House of Commons Hansard #198 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was internet.

Topics

Ways And MeansRoutine Proceedings

3:15 p.m.

The Deputy Speaker

In my opinion the yeas have it.

And more than five members having risen:

Ways And MeansRoutine Proceedings

3:15 p.m.

The Deputy Speaker

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

Ways And MeansRoutine Proceedings

3:25 p.m.

The Deputy Speaker

I declare the motion carried.

(Motion agreed to.)

Ways And MeansRoutine Proceedings

3:25 p.m.

Reform

Randy White Reform Fraser Valley West, BC

Mr. Speaker, sorry, I was unavoidably detained when the question was put talking about the government's lack of integrity with the press.

The House resumed from May 9, 1995, consideration of the motion that Bill C-85, an act to amend the Members of Parliament Retiring Allowances Act and to provide for the continuation of a certain provision, be read the second time and referred to a committee and on the motion that the question be now put.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:25 p.m.

Reform

Elwin Hermanson Reform Kindersley—Lloydminster, SK

Mr. Speaker, on a point of order, I understand that probably the standing orders were not broken by the fact that we held a vote without a 30-minute bell. However, I am concerned that a precedent is being set that is not wise. There was not all party agreement that we suspend the normal 30-minute bell. It does make it difficult to keep members here and to allow them to exercise their franchise in the proper manner.

I urge that the House be a little more considerate about rushing the vote on some of these matters.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:25 p.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Mr. Speaker, I am sure the hon. member, who is a very experienced member now, knows the rules of the House.

The timing of the bells for any vote is governed by mutual agreement of the two whips who take the vote at the time, namely the chief government whip and the chief opposition whip. That is clearly in our standing orders. I am sure all hon. members, particularly someone who holds the position of House leader, know that.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:25 p.m.

The Deputy Speaker

Points were made on both sides. All members know what the rules provide, as was indicated by the government whip. If we are to have an atmosphere of better cordiality in this Parliament than in the last Parliament, I would hope that in the future the whips of the government and the official opposition would indicate to the House leader of the Reform Party that there will not be a bell held after the vote. I would hope that all members would respect one another on that issue.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:25 p.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Mr. Speaker, with respect, the courtesy call was extended to the members yesterday. What the Speaker has indicated as advice was followed, even though there was no requirement in the rules of the House. That courtesy was extended because we are a very courteous government.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:25 p.m.

Reform

Elwin Hermanson Reform Kindersley—Lloydminster, SK

Mr. Speaker, there were some discussions yesterday. There was some indication that there may or may not be a 30-minute bell, a 15-minute bell, or an immediate walkdown. Some of us were left to believe that there might be a period of waiting, perhaps 15 minutes, before we would come in and vote. That was not clearly communicated to my caucus. That

is why I am concerned about a precedent being set. It does not provide an atmosphere where we can work co-operatively together.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:25 p.m.

The Deputy Speaker

The hon. member for Wild Rose has two minutes left in his intervention.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:25 p.m.

Reform

Myron Thompson Reform Wild Rose, AB

Mr. Speaker, I will spend the last two minutes repeating some of the things I said yesterday.

The main reason I will be voting against this bill is because I want to represent the people in my riding. It is difficult for people across the way to understand that, but the people in my riding say there should be no more gold plated pensions. They would like to see a pension but they would like it to be the same as what they have to accept in the private sector. That is completely fair.

Although I cannot represent other people I have spoken in about 37 ridings, most of which are Liberal ridings. I would like to express on behalf of the people in those ridings that they too would like to see their members opt out of these types of pension plans. However they know that it will not happen. There happens to be a little problem. Possibly it is greed.

I want to make sure the government will hear the people when they ask for a plan to be provided that is compatible with the private sector. The government should consider establishing a separate group, a third party of the citizenry. Let the employers decide what they should pay in the way of pensions, salaries, and a few other things.

The Reform Party is prepared to do that. If Bloc members and the Liberals would like to come aboard, we could select people from the private sector and meet together to determine what we should receive in the way of pay, pensions and so on. We would certainly go along with the idea and I would accept whatever they decide.

As a reminder to the Liberals, especially to my friend from Kingston who seems to have forgotten, he works for the people of Kingston. They do not work for him. Let them set the salary and the pension. That is the fair way of doing it.

As leaders let us set the example. Everyone in the country is required to tighten their belts, to do more with less. For heaven's sake, the least we can do is set the example by refusing the pension. We could set examples in a lot of other ways as well. We could cut totally unnecessary trips to Asia, Africa, Europe and all over the world. It would result in a saving of $1.8 million, which would help meet the needs of many people in the country who are suffering for one reason or another.

There are many things to consider. Take a look at my frame. It crawls into an economy seat every time I get on a plane. If you think that is fun, trade sizes for a day and I will let you try it. It is a sacrifice to do it and I do not mind. I will continue to do it.

All of us need to sit back and realize that we are asking Canadians to help us solve the problem created by the politicians of the past in terms of the country's debt and deficits. Let us get our act together, think of our future, think of the children we are raising and think of our grandchildren. Let us act like statesmen and forget the politics and the silliness.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:30 p.m.

Reform

Jack Frazer Reform Saanich—Gulf Islands, BC

Mr. Speaker, I am pleased today to be able to speak to Bill C-85, an act to amend the Members of Parliament Retiring Allowances Act and to provide for the continuation of a certain provision. Bill C-85, which will amend the Members of Parliament Retiring Allowances Act, has been touted by the Prime Minister as a great pension reform package that members of Parliament deserve because they are so underpaid.

If anything raises the ire of Canadians, it is the scandalously generous pension provisions given to members of Parliament. Even more disturbing is the attempt to conceal from the public just how rich the pension plan remains even after the proposed changes.

The government reports in the public accounts, part II, how much MPs spend on office expenditures, travel and their salaries. It is very interesting to note they refuse to tell the public how much the members of Parliament pension scheme costs.

A former Liberal member introduced a private member's bill which would allow the auditor general to report more frequently so that waste and mistakes would be more readily exposed. This process would open the operations of government to closer scrutiny by Parliament on behalf of the people. What happened? The government said: "No way. We do not want closer scrutiny. We do not want the public to know what is really happening with their money". Then it gave the hon. member a pat on the back and sent him to the other place.

Regrettably, the cost of the members of Parliament pension is not readily available to anyone.

Even though this new law will reduce the accrual rate for benefits by 1 per cent, that is from 5 per cent to 4 per cent, it still remains double the rate found in registered plans in the private sector. There will be provisions for full inflation compensation whereas 78.3 per cent of private sector pensions have no automatic adjustment for inflation.

Furthermore, the members of Parliament pension account earns a generous 10 per cent interest so the costs attributed to the plan are effectively lowered. Yet MPs who choose to accept the one-time offer to opt out of the plan will be paid only 4 per cent on their contributions.

It is there but little is said about the higher rate of pensions for MPs leaving office with more than six years service. Even if this

group were to opt out of the plan, they will be paid their pension for the period prior to October 1993 under the conditions of the old pension plan.

Further bringing the new plan into question, MPs elected in the next Parliament will be required to participate in the pension plan. There will be no future open ended choice to say no to the gravy train. Why is the option to choose not to participate in the plan closed off at this time?

Fifty-two Reform members of Parliament have forced this issue of pension reform, but the government's presented reforms are really an insult to Canadians. Until the government changes the retirement compensation account, the account the government and previous governments have used to pay benefits greater than those allowed under a registered pension plan provided for by the Income Tax Act, Reformers and some other principal members of Parliament refuse to be part of the charade and deception. We are not willing to ask Canadians to pay for this pension windfall.

Right now, after only 10 years, members of Parliament can receive a pension worth half their salary. Anyone else would have to work and contribute to their pension plan for at least 25 years to achieve this and for most, without inflation protection.

Also under the new plan taxpayers still pay $3.60 for every $1 the member of Parliament pays into his or her retirement pension. As a comparison, federal public servants are matched dollar for dollar, a ratio often seen in the private sector as well.

The report by Sobeco, Ernst and Young suggested that pension benefits be limited to retirees who are at least 60 years of age, but the Prime Minister said members of Parliament have earned this pension even after only six years. Granted, for members who came into this House after October 1993, the new law would set eligibility at a minimum age of 55 for benefits accrued after this bill becomes law. Five more years to age 60 was too long to wait. The outside packaging looks okay, but if we open it up the box is empty.

Reformers do not need to hire consultants to tell them that the members of Parliament pension should be reined in, just listen to the ordinary working people of all ages and income ranges. They have told government what they think, yet the government seems unwilling to listen to Canadian citizens. It studied the issue and studied the issue, all the while taunting us with a carrot, promising real change.

We know the amendments are a done deal. The Liberals have the numbers in government to do what they want, but the one thing they can be sure of is that this issue will not go away. It will still be an election issue next time around so they will still have to answer to the voters.

A number of hon. government members have pointed their fingers this way and made allegations that some Reform members are double dipping. We on this side of the House have made it clear that we object to double dipping. We recognize that Bill C-85 attempts to remove double dipping practices and we commend the government for its move in this aspect.

Former members of Parliament who were given political appointments to work at another federal job should not draw pay for that job while continuing to draw their MP pensions. Private sector workers must earn their pensions by working 25 or more years before they are able to collect benefits. Again I point out some members of Parliament need only have served six years to collect these generous packages.

Individuals in the private sector who have earned and are collecting pensions can and do take other employment while continuing to collect their pensions. After all, they have had to win the job they occupy; it is not given to them as a patronage payoff. In this aspect, I had to win this job by convincing the voters of my constituency that I was their best choice to represent them here in Parliament.

Liberals are quick to point out that some Reform members, myself included, collect military pensions while at the same time earning salaries as members of Parliament. I collect an annuity for more than 36 years service in the Royal Canadian Air Force and the Canadian Armed Forces. I paid into that superannuation account with matching government contributions for 35 of those 36 years. Benefits accrued at 2 per cent per year, which is the normal rate for pension plans in the private sector.

The annuity I draw comes from a superannuation fund paid into by former and present members of the RCAF and Canadian Armed Forces over many years. That fund currently stands at just under $30 billion so the notion that my annuity is a gift out of the taxpayer's pocket is simply untrue. My annuity has been fully paid for and hon. members should be aware of that. Some of my colleagues also earn pensions and for many years made contributions to their pension plans.

What some government members are trying to do is compare apples and oranges. These pensions are a far cry from the generous pensions doled out to former members of Parliament who receive appointments to serve on various government boards or commissions.

Canada is among the world's most generous countries when it comes to members of Parliament pensions. There is no other country in the world which pays parliamentarians a pension after serving only six years in office, with no minimum age to retire.

In December 1993 the leader of the Reform Party wrote to the Prime Minister saying:

Reform MPs sincerely believe that the credibility of Parliament in dealing with the financial crisis facing the federal government will be increased if every parliamentary caucus reviews the MPs' pension, pay and perks package and agrees to significant reductions.

By doing so, the 35th Parliament can increase its moral authority to appeal to other Canadians to make the sacrifices necessary to permit a balancing of the federal budget.

In Bill C-85 government has fallen sorely short of achieving appropriate and necessary member of Parliament pension reforms. Surely it should reconsider.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:40 p.m.

Reform

Diane Ablonczy Reform Calgary North, AB

Mr. Speaker, I remind Canadians watching the debate today that we are discussing the acceptability of the proposed pension for members of Parliament. As they are probably aware, the Liberal government introduced some changes to the former pension system. The changes have been set out in great detail in a number of speeches today and I am not proposing to repeat them.

The issue is very simple. Is the proposed plan fair and reasonable? Is what is being proposed as a pension for members of Parliament fair and reasonable? The answer is very clear. No, it is not fair and reasonable. There are a number of reasons for this.

My colleague from Saanich-Gulf Islands and a number of other colleagues have set out the reasons yet again. It is very clear that what is proposed is not fair and reasonable. There are three areas in which the plan is not fair and reasonable.

It is incredibly rich. It allows a level of pension that is illegal for any other Canadian. If any other institution or organization proposed to give its employees this kind of a pension it would be prosecuted. It is flatly illegal. Somehow the richness for members of Parliament is okay. The lawmakers can have different rules. It simply flies in the face of what is right and what is just.

It is an inequitable system. No other Canadians in the country could ever expect to have this kind of a pension plan, yet to a very large degree those self same Canadians will have to pay for the pension plan that is being proposed.

A constituent phoned my office yesterday and said that he had worked for a major oil company for 30 years. He said his pension was not any better alongside an MP who has worked only six years. He wondered how that could be, and he had to pay for it.

It is clearly inequitable for lawmakers to have a pension and benefits that are unavailable to any other Canadian. These benefits are fully indexed. There are virtually no other pension plans available anywhere in the country that are tied to the level of inflation. Yet lawmakers feel they are entitled to that. This is not a fair and reasonable plan.

The sad thing about this is that the people who have to pay the shot for this plan have no say in how the plan is structured. In any other plan, most or at least half of the benefits are paid for by the person receiving them. In this particular plan the people receiving the benefits pay one-fifth or one-sixth of the benefits they will eventually receive. The people who have to pay the lion's share in this plan have no voice in the negotiations whatsoever, except what we might choose to give them.

My friends in the Bloc would say it is very bad labour relations when one party simply sets down the benefits they expect to take and the other side has to pay them. That is clearly inequitable and unreasonable.

In spite of the fact that this plan is not fair and reasonable, the Liberals go through a song and dance saying that yes it is. We should examine those arguments because as Canadians we need to judge whether or not this is a good and fair piece of legislation. Reformers are saying loudly that it is not. I have given some of the reasons and my colleagues have given more.

Let us see what the Liberals are saying. The first thing they say is: "At least we did something". For those who might be watching these debates and who are students of political science, they might see this as a very interesting and excellent example of spin doctoring, of how a clearly untenable and indefensible proposal by a government is put forward as being equitable and defensible.

First the Liberals say: "At least we did something. We made some cutbacks. We made some changes. We brought in reform". I might add this was thanks to Reform members who have kept raising this issue over and over in the House. I dare say the Liberals would have been quite happy to forget it if we had not pushed them to the mat and said: "You must do something about this MP pension plan. Canadians simply will not stand for it to be left as it is".

The second thing they say is: "We never promised to do anything more than this. We have done everything we said we would do". I suggest the real issue is whether it was the right thing to do. Is that not what we are here for, to do the right thing? Or are we here to do the least thing possible so we can say we did something? I think Canadians should judge.

Then there was a very interesting argument brought up by the President of the Treasury Board. He said that they were doing this because they care about their families and the people who are saying this is not a good plan should really think about whether they really care about their families. All Canadians care very much about their families, particularly the Canadians who are going to have to pay the shot for this pension plan that will benefit the families of a very few. It is the families of Canadians

and Canadians themselves and fairness for all that we should thinking about, not just ourselves and our families.

I find it rather remarkable that somehow a plan that is unfair, greedy and beyond what any other Canadian family could ever hope for is excused and justified on the basis that we care about our families. I do not think so.

Then the argument is brought up that almost half of the MPs do not qualify for a pension anyway. So? We are talking about the people who do qualify for a pension. Is the pension for those who do qualify fair and reasonable? The answer is no.

Then the President of the Treasury Board brought up studies that propose MPs should earn more. The President of the Treasury Board said that we do not dare do that; we do not dare follow the recommendations of those studies. What he actually said was interesting if one follows political speak.

He said that it is not functionally possible at this time. Then he suggests it is okay to stay unreasonable on the pension side because we cannot do anything about the other recommendations. I do not think that two wrongs make a right in the minds of Canadians. Reform is against increasing either the salary or letting the pension stay unreasonable, particularly in light of the fact that the country is not living within its means.

The next argument is interesting, which is the great sacrifice MPs make to serve the public good. Being an MP I can say there is some sacrifice involved, although I do not notice any shortage of people willing and able to make that sacrifice. There are literally millions of Canadians who make sacrifices to serve the public good.

This week in the House we rose in a standing ovation to acknowledge and show appreciation for the Canadians who made the ultimate sacrifice. They went overseas and had the roar of guns in their ears. They suffered the separation from their loved ones, fear for their lives, danger and injury for an unlimited period of time. They made a sacrifice.

What about the people in the private sector who go all over the world to pursue trade opportunities on behalf of their companies, suffering from jet lag and all of the deprivations of travel? What about the millions of Canadians who sacrifice in both their personal and professional lives to give care and guidance to their children?

Sacrifice is a part of life. For MPs in the House to say we are making a sacrifice and therefore we should be given special consideration is ludicrous. It will not wash with Canadians.

It might be interesting for members of the House to know about a survey I have been doing in my riding. I asked whether they supported MPs receiving the benefits outlined in the information I gave them. Eighty-seven per cent answered no. Question: Do you agree with your MP's decision to opt out of the MP pension plan and provide for her own retirement through a personal RRSP governed by the same guidelines as all other Canadians? Answer yes: 88.7 per cent. Question: Do you think MP pension benefits should be reduced retroactively to reflect Canada's current fiscal situation? Answer yes: 87 per cent.

It is very clear that Canadians are fed up with politicians who say one thing and do another, who decry any suggestion of a two tier health care system. They bleed from every pore at the mere suggestion, but a two tier pension system that benefits them is just fine.

It is time we showed some leadership in the House and put our money where our mouth is. Reformers are prepared to do that. I challenge government members to show that we want to do what is right and fair for the country and we want to be on an equal playing field with the citizens of this country. We are prepared to do that in the matter of the pension plan.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:50 p.m.

Reform

Darrel Stinson Reform Okanagan—Shuswap, BC

Mr. Speaker, I congratulate my colleague who just spoke. That was well said. I hope hon. members on the other side were listening.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:50 p.m.

Reform

Elwin Hermanson Reform Kindersley—Lloydminster, SK

Mr. Speaker, I rise on a point of order. This is a serious matter. We do not have a quorum and that concerns me.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:50 p.m.

The Deputy Speaker

There does not appear to be a quorum. Call in the members.

And the bells having rung:

Members Of Parliament Retiring Allowances ActGovernment Orders

3:55 p.m.

The Deputy Speaker

There is now a quorum. Resuming debate.

Members Of Parliament Retiring Allowances ActGovernment Orders

3:55 p.m.

Reform

Darrel Stinson Reform Okanagan—Shuswap, BC

Mr. Speaker, when Europeans first came to Canada everyone had such a short life expectancy and society as a whole was so poor that people basically worked hard from childhood until they died. Some third world nations are still like that, but the industrialized world has made enough advances in public health and medicine that diseases which used to claim huge numbers of people have been either controlled or eliminated in developed countries.

We generally expect to live long and healthy lives. For example, as of 1992 the Canadian life expectancy for women was 81.2 years while some say that we overworked men nevertheless manage to survive for an expected span of 74.9 years.

In addition to improved health, there are other major achievements of developed countries. We generate sufficient wealth so that both our children and our seniors no longer need to be involved in the direct production of wealth. We provide free public education for our young people at least to the age of 16.

We pride ourselves on the fact that child labour is a thing of the past in our modern industrialized world.

At the other end of life, industrialized nations also provide a special time when the wealth of society allows the elderly to be free from the need to produce more wealth. For Canadians age 65 and older, advances in medicine and improved nutrition have also made it possible for them to enjoy improved health and independence.

I had the opportunity last week to drop in at the beautiful lakeside community of Sorrento in my riding of Okanagan-Shuswap. The 220 members of their old age pensioners branch had raised enough money with no government grants of any kind to build a 30 by 60 foot addition to their original meeting place so that they could have room to enjoy such things as carpet bowling, snooker and darts. They also did the majority of the physical work themselves, erecting the walls and rafters.

Some of these seniors I am speaking of are in their 80s. I was impressed not only with their energy but the enthusiasm they showed and the sincere concern they had for Canada. The seniors told me they are also concerned about whether Canada can continue to provide pensions on which they all depend because of excessive government spending, such as the gold plated MP pension plans.

Of course some of these seniors have been thrifty and fortunate enough to own their own homes which keeps their monthly expenses down. Some seniors receive cheques from company pension plans or interest payments from their life savings, but many live on nationally funded pensions.

Low income seniors, especially elderly widows, tell me they have great worries about adequate housing, health care, home care after hospitalization, and public transportation. Nevertheless overall this is a generation of people who lived through the great depression. They know how to make do as they say, meaning that they can get by on very little without complaining.

For example, the monthly maximum payment this quarter for single seniors receiving old age security and the government's income supplement is $850 a month. For married seniors both of whom are over age 65, the monthly maximum payment this quarter from the federal pension and income supplement combined is $689 a month each. In other words, senior couples are living on less than $1,400 per month or $16,542 per year from which they must also pay taxes.

Nationally, StatsCan set the low income cut off at a point where more than 54.7 per cent of income is required to pay for food, shelter and clothing. In rural areas, for 1993 the low income cut off for families of two was $14,238. For small towns, the level was $16,329. Therefore it is only in rural parts of Canada that seniors living on OAS and GIS escape poverty. The majority of Canadians live in cities. The low income cut off for a family of two shoots up to $20,603 in cities like Vancouver, Toronto and Montreal. Remember, married seniors get $4,000 less than that.

I want to contrast the pensions of those average Canadian seniors with members of Parliament, who have been in the remarkable position of being able to pass the very law that determines how much pension they will receive. How would reasonable MPs decide on their pensions? Would they look at what is done in other countries? For example, in the United Kingdom parliamentarians contribute 6 per cent of their salaries and are eligible for pension after 55 when age plus years of service equal 80. The United States congressmen contribute 1.3 per cent and can qualify at age 50 with 20 years service. Obviously Canadian MPs ignored those standards, both for the present pensions and their so-called reforms.

Bill C-85 at long last proposes to reform MPs' pensions so that they cannot qualify until age 55. It also ends double dipping. For both these improvements I congratulate the government. However, these were merely two small baby steps toward badly needed major strides that should have been performed in reforming MPs' pensions in this country.

Our goal should be nothing other than a pension plan similar to those allowed to everyday Canadian seniors. For them the Income Tax Act continues to set a 6 per cent limit on pension contributions. However, under Bill C-85 MPs' pension contributions will only drop from the present 11 per cent to 9 per cent. It is still 50 per cent higher than allowed for the private sector and it is still costing taxpayers millions of dollars.

Another point I wish to raise concerns the opting out possibility. The entire pension plan should be significantly reformed so that no MP in good conscience would see any need to opt out. Without those complete down to earth reforms to the MPs' pension plan, every newly elected member of Parliament must have the option to turn down the pension plan, which through Bill C-85 has merely gone from being solid gold to being gold-plated. In my opinion, even after passage of Bill C-85 MPs' pensions will remain a national disgrace.

When the Liberals were elected the Canadian people accepted them as they would at a wedding. They looked at them as either the bride or the groom. They gave them the ring to run this country. Unfortunately, since then, through acts such as this piddling around with the MPs' pension plan, I am afraid the Liberal government has given the Canadian public the finger.

We do not have to delve too deeply to see what it is costing the Canadian public today to keep what these MPs seem to say is

their right. Does any member of Parliament think that the only reason he came to this place was in order to get a pension and his only way of being paid back is through that pension? I would like to know what their commitment to Canada is. I find it hard to accept that there is anyone in this House who would use that.

I hear nothing from the other side with regard to this debate. I have yet to hear anyone on the other side stand up to address this. I find this strange. Are they afraid the Canadian public would not listen to what they say, or if it did listen it would want to turf them out? I think it is probably the latter. Hopefully I am wrong. I would sincerely like to see a member from the other side rise and speak to this issue. The Canadian public would also like to hear them speak to this issue. We have had only smoke and mirrors from the other side with respect to this. Perhaps it is time they clear the smoke away and tell us exactly what they have done to reform the MPs' pension plan and what the cost will now be to the Canadian taxpayers, who perceive the MPs as living off them like parasites.

It is sad to say that in this country we have fallen that badly. The obligation should be for someone from the government side to stand up and support their own pension scheme. If they would go out and talk to seniors and see how much they have contributed to the country, with no guarantees, they would be really surprised. Maybe we should be a little ashamed of what we have allowed to happen in this country.

Members Of Parliament Retiring Allowances ActGovernment Orders

4:05 p.m.

Reform

Herb Grubel Reform Capilano—Howe Sound, BC

Mr. Speaker, I take this opportunity to put some perspective on the controversy. I will end with a demand for greater openness in the process of setting the compensation for members of Parliament.

In economics, one of the most difficult problems we have is to explain the relative wages of people in different occupations. Why does a dishwasher earn typically only the minimum wage? Why do miners earn considerably more than that? What should be the right pay for teachers, nurses, doctors, lawyers, and MPs? Who knows?

In economics we have some answers. One side explains that generally compensation for workers is higher where greater skill and training are required. People who go to occupations that require only high school graduation will typically get a lower level of pay than those who had to graduate from university. Certainly those in graduate and medical school occupations make more than those with lower educations. I think this is a widely accepted principle. There is no problem with fairness. That is generally accepted in society.

Also accepted in society, and the data show that this can be verified, is that the riskier a job, risks like illness and accident, the higher should be the pay. The greater the discomfort, if you have to work in the middle of the night or in a dirty environment, then pay tends to be higher than when it is in a pleasant environment.

Generally these elements are verified by empirical studies. Yet even at a time when there was no government to appeal to there were differences in wages, which could not be explained by these factors alone. Economists know a structure of wages of different-

Members Of Parliament Retiring Allowances ActGovernment Orders

4:05 p.m.

The Deputy Speaker

Point of order, the hon. member for Elk Island.

Members Of Parliament Retiring Allowances ActGovernment Orders

4:05 p.m.

Reform

Ken Epp Reform Elk Island, AB

Mr. Speaker, the member for Capilano-Howe Sound has very important things to say and I think there should be more than two Liberals present to hear it. I call quorum.

Members Of Parliament Retiring Allowances ActGovernment Orders

4:05 p.m.

The Deputy Speaker

I will ask the clerk to count the members present.

And the count having been taken:

Members Of Parliament Retiring Allowances ActGovernment Orders

4:05 p.m.

The Deputy Speaker

We have a quorum.

The interval does not come off the member's time.

Members Of Parliament Retiring Allowances ActGovernment Orders

4:05 p.m.

Reform

Herb Grubel Reform Capilano—Howe Sound, BC

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.