This week, I changed much of the tech behind this site. If you see anything that looks like a bug, please let me know!

House of Commons Hansard #138 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was cpp.

Topics

Questions On The Order PaperRoutine Proceedings

March 5th, 1997 / 3:40 p.m.

Fundy Royal New Brunswick

Liberal

Paul Zed LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I suggest that all questions be allowed to stand.

Questions On The Order PaperRoutine Proceedings

3:40 p.m.

The Deputy Chairman

Is that agreed?

Questions On The Order PaperRoutine Proceedings

3:40 p.m.

Some hon. members

Agreed.

SupplyGovernment Orders

3:40 p.m.

Reform

Preston Manning Reform Calgary Southwest, AB

moved:

That this House condemn the government for requiring Canadians to pay over 70 per cent more in CPP premiums, thus increasing payroll taxes that are a cancer on job creation, while refusing to eliminate the huge subsidy that those same Canadians must pay to maintain the gold-plated MP pension plan.

Mr. Speaker, I rise to speak on this motion which pertains to the government's 70 per cent hike in CPP premiums. I will begin with a brief review of the Liberal-Tory record on the Canada pension plan.

The plan was established in 1966 under the Liberal government of Lester B. Pearson. The plan was originally established as a pay as you go plan. It has been described critically by Bill Robson of the C.D. Howe Institute as a pyramid type scheme in which income for early investors is provided not from investment in real assets but from the capital of later investors.

During its 31 years of existence the CPP has never been administered by anyone other than Liberal and Tory administrations. Over the years various observers have pointed out that the CPP was headed for trouble and that it would require a significant increase in contributions to deliver the benefits promised, particularly to the aging baby boom generation.

Successive governments ignored this problem and the situation was allowed to deteriorate to the point where drastic action was required. On February 14, four days before the federal budget was brought down, the finance minister therefore announced that Canada pension plan premiums would be increased from 5.8 per cent of earnings to 9.9 per cent of earnings over six years, a whopping 73 per cent increase in payroll taxes, the greatest single increase in payroll taxes in the history of the country.

He also announced that despite the increase in premiums there would be no increase in benefits. Thus the average worker will end up paying a total of $1,635 per year matched by another $1,635 from the employer. Self-employed people will pay both shares just to receive a pension of less than $9,000 per year, in 1997 dollars.

What was most conspicuous about the government's announcement was what it did not contain. First, there was no acknowledgement of the mismanagement by both Liberal and Tory administrations which allowed the CPP to get into this situation in the first place. As has been pointed out, if the CPP had been a private plan and had been mismanaged in this way, its managers would now be making licence plates in some penitentiary.

Second, there is no honest assessment of the negative impacts of the 70 per cent hike in payroll taxes, in particular the negative impacts on jobs, even though the finance minister on previous occasions has acknowledged that payroll taxes are a cancer on jobs.

Third, there is no serious assessment of alternative approaches to securing retirement income for Canadians at a lower cost such as those proposed by the Reform Party of Canada. What the government has neglected to do, my colleagues and I now propose to do in this debate, starting with an assessment of the negative job impact of a 70 per cent increase in CPP premiums. We want the finance minister to frankly admit, first of all, that the 70 per cent hike in CPP premiums is a payroll tax hike and to table in the House his department's assessment of how many jobs this payroll tax hike will kill so that we can propose counter measures.

In his presentation to the finance committee on October 17, 1994, the finance minister clearly referred to CPP and QPP contributions as payroll taxes and acknowledged their negative impact on jobs. But now that he has had to increase them, the finance minister is living in denial and says exactly the opposite. He now says that CPP premiums are not a payroll tax.

The finance minister refuses to acknowledge, for example, the position of the Minister of Industry, who ought to know about such things, and who said in the House as far back as 1991: "When you look at the burden of payroll taxes on small firms you have to include, of course, the Canada pension plan employer contributions. The combination of all these payroll taxes imposes an onerous burden, especially on small and medium sized businesses".

Perhaps most importantly, the finance minister is flatly contradicting the published views of the forecasting division of his department. I refer to a paper by Mr. Joe Italiano of that division published on April 25, 1995, entitled "Growth in CPP and QPP

contributions: Implications for employment and participation". In that paper Mr. Italiano clearly defines compulsory CPP and QPP contributions as payroll taxes. He also studied the employment impact of the Tory increases in these payroll taxes from 1986 to 1993 and showed how they had killed 26,000 jobs.

We therefore call on the finance minister to frankly and honestly admit that the 70 per cent hike in CPP premiums is a payroll tax hike of unprecedented proportions and to table in the House his department's assessments, and we know that they run these assessments, of how many jobs this payroll tax hike will kill so that we can propose counter measures.

In criticizing the government's ill-conceived approach to rescuing CPP, Reformers are not saying that nothing should be done, far from it. But what we propose in our fresh start platform is a more comprehensive reform than what the government proposes.

Our fresh start proposals to secure retirement income for Canadians are a combination of Canada pension plan reform, of expanding the RRSP system and of providing tax relief for lower and middle income seniors. Our proposals-we will argue this during the election campaign-deliver more retirement income per dollar invested than anything that the government has proposed to date.

I hope that MPs will ask me about this superior alternative in our question and answer time because it is worth the House considering.

Finally, I want to conclude with some observations on the government's moral authority to lead pension reform. To gain the trust of Canadian seniors, Canadian youth and the aging baby boomers, the government must be seen to be acting fairly and ethically on the issue of pension reform.

The Liberal government abandoned its responsibility to act fairly and ethically on this issue when it adopted, as its first pension reform priority, not the improvement of CPP, not the improvement of pensions for the Canadian people, but when it adopted as its first and highest pension priority the provision of the gold plated pensions for its own MPs and other MPs willing to receive them.

What does the average Canadian worker get at age 65 after contributing to CPP at 9.9 per cent of earnings? A lousy $9,000 a year. But what do Liberal, Tory, NDP and Bloc MPs get who accepted the gold plated MP pension plan at age 55? If they live to age 75, pension benefits amounting to: for the Conservative member for Sherbrooke, $4.3 million; for the Liberal member for Cape Breton-East Richmond, $3.9 million; and the NDP member for Winnipeg Transcona, $2.7 million. And the list goes on and on.

When it comes to issues of integrity, a moral authority to lead, we have observed that the government has a blind spot and perhaps a fatal blind spot.

On February 5 I asked both the Prime Minister in the House and later in the day his ethics counsellor in committee whether they did not see an ethical dimension, an integrity dimension, issues of right and wrong with respect to the political interference with the Somalia inquiry, the stonewalling of the Krever inquiry, the use of the justice department to go on a political witch hunt and the Prime Minister's broken GST promise.

The Prime Minister professed not to understand what I was talking about but the answer of his ethics counsellor was more revealing. I was asking about ethical matters, matters of public trust and integrity and right and wrong. On February 5, 1997 at the Special Joint Committee on A Code of Conduct he said: "I think you are speaking about policy questions, questions in which there is a difference between opposition parties and that of the government. It is the essence of our democratic system. I do not believe I can go and take your question"-questions about the ethics of those situations-"any further than that".

In other words, political interference and cover-up in the investigation of a murder, stonewalling an inquiry into tainted blood from which Canadians died, misuse of the powers of the justice department, breaking a key campaign promise and denying you broke it-I would add to that list giving yourself a gold plated pension while giving Canadians tin plated pensions-by the ethics of the Prime Minister and his ethics counsellor are simply differences of opinion on policy matters, not matters of trust or integrity or right and wrong.

If these are the ethical standards of the government, I believe it will never be trusted by Canadians to bring fairness and integrity to the pension issue. By its own actions and blindness it has forfeited that right to others.

To conclude, I am reminded of a study on integrity and 19th century British politics by the historian D.C. Somervell. He focused his study on two British statesmen, William Gladstone, the moralist who if he did not see right and wrong in an issue was uninterested in it, and Benjamin Disraeli, the pragmatist at the other end of the scale who never saw right or wrong in any issue, only differences of opinion.

What was Somervell's conclusion? He concluded that while it is an error to discover moral issues where none are in fact at stake, it is a greater error to be blind to them when moral issues really arise.

When the government put the old age security of MPs ahead of the old age security of Canadians, it committed that greater error, which is why I urge hon. members to support the motion before the House.

SupplyGovernment Orders

3:50 p.m.

Liberal

Charles Caccia Liberal Davenport, ON

Mr. Speaker, it is worthwhile noting that while given 20 minutes to speak on this subject matter, the member for Calgary Southwest devoted barely half of his speech to the subject matter on the Order Paper which reads in part: "This House condemn the government for requiring

Canadians to pay over 70 per cent more in CPP premiums-," and so on.

It is a fully misleading statement. The fact that the hon. member would devote half of his time speaking about tainted blood, misuse of justice, integrity of government, ethical standards rather than addressing the subject matter of the Canada pension plan demonstrates how thin and how poorly researched his subject and his speech are by the people who prepared it for him.

Obviously the member from Calgary does not know his subject and the people who prepared his speech for him today ran out of steam in dealing with it, so much so that he had to fill up the time available to him with other subjects which are not contemplated in the motion.

The member from Calgary is trying to mislead Canadians by convincing them that there is a 70 per cent hike in the Canada pension plan contributions. I would like to ask the member for Calgary Southwest whether he would use his ability to go through the proposal that has been approved by the 10 provinces and the Government of Canada and verify for himself that the 70 per cent figure is totally wrong. The reality is that the increase for the employee goes from 2.9 per cent of pensionable earnings in this year to 3.5 per cent in 1999 and gradually to 4.9 per cent by the year 2003.

SupplyGovernment Orders

3:55 p.m.

Reform

Preston Manning Reform Calgary Southwest, AB

Mr. Speaker, I will answer the hon. member's points by making three of my own. First, in not using all the time allocated to me, I am of the belief that if you want to practice economy in government it starts with economy of speech.

Second, I found the member's comments interesting because they illustrate the last point I was trying to make. The member obviously sees no connection between getting the moral authority from people to reform pensions and the fact that the government lost that moral authority when it gave its party the MP pension. The very fact that the member sees no connection between that issue and the MP pension precisely illustrates the blind spot of the government.

With respect to his substantive point, Reform has gone through the proposals that the minister and the provinces agreed to with respect to the reform of CPP. It is our conviction that the CPP cannot be fixed simply by working on it. We have to look more broadly at all the contributing factors to retirement income. That is why our proposal includes the following elements which I will take just a couple of minutes to explain.

First, a guarantee that existing seniors, every Canadian aged 60 and above, will receive all the benefits promised to them by CPP.

Second, a proposal to shift younger Canadians on to an expanded RRSP system, mandatory, tax sheltered retirement savings accounts like RRSPs and these deliver, of course, greater pension benefits per dollar invested than anything that has ever been proposed for CPP.

Third, for older workers not young enough to accumulate an adequate retirement income by expanded RRSPs alone, we propose a transition combination of CPP and expanded RRSPs to ensure pension benefits at least on a par with CPP if not better.

Finally, through our fresh start tax relief proposals, we propose to lift 1.2 million Canadians, including 300,000 seniors, off the federal income tax rolls altogether, thus improving their retirement income.

If one takes the collection of those things, the modified CPP, the expanded RRSPs and the tax relief afforded to seniors, our argument is that the package delivers greater retirement income per dollar than anything we have seen from the finance minister or from the government.

SupplyGovernment Orders

3:55 p.m.

Liberal

Harold Culbert Liberal Carleton—Charlotte, NB

Mr. Speaker, hopefully I will be brief and the leader of the Reform Party will be brief in his answer.

I listened very carefully to the presentation this afternoon. My understanding is, along with some other things, he wants to expand the RRSP system.

I would like to pose a question to the leader of the Reform Party stemming from his presentation this afternoon. Does he realize and is he considering in his Reform program, the fresh start program, that the CPP which came into being in 1966 actually has several aspects? It includes not only the retirement benefit plan but a disability option, a death benefit, and a benefit for spouses and children in the unfortunate or untimely death of the contributor. Are these not important aspects to the Reform Party?

I note with regard to his comments that in comparison the members' pension program was changed a year and a half ago. There are three important aspects of that program. The minimum retirement age was reduced to age 55 or increased to age 55. There had never been an age limit before. The reduction in benefits of over 20 per cent saved over $3 million in one year alone. It also eliminated double dipping which is something the Reform Party could check its members on.

SupplyGovernment Orders

4 p.m.

Reform

Preston Manning Reform Calgary Southwest, AB

Mr. Speaker, I am delighted to hear these members defend the MP pension plan. I invite the hon. member to join me in any place in the country. We will round up 1,000 people. The hon. member can defend the MP pension plan and I will argue against it. At the end of the day I do not think there will be much question about where the Canadian public stands.

With respect to the member's substantive question at the beginning, when I say we propose to guarantee the CPP benefits to the existing generation of seniors and make provisions for others, we

intend to guarantee the entire range of benefits. We are not just speaking about retirement income.

With respect to survivor benefits, under this expanded RRSP program we propose a substantial improvement over CPP. We propose to improve the retirement incomes of surviving spouses, particularly elderly widows, by proposing that 100 per cent of the funds of a deceased individual's RRSP would be transferable to a surviving spouse tax free. Nobody would have to go hat in hand. That is a far superior survivor benefit to that offered by CPP.

SupplyGovernment Orders

4 p.m.

Liberal

Julian Reed Liberal Halton—Peel, ON

Mr. Speaker, first, I point out to my hon. friend across the way in terms of members' pensions that 400 of the 600 living ex-members of the House get no pension whatsoever.

Second, I have a young constituent who was permanently disabled at the age of about 31. If it was not for the CPP disability clause he would have nothing. He has no family. He has no other means of support.

SupplyGovernment Orders

4 p.m.

Reform

Preston Manning Reform Calgary Southwest, AB

Mr. Speaker, I repeat. We made clear that we are continuing to support the benefits of the CPP program to the existing generation of seniors. Therefore the member is going down the wrong path by implying that we will cut that.

SupplyGovernment Orders

4 p.m.

Reform

Chuck Strahl Reform Fraser Valley East, BC

Mr. Speaker, I rise on a point of order. In his intervention the member for Davenport on two or three occasions used the word mislead with reference to the Reform Party and to the Leader of the Reform Party.

At citation 49 of Beauchesne's that is considered unparliamentary language. I wonder why, Mr. Speaker, you allowed him to use that phrase not once but repeatedly.

SupplyGovernment Orders

4 p.m.

The Deputy Speaker

The point was not raised at the time. There did not appear to be an uproar in the House. As I am sure hon. members realize, unless there is an uproar in the House almost immediately no word as such becomes unparliamentary, except the one word we all know.

If the hon. member wishes, I will look at the blues and come back if necessary. The normal test is that people get very excited when such a word is used. I hate to tell the member that is the case.

SupplyGovernment Orders

4:05 p.m.

Hull—Aylmer Québec

Liberal

Marcel Massé LiberalPresident of the Treasury Board and Minister responsible for Infrastructure

Mr. Speaker, I welcome the opportunity to reply to and passionately oppose the Reform motion before the House.

The motion clearly stakes out the opposition position that it interprets the changes to the Canada pension plan as business bashing and fiscal foolishness. That position is based on partisan politics, not fact or logic.

Let me be blunt. We had to make some tough decisions about the CPP. The changes are not painless or pleasant, but that happens when we try to fix something that should have been reformed years ago, in fact decades ago. These changes are not based on decisions made in isolation and imposed without consultation.

One of the many realities ignored by the opposition motion is that these are reforms agreed upon by the federal government and eight provinces representing the significant majority of Canadians. These are reforms based on a year long process of public consultation and intense discussion and negotiation between the two levels of government. Most of all, these are changes to the CPP with an overriding and concrete goal: to preserve and secure one of the key pillars of our national pension system.

The third party can play games with phoney mathematics and hidden agendas, but the federal and provincial governments had to address a real problem and find a workable solution. That is what we have done, to the benefit of Canadians today and for generations to come.

Let me remind the House that the Canada pension plan affects all working Canadians and their families. It is the compulsory earnings based plan that forms one pillar of Canada's public pension system. The proposed changes are a strong and balanced package of reforms that will ensure the Canada pension plan is there for Canadians today and in the future. There for Canadians means not just for workers when they retire but equally to help Canadian workers and their families should they become disabled or die.

This is something the third party ignores in its public proposals. The fact is that about 30 per cent of CPP benefits go to disabled persons and for survivors' benefits, but for the Reform Party these Canadians do not seem to exist.

That is why I find the assumptions underlying today's motion by the Reform Party so disgraceful. These assumptions shamelessly dismiss contributions paid by workers and their employers as little more than common payroll taxes. They completely ignore the real issue, which is that CPP contributions guarantee every Canadian worker a pension. In this sense, CPP contributions constitute an investment, ensuring workers a secure retirement and adequate benefits both for disabled workers and families of deceased contributors.

CPP contributions will not swell the government's coffers and the government cannot use this money for its expenditures. On the contrary, contributions go into a separate fund used to pay pension, disability and survivor benefits. Under the proposed amendments to the Canada Pension Plan, money collected in future will be invested so as to obtain a greater return for contributors. Not only

will Canadians get back all the money they contributed but, in addition, they will see increases in their pensions and other benefits.

These are not just empty words. Allow me to remind the House that the tax system treats CPP contributions as pension benefits. In the calculation of income tax payable, contributions qualify as tax credits for workers and tax deductions for employers.

Unlike the situation that arises when taxes are increased, increases in CPP contributions result in decreased tax revenue and a tangible drop in government revenue.

Today's motion prefers to ignore these facts. It is the type of self-serving argument and attitude that prefers to drive wedges between Canadians, between generations, between regions, rather than build for a fair and shared future. It is a motion that suggests we are imposing harsh hikes in CPP contributions and that ignores the much heavier increases that would otherwise have had to take place. It does so because it is a motion that ignores the very real problems we have had to address with the CPP.

The plan's chief actuary reported that the plan was simply not financially sustainable under the current contribution schedule. This is why firm, forward looking action had to be taken. The only fair way to deal with the problems facing the CPP is to increase contributions now so that Canadians can begin to pay enough to cover the costs of their own pensions plus a fair and uniform portion of the unfunded liability that has built up over the past 30 years.

There is no mystery about the problem. Basically the costs of CPP benefits have grown faster than originally expected when the plan was first instituted in 1966 and will escalate dramatically when the baby boom generation reaches age 65 around 2011.

I remind the House that under the existing legislation, as a matter of statute, contribution rates were already scheduled to rise to more than 10.1 per cent in 2016. In other words they were to virtually double. Even then the chief actuary of the plan has shown that without changes the CPP fund would still run out of money in less than 20 years. Without additional changes, contribution rates would have to increase from that 10.1 per cent to over 14 per cent of pensionable earnings to cover escalating costs.

It is essential to recognize that by acting now to fix the CPP we are limiting contribution rates to a maximum of 9.9 per cent. Then they can be frozen and remain steady thereafter while providing the same benefits.

The increase in CPP contribution rates that we announced is not the first in a series of increases. I repeat, the contribution rate of 9.9 per cent to be borne equally by workers and employers is a maximum that should never be exceeded. The rates will not increase again. This increase is lower than the 10.1 per cent already projected under the existing legislation, and is well below the 14.2 per cent that would have been required if we had not acted now.

It is true that the contribution rate in 2003 will be about 40 per cent higher than the rate foreseen under the existing legislation, but, at the same time, thanks to the amendments we are proposing, the contribution rate in 2030 will be much lower than projected. It will in fact be approximately 30 per cent.

This means that future generations, our children and grandchildren, will not be weighed down by an incredible financial burden. It also means that people in their middle years whose contributions had been less than the amount required to pay future benefits will now pay contributions that are more equitable in that respect. Younger Canadian workers and young people entering the labour force will pay contributions that are not as high as previously planned. Also in the interests of fairness.

What about present CPP beneficiaries? Why are these people not affected? There is no doubt that many are drawing pensions that are far more generous than they would be on the basis of the contributions they paid. That is true, but it is not their fault. If anyone is to blame, it is the plan itself which was not adjusted in the past as it should have been, because previous governments did not have the political will to make these decisions.

That is why our proposal is accompanied by measures to make the Canada pension plan more accountable and provides for more frequent review. Furthermore, any new initiatives under the plan must have full financing before they can go ahead. However, it would not be fair to make our seniors, who made their retirement plans of the basis on the existing plan, pay their costs retroactively. We signed a contract with our seniors and for the sake of fairness, we must honour that contract.

As you can see, the proposed changes to the Canada pension plan are not an affront to business or the taxpayer. They do not involve an additional tax or some new trick in our tax system. In fact, these are prudent and basic measures that are entirely in line with our record for sound management of public moneys and reflect our commitment to be fair in every respect.

If we had failed to make the difficult decisions that were necessary, younger generations would have had to pay twice as much as they will now, without receiving a penny more in benefits. This would have been neither fair nor affordable, and indeed it

would have been excessively costly. To put such a burden on future contributors would, in all probability, have led to the collapse of the plan. We could not afford to let this happen.

Acting now will ensure the Canada pension plan is on a secure and stable financial footing for the foreseeable future. As I said before, the CPP changes were not decided in isolation. They reflect a truly national consensus based on public consultations and a decision making process that involved the provinces as full partners.

Believe me, no government at any level likes to ask its people to pay more for the same services. But it is a price many Canadians have told governments they are willing to pay in order to preserve the plan they believe in and want to be able to depend on. They told us so during the public consultations which were held in every province and territory last spring as part of the federal-provincial review of the plan. Canadians clearly said that they valued the CPP. They told us they wanted it fixed, not scrapped.

During the review, we and the provinces examined a number of options and heard opinions from both ends of the spectrum. We considered many alternatives, but narrowed our choices to those which would ensure that no one's benefits were jeopardized; not those of today's beneficiaries, nor those of future generations. We listened when Canadians everywhere said the Canada pension plan is important to them. They want it preserved, and preserved in a way that does not pass on an unfair burden to younger generations. It is worth remembering that the debate currently taking place is not about choosing to increase contribution rates. It is about choosing to preserve the Canada pension plan.

Canadians asked their governments to make the CPP sustainable by strengthening its financing, improving the funds' investment practices and reducing costs. The changes proposed do exactly that.

Before concluding, let me briefly talk of another element of today's motion, an example of the political game playing that demonstrates the desperation of the third party. Reform members have attempted to create a link between the proposed Canada pension plan changes and the current pension arrangements for MPs. This is not just a comparison of apples and oranges. It is more in the realm of sour grapes.

I need not remind you, Mr. Speaker, that many Canadians belong to a pension plan, not only members of Parliament. For any pension plan member, pension income represents deferred compensation and thus an earned benefit. We must also remember that the terms of the MP's plan were designed to take into account an MP's unpredictable career pattern-as I think most Reform members will see within the next few months-lack of job security and the fact that many members take a substantial salary cut in undertaking parliamentary service. The MP's pension plan, like other employer sponsored pension plans, provides a pension arrangement for a targeted plan member population and therefore is adapted to their needs.

For the record, MP's pension contributions are higher than the norm for employer sponsored pension plans and are significantly higher than the contributions required under the Canada pension plan. I should also note that under the MP's plan members of the House of Commons contribute 9 per cent of all salaries. By comparison, in 1997, employee contributions under the CPP will be equal to 3 per cent of pensionable earnings. This rate is projected to increase to 4.45 per cent over the next six years.

I would also like to remind the House that in July 1995 and in the context of a freeze on parliamentary salaries, the government amended the Members of Parliament Retiring Allowances Act. Under the new arrangements age 55 has become the minimum pensionable age. As well, benefits for MPs in respect of service on or after July 13, 1995 have been reduced by 20 per cent. Also, the practice of double dipping has been curtailed within the federal public sector, which is the only sector over which the federal government has jurisdiction.

These changes went beyond the government's red book commitment to reform MP's pensions and have significantly reduced the related costs to taxpayers. In fact, savings over the past year have been in excess of $3 million. Also, as with any pension plan, the MP's plan is regularly examined with a view to balancing the needs of retiring MPs and the related costs.

The real issue, of course, is not a comparison between the CPP and the MP's plan. This is just electoral grandstanding. What today's motion tries to dismiss and discredit is the very real and historic reforms that the provincial and federal governments are bringing to the national workers' pension plan, reforms that will affect many millions of Canadians today and in years to come. By our work, these Canadians can plan for their retirement in greater security without having to wonder if the CPP will be there for them. It will because we have acted. This is the type of action that sustains our great country and that Canadians expect and demand of a government committed to their future.

I am proud of what we have done and confident that the vast majority of Canadians see it as the major achievement it is, one firmly and fully committed to their best interests.

SupplyGovernment Orders

4:25 p.m.

Reform

Ian McClelland Reform Edmonton Southwest, AB

Mr. Speaker, with great respect, as far as the comments of the President of the Treasury Board regarding the MP pension plan and its equity vis-à-vis other Canadians' pension plans are concerned, Canadians know full well that members of Parliament through their pension

plan got the gold mine and Canadians got the shaft. Of that there is no doubt. People know it and they know it for what it is.

In his comments the President of the Treasury Board pointed out that the provinces went along with the changes to the Canada pension plan. They went along with it obviously because they have been partners in this rip-off of Canadians for 30 years.

What the President of the Treasury Board did not say was that one of the features of this renewed Canada pension plan at 9.9 per cent of earnings is that the provinces will have the privilege of rolling over their debt for another 20 years. Therefore, this plan is not going to start getting better right away. They are going to postpone making it healthy or healthier for another 20 years.

My question relates to the equity of the CPP. The President of the Treasury Board indicated during his comments that Canadians need to be fair in sharing the future. It is incumbent on the President of the Treasury Board, in representing the Liberal Party of Canada, which has been in power for at least 20 of the 30 odd years that this plan has been in force, to account for the mismanagement of the plan that got us into this mess in the first place.

Actuaries and demographers did not just wake up overnight. The plan was flawed right from the beginning, but the Liberals did not have the strength to keep their hands off the honey pot. What politician does? The changes to this plan have not made it safe from the honey pot.

Based on the average industrial wage of $36,000, if a young Canadian were to place 3 per cent of earnings over the lifespan of their work into an investment vehicle that has a return of a typical average over the last 40 years, would that Canadian have more money from a 3 per cent investment than they would for their almost 10 per cent investment in the Canada pension plan?

SupplyGovernment Orders

4:25 p.m.

Liberal

Marcel Massé Liberal Hull—Aylmer, QC

Mr. Speaker, I would first like to underline that the important and real question being discussed is the reforms that have been made to the Canada pension plan. I understand that the third party, knowing that it has no real arguments about the reforms made and that it should instead congratulate us, has come to the conclusion that it should try some other subject in order to try and get some interest generated.

It is clear now that after days and days of the third party trying to find fault with the reforms to the CPP, public opinion is saying that the reforms are necessary. They are saying that the reforms introduced by the government are excellent and taken in co-operation and partnership with eight of the provinces and a large majority of the Canadian population. They fit the bill, remove the imperfections and now ensure that all Canadians will have access to a proper pension plan that is now properly funded. That is what is important.

However, we also have to take into consideration that some of the colleagues of the hon. gentleman have proposed other plans for MPs. One of these is to double the salaries of MPs. What is the best route to follow?

SupplyGovernment Orders

4:30 p.m.

Reform

Jim Silye Reform Calgary Centre, AB

Mr. Speaker, I am glad I am in the House today. This gentleman keeps referring to salary and I was speaking about compensation when we were debated the bill in the first place.

I think a member of Parliament deserves proper compensation, but it should be above board where it is visible, taxable and clear. When I threw a number out as to what an MP should receive it included taking care of all travel expenses.

SupplyGovernment Orders

4:30 p.m.

An hon. member

No.

SupplyGovernment Orders

4:30 p.m.

Reform

Jim Silye Reform Calgary Centre, AB

Yes, it did. Go back and look at the speech.

It included a suggestion that MPs look after their own pensions, which is no better than the private sector. Five per cent of that money should go into a pension if they choose to and five per cent matched by the government. It should be no better than the private sector. That is the pension portion of my compensation package for MPs. The Liberals can twist and bend all they want. If it is a choice it would be an investment.

The finance minister and this minister argue that the CPP increase to 10 per cent is an investment. If it is compulsory by the government it is a tax. If the rate is set by the government it is a tax. In opposition they called it a payroll tax. Now they are calling it an investment.

The government is very hypocritical. I question its logic on raising the CPP. There are concerns with the CPP. People are worried that money will not be there for them, but the logic is that the fund is $39 billion now. The deficit annually is about $1 billion and could go to $2 billion in any given year so the premium has to be raised.

Why did they overreact? Why did they not just raise the premium to 7 per cent? At the same time, because payroll taxes cost jobs, why did they not lower the unemployment insurance premium from the high lofty numbers? That fund has a fat $5 billion sitting in it which is soon to grow to $10 billion. They should lower the unemployment insurance premium, raise this other one if it is in jeopardy and keep the same two-year fund that is required instead of increasing it to five.

They have overreacted. They have increased the taxes too much. It is too great a burden on the economy to increase the taxes by that much. By not reducing the unemployment fund which they are

using to lower the deficit they will actually kill jobs. Their strategy of creating jobs is sadly lacking.

SupplyGovernment Orders

4:30 p.m.

Liberal

Marcel Massé Liberal Hull—Aylmer, QC

Mr. Speaker, I have great respect for my hon. colleague, who has just mentioned certain facts that unfortunately do not correspond to reality. I would like to remind him what he said in April 1995 during the debate on Bill C-85. He said:

We should get fair compensation, fair remuneration. It is at the senior executive level. Pay us $150,000 a year and we will look after our own pensions.

Not all Reform MPs opted out of their pensions, notwithstanding what they said. We have excluded double dipping. I must say a number of Reform MPs from Kootenay West, Nanaimo-Cowichan, Saanich-Gulf Islands and Lethbridge-

SupplyGovernment Orders

4:30 p.m.

Liberal

Harold Culbert Liberal Carleton—Charlotte, NB

Are they double dippers?

SupplyGovernment Orders

4:30 p.m.

Liberal

Marcel Massé Liberal Hull—Aylmer, QC

They are collecting pensions while collecting their salaries as MPs.

SupplyGovernment Orders

4:30 p.m.

Liberal

Harold Culbert Liberal Carleton—Charlotte, NB

Never.

SupplyGovernment Orders

4:30 p.m.

Liberal

Marcel Massé Liberal Hull—Aylmer, QC

I am shocked. I cannot believe that people who are arguing against double dipping which we have removed from the act are still unfortunately continuing these practices.

I understand why the Reform Party opts out of MPs pensions. It is because they have no chance of ever collecting.

SupplyGovernment Orders

4:30 p.m.

The Deputy Speaker

When there are members from another party wishing to question a member the Speaker normally goes to the other side.

SupplyGovernment Orders

4:30 p.m.

Reform

Ian McClelland Reform Edmonton Southwest, AB

Mr. Speaker, I would like to bring the President of the Treasury Board back to the fiduciary responsibility of the government to handle citizen's money in the best possible manner. I draw his attention the Quebec pension plan, the disability payments and the way in which the Quebec pension plan has been administered vis-à-vis the Canada pension plan.

Would the minister advise the House and Canadians generally why under the Quebec pension plan for disability take-up between 1986 and 1994 there was a 2 per cent increase while at the same time in the Canada pension plan there was a 92 per cent increase?

Would the minister also tell the House why in 1976 when there were 55,000 people involved in the Canada pension plan 1,219 people came off disability, but in 1995 with 300,000 people on disability only 2,000 people came off disability? Is this the minister's indication of sound management?