Debates of June 22nd, 1995

Questions Passed As Orders For Return

[The Acting Speaker (Mrs. Maheu)]

Is it the pleasure of the House that Questions Nos. 109, 167 and 201 be deemed to have been made Orders for Return?

[Some hon. members]

Agreed.

Question No. 109-

[Philip Mayfield, Reform, Cariboo—Chilcotin, BC]

From January 1, 1993 to September 1, 1994, how many people from British Columbia have been appointed to federal government boards, agencies, commissions or Crown corporations and what is the name and city/town of residence of each appointee, the name of the board, agency, commission or Crown corporation to which they were appointed as well as the duration of the appointment?

Return tabled.

Question No. 167-

[Ken Epp, Reform, Elk Island, AB]

With respect to public opinion contracts awarded by the government in the periods between (1) April 1 and December 1, 1994, and (2) December 1, 1994 and the present, ( a ) what was their total cost, ( b ) what is the name of each department requesting the poll, ( c ) the name of the polling company, ( d ) the value of each contract, and ( e ) were any of the contracts awarded by public tender offering and if not, why not?

Return tabled.

Question No. 201-

[Colleen Beaumier, Liberal, Brampton, ON]

With respect to the new procedure for determining eligibility requirements for the receipt of the disability tax credit now being employed by Revenue Canada officials, ( a ) why are individuals who received the disability tax credit from 1991 to 1993, and who no longer qualify, required to repay the government of Canada the amount received in those years in full and ( b ) why weren't individuals told that they may have to repay the disability tax credit when it was initially granted to them?

Return tabled.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

I ask, Madam Speaker, that the remaining questions be allowed to stand.

[The Acting Speaker (Mrs. Maheu)]

Shall the remaining questions stand?

[Some hon. members]

Agreed.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Madam Speaker, I wonder if I might revert to the Tabling of Documents, as agreed earlier in the Routine Proceedings.

[The Acting Speaker (Mrs. Maheu)]

Is there unanimous consent?

[Some hon. members]

Agreed.

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Madam Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's responses to 13 petitions.

Ways And Means Motions

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Madam Speaker, in the interest of clearing up matters on the Order Paper, I think you would find unanimous consent to allow for the withdrawal from the Order Paper of Ways and Means Motions Nos. 9, 10, 19, 22, 24 and 26. These have all been superseded by events and they are no longer required on the Order Paper. I have consulted with members opposite and I think you would find consent to allow those to be withdrawn from the Order Paper.

[The Acting Speaker (Mrs. Maheu)]

Is there unanimous consent?

[Some hon. members]

Agreed.

(Motions Nos. 9, 10, 19, 22, 24 and 26 withdrawn.)

Members Of Parliament Retiringallowances Act

[Alfonso Gagliano, Liberal, for the President of the Treasury Board and Minister responsible for Infrastructure]

moved that Bill C-85, an act to amend the Members of Parliament Retiring Allowances Act, be read the third time and passed.

[Ronald J. Duhamel, Liberal, Parliamentary Secretary to President of the Treasury Board]

Madam Speaker, I am very pleased to address the House at third reading of Bill C-85, an act to amend the Members of Parliament Retiring Allowances Act.

The issue of MPs' pensions is, of course, of interest to all members of this House and to Canadians in general.

This is an issue that demands leadership. However, in showing leadership, the government and members must carefully consider all aspects of MPs' and senators' remuneration.

The issue itself is complex and contentious, a fact that makes it hard to address in a partial or even a general manner. That said, during its election campaign our government made certain promises it intended to keep once it came to power. The red book emphasized two aspects in particular of the MPs' pension scheme that were to be the subject of reform.

I shall take the liberty of quoting directly an excerpt from page 92 of the red book: "The pension regime of members of Parliament has been the focus of considerable controversy. -We believe that reform is necessary".

Our government has now taken action. The changes we planned to the MPs' pension scheme will be made when Bill C-85 is passed. The red book stated, and I quote: "A Liberal government will reform the pension plan of members of Parliament to end "double-dipping". MPs should not be able to leave office and receive a pension from the federal government if they accept a new full-paying job from the federal government. In addition, we will review the question of the minimum age at which pensions will begin to be paid". The Liberal government had made a commitment to keeping those promises.

However, the government has gone further. It will put into place a number of additional changes that will enhance the needed reform of MP pensions, changes that will provide for former members who have become disabled, equitable support for common law spouses, the option for members of this Parliament to determine their continued participation in this plan, which is a direct result of the request put to the Prime Minister on January 21, 1994 by the Reform House leader on behalf of his party.

Furthermore, a direct savings of millions of dollars due to a 20 per cent reduction in benefits to all MPs will be realized.

Let me be clear. This government consulted; this government listened; this government acted. Here are the facts: double-dipping eliminated; minimum age set at 55 years; optional participation offered to MPs in this Parliament; and $3.3 million saved for the government-in other words, 33 per cent lower costs to Canadian taxpayers.

On February 22, 1995, immediately before the Minister of Finance tabled the Budget that would strike a mighty blow to the deficit, the President of the Treasury Board announced that our government intended to reform the MP's pension scheme. He also tabled Bill C-85 on April 28, 1995, and spoke when that bill was tabled for second reading on May 4, 1995. The President of the Treasury Board also testified before the Standing Committee on Procedure and House Affairs on May 30, 1995. As well, I was given the opportunity of speaking to you when this bill was tabled for third reading.

This debate, which has continued for eight months, has also included a full day of consideration by the House of a motion made on this matter on Opposition Day and, of course, the appearance of expert witnesses before the Standing Committee. Over 20 hours of debate-and I must say it was often tough debate-have been devoted to this bill thus far.

The official opposition has presented some interesting and quite often constructive ideas on this issue, which is a thorny and difficult one.

The third party is engaged in often rancorous debate and highlighted a number of issues that are of importance, particularly the issue of salaries. Because we are in an area of fiscal restraint it is vital to note that Bill C-85 only deals with pensions. We will not and cannot act to raise the salaries and other benefits of members of Parliament at this time.

We will respect the legislated salary freeze on employees and continue to demonstrate leadership in putting Canada's fiscal house in order.

Members of the standing committee heard testimony from expert witnesses, including a taxpayers' group, that had the same theme. The issue surrounding the greater issue of compensation must be addressed, pensions must be reduced and salaries increased.

This was also the viewpoint expressed by the pension experts from the private pension consulting firm, Sobeco, Ernst & Young. It was the same as that of Professor C.E.S. Franks of Queen's University, a member of the Lapointe commission. It was the testimony of a former member of Parliament and actuary, Paul McCrossan. It was supported by Robert Fleming, a former administrator of the Ontario legislature. It was even put forward by the very group that puts hundreds of little plastic animals on the lawn of the House.

This total compensation approach is supported by the government in principle. However, as I mentioned at the outset, in practice we must carefully consider all elements of compensation. Salaries cannot and will not be increased.

At the risk of repeating myself, I will again state that the government has demonstrated leadership by reducing pensions for MPs, by going beyond what it had promised. This will have the net effect of reducing total compensation. Unfortunately this is the reality Parliament must face in today's economic climate.

I would now like to focus on the major elements of Bill C-85, and perhaps to correct some of the errors of interpretation that have crept in. I certainly would not want the honourable members on the other side of the chamber to voice their views about the bill without having accurate information.

Bill C-85 restricts double dipping. It will apply to any future appointment, to any renewal of an appointment, and to any contract signed after the date on which the bill obtains royal assent.

Former senators will be subject to this restriction in the same way as former members of this House. The clause on double dipping in Bill C-85 provides that any former member who is receiving a pension will be required to notify the appropriate minister when he starts to hold federal employment or enters into a federal service contract.

The notification will have to be made within 60 days after the date of the appointment or the signing of the contract, and the member will have to report how much he is earning or expecting to earn. Every year he will have to report all sums of money received from the federal government as long as he holds the employment or continues to execute the contract.

Any member whose earnings exceed or are expected to exceed $5,000 annually would have their pensions abated dollar for dollar by the amount of their remuneration. For example, if a member receives $30,000 in pension and earns $45,000 in a federal position, his or her pension will be totally suspended. If the member earns $25,000 he or she would receive $5,000 of their pension. That is because they earned a $30,000 salary.

I am taking the time to illustrate these examples because it is important to note that only federal parliamentary pensions and federal salaries comprise the double dipping provision.

The second component of Bill C-85 I would like to address is the red book commitment of the minimum age. Age 55 will be the minimum age at which former MPs and senators can collect a pension. This government agrees with the age 55 recommendation put forward by the Lapointe commission in the report entitled: "Democratic Ideals and Financial Realities".

Madam Speaker, the third point I would like to raise is that of optional participation.

As I mentioned earlier, within days of entering Parliament, the Reform Party House leader stood before this House and asked the Prime Minister if the government intended to continue to force MPs to participate in the MP pension plan. The Prime Minister's response was to the point: If members do not want to contribute to the pension plan, then administrative arrangements would be made to ensure they would not be part of the plan. Bill C-85 explicitly responds to the Prime Minister's promise to the Reform Party. Members will be provided with the option to choose whether or not they wish to continue to participate in this pension plan.

Madam Speaker, there are people shouting over there because they do not like to hear the truth. They prefer exaggeration so that they can make a little political hay. That is what they do when they have problems with the electorate.

I am confident members of the Reform Party will recognize this change adequately reflects what their party has sought. However, I would urge all members including those of the government and the official opposition to carefully consider their personal and family retirement needs prior to making this decision. Political motivation and party discipline should not play a part in this important choice.

This government has a clear view that retirement savings should be supported as they are through the income tax system in providing benefits through RRSPs or registered pension plans by employers providing for the legitimate retirement needs of their employees. The Government of Canada provides pensions for its public servants, the military, the RCMP and we should certainly provide pensions for our parliamentarians.

I would like to put forward some figures which were first presented to the standing committee. I understand they were useful to the committee members for the analysis of this proposed legislation. According to the Statistics Canada 1992 publication "Pension Plans in Canada" only 9 per cent of people who are in employment related pension plans are in plans that match contributions or are similar to RRSP type plans. The remaining 91 per cent are in defined benefit plans which provide a set formula to determine benefits. This type of plan provides better certainty and security for employees and planning for retirement because their ultimate benefits can be anticipated without being subject to the prevailing interest rates at the time the annuity becomes payable.

My colleagues in the opposition are taking great risks. If they continue to make noise, my voice can be much louder than theirs.

Madam Speaker, the Statistics Canada publication I just mentioned reveals that in general, in the context of these defined benefit plans, private sector employers contribute about 60 per cent of the costs while in the public sector the employer's proportion is 60 per cent.

Naturally enough, in the case of special plans, the share of the costs assumed by the employer is considerably higher. For instance, in the case of the Canadian Forces the employer's contribution is $2.70 for every dollar contributed by an employee.

I have taken the time to state these facts because I think it is important that we have enough knowledge about private or employer-sponsored pension plans in Canada generally, if we want to evaluate this particular pension plan logically and rationally.

The final element I want to discuss is the question of pension accrual or pension benefit rate. Bill C-85 reduces the benefit rate for members' pensions from 5 per cent to 4 per cent of their annual salary per year of service. This is equivalent to a 20 per cent reduction.

Combined with the introduction of a minimum age, this reduction will make it possible to reduce by 33 per cent the amount the taxpayer contributes to the members' pension plan. This is a significant saving, in line with our government's deficit reduction strategy.

Clearly the government has gone even further than it promised it would in reforming members' retiring allowances. We have markedly reduced the costs that the Canadian taxpayer has to pay.

In addition to outlining the important elements of Bill C-85 I would like to address one concern that I have in effectively communicating the impact of pensions. Private interest groups and members of this House have put forward what I would call, and I want to underline it, misleading information of potential payments to MPs. It is not just government MPs that have been mentioned. The exorbitant amounts reportedly to be paid to young cabinet ministers and long serving MPs are based on misleading and incorrect assumptions.

For example, the 5 per cent inflation assumption is certainly out of whack with what the Department of Finance calculates, which is a standard of 1.5 per cent. Even Reform will understand that there is a difference between 1.5 per cent and 5 per cent.

Additionally to state that a pension figure is based on an MP retiring today and collecting a pension immediately until age 75 fails to recognize the effects of Bill C-85. They fail to recognize it because it is convenient to them. Particular attention should be paid to clause 11 of the bill which will introduce the minimum age of 55. The assumptions also ignore the ministers and MPs are not retiring today. In fact they are making active contributions to the Canadian political landscape and will continue to do so for many years.

It might be useful by way of example to demonstrate the nefarious effects of such outrageous and incorrect assumptions. The price of a $2 loaf of bread considered in future dollars would cost according to these assumptions which include compounding and high inflation $3.20 in 10 years and after 20 years about $5.30. That is the kind of gimmickry we are engaged in. Simply put, these comparisons do not accurately reflect what a former member may receive in pension. They are extremely inaccurate and misleading.

In conclusion, Bill C-85 is an accurate response to the concerns expressed by Canadian taxpayers. They have asked for reduced contribution on the part of government. Bill C-85 delivers a 33 per cent cut in that contribution. Electors have asked that we fulfil our stated commitments in the red book. Bill C-85 does that and goes further.

Our public servants, the members of the Canadian forces and other employees affected by the wage freeze are expecting us to respect the same rules as they do.

[The Acting Speaker (Mrs. Maheu)]

Before we continue on the debate, I know the subject is emotional for a lot of you. Our constituents, right across this country, are listening. I think they would like to hear what people have to say. Could I ask that we give them that much respect.

[Gaston Leroux, Bloc, Richmond—Wolfe, QC]

Madam Speaker, it is a pleasure to address the House at third reading of Bill C-85 on reform of members' retiring allowances. I rise as the official opposition critic on parliamentary reform.

I would like to say right off that the objective that we in the Bloc Quebecois and the official opposition wished to achieve in the reform was twofold. First, because we shared the concern of all taxpayers in Quebec and Canada, we knew very well that a pension plan that allowed members to collect both pensions and federal civil service salaries could not continue. We also knew that the absence of a specific age limit for qualifying for a pension was unacceptable, because taxpayers were seeing people after just six years of parliamentary service getting an immediate pension at the age of 30 or 35 or 40. It was unacceptable. It was unfair.

So those aspects were our two targets, shared by the taxpayer, and I think that Bill C-85 is confirmation that both have been met.

However, I would like to recall that we tabled an amendment to this bill that was designed to prevent former members who were currently double dipping from continuing to do so. The government preferred not to incorporate our amendment. Instead, the restriction on double dipping will come into effect only when the bill becomes law, thus leaving plenty of government employees drawing both their pension and their salary. I am thinking, among others, of the ambassador to Paris, Benoît Bouchard, who gets both a pension and a salary.

I think it would have been very useful if the government had agreed to make the system fair for everyone immediately.

I would also like to add, in the course of these remarks, that in the end the total value of members' pensions strikes me as a small matter in comparison with a more useful way of recovering money and reducing government expenditure: the abolition of the Senate, the other House. If the $45 million and more that goes on salaries and services for the Senate could have been tackled, we could have saved an enormous amount of money.

One of the distinctive things about the western world is its democratic systems of government. Universal suffrage is indisputably the element in a revolution that at the start of this century allowed a number of western societies to achieve, rapidly, unprecedented economic development and to experience the emergence of the mass consumer society we know today.

However, western democratic society has not eliminated all inequalities, nor does it really hold the promise of a better world where all men and women would be equal, a society where poverty and misery would no longer occur. Social classes continue to exist, with their different levels of wealth, their injustices. We live in the very heart of economic liberalism. If democracy is a synonym for political freedom, it is also the home of economic freedom.

There are members of Parliament in our society, certainly, but there are also professionals, welfare recipients, people without jobs, CEOs of big and small companies, civil servants, tramps. We do not all have the same lot in life. We live in a society with social classes. And it is an illusion to think that everyone is treated equitably.

The debate on members' pensions, in my opinion, serves as a way of avoiding a much more fundamental debate that needs to be held on poverty and power. We have to expose the illusory democracy that screens us from the human misery in our societies. We have to attack the system's real profiteers. There are profiteers in the Canadian parliamentary system, and to focus exclusively on members' pensions, without calling among other things for abolition of the Senate, is serious political irrelevance and evidence of boundless bad faith.

The cost of the parliamentary pension plan is insignificant compared to what has to be paid out of the public purse to maintain Senate appointments and the institution itself.

One of the Reform Party's main election promises was to make cuts in what the party calls the "three Ps": members' pay, pensions and privileges. The Reform Party calculates that a significant reduction in members' pensions would result in savings on the order of $1.5 million over five years.

According to Jean Dion, columnist for Le Devoir , ``the savings that could be made by slashing members' benefits are hard to calculate''.

Following the last election, the pensions to be paid to defeated members were estimated at $109 million over 20 years, or a quarter of 1 per cent of the deficit for 1992-93 alone. Now, the total budget for senators is $42.6 million a year. Over 20 years, if you consider the costs of upkeep for the premises the Senate occupies, the cost to the taxpayer is, by comparison, more than $1 billion.

That is what I would call shameless exploitation of a country's citizens, who pay out of their taxes the salaries and pensions of people they never elected. A senator is a member of a political species that lives off the poor in our society. The Senate is nothing but a pretext for whatever government is currently in power to reward its cronies, be they Tory or Grit.

The Senate is an institution with no democratic legitimacy. Its members are appointed by the Governor General, who by convention acts on the initiative and advice of the Prime Minister, who submits a list of names to him. Because senators are not elected, the official opposition, the Bloc Quebecois, considers the Upper House a political anachronism and convincing proof of the obsolescence of the Canadian federal system.

We in the Bloc Quebecois have grasped that one of the great weaknesses of the Canadian parliamentary system is not the members' pension plan but rather the very existence of a Senate. The existence of the Canadian Senate is a vestige of the traditional elitist form of representation that is supposed in some way to balance the democratic legitimacy of the elected members of the House of Commons.

From 1925 to 1963, the average age of a senator was 69. In 1975 it was 64. A Senate seat, as the whole world knows, is a prize for someone at the end of his career. He will not need to fight to keep his seat, because the salary is guaranteed until he reaches 75. That is what I call a golden retirement. That is what I call the real problem. That is the real scandal of the Canadian parliamentary system and the democratic system in which it has developed.

I think that the government in power, the Liberals, and the Reform Party too, should have gone after the really pointless expenditures. Lacking the courage to attack the Senate, which represents a pointless expenditure, they referred instead to cut members' pensions. We recognize that they accomplished what they set out to do, and that it is an improvement, but as I have shown, the money they hope to recover is just a little more than a million dollars over twenty years.

If we got rid of the Senate, we could save over $42 million a year. The goal of reviewing sessional allowances or members' pensions can never, in any way, be a means of putting the country's finances on a sounder footing, or fighting the deficit, or achieving the great collective ideals of equality and wealth in our sacrosanct democracy. This debate is just something to placate the people, and bills making changes to members' retiring allowances-remember Bill C-270, brought in by the NDP, Bill C-236, brought in by the Liberals, Bill C-208, brought in by the Conservatives-are just ways for this House to assuage its conscience.

On July 20, 1994, the Commission to Review Allowances of Members of Parliament tabled its report. It made the following points: the number of former members receiving a pension is not what is commonly believed. To go by the press, every parliamentarian who ceases to sit gets a retiring allowance. But in fact only half of the members who retired over the past decade received an allowance. Since 1984, only 42 per cent of retirees have received an allowance.

The report goes on to state that the public sometimes has the impression that parliamentarians who retire do so with an excessively large pension.

In fact, most pensions paid to parliamentarians in the past decade were between $10,000 and $40,000. Actually, 57.2 per cent of them are below $30,000 and 90.4 per cent are below $50,000.

"One might also think, the report goes on to say, that a disproportionate percentage of retirement benefits are paid to persons below the age of 55. But this is absolutely not the case since only 13 per cent of retired MPs receiving benefits are below 55".

According to the report, the Canadian parliamentary pension plan is quite comparable to those in other western democracies. Admittedly, this plan is one of the least demanding with regard to the minimum age at which benefits can be collected, but one of the strictest with regard to the contribution rate of the beneficiary; and it falls within the average with regard to the maximum authorized benefit.

As can be gathered from the report of the Commission to Review Allowances of Members, there is no reason to hold a real debate on the matter and it is no secret that the parliamentary discussions about MP pensions are merely a way of avoiding the real debate on the fundamental questions which are increasingly undermining the credibility of western democracies.

The Reform Party lays it on a bit thick. The great number of amendments which they tabled at the beginning of June look more like an insurance policy negotiated downward than an effort to prepare a serious piece of legislation.

I repeat, Bill C-85 on the reform of MP pensions in its present version responds entirely to the two main concerns of taxpayers in Quebec and in Canada with regard to equity.

First, the age at which a former MP can collect his pension is now set at 55. Secondly, a former MP can no longer receive both a pension and a salary paid by a government agency. The bill is unequivocal in that regard.

With this bill we have therefore attained the basic objectives which we have in common with taxpayers, but we would have liked the government to accept our amendment and apply it immediately to those in government and in the public service who currently benefit from double dipping.

I remind this House that we would also have preferred to deal effectively with the expenses of useless institutions like the Senate, which costs us tens of millions of dollars per year. All this for an institution which serves no useful purpose. It is simply a place-and the real place-for a golden retirement. A place to which men and women who have rendered or could render services to the government are appointed with a salary which is guaranteed until age 75. That is what I call an unacceptable golden retirement and that is where we have to get the money that is needed.

In closing, I remind this House that in this matter the official opposition is concerned about equity. We fundamentally believe that our amendments contained all that is needed to achieve this equity, namely two basic elements: the setting of the minimum age at 55 years and the elimination of double dipping.

[Stephen Harper, Reform, Calgary West, AB]

Madam Speaker, I rise today to voice my opposition to Bill C-85, an act to amend the Members of Parliament Retiring Allowances Act. I would first like to say a word about the position of the Bloc Quebecois. The Bloc Quebecois has explained well the problems with the Senate and with ambassadors' pensions, for example.

But the fact remains that the Bloc supported the government in this matter in order to keep their pensions from the Parliament of Canada just before the referendum on independence. I remind this House that the members of the Bloc have the option of not participating in this plan. They must explain their participation to their constituents.

I have given a lot of thought to what I might say today. There has been a lot of emotion in the debate and I must admit that I share in a lot of the emotion. Because I like to avoid a lot of emotionalism, I probably will avoid some of it in my speech today. This is not because I think I should but because, perhaps in my state of mind at the moment, I would be better to stick to some of the facts and to try to make some arguments that hopefully a few on the other side will listen to at the last minute.

I will not get into the statistics about the generosity of the plan. Those are well known now by the public. We have a very rare occasion here. In supporting a government bill we have a coincidence of a lack of intelligence and a lack of integrity at a single time which I would not say is unprecedented but should give members cause for reflection.

Let me review some of the headlines in the newspapers of the last couple of weeks on this topic. According to the Montreal Gazette : Voters won't forgive MPs for keeping lavish pensions''. From the Ottawa <em>Citizen</em> :Pension issue certain to haunt Liberals''. My personal favourite in my favourite newspaper, the Calgary Herald : ``MPs pensions still too rich''.

All of us in the House have been around long enough. Even those who have not been around very long have been around long enough to know that not everything we read in the newspaper is true. However I believe in this case there is a certain correlation between the reality and the reporting.

Let us take a little time to go back to the testimony we heard before the procedure and House affairs committee studying the bill and to some of the comments of my friends across the way. It is important to do this so that after the next election, when we look back at the day this bill was passed, we will see just how prophetic many of the commentators and experts were when discussing the bill.

I had done some teaching before I came to the House and this is an opportunity to do a little teaching here about what will happen if self-interest overcomes principle.

One witness before the committee, Mr. Robert Fleming, had written extensively about the compensation of elected officials as well as the broader issues that universally face legislatures across the world. I will read Mr. Fleming's closing remarks to the committee. Perhaps the House will pay closer attention to these than committee members did. I do not repeat Mr. Fleming's remarks because I agree with all he said. In fact he is more sympathetic to the bill than I am. Nevertheless Mr. Fleming said:

All I'm saying is that I don't think you're listening to some of these issues-Regardless of what the President of the Treasury Board or anyone else says, they are flying in the face of public opinion if they don't put this into the hands of the broader community to debate and examine.

I'm not talking about the traditional form of commission conducted, as we are, in this forum, but I'm talking about a way for sensible people, who are fair and include knowledgeable parliamentarians and actuaries getting together to look at the whole picture and saying this is what should be done. Again, I believe if you permitted this at this point pretty darn soon, before it gets out of hand, that without credible results you probably would come out smelling like roses and with much better results.

If this doesn't happen, I feel, and I've talked to very reasonable and sensible Canadians about this, who I think have their heads screwed on and not the sort of people who are going to jump to conclusions. But they definitely feel that you are quoting your own counsel, pushing your own show ahead. And it's going to be to the detriment of the Liberal Party of Canada, the Government of Canada, and it's definitely going to be to the detriment of the people of Canada. I think this has to be taken into account.

Again, as somewhat of a political scientist, the Liberal Party of Canada has had a marvellous go at it since October 1993. But I think the thing risks becoming unravelled if this kind of situation is not dealt with in a totally and utterly open manner. This applies to everything concerning the administration of the House of Commons.

Broadly speaking there was consensus among all of the witnesses the committee heard that Bill C-85 is a bad idea for all sorts of reasons and certainly politically a very bad idea.

This witness also pointed out: "The fact that 81 qualifying members are Liberals and only 14 belong to other parties suggests that the government should tread warily and wisely in advancing legislation. This is an area which has become a political minefield". The government has made very little attempt to get cross party consensus on this.

Former Conservative MP and actuary Paul McCrossan had something to say on this also. According to him Bill C-85 is bad for members, bad for Parliament as an institution and bad for Canada. Mr. McCrossan went on to explain how Bill C-85 will hamstring Parliament, how it will destroy any legitimacy the government has or might have had in redesigning Canada's national retirement income and medical care system, just when these changes are most needed in the face of Canada's flourishing debt and aging population. We know about the government's plans in those areas.

Mr. McCrossan talked about the need for Parliament to act with integrity and to redesign our national social plans rather than let a future crisis arise and dictate their reform. He talked about the effect that passing the bill would have on generating immense public outrage for protecting privileged positions just when reductions in national benefits are being proposed for other Canadians.

This witness talked about the public's feeling toward politicians. We have all heard this: "They are all crooks". He told the committee the underlying cause of this attitude, and I agree with him, was politicians have consistently established one set of rules for themselves and one for the general public.

Referring to the potential passing of this bill without amendments he said: "Once again, in that case you deserve the public's contempt". I agree with that.

Mr. McCrossan recently published an article in Benefits Canada . In it he describes the Conservatives' attempt to reduce the generosity of the plan. The Conservatives promised this in 1984 and never delivered on it. I will read the excerpt once again:

Wilson asked me to help him present his proposals for changing MPs' pensions to the last PC caucus meeting before the 1988 election. He wanted a mandate to proceed before the election was called so that the new Parliament could start with a new plan. A riot broke out. For about 20 minutes Wilson tried to explain either the problem or its solution. He was not allowed to speak. Member after member shouted him down. Whenever calm was restored and Wilson tried to speak, bedlam erupted. Finally he gave up.

Can we not see it happening all over again, this time in the Liberal caucus? We all know about the press reports.

I understand the minister also tried to bring about some significant reforms which were ultimately thrown out of caucus and of cabinet. Who will pay the price for this? The price will ultimately be paid by first term backbench MPs sitting across the way who really do not support this plan, probably really do not understand it, but who will go along with the whole Liberal government group think thing. I hope they will at least consider opting out. I will address that again later.

The voters may forgive them if they opt out, but that is the only way they will be around long enough to qualify for this plan. What it is interesting is they will end up supporting this plan, it will be their votes which pass it, it will protect and enlarge the pensions of the most senior members of the government and they will end up out of their seats with no pension whatsoever.

During the report stage debate on the bill the chief government whip asserted there was nothing wrong with this plan, that outflows matched inflows and had for years. This is an example of some of the misquoting of statistics that has gone on around here.

What the chief government whip did not mention was the size of those inflows, or the source, is exclusively tax dollars and the vast majority does not come from the members' of Parliament pay cheques.

Second, the vast majority of the outflows has yet to come and the inflows are to cover the future liability streams created by this pension plan.

Let me quote again from Mr. McCrossan's article as he refers to Don Mazankowski's half hearted attempts at reform: "Even well informed MPs like Don Boudria, the chief government whip, continued to assert in debate that the government's chief actuary had said the MPs pension plan was actuarially sound". That has been repeated in this debate. "In his latest report published prior to the 1991 House of Commons debate the chief actuary pointed out the plan had only $27.9 million in assets to cover about $182.7 million in liabilities. Also, the normal cost of the plan was rising". To cover the actuarial liability we now have these huge inflows each year.

During the one day of witness testimony-the committee never did study the bill-at the procedure and House affairs committee, the government whip made some other enlightening comments. He talked about his situation and how well off he would be if instead of having the MP pension plan he had participated in an RRSP plan with contributions matched dollar for dollar by his employer, ostensibly the House of Commons.

He said that under the MP pension plan he would enjoy a benefit if he retired today of somewhat less than $30,000 year. According to our calculations it would be closer to $36,000 a year, but $30,000 under the new proposal. Remember this does not apply retroactively and so he would be getting $36,000 a year.

My office did the calculation. The government whip said he had calculations but never tabled them. I have done the calculations according to the assumptions outlined by the government whip. I see some truthful aspects but his answers still required scrutiny.

He said he would be eligible for a pension of about $27,000 a year already under a matching RRSP arrangement. He forgot to mention that under an RRSP plan like other Canadians are eligible for, contributions of the size he is talking about fully matched by an employer would be illegal. Our 11 per cent plus an 11 per cent match make 22 per cent, which is well above the legal limit. No other Canadian would be allowed to shelter that much of their income from tax and have it grow without paying taxes on the income it generates. An investment of this type would not have the expensive advantage of full indexation offered under Bill C-85.

As the member for Mississauga West pointed out several times during the committee's hearing, the government may decrease the contribution for limits on RRSPs in any case. Where would that leave MPs? It did not seem to bother her that

this would affect millions of other Canadians negatively. This is an important point.

Applying the Income Tax Act in the same way it applies to other Canadians lowers the government whip's expected pension benefit from $27,000 to only about $22,000, which is not a bad pension considering he has only been on the job here since 1984.

Compared with a fully indexed pension of $35,000 to $36,000 which he would collect if he resigned tomorrow, this may not look quite so inviting. Fully indexed as provided for under this plan at the current inflation rate, this $35,000 would grow and would be worth approximately $82,000 in tomorrow's dollars by the time he was 75.

An annuity purchased with an RRSP would still be worth only $22,000. In other words, in 30 years or so he would find his pension is worth only $5,000 or $6,000 in today's dollars. This is a very different case and we start to see why this plan is so costly to taxpayers.

Let us be serious. Will the member and the government really try to tell ordinary Canadians they could have a $60,000 salary for 10 years and retire for the rest of their lives with a pension that would support their every need and more? Seriously, Canadians do not live in that kind of world. We should not invent those kinds of numbers.

According to one witness, Mr. Brian Corbishley, to provide the benefits promised under this bill would take an investment of about $34,000 for each year of service; this is for the ordinary, backbench member of Parliament, not someone with an additional salary they can contribute like the government whip. Basically Mr. Corbishley is saying it would take a matching contribution of 26 per cent of a member's salary to fulfil the government whip's assertions.

Several government members have indicated they believe the 9 per cent contribution level in the bill is too high. Obviously it is not nearly high enough to provide the benefits the bill provides.

The government did, I believe inadvertently, make an important point. A plan with matching contributions, properly invested over a long period of time, even one that was legal under the Income Tax Act, would help to provide a reasonable retirement income and would save the taxpayers a bundle.

The cost for a one to one plan like we proposed, about 9 per cent MP salary matching, would cost about $1 million. That is about $6 million less than the government's contribution costs, to which it must add $23 million in interest charges it has to fork out for the present plan. That is a saving of about $29 million a year and clearly there is no comparison whatsoever in the cost.

I hope my speech has cleared up what is maybe some honest misconception regarding the plan with members opposite. We know the debate has at times been very emotional. There have been all kinds of accusations levelled. My hope is in talking about these personal cases that I not bring it back to that level but use them as examples to put forward some of the honest problems the public finds with the bill.

Unfortunately it does not appear we will solve this problem in the House. My position and that of my party is we must bring in a plan which is no more generous than the average private sector plan and that we need an independent body to do it and there must be full disclosure of all the benefits.

There seems to be some confusion on what a normal pension plan is. The President of the Treasury Board gave some statistics when he appeared before the committee, which the parliamentary secretary repeated today. I will go over them because they talked about misleading statistics. The President of the Treasury Board has presented statistics about what a normal pension plan is. Let us go over a normal pension plan.

Normal for most Canadians is no employer pension plan at all. According to Statistics Canada, as of January 1, 1992 only about 47.5 per cent of employed paid workers were fortunate enough to belong to an employer pension plan. About half of those were workers who belonged to pension plans in the public sector.

The minister told that committee 44 per cent of all pension plan members have some form of automatic indexing. What he neglected to mention was in the private sector less than 12 per cent have any automatic protection from inflation, and full protection of the kind offered to MPs in Bill C-85 is virtually unheard of even in the public sector.

The minister indicated as well that about 95 per cent of all pension plan members are in defined benefit plans which provide a set formula to determine benefit payments. According to Statistics Canada, only 43.7 per cent of all plans are of this type. Some of the larger plans have this but over 50 per cent do not. Those who do not have an employer benefit plan are almost always in a contributory plan, not a defined benefit plan.

The minister did not present any comparative statistics on benefit rates, and with good reason. While his proposal gives MPs a benefit rate of 4 per cent per year of service, only 2 per cent of all pension plan members have a benefit rate above half of that.

One departmental official, when I asked how many other Canadians had this kind of benefit rate, conceded none to his knowledge. There could be the odd chief executive officer with a special deal but none he is aware of.

Similarly, the President of the Treasury Board did not bother to present any statistics on the minimum age for collection of benefits, which is 55 in the bill. However, in over 90 per cent of all registered pension plans the normal age of retirement is 65. A hearing is going on today just down the street in the federal court, the Information Commissioner versus the Minister of Public Works and Government Services. The government has asked that the hearings regarding the release of information on MP pension benefits be held in camera. It does not even want taxpayers to hear its argument for not releasing the information.

I would have thought if it had some reasonable reasons for suppressing the information, and I cannot imagine what they would be, it would want the voters to know what the reasons might be.

In my opinion it is in the best interests of the public for the information to be readily available. It will affect who is elected. That will affect the quality of government. Voters have a right to know how their tax dollars are being spent.

As I pointed out previously in the House, individual member's salaries and expenses are printed in the public accounts. Why are their pension benefits or at least the cost of those benefits not available to the taxpayers? So much for more open government. So much for government with integrity. On this kind of issue we might as well have had Brian Mulroney and his Tory party sitting across the way.

[An hon. member]

It might be an improvement.

[Stephen Harper, Reform, Calgary West, AB]

Let me talk about the opt out once again. I want government members, even though they are going to march in here and vote for the bill, to seriously consider the opt out. The opt out is not ideal. I have said this before and I will say it again, the ideal situation is a fair pension plan for members of Parliament, not nothing but not too generous. Since those are the choices, I would suggest we opt out.

What the government is doing to convince the public that this is okay is simply not working. I have made some reference already to the tactic. One has been to misquote figures, to try and rationalize this as somehow not really better than what anyone else is getting. Nobody believes that. Not an expert in the country will come forward to verify those numbers.

The other attempt to rationalize this has been to basically slander various Reform members of Parliament. For example, the member for Beaver River is opportunistic in opting out. There have been other slanders and fabrications against her which I will not get into.

It is also said that ex-military members are double dipping. This is an interesting definition of double dipping. Suddenly all Canadians, who after having had a career and qualifing for a pension in a normal way and who enter a second career, are somehow double dipping. Now we have hundreds of thousands of Canadians who are now defined as double dippers.

There was the great one members actually thought they had going for a few days which was that the member for Calgary Centre had advocated massive pay increases when, in fact, what he was suggesting was that the government be transparent about the salaries the MPs are actually being paid, taking into consideration all the benefits, all of their untaxed allowances and all their accrued pensions.

What is interesting about all of these things is that they are not in the bill. That definition of double dipping is not in the government's legislation. The government, while it continues to raise the compensation issue, did not raise it in the legislation. It is only a bill on MP pensions.

There has been a lot of talk about the pay issue but I want to get something on the record because my views on the pay issue are a little different than most of the people in the House and probably a little different from some members of my party. This party has consistently said: "Cut the pension to normal with no pay increase whatsoever". We tabled amendments to that effect and the Liberal members all voted against them.

However, let me talk about the process of determining pay. There have been commissions to study the pay issue. In fact, one thing we noticed when we had the committee hearings for one day was that the commissions appointed by this federal government such as the Lapointe or Sobeco study, had considerably more generous views of remuneration than some of the commissions that had been appointed in the provinces. All of them had concluded that MPs or ex-MPs were basically underpaid and they gave some reasons for that which deserve study. However let us be very clear about how they arrived at that conclusion.

First, all these commissions proceed by essentially asking members of Parliament and former members of Parliament what they do, how much they could earn elsewhere and how much they think it is worth. That is essentially how the commissions operate. They then come up with a recommendation that we are all underpaid. They accept the stories that all members of Parliament tend to tell, which is that prior to coming here they had brilliant careers and were earning hundreds of thousands of dollars somewhere else. Some were. As we all know, the member for Calgary Centre was. The Minister of Justice was. There are some other members who had very brilliant careers both in this House and in the previous Houses.

However, that is not always true. Before I was elected, I worked around here and I know about some of the brilliant careers.

The second story told is that all members of Parliament do valuable work while they are here. They work long and hard hours all the time, on critical tasks of great importance to the nation and their constituents.

The third story told is that through no fault of their own, members suddenly find that when they are turfed out of office, despite their previous brilliance and their brilliance while here, they find themselves virtually unemployable and can find no work.

There are elements of truth in all of these statements but I do not think we should accept them at face value. Some of these commissions should have examined this a little more closely. I will not talk about careers. As I say, some people clearly have had good careers and some people, depending on their occupational background, have an chance at adjusting back into the workforce. I know the member for Halton-Peel and I have discussed the fact that certain occupations are given to readjustment to the workforce while others are not.

I would like to talk for a minute on this one point about the valuable and hard work because it is important. It is time we started calling a spade a spade around here. Have we worked hard this week? You had better believe it, Madam Speaker. We have worked bloody hard. We have been up every day this week until midnight and 1 a.m. voting on bills.

What about those votes? Those votes were all predetermined. There were no surprises in any of them, although there were a couple of little surprises, but all of these votes were predetermined. In fact, they were so predetermined that half of the time people did not even know what they were voting on. However, they certainly did not need to know what they were voting on even if they did.

The question that the taxpayers should be asking is not whether this is hard work, because this is hard work, but whether it is valuable work. They should be asking whether staying up all night to go through these rituals has been worth a hell of a lot of money to them.

Let me mention another example. We sat in a committee all day. We had flown in witnesses from across the country to study the MP pension bill. They came in early in the morning and we sat there all day, morning, afternoon and evening. Did we stop for five minutes to review or discuss any of the committee testimony to determine whether there was anything in it that might apply to the legislation? No. We proceeded to clause by clause consideration and did the bill in 12 minutes. Therefore, we went through the ritual of flying these people in and hearing from them.

The question once again is: Hard work costs a lot of money. Was it of any value? The truth is, and this is not a phenomenon restricted to Canada but certainly one that has become worse here, that many MPs play very little or any real legislative role. It does not matter whether they are ignoring their constituents' views, their election commitments or their personal principles and knowledge, we know that most MPs will simply vote with the party no matter what the bill is about and whether they have read it or not.

What really is the value of that? What really is the equivalent to that? Is that equivalent, as some would tell us, to being a senior executive? If that is the way the government and others believe the House of Commons should work, maybe MPs are regional sales reps for their political parties. Maybe that is the comparison we should be making.

I am just giving another point of view. An independent commission should look at those kinds of issues. Maybe it would end up not looking at how we are remunerated but what we are doing around here and whether we can make it more effective.

There is one little item of which I have to make some mention. I normally do not talk at all about my personal life but let me digress for a second. In the committee meeting, the President of the Treasury Board said, and the parliamentary secretary repeated it today, that before we opt out of these pensions we should consult our families. He said that we were really doing our families wrong by doing this. It was a valuable suggestion.

I got married just after I came to the House. I have been married a year and a half. I am starting to understand this marriage thing. I said: "Before I opt out I should really consult my wife. It concerns the future and our future". I thought it was the right thing to do to opt out but I thought: "Yes, this wise advice. I should consult my wife". The treasury board president, the expert on family values that he is, advised me to do this.

I talked to my wife Laureen and explained that this potentially could be very expensive for us. I tried to explain it to her. This point is important because in the riding she talks to people. She is in touch with her family. She is not in this cocoon. She said to me: "There may be some truth in what you are saying but the reality is that both you and I know that the pension plan is way too generous. We know what the public thinks about it and we know what it is". She said: "You did not get elected to rip off the taxpayers. Frankly, if you or I ever find ourselves in a financial situation on the job or any other job where we are doing that, then we had better find other work". That is the only way to look at this.

Reform MPs in opting out are not making a political point on a particular day. Let me be very clear to Liberal members about this, those who are thinking of participating. In opting out we are making a solemn pact with the taxpayers. The pact is the following. This pension plan is not reformed satisfactorily. It is

not an acceptable plan. By opting out we have no stake in it whatsoever.

The government can refuse future opt outs and it can grandfather the present recipients if it wants but if we form the government we have no vested interest whatsoever in this scam. When we have the chance to put in a plan, if this is not changed, there will be no grandfathering. There will be no trough regular and trough lite. We will take every legal step necessary to cut benefits that were not adequately contributed to by members of Parliament. We will lead by example in reforming the fiscal situation of this country. We will start here and we will not spare the people who made the decision to opt into that plan. That is our commitment.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, I am pleased to speak today on third reading of Bill C-85, which proposes amendments to the Members of Parliament Retiring Allowances Act.

Before I begin, I want to highlight the points that I wish to make during my comments. First, it has to do with the question of total compensation. Most members would agree that the pension plan is an integral part of the compensation of any employee. When an employee looks at a position that pension plan is part of the compensation in this debate and in the comments made by hon. members.

They know very well that they are dealing with pension plans as a stand alone item without reference to the total compensation package. That is the first point.

The second point is that the salaries of members of Parliament have been frozen since 1991 and will be frozen and have been designated to be frozen until 1997. That is the commitment the government has made and members of Parliament have made, to have their salaries frozen for seven years.

The third point is that independent consultants have been asked to assess the total compensation offered to members of Parliament. Their conclusion was that the total compensation of members of Parliament was not out of line with comparable work in other sectors.

The fourth point that I am going to make has to do with this bill and what it does. The bill reduces the value of the pension plan that members of Parliament presently enjoy. It eliminates things called double dipping. It sets a minimum age that must be reached before a member can start collecting. It also reduces the accrual rate. This bill reduces the value of the pension plan. To defeat this bill would mean that the existing plan would stay intact. As a result it is clear all members of Parliament will be supporting this bill, if not at least in principle.

I am going to touch on the two options that have been suggested particularly by the Reform Party. I intend to demonstrate that the actual cost of those options would be more to the Canadian taxpayers.

Some individuals and organizations have waged a constant publicity battle against the bill and its provisions as being too generous. They have targeted the earned pension entitlements of individual members. Some of this outside criticism has involved exaggeration that treats pensions in isolation removing them from the total compensation context which is where they properly belong.

The independent study conducted by Sobeco Ernst and Young and tabled in this House in March of last year did not find MPs' total compensation package to be overly generous but I emphasize that it did recommend a redistribution of the various elements of that package. Sobeco Ernst and Young recommended increases in direct compensation with corresponding decreases in indirect compensation including pensions.

This is point number one. We are talking about total compensation. In fact the total compensation is not overly generous but the distribution of that income between the various forms of income should be readdressed.

The Lapointe commission report which was tabled last July also recommends changes. Among other things it recommends that pensions should not be payable before age 55 and that basic indemnities should be increased once the salary freeze is lifted. Again an independent commission has recommended, and the government has accepted the recommendation, that pensions not be payable until age 55 or later and that the basic components of the total compensation should be dealt with but not until the freeze on salaries is lifted. It would be inappropriate at this time to increase the basic salary of members and reduce the pension. We are going to respect the salary freeze that has been accepted by all the civil service and all members of Parliament.

A variety of views have been expressed during the course of debates on the pension issue. Some members no doubt would like to stay with the status quo while others seek radical change. I doubt that there is a single member who has not been affected by all the criticisms that have been made. One thing I am certain of though is that we have all heard from our constituents and we have listened to them.

The government has paid particular attention to what Canadians have had to say on the issue. Bill C-85 fulfils our commitment set out in the election platform with respect to double dipping and the minimum age at which pensions will begin to be paid. It further fulfils the President of the Treasury

Board's commitment made in February of this year to table legislation before the end of April.

I believe that the amendments proposed in the bill are balanced and fair both to the taxpayers of this country and to members of Parliament. The proposed changes show Canadians that the government has taken note of their concerns and has acted upon them.

At the same time the government is conscious of the fact that in periods of deficits and public sector salary freezes, it would not be ethical to increase members' basic indemnities as recommended by the Sobeco Ernst & Young report. Consequently it would be inappropriate to implement the recommended cutbacks to MP pensions at this time.

As I have said, the changes proposed in this bill are reasonable and fair. Nevertheless not everyone will agree with them. There will be criticism within and outside this House that the changes do not go far enough. This said, I think we will all do well to remind ourselves that no matter how hard we try we cannot please everyone. I do believe that this bill represents a fair and justifiable compromise that seeks to accommodate various points of view.

I would like to go briefly through the main changes to the pension plan proposed by Bill C-85. The new minimum pensionable age will be 55. In the future, senators and members of Parliament who earn over $5,000 a year from an appointment, employment or other personal service contracts in the federal public sector will see their pensions reduced on a dollar for dollar basis by their earnings. The pension accrual on future service will drop from 5 per cent for each year of service to 4 per cent. The contribution rate on future service for members of the House of Commons will drop from 11 per cent to 9 per cent of salary. Common law spouses will be recognized for survivor benefit purposes just as they are under the public service, Canadian forces and RCMP pension plans.

In keeping with the generally accepted practice in Canada that when changes are made in pension plans they do not reduce benefits accrued to date, all of these changes, with the exception of changes to the survivor benefit arrangements, will apply only to pensions or portions of pensions earned on service that occurs after the date this bill receives royal assent. This represents a fair and equitable approach. It means that members who have organized their financial affairs taking into account the pensions they have earned to date will not see rules changed midstream leaving them potentially adversely affected.

As I have said, it is simply not possible to please everyone. Consequently, those members of Parliament who do not agree with the changes and reductions proposed by Bill C-85 or who do not believe them to be far reaching enough will not be obliged to continue participating in the plan. As the Prime Minister promised, all members of Parliament will be given a choice. They will have 60 days from the date this bill receives royal assent to exercise an option to stay in the plan.

Having touched briefly on the main changes proposed by Bill C-85, I would now like to focus on the issue of the new minimum age for payment of members' pensions. As we all know once a member has six years of service, the present provisions see the pension commence as soon as the member leaves office. I would like to repeat that because some of my constituents have understood it differently. There is no pension payable when a member completes six years. Six years is the earliest date at which a member could collect, but he or she must have left office to commence receipt of pension payments.

I do not believe this provision was the result of some arbitrary decision. There were sound philosophical and practical reasons behind it. The provision was introduced so a member would have an immediate income on which to draw to assist him or her in the often difficult transition from public to private life. This is the only immediate income available to a member with an immediate pension entitlement. There are no cash settlements, no lump sum severance benefits. In fact, members of Parliament do not qualify for unemployment insurance benefits under the current legislation.

I would remind those who believe the immediate payment of a pension is indefensible that not a single member of this House enjoys any kind of job security. There is absolutely no guarantee of a career as a member of Parliament. Every four or five years we must seek re-election and many of us find our tenure in this House brought to an abrupt end.

Nevertheless, despite these considerations a general consensus was reached that the minimum pensionable age should be raised. In addition, after considering recommendations from both the Sobeco Ernst & Young and the Lapointe commission reports, the government accepted the recommendation that 55 was a reasonable pensionable age.

This new age will only apply to pensions or portions of pensions earned after the bill receives royal assent. This means that any pension earned prior to royal assent will still be payable according to the existing rules, that is, as soon as a member leaves office. Once again I should emphasize the government believes this to be a fair and equitable approach and one that is consistent with generally accepted and legislated pension practice, namely the protection of accrued pension rights and benefits.

I know full well there will be critics who say we are not going far enough, that possibly the minimum pensionable age should be 60 or 65. To such critics I would again emphasize the precarious nature of an MP's career and the likelihood of a member suddenly finding himself or herself unemployed. We all know it is not easy to switch careers in midstream and once a person has turned 50 years of age it can often prove impossible to find new employment. Therefore, I would suggest that it is

not unreasonable to propose in future MP pensions should go into pay once a former member reaches age 55.

How does age 55 compare with the pensionable age under provincial pension plans for members of respective legislative assemblies? The government's proposal of age 55 appears to be very much in keeping with the majority of those plans. Let me give some examples. Age 55 is the earliest pensionable age for MLAs in Saskatchewan, Nova Scotia, Yukon and the Northwest Territories.

Some provinces have adopted a formula approach. In Newfoundland the pension starts when age and service total 60. In Ontario it starts when a member's age and service total 55. British Columbia has a combination of straight minimum age and a formula requirement. The pension is paid when a member reaches age 55 or when age and years of service total 60. Quebec has a similar arrangement whereby the pension goes into pay when a member's age and service equal 65, but the member must be at least 50 years of age.

Only the province of New Brunswick still has no minimum pensionable age. Alberta has terminated the MLAs pension plan and Prince Edward Island has discontinued its pension arrangements for its present MLAs, although new arrangements are under review by an independent commission. The recent election in Manitoba was to see the existing pension arrangements terminated and replaced by a registered retirement savings plan, to which both MLAs and the province would contribute.

If we look at the pensionable age for elected representatives in some other western democracies, we also see a variety of practices, some of which contain a service component, some of which are based on age alone once the pension is vested. For example, in Australia a pension is paid after 12 years of service or at age 60 with at least eight years of service. In Belgium the minimum pensionable age is 55 or age 52 with eight years of service. In France the pension is based on age alone, age 55, while in Sweden it is based on service alone being 12 years. In the United Kingdom the pension is payable at age 65, or age 60 if the age and service equal 80. In the United States it is the age of 62 or age 50 with 20 years of service or 25 years of service with no age qualification.

I would suggest that these various combinations of age alone, service alone, or age and years of service together have been developed in recognition, and I stress in recognition, of the uniqueness of service as an elected representative, in recognition of the fact that there is no guaranteed career as such. I would suggest that the government's decision to set age 55 as the new minimum pensionable age is well within the range of those generally accepted for elected representatives of the countries I have just mentioned.

We have looked at the pensionable age ranges for the MLAs of the provinces and we have looked at the arrangements for elected representatives in some of our fellow western democracies. I do know there are some people who will ask how a pensionable age of 55 compares with the pensionable age for ordinary Canadians. I go back again to the unique and specialized nature of our employment here on the Hill and I point out that it is not unusual to tailor pension plans to meet specific career needs to accommodate career patterns that differ from the norm.

I would light to highlight the special early retirement provisions that have been put in place for air traffic controllers, members of the Canadian forces and the many police forces across the country. These all recognize the vagaries, demands and requirements on career patterns that do not correspond at all to career patterns of the majority of Canadians.

I would like to go back and look at the options Reform members have presented to the House. I should like to address the general feeling of many of their speakers that pensions of members of Parliament should have the same provisions as those applicable to the private sector.

One aspect of private sector pension plans to which those members have not given consideration is the vesting differential. Vesting is the point at which the contributions of the employer become the property of the employee. As an example, in many plans in the private sector companies have plans which allow members to start accumulating pension benefits after only two years of service, whereas presently members of Parliament do not have that kind of provision.

If we were to adopt two years of service before vesting began, each and every member of Parliament who has served in this place would qualify for a pension, when in fact less than half of members of Parliament ultimately qualify for pensions. On that basis alone, to simply change that aspect of a pension plan would mean that the cost to the Canadian taxpayers would double.

There are some differences. For instance, members of Parliament are required to pay 11 per cent of salary and the basic salary for a member of Parliament is $64,400 a year. Eleven per cent of that salary or some $7,000 per year must be paid into the plan. No private plan requires 11 per cent. Most plans only require about a 3 per cent contribution rate to a maximum of some $3,000 to $5,000. In terms of the actual contribution on behalf of members, it is substantially higher than we see in private plans.

The vesting for members begins after six years, whereas private plans begin vesting after two years and employees could qualify for a pension after only two years of service.

Members of Parliament also have their eligible RRSP contributions reduced by the amount of pension benefits accrued in the plan. Should a member not qualify for the pension, the funds they have contributed would be returned to the member, but the RRSP limits that were forgone because of the MP pension plan are not recoverable.

Members can qualify for pensions after 19 years of service of up to 75 per cent of their salary. Many plans pay up to 90 per cent. I give examples of teachers, school boards and firefighters.

The hon. member for Calgary Centre said that members of Parliament should not receive any expense allowance and that they should be paid $150,000 a year. That is the wrong time to increase members' salaries.

I simply close by saying that I have no hesitation in supporting Bill C-85 which brings into effect important changes that can be fairly and reasonably implemented at this time.

[Jay Hill, Reform, Prince George—Peace River, BC]

Madam Speaker, I notice members opposite making fun of the tie which I happen to be wearing. The tie is for the benefit of members opposite. It is what is commonly referred to by many of my constituents as the piggy plan, not the pension plan.

At the outset I inform the House that I will be splitting my time with one of my colleagues.

Why is the Liberal government changing the MP pension plan? We would think it would be doing it for reasons of integrity. The Liberal government is only addressing MP pensions to try to deflect public criticism. It knew Canadians wanted real changes so it made red book promises. However the promises were minimal and the government is doing the absolute minimum to barely meet those promises.

What were the promises? They were to end double dipping and to change the minimum age for collecting an MP pension, two of the many things that have outraged Canadians. The bill includes provisions to change those two things, which I commend, but the plan needs a major overhaul. This is just a start.

When questioned about the continuing generosity of the MP pension plan most Liberals throw up smoke screens and whine about how underpaid politicians are. They do not understand that the salaries of working MPs are unrelated to how much retired MPs should be making.

Over the past decade whenever the public has called for MP accountability and questioned the unsustainable and bloated pension package, the government has protected the plan and met the criticism by freezing MP salaries in major PR campaigns. It seemed to work before but not any more. Canadians are looking at the pension plans. Let us stick with the issue and not talk about low MPs salaries to defend high MP pensions.

Today the Liberals are pointing to studies that say MPs are underpaid while they are working. They respond by retaining this overinflated pension plan. Next year or the year after they will point to the same studies and say: "Gosh, look, we are underpaid. The studies prove it". They will pull out the sob stories and gain public support for salary increases. Just as they have refused to discuss the real issues on MP pensions now, they will refuse to discuss the MP pension plan then. That is because it is indefensible.

The government members go to great lengths to talk about anything but why they should be entitled to a two-tier pension plan. However some members of the government do not deny that the plan is generous. Just last Friday the hon. parliamentary secretary to the leader admitted:

The pension plan was generous. It is generous, and remains generous. However, the members of Parliament who entered the lists for the election in 1988 and in all previous elections did so on the basis that at the end of their term of office they would be compensated in some way that was generous but was designed to make up for the loss of income they suffered in being elected to Parliament in the first place.

He continued:

Most people enter a career looking at the remuneration package and seeing what it is like.

I think I speak for my colleagues on this side of the House when I say that Reformers did not switch careers and enter politics for the remuneration package. We came to Ottawa to represent our constituents and to make some long overdue changes. Altering the platinum plated MP pension plan is just one such change.

It saddens me to think that the main reason some of my hon. colleagues across the way entered politics was for the promised pension reward following their retirement from public service, and this is by their own admission. I would like to believe my colleagues opposite are honourable so I return to my first question. Is the Liberal government committed to making significant and necessary changes to the MP pension plan? Will those changes bring it into line with other Canadian pension plans?

[Bob Mills, Reform, Red Deer, AB]

Of course not.