Madam Speaker, I am pleased to speak to the bill today.
This bill to amend the Members of Parliament Retiring Allowances Act raised by my friend in the Conservative Party is a positive step and long overdue. The MPs pension plan is part of the reason Canadians are disillusioned with politics and with politicians.
The vote on October 26, 1993 to change the government in Ottawa was as a result of many things, not the least of which was the need to reform the MPs gold plated pension plan. Often in the House when the government enjoys a clear majority, the majority overrides voices in the opposition who are often and only repeating the frustrations of Canadians.
Government members protest constantly against the elected representatives who are only doing what they promised Canadians: to get rid of the obscene MPs pension plan for one. When I hear Liberal MPs protestations I am reminded of a phrase from literature to the effect: methinks thou doth protest too much.
It seems strange to be defending a Conservative motion which in essence has been part of the Reform Party platform over the last few years. It seems strange when other Reform MPs and I were elected on the basis of our promises and MP pension reform was high on the list.
One of the promises I made to constituents time and time again was to fight the current MP pension plan and change the system so that retiring MPs, those whom the voters have stated they have no confidence in, those who lost their jobs in the October federal election, would not be eligible for hefty pensions, at least not eligible until age 60.
Politicians must realize they should have no more rights than other Canadians in the private sector like the employees of Woodward's department store who had to face a changing world with no guarantees and certainly no gold plated pension plan.
Defeated and retiring MPs will cost Canadians close to $2 million per year in pension payments on top of current pension payouts. Is this right? No, of course it is not right. The payouts are obscene. If the government hopes to restore confidence in the political process it must take quick action to scrap this ridiculous pension plan.
Part of our accountability and responsibility as members of Parliament must be reflected in our own pension plan. According to the Liberal Party platform the incoming government supports a review of the lucrative pension scheme with a special look at the age at which pensions begin to be collected. That is a good sign.
The pension plan is indefensible, even in good times when Ottawa's vaults are overflowing and the public is feeling wonderfully generous toward its politicians. In bad times when many Canadians are suffering and the government is hard pressed to find basic programs, this plan amounts to little more than robbery. There are probably east European dictators who never had it so good as retiring Canadian members of Parliament.
MPs should not be setting their own wages nor their own pensions. They should be set by an independent body which reflects a cross-section of Canadians. It could be businessmen, academics, professionals, home workers and many others. No group should police itself in our society or set its own wages when those wages come from the public purse.
It is hoped the Prime Minister will recognize the public hostility to this obscene plan. Premier Ralph Klein recognized the public hostility to a rich pension plan for MLAs in a time of hardship. His decision to kill the Alberta MLAs pension plan was probably the single most important factor in the re-election of the provincial Conservative government. It was also a factor that Prime Minister Kim Campbell fatally ignored when she set up a commission on federal pensions rather than act directly.
The Canadian people who heard former finance minister Michael Wilson promise in 1984 to reduce pensions were not fooled by more promises. Chrétien should take the right example: not Wilson, not Campbell, but that of Klein.
It may be that some form of taxpayer assisted federal pension plan should survive. There may in the end be justifications accepted by the public for a plan to assist politicians in retirement. These can be explored.
This bill does not mention the Reform Party's clause on stopping the indexation of the MPs pension plan. Here we have a pension plan where the Canadian taxpayers have to pay far more than their fair share in contributions. The added insult is in indexing.
Former Conservative cabinet minister Perrin Beatty, only 43, qualifies for a pension of over $70,000 annually until he is 60, at which time it will be adjusted to take into account the preceding 17 years of inflation. The Reform Party which has made MPs pensions an issue estimates that Beatty will collect more than $5 million in pension payments if he lives till 75.
When we become government we will continue as we have started. Even in opposition we have kept our word to the Canadian people. We have taken less in salary or in allowance, forgone other MPs benefits and pushed for changes in many areas, particularly parliamentary reform.
We will continue to fight for changes to the MPs pension plan, but not changes like those made by the previous government in January 1992. Those changes illustrate how excessive MPs benefits are.
One of the changes came about because the MPs benefits exceeded the limits allowed for registration under the Income Tax Act. The federal government therefore had to divide the pension plan into two separate sections to keep it registered. The first section, the retiring allowances account, met the requirements for registration while the second, the compensation arrangement account, fleshed out the plan so the MPs could still receive their lavish benefits.
A 1988 actuarial study of the plan revealed that the contributions made by the politicians, which were matched by the government, would fall $144 million short of paying for the MPs projected benefits. Therefore, in the January 1992 changes the government moved to make the plan self-sufficient.
First, the government provided a cash infusion to make up for the plan's accumulated shortfall, which by that time had risen to $158 million. Second, to ensure no further shortfalls would accumulate, the government had to choose one of a combination of the following scenarios. Either the MPs would have to reduce their pension benefits and/or increase their contributions, or the government would have to increase the amount of tax dollars being funnelled into the plan.
You do not have to be a rocket scientist to figure out which route was chosen. Treasury Board decided that Canadian taxpayers would be more than willing to keep making up the difference so the MPs plan could keep its gold plating.
A ratio of one to one, one to two, but seven to one? While MPs contribute $7,000 to their pension plan on their $64,000 sessional allowance taxpayers have to contribute about $41,000 per year on behalf of each MP.
There is another aspect to the pensions which is equally insupportable, the right of retired MPs to go on collecting a pension even as they collect another federal public salary. I repeat federal. Former NDP leader Ed Broadbent is a good example, collecting both a handsome pension and a large salary, because of his appointment by Mulroney to a human rights agency.
I am listening to the frustrations coming from the other side. Another gross example is former Mulroney cabinet minister Benoit Bouchard who will collect both an MP-