Government Operations Committee on May 5th, 2009

[The Chair, Liberal, Derek Lee]

I call the meeting to order, colleagues. I see a quorum.

We are today considering Bill C-18, which is a bill dealing with the mechanics of the Royal Canadian Mounted Police Superannuation Act. We have witnesses from the Royal Canadian Mounted Police, the Department of Justice, and a group known as the Quebec Mounted Police Members' Association, or the Association des membres de la police montée du Québec.

We will now proceed to hear from witnesses on the subject of Bill C-18. It was our hope that we could complete disposition of this bill today. Your cooperation in that regard would be appreciated.

I'll ask the witnesses, first Mr. Michael Cape, director of pension services of the RCMP, and Shelley Rossignol, a senior analyst in the same branch, will you be making a presentation here on the bill?

[Michael Cape, Director, Pension Services, Royal Canadian Mounted Police]

Yes, I will.

[The Chair, Liberal, Derek Lee]

That's good.

May I ask the Department of Justice if the department will be making a presentation on the bill, or are you here as a resource?

[Marc Wyczynski, Counsel, Royal Canadian Mounted Police; Department of Justice]

Yes.

[The Chair, Liberal, Derek Lee]

Thank you.

I know that Monsieur Delisle will be making a presentation on the bill.

First we'll go to the Royal Canadian Mounted Police for their presentation. Welcome.

[Michael Cape]

Thank you, Mr. Chairman.

I appreciate the opportunity to appear before you to assist with the committee's examination of Bill C-18. With me today is Ms. Shelley Rossignol. She's the senior analyst with the RCMP pension services group and has invested a great deal of time and effort in the bill over the past year. Also here is Mr. Marc Wyczynski, who is the counsel from the DOJ who has provided legal counsel throughout the development of Bill C-18.

Bill C-18 proposes several technical amendments to the RCMP Superannuation Act. It would improve pension portability and ultimately bring the act in line with the federal public service pension plan, as well as other public and private sector plans across Canada.

The bill would deliver three primary benefits. First, it would allow for the expansion of existing provisions regarding election for prior service. That means regular civilian members of the force could purchase pension credits from other public and private sector pension plans across Canada. Second, it would allow the RCMP to enter into pension transfer agreements with other pension plans. This would permit the transfer of pension credits into and out of the RCMP pension plan. Third, it would clarify and improve some administrative and eligibility aspects of the existing act; two examples are those related to part-time employment and the cost of elections for prior service with a police force that was taken over by the RCMP.

In a nutshell, Bill C-18 is about fairness and flexibility. It will put each member of the RCMP on equal footing in terms of pension portability. That is not the case under the current rules.

Today, the almost 24,000 members of the RCMP whose pensions are governed by the RCMP Superannuation Act don't have the same pension choices as 6,300 of their colleagues, whose pensions fall under the Public Service Superannuation Act. Yet they all serve the public.

For example, someone who goes to work for the RCMP as a public servant under the Public Service Superannuation Act can bring their pension with them from other federal departments and levels of government—even from some private-sector employers. And they may be able to leave with their pensions if they explore other federal or public-sector opportunities.

Regular and civilian member employees do not enjoy the same level of pension portability. Bill C-18 proposes to address this discrepancy by providing those RCMP employees with the same pension options currently available to federal public servants, as well as to members of many provincial and municipal police forces.

Expanded pension portability may, in some cases, increase the value of future pension benefits for regular and civilian members. It might also help them qualify for survivor benefits for their spouses or partners and improve the value of that benefit--again, in some cases.

The proposed amendments will also help eligible members qualify for retirement at an earlier age, if they so choose, after a career of helping to protect the safety and security of Canadians.

Another positive aspect to the amendments proposed by Bill C-18 is that the enhanced portability provisions may help to strengthen the RCMP's current recruiting efforts. This issue is top of mind for the force at this time, as it strives for a net increase of 1,000 regular and civilian members by 2013.

Enhanced pension portability has the potential to make the RCMP a more attractive career choice for Canadians working in other fields or even for members of other police forces. In this way, enhanced pension portability supports many of the existing initiatives already under way to help the RCMP recruit more officers.

Mr. Chairman, in the time I have remaining, allow me to address a few of the concerns that arose during second reading of the bill in the House.

A few of the members expressed concern that the six-month training period for the RCMP officers is not recognized as pensionable. This was viewed as a possible anomaly because recruit training in some other police forces is pensionable and would be recognized under the RCMP pension plan in the case of a transfer.

The difference with the RCMP is that cadets at the RCMP training academy in Regina are not hired as employees until they graduate from the training program. Registered pension plans like the RCMP pension plan are subject to strict requirements of the Income Tax Act. The tax provisions make eligibility for coverage under a registered pension plan dependent upon employment. So since cadets are not employees, they cannot qualify for pension entitlement under the RCMP pension plan.

Another question asked during second reading was whether Bill C-18 would assist in the recruitment of aboriginal people or members of Indian band police. Bill C-18 would allow pensionable service under another Canadian pension plan registered under the Income Tax Act to be recognized under the RCMP plan, so as long as the potential recruit was a member of a registered pension plan, employment with the RCMP could become more attractive once pension portability is in place.

Finally, a concern was raised over potential costs associated with Bill C-18. The estimated program costs for this initiative are $1.1 million. Elections for prior service with the public service, the Canadian Forces, and the House of Commons or the Senate already exist. Consequently, many administrative tools are already in place for the expanded elective service provisions.

The costs associated with the changes would be covered by existing RCMP reference levels and the RCMP pension plan. No additional financial resources are required. And, under the future regulatory amendments, the actuarial cost of purchasing prior service is borne entirely by the plan member. In the case of a pension plan transfer agreement, pension funds are transferred directly from the former pension plan to the new plan.

I thank you for having invited me to appear before you. We would be pleased to take your questions.

[The Chair, Liberal, Derek Lee]

Thank you, Mr. Cape.

We'll now turn to Mr. Gaétan Delisle, who, after contacting the committee, requested to be a witness on this bill.

Welcome, Monsieur Delisle. Could I ask you to identify and just rough out your own identification and that of the group you're representing here today?

[S/Sgt Gaétan Delisle, President, Quebec Mounted Police Members' Association]

Thank you, Mr. Chairman and members of the committee.

I am currently a staff sergeant with the Royal Canadian Mounted Police. I also hold the position of divisional staff relations representative, commonly known as the SRR. For the last 33 years, I've been re-elected as the SRR in Montreal, representing C Division. Right now, I am also the president of the Association des membres de la police montée du Québec.

I am here on behalf of the three associations, as you can see from our correspondence that is being circulated. We have three different independent associations in the RCMP right now. As you know, a decision was rendered on April 6 that rendered the present system, SRR, unconstitutional, although that situation was waived for an 18-month period by the judge in place.

Having said that, and having the opportunity to be here, let me touch on the points we would like to issue first.

Although we applaud the position taken by Mr. Cape regarding the actual body of all police officers coming into the RCMP who will be entitled to buy back time, let me put you in touch with a situation where we think this is very inconsistent with good practice towards our members.

Having seen the situation in Ontario and Winnipeg, I can tell you that police officers who enter those services as cadets are automatically employed in this police service. Under this bill, the time that these people have spent in their respective police services as cadets—and that period corresponds to six months—will be recognized, but as just mentioned, the period of service before they earn the rank of constable in the RCMP will not be recognized in the case of our own cadets.

We consider this reasoning inconsistent. The other members who are behind me and who are active have all been at the Depot and have all been able to calculate their time as members of the RCMP. As our document indicates, it was only as a result of an administrative decision in 1993-1994 that all other cadets ceased to be able to be appointed employees. This is illogical in our view. Among the people from other parts of Canada,

particularly in the western provinces, the majority of our members right now.... We have over 10,000 members who graduated from depot since that new rule, so that means those 10,000 members will not be allowed to recognize those six months as having been served. As we said in our presentation, it's going to be a no-cost move, and all we're asking you to do is to include these people. As it said in the government paper, they're willing to make all those changes in about two or three years. So we are saying that will be ample time to prepare all the documentation to make them available. It doesn't mean it has to be done today, but at least a positive way for this government, this body here, will be on behalf of our 10,000 members and more, who need that to be recognized.

They are regular members of the RCMP. They have served Canada in their function, and therefore we are submitting on their behalf that it's going to be a discriminatory practice against them if we allow those same other members from the other police departments that count their time as cadets.

I said at the outset I have checked with Ontario, I have checked with Winnipeg. I have not checked with all the other major police departments where the people are. I understand some cadets in Montreal are also paid while they are a cadet, but not all of them. But I would suspect there are other large police departments—for example, Calgary, Edmonton or Vancouver—that have cadet training that will be able to buy that back. I am saying, yes, it's fair for those people to do it, and yes, it's fair to recognize our own cadets. Right now, 10,000 of them are giving their services to Canadians, and to recognize that has to be a positive move. I'm saying if it's only an issue regarding the Income Tax Act, that can be done within the next two or three years. You have the ability right now to include them as such, and I say on their behalf that should be a fair representation to do so.

The other issue is for our civilian population. Civilian members right now are not being recognized with the same type of pension entitlement that regular members of the RCMP are entitled to. As we have stipulated in our presentation, these people are under the same code of conduct. They're under the same work schedule. They can be rotational and they could be ordered transferred in their own functions. So we are speaking on their behalf, saying these people have to be recognized.

There are also those who are directly related to our presentation. However, I prefer to allow you time to ask questions. I am at your disposal. I hope you will take care of our cadets. Don't forget there are 10,000 of them if all.

Thank you.

[The Chair, Liberal, Derek Lee]

Thank you.

I think you've described very well some issues related, arguably, to the unique nature of the Royal Canadian Mounted Police in Canada, and I certainly recognize those anomalies. You've articulated them well. However, today we're dealing with a very precise focus on a pension bill.

Also, colleagues, each of you will have received correspondence from the Royal Canadian Mounted Police staff relations representatives dated May 4, 2009. I have the letter here. It simply clarifies the position of that group. It's signed by Brian Roach and Bob Meredith. It clarifies the position of that official SRR grouping.

Would someone move that this letter be made part of the record of the hearings?

[Chris Warkentin, Conservative, Peace River, AB]

I so move.

[The Chair, Liberal, Derek Lee]

Agreed? Thank you.

We'll now go to questioning. Colleagues, you will recall it was our general objective here to finish up the clause-by-clause examination today. We'll see how far we get. We may have to....

Madame Bourgeois.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Chairman, when we spoke last week, I didn't hear that we were going to do the clause-by-clause consideration of the bill. Some of my colleagues and I understood that we would be doing exploratory work, in view of Mr. Martin's remarks that this bill requires more than two hours of work. Consequently, my purpose today is to understand this bill, not to do the clause-by-clause consideration.

[The Chair, Liberal, Derek Lee]

Well, that may be true, Madame Bourgeois, but that's how I phrased it. I'm in the hands of members.

We'll go to questioning and I'll simply say that I'm going to be fairly religious about relevance here relating to the pension bill.

First, Mr. McTeague.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Thank you, Chair.

Yes, I received this letter of May 4 from the SRR, and I'm pleased to point out that they've demonstrated that there has been a challenge to the SRR divisional representation system under the MacDonnell decision a month ago that their association is in fact unconstitutional. But of course that will make its way through the courts.

I want to ask a question of our colleagues who have come forward. I've just received, Mr. Cape, your speaking notes. I'm sorry I wasn't able to follow every word you said. I'm sure it was harder on translation to go through this.

Mr. Cape, and perhaps this is to Ms. Rossignol as well, in helping the government to prepare for this legislation, what options did the RCMP consider to make the cadets' time in depot pensionable? Were any amendments to the Income Tax Act thought of prior to this, given this very glaring omission in which you're possibly and potentially having people coming into the RCMP absorbed through local service or local outlets who may in fact have much better pensions than those existing in the RCMP? I guess we're concerned about the spectre of unfairness, and perhaps we have a different take, Mr. Cape, on your position of this being able to help recruiting efforts. I can't see this as being anything more than unfair. So from an income tax point of view, were any amendments considered prior to the tabling of the legislation?

[Michael Cape]

I'll let Ms. Rossignol provide details, but the basic issue is that they're not employees of the organization. Therefore, they can't earn pension credits if they're not employees, because they're really in development. The moneys they're receiving while they're at depot today are not salary dollars; they're allowance dollars for their costs.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

I understand that. I'm only saying that you're giving to one group of future RCMP members, who happen to be police from a local service that is absorbed and no longer exists, the potential and the prospect of having a far greater pension than those available to current rank-and-file members. Do you not see that it's a bit of a contradiction?

[Michael Cape]

Yes, and I think what I can say on behalf of the RCMP is that it has been identified, and, as Monsieur Delisle identified, it's a concern for a lot of members in terms of the situation.

What we've done is identify it on a list of issues we have to bring to our pension advisory committee to get a recommendation as to how to proceed or not proceed, because that's the group that reports.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Chair, that's my question.

Ms. Rossignol, you could answer that. Before moving full steam ahead on this, I appreciate the SRR not wanting to have Mr. Delisle here, but he raises a very valid point on equity, particularly when it relates to labour law. I think you can appreciate the fact that we may have put the cart before the horse.

I'm asking whether the Department of Justice and the RCMP took into consideration the necessary amendments to the Income Tax Act prior to proceeding with Bill C-18.

[Shelley Rossignol, Senior Analyst, Pension Policy, Royal Canadian Mounted Police]

First of all, it's more of an employment issue than a pension issue. Not hiring cadets as employees of the RCMP until they graduate was an RCMP decision taken in 1994. If the RCMP senior management decides to hire them as employees from the time they enter the training academy, then they're automatically covered under the pension plan because the pension plan applies to members of the RCMP.

In the absence of that kind of decision, we consulted with CRA on the income tax provisions and asked, for our members today who are not hired as employees, whether we could consider adding a provision to this bill to allow them to purchase it as a prior service event. It was very clear that one of the basic premises of the tax legislation for registered pension plans is that in order to have the service recognized as pensionable, the person must have been an employee. They don't have that employee status, so we're unable to even add it as a prior service event.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

I guess it's falling into a much bigger question. I'm going to try to remain focused on this.

Monsieur Delisle, you had made some other recommendations here regarding the inequality of civilian members of the RCMP. Do you want to elaborate on that and on why this bill falls short in its ability to address yet another anomaly that, unlike what perhaps Mr. Cape said, will help in recruiting efforts? When you're treated as a different or separate class for whatever reason that may have existed before, how helpful is this in terms of recruiting? What does this do for morale in the RCMP?

[S/Sgt Gaétan Delisle]

You asked two questions. First of all, regarding the civilian and regular members, civilian pensions are roughly equivalent to those for the public service. My understanding is that although they are still contributors under the RCMP SA, their entitlements are similar to those of public service employees. That's the reason I made the point at the outset. To us, it's not proper. It's not correct. These people, although they're in a different category of employees under the RCMP, are still members of the RCMP, currently under the same code of conduct, currently under the same administration manual, guidance, or anything we have to do as regular members.

They are subject to shift schedules. They are subject to ordered transfer. Therefore, to us, that population, which represents approximately 2,000 people--and I'm saying approximately, because it fluctuates--those civilian members are and should be recognized as being the same for the purposes of pension benefits under the RCMP SA, particularly because they are contributors to it. Why have a different way of calculating their benefits when in all fairness they're subject to the same RCMP Act?

The other aspect you spoke about, and which is very important to me, is how we must behave in representing our members. The speakers who preceded me suggested that the act doesn't permit that. However, if you carefully read the documents that were distributed to all committee members, you'll see that a number of practices, which were previously used by the RCMP, had not been consented to either. However, to be fair and equitable toward members, we proceeded with some calculations and buy-backs all the same. I accept that from the outset. That's a very good initiative on the RCMP's part.

However, while it was possible, in some cases, to do those calculations, which were not entirely consistent with the procedure, I humbly submit to you that you have the opportunity to do it in the same kind of environment, not only for a few, but for more than 10,000 cadets who are currently employed by the RCMP. They were all trained without pay or without allowances. They have therefore suffered twofold, if you compare them with the 8,000 current cadets, of whom I am one and whose division or representatives are here, who were paid during training.

To make it fair and equitable for those people, they must be recognized, even if it means subsequently making changes to accommodate them. Today you're going to make changes to adjust to actions that were not entirely regular, but that were valid for certain members. Those pension calculations were done with good intentions.

I claim that you can do the same thing for at least 10,000 of those people who are serving Canadians from day to day. That's my position.

[The Chair, Liberal, Derek Lee]

Thank you, Mr. Delisle.

Mr. Ménard, you have eight minutes.

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

Thank you, Mr. Chairman.

Mr. Delisle, if I correctly understand your submission concerning this bill, which is nevertheless relatively short since it contains only 17 clauses, you essentially agree on its provisions, except regarding two subjects: recognition of RCMP cadets' time in eventually calculating their pensions and the issue of civilians who contribute to the RCMP pension fund but whose benefits are paid as though they were members of the public service.

[S/Sgt Gaétan Delisle]

You've clearly stated two of the four principles we've submitted, but there are four.

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

With the exception of two other points that I'm going to come back to, I understand that you agree on the bill as a whole.