Debates of April 26th, 1999

The House resumed from April 22 consideration of the motion that Bill C-78, an act to establish the Public Sector Pension Investment Board, to amend the Public Service Superannuation Act, the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act, the Defence Services Pension Continuation Act, the Royal Canadian Mounted Police Pension Continuation Act, the Members of Parliament Retiring Allowances Act and the Canada Post Corporation Act and to make a consequential amendment to another act be read the second time and referred to a committee; and of the amendment.

Division No. 386

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, you caught me a bit off guard. I felt that this was a debate of interest to a great many people in this parliament, especially since Bill C-78 is an important bill.

This is definitely a highly technical bill. It addresses the various pension plans administered by the federal government, as well as creating some institutions of future importance. It is a bill on which, as we have just seen, the government is very anxious to pass a gag order, or in other words to take away the right of the members of this House to speak, because it has seen how things are heating up.

It seemed just now that we were dealing with what, in criminal circles, would be called a return to the scene of the crime. When a criminal is interrupted while committing a theft, he takes off, but he always returns. And that is what this government is doing.

This bill has major consequences for the future of relations between the federal government and the employee contributors to the various pension funds.

Bill C-78 creates the public sector pension investment board. The mandate of this board will be to do exactly what we have been doing for more than 30 years in Quebec with the Caisse de dépôt et placement, which is to say managing various pension funds. There are three major funds, including the one for government employees.

The bill amends the Public Service Superannuation Act, the Canadian Forces Superannuation Act, and the Royal Canadian Mounted Police Superannuation Act.

The board will manage the billions of dollars in these funds annually. As I mentioned, the board's mandate resembles that of the Caisse de dépôt et de placement. Over 30 years ago we had the bright idea to set up this caisse, which now manages several tens of billions of dollars of Quebeckers' retirement savings.

On the strength of its more than 30-year track record, I can say that we did well to introduce this caisse, just as the government is doing well to establish a public sector pension investment board.

Where it falls apart and where we disagree violently with the government has to do with the fact that there is a danger that the main players will not be represented on the board's board of directors.

Right now, these various funds have 275,000 members. A total of 160,000 retirees and 52,000 survivors receive payments from one of the three plans. None of these will, if we look at the probabilities, be represented on the board of directors of the Public Sector Pension Investment Board.

It involves the management of the contributions they made as employees and making the most prudent decisions possible so these funds will grow, remain viable and provide a good pension income on their retirement. However, employees contributing currently will not be represented on the board of the pension investment board.

Neither will those who are retired, who contributed in the past. Some decisions, including those involving unforeseen surpluses generated by the various pension funds, require those who have previously contributed and who are now receiving their pension to have a say and be involved in decisions. But no, the 160,000 retired individuals who have paid in and who are responsible for past surpluses have no right in this regard. They will not be represented on the board of the pension board.

Why, we ask, will they not be represented? For the following reason. The members of the board of the Public Sector Pension Investment Board will be appointed under the following process. The President of the Treasury Board, in his usual dictatorial wisdom, establishes an advisory committee of eight persons under Bill C-78. It is him who appoints the eight members of the nominating committee. These eight people will submit to the President of the Treasury Board a list of potential candidates for appointment as directors of the pension investment board.

This nominating committee will ultimately, with the approval of the President of the Treasury Board and the governor in council, determine who will sit on the board of directors and decide how the pension plans that I mentioned earlier will be managed.

The President of the Treasury Board will appoint the chair of the nominating committee. He is the only one making that appointment. He will also directly appoint two members to represent him on the nominating committee, one of whom must be a public service employee.

He will appoint a member among people who are in receipt of a pension. He will also appoint two members after consulting with the Minister of National Defence, and two members after consulting with the Solicitor General of Canada.

These are the eight people who will make up the nominating committee. Only two of them will represent pensioners and employees making contributions.

When you are making a 50% contribution to a pension plan and the government—your employer—is contributing the other 50%, you expect equal representation from the beginning of the process.

So, two out of the eight members of the nominating committee will provide the President of Treasury Board with a list of candidates for seats on the board of a body which will administer billions of dollars of present and future employer and employee contributions.

Are we to believe that the majority of those suggested will be representatives of pensioners and workers? Logically, using simple mathematics, if these members are two out of the eight contributing to a discussion within the advisory board on a list of candidates to be submitted for positions on the Public Sector Pension Investment Board as directors, then their propositions will be in a minority from the start.

Then, once the list has been determined by the nominating committee, it is submitted to the President of Treasury Board, who will have every prerogative. He is the one who will determine which people on the nominating committee list will be submitted to the governor in council, or in other words the Cabinet, to constitute the 12 directors of the Public Sector Pension Investment Board, who will have a 3-year mandate.

When the President of Treasury Board receives this list from the nominating committee, if he does not feel like having any members representing pensioners or workers contributing to the plans, he will just do what is commonly called “cherry-picking”. He will just choose from the list the people whom he wants to submit to the Cabinet for approval.

The chances of any worker or pensioner representatives being on the executive of the Public Sector Pension Investment Board are about as unlikely as the chances of skating safely on the Rideau Canal this time of year.

There is no logic in this, particularly since the committee struck by the President of Treasury Board a year or two ago, which tabled its report in December 1996, proposed, based on how things are done elsewhere, that there be equal representation of workers and pensioners and of government on the executive of the Public Sector Pension Investment Board.

When the committee made this recommendation on representation, the government seemed fairly open to it, but last December its attitude changed and it decided this was no longer the way things would be. It decided to do as it does in its day-to-day management, which is to make quasi unilateral decisions, fill in the gap with unions and pensioners, act as it has usually done in its relations with unionized employees, and that is to proceed with special legislation and riot sticks. When it is not the riot stick, it is cayenne pepper. So, that is what it does.

It is a dictatorship. It is an abuse of power and the denial of the rights of contributors to be part of the decisions that concern their money.

I would remind members that 50% of the contributions in each of the three funds come from workers. The other 50% comes from the government. Could you not, when you have contributed 50% from your pay cheque, have some say when it comes time to make a decision? No.

The President of the Treasury Board, on the example of the Minister of Finance, who dips into the employment insurance fund surpluses, decided to continue the tradition of this Liberal government of royally ignoring employees and pensioners and make unilateral decisions. That is unacceptable.

According to actuarial forecasts, there will be a surplus in the three main funds that could exceed $30 billion. In Bill C-78, the government appropriates the right to use what it calls unforeseen surpluses, including that of $30 billion, as it sees fit.

No question of discussions with the unions or those who contribute to the fund, no. Unilaterally, he decided he would follow the government's practice of taking money from others, without warning, without speaking to anyone. Bill C-78 enshrines the practice by providing that the government will use the actuarial surplus as it sees fit.

For example, the government could use part of that surplus to reduce contributions or eliminate them temporarily. But on this side of the House, when we look at what happened to the employment insurance fund, we are convinced that the government will use that $30 billion in a manner that totally ignores the fact that it should benefit public service employees, and particularly pensioners and surviving spouses.

In his usual wisdom—which is selective when the time comes to present his case—the President of the Treasury Board says “Yes, but in the past, when there was a deficit in the various pension plans, it is the government that put up the money to eliminate such a deficit”. Indeed. But let him show the actual figures indicating what amount the federal government had to provide in recent years to eliminate such deficits in the pension plans. Is it $4 billion, $5 billion or $6 billion? Could the President of the Treasury Board commit to table the figures on the federal government's contribution, which is estimated to be around $5 billion?

If the federal government did indeed provide $5 billion to absorb the deficits in the three pension plans, could it be that, out of the anticipated surplus of $30 billion, there is $25 billion that do not belong to it, or that only half of that amount belong to it since the government and the workers both equally contribute to these plans?

Could it be that the President of the Treasury Board is very selective in his arguments? He is using closure precisely because he does not want to hear the whole truth.

We are prepared to consider that if, in recent years, the federal government contributed $5 billion to absorb any pension deficits related to an economic downturn, that leaves a surplus of $25 billion for which we could agree on a management structure. Decisions should be made in a collegial fashion. But the government does not know about that concept. There is an amount of $25 billion that does not belong to the government. The government may be entitled to half of it, but the other half belongs to contributors.

The consultation and management process for contributions and surpluses that is found in the legislation is a breach of democracy and it goes against what is done elsewhere.

Let us take a look at what is done elsewhere. It is not just government pensioners, federal public servants contributing to pension plans who find themselves with greater actuarial surpluses than anticipated four or five years ago. This has happened everywhere because of low interest rates, higher rates of return and, perhaps, managers' talent. The result is almost generalized surpluses that were not forecast by actuaries in almost all pension funds throughout the country.

What have others done with the unexpected surpluses? They have agreed to a collegial system with plan members, pensioners and managers. The federal government will not consider such an approach.

I will give the example of the Government of Quebec, with which I am very familiar. The Government of Quebec has two pension fund management committees, one representing unionized workers and one representing managers. There are two pension plans, one for unionized workers and one for managers. Each of these plans has a management committee.

The unions and the government are represented on each management committee in equal numbers. There is real collegiality. It is a democracy, not a dictatorship.

Last December, the way the President of the Treasury Board was talking, it sounded as though the government had seen the light, had remembered what democracy was and how to behave in a civilized manner, and would introduce a structure in which contributors and management would have equal representation. But no.

In Quebec, there is a collegial approach to deciding how surpluses are handled. Decisions are taken as well. This committee, composed of equal numbers of unionized workers and representatives of the Government of Quebec, also decides what will be done with surpluses and what management directions should be taken. In co-operation with the Caisse de dépôt et de placement du Québec, it decides on the best growth vehicles for contributions and for part of the surplus of workers and managers.

It would have been so easy to get it right for once. All the elements were there. But instead this government's cynicism has prevailed. This government is thick. I have said so often, but not often enough, in my opinion. The government is close-minded. We try to get it to understand some common sense, we try to tell it that it might be a good idea at some point to look calmly at the possibility of collaboration with the public servants and public service pensioners, rather than confrontation. But with the government, it is always confrontation.

It is trampling on the most fundamental right, a minimal right I would call it, to have representation. It makes no sense. Contributors to a fund would like to take part in the decisions on how that fund is managed, particularly since later on, depending on what decisions are made, and on whether or not there is contributor participation, they are the ones who will benefit, or not benefit, from the administrators' decisions. Here we are faced with a structure in which contributors are completely pushed aside. This is not normal.

As members know, here is how things work elsewhere when there is a surplus: a joint decision is made on what to do with the unexpected surplus. Judging by a sampling of some thirty funds over the past three or four decades, often it has been agreed to improve the plan and its benefits, and also to improve survivor's benefits. Often, survivor benefits are less than the worker's pension was during his or her lifetime.

The plan has been improved, and now even includes certain provisions for part time workers, but it has always moved in the direction of improving people's lot. This government's only motivation is the general improvement of the state of the surpluses, with the Minister of Finance shamelessly dipping into surpluses in the employment insurance fund.

The President of the Treasury Board has just got into the habit, unless the two are one and the same, unless the Minister of Finance is ordering the President of the Treasury Board, as the future leader of the Liberal Party of Canada, who is preparing his race for the leadership and who wants an extraordinary performance to be able to announce this race where he succeeded while others failed spectacularly. But he is doing this on the backs of others. Everyone is going to remember that.

[Tony Ianno, Liberal, Parliamentary Secretary to President of the Treasury Board and Minister responsible for Infrastructure]

Madam Speaker, I have a question for the hon. member. Is the Quebec government pension plan a shared risk, shared management plan?

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I do not understand the hon. member's question. There are two major pension plans in Quebec's public service, plans that are entirely usual. There are risks in investing just as there are benefits in it.

What I mean is that it is the contributions of employers and employees that are paid in part into the Caisse de dépôt et placement, which manages the surplus on behalf of these two funds. What the committees keep is what they need to pay the pensioners' benefits. So the plan is not more risky than any other. The risk is shared, because the employer's and the employees' contributions are pooled and managed.

The Caisse de dépôt et placement has the mandate, trough two management committees, to manage part of those assets, so as to generate enough money to pay pensioners. There is not much difference between the three major federal pension plans and the ones in Quebec. They are essentially similar, except that Quebec has been doing for about 30 years what the federal government wants to do with the pension investment board, and we are very proud of that.

It should be noted that my presentation did not include any negative comments about the pension investment board. It is a great idea. What we disagree with is how the funds will be managed and the inadequate representation. Normally, the main stakeholders are involved in managing the funds. Our second point is that the government is once again making off with the contents of the till, like a thief.

I did not mention any names. I just said that the government was acting like a thief. This is not unparliamentary. Nothing prevents me from saying that this government is acting like a thief when it keeps helping itself to the EI fund, for instance, and its $25 billion surplus. Very few Canadians and Quebeckers agree with this approach.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, I have a comment and a question for the member for Saint-Hyacinthe—Bagot.

First, it is terrible that debate is so limited on a bill that is almost one inch thick. It is a very important bill in our country, which has a public sector pension plan. The government wants to help itself to $30 billion of the surpluses and pull the same stunt it pulled with EI. This year, the surplus in the EI fund will reach $27 billion.

As I have already said in the House, there are still people in this country who open their fridge in the morning and find nothing in it. They have nothing to feed their children before sending them off the school. Workers have been robbed; there is no other word for it.

I would like to know whether my colleague agrees with me. Is a precedent not being set with this bill in the House of Commons? The government is going to help itself to surpluses without workers' consent. It is opening the door for corporations, which have long wanted to get their hands on pension fund surpluses. Workers have always been opposed, as have governments.

Today, the government is setting a precedent. It will no longer have any argument against big corporations that want to dip into their workers' pension funds.

It will no longer have any argument when big corporations tell it they want access to surpluses in order to invest them elsewhere. Employees are going to have to pay higher and higher premiums, because there will not be enough money in these depleted pension funds, as the corporations will have got their hands on the money. This is an unacceptable precedent. The government ought not to be taking the country in that direction.

I would like to hear the comments of my colleague from Saint—Hyacinthe—Bagot on how important it is for the government not to act in this way, and particularly on how little time we have to debate this bill. We parliamentarians are not even being given the opportunity to say what we think. We cannot come to the House to express our opinions, to explain our point of view on behalf of the Canadians who sent us here.

It makes no difference whether one is on the left or on the right. We no longer know which way this House is going to go. Every time the Liberals want to pass a bill, they stop us from speaking in this House. They take away our rights as parliamentarians to defend Canadians. This is unacceptable.

I would like to hear my colleague's comments on the two questions I have asked, because the Liberals are not doing their job in this country at the present time.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, the hon. member is right.

In dealing with a problem, a dispute in a large firm, for example, because there are surpluses in the workers' pension fund, we will no longer have any valid arguments. It can no longer be said that this is not how it works, when the federal government allows itself under Bill C-78 to do everything it is not supposed to do, namely go off with the money.

We will no longer have any valid arguments. My colleague is right on that. I recall a time not so far off when one of Conrad Black's businesses was at issue, and Conrad Black said “The surpluses do not belong to the employees anymore, they belong to me”. How can we argue that he is wrong.

In this case, given that contributions are made by both sides and the future of the pensions of today's workers is at stake, how can we say “You should sit down and discuss this”? We have reached a point where we no longer have any valid arguments.

The other thing I would like to point out, in connection with what the hon. member mentioned about the employment insurance fund, is that the government has just legitimized a fraudulent practice—that of going off with the money.

We recall the Minister of Finance saying last November “I foresee the possibility of introducing a bill on the management of the employment insurance fund surplus”. He had a bill like this one in mind. However, faced with popular opposition—that of the Bloc Quebecois and the other opposition parties in the House—he backed away.

However, the Minister of Finance dreamt of having this legitimacy, since at the moment, it is not yet certain that he is within the law when he dips into the employment insurance fund, and there are cases before the courts at the moment. Among others, the CSN is making representations on this issue, on the grounds that the finance minister's interpretation of the Employment Insurance Act is stretching the point somewhat. It might snap, because the Employment Insurance Act includes pretty clear provisions on the use of surpluses, and reducing the deficit and paying off the debt are not options. The EI surpluses must not be used for such purposes.

The Minister of Finance dreamed about tabling a bill like that, but he does not have the same agenda as his colleague, the President of the Treasury Board. He has a different and more secret agenda, but everyone knows about it. I am referring to the leadership race. It would have been terrible for a politician to table a bill legitimizing the use of funds that do not belong to the government.

[Tony Ianno, Liberal, Parliamentary Secretary to President of the Treasury Board and Minister responsible for Infrastructure]

Madam Speaker, it is nice to see the amalgamation and the marriage of the united left. The Bloc and the NDP have sort of the same mindset.

I have a question for the hon. member. He did not understand the difference between shared risk and shared management. Taking into account the $30 billion surplus, the government is responsible for the deficit or the surplus. It is unfortunate that in his whole presentation we were not able to understand the premise of his argument.

Would he like to try to explain to the House what he meant, taking into account he was not aware of the shared risk management concept?

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, if the hon. member is suggesting that I do not grasp the concept of risk, he is badly mistaken. In fact, one of my main arguments is that, if he claims that past pension deficits were absorbed by the federal government, then the President of the Treasury Board should table the figures. According to our calculations, the federal government's contribution in that respect is around $5 billion.

So, given a contribution of $5 billion and an anticipated actuarial surplus of $30 billion, this leaves some $25 billion that does not fully belong to the government; this amount belongs equally to taxpayers and the government. This is why we are advocating a collegial approach to managing the funds and related risk, instead of the dictatorial approach proposed by the President of the Treasury Board through Bill C-78.

I clearly understand the concept of sharing risk. In fact, when I did my masters in university, part of my thesis dealt with that issue.

[Tony Ianno, Liberal, Parliamentary Secretary to President of the Treasury Board and Minister responsible for Infrastructure]

Madam Speaker, last week the government tabled legislation that set out the first major improvements to the public service pension plans in more than 30 years. The legislation aims to ensure the long term sustainability of Canadian public service pension plans, improve the financial management of the pension funds, and upgrade the benefits currently offered to government employees.

I rise today to express my support for Bill C-78 and to underline more particularly its beneficial provisions on the management of public pension plan surpluses and deficits.

Under existing legislation the government assumes responsibility for deficits in the pension accounts but is not entitled to manage existing surpluses. Obviously this is an anomaly that must be corrected.

Also under the present system when projections show an account to be holding more than necessary to meet the future obligations, both the employer and the employees must nevertheless continue to contribute to the accounts as legislated. This provision means that surpluses can thus continue to exist and even grow indefinitely.

For private pension plans, however, the Income Tax Act sets a limit at which a growing surplus must be managed according to specified terms; but this is not the case for public service pension plans. This has become an issue of very real importance since 1991. In 1991 surpluses started to accumulate in the three federal government superannuation plans. They now total some $30 billion.

These surpluses show the difference between the balances of the accounts and the amounts estimated by the actuaries needed to actually pay for all future benefits earned to date by plan members. It makes no sense to keep forcing the Canadian taxpayer to credit ever growing employer contributions to pension plans that continue to generate a surplus far in excess of the needs of plan members and what the Income Tax Act allows for other plans.

As the President of the Treasury Board said earlier the government wants to be fair to government employees, but we would not be acting fairly toward other Canadians if we were to give federal public servants financial advantages that were not available to all. Bill C-78 will provide the government with the authority and mechanism for managing pension surpluses in a manner consistent with the rules for registered pension plans as set out by the Income Tax Act.

The management of the surpluses raises another issue. Who has the ownership of the $30 billion surplus? Canadian taxpayers have always assumed the risk of the public service pension plans since their creation in 1964, and these are not empty words. Since 1964 Canadian taxpayers have poured into the government employee pension plans $13 billion to cover for deficits. Since the government has carried the full load of the risks in all those years, it is only fair that we would also be responsible for any surplus.

The present surpluses would gradually be reduced to the allowable level over a period of up to 15 years. The amounts will be debited over the chosen period so that at the end of the period the remaining surplus or excesses is at most no greater than 10% of the estimated liabilities. This 10% cushion is in line with Income Tax Act maximums that apply to all pension plans in Canada.

Bill C-78 will also permit Treasury Board ministers to determine the use of any future surpluses. They could decide to institute a contribution holiday for plan members, the employer or both, or to withdraw all or part of the surplus. Surpluses could also be used to improve benefits though this would require special legislation.

It should be noted that the government would continue to assume all financial risks for the public service pension plans and to be solely responsible for making extra contributions to cover any future account deficit. This is a further argument in favour of giving the government responsibility for managing an eventual surplus.

Under the legislation now before us, before deciding what to do with an eventual surplus the Treasury Board would consult with the ministers responsible for the three pension plans and with those responsible for the financial management of the plans. As the President of the Treasury Board noted, the same principle will be applied in the case of the new Canada Post pension plan structure which will also take effect on October 1, 2000.

Any future surplus in the CPC pension plan will be managed by Canada Post which has responsibility for all the risks and management of the fund.

This surplus could be used to reduce contributions or to further enhance benefits, or a combination of the two. As previously announced, Canada Post will be meeting and discussing the pension plan with all bargaining agents over the coming weeks and months.

Since the government first announced its intention to take responsibility for future pension plan surpluses it has been accused in some quarters of acting unilaterally without due regard for the opinion and interests of pension plan holders. In fact the government did not move earlier on this issue precisely because it was hoping to reach agreement with plan members on a new joint management framework for the future of pensions.

Thorough consultations have been held in the seven years since 1992 on this subject between the Treasury Board and employee representatives.

In November 1992 the President of the Treasury Board asked his advisory committee for the public service pension plan to conduct a review of the fundamental elements of the plan, including its management and financing. The committee reported to the president in December 1996.

After studying the report in February 1998, the President of the Treasury Board announced the start of a consultative process with employees and pensioners aimed at developing a package to reform the public service plan. Among other things this consultative committee was offered to negotiate an agreement on sharing the risks of the pension plans that would allow our employees to share surpluses in the future.

The committee met from February to December 1998 and, though significant progress was made on the issue of future deficit and surplus sharing, discussions broke down last December. Despite the fact that employees have not shared the cost of past deficits, their representatives insisted on receiving a significant share of the accumulated surplus.

As I explained previously, since the government has carried the full load of the risks in the past, it is our view that we would also be responsible for any surplus. Even though the employer offered joint management and significant improvements to our employee pension plans, the offer was deemed insufficient by employee representatives.

Faced with this impasse, after having consulted for several years with employee and pensioner representatives, the government decided to move ahead simply because it could not afford to wait any longer. By delaying indefinitely the necessary changes that are being proposed today the government would have in fact created an even more intractable position for all concerned.

I believe it would have also shirked its responsibility to all Canadian taxpayers if it did not act to put public service pension plans on a better financial footing, as well as modernizing and improving their administration.

Hon. members should recall, however, that the President of the Treasury Board, on behalf of the government, stated on more than one occasion that the door remained open for future negotiations on the management of pension plan deficits and surpluses. So far, far from being insensitive to the preoccupation of public service pension holders, I think the minister has shown himself to be very open-minded in his approach to this question. We should applaud his willingness to reopen discussions at the opportune time in the best interests of all parties.

I too hope very much that employee representatives will soon resume discussions on a joint management plan for our public pension plans.

I urge all hon. members of the House to support the proposed amendments to the public service superannuation acts. I believe they are fair to our employees and fair to the Canadian taxpayer and that they will bring about much needed and overdue changes to government pension plans.

[John Williams, Reform, St. Albert, AB]

Madam Speaker, I would like to ask a question of the parliamentary secretary.

First we have to acknowledge that the government is no longer paying interest on the surplus, saving about $2.5 billion a year. Now it wants to take this surplus and bring it into its income.

What benefit will this give to the pensioners and to the employees, if any? I cannot see any. Apart from the Minister of Finance being able to brag about finding extra revenue, what benefit will this be to the taxpayers of Canada? Canadian taxpayers are not going to see the cash. Presumably the money is going to end up reducing the government's debt, which has been run up over the last 30 years. That is downright criminal, but nonetheless it is there. What is the benefit for the taxpayers of Canada? What is the benefit for the employees? Is the benefit to make the Liberal government look good?

[Tony Ianno, Liberal, Trinity—Spadina, ON]

Madam Speaker, it is nice to hear the Reform Party complaining about a debt or a deficit going down. It is an interesting reversal.

As we have stated many times, and I know the hon. member agrees, the surplus was created by the government putting into the legislated plan the amount of money which an actuarial evaluator determined was required each year to ensure that enough money was available to pay for the service. Unfortunately, because of the way the legislation was written, we cannot take the whole plan into account even when there is a surplus and determine that the government put in less money.

Also, taking into account that CPP premiums have been going up and the percentage of employee contributions was maximized at 7.5%, which became less of a percentage overall, that meant that the government had to continue putting more money in to satisfy the needs of the pension plan on a current year basis.

It is important that the government correct this difference so that all Canadians are treated fairly. I know that the hon. member would want that. Taking into account what this would do for Canadians at large is an important step. We take into account the added moneys the government put into the plan to ensure that the actuarial evaluator was satisfied. Even though it was more than the government needed to put in, it will allow the government to deal with its finances and to ensure that the needs of Canadians with respect to health care and all other needs are met. We have to ensure that we are not paying the $42 billion interest payments per year solely for that, which I know my hon. colleagues in the NDP and the Bloc are concerned about.

The hon. member is correct in stating that the $2.5 billion will be a benefit to Canadian taxpayers. That money will be available to put into the programs that we all care about, such as child poverty and homelessness. Unfortunately the NDP is making sure that its union friends are protected in this process. They too know, as other pension groups know, that this money belongs to Canadian taxpayers. We on this side of the House want to ensure that all Canadians benefit from the money that Canadian taxpayers pay.

[Jean-Paul Marchand, Bloc, Québec East, QC]

Madam Speaker, I am astonished at the hon. member's remarks. I wonder whether he is not in fact trying to mislead the public. I could point out many things he said that are really very far removed from the truth, one of them being that the minister sponsoring this bill is acting with open-mindedness.

There is no open-mindedness when a minister tries to impose the government's will, as is happening here, without establishing a committee where pension fund contributors would be represented. It is more like an abuse of power on the part of the government. I cannot see any open-mindedness in what the minister is doing.

He is also trying to make people think that the government is acting in the interests of pensioners and taxpayers. Making people pay twice, as this bill does, is robbery.

It is as if the people who have contributed to this pension fund, whose surplus is some $30 billion, were being made to pay twice, because the government is acting contrary to the interests of pensioners and the general public by grabbing huge amounts of money rather then turning them back to the people who paid into the fund.

This is double taxation. This is a hidden tax. That is the truth. My colleague was trying to convince people that he is working in the taxpayers' interests. That is a falsehood. Our colleague has made a deliberate and intentional error.

Basically, the government's intention is not to act in an open-minded way. It has even imposed a gag on debate, scarcely an hour ago, because it was so anxious to stifle the debate on this misappropriation of Canadians' pension money.

This is not being open-minded. This is not defending the interests of pensioners or taxpayers. It is making the taxpayers pay twice.

I would therefore call on my colleague to comment this. Does he still maintain that the minister who introduced this bill is showing open-mindedness, and is making the taxpayers pay twice for this pension fund really seeking to help them?

[Tony Ianno, Liberal, Trinity—Spadina, ON]

Madam Speaker, it is interesting that even within the same party the knowledge of this bill is different from the front to the back.

He stated that somehow employees contributed to the surplus, to the $30 billion process. They contributed, but the number nowhere nears the amount the government contributed, taking into account that the government always had to put in the extra money which the actuarial evaluator determined and taking into account that the CPP kept increasing to the point where it was 70% from the employer and 30% from the employee.

The hon. member indicated that he would have liked another six months of discussion. That is the reason for time allocation. Otherwise, if we had the views of the hon. members opposite, the discussion would have continued for another six months, which would not have changed the facts that we have before us today.

The President of the Treasury Board has been open minded. That is important. As we stated, the offer may not be on the table directly, but the unions can participate in the discussion with respect to the surplus and the new investment fund that is being set up by this bill. Unfortunately the unions have balked at that. They want the surpluses, but they do not necessarily want to participate in the potential deficits that may exist in the future. It is one sided.

The hon. member says that the Canadian taxpayer is double taxed. I think with the track record of the Bloc that is something which is far-reaching.

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, I have a very straightforward question. I listened very carefully to the parliamentary secretary. He said that the federal government has put $13 billion into the program over the years. If it has only put in $13 billion, why is it trying to take out $30 billion? Why is it not sharing it with retirees and current employees?

[Tony Ianno, Liberal, Trinity—Spadina, ON]

Madam Speaker, we know the NDP's track record when it comes to finances. It left a $10 billion deficit in Ontario and in B.C. with its abysmal record on finances. Once again its members do not understand the basic elements.

I wonder if the hon. member overheard that somewhere. It is interesting that when the facts are on the table the member feels awkward. Only when he hears it from comments will he then respond appropriately.

The government has paid the surplus. That is why there is a surplus and that is what we are dealing with.

[John Williams, Reform, St. Albert, AB]

Madam Speaker, for a very short period of time, and I emphasize a very short period of time, we are debating Bill C-78 which was first debated last Thursday morning. We talked about it for a little while last Thursday and immediately the government introduced closure saying that we have talked enough about this on the very first day of debate. Today is the last day of debate at second reading. As far as I can tell, it is the government's desire to rush this thing right through committee, report stage, third reading and into legislation before the people of Canada and the public servants can realize what is going on. They will be presented with a fait accompli.

It is not the first time the government has done something like this and I doubt it will be the last time. Every time the Liberals do it I think it is atrocious that they would treat the democratic process this way, but they feel this is the way they want to run the democratic process in this country.

I am shocked that the government thinks that a 200 page bill with clause after clause of technical writing that is difficult to understand can be rushed through parliament in a very, very short period of time. Shame on the government for even thinking about doing something like this.

We have had a chance to take a look at some of the small points and the bigger points. We have been talking about the $30 billion surplus the Liberals are going to help themselves to, raid the piggy bank I say and help themselves to the employees' pension funds.

Right at the very beginning the government talks about privatizing the pension plan. The government will set up a board of directors to run this pension plan, which is normal. We need to have somebody to run it.

A member of a pension plan such as the Public Service Superannuation Act, the Canadian Forces Superannuation Act or the Royal Canadian Mounted Police Superannuation Act, is not entitled to participate in the management of the plan because obviously there would be a conflict of interest. We would not want anybody who participates in the plan being part of the management.

This bill also amends the Members of Parliament Retiring Allowances Act. Members of parliament are somewhat affected by this bill but they will not be precluded from sitting on the management board. This is a little omission which I think speaks volumes about who this Liberal government intends to put on the management board. Ex-Liberals collecting a pension of course are the first to come to mind. We will leave that to debate in committee, but we have to take a look at these little things in detail.

The parliamentary secretary tells us that the government feels it is entitled to the $30 billion surplus. Why? He says because the government assumes all the risks. The government of course means that the taxpayer assumes all the risks. The government does not have any money, only the money that the taxpayer gives to it. Therefore, the parliamentary secretary would have been quite clear in saying that the taxpayer is assuming the risk, not the government. There is a huge difference.

The parliamentary secretary pointed out that in the past there has been a deficit and the taxpayer, not the government, had to come up with $13 billion to offset that deficit. Now that there is a surplus the government says it should have the money. I believe that taxpayers should be protected so that they do not have to come up with another $13 billion down the road.

It gets a little bit complex here. I hope that I can make my argument clear enough for the simple minds on the other side to understand.

There is a mix between the contributions by the employees and the employer. The two add together to make the contributions. Contributions are invested and there is investment income as well. Now we have a surplus. The government says “We assume the risk and therefore we are entitled to the surplus because if there is a shortfall we will put it back in”.

The plan says that the government intends to increase the premiums of the employees. Therefore the employees are obviously accepting part of the risk of the financial health of the plan. If the employees are accepting part of the risk of the financial health of the plan, then the government does not have the right to say “We assume all the risks, therefore, we are entitled to all the surpluses”.

That logic is wrong. It is faulty. It cannot stand the test of scrutiny. That is why we are saying the government is being heavy handed. That is no doubt one of the reasons that there is closure already. The government does not want debate to continue on this bill. It knows it cannot substantiate and support its flawed logic.

Let us look at why we have the $30 billion surplus today. As the parliamentary secretary stated, it has only been accrued over the last six years. It started to build in 1991. It started to build for three reasons.

First, the government imposed a wage freeze on civil servants. Since 1991 they have not had an increase. The actuaries in the 1980s had anticipated that salaries would go up. As salaries go up the cost of benefits go up too because they are based on a percentage of salaries. If salaries are frozen, benefits are frozen. Therefore the anticipated extra costs of benefits did not materialize, hence a part of the surplus.

Second, the civil service pension plan is fully indexed for inflation. It is one of the few, if not the only one, that is fully indexed for inflation. What happened to inflation in the 1990s? It virtually disappeared. Therefore the actuarial assumptions that inflation was going to increase the cost of benefits did not materialize, hence adding to the surplus.

The third point is that the money that is in the plan is invested in 20 year government bonds. Back in the 1970s and 1980s, because of inflation the interests rates were high. Today the plan is still benefiting from these high interest rate bonds. As they mature and are reinvested in lower interest rate bonds or in the private sector, and perhaps the capital markets will not continue to do as well as they have in the past, the return on the plan is going to start going down.

Now that we no longer have a wage freeze, we can anticipate that benefits are going to start going up again because we are granting wage increases to the civil service. Thankfully the government recognized that it could not keep a lid on good employees forever. They will either walk away and get a job somewhere else or the government is going to pay them what they are worth.

Increases in salaries automatically guarantee increases in the cost of benefits. We will see a lower rate of return on the plan. We know that that increase in the surplus is going to stop. It may peak at about where it is now and potentially it may go into a decline.

If the government takes the $30 billion, massages the books and then tells us what a wonderful job it is doing, a few years from now it will turn around and tell the taxpayers “We are sorry folks, there is a deficit in the plan. You have to pay more taxes. You have to pay more cash”. I do not think that is a justifiable position. That is why I proposed on numerous occasions that the surplus stay in the plan. We know the Liberals are going to say that that is going to cost the taxpayer some money. But they have already stopped paying interest on the surplus. Therefore that does not cost the taxpayers a penny.

The money should stay in the plan to cover the shortfall. All the Liberals want to do is a simple bookkeeping entry, reduce the size of the pension plan, reduce the size of the debt and then stand back and say what a wonderful job they have done. Any bookkeeper that knows anything about debits and credits can do that but what has he accomplished? Nothing. He has just reduced the assets and the liabilities and nothing has been achieved.

Therefore this bill is only to make the Liberals look good at the next election where they can say that they have reduced the debt. But they did not do it by themselves. They did it courtesy of the pension plan of the civil service.

As I mentioned earlier about privatization, there is going to be a board. The plan is going to be privatized over a number of years. That perhaps is not a bad idea.

It is unfortunate that the capital markets are overly inflated right now. We certainly hope the Liberals can guarantee a decent return on the funds invested. If they cannot, they will be back to the taxpayer. Remember what the parliamentary secretary told us, that the taxpayer is on the hook fully and completely for this fund. I can see them coming back to the taxpayer in short order, after the election of course, saying “Oops, miscalculation, we need more money”.

We want to protect against that. We want to make sure that does not happen. That is why we are fighting vigorously for the money to stay where it is.

We are not advocating that it go to the unions. We are not advocating that it reduce the premiums paid by the civil servants. We are not advocating that we increase the benefits. All we are saying is protect the taxpayers. Protect them now, protect them next year and protect them the year after. There is nothing this government wants to do other than make itself look good.

We know the Minister of Finance is building up surpluses here, there and everywhere. I have talked about them before. He has $2.5 billion tucked in a bank account for the millennium scholarship fund. It was paid for last year but it is providing no benefit to any taxpayer today. It is sitting there waiting for the year 2000-01 which coincidentally happens to be before the next anticipated election. At that time the cash is going to flow and students are going to say “Wow, this is great, I finally got some cash”. In the meantime that money could be spent now for the benefit of students and it is not. That is why it is smoke and mirrors from that party.

[The Speaker]

It is almost two o'clock and I want to give the member enough room to have a good kick at it after. He still has over eight minutes remaining. With his agreement we will proceed to Statements by Members.

Public Transit

[John Maloney, Liberal, Erie—Lincoln, ON]

Mr. Speaker, supporting public transit is an admirable goal and an essential goal.

Increased transit use leads to decreased traffic congestion, decreased pollution and related health care costs, decreased need for infrastructure to support car use, increased transit revenues. It starts a positive cycle where all transit users, including seniors, students and low income families, benefit from better transit service. All taxpayers benefit from the cost savings associated with less single occupancy vehicle use.

Last week in this House we were presented with the opportunity to accept the motion of our NDP colleague to consider making employer provided transit passes an income tax exempt benefit. The proposal would be an excellent step in the federal government's battle to meet our Kyoto commitment. It is one of the few incentives available to support public transit use. I would urge this government and the Minister of Finance to seriously consider this initiative.

“The Gift”

[Val Meredith, Reform, South Surrey—White Rock—Langley, BC]

Mr. Speaker, yesterday I had the honour to attend a truly unique gathering in White Rock, British Columbia. Two totem poles were raised on White Rock beach, one representative of the Haida and the other the Straits Salish people.

What makes these totems truly unique is that they were carved to honour the 125th anniversary of the RCMP. Both poles portray the RCMP in the role of the guardian or the watchman who ensures the safety of the citizens of the village. Commissioned by the White Rock RCMP and sponsored by numerous citizens from White Rock and South Surrey, these totems represent a coming together of the RCMP and the first nations peoples.

I would specifically like to acknowledge the efforts of Constable Mike Lane and Staff Sergeant Jim Fisher of the White Rock RCMP, Haida carver Robert Davidson, Salish designer Susan Point and the city of White Rock for providing us with “The Gift”.

Hospice Of Waterloo Region

[Karen Redman, Liberal, Kitchener Centre, ON]

Mr. Speaker, I rise today to honour the 142 trained volunteers of the Hospice of Waterloo Region.

The hospice is committed to preserving the dignity, autonomy, self-esteem and privacy of individuals facing life-threatening illness. The friends and family of the 1,194 clients from the Kitchener-Waterloo area who have used the hospice will tell you that the palliative care volunteers make a remarkable difference in the lives of the terminally ill.

Recently Lucille Mitchell, the founder of Hospice of Waterloo Region, was honoured at the annual mayor's dinner. In 1994 Lucille recognized the need for a volunteer based organization that would assist the ill with their physical and emotional needs. Hospice volunteers under Lucille's direction have given 27,548 hours to assisting the terminally ill.

Last week the hospice held its annual fundraiser. I would like to extend my congratulations to an excellent event. I commend the Hospice of Waterloo Region and all its dedicated volunteers. They are—

[The Speaker]

The hon. member for Scarborough Centre.

Scarborough General Hospital

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I rise today to salute the dedication and commitment of the many volunteers of Scarborough General Hospital in my riding of Scarborough Centre.

I had the pleasure of attending the hospital's volunteer appreciation dinner on April 19 last week. I must say I was struck by the longstanding commitment to the hospital that all the volunteers had. There were over 300 volunteers in attendance at the appreciation dinner with 76 of them receiving awards for service ranging from 5 to 40 years.

In particular, I want to recognize four volunteers who dedicated over half of their lives to volunteering at the hospital: Doris Daniel, Shirley McDonald, Jean Kennedy and Thelma Thomson. Each of these people have served the hospital for 40 years plus.

At this time, when labour unrest seems to be prevalent, it is indeed heartening to see that there are still many people who are willing to put their time and heart into a job simply because they love it.

I extend my congratulations to all the volunteers who were given awards at the dinner and thank them for giving so much to our community.

Armenia

[Sarkis Assadourian, Liberal, Brampton Centre, ON]

Mr. Speaker, I rise to commemorate the 84th anniversary of the horrible premeditated mass murder of 1.5 million Armenians at the hands of the Ottoman Empire that occurred in 1915.

Over 1,500 Canadian Armenians from across Canada gathered in Ottawa this weekend to honour their dead and to remind all Canadians to consider the horrible loss of life and terrible suffering that the ultimate crime of genocide has inflicted upon its victims.

In 1996 the House unanimously designated April 20 to 27 of each year as the week of remembrance of inhumanity of people toward one another. During this week, let us honour the victims of the Armenian genocide. Let us recognize its horrors and pledge to eliminate this evil act from our society.

Dustin Onerheim

[Lee Morrison, Reform, Cypress Hills—Grasslands, SK]

Mr. Speaker, on November 9, 1997, five year old Dustin Onerheim of Frontier, Saskatchewan and his two younger sisters were passengers in their father's half-ton truck when it collided head on with another pickup on the crest of a hill.

Dustin was the only one able to escape from the overturned vehicles by crawling out a rear window. Following the directions of his father, who was pinned in the wreckage, Dustin removed his two little sisters and then ran for help. Everyone recovered thanks to the quick response of a five year old boy who many hours later was diagnosed as having himself suffered a concussion.

Dustin has already received two national awards and he is here in Ottawa today to receive a youth award for bravery. The House welcomes Dustin and together we salute him for his courage.

United Alternative

[Brenda Chamberlain, Liberal, Guelph—Wellington, ON]

Mr. Speaker, the Reform Party's united alternative initiative continues to implode. Now the Reform leader has started publicly comparing himself and his caucus to the Fathers of Confederation no less.

The Reform leader has even taken to comparing himself to George Brown, which is bizarre to say the least since Brown was the leader of the Grits and one of the founders of the Liberal Party.

With the Reform leader's thoughts of grandeur, it is no wonder that the united alternative has received such a cold reception, especially in western Canada.

An Angus Reid poll taken after the UA convention in Ottawa reported that only 30% of Albertans are in favour of the united alternative. Even more important, amongst Reform voters it did not receive majority support.

Perhaps the Reform leader should listen to the growing group of dissenting MPs in his caucus. If he cannot stay true to his own fundamental principles, Canadians will never ever have any reason to support him.