Pat Martin

[Public Sector Pension Investment Board Act, May 13th, 1999]

moved:

Motion No. 50

That Bill C-78, in Clause 198, be amended by deleting lines 39 to 46 on page 180 and lines 1 to 38 on page 181.

Motion No. 52

That Bill C-78, in Clause 199, be amended by replacing lines 18 to 46 on page 185 and lines 1 to 17 on page 187 with the following:

“29.4 If, following the laying before Parliament of an actuarial valuation report pursuant to section 45 that relates to the state of the Public Service Pension Fund there is, in the Minister's opinion, a surplus in that Fund, the Minister shall use the surplus to improve the benefits of the pensioners who are members of the plan or their survivors.”

[Public Sector Pension Investment Board Act, May 13th, 1999]

moved:

Motion No. 42

That Bill C-78, in Clause 151, be amended by deleting lines 31 to 48 on page 129 and lines 1 to 27 on page 130.

Motion No. 44

That Bill C-78, in Clause 152, be amended by replacing lines 16 to 45 on page 134 and lines 1 to 11 on page 136 with the following:

“55.4 If, following the laying before Parliament of an actuarial valuation report pursuant to section 45 that relates to the state of the Public Service Pension Fund there is, in the Minister's opinion, a surplus in that Fund, the Minister shall use the surplus to improve the benefits of the pensioners who are members of the plan or their survivors.”

[Public Sector Pension Investment Board Act, May 13th, 1999]

moved:

Motion No. 36

That Bill C-78, in Clause 96, be amended by replacing lines 30 to 47 on page 79 and lines 1 to 28 on page 81 with the following:

“44.4 If, following the laying before Parliament of an actuarial valuation report pursuant to section 45 that relates to the state of the Public Service Pension Fund there is, in the Minister's opinion, a surplus in that Fund, the Minister shall use the surplus to improve the benefits of the pensioners who are members of the plan or their survivors.”

[Public Sector Pension Investment Board Act, May 13th, 1999]

moved:

Motion No. 34

That Bill C-78, in Clause 95, be amended by deleting lines 20 to 44 on page 75 and lines 1 to 18 on page 76.

[Division No. 425, May 13th, 1999]

Mr. Speaker, I am glad to have a chance to join in the last dwindling minutes of the debate on Bill C-78.

As those in the House realize, in the last hour we have seen closure moved yet again. We are not going to have an opportunity to go into the bill in nearly the depth that it certainly warrants. This is getting to be a real pattern. We have heard speaker after speaker comment on the fact that it is getting to be far too easy for the government to use closure and time allocation. They used to be very rare occurrences, but they are being used more and more frequently. Every time it meets the Liberals' expedient needs they have no qualms whatsoever about doing this.

This whole bill had its origins in a failure of the government to be able to negotiate a settlement with the unions and with the bargaining agents who have control over the pension plans. Now it is failing to use the democratic process to achieve its means.

I have always been of the mind that if your ideas have merit, they should be able to stand up to fair and honest debate and you will win the arguments. If the ideas come from a point of view that has more merits than the other arguments, then what would you be afraid of? The only time you should run from a free and open debate is when you know there is not a great deal of substance on your side of the argument. Then you have to take actions which I consider to be cowardly and circumvent the democratic process.

We are dealing with the amendments in Group No. 3. We have spoken to Group Nos. 1 and 2. Group No. 3 gets into some of the minutiae and detail dealing with the governance of this new public sector pension investment fund. This in itself could take up months and months of debate because a lot of things have been left unresolved in the bill as it stands.

We are going to have a 12 person board governing hundreds of billions of dollars of investment being openly invested in the free market. We have not really scratched the surface as to what impact that is going to have on the financial community.

Where are we going to invest this money? What kind of brokerage fees are we going to pay? What are the brokerage fees on a $100 billion being invested and reinvested every day? I have heard estimates that it might be $500 million to $700 million a year in brokerage fees.

What firm are we going to use to convey these transactions? What is the risk or the possibility of conflict of interest if we are going to be wielding that kind of clout financially? If there are 12 people on this board who is to say they do not have some remote relationship with one investment firm or another? Do they sit on another board of directors as well as the public sector pension investment fund? The conflict of interest possibilities are enormous. We should have dealt with that at great length and very carefully before we jumped into this whole idea.

We will be voting in favour of Motion No. 16 which was put forward by the Reform Party. It deals with the fact that the minister under this bill has enormous powers moved into his camp, things that used to be resolved in the House of Commons. The minister can now arbitrarily make changes to the rates of contribution to the pension fund. This is something that the House of Commons used to do. It used to have to be tabled here and be debated here.

It is also a breach of trust. I do not think it is unparliamentary to say it is a breach of trust. There has been a longstanding pact between the bargaining agents for the public sector unions and the government that if they took pensions off the bargaining table at negotiating time, the trade-off would be that they would never ever unilaterally alter the terms and conditions of the plan without bringing it to the House and without debate, et cetera.

The Liberals said they would not do it. That hearkens back to the early 1960s and Walter Gordon, and maybe the current Prime Minister was part of that caucus. Those are the people who made the deal back then. There is a historical record with this labour pact that this would not happen.

Now they are instituting the very thing they promised they would never do. They are incorporating it into Bill C-78. The minister will unilaterally and arbitrarily alter the terms and conditions of the public sector pension plan because it is given that that right will in fact be his under this bill. Motion No. 16 seeks to remedy this one flaw of the many flaws in Bill C-78.

We cannot talk about this bill without talking about the public sector in general. We all know this bill will take the $30 billion surplus and all future surpluses out of the public sector pension plans. I have said this before, but to deduct something from a person's paycheque for a specific purpose and then to use it for something entirely different is at best a breach of trust. I could go further with the worst case but I will not say what it could be if I really took it to its logical conclusion.

What will the impact be on the public sector when it finally sinks in? In the fullness of time when seniors, pensioners and retirees have had a chance to look through Bill C-78, these 200 pages of verbiage, what will the effect be on the public sector and the people paying into the plan? It will be another dent in the morale of the public sector.

Productivity is the big buzzword these days. The Minister of Finance, the Minister of Human Resources Development, the Minister of Industry, all they want to talk about is the productivity in the workforce. I can tell the House something about productivity and morale in the public sector.

Public servants have had blow after blow after blow to their morale and I would argue to their productivity or their ability to function. It used to be that if people took a job in the public sector they would probably take less money than in the private sector, but they could feel good about a couple of things.

They had a pretty good idea that some job security was associated with it. They probably had some comfort there. That went out the window when the government started cutting, hacking and slashing the public sector. There were 50,000 employees out on the street with no job security anymore. That protective umbrella is a thing of the past. They did not have the job security but they were making an okay wage. Then there were six years of wage freezes. Six years without a wage increase and they fell way behind the private sector. If they started out on par, they fell way behind.

There are 50,000 fewer people to do the same amount of work. The work does not go away. They are working harder and their wages are frozen. They can barely function because the government has taken out that whole middle band of skilled people, but they can still take some comfort in the fact that they have a pretty good pension. That gets used against them at the bargaining table. The employer says, “Yes we are paying you less money, but you have this great pension”. Now for the unkindest cut of all, the government is going after that too.

What else is there to feel good about working in the public sector with all these things being chipped away bit by bit until now when morale has never been lower, when any kind of pact that might have existed in the post-war years between labour and management is gone? It is eradicated. The deal has been broken. It has been violated. I would argue that we are looking at real chronic long term problems in the public sector and this is one more example.

I want to come back to the idea of the motions in Group No. 3 of dealing with this massive fund, the public sector pension investment fund. That is a lot of power, $100 billion. Twelve individuals from all walks of life, ordinary Canadians will be the trustees of this enormous fund.

There will be no joint labour-management trusteeship as with most pension funds I have had any dealings with. Most employee benefit plans have some kind of joint labour-management trusteeship. Then at least the employees or the beneficiaries of the plan have some say in how these things are invested and directed. This bill calls for none of that and there is no opportunity for them to take part in the governance of the plan.

There are no stipulations about what kind of investments will be acceptable. We are arguing through some of our amendments that it should be an ethical investment fund at the very least. We do not need to take less money to have an ethical investment fund. Frankly the ethical investment plans in the private sector are doing as well or better than the conventional financial instruments.

We had a couple of stipulations. We wanted to make sure that no investments made by this fund would be involved in any environmental degradation. I think that is pretty safe. Most Canadians would not want their pension plan polluting Lake Ontario.

We do not want the pension plan investing in any industry that uses child labour or follows labour laws that are substandard or do not match Canadian standards. Most Canadians would agree with that. No Canadian has any appetite for the economic exploitation of children. Why do we not have an ethical plan that stipulates these things? What about tobacco? Do we want a pension fund that invests in tobacco and is pushing smoking on our kids? No.

The plan falls short in any stipulation of ethical investments. Many of the motions in Group No. 3 are very valuable and we look forward to voting on them later.

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

Mr. Speaker, thank you for that ruling.

I have said from day one that Bill C-78 is an extremely complicated bill that has profound and precedent setting public policy implications. The debate we have heard in the last hour and the amendments we have been debating point out that this bill is not only about the pension plan or the new public sector pension investment board, it goes far beyond that. The government, in a cynical way I would argue, has tried to introduce the concept of same sex spousal benefits. That is something I am personally in favour of and have lobbied long and hard for, but the government slipped it in with another package which makes it very difficult for people who are interested in both issues. They are finding a bit of a contradiction in terms of being able to support the bill.

One member of our caucus has dedicated half of his life to fight for same sex benefits and all of those rights and he is being put in the uncomfortable position of having to vote against this bill because he is so obviously against the financial aspects of it.

Some of the debate we have heard dealing with the group 2 amendments mystifies me because we are hearing from a group of people who seem to feel somehow that by giving rights to one group of people that will diminish their rights, as if rights were a finite pie and if one group has too many they are going to have to take less. I disagree with that point of view. It has always been my position that if we give full rights to everyone, all of our rights are enhanced, not diminished.

I am very concerned that many of the amendments in group 2 find their origins in some not too thinly veiled homophobia. I am not comfortable at all with some of the things that we have heard in this room today. I wish people would take a more generous point of view.

However, some of the issues that were raised are quite legitimate. Using the word conjugal as the test for cohabitation, or whether one will be able to give survivor's benefits to another person, has to be looked at a lot more seriously. We will not have time to do that. I will have three or four minutes to speak about it and then I presume the House leader on the other side will come rushing in to move closure on the debate and the whole thing will be put to bed, if you will excuse the pun.

I do not think conjugal is any kind of a test. There are other living arrangements that come up from time to time when people cohabit and do not have a conjugal relationship and we should be able to assign survivor's benefits to that partner as well, whether it is to a brother or a sister who might share the same home and so on. There are many aspects to it that we need to investigate. Again it is sad that we will not have time to debate properly this important, precedent setting public policy issue.

Had the government come in through the front door, honestly, with a bill dealing with the thorny issue which has been surfacing year after year of same sex benefits, we could have had an honest debate and really dealt with it in the way that it deserves to be dealt with.

I spoke about seniors groups. One of the groups that was most disappointed about closure and not having an opportunity to deal with this at committee properly was the largest group of retirees and senior citizens involved with the public sector, the federal superannuates national association.

That group was notified the night before the committee hearing. It represents hundreds of thousands of superannuates. The night before it was to appear it was given the 200 page tome. Even the clerk of the committee, when he gave me my copy of Bill C-78, said it was weighty tome. Those were the terms he used. We could hardly lift it. It is the size of the Manhattan phone book. Those people had 12 hours to prepare their remarks on behalf of all of the people they represent.

The parliamentary secretary thinks there was adequate time. The whole committee, on the Liberal side at least, made it clear that they did not really need to hear a lot of witnesses; two or three unions maybe, two or three actuaries and a couple of people involved in public sector pension plans would be adequate for this huge, precedent setting piece of legislation. I cannot say strongly enough how much I disagree.

We did not get a chance to go into some of the jurisprudence involved with public sector pension plans which are silent on the issue of what to do with a surplus. We never got a chance to wrestle with that issue or even to look at recent cases.

One example comes to mind, that being when Ontario Hydro wanted to take a contribution holiday because it had a surplus and CUPE, the union representing the workers, to its credit, took Ontario Hydro to court. The courts backed up the union's position that the employer did not have an exclusive right to the surplus of the plan, even it is a defined benefit plan. The money, in this case, was split evenly. The employer received some money and some of the money went to increase benefits. That kind of an equitable settlement, whether by arbitration or by some court ruling, is something that would have satisfied the people involved in this case.

One of the amendments that has been put forward argues quite capably that the government should live up to its own legislation, which would be the federal Pension Benefits Standards Act. Under that act any plans operating under federal jurisdiction would require two-thirds of the members of the plan to vote in favour of using any of the pension surplus for anything at all. The government's own bill, which recently received royal assent in 1998, calls for the beneficiaries of the plan to have a say in the allocation of any surplus. I would hope that at least that amendment would carry when this comes to a vote.

We will not have enough time to adequately go through the many, many issues in this complex piece of legislation because the government will move closure again. It is a disservice to all the people who are involved in the plan and all the survivors who collect benefits.

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

Mr. Speaker, I am pleased to have another opportunity to speak to Bill C-78. We have had precious few opportunities, given that the debate was shut down at second reading after only four hours and the committee hearings were stifled and curtailed to the point where we entertained very few witnesses, even though all of the opposition parties advocated hearing 40 to 50 witnesses and even taking the show on the road.

We believe that this bill is so important we should be touring the country with it so that seniors would have an opportunity to make representation and to research it, as happened when the government tried to make changes to the seniors benefit when the guaranteed income supplement and the old age security were to be merged into one seniors benefit. That was a huge, fundamental change in the way we deal with retirees and senior citizens in this country. To its credit, the government went on the road. There was a huge touring task force which heard from people from all walks of life.

The reaction and the very predictable consequence was that seniors mobilized. They got active and they mobilized their opposition to a huge degree and the government had to back off. Presumably the reason the government is closing debate on this bill is because it does not want the same thing to happen again. The Liberals know they are on shaky ground and they know that the public outrage is only starting to build momentum. In the last few weeks the public has had time to start to research the bill and to send newsletters to the memberships of their organizations to get seniors motivated and active in opposition to this bill. I predict that had they let democracy take its course, we would have seen a huge backlash, a huge outcry.

I think any government should be very cautious about taking on senior citizens. A government would have to be crazy to mobilize a fair fight against the seniors' movement because seniors are well informed, they are well read and they are well organized. We cross them at our peril if we are fighting a fair fight. However, the government clearly is not because it has taken away any opportunity for seniors or their elected representatives to raise all of the issues that are necessary.

From day one I have maintained—

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

Mr. Speaker, I sense this will be the last opportunity I will have to talk to Bill C-78 or any amendments to it. Even though four groups of amendments were taken from the many that were put forward, we have reason to believe that some time during the day today the government will again move closure on debate and shut down the opportunity for us to talk to the 30, 40 or 50 amendments which really need to be debated. It is a pattern that has developed right from day one of the debate on Bill C-78. We have every reason to believe, given the history and the pattern, that it will happen again today.

I will take this opportunity to say a few words in the short period of time I have on some of the many amendments which our party put forward to try to clean up what we feel is a very flawed bill. I am tempted to say it is a flawed bill, but it is not a flawed bill. In a way it is a masterful piece of work. It is a true piece of art in the way it was put together so the government could achieve what it set out to achieve. It will take the $30 billion surplus from retirees, pensioners and beneficiaries of the pension plans and use it for whatever purposes it sees fit.

I want to condemn the government in the strongest possible language I am allowed to use. Unfortunately I am limited in what things I can say about the bill. There are many things I could say about it. I cannot use the word theft. I do not intend to try the Speaker's patience by using the word theft, stealing, highway robbery or any of the other words that come to mind. I will not say those things because I know I am not supposed to do so.

I guess I would have to ask the Chair if I could use the word excrement. Is the word excrement allowed in the House of Commons? That is one word which certainly comes to mind. I do not believe it is in the book. If members worked in a circus and it was their job to follow the elephants in a parade, the stuff they would be sweeping up would pretty well typify or exemplify what we are dealing with today. The word travesty was used earlier and I am not going to repeat it over and over again.

There are not many Liberals here today to listen to these final words of debate on Bill C-78. I do not blame them for not being here, although I have some admiration for the Liberals who hang around to listen to this kind of thing. It must be hard not to get jaded about the whole political and parliamentary process when Liberal backbenchers are used as nothing more than a focus group for cabinet when it wants to ram something through.

It is going to be those members sitting here today listening to this who will have to go back to their ridings to justify, defend and explain that the senior citizens are going to have their pockets picked to the tune of $30 billion. I admire those who have the courage to come here and face the music. I wish them well when they go back to their ridings.

Opposition to this bill is building up steam as we speak. Right across the country seniors are rallying. They are getting together to study this bill, and it takes a long time to digest a bill of this size.

That is exactly what the government is trying to avoid because it saw what happened when it tried to tamper with the OAS and the GIS and when it tried to create the new seniors benefit. That committee toured the country and seniors had a chance to look at it in some detail. Seniors had a chance to mobilize, to voice their opinions and to tell the government that they did not want a new seniors benefit which actually resulted in less benefit for them. They did not want the GIS and the OAS to be merged into one so-called seniors benefit. That is exactly what is happening with this bill. The government has to stop it in its tracks because there is too much opposition right across the country.

The largest single group of beneficiaries, the federal superannuates national association, had 12 hours to prepare. Representatives were called the night before to make a presentation to the committee the next morning. They complained vigorously that they did not have a chance to prepare a proper presentation. They did not even have a chance to read the 200 pages of text that makes up Bill C-78. Seniors now, because they pay attention to the news and read the papers, are a very well informed group of voters and they are catching on in large numbers.

Like every good son, I had brunch with my mother on Sunday. She collects a pension through the public service pension plan. It was a very nice brunch. She collects the survivor's benefit because my father worked in the public sector all of his life and she survives on the meagre survivor's benefit that she gets. She lives in the same little wartime house at 998 Warsaw that I grew up in. Betty Martin, who is 82 years old and lives in Winnipeg, asked me at brunch, unprompted I might add, “Are they going to take away my pension?”

I had to answer, to be fair, that nothing was going to happen to the pension she is currently collecting. However, I told her that the $30 billion surplus would be taken out of the fund. Her question was “Is that not part of our pension?” That is an innocent question which came right out of the blue. An 82 year old woman saw immediately what was happening. Without reading the text she knew that it was fundamentally wrong to take $30 billion out of the pension fund which could have gone to improve the benefits of pensioners and retirees.

This whole thing got off to a bad start because of one statement made by the chief human resources officer of the Treasury Board Secretariat in June 1998. I will quote Mr. Alain Jolicoeur because I want to get this right. He made one statement that started the ball rolling on this whole atrocity. He said “Employees and retirees have no proprietary interest to the surplus in the superannuation plan”. He defied all conventional wisdom on employee benefit plans by saying “The surplus is not yours. You get your benefits, but the surplus is not yours”.

It is a basic tenet of anybody who is involved with employee benefit plans that any surplus is deferred wages. It is part of the pay package. It is money being held in trust to improve the benefits of the beneficiaries of the plan. That is where we got off to a bad start.

The President of the Treasury Board made it worse when he came out publicly and said even more strongly “There is no chance in hell that the union can claim a $30 billion surplus”.

First of all, he is wrong. It is not the union that is trying to claim the money. None of that money would go to the union. The union is arguing that it should go to the beneficiaries. His quote was “They do not have a chance in hell of getting their hands on it”. The government had made up its mind in a cold and callous way. It had targeted that money and then it set about taking very logical steps to take it.

This is a pattern we have seen before. The government took $25 billion from the EI surplus, which was taken from the most vulnerable people in society, the unemployed. Now it is taking money away from arguably the next most vulnerable bunch of people in society, the retirees, senior citizens, pensioners, beneficiaries of the pension plan, many of whom live in poverty.

We should not let anybody tell us that this is some kind of Cadillac pension we are dealing with. A disproportionate number of retirees are female. The average woman, with 20 years of service in the federal public service, is receiving a pension of approximately $9,000 a year. This is not a Cadillac pension. Nobody is living in luxury as a result of it.

If that $30 billion were divided up among the beneficiaries it would result in about $30,000 per beneficiary. Spread out over the period of their retirement it might mean $2,000 or $3,000 a year per beneficiary. Again, $9,000 to $11,000 or $12,000 is not a huge amount of dough.

I will not get a chance to speak to many of the motions which I put forward, but obviously we have put forward amendments to this bill that would take away the enabling language that was cleverly put in to allow the government to take not only this $30 billion surplus, but all other surpluses; all future surpluses which will be invested by the public sector pension investment board.

At the very least, one of the amendments that we put forward dealt with that board and the pension investment policies that it might be bound to or that might be stipulated. The legislation is really silent on that. The only goal would be to produce the maximum profit. Obviously that has to be the first goal of any trustees of a pension plan.

We would argue that there should be some ethical investment policies as well. For instance, the government should not invest in any company that might be engaged in a service that is contracted out which would cost public service members their jobs. What if it were a janitorial company that was bidding on a contract to clean the House of Commons? The people who traditionally do those jobs would be laid off and replaced with people from a company in which their pension plan is invested. That would be fundamentally wrong. I think the beneficiaries would want to speak out against that. They will not get a chance to speak out against it now. That is just one example of how many things need to be discussed and we will not get a chance to discuss them. It is deplorable. It is excrement.

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

moved:

Motion No. 12

That Bill C-78, in Clause 32, be amended by replacing line 3 on page 17 with the following:

“subsidiaries shall adhere to, ethical investment poli-”

Motion No. 13

That Bill C-78, in Clause 36, be amended by replacing line 2 on page 19 with the following:

“auditor's report to be prepared and presented to the Auditor General of Canada, in respect of”

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

moved:

Motion No. 9

That Bill C-78 be amended by adding after line 9 on page 15 the following new clause:

“27.1 The Auditor General of Canada shall be the primary auditor of the Public Sector Pension Investment Board.”

Motion No. 10

That Bill C-78, in Clause 28, be amended by replacing line 10 on page 15 with the following:

“28. The audit committee shall be responsible for presenting all records of all financial activity of the Public Sector Pension Investment Board to the Auditor General on an annual basis. In addition, the audit committee shall”