2003-01-31

Government Orders
Hon. Don Boudria (for the Minister of Finance): 
moved that Bill C-3, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act, be read the third time and passed.

Mr. Bryon Wilfert (Parliamentary Secretary to the Minister of Finance, Lib.): Mr. Speaker, I welcome the opportunity to speak today at third reading of Bill C-3, which amends the Canada Pension Plan and the Canada Pension Plan Investment Board Act.
As hon. members are aware, this legislation completes the reforms to the Canada pension plan which the federal and provincial governments, as joint stewards of the plan, initiated back in 1997. Those changes were necessary because of the warnings in the early 1990s from the Chief Actuary of Canada that the sustainability of the Canada pension plan was at risk.
Governments heeded the warning and overhauled the system. Reforms included bringing forward scheduled increases in CPP contribution rates, building up a larger asset pool before baby boomers retire and investing it in the markets at arm's length from government for the best possible rates of return, and slowing the growing cost of benefits through administrative and expenditure measures.
By transferring all the CPP assets remaining with the federal government to the Canada Pension Plan Investment Board, Bill C-3 represents the final steps in CPP reform. Hon. members will recall that a key element of CPP reform was a new market investment policy for the plan, which the CPP Investment Board was established to implement. Clearly the need existed for this independent organization.
Prior to 1999 when the CPPIB began operation, the investment policy in place for the CPP required that funds not immediately needed to pay benefits be invested in provincial government bonds at the federal government's interest rate. That policy resulted in an undiversified portfolio of securities and an interest rate subsidy to the provinces.
As members know, the CPPIB is now responsible for the development of the CPP's market investment policy. Since 1999, funds not immediately required to pay benefits and expenses are transferred to the board and prudently invested in a diversified portfolio of market securities in the best interests of contributors and beneficiaries.
The CPPIB prudently manages billions of dollars of retirement funds belonging to Canadians to the highest professional standards and at arm's length from government, with highly qualified, professional managers making investment decisions. In addition, the board is fully accountable to CPP members and governments.
I also want to mention that the CPPIB functions under rules similar to those that govern other public sector pension plans in Canada. Its market investment policy is consistent with the investment policies of plans like the Ontario Teachers' Pension Plan and the Ontario Municipal Employees Retirement System, OMERS. The CPPIB is also subject to the foreign property rule.
Until now, not all CPP assets have been managed by the CPPIB. Certain assets have remained with the federal government. These assets include an operating reserve of about $6 billion and a large portfolio of mostly provincial government bonds valued at about $32 billion. Under Bill C-3 these remaining assets would be transferred to the CPPIB over a three year period.
This means that all CPP assets will be managed and invested in the market by one independent professional investment board, a move that essentially completes the process of reforming the CPP that was initiated in 1997 by the federal and provincial governments. Let me briefly review the benefits that will ensue with the passage of this legislation.
First, consolidating all assets under the management of one organization will allow the CPPIB to develop a more coherent investment policy for all CPP assets in order to enhance rates of return and better manage risks on the total portfolio, thereby helping to ensure the sustainability of the Canada pension plan. This will put the CPP on the same footing as other public sector pension plans, providing the CPPIB's investment managers with the flexibility to determine the best asset mix and investment strategies for the CPP.
Second, phasing in the transfer of the remaining assets over three years will help to ensure that the transfer is absorbed smoothly by capital markets, the CPPIB and provincial borrowing programs.
The CPPIB is responsible for establishing and fully disclosing its investment policies and for investing CPP assets while properly minimizing risk. With the transfer of the remaining assets to the CPPIB, Canadians can feel secure that prudent, sound investment diversification, as well as increased performance, will result for the entire CPP asset portfolio.
In considering this legislation, I encourage hon. members to keep in mind that the Chief Actuary of Canada has indicated that the CPP assets fully invested in the marketplace are expected to earn a greater return and thereby grow more rapidly. In his three actuarial reports since 1997, the Chief Actuary has confirmed the long term viability and financial sustainability of the CPP. According to the last actuarial report, investing the transferred CPP assets in the marketplace will produce a benefit of about $85 billion over the next 50 years for the Canada pension plan.
As I indicated earlier, it was the Chief Actuary who first brought to the government's attention in the early 1990s the fact that CPP assets, the equivalent of two years of benefits, would be depleted by 2015 and that the contribution rates would have to increase to more than 14% by 2030 if nothing was done. At that time the Canada pension plan had worked well for 30 years, but its sustainability was becoming a concern.
As a result, following coast to coast consultations with Canadians, the federal and provincial governments in 1997 adopted a balanced approach to CPP reform so that the plan could meet the demand of the coming years when the baby boomers would be retiring. As I mentioned, those reforms included an increase in CPP contribution rates, a buildup of a larger asset pool while baby boomers were still in the workplace, its investment in the markets at arm's length from government for the best possible rates of return, and administrative and expenditure measures to slow the growing costs of benefits.
All together, those measures ensured that a contribution rate of 9.9% could be expected to maintain the sustainability of the plan indefinitely, and now, through Bill C-3, with the transfer of the remaining assets to the independent professional CPP investment board, the 1997 reform of CPP investment policy will be completed.
I would like to remind the House that Canadians told their governments during the 1997 public consultations to fix the CPP and fix it right. Canadians also told their governments to preserve the CPP by strengthening the financing, improving the investment practices and moderating the growing costs of benefits. Governments met this challenge. Now, through the measures in Bill C-3, Canada's retirement income system will be even more secure for all Canadians.
Together with the 1997 CPP reforms, the measures in the bill will ensure that the Canada pension plan will remain on sound financial footing for generations to come. I urge all hon. members to give speedy passage to this legislation.
Mr. James Rajotte (Edmonton Southwest, Canadian Alliance): Mr. Speaker, I believe I have 40 minutes for my speech and I will not be splitting my time with anyone, so you will have the pleasure of listening to me for up to 40 minutes.
Later I will address some of the comments made by the parliamentary secretary, but first I want to detail what Bill C-3 is supposed to do. I want to talk about some of the history of the Canada pension plan just to give members some background and then I want to propose alternatives or state where the Canadian Alliance stands on the bill.
Bill C-3 is an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act. It will transfer the management of the cash operating balance and the bond portfolio, which is about $40 billion, to the CPP investment board. Specifically this will permit all amounts held to the credit of the Canada pension plan account to be transferred to the Canada Pension Plan Investment Board by repealing the requirement to maintain in the account a three month operating balance.
Second, it will establish a means by which the investment board may be required to transfer funds to the government to the credit of the Canada pension plan account so that the immediate obligations of the account can be met.
Third, it will transfer to the investment board over a three year period, 1/36 per month, the right, title or interest in each security held by the Minister of Finance and establish the conditions on which the securities may be redeemed or replaced.
Fourth, it will provide a 30% foreign property limit. The Income Tax Act applies to the investment board and its subsidiaries on a consolidated basis, to provide that the investment board will be considered to hold the property of its subsidiaries for the purpose of applying the foreign property limit. Of course at second reading our party proposed an amendment to expand this to allow at least a small way for Canadians to access capital markets to further increase their retirement savings. They themselves then would be more independent at a stage in life when they want to enjoy the full benefits of life rather than being dependent on government assistance.
Fifth, the bill will make housekeeping amendments to the investment board's reporting requirements.
I have some observations and a little history. The CPP investment board was incorporated by an act of Parliament in 1997. It was set up as an arm's length crown corporation and was charged with ensuring the soundness and sustainability of the nation's pension plan.
The assets were planned to be transferred over this three year period to ensure a smooth transition for capital markets, provincial borrowing programs and the CPP investment board itself.
By investing CPP cash not needed to pay current pensions, the board's aim is to enable higher returns in the stock and bond markets over the long term. The CPP investment board currently manages about $14 billion, mostly in equities, for the pension plan. The assets to be transferred include the CPP bond portfolio, made up mostly of provincial government bonds, and a three month cash operating balance. The Department of Finance is currently managing this money.
The CPP investment board made $360 million in fiscal year 2001-02 but lost $845 million in the previous year. About two-thirds of the board's money is invested in indexed stocks tied to the S&amp;P/TSX composite while some is allocated to U.S. and international stock indexes. Including returns from the CPP bond portion, the entire pension plan made $2.3 billion in fiscal year 2001-02.
The federal government's chief actuary estimated that the proposed changes would increase returns on CPP assets by about $75 billion over 50 years. Of course in that estimate we have to take into account the serious decline in the stock market over the last three years, which certainly affects the specific prediction that the chief actuary made.
At this point I want to basically give an overview of Bill C-3 and also speak about the Canadian Alliance position and what we in the official opposition would do if we were in government.
The main thrust of the bill is to transfer all the amounts held in the Department of Finance within the Canada pension plan account, including the bond portfolio which is worth about $40 billion to the CPP Investment Board over a three year period. It would establish a means for the transfer of assets between the Department of Finance and the CPP Investment Board so that immediate payout obligations of the plan could be met. The legislation also spells out how the provincial securities currently held on the account may be redeemed or replaced.
As I mentioned earlier, it applies the 30% foreign property limit. We were quite disappointed that the government did not consider increasing that limit so that it would allow Canadians to access more foreign content within the CPP investment as it should within RRSP accounts as well.
To give a brief history of the Canada pension plan, the government is representing this as a housekeeping bill, but it deals with one of the main pension programs which Canadians receive and it is incumbent upon us to give a history before we vote on this at third reading.
The Canada pension plan was devised over 36 years ago as a mandatory plan on a “pay-as-you-go” basis and would be transferred from generation to generation. There is no account in my name or someone else's name and it is not tied to a social insurance number that would then be invested as a nest egg for retirement. The people who are currently working are paying for those who have retired. When this was started, people who were retired at the time started receiving the benefits but they had not gone through the system in that way. That was one problem.
The actuary at the time advised the Liberal government that this would be problematic, particularly as a demographic shift would occur in which the population growth would not be as much as it was in the post-war period. The government was advised that it would encounter some real financial crunches. Unfortunately, the government at the time disregarded that advice. It shadowed the future in which later on the finance minister completely disregarded the advice of the chief actuary in the mid-1990s and fired the actuary when the person gave advice contrary to what the government wanted.
In 1966 Canadians were told that their payroll deductions required to fund the Canada pension plan would never go above 5.5%. This is important to note because the present government is guaranteeing it will not go above the 10% level. Obviously the 1966 guarantee was untrue. The actuary at the time warned that percentage would not be sustainable over the long term, particularly with the fact that the population was not growing at its previous level.
The government of the day has told Canadians that it will not increase it past a certain percentage, but how can Canadians be expected to believe the government will hold it at a certain percentage when it clearly has not done so in the past?
When it was designed by the government at the time, it was assumed that there would be six tax paying workers for every dependant retiree. That was true when it was set up, although even at the time the actuary pointed out that with the demographic shift this would not happen in perpetuity. The government unfortunately did not set up a system whereby it was invested in people's names in an account and set aside over a 20 or 30 year period so it would be there as a nest egg when they retired. Unfortunately it was a situation where the government counted on this in perpetuity growth in the population that would fund the Canada pension plan. This was unrealistic at the time and the government should have realized that.
By 1993 contributions and interest could not produce the revenue required to cover the benefits paid out. The crunch started by the early 1990s. In 1996 the Canada pension plan was in a great deal of trouble. Over 10 million Canadians were paying $11 billion into the plan but three million people were being paid about $17 billion in benefits. Even though we had a ratio where 10 million Canadians were working and paying into the plan and only 3 million were receiving benefits, we still had a fiscal situation where the amount being paid out in benefits was above the amount being paid in. As we go into the future imagine the stress and the pressures that will be put on the Canada pension plan when the population does not grow at the expected level and when more people retire, particularly the baby boomers.
At that time, the $6 billion difference had to be made up out of general tax revenue so clearly it was not sustainable. The Canada pension plan's chief actuary warned that without changes the plan would be in very deep trouble, particularly when the baby boomer generation began to reach the age of 65, about the year 2012 which is not that far off.
By 1977 the Canada pension plan's assets had fallen to $35.5 billion. During the fall of that year, the Liberal government introduced Bill C-2, which was designed to save the Canada pension plan by the only way it knew how. It increased the cost to taxpayers and took more money from Canadian taxpayers rather than introduce some real fundamental reform to change the system.
Starting in 1998, Canadians saw their take home pay shrink as contribution rates for both employees and employers were jacked up in a series of increases to Canada pension plan premiums. CPP premiums went from 5.6% of the average industrial wage to 9.9% in five years. This is a staggering 73% increase and the biggest tax grab in Canadian history.
The government and the Minister of Finance love standing and saying that they have introduced a $100 billion tax cut, which is completely untrue because they neglect to mention the Canada pension plan tax increase. They also neglect to mention the EI surplus which they have been hiding and using for general revenues. The fact that they stand and talk about this $100 billion tax decrease is just simply untrue.
In 1995 the chief actuary of Canada noted that contribution rates would have to nearly triple, from 5.6% to 14.2%, over the next 30 years simply to ensure benefits could be paid for the indefinite future.
This is an important point because the contribution rate is now up around 10%. The government says, as it said before with the 5.6% level, that it will never go above that. This is not what the chief actuary said in 1995. This person stated that it would need to go to 14.2% over the next 30 years to deal with the retirement of the baby boom generation. The result is that employers and the self-employed are feeling the brunt of this Liberal tax cut.
The Canadian Federation of Independent Business has been conducting letter writing campaigns, both on this and on the employment insurance account. What it is notes is that while employers have received a 7¢ reduction in their employment insurance premiums, the Canada pension plan premiums have gone up by 40¢, and they are said to increase another 25¢ in 2003.
That may not sound like a lot but for small businesses with very small margins, increases like this for each worker are very substantial and certainly cause a lot of businesses to really look for ways to cuts costs. The most obvious way they can cut costs, unfortunately, is through labour. If the costs of labour for small businesses, a coffee shop or whatever, increases, the only way they can really deal with that in the immediate term is to cut labour, which means laying people off. The CPP premium increase is not only a tax grab, it is a job killer as well. Everything the employers have gained back in their small employment increases has been eaten up and more by the Canada pension plan increases.
The worst injustice of the Canada pension plan in general, is the intergenerational unfairness. This is a point I want to return to a number of times in my speech.
Every Canadian worker born after 1980 will see their Canada pension plan investment offer them a 2% return on investment for their retirement. This is unbelievable and unacceptable. However for those who retired in 1995, a different generation, they will receive a 9% return on their investment which is a greater return. However, if one looks at the long term investments over a 20 or 30 year period, this is obviously unacceptable as well.
Economist David Foot has suggested that the federal government should raise the retirement age by two or three years so that boomers can contribute to the CPP longer, thereby creating a bigger pool to invest and from which to draw. It would not have to raise premiums or cut benefits. It is something the government obviously has considered but not acted upon.
Another consideration is that the government could bring in more flexible workplace policies to address some of the problems which I talked about earlier, where employers faced with increased CPP premiums unfortunately have to lay off workers.
A lot of Canadians who are approaching retirement or who have retired have said that if we bring in more flexible workplace policies, older workers nearing retirement could work part time and still make full pension contributions to maintain revenues in the pension fund while creating employment for younger workers. This would also mean that they would still contribute and would draw upon that for a longer period because it would be more sustainable.
Economist David Foot, in describing the 1997 reforms, said, “They do not recognize the profound demographic changes that have taken place since the program was launched”. That is indisputable. The fact is the government has not recognized this pay as we go plan setup where we had a huge population explosion after the second world war with a relative decline after that. It has not recognize that a demographic shift would cause some serious constraints on the Canada pension plan.
The Canada pension plan will take just under 10% of income to receive 25% after age 65. The average annual payout is $5,500 a year. That figure is something we should all consider, because the government loves to say that it is providing for Canadians in their retirement. The average annual payout is $5,500 a year. Obviously a Canadian cannot live on that so for the government to say that it is providing for Canadians in their retirement through this plan is simply farcical.
Another figure we should keep in mind is the number of seniors in Canada will double to 22% of the population by the year 2031. This will place a heavy burden on workers who have to support these pension and health programs. It is important to note that the demographic shift causes a lot of other pressures as well, particularly in health care. As we age we require more and more of the health care. That is just simply logical. Canadians are rightly concerned about where the tax revenues will come from to pay for our social services. Instead of dealing with these problems, unfortunately the government has pushed these off by introducing marginal changes, as it has done with this bill.
Members of the Canadian Alliance do not believe that our future security lies in the wages of a shrinking workforce. It lies in the vast productivity and production capacity of a full economy. We value retirement security as a vital element of independence. The government's goal should be to ensure that as many Canadians as possible are independent in their retirement years, that they can afford to have a good standard of living, that they can afford to take a relative amount of trips when they need to and that they have the quality of life they deserve.
Our policy platform states that we will honour obligations to retired Canadians and those close to retirement under the current state run programs. We will also maintain support for low income seniors.
We believe that future retirees deserve a greater choice. People in my generation who are extremely frustrated with the Canada pension plan deserve a greater choice and a greater opportunity to increase their retirement savings. We should have a choice between a government managed pension plan and a mandatory personal plan. Giving Canadians greater control of their own affairs and retirement plans would eliminate the foreign investment restriction for retirement investments, thereby allowing access to greater capital and investment opportunities. We would devise options allowing individuals greater opportunities to save for themselves as the current system failed its original objective from 1966.
This is an important point because friends my age in their early thirties see the RRSP contribution limit each year. A lot of people in the 55 to 65 age group do not have a lot of money put away. Let me use for an example dentists who own their own dentistry business. They have taken quite a while to pay off debts they incurred when they started out after graduating from dental school. By the time they reach 55 they do not have a lot of money put away because they spent the first 15 or 20 years in their business paying off their debts. At the age where they are making profits or their earlier investments have paid off, they would like the opportunity to put some money into their RRSP. With the present contribution limit it is simply impossible for them to put enough away so that they are fiscally secure when they retire in 5, 10 or 15 years. I hope the Minister of Finance will look at raising the contribution limit for RRSPs in the next budget.
I was talking to a friend recently who said the forms the government sends out indicating the amount an individual can put into an RRSP is a joke. She indicated that the government takes so much from her in taxes that she does not have anything left at the end of the year to invest in an RRSP. The contribution limit is a slap in the face because the government takes so much in taxes. Canadians are taxed at the highest marginal rate of $60,000 per year, and that is an absolute joke.
Canadians who get out of university usually have a high debt load. If they are lucky they may get a job making $30,000 or $35,000 a year. They have to pay down their loans and pay taxes while trying to establish themselves at the same time. Paying high taxes simply creates a crunch on them that is unfair. The government should create opportunities so that these people can pay down their student loans and pay less tax so they can start establishing themselves. For those individuals who are far-sighted they could then start putting away even at that age for their retirement.
Bill C-3 is a step in the government's planned development of the public pension plan in this country. It is managed at arm's-length by a crown corporation. As the Canadian Alliance noted at second reading, the bill is more than a housekeeping bill. The government says it has only presented some minor changes, but we regard them as much more.
We are opposed to the solution proposed by the government. Canadian workers and employers would be bilked out of billions of dollars to pay for a plan that is unquestionably unfair to Canadians of all generations, but particularly to the younger generations in our society.
The Canada pension plan began floundering in the 1990s. In 1996, 30 years after its inception, the plan was going bust. It was fulfilling the prediction of the original actuary who said that this pay as we go plan was unsustainable in the long term. This created a situation where the benefits exceeded the amount going in by about $6 billion. This had to be made up out of general tax revenues.
The Liberal solution was to take more money from the Canadian public. It was similar to health care. Instead of addressing some overall issues and proposing fundamental reforms, it resorted to taking money from the Canadian taxpayer. This is something the government is doing now with the new elections bill. Instead of addressing genuine concerns about the ties between businesses, unions and government, what does the government do? It asks the taxpayer to pay for everything. It wants taxpayers to pay for everything in the elections bill, despite the fact that they may or may not support a particular party. Taxpayers now would have to support every political party that attained a certain number of seats in the last election.
I will go back to the CPP premiums. Beginning in 1998 the CPP premiums were jacked up from 5.6% of the average industrial wage to 9.9%. As I mentioned earlier, the government promised it would never go past this 5%. The government said this promise could be carved in stone. It is now up to 9.9%. The chief actuary at the time said it would have to go to 14.2% over the next 30 years.
Now the promise was that the premiums would never go above 10%, yet the chief actuary said they would go over 14%. Unfortunately we do not receive his advice any more because he was summarily dismissed once the finance minister realized that he did not like his advice. This is a tradition that we see all too often with this Parliament.
It is interesting that people such as the Auditor General who have independence and are able to observe the government and how Parliament operates, are the ones who are bringing to light, as is the case with the firearms registry, the actual substance the opposition has been stating for years. We need objective and independent analysts such as the chief actuary to help us.
When the finance minister fired this person simply for giving advice that the finance minister did not want I think that was a serious breach of independence that Parliament should have addressed. Unfortunately, the government simply let it happen and did nothing.
The worst injustice by the government and its Canada pension plan hike of 73% is the intergenerational unfairness. The government simply has not addressed this and it does not want to address this. In the last election campaign the Liberals simply engaged in scare tactics about this, rather than address the actual problems with the Canada pension plan.
What is meant by intergenerational unfairness? Every Canadian worker born after 1980 would see his or her Canada pension plan investment offer a 2% return on investment for the retirement years. That amount might as well be stuck in a mattress. It is pathetic that we would allow younger Canadians, such as the pages here before me, to receive 2%. Imagine that over a 30 year period there would be a 2% return on the investment. That is completely unfair and it should be changed.
[Intervention]
An hon. member: It does not even cover the rate of inflation.
James Rajotte: It does not even cover the rate of inflation as my colleague has just said.
However, a different generation that retired in 1995 would receive a 9% return on their investment.
We are not saying one generation should receive less. What we are saying is to have some intergenerational fairness by proposing some genuine reforms to the system.
Despite the painful and expensive Liberal solution, the Canada pension plan's unfunded liability is hovering around a half a trillion dollars and is continuing to grow at 6% a year. Since the CPP investment board first invested funds in 1999 the board has delivered roughly 2.6% annualized performance, which is slightly better than the TSE over the same period. It is not enough to make up for the ever growing unfunded liability.
I am always perplexed as to why the government feels that the government and the wise men that it sets up in this board can investment the money in private markets, and yet Canadians such as ourselves do not have the wisdom to act in our own best interest to invest the money in a mandatory personal retirement account.
This could be a retirement account where the government could say to Canadians that they have to set aside a certain percentage of their income in a pension plan to ensure that they have something as a nest egg, as is done in the system in Australia.
In Australia there is one system where Australians have three options. Australians can choose to take the fully government directed plan where it is safe, secure and conservative because it is invested in government bonds. They get a minimal rate of return over a 20 year or 30 year period. They know that there is something there at the end, but then a second group can say it wants to invest a little more in equities or private markets. They have more of a mixed portfolio. In the third group, even though they still have to invest a certain amount in government bonds, there is more risk and they know that their rate of return will vary. Over time it will generally be much better, but it is not as conservative.
This gives the options to Australians that says they have to put aside a certain amount each year to invest in a nest egg. Instead of it being a pay as we go system, it is a system where it is actually invested in a person's name as a nest egg, but it is actually in one of three accounts.
In Canada we say to Canadians that they do not have the wisdom to invest themselves, that they are not concerned about retirement so the government has to take on the role for them. It is simply a patronizing attitude that many Canadians find offensive because they themselves take much more concern over their own retirement and the future of their children than the government does. It is just simply obvious.
Getting back to the ever growing unfunded liability in the Canada pension plan, this explains why in 1995 the Chief Actuary of Canada stated that contribution rates would have to nearly triple, from 5.6% to 14.2% over the next 30 years, simply to ensure the benefits could be paid for the immediate and indefinite future. Of course, we know what happened to him. He was simply fired. The messenger was fired because someone did not like the message.
By 2021 it is expected that the Canada pension plan payouts would exceed contributions again. After that, investment income would be needed to pay for benefits. At that time we can expect the percentage that Canadians would be asked to put into the Canada pension plan, I should not say asked because it would be demanded, would be increased again.
I now want to turn to some specific clauses within Bill C-3 and offer our critique of the clauses. Clause 15 applies to foreign property limits in the Income Tax Act to the CPP Investment Board.
During clause by clause consideration of the legislation, the director of finance, markets division, of the finance department's financial sector policy branch, Bill Mitchell, admitted to members of the finance committee that no particular study was done by the department to determine what the negative impact of this restriction would be on the long term performance of the CPP investment fund.
It is known to be a bad thing for private companies to invest the assets of their pension plans in their own securities and it can be argued that it is the same thing for governments. CPP Investment Board President John MacNaughton has said that all large investors face the challenge of having to manage within the capacity of the Canadian market. The Canadian market is small relative to the amount of capital in the country and it is small relative to world markets. Canada only represents 2.2% of global capital markets yet on the investment side we are much bigger than that.
As the CPP holdings get larger with regard to the opportunities available to invest in Canada, the limit is going to matter for other reasons as well. Baby boomers will begin retiring in 2012. By that time the CPP fund would have an excess of $140 billion. That would make it the largest investor in Canada, and among the largest in the world.
The CPP currently accounts for only 1% of the Toronto Stock Exchange's market capitalization. It could be as high as 10% by 2012 which is a dangerously high number for a single investor in a single market. There are concerns that public money would be competing with private money for the best investments. As time goes on the problem is only going to get worse. Every year the CPP will be piling in $16 billion to $18 billion in new money. It will own the market and this is a concern.
At the time that Bill C-3 was introduced I recall Andrew Coyne raising concerns about the undue influence that the CPP Investment Board, because of its size, would have within the private market.
This is something we should look at seriously. We in the Canadian Alliance feel that the bill is not a simple housekeeping bill. It is a bill that we should actually use to address some of these concerns. The concern obviously is that the government could then move money and unduly influence where the market goes in Canada. That simply is something we should not want and should seek to prevent.
The fact is that bigger is not always better. As an illiquid large investor, the CPP Investment Board will be unable to trade freely and smaller funds will delight in playing off the Canada Pension Plan Investment Board positions, which will only serve to the detriment of Canadians.
Ironically, the rise of the CPP Investment Board may entrench that 30% foreign property rule because when it is raised, Canadian markets could stumble badly if the Canada Pension Plan Investment Board tried to sell even a percentage of its immense holdings. The longer the government waits, the larger and more significant the fund will be to the Canadian investment climate.
I want to return to the issue of younger Canadians and the notion of intergenerational fairness. We in the Canadian Alliance feel that the Canada pension plan, as it is, is not fair to younger Canadians. We have a serious problem with the Liberal approach and its solution to the Canada pension plan and to its unfunded liability.
The chief actuary says that for every Canadian worker born after 1980 their CPP investment will offer them this 2% real return that I have been talking about. We have a situation where those Canadians born after 1980, and even before that, will be receiving a pathetic return on their investment. Even when they retire their maximum benefits are only $9,000. By the time Canadians who were born in 1980 reach retirement age, to be receiving $9,000, or even at that stage $12,000, is simply pathetic and will not enable them to secure a safe retirement.
According to the Canadian Taxpayers Federation, if young adults entering the workforce today invested their CPP contributions in a mandatory plan, they would have, at the very least, a $1 million nest egg by 2036. Does it not sound better to have a $1 million nest egg instead of the $9,000 or $12,000, whatever it will be, each year? The present value of the benefit package for the CPP will be worth about $570,000. Clearly there is a better solution available to younger people if we had a mandatory pension plan which was not a pay as you go plan.
The CPP basically is a transfer of resources from younger to older generations. As the population ages, the transfer will have to increase because there will be more older people in relation to younger working people. The problem is compounded because people are living longer. Today pension eligibility is age 65 and life expectancy is age 79, so the average Canadian can expect to collect CPP for 14 years. Life expectancy is likely to continue to rise due to medical advances, which is a good thing.
Many younger Canadians feel that they are paying into a system of pensions, health care and massive public debt, and they are not sure that they will get many benefits back. There is a possibility of a real ugly generational war within the next couple of decades. As Thomas Courchene at Queen's University has said, “We older Canadians, many of us tenured, are revealing ourselves to be a very selfish lot by turning the tables on generation X , a cohort with nowhere near the employment or income prospects that we enjoyed when we were young”.
However, Canadians are not doing this. Older Canadians themselves are extremely concerned about the futures of their children and grandchildren. It is the government that has done this. It is the government that has created a schism between generations.
Another issue with which the Canadian Alliance takes issue is the CPP Investment Board's vulnerability to political pressure and interference. It already has been suggested that CPP investments should be required to adhere to so-called Liberal societal values. There are calls that CPP should only be allowed to invest in certain companies that increase employment, that are environmentally friendly, that comply to employment equity and bilingual federal regulations, et cetera, the priorities determined of course by the board and by the government.
If the purpose of the board is to provide the best pensions we can manage for the price we are paying, these kinds of demands for social strings to be attached must be rejected outright.
It is not sensible to take a fund like the CPP and use it for industrial or social policies. That is because once the principle that other criteria will come into play has been established there is no obvious place to stop. The overall record of these types of public funds around the world is terrible.
The Canadian Alliance also takes issue at how individuals are appointed to the CPP Investment Board. I would like to stress of course that the people who are currently on the board seem quite up to the job in our perspective and we certainly have a high regard for them in a personal way.
Nevertheless, they are and will be in the future, and we always have to imagine what will happen in the future, appointed by governor in council on the recommendation of the Minister of Finance. The minister appoints them after receiving advice from provincial committees but he is under no obligation to follow this advice.
What protection does Bill C-3 offer members of the CPP to ensure that it does not go down the similar path of moving away from professional investors to those who are professional bureaucrats with a primary political focus? There is none.
In conclusion, we in the Canadian Alliance hope the government will come to its senses on this bill. We hope Parliament will reject the bill and send it back for much needed amendment and will look at some serious reform of the Canada pension plan so that younger Canadians will have a genuine opportunity to have their retirement secure and to have the good life that all Canadians enjoy.
I would like to propose an amendment, seconded by the member for Athabasca. I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following therefor:
Bill C-3, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act, be not now read a third time but be referred back to the Standing Committee on Finance for the purpose of reconsidering Clause 15 with the view to change section 15 of the act to remove the cap on the percentage of Canada pension plan money that might be invested outside of Canada.

The Deputy Speaker: I will deal with that matter immediately following question period. In the meantime, I wish to proceed to statements by members.

Statements by Members
LiteracyMr. John Maloney (Erie—Lincoln, Lib.): Mr. Speaker, Canada has a serious literacy problem: 22% of Canadian adults do not read well and another 26% do not have the literacy skills necessary to contribute to the economic and social development of their communities. Less than 10% of all Canadians who could benefit from literacy programs are being helped.
Addressing literacy barriers is key to dealing with the most pressing issues of our time. Jobs in the economy, innovation, child poverty, health, crime prevention, immigration settlement, community development, social cohesion and inclusion; literacy has implications for all of these.
The development of a larger and more skilled workforce is crucial to Canada's future economic success, a success that can only be met through education and training.
Canada is one of the only industrialized countries without a national strategy for adult literacy. A national literacy strategy can only be created if all levels of government and the private sector co-operate for this common goal.
Literacy investments are crucial in creating a culture that values lifelong learning. Let us all work together to promote literacy and the continuing education of all Canadians.
HealthMr. Rob Merrifield (Yellowhead, Canadian Alliance): Mr. Speaker, next week the premiers and the Prime Minister will sit down to hammer out an accord on health care. This meeting will be critical to the future of Canadians' most cherished social program.
One would expect that Ottawa would be waiting to hear from the provinces, which actually run the health care system, before it deals with the provinces' top priorities. However, that is not the case.
Instead, the Prime Minister has leaked his own draft accord, trying to call the shots with a fraction of the money. Canada needs improved outcomes for its health care system, not sleight of hand.
Since the former finance minister cut billions of dollars out of health care, provinces have been reinvesting and reinvigorating our health care system while Ottawa's contribution has only continued to diminish. Now that Ottawa is ready to inject additional dollars, it should be working with and not dictating to the provinces. Unfortunately, the federal government seems unwilling--
The Deputy Speaker: The hon. member for Oak Ridges.
Louis St. LaurentBryon Wilfert: Mr. Speaker, February 1 marks the 119th birthday of Louis St. Laurent, a prime minister who presided over both a significant economic expansion of Canada, but also one of the most important legislative periods in our history.
Nicknamed Uncle Louis, his government record caused the Liberals to be re-elected in 1949 and 1953 with overwhelming majorities. When Prime Minister Mackenzie King approached him in 1941 to become minister of justice, he had no political experience but responded out of a sense of duty.
Canadians can reflect on his period in office as being productive and significant for Canada on the international stage.
At home he presided over the enactment of hospital insurance, the entrance of Newfoundland into Confederation, the Massey Commission on the Arts, the establishment of the National Library and the construction of the St. Lawrence Seaway, to name a few.
Internationally, Canada sent troops to fight for the United Nations in Korea and garrison troops in Europe. He was a strong advocate of the UN. He left a legacy of building a strong Canada both at home and abroad, lessons we can benefit from today.
Canadians need to become more cognizant of their history and to celebrate the achievements of individuals who made a difference--
The Deputy Speaker: The hon. member for Abitibi—Baie-James—Nunavik.
Centre hospitalier des Vallées de l'Outaouais--Hôpital de HullMr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.): Mr. Speaker, even supposing an optimistic scenario in which Ottawa does provide additional funding, it would still hardly be possible to reduce the waiting lists and overcome the staffing and equipment shortages at the Centre hospitalier des Vallées de l'Outaouais--Hôpital de Hull unless the Government of Quebec also makes a firm commitment to invest.
The Government of Quebec promised to solve the pay equity issue involving nursing and all professional staff before December 31, 2002 at the Centre hospitalier des Vallées de l'Outaouais--Hôpital de Hull. However, to this day nothing has yet been resolved.
One only has to spend time at this hospital to see that it is lacking in nurses, attendants, the latest technology and emergency room space.
Despite all of these problems, doctors, nurses and hospital staff work relentlessly to provide patients with the best quality care.
Bill McNeilMr. Mac Harb (Ottawa Centre, Lib.): Mr. Speaker, I would like to pay a special tribute to former CBC Radio broadcaster Bill McNeil, who died Wednesday, January 29, at the age of 78.
Mr. McNeil spent 42 years at CBC before retiring in 1995. He was best known for hosting the shows Fresh Air and Voice of the Pioneer . He also authored six books, including Signing On: The Birth of Radio and Mr. Canada: John Fisher . Fresh Air drew up to a million listeners each Saturday and Sunday morning.
Mr. McNeil's show became a success because it stirred the memory pot. People had a chance to talk about their youth, the depression years and homesteading in the west. It reflected a generation that experienced great changes, from the horse and buggy to the rocketship and man walking on the moon.
Undoubtedly, McNeil's gentle, resonant voice and quiet manner put both the subject and the listener at ease and succeeded in making Fresh Air “an oasis in a mad world”. He hosted his final Fresh Air broadcast after 24 years in May 1992.
On behalf of all citizens and my colleagues in the House, I would like to express my sincere condolences to the family and friends of Mr. McNeil.
Richard HealyMr. Peter Goldring (Edmonton Centre-East, Canadian Alliance): Mr. Speaker, Richard Healy, a former member of Canada's armed forces, passed away this week at the age of 62.
Richard volunteered in my office to help raise funds for Canadian World War II veterans of the Battle of Ortona. These veterans wished to hold a Christmas memorial dinner with German war veterans 55 years after the battle known as the “Stalingrad of Italy”. Veterans Affairs refused to support this event.
With Richard's assistance and the many others who helped, over $200,000 was raised. The Christmas dinner was held in 1998 and a life-size bronze monument to the battle, called the Price of Peace, stands in Ortona, Italy, all paid for by individual citizen donors.
Richard Healy was a quiet and kind person with a commitment to justice for our veterans. A life is ultimately measured and valued by its good deeds. In that respect, Richard Healy's life was very rich. He will be missed by many here on Parliament Hill.
World Junior Hockey ChampionshipsMs. Nancy Karetak-Lindell (Nunavut, Lib.): Mr. Speaker, over the Christmas holidays the majority of Canadians were riveted to their TV sets as our junior men's hockey team dominated the round robin series and advanced to the final game versus the Russian federation.
Throughout the tournament these young men played with passion, dignity and pride while representing their country.
I am very proud Nunavut was represented on Team Canada by our own young star, Jordin Tootoo. Everyone in Nunavut was honoured by his contribution to the national team and for bringing international attention to our new territory. We especially liked all the posters written for him.
I thank all the great fans and sponsors who gave their support to the Canadian junior men's hockey team. Congratulations.
Member for LaSalle—ÉmardMr. Odina Desrochers (Lotbinière—L'Érable, BQ): Mr. Speaker, the member for LaSalle—Émard's statement that Canadians would not support funding the Bloc Quebecois really conceals his concern about funding for federal political parties drying up.
As Minister of Finance, he was quick to make cuts to the EI program and health and education transfers in order to focus on paying down the debt and easing taxes for the rich. As well, during his tenure, the use of tax havens by Canadians grew fivefold.
In six months of campaigning for the leadership of the Liberal Party of Canada, the member for LaSalle—Émard has already raised more than $2 million. Quebeckers and Canadians are justified in wondering if the member for LaSalle—Émard has not left himself open to influence.
The only way to dispel this situation is to pass legislation providing for public financing of political parties, as was done in Quebec. In 1994, my colleague from Bas-Richelieu—Nicolet—Bécancour moved a motion to that effect in the House of Commons. The member for LaSalle—Émard voted against it.
Citizens' Advisory CommitteesMrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Mr. Speaker, last week Correctional Service Canada was pleased to join with communities across the country to celebrate Citizens' Advisory Committees Awareness Week.
Across Canada more than 80 citizens' advisory committees comprised of over 500 individuals showed fellow Canadians what they do to contribute to the safety of our communities. Canadians attended open houses, visited information displays and participated in discussions about the corrections process.
We would like to thank the Canadians who took the time last week to learn more about our corrections system and the Canadians who work throughout the year as members of citizens' advisory committees.
I congratulate the Solicitor General for his support of Citizens' Advisory Committees Awareness Week. I encourage all MPs to join me in recognizing and congratulating the Canadians who make them work.
JusticeMr. Gurmant Grewal (Surrey Central, Canadian Alliance): Mr. Speaker, Mrs. Bhullar, a constituent of Surrey Central and a Canadian citizen, is pleading for justice for her husband.
Proud of our Canadian values, when we travel abroad we promote respect for human rights and justice.
However, injustice can happen anywhere. People have been wrongfully convicted and executed in the U.S. In Canada, Mr. David Milgaard was wrongly convicted and sentenced but later was proven innocent after spending many years in jail.
Professor Davinderpal Singh Bhullar has been sentenced to death in a controversial trial based on a confession extracted under duress and a death threat.
Even the presiding and dissenting judge has stated that Mr. Bhullar could not conspire to murder someone since no one else is charged in this case. No one can conspire with oneself. None of the 133 witnesses identified Mr. Bhullar as a culprit. Even the German government has revised its decision and accepted him as a political refugee.
I call on the Canadian government to use its diplomatic means to urge Indian authorities for amnesty or for a fair retrial.
Valentines for VeteransMr. Ivan Grose (Oshawa, Lib.): Mr. Speaker, seven years ago newspaper columnist Ann Landers initiated a program called Valentines for Vets, encouraging her readers to send a message of gratitude to veterans. Sadly, Ms. Landers has passed away but Veterans Affairs Canada is continuing to invite Canadians to create special valentines for our Canadian veterans.
Valentines can be sent to the department's head office in Charlottetown where they will be sorted and mailed to veterans in health care facilities across the country in time for Valentine's Day. Last year more than 2,000 valentines were distributed.
We know that these special greetings are warmly received by our veterans. As our veterans are aging, let us this year make an extra effort to send our heartfelt thanks to those who put their dreams on hold to defend our values and way of life.
I encourage all Canadians to refer to the Veterans Affairs Canada website for more information on this wonderful campaign. The address is vac-acc.gc.ca.
FisheriesMr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern Shore, NDP): Mr. Speaker, before I give my statement, I would like to welcome to Ottawa the great students and chaperones from Upper Musquodoboit, Nova Scotia who are here on a fact-finding mission. We congratulate them.
I would like to draw to the attention of the House and the Minister of Fisheries and Oceans the tragic decision he has made in terms of allowing draggers into a very sensitive fishing area off what is called the Cape Breton or Sydney bight near the gulf in Nova Scotia. To lift the moratorium and to allow draggers in that sensitive fishing area is an unmitigated disaster with unconscionable results.
Also, come April 1, the minister will have to make a decision about the hook and line fishery off 3Ps. Officials say we do not have the scientific evidence that these stocks are one and the same but by cutting the science budget so much, they do not have the evidence or they have to operate on a precautionary principle.
I advise the minister to stop that terrible way of fishing off the Sydney bight, as we speak, and allow the hook and line fishery to continue on in the spring season.
Child PornographyMr. Ken Epp (Elk Island, Canadian Alliance): Mr. Speaker, it is unbelievable that the government cannot find some way to protect our children from sexual predators. Instead of changing the law, the Liberal government is content to just make excuses.
Why can the Liberals not understand that as long as the age of consent is down at 14 years, there will be ongoing abuse of our children? Why can they not understand that it must be the older person who must be held accountable? Why can they not understand that the purpose of the law must be to protect our children and to restrain those who would exploit these youngsters for their own perverted pleasure or for money? Why can they not understand that adult abuse of children happens because they are allowing it?
It just does not make sense. Our children are precious and must be protected.
If the Liberals will not protect them, it is time Canadians turfed the Liberals and put in a party that puts children's protection ahead of the presumed rights of perverts. It is time to change--
The Deputy Speaker: The hon. member for Laurentides.
Winter FestivalsMs. Monique Guay (Laurentides, BQ): Mr. Speaker, winter does not just bring cold weather, it brings a flurry of activities all in white.
Festivals, winterludes and ice carnivals are being held in cities and towns throughout Quebec.
One of the best known internationally is, without a doubt, Quebec's Winter Carnival, the 49th edition of which opens tonight.
In the riding of Laurentides, people will also pay tribute to Quebec's winter traditions by presenting various wonderful carnival activities aimed at pleasing both young and old.
Let us take the time to admire our talented sculptors and encourage our athletes whose performances will take our breath away. Let us also take this opportunity to have fun outdoors with family and friends.
Bravo to the thousands of volunteers throughout Quebec whose extraordinary creativity and daring will wow visitors.
I invite you all to come and participate in the winter festivals in the beautiful riding of Laurentides, which I represent.
Chinese New YearMs. Carole-Marie Allard (Laval East, Lib.): Mr. Speaker, tomorrow, February 1, is Chinese New Year.
In Chinese society, legends and stories revolve around 12 animals. Today, some people put stock in the virtues attributed to these animals.
2003 is the Year of the Goat. According to the Chinese zodiac, the year of the goat will bring harmony and humanity throughout the world. Honesty and compassion will make a strong comeback.
Chinese New Year is an invitation to celebrate. I would like to take this opportunity today to wish a wonderful year and joyous celebrations to the Chinese community.
Firearms RegistryMr. Norman Doyle (St. John's East, PC): Mr. Speaker, the federal government's gun registry has cost more than $1 billion so far. Many Canadians feel this money has been simply wasted. As $1 billion is a lot of money, let us look at it in context.
In Newfoundland and Labrador approximately 190,000 households pay an average of $8,400 a year in income tax. That means that the $1 billion wasted so far on the gun registry is enough to completely eliminate the yearly income tax burden from 125,000 average households. Put another way, the government has taken the yearly income tax payments from 125,000 families and completely wasted the money.
Given the choice of a gun registry or 125,000 tax-free families, I have no doubt what my constituents would choose.
Canada Day Poster ContestMr. Geoff Regan (Halifax West, Lib.): Mr. Speaker, every year the Government of Canada asks young Canadians from coast to coast to design a poster celebrating their country. Unveiled at the Canada Day celebrations on Parliament Hill, the poster is a symbol of how young Canadians see their country. It is an excellent way to promote young people's understanding of what it means to be a Canadian.
This year's theme is one of particular interest to me: Celebrating Canada's Natural Beauty. As someone from the most beautiful province in the country, I clearly and completely support this topic.
In short, I encourage all members to take this contest back to their constituents so that young Canadians can develop a deeper appreciation for Canada.

Oral Question Period
Political Party FinancingMr. Grant Hill (Macleod, Canadian Alliance): Mr. Speaker, the Prime Minister is not serious in the least about reforming political party financing. He just wants the taxpayers to pay his party's debts, because the Liberals are too busy collecting funds for leadership campaigns to pay off their debts.
Is the Prime Minister introducing this bill in order to get his party's debts paid?
Don Boudria: Mr. Speaker, I would strongly advise the hon. member to read the bill. First, had he done so, he would have realized there is no retroactivity, no contribution for existing debts, nothing of the sort. These are quite simply unsubstantiated statements. Second, the bill will come into effect in about a year. Lastly, the member has no need to worry about my party; it is in very fine shape.
Grant Hill: Mr. Speaker, maybe the minister would like to explain to the House and to Canadians why the senior adviser to the Prime Minister the day before yesterday said to the Liberal caucus that it was one of the reasons the bill should be passed: to help pay down the $4 million debt of the Liberal Party of Canada.
Why should all taxpayers be forced to pay the debt of that party even if they do not support the Liberal Party?
Don Boudria: Mr. Speaker, I think I read the same article as the hon. member. Maybe I had the sheet of paper right side up instead of like he had it, upside down.
I came to the conclusion when I read it that it had been said that the debts would be paid probably around the same time that the bill came into effect, so it had no effect at all on that.
Grant Hill: Mr. Speaker, the problem with the bill is that the Liberals want to replace voluntary contributions by taxpayers to parties that people support with contributions that are absolutely involuntary.
I ask the question again. Why should Canadian taxpayers who do not support the Liberals have to pay for their activities? Why?
Don Boudria: Mr. Speaker, this is nonsense. Canadians would be able to contribute up to $10,000 to any party, or candidates or associations that they like, the aggregate thereof, for one party.
Second, the hon. member is pretending that Canadians do not subsidize political parties and the process now. I would like to know, did his party give back the money that it got in the last election? I would guess that it did not. It kept the money.
IraqMr. Leon Benoit (Lakeland, Canadian Alliance): Mr. Speaker, providing a deterrent, a strong coalition show of force, is the best chance we have of avoiding war in Iraq.
The Canadian Alliance has been calling for months for the government to contribute troops to the international show of force aimed at encouraging Saddam Hussein to turn over his weapons of terror.
Why will the government not stand with its allies, Britain, Australia, the United States and others, to provide this deterrent to Saddam Hussein so that he will destroy his weapons of mass destruction, to provide that message in the only language he understands?
Hon. Bill Graham (Minister of Foreign Affairs, Lib.): Mr. Speaker, I had the opportunity yesterday in Washington of standing by our ally, the United States of America, and I was very proud. Secretary Powell said to me that he appreciated the position of Canada in supporting the United Nations and supporting the U.S. in its determination to work through the United Nations process as the best guarantee of security for the world, the security of the United States and of all nations in the world.
Leon Benoit: Mr. Speaker, in fact, a show of force by amassing troops near the Iraqi border has worked before. In 1995 it forced Saddam to back away from invading Kuwait for a second time. Last year it forced Saddam Hussein to allow weapons inspectors into Iraq so they could do their work.
Now it is the best chance to force Saddam Hussein to actually back down and disarm without going to war. Why will the government not take action to prevent war in Iraq?
Bill Graham: In practice, Mr. Speaker, the actions of the government have been entirely consistent with the determination to do two things: disarm Saddam Hussein on the one hand and prevent war on the other.
We will consistently pursue that course of action with our allies, our European allies, the United States of America and other countries, as we go down a very difficult road at this time and ensure that we still have an opportunity to come out of this without a conflict in that very volatile region of the Middle East.
HealthMs. Caroline St-Hilaire (Longueuil, BQ): Mr. Speaker, the Prime Minister, who just last week said he wanted to reach an agreement on health, is now threatening Quebec and the provinces by saying that if they refuse to be accountable to Ottawa, there will be no agreement.
Since the Prime Minister wrote on January 22 that he wanted to do his part and work in partnership with the provinces, how does the Minister of Intergovernmental Affairs explain today to those who are sick his boss's new hardline approach?
Hon. Stéphane Dion (Minister of Intergovernmental Affairs, Lib.): Mr. Speaker, it is not a hardline approach. The Prime Minister wants effective accountability. I am sure the premiers want that too.
We all count and do math the same way, based on the same indicators. This will be effective and will not prevent the provinces from introducing their own innovations. As far as I know, math is math, whether you are in Canada or anywhere else in the world.
There are indicators for making comparisons between countries. I do not see why in Canada, we cannot use those same indicators to compare what the provinces are doing and what the Government of Canada is doing for aboriginals.
Caroline St-Hilaire: Mr. Speaker, the real reason accountability to Ottawa is so important is because the federal government's true intention is to impose Canada-wide standards for health, as a senior government advisor was quoted as saying in Le Devoir .
Will the Prime Minister admit that the ultimate goal of the federal government is uniform healthcare, regardless of Quebec's specific healthcare needs?
Stéphane Dion: Mr. Speaker, if the hon. member had read the plan that the Minister of Health submitted to her provincial counterparts, she would have seen that it is clearly indicated that we want to help the provinces advance their own priorities while respecting the differences from one province to the next.
That is not the issue. The issue is being able to compare results. Being able to compare results means that the indicators have to be the same for everyone. Things are done differently based on the same indicators. I do not really see the problem. I am sure the premiers are not worried—
The Deputy Speaker: The hon. member for Repentigny.
Mr. Benoît Sauvageau (Repentigny, BQ): Mr. Speaker, while the Prime Minister is threatening to cut off the money supply to provinces that refuse to accept the conditions imposed by Ottawa, the Minister of Finance is acknowledging that he has a sizeable margin of $8.7 billion for 2002-03. If they want to get the negotiating process off track, there is no better way of doing so.
Can the government explain to us the Prime Minister's obvious desire to set off squabbles by throwing oil on the fire?
Stéphane Dion: Mr. Speaker, the Bloc are the ones looking for trouble. They seem to delight in squabbling. Things are going fine. The Quebec health minister has expressed a desire to see everyone work together in order to help him to advance his priorities.
The federal health minister has said the same. What they want is for each government to be responsible to its own population with the help of comparable indicators. Why the fuss from the Bloc Quebecois, we wonder?
Benoît Sauvageau: Mr. Speaker, the present financial situation makes it possible to meet the provinces' health requirements, which they have estimated at $5.4 billion.
Can this government, instead of stirring up squabbles, understand that what the health system needs is less uncertainty and instead some new funding and some stability?
Stéphane Dion: Mr. Speaker, as far as money is concerned, the Government of Canada considers health a priority. What the provinces will get is what it is possible to give them, within this government's fiscal capacities. It must be clearly understood that the $8 billion figure given by the member is from before the last quarter, which is historically always a more difficult period.
This time last year, the federal surplus was $13.3 billion, and it ended up at $7.9 billion. This year we are talking $8 billion, and it will be less than that by year end. We need to be reasonable. Based on this and given all the priorities of the provinces, we—
Foreign AffairsMs. Libby Davies (Vancouver East, NDP): Mr. Speaker, weapons of mass destruction in anyone's hands are dangerous and must be disarmed. No one should be exempt, including George W. Bush. All nations must honour international treaties that would control such weapons. Surely we should be following our own rules. Surely we should be telling George Bush to follow these rules too.
What is Canada doing now to abolish weapons of mass destruction around the globe, including in our own backyard?
Bill Graham: Mr. Speaker, Canada has had a long and proud tradition of working on the disarmament commission of the United Nations and with other nations around the world, including. let me say, the United States of America, in seeking to bring nuclear non-proliferation around the world. We worked with the United States in a very dangerous situation between Pakistan and India last year.
I think it is irresponsible to suggest in the House that the United States is not taking a responsible approach toward its massive power. We are all trying to reduce the danger in the world and make sure that we get rid of weapons of mass destruction, but where we have to focus is on the danger--
The Deputy Speaker: The hon. member for Vancouver East.
Libby Davies: Mr. Speaker, it makes us wonder what happened to that Canadian tradition.
Why will the Canadian government not disclose what Canada's involvement was in discussions this week on the star wars missile defence system? Why are we allowing Canada to become complicit in this rampant militarism and escalation of weapons development? Why was this Parliament not consulted before Canada held secret talks on star wars?
Bill Graham: Mr. Speaker, the reason why Parliament was not consulted before we held secret talks on star wars was that there have not been secret talks about star wars or anything else.
We are constantly engaged with the United States in discussing how we can best ensure the security of this continent for the benefit of Canadians and Americans and all of us together. We will continue to do that in a responsible way and in a way which ensures Canadian sovereignty and Canadian interests.
IraqRight Hon. Joe Clark (Calgary Centre, PC): Mr. Speaker, my question is for the foreign minister.
The government has now had more time to consider the joint statement by the eight European leaders. I expect the minister shares my view that the European statement is a strong endorsement of the United Nations process, so I repeat my question of yesterday to which the acting prime minister gave no substantive response.
Would Canada have signed the statement of the eight European leaders, and if not, why not?
Bill Graham: Mr. Speaker, like every document, it contains many elements. I agree and I think the hon. member has put it well. The document states:

We Europeans have since reiterated our backing of resolution 1441, our wish to pursue the U.N. route, and our support for the Security Council at the Prague...Summit and...Copenhagen--

This is very much the Canadian position. This is very much our position, but we were not asked to sign this document. We are not a European country. This was their effort to in turn solve their problems in Europe. We subscribe to many of the principles, but we would not necessarily sign a document of European leaders.
Joe Clark: The foreign minister has now, as he said, had an opportunity to meet with U.S. Secretary of State Colin Powell. Does he expect that Secretary Powell, when he meets with members of the Security Council on Wednesday, will present concrete new evidence of the material failure by Iraq to comply with the UN's requirements to eliminate all of Iraq's weapons of mass destruction?
Bill Graham: Mr. Speaker, I certainly had discussions with Secretary Powell yesterday. Secretary Powell did not tell me the details of what he intends to do at the United Nations. What he did say is that he will be laying out a comprehensive case for the United States as to why it believes Iraq is not in compliance with resolution 1441. Whether that will include new evidence or not remains to be seen, but I am assured that they will lay out a comprehensive case for their position.
I do expect that we will then have to wait to hear what Dr. Blix is saying about the inspections process to understand fully where we are going to go with this matter.
Goods and Services TaxMr. Rahim Jaffer (Edmonton—Strathcona, Canadian Alliance): Mr. Speaker, the Minister of National Revenue continues to cite different numbers of tax fraud cases that are either before the courts, being prosecuted, or being investigated, in order to confuse Canadians. The problem is that she has not specified how many cases are specifically attributed to GST.
Is the minister lumping together all tax cases to hide from Canadians the government's incompetence when it comes to investigating GST fraud?
Ms. Colleen Beaumier (Parliamentary Secretary to the Minister of National Revenue, Lib.): Mr. Speaker, CCRA has a vigorous audit program to detect non-compliance with the GST. Where non-compliance appears to be fraudulent the cases are referred to investigators for potential prosecution.
Any assertion by others that CCRA is not actively pursuing these fraudulent schemes is not supported by these facts. As of December 2002, 78 cases are before the courts and 125 under active investigation. The CCRA also has some--
The Deputy Speaker: The hon. member for Edmonton--Strathcona.
Rahim Jaffer: Again, Mr. Speaker, they do not know how much of that is attributed to GST. She just said it right now.
The only thing that is clear is that the minister does not know what is happening in her own department. She gives us conflicting numbers and will not tell us the specific amounts related to GST fraud.
A month ago the minister said that under the bad debts category of the public accounts over $4 billion was missing. Yesterday she said $850 million has been recovered. Is she telling us, then, that there could be over $3 billion missing due to GST fraud?
Colleen Beaumier: Mr. Speaker, I think that is definitely not what the minister has been saying. The minister has been saying that under current investigations there has been an additional $850 million collected.
IraqMr. Stéphane Bergeron (Verchères—Les-Patriotes, BQ): Mr. Speaker, the Prime Minister has put an end to the suspense. Yesterday, he clearly cast aside any need for a second Security Council resolution to authorize military action in Iraq, stating that if the Blix report says that Saddam Hussein is not complying and disarming, resolution 1441 authorizes military action.
Does the Prime Minister realize that, by making this type of statement, he is fully endorsing the American position and undermining the role that the UN must play?
Bill Graham: Mr. Speaker, the Prime Minister said clearly that resolution 1441 says the Security Council must remain seized of the matter and that Iraq must recognize that there will be serious consequences if it does not comply with its obligations. This is what the rest of the world acknowledges and what the Security Council is examining today.
We will see how the Security Council resolves the matter. However, as far as the resolution itself is concerned, the Prime Minister has always exactly reflected Canada's policy, which is to support resolution 1441.
Stéphane Bergeron: Mr. Speaker, the minister has made a valiant effort at putting the toothpaste back in the tube, but the fact remains that the Prime Minister's statements constitute an unfortunate step backwards for Canada on the role that this international institution—which, incidentally, Canada helped found—must play.
Does the Prime Minister not realize that his words threaten not only Canada's sovereignty, but they also weaken the role of the UN in resolving conflicts?
Bill Graham: Mr. Speaker, the Prime Minister never weakens Canada's sovereignty. He is one of the best spokespersons for Canada in the world. He fully supports Canadians and our sovereignty at all times. It has always been our position to support resolution 1441. We have always been faithful to the United Nations. We are still taking the same position. I totally deny the allegations made by our Bloc Quebecois colleague.
Goods and Services TaxMr. John Reynolds (West Vancouver—Sunshine Coast, Canadian Alliance): Mr. Speaker, yesterday and again today we have heard repeatedly from the minister responsible for the Canada Customs and Revenue Agency that her department has 125 active investigations underway and 78 cases of GST fraud presently before the courts. This is not a lot of action for an alleged 1,000 investigators working in that department.
Has the government ordered an investigation into the possible connection between drug dealers laundering their money and GST fraud?
Colleen Beaumier: Absolutely, Mr. Speaker. Many of the GST investigations are related to drug dealers, to gun dealers and to other acts of violations of Canadian law.
John Reynolds: Mr. Speaker, on December 12 in the Speaker's ruling, the Speaker criticized the minister's department for the way it reported GST fraud to Parliament because it changed the rules on how it. It is no longer transparent, and the Speaker said that it should change those rules.
I would ask the parliamentary secretary this. When will the government change the rules so that GST fraud is transparent, so that not only does Parliament know what is taking place but also all Canadians?
Don Boudria: Mr. Speaker, the manner in which items are reported to the House, either in the estimates or the public accounts, is a matter for the entire government to take seriously.
The government has taken the Speaker's decision very seriously. We fully intend, as a government, to do our best to comply with both the intent--
John Reynolds: When?
Don Boudria: The hon. member asks me when. As he probably knows, no public accounts have been tabled in the last two weeks.
AgricultureOdina Desrochers: Mr. Speaker, the provinces and the federal government readily reached agreement on the objectives of Canada's new agricultural policy framework. However, an important obstacle still exists regarding how these objectives will be reached. Despite the unanimous support of the National Assembly, the UPA, and the Quebec government, the federal government stubbornly refuses to make changes to the program, thereby threatening the viability of the Financière agricole du Québec.
Does the Minister of Intergovernmental Affairs approve of the Minister of Agriculture and Agri-Food's refusal to be flexible solely to maximize the Government of Canada's visibility?
Mr. Claude Duplain (Parliamentary Secretary to the Minister of Agriculture and Agri-Food, Lib.): Mr. Speaker, I want to thank the hon. member for giving me this opportunity to answer my first question as Parliamentary Secretary of the Minister of Agriculture.
It is completely false to say such things. Currently, we are developing a program, a strategic framework. All the stakeholders are participating in discussions. The minister is meeting today in Toronto with the provincial stakeholders to develop a strategic framework, and it is completely false to make such statements.
Odina Desrochers: Mr. Speaker, I have here a backgrounder prepared by Agriculture Canada.

It says that from the federal government's point of view, it makes sense to stop funding provincial programs because the federal government receives very little, if any, visibility from the provincial programs it supports.

Does the Minister of Intergovernmental Affairs think it is right for a government to hold all of Quebec's agricultural producers hostage because it is not getting enough visibility?
Claude Duplain: Mr. Speaker, some documents became available. In the English version, there was never any mention of this sentence. This sentence was in the French text, and the Minister of Agriculture deleted it immediately.
I can guarantee that this government will never make its assistance to Canadian agriculture a visibility issue.
FundraisingMr. Gerry Ritz (Battlefords—Lloydminster, Canadian Alliance): Mr. Speaker, from the Hill Times this week, we have learned that the finance minister is holding a $1,500 a plate leadership dinner. For further information, we are told to call a number. It is turns out it is his finance ministerial office. Can members believe that?
Does the Prime Minister think it is ethical to use a taxpayer-funded ministerial office as a base of operations for a Liberal leadership race?
Hon. David Collenette (Minister of Transport, Lib.): Mr. Speaker, the hon. member has made a very serious allegation about the Minister of Finance. I would hope that if he has such proof he would bring it forward, rather than just smear the name of an hon. member on the floor of the House of Commons.
Mr. Philip Mayfield (Cariboo—Chilcotin, Canadian Alliance): Mr. Speaker, the proof is in the Hill Times . I have a copy of it right here.
[Intervention]
Some hon. members: Oh, oh.
The Deputy Speaker: Order, please. We can all catch up on our reading a little later. In the meantime, let us get the question, then the answer.
Philip Mayfield: Mr. Speaker, it is an ad and the number is 232-5952. The rules are very clear. Even finance ministers must not use their ministerial offices or resources to raise campaign funds or to sell party memberships.
Will the Prime Minister instruct his second in command, the Minister of Finance, to disallow corporations from purchasing tickets to this $1,500 a plate fundraiser?
David Collenette: Mr. Speaker, now that the hon. member has revealed his very credible source, it just reinforces my earlier answer.
AgricultureMs. Yolande Thibeault (Saint-Lambert, Lib.): Mr. Speaker, farmers have expressed some concerns about the development of business risk management programs.
Can the Parliamentary Secretary to the Minister of Agriculture and Agri-Food explain to this House how he intends to alleviate these concerns?
Claude Duplain: Mr. Speaker, for a year and a half now, the Minister of Agriculture has been working on developing an agriculture policy framework with risk management programs that will provide very effective coverage for farmers. We have consulted all the industry representatives, producers and members of the Standing Committee on Agriculture who asked for amendments, which were noted and even added.
Again I repeat, the Minister of Agriculture is currently in Toronto with his provincial and territorial counterparts to continue examining the policy framework.
HealthMs. Alexa McDonough (Halifax, NDP): Mr. Speaker, in Nova Scotia today, unless at death's door, people are forced to wait up to 10 months for MRIs. In Ontario, the provincial government is entertaining 107 bids from health privatizers for MRIs and CAT scans.
As we head into the first ministers meetings on the Romanow blueprint, where is the federal leadership on moving forward with health care that is public and non-profit?
Stéphane Dion: Mr. Speaker, I have now the opportunity to say something about what the Premier of Ontario said. He has said that the additional money from the federal government will be to replace the actual money he is giving. He is saying that he is spending $25.8 billion for health care.
Every penny that we will give to the provinces next Wednesday will be to top up this money.
Alexa McDonough: Mr. Speaker, when will the government decide that it is not just about money. A for-profit MRI clinic is now operating in my riding and my constituents do not care whether it is there because the Alliance wants it or because the Liberals will not stop it.
What will the government put on the table at the first ministers meeting next week to ensure that Canadians have publicly funded diagnostic services that they desperately need, and which were specifically recommended in the Romanow blueprint?
Mr. Jeannot Castonguay (Parliamentary Secretary to the Minister of Health, Lib.): Mr. Speaker, this is an interesting and important question. It is interesting to see that in certain situations, there are people here who would not want us to work with the provinces, to work together towards the same goals, but would prefer that we simply send money to the provinces and let them do what they want.
Still others say that maybe we should make sure that the money being sent to the provinces is used for access to healthcare. That is exactly what we want to do. That is what the minister said earlier, that together with the provinces, in a spirit of cooperation, we want to set goals—
The Deputy Speaker: The hon. member for St. John's West.
Equalization PaymentsMr. Loyola Hearn (St. John's West, PC): Mr. Speaker, for quite some time we have been talking about the equalization clawback arrangements with the provinces. The former minister of finance has said, and is still saying, that it is very difficult to tamper with the equalization formula. The best way to help provinces is by dealing with project by project.
Does the government agree with this, and if so, will it help the province of Newfoundland develop the clean energy project at Lower Churchill?
Hon. Maurizio Bevilacqua (Secretary of State (International Financial Institutions), Lib.): Mr. Speaker, the hon. member will know that one of the hallmarks of the government has been the excellent relationship we have with provinces. In the area of equalization, he will also know that we have increased equalization payments by 27%. This to me is an amount of money that Canadians feel is quite reasonable.
FisheriesLoyola Hearn: Mr. Speaker, let me see if I can have more success with the Minister of Fisheries and Oceans.
The Minister of Fisheries and Oceans says that he has no jurisdiction over overfishing, that it is a problem for NAFO. The minister does have jurisdiction over the rapidly growing seal herds. What is his plan to deal with this serious source of predation?
Hon. Robert Thibault (Minister of Fisheries and Oceans, Lib.): Mr. Speaker, as the member would know, I will be making announcements very shortly on multi-year plan for the seal hunt which will respect the size of the resource and the importance in the communities. It will be flexible, much as we did last year where for the first time in 25 years we reached the quota. We even surpassed it.
We held a forum in Newfoundland with over 100 participants who expressed their views, both harvesters and conservation groups, on how we should manage, and we will be responding to those concerns.
Firearms RegistryMr. Garry Breitkreuz (Yorkton—Melville, Canadian Alliance): Mr. Speaker, this week the RCMP sent me documents that show five million guns in the billion dollar registry still have not been verified; that is most of the guns. This has become one of the most expensive garbage collection systems in the country.
I remind the justice minister that accuracy was one of the conditions of support for the Canadian Police Association. Would the minister tell Parliament how much it will cost to go back and verify these five million firearms? Will this be the second billion that will be flushed?
Hon. Wayne Easter (Solicitor General of Canada, Lib.): Mr. Speaker, I really believe it is time that this member turn the page and start to work with Canadians so that we have a safe and secure society.
The Minister of Justice has indicated that he will accept the recommendations of the Auditor General. There comes a time to move on and maybe it would be better for society if that member, instead of undermining the system constantly, tried to work with us to improve it.
Mr. Darrel Stinson (Okanagan—Shuswap, Canadian Alliance): Mr. Speaker, the firearms program involves the use of highly sensitive personal information, yet the privacy commissioner states that bags containing personal information collected by the gun registry were found in a dumpster. These documents originated with a private company, BDP, hired by the government.
When the system is breached by police personnel they are either charged, fired or disciplined in some way. Therefore what is this justice minister going to do to BDP for breaching our privacy rights?
Wayne Easter: Mr. Speaker, we appreciate the concerns expressed by the privacy commissioner. When the privacy commissioner raises some concerns, we constantly try to accommodate those concerns and work with them. That is what we are doing in this case.
Oil and Gas IndustryMs. Jocelyne Girard-Bujold (Jonquière, BQ): Mr. Speaker, the huge oil and gas industry profits announced today once again demonstrate the effects of the lack of regulation and the vertical integration of the industry. The companies' control is virtually total, from the well head to the pump.
What is the government waiting for before it regulates the oil and gas industry, putting an end among other things to vertical integration, which runs counter to the normal rules of competition?
Hon. Herb Dhaliwal (Minister of Natural Resources, Lib.): Mr. Speaker, we believe that we need a dynamic industry and we are working with it to ensure that happens. We think that a strong industry is very important for energy and for our exports.
We export $58 billion. That helps Canada. As a federal government we get $9 billion of revenue. Is the hon. member saying that we should not be collecting that? Is the hon. member saying that we should not have a competitive industry because if she is, then she is wrong.
Jocelyne Girard-Bujold: Mr. Speaker, not only are consumers being strangled by the oil and gas companies, they also have to deal with the effects of a 1.5 cent a litre federal gas tax, which is unwarranted and yet has been in effect since 1998.
What is keeping the federal government from transferring this tax to the provinces to fund public transit?
Herb Dhaliwal: In fact, Mr. Speaker, those in the oil and gas industry are not eligible for the recent reduction in the corporate taxes that we introduced. Every other industry has and they have made representations saying that they should also be able to get a reduction on their corporate taxes, from 28% to the 23%, to which we are now moving.
The hon. member, if she would do her research, would actually understand that the oil and gas, and mining industries actually have not benefited from the tax reductions announced--
The Deputy Speaker: The hon. member for Prince Albert.
AgricultureMr. Brian Fitzpatrick (Prince Albert, Canadian Alliance): Mr. Speaker, the agricultural policy framework implementation date will soon be here. Three provinces and the majority of farm groups have fundamental objections to many of the proposed changes. The prospects for thousands upon thousands of Canadian farmers are bleak at best.
Our farmers need an effective long term solution. Will the minister extend the implementation period by one year to ensure the program will meet the needs of our hard pressed Canadian farmers?
Claude Duplain: Mr. Speaker, of course there are various reactions to this program. This is a new program that is being developed throughout Canada so that all producers can benefit from all the existing programs.
Certain stakeholders do not like the program. We are making changes. People are asking that the program be delayed. It is important to understand that, next year, producers will be able to benefit from all current programs. We are now developing programs for the future. We have three years in which to do this.
Mrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, Canadian Alliance): Mr. Speaker, the minister is insisting on ramming through his changes to the safety net programs by April 1 even though the majority of farm organizations and a number of provinces are opposed to the deadline of April 1.
Now the minister is threatening the provinces with no federal funding for their producers until they have signed on to the APF. Why is the minister threatening the provinces and trying to force this program down the throats of the farmers?
Claude Duplain: Mr. Speaker, there is absolutely no threatening going on. We are currently developing the program. The Minister of Agriculture and his provincial counterparts are still working today in Toronto to develop this program. In due course, all producers will be able to access all the funding they need for their programs.
Canada Elections ActGuy St-Julien: Mr. Speaker, my question is for the government House leader.
What is the government's reaction to the ruling handed down yesterday by the court in British Columbia, under which provisions of the Canada Elections Act that prohibit broadcasting election results early were ruled unconstitutional? Will the government appeal the decision?
Don Boudria: Mr. Speaker, newspapers wrongly reported that a B.C. provincial court judge stated that section 3(29) of the Canada Elections Act was unconstitutional.
The matter is in fact still before the courts, and a decision is not expected for several weeks. The newspapers' allegations are therefore completely unfounded and false.
JusticeMr. Chuck Cadman (Surrey North, Canadian Alliance): Mr. Speaker, recent weeks have seen a series of brutal home invasions in my constituency. Senior citizens have been beaten in their beds. In one case the victim was handicapped and confined to a wheelchair. The despicable thugs responsible for this barbarism are beyond contempt and deserve no mercy.
Will the Minister of Justice commit here and now to introduce mandatory minimum sentences for these cowardly crimes?
Wayne Easter: Mr. Speaker, although there are some instances where there are mandatory minimum sentences, we believe in this government, and the Minister of Justice has stated a number of times, that flexibility should be within the court system. We believe very seriously as a government that people who perpetuate the kinds of crimes that the member talked about should be exercised to the full extent of the law.
Chuck Cadman: Mr. Speaker, it is extremely likely that these crimes are related to a flourishing drug scene. Crack houses and grow ops riddle this area. Police are stretched to the limit and the city is doing what it can through its by-laws and licensing, but both are frustrated with the weak laws and lenient courts, the result of toothless Liberal warm and fuzzy drug policies.
Why is the government more concerned with pampering violent crack heads than protecting senior citizens?
Wayne Easter: Mr. Speaker, I reject the allegations of the hon. member. The laws are not weak. In fact, the laws have been improved. In the last budget we have increased the amount of funding for policing and for tackling organized crime. The government is making strides forward to deal with that problem and the member should be working with us on it.
Auto IndustryMonique Guay: Mr. Speaker, yesterday we learned that DaimlerChrysler was negotiating with the federal government and the Government of Ontario to obtain potential assistance of more than $300 million for an assembly plant in Ontario. Yet, not so long ago, the GM plant in Boisbriand made a request for assistance from the federal government that was denied.
Is the federal government not in the process of considering using the taxes paid by Quebec workers to come to the assistance of another auto plant in Ontario?
Hon. Stephen Owen (Secretary of State (Western Economic Diversification) (Indian Affairs and Northern Development), Lib.): Mr. Speaker, the Government of Canada supports industries across this country through strong research and development infrastructure, and creating a regulatory environment that is friendly to business.
KPMG last year reported that Canada, among the countries of the European Union, North America and Japan, had the lowest business costs in the world for developed countries, 14% on average below the costs in the United States. We have the conditions with lowering taxes, with highly skilled labour, and with low and stable interest rates--
The Deputy Speaker: The hon. member for Erie—Lincoln.
Employment InsuranceJohn Maloney: Mr. Speaker, we are told that Human Resources Development Canada will investigate allegations of illegal calculations of employment insurance benefits in New Brunswick's east coast fishery.
Can the minister tell this House how her department will deal with the employers and employees involved?
Ms. Diane St-Jacques (Parliamentary Secretary to the Minister of Human Resources Development, Lib.): Mr. Speaker, I would like to thank the hon. member for his question and for allowing me to respond for the first time as parliamentary secretary.
I want to assure the member that the department is very aware of the needs of the people and the communities and that the member for Beauséjour—Petitcodiac is working very hard with the community on this one.
That is why the minister asked the department to set up a joint committee with representatives from employers, employees and the federal government in order to find lasting solutions to this situation. We believe that the problem is not just about employment insurance; job creation solutions also need to be found.
Foreign AffairsMr. Gerald Keddy (South Shore, PC): Mr. Speaker, on the news last night Canada's foreign affairs minister was seen arguing with Colin Powell, Canada's ally and neighbour. Meanwhile, for two years a Canadian citizen, Bill Sampson, has been held in a Saudi Arabian jail. He is being beaten, tortured and sleep deprived.
The minister does not mind being seen standing up to the Americans. Will he now stand up to Saudi Arabia and bring Bill Sampson home?
Bill Graham: Mr. Speaker, to begin with, I hope I was not seen arguing with Colin Powell. He and I had not only a friendly but very productive meeting together, which we always do.
The House leader has been to Saudi Arabia and has spoken to the crown prince. I personally spoke to the crown prince on behalf of the Prime Minister. Our ambassador is regularly in contact. We are doing everything within possibility and in a responsible way to ensure that Mr. Sampson will be treated properly.
I do not think it is in the interests of Mr. Sampson, his safety or what we can achieve together to raise it as a politically partisan matter in this House. That is not--
The Deputy Speaker: The hon. member for Skeena.
Aboriginal AffairsMr. Andy Burton (Skeena, Canadian Alliance): Mr. Speaker, in December I questioned the Indian affairs minister with regard to a financial dispute between an Indian band and a local school board in my riding. Although that particular instance is partially resolved it has come to my attention that millions of more dollars are owed to school boards by Indian bands, not only in my riding but across Canada.
Why will the minister not face up to his responsibility and demand more accountability for the billions of taxpayers' dollars his department sends to Indian bands?
Hon. Robert Nault (Minister of Indian Affairs and Northern Development, Lib.): Mr. Speaker, I can report to the House as I have on numerous occasions that these contractual arrangements are between school boards and first nations. They are legal documents. There are disputes that occur from time to time. Our department does get involved in mediation or even helping with arbitration in order for these communities to resolve their differences with local school boards.
I do not think it will work if the minister of Indian affairs arbitrarily makes decisions when these disputes occur. We think they should be worked out between the two parties.
Cartagena ProtocolMr. Bernard Bigras (Rosemont—Petite-Patrie, BQ): Mr. Speaker, during the negotiations on the Cartagena protocol, Canada was one of a group of countries, including the United States, wishing to have the protocol placed under the authority of the World Trade Organization, which is not called for by the present provisions of the protocol on biosafety.
Does the federal government intend to respect its signature, to say no to the United States' call for support for its challenge before the WTO of the European ban on GMO imports, and to immediately ratify the Cartagena protocol on biosafety?
Hon. David Anderson (Minister of the Environment, Lib.): Mr. Speaker, the importance of having environmental considerations taken into account when trade arrangements are made is I think understood by all of us in the House.
We are trying hard to ensure that the environmental considerations are indeed a major component of any decision on the trade side. Therefore, we look with favour to the WTO taking environmental concerns into account as a fundamental part of its discussions.
With respect to the hon. member's question, we will be pursuing that avenue to ensure both with the Cartagena protocol and with many others that we achieve the best environmental protection we can through this method.
FisheriesPeter Stoffer: Mr. Speaker, if the Minister of Fisheries and Oceans has an announcement about the seals he should be making that announcement right here in the House in front of all parliamentarians. After announcing the dragging and fishing moratorium in zone 4VN off Cape Breton we will now have disastrous effects on our cod stocks.
Therefore, the people of northeast and southeast Newfoundland and Labrador would like to know if the minister will allow them to be fishing when it comes to April 1?
Robert Thibault: Mr. Speaker, as I advised the House before, I am waiting for the recommendations of the Fisheries Resources Conservation Council which will be receiving scientific advice and making a recommendation prior to or about March 21. I will be making a decision by the end of March.
As for zone 4VN, the member should know that that quota has been allocated to that zone since 1999. It is not a new quota. The zone was fished this year, on recommendation, after scientific studies were done to show that there would be no risk to resident stocks.
Points of OrderDavid Collenette: Mr. Speaker, I would like to clarify something that was raised in question period in the questions from the members for Battlefords—Lloydminster and Cariboo—Chilcotin.
They alleged that an ad was placed in the Hill Times by the Minister of Finance, or on his behalf, for a political fundraiser and gave his ministerial office phone number to contact.
This is not true at all. The fact is that this was the events calendar in the Hill Times and it was the initiative of the Hill Times to put that phone number in. The minister's office has contacted the Hill Times and it will make a correction in the next issue.
I would say to my colleagues here that before they raise such spurious questions in the House they should check the facts, otherwise they are being unfair to a very honourable member.
Gerry Ritz: Mr. Speaker, we did take the time to verify that ad. In the announcement of coming events, when that number is called the deputy minister of finance answers the phone, says “thank you for your interest” and refers the call on to the minister's old law firm.
Whether it is a reprint or whatever their excuses will be, that is the situation. His ministerial office is quarterbacking the calls on that announcement.
Philip Mayfield: Mr. Speaker, the number is 952-4900 and that is not the Hill Times number. That is the Deputy Prime Minister's office number. I inadvertently gave the wrong number. I would like that corrected. The number I intended to read was 952-4900 which is the Deputy Prime Minister's office.
I consider it entirely appropriate when I read in the paper a fundraiser for John Manley, a fundraising event held--
The Deputy Speaker: Order, please. Let us not complicate things. Let me remind members that it is never acceptable to name anyone by name indirectly or otherwise. You cannot do indirectly what you cannot do directly, in other words, by means of a quote, use of the name of a member of Parliament, minister or otherwise.
If the member has anything else to add to the same point of order, because others want to speak to it, but I think I have heard just about all I need to hear.
Philip Mayfield: Mr. Speaker, I agree with you. I apologize. I did intend to use the minister's title. It was only in error that I referred to his name, and I withdraw that.
However the point I am concerned about, Mr. Speaker, is that you stopped my question relating to legislation when it had nothing to do with the legislation but what appears to be an indiscretion of the Deputy Prime Minister by making an announcement inviting the public to call his office with the number listed on his own Deputy Prime Minister website.
The Deputy Speaker: With the greatest of respect to members on either side who participated so far in this under the title of a point of order, so far all I have heard is a difference of opinion.
Let me conclude by saying to the hon. member for Cariboo—Chilcotin that if anyone is cut off, either in the process of asking a question or in the process of giving an answer, I think all of us are very much aware of the time constrictions for questions and for answers. It was only under those conditions that I rose in any situation today, either for a question or an answer.
I have heard all that is required on this matter. Respectfully to the minister, it is not a point of order. It appears to be a difference of opinion and we are truly engaging in debate, so I consider this matter closed.
On a new point of order, the right hon. member for Calgary Centre.
Joe Clark: Mr. Speaker, I simply want to reserve my right to review an exchange in the House today between the Parliamentary Secretary to the Minister of Agriculture and the hon. member for Lotbinière—L'Érable.
The issue in question has to do with the admission by the parliamentary secretary that a document published by Agriculture Canada states one thing in French, one of our official languages, and a different thing in English, one of our official languages.
The question of respect for the Official Languages Act is fundamental to the House of Commons. The fact that the parliamentary secretary would know that there was a diversion, would use that actually as a defence, would defend that diversion in the House of Commons, may well give rise to a question of order. I simply want to reserve the right to look at the record and--
The Deputy Speaker: With the greatest of respect to the right hon. member, I do not see the substance in his point of order.
I understand and I, as we all do, hold in the same high regard the defence of the matter of official languages. We all know, from practical experience, that from time to time there is a difference in text and corrections have to be made. I know I had to make such a correction on a matter before the House yesterday.
Tabling of documents.

Routine Proceedings
Government Response to PetitionsGeoff Regan: Mr. Speaker, pursuant to Standing Order 36(8) I have the honour to table, in both official languages, the government's response to 39 petitions.
Committees of the HouseMr. Jacques Saada (Brossard—La Prairie, Lib.): Mr. Speaker, I have the honour to present the 16th report of the Standing Committee on Procedure and House Affairs regarding the membership and the associate membership of the committees of the House and I should like to move concurrence at this time.
(Motion agreed to)
PetitionsGarry Breitkreuz: Mr. Speaker, I have a couple of petitions that I would like to present today.
The first petition deals with the creation and use of child pornography which is condemned by a clear majority of Canadians. The petition has been signed by residents of my riding.
The petitioners feel that the courts have not applied the current child pornography law in such a way that makes it clear that such exploitation of children will always be met with swift punishment.
The petitioners call upon Parliament to protect our children by taking all necessary steps to ensure that all materials which promote or glorify pedophilia or sado-masochistic activities involving children are outlawed.
Hon. Hedy Fry (Vancouver Centre, Lib.): Mr. Speaker, I wish to table a number of petitions from Victoria and Vancouver Centre with regard to child pornography.
The petitioners call upon Parliament to protect children by taking all necessary steps to ensure that all materials which promote or glorify pedophilia or sado-masochistic activities involving children are outlawed.
Garry Breitkreuz: Mr. Speaker, this petition is signed by many people from in and around Ontario. The petitioners support ethical stem cell research, which has shown encouraging potential, and that non-embryonic stem cells, which are known as adult stem cells, show significant research progress.
The petitioners call upon Parliament to focus its legislative support on adult stem cell research to find cures and therapies necessary to treat the illnesses and diseases of suffering Canadians.
Mr. David Chatters (Athabasca, Canadian Alliance): Mr. Speaker, I too would like to table a petition today adding more names to the hundreds of thousands of names already tabled in the House urging the government to take steps to outlaw the possession or production of pornographic material involving children, to which we have all received totally inadequate answers from the government.
John Maloney: Mr. Speaker, I wish to present a petition from constituents of the riding of Erie--Lincoln who wish to draw to the attention of the House that Revenue Canada has reduced the amount deductible on U.S. social security payments thereby increasing the amount taxable for them, which causing extreme hardship for many senior citizens.
The petitioners call upon Parliament to return to the former deductions as established prior to this change in December 1997.
Cheryl Gallant: Mr. Speaker, on behalf of the people of Cobden and Pembroke, Ontario, I am presenting a petition requesting Parliament to recognize that the Canadian Emergency Preparedness College is essential to training Canadians for emergency situations; that the facility should stay in Arnprior; and that the government should upgrade the facilities in order to provide the necessary training to Canadians.
Mr. Lynn Myers (Waterloo—Wellington, Lib.): Mr. Speaker, I am pleased to rise today and present a number of petitions signed by constituents in my riding regarding stem cell research.
Lynn Myers: Mr. Speaker, I am pleased to rise today and present a number of petitions signed by constituents in my riding regarding child pornography.
Geoff Regan: Mr. Speaker, I wish to present a petition from residents of the Halifax--Dartmouth area, including residents from my riding of Halifax West. These residents are concerned about what happens to automobiles that are at the end of their life and the need for waste prevention and recycling.
The petitioners call upon Parliament to enact legislation that requires that all automobiles sold in Canada to be completely disassembled and recycled in Canada. This legislation would include automobiles derived from domestic or offshore manufacturers.
Mrs. Betty Hinton (Kamloops, Thompson and Highland Valleys, Canadian Alliance): Mr. Speaker, it is my pleasure to once again rise in the House to present petitions from my constituents of Kamloops, Thompson and Highland Valleys.
The first petition asks Parliament to repeal section 13(5) of the Canada Post Corporation Act.
Betty Hinton: Mr. Speaker, the second petition, which has been signed by many hundreds of people, asks that Parliament ensure the protection of our children by taking all the necessary steps to ensure that all materials which promote or glorify child pornography and the exploitation of children be met with swift punishment.
Norman E. Doyle: Mr. Speaker, I have a petition from about 300 people in the St. John's area in my riding.
The petitioners make the point that it is the duty of Parliament, through the enactment and enforcement of the Criminal Code, to protect the most vulnerable members of society from sexual abuse.
The petitioners call upon Parliament to take all necessary measures to ensure that possession of child pornography remains a very serious criminal offence and that federal police forces be directed to give priority to enforcing the law for the protection of children.
Questions on the Order PaperGeoff Regan: Mr. Speaker, the following questions will be answered today: Nos. 72 and 91.
Question No. 72Mr. Inky Mark: With respect to the Department of Citizenship and Immigration: (a ) what provisions have been put in place in regards to the theft of documents from Canadian Immigration offices; and (b ) how are the documents that have been stolen from Canadian Immigration offices accounted for?
Hon. Denis Coderre (Minister of Citizenship and Immigration, Lib.): Insofar as Citizenship and Immigration is concerned, the information requested is as follows:
a) Physical security safeguards and measures as set out in the government security policy are applied based on the threat and risk assessment particular to each location within Citizenship and Immigration Canada. Each location must assess the specific threat and risks to establish the level of vulnerability and necessary additional safeguards to mitigate the risk. Threat and risk assessment form part of the risk management process and are completed on a one time requirement and reviewed on a regular basis or when circumstances are such that there is an increase threat.
b) Forms management is a key administrative function for CIC. There is an established reporting regime in place at both a local and national level to account for all controlled documents in CIC's inventory. In the event a document is stolen from a Canadian Immigration office, that document is accounted for through regular inventory reporting by the forms control officer of the office from which the document went missing. Should a forms control officer discover and confirm that a control document is missing, that officer immediately makes a record of all pertinent details. That record is then transmitted to the various branches, such as National Headquarters Corporate Security and Intelligence, equipped to deal with such an event. National Headquarters Intelligence then advises the immigration control officer network overseas, the ports of entry, and partners to look out for the document. Corporate Security undertakes the investigation in tandem with local officials in the region involved.
Question No. 91Mr. Peter MacKay: With respect to “smart regulations” cited in Throne Speech 2002, specifically regulations associated with environmental assessment processes: ( a ) what action is the government taking to ratify the Protocol on Environmental Protection to the Antarctic Treaty; ( b ) what departments are involved; ( c ) what government officials are involved; and ( d ) what is the time frame allotted for Canada's ratification?
David Anderson: The Antarctic is an environmentally critical region for Canada and the world. It is an important home to birds, seals, plants and serves as a global indicator of climate change.
Canadians are active in the Antarctic. We are conducting research on the Antarctic environment, active in tourism, and our technology is widely applied in the region.
Canada is a signatory to the Protocol on Environmental Protection under the Antarctic Treaty, the Madrid Protocol, designed to protect the fragile Antarctic environment.
Ratification of this Protocol is a priority for this Government.
It is of particular importance to the Minister of the Environment and the Ministers of Foreign Affairs, Justice, Fisheries and Oceans, Natural Resources Canada and Transport.
Officials from these departments, including legal counsel and policy analysts, are working on the legal and other mechanisms required for ratification.
It is the minister’s goal to achieve ratification within the year. Background In 1991, Canada signed the Protocol on Environmental Protection under the Antarctic Treaty, commonly referred to as the Madrid Protocol. This protocol is designed to protect the fragile Antarctic environment. Under the protocol, countries agree to exercise strict control over the activities of their nationals in Antarctica, and to conform with agreed rules of operation to prevent pollution and environmental degradation.
A federal process leading to the ratification of the Madrid Protocol was launched in the fall of 2002. Environment Canada and DFAIT are leading the process in conjunction with an interdepartmental committee that includes Justice, DFO, CEAA, TC, PCO and NRCan.

DFAIT: Department of Foreign Affairs and International Trade

DFO: Department of Fisheries and Oceans
CEAA: Canadian Environmental Assessment Agency
TC: Transport Canada
PCO: Privy Council Office
NRCan: Natural Resources Canada
Questions Passed as Orders for ReturnsGeoff Regan: Mr. Speaker, if Questions Nos. 59, 60, 61 and 62 could be made orders for return, the returns would be tabled immediately.
The Deputy Speaker: Is that agreed?
[Intervention]
Some hon. members: Agreed.
Question No. 59Mrs. Lynne Yelich: For the fiscal years 1993/94, 1994/95, 1995/96, 1996/97, 1997/98, 1998/99, 1999/2000 and 2000/2001, from all departments and agencies of the government, including crown corporations and quasi/non-governmental agencies funded by the government, and not including research and student-related grants and loans, what is the list of grants, loans, contributions and contracts awarded in the constituency of Westmount—Ville-Marie, including the name and address of the recipient, whether or not it was competitively awarded, the date, the amount and the type of funding, and if repayable, whether or not it has been repaid?
Return tabled.
Question No. 60Mr. Rob Anders: For the fiscal years 1993/94, 1994/95, 1995/96, 1996/97, 1997/98, 1998/99, 1999/2000 and 2000/2001, from all departments and agencies of the government, including crown corporations and quasi/non-governmental agencies funded by the government, and not including research and student-related grants and loans, what is the list of grants, loans, contributions and contracts awarded in the constituency of Toronto Centre—Rosedale, including the name and address of the recipient, whether or not it was competitively awarded, the date, the amount and the type of funding, and if repayable, whether or not it has been repaid?
Return tabled.
Question No. 61Gerry Ritz: For the fiscal years 1993/94, 1994/95, 1995/96, 1996/97, 1997/98, 1998/99, 1999/2000 and 2000/2001, from all departments and agencies of the government, including crown corporations and quasi/non-governmental agencies funded by the government, and not including research and student-related grants and loans, what is the list of grants, loans, contributions and contracts awarded in the constituency of Hamilton East, including the name and address of the recipient, whether or not it was competitively awarded, the date, the amount and the type of funding, and if repayable, whether or not it has been repaid?
Return tabled.
Question No. 62Mr. James Lunney: For the fiscal years 1993/94, 1994/95, 1995/96, 1996/97, 1997/98, 1998/99, 1999/2000 and 2000/2001, from all departments and agencies of the government, including crown corporations and quasi/non-governmental agencies funded by the government, and not including research and student-related grants and loans, what is the list of grants, loans, contributions and contracts awarded in the constituency of Vancouver South—Burnaby, including the name and address of the recipient, whether or not it was competitively awarded, the date, the amount and the type of funding, and if repayable, whether or not it has been repaid?
Return tabled.
Geoff Regan: Mr. Speaker, I ask that the remaining questions be allowed to stand.
The Deputy Speaker: Is that agreed?
[Intervention]
Some hon. members: Agreed.
[Stage Direction]
The House resumed consideration of the motion that Bill C-3, an act to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act, be read the third time and passed, and of the amendment.
The Deputy Speaker: Just at the conclusion of the debate prior to question period there was an amendment proposed by the hon. member for Edmonton Southwest and, upon review, it is receivable.
Mr. Dick Proctor (Palliser, NDP): Mr. Speaker, I am pleased to take part in this debate today on the Canada Pension Plan Investment Board. I appreciate that we are speaking to the Alliance amendment that was moved just before we went to question period. We in this caucus would not be supporting that. We could support it except for the last couple of phrases, because we do not agree with the direction the Canada Pension Plan Investment Board is taking.
As I listened to the debate earlier today and the leadoff speaker, the parliamentary secretary, it seemed to me that if I could synthesize what he was trying to tell the House in terms of why the government is moving forward, there are about five points.
The first is to permit all amounts held to the credit of the Canada pension plan account to be transferred to this relatively new CPP Investment Board by repealing the requirement to maintain in the account a three month operating balance.
Second is to establish a means by which the investment board may be required to transfer funds to the government to the credit of this plan account so that the immediate obligations of the account can be met.
Third is to transfer to the investment board over a three year period the right, title or interest in each security held by the Minister of Finance and establish the conditions on which the securities may be redeemed or replaced.
Fourth is to provide that the foreign property limit in the Income Tax Act applies to the investment board and its subsidiaries on a consolidated basis and to provide that the investment board will be considered to hold the property of its subsidiaries for the purpose of applying this foreign property limit.
The final point is to make housekeeping amendments to the investment board's reporting requirements and procedures.
The NDP position on this, and we will get into this in some detail, is that all pension trust documents must require a joint trusteeship, that all pension moneys are, after all, the deferred wages of the employees, that any pension surplus should be used only to improve benefits and that as deferred wages the funds have to be invested carefully, safely and wisely so as to show the greatest return for the beneficiaries of the plan within the investment guidelines as set out in the trust documents.
The New Democratic Party comes at pension plans with a great deal of history over many years, beginning with J.S. Woodsworth, the leader of the Canadian Co-operative Federation, the precursor of the New Democratic Party, followed by M.J. Coldwell as our leader, Tommy Douglas, and of course Stanley Knowles, the longtime member for Winnipeg North Centre. Our party has fought consistently over more than half a century for public pension plans so that our senior citizens, after a lifetime of work and service to their communities and their country, have the ability to retire with some dignity. People like Woodsworth and Douglas fought for these plans when a cradle to grave social program did not have all the negative connotations that we hear about in this day and age.
When the CPP plan first came into effect in 1966, my father was in mid-fifties. He recognized that he would be a beneficiary, that he would be able to draw that pension plan in another nine years at retirement age. He held different jobs in his life, but at that time he was farming and did not work for an organization or a company where he had a pension plan of any kind.
As it turned out, he was killed in an industrial accident and never had an opportunity to cash in on a pension plan, but I can say that he was very pleased in 1966 when the government came forward with a Canada pension plan that he would have been entitled to. As I say this, I recall that of course my mother would have been entitled to some of those benefits down the road as a survivor of my father's passing.
Just when we thought we had won these kinds of public pension plans and had some security and dignity for senior citizens, along comes the Reform Party, now the Canadian Alliance, and says we do not need public pension plans, let us tear the whole thing down.
Ken Epp: We never said that.
Dick Proctor: Oh yes, you have.
The Canadian Alliance says not to trust the public to be able to invest in these plans, let us give it over to the private sector, to private interests.
The government, for its part, says that is just right wing rhetoric which everyone should ignore, but then it quietly goes off and slowly but surely implements these kinds of half-baked ideas that are coming out.
I think the jury is still very much out on the CPP investment board. It talks about an arm's length relationship and we respond by saying if it is at arm's length it is very soon going to be out of reach entirely.
What is forgotten is that the money from the pension plans comes from both employees and employers. We know that the employers are well represented on the CPP investment board, but we ask respectfully where the heck are the employees in all of this? Where are they represented? Where are their interests represented in what the CPP investment board is doing with these public funds?
The board was created in 1997 to invest a portion of public pension money into equities, but now the legislation that we have before us is to move all pension plan assets immediately to the board. I know that seniors are very concerned about what is going on with this proposal.
The chief actuary, according to the Alliance member who spoke before question period, warned some time ago that the CPP fund was out of control and we were going to hit a huge bulge in about 2031 if action was not taken. For his warnings he was fired from the position. I would counter by looking at the investments of the CPP investment board. I wonder if it is not going to get a whole lot worse, because based on recent returns it is not exactly managing and investing the money very wisely, which I will get into shortly.
The Alliance member asks about the younger worker. The return has been only 2% for the worker that has come into the workforce since the 1980s. Our reply to this is that there is no recognition in that argument of the intergenerational transfer, the fact that we have built schools for post-secondary education and we have done a lot of other things. Together there is a recognition in our country that people grow up, go to school, get their education and enter the workforce, and then when they have completed their life's work they have an opportunity to retire with some dignity. This whole shift out of public pensions and into private pension plans fails to recognize those kinds of realities and I think it is extremely important that they be recognized.
I also want to note in passing that there is no spokesperson in this debate for the Bloc Québécois. There is a very genuine reason why it is not participating in the debate. Quebec has its own pension plan. At the time the CPP plan came in, Quebec had its own plan. It has not gone down this highly questionable road in terms of its pension money, so I assume the Bloc feels there is no need to participate in the debate.
I mentioned that the CPP investment board has not been doing very well. Let us accept at the outset that investments over the last year or so have not been good. It has been a bear market, as others would say, and a lot of investments in mutual funds and others have had poor or negative returns.
However, just for the record, it is important to point out that over the first six months of last year the Canada Pension Plan Investment Board managed to lose $4 billion of people's pension funds. That is a fairly significant loss. It represents just over 20% of the equity in that fund, which disappeared in the first six months of last year. The $2.5 billion that it lost in the second quarter of last year was by far the largest loss since the investment fund began in 1999. The $4 billion overall that it lost was double the $1.7 billion that it lost the year before. This is hardly a success story so far.
Despite that, Mr. MacNaughton, the CPP Investment Board president and CEO says that all is well, no need to worry, that over the long run these things are just little blips in the system and this will not hurt the pension plan of Canadians.
Norman E. Doyle: They doubled his bonus.
Dick Proctor: Yes, that is right, they did double his bonus for his assertion that all was well.
The strategy to diversify from government bonds to other assets is the right one, according to Mr. MacNaughton. What he fails to say, and what the Alliance fails to say, is that it has been government bonds over the last couple of years that have helped offset some of the large losses that have occurred on the equity side of the portfolio, because the bulk of the money has been transferred into index funds, Standard &amp; Poor and the Toronto stock exchange, and some have been allocated to the United States and the international stock indices. The equity portfolio in the CPP Investment Board fund was at $16.9 billion on September 30 of last year. That is a very large amount of money. The 20%, the $4 billion it lost, is based upon that.
If we look at this in personal terms, the fund is designed for a cash-rich investor, in this case very rich because we are investing between $6 billion and $8 billion a year in new funds. Of course the CPP argument is that with the market downturn this is a good time to invest even more money.
I want to contrast what the CPP investment board has been doing with what Quebec has been founded on since 1966 and what the Canada pension plan used to be founded on. Particularly for Quebec, less so for the Canada pension plan, there were three or four key principles. One of them was that the money from Quebec's public pension plan was going to be invested in Quebec firms, in small and medium-sized firms with less than $50 million in operating capital. This was to create, maintain and protect jobs in la belle province. It was also designed to promote the training of workers in economic matters and increase the influence on Quebec's economic development. A third goal was to promote training and to stimulate the Quebec economy.
The result has been very significant in that province. Quebec went from a region with limited sources of venture capital to one that now gathers the largest share of overall venture capital in our country. Something in excess of 52% of venture capital is directed to the Province of Quebec, largely as a result of these restrictions and stipulations on how moneys from the Quebec pension plan can be secured and invested for a better return for the people who are actually living in that province.
[Intervention]
An hon. member: It's common sense.
Dick Proctor: It is common sense, and there is a clause in the regulations that states it has to invest in the domestic economy within the Province of Quebec. That seems to us a sine qua non, something that we need to do in our provinces and country.
It is ironic that in the House of Commons we discuss the Kyoto protocol and talk about cleaning up the environment and reducing gases yet the pension moneys we talk about that could be invested in doing some of that good work are perhaps being invested in more high risk operations that are completely outside our economy and our country. They are being invested internationally.
On that point, in Moose Jaw, Saskatchewan last summer we had the finale of a Canada-Saskatchewan infrastructure program to reduce pollution and retrofit older buildings. This is something my colleague from Winnipeg knows about very well and has talked about it often in the House. It was a fairly modest program of $600,000.
A half a dozen buildings were retrofitted in Moose Jaw. We were told in the aftermath of the program by the contractors who did the work that the estimated savings in terms of heating and cooling the six buildings would amount to more than $200,000 per year. This means that in three years, as the member from Winnipeg has said in the House many times, the entire bill of $600,000 would be paid off.
The retrofit done on the six buildings probably has a shelf life of at least half a century. There will be very good returns over a long period of time. It is a job creator.
It seems to me that it is nothing but good news, those sorts of stories. For the life of me I cannot imagine why we are not taking more of those initiatives with our pension plan to make sure there is a good return, that we are cleaning up the environment and leaving a smaller imprint for our future generations.
Instead of following the model that appears to have worked so well in Quebec, the people who do not like what has happened or who are concerned or have persuaded others that the Canada pension plan is just not viable, just not sustainable over the long term, will have us perhaps invest the money who knows where because there is no public accounting of it. It could be invested in all kinds of pitfalls like Bre-X, Talisman, WorldCom and Enron.
There is no reason they would not invest in tobacco companies if it looked like they would have a good return, or invest in the third world and to heck with environmental concerns or whether or not the workers there are paid a reasonable wage. Let us not have an ethical stream; for heaven's sake, we would not want to do anything like that.
I listened to the member from Edmonton who represented the Alliance position on this issue. He was concerned about the RRSPs. He said that one of the ways we could pay less attention to public pension plans would be to elevate the amount of money that could be contributed into an RRSP. The amount now is capped at $13,500. There are persistent rumours it is going to be recommended that it go up to $19,000 per year and it could come in as soon as the budget next month.
We have a lot of difficulty with raising the RRSP limits because of the fact that the vast majority of Canadians do not even come close to making their $13,500 limit now. It is just not fair in any sense of the word. Raising the limit to $19,000 from $13,500 was one of a lot of recommendations. It is not fair. It is not right.
We have just come through a $100 billion tax cut in the past five years. The vast majority of that money has gone to the people who are in the top 1% of our tax brackets. Certainly it will exacerbate that. It does nothing more than provide a tax break for the thin upper crust of this country as it is measured by income and has absolutely nothing to do with building a stash of money to fund a life of ease when a person's working days are through.
The current RRSP contribution limit is 18% of earned income to a maximum of $13,500 minus any pension adjustment that an individual has. The limit is already scheduled to rise to $14,500 next year; it is indexed to go up, but there are those who want to up it another $5,000 above that. We cannot speak strongly enough in opposition to this. It is not fair to the people at the lower end. It is not fair to our tax system, which is increasingly disparate in terms of the growing gap between the rich and the poor. We would turn thumbs down on any notion of increasing the RRSP limits.
We need to talk about the business of why public pension plans seem to be under such vigorous attack and it is not just in Canada. Certainly worldwide there have been fights and battles about the way we consider funding our pension plans.
Critics warn, and we have heard it today, about the demographic time bomb waiting to explode and an age war over pension plans and pensions as the baby boom generation begins to retire over the next several years. Because the population is aging, we are told there will be fewer people of working age to support those who have retired and become dependent and that younger people will resent paying the cost of supporting the growing numbers of the older generation. At least that is the argument from the right wing. The answer according to some people is to eliminate the public pension programs like the CPP and force people to contribute to their own personal savings plans instead.
The fact is that public spending on income security for seniors in Canada is modest by any international standard and is expected to peak at levels well below those anticipated by other western countries in this century. Public pensions have reduced poverty and inequality among seniors in Canada. That is a truism and is very important to restate.
While the percentage of older people in the population is indeed increasing, the percentage of young people has been dropping. However by 2031, when the so-called demographic time bomb is supposed to explode, the total dependency ratio in Canada, the ratio of the young and the old, will still be lower than it was in 1951. In addition to that, as seniors form an increasing percentage of the population, they will account for an increasing percentage of all taxpayers.
The boomers, who have been described as the trillion dollar generation, will be much better off in retirement than today's generation of seniors. They will also pay an increasing share of the amounts collected by various levels of government in different kinds of taxes and user fees that will help pay for services to the elderly, such as pensions, health care and long term care. In other words, higher total amounts paid in taxes by seniors themselves will finance a significant part of the cost of the programs that older generations require.
Recent Canadian studies have also demonstrated that with relatively modest economic growth over the next few decades, Canada will be well able to afford its aging population, even taking into account increased public spending on health care and pensions as our population ages. The OECD says that if public spending on the old in Canada is to maintain its share of gross domestic product as our population ages, the average annual growth required between 1980 and 2040 is only 1.05%, just over 1%.
What is the panic? Why the panic? The answer is that there were a number of economists who received such prominence and notoriety in the United States and worldwide in the 1980s, the so-called Chicago boys, who pushed people into this notion that if it was public, it must be bad and let us privatize everything.
One of the good examples of what transpired was in Chile in South America when the Chilean economy was pushed down this free enterprise road under Pinochet with deregulation and privatization of public institutions and pro-market policies. Virtually overnight and with no fanfare, no public announcement, Chile replaced its public pension plan with a forced savings scheme that was the darling of the right wing economists and right wing governments and think-tanks around the world. It was held up by the World Bank as a model for other governments to follow.
Here the Reform Party advocated the abolition of the Canada pension plan and its replacement with a mandatory savings scheme of super RRSPs based largely on the Chilean model. Chile's system of mandatory private savings accounts can hardly be called a pension scheme since there is no risk pooling whatsoever, which is a fundamental characteristic of a true pension plan.
The entire risk of providing for retirement in Chile is borne by individuals. Workers must contribute 10% of their monthly earnings into an account with a private investment fund to cover old age pensions and an additional 3% of earnings to cover disability and survivor pension benefits. There is also a mandatory health insurance premium, which is 7% of earnings. In other words, total mandatory contributions to the private funds in Chile, most of which are run by foreign financial institutions I might add, amount to some 20% of earnings and there are no, I repeat no, matching employer contributions.
Experts who have looked at Chile's mandatory private savings scheme have raised serious concerns, including the high cost, the low coverage, the large number of vulnerable workers who are excluded, the inadequate benefits provided by the scheme and the systemic bias against women. Low income workers cannot afford the high contributions and many are in default.
It has been estimated that for the average worker, the fees, commissions and other charges consume well over one-third of contributions. By way of comparison, the cost of running the CPP, at least the cost before the recent reforms, is 1.8% of the contribution revenue. It is clearly a very manageable number.
People who are advocating this privatization have used tactics that are strikingly similar to the kinds of strategies being used by privatization advocates both in the United States and in countries like Chile. The key to having radical changes adopted, of course, is to create a crisis mentality. If people can be convinced that our public pension program is in crisis, they will be much more amenable to making major changes.
Corporate funded think-tanks and right wing commentators have put forward a number of different schemes to privatize the CPP by converting it to a system of mandatory individual savings accounts or by allowing people to opt out of the plan and have their mandatory contributions directed to their individual savings accounts. While initially most proposals seem to favour the Chilean model, in recent years we have seen other countries such as Britain opting out.
The Reform Party, in a 1998 booklet on pension reform, asserted that privatization based on individual accounts was working successfully in other countries, Chile and Australia. A closer look at these countries revealed that is not the case at all.
The Alberta government, under a treasurer who is now a member of this House, threatened to take Alberta out of CPP a few years ago unless federal and provincial finance ministers agreed to adopt several Alberta proposals, one of which was to allow individuals to opt out of the CPP plan and have some part of their contributions directed to their individual accounts. Opting out raises the same kinds of concerns as complete abolition of the Canada pension plan.
First, there would be a huge transition cost because some way would need to be found to pay for the accumulated benefits of people who have chosen to opt out of the plan.
Second, vulnerable workers would be pressured to opt out even though it may not be in their best interests to do that.
Third, the high cost of individual accounts would reduce the proportion of contributions available to generate a pension probably leaving that individual without adequate pension at retirement and therefore increasing the number of people who would have to rely on a minimum government guarantee through old age security or the guaranteed income supplement.
Opting out could seriously undermine the viability of the public plan itself. It is not much different than a publicly funded health care plan and when the private aspect of it is introduced, we risk ruining the entire system. It is no different with pensions as it is with health care. Based on other experiences, those most likely to opt out would be, surprise, higher income workers with secure jobs. If contributions from these workers were diverted to their private accounts, taken out of the public accounts, then there is less revenue to pay the people at the bottom of the system and there will be less money available for their retirement years. That is what we are getting at when we talk about intergenerational transfer and helping those who need some assistance.
Privatization through individual accounts or opting out would introduce inequalities. The Alberta proposal to withdraw surplus funds from the plan and allow individuals to invest in it privately for their own benefit would also contravene the principle of pooling risks through social insurance. It would weaken public policy levers that could be used to redistribute income and reduce inequalities.
Recent Canadian studies indicate the important contribution made by the public pension program, particularly the Canada pension, to reduce poverty and inequality among seniors. Reducing the role of government to one of simply providing social assistance for those most in need while encouraging marketplace solutions for income security and maintenance, will lead to an increase in rates of poverty and inequality among future generations of Canadian seniors.
Those are a few of the concerns that we have about pension plans and the CPP Investment Board. We are not at all persuaded that what has happened here in recent years is working to the benefit of our seniors or those who will be seniors in the next relatively short number of years.
We are very much opposed to the proposals to extend the grasp of the CPP Investment Board. We are opposed to it for entirely different reasons than our friends in the Canadian Alliance. The NDP believes in public pensions and we think a model based on what has transpired in Quebec over the last 36 or 37 years would work extremely well in the rest of Canada.
Norman E. Doyle: Mr. Speaker, I am pleased to say a few words to on Bill C-3, the Canada pension plan. At the outset, there is really nothing major in the bill that would necessitate our opposing it. Progressive Conservatives will be supporting the bill. I am delivering these remarks today on behalf of my colleague, the member for Kings—Hants, who is unable to be here. He is on Her Majesty's business elsewhere.
The purpose of the bill is to consolidate management of all CPP investments under the Canada Pension Plan Investment Board. It will no longer require the CPP to hold a cash reserve equal to three months of benefits and the bill will also make various technical amendments. As I said at the beginning, I do not believe that there is anything major in the bill that would prevent us from voting for it.
The Canada pension plan is an important cornerstone of the future retirement savings plans of most or all Canadians and certainly is one that is supported broadly by a range of Canadians. Canadians support not only the notion of a secure government pension plan but also one that maximizes their retirement income.
Generally, Canada's system of retirement savings has three main pillars. The first is universal old age security and the low income supplement. Second are the earnings based Canada and Quebec pension plans. Third are the private retirement savings and pension plans.
The Diefenbaker government initiated the work leading up to the 1966 introduction of the CPP. Progressive Conservatives have traditionally viewed the CPP as a fundamental part of Canada's social safety net, an obligation that government must honour.
More than 2.8 million Canadians outside Quebec receive retirement benefits of up to $9,345 a year depending upon how long they contributed, and their employment earnings. Special benefits are also provided for persons with disabilities, widows, widowers and orphans. The Quebec pension plan is quite similar in that regard.
For three decades, the CPP was a “pay-as-you-go” plan. Premiums only provided a fund equal to two years of benefit. By 1997 there were only $40 billion in the fund, while the cost of promised future benefits totalled $600 billion. Without changes, premiums would rise to 14.2% of pensionable earnings by 2030.
In 1997 Ottawa and the provinces agreed to two major changes to the CPP. The first was to increase premiums more rapidly than previously planned, but they were kept at 9.9% in 2003, which was the equivalent of $4.95 for employees and $4.95 for employers. That equalled an $11 billion increase in annual premium revenues. The plan is sustainable over the long run at next year's rate and all Canadians will receive the benefits they have been promised. That of course is a very good thing.
Second, changes were made to the way benefits were calculated reducing slightly the pensions of new beneficiaries, reducing the death benefit and making it much harder to get disability benefits.
Third, new funds flowing into the CPP funds will be invested in the marketplace and managed by an arm's length agency, the CPP Investment Board. Previously funds not immediately needed to pay benefits were loaned to the provinces at the rate paid by the federal government on its long term bonds.
Under current numbers, contributions to the plan will exceed benefits until 2021. At that point some investment income will be used for some CPP benefits. By 2010, CPP assets will equal $142 billion. By 2050, they will approach $1.6 trillion. Therefore, by the turn of this decade the CPP will be by far the largest investment vehicle in Canada.
The CPP actuary says that the changes in the bill will increase returns on CPP assets by $75 billion over 50 years. This reflects both the higher returns of a more diversified portfolio and a reduction in the amount of money that earns lower returns as part of the cash reserve.
This movement of the Canada pension plan beneficiary pool toward capital market is one that will in the long term benefit Canadians and improve their retirement incomes. Notwithstanding what has happened in the last year or two in the capital markets, by and large the return last year on the Canada pension plan, compared to most mutual funds and investment portfolios in the last year, was actually fairly good.
Relatively good changes in accountability structures are made to the board's governance provisions with this bill. The CPP investment board's governance model is built on two fundamental principles. First, the investment professionals must be able to make their decisions without political interference. That could only be a good thing. Second, there must be full accountability and reporting to Parliament, the provinces and the people of Canada. That could only be a good thing as well.
The legislation seems to be carefully crafted to effect accountability while ensuring a certain level of independence. Whether it actually plays out that way will be seen as years go by. Time will tell. However, it is a very good start in the right direction.
For example, the legislation requires the board to have a sufficient number of directors with proven financial ability or relevant work experience. Why the standard would be anything lower really is not an issue. In fact, that should be the minimum prerequisite.
How the directors are appointed is a departure from the traditional practice for crown corporations. A committee appointed by federal and provincial finance ministers nominates candidates and the federal minister selects candidates from the committee's nomination list, in consultation with the provinces. However, at the end of the day the appointments will come by way of a final recommendation from the finance minister, only to be rubber stamped by an order in council. That may or may not produce the very best people. Let us hope it does.
The bill is a step in the right direction and as a result future boards will consist of professionals with accounting, actuarial, economic and investment credentials. They will be experienced in the private and the public sector and will bring to the board table informed opinions on public and private sector governance.
There are other legislative measures to ensure transparency and accountability. The board will also appoint external and internal auditors who will report directly to the audit committee of the board. Despite these powers, government can check on what is being done with the public's money. Indeed, the federal finance minister is required to authorize a special examination of the CPP investment board's books, records, systems and practices every six years. Perhaps there might have been some utility in the suggestion of performing examinations much more frequently.
Our political and public accountability is especially important at a time when some Canadians might be worrying about equity markets.
The Canada pension plan has to be invested for the long term. Good portfolio management expertise will prevail with the right quality of people at the management level. That is one of the reasons why it is so important that the board of the Canada pension plan be chosen very carefully. They are doing very important work.
We have had and continue to have significant concerns about the way the government makes orders in council appointments. The correlation between Liberal Party contributions and an appearance in the board's order in council appointments is somewhat unsettling to say the least.
The degree to which this level of partisanship can threaten the potential quality of a board is very important.
When we are talking about the future retirement incomes of Canadians, it is absolutely essential that the individuals on these boards be beyond reproach and that they be chosen by absolutely no partisan influences. I hope the two latest appointments, Germain Gibara and Ronald Smith, do their jobs exceptionally well as Canadians expect them to do. Hopefully there is no reason to believe that they will not do a very good job.
Furthermore, the government has to take a look at other ways to address Canadian retirement planning right now. We are just a few years away from seeing a significant reduction in the number of Canadians who are actually working and paying taxes, along with a significant increase in the number of people who will be drawing pensions.
Therefore, the government should heed the finance committee's report and the Progressive Conservative's dissenting report, both calling for an increase in the RRSP contribution limit. That is one way in which we can defer taxes to the future as people withdraw from these RRSPs. Also, the increase in RRSP contribution limits would give Canadians an opportunity to shelter more income today than they would otherwise be able to do.
While Bill C-3 does address some much needed governance, housekeeping, administrative and technical issues, the bill does not turn its attention to any substantive change in pension policy that would actually help alleviate some of the financial pressures currently being experienced by many of our elderly, one of our most vulnerable groups in society.
In addition to addressing the structure of the CPP, the government might have done well to address some policy questions concerning seniors and how their GSI, guaranteed income supplement income, private savings and CPP are currently being administered under the all the present federal schemes. I know our party would want to make sure that the elderly in Canada do not suffer due to rigid policies and misguided principles or bureaucratic holdups.
Speaking of the guaranteed income supplement, it was just today that I had a call from a senior in the St. John's area who was appalled at a story coming out of Quebec about a senior who did not know that in order to actually receive the GIS, the guaranteed income supplement, that one actually had to apply for it. I think it was in today's Globe and Mail and the Ottawa Citizen . In other words, it is not automatically sent unless one applies.
When a senior finally does apply, the mother of all injustices kicks in. If the person qualified, say three or four years ago, Ottawa will only retroactively pay for one year, even though the person might have qualified for the benefit three or four years ago but did not know about it and therefore did not apply.
A parliamentary committee has discovered that about 380,000 people are eligible for the guaranteed income supplement but that they do not receive it because they did not apply for it. That is heart-rendering. The most needy in our society would certainly have to be people who are eligible for the guaranteed income supplement but 380,000 of them did not apply for it, saving the Government of Canada $3 billion.
As I said, once they apply, the mother of all injustice kicks in, in that Ottawa will only pay them retroactively for one year even though they might have qualified for the supplement three or four years ago.
These are very important points. We support Bill C-3. Hopefully the government will pay a little bit of attention to the last issue I raised about the guaranteed income supplement because seniors are the most vulnerable in our society and they need a co-operative federal government, a government that will look at the policy and say that it needs to be adjusted and changed because it is costing the seniors of our society dearly.
Dave Chatters: Mr. Speaker, I listened carefully to the member's comments and certainly would not argue with any of those criticisms of the bill and what the government is proposing to do with the program.
However I would like to remind the member that the chief actuary of the CPP, long before the government took action, had been a voice in the dark telling us that the CPP was not sustainable. For years private sector actuaries were saying the same thing.
In fact, during the years of the Mulroney Progressive Conservative government I wrote a letter to my member of Parliament, then a Progressive Conservative member of Parliament, pointing out those things to him and pleading for his government do something to make that plan actuarially sound for myself, my children and my grandchildren.
I would like to ask the member if the Progressive Conservative Party, when it was in government, examined the issue of the unsustainability of the Canada pension plan and, if it did, why did it not do something to fix it and to address the criticisms that he is making of the current government in the way it fixed the plan. Why did the Conservatives not do it right when they had the chance?
Norman E. Doyle: Mr. Speaker, as far as I am aware, the government of that day did have a very close look at fixing the plan and made some recommendations to the parliamentary committee on finance to have a look at it.
However, it was not fixed but hopefully the Liberal government was able to look the recommendations that we made at the time and was able come to the conclusion that something needed to be done.
We all support a good, sound Canada pension plan. It is very important that Canadians have that. Under the current numbers, contributions to the plan will exceed benefits by 2021. I give the former Minister of Finance and the government full marks for doing a good job on fixing the plan. By 2010 the CPP assets will equal $142 billion and by 2050 they will approach $1.6 trillion.
We all have to be very vigilant to make sure the plan remains very sound because we do have an aging population who will be looking for the benefits under this plan by even greater numbers in the future.
However, as I said a moment ago, we have always been concerned. No matter what political party has been in power, we have always been very concerned about making sure that the CPP remains sound and viable for seniors and those of us who will be drawing from it in the future.
Mr. John Duncan (Vancouver Island North, Canadian Alliance): Mr. Speaker, while listening to the speech by the NDP member for Palliser earlier, I was getting more and more concerned when he was depicting the entire legislation in terms of where the Canadian Alliance and, before the Canadian Alliance, where the Reform Party stood in terms of pensions, and of course misrepresenting considerable things.
I thought the exercise of opposition in the House of Commons was to hold the government to account and to deal with legislation put forward by the government, not to create or exacerbate divisions between the opposition parties.
I found most of what was said by the member for Palliser to be essentially irrelevant to the debate and counterproductive.
I would like to be irrelevant to the debate for a moment just to point out some things that the same member for Palliser recently said in the House of Commons that were basically contrary to where people are coming from.
I will quote briefly:

--in response to the member's specific questions, the position that I take, and I believe would be shared by a majority if not all of my caucus colleagues, is that if it has not specifically hurt a minor in the production of it, if it is created by people's visual imaginations and if the main purpose of it is not simply about pornography and sexual exploitation, then under the laws people do have a right to their own imaginations and thoughts, however perverse the member might think they are.

I want to hold that member accountable for a defence of child pornography in this place which I find indefensible. If he wants to carry out what I consider to be uncharacteristic descriptions of the Canadian Alliance, then I will ask him to be accountable for his actions in this place.
It is really my job today to talk about Bill C-3, which is a step in the government's attempt to put all the CPP assets under a single entity called the Canada Pension Plan Investment Board. We have had quite a bit to say about this board over time. I have heard the NDP member for Palliser and I have heard Liberal members say how wonderful it is that the Canada Pension Plan Investment Board will copy or emulate the Caisse de dépôt et placement du Québec.
I think this is clearly a backward step and one that we should all be very concerned about. We will end up with a very large, in a Canadian context, government run investment fund with the money and the mandate to essentially, within our small economy, take a controlling stake in private firms, to hire and fire directors, to block takeovers and to tilt the scales in capital markets.
All of this can be done at the whim of the government who is responsible for the appointees to this board. We are entirely captive of the goodwill of those government appointees to the board to put priority on the shareholders, the Canadian public, who are the eventual recipients of the Canada pension plan, as opposed to their political masters.
We know from recent history that the Caisse de dépôt et de placement in the province of Quebec has been used consistently for political initiatives. It was, for example, heavily used in the lead up to the last referendum when the Parti Québécois wanted to ensure that it had a two year period after the referendum before it had to go to the markets for money. That was all put in place ahead of time on the basis that if it won the first couple of years could have been a real difficult time.
It put the aspirations and needs of its separatist movement ahead of the aspirations and needs of either current or future pension recipients. We know that the former minister of finance, the member for LaSalle—Émard, would love to designate the Canada Pension Plan Investment Board direction to be utilized for all kinds of social policy and economic regional development initiatives as opposed to allowing that board the freedom and independence to seek the maximum rate of return for its shareholders.
This is part of a pattern that is consistently demonstrated by the Liberal government in most initiatives that it takes. There is in every case an attempt to utilize the board or the institution or the crown corporation in a way that would benefit the Liberal Party of Canada and its attempt to retain control in this place in the national governance of the country.
I find this very problematic. Although we are heartened by some of the comments from the people who have actually been appointed to the board, that is not good enough. We are not talking about good intentions here. We are talking about the inevitable reality of poorly designed legislation that would allow the entire exercise to come under the political control of the minister responsible for the board .
We can talk about some of the details of performance that would demonstrate quite clearly what kind of problems we could get into with rates of return when we attempt to emulate something like the Quebec model.
The Chief Actuary of Canada reported that from 1966 to 1995 the average real yield after inflation on the Quebec pension plan account, which was invested as it would be under what is envisioned by this bill, was under 4%. If we compare that with the average of the largest private managed funds in Canada, it came in at just under 5%.
If we were to take the huge amounts of investment capital that would be invested by the Canada pension plan and compound that over several decades, like the example I gave from 1966 to 1995, that would be a huge differential. We are forgoing that money by allowing this kind of scheme to be the operative scheme for the Canada pension plan.
When the former finance minister, the member for LaSalle--Émard, put these pension plan proposals forward, he projected a rate of return of his Canada pension plan after inflation to be 3.8%, even less than what was being achieved by the Quebec pension plan. Why would the former minister be targeting that kind of a rate of return unless he had strong designs on using it for political purposes and knew that it would reduce the rate of return? What kind of a message does that send about how caring our government is about the future incomes of our seniors? Even if those motivations were not there the inevitable result of this kind of legislation eventually would be that we would end up with that kind of a consequence.
A big problem with the current arrangement of the legislation is that the moneys that the Canada Pension Plan Investment Board invests would have to follow the same rules as an organization that we as individuals are stuck with in terms of investing in RRSPs, that is, dealing with Canadian content and how much we are allowed to invest outside of Canada. Canada has about 2% of the world's capital market. What that means is that a large pool of money is funnelled into a very small capitalization. This increases the risk for Canadians and for Canadian pensioners.
I believe that we need to free the Canada Pension Plan Investment Board and individual Canadians from these restrictive Canadian content rules.
The Canada Pension Plan Investment Board would look at $100 billion tied up in the stock market potentially as a large investment indeed. To demonstrate how insignificant Canada's capital markets are, when we look at that number, it is instructive to realize that yesterday's announcement of AOL Time Warner's loss for last year came in at $100 billion in the U.S. Here is one company that lost approximately the asset base of the Canada pension plan.
The other aspect that could show up is that in a very down market, we could end up with a large captive drop in the market of anywhere from 30% to 40%. That is why we need to spread the risk. That is why we need to get beyond these restrictive Canadian content rules that are tying up too much of the capital base into a small market.
We did have a crisis in the Canada pension plan during the tenure of the former finance minister, the member for LaSalle--Émard. What happened then? We watched the payroll burden for Canada pension plan contributions increase. That is a job killer; it is hard on employers and employees. There was a reduction of about 5% in the CPP rates to seniors. Those were not happy measures and were counterproductive. If we had that once before, we are potentially looking at a situation under this legislation that would be exacerbated, in other words, actually made worse.
What could we to look at? We could look at, for example, a year of investment where the Canada pension plan would be invested in a passive fund as opposed to the active engagement of choosing a capital mix. This could be done by contrasting the Quebec pension plan with a passive investment, and guess what? The passive investment plan in the example of the first year of operation did twice as well as the Quebec pension plan.
I find it puzzling to hear so much support coming from the government and the NDP in terms of them saying this is an enlightened measure when what it is sure to do is reduce pensions for seniors and put us in peril of political manipulation of the entire pension assets of this country. I find this totally unacceptable. We need a better context than what the government is providing for our pension assets.
The Deputy Speaker: It being 1:30 p.m. the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

Private Members' Business
Statutory Instruments ActGurmant Grewal: 
moved that Bill C-205, an act to amend the Statutory Instruments Act (disallowance procedure for statutory instruments), be read the second time and referred to a committee.

Mr. Speaker, on behalf of the constituents of Surrey Central, I am pleased to rise to speak on my private member's bill, Bill C-205, an act to amend the Statutory Instruments Act.
I would like to thank the hon. member for seconding the bill. The last time the bill was in the House it was seconded by the Liberal member for Scarborough Southwest. I had originally planned for a member from the NDP, the hon. member for Sackville—Musquodoboit Valley—Eastern Shore, to second it, but I appreciate his intention to support it. That is how things have gone. I very much appreciate it.
I first introduced the bill last June, known as Bill C-202, and then reintroduced it in October after prorogation of the House. Last time I had the support from all parties. I am very happy that members from different parties will be speaking to the bill and I look forward to them supporting it.
The bill provides for a disallowance procedure for all statutory instruments or delegated legislation, commonly known as regulations, subject to review and scrutiny by the Standing Joint Committee on Scrutiny of Regulations. Its enactment would ensure that Parliament would have the opportunity to disallow any statutory instrument made pursuant to authority delegated by Parliament or made by or under the authority of the cabinet.
Disallowance is one of the traditional means at the disposal of the legislature to control the making of delegated legislation. A disallowance procedure gives parliamentarians an opportunity to reject a statutory instrument made by a delegate of Parliament.
For the information of those watching the debate on television, statutory instruments give form and substance to legislation. As the saying goes, “the devil is in the details” or sometimes in the fine print. However, in this case, the devil is in the regulations.
We know that 20% of the law in the country stems from legislation debated and passed in the legislature, and in this case in Parliament. The remaining 80% of the law is made up of regulations. Members of Parliament passionately debate proposed legislation in the House and after debate we vote either yea or nay, depending on the merit of the proposed law.
Regulations, on the other hand, receive virtually no debate in the House or in the other place, no public study or input, or even media scrutiny. This is an affront to democracy.
The Standing Joint Committee on Scrutiny of Regulations does the only scrutiny, and that too is only limited scrutiny, of regulations of Parliament. Members of Parliament and Senators on the committee, legal counsel and staff work very hard scouring through thousands of papers on dry, technical and legal subject matter as part of their thankless task of reviewing regulations or statutory instruments.
The committee is generally misunderstood and ignored, but it is an essential watchdog, protecting democracy, controlling bureaucracy and holding the government to account. If I may say so, the Standing Joint Committee on Scrutiny of Regulations is a non-partisan committee, or at least less partisan and more objective than other committees of Parliament.
The committee does not judge regulations on the basis of policy matter, general merit or necessity. Its study of regulations is instead limited to the questions of validity and legality, and members follow uniform and clearly defined criteria in their examination.
The committee works meticulously and, with the complex nature of its undertaking, work proceeds at a slow pace. The inevitable result, especially considering the large volume of regulations introduced each year, is a huge backlog of work in progress. Staff and resources allotted to the committee are nowhere near adequate.
I am four term co-chair of the Scrutiny of Regulations Committee representing all members in the House, and speak from personal experience. The committee works to improve and correct defects in the regulations. Its ultimate weapon, however, is to disallow defective regulations. This is a weapon only used when strictly necessary. In a case where the joint committee considers that a regulation should be revoked, it makes a report to the House of Commons containing a resolution to the effect that a regulation, or a part thereof, should be revoked. Once that report is tabled in the House, the applicable procedures will depend on a decision by the responsible minister.
Unfortunately, the current disallowance procedure is seriously defective. The procedure resulted from a recommendation of the special committee on the reform of the House of Commons, the McGrath Commission, in 1986. Before that time there was no general disallowance procedure in place at the federal level in Canada. The government of the day placed a disallowance procedure in the Standing Orders with the intention it would remain there on an experimental and temporary basis until such time as a decision could be made to its effectiveness.
If a success, it was the intention of the government to implement a statutory procedure. Temporary is of course a relative word, but it should not mean indefinitely. In the last 16 years we have seen the effectiveness of having a disallowance procedure but still nothing has been done to give it a statutory footing. This experiment has been going on for 16 years. It is about time we conclude that experiment and look at the success of the disallowance procedure and put it on a statutory footing.
I will explain why it is not on a statutory footing. My bill would put it on a statutory footing and thereby increase the effectiveness of parliamentary control or delegated legislation.
The current procedure limits the possibility of disallowance to those statutory instruments that are made by the governor in council or by ministers of the crown. As a result, a considerable body of delegated legislation created by quasi government agencies or boards, for example by the CRTC, the National Energy Board, CIHR, the Canadian Transportation Agency or even the Canadian Nuclear Safety Commission, is not subject to the disallowance procedure. Thus, a large number of delegated legislation or laws escape the control and scrutiny of Parliament.
This is a consequence of the choice made in 1986 to implement the disallowance procedure by means of amendments to the Standing Orders of the House of Commons rather than by legislation. When the Standing Orders were amended to accommodate the disallowance procedure, it was not on statutory footing. It should have been done by legislation.
The present procedure relies on the executive to take further action, not on Parliament, to give effect to an order that an instrument to be revoked. A statutory procedure eliminates the need for this and guarantees compliance with the decision of the House to disallow a statutory instrument or regulation.
Mr. Speaker, you might remember that in 1992 the Subcommittee on Regulations and Competitiveness noted the deficiencies in the present procedure and recommended that it be replaced by a statutory procedure covering all statutory instruments, not just selected instruments.
I think all members will agree that it is desirable that all statutory instruments subject to review by Parliament under the Statutory Instruments Act be subject to disallowance. There is no reason why a regulation made by the governor in council or a minister can be disallowed by Parliament while a regulation made by some other delegate of Parliament cannot.
Parliament delegates authority to quasi agencies and boards to make regulations but does not have authority to scrutinize them, disallow them or correct them or to see their validity or legality. How can Parliament give authority but not have control over those regulations that completely escape the scrutiny of Parliament?
The procedure only applies to the House of Commons and not the Senate. That is another serious issue which needs to be reviewed because Parliament contains both houses. The other place and this place need to work together on disallowance procedure.
Another defect of the current procedure is that it relies on the co-operation of the governor in council or the minister concerned to carry out a disallowance after the House of Commons has ordered it. An order of the House of Commons cannot affect the revocation of a regulation. The authority that made the regulation to be disallowed must still formerly intervene to revoke that regulation following the making of a disallowance order.
While the House could deal with the matter as one of contempt of Parliament, there are no other legal sanctions or even consequences that arise from a failure to comply with a disallowance order. For instance, a report can be tabled in the House for disallowance and concurred in but there is no guarantee that regulation or statutory instrument will be disallowed because it depends on co-operation from others. Even though it could be contempt of Parliament, there are no legal repercussions after that. It is pathetic.
As a matter of law and order of the House of Commons that a particular regulation be revoked is not binding on the author of the regulation and cannot be enforced by a court of justice. Under the status quo procedure, the revocation of an instrument disallowed by the House of Commons would ultimately depend on a decision of the governor in council or the appropriate minister to obey the order of the House of Commons or not. The will of Parliament does not impose upon the decision of Parliament.
Placing the disallowance procedure on a statutory footing, as this bill recommends, would remove the need for a regulation making authority to take subsequent action to give effect to an order o the House, thus eliminating the potential for conflict between the legislature and the executive.
Proposed subsection 19.1(9) is a new provision. By putting the disallowance procedure on a statutory footing, the procedure also would be made more efficient as there would no longer be a need for the House of Commons to address an order of the cabinet ordering the revocation of a statutory instrument. The legislation itself would now deem a disallowed instrument to be revoked.
By eliminating the need for further action by the governor in council or the minister who adopted the disallowed instrument, compliance with a disallowance decision would be improved by eliminating any possibility of a regulation making authority not complying with a disallowance order of the House.
It seems a little complicated and technical, I know. However those veteran members of the standing joint committee will understand and I am sure that other members have a fairly good idea of what I am saying, though it is a dry topic and a little technical and complicated.
Bill C-205 provides that the revocation of a regulation does not take effect before the expiration of a 30 day deadline. By doing so, the bill would ensure that the regulation making authority responsible for the disallowed regulation would have an opportunity to take measures to mitigate any negative impact that the revocation might have, including the enactment of alternative regulations.
So the 30 day period will give the opportunity to mitigate any negative impact, by disallowing that particular regulation, that it can have on the industry, on safety, or on other issues. Again, it will also give the opportunity to the regulation making authority to enact an alternative regulation or to correct the defect and so on.
Proposed subsection 19.1(10) provides for a situation in which a minister has filed a motion to reject a proposed disallowance and the motion is not adopted. In that case, proposed subsection 19.1(9) would deem the regulation or other instruments to be revoked at the expiration of 30 days from the day on which the motion to reject the disallowance was considered but failed to obtain the approval of the House.
As members of the House of Commons, elected representatives of Canadians from coast to coast, it is our duty to protect democracy. It is incumbent upon all of us in the House, irrespective of political affiliation, to make the disallowance procedure more transparent and more effective.
This is a non-partisan issue. The last time the bill was in the House, it was the Liberal members who seconded it. All opposition parties in the committee are represented, including the governing party. On the other side, senators are there. We had a discussion about this. Our legal staff is involved in it and there is almost unanimous consent. I cannot say unanimous because I have not spoken to each and every member, but the members in the committee have an intention to have a disallowance procedure.
By providing a clear legislative basis for the current disallowance procedure, Bill C-205 would, first, allow Parliament's authority to extend to all instruments subject to review under the Statutory Instruments Act instead of only those made by the governor in council or a minister. Second, it would remove the necessity for additional action on the part of the regulation making authority in order to give effect to an order of the House that a regulation be revoked. How simple it would be if we had a disallowance procedure on a statutory footing.
Bill C-205 thus not only gives effect to recommendations made by numerous parliamentary committees that have studied the matter, but it would both strengthen the current disallowance procedure and make the procedure more effective by putting it on a statutory footing.
Members from across party lines, including senators, have voiced their concerns on the bill. I have support from small, medium sized and large businesses, various organizations and stakeholders, the Canadian Federation of Independent Business, the Canadian Manufacturers and Exporters and various Chambers of Commerce. There is wide support even in the industry.
I am certainly aware that regulations reforms are needed and that there is room for improvements and amendments and strengthening of the bill, which can take place when it goes to the committee. Let us send it to the committee.
I wish to thank the members from all parties who will be speaking to Bill C-205, as well as the many senators who are supporting the bill, including my co-chair of the Standing Joint Committee on the Scrutiny of Regulations, Senator Hervieux-Payette, who extended her support.
It is very important to restore transparency and democracy in parliament. This private member's bill is a non-partisan issue and I am optimistic that all members of the House will support it, as it has been a long overdue initiative.
I am sure that since this initiative is in the best interests of all parliamentarians and the public in general, members from all parties will enthusiastically support it and send it to committee for further action. I am open to recommendations and amendments to the bill.
Marlene Jennings: Mr. Speaker, I am pleased to have the opportunity to speak to Bill C-205, An Act to amend the Statutory Instruments Act (disallowance procedure for statutory instruments), introduced by the member for Surrey Central as Bill C-202 during the last session.
I would begin by echoing some of the comments made last June by the Parliamentary Secretary to the Minister of Justice when the previous bill, Bill C-202, was debated in the House. The present bill relates to the critical role that parliamentarians have to oversee the exercise of legislative powers that are delegated by Parliament. These powers are mainly delegated to government ministers, most often acting collectively in what is generally known as the governor in council. However, legislative powers are also delegated to individual ministers as well as to a wide range of other bodies.
It is important to appreciate that the delegation of power does not involve a surrender or relinquishment of power. Parliament can withdraw delegated powers at any time. It continues to be ultimately responsible for the exercise of these powers and accordingly has a mandate to monitor their exercise and ensure that they are used in a way that continues to meet the purposes for which they were delegated.
The Standing Joint Committee for the Scrutiny of Regulations has performed, and continues to perform, an invaluable service to the House and the Senate, as well as to the Canadian public generally, in its review of statutory instruments made under acts of parliament. Through its careful examination of these instruments, it provides this House with valuable assistance when it comes to the oversight of delegated legislation.
Chapter 14 of the Standing Orders reinforces this oversight role. It makes provision for what is often called the disallowance procedure for statutory instruments. This procedure involves the tabling of a report by the standing joint committee containing a resolution that a statutory instrument be revoked. If the resolution is adopted, it becomes an order of the House to the government to revoke the statutory instrument in question.
To date, I believe the disallowance procedure has been used to adopt a total of eight resolutions. The fact that the government has complied with all these resolutions is clear proof that the disallowance procedure in the Standing Orders is working well.
Today we are being asked to consider a bill that would significantly extend these procedures. It would amend the Statutory Instruments Act to include disallowance procedures similar to those that, as I have just mentioned, already exist in the Standing Orders of the House.
However, there are some important differences between the current disallowance procedures and those proposed in the bill, and these differences continue to raise serious concerns that I would once again like to draw to the attention of the House.
First, the bill proposes to move beyond the traditional role of holding the government accountable to the House. It proposes to have the House revoke statutory instruments itself. Another difference is that the proposed procedures would extend to all statutory instruments and not just to those made by the government, as is the case with the procedure in the Standing Orders.
I would now like to explore these differences and indicate why they raise concerns. As I have mentioned, the procedures in the bill provide that a resolution of the House would be effective to revoke a statutory instrument. Under the existing procedures in the Standing Orders, it is up to the government to decide whether and when to revoke a statutory instrument in response to a resolution.
I believe that decisions about whether or not to revoke a statutory instrument should remain with the government. It is responsible for making the instrument and it should be responsible for revoking it. This responsibility is owed to the Canadian people as well as to the House. The government is answerable to the House for its conduct, and it is answerable to the Canadian people by vote. A procedure that removes its responsibility is antithetical to the traditions of responsible government that underlie our parliamentary institutions.
This is an argument based on principle, but I would also argue that this is an argument against the bill which is based on practicality. Revocation by parliamentary resolution raises the prospect of gaps in the law. The procedures proposed by Bill C-205 are entirely negative in their consequences. They do not, and indeed cannot, entail the enactment of provisions to replace those that are struck down.
Yet there may often be a need for regulatory measures of some sort and if the disallowed measures are not appropriate, then obviously alternative provisions are needed to replace them. Under this legislation there is no provision for alternative provisions. The development of alternative provisions, that is, alternative statutory instruments or regulations, usually requires significant capacity to develop regulatory policy as well as a familiarity with the regulated community. This requires technical expertise and consultative processes that the government is putting and has put in position and provides. This is recognized by the very fact that Parliament has indeed delegated to the government the regulatory powers in question.
A further difficulty is the timeframe for revocation that Bill C-205 would put in place. Under this legislation, a statutory instrument would be revoked 30 days after the resolution is adopted, yet often much more time is required to develop regulatory measures. The government's regulatory policy requires extensive consultation with interested persons before a regulatory proposal is adopted. Then, proposed regulations have to be published in the Canada Gazette for a minimum of 30 days to allow those interested to comment and voice their concerns. These opportunities would be completely swept away under the rigid timeframe of the procedures proposed by Bill C-205.
A second main difference between the bill and the current procedures in the Standing Orders is that the bill would extend the disallowance procedures to non-ministerial regulations. It would provide that the disallowance procedures would apply to any statutory instrument. This would include a vast number of documents, many of which are made by bodies that operate independently of the government.
Let me provide the House with a few examples. We have administrative agencies, such as the CRTC and the Canadian Transport Commission that, under their legislation, have the ability and the right to effect such statutory instruments or regulations. Under Bill C-205 those regulations could be revoked within 30 days of having a resolution adopted.
Our courts, one of the three pillars of a democratic society in government, make rules of procedure. They would fall under and be captured by Bill C-205. What about the separation of the judiciary and government? Not under Bill C-205.
We have aboriginal law making bodies, such as Indian bands, agricultural marketing boards and local port authorities.
Although the current disallowance procedures are appropriate for regulations made by ministers of the Crown, it is not at all clear that they would be appropriate for the wide variety of other law-making bodies that make statutory instruments.
I would like to conclude by stating that the government, as is the Minister of Justice and his cabinet colleagues, is committed to addressing the concerns raised by the Standing Joint Committee for the Scrutiny of Regulations and ensuring that officials of their departments take these concerns every bit as seriously as they do.
The government is prepared to entertain any suggestion for improving the relationship between parliamentarians and the government. Lastly, it is my sincere belief that it would be far more advantageous to try to settle the concerns around delegated legislation within the framework of the existing mechanism of parliamentary scrutiny.
Lastly, if it is a Standing Order it is not court challengeable, whereas if it is a piece of legislation, it is.
Benoît Sauvageau: Mr. Speaker, listening to the member for Notre-Dame-de-Grâce—Lachine, I thought she was going to conclude by saying that we had the best regulatory system in the world, but she refrained from going so far. It may well be the only thing we do not have, since according to our colleagues opposite, we have the best of everything else.
All kidding aside, this is an interesting private member's bill. Despite being a technical bill, it is still interesting. In fact, it reveals a sensitivity, or an awareness of the lack of say that parliamentarians have in different committees or on different issues. Allow me to explain.
The bill introduced by the member of the Canadian Alliance, if it was boiled down to the essential, would allow for a disallowance procedure that would apply to all statutory instruments, subject to review and scrutiny by the Standing Joint Committee for the Scrutiny of Regulations. In so doing, this enactment would ensure that Parliament will have the opportunity to disallow any statutory instrument made pursuant to authority delegated by Parliament or made by or under the authority of the cabinet. Unless I am mistaken, this is how the current system would be changed under this legislation.
The way the Standing Joint Committee for the Scrutiny of Regulations currently operates is similar, as one would expect, to how other parliamentary committees operate. It is in this committee that my friend from the Canadian Alliance has experienced some frustration, as have members of the Bloc Quebecois and other opposition parties and often members of the governing party, and I will come back to this a little later. Therefore, committees sometimes unanimously come to the realization, after a bill has been passed and after several rounds of discussion here in Parliament, that the regulations that frame the legislation, or implement it, go beyond or against the discussions surrounding the bill, or its intent. In such cases, the regulations must be amended.
Officials—either unconsciously, or consciously— may have gone too far when drafting the regulations to frame or implement the legislation. The Standing Joint Committee for the Scrutiny of Regulations reviews these regulations and has seen that they sometimes infringe upon or go beyond the intent of the legislation, and overstep the value of the bill in question.
Like other committees, when we notice this, we issue a report that is tabled in the House. One can understand our frustration when, even if the report is adopted unanimously, the government, more often than not, says, “Thank you very much”. It then takes the report and shelves it and waits.
If specific regulations hinder the application or goes against the intent of legislation, it is our duty as parliamentarians, having debated it at first reading, second reading, in committee, and at third reading and having voted in this House on the intent or application of a specific piece of legislation, to say so. Take the Young Offenders Act. When we vote on and pass legislation such as the Young Offenders Act we have certain objectives. If the regulations go beyond what parliamentarians intended, then it only seems right to give those who passed the legislation the ability to repeal certain regulations. I have a hard time understanding the Liberals' opposition when they had agreed with Bill C-202. They woke up—I am not sure when or how—and are saying that, as far as Bill C-205 is concerned, they no longer agree.
It is difficult to understand how we can value our role as parliamentarians to pass legislation and entrust the application or regulation of this legislation to another level. That seems odd. However, this is not the first time and certainly will not be the last time that we will have difficulty understanding the consistency of the government's positions.
I have examples. The members of the Standing Committee on Procedure and House Affairs can decide unanimously or by a strong majority that private members' bills are votable. The Liberals, who make up the majority on this committee, vote on this. The government members who sit on this committee decide that private members' bills are votable. This is the committee's decision. Then, in the House of Commons, the government says no. Even though it is a majority or unanimous decision, it is set aside.
It is very frustrating for parliamentarians, especially when the 1993 and subsequent red books indicated that the power or role of parliamentarians must be increased and improved, and that the government then stubbornly refused to do so. When it comes to implementing regulations, it gets even more frustrating, because there is an obvious problem.
Examples were provided as a background to the bill, ain particular a report of the Joint Standing Committee for the Scrutiny of Regulations. The report, unanimously adopted, sought to repeal certain regulations. It was tabled over a year ago, over two years ago, and still nothing has been done. So, the act continues to be enforced erroneously. This situation must be rectified.
There is talk of tradition. There was a tradition about a hundred years ago that consisted of voting to send troops into combat. Now, the Liberals are ignoring this tradition and have decided, during a debate that did not lead to a vote, to send troops into combat. Sometimes traditions are fine, sometimes not. You cannot have it both ways.
If a House tradition shows how obsolete regulations are, it is our duty to correct this situation. In this regard, I fully understand the hon. member of the Canadian Alliance. This is our most difficult task because, as legislators, we must ensure that the laws we discuss and on which we vote will be enforced according to the spirit of the debate held in the House.
In committee, it is by improving the too often traditional and obsolete aspect of the British parliamentary system that we give meaning to the role of members. So, we clearly set out the scope of the acts we wish to propose. I find it difficult to understand why there would be any opposition to this bill.
I spoke to a certain aspect of this bill, and I would like to make one final point. Parliamentarians are also called upon to repeal regulations that go beyond the intention of a proposed bill or act. But this goes further; it indicates a problem with how we function as parliamentarians.
It goes further than this when there are debates on urgent and important issues. The role of an MP should also include the ability to vote on certain issues such as sending troops into combat in Iraq, which is of concern to us at this time.
We can see that the government's position is set and that a second UN Security Council resolution is not needed. We see how imminent the deployment of those troops is.
If the situation is being described as hypothetical, the fact that aircraft carriers, troops and military personnel are already being sent out, and that considerable sums are already being invested—it strikes me that the situation is less hypothetical than it is for the present Prime Minister—this is another aspect of our role of parliamentarians that ought to be taken into consideration in this debate.
It is in fact being described as a technical debate, a private member's bill that is technical in nature and concerns the disallowance of certain regulations. All of this addresses our role as legislators, that is to ensure that statutory instruments are properly enforced, but also our role as representatives of our constituents, a very strong majority of whom, in the case at hand, are opposed to sending troops into combat roles in Iraq. Our role as parliamentarians obliges the government to hear us out so that a vote may be taken on this.
I thank the hon. member for his work on the Standing Joint Committee on the Scrutiny of Regulations. I encourage him to continue with this clarification, and we are going to be in favour of his bill.
Peter Stoffer: Mr. Speaker, I rise today on behalf of the federal NDP to acknowledge the hon. member for Surrey Central for his persistence in bringing the bill before the House of Commons and his outreach across the country to get broad support for this bill. I am sure he can also add the federal NDP and provincial NDPs from across the country in this particular area.
A lot of the folks watching probably do not fully understand exactly what this bill would mean. I would like to go into it in brief detail so I myself can fully comprehend it as well.
The status quo ad hoc disallowance procedure applies only in the House of Commons and not the Senate. Second, disallowance is limited to statutory instruments made by the governor in council or by ministers of the crown.
Moreover, the SJCSOR disallowance report is not binding. It is left to the discretion of the minister of the crown or the governor in council to revoke or amend the regulations identified in the reports. Further, and this is very important, our courts are unable to enforce it. This creates a potential conflict between Parliament and the executive.
Amending the scope of the disallowance procedure and providing statutory footing will remedy these defects, making the procedure more transparent and effective. Even advocates for better parliamentary control of delegated legislation recommend that these two defects be remedied.
The purpose of Bill C-205 is to update the Statutory Instruments Act to afford the disallowance procedure legal statutory footing and to establish a disallowance procedure. Bill C-205 provides parliamentarians with an opportunity to strengthen, and this is something I really appreciate, our democratic process by establishing a procedure for disallowance and affording its legal footing in the House of Commons.
Parliamentarians must have the opportunity to reject a subordinate law made by a delegate of Parliament. The governor in council or a minister must act in the sense ordered by the House. While I say that, we had a motion in 1989 to eradicate child poverty by the year 2000. That was a motion and direction by Parliament, but still has not happened.
We had motions passed in the House regarding retrofitting of buildings and regarding businesses giving transit passes to their employees to reduce car traffic in the cities. These were motions passed by the House and directed at government to enforce, but it still has not been done.
Parliamentarians must protect democracy and therefore make the disallowance procedure more transparent, effective and enforceable. After 15 years, putting the present procedure on a statutory footing would not only ensure Parliament's effective control of the delegated legislation it authorizes, it would also authorize simplification of the current procedure.
Other commonwealth jurisdictions, including the provinces, are way ahead of the federal government on red tape reduction. Who could not use a little less red tape in our government?
Since 80% of the laws that Canadians face are through SI, this bill is of very significant public concern. Businesses, various organizations, stakeholders, the CFIB, Canadian manufacturers and exporters and chambers of commerce support the bill. I would say to the member for Surrey Central that many members of Parliament from various parties also support the bill.
It is very good when a cross-section of political thinking comes together on a particular bill. I only hope that on my own bill, Bill C-206, the caregivers compassionate leave bill, we will have the same consideration.
There is support for Bill C-205 and reduction of red tape is an integral part of the legislation. I thank the hon. member for Surrey Central. It is this type of bill that in many ways has ramifications down the road and a very positive effect. Anything that gives members of Parliament more empowerment to represent their constituents in the manner they choose is good for all of Parliament.
Gerald Keddy: Mr. Speaker, I am pleased to speak to the bill on behalf of the Progressive Conservative Party. Bill C-205 amends the Statutory Instruments Act.
Everywhere we look in legislation we see far too much red tape and far too many regulations brought in after the fact by ministerial decree. If in any way, shape or form the bill could help to reduce that overburden of unnecessary and burdensome regulations, then it certainly has nothing but support from the Progressive Conservative Party.
The view of the Progressive Conservative Party is that the government should work toward the co-operative elimination of excessive regulations, overlap, duplication and waste in the allocation of responsibilities among the federal, provincial and territorial governments.
Canada is probably the most overgoverned, overregulated and overlegislated country in the world. Worse than that, we create new legislation without reviewing the old legislation. It causes a multitude of problems for individuals, for small businesses, for industry and even for overlapping government departments, from the municipal to the provincial to the federal.
On top of our excessive dependence on regulations, we also pass bills without sunset clauses. Never is there a bill passed in the House in which there is a sunset clause. Apparently the government thinks that when a bill is passed by the House, it goes on forever.
Surely the majority of the bills that are passed in the House should contain a sunset clause, which would mean the bill would come up for review in five or 10 years. Perhaps in the case of the long gun registry the legislation should have come back for review after three months. Maybe then only $900 million would have been wasted instead of $1 billion.
There are many pieces of legislation that have been passed by this House which have never been looked at again and where regulations have been added which have caused an unnecessary burden on taxpayers. I have a favourite example, but it is not my favourite issue, of how wrong-headed the government has been in its excessive dependence on regulations and its abuse of regulations.
I would dare say the majority of members in the House are not aware of the fact that under the new CCRA regulations, if a person challenges Canada Customs and Revenue Agency after an audit and actually happens to win the challenge, there is nothing in the regulations that prevents CCRA from charging the person again under another section of the law. It can continue to do that until it wears the taxpayer down. Whether the taxpayer is innocent or not, the person will simply give up and pay the penalty, whatever it may be.
Certainly, if a person has been charged by CCRA in violation of back payment of taxes or whatever the issue may be and the person has challenged it, ended up at a court hearing and has actually been exonerated, that should be the end of it, but not with that agency. It simply makes a lateral move under a different regulation and the person is charged all over again, along with penalties, back taxes and everything that goes with it. It is ludicrous.
Looking at regulations per se, we all know that regulations cover just about all areas of our lives and impact on us daily. Especially on the fiscal side there is a hidden form of taxation oftentimes, which raises the cost of doing business and we end up paying a higher price for goods and services. Perhaps the government is using unnecessary regulations to jack up the price of goods and services and collecting a little more GST. It is not beyond the realm of the possible for that to be the case.
In light of the effect that unnecessary regulations have on the economy of the country and on the lives of our citizens, it does make good sense that all new regulations be scrutinized by a standing committee of the House. I applaud the fact that we have members of Parliament who are willing to sit on and are interested in those types of committees.
It is not the type of committee that everyone would want to sit on. I think it would be fairly detailed and may cause people to get bogged down once in a while, but it is an absolute necessity in a democracy to have some type of watchdog on government legislation and, therefore, the regulations that come in behind it.
There is no better place for it. I disagree vehemently with the member of the government who said that the government already did the checks and balances. There is no better set of checks and balances than a committee of the House that is actually empowered, has teeth, and can do the job. There is no reason that it cannot be done in a non-partisan way. To say any different than that I think is to cast aspersions against the independence of members of Parliament.
One other thing I would suggest with regard to the bill is that a Progressive Conservative government would ensure that all proposed regulations were put on a departmental website prior to being posted in the Canada Gazette. What would be wrong with that? Most people have access to the Internet today and are able to pull up a government website.
If farmers were expecting new regulations to come down from the Canadian Food Inspection Agency that would have a direct impact on the way they did business and perhaps more than likely increase the costs of being able to do business, then it would be good for those farmers to know ahead of time and actually be able to contact a member of Parliament or a member of the government and lobby those members to minimize the impact these regulations would have. They could use that information to convince the politicians that the regulations were not needed to begin with because a whole list of regulations already existed that did the same thing. There have been regulations on the books forever and no one ever thinks to look at them.
I wish to congratulate the member for Surrey Central because this is an important piece of legislation. I congratulate him on the fact that he was able to make this a votable item. I would certainly hope and actually expect all members of Parliament to look at this piece of legislation in a non-partisan way and recognize its value. It should be referred to committee, debated and amendments made if needed. It should be recognized for its value and worth, and hopefully it can be a contribution to this place.
Carole-Marie Allard: Mr. Speaker, it is a pleasure for me to speak today on Bill C-205, an act to amend the Statutory Instruments Act (disallowance procedure for statutory instruments), introduced by the member for Surrey Central.
First, I would like to mention a point that was put forward earlier in today's debate, regarding the fact that the current disallowance procedure, set out in the Standing Orders, works well.
This procedure is a very useful tool for Parliament to control the exercise of regulatory authority. This procedure has existed for some 15 years and, until now, only eight reports containing a resolution to revoke a statutory instrument have been adopted. Each time, the government implements the resolutions.
Since the disallowance procedure works well and the entrenchment of a disallowance procedure in the Statutory Instruments Act would be problematic for several reasons, I cannot support the bill introduced by the hon. member.
I would, however, like to go into greater detail regarding one of the government's concerns with this bill. It is important to point out that this bill goes much further than the current procedure set out in the Standing Orders.
Under current procedure, adoption of a resolution under Standing Order 123 constitutes an order of the House to revoke the statutory instrument in question. With this bill, adoption of the resolution would have the effect of automatically revoking the regulatory instrument in question on the thirtieth day following the day on which the motion was agreed to.
In our opinion, such an automatic revocation measure is fraught with consequences. It can cause a legal vacuum and hence serious problems to those administered under the regulatory instrument in question. This automatic revocation procedure deprives the government of the necessary flexibility legislative measures require.
First of all, it is possible that the government has not had time to gauge the impact of such an automatic revocation on the legal system in place. As well, the government might find itself hard pressed to fill this legal vacuum or to make the necessary adjustments to the system without having the time required to properly assess the impact of the revocation or new measures.
For example, there was a recent case involving the fresh fruit and vegetable regulations. This was reported on by the Standing Joint COmmittee on the Scrutiny of Regulations, in a report tabled in keeping with the disallowance procedure set out in the Standing Orders. The report in question was Report No. 67, tabled on June 7, 2001.
The Fresh Fruit and Vegetable Regulations set out the requirements governing the registration of establishments in which fresh produce is prepared and packed. Sections 57 and 58 of these regulations stipulate grounds for suspension or cancellation of the establishment's registration. These grounds were the same for both types of measures.
Since the grounds for suspension and cancellation were the same, the Standing Joint Committee on Scrutiny of Regulations felt that the establishment operators were at the mercy of the civil servant who is responsible for ensuring compliance with the regulations and which sanction will apply.
The committee decided on the revocation of one of the two provisions, namely section 58, which deals with the cancellation of registration.
The government complied with an order of the House and revoked section 58 of the Fresh Fruit and Vegetable Regulations. The revocation was registered under the designation SOR/2002-68.
This revocation came into effect some eight months after the committee's report was tabled.
It is important to note that, in this case, other regulations were affected, namely the Honey Regulations and the Maple Products Regulations, as they had similar provisions to those at the heart of the report. Therefore, there was a need to make similar changes to these regulations.
This is a good example of why the government needs some latitude, not only to avoid a legislative vacuum, but also to be able to adequately adjust the existing regulatory system.
In this example, it is clear that simply revoking the power to cancel registration would not effectively solve the problem on its own.
There must be time to consider an alternative solution and to implement new regulatory measures.
However, I believe that it is most important that the government have the flexibility needed to solve such issues. The government must have the time needed to pass new regulatory measures in order to fill the legal vacuum and to adjust the regulatory system that is in place.
The automatic disallowance process being proposed here today fails to meet this need for flexibility. Furthermore, passing new regulatory measures hastily to replace provisions that are automatically repealed may be very risky. It could also have terrible consequences, not only for government but more specifically for citizens.
I would like to point out that a great many regulations are legislative texts just like the bills that are debated here in the House. Therefore, it is very important that these texts be developed with the utmost care, for the benefit all Canadians.
In most cases, the government needs time to establish policy in order to implement regulations that are effective.
The Deputy Speaker: The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.
It being 2:30 p.m., the House stands adjourned until Monday next at 11 a.m. pursuant to Standing Order 24.
(The House adjourned at 2:31 p.m.)