FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 20, 1997

• 0919

[English]

The Chairman (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call this meeting to order.

Before we begin, I would like to make sure that everybody has everything they need for this clause-by-clause. We have two packages here of amendments on Bill C-2. One starts off with PC-1. Does everybody have this one? The second package starts with Mrs. Ablonczy's amendment. So these are the two packages we're dealing with.

• 0920

The two packages are followed by the agenda, which outlines the procedure we're going to follow for the clause-by-clause, and also has clauses that have amendments, which come from these packages.

I want to ask permission from the committee to operate in this fashion. If there's a stretch, for example clauses 13 to 41, where there are no amendments, is it possible for us to treat all those with one single motion and go through all of them? Is that agreed? Is that fine with everybody?

Some hon. members: Agreed.

The Chairman: I draw your attention to the agenda and also to the clause-by-clause sheets starting with that consideration of clause 1 be postponed, pursuant to Standing Order 75(1).

There are stretches, for example from clause 13 to clause 41, where there are no amendments listed for those clauses. So the permission I asked from the committee was to deal with that all at once. But then where there are amendments of course we'll stop and listen to what you have to say about the amendments.

Mr. Dick Harris (Prince George—Bulkley Valley, Ref.): That's okay.

The Chairman: Since there's that consensus, we will start. Consideration of clause 1, as you know, is postponed, pursuant to Standing Order 75(1).

(Clauses 2 to 7 inclusive agreed to)

The Chairman: On clause 8, we have NDP amendments. We need a mover from the New Democratic Party. Seeing no mover, no amendment will be dealt with.

(Clauses 8 and 9 agreed to)

(On clause 10—Appointment of Directors)

The Chairman: We have amendments on clause 10, the first one I believe from the Reform Party, Reform Party number 1. It is moved by Mrs. Ablonczy. Would you like to explain the impact of this amendment?

Mrs. Diane Ablonczy (Calgary—Nose Hill, Ref.): The amendment would amend clause 10 by providing for a six-year term for those serving on the board, as opposed to a three-year term.

The reason for that is to have the people serving on the investment fund serve more than one election, so it's not quite as much tied to political events and gives them a little bit more of a substantial term of operation and not so tied to elections.

The Chairman: Are there any comments or questions on this amendment? Mr. Valeri.

Mr. Tony Valeri (Parliamentary Secretary to Minister of Finance): I have a couple of points.

Essentially the appointment for a three-year term is standard for crown corporations. What you're asking for is something that's outside of what is normally the case. You make reference to the politics of it, but in fact the members of the board will be working for and in the best interests of the plan members. In essence, the transparency and the clarity that's available in the performance of the fund will really be the test.

Perhaps I can ask one of the witnesses to comment on the three-year versus the six-year, perhaps a technicality of why in fact it is three with respect to the crown corporations.

The Chairman: Who would like to comment on that?

• 0925

Mr. Wayne Foster (Chief, Government Financing Section, Department of Finance): I could comment.

We did consult on the term for the board with the pension community and the provinces, and there was a bit of a discussion on whether it should be something like five years or something like two years, which is more typical for a pension plan such as the Ontario teachers' board. There is a bit of a learning curve to be a trustee for a pension plan, so the compromise that everyone thought was reasonable was to go for a term of three years but to allow for reappointment.

Mrs. Diane Ablonczy: Just to add my response to that, first of all this is not a usual situation. I don't think tying it to the crown corporations is necessarily a persuasive point. The member says that the board would be serving the interests of investors, but in fact it's very explicit in the section that it's appointed by the minister and holds office at his pleasure. So I really don't think that you can persuasively argue that this board is just serving investors. Clearly, they're tied right to the will of the minister.

Mr. Dick Harris: I have a comment.

I of course support Mrs. Ablonczy's amendment. Actually, Mr. Foster's remarks probably support Mrs. Ablonczy's amendment too, because he said that there was in fact, or there could be, a learning curve. If the learning curve is, say, about two years...

I don't know why we're talking about learning curves with something as important as the Canada Pension Plan. I would think that we should have it figured out before the minister introduced it in the form of a bill so that there wouldn't be a learning curve. But in the event there is one, then, with a three-year term, after the learning curve, whatever length that would be, it doesn't leave much time before the appointments come up. Thus, I think it would be more appropriate to have a longer term as opposed to a shorter one, because once you're over the learning curve you have some time to prove that you've learned what you're supposed to do.

Also, I find hilarious Mr. Valeri's comments that this board is going to be a board that's free from political influence and working entirely on its own for the good of the plan. In fact, the minister told me, hey, it has hardly anything to do with me, the provinces are going to be appointing people to make their recommendations and I'm at arm's length, all I'm going to do is look them over at the end. But when I see this clause here, it specifically points out that the minister is the key player in the appointment of the board, and this is something very different from what we were told about how the board members would be made up. So it is political, and there's no denying that.

• 0930

(Amendment negatived) [See Minutes of Proceedings]

The Chairman: Let's move to R-2, a Reform amendment.

Mrs. Diane Ablonczy: I move to amend clause 10 of Bill C-2 by replacing line 9 on page 5 with the following:

(2) The Minister shall establish a committee

It changes the word “may” to the word “shall”.

The purpose of this, of course, is to ensure that there is an advisory committee in place, which has been, as you know, deleted from the whole scheme of things. Since on the committee itself that is going to be managing the fund the directors are appointed by the minister, it is our view that somebody needs to be protecting and representing the interests and views of the stakeholders—the people who hopefully benefit from the fund at the end of the day.

The best way to accomplish this that we can see is by keeping the advisory committee in place that would be drawn from a number of the sectors and be the voice of the stakeholders. Since the directors are experts and money managers, I would think there needs to be some of the views of the stakeholders and the beneficiaries of the fund in this whole scheme of things. That is the purpose of this amendment.

The Chairman: Any further questions or comments? Ms. Torsney.

Ms. Paddy Torsney (Burlington, Lib.): I would like to point out that in the next clause...first of all, that the committee's been established in getting the directors on in the first place. I am not prepared to pay for a committee to continue indefinitely after their initial job is done.

In the next subclause down, subclause 10(3), it talks about additional appointments and the consultation with the provinces. You'll see quite clearly that it has a “shall” there. So I'm not prepared for a committee to stay up and running indefinitely. It's a waste of money. There is already a provision for consultation in the next section.

The Chairman: Mr. Harris.

Mr. Dick Harris: To the representative from the department, regarding the process of selecting the board members or the directors is it not a fact that regardless of who is put forward by the different provinces it is the Minister of Finance who makes the final decision on who should sit on the board?

Mr. Wayne Foster: The Minister of Finance will select names from the list put forward by the nominating committee in consultation with his provincial colleagues. It's really the Governor in Council who makes the final appointment, on the recommendation of the minister after consulting with his colleagues.

Mr. Dick Harris: But the minister would have the final word on what names go to the cabinet for approval. Is that correct?

Mr. Wayne Foster: Yes, that's correct.

Mr. Dick Harris: So he has the power of veto over any names put forward. In essence, he himself can only approve the final list that goes to the cabinet for approval. Is that right?

Mr. Wayne Foster: At the end of the day, it'll be his decision as to the 12, after consulting with the provinces.

Mr. Dick Harris: Right.

The Chairman: Mr. Valeri.

• 0935

Mr. Tony Valeri: I want to remind Mr. Harris and members of the committee that in fact there's joint stewardship of this plan. The federal and provincial governments are involved in this plan. And it would in fact be very unusual if after consultation with provincial counterparts the minister came up with names that are not on the list of names the provinces have in fact approved for submission as members of the board.

I understand where Mr. Harris is going with this, but I just want to remind you that it's joint stewardship. The provinces have an opportunity, in consultation with both the finance minister and the other members of the provinces, to come up with these names. I would find it quite unusual if in fact the minister did come up with names he hadn't consulted with the provinces about.

Mr. Dick Harris: That may be true, but he still would have the power to reject names until the provinces came up with one that was suitable to him.

Mr. Tony Valeri: Names that are suitable to the province and to the minister, ultimately.

The Chairman: Mr. Jones.

Mr. Jim Jones (Markham, PC): I'd like to ask the witnesses why this was put in here if the minister has the final say. Why did you say the minister “may establish a committee”?

Mr. Douglas Wyatt (General Counsel, General Legal Services Division, Department of Finance): If it's in regard to the words “may” and “shall”, one of the concerns we had with the word “shall” is that it would be a condition precedent to any nominations and it would give each and every province essentially the legal power to block the whole process until it had its way. So we put the word “may” in there in case one of the provinces should be inclined to do that.

In terms of why it's in there, in our discussions with the provinces it did give them some comfort to see it in the legislation, and since they did see the legislation in draft form and didn't comment on this we assumed that it was acceptable to them.

[Translation]

The Chairman: Mr. Crête.

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): I understand the Minister has already established a committee for the first appointments. If the committee becomes a permanent feature, the Minister will have to keep on appointing people to it. It will become totally inefficient because it will take more time to appoint members of the advisory committee than to appoint members to the board. The effort has already been made at the outset. As for the rest, I think we have been bending over backwards to make sure provinces have their say.

[English]

The Chairman: Mr. Harris.

Mr. Dick Harris: Mr. Chairman, I just want to put the Reform Party on record as saying that it is our belief that these clauses as part of the bill are simply a smokescreen, in fact, and that this board, in our opinion, will be a politically appointed board. We shall await the results, and I'm sure the proof of our suspicions will be borne out. I want to put that on the record.

Mr. Joe Fontana (London North Centre): But if it's Reformers, you won't object, right?

(Amendment negatived)

The Chairman: There's an amendment from Mr. Jones, I believe, that is exactly the same as the one we already dealt with, your first one. PC-1 and R-2 are the same, so we've dealt with that. Okay, Mr. Jones?

Mr. Jim Jones: It's not okay, but you've dealt with it.

Some hon. members: Oh, oh.

The Chairman: Now we'll move on to PC-2. Mr. Jones.

Mr. Jim Jones: What we want to ensure here is that all members of the board are accepted by all the provinces and that if any member appointed by the minister is objected to by one-third of the provinces or one-third of the population, that name is withdrawn.

Mr. Dick Harris: Mr. Chairman, in support of the amendment, I think this serves to prevent exactly what we spoke about just minutes ago. It gives some comfort, I suppose, to people looking at this bill with regard to the fact that there would be some protection against blatant political appointments to this board. I think it adds a lot of accountability to the make-up of the board. We support it.

The Chairman: Any further comments?

Mr. Jim Jones: Vote, please.

• 0940

(Amendment negatived: nays 8; yeas 4)

The Chairman: Now we'll go to NDP-2. Mr. Nystrom.

Mr. Lorne Nystrom (Qu'Appelle, NDP): I'd like to move that Bill C-2 in clause 10 be amended by replacing line 30 on page 5 with the following:

the board of directors balanced representation between the labour and the business community and a sufficient number of

In the original bill there is no provision for the nomination of the board from both labour and business. The briefs from the Canadian Labour Congress and others said there should be some balance, and that balance is not in the present legislation. There are many precedents for this, of course, in the country where there is labour representation on various government boards and agencies.

We're looking here at a pension fund that is taking literally billions of dollars from the pay cheques of workers across the country, and billions of dollars from employers across the country—from business, labour, the business community and workers. It seems to me there should be a balance in the appointment of the board of directors responsible for the fund.

Out of fairness and in the name of democracy, that balance should be there. It's there in many other cases in government agencies at the federal, provincial and municipal levels. It seems to me it's very difficult not to have that balance in terms of this new investment fund we're setting up that will be well over $1 billion within a number of years. We want to have good support for the Canada Pension Plan and have harmony, peace and co-operation out there. I think it's just a very wise thing to do.

I'm sure my Liberal friends across the way are not against democracy, fairness and balance. Therefore I would appeal to them to take a look at this amendment. I see Mr. Iftody is looking very sympathetic toward it now. I hope this is an indication of support from others across the way as well.

The Chairman: Can we stick to the substantive issues of your amendment?

Mr. Lorne Nystrom: I think he's a pretty substantive guy.

The Chairman: Are there any further comments? Mr. Harris.

Mr. Dick Harris: Mr. Chairman, we could support that motion because we're trying to build accountability into this bill. We're disappointed that the Liberal members have voted down every amendment that deals with accountability, when the minister and the government promised transparency and accountability in the make-up of this bill. We're quite disappointed that the accountability amendments have been voted down. Here is yet another one we can certainly support. We think if this government is true to its word it should have no problem supporting amendments that would guarantee accountability. So we support it.

The Chairman: Mr. Iftody.

Mr. David Iftody (Provencher, Lib.): On the Reform Party's arguments, it is usually the party arguing for regional representation and powers of the provinces. Certainly under this formula that's precisely what we're trying to do. In the case of western Canada, for example, if Ralph Klein and Glen Clark want to appoint people who are sympathetic to labour, let them do so. If Mr. Klein wants to put forward another person, let him do so.

There are also considerations in terms of aboriginal people and women. How far do we want to go in terms of expanding the group here? So I think we should stick with the proposal to allow the provinces to put forward their names.

The Chairman: Thank you, Mr. Iftody, for your comments. Mr. Harris.

• 0945

Mr. Dick Harris: The fundamental point here is that this bill clearly says that the minister shall have the final determination of names that are presented to cabinet for approval. This scares us, because, given the record of this government and the appointments that they've made all across the country, in the hundreds, of people with absolutely solid Liberal credentials, we have no doubt that this board is going to be filled with friends of the Liberal Party.

If the objective of this new board is to manage the funds in the best interest of Canadians, we want to ensure that there will be no political interference in their activities. We can do that only by adding amendments to this bill that ensure that this will not happen, that it will in fact be free of politics, fully accountable to the people that are putting the money in, and that's the Canadian people.

Mr. Paul Szabo (Mississauga South, Lib.): I would just like to point out that the criteria that it's looking for in this clause, I guess in paragraph four, are proven financial ability and relevant work experience. We're talking about the management of a fund, not the entire Canada Pension Plan, which I think would make some of the opposition comments more relevant. These do not preclude the appointment of anyone from any group or any other background, but the principle criteria are proven financial ability and relevant work experience. The objective of the fund is to perform as well as it possibly can, and I think that to somehow dilute or qualify the essentials for a board member would not be in the best interests of any Canadians.

Mr. Tony Valeri: Mr. Harris will continue to talk about how this bill is going to work and how the minister is going to corrupt everything, but I just can't agree with that. The fact of the matter is that there is consultation with the provinces; that's how the list comes forward. It's joint stewardship. There's a review every three years. There's been a year and a half of consultations with the provinces and Canadians across the country.

The changes to this plan didn't come out of a hat; they came because of the belief in democracy and transparency and accountability.

You can go on and continue and put forward the Reform philosophy, because that's essentially what it is. You're not really talking about the merits of the bill; you're just talking about your own perspective.

Rather than deal with that, I'd like to speak specifically to Mr. Nystrom's amendment and just say to him that in fact nothing in the bill would preclude from being a member of the board, for instance, a member or an individual who is managing a fund for one of the unions, who I guess, in your mind, could be a labour representative but also have the necessary experience in the management of the fund, which would be a really nice mix. Certainly someone like that would be very appropriate, and nothing in the bill would preclude that from happening.

As Mr. Iftody mentioned earlier, in B.C. and Saskatchewan the members of the nominating committee can certainly put forward any name that they feel would be appropriate, that in fact would be representative of the labour community—since I think that's the thrust of your amendment in putting forward that type of balance. That type of balance is built into the bill as it presently reads.

Mr. Lorne Nystrom: I will just take you up on the point of balance. I'm sure that balance can be there. It's wide open right now; it could be anybody on the board. But then we're depending upon the good judgment of the minister in terms of those final people on the board of directors. That's one concern that I have.

I'd like to signal that in the legislation there should be balance. Now, balance doesn't necessarily mean parity; balance just means there is to be a balance between representatives of both stakeholders. There are two stakeholders here: the working people that contribute and the business community that contributes.

I used as a precedent, Mr. Valeri, the Caisse de dépôt et placement du Québec. I understand that in their legislation there is a balance between labour and the business community, and that seems to have worked very well over the years. So that is something that is very important.

• 0950

Also, a comment Mr. Szabo made about proven financial ability and how we didn't want to dilute the board and so on is, with respect, sir, a little condescending. There are a lot of labour people in this country. I spent the last four years in the private sector and did some work in this particular area and know as a fact many pension funds are administered in this country, and a lot of those are administered by people who have on their boards appointees from the labour movement.

That doesn't dilute, that does not take away from, the credibility of the board, Mr. Szabo. In fact, they make very valuable contributions. Many of these boards do have representatives from the trade union movement.

I'm surprised. The Liberal Party is supposed to be progressive sometimes. It seems to me they would want to make sure there is a signal in the legislation that there be representation from all the stakeholders.

Somebody asked what about women and aboriginal people. There should be all kinds of balances in there. The reason I'm singling out labour and business is that they are the two stakeholders. Aboriginal working people are a stakeholder. Women are stakeholders as workers or business people who contribute to this.

Mr. David Iftody: Why not 50% women, then?

Mr. Lorne Nystrom: I'm putting in here that the stakeholders should have balance. The stakeholders are the working people and the business community. They are the two stakeholders in here. I think we should signal that the way it is signalled in the Caisse de dépôt et placement du Québec. As I said before, a balance doesn't mean parity.

Those are the arguments. I think they are reasonable arguments. I think it's a wise thing to do. It broadens the umbrella of support. It broadens the umbrella of fairness.

[Translation]

Mr. Paul Crête: It is not easy to ensure balance in the make-up of the board. However, the language chosen by Mr. Nystrom is rather moderate. I want to attest the fact that this amendment would bring about a greater commitment of the labour community and would prevent us from finding ourselves in a situation down the road where people on the labour side of things—so to speak—would come and say that this plan should be managed differently etc.

The amendment would ensure that the discussion on this issue can take place within the board of directors, and I should mention that this was done when the Fonds de solidarité des travailleurs was created in Quebec. By sitting on these boards, labour representatives found out that everything is not black and white, that there are aspects in between that need to be considered, issues like performance ratios and things of that order. In this sense, I believe this amendment should be considered.

The only limit we should consider is how the balance among appointees will be achieved by the provinces. The last time each of the provinces proposed a name for appointment to the committee we found that somehow no woman was included. This lack of representativity resulted from the fact that each province could put forward only one name.

This amendment might allow to avoid such pitfalls, or at least would allow to take into account this type of thing and would introduce a unique feature into economic life. If no opposition can express itself within the board, it might well seek expression outside of it.

[English]

The Chairman: Mr. Harris.

Mr. Dick Harris: Mr. Chairman, let's remind ourselves that we're talking about what I think is the biggest money fund in the history of this country. We're talking about basically two stakeholders which are paying into it on a pretty well equal basis. I see no reason to object to the fact of having a representative from each of those two stakeholder groups.

Let's not forget the history of the Canada Pension Plan over the last thirty years. It now sits in a $500 billion debt hole because there was not enough accountability for it because it was directly controlled, for the most part, by the governing Liberal Party over the last three decades. It's in a disastrous situation right now.

In order to ensure that we would have accountability and openness in this new super-fund, I just can't imagine anyone objecting to having the very people who are paying into it having representation on that board. It certainly doesn't take rocket scientists to figure out that it would be a good concept.

• 0955

The Chairman: Shall the—

Mr. Lorne Nystrom: On a point of order, Mr. Chairman, I've been to many committees over the years, and I want some guidance from you as to how you operate in this particular committee. There are some times when a government will want to pause and reflect on certain amendments and consult. I wonder if this is the way Mr. Valeri would like to operate. Would this be an amendment where he might want to make a couple of phone calls and maybe we can defer the vote on this for a couple of hours?

Sometimes committees operate in that way, Mr. Chair. I think if the committee is going to be meaningful, if there are some amendments that are reasonable it can make the committee more credible, and make Parliament more credible, in terms of being a real democracy. I've been on committees over the years where often the parliamentary secretary has said let's defer that for a couple of hours and we'll take that vote later on.

Mr. Tony Valeri: I appreciate the suggestion. When the opportunity does come up, I'd certainly take that under real consideration. Thank you.

Mr. Lorne Nystrom: Might this be one of those cases?

Mr. Tony Valeri: I think we had a call for the question.

The Chairman: Shall the amendment carry?

Mr. Lorne Nystrom: Can we have a recorded vote?

(Amendment negatived: nays 7; yeas 5)

(Clause 10 agreed to: yeas 7; nays 5)

(Clause 11 agreed to)

(On clause 12—Chairperson)

The Chairman: There are two amendments on clause 12. We're going to R-3.

Mrs. Diane Ablonczy: Mr. Chairman, I move this amendment. The amendment, instead of the chairperson of the board of directors of the fund being chosen by the minister, would have the chairperson being chosen by the majority of the directors.

We feel, again, that this would give more arm's length to the operation of the board. This is something that the government professes is going to be there and that they want. It is very notable that in the last few minutes they have unanimously and quickly voted down every single provision that has been put forward by the combined opposition parties to ensure arm's length and transparency in the operations of the board.

Here is another chance for there to be a little bit more arm's length in the operation of the board. Since the minister has already chosen the members of the board of directors, surely there would be no objection to their combined wisdom deciding who would be their chair.

The Chairman: Thank you, Mrs. Ablonczy.

Are there any comments on this particular amendment? Mr. Nystrom.

Mr. Lorne Nystrom: I certainly want to support this amendment. I think once again it is a very reasonable amendment. It is moving in a democratic direction. There is going to be a board of directors appointed, and all this amendment calls for is the recommendation of a majority on the board to be respected. I think it's a move towards democratizing our society.

• 1000

I have a concern, Mr. Chair, that when we elect majority governments in this country—and this is at the provincial level as well, it's the same thing—those governments have too much power by enforcing their appointee at all times. This is just another example of that.

We have a case today where we have a majority government elected by 38% of the Canadian people. What you're facing across the table is a combination of four opposition parties that go from the right to the left of the spectrum—the Bloc Québécois being unique in that whole thing—and yet we have come to an agreement on a number of these amendments. We think they are quite reasonable, and I think that reflects a good deal of public opinion out there.

You're looking at here, I suppose, the people elected by 62% of the population of the country. I think we're making some reasonable amendments that we're all supporting together. They're democratic, they're reasonable, and they're responsible.

So I wish the government would consider accepting a few of these amendments. It would certainly enhance their credibility.

The Chairman: Mr. Iftody.

Mr. David Iftody: If you look at clause 12, I think the language here is very broadly based. It's consultations with the board of directors and it's consultations with the respective ministers. It obliges the Minister of Finance to consult meaningfully also with the ministers responsible in not only one region but in all regions of the country, and to seek that consensus on some of these changes.

I think this is very broad-based indeed. It gives anyone on the board of directors, and any provincial minister responsible for administering the plan, an opportunity to challenge the Minister of Finance on these particular changes, to make those cases, and to lobby even in between ministers and in between board of directors.

So I can't see how moving the yardsticks even further will provide anyone within that framework of people identified in clause 12 with yet more opportunities for these kinds of discussions. There is ample room there to accomplish the objectives of fair interplay and lobbying for particular points of view by 12 ministers and ostensibly 12 boards of directors.

The Chairman: Ms. Torsney.

Ms. Paddy Torsney: I think it might be better if all committee members in fact read the clause that currently exists instead of being deluded by the amendment. The reality is that the clause says, right now: “The Governor in Council shall, on the recommendation of the Minister”. That's a process. That's how the Governor in Council gets the information that's going to be put forward. Then it goes on to talk about the consultation that is necessary.

So don't pretend that it's excluding the provinces when you put forward this amendment. In fact, it is very much focusing on the provinces.

I would suggest that instead of the language that's used in the amendment, which suggests a very divisive process where... What is it, 49% of the directors get excluded and their vote doesn't get to be registered? The amendment in fact says “the majority”. Is that 50% plus 1? How is that going to work?

The reality is that the clause as it's written in the bill suggests far more consensus-building, and is very clear that the provinces have to be consulted and that they have to have the ministers. It is very much a consensus-building process. You'll have a better appointment.

I wish the rhetoric on the other side would be toned down a little bit about whether or not it's accountability. It's a choice about how to ensure better accountability. We believe this will ensure better accountability and more fairness and consultation with the provinces than what you've suggested.

The Chairman: Mr. Harris.

Mr. Dick Harris: Well, Mr. Chairman, what Ms. Torsney has said is that the minister who has the ultimate decision-making power on who shall be on the board will meet with his hand-picked board, advise them of his choice for chairman, and it will be a done deal. That's what Ms. Torsney just said, in case anyone didn't catch it.

Thank you, Mr. Chairman.

• 1005

(Amendment negatived) [See Minutes of Proceedings]

The Chairman: We'll now move to government amendment number 1. Ms. Torsney.

Ms. Paddy Torsney: It's a technical amendment and I think it speaks pretty clearly for itself. Everyone has a copy of it. It's just a technical change.

The Chairman: Does anybody want an explanation for the amendment?

Mrs. Diane Ablonczy: Yes. I would like to know what is going on.

The Chairman: Okay. We'll hear from the officials.

Mr. Douglas Wyatt: It changes the word “appoint” to “designate”. It just brings the wording into line with a change in wording adopted in all statutes about a year or two ago. It's not a substantive change.

The deletion of subclause (2) doesn't change that the chairman can be redesignated after a term. It's being removed because it suggests that without that you couldn't reappoint or redesignate, and it's felt now that is no longer needed.

[Translation]

The Chairman: Mr. Crête.

Mr. Paul Crête: The French version of the amendment calls for the deletion of lines 7 and 8. There is a technical problem or else I do not understand. In the French text, there is nothing on lines 7 and 8; there is nothing to delete.

In my view, paragraph (b) of the amendment in the French text is not relevant, otherwise it would talk about clause 12(2), which says:

(2) The Chairperson is eligible for a reappointment for one or more additional terms of office.

Does this sentence remain? Do you understand my question? The French version of the amendment proposes to amend the bill by deleting lines 7 and 8 on page 7; there is nothing in the French text on lines 7 and 8.

[English]

Mr. Douglas Wyatt: Mr. Chairman, my copy of the French version of the motion reads that in line 5 the word “nomme” will be replaced by “désigne”, and that the lines 7 and 8 on page 7 will be removed. The lines for the French version are on the right-hand side. Lines 7 and 8 are indeed there.

The Chairman: Okay, the issue has been clarified. Thank you.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 12 as amended agreed to) [See Minutes of Proceedings]

(Clauses 13 through 41 inclusive agreed to)

(On clause 42—Appointment of auditor)

The Chairman: We have an amendment from the New Democratic Party by Mr. Nystrom.

Mr. Lorne Nystrom: I move that Bill C-2 in clause 42 be amended by replacing lines 39 to 45 on page 21 and lines 1 to 6 on page 22 with the following:

The Auditor General of Canada is the auditor of the Board.

I think that is pretty is pretty self-explanatory, Mr. Chairman. Auditing the CPP investments is a major public-interest issue and it should be entrusted to the Auditor General of Canada. The Auditor General has a mandate to protect the public interest and has the expertise to do the job. That's about as straightforward as it should be.

• 1010

What we have here is a recommendation that we take the public interest into account and that the Auditor General is someone who's entrusted to audit the books of the Government of Canada, to have this as part of his or her mandate. It seems to me that with such a large fund, which will be the largest investment fund in Canada within a number of years, the Auditor General is the logical person to do this and would be trusted as—“non-partisan” is not the right word—beyond reproach as the proper way to audit the books.

Again, I think it's a reasonable amendment, Mr. Valeri.

I don't know why the government wouldn't accept this. It's the same auditor who's auditing your books today and audited the books of the previous government and will audit those of future governments. It seems to me it's a reasonable thing to do when we're establishing such a large fund as parliamentarians.

Mr. Tony Valeri: There are a couple of reasons.

One of the points that needs to be made is that in order to preserve the arm's-length nature of the investment board, the board is permitted to appoint its own auditor. That is number one. It's normal business practice and the integrity is in fact ensured by the well recognized standards of the auditing profession.

We also have to remember that the Auditor General will continue to have the responsibility for auditing the annual financial statements of the Canada Pension Plan and the statements will include consolidating the accounts of the CPP accounts and the investment fund and the investment board. So in fact there is an oversight here by the oversight role that the Auditor General continues to have.

The point that needs to be made is that, in order to ensure the arm's-length nature of the investment board, they should appoint, and this legislation allows them to appoint, their own auditor in order to maintain that relationship.

Mrs. Diane Ablonczy: I think what's going to be of concern to Canadians, Mr. Valeri, is that here is a board that is entirely chosen by the minister of the day. It's a bunch of politically appointed people. Then, to compound that, they are going to decide who is their watchdog.

I think we all agree that we want this board to be seen and to be satisfying Canadians that it is as much at arm's length as possible. Having the Auditor General of the country— who I think people do see as being independent and at arm's length—explicitly designated to be the watchdog of this group of political appointees would go a long way toward reassuring Canadians that this is not just another nest of political patronage and appointees. Surely that's what we're trying to get at and, as you yourself said, what the government is hoping to establish.

I would just point out that, by continuing to block and turn down these reasonable measures to make a reasonable person believe and trust that there is some arm's-length transparency to how this whole thing is arranged, the government is simply making it impossible for the opposition and the people of this country to believe their good faith in these statements that they want there to be arm's-length transparency in the way in which this enormous fund will be handled for our benefit.

Mr. Lorne Nystrom: I want to pick up on the point of it being at arm's length.

I certainly agree 100% with you. The Auditor General is at arm's length, because he does not report to government. He's not appointed by government. The Auditor General reports to Parliament. There's a very important difference there, in that the Auditor General is at arm's length from government. The Auditor General is appointed by Parliament. Parliament is the House of Commons and the Senate representing all members of Parliament and all senators. So we have some agency here that is at arm's length.

This is a huge fund. If the government is going to appoint someone or a company to audit this particular fund and chooses a private auditor, will that private auditor be at arm's length from some of the private businesses that contribute to the fund? Again, it might be hard to find auditors to audit a fund of this size without at least the perception of a conflict of interest, or at least a perception that it is not at arm's length from some particular private sector stakeholder in this.

So once again I make the very reasonable appeal that the Auditor General is at arm's length from everyone, because he is appointed by the House of Commons, by Parliament. How much more at arm's length can you get?

• 1015

I make a final appeal to the government. Once again, don't you believe in parliamentary democracy? We have many amendments here this morning that are supported by four very diverse opposition parties representing 62% of the Canadian people. What do we have here? Do we have an autocracy of a minority that doesn't even want to accept some of these very reasonable amendments? Once again, this is one of them.

The Chairman: Thank you, Mr. Nystrom.

Mr. Jones next, and then we'll go to Mr. Harris.

Mr. Jim Jones: I just want it clarified by the committee or the witnesses that the Auditor General has access to the same information that the appointed auditor would have access to in this clause.

Mr. Tony Valeri: Yes.

Mr. Jim Jones: You said yes. I'm of the understanding that he doesn't have access to the same books and records of the fund that the external auditor does. He only has access to the fund. He doesn't have access to the management.

The Chairman: Who wants to answer that question?

Mr. Wayne Foster: In conducting his audit of the overall plan, he has access to the financial statements of the board, all the other statements that the board will be making public and any other such information he needs to conduct his overall audit of the CPP.

Mr. Jim Jones: But the question I asked was if he has access to the same information as the external auditor, the public auditor.

Mr. Wayne Foster: I don't know the answer to that. We did consult with the Auditor General's office on the auditing provisions of the CPP Investment Board Act, and they're very satisfied with them.

In conducting their audit of the overall CPP plan, as is normally is done in the case of public account audits where they rely on the audited statements prepared by the outside auditor, in the case of certain crown corporations that have outside auditors, they will rely on those statements, the point being that we did consult with the Auditor General's office and they are very comfortable with the provisions that we ended up putting into the bill.

The Chairman: Thank you, Mr. Foster.

Mr. Harris.

Mr. Dick Harris: Mr. Chairman, I think this is an important point. If the Auditor General's office is in fact going to be the overseer of this in another sense, then certainly someone with the capacity of his office would have complete access to whatever information they needed, not just the external auditor's report.

Perhaps the parliamentary secretary representing the Minister of Finance has the answer to this question. Will the Auditor General in fact have complete freedom to investigate whatever part of the plan his office wants to and not simply have to rely on the external auditor's report?

Mr. Chairman, let's just be clear about this. We are talking about public money. We're not talking about what was alluded to when it was said that it's done in the private sector as a standard practice. We are not talking about the private sector; we are talking about public money here. And the ultimate scrutiny of public money should come from the Auditor General of Canada, and unless the Auditor General of Canada has complete access to whatever information he deems necessary then it is not a correct statement to say “Don't worry, the Auditor General can oversee all of this.”

I want to ask the parliamentary secretary if this is a fact.

Mr. Tony Valeri: I think the point that needs to be made is that we all have a lot of faith in the Auditor General and in the fact that, as Mr. Nystrom said, the Auditor General is independent and does report to Parliament. When he brings forward his reports they're taken quite seriously and government responds.

I think the point that needs to be made is that the Auditor General was consulted on the draft legislation and is completely comfortable with the approach. In fact, if the Auditor General was not comfortable with the approach then you would have seen the legislation drafted otherwise. So given the fact that you're so supportive of the opinion of the Auditor General, I think you should also be supportive of the fact that he stated quite clearly that he's comfortable with the legislation as it's drafted.

• 1020

Mr. Dick Harris: Is the Auditor General's support public knowledge? Do we have access to his statement to verify what's just been said?

Certainly the fund will not be subject to the normal access to information provisions, which we made clear a few weeks ago in the House. The appointment of an external auditor by the board just opens the door to one more political appointment at the cost of whatever.

I'm sure everyone here is comfortable with the way the Auditor General has the complete freedom to criticize all departments of the government and their spending. I'm sure in the interest of accountability we would all be comfortable with the Auditor General having the complete freedom to criticize the operation of the Canada Pension Plan fund as well. After all, he is the watchdog of the taxpayers' money in this country. Who could argue with that proposition?

The Chairman: Mr. Jones.

Mr. Jim Jones: It is our understanding that the Auditor General will have access only to the accounts and not to the board and its investments. In our conversations with the Auditor General he said he would prefer to also be the auditor of the pension fund investments, the board and the fund itself. So there are some discrepancies here. We don't feel the Auditor General has total access to all the information he needs to audit the fund. Could we set this aside and get clarification on it?

Mr. David Iftody: Perhaps the Reform Party wishes to write the Auditor General and ask him if he is not uncomfortable.

We've heard from our officials in the Department of Finance who have consulted with him on the drafting of these particular provisions with respect to his active role in these matters, and we have referred to his integrity. If he has said he is comfortable with this, that he has looked at the legislation and feels that under the duties of his responsibilities he has free access to all the information, we should probably accept that. If you're uncomfortable with that I suggest you could do something.

Second, under these provisions the Auditor General or the board can request a special audit. If he is particularly uncomfortable with any provisions of it or the overall process there can be a special audit ordered.

In terms of your concerns about the day-to-day investments, he has access to approve or to make comment on the overall investment plan, if he feels it's appropriate. If there are elements of that plan that he is uncomfortable with in terms of percentages or the area of investment the body is proceeding with, he has the authority to criticize and comment on that.

So first of all there are his comments saying he's comfortable. If you dispute that I would suggest you call him.

Second, there are a number of provisions in here that provide the Auditor General with great windows of access to this process to allow him to act in the best interests of the Canadian people and exercise those fiduciary duties or responsibilities to protect that fund. I can't see why moving the goal posts 20 feet in either direction will make any proper sense to the Auditor General so he can conduct his duties more properly than he can right now.

The Chairman: Mr. Szabo has been waiting.

Mr. Paul Szabo: I would like to go back and deal with some fundamentals here. There seems to be a presumption here that the Auditor General and the Auditor General's office are the most qualified to do audits, and this is not the case. As a chartered accountant, I can tell you that I'm familiar with the process large corporations go through to engage an audit firm, and it is not with respect to who is my friend and who can give me some sort of consideration.

The Canadian Institute of Chartered Accountants and its provincial affiliates are bound by very stringent rules of professional conduct and codes of conduct. Members will well know that CA firms have historically been subject to legal proceedings and suits, etc., for failing in certain aspects. It can happen. They are exposed.

• 1025

Part of their responsibility is to not accept engagements where there is any real or perceived conflict of interest. They cannot do that. They also must be independent in fact and in appearance, otherwise they cannot accept.

One of the most important things members should understand is that it's in the best interest of Canadians, all Canadians, that the most qualified audit firm should be engaged to audit the investment fund. That's not the Canada Pension Plan, but the investment fund. It's very specific and specialized, and all firms do not have the same expertise.

Of firms that will come before the board for consideration, many will have to demonstrate their experience and expertise. The board will have to access those on a relative basis. I can assure you that the Auditor General could not possibly compete with some of the firms out there who over the years have developed a specific expertise.

With regard to the role of the auditor, this role is to do a couple of things. One is to ensure that there is an internal control over the assets of the funds. This must be safeguarded. Number two is to ensure that there is compliance with all of the internal and external regulatory requirements as set out either by this act or other acts of Canada. All of those things can be done very well by the prescribed auditor; it's not restricted to the Auditor General.

With regard to the Auditor General's process, however, the fact that this fund will be set up as a “stand alone” for operating purpose, it must be consolidated in the report for the Canada Pension Plan itself, which is under the Auditor General's jurisdiction.

Whether or not the Auditor General has access to a stock trade invoice is one question. The issue for the Auditor General is can they and should they rely on whether the independent auditor did their job properly? In fact, throughout all of our business and legal systems, the reliance between professional bodies and parties is an integral part of it. Everybody can't do all things.

So there is an independent professional auditor to do the work. The Auditor General has always relied on that independence. Otherwise, you are impugning the integrity, professionalism, and capability of a professional audit firm to be able to do the job. They accept it. In fact, most of the people who work for the Auditor General are in fact seconded to the Auditor General by these audit firms on certain terms. These are secondments or appointments.

I understand what the members are saying, Mr. Chairman, with regard to the need to deal with the best interests. I think their motives are honourable in terms of wanting to have reasonable amendments. However, given the situation that public audit firms are subject to be sued if they don't do the job properly—I doubt that the Auditor General would be—it is in fact in the best interests of Canadians for an external audit firm on whom the Auditor General can rely to be appointed and, based on their experience and expertise, to do the best job possible.

[Translation]

Mr. Paul Crête: We are not saying at all that private auditors would not do a good job. In section 46(1) it says that the Minister may order a special audit if he considers it necessary. The size of the fund means that the House of Commons or its representatives would not have the same ability under the Act if something unacceptable were to occur. When we asked the Auditor General in the past to look into Crown corporations that were not covered, we quickly found out that he is limited in what he can do when he is not the regular auditor of the organization. Therefore, I think the amendment should be considered. What we need to ask is not if the Auditor General is comfortable with the bill. We should rather ask if he would be willing to audit everything that is covered by the Act and all operations of the board. This is what we needed to determine. Whether he is comfortable with the model in the bill is one thing, but we do not know if that is the very best solution in his view. We could set aside this section until the Auditor General gives us his advice and tells us if the best solution is to have a private auditor, as set out in the bill, or if it would not be better to have him audit all operations of the board.

• 1030

[English]

The Chairman: Who's going to be next? Mr. Harris.

Mr. Dick Harris: I thought Mr. Jones was next.

Mr. Jim Jones: I agree with most of the things the honourable member said about the external auditor, but first of all I think the Auditor General could acquire the expertise by just hiring the proper people. I agree with the external auditor concept. I look at in this case the Auditor General as the internal auditor and I would want to ensure that the internal auditor has access to the same information as the external auditor, and I'd be happy with that.

Can I ask the witnesses whether the internal auditor, in this case the Auditor General, has access to exactly the same information and doesn't have to depend on the external auditor to get information? Does he have access to the same information, including all records and everything of this fund and the board, as does the external auditor?

Mr. Wayne Foster: Where the minister asks for a special audit, and then the AG is appointed to do that, then he would have access to the same information.

Mr. Jim Jones: And he doesn't have to rely on anything from the external auditor?

Mr. Wayne Foster: No, my understanding would be he wouldn't have to in that situation.

The Chairman: Mr. Harris.

Mr. Dick Harris: Mr. Chairman, I'm a little bit concerned now, because we have a conflict in opinions of what the Auditor General said. Mr. Valeri and Mr. Iftody said that the Auditor General said he was quite comfortable with this bill. Mr. Jones said a few minutes ago that in his conversations with him, the Auditor General said he wished that his role could be expanded a little bit.

Now we have a conflict about how the Auditor General actually feels about his role in this. I would certainly like to have that conflict clarified, because I think it's very important. According to Mr. Valeri, everything's fine. According to Mr. Jones in his conversations with the Auditor General, the Auditor General wouldn't mind having a few more powers.

It's one thing to get an auditor's report and see the numbers. It's another thing to be able to have access to the workings and the decision-making of where the fund was invested, in what different ways. Anyone can read a financial report and see the numbers, but a lot of times there's information behind those numbers that might be useful.

The Chairman: Just hang on one second. Mr. Valeri, did you want to comment?

Mr. Tony Valeri: From what I gather, Mr. Foster, in your statement to this committee you basically stated that you have checked with the Auditor General and he sees no problem with the way we're proceeding. Is that correct?

Mr. Wayne Foster: Yes. In fact we made changes to the legislation. It was released in draft form in February. We consulted after that, and changes were made as a result of comments from the Auditor General's office. At the end, he was comfortable with the bill.

The Chairman: Mr. Iftody.

Mr. David Iftody: I want way to say for the record, Mr. Chairman, that it's important to reiterate and clarify the comment made by the representatives of the department.

• 1035

On February 14 the release was made. The Auditor General had an opportunity to comment on it. I'm told as well that the provisions under this section were influenced by that review by their senior officials, and that following that, Mr. Chairman, having been comforted with their influence opening up, as I've said, a number of these windows, a letter confirming that process, that undertaking and that understanding between the two departments was in fact sent to the Auditor General.

That, of course, is clear indeed about the role and the relationship between the two departments. They seem reasonably satisfied with their access.

The Chairman: Thank you, Mr. Iftody.

Do you want a recorded vote on the amendment, Mr. Harris?

Mr. Dick Harris: Yes.

(Amendment negatived: nays 7; yeas 3)

(Clause 42 as amended agreed to)

(Clause 43 agreed to)

(On clause 44—Right to information)

The Chairman: We have an amendment to clause 44, PC-4. Just for the information of members, PC-3, an amendment to clause 42, was withdrawn.

Mr. Jones.

Mr. Jim Jones: We want to ensure that the funds entrusted to the investment board are properly managed in the best interests of the beneficiaries and that the Auditor General has access to all of the information.

I move to amend clause 44 of Bill C-2 by adding, after line 32 on page 24, the following:

(5) Subsections (1) and (2) apply to access to information requested by the Auditor General of Canada.

(Amendment negatived: nays 7; yeas 4)

(Clauses 44 to 46 inclusive agreed to)

(On clause 47—Special examination)

The Chairman: Mr. Jones, you have an amendment to clause 47.

Mr. Jim Jones: Yes. I move to amend clause 47 of Bill C-2 by replacing lines 10 and 11 on page 25 with the following:

47.(1) The Minister shall cause a special examination to be carried out every five years in respect of the

It's the same explanation I just gave. We want to ensure that the funds entrusted to the investment board are properly managed, and sound administrative practices are followed.

The Chairman: Do you want to comment on this, Mr. Harris?

Mr. Dick Harris: It certainly warrants comment.

The Chairman: Go ahead.

Mr. Dick Harris: What Mr. Jones is presenting is an amendment that would add just one more measure of accountability to the operation of the board. The term “special examination” would give the Auditor General the ultimate in examination powers to do a double-check of what's going on.

If the government is not afraid of openness and showing the world how well this new investment board is working, then I can't imagine why the Liberal members would vote against this. I mean, we're talking about a special examination every five years. Certainly that's not too much to ask in the interests of the taxpayers of Canada. We have to support it.

The Chairman: Mr. Szabo.

Mr. Paul Szabo: The requirement of all these special activities are listed in clause 39, including a review of financial and management control and information systems, management practices, record of investments, etc. All of these things are covered under the responsibilities of the auditor of the fund in any event.

• 1040

I suspect, and maybe the officials want to comment on it, this provides latitude for additional work in areas where public information may be better served by producing a special report from time to time. So I can only assume it's there for latitude.

The Chairman: Mr. Harris, do you have a comment?

Mr. Dick Harris: As I read clause 39, it talks about special audits, internal audits, but it has nothing that references the power of the Auditor General. In the case that the special examination was required by the minister, there's nothing that would allow the Auditor General to put the full force of his office into a special examination. Nothing in clause 39 allows that. It talks about all the powers and all the duties and responsibilities of the internal audit itself, but there's nothing beyond that, Mr. Chairman. The government is basically saying “trust us”.

The Chairman: Mr. Jones.

Mr. Jim Jones: This is not very different from what is specified with all our crown corporations, that the Auditor General should inspect the books every five years; do a thorough audit. This is consistent.

(Amendment negatived: nays 7; yeas 4)

(Clauses 47 and 48 agreed to)

(On clause 49—Who conducts examination)

The Chairman: Mr. Jones, do you have an amendment for clause 49?

Mr. Jim Jones: I so move.

The Chairman: Do you want to explain it to us?

Mr. Jim Jones: Yes. We want to ensure the funds entrusted to the investment board are properly managed and sound administrative practices are followed. That's why we're moving this amendment.

The Chairman: Are there any further comments on this amendment? Mrs. Ablonczy.

Mrs. Diane Ablonczy: Mr. Chairman, I think this is another opportunity for Canadians to be satisfied that there are going to be checks and balances, the transparency the government keeps talking about and keeps voting against. I think we do need to consider very seriously some of these amendments which are coming forward to allow this.

Again, this gives Parliament a greater, more regular scrutiny of these matters. Although this is tied to clause 47 and would probably have to be reworded now, it's another measure that should definitely be considered by the committee.

(Amendment negatived: nays 7; yeas 4) [See Minutes of Proceedings]

(Clause 49 agreed to)

(On clause 49.1)

The Chairman: Mr. Jones, do you have an amendment for clause 49.1?

Mr. Jim Jones: I so move.

The Chairman: Do you want to explain it?

Mr. Jim Jones: We just want to ensure that there's openness and that the investment of the funds is properly managed. Proper security scrutiny requires open and regular reporting and we just want to make sure that happens.

The Chairman: Are there any further comments on that? Mr. Harris.

• 1045

Mr. Dick Harris: I just have to keep reiterating the fact that we as the official opposition are demanding accountability from the board that will be managing these funds. As with the other opposition parties that have been demanding accountability, this is an amendment that would once again serve that purpose.

It's important to point out that every amendment that demanded accountability has been defeated by the Liberal members today. Considering the red book promises of openness and transparency on the dealings of the government, I think this borders on hypocrisy.

We all know the autonomy that the crown corporations in this country operate under, free from the ultimate scrutiny of the Auditor General except in very special cases as determined by the government or a minister himself or herself. We have nothing more than an autonomous politically influenced crown corporation being set up here, and it's a shame that the Liberal members have rejected every single amendment that called for accountability.

While we still will remain friends, I have to say that I am really concerned about the members this morning—of course, Mr. Chairman, with all due respect, understanding the marching orders that they each got before they came today.

(Amendment negatived: nays 7; yeas 4) [See Minutes of Proceedings]

(Clause 49.1 negatived)

(On clause 50—Statements to go to Ministers)

The Chairman: Mr. Jones, we're on clause 50 now. There is an amendment.

Mr. Jim Jones: Yes. I move it.

The Chairman: Do you want to explain it to us?

Mr. Jim Jones: We just want the statements to be made public.

The Chairman: Comments?

Mr. Tony Valeri: Just a quick comment. The annual audited statements are in fact made public. They are in the House.

This isn't the question exactly. The quarterly statements are unaudited. The audited statements are the public statements that will be made available and are tabled in the House.

(Amendment negatived) [See Minutes of Proceedings]

(Clause 50 agreed to)

• 1050

(Clauses 51 to 53 inclusive agreed to)

The Chairman: Now we have NDP-4.

Mrs. Diane Ablonczy: Mr. Chairman, we'd be willing to move that motion. I think it merits debate.

The Chairman: Yes, but I'll tell you one thing, as the chair I have a real problem when people are not present for their motions. Go ahead.

Mrs. Diane Ablonczy: Mr. Chairman, I think your point is well taken.

This amendment, though, does merit debate because it again touches on this whole issue of credibility that I think we've been struggling with this morning—some of us, at least.

What the effect of this motion would be on clause 54, Mr. Chairman, on page 28 of the bill... As you see, this talks about offences committed by members of the board. If a director, officer, or employee gives false information or tries to deceive the public, which is a pretty serious offence, there are certain penalties prescribed in clause 54. The effect of this amendment would be to sharply increase those prescribed penalties.

Remember that we're dealing with a fund—or these directors will be—in which there will be literally billions of dollars, a very big chunk of Canadians' money. And if these directors deal falsely and in bad faith with the Canadian public, I think it's very appropriate that the penalties be extremely stiff.

This amendment would increase the penalties from a fine of $100,000 for a person to a fine of $500,000 and the term of imprisonment from twelve months to three years. For a corporation or company it would increase the fine from $500,000 to $2.5 million.

It seems to me, Mr. Chairman, that with these huge funds at stake and with all the temptations that could be—and I hope are not—attendant on the management of these funds, some pretty stiff penalties should be in place as a deterrent, and also as a statement, Mr. Chairman, of how seriously we would take any breach of the trust and the duty of care that is owed to Canadians in the management of these funds.

The Chairman: Thank you, Mrs. Ablonczy. Mr. Iftody.

Mr. David Iftody: At first glance, I'm not sure about the amount of the fine. It may or may not be relevant. Mr. Nystrom proposed it. I unfortunately don't have a copy of his amendment in front of me, but he was suggesting, for example, that a labour representative be appointed to the board, and at the same time he's suggesting penalties of $2.5 million. I think that's exaggerated. I think that is actually quite a silly kind of an award or penalty here, which is largely inconsistent with the Finance Act and with most provisions, I think.

But I will say one thing. Categorizing it as a summary conviction rather than an indictable offence is something that I think is worth exploring. The summary conviction provisions of the Criminal Code are quite lenient indeed, and proceeding by way of an indictable offence is even more consistent with the penalty of $100,000 or $500,000.

A summary conviction offence, as you would know, Mr. Chairman, is tantamount in some cases to a parking ticket, and is a little inconsistent, I think.

So rather than moving numbers like $10 million or $50 million or $100 around as fines, perhaps categorizing it as an indictable offence rather than a summary conviction offence may provide the necessary kinds of signals to those engaged in making the decisions at the board of directors committee about the serious nature of this.

• 1055

Ms. Paddy Torsney: Are you amending the amendment?

Mr. David Iftody: No, I'm not amending. I'm throwing this out as a point of discussion. Perhaps the officials may want to comment on it. I think categorizing it as a summary conviction offence rather than changing it to $2.5 million may be more appropriate.

The Chairman: Mr. Szabo, Mr. Harris, and then Mr. Jones.

Mr. Paul Szabo: For the officials, the language is that they're subject to these penalties if anything they sign includes a false statement, but I'm asking whether or not the meaning of this is that they knowingly or willingly... Theoretically, it could have a false statement that they weren't aware of. Under the director's liability of corporations, you have to be culpable, knowingly, and so on, and I'm not sure whether or not this conforms to what the CBCA would do.

Mr. Douglas Wyatt: If I can respond to the two questions, on the first, the motion, I for one don't know how high is high, and I suspect that the maximums we put in any statute aren't anything close to what judges do. What I can say with this provision is that we saw the board as a financial institution and we used as a precedent what's in the Bank Act. That's where the figures came from.

In terms of the second question, yes, it's our understanding that in fact the provision as written would require what lawyers would call a mental element in the crime, that they knew that what they were signing was false.

Mr. Paul Szabo: Okay.

The Chairman: Mr. Harris.

Mr. Dick Harris: Mr. Chairman, in reading this, the first thing that occurs to me is that this clause is effectively taking away the powers of the courts of the land by setting out maximum penalties that can be imposed. If that is the case, I'm concerned about that.

I would like to talk about the numbers as well. In the standard practice of judgments or sentencing handed down by the courts when it comes to issues of fraud and/or corruption in the handling of money, it is generally recognized that the penalties that are imposed reflect the amount or the magnitude of the fraud. By limiting the fine to $100,000 and a jail term to 12 months where we are dealing with a $100-billion-plus fund... I doubt if there are many corporations in this country that have access to that much money. Yet in a court of law, in a private corporation one could receive for a fraud offence far more than what's suggested in this clause. So I think the amendment suggesting a bigger latitude for penalty is certainly in order.

The Chairman: Thank you, Mr. Harris. Mr. Jones.

Mr. Jim Jones: I have a question for the witnesses: Why are we putting a limit of 12 months? I can see the dollar amounts. I don't even think we need a dollar amount. It's more if you commit the crime knowingly than it should be...whatever the prison term deserves. Right?

Mr. Douglas Wyatt: Maybe I can answer both questions at once. This provision would not permit a Criminal Code prosecution, and I think in terms of a major fraud the prosecutor would go with the Criminal Code. This is not seen as covering all offences that may occur at the board. It is more of a regulatory offence for false filing. Any major fraud would be proceeded under the Criminal Code.

In terms of the sentence, that's how it's seen. As someone who is forging an expense account, maybe... I don't know if it would apply to that; I don't want to try to interpret the section. It's not seen as a provision that would be used in the case of a major attempt to defraud the board, which would be a Criminal Code offence.

Mr. Jim Jones: But for any prison term, wouldn't it be a Criminal Code offence?

Mr. David Iftody: You mean, you can—

Mr. Douglas Wyatt: I know of fraud cases that did not result in imprisonment, but of course that's at the discretion of the judge. It could result in a long prison term as well.

• 1100

Mr. David Iftody: You can go to prison on a summary conviction or an indictable. It's up to the discretion of the judge.

Mr. Jim Jones: Is a summary conviction only one year?

Mr. David Iftody: No.

Mr. Jim Jones: So why are we putting just one year?

Mr. Douglas Wyatt: As I mentioned, I think we took what seems to be a fairly standard penalty level in federal statutes for this type of offence and put it in here, knowing if something major was done this would not be applied and there would be a Criminal Code prosecution.

The Chairman: Do you want to explain it?

Mr. Roger Gallaway (Sarnia—Lambton, Lib.): I think we're getting some confusion on this. First, on whether it's a summary conviction matter or an indictable matter, obviously if it's under the Canada Pension Plan Investment Board Act it's a summary matter. If it's an indictable matter it's under the Criminal Code. It's up to the discretion of the prosecutor, the crown, whether it will be a summary matter or an indictable matter.

It's very difficult for us to sit here and say whether a certain scenario ought to be an indictable matter. That's obviously what our witnesses are saying. It's going to fall on the facts, and we don't know what the facts are at this point.

But if somebody commits some extremely serious offence that is not of a minor regulatory inadvertent nature or if there's a fine line, they may want to throw it under the act. If it's obviously a case where there's an intent to mislead, defraud or whatever the case may be, then it will go under the Criminal Code and this will fall by the wayside or they'll just disregard it.

The Chairman: Thank you, Mr. Gallaway, for your legal opinion.

[Translation]

Mr. Paul Crête: I had asked for the floor.

The Chairman: Yes, Mr. Crête.

Mr. Paul Crête: At the beginning of our discussion Mr. Nystrom mentioned that some concepts might be worth considering. I think this might be one of those and that the government members should take some time to reflect on it. The first goal of this section is to prevent fraudulent acts by setting fines and prison terms of such magnitude that they will deter anyone from even considering such acts.

Presently, the amount of the fine is in the vicinity of $100,000. It is true that when you are dealing with such a sizeable fund... The reference at the beginning of section 54, is not only to acts of an administrative nature, since it stipulates: "...in carrying out a duty under this Act or the by-laws...". So this covers the whole range of actions. I am going to say a terrible thing, but someone might figure that this $100,000 fine is a good investment if they can make $250,000 on the other side of the ledger; also, the prison term is less than a year. At any rate, we cannot foresee what might happen; we must make absolutely sure that the penalties will deter people from even thinking about such actions.

In my view, this amendment does go in any way against the spirit of the legislation. Maybe the government members may want to take some time and have a closer look at it. The reference to the Bank Act does not seem relevant since it must be reviewed every five years and has not been recently. Maybe we should change the amounts set out in the Bank Act rather than piggy-backing this bill onto the Bank Act. Maybe we should amend the Bank Act.

At any rate, I urge the Liberal majority to think about it and to consider postponing the decision on this section.

[English]

The Chairman: Mrs. Ablonczy.

Mrs. Diane Ablonczy: I have a thought on Mr. Crête's comments.

I think that's really the point. We're all reassured to know that if there's some really serious fraud there are other measures to deal with it very stringently. However, this act kind of sets the tone for how seriously we might take acts of deception or fraud.

To put high ceilings in—that's a maximum, right—doesn't mean they would be the exact penalties, but it does say we believe those maximums should reflect the seriousness with which we would take any fraud or deception.

It seems to me the amendment is reasonable and would be reassuring to Canadians to at least some degree.

The Chairman: Okay.

Do you want to make a quick comment?

Mr. David Iftody: Thank you, Mr. Chairman. I have a final point.

• 1105

I think some interesting things have been raised. We have had a clarification and an interpretation of this by both the officials and my esteemed colleague Mr. Gallaway. Some important things have been raised here, but I think the point is that we can have an effective debate on some of these matters at report stage in the House. I think there's some reasonable discussion around this one. Maybe what we should do is to proceed now to a vote and perhaps raise this at report stage and in consultation with other legal officials look at some reasonable amendments the Reform Party would perhaps agree to.

(Amendment negatived) [See Minutes of Proceedings]

(Clause 54 agreed to)

(Clauses 55 to 57 inclusive agreed to)

(On clause 58)

Mrs. Diane Ablonczy: Mr. Chairman, what I would like to put before the committee is that the effect of clause 58 is really to increase payments into the fund retroactive to the last year. It seems to me, Mr. Chairman, although the amounts are small, it really puts an unnecessary and distasteful burden on Canadians. They have to recalculate their whole payment. They are now into this thing for more money than they thought they were going to be. It seems to me it's bad enough that these increases are coming into effect with such force as they are, but to make them retroactive is really not a wise move. It's 1.5% of the 1997 rate, but it still would be something people hadn't counted on, hadn't budgeted for. They are now going to have to calculate it and owe it and put it into their tax bill. I really think we should rethink that and not make this thing retroactive.

On that basis I would suggest that the committee not pass clause 58.

The Chairman: Mr. Harris.

Mr. Dick Harris: Mr. Chairman, the officials might be able to comment on that.

The Chairman: Could the officials comment on clause 58, please.

Mr. Hal Hanes (Chief, Income Security Section, Department of Finance): Clause 58 was part of the agreement with the provinces that was struck and announced last February 14. At that time the minister announced the contribution rate for 1997 would be increasing. When the CPP rate for 1997 was announced by Revenue Canada there was also a warning to people there was a possibility of raising the rate in 1997. So yes, the bill has taken longer to be put into effect than had been hoped at that time, but Canadians had fair warning that they would have up to a $24 extra contribution on their tax bills when they filed their forms in 1998.

The Chairman: Mr. Nystrom.

Mr. Lorne Nystrom: Just a question to the officials. We had a witness here a couple of days ago—maybe you would remember who it was, Tony—who was saying there would be a real cost and inconvenience in going ahead with the retroactivity. Instead of doing it retroactively, the witness said we should do it starting January 1, but collect last year's on January 1 as well, so there's no duplication.

I can't recall the witness. You might recall who this was. They were sitting over here, next to Mr. Jones. If somebody else recalls it, perhaps they can explain it better than I can. They were contractors. They were dealing with businesses. They were very labour-intensive.

Mr. Jim Jones: Temporary help.

Mr. Lorne Nystrom: Temporary help. They were making a suggestion that it would be less costly for them and for employers and employees, avoiding the bookwork and so on, in essence by doing it doubly in 1998.

I just wanted to ask the question to see whether or not there's any merit in that suggestion.

Mr. Hal Hanes: The department met with that association last spring. There were a number of considerations in not looking at it for a way of addressing this issue.

• 1110

One of the issues is the fact that Quebec has already increased its contribution rate for 1997. There would be a difference that would stay in the system for many years if we did not maintain comparability with the Quebec Pension Plan. Secondly, we looked at the small change in the contribution for 1997 as something businesses must take account of in doing their bidding on contracts. And the third point is the one I made a moment ago: this is part of the agreement, and we would have to go back and reopen the agreement with the provinces to see whether or not they would concur. It's very difficult to do that in this timeframe.

(Clauses 58 to 87 inclusive agreed to)

(On clause 88)

The Chairman: On clause 88, we have five government amendments. We'll start with G-2.

Mr. Tony Valeri: I'll move that motion.

Ms. Paddy Torsney: I'll second it.

Mr. Tony Valeri: Everyone has motion G-2 in front of them, I believe, along with G-3 through G-6.

The Chairman: Okay, Mr. Valeri, can you explain them?

Mr. Tony Valeri: Essentially, all of these are related to privacy issues. In fact, they were developed after there was some consultation with the privacy commissioner, who has agreed with and supported these motions for amendments.

Ms. Paddy Torsney: I just wanted to make one comment. I really think the privacy issues need to be addressed, and I'm glad to see the government is making changes. Certainly it reflects testimony that was given to us yesterday by the university teachers' association. I think they're very good amendments.

The Chairman: Can I ask permission of the committee to deal with G-2 and G-6? Should they all carry, or do you want to go one by one? If you want to do that, we'll go one by one.

Mrs. Diane Ablonczy: I just think we should know what is happening here. This says page 63, and it says clause 88, but I see clause 104 on page 63, unless I'm missing something, which probably is the case. Can you help me there?

[Translation]

Mr. Paul Crête: This is in another legislation.

[English]

Mrs. Diane Ablonczy: Okay, I see. The reference to clause 88 is actually on page 62, and this talks about amending section 104 of the other act. Okay, I understand that.

It's easy to get me confused, Mr. Chairman. I'd like to not be confused.

The Chairman: That's not my intention.

Mr. Dick Harris: Mr. Chairman, Mr. Valeri breezed through the explanation pretty quickly there. Could I ask him just to repeat the explanation of this amendment?

Mr. Tony Valeri: The amendments are in fact a result of consultation by the officials with the privacy commissioner, who had some privacy concerns with respect to this legislation. After that consultation and after reviewing these motions for amendments, the privacy commissioner felt comfortable and supported the changes. That's why the government is presenting them. Perhaps I can get the officials to further comment on them if you'd like.

Ms. Paddy Torsney: It adds additional protection and very clearly defines that the Privacy Act is the act that guides. If you read the amendment, it says “In addition to an individual's right of access under section 12 of the Privacy Act”, and then it sets all the rest of the additional protections of the Privacy Act that already existed within what was prepared.

Mrs. Diane Ablonczy: So as I understand it, it really doesn't change anything, because the Privacy Act is in effect already. It simply acknowledges—

Mr. Tony Valeri: It further strengthens it, yes.

Mrs. Diane Ablonczy: —or makes explicit the fact that you have Privacy Act protection and in addition you have what's already been written in the act. It doesn't change anything as much as it makes explicit the range of protections that are available. Is that correct?

Mr. Tony Valeri: That's correct.

• 1115

Mr. Terry de March (Director, Legislation, Income Security Programs, Department of Human Resources Development): With respect to that provision you were just referring to, mentioning specifically the Privacy Act, this is on a person's access to information in their own files that are held within our data banks. It is simply clarifying.

The privacy commissioner requested that it be made clear that the informal provisions we have, allowing access to a client's own information, do not give up in any way their rights guaranteed under the Privacy Act. Therefore this amendment makes it extremely clear that all of those rights and protections under the Privacy Act are there and are paramount. Then the person has the additional right, on an informal basis, of simply coming to the department to request copies of their own files.

The Chairman: Agreed? Shall amendments G-2 through G-6 carry?

(Amendments agreed to) [See Minutes of Proceedings]

(Clause 88 as amended agreed to)

(Clauses 89 to 93 inclusive agreed to)

(On clause 94)

The Chairman: On clause 94 we have NDP-5. Mr. Nystrom.

Mr. Lorne Nystrom: Before I move that amendment, I just wanted to ask the officials a question, if I could.

The Chairman: Sure.

Mr. Lorne Nystrom: And I may or may not proceed with the amendment.

Subclause 94(5) has two different objectives. I'm talking about proposed subparagraphs 113.1(4)(c)(i) and 113.1(4)(c)(ii). Sorry for the complexity of this thing.

When the Canadian Labour Congress was before the committee, they argued that these two objectives are contradictory. The first objective identifies the constant contribution rate as an objective. The other one identifies the constant fund-to-expenditure ratio as an objective.

I don't pretend to be able to even describe what they're getting at here, but they were convinced. Mr. Bob Baldwin in particular, who sits on the CPP advisory committee and has been at this for many, many years, thought these were contradictory objectives. Can one of you respond to that concern of the Canadian Labour Congress? If you can satisfy me that these are not contradictory, then I will not proceed with the amendment.

The Chairman: Mr. Marshall.

Mr. George Marshall (Senior Policy Officer, Income Security Programs, Department of Finance): They are not in fact contradictory amendments, and the reason is that the primary financing objective here is to have the lowest constant contribution rate we can have. We need to define that in a unique way; therefore it makes reference to also maintaining the fund-benefit ratio generally constant over the foreseeable future.

If we didn't have the second part of that, the fund-benefit ratio part, then we wouldn't have a unique definition of the lowest constant contribution rate we could have. In other words, the fund-benefit ratio could be going up or it could be going down, depending upon whether you moved the contribution rate slightly up or down. And you could have a constant contribution rate, and the fund-benefit ratio could go up or down.

If we don't specify what's happening to the fund-benefit ratio, then we don't have a unique level of contribution rate. That's basically the answer. If we don't have the second part of that financing objective, the fund-benefit ratio part, the first part becomes unworkable.

The Chairman: Are you going to withdraw your amendment?

Mr. Lorne Nystrom: I think I will, yes.

The Chairman: The amendment has been withdrawn.

(Clauses 94 to 96 inclusive agreed to)

(On clause 97)

The Chairman: On clause 97, we have some amendments from the NDP and the Reform. NDP-6 is the first one we'll be dealing with.

• 1120

Mr. Lorne Nystrom: I move that Bill C-2 be amended in clause 97 by replacing lines 18 and 19 on page 82 with the following... It's quite long, so I won't read it, Mr. Chair, but we believe the advisory board should be given a broader mandate and a broader representation, and this would direct the Governor in Council to require the advisory board to review whether the Canada Pension Plan Investment Board has invested its assets with a view to maximizing employment and income growth in the country.

This, I guess, in many ways takes a bit of a leaf out of the Quebec plan, la Caisse de dépôt et placement du Québec. In the plan in Quebec priority is given to investing in Quebec with an eye on employment, with an eye on income growth, and I think they've done that fairly successfully over the years. It's one of the goals and objectives that we should look at in terms of the fund here in this country.

I remind you, Mr. Chairman, that some of the witnesses talked about that. These are Canadian funds and one of the goals should be to maximize employment growth. The more employment we have, the better, obviously, because if people are working they pay into the fund and the fund will grow larger. Under a pay-as-you-go plan, which still is the main way, if more people are working, then the plan is more solvent, the plan is more economically sound. It seems to me that this should be one of the goals and objectives that are right within the legislation.

It seems that worked in the province of Quebec.

[Translation]

Mr. Crête may want to elaborate but this has been quite successful in his province. The Caisse de dépôt et placement works generally very well and I wish our plan would set the same goal for the rest of the country.

[English]

Mr. David Iftody: I'm not sure whether Quebec would be a very good example with respect to some of these investment funds, because it has one of the highest unemployment levels in the country.

The other thing to mention is that in the labour-sponsored venture capital funds, whose primary legislative intent was in fact to create jobs through investment, through tax deferrals, this committee, the former committee, and the committee of industry had reviewed that and I think it was quite clear from a public accounting and public policy point of view that the labour-sponsored venture capital funds were, indeed, not creating the kinds of jobs that we had anticipated and hoped for, resulting in some reductions in those tax deferrals in our last budget.

In the last government we had this debate with the opposition.

So while I appreciate Mr. Nystrom's intent—it's a very noble intent in terms of job creation and I agree with where he wants to go in terms of putting Canadians back to work—I'm just not convinced that handcuffing the investment committee in this way would result in jobs.

In some cases it's been proven over the past four or five years, in evaluations done of some of these funds, that the Canadian public was, indeed, a little bit disappointed in the absence of job creation through these labour-sponsored funds.

That's just my point on that one.

[Translation]

The Chairman: Mr. Crête.

Mr. Paul Crête: I do not want to open a discussion on your comments regarding employment. I would simply stress that your own Minister of Finance has been a long-time supporter of a similar fund at the Canadian level that would serve Canadians as well as the Caisse de dépôt et placement du Québec has served Quebecers.

Without this fund we would be much worse-off than we are, compared to the Canadian average. It is one of the best tools for economic freedom that we have given ourselves and Canadians should indeed take note. I believe the establishment of the investment fund is aiming at the same type of goal for Canada.

Whether we agree or not to give it a role with regards to employment, that is another issue. This is what the amendment before us would do and it is something we should consider.

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Generalizations like the one Mr. Iftody made on employment in Quebec are improper because the fund that is managed by the Régie des rentes du Québec had a much better performance than that of the Canada Pension Fund, among other reasons because the money is being managed by the Caisse.

Ultimately, the amendment before us aims at ensuring that this fund will not have a strictly economic objective but also an employment objective. This is the whole issue that is presently debated in Canada. The fund would only be one of several tools. But for it to work, the government must make employment a priority, which is not presently the case. It is very difficult to write this into legislation when the government does not subscribe to this principle in its basic policies.

[English]

The Chairman: Mr. Nystrom.

Mr. Lorne Nystrom: I want to thank Mr. Iftody for his support of the principle—that's what he said, I think—of what we're trying to do here. I wonder whether or not he has any suggestion in terms of wording changes.

Now, I didn't read out the full amendment, but at this stage maybe I can:

(7) It is the duty of the Advisory Board to review from time to time, as it deems appropriate or advisable, the operation of this Act,

—so that's pretty flexible, Mr. Iftody, and very liberal in terms of when they have to do it—

the state of the Canada Pension Plan Investment Fund, the adequacy of coverage and benefits under this Act, whether the Canada Pension Plan Investment Board has invested its assets with a view to maximizing employment and income growth in Canada, and to report to the Minister the results of that review.

You used the word “handcuffing”. I don't think it handcuffs anything. It says, again, that from from time to time there should be a review to see whether or not the board has invested its assets with a view to maximizing employment and income growth, and to report to the minister.

Nothing here stipulates that they have to do it. All we're calling for is that from time to time there be a review to see whether or not it's maximizing employment growth.

Now, maybe there's a wording change you can suggest there. Maybe take out the word “maximizing” employment and change it to “enhancing”.

If I could, then, on the run, I'll bounce that off the officials. I'd be prepared to move a subamendment—or Mr. Iftody could—to my amendment.

I hear Tony's head shaking, but I hope it's not in a negative way. Something's rattling over there.

Then we could have:

the Canada Pension Plan Investment Board has invested its assets with a view to enhancing employment and income growth

Mr. Hal Hanes: The larger issue is that the next clause in this bill repeals the Canada Pension Plan Advisory Board. It was repealed because of the other strength in accountability and stewardship provisions in the act.

So the first issue is whether or not there is going to be an advisory board. If a board is repealed, then there is no role for the advisory board, let alone the amendment you're proposing.

Mr. Lorne Nystrom: We should add here that we thought the advisory board should be there in previous amendments, but if it's not there, it's gone. It could be a duty of the investment board. Would that be a problem?

Mr. Wayne Foster: The way I read it, you're asking the advisory board or the board of the pension fund to review its investments toward an object that it does not have in the bill. Its object is not to maximize employment or income growth. From that perspective it would seem to me to be inappropriate.

Ms. Paddy Torsney: If I heard Mr. Hanes correctly, he was suggesting that this amendment is out of order in this place. We should rule as to whether that is the case and it should have been amended somewhere earlier, in which case you probably need to move it at third reading.

There is no point in discussing it further if it's out of order.

Mr. David Iftody: Again, I understand Mr. Nystrom's point. I know his intentions are honourable in terms of trying to create employment, and I support that, but I think we've had an important clarification.

• 1130

I'm just wondering again if we would... I think it's a good point, Lorne, but perhaps at report stage in the House of Commons... Given its awkwardness in terms of where the amendment is included, which is right before an exclusion of the advisory board, we should just defer this to debate. I would suggest that the member raise this in debate in the House of Commons, and if some reasonable proposals can be put forward... I would challenge him on this point to make a distinction in his own mind and to balance, on one hand, the duty owed to Canadians and those working people who are investing in the fund who want a reasonable rate of return on their investment, and on the other hand, the need for job creation. Sometimes those two are juxtaposed. I think it's a question that's better debated in the House. Some clarifications should be sought at at that point, Lorne.

The Chairman: Mr. Nystrom, do you want to withdraw this?

Mr. Lorne Nystrom: Yes, I think I will. Maybe I'll work with Mr. Iftody to see whether we can come up with some wording that might be appropriate. I think he's pretty persuasive with his colleagues.

The Chairman: Okay, it's withdrawn. Let's move to R-4 now.

Mrs. Diane Ablonczy: Essentially, the effect of R-4 is to change the heading before proposed section 117 to essentially keep this advisory board in place.

We've talked about that before, Mr. Chairman, so I don't want to belabour a point that may not have been persuasive to begin with.

I would point out that the advisory board really lets regular Canadians have a voice in this whole scheme of things. Bear in mind that it's their money and retirement security at stake here. This is not a nice slush fund for people to play with. I don't want to trivialize the effect of what the board's going to do. The whole purpose of this is to give us retirement security. Hopefully we're all going to get to retirement. When we get there, we sure want to be secure in our lifestyles.

This advisory board really represents employees, employers, self-employed people, and members of the public in general, including disabled people, who have a huge stake in making sure that the benefits they rely on will continue, and a number of interests in this whole word “public”.

I'm very concerned that this advisory board is being axed here. The board itself is not really representative of the interests of the people involved. These are experts, and they should be. We want the best people managing our hard-earned cash, on whom we can lay our grimy hands. Where they come from is probably not particularly relevant, but surely we should have our own representatives breathing down their necks at least to some degree.

I would really suggest that we keep this board in place. Then we can talk about some of the thoughts that Mr. Nystrom and others brought forward for exactly the best role of this board. I would be very concerned at this point about getting rid of it. I think this is a plan in which we want the public to be confident.

One of the problems with the CPP is that it doesn't enjoy public confidence. As you know, recent polls show that a lot of Canadians say they don't even think they're going to get money out of this. It seems to me that if we want to have confidence in this, then these confidence-building measures, which offer very little trouble or cost to anybody, are the least we can do. I really urge us to consider this matter one more time.

Mr. Lorne Nystrom: I want to also go on record as supporting and maintaining the advisory board, and supporting what Mrs. Ablonczy is saying.

Don't think that because I'm looking at Preston Manning's picture all morning over here, I'll find myself being with Reform.

Some hon. members: Oh, oh.

Mr. Lorne Nystrom: This is just when you people turn your backs on him.

A voice: Be nice.

Mr. Lorne Nystrom: Anyway, I think we've had a number of witnesses before the committee who want to maintain the advisory board. It's something that would reflect the general interest in the country. This is something Mr. Iftody seemed to be very concerned about when he talked about different kinds of balances. I'm sure he will support us in this. I just want to go on record as saying that maintaining the board is very important. It's something that's being called for by a number of witnesses before the committee.

The Chairman: Shall R-4 carry?

• 1135

Mr. Dick Harris: I would like to point out that to be fair, we are from here looking at a picture of Tommy Douglas up on the wall there. So fair is fair.

Mrs. Diane Ablonczy: Equal opportunity.

Mr. Lorne Nystrom: In both cases it's called western populism.

The Chairman: As you get inspired, can we deal with this amendment?

(Amendment negatived: nays 8; yeas 5) [See Minutes of Proceedings]

(Clause 97 agreed to)

(Clauses 98 to 101 inclusive agreed to)

(On clause 102)

The Chairman: We now have amendments G-7 to G-11 on clause 102. Mr. Valeri.

Mr. Tony Valeri: Mr. Chairman, I would like to move the amendments.

Essentially these again are amendments that have to do with the privacy issue and they mirror the amendments that were in fact voted and passed by this committee with respect to the CPP. These amendments pertain to the OAS plan. So that would be G-7, G-8, G-9, G-10 and G-11.

The Chairman: Can we deal with this in a group?

Some hon. members: Agreed.

(Amendments agreed to) [See Minutes of Proceedings]

(Clause 102 as amended agreed to)

(Clauses 103 to 109 inclusive agreed to)

The Chairman: We're now on new clause 109.1. The objective of this amendment is to amend the schedule of the Privacy Act, which is not contained in or referred to in Bill C-2. Therefore, pursuant to citation 698.8(b) of Beauchesne's, page 207, I declare this amendment is not in order.

Mr. Jim Jones: Is that mine? It was drafted wrong. Instead of saying Privacy Act, it should say Access to Information Act, and in 109.1 the schedule to the Access to Information Act is amended by adding the following under there.

The Chairman: We'd better deal with this correction then. It is not in order anyway.

Mr. Lorne Nystrom: Give us a detailed explanation of why you said that.

The Chairman: For the same reason I cited earlier.

(Clause 110 agreed to)

The Chairman: Shall the schedule carry?

Some hon. members: Agreed.

Some hon. members: On division.

The Chairman: Shall clause 1 carry?

Some hon. members: Agreed.

Some hon. members: On division.

The Chairman: Shall the title pass?

Some hon. members: Agreed.

Some hon. members: On division.

The Chairman: Shall the bill carry as amended?

Some hon. members: Agreed.

Some hon. members: On division.

The Chairman: Shall the committee order a reprint for use at report stage?

Some hon. members: Agreed.

Some hon. members: On division.

The Chairman: Shall I report the bill to the House as amended?

Some hon. members: Agreed.

Some hon. members: On division.

Ms. Paddy Torsney: I would like to move to adjourn.

The Chairman: No. Mr. Valeri wants to make a statement.

Mr. Tony Valeri: I want to make a comment.

Ms. Paddy Torsney: I withdraw my motion.

Mr. Tony Valeri: Mr. Chairman, during the hearings we heard from several groups that really the government needs to develop a retirement income strategy and a more open and consultative process. Since the issues will continue to be a concern to Canadians, I'd like to make the following suggestions for the committee.

• 1140

Groups such as the Canadian Labour Congress, the Canadian Federation of Independent Business, the Association of Canadian Pension Management have all suggested that regular consultations be in fact held with stakeholders and the meetings really need to address issues such as the new three-year review of the CPP on a regular and timely basis. I'd like to recommend on behalf of the Minister of Finance that this committee agree to host, along with members of the human resources development committee, a regular round table on retirement income issues that would help in fact not only educate parliamentarians but the issues would become of greater priority and knowledge for the public. We need to communicate to the public the importance of retirement planning, recognizing the tremendous experience that's available to Parliament from labour, citizens' groups, and retirement experts.

I'd suggest, Mr. Chairman, that perhaps we could take this up in the steering committee and that the chair could approach the chair of the human resources development committee and that we could begin to plan our first round table, perhaps sometime in 1998.

The Chairman: That's an excellent suggestion, Mr. Valeri.

I want to make a brief comment here. This is our 55th meeting, and we were struck a month and a half ago. I simply would like to thank all members who participated both in Bill C-2 hearings and the pre-budget consultation for their efforts. It's been a very disciplined effort and one that I think will serve a great purpose, not only here in committee but for all Canadians.

Also, I want to express to the officials who are always present and giving us grateful insight on our bills our warmest and sincerest gratitude. I know you've been quite busy dealing with all sorts of things. Also, I wish to thank the clerks, the researchers, and everyone involved in this process.

The meeting is adjourned.