Bill C-201 (Historical)

An Act to amend the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act (deletion of deduction from annuity)

This enactment amends the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act to eliminate the deduction of Canada Pension Plan benefits from the annuity payable under each of these Acts.

[Roddie O'Handley, Retired Constable, Royal Canadian Mounted Police, As an Individual]

Good morning to everyone present here today.

Let me first introduce myself by saying my name is Roddie O'Handley and I'm from Halifax, Nova Scotia. Thank you for having me here to speak on this important bill, Bill C-201.

I was asked to speak on Bill C-201 because I have just experienced the ramifications of having my personal RCMP disability pension reduced. Let me tell you how I experienced that and how it directly resulted in a clawback to me.

I retired from the RCMP with a disability pension. As a result of the disability pension, I was entitled to 75% of my best five years of wages. When I retired, I had 32 years and 11 days of service. This meant I received 64% from my RCMP pension, provided by Morneau Sobeco. The other 11% was made up by the Great-West Life Assurance Company.

The RCMP's 64% gave me a total of $3,610.80 per month. Great-West Life paid me 11%, which was $1,036.42 per month. This gave me a total income, when I retired, of $4,647.22 per month. That's what I got.

After two years, Great-West Life sent me a letter advising me that I was no longer eligible to receive disability benefits from them. This reduced my pay by 11%, or $1,036.42--although there was no change to my medical profile. That stayed the same.

After that, I hired a pension advocate to try to get my Great-West Life pension back. The pension advocate advised me to apply for a Canada disability pension. On his advice, I applied for a Canada disability pension and I was successful in getting it.

As a result of being successful in obtaining a Canada disability pension, I informed the RCMP pension providers that I had received a Canada disability pension. They, in turn, sent me a letter on October 27, 2009, stating that because I was successful in obtaining a Canada disability pension, my RCMP pension would be reduced by $719.28, a considerable loss to me.

Now let's look at the actual dollar amounts I received after clawbacks and how much I have actually received in real money. Here is the breakdown from start to finish.

When I retired, I got $3,610.80, or 64%, from the RCMP. I got $1,036.42, or 11%, from Great-West Life. As I said before, that was a total of $4,647.22 per month. After two years, I lost the $1,036.42, the Great-West Life benefits, leaving me with $3,610.80 from my RCMP pension. Canada disability gave me $1,104.26. The RCMP clawed back $719.28. Out of that money, I gained $384.98 per month.

Canada disability also gave me a retroactive cheque in the amount of $16,405.26. The RCMP is taking $11,403.24. That leaves me with $5,002.02, on which I have to pay income tax.

The RCMP pension plan shouldn't have the right to take any of the money that was awarded to me from the Canada disability pension, because I paid into an RCMP pension plan to pay me a pension of 2% per year for each year I worked. I worked 32 years in the RCMP; therefore, I'm entitled to receive 64% of my best five years' salary when I retire. They shouldn't be allowed to reduce that because I received the Canada disability pension. In fact, because I retired from the RCMP with a disability pension, I'm entitled to 75% of my wages. When the RCMP reduced my pension by $719.28, that gave me less than the 75% I'm entitled to.

They didn't reduce the pension when I got it from Great-West Life, meaning when I got the pension from Great-West Life I was allowed to get the combination of the two. But because of the regulations, when I got it from Canada disability, the RCMP clawed back $719.

To me, this is the same as someone taking something out of my pocket. Why? Because I paid into the pension plan to pay me 2% per year for every year I worked for the RCMP. I worked for 32 years, therefore I'm entitled to 64% of my wages, regardless of what other source of income I may have.

I will leave you with this final thought: you have the power to treat all pensioners as equals, so please do so.

Thank you.

[Brad White, Dominion Secretary, Royal Canadian Legion]

Good morning, Mr. Chair and members of the Standing Committee on Veterans Affairs. I am Brad White, the dominion secretary of the Royal Canadian Legion. On behalf of the dominion president of the Royal Canadian Legion, Comrade Wilfred Edmond, our 360,000 members, and with the support of the Naval Officers Association of Canada, it is a pleasure to appear today at your committee to discuss issues related to Bill C-201. As well, I have provided each of you with a copy of my remarks.

As you are aware, members of the Canadian Forces and the RCMP were not consulted when the Canada Pension Plan was introduced in 1966. They were not asked whether they wanted stacked or bridged benefits. It was simply assumed that with the introduction of the Canada Pension Plan, Canadian Forces members and members of the RCMP would decide to reduce the level of their total pension contribution costs by reducing the scope of the Canadian Forces Superannuation Act and the RCMP Superannuation Act. This was done in a very paternalistic manner, as the CFSA contributions were reduced to offset CPP contributions. Similarly, Canadian Forces and RCMP members were not fully briefed or even consulted on the outcome of this decision by their employer, namely that the CFSA and RCMPSA benefits would be offset by their CPP benefits at age 65. Additionally, a ministerial promise was made at that time that pension cutback occurring at age 65 would never be larger than the actual CFSA, RCMPSA, and CPP benefits at age 65.

We are aware that this approach was consistent with what took place in the public service. We're also aware that the members of the RCMP and the Canadian Forces members and public servants can collect reduced CPP benefits starting at age 60. However, this assumes that employees retire from the workforce for a set period of time. We are aware that public servants can easily qualify for eight weeks of unpaid leave, leave without pay, as part of their bargaining agreements, and can thus start collecting Canada Pension Plan benefits at age 60, and then return to work, collecting both a government salary and their CPP, which more than offsets any CPP reduction at age 65.

This is not the case for members of the Canadian Forces and members of the RCMP. They generally retire at age 60 or before. The reality is that for those members of the Canadian Forces and the RCMP who start collecting early CPP benefits at age 60, the payback will be negative within seven years of collecting the Canada Pension Plan benefits.

Canadian Forces and RCMP members are not public servants. They must retire before the age of 65. They do not have bargaining agents like public servants do. Members of the Canadian Forces and RCMP pay into unemployment insurance but are unable to collect any benefits related to this program if receiving an annuity. As a result of the offset of CPP benefits at age 65, some annuitants end up receiving a reduced CFSA/CPP annuity because of the bridge arrangement between the Canadian Forces Superannuation Act and the RCMP Superannuation Act benefits and the CPP, notwithstanding the ministerial promise made to the contrary.

During the time that Canadian Forces and RCMP members were contributing to both the Canadian Forces and RCMP Superannuation Acts and the CPP, the superannuation pension fund accumulated a very large surplus, which was used by the government to pay down the national debt rather than to meet the needs of those who made voluntary payments. We are also being told that the ministerial promise was beyond the scope of the coordination provisions between the two pension schemes. This is an easy way to explain away a promise: blame the plan, not the promise.

There is no question that men and women of the Canadian Forces and of the RCMP serve their country at a risk to their lives. They often sacrifice their health. Their contributions to superannuation funds were used by the government not to provide them direct benefits, but to pay down the national debt. They were not consulted on whether they would favour stacked or bridged benefits for CPP and the superannuation acts disbursements.

Their overcontributions to the Canadian Forces and RCMP Superannuation Acts resulted in a large surplus, which was not used to provide direct benefits. In other words, they have been treated unfairly. This is an issue of simple fairness and recognition of the unique contributions that members of the Canadian Forces and the RCMP make on behalf of a nation. We are not asking for retroactivity; we are simply advocating for justice and fairness through the elimination of the offset of CPP benefits, starting now.

Thank you.

[Pierre Mallette, National President, Syndicat des agents correctionnels du Canada, Confédération des syndicats nationaux (CSN)]

Good morning, ladies and gentlemen. My name is Pierre Mallette, the National President of the Union of Canadian Correctional Officers, a CSN affiliate. Since 1986, I have worked as a corrections officer at Donnacona Institution, a federal maximum security penitentiary in Quebec. I would first like to thank the committee members for giving us an opportunity to address the important issue of retirement.

The Union of Canadian Correctional Officers represents more than 6,000 members working in 58 institutions in eight provinces. We recognize and support Bill C-201 and its goal of substantially improving pension benefits for specific—and certainly deserving—groups, namely, Canadian Armed Forces and RCMP officers.

Both groups face risks in their professions that go far beyond what most people would normally expect to encounter in their jobs. The situation of correctional officers is in all respects identical to that of soldiers and RCMP officers. We face repeated violence and assault, and we have to use firearms and make rapid decisions that are matters of life and death. These situations have a major impact on the physical and mental health of correctional officers, and one of the possible effects is post-traumatic stress syndrome.

Improving pension income has been a concern for the Union of Canadian Correctional Officers since 2002. In our brief, you will find a summary of the numerous efforts made by the union to persuade political parties, various governments and Treasury Board of the fairness of that demand. What we are asking is that the annual pension accrual rate be raised to 2.33% from 2% per year of service. Why? Because we believe our formula is preferable. When the people concerned retire, they will be able to receive a higher income more quickly than is provided in Bill C-201.

Eliminating the age 65 reduction will provide additional money a few years after retirement, and not during the period when they need it most, before age 65. Why is this demand justified? Because we believe it is a question of fairness to the other employees in the public service.

It's because we believe it is a question of equity with other employees of the federal public service.

Those other employees work for 35 years and accumulate pension income equal to 70% of their five best years. For an employee in an occupation associated with public safety or the armed forces, the Government of Canada recognizes that the working conditions involved in their job is harmful to their health. Their pension plan therefore allows them to take retirement after 25 years' service. However, it then pays them a pension equal to 50% of their five best years.

To be fair to all its employees, the government has to change the pension plans to allow a minimum of 2.33% per year of service to be accumulated. Twenty-five years' service in corrections is equivalent to 35 years' regular service in the public service. The value of those years has to correspond to the same value in the pension plan. This is a matter of safety. The benefits currently paid by the plans are so low that very few employees retire after 25 years' service. As mentioned earlier, after 2 years' service, correctional officers' health and work are affected.

For the safety of the public and the employees, the government must not only allow them to retire after 25 years' service, it must also provide them with the resources. This is the responsibility of parliamentarians and not a mere matter of payment by Treasury Board. Treasury Board officials did not want to recommend changing the pension accrual rate for corrections officers. They compare corrections officers' annual earnings with the earnings of regular employees on an annual basis. They did not want to take into account principles such as fairness and safety.

The women and men elected to govern Canada cannot reject those principles when they analyze the problem. Not only do they have to take them into account, they must also ensure that those principles are respected. We think our demand is preferable to Bill C-201. However, if Parliament decides to pass that bill, we are asking that we be included in it because improving retirement income is crucial for our members. It is also a matter of restoring fairness in relation to the military and the RCMP.

I would like to thank you for your attention during my intervention. I am now ready to answer your questions.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you very much for the question.

You were talking about EI in the second part of your question. I'm going to ask for more input on this, but we got a cost of about $7 billion from the Office of the Superintendent of Financial Institutions. That was a one-time past service.... We're not talking about retroactivity.

The other was a $110 million annual increase in operating costs that would result from Bill C-201.

The point about EI is a great one. The fact is that between 2,700 and 3,000 members every year from 2006 to 2009 collected EI for maternity or paternity leave. In those four years 11,300 people retired from the Canadian Forces with pensions; and 9,800 retired without pensions and are eligible for EI.

So if we diverted all the EI premiums to pay for Bill C-201, the thousands and thousands of people who are eligible for and/or collecting EI due to their service to the Canadian Forces would be cut off. That would not be fair.

The other salient point is that in 2008-09, the total EI contributions from the regular force and the reserve force totalled $56.5 million, which is only about half of what the annual costs for Bill C-201 would be. So it doesn't add up that way either.

I'll turn to my colleague Monsieur Mercier for any further amplification, particularly on the $7 billion figure.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

OAS is not part of the bill, by the way. Old age security is completely separate from what I'm talking about in Bill C-201. But the argument I have heard in many, many cases is that when a person receives the benefit reduction, or what I referred to as the clawback before, what happens is that OAS kicks in. It kicks in anyway, but old age security is determined by the amount of income you receive from other sources. So if you receive higher amounts, you get less OAS. We see that all the time. In this particular aspect, if you receive higher income either from QPP, CPP, or your MP's pension, you would receive less OAS to the point where, at a certain amount, you don't receive OAS at all in this regard. It's just like the GIS, the guaranteed income supplement; it is used to pop those with very low income up out of impoverishment. Again, it's based on your total income.

In many cases, the argument was that men and women don't lose any money. In some cases, I have seen members of the armed forces and the RCMP with an additional amount at age 65. It's not much, but it's a little bit more, even after a reduction. But the vast majority I've seen have lost money at age 65, and this is the part that gets them. They don't believe that at age 65 they should be losing money; they should actually be gaining a bit more to offset the higher costs when you become age 65.

[Guy André, Bloc, Berthier—Maskinongé, QC]

I agree with Ms. Sgro. Mr. McColeman's questions are completely out of place.

We want to understand the bill, and we want to spend an hour studying it today. We only have one hour and here we are debating how the last budget was passed! That has nothing to do with our study.

I think that the questions should be solely on Bill C-201 as presented here by the NDP. I share Ms. Sgro's opinion.

Mr. Chair, I would appreciate it you could arrange for us to keep to the agenda.

Thank you.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Madam Sgro, thank you very much for that.

Since Bill C-201 resurfaced—it was Bill C-411 a few years ago—there is no question that information now to leaving members or to members who are signing up is much more available, open, and transparent than it was before. There is no question it was always in a manual somewhere, in this big binder you sign in. Anybody who has ever signed up for the military knows there's one form after another and you're just signing away.

But the reality is that the explanation of what it was...it was never fully explained until many years later. Now I have to give the CF credit; they are fully explaining, very clearly, and I think it's because of the public awareness of this particular legislation putting forward. So it has improved greatly in that regard and people know exactly what to anticipate. They don't like it, mind you, but they do anticipate it.

How do we go forward? Quite simply, if Bill C-201 ever became law, if I ever reached that sort of luxurious moment in my life, the reality is it would stop immediately. Then the individual members would receive both, and they would obviously have to pay more taxes, receive less OAS, and put that money right back into the economy. It's another way that we say to all of them “Thank you very much”.

As a New Democrat, I will give the Conservative parliamentary secretary credit, because right now Mr. Ted Menzies has gone across the country looking at pension reform. But one thing they haven't looked at yet is this reform, and if Mr. Menzies wished at any time to discuss with the various military and RCMP this particular aspect of pension reform in Bill C-201, I would work with him.

Ending Conditional Sentences for Property and Other Serious Crimes Act

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, I asked a financial question because I have a bill, Bill C-201, that deals with veterans. The first thing out of the mouths of the Conservatives was “What is it going to cost?”, not what is best for the veterans, but what it is going to cos. They did not care about veterans and their families and the issue of what my bill would do to help them. All they asked about was the cost.

So, I will ask once again. Has he got the evidence to prove that this would actually prevent crime, and what is the financial cost of the bill?

He said some of the provinces would pay for it, and that is true. However, would the money then be transferred from the federal government to the provinces to pay for that?

With a burgeoning deficit, where is the money going to come from, increased taxes or cuts to services?

I have no problems with him debating the issue of crime and punishment, but someone has to pay the financial costs for this. Yes, there is a cost when people commit crime, but there is also a cost when we put them behind bars for extended periods of time.

So, how much would it cost and where is the evidence to support his conclusions that this would actually prevent crime?

These are two very basic questions.

Canadian Forces Superannuation Act

[The Acting Speaker, NDP, Denise Savoie]

The House will now proceed to the taking of the deferred recorded division of the motion at second reading of Bill C-201 under private members' business.

The House resumed from May 12 consideration of the motion that Bill C-201, An Act to amend the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act (deletion of deduction from annuity), be read the second time and referred to a committee.

[Dave MacKenzie, Conservative, Parliamentary Secretary to the Minister of Public Safety]

Mr. Speaker, I welcome the opportunity to speak to Bill C-201.

This is a matter of importance to all Canadians as the amendments proposed in the bill would have significant long-term financial implications for the government and for taxpayers. I encourage hon. members to fully apprise themselves of the facts and recognize the real impact of the changes before agreeing to support Bill C-201.

Let me begin by saying how pleased I was to hear member after member rise in the House back on March 25 to express their support for RCMP and Canadian Forces personnel. Despite all the wonderful sentiments expressed, and I do not doubt their sincerity, we need to focus on the reality of the situation. We cannot allow good intentions to cloud our judgment only to face the consequences later.

I too have great respect for the people who serve this country in uniform. I must admit to a slight bias in this regard having served for 30 years as a police officer before being elected to Parliament. I have worked hard with my colleague, the Minister of Public Safety, and with others on the government side to make sure the RCMP and other police services have the tools and resources they need to do their work.

I feel confident that no government in the recent history of this country has done more to support police and military personnel than ours, and we are determined to continue to support them after the uniform comes off, to borrow a phrase from the hon. member for Sackville—Eastern Shore. However, that support needs to be tempered by common sense.

As much as I value and understand the true role police officers play in society, and as much as I appreciate the sacrifices made by members of the Canadian Forces, I cannot support this proposed legislation in its current form.

Rather than trying to address the specific situations of a limited number of individuals who are receiving a disability pension, the hon. member for Sackville—Eastern Shore has put forth blanket amendments that would apply to all current and future pensioners of the RCMP and Canadian Forces.

The costs of such a proposal and the precedents it would set for other police and law enforcement personnel across Canada should cause hon. members on the other side to take a step back and carefully and responsibly reconsider their support for Bill C-201.

It is important to understand that nothing is being done improperly right now. No injustice has been perpetrated against the RCMP or any military pensioners. The pension programs for both groups are working as designed.

In his remarks during the first hour of debate on Bill C-201, the hon. member for Sackville—Eastern Shore repeatedly used the word “clawback” to describe the situation as he sees it. Not only does that term have negative connotations, but it is simply wrong to describe the elimination of the bridge pension as a clawback.

The hon. member also used the term “deficiency” to describe the reduction in their employer sponsored pension once retired members of the RCMP and Canadian Forces start receiving the Canada pension plan. Again, this is simply not an accurate representation of the facts. The reduction is not a deficiency. It is planned for and expressly taken into account in determining contribution rates when members are still working.

Members of the RCMP and Canadian Forces, like all other federal public servants, do not pay full contributions to their employer sponsored plan on that portion of their salary that is subject to Canada pension plan.

The goal of this integrated approach is to ensure that members are not burdened with excessively high contribution rates during their working lives when their day-to-day expenses for their family, such as children's sports, educational costs, mortgages and loans, are often at their highest, yet they are still afforded an opportunity to enjoy an acceptable level of income during the course of their retirement. This is a careful balancing act that minimizes the member's input during his or her working life while still maximizing the level of income during retirement.

It is no coincidence that this is the way the plan was designed. Incidentally, this is the way that most public service pension plans are administered in Canada today.

I can assure the House that retired RCMP and Canadian Forces personnel are receiving pension benefits that fully reflect the contributions they have made to both their employer sponsored plans and the Canada pension plan. When they start receiving the Canada pension plan and the bridge pension is eliminated, most pensioners continue to receive the same amount of money, just from two sources rather than one.

The proposal in Bill C-201 to eliminate the reduction in pensions would fundamentally change the design of the plan which has been in effect for some 40 years. It would also place an unreasonable burden on current members of the RCMP and Canadian Forces, who would see a significant jump in their pension contributions in order to fund this change.

We have already heard that the costs of the proposed change would be enormous. My colleague, the hon. member for Wild Rose, advised the House on March 25 that these proposed amendments would increase the past service liability for the RCMP pension plan by more than $1 billion and would result in ongoing costs of tens of millions of dollars each year. The much larger Canadian Forces pension plan would incur a one-time past service liability of several billion dollars if these changes were implemented and ongoing costs could be in the neighbourhood of $1 million per year.

How would these billions of dollars in additional costs be paid? They would be paid by taxpayers, of course, and also by working members of the RCMP and Canadian Forces, who would see their annual pension contributions increase by as much as 30%. I see no fairness in that situation, a sentiment that I am sure would be voiced loudly by the rank and file members who would be required to shoulder much of this massive financial burden.

The RCMP pension plan is already generous by Canadian standards and the level of taxpayer support is substantial. Members currently pay less than 30% of the plan's actual costs. For every dollar contributed by plan members in 2008, the Government of Canada contributed $2.29. When compared with pension plans for other police services, the RCMP pension plan ranks highest from the perspective of the employer's contributions.

We also heard during the first hour of debate that the changes proposed in Bill C-201 are opposed by the Federal Superannuates National Association, which represents pensioners from the RCMP, Canadian Forces and regular federal public service pension plans. The association agrees with the government that the current approach is correct and that retired members of the RCMP and Canadian Forces are receiving the full benefits to which they are entitled.

In her remarks during the earlier debate on this bill, the hon. member for York West conceded that this bill “is short on specifics and costing”. I am pleased that some hon. members on the other side recognize that costs would be far greater than expected. Bill C-201 is not a reasonable or balanced approach. It would cost taxpayers billions of dollars and would create a special class of retired public servants.

I urge hon. members on both sides of the House to take the responsible course of action and vote against sending this bill to committee.

[Laurie Hawn, Conservative, Parliamentary Secretary to the Minister of National Defence]

Mr. Speaker, I am pleased to have this opportunity to speak to the proposed legislation.

There is no question that the men and women of the Canadian Forces and the RCMP deserve Canada's deepest gratitude. I will refer mainly to the Canadian Forces but all comments would apply equally to the RCMP. In return for the sacrifices they make to defend us, our country and sovereignty, we have a responsibility to care for them, a responsibility that begins the moment they enlist and carries right through until long after they have donned their uniforms for the last time.

Nobody understands this responsibility better than our government. In looking back over our record since we took office, I do not think anyone could question our support for the Canadian Forces. We would never settle for a retirement plan that shortchanged the men and women who serve Canada.

I would like to support this bill, I really would, but I cannot because it would be dishonest and irresponsible to do so. I would not be able to look myself in the mirror if I was simply to bow to my own emotions and ignore the facts of the case, as the hon. member for Sackville—Eastern Shore has chosen to do. Frankly, I do not expect him to know the facts intuitively, but I would have expected him to do better research on the issue. It is easy to play the hero when one will never have to deal with the consequences.

This is off topic of the real issue of the bill at hand, but it is relevant to a complete understanding of the situation to appreciate that the mover of this bill has an appalling record of voting against measures that would actually help serving or retired members of the Canadian Forces.

The Liberals will also support this bill even though they know it can never be implemented and if they were government, they would be doing exactly the same thing we are. For them, it is simply the politics of trying to embarrass the current government.

The Canadian Forces pension plan is flexible and generous, and compares favourably with some of the best pension plans in the country. It has many desirable features, including its survivor benefits and the basic pension formula. It is fully indexed to the cost of living. It also has very generous early retirement provisions.

When CPP was introduced in 1966, employers recognized that paying into two completely separate pension funds could cause undue financial hardship. To avoid this, many employers, including the Canadian Forces, chose to integrate their plans with the new CPP.

Employees then had two premiums to pay and they collected two benefits, but the total cost of the two premiums was the same as what employees had been paying for their company plans alone prior to the introduction of CPP. Likewise, on the receiving end, the total pension benefits they collected remained much the same. This whole issue has been totally misrepresented and is based on emotion rather than facts.

Let me provide the facts. Canadian Forces members pay 25% of the cost of the plan while Canadian taxpayers pays 75%. Canadian Forces members can retire at almost any age so long as they have met the years of service requirements of the plan.

When they retire, they get 2% per year of service based on their best years of annual salary and they get it immediately, regardless of their age. Other people, including members of Parliament, do not collect their pensions until age 55 or later. Service members collect that 2% until they turn 65 when CPP kicks in, as set out in the 1965 agreement between the Canadian Forces Superannuation Act and the Canada pension plan when the two were integrated.

The pension that a CF member receives prior to age 65 is made up of two parts. One part is the lifetime benefit that will continue for the rest of the member's life and the secondary bridge benefit is designed to bridge the retirement income of the member and provide a smooth income flow between the CF retirement age and the age at which he or she will collect CPP.

The bridge benefit is calculated in such a way as to be similar to the anticipated CPP benefit at age 65. At age 65, the bridge benefit disappears and is replaced by CPP according to the manner in which the member has contributed.

People talk about a clawback. There is no clawback. There is no clawback, as evocative and popular as that word may be. At age 65, the bridge benefit disappears and is replaced by the other pension that the member has paid for, the Canada pension plan. The total pension is now from two sources, both of which operating exactly as they were set up and in accordance with how much a person has contributed.

In most cases, CPP will be equal to or greater than the bridge benefit but that will depend on what members have done between retirement from the CF and when they turn 65. If members do not contribute to CPP at an appropriate level because they do not work at that level until age 65, the CPP that they have earned may well be less than the bridge benefit. They get what they pay for.

If they take CPP early, as early as age 60, they will double-dip the CPP and bridge benefit for that period. That is a good thing. When they turn 65, the bridge benefit will disappear. They will lose the double-dipping and their continuing CPP will be at a reduced level because they took it early. Obviously, in that circumstance, the total pension will be less after age 65.

All that said, if we run the numbers, it is generally beneficial to take CPP early and enjoy the double-dipping, but they need to plan for it. It is a personal choice and the decision is entirely within the control of plan members.

In budget 2008 our government changed the formula for calculating the lifetime benefit and the bridge benefit. This resulted in increasing the lifetime benefit portion and reducing the bridge benefit portion. That means that there is less bridge benefit to disappear when the retiree turns 65. This is obviously to the benefit of every CF retiree. The member for Sackville—Eastern Shore and the NDP Party voted against that measure.

In my case, I retired at age 47, with 31 years of service. I have been collecting my 62%, indexed since age 55, ever since. When I turn 65, in three more years, my bridge benefit will disappear and it will be replaced by CPP. Because I have worked full time since age 47 and made maximum contributions to CPP, my total pension will actually go up by about $300. The pension plan works as advertised, and we are getting exactly what we paid for.

There are several misrepresentations out there. Comparing the CF pension plan and the parliamentary pension plan is apples and oranges. Both plans operate in accordance with how they were set up and paid for, and no one has been exempted from anything. The parliamentary pension is straightforward and there is no bridge benefit for an MP who retires before 65. Since there is no bridge benefit, there is nothing to be replaced at age 65.

MPs do not collect their pension until they turn 55, unlike the CF member who collects it right away. Also, MPs have zero input into these matters. There is no exemption for anyone and this red herring is simply put there to stir up emotion and resentment where none is justified. It is inaccurate and it is dishonest.

It was pointed out that we had no input into the integration of CFSA and CPP in 1966 and that we were not properly briefed. First, the CF is not a union. We do not get to negotiate pay or pension plans. Second, I cannot remember what we were briefed on in 1966, but I can guarantee that I was not paying attention anyway. I was too busy going through pilot training.

Ultimately it is every member's personal responsibility to understand his or her pay and benefits and there is always information available.

There are lots of emotional arguments put forward about how much CF members suffered and sacrificed during their careers, and that is valid, but they are emotional arguments. While we undoubtedly did have a lot of family disruption, and I certainly experienced that, and we were expected to be prepared to make the ultimate sacrifice, I personally helped to bury several dozen friends, we signed up for that.

That is why we have such a generous pension plan, which we are allowed to collect immediately upon retirement. It is also why we have such excellent health care and dental benefits for the rest of our lives and survivor benefits for our families.

Emotional arguments may be fun to raise, but they do not take the place of properly constituted and financed plans that operate exactly as they are supposed to. People like the member for Sackville—Eastern Shore never concern themselves with details like, who pays? In their socialist view, government simply pays. We know exactly what that means.

The one-time cost to implement this bill for the CF and RCMP would be $7 billion. In addition, someone would have to pick up the 2.2% per year in future contributions. For a member making $50,000 a year, that would be an additional pay deduction of $1,100. That would not be too popular.

People like to wave around petitions that they say contain over 100,000 signatures. If somebody says “The government is unfair, you deserve more money”, will people sign his petition? Of course they will. However, people should ask themselves why clearly people-people, like Rick Hillier, Ray Henault, Paul Manson, Al DeQuetteville, Fred Sutherland and many other three and four star generals, are not making this an issue. It is because they know it is not legitimate.

The mover of this bill stated that members of the CF and RCMP could use their EI contributions to fund his proposed changes to the pension plans. He argued that members make EI contributions but are not eligible to receive benefits. He is wrong. Members of the CF can and do collect EI benefits and they are subject to the same rules and restrictions as other Canadians.

If a member of the CF is asked to leave early, he or she may be eligible to receive EI. As well, CF members are eligible to collect EI while on maternity and parental leave. Put simply, my hon. friend is incorrect. There are no surplus EI benefits that could fund the proposed changes and all this would do is take away EI benefits from members.

I said earlier that the Canadian government has a responsibility to care for the members of our military and RCMP, but we also have a responsibility to Canadian taxpayers, who already pay approximately 75% of the CF plan's pension costs. That responsibility is through the sure, careful stewardship of the money they entrust to us.

Fortunately our duties to CF and RCMP members and to Canadian taxpayers are not incompatible. As someone who has been collecting a force's pension since I was 47, I can assure members that our plan provides a generous return for our premiums.

I am proud of my service and I am proud of the people with whom I served. I am also very proud of the men and women in uniform today. They do amazing work. I will try not to be too hard on the hon. member for Sackville—Eastern Shore. I will give him credit for sincerely caring about our service members, but this is not the right or responsible way to proceed. Bill C-201 should not be supported.

[Megan Leslie, NDP, Halifax, NS]

Mr. Speaker, of course, we respect your ruling, but it is still important to continue this debate. It really is our hope that through debate, the government will be convinced that enacting this legislation is not about cost but that it is about what is just and fair and the right thing to do.

I would like to thank the member for Sackville—Eastern Shore for his tireless work on behalf of our country's veterans. I would like to take a moment to acknowledge any veterans or retired RCMP officers who I know are watching the progress of this bill. I thank them for their service.

I have a particular interest in the bill because of the presence of CFB Halifax in my riding. CFB Halifax is home to over 10,000 military and civilian employees. It is home of the east coast navy and it is also the largest employer in the riding of Halifax. These men and women work hard every day defending our country and they deserve to be looked after when their service is ended.

We all have veterans and retired RCMP officers in our ridings. It is incumbent upon us to make sure that we support them during missions but also when they return home. Whether it is providing support for post-traumatic stress disorder for soldiers and personnel returning from war in Afghanistan or ensuring that elderly veterans have access to health care and adequate housing, we have a special responsibility to those who give their lives in defence of this country. One of the best ways that we can signal our respect and appreciation to those who risk their lives for our protection is to end the unfair clawback on their pensions.

As my colleague already mentioned, Canadian Forces personnel and RCMP officers have had their pensions greatly reduced over the past four years when the Canada pension plan was integrated with their own service pensions. This decision was made despite the special circumstances that these workers face in their day-to-day lives, the impact on their families and the extreme risks involved.

Bill C-201 would correct this wrong. It has wide support including the Royal Canadian Legion, the Army, Navy and Air Force Veterans of Canada Association and the Air Force Association of Canada. This issue is also very important to Nova Scotians. In 2006, the province of Nova Scotia adopted a resolution urging “--the Government of Canada to investigate this matter immediately and end the unfair policy of benefit reduction to our veterans of the military and the RCMP”. That was 2006 and today the need for this change is even more pressing given the decline in value of many of our pensions.

Many of my constituents have written, asking that I support the bill. I would like to share their words because their words are so compelling. One currently serving member of the armed forces had this to say:

I'm putting my hope in a better future with you. I am passing on the words that are shared and currently on the minds of many currently serving veterans and retired veterans.

I would like to know if we will have your support and your party's support when this bill comes to be voted on. It is an injustice, an inequality to all who serve their county. How can MPs who are voted in by the people, who are ensured that their pensions (after serving a very short time) are not clawed back, yet are not ensuring the same for those who serve and protect this country.Please do not let this injustice continue.

That is from Lori Belle MacKinnon who is a currently serving member of the Canadian Forces.

Another writer, a retired RCMP officer, simply, but effectively wrote:

I respectfully request you support Bill C-201 and also request you seek support from other members of your party to do so.

That is from Noel Nurse, an RCMP officer from 1968-98. There we have it. Their message is clear. Their message is simple.

Veterans and retirees know that what has happened with their pensions is anything but fair. It is time to right that wrong. I would like to encourage all members of the House to join me in support of the bill. We parliamentarians, regardless of our political stripe, have one thing in common. We serve. We come here as elected representatives to serve Canadians. Our service is rewarded with a pension that is not clawed back. But sadly, members of the RCMP and armed forces are not rewarded in the same way and their service is far greater than ours as they risk their lives for us.

Recently, I had the extraordinary opportunity to witness the service of military personnel firsthand. Captain Josée Kurtz took command of HMCS Halifax in April in her namesake city. Captain Kurtz is the first woman to command a Canadian warship and she invited 12 women to join her at sea on her inaugural trip. I would like to take a moment in this honourable House to congratulate Captain Kurtz for her exceptional service.

During my 24 hours on the Halifax, I had the opportunity to talk to many of her crew, from the cooks to the XO, from the mechanics to the coxswain. These men and women are truly in service and they are proud to do it. It is exceptional service.

I want to be able to look them in the eye and be able to tell them that we respect their service enough to enact this legislation. I am proud to be a member of a party that supports members of our armed forces by ensuring that they are taken care of when their service is ended, and a party that takes its responsibility for parliamentary oversight of military missions seriously.

With Bill C-201, we have an opportunity to take the “Support our Troops” message from symbolic ribbons and magnets, and turn it into tangible support by recognizing the work that these great Canadians do in ensuring that they can have dignity in retirement. It is just, it is fair, and it is the right thing to do. It is the least we can do.

[Scott Andrews, Liberal, Avalon, NL]

Mr. Speaker, I would like to thank my colleague for Sackville—Eastern Shore for the work he has done on this bill and to bring attention to this matter. Throughout the course of the debate we will have over the next little while, we will see if a royal recommendation is necessary. However, I would like to thank him for the work that he has done. He works very hard in n the veterans' affairs committee and I have learned a lot from him.

Bill C-201 calls for the elimination of the deduction from the annuity for retired and disabled Canadian Forces members and RCMP members paid under the Canadian Forces Superannuation Act.

Over the next 10 minutes I will talk a bit about the bill but I first would like to talk about being a member of the veterans affairs committee. This is my first time elected to Parliament and I am proud to be a member of the veterans affairs committee. It is an interesting committee. As a young person, I get to learn a lot about our veterans, what they have given to this country and some of the challenges that they are going through right now.

We are currently studying how we treat veterans in our country and we are looking at what other countries are doing to see how we can do better. I know we have some veterans here with us today. It is very important that we look at the work and how much veterans have contributed to our country.

The veterans affairs committee is looking at the VIP program, a very important program that provides some services to veterans. Hopefully, we will get to review the Veterans Bill of Rights in the near future to see how we can improve on it and make it a little bit better. We are also talking about the post-traumatic stress disorder that a lot of our current veterans who come back from theatres of war overseas are dealing with. It is a very important issue.

We must not forget what our veterans have given to their country. I would like to quote from the bottom of an email that I received from Mr. Graham Pike. He said:

Definition of a veteran - Whether active duty, retired or reserve - is someone who, at one point in his/her life signed a blank cheque made payable to "The People of Canada", for an amount "up to and including my life”.

A lot of veterans have put a lot on the line for this country and we must not forget that and we must thank them for it.

I will give a brief history of where we have come from to get to this stage. The CPP and other acts were introduced in 1965 and 1966. This is where the two pension plans have sort of merged into one pension plan for our Canadian Forces. When this was discussed and put forward to these members, I do not really know, from my research, whether people knew what we were signing on to back then. It is now almost 40 years later and it is time to review it.

The buzzwords like “stacking” and “integrating” were used at the time. I do not think we fully knew the circumstances and impact of that at that particular time. It is time for us to review it. Some members at the time might have said that they were part of the liability of this when it was signed onto. However, just because it was done then does not mean we cannot take the time to review it now. I think that is why it is important that we support this bill and get it to committee so we can have some further debate and get some more the facts out on it.

It amazes me when we try to put into perspective what we are talking about here. I had a conversation with a gentleman from my riding, Mr. Frank Sullivan, a retired Canadian Forces soldier. He put into perspective what this would actually mean to him in real dollar amounts. In January 2009, a statement came from his Canadian Forces pension stating that when he reached 65 years of age his military pension would be reduced to $651 per month. He was also informed that indexing of the benefit applicable to this portion would also cease to be paid. When he spoke to the old age pension division, he was informed that his pension from there would $516 per month when he reached 65. He would lose $135 per month in income when he reached the age of 65. Now that might not sound like a lot but for those on fixed pensions and those who have contributed to both plans all their lives that is a fair chunk of money.

That is what we are looking at. That puts a dollar amount on just one month for one particular veteran who has looked at this and it is of some concern to him.

We are doing this because of that. We cannot be afraid to revisit and have another look at what was done in the past. We all agree that we must enhance benefits for our veterans for what they have given to our great country.

As politicians, we might as well be honest. It is important to be realistic about this. For those who may be watching or listening to the debate, they should know that if the bill passes and it goes to committee, it will not suddenly fix things overnight. It is not as easy as that. We need to review and look at what it would cost. We are currently in difficult economic times so we need to be creative on how we fix this problem. I am sure there are a number of solutions that we could look forward to in trying to fix this problem.

It is important, as parliamentarians, that we look at all plans and, if it has to be costed, that we look at how much it will cost and where we can come up with the money. We might as well be honest with each other because sometimes it is nice to float these ideas out there but we need to be realistic about this and put some thought into this. This is why it is good to have this debate and send it to committee. I know from my dealings in committee, we get to have a closer look at things, call in some officials, talk to different experts in the field and ask them how we can fix this problem. This problem has been ongoing for some time. Do we look at it on a go forward basis? Do we look at it on how we can go retroactively? There are a number of different aspects that we can look at the committee stage.

We owe it to the men and women who have served our country to look at the bill, give it a fair hearing and support it in principle. We can then look at it on a go forward basis. Is this something from this point onward? Is this something that we should give to anyone currently retiring? There are many different aspects of how we could fix this situation.

I read a backgrounder on this by retired Colonel Jim Lumsden. He did a lot of work on this. Reading it and getting our heads around this particular proposal, he comes up with some suggestions on what we may do. To put it in his words, he said:

It is clear that members of the Canadian Forces have been unfairly dealt with by the unilateral decision to integrate their CFSA and CPP contributions....

That makes sense. A lot of Canadians pay into two pension plans and this is what is called integrating or stacking when they get one. It is kind of frustrating. In some particular organizations it has been negotiated away over years and their unions deal with that for them. I am not quite sure if at the time there were unions that looked at these sorts of things or it was something that was unilaterally done.

However, we need to seriously look at it and then, at the very least, allow members to choose whether they want to integrate it or use the stacking. We need to look at all this.

Three of the recommendations that retired Colonel Lumsden made were: the amount deducted from existing effective annuants, pensioners, the CFSA at age 65 be restored immediately; the practice of integrating contributions be ceased for present serving members; and the stacking provision of contributions be implemented at an individual's option.

We need to focus on that and we need to send the bill to committee. It is a pleasure to support the bill and I look forward to speaking to it again when it gets to committee.

[The Deputy Speaker, Conservative, Andrew Scheer]

I am now prepared to rule on the point of order raised on March 25, 2009, by the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons concerning the requirement for a royal recommendation for Bill C-201, An Act to amend the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act (deletion of deduction from annuity), standing in the name of the hon. member for Sackville-Eastern Shore.

I would like to thank the parliamentary secretary to the government House leader for having raised this important matter, as well as the member for Sackville—Eastern Shore for his comments.

In drawing the attention of the House to this matter, the parliamentary secretary pointed out that existing provisions of the Canadian Forces Superannuation Act and the RCMP Superannuation Act provide retiring members of the armed forces and the RCMP with bridge benefits between the time of their retirement and the time at which they reach age 65. The bridge benefits provide these retirees with an amount which is equivalent to the amount which they receive under the Canada pension plan when they become eligible for CPP benefits at age 65.

The current provisions of the two pension plans eliminate the bridge benefits at age 65, when CPP benefits begin. The effect of C-201 would be to continue those bridge benefits after age 65 in addition to the benefits for which they are eligible under CPP.

As members will know, a proposed new and distinct government expenditure must be accompanied by a royal recommendation. Additionally, a royal recommendation is also required when an expenditure obligation not covered by existing authorities, is proposed.

In the present case, it is quite clear that the continuation of these benefits would result in the creation of a new government expenditure obligation with respect to the two pension funds.

The parliamentary secretary estimated that the adoption of Bill C-201 would increase the pension liability of the Canadian Forces by $5.5 billion and of the RCMP by $1.7 billion. He noted further that while payments are currently made from the existing pension funds, the government is responsible for the payment of any shortfall out of the consolidated revenue fund.

In his intervention, the member for Sackville—Eastern Shore acknowledged the need for a royal recommendation and he recommended that the matter be given close attention by the government.

After reviewing the issue, the Chair can only subscribe to the arguments made by the two interveners. Simply put, the expenditure obligation which the government would assume if Bill C-201 were adopted is not currently authorized.

I am, therefore, obliged to rule that due to the proposed creation of a new government expenditure obligation, Bill C-201 does require a royal recommendation. Consequently, I will decline to put the question on third reading of this bill in its present form unless a royal recommendation is received.

Today, however, the debate is on the motion for second reading and this motion shall be put to a vote at the close of the second reading debate.