Will the MPs Get Their Pensions?

BLAIR FRASER April 1 1952

Will the MPs Get Their Pensions?

BLAIR FRASER April 1 1952

Will the MPs Get Their Pensions?



Maclean’s Ottawa Editor

BACKBENCHERS on both sides of the House are looking hopefully to the Government these days. If they are good boys and do all their homework the Government may bring in a bill at this session to provide pensions for members of parliament.

Bona Arsenault, MP for Bonaventure and an insurance man by occupation, has been working for this for years. Arsenault is a Liberal now, but he was a Progressive Conservative as recently as 1944 — for two years, in fact, he was president of the PC Association for Quebec Province. He had a fight with the party, got elected in 1945 as an Independent, supported the Government from the start and became officially a Liberal in 1949, but he retains a considerable circle of friends in the Opposition. In this pension project he has been working as a nonpartisan with allies in several parties.

Arsenault’s own pension bill, the one he drafted for the guidance of the Government, would have set up a pension scheme almost as lavish as the Canadian Senate. Members would have contributed six percent of their four - thousand - dollar sessional indemnity each year. In return they’d have drawn a pension equal to five percent of the indemnity for each year of parliamentary service. A retiring member, in other words, would have got almost as much each year as the aggregate of all he had contributed.

Needless to say, the Government is not buying this pensioner’s dream. On the other hand it does realize the urgency of doing something to attract competent men to political life.

Until a few years ago MPs could count on having at least half the year at home, which meant that a man could carry on his own business without too much trouble and loss. Lately, Parliament has become more and more a year-round job. Those who live near Ottawa may carry on their private occupations on a twoand-a-half-day week during the session (lawyers, especially, can do chores for many a client while they are here) but the Maritimers and westerners are not so lucky. Except for the short break at Easter they’re away from home continuously while the session lasts. Naturally they don’t like it, and what’s more they can’t afford it.

Political parties are having more and more trouble finding good candidates in ridings west of the Lakes and east of Quebec City—they have to beg men to run. And one objection that keeps cropping up, when they try to recruit able young men, is this prospect of a destitute old age: ‘‘How can I earn enough to retire on if I spend two t hirds of every year in Ottawa?”

And so the Government has taken Bona Arsenault’s idea (though not his bill) and set its own experts to work upon a pension scheme for MPs. It is not likely to be verv lavish: the treasury’s contribution

will not be a penny more than B e member’s own and t he résultant pension will be only what t' e futrí will produce on a sound actuarial basis.

By general agreement t! e wv'ole matter was set aside until the universal old-age pension should be in .operation. Now, one thing which might delay it further is the attitude of the Continued on page 45

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Opposition. The Government, itself somewhat lukewarm about the idea, would not try to force such legislation through unless the House were virtually unanimous.

George Drew has no objection in principle to a pension scheme. He has the same reason as Liberal leaders to know how hard it is to keep good people in parliament. However, he’s inclined to think a couple of other reforms should be effected first. One is a general improvement of efficiency. Get the legislation ready sooner, get the committees operating earlier in the ses1 sion, get the estimates down promptly and debate them early, and Drew believes parliament could still do its year’s work in a five-month session. MPs would again have time to earn a living.

The other is a matter of priority. Drew doesn’t feel comfortable about the MPs voting themselves a pension while the fifty-four thousand “temporary” civil servants have none. These “temporaries” are the forgotten men of the government service. Many of them have held their jobs for ten years or more and have every expectation of continuing to do so indefinitely. But the number of “permanent” civil servants in each department is limited by Civil Service regulations, so that no matter how long a man may be employed he doesn’t become “permanent” until a vacancy occurs in the “permanent” ranks. Then, and not until then, he gets the pension and other 1 benefits that protect a civil servant.

Permanent civil servants contribute six percent of their salaries to a super¡ annuation fund to which the treasury : contributes a like amount, as do most employers nowadays. “Temporaries” contribute four percent to a special retirement fund of their own, but to this fund the treasury doesn’t give a dime. And when a “temporary” does become a “permanent,” he must scrape together the missing two percent and j contribute it in a lump sum to get himself into the superannuation fund.

Outside both these pension schemes are the employees of the House of Commons and Senate, who have no retirement protection at all. Some of them have worked on Parliament Hill for twenty-five years.

CCFers, especially Stanley Knowles and Angus Maclnnis, feel very strongly about this injustice and want something done about it. If the issue came up (as it would in the event of a parliamentary pension being debated) plenty of Liberals would agree with them and with George Drew that the employees ought to get their rights before MPs get theirs.

This doesn’t mean the parliamentary pension scheme will be dropped. It does mean a lot of work will have to be done first—and whether it can all be got through at the present session is open to serious question.

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Another obstacle to this or any spending scheme: Finance Minister

Douglas Abbott doesn’t think he’ll have any money to spare in 1952-53.

The budget is the Government’s best-kept secret and nobody outside a small and trusted circle knows what tax changes are coming this spring. But outsiders know enough of Doug Abbott’s personal opinions to make a few rough and general forecasts.

One is “no tax increases.” Abbott makes no secret of his resolve “never again” to levy a tax for any other reason than that the treasury needs the

money. No more “cyclical budgets" for him. He also thinks (believe it or not) that high taxation saps a man’s incentive to work and a company’s incentive to cut costs and avoid waste. He thinks Canadian taxes are already near, if not past, the point where they’re a drag on production.

The second rough forecast is “no deficit.” Abbott believes in pay-asyou-go budgets, at least in time of prosperity. He knows too well that a sudden downturn in business might throw him into a deficit position willynilly, but he won’t budget for it.

To people hypnotized by the curre budget surplus these forecasts may seem as obvious as predicting that the sun will rise tomorrow. They aren’t. Rightly or wrongly (they’ve been wrong for several years running now) Abbott’s economic wizards think he’s going to be hard pressed for money this year.

The surplus isn’t as big as it looks. Most of it consisto of money the Defense Department was unable to spend. Abbott’s own guess is that the armed services will be four hundred million dollars short of their own spending targets for 1951-52. (The services

think they will have spent more than that, but if so, it merely means the surplus will be that much smaller than the present estimate.)

This year, of course, the same production delays may keep defense spending low again—but it’s a lot less likely. Any time now, Canada’s three-year rearmament program is expected to swell like a barrage balloon. It is ; entirely possible, for example, that total expenditure in the coming fiscal year will consist of the scheduled amounts plus the four hundred millions by which it fell short last year.

* * *

Accordingly, the civilian departments of government have been going through a tighter wringer than usual ever since last autumn, when preparation of the 1952-53 estimates began. Each division chief had first of all to sell his own deputy minister on any expansion; then the deputy had to persuade the minister. Next came the much more difficult task of convincing Robert B. Bryce, secretary of the Treasury Board and professional watchdog of the public purse. And, if Bob Bryce could be converted, there still remained the Treasury Board itself—a cabinet committee of which the Minister of Finance is chairman.

Needless to say, none of these hurdles is insuperable and none of the scrutineers infallible. The commonest kind of waste and the hardest to detect is simply the perpetuation of obsolete operations: once an item of expense

i has been passed it’s usually easy to get j it through year after year after year, whether it’s needed or not. But on ! new expenditures, and on as many old expenditures as they can identify, the economizers have been at work.

The exception, of course, is National Defense. To the bitter resentment and exasperation of Abbott and his cohorts, generals and admirals are still able to write their own ticket. Nothing so bums up the Minister of Finance as to wring a few meagre drops out of the defenseless civilian departments—ten thousand dollars from Fisheries, say, j and fifty thousand dollars from Indian I Affairs—and then see the defense plan-

ners casually tossing millions into some international pot which Abbott isn’t permitted to examine.

But although he can’t check up the generals in detail, Abbott is taking as rugged a line with them as he can. If they want to expand in one direction he tries to make them find the money by shrinking somewhere else. Dreams, for example, of a thirty-million-dollar “Canadian Pentagon” building will not be fulfilled and, if Canada puts more into NATO forces abroad, she will put less into military establishment at home.

But none of these things will prevent the 1952-53 budget from being colossal. Costs have gone up all across the board —civil-service salaries have been increased, materials of all sorts have become more expensive, new services and benefits have been introduced. The universal old-age pension, to name the biggest example, started only in January although the extra sales tax to pay for it had begun nine months before —that meant an additional seventyone million dollars in the surplus of 1951-52.

Altogether, more than one and a half billion dollars of the federal budget are made up of “transfer payments”— family allowances, pensions to the aged and to veterans, interest on the national debt and so on. The fraction in which economy can effect any change is not large, and it gets smaller every year.

All of which reasons lead up to a third rough forecast for the new budget: “No tax cuts, either.” That doesn’t mean, of course, that mistakes won’t be corrected; it’s as nearly a certainty as a budget forecast can be that the cigarette tax will be reduced, for one, and perhaps other such specific levies. Abbott said last year, too, that the income and corporation tax would be overhauled this year instead of carrying on with a twenty percent surcharge on a previous tax rate, and the overhaul may include some downward adjustments here and there. But generally speaking, surplus or no surplus, the chances of tax reduction are not regarded here as particularly good. if