Mr. Boulanger:

I said you should read the court cases.

Mr. Rae:

I have read the court cases.

Mr. Boulanger:

How many in the last year?

The Acting Speaker (Mr. Turner):

Order, please. I regret to inform the hon. member that his allotted time has expired. He may continue with the unanimous consent of the House.

No.

Mr. Jacques Lavoie (Hochelaga):

Mr. Speaker, I rise to speak on this clause because it seems to me there is surely a contradiction here. Indeed, reference is made to overpayments, as referred to also under part VIII or clause 14, if your prefer, about which an amendment has been introduced and on which I will have an opportunity to speak. In any case, Mr. Speaker, what is important is the problem as it relates to unemployment insurance, and it is obvious that this problem preoccupies all members.

When people come to see us-of course, we are there to look after them and we try to do a good job-sometimes that is extremely difficult. I am not blaming the minister. I know he is doing what he can. 1 know also opposition members are

(Mr. Rae ]

there, more often to criticize rather than suggest practical amendments to the legislation, but it seems to me the following could have been taken into account but the minister will probably be able in spite of the bill to take into account the fact that at a certain point when people come and see us and say: Young people do not want to work, they prefer to live off social welfare, that is not true, Mr. Speaker. There are some but not many. Often, Mr. Speaker, young people who come to see us want to work. That is not complicated but it seems to me that we should be providing more training whether of an academic nature or in other areas where young and older people also have access. There is often talk, Mr. Speaker, of managing to provide full employment. That is not complicated. It is possible in this country.

I have spoken about this before, and I will come back to it. I will ask you, Mr. Speaker, if what I say is out of order, to tell me. I think that young people, when someone receives-and I have talked about this before the parliamentary committee- and the hon. member for Nickel Belt (Mr. Rodriguez) knows that, just like all the others. I simply mentioned that we want to save money. It is obvious that the government must cut expenses one way or another but, Mr. Speaker, I would not like to penalize people who are unemployed against their will and who have no other choice. And the way it is, those people will in fact be penalized. Therefore, it seems to me that we should have a closer look into that situation in order to prevent those people from being penalized later. So, it is true that we must save money.

Obviously, I will talk about clause 5 which says that we are going to take the 66% per cent and make it 60 per cent of the income to save 6% per cent. But if, for instance, we tell someone who earns $100 a week at a rate of $5 an hour that he is going to work 20 hours a week under Canada Works or other projects, according to what the minister decides, it seems to me that will allow us to encourage people to go to work, and that we will in fact discourage them from depending on unemployment insurance.

It seems to me that only then can this becomes truly concrete. If we want to pass legislation, we must be reasonable. We should not penalize people who have no business being penalized. I have nothing against clause 1 as such, but I wonder whether this clause could not be broken up in two since it mentions part VIII which comes under clause 14. There seems to be a contradiction somewhere. I am not a lawyer, I am a simple citizen like everyone else, but I am trying to understand. Mr. Speaker, there is something which does not seem clear in all this. If someone in the House can clarify this for me, I would like him to do so because I want to understand and to participate with all my colleagues on both sides of the House in passing bills which will benefit all Canadians. After all, they are the ones who contribute, they are the ones who pay our salaries, they are the ones who pay for unemployment insurance. As a matter of fact, we should not even call it unemployment insurance, but rather employment insurance. In

December 18, 1978

my opinion, it is time that we stop talking about unemployment all the time. We should talk about employment instead.

Mr. Speaker, this is how we can encourage people to work. Let us stop talking about unemployment and telling them: You are like this or like that. We talk about that too much, even in this House. We create psychological problems for the people when we should be trying to do the opposite. We should encourage people and show them that there are not only bad things in this country, but also some good. We must try to strike a balance.

In any case, Mr. Speaker, I hope that this clause will be amended, unless the minister can provide further clarification. I believe there is some confusion between clause 1 and part VIII. If the minister can explain this and make me understand this clause, I may be able to support him.

Mr. Arnold Peters (Timiskaming):

Mr. Speaker, as has been mentioned, this bill received considerable attention in the committee and some references have been made to the relationship of various committee members to the bill as well as to the fact that the representation on the committee was not necessarily fair or equitable. I presume the hon. member for Hochelaga (Mr. Lavoie), who has just spoken, had that in mind when he made his comments because he also comes from an area where unemployment is a considerable problem and where the problems of the individual become more apparent than the $1 billion, in nice round figures, which the government has decided it wants to save.

It is all very simple, Mr. Speaker, and it has not much to do with employment. Nor has it much to do with unemployment, I suppose. It involves every Canadian, and there are one million of them who are unemployed. Individually they believe that if they go through the various stages which they are asked to go through to locate a job, then they have fulfilled their obligation, but that the government has not fulfilled its obligation in making work available for them. Because they have done what they are supposed to do-when they were working they paid money into the insurance fund-now that they are unemployed, they should be able to receive their benefits.

That is the problem as seen from the point of view of the individual. When we look at the problem from the point of view of the country as a whole, we are ashamed to admit that we have one million unemployed and that we have to raise $2 billion to add to the insurance fund which was established a number of years ago when we thought that a 4 per cent rate of unemployment was too high. When the individual looks at this plan, he hears the government saying to him: "No, Joe, we will change the rules now; although you have been paying in for years, your benefits will change now."

There is another group of people who are watching the individual, Joe Doe, and wondering what these changes will mean to Joe Doe in relation to them. I am referring to the municipalities of this country. The government and the Con-

Unemployment Insurance Act

servative party are saying that there are many people who abuse the unemployment insurance program. They say that every day, and I am sure most Canadians are saying that. It is quite true that many people in organized labour, as well as housewives and people on the street, do say that. Everybody knows somebody who knows somebody who has a friend who has taken advantage of the unemployment insurance program.

That may be true, and if it is, it is a pretty sad state of affairs; but we members of parliament can plug those loopholes if they are as broad as people seem to think they are. But that is not what the government is doing. The government has said: "We must get rid of the expenditures; we must cut out SI billion." If, because we have an excess of unemployment we are paying out more than the amount for which the plan was originally designed, and if, out of that $2 billion, there is a waste of 25 per cent, or half a billion dollars, then the other half will have to be built up by the municipalities because we are saying that the need is still there and will have to be met in some way.

It is very interesting that the various provincial governments have indicated that there would be a large drain on their treasuries and they were not sure how large it would be. The figures varied anywhere from $10 million to $50 million in some of the provinces. That seems to be quite a large sum to be playing with.

I think the plan has been unfair in another way. The minister indicated that we should have had some serious, intelligent discussion of the bill. Surely one or two good ideas have been put forward by the ten witnesses who appeared before the committee, and surely the minister would agree that some cogent arguments were put forward by one or two of the witnesses on some aspects of the bill. Surely the minister will admit also that the hon. member for Hochelaga had a good point to make, that his parliamentary secretary who gives him advice had some good points to make somewhere along the line, or even that some good amendments were put forward at some time in the back rooms.

The minister himself did not amend the bill in any way and he did not make any major concessions on any important aspects of the bill. To be fair to the minister, let me point out that he toyed with one part of the bill that is probably more complicated than any other, and that is the totally new concept of the two-tier system. I think the minister would agree that the new concept, to be realistic, would have to be considered in a pretty broad philosophical way rather than by way of an amendment to the existing act. If the implementation of the two-tier payment system were to be considered seriously, it would have to be considered initially from a philosophical point of view and new legislation would have to be brought forward. In my opinion, the minister did not consider any of the proposals put forward by the witnesses who came before the committee, and he did not want to hear any more witnesses because he did not listen to the ten who had been before the committee. There is no point listening to 100 witnesses if you decide not to listen to one.

May I call it five o'clock, Mr. Speaker?

2228

December 18, 1978

Compensation

Mr. Deputy Speaker:

Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Medicine Hat (Mr. Hargrave)-Agriculture-Request that beef import quotas will not be increased; the hon. member for Eglinton (Mr. Parker)-Employment- Clarification of provisions of Outreach program.

It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions and public bills.

Mr. James Gillies (Don Valley) moved:

That, in the opinion of this House, the government should consider the advisability of introducing legislation to limit the total compensation payable to (a) a public servant (b) an officer or employee of a Crown corporation (c) an officer or employee of an agency coming under the jurisdiction of the government, to an amount no greater than the maximum salary and allowance paid to the elected representative who receives the highest salary and allowance under the terms of the Senate and House of Commons Act.

He said: Mr. Speaker, I hope this motion will be supported by a number of members of the House for a number of reasons.

First, I have said many times in the House that because we operate under the British parliamentary system we have not built into our legislative processes any system of checks and balances. Moreover, because of the changes that have taken place in the rules of the House over the course of the last decade, members of parliament have been unable to hold up supply to the government, one of the fundamental privileges of any opposition. Consequently one of the fundamental ways in which a government should be held accountable for what it does is non-existent in our parliament.

I have also often made the point in the House, as have many of my colleagues, that in the examination of estimates before the committees of this House we are not able, for a variety of reasons, to do an adequate job of finding out where the taxpayers' money is spent. Consequently, it is important that we begin to build into our system some checks and balances to take the place of those checks and balances we no longer have.

This proposal today introduces one check, albeit a rather modest one in terms of the total number of dollars involved. However, it is symbolically an important check on the way the taxpayers' money should be spent.

If we legislate that no employee of the Government of Canada, or of a Crown corporation or agency of the government, can receive compensation greater than the highest compensation paid to an elected official of this country, namely that of the Prime Minister, we have set a standard for salary determinations which I think is important. Can one argue affirmatively that any member of the public service or of an agency of the goverment should be paid more than the Prime Minister of Canada?

My second reason for introducing this motion is that we have had great difficulty over the years establishing appropriate compensation for senior executive members of the public service. As hon. members know, a variety of committees have been set up to examine compensation for public servants and to set up adequate guidelines. However, this has always been extremely difficult to do. These committees tried to have some kind of comparability with similar salaries in the private sector, but the problem is that the jobs are not the same.

I have had friends point out to me that a person who fulfils the responsibility of deputy minister has only half the job of a senior vice-president or senior executive officer in the private sector. In the private sector, the man with that responsibility has to raise the money he spends as well as oversee the way in which it is spent. The deputy minister, on the other hand, does not have the problem of raising the money; he only has the problem of spending it.

I am not suggesting a deputy minister might not have other duties that a man in the private sector does not have. The reality is that it is difficult to make comparable decisions as to how these positions should be compared.

The third reason for bringing forth this suggestion is that we are in a period of restraint. Anyone who has been in this House of Commons for a number of years knows that politicians do not raise their compensation without considerable debate. They do not do so without assessing whether the people of Canada really believe members should be paid more for the services they provide to their constituents and the people in general. There is always heated discussion when the question of payment of members of parliament comes forward. That is not the case with the establishment of compensation for executives on the administrative side of government. There is no public debate on the question of compensation for a very large number of government, agency and Crown corporation employees.

In the last ten years, as the figures show, the increase in the number of appointments of people filling executive level jobs has been larger than in any single area of employment in the federal government in relative terms, and the public knows little about the salaries of these employees.

The fourth reason for supporting this motion is that it would bring public accountability to the establishment of salaries in

December 18, 1978

the public sector and Crown corporations. On occasion we try to find out what the compensation in certain activities paid for by the public happens to be. It is difficult to get that information. Too often the responses are very much like that made by Senator Marchand when he was minister of transport. When asked on the order paper to provide to members of parliament the levels of compensation for senior officers in Air Canada, the reply was that it was not in the interest of the corporation to make that information available, that it would be competitively difficult because the private sector did not make such information available, and it would be bad for morale. The shareholders of that corporation are the people of Canada and yet they are not given this information.

When Air Canada's major competitor, CP Air, decided to do some financing in the United States, it was forced by the SEC to make that information available and it did so. Why should the people of Canada not know what the compensation is in this corporation and in fact all agencies in which they are the major shareholders? If my proposal were adopted, the people of Canada would know what the compensation is for a large number of people who work for them.

Fifth, such a measure would help to redress some of the imbalance which has developed between the legislative arm of the government and the administrative arm. Politicians constantly hear that the government is really run by the public service. We are asked why politicians do not have more control over the public service.

If a situation develops where the deputy minister is paid more than the minister, what can one expect? Who in the eyes of the people of this country is worth more in the service to this country, the deputy minister who is paid more, or the minister? Presumably it is the deputy minister. While this is not a significant factor, the imbalance needs to be redressed. We need some way to ensure that the legislative element is in control. One of the ways this can be looked at is through the compensation system.

I am sure most members know that in the United States a system limiting compensation has been in effect for many years. In fact, it has been in effect throughout the history of that nation. There have been many studies, and suggestions that it is very difficult in that country to get the type of public servants that are needed, but the system prevails.

Under the administration of President Ford and the administration of President Carter, changes have been made in the compensation to senior executives in the public service, but in no case have they been made in such a way that public servants are paid more than the elected representatives. There is no one in the United States public service who earns more than the senior elected officials in the United States. There are very few people in the public service of the United States who earn more than cabinet ministers.

To give some idea of the way in which the situation has got out of balance, at the present time a deputy minister in Canada can earn over 18 per cent more than a senior undersecretary in the government of the United States. There may be very good and just reasons why senior public servants in this

Compensation

country should be compensated substantially higher than public servants in the United States.

I want to be very clear that I am not arguing or suggesting that our public servants are necessarily over-compensated. What I am arguing and suggesting is that we do not have in place in this country a built-in way of keeping sound control over the payment of senior public servants and that our system needs it. I would argue that the appointment of ad hoc committees to try and bring in studies of comparability with regard to compensation is not as satisfactory as built-in control.

If we are concerned about restraint and a proper balance between the legislative and administration function in the nation and a proper utilization of the resources of this country, what better way to start than by putting in a built-in check on the use of the taxpayers' money and that no legislating employee of the government or any of its agencies may be paid more than the Prime Minister of Canada? What a sensible solution! What a sensible way!

I am not arguing in favour of an increase in pay for legislators; I am arguing that under the present system there should be some sort of built-in control, some built-in guideline, so that we might know where we are going. How foolish it is to have a system under which deputy ministers are paid more than ministers. What kind of a system is that? We in this country badly need controls built in in the way in which compensation is paid to employees of the public service. We need controls built in to the whole system of expenditure in this country. I am arguing that the government give serious consideration to passing legislation limiting the amount which any public servant, any employee of any agency of the government, can receive. They will not be permitted to earn more than the Prime Minister of Canada gets. I can think of nothing which would do more, symbolically, to improve the legislative posture in this nation and I urge every member here to support this motion.

Mr. Donald J. Johnston (Westmount):

Mr. Speaker, I found this motion interesting and in some respects unusual, coming, as it does, from the hon. member for Don Valley (Mr. Gillies). I do not discard it out of hand because I think there is much merit to some of the points he has made, but I believe the mischief he is trying to correct would not be affected by the adoption of the motion he proposes.

We are considering a motion which essentially excludes the marketplace; it curtails the right of the individual who offers his services to a Crown corporation in an executive capacity to negotiate a level of remuneration which he might expect to receive in the private sector. Under its terms, no man or woman could be hired by the government or by one of its agencies at a higher salary than that paid to the Prime Minister (Mr. Trudeau). I suggest this would place a government in an untenable position and make it impossible to obtain people with the competence we require in, for example, Crown corporations which play an increasingly important role in this

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December 18, 1978

Compensation

country. It would concern me very much if Air Canada, for instance, could not compete in the marketplace for the skills and talent required to give the people the best service available.

Mr. Gillies:

That is why you hired Bryce Mackasey.

Oh, oh!

Mr. Johnston (Westmount):

I am glad to see hon. members have a sense of humour. I detected an ambiguity in the remarks of the hon. member. Are we being asked to increase the level of remuneration of legislators in this country, specifically of the Prime Minister, since that is to be the touchstone used to determine maximum compensation to be paid elsewhere? Or are we being asked to roll back the remuneration paid to senior civil servants, presidents of Crown corporations and so on? I gather from the comments made by the hon. member that it is the latter.

I personally favour the hon. gentleman's view because the people who are involved in the political process are not essentially seeking remuneration. As the hon. gentleman knows very well, "Man does not live by bread alone", and nothing could be truer of the representatives of the people involved in the legislative process. I would suggest, however, when we turn to the people who are serving as employees of government agencies and Crown corporations, that this is not the case. The hon. member is seeking a form of wage parity which does not accord with what 1 understand to be a classical philosophy of the Conservative party, one to which I happen to subscribe myself, namely that we are not to be envious of what is paid to others, of what is paid to members of the public service.

I share the view of the Auditor General, expressed some weeks ago, that we should be prepared to remunerate the public servants of this country by paying the highest wages required to obtain the best possible people, while at the same time we should retain the right to terminate those services in the manner adopted by the private sector. I have no doubt that, notwithstanding the argument put forward by the hon. member, deputy ministers and senior officials in Crown corporations and government agencies discharge responsibilities which in many instances are as great as those undertaken in the private sector, sometimes greater.

The hon. gentleman made the point that officials in the public service wear only one hat-the spending hat-whereas in the private sector they have responsibility both for spending and for raising money. I do not think the analogy holds. I believe there are many officials of major corporations whose roles are almost identical to those of the deputy ministers of many of our departments. I believe that at the top level of responsibility our public servants are probably underpaid, not overpaid as the hon. member suggests. It may be that adjustments ought to be made elsewhere in the public service, but they should not affect senior public servants nor should they affect presidents and senior executive officers of Crown corporations.

I return to my view that if this motion were adopted we would not be able to attract necessary skills into the public service.

Mr. Gillies:

Let's try it.

Mr. Johnston (Westmount):

The hon. member says, "Let's try it", but I am personally not prepared to take the chance of losing some of the most able people in the country on this issue of remuneration. I think the Canadian people are prepared to pay according to responsibility assumed.

The hon. member has drawn upon the American experience, but the American experience, fortunately or unfortunately- and there are arguments both ways-is quite unlike our own in that policymakers in the United States change, by and large, with change in the administration. As we know, federal administrations in the United States change every four years. The difference is that people who assume the roles of undersecretaries, assistant undersecretaries and others in terms of the policymaking apparatus in the United States are essentially servants of the people during limited periods of time. It is a responsibility and an honour to take such positions, but these people are basically private sector people who return to the private sector at the end of a given four-year period. Some of them take leaves of absences from universities, businesses and so forth. In fact, in many respects I suggest that that aspect of the U.S. system is healthy because there is a constant interchange between private sector and public sector personnel due to this process.

There are very few major law firms, investment houses or corporations in the United States which do not have among their ranks some people who have served government in senior capacities in one or more administrations. Unfortunately-and I say "unfortunately" because our system as it now operates is not compatible with that kind of change-we have basically a permanent civil service in this country. There are great advantages and disadvantages to our system, but I suggest that in the absence of undertaking very fundamental reforms in the entire government apparatus in Canada it would be virtually impossible to adopt this motion at this time. It would have a severe impact and the civil service would experience severe dislocation, not to speak of Crown corporations and Crown agencies.

Hence I am drawn to the conclusion that as much as I agree with the motives which obviously underlie this motion, I cannot accept it as being a reasonable means of accomplishing the objectives the hon. member for Don Valley wishes to accomplish.

I say in conclusion that we must never forget the role of the elected representative of the people, the role which each of us in this chamber sees as being very distinct from that of the public servant. There is no reason to suggest that if any limitation is to be placed upon the remuneration paid to public servants, it should take the form of wage parity with the people

December 18, 1978

who represent the people of Canada. I really do not think the people of Canada believe that a deputy minister is more important than a minister just because the deputy is paid more. I believe that the people of Canada and the people in this House are willing to pay for performance.

I also believe-and the Auditor General endorses this-that if performance is not forthcoming, that man should go. That is one part of our system we should look at in terms of establishing checks. I would much prefer to see our public servants and the officers of Crown corporations and Crown agencies paid salaries, remuneration and benefits which are comparable with those paid to men of equal ability in the private sector, with the knowledge that, if performance is not forthcoming, the people of Canada have a right to terminate services in the same way they are terminated in the private sector.

Mr. Ray Hnatyshyn (Saskatoon-Biggar):

Mr. Speaker, I am anxious that this matter be dealt with during the course of this private members' hour so I will confine my remarks to a minimal length of time.

I was glad to hear the comments of the hon. member for Westmount (Mr. Johnston), which in essence indicated to me that while the hon. member has certain reservations as to what would necessarily flow from this resolution, by and large he is very much interested in and sympathetic with the objectives set forth by my colleague the hon. member for Don Valley (Mr. Gillies), who, incidentally, is to be congratulated for bringing this matter to the attention of the House.

Generally speaking, I think all of us in this House feel that this resolution has great merit, that it should receive some very serious consideration in terms of the operation of the public service vis-a-vis the operation of the legislative arm of our parliamentary system. I suggest, however, that there is a problem with respect to defining precisely what effect this resolution might have on the whole question of secrecy in government and in government agencies. As the hon. member for Don Valley pointed out in his introductory remarks, very often we in parliament inquire about the salaries of chief executive officers of Crown corporations or government agencies and are told by ministers responsible over and over again that that information is confidential and not available to the people of Canada.

Perhaps the hon. member argued this matter on the basis of principle, but we really do not know in pragmatic terms exactly how many senior public servants and chief executive officers of Crown corporations might be affected. The most immediate example of which I can think is the recent appointment of the chairman of the board of Air Canada. I think there is information, not through the House but through press reports, to the effect that this new chairman qualifies to be part of a very elite group of chief executive officers of Crown corporations and that he will receive a salary and other incidental benefits which will bring his level of total remuneration above that of the person who was responsible for his appointment, namely the Prime Minister (Mr. Trudeau).

The main reason I join in this debate is that I think most hon. members feel that this subject matter should receive

Compensation

detailed consideration in a committee of this House. That would provide an opportunity for us to examine the context within which this motion might be beneficial to our system in an institutional manner. That is to say, are there ways by which we in parliament can come forward with suggestions or amendments in accordance with the motives which brought the hon. member for Don Valley to put this motion before the House? Are there specific suggestions, guidelines or legislative provisions which could be brought forward for consideration and which might bring about the perspective I know we all want to have with respect to this division between legislative and executive or, indeed, public servant pay scales and the relationship which exists between these two segments of our system of government?

Under those circumstances, I would like to propose an amendment to the motion before us. I propose to move, seconded by the hon. member for St. John's East (Mr. McGrath):

That this motion be not now further debated but be referred to the Standing Committee on Finance, Trade and Economic Affairs for consideration and report back to this House.