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

Mr. Speaker, it is a pleasure to speak on the important issue of pensions for Canadians in the House today. I am pleased that my colleagues in the NDP caucus have chosen to bring this matter forward as a matter of considerable urgency and a matter warranting the attention of all members in the House.

As members know, it is not often that we get a chance to talk at some length on one particular public policy matter. It has certainly been the case that we have devoted little time in the House to the future of our public pension system. Today we have that opportunity and the motion before us is intended to raise those general issues of concern as well as to focus specifically on the issues of investing in unethical or less than desirable activities for our society.

We are discussing one of the most important issues facing Canadians, and that is the issue of security for their retirement years. To say it is one of the most important issues facing us all is an understatement.

Our approach to this universal question, just like our focus on public health care, cuts right to the core of our values as a caring society. It pertains directly to our values as Canadians for caring and sharing the wealth. It pertains to cooperation and compassion as a predominant theme and approach in any civilized society. The issue of adequate retirement income is critical to all of us. This is literally our bread and butter after the age of 65.

Today 4 million Canadians receive old age security payments on a regular basis, with more than a quarter of these, 1.15 million, relying to some degree on guaranteed income supplements just to help them get by. Since any other income is deducted from the GIS, we are speaking about bare-bone core income support.

Nowhere is this more critical than when we speak about over half the population in Canada. Women in particular are dependent upon these programs. They are dependent on these programs because many have worked in the home or at part time or irregular employment, and have been unable to contribute to either a Canada pension plan, workplace plan or an RRSP. About 12% of senior women are living with their families and 35% are out on their own. Many senior women are not making it and remain mired in deplorable poverty conditions.

A Statistics Canada survey from last fall showed that fully one-third of Canadians in their forties and fifties felt that they had not made adequate financial arrangements for their retirements, and were even unsure about when they would be able to retire.

What is key to all of this is that Canadians are not reassured that the government's plan will serve them well, or that the government has the wherewithal, the vision, or the motive to address these critical problems to ensure that all people, regardless of their life circumstances and where they live in this country, have access to retirement income and income security in their old age.

Obviously, some Canadians, through their unions, have negotiated workplace pensions. About 79% of unionized workers have workplace pensions as opposed to only 30% of those who are non-unionized. We are talking about fewer than 4 out of 10 workers in this instance. Many more are covered by the public workplace Canada pension plan.

Almost three million Canadians currently receive CPP retirement benefits. Constructed over the years as a pay-as-you-go, self-supporting, publicly administered plan, it has been an example to the world of how to provide a stable, dependable income for our elderly. This plan has not been vulnerable to the whims of the marketplace or to the market's highs and lows. It is this strong base that has limited the impact on the CPP of the overall recent market decline that has had serious consequences for economies around the world. It was not pouring money into corporate banking profits either.

That was a source of considerable aggravation for the present Prime Minister and his corporate buddies. That is, until 1997 when, as finance minister, he caved in to the corporate media hysteria and paved the way for private access to our public funds as the answer to questions about CPP sustainability.

The Liberals did not go quite as far as the present Conservatives would have liked which would have been to scrap the CPP altogether and have it replaced with a public RRSP scheme. Let us not forget that the change was significant nonetheless.

That brings me to the essence of the motion before us today which is about the Canada Pension Plan Investment Board. The board was set up amid considerable controversy. It was set up to oversee what we would call a gambling initiative. In true fashion of the present Prime Minister, the Canada Pension Plan Investment Board has taken the most rigidly conservative of paths.

I may sound cynical about what has transpired vis-à-vis our public pension system and how money was being invested to ensure security for all of us in old age, but I am still optimistic. I still have great hope for the future. I have that optimism in part because of the ever growing capacity of young people, whom I meet, to learn and to grow.

When I was a child, I had a friend who firmly believed that milk came from the refrigerator. To this person it was obvious and beyond dispute. Today my son, who is 15 years of age, knows exactly where every item of his clothing is manufactured and under what labour conditions and environmental standards.

Our knowledge base is much more sophisticated and extensive, and our awareness is growing in leaps and bounds through debates that we have been having around trade, social justice, globalization, and sovereignty. The labour movement has played a particularly active role in raising awareness of these matters and in raising awareness from its international solidarity contacts. As a result of these debates and these educational programs from trade unions, Canadians now know about interlocking corporate ownership, manufacturing zones set up to bypass regulations, and child labour.

We have seen the TV footage reporting on a garment factory fire in which dozens of women perished because of abominable labour standards and locked doors. We know that someone owned that factory and almost certainly financed it through investment.

We now know more about our world and how we fit in as producers and consumers than ever before. Just as compelling is our desire to apply this knowledge to action to improve these negative conditions. A growing number of us, when we learn about huge multinational coffee corporations exploiting farmers and workers, choose fair trade options over free trade exploitation.

My colleague from Winnipeg Centre has just outlined our $2.5 billion investment in the arms industry. Most Canadians want no part of that. If we gave them the choice, they would not invest in the arms industry.

Similarly, tobacco each year results in the deaths of 45,000 Canadians. That is roughly five times the number of deaths caused by car accidents, suicides, drug abuse, murder and AIDS combined. Even smokers are against it. We have responded with measures to discourage tobacco use and limit its damage.

However, we may still be unwittingly supporting the tobacco industry in its aggressive quest for new markets in places like China through our public pension plan investments. This is truly unacceptable and is what has given birth to a growing list of socially responsible investment funds now totalling an estimated $50 billion in 2002, of which $10 billion was in positively or negatively screened investment.

The CPP, a long time pay as you go plan, got into the investment business in the late 1990s. Its investment arm, the Canada Pension Plan Investment Board, currently controls over $30 billion of the CPP's $66 billion total. Together with other large public sector pension funds, it wields considerable influence and clout.

There is a downside. In addition to its active role in the arms trade, it has other questionable investments on the go. Many Canadians were appalled to learn that the Canada Pension Plan Investment Board was involved in the financing of new triple p hospitals in Ontario. Our national public pension money is being used to determine our most cherished social program when it is fighting for its very survival.

Of course, Canadians' immediate reaction would be to pull out, but what is the response from the CPP Investment Board? The board has taken a rigid position against ethical investment. Why? According to the board chair, maximizing profits should be the one and only goal of our national public pension plan. My goodness, what a high moral standard Canada has today. What an incredibly high standard set by the chair of the pension investment board.

That segment of the corporate community that resists regulation at all costs tends to hide behind these myths. According to them the sky will fall as soon as rules are added. This is not the case. The sky will not fall, and neither need profits, according to many studies that have actually examined the performance of ethical funds.

According to one Canadian study, for example, the ethical growth fund performed as well or better than non-screened mutual funds over a 10 year period, even slightly outperforming the TSE 300. There will be variations along the way, but in the great tradition of pension funding, in the long term, performance is relatively even.

New Democrats recognize the fiduciary responsibilities of the CPP Investment Board. However, other progressive pension funds have managed to define that responsibility to allow for other responsible social behaviour as well.

To suggest we cannot possibly reach a consensus about what constitutes ethical is a line of morality that is outdated. It shortchanges Canadians' sense of common values and our impulse for decency.

No one is saying that a process will be easy; I do not know of any ethical issue that is, but that does not mean we surrender to the highest bidder without even trying. We need national leadership to set in motion the national dialogue necessary to accomplish this task.

This is an issue that affects all Canada pension plan contributors. It has an impact on all of their lives. They have a right to take part in a full discussion on this issue. They should have been full participants from the beginning.

This is no magic bullet. No one on these benches believes this guidance alone is sufficient without the active promotion of better ethical labour and environmental practices where our investment dollars take root, but it is clearly a vital element in 21st century financial management that is long overdue.

We look to labels for information. What we are saying today is that we want labels on our pension investment. Milk does not come from the refrigerator.

Ms. Wendy Lill (Dartmouth, NDP)

Mr. Speaker, I was very interested by the comments that my colleague has made.

I just returned from Nova Scotia where there was an enormous blizzard. They refer to it as white Juan, in parallel to the hurricane Nova Scotia experienced in September. It was very clear that what was required during the last five days was that people work together. There was very much a sense that the public good, the welfare of everyone would only be increased and improved if people worked together, planned together and dug out together.

It is very interesting to hear that the Canada pension plan was put in place for that very purpose, to raise the horizons and the quality of life certainly for persons with disabilities, but also for people who reach an age where they need a pension plan. In the late 1990s there were cuts to the Canada pension plan.

As the critic for persons with disabilities, I spend a lot of time trying to figure out how we can get money back into the plan for the people it was meant for. What we are hearing now is not only is the plan not working, that it is broken at the operational level, but the money that should be going to vulnerable Canadians is going into some very unethical investments offshore, with tobacco, with arms and with privatization of hospitals.

What is the process that allowed this incredible reversal, this distortion of what the plan was all about to begin with?

Ms. Judy Wasylycia-Leis

Mr. Speaker, let me at the outset indicate to the member for Dartmouth that we in the House share the concerns that she raised about yet another horrific storm in Halifax. We send our best wishes to the people of Halifax who have had to endure a horrible year in terms of hurricanes, huge rainstorms and now an incredible snowstorm.

The question the member posed is very important as we struggle with an appropriate mechanism for ensuring investment of our pension funds for future generations. The member asked how in the world did it ever happen that we ended up with a process where not only is our money being gambled, but risks are being taken on the open market. The money is being invested in questionable activities where there is no ethical screening in place.

We have to go back to the agenda of the Prime Minister over the last decade. We have to understand that the changes in the Canada pension plan and the establishment of the investment board were a direct result of the present Prime Minister's agenda and his leadership, if we want to call it that. If we want to trace the origins of this questionable path in our history, we have to go right back to that individual.

Today, the Prime Minister continues to condone and encourage a revolving door of corporate lobbyists through his office. This raises the spectre of equally disconcerting programs and developments to occur in the future, as if we have learned nothing from the past.

The present Prime Minister and his Liberal colleagues are so determined to address the wishes of their corporate buddies and to cater to the business community that they have put profit at the top of the agenda. Profit is way ahead of anything to do with respect for people who need security in old age, people living with disabilities and women struggling just to survive. This is an indication of how far overboard the government has gone in terms of its commitment and its responsibilities to the people of Canada. The government puts corporate interests ahead of the public good.

The purpose of our debate today is to try to refocus the agenda, to try to convince the government to put some balance back in the equation. We may now have an investment board we are stuck with, despite our attempts to amend it and improve it and insert an ethical screening process, despite the NDP's efforts to broaden the representation on the investment board to include representatives from the labour movement and other experts in the Canadian community. We are stuck with this mechanism, but we have the opportunity to change it and improve it.

One way we can improve the investment board today is to say together with one voice that there shall be no investment in questionable activities, particularly pertaining to arms production, landmines or tobacco. That is where we can start. Let us instead invest in Canada, in communities, in the infrastructure requirements of this country and receive the double benefit of investing ethically and reaping the rewards of having invested in Canadian communities. In that way we could address the huge deficit in the infrastructure, the needs of our cities, the concerns of the farmers and the rural communities and the growing array of issues pertaining to families everywhere.

The government has a choice today. Let us in fact double our investment. Let us reap the rewards of investing in Canada on an ethical basis.

Mr. Randy White (Langley—Abbotsford, CPC)

Mr. Speaker, as a person who has invested throughout many years and who knows the market fairly well, I would suggest, I did think that I would like to talk to this. This motion is actually laughable in a way. I will speak to that in a moment.

What really bothers me is that we have found the Liberals in this nation stealing money, virtually, from the taxpayer and handing it out to their buddies and back to the Liberal Party. The country is in chaos over it and the NDP brings up a motion to talk about investing in values in terms of the Canada pension plan: some days I wonder where these guys come from. I guess that is why we threw them out in British Columbia and do not want them back. That kind of philosophy pervades their investment strategy as well as their management style. That is one of the things that gets them into trouble every time they get into government for a very short period.

I do want to talk about this motion. I have to read it for those people who are listening because it really is hard to believe that somebody would present this in the House of Commons.

It states that the NDP wants the House to have the Canada pension plan, and I quote:

...guided by...investment policies which would ensure that...[the] investments are socially responsible and do not support companies or enterprises that manufacture or trade in military arms and weapons, have records of poor labour practices, contribute to environmental degradation, or whose conduct, practices or activities are similarly contrary to Canadian values.

Has anyone in their life ever heard such convoluted logic in regard to an investment? I do not think I have ever heard it before and I have been investing, as I said, for years. I will give some examples of this.

Some time ago, I invested in a company that makes cigarettes. Somebody tried to talk me out of investing in that company just because of a moral value, as these folks are. I actually waffled on investing in that one. I do not know how many thousands I lost on it, but this company had done very well in the market; those people who buy cigarettes, smoke cigarettes. The company had made a great deal of money. Those people who invested in that company did well, and better luck to them.

There are other companies I have invested in and I have done reasonably well. They are companies that have had strikes. The NDP would not invest in companies like that. It wants social values entwined into the mix of economic values when investing in the marketplace.

For instance, for a company whose CEO believes in the traditional definition of marriage, the NDP members would probably see that as coming under “contrary to Canadian values” in their minds if they were to form a government. Could we imagine such a financial decision on the Canada pension plan, on which all of our seniors depend for growth, being made by somebody who said to never invest in that company because the CEO believes in the traditional definition of marriage? Or, heaven forbid, for a company whose CEO is pro-life, it is not within the certain mix that they would consider a social value they like as a government. They would not go with that either. It goes on and on.

This is the party that brought in Bill C-250, if members will recall, that basically was going to outlaw the Bible as a document of valueless means, in its members' minds. With regard to a company run by a Christian or a very successful company that was run on Christian values, would they say no, they could not invest in it because that would be contrary to their “Canadian values”, as they would see them? We cannot mix those kinds of things in this package of investments. The thought process that goes on with the NDP is really something to listen to.

The fact is that the Canada pension plan is the basis upon which people work in this country and retire to at the end of their days. The investment people who are managing the portfolio have to be able to look at companies as to how best they can earn income, make profit and supply that portion of profit to the value that they invest in the plan itself. They cannot look at the values of a particular political party or the labour practices of a company. In whose value is the labour practice perpetrated? A company that is non-union? Is that a bad labour practice in the NDP's mind? Would we not invest--

Mrs. Bev Desjarlais

If they're employing four year olds.

Mr. Randy White

There we go. That is from the NDP. Basically she says yes. There we go. If it is a non-union company then that would be out of the investment portfolio of the CPP.

Could we imagine those kinds of values being brought in on behalf of our seniors who are waiting to retire and waiting for a certain amount of money to come to them at age 60 or age 65? I just cannot believe that we are facing this kind of logic here in the House today when we have so many better things to do. Quite frankly, this is going nowhere. There is little interest in it.

What we have today is a major catastrophe facing this nation on the ethical values of a government. Yes, we have concern over the funding of the Canada pension plan, yet these people across the way in the Liberal government have basically stolen $100 million or better and thrown it out the door. If we wanted to really do something for the Canada pension plan, we would go over across the way and say to them that if they would just put a little more ethics in their own activities, we would have a lot of money for seniors and could put it in the right direction. To stand here today in the House and to speak to some kind of value process perceived by the NDP in the investment portfolio of the Canada pension plan, I just cannot believe it.

Mr. Speaker, I am splitting my time with the member for Red Deer.

I want to speak about a couple of other things. The greater choice of the future of individuals lies in their ability to invest on the way through life. I would like to say that our party is in favour of looking at better options for investment, not just CPP, but options that perhaps would give better tax options to those who have RRSPs, greater flexibility to an RRSP style of fund, greater potential for increased income in their later years as opposed to reliance on just the Canada pension plan.

As we move into the next decade when we are going to see the Liberals replaced, I think we are going to see more of government potentially looking at seniors and how best they can be treated in terms of the maximization of their income at a fixed income level. I can assure the House and all those who are listening that it does not include a Canada pension plan that is based on investing in companies that have labour practices suitable to the government, contribute to environmental degradation, or whose conduct, practices or activities are similarly contradictory to Canadian values.

I also have invested in a number of environmental organizations over the years. Yes, I think that was my choice because I liked the kinds of products and the kinds of things they were doing in the environment, but also because I looked at the future growth and potential for myself and my family. It was not solely based on the fact that “it is a green plan, therefore I will invest”. There are many companies that are environmentally friendly that could not make a buck if they were in business for 40 years.

I can only say that I am disappointed that this kind of motion has been put forward to the House with such a crisis facing this country. I am also disappointed that some NDP members, if not all of them, are out there saying that this is the kind of logic they would put forward for all of the people retiring in Canada and this is what they would do for them. This program would be broke in a week.

Mrs. Bev Desjarlais (Churchill, NDP)

Mr. Speaker, we see today why we have two opposing views and two different parties representing different values within the House of Commons. I will comment specifically on what my colleague from the Conservative Party said. Actually, I am really pleased that there is such a difference between our views on things.

He says it is important that we deal with the ethical issues of what the government is doing because of the unethical things it is doing, but if we are going to make a buck it is okay to take Canada pension dollars and invest in unethical practices. Let us take, for example, one of the companies that is being accused or that we are pretty sure received some dollars in an underhanded manner from the taxpayers of Canada. Does he think it is okay that pension fund dollars should then be invested in those companies? How ethical is that? Maybe that is what his principles and values are built on. Mine are a whole lot stronger.

He suggested that it is wrong to believe in investing in ethical funds. I would suggest that if we put this to a vote of Canadians, they would tell him wholeheartedly that they do not want to be part of that, that they do not invest in companies that use four year olds to make rugs. That is reality. This is not something the NDP has made up.

International labour groups around the world have specific guidelines that they work with. If the Conservatives could get their heads out of the sand and stop wanting profit at any cost, they could look at ways that we believe should happen where one can get the profit. We are not suggesting not making dollars off the pension plans. We just think there are better ways of doing it than ripping off young children, than ripping off women and children in the world who are abused and used just because of who they are, so that we have some values. I would suggest--

The hon. member for Langley—Abbotsford.

Mr. Randy White

Mr. Speaker, I must be missing something here. Is there any company in Canada that uses four year olds to make rugs? I am not aware of it. This kind of standard for investment in the Canada pension plan, if that the basis on which the NDP is working, I do not know. I do not know of any company in Canada that uses four year olds as child labour.

The fact of the matter is that the NDP has a disastrous record of investment in this country when it has briefly formed government. Its management style is based on issues like this, where the end result is that not only can it not make money, but it loses disastrous amounts of money and its spending efforts are usually worse than that.

Like I say, it can put this kind of motion to the House today, but there are big things facing this country right now and I wish the NDP would get along with the program and stop with this kind of philosophy where it thinks it is going to change the whole world of investment based on its values, because its values, quite frankly, within the operations and the investment portfolios of this nation, just do not fit.

Mrs. Bev Desjarlais

Mr. Speaker, there is no question that we would not fit under those types of guidelines, because we do believe that values and ethics count.

For the record, the Conservative member may not realize this. I was not talking just about Canada, because our pension plan invests outside of Canada. He may not have realized that. It does possibly invest in companies that would use four year olds. It does possibly do that and, quite frankly, there is nothing to stop it from doing that. Under his way of doing things, there should not be.

I use this as an analogy. Let us say that Canada has a law against cloning. However, our pension plan funds can then be invested in firms that are cloning somewhere else. What kinds of values or principles are those? Those are the values of the Conservative Party. They were the values of the Alliance Party. They were the values of the Reform Party. And it is time things changed, because they are not the values of Canadians.

Mr. Randy White

Mr. Speaker, as long as we do not clone the NDP, I guess we are okay here.

When I talk about investing, I do so on the a basis of knowledge. My concern is with this kind of irrational process that is being presented here today. I do believe I am right when I say, for instance, the CEO and executive staff of a company believe in the traditional definition of marriage, then in their mind the company should not really invest in something that is contrary to their values, if they were a government, that is an absurd point of view.

There we go again. They are acknowledging that I am right, basically. The investment portfolio business is a complex one and a needy one. All I could ask is that the government try to spend its money a lot more wisely than it has in the past and perhaps it could put a few of these dollars into the Canada pension plan.

Mr. Bob Mills (Red Deer, CPC)

Mr. Speaker, I, like the previous member, wonder why we are debating a motion like this when families are going bankrupt because of the agriculture crisis and when we have so many international problems with which we could be dealing.

I would like to put a different tone on this and talk about what we might do with the Canada pension plan as opposed to the motion itself.

We get kind of tired of the NDP's rhetoric that business is bad, Americans are bad, banks are bad, everybody is bad except them. It is interesting that it talks the line but basically it wants to share everybody else's wealth except for itself. It is sort of like the leader of that party coming for a free lunch every day when he has not even been elected to this place. The NDP members are on this gravy train and want the free lunch, which to me seems to be NDP philosophy.

They pride themselves on being the representatives who care about everything but let us look at their examples in B.C., in Saskatchewan and in Ontario for four years. Fortunately, however, Ontario was smart enough not to re-elect them ever again. It has been a disaster. I myself am a refugee from Saskatchewan. I graduated from university and got out under the wire at night to get away from that sort of socialist sharing of someone else's wealth by a party that has no concept of how to run a government or anything about it.

We have a culture of corruption going on across the way and one would think that would be what we would be talking about today.

CPP, as we all know, started in 1966. That was the period of time when all of us were told that government would take care of us from birth until death, that it would take care of everything: health care, pensions, jobs, funerals, everything. Much of society bought into that.

When the Canada pension plan was designed in 1966 we were told that the government would only have to collect about 5.5% of our income to take care of our pensions for the rest of our lives. The demographics of 1966 would have worked but in 1967 the two designers of the plan said that it would not work. They said that the government had made a mistake, that its calculations were wrong and that its modelling was wrong. They said that it had a demographic problem coming and that in 30 years this thing would go bankrupt.

Does anyone know what happened to those two economists? They were both fired. One of them now lives in Winnipeg and is quite willing to testify before the House and its committees at any time about what a horrible mistake the government made in the design of the Canada pension plan.

By 1988, exactly what the economists said would happen, happened and it was bankrupt. At that point we had to raise it over the next five years to 9.9%. In another 10 or 15 years, by 2015, we will have to raise it to 14.5% to make it sustainable. We are talking about taking 14.5% of every young person's salary and putting it into a pension for them many years down the road. The reason we have to do that is because of our demographics and because of all those seniors.

I put to the House that at that point in time young people will be saying “Whoa, we are not going to keep paying like this. If it is 14.5% now, where are you going and will there be anything there for us?” The whole question becomes whether there will be.

If we were to talk to businesses we would find out that they cannot afford to put in that kind of money and still hire staff. Ninety per cent of this country is run by small businesses. A small business cannot afford to put aside that much extra for payroll deductions so it just does not expand. It does not hire those extra people because it cannot afford those payroll deductions.

As a result, not only are our young people threatened with a 15% deduction but we threaten them with the potential of fewer and fewer jobs because businesses just cannot make it with those deductions.

It was interesting when I went out at about five in the morning to talk to about 150 oil guys who had just come off their rig. Their boss had set up coffee and donuts for them so they could listen to a politician for 15 minutes. I told them all that I knew they had just got paid and that I wanted them to look at the deductions on their pay stubs. I then asked them to ask themselves what they were receiving for each of the deductions.

I then asked them to stop at the CPP deduction so we could talk about it. Most of the men in the room were under 30 so I ask them if they thought the CPP would be there for them at 65. I also asked them if they were prepared to pay all that money. I told them that if they were to invest that money privately they could have a lot of money down the road in some 35 years from now.

Following up on that, I decided to take a trip to Chile and take a look at its pension plan. I started in Santiago and visited its bureaucracy which privatized, I think, in 1967 or 1968. It offered its people the option of a government run plan or a private plan. Everybody under 45 at that time opted for the private plan and everybody over 45 stayed on the government plan. That makes sense because obviously the people at 45 did not have time enough to invest and so they stayed on the government plan.

I spent three weeks looking at that but I do not have time to give all the details. However today over 90% of Chileans are on the private plan. The government plan still exists and is still administered and regulated by government but it is also a private plan.

It was compulsory that 10% of one's salary went into the pension plan. About six or seven years ago people were given the option of putting another 10% into the plan, which was 20% of their salary, and it was tax deductible. It was a way of saving money for retirement and the people themselves did it.

Under the plan they have plans A, B, C or D. It is set up by the government and each one contains a portfolio of investments. Plan A is very conservative. It is all of the blue chip stocks. Plan D is much more adventuresome and has a much greater chance of winning or losing. People choose either plan A, B, C or D and every three months they receive a statement.

I thought it sounded pretty good. I did a rather unscientific poll. I brought along a translator and decided to find out what people thought of their pension plan. I went to markets, to wealthy segments of Santiago, to a poor section and to a slum section. I told the people that I was a member of Parliament from Canada and that I wanted to know about their pension plan. They looked at me as if I were crazy but it was interesting to hear what they had to say. It did not matter their socio-economic position, people told me to wait a minute and ran into their houses. They came back out with their cards. I learned pretty quickly what the card was. It was their investment card. Every three months they received a statement showing that they had invested x number of dollars in shares under whichever category they had chosen and then it shows how their stock is doing. One guy told me that he bought his groceries at such and such a chain because he had those shares.

That has provided a $25 billion capital fund within the country that is invested in Chilean businesses and it prevents them from having to borrow money externally. It helps the country and the people. They are proud of it. They have a pension plan that is secure and it is theirs.

With the Canada pension plan we throw money into the well and it is for people who are retiring today. What about the young people sitting here? Where is their money going? Will it be there for them?

Mrs. Bev Desjarlais (Churchill, NDP)

Mr. Speaker, I do not know, but maybe grey matter does not work the same way in people.

I was in Chile as well. When I was there, people asked us about our public pension plan because their plan was not working. Money was being invested through private companies and those companies made the money. There was not enough money to provide pension plans for Chilean workers.

Who should Canadians believe? Should they believe the Conservatives, Alliance, Reformers who have had their heads in the sand and will not accept that an investment into Canadian infrastructure and Canadian municipalities is a sound investment that can be profitable and support a pension plan and that an investment into values, principles and companies is a sound investment? The Alliance, Reform, Conservatives, for the life of them, cannot accept the public working together to support the public and their fellow Canadians, and it is something that is wrong. I leave it to Canadians.

Mr. Bob Mills

Mr. Speaker, obviously there is a philosophical gap here. I guess what the member does not understand is fact that competition makes things happen. She does not understand the fact that free enterprise makes things happen. She does not understand that having healthy competition and free enterprise keeps the culture of corruption from taking over, where bureaucracy upon bureaucracy is running things. I do not know what she is talking about.

When a business hires someone, it must match that pension contribution. If the individual puts 10% into the pension plan, the business puts in 10%. That 20% is under the control of the individuals. It is their money to be invested. However, they cannot take it out until they are 65. I have no idea what she is talking about.

Obviously, if we only talk to union heads in Chile, we may well get that message, but we certainly do not get it from the people on the street, and they are really the ones who matter.

Hon. John Harvard (Parliamentary Secretary to the Minister of International Trade, Lib.)

Mr. Speaker, I have a question for the member for Red Deer, the home of women's curling this week. I saw the good member on television trying to raise money for the Sandra Schmirler Foundation, and I hope all went well.

Maybe I was not listening too closely to the member. He seemed to suggest, coming out of the conversation he had with some of the oil workers in his province of Alberta, that business, regardless of its size I suppose, really had no responsibility when it came to providing pensions for its employees. I just want to make sure because I would have thought there could be competitive questions, and it may be difficult for a lot of companies. I think he implied that if businesses do not want to provide pension benefits for whatever reason, it should be their business.

We do not take that attitude with respect to safety standards or pollution control standards. We ask businesses to provide and meet certain standards. I would have thought the same thing would apply to the question of pension benefits. People who have worked with companies for a good many years deserve some kind of standard of living in retirement. Is the member suggesting no responsibility at all when it comes to pensions?

Mr. Bob Mills

Mr. Speaker, I thank the member for allowing me to clarify this. I also want to let him know that we raised over $100,000 for the Sandra Schmirler Foundation for sick children. It went extremely well. Those five hours were probably the best five hours I spent on the weekend.

In answer to his question, companies must and should want to provide pensions for their employees. That should not be an option. I did not in any way suggest it should be optional. It must be there. Companies should always provide encouragement to individuals to do that. I certainly did not want to leave that impression.

People should have the right to control that money. The government can run it if it wants to, but if we find out it can be done better and in a different way, we should at least examine that. I suggested Chile, Great Britain and the U.S. as examples. We should encourage pensions even more than we do.

Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)

Mr. Speaker, I would like to begin by congratulating the hon. member for Winnipeg Centre. I believe the motion he has introduced will enable us to have a healthy debate, because it deals with issues we absolutely must discuss, as objectively as possible. It is a matter of great importance for each of us. One day, we ourselves and our children and grandchildren will all benefit from the Canada pension plan.

At the same time, it needs to be pointed out that not everything is bleak; not everything is negative. In fact, before the Canada Pension Plan Investment Board was established in 1998, the investment policy stated that all available funds after the payment of pensions to beneficiaries and of the system's administrative costs had to be invested in provincial bonds, at the prevailing federal interest rate.

The legislation that created the board in 1998 certainly changed things for the better. At the same time, many other steps were taken and it is vital that they be pointed out. As I said, not everything is negative; we are not starting from scratch.

Legislation on corporate responsibility was enacted on June 12, 2003 and a corporate ethics code was also adopted. We created a national contact point for Canada, an interdepartmental federal committee comprised of representatives of Foreign Affairs and International Trade, Industry, Human Resources Development, Environment, Natural Resources, Finance and the Canadian International Development Agency, mandated to raise awareness of the OECD guidelines for multinational enterprises and to ensure their implementation.

We developed an information kit on the production of reports on sustainable development. This was a joint effort of Industry, Environment and Foreign Affairs and International Trade with a view to providing information and guidelines for the production of these reports.

What the government attempted to do with the 1998 reform was to make the Canadian pension system self-sustaining, which it had ceased to be. This became a government priority. In fact, a whole series of well thought out changes were introduced with a view to bolstering the plan's financing, improve its investment practices, and reining in the increase in its costs.

The changes effected in 1997 brought in the following changes: better performing investments; changes to the calculation of certain benefits in order to control spiralling costs; regular reports on the CPP for Canadians; and contribution rates limited to no more than 10% for future generations.

In 1997, the chief actuary of the plan informed us that, if changes were not made to the plan and the way it was financed, our children and grandchildren would be paying over 14.2% of all pensionable earnings by 2030, divided 50-50 between employer and employee, for pensions. Today the figure is only 9.9%.

So there have been some salutary and positive reforms. The Canada pension plan of today is certainly far better balanced and far more stable than the one in place prior to the reform of 1997 and the legislation of 1998.

However, much needs to be looked at again. I believe it is really worthy of my colleague from Winnipeg Centre to have brought this subject forward.

As we look at the objectives of the Canada Pension Plan Investment Board under the act, we see that its objective No. 2 is to invest its assets with a view to achieving a maximum rate of return without undue risk or loss. If we look at the principles, the CPP Investment Board statutory mandate and fiduciary duty are based exclusively on investment considerations.

The CPP Investment Board believes that responsible corporate behaviour in such matters as the environment, employee practices, stakeholder relations, human rights, respect for domestic and international laws and ethical conduct generally contribute to enhanced long term investment returns. This is where I agree with my colleague from Winnipeg Centre that the objectives and the principles have to be looked at again. It has to be seen in a far more proactive and precise way than it is today.

To rely on the basic principle that we need to achieve a maximum rate of return without undue risk to loss and that our statutory mandate is based exclusively on investment considerations, belies the intention of using our corporate behaviour to decide on the criteria of the investment. Corporate behaviour can be very elastic and subjective. To say that responsible corporate behaviour in such matters as the environment, employee practices, stakeholder relations, human rights, respect for domestic and international laws and ethical conduct should be our reliance to decide on investment is very deficient.

I really believe the government should look at the whole aspect of both the principles and the objectives to ensure that at least the objectives and principles fit in with the gist of our policies and values as a government and as a country.

I could give examples. We have endorsed, with a large majority, the Kyoto protocol after much debate. The Kyoto protocol has certain obligations for us internationally to reduce our gas emissions. Yet, I would think that any company in the fossil fuel industry could say that it respects complete and utter corporate behaviour in matters of the environment, employee practices, stakeholder relations, human rights, respect for domestic and international laws and ethical conduct. It is just a matter of degree. It is a matter of really deciding what our basic value system is.

It would seem to me that it would not be asking too much for the principles of the CPP Investment Board and its objectives to make sure that whatever basic policies and criteria the government adopts--I think of examples such as the landmines convention-- that certainly language can be found to match those objectives and principles to what the government believes fundamentally to be its paramount policies and values.

In its principle No. 3, the CPP Investment Board believes that social investing means different things to different people and that the CPP Investment Board cannot reflect the divergent religious, economic, political, social and personal views of millions of Canadians in its investment decisions.

The same argument could be made about a government, that a government cannot reflect the divergent religious, economic, political, social and personal views of millions of Canadians in its legislation.

This is a cop-out. It is an excuse for complete paralysis in action. It seems to me that the government, through its agencies, must go forward and establish clear criteria so that the board of the CPP is well aware of the criteria that we set as a government and as a country. It should respect the basic policies, ideals and values that this country and this government represent.

Surely there is a possibility of broadening the objectives, making them far more precise and far tighter than they are today. Surely there is a possibility to add criteria that not only do not offend the various segments of the population, but at the same time reflect values that we all share as Canadians regardless of religion, class or creed.

I welcome the idea of the member for Winnipeg Centre who brought forward the motion to force this debate along. To say that what we have today is the perfect solution and can never be changed, amended or improved is to say that the government must be static regardless of the evolution of society.

When members of the official opposition say that it is impossible to qualify investments in terms of values, I think that is totally wrong. Society is evolving today in whatever sector to reflect the common values that we hold as a democratic society. Surely among the members here there is enough talent, conviction and commitment to arrive at wording which the Canada pension plan board could use to make our investments far more in tune with those same common values that we share.

Right now I believe the principles and objectives are too loose. They are far too open to subjectivity. They are far too open to the possibility that we should invest in corporations that do not reflect our policies and values.

I welcome this debate. I hope that instead of pouring cold water on the idea of the member for Winnipeg Centre that we will use it as a stepping stone for a constructive debate. This debate will help all the beneficiaries of the Canada pension plan now and in the future.

Mr. Bernard Bigras (Rosemont—Petite-Patrie, BQ)

Mr. Speaker, I must say, first, that I greatly appreciated the speech by my hon. colleague from Lac-Saint-Louis. I would like to say that I share his point of view, particularly with respect to the importance we should attach to the fact that the pension and retirement funds, and the associated investments, must meet certain criteria of responsibility and require more socially acceptable behaviour from the businesses that benefit from them.

Additionally, I believe there should be selection criteria based on social responsibility. This could even go so far as to exclude certain companies automatically if they do not meet certain standards.

The hon. member for Lac-Saint-Louis touched on an important issue, the Kyoto protocol. The Parliament of Canada has ratified this protocol.

I would like to ask my colleague a question. In the criteria for managers of pension funds, should we not, in fact, place a high value on this environmental responsibility? For example, to the extent that a company decided to respect the Kyoto protocol, it could receive some benefit in terms of investments by these managers. Conversely, if businesses refused to comply with the Kyoto requirements, they could be automatically excluded from the investments and decisions of the pension fund managers.

Mr. Clifford Lincoln

Mr. Speaker, I am convinced that, in today's world where so many people know so much about investments, there are ways to reconcile the issue of maximum rate of return with very specific social responsibility criteria.

In fact, I fully agree with my colleague that it would be completely paradoxical for us, on the one hand, to implement certain environmental or health care policies, such as anti-smoking measures, while investing in companies trying in fact to avoid their national and international responsibilities or get around government policies.

I look at today's criteria and objectives and I wonder if these objectives are specific enough, for example, to prevent a major cigarette manufacturer from being selected as an investor by the Canada Pension Plan Investment Board. I am not too sure about this.

Consequently, I fully agree with my colleague that, at all costs, we must establish precise criteria to avoid falling into a paradoxical situation, such as supporting certain policies, as a Parliament and a democracy and, at the same time, trampling on these same principles in the CPP. That would be illogical.

It seems to me there are ways to amplify, identify and improve the current objectives and principles so they are much more restrictive and specific.

Mr. Howard Hilstrom (Selkirk—Interlake, CPC)

Mr. Speaker, my question for the member involves his statement that he believes Liberal values are synonymous with Canadian values. Nothing could be further from the truth. Some of the things the Liberals believe in are what some Canadians believe in. However, Canadians are not a group that believes everything the Liberals say are Canadian values are actually that.

The issues we have before the House, everything from the scandal to environmental issues, the member certainly cannot agree with. In the area of the investments by the Canada pension plan, he does not agree that the money should be going there. He seemed to be quite clear on that.

With all the wrong things and the bad judgment that is being used on the Canada pension plan by the Liberal government, how can he remain a member of the Liberal caucus?