FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 12, 1998

• 1535

[English]

The Chairman (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call the meeting to order. As you know, the order of the day is Bill S-3, an act to amend the Pension Benefits Standards Act, 1985 and the Office of the Superintendent of Financial Institutions Act.

This afternoon we have the pleasure of having with us representatives from the Canadian Chamber of Commerce: the president, Mr. Timothy Reid, and the assistant vice-president, actuarial services, Canadian Pacific, Monsieur Jean-Louis Massé.

Welcome. As you know already, you have approximately 10 to 15 minutes to make your introductory remarks, and thereafter we will engage in a question-and-answer session.

[Translation]

Mr. Timothy Reid (President, Canadian Chamber of Commerce): Thank you, Mr. Chairman.

[English]

and members of the committee. With me is Jean-Louis Massé, who chaired our task force on pension regulation and who is the assistant vice-president of actuarial services at Canadian Pacific Railway. His day-to-day job is to administer a very large pension plan.

I'll say a few words about the Chamber of Commerce.

[Translation]

The Canadian Chamber of Commerce is the most important and most representative commercial association in the country. With our network of 500 local chambers and offices, we have partners in all federal constituencies. We have a total membership of 170,000 with companies of all sizes active in all sectors of the economy throughout the country.

[English]

Mr. Chairman, I should say at the outset that the Canadian Chamber of Commerce is generally supportive of Bill S-3 and has a great deal of respect for the Office of the Superintendent of Financial Institutions as a federal regulatory agency. This legislation proposes several amendments to the Pension Benefits Standards Act that are extremely important to our federally regulated members across this country. Specifically, the move from full, active regulation towards risk-related regulatory review, which targets pension plans in financial difficulty, is a positive step towards defined benefit pension regulation.

Nevertheless we have some serious concerns over the proposal outlined in proposed section 33.2 of Bill S-3, which would give the Superintendent of Financial Institutions power to:

bring against the administrator, employer or any other person any cause of action that a member, former member or any other person entitled to a benefit or refund from the plan could bring.

Our arguments are outlined in the letter we sent to you, copies of which are available to all members of the committee. It also notes the members of the task force we put together.

At this point I would turn to Mr. Massé, who will provide this committee with our detailed views on the legislation and specifically on the area in which we have grave concerns. Of course at the end of our presentation we'd be very pleased to attempt to answer any questions members of the committee have.

Mr. Jean-Louis Massé (Assistant Vice-President, Actuarial Services, Canadian Pacific Railway; Chairman, Task Force on Pension Regulation, Canadian Chamber of Commerce): Thank you.

Mr. Chairman, I'll express myself in the language most easy for me for this particular task. I may switch periodically if I can't find the right word.

First I gather you all have a copy of this three-page letter. As a preamble for you to appreciate how this came about, Bill C-85 was presented last spring, as you all know, and then Bill S-3 was introduced in the Senate last fall. Basically it's a mirror copy of Bill C-85.

• 1540

Many of us subject to the Pension Benefits Standards Act have made representations in writing and some orally commenting on either of these two bills. I for one was under the impression all along that Bill C-85 and Bill S-3 were the same thing, and it came as a surprise to some of us only two or three weeks ago—actually as a result of a meeting certain plan sponsors had with OSFI—that there was one big difference between Bill C-85 and Bill S-3: proposed section 33.2. So in a very limited time we gathered as best we could some plan sponsors to see whether there was something that some of us had missed, and it seemed most of us had missed it.

The purpose of this presentation is to focus on one issue: proposed section 33.2. We don't want to repeat other comments we've made in writing at other times, because we don't want to dilute our subject. This is too important for us.

As Mr. Reid said, proposed section 33.2 says the superintendent may take any action that a member or former member may bring against a plan sponsor or an employer. Proposed subsection 33.2(2) makes proposed subsection 33.2(1) apply not only for future events but also for past events as well.

We at the Canadian Chamber oppose proposed section 33.2, basically because it hasn't been studied and discussed, as other segments of Bill S-3 and Bill C-85, its earlier version, have been. This is something that is coming in at the last minute. We're not aware of discussions that took place in the industry on this very point, and it is a fundamental point. It requires more analysis and discussions with interested parties. Thus our position is it should not be adopted; it should be deleted in its entirety for the time being.

We go on in our letter to list a number of reasons it should be deleted.

First, we're not aware of any precedents of this nature. There are no similar rights in other pension laws in various provinces in Canada, and we don't see why at this time members under federal jurisdiction should be treated any differently from their confreres at the provincial level.

Generally speaking, many of us, if not most of us, agree that there are a lot of good things in Bill S-3. It's a change of tack from OSFI and it's applauded by the industry, from what we can gather, and we're the first ones. We understand the new powers are needed for the superintendent to fulfil his new role adequately, but the powers in proposed section 33.2 go beyond those powers needed at this time for the superintendent to perform his regulatory role.

Thirdly, proposed section 33.2 would be a means for the superintendent to offer his services, be they financial or knowledge or time, to third parties in legal actions against plan administrators, employers, or any other person, including advisers and consultants. We see no evidence for this to be so. As I said earlier, this subject was not covered in prior discussion papers in 1996. Some papers date back as much as a couple of years, and there were discussions orally before that.

• 1545

As I mentioned earlier, this proposed section was not in Bill C-85 a year ago. The inclusion of this proposed section would create a situation where OSFI would be in a bit of a conflict. While they're expected to treat their public on an even-handed basis, they would now be taking sides, one against the other.

This is just to list a few reasons that it is premature to adopt proposed section 33.2 at this time, not to mention that it is retroactive and it's very encompassing. It addresses any cause of action. It goes beyond actions related to this specific piece of legislation. If you read this, verbally—and I'm not a lawyer—it could in theory mean that actions related to human rights issues or labour issues could be brought forward to OSFI, because this proposed section 33.2 talks about any cause of action being brought forward.

All that to say this is quite an extraordinary proposed section, in our view, and it requires further analysis. We strongly urge this committee to reject it.

Thank you for your attention.

The Chairman: Thank you very much, Mr. Massé.

We'll start with Mr. Ritz.

Mr. Gerry Ritz (Battlefords—Lloydminster, Ref.): I have nothing at this time.

The Chairman: Mr. Loubier.

[Translation]

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Since the deputy superintendent general is appearing here today, couldn't we ask him to explain the difference between Bill C-85 as it existed before the elections were called and the bill we have here as far as this possibility of bringing action is concerned?

It might be a good idea for us to have an explanation. What do you think as a witness? We were wondering, Mr. Le Pan, why there is this difference in relation to the previous bill concerning the possibility of bringing action.

[English]

The Chairman: Mr. Le Pan.

Mr. Nicholas Le Pan (Deputy Superintendent, Operations, Office of the Superintendent of Financial Institutions): Since Bill C-85 was introduced, we have had a unique experience under the PBSA.

I talked this morning about the new mandate of our office in Bill S-3 to protect pension plan members but also a recognition that pension plans can be in financial difficulty that will essentially cause them to have to do some difficult things. We have had two plans that have been in that situation. In the financial institution world that would have been called a failure, but it's not a failure in technical terms, if you will, in the pension world. Assets were significantly less than liabilities. Benefits had to be significantly restructured. There may well be problems with the quality and adequacy of advice that was given to these plans by independent professionals and that was accepted by their administrators.

OSFI now has the authority under the PBSA to bring Criminal Code actions for fraud, for example, directly. It has had that authority for a long time. Criminal Code actions may be appropriate in certain cases, but ultimately, if there's a case, as I said this morning in my testimony, of inadequate duty of care or negligence or whatever, a civil action to obtain damages would be in fact of more benefit to pension plan members than would a Criminal Code action.

In addition, Mr. Loubier, you're familiar, from going through various pieces of legislation, with the financial institutions world. In the case of a failure of a financial institution, a liquidator is appointed. Sometimes in the past the superintendent would be the liquidator. Under the former statutes, the superintendent could be the liquidator.

• 1550

Traditionally in a failed institution one of the first jobs of a liquidator would be to look to see whether there is a potential case that could be made against auditors, other professional advisers, or other people who may have been involved in the plan to recover damages in order to increase the benefits to depositors or policyholders.

There is no equivalent person in the system for a pension plan. There is no equivalent of a liquidator who could consider and bring this kind of civil action. That's not how pension plans are terminated. That's not what happens with respect to a pension plan that is in financial difficulty.

Not all plans that are in financial difficulty actually get terminated. Some may be significantly restructured with very material reductions in benefits.

Administrators may be in a conflict of interest position. They accepted the advice of, in my example, a person who may not have actually exercised a reasonable duty of care to value the plan. Administrators accepted that advice. They may well have a conflict of interest in trying to bring an action against that independent third party, for example, because they may ultimately have to face some liability themselves.

The superintendent in our system is really the only person other than the plan members who could potentially bring those kinds of civil actions in those types of circumstances.

This is an exceptional situation; I totally agree with that. Our expectation is that we would use it very narrowly, but I can't rule out us using it. In fact, it may be to the benefit of plan members, in our role of protecting them, to provide increased recoveries.

We do not, as I said this morning, examine every pension plan every year. We're now examining roughly 30 to 40 plans a year out of 1,100. Not all the 1,100 are material. Many have a number of single-employee top-hat pension plans created for Income Tax Act purposes, but we have, say, 600 to 700 material pension plans with more than just one or two members in them, just to pick an example.

We don't examine every plan every year. I don't think it would be appropriate for us to do so. In fact, the amount of examination resources we put on this—and we are, as I said earlier, already a relatively high-cost regulator in the overall scheme of things—is not going to end up the way it is in the FI world, where we examine roughly every institution pretty much every year.

We might well be in that position three or five years from now where a plan “fails”—I'll use that word in concept—and where we think there's been a material problem related to the operation of the plan, and where we think there is a significant chance that damages could be awarded. It may be with respect to a practice that happened over a period of time. Quite frankly, I don't in that situation want to have to tell the pensioners that there's a whole issue about whether or not the action started before today or after today. That won't be a very good answer for them in that situation.

This morning I talked about, “What about members?” Our preferred position would be for members to bring these types of actions, because ultimately they are a very important part of the governance process, and we should be very careful about standing in the place of members.

We are certainly aware of situations in which members, one way or another—for example, lack of organization, lack of information—are not actually supervising the plan. I'll go back to my liquidator example. They don't have the kind of information a liquidator who came in for a failed institution would have after the fact. They're not in that position. The only body who's close to being in that position is us.

Members may not have information. They may not have the ability or the organization willingness. They may be afraid of implications that would exist if they brought these types of actions. Those are the kinds of reasons that led to this provision.

Quite frankly, I think if we hadn't been through the cases of a couple of failed plans recently and started to focus on the implications of that, things would be a little different, but that's the business we're in as a regulator, and this is the type of tool, if we're going to exercise a mandate to protect pensioners, we think we need.

That responds at least in general to some of those types of questions. I'm happy to respond more, either now or when we come to clause-by-clause.

Mr. Yvan Loubier: Thank you.

[Translation]

Mr. Massé and Mr. Reid, does this kind of argument convince you of the merits of this clause. It strikes me as very logical. There may be an effect that I've not yet grasped.

• 1555

Mr. Jean-Louis Massé: It implies that those who have a reason to go to court cannot afford to do it on their own, and that is not our opinion. That is not in keeping with the kind of situations we see nowadays. We read in articles specialized in retirement that there are more and more people taking their employer or pension fund manager to court.

There's also the possibility of instituting a class action. It is possible to exchange information, to give full information to those making complaint and, without knowing the details of a particular case, to initiate class actions.

There are also lawyers who are willing to work on commission, who don't charge anything to take your case to court, and if they win, they take a percentage of the award.

[English]

Also, one more thing I'd like to say is that this proposed section 33.2, in our view, is not substantiated by the powers that the superintendent is given under the act and is not substantiated by the objects of the office of the superintendent that is given under the Office of the Superintendent of Financial Institutions Act either. There are inconsistencies in these laws.

I would add that maybe there's a sad case on hand—I don't know the details—but is that a reason to open the door wide open and create more sad cases? Two wrongs don't make a right.

[Translation]

Mr. Yvan Loubier: Mr. Massé, if I've understood Mr. Le Pan's arguments correctly, there have been some recent cases. It's a matter of finding one somewhere to determine whether it's possible that others will occur in the future. According to Mr. Le Pan, this bill will have the effect of preventing such cases from coming up in the future. And if I've understood Mr. Le Pan correctly, this measure would be used parsimoniously, it would by no means be given a wide application but would be limited to marginal cases in the future. Reference was made to two of them.

What is your particular apprehension in this respect? This clause would appear to traumatize you although this remedy is in the hands of the Superintendent General of Financial Institutions. I don't think that this office can be considered an irresponsible one likely to threaten the financial integrity of one of your members.

Mr. Jean-Louis Massé: I come back to my first point. Our greatest fear is the unknown. So far this clause has not been studied by those concerned. It is something new and is quite unasked for. At the present time everyone has a great deal of respect for OSFI. It is the best-reputed pension supervision office in Canada.

But we are all human and subject to pressure. In this case, it would be political pressure. There's nothing to say that in the future there won't be any... If there are no parameters set up to control the application of this clause, nothing guarantees that we will not find ourselves faced with zealous officials like those we find in other governments in this country.

Mr. Yvan Loubier: It's a good point.

[English]

The Chairman: Mr. Le Pan, would you like to...?

Mr. Nicholas Le Pan: On that specific point, the superintendent has specific powers under the OSFI Act and under the other acts he administers, including the PBSA. Our mandate, according to Bill S-3, will be altered to protect policyholders from undue loss in the ways I've described this morning.

The superintendent has a pretty independent existence in our system. His is not an at-pleasure appointment, for example. As for the notion that the superintendent is going to use the kinds of powers he has under the influences that have been raised here, I really find that quite difficult to accept.

• 1600

I've been involved with financial services regulation since 1987, both from the perspective of the Department of Finance and more recently the superintendent's office. I've been involved from both of those sides in such notable events as Confederation Life, Standard Trust, and other failures of trust companies in very complicated and difficult situations. I've seen no evidence over that almost 10-year period of the kind of thing that's referred to.

I think essentially, with the kind of system we have in which the superintendent has independent authority and accountability, not only to ministers but also to other bodies, the superintendent is prepared to show up here any day to explain what he has and hasn't done within the limits of the confidentiality that's rightly in the statutes.

I think that to limit the superintendent's powers because of fears about the kind of influence that has just been discussed would be really inappropriate. I don't think the kind of comment about how we've operated in the past or how the system has operated in the past to deal with very specific and difficult situations is appropriate, given the history.

Thank you.

The Chairman: Mr. Reid.

Mr. Timothy Reid: Mr. Chairman, I was trying to get at some basic principles here. Mr. Le Pan has said that this legislation is warranted because of a couple of cases. I've always been taught that you shouldn't make general laws on the basis of a few cases. It's a bad principle. Second, there's something called the rule of law, as opposed to the rule of men, no matter how good-intentioned those men may be, and we're saying this is a bad piece of law.

With respect to the case issue, Mr. Chairman, certainly since 1987, I'm not aware of situations in which we have had the equivalent of a failure in the pension plan area. Maybe three and a half years ago, because we thought there were stresses and strains in the system increasingly because of things I've described this morning, the possibility of having more financial difficulties seemed to be more likely. We didn't predict that there were going to be one, two, five, none, or whatever, but we thought it was much more likely that there would be these kinds of difficulties. As I explained this morning, that's fundamentally what led to the provisions of this bill. We thought the supervisory powers and remedies and so forth were inadequate.

As we have dealt with a couple of so-called failure situations, I think we have had much more hands-on experience with what's necessary to perform the kind of mandate that is in this bill to protect pensioners from undue losses.

So it's not a case of one or two cases in terms of what's driving this. Certainly, the experience with those cases, which we could see potentially would be repeated, has led us to think through who has what roles.

In particular, as for this issue that there is no one who is equivalent to a liquidator in a financial institution who would normally perform the kinds of functions we're talking about here to assess whether there's some right of action to recover damages from other parties, that role doesn't exist in our system.

I don't think it's really the case of one or two cases driving it. It's a case of experience evolving, as we've seen, with the kinds of difficulties that can happen and what we think is necessary in order to meet the kind of mandate we think is appropriate here.

I do appreciate that, and certainly many other provisions here are intended to get us out of the business of dealing with issues that are tangential to a main mandate of safety and soundness. The idea of getting in the middle of every last dispute, I think, is clearly one that's not there. We thought about whether there were possible ways of limiting this and so forth, but it gets very hard to limit it up front. As a practical matter, what we're going to use it for is what I described and for the reasons I described.

I don't really have much more to add to the testimony.

The Chairman: Thank you.

Mr. Reid, followed by Mr. Massé.

• 1605

Mr. Timothy Reid: We've just heard the statement that based on potential situations, a hypothetical future, and the possibility of financial difficulties we're bringing in a sledgehammer piece of legislation. That's just a bad way to do business in government.

The Chairman: Mr. Massé.

Mr. Jean-Louis Massé: There are two things. First, proposed section 33.1 already gives a lot of power to the superintendent to bring people to the Federal Court on any breach of this piece of legislation.

Second, I would like to repeat my first comment. As an industry we have not discussed this section. Surely OSFI has a lot of experience and has fully thought out Bill C-85. It is not appropriate that it comes as a surprise to most of us, if not all of us, with one important piece of legislation that is changing the nature of the beast without discussion with the industry.

The Chairman: Thank you, Mr. Massé.

Mr. Le Pan.

Mr. Nicholas Le Pan: Proposed section 33.1 essentially allows us to enforce compliance with the statute. It does not allow us to seek the possibility of damages—financial restitution and financial penalties—against an actuary, for example, who has not lived up to their duties or professional standards and may well have substantial resources, either themselves or in their firm or with insurance policies, as auditors and so forth have done in failed financial institutions, that could be made available if negligence could be proved in order to increase the recoveries to pensioners in the failed plan. There's a difference between enforcing compliance with the statute and trying to get some financial restitution. That's what this is all about.

The Chairman: Thank you, Mr. Le Pan.

Mr. Reid.

Mr. Timothy Reid: Mr. Le Pan mentioned that there seems to be a function of liquidators missing in this whole process. Just to comment on Mr. Massé's comment, if the function missing in this process is material and the problem is significant, maybe there are alternative ways of handling that missing function or inadequate function. It's precisely the point we're making. There hasn't been discussion and there hasn't been a clear articulation of what the problem is, in terms of the way Mr. Le Pan has discussed it this morning, with people who are managing the pension funds that would be affected. That's just not the way to do government business.

Mr. Nicholas Le Pan: On the issue of potential future, we would not rule out there being the equivalent of problems, such as we've seen in the past recently, happening in the future. In fact, with some of the financial condition of plants and pressures and so forth, I would not rule that out at all. Precisely part of our job is to try to anticipate and provide ourselves the kinds of tools that are necessary. Certainly the notion of creating a liquidator function for all plans is overkill.

The Chairman: Mr. Reid.

Mr. Timothy Reid: This overkill is going into the laws of Canada, and that's overkill.

The Chairman: Mr. Loubier, do you have another question?

[Translation]

Mr. Yvan Loubier: I still haven't quite grasped, Mr. Reid and Mr. Massé, what exactly your serious apprehension is, other than fear of the unknown. When we are dealing with a new bill with new provisions that have never been applied in the past—the purpose of an Act is to improve things, I hope—there's always an element of the unknown but I've never seen the Chamber of Commerce come to present as its sole argument the fact that this is too heavy-handed.

Is it because of fear of the unknown that you are against a clause like this? I don't understand your motivation. So far I've never seen the Office of the Superintendent of Financial Institutions display any lack of moderation in dealing with particular issues. And as Mr. Le Pan mentioned, there have been cases. There haven't been a great many but there were at least two of them recently. And if we had a provision such as this, the cases would have been a bit less painful for everyone.

So as Mr. Le Pan said, if similar cases were to occur in the future, even only one, involving let's say 2,000 workers, it is important for such an instrument to be made available to the Superintendent of Financial Institutions. I don't think that the office makes a habit of acting excessively.

Mr. Jean-Louis Massé: In our view, there is no precedent for a solution to such a problem. This is not a new problem in Canada; other pension plans have gone bankrupt in the past. What solutions did the provinces come up with? Did they use this kind of clause? I don't think so.

• 1610

There may be other solutions to the problem. There may be significant deficiencies in what is being proposed. We see this as a confusion of roles... A few people have been appointed... We're simply saying that we've only been aware of this for three weeks. We haven't taken an in-depth look because of the lack of time.

For example, in our view, this gives the superintendent powers that are not necessary. He already has all the powers he requires. It dilutes the role of the superintendent and puts him in a situation of conflict of interest.

Mr. Yvan Loubier: How does this put him in a conflict of interest?

Mr. Jean-Louis Massé: Between the beneficiaries of the plan and the managers or advisors of the fund.

Mr. Yvan Loubier: Why would he be in a conflict of interest?

Mr. Jean-Louis Massé: We see his role as that of someone impartial administering the Act. We do not see him in the role as the defender of widows and orphans without money and pleading their case...

Mr. Yvan Loubier: But I always understood his role as being responsible for an organization that applies the regulations, ensuring that everything operates well and that there are not too many disruptions in the financial sector because of systemic risks, for example.

I also saw him as the defender of the proper functioning of funds and efficiency as well, and to ensure that the rules...

Mr. Jean-Louis Massé: That is correct.

Mr. Yvan Loubier: ... are followed. I saw him as someone reducing the risks of pension funds being improperly administered or ending up in a bad situation. And among these roles, I personally see this clause as giving the superintendent some way of protecting participants.

I do not see how this departs from his role and how he would be in a conflict of interest. It's a natural tendency of his role, a natural extension of it.

Mr. Jean-Louis Massé: As we see it, there is a very great difference between reducing the risks of bankruptcy...

Mr. Yvan Loubier: Yes...

Mr. Jean-Louis Massé: ... and prosecuting anybody to defend the interests of somebody else.

Mr. Yvan Loubier: Yes. But Mr. Le Pan said earlier that he and his team could not go and check on the operation of each pension fund on a yearly basis. Therefore there must be some recourse at some point. There must also be a deterrent clause somewhere.

Personally, I see it somewhat like this. If some people think that the Office of the Superintendent of Financial Institutions will not have the time to go and have a look at all the pension funds, they will take the risk of not complying with the regulations that apply to them.

Seen from that angle, section 33...

Mr. Jean-Louis Massé: And the deterrent clauses are already in 33(1). They are already contained in the penalties that can be incurred by an administrator who contravenes the Act. The fine has just been increased from $10,000 to $100,000, and the prison term has been increased from six months to twelve months. There are already in the system penalties that allow us to do things correctly.

All that is quite different from the responsibility to prosecute someone on behalf of another person. In our view, that is a new role that seems to be associated with the superintendent, and that has not been discussed. That is what bothers us.

[English]

The Chairman: Mr. Le Pan.

Mr. Nicholas Le Pan: I have just one other point, Mr Chairman. Unfortunately, perhaps, but I think realistically, our role is not only to prevent failures; we also have a role to clean up afterwards when they occur. We will clearly try, as I said this morning, to prevent or reduce the losses, but we will not be prepared to guarantee there won't be any.

Therefore, as we focus on the role to protect from undue loss, it's also partly what happens after they occur, and how to clean up afterwards in the best way possible and reduce the losses as much as possible. That's an unfortunate part of the role, but it is part of the role, and it's an important part of the role. If we were only in the prevention business and thought we could prevent 100% of the time, this would be much less important. Increasingly, because we recognize we're not just in the prevention business but in the “clean up afterwards” business, as much as possible, to limit losses, we have proposed this in this bill, which has of course been out for awhile.

• 1615

But I apologize for the other thing.

The Chairman: Thank you very much, Mr. Le Pan.

Are there any other questions?

Ms. Torsney.

Ms. Paddy Torsney (Burlington, Lib.): I apologize for missing part of the presentation.

If the rules in proposed section 33.2 were tightened up and addressed this issue about any cause of action, human rights, employment law, whatever, would that make you any happier? It's on page 3 of your letter.

Mr. Jean-Louis Massé: We're back to the first thing we said.

Ms. Paddy Torsney: Did you want this clause?

Mr. Jean-Louis Massé: We have not studied this thing in any great depth. On the face of it, there are problems coming out all over. They haven't been studied. We haven't had the time to study this, so we don't feel we are in the position to negotiate anything.

In the past, up to Bill C-85, OSFI has accustomed us to a very good system of information exchange and consultation. That has taken place. We fully understand that when we make comments we won't get our way all the time—not even 50% of the time. But at least everyone has an opportunity to study this thing from his own angle and comment before we make important decisions in amending the act, decisions that we all have to live with.

Ms. Paddy Torsney: Mr. Massé, I don't know when this bill was introduced into the Senate, but as of next week it is six months old, after being passed by the Senate, and surely.... I know you're a busy guy and your job isn't to study every piece of legislation, but my question is this: is there a way to tighten this up given that you have raised a specific issue? Telling me that six months after it's been passed in the Senate you still haven't had time to study it just surprises me a little. I guess you're proposing that we drop the bill or something today. That strikes me as a bit preposterous.

Mr. Jean-Louis Massé: I discovered this three weeks ago. I've checked around with colleagues, many of whom are members of my task force and are consultants and in big companies in communications, transportation, and banking. One of them had heard of it or had noticed this thing.

Yes, we're late. I'm sorry if we're late. You can take our comments and do what you want with them. That's a fact of life.

The Chairman: Mr. Reid.

Mr. Timothy Reid: Here's what concerns me, I guess. In talking to the chair of the task force.... There has been a very good relationship between people who manage federally regulated pensions and the office of the superintendent. Over the years, with the prior bill, there was substantive discussion of very detailed items. I must say—this is probably more of a question rather than an assertion—that this is such a fundamental point. Why did the office of the superintendent not put it visibly on the table? Why didn't the superintendent get proactive on this particular issue and get in touch with people like Mr. Massé, the professional people?

If he has, I apologize here and now. But my understanding is that there is consultation and there is consultation, and there is something called—to put it in nice terms—“having something in the legislation that you don't make too visible”. And I really feel that's the wrong way to do things.

You have people from the business community saying—documented—that they haven't heard from the office of the superintendent about this in any detailed way. We had come to expect full consultation on controversial issues. Why wasn't this put up visibly, up front, for full consultation, even in the six-month period, let alone over the last two years?

Ms. Paddy Torsney: You obviously have an issue there, and that's fine, but in the last three weeks, Mr. Massé, since you heard about this, and since you have all these very intelligent and bright people, my question is, is there a way to make some change to proposed section 33.2 that will limit your concern as outlined on page 3 of Mr. Reid's letter?

We all work on deadlines.

• 1620

Mr. Jean-Louis Massé: I can only repeat myself. We have not studied this, so we have not come here to offer a compromise.

Ms. Paddy Torsney: Then it will pass the way it is this afternoon.

I'm trying to work with you here.

Mr. Jean-Louis Massé: I understand.

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

Mr. Timothy Reid: Maybe it's because I'm a broken-down policy analyst, but I would have loved to have seen a one-page statement with this legislation six months ago, a statement articulated by people who are experts, like Mr. Le Pan, on the nature of the problem, the materiality of the problem, on the basis of which this proposal would seem to be the best solution.

I just see this as a bad way to go about doing things. To my knowledge—I can be corrected, and again, I apologize in advance for my ignorance.... Where was that piece of paper? Where was that one page that said, “Here is the problem with this liquidator principle and here's why the superintendent is the only qualified person to carry out that function.” If that piece of paper exists—I hope it does—you could match that with the solution. Is the solution an overreaction to the size and nature of that problem or is it appropriate?

The fact that Mr. Massé said we haven't seen that kind of analysis.... Maybe it's obvious to the experts in the office of the superintendent, but it sure as heck isn't obvious to a lot of people in the business community, including people who expected to be fully consulted.

The Chairman: Thank you very much.

Are there any further questions or comments?

Seeing none, on behalf of the committee I'd like to thank you very much, Mr. Reid and Mr. Massé, for your intervention and presentation. As always, you contribute a great deal to the workings of the finance committee. For that we're very appreciative.

Mr. Timothy Reid: Thank you for inviting us, Mr. Chairman.

The Chairman: I'm going to suspend the meeting for five minutes and then we'll be back.

• 1622

• 1632

The Chairman: I'd like to call the meeting to order.

We'll now move to clause-by-clause consideration of Bill S-3.

(Clauses 1 to 30 inclusive agreed to)

The Chairman: Shall the title carry?

Some hon. members: Agreed.

The Chairman: Shall the bill carry?

Some hon. members: Agreed.

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

Some hon. members: Agreed.

The Chairman: Thank you very much, Mr. Le Pan, and I want to thank all the officials for their excellent work.

Mr. Loubier.

[Translation]

Mr. Yvan Loubier: Mr. Chairman, you have proof that when you introduce good bills, the opposition supports you and everything goes well. You should introduce such bills every day. You would have no problem in getting the opposition's consent.

[English]

The Chairman: Does that carry?

Some hon. members: Oh, oh!

The Chairman: Thanks again, everybody.

The meeting is adjourned.