Mr. Speaker, the hon. member for Sackville—Eastern Shore proposes restoring Bill C-201 to its original form, introduced last year after debate here in the House and lengthy consideration by the Standing Committee on Veterans Affairs. Nothing has changed since the standing committee agreed to remove the proposed clauses. There are some issues that do deserve discussion, and the disability issue is one. However, as for the rest of it, I am sorry. I cannot support the hon. member's motions for the same reasons as before.
This does not take away from the deep respect and immense admiration we have for the Canadian Forces and the RCMP. I am proud of my own service and my comrades, and I am just as proud of the men and women in uniform today. These military personnel and their families make many sacrifices and, in return, the Government of Canada must take care of them. The Canadian Forces pension plan is there to look after our veterans. The system is flexible and generous, which is exactly what the Canadian Forces members deserve.
In 1966, members of the Canadian Forces were paying 6% of their salaries into their pension plan or CFSA. When the Canada pension plan was integrated with the CFSA, as were all other public service pension plans, CF members continued to pay 6% of their salaries into pension benefits. The only change was that 1.8% now went to CPP and 4.2% went to CFSA.
Upon retirement, a member receives 2% of his or her best five-year average salary per year or partial year of service. The member pays 25% of the cost of that pension and the public pays the other 75%.
Members of the CF typically retire well before age 65. When they collect their CFSA upon retirement, it consists of two parts. The larger part, approximately 70%, is the lifetime benefit. That is the amount from CFSA the member will continue to receive until he or she dies. The smaller part, approximately 30%, is termed the bridge benefit and serves to bridge the pensioner's income at the full 2% per year of service until age 65 when most people start collecting CPP.
At age 65, having done its job, the bridge benefit ceases. In most cases, the amount of CPP that commences will be at least equal to the amount of the bridge benefit that ceases, thus giving the pensioner a consistent income flow throughout retirement years. That is the way it is designed. That is the way it works.
This will not be the case, though, under two circumstances. If the member does not earn taxable income between CF retirement age and age 65, he or she will not have contributed to CPP for that period. In that case, the amount of CPP eligibility will be less and it will likely be less than the bridge benefit that ceases at 65. In most cases, working or not working is a decision the member makes.
Canadians can draw CPP as early as age 60, with a reduction of .5% per month before age 65. If someone took it at age 60, his or her total reduction would be 30%. That is the reduced amount, plus indexing, that the pensioner will receive from CPP for the rest of his or her life. A CF pensioner taking CPP at age 60 will, in effect, be receiving both the bridge benefit and CPP for that five-year period. That is a good thing, but he or she must be prepared for a reduction in overall benefit when the bridge benefit ceases at age 65.
I will repeat, those are the only cases where a person is liable to receive less from CPP than he or she is getting from the bridge benefit. The total pension benefit continues to be indexed and the decision to take CPP early rests with the member.
CFSA and CPP are working exactly as set up and paid for, and they provide for a consistent indexed level of retirement income for CF members and RCMP. The essence of the argument in Bill C-201 is that CF and RCMP pensioners should be able to collect both the bridge benefit and CPP beyond age 65. This would amount to stacking the CFSA lifetime and bridge benefits and CPP, amounting to approximately a 30% increase, even though we have not paid for a stacked pension plan. It is as simple as that.
The cost to implement Bill C-201, and my hon. colleague mentioned part of it, would be prohibitive, with a one-time cost, according to the Office of the Superintendent of Financial Institutions, of $7 billion and annual costs of $110 million, and increasing. Plan members and Canadian taxpayers would have to bear the burden of the increase in future contributions.
Are plan members prepared for additional deductions in pay? A soldier making $50,000 a year would see an increased annual pay deduction of $1,000. Would it be fair to ask taxpayers to pay the increase? The government has a responsibility to our service members, but we also have a responsibility to Canadian taxpayers to carefully manage the money they entrust to us.
Proponents of Bill C-201 suggest that the annual cost of implementation could be covered by diverting CF members' EI contributions. Annual EI contributions by CF members amount to $54 million per year, which covers less than half the annual cost. In addition, approximately 3,000 CF members use EI benefits every year for maternity leave and parental leave, and those important benefits would be denied. We care too much about our military families to do that.
Our government has acted. With the Budget Implementation Act 2006, the government approved an amendment that changed the calculation of the lifetime benefit in the recipient's favour. Therefore, the dollar amount reduced at age 65 will be less, resulting in an increased long-term pension benefit.
The very well organized advocates of Bill C-201 propose a number of what are essentially red herrings. They point to the lack of consultation and input by CF members in 1966. The CF is not a union and does not get to vote on pay and benefits. The leadership of the CF makes decisions for the members on their behalf, and that is not going to change.
There is no doubt that communication of the changes was sporadic at best, but since then, efforts have been made to inform our veterans and plan members and answer their questions. There is a website, informative publications, a 1-800 number and briefings upon approaching retirement. Ultimately, plan members are responsible for learning about and understanding their respective pay and benefits.
Some suggest that MPs have exempted themselves from what they call a clawback of the bridge benefit. I am glad the member did not bring it up, but it is on all of the websites. MPs come and go at all ages and do not collect their pensions until age 55, unlike CF members who can collect pensions years earlier. MPs do not collect any bridge benefit from or to any age; therefore, there is simply nothing to claw back. Being an easy target is part of the life of an MP, but it is simply intentionally misleading in this case.
Many point to petitions, as my hon. colleague did, signed by 100,000 or 125,000 people in support of Bill C-201. Anybody will sign a petition that holds an implied promise of more money. I do not suggest that anybody signed in bad faith; they have simply been misled. I have spoken to many former CF colleagues who knew the issue was bogus but signed anyway. Why not? While there are many former senior officers who have signed the petition, there are a great many more who have not signed. These include many former chiefs of the defence staff and leaders who are acknowledged as being strong supporters of the troops. They know it is simply not a legitimate issue.
The last time we debated the bill, I received hundreds of angry emails and phone calls, and I expect there will be more to come. Some send me their CFSA statements pointing out that at age 65, their CFSA would be reduced by x dollars per month and that they would lose indexing on that amount. What they do not send me is their CPP statement that says they will receive x dollars per month and that it will be indexed.
Some propose emotional arguments about how members of the CF have served and sacrificed themselves and their families. That is true, and I can attest to that from personal experience. Canadians respect that sacrifice and are grateful for it, but Canadians serve voluntarily. They are well paid, well treated and get excellent trades training and experience for future employment. I can also attest personally to the relevance and the generosity of the Canadian Forces superannuation plan, and retirement benefits are generous by any contemporary standard. The CF and RCMP plans are set up exactly the same way as all other public service pension plans and most other defined benefit pension plans, such as teachers plans. Where would the dominoes stop and at what cost if the bill were to be implemented?
With respect to our pension plan, our benefit is based on our investment. Members are receiving the full benefit from that investment and the pension plan is working the way it was intended.
Our government has taken our obligations to our veterans very seriously. We have implemented a veterans' bill of rights, veterans' charter and veterans' ombudsman, brought in pension income splitting and many other tax benefits for seniors, addressed the agent orange and atomic vets issues and a host of other points. In fact, we have invested about $2.1 billion more on our veterans than the previous Liberal administration did.
While we have done much for veterans and serving members, there will always be more to do and more to be considered. The disability issue is in fact a legitimate issue, and one that should be discussed, but it is lumped in with the majority of folks, the 96,000 that my colleague talked about, that have nothing to do with that issue.
Unfortunately, spending an inordinate amount of time on things like Bill C-201 distracts from examining those issues. It is a difficult issue for many, there is no doubt. I can tell hon. members it is no fun being the poster boy with my face on legion dart boards across the country.
We have all had to make tough decisions in our lives and careers and we all try to make them in the most honest and informed way possible.
As I said at the beginning, nothing has changed. Notwithstanding all of our respect and gratitude for our veterans, the bill is simply unrealistic, not founded on fact and unfortunately we cannot support it.