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.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair.

Thank you, as well, for appearing before the committee and answering our questions. My questions will be brief. They may have already been asked, but I will ask them anyways.

Do you know of any groups in the federal public service who receive the same consideration that is being called for or highlighted in Bill C-201, that is, who receive their old age security pension at 65 without having their retirement benefit reduced?

[Laurie Hawn, Conservative, Edmonton Centre, AB]

There's no question veterans deserve to be treated with respect for the service they've given, whether it's to the RCMP, the military, whoever, but the government clearly also has a responsibility to taxpayers, and cost does become an issue at some point. It's been suggested that Bill C-201 could be made cost-neutral by redirecting EI benefits paid by the military, and I presume the RCMP. I pointed out when I was sitting where you are that there are several thousand military members who collect EI every year on maternity leave or parental leave. About half the people who leave the Canadian Forces leave before they're eligible for pension; therefore, they are eligible under the qualification criteria for EI, which would wind up taking those benefits away from those people.

I'll ask again, Mr. Cape and Ms. McKenna-Fleming, what's your understanding of the costs associated with Bill C-201? Ms. McKenna-Fleming, you mentioned a bit about that. Can it be made cost-neutral, and who's going to fund Bill C-201 if it passes?

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Okay.

The government does not support this bill, and obviously that's fair, but that doesn't mean we have any less respect or gratitude for the service of men and women in the Canadian Forces or the RCMP. There are many other pension plans--the Public Service Pension Plan, teachers' plans, provincial pension plans, and so on--that are structured exactly the same way. As far as I know, there are no organizations out there that are lobbying to have people in their pension plans pay for an integrated plan but collect a stacked plan, as is the suggestion with Bill C-201.

Is there anybody else out there campaigning for this kind of stuff, and if not, why not?

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you, Chair, and thanks to the witnesses for coming.

I have a number of questions. It seems to me the discussion on this whole bill has become a little unfocused, for a variety of reasons. We heard from a correctional officer at the last meeting, which is all very nice, but it's not relevant to Bill C-201. We talked about the unique nature of service and the difficulty of service. I've served for 31 years, and I can attest to that and be empathetic and sympathetic to that, but that doesn't replace facts. We've thrown in the red herring about the MP pensions. It's a complete red herring--apples and oranges. There's nothing clawed back from MP pensions because there's no benefit given to MP pensions, so it's a complete red herring.

Mr. Stoffer mentioned pension plans changing. Pension plans change all the time. During my 31 years of service the pension plan has changed probably three or four times. None of those changes amounted to one penny more or less out of my pocket; it was just the terms of the pension.

The disability issue is legitimate, but that, frankly, is another issue that is largely separate from Bill C-201. It's worthy of being discussed, clearly, but it's outside of Bill C-201 for the most part.

I would like to ask Ms. McKenna-Fleming--and maybe Mr. Cape as well, to get the two different perspectives--to clarify what exactly Bill C-201 would do to the Canadian Forces and RCMP pension plans if implemented, and exactly who it would apply to and who it would not apply to.

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

I'm asking you, is that fair? The person with the disability requires those additional funds to handle the day-to-day concerns they have. I've compared this many times to military and RCMP officers across the country. I've seen hundreds of them.

It's about a simple act of fairness. This is just simply wrong. You say they fall through the crack. It's a major hole, sir, it's not a crack. It's a major hole. Bill C-201 addresses it to fix that.

Also, I wouldn't mention SISIP. That's a completely different story.

I thank you very much, sir. I appreciate that. I could go on all day, but I thank you for coming, sir.

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

First of all, thank you to all four of you for coming today. I appreciate it.

Monsieur Tousignant, I don't know if you had a chance to read the testimony from the last hearing, sir, but we had Roddie O'Handley here, a medically released RCMP officer.

I'm going to give you the scenario of two people. As you know, Bill C-201 would end the benefit reduction at 65. It would end the CPP disability reduction as well.

Roddie O'Handley was medically released from the RCMP. At the time, he got 64% of his RCMP pension. Great-West Life topped it up by 11%, to 75%. After two years, Great-West Life said that's it, we're done; you should be applying for CPP disability. He did so, and he received it, an amount of over $16,000.

The first call he gets is from the RCMP annuity branch: you owe us $11,000. He had to pay all that back.

The second call he's going to get is from Great-West Life. They are going to ask for over $8,000.

Mr. O'Handley received $16,000 from CPP disability and will owe $19,000. He will owe, because of his disability, $3,000 more.

On top of that, when he hits 65, CPP disability will stop. We heard testimony from previous witnesses that he'll lose even more money at age 65.

This happened to him and to Jim Hill. It also happens to members of the military and everything else.

I just ask you one simple question. Is it fair to these men and women who serve in the RCMP and the military that because they're disabled they will lose money on the payback and then, at age 65, will lose money again? Is that at all fair?

Second, you had indicated, Madam, that there are people who advise the minister on these very pensions. A few years ago, the pension was changed from 20 years of service to 25 years.

May I ask who suggested that to the government at the time? Why was it done? Were the pensions in trouble? Did they have to be increased in this regard? If not, then why was that changed?

Also, what was the additional cost to the membership for having that change in there?

This is for new hires of the military. Those who were there before were grandfathered at 20 years, but anyone joining now would have to wait 25 years.

Those are my questions.

Again, I thank you all very much for coming.

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

Last week, we heard from correctional officers. They were more or less asking for the same rights as those extended to veterans and RCMP members under Bill C-201. They also argue that they experience problems inherent to a difficult job. They want the years of service to be 20 or 25 years because their job is very physically demanding. Post-traumatic stress syndrome is also something they suffer from.

I would like to hear your thoughts on that.

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

With respect to doing away with the deduction from annuity, which affects retired members of the RCMP, you do not have any study that says, for example, how much a 65-year-old person should receive based on their income? You do not have any numbers that would allow you to assess the scope of Bill C-201?

[Judy Sgro, Liberal, York West, ON]

Thank you very much, Mr. Chair.

We're pleased to have the individuals here this morning that will help us to ensure, as we deal with Bill C-201, that we fully understand it.

You know this issue, so I'm not going to have to tell you about it. I've been here ten years this month, and I've heard about this issue ever since I've been here, partly because we have elected officials raising it, and because many of us who were involved in veterans' affairs have travelled and we hear about it. We hear it from the widows, but we also hear it from other members who feel they have not been treated fairly. For me, that's the issue I would like to see us get on the record clearly in this hour that we have, so that we can clear up any misunderstandings. We can't go back. I'm terribly practical. I don't view us as having the ability to go back and try to change things, but I'm very interested in what we can do as we go forward.

Could you address some of the issues that have happened in the past and why this continues to be an issue for many people when it comes to the superannuation and the bridging issue? I'd like each and every one of you to address that.

[The Chair, Conservative, David Sweet]

Bonjour, mesdames et messieurs. Good morning, ladies and gentlemen.

We're at the 33rd meeting of the Standing Committee on Veterans Affairs, and we're again considering Bill C-201.

I advise the committee that the time we have scheduled on the agenda for clause-by-clause consideration says 10:30 a.m. If at all possible, we should try to target it for 10:15 a.m. Of course, if we need to take time for questions, it will be exhausted, but let's try to target for 10:15 a.m. We have three significant pieces of business I'd like to deal with by the end of the meeting. In fact, I think there are some committee members who would like me to deal with them, too.

Without further delay, then, let me introduce the witnesses we have here today, and we'll allow them to make some opening remarks. We have Joan Arnold, senior director, legislation, authorities and litigation, pensions legislation development, pensions and benefit sector, office of the chief human resources officer.

Do you get that all on one business card?

[Dewey Smith, Senior Policy Advisor-Housing, Housing and Infrastructure Directorate, Assembly of First Nations]

Thank you very much.

I'd like to thank the members of the committee for the opportunity to present a first nation perspective on Bill C-340.

The Assembly of First Nations is a nationally representative organization of 630-plus first nation communities throughout the country. The AFN is an operational arm designed to present the views of first nations through their leaders. The message that the AFN national chief clearly presents is that our communities and leadership know we face real and daunting daily issues that require our diligence and our commitment.

But a critical look at our current environment reveals the daily pressing crisis faced by first nation leaders and communities in relation to housing. We understand the importance of a role in establishing a collaborative and inclusive condition to create real change, and that's where we see the opportunity of this bill. It's an open opportunity for dialogue that will allow the voices of people and communities to come forward.

That having been said, I will point out that there's a clear opportunity for those of common purpose to come together to define common strategies and solutions.

First nation leadership has stated the importance of representing housing interests of their first nation members whether they live on-reserve or off-reserve. There's always been a distinct barrier for first nation leadership in representing their interests in the provincial/municipal environment. If we look at the transition of people from on-reserve to off-reserve, and the problems encountered in relation to the urban environment by those who are leaving real problems on first nation reserves for real problems off-reserve, we must give credence to the fact that we need to pay attention to this transition.

We don't wish to sit by the wayside and watch strategies, policies, programs, and activities continue to be developed and created by the Government of Canada and then imposed as external interventions. Up to this point, if you take a look at the involvement of first nations in the National Housing Act, this has been going on for 50 years plus and there has never been a national strategy.

There has never been an inclusion of first nations in the development of policy, in the thinking of departments or agencies of the Government of Canada, and we would ask the fundamental question: why not? We see this bill as an opportunity to shift the thinking and say that if there is going to be a solution, there's going to be a solution that's derived from the direct involvement of first nations, which are an immediate part of the problem.

The AFN has stated in the past and continues to state today that there's a need for multilateral dialogue to discuss all housing issues found in the continuum of housing need. I guess the statement is that first nations don't expect federal departments and agencies to represent their interests in the dialogue at multilateral tables concerning the downloading of social housing to the provinces and to the municipalities without the inclusion of those who are directly involved in the problem in the first place.

We feel that we have a direct interest. It's essential that first nations be included in this multilateral dialogue with the federal government and its provincial, territorial, and municipal counterparts, and that we do not have the federal government departments and agencies acting on our behalf in relation to that dialogue.

We would like to see a strategy that lays out a comprehensive viewpoint allowing for first nation considerations and for supportive capacity development measures to achieve those considerations.

We state our full support for Bill C-304 and do so in a spirit of optimism that reflects what we know can take place if we create a collaborative environment that allows for strategies to emerge within this multi-jurisdictional environment. Again, we don't expect government departments and agencies on the federal side to represent the interests of first nations while they are excluded from the formation of the policies and strategies.

I'd reinforce that this has been one of the significant factors to our detriment over the last number of years. We have not been included in policy decisions in the manner in which the federal government proceeds with programs, initiatives, activities, and other efforts.

We would ask that a national strategy meet the continuum of housing needs. We know there's an effort to focus first nations on private home ownership at the expense of such things as hidden homelessness and the deterioration of the social housing portfolio. We want to make sure that we're meeting the needs for emergency shelters for the elderly and disabled, for community-owned assets, social housing stock, and rent-to-own and private home ownership.

This national strategy needs to acknowledge what secure, adequate, accessible, and affordable housing is in the first place, because what's being presented in the bill and what the function and the actions are of federal departments and agencies constitute two different things. That needs to be considered.

When we get down to steps and measures that need to be taken and that we fully support, we want to link first nation leadership to existing and emerging multilateral tables of dialogue that will result in the ability to harmonize programs and services between on-reserve and off-reserve. Currently they're distinctly separated and have no relationship with one another. I'm not sure whether that's by design or not.

We want to participate in a long-term strategy that addresses housing needs for more culturally appropriate social housing, transitional housing for women and men, second-stage housing, and mental health programs that involve directly those whom the programs are meant to serve--not policy by exclusion and not external interventions.

We want to create new relationships that allow first nations to access programs, activities, and initiatives in the off-reserve environment. It's not the people of first nations who need to access them in a community urban or rural environment; it's leadership and community that need to sit down at these multilateral dialogue tables to determine how a seamless transition can occur between on-reserve and off-reserve and to determine how the services and programs that take place can take place.

Lastly, we want to create a first nation institutional framework for housing that assists in developing appropriate capacities for sustainable housing strategies, and we want to link that framework to the off-reserve multi-jurisdictional environment.

The bottom line is that the first nation perspective is one of stepping up to the plate and saying that we want to be included, that we add value to the effort, and that a national strategy is a very fine goal and we are providing a commitment, I think, to participating and actively moving the issue forward.

I thank you for your consideration.

[Roger Gaudet, Bloc, Montcalm, QC]

Fine.

Would it be possible to get a table? How much will an ordinary corrections officer who works for 35 years and retires at age 55 get? At age 60, how much will they get from the Quebec Pension Plan or another source of income? And last, at age 65, how much will they receive? To make a decision on Bill C-201, I have to have something concrete.

I would like to have the same thing for the RCMP and the Canadian Forces. I'm asking for the same thing from all four of you. Even you, Mr. O'Handley, I would like to have figures about your specific case. Sometimes, when it comes to figures, we can get lost. I would like to have a complete table of your case. I'm not talking about your deafness, that's another thing. But you are retired. I don't know how old you were when you retired and how long you have been retired, how much you got at age 60 and age 65. I would like to have your complete table, to understand properly.

[Pierre Mallette]

Thank you for the question.

First, it will always be difficult for corrections officers, because their occupation is not well known. I don't know how many 7-year-olds or 8- or 9-year-olds might tell their parents they would like to be corrections officers. On the other hand, the job we do puts us into all sorts of situations where we have to make decisions quickly. We work with firearms. We have to control situations that can become extremely serious. Sometimes, we have to go into cells to get an inmate who has committed suicide. We have to work with contaminated blood. We have to work with criminal gangs, inmates who are involved in crime both outside and inside the institutions. There are also threats. There are circumstances that mean that this occupation deserves as much attention as police services or the military.

We too are asking why we are excluded from Bill C-201. We should have been included from the outset. That is sort of what we came here to say this morning. Don't forget us, we exist and we want to be included in this bill because we think that could solve some problems. You undoubtedly know that corrections officers have been trying to improve their pension plan since 2002. We are trying to solve some problems. In fact, a corrections officer is used up after 25 years inside institutions. It is an occupation that is extremely difficult, physically and mentally. Often, inmates go to prison when they are young, but we get on in years, and physical intervention becomes difficult to tolerate.

We really believe that these steps should allow us to be able to retire earlier. In fact, our pension plan allows us to leave after 25 years' service. So we can leave at 50, after 25 years' service. We can leave, but there is no fairness. A public servant retires after a 35-year career, and while we can leave earlier, the money isn't there.

Bill C-201, in fact, prevents a reduction for people who are 65. We think that when someone retires at 50, that is when they most need to have the benefit of this. We are here as participants and we want to tell you not to forget us because we exist and we have been calling for this since 2002. We would like to be heard and to improve the pension plan for our correctional officer members.

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

Good morning, everyone. Thank you for your excellent presentation.

My questions are for you, Mr. Mallette. If I understand correctly, your group is not affected by Bill C-201. You have pointed to certain elements, in particular the fact that corrections officers experience significant events in terms of stress, for example when an officer goes to get someone who has committed suicide in prison. There are various situations relating to stress. The suicide rate is, in fact, relatively high among corrections officers. There is also occupational burnout, and all sorts of very difficult situations that can resemble situations experienced by other occupational groups, such as the members of the Canadian Forces and members of the RCMP.

Could you explain why you are not affected by this bill, to start with, and why you should be?

[John Labelle, Military and Royal Canadian Mounted Police Veteran, As an Individual]

If I speak too loudly, simply nudge me and I'll try to move back from the microphone. Thank you.

Mr. David Sweet, chairman of the board, members of the committee, ladies and gentlemen...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). On behalf of Mr. Roger Boutin, Mel Pittman, and numerous committees across Canada, I wish to thank you for the opportunity to speak to the veterans affairs committee regarding member of Parliament Mr. Peter Stoffer's Bill C-201.

The purpose of this initiative is to convince the Prime Minister of Canada to take action to terminate the benefit reduction formula that has been applied to our military and RCMP veterans' annuity when they attain age 65, or sooner if they become disabled. The Government of Canada must right a wrong by amending the Canadian Forces Superannuation Act and the RCMP Superannuation Act of a miscalculation in justice and fairness that now affects our retired veterans and their families during their golden years.

The 2006-07 annual pension report indicated that there were 84,728 military pensioners and 12,331 RCMP pensioners. The total cost for the Canadian Forces veterans' pension benefits was $2.2 billion and the cost of the RCMP pensioners' benefits was $451 million. It is estimated that the termination of the CPP benefit reduction program may affect 50,000 pensioned veterans.

You are aware that the Canada Pension Plan was introduced in 1965-66. Its intention was to provide another source for an income security program, supplementing old age security. Military and RCMP veterans maintain that in 1965-66 the Government of Canada, deliberately or otherwise, imposed on military and RCMP personnel a gross injustice and unfairness by merging rather than stacking their pension contributions and benefits and not providing any options to them.

Canadian Forces superannuation facts. On January 1, 1966, the Canadian Forces employee contribution rate was reduced from 9.3% to 7.5%. Hence, a “so-called” reduced annuity contribution to our Canadian Forces superannuation has accumulated a military annuity surplus of over $20 billion. It clearly indicates that our contributions to the Canadian Forces superannuation are sufficient to pay for our benefits without a reduction clause.

Canada Pension Plan facts. With regard to the CPP, the employee and the employer each paid half of the required contributions. In 1966 the government-levied rate of contribution for military personnel was 1.8% of basic earnings. Over the years the rate substantially increased to 4.95%. Military and RCMP personnel have always made the required maximum contribution to the plan. Recently the president and chief executive officer of the Canada Pension Plan Investment Board advised that the CPP fund is financially healthy, with a surplus of $120 billion.

It is a known fact that veterans were dealt with in a negligent fashion. In those past years senior military officers were not appointed an assistant deputy minister to represent them. Veterans were not properly briefed on the pitfalls associated with the merging of their contributions. In short, democracy did not occur. Veterans were not given any options. They always made the required maximum contributions. Veterans' contributions were listed separately on their pay guides, therefore giving them a false sense of financial security.

The words “bridge benefits” are not listed in the manual A-FN-109-001/ID-001, and furthermore the manual was never made available to serving personnel. The bridge benefit term was never heard of prior to the establishment of our campaign of pension justice and fairness. When pensioners are age 73, the government has recovered all of its funds and yet continues to collect a 30% gratuity/penalty for the rest of their lives.

Veterans are getting “100% of what they paid for”. Well, they are not getting what they paid for or their pension plan would not have accumulated a $20 billion surplus. With all due respect, veterans and their families have given far more of themselves to the security of our country than any other segment of the population. Therefore, in their golden years, they deserve to be treated with fairness, justice, and dignity. Military/RCMP veterans are a distinct and different government provider, and they have encountered a varying number of issues on a regular basis.

What financial value can we associate to loss of spousal income opportunity, therefore loss of spousal CPP benefits; loss of overtime revenues with the loss of the member’s second income opportunity; and loss of ability to purchase a home and be mortgage-free during a career? Veterans are a distinct government provider. They have served far abroad on numerous 16-hour days of operational requirements, 24/7. Veterans have often faced dangerous conditions—health hazards, and extended family separation with elevated levels of stress—and Canadian Forces/RCMP personnel were prepared to give the ultimate sacrifice to our country.

On depletion of CFSA surplus funds, the Government of Canada has withdrawn a $16.5 billion surplus from the military annuity funds to pay down the national debt. In 2003-04, reports indicate that a further $630 million surplus was also retired from our pension account. The 2004-05 pension report indicates that no funds were withdrawn from the account and that there was a surplus of $1.099 billion recorded in that year. Surplus pension funds have accumulated and were sufficient to pay for the termination of the CPP benefit reduction formula.

Why are pensioners' indexing revenues reduced at age 65? Why are disabled veterans' pensions reduced? Why reduce disabled veterans' pensions indexing revenues? Why establish the CPP plan if it benefits no one?

With respect to suggested solutions—and I'm sure they are not the only ones—to solve the pension benefit reduction issue that affects over 50,000 veterans at age 65, we suggest the following. One, stop depleting the surpluses in our pension account. Two, to stabilize the depleted funds in our pension account, transfer 15% of serving personnel contributions from the employment insurance account to the pension account. We receive no benefits from the employment insurance account. Three, eliminate the pension reduction formula to military/RCMP veterans' annuity when they attain age 65, or sooner if they become disabled. And four, retroactive payments are not requested.

To endorse the campaign, we have received very positive comments of support from our former senior officers. They include Major-General Lewis MacKenzie, the highest decorated officer of the Canadian Forces; Colonel Don Ethell, the highest decorated peacekeeping officer of the Canadian Forces; Commodore David Cogdon; RCMP Deputy Commissioner Larry R. Proke; Mr. Bill Gidley, executive director, RCMP Veterans Association; Chief Warrant Officer John Marr, former Canadian Forces chief warrant officer; Lieutenant Joe Fillion, former Maritime Command chief petty officer; and Chief Petty Officer first class Don Brown, former Maritime Command chief petty officer. A great number of senior officers have clearly supported the initiative that military and RCMP veterans have been mistreated, and the situation needs to be rectified.

This worthwhile initiative continues to grow. Over 112,500 supporters have pronounced their support. The Royal Canadian Legion, with approximately 500,000 members; the Army, Navy, and Air Force Veterans in Canada, with 20,000 members; and the Air Force Association of Canada, with 12,000 members, adopted resolutions at their annual general meetings in 2006 in full support of the initiative.

The late Captain Ed Halayko, national chairman of the Armed Forces Pensioners'/Annuitants' Association of Canada, supported our initiative, and the new national chairman of the AFP-AAC, Tony Huntley, supports our initiative.

We have received support regarding our mission from Mrs. Lillian Morgenthau, founder and president of CARP, Canada’s association for the 50-plus.

Numerous other military associations have declared their support of the objective. We have received support from veterans living in 18 countries. They include England; Mexico; Germany; CYQQ force; Florida; Warsaw, Poland; the Syrian Arab Republic; Greece; the U.K.; the U.S.A.; the Cayman Islands; Afghanistan; South Africa; Iraq; Thailand; Sarajevo, Bosnia; Italy; and Japan.

In conclusion, it is time to put the politics aside. It is time for all members of Parliament to demonstrate their recognition and appreciation in a tangible way to the men and women who have served and are currently serving our country. It is time to take action to terminate this undemocratic, unfair, and unjust treatment of veterans. Terminate this pension benefit reduction that has been imposed on them without fair and open consultation.

This misguided policy violates the principles of democracy, fairness, and justice as it affects the welfare of veterans and their families in their golden years. The committee is requested to send Bill C-201 back to the House of Commons for its third and final debate and vote. All leaders of the House are requested to allow the democratic process to take place by permitting members of Parliament to vote freely when Bill C-201 is presented to the House of Commons for its final vote.

Military and RCMP veterans have gallantly served Canada. They deserve nothing less than to spend their golden years with the pensioned financial dignity that they and their families have earned and paid for in so many different ways and that they so fairly deserve.

It has been over 40 years. Now is the time to resolve this military and RCMP veteran pension issue. This issue affects our disabled and the lower ranks of veterans the most. God bless our military and RCMP veterans, for it is their sacrifices that allow me to speak freely to you today. Let us not forget them.

It has been an honour and a privilege to serve our country, Canada, and we continue to serve today. We shall remember them.

Thank you.