House of Commons Hansard #113 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was pension.

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11:10 p.m.

Reform

Charlie Penson Peace River, AB

Madam Speaker, I rise on a point of order. I would like you to rule on whether the term that the hon. member used is parliamentary. I do not believe you will find that it is. He is saying that the alliance conspired.

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11:10 p.m.

The Acting Speaker (Ms. Thibeault)

After researching in our reference book the word is not considered unparliamentary, especially in that context.

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11:10 p.m.

Progressive Conservative

Greg Thompson Charlotte, NB

Madam Speaker, that was a great ruling and I appreciate it. I just want to remind the House of one thing. CA members said that they would never take a pension, that pigs would fly first. All I can say is that there is a lot of pork in the air tonight.

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11:10 p.m.

Reform

Jason Kenney Calgary Southeast, AB

Madam Speaker, I am delighted to rise to debate Bill C-37 at third reading. It is a matter of great concern to me and has been for some time.

I want to mention that the hon. member for Cypress Hills—Grasslands suggested during his remarks that the bill represented a carcass which is being dug up for the third time by a dog. He asked me to correct the record on his behalf and suggest that it was a herd of pigs which was digging up this carcass for the third time, or hogs as the case may be.

This is a serious matter and it rests with a very basic principle that ought to govern our affairs, the simple principle of fairness.

It is fairly well known in these environs that I have a long, outspoken record on this issue as former president of the Canadian Taxpayers Federation. The hon. member for Pictou—Antigonish—Guysborough earlier suggested that in fact it was the reform party that was responsible for making issues, such as extraordinarily generous parliamentary perks and pensions, issues in the past. No. I think that citizens advocacy organizations, such as the Canadian Taxpayers Federation, can take the lion's share of the credit for having amplified public concern about the double standard to which parliamentarians here and in the provincial legislatures had begun to treat themselves through the 1980s.

Let us just revisit the history because we have heard various comments from various shrill members of the regional fringe party to my extreme left, the fifth party. We have heard all sorts of huing and crying this evening about the parliamentary pension plan. In that process, I have not heard a single word of contrition or humility from that party which was reduced to two seats, in large part because of the overstuffed attitude and arrogance of its former government, which was typified by its unrelenting defence of a then platinum-plated pension plan that provided pensions of $6.50 for every dollar provided by the parliamentarian.

Those members seemed to have remembered everything but to have learned nothing from their experience in government. One of the things they seem to have forgotten is that Canadians were disgusted with the party that refused to accept the simple principle of fairness. I have heard them stand in this place all night long and criticize this party and Canadians for wanting a fair pension plan that operates on a self-funding, dollar for dollar, actuarially sound basis.

The history of this is that before the early 1970s there was no pension remuneration for members of parliament. I hear some defenders of the status quo ante often say that if we do not provide super rich benefits far in addition to what one could expect in the private sector, that we will not be able to attract high calibre parliamentarians.

I think most Canadians would suspect that before the days of great largesse, in the 1940s, 1950s and 1960s, before the gold-plated pension plan was introduced, we had some pretty sound public servants working in this Chamber on behalf of Canadians. To suggest that these benefits, at the levels introduced in the 1980s, are necessary to attract talent, I think is rather specious. In fact, there seems to be a direct inverse relationship between the generosity of pension benefits and the quality of members of parliament.

It was in the early 1980s that the then Liberal government introduced a pension plan with a 5% accrual rate at its maximum generosity. It was shortly thereafter that we had nearly 200 Tory members of parliament in this place, supposedly attracted by that generous benefit, who decided to double the country's national debt, double federal spending, increase taxes 72 times and help bring about the longest and most painful recession in post-depression history. Boy, did we not get our money's worth by juicing up those benefits to attract those Tories to this place, benefits for which they still shamelessly apologize?

I am proud to say that members of the former Reform Party stood on principle in the lead-up to the 1993 election and thereafter by the principle of fairness when they said, as we do today in the Canadian Alliance, that members of parliament and public servants ought not to be given access to benefits, pensions or remuneration that is any more generous than what is available to ordinary working Canadians. That is a very simple principle. It ought not to be difficult to understand but it seems to be for the regional party on my extreme left.

I want to point out that what the Canadian Alliance policy stands for is to allow an independent commission to determine the compensation for members of parliament so that it removes us from this intolerable conflict in which we are placed every time a bill such as this is brought before the House of Commons.

In fact, we see that virtually every province has undergone a major overhaul of their compensation packages for MLAs, MPPs, MNAs and so forth. For instance, the provinces of Saskatchewan, Manitoba, British Columbia, Ontario and, I believe, New Brunswick have all trashed their old, gold-plated, unfunded, actuarially unsound, taxpayer subsidized pension plans and replaced them with what our party has long advocated, which is a simple dollar for dollar, actuarially sound, money purchase style pension plan, the kind of plan available to all Canadians.

What does the current plan do that this legislation maintains? It creates and perpetuates a defined benefit pension plan that provides for benefits far in excess of what the MP contributions plus matching government contributions could possibly fund. It is a recipe for an unfunded, future liability, otherwise known as a taxpayer IOU, an IOU which will be picked up by future taxpayers. How does it do this? It does this because it has in it a 4% benefit accrual rate.

The members of the regional party on my left do not seem to understand how this pension operates. In fact, I heard the member for Pictou—Antigonish—Guysborough completely disingenuously and shamelessly suggest that the one time severance package brought in in the last legislation was somehow comparable to the generous benefits under the current pension plan before us this evening. That is totally facetious and completely inaccurate.

This is a 4% benefit accrual rate. What does that mean? That is a technical term, so let me explain it. The Income Tax Act of Canada has certain limits for what constitute registered pension plans. Registered pension plans are those to which contributions by employers and employees are tax deductible. There is a certain maximum that the Income Tax Act creates in terms of the generosity for registered pension plans. The maximum benefit accrual rate under the Income Tax Act is 2%. This is a 4% plan. In other words, the benefits are twice as rich as the income tax allows.

The Tories love it. We hear them rushing to the defence of that system. Fortunately, because of the efforts of my colleagues in this party and the Reform Party in the last parliament, the benefits were slightly modified from a 5% accrual rate to a 4% accrual rate and certain other peripheral changes occurred, such as an increase of the age of vesting to 55 and a certain restriction on the practice known as double dipping.

By and large, this plan is not an actuarially sound plan. It is a plan that is available to fewer than 2% of Canadians. In fact, it is so extraordinarily generous that the government in this legislation must actually go outside of the Income Tax Act to top up the contributions that are not tax deductible. This is essentially twice as generous as the average defined benefit plan available to Canadians in the private sector.

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11:20 p.m.

Reform

Dale Johnston Wetaskiwin, AB

By law.

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11:20 p.m.

Reform

Jason Kenney Calgary Southeast, AB

Yes, by law. The legislatures of British Columbia, Saskatchewan, Manitoba, Ontario and other provinces looked at these unfunded, actuarially unsound pensions and they decided that they would bring in the same fair dollar for dollar money contribution plans that would be fully funded. Guess what they did?

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11:20 p.m.

Liberal

Joe Jordan Leeds—Grenville, ON

Mike Harris got $1 million when they closed that pension plan.

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11:20 p.m.

Reform

Jason Kenney Calgary Southeast, AB

They trashed the defined benefit plan and introduced a defined contribution plan.

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11:20 p.m.

Liberal

Joe Jordan Leeds—Grenville, ON

Ernie Eves got $850,000. You are full of nonsense.

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11:20 p.m.

Reform

Jason Kenney Calgary Southeast, AB

The member across the floor points out that the members of the Ontario legislature, in the process of converting from a gold-plated, defined benefit pension plan to a self-funding defined contribution plan, received a certain lump sum payment to be invested into an annuity. He is absolutely right. They invested that money into an annuity and the money that went into that annuity is a fraction of the defined benefits they would have been paid through the unfunded liability. Mike Harris did what was fiscally responsible.

I wish the members of the regional party on my extreme left would follow the example of Mike Harris or Gary Filmon on this issue, or of Ralph Klein who followed the leadership of the reform party in moderating these benefits and putting them on the same level that average Canadians expect and anticipate. Yes, they got an annuity, the annuity being a fraction of the benefits that would have been paid to them under the old status quo ante.

The point that we raise here is one of simple fairness. Why could we not simply have introduced and passed in legislation the recommendations of the Blais Commission. Honest, hardworking Canadians volunteered, such as a former colleague, Ray Speaker, to sit on the Blais Commission, look at parliamentary compensation and determine what would be fair by analyzing the workload and responsibilities of members of parliament and senators and comparing those responsibilities to compensation packages in the private sector.

The commission came up with some very sensible recommendations, first among which was to take the defined benefit plan we have now, the actuarially unsound plan, and convert it into a self-funding, dollar for dollar, standard pension plan, the type of which has been adopted in Ontario and several other provinces. That was the Blais Commission's recommendation.

This government, instead of accepting the recommendations of that hardworking, thoughtful and objective independent commission, decided that it was going to continue with the status quo. Incidentally, that commission also recommended that we eliminate the completely odious practice of allowing MPs to hide a portion of their income and shelter it from taxes. Elected officials, alone amongst Canadians, are allowed, through a special provision in the Income Tax Act, to exempt one-third of their ordinary income from the same taxes that we impose upon Canadians.

I have a private member's bill that would eliminate the so-called tax free expense allowances which, of course, are effectively a proportion of our salary, and make that money fully taxable. This would create full transparency so that Canadian taxpayers could see what they are actually paying their members of parliament.

The Blais Commission made the same recommendation that we eliminate the tax free status proportion of our income and gross it up for full transparency. However, again the government decided it did not want Canadians to see what we are actually being paid. It does not want Canadians to see that the $21,000 tax free allowance is actually worth about 40,000 pre-tax gross dollars. It does not want Canadians to see that so it ignored the recommendations of the Blais Commission on issue after issue.

Why does the government continue to put us in this conflict of interest position? It makes absolutely no sense to me.

I voted against this bill at second reading because it fails to implement the recommendations of the Blais Commission. It fails to live up to the spirit of fairness that has swept the legislatures of this country which have reformed their legislative compensation packages. It also fails to simply respect the basic principle of fairness.

I want to make it absolutely clear, as a former president of the Canadian Taxpayers Federation and somebody who has raised the issue of fairness, that I for one have never advocated that parliamentarians or legislators in Canada ought to have no retirement benefits. Quite to the contrary.

I remember appearing before committees in this place in the last parliament as a lay witness and suggesting the kind of pension plan that Canadians would accept, the sort that has been adopted by the various provincial legislatures, a defined contribution, completely actuarially sound pension.

I never suggested as president of that organization that any member of parliament be required to opt out of the pension plan. In fact, we never asked for an opting out provision. I want to make it clear that those who have been fighting for fairness in MP compensation have been fighting for reasonable fairness. They have not been fighting for a double standard where MPs of one party would be set at a disadvantage compared to MPs of another party. We think MPs of all parties should have the same standard as all Canadians, and that is what this debate is about.

I can understand why my colleagues in the fifth party are shrill. After all, they are not only fifth in number of seats but I think they are now fifth in the public opinion polls. They are sad and tired with a retread leader from the 1970s who cannot even figure out whether or not he wants to run in a byelection,

It has been postulated to me by members of the PC Party that one of the reasons their leader will not run for election to this place is that is he is receiving very generous pension plan benefits right now, whilst at the same time receiving from his party a compensation package equivalent to that of the leader of his party in this place. Talk about double dipping.

These shameless advocates of the old status quo have learned absolutely nothing. Their leader will not run, in part because he is getting that very generous pension and a very generous salary from his debt ridden party. Is it not interesting that the party which doubled the national debt, which ran the longest and largest string of deficits in Canadian history but never apologized for it, all the while defending a six to one parliamentary pension plan, should now have for a leader a man who continues to collect that pension plan and a generous salary from a party that is in as much debt as it put the country in?

What a delicious irony. They have learned absolutely nothing. The shrill partisan squawking we hear from that extreme and narrow fringe of Canadian politics will continue. I think that they should do themselves and this place a favour. I would be willing to exempt my principles on the question of euthanasia because I would like to see that party die a dignified death.

What we see before us now is anything but dignified, as the Conservatives continue to apologize for the grandiosity and the pomposity of the regime which they represented and the six to one pension plan which Canadians have said enough about.

I am proud of my colleagues for having taken a stand on this issue, for having forced the moderation of these benefits. I look forward to the day when we sit on the other side and one of the very first pieces of legislation we introduce will be to institute an independent commission, which I fully anticipate will come back with recommendations to create a self-funding, actuarially sound pension plan.

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11:30 p.m.

Progressive Conservative

John Herron Fundy Royal, NB

Mr. Speaker, I rise on a point. I just want to help out the hon. member. His members have taken great pains to point out that they should be called the Canadian Alliance and not the Reform Party. He called himself the Reform Party.

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11:30 p.m.

Reform

Jason Kenney Calgary Southeast, AB

Mr. Speaker, that party is in such a pathetic state that it cannot even use progressive political terminology such as reform without getting nervous.

The reality is that I am proud of my colleagues for having led the fight on this issue over the past two parliaments, for having forced the moderation of these benefits, something that party on the fringe has never advocated, has never stood for and is fighting against here tonight.

I look forward to the moment when we will see under an alliance government a commission report back that we should have an actuarially sound, fully funded pension plan. As the Blais commission recommended, we ought to eliminate the hide and seek game of the tax free expense allowances. We ought to put ourselves on the same standard as the rest of Canadians and remove the conflict of interest which we are now in. I look forward to that moment. Unfortunately the only bitterness for me is that members at the other end will not be in this place to enjoy our retroactive reduction of their pension benefits.

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11:30 p.m.

Progressive Conservative

Mark Muise West Nova, NS

Mr. Speaker, I have a very simple question for my hon. colleague.

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11:30 p.m.

Reform

Lee Morrison Cypress Hills—Grasslands, SK

Do you have any other kind?

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June 13th, 2000 / 11:30 p.m.

Progressive Conservative

Mark Muise West Nova, NS

Wow, we are full of interesting comments tonight. I would like to ask my hon. colleague a very simple question.