Evidence of meeting #60 for Public Accounts in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was rcmp.
A recording is available from Parliament.
C/Supt Fraser Macaulay
There is no doubt, Mr. Laforest, that since the work of this Committee began, many things have changed. That was Ms. George's opinion in 2003.
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Of course, the information being given or that we are hearing about for the first time is extremely complex. The Public Accounts Committee has been hearing witnesses on this for almost a month and a half. At one point, we received testimony or documentation which referred to the use of a fund called N2020, I believe.
Are you in a position to tell us what the connection is between that fund and the summary we were given today? At what point was that fund used in a way that could be described as dishonest, if that is the case?
C/Supt Fraser Macaulay
I believe it was in 2002. It was in 2002 that they began to use the N2020 fund, which is really just an accounting code for the pension fund.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
And that code should normally have been used only for—
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
—payments to be made to Great-West or Morneau Sobeco?
C/Supt Fraser Macaulay
No, it was only to be used for pension administration, which was handled by Morneau Sobeco. They decided — given that the cost was 800 000 $ a year, rather than 400 000 $ a year, and that they had noted that 40 p. 100 of insured participants already receiving a pension were still alive — that they would use the pension fund to pay those costs.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
So, it was used completely unnecessarily. For example, we know that it was used for contracts awarded to people who were very close to some of the individuals who have been quoted.
Morneau Sobeco charged approximately 800 000 $ a year, which was twice as much as what Great-West Life was charging to administer the pension and insurance plans.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
So, they decided to take 40 p. 100 of the administration costs out of the pension fund. First of all, in your opinion, is money currently missing from the pension fund, given that a considerable amount of money was taken from the fund to pay the administrative costs of another plan? Are RCMP retirees currently being penalized as a result of that or will they be in future?
C/Supt Fraser Macaulay
I can tell you today that Mr. Gauvin, as well as the auditors, have said that the money was paid back. I, personally, have no idea whether it was. They would have to come here and state that the money was returned to the fund. I imagine that the large amounts, like the 540 000 $, have been returned.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
If that money was returned to the fund, where did the money come from?
C/Supt Fraser Macaulay
That is the problem. The money that was returned was taken out of the fund, so it was really taken directly out of the pockets of members. That is really the major issue for us. In 1953, administrative costs were paid by the Treasury Board. In 1995, all of that changed, and they started dipping into members' pockets. In 1995, it was 157 000 $ a year. But it is now up to 800 000 $ plus.
C/Supt Fraser Macaulay
That money was never returned. We are still paying out of our own pockets.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
If the shortfalls were paid back—As you say, Mr. Gauvin stated that.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
Thank you, Mr. Chairman.
Chief Superintendent, you said that this illegal, immoral, or unapproved system is still going on today. Is that a correct statement?
Conservative
John Williams Conservative Edmonton—St. Albert, AB
So that correction has not been made, even though on deck (g) there was a meeting where Commissioner Gork was totally surprised that it was going on and said that things will get fixed.
Are you saying that things are not fixed?
C/Supt Fraser Macaulay
I think that's the reason these two gentlemen are here today. They can tell you where we're at, as an organization, in addressing that.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
Okay, I just have a quick question. Assistant Commissioner Mole, has it been fixed, or is it still being fixed, or will it be fixed?
D/Commr Kevin Mole
It's in the process of being fixed. We're working closely with Treasury Board with regard to the authority for the plan.
