Mr. Speaker, before the break for question period I was speaking to Bill C-85 which is designed to reform the pensions of senators and members of the House of Commons. I was making the point that I was pleased by the fact the double dipping provision was so strong in the proposed legislation.
Previously I mentioned other aspects of the bill which I am sure will be addressed by other members. I should like to spend the time remaining to me dealing with double dipping. I begin by placing on the record a definition of the term double dipping, which has become so widespread in recent months.
When I speak of double dipping I refer to the practice whereby a former member of the House of Commons or a senator simultaneously draws a pension under the Members of Parliament Retiring Allowances Act and is paid in respect of employment or an appointment or a contract for services by the Government of Canada.
In the changes in Bill C-85 the government is carrying through on the promise made in the red book to end the practice of double dipping. Canadians have made it very clear that they find the practice unacceptable. In response to this criticism the government announced early in its mandate that amendments would be made to the pension arrangements for MPs to put a stop to double dipping.
Before we look at the actual proposals in Bill C-85 I should like to say a few more words about the public's concern about former members appointed by the federal government to jobs that some might characterize as being in the gift of the government. These so-called appointments are within the control of every government. The government has recognized that the public views the appointment of a former MP in receipt of a pension to a position of this nature with a good deal of concern.
In this context members present today may wish to take note of the fact that in the case of a number of recent appointments made by the government, appointees who are also former members of Parliament have either taken salary cuts in their new jobs or have made a gift of their pensions to the crown. In the practical day to day sense the double dipping terms of the new legislation have already been put into practice by the government.
The government takes the concerns of Canadians so seriously on the issue that it is putting an end to double dipping even though some view pension entitlements as an earned or accrued right. Viewed as an earned entitlement, some pension experts believe that subsequent employment should have no effect on an individual's pension.
However the government accepts the public's concern regarding the issue and realizes that pensions for former members are and must be viewed in a different light. As I mentioned at the beginning of my remarks, I believe the symbolism of what members of Parliament do is very important.
It would be instructive to begin our examination of the double dipping proposals in Bill C-85 by looking at what type of re-employment will be subject to the new rules. The proposals in the bill are very inclusive. If a former MP entitled to a pension becomes employed in any capacity by the federal crown or by a crown or departmental corporation, the former member is required to report that he or she has obtained the employment. In addition, the report that is made must also reveal how much remuneration will be paid in respect of the employment.
Perhaps at this point I should say a few words about the reporting system, the system of monitoring whether a former member becomes re-employed in the federal sector. The same system applies to a former member who is appointed to a position or obtains a federal contract. It is built upon self-reporting. It is the responsibility of the former member appointed or employed to report that it has occurred and how much remuneration is attached to the job. The government has no desire to see a huge bureaucracy built up in an attempt to monitor the activities of former MPs.
I should like to make one more digression. When I refer to crown corporations and departmental corporations it might be useful for members of the public if I gave an example of each, just to give some idea of the breadth of the new prohibition on double dipping.
Canada Post is an example of a crown corporation and the Atomic Energy Control Board is an example of a departmental corporation. These are the crown corporations that will be covered by the bill. As I said, the same reporting requirement applies to any appointment of a former MP in the federal public sector, that is any appointment under the auspices of the federal crown including crown corporations and departmental corporations. An appointment to judicial office would be included, as would be an appointment to diplomatic office.
Any appointment that may be made by the governor in council is included. Any appointment to any board, tribunal, agency or commission in the public sector is regarded as an appointment to which the double dipping provisions of Bill C-85 will apply.
Finally, it should be noted that any contract for services entered into by a former MP with the federal crown is also covered by the amendments in Bill C-85. The former MP will be required to report that the contract has been entered into and how much remuneration will be paid in respect of the services to be rendered under the contract.
I should also add a further point with regard to the issue of contracts to illustrate how far reaching the pension reforms are. The bill goes one step further than just mandating that a contract between a former MP and the federal crown, broadly defined, must be reported. The bill also includes a provision that seeks to prevent a former MP from establishing a corporation, association, partnership or other entity which then concludes a contract for services with the government for the purposes of avoiding the application of the new double dipping prohibition.
To that end, where a former MP controls a corporation, association or like entity and the entity enters into a contract with the federal crown, Bill C-85 deems that contract to have been entered into by the former MP. As well, the remuneration the former MP must report is deemed, in the words of Bill C-85, "to equal the amount of the salary, fees and other compensation paid to the former member for or in respect of the services provided by the former member under that contract".
Moving on to the subject of remuneration received in respect of employment, appointment or contract, it must be said that the net under the legislation is cast very wide. All remuneration that comes in whole or in part out of the consolidated revenue fund is caught by the proposals of Bill C-85.
In addition, any remuneration paid out of moneys appropriated by Parliament is also included as remuneration that must be reported if it is paid to a former MP entitled to a pension under the Members of Parliament Retiring Allowances Act because the former member has obtained employment, an appointment or a contract with the federal crown.
While the aim of the bill is to cast a wide net in an effort to put an end to double dipping, it is not the government's intention to eliminate the practice in a way that will be unfair to former members in receipt of a pension who obtained employment, were appointed to a position, or entered into a contract for services prior to the coming into force of the amendments.
Perhaps I should mention that the amendments will come into force only when Bill C-85 is approved by both Houses of Parliament and given royal assent.
Another issue of fairness is raised by the amendments. I am referring to the trigger that will activate the double dipping prohibition as proposed in Bill C-85. Previous private members' bills that dealt with the issue of double dipping would have caused former members to lose entitlement to their pensions if they were in receipt of any remuneration from the federal crown.
This would mean that the entire pension would be suspended or abated if a former member earned as little as a dollar a day as a result of employment or appointment. One day's per diem from a part time position would have had this draconian effect.
The government felt that would be very unfair. Therefore the amendments proposed in Bill C-85 have set a ceiling of $5,000. If a former member earns remuneration of less than $5,000 a year, there will be no reduction in his or her pension. If more than $5,000 is earned the pension will be abated dollar for dollar.
The proposal put forth in Bill C-85 is reasonable and allows a former member to earn $5,000 before the double dipping provision is triggered. This will allow a former member to take a very short term appointment or a part time position and suffer no pension loss.
Bill C-85 provides regulations to be made to facilitate the pension reduction. In particular, there will be provision for the recovery of pension overpayments since it is quite likely that where reductions must be made in a former member's pension the actual reduction may not be made at the exact point when the former member commenced to receive remuneration from employment, an appointment or a contract.
I repeat that the government believes the proposals in Bill C-85, which will put an end to double dipping, are fair and effective. They are not retroactive because it would not be fair to change the rules of the game halfway through the game.
The proposals also allow a former member to receive a small amount of remuneration without pension penalty. I think members present will agree that the government has cast a wide net in its efforts to put to an end double dipping. It has been responsive to the concerns of members of the public who made it very clear that they do not approve of the practice.
Immediately following the election I followed pension reform very carefully. I am glad the government has now moved to meet its red book commitments. The double dipping component of the legislation, which I have just described, actually goes beyond what I envisaged was the commitment in the red book. I am delighted to see that.
For myself, as I mentioned at the very beginning of my remarks before the break, I do think that thought should be given to the matter of double dipping in the broadest public sector, elected and unelected officials at the local, provincial, and the federal level. I am delighted that in this legislation we members of Parliament in the federal House have moved to set an example in that direction.
