Madam Speaker, I am delighted to rise to debate Bill C-37 at third reading. It is a matter of great concern to me and has been for some time.
I want to mention that the hon. member for Cypress Hills—Grasslands suggested during his remarks that the bill represented a carcass which is being dug up for the third time by a dog. He asked me to correct the record on his behalf and suggest that it was a herd of pigs which was digging up this carcass for the third time, or hogs as the case may be.
This is a serious matter and it rests with a very basic principle that ought to govern our affairs, the simple principle of fairness.
It is fairly well known in these environs that I have a long, outspoken record on this issue as former president of the Canadian Taxpayers Federation. The hon. member for Pictou—Antigonish—Guysborough earlier suggested that in fact it was the reform party that was responsible for making issues, such as extraordinarily generous parliamentary perks and pensions, issues in the past. No. I think that citizens advocacy organizations, such as the Canadian Taxpayers Federation, can take the lion's share of the credit for having amplified public concern about the double standard to which parliamentarians here and in the provincial legislatures had begun to treat themselves through the 1980s.
Let us just revisit the history because we have heard various comments from various shrill members of the regional fringe party to my extreme left, the fifth party. We have heard all sorts of huing and crying this evening about the parliamentary pension plan. In that process, I have not heard a single word of contrition or humility from that party which was reduced to two seats, in large part because of the overstuffed attitude and arrogance of its former government, which was typified by its unrelenting defence of a then platinum-plated pension plan that provided pensions of $6.50 for every dollar provided by the parliamentarian.
Those members seemed to have remembered everything but to have learned nothing from their experience in government. One of the things they seem to have forgotten is that Canadians were disgusted with the party that refused to accept the simple principle of fairness. I have heard them stand in this place all night long and criticize this party and Canadians for wanting a fair pension plan that operates on a self-funding, dollar for dollar, actuarially sound basis.
The history of this is that before the early 1970s there was no pension remuneration for members of parliament. I hear some defenders of the status quo ante often say that if we do not provide super rich benefits far in addition to what one could expect in the private sector, that we will not be able to attract high calibre parliamentarians.
I think most Canadians would suspect that before the days of great largesse, in the 1940s, 1950s and 1960s, before the gold-plated pension plan was introduced, we had some pretty sound public servants working in this Chamber on behalf of Canadians. To suggest that these benefits, at the levels introduced in the 1980s, are necessary to attract talent, I think is rather specious. In fact, there seems to be a direct inverse relationship between the generosity of pension benefits and the quality of members of parliament.
It was in the early 1980s that the then Liberal government introduced a pension plan with a 5% accrual rate at its maximum generosity. It was shortly thereafter that we had nearly 200 Tory members of parliament in this place, supposedly attracted by that generous benefit, who decided to double the country's national debt, double federal spending, increase taxes 72 times and help bring about the longest and most painful recession in post-depression history. Boy, did we not get our money's worth by juicing up those benefits to attract those Tories to this place, benefits for which they still shamelessly apologize?
I am proud to say that members of the former Reform Party stood on principle in the lead-up to the 1993 election and thereafter by the principle of fairness when they said, as we do today in the Canadian Alliance, that members of parliament and public servants ought not to be given access to benefits, pensions or remuneration that is any more generous than what is available to ordinary working Canadians. That is a very simple principle. It ought not to be difficult to understand but it seems to be for the regional party on my extreme left.
I want to point out that what the Canadian Alliance policy stands for is to allow an independent commission to determine the compensation for members of parliament so that it removes us from this intolerable conflict in which we are placed every time a bill such as this is brought before the House of Commons.
In fact, we see that virtually every province has undergone a major overhaul of their compensation packages for MLAs, MPPs, MNAs and so forth. For instance, the provinces of Saskatchewan, Manitoba, British Columbia, Ontario and, I believe, New Brunswick have all trashed their old, gold-plated, unfunded, actuarially unsound, taxpayer subsidized pension plans and replaced them with what our party has long advocated, which is a simple dollar for dollar, actuarially sound, money purchase style pension plan, the kind of plan available to all Canadians.
What does the current plan do that this legislation maintains? It creates and perpetuates a defined benefit pension plan that provides for benefits far in excess of what the MP contributions plus matching government contributions could possibly fund. It is a recipe for an unfunded, future liability, otherwise known as a taxpayer IOU, an IOU which will be picked up by future taxpayers. How does it do this? It does this because it has in it a 4% benefit accrual rate.
The members of the regional party on my left do not seem to understand how this pension operates. In fact, I heard the member for Pictou—Antigonish—Guysborough completely disingenuously and shamelessly suggest that the one time severance package brought in in the last legislation was somehow comparable to the generous benefits under the current pension plan before us this evening. That is totally facetious and completely inaccurate.
This is a 4% benefit accrual rate. What does that mean? That is a technical term, so let me explain it. The Income Tax Act of Canada has certain limits for what constitute registered pension plans. Registered pension plans are those to which contributions by employers and employees are tax deductible. There is a certain maximum that the Income Tax Act creates in terms of the generosity for registered pension plans. The maximum benefit accrual rate under the Income Tax Act is 2%. This is a 4% plan. In other words, the benefits are twice as rich as the income tax allows.
The Tories love it. We hear them rushing to the defence of that system. Fortunately, because of the efforts of my colleagues in this party and the Reform Party in the last parliament, the benefits were slightly modified from a 5% accrual rate to a 4% accrual rate and certain other peripheral changes occurred, such as an increase of the age of vesting to 55 and a certain restriction on the practice known as double dipping.
By and large, this plan is not an actuarially sound plan. It is a plan that is available to fewer than 2% of Canadians. In fact, it is so extraordinarily generous that the government in this legislation must actually go outside of the Income Tax Act to top up the contributions that are not tax deductible. This is essentially twice as generous as the average defined benefit plan available to Canadians in the private sector.