Debates of June 11th, 1998

Parliament Of Canada Act

[Some hon. members]

No.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, it had been up to now a non-partisan response that addresses concern expressed by all parties. This bill is an example of parliament coming together to act on what is a sensitive issue.

Here are some of the key provisions of the bill. It is straightforward. It simply implements the committee's report which was adopted by the House.

There are two key elements to the bill. First, an increase of 2% to the salaries of MPs and senators will come into effect on January 1, 1998 and will be payable annually on January 1 for the duration of this parliament.

This increase would apply to the sessional allowance and to all other allowances. It would replace the cost of living adjustment, which would have been approximately 1% this year. In other words, this amount is not in addition to it, but replaces it.

A 2% increase is modest and it is also reasonable in the context of increases in the private sector, parliamentarians in other countries and the public service. I would like to speak to that in committee of the whole if some members intend to raise it later.

Private sector wage settlements were 2.2% in February 1998 and recent public service settlements have averaged over 2%. MPs have not had a remuneration increase other than a partial cost of living adjustment since 1980, and since 1991 nothing at all.

In 1980 the sessional indemnity of a member of the House was 120% of the average salary of a high school principal. In 1996 it was 75% of the salary of a high school principal. I see some former educators who are members of the House and I am sure they know all about it.

In 1997 a Canadian MP ranked 9th in a survey of remuneration, below Japan, the United States, France, Germany, the U.K., Australia, Norway, New Zealand and several other countries. The Blais commission report noted that a Canadian parliamentarian's salary in October 1997 was 37% that of a U.S. congressman. If we include the tax free provision it is in the order of 58%. Everyone knows that American legislators get a whole number of things in addition.

The second element of this bill provides that members who chose to not participate in the pension plan in the last parliament may join within the next 90 days.

For those members who choose not to opt back in there would be a supplementary severance allowance and I believe that this is fair.

Members of the House who retire at 55 years of age or over and who are not entitled to a pension would receive an additional one month of remuneration for every year of service up to a maximum of 12 months.

Members who are under 55 and retire would receive the supplementary severance when they turn 55, just like MPs who participate in the pension would receive it at age 55. I also believe that this is fair. This provision is also very similar to the severance package that exists in the Ontario Legislature.

The bill also provides for a small increase allowance for the Speaker of the other place and the Speaker pro tempore in the other place. This was recommendation by the Blais commission report.

We should not always be guided solely by what the media have to say. However, you will permit me to read a few quotes. La Presse said “The average income of MPs is an income many professions, middle managers in the private sector, senior public officials and unionized employees in certain specialized jobs would find ridiculous”.

I will read other quotes.

From the Toronto Star : “It is the right time for a modest increase in parliamentary salaries. A 2% a year increase over four years is reasonable”.

Finally, from La Presse again, and I quote “In the interest of democracy, MPs' salaries must be increased”.

Last July the Blais commission was appointed. It made its report which was tabled last January and which was referred to a committee. The committee reported on June 3. The House voted on the report earlier and now the bill is before us. I commend it to all members.

[Rob Anders, Reform, Calgary West, AB]

Mr. Speaker, I rise on a point of order. I seek the unanimous consent of the House to have a recorded division.

[The Speaker]

Is there unanimous consent?

[Some hon. members]

No.

[Randy White, Reform, Langley—Abbotsford, BC]

Mr. Speaker, I do apologize to some extent for some of the things being said here.

This is one of the few times in the House that members will find me dedicating a speech. I have done so on a number of occasions where I thought that an individual or individuals have deserved such a speech to be dedicated to them. I therefore dedicate this speech to my colleagues in the Reform Party who have had the intestinal fortitude to stand up for what they believe in.

It is those principled individuals who took it on themselves to opt out of the gold plated MP pension plan who got the alternative pension placed before the House today. Tomorrow who knows, perhaps we will have convinced all members of the House that this alternative, which could be turned into an RRSP type plan, will be the only plan in the House.

To be sure that we have a clear position on the issue of pay and pensions, I want to go through this and make it absolutely clear where we are coming from.

One of the great difficulties we have with the legislation placed before us is the omnibus characteristics of the bill. Having read this final version before me for the first time last night, I expressed great concern for the complexities that exist within it. Let me give some examples.

Within the bill are issues such as numerous adjustments for the Senate which are not part of the MP pay and benefits issues. This bill contains issues about tax free allowances, about issues of pay increases to MPs and a substantial issue to some of us here on this side of the House of an alternative pension plan in terms of RRSP to the three parties that have opted out of the gold plated pension plan. All these issues are contained in this omnibus bill. It is quite inappropriate that we deal with it all in one.

All these and more in one bill cover three other acts. It makes it extremely difficult for Canadians to determine what MPs are for and what they are against. To make it very clear I am going to do the best I can to express our position on each and every issue, while at the same time knowing full well that the Reform Party may be outvoted on those issues we are against in any event.

I want to talk for a moment about the incidental expense allowance. It is necessary to give Canadians the confidence that all pay and allowances paid to members of parliament are up front and clearly visible at all times.

All Canadian payroll income is taxable. Reform Party MPs feel no exception should be made for federal members of parliament. We do not support any proposal that will continue to hide taxable income. MPs currently receive a non-taxable allowance of $21,400. There is not reason whatsoever that this should not be grossed up and included in the annual salary of $64,800 and taxed. There is no problem at all. It amounts to the same amount of money but then it becomes clearly visible for all to see.

I want to talk a bit about MP salaries. The Blais commission report recommended no increase at this time or at least until such time as RCMP, military and civil service receive increases. Although MPs have not received a pay raise since 1991, we feel there is still no great rush for this. We agreed with the Blais commission report that raises are not necessary now and we have no particular desire to change our minds.

Higher priorities, such as an alternative MP pension plan, have more merit and would positively affect all Canadians through lower taxpayer paid pension costs. Therefore we cannot support a proposal with a pay increase; $64,800 plus a non-taxable incidental expense allowance of $21,400 is not considered a low income.

I will spend a bit of time on this because, as most people know in Canada, it is a very near and dear issue to us. It must be crystal clear that Reform MPs did not ask to have this option put into this bill. We do not support the inclusion of this clause. It is ironic that such a clause ends up in legislation. We know there are three parties in this House that did opt out of the plan. It is also ironic that no reporters have been after the other parties to find out who is opting in. It seems they have been asking us. I will address that in a few minutes. I am not aware of any Reformers in this caucus to date who have indicated precisely to me that they are in. They have time to think about that.

It has been reported that Reform is opting in. Such comments have been made by groups like the national citizens coalition. I wonder about things like bias, prejudice, poor reporting or other political machines trying to take the heat off themselves.

I hope to influence all my colleagues about the current MP pension plan. I have had a fair bit of experience in designing pension plans. This is truly the most convoluted, inequitable, unreasonable plan of its kind in North America. Within the plan exists separate benefits and rules for 263 of 301 MPs elected prior to 1993. It also includes rules for MPs elected after 1993. There are rules for people who have opted out, for members who leave the House of Commons after six years who are younger than 55, and members who have been elected twice but who have broken service periods. The plan for 263 people is so convoluted it escapes any rational actuarial assessment.

This year alone $584,000 had to go into this plan to keep it viable. The contributions MPs make, excluding those who have opted out, amounts to 9% of payroll. Yet the government contributes a whopping 37.5%. Meanwhile those 38 remaining Reform MPs who have opted out receive no pension whatsoever and to date have saved the Canadian taxpayers $3.5 million, for which I applaud my colleagues. All these situations clearly reflect that government is continuing to allow such convoluted conditions to exist. Any actuary in this country would agree that it cannot continue.

We constantly ask ourselves why the media and a few other Canadians out there want Reformers to expose some form of weakness and not back in rather than go to those who are already in asking why they will not opt out. Reform MPs have been negotiating for an alternative pension plan for a long time. This has been a long term plan and is in line with our party's longstanding policy.

I am going to quote that policy to the House:

The Reform Party supports the provision of pensions for MPs only if those pensions are no more generous than private sector norms and meet all requirements for a registered plan under the Income Tax Act.

That is a longstanding policy, but it is so rational that most private sector employers say “What else is there?”

It is now apparent that perhaps other MPs in this House reject the position of not abandoning the rich MP pension plan for an alternative RRSP type payout. I do not think that is because they think it is right, but because an alternative pension plan would establish a reasonable, responsible precedent for all MPs. The Canadian public would expect MPs then to enroll in the new, more reasonable, alternative plan.

Let us just see for a moment what Reformers established in this omnibus bill as far as an alternative pension. It may be called a severance pay, but in effect it amounts to approximately $6,067 per year given to a member to purchase an RRSP. This is well within the tax limits of the Income Tax Act and is fairly common in private industry.

If my colleagues and I had not opted out of the MP pension plan there would have been no changes in 1994 which resulted in a 20% decrease in contributions. If we do not establish this beachhead for an alternative, then there will be no goal posts established so that we can encourage those in the old plan to feel comfortable with an eventual RRSP alternative.

Let me compare this alternative plan to a similar plan recently designed for members of the legislature in British Columbia. In the plan which is before us today is a deferred payment amount approximately equal to $6,067 per year, which is the employer's share of an RRSP in effect, which our members would have to purchase. I provided a calculation in my notes, but I will not go through it here.

Some of this could be taxable to members of this House. The employee, or the member in this case, would match this if they wanted the maximum allowable limit in an RRSP. So we would have an employer's portion and an employee's portion.

This may be called a severance, but it is clearly the alternative pension plan we have insisted upon since 1989.

I congratulate my colleagues in obtaining what they were looking for in the first place. I also congratulate them for having the stamina to stay with it.

All of this is within the Income Tax Act.

Let us look for a moment at what B.C. MLAs receive. The B.C. MLAs adopted a citizens panel report in 1997. That report eliminated the gold plated legislative pension plan for MLAs. The employer, the B.C. government, matches 9% of the MLA's salary, which equates to approximately $7,300 per annum. This is based on a salary of $69,900. That is approximately $1,000 per year more than the alternative plan in Bill C-47.

Is it any wonder why we are committed to retroactively changing the MP pension plan when we become government? I do not think so. In the meantime, 38 Reform MPs have a difficult option.

When all is considered, this bill will likely pass because we 59 members in opposition cannot carry the day. We hope this alternative pension plan will encourage all members of this House to seriously look at eliminating such flawed legislation as the MP pension and rejuvenate the confidence of the Canadian people by providing a simple payment for RRSPs which will ultimately provide a monthly income upon retirement of approximately $500 after serving two terms versus $2,200 indexed.

That is all I have to say regarding the pension. I think I speak for my colleagues when I say that our commitment, our resolution to try to change the system does not stop here today, it continues.

I would like to talk a bit about Senate remuneration. The Blais commission report recommended changes to Senate salaries. The Reform Party will have no part whatsoever in accommodating the Senate until such time as that institution takes responsibility for itself through Senate elections.

I cannot understand why it is necessary for the House of Commons to initiate legislation that provides any remuneration to that organization when, in fact, that organization can initiate its own through a Senate bill.

If the Senate were operating properly and Canadians were convinced of its effectiveness, perhaps one way out of the difficulties politicians have in legislating increases for themselves would be to have the Senate review the House of Commons and the House of Commons to review the Senate. However, that is not to be and that is for another day.

Finally and overall, the 1998 pay pension benefits issue is still inequitable. It still lacks credibility with taxpayers and is not supported by Reform Party members.

If these undesirable changes are implemented by virtue of a majority vote, Reform MPs, like all of my colleagues who would vote against this, must accept the consequences.

I think it is reprehensible, quite frankly, that MPs in the first place must vote on increases for themselves. A better process must be put in place.

We came to Ottawa. We opted out of the gold plated pension plan. Most of the 1993 Reform MPs, by the way, have donated 10% of their salaries at one time or another. I only have to look to my left to my colleague from Edmonton North to say that we all understand the difficulties some have had.

Have we been successful? I do not know. Things have not changed yet, but we are still trying to develop alternative pension plans, trying to make do, trying to get the system changed.

I think one day my colleagues will look at this pension plan and say “Yes, there are other ways of doing it”. Until then we will work toward something better.

Finally, I want to address one other issue that has come up recently. Some have asked why there is no standing vote in this House. From my perspective, Canadians will have the Reform Party's position from exactly what I said here today.

Votes on division are commonplace in this institution. The billions of dollars passed on division on Tuesday night are but one example of how that system works. It is not perfect and perhaps it needs change. But then again, I am not government.

The very important point is that our position is on the record for all to see. I thank those who have listened and those who will understand what these dedicated people behind me have tried to do over the years.

[Suzanne Tremblay, Bloc, Rimouski—Mitis, QC]

Mr. Speaker, I am pleased to address Bill C-47 and to explain the Bloc Quebecois' position on this legislation.

My comments will deal with five issues related to the bill, which, as pointed out in the summary, primarily seeks to increase the salaries and allowances payable to parliamentarians, to permit members of the House of Commons to be again subject to the Members of Parliament Retiring Allowances Act, and to provide for the payment of a supplementary severance allowance to members of the House of Commons to whom the Members of Parliament Retiring Allowances Act does not apply.

The Bloc Quebecois is opposed to this bill. First, we oppose the 2% salary increase. Let me be clear. The Bloc feels that the increase is justified. There is no doubt in our minds that members of Parliament deserve this 2% raise. Considering the quality of their work, not to mention the number of hours worked, we are absolutely convinced that the increase can be justified.

There is also no doubt in our minds that this raise would help attract quality candidates to this place. Therefore, why do we oppose this 2% increase? There are three basic reasons.

First of all, we were aware of the pay situation before we came here. We knew what the salary was, what the allowances were, what expenditures would be reimbursed, and so on.

We accepted those conditions because we were coming here in a very specific context. We knew we were not here for very long. Thus we do not feel all that much concerned about changes to the working conditions of MPs because, as you know, we hope to no longer be MPs because we will have our sovereign Quebec. We do, however, plan to be here for as long as the people of Quebec wants us to be here defending them, and as long as sovereignty has not been achieved.

The main thing that forces us to refuse and oppose the 2% pay increase, however, is the situation in Quebec. Quebec is experiencing a great many budget cuts at this time. There are many restrictions of all kinds, and the premier of Quebec has called upon everyone to make sacrifices in order to attain zero deficit. He has even asked government employees to accept a 6% salary cut. We therefore feel that we must show solidarity with the people of Quebec and we cannot support this call for a salary increase.

As for the severance allowance, that is an amendment that slipped past us during the 35th parliament. The bill will correct this.

Thanks to the reforms made to the MPs pension plan in the last parliament, we have in a way created a new category of member, those who would be eligible for pension when no longer MPs, who have six or more years of service, but the bill we passed in 1994 calls for them not to collect pensions until age 55. That was an important change made to the act in 1994.

As all of us are aware, moreover, MPs are not entitled to employment insurance. Let us consider the example of a former MP, a 40 year-old father of three, who is eligible for pension at age 55. He has no other job. So he will receive a six months' severance package. I think it is perfectly legitimate, in most cases, for employers to agree with their employees who are leaving their jobs and give them conditions like this one, that is, severance pay to enable the member to find another job and to try to earn a living, since he still has a number of good years ahead of him.

A major change in this bill is the right to rejoin the pension fund. Of course we agree that our colleagues may do so. The surprising part is that anyone was allowed to leave it at all.

As I have seen throughout my career, whenever a pension is provided for a group of workers, no one can join or leave the pension fund whenever it suits them.

We came here. We knew the conditions. We knew there was a group pension fund. I think the first mistake we made was to allow people to leave the pension plan. That was a mistake, in my opinion.

It is usual for everyone to have the same pension plan and for all MPs to be on the same footing in terms of the plan. I consider that basic justice.

Since in the future it will no longer be possible to leave the plan, we are making an excellent decision today in order to avoid having undue political pressure force people to leave the pension fund.

The bill provides a special severance allowance for those not contributing to the pension plan and not taking advantage of the 90 days they have to decide whether or not to rejoin the pension plan.

Once again, in this country we are very democratic. We do not force our colleagues who opted out of the pension fund in 1994 to opt back in; we give them 90 days to think about it.

Those who decide not to contribute to our pension plan—but it is very clear that this will be their last chance—will receive, at age 55, an amount more or less equivalent to the portion of the premium paid by the government to the MPs' pension fund.

As everyone knows, members pay half and the government pays the other half. The portion not paid by the government, if the member is not contributing to the pension fund, will be paid to him or her as a premium at age 55. There are provisions for death or other exceptions, of course but, in principle, payment is made when the member turns 55. What will be the amount of this premium? It will be the equivalent of one month's salary for every year worked, up to a maximum of 12 years.

The fifth point I wish to make, and the second reason for our opposition to this bill, involves the Senate. This bill also contains provisions applying to the Senate. The Bloc Quebecois' opposition to the part of the bill dealing with the Senate is not intended in any way as a comment on the nature or the quality of the work done by those who sit in the Senate.

Our opposition is based not on this but on the logic peculiar to our political party. We do not want a Senate. We want to see it abolished. It would therefore be difficult to endorse any measure that would improve working conditions for a group of individuals that one sees no need for. Once again, this is not a judgment of the work they do in the other chamber.

That sums up briefly what we think are the main features of interest in the bill, as well as the two reasons we will be voting against it, those being the 2% salary increase and the provisions for the other chamber.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I will begin by saying that I do not think there is ever a good time or comfortable time in which to deal with the kind of legislation we are dealing with this afternoon.

I have had the opportunity to be here for a number of years and I have seen these kinds of issues dealt with before. I know some of the pitfalls that present themselves to members of parliament on the occasion of this kind of legislation.

Surely it is an opportunity for us to be overly critical of each other. It is an opportunity for the public to be overly critical of us. It is an opportunity for various forms of temptation, various forms of self-righteousness and grandstanding of one kind or another.

We all need to resist the temptation for the sake of parliament, for the sake of our relationships with each other and for the sake of not bringing into disrepute the reputation of this place or of members of parliament.

It is also an opportunity for people to misrepresent, sometimes deliberately and sometimes unintentionally, what is going on when we come to these kinds of deliberations.

Some of my colleagues in the Reform Party have experienced that over the last while. As we have come to this point in time many unfair things have been said about them and many things have been alleged about them in the media. I say welcome to the club. I have had all kinds of things alleged about me over the years with respect to this issue that have been very unfair, as have members of parliament in general.

I can only think of the way in which it is often said that members of parliament after only six years are entitled to a full pension. Not so. After six years we are only entitled to six-fifteenths times 75% of the average of the best five years. I agree that is a pension, but oftentimes if we look in the media we get the impression that members get a full pension when they leave after six years. I do not know how many times I have had to correct that perception about the MP pension plan.

Another perception is the tendency on the part of those who are critical of the plan to add up everything a member would receive from now, at whatever particular age, to age 75 and give the impression that somehow an MP would receive this in the form of one lump sum or one cheque upon leaving the House of Commons instead of annual instalments of about $48,000 in the case of a full pension to age 75 and beyond if the member lives beyond 75.

Sometimes there is a great deal of manipulation of facts to create an impression that is much more negative than the actual facts demand. If people want to be critics of the current pension, I would submit that there are things to be said about it which are true. I am only objecting to the things that are said about it which are untrue.

Some of my colleagues have had the experience of seeing how easily this sort of thing is picked up and run with on the part of people whose only agenda, it seems, is to make members of parliament or politicians look bad.

There is no good time to do this. On the other hand, given the way the system works now, there is no other way to do it except for members of parliament to deal with it themselves.

That brings me to the question of process. The NDP has advocated in the House for years and years that this process be taken out of the hands of members of parliament. The Reform Party House leader said this in his speech. I want him to know that we have been saying this for a long time. We agree but it has not been done.

Until it is done we will be in the dilemma in which we find ourselves today. Either nothing will be done or we will do things that need to be done. Some of us will agree with some of it and others will disagree with some of it, but all of us will feel a bit uncomfortable. I think we should be lifted out of this situation.

It is not enough to have statutory reviews of MPs pay and benefits after every election. That is not an independent review. I am not saying the members who were appointed were not independent minded, but it is within the political class that it is done.

Former members of parliament are appointed to review the pay of members of parliament. I do not think that goes far enough in terms of establishing both independence and some form of binding recommendations that could come forward from the independent commission that would be set up if the NDP were to have its way.

Why? We can set up all the independent commissions we like, but if in the end members of parliament have to decide to implement or not to implement the independently arrived at recommendations we are right back to where we started from.

What has often happened in the past when people have looked at MPs' pay and benefits is that they come back with a recommendation that we be paid a heck of a lot more than we are being paid. Then members of parliament have to say, because of the sensitivity of the matter, we cannot accept that recommendation and we are right back to where we started from.

If we are to have some kind of independent review and recommendation we need to have what goes with it, a mechanism for automatic legislation or implementation of those recommendations without it having to come to the floor of the House of Commons and without our being put in the position that we are in today and every other day that we have to deal with this kind of legislation. That has been the longstanding recommendation of the New Democratic Party.

With respect to the details of what we have before us, we are not one of those parties which has members who have opted out of the pension plan. Therefore we have no self-interest either individually or collectively in either the opting in provision or in the supplementary severance. We support this because we see it as an opportunity to address the situation that some of the members who have opted out of the plan find themselves in, a situation which they can either address through accessing the supplementary severance or, if they so choose, opting back into the plan. That is up to individual members and we leave it at that. It did not affect any of our members in any way whatsoever.

The opposition House leader kept referring to the three parties that had opted out of the plan. I do not think that is quite an accurate way to describe it. No parties opted out of the plan. Every party in the House has people in the plan and three parties in the House have individual members outside the plan. The Reform Party has more than any other party. The Liberals and the Bloc have a few. It is not really a question of parties; it is a question of individuals in parties.

I would like to indicate what we are not saying when we indicate our concern about the raise. I would be moved to defend the raise against certain kinds of criticisms. I have been here before when I once opposed a raise. I found myself eventually defending it because I was offended by the kinds of criticisms offered about parliament, about members of parliament and about my colleagues who had supported the raise.

I found myself at that time ending up defending the raise because of the unreasonable and vicious kinds of things that were said about members of parliament who decided they needed a raise after a long period of time in which there had been none, the situation we find ourselves in today.

I want to make clear that our concern about the raise had more to do with timing than with substance. We felt, and I think this was reflected to some degree in the Blais report, that if we were to get a raise of 2% we would have preferred that it happen after everyone else in the public sector had received a raise in that range.

That is not an option that is before us today. We have before us the option of dealing with the legislation today. We do not choose when these things will be dealt with. However that was one of the concerns we had and we do have a reasonable hope that others in the public sector, as the government House leader said, will get a raise in that range.

In any event, these are some of the things I wanted to put on the record. We think it should be dealt with in an independent and binding way.

We regret that is somehow not able to happen, but it is certainly something that we will continue to work for in this parliament and in subsequent parliaments.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Mr. Speaker, I am pleased to take part in this debate and pleased as well to gain further insight from the hon. member for Winnipeg—Transcona.

Hon. members such as he who have been in this place a long time have different perspectives on this issue from a new member of parliament. That is the case with many of the members in the Progressive Conservative Party. We are here for the first time, a year as of June 2.

I think there is some important insight to be gained from members such as he who have indicated yes on the 2% raise in terms of merit, in terms of whether it is deserved. The hon. member has said he would defend that position. I would agree with that and the Progressive Conservative Party takes that stance.

However, it is an issue of timing. With respect to that, the Progressive Conservative Party has taken the stance that given the sustained high level of unemployment in this country, given the average salary of the average Canadian, we do not feel this is the time to implement such a raise.

With respect to the other element of Bill C-47, the element that would pertain mainly to the official opposition, the Reform Party, once again when one looks at merit those members should be treated no different from any other member of Parliament. In essence we feel they should be welcome back into the pension plan in whatever form they choose, whether the severance type of arrangement or the regular pension plan.

However, it is important that sanctimony be left at the door and that it should also be left out of the press releases. We all need to be a little prudent as to what we say not only here on the floor but at home in our constituencies. When I return to Pictou—Antigonish—Guysborough I am sure I am going to receive questions about this. Every individual member is going to be forced to have a gut check. They are going to be forced to check their conscience and decide what they choose to do if this raise is passed through the House today.

When one looks at the bigger picture as to what MPs receive in terms of remuneration and the work done here, one has to take a wider view and see what salaries are paid in other professions, doctors, lawyers, professional athletes, professional entertainers and heads of corporations. One has to make a comparison in those areas when looking at this increase. I am sure there is going to be a great deal of scrutiny about it in the coming days.

There is certainly an element of sensitivity about Bill C-47, but the discussion that has taken place here today and the opportunity that members and parties have had to put their perspective forward is an important one.

Once again I indicate that we are not supporting the legislation because we cannot pick and choose elements of the bill we want to see implemented and what elements we do not want to see implemented. We find ourselves in the position of not supporting it wholeheartedly.

The political angling and the reality of what is going to occur is important. I hope a lesson was learned in all this. A lesson in process may have been absorbed. There has been a great deal of criticism about a perceived gold plated pension by the Reform Party and a great deal of political hay was made out of that characterization over the years. Reformers now find themselves in the official opposition status. They have moved forward in their political aspirations.

I could not help but notice in the remarks of the House leader of the Reform Party the reference to when they achieve government. Pipe dream is the word that comes to mind. If the Leader of the Opposition chooses to take clothing allowances, housing allowances like Stornoway, a car allowance, all those things, while in opposition, one can only shudder to think what would happen if he were ever to achieve his aspirations of the prime minister's office.

I am not going to engage in partisan remarks but that is on the record observation. Bill C-47 has been brought to the floor and I guess the timing is suspect with but a day remaining. It was a government priority to bring this bill forward and that has to be questioned in terms of why we would bring this to the House of Commons on the day before it closes.

We choose not to support the legislation and yet we are going to be subject to criticism too because there is no opting out provision. The hypocrisy is there for all to see. We can choose not to support it yet we will be the beneficiaries of it. Those will be the glaring remarks in the editorials.

There is no option. It is a piece of legislation that allows us no option but to take the raise. There should not be different levels of members of parliament, those who are receiving a certain set pay compared to what other members of parliament receive.

There has also been reference made to what individuals may choose to do with that 2% increase accrued over the life of this parliament. I do not think here in the House of Commons or in the media is the place to talk about what individual members choose to do with it, whether they choose to put a percentage of their salary into a certain charity or name those charities. That is an individual choice every member is going to be forced to make.

The opportunity is there for Canadians to judge for themselves as they will and to choose how to react to this and ultimately come the general election they will choose to make this a large issue or a small issue. In the grand scheme of things, it is not a major issue for most Canadians. More important issues will come to the floor, one would hope, on the national agenda and then we can earn our pay, so to speak. Canadians can then judge for themselves what members have earned their pay. Those results will no doubt be seen at the time of the next general election.

The timing of this is suspect and it also comes in very close proximity to Bill C-37 which would also raise the salaries of judges. I am sure there is an inevitable comparison that will be made again between the decision of this government to bring forward those types of legislative initiatives so close to the end of this parliament.

On behalf of the Conservative Party all I can say is that we did not ask for it and we did not anticipate it. The members of this party did not run with the expectation that we would be receiving an increased salary. We also did not feel it was a priority at this time.

[The Deputy Speaker]

It being 4.11 p.m., pursuant to order made on Wednesday, June 10, 1998, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the second reading stage of the bill now before the House.

Pursuant to order made Wednesday, June 10, 1998 the motion is deemed carried on division. Accordingly, this bill stands referred to committee of the whole.

(Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Milliken in the chair)

[The Chairman]

Order, please. House in committee of the whole on Bill C-47, an act to amend the Parliament of Canada Act, the Members of Parliament Retiring Allowances Act and the Salaries Act.

(Clauses 1 to 5 agreed to)

(On clause 6)

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, clause 6, section 9, refers to the interest which would be payable or will accrue on the amount of the supplementary severance allowance from the time a person becomes entitled to it until the time it is paid.

I would ask the minister to clarify what interest rate would be accruing on that entitlement.

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, initially the clause in question was drafted somewhat differently. It was not clear as to whether there was a provision for interest should a person for instance who has opted of the pension system leave at age 51. The person would then draw the amount not at 51 but at 55, the same as a member of parliament who is contributing to the pension system would unless the person is grandfathered into the former system and receive benefits at age 55. Both systems are parallel.

The difference is the following. A person who receives a pension obviously receives it for some time, unless of course they pass on before they start receiving the benefits. In receiving the benefits there are adjustment periodically. Arguably that is a form of interest.

In the case of someone who receives the benefit of the supplementary severance it was silent in the bill. For greater certainty the words that are there were added and the reference is “shall accrue on the amount of the supplementary severance allowance from the time the person becomes entitled to it”, in other words the day the person ceases to be an MP, “to the time it is paid”.

How does one establish the rate? I am told that this is the normal form, what is referred to as the crown rate. It is the same rate applied if someone has money otherwise owing to him or her from the crown. For example, it could be an income tax reimbursement that is overdue or some other similar benefit. It is not a higher rate of interest, it is almost a nominal one, but one which exists in law at the present time and recognized in the form in which it is in the bill.

[Ted White, Reform, North Vancouver, BC]

Mr. Chairman, I wonder if the minister could enlighten the House as to what the present crown rate would be. Is he aware of that figure at the moment?

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Chairman, the rate is adjusted periodically, but the crown rate I am told, as of very recently, possibly even the one which applies today, is 5%. It is the same rate payable by government for other deferred payments. So whatever the rate is for a deferred payment, as I indicated earlier, it would be the same. At the present time it is in the area of 5%.

[Jim Hart, Reform, Okanagan—Coquihalla, BC]

Mr. Chairman, I am wondering if the minister could talk a bit more about the severance allowance.

There are 301 members of the House and it appears that the remuneration of many members is different. It is not a level playing field. It is unequal. Having the severance allowance, or a golden handshake, makes the situation even worse because different members of the House of Commons would receive different compensation.

I would ask the minister when he anticipates the government will equalize all remuneration for every member of the House.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Chairman, when we discuss this whole area of a level playing field, it is rather interesting for members of parliament because our functions are different.

It depends on the area of the country in which we pay income tax, for instance, or other kinds of charges on our salaries. There could be at least 12 different kinds across the country. Each one of us generally pays taxes in the province in which we live. I think very few members choose to pay income taxes in Ontario if they are not from Ontario, although they could, I suppose, if they had two residences, one here and one in their riding.

The point I am making is that there is an uneven playing field at the best of times.

I am told that when the committee was studying the report that was one of the problems involved in the so-called gross up of the income of members of parliament. The Blais commission had arrived at a formula that worked something like this. It assumed a rate of gross up to arrive at the same net benefit as people living in Ontario with two or three dependants and so on.

Of course, if a member lives in a province which has a higher tax rate than Ontario, for example, B.C., Newfoundland or Quebec, they would have to gross up the salary a larger amount to arrive at the same net benefit.

Furthermore, to illustrate a few complications in that regard, some members of parliament already make a different salary than others. Some of us in this Chamber represent very large rural ridings. I think there are 10 or 12 members in that category in the Northwest Territories and I believe there is one in British Columbia. I see my colleague across the way nodding. He is one of them. Those members already make a larger salary. If one was to calculate a grossing up amount, that person would automatically end up with less salary if the law of averages was used.

That brought the following proposition to the minds of many. We would have had a gross up which, at least in appearance, would have been a salary increase, with many members of parliament going home with a substantial decrease in income.

I am told that was one of the reasons the committee that looked into this issue decided that was not a particularly wise way of doing it and abandoned that plan.

As I said previously, we still have a number of people with different incomes. Right now, for instance, I believe that I pay something like $10,000 a year in premiums for the MP pension plan. There are those out there who write articles and publications and so on, who insinuate, by their silence and sometimes otherwise, that this pension is free. But my income is $10,000 a year less than some other members of this House because I opted into the plan. Naturally, the benefit comes later because I get a pension. The reverse is also true.

Those are the various salaries that exist now. To say that we have a condition whereby there will be various levels of income, yes that is true. It is going to be true with several different kinds of retirement plans. But that is true at the moment, even before the passage of this bill.

[Jim Hart, Reform, Okanagan—Coquihalla, BC]

Mr. Chairman, we are almost there, but not quite. We talked about tax rates in different provinces. However, I am specifically referring to clause 6, the severance allowance which is being offered. I am talking about the equality offered there in comparison to the MP pension plan currently in place.

If my memory serves me correctly, regardless of whether a person works for Eaton's or the Bay, in Nova Scotia, in Calgary or wherever in this country, they participate in the same pension plan. It is an actuarial requirement. It is actuarially required that every employee participate in the same plan. But in the House of Commons there is this inequality that we have designed for ourselves, where we have different members paying different amounts and receiving different benefits. It is a very small plan. There are only 301 members.

I would like to put it to the minister again. To make it an actuarially sound plan, would it not be better to bring in a plan by which all members of parliament would receive a pension plan that is comparable to the private sector? At the same time as being comparable, it would level the playing field for all members of the House of Commons so that we would not have the situation where we have 301 members and probably five or six different categories of pension benefits available to us.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Chairman, if anyone thinks that we could have a pension plan which would be the same for every MP under any kind of scheme, that is unachievable.

By definition, the tenure here is different for everybody. We are obviously subject to the democratic rule. Some members are elected at 45 and finish at 55. We have a colleague in this Chamber who was elected for his first term at the age of 69 and is now in his second term. We had a colleague who resigned in 1993 when he was 82. We have a colleague in this House right now who was elected at age 22 or 23.

There is a whole variety of these things at any time. This is not a conventional employer, nor are we conventional employees. That is the difference.

Comparable to the private sector is an interesting thought. What about executives in the private sector?

Some have referred to the present plan for members of parliament as being generous and gold plated. However, I do not believe it is.

I read from page 139 of the Blais commission report which states:

The pension plan for Members of Parliament, while appearing to be generous, is not necessarily out of line with public and private sector plans that recognize the impact of mid-career hire aspects of the career path of their senior employees.

That is from the Blais commission report.

The other thing about the plan is that the Chief Actuary of Canada, in and around 1990 when there was controversy about the plan, published a report in which he talked about assuming an equal employer-employee contribution. That does not exist in any public sector plan because we do not vest the money in a particular fund. We do now for the new contributions to CPP that this government brought forward, but that is a new beginning in that regard. Other plans are not like that.

Some would argue that the superannuation plan has a second component which has that feature. But generally it does not. There is an unfunded liability because the premiums are not invested in various schemes that generate interest dividends and other forms of income. That is true of public sector plans.

In 1990 I believe it was, the chief actuary said that he believed this plan was just as solvable as one in the private sector.

Should everyone be in the plan? Yes. That is my position. When people opted out of the plan two years ago, I remember making passionate speeches in this House to my opponents telling them they should stay in. That is what I said at the time and I have not changed my mind.

If anyone thinks today that I will accuse them of being hypocritical if they decide to opt into the pension plan, no, I will not. I refuse to participate in that dialogue. I have to be consistent with what I said.

If I said four years ago that it was wrong to opt out of the pension plan, surely I have to say now that it is right to opt in. Otherwise it would not be very logical and I would be quickly reminded of that not only by people opposite in this House, but also by the media and by the public generally.

I do not think it is wrong. I think it is right. I said so before and I stand by what I said. I am the first to say that what is offered to MPs overall, as the Blais commission report recognized, is not onerous.

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

Mr. Chairman, dealing with clause 6 of Bill C-47, I was wondering about subclause (6) which deals with the eligibility for this new supplementary severance allowance.

My understanding is that under the existing Members of Parliament Retiring Allowances Act when an MP reaches the age of 55 they qualify for the MP pension. In fact, there is a phase-in period of one year, from 54 to 55, built into the act. When they qualify for the MP pension, they no longer qualify for the standard six-month severance that all members of parliament qualify for, regardless of whether they are in or out of the pension plan.

I wonder if the hon. minister could clarify for us, under clause 6, whether those MPs who are not in the MP pension plan who reach age 55 will qualify for the six-month standard severance, plus the additional supplementary severance allowance at the time they retire, or when they are not re-elected, if they are 55 or over.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Chairman, here we are getting into an area that is a little complicated. For MPs who are in the plan, we had a difficulty. I am talking about the MPs who are in the plan, not the ones who were grandfathered. An MP who is in the plan qualifies for a pension at age 55. Say that MP was defeated at age 52. Because the MP had six years of service, they would be pensionable. Therefore, they would no longer qualify for the severance. But, of course, the MP did not get a pension because he or she was not 55, so they ended up getting neither.

This is as a result of the change that we made in the pension plan some four years ago to place the threshold at age 55. At that time a companion change should have been made to the severance.

What there will be now is a phase-out to ensure that someone does not resign at age 54 years, 11 months and 29 days in order to collect both. There would be a phase-out for people in the pension plan.

If an MP ceases to be an MP and is out of the plan—and I understand there are some 48 at the present time—the MP in question would receive, if the person is less than 55, six months severance and, at age 55, the supplementary severance plus the interest at the crown rate that I described a moment ago in answer to a question from the member for Vancouver North.

I believe that answers that scenario. I do not know if there are any other scenarios possible. I guess there is always the one of the MP, like myself, who is in the plan and has contributions at both the old system, the grandfathered one, and the new one. Because I would be collecting a pension right now, of course I would not get a severance at all.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Chairman, I have a comment and then a question. In terms of some of the concerns that have been raised by my colleagues that there is a sort of multilayered pension, I would say that in part this is due to the fact that a minority of members of parliament asked that there be different provisions. Those requests were respected by the Prime Minister in 1994. Subsequently when other changes were made it was necessary to respect that certain other members had been in the old plan for so long that it would have been quite unfair to try to fit them in to the new conditions.

That is not unusual even in the private sector. Looking at a lot of major companies that have existed for a long time, there are employees who belong to one plan and employees who belong to another arrangement of the same plan because they began much later than those other employees. From my own experience, my own family in the CNR, there was the 1958 plan and then there was a plan that existed before 1958 and I think some changes came after that.

I think if the record is searched there would be other examples in the private sector where this is done, not because people have some kind of urge for complexity, but just because as changes happen, the welfare of those who have already invested a certain period of time in the existing plan has to be respected, otherwise they would be treated quite unfairly.

My question for the government House leader has to do not so much with this legislation but with other amendments to the MPs pension act that have been sought in the past by my colleague from Burnaby—Douglas. Could the government House leader tell me if it is the government's intention, obviously not today and not in the context of this legislation but at some other point, to bring in legislation that would respect the decision taken in the Rosenberg case and amend the MPs pension allowances act to provide for benefits to same sex spouses? Is it the intention of the government to do that at some point or not?

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Chairman, there has been at least this one court decision, the Rosenberg case that has been referred to. At the moment I am sorry that I do not know whether or not it is the intention of the government to appeal this case. I do not have knowledge of that at the present time.

Perhaps I should limit my comments to say that certainly it is my feeling that any rules that apply eventually in the case of civil servants generally in regard to survivors benefits should be at least in principle similar when applied to members of parliament. I believe for instance the rules we use now for spouse and so on for the members of parliament plan is identical or a mirror image of the ones utilized in the public service. Thinking of it rationally, if there are changes in the future, my belief is that they should respect the fact that whatever rules apply in regard to survivors benefits in the public service generally should equally apply to this particular plan.

[Randy White, Reform, Langley—Abbotsford, BC]

Mr. Chairman, I want to confirm an issue that my colleague brought up here on the severance. If an individual who is 60 years old had opted out of the plan originally, he would receive six months severance plus one additional month's severance for each year of service. I would like that confirmed.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Chairman, that is precisely it. If the MP in question had 12 years or more of service, the individual would in fact receive 18 months of severance. The supplementary severance, to repeat what I said, is identical as far as I know to the one in the Ontario legislature that is in existence for its members who have opted out of the pension plan. That is basically where the idea came from. I reason it to be very similar.