Madam Speaker, I rise to address the House today on Bill C-201, which proposes to amend the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act. I would like to focus my remarks today primarily on how the changes would affect the RCMP.
Let me begin by saying that I have a tremendous respect for the people who serve this country in uniform. In the House, on the public safety committee, in my riding of Wild Rose and, indeed, on every occasion that I can, I work hard to advocate for the people in law enforcement and to understand and address their needs and concerns. The record will certainly show this.
I fully support them in the great job that they do and join with all Canadians in giving them the respect and support they deserve. I have always been a vocal champion of the RCMP and nothing will ever change my steadfast support for the men and women who proudly wear the Mountie uniform in the service of Canada.
It is therefore important to note that Bill C-201 has nothing to do with how we value the work of the RCMP or that of our brave men and women of the Canadian armed forces. Bill C-201 simply proposes to eliminate the reduction in pensions to retired members of the RCMP and Canadian Forces once they begin receiving Canada pension plan benefits normally at the age of 65.
Some retirees argue that this is a clawback and that they are being denied benefits that they have paid for throughout their careers, but this is simply not the case.
I want to assure the House that retired RCMP officers are in fact receiving the full pension benefits to which they are entitled based on their plan design and the contributions they have made. No money is being clawed back. Statements that retired members paid full contributions to both the CPP and their employer-sponsored pension plan are factually incorrect.
This is a complicated issue, but the problem appears to lie in a basic misunderstanding of how the RCMP pension contributions and benefits are calculated.
When the Canada pension plan was introduced in 1966, most Canadian employers, including the federal government, decided to integrate their pension plans with the CPP rather than stacking the two plans. Integration ensures that retirees would have an acceptable level of retirement income without the burden of paying full contributions to both plans throughout their working lives.
For members of the RCMP, as well as Canadian Forces personnel and other federal employees, this means paying a reduced contribution rate on the portion of their salary that is subject to CPP contributions and with reduced contributions comes reduced benefits. It is that simple.
At age 65, the normal age at which CPP retirement pensions are payable, or earlier if CPP disability benefits are received, the bridge pension paid to former RCMP members from the time they retire to when they become eligible for the CPP is eliminated. In most cases, the total pension income available to a retiree after age 65 is essentially unchanged. The only difference is that the income is now received from two sources rather than the previous one source. It is coming now from the employer-sponsored pension plan and the CPP.
By proposing that the bridge pension be made a lifetime benefit, Bill C-201 would fundamentally change the design of the plan with prohibitive long-term financial implications. Adopting these proposed amendments for all RCMP pensioners would increase the past service liability for the RCMP pension plan by more than $1 billion and would result in additional ongoing costs of tens of millions of dollars per year.
I would remind all hon. members that the RCMP pension plan is the smallest of the three federal plans. The Canadian Forces pension plan would incur a one-time past service liability of several billion dollars if Bill C-201 becomes law and ongoing costs would certainly approach around $100 million per year. The legislation is silent on how this increase in liabilities would be paid.
These costs cannot be borne by the taxpayer alone, so the only other solution is to increase pension contribution rates for working members of the RCMP and Canadian Forces. Pension contributions would then jump by as much as 30% for current and future plan members. There is no evidence to suggest that current working members would agree to such an increase.
Again, the potential costs of such a measure are sobering. Converting the bridge benefit to a lifetime benefit for all members of the Public Service Pension Plan could cost the government three and a half times more than the cost of providing this change to both the RCMP and the Canadian Forces pension plans.
All members of the RCMP on their retirement are provided with an estimate of how much their RCMP pension will change when they turn 65 and start receiving CPP benefits. Moreover, the RCMP has gone to great lengths to make sure its employees are aware of how their pension plan is integrated with the CPP through written explanations and pension newsletters and bulletins, through information provided on websites and through the annual benefit statements sent to all pensioners and serving members.
The pensions paid to retired RCMP officers and military personnel are already generous by Canadian standards, and the level of taxpayer support for them is certainly substantial.
I have the utmost respect for the great work that our men and women in uniform perform on behalf of all Canadians. They are the people who keep our communities safe and secure, even at the risk of their own lives. Therefore, if there are other ways to recognize the contributions to Canadians and to Canada without taking on an enormous financial burden, I would be most pleased to consider them.
