Evidence of meeting #38 for Natural Resources in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was employees.
A recording is available from Parliament.
Dominique Laporte Executive Director, Pensions and Benefits Sector, Treasury Board Secretariat
Thank you. I have nothing to add, as that was accurate.
NDP
Chris Charlton NDP Hamilton Mountain, ON
Is there any guarantee, then, that the pension plan of the new hires will be comparable to the pension plan that existing employees will have for those three years?
Or let me put it into the more negative: is it possible that whereas existing employees will have a defined benefit plan, new hires may actually find themselves in a position where they have a defined contribution plan? Is that possible?
Director General, AECL Restructuring, Department of Natural Resources
It will be the responsibility of the Canadian Nuclear Laboratories management at that time to determine the pension plan that should be in place.
NDP
Chris Charlton NDP Hamilton Mountain, ON
So I take that as a yes. It is possible that one group of employees would have a defined benefit plan and another would have a defined contribution plan?
Director General, AECL Restructuring, Department of Natural Resources
It's not impossible. It would be the responsibility of the company, which would be under private sector ownership at that point, to determine the pension plan that fits the needs at that time.
NDP
Chris Charlton NDP Hamilton Mountain, ON
Okay. I still think I'm hearing you say yes, that is possible. Right?
Director General, AECL Restructuring, Department of Natural Resources
It is possible.
NDP
Chris Charlton NDP Hamilton Mountain, ON
Given the trends in industry generally, where there is a move away from defined benefit plans and a move toward defined contribution plans, what do you think the impact would be in the workplace of essentially allowing the creation of a two-tier pension plan through this legislation?
Director General, AECL Restructuring, Department of Natural Resources
I think it will be up to the company to look at the compensation package as a whole at that time. The pension plan of course is a key component. It's key for employees, and we heard that as part of stakeholder engagement with these employees. It's a key concern of theirs, and we understand that.
As we go through this process the laboratories will carry on very important missions; the minister has been quite clear about that. A science and technology mission and the decommissioning and waste management mission are ongoing. To deliver these successfully the laboratories will need highly skilled employees. They will need the expertise. In order to retain and attract this expertise and to deliver successful products they will need these employees.
They will have to come up with a compensation package that will be commensurate with their success.
I cannot prejudge what this will be at this point, but I know that to be successful the private sector will have to come up with an attractive compensation package.
NDP
Chris Charlton NDP Hamilton Mountain, ON
I think you're getting right to the heart of my question. I am profoundly worried that in an industry like the nuclear industry it is in our best interest to attract the best and the brightest and obviously one of the tools we have for doing that is our compensation package. Pensions are a key part of that compensation package.
I'm wondering why your approach to the pension issue was not to keep all employees on a par in the three-year transition period, not to have them all in the same pension plan, which would obviously have an impact on negotiations down the road as well. You're creating one pension plan for all employees and they would all be in the same position as they negotiated the pension plan after the three-year transition period. I wonder if you could just speak to the rationale for not including new hires in the same plan.
Director General, AECL Restructuring, Department of Natural Resources
I might defer to my colleague from the Treasury Board Secretariat for the rules of the game, but once an entity moves from the public service to the private sector they are not eligible to participate in the public service pension plan. These are the existing legislative requirements.
David Vicente Senior Program Analyst, Program Analyst and Regulatory Policy, Pension and Benefit Sector, Treasury Board Secretariat
From the legislation we see that this transitional coverage is based on the model that has been used before, so the transitional coverage is meant to transition the existing employees, the existing members of the pension plan, to a successor plan.
There is no such transition for new hires. Therefore, we haven't previously applied transitional coverage to new hires who are brought on after a transfer date.
NDP
Chris Charlton NDP Hamilton Mountain, ON
Okay. But that's a conscious decision not to do that. There's nothing prohibiting you from doing that.
Somewhere a decision was made that we would not just leave everybody on a par for the three transitional years and that new hires would be treated differently. You're saying it's simply because that's how it was done in the past, so we're going to apply that same model here. There's no rationale specific to this situation?
Senior Program Analyst, Program Analyst and Regulatory Policy, Pension and Benefit Sector, Treasury Board Secretariat
The rationale is the same for the existing members of the plan. So, yes, there was a conscious decision to go along with the same model.
Conservative
The Chair Conservative Leon Benoit
Thank you, Ms. Charlton.
Do you have a very short question to follow? Go ahead.
Conservative
The Chair Conservative Leon Benoit
Then I will go to Mr. Regan.
Thank you, Ms. Charlton.
Mr. Regan, you have up to seven minutes.
Liberal
Geoff Regan Liberal Halifax West, NS
I thank Ms. Charlton for her honesty.
Mr. Chair, I'll be focusing on the extractive sector provisions here. I want to begin by making it clear that the Liberal Party welcomes these efforts to make corporations more responsible and accountable for their actions in developing countries. We hope these measures will empower local citizens and enable host governments to manage their resource development effectively.
As you know, Mr. Chair, and as my colleagues will know, it's of course something that my colleague from Scarborough—Guildwood has championed for years. We also believe it's generally an important measure that will allow Canadian companies to enhance their reputation for openness and transparency. Overall, they have a very good reputation around the world.
However, while division 28 is a step we think in the right direction, it could have been stronger. I'm sure we'll hear from witnesses with a number of proposed amendments, in all likelihood, to correct some of the flaws in this legislation.
Let me begin with my first question to Mr. Pearson and his colleagues. NRCan documents and the bill itself refer to division 28 as being done to “fight...corruption”, and background documents use the phrase “deter corruption”. I assume you're talking about situations where companies are operating in third world countries. What evidence is there, if any, of corrupt practices within this sector inside Canada?
Director General, External Relations, Science and Policy Integration Sector, Department of Natural Resources
In this case, it does apply in the domestic context as well.
Prime Minister Cameron, when he asked G-8 leaders to support the common global standard, pointed to a lot of corruption that's happening in developing countries. For example, in Nigeria, they went through a process whereby they determined that over $8 billion had gone missing. This was determined through the extractive industry's transparency initiative, which reconciles the payments industry makes to government with what government says they receive. They went through that process and determined that over $8 billion had gone missing. They've recovered most of it, although there's just less than a billion that they're still searching for.
But Prime Minister Cameron also asked that leaders walk the talk and apply it in the domestic context as well. In this case, Canada, along with other G-8 leaders, agreed to implement these standards. It affects them both domestically and abroad to create a level playing field in the global context.
Liberal
Geoff Regan Liberal Halifax West, NS
You've given me the rationale for applying this domestically, but I haven't heard an answer to my question, which is, what evidence, if any, is there of corrupt practices in this sector inside Canada?
Director General, External Relations, Science and Policy Integration Sector, Department of Natural Resources
I don't have any evidence of that.
Liberal
Geoff Regan Liberal Halifax West, NS
Thank you.
The legislation doesn't provide for the creation of an office of the ombudsman and therefore doesn't give that office a responsibility, obviously, for developing guidelines for best practices or the ability to table an annual report in the House of Commons. Why did the department decide not to go the ombudsman route? What sort of discussion took place around that issue? For instance, was it proposed by the department and nixed by the minister's office?
Director General, External Relations, Science and Policy Integration Sector, Department of Natural Resources
As I said in my opening comments, we're trying to align with the common global standard. The issue of the ombudsman has not been raised in this regard in terms of the legislation that's being brought forward in the U.K. and the European Union. With respect to the U.S. legislation, that was not a key focus. It's about companies reporting, on an annual basis, their payments to allow citizens in these countries to be informed.