36th Parliament, 1st Session
EDITED HANSARD • NUMBER 11
CONTENTS
Monday, October 6, 1997
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | GOVERNMENT ORDERS
|
1100
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | CANADA PENSION PLAN INVESTMENT BOARD
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Bill C-2. Second reading
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Alfonso Gagliano |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Tony Valeri |
1105
1110
1115
1120
1125
1130
1135
1140
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Preston Manning |
1145
1150
1155
1200
1205
1210
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Amendment
|
1215
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Pierre de Savoye |
1220
1225
1230
1235
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lorne Nystrom |
1240
1245
1250
1255
1300
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Paul Szabo |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Marlene Catterall |
1305
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Dick Harris |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jack Ramsay |
1310
1315
1320
1325
1330
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Mac Harb |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jean-Paul Marchand |
1335
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Darrel Stinson |
1340
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Marlene Catterall |
1345
1350
1355
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | STATEMENTS BY MEMBERS
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | SUPREME COURT OF CANADA
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Claudette Bradshaw |
1400
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | CANADA PENSION PLAN
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gary Lunn |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | TEACHERS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Finlay |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | MEMBER FOR LAVAL WEST
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mrs. Maud Debien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | FEDERATION OF CANADIAN MUNICIPALITIES
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Bryon Wilfert |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | TEACHERS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Karen Redman |
1405
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | THE FAMILY
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Paul Forseth |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | COMMUNITIES
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jerry Pickard |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | QUEBEC ECONOMY
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Benoît Sauvageau |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | WORLD TEACHERS DAY
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Yvon Charbonneau |
1410
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | HEALTH
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Grant Hill |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | AUDIO-VISUAL PRODUCTION
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Marlene Jennings |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | YUKON WEATHER STATION
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Louise Hardy |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | BLOC QUEBECOIS LEADER
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jacques Saada |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | NEWFOUNDLAND
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Norman Doyle |
1415
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ORAL QUESTION PERIOD
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | FOREIGN AFFAIRS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Preston Manning |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Preston Manning |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Preston Manning |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | POLITICAL CONTRIBUTIONS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Miss Deborah Grey |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
1420
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Miss Deborah Grey |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | FOREIGN AFFAIRS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gilles Duceppe |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gilles Duceppe |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mrs. Maud Debien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lloyd Axworthy |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mrs. Maud Debien |
1425
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lloyd Axworthy |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Alexa McDonough |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lloyd Axworthy |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Alexa McDonough |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lloyd Axworthy |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | GOVERNMENT GRANTS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Jean J. Charest |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Jean J. Charest |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Pierre S. Pettigrew |
1430
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | GOVERNMENT SERVICES
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Ken Epp |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Alfonso Gagliano |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Ken Epp |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Alfonso Gagliano |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | RCMP INVESTIGATIONS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Michel Gauthier |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Pierre S. Pettigrew |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Michel Gauthier |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Pierre S. Pettigrew |
1435
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | REVENUE CANADA
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jason Kenney |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Harbance Singh Dhaliwal |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jason Kenney |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Harbance Singh Dhaliwal |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | RCMP INVESTIGATIONS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gilles Duceppe |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gilles Duceppe |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ABORIGINAL AFFAIRS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Mike Scott |
1440
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Jane Stewart |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Mike Scott |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Jane Stewart |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | MONEY LAUNDERING
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Michel Bellehumeur |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Anne McLellan |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | HEALTH
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Beth Phinney |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Allan Rock |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | NATIONAL DEFENCE
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Art Hanger |
1445
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Arthur C. Eggleton |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Art Hanger |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Arthur C. Eggleton |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ENVIRONMENT
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rick Laliberte |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Christine Stewart |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rick Laliberte |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Christine Stewart |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | RCMP INVESTIGATIONS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. André Bachand |
1450
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Marcel Massé |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | POLITICAL CONTRIBUTIONS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter MacKay |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Pierre S. Pettigrew |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ACID RAIN
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Claude Drouin |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Christine Stewart |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | CANADA PENSION PLAN
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mrs. Diane Ablonczy |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | SATELLITE DISHES
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mrs. Francine Lalonde |
1455
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Walt Lastewka |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | HEALTH
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Judy Wasylycia-Leis |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Allan Rock |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ENVIRONMENT
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gerald Keddy |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Christine Stewart |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | MULTICULTURALISM
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Sarmite Bulte |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Hedy Fry |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | BRITISH COLUMBIA
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Randy White |
1500
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Right Hon. Jean Chrétien |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | PRESENCE IN GALLERY
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | The Speaker |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | POINTS OF ORDER
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Comments During Question Period
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Louise Hardy |
1505
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ROUTINE PROCEEDINGS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | RESERVE FORCE ACT
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Bill C-232. Introduction and first reading
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jim Hart |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | FINAL OFFER ARBITRATION IN RESPECT OF WEST COAST PORTS
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Bill C-233. Introduction and first reading
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Dale Johnston |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | CROWN LIABILITY AND PROCEEDINGS ACT
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Bill C-234. Introduction and first reading
|
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Art Hanger |
1510
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | COMPETITION ACT
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Bill C-235. Introduction and first reading
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Dan McTeague |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | PETITIONS
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | National Unity
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Randy White |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Rail Service
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Stan Dromisky |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Highways
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Dale Johnston |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Food and Drugs Act
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Adams |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Penitentiaries
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Adams |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | DNA Data bank
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Duncan |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | The Family
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Duncan |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Criminal Code
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Duncan |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Goods and Services Tax
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mrs. Jean Augustine |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | The Family
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mrs. Jean Augustine |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | QUESTIONS ON THE ORDER PAPER
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Adams |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | GOVERNMENT ORDERS
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | CANADA PENSION PLAN INVESTMENT BOARD ACT
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Bill C-2. Second reading
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Marlene Catterall |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jason Kenney |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Werner Schmidt |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Paul Szabo |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Deepak Obhrai |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mrs. Diane Ablonczy |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Murray Calder |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Werner Schmidt |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Dick Harris |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Alex Shepherd |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jason Kenney |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Pierre de Savoye |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Dick Harris |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mrs. Francine Lalonde |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Pierre de Savoye |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gary Pillitteri |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Ronald J. Duhamel |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Nelson Riis |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Murray Calder |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Dick Harris |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Pierre de Savoye |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Paul Szabo |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jean Dubé |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Bonnie Brown |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jim Jones |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Stoffer |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Paul Szabo |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jerry Pickard |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ADJOURNMENT PROCEEDINGS
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Government Expenditures
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gilles Bernier |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Richardson |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Fisheries
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Stoffer |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Wayne Easter |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Foreign Affairs
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Preston Manning |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Ted McWhinney |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Foreign Affairs
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Bob Mills |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Ted McWhinney |
![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Foreign Affairs
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Miss Deborah Grey |
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![V](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Ted McWhinney |
(Official Version)
EDITED HANSARD • NUMBER 11
![](/web/20061116191339im_/http://www2.parl.gc.ca/common/images/crest2.gif)
HOUSE OF COMMONS
Monday, October 6, 1997
The House met at 11 a.m.
Prayers
GOVERNMENT ORDERS
1100
[English]
CANADA PENSION PLAN INVESTMENT BOARD
Hon. Alfonso Gagliano (for the Minister of Finance) moved
that Bill C-2, an act to establish the Canada Pension Plan
Investment Board and to amend the Canada Pension Plan and the Old
Age Security Act and to make consequential amendments to other
acts, be read the second time and referred to a committee.
Mr. Tony Valeri (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, today it is my privilege to
begin debate on Bill C-2, legislation that will secure the Canada
pension plan for Canadians now and in the future.
This legislation will enact the joint federal-provincial
agreement reached last February. It reflects a consensus for
change and a shared commitment to ensure that the CPP is there,
that it is sustainable and affordable for today's working
Canadians and for our children.
As joint stewards of the Canada pension plan, the federal
government and the provinces are squarely facing up to our
collective responsibilities to deal now with an issue facing us
down the road when the baby boom generation starts to retire.
In his February 1995 report, the chief actuary clearly showed
that without modifications to the Canada pension plan, the CPP
fund would be exhausted by 2015 and that contribution rates would
have to soar to over 14 percent to cover the rapid growth in cost.
In public consultations held in every province and territory
across this country last year, Canadians told their governments
they want to be able to count on their CPP pensions. They told
us they want the CPP fixed now and they want it fixed right.
They did not want it privatized and they certainly did not want
it scrapped. They told us to do this in a way that does not pass
on an insupportable cost burden to younger generations.
A full report on the consultations was made public last year and
Canadians were clear. They told their governments to preserve
the CPP by strengthening its financing, by improving its
investment practices and by moderating the growing costs of
benefits.
The changes reflect just that. This legislation demonstrates
that we are acting decisively to fulfil our commitment to secure
this pillar of Canada's retirement income system.
What have we done to strengthen the plan's financing? When CPP
was introduced in 1966 it was financed essentially on a pay as
you go basis.
1105
At that time, the prospects of rapid growth and real wages and
labour force participation promised that the CPP could be
sustained and remain affordable.
With low interest rates there was little value to be gained from
building up large reserve funds. The pay as you go system made
sense given these circumstances. Since then, the slowdown in
wage and workforce growth and higher real interest rates have
completely changed the circumstances in which the CPP must be
financed.
The pay as you go financing is no longer fair and no longer
appropriate. Building up a larger fund, or what has been recently
called and referred to as fuller funding, and earning a higher
rate of return through investment in the market are now necessary
to help pay for the rapidly growing costs that will occur once
the baby boomers begin to retire.
Accordingly, we have made a fundamental change in the financing
of the Canada pension plan. The CPP will move from pay as you go
financing with a small contingency reserve to fuller funding to
build a substantially larger reserve fund.
The fund will grow in value from about two years of benefits
currently to about four to five years of benefits. To do this
beginning this year we will start accelerating the pace of
contribution rate increases beyond what is currently legislated
so that people begin to cover the cost of their own benefits and
stop passing increasing shortfalls on to the next generation.
CPP contribution rates will increase in steps over the next six
years until 2003, from the current legislated rate of 5.85
percent to 9.9 percent of contributory earnings, and then will
remain there steady.
This 9.9 percent rate is projected to be sufficient to sustain
the CPP with no further rate increases. It will pay for an
individual's own benefits plus the unfunded liability. It is the
fairest way to honour our commitments. The costs of pensions
will be spread evenly and fairly across generations.
In 1997 the combined contribution rate for employees will
increase from 5.85 percent of covered earnings to 6 percent. The
increase for a worker at the average range will total no more
than $24.
We have all read the papers and watched the news so let me take
this opportunity to address some of these erroneous headlines and
some erroneous statements by some hon. members, some that I heard
a few moments ago.
They claim that this is the biggest tax grab in history and that
CPP rates will jump by 73 percent. We hear it here and I would
ask that the hon. members would come very soon to provide the
accurate information Canadians are asking for.
This is not a tax grab. Contributions to the Canada pension
plan are a component of Canadians savings toward pensions.
I know it is difficult for members of the opposition to
understand that. They go into a separate fund, not government
revenues, and because of recent changes the Canadian people have
suggested will now be invested like other pension plans.
Let us get the facts straight. Contributions will rise 73
percent over the next six years to 9.9 percent but they will not
rise to the 14.2 percent that the chief actuary indicated would
be necessary if we did not fix the Canada pension plan.
This 9.9 percent rate is also substantially lower than the
Reform Party proposal to replace the CPP by a system of mandatory
RRSPs. Under the Reform proposal, the next generation or two of
Canadians would have to pay twice, once for their own pensions
and again for pensions of those who are already retired.
1110
Yes, 9.9 percent is a real cost and no one denies it. By paying
that cost now we will save ourselves and our children from
larger, more expensive hikes in the future. By moving now,
premiums will not have to exceed 9.9 percent.
Under the existing legislation CPP contribution rates are
already slated to go beyond 9.9 percent. They are scheduled to
reach 10.1 percent in 2016.
The chief actuary has shown that if we do not move fast the CPP
will be bankrupt in 2015 and the rates will have to soar to 14.2
percent by 2030. That is a 240 percent increase. Only if we act
responsibly now can we avoid bankruptcy and truly intolerable CPP
rates later; a 73 percent increase now when a number of
generations are sharing the burden or a 240 percent increase for
our children's generation. I submit that we have made the right
choice. Let us start paying our way. We owe it to our children
and we owe it to our grandchildren.
Let me point out that the problems we are facing with our
pension system are not unique to Canada. Many OECD countries are
also making changes so that their pension systems are more
sustainable. Some international organizations have recommended
moving toward the increased funding of public plans and that is
exactly what we are doing.
With this new fuller funding approach the CPP fund will grow
substantially over the next two decades. A new investment policy
therefore was necessary to improve the way CPP funds are invested
and to secure the best possible return for plan members.
Up until now CPP contributions not needed to pay for benefits
have been loaned mainly to the provinces at the federal
government's interest rate on long term bonds. In this
legislation, CPP funds will now be invested in a diversified
portfolio of securities, prudently and at arm's length from
government. This means that CPP funds could be invested in
stocks, in bonds, including provincial bonds, and also in
mortgages. Instead of being loaned in their entirety to the
provinces, we are now in a position with the passing of this
legislation to take our investment philosophy of the CPP and make
it more market oriented. It is consistent with investment
policies in most public and private pension plans in Canada.
Based on prudent assumptions the CPP can secure an average long
run return of almost 4 percent a year above the rate of
inflation. That compares with only 2.5 per cent assumed under the
current policy by the chief actuary. These higher returns will be
an important plus since members on this side of the House and on
the other side clearly acknowledge that every dollar that is not
earned in investment requires a contribution from Canadians. The
higher returns will be an important plus since we know that
working Canadians want to ensure that they contribute to a plan
that provides an effective and efficient rate of return and is
sustainable in the long run.
During the cross-Canada consultations Canadians told us they
wanted the Canada pension plan to run like a private pension
plan. Accordingly, the fund will be managed independently from
government by a 12 member investment board. This investment
board is accountable to Canadians and their governments through
regular reports.
The board will be subject to investment rules similar to other
public and private funds in Canada. Therefore the transparency
for Canada pension plan of the future is that same transparency
that is in private plans throughout the rest of Canada.
1115
The foreign property limit for pension funds will strictly apply
to the Canada pension plan, but there are some transitional
issues that need to be addressed. To ensure the fund's smooth
entry into the market, all of the board's domestic equity
investments will be selected passively, mirroring broad market
indices. This passive approach will be re-evaluated at the next
Canada pension plan review scheduled to begin in 1999.
From now on—I am sure the members of the opposition will agree
with this—whenever provincial governments borrow from the Canada
pension plan they will pay the same rate of interest as they do
on their market borrowings.
As a transitional measure reflecting historical arrangements,
provinces will have the option of rolling over their existing CPP
borrowings at maturity, and at market rates, for another 20-year
term. For the first three years provinces will also have access
to 50 percent of the new CPP funds that the board chooses to
invest in bonds. But after this initial period new Canada
pension plan funds offered to provinces at market rates will be
in line with the proportion of provincial bonds held by pension
funds in general. This will ensure that the funds invested in
provincial securities is consistent with market practice.
In order to moderate rising CPP costs we have tightened the
administration of benefits and changed the way some benefits are
calculated. First, let me tell you what remains the same.
Anyone currently receiving Canada pension plan benefits, be it
retirement pensions, disability benefits, or survivor benefits,
can rest assured that they will not see these benefits affected
in any way. All benefits, now and in the future, will remain
fully indexed to inflation. The ages of early retirement, normal
retirement, or late retirement all remain unchanged.
What has changed? Let me describe them.
Effective January 1, 1998 retirement pensions will be based on
the average of the year's maximum pensionable earnings in the
last five years prior to starting the pension. In the past they
were based on a three-year average. The amount of the pension
will continue to be dependent on how much and for how long a
person contributes to the plan.
The administration of disability benefits will be further
improved. The appeal process will be streamlined and the
legislation will be applied more consistently.
The administration of disability benefits and the changes I have
just proposed address concerns that have been raised about the
rapidly escalating costs of the disability benefits.
To be eligible for disability benefits workers must show a
greater attachment to the labour force. They must have made CPP
contributions in four of the last six years prior to becoming
disabled. At present a person needs to make as little as two CPP
contributions during the course of the three years prior to
applying and qualifying for disability benefits.
During the consultation there was discussion—and Canadians have
provided guidance to the government—that disability benefits
should be removed from the Canada pension plan. That is not what
Canadians have told their governments over the consultation
period. They have said the government must keep disability as a
part of the Canada pension plan, but they did call for
consistency across the board in the administration of disability
benefits and that in fact is what this legislation is proposing.
1120
When disability benefits are converted into retirement pensions
at age 65 in the future, they will be based on the year's maximum
pensionable earnings at the time of disablement with subsequent
price indexing rather than on the YMPE at age 65. This measure
is consistent with how other CPP benefits are calculated and will
apply only to people not yet age 65.
The rules for combining the survivor and disability benefits and
the survivor and retirement benefits will be largely the same as
those in existence before 1987. Changes will limit the extent to
which these benefits can be added together.
As part of the CPP consultations and review there were
discussions about eliminating the death benefit. The death
benefit will continue to be equal to six months of retirement
benefits, but up to a maximum of $2,500 rather than the current
$3,580. The option to eliminate the death benefit was rejected by
the federal and provincial governments. There are those who would
purport to eliminate that benefit.
We listened to Canadians, we ensured fairness and balance in the
review of the Canada pension plan and the legislation that is
being put forward. I submit that the changes I have outlined
propose moderate and balanced changes. We have minimized the
impact of these changes on vulnerable Canadians. There is no one
group that has been singled out or forced to shoulder an undue
burden.
During the national consultations on the CPP, Canadians told
their governments to go easy on changes to the benefits. There
are those who would gut the benefits. That is not what Canadians
have told us.
We have reduced the contribution rate to 9.9 percent from 14.2
percent. There are those in the House who would argue that 9.9
percent is too high. They are arguing in a vacuum. The chief
actuary who has the responsibility of reviewing the Canada
pension plan has clearly stated that we need to act now to ensure
that the plan remains sustainable and affordable for future
generations. We could sit back and do nothing and watch the
premiums escalate as per the legislative timetable until we get
to a point where we would experience a 240 percent increase.
That is not tolerable. That is certainly not what the government
is prepared to do for future generations.
We will ensure that the Canada pension plan is there for future
generations, that it is there at an affordable premium and that
the benefits are guaranteed for those future generations. The
result is that some 75 percent of the reduction has been made on
the financing side and only 25 percent is on the benefit side.
I am quite positive the members in this House are very aware
that consultation on the Canada pension plan has been ongoing for
well over a year. Canadians have had input. They have given
guidance to the government on this legislation. They have said
very clearly to fix the Canada pension plan, ensure that it is
sustainable and ensure that you do not gut the benefits at all
costs.
1125
What has been done? We have reflected on what Canadians have
said. We have put forward legislation which breaks down like
this: 75 percent is on the financing side and 25 percent is on
the benefit side.
We are also acting to improve the stewardship of the Canada
pension plan and to enhance public accountability. Once again
Canadians have been consulted and Canadians have spoken.
Members across the way always talk about the transparency and
the accountability that is required in legislation. I look
forward to the interventions of the official opposition and other
parties. I hope they will point to the fact that this
legislation had input from Canadians. This legislation speaks to
public accountability and transparency. It is what Canadians
have asked for and it is what Canadians are getting. Let me make
it perfectly clear that members of the government are determined
that the Canada pension plan will not be put at risk again.
The changes in the legislation have been put forward so that
Canadians do not have to suffer the uncertainty which has been
purported by opposition members. Canadians will not have to ask
the question “Will the Canada pension plan be there for me?”
The Canada pension plan will be there for members of the House,
for young people, for young workers, for my children, for my
children's children.
The changes reflect what Canadians have asked for. We have not
made those changes for the sake of making changes. We have made
them to sustain the plan to ensure it will be there for future
generations.
Let us talk about the accountability and transparency which will
be part of the new legislation.
Canadians will start to receive regular statements on the
pensions they are earning. We intend to provide annual
statements to all contributors as soon as it is feasible.
Canadians will receive an annual statement which will show how
the Canada pension plan is progressing.
Federal-provincial reviews will take place every three years,
instead of every five. In fact, 1999 will be the beginning of
the next set of consultations and review. The point of this
change is to ensure that the Canada pension plan will be closely
scrutinized. Canadians will have an opportunity to continue to
monitor what is going on with their Canada pension plan.
The Canada pension plan investment board will provide quarterly
financial statements and annual reports on the performance of the
fund. I am sure that when the members of the official opposition
speak they will point to this change and note that it is
reflective of what Canadians have said and that it is a positive
change.
1130
Let me say this slowly. It is what Canadians have said. The
CPP investment board will provide quarterly financial statements.
It will hold public meetings at least every two years in each
participating province: transparency and accountability.
Members of the opposition, members of Parliament and Canadians at
large will have opportunity to speak at those public meetings.
Annual reports will provide a more complete information package
and will explain how administrative problems are being addressed.
As with all plans, public and private plans, there are always
administrative challenges. The annual report will list the
challenge and state how the challenge is being dealt with: again
transparency and accountability.
Canadians told us quite frankly to treat them like members of
the pension plan. There is no denying that in the past Canadians
have not been part of the changes to the Canada pension plan the
way they will be in the future. We are doing exactly that. We
are treating Canadians like members of the pension plan. The
stewardship of the plan will be improved and public
accountability will be strengthened.
There is no doubt Bill C-2 provides a strong and balanced
package of changes that will restore the sustainability of the
Canada pension plan and make it fairer and more affordable for
future generations of Canadians. It will make it more
affordable, sustainable and fairer not just for workers when they
retire but equally for working Canadians and their families.
Without diminishing what we have achieved with the legislation I
would like to point out some other ideas the federal and
provincial governments will look at to ensure the structure of
the Canada pension plan keeps up with changing times. It will
evolve the way our society evolves. These particular issues were
either beyond the scope of the latest CPP statutory review, or
they may have been raised too late or after consultations were
complete. It is our intention to examine these issues over the
course of the next two years.
What are the issues? It is important to get them on record so
that Canadians know the consultation with respect to the CPP is
just beginning and will be ongoing. As issues come forward and
develop the consultation and the input of Canadians will be
reflected in future legislation.
Some issues are reviewing survivor benefits to make sure they
reflect changing realities in the needs of today's families and
considering the mandatory splitting of pension credits between
spouses during marriage. This is very interesting. It looks at
the work to retirement transition including the possibility of
providing partial CPP pensions to Canadians wanting to make a
gradual transition to retirement. These issues are coming from
Canadians, issues they want dealt with in the Canadian pension
plan.
We will continue to examine the way in which people are
receiving retirement income and employment insurance benefits. I
am sure members of the official opposition will appreciate, given
the fact that most of them are from the beautiful province of
British Columbia, the review of the British Columbia proposal,
which was actually made after the CPP consultations were
complete. The proposal is to extend CPP coverage up the income
scale by raising the limit on pensionable earnings.
I emphasize and hope for concurrence from the official
opposition that any change to the Canada pension plan that needs
to be considered will only be considered so that an increase in
the steady rate of 9.9 percent will not be required.
1135
Let me go further than that and state that any future benefit
improvements to the Canada pension plan will be fully funded. I
will repeat this very slowly. They will be fully funded. It is
what Canadians asked for and it is what we will do.
Last February in the House of Commons the Minister of Finance
tabled the first draft of the CPP legislation. In response to
the comments received, further refinements were made to the
legislation and revised draft legislation was released in July
for further comment.
The measures proposed in the bill today will become law once the
legislation is passed by parliament and supporting orders in
council are received from the provinces that are party to last
February's agreement. This will permit the changes to take
effect on January 1, 1998.
It is an important milestone for Canadians. The changes to the
plan will allow every Canadian to feel confident about the Canada
pension plan once again. I continue to repeat that because it is
important for Canadians in the galleries, for Canadians watching
on TV and for Canadians in our constituencies. I encourage
members of the House to communicate the message that the Canada
pension plan is here and will be here when Canadians need it.
Let me assure hon. members the changes contained in Bill C-2
tackle the problems facing the Canada pension plan. In order to
accomplish this, federal and provincial governments consulted
extensively with Canadians from coast to coast to coast. It is
legislation that reflects what Canadians said during the
consultations and it is legislation that will ensure the
continuity of the Canada pension plan.
I would also like to add that the federal government is
currently engaged in broad based dialogue with a number of groups
on other aspects of Canada's retirement income system. Not only
are we listening to Canadians but we are also acting to ensure
that our policy reflects their concerns.
With respect to the broad based dialogue, as I have been out
talking with constituents in my riding and with Canadians right
across the country the one message that continues to come back as
a result of their experience with the broad based consultation on
the Canada pension plan is that they want a broad based dialogue
on the pillars of the retirement income system.
They no longer want to see government reacting. They want to
see government engaging Canadians with respect to the retirement
income system. They want to see governments reflecting in their
legislation what Canadians are saying through a consultation
process. The first example is the Canada pension plan changes in
Bill C-2 which is at second reading and will go to the Standing
Committee on Finance.
Securing Canada's retirement income system is a priority. It is
a priority for Canadians. It is a priority for all members of
the House. It is a priority for members of the official
opposition, members of other opposition parties and members of
government.
Our approach was different. It was one where we consulted
Canadians. We are taking a very balanced approach to ensure we
are not just gutting the benefits for the sake of trying to
achieve some objective out there that is sometimes reflected in
the House. It is a priority of the government.
1140
Let me say clearly to members of the opposition, to Canadians in
the galleries and to Canadians watching TV that Canada's
retirement income system remains at the top of the government's
agenda.
Mr. Preston Manning (Leader of the Opposition, Ref.): Mr.
Speaker, it is a privilege to participate in the debate on Bill
C-2, an act to establish the Canada pension plan investment board
and to amend the Canada pension plan, the Old Age Security Act
and other related acts.
I begin by commending the parliamentary secretary on his speech
and the finance department on the enormous amount of background
information it provided to members on this subject. It is a
complex one and we appreciate the information.
I am also pleased to hear the parliamentary secretary attach
great value to public consultations, certainly something that we
on this side of the House value. To see a shift from pay as you
go to a more fully funded plan is better late than never.
I heard the parliamentary secretary raise a number of straw men
that he proceeded to knock down, which is not that difficult to
do. He talked about people who wanted to gut the benefits to the
plan. We heard no one advocate gutting the benefits of the
Canada pension plan or other pillars of the Canadian pension
system.
However I suggest this setting up of straw men is simply a way
of disguising or trying to mask some of the more real defects of
the bill. Those are the defects I would like to get into. Indeed
it is the duty of the official opposition to point out these
defects.
I want to point out a fundamental defect in the bill which
characterizes most of the legislation brought by the government
to the House, that is the absence of an appropriate preamble and
a declaration of the intent of the bill.
The absence of a declaration of intent, precisely what is the
intent of parliament in passing such a bill if it does so,
concerns me for two reasons. The first is a legal reason. Every
time parliament passes any statute which does not within itself
make crystal clear the intent of parliament, we surrender power
from the legislation arm to the judicial arm. This is something
we ought not to do as a matter of principle.
The second reason for stating our intent is much more profound
and down to earth. The bureaucrats who designed the bill, and
perhaps the minister and parliamentary secretary themselves, will
say that its principal intent is to establish and fund the Canada
pension plan investment board. However that is only the narrow,
technical, bureaucratic intent.
The real intent is or ought to be to care for Canadians in their
retirement years, to provide adequate income for seniors as well
as income for disabled persons. The ultimate intent of the bill
therefore is not fiscal or technical. The ultimate intent is
social and humane.
I remind other hon. members, as we get into the technical
details of investment boards fiduciary responsibilities, rates of
return, contribution rates and pensionable earnings, to keep
upper most in their minds the people for whom CPP is intended. To
help me do this I have written on my pad—and I urge other
members to do it—a few names of people whose lives will be
profoundly affected by how the pension system is organized and to
keep them in front of us as we debate the bill.
I know of people, for example, among my own relatives and
certainly in my own riding which has a higher percentage of
seniors than any other riding in Calgary for whom CPP and the old
age security is their principal source of income.
When I look at the bill I am reminded that we are dealing with
the principal source of income of people who are no longer in a
position to add to their income. All of us know of middle aged
and elderly women who invested most of their lives in raising
children in the home and who entered the so-called official
workplace, as if the home were not a workplace, late in life or
not at all and therefore qualify for little or no CPP benefits.
1145
I know the government says it addresses their needs through the
seniors benefit but we all know this is often too little too
late. We should keep the needs of these women uppermost as we
consider pension reform.
Most of us have young people in our family—I have five
children—who are working if they are fortunate enough to find
work. Often they are working as hard as they possibly can. We
know the skepticism with which young people view the Canada
pension plan. They do not believe the minister's assurance that
the contribution rates will be kept below 10 percent. They do
not believe there will be a meaningful government pension for
them at the end of the day.
A recent book entitled Youthquake by an up and coming young
Canadian, Ezra Levant, cites a survey that shows over 30 percent
of Canadians under 39 years of age do not believe they will
receive a Canada pension plan pension at all despite the
assurances from the government and from politicians.
In addition these young people do not consider $8,800 a year a
meaningful pension when investment of the same contributions in
an RRSP over the same period of time would give them a pension of
$24,000 a year. They fear that the reform of the CPP is just
another huge intergenerational transfer of wealth.
I suggest we write down on our pads the names of some of those
young people and keep their concerns in mind when we analyse and
review this bill. Let each of us also write down the names of
several disabled persons in our families and constituencies who
are absolutely dependent in many cases on the disability income
provisions of CPP. Let us keep those people in mind as we debate
the bill.
I think I have made my point that the ultimate intent of the
bill before us though regrettably not stated is to care for
people and to provide income to allow people to care for
themselves. The technical parts of the bill, essential as they
are, are simply a means to that end.
Let me turn to another aspect of the bill, one of the most
important ones and one of the ones completely neglected by the
parliamentary secretary in his presentation. I am surprised that
the finance department let the parliamentary secretary get away
with this omission.
If this bill is adopted and if we accept even half of the
minister's glowing predictions of its effects, there is no
question it will distribute substantial benefits to Canadians.
Those benefits and the impact of this bill upon them are listed
in the CPP legislation briefing book issued on September 25, 1997
and I need not enumerate them here.
As the official opposition it is our duty to hold the government
accountable for effects of its legislation which it may wish to
ignore, or which it may wish the public to ignore because those
effects are negative.
Frankly I find it astounding that a government which has said
that its number one priority is jobs is putting forward a bill
that affects the paycheques of most employees in this country and
affects the payrolls of most employers in this country and has
not offered a single substantive word on the real employment
effects of the payroll tax hike required to fund the CPP
investment board established by this bill.
We know the government's view on this subject has changed since
it was in opposition. It has been repeated in the briefing book
and was repeated by the parliamentary secretary this morning. I
want to read it because it is amusing, that “CPP contributions
are savings toward pensions. They are not a tax. They do not go
into the government's revenues to be spent”. The official
opposition and most important most Canadians reject this view on
three principal grounds.
First it is completely inconsistent with the previously stated
position of the Liberal Party itself. When the Tory government
raised CPP premiums six times from 3.6 percent to 5 percent over
the period 1987 to 1993, the Liberals then in opposition labelled
these increases as tax hikes. It cannot be said that CPP premium
increases are a tax increase when Tories do it but not when
Liberals do it. This is politically motivated nonsense.
Second the government's position that CPP contributions are not
payroll taxes is completely inconsistent with the views of the
employers and employees who make the CPP contributions. Unions,
business organizations like the CFIB, in their discussions and
representations to governments, finance committees and to members
of the House, routinely refer to CPP contributions as payroll
taxes. If the people who are making these payments feel it is a
tax, then it is a tax and should be regarded by this House as a
tax, regardless of what government officials or its press
officials now choose to call it.
1150
Third the government's view that the 77 percent hike in CPP premiums
proposed to fund the CPP investment fund is not a tax is flatly
contradicted by previously published reports of the government
itself, including the finance department and its advisers. Let me
just read into the record some statements by government officials
talking about what the CPP premium contributions are:
Joe Italiano of the economic analysis and forecasting division
of the Department of Finance in a paper dated April 25, 1995:
“Employer's contributions to CPP/QPP are part of compulsory
payroll taxes. The share of all such taxes in voluntary labour
income, a term which can be interpreted as an effective payroll
tax rate” and he goes on and on.
In 1996 a study was done by Lin, Picot and Beach. Beach is a
professor of economics at Queen's University; Picot and Lin are
with the business and labour market analysis division of
Statistics Canada. The study states: “Payroll taxes have four
major components: UI premiums; workers compensation premiums;
the provincial health and post-secondary education tax; and
CPP/QPP premiums”. Statistics Canada provides all the background
information.
Another study by Department of Finance officials Lori
Marchildon, Tim Sargent and Joe Ruggeri in March 1996 classified
CPP premiums as payroll taxes and found that employer payroll
taxes invariably lead to a rise in the employer's labour costs in
the short run and a reduction in employment.
There is an article by Jack Mintz, chairman of the government's
own technical committee on business taxation, Clifford Clark,
visiting economist at the Department of Finance, and Mr. Chen of
the University of Toronto, another economist. They write that
the federal unemployment insurance and Canada pension plan
payroll taxes are applied on businesses and individuals.
Jonathan Kesselman, professor of Economics at the University of
British Columbia, in the Canadian Tax Journal in 1996, a
journal which is often quoted by the Minister of Finance in the
House writes that “the distinguishing trait of all payroll taxes
is that they apply to a base of labour earnings only”. Kesselman
goes on to write that “Canada has perhaps the most diverse range
of payroll taxes of any country. At the national level there are
benefit linked contributions to social security in programs of
unemployment insurance and the Canada pension plan”.
In other words, in the opinion of people who advise the
Department of Finance, this is a tax hike.
The increase in CPP premiums from 5.6 percent in 1996 to 9.9
percent in the year 2003 is not only a tax hike, it is a tax hike
of monumental proportions, the biggest single tax hike in
Canada's history. The maximum employee contribution will rise
from $893.20 in 1996 to $1,635 in the year 2003, an increase of
$741.80 a year or 83 per cent. A person who started working and
contributing to CPP in 1996 at age 20 and continues to work until
age 65 earning the average industrial wage which we assume to
grow at 2 percent per year before inflation, will pay out
$119,193 in CPP premiums over their lifetime.
Moreover in its own documents the government admits that there
can never be absolute guarantees that the 9.9 percent rate is the
highest the rate will ever go. Members will recall back in the
1960s and 1970s when this plan was put together, Liberal
politicians stood in front of public audiences and swore that the
contribution rates would never go over 5 percent. Of what value
were those commitments? They were not worth the powder to blow
them up.
The CPP increase represents a tax hike, to put it in other
terms, of $400 million in 1997, $900 million in 1998, $1.8
billion in 1999, $5 billion in 2001, and as much as $10 billion
by the year 2005, all in constant 1997 dollars. The CPP premium
increases are unquestionably a payroll tax hike.
1155
That is not all the bad news. What is the principal negative
effect of payroll tax increases? They kill jobs. This is not
simply the view of the Reform Party. This is not simply the view
of business people and workers, although that should be
sufficient for the government to take heed. This is also the
view of the Department of Finance and its advisers. Let me read
into the record some of the evidence of that.
After discussing increases in CPP contribution rates, Joe
Italiano whom I quoted a few moments ago wrote these words:
“These increases have had and will continue to have a negative
impact on the labour force. By 1993”—he was writing just
before that period—“the rise in contributions by employers and
employees had reduced employment and the participation rate in
the economy by nearly 26,000 jobs and .12 percentage points
respectively”.
The 1996 Department of Finance study by Marchildon, Sargent and
Ruggeri classified CPP premiums as payroll taxes and found that
“employer payroll taxes invariably lead to a rise in employer's
labour costs in the short run and a reduction in employment”.
The authors go on to state that employers will bear from 50
percent to as much as 100 percent of the tax, which implies a
direct reduction in employment as a result of the payroll tax.
There is the Department of Finance paper entitled “Explaining
the Jobless Recovery” by Cozier and Mang which was produced
within the economic studies and policy analysis division. The
authors found that the main cause of the jobless recovery has
been excessively high wage growth. They continued by saying that
large increases in payroll taxes, like UI premiums, CPP and QPP
contributed to escalating labour costs over this period. Cozier
and Mang wrote that payroll tax increases would therefore have
lowered cumulative employment growth over the recovery by just
under one percentage point. This represents just over 100,000
jobs that would have been created if payroll taxes had not been
increased.
I do not want to bore the House but let me quote one more
Department of Finance economist. F. Weldon from the economic
studies and policy analysis division of the department wrote this
in “The Rising Burden of Payroll Taxes in Canada” in 1993:
“The long run effect of a one percentage point increase in the
effective rate of payroll taxes is estimated to be a decline of
nearly 1 percent in employment”. A 1 percent decline in
employment represents 140,000 jobs. Weldon wrote “These payroll
tax increases can have a sizeable and permanent negative impact
on the level of employment in the Canadian economy”.
I do not know how much evidence the Department of Finance needs
from its own officials to establish the connection that payroll
taxes kill jobs and they kill them by the thousands. If this
finance department official has found that a one percentage point
increase in payroll taxes reduces employment by 1 percent which
in current terms is about 140,000 jobs, how many jobs will be
killed when total premiums are increased 4.1 percentage points?
The Department of Finance has access to econometric models of
the Canadian economy that enable it to predict the employment
effects of bills like this one and payroll tax increases. We
insist that the finance department conduct those computer runs if
it has not done so and that the minister table those results in
the House so that members will know how many jobs are being
killed by the payroll tax hike required to finance the provisions
of this bill.
I turn to another fundamental question raised by the bill before
us, one I do not believe the government has answered correctly.
It has to do with the subject of ultimate accountability. I do
not know where the parliamentary secretary gets the nerve to
think he could get away with this. Perhaps he could get away
with it in this House but certainly not in front of any financial
audience or any audience of pensioners.
He lists off the things that are supposed to prove the
accountability of the Canada pension plan investment board. What
does he list? They are going to make regular reports. They are
going to issue quarterly financial statements. They are going to
issue annual statements.
1200
These are simple things that are taken for granted by anyone who
is part of a private pension plan. A pension plan cannot be
operated without meeting these minimal requirements.
The parliamentary secretary is trying to make a silk purse out
of a sow's ear if he thinks these things illustrate some profound
level of accountability.
What does Bill C-2 do? It establishes a corporation to be known
as the CPP investment board. The shares of the corporation are
to be issued to the Minister of Finance, to be held on behalf of
the crown by the Minister of Finance. The corporation is to be
managed by a board of 12 directors to be appointed by the federal
government on the recommendation of the Minister of Finance, who
in turn is to be advised on these appointments by a committee of
representatives to be designated by provincial finance ministers,
whose primary interest in this whole scheme is not pensions but
access to the capital to be managed by the board.
With respect to the characteristics and qualifications of these
directors, the bill only specifies that they be representatives
of various regions of Canada and have proven financial ability or
experience.
We have a crown corporation, the shares of which are held by the
government, run by directors appointed by the federal government
and acceptable to provincial governments, which will be managing
up to $130 billion of investment capital within 10 years.
The question which needs to be asked, which was not answered by
the parliamentary secretary, is to whom does the money invested
and managed by this corporation really belong. It does not belong
to the governments, although in the past they acted like it did.
The federal government was lending the funds in the CPP back to
the provinces at less than market rates. That is one of the
reasons the fund is in trouble.
The money to be managed by the corporation established by the
bill belongs to the workers and future pensioners of Canada who
are putting up the money. If it belongs to the working people of
Canada, who will also be the recipients of the CPP when they
retire, we want to know what provision the minister intends to
make to ensure that employee interest, employer interest and
seniors interest are adequately represented on the board. How is
the corporation to be accountable? By what mechanisms? What
criteria are taken into account in the appointment of its
directors?
It is their money. The bill should make it clear, which it does
not, that the funds to be received and managed by the corporation
are to be held and managed in trust for the workers and
pensioners of this country.
My last point concerns an alternative framework for pension
reform. We have numerous points to make with respect to the
defects of the bill. We also have a number of proposals to make
for improving the retirement income prospects of Canadians beyond
reliance on the CPP. These proposals also come from extensive
consultation, long before the government even recognized that
this was an issue. We trust that the government will be open to
these ideas, as it says it is open to ideas, particularly if they
bear the stamp of extensive public consultation.
Many of these points will be made by my colleagues, in
particular the hon. member for Calgary—Nose Hill. However,
allow me to conclude by providing a framework for pension reform
which is broader, deeper and more future oriented than what we
find in this bill.
The government refers in its briefing notes, as did the
parliamentary secretary this morning, to the three pillar
retirement income system which it seeks to preserve and enhance.
The three pillars which the government sees are the Canada
pension plan, the old age security and guaranteed income
supplement, which will be replaced by the seniors benefit, and
the registered retirement savings plan provision for tax assisted
private savings. The government claims to be strengthening these
three pillars by this and upcoming legislation.
What many Canadians see is the following. First, they see an
erosion, not a strengthening, of the OAS/GIS senior benefit
system by government tax policies that claw back an increasing
proportion of seniors income.
1205
To illustrate, the seniors benefit will go into effect on
January 1, 2001. Current pensioners could have $2,000 per year
less in after tax income due to the elimination of the age and
retirement income credits. Pension experts at William Mercer
Ltd. estimate that the seniors benefit will raise the average tax
bill of a retiree by $3,000 to $7,000 a year and increase their
tax rates.
What the government proposes with respect to the seniors benefit
is not a strengthening of that pillar. It is a chipping away at
the bottom by tax increases.
Second, the public sees an erosion of the RRSP system by recent
changes in government tax policy that restrict rather than expand
the RRSP system. In the 1995 budget it reduced the RRSP limits.
It reduced the RRSP over contribution allowances. It phased out
retirement allowance rollovers and, incidentally, collected about
$160 million from seniors.
In the 1996 budget it froze the RRSP contribution levels. It
eliminated the seven year limit on carrying forward unused RRSP
room. It reduced the age limit for maturing RPPs, RRSPs and
BPSPs. It eliminated the deductions of RRSP and RRIF
admidistration fees.
This is not strengthening the RRSP pillar of retirement income.
This is chipping away at the bottom, again by the insatiable
appetite for tax revenue.
Last, the public sees the government attempting to shore up the
Canada pension plan, not by pension reform that better
distributes the burden of retirement income across these three
pillars but by the simple expedient of a massive increase in CPP
premiums.
What Reform would like to propose to the House is the following.
I submit this is a better, broader and a more far sighted
framework for pension reform than anything we heard this morning.
What we propose, first of all, is to add a fourth pillar to the
retirement income system and a better distribution of the burden
of retirement income across those four pillars. The fourth
pillar we propose is broad based tax relief such as proposed in
our 1997 federal election fresh start platform.
Through a combination of personal income tax relief measures,
increases in personal and spousal exemptions, changes to the
child care tax benefits, reductions in EI premiums, surtaxes and
capital gains taxes, we can take about 1.3 million Canadians off
the federal tax rolls altogether, including 300,000 seniors.
It is a very simple idea that we can help people's retirement
income by simply leaving more money in their pockets when they
retire. We propose tax relief, in particular tax relief for low
income seniors, as the fourth pillar of retirement income.
We further propose the achievement of a better balance for the
provision of retirement income between the Canada pension plan,
RRSPs and the seniors benefit by means of the following pension
and tax reforms. There are five of them.
First, a fairer targeting of the proposed seniors benefit to
those most in need, with more generous RRSP provisions for middle
and higher income pensioners.
Second, a guarantee to existing seniors with respect to CPP that
every Canadian currently age 60 or above receives all the
benefits to which he or she is entitled under the Canada pension
plan. Surely the government cannot disagree with that, as it is
moving in the same direction as what it proposed today.
Third, an improved survivor benefit. Currently the CPP provides
only a small pension for surviving spouses of CPP contributors.
The maximum pension entitlement of a surviving spouse is 60
percent of the pension entitlement of the deceased spouse. The
maximum monthly payment in 1996 was $436.25. To lessen poverty
among surviving spouses, particularly elderly widows, 100 percent
of the funds in the deceased individual's RRSP should be
transferable to a surviving spouse tax free.
Fourth, the government claims to be looking at international
experience with respect to moving toward more funded pension
plans. Let it look at some of the more far reaching international
experience and start looking at super RRSPs.
1210
Reform proposes shifting younger and middle aged workers on to
an expanded RRSP program with compulsory contributions like CPP
which will provide higher benefits at lower cost than the Canada
pension plan while maintaining intergenerational fairness. These
super RRSPs would be mandatory. Individual RRSPs would be funded
by means of employee and employer payroll deductions. Super
RRSPs would supplement rather than replace the existing system of
optional RRSPs. The savings in each Canadian super RRSP would be
individually invested, managed by government approved financial
institutions and would be the property of that Canadian.
This is an idea that is being explored elsewhere. Why the
government is blind to it we cannot understand.
Fifth, transition mechanisms are required to ensure that working
age Canadians receive pension benefits at par with those promised
by the CPP. This can be done by a combination of existing CPP
entitlements and new super RRSP benefits, the exact mechanisms to
be determined by actuarial professionals and consultations with
stakeholders.
If members opposite and the Department of Finance misses
everything we have said today, get this one point. It is our
intention that the combination of these four pillars, a reformed
Canada pension plan, a targeted seniors benefit, an expanded RRSP
system and tax relief, will deliver more retirement income for
Canadians per dollar invested than the three pillar system
proposed by the government, of which this bill is a part.
If our real concern is to care for Canadians in their
retirement, or more correctly to provide the income to permit
more Canadians to care for themselves in their retirement, I urge
hon. members to consider these alternatives to the government's
approach.
In particular, I urge non. members to support the following
reasoned amendment: I move:
this House declines to give second reading to Bill C-2, an act to
establish the Canada pension plan investment board and to amend
the Canada pension plan and the Old Age Security Act and to make
consequential amendments to other acts since the principle of the
bill, while attempting to address the failures of the Canada
pension plan, is particularly unfair to young Canadians and fails
to recognize the employment impacts of the CPP premium increases.
The Deputy Speaker: The Chair is satisfied that the amendment
by the hon. Leader of the Opposition is in order.
Mr. Paul Szabo: Mr. Speaker, for my clarification, could
the Speaker advise the House whether a motion which says “to
decline” or a motion not to do something is in order. That
would be the vote, would it not? I ask the Chair to clarify
whether this is a negative motion and technically if it is in
order.
The Deputy Speaker: The Chair has ruled that the amendment is
in order. It appears to be a reasoned amendment. It is giving
reasons why the House would not proceed with the Bill.
Accordingly, the Chair is satisfied that the amendment is in
order.
1215
[Translation]
Mr. Pierre de Savoye (Portneuf, BQ): Mr. Speaker, what we are
debating here this morning is the reform of the Canada Pension Plan. On
September 25, the Minister of Finance tabled Bill C-2 dealing with the
Canada Pension Plan reform, among other things.
This reform has three main components. First, fuller funding. As
you know, this is the amount that must remain available to meet
commitments to those who are entitled to benefits. At present, there is
enough money in the fund for two years. The minister's proposal is to
increase this period to five years.
The minister also proposed the establishment of the Canada Pension
Plan Investment Board to increase the plan's rate of return.
Finally, the minister proposed stricter eligibility criteria,
particularly in the case of disability benefits.
I must point out right now that, on the whole, the Bloc Quebecois
agrees with the general principles of this reform. However, we have a
number of concerns that I will address shortly.
Looking back, we will remember that a draft bill was presented in
February 1997. This bill was followed by a revised bill, which was
presented last July.
In addition, the changes put forward by the federal government have
been well received by at least two thirds of the provinces representing
two thirds of the Canadian population.
All in all, eight provinces, including Quebec, have endorsed the
proposed changes. To date, only British Columbia and Saskatchewan have
not given their approval.
At any rate, these changes, this new set of measures will not take
effect, first, until Parliament passes the legislation, and second,
until the necessary orders are approved by two thirds of the provinces
representing two thirds of the Canadian population. We understand that
the government plans for the new measures to be in place by January
1998, if everything goes well.
Let me give you a brief overview of the current status of the
Canada Pension Plan.
As we know, it was absolutely necessary to review some aspects of the
plan, since it had become unsustainable. At the rate things were going,
there would have been no money left in the fund by the year 2015, at
which time contribution rates to the Canada Pension Plan would have had
to be raised from 6 percent to 14 percent.
It is to be noted that Quebec, which has had its own plan for a few
decades, would also have had to increase its rate from 6 percent to 13 percent.
Indeed, the Quebec Pension Plan is also under review for the same
reasons, even though it is in better financial shape than the CPP.
Therefore, the reform we are talking about today in this House
concern Quebeckers only in an indirect way. However, the Quebec and
Canadian governments have always harmonized the main elements of the two
plans, primarily because of a common desire to accommodate those who
have contributed to both plans.
Over the years, some 1.73 million people have contributed to both
plans during their career. By harmonizing their contribution rates, the
two governments are also acting responsibly from an economic point of
view.
1220
I would like to take a moment and explain, for the benefit of those
Quebeckers who are listening to us, what is going on in Quebec and show
how it relates to what we are discussing here today.
To ensure that the Quebec Pension Plan would fulfil its role, which
is to pay benefits, the Quebec government tabled Bill 149 dealing with
the Quebec Pension Plan and amending various legislative provisions. The
bill went through second reading in June and should pass third reading
soon after the National Assembly reconvenes for a new session.
The fact is that the CPP reform concerns Canadians more than
Quebeckers.
In fact, less than half of 1 percent of residents of Quebec receive CPP
benefits. Last August, the number was 12,882 people. Those Quebeckers
receiving CPP benefits are individuals residing in Quebec who have
worked all their lives in another province and who, accordingly, have
contributed only to the CPP. An example would be a resident of Hull who
had worked all his or her life here in Ottawa.
Another example would be members of the Canadian Armed Forces and
of the RCMP who live in Quebec but must still contribute to the CPP.
To the extent that these people have contributed only to the CPP, they
receive CPP benefits, even though they live in Quebec. Finally, there
are those people receiving CPP benefits who then move to Quebec.
It is obvious, therefore, that the CPP must be able to meet its
obligations to the Canadian public. I would take this opportunity to
point out, however, that more than a new bill is required.
A plan, once in place, relies on the tools at its disposal, and
nowadays the tools take the form of computers and, more broadly
speaking, computer systems.
It is known that the CPP falls short in certain areas that have been
criticized by the Auditor General and that we hope will soon be
corrected, because it is a very large drain on the system not to be able
to operate at peak efficiency.
I would also point out that the plan itself seems to be having
trouble changing over to more efficient computer systems: $350 billion
has already been spent on this and there is still a problem.
I also want to point out that the Auditor General found a certain
lack of rigour in the administration of the disability plan.
The fact is that at the present time, the Canada Pension Plan does not
do regular evaluations to ensure that people receiving disability
benefits are still entitled to them, so that costs have spiralled
dramatically in recent years.
I would like to consider another aspect of the bill put before us
by the minister. This legislation would establish the Canada Pension
Plan Investment Board. As you may have noticed, and I suppose everybody
in this House has, it was largely inspired by the Caisse de dépôt et
placement du Québec. However, unlike the Caisse, the federal board will
have no economic mandate, only a mandate to obtain the best possible
rate of return.
I would like to expand somewhat on this difference, because it
intrigues and almost worries me.
1225
We know that in Quebec the Caisse has been an unqualified success
as an economic development tool for Quebeckers. To a certain extent, I
can only congratulate the Minister of Finance for taking his inspiration
from a tried and true Quebec formula.
I think we all agree that sometimes it is nice to see others trying
to emulate our own success, but I also understand why the Minister of
Finance did not want to go beyond a simple mandate of getting the best
possible rate of return.
After all, across this country, there are regions that sometimes
feel neglected when they do not get the same investments or attention
given other regions. I think the Canada Pension Plan Investment Board
could be in trouble if some of its investments went to certain regions
rather than others. The problem would become a political football in no
time.
Fortunately, Quebec does not have to worry because it has set up
its own system for contributing effectively toward its economic
development.
I would like to say a few words about the government's reform
objectives. Briefly, the government wants to make the system viable,
affordable and equitable. First of all, the system's viability must be
ensured for future generations.
In fact, the objective is to guarantee that seniors and future
generations will continue to enjoy their retirement benefits.
We must also strike a balance between contributing generations
by quickly establishing a stable long term contribution rate.
Finally, levels of contribution must parallel the growth of
the economy, because we certainly need that.
For the benefit of those watching in Quebec, I would like to
make a few cursory comparisons between the proposed reform of the
Canada Pension Plan and that of the Quebec Pension Plan. There are
similarities and there are differences. Let us look first at the
similarities.
Contribution rates will rise rapidly. They will rise over the
next six years, peaking at 9.9 percent in 2003.
They will then remain stable. This is exactly what Quebec intends
to do. In both cases, plan viability is what counts.
Another point is the new policy on Canada Pension Plan
investments. As I mentioned a few moments ago, certain features of
the investment board were taken from the Caisse de dépôt et
placement du Québec. I repeat: Quebec is happy to have provided
the example for Canada.
The plan is also periodically reviewed. The federal-provincial examination
will be conducted every three years rather
than every five. That is a good thing. It will mean no loss of
control over changes to the plan and permit adjustments should
problems or unforeseen circumstances arise.
We should also note the basic exemption under which no
premiums will be collected on the first $3,500 in earnings. This
will remain unchanged in both Canada and Quebec.
Starting in 1998, the pensions of the newly retired will be
calculated on the average of five years' rather than three years'
maximum pensionable income. This represents a slight reduction for
new recipients, because the average over five years, generally
speaking, will be slightly less than that calculated over three
years. It must be said, however, that Quebec too is intending to do
likewise for the same reasons of good management.
1230
It is to be noted that neither current beneficiaries—that is
those who are collecting a survivor's pension, a disability pension or
combined benefits—nor those people aged 65 or more on December 31,
1997, will be affected by the proposed changes. These changes will only
come into effect on January 1, 1998. Benefits will not change for those
who are currently collecting a pension and those who will start doing so
before the end of this year.
All CPP benefits will remain fully indexed, as will QPP benefits.
Retirement age, which is normally 65 but can be earlier at 60 or later
at 70, will remain unchanged under the Canada Pension Plan and the
Quebec Pension Plan.
The CPP fund, which currently has the equivalent of two years of
contributions, will now have a reserve equivalent to five years of
contributions. Quebec will make the same change to ensure the
sustainability of its plan.
New rules of calculation will apply to combined benefits for those
who are collecting both a disability and a survivor's pension, or
retirement benefits and a survivor's pension. When these rules are
tabled, a thorough review will have to be made to avoid any injustices.
I can assure you that the Bloc Quebecois will pay close attention to
this all important consideration for those affected.
Not everything is the same between what is being proposed by the
finance minister and what the Quebec government intends to do: there are
differences too, which I will now discuss. First, let us take a look at
the death benefit. What is a death benefit? It is a lump sum payment to
help the close ones of a deceased contributor to pay for part of the
funeral costs. The benefit is payable for any worker who contributed for
at least one third of his or her contributory period, the minimum being
three years.
In Quebec, the current system provides a death benefit equivalent
to six times the monthly retirement benefit, up to a maximum of $3,540
in 1996. The federal plan is currently identical to the QPP in that
respect. The new program which Quebec intends to implement as of next
year will provide for a standard amount of $2,500, regardless of the
contributor.
This amount will be indexed. In the system proposed by the Minister of
Finance, under the Canada Pension Plan, the death benefit will be equal
to six times the monthly retirement benefit, with the maximum being set
at $2,500 a year instead of $3,540.
As we can see, there is a difference. First, the Quebec Pension
Plan will be more generous than the Canada Pension Plan because the fact
is that funeral benefits are the same for all workers, regardless of how
long they have lived. The Quebec Pension Plan recognizes this reality.
The second difference concerns disability benefits. The federal
government is experiencing many difficulties in implementing its
disability benefit.
Last year, the auditor general sharply criticized the federal government
for the uncalled for—and I would say exorbitant—increase in the
cost of disability benefits, an increase caused mainly by regulations
that are too lax and a follow-up, let us face it, that is non-existent.
Indeed, as I like to say, when the auditor testified before the
committee, he mentioned the Quebec Pension Plan as an example to follow.
1235
At present, the federal disability benefit system is overspending.
This is due to lax administration, whereby the federal government
considers more people eligible for a longer period because there is no
periodical reassessment of the need for these benefits to be maintained.
Through the proposed changes to the disability pension under the
plan laid before this House by the finance minister, the federal
government intends to repeal the federal directive providing for any
person to be declared disabled if unable to perform his or her own job
even if he or she could perform another job, thereby making the
administration of the plan much stricter.
There is another difference. Current federal requirements for
disability benefits limit eligibility to those who have contributed to
the plan for two of the past three years or for five of the past ten
past years.
The federal government, according to what the Minister of Finance
proposes, intends to limit eligibility to those who have contributed for
four out of the last six years, which should reduce eligibility
considerably. In Quebec, those who have contributed for two out of the
last three years, or five out of the last ten years, or for half of the
contribution period, are eligible for disability benefits. This makes
allowance for progressive diseases, which is very important. The
Government of Quebec will therefore recognize, and quite rightly, a
proportionately higher number of disabled people.
There is another rather complicated difference. It has to do with
the way in which the Canada and Quebec pension plans are calculated.
The difference is complex, as is the calculation.
The Bloc Quebecois intends to keep an eye on this issue to ensure that
every citizen is treated fairly.
In conclusion, the Bloc Quebecois is in agreement with the general
objective of the reform, which is to preserve the viability of a public
pension plan. This reform will ensure that future generations will also
have access to a public pension plan. However, the Bloc Quebecois
demands—I repeat, demands—that administration of the CPP be rapidly
modernized in order to meet the harsh criticism recently formulated by
the auditor general with respect to this plan.
The Bloc Quebecois will also ensure that the government's proposed
reform does not depart from the principles of social justice so dear to
all Canadians and all Quebeckers.
[English]
Hon. Lorne Nystrom (Qu'Appelle, NDP): Mr. Speaker, I want
to say a few words on the bill before the House.
We are beginning a debate on our pension policies and where we
should be going. Bill C-2 is the first of two bills to come
before the House. Bill C-2 deals with the increase in premiums
to the Canada pension plan and the reduction in benefits to the
plan.
1240
The second bill that will come before the House very shortly
will be on seniors benefits. This bill will abolish the current
old age security pension, the guaranteed income supplement, the
tax credit for pensioners and the age benefit. When the
government abolishes that it will instead introduce a seniors
benefit. I believe that will be very controversial legislation
which will create a lot of interest right across the country.
Part of the major debate that will go on in part two will be
public pensions versus private pensions.
I want to begin today be giving a bit of the history of the
Canada pension plan as we know it today. It was passed into law
in 1966. Nine provinces are part of the Canada pension plan,
while in Quebec has the Quebec pension plan which is very similar
to the CPP. It is the Caisse de dépôt et placement du Québec.
The Canada pension plan is a pay as you go plan. It is a
defined benefit plan and pays out around $17 billion per year in
benefits to Canadians, including the pension benefits, survivors
benefits and disability benefits. The plan has reserves of about
two years of funds which is around $40 billion. That $40 billion
is, in large part, lent to the provinces at interest rates that
are lower than they can achieve elsewhere for infrastructure,
such as the building of schools, hospitals and universities.
The plan pays out a fully indexed pension to people 65 years and
older. It provides survivor benefits, death benefits and
disability benefits to people who are unable to work. It has
also been a highly successful plan in meeting the objectives of
1966. If we look at seniors poverty in this country we will find
that there are a lot fewer people living in poverty today than
there were 30 years ago. In 1960 some 33.6 percent of seniors
were living below the poverty line. In 1995 some 10.9 percent of
seniors were living below the poverty line. When one compares
that to any other category of Canadians, that is a very
significant accomplishment over the last 30 years.
We do not have figures for poverty for the Canadian population
in general or of child poverty or for other categories, but for
seniors that has been a remarkable accomplishment over the last
30 years.
The whole philosophy behind the Canada pension plan is that it
is a social program. Its purpose is to divert a share of the
national economic output toward retired people each and every
year so people can retire with dignity. At the inception of the
plan in 1966 and even today there are many people who do not have
adequate private pension plans through an RRSP that they build up
for themselves. Their sole means of income, outside of the old
age security pension or the GIS is the Canada pension plan.
Therefore, the main philosophy behind the CPP is to divert part
of today's national economic output into a decent retirement fund
for people when they retire.
It is very similar to diverting a share of our national income
to fund medical care in Canada, to make sure that regardless of
one's financial means, we have universal accessibility to decent
health care. It is similar to diverting a share of our national
income toward education to ensure that we have an educated
people.
To summarize this, it is diverting a share of our output toward
the common good, to try to equalize the opportunities of
condition in Canada, to try to have a more equal society where
people do not have to worry about such fundamental needs as food,
clothing, shelter and medical care. That is basically the
philosophy behind the plan. That is why our party over the years
has been a very strong supporter of the Canada pension plan, the
Quebec pension plan and public pension plans in general.
We are now into a debate on private pension plans versus public
pension plans. We are very much in favour of public pension
plans as is the NDP government in Saskatchewan and British
Columbia, the trade union movement and progressive people right
across the country.
1245
On the other side are the supporters of private pension plans.
Here we find the old allies, the Fraser Institute, the C.D. Howe
Institute, the Canadian Taxpayers Association and of course their
mouthpiece in Parliament, the Reform Party. These are people who
would like to abolish altogether the Canada pension plan and
replace it with sort of a super RRSP plan which would be a
defined contribution plan.
The ultimate end of this would be to widen the gap between the
rich and the poor, much of which would be done through tax funded
support. RRSPs as tax write-off are a tremendous tax expenditure
for the government. RRSPs cost Canadian taxpayers about $17
billion in tax expenditures and the CPP benefits also cost about
$17 billion. There is equilibrium.
But under a totally private plan or the Reform Party private
plan or the Fraser Institute plan the tax expenditures would
escalate. People who are wealthy could take the greatest
advantage of this. It would be sort of a Robin Hood in reverse
where the poor are giving to the rich so that the rich can retire
in comfort in condos in Florida and elsewhere around the world.
Bill C-2 moves us partially toward a private plan. It is really
a transition toward a partially vested plan. It also has in it
the privatization of the administration of the plan. I want to
look at a few details of that this morning.
First, one of the major concerns I have about the changes to the
Canada pension plan is the whole issue of premiums. Premiums will
increase 73 percent over the next six years. The combined
employer-employee premiums will increase from today's 5.85
percent of insurable earnings up to 9.9 percent, an increase of
some 73 percent in six years. The maximum contribution will go
from $975 to about $1,635.
I am really concerned about the rapid escalation of the premiums
for a number of reasons. First, the burden of refinancing of CPP
will fall mainly on low income people and women, because a
disproportionate number of women receive low incomes. It will
fall mainly on people who are least able to afford it. That is a
very regressive way to try to salvage the Canadian pension plan.
Much of the burden will fall on small business. An increase of
73 percent for small business is a burden that many of them
cannot afford. It is a burden that will drive some of them
underground in how they conduct their business and whom they
hire. That is a concern to us as well.
Finally, the major increase will be a particular burden for
young people as much of what we are going to have in the CPP is
going to be an intergenerational transfer of wealth or income
from younger people to their parents or their grandparents. That
is something we have to take a serious look at when this bill
goes before the committee.
The other part about the premiums that worries me in terms of
regressivity is that year's basic exemption which is now about
$3,500 a year under this bill will stop being indexed. As time
goes on, without indexing the basic exemption, more and more of
the burden will fall on low income people as the funding of CPP
becomes less and less progressive. Again, that deviates from the
original principle of the Canada pension plan which has tried to
provide a pension for people when they retire but to do so on
premiums that are progressive and affordable by low income
people.
This brings me to another point. It is the whole question of
the affordability of the Canada pension plan. If we listen to
the Reform Party and its friends at the C.D. Howe Institute or
the Fraser Institute, we would think that the CPP is going to be
flat broke and that we cannot afford it, that it has to be
abolished. I say that is rubbish.
Even the actuarial report that the government used in order to
craft its changes shows that the CPP is affordable. The
actuarial report in 1995 that the government used was based on
some pretty low common denominator indicators. The figures used
were based on a flat wage increase and a very high unemployment
rate. The government tried to project this in a linear way for
30-odd years. It has now come up with all the figures for
changing the Canada pension plan. It was a very pessimistic
snapshot of what our country will look like economically in 30
years. Despite that, the plan is still affordable.
1250
We do not pay more than other OECD countries for our public
pension plans. In fact if old age security, the OAS and the CPP
are combined, in 1995 about 5.3 percent of the national income
went into those two plans. This will rise to about 8 percent by
the year 2030.
The World Bank said just recently that some 9.2 percent of the
GDP of the OECD countries was spent on public pension plans. In
30 or 35 years Canada will be spending about the same or even
less than what many OECD countries are spending today. I do not
think there is any debate that Canadians cannot afford a public
pension plan.
In addition to the rapid rise in premiums and how regressive the
burden of these are going to be, we are also concerned about the
reduction in benefits. Under the new plan benefits will be
decreased by around 10 percent. People, particularly young
people, will be paying more in premiums and then seeing a
reduction in benefits. I am concerned about that and the
political support a public pension plan will receive. You can
only go on so long increasing premiums and reducing benefits
before the political will is not there any longer to support the
idea of the Canada pension plan. That should be of concern to us
as parliamentarians as well.
Disability pensions will become more difficult to obtain. This
is one of the better parts of CPP and it is one, I suppose, of
the cases we get as members of Parliament most often. We hear
about the problems people have applying for CPP disability
benefits.
Under the current legislation a person has to be working for at
least four of the last six years to qualify for CPP disability.
Under the changes in the bill, that person must work for two of
the last three years or five of the last ten years before
qualifying for CPP disability allowances. It will be more
difficult for some people who now qualify and will not qualify
under changes to the legislation.
Another point is the whole question of survivors and death
benefits. The maximum today is $3,580 for someone collecting
survivors' benefits. It will now be reduced to some $2,500,
again making it more difficult, particularly for women who are,
more often than not, the recipient of those benefits.
These are some of the concerns we have as this bill goes on to
the committee stage. Basically, the burden of the funding
changes in CPP will fall most unfairly on low income people, on
women. It will hurt disabled people. It will hurt getting young
people to support the Canada pension plan.
At committee we have to come up with some amendments that will
try to make this bill more progressive, that will lessen the
burden for young people, lessen the burden for low income people
and reinstate the death benefit and the disability benefit to
where they are presently in the Canada pension plan.
I want to comment, very briefly, on the increase of the size of
the reserve fund for CPP. Currently the reserve fund would cover
CPP payments for over two years, about $40 billion. Under the
bill, there is a plan to increase this to 3.8 years which would
be about $126 billion.
Under this new idea, which also includes an investment board
appointed by the government from the private sector, we see the
idea of a very serious transition in the philosophy of the CPP
from a pay as you go plan to a partially vested plan. Under the
partially vested plan, the provinces will no longer be able to
borrow money at the same rate at which they borrow it now to
invest in their infrastructure for schools, universities and
hospitals.
That is a negative because the provinces, being able to borrow
money at a lower rate, have built the country into a stronger
place and have made investments for all of us across the board
and helped strengthen the economy. That will be gone. That
might not greatly affect provinces like British Columbia, Alberta
or Ontario that have borrowing rates that are lower because their
bond ratings are higher than the average. It will really hurt
the four Atlantic provinces because their borrowing rates are
more expensive. When that happens it will be more difficult for
them to build schools and hospitals. It will create more inequity
in the country once again.
1255
This is a part of the bill that might not seem to be that
important to the ordinary person on the street but it will really
affect Newfoundland and the other Atlantic provinces and to a
lesser degree places like Saskatchewan and Manitoba which from
time to time do not have the same bond rating as an Alberta or
British Columbia.
The other point that concerns me is that in the Quebec pension
plan under the Caisse de dépôt et placement there is a regulation
that says it has to invest in the domestic economy, to try to
improve the economy of the province of Quebec in order to give
that province a break. Again, in this bill there is no reference
to trying to look at the economic priorities of the country and
investing in the domestic economy in this new fund.
Eighty percent of the fund must be invested in Canada but again
there are no guidelines. We should be looking at maximizing the
creation of jobs or minimizing unemployment. It does not talk
about what kinds of investments should be made but leaves that to
the private board.
Another concern is that the Minister of Finance publicly
indicated the 80 percent rule where 80 percent of pension moneys
must be invested in the country is likely to be increased. My
guess is that it will be increased in the next budget or the
budget after that. That will also be a concern. What is being
created here is a huge pension fund that will be $126 billion in
six years and up to over $300 billion after nine or ten years.
That will be a huge fund. That money should be invested in the
main in this country.
Another thing to be noted is that while the premiums are more
difficult for people to pay and the payouts will be less, there
will be some job creation in this new bill. That will be
basically for the banks, the stockbrokers and the bond dealers
that will be investing this new fund of $126 billion. The
premiums are estimated by some to be around $500 million for that
work.
These are some of the concerns we have at second reading. They
are concerns we would like to explore at the committee stage.
I am really concerned about the line the Reform Party is taking
on totally privatizing the Canada pension plan and turning it
into a system of super RRSPs. Reformers are talking about a
mandatory plan—
Mr. Jack Ramsay: There would be a better return. It would
come closer to your MP pension plan. Are you against that?
Hon. Lorne Nystrom: A Reform Party member is now starting to
intervene by saying that it would be a better return. It would
certainly be a better return for wealthy people but what about
the ordinary citizens?
Mr. Jack Ramsay: Everyone would pay into it.
Hon. Lorne Nystrom: What about the ordinary citizens? Now
everybody may pay into this plan but a low income person might
not pay very much. I represent the inner city in Regina and
people in the inner city in Regina cannot afford to put much into
RRSPs. If we had the Reform Party plan, which would be a private
open ended plan subsidized by the taxpayer through RRSPs and tax
breaks, we would see wealthy people earning an awful lot more
money. The gap between the rich and the poor would widen as we
privatized the Canada pension plan. That is exactly what would
happen.
That is the whole philosophy of the Reform Party. That is why
in the House of Commons on Thursday Reform's official critic for
revenue agreed that Conrad Black paid too much tax, that wealthy
people in this country pay too much tax. That is the whole
philosophy of the Reform Party. I oppose that and our party
opposes that. Thank goodness the majority of the Canadian people
oppose going off in that direction. It is the law of the jungle.
That right wing extreme conservatism has done this country an
awful lot of harm over the years and now the Reform Party wants
to carry it even further by totally privatizing the Canada
pension plan. I say we have to fight against that and we have to
make sure that the Reform Party gets nowhere near the levers of
power in Canada.
The Reform Party is very much against government programs that
help ordinary people, but it is certainly in favour of spending
billions and billions of dollars to subsidize the wealthy.
Reformers are calling for a super RRSP plan where billions of
dollars will be spent to subsidize the rich as they fatten their
bankbooks with a very healthy pension plan. We have to fight
against that. That is one reason I am concerned that this plan
is moving in that direction.
1300
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I
listened to the member's comments and I certainly appreciate the
way he laid out the issues. It is clear there are some important
issues.
I agree wholeheartedly with his comments about the Reform
proposals. The opposition leader in his speech said that we have
to make the survivor benefits fairer and that there should be a
fairer distribution to middle and high income Canadians. It is
absolutely outrageous that he should be fighting for high and
middle income Canadians when we have people living in poverty.
The Reform Party has no social conscience.
During the public consultation forums one of my constituents,
Mr. Phil Connell, appeared before the panel. He wanted to
share his numbers with us. He has been retired for seven years.
During his employment he contributed $18,607. He computed the
interest and found that his share was about $9,300. In the seven
years of receiving the Canada pension plan his total receipts to
date are $54,287. My constituent, a senior who is getting very
generous benefits, $5 out for every $1 that he put in, said that
this is scandalous and must be changed.
The hon. member for Qu'Appelle laid out comments about each of
the initiatives the government is proposing to deal with the need
to get the cost of the CPP down. He said we should have retained
the disability benefits and the survivor benefits. He said we
should not shift the burden of the price to the youth coming
along in the future. He suggested there should be absolutely no
change.
We cannot have it both ways. Can the member please advise the
House, if he is going to protect everything that is there
already, how does he propose to save the Canada pension plan?
Hon. Lorne Nystrom: Mr. Speaker, I did make a brief comment in
answer to that question earlier. Perhaps the member missed it.
The actuarial report on which the changes are based, in the
opinion of some economists, which I happen to share, contains
very pessimistic projections. They are based on high
unemployment rates and the very flat wage increases we have seen
over the past few years. They have taken these forward for 30
years, in a linear way, and made projections which are very
pessimistic.
I believe the economy will be in better shape than that, as do
many economists. We do not have to have a decrease in disability
benefits or in survivor benefits. As a matter of fact, those are
a very small part of the payout of the CPP right now. The
biggest payout is in the pension plan.
I do not believe we should penalize disabled people. We do not
have to do that based on the present economy.
Ms. Marlene Catterall (Ottawa West—Nepean, Lib.): Mr.
Speaker, the member spoke about things he is concerned about in
the plan. He spoke about making it more progressive. I am sure
he is aware that any changes in the plan, as contained in the
legislation or changes which will be made due to subsequent
consideration, require the approval of the provinces. I would
like to ask him how he intends to proceed on that with the NDP
Government of Saskatchewan.
He spoke as well about the relatively low retirement income of
Canadian women and their much higher rate of poverty in
retirement.
He may be aware that during the negotiations between the federal
and provincial governments there was a proposal on the table from
the Manitoba government, supported by our government, which would
have seen mandatory credit splitting between spouses as CPP
income is earned. That would have gone a long way toward
ensuring that future generations of retired women will not be
penalized as they are today.
The NDP Government of Saskatchewan chose not to support that
proposal. It is one provincial government which allows women to
sign away their entitlement to CPP benefits.
1305
I wonder if the member agrees that those income credits earned
during the working life belong equally to both partners in a
marriage or common law union and what measures he is prepared to
take to ensure that the NDP supports that and will do its best to
persuade the NDP governments in B.C. and Saskatchewan that they
should also support it.
Hon. Lorne Nystrom: Mr. Speaker, I agree with the hon.
member that the credits earned by both partners should be theirs
and there should be total equality. I will do whatever I can to
push that idea.
I am not privy to the negotiations that took place between the
provinces and the federal government. The member will know that
two thirds of the provinces representing two thirds of the
population must agree to any changes along with the federal
government. Saskatchewan and B.C. are the two provinces that do
not agree, primarily because they see this as a regressive way of
increasing the premiums. I am not privy to all the details, of
course, because I was not there.
Mr. Dick Harris (Prince George—Bulkley Valley, Ref.): Mr.
Speaker, I certainly do not want to defend the Liberal Party on
its proposals for reforming the CPP.
I would like to ask the member from the NDP a question. He
appears to believe that this plan can go on indefinitely without
some sort of a restructuring of how to finance it. He spoke
about what is wrong with the government plan and that it is using
pessimistic figures. I am really quite surprised. Usually when
forecasting revenue and doing a business plan, one usually likes
to use some very conservative numbers. If conservative numbers are
used, then it is usually safer ground if things happen to not be
as bright as one would hope. be.
A good example is that when the plan was brought in in 1965, the
government could see nothing but a bright future for the Canada
pension plan. In reality it should have been looking at it more
pessimistically given the input it got from its own financial
actuaries who said that under the Canada pension plan structure
it was doomed to failure by the end of this century.
Is the member suggesting that we should continue with a
blindfold on in the fervent hope that things will be so bright
that we will be able to offer all kinds of benefits and
provisions under the Canada pension plan and nobody is really
going to have to pay for it?
Hon. Lorne Nystrom: Mr. Speaker, of course not. I never
suggested that. There has to be a restructuring of the plan.
My argument this morning is that the restructuring of the plan
in terms of the increase in premiums is regressive, too much of a
burden on low income people. That is the main thrust of the
argument I am making.
I am sure the Reform Party would not understand that because
it wants to abolish the Canada pension plan and replace it with
a totally private plan that will benefit the wealthy people and
say to hell with the ordinary people in this country.
That is where I differ from Reform Party members. They are
willing to take the write-offs for RRSP, increase the limits
radically so that wealthy people can make a lot more money and
let the poor wander around all by themselves. That is why I
oppose it. Under their plan the gap between the rich and the
poor will widen, not narrow. I want the gap between the rich and
the poor narrowed. That is why we need public pension and social
plans to help create an equality position. But the Reform Party
would not understand that.
Mr. Jack Ramsay (Crowfoot, Ref.): Mr. Speaker,I listened to
what our socialist friend has said. I wonder, inasmuch as the
plan is going to require a contribution increase of 73 percent
but the benefits are not going to change, that they will stay
somewhere in the area of $8,800 a year, if he would address that.
The increase is going to incur in terms of contribution but the
benefits are not going to increase. We hear it is going to be
indexed and that is a hopeful sign. But when he talks about the
rich and the poor, I wonder if he would care to share with the
House, although he was eligible for the 3.5 years that he was not
in the House to take his own MP pension, whether he did that. How
would he compare that plan to the $8,800 which our seniors are
getting now and will continue to get despite the 73 percent
increase in the contributions that young and old, poor and
wealthy are going to have to pay into this system?
1310
Hon. Lorne Nystrom: Mr. Speaker, my response to my capitalist
friend from Crowfoot is I understand the new Reform members of
Parliament are part of the pension plan as well. They were
campaigning that they would not be part of that plan. I think
they are trying to use smoke and mirrors.
I also remember the leader of the Reform Party saying that he
would never move into Stornoway. Where does he live? He is in
Stornoway. That kind of integrity and dishonesty are a discredit
to politics in this country.
Hon. Jean J. Charest: Mr. Speaker, I am very concerned about
the issue of CPP reform, as are a number of Canadians. If there
is one thing I have learned over the last four years it is how
Canadians are concerned about a few key issues which relate to
their future.
Health care is very much an area of concern for Canadians,
especially as our population grows older. Education and training
are important issues, but so are pensions and planning for our
retirement. They all have one specific thing in common, that the
demographics of our country are changing very rapidly to the
point where if we want to understand the full impact of this
issue we also have to start by understanding and recognizing that
in this country today, for every person who is of retirement age
there are five people who are working. In 20 years there will be
only four people working for every person who retires.
As I look at the pages in front of me, I think of their
retirement, which may seem like a few years away for them. They
should know, as they plan for their future, that there will be
only three people working for every person retiring. We will go
from five to four to three in a short period of 40 years. Given
that dynamic, it requires extraordinary effort from governments
in Canada to plan, to think ahead, to think these changes
through, especially given the added elements in our economy. We
have a $600 billion debt and high taxation levels. This is a key
question in our future and how we are going to deal with it.
[Translation]
In my experience, and I think I know the Canadian public very well,
people feel this public pension system is very important, both as a
policy and a program.
Of course the Government of Quebec has a different plan. The Quebec
pension plan administers a similar plan, but the fact remains that both
in Quebec and elsewhere, Canadians believe that this plan is very
important for their future.
People want governments to plan ahead so we will know exactly how to
deal with these rapid demographic changes that will occur.
[English]
The CPP over the last few years has been jeopardized by
inadequate contribution levels and inefficient plan management.
We have known that for some time. People in the House will
equally know that the plan is administered with provincial
governments. The federal government is not alone in deciding
what direction we have to take. This is very much a plan that
requires a joint effort.
1315
We also know, for instance, that the money in plan was lent to
the provinces at rates the same as 20 year bonds. This was way
below the rates that could have been obtained in the marketplace.
It certainly was not the kind of policy that would allow the plan
to garnish surpluses; quite to the contrary. It was certainly a
lot less than a private sector plan earned. No wonder Canadians
were concerned and certainly worried about the plan.
We also need to look at how the plan affects middle class
Canadians and how it will affect their working years. Not only
must we look at how it represents a take off their paycheque
every week. We also must look at how it would effect employment
because it is very much a payroll tax.
In this respect we need to compare the ideas that have been put
forward, some of them during the election campaign on our side. I
noticed that on the Liberal side we have what is typically the
return of Liberalism. The government that was not in favour of
taxing people and cutting spending in the last four years is now
in favour of taxing people and spending.
Keeping with that new found philosophy as expressed in the
Speech from the Throne, what is the Liberal government proposing
to Canadians through this change? It boils down to something
quite simple and very straightforward. It represents an $11
billion tax bite out of our economy over the next six years. Let
me repeat that. The number is so big that it is difficult for
people actually listening today to get a sense of what it is.
Some $11 billion will be taken out of the Canadian economy over
the next six years by the Liberal government for the purpose of
trying to change and sustain CPP.
It is one of the biggest tax attacks we have witnessed in the
history of the country. It represents something that would have
a dramatic effect on our economy if it were left as it is.
Other political parties such as the Reform Party have also tried
to cobble together some sort of a plan, but it is important to
note from the perspective of Canadians that the Reform Party has
not put any numbers forth. It says “here is an idea” but there
are no actual numbers. We are walking into what would be
fundamental changes to people's pensions, but there are no
numbers to back up what exactly it would do or how it would
operate. However that is not a big problem for the Reform Party.
It is just willing to do it.
What is more disturbing in this vague concept of recognition
bonds is that they would end up reneging on CPP. They would just
scrap it. What happens to people who have paid into the system
and who had planned according to these payments? I guess the
answer is tough luck. They will get recognition bonds.
Who will pay for this? It is not clear who will pay for it
except that the younger generation of Canadians, certainly
according to the Reform plan, will pay a hefty price no matter
what the scenario is.
[Translation]
Of course the system is different in Quebec, the Quebec pension
plan is managed differently, but to them all this is not terribly
important. The Bloc Quebecois does not expect to be here to administer
these changes, that is if it ever reaches its goal.
[English]
The party that I lead here—and in the election campaign we made
it very clear—has set out three clear benchmarks in changes to
CPP we would like to see happen.
The first is that CPP must be self-financing. It is critically
important that we understand the lessons over the last few years
and that we make this plan self-financing.
The second one is a very different from the one held on the
government side. We know the government has a different
position. It is ready to increase premiums to the tune of $11
billion. If it is to be made self-financing there must be tax
cuts to offset the $11 billion bite in the economy. That is the
second benchmark.
This means that if we are to go down this route there have to be
reductions in employment insurance premiums paid on a weekly
basis, which is a payroll tax. There also have to be personal
tax reductions so that the decision or move to make CPP
self-financing will not damage our economy the way the Liberals
are ready to tolerate in the plan they are presenting.
The third is to complete the whole picture. We have to allow
the young Canadians who are with us today in the House of Commons
to plan for their retirement and give them a fair break. They
are not asking for favours. They are not asking for special
treatment. They are just asking for a fair break and an
opportunity to plan. We also have to make changes to RRSPs so
that they can plan for themselves and make decisions for
themselves and for their future.
1320
Those are three key benchmarks that we as a political party
certainly believe in as we assess the changes we bring forward
for CPP.
How would we meet these objectives? We think there has to be an
increase in CPP contribution levels to rates that are adequate to
ensure the long term viability of the plan. We do not quarrel
with that, not at all, but these increases in contributions as I
mentioned before must be offset by substantial reductions in
taxation for Canadians. Otherwise we are turning in circles.
We would make provisions to finance the extra costs per year of
senior benefits resulting from demographic changes. I mention
this because there are those who look at the books of Canada, at
spending, and are surprised to find that even if we held the line
on spending in all departments on an annual basis it would still
increase to the tune of about—if I remember correctly and I am
quoting from memory—$2 billion a year.
Those sitting in the galleries of the House of Commons today are
asking themselves how that could happen, why it is happening.
There is an answer that has to do with demographic changes in
society.
Even if we hold spending the fact of the matter is that people
are growing older. They are eligible for certain programs. The
health care system take is higher because of a growing
population. We need to understand these things.
My point today is quite simple. Not only do we need to
understand them. We need to plan for them. We need to think
ahead. I know that is a new idea on the government benches, but
it is one that is critically important to the young Canadians who
are with us today.
We also need to reassure Canadians the funds will not be
mismanaged as they were in the past. We have to take a
completely different approach. I will be happy to speak to the
issue of return.
We need a separately managed Canada pension trust. That is very
much the route we should take. In this respect we are doing what
has already been done successfully in the province of Quebec.
[Translation]
One of the major successes of the quiet revolution in Quebec has
been the creation of the Caisse de dépôt et placement. Of course it is
not perfect, as an institution. From time to time there have been
attempts to manipulate the activities of the Caisse, but by and large,
I would say the Caisse has been well rated on its performance. This is
an institution that has been very successful in Quebec. It has been
very, very successful and has managed the funds in its care with due
diligence.
So it is a concept that is worth imitating. It may be a very new
approach for some people, but when the federal government sees people
with good ideas who get good results, it does well to borrow those
ideas. In this case, we think that is what it should do.
[English]
The Canada pension trust needs to be completely independent from
the government of the day if it is to work. Its trustees have to
be appointed on a non-partisan basis, recruiting from experts in
the financial, business and actuarial communities in consultation
with the provinces.
The mandate of the Canada pension trust and its trustees would
be to advise the government on how and where to invest the money,
on contribution levels, and on how to select the best private
sector managers acceptable in industry to administer the fund.
In this way we would have some assurances that in the long term
the accumulated surpluses would be invested in a wise manner. We
would offer some intergenerational equity with regard to how we
deal with pensions.
The performance of the fund could be evaluated on a regular
basis to guarantee and ensure Canadians some transparency on how
well it is being done.
[Translation]
Today, we cannot afford to overlook certain realities. My point is
that with all these efforts to set up a pension plan for the future, it
is also extremely important for the government, for all governments but
especially the federal government, to control its own spending if we
again go in the direction Liberal Party of Canada is asking us to go, in
other words, start spending again. These are not rumours.
This morning, I read in the newspaper that the Minister of Finance
himself had a meeting with volunteer organizations and urged them to
apply for federal funding. I am not making this up.
This was the Minister of Finance, who is sitting just a few desks down,
opening the flood gates and making this announcement to the public. It
is as though he put up a sign saying:
[English]
“They were open for business. Please come and ask for your
money”. It is signed by the Minister of Finance.
1325
[Translation]
Even if the government revamps the Canada pension plan, if spending
is out of control, it will get nowhere at all. The government must take
steps to keep spending under control.
It must also plan for the increased demand for old age security,
because even if we control spending, there will still be this annual
increase. I wish the government would say it thought about this and has
calculated, on an annual basis, what the additional cost will be to give
these people the pension to which they are entitled.
[English]
We also need to improve the security and returns of registered
retirement savings plans. The young men and women in the Chamber
who serve Canadians so well as pages are the ones who will be the
most affected by these decisions. They also need to be able to
plan for themselves beyond whatever government can do. That
means more flexibility in registered retirement savings plan.
The first thing I would like to hear coming from the Minister of
Finance is an ironclad commitment, a guarantee that the increased
value of sheltered funds will never be taxed while they remain in
RRSPs. That is a commitment the minister has yet to make.
The reason I raise this point today is that every time a federal
budget is on the horizon and in the weeks that follow there are
always rumours the Minister of Finance or the government of the
day will make a tax grab on RRSPs. Canadians have planned and
saved and put this money aside for themselves. There is never an
assurance that one day the government will not turn around and
change the rules, try to grab that money. The government needs
to speak very clearly on the issue and guarantee it will not
happen.
The second thing that needs to happen is an immediate increase
of the allowable allowance for foreign content for RRSPs from 20
percent to 50 percent. The issue is quite simple. Our market is
too small. It is fine to encourage Canadians to put their money
aside, but the same Canadians should be allowed to get the
maximum return on the money they are setting aside. By limiting
the foreign content to 20 percent the returns are being limited.
Most Canadians who have any understanding of the markets and the
way they operate will know that this is an untenable position.
Not only should we move to increase the foreign content of RRSPs
from the current limit of 20 percent to 50 percent. We should
move to zero by the year 2001 so that Canadians are allowed the
full freedom they should be allowed to get the best return
possible on their money rather than have the people down here
telling them where they can and should invest. The people up in
the galleries are the ones who should be able to say where they
want to invest their money, the money they earned.
We cannot forget seniors benefits. We have to plan. In this
regard I want to know, as do other Canadians, the hidden agenda
of the Liberal government. We have yet to find out the impact of
the changes to seniors benefits for Canada's middle class. What
will be the impact on women, particularly older women who will be
dramatically affected by changes to the seniors benefits?
Has the government planned? What numbers are available? I
assume it put some numbers out. It cannot be proposing these
changes without having studied the effects they would have on the
middle class. Surely it has not entered into the changes without
considering the impact they would have on women. We are all
waiting anxiously to find out. We certainly have a great deal of
concern with respect to how it will affect women in particular.
I want to make reference to a concept we have not heard a lot
about but will hear more about, the concept of intergenerational
equity. As the demographics of the country change it is
important for us to accept that we are asking a smaller group of
Canadians to carry a heavier burden than ever before with respect
to retirement policies. This will have a disproportionate effect
on them, on their revenue and on the decisions they will make
with respect to their own savings. Ultimately it will have an
impact on the decisions they will make with regard to where they
want to work.
This is very much a global economy. This is an economy where
people who have certain skills are in high demand everywhere in
the world. We know how easy it is to travel on a Canadian
passport. The Government of Canada has certainly demonstrated
that to us.
1330
These Canadians deserve some equity. I leave this as an idea.
We did not mention this in our platform but this idea deserves
some real study on how we can offer some tax relief. We could
target it at younger working individuals and self-employed people
on whom we are going to rely. Then there could be a stable
predictable retirement system for Canadians in the future.
Mr. Mac Harb (Ottawa Centre, Lib.): Mr. Speaker, it is
really quite incredible that the hon. member, the leader of the
Conservative Party is standing in the House today attacking the
government for taking action on an issue that for nine years when
his government was in office it knew full well that the Canadian
pension plan needed to be reformed, that the future of Canadians
needed to be taken care of. Year after year that government
failed to take action on it.
When the member was on the government side for a period of nine
years, why did he not ask his government to take action on such
an important issue so that the Canada pension plan could be
reformed in order to ensure that those who retired in the future
would have a pension to rely on to help them carry on with their
daily lives? Why did he not take action on that? Why will he
not stand today and instead of attack the government,
congratulate the government on finally cleaning up the mess of
nine years of inaction by the Conservative government?
Hon. Jean J. Charest: Mr. Speaker, thank you for offering
me the opportunity to respond to the member and the usual
rhetoric of the Liberal Party of Canada. I could understand that
in 1994 after the election campaign of 1993 every time something
would happen the Liberals would rise in the House of Commons to
blame the previous government.
The member has just demonstrated the usual overblown rhetoric
used by the Liberal Party of Canada. It is the party that rather
than assume its responsibility continues to blame others. In case
the member has not noticed, there have been two election
campaigns that have brought Liberal governments to majority. The
government you are talking about was four years old, Mr. Speaker.
When are you going to live up to your responsibilities and stop
blaming others for decisions that—
The Deputy Speaker: Order. The hon. member for Sherbrooke is
an experienced member and knows he cannot cover his address to
the Chair by saying Mr. Speaker and then saying you to somebody
else. The hon. member knows that and I invite him to address his
remarks to the Chair.
Hon. Jean J. Charest: Mr. Speaker, it is just that I hesitate
to blame you personally for everything that has happened because
you share some responsibilities for other members in the Chamber,
and I know you recognize that Mr. Speaker.
The member for Ottawa Centre might as well enjoy that overblown
argument. I do not know whether he actually thinks that Canadians
believe him. I wonder when he says those things whether he
actually thinks that Canadians who are listening to us today take
him seriously or whether they do not sit in their chairs and ask
“what is with these people? They have been in government for
four years. They went through two election campaigns and they
continue to blame others for things that are happening and for
their own decisions”.
My advice to the member is that if he thinks that argument has
any sway at all, keep on using it while he still can because the
days are counted. Assume your responsibilities and live up to
the fact that you have a mandate and you are asked to deliver
it—
The Deputy Speaker: Whenever the member appears to get to
the end of his questioning he lapses into the thing I tried to
have him avoid. I know he will bear that in mind.
[Translation]
Mr. Jean-Paul Marchand (Québec East, BQ): Mr. Speaker, I too was
quite impressed by the remarks of the hon. member for Sherbrooke and
leader of the Conservative Party, who said that, with the new pension
plan, the level of taxation will rise by $11 billion over six years. It
is strange to hear this expression of concern coming from the
Conservatives. He spoke of the poor and the young and went so far as to
suggest there is need to control and limit government spending.
1335
Has he forgotten that, while the Conservatives were in office,
Canada's public debt doubled from $250 billion to $500 billion? Does he
not think that doubling the Canadian government's debt load and imposing
a mismanaged GST on the Canadian economy, both actions having been taken
by the Conservatives while in power, helped create many problems,
including the pension problem? In other words, does he not think that
increasing the Canadian government's debt load while they were in power
added to the pension problem in Canada?
Hon. Jean J. Charest: Mr. Speaker, I am pleased that the member for
Québec East is questioning my memory, because my memory of the period
when the GST decision was taken is very clear, exceptionally so. If I
am not mistaken, there was a minister at the cabinet table, his name
will come to me—what was it? It began with a B—ah, yes, Bouchard, it
was Bouchard.
One of the ministers at the cabinet table when the decision to
introduce the GST was taken was the former leader and founder of his
party, now Premier of Quebec. I assume the member for Québec East is
not in disagreement with his leader. Surely not; that would be too
glaring a contradiction.
Mr. Bouchard fought for these very policies, and finally won over
his colleagues at the cabinet table.
Since the member for Québec East was wondering about my memory, I
will go back over the whole story. What actually happened, objectively
speaking, to the government in 1984? What was the situation awaiting us
in 1984 when we came to power? We were looking at a situation where
Canada's public debt, under the former Liberal government, had increased
1,000 percent. The member for Ottawa Centre likes to talk about 1993, but he
forgets about the years before that. The public debt had increased by
1,000 percent under the former government. Annual spending was increasing by
an average of 14 percent annually.
We brought that down to within 3 or 4 percent of the rate of
economic growth. We managed to hold the line on spending and, in
1987, the former government managed to create a surplus in the
government's operating budget. That is the real story behind all
the rhetoric. Then we managed to lower the annual deficit from
8.4 or 8.6 percent of the GDP in 1984 to almost half of that.
That is the real story.
For those who are interested, the real story is that all the
measures to reduce spending put forward by the former government were
shot down by the Liberals now in power. The Minister of Finance who
took the Conservative government to task for its restrictive Bank of
Canada policy is now piling on even more restrictions. It is these same
people, including members of the Bloc Quebecois, who criticized the
government's spending.
[English]
Mr. Darrel Stinson (Okanagan—Shuswap, Ref.): Mr. Speaker, I
find it quite incredible to be sitting here in the House
listening to a member of the Conservative Party. In fact the
leader of the Conservative Party sat here in government for over
nine years. The Conservatives had a chance to fix the system.
They knew full well then that it had serious problems. Now I hear
this member putting on this caring, sharing concern for the
Canadian public. This surprises me. They like to talk, talk,
talk, but no action.
The member had a chance to create some action in the House. He
had the opportunity to give up his gold plated pension, but did
he do it? No. He can sit there and be eligible for over $4
million in pension and talk about the public who will have to try
and live on between $8,000 and $9,000. I find this very, very
intolerable. I cannot believe that he could stand up here and
say this.
An hon. member: Say it again, $4.3 million.
Mr. Darrel Stinson: He will collect $4.3 million. Talk about
a two tier system, this is a two tier system. This is a total
rip-off of the Canadian public at its finest. And he can stand up
here and say this.
1340
I have absolutely no sympathy for the government. None. And I
have no sympathy for the Conservatives either. There have only
been two parties ever elected to this House in Canada and they
are called Conservatives and Liberals. Back and forth we go.
Every time there is a problem, it was the other government, “it
was them who sat here before us who created it”.
Now we are at a point in time where the government has to jump
up these premiums for the Canadian public on a system that should
have been well financed and well-heeled forever. If this had
been run under the public's eye, you people would have been
serving time.
Hon. Jean J. Charest: Mr. Speaker, when you exaggerate to
that point you certainly render yourself insignificant.
Some hon. members: Oh, oh.
Hon. Jean J. Charest: Mr. Speaker, this is the same—
Mr. Dick Harris: Mr. Speaker, I rise on a point of order.
I think that the member for Sherbrooke owes the member for
Okanagan—Shuswap an apology. We do banter back and forth here
but we try to stay for the most part away from personal comments
that are meant to be slighted to the—
The Deputy Speaker: I do not think the hon. member is
rising on a point of order. I think he is rising on a point of
debate. He disagrees with what the member for Sherbrooke says
but I do not think the hon. member for Sherbrooke, as he is
alleging, has violated the rules of parliamentary debate.
The hon. member for Sherbrooke, a brief response.
Hon. Jean J. Charest: Mr. Speaker, as I was saying to the
member for Okanagan—Shuswap and now I will say it to the member
from Prince George, when you exaggerate to that point you render
yourself insignificant. That is certainly my advice.
I am surprised that the member from Okanagan or even Prince
George would actually get up in the House of Commons and address
this issue, especially after he and his leader said that they
would not move to Stornoway, the residence of the Leader of the
Official Opposition, that they would turn it into a bingo hall.
These are the same people who said to Canadians that they were
receiving letters from Canadians telling them to move the
opposition into Stornoway. I can see it now. There is probably
a riot in front of your office of people saying “please move
them in”.
This is the same political party that had a hidden expense
account for its leader and his family who went out and sermonized
other Canadians. I can tell that some members of the Reform
Party are embarrassed by this. You should be embarrassed because
there is a word for this. It is called hypocrisy.
Ms. Marlene Catterall (Ottawa West—Nepean, Lib.): Mr.
Speaker, this is my first opportunity to speak as the first
member of Parliament for the new federal riding of Ottawa
West—Nepean. I want to take this opportunity to thank my
constituents for the trust they have placed in me to represent
them in this Parliament into the next century and for generously
sharing with me their ideas and opinions during the election
campaign in June.
I also want to take this opportunity to pay tribute to the
hundreds of thousands of volunteers across this country who
worked in this campaign, whether they made donations, knocked on
doors, printed flyers or put up signs. These are the people who
keep democracy strong in this country and who make it possible
for people of limited means to seek office and to serve in
Parliament. This is an extremely important part of having a
Parliament that represents the people of this country.
Half of my constituents are new to me. They have been
represented since 1988 by Beryl Gaffney as the member of
Parliament for Nepean. They are accustomed to a member of
Parliament who is accessible, responsive and deeply involved in
her community. I shall do my best not to lower the standard of
service to which Beryl accustomed them.
Beryl's legacy to Parliament is also important. It is a
reminder to all of us that we are not here to serve ourselves but
to serve the greater good of our country and of humanity. She
especially reminded us that we are here to speak for those who
most need the support of a caring, compassionate society, for
children, for the poor and for those around the globe who are
suffering the abuse of their human rights.
1345
Canada's system of retirement income is one of the hallmarks of
a country that represents the values Beryl Gaffney espoused, a
country that cares for its citizens in need.
Fifty years ago this country had a serious problem of poverty
among its elderly. Since then we have built retirement income,
old age security, guaranteed income supplements, the CPP and
public assistance to the tune of $14 billion a year to people's
private retirement savings which has ensured each and every
Canadian a retirement income which allows them to live at a
modest level of dignity.
Although Canada's system is one of the best in the world, major
demographic and economic shifts are threatening its long term
sustainability. In particular the number of seniors will
escalate dramatically when the baby boom generation starts to
retire. The proportion of seniors in Canada will rise from 12
percent today to 16 percent by the year 2016, which is not as far
away as it sounds, and to nearly 25 percent of the population by
the year 2040.
This is important because at the same time there is a growing
proportion of seniors in our population, there will be a
shrinking proportion of working Canadians. As we all know, the
CPP is essentially a pay as you go system where the contributions
of today pay the pensions earned in the past.
Security in Canada's retirement income system has been a key
priority for the government. The reforms the government is
pursuing in part with the legislation on the Canada pension plan
today will maintain the three pillar retirement system. The
reforms will strengthen each pillar to ensure that all Canadians,
including those who will not retire until several decades from
now, will have an adequate, affordable pension which they will be
able to count on when they reach retirement age.
I represent a large number of seniors. One of my priorities in
the last Parliament was to make sure that the views of my
constituents were well understood and well represented to the
government on pension reform. Along with good health care,
adequate income is essential to a decent quality of life in
retirement.
The level of public interest in this was demonstrated admirably
when over 200 people turned out to an all day forum which I held
in 1995 to hear from constituents of all ages. Those individuals
have continued to be involved. We have kept them informed with
follow-up meetings and mailouts on how the reform of the public
pension system is developing. Those individuals have shared
their opinions with me. They have let me know their views on
what the government is planning to do. In turn I have kept the
ministers and the prime minister involved.
Let me tell the House some of the things I heard at the all day
forum. They have not changed their minds. They are a very
consistent bunch, the people of Ottawa West—Nepean. They wanted
to ensure the security of their income. Participants in the
workforce also wanted to ensure that they could count on the
Canada pension plan being there for them and being affordable
throughout their working lives. They wanted an assured benefit
when they reach retirement age. Those who are already in
retirement wanted to be assured that their benefits would not
diminish.
Over all, participants of all ages supported a publicly funded,
reliable, sustainable pension plan which is affordable and which
protects against inflation. The participants insisted that a
public pension system is instrumental in promoting fairness and
alleviating poverty.
They also understood the significant demographic changes in
Canadian society which are creating the need to ensure the
sustainability of the Canada pension plan for the long term. They
were also very concerned that those who are already in or near
retirement not be affected because they had based their
retirement planning on the expectation that the CPP would be
there for them.
1350
The government as a whole also consulted with Canadians across
the country. In co-operation with the provinces, hearings were
held in 18 different cities. Over 270 individuals and
organizations made presentations. Thirty-three sessions were
held. There were another 140 written submissions and over 6,000
telephone comments from Canadians as we looked at how we could
maintain our public pension system and what was needed to achieve
that goal.
The result of these consultations and subsequent
federal-provincial discussions is the legislation that is before
us today with respect to the Canada pension plan. I should point
out that the agreement reached was endorsed by eight of the
provinces, the territories and by the federal government. Clearly
we have a strong national consensus to act in the interests of
Canadians.
Basically what we have is a three part approach to restoring the
financial sustainability of the CPP and ensuring its viability
for future generations.
First by increasing contribution rates now, they will not have
to rise to the much higher levels predicted for future
generations. Second we will improve the rate of return on the CPP
fund by investing it prudently in a diversified portfolio of
securities. The investment is to be managed by a new independent
board at arm's length from the government. Third we will match
the growth in cost to the ability to pay by tightening up on the
administration of benefits and changing the way some benefits are
calculated.
[Translation]
A number of the principal features of the CPP remain
unchanged. First, individuals currently receiving pension,
disability, survivor or combined benefits under the CPP will see no
change in their benefits. Furthermore, people over the age of 65
as of December 31, 1997 who chose to begin receiving CPP pension
benefits after that date will not be affected by the changes
either.
Second, all benefits, with the exception of the death benefit,
remain fully indexed to inflation.
Third, the retirement age remains unchanged.
[English]
The 9.9 percent contribution rate now to be introduced over the
next few years ensures that the CPP will remain affordable for
Canadians into the future. Canadians will not have to face the
14.2 percent contribution rate projected in the 1995 actuarial
report on the CPP. I know there are some who would like to
pretend that does not need to be done, that we can just wait and
leave it to another generation to worry about the pensions 15 and
20 years from now. We do not believe that is responsible.
This legislation also ensures the continuation of full
indexation.
The cost of keeping the CPP sustainable will be shared more
equitably under the legislation. It will be shared among those
who will benefit both in the short term and in the long term. We
will not be carrying on paying out pensions now and leaving it to
a future generation of Canadians to worry about how they will pay
for their pensions then.
The fact that we will be reviewing the CPP every three years
ensures us that we will be well ahead of any changes and able to
address any problems that are developing on a more timely basis.
I want to talk about other approaches to pensions we have heard
about in the House.
Reform has told Canadians that they want to throw away the CPP
and set up some super RRSP system. But what the Reform Party
cannot tell us is how they will do it or at what price and what
will be lost.
The CPP provides more than just retirement pensions. It provides
disability benefits to contributors who are no longer able to
work for example. The CPP has other benefits that RRSPs do not
have. For example the time that parents spend out of the labour
force to care for their children does not diminish their CPP
pension, but it certainly does diminish their contributions to an
RRSP.
1355
Members of the Reform Party would like to see the government
phase out the CPP. What they do not tell Canadians is that if we
decided to shut down the CPP today, we would still have
outstanding obligations to current pensioners and those who will
be paying into the system for the next 30 to 60 years. The cost
of paying CPP's outstanding obligations on a year to year basis
would be close to 8 percent of contributory earnings for the next
10 years and then 6 percent to 7 percent for the following 30
years, on top of the cost of setting up their new RRSP.
I want to talk about the rhetoric that has been adopted by the
Reform Party and the Progressive Conservative Party in the House,
talking about CPP contributions as payroll taxes.
This country has been built on the philosophy of sharing of
responsibilities for one another, where we contribute. The CPP
was set up as a contributory plan. Today's paid workers
contribute to the CPP to pay the pensions of those who have come
before them and who have contributed to building their hospitals,
their educational institutions and the quality of life we now
have in this country. These are employer and employee
contributions. I am quite happy to leave the payroll taxes to
the neo-Cons on the opposite side of the House.
There is some unfinished business in the legislation before us.
One of the proposals that was on the table in the latest round of
negotiations was mandatory splitting of credits between spouses
in CPP.
We believe and it is legally enshrined in law in this country
that the family is an economic unit. Both partners in that
economic unit deserve to share fairly in the money that is earned
during the course of the marriage, whether one partner is working
in the paid labour force or working for free at home, or both are
working in the paid labour force.
One of the provisions our government put on the table and which
was supported strongly by the Government of Manitoba was to
enshrine mandatory splitting of CPP credits. Much to my regret,
and I challenged one of the NDP members on this earlier this
morning, the Government of Saskatchewan and the Government of
B.C. chose not to endorse this. In fact the Government of
Saskatchewan specifically allows a woman to sign away her rights
to split her husband's CPP pension. I am pleased to know that
the issue of sharing pension credits between two partners in a
household will be on the agenda two years from now when the CPP
is revisited.
When federal and provincial governments conducted their
cross-country consultations on the future of the CPP, Canadians
were unequivocal. They asked us to preserve the CPP. They asked
us to strengthen its financing. They asked us to improve its
investment practice. They asked us to moderate the growing costs
of benefits. They asked us to to keep it fully indexed.
I want to assure my constituents and all Canadians that this is
not simply a cost saving measure. Our purpose is to ensure that
Canadians have what they have enjoyed for 30 years, a publicly
funded pension plan that allows everyone earning income—
The Speaker: My colleague, you are in no way finished,
you still have five minutes. It is almost 2.00 p.m. and if we
could interrupt, you will have the floor when the debate
continues.
STATEMENTS BY MEMBERS
[Translation]
SUPREME COURT OF CANADA
Ms. Claudette Bradshaw (Moncton, Lib.): Mr. Speaker, I would
like to take this opportunity to express my support for the
appointment of Michel Bastarache to the Supreme Court of Canada.
[English]
Mr. Bastarache was a respected lawyer and judge of the New
Brunswick Court of Appeal when he was appointed to the Supreme
Court of Canada.
[Translation]
I am confident Mr. Bastarache will carry out his duties as
justice of the supreme court competently and efficiently. He is
recognized for his knowledge and his fairness. In addition, his
devotion to language and minority issues is highly regarded.
As an Acadian and a New Brunswicker, I am extremely proud of
his accomplishments and am confident he will do excellent work as
a justice of the Supreme Court of Canada.
1400
I am hugely disappointed at the refusal by the members of the
Bloc Quebecois to set aside their political goals and support a
francophone from outside Quebec. After all, Mr. Bastarache is a
francophone—
The Speaker: I am sorry to interrupt the hon. member. The hon.
member for Saanich—Gulf Islands has the floor.
* * *
[English]
CANADA PENSION PLAN
Mr. Gary Lunn (Saanich—Gulf Islands, Ref.): Mr. Speaker,
I rise on behalf of the residents of Saanich—Gulf Islands.
This Liberal government plans on doubling Canada pension plan
premiums. It is estimated that Canadians entering the workforce
will receive only 57 cents for every dollar taken from them.
Consider Aaron Fyke, a 25 year old resident in my riding, who
writes: “Please explain to me that I am not simply funding
someone else's retirement at the expense of my own”. Seniors
are asking me what became of the money that they contributed to
the Canada pension plan.
This Liberal government is implementing the single largest tax
grab in the history of Canada. The scam is irresponsible and
unacceptable. People are fed up.
The truth of the matter is that this government refuses to
accept that taxes kill jobs. Reform's retirement plan would
guarantee that contributions are for pensions and, more
important, Reform's plan would ensure considerably higher
pensions for Canadians.
* * *
TEACHERS
Mr. John Finlay (Oxford, Lib.): Mr. Speaker, the United
Nations Educational, Scientific and Cultural Organization,
UNESCO, designated October 5, 1997 as world teachers day, a day
to honour the teaching profession.
Before entering this House in 1993 I spent my entire
professional career in education. I began as a teacher and
progressed through the ranks to become a vice-principal,
principal and superintendent with the Oxford County Board of
Education.
Throughout my career I had the pleasure of working with teachers
who taught all grades from pre-kindergarten through grade 13.
These teachers deserve our thanks not only on world teachers day
but on every day of the year. Whether in the classrooms,
coaching sports teams, supervising clubs or directing a school
play, teachers play an integral role in the development of our
children.
On behalf of all members, I applaud our teachers for the
valuable work they do.
* * *
[Translation]
MEMBER FOR LAVAL WEST
Mrs. Maud Debien (Laval East, BQ): Mr. Speaker, on Thursday
last, the Liberal member for Laval West took offence at the
attitude of the Bloc Quebecois to the appointment of Liberal judge
Michel Bastarache, saying that sovereignists, and I quote, “never
hesitate to reward their separatist friends”.
The Liberal member would do well to look at her own situation.
From 1993, the new member, who was the defeated Liberal candidate
in Laval East, enjoyed the pleasures of Liberal cronyism until the
elections of 1997.
In June 1995, she went to Haiti as an election observer at
taxpayers' expense. In January 1996 she was appointed to the
International Centre for Human Rights and Democratic Development,
again at taxpayers' expense.
In June 1996, she was appointed commissioner of the Immigration and
Refugee Board at an annual salary of $86,400.
Rather than feigning indignation, the member for Laval West
should be blushing for having enjoyed the pleasures of cronyism.
* * *
[English]
FEDERATION OF CANADIAN MUNICIPALITIES
Mr. Bryon Wilfert (Oak Ridges, Lib.): Mr. Speaker, I have the
honour and pleasure to inform you that the Federation of Canadian
Municipalities has been selected from over 60 entries to receive
the scroll of honour award from the United Nations Centre for
Human Settlements, Habitat. This award was granted for
mobilizing elected officials and staff from Canadian
municipalities for the development of local communities and for
providing support to sister municipalities in developing
countries.
During the past ten years the FCM, in partnership with the
Canadian International Development Agency, implemented
international programs which have facilitated exchanges of
municipal expertise between elected officials, staff and
counsellors throughout the world from Canadian municipalities and
their counterparts from Africa, Latin America, Asia and central
Europe.
The presentation of the scroll of honour will be awarded in
Bonn, Germany today and I am sure the House congratulates the
Federation of Canadian Municipalities on achieving this
outstanding award on behalf of Canadian municipal governments in
this country.
* * *
TEACHERS
Ms. Karen Redman (Kitchener Centre, Lib.): Mr. Speaker, it
is with pleasure that I rise today to recognize world teachers
day which was celebrated yesterday.
The United Nations Educational, Science and Cultural
Organization, UNESCO, has designated October 5 as world teachers
day to honour the teaching profession.
1405
I think I speak for all of us here when I say that each of us
has had at least one teacher, whether primary or at the secondary
level, who made a lasting impression on us.
Many of us have teachers in our families and know first hand the
commitment in time and energy they put into their jobs. Teaching
is not a job that is left at school. For most teachers it
reaches into their lives through after school activities,
volunteering as sports coaches, band leaders, drama coaches and
social group co-ordinators. All these things together are what
provide the best educational and developmental opportunities for
our children.
Let us give a hand for the teachers across Canada and around the
world for the work they do.
* * *
THE FAMILY
Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Ref.):
Mr. Speaker, in view of national family week we recognize that
nearly a million men came to the Washington, D.C. mall on
Saturday to publicly state their promise to take greater
responsibility toward their community, church, workplace and,
most important, their family.
In what is described as the single largest religious gathering
in American history, the promise keepers rally proves that the
institution of the family is not a thing of the past but a
stronghold for the future.
Even U.S. President Bill Clinton stated he cannot deny the
sincerity of the men at the rally. Seeing the photo in Sunday's
Ottawa Citizen should silence the critics who denounce the
sincerity of the men, including many Canadians, who pledged to
keep their families strong, healthy and together.
Last week one of this Parliament's greatest family advocates
resigned her seat in an effort to keep her family strong. The
sincerity of Sharon Hayes equalled that of the men who marched on
the steps of the U.S. Capitol. Above all, family matters.
* * *
COMMUNITIES
Mr. Jerry Pickard (Kent—Essex, Lib.): Mr. Speaker, the
United Nations has designated today as world habitat day, a day
to reflect on our communities, their importance in our lives.
This year's theme is future cities, a theme that offers an
opportunity for people living in communities everywhere to
consider the current state of their city and to explore how
existing problems can be overcome and their communities made more
equitable, just and sustainable.
The conditions under which people live determine, to a large
extent, their health, productivity and sense of well-being.
Canadians are fortunate to live in the best country in the world
and are among the best housed people. That state is largely due
to the collaborative efforts of organizations such as Canada
Mortgage and Housing Corporation and its various partners.
Working in close collaboration with industry and a host of
government and non-governmental organizations, as well as
community and self-help groups, CMHC strives to encourage the—
* * *
[Translation]
QUEBEC ECONOMY
Mr. Benoît Sauvageau (Repentigny, BQ): Mr. Speaker, the time has
finally come to reply to the federalist demagogues who keep telling
anyone who will listen that the political climate in Quebec has
investors fleeing. It is just not true.
There are no less than 1,500 subsidiaries of foreign multinational
companies in Quebec. For 1996 alone, approximately 100 new investment
projects, totalling over $2.3 billion, were announced.
I could read you dozens of statements made by foreign investors who
say they are not worried about the political climate in Quebec.
Here is what one of many investors, namely the president of Intrawest,
said “I am not concerned at all by the political climate as I announce
$500 million in investments at Mont Tremblant”.
Quebec is attractive to foreign investors, and there is nothing the
federalists can do about it.
* * *
WORLD TEACHERS DAY
Mr. Yvon Charbonneau (Anjou—Rivière-des-Prairies, Lib.): Madam
Speaker, as we celebrate World Teachers Day, I would like to pay tribute
to my fellow teachers who have dedicated their lives to educating our
children.
A recent study by the International Bureau of Education confirmed
that the quality of life and social status of 50 million teachers across
the world had dropped drastically.
[English]
According to UNESCO, the teaching profession is the largest in
the world. In Canada there are more than 400,000 teachers.
[Translation]
I would like to recognize in particular the work of the Canadian
Teachers' Federation, represented in our gallery by its president, Jan
Eastman, its secretary general, Mr. Schryburt, and his deputy,
Mr. Weiner.
I would also like to salute the French speaking teachers of Quebec,
who belong for the most part to the Centrale de l'enseignement du
Québec, represented by Joanne Fortier and Carl Charbonneau, and the
Fédération nationale des enseignants et enseignantes du Québec, formerly
presided over by my neighbour on Montreal Island and current member for
Mercier.
* * *
1410
[English]
HEALTH
Mr. Grant Hill (Macleod, Ref.): Mr. Speaker, natural health
products are very important to Canadians as a preventive tool.
The federal government has been restricting choice in this area
through three proposals, cost recovery, removing products
arbitrarily from the shelves and the international Codex
proposals.
The health minister has been inundated by letters on this issue.
These irate citizens have influenced the minister. To his
credit, he has reversed his stand on the one issue of cost
recovery proposals. He still has a lot of work on this file,
though, in returning to the shelves products that have been
removed arbitrarily and also in shutting down these Codex
activities.
Congratulations to the members of the public who took the time
to write letters to the health minister on this issue. This is a
victory for them. They know that an informed Canadian public is
a far better judge of its health care needs than some distant
bureaucrat in Ottawa.
* * *
[Translation]
AUDIO-VISUAL PRODUCTION
Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Mr.
Speaker, yesterday the Minister of Canadian Heritage released a first
report on the new television and cable fund for the production of
Canadian programs.
This government initiative resulted in the production of over 2,200
hours of Canadian programs in the past year. In 1996-97, over 376
projects received financial support from this fund, for a total
investment in excess of $624 million.
While all regions of the country benefited from the fund,
audio-visual production more than doubled in the Toronto and
Montreal areas.
Audio-visual production creates over 30,000 direct jobs and 72,000
indirect jobs in Canada. Our government is very proud to have been the
instigator of a project which, while creating jobs, also supports and
helps—
The Speaker: I am sorry to interrupt the hon. member. The hon.
member for Yukon.
[English]
The Speaker: The hon. member for Yukon.
* * *
YUKON WEATHER STATION
Ms. Louise Hardy (Yukon, NDP): Mr. Speaker, the federal
government's decision to close the Yukon weather station will
have a detrimental effect on the Yukon economy and the safety of
the northern travelling public. All that will be left of the
federal government presence in the north will be a new but empty
federal building with no workers to provide flood warnings,
extreme weather warnings or aviation services.
The Yukon weather centre operates with 12 highly qualified
people and has been in the north since 1942. In the middle of
the national unity debate the federal government is telling us
that its policy for the north is still one of downsizing and
budget cuts and not one of a truly human relationship between the
government and its people.
The federal government is more than happy to provide bonuses of
$12 million to its top bureaucrats. That bonus would have kept
the Yukon weather forecast station operating for another 10
years. It is time for this government to live up to the words of
the throne speech and to keep the only northern forecast station
in the north.
* * *
[Translation]
BLOC QUEBECOIS LEADER
Mr. Jacques Saada (Brossard—La Prairie, Lib.): Mr. Speaker, last
week, the Bloc Quebecois leader said that Acadian artists should settle
in Quebec to avoid assimilation.
The hon. member should know that French Canadians deserve praise
for their efforts and that they did not wait for the Bloc Quebecois and
its paternalistic statements to fight for their identity. But the
member's comment goes much further. The Bloc leader is in fact
encouraging ethnic grouping.
I will refrain from saying what happens, as history teaches us,
when ethnic grouping is encouraged on a territorial basis.
I say to this House that the overwhelming majority of Quebeckers
reject this narrow and dangerous vision, which dates back to the last
century.
When making such comments, the Bloc Quebecois leader does not in
any way represent Quebeckers, whether they are federalist or not. Will
the member for Laurier—Sainte-Marie now tell anglophones in Quebec that
they will have to leave their province to avoid assimilation?
Out of respect for Acadians and for the whole—
The Speaker: I am sorry to interrupt the hon. member. The hon.
member for St. John's East.
* * *
[English]
NEWFOUNDLAND
Mr. Norman Doyle (St. John's East, PC): Mr. Speaker, given
the fact that the province of Newfoundland and Labrador continues
to suffer from having the highest unemployment rate in all of
Canada, which at 20 percent is more than double the national
average, it is only proper that this Newfoundland tragedy be
described for what it really is, a national disgrace.
As such it is indeed deserving of the special attention of the
Government of Canada. It is a chronic problem and a lack of a
solution to it does nothing for the image of Canada among the
leading industrialized nations of the world, of which Canada is
one.
1415
Surely a nation that can put a man in space can do something
about a long-standing problem a whole lot closer to home.
Therefore I call on the prime minister and the Government of
Canada to give this issue the attention it needs and the
attention it deserves.
ORAL QUESTION PERIOD
[English]
FOREIGN AFFAIRS
Mr. Preston Manning (Leader of the Opposition, Ref.): Mr.
Speaker, as you know, Canadians strongly support the fight
against international terrorism, but Canadians also believe in
maintaining the integrity of the Canadian passport.
Unfortunately that integrity and the safety of Canadians abroad
have been compromised by Israeli agents using Canadian passports
for an operation in Jordan.
When will the prime minister ask the Israeli prime minister for
a formal apology over this unfortunate incident?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, my Minister of Foreign Affairs has been in touch with
the minister of foreign affairs of Israel who said that his
country and his government regret very much the incident that
occurred last week and that they will initiate discussions with
this government to make sure that the same thing is not repeated
in the future.
I agree with the leader of the opposition that it is extremely
important for Canadians that the integrity and the value of the
Canadian passport not be jeopardized by the actions of other
people, as was the case in Jordan last week.
We have communicated with the government and it replied to the
minister over the weekend and this morning that—
The Speaker: The hon. leader of the opposition.
Mr. Preston Manning (Leader of the Opposition, Ref.): Mr.
Speaker, we appreciate the fact that there are discussions, but
our question was when is the prime minister going to ask for a
formal apology from the prime minister of Israel.
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, when the minister of foreign affairs of a country
expresses regret on behalf of his country and his government to
the Minister of Foreign Affairs it is in my judgment an
acknowledgement by that government.
I recognize that the prime minister of Israel has not called me
to offer the same comment, but the Minister of Foreign Affairs
has received this assurance from the official spokesman of the
government, the minister of foreign affairs for Israel.
Mr. Preston Manning (Leader of the Opposition, Ref.): Mr.
Speaker, what Canadians want are some straight answers and some
action on this issue.
For over a week now the government appears to have been in the
dark on this issue and has been keeping Canadians in the dark.
The government appears unsure of its facts and it is hesitant and
uncertain when it does disclose to the House what it knows.
The government is handling this issue like amateurs. That is
embarrassing surely to the government, it is embarrassing to this
House and it is embarrassing to Canadians.
What concrete steps is the prime minister prepared to take to
present all the facts concerning this incident to Canadians and
to prevent this type of incident from occurring again in the
future?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, we acted extremely diligently because we immediately
called back the ambassador to Canada for consultation. It is the
strongest form of protest that could have been expressed under
the circumstances, short of cutting relations with a country.
The reply from the minister of foreign affairs came a couple of
days later because of the religious situation in that country.
The Israeli government was not in a position to reply to the
government but it communicated with the Minister of Foreign
Affairs as soon as possible, according to what the minister of
foreign affairs of Israel said to my colleague.
* * *
POLITICAL CONTRIBUTIONS
Miss Deborah Grey (Edmonton North, Ref.): Mr. Speaker, a
company called Videon Inc. wanted to build a hotel in Shawinigan,
so it applied for a $600,000 federal grant. Videon had not
donated a cent to the Liberals ever before, but the very year it
applied for this grant it made a donation of over $5,000 to the
Liberal Party. In fact the Liberal fundraiser in that area is
now under criminal investigation.
Will the prime minister suspend this grant until the police can
confirm that this was not extortion of Videon Inc.?
Right Hon. Jean Chrétien (Prime Minister, Lib.): The
information given is not proven because I do not know of anyone
who is under investigation.
1420
Contributions to political parties in Canada are made under law
and are public. Every contribution is known. We will wait for
the investigation. I do not know who she is referring to. I do
not know if he is from my riding or another riding or from
Montreal. Let the police do their work before making frivolous
accusations.
Miss Deborah Grey (Edmonton North, Ref.): Mr. Speaker,
this truly is a wait and see government. It says wait and see
about everything. In fact, this $600,000 grant to Videon was
reported and announced a full month after a letter went to the
police from the minister of HRD to turn in this Liberal money
man. Therefore, it is no surprise. We do not need to wait and
see. The tainted grant went ahead anyway and the Liberal bagman
was still working for the Liberal Party.
If the Prime Minister is not bothered by these sort of
fundraising tactics, will he at least put this grant on hold
until the police clear up the Shawinigan shakedown?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, we know about the police investigation in my riding but
nothing has been made public. This is a fabrication by the hon.
member.
Let us wait for the police to do their job and get to the bottom
of this. If something is wrong then the person or persons will
have to face the law. I do not know if there is any
relationship between that person or this person and my riding.
Everything has been done above board and according to the rules
and regulations of—
* * *
[Translation]
FOREIGN AFFAIRS
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker, last
Friday, Norman Spector, the present president and publisher of the
Jerusalem Post, former Canadian ambassador to Israel and former
executive assistant to a Prime Minister of Canada, stated that for many
years Ottawa had collaborated with Mossad agents by providing forged
Canadian passports.
Would the Prime Minister confirm that, as stated by Mr. Spector,
there is or has previously been collusion between the Canadian and
Israeli secret services on the use of Canadian passports by Mossad
agents?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr. Speaker, I
have been informed by the Minister of Foreign Affairs that Mr. Spector's
accusation is completely unfounded.
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker,
similar allegations have been made by a former CSIS agent and a former
agent of Mossad.
I want to ask the Prime Minister whether he would agree that these
allegations are sufficiently serious for him to take the time to have
them checked by means of an internal investigation, for instance?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr. Speaker,
there has been an investigation, and the conclusion was that there was
no collaboration between our agencies and Mossad on the use of a
Canadian passport for unacceptable purposes.
Mrs. Maud Debien (Laval East, BQ): Mr. Speaker, my question is
directed to the Minister of Foreign Affairs.
Last week, the minister seemed as surprised as we were to hear that
Canadian passports had been used in a terrorist operation. He obviously
did not seem aware of the fact.
How can the minister, who just signed a joint agreement with
Israel, be so sure of himself and dismiss out of hand the allegations of
collusion between the two governments made by Mr. Spector?
[English]
Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.):
Mr. Speaker, no surprise was involved. When these two gentlemen
were arrested in Jordan and claimed they had Canadian passports
we immediately visited them. We were told they did not want our
services. That raised our suspicions. We went to the Jordanian
authorities to ask for information. They gave us the
information. As soon as we got the information we acted
directly. The prime minister denounced it to the House. We
recalled our ambassador and started discussions to lead to a
resolution in this situation.
The member suggests they were supplied. The fact of the matter
is that we have followed step by step a series of actions to make
sure that we defend our integrity. The comments of Mr. Spector
are simply irresponsible and help create the problem not solve
it.
[Translation]
Mrs. Maud Debien (Laval East, BQ): Mr. Speaker, the minister seems
to be putting a lot of faith in the joint investigation with Israel.
However, how can he shed light on this question when, as we heard
this morning, he cannot even get Israel's assurance that it will never
again use Canadian passports in this kind of operation?
1425
[English]
Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.):
Mr. Speaker, very clearly in the first discussion we had with the
foreign minister we received their very deep regrets about the
event. They are undertaking their own investigation into how
Canadian passports were used. They are co-operating with us in
our investigation and have agreed to establish a process which
will result in the kind of agreement that will never see it
happen again.
It seems to me that is very effective action by the Canadian
government.
Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, my
question is also for the Minister of Foreign Affairs.
Canadians are justifiably indignant that our Canadian passport
has become the passport of preference for international
terrorists.
What measure does the Minister of Foreign Affairs propose to
take to ensure that the use of Canadian passports is strictly
monitored and that any abuses are met with swift sanctions?
Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.):
Mr. Speaker, we share the indignation of the hon. leader of the
New Democratic Party. The only difference is that we expressed
our indignation five or six days ago. That really demonstrates
clearly that we are taking the matter very seriously.
As to the protection of the passports, we have one of the most
advanced systems for checking the security of our system. We are
constantly reviewing it. We have already undertaken to initiate
discussions at the ICAO, which is the international body that
deals with international standards in these matters.
I can assure the House that we will take every measure possible.
But, Mr. Speaker, there is a human factor—
The Speaker: The hon. member for Halifax.
Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, the
minister tells us that he is concerned and I am sure that he is.
However, we want to know what leadership the government is taking
to ensure the integrity and the security of Canadian passports.
Has the minister raised this matter at the United Nations? Has
he raised it with the International Civil Aviation Organization
and with Interpol? If so, can he give the House some indication
of what kind of progress has been made?
Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.):
Mr. Speaker, most importantly I have raised the matter with the
Israeli government. That is where the problem really existed and
that is what really counts. Furthermore, we have taken the matter
up at the ICAO which is responsible for the matter. I should
inform the hon. member that this is part of an ongoing review
that takes place at ICAO. We will raise the matter there.
The most important thing is to engage in the kind of process
that we put before the Israeli government this weekend to make
sure that it no longer uses our passports for these kinds of
purposes.
* * *
[Translation]
GOVERNMENT GRANTS
Hon. Jean J. Charest (Sherbrooke, PC): Mr. Speaker, my
question is for the member for Saint-Maurice and concerns the grant
of $600,000 that was given to a hotel chain in his riding.
Can the member for Saint-Maurice tell us how a grant came to
be given to a hotel chain out of the employment insurance fund, to
which Canadian workers and business contribute?
How is it his own government made such a strange decision?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr. Speaker,
applications are made for the riding of Saint-Maurice just as they
are for the riding of Sherbrooke and all the other ridings.
The people in each riding have access to programs that apply
in all ridings, and if the hon. member for Sherbrooke wants to know
how many grants the Department of Human Resources Development
accorded in his riding, it would be glad to provide the
information.
[English]
Hon. Jean J. Charest (Sherbrooke, PC): Mr. Speaker,
maybe the member for Saint—Maurice can help us understand how it
is that such an extraordinary grant was given to a hotel chain in
his riding. The $600,000 used came from the employment insurance
fund. This is money that was contributed by workers and small
businesses together for the purposes of employment insurance and
used by the Prime Minister in his riding to help a hotel chain.
How could this happen?
[Translation]
Hon. Pierre S. Pettigrew (Minister of Human Resources
Development, Lib.): Mr. Speaker, I would like to clarify the issue
here.
The grant awarded the Auberge des Gouverneurs in the riding of
Saint-Maurice comes not from the transitional job creation fund,
the subject of my letter to the RCMP, but rather targeted salary
grants. Therefore, the money does not from the transitional job
creation fund.
* * *
1430
[English]
GOVERNMENT SERVICES
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, Brian
Mulroney used to run the government like his own personal club,
making sure that Tory friends were well taken care of. Back
then huge government advertising contracts went to a company run
by Dalton Camp and Hugh Segal.
Now the Liberals are looking after their friends, giving $29
million in government contracts to the firm that ran their last
two federal election campaigns.
My question is for the Prime Minister. How is this different
from the way the Tories did it?
Hon. Alfonso Gagliano (Minister of Public Works and
Government Services, Lib.): Mr. Speaker, in June 1994, six
months after we took office, we introduced a new system in which
contracting was open and everybody had a chance.
Some hon. members: Oh, oh.
Hon. Alfonso Gagliano: If they are interested in the
truth they should listen.
Not only that, but for larger contracts we created a committee
on which members of the advertising industry and government
officials sit to choose the most competent bidder.
Maybe the hon. member should—
The Speaker: The hon. member for Elk Island.
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, they
changed it all right. They replaced the Tories with Liberals.
Two of the people on the finance department's contract selection
committee are senior Liberal Party workers. Jean Prévost was the
Quebec vice-president of the Liberal Party and Marlene Hore was
right near the top in running the advertising for the Liberal
election campaign.
Since when is it okay for party officials to have their fingers
in awarding government contracts?
Hon. Alfonso Gagliano (Minister of Public Works and
Government Services, Lib.): Mr. Speaker, maybe the hon.
member should speak to his own ad campaign manager who said that
he had no evidence that the process was unfair or weighted in
favour of Liberal political allies.
Maybe before the member makes an accusation he should speak to
his own ad manager in the last election campaign.
* * *
[Translation]
RCMP INVESTIGATIONS
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, the Prime Minister
knew from the beginning of last March that allegations of influence
peddling had been made with respect to an organizer of the Liberal Party
of Canada and that these allegations were sufficiently serious that a
minister of his government put the RCMP in the picture.
My question is for the Prime Minister. What action did he take
from that point on to ensure that neither he nor his ministers were
compromised during the election campaign with someone about whom there
were serious suspicions and who was under investigation by the RCMP?
Hon. Pierre S. Pettigrew (Minister of Human Resources Development,
Lib.): Mr. Speaker, I would like to reassure the opposition about this
very important matter.
Immediately I got wind of the allegations in March, I turned to my
officials and asked my deputy minister to assure me that the entire
consultation process, a very broad and open process involving several
stakeholders, such as the Government of Quebec, Ms. Harel, and
government opposition members, as you know, in every riding across
Canada, including those in Quebec, was fine. My officials confirmed to
me that the process was transparent. We therefore went ahead with it.
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, we never find it
reassuring when the Minister of Human Resources Development is answering
questions. His answers are never very clear.
I have a question for the Prime Minister. The Prime Minister was
aware that there were serious suspicions about a Liberal Party
organizer. The most basic precaution for a government leader is to
ensure that, during an election campaign, he and his ministers do not
come into contact with someone under investigation.
Knowing that this was his responsibility, what did the Prime
Minister do to avoid an unfortunate situation, that is, contact between
this person and himself or his ministers?
Hon. Pierre S. Pettigrew (Minister of Human Resources Development,
Lib.): Mr. Speaker, what I am trying to explain right now is very
simple. I am trying to explain that there were a very large number of
stakeholders as part of this broad, open and transparent consultation.
Many stakeholders were consulted, the very strength of our system
being the broad and open process of consultations, which includes the
Government of Quebec, Ms. Harel's department, members throughout Quebec,
as wwll as the Société québécoise de la main-d'oeuvre. The information
in these files is obviously not confidential from a commercial point of
view.
* * *
1435
[English]
REVENUE CANADA
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker,
at a press conference this morning Dennis Coffey, a 25 year
veteran of Revenue Canada, repeated his allegations of serious
fraud, nepotism and abuse on the part of senior Revenue Canada
officials. Department lawyers have tried to muzzle Mr. Coffey
and the minister has attacked his integrity, dismissing out of
hand his allegations.
When the minister said in the House that Mr. Coffey's
allegations were not true, he must have had evidence to back up
that assertion. Where is that evidence? Will he table it in the
House today?
Hon. Harbance Singh Dhaliwal (Minister of National Revenue,
Lib.): Mr. Speaker, the employee in question has filed with
the Public Service Commission Board an appeal that he was denied
an appointment. This is before this quasi-judicial board.
We respect the process. In respecting the process—I have said
this to him and I will repeat—it would be inappropriate for me
to comment on a matter before a quasi-judicial board. Maybe he
could understand that this time.
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker,
if that is so, why did the minister deny the allegations made at
that hearing? He has already gone against the very principles of
the quasi-judicial body he is talking about.
Will the minister step outside the House and apologize to Mr.
Coffey for calling him a liar, for calling into question the
integrity of this 25 year veteran of the department?
Why does he not investigate these allegations independent of the
commission that is looking at his affidavit?
Hon. Harbance Singh Dhaliwal (Minister of National Revenue,
Lib.): Mr. Speaker, the member is more interested in
theatrics than in facts. We have to deal with the facts.
The fact of the matter—and he even said it himself—is that
because it is before a quasi-judicial board we should not be
commenting on it. He should know better. He should be
responsible and understand that there is a process.
We respect that process and will continue to respect it.
* * *
[Translation]
RCMP INVESTIGATIONS
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker, the
Minister of Human Resources Development told us about the action he took
to ensure that the allegations we have been discussing for several days
regarding Liberal Party fundraising would not lead to the spread of
fraudulent activities. So he took action in his own department.
However, I want to ask the Prime Minister, who did not answer these
questions, what he did in the government as a whole, since there is more
than one department that awards contracts, when the Prime Minister, as
was his duty, intervened in cabinet to ensure that such activities did
not take place during and before the election campaign?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr. Speaker, all
ministers were instructed that if charges of this nature are brought to
their attention, it is their duty to inform the police immediately. That
is exactly what the minister did. He did his duty, he handed the case
over to the police, who are investigating the matter, and when the
police finish their investigation, they will draw the appropriate
conclusions.
These instructions apply to all ministers at this time. It is the
best way to handle this, because when charges of this nature are made,
it is the duty of the police to intervene.
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker,
considering that such allegations were made, did the Prime Minister
himself or any of his ministers intervene to ensure that the individual
or individuals in question were not involved with them in the process of
awarding grants?
Since he was aware of these allegations, did he inform cabinet that
this kind of influence peddling was taking place during that period, as
of March 6, 1997?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr. Speaker, they
are investigating a very specific case. The minister did exactly what he
was supposed to do by informing the police of the charges, and the
police will conduct their investigation.
At the time the minister had no better course of action, and those
were exactly the instructions he received, like the other ministers.
That is the way to handle this, in other words, inform the police and
let them do their job.
* * *
[English]
ABORIGINAL AFFAIRS
Mr. Mike Scott (Skeena, Ref.): Mr. Speaker, I have
another question on accountability. Nearly 30 years ago the
prime minister promised aboriginals “full social, economic and
political participation in Canadian life”.
Three decades later the heartbreaking reality is that aboriginal
youth commit suicide at six times the national rate, aboriginal
infant mortality is twice as high, and more aboriginal youth go
to jail than to university.
Given that the federal government has spent over $80 billion on
this matter since 1969, could the prime minister give us an
accounting of what went wrong?
1440
Hon. Jane Stewart (Minister of Indian Affairs and Northern
Development, Lib.): Mr. Speaker, I am glad my critic opposite
understands the circumstances that face aboriginal people.
Our government is committed to working in partnership with
aboriginal people, with the first nations, with the Inuit.
I would hope in the course of this that he understands the role
he can play as a member of Parliament as we build together a
strategy that will ensure all aboriginal people participate fully
in the wealth and prosperity of this great country.
Mr. Mike Scott (Skeena, Ref.): Mr. Speaker, the
minister's answer in no way addresses the issue of what happened
over the last 30 years. If we talk to ordinary people in bands
like the Stoney, the Siksika, the Kwanlin Dun, the Samson Cree,
the Shushwap and on and on, they will tell us where the money is
gone. It has been wasted, pocketed, misappropriated, gone
missing, blown on fancy trips and plundered in 100 different
ways.
What tools will the prime minister give to ordinary aboriginals
to hold their band councils and the department of Indian affairs
accountable?
Hon. Jane Stewart (Minister of Indian Affairs and Northern
Development, Lib.): Mr. Speaker, I am glad to be able to
respond to this question.
The Reform Party has done an incredible job at trying to smear
and broad brush all aboriginal frustrations on the basis of a
very few.
If we look at the facts the vast majority of first nations are
accountable. They provide transparent governance to their
people. They have processes of accountability. They have
systems that are some of the best. We need to work with them to
build capacity and good governance for aboriginal people.
* * *
[Translation]
MONEY LAUNDERING
Mr. Michel Bellehumeur (Berthier—Montcalm, BQ): Mr. Speaker, my
question is for the Minister of Justice.
Here is a little quiz for the minister: What do Joseph Lagana,
Vincent Vecchio, Richard Judd, Santiago Sanchez, Jean Lamarche,
René Rodrigue and Giuseppe Tanaglia have in common? They were all
found guilty of money laundering and they were all released just
a few months after their sentence was handed down, that is after
serving only one-third or one-sixth of the sentence.
What is the minister waiting for to introduce legislation on money
laundering, as the Bloc Quebecois has been asking for a long time, so as
to, among other things, prevent anyone from being released before
serving a full sentence?
[English]
Hon. Anne McLellan (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, I must confess I am not
exactly sure what the hon. member is referring to.
If he is referring to conditional sentencing provisions that
were put in place by my predecessor, that legislation deals with
an array of crimes in which it is possible to have those who are
sentenced to do time of less than two years but in fact are—
The Speaker: The hon. member for Hamilton Mountain.
* * *
HEALTH
Ms. Beth Phinney (Hamilton Mountain, Lib.): Mr. Speaker,
my question is for the Minister of Health.
Many of my constituents have expressed concern regarding the
usage of herbal remedies and the regulation of these natural
products.
What action is the government taking to ensure the accessibility
and regulation of natural health remedies to protect both
consumers and practitioners?
Hon. Allan Rock (Minister of Health, Lib.): Mr. Speaker,
millions of Canadians now make use of natural products and herbal
homoeopathic remedies for their personal health needs. The
government believes that Canadians should have the broadest range
of choice available to them when they decide what is good for
them individually.
As a result we have made a fundamental change in the way herbal
remedies and natural products will be regulated. We have decided
to exempt those products from the regulation that will come into
effect next January 1. Instead we will refer the whole matter of
regulating these products to the health committee. The key thing
is—
The Speaker: The hon. member for Calgary Northeast.
* * *
NATIONAL DEFENCE
Mr. Art Hanger (Calgary Northeast, Ref.): Mr. Speaker,
the public has a right to know what is happening in defence
headquarters.
The Somalia inquiry pointed its finger at the department of
defence bureaucrats who deliberately prevented the release of
pertinent information.
What specific steps will the minister take to address the
accountability recommendations outlined in the Somalia report so
the public can see what is going on in that department?
1445
Hon. Arthur C. Eggleton (Minister of National Defence,
Lib.): Mr. Speaker, I do not agree with the preamble to the
question.
We are looking at the 160 recommendations of the Somalia
inquiry. As indicated, I think we will find agreement with most
of them. Very soon we will issue our response. We will not only
respond to the Somalia inquiry but we will comment on the many
things that we have done since then to bring about institutional
changes and reforms in the Department of National Defence and the
Canadian forces.
Mr. Art Hanger (Calgary Northeast, Ref.): Mr. Speaker,
when it comes to the recommendations, it has taken this minister
a long time to get down to the basics.
The minister knows full well there is a culture of cover-up in
that department that still exists and he still has not dealt with
that. The new chief of defence staff stated that he wants more
openness and he immediately put the boot to the military top
ranks. Now it is time to purge the bureaucrats from the ranks.
Why will the minister not turf the senior bureaucrats who are
responsible for trying to hide the truth before another bad
report comes in?
Hon. Arthur C. Eggleton (Minister of National Defence,
Lib.): Mr. Speaker, we do not have people who are trying to
hide the truth.
There is no doubt that during the time of the Somalia incidents
poor judgment was exercised in the case of some people, but there
has been no government wide or forces wide conspiracy and none
was found in the Somalia inquiry report.
We are not waiting for the response to the Somalia inquiry
report. We have already instituted many changes in terms of
leadership, management, training and many other factors which
affect the Canadian forces, so that we can all continue to be
proud of the good work that they do.
* * *
ENVIRONMENT
Mr. Rick Laliberte (Churchill River, NDP): Mr. Speaker,
my question is for the Minister of the Environment.
It has been reported that the Chrétien government wants more
cuts to the environment, another—
The Speaker: I would ask the hon. member to go directly
to his question.
Mr. Rick Laliberte: Mr. Speaker, will the minister defend
her department staff and mandate from the finance minister's
destructive financial policies?
Hon. Christine Stewart (Minister of the Environment,
Lib.): Mr. Speaker, I believe my colleague refers to a news
item that talked about additional cuts to staffing in Environment
Canada. This is not a new agenda. This results from the 1996
program review cuts. We had hoped that we would be able to
prevent additional layoffs in the department through cost
recovery programs, but our analysis indicated we had to take
action now.
Mr. Rick Laliberte (Churchill River, NDP): Mr. Speaker,
it is reported that the environmental protection branch, a key
department that helps regulate polluting industries, is targeted
for cuts consistent with the ongoing direction of
federal-provincial harmonization.
Will the minister explain to this House the contents and the
extent of the discussions on harmonization with provincial
governments and the impact they will have on federal
environmental responsibilities and jurisdictions?
Hon. Christine Stewart (Minister of the Environment,
Lib.): Mr. Speaker, the talks that are occurring right now
have nothing to do with a harmonization agenda. In fact our
department is very concerned about protecting our environment and
the health and safety of all Canadians. Our processes of
reviewing our priorities are going to ensure that those
objectives are met.
Harmonization is a totally different topic. It is one whereby
the federal government works collaboratively with its provincial
partners on a specific agenda to make sure that the environment
is protected to the highest of standards.
* * *
[Translation]
RCMP INVESTIGATIONS
Mr. André Bachand (Richmond—Arthabasca, PC): Mr. Speaker, last
week we learned that after writing to the RCMP, the Minister of Human
Resources Development informed two of his cabinet colleagues, namely the
Minister of Public Works, who was responsible for the election campaign
in Quebec, and the President of the Treasury Board. This is strange.
1450
My question is for the President of the Treasury Board. Will the
minister confirm to this House that one or several employees in his
Montreal office conveyed to or shared with Pierre Gobeil, who is
currently under investigation, or other members, confidential government
information for financing purposes?
Hon. Marcel Massé (President of the Treasury Board and Minister
responsible for Infrastructure, Lib.): Mr. Speaker, since the
information on the companies was not of a confidential nature, as the
Minister of Human Resources Development indicated, and since the
information was widely disseminated, including to opposition parties and
to the provincial government, the answer to the hon. member is no.
* * *
[English]
POLITICAL CONTRIBUTIONS
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC):
Mr. Speaker, if the human resources development minister was
doing what the prime minister suggests by simply fulfilling his
duty, why was it that the Minister of Human Resources Development
felt it was incumbent upon him to report this to the minister of
public works and the President of the Treasury Board immediately
after bringing this to the attention of the RCMP? Why did this
happen and why did he feel it was necessary to bring it to the
attention of those two particular ministers?
Hon. Pierre S. Pettigrew (Minister of Human Resources
Development, Lib.): Mr. Speaker, to me it is absolutely
elementary that when allegations have been brought to your
attention that you have actually written to the police and
reported them to the police, that after you have made your
decision and taken action upon them, you do inform your
colleagues who are responsible for the organizations touched by
the allegations.
* * *
[Translation]
ACID RAIN
Mr. Claude Drouin (Beauce, Lib.): Mr. Speaker, my question is
for the Minister of the Environment, Ms. Christine Stewart—
Some hon. members: Oh, oh.
The Speaker: Dear colleague, you are not to use the name of
the minister but rather her title.
Mr. Claude Drouin: Mr. Speaker, my question is for the
Minister of the Environment. Acid rain is of great concern to all
foresters, especially those in my riding of Beauce.
I would like to know what measures the government plans to
take to alleviate this problem.
[English]
Hon. Christine Stewart (Minister of the Environment,
Lib.): Mr. Speaker, the federal government through its
various programs in collaboration with partners has been able to
reduce sulphur dioxide emissions by half since the 1980s. A joint
report has recently indicated that we have a lot further to go,
that we must continue to reduce those emissions by as much as up
to 75 percent.
The federal government when meeting with energy and environment
ministers from the provinces in the coming weeks will discuss the
recent report and find out how we can indeed reduce the emissions
in order to protect our industries and health in Canada.
* * *
CANADA PENSION PLAN
Mrs. Diane Ablonczy (Calgary—Nose Hill, Ref.): Mr.
Speaker, today we are debating the Canada pension plan. The
contributions for this plan under the government's proposal would
be nearly doubled over five years, yet the return for people just
entering the plan would be less than 2.5 percent and that is according
to the government's own actuaries.
I ask the minister how this can possibly be fair to younger
Canadians.
Hon. Paul Martin (Minister of Finance, Lib.): Mr.
Speaker, as a result of the change in the plan whereby it will be
invested in the markets by a private sector investment board at
arm's length from government, it is fully expected that the plan
will in fact have a return commensurate with any private sector
plan. Certainly that is a better return than that suggested by
the Reform Party under the super RRSP given the fact that its
administration costs are going to be the lowest of any pension
plan in the country.
* * *
[Translation]
SATELLITE DISHES
Mrs. Francine Lalonde (Mercier, BQ): Mr. Speaker, my question
is for the Minister of Industry.
In its July 1995 statement, the government wrote that the CRTC
should not deny operating licences to companies providing direct
satellite broadcasting services for reasons of economic viability.
Is the minister aware that this is why he is directly
responsible for the bankruptcy of Alphastar and its impact—
The Speaker: The parliamentary secretary has the floor.
1455
[English]
Mr. Walt Lastewka (Parliamentary Secretary to Minister of
Industry, Lib.): Mr. Speaker, members of the House will know
that the CRTC is a separate body at arm's length from the
government. It has reviewed these items and made its decision.
If there is any additional information which needs to be brought
forward, it may be forwarded to the CRTC.
* * *
HEALTH
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Mr.
Speaker, almost two weeks ago the Minister of Health announced a
moratorium on cuts to the drug and food research lab and
specifically promised to undo the food research reductions that
he had ordered in July. Twelve days later the affected research
labs are still sitting idle, knowledgeable scientists are leaving
the country and Canadians are unprotected in the event of a
bacteria attack in Canada's food system.
Will the minister commit today to giving back to the scientists
the equipment he took away in July so that they can get on with
the job of protecting Canada's food supply?
Hon. Allan Rock (Minister of Health, Lib.): Mr. Speaker,
the member and the House knows my commitment. My commitment is
to the safety of Canadians.
I put a moratorium on further cuts in the health protection
branch. I am about to appoint an arm's length board of
scientists who will give independent advice on these issues. We
are going to consult with Canadians and with those who know on
the future of the health protection branch. We are going to make
sure that the bottom line for this government is also the bottom
line for Canadians. Safety comes first.
* * *
ENVIRONMENT
Mr. Gerald Keddy (South Shore, PC): Mr. Speaker, my
question is for the environment minister.
The $31 billion Canadian oil and gas industry has not been
invited to the environment conference as part of the official
delegation in Kyoto, Japan.
The government's fondness for spending taxpayers' money has
incited fear that it may impose a carbon tax. The oil and gas
sector will have to try to survive anything decided in Kyoto.
Could the environment minister tell us why the Canadian
petroleum producers have not been invited to Kyoto?
Hon. Christine Stewart (Minister of the Environment,
Lib.): Mr. Speaker, the federal government is currently very
engaged in preparing for the Kyoto agenda in December. As part
of that ongoing work I have been meeting on a regular basis with
provincial counterparts, with business and industry, with
environmental NGO groups. Among those partners have indeed been
representatives of the fossil fuel industry. I am very open as
are my other colleagues here to their comments and concerns
around meeting our objectives for Kyoto, Japan.
* * *
MULTICULTURALISM
Ms. Sarmite Bulte (Parkdale—High Park, Lib.): Mr.
Speaker, my question is for the Secretary of State for
Multiculturalism.
Media reports today indicate that while support for immigration
has grown gradually in recent years, some Canadian communities
are less tolerant than others. What is the government doing to
combat racism and to reinforce respect for diversity in this
country?
Hon. Hedy Fry (Secretary of State (Multiculturalism)(Status
of Women), Lib.): Mr. Speaker, that is precisely why the
multiculturalism program exists. We have just set up the
Canadian Race Relations Foundation so that we can deal with the
issue of racism across the country.
We also have programs in our health institutions,
municipalities, police forces and schools to be able to develop
grassroots programs to assist communities in dealing with racism
and tolerance.
I want to point out to the hon. member that in spite of the fact
that we complain about some societies being less tolerant than
others, the overall average score even for the least tolerant in
our communities in Canada is still almost close to five, with
five being the most tolerant of all.
* * *
BRITISH COLUMBIA
Mr. Randy White (Langley—Abbotsford, Ref.): Mr. Speaker,
my question is for the Prime Minister.
Over the years the government has called crime in British
Columbia as isolated incidents. Military bases have closed in
British Columbia. A fisheries minister from British Columbia
fails to support the province in its salmon problems.
B.C. sends its concerns, its hopes and its money to Ottawa. Are
the only things Ottawa can send to British Columbia disrespectful
cabinet ministers and the bills for this government's outrageous
spending habits?
1500
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, we are concerned about the happiness of the people
in British Columbia. We have chosen Vancouver as the location
for the big APEC meeting that will be held in November.
If there is any place in Canada that has benefited from the open
skies policy it is the Vancouver airport. There will be 8,000
more flights coming into Vancouver during the next year due to the
opening up of Vancouver and British Columbia to the Pacific. The
reason we have made this year the year of the Asia-Pacific is
Canadians know that the gate to the Asia-Pacific for our
country is Vancouver and British Columbia.
* * *
PRESENCE IN GALLERY
The Speaker: I draw the attention of members to the
presence in the gallery of members of a delegation of
parliamentarians from the National People's Congress of the
People's Republic of China.
Some hon. members: Hear, hear.
* * *
POINTS OF ORDER
COMMENTS DURING QUESTION PERIOD
Ms. Louise Hardy (Yukon, NDP): Mr. Speaker, the member
for Skeena brought up the name of the Kwanlin Dun band in
referring to having misappropriated funds or in terms that were
quite derogatory to the band.
The people of Kwanlin Dun are very cautious with their funds and
I would like the member for Skeena to withdraw the name of
Kwanlin Dun
The Speaker: I would not find this to be a point of
order. I think it is a point of debate because it is a way of
different people looking at things.
1505
Mr. Randy White: Mr. Speaker, a point of order was called
on one of my colleagues and he did not get the opportunity to
respond, even though the Speaker said it was a point of debate.
The Acting Speaker (Mr. McClelland): The Chair has
already ruled that was not a point of order.
ROUTINE PROCEEDINGS
[English]
RESERVE FORCE ACT
Mr. Jim Hart (Okanagan—Coquihalla, Ref.) moved for leave
to introduce Bill C-232, an act to facilitate participation in the
reserve force.
He said: Mr. Speaker, I would like to thank the hon. member for
Calgary Northeast for seconding this bill.
Canada is relying more on reservists to meet its military
commitments. With the recent downsizing of the regular force the
demand on reservists will undoubtedly increase.
The 1996 report on the restructuring of the reserves found that
reservists had a serious training deficit when compared with
trades and ranks in the regular force. Part of the problem is
that reservists are unavailable for training, often due to the
demands of their jobs or difficulty in scheduling time off to
coincide with the training exercises and courses offered.
Many reservists use their annual vacations to attend exercises
essential to developing their military skills. This is a great
price for them and their families to pay, to have to forfeit a
well deserved vacation to serve their country.
If we are to have an effective volunteer reserve force and if
Canada is to meet its international commitments we must take
steps to ensure that reservists are able to get the training they
need and the time required to get that training.
This bill seeks to ensure that employees of the federal
government are given the time they need for training in Canada's
reserves. This will show leadership to employers in the private
sector and facilitate the development and professionalism of
Canada's citizen soldiers.
(Motions deemed adopted, bill read the first time and
printed)
* * *
FINAL OFFER ARBITRATION IN RESPECT OF WEST COAST PORTS
OPERATIONS ACT
Mr. Dale Johnston (Wetaskiwin, Ref.) moved for leave to
introduce Bill C-233, an act to provide for the settlement of
labour disputes affecting west coast ports by final offer
arbitration.
He said: Mr. Speaker, I would like to thank the hon. member for
Calgary Northeast for seconding my bill.
This is the second time this bill has been presented to the
House. I presented it to the House during the last Parliament. I
think that introducing it to the House now is timely because we
expect that amendments to part I of the Canada Labour Code will
come back to the House.
My motion impacts very positively on a final offer selection
arbitration settlement mechanism for west coast ports. It would
be a welcome addition to part I of the labour code. I look
forward to debating it in the House.
(Motions deemed adopted, bill read the first time and
printed)
* * *
CROWN LIABILITY AND PROCEEDINGS ACT
Mr. Art Hanger (Calgary Northeast, Ref.) moved for leave
to introduce Bill C-234, an act to amend the Crown Liability and
Proceedings Act.
He said: Mr. Speaker, I would like to thank the hon. member for
Wetaskiwin for seconding the bill.
1510
It is my pleasure to rise today to reintroduce a bill that would
amend the Crown Liability and Proceedings Act to ensure that
inmates serving penitentiary sentences will not be able to sue
the federal government or its employees.
More specifically, this legislation would prohibit lawsuits to
be filed by inmates against the federal government for matters
arising as a result of or during their penitentiary sentence.
There is urgent need for this type of legislation in Canada.
People are imprisoned because they do not respect the law. They
should not be able to further overload the legal system with
frivolous litigation, particularly at taxpayer expense.
This legislation, if adopted, would put an end to the wasteful
abuse of the Canadian legal system at the hands of inmates. I
would encourage all members of the House to carefully consider
this legislation.
(Motions deemed adopted, bill read the first time and
printed)
* * *
COMPETITION ACT
Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.): moved
for leave to introduce Bill C-235, an act to amend the
Competition Act (protection of those who purchase products from
vertically integrated suppliers who compete with them at retail).
He said: Mr. Speaker, I would like to thank the hon. member for
Oak Ridges for seconding this bill. Members will know that I
introduced the very same bill in the last Parliament.
Unfortunately it died on the order paper. It is a bill that is
both timely and necessary in terms of ensuring for consumers in
this country that we actually have a fair, competitive and
healthy market in terms of gas pricing.
It is very clear that with what transpired this summer and the
routine fleecing of consumers at the pumps there is need for
protection, particularly for the independent suppliers of product
who frequently face reductions in the margins at which they
operate at the retail level.
This enactment will give the basis for the enforcement of fair
pricing between the manufacturer who sells the product at retail,
either directly or through an affiliate, and also supplies the
product to a customer who competes with the supplier at the
retail level in order to give the customer a fair opportunity to
make a similar profit.
In effect it changes two sections of the Competition Act,
section 50 dealing with predatory pricing and section 78 dealing
with abuse of dominance.
(Motions deemed adopted, bill read the first time and
printed)
* * *
PETITIONS
NATIONAL UNITY
Mr. Randy White (Langley—Abbotsford, Ref.): Mr. Speaker,
I have a petition signed by constituents in my riding who ask
that the prime minister and the Parliament of Canada declare and
confirm immediately that Canada is indivisible, that the
boundaries of Canada, its provinces, territories and territorial
waters may be modified only by a free vote of all Canadian
citizens as guaranteed by the Canadian Charter of Rights and
Freedoms or through the amending formula as stipulated in the
Canadian Constitution.
RAIL SERVICE
Mr. Stan Dromisky (Thunder Bay—Atikokan, Lib.): Mr.
Speaker, I have a petition signed by over 2,000 citizens from
Thunder Bay, Kenora, Keewatin, Kakabeka Falls, South Gillies,
Nolalu, Kaministikwia, Redditt, Manitouwadge and Dryden.
Last April, I tabled over 8,600 signatures for the same
petition. This is another batch from many individuals
acknowledging that there is no rail passenger service between the
cities of Sudbury and Winnipeg.
Therefore the petitioners call on Parliament to ensure that the
federal government, Canadian Pacific Railway and VIA Rail
co-operatively conduct a study to determine the feasibility of
reintroducing VIA passenger service from Sudbury to Winnipeg and
that VIA passenger service be revived on the CPR line from
Sudbury to Winnipeg as soon as possible.
1515
HIGHWAYS
Mr. Dale Johnston (Wetaskiwin, Ref.): Mr. Speaker, I
would like to present a petition that was signed by 54 residents
of central Alberta.
The petitioners state that in their opinion 38 percent of Canada's
national highways are in substandard condition, that the United
States and Mexico are engaged in the repair of their national
highway systems and Canada should do likewise for the obvious
benefits of job creation, lower congestion and better traffic
flow.
They therefore call on Parliament to urge the federal government
to join with the provincial governments to make a national
highway system upgrade possible.
FOOD AND DRUGS ACT
Mr. Peter Adams (Peterborough, Lib.): Mr. Speaker, I have
a petition from scores of citizens of the city and county of
Peterborough who are concerned about choice in health care.
The petitioners ask that the Food and Drugs Act be amended so
that the term “foods for special health uses” includes any food
expected to have a specific effect on the promotion of health or
the prevention of disease, and that the Government of Canada may
not limit the quantity of any vitamin, mineral, amino acid or
other nutrient in a food simply because it exceeds the amount
deemed necessary or useful.
PENITENTIARIES
Mr. Peter Adams (Peterborough, Lib.): Mr. Speaker, I have
a petition from 200 residents of the Peterborough area who are
concerned about the transfer of women to the men's penitentiary
in Kingston.
The Elizabeth Fry Society of Peterborough and its supporters
want this transfer stopped. All the evidence suggests that
federally sentenced women, having already suffered from male
abuse, will suffer more in a male dominated institution. These
petitioners ask that the right thing be done in this case.
DNA DATA BANK
Mr. John Duncan (Vancouver Island North, Ref.): Mr.
Speaker, I have three petitions. One petition has 73 names of
residents from the Courtenay area. They pray and request that
Parliament enact legislation to establish a DNA data bank of
convicted sexual offenders and murderers.
THE FAMILY
Mr. John Duncan (Vancouver Island North, Ref.): Mr.
Speaker, I have a second petition with 25 names of residents from
the Campbell River area. If Canada ratifies the UN Convention on
the Rights of the Child, greater incentives will exist for
families to abdicate their parental responsibilities to the
state.
Therefore the petitioners ask Parliament to amend section 7 of
the charter of rights and freedoms to recognize the right of
individuals to pursue family life and to recognize the
fundamental right and responsibility of parents to direct the
upbringing of their children.
CRIMINAL CODE
Mr. John Duncan (Vancouver Island North, Ref.): Mr.
Speaker, I have a third petition signed by 26 residents of the
Campbell River area. They ask Parliament to affirm the duty of
parents to responsibly raise their children according to their
own conscience and beliefs and to retain section 43 of the
Criminal Code as it is currently worded.
GOODS AND SERVICES TAX
Mrs. Jean Augustine (Etobicoke—Lakeshore, Lib.): Mr.
Speaker, I have two petitions pursuant to Standing Order 36. The
petitioners from Etobicoke—Lakeshore call on Parliament to
remove the GST from books, magazines and newspapers and to remove
all federal sales tax from reading.
THE FAMILY
Mrs. Jean Augustine (Etobicoke—Lakeshore, Lib.): Mr.
Speaker, the second petition, pursuant to Standing Order 36, is
tabled on behalf of 37 constituents of my riding.
The petitioners state that Parliament should ask the government
to authorize a proclamation to be issued by the Governor General
under the Great Seal of Canada to amend section 7 of the Canadian
Charter of Rights and Freedoms to recognize the fundamental right
of individuals to pursue family life free from undue interference
by the state and recognize the fundamental rights and
responsibilities of parents who direct the upbringing of their
children and urge the legislative assemblies of the other
provinces to do likewise.
* * *
QUESTIONS ON THE ORDER PAPER
Mr. Peter Adams (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, I ask
that all questions be allowed to stand.
The Acting Speaker (Mr. McClelland): Is that agreed?
Some hon. members: Agreed.
GOVERNMENT ORDERS
1520
[English]
CANADA PENSION PLAN INVESTMENT BOARD ACT
The House resumed consideration of the motion that Bill C-2, an
act to establish the Canada Pension Plan Investment Board and to
amend the Canada Pension Plan and the Old Age Security Act and to
make consequential amendments to other acts, be read the second
time and referred to a committee; and of the amendment.
The Acting Speaker (Mr. McClelland): Resuming debate. I
believe the hon. member for Ottawa West—Nepean has something in
the order of five minutes remaining.
Ms. Marlene Catterall (Ottawa West—Nepean, Lib.): Mr.
Speaker, I will not use my full five minutes. I did want to be
here for questions or comments if any opposition members wish to
raise them.
The government has faced up to an increase in the senior
population and a shrinking workforce and has taken the necessary
steps to ensure that one of the fundamental pillars of the Canada
pension system will remain healthy for decades to come.
Canadians have every reason to feel confident about the CPP
again. Those who pay contributions today can count on getting
their pensions in the future. Existing pensioners can count on
continuing to receive their entitlement. All Canadians can count
on an indexed pension so their income and quality of life will
not be eroded over time. We can count on our contributions
earning a fair rate of return, and we can count on not unduly
burdening our children and grandchildren because this generation
has failed to deal now with the needs of the future.
I look forward to the committee's discussion of this bill. It
is a large and comprehensive bill, and I am sure there may be
some very constructive amendments coming forward. I thank the
House for its time.
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker,
studies produced by the Department of Finance, the Bank of
Canada, and virtually every reputable economic authority in
Canada and abroad indicate that payroll taxes reduce jobs and
reduce job growth. Does the hon. member think that this bill,
which will increase CPP payroll taxes by 70 percent, by some $1,800 for
self-employed individuals, by over $10 billion a year when fully
executed, will help the government to achieve its objective of
greater job growth? Or does the hon. member concur with the
evidence of all of the reputable economists in Canada that this
massive tax grab, the largest tax increase in Canadian history,
will in fact kill tens of thousands of jobs, taking away the very
kind of economic hope that people of my generation so desperately
need in order to pay the kind of tax burden that has been levied
on us by the fiscal irresponsibility of this and other
governments?
Ms. Marlene Catterall: Mr. Speaker, obviously the member
was not in the House when I spoke earlier or he would have heard
me address this issue.
I made a very strong point of saying that I find highly
offensive this characterization of contributions to a pension
plan as payroll taxes. It is contrary to the whole concept of a
sharing, caring, compassionate society where programs are set up
to ensure that people who have contributed to society throughout
their working lives are able to live a retirement of dignity on a
modest income that allows them to afford the necessities of life.
As far as job creation goes, the member is exaggerating somewhat
when he says that there is absolutely no disagreement about the
fact that employer and employee contributions to such a plan are
job killers. The member has not addressed the fact that we will
now be setting up an $11.5 billion investment fund, of which
80 percent
will be invested in this country. He has done nothing to analyse
the positive impact of that private sector investment of people's
contributions on the economy.
After four and a half years of Liberal government the economy is
in better shape than it has been in in a long time.
Mr. Werner Schmidt (Kelowna, Ref.): Mr. Speaker, I found
the speech very interesting, and I would like to commend the hon.
member.
However, I found the last two or three sentences not only
disturbing but literally frightening. I think the comment made
was that the plan that is being presented is there for my
children and my grandchildren.
1525
I would like to ask the member to explain in detail just exactly
how it is that this is going to happen when the premiums go up to
about 9.9 percent, and I believe that is supposed to last forever. We
know where that kind of promise went the last time. It went all
over the place. However, what is more significant is that there
is no corresponding increase in the benefits that will be paid to
the people who will actually benefit from the CPP.
We have a 73 percent increase in the premiums but no change in the
benefits. How can that be a benefit to children and
grandchildren?
Ms. Marlene Catterall: Mr. Speaker, again the member may
not have heard my earlier comments before question period.
We have to anticipate. We cannot just wait for it to happen or
it will be a disaster for pensioners. We have to anticipate that
the baby boomer generation which hit our high schools throughout
the sixties and put tremendous pressure on our school system,
will, 10 years from now, hit the pension system.
The proportion of seniors in the population will grow from 12
percent
today to 16 percent shortly after the turn of the century to 25
percent of our
population. At the same time the proportion of income earning
Canadians in the population will drop dramatically. That is why
we have to act now.
We can wait and do what the auditor general said would be
necessary in the next century and increase the payments my
children and grandchildren will have to pay to 15 percent or we can act
now and ensure that we have a fund that will meet that growing
bulge in the retirement population. We can do it fairly over the
people who are going to be contributing in those years, until
that boom hits us. Frankly that is a fairer way to do it than to
turn a blind eye and leave it to the next generation to worry
about.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I
appreciate the member's comments. I would like to ask her a
question about what has been said in the House. Many members
have indicated that the current beneficiaries of the CPP are
getting a high amount. In fact the Financial Post
indicated that current pensioners are getting about $7 out for
every $1 in.
Would the member comment and assure seniors about what their
status is, those who are presently drawing benefits who have
reached age 65 by the end of this year. What will this bill do
with regard to those current beneficiaries?
Ms. Marlene Catterall: Mr. Speaker, that has been one of
the big concerns of people who have already retired, who have no
capacity to increase their earning power, especially for those
Canadians for whom the CPP was primarily intended. Those who
have had very modest incomes throughout their working lives have
not been able to afford the $14 billion of public subsidy that is
provided to people who can save for RRSPs and which the Reform
Party wants to increase to the benefit of its wealthy friends.
But those people will find that they will continue to have their
benefits fully indexed so their pension income will not erode.
They will not see a reduction in their benefits.
Mr. Deepak Obhrai (Calgary East, Ref.): Mr. Speaker, I
would like to address my comments to the member and draw on what
my colleague from Calgary Southwest said about job killing.
That is job killing for the workers, but what about the small
businessman, and the extra tax burden which the government does
not want to call that, but it is a tax burden on small business.
What about the small business, the extra tax on small business?
It will kill many businesses that are borderline because of the
high taxes of the Liberal government.
What about killing small businesses which will in turn kill jobs
and will take livelihood away from small businessmen. What about
that?
1530
Ms. Marlene Catterall: Mr. Speaker, what about the impact
on those same small businesses if we close our eyes, say we do
not have a problem, and leave it to 10 years from now to increase
those rates to 15 percent? What about the impact on small businesses if
we cannot afford indexed pensions and more and more seniors slip
further and further into poverty? They will not be able to
patronize small businesses. They will not be able to afford
groceries. They will not be able to have their clothes cleaned
or go out for an occasional restaurant meal.
That would have a far greater impact on small businesses than an
increase in their contributions to a good pension plan.
Mrs. Diane Ablonczy (Calgary—Nose Hill, Ref.): Mr.
Speaker, at a time when Canadians are brimming with energy,
excitement and ideas, this Liberal government as tired, apathetic
and unimaginative. It continues to repeat the mistakes of the
past.
The citizens of the city of Calgary, I am proud to say,
exemplify this new energy, excitement and ideas. This is a city
which returned a Reform member to every riding in the last
federal election. Its influence, and Alberta's influence, on
national affairs through creative policy alternatives and new
ideas that flow from the area, is considerable. I salute the
citizens of Calgary and Alberta. I am proud to be a
representative of that city and that province.
Today we begin debate on Bill C-2, which is a very poor attempt
by the government to remedy serious flaws in the design and
management of a major part of Canada's social security system.
Bill C-2 is a good illustration of the government's tired
thinking, lack of imagination and unwillingness to look at new
and better options.
My colleague, the leader of the opposition, pointed out this
morning in the debate the ways in which the government is eroding
the retirement security of seniors. Bill C-2 also illustrates
the government's failure to consult with young Canadians and to
look after their interests. Millions of young contributors will
be financially brutalized—and that is not too strong a term—if
this legislation passes in its present form.
At the end of this debate I trust that Canadians will see and
understand that Bill C-2 is poor legislation and that it should
not be passed. Canadians will see that there are alternate ways
and better ways to save, to invest and to secure their retirement
incomes and their futures.
Canadians dislike unfairness. We dislike seeing the young, the
disadvantaged or the infirm exploited. Canadians dislike paying
for inefficient government. They dislike seeing funds poorly
invested or hard earned dollars frittered away on foolish, made
in Ottawa schemes. Canadians dislike intrusive government
meddling in their personal affairs. They dislike being told by
government how to manage their paycheques. They particularly
dislike being told by distant government what is best for them
and how their earnings should be spent.
I would ask the House to consider these Canadian characteristics
and then reflect on the legislation before us today. Members
will see that the legislation is grossly unfair to younger
contributors, continues to perpetuate poor management and
investment practices, and is out of touch with the needs, desires
and aspirations of Canadians.
The legislation, if enacted, would result in a massive plunder
of the earnings of younger Canadians. Younger contributors to
the plan will receive less back in retirement benefits than the
value of their contributions. Not only will they have to pay for
their benefits, they will also have to pay for the massive debt
accumulated through the errors of previous Liberal
administrations.
The fact that younger Canadians will be asked to pay many times
more for their CPP retirement benefits than their parents or
grandparents is no longer news. The dimensions of this rip-off,
however, are not well known. The cynicism of the government in
papering over the cracks in this plan has not yet been exposed.
My job and that of my colleagues during this debate is to expose
the magnitude of the plunder and to unmask the Liberal cynicism
which underlies this bill.
The chief actuary of the fund tells us that the CPP paid a real
return after inflation of 22.5 percent for those retiring in 1979.
But that falls by more than one-half to 10.1 percent for those who
retired in 1994 and it falls again by more than one-half to 4.9
percent
for those retiring in 2013, and falls yet again to 1.9 percent for those
retiring in 2053 and to 1.8 percent for those yet unborn.
1535
For those retiring in 2033, which are many people who have just
entered the plan, their return will be, according to the chief actuary
of the fund, only 2.5 percent. These people will receive only a 2.5
percent
return for investing nearly 10 percent of their earnings in a pension
plan. All this with contributions soaring.
Although I realize that so many numbers are difficult to follow
they must be in the parliamentary record in fairness to future
generations. It is no wonder that young Canadians are becoming
outraged by these proposed contribution rates. The CPP is a
shabby, unfair and unjust scheme for the young and those yet
unborn.
Talk about unfairness and political cynicism. What political
party would design a pension plan that passes the massive debt it
ran up on to Canadians too young to vote or even yet unborn? I
merely have to look across the Chamber to see such a calculating,
cynical political party.
The next time members opposite speak to their children or
grandchildren, or their neighbour's children, tell them what is
being done to their future, how they are being shackled for the
rest of their working lives with the cost of this and previous
Liberal government mistakes, mistakes that the previous Liberal
speaker in this debate even admitted were well known in the
1960s.
The CPP is a pay as you go pension scheme, and was not even
properly funded to begin with. It provided the attraction of low
contributions to those first in and a high rate of return
exceeding what could be expected in any normally funded
investment plan. That is how the Liberals got Canadians to buy
into it in the 1960s.
If you understand pyramid schemes or the chain letter concept,
then you will understand the concept of the CPP design. Some
writers refer to Canada's pay as you go CPP as a Ponzi type
scheme. For those who do not remember, Charles Ponzi was a small
time but well known swindler. He promised a 50 percent profit on money
in 45 days, double that in six months. Investors flocked to him.
To maintain the promised rate of return he passed the funds of
new investors along as dividends to earlier ones. But when
inevitably the number of new investors declined, the whole scheme
fell apart and Ponzi ended up in jail.
Although the architects of the CPP did not end up in jail, the
poor design of the plan is glaringly obvious. The government
should admit this as a first step in removing the blinders and
considering new and better alternatives to this defective plan.
In addition, there are enormous implications for the proposed
Canada pension plan investment board and it needs to be
thoroughly thought through. I do not believe the government has
even begun to do that.
The bill proposes to establish an investment board to manage the
funds transferred to it from the Canada pension plan account.
Eventually, this board will control enormous amounts of money,
particularly in a country with such a small capital pool.
Estimates suggest this fund will be over $200 billion in just 15
years.
The investment board will be managed by 12 directors, including
a chairman and each director will be appointed by, guess who, the
cabinet on the recommendation of the minister. The board,
therefore, and the fund will be susceptible to political
manipulation. After all, this huge pool of capital would be a
great temptation to any government. If anyone does not believe
me, just look at the jobs transitions fund that is being misused
with and the questions which arose in question period about that.
That fund is not even close to $200 billion, but politicians
cannot keep their hands off even small funds.
As members will know, the CPP is a pay as you go scheme. The
result is that millions of Canadians have been promised a pension
but no fund of money is sitting there to pay them those pensions.
We have a lurking disaster, a staggering debt of over $500
billion, almost as much as the entire federal debt again, arising
from the mistakes in the design and management of the CPP
must be borne by all Canadians.
1540
While there may be many different proposals to achieve this, one
thing is clear. This debt should not and must not be put on the
backs solely of the young and the unborn.
The Reform Party believes that new thinking is required to save
the CPP. Our proposal calls for moving from the present pay as
you go public system, to a fully funded system based on individual
accounts while protecting the benefits of current seniors. This
means that individuals will own all the assets in their account
and their retirement benefits will be substantially greater. When
they die their children and their spouse will inherit the
capital. This would go a long way toward eliminating poverty for
elderly widows, for example.
If young Canadians knew that each dollar they put into a
retirement plan would go into their own personal account and that
they would receive it back, including a fair market return on the
investment, they would gladly accept the plan and even leave some
portion of their premiums to pay the present beneficiaries.
If the government had the fortitude to ask young Canadians,
certainly those in their 20s, 30s and 40s about their
preferences, it would find an overwhelming number who would like
to own their own retirement assets and not rely solely on the
promises of a debt-laden government with a sorry track record.
This government, like previous Liberal regimes before it,
arrogantly believes it knows what is best for people and
continues to introduce legislation that is not in the best
interest of future generations and that is intrusive and
inflexible.
If this legislation goes ahead as it is written, the CPP is
headed for certain disaster because the young will not support it
and they will eventually defeat it.
Reform speakers will raise many other considerations that must
be debated before we vote on this bill. Countries around the
world are following the example of Chile in moving from publicly
to privately owned and managed pensions. These include
Australia, Argentina, Bolivia, Columbia, Mexico, New Zealand,
Peru, Singapore and Uruguay. Great Britain has already partially
privatized its public pension system and is considering a more
ambitious reform.
I want to say again to Canadians watching this debate, and I
hope that thousands of Canadians are watching it, that the issue
before the House today and in the days ahead is tremendously
important to the interests of all citizens of this country. The
future of the CPP is a question that every working Canadian and
every retired Canadian needs to carefully consider because
working Canadians will soon have an extra $700-plus every year
taken from their income to keep this current scheme afloat and
retired Canadians will also be watching carefully to make sure
that their pension security is there.
However, the impact of the changes to the CPP go beyond the
financial consequences now or even the security of our
retirement. I believe this debate will be a turning point in our
children's attitudes toward our generation. Their attitudes
could have—
Mr. Bill Casey: Mr. Speaker, I rise on a point of order.
I call for a quorum count.
The Acting Speaker (Mr. McClelland): We have a quorum
call. Do we have a quorum?
And the count having been taken:
The Acting Speaker (Mr. McClelland): We have quorum. The
hon. member for Calgary—Nose Hill.
Mrs. Diane Ablonczy: Mr. Speaker, I would think that
government members would have enough interest in the Canada
pension plan and the future of our security that they would at
least be in the House to participate in this debate.
The impact of changes to the CPP go beyond the financial
consequences now or even the security of our retirement. I
believe this debate will be a turning point in our children's
attitudes toward our generation. Their attitudes could have
significant consequences for society when our children and
younger Canadians stand in our place and when it is their turn to
make decisions affecting us. I believe we will be judged in not
too many years on the measure of fairness we show now.
Our economic security tomorrow will surely be influenced by the
concern we demonstrate today for the interests of the next
generation.
1545
Bluntly stated, the proposed changes to the CPP are completely
unfair to our children and to younger working Canadians in three
ways.
First, it places on their shoulders most of the burden for
paying for the disastrously poor design and past mismanagement of
the plan.
Second, it misses a golden opportunity to allow them to get the
best pension return possible for each dollar paid into the plan.
The Liberal plan gives young workers a return so low that no one
would ever buy into such a scheme of their own free will.
Third, it imposes a 73 percent increase in employees and
employers CPP contributions. This amounts to the biggest tax
increase in Canadian history and is an enormous payroll tax hike.
Even the Liberals admit that payroll taxes kill jobs. This
whopper comes at a time when youth unemployment stands at a
staggering 17 percent, and by some estimates is 25 percent in
real terms. Not only does the Liberal plan kill the hope of
young Canadians for a decent pension when they retire. It also
kills their prospect for jobs today.
That is why the debate is critical and one with far-reaching
consequences for all of us and for the future well-being of
Canadian society. Reform is urging the government to move toward
giving Canadians ownership of their own pension contributions and
restoring the belief, especially of younger Canadians, that the
plan will deliver decent retirement security for reasonable
contributions.
The proposed changes by the Liberals are immense and
far-reaching and simply cannot be allowed to be rammed through in
a hurry. We will be insisting that public hearings be held
across Canada before the government touches the Canada pension
plan.
I invite Canadians to join with the Reform in addressing this
vital CPP issue. Canadians must have a considerable say in the
future of the program.
In closing I quote a statesman from another parliament in
another time but whose words are very appropriate today. I hope
the government will listen. He said “A politician plans for the
next election”.
That is what the Liberals are doing. They know there is a mess
in the Canada pension plan. They are simply trying to infuse it
with more money at the expense of our children to keep it afloat
until they can take off with their own gold plated MP pensions
and not have to worry about it any more.
The statement goes on “A statesman plans for the next
generation”. We have a duty and an obligation in the House to
plan for the next generation. I urge us to take that obligation
very seriously.
Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.):
Mr. Speaker, the member for Calgary—Nose Hill is getting a lot
of partisan politics messed up in the CPP. She is probably not
aware of the fact that starting last year one-third of Canada's
population was turning 50 at the rate of 500,000 a year.
If CPP is to be there for the upcoming generation we have to
make changes to it right now so that they can survive. She has a
lot of problems with the return coming out of CPP, but she is
only looking at one of three pillars. We have CPP, seniors
benefits and the RRSP program which gives an 18 percent tax
shelter on income. She is obviously expounding their super RRSP
program.
CPP is not only a pension plan but is a disability insurance
policy. It is a very comprehensive one and a very good one
because it is backed by the Government of Canada. Their super
RRSP program is a typical Reform way of looking at things: we
will pay them money out of their RRSP program but if they are not
able to contribute to it, tough luck.
Mr. Dick Harris: That is not true.
1550
Mr. Murray Calder: Could the member tell me what kind of
disability insurance programs are incorporated into their super
RRSP?
Mrs. Diane Ablonczy: Mr. Speaker, I am surprised the hon.
member opposite just figured out that a lot of people will soon
be turning 50. Surely we have been around long enough for this
to have been obvious some time ago, to provide for our pensions,
and to get this plan on track before now.
In 1994, just after I was elected, I asked a question in the
House of the Minister of Human Resources Development about how
secure the plan was since we were having to dip into the
contingency fund. The minister essentially patted me on the head
and said “Don't worry. Be happy. Everything is under control.
No problem. Don't raise any alarms here. Everything is fine”.
All of a sudden the government figures out that people will be
turning 50 and may want their pensions pretty soon. I am
outraged that we are in a crisis situation we should have known
was coming. Now the government is trashing any proposal to try
to fix this situation in a sensible way.
Let us talk for a minute about the disability portion of the
plan. The disability payments under the plan amount to only 17
percent of the payout of the plan. It is a small portion of the
plan. It is not like there will be a huge amount of money to make
up to ensure people have disability coverage.
I can make a couple of points. The CPP for some odd reason
takes over the disability obligation of private disability
insurance plans. A person cannot be doubly indemnified. After a
fairly brief period of time the CPP kicks in. It takes
precedence over the private plans. Many Canadians have
disability insurance but the CPP gratuitously and unnecessarily
takes that over. Even the amount the plan pays out in disability
is not necessary in many cases.
If as Canadians build up their own capital account, their own
pension plans, they unfortunately become disabled they would have
the money to start drawing on. The protection would be there. If
people become disabled they would have to make use of his
benefits earlier than anticipated.
There is every reason to think there could be measures put into
place to protect people against disability. We all know we could
become disabled. There are no guarantees for any of us. We want
to protect and we will protect.
It is nonsense to throw that red herring out and say that
Reform's proposals are no good because somehow they will not
handle disabled protection the same way as the Liberal's
proposals will. There are plenty of good ways to do it. I urge
the hon. member to get on with looking at some of them.
Mr. Werner Schmidt (Kelowna, Ref.): Mr. Speaker, I
appreciated the depth and the analysis of my colleague from
Calgary—Nose Hill. There has been a tremendous interest, not
only an awareness, in the scam perpetrated on the public over the
last number of years. She called it the Ponzi scheme, which is
not an unfair analogy. I think she explained it rather well.
There is a real indictment not only on the present government
but on previous governments. The time has come.
Could the hon. member explain exactly how it is that one
generation must show a leadership role for the next generation?
How can they be shown to prepare for the future, whether it is
financial responsibility or responsibility for one's own life?
Could she provide leadership, direction and guidance to the
people who are coming up so that they will live a better life and
not be the Ponzis as has been the case in the past?
Mrs. Diane Ablonczy: Mr. Speaker, it is important that
whatever we do with the Canada pension plan is fair to the
present beneficiaries of the plan who were promised a pension,
who paid in good faith and who now in many cases have done their
financial planning on the basis that they would receive the
promised benefit.
It must also be fair to the people who will have to pay the
costs, to the people who are now being asked to double their
contributions into the plan for no greater benefit, for actually
less benefit than they were promised, for less benefit than
present beneficiaries receive.
1555
Our plan would simply take measures to top up the unfunded
liability in the plan by sensible means. There are many of them.
We are exploring several, even though we are only the official
opposition and do not nearly have the resources of government.
It is clear the government is not getting on with the job with
the resources at its disposal. It is incumbent on someone to
make sure that the people who are receiving their benefits will
continue to do so, and at least to make sure that the amount of
money left to go into the benefits of younger generations will
give them the maximum bang for their buck.
All we are promising them, as I said in my speech, is that those
entering the plan now will get a whopping 2.5 percent return on that
huge investment.
If the premiums were invested over 30 years or 40 years at
normal market rates of return and managed by proven money
managers, the return would be incredibly higher than the
government is proposing to give younger Canadians.
Why not at least let them get a maximum return while still
protecting the current beneficiaries? It does not make sense to
ignore that proposal.
Mr. Dick Harris (Prince George—Bulkley Valley, Ref.):
Mr. Speaker, we are into a full blown debate on the issue now.
During Liberal presentations we were told about the investment
board that would look after the huge Canada pension plan premium
fund.
Let us be clear. We are talking about a potential $200 billion.
The most information we have heard about the management of the
fund is that the Liberals will appoint an investment board.
I have a question for the member for Calgary—Nose Hill. Given
the Liberal record of handling money, could we have any
confidence in this new so-called arm's length investment board
that the Liberals are talking about?
Mrs. Diane Ablonczy: Mr. Speaker, the member raises the
question which I think is one of the least well considered in
this whole scheme. The more experts and analysts and opposition
members start to examine this aspect of the plan, the more
worrisome and the more troublesome it will become.
There is nothing arm's length at all about the investment board.
It is appointed directly by cabinet and serves at the pleasure of
cabinet.
There is no question there will be a lot of input and influence
on this aspect of the plan. The literature and the commentary of
the government are already referring to regionally equitable
investments.
Here again we see political considerations even before the thing
is set up creeping into the direction given to the board. We
know from the QPP, public pension funds, the Alberta Heritage
Savings Trust Fund, and other avenues of government managing
money how unlikely it is that political considerations will not
get in there sooner, later, last, first and always.
We need to be very concerned and be very vigilant that it does
not happen.
Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, it is with
great intent that some of my colleagues are discussing Bill C-2
respecting changes to the Canada pension plan board.
I listened with great interest to the member for Calgary—Nose
Hill talk about the importance of a consultative framework. I
know from my fellow colleagues on this side of the House that we
have already done this. Years ago we went out and conducted
town hall meetings in our ridings, asking the people of Canada
what they wanted to do with the Canada pension plan.
I conducted three of these meetings in my riding. The
conclusions of the people of Durham are very much part of this
legislation. In particular, they told us that they wanted to
maintain the Canada pension plan. Also they told us that they
wanted to see a different investment format.
They were concerned about the government directly investing it
and giving money back to the provinces. They wanted to see an
independent board. The bottom line is that we have been
listening to the people. That is exactly what the people of my
riding, and I am sure many ridings, have told our government.
They want this money set aside and managed in a businesslike
fashion. That is essentially what this act attempts to do.
1600
Some members have mentioned there is going to be an increase in
the size of the fund. Some talked about $100 billion and some of
my colleagues who like to double everything are up to $200
billion. That is a substantial fund for this country.
It is interesting to note that some members opposite talked
about payroll taxes. When some of them spoke I had to reach for
my Oxford dictionary because they referred to the CPP as a tax.
Perhaps I could buy the members a dictionary because they do not
seem to have one. I opened up my Oxford dictionary and it clearly
says that a tax is a contribution to the state.
Deductions for the Canada pension plan are either currently
being paid to beneficiaries or invested in a fund. They do not
come into the general revenues of the Government of Canada. By
definition in the Oxford dictionary clearly they are not a tax.
When people talk about Canada pension plan contributions they
somehow end the discussion at the payment of premiums. Once
again it is the same discussion Reform Party members often get
into when they talk about spending, that somehow it is gone,
ended and never heard from again.
Members are talking about a $100 billion fund. We have to ask
what does it mean. What does the fund go into? The government is
empowered to carry on normal market interventions much as mutual
funds do now, purchasing equities in Canadian owned companies and
bonds. I suspect this is going to have a double effect
economically. It is going to provide more capital for small and
medium size business. As businesses expand they either borrow or
raise equity. Businesses are expanding, building new buildings
and plants and facilities. Invariably when they do that they
create jobs.
Therefore it is a circular argument that by paying these
premiums we are going to lose jobs. However, when we look at the
other side of the argument of creating robust capital markets in
Canada, we are creating jobs. This is simple economics which the
Reform Party often likes to look at, the bad side. The reality is
there are a lot of positives.
To take this one step further a lot of people are saying that
they are concerned about the amount of money in the fund. If we
compare it to a privately managed fund today, the Caisse dépot et
placement du Quebec has a fund which is now at about $57.6
billion, the Ontario Teacher's College pension plan is at about
$50.9 billion and the municipal employees fund is at about $25.9
billion. By definition those are some very significant funds.
When we talk about the Canada pension plan we have to talk about
the demographics, the fact that our population is getting older.
As the fund becomes more robust, active and intervening in the
private sector it could well have an impact on the reducing
interest rates because it will make more capital available,
looking for capital and it will be more competitive in the
capital markets and thus may reduce interest rates for small and
medium size businesses.
Through this fund process the possibility is there for lower
interest rates and also we have created the availability of more
debt and equity capital for small businesses which will create
jobs. The Reform Party is not interested in that because it is a
very positive thing.
I also heard the member for Calgary Southwest talk about other
negative aspects of the plan.
1605
The important thing is Canadians want to know their funds are
being invested. As has been mentioned a number of times in the
House, Canadians have said where did that money go, where is it
in the system. Now they will be able to see where their money
went. There will be a quarterly report which will show where
their money has been invested.
Reform Party members often talk about the super RRSPs. The hon.
member for Calgary—Nose Hill said that only 1 percent of the
payments from the Canada pension plan are related to disability.
I suggest she read the financial statements. She will see that
Canada pension plan payments to the disabled amount to about 19
percent. The Reform Party has no plan to ensure that factor.
I can tell hon. members opposite that there are many people in
my riding who are living on disability payments. It is hard for
me to believe they are concerned about the hardships these people
face.
Second, members opposite have gone on and on about the
intergenerational tax. The hon. member for Calgary—Nose Hill
called it a rip-off.
The Leader of the Opposition was concerned about the clawbacks
in the old age pension system. Then the hon. member for
Calgary—Nose Hill spoke about the 200 percent return on
investment that some of these people are receiving.
What is it going to be? Are they going to be concerned about
intergenerational transfers? Are they going to be concerned
about a 200 percent return on investment? Are they going to be
concerned about clawbacks to seniors pensions?
The bottom line is they cannot have it all ways. They cannot
argue out of both sides of their mouths all the time.
As the member suggested, there would be a $500 billion deviation
if we actually tried to fully fund that plan today. I have not
heard any opposition member tells us how they would do it.
We went to the people and we asked them how to do it. This is
the plan they told us they wanted. This is the plan which is
acceptable to them.
Some of our younger people are worried that the premiums are
going up, but everything is not absolute in history. The reality
is our younger generation has other benefits which have been
given to it by government. It has support in the educational
system and other benefits from our system.
Who knows in 20 years what the premium levels or what the
benefit levels will be. It will depend on the demographic shifts
in our country.
This government has had the intestinal fortitude to look at a
situation that was breaking up. Many governments in the past
have shifted this on to other administrations. It would be easy
for us to do just that, shift it on to another administration.
The problem would get worse and worse. However, we have faced
reality and are dealing with the problem.
That is what this government has done. This is good
legislation. I encourage all my fellow members to support it.
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker,
I would commend the hon. member for his remarks; unfortunately
there were several inaccuracies in his characterization of the
Reform plan.
It would appear to me that the hon. member, who I believe is an
accountant and well acquainted with actuarial concepts, may not
have done exhaustive research on this subject. It is not merely
the Reform Party which has proposed a mandatory retirement
savings plan to replace this giant rip-off Ponzi scheme which
Liberal and Tory governments have perpetuated for the last 30
years. Very credible independent think tanks such as the C.D.
Howe Institute, the World Bank and even the Bank of Canada have
made favourable comment on the concept of a self-funding, defined
contribution, mandatory public retirement savings plan.
I wonder if the hon. member has read any of the studies.
Mr. Robert D. Nault: Name the countries that have it.
Mr. Jason Kenney: The Chilean government has it.
An hon. member mentioned some of the other governments which have
adopted this kind of plan.
The Government of Chile did it. It is an enormously successful
plan which members from every stakeholder group in the economy,
from labour unions to business to small business to taxpayers,
have embraced. The public opinion polls in Chile show
overwhelming support for the self-funding pension plan
established in that country.
1610
The member says that Reform has no plan to deal with the
unfunded liability of $600 billion. We do. Part of the
contribution that will continue to be made to mandatory pension
savings would go to fund the unfunded liability which this
Liberal government has allowed to develop.
Does the hon. member not think this is a responsible approach to
meet the obligations we do have toward older Canadians? Has he
not looked at any of the very serious arguments put forward by
credible organizations such as those I have listed? Has he not
looked at any of the international examples to see that this kind
of plan actually can work?
Mr. Alex Shepherd: Mr. Speaker, we have a privately
funded plan that already exists in our country. I think this is
where the member is looking at absolute jurisdictions like Chile.
I have read some of those reports. However, we have a three
tiered system in Canada. We have the basic social benefit, the
Canada pension plan system and the tax assisted RRSP system.
Our RRSP system is one of the most generous in the world. We
have total limits of up to $13,500 of premium contributions as a
tax assisted support for private pensions. In the United States
that same deduction is only $2,000. The reality is we already
have a privately funded system in the sense of a voluntary system
through the registered retirement savings plan.
What we are talking about are those other two tiers, the ones
that the Reform Party keeps wanting to forget about, the people
on lower incomes who are not able to take advantage of those RRSP
levels. We are talking about the basic integrity of our pension
plan system. The people of Canada told me and my colleagues they
want to keep it, and so we are.
[Translation]
Mr. Pierre de Savoye (Portneuf, BQ): Mr. Speaker, I listened to
the member for Durham. He covered many aspects of the CPP and of its
reform.
One aspect has been overlooked in this House. I referred to it
this morning and I would like to mention it again now. Even if the
necessary parameters are built in to ensure the viability of the CPP,
with the best intentions in the world, this plan must still be wisely,
appropriately and properly administered.
As we know, last spring the auditor general sharply criticized
certain practices in the present administration of the CPP. Does the
government intend to take the necessary action to ensure that the plan
is properly administered, both with respect to its information systems
and with respect to the criteria for certain benefits, including
disability benefits? I await an answer from our colleague, the member
for Durham.
[English]
Mr. Alex Shepherd: Mr. Speaker, if I understand the member's
question, he is concerned about the accountability of that plan.
I note, in reading the legislation, that there is a whole
process, a board of directors as a corporation which falls under
our general corporation provisions and the duties of directors to
that corporation. I noticed that there is definitely a
requirement of external auditors so that the external people will
basically review the operations of that and report directly not
only to government but to the people generally.
It is not a closed shop. We do not have a bunch of people
holding on to this money in a back room somewhere. The bottom
line is the people who are going to be the beneficiaries of that
plan will be able to see how their money is invested and will be
part of the process not only directly through the public forum
but also through their members and the fact that this is
answerable directly or indirectly through the political process
through the appointment of the board and so on.
1615
It is not something the government wants to get involved in on a
daily basis, but there is going to be constant visibility of the
mandate of this board. I think basically that is what people are
asking for.
In the old system we did not know. We were not very sure where
that money was going. We had the idea that it was going back to
the provinces and so forth, but nobody ever saw a financial
statement actually showing clearly where the float of the Canada
pension plan money was at any one time. I think this is very
much progress and an improvement.
Mr. Dick Harris (Prince George—Bulkley Valley, Ref.):
Mr. Speaker, the Liberals are saying to the Canadian people
forget about the 30-plus years of gross mismanagement of the
current Canada pension plan, which is shared by the Tory
government, incidentally.
They are saying forget about the way they have mishandled the
pension contributions of working Canadians to the point that now
seniors who are existing on the Canada pension plan are so far
below the poverty line with the pittance they get from Canada
pension that they cannot even see the poverty line it is so far
above them.
This government is prepared to say to the Canadian people forget
all that, trust it, this time it is going to get it right. “To
give an idea of our plan, we are now going to charge double for
premiums or 77 percent more, but listen to us, Canadian people, we are
going to charge double but we are going to manage it so well that
when you retire we will pay you less than what you would get
today if you retired”.
That is Liberal economics. I cannot imagine how this
government, with the record of mismanagement it has had, can look
Canadians in the eye, particularly young Canadians who are
entering the job force, and say “trust us with your money, pay
more, get less”. That is the Liberal way. “Trust us. Give us
a chance”. How can they do that?
Mr. Alex Shepherd: Mr. Speaker, mismanagement? The first
time we have not had to go to the capital markets to finance the
operation of the government in 27 years is not mismanagement. It
is good management.
It was interesting to listen to the member. One of his
colleagues and said those people who are getting Canada pension
are getting 200 percent return on their money. Then the member
says it is a mere pittance, we should give them more.
I did not know that was the policy of the Reform Party, to
increase Canada pension plan benefits. I did not see that on any
of its platform documents. I have not seen that anywhere.
I really have to commend it for recognizing that many seniors
are living well under the poverty line and that we should be
taking some notice of how to deal with that.
I congratulate the member for realizing the importance of
possibly increasing some of our social spending in those areas.
[Translation]
Mrs. Francine Lalonde (Mercier, BQ): Mr. Speaker, this will be
my first speech in this new Parliament. Of course, I would like
to start by thanking the voters in Mercier for having put their
trust in me again. In return, I promise I will protect their
interests with all I have got, candidly and perhaps a little
impetuously at times, as I did today.
At second reading, the Bloc Quebecois supports most of the bill
before us and does so for several reasons. To help our listeners
understand where the Bloc Quebecois' support comes from, let us review
a bit of history.
It is with some sadness that non-Quebeckers realize today that
the Government of Canada and every province except Quebec should
have taken Quebec's lead in 1964-65 when it established the
Caisse de dépôt et de placement.
1620
I will take a moment to describe the Caisse de dépôt et
placement, in whose likeness, although only partially, the Canada
pension plan investment board will be established. I say only
partially because, when I read the terms of reference of the
board in the bill and compare it with those of Quebec, I can see
that the difference is fairly significant.
This gives me, the Bloc members and all members from Quebec here
an opportunity to appreciate the extent of the vision of the
political leaders, those who were working with them at the
time—and I would mention Jacques Parizeau at the top of the
list—in giving Quebec an instrument that ensured the people of
Quebec the best return on their pensions and that provided for
economic growth. It is this second element, economic development
and growth to ensure better revenues, that is lacking in the case
of the investment board.
However, I am going to limit my remarks to Quebec's Caisse de
dépôt et placement. I will do so by quoting someone who was a
Liberal and a federalist in Quebec's history, but he played a
part in recovering Quebec's powers—and this person is Jean
Lesage—his is one of a number of names associated with Quebec's
development.
A few years after leaving office, Jean Lesage was asked what his
most important contribution to Quebec had been. He replied “The
Caisse de dépôt et placement”. Mr. Lesage said, on June 9, 1965:
The Caisse de dépôt et placement will become the most important
and powerful financial instrument ever in Quebec.
Originally funded with deposits from the Régie des rentes, the
Caisse should reach assets of $2.6 billion by 1976 and of over $4
billion 20 years from now.
I should immediately tell you about the current value of these
assets, and I will do it again, because it is an impressive figure. Mr.
Scraire, the current president and chief executive officer of the
Caisse, wrote in his most recent report that the Caisse's current assets
exceed $62 billion.
At the time, Mr. Lesage saw the Caisse as the most important and
powerful financial instrument. He said:
In short, a considerable portion of Quebeckers' savings will
be invested by a government organization. Under the circumstances,
the organization must be geared to serve as effectively as possible
the interests of those who will deposit part of their income in it.
In this regard, the interests of Quebeckers are many. There is no
question that we must provide deposits with the security expected
from an adequately managed organization. We must, in particular,
protect the accumulated moneys against the erosion caused by the
price increase which, for many years, Canada, like the other
countries of the world, has been unable to avoid.
The Caisse de dépôt will thus provide an opportunity to invest a
sizeable portion of assets in securities other than those of a
fixed value.
1625
That has been strength of the Caisse de dépôt et placement.
While Canada concentrated on security, at the Caisse, they wanted
to diversify investments and also contribute to the development
of Quebec.
As Mr. Lesage said:
The interests of Quebeckers go beyond the security of the money
they set aside for their retirement. Such considerable assets
should be used to stimulate the development of the public and
private sectors, so that Quebec's social and economic objectives
can be achieved quickly and effectively.
Briefly, the Caisse should not be considered only as an
investment fund like any other, like RRSP's, for instance, but as
an instrument for growth, a lever that is more powerful than
anything we have had in this province until now.
And this is still according to Jean Lesage, in 1965. It is
interesting to hear what he had to say about the management of the
Caisse. He said:
It cannot substitute for the government in any way whatsoever.
It should concentrate on managing the investment resources Quebec
needs for the greater effectiveness of government policy and that
of the private sector.
In other words, its independence must be clear cut. On the other
hand, the operations of the Caisse must be co-ordinated with the
general economic policy of the government. Lesage felt that this
co-ordination should normally take place through the board of
directors.
He was very clear about it:
The Caisse was not designed to accumulate profits for its own
sake but sooner or later would have to distribute those profits to
its contributors.
The point of having a common investment policy was to attempt,
with the help of the best people in the field, whose integrity was
absolute, to maximize the rate of return on the public's investment
and achieve a better balance between safe and high yield
investments.
There probably was a lengthy debate, but I am sure that today,
some people would prefer to have more than 40 percent of their
assets in stocks. The Caisse has been very effective with this
kind of investment, but its purpose has always been to strike a
balance between security and maximizing the rate of return.
When the Caisse is involved in business financing, its purpose
is not to take control of businesses or buy them outright. Later
on we will see very briefly, through excerpts from Mr. Scraire's
report, that this was not the case, although the Caisse did play
an important role in a number of businesses in Quebec.
Since I do not have much time, Mr. Lesage concluded his historic
speech, saying:
The Government of Quebec has developed such a set of tools over the
past four years. By nationalizing private electric companies, we
can not only have a more direct impact on energy prices in many
parts of the province but also establish a crown corporation whose
influence on industrial development is already remarkable.
The General Investment Corporation has been assigned the formidable
task of transforming certain industrial sectors in Quebec. SIDBEC
should normally pull along in its wake a series of secondary
industries, which had been growing slowly, if at all in Quebec.
SOQIP, the mining exploration company, will foster more systematic
exploration and development of subsurface resources. Finally, other
tools have been announced.
The Caisse de dépôt et placement does not have as specialized a
role as the organizations I just mentioned. It will, however,
incorporate several specific economic policies and help fund the
growth that should normally be experienced within a few years in
several areas of our economy. The Caisse is expected to play a
diversified and necessary role.
1630
And the very last paragraph:
This 1965 speech should be read over and over in Quebec, as it
enables us to draw several conclusions, two of which I would like to go
over for the benefit of the House.
In 1965, the premier of Quebec—and I could also quote from other
speeches by then natural resources minister René Lévesque—and Quebec
leaders believed, on the basis of what they had just negotiated in
Ottawa, that they had control over their economic development.
After 1965, and even more so after 1968, when Pierre Elliott
Trudeau became Prime Minister of Canada, Quebec could no longer
get its powers back. In this vein, I think I can say, without
any chance of being mistaken, that it was a good thing Quebec's
National Assembly passed the legislation creating the Caisse de
dépôt in 1965, because otherwise this powerful instrument, which
was necessary for all the others in an unfavourable Canadian
context, would never have seen the light of day. And I hate to
think what Quebec would be like now.
Mr. Lesage's polite remarks about the Caisse's role are summed
up a bit more bluntly by Mr. Parizeau in a book of memoirs. Mr.
Parizeau, who was the architect and, some even say, the writer of
the speech I just read, said that this large reserve of capital
made it possible for the Government of Quebec to bypass St. James
Street—let us be plain—because in the time of Jean Lesage,
before the Caisse de dépôt, when the Government of Quebec wanted
to pass a social policy, it had to convince the big boys in the
financial district on St. James Street, who did not, I can assure
you, speak French and who had no time for the future of Quebec
and of Quebeckers.
So, for the first time, the Caisse de dépôt gave the Government of
Quebec, of whatever stripe, freedom from the control of the big
financiers.
Furthermore, the Caisse de dépôt became the sine qua non for
progress in two areas of major importance: the development of
businesses indigenous to Quebec, that is created and developed by
Quebeckers, and the affirmation of the government's real power
with respect to the central government, big financiers, and the
financial community, real power resulting from its own finances.
1635
As of June 30, 1997, the assets of the Caisse de dépôt et
placement du Québec are worth $62.4 billion. The return on its
investments in Quebec businesses has reached the astonishing
level of 41.2 percent, thus adding to the assets of its
contributors.
During the five past years, Quebec stocks held by the Caisse
have yielded 3 percent more than the total Canadian stock index,
that is, 19.3 percent, and this has helped the Caisse not only to
guarantee the security of its assets, but also to maximize the
return on investments made to provide pensions for the workers
who contributed.
Several types of businesses in Quebec have made remarkable
progress in recent months. I think the Quebec business landscape
would not have looked the same, if we consider investments made
by the Caisse in Canam Manac, Québécor, Biochem Pharma, Groupe
Vidéotron and Bombardier. This is also true of small businesses
like, for instance, a business incubator on the South Shore.
I will once again quote Mr. Scraire:
Ever since its incorporation act was adopted by the Lesage
government in 1965, the Caisse has invested the money of its
contributors wisely and at the same time financed infrastructure
projects in every region in Quebec. Furthermore, it provided
more than 500 businesses with the capital they needed for growth
and expansion in new markets. The Caisse is also a prudent
investor, active on all markets throughout the world.
We are against the Reform Party's amendment simply because, in
Quebec, we feel that although the Caisse has had a better rate of
return than has been the case in Canada, it is urgent to invest
in strengthening the Caisse to ensure that young people will also
be able to enjoy its beneficial impact on the economy and look
forward to a measure of security when they retire.
This is an urgent matter. Those who argue in favour of closing
the generation gap will have to hurry up and, as we intend to do
in committee, take a critical look at the provisions of this bill
and try to improve it. The strength of the system in Quebec is
at stake—we already have a bill on second reading to that effect
in Quebec—and for Quebec and Canada this is about closing the
generation gap.
Mr. Pierre de Savoye (Portneuf, BQ): Mr. Speaker, I listened
carefully to the remarks of our colleague for Mercier.
What excited me is the fact that a decision was made in Quebec
32 years ago to develop a major financial tool, the Caisse de dépôt
et placement, not only to provide good return on the investments of
workers, but also to promote the development of the Quebec nation.
1640
In reading the bill introduced by the Minister of Finance with
its investment board, which is limited to obtaining a good return
on investment, I believe the Minister of Finance is proposing a
national mutual fund whose sole objective is to act like any other
mutual fund.
I am a Quebecker and proud of the Caisse de dépôt et placement
and of its role. I find it sad that Canadians too cannot feel this
pride over their own powerful financial institution that fulfils
Canada's mission, like the one we have in Quebec that fulfils
Quebec's mission.
I would ask my colleague for more details on the subject,
because it supports the concerns she expressed a few minutes ago.
Mrs. Francine Lalonde: Mr. Speaker, I thank the member for Portneuf
for his question.
The objects, as stated in clause 5, are as follows:
I wondered how that could be. I thought just now that this
Canadian fund will be a powerful instrument of centralization and that,
if the objective was comparable to Quebec's objective, the
provinces—certain provinces—who, at this time, are showing an
interest in taking
charge of their own development, and who do not trust the central
government, or not completely, could worry that this powerful central
instrument is not to their benefit.
At the same time, I thought that, in any event, this is going to be
a centralizing tool.
Once again, I say “Thank goodness Quebec was able to acquire, in 1965,
this tool which made it possible, despite other hostile factors, to
bring about significant development of Quebec”. Back then, Quebec did
have all these businesses, with important businesses, even in certain
cases multinationals, controlled and owned by Quebeckers. It is
generally known that businesses in Quebec, in Canada and in North
America were foreign owned.
[English]
Mr. Gary Pillitteri (Niagara Falls, Lib.): Mr. Speaker, I
welcome the opportunity to participate in today's debate on Bill
C-2, the Canada Pension Plan Investment Board Act.
I would like to congratulate you, Mr. Speaker, on your
appointment and to thank my constituents for the trust they put
in me by re-electing me as their federal representative.
My remarks today will focus on a very important element of the
legislation at hand, a new investment for the Canada pension
plan.
This policy is critical to the sustainability of the CPP
reforms. It enjoys the support of all the provinces and all the
pensions experts. Even more important was the overwhelming
support of Canadians during the public consultation on the CPP.
1645
A number of key themes emerged from these consultations, which
included 33 sessions in 18 cities across every province and
territory.
What did we learn? We learned that Canadians wanted to preserve
the CPP. They wanted to reduce its cost, to straighten its
finances and to improve its investment practices. All of these
themes are mutually sustaining. A better investment policy is
vital to preserving the CPP.
Ordinary Canadians and experts alike have made it clear that a
better investment policy for CPP would be one similar to that of
private and public pension plans. CPP funds would have to be
invested in the best interests of plan members, with a proper
balance between returns and risks. This would call for an
effective government structure to be put into place in order to
ensure sound fund management with the right measures of
independence and accountability.
The consensus in favour of this principle was clear. In October
1996 we saw the federal and provincial finance ministers adopt
them as guiding principles for the new investment policy.
These principles will be turned into concrete reality by the
legislation before us today.
The legislation proposes that in future CPP funds will be
carefully invested into a diversified portfolio of securities in
the best interests of plan members, like other pension funds. In
turn, the fund will be managed by qualified investment
professionals at arm's length from government by a board of 12
directors, the CPP investment board.
To ensure independence of the board, the legislation prohibits
government employees from serving as directors and it requires
that the board include a core of directors with financial
investment expertise.
Bill C-2 includes a conflict of interest provision for directors
and officers of the board even more stringent than those under
existing Canadian corporate law.
The question now is why this new investment policy is necessary.
Why not continue with the existing policy?
At present the CPP has a fund equal to about two years' worth of
benefits. Funds needed immediately to pay benefits are loaned to
the provinces at the federal government's long term bond rate,
which is slightly below the provinces' own cost of borrowing from
financial markets.
As it happens, this policy has given good returns until now.
That is because much of the money was locked in at favourable
rates in the eighties. However, with the current financial
environment such a policy cannot be expected to deliver the best
investment performance over the long term.
Canada's chief actuary, responsible for evaluating the financial
position of CPP, estimates that the old policy could be expected
to yield a real rate of return, that is the rate of return minus
the rate of inflation, to about 2.5 percent annually.
Under the new policy the chief actuary considers the long term
annual real return of about 3.8 percent to be realistic.
1650
Clearly there is a lot at stake in the investment of the CPP
fund. This is why a great deal of care has been given to the
vital matter of fund governance in the drafting of this bill. A
CPP investment board will set broad investment policies and
oversee the progress of the fund but will hire qualified
investment professionals to manage the investments on hand on a
day to day basis.
In setting investment policy the board will be subject to
fundamentally the same rules as other trustees of pension funds.
Most of the investment regulations under the Pension Benefit
Standard Act will be applied to the board and the foreign
property rule limit for pension funds will be strictly respected.
The federal-provincial CPP agreement of February 1977 does
specify a couple of further parameters for the new investment
policy. For the first three years the board's domestic equity
investment will be selected passively, meaning that the board
will mirror one of the more broad market indexes instead of
picking individual securities.
A fund that invests in this way tends to reflect the composition
and the average return of the market as a whole. This
requirement is meant to help ensure that the CPP fund's entry
into the equity market proceeds smoothly. This investment
approach is a common practice among Canada investment funds. It
still allows for significant investment discretion with respect
to allocation. For example, the passive equity requirements will
be re-evaluated at the first triennial CPP review.
Also under the new investment policy provinces will continue to
have access to some CPP funds. However, the practice of provinces
paying interest on a new CPP loan below the cost of the old
market borrowing will come to an end. From now on when provinces
borrow from the CPP they will pay the same rate of interest as
they do on the market. As a traditional measure provinces will
have the option of rolling over their existing borrowing at
maturity, at market rates, for almost 20 years.
For the first three years provinces will have access to half of
the new CPP funds that the board chooses to invest in bonds at
market rates. After these three periods, to ensure that the
fund's investment in provincial securities is in keeping with
market practices, new CPP funds offered to the provinces at
market rates will be in line with the proportion of provincial
bonds held by pensions funds in general.
Having spoken about the CPP fund's proposed investment practice,
I would like to take a moment to reassure anyone who has wondered
about the impact of the new fund on Canadian capital markets.
I mentioned that the policy of passive investment in domestic
equity will help smooth market entry for the fund. There are
additional reasons to be confident that entry of the new fund
will not disrupt capital markets. Canada's capital markets are
mature, well developed and growing. Moreover, the new investment
fund will grow gradually in its first few years. Even after 10
years the size of the CPP fund would only be comparable to that
of the Caisse de dépot and the Ontario teachers pension fund.
1655
It should also be remembered the the CPP will be reviewed every
three years. Hence there will be ample opportunity to evaluate
the fund's impact on markets and to make any necessary
adjustments.
Ensuring the independence of the CPP investment board is a very
important aspect of today's bill. However, just as important are
the provisions designed to ensure that the board remains
accountable not just to the federal and provincial governments
but to the Canadian public.
The investment board will keep Canadians well informed of its
policies, operations and investment results in the following
ways: making its investment policies, standards and procedures
public, releasing quarterly financial statements, publishing an
annual report, and holding regular meetings in each province to
allow for public discussion and input.
In addition, the ministers of finance and human resources
development will prepare an annual report on the CPP which will
include the financial statements of the CPP investment board as
well as the report of the auditor general on those statements.
This report will be sent to the provincial finance ministers and
will also be tabled in Parliament.
In conclusion, the effect of the new policy I have outlined will
be to treat the CPP as a true pension plan. This is not just my
view but that of experts in the pension field. One of the most
distinguished of them has written that a move to a market
oriented, diversified investment policy would enhance
intergenerational fairness, increase public confidence in CPP
finances and also increase the CPP fund's prospective rate of
return which in turn would reduce the long term cost of the plan.
In short, the legislation before us will address a range of
crucial objectives for ensuring that Canadians will be able to
look toward their retirement years with greater confidence and
security.
[Translation]
The Deputy Speaker: It is my duty, pursuant to Standing Order 38,
to inform the House that the questions to be raised tonight at the time
of adjournment are as follows: the hon. member for Tobique—Mactaquac,
government expenditure; the hon. member for Sackville—Eastern Shore,
fisheries; the hon. member for Calgary SouthWest, foreign affairs; the
hon. member for Red Deer, foreign affairs; the hon. member for Edmonton
North, foreign affairs.
[English]
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I hear a
lot of talk in the House today about wanting an actuarially sound
plan.
I know of a plan that is actuarially sound. I heard about one
tier, two tier and three tier. The fourth tier they forgot to
mention was the MP pension plan. There were members across the
way, people who used to be members, who are collecting $3.4
million. There are people across the way who are eligible to
collect $2.8 million. There are people in the Conservative Party
who are eligible to collect $4.3 million.
If they are talking about something that is actuarially sound
why do they not comment in terms of this pension, the one that we
are going to be paying double into, 9.9 percent of our income? MPs pay
only 9.5 percent of their income and yet they can collect millions.
Canadians can only expect $8,800 a year for maximum contributions
under the CPP. Why do they not comment on that?
Mr. Gary Pillitteri: Mr. Speaker, I would like to comment and
make some response on the present plan we want to bring in. Had
we not brought in these measures within this pension plan it
would have gone up to 14.3 percent. This is almost the same as
they are proposing to have as their super RRSPs. I think
Canadians have confidence in the government. Canadians want to be
sure that when they retire there will be a pension plan there for
them. Canadians want to be sure that the future is more secure.
1700
The hon. member was talking about the MP pension plan. I think
he has just been elected. I wonder if he knows the policies of
his own party. As a matter of fact, there was a member here in
the last Parliament who wanted to increase the pay of members of
Parliament to $150,000. I think he should be asking his own
party some of those questions.
We have put proposals in the House that address the issues of
today and not of yesterday. When he asks about pensions I hope
he will stay here long enough to see the measly pension we will
receive. I hope he can stay in the House in order to qualify for
it.
Hon. Ronald J. Duhamel (Secretary of State (Science, Research
and Development)(Western Economic Diversification), Lib.): Mr.
Speaker, I listened with attention to my colleague's remarks and
there are two points I want to raise with him.
Would he please share with the House once again the expert's
view on pension plans. I would much prefer that rather than the
rhetoric from the opposition whose only purpose is to try to
ridicule and diminish something to which a lot of people have
given a great deal of thought. They are people with a whole lot
of background. They are people with a great deal of expertise
and people who know what they are talking about. Perhaps my
colleague could mention that. I would like to contrast that
response to that which I have just heard, which was pompous.
Mr. Gary Pillitteri: Mr. Speaker, I thank my hon. friend
for the question.
What I am hearing across the floor is funny. It is always the
same rhetoric for the haves. Let us remember the Canadians who
were not able to accumulate savings, the Canadians who were not
able to take care of themselves. This gives them that
opportunity. I fear to ask him what would happen to the people
who did not accumulate savings for their own pensions, how they
would be when their retirement age comes?
The government plan is to assure that every Canadian regardless
of his pocket book, when he or she retires, will have the
opportunity to live with dignity and not to live in poverty as
the hon. member from across the floor would have it. Every
Canadian should live in dignity for the long hours and days they
have worked. They should be able to know that some security is
there for their old age.
There is an additional reason for us to do this expeditiously.
The federal and provincial governments are joint custodians of
the CPP. The proposed new rules will need the approval of at
least two-thirds of the provinces representing at least
two-thirds of the population before they can come into effect. We
have to give the provinces the time to do this. They could come
into effect within a year.
What we are asking with this policy, with this bill, is not only
that the federal government be the custodian but also the
provinces. They have to agree. We are not asking, as is claimed
across the floor, that we should let those who have live in
comfort at the expense of those who have not as much. Later on
in life some of us might need to have a government that will
protect us. It will not be a pension plan that is exuberant but
a pension plan that is realistic.
1705
Mr. Nelson Riis (Kamloops, NDP): Mr. Speaker, I am very
happy to have an opportunity to say a few words on Bill C-2, an
act to establish the Canada pension plan investment board and to
amend the Canada pension plan and the Old Age Security Act and to
make consequential amendments to other acts.
That is quite a mouthful but it is important that the people who
are watching Parliament recognize that we are speaking to Bill
C-2, about the Canada pension plan. The soon to come new
seniors' benefit package, which has major implications for future
retirees, will come at a later date but today we are talking
about amendments that the government is suggesting to the Canada
pension plan.
To put my comments in context I have two sons in their twenties.
When I chat with them and their friends I hear that they are
concerned about the future and whether there will be pension plan
for them. It is fair to say that for a large number, in spite of
the rhetoric and the promises that they hear, they are of the
mind that there probably will not be a pension plan for them.
When we talk to seniors they are concerned about the future. I
think it is fair to say that there will be a Canada pension plan
in the future and those people who say that there will not be are
simply fearmongerers. They are trying to appeal to people who
feel vulnerable at the moment. But what we are doing today as a
result of these proposals is to do whatever is necessary to
ensure that the Canada pension plan continues into the future and
that people in the following generation will be assured of a
Canada pension.
That does not say that life is going to be great for people.
Already we know that if people rely on the Canada pension plan
and old age security as their sole income in their retirement
years, that is a very modest income. As a matter of fact it is
fair to point out that thanks to the public pension plan of
Canada that the number of seniors living in poverty has decreased
over the last number of years and I think it is fair to say thank
you to the Canada pension plan, thank you to our pension plans
generally.
But it is with a great deal of sadness that we have to admit
that one out of every five elderly people in our country live in
poverty. One out of every five people who built this country are
living in poverty. I suspect that as active members of
Parliament we are in touch regularly with seniors who are having
a difficult time getting by, who are have a tough time making it
on the meagre pensions that they receive.
I want to ask right from the start, are these changes to the
Canada pension plan going to result in more money for Canada's
seniors dependent on CPP? I am reluctant to say it but the
answer is no, that people will actually receive fewer benefits in
the future.
When we look at the various benefits that are attached to the
CPP people can expect over the next number of years to have about
a 10 percent reduction in the level of benefits. That is going to
impose incredible hardship on a lot of people.
The cost of living increases every year, although modestly, and
for retirees who are in trouble today financially, things are
going to be worse actually in the future. That is what this
legislation says. It is a modest reduction but nevertheless a
reduction.
I want to go back and talk a bit about the Canada pension plan
and how we got into this situation. It was established in 1966
to provide all members of the paid labour force and their
families with a base on which to build their retirement income as
well as benefits in the event of serious disability or death.
Again, let us just pose a question rhetorically, will people
receiving death benefits get a better deal in the future? With
this legislation the answer unfortunately is no. Will people
with a disability get a better deal in the future? The answer to
that as a result of this legislation is also no. The legislation
makes it more difficult for people suffering from a serious
disability to apply for and receive Canada pension plan benefits.
1710
Is this something that we actually want to do as members of
Parliament? If someone is experiencing a serious disability and
is unable to work, do we really want to make it more difficult
for them to receive benefits? And fewer benefits at that. There
seems to be something wrong with some of the basic logic.
We also have to acknowledge the fact that one out of five
seniors is living in poverty. We would like to see an increase
in the CPP, but in fact with this legislation we will see a
marginal decrease.
We have to ask ourselves what kind of a country we have that
does not care well for its elderly. I forget who it was that
said a few years ago that you can tell an awful lot about a
society when you see how it cares for its children and its
elderly. There are 1.4 million children living in poverty. One
out of five seniors is living in poverty. We have a long way to
go. I regret to say that this legislation will not improve the
situation significantly.
Why was this legislation required? When it was set up back in
1966 the economy was different. There were some assumptions
built into the benefit levels and the premium levels. Things
have changed. We were informed, accurately so, that this plan
could not continue as it is without getting into serious
financial difficulty. I do not think there is a single Canadian
who would argue against that. Canadians were calling on the
government to change the system. They do not want to do away with
the system, as some would suggest. However, we have to make the
necessary changes to ensure that the Canada pension plan is there
in perpetuity. To be fair, this is an effort by the government to
do just that. Whether it accomplishes that is another question.
There are some good points and I want to identify them before I
get into some of the concerns which New Democrats have. One is
the fact that transparency will be built into the system. That
is a positive feature of the legislation. Another is the fact
that Parliament will have an opportunity to review the system's
effectiveness on a regular basis. That is also positive. Also,
seniors will receive on an annual basis a statement on the state
of health of the Canada pension plan. That will be helpful. The
fact that it does not touch existing seniors' packages is also
helpful. People who are retired today will not have to be
concerned about some of the matters we will be raising in the
next few minutes because they will be exempt.
Yes, there are positive features to the legislation. Perhaps
most importantly, it makes a serious effort to ensure the
viability of the Canada pension plan. For that we must all be
pleased.
What are some of the concerns? Of course we will address these
concerns when the legislation is considered in committee.
One of the concerns we have is that it would appear that this
may have a very detrimental impact on job creation in the
country. If we take $750 annually in additional payments out of
each person's pocket, that removes a lot of disposable income
from our citizens. When $700-plus is taken for every employee in
a firm, that takes a lot of money from that firm. It will take a
lot of dollars out of Canadian communities.
I did a calculation for one of the communities I represent, the
city of Kamloops. The amount of money which will be taken out of
the local Kamloops' economy as a result of individual
contributions and company contributions which match them will add
up to approximately $80 million annually. That money will be
plucked out of that one small local economy. It will not be
there to circulate time and again between businesses and so on.
That will make a very major dent into the employment situation in
that community.
If we take that right across the country into every community,
large and small, what will that do to those seeking employment
today? Will it give them a better chance? The answer is no.
What about those who are in insecure job positions today? Will
this give them some confidence? The answer is no.
Will it give consumers more confidence to go out and purchase
goods and services?
The answer is no.
1715
This has to be a concern. Do we know what we are doing when we
pluck that kind of money out of a local economy, about $80
million annually out of Kamloops, B.C., once the program is fully
into place?
As a result of the impact particularly on small and medium size
businesses where I think it is fair to say times are not great
for many, an increasing amount of underground economy will be
encouraged. Employers will be more inclined to hire people on a
contract basis so that they do not have to make contributions to
the Canada pension plan.
I am not talking about only small or medium size. Some of the
larger businesses in this city that hire thousands of people use
that approach already. Many of their employees are now on a
contract basis to enable them to escape payroll tax. It is a
payroll tax by any definition.
I remember being in the House a few years ago when the
Conservatives brought in five or six increases to the Canada
pension plan. Every time the Liberals in opposition would rise
in a howl about the increase in payroll tax.
Now the sides have flipped a bit and the Liberals are suggesting
it is not necessarily a payroll tax. It looks like a payroll
tax, tastes like one, smells like one, and probably is one. I
think it is fair to say this is a major payroll tax increase.
What impact will it have on the ability of the country to produce
jobs?
Another concern we have as New Democrats is that changing the
way the fund is invested from providing funds to provinces into
an investment fund will have an impact on some of the poorer
provinces of the country.
If some of the more wealthy provinces were not able to get lower
rates from the Canada pension plan, they will go on to the
regular bond markets. The poorer provinces will have to pay more
for the money they borrow, which again will pose a hardship on
certain provinces of the country.
We can look at the fund. We can debate its merits and the way
it is constructed. The 12 person management board will manage
funds in a very diversified portfolio of stocks and bonds
including provincial bonds and so on. The anticipated cost will
be about $500 million.
If we are to be providing a fund perhaps as high as $126 billion
in six years, that fund generated by the citizens of Canada ought
to go into helping those firms that will create jobs.
If the fund is invested in the safest bet it will probably buy a
lot of bank stock. Will it actually help the Canadian economy by
having the fund hold bank stocks?
We can look at the Quebec government plan. It has a very clear
directive to the Quebec pension plan to invest moneys that will
create jobs in the province of Quebec.
This seems to be a very honourable motive. If we as
parliamentarians are to use $126 billion of taxpayers' money in a
fund, it would not be inappropriate for us to say we want the
funds invested in secure areas. After all it is a pension fund.
It should invest in areas that will result in some additions to
the economy in terms of new jobs, new research, various
affirmative action programs or programs to assist young
entrepreneurs or young people to enter the job market.
A very clear direction should be given from the Parliament of
Canada that we want the fund invested in useful ways as opposed
to a fund that will perhaps buy bank stocks which will have
marginal impact on assisting the Canadian economy generally. That
is another concern.
What does the fact that these premiums will increase about 73
percent over the next six years mean in terms of disposable
income for people?
We are not convinced that a 73 percent increase is necessary.
When members look back at the reports on which the present
legislation is based, they will see that the government assumed
the worst case economic scenario in terms of worst case interest
rates, worst case inflation rates, worst case economic growth,
worst case unemployment levels and so on.
I am not suggesting we should take the glorious side, but when
making projections over a 20 year period it is fair to say that
we should not always take the most pessimistic scale. We should
take the medium scale or a scale that will be reasonable over
that length of time. Then the increase in premiums could be
significantly lower.
1720
We have some serious concerns about the legislation. I
emphasize the impact on those who are disabled. It will make it
more difficult for people with serious disabilities to qualify
for the Canada pension. Is this really the kind of legislation
we want to introduce?
I suspect that most members of Parliament working in their
constituencies inevitably spend a good deal of time with people
who are having difficulty qualifying for Canada pension
disability. We go to bat for people and help make their cases.
Almost universally they are rejected the first time they apply.
Then they try again. Many months go past with people living in a
marginal fashion and then being either granted or denied Canada
pension disability. The legislation will result in making the
process even more difficult for people and the benefits less.
Is that really what we want to do? I think not. If people are
taken out of the workforce through no fault of their own, either
as a result of disease or an accident, and cannot provide for
their family, will we as serious, caring, compassionate people
make it tougher for them to qualify under the Canada pension
disability program? This legislation says we will.
I do not know if we appreciate what a person receiving Canada
pension plan disability would get. It is less than $9,000 a
year. I would like to see anybody raise a family on $9,000 a
year. The legislation will make it more difficult for people to
access it and they will receive even fewer benefits.
Obviously I could talk about a number of other items. We will
have an opportunity to raise these concerns in committee.
In closing, Canada is distinguished from many other country by
the way we treat each other, the way we care for each other. It
is fair to say that as a result of the old age security program
and other pension plans like the Canada pension plan we can take
pride in that fact major steps in the past have ensured that
Canada's elderly are able to live out their lives in dignity.
With the changes being proposed, will that be the case in the
future? I think of my previous colleague, Stanley Knowles, and
many others who have worked hard to ensure that the standard of
our plans in support of seniors continue to increase and improve.
I wonder if this regressive step is appropriate for the
government and parliament to take at this time. I obviously
think not.
Next weekend I will be sitting down with my dad who is in his
late 90s and my mother who is in her late 80s. They are probably
listening to me speak today. I will have to tell them that we
are looking at legislation that will result in diminishing their
pensions. I know how they will respond. They are very generous
people who live a very modest lifestyle. They will scratch their
heads and wonder if we have gone crazy. Why on earth would we as
a parliament want to make the lives of seniors more difficult in
the future?
We live in the richest country in the world. It seems to me
that all our seniors ought to be able to live out their lives in
dignity. The fact that one out of five seniors lives in poverty
is immoral and we ought to change that.
I urge members to gives some thought to the concerns my
colleagues and I will be raising. Let us change the Canada
pension plan to make it a plan for the future that will enable
people to live out their lives in dignity. For goodness' sake,
let us not amend the plan so that the lives of seniors will
actually be made worse in the future.
1725
Mr. Murray Calder (Dufferin—Peel—Wellington—Grey,
Lib.): Mr. Speaker, I listened with interest to the member
for Kamloops. Over the last four years I have known him to be a
member of Parliament who really cares.
I was happy to hear that he agrees with certain parts of the
CPP. Of course there are parts that he does not agree with. When
we take the bill to committee we will tinker around to see if we
can make it agreeable to everybody.
I would like to question the member on his thought about the
increase in CPP causing unemployment. That could be a concern. I
have raised the issue of CPP disability before. I raised it with
a member of the Reform Party as well.
Currently 300,000 Canadians are receiving CPP disability.
Another 50,000 in Quebec are receiving QPP disability. For 1997
that will amount to $10,597 a year or $833.17 a month.
If CPP does not exist in the same way, what would an insurance
policy cost to replace those benefits? The whole workforce would
have to become involved in it. If they did not have an insurance
policy they would not have coverage.
Mr. Nelson Riis: Mr. Speaker, I listened to the member's
preamble, with all due respect, but I do not quite understand the
question. Could he repeat it?
Mr. Murray Calder: Mr. Speaker, if we change CPP, one of
the changes could be the disability benefit part. If it is to be
replaced it would have to be with an insurance policy.
Would the cost of that insurance put jobs in jeopardy? I do not
think we could get it as cheaply as we are paying out for
the same benefits?
Mr. Nelson Riis: Mr. Speaker, I do not know what it would
cost to provide disability insurance under a private plan. I
really could not say. I would have to look at the actuarial
tables and attachments.
If we as members of Parliament think that by increasing premiums
to individuals and businesses to the tune of $700 annually will
not have a major detrimental impact on a lot of the local
communities in the country, we are dreaming in Technicolor.
Mr. Dick Harris (Prince George—Bulkley Valley, Ref.):
Mr. Speaker, I thank the member for Kamloops for backing up so
many of the concerns of the Reform Party. We have been saying
for months that the CPP increase was simply an increase in
payroll taxes. The member for Kamloops just confirmed that, and
we appreciate it.
We also talked about and will continue to talk about the
detrimental effect this tax hike will have on jobs. The member
for Kamloops agrees. He knows very well that taxes kill jobs. We
thank him for that.
He also talked about people having much less disposable income
and not having as much money to spend in their communities. We
thank him for that. Perhaps we should invite him over to sit
with us. He sounds so much like a Reformer that I had to look
twice to see who was doing the talking.
He did voice some concerns. The Reform Party has come up with a
very credible alternative to the government proposal. As
mentioned by the member for Calgary—Nose Hill, it has been
submitted to think-tanks and the C. D. Howe Institute. They have
all said the numbers work.
Precisely what alternative plan, if any, has the NDP Party
created that it can offer as a viable and rational alternative to
the disaster the Liberal Party has come up with? What
specifically? Is there a plan? Does the NDP have a plan or is
it just simply criticizing, hoping to come up with one as soon as
it can?
1730
Mr. Nelson Riis: Mr. Speaker, I first want to indicate to
my hon. friend that the super RRSP solution is in our judgment
not the answer. Somehow there is the implication that the super
RRSP would not be a cost to the Canadian taxpayer. It would be a
huge cost. Even the present RRSP system is costing $18 billion a
year in terms of lost revenue to the federal government.
To answer my friend specifically, if he listened carefully he
would have heard me say that the assumptions on which Bill C-2 is
based were based on a model that we believe is incorrect. We
feel it is inappropriate that Reform based its recommendations on
what we feel is a worst case economic scenario over the next 20
years. A much more modest set of changes along these lines would
be acceptable.
We believe in the public pension plan system. My friend would
know that while his plan was based on an example in Chile, we are
suggesting what almost every European country that has gone
through this process has adopted. It is fair to say that the
lifestyle in Europe is somewhat superior to the lifestyle in
Chile without saying anything negative in particular about that
country.
We believe in a public pension plan. We believe that the Canada
pension plan has worked well until recently. The changing
economic times require some changes. I have yet to find a single
Canadian who says they are not prepared to provide more premiums
if they are guaranteed a pension when they retire. Let's face
it, the modest increases over the years have not kept up with the
realities of the economy and the growth in the pension fund, but
I find Canadians by and large quite accepting of this notion.
We believe the government has gone excessively too far. That is
why I say that we have a number of concerns we want to see
addressed in committee. We want to see the bill come back to the
House after committee with a set of changes much more in
tune with the economic reality of the future of the country.
Mr. Pierre de Savoye (Portneuf, BQ): Mr. Speaker, the
modifications that are proposed to the CPP will of course shrink
a certain number of benefits. Happily this is not so with the
Quebec pension plan.
My concern is with the Canadian pension plan super mutual fund
that the government will put in place to manage those moneys.
Our colleague from Kamloops rightly mentioned that taking $80
million out of Kamloops will certainly affect the local economy.
The only way that jobs will not be lost is to reinject that money
in that area through this kind of mutual fund. If they funnel
the money to Toronto we will be in a lot of trouble throughout
Canada, Quebec being a special case because we have our own
organization there.
How does our colleague react to that? Is he afraid Toronto will
get it all?
Mr. Nelson Riis: Mr. Speaker, when you look at the way
the federal government normally does its business, yes that is a
fear in terms of patronage allotment of funding.
The reality is we have to be more confident in the ability of
the management team that will be there. That is why I believe it
requires very clear directives from Parliament in terms of how
these funds are to be used. I would think they should be
directed to those areas of Canada that have experienced
particular difficulties, in the smaller communities and the more
rural areas, the more remote areas and so on.
I say with a great deal of satisfaction that we can look as an
example to how the province of Quebec has used its investments
with very clear direction to its management board as to how these
funds ought to be utilized to the best benefit of Quebec business
again with job creation as a major function of these investments.
If we were to do that then a great deal of the $80 million that
is being extracted from a community like Kamloops will be
reinjected to assist local businesses and create the jobs that
probably would have been lost by that removal of funds.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I
am pleased to participate in the debate on Bill C-2.
I would like to speak to my constituents and to Canadians about
the Canada pension plan.
1735
Many Canadians are concerned about the Canada pension plan. They
are concerned about its features, about its security. Sometimes
they get confused about how it relates to employment insurance,
old age security, the GIS, RRSPs, RIFs and all of the other
financial instruments that seem to be part of our daily dialogue
in this House.
They also hear things like the plan is bankrupt or it will not
be there for them when they get to retirement age. These things
are not true.
I want to start my comments to this House by assuring all
seniors in Canada who are currently receiving benefits under the
CPP system, whether they are survivor benefits or disability
benefits or whether they have reached retirement age and are
collecting benefits, that under the proposals before the House
those benefits will remain unchanged. They will continue to be
fully indexed and will continue to be there for them so that they
can enjoy the security and dignity of their retirement.
I want to clarify a few of the facts about the Canada pension
plan system. I have this concern that Canadians do not know
enough about our Canada pension plan system, the very basics of
what it is all about. I want to review a bit of the background,
a bit of the history, so they can have that level of confidence
improved.
The Canada pension plan which came in in 1966 has as its
hallmark the fact that it is a universal program. It is not an
income redistribution program. It is not like the OAS or the GIS
which are available based on your level of income. The CPP is
available for participation by all working Canadians from the
ages of 18 right up to 70. It is a plan that requires
contributions by an employer and an employee on a matched basis,
and the self-employed individual pays the full amount.
Canadians should also know that the Canada pension plan system
is a joint responsibility between the federal government, the ten
provinces and our two territories. Anything that happens in CPP
requires the approval of two-thirds of the provinces,
representing two-thirds of the population. Canadians should be
assured that the best interests of all Canadians in all regions
are being taken care of as we move forward to renew the Canada
pension plan system.
When the plan came in back in 1966 it had to respond to the
realities of the day. Who was retiring in the mid-sixties? It
was Canadians who came through the depression of the thirties,
through the war in the forties. These are Canadians who had a
totally different dimension of Canadian life during what we would
consider as their prime working years. It meant they did not
have the kind of savings they otherwise would like to have had
for retirement, and they had very little. As a consequence of
the plan's being set up in a way that would allow benefits to
reach full pension entitlement by 1975, it was accelerated.
Because of that acceleration and because there were so few people
working and making contributions there was no possibility of
fully funding the plan. There was no possibility of asking
Canadians to immediately put in dollars they needed for food and
for basic subsistence.
The plan first paid out in 1967 to those who were 68 years old,
and the first pension paid to a 65 year old occurred in 1970.
The Canada pension plan system is not just a pension. Possibly
it is misnamed. Everyone knows that on reaching retirement, and
you do have the option to retire early, currently you can get a
pension of about $8,842.
1740
There is also the ability to retire early, up to age 60, and
receive a reduced pension of 5 percent for each year of reduction. A
person can increase their pension entitlement by 5 percent each year if
they defer their pension to age 70. There is some flexibility.
A very important tax planning point for all Canadians is that
one spouse can split up to 50 percent of their Canada pension plan
benefits with their spouse. That is very important if the other
spouse stayed at home to manage the family home and care for
preschool children and, therefore, does not have a sufficient
number of working years. Possibly they did not work. It allows
the income to be split. It is an important opportunity for
Canadians to consider whether the income splitting of their
pensions will reduce the tax burden on the family.
In addition to the pension portions there are important
insurance components of the CPP. There is a survivors benefit.
If a spouse passes away there is a continuing benefit to the
surviving spouse even if they are under 65 years of age. There
is also a benefit to the surviving children of $2,000 a year up
to age 18 and up to age 25 if they are students.
One of the most important components of the Canada pension plan
system is the disability feature. It means that Canadians who
are in the unfortunate situation of having had a stroke or who
are otherwise unable to earn an income can receive a disability
benefit from the Canada pension plan. They will receive the
disability benefit until they reach age 65, at which time they
will commence collecting the normal pension payment.
This plan is secure, it is indexed and Canadians should know
that it is not just a pension. We do not have to look simply at
the money we put in and the pension we will get out. The plan is
much more than simply a pension. It is an insurance program. It
is there to protect Canadians.
Many of my colleagues have talked about the funding as being pay
as you go. That is basically because in the start-up period that
is exactly what was appropriate for that time.
Members have also noted that we have two years' worth of
benefits. There is some $40 billion of Canada pension plan
contributions invested in provincial bonds at a federal rate.
Members might be interested to know that in 1996 those bonds
generated a return of 11 percent. That is not nominal.
A lot of the discussions we have had today have been around the
investment board. Canadians should understand that we are
talking about getting into a more diversified portfolio of
investments so there is a possibility to earn even higher rates
of return. The more income the fund generates within itself, the
more dollars are available to keep the costs to the employee and
employer down.
There is another issue which I wanted to touch on briefly and
that is the issue of the unfunded liability. Because of the way
the plan was structured, there is no money waiting to pay the
benefits. In fact about 30 years of benefits would have to be in
place, which is a very substantial amount of money, and that
cannot happen very quickly. The compromise is to move to fuller
funding than we have today.
I wanted to talk a bit about the problems. The chief actuary in
this plan requires a 25 year schedule of rates which employees
will pay. The chief actuary has basically advised Canadians that
although we pay at a rate of 5.85 percent, which is split equally
between the employer and the employee, this rate will have to
increase to 10.1 percent by about the year 2015, and by 2030 it will
have to be raised to 14.2 percent. Those are the mathematics which are
in place now.
All members would agree that the 14.2 percent is much too high a burden
to ask current workers to pay to fund their future pension
entitlements. Fairness and equity are important issues and
important challenges.
If we were to make comparisons we would note that Sweden has a
21 percent contribution rate. France has a 19.8 percent contribution rate.
Admittedly they do not have old age security or the GIS. However,
we can see that if there is a need to provide benefits and we
have not planned that rates can go very high.
1745
Canadians should understand the important thing is to determine
how we can modify and how we can massage the current Canada
pension plan system so that benefits will be there for each and
every generation to come on a fair and equitable basis. We do
not want to pit seniors against youth and women against men or
social groups who want all kinds of benefits which they feel they
are entitled to.
We are not here to pit Canadians against each other because of
the difference in their age or the difference in their income
level. It is a universal program. It is there for all
Canadians.
I will give an example. A gentleman whom I know very well, Mr.
Phil Connell, who lives in my city of Mississauga appeared before
the public hearings on this CPP review. Mr. Connell said that
his contributions to the Canada pension plan up until he retired
some seven years accumulated to about $9,300. He said “Yes, I
get the employer's share which makes it $18,000 and that $18,000
was earning some income”. Mr. Connell also told the panel that
his seven years of benefits from the CPP were $54,287, about five
times more than he put in. He called it scandalous.
We understand very well that as the plan grows, matures and
things change that we do have to deal with that. I repeat,
Canadians, our current retirees, have to be assured that their
benefits will not be affected by what we are doing in this place.
They are going to continue at the current levels and they are
going to continue to be indexed and they are going to continue to
be there to protect them.
There are some factors which have changed which we have to take
into account as we make these changes. First, Canadians are
living longer than they did in the past. In fact we are living
3.1 years longer in retirement. In addition, it is expected that
by the year 2030 we are going to live a further 1.4 years. In
total, Canadians will live about four and a half years longer in
retirement than current retirees.
Obviously because of medical technology and so on, it means that
Canadians as a whole are healthier and we are going to live
longer. That means retirement pensions are going to be drawn for
longer periods of time. It means that it is a higher burden on
the Canada pension plan system to deal with it.
The baby boomers are coming. Everyone knows that. There are
going to be more seniors. In fact today we have five workers for
every pensioner. By the time we get to the peak we will only have
three workers taking care of one pensioner. We see that these are
natural things that have nothing to do with anybody's whim or
whimsy. It just happens to be the demographics of Canada.
The Canada pension plan was planned to have a rate of somewhere
around 5.5 percent but we have had changes. The low birth rates that we
have had in Canada and people living longer have added another
2.6 percent. We also have had slower growth in our worker output, lower
interest rates in the sixties and even though it has risen in the
seventies and eighties to around 6 percent it was very low in the early
years. That has added an additional burden of about 2.2 percent. We have
also enriched benefits for Canadians by indexing the Canada
pension plan in 1975 and also providing survivor benefits in
1975.
Who could deny the disability benefits that are applicable?
There are more claimants now and the claimants are for longer
periods of time than ever was anticipated. That has also added
about 1.5 percent. All of these things have contributed to put pressure
on the Canada pension plan system so that now is the time for us
to deal with it.
Parliamentarians are not deciding what we should do and why.
There were public consultations and they happen every five years.
There were some 33 sessions of public consultations between April
15 and June 10 right across Canada.
People had all kinds of very interesting input. I would like to
highlight for members what the results of those consultations
were. First, the consensus was that the CPP system was worth
saving. That is very important.
1750
Second, they said that the CPP should remain as a program that
is not for redistribution of income but rather universal and
available to all. Therefore, it is not going to be income
tested.
Third, they said that it has to be fair across the generations
and between men and women.
Fourth, they said that it had to be affordable and sustainable
for those future generations.
Fifth, they asked that the administration be tightened up to
make sure that it is efficient and that the 1 percent cost of
administration is kept at that level or lower.
Sixth, they do not want ancillary benefits to jeopardize the
principal benefit, being the pension income.
Seventh, they recommended that any future enhancements or
enrichments of the CPP program must be fully funded.
These are just some of the results of the cross Canada
consultations that took place involving the federal government,
the provincial governments and the territories. These are the
results of consultations with Canadians.
What is before the House are important recommendations for
improvements and changes to the plan to make sure that it is fair
and equitable among generations, that it is sustainable and that
we do the right thing.
The amendments to the act do not affect all present retirees as
well as those on disability or who have survivor benefits. Their
pensions will remain indexed. The ages for retirement will
remain unchanged, despite the fact that there were rumours of the
retirement age rising two, three, four or five years. There is no
change in retirement age.
We are going to move to a fuller funding. It will not be fully
funded but there will be more funding than we have had in the
past. Instead of just two years of reserve, there will be up to
five years.
We are also going to create the investment board. That means
that we will have professionals who are going to manage that fund
to make sure we get a competitive return with other investors in
the marketplace.
The contributions will rise over the next six years to 9.9 percent. It
will be on a gradual basis, not in one shot. It will be on a
gradual basis because that is the Canadian way. We want
Canadians to have a chance.
Again, I want to assure all seniors who have always been the
targets of the unscrupulous and those who would take advantage of
seniors because they may not understand what is happening. I
want them to know, on behalf of all parliamentarians here, that
based on the consultations we have had across Canada we are here
to act on behalf of the best interests of all seniors, of all
youth and everyone in between.
Mr. Jean Dubé (Madawaska—Restigouche, PC): Mr. Speaker,
I will be sharing my time with the hon. member for Markham.
[Translation]
Mr. Speaker, when the Minister of Finance tabled his bill to amend
the Canada pension plan last February, he claimed to have guaranteed the
future of the three pillars of our retirement income system. Those three
pillars are the Canada pension plan, old age security and the guaranteed
income supplement, and the fiscal support mechanisms for retirement
savings, such as the registered pension plans and RRSP's.
The government has indeed proceeded with some major changes to our
retirement income system, but like most of the things it did in the
course of its first mandate, these changes are full of inequity, lack
vision and are an unprecedented attack on those people who most deserve
help from the government.
Regarding old age security and the guaranteed income supplement,
the government announced in its 1996 budget that it would replace these
two measures by a single seniors benefit. The government made a
commitment at the time to introduce a bill and start public
consultations on the new benefit in the fall of 1996. A year later,
still no bill, still no consultation on legislation that will affect
many Canadians.
The government did not want to proceed with thorough public
scrutiny of the seniors benefit before the election. What was it afraid
of?
It was afraid that the truth would be revealed and Canadians would
realize that with the new seniors benefit, single seniors with an income
exceeding $31,000 would be disadvantaged, as would couples with a
combined income of $26,000.
1755
He was also afraid we would discover that recovery of 20 percent of
the benefits combined with the current rate of taxation would
result in a real rate of taxation of 60 percent for middle income seniors.
Nobody would want to save anymore for their retirement anymore.
In terms of tax breaks for retirement savings, the Liberals
received $300 million in new taxes from seniors by deciding that
the old age tax credit would be included in income. Furthermore,
the 1996 budget requires Canadians to convert their RRSP in the
year they reach 69, whereas in the past they could wait to do so
until they were 71.
They also twice cancelled planned increases to RRSP
contribution ceilings.
The government has also considered more than once the possibility
of taxing RRSPs. Canadians have no choice but to take other
measures to ensure long term retirement income before the end of
their active life. An ever growing number of Canadians have
already understood and are contributing to registered retirement
savings plans.
However, because of the regulations governing RRSPs, they are
unable to get the best return on the market for their money.
Restrictions on foreign holdings prevent them from creating a
portfolio varied enough to reduce financial risk.
Now the government is asking us to approve the principles of
these changes to the Canada pension plan. Although everyone agrees
on the need for reform of our pensions, the government's approach
contains some very disquieting elements.
According to the Minister of Finance, the current CPP
contribution plan should be changed in response to the concerns of
the plan's chief actuary.
[English]
This means that Canadians will have to pay $11 billion more a
year in CPP premiums without the benefit of other tax cuts to
offset this hike. In fact, this was such a contentious issue
during negotiations with the provinces that the agreement, which
was supposed to be reached in 1996, was only announced in 1997 by
the Minister of Finance and the Minister of Human Resources
Development.
Ottawa's refusal to bring down EI premiums at the same time as
CPP rates go up had been the biggest barrier to an agreement.
Self-employed Canadians will be hard hit by this accelerated hike
in premiums as they have to bear the burden of the combined
employer-employee tax rate. This means they will have to pay
$3,270 a year in 2003, thus removing financial incentives.
Self-employed individuals should be provided with greater tax
assistance on what normally would be the employer share of
contributions. Premium increases also place a greater burden on
the working poor which include women and young people.
[Translation]
Nowadays, there are five people of job age for every retired
person. In twenty years or so, this will have changed to four workers
for every retired person and, when today's young people retire forty
years from now, the proportion will be three for every one.
Future generations will bear the cost of the changes, because they
will have to pay higher premiums, while receiving lower benefits. The
cost of changes will not be borne equally by the different generations,
and this should be unacceptable to a government that says it is
concerned about the future of young people. Many of them have no faith
in a public pension plan and who could really blame them?
The Liberal government promised that retired people and those over
65 on December 31, 1997 would not be affected by the change. The
government also promised that those now receiving disability benefits
would not be affected by the measures.
When we know that 4,000 people are now waiting for their
application for disability benefits to be heard by the CPP appeal
tribunal, we are entitled to wonder whether the government is not trying
to drag out the process so that people will receive reduced benefits
under the new rules.
This may well not be the government's intention, but we must point
out that it is unacceptable that those waiting for disability benefits
must wait up to four years for a settlement.
1800
This mismanagement does nothing to give the public faith in the
ability of the present government to administer the CPP. This lack of
faith now extends to the government's proposal to modify substantially
the structure, financing and investment of the CPP.
You will forgive me for not believing what the government says
about the benefits of reform. I do not question that it is sincere in
wanting to rectify the problems facing the CPP. I just question its
methods.
I urge the government to review the impact these changes will have
on the most disadvantaged and to take action to ensure that the cost of
restoring the viability of our pension plan is borne equally by all
Canadians.
[English]
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, this
problem in terms of the baby boom generation coming up and
creating a bulge in the Canada pension plan is something that has
not been hidden from anyone. It is something which has been
obvious for years. The whole idea of the baby boom population
burst has been talked about for at least a decade, certainly
within my frame of reference.
However, the party across the way and the government have both
been responsible for the boondoggle that has happened with regard
to the CPP. The way they set it up was intrinsically flawed. It
was set up as a pay as you go system rather than somebody's
individual earnings and payments going into the plan to look
after them in their retirement. It is a pyramid scheme.
When they were in government did they not realize this was
coming to fruition? Did they not see these things?
Mr. Jean Dubé: Mr. Speaker, if we had been given a
chance, I think we could have changed it in a positive way. Our
party believes there is a need for change in the system, but it
is how the changes will be made and how they will affect
Canadians, low income earners, youth a women.
We heard the government a while ago say that there was no
problem because there was a lot of money in the fund. We
have heard it say no problem before. We heard it with the last
referendum in Quebec. We heard it with the EI, that there was no
problem.
In my riding in New Brunswick I have seen what the EI reform did
to the citizens there. It was detrimental. We want to make sure
that the government listens to what Canadians have to say and
make sure that Canadians are consulted. There are problems in
the way the plan is being presented. Believe me, if it does not
listen it will have a problem.
I am saying to the government today to make sure that
consultations continue.
Ms. Bonnie Brown (Oakville, Lib.): Mr. Speaker, I would
like to welcome the new member for Madawaska—Restigouche to the
debate.
I feel that having been here in the previous Parliament I should
clarify some of the misconceptions which he expressed in his
speech.
He mentioned that there were no consultations on the CPP
changes. That is simply not true. Members will know that the CPP
is a joint program of the federal and provincial governments and
the law requires that both agree. Last spring a member of the
government led consultations in every major city across the
country. Not only was he present but other members from the
government side were present and their counterparts of the
provincial governments came to hear the witnesses with them.
Those witnesses included representatives of most seniors groups,
and even some young people came to make their views known.
Consultations were held.
I am glad that the member agrees that there is a need for
reform. I feel that it is too bad that other members of his party
when they had the chance to bring these reforms about 10 years
ago did not see the light as he has. He complains that we only
brought forward the reforms in 1997 when they were due in 1996.
There was an opportunity in 1986 to begin these changes which
would have meant less dramatic changes had it been done then.
I wonder if the member agrees that perhaps his party when it was
in power should have moved then in order to lessen the burden
today.
1805
Mr. Jean Dubé: Mr. Speaker, I thank the hon. member for
her comments. I heard about the consultation in major cities,
but not all cities were affected by the consultation.
The people of my riding in northern New Brunswick did not hear
about the consultations. All Canadians have a right to be
consulted if it is going to affect their wallets.
The hon. member says that consultations have been ongoing since
1996. If that is so, why are seniors throughout Canada very
nervous about the changes being made to the CPP?
We saw the effect which changes to the EI had on the citizens of
Atlantic Canada. We want to ensure that does not happen again.
Mr. Jim Jones (Markham, PC): Mr. Speaker, the amendments
proposed in Bill C-2 are simply not acceptable to the party to
which I belong. However, I agree that we have to decide on a
course of action quickly. We should not prolong or delay the
deliberation of this bill.
I am also sure that many Canadians will agree that the proposed
changes will harm their retirement years. I would like to address
three main points which arise from the legislation.
CPP premiums will rise at a faster rate than originally planned.
Taxpayer disposable income will be negatively affected as their
budgets will need to be altered once again. Changes in the way
benefits are calculated will slightly reduce the pensions of
future beneficiaries, reduce health benefits and make it harder
to qualify for disabled benefits. This means that present
contributors will be forced to pay more while being told they
will receive less.
Bill C-2 sends out messages to three groups. First and perhaps
most relevant are the working Canadians who over the next 20
years will pay out more in CPP premiums and in the end receive
less in benefits. Even if current forecasts are incorrect, the
previous pay as you go system which had today's workers paying
for today's pensioners will be overhauled to become a fuller
funding system, where today's workers will pay for today's and
tomorrow's pensioners and will have nothing for themselves. It
used to be a privilege for Canadian citizens to receive the CPP.
Now it has become a burden for working Canadians as they must pay
more and more as premiums increase.
Second, the proposed changes in the legislation will force
working Canadians to rely more heavily on workplace pensions and
RRSPs. Higher CPP premiums imposed on Canadians leave less
disposable income for individuals to manage their own private
retirement portfolios.
The fact that benefits received will be based on the average of
the past five years' earnings instead of three means that for
most recipients pensions will be 3.7 percent lower than in the present
system. Therefore the need for private pension plans is even
more relevant.
Third, I am concerned for the self-employed worker who will
consequently be hit hardest by the changes proposed in Bill C-2.
We know that small businesses in Canada are stressed with
payroll deductions, but now they must face yet another hike in
expenses.
Those who are self-employed will be excessively strained for
cash as they must contribute 100 percent of the proposed increases. The
self-employed individual must contribute both his or her portion
plus the employer's contribution, who in this case is one and the
same. This means that by the year 2003 an additional $3,270 must
come out of the pockets of small business owners based on the
proposed figures.
What financial incentives do we offer Canadians who are
self-employed or who are considering self-employment? I would
argue none. This is a time when the self-employed are driving
the economy, creating jobs and growing rapidly. Self-employed
individuals should be offered greater tax assistance on what
normally would be the employer's share of the CPP contribution.
Changes to CPP benefits should not only impact on future
generations but also on individuals currently collecting the
Canada pension plan as well as those nearing pension
eligibility.
1810
Working Canadians and future generations will be hard hit by both
reduced benefits and increased contribution rates. It is
imperative that the government strive for fairness with the
pension system. This means that changes must be applied fairly
to all Canadians. Higher contributions mean less disposable
income, disposable income that could be used to save smartly for
retirement.
Women will be hit hard by the proposed amendments. It is a fact
that not only do more men than women have workplace pensions,
they also have more in those pensions. Most women have very
little disposable income to invest in RRSPs. Economists have
found that a small percentage of men and women will be
financially secure upon retirement.
Canadians are in need of legislation that secures future needs
but will not rob them of their independence to manage their
present and future plans. Premium increases place greater burden
on the working poor than on wealthy Canadians. This is not a
fair deal for Canadians as current recipients will not be
affected but future benefits will be lower for Canadians taking
into consideration inflation.
Our youth are another group that will be affected by the
proposed legislation put forth by the government. As I have
alluded to, the cost of this fund will not be shared equally
among the generations. The burden of this tax grab will fall
most heavily on young Canadians just entering the job market.
Taking into account inflation and any possible changes in
policies, today's young Canadians are faced with small or even
negative real returns on their retirement investment under the
Canada pension plan.
One must consider the following points with respect to the
proposed amendments. Canada pension plan premiums will rise at a
faster rate than originally planned. Changes in the way benefits
are calculated will slightly reduce the pensions of future
beneficiaries, reduce the death benefit and make it harder to
qualify for disabled benefits. The plan no longer will lend
funds to the provinces at preferred rates. Those proposed changes
offer nothing to make the Canada pension plan self-financing.
They do nothing to offer CPP premiums with tax cuts and do not
encourage greater RRSP savings.
Canadians realize that it is imperative for them to begin
planning for retirement in advance. More and more we see that
Canadians are striving to ensure stronger financial security in
retirement via retirement savings plans. However, it is becoming
extremely difficult due to the rules governing RRSPs which are
preventing Canadians from getting maximum potential returns on
investment.
Restrictions on foreign content hinder diversification in a host
of investment opportunities required to minimize financial risk.
Our current government has twice reduced the annual contribution
limits and is moving even closer to taxing RRSP savings. This is
unacceptable to Canadians.
The current foreign content limit of 20 percent reduces Canadian
pension earnings by about $700 million per year. If this rule is
removed the market value of CPP could potentially increase by 20 percent
to 25 percent. The side effect of a foreign content rule reduces the
competitiveness of Canadian companies as they have less incentive
to be efficient.
The proposed amendments to Bill C-2 raise questions as to the
amount of money the current government can pull from the pockets
of the middle class when at the same time it is cutting future
retirement benefits. The Liberals have no overall plan for the
retirement of Canadians. Honest working Canadians pay more
today, receive less later and have less disposable income to do
responsible planning for their retirement years.
We must not rush into a plan without clearly knowing what the
long term repercussions are. The Canada pension plan must be
fair and equitable to all Canadians.
Mr. Peter Stoffer (Sackville—Eastern Shore, NDP): Mr.
Speaker, I have one question for the hon. member with
regard to the speech made earlier today by the leader of the
Conservative Party. He would increase the pension plan and
contributions to the plan but at the same time he must give tax
breaks in other forms.
Will the Conservative Party, of which 13 members are from
Atlantic Canada, help us, the New Democratic Party, in pushing
the government for a reduction of the HST? The Liberals thought
we were not bad enough off with the GST so they threw the HST on
us as well.
Will they assist us to get a reduction in the HST to help the
pensioners and those with low incomes in Atlantic Canada?
1815
Mr. Jim Jones: Mr. Speaker, I know that we will help
reduce the premiums for EI payments. The HST which is the
harmonized sales tax and the GST are performing a function which
replaces the manufacturing tax. I would like to see as we get to
a balanced budget the revenues from the HST used to reduce the
debt. That is what I thought it was initially set up for. In
the long run by reducing the debt and the debt servicing costs we
can reduce taxes for all Canadians. That is what we must strive
for.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I
heard the comment of the leader of the Conservative Party that
any increase in the rates of the Canada pension plan system would
have to be offset by tax breaks. The leader of the Conservative
Party did not articulate exactly what taxes he was talking about
and how much. It is an important question which has been raised.
If we consider that the Canada pension plan premiums are
contributed by those who are working, that is a defined set of
people. We should then also look at who is affected by tax
breaks. For example if there was a tax break on personal income
taxes, there are people who do not work but have a lot of income
because of investment income or other sources which are not
insurable earnings. There are retirees as well who are paying on
their corporate pension plan entitlements, CPP et cetera. Tax
breaks would apply to a different set of people than those who
are paying the rates.
Could the member clearly explain to the House how we can match
tax breaks specifically to cover the rate increases without
creating a significant charge against expenditures or increase
the deficit?
Mr. Jim Jones: Mr. Speaker, the Canada pension plan is a
payroll tax and so is the EI premium. What we are saying is that
for a tax reduction, taking the $5 billion surplus of the EI and
offsetting it against the deficit should stop now. As we get
into the balanced budget benefit that is supposed to be
forthcoming, that should be done on its own. To create jobs
maybe we should reduce the premium on the EI and offset it
against the Canada pension fund which workers and organizations
will have to pay. Both are payroll taxes.
Mr. Jerry Pickard (Parliamentary Secretary to Minister of
Public Works and Government Services, Lib.): Mr. Speaker,
this is my first time speaking on a bill in the House since the
election.
I would like to thank the people in Kent—Essex for their
support and I look forward to working on their behalf in the
House over the next few years.
I would also like to congratulate you on your appointment as
acting speaker. It does bring a great deal of honour to the
House to have people like you who have worked in Parliament and
have done a great job in the past. I congratulate you for your
efforts.
I appreciate having the honour to speak on this legislation and
I support it. The Canada pension plan is one of the defining
features of Canada.
In the last 30 years since the plan was introduced, by a Liberal
government I might add, we have certainly used it as a
cornerstone for our social policy. It certainly is the key to
the retirement policies and plans of all Canadians.
1820
In the last few years however concerns have been expressed about
the viability of the Canada pension plan. A recent article in
Maclean's magazine for example indicated that about
two-thirds of Canadians do not believe that it would be
sustainable as it presently stands. Canadians are concerned and
as members of Parliament it is our responsibility to take the
necessary steps to re-establish confidence in the public part of
society and make sure that the vital parts of this social union
are carried on with stable and secure programs for the future.
In order to meet the responsibility, our government has heeded
the concerns of the plan's chief actuary that the unbalanced
relationship between contributions and payouts is in jeopardy and
the long term sustainability of the plan must be addressed.
“Changes are needed”, he said, “if we want to ensure the
Canada pension plan's ability to meet the income security needs
of Canadians”.
Expert analysis has shown us that the rules of our plan need to
be updated to reflect the realities of today's world as well as
tomorrow's. We are not only fixing today's problem. We are
putting in place a plan for the future. We cannot continue to
operate as though we are living in an economic and demographic
situation that existed some 30 years ago when the plan was first
introduced. We need to meet today's economic and demographic
demands.
As a government we accept the responsibility of securing the
future of the Canada pension plan. We are not afraid to take the
challenges of responsibility. We took the challenge of dealing
aggressively with the deficit and we met it. We took the
challenge of government program review, the challenge of getting
government right, and we met it. Now we are taking the challenge
of securing the future of the Canada pension plan.
The amendments to the Canada pension plan contained in this bill
will enable us to meet that challenge. With the support of this
House, we will meet our responsibility to Canadians to make sure
that the Canada pension plan will be here for them when they need
it.
I want to emphasize that we have not developed these proposed
changes in isolation. These amendments are the result of a long
and wide ranging process of consultation that began in our last
term of office. This process of consultation included talks with
the provincial governments, our counterparts, territorial
governments, actuarial and insurance professionals,
representatives of social planning organizations, seniors, youth,
persons with disabilities and a large number of others who had
something they could bring to the discussion.
In short, we have consulted broadly with Canadians on the future
of the Canadian pension plan and on the need for change. One of
the clearest messages that we received during the consultations
is that Canadians want and need the Canada pension plan. We were
told in no uncertain terms to keep the CPP. Change it if
necessary but keep it. So that our objective is met to keep the
CPP but also to make the changes necessary to make it
sustainable, the plan now before us and in the future is here.
The plan's chief actuary has told us that if we do not rebalance
the relationship between contributions on one side and payouts on
the other, the fund will not last beyond the year 2015. Put
simply, current contribution rates are not sufficient to sustain
the current benefit payouts now or in the future. Let me express
that again. Current contribution rates are not sufficient to
sustain the benefits and payouts now or in the future.
To keep the current benefit structure, the chief actuary has
told us that we will need to increase contributions to 14 percent of
income by the year 2030. Fourteen percent of one's income is too
high and we know that. Once more, Canadians are unwilling to pay
14 percent. Therefore to have rebalance in a relationship between what
Canadians can reasonably expect to pay and the plan
contributions, we must plan reasonably the form that this benefit
is taking.
1825
A member across the way asks when did we realize this. It is
very clear. When we came to government three and a half years
ago, we realized there was a problem and so we did these
consultations. We have been working on this issue. We have been
doing the things necessary while the other government previous to
ours left it. It did not have the nerve to straighten things out
and correct things. Quite clearly we have done a great deal of
consultation and we are moving forward.
That rebalanced relationship is very important to where these
benefits are going and what is happening. As it is, Bill C-2
addresses this by proposing marginal increases in contribution
rates to be phased in over a period of seven years. In this way
contributions will increase by .4 percent this coming year or about $24
and will go up to 9.9 percent of income by the year 2003. This is
compared to the current rate of 5.85 percent.
Some of my colleagues opposite have described this increase as a
tax grab. I want to be very clear on the record that this is not
a tax issue. CPP contributions are not a tax. They are
contributions toward pensions. I guess they do not understand
pension contributions but that is what they are.
The premium payments will not go into the government's general
revenue. They will not be used in any form other than CPP. In
fact the bill states that the savings will become part of a
separate investment fund to be managed and invested on behalf of
the plan by an independent body. CPP contributions represent an
interested investment by Canadians in their own future. It is
not a tax.
Contributing to CPP is not paying tax. It is planning prudently
for the future of Canadians. CPP contributions are like
insurance premiums. They are invested to provide for future
needs. Contributions to company pension plans are not taxes. They
are deductible in a similar way that CPP contributions are tax
deductible investments in the future. I think it is important
that Canadians understand that.
Having cleared up one of the mistaken impressions, I would like
to turn now to clearing up another. That is the mistaken
impression that the benefits under the revised plan are going to
be cut drastically. Anyone who studies the bill will realize
that the changes being proposed to the benefits are modest. In
many cases benefit payouts would not change at all.
For example CPP retirement pension disability benefits, survivor
benefits or combined benefits currently paid are not affected by
these amendments. Also anyone over 65 as of December 31, 1997
who elects to start receiving a CPP retirement pension after that
date will not see the pension affected. All benefits under the
CPP, except the death benefit, would remain fully indexed to
inflation.
The ages of eligibility for retirement, early, normal or late,
would be unchanged. Canadians would continue to be eligible for
early retirement starting at age 60, normal retirement age would
be age 65 and late retirement eligibility would continue up to
age 70. There would be no impact on the child benefits either
for current beneficiaries or future ones.
These basic features of the CPP would remain the same but there
are some changes that are being proposed by the legislation. We
cannot bring the program back into balance without making some
adjustments.
During our consultations we were told that we should go easy on
making the changes. Canadians recognize the need for adjustments
but they did not want to see a drastic change. We listened to
the advice and have given some thought to all of the approaches
we could take to balance the system. We believe we will
accommodate that concern through this bill.
1830
At the same time we recognize the proposed changes should not
impact unduly on anyone or any group in society. Thus the impact
of the changes will be shared among future retirees, future
survivors of retirees and recipients of disability benefits.
As noted earlier, anyone currently in receipt of retirement
pension under the CPP will not see that pension change. However,
retirement pensions for future beneficiaries would change since
the calculation would be based on five years of maximum
pensionable earnings instead of the current three years.
The Acting Speaker (Mr. McClelland): I am sorry to
interrupt the hon. member but he will have approximately 10
minutes remaining when this debate commences again tomorrow.
ADJOURNMENT PROCEEDINGS
[English]
A motion to adjourn the House under Standing Order 38 deemed to
have been moved
GOVERNMENT EXPENDITURES
Mr. Gilles Bernier (Tobique—Mactaquac, PC): Mr. Speaker,
in a 1993 Liberal Party press release the prime minister
described the decision to purchase much needed maritime
helicopters as a colossal waste of taxpayers' money.
Since he made that statement his government has slashed health
care transfers to the provinces by 35 percent. Simultaneously he spent
over a billion dollars only to delay the necessary replacement of
Canada's aging Sea King and Labrador helicopters.
Our health care system is viewed by many as the best in the
world. It is one of the most important achievements in our
history and a cornerstone of Canadian society. Preserving and
improving health care are top priorities for Canadians and must
be judged as important to every government.
Over the last three years the current government cut health care
funding to every province and territory. It has hacked more than
one-third out of health transfers to the provinces and
territories.
In the last three budgets of the Minister of Finance these
federal transfers were cut by more than $6 billion. This has put
extra pressure on provincial governments, health care
institutions, health care providers and, most of all, patients
and their families.
As provincial and territorial governments struggle to absorb the
federal spending cuts and community hospital cuts, many Canadians
fear the health care system they has come to count on may not be
there when they need it.
That begs a question. Has the government taken every measure
necessary to secure funding for our health care system? Has the
government spent taxpayers' money wisely and only cut health care
transfers as a last resort? The answer unfortunately is no.
In 1993, in the heat of an election campaign, the prime minister
made a hasty campaign promise to scrap the purchase of 43
maritime helicopters needed to replace the Department of National
Defence aging Sea King and Labrador helicopters.
The decision to cancel this purchase was not made on sound
judgment as part of an overall strategy for Canada's military. It
was not a decision based on what is best for the value of
taxpayers' money. It was made for purely partisan political
reasons. The prime minister made the unwise decision but
Canadians have been paying the price ever since.
Since the Liberal government took office there have been more
than 511 emergency landings for the Sea Kings and 259 emergency
landings for the Labrador.
The original deal on helicopters was not just a purchase but an
opportunity for Canadians to co-develop proprietary technology
for the EH-101. Canadians have lost forever the 10 percent job
royalties guaranteed to them from all international sales of
EH-101 helicopters.
The deal would have created 4,000 person years in new, high paid
technology driven jobs. Instead the government must deal with
the additional cost of lost jobs, closed companies and lost tax
revenue.
Finally, after four years of delay, the government is poised to
announce two new helicopter contracts to replace the Sea Kings
and Labradors. The price of this delay, we now know, is more
than a billion dollars to Canadian taxpayers in cancellation
fees, additional maintenance costs and lost jobs and tax
revenues.
What did we get for $1 billion? Nothing, not a single
helicopter.
1835
Canadians believe and I believe the money should have gone into health
care transfers. This is a time when government must make hard
choices about how to use scarce health funds.
Was the obscene amount of money spent on keeping a poorly
thought out campaign promise worth it? Absolutely not. That is
money that could have benefited our health care system.
Mr. John Richardson (Parliamentary Secretary to Minister of
National Defence, Lib.): Mr. Speaker, the government
understands that Canadians want their tax dollars well spent
whether on health care or defence. The government is committed
to ensuring that Canadians get the most value for their dollars.
This means in part making sure that Canadians forces have the
right equipment for the job.
The Canadian forces are often called upon to perform difficult
and sometimes dangerous work. If they are to do what Canadians
expect them to do, they must have the tools to do the job at a
price we can afford.
Beyond the international commitments Canadians are well aware of
and justifiably proud of, our forces first and foremost carry out
a full slate of missions at home. Among the more important of
them is the national search and rescue service.
Search and rescue is of paramount importance to thousands of
Canadians from those who make their living in the remote regions
of the country, be it at sea, on land or in the air, to the many
Canadians who simply enjoy boating, camping, fishing and the
great outdoors.
Over the last 50 years Canadian forces provided primary search
and rescue helicopter services to Canadians. They have truly
established a tradition of excellence and have saved many lives
over the years. This success can be attributed directly to the
unselfish effort of highly skilled and dedicated search and
rescue personnel.
We can cite a few examples of the last couple of years to
highlight their achievements. They have provided vital
lifesaving, morale boosting and support during the devastating
floods in the Saguenay and the Manitoba Red River Valley in July
1996 and the spring of 1997 respectively. These success stories
are remarkable, particularly when we think of the unique
challenges we face in Canada. Our geography comes immediately to
mind, a huge land mass and one of the longest coastlines in the
world.
The Canadian forces must be able to operate in extremely harsh
conditions including the Arctic. They must be prepared to
respond to emergencies anywhere in the nation.
FISHERIES
Mr. Peter Stoffer (Sackville—Eastern Shore, NDP): Mr.
Speaker, I rise today to bring light to the crisis facing the
east coast fishery.
My question last week to the Minister of Fisheries and Oceans
was for him to call a judicial inquiry into the past and current
practices and policies of the Department of Fisheries and Oceans.
With all four opposition parties plus scientists and bureaucrats
from within the departments, plus the Department of the
Environment, not to mention thousands of fishers in Atlantic
Canada and Quebec calling for the same inquiry, it appears to all
of us that only the minister is opposed to calling an inquiry.
His position reminds me of a line I heard in a movie which
indicates to me that he cannot handle the truth. Only an open
judicial inquiry would allow scientists from within the
department to state openly their concerns without fear of job
retribution.
Only an inquiry will be able to find solutions to the crisis not
only on the east coast but on the west coast as well. Our stocks
of various species of fish are reaching dangerously low levels
and without strong measures may never recover.
The minister of human resources announced the other day that he
has hired an individual to look at the concerns facing the 40,000
fishers on our east coast as the income supplement known as TAGS
runs out one year prematurely in May 1998.
I suspect that he did this to deflect certain criticism bound to
come to the government from the upcoming attorney general's
report. The report coming out this week is sure to be very
critical of the government's handling of not only the TAGS
program but the management, or should I say mismanagement, of the
groundstock species.
A system such as the individual transfer quotas or ITQs have
taken 50 percent of the total quotas away from individual fishers and
moved them into the hands of a handful of corporations. As well,
20 percent of additional quotas are sold from individual fishers to the
corporations. In truth the corporations control 70 percent of the total
allowable catch.
With the modern high tech methods incorporated in today's
fishing industries, tonnes of fish can now be caught
indiscriminately within a matter of hours using no more than a
couple of dozen fishers, where before fish were caught more
selectively using hook and line methods, using the services of
hundreds of fishers and smaller vessels.
1840
The nets used by draggers on the huge trawlers sometimes break
away from the ship, lying on the ocean floor, indiscriminately
killing anything in their path, not to mention the trawler gear
that rips up the ocean floor, destroying precious corral and reef
habitats. Just last week two whales off the east coast were seen
tangled up in nets.
Other examples of concern are the dumping of by-catches which is
still ongoing. As well, the number of gun-toting fishing
officers is ever increasing. It is also true that with the
hundreds of different organizations involved in the fishing
industry there are hundreds of different ideas of what should
happen to cure the ills affecting the industry.
Today I ask all parties involved in the fishery on all three
coasts to put aside their differences and work together to come
up with a viable long term sustainable solution not only to bring
back the stocks but to provide long term employment for as many
Canadians as possible. I believe this process would be greatly
enhanced by an inquiry.
Mr. Wayne Easter (Parliamentary Secretary to Minister of
Fisheries and Oceans, Lib.): Mr. Speaker, most of the points
raised by the member opposite speak to the need of the government
to provide good conservation and management of the fisheries.
That is certainly what this minister of fisheries is doing.
With respect to the TAGS issue, first and foremost, the Atlantic
groundfish strategy is under the purview of the Minister of Human
Resources Development. The prime minister has recently appointed
the minister of HRD as the lead on the post-TAGS issue. The
Minister of Fisheries and Oceans will be working very closely
with Minister of Human Resources Development providing fisheries
advice to him and his officials on options as they are developed.
The government announced TAGS in April 1994 and promised $1.9
billion in income support and adjustment measures under the
program. The government is living up to that commitment.
Unfortunately, because of the larger than expected number of
participants, TAGS will end in May 1998.
The government remains very concerned about the impacts of the
end of TAGS on individuals and communities and last May promised
a post-TAGS review.
Last Friday the Minister of HRD appointed a senior HRDC official
to lead this review of the post-TAGS situation, starting
immediately. Mr. Harrigan will be looking at the situation as it
affects the five eastern provinces.
The review will focus on the impact of the end of TAGS program
on clients and help the government and our other partners develop
forward looking solutions.
It is very important for us to reflect on the human dimensions
of this crisis on individuals and communities. We look forward
to working with all our partners, including industry and the
province, to address the solution of Atlantic fishers.
FOREIGN AFFAIRS
Mr. Preston Manning (Leader of the Opposition, Ref.): Mr.
Speaker, the reason we are here today at what we like to call the
question period late show is that we have been unable to get any
straight answers from the government for a solid week on the
matter of Canadian passports being used by Israeli agents in
Jordan.
Every day we have stood and asked straightforward
information-gathering questions of the prime minister, of the
foreign affairs minister, of whomever the files seemed to be
pawned off on that particular day. One day we even heard from
the Secretary of State for Latin American and Africa, a mistake
only remedied when the government finally realized that neither
Israel nor Jordan are in Latin America or Africa.
Simply put, they have been evasive, sloppy and inaccurate. They
have embarrassed our country at home and on the world stage in
their handling of the matter. After more than a week our
questions remain outstanding and unanswered. They have been
asked in good faith on behalf of concerned Canadians both at home
and abroad and deserve a reply.
We know that the issue is delicate, that Israel and Canada are
strong allies economically, culturally, politically, and of
course allies in the fight against international terrorism.
Canadians believe in the State of Israel and its right to defend
itself against attack.
Our concerns have centred on the fact that Canadian passports
have been used to engage in covert operations. By using Canadian
passports as part of their cover, Israeli agents have made
Canadians unwitting players in a very dangerous game.
The Canadian passport like the maple leaf is a trusted symbol of
our country. Our passport enjoys unparalleled respect the world
over, undoubtedly a reason that the Mossad found it useful.
Using Canadian passports may be good for counter-terrorist
missions, but it unfortunately jeopardizes the reputation of our
passport and of Canadians who travel abroad every year. That
means it jeopardizes the safety of those Canadian travellers as
well.
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Over the past week the government has said that the passports
were forgeries. Then it said they may have been forged or
stolen. Then it said that Canadian officials had seen the
passports, then that they had not seen the passports but other
people had seen them. It goes on and on.
Surely this is such a sensitive issue that it deserves a clear
answer as to what has actually happened. Surely after nearly two
weeks of inquiries the government should know the truth.
Therefore I ask again, and solicit a straight answer from the
government, will the government please explain to Canadians what
exactly happened in Jordan and how it came to be that the Mossad
was using Canadian passports as a cover?
Mr. Ted McWhinney (Parliamentary Secretary to Minister of
Foreign Affairs, Lib.): Mr. Speaker, in reply to the hon.
leader of the opposition, he will be aware, as the prime minister
told the House, that it is absolutely unacceptable to the
Government of Canada that anybody should be authorized by a
foreign government to use Canadian passports to perpetrate an
illegal act.
I want to tell the House that we have taken actions to protect
the integrity of our passport, the safety of Canadians and to
assure all concerned that Canada is not complicit in any way in
this incident.
We have obtained the two forged passports used in Jordan.
The hon. member will be aware that we have recalled our
ambassador to Israel for consultations. This is a very serious
step in international law and diplomacy. It is intended to send
the signal that we will not tolerate the fraudulent use of
Canadian passports. We believe this message has been heard in
Israel.
I can confirm to the hon. member that the Israeli minister of
foreign affairs, David Levy, called the Minister of Foreign
Affairs yesterday. Foreign minister Levy expressed his regret at
what had transpired. He is clearly concerned regarding the
implications for Canada's future relations with Israel.
I can also inform the hon. member that Mr. Levy indicated the
Israeli government has undertaken to investigate the matter and
clear up all questions which have arisen between Canada and
Israel. He undertook to provide the results of the investigation
to Canada.
The hon. member should be aware that Mr. Levy agreed to the
request of the Minister of Foreign Affairs that further
discussions take place to ensure that this does not happen again.
FOREIGN AFFAIRS
Mr. Bob Mills (Red Deer, Ref.): Mr. Speaker, before I
came to the House I travelled extensively. I spent 30 years
travelling around the world. I truly want to emphasize just how
critical it is that the government preserve the integrity of the
Canadian passport.
The Canadian passport is a ticket to freedom. It may be the
most treasured passport in the entire world. Our passport is a
key which opens the door for Canadians wherever they go.
That is exactly why the Canadian passport is so important for a
man named Ron Ready. Ron is a Canadian who has been in Jordan
for the past six months on important personal business. He does
not want to come home until he has completed his task, but now he
says that he may be forced to.
Things changed for the worse for Ron only a few hours after two
individuals carrying what are now being called forged Canadian
passports attacked a Hamas leader.
Ron says he was contacted in his hotel by the police and told
that as a Canadian he should stay indoors because his safety
might be threatened.
We have talked to Ron four or five times, almost every day, to
find out how things have changed. Ron did contact foreign
affairs, both over there and here in Ottawa. He called the prime
minister's office for action. When he received no answers, he
contacted the official opposition.
After communicating with Ron we were shocked to find that so
little had been done to protect Canadians in Jordan and elsewhere
in the Middle East. In fact, we can think of nothing that was
done at all. Ron says that the only help he received was the same
advice he got from the police: Stay inside.
Jordanian acquaintances told him there was talk of killing
westerners. Meanwhile, he said, the embassy would not even pay
for him to call the foreign affairs department in Canada. When
Ron Ready really needed the foreign affairs department, foreign
affairs was inept and unavailable for him.
At the very least, Ron thought the Canadian government should
issue a travel advisory so that other Canadians would not wander
into the situation, but foreign affairs refused to do it.
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When an incident takes place anywhere in the world and Canadians
are at risk I believe that the government should do what it can
to help them. Instead of taking action the government stalled.
Instead of thinking about how life would be for Canadians stuck
in this situation, the government was only hoping that no one
would ask the difficult questions that would embarrass it.
If the media and the official opposition did not push for
answers I doubt the government would have told us about this
situation at all. The government waited for days, hoping no
questions would come. It did not even think for a moment about
the implication and the threats this placed on Canadian passport
holders travelling abroad.
We think the government owes it to Canadians to get an assurance
from Israel that our passports will not be used in covert
operations ever again. A Canadian passport is too important to
be muddied doing the dirty work in undercover operations.
I ask the government what specific actions it will take to
ensure this will not happen again.
Mr. Ted McWhinney (Parliamentary Secretary to Minister of
Foreign Affairs, Lib.): Mr. Speaker, I can assure the House
that the government is very concerned about the safety of
Canadians travelling abroad. We have taken significant action
to protect the integrity of our passports and the safety of
Canadians.
The Minister of Foreign Affairs at the United Nations last week
had extensive consultations with Arab governments and the Arab
language press to assure them that there was no complicity on
the part of Canada in this incident. As a result, the Arab
governments and the Arab people realize that Canada was not
involved in the attack in Jordan and will not hold us
responsible. This diplomatic effort was the most important step
in ensuring the safety of Canadians travelling and living in the
Middle East.
Travel reports on eight Middle Eastern countries: Egypt, Israel,
Jordan, Kuwait, Lebanon, Syria, Saudi Arabia and Yemen were
updated on October 5 to inform the public of the recent incident
in Jordan, to clarify Canada's non-complicity and to remind
Canadians to be prudent and vigilant when travelling in the
region.
As the prime minister told the House, it is unacceptable to the
Government of Canada for anybody authorized by a foreign
government to use Canadian passports to perpetrate an illegal
act. The hon. member will be aware that we have recalled our
ambassador to Israel for consultations. This is a very serious step in
international law and diplomacy designed to send the signal that
we will not tolerate the fraudulent use of Canadian passports. We
do believe this message has been heard in Israel.
The Minister of Foreign Affairs has obtained a commitment from
the Israeli foreign minister to set up a consultative process
with us to ensure that we can have a common understanding to
prevent misuse of Canadian passports in the future.
FOREIGN AFFAIRS
Miss Deborah Grey (Edmonton North, Ref.): Mr. Speaker,
again I would like to raise the same issue we have been talking
about, the seriousness of the passport problem we have had.
It amazes me that the parliamentary secretary, although I
appreciate the effort he is making, has written answers already
to questions which he did not really know were coming. I am
rather amazed by that. He was not sure what the questions were
that were coming but he has full blown written prepared answers
for them.
I have a question for him with which I want to preface some of
my remarks. I trust he will throw away the prepared text and
give me a real answer for a very real question. This is the
whole idea of a question period which is a little fuller and
called the late show. The comedy of errors that we have seen
over the last few days here in this Chamber leads me to believe
that David Letterman is really the guy who is in charge of
foreign affairs over there because of the absurdity of some of
things we have seen come forward.
The official opposition does understand the importance of
supporting our allies in the fight against terrorism. We
understand that, we know it and we support it. But as Canadian
members of Parliament our first duty is to make sure of the
safety of our citizens, which means protecting the good
reputation of our passport everywhere in the world, every day of
the week, every month of the year.
When we first raised this issue in the House just several days
ago, the prime minister assured us that no Canadian agents were
involved in this anti-terrorist mission or the illegal use of
Canadian passports. That is an important thing for us to find
out but of course there have been questions arising from that.
After all if Canada does have a secret agreement with other
countries to help fight terrorism that changes things.
1855
Also, if Canadian agents were involved in this mission somehow
then that puts this Jordan operation in a different light as
well. We need to find those answers.
The very first time we put the question to the prime minister he
said that Canadians had nothing to do with this mission. When
the Leader of the Opposition asked whether or not Canada had been
asked for permission by a foreign country to use our passports he
said: “I have never been informed of any such request by any
government”.
Today we find out that CSIS agents did indeed meet with the
Mossad agents on the very eve of the mission. Surely in a
meeting between Israeli and Canadian spy agencies on the eve of
such a mission this issue might have come up in the conversation.
Yet the prime minister told us in this House that it never came
up.
My question for the parliamentary secretary is very simple. I
trust that he is going to give us a straight answer here, not off
prepared notes because he did not know what the question was. The
question is simple and straightforward. There has been a
flip-flop on the government side. First the prime minister said
he had never been informed of any such request by any government
and then we find out that the CSIS and the Israeli agents are
talking to each other on the very eve of this mission.
Let me ask the parliamentary secretary how in the world can they
expect us to believe that the subject of this major raid against
Hamas did not even come up in their meeting?
Mr. Ted McWhinney (Parliamentary Secretary to Minister of
Foreign Affairs, Lib.): Mr. Speaker, I would advise the hon.
member that I have been briefed on this matter for fully a week.
The answers that I am giving reflect the knowledge of facts such
as they are.
They have some personal interest to me as somebody who has
advised numbers of governments on international terrorism and its
control.
When we first became aware of this matter we were advised by the
Jordanian government of the arrest of two persons carrying
Canadian passports, and Canadian diplomatic consul officials in
Jordan made contact with these people through the offices of the
Jordanian government and offered the usual diplomatic consular
help, the offer of legal assistance and the like. It was refused
categorically at that stage.
I will stick to facts because we cannot get into hypothetical
situations. We were shown the passports by Jordanian government
officials in the early stages of the investigation. Our
examination then indicated that the passports were forgeries.
I want to inform the hon. member that we have now obtained the
two passports used in Jordan. We have submitted them to our own
forensic examination and that has confirmed the initial
evaluation that the passports are forgeries.
We have, from the facts as they are already known, indicated our
concern to the Government of Israel and we have spoken loudly
and clearly to the Government of Israel.
The hon. member will be aware that we have recalled our
ambassador to Israel for consultations. It is not a formal step.
It is a very serious step in international law and diplomacy and
it is intended to send a signal that we do not want Canadian
passports tampered with in the future.
Miss Deborah Grey: Mr. Speaker, point of order.
The Acting Speaker (Mr. McClelland): I am informed that
we do not have points of order in adjournment proceedings.
The motion to adjourn the House is now deemed to have been
adopted. Accordingly, this House stands adjourned until tomorrow
at 10 a.m. pursuant to Standing Order 24(1).
(The House adjourned at 6.59 p.m.)