May 3, 1974

PRIVATE MEMBERS' MOTIONS

CANADIAN NATIONAL RAILWAYS

PC

Charles Humbert Thomas

Progressive Conservative

Mr. Charles H. Thomas (Moncton) moved:

That, in the opinion of this House, the government should consider the advisability of appointing an independent commissioner to make a full evaluation of the benefits structure and financing of the Canadian National Railways pension fund, such evaluation containing recommendations on the benefits structure, including the retired pensioners, and methods of financing its benefits recommendations.

He said: Mr. Speaker, I do not intend to ask for any concession in exchange for my co-operation, but I do hope the display of co-operation and efficiency we have just witnessed harbours the acceptance of my motion by the House.

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
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NDP

Stanley Howard Knowles (N.D.P. House Leader)

New Democratic Party

Mr. Knowles (Winnipeg North Centre):

Hear, hear!

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
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PC

Charles Humbert Thomas

Progressive Conservative

Mr. Thomas (Moncton):

I have one supporter anyway, Mr. Speaker. At the outset I want to emphasize that although in my motion I refer specifically to the CN pension plan, what I have to say is equally applicable to the Canadian Pacific pension plan and the CP pensioner. I would also point out that the severe restrictions placed on private members proposing anything that might be construed as a charge on the public purse hampered me considerably in the wording of my motion. Had I been sure that it would have been acceptable to the chair, I would have move that the government immediately appoint a commissioner, etc.

The minister has been considering the advisability of this for far too long. What the pensioner wants now is action to help offset the erosion of his pension by the increasing cost of living. When an opposition member files a notice of motion of this type, the odds are less than 50-50 that it will ever be debated. It must survive the draw and come out with a fairly high priority to have even a chance of coming up for debate. While my motion survived the lottery with a reasonable placing, I still felt that by the time it was called for debate the government would have ordered such an inquiry and this motion would be redundant.

May 3, 1974

Surely a government which professes such concern for the workingman would long ago have taken steps to order such an inquiry-an inquiry which was approved, in principle at least, by the Minister of Labour (Mr. Munro) last August 31 when the House was discussing the back to work legislation. The minister has since then indicated many times in the House and at public meetings that he recognizes the necessity of such an inquiry and seemed prepared to appoint a commissioner. It appeared that action was imminent and that this motion would be a fait accompli.

On February 11, 1974, in Edmonton, the minister said:

I am giving full consideration to the calling of a complete inquiry into railway pensions. In scope, it would cover all the details of benefit cost and funding. Through this vehicle of inquiry, I would hope that the parties concerned would then be in possession of all the facts. Then when the bargaining is once again opened, they would be able to sit down at the bargaining table with the findings and recommendation at their disposal.

It is now very apparent that the minister is in no hurry to initiate such an inquiry, for on April 11 his parliamentary secretary, in the adjournment debate, made it very clear that the minister is prepared to toss the whole matter of pensions back to the railways and the unions before he makes any recommendation. This is a direct contradiction of the minister's statement to which I have just referred. The parties involved have argued the pension issue for years and have always ended up at loggerheads over the issue of cost. This is why the unions wanted the Deutsch terms of reference broadened to determine the costs of the various proposals and the ability of the fund to carry them.

Until these facts are known, what in the world is the point of starting further discussions-discussions, incidentally, at which the retired pensioner will not be represented? The minister seemed to recognize this when he said that only when both parties are in possession of all the facts should they again sit down at the bargaining table. By the minister's own admission, the parties involved must be supplied with further facts and figures. These can only come from a thorough investigation made by a completely independent person who is knowledgeable of pension funds. I cannot accept the minister's view, as stated by his parliamentary secretary, that the parties involved want further discussions.

Certainly from everything I have heard from the unions and the pensioner's associations they are fed up with discussion and now demand a completely independent inquiry. I strongly suspect that the minister is hedging, perhaps under pressure by the companies, and that he has no real intention of taking early action. Certainly from the mail I have been receiving from employees and pensioners there is no indication that these people want further discussion. They want action, now.

If the minister has his way, it would be a direct negation of the pious claims in respect of his government's concern for those whom inflation hits hardest, the pensioners on fixed incomes. The minister's colleague, the Minister of National Health and Welfare (Mr. Lalonde), has recognized the necessity of adjusting pensions annually to meet the rising cost of living. Legislation recently passed to

CNR Pension Fund

remove the 2 per cent limit on annual escalation has enabled the government to adjust the pensions of people already retired to cover cumulative increases built up since their retirement. More than once in this House the Prime Minister (Mr. Trudeau) has proudly proclaimed that he has eased the burden of inflation for all federal pensioners by indexing the cost of living. But, whether deliberately or not, he consistently overlooks one large group who, for all practical purposes, have been federal employees but have not received the same treatment.

I refer, of course, to the thousands of retired railway employees and their widows or survivors. These people seem to be in limbo. The companies are no longer interested in them and the unions do not worry about them once they stop paying dues. One has only to look at the recent wage agreements: nowhere is there any mention of the retired pensioner. The reason is obvious: there was no one to speak for them. This is one reason I have never been happy about including pensions in the general negotiation. They should be negotiated separately with a third party, the pensioner, given full negotiating rights.

Lest any member think that relatively few are affected, I would refer to Hansard of May 1, 1974, and the answer to question No. 20. This return shows that 25,912 people are currently drawing CN pensions. Double this figure to allow for wives, and we have over 50,000 people directly involved-not counting, of course, the children who may be involved. Remember, this is the CN only. Other railway pensioners are not included. Now for the real shocker: 258 are receiving less than $25 a month, and 130 are getting $25 a month. So a total of 400 people are getting $25 a month or less. At today's inflated prices this would barely buy one bag of groceries.

Let us look a little further. We find that there are 6,096 pensioners, or almost 25 per cent of the total, getting less than $100 a month. Surely neither the CN nor the government can be very proud of this situation. But what is the minister's reaction to repeated requests for help for these people? Nothing more than to suggest further discussion between companies and unions with the pensioner out in the cold, literally and figuratively. But this is not too surprising in view of this government's track record of treatment of railway pensioners.

Admittedly, there have been some improvements. The 2 per cent retroactive escalation announced in 1972 and 1973, while not enough to offset the cost of living, was at least a start. But now that the legal restrictions have been removed there is nothing to prevent railway pensioners receiving full cost of living escalation similar to other retired federal employees. The minister's suggestion for further discussion will not remedy this situation.

Mr. Speaker, I am beginning to wonder if the government is trying to sucker us into settling for the proposal put forward in Bill C-139 in the name of the Parliamentary Secretary to the Minister of Transport (Mr. Guay). Certainly the publicity given this bill far outweighs its importance as an instrument to improve the CN pension plan. Let us take a brief look at Bill C-139. It seeks to amend the Pension Benefits Standards Act so that the CNR will no longer be required to meet the funding provisions. The bill quite obviously has its genesis as a result of statements made by Mr. MacMillan, then presi-

May 3, 1974

CNR Pension Fund

dent of CN, before the standing committee on transport last December. At that time, Mr. MacMillan stated that one reason CN pensions are not as good as civil service plans is that CN is required to fund its pensions annually while civil service plans are not. He inferred that if this situation were changed the CN plan would be improved. But, Mr. Speaker, when I tried to pin Mr. MacMillan down to a definite promise to improve the plan the following exchange took place:

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
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PC

Charles Humbert Thomas

Progressive Conservative

Mr. Thomas (Moncton):

But you are saying that if you did not have to comply with that act, you could improve your pension, so what would you do? How would you improve the pension.

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
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?

William Hector McMillan

Mr. MacMillan:

I think the removal of us from the requirement to comply with the Pension Benefits Standards Act would be for the purposes, presumably, of our pensions coming into line with the civil service pension and in those circumstances in so far as they lent themselves to commercial activity-and I do not know whether this is material or not, because I am not intimately familiar with the civil service fund-it would be exactly the same and the rules under which we would be operating our pension fund would be those which presumably apply today to the civil service fund.

If members of the House have gathered anything from this, I wish they would let me know what their interpretation is; but certainly it is hardly a promise to improve the pension fund. It is quite obvious that Mr. MacMillan did not commit the CN to increasing pension benefits if the funding provision was removed. His position was simply that if the CN was not obligated to fund its plan annually, it would be in a position to make improvements.

So while the objective of C-139 is commendable-and I support it fully-let us recognize it for what it is. It is not fair to raise the hopes of thousands of people, those who are mailing cards to their members of parliament asking for support of the bill because it will allow the CN to improve their pension plan. I would point out that there is a great difference between "allow" and "take action". We have no assurance that the CN, having been given this financial relief, will in turn reciprocate by increasing pension benefits. I would feel much more kindly disposed toward the bill if the government had introduced it as a government bill. Then it would have some clout.

Mr. Speaker, let us not be sidetracked by red herrings across the trail. Let us stop stalling and come to grips with the situation. There is no doubt in my mind that railway pensions must be improved. As Dr. Deutsch pointed out in his report, the object of any pension fund must be to protect the purchasing power of those who are contributing. This principle has been embodied in the Old Age Security Act, in family allowances and in pensions payable out of the consolidated revenue fund. It is only logical that it be extended to all public employees, be they in the public service or in Crown corporations. We must now extend the cost of living index escalation to the CN pensioner in the same way it has been granted to other public service pensioners. But, Mr. Speaker, we must not be satisfied with merely adjusting pensions annually to meet the cost of living. Many pensioners who have been retired for some years are trying to exist on pitifully low pensions. Surely in this age of social awarenesss we cannot let these people suffer. Their pensions should be increased substantially, immediately.

The report of the standing committee in 1970 suggested one means of financing improved benefits. It recommended that the surplus amortization payments, at that time $7 million, be used to improve pension benefits. This report was unanimously adopted by the House and I suggest that the government now instruct the CN to comply with its recommendations.

The commission I am requesting would make a complete investigation of pension benefits, and I would suggest the following changes in addition to the cost of living escalation mentioned earlier. All participants in the pension plan should be entitled to equal benefits; therefore, the 2 per cent formula should be retroactive to the first day of service. Survivor benefits should he increased to at least 75 per cent and should be extended to the survivors of the old provident fund members who do not receive any benefits. Surely some means can be found to relieve the plight of these unfortunate people. There should be provisions in the plan for early retirement without severe penalty, and there should be some mechanism for periodic review to keep the program abreast of changing conditions. Perhaps this could be done through separate negotiations in which the three parties involved, company, union and pensioner would participate.

Mr. Speaker, these changes are the minimum required to bring railway pensions up to the equivalent of public service plans. They will cost money. How much or where it is to come from is not for me to say. I am not going to get involved in the argument between company and union over the use or misuse of the funds. I listened to this for weeks during the committee hearings in 1970 and, frankly, I was just as confused when it was all over, as were most other members of the committee. This is a task which must be done by an independent team of experts in pension problems. As the Minister of Labour has said-

Matters concerning pensions, with their complex and intricate funding systems are often confusing, not only to the rank and file, but frequently to all but a small group of actuaries and administrators.

The Minister of National Health and Welfare, speaking to the Canadian pension conference last November, had this to say:

Since we are dealing with other people's hard earned money, dollars they are foregoing for present advantage in expectation of future protection during a much more vulnerable period, we owe it to our contributors to do not only what is minimally required, but what is maximally possible and feasible.

Mr. Speaker, I am happy that the Minister of Labour, in his remarks quoted earlier, has recognized the fact that reforms are necessary and because of the complexity of the problem outside expert advice is needed. Let him now heed the words of his colleague and do what is maximally possible and feasible. Let him keep faith with the railway employees and pensioners by immediately setting up the inquiry which he admits he has been considering for many months.

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
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LIB

Charles Robert Turner (Parliamentary Secretary to the Minister of Labour)

Liberal

Mr. Charles Turner (Parliamentary Secretary to Minister of Labour):

Mr. Speaker, first I would just like to point out that I have been paying into the pension fund since 1939, and when I was hired by the CNR I tried to emphasize that we should all do something with regard to pensions. At that time railway employees were interested

May 3, 1974

in two things: miles and money. When the war was on, the mileage clauses were abolished and the requirement was lor anywhere from 5,000 to 6,000 miles. The boys were not interested in pensions. This has been building up for years.

Our position on the matter is that further departmental consideration is required and that further discussions with the unions and the companies will be needed before a final decision can be made. In the latter case, the time involved in the continuing proceedings before Mr. Justice Hall is inhibiting discussions before they are arranged. The reason for this is that there were several suggestions in the Hall report. Mr. Justice Hall suggested that the unions and the company get together. This is what they are doing at present. They will take a look at pensions.

The government has been giving consideration to the advisability of appointing a commission of inquiry to review details of benefit costs and funding of pension plans covering Canadian railway employees in general, not just those employed by Canadian National Railways. A number of factors have to be weighed carefully before a final decision can be made. Not only is the Department of Labour involved, but also the Ministry of Transport through its general responsibility for Crown corporations in the transportation industry, and the department of insurance which administers the Pension Benefits Standards Act. This is the first time they have bargained for pensions. I disagree with this, but the hon. member sat in the committee with us and he knows that we lost the argument. I think it is wrong, for the simple reason that a general chairman who is bargaining for money might trade benefits for a few cents per hour increase in wages. I disagree with this because in the case of an employee who has been around for 35 or 40 years, any union representative who wants to go up the union ladder should be separate from the contract because pensions are pensions and certainly should not be the subject of bargaining in this case.

In addition, a collective bargaining relationship is concerned involving national railway negotiating groups and railway companies. A number of railway pension plan improvements have been instituted over the years. The most recent improvements resulted for the first time from a collectively bargained agreement and railway union leaders obtained significant advances for their members. However, areas of concern still remain and the following categories of complaint have been made to the Department of Labour and are listed in their order of importance. First, improvement of the 2 per cent benefit from the date of hiring rather than from 1956. Second, cost of living provision so that pensions are adjusted based on increased cost of living. Third, increased benefits for persons presently in receipt of pensions. Fourth, an increase above the present 50 per cent for survivor benefits.

All these points have merit and union leadership will no doubt pursue them in future rounds of bargaining. However, all these points have their cost and this has to be taken into account when bargaining improvements. The complexities of the costing of pension benefits is demonstrated by the need found in the recent railway arbitration proceedings to refer an examination of cost figures to a separate inquiry under Dr. John Deutsch. Some railway

CNR Pension Fund

workers believe that pension benefits should not be bargained as such and that more could be obtained by relying on the previous system under which pensions were a distinct issue and not bargained. However, the recently bargained improvements have given railway workers pension plans which are in some ways among the best to be found in Canadian industry. In any event, to bargain or not is really an issue for the unions and their membership to decide themselves under the democratic means provided in their constitutions.

A number of individual railway workers do not fully understand the financing and funding of pension plans, and with regard to many of the figures that the hon. member quoted I may say that many of these people did not even pay into the pension fund. The Pension Standards Benefits Act requires a certain level of funding which will ensure the viability of pension plans in federal industries. Such viability entails provision for participants in the plan being assured of benefits they have paid for being available, irrespective of what happens to the company concerned.

While it is not suggested that the CNR is in danger of going out of business, to remove it from the requirements of the act would have implications for other companies in the public and private sectors, including those outside the railway industry. Naturally, the requirement to fund under the act results in sizeable accumulations of assets, particularly in large-scale companies, and some individuals feel such assets could be used to improve benefits. However, to use such assets would defeat the purpose of the act, which is to provide a fund to ensure viability.

In addition, some believe that large-scale companies can provide for improved benefits, without touching funded assets, just because they are large. In the case of Crown corporations it is felt that additional financing could be provided from public sources where necessary. However, as mentioned before, pensions do have costs. Normal business principles must be applied. The public purse can only provide so much. Likewise, private companies have their financial limitations. Furthermore, to provide benefits in the CNR which would seriously distort the relationship with benefits in other major companies, particularly the CPR, could have serious repercussions for industrial peace.

In brief, pension plans available to CNR employees, and to CPR employees for that matter, provide good benefits in relation to those offered in comparable plans. Areas for improvement exist, but future bargaining will likely take these into account along with other demands that railway workers might make. An inquiry could provide useful information to the parties involved. Consideration is being given to the establishment of such an inquiry, but a number of interdepartmental factors are being weighed. Also, as has been pointed out in the House, certain aspects of the 1973 railway arbitration proceedings are still under way and are involving both companies and unions in a heavy workload.

Regarding the history of Canadian National Railways pension plans, before 1935 the company operated a noncontributory pension plan which provided a benefit of 1

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May 3, 1974

CNR Pension Fund

per cent of the highest ten consecutive years' earnings, for each year of service, with a minimum of $25 per month. In 1935 the company introduced a new plan which preserved the previous plan's benefits as a past service benefit based on service before 1935, and the highest ten years' earnings before 1935. The minimum pension of $25 per month was preserved for pre-1935 employees and for employees hired after January 1, 1935, who were not past age 45. The new plan provided for employee contributions up to 10 per cent of earnings by employees with ten years' service, with up to 5 per cent matched by the company. These contributions, plus interest, would provide an amount which could be purchased on approved actuarial tables.

On January 1, 1947, this plan was amended to provide for employee contributions in the first ten years, but with no contributions from the company during that period. On January 1, 1952, the plan was again amended by adding to the foregoing part I the following alternative part II:

For a contribution of 5 per cent of earnings an employee would receive a percentage of his last five or ten years' earnings, whichever was higher. The percentage was the total of (i) one per cent a year for the first 20 years, (ii) one and a quarter per cent a year for the next ten years and 1 id per cent for each extra year.

All employees at January 1, 1952, were allowed to transfer to part II and new employees could transfer within the first ten years. To receive full credit for service after 1934, the employee had to pay 5 per cent of earnings back to 1934 or date of hire. However, a reduced pension was payable if the full arrears were not met. I should like to say at this time that all the union officials went across the country and we pleaded with CNR employees to pay into the pension scheme. I had to pay back 9V4 years myself. Employees retiring before January 1, 1952, were allowed to have their pensions recalculated under the part II formula. More than half of the employees did not elect to transfer in 1952. Many continued to qualify only for the minimum pension.

The part II rules were revised in 1959. Contributions of 5 per cent to part II became compulsory for new employees after January 1, 1959. All employees at December 31, 1958, not under part II were given one year to transfer to part II. The earnings base was revised to the last 60 months or any five consecutive years, whichever is larger. Part II was amended on January 1, 1961, to provide for deferred pensions on termination with 15 years' service, where service plus age totalled 60 or more.

On April 1, 1962, the Pension accumulation rate was amended to 1!4 per cent a year for the first 30 years and 1 Vi per cent for each extra year. Contributions were increased to 5'A per cent of earnings. On June 1, 1965, the accumulation rate was revised to 1 Vi per cent for each year. The contribution rate was increased to 6lA per cent. On January 1, 1966, the plan was revised to co-ordinate with the Canada and Quebec pension plans. The benefit remained at 1 Vz per cent for service before 1966. After January 1, 1966, the benefit became 1 per cent for earnings covered under the CPP or QPP, and 1 Vi per cent for earnings not covered. The contribution rate became 5 per cent on covered earnings under the public plans, and per cent on excess earnings.

The Standing Committee on Transport and Communications dealt with the question of the Canadian National Railways' pension fund and tabled its fourteenth report on

September 9, 1970. Further improvements to the CN plan were made during the time the standing committee was holding hearings and following this report. These recommendations were as follows.

1. Effective January 1, 1971, the pensions of 1959 plan employees retired before 1970 were increased by 2 per cent per year since retirement. The basic pensions of 1935 plan employees retired before 1970 were increased by 100 per cent for employees retired before 1966 and by lesser percentages for those retired after 1965. Survivors under the 1959 and 1935 plans received comparable increases. The company estimated the costs of these improvements at $5.2 million per annum from January 1, 1971.

2. Pensions paid on early retirement occurring after October 1, 1970, were no longer subject to reduction if retirement took place at or after age 60. For retirements before age 60 the reduction was related to the employee's potential service to age 60, and not 65 as previously. The eligibility conditions for early retirement were unchanged. The company estimated this improvement to cost $1.45 million per annum.

3. Beginning September 1, 1970, for the period up to October 31, 1971, active members of the 1935 plan and retired employees who had been contributing members of the 1935 plan were given the option of joining the 1959 plan. Of approximately 18,000 union members canvassed, 9,000 transferred to the 1959 plan. The additional annual cost of this provision is estimated at $6.6 million.

4. Age and service limitations were eliminated for employees killed in the performance of their duties.

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
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NDP

Stanley Howard Knowles (N.D.P. House Leader)

New Democratic Party

Mr. Stanley Knowles (Winnipeg North Centre):

Mr. Speaker, I should like to commend most warmly the hon. member for Moncton (Mr. Thomas) on presenting this motion this afternoon. I also congratulate him for making an excellent speech. As for the hon. member for London East (Mr. Turner), I liked the parts of his speech where he was speaking for himself and as an employee of Canadian National Railways. I cannot say that I was so enthusiastic about the statement that he seemed to be giving us, the effect of which was to excuse the delay of the Minister of Labour (Mr. Munro) in keeping his commitment to appoint a commissioner along the lines suggested in the motion of the hon. member for Moncton.

May I join with the hon. member for Moncton in stressing the point that although his motion refers to Canadian National Railways and to the pension fund of that organization, so far as those of us who are interested are concerned, we think of the motion as including the Canadian Pacific Railway, the old ICR, the Northern Alberta Railways, perhaps the Ontario Northland, and any other railways there are in this country.

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
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?

An hon. Member:

The B.C. Railway?

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
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NDP

Stanley Howard Knowles (N.D.P. House Leader)

New Democratic Party

Mr. Knowles (Winnipeg North Centre):

All right, add the British Columbia Railway as well. We are concerned about the pensions of railway employees in Canada for whatever railway they worked or are working.

The hon. member for Moncton pointed out that the Minister of Labour made a statement on this matter in

May 3, 1974

Edmonton on ^February 11 when he indicated his readiness to appoint a commissioner to make a thorough study of railway pensions in their entirety. That was not the first time the Minister of Labour had made that commitment. The first time was on the floor of this House at the end of August, 1973, when we were dealing with the railway strike that was then in progress. The very day that the minister announced the appointment of Dr. John Deutsch as commissioner on a very narrow point having to do with the strike we pressed him to enlarge Dr. Deutsch's terms of reference, or for the appointment of another commissioner to go into the whole broad question of railway pensions.

I think it is not unfair to the minister to say that he agreed on that occasion and asked us to wait until the strike was over. He did agree, however, to the appointment of a commissioner who would have broad terms of reference having to do with railway pensions as a whole. The minister first made that commitment in the House at the end of August, 1973, and he made it again in Edmonton on February 11, 1974. He made it on two other occasions in this House in answer to questions of mine, once on March 11 and again on March 22, and he made it again in my hearing at a meeting of railway pensioners in Winnipeg on Sunday, March 24.

I have to say that every time the Minister of Labour has made this commitment he has done a certain amount of hedging and has asked for time, for the opportunity to discuss it further with the companies and the unions; but even so, the promise was always there. The recommendation has been made that this is the sort of thing that is necessary, and the hon. member for Moncton has underlined it. this afternoon. I think, Mr. Speaker, there should not be any further delay in the appointment of such a commissioner. I hope, for example, that the Canadian National Railways any day now will announce its 1974 cost of living escalation and that it will be equal to the full percentage rise in the cost of living. Even after that has been done it is not the end of the story. That is just one item and there are all the other matters relating to railway pensions that in my view need to be gone into by an independent commissioner. The very history of the Canadian National Railways pension fund given by the Parliamentary Secretary to the Minister of Labour is not only interesting but it demonstrates that the plan has been built up like Topsy, and that it deserves a very thorough review.

Mr. Speaker, this is private members' hour when we have to watch the clock and make sure, not only that we do not talk the motion out but that we do not make it easy for someone else to talk it out-so I am going to cut short my remarks. As Your Honour knows, when I get on the subject of pensions it is difficult to terminate my remarks. But the hon. member for Moncton put the case very well today and I simply underline what he said. I think that probably the first thing that needs to be done is to get an escalation of the pensions of those now retired, for 1974. It must be equal to the full rise in the cost of living and it must come soon. When the Canadian National Railways do it, by gad the CPR had better do it too, even if we have to get Pierre Berton into the act. Perhaps he could help us.

After that has been dealt with, there is the question of the basic formula by which pensions are calculated. The

CNR Pension Fund

Parliamentary Secretary to the Minister of Labour went over the details of how it has been changed, in the case of the CNR, from a non-contributory formula down through the various forms, and the difference between l'A per cent, 114 per cent and 1 per cent. In my view, there is no substitute for a pension that provides for at least 2 per cent for each yeai of service back to the beginning-no ifs, ands or buts about it. Even after we have a proper formula for the calculation of pensions, there is the point that the hon. member for Moncton raised, and this was dealt with in the standing committee a few years ago, to the effect that many of those who are now on pension need not only an escalation of what they are getting but the basic calculation needs to be done again. The hon. member for Moncton pointed out that we have pinpointed a way in which this can be done. We pointed to certain millions of dollars that were available and we said even before arriving at a new formula that those on low pensions should have them increased. As I say, we showed where there were millions of dollars that could be used for this purpose.

Then there is the question of survivors' pensions. I have the feeling we are making headway in terms of getting public support for this idea. A few years ago it was accepted that widows on pensions, if they were given them at all, were given 50 per cent. But that is not acceptable any longer. Even now, when we say it should be at least 75 per cent, I say why not 100 per cent? If a pension has been earned by one spouse, why should it be cut to 50 per cent after death? Why should it not continue at full value, whatever spouse survives? I think this point has to be stressed very strongly. I do not see how we in this place, where we have a plan that provides 60 per cent for our widows, can countenance a pension of only 50 per cent for survivors of pensioners of the railways.

I think early retirement plans have to be reviewed and I think the relationship among railway pensions, the Canada Pension Plan and old age security, where there is integration, needs to be sorted out. That gets us back to the whole point of the motion before us this afternoon, namely, that this commissioner should be appointed. That is what the hon. member for Moncton asked for in his motion, and that is what the Minister of Labour promised this House last August-a promise which he reaffirmed in Edmonton on February 11, gave us again on March 11 and on March 22, and which I heard him enunciate in Winnipeg on March 24. I do not think there should be any further delay in the appointment of that commissioner, Mr. Speaker.

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
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LIB

Samuel Victor Railton

Liberal

Mr. S. Victor Railton (Welland):

Mr. Speaker, I hesitate to speak on this motion after such excellent proponents of a pension scheme for Canadians in general and railway employees in particular have put their ideas before us. I have heard three excellent speeches, each one different because of the backgrounds of the speakers.

The hon. member for Winnipeg North Centre (Mr. Knowles) is an expert on pensions. I have listened to him both in the House and in committee with interest and respect. I do not think he has said anything today with which I could disagree. In the same way, the hon. member for Moncton (Mr. Thomas) has championed the need of CNR employees for proper pension plans, and I think most of his statements are also fairly acceptable. The hon.

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CNR Pension Fund

member for London East (Mr. Turner) did an excellent job of reviewing the history of the whole matter.

There are so many facets to this whole question of pensions that if we plumped for this investigation or inquiry into the Canadian National employees' pensions it would not necessarily follow that it would look after employees of the Canadian Pacific Railway and all the other railways that come into the picture in Canada. I do not think this is a high enough term of reference. The whole question of railway employees should be looked at in a comprehensive manner and not narrowed down to employees of one company.

What is more, this inquiry is not only a matter of railway pensions. That is a very narrow view to take. Railway pensions are a very small part of the whole pension scheme in Canada. Railway pensions at the present time indirectly come under the aegis of the Department of Labour, although CNR is a Crown corporation. There are other matters that must fit into each other and make them dovetail. We have the instance of the unions and employees in general.

I have been talking to union representatives in my constituency. Although they are not railway unions, they have the same problems. They are pushing for proper wages and pensions for their union members. I have taken up their representations with the Minister of National Health and Welfare (Mr. Lalonde). Their questions were mainly about how their company plans for pension on retirement fit in with the Canada Pension Plan and old age security in general plus the guaranteed income supplement. They were worried about the possibility of a reduction in the amount of GIS. That is a very big question which worries everyone.

As we get further along with our social security program in the next few years we will realize that the hon. member for Winnipeg North Centre has been pushing for a very good point, namely, a guaranteed annual income for Canadians and lowering of the pensionable age. I am in favour of both. However, you cannot take them out of context with the other types of retirement plans, both private and those of industrial companies. The main point is not just saying we have to raise pensions to give people more money on which to retire. That has to be part of a comprehensive review of the over-all picture of inflation in the economy in general as well as the size of contributions, the rise in the cost of living and the rise in the inflationary rate. A great many things have to come into this discussion which I have not mentioned at all today.

With regard to the question of social security, as hon. members know there has been a gradual increase over the past few years. We have made a great surge forward by recognizing the needs of people through the increasing cost of living. The government has taken cognizance of these facts. Under the Minister of National Health and Welfare we have not only had the introduction of the bills which members know about, but the increase in the old age pension and the indexing. The Minister of Finance (Mr. Turner) comes into the picture with a reduction in the number of people on the income tax rolls and increased deductions. In other words, it has been made much easier for people when they reach retirement age.

It is important to realize that the aim of the Minister of National Health and Welfare is to take a very comprehensive view of the whole matter of social security. His working paper, the orange booklet which members know about, indicates that he is taking a comprehensive view. We will be debating many recommendations contained in it. The situation will certainly change from time to time and from year to year. There is no such thing as a perfect act or policy, but it is important that we have a stable approach to the policies which envisage an improvement in our social security scheme.

On the question of railway pensions, you cannot get away from the fact that there must be a comprehensive review of the whole problem and how it relates to unions. The unions have good advice for the employees. After the rail strike settlement last summer there was good arbitration. The railway workers returned to work. They are as good citizens as you or I. They simply felt they were not being properly looked after. One of the reasons the minister has not instituted this over-all review of all the railways in the pension plan is that some things are still coming out of the arbitration process. These are being discussed with the unions and employers. In my opinion, the hon. member is quite wrong in calling for this-

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
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NONE

Lucien Lamoureux (Speaker of the House of Commons)

No affiliation

Mr. Speaker:

Order, please. I have to interrupt the hon. member. It being five o'clock, pursuant to Standing Order this House stands adjourned until two o'clock on Monday afternoon.

At five o'clock the House adjourned, without question put, pursuant to Standing Order.

Monday May 6, 1974

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   CANADIAN NATIONAL RAILWAYS
Sub-subtopic:   SUGGESTED APPOINTMENT OF COMMISSIONER TO EVALUATE PENSION FUND
Permalink

May 3, 1974