Bill C-37 (Historical)

An Act to amend the Canadian Forces Superannuation Act and to make consequential amendments to other Acts

Canadian Forces Superannuation Act

[Jay Hill, Canadian Alliance, Prince George—Peace River, BC]

Mr. Speaker, I appreciate the words of the Minister of National Defence on this very important issue.

My question for the minister deals with amendments that I brought forward on behalf of the official opposition at committee stage of the bill. They deal with the fact that under Bill C-37, as is the case with the vast majority of legislation that is passed through this place, the minister has the power of course to develop, implement and enact regulations. The concern I expressed at committee was that there should be a serious commitment. I was hoping to have something in writing that would require the minister and/or the department not only to consult as he referred to in his remarks, but actually a commitment that he or his department communicate any impending changes directly and in writing to the stakeholders, to the actual contributors and to the pensioners, as it were.

I was reassured at committee by the parliamentary secretary to the minister that, although it was not in writing, because of the structure of the Canadian Forces Pension Advisory Committee and the Service Pension Board which would continue to administer this, two way communication would take place. Therefore the stakeholders would not find themselves in a situation sometime in the future where, if they did not read the Gazette, they would not find out about some important change that would affect their bottom line.

Could the minister comment on that particular concern?

[John McCallum, Liberal, Markham, ON]

moved that the bill be read the third time and passed.

Mr. Speaker, I am very pleased to speak today in support of Bill C-37, an act to amend the Canadian Forces Superannuation Act.

The Canadian Forces Superannuation Act was introduced in 1960. Although improvements have been made over the years, there have been no major reviews or amendments for over 30 years, with the exception of those made in 1999 in conjunction with federal public service superannuation reform.

While the fundamental principles of the act remain valid, Canadian society and Canadian Forces services have changed considerably over the last three decades. These changes must be reflected in the human resources policies and practices of our military.

For example, the Canadian Forces, like most other militaries in the western world, have been confronting a recruitment and retention challenge in recent years. Competition for skilled workers is intense and the employment options available to Canadians with the right qualifications are greater than ever.

In order to be competitive in today's labour market, the Canadian Forces has adopted a number of measures to position itself as an employer of choice. A modern, flexible and effective pension plan that provides our military members with more control and choice regarding their career and financial planning would go a long way in helping the Canadian Forces achieve this goal and help it overcome the recruitment and retention challenges it is now facing.

However, modernizing the pension legislation for the Canadian military is not just about helping the Canadian Forces attract the best and the brightest candidates. It is also about ensuring that our men and women in uniform are taken care of, have confidence in their futures, and are appropriately compensated for their service. In short, this is an important quality of life issue.

The Government of Canada has made great strides in recent years in improving the quality of life of Canadian military personnel and their families. Pay and benefits for Armed Forces members have been improved, the military health system has been enhanced, and there is greater support for family members.

The Government of Canada cannot rest on its laurels, however. It will continue to ensure the well-being of Canadian men and women in uniform.

The amendments contained in the bill represent another significant step forward in the quality of life file by bringing fairness, flexibility, and inclusion to the military pension plan.

The bill before the House today would modernize military pensions through a series of both major and minor amendments to the Canadian Forces Superannuation Act.

For example, some of the changes being proposed in Bill C-37 would shorten the period of time required to qualify for a pension benefit from 10 years to 2 years, improve pension portability, provide entitlement to an immediate unreduced pension after 25 years of service in the Canadian Forces, improve pension benefits for survivors, and provide pension coverage for our reservists. This last amendment regarding reservists is particularly important.

Before continuing, I wish to point out that the shift from 20 years to 25 years of service for an immediate unreduced pension will not disadvantage any member of the Canadian Forces because each member is entitled to make the choice between the new system and the old system, whichever of these two systems is better for the member in question.

Turning now to reservists, whether it is assisting Canadians during forest fires, hurricanes or other times of crisis, or contributing to Canada's international commitments, our reservists provide dedicated, professional, and essential service to the Canadian Forces, to the country, and to all Canadians.

We have a duty therefore to ensure that they are appropriately recognized and compensated for this service. The amendments set out in the bill bring long term, full time reservists under the same pension arrangements as their regular force counterparts. The bill also lays the foundation needed to develop a pension plan for reservists who serve on a part time basis.

The implementation of a pension plan for Canada's reservists is an issue the Standing Committee on National Defence and Veterans Affairs, among others, has worked hard for in recent years. I am proud to say that today we are one step closer to achieving this goal.

A concerted effort was made to ensure the views and concerns of key stakeholders were considered in the development of these proposed amendments. The Canadian Forces Pension Advisory Committee, the formal body responsible for advising me on pension matters, was consulted regularly and has endorsed the reform proposals.

Extensive briefings, focus groups, and other communications opportunities were used to inform and solicit feedback from regular and reserve force members. Members from both the regular and reserve forces support the proposed amendments.

I would like to emphasize the government's continuing commitment to consulting and communicating with pension plan members throughout the whole modernization process, including the development of regulations and implementation arrangements.

With this modernization of the Canadian Forces Superannuation Act, Parliament will not be required to pass supplementary estimates. Nor will it be necessary to draw additional funds from the Defence Services Program.

The increases arising out of this modernization exercise will be part of the existing financial framework. The chief actuary of the Office of the Superintendent of Financial Institutions feels that the other changes proposed in Bill C-37 would not lead to any cost increases. Instead, there might even be some slight savings.

The benefits associated with this legislation are self-evident. However, in conclusion, I would like to reiterate two key reasons why this legislation is critical for the Canadian Forces and by extension, all Canadians.

First, the amendments would provide for a pension plan that better meets the needs of our regular and reserve force members, and their families. It would ensure that they get the benefits they need and deserve.

Second, the proposed changes to the Canadian Forces Superannuation Act will assist the Canadian Forces in the critical areas of recruitment and retention by positioning the military as an employer of choice.

For these reasons, I hope the House will support the bill.

Committees of the House

[David Pratt, Liberal, Nepean—Carleton, ON]

Mr. Speaker, I have the honour to present, in both official languages, the fourth report of the Standing Committee on National Defence and Veteran Affairs.

Pursuant to the order of reference of Friday, September 26, 2003, your committee considered and held hearings on Bill C-37, an act to amend the Canadian Forces Superannuation Act and to make consequential amendments to other acts, and agreed on Tuesday, October 7, 2003, to report it without amendment.

Canadian Forces Superannuation Act

[Keith Martin, Canadian Alliance, Esquimalt—Juan de Fuca, BC]

Madam Speaker, today it is a pleasure to speak on Bill C-37.

It is particularly important for the people in the good riding of Esquimalt—Juan de Fuca. I have the maritime Pacific command in my riding and it is the major employer. A lot of my constituents serve our country honourably as part of our Canadian armed forces. I have had interaction with them and know of the trials and tribulations which they have endured quietly for a long time.

I just want to speak briefly on the first part of the bill, which really deals with the fact that the Canadian Forces superannuation plan was quite antiquated and desperately in need of modernization and enhancement. We thank the government for doing this, but it took a very long time to get it done. I will get back to the time delays and the government's inability to deal with the very important challenges faced by our military and by extension, faced by Canadians.

The pension legislation has a number of very good points. We asked for these for quite a long time. This first came about in the SCONDVA report of 1998. That seminal work, which was supported by all parties, had a number of very good suggestions that would improve the health and welfare of our armed forces personnel back in 1998. Sad to say, it took the government more than five years to implement these changes.

The bill talks about de-linking pension eligibility in terms of service. We support that. It talks about early access to deferred pension benefits. We support that. We absolutely support the portability of pensions. Reserve forces pension benefits is something for which we have been asking. It was explicitly stated in the SCONDVA report of 1998.

This is also a reflection of the respect that the armed forces reserve personnel should have received but did not. We have been asking for that for a long time and we are glad that finally the government has chosen to respect our reserve forces personnel and give them the pension benefits they should have had a long time ago.

I want to address the issue of life in the services, the challenges our armed services have faced for many years and how this has dramatically affected, in a negative way, our ability as a country to be safe and secure, not only here within the borders of our country but indeed abroad.

Our armed forces personnel are in burnout because the government has de-linked their capabilities. Policy decisions are made and are de-linked to the capabilities of our forces. The Prime Minister and his government have repeatedly made commitments without adequate discussion and analysis of their true capabilities.

Our armed forces have an enormous amount of will, desire or courage. However one simply cannot command and demand from our military an infinite number of work projects. Sooner or later they will burn out and their equipment will rust out. Not only we in the House have been saying that, but anybody who has had anything to do with the military in Canada and outside of Canada has been saying that as well. They have repeatedly said to the Canadian government that it needs to invest in our military in terms of manpower and equipment.

General Henault, our chief of defence staff, said this week that, “The Canadian Forces runs the risk of becoming irrelevant”. That is not something that our armed forces personnel want. It is not something that any of us want, but that is the product of neglect. Why do I say that? Right now we have about 56,000 people in our armed forces. That is a far cry from what we had when this government came to power 10 years ago. The numbers were in the 80,000 mark. In the seventies we had more than 100,000 people in our armed services.

Some suggested that post-cold war would have a peace benefit. However I would argue that the world today is as dangerous or more dangerous than it was during the cold war. Certainly the threats are different. In the two part cold war system, when we had two groups looking at each other with very potent and large numbers of nuclear weapons, there was a gridlock. Now the threats are more diffuse. Indeed I would suggest they are equally if not more dangerous because the tools and weaponry to commit and kill a large number of people are in the hands of uncontrollable individuals and groups. To this day we and our military are trying to deal with this.

However we cannot make the commitment or do the job within our borders and outside if we only have 55,000 people. For example, our soldiers are suffering from extreme burnout because they have been away for good parts of a year, and this has gone on for a long time. They come home and then they are rapidly recycled back into the theatre. That has a negative effect, not only on their personal health, but also it has a dramatic negative impact upon their family lives.

In the case of the command troops aboard the HMCS Calgary , as of December they will have spent 47 of the last 52 weeks in the theatre. One simply cannot be away from one's family for 47 out of 52 weeks on an ongoing basis and expect to have a family left at the end of the day.

We have asked for a dramatic increase in the number of personnel to more than 75,000 so we can begin to address the manpower deficit. We also have to give them the tools to do the job. We need to give them the training opportunities. We need to give them the equipment, whether it is helicopters, ships, fighter planes or a litany of other tools necessary to do the job. We see rust out. It will be virtually impossible for the government to meet the needs of replacing equipment that has rusted in the short to intermediate term. However it has to try at least for the long term so the equipment is there to do the job.

What is completely unacceptable is the government's so-called investment in the military is nowhere close to meeting our short, intermediate or long term objectives. In other words, what the government is doing now is a recipe for disaster. The only way to get around this is for the government to put in a minimum of $2 billion a year for the next five years. This would have a significant impact and would give our troops the manpower and tools needed to do the job. If it does not do that, we will become increasingly irrelevant on the international stage and will be unable to meet our domestic commitments.

Why is that important? Our ability to be at the trade table, to negotiate and engage our allies in economics and have a say is predicated, whether it be trade or security, on our investment and commitment in hard resources to our collective security. Our security as a country is predicated on our collective security. We know the threats we are facing are complex, transnational and diffuse. Whether it is the war on terrorism, or another conflict in the future, or the control of nuclear weapons, or narco-terrorism, we need a multinational, multilateral approach to these issues that not only address aid, diplomacy and trade but also have a significant military component.

Some would like to say that post-cold war we should all be peacekeepers and police personnel, which we can be. However I think the viewers would be shocked to know that while one of our former prime ministers won the Nobel peace prize for peacekeeping, among our allies we are 19th out of 21 in our commitment to peacekeeping operations today. We have been on the lower third of commitments to peacekeeping operations for a long time. The reason for that is our lack of commitment to manpower and resources.

The other aspect that I would like to address is the fact that unless we can make those commitments with our allies, Canadians lose out economically. We do not have the power at the table to negotiate trade and economic benefits for Canadians. Therefore, we must make that commitment to our individual and collective security.

The second aspect is our domestic interest. We saw in British Columbia the heroic actions of the military in dealing with the terrible forest fires this past summer. It did a wonderful job. The fact of the matter is we do not have the personnel to meet the needs of our country for domestic emergencies. Our armed forces can go a long way to addressing domestic emergencies, but we not only lack the manpower, we lack the equipment.

In the Arctic, for example, we do not have the capabilities to deal with a lot of emergencies, particularly when there is a need for helicopters because the government has continued to drag its heals. I believe it is because the Prime Minister does not want to lose face. The Prime Minister cut a deal that the previous government had made to purchase EH-101 helicopters. That was an election promise but it was an election promise to curry votes with the public. It was not a promise based on the needs of our country and our military.

For the last 10 years our military personnel have been trying to cobble our helicopter abilities. They have tried very hard to do this but in the process they have compromised their own safety. Our ability to protect our forces and work with our allies are compromised by not having this asset. Also, our ability to work in the north and deal with rescue operations in the north are also compromised by virtue of not having this capability. Certainly a few have come on board but not enough.

I want to also talk about some work that is being done. I just came back from Sierra Leone. There is an exciting option that our government may wish to entertain in terms of a useful international component in which Canada can engage. When I was in Sierra Leone, two groups were operating there and doing an extraordinary job. One was our RCMP that was training the police force to be a competent internal police force. The other group was our armed forces personnel who were training the Sierra Leone army to be a competent professional military service for domestic needs.

We are recognized internationally as being very good at doing that. Our people are very good at doing that. This is something the government may want to pursue as an international niche. We could take on the job of training other military services on how to be a good military. We could also train their internal police forces on how to be good police forces. At the end of the day, internal security of a country is absolutely essential for it to move on and have a strong stable economy. Indeed, social and economic stability is in part predicated on having good, fair-minded, professionally trained, professionally functioning internal security forces that can maintain the peace within a country. Without that, countries could easily spiral into anarchy or suffer from the predations of other nations.

I also want to talk a bit, if I may, about the situation that we are seeing with respect to our military families. The way in which some of our military personnel are being treated from time to time is really quite deplorable. I know our ombudsman tries hard to do a good job but our military personnel are finding it difficult ensuring their complaints are listened to and addressed within the system that exists today.

I have had a number of complaints that have come across my desk over the years where I wonder why the military does not treat their colleagues in a more professional fashion. I would suggest that the Minister of National Defence take a long, hard look at morale in our military and in how they are treated as individuals.

These are just a few bad examples that I am aware of but they are worthwhile looking at. What I am hearing from many of our military personnel is that the department does not treat them well under the present system.

I will give some examples in terms of personal finances. The government likes to trump up and say that it gave the military a raise. That is good because they desperately needed one. However, what it has failed to tell the public is that it surreptitiously took a lot of that money away. How did it do that? It did it through cuts to the cost of living allowance, also called the PLD, quite significantly.

What the cost of living allowance, or PLD, is supposed to do is address differences in the cost of living in different parts of our country. Since members of our military are sent wherever they are supposed to go based on the hierarchy within the system, which they are willing to do, the cost of living allowance or PLD is meant to address differences in costs. However the government dramatically cut that PLD causing significant harm to the incomes of our armed forces personnel.

The second thing the government wanted to do, which we talked about this week, was cut the foreign service deployment allowance our forces personnel receive when they are in theatre. Not only was it going to cut it, but it was going to be cut retroactively to the tune of $750 from $1,000 for each military family. My military families were aghast and, thankfully, were kind enough to make me aware of the situation.

We brought it up in question period and, I must say, I thank the government for saying that it would not cut retroactively the foreign service deployment allowance to our military. We all understand that a threat decreases and declines and the amount of money they receive is based on that threat, so of course the amount has to be decreased, which is only fair, but the fact that the government was contemplating cutting retroactively those moneys is deplorable. I never want to see that happen again in this House. Our armed forces personnel deserve better.

The government has also raised the rents on the private married quarters. This is based on two things. The government said that it had to raise the rents on the PMQs because it needed to make sure it was not artificially subsidizing PMQ rents. That is fair enough, but it made an enormous error in saying that a private married quarter in say Esquimalt is the same as a home in the private sector. That is completely untrue. Those private married quarters are not the same as in the private sector. There is no equivalent. It is a deeply flawed assessment in the value of those homes. The government bases its rent increases on that absolutely flawed assumption. I would ask the Treasury Board to immediately look at how it is assessing the PMQ rent hikes, because it is wrong.

The government is raising the PMQ rents on the basis that people who do equivalent jobs in the private sector to those in the military are making the same wage. The fact of the matter is that they are not. Whether they are firefighters, electricians, or in any other profession within the military, they do not receive the same amount of money as somebody in the private sector.

Raising the rents in the PMQ is flawed on two basic grounds: First, the houses are not the same; and second, the payment is not the same. If the government wants to ensure there is equivalence, then it either has to ensure that the houses are the same or that our military personnel receive the same pay.

I will close by saying that the government needs to make a significant investment in our military, the manpower and the equipment, and I am not talking about lip service. I am talking about a $2 billion investment per year for the next five years. If it does not do that then not only does it compromise the functioning of our military putting their lives at stake, but it also compromises the security of Canadians and for Canada, as a nation, to be a player at the table for the benefit of our collective security.

[Wendy Lill, NDP, Dartmouth, NS]

Madam Speaker, it is a pleasure to rise to speak to Bill C-37 today. I would like to echo some of the comments from the previous member about the importance of providing a welcome to our returning military members when they return home after a long career in the military.

Military pension modernization is sometimes not thought of as the most exciting topic in this place, but in fact it is extremely important to many people who live in my riding of Dartmouth, which is home to many military families, recent retirees from the military and, as I mentioned yesterday, many veterans.

We have a proud tradition of supporting our military, from standing at the docks to see the ships coming and going to and from the latest deployments to being out in full force at Remembrance Day, the Battle of Britain day and D-Day celebrations.

People in Dartmouth recognize the incredible commitment and sacrifice of our military personnel. They know that the men and women of our modern military spent a great deal of their time away from their families in the course of their work.

In fact, the Department of National Defence backgrounder on the bill illustrates the incredible change in our military's role. From 1948 to 1989, the Canadian Forces were deployed on 25 operations. Since then they have deployed over 65 times. That does not include the many training exercises and civilian emergencies such as the recent B.C. wildfires, which called personnel away for long periods of time.

I want to give hon. members an example of the effect of the multiple roles of our military. One of my constituents is in the air force. Two days after his son was born, Swissair flight 111 crashed off Peggy's Cove. He was one of the personnel in charge of retrieval operations. For the next three or four weeks he worked 16 hours a day supervising the retrieval of the plane, its contents and the bodies of the dead. He barely saw his newborn son and he certainly could not give his wife the support he would have liked to give her. That same constituent missed every one of his family's birthdays plus Christmas and Easter when, just two years later, he left for a deployment on Operation Apollo.

This life does not appeal to many of us. Frankly, I think that aspect of it does not appeal to my constituent either. We should be grateful that any of our citizens are willing to put their families through that kind of rigour, to move around the country and leave friends behind, to travel to foreign lands and to face daily danger.

In fact, we all know that our military is understaffed. Fewer and fewer people are willing to be in our military. Fewer and fewer Canadians make that decade long commitment that was once necessary to receive a pension, this at the same time that deployments are increasing. Again, DND points out that at any one time over one-third of its deployable force is either preparing for a mission, away on a mission or just returning.

We need a flexible pension plan that rewards Canadians willing to take on a military role. Instead of only supporting personnel who join the military at a young age and stay for a defined period of service, this new legislation will allow people to join the military for shorter periods of time and still generate pensionable earnings. It also allows breaks in military service without penalty.

Our military is changing and its role is also changing. These reforms of the pension plan for military personnel, both regular and reserve personnel, will help the military attract the best candidates. I think the military has had a bad rap over the years. Where it was once seen as an obvious choice for young people, now they are more likely to attend post-secondary or jump right into the work force.

Low pay, poor living conditions on bases and a draconian pension scheme that demanded lengthy terms of service could not compete with high salaries, stock options and more flexible work arrangements. Out of necessity, our military commanders have to recruit from non-traditional areas and they need the tools to attract the best candidates.

Finally, I want to comment on how important it is to our present military personnel to revitalize and fully staff our military.

I have lost track of how many leave-takings and joyous returns to the dock in Halifax I have had the honour of attending, but I do know that the experience of the constituent I mentioned earlier is not uncommon. Our military personnel are tired from constant deployments and operations. They have to use aging, outdated equipment and spend valuable time figuring out how to keep ships afloat, aircraft in the air, and vehicles moving, all of this during some of the most dangerous deployments Canadian soldiers have faced during peacetime.

Any measure that will encourage more skilled and qualified people to join the military is welcome, and that will allow military commanders to build up personnel capacity when needed to reduce the demand on regular forces.

Pension reform, as I mentioned earlier, is not the most interesting change that can be made, but it is an important one and we will be supporting the bill.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Madam Speaker, I am pleased to speak today to Bill C-37, an act to amend the Canadian Forces Superannuation Act and to make consequential amendments to other Acts. You will have understood that this is, quite simply, a modernization of the Canadian Forces pension plan.

That is exactly what it is, a bill to update a pension plan badly in need of improvement. WIth the improvements in this bill, the plan will move closer to the pension plan currently available to the Canadian public service.

The most important changes are the following: provision of a pension for members of the reserve; reduction of the number of years required for eligibility; enhanced transferability of pension credits; eligibility no longer tied to period of engagement; pension after 25 years service.

Let us look a little closer at this. Reservists will, at last, no longer be left out, and it is high time there was such a change. This bill finally entitles them to pensions, which was not previously the case. This is a good thing: finally acknowledging the work of the men and women of the reserve.

In future, given the serious recruitment problem it is experiencing, the Canadian Forces will have to depend increasingly on reservists for its various missions and operations, both here and abroad.

Since military service in the reserve is voluntary here in Canada, the Canadian Forces need to make reserve service as attractive and worthwhile as possible.

We are of the opinion, therefore, that making reservists eligible for the same pension as members of the regular forces will make the reserve more attractive and as a result able to play a more vital role in augmenting, maintaining and mobilizing the armed forces.

Calling upon the federal government to improve the situation of the reserve forces is nothing new, nor is the demand for them to be treated as members of the regular forces.

Pension coverage for reserve force members was studied in detail in the late 1980s. The study resulted in the introduction of the reserve force retirement gratuity program, an initiative that, in effect, is a form of severance pay. This program was considered to be a reasonable and effective alternative to a traditional pension, given the reserve force work patterns and the fact that most reserve members typically have full-time duties and pension plans with other employers.

Pressures continued, however, for the implementation of more conventional pension arrangements for reserve members. The Standing Committee on National Defence and Veterans Affairs recommended the creation of “a real pension plan” for Canada's Reserve Force in its 1998 Quality of Life report.

Subsequently, as part of the 1999 federal pension reform initiative, Parliament approved amendments to the Canadian Forces Superannuation Act to allow the establishment of a reserve pension plan through regulations.

This goes to show that the government did not invent anything. The Bloc Quebecois applauds the fact that the federal government finally put these recommendations into a bill, but at the same time we wonder why it took so long do so. Nearly five years have gone by since the Standing Committee on National Defence and Veterans Affairs made the recommendation. Perhaps the effective strength of the reserve force would be greater if these recommendations had been acted on earlier.

In the same vein, much remains to be done with respect to recognizing the work of reservists. In the navy, reservists are too few and lack the training and experience to man all coastal defence vessels. As a result, many vessels are forced to stay in berth.

As for the army, it cannot man all vehicles, for lack of trained personnel. The reserve force could be a major asset in this case.

Finally, the air force is facing a serious shortage of pilots. However, it draws heavily on its retired personnel as a source of trained personnel. In the air force, reservists are often relegated to administrative duties. All this definitely needs to be reviewed.

All this to say that the changes proposed in this bill to improve the lives of reservists are all very good, but are just a first step. We only have to look at the latest requirements in terms of domestic security and defence to realize that the need for more trained and well-equipped reservists will surface sooner or later.

Therefore, the role of reservists will have to be reviewed and changed, based on our new needs. The time may have come to review our defence policy in order to reconsider the role of the reserve.

Let us now turn briefly to the reduction of the vesting period and the portaability of pension credits. That can get a bit more technical. The vesting period is the minimum period for qualifying for a pension. Right now, that period is 10 years, compared to 2 years in the federal public service.

The bill would bring the current requirements in line with what is provided for in the federal public service, which is a good thing. The Bloc Quebecois totally agrees with this new measure, which would allow soldiers to more qualify sooner for a pension and bring their pension plan in line with the federal public service pension plan.

On this issue of portability, the bill would allow soldiers entitled to a deferred pension to transfer the actuarial value of their pension to a prescribed retirement savings plan when they leave the armed forces. That is also a very thing, in our view.

Another interesting feature of this bill is that pension eligibility is being dissociated from terms of service. This means that the concept of period of engagement—a familiar term in the military world and one with intimate links to pension benefits—is being set aside and replaced by a pension system based on accumulated years of pensionable service.

To simplify things, we could compare the periods of engagement now used in the forces with fixed-term contracts in the civilian world. We can say that, until now, this system has perhaps help to retain some military personnel who are still fit for duty, but it has become clear that the system is not adapted to short-term or intermittent assignments which are sometimes necessary to support military operations today.

This new approach will also make re-enlistment easier since there should be no penalty for those who want to leave the armed forces. For example, a soldier could have temporary absences without losing his accumulated pension credits. In a period when recruitment and retention appear to be increasingly difficult for the Canadian Forces, such a measure would certainly make the task of the Department of National Defence somewhat easier, as it watches its personnel numbers drop well below the figures in the 1994 White Paper on Defence, which has still not been updated.

There is another measure which, at first glance, might also appear to be a way to encourage retention of military personnel, but which could just as well be a discouraging factor for those who wish to enlist. I am speaking of the new measure which would grant a pension after 25 years of military service, rather than 20, as is now the case.

This measure, which is the most remarkable one in the whole bill, is nothing short of a small revolution within the Canadian Forces. This measure would only apply to new recruits, which could leave to some envy. We are told that people who have already signed on for 20 years, will receive their pension after 20 years as planned, if they so wish. But, future members will not be entitled to receive their pension until after their 25th year of service. They are being asked to stay five extra years in the forces. This almost has the look of a two tier system, or a sort of orphan clause for new arrivals to the forces.

We realize that this is merely a way of retaining new members in the Canadian Forces a little longer and of increasing the numbers. As far as we can see, there is still a problem with recruiting.

Did the last intensive recruiting campaign, with bonuses for people in specialized fields, not go as planned? Is the number of members who are leaving the forces higher than in previous years? Is it really for these reasons that it was decided that pensionable service would increase from 20 to 25 years? We may never get the real answers.

Whatever the case may be, it is clear there is still a lot of work to be done to make the Canadian Forces more appealing. Its members' quality of life is, and will remain, the focus of our concern. Several thousands of Quebeckers are members of the Canadian Forces and they deserve all our attention. Whether they are stationed in Canada or abroad, their standard of living and well-being have to be protected. It is not because enlisting in the military is a personal and voluntary choice that we should neglect them.

The Bloc Quebecois will continue to be vigilant to ensure that current and future Quebec soldiers in the Canadian Forces are well treated.

Upon examination, we find that this bill is a good step toward improving the quality of life of our military personnel. That is why the Bloc Quebecois supports the principle of this bill.

However, some aspects will require further examination, such as the possibility that the government will use regulations to legislate various components in the bill. One of these days we should perhaps examine the Liberal government's new approach to legislation which increasingly allows the Governor in Council to legislate using regulations instead of consulting parliamentarians in the House of Commons.

The explanation will be that it is much faster and more effective, but is it truly more democratic?

Business of the House

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

Madam Speaker, I rise on a point of order. There have been conversations among all parties in the House and I think you would find consent for the following:

That at the conclusion of the debate on Bill C-37 later this day, the House shall immediately proceed to private members's business and at the conclusion thereof the motion shall be deemed to have been put and a division thereon requested and deferred until Wednesday, October 1 at the conclusion of government orders.

The motion I am referring to is the private member's motion.

Canadian Forces Superannuation Act

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, this is a very short interruption to my speech, it being only a little over an hour. I do not know if I hold the record on an interrupted speech but there was one time when I was interrupted and then the bill that I was speaking on was not called for a couple of days less than a year. I started my speech over by saying, “as I was saying when I was interrupted”, and I will not do that today.

I have only a few more points to make on Bill C-37. I draw attention to the fact that with Bill C-37 finally reserve troops are drawn into the pension plan for the armed forces. This again is another item which is long overdue and which I would commend. As a matter of fact, if Canadians were to look at one way in which they could get a lot of value for money, strengthening the reserve forces in Canada would almost certainly be one of those ways.

I know there are other countries in the world that rely very heavily on reserve forces. Perhaps instead of spending a billion dollars on registering duck hunters and threatening to take away their guns if they do not comply with these administrative rules, we might better off issuing rifles to reservists, making it a part of the condition of their having a gun that they take the training and that they be ready to be called upon in case they are needed.

That is perhaps a facetious statement, but certainly the reservists have a great deal to offer the armed forces and the people of Canada. There are many times when there is an emergency that occurs in some part of our country. At that stage, instead of using our regular troops, we could call upon the reservists to help, especially when it comes to helping domestically. I think that would be a very good return on our money.

In any case, Bill C-37 draws them into the pension plan as well. Full time reservists would receive a partial benefit. For those who are part timers, it is a little less generous, but that is fair enough since most reservists have other full time employment and are able to look after their retirement needs in that way.

I would like to comment briefly about the schedule. There are two problems that I have with the bill. One is that there is an awful lot in this bill that will be done by regulation, by order in council. I have spoken on this topic before and I will reiterate it.

The ministers have a great deal of unilateral power when it comes to regulations. If anything needs to be strengthened in our parliamentary system, it needs to be the scrutiny of those regulations. We have a parliamentary committee that does that, but generally it has only the capacity to respond when there are complaints or issues are drawn to its attention.

While it is obviously administratively necessary, we should have perhaps more debate and more public input into decisions that are made and that are proclaimed by regulation.

My final statement on Bill C-37 is that it is long overdue. I commend the government for doing it now but I need to point out very emphatically that looking after of the pension scheme for our armed forces personnel and for our RCMP officers is a need which has been there for a long time. While commending the government for doing it now, I would like to also chastise it for having taken so long to get to this important issue.

Probably most of the members on this side of the House, as certainly on the other side, will be supporting this measure.

I would like to conclude my speech as I began it and that is by thanking the people in our armed forces for the good work they do. I hope that by supporting this measure, we are giving a tangible arm to the support that we are giving them.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I am pleased to respond to the legislation introduced today by the government on behalf of pensioners and future pensioners currently employed in the armed forces in the defence of our country and in the many other functions our armed forces personnel are required to fulfill these days.

I have a considerable interest in the matter of pensions. Some people will remember that on one occasion I took part in a philosophical debate about how pensions could be improved but unfortunately the timing was wrong. It made some interesting headlines in the newspapers, and we received a bit of flak about it.

Whether we are talking about Canadian pensioners at large, members of the armed forces, members of the RCMP or whomever, my interest is primarily and solely to improve the benefits and the fairness of the benefits received by people who work on our behalf.

We probably are not aware of the debt of gratitude we owe to our armed forces personnel as much as we should be. In my mind they are very special people. Not only have they chosen a career in the armed forces in the defence of either our civil or international liberties, they are willing, if necessary, to put their lives on the line on behalf of others as well. That is something which most of us do not think of often enough or deeply enough.

It is important to recognize that our armed forces personnel are serving in peacekeeping missions abroad in places like Afghanistan and others trying to improve the situation for people around the world as well as preserving our rights and freedoms in our country. These people occasionally live in very high risk situations. The fact that they are willing to do that makes them special people. We should pay particular attention to ensuring that they and their families are adequately and properly looked after when they reach retirement age, or heaven forbid, if they have some calamity in their lives requiring those benefits to be paid out before they reach that age.

I would like to commend the government for most of what is contained in Bill C-37, and the House may find that surprising. It is usually considered that the opposition's role is to oppose, and indeed it is. We oppose those things which are wrong. By the same token, our party is a party which is based on principle, and I am very proud of that fact. We are not here just for political reasons. We want to promote the principles that are good for our country.

Bill C-37 would improve the superannuation and retirement conditions for our armed services personnel. It is an improvement, and therefore I cannot, on that principle, oppose it. I agree with it because we need to make these improvements.

One very important change is one which strikes at some work that I did in my riding on behalf of several individuals who were with the armed forces and then for various reasons were asked to leave. The Canadian armed forces was reducing its personnel due to cutbacks and these individuals received a buyout which was fair according to the rules at the time but which was scarcely defensible. Then they were asked to return to the forces and continue serving in the capacity in which they were trained.

These individuals came to my office and said that little exercise had cut them out of their pension. I could not believe it. We tried to go to bat for them and very frankly did not have success in that case. The regulations were very clear. Once having been in the armed forces, if they quit for whatever reason, there was a final deal on the pension. It was a payout, or a transfer or whatever, and they could not buy back in. These individuals were, if I may be permitted to use a slightly unparliamentary term, shafted. They were not given a fair deal and it was not possible to correct it. I still feel badly about that.

I do not know whether the bill will serve retroactively to correct that error. I rather doubt it. However this is one of the issues which is addressed in Bill C-37 and it is one of the items I would like to include in my list of things for which I want to commend the government. No longer does it talk about continuous service to earn pension, but it talks about years of pensionable service, so if it is interrupted the member does not take a hit. I can only say, in a mild but sincere way, kudos to the government for recognizing that flaw and for repairing it. This is probably the most important feature of Bill C-37 and I wanted to talk about that first.

The second thing the government has included in this bill, with which I agree, is it gives access to armed forces personnel to their deferred pension benefits. This is a very common situation when people retire or they are pushed out of their positions early, often because of injury or other factors. The bill will give them access to pension benefits all the way down to age 50.

I do not know whether members are aware of this fact, but when one does this, actuarially the pension is reduced, which sometimes puts these people under some duress financially. However I really do not know any other way that that can be done. It would not be right to have one person who serves until age 60 or age 65 receive no more pension for the years of pensionable service left than the person who has been collecting pension since age 50. Actuarially reducing the pension is fair and we have to live with that. That is provided for in the bill and it is a very good situation.

Some people in the armed forces choose to retire early. In some cases it is a combination. Some individuals get into positions of extremely high stress and they really need to get out because of that stress they have had to endure. Even though they are not asked to retire, some of them recognize that their effectiveness in the armed forces is being diminished because of the toll the stress has taken on them over the years.

I commend the government for making these provisions available to members of the armed forces. I have not had a chance to read the bill in its entirety unfortunately, but I believe that those provisions, or at least some variation of them, are also being made available in this bill to the RCMP. That is another area where we have had presentations or representations from people who say that due to the very nature of the job, it is really unrealistic to expect them to work for 45 years before they reach retirement age, say from age 20 to age 65.

The RCMP also has made representation to all members of Parliament and have asked if its members could, for the sake of for example the Canada pension plan, make a one-third greater contribution to it to enable them to receive full benefits at age 55 instead of 65. Therefore there would be an additional contribution rate in proportion to the time that they have paid in.

Of course I had some discussions with them. I have this slight mathematical bent which I have difficulty turning off. I pointed out to them that even though they were asking for the contributions to be increased in proportion to the time the contributions would be made in fewer years, they failed to take into account the actuarial fact that the pension was now paid out for many more years, assuming that their age of death was about the same as if they would have kept on working to age 65. In fact if the stress relief provided by retiring early actually worked, they would probably live longer, actuarially speaking. Therefore one has to take those things into account as well.

However I still support that measure. Canadians benefit greatly by the work of our peacekeepers in our country, our police forces, and we ought to have that ready for them on behalf of taxpayers. I know I would much rather spend my money on providing decent benefits for our armed forces personnel and our RCMP officers than I would spending it in the many ways that the government wastes money.

For example, I would much rather put $1 billion into the RCMP and armed forces pension fund than I would to have them register duck hunters who go hunting in fall. Absurdities like that are very obnoxious to Canadian people at large, especially to the people who work in the defence of peace in our country. We ought to really be thinking about that.

The next element I would like to refer to briefly is the element of portability. I really think we have a lot of work, in total, on the portability of pension plans. This is true in the domestic world as well as for our armed forces.

A person who works for 20 years in one business, or who works for 20 years in the armed forces, should not be a slave to staying in that position simply because if they leave they lose any pension benefits they have accumulated. I would like to see full and total portability. I would like to see that among industries. I would like to see that among schools and colleges, for people in my profession. It is outrageous that people can lose their benefits and be forced to simply take a payout.

I do not know if members are aware of this but in most contributory pension benefit plans the contribution rates are usually matched by the employer.

This actually happened to me when I taught high school math for four years, when I was a youngster. When I left that to go to the college, I had a choice. I could either transfer it, which at that time was a gift because it was not to be included to make any greater benefits for myself, or I could take back the contributions I had made, forgoing the ones that were made on my behalf by the employer. This is true for armed forces personnel as well.

I am very pleased the bill addresses that issue. It states that if a person who has been serving in the armed forces for more than two years and leaves the position, the pension benefits they have earned are portable. That is a very good provision. At that stage, under the Income Tax Act, they can move it into an RRSP or they can transfer it to another pension plan if they go to another employer, specifically one in the government. In other words, they can transfer that pension benefit over and carry it over in the next plan.

It is my understanding the bill does that. If my understanding is right, then that is a positive step and I need to commend the government for it.

[Dominic LeBlanc, Liberal, Parliamentary Secretary to the Minister of National Defence]

Mr. Speaker, I am pleased to speak this morning in support of Bill C-37, an act to amend the Canadian Forces Superannuation Act.

The Canadian Forces Superannuation Act dates from the 1960s. Although the fundamental principles of the system are still valid, the act has been improved a number of times over the years, and major changes were made in 1999.

Despite these changes, the act has not been substantially amended for some thirty years.

Times have certainly changed since the 1960s and new issues have arisen, issues that oblige us to take a fresh look at military pension legislation and begin working toward its modernization. One significant issue that has come up in recent years is the recruitment and retention challenge facing the Canadian Forces.

When the 1960 pension plan was drafted, the situation was quite different. At that time it was assumed that the Canadian Forces could count on being able to draw from a large pool of labour. The act was therefore designed with a view to supporting the forces profile and human resource realities of that time.

Today, we are facing a radically different job market. The trend toward smaller families, the aging population, and an increased enrollment in post-secondary education have all meant a smaller pool of potential recruits for the Canadian Forces. Competition for skilled workers is fierce and employment options available to people with the right skills are greater than ever.

For this reason, the Canadian Forces have taken, and are continuing to take, action to position itself as an employer of choice. Pension modernization is an essential part of this process.

In order to be competitive in today's labour market, the Canadian Forces must be able to offer a very complete benefits package comparable to those offered by other employers.

At present, the Canadian Forces need a pension plan that strongly favours recruitment and retention. They need a modern system with more flexible retirement programs that offer military personnel more control and choice with regard to their career path and financial planning.

However, modernizing the Canadian Forces pension arrangements is not just about recruitment and retention. It is about the government doing the right thing for the men and women who serve this country in the Canadian armed forces. It is also a quality of life issue.

The government has made impressive strides in improving the quality of life of our military personnel. There is still considerable work to be done. The amendments contained in this bill represent another positive step forward on the quality of life agenda by bringing fairness, flexibility, efficiency and inclusion to the military pension plan.

With these amendments we can ensure that our military personnel and their families are well taken care of and are properly compensated for their dedicated service to Canada. They deserve nothing less.

The bill before the House today would modernize military pensions through a series of major and minor amendments to the Canadian Forces Superannuation Act. For example, some of the changes being proposed in this bill would shorten the period of time required to qualify for a pension benefit from 10 years to 2 years, improve pension portability, provide greater flexibility for members of the forces in building their pension incomes by basing calculations on total pensionable service rather than on completing a precise term of engagement, offer entitlement to an immediate unreduced pension after 25 years of service, and improve pension benefits for survivors. And a final but important point, the new bill would provide pension coverage for reservists.

I think we are all aware of the enormous contributions made by our reservists to the country and to the Canadian Forces. We have a duty to ensure that they are adequately recognized for their service.

In 1997, the Reserve Force Retirement Gratuity was established. This benefit is intended to encourage reservists to stay longer in the Primary Reserve and to reward them if they do.

Nevertheless, the Standing Committee on National Defence and Veterans Affairs, among others, continues to push for a real pension system for reservists. The modernization of the pension plan lays the foundation for implementing just such a system.

The amendments set out in Bill C-37 bring long term, full time reservists under the same pension arrangements as their regular force counterparts. The bill lays the foundation needed to develop a pension plan for reservists who serve on a part time basis.

Pension modernization would not require new funding from the defence services program. Any cost increases are related to the implementation of the initiatives approved under the 1999 pension legislation. The costs for these initiatives have already been earmarked in the fiscal framework.

The chief actuary of the Office of the Superintendent of Financial Institutions estimated that the other changes contained in Bill C-37 would not result in cost increases and might, in fact, result in modest savings.

The benefits associated with this legislation are self-evident. To conclude, let me reiterate the two reasons why this legislation is not just important, but why it is crucial. First, the amendments would provide for a pension plan that better meets the needs of our regular and reserve forces, and their families as well. It is a plan that would ensure they get the benefits they need and deserve. Second, the proposed changes to the Canadian Forces Superannuation Act will support the human resources strategy of the Canadian Forces in the critical areas of recruitment and retention.

For these reasons I hope the House will support the proposed amendments contained in the bill.

[Rahim Jaffer, Canadian Alliance, for the Minister of National Defence]

moved that Bill C-37, an act to amend the Canadian Forces Superannuation Act and to make consequential amendments to other acts, be read the second time and referred to a committee.

Business Of The House

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

Mr. Speaker, the hon. member across is a little impatient with his future holidays. He will probably have to wait some time.

This afternoon we will continue to debate second reading of Bill C-48, the natural resources taxation bill. I understand that the bill is nearing completion.

When it is complete, we will then debate Bill C-50, the veterans' benefits bill sponsored by my colleague, the Minister of Veterans Affairs, followed by the consideration of the Senate amendments to Bill C-10B, the cruelty to animal bill.

If time is left, we would deal with third reading of Bill C-17, the public safety bill, and second reading of Bill C-46, the market fraud bill.

In the unlikely event that we do not complete all of that this afternoon, on Friday we would begin with a reference to committee before second reading of Bill C-41, the amendments and corrections bill. The opposition House leader and I have had a brief conversation about this

We would then proceed with Bill C-37, respecting improvements to Canadian Forces pension benefits.

We will then return to any bills already mentioned today in the unlikely event that some of them are not fully completed.

On Monday, we would begin with Bill C-17, the public safety bill, and then return to the list previously described.

Tuesday, September 30, and Thursday, October 2, shall both be allotted days.

Canadian Forces Superannuation Act

[John McCallum, Liberal, Minister of National Defence]

moved for leave to introduce Bill C-37, an act to amend the Canadian Forces Superannuation Act and to make consequential amendments to other acts.

(Motions deemed adopted, bill read the first time and printed)