House of Commons photoWon his last election, in 2015, with 56% of the vote.
The Economy November 2nd, 2001
Mr. Speaker, the hon. member sees nothing but a glass half empty. The big news today was on the employment front. The United States lost more than 400,000 jobs, which is terribly bad. Canada was expected to lose a large number of jobs, like 20,000. The point the hon. member ignores, which is the news of the day, is we did not lose any jobs; we gained 1,800 jobs.
The Economy November 2nd, 2001
Mr. Speaker, this massive fiscal margin is all in the imagination of the Bloc Quebecois' finance critic. He is always talking about a surplus of $13 billion. He seems to think that he is right, and that all of the other economists are wrong.
The fact is that the federal surplus is much less than what the Bloc Quebecois claims.
The Economy November 2nd, 2001
Mr. Speaker, as the member must know, we have already announced a budget for December. We had to wait until the most recent information and the figures on the third quarter were available, toward the end of this month.
Once he sees all of this information, the member will see that we will have brought down a budget that will help the Canadian economy.
The Economy November 2nd, 2001
Mr. Speaker, I congratulate the Quebec finance minister on her budget yesterday, which added another $3 billion.
Governments in Canada must all work together in these difficult times. If we include the funds injected yesterday by Quebec and the $20 billion already added by the federal government over the past year, these measures together will give the Canadian economy a considerable boost.
The Economy November 2nd, 2001
Mr. Speaker, the member should know that the federal government has already injected over $20 billion, in terms of tax cuts and increased spending, into the field of health care. Twenty billion dollars is the equivalent of $200 billion in the states.
So, it is not just lower interest rates, but a very significant injection of funds into the economy in addition to low interest rates that will help the Canadian economy in these troubled times.
Prebudget Consultations November 1st, 2001
Mr. Speaker, I will be quite delicate, because as I said earlier today, my role here is to take notes and listen, not to enter into substantive debate. Nor will I respond to a couple of personal barbs.
Just purely on the question of facts, my difficulty with the finance critic is that he is on many occasions somewhat loose with the facts. I would like to just mention one. This is the notion that under the Liberal government we are back to tax and spend big government.
The fact of the matter is that the proper way to measure the size of the government is to take total federal program spending, that is spending on everything except interest payments, as a percentage of the size of the economy. That is, how big a slice of our total national pie do federal programs take. The fact of the matter is that we are lower today in terms of that slice of the pie than at any time in my lifetime. We have to go back more than 50 years before we find a federal government smaller than it is today.
My colleagues in the NDP will lament this fact. They would prefer to see a larger government. However, I am not talking about what is good or what is bad. I am only talking about facts.
How in the world can this member of parliament talk about us having a big government when in fact we have been shrinking to the point where today we are smaller, as a percentage of GDP, than we have been in the last 50 years?
Prebudget Consultation November 1st, 2001
Mr. Speaker, I must confess that notwithstanding the kind comments toward me from the hon. member I have a bit of a problem. I have been making notes on suggestions. I have a quarter to a third of a page from the Alliance, a quarter of a page from the Bloc and a third of a page from the NDP. When I come to the fifth party my page is blank. To be charitable I have three words: lower capital tax.
My question seeks to amplify what has been said before. Other than a statement of platitudes about needing higher security or a potted version of history, which I would dispute, I have heard absolutely nothing in terms of concrete suggestions as to what the budget should contain. That is the purpose of this debate.
Are the two leaders of the fifth party bereft of ideas? Do they have anything concrete to put forward?
Prebudget Consultation November 1st, 2001
Mr. Speaker, the member for Regina--Qu'Appelle made thoughtful comments overall. I am not agreeing with every word but they were positively enlightening compared to the two speakers who preceded him.
It is sometimes said that if one has 18 priorities, one has no priorities. The member listed about eight initiatives that he would like the government to focus on. It would be interesting to know, in order for me to transmit this information, the order of his priorities. Is it the same as the order in which he presented them? If there is not enough money to do everything, it might be a good idea to know which priorities are the more important ones. Could he tell us what his first three top priorities might be?
Prebudget Consultation November 1st, 2001
Mr. Speaker, I am not generally reluctant to offer my opinion on budgetary matters but today is different.
As Parliamentary Secretary to the Minister of Finance, my role is to listen, to sit here in the House and take note of the ideas hon. members have on the budget.
As members know, it has been a tradition for some years to have a prebudget take note debate. Traditionally it has been in the last couple of weeks of December but it is fairly evident that we would not want the take note debate to occur after the budget. Since the budget this year will be in December we are having the debate today.
While I do not want to give my own opinions, it might be useful to provide a bit of economic context for the setting in which we find ourselves and perhaps describe possible options without indicating which of those options the government or I prefer.
It is now clear, I believe, that the world economy, and the U.S. economy in particular, was experiencing a major downturn even before September 11 because consumer confidence had dropped significantly in the United States the week before that.
If the world were in the midst of a slowdown prior to September 11, it is obvious that the tragic events of that day made things worse. For the first time in some years we find ourselves in a synchronized global economic slowdown. Just about every region of the world is in the midst of that slowdown including Europe and Japan, which has been in trouble for a decade or more. South America, particularly Argentina, has problems. North America is slowing down. The only place that is not slowing down is that of China, but it is not a particularly large fraction of the world.
It is of some consolation that Canada is slowing down at a slower rate than our neighbours to the south. That may be in part because of the tax cuts brought in by the government in early January.
Canada is holding up better than the U.S. at this time. However we do not have a wall around our country. We are part of the North American and global economy, and there is absolutely no doubt that all of us are slowing down.
It is also true the majority of economists are making the argument that the Canadian and global economy will pick up in the second half of next year. They base their argument on sound fundamentals and a considerable fiscal stimulus. I believe this is the most likely case.
The events of September 11 are without precedent. Nobody can be certain that this recovery will occur. It is the best information we have based on what the majority of experts tell us. Life changes from day to day and from week to week. Everyone in the House would agree that we are living in extraordinarily uncertain times.
Now, I would like to touch briefly upon certain options. The government is prepared to listen to any ideas from hon. members, but I can present some options, whether they have government support or not.
The first concerns surpluses and deficits. The first question I would ask hon. members is this: are you really very serious, or not, about the necessity of our not getting back into a deficit situation? The government has its own ideas on this, but we would like to know what members of all political parties think about the degree of importance to be attached to not going back to the deficit situation of the past.
I have mentioned the deficit, I will now speak about taxation. There are those who would like to delay some of the tax cuts to which the government has committed itself. There are those who would like to accelerate them. There are those in the middle who would like to carry through on them but neither accelerate nor delay them.
It would be interesting to hear what members of parliament including those in the Canadian Alliance have to say on the issue of taxation.
Finally, there is the matter of expenditures. These can, I think, be classified into two groups: those related to security, and the rest.
It seems that by far the majority of Canadians, myself included—here, I am expressing an opinion—set expenditures relating to security as a very high priority for at least two reasons. First, and most important, is the protection of Canadians' lives and security, and second is convincing the Americans that we are serious and do not represent a security risk.
As everyone is aware, it is absolutely crucial from the economic point of view for goods and individuals to be able to cross the Canada-U.S. border.
We have the security related expenditures that one can look at as a group. Then we have everything else, all manner of possible projects. It would be useful for the government to hear the opinions of members on all sorts of initiatives that are on the agenda including innovation, learning, children, urban affairs, major environmental concerns, increased foreign aid to less developed countries and initiatives related to the poor living conditions of our aboriginal population. This is not meant to be an exhaustive list but those are some of the possible areas of new expenditure initiatives.
I do not want to give my opinion. At the same time I do not want to indicate that the government has no opinion. I will mention two points that the Minister of Finance made explicitly. He said he would work like hell to avoid returning to a deficit. He also said he would honour the tax cut commitment. Members of the House may have different points of view. If so, we look forward to hearing them.
I would like to make a point regarding adding up. It is not useful if an individual proposes that we have large increases in expenditures on whatever the case may be, have large additional tax cuts and keep a balanced budget. The government's point of view is that it is more useful if the proposals add up. We cannot have big spending increases, big tax cuts and maintain a balanced budget.
I look forward to listening to the opinions of members. I will be taking notes, consulting the written version of the debate and reporting back to the minister on the sentiments of members of parliament.
Employee Benefits October 31st, 2001
Mr. Speaker, the hon. member raised some interesting ideas, but I cannot support the motion. I will give the main reason I cannot support the motion first, then give some background and come back in more detail on why I cannot support it.
The basic reason is that the member's motion is a good example of what might be called the law of unintended consequences. The intent is to benefit workers in pension plans over employers, but the effect would be otherwise because the critical point that the motion fails to recognize is that pension plans are voluntary.
If this motion were to succeed and become the law of the land, the primary impact would be that we would have far fewer companies willing to set up or continue with pension plans and workers would be forced to make their own contributions to RRSPs or defined contribution plans. That is more or less what the Alliance was arguing for when we had the debate some time ago dealing with Canada pension plan reform.
We would have a retreat from the stability and the security arising from defined benefit plans which currently exist today. We would go to the much less secure world of employee directed plans where the security of the employees would be reduced. The unintended consequence of this motion would be to reduce the security for employees in their older years rather than to increase their wealth which is the intent of the motion.
I will give a bit of the background provided by the department on how the current system works. One would not want all the department's work to be of no avail. The Pension Benefits Standards Act, PBSA, is the main federal act that regulates pension plans in federally chartered enterprises. This includes banking, interprovincial transportation and telecommunications. Other private pensions are regulated by the province.
The PBSA is administered on behalf of the government by the Office of the Superintendent of Financial Institutions, or OSFI, and covers some 1,100 pension plans. OSFI clearly makes every effort to protect the rights of pension plan members having due regard for the voluntary nature of pension plan sponsorship. If we ignore the fact that pension plans are voluntary we do so at our extreme peril, which is the critical deficiency of the motion.
Bill S-3 which was introduced in 1998 is another bill that is relevant to this debate. Major changes in the bill included enhancing planned governance measures by placing more emphasis on the importance of the responsibilities of plan administrators. It required administrators to provide more information to plan members and former members on the financial condition of the plan and a means to facilitate agreements between employers and plan beneficiaries on the distribution of surpluses.
The bill specified the manner in which employers who sponsor pension plans with surpluses could withdraw a portion of the surplus. That should be of particular interest in today's debate. In June the government announced specific regulations which relate to the mechanisms for an employer to establish claims to a surplus.
The measures in Bill S-3 and the subsequent regulations provided for an explicit process for the determination of surplus ownership of pension plans. These changes created an environment where employers and employees have the opportunity to work together in dealing with pension plan surpluses.
So much for the status quo and the system under which we work today. I will now return to the law of unintended consequences. The hon. member's motion would have precisely the contrary effect to what he intends. To illustrate and explain that point more clearly we should make the key distinction between defined benefit pension plans and defined contribution pension plans.
Under defined benefit pension plans the employer guarantees to the employee a certain fixed sum of money when that employee retires and therefore is required to build up the capital to fund that future contribution. The risk is borne by the employer and that is the setting in which surpluses arise. There may be excess surpluses and the debate is about who will control them.
Under defined contribution pension plans there are really no surpluses because each employee makes a defined contribution every month or every year. The stock market and the bond market would determine the amount of money that an employee would receive in retirement.
When everybody thought that the stock market never went anywhere but up, until recently that is, defined contribution plans were becoming more popular. A lot of companies are shifting away from defined benefit where the employee has the security of knowing what his or her future pension would be and the risk is borne by the company to define contribution and where the employee gets whatever the market delivers on his or her investment.
It is too early to tell but I suspect this enthusiasm for defined contribution waned a bit in the last several months. People have learned that the stock market does not go exclusively up but sometimes goes down. The risk for the individual whose life savings are in the stock market is now perceived to be greater than it used to be.
This comes back to the Alliance's love affair with defined contribution self-directed pension plans when we were dealing with Canada pension plan reform. Thankfully we did not do this and we preserved the security of the pensions of Canadians through the Canada pension plan rather than subjecting each individual to the whims of the market. It might have looked good back then but it looks a lot less favourable and more risky today.
If companies were sole contributors and were required to say that the surplus belonged to the workers entirely, even if it were the company that put in 100% of the contributions, we can bet our bottom dollar that companies would not want that. Companies would not agree to it if this motion were to pass. Pension plans are voluntary and they would get out of it.
The trend that we have been observing from defined benefit toward defined contribution would accelerate. The unintended consequence of the member's motion would accelerate the shift away from defined benefit pension plans and toward defined contribution. The net effect would reduce the security and the income of today's employees rather than increase their wealth. That is a more than adequate reason to oppose the motion.