Mr. Speaker, I am very pleased to speak to Bill C-78 before the House today and the changes it makes with respect to pensions and other matters. It is important to have this kind of debate so all Canadians can understand fully what we as a government are trying to accomplish in this all important area.
I want to talk a bit about the area of investment of funds and management of surpluses with respect to the bill. As we have heard repeatedly in the House, and I think it is worth repeating once again, as a government we are trying to improve the rates of return and reduce pension costs. That has been noted in a way which is very meaningful for everyone who will be impacted by the legislation.
In the past Canadian taxpayers have covered the deficits in the plans, but the legislation will now authorize the government to debit the existing surplus of $30 billion over a period of up to 15 years. I think that is in keeping with what the majority of Canadians want to see happen. It is important that we underscore that yet again today.
In addition, the independent board of directors will be authorized to manage future surpluses either by reducing contribution rates or by withdrawing amounts from the pension funds. Based on the board being put in place, it is important to note as well that it is certainly in keeping with overall government policy.
I want to talk about same sex survivor benefits. As members know, pension survivor benefits will be extended to same sex partners. Federal employees who have same sex partners should have access to the same pension entitlements and be subject to the same obligations as their colleagues.
It is important to note that there is no radical agenda at work here. The amendments do not redefine marriage, for example. Nor do they legalize same sex marriage. That is not what is at play here. It does not do much good to have members in the House indicate that this is the case. It is not and it is important that we speak on the record accordingly.
We are simply keeping federal pensions in line with court decisions and trends elsewhere in the public and private sectors. Provincial pension plans in Nova Scotia, British Columbia, Ontario and New Brunswick have been similarly amended as have those offered by companies such as Sears, Dow Chemical, Shell, Levi Strauss and others.
The courts are not setting the agenda. That too is important to understand. We believe it is for the courts to make rulings and for the government to make policy. This is appropriate legislative action then to eliminate a provision which has been identified as discriminatory by the courts. It has been estimated that the amendment will see an increase of less than 2% in the number of persons entitled to survivor benefits under the plans. The cost has been estimated at approximately $5 million per year.
I also recap, based on retirement and other benefits, that the retirement benefits will be calculated on the average salary during the best consecutive five years rather than the current six. Life insurance benefits under the PSSA will be improved, including a 25% reduction in premiums. Though not part of this legislation, a dental plan will be established for pensioners by Treasury Board after consultation with employees and other member representatives. It is important to have that on record in a clear and concise fashion which Canadians can and will understand.
I will talk a bit about what it means to be a survivor and what that term means. I will also talk a bit about the phrase, relationship of a conjugal nature, and the Supreme Court of Canada decision in Egan and Nesbit, a judicial ruling of which we in parliament have to take note.
Under Bill C-78 a survivor is defined as a spouse of a plan member at the time of the plan member's death, or the person living in a common law relationship with the plan member for at least one year at the time of the plan member's death.
The courts have been very clear on the issue of discrimination based on sexual orientation. They have indicated that discriminatory language must be removed. Under Bill C-78 words referring to the opposite sex have been taken out. This is in keeping with recent court decisions on the issue of providing employment related benefits to same sex partners.
A key decision in the federal court in Moore and Akerstrom directed Treasury Board as the employer to extend benefits to same sex partners in the same manner as it did to opposite sex partners living in a common law relationship. Treasury Board could not create a separate category for same sex partners because that would have the effect of perpetrating harmful stereotypes.
So it is that Bill C-78 contains neutral language which draws no distinctions between same sex partners living together and partners of the opposite sex living together, while maintaining a distinction between married spouses and individuals living in a common law relationship.
Bill C-78 strikes a balance between the courts and what they have said, what is necessary with respect to the Charter of Rights and Freedoms, and what is required to maintain the distinction between legally married spouses and two people living in a common law relationship. The definition of a survivor in Bill C-78 follows the guidance provided by the court on precisely this issue.
I elaborate further on the use of the word spouse. It is preferable from a drafting point of view to avoid cumbersome constructions such as repeating the words spouse and common law spouse in the statute. The use of the word spouse as is currently used is appropriate in the case of same sex partners as it would misrepresent their relationship as per Iacobucci in Egan and Nesbit. A term defined such as survivor in Bill C-78 keeps the drafting simple.
I want to speak as well on conjugal, the recognition of common law relationships for the purpose of survivor benefits. It has been a feature of the public service pension plans for many years. These types of relationships are also recognized in other legislation both federally and provincially such as the Income Tax Act and family law.
Generally speaking legislation does not refer to a common law relationship. As a rule legislation sets out the test that has to be met in order to establish the existence of such a relationship. It is important to highlight that the courts have provided direction by setting out the recognized elements of a common law relationship.
Factors looked at by the courts include various elements of cohabitation and conjugality such as a commitment of the two individuals to each other and financial contributions to the necessities of life, et cetera. They looked at the attitude and conduct of each of the partners toward members of their respective families, how the families behave toward the partners, and how the partners present their relationship to the community.
As well, when a word has been considered by the courts, what has been judicially said is incorporated into the meaning of the word as used in the legislation. Courts have extended the meaning of conjugal to cover individuals living in a common law relationship and more recently have extended the meaning to include same sex partners living in a common law relationship.
In Rosenberg, a decision of the Ontario Court of Appeal on provisions of the Income Tax Act dealing with the registration of pension plans, the court amended the definition of spouse which refers to a person living in a conjugal relationship with the taxpayer to include same sex partner of the taxpayer.
Provisions of Bill C-78 refer to “a relationship of a conjugal nature” in order to capture the judicial meaning of conjugal in reference to same sex partners while ensuring the bill does not go beyond what the courts have said. For these reasons it is necessary to define the word conjugal in the legislation in this manner.
From a legal point of view physical intimacy is not considered the essential element in establishing the conjugality of a relationship. Rather, from a legal point of view the courts have focused on the existence of a committed monogamous relationship in assessing whether a conjugal relationship exists. It is in keeping with Bill C-78 and provides that only one person living in a common law relationship with a plan member will be recognized at the time of the plan member's death. There are no provisions for the payment of more than one survivor benefit to more than one common law partner.
I want to look at the Supreme Court of Canada decision in Egan and Nesbit, a very important decision and one that we in the Parliament of Canada are now obliged to follow and to recognize in terms of what it represents. It is important to note that under the finding of discrimination five justices of the Supreme Court of Canada in four separate sets of reasons found that the definition of spouse infringed section 15 of the charter based on sexual orientation.
In conclusion, I note that this is a very important issue and certainly one that we as a government take very seriously. In the great scheme of things and in the great balance of fairness and equity, it is important we make sure that Bill C-78 is put in place in an effective manner in keeping with what Canadian society is all about.