Tony Ianno

[Public Sector Pension Investment Board Act, May 25th, 1999]

Mr. Speaker, today I am pleased to speak at third reading of Bill C-78. This bill ensures the long term viability of public sector pension plans and puts them on a more solid footing by introducing the investment of contributions in public markets.

Experience has shown that investments in the markets yield a better rate of return, which tends to reduce the costs of the plans. Under the current legislation investment of contributions is limited to government bonds.

Bill C-78 also establishes an investment board, independent of the government, that will be responsible for investing contributions in accordance with the interests of the participants in the plans. Its obligations and authority are set out in the bill to ensure its independence and also its accountability. The bill also contains provisions to ensure that it is an effective operation.

With regard to the investment board, it has been suggested that its directors should be appointed as the governor in council sees fit. Other parties have expressed concern that these appointments would give the government an opportunity to practise patronage. The bill provides that directors be appointed to hold office during good behaviour for a three year period. Directors' terms of office may be renewed for one additional term. The appointment process set out in the bill shows clearly that our intention is to ensure that directors are competent and independent from government.

We have been blamed for failing to include the participants in these pension plans in managing the plans. The provisions of the bill show us that such is not the case. Current and retired employees will be represented in the management of the pension plans through advisory committees that will henceforth be mandatory.

These committees are comprised of representatives of employees and retired employees. These committees will also participate in appointing the directors of the public sector investment board. They will be able to appoint a certain number of members of the nominating committee which recommends candidates for the positions of directors of the board.

During debates in the House and in the committee we were reproached for failing to consult sufficiently with stakeholders. As we have indicated, we consulted with participants and with retired employees through advisory committees on the plans for a number of years. The need to make changes was recognized by the advisory committee on the Public Service Superannuation Act in its 1996 report.

The President of the Treasury Board even established an advisory committee to arrive at an agreement on a new framework for managing and financing these plans. This committee, comprised of representatives of employees, associations of retired employees, representatives of the RCMP and the Canadian forces, met last year on a regular basis. As we know, although there has been agreement on most of the changes proposed through this bill, these consultations have stumbled over the disposition of the actual surplus in the plans. The government thus had to take the necessary decisions and move forward by proposing improvements to the financial management of the plans.

The bill also contains provisions pertaining to the management of the plans. It takes into account the interests of the participants, retired employees and the Canadian taxpayers as well. It reflects most of the elements on which we had agreed in principle.

The proposal in the bill that pertains to the disposition of the current surplus has aroused strong criticism from certain quarters. However, the public, and thus the Canadian taxpayer, supports the government's position on this question. This position is supported by court decisions as well as by the opinions of actuaries and other pension specialists. Many newspapers have also indicated their support for the government's position.

We have also been blamed for failing to make public sector pension plans subject to the Pension Benefits Standards Act. The objective of this legislation is to protect participants in employers' pension plans in areas of activity under federal jurisdiction. The Public Service Superannuation Act already provides equivalent protection to the participants in these plans.

Further to this bill, it has been contended that private sector employers would exert pressure to obtain funds from the pension plans set up for their employees. However, such cannot be the case. It would be hard to imagine provincial governments, which are responsible for employers' pension plans in areas of activity under provincial jurisdiction, allowing private sector employers to withdraw funds from the pension accounts they administer in a fiduciary capacity.

We believe that the plans as amended by this bill will be placed on a solid footing which will permit co-management once the participants are ready to assume their share of the management and risks which are a part of any pension plan. The government remains open to that possibility.

As did the President of the Treasury Board, I can reassure public service employees this bill will be advantageous to them.

[Public Sector Pension Investment Board Act, May 25th, 1999]

Mr. Speaker, it is interesting to hear the same people say the same thing time after time. They wanted six months to expand on what they have said the last few times. It is a lot of—I cannot say hot air because that is unparliamentary—but it is interesting how incensed some of the hon. members on the other side portray their concern for the employees and the unions.

It is interesting that during the committee meetings not one of them came to show their interest, their concern or their questions and to be enlightened on the legislation that is before us, as compared to showing here for the TV cameras their great concern and again, I will not say the word hot air.

[Public Sector Pension Investment Board Act, May 25th, 1999]

Mr. Speaker, it is interesting listening to the hon. member from the Reform Party talk about the taxpayers' money and the government's money. It is all one and the same.

The pension plan is guaranteed. It is a legislated plan. It is guaranteed by the government and by the people of Canada and it guarantees that the pensioners will get exactly what the pension dictates. Their 7.5% is guaranteed. Their pension is guaranteed.

In the public and private sectors, generally, 60% is contributed by the employer and 40% by the employee. This plan is now 70% employer and 30% employee. We are still giving the opportunity over a four year period, starting in 2004, that if the government, the employer, and the people of Canada believe there is not enough money in the pension plan because the actuarial evaluator determines that more money is needed, at that point the maximum that the contribution from the employee can increase is .4% per year, and only if it is determined that it is needed.

The hon. member opposite should understand what this legislation is all about. It would be nice if he had read the legislation, attended some of the committee meetings and was aware of what this bill is all about. I wonder if the hon. member understands some of the precepts in the bill, aside from just having a nice speech written by someone in his office.

[Public Sector Pension Investment Board Act, May 25th, 1999]

There they go, Mr. Speaker. Is it not something really funny when we see the Reform and the NDP joining hands? I think it is the most comical of situations.

The NDP, after working for so many years on some of the issues we have put forward, says that it wants public debate. When we were doing it in committee there was the CLC convention in Toronto so NDP members had to go there. However to pensioners and the union it says it is concerned about this issue and about the money. Where were the NDP when we were listening to the concerns of people?

If the concern is so great in the NDP, why was it not there when those people were present to state their case?

[Public Sector Pension Investment Board Act, May 25th, 1999]

Oh, come on. You guys are on the same side of the issue.

[Public Sector Pension Investment Board Act, May 25th, 1999]

Of course it does. I was talking about the member from Regina who is always talking about amalgamating with the Reform and uniting the west.

[Public Sector Pension Investment Board Act, May 25th, 1999]

Mr. Speaker, it is ironic to watch the NDP and the Reform Party being on the same side of issue after issue. They pretend they are far away but whenever it gets to extremes we can see how they are closely tied.

Once again it is ironic to see that the NDP supports many parts of the bill yet is voting against issues for which it has fought for many years. The Reform Party's whole existence is about pension reform, the economy and money to taxpayers. All of a sudden there is $30 billion that belongs to the taxpayers and it is voting against the bill. It is amazing to watch the two join hands in the true western approach.

[Public Sector Pension Investment Board Act, May 11th, 1999]

Mr. Speaker, I rise on a point of order. I know that the CLC convention was very important, but the committee was available and hearing witnesses while the member—

[Public Sector Pension Investment Board Act, April 26th, 1999]

Mr. Speaker, it is interesting to listen to the hon. member from the Bloc and his colleagues who preceded him. They believe that the investment fund, especially the Quebec pension plan, worked really well. They liked the model. Taking into account that it is a shared risk management, on that basis it would be shared by those participating in the plan.

Unfortunately the member fails to address the issue that employees now contribute 30% of the plan with a maximum 7.5% of the amount when we take into account that CPP has gone up and reduced the amount they actually contribute to the pension plan. This surplus has been created because the actuarial evaluator determines for the government how much it should put into the plan on a current year basis taking only that year into account. Had they taken the whole process into account, then the government would not have to put in extra money.

In the future plan that is being set up, the investment fund, which I know his party endorses, does the hon. member believe he should advise the unions to participate in the risk management sharing? In effect any surplus in the new plan could be shared through holidays for the employees or the employers or both on that basis. In effect the risk is also taken into account and if a deficit does occur they will also put in.

[Public Sector Pension Investment Board Act, April 26th, 1999]

Madam Speaker, it is interesting to watch the Reform members sort of stumble in this process. They realize that what we are doing is something that they probably would consider doing if they were on this side of the House. However, because they see this as good government, they have to try to find things that will go to the worst part of their being. It is unfortunate.

I have a question for my hon. colleague. It is interesting how the member for St. Albert indicated that by putting the money in the black box and not giving it back to the taxpayers or to the employees is the best route. Reformers used to idolize the debt board. They used to get up and look at it as it turned every second along the way, yet when the opportunity is here, because it is the taxpayers' money and being returned to the taxpayer, they are against that. I just do not understand how they would put Canadian taxpayers at risk by trying some cockamamie idea of placing $30 billion in a black box for some rainy day. Will the hon. member please tell me how they can deal with this hypocrisy?