Mr. Speaker, I was trying to put some perspective on the debate about pensions by suggesting that what has happened in Canada and many other democracies is we do not have a transparent system.
In free markets, when there is no government to step in constantly and listen to people about their unhappiness about their wages, there is a very important equilibrium achieved in markets. Individuals under their own free will can walk up to someone and say they would like to work as a cook, as a miner, or whatever it is, and he or she gets employed. They are obviously better off than with anything else they would have done. They are happy. They have had a decision. They have maximized their welfare.
One can imagine that in a world like that, without any government, we can develop a situation where there are just the number of cooks who want to work at the wage that is being offered them to be cooks. There are just the number of nurses. There will be neither people who are looking for jobs nor will there be shortages. The wages that come out of such a competitive system may be interpreted as being efficient and in some sense representing the best distribution of wages our society can arrive at.
We all know that especially in the post-war years governments have taken it upon themselves to correct the outcome of the market. We have opened our ears as members of Parliament
to people who do not like the structure that has come from a free market where people under complete freedom, talking to each other and making contracts without coercion, have produced this outcome.
We hear stories that are so appealing they always bring tears to my eyes. I hear farmers telling me: "My income was only so much. My wage was only so much. Do you know how important my job is? If it was not for us farmers there would not be any food and we would all die. Therefore, I think I should earn more". I do not have to elaborate on what the nurses and doctors say and what the teachers say would happen to the next generation if they were not there.
All of this sounds very good. The people who say this all the time have themselves completely convinced that the wages a free society and free exchange have produced are not right. They need more and more. This has created the kind of division in society we have today, inefficiencies and problems. The wages are set so high that there are long waiting lists of people who wish to join that occupation and others where the wages are too low and they cannot find workers for it. It is a sad thing. I believe that decentralized decision making was much better. However, we are now in an ideology that says the government has a right to step in.
I want to now turn to a special problem that is associated with setting the wages of people like members of Parliament, where a government has to be involved. Here the problem is that until now there has never been a shortage of people who want to apply for the job. I do not know what the right wage is. I challenge anyone. The big problem is that the wage that is set will determine on average what quality of skills, intelligence, and energy you get of people who apply for the job and ultimately will end up in the Chamber.
I think almost everybody would agree if today the wages for MPs were $20,000. What we would get on the one hand would be people who could not make more than $20,000 in the private market. On the other hand, we would get very rich people to whom this would be a hobby. It would be a totally undesirable mix of people here in Parliament. However, who is to say what is the right wage? We cannot ask members of Parliament any more than we can ask farmers, nurses, doctors or teachers. They will all say they have the most important job in society and it should be very, very high. Of course it cannot be done like that.
What is the next best solution? Historically, we always have to come up with some wage. What is the right wage? The Government of Canada and all democratic governments have taken recourse to appointing commissions. The other day another commission report was released on that subject. I looked back. There must have been commissions in the history of the Parliament of Canada at least every four or five years since the founding of Parliament. They have all said that the wages should be higher than they are.
To the best of my memory they said the wage should be set around $100,000 or $120,000 a year. I am not endorsing this. I do not know what the right answer is.
One of the big problems comes once these wages are announced by these wise people. They are typically appointed with the consent of a broad spectrum of people. Canadians believe these wages are high relative to the norm.
I have recently been having a lot of fun asking people I meet at dinner parties or at political conventions what the average income is of a Canadian working in manufacturing. Very few know it is $32,000. I ask what income does one have to earn to belong to the top 10 per cent of income earners in Canada. It is $52,000. The kind of people one meets when one is a member of Parliament typically say it is somewhere around $80,000 or $100,000. Some young students who come to lobby me tell me it is $1 million. It is $52,000 or $53,000.
It is quite clear the kind of problem we are facing as a Parliament in our system. People who have the best in mind for Canada say that if we want quality people in Parliament, we should set a wage that right now would probably be putting them in the top 1 or 2 per cent of the income distribution. Yet the majority of Canadians have lower wages.
It was not malice on the part of past Parliaments that took a way out of this which is now beginning to haunt us. They have set wages which are within the realm of acceptability in public opinion. Then they have begun to hide compensation in order to achieve a level of compensation that is consistent with what these wise people have said it should be. That is why my whip said the other day that if we look at the hidden compensation we would reach a level that is a little below what these commissions have recommended recently.
As is typical with all these procedures without checks, once members of Parliament in recent years found out they could get away with hiding compensation, they went overboard. They went overboard in the form of pensions. It was clearly a mistake on their part to have gone as far as they have by overshooting the amount of compensation hidden in the pension.
What I conclude from this analysis of our current problems is that the issue faced by Parliament today is not the narrow focus on the pension; it is what my colleague the whip has said. We need a more rational structure, a transparent structure of the compensation for members of Parliament.
We should also be open with the people of Canada. In today's age of high levels of education, of communication, of understanding, I am personally convinced and have enough confidence in the democratic system that people would accept the judgment of those wise people and say: "Yes, we want that quality of people to run for Parliament. We do not want it to be
reserved for only the rich or people who don't have anything else to do. We want to attract good people". They would probably go for a compensation that is very close to what we have now, but a much lower pension. That would be consistent with what the last commission said.
In my judgment we need a more transparent, open system that would put all of the cards on the table. We would end up with this being accepted by the people of Canada.