May 3, 1974 (29th Parliament, 2nd Session)


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.

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