Marcel Massé

[Pensions, April 23rd, 1999]

Mr. Speaker, we are not setting a precedent; we are merely following the law.

We have a legislative plan where all the benefits are guaranteed to the employees. We are not only guaranteeing the benefits to the employees in terms of their pension plans but we are increasing these benefits.

Over the years it has only been the taxpayers who have shared the risk and who have paid for it. When the plan was indexed there was an additional liability of $8 billion. Every cent of it was paid for by taxpayers, so there is no doubt, no legal doubt and no accounting doubt, that the surplus belongs to Canadian taxpayers.

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

moved that Bill C-78, an act to establish the Public Sector Pension Investment Board, to amend the Public Service Superannuation Act, the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act, the Defence Services Pension Continuation Act, the Royal Canadian Mounted Police Pension Continuation Act, the Members of Parliament Retiring Allowances Act and the Canada Post Corporation Act and to make a consequential amendment to another act, be read the second time and referred to a committee.

Mr. Speaker, I regret that the introduction of Bill C-78 was delayed by motions. This legislation is so important that it should be considered a top priority.

Bill C-78 introduces the first major amendments to public service pension plans in over 30 years. These amendments are critical to the survival of these plans as we know them.

Let me first address my comments to those who benefit from these plans, that is current and past government employees, because many false statements have been made regarding the technical changes that our government is proposing to our employees' pension plans.

First, all the benefits for which our employees made contributions during their career will be fully guaranteed and maintained. Not only will these benefits be fully guaranteed and maintained, they will even be improved.

Therefore, current and past federal public service employees need not worry about the future, because it is precisely to preserve the financial future of these pension plans that the government decided to act.

The technical changes submitted to the approval of this House are based on our government's concern to ensure fairness to Canadian taxpayers, but also to our current and past employees. The existing public service pension plans were established some 50 years ago and they clearly must be adjusted to the new realities.

Let me explain. When the Canada pension plan was established it was agreed with our employees that their annual contributions to the public service plan and to the Canada pension plan combined would not increase over the percentage of their wages that they were then paying, which was 7.5% of their salaries.

The original contribution rate of employees to the CPP has risen over time from 1.8% in 1966 to 3.5% today. The CPP rate, as agreed by the federal government and the provinces together, will climb by 2003 to 4.95% of the wages and salaries.

However, each time our employees contribution rate to the CPP increases their contribution to the government's pension fund decreases since their total contribution cannot exceed 7.5% of their wages. Historically the government and its employees shared pension plan costs on a 60:40 ratio. With the increase in CPP premiums this proportion has gradually changed to 70:30 and it will be 80:20 in 2003 if we do not act now.

Members would no doubt suggest that the government could simply increase contributions, reduce benefits or let the pension funds accumulate shortfalls even if the benefits of the pension plans were eventually reduced. To all of these options the proper answer is no, and that is the whole reason for Bill C-78.

The three acts that govern the government's pension funds restrict contributions to the ceiling of 7.5% of earnings, prohibit the reduction of benefits, and require the government to cover all annual shortfalls in its pension plans.

Is it fair for federal employees to enjoy both the guarantee of always paying the same percentage of premiums and the guarantee of benefits that will never be reduced while Canadian taxpayers are constantly assured of paying a bigger and bigger share of the pension plan of government employees, as well as funding any shortfalls? The government does not think so.

We must not forget that, ultimately, the government represents taxpayers who, in addition to having to save up for their own retirement, must also assume the costs of federal public servants' pension plans.

It is neither right nor fair that taxpayers are having to save up more and more for their own retirement, when public servants are contributing less and less. Fairness to our employees cannot take precedence over the fairness we owe Canadian taxpayers.

In recent years, public service, RCMP and National Defence services pension plans have built up a surplus of approximately $30 billion. Regardless of what employee unions think, this money belongs to Canadian taxpayers.

Over the years, it is taxpayers who have absorbed all the deficits run up by government employee pension plans. It is taxpayers who have therefore assumed all the risks while our employees rested easy in the knowledge that their retirement was looked after.

The existing legislation provides for mechanisms to manage pension plan deficits, but none for accumulated surpluses. In other words, the existing legislation accounts for surpluses, but the government, and therefore taxpayers, must assume all deficits.

Bill C-78 will address surpluses and deficits alike, and will provide for mechanisms to dispose of future surpluses. Existing surpluses will gradually be reduced to an acceptable level over a period of up to 15 years.

People may wonder how we propose to dispose of any surpluses in the future. As things now stand—and this is what the bill provides for right now—Treasury Board will decide how these surpluses will be used.

However, if representatives of present and retired employees were to agree to share the risks with Canadian taxpayers, we are completely prepared to co-manage and therefore to share any future surplus.

We could, for example, decide together to give a contributions holiday to plan participants, or to the employer, or both, or to withdraw all or part of the surplus.

Bill C-78 will ensure the long term financial stability of our employees' pension funds. To that end, it will create a public sector pension investment board, which will be responsible for investing future employer and employee contributions in the stock market.

At present, contributions are used only to purchase government savings bonds. In future, their investment in diversified portfolios will give a better yield and thus will make it possible to offer a better guarantee for the future, to limit the increase in costs, and eventually to improve benefits.

For example, a 1% improvement in the long term performance of the public service plan could reduce its overall costs by 15% to 20%. This new public sector pension investment board will be completely independent of the government and of plan participants. It will therefore be totally free in its investment decisions, having the sole objective of maximizing the holdings of the public sector pension fund.

Many other public pension funds in the country already make market investments. This new provision will enable more Canadian businesses access to a new source of financing.

This should be of the utmost interest to our employees. If the return on the investments which I just mentioned is lower than expected, employees would receive the same level of pension to which they had contributed during their careers, including 100% inflation protection. The government guarantees the integrity of the benefits of our employee pension funds and will continue to cover the shortfalls.

Bill C-78 is part of an overall plan. It re-establishes fairness between taxpayers and our employees in the funding of the pension plans. It strengthens the long term sustainability of the plans and will attempt to reduce the costs for all members.

For its part, Bill C-71, the budget implementation act, proposes improvements to the Public Service Superannuation Act, the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act.

Pension benefits will be calculated in the future using the average of the best five consecutive years of earnings rather than the best six consecutive years, as in the current plan, applying a five year average of the year's maximum pensionable earnings to calculate the CPP/QPP related reduction, rather than using the current three year average. In short, the government will increase employee pensions while freezing contributions to the employee plan for at least four years.

Bill C-78 also includes a series of technical changes to improve the benefits linked to federal employee pension plans. It will reduce the contribution rate of the supplementary death benefit plan, the government's group life insurance program, and increase the paid-up benefit amount. It will reduce by 25% the contribution rate of employees who contribute at the rate of five cents per month for every $250 of coverage. It will double to $10,000 the benefit to eligible employees having already reached age 65 and it will extend eligibility for paid-up benefits and delay the onset of coverage reduction.

All of these improvements will be made possible by a $1 billion surplus in the supplementary death benefits account, due in part to increased life expectancies.

Bill C-78 will also award survivor benefits to same-sex spouses who apply for them. The applicable criteria will be the same as for common-law spouses.

The bill would do away with Treasury Board's discretionary power in relation to survivor benefits and will set criteria for eligibility for benefits.

The Government of Canada would thus be bringing its pension plans into line with those of the governments of Nova Scotia, British Columbia, Ontario, New Brunswick and Saskatchewan. We would also be in compliance with a number of recent decisions by courts favouring the granting of benefits to same sex partners.

These provisions would also apply to members' pensions. These changes will increase the number of people entitled to survivor's benefits under the terms of the three major pension plans to some 50 new beneficiaries a year.

Bill C-78 will also finally establish a separate pension plan for Canada Post employees. It makes sense for Canada Post to manage its own pension plan, as all major employers do.

The plan would come into effect on October 1, 2000 and would reflect the reform to the Public Service Superannuation Act. The value of past service for pension purposes will be totally protected. Employee benefits will be the same as under the Public Service Superannuation Act.

The terms of the plan would be negotiable under the terms of the Canada Labour Code after one year of activity. The negotiations would not affect benefits accumulated to date. However, in negotiations held after October 1, 2001, Canada Post and its employees' bargaining agents could negotiate change as they wish.

For the plan to be self-sufficient, future contributions by employees and the Corporation would be invested in the market in accordance with the Pensions Benefits Standards Regulations. Canada Post could set up an independent investment office to oversee investments. Under the bill, the Canada Post Corporation should also establish a life insurance program similar to the supplementary death benefit plan.

Canada Post retirees will also be happy to learn that Canada Post intends to established a shared cost voluntary dental plan, which would cover their survivors and eligible dependants.

I want to assure members of the House that these measures are in no way an indication of plans to privatize Canada Post. Separate pension plans already exist for other crown corporations, such as the CBC and the Canada Mortgage and Housing Corporation. These plans have not been privatized, nor will they be.

I am convinced that our proposed technical amendments to the three public service pension plans are realistic and fair. They will be beneficial to all of the stakeholders, namely, our employees, the government and ultimately Canadian taxpayers. Some people will blame us for having acted unilaterally in determining these major changes to our employees' pension plans. However, we have to remind the House that we have consulted with our partners over many months on the challenges that I have just described, but unfortunately we were unable to reach an agreement on the necessary reforms.

The time to act is long overdue. The action we are taking is being taken in a spirit of fairness, both toward our employees and toward all Canadian taxpayers. As I have tried to show in the past few minutes, this bill will modernize and improve the public service pension plans.

I am proud of our public servants and the work which they do on behalf of all Canadians. I am convinced that the majority of them believe we are acting to protect their future retirement.

Lastly, I hope that all members of the House will support the government and will vote in favour of Bill C-78.

[Bilingualism, April 21st, 1999]

Mr. Speaker, the National Research Centre informs us, since they are the ones doing this, that what they need in these positions, in this unit, is four people.

Of the four, three are designated bilingual because the requirements of the position demand bilingualism, while one position is designated anglophone because the requirements of the position demand that the person speak English.

[Public Service Commission, April 20th, 1999]

Mr. Speaker, the Public Service Commission does not discriminate in terms of jobs. However it has rules for its own competitions. Some of these rules, which have been judged to be quite constitutional by the supreme court, reduce the cost of these competitions.

These are the rules that are in question. The Public Service Commission intends to put these rules into effect, provided that they are not discriminatory, and we are told they are not.

[Disasters, April 12th, 1999]

Mr. Speaker, last week, we sent Quebec a cheque of $175 million, for the damage incurred and for the compensation paid out to the population by the Government of Quebec.

As regards the ice storm, we have so far made advance payments of $250 million to the Government of Quebec and these payments could reach $400 million in the months to come.

[Pay Equity, March 25th, 1999]

Mr. Speaker, not only is the government in favour of pay equity, but it is the one that proclaimed it and the one that wrote it into Canadian legislation. The government has already paid out more than $1 billion for pay equity.

Our experts are clear, however: the human rights tribunal is wrong in its judgment. We have filed an appeal, as unions do when they believe the courts to be wrong, and we have to wait for a ruling by experts in the field in order to find out what portion the Canadian public really needs to pay.

[Division No. 358, March 23rd, 1999]

In the public interest, Mr. Speaker, the government must exercise its responsibilities with concern both for the principles that underline healthy labour relations and for sound management of the country's affairs. This is a delicate balance that pits respect for a bargaining process we believe in against the need to ensure the common good.

The dispute between the employer and the correctional group is of a different nature and represents a particularly worrisome threat to public safety.

Without an agreement on the number of correctional officers necessary to maintain order in federal institutions, the government can no longer ensure the safety of both inmates and employees working in these institutions.

The government has the obligation to protect the safety of the public, but I would also like to stress the moral obligation of the union with regard to the common good and the protection of Canadians. This is why this legislation must be implemented even if we have reached an agreement with the negotiators.

With the agreement we have with the negotiators, while it ensures that if it is ratified the situation is solved, we cannot say that at present and the only way to prevent the strikes from affecting the movement of grain is to pass this law.

[Division No. 358, March 23rd, 1999]

Mr. Speaker, if there has been an agreement it does not mean that it will be ratified, unfortunately. That means that there has been an agreement at the level of the negotiators and if we want to stop the strikes, if we want to ensure the movement of grain, we have to pass this law. Ratification may take a number of weeks. It may be rejected by the workers. What we want to stop is the movements that have been taken by the strikers in blocking the movement of grain. I am sure farmers in the west understand that situation.

The Canadian Wheat Board has revealed that it has lost sales worth millions of dollars because the delivery of the grain could not be ensured. At present, unless the law is passed the delivery of grain cannot be ensured.

If parliament does not authorize the government to force workers back to work, we might lose further contracts abroad.

This in turn would cause job losses in Canada, and tarnish our international reputation in a world where prosperity depends on foreign trade.

Increased tensions on the picket lines have resulted on occasion—

[Division No. 358, March 23rd, 1999]

Mr. Speaker, in Vancouver harbour, scores of ships are sitting idle, waiting to be loaded, which translates into expenses in the millions of dollars in each case. The impact of this situation on western farmers is very serious, since they can no longer move their grain to foreign markets. Farmers cannot afford such losses and bear the negative consequences of the strike any longer.

The situation is so serious that the president of the Saskatchewan Wheat Pool, the biggest farmers co-operative in the country asked—

[Division No. 358, March 23rd, 1999]

I am extremely pleased to report to the House this evening that as of just a few hours ago and with much effort on the part of the government and union negotiators, we have reached a tentative agreement for striking blue collar workers.

I think this agreement in principle is fair and generous. I have always said that negotiation was our preferred solution, and I have the proof in my hand. Our determination to act in the interests of taxpayers, while respecting the interests of our employees, has borne fruit.

This last-minute agreement must not, however, sidetrack us from the reasons we are sitting at such a late hour. Canadians throughout the country have been the victims of rotating strikes by PSAC members for ten weeks now. Not only do the effects of these strikes concern the government but they were the subject of an emergency debate in the House last week.

This agreement in principle does not guarantee that the strikes will end. Union members can ratify or reject this agreement. That is the price to be paid for respecting the right to strike, a democratic right that is part of the collective bargaining process.

A responsible government cannot, however, wait for the decision of union members and we must therefore continue our efforts to ensure Canadians the return to the normal federal government services provided by blue collar workers and the maintenance of those services provided by correctional officers in Canadian penitentiaries.

In recent months, the Treasury Board Secretariat has signed numerous collective agreements with over 87% of its employees. The Government of Canada has shown on many occasions, including this evening, that it respects the collective bargaining process. This evening, the government is asking parliament to force its 14,000 blue collar workers to go back to work and to accept a collective agreement.

We are also asking parliament to adopt measures that might be necessary to ensure that the some 4,500 correctional officers remain at work and resume negotiating as soon as possible.

We want to avoid a strike and the absence of functional correctional services, which would pose a threat to the safety of inmates and Canadians.

The decision to request parliament's authorization to impose special legislation was not made impulsively. In fact, it is an agreement that will allow us to ensure the operation and maintenance of government buildings and of health services in federal institutions.

After 10 weeks, the impact of these walkouts on Canadians and on government operations is being felt.

Canadians as much as the government can no longer accept that passenger travel continues to be disrupted in the country's airports. We cannot accept either that tax and GST collections have become so much more difficult. This House should know that one million taxpayers will experience delays in their tax refunds because of these strikes.

Put simply, many low income families and many small businesses will have to wait for the refunds to which they are entitled and for which they have an urgent need.

This is not to mention the most vulnerable in our society who, every year, rely on the free services provided by Revenue Canada's tax clinics. The rotating strikes have prevented many Canadians from having access to these services.

The operations of national defence, the coast guard and public works have been considerably disrupted by picket lines and the withdrawal of services by these workers.

The strike also affects our grain exports, thus threatening an important sector of the Canadian economy, and also our international trade relations. In the port of Vancouver, dozens of ships are waiting to be loaded—