April 3, 1998

PC

Peter MacKay

Progressive Conservative

Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC)

Mr. Speaker, I rise with pleasure to table a petition pursuant to Standing Order 36 on behalf of the constituents of Pictou—Antigonish—Guysborough, specifically the Sisters of Bethany in Antigonish.

The petition states the position of the group, which opposes the Multilateral Agreement on Investment. The petitioners caution the government on the mode in which the negotiations have proceeded and request that a moratorium be placed on the ratification of the MAI until full public hearings have been held across the country so that Canadians may have an opportunity to partake in the discussions and put their opinions forward.

Topic:   Routine Proceedings
Subtopic:   Petitions
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REF

Bill Gilmour

Reform

Mr. Bill Gilmour (Nanaimo—Alberni, Ref.)

Mr. Speaker, on behalf of the constituents of Nanaimo—Alberni I have two petitions to present.

In the first petition the petitioners call upon parliament to withdraw Bill S-13 from the House of Commons and to resolve never to consider state sanctioned homicide on the grounds of health, age, illness, disability or any other dehabilitating infirmity whatsoever from this day on.

Topic:   Routine Proceedings
Subtopic:   Petitions
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REF

Bill Gilmour

Reform

Mr. Bill Gilmour (Nanaimo—Alberni, Ref.)

Mr. Speaker, the second petition contains 389 signatures.

The petitioners request that parliament allow Canadian citizens to vote directly in a national binding referendum on the restoration of the death penalty for first-degree murder convictions.

Topic:   Routine Proceedings
Subtopic:   Petitions
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NDP

Judy Wasylycia-Leis

New Democratic Party

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP)

Mr. Speaker, I am pleased and honoured to be able to present a petition on behalf of constituents of mine and other residents of Winnipeg, Manitoba.

The petitioners call upon this government to look seriously at its commitment to participate in the development of the Multilateral Agreement on Investment. They express serious concerns to this government about the way in which this agreement will jeopardize democracy, sovereignty and our economic and social institutions in this country.

They believe the MAI is fundamentally flawed in that it seeks to protect the rights of investors without providing similar protection for workers through binding core labour standards. They believe that the MAI is undemocratic and that it will tie our hands as elected parliamentarians for 20 years.

They call upon this government to reject the MAI and to look at globalization and international trade deals on the basis of compassion and humanity.

Topic:   Routine Proceedings
Subtopic:   Petitions
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LIB

Karen Redman

Liberal

Mrs. Karen Redman (Kitchener Centre, Lib.)

Mr. Speaker, today I present to this House a petition carrying the names of residents of Kitchener Centre and surrounding areas calling for action in the situation in the Serbian province of Kosovo.

The petitioners ask parliament to consider the best interests of all citizens of Serbia and to take action toward peace and democracy in that region.

Topic:   Routine Proceedings
Subtopic:   Petitions
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REF

John Cummins

Reform

Mr. John Cummins (Delta—South Richmond, Ref.)

Mr. Speaker, I have two petitions to present this morning.

In the first petition the petitioners note that one man in eight will suffer from prostate cancer and that one-third of those sufferers will die of the disease. The cost for treating prostate cancer is very high.

The petitioners request that the sum of $1 per Canadian per year be made payable to cancer research earmarked for prostate cancer.

Topic:   Routine Proceedings
Subtopic:   Petitions
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REF

John Cummins

Reform

Mr. John Cummins (Delta—South Richmond, Ref.)

Mr. Speaker, the second petition was organized by Mr. Doug Massey of Ladner, British Columbia. The petitioners are residents on lands claimed by Tsawwassen, Musqueam, Sto'lo, Burrard and Katzie Indian bands. They call on parliament to hold a referendum to seek the consent and authorization of residents prior to beginning negotiations concerning waterways, rights, et cetera.

They further request that a second referendum be held to ratify the final agreement.

Topic:   Routine Proceedings
Subtopic:   Petitions
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LIB

Bob Kilger

Liberal

Mr. Bob Kilger (Stormont—Dundas, Lib.)

Mr. Speaker, I wish to present three petitions on behalf of the constituents of my riding of Stormont—Dundas.

The first petition calls for a review and a revision of the Young Offenders Act.

Topic:   Routine Proceedings
Subtopic:   Petitions
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LIB

Bob Kilger

Liberal

Mr. Bob Kilger (Stormont—Dundas, Lib.)

Mr. Speaker, the second petition is a request for Canada to take a lead role in the campaign to abolish all nuclear weapons by the year 2000.

Topic:   Routine Proceedings
Subtopic:   Petitions
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LIB

Bob Kilger

Liberal

Mr. Bob Kilger (Stormont—Dundas, Lib.)

Mr. Speaker, the third petition calls upon parliament to amend the Criminal Code, specifically subsections 173 and 174, the indecent act and public nudity provisions, to clearly state that a woman exposing her breasts in a public place is an indecent act.

Topic:   Routine Proceedings
Subtopic:   Petitions
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REF

John Cummins

Reform

Mr. John Cummins (Delta—South Richmond, Ref.)

Mr. Speaker, on October 28, 1997, I presented Question No. 33 and on December 2, 1997, Question No. 56.

Question No. 33 references the refusal of the Oak Bay Marine Group to supply the Department of Fisheries and Oceans with adequate catch data.

Question No. 56 is with regard to the arrangement between the Department of Fisheries and Oceans and sport fishing lodges in 1995 for the provision of daily catch data.

Those questions have not been answered.

In addition, I presented Question No. 51 on December 1, 1997. Question No. 51 dealt with aboriginal fishing activities in British Columbia during the period March 31, 1992 to March 30, 1997.

There have been no responses to these questions and they are long overdue.

Topic:   Routine Proceedings
Subtopic:   Questions On The Order Paper
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LIB

Ovid Jackson

Liberal

Mr. Ovid L. Jackson (Parliamentary Secretary to President of the Treasury Board, Lib.)

Mr. Speaker, the department has tried to respond in a timely fashion. I will make note of the hon. member's concerns and pass them on.

Sometimes when members ask questions the information takes a great deal of time because the data has to come from many sources and in some cases it dates back over a long period of time.

Mr. Speaker, I ask that all questions be allowed to stand.

Topic:   Routine Proceedings
Subtopic:   Questions On The Order Paper
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The Deputy Speaker

Is it agreed?

Topic:   Routine Proceedings
Subtopic:   Questions On The Order Paper
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Some hon. members

Agreed.

Topic:   Routine Proceedings
Subtopic:   Questions On The Order Paper
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The House resumed consideration of the motion that Bill S-3, an act to amend the Pension Benefits Standards Act, 1985 and the Office of the Superintendent of Financial Institutions Act, be read the second time and referred to a committee.


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The Deputy Speaker

When the House broke for question period the hon. Parliamentary Secretary to the Minister of National Revenue had 29 minutes remaining in her remarks and she now has the floor.

Topic:   Government Orders
Subtopic:   Pension Benefits Standards Act, 1985
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LIB

Sue Barnes

Liberal

Mrs. Sue Barnes (Parliamentary Secretary to Minister of National Revenue, Lib.)

Mr. Speaker, I will try to wrap it up a little earlier than the full 29 minutes.

I believe when I left off I was speaking about standardizing pension plan contracts and transferring, especially for the small employer, some plan administration responsibility to financial institutions as a cost reduction measure. The details of this regime will be introduced later through regulations.

I would like to move now to speak about reducing regulatory burden.

Under Bill S-3 the Minister of Finance would be able to enter into a multilateral supervisory agreement that is currently being developed by OSFI and the provincial pension regulators through the Canadian Association of Pension Supervisory Authorities, known as CAPSA.

OSFI has been participating in this development for upwards of two years now. By reducing the number of rules to be complied with the regulatory burden facing multi-jurisdictional plans will be reduced. This goal is consistent with the government's objective of reducing overall regulatory burden.

While a number of issues remain to be worked out it makes sense to include the authority to enter into this agreement now to make way for future reductions in regulatory burden. In drafting this package I should point out that the government reviewed legislation in other jurisdictions in order to benefit from their experience and to minimize any regulatory differences.

I have highlighted the key principles underlying the proposed legislation and now I want to turn to some of the specifics of Bill S-3 itself.

I will start with OSFI's supervisory focus, wherein Bill S-3 replaces OSFI's obligation to review all plan documents and amendments with the requirement that plan administrators certify at the time of their filing that documents and amendments meet the regulatory requirements.

This change focuses the ultimate responsibility for the plan administration where it belongs, on the plan administrators. In turn, this allows OSFI to allocate resources to solvency concerns or higher risk plans. This refocusing is consistent with the government's intention to further clarify OSFI's mandate. It must also be noted that OSFI retains the right to review documents and amendments on a case by case basis and will do so as appropriate.

As I mentioned earlier, the superintendent currently has very limited powers to take remedial actions with respect to a pension plan. Bill S-3 introduces several specific new authorities and I will only describe the most important of these.

The most significant is the authority to issue directions of compliance to plans regarding conduct which is contrary to safe and sound financial or business practices and for breaches of the act. This is similar to the power in the financial institutions legislation.

Bill S-3 introduces an appropriate due process along with the authority for the superintendent to seek a court order requiring compliance with the direction. In addition, Bill S-3 gives the superintendent the authority to attend and call meetings with an administrator or to require an administrator to call a meeting with members and other professionals in attendance.

This authority could be used when OSFI believes that the pension plan members or all the members of a particular plan's board of trustees are not fully apprised of the problem. The superintendent will also have the authority to obtain independent professional advice at the expense of the plan. Some plans routinely neglect to file reports required by OSFI to adequately monitor plan solvency. This authority will help the superintendent to have these reports prepared.

Finally, the superintendent will be able to remove an administrator and appoint a replacement when a plan is being wound up and circumstances suggest that members' interests are not best served by the incumbent.

I am going to take a minute to cover the funding rules which have been advanced under this bill.

Under Bill S-3 the superintendent must approve any benefit enhancements that reduce the plan solvency ratio below the prescribed rates or levels. This reflects the government's belief that it is not appropriate for pension plans already experiencing financial difficulties to make improvements when there is no way for the employer to increase funding.

I have received some concerns, as I am sure my colleagues have, with respect to this approach. It is important for this House to understand what concerns have been voiced and to know that the government is working to address them.

First, we want the House to realize that the concerns being raised relate primarily to the solvency threshold which plans must maintain in order to improve benefits. This bill does not specify that threshold. Those details will be provided in the regulations.

Our original white paper indicated the government was looking at requiring that plans now show a solvency ratio of 105% after an amendment, with this requirement being phased in steadily over approximately a 15 year period. Subsequently a range of experts was consulted on this proposal. Professional and industry groups and unions have pointed out that this threshold may be too high and that more flexibility is desired. Consultation is continuing on the regulation that will provide the details behind this provision while recognizing that it serves pension plan members no great service to be promised benefit improvements that cannot be delivered.

Alternatives are being considered for achieving the same result. This could involve a lower threshold accompanied by realistic commitments from the plan to fund itself in an appropriate manner. There may also be other options that will emerge as this work is further fleshed out. It should be made clear that the government will undertake considerable consultation prior to the issuance of the regulations associated in particular with this provision.

I will spend a couple of moments on the arbitration process for surplus assets. In the white paper interested parties were invited to comment on proposals dealing with entitlement to pension plan surplus assets. Many comments were received but not many concrete suggestions were made. Most comments indicated that this is a difficult area to legislate and any improvement would be welcomed.

The government believes that Bill S-3 facilitates arrangements between employers and employees concerning the use of surplus assets in two ways. It provides a lower cost alternative to going to court and it promotes an environment where employers and employees work toward a mutually satisfactory compromise.

Briefly, Bill S-3 proposes that if entitlement to surplus assets is not clearly demonstrated in the pension plan documents then the employer can propose to the employees a surplus withdrawal.

If more than two thirds of the employees consent and required solvency thresholds are met, the superintendent may approve the withdrawal. For ongoing plans, if less than two thirds but more than one half of the employees consent, then the employer can opt to seek arbitration.

Originally Bill S-3 provided that for plans being wound up if less than two thirds but more than one half of the employees consented, arbitration would be mandatory. As I noted earlier, the Senate made a few amendments to the bill, all dealing with the surplus issue. The Senate was concerned about certain situations regarding plans in the wind-ups.

From the point of view of pension plan members and retirees, the timely statement, settlement and distribution of surplus assets is a priority. We agree that this is a concern. As such, the original bill had a certain no man's land. No definitive action to deal with surplus assets or surplus was required if less than one half of the employees consented to a proposal.

The Senate passed an amendment that requires arbitration within 18 months after the termination of the plan, irrespective of consent levels achieved for any proposals. The Senate also questioned the intent of the requirement for the superintendent to approve the withdrawal. Clearly the intent is there to ensure that certain minimum solvency thresholds are maintained. Obviously the superintendent is not going to consent to a surplus withdrawal that would jeopardize plan solvency.

The Senate agreed with the intent but perceived that the original drafting of Bill S-3 provided the superintendent with pervasive scope for not consenting to a surplus withdrawal, in particular if the superintendent did not think that the deal was fair.

There was a concern that if an employer went through the rather lengthy consent and arbitration process the superintendent could arbitrarily deny the withdrawal. As such, an amendment was passed by the Senate which requires that the superintendent in deciding whether to consent to a refund must recognize the claim of the employer to the surplus or part of the surplus, as arbitrated under the provisions of the act.

The government believes that the Senate amendments fill gaps in Bill S-3, and we appreciate the additions. Other more technical amendments were also passed.

The measures in this bill are the result of a broad consultation process. When drafting this legislation the comments received on the initial proposals contained in the white paper were considered and the appropriate amendments made. Provincial ministers responsible for the supervision of provincial pension acts were also invited to comment and there was ongoing consultation among pension supervisors throughout CAPSA.

Other proposals in the white paper not addressed in this legislation will be introduced later through regulation. Areas such as additional disclosure requirements and funding rules are already dealt with through regulations, and this approach will continue.

In other cases such as planned governance and investments, the government believes it is more appropriate to develop best practices. We recognize that the size and other attributes of individual pension plans will effect governance structures and investment strategies.

Considerable additional consultation will take place prior to the implementation of these regulations and any resulting guidelines.

At this time, on behalf of the government I would like to thank the Senate and the many industry participants and other stakeholders who provided constructive and insightful advice. I can assure them that the government looks forward to additional feedback on its regulations and guidelines in the future.

I have highlighted the important issues dealt with in this legislation. Bill S-3 will enhance the stability of Canada's private pension plan regime to the benefit of plan members throughout Canada. Of that we are confident.

I encourage my hon. colleagues in the House to give speedy passage to this bill and I thank them for their attention.

Topic:   Government Orders
Subtopic:   Pension Benefits Standards Act, 1985
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REF

Jay Hill

Reform

Mr. Jay Hill (Prince George—Peace River, Ref.)

Mr. Speaker, I wish I could say at the outset that it is a pleasure for me to rise today to speak to Bill S-3 but it is not. I say that not because I am particularly opposed to this piece of legislation but because I am very much opposed to the way the government has decided to introduce some of this substantive legislation through the other place.

Bill S-3, an act to amend the Pension Benefits Standards Act, 1985 and the Office of the Superintendent of Financial Institutions Act, accomplishes four things. First, it enhances the powers of the superintendent of financial institutions to supervise a pension plan which includes the authority to issue directions of compliance. Second, it is designed to clarify that the office of the superintendent of financial institutions' focus with respect to the supervision of pension plans is on matters affecting the funding and financial condition of pension plans and not on reviewing the text of all pension plans and amendments that are filed.

Third, it provides a mechanism for an employer to establish entitlement to surplus assets, including obtaining membership consent and access to an arbitration process. Fourth, it authorizes the Minister of Finance to participate in agreements with designated provincial authorities respecting the application of provincial law to any pension plan that is subject to federal jurisdiction.

These changes are intended to improve the supervisory regime for pension plans under the PBSA which regulates approximately 1,100 of Canada's 16,000 pension plans. These changes also reduce the administrative burden regarding private sector pension plans and allows the office of the superintendent of financial institutions to have increased supervisory powers to take action when concern arises over the safety and soundness of a plan.

I will talk about some of the highlights of this bill under two main areas. The first area is that of administrative reductions. Under the amended bill, plan administrators will be allowed to certify that all pension plan amendments meet with the standards of the law. This is instead of the present requirement which states that each change must be reviewed and improved individually. The change will allow for greater time to be spent on other matters.

A new kind of simplified pension plan is also created under Bill S-3. In this plan a small employer can use a standardized plan text administered through a financial institution such as a trust company. This is designed to permit defined benefit plans to be extended to small employers who were formerly frozen out of offering such plans due to the high administrative costs involved in creating a customized plan. This will be an added bonus for these small businesses. This bill will allow employers to act as administrators for plans established under collective agreements.

The second area is increased supervisory powers for the office of the superintendent of financial institutions, OSFI. There are several increased supervisory powers for OSFI. Most of these changes will allow the office of the superintendent of financial institutions greater powers.

Some major changes include the following. The superintendent will have the right to call meetings with plan administrators or to force administrators to call meetings with plan members to discuss problems. The office of the superintendent of financial institutions may enforce changes to a plan before the plan faces bankruptcy. Under existing legislation the superintendent has only two options, to close the plan down or to let it run.

Changes in this bill would also allow the OSFI to expect that the administrator of a plan would use such techniques as diversification and match assets to liabilities to avoid risks. The OSFI may issue directions of compliance, a kind of court order, to prohibit certain actions on the part of individual plan administrators. The OSFI will be given the powers to remove administrators and replace them with a court appointed administrator when a plan is being wound up. The OSFI will also be given the power to administer a new set of rules requiring that surplus assets in the wind-up of a plan will be distributed fairly and in an open manner. A vote must be held among plan members to determine how the surplus will be distributed. In principle I support the bill, as does the official opposition. However, there are some serious concerns regarding how the bill came before us today and I mentioned that at the outset.

The bill was introduced and passed by the Senate of Canada and is before us today as the sober second thought before the bill is passed and given royal assent to become law. It is ironic that a bill of this nature, one which would normally be introduced in this place and then sent to the Senate for final approval, is brought here by the very place that is to provide a second look at legislation normally.

Our House leader, the member for Langley—Abbotsford, raised a question of privilege on this very issue because of the nature of this place. Three of the five political parties did not have the opportunity to discuss the bill in the first instance in the other place. The hon. member also argued that a similar bill, Bill C-85 introduced in the 35th Parliament, received royal assent and did not this time. There were also arguments made that this was a supply or in other words a money bill and we all know from Canadian history and politics courses that bills of this nature are only to be introduced in this Chamber.

The Speaker ruled this was not a question of privilege and that the bill is properly before the House now after being introduced and debated in the other place. I am not arguing with the Speaker's judgement but I am calling into question why the government would have this legislation introduced in the other place.

My main concern comes with the representation of the people of Canada. There will be several individuals affected by this legislation and my concern is why the government introduced this particular piece of legislation in the Senate, an institution that is unelected and unaccountable to the citizens of Canada.

As a member of Parliament I was elected by the people of Prince George—Peace River to represent them. My constituents, knowing their feelings regarding the Senate, an unelected, unequal and what many perceive to be an ineffective institution, would not agree with this practice. Many feel that I am their representative, not an individual appointed by the Prime Minister who may or may not serve the best interests of the province of British Columbia, depending on whether they actually show up for work.

We as the elected members of Parliament need to serve as the first voice for our constituents, not as the sober second thought of legislation. That was the intent of the other place, and so it should remain.

I agree with the intent of the bill before us today but not with the way it came to us to be debated.

Topic:   Government Orders
Subtopic:   Pension Benefits Standards Act, 1985
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LIB

Bob Kilger

Liberal

Mr. Bob Kilger

Madam Speaker, I rise on a point of order. There have been discussions among representatives of all parties. Some of our colleagues who would have liked to debate this subject matter are not present today but look forward to taking part when we resume the debate at a later date. This is with particular reference to the members of the Bloc Quebecois.

I think there would be consent that those who want to participate and are available for debate today do so and that when we return to this subject matter at a later date the representative for the Bloc Quebecois, in accordance with Standing Order 74, be given 40 minutes on debate if he or she so chooses.

Topic:   Government Orders
Subtopic:   Pension Benefits Standards Act, 1985
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REF

Ken Epp

Reform

Mr. Ken Epp

Madam Speaker, I just want the record to clearly show we have agreed to this in an honest attempt to try to keep our House working well together and I would like the record to show that the Bloc owes us one.

Topic:   Government Orders
Subtopic:   Pension Benefits Standards Act, 1985
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April 3, 1998