Mr. Speaker, I am pleased to respond to the legislation introduced today by the government on behalf of pensioners and future pensioners currently employed in the armed forces in the defence of our country and in the many other functions our armed forces personnel are required to fulfill these days.
I have a considerable interest in the matter of pensions. Some people will remember that on one occasion I took part in a philosophical debate about how pensions could be improved but unfortunately the timing was wrong. It made some interesting headlines in the newspapers, and we received a bit of flak about it.
Whether we are talking about Canadian pensioners at large, members of the armed forces, members of the RCMP or whomever, my interest is primarily and solely to improve the benefits and the fairness of the benefits received by people who work on our behalf.
We probably are not aware of the debt of gratitude we owe to our armed forces personnel as much as we should be. In my mind they are very special people. Not only have they chosen a career in the armed forces in the defence of either our civil or international liberties, they are willing, if necessary, to put their lives on the line on behalf of others as well. That is something which most of us do not think of often enough or deeply enough.
It is important to recognize that our armed forces personnel are serving in peacekeeping missions abroad in places like Afghanistan and others trying to improve the situation for people around the world as well as preserving our rights and freedoms in our country. These people occasionally live in very high risk situations. The fact that they are willing to do that makes them special people. We should pay particular attention to ensuring that they and their families are adequately and properly looked after when they reach retirement age, or heaven forbid, if they have some calamity in their lives requiring those benefits to be paid out before they reach that age.
I would like to commend the government for most of what is contained in Bill C-37, and the House may find that surprising. It is usually considered that the opposition's role is to oppose, and indeed it is. We oppose those things which are wrong. By the same token, our party is a party which is based on principle, and I am very proud of that fact. We are not here just for political reasons. We want to promote the principles that are good for our country.
Bill C-37 would improve the superannuation and retirement conditions for our armed services personnel. It is an improvement, and therefore I cannot, on that principle, oppose it. I agree with it because we need to make these improvements.
One very important change is one which strikes at some work that I did in my riding on behalf of several individuals who were with the armed forces and then for various reasons were asked to leave. The Canadian armed forces was reducing its personnel due to cutbacks and these individuals received a buyout which was fair according to the rules at the time but which was scarcely defensible. Then they were asked to return to the forces and continue serving in the capacity in which they were trained.
These individuals came to my office and said that little exercise had cut them out of their pension. I could not believe it. We tried to go to bat for them and very frankly did not have success in that case. The regulations were very clear. Once having been in the armed forces, if they quit for whatever reason, there was a final deal on the pension. It was a payout, or a transfer or whatever, and they could not buy back in. These individuals were, if I may be permitted to use a slightly unparliamentary term, shafted. They were not given a fair deal and it was not possible to correct it. I still feel badly about that.
I do not know whether the bill will serve retroactively to correct that error. I rather doubt it. However this is one of the issues which is addressed in Bill C-37 and it is one of the items I would like to include in my list of things for which I want to commend the government. No longer does it talk about continuous service to earn pension, but it talks about years of pensionable service, so if it is interrupted the member does not take a hit. I can only say, in a mild but sincere way, kudos to the government for recognizing that flaw and for repairing it. This is probably the most important feature of Bill C-37 and I wanted to talk about that first.
The second thing the government has included in this bill, with which I agree, is it gives access to armed forces personnel to their deferred pension benefits. This is a very common situation when people retire or they are pushed out of their positions early, often because of injury or other factors. The bill will give them access to pension benefits all the way down to age 50.
I do not know whether members are aware of this fact, but when one does this, actuarially the pension is reduced, which sometimes puts these people under some duress financially. However I really do not know any other way that that can be done. It would not be right to have one person who serves until age 60 or age 65 receive no more pension for the years of pensionable service left than the person who has been collecting pension since age 50. Actuarially reducing the pension is fair and we have to live with that. That is provided for in the bill and it is a very good situation.
Some people in the armed forces choose to retire early. In some cases it is a combination. Some individuals get into positions of extremely high stress and they really need to get out because of that stress they have had to endure. Even though they are not asked to retire, some of them recognize that their effectiveness in the armed forces is being diminished because of the toll the stress has taken on them over the years.
I commend the government for making these provisions available to members of the armed forces. I have not had a chance to read the bill in its entirety unfortunately, but I believe that those provisions, or at least some variation of them, are also being made available in this bill to the RCMP. That is another area where we have had presentations or representations from people who say that due to the very nature of the job, it is really unrealistic to expect them to work for 45 years before they reach retirement age, say from age 20 to age 65.
The RCMP also has made representation to all members of Parliament and have asked if its members could, for the sake of for example the Canada pension plan, make a one-third greater contribution to it to enable them to receive full benefits at age 55 instead of 65. Therefore there would be an additional contribution rate in proportion to the time that they have paid in.
Of course I had some discussions with them. I have this slight mathematical bent which I have difficulty turning off. I pointed out to them that even though they were asking for the contributions to be increased in proportion to the time the contributions would be made in fewer years, they failed to take into account the actuarial fact that the pension was now paid out for many more years, assuming that their age of death was about the same as if they would have kept on working to age 65. In fact if the stress relief provided by retiring early actually worked, they would probably live longer, actuarially speaking. Therefore one has to take those things into account as well.
However I still support that measure. Canadians benefit greatly by the work of our peacekeepers in our country, our police forces, and we ought to have that ready for them on behalf of taxpayers. I know I would much rather spend my money on providing decent benefits for our armed forces personnel and our RCMP officers than I would spending it in the many ways that the government wastes money.
For example, I would much rather put $1 billion into the RCMP and armed forces pension fund than I would to have them register duck hunters who go hunting in fall. Absurdities like that are very obnoxious to Canadian people at large, especially to the people who work in the defence of peace in our country. We ought to really be thinking about that.
The next element I would like to refer to briefly is the element of portability. I really think we have a lot of work, in total, on the portability of pension plans. This is true in the domestic world as well as for our armed forces.
A person who works for 20 years in one business, or who works for 20 years in the armed forces, should not be a slave to staying in that position simply because if they leave they lose any pension benefits they have accumulated. I would like to see full and total portability. I would like to see that among industries. I would like to see that among schools and colleges, for people in my profession. It is outrageous that people can lose their benefits and be forced to simply take a payout.
I do not know if members are aware of this but in most contributory pension benefit plans the contribution rates are usually matched by the employer.
This actually happened to me when I taught high school math for four years, when I was a youngster. When I left that to go to the college, I had a choice. I could either transfer it, which at that time was a gift because it was not to be included to make any greater benefits for myself, or I could take back the contributions I had made, forgoing the ones that were made on my behalf by the employer. This is true for armed forces personnel as well.
I am very pleased the bill addresses that issue. It states that if a person who has been serving in the armed forces for more than two years and leaves the position, the pension benefits they have earned are portable. That is a very good provision. At that stage, under the Income Tax Act, they can move it into an RRSP or they can transfer it to another pension plan if they go to another employer, specifically one in the government. In other words, they can transfer that pension benefit over and carry it over in the next plan.
It is my understanding the bill does that. If my understanding is right, then that is a positive step and I need to commend the government for it.