Mr. Speaker, I too am addressing Bill C-226, an act to amend the Pension Benefits Standards Act, 1985 (investment criteria). It is a very small act that would modify section 7.4 of the Pension Benefits Standards Act of 1985.
Section 7.4 of the said act has the effect of requiring the administrator of any registered pension plan to file certain documents. These are pretty straightforward under the current act. They simply give information to ensure that various duties are being carried out, that the administrator's name and address is provided, and that the names and addresses of the persons who work with the body, that is the administrator, if the administrator is some kind of corporate or collective body.
The proposed act would add the following:
The administrator shall, at 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--
I will return to that in a second, but before I do I want to stop and say that the bill, whatever its merits, is a non-votable item, and that is regrettable. The whole question of the administration of our pension system is one that deserves to be discussed at length, including all private proposals on it. Indeed, all private members' business brought before the House ought to be votable, not to simply die after one hour's debate. I would go on at more length about it except that it eat into the time I have to debate the issue at hand.
The substantive comments I have in regard to the proposed bill fall under three heads. First, I want to mention the fact that the bill relates to our registered pension system. We have a number of pension systems in Canada that overlap the Canada pension plan which is a mandatory contributory plan that is income dependent and is meant to replace income. We have the old age pension and the guaranteed income supplement which simply provide a base level of income that no pensioner can fall beneath, regardless of their income during their working years. We also have a registered system, which is also like the Canada pension plan, contributory, but is administered outside of government under government regulations.
This group of pensions, which tends to be known as RSPs, registered savings plans, or RRSPs, registered retirement savings plans, is part of the pension system that is perhaps the most actuarially secure and which I think has the greatest promise of providing for the retirement income of persons who are reasonably far from retirement age due to the actuarial insecurity, both of the Canada pension plan and of the other pensions plans that I described.
The registration system, which the Pension Benefits Standards Act controls, has some benefits but it also leads to a great deal of administrative expense. This is a fundamental problem with our registered pension system. The costs that are accumulated over the life of a registered retirement savings plan to administer and to comply with the reporting requirements of the Pension Benefits Standards Act are very considerable. Because they are accumulated within the RRSP and prevent the RRSP from accumulating greater wealth over time, this actually results in each registered retirement savings plan being substantially smaller than it would otherwise be when it is rolled over. That is particularly true with regard to the smaller pensions that are accumulated by persons of more modest means.
It seems to me that in general the practice of requiring very detailed reporting of registered retirement plans is one that is not beneficial to pensioners and which could be amended easily by the government so as to provide the same level or even better level of security for pensioners but not the tremendous regulatory burden. Of course, the proposals that are put forward in Bill C-226 do add, to a modest degree, to that regulatory burden.
Let me go on to my second point, the question of whether this is needed. Is the kind of reporting proposed here needed? I can certainly see the reason why the hon. member, in proposing the bill, put forward these suggestions. She has a genuine concern that our investments in Canada be channelled into ethical, environmentally responsible and socially responsible investments. That is a worthwhile sentiment to have.
I do think it is worth noting that this kind of investment vehicle is already available in Canada. There are already ethical investment funds that set out different kinds of criteria. If we are particularly concerned about the environment and we wish to make sure that our investment moneys will go only to funds that are environmentally responsible, we can direct our money in that direction. Similarly, there are ethical investment funds that have made sure, for example, to steer clear of investments in foreign countries that engage in human rights abuses. Those vehicles are available as well.
It seems to me that in fact the need being addressed here is already largely being addressed by the marketplace itself. I worry when the government starts to interfere and get involved in this kind of regulation that rather than the openness that the hon. member talked about in her speech when introducing this bill we are going to see strict rules developed that would limit the kind of reporting that can go on. I think that is a very real concern. It is not implied in the text of this bill, but I think we need to be aware of that danger. This is often what happens when government gets involved in promoting openness. In fact, it does not promote openness in practice.
The next point I want to raise, and this deals directly with the text of the bill, is whether or not this would actually work, whether or not we actually would get the kind of openness in reporting that the member is hoping to achieve. Under the terms of the bill as it is written we would have a report once a year in which the administrator would set out the social, ethical and environmental factors that have been considered. What strikes me about this is that what the administrator is reporting on are the administrator's own motivations. As for self-reporting on something that went on within one's own head, I am not sure we can guarantee that we will get a full, open and honest consideration or revelation of what was going on. One always hopes that is the case but there is no guarantee, so for that reason I am not sure that anything is actually being accomplished through the bill.
If it is a corporate body, it is a bit different. I can see that perhaps there would be some revelation of the minutes of meetings and discussions that had gone on. Perhaps there would be some form of administrative guidelines adopted by the corporate group administering the fund to state that they do not want to invest in the following kinds of investments, perhaps investments that might in some way endanger an endangered species, or perhaps they want to steer clear of investments in areas where it might lead to human rights abuse or be seen as human rights abuse. I can see how that could be done, but I wonder if we would achieve the kinds of goals being laid out here through following the text of the law as it is written.
I do think that when we set out to write laws we ought always to remember, as they say, that the devil is in the details. It is not enough to express the sentiment. I think it is necessary to actually sit down and make sure that those sentiments will be reflected in concrete action.
I must say that the bill strikes me as being more a motion, and it would perhaps have been better to bring it before the House in the form of a motion, expressing the sense of the House and then encouraging the House to develop rules that are more concrete than those laid out here. As a bill I think it is not really that workable, although as I said before I do respect the sentiment that the hon. member is expressing in putting forward this piece of legislation.
