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.
Subtopic: Pension Benefits Standards Act, 1985