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.