Scott Brison

[Public Sector Pension Investment Board, April 22nd, 1999]

Mr. Speaker, we have to look at the contribution rates and the fact that 40% of the contributions to this plan are made by the members.

I believe quite strongly, particularly with the investment policies promoted by and provided for in the new legislation, that the returns for this fund should actually improve over a period of time. If the government were to withdraw 60% of the fund, 40% should go back into improved benefits.

I recognize the government's arguments relative to defined benefits, that there is a guarantee the government has, but the government is grossly overestimating and exaggerating that argument to deny reasonable benefits. There was a small improvement in benefits in this legislation. But the fact is that the improvements sought by the Federal Superannuates National Association go a lot further in terms of survivor benefits for instance and in a number of areas create a much more comprehensively fair package of benefits for its members.

I would suggest, before the government delves into this plan for general spending purposes, that it should look more seriously at improving benefits within the plan.

The other thing we should keep in mind as well, in response finally to the hon. member's question, is that over the period of time, particularly with investments in the equities markets, it is not a bad thing to have a reasonable surplus within the plan from a security perspective. We should always be cautious about withdrawing that surplus and then in the future asking the taxpayer to kick back in.

The correct answer frankly is some combination of what he has suggested. I do believe we need to call in some of the best pension experts and benefits experts in the country if not in the world to help design the most optimal combination. It is not one that we should define in parliament solely on a debate type format without reasonable diligence and research.

[Public Sector Pension Investment Board, April 22nd, 1999]

Mr. Speaker, I will start with the last question first, relative to the foreign content issue. I guess the member did not hear what I was saying. Canada's equities markets have grossly underperformed those of other countries, but Canadians are not to blame for that.

I think Canadians, with the right type of leadership, could excel and create economic growth, jobs and so on but they need lower taxes. That is one of the reasons why in Canada our TSE, the Toronto Stock Exchange, has grown in value by only 60% since 1993 when this government got elected. During the same period of time, the Dow Jones industrial average has grown by 180% in the U.S. The Standard & Poor's 500 has grown by 172%.

During the same period of time, Americans growth and wealth, for those who participated in the market because of their mutual funds and pension funds, have become three times wealthier in terms of growth in economic wealth compared to Canadians. Wealth is a relative thing.

The hon. member opposite may be satisfied that Canadians are getting poorer while Americans are getting richer, but I and members of my party are not.

In terms of his comments relating to dubious bookkeeping, my comments reflected those of the auditor general a number of times over the past few budgets of the government.

The fact is that in 1984 the Conservative government of Brian Mulroney inherited a $38 billion deficit, in 1984 dollars, from the previous government. At that time, that represented 9% of GDP. By the time the government left office in 1993, that had been reduced to around 5% of GDP, almost halved as a per cent of GDP. During that time that government implemented free trade, the GST and deregulated financial services, transportation and energy.

I wonder what impact those policies had on this government's ability to eliminate the deficit. It was summed up very well in an article in The Economist last January. It said that the credit for deficit reduction in Canada belongs largely to the passage of time and economic structural reforms made by the previous government, including free trade, the GST, deregulation of financial services, transportation and energy, all those policies which were vociferously opposed by this member's party.

I heard one of the members from the other side of the House earlier today accusing the opposition of fearmongering. I see the hon. member has left the House he is so ashamed of his mistakes and his intervention.

During the free trade debate, I remember Roy MacLaren, the current high commissioner in London and past Liberal member of this House, actually saying that the Liberals would blame the Conservative government for every sparrow that falls. Well, it is because of those initiatives that a lot of sparrows have soared in Canada. It is this government's high tax policies since 1993 that have basically caused a lot of fallen sparrows and a lot of falling incomes, personal disposable incomes and standards of living for Canadians.

I would add that the member for Waterloo—Wellington has come back and has regained his composure.

[Public Sector Pension Investment Board, April 22nd, 1999]

Mr. Speaker, it is with pleasure that I rise on Bill C-78. Let us be clear. The government suggests that the main objective of this legislation is to improve the financial management of the three public sector pension and superannuation plans. The government's intention is consistent with its intention since 1993 to further concentrate its power among a very few.

There has been a secular decline in the role of parliament in the decisions made that affect Canadians. It began actually in the late 1960s. This continues and in fact has been expedited by the government. Bill C-78 is a further example of the effort by the government to concentrate power in the hands of a very few.

Increased management by the government with this legislation is defined as increased control, increased power and increased domination. It is a common characteristic of every initiative undertaken by members of the government. The power that they want to increase for themselves comes at a direct cost to parliament and to parliamentarians.

The fact is that prior to this legislation any change in the contribution rate had to be approved by parliament. After this legislation that power will rest with the treasury board president at a time when Canadians are saying they want more accountability, more input, and parliamentarians need to have more responsibility.

I believe Mark Twain once said that a bad job is one with lots of responsibility but no authority. Effectively that is what parliamentarians are being given these days. We are given lots of responsibility in many ways but really no authority. This is one of the areas, the pension plans for public servants, where Canadians deserve better. Canadians deserve due diligence and parliamentary participation to ensure that in the long term these pension plans survive and are there for the future, and that the interest of all Canadians are represented in this public policy.

The bill effectively provides the mechanism for the government to withdraw the current $28 billion surplus from the federal pension plan over a period of 15 years, and any future surpluses can be withdrawn. The legislation will permit treasury board ministers without parliament in the future to determine the use of these surpluses and to set contribution rates.

The projected surpluses starting in the year 2000 will be about $2 billion to $3 billion per year which is a large sum of money. To have that money again going directly into the government's discretionary spending or being put toward whatever pet projects the government wants to pursue at a particular time, particularly before an election, is exposing the Liberal government to a significant temptation.

It is a temptation the Liberals welcome. It is one they are actually preparing for with this legislation. They will have access to more money to spend on purposes that are important to them, to spend on the next election and to spend getting ready by bribing Canadians with their own money. It will not be spent on the types of policies that are important for Canadians in the future and that will provide for a better quality of life and greater competitiveness in the 21st century. Instead it will be spent on the types of policies that will try to convince Canadians in the short term that the government has their best interest at heart.

This legislation is another example of government contempt and lack of appreciation for parliament. As I mentioned earlier, under this legislation there is no provision for parliament to hold the government accountable for withdrawals and for changes in the contribution rates.

This is highly analogous to the situation with the EI fund and what has happened since 1993. The government has taken $19 billion from the EI fund and at the same time has used that money to pad its books to make its own fiscal numbers look better than they actually are. It has maintained unnecessarily high EI premiums. At the same time it has reduced benefits in a draconian and cruel way in many sectors and in many regions of the country.

Currently in the EI fund, for instance, only 30% of those people who are paying into employment insurance actually qualify when they need to collect employment insurance. The government is maintaining this unfair practice simply because it wants access to that steady pool of capital, that influx of capital.

The government has an insatiable thirst for cold hard cash that it can spend on unrelated programs and policies. The government has a very circuitous approach to bookkeeping and a number of times has offended the auditor general with its less than straightforward bookkeeping. In fact one would need to be a forensic auditor to understand some of the provisions in the recent budget.

The fact that the government would use the EI fund to facilitate spending in other programs is clearly unethical and regressive. The amount of EI premiums paid by a Canadian making $39,000 will be the same as the amount of premiums being paid by a Canadian making $300,000. It is an inordinately unfair tax on lower and middle income Canadians.

The government is comfortable with its practice because it is a pool of capital. It can try to hide behind the guise of having an employment insurance program with an EI premium which in fact is an EI tax.

The reason I am discussing government treatment of the EI program is that it is completely analogous with its proposed treatment through Bill C-78 of the superannuation funds. As I mentioned, the government has an insatiable appetite for money. It has a questionable approach to financial and bookkeeping practices. In this case we are not arguing with the government's legal ability to do this. The Federal Superannuates National Association has actually sought legal advice and has agreed that the government has the legal ability to do this.

The question is one of what is right, what is correct, from an ethical perspective. Traditionally 40% of the contributions have been made by the employers and 60% by the employees. If the government is proposing to take a withdrawal from this fund there should be a requirement that a commensurate reinvestment be made in improved benefits. For instance, if the contribution rate were 60:40 and the government were to choose to withdraw $6 billion from the surplus, there should be a requirement that $4 billion be reinvested in better benefits for those people who have paid in, the members of these plans. That is clearly fair.

That the government would not even engage in a dialogue on splitting the surplus with its partner, the employees who have paid into the program over the course of their careers, is actually appalling.

There are some improved benefits. The dental benefit has been improved in the programs, and we commend that. We also see recognition of same sex survivor benefits. This is one case where the government has acted pre-emptively to avoid court action. Numerous court precedents have been set recently in the interpretation of Canada's Charter of Rights and Freedoms which demonstrate quite clearly that the government is not in a position to discriminate based on sexual orientation.

The government in this case is moving, I guess one could say, one step ahead of the sheriff. That is better than being one step behind the sheriff or being dragged kicking and screaming into the 21st century, as we have seen governments in Canada in recent months and years effectively waiting for the judiciary to force them to take these actions.

This action is consistent with the realities of Canada in 1999. Governments have to lead on these issues, have to take positions such as this one and have to recognize same sex benefits as opposed to being dragged kicking and screaming by the court system.

The issue of the proposed investment board is one that on the surface looks very positive. We are pleased to see that the pension funds will be invested in external financial markets to maximize returns on behalf of superannuates.

It is laughable sometimes, though, when the government proposes an arm's length operation of these boards from the government. I would suggest that with the government arm's length relationships have very short arms.

The Canada Pension Plan Investment Board, for instance, has 12 members, 6 of whom are major contributors to the Liberal Party of Canada. If one works it out statistically, only 0.2% of Canadians are contributors to the Liberal Party of Canada. Perhaps it is even fewer for my party, but I am not bitter. It is no coincidence that so many members of the Canada Pension Plan Investment Board are Liberal supporters and contributors.

I expect when we see this investment board announced we will see a similar consistency in terms of Liberal political interference in the appointment process to these boards that will be making investment decisions for the future retirement funds of Canadians.

If there is political interference in the decisions applying to the appointment of the boards in these cases, Canadians should be concerned about political interference in the decisions and the investments made by these boards. That is a very significant concern to Canadians. I hope we consider it very carefully in the House because it is a significant risk.

Although the government purports to be trying to maximize the returns for superannuates through these changes, the fund will still be limited by the foreign content rule so that only 20% of the fund can be invested in foreign markets. The fact is that the Canadian equities markets have grossly underperformed competitive equities markets in other countries.

Since 1993 the Dow Jones industrial average has grown in value by 180%. The S&P 500 has grown by 172%. During the same period of time the Toronto Stock Exchange has grown in value by 60%.

Wealth is relative and if we deny Canadians an opportunity to achieve geographic diversification by investing as many global mutual funds do around the world to maximize the returns and to spread out their risks, we are denying Canadians the ability to build maximum wealth and retirement income in the next century.

Another issue is one we have with government policy on RRSPs. We are increasingly saying to Canadians that they must plan ahead, that they must invest for their own retirements and that they must take responsibility. At the same time we are not giving Canadians the means and freedom by which to make the best possible decisions.

The superannuation fund will again be denied the opportunity to have a maximum level of growth and a reduction in the level of risk through geographic diversification.

It is estimated that the foreign content rule costs .2% of Canadian pension funds and mutual funds based in RRSP assets. In the long term that means a 3% to 4% reduction in pension benefits for Canadians.

Some people have argued against eliminating or reducing the foreign content rule saying it would take money out of the Canadian equities market, the capital that we need in Canada. I would argue that with the Canada pension plan reform, the Canada pension plan investment fund and the superannuation investment fund, which will be invested privately, it is a perfect opportunity to invest capital from these huge, copious quantities of quid coming out of these programs into the domestic equities market.

This is the perfect time for the government to take this step. It will help provide an ameliorative step to prevent any negative impact on the Canadian equities market. There will be more capital available for both the Canadian equities market and the foreign equities market. It can be phased in over a period of time.

If we are serious about improving the quality of life and standard of living for Canadians, the government should not be forcing Canadians to invest the bulk of their retirement savings into Canadian markets, which represents 1.5% of the global equities markets. It clearly defies the logic of good portfolio management. I have some concerns about that.

The legislation at hand will make available through a surplus about $2.5 billion per year starting April 1, 2000. It will provide significantly more freedom in the future to a government to use this money for whatever purposes it wants. These pension funds were developed to provide for the long term security in retirement for the superannuates. They were not designed to provide slush funds for governing parties.

The government will say that this is a defined benefit and, since it is responsible for the payments of the pensions regardless, it has a right to do whatever it wants. We are not arguing with its legal ability to do this. We are arguing with the ethics of doing it. When the members pay a contribution rate of 40%, there should at least be an acknowledgement that there should be a significant improvement in the benefits paid out prior to a significant reduction or withdrawal of the surplus.

The other thing I noted was that the CPP actuary will be making the recommendations relative to the setting of the premiums. I remember a chap by the name of Bernard Dussault who was a CPP actuary. If I remember correctly, the government fired him. The smoking gun that the government had, indicated that he was fired because of his inability or lack of desire to hide the truth about the future of the Canada pension plan.

The last thing we need is a system that creates more potential for abuse of power, more Bernard Dussault situations where good civil servants are fired for telling the truth, and situations where there are reductions in the power of parliamentarians in designing the type of public policy Canadians need and a commensurate increase in the power of the government to do whatever it wants with money because of its insatiable appetite for spending in any area.

We look forward to debating this issue over the next few weeks. I would hope that members of parliament take very seriously the potential wrath of seniors in the next federal election. I believe seniors are the people who deserve to be listened to, and in the next federal election they will make their case very clear.

[Petitions, April 14th, 1999]

Mr. Speaker, I am pleased to present a petition from the constituents of Kings—Hants, a group of whom are opposed to the NATO bombing in Serbia and who are seeking the cessation of Canada's participation in the NATO exercise.

[Supply, April 13th, 1999]

Mr. Speaker, it is very important that all members of parliament, on a consistent basis, be judicious in their comments relative to other regions. During a previous debate on issues facing Atlantic Canada I was offended as an Atlantic Canadian when I heard a member say that the smallest violin in the world plays for Atlantic Canada. That member was mocking the efforts of Atlantic Canadians to bootstrap themselves into prosperity.

I would like the hon. member to comment on that, given that it was a member of his party, the member for Calgary West.

[Petitions, April 13th, 1999]

Mr. Speaker, I also submit to the House a petition signed by many of my constituents who are asking parliament to enact Bill C-225, an act to amend the Marriage Act and the Interpretation Act so as to define in statute that a marriage can only be entered into by a single male and a single female.

[Petitions, April 13th, 1999]

Mr. Speaker, I present to the House a petition signed by many of my constituents who are asking that section 13(5) of the Canada Post Corporation Act be repealed so that rural route mail couriers are allowed to have collective bargaining rights in the same manner as private sector workers who deliver mail in rural areas.

[Budget Implementation Act, 1999, April 12th, 1999]

Madam Speaker, I think there is some confusion on that side of the House.

The money in the fiscal surplus belongs to Canadians, who have borne the brunt of deficit reduction. It was an effort that began as early as 1984. In fact the Leader of Her Majesty's Loyal Opposition has said in the House that it was the structural changes made in the Canadian economy which allowed the current government to pay down its deficit. Those structural changes included free trade, the GST and the deregulation of financial services and transportation which began under the previous government.

The money belongs to Canadians. Canadians need that money to be invested immediately or it should be given back to them through tax reduction. Canadians need tax relief now, not in the future, not 10 years down the road. They need it now and they need significant tax relief now. While Canadians are pleased that the government is in the black, they have never been in the red to a greater extent than they are right now.

The government took $2.5 billion out of last year's budget to spend down the road. If a small business person were to practise that kind of accounting Revenue Canada would be breathing down their neck. Action would be taken against them. They would have to hire an accountant to defend them against the government.

It is not good bookkeeping and it is certainly not good economics. The money that is taken out of this year's surplus should benefit Canadians who need a break now and tax relief now, and who need better investment in health care now.

[Budget Implementation Act, 1999, April 12th, 1999]

Madam Speaker, I ask for the consent of the House to split my time with the hon. member for Markham, and I apologize for not having asked at the outset.

[Budget Implementation Act, 1999, April 12th, 1999]

Madam Speaker, it is with pleasure today that I rise to speak to Bill C-71, second reading of the Budget Implementation Act.

The recent budget failed to address many of the fundamental issues facing Canadians. The government says that the fundamentals are strong. Those fundamentals include an unemployment rate that is twice that of the U.S., personal disposal income that has dropped 7% in recent years during the same period that the U.S. has enjoyed an 11% growth in personal disposable income, and a productivity growth rate that the OECD warns Canada that if we do not improve our productivity growth rate there will be a substantial decline in our standard of living in the next 20 years. Personal debt rates are at an unprecedented high in Canada. The rate of personal bankruptcies is at an unprecedented high and there is a negative savings rate. These are the fundamentals of the Canadian economy.

When the government says the fundamentals are strong Canadians should be suspicious of the government's confidence in its policies. It reminds me of what John Kenneth Galbraith, the expatriate Canadian economist, once said. He said that one should be suspicious of governments that claim the fundamentals are strong.

I will speak specifically to some of the issues addressed in Bill C-71 relative to the CHST, the Canada health and social transfer. The government will increase funding, much of which will go to health care, by $11.5 billion over the next five years. This will mean that by the year 2005 we will have reached the same level of federal health care investment that we had in 1995. Although the government promotes that it is reinvesting in health care, the fact is that it will take until 2005 to reach the same level which health care investment by the federal government reached in 1995.

The federal government increased spending on health care and increased transfers to the provinces for that but has not provided a comprehensive and coherent long term strategy for health care despite the fact that health care costs in Canada will continue to grow by about $3 billion per year due to changing demographics. Again this is an indication of a government that by most accounts has a budget surplus but continues to have a bit of a leadership deficit.

Many Canadians were appalled when the government spent $3 million of Canadian taxpayers money promoting that it was reinvesting in health care. Many Canadians are wondering why they did not hear ads at the time when the government was taking up to $19 billion out of health care since 1993.

The fact is there were no such ads and the government is engaging in a propaganda machine to try to gloss over the fact that the same government which slashed health care and decimated the Canadian health care system, is now putting a band-aid on the health care system and has yet to deal with the systemic issues of the Canadian health care system.

The Budget Implementation Act addresses the issue of the reinvestment in social transfers. Money is being paid into a trust fund. Some $3.5 billion of this money is being paid into a trust fund. This is more part of the government's Mother Hubbard approach to fiscal policy. Instead of investing the money now into Canadian health care when Canadians need it, when the lines to receive health care have never been longer, the government is putting it into a trust fund from which the provinces will draw over the next three years.

The reason the government set up this trust fund was to skirt around the issues that the auditor general raised over the past several budgets relative to the government's taking money out of one year's budget to spend in the future.

While this may address in some circuitous way the auditor general's concerns, the auditor general is not the only Canadian who is concerned about the government's bookkeeping practices. Not only does the government's fiscal policies offend good bookkeeping practices. It also offends good economics. Canadians need economic stimulus now. Canadians need a better health care system now. This is when we need the money to be invested, not in two years or three years.

Last year the government had a vague whiff of a surplus. What did it do? It took $2.5 billion from that surplus and spent it on a millennium scholarship fund. It put the money into a pot that will not be drawn from for about three years. Not one Canadian in the year following that budget benefited from that $2.5 billion. Not one Canadian will benefit for another three years, until those funds start to go out into the Canadian public. Even at that point about 5% of students seeking higher education will be receiving any benefit from that.

While the government claims to be trying to behave fiscally responsibly, in fact due to its short term partisan goals and in particular the leadership goals of the current Minister of Finance, the government is actually betraying its trust to the Canadian people by taking money from Canadians today when they need it and not spending it until the future, not providing the type of wide broad based tax relief that Canadians need, for instance the type of investment Canadians need in health care.

The fact is the government continues to tinker with the Canadian economy. This was referred to over the weekend at the Canadian Tax Foundation conference, a non-partisan gathering of tax experts from across the country. At that conference Robin MacKnight, director of the Canadian Tax Foundation, said that in his view there had been too much tinkering of late and that the tinkering had introduced far too much complexity into the tax code.

Of course the government tinkers with everything. The government does not have any broad based long term strategy relative to any issue, whether we look at its policies or non-policies on the environment or at the government's strategies on the economy.

This is not the type of government that would have the courage and vision to introduce a free trade agreement. This is not the type of government that would recognize the importance of eliminating a manufacturers' sales tax that punished Canadian exporters, replacing it with a consumption tax. This is a government that ducks the hard issues. It continues to tinker around the margins of the real issues, as opposed to dealing with the important problems facing the Canadian economy or any of the wide range of issues.

Bill C-71 also addresses issues of human resource management. It suspends the use of binding arbitration for another two years, to the year 2001.

Recently we had an all night debate on the back to work legislation for PSAC. During that debate I was as disillusioned as most Canadians when I saw the government withhold information from members of the House until after the vote on closure. Government members as well as opposition members, including members of the Reform Party, were successfully manipulated by the government to support closure when a tentative agreement had been reached with PSAC. It did not tell members of the House about the agreement because it wanted to force back to work legislation, to rub the noses of PSAC employees and its members a little farther into the ground.

This is not good human resource management. At a time when the Government of Canada has the responsibility to play a leadership role in human resource management we are finding that the government again is not managing the issue appropriately. The morale in our public service has never been lower than it is now under this government and that is because of the government's continued disrespect for the public service and its continued efforts to emasculate the public service.

Binding arbitration has a role to play in labour management. It is time for the government to return to using binding arbitration prior to using back to work legislation. Binding arbitration is meant to be an ameliorative step to deal with problems before using the incredibly powerful tool of back to work legislation.

The government continues to try to circumvent legitimate labour management practices. It will not use binding arbitration. In fact it will be another two years before it even addresses binding arbitration.

This bill does not address effectively the issue of single income families that are punished by the government and face a discriminatory tax policy.

The Canadian Tax Foundation had its annual meeting this weekend. Bob Brown, who is currently on contract with the Department of Finance, is a leading tax expert and a member of that foundation. He spoke to the conference and presented a paper. He said that Canada at this moment has a tax system which provides less recognition for the children of middle and upper income taxpayers than any of the G-7 countries.

We are not keeping up with our G-7 partners, not only in taxes, and Canadians face the highest income taxes of the G-7, but in terms of social policy. Canadian single income families are treated worse in this country than in any other G-7 country. That is clearly inappropriate.

Madam Speaker, I am splitting my time with the hon. member for Markham.