moved that Bill C-37, an act to amend the Parliament of Canada Act and the Members of Parliament Retirement Allowances Act be read the second time and referred to a committee of the whole.
Mr. Speaker, I am pleased to speak today to Bill C-37, an act to amend the Parliament of Canada Act, and the Members of Parliament Retirement Allowances Act, which I had the honour to introduce in the House earlier today.
The bill provides for the correction of an anomaly in legislation that was passed in 1995, which, as we all remember, ended double dipping with respect to severances. However, it should be noted that it responds to concerns expressed by various members. It is a non-partisan bill that should be welcomed by all of us in the House.
I will explain why the current situation is unfair. It is unfair to over 100 MPs who are under the age of 55 and who have been shortchanged as a result of pension changes made in 1995.
The 1995 legislation provided for a severance allowance of six months salary to MPs under 55 who entered the pension plan after July 1995. However, an MP elected before July 1995 does not receive any severance because the MP gets a small pension for contributions made before July of that year. In the case of some members, that pension is as low as $1,400 a year, and that $1,400 stipend—because that is all it is—in fact prevents people from having any kind of severance, and of course those members, were they to cease to be members of this place, are not even eligible for unemployment insurance. We would not tolerate that of a private sector employer, certainly not one of the size of the Canadian government.
This situation has created two groups, almost two classes of MPs. MPs under 55 who were elected after 1995 get a severance allowance, while those elected before that date get no severance. For example, an MP under age 55 who was elected in 1993 would receive an annual pension of $5,600 a year and no severance. In one case, as I said, this could be as low as $1,400. There are actually two MPs in that situation. This pension would increase to $21,000 when the MP in question reaches 55.
Need I remind all of us that the pension is not free. People pay premiums, and the premiums, even by many standards, are quite high; $7,000 to $8,000 or, in the case of ministers, as much as $10,000 a year in premiums on the pension plan. That amount is subtracted from what one is usually entitled to contribute to a retirement savings plan, so that is not free either because other investment opportunities are also denied.
An MP who was elected in 1997 and retires after six years would receive a severance allowance equal to six months' salary, or $34,000 a year, and at age 55 would receive the full pension that one gets after six years. Of course one only gets the real full pension after 19 years of being a member of parliament, another fact not too well know, particularly by those who want to portray members of parliament in an unkind way.
The bill we are addressing today remedies the injustice to which I have referred, in the present pay arrangements, by providing a reasonable severance allowance for all MPs.
Those under the age of 55 who were elected prior to July 1995 and belong to the MPs' pension plan will receive an allowance equal to six months salary, at the time they leave their position, less any immediate annual annuity. Thus, the allowance and the pension are not combined. The one is subtracted from the other, and MPs may only receive the difference between the two.
Members under the age of 55 who were elected after 1995 will continue to receive the allowance of six months salary after six years of service.
In both cases, the allowance would not exceed six months salary after six years of service. So, it remains the same for both groups, with the amendment I am suggesting today.
As a result, this change does not affect members under 55 elected in 1997, as I said earlier. Nor does it affect members who have opted out of the pension scheme, because they will continue to receive the six month allowance when they leave their position.
The severance allowance proposed in the bill is reasonable. It is comparable to severance allowances provided to provincial parliamentarians. As a matter of fact, it is even less generous than what is offered in a number of Ontario provincial legislatures. It is not that high either when one compares allowances in the private sector, in particular large private sector concerns. Of course none of them are as large as the federal government, but in many medium size sectors their executives and people in higher echelons have severance packages that are far more generous. Even the municipalities have quite generous severance packages, as we have noted from reports in the media, for those who are leaving their services.
Providing all MPs with a severance allowance is also appropriate because MPs do not have access, as most people do, to unemployment insurance to support their families while they are looking for another job. Again that is something that is not too well publicized. I suspect there has been more than one case of someone leaving this high office only to find out that there were no benefits at all, not even a transition, not even unemployment insurance that every worker would get.
By the way, Mr. Speaker, in case you are wondering, yes we do pay unemployment insurance premiums even though we cannot collect. We certainly pay Canada pension plan premiums even though technically we do not receive a salary, we receive an emolument.
Let us consider the example of a former MP, a 45 year old parent of two who is eligible for a full pension at 55. I think it is perfectly legitimate for that person to receive a six months severance package to enable him or her to find another job and to try to earn a living.
I also believe that the House should be regarded and should function in such a way as to attract people from all walks of life.
At the risk of boring members with details that I have shared with the House before, I obviously did not come here from a family that was very wealthy. As a matter of fact, I came from the bottom rungs of the ladders of parliament. I started here as a busboy. I was the child of a sole support parent. I had not even completed my high school education, as members of the House now know from subsequent educational training that I have received and which did get considerable attention in this place, for which I am grateful.
The one thing that remains true is that I do not object to the fact that very wealthy people have rights if they are elected to serve in this parliament. What I am saying is that serving in the House should not be contingent upon being wealthy. People who have families and who earn regular salaries, people who come from all walks of life, should have the right to participate in the process and to seek to hold this high office in a way where they know that the day they leave here, they can go home and at least provide for their families and provide for a transition to either going back to what they were doing or to finding something else to do for a living.
It was only a few weeks ago that a report was published and got considerable media attention. The report said that it was getting to be more and more difficult to attract candidates for public office and particularly to sit in the House of Commons.
I am sure that has always been true. There are vast distances for many people to travel. There is, of course, the sacrifice of office with which we are all familiar. We do not complain about it generally. It is there and it is part of the job, but just the same I believe the climate should be conducive to attracting people to become members of parliament and to want to sit in this place to represent their fellow citizens in the highest court of the land, the Parliament of Canada.
The 1998 Blais commission report on MP compensation stated:
Departing members are entitled to a relatively financially secure transition from parliament to the work force or to retirement as the case may be.
That was the Blais commission reminding us that someday we all will leave here and that it should not be a sinecure nor an experience to make one rich, but it should not be the way to the poor house either.
This transition is provided to MPs under the age of 55, and not only to MPs elected after 1995, which was the case until this bill came along. Now it will be available to everybody.
The second provision of the bill is that it provides that all members of parliament will become members of the MP pension plan as of the date the bill comes into force. This is consistent with the view that the MP pension plan is a reasonable plan for members of parliament. The Blais commission said that the MP pension plan “while appearing generous, is not necessarily out of line with public and private sector plans that recognize the impact of the mid-career hire aspect of the career path of their senior executives”.
The bill also gives MPs who have opted out of the pension plan the choice to opt into the plan retroactive to the date of their election. In other words, now that we have the bill it will be possible for someone who was not in the plan to buy back their years of service. Again, this is very logical and I commend it to the House.
It is the same for an MP who served in a previous parliament, left this place and then came back some seven, eight, ten years later. That MP would have the right to buy back previous service. Why should we give that right to someone who sat here 10 or 15 years ago and deny it to MPs sitting in the House today? MPs sitting in the House today should be given the same opportunity to buy back that service. I believe that to be totally logical and I believe the opposite would be illogical.
MPs do not have to buy back previous service, but then again neither do members who served in a previous parliament who have returned and who must contribute to the pension plan. They are not forced to buy back previous service either. Again, it is consistent with what we are doing for others.
This also provides, in a way, a transition to participation in the pension plan. If an MP—and of course we all will, effective immediately—contributes to the pension plan, that does not make an MP who was elected in 1993 eligible for a partial pension now unless the member buys back his or her previous service. The member who does not do so would only be partially pensionable in 2006, two terms from now. Furthermore, those who do not buy back previous service would only have a full pension in 2019. That is 19 years from now. In fact, it is a form of phase-in back into the pension plan.
Those who do not opt back in retroactive to the date of their election would continue to receive the supplementary severance allowance which we passed in 1998. That is only fair. Of course, MPs who decide to opt back into the plan to the date of their election will have to reimburse their contributions retroactively to the date of their election. Again this is consistent with the case of an MP who previously served in parliament some years ago and is returning to the House of Commons.
I would like to cite a passage from an article by Claude Picher, which appeared in La Presse two weeks ago:
But, generally speaking, it is clear that the salaries of Canadian politicians are in no way commensurate with their responsibilities....In reality, given what we expect of our elected officials, there is no comparison between their salaries and what they would be paid for doing a comparable job in the private sector.
Whether or not we agree with Mr. Picher, I think we would all agree that our system of pay should put all members on an equal footing. This is not presently the case. It will be with this bill. Right now, some members receive severance pay when they leave, and others do not.
This bill, which is designed to correct an unfair situation in the current compensation package, responds to concerns expressed by many MPs in the House.
This place is not supposed to be government of the rich, by the rich, for the rich; it is supposed to be government where all Canadians can expect to be represented by one of their own, if that is their wish. That is the case as it applies to political orientation.
Many people in the House, of course, disagree profoundly on political issues, and that is perfectly legitimate. However, it should also apply to people of various socio-economic levels. I believe that correcting these anomalies will make it such that it will make parliament work better because it will assist in attracting good candidates for the future.
The way the motion to discuss this bill is structured makes it possible to have a recorded division at the end of the debate. I am going to make a plea to colleagues. I have nothing to gain in this personally, as everyone will know. I have been a member for a long, long time. None of these changes apply to me. I would ask my colleagues to rise above the temptation that there would be to embarrass one another as we are passing a bill like this. It is easy to do. It is very hard to undo afterward. It is a temptation that some of us might have from time to time.
If we think of who we want to sit in the House in the future, not just the next term of office but maybe two or three terms down the road when my children and grandchildren decide whether they want to seek office to see if they too could participate in directing this very fine country and democracy, I hope they will be able to do so whether they are well off, which I hope they will be, or whether they start off at the other end of the socio-economic ladder, as I did.
Our country will be better served if we rise above some temptations that we might have, particularly in these times that are no doubt challenging for some of us.
In closing, the argument I wish to make to the House this evening is that we will all come out of this experience perhaps slightly better people, having ensured that the legislation will be better for Canadians, especially those who wish to represent their fellow citizens in the highest court in the land, the Parliament of Canada.
I want to conclude by saying that the bill corrects initially that mistake which I have described, that glitch in the system whereby some MPs had a severance package and some did not. It fixes that.
The second thing that it does is obviously to make everyone contribute and be part of the pension plan for members of parliament.
I have said consistently in the past that it was wrong to be out of the system. It was wrong to be out of the pension plan. It is just like getting the benefits of a collective agreement or anything else. It is a group plan. If I said in the past that it was wrong to be out of the plan and I am consistent, I have to say that it is right to be back in the plan. That is why there is criticism of people who not only will be back in the plan, because we all will, but criticism of people who will join again. Even purchasing their retroactivity portion would be wrong, because joining the plan is the right thing to do. That is what I think, and I have to be consistent with my thoughts, otherwise it would not be correct or appropriate.
Just as some colleagues in the House before might have denounced me when they thought that my view of the pension plan was incorrect, I have to stand in solidarity with others who now think that the plan is correct. Again, that is only logic and easy for all of us to understand.
With all this in mind, I commend the bill to the House. I think it is good. I think it is right. I think it corrects historical wrongs. I think it will contribute to making this parliament in a small way a better institution than it is already. I hope that the bill will be even greater if it passes with the unanimous support of all colleagues in the House.