Madam Speaker, it goes without saying that the issue of members' pensions is of interest to every member of Parliament as well as to Canadians in general.
Many have strong opinions as can be seen by the debate in the House today with members speaking both in support of and in opposition to Bill C-85.
There is one thing all members of the House can agree on: the bill before the House is an improvement on the existing pension plan. It is a step in the right direction. I understand hon. members opposite think it should go further, but it is a step in the right direction.
The basics of it are that we are living up to our red book commitment. Our red book commitment in the election campaign said that we would end double dipping: the practice of members leaving the House or leaving the Senate and getting another job on the federal public payroll or an appointment and being able to collect their pension and a salary at the same time. That is now over. That is over with the bill and it is over with the practice the Prime Minister instituted in Parliament in an
informal fashion prior to the bill formally being adopted and coming into law. That is covered.
Canadians are concerned that there be a minimum age, that members of Parliament leaving in their forties not be collecting a pension at such a young age. The age was reviewed by a commission of Parliament, the Lapointe commission which recommended age 55. A consultant study that was commissioned by the previous federal government also recommended age 55, and that is what is being implemented in Bill C-85. Again we have lived up to the commitment that was made in the election campaign to deal with the matter of a minimum age.
We have gone beyond that because we have recognized in this time of fiscal restraint, this time of needing to reduce the cost of government, that we should take a leadership role and therefore we have by reducing the benefit rate for pensions collected by retired members of Parliament. In doing so I have been able to cut the cost to the taxpayer by some 33 per cent. A 33 per cent reduction in the cost of the pension plan for members of Parliament is again an improvement, a step in the right direction.
We also have to look at the pension plan in the context of overall compensation for members of Parliament. That has been raised not only by the Lapointe commission and by the consultant study which said that we should go up in the salary and down in the pensions, keeping the overall remuneration level the same. Not only has it been suggested by them and by various witnesses who have appeared before the Lapointe commission, but it has also been a point that the Reform Party through its whip has particularly highlighted. The whip of the Reform Party was suggesting that we should perhaps be going up in salaries far in excess of what they are today, which would amount to increases in the neighbourhood of 100 per cent to 130 per cent.
We just cannot afford to do that. For the Reform Party to suggest in this time of fiscal restraint that we should have those kinds of salary increases is a terribly unreasonable position and not one that I am sure would be supported by the taxpayers at all.
We have to look at the total context of the compensation package here. Members of Parliament have chosen to pay more for pensions, for having that kind of benefit when they leave the House, and to sacrifice a higher salary level than the Reform Party whip and others have recommended.
While they talk about the pension being greater than what other people may get in the private sector, they fail to point out that members of Parliament pay a lot more. With any pension plan, whether it be private sector or public sector, one gets according to the amount of money one invests in it. Members of Parliament invest a substantial amount more. That is something they conveniently overlook.
In putting this matter in the context of total compensation, there are some words that are particularly important to note because they were used by a member of the Lapointe commission, Professor C. E. S. Franks from Queen's University. He later appeared before the standing committee of the House reviewing Bill C-85. I think he put the matter in a good context and it is relevant to quote his words. He said:
The majority of ex-MPs have served too short a time, in fact less than six years, to receive any parliamentary pension whatsoever. In fact a great many ex-members not only do not have a pension but have a difficult time in finding employment and re-establishing themselves after serving as a member.
Professor Franks went on to say:
The issue of MP pensions should more appropriately be considered in the context of overall remuneration of elected representatives. Members of Parliament are significantly less well paid than other Canadian professionals. International comparisons prove Canadian MPs to be among the lowest paid. If other factors were to be taken into account, like the length of sessions, the opportunities for other income generating activities, the likelihood of serving long enough to make a career as a politician and to earn a pension sufficient for support in old age, then Canadian elected representatives are even worse off than those of other countries. This low remuneration has effect on representation in Canada.
Professor Franks went on further in his testimony to indicate:
A higher proportion of Canadian MPs choose voluntarily to retire from the House and not to run in an election than leave by any means, death, defeat or desire, than in Britain, than the United States or continental Europe.
There is something deeply dissatisfying in the work world of the Canadian member of Parliament to create such a rapid turnover and desire to leave. It might be argued that this turnover does not matter and that a steady influx of new members is a good thing in the House, but what happens in Canada goes beyond what is a good thing.
Comparative studies of legislatures and the legislative process have shown that a necessary requirement and precondition for a strong legislature, independent and effective representation, and strong legislative committees is a body of experience, experienced long term members who make a career in the legislature.
The Canadian Parliament does not have this sort of long serving membership. The Canadian Parliament is correspondingly weakened in its ability to hold government accountable, in its efforts to obtain redress of grievances for citizens, and in its debate and investigation of important issues.
The important point illustrated by his words is that the failure to appropriately compensate members of Parliament weakens the institution and in turn is detrimental to Canadians.
He also noted, as did other witnesses, that half of former MPs go without any pension. We are talking about a situation where half the people in the House will never collect a pension. There is not an enormous cost to the Canadian taxpayer when we consider that. Members put in a lot of time and effort and do not receive any pension or contribution from the government.
The Reform Party prefers to point out that there are some members who might do well with a pension because of their length of service. They have even used some figures they obtained from the National Citizens' Coalition. I have looked at those figures and they are wildly out of line with reality. They are just not true at all.
For example, they used one figure of $2.5 million relevant to one member of the House when the actual figure is almost half that in terms of the accumulation of a pension collection over a great number of years. The assumption is that the member would be leaving now and collecting a pension until age 70. There is also the assumption that the inflation rate is 5 per cent. The inflation rate is actually less than half of that. The figures were grossly exaggerated. Again I point out that only half the members who leave the House receive a pension.
Professor Franks' comments, the Sobeco, Ernst & Young report, the Lapointe commission and the hon. whip of the Reform Party have all raised the question of why we do not raise the salaries. We just cannot. Members of Parliament have had their salaries frozen for some six years now. Public servants' salaries have also been frozen. In this kind of climate it would be a bad message and bad point of leadership to suggest that we should increase our salaries. I am sorry, I say to the whip of the Reform Party and other members who support him. We just cannot in this context deal with a salary increase.
Meanwhile, we have indicated strong leadership in terms of moving in the right direction, living up to our commitments made during the election campaign as printed in the red book, and reducing the cost of the pension plan to the taxpayers by some 33 per cent.
It is anticipated that the amendments proposed in Bill C-85 will result in annual savings of some $3.3 million.
This bill is a move in the right direction. It reduces the overall cost of the MP pension plan to taxpayers.