moved that Bill C-215, An Act to amend the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act (deletion of deduction from annuity), be read the second time and referred to a committee.
Mr. Speaker, I wish to thank my hon. colleague, the member for Esquimalt—Juan de Fuca, and my entire party from coast to coast to coast for their support during the six years that I have been trying to get the bill passed. This is the sixth year that Bill C-215, in its many forms, has come to light.
First I would like to thank Roger Boutin, Mel Pittman and John Labelle from Lower Sackville, Nova Scotia, for bringing this matter to my attention over six years ago and helping me with this legislation.
When individuals in the military or RCMP retire at age 65, the amount of money they receive from the Canada pension plan is deducted from their superannuation. Also, if they become disabled in their forties or fifties, for example, whatever amount they get from CPP disability benefits is deducted from their superannuation. That is wrong.
Most people do not know that all federal and provincial public servants who receive an annuity from their government, from the Canada pension plan, get that deducted from their superannuation when they retire at age 65, except for senators, judges and your friendly members of Parliament.
In 1965-66, when the scheme came into place, nobody in the military or the RCMP was advised of this. They had no options, yet somehow this great scheme avoided members of Parliament, senators and judges. As I have asked repeatedly over six years, if it is such a great deal for members of the armed forces and the RCMP, why did members of Parliament not get into it? It is quite obvious that somebody was looking out for our personal interests at that time.
In 1966, people paid a certain amount into one pension plan. When the Canada pension plan came into effect in 1966, the system was blended. Members of Parliament have what is called a stacked system. However, most people have a blended system which is divided into superannuation and CPP. The argument is that they did not pay enough into both to merit both when they retire.
If indeed that is the case, then why is it that at age 60 a person can fully retire, receive his or her superannuation and then apply for the Canada pension plan? He or she would get a reduced amount in CPP, but everybody does.
For example, a person receives $3,000 in superannuation. If he or she applied for the Canada pension plan at age 60, then instead of, say, $800, he or she would get $600. He or she would still get both, the superannuation and the Canada pension plan, until age 65.
Here is what happens for those in the military or the RCMP.
The government sends the dreaded letter, and anyone in the military or the RCMP at retirement age knows about this letter. It is from their friendly government officials: “Congratulations on reaching age 65. If you were collecting CPP at this time, you would have received this amount of money.” The letter informs them, for example, that they will keep the $500 or $600 in CPP that they presently receive, but the government is going to deduct more from their superannuation. They will actually lose money, but the government tells them not to worry because the old age security will kick in and should offset the loss of their Canada pension plan clawback.
I remind everyone that old age security, OAS, has nothing to do with defined plans. It comes from general revenues. Therefore, to say that something else builds that up is simply misleading. It is simply wrong.
For example, and this is true story, a gentleman in my riding who had 32 years of service with the RCMP had a stroke at the Halifax airport and was rushed to the hospital. When he woke up in the morning the doctor told him that he had good news and bad news for him. The good news was that he was going to survive his stroke. The bad news was that he had cancer. He was sent to London, Ontario for treatment. While he was there, he was told by his senior officials that, after 32 years of service with the RCMP, he would never work again. Then he was told to apply for CPP disability benefits because he was unable to work.
He said, “Okay, my pension is around $3,000 from the RCMP.” He thought that if he applied, he might get about $800 in Canada pension plan disability benefits. He calculated that if he got both amounts, and if he survived his health problems, that he would be okay with $3,800 a month. He was told, “Oh, Jim, we are so sorry, but that is not how the game is played.” He would get the $800 in Canada pension plan disability benefits, but it would be deducted dollar for dollar from his superannuation. He said, “Why am I applying for CPP disability benefits?”
That is the $64,000 question. Why should he have to go through all these hoops, all the trials and tribulations and do all that paperwork when it is going to be deducted from his superannuation, not at 65 but when he is 52? What the government did not tell him is that when he turns 65, the Canada pension plan disability benefits will stop for him. Then he will go on a reduced CPP, which is clawed back from the superannuation.
If he dies, his wife will get 50% of the clawed back pension. That is the big thanks he gets for 32 years of loyal service to his country as an RCMP officer. This also applies to military personnel. It also applies to all federal and provincial public servants.
The reason we focus on members of the RCMP and the military is that they do not have unions or associations that could argue this at the bargaining table. In fact, PSAC and others have gently refused to support this legislation. I believe I know why. They are waiting to see if we are successful. I believe that they themselves may wish to argue this issue at a future round of bargaining.
The heroes of our country, the RCMP and military, should not have to suffer the financial indignation of clawbacks at age 65 or when they are disabled.
I would like to deal with a couple of myths. There are roughly 740,00 to 750,000 retired military and RCMP officials, along with their spouses.
This bill only affects about 96,000 of them. They would have had to have served over 20 years in order to get superannuation. Now, for the modern military personnel, it is 25 years. If they served five years in the military, this bill does not apply to them. Everybody knows that.
What I have also heard from some people is that the bill is retroactive. It is not. It will only come into force when it becomes law. Everybody is fully aware of this.
On the cost, we heard the former parliamentary secretary to the minister of defence once say in a committee that the bill would cost about $100 million. He is about right. To run this program every year is another $100 million. People who serve for over 20 years in the military or the RCMP can get superannuation.
However, one thing they pay into, which by the way members of Parliament do not pay into, is employment insurance which, if they retire from the military, they cannot collect. We, as members of Parliament, do not pay into EI because we cannot collect it.
Can we tell the average person serving their country in an RCMP uniform or a military uniform the fairness of that little scheme? It is simply wrong.
And $58 million of the superannuation could be easily transferred by cancelling the EI deduction and moving it over to superannuation. That is a simple deduction right there.
Also if they received more CPP money at age 65 or if they were disabled, they would receive less old age security at age 65. This would be another savings to the government.
The average person would get about $200 extra a month. What would a disabled hero of our country, someone who is 65 years old, do with an additional $200 a month? Well, that person might buy prescription drugs. He or she might buy heating oil, or take the granddaughter and grandson out for lunch. That money would be put right back into the economy, right back into the tax system.
The bill itself, when we look at the overall picture, is fairly revenue neutral. The most important aspect of this is these people are the heroes of our country, and they require financial dignity when they retire.
Why is it that we as members of Parliament, the leaders of this country, do not suffer this indignation, but they do? It is simply wrong. I have case after case of individuals showing me the letter, showing me how much they made at age 64, for 364 days, and then on their 65th birthday how much they are making. An awful lot of them lose money. It is tough enough in our economy now without them losing more of their income.
Why would we do this to them? Why did they not have any say back in 1965-66 when this was done behind closed doors? In the 1960s and 1970s, most of them were not advised this was happening. Although it was in the book they received, it was written in language that was difficult to read. I have to admit the government is correct, everyone leaving the military now is fully aware of what will happen to them if they become disabled or if their benefits are clawed back. However, it is simply wrong.
Here is the case of Roddie O'Handley, from Nova Scotia, a disabled gentleman from the RCMP. He was supposed to receive 75% of his pay from the RCMP, which he got. Great-West Life, the insurance company, was supposed to cover him for two years of long-term disability. He received that. After two years, Great-West Life said it would not pay him any longer, that he would have to apply for Canada pension plan disability benefits. He did that, and he received benefits. However, all the money he got from CPP, backdated for two years, had to be paid back to Great-West Life. This happens to everyone. He had to pay it all back. Then, of course, CPP was deducted from his RCMP superannuation. Therefore, he did not gain any money; he lost it.
He asked, “If I'm supposed to receive x number of dollars from the RCMP for my disability on my superannuation, why is it that they can deduct it from my superannuation?” He should not be losing money for being disabled. Those additional funds are required in order to help him move forward.
There are probably many veterans watching us debate this on the great channel, CPAC, right now. I encourage members of Parliament to talk to the Royal Canadian Legion, to the ANAVETS and to the Canadian Association of Retired Persons. They are fully supportive of this initiative.
At the end of the day, when the heroes of our country become disabled, or when they retire at age 65, they should not suffer receiving the dreaded letter.
We have already outlined in previous Parliaments, in committee, and everywhere else how this can be paid for. At the end of the day, when these men and women were on the front lines in the country and around the world, no one asked them how much money they made. When they had to pick up a bunch of kids off a vehicle that rolled down a ditch and all four of them died, no one asked them how much money they made. On the front lines in Afghanistan, or in World War II, or wherever they may have been, no one asked them that. Now we are asking them how much money they make and we are going to deduct it from them.
This is not to be confused with the SISIP clawback. That is something completely different. This is the annuity clawback, the pension benefit reduction at age 65 or when disabled.
Most of my colleagues on both sides of the House know that the disability part is a real sore thumb for them, and they want to fix it. We can fix that quite easily if we want to, and we can work on the other aspect later if they like.
The reality is, people who serve our country deserve no less. They deserve to be treated with the greatest of respect. As I have heard many times, they deserve to be treated with financial dignity when they retire. They serve our country. They allow us to have a good night's sleep. They look after our families. They really are the best of Canada. As Rick Mercer once said, “If you're going to take the very best of Canada and send them to hell on earth, you might as well give them the gold card when they're there”.
As parliamentarians, we have the ultimate responsibility for the needs of these men and women all the way up to and including the headstone. They do not deserve to have those pensions clawed back. It is simply wrong and unfair. It is not illegal, but it is immoral and wrong and it needs to change.
God bless all those who have served our country in the military and the RCMP, and their families. Lest we forget.
