Tony Ianno

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

Mr. Speaker, it is interesting how my hon. colleague puts on his sleeve what his real concern is.

Reform members are confused. They came here talking about their concern for the taxpayers and their money. This is a great opportunity for the member opposite to deal with this issue. However, because of the fear that somehow or other we might get credit for defending the taxpayers and their money, members of his party are unfortunately trying to find themselves once again, even though we know there is the united alternative, which some in his party want to kill.

There are many issues that come to this table. The member realizes that it is taxpayers' money, but he is trying to figure out where we can take this money. He stated earlier that it is taxpayers' money. It is not the government's money, it is the taxpayers' money. Yet he wants to take that money and put it into some safe somewhere and say “Do not give it to the government. Do not give it to the employees”, because it is not for the employees, but somehow it should stay there because some time in the future there might be a deficit. Is that not interesting?

Canadians want their money back now. They want to know that the government is guaranteeing the pensions of its employees, and it is doing that. However, if there is excess money in a surplus, they want their money back, so that in effect they can have all of the services that they need and require, including receiving tax back, if necessary, on the issues at hand.

The hon. member stated that the Canadian taxpayers paid for the surplus and they are entitled to their money. Does he believe they should get it back? If not, what does he recommend we tell Canadian taxpayers that is different from what he has stated in the last several years?

[Division No. 386, April 26th, 1999]

Madam Speaker, we know the NDP's track record when it comes to finances. It left a $10 billion deficit in Ontario and in B.C. with its abysmal record on finances. Once again its members do not understand the basic elements.

I wonder if the hon. member overheard that somewhere. It is interesting that when the facts are on the table the member feels awkward. Only when he hears it from comments will he then respond appropriately.

The government has paid the surplus. That is why there is a surplus and that is what we are dealing with.

[Division No. 386, April 26th, 1999]

Madam Speaker, it is interesting that even within the same party the knowledge of this bill is different from the front to the back.

He stated that somehow employees contributed to the surplus, to the $30 billion process. They contributed, but the number nowhere nears the amount the government contributed, taking into account that the government always had to put in the extra money which the actuarial evaluator determined and taking into account that the CPP kept increasing to the point where it was 70% from the employer and 30% from the employee.

The hon. member indicated that he would have liked another six months of discussion. That is the reason for time allocation. Otherwise, if we had the views of the hon. members opposite, the discussion would have continued for another six months, which would not have changed the facts that we have before us today.

The President of the Treasury Board has been open minded. That is important. As we stated, the offer may not be on the table directly, but the unions can participate in the discussion with respect to the surplus and the new investment fund that is being set up by this bill. Unfortunately the unions have balked at that. They want the surpluses, but they do not necessarily want to participate in the potential deficits that may exist in the future. It is one sided.

The hon. member says that the Canadian taxpayer is double taxed. I think with the track record of the Bloc that is something which is far-reaching.

[Division No. 386, April 26th, 1999]

Madam Speaker, it is nice to hear the Reform Party complaining about a debt or a deficit going down. It is an interesting reversal.

As we have stated many times, and I know the hon. member agrees, the surplus was created by the government putting into the legislated plan the amount of money which an actuarial evaluator determined was required each year to ensure that enough money was available to pay for the service. Unfortunately, because of the way the legislation was written, we cannot take the whole plan into account even when there is a surplus and determine that the government put in less money.

Also, taking into account that CPP premiums have been going up and the percentage of employee contributions was maximized at 7.5%, which became less of a percentage overall, that meant that the government had to continue putting more money in to satisfy the needs of the pension plan on a current year basis.

It is important that the government correct this difference so that all Canadians are treated fairly. I know that the hon. member would want that. Taking into account what this would do for Canadians at large is an important step. We take into account the added moneys the government put into the plan to ensure that the actuarial evaluator was satisfied. Even though it was more than the government needed to put in, it will allow the government to deal with its finances and to ensure that the needs of Canadians with respect to health care and all other needs are met. We have to ensure that we are not paying the $42 billion interest payments per year solely for that, which I know my hon. colleagues in the NDP and the Bloc are concerned about.

The hon. member is correct in stating that the $2.5 billion will be a benefit to Canadian taxpayers. That money will be available to put into the programs that we all care about, such as child poverty and homelessness. Unfortunately the NDP is making sure that its union friends are protected in this process. They too know, as other pension groups know, that this money belongs to Canadian taxpayers. We on this side of the House want to ensure that all Canadians benefit from the money that Canadian taxpayers pay.

[Division No. 386, April 26th, 1999]

Madam Speaker, last week the government tabled legislation that set out the first major improvements to the public service pension plans in more than 30 years. The legislation aims to ensure the long term sustainability of Canadian public service pension plans, improve the financial management of the pension funds, and upgrade the benefits currently offered to government employees.

I rise today to express my support for Bill C-78 and to underline more particularly its beneficial provisions on the management of public pension plan surpluses and deficits.

Under existing legislation the government assumes responsibility for deficits in the pension accounts but is not entitled to manage existing surpluses. Obviously this is an anomaly that must be corrected.

Also under the present system when projections show an account to be holding more than necessary to meet the future obligations, both the employer and the employees must nevertheless continue to contribute to the accounts as legislated. This provision means that surpluses can thus continue to exist and even grow indefinitely.

For private pension plans, however, the Income Tax Act sets a limit at which a growing surplus must be managed according to specified terms; but this is not the case for public service pension plans. This has become an issue of very real importance since 1991. In 1991 surpluses started to accumulate in the three federal government superannuation plans. They now total some $30 billion.

These surpluses show the difference between the balances of the accounts and the amounts estimated by the actuaries needed to actually pay for all future benefits earned to date by plan members. It makes no sense to keep forcing the Canadian taxpayer to credit ever growing employer contributions to pension plans that continue to generate a surplus far in excess of the needs of plan members and what the Income Tax Act allows for other plans.

As the President of the Treasury Board said earlier the government wants to be fair to government employees, but we would not be acting fairly toward other Canadians if we were to give federal public servants financial advantages that were not available to all. Bill C-78 will provide the government with the authority and mechanism for managing pension surpluses in a manner consistent with the rules for registered pension plans as set out by the Income Tax Act.

The management of the surpluses raises another issue. Who has the ownership of the $30 billion surplus? Canadian taxpayers have always assumed the risk of the public service pension plans since their creation in 1964, and these are not empty words. Since 1964 Canadian taxpayers have poured into the government employee pension plans $13 billion to cover for deficits. Since the government has carried the full load of the risks in all those years, it is only fair that we would also be responsible for any surplus.

The present surpluses would gradually be reduced to the allowable level over a period of up to 15 years. The amounts will be debited over the chosen period so that at the end of the period the remaining surplus or excesses is at most no greater than 10% of the estimated liabilities. This 10% cushion is in line with Income Tax Act maximums that apply to all pension plans in Canada.

Bill C-78 will also permit Treasury Board ministers to determine the use of any future surpluses. They could decide to institute a contribution holiday for plan members, the employer or both, or to withdraw all or part of the surplus. Surpluses could also be used to improve benefits though this would require special legislation.

It should be noted that the government would continue to assume all financial risks for the public service pension plans and to be solely responsible for making extra contributions to cover any future account deficit. This is a further argument in favour of giving the government responsibility for managing an eventual surplus.

Under the legislation now before us, before deciding what to do with an eventual surplus the Treasury Board would consult with the ministers responsible for the three pension plans and with those responsible for the financial management of the plans. As the President of the Treasury Board noted, the same principle will be applied in the case of the new Canada Post pension plan structure which will also take effect on October 1, 2000.

Any future surplus in the CPC pension plan will be managed by Canada Post which has responsibility for all the risks and management of the fund.

This surplus could be used to reduce contributions or to further enhance benefits, or a combination of the two. As previously announced, Canada Post will be meeting and discussing the pension plan with all bargaining agents over the coming weeks and months.

Since the government first announced its intention to take responsibility for future pension plan surpluses it has been accused in some quarters of acting unilaterally without due regard for the opinion and interests of pension plan holders. In fact the government did not move earlier on this issue precisely because it was hoping to reach agreement with plan members on a new joint management framework for the future of pensions.

Thorough consultations have been held in the seven years since 1992 on this subject between the Treasury Board and employee representatives.

In November 1992 the President of the Treasury Board asked his advisory committee for the public service pension plan to conduct a review of the fundamental elements of the plan, including its management and financing. The committee reported to the president in December 1996.

After studying the report in February 1998, the President of the Treasury Board announced the start of a consultative process with employees and pensioners aimed at developing a package to reform the public service plan. Among other things this consultative committee was offered to negotiate an agreement on sharing the risks of the pension plans that would allow our employees to share surpluses in the future.

The committee met from February to December 1998 and, though significant progress was made on the issue of future deficit and surplus sharing, discussions broke down last December. Despite the fact that employees have not shared the cost of past deficits, their representatives insisted on receiving a significant share of the accumulated surplus.

As I explained previously, since the government has carried the full load of the risks in the past, it is our view that we would also be responsible for any surplus. Even though the employer offered joint management and significant improvements to our employee pension plans, the offer was deemed insufficient by employee representatives.

Faced with this impasse, after having consulted for several years with employee and pensioner representatives, the government decided to move ahead simply because it could not afford to wait any longer. By delaying indefinitely the necessary changes that are being proposed today the government would have in fact created an even more intractable position for all concerned.

I believe it would have also shirked its responsibility to all Canadian taxpayers if it did not act to put public service pension plans on a better financial footing, as well as modernizing and improving their administration.

Hon. members should recall, however, that the President of the Treasury Board, on behalf of the government, stated on more than one occasion that the door remained open for future negotiations on the management of pension plan deficits and surpluses. So far, far from being insensitive to the preoccupation of public service pension holders, I think the minister has shown himself to be very open-minded in his approach to this question. We should applaud his willingness to reopen discussions at the opportune time in the best interests of all parties.

I too hope very much that employee representatives will soon resume discussions on a joint management plan for our public pension plans.

I urge all hon. members of the House to support the proposed amendments to the public service superannuation acts. I believe they are fair to our employees and fair to the Canadian taxpayer and that they will bring about much needed and overdue changes to government pension plans.

[Division No. 386, April 26th, 1999]

Madam Speaker, it is nice to see the amalgamation and the marriage of the united left. The Bloc and the NDP have sort of the same mindset.

I have a question for the hon. member. He did not understand the difference between shared risk and shared management. Taking into account the $30 billion surplus, the government is responsible for the deficit or the surplus. It is unfortunate that in his whole presentation we were not able to understand the premise of his argument.

Would he like to try to explain to the House what he meant, taking into account he was not aware of the shared risk management concept?

[Division No. 386, April 26th, 1999]

Madam Speaker, I have a question for the hon. member. Is the Quebec government pension plan a shared risk, shared management plan?

[Public Sector Pension Investment Board, April 22nd, 1999]

Mr. Speaker, it is amazing how the NDP uses information. I am glad you understood what I was getting at when I could not find a word for “untrue” because that is not parliamentary language.

Nevertheless, in the legislation, as the minister stated earlier in his remarks, 7.5% is the number and it is not changing.

Having said that, I am curious if the hon. member believes that it is not important to get the best return for seniors, that it is not important to maximize their numbers. All he cares about is ensuring that the money is invested on a very “good feel approach”, as compared to seniors' concerns. Once they have worked and contributed to a pension plan, they want to be assured that it is there, and the government continues to assure them that that is the case.

On the other side of the coin, we want to ensure that we have the best possible management to get the best rate of return, so that, in effect, the taxpayers of Canada will not have to invest as much and will still give the pensioners their guaranteed amount.

Does the hon. member believe that the rate of return is not important to seniors and pensioners?

[Public Sector Pension Investment Board, April 22nd, 1999]

Mr. Speaker, it is interesting to hear the hon. member give examples that are not relevant and do not have the same pension plan description.

I am sure the hon. member knows that this is a legislated plan that is guaranteed by the government so that all employees and retired persons will receive a pension regardless of the economic situation.

If there were to be a deficit, the government would have to guarantee it, as it did at the time of the $8 billion deficit. Does the hon. member think it should be shared risk? Should the union participate in the new plan so that, in effect, if there is a surplus it can benefit by it and if there is a deficit it will contribute toward it? Right now it is the Canadian taxpayers who guarantee public service pensions to ensure that people receive the kind of income that has been guaranteed for 50 years.

[Public Service Of Canada, April 16th, 1999]

Mr. Speaker, as the hon. member knows, the Government of Canada accepts all applications from wherever they live from coast to coast to coast.

On this specific item, I will take it under advisement and look into it.