House of Commons Hansard #213 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was plan.

Topics

Public Sector Pension Investment Board ActGovernment Orders

4:20 p.m.

Bloc

Francine Lalonde Bloc Mercier, QC

Madam Speaker, actually, I believe we do not know what this money is going to be used for. What we know, though, is that it will not be used to improve the lot of present and future public service pensioners, even though the surplus is the result of their work.

We are seeing fights of this kind in the private sector. Private sector workers are extremely concerned by what is happening in the federal government. There is a close relationship between this federal policy and the policy non-unionized companies or companies where the unions are not strong enough will keep on following. I am talking about the private sector of course.

This is what concerns me because we know that people who had well paid jobs will have a relatively comfortable pension. But there are a lot of workers who are close to retirement and who will not have a very high income.

In the private sector, it is even worse. Workers who have worked all their lives will have a very meagre income, which makes no sense when we know all the efforts they made.

The government's action cannot be disassociated from a signal given to managers of pension funds in the private sector.

Public Sector Pension Investment Board ActGovernment Orders

4:20 p.m.

Bloc

Maurice Dumas Bloc Argenteuil—Papineau, QC

Madam Speaker, I was listening to the hon. member for Mercier speaking of older workers in the private sector. This is, of course, not completely on topic, but since the hon. minister is with us in the House, I would like to point out that there used to be a fine program that provided assistance to the older workers, one that no longer exists.

Does my colleague believe that the minister will some day do something to help older workers, whether this is POWA or something else?

Public Sector Pension Investment Board ActGovernment Orders

4:25 p.m.

Bloc

Francine Lalonde Bloc Mercier, QC

Madam Speaker, the older workers' situation is often a dramatic one.

When people have a decent pension, they may still have problems, but what happens when the pension is a pittance, or nothing at all, when a person has not reached retirement age, and can no longer work? This is what happens to women over the age of 50.

We have all gone door to door campaigning. How many times were we told “At my age, I can no longer find work”? There is also the plight of older workers who have been laid off.

Increasingly, people will no longer have had job permanency. They will have had short term work, little McJobs. The problem of older workers will be raised more and more, and will become acute.

At some point there will certainly be a wide gap between those who can draw fairly decent pensions and those who will find themselves in dramatically reduced circumstances.

I could end by referring to all those whose health has been affected by their work. From my work in occupational health and safety, I know that there is no compensation for having been worn down by work.

Public Sector Pension Investment Board ActGovernment Orders

4:25 p.m.

Liberal

Carolyn Parrish Liberal Mississauga Centre, ON

Madam Speaker, I am pleased to have the opportunity to speak today in support of Bill C-78, the Public Sector Pension Investment Board Act.

Pensions are a complicated business and this is a very complicated bill. Much of it is about putting the pension plan for federal employees, the public service, Canadian forces and the RCMP on a solid financial footing. We know how important pensions are to all Canadians, but we also know that how we provide pensions for these federal public sector employees has to be fair to all taxpayers.

Other people will be talking in more detail about the financial arrangements that are being proposed in the bill. I want to take some time today to talk about the Canada Post section of it and how the bill affects the corporation and its employees.

What the bill says is clear and fairly straightforward. By October 1, 2000 Canada Post Corporation will establish a pension plan for its employees that are now covered by the Public Service Superannuation Act, the PSSA.

The plan that Canada Post establishes has to meet the requirements of the Pension Benefits Standard Act and the Income Tax Act. Once the plan is established the PSSA will cease to cover Canada Post employees. On the day it is established the Canada Post plan has to provide the same benefits as the PSSA at the same cost to employees.

The funds now in the PSSA are there to provide the benefits that Canada Post employees have already earned and will be transferred to the new plan. I am told and I understand that the transfer of funds will be about $6 billion. The benefits for the past will be exactly what they would have been under the PSSA and they cannot be reduced in the future.

A year after the new plan is established on October 1, 2001 it will become subject to collective bargaining, except those parts of the plan that deal with the service and benefits coming from the PSSA.

There are some other features in the bill that are important to employees, opportunities to count past service and a life insurance plan that is a mirror of the one employees are leaving, and some that are important to the corporation such as the right to determine how any plan surplus will be used and the right to establish more than one plan. These are the main features.

Why is this all being done? For Canada Post this is a decision based on business because of a number of factors. First, like all other corporations under the PSSA the employer costs for the pension plan will increase. For a corporation with a commercial mandate, the bottom line impact has to be looked at very seriously.

Canada Post operates under the Canada Labour Code. Under the code all terms and conditions of employment are subject to collective bargaining. As long as it was under the PSSA, though, it could not bargain pensions which are a significant part of total compensation. There is a real opportunity here for Canada Post to assume total responsibility for all aspects of its operation and its management but, and this is very important, the legislation is good for employees too.

First, it promises the same level of pension benefits as they would have under the PSSA. The guarantees in the bill about the benefits employees have already earned are very strong. Second, it makes pensions bargainable.

Some people will wonder why Canada Post employees will be able to bargain pensions when public service employees cannot and why they should be able to affect the design and management of their pension plan when public servants under the PSSA cannot.

As the President of the Treasury Board outlined in his speech, a consultation process took place over a number of months last year. That process was intended to lead to a joint management structure for the PSSA so that employees could have shared in all the decisions around their pension plans. Those talks did not lead to a deal, but the government is still ready to talk to the unions about joint management.

For Canada Post and its employees, not being able to include pensions in bargaining is an unusual restriction for an organization that functions under the Canada Labour Code.

There may also be people who wonder why pensions are not subject to the labour code right away. Some people will say this is an exceptional treatment under the labour code, and they are right. However this is an exceptional case.

Some 50,000 employees are affected by the decision on the part of Canada Post to withdraw from the PSSA. These employees are located all across the country. The government is interested in the concerns of Canada Post and in helping the corporation to create a business environment where it can succeed.

It is also very interested in making sure employees can feel secure about their pensions. Employees can know by this legislation what their new pension will look like, what kind of benefits it will provide and how much it will cost. Employees need not have any uncertainty about these things. They are very strong guarantees.

The provisions of the bill affecting Canada Post Corporation and its employees do not look like a big part of the bill, some two or three pages, but they will help Canada Post move forward in its efforts to provide good service to all Canadians and will give it another piece of the framework for managing the people part of its business.

These same provisions give employees guarantees about pensions, a very important part of compensation, and give them the opportunity to influence how their pensions will evolve in the future.

Speaking from my very limited experience when I negotiated contracts as chairman of the Peel board back in another life in another time, the actual salary compensation was oftentimes less important than everything else negotiated in the contract. I found that people, particularly as the population of Canada is aging, were very concerned about their pensions and their pension rights. They wanted to have a say in how the money was being distributed and how it would affect their pensions.

I wholeheartedly agree with this legislation. It is giving power to the people and responsibility to the government.

Public Sector Pension Investment Board ActGovernment Orders

4:30 p.m.

The Acting Speaker (Ms. Thibeault)

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Lévis-et-Chutes-de-la-Chaudière, Shipbuilding.

Public Sector Pension Investment Board ActGovernment Orders

4:30 p.m.

Reform

Gurmant Grewal Reform Surrey Central, BC

Madam Speaker, we have noticed that the Liberal government has been slowly liquidating the surplus over the last few years.

When we talk about Bill C-78, we are talking about the government's intentions to take over or raid the surplus of this fund, which is about $31 billion. That is how it has been able to balance the budget.

The last time we debated this issue in the House was when the government tried to put its hands on the surplus in employment insurance. It has not been balancing the budget by cutting spending or eliminating waste. Year after year taxes are increasing to balance the budget, and now the Liberal government is trying to put its hands on various surpluses in various departments.

Why does the government think it has to put its hands on surpluses which belong to corporations or the public? Why is the government trying to put its hands in the cookie jar?

Public Sector Pension Investment Board ActGovernment Orders

4:35 p.m.

Liberal

Carolyn Parrish Liberal Mississauga Centre, ON

Madam Speaker, I think this is a very fundamental issue when we refer to the EI plan and the pension plan.

One of the things all members of the opposition seem to forget is that during bad times the Government of Canada and Canadian taxpayers built up all the deficits in both the EI fund and the pension plan funds. The government is at the point where it has invested the money wisely and the surpluses being generated now are in fact the property of the Canadian taxpayer.

We are here to invest the money appropriately and to do what we can to keep this country healthy and a good global competitor. We cannot do that with deficits. We cannot do that by artificially pouring money into areas where it does not belong.

I have no problem with the member's question except to the point where the opposition always seem to start its questioning when we hit a surplus. It never goes back in history to when the government was topping up the deficits.

Public Sector Pension Investment Board ActGovernment Orders

4:35 p.m.

Progressive Conservative

Gilles Bernier Progressive Conservative Tobique—Mactaquac, NB

Madam Speaker, I have great respect for the hon. member. In her speech she was talking about the pensions of Canada Post employees.

Why should we be tampering with their pensions? In October and November 1997 we were in a contract dispute with Canada Post and the Liberal government legislated its employees back to work. It has been almost two years since the employees were legislated back to work and there is still no settlement in sight. I would like the hon. member to comment on that.

Public Sector Pension Investment Board ActGovernment Orders

4:35 p.m.

Liberal

Carolyn Parrish Liberal Mississauga Centre, ON

Madam Speaker, I do not want to comment on contract disputes with Canada Post. We are here to deal with the pension plan.

The remarks I made today very definitely indicate that the bargaining unit for Canada Post will be discussing pensions and upgrading pensions. In the bargaining situation that will come up in the year 2001 those pensions will be looked at and readjusted according to the membership and according to the government.

I believe this is empowering the unions to have a say in how they would like their pensions upgraded or altered as part of the bargaining unit. I believe it is a very fair proposal, particularly for Canada Post.

Public Sector Pension Investment Board ActGovernment Orders

4:35 p.m.

Reform

Gurmant Grewal Reform Surrey Central, BC

Madam Speaker, Bill C-78 proposes to establish an investment board. The proposed investment board will not include any provisions for the auditor general to take an indepth look at the books of the proposed investment board. Nor will the board fall under the provisions of the Access to Information Act.

To whom will the board be accountable? Who will ensure that the board will operate in a fair manner?

Public Sector Pension Investment Board ActGovernment Orders

4:35 p.m.

Liberal

Carolyn Parrish Liberal Mississauga Centre, ON

Madam Speaker, I will have to go back on my own limited experience at functioning on boards. Some boards have duly elected members from the public, such as the school board that I served on. Some have appointed members who are well respected members of the community.

Whenever a board is appointed its position has to remain neutral and fair. It has to listen to labour, to management, to the government and to the employees.

I have a lot more faith in publicly appointed boards than the member opposite seems to have. I think they are very limited. As a matter of fact I know of no boards that have been held up as gangs that are there to lean one way or the other. Publicly appointed boards serve publicly and have to account to the members they are serving.

Public Sector Pension Investment Board ActGovernment Orders

4:40 p.m.

Liberal

John Bryden Liberal Wentworth—Burlington, ON

Madam Speaker, I just wanted to make a comment on the member opposite's question of the parliamentary secretary.

I think the problem he is alluding to with respect to the transparency and accountability of this investment board is really a matter for the Access to Information Act. I think what we have to look at is not changing this legislation but making sure, when the time does come forward and when we have a chance to look at the Access to Information Act, it provides for accountability and certainly transparency for the type of arm's length board we have in this legislation.

Public Sector Pension Investment Board ActGovernment Orders

4:40 p.m.

Liberal

Carolyn Parrish Liberal Mississauga Centre, ON

Madam Speaker, I always agree with my hon. colleague from Hamilton. I will bow to his wisdom on this one and let his remarks stand.

Public Sector Pension Investment Board ActGovernment Orders

4:40 p.m.

Bloc

Antoine Dubé Bloc Lévis, QC

Madam Speaker, I would simply, in the spirit of my other questions, ask the parliamentary secretary if she is not bothered by the idea of taking pension funds belonging to those who contributed to it. Finally, what will the money the government is going to recover be used for?

Public Sector Pension Investment Board ActGovernment Orders

4:40 p.m.

Liberal

Carolyn Parrish Liberal Mississauga Centre, ON

Madam Speaker, again I would like to reiterate my position. Because the minister happens to be sitting here, I would like to draw in the EI plan as well as the pension plans. We must remember in the bad times the government paid and paid and topped it up and built up a deficit and a debt which the whole country paid for. When careful management has built these funds up, in the good times it is time these funds were paid back to all taxpayers of Canada.

As long as the pension payouts are fair we are not doing it at the expense of the recipients. We are doing it because it is the proper and appropriate thing to do at this time in the economy.

Public Sector Pension Investment Board ActGovernment Orders

4:40 p.m.

NDP

Louise Hardy NDP Yukon, YT

Madam Speaker, I feel it is very important to speak to this debate because it is such a change in public policy and a change that is done unilaterally, without the support of the unions involved, the public or other members of parliament.

As in most legislation Bill C-78 has much that is good and much that is bad. The bad far outweighs the good in this legislation which is part of a larger pattern of the government to take public money and transfer it into private hands. Once that happens the public good is not at the top of priorities to turn that money around and serve our communities through building roads, hospitals or schools.

I will deal with the good in the legislation first because, as I said, there is not that much of it. The good is that there is a dental plan for beneficiaries. Because we are thinking of people who are retired, this is a particularly important element. It is important to have and would be a very important change. The benefits will be calculated on the last five years rather than the last six, which would result in a slight increase.

It recognizes benefits for same sex couples. That section is a very dramatic change. It is long awaited and is indeed necessary.

It would increase the supplementary death benefit. Initially this was being negotiated, but unfortunately it broke down over what to do with the $30 billion surplus, over representation on the new investment board and joint management of the fund or some input from labour and plan members.

The government then decided to proceed with the legislation rather than continue to pursue a negotiated settlement. That is incredibly unfortunate because it means that it is not possible for the New Democrats to support the legislation.

There are two really important points. The investment board will be a 12 member board charged with the responsibility of investing funds on the open market. We are speaking about $30 billion, an unbelievable and incredible amount of money, that will be put on the open market. These members would be appointed by the minister through a nominating committee of other members who might be retirees.

We need to be concerned that appointments to the investment board might be for purely patronage reasons. Who benefits from these changes? It will not be the pensioners because their actual pensions will not increase. They will not get any more, but they will not get any less. The employees will be paying more.

We have to question the rationale of these changes when the very essence of a pension plan is to deduct money from the employees and save it for them so it will be there when they retire. However, they will not benefit from the changes in this legislation.

There is a benefit for those who will be investing it and for those who will be receiving it. The flipping of capital will cost millions in brokerage fees. Bay Street will enjoy a windfall when shares and stocks are bought and sold but the employees and the pensioners will not.

Labour has always argued that pension surpluses are the exclusive property of the employees and retired plan members and should be used for nothing other than their benefit. This is a key issue. It is paramount and must reinforced. As this surplus is all from deferred wages and part of the pay package, it should be returned to the employees.

The other change is that any surplus above $9 billion will trigger either the cessation of employer-employee contributions for a period of time, a premium holiday, or government could simply take the surplus and use it for whatever it wants without any consultation with the employees or pensioners. This means it could be a very important source of revenue for the government when in fact it is the property of the employees.

Currently there is no provision to increase benefits other than by an act of parliament. It is a defined benefit plan that has an obligation to pay each recipient a fixed amount regardless of the condition of the fund.

I heard over and over today that the government takes all the risk so it should be able to do whatever it wants with the money when there is a surplus. It feels that because it has to assume the risk of providing a defined benefit, even if the plan was in a deficit, it deserves to keep the surplus when the plan is healthy. This is convoluted logic that we cannot accept.

The pension is part of the wage package. Proof of this is that the government uses the fact that there is a pension plan to justify relatively low wages. Even though the pension is not negotiated at the bargaining table, both parties refer to it and acknowledge it.

Additional proof that employees own the pension moneys lies in the fact that in a company under federal jurisdiction, workers have to vote by a two-third majority to let the employer take out any of the surplus. This law recognizes the surplus is the property of the employees who must vote on whether to release it. Obviously that is not happening here.

The government is acting unilaterally. It does not even want to share in the decisions. No agreement has been reached with the union, nor does the government have any plans to include the union on a joint union-management board. Instead, the government intends to appoint directors to the board. These actions reinforce the misleading view of who bears the risks and rewards of pension plans.

Employers have typically justified their grab on pension surpluses on the grounds that they take the risks so they should get the rewards. However, pension plan management makes it more likely that surpluses will accrue, so there are very few risks.

If we are going to think of it in those terms, let us imagine an individual who has saved money throughout his or her life in preparation for retirement, and a bank says “I want that money to pay my debts. You have kept it in my bank all these years and I have had the risk of storing it. It is my money and I will use it however I want. You have no say in it”. What we are facing is our government telling us “What is yours is mine and what is mine is my own business, so you can just take a hike. We will do what we think is best ”. I have never seen democracy work like that. What we are facing is a raid or just plain piracy of a pension plan. That $30 billion is an incredible amount of money, and the decisions made about it belong with the people who pay into it and the pensioners who will be receiving it.

I listened to a debate earlier on the Liberal side where a member said that the New Democratic Party should not be agitating and getting the seniors and elders all upset over this.

I found this incredibly patronizing because the seniors and elders I know can certainly read, write, think and analyse, and they do lobby and vote. They have come here and lobbied. They have made decisions and have analysed that this is not a good way to deal with pensions. They are not even doing this for themselves because their pensions will not change. They will not get any more out of this. However, they have the wisdom and strength to know that these changes will have an effect on those who come after them. I always believed it was our job as members of parliament to be thinking of those who come after us, not of our own smaller interests but the greater interests of our country.

Another point that bothered me was when a Liberal member stood up and said that we had these crazy ideas about wanting to invest pension money in maybe ethical stocks or bonds, or that it should even be a consideration of what is done with the money.

I know a heck of a lot of people who do not want one cent of their money being invested in nuclear arms, in small arms, in factories where children are forced into labour and women are locked in for 14 to 16 hours a day to produce cheap goods, or in situations where the money they are saving for their retirement could be used to undermine their own jobs.

Consideration should be given to using the money saved in this country to build our own roads, hospitals, schools and universities and to do it at a good rate of return so that we can educate our children. Maybe we could help those in the far corners of the country who normally would not have any access to schools, roads or hospitals. That is a very good use of money and should always be a consideration when pooled money within a country is being distributed for whatever reason. We should be looking after our own people first.

The changes in the pension plan will disproportionately affect women. The average pension will be $9,600 per year which is not a lot to live on. However, women have borne the brunt of a lot of changes that have happened through the Liberal government. They have borne the cost of our health cuts and the sexual abuse in our military. The government has denied them pay equity and, in many cases, they are denied unemployment insurance premiums.

What is it for? It is not for the common good of our country. It is not for the betterment of living conditions anywhere. These changes are indeed changes that would please the corporate titans of the country to move money away from those who need it and put it into the hands of those who do not.

Even though there are good changes proposed in Bill C-78, the bad far outweigh anything that the legislation would bring forward. It is very disappointing not to be able to support pension plan changes just because they will not benefit those who need them most.

Public Sector Pension Investment Board ActGovernment Orders

4:50 p.m.

Liberal

John Bryden Liberal Wentworth—Burlington, ON

Mr. Speaker, I listened with great attention to the member's comments and I would like to make a couple of observations.

One of the key points she made was that the surplus, to use her own words, was the exclusive property of the employees who contributed to the pension plan. I have to give her my perspective on this because I come from a riding where there are very few unions. I do not think there are unions of any size in my riding. In my riding it is mostly small entrepreneurs, farmers, people who are self-employed. They will have contributed to this surplus.

As I understand it, the government has been paying 70% toward this pension plan and the employees 30%. When the government pays money to anything, it comes from taxpayers. Every person in my riding who has been paying taxes and who does not belong to a union has been contributing to that 70% that has been going to this pension plan. In other words, the people in my riding would feel that they do have a stake and as a matter of fact they might even claim ownership of the $30 billion of which we are speaking.

The member also said that the benefits in this whole $30 billion is part of the wage packet of the employees. I point out she also said that the payout of benefits is determined by an act of parliament. We have a situation where the benefits are already determined and we have a surplus that is exceeding by far the amount of benefits that can be obtained by the employees.

Finally, it would appear to me, using that logic, that indeed that $30 billion actually belongs to the ordinary citizens of Canada and not to the union, as long as the union is guaranteed that it does indeed receive the benefits that are part of the contract.

Public Sector Pension Investment Board ActGovernment Orders

4:55 p.m.

NDP

Louise Hardy NDP Yukon, YT

Mr. Speaker, those who are involved in private pensions get to have a say. Over three-quarters of them would have to vote to have a say on what that surplus is used for. The changes that are being made would not give the taxpayers that the hon. member mentioned any say in where the surplus is going. In fact, the federal government is using it however it pleases without the consent of either the taxpayers or the people paying directly into it.

Whatever the surplus may be or however or wherever it is invested should not be done just in terms of what the greatest return on that money would be. I think it is important that the money is spent first in Canada to benefit Canadians rather than outside the country in very risky endeavours. We have already seen what the market can do, what unregulated, totally catastrophic situations can arise with unbridled use of capital.

Public Sector Pension Investment Board ActGovernment Orders

4:55 p.m.

Reform

Gurmant Grewal Reform Surrey Central, BC

Mr. Speaker, Bill C-78 amends various acts, essentially replacing words such as spouse, wife, wives, widow, et cetera with survivor or survivors. In this 200 page bill which has about 231 clauses, the word survivor is mentioned 249 times. Of course it is defined in clauses 53 and 75.

The government's backgrounder on Bill C-78 states: “To ensure that the government's pension package for its employees is in keeping with the opinion of the courts, survivors benefits will be amended to extend survivors benefits to same sex partners”. However, in 1995 the supreme court ruled in the Egan case that an opposite sex definition of spouse in the Old Age Security Act relating to spousal benefits was reasonable.

In the hon. member's opinion, why is the government ignoring this supreme court decision?

Public Sector Pension Investment Board ActGovernment Orders

4:55 p.m.

NDP

Louise Hardy NDP Yukon, YT

Mr. Speaker, when it comes to determining who the beneficiary for a pension should be, I think it is important to allow every individual to determine who their beneficiaries are, whether they are their children, their parents, their partner, their wife, their husband, their son or their daughter.

The Liberal motives for, as the hon. member says, ignoring a supreme court decision I would have to leave to the Liberals to answer.

Providing benefits for same sex partners is an important step. The government should do it straight out in the open and not try to sneak it through any back door because we have an obligation not to discriminate against anyone.

Public Sector Pension Investment Board ActGovernment Orders

5 p.m.

Bloc

Jocelyne Girard-Bujold Bloc Jonquière, QC

Mr. Speaker, unlike the Liberal member who spoke before me, I come from a riding 90% of which is unionized.

What gets to me in this bill is the make-up of the advisory committee. I think the management of this committee will not always be joint. Who will represent the unions on this committee? Where are the workers? Where are the former workers?

Only one person will represent the pensioners. If that means jointly with the workers, they should look again.

I would ask the member to explain her viewpoint and give her opinion on this.

Public Sector Pension Investment Board ActGovernment Orders

5 p.m.

NDP

Louise Hardy NDP Yukon, YT

Mr. Speaker, the whole appointment process is particularly troubling. When I was first elected I sat on the aboriginal affairs committee and we had a paper whisked in front of us telling us who the interim commissioner would be for Nunavut. To leave the appointment of a board to one person, our minister, with the input of a nominating committee of eight is quite wrong. Representation should be built in for the employees and the pensioners.

The whole idea of appointments and how we deal with them in our parliament is worthy of a debate. We could talk about how our senators are appointed and how judges to the supreme court are appointed.

This process continues the very exclusive nature of allowing power to be focused at the very top of the pyramid, rather than giving any say or power to, or investing any responsibility with, the people who were elected. The government has the most seats and it will make its decisions as it sees fit. The whole appointment process needs a lot of scrutiny and I do not agree with the process which is being put forward. I do not think it will benefit us in the long run.

Public Sector Pension Investment Board ActGovernment Orders

5 p.m.

Liberal

John Bryden Liberal Wentworth—Burlington, ON

Mr. Speaker, I do not think the member for Yukon quite understood my earlier question. It is my fault I am sure for not explaining it very well. I will try again.

I have a great deal of difficulty, coming from a riding in which there are a few unions, understanding the logic that the union is claiming ownership of this $30 billion of alleged surplus, even though it cannot increase its benefits because its benefits are fixed and even though this $30 billion surplus has actually come from the taxpayers. It has come from the ordinary small people, the barbers and the grocery clerks and these small people in my riding who do not have the protection of a union and do not have a circumstance where they can put in $30 and get $70 from the government. However, that money from the government is coming from those grocery clerks and those small people in my riding.

That money could be invested more wisely and get a better return. We see the same kind of conflict we had with the Quebec pension plan which invested wisely and aggressively and is a much healthier plan than the Canadian pension plan which invested only in safe instruments. Is it not better for the small people, the ordinary taxpayers, that we try to use this money in a way that actually reduces taxes for ordinary Canadians?

Public Sector Pension Investment Board ActGovernment Orders

5 p.m.

NDP

Louise Hardy NDP Yukon, YT

Mr. Speaker, obviously I do not agree with the member opposite. What I understand him to be saying is that the Canadian forces, the RCMP and the public service should not have any say in the changes proposed in this bill, and I do not agree with that at all. Sure, everyone else should have a say as well, but this does not give them that say.

Public Sector Pension Investment Board ActGovernment Orders

5:05 p.m.

Liberal

Lynn Myers Liberal Waterloo—Wellington, ON

Mr. Speaker, I want to take a few minutes to talk about the RCMP. As you know, I have a very strong interest in policing matters. I was a former chairman of the Waterloo Regional Police. I think we need to ensure that all things are done in every way for our police services across Canada, wherever they may be, and I think it is important to highlight this fact.

I want to begin by pointing out that the government is aware that some members of the RCMP have expressed concern over the lack of RCMP input into the pension amendment package. It is true that the same degree of consultation did not take place with RCMP representatives as it was the case with public service employee representatives.

I think it is fair to say that the government would have preferred to consult more widely with the RCMP on its future pension arrangements. I think that is clear. Most of the proposed changes, however, will address pressing financial issues facing all of the public sector pension plans, including the RCMP plan. I think we need to note that the superannuation plan in that sense will be fully taken into account.

For example, because of the way the RCMPSA is harmonized with the Canada Pension Plan, RCMP members have been protected from CPP contribution increases since 1987, while the government's costs have been increasing. The urgency of addressing these financial pressures was a major reason for the government's decision to proceed as quickly as possible with the pension changes, including benefit improvements included in Bill C-71, the budget implementation act. The change to base the pension calculation on a five year instead of a six year average is an important change.

The government recognizes the fact that the RCMP is a unique organization and that consultation with members around plan changes is highly desirable. For these reasons, Bill C-78 contains a number of areas in which consultation can take place in the future. It should be noted that the solicitor general has ensured that the proposed amendments to the RCMPSA contain flexibility to adjust the pension plan to meet the future needs of the RCMP. The areas where change will be possible are vesting, portability of pension credits, both in and out of the RCMPSA, expanded elective service provisions and plan provisions for members working part time.

Present vesting periods are set at 10 years for regular members and 5 years for civilian members. The bill will allow these periods to be shortened by regulations if, after extensive study and consultation, such changes are indeed desirable.

Under the current provisions of the RCMPSA, members wishing to increase their pensionable service can only do so if they have prior public service, or service in the Canadian forces, or service as a member of a provincial or municipal police force absorbed by the RCMP. The bill provides for greater pension portability for members joining or leaving the RCMP. The bill will make it possible to transfer pension credits from a previous employer, which is an important provision for police personnel. It is one that we should note and indicate that we are prepared to support.

For members leaving the RCMP in the future, a new option will be available to improve pension portability under conditions to be determined in new regulations. Members will be able to transfer the actuarially calculated value of their pension benefits to locked-in financial vehicles or to another employer's pension plan.

Currently, there are a number of RCMP members who are working on a part time basis. This bill will make it possible to accommodate such members through the making of new regulations. Again that is an important provision and one that is important to police personnel.

Another area in which future consultation between the solicitor general and the RCMP will take place is on the member contribution rates which will be in effect beginning in the year 2004. For the period beginning January 1, 2004, the Treasury Board will set the member contribution rates on the joint recommendation of the solicitor general and the President of the Treasury Board. Although the bill specifically states that RCMPSA member contribution increases cannot be greater than those of the public service, because of the unique nature of the force the contribution increases could in fact be less.

Finally, the solicitor general will be given increased powers under the new bill for the financing and funding of the RCMP superannuation plan. In addition, the solicitor general's pension advisory committee created under the RCMPSA is being given a strengthened mandate in Bill C-78. That is an important implementation provision and one that all members of the House should be prepared to support.

This strengthened mandate will ensure that members and pensioners will be able to use their pension advisory committee for the purposes of making recommendations to the solicitor general on the administration, design and funding of the pension plan. That too is an important area in which personnel will have valued input.

The solicitor general will rely on his pension advisory committee to assist him in carrying out his increased responsibilities. In addition, a stronger pension advisory committee will lead to greater opportunities for meaningful consultation with RCMP plan members in the future.

I think these are important areas that need to have the legislative background which will ensure that our police services and the RCMP in particular have the kind of provisions that are necessary. Bill C-78 does that. Therefore, I would urge all members of the House to support it because it is an important initiative and one that benefits RCMP, wherever they may be in Canada.