pay into the plan and cut the whole CPP.

What I am hearing from the right wing side of the House, from the Reform Party, from the Conservative Party, is they do not want seniors to have the Canada pension plan any longer. That is the reality if they are saying not to renew it or not to do what needs to be done to improve the plan.

Liberals strongly believe this fundamental foundation in security has served Canada well and will in the future.

[Canada Pension Plan Investment Board Act, October 7th, 1997]

Mr. Speaker, last night, as you are well aware, I had started into the debate on the CPP legislation, Bill C-2. I wish to give a quick review of the points I made last night before I continue.

The CPP legislation was designed some 30 years ago. There is no question that in that design of CPP legislation there needed to be—

[Canadian Wheat Board Act, October 7th, 1997]

Mr. Speaker, I would like to clarify a couple of points that have been made on Bill C-4.

When we hear about the undemocratic process that has been suggested with regard to the wheat board, there is no question that we need to have a balance between those who are responsible for the expertise in that legislation and those who really represent the sale by the farmers.

This bill does put forward a very good balance. We do have people who were appointed as the CEO of that corporation. We are looking at an extremely large corporation. People looking after that corporation certainly have a responsibility to have the expertise to be brought forward to make certain that those issues are understood and understood well.

We certainly need a larger portion of elected people who are going to represent those they are selling the grain for. Quite clearly there is not a scenario where one can be done without the other. The expertise of both is required: those who know the value of the grain, sell the value of the grain, work with people abroad, work with all the intricacies of transportation and everything the board is responsible for; and those who represent the primary producers.

In this bill we have set forward a balance yet we have put the primary producer first without question having 10 people elected from areas across this country.

When one talks about the responsibility of that board, the Ontario Wheat Board which is a very heavy producer of wheat as well is under the Canadian Wheat Board. Ontario certainly has a very strong vested interest in how the Canadian Wheat Board operates.

There is not one Reform member who represents Ontario nor do they understand. I spent a long time in the last Parliament trying to explain to several Reform members what that condition was with the Ontario Wheat Board and our sales.

Certainly they have to understand that my riding is a major producer of wheat, there is no question about that. We produce it in Ontario yet we need to have permission from the Canadian Wheat Board to sell our grain abroad. We need to have permission from the Canadian Wheat Board to transport it from province to province. Therefore there are many implications of that wheat board that have a great effect on other regions of Canada. It is not just a western grain issue, ladies and gentlemen. That is not the case.

I also believe that when we look at this bill we have done extreme consultation across the west. There is no question that this has been a process where hearings were held by a committee that went across the west. It looked at the results of those hearings and certainly moved that issue forward.

I think the minister at the time and the minister who remains today tried to take into account every aspect of the operation of that board before he made any recommendations. He very cautiously went about the recommendations and changes that were brought about.

I have no question that the department has spent years looking at the issues and bringing forth a compromised position that actually is fair for everyone. What we are hearing here is a very one sided viewpoint, a one sided presentation.

As my colleague before me pointed out, it is very clear when they talk about not having protection for the farmers who are sitting on the board from legal suits that may come about. What an unfair position it is to ask people who are elected and sit on a major board that deals with all Canadian wheat in areas of other countries, with all the questions and problems that come about and they are saying, “Look, sit there. We will pay you a small amount but if you are sued for millions of dollars, do not expect any support”.

What a shame that is because every other corporation in this country provides those protections for people sitting on their boards. All members in this House when they stand and speak are afforded that protection in this House. The House of Commons covers their costs if they have legal problems with regard to whatever happens in the House. They cannot be sued for statements they make in the House. However at the same time, they are saying that the board of directors for the Canadian Wheat Board cannot be provided that kind of protection.

I suggest there are many arguments being put forth here which are very one sided. That is very unfortunate from my viewpoint because I believe those ladies and gentlemen who dedicate themselves to work on the wheat board, those ladies and gentlemen who shall run for the new wheat board, will do a great service for the farmers in western Canada and for all the farmers in Canada. There is no question that we should give them all of the afforded protection we can give them so that they will provide that service well.

[Canada Pension Plan Investment Board Act, October 6th, 1997]

Mr. Speaker, this is my first time speaking on a bill in the House since the election.

I would like to thank the people in Kent—Essex for their support and I look forward to working on their behalf in the House over the next few years.

I would also like to congratulate you on your appointment as acting speaker. It does bring a great deal of honour to the House to have people like you who have worked in Parliament and have done a great job in the past. I congratulate you for your efforts.

I appreciate having the honour to speak on this legislation and I support it. The Canada pension plan is one of the defining features of Canada. In the last 30 years since the plan was introduced, by a Liberal government I might add, we have certainly used it as a cornerstone for our social policy. It certainly is the key to the retirement policies and plans of all Canadians.

In the last few years however concerns have been expressed about the viability of the Canada pension plan. A recent article in Maclean's magazine for example indicated that about two-thirds of Canadians do not believe that it would be sustainable as it presently stands. Canadians are concerned and as members of Parliament it is our responsibility to take the necessary steps to re-establish confidence in the public part of society and make sure that the vital parts of this social union are carried on with stable and secure programs for the future.

In order to meet the responsibility, our government has heeded the concerns of the plan's chief actuary that the unbalanced relationship between contributions and payouts is in jeopardy and the long term sustainability of the plan must be addressed. “Changes are needed”, he said, “if we want to ensure the Canada pension plan's ability to meet the income security needs of Canadians”.

Expert analysis has shown us that the rules of our plan need to be updated to reflect the realities of today's world as well as tomorrow's. We are not only fixing today's problem. We are putting in place a plan for the future. We cannot continue to operate as though we are living in an economic and demographic situation that existed some 30 years ago when the plan was first introduced. We need to meet today's economic and demographic demands.

As a government we accept the responsibility of securing the future of the Canada pension plan. We are not afraid to take the challenges of responsibility. We took the challenge of dealing aggressively with the deficit and we met it. We took the challenge of government program review, the challenge of getting government right, and we met it. Now we are taking the challenge of securing the future of the Canada pension plan.

The amendments to the Canada pension plan contained in this bill will enable us to meet that challenge. With the support of this House, we will meet our responsibility to Canadians to make sure that the Canada pension plan will be here for them when they need it.

I want to emphasize that we have not developed these proposed changes in isolation. These amendments are the result of a long and wide ranging process of consultation that began in our last term of office. This process of consultation included talks with the provincial governments, our counterparts, territorial governments, actuarial and insurance professionals, representatives of social planning organizations, seniors, youth, persons with disabilities and a large number of others who had something they could bring to the discussion.

In short, we have consulted broadly with Canadians on the future of the Canadian pension plan and on the need for change. One of the clearest messages that we received during the consultations is that Canadians want and need the Canada pension plan. We were told in no uncertain terms to keep the CPP. Change it if necessary but keep it. So that our objective is met to keep the CPP but also to make the changes necessary to make it sustainable, the plan now before us and in the future is here.

The plan's chief actuary has told us that if we do not rebalance the relationship between contributions on one side and payouts on the other, the fund will not last beyond the year 2015. Put simply, current contribution rates are not sufficient to sustain the current benefit payouts now or in the future. Let me express that again. Current contribution rates are not sufficient to sustain the benefits and payouts now or in the future.

To keep the current benefit structure, the chief actuary has told us that we will need to increase contributions to 14 percent of income by the year 2030. Fourteen percent of one's income is too high and we know that. Once more, Canadians are unwilling to pay 14 percent. Therefore to have rebalance in a relationship between what Canadians can reasonably expect to pay and the plan contributions, we must plan reasonably the form that this benefit is taking.

A member across the way asks when did we realize this. It is very clear. When we came to government three and a half years ago, we realized there was a problem and so we did these consultations. We have been working on this issue. We have been doing the things necessary while the other government previous to ours left it. It did not have the nerve to straighten things out and correct things. Quite clearly we have done a great deal of consultation and we are moving forward.

That rebalanced relationship is very important to where these benefits are going and what is happening. As it is, Bill C-2 addresses this by proposing marginal increases in contribution rates to be phased in over a period of seven years. In this way contributions will increase by .4 percent this coming year or about $24 and will go up to 9.9 percent of income by the year 2003. This is compared to the current rate of 5.85 percent.

Some of my colleagues opposite have described this increase as a tax grab. I want to be very clear on the record that this is not a tax issue. CPP contributions are not a tax. They are contributions toward pensions. I guess they do not understand pension contributions but that is what they are.

The premium payments will not go into the government's general revenue. They will not be used in any form other than CPP. In fact the bill states that the savings will become part of a separate investment fund to be managed and invested on behalf of the plan by an independent body. CPP contributions represent an interested investment by Canadians in their own future. It is not a tax.

Contributing to CPP is not paying tax. It is planning prudently for the future of Canadians. CPP contributions are like insurance premiums. They are invested to provide for future needs. Contributions to company pension plans are not taxes. They are deductible in a similar way that CPP contributions are tax deductible investments in the future. I think it is important that Canadians understand that.

Having cleared up one of the mistaken impressions, I would like to turn now to clearing up another. That is the mistaken impression that the benefits under the revised plan are going to be cut drastically. Anyone who studies the bill will realize that the changes being proposed to the benefits are modest. In many cases benefit payouts would not change at all.

For example CPP retirement pension disability benefits, survivor benefits or combined benefits currently paid are not affected by these amendments. Also anyone over 65 as of December 31, 1997 who elects to start receiving a CPP retirement pension after that date will not see the pension affected. All benefits under the CPP, except the death benefit, would remain fully indexed to inflation.

The ages of eligibility for retirement, early, normal or late, would be unchanged. Canadians would continue to be eligible for early retirement starting at age 60, normal retirement age would be age 65 and late retirement eligibility would continue up to age 70. There would be no impact on the child benefits either for current beneficiaries or future ones.

These basic features of the CPP would remain the same but there are some changes that are being proposed by the legislation. We cannot bring the program back into balance without making some adjustments.

During our consultations we were told that we should go easy on making the changes. Canadians recognize the need for adjustments but they did not want to see a drastic change. We listened to the advice and have given some thought to all of the approaches we could take to balance the system. We believe we will accommodate that concern through this bill.

At the same time we recognize the proposed changes should not impact unduly on anyone or any group in society. Thus the impact of the changes will be shared among future retirees, future survivors of retirees and recipients of disability benefits.

As noted earlier, anyone currently in receipt of retirement pension under the CPP will not see that pension change. However, retirement pensions for future beneficiaries would change since the calculation would be based on five years of maximum pensionable earnings instead of the current three years.

[Communities, October 6th, 1997]

Mr. Speaker, the United Nations has designated today as world habitat day, a day to reflect on our communities, their importance in our lives. This year's theme is future cities, a theme that offers an opportunity for people living in communities everywhere to consider the current state of their city and to explore how existing problems can be overcome and their communities made more equitable, just and sustainable.

The conditions under which people live determine, to a large extent, their health, productivity and sense of well-being. Canadians are fortunate to live in the best country in the world and are among the best housed people. That state is largely due to the collaborative efforts of organizations such as Canada Mortgage and Housing Corporation and its various partners.

Working in close collaboration with industry and a host of government and non-governmental organizations, as well as community and self-help groups, CMHC strives to encourage the—

[Questions On The Order Paper, September 29th, 1997]

Mr. Speaker, I ask that all questions be allowed to stand.

[Royal Canadian Legion, September 25th, 1997]

Mr. Speaker, this week is Legion Week here in Ontario. We as Canadians owe a great deal to the men and women of the Royal Canadian Legion who in many cases have devoted their lives to the remembrance of their fallen comrades as well as those who have made major sacrifices for the defence of our country.

Legion members across this land take up the torch daily to enhance the lives of seniors, youth, veterans and the disabled. Last year alone $310 million were raised and spent in communities across this country while three million hours of work were put in by volunteers and members of this great organization.

May I express the thanks of millions of Canadians for the great work and dedication given to us by the Royal Canadian Legion members.

[Canadian Wheat Board Act, April 24th, 1997]

Mr. Speaker, I find this debate a little questionable. I am hearing a debate not with regard to the merit of the bill or the consultation that has gone on or the efforts that have been put forward to make sure that everyone involved has had their voice heard; I am hearing mud slinging on a grandiose scale. Maybe that is because the election is coming up.

I heard the Reform member a few moments ago suggest fresh start. Reform members told us when they came to the House of Commons that they were going to work in some reasonable fashion, bring their points forward and debate issues on merit. However, that is the last thing they have seemed to do in the last year. It has really been sad the way they have attacked and carried out arguments which may be politically motivated. The reality is there was major concern about the administration and governance of the Canadian Wheat Board and changes had to be made within the wheat board act.

There is no question that we set out to have hearings across the prairies to make sure that hundreds of organizations and individuals with concerns were able to come forth to the prairie panel that was structured to go across the prairies, listen to concerns, listen to everyone's input, give every organization an input so that we would have a pretty clear picture of what those governance changes should be and what changes should occur within the act. The minister then decided that he would structure the recommendations, listen to what people had to say and give the public a chance to respond again. The next step in the process was to take the recommendations of the panel and give the public an opportunity to respond.

These measures take time. That is why the minister has not jumped into the frying pan. He has looked at the concerns expressed to him, dealt with them carefully and formulated a very good package. In this way the whole structure of the wheat board is dealt with in a very appropriate way in accordance with the testimony brought to the grain panel. That was put into a bill which the agriculture committee of the House took across the prairies, listening to the concerns of witnesses in Alberta, the Peace valley, Saskatchewan, Manitoba, as well as every major organization in Ottawa. The committee really did an important job of consultation and listening to the concerns of interested groups.

At that time the government brought forward several amendments to take into consideration all of the issues that had been raised by individuals as well as larger organizations. All were dealt with. Quite frankly, to go through a process where 7, 8, 10, 12 months are used to listen to people and get their concerns on record and then formulate a bill is a daunting task. I was very disappointed when in committee to hear the opposition attack officials who had rigorously worked to formulate the ideas. Did they attack the merits of what was being proposed? No. They just did not like it.

I am certain that no matter what was put forward, the Reform Party would have been against it. That has been their position all along. Even if very good points are involved, they do not admit that anything is positive. There was a tremendous amount of political posturing which I do not think has been the high point in this case.

However, we are dealing with two motions which have been put forward as amendments. The motion would remove the reference to the Canadian Wheat Board Act being binding on Her Majesty in right of Canada or a province. This section of the bill was included to provide greater clarity, since the legal interpretation is that it is already the case and the act is binding on the provinces. It remains important that all participants in the industry be clear that the act is binding on the provinces. In that way we can make sure the proper selling arrangements, which have always been with the Canadian Wheat Board, are maintained. That was the reason it was included. To remove that portion is against the whole nature of the bill. Therefore, we cannot support the changes to that clause.

Section 18(1) of the Canadian Wheat Board Act currently states:

The Governor in Council may, by order, direct the Board with respect to the manner in which any of its operations, powers, and duties under this Act shall be conducted, exercised or performed.

Currently amendments to section 18 of the act are being put forward.

(1.1) The directors shall cause the directions to be implemented and, in so far as they act in accordance with section 3.93, they are not accountable for any consequences arising from the implementation of the directions.

(1.2) Compliance by the Corporation with directions is deemed to be in the best interests of the Corporation.

The directive power already exists in the Canadian Wheat Board Act. The powers already conferred on the Canadian Wheat Board by Parliament are not being diminished by this bill. Therefore there is a continuing requirement to maintain the government's ability to give direction to the Canadian Wheat Board. This power has been

used only rarely and there is no reason to expect that it would be used any more frequently in the future.

The provisions in clause 10 simply ensure that when such direction is given, it will be implemented and provide that the directors, officers and employees will not be held liable for carrying out directions given to the corporation by the government. According to section 3.93(1)(a) of the bill, directors, officers and employees must act honestly and in good faith with a view to the best interests of the Corporation. Section 10 defines complying with the government directive as being in the best interest of the corporation.

We have to make certain that people who are working for a corporation such as this have legal protection as long as they are acting in good faith and within the law. We cannot support the amendments brought by the Reform Party on this point.