NDVA Committee Meeting

STANDING COMMITTEE ON NATIONAL DEFENCE AND VETERANS AFFAIRS

COMITÉ PERMANENT DE LA DÉFENSE NATIONALE ET DES ANCIENS COMBATTANTS

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 19, 1998

• 0905

[English]

The Chairman (Mr. Pat O'Brien (London—Fanshawe, Lib.)): We will begin the Thursday, November 19, meeting of the committee.

Let me first offer congratulations to our colleague, Mr. René Laurin, who was last night elected vice-chair of the Commonwealth Parliamentary Association. Félicitations, monsieur Laurin.

Mr. René Laurin (Joliette, BQ): Merci, Pat.

The Chairman: We'll go right to our first order of business today, the Armed Forces Pensioners'/Annuitants Association of Canada witnesses. I'd like to indicate to the committee members that we have two pieces of very important business following the witnesses, so if you could try to be here at that time... One involves the Germany discussion we had, and there are a couple of other matters.

If the witnesses would come forward, please, we'll begin. Who's the lead speaker, please?

Mr. Ian McBride (Legal Counsel, Armed Forces Pensioners'/Annuitants Association of Canada): My name is Ian McBride. I won't be the lead speaker. I'll just introduce the others. Mr. Halayko will be the lead speaker.

The Chairman: All right, please do. Thank you.

Mr. Ian McBride: Good morning, Mr. Chair and members of the committee. This is a presentation by the Armed Forces Pensioners'/Annuitants Association of Canada, an association that has 25,000 registered members and represents the interests of the Canadian Forces retirees and their survivors.

The people here to present today are Mr. Halayko, who is the national chairman; Major Code, who is the liaison officer; and Mrs. Rapp, who is vice-chairman of the association's military widows section.

Two issues will be addressed in the presentation today. The issues are, first, the Canadian Forces retirees and their survivors and the issues that affect them most particularly. The second part of the presentation is the problems that are found in the present-day Canadian Forces and some suggestions that can be made by this organization to attempt to address those problems.

Without further ado, I turn this over to Mr. Halayko, the national chairman, who will give the presentation.

The Chairman: You're all welcome, of course. As you begin, I would encourage you to be somewhat succinct. We do get witnesses who go on for quite a length of time and then they're dismayed at the end when there isn't enough time for questions from the members. I would encourage you to allow a lot of time for a good round of questions. We often go one round to each side and then a second round, time permitting.

I would also remind you that the issue at hand is the armed forces pensioners and not the Canadian Forces. I read your brief and you had some interesting comments, but we're really here to hear you speak to the armed forces pensioners' situation. With that, I would welcome your comments.

• 0910

Mr. E.W. Halayko (Chairman, Armed Forces Pensioners'/Annuitants Association of Canada): Good morning, Mr. Chairman, ladies and gentlemen. You know me, Pat, I'm rather succinct and blunt. We've met in the past.

The Chairman: I can be the same way, so it will make for a good discussion.

Mr. E.W. Halayko: My first major issue is the Canadian Forces Superannuation Act and the account they're in. It's not a fund; it's an account. It stands at well over $40 billion today, and that money belongs to 150,000 people and nobody else—60,000 people in a uniform who contribute to it and the other 75,000 or 80,000 retirees. It is their money.

What has happened in the past is that without any consultation, attempts have been made to de-index it. That was terminated.

Last year the Government of Canada took $3 billion from a so-called surplus in the Canadian Forces superannuation account. There's been a total of $5 billion taken out of the three accounts, the RCMP's, the civil service's, and ours, but I'm only here to address our account. Three billion dollars was removed from that account.

On January 17 of next year there will be a court case. We are going after the crown to recover that money, with interest. I don't know how successful we will be because it claims there's a surplus. One group of people, when we asked for an improvement to our superannuation, said there's no money. Another group from the same department, who probably graduated from a different bean-counting school, said there's a surplus, so let's help ourselves. Three billion dollars is just too much money to take away, and there was no consultation done on that one.

Since we have initiated this litigation, no further moneys have been removed from the accounts, probably because of the litigation. We understood there was an intent to take another $20 billion out of the three accounts. So now, instead of attacking us, the government is after the employment insurance account, which is a separate issue.

The Chairman: Yes, please, keep to the issue.

Mr. E.W. Halayko: I just wanted to bring that up.

The Chairman: I'd encourage you to do that.

Mr. E.W. Halayko: Age and sexual discrimination. In this day and age our Canadian women are still being called—and this is on record—paramours, gold diggers, and performers of death bed marriages to service personnel who are over 60 years of age. This too will be appearing before the Supreme Court of Canada some time next year. No date has been set for this litigation.

It would be so much simpler to just introduce a regulation and allow our people, male or female, who reach the age of 60 to marry. I'm not talking about remarrying; some of them are marrying for the first time. I was talking to a nursing sister yesterday at a meeting and she was 61 when she married for the first time. There are people who marry for the first time when they're 60. But that doesn't matter. It is their money; they've contributed, and everybody contributes the same amount. Why can't they have the survivor's benefit regardless of when they marry? How dare we have anybody call our women in Canada gold diggers and paramours. This is disgraceful. Again, when we asked for this, there was no money—we're back to the surplus—but there were surplus moneys to take out of our account.

The Canada Pension Plan and Ontario municipal employee's retirement system don't say anything about age discrimination. You can marry any time you want.

Continuing on discrimination, this is another sore point—and I'm probably going to upset the members of this committee, but we've gone on this issue before. The Canada Pension Plan plus the Canada Pension Benefits Standards Act say that a 60% survivor's benefit must be made available to anybody participating in government contracts, and so on and so forth. Yet our survivors are only allowed a 50% survivor's benefit. Oddly enough, under the Members of Parliament Retirement Allowance Act, they are allowed a “mere” three-fifths.

• 0915

The wording in this is not mine; it's our lawyer's.

The subterfuge by our elected federal politicians disguises the fact that their survivors collect a 60% benefit not available to the survivors of the CF retirees.

I'll leave that there, except to say that OMERS recently announced an increase to 66 2/3%, but we must remember that OMERS is fully funded and managed externally, whereas ours is an internally managed account and we have no say on its disposition, unfortunately.

On the Unemployment Insurance Act, no wonder we have trouble with people getting out of the forces right now, not happy and so on. Since 1968 everybody in the Canadian Forces has had to contribute to the then unemployment insurance account, now employment insurance account, yet upon retirement they are not entitled to the benefits, effective 1984. Why?

At one time all Canadian Forces retirees, regardless of whether they had a second-career job or not, lost all their entitlement. It took a suicide and a march on the Hill to partially overturn the act. So after a second career a Canadian Forces retiree again becomes eligible for unemployment insurance benefits. But the first-time retiree gets nothing. People can pay for up to 35 years into the account and get nothing out of it.

From numbers that were quoted in the House of Commons, the government itself did not contribute one penny toward this account—they should have, but they didn't—and I'm going back about five years. In a two-year period, the surplus that had accumulated from the contributions by the members of the forces and the employer's contributions had exceeded $300 million. Why can't our people have something they paid for? If you tried this in private industry, you know what would have happened. Somebody would have visited the Crowbar Hotel for a while for fraud. Yet this happened with impunity. It would help even the Canadian Forces by reinstating that entitlement.

There's another sore point with the retirees. It seems to me things have changed since I got out of the forces some 30-odd years ago. People seem to be kicked out of the forces on a whim, or if they have a category they have 30 days and so on. Five or six years after people have retired they get letters, without prejudice, signed by the lieutenant general saying “Sorry, a mistake has been made, but you must pay back so much money”. We get correspondence from our members asking what they can do.

If these are clerical errors, somebody should sort them out, but why should someone, five years after the fact, who possibly doesn't have a job and only has their superannuation to live on, be stuck with a bill and ordered to pay it back and at an annual rate of 3% over and above the Bank of Canada rate? There's no apology other than the fact, without prejudice, this happened, but you will pay this money back and, bingo, it's gone.

I've had people phone me with tears in their eyes asking me what I can do. I say I don't know what I can do, but I'll try to help. But nothing has happened. Unfortunately, the people who have made those errors are either retired or posted or promoted, but nobody has been taken to task over those errors. That's not right.

In the forces there's a group dental plan, as there is the Public Service Health Care Plan, and once you retire you are allowed to participate therein. We are allowed to participate in the Public Service Health Care Plan, but as soon as a person is retired, there's no dental care. That's expensive. Our organization has arranged for dental care under a group arrangement, but it's extremely expensive. If the people could continue to contribute, or even contribute the employer's portion, to the dental plan it would still be far less than anything that's available out in the private market. We've been pursuing this for years and it has gone nowhere. That's why we had to create our own scheme.

• 0920

I think if we're allowed one scheme, we should be allowed to participate in the other one. At the same time it would be much cheaper and you would be contributing to the well-being of the people in the forces today.

Recently it was brought to our attention that there's a covert move afoot to privatize the Canadian Forces superannuation account by 2000. Nobody has been consulted from the retirees. Fortunately, we have some people serving in the military who are more than annoyed about this and have informed us. We have access to information requests in. We haven't had a response from them. Our council has also submitted an access to information request because we want to know what is going on.

If rumour is correct, effective the day legislation is brought into being, all members of the CAF will contribute to this new fund and all those from the past will be grandfathered, except that once that grandfathering clause is there, we'll never get any improvements, and as we die off... Can you imagine the popularity of anybody who stands up in the House of Commons and says they have reduced the debt by $70 billion to $100 billion? That man or woman would be a very popular person.

The Chairman: Mr. Halayko, you're speaking to rumour, using your words.

Mr. E.W. Halayko: Not quite.

The Chairman: I'm quoting your own word “rumour”. I would encourage you to deal with the known facts here today. If those rumours ever become more than that, we would have you back. But let's stick to the facts as we know them today. There are some issues that we know to be on the table. I'd encourage you to set aside rumour and do that, please.

Mr. E.W. Halayko: Okay, I'll skip rumour. It's information we've received from individuals who are still serving and have seen some of the memoranda circulating in the Department of National Defence. That's where we got the information.

The Chairman: That's just the long way of saying “rumour”. Let's set that issue aside and get on to others.

Mr. E.W. Halayko: I wanted to bring that up because we're dealing with this account of ours, which is very important.

The Chairman: We appreciate that, but this committee has to deal with the facts as it knows them.

Mr. E.W. Halayko: That's phase one. Do you want to ask questions on that, or do you want me to go on to phase two?

The Chairman: Phase one being?

Mr. E.W. Halayko: The issues of the retirees themselves.

The Chairman: Yes, we'd like you to stick to the retirees issue. Is phase two your comments on the Canadian Forces?

Mr. E.W. Halayko: Yes.

The Chairman: I'm in the hands of the committee, but I think we're here to hear your comments on the pension issue. We certainly welcome your comments in another way, and in fact we have them. If that concludes your comments on the issue you came to speak to, I'd like to—

Mr. E.W. Halayko: I came to speak on both issues and broke them into two parts. If you want, we can handle this part first and then go on to the other, or I can go right straight through. It doesn't matter.

The Chairman: You were invited to the committee as the president of the Armed Forces Pensioners' Association. You weren't invited to speak to the Canadian Forces recent SCONDVA report. You submitted some comments in writing and they've been noted. The committee is here to hear your submission and question you on phase one, as you're calling it.

If you're through with that, I'd like to go to the committee members and help you help them elucidate the issues you're here to speak to.

Mr. E.W. Halayko: Yes, go ahead.

The Chairman: I would begin with the Reform Party for 10 minutes, Mr. Hart.

Mr. Jim Hart (Okanagan—Coquihalla, Ref.): Thank you very much, and thank you for coming today to present the concerns on behalf of the Armed Forces Pensioners' Association. As a former member of the Canadian Armed Forces, I have a concern with some of the issues you raised as well.

On the EI fund, as you say, the members of the Canadian Armed Forces contribute to this fund but they cannot collect it. Are you just concerned about the people who have served 35 years? What about the folks who have served just five years or for a short period?

Mr. E.W. Halayko: I said those who have paid up to 35 years. You pay immediately.

At one time there was a plan afoot that anybody who served up to 10 years had to pay into the EI fund and then they could collect because they would not be receiving superannuation. But after that, once they were eligible for superannuation, they would no longer pay into the EI because of the superannuation.

• 0925

That superannuation seems to be a sore point. But they weren't calling it a superannuation; they were calling it a pension. Well, there's a distinction between a pension and superannuation. By definition a pension is something gratis. It's given to you by a grateful employer when you finish working for them. Superannuation or an annuity is something you paid for. You buy an annuity with your RRSPs, and that doesn't count. You can have half a dozen annuities through RRSPs and draw unemployment insurance, but you can't when you have a Canadian Forces superannuation.

There's something not right there.

Mr. Jim Hart: Well, I agree with you on that. I think there should be some change to the regulations that would allow people who now find themselves unemployed to collect EI in a fund they've contributed to for many years. I think they should be able to get benefits from that fund.

I'm also concerned about the age discrimination you raised here. I have a case in my own riding regarding a gentleman who served with the Canadian Armed Forces. His wife passed away. He's over 60 years old. He's now remarried and has been told that she will not collect survivor's benefits.

Can you talk about that just a little more? I find it absolutely absurd that a member of the Canadian Armed Forces who served and paid into the plan cannot protect his family once he's passed away.

Mr. E.W. Halayko: Well, again, the Canada Pension Benefits Standards Act says this will be done, and so on. But in our case, no. The claim has always been in the past...insufficient funds, no money, and so on.

But if there's no money, how come there was a $3 billion surplus in the account last year? I've been to the courts over this. We're talking about somewhere around $50 million and $60 million. We're not sure, because we cannot get access on just how many people are married after age 60. That information is not available to DND. It's only available to the income tax people, and of course you know that's classified, so you can't get their information.

But based on our records and projections, we figure that somewhere around the number I gave would cover those few people. There are not that many, and there's not that much money.

When you're in the forces everybody pays the same amount: 7.5% of their pay goes into the Canadian Forces superannuation, of which .5% is for indexation. But now it's all in one.

Mr. Jim Hart: Do you have any idea how they ever arrived at the age of 60?

Mr. E.W. Halayko: Let's go back to the 1900s when the first pension act was introduced. Then around 1920 in Canada they took a look at what was happening in the United States with the civil war veterans. By this time some of them were well into their 70s and 80s, and there were deathbed marriages. So someone in their wisdom said, let's have a cut-off at age 60, and there it stays.

Mr. Jim Hart: We're just about in the 21st century now, so it's time for a change, wouldn't you say?

Mr. E.W. Halayko: I agree with you. To say in this day and age that...those nice names I was calling their people... But this goes back to those days where the women were actually called gold diggers and the marriages were deathbed marriages.

Mr. Jim Hart: This change you're suggesting is not something that would be unique to this particular pension? This is common practice, isn't it?

Mr. E.W. Halayko: Yes, that's right.

Mr. Jim Hart: Survivor's benefits would be offered.

Mr. E.W. Halayko: That's right, yes. If you're under CPP and you're married or common-law—it doesn't matter—after one year, regardless of the age, your survivor is entitled to a survivor's benefit.

One of the things we have been told—and our lawyers have been told this, but unfortunately not in writing—is that if our legislation ever gets through the Supreme Court and is approved, legislation is going to be introduced so that after retirement no one will ever be allowed to marry and get a survivor's benefit.

I don't know what you would call that—a threat maybe?

Mr. Jim Hart: Thank you very much. I appreciate that.

Mr. E.W. Halayko: Okay.

The Chairman: Mr. Goldring, do you have some questions? Five minutes.

Mr. Peter Goldring (Edmonton East, Ref.): I'd like to expand on that a little. You say that with CPP the qualifications are that a person is to be married or in a common-law relationship for one year to receive survivor's benefits?

• 0930

Mr. E.W. Halayko: They'll give it immediately upon marriage, but common-law takes one year.

Mr. Peter Goldring: Common-law takes one year?

Mr. E.W. Halayko: Yes. I guess that's just to avoid these one-night stands, or whatever you want to call them.

Mr. Peter Goldring: So there is some type of a contained—

Mr. E.W. Halayko: But it is on the one-year basis.

Mr. Peter Goldring: The difficulty I could see with the age of 60 is that it just seems to be an arbitrary figure that's been picked. It kind of shows the buttress mentality of Canada's pension providers.

On the other hand, a much more fair method would be something along the lines that they are married, or married for one year, or something to indicate that the marriage has been in force and effect. That should naturally qualify a person for survivor's benefits. That's your opinion, too, is it?

Mr. E.W. Halayko: Yes. We have members who have been married or have lived together for... Well, they're now in their 80s—85 and 90. So they've lived together more than 20 years. These were not deathbed marriages. A person got married when they were 60, 61. Twenty years later they're 80 and there are no survivor's benefits. These were not gold digger things; they married for companionship and everything else that goes with a marriage.

Mr. Peter Goldring: It certainly sounds to me that this 60 figure, that arbitrary figure, would be from 100 years ago when expectations were entirely different. It certainly would not be in keeping with today's standards.

Mr. E.W. Halayko: Unfortunately, a lot of our acts do stem back to the American civil war. A lot of the basic stuff started there. Mind you, there have been changes and amendments over the years, but they start there, and this is one of them, this gold diggers bit. It's bothersome to me, because here we want women in the forces, and yet on the other hand we call women gold diggers. Balance that somehow.

Mr. Peter Goldring: I have another question. It's an observation and maybe you could comment on it. It is for the mistakes the armed forces were making by giving excess funds to the armed forces personnel. Then the armed forces were chasing the money and asking for the money to be returned and charging an interest rate if you're not Johnny-on-the-spot in returning the money. In all fairness, the person probably received it without knowing he had it, or assumed it was something he missed and accepted it honestly. I have to believe that.

My observation is that if the armed forces can charge an assessment of 3% for late repayment penalties, as suggested in your brief, would that same person not be able to assess back to the government the time and energy he spent trying to correct the government's mistake? He obviously is spending time on it, too.

Would that not be fair? In other words, I suppose it would be better if the government would not charge the penalty at all. But seeing that they are—

Mr. E.W. Halayko: Well, the penalty is 3% over and above the Government of Canada rate. So it could be 8%, or it could be anything.

As far as this charging back, we have a problem with this Canadian Forces Superannuation Act and account. The Minister of National Defence is responsible for the act and the account. However, the administration goes to the President of the Treasury Board. But the cheques are mailed out by Government Services Canada.

So when we take our complaint to National Defence and they say, whoops, that's Treasury Board, we go to Treasury Board, and they say, oh, that's the old DSS. We go around in circles.

Mr. Peter Goldring: There is a lot of running around.

Mr. E.W. Halayko: Yes, running around. In the instance of these errors, the errors were made by DND accountants. Pretty well every case has been different. But normally your superannuation is 2% per year for every year of your service. Based on that, here's your superannuation, goodbye, and you'll get your first cheque a month from now. So the person looks at it and says, this looks right; it's about what I should be getting based on the last five years. Then five years later they get a letter from DND, but it's Treasury Board that is going to take the money away from them.

Mr. Peter Goldring: Then penalize them if they're late.

Mr. E.W. Halayko: You can't fight city hall sometimes.

Mr. Peter Goldring: That's right.

I have another question here.

The Chairman: This is the last one.

Mr. Peter Goldring: Yes.

• 0935

You'll be in court in January on the surplus funds. What are the details of it? What specific date is it? What is your specific court challenge or request?

Mr. E.W. Halayko: We've been given two dates. It's not positive, but I believe it's going to be January 18 and 19. We haven't heard from the crown attorneys as to whether they agree with that date. If not, it will be later in the month. I think it would be around January 24.

There are two of us in this battle, a union and our association. The union is fighting for the recovery of the moneys that have been taken out of the public service superannuation account, while we want the recovery of the moneys taken from the Canadian Forces superannuation account. The sums are as stated. From us, $3 billion was taken. I'm not too sure about the public service amount, because a little bit was taken from the Mounties' account as well. The Mounties are not participating in this particular court action financially. They are participating as observers, but they are not contributing to the court case.

This is at the first level, so we have two more levels to go. Historically, any time an employer took any money, surplus or otherwise, from a pension account, as the civilians call it, or a superannuation account, the courts have always ruled you will put that money back. Even Conrad Black had to refund $50 million. It doesn't matter about the size of the person or the influence, as the courts have said that this is people's money and it should be returned.

Mr. Peter Goldring: So you're asking for the money back then.

Mr. E.W. Halayko: This is what we want.

We're fighting a different employer; we're fighting the government, which makes the rules. But hopefully, we'll be successful. I think we'll succeed.

If we're successful the first time, that will be appealed. We may lose on the other, but it will end up in the Supreme Court of Canada about four or five years from now. I hope I'm still alive to see it happen.

The Chairman: Thank you very much, Mr. Goldring.

[Translation]

Mr. Laurin, do you have any questions?

Mr. René Laurin: Yes, Mr. Chairman. I will give our guests a couple of moments to...

[English]

Mr. E.W. Halayko: Can we go to the next questioner until I get this undone?

The Chairman: Under the rules, we will have ten minutes of questions to the witnesses.

Mr. René Laurin: You're not alone. Many of our witnesses are always surprised that I'm speaking French.

The Chairman: We're a nation of two official languages.

Mr. René Laurin: They forgot that we have two languages in Canada.

The Chairman: No, we never want to forget that, René.

[Translation]

Mr. Laurin.

Mr. René Laurin: Mr. Halayko, my first impression of your presentation is that you are attempting to cover several things at the same time, and as a result I don't really understand what your main request is. First of all, I do not understand why you have such a bone to pick with the officials, who are administrators. Have they been highly incompetent in your case and not in others? You seem to be more dissatisfied with the officials than with the legislation as such. Are you of the opinion that your needs can be met under the Act, but that the officials are refusing to do so by misinterpreting the Act? I would like to hear your comments on that to begin with; then I will have some other questions on employment insurance.

Why this uncommon attack on the officials? You say that management has to be taken out of the hands of the Treasury Board officials. You say that the government has taken more than $3 billion of the surplus from the CFSA, without consultation, and that the ownership and management of the account must be turned over to you. Once again, you are attacking the officials. What is the reasoning behind that?

[English]

Mr. E.W. Halayko: One thing is that I don't think I was specifically picking on civil servants; I was more or less picking on those on the political side, who are the ones who pass the acts and create the legislation. The public servants are basically there to obey your orders.

I'll admit that some of them step out of line occasionally and go their own way. Sometimes they're successful and sometimes they're not.

But if we're talking about the issue of these administrative errors, those were errors that were made by clerks. It's not necessarily the civil service, as it could have been military clerks, for all we know, and pay corps officers. They call them accountants these days.

• 0940

It's true that some of these problems arise from the interpretation of the act. And as far as covering a lot of issues is concerned, these issues have been on the table for years. Some of them have been partially rectified, others have been just ignored, and in two cases now, we have to go to the court. The courts are going to cost us a fortune, when this stuff could be rectified so simply, not by an act, but by either an order in council or a regulation. We could resolve this stuff. It's our money, and yet here I am before this group more or less begging to have changes made so we can get access to our money. Is that right? Maybe I'm wrong.

[Translation]

Mr. René Laurin: I would also like to ask you about your ineligibility for EI benefits. You say that when they retire, your members are not eligible for EI. Are you the only ones in this situation? It seems to me that that is not the case. I'm thinking about teachers, among others, who contribute to EI for 32, 33 or 35 years and who are not eligible for benefits when they retire. Employment insurance is not a retirement fund, but insurance someone can benefit from when someone loses his job. I don't really understand your comment on that. If changes have to be made, they will have to be made not only for veterans, but also for teachers and for the people in all the other categories in society who are not eligible for EI when they retire.

If, after serving in the armed forces for 20 years, a soldier is laid off, it is more normal for him to have access to employment insurance, as it is now called, because he has lost his job. Maybe premiums have to be adjusted. In the army, people rarely lose their jobs or face a shortage of work.

When a soldier loses his job in the army, it is difficult for him to find another army to hire him, at least in Canada. It is sort of the same in teaching. Someone who loses a teaching job, for one reason or another, can have trouble finding another teaching job. In that case, the person is eligible for unemployment insurance. That's what it is for. Why should people also have access to employment insurance when they retire, as you are requesting?

[English]

Mr. E.W. Halayko: I have two things to say. You are not retired from the forces. You are released compulsorily for age and medical disability, and your age will be under 55. It starts anywhere from 40 years of age on. They are released, in other words fired, by virtue of the fact they're no longer needed in the forces. You're right. They cannot be employed elsewhere. There aren't too many armies that want them. Besides, what army would want somebody with, say, what we call a PULHES 4, a physique 4. He has injured himself, but not sufficiently to get a pension. He can't get workers' compensation, and he's not entitled to employment insurance. Now, I'm here to talk about the Canadian Forces retirees.

I will admit, yes, there are the public servants, the RCMP and some others, who are not entitled to draw unemployment insurance by virtue of the fact that they have superannuation and are dealing with the government. I'm not too sure about the teachers. That's one thing I'm vague on, whether they do not draw unemployment. I beg to differ, yes. My daughter is a supply teacher, and when she loses her job, she gets unemployment insurance. I believe teachers do get unemployment insurance.

The Chairman: I can be helpful there. Having had 22 years... What Monsieur Laurin describes is absolutely true.

Mr. E.W. Halayko: Okay. As I say, I'm not aware. But supply teachers definitely do.

The Chairman: Supply teachers are part-time. But Monsieur Laurin's description is absolutely correct.

Mr. E.W. Halayko: Okay. I stand corrected on that one, but there are others. I think starting in 1968 the military were forced to start contributing to unemployment insurance. “Unemployment insurance”—it's insurance. Change the name if you're not going to call it insurance, because if it's an insurance scheme, you pay in and if you have an accident, you get it back, or if you lose your job, you get a refund. Okay?

• 0945

[Translation]

Mr. René Laurin: I understand what you're saying. If you lose your job, I agree. But someone who retires after 35 years of service is not losing his job. The person is retiring. Are you saying that this person should be able to draw both employment insurance and his pension? Is that what you're asking for? Do you think the person should be entitled to both? Is that what you are asking for?

[English]

Mr. E.W. Halayko: No, I'm not asking. I'm saying that's exactly what they're entitled to.

If you have car insurance and you have an accident, and the insurance company says, oh, but you're drawing a Canadian Forces superannuation, you pay for your accident... We're talking insurance, and whether it's at age 55 or 60, they've paid into this insurance. It's a contributory thing; it's compulsory. They're entitled to get it back.

The superannuation is not a pension. It's a contribution to a retirement benefit, fully contributed, and yes, we do get that. But the thing is we're entitled to both, or the retirees are entitled to both. The word “retiree” is sometimes a misnomer. Even at 55 that person has a good ten years of work left in him, and in most cases the amount of superannuation people get is not enough to live on. They have to find another job. In some places, there are no jobs. The thing is, these are insurances, they have contributed, and they're entitled to it.

[Translation]

Mr. René Laurin: Mr. Halayko, I can assure you that my intention is not to defend the employment insurance fund. There are a lot of complaints about this fund. Every day in the House, many of the complaints are raised. They say that the government created the surplus on the backs of employers and employees. So far be it from me to want to defend the employment insurance fund. However, I cannot accept your saying that employment insurance should be paid out when you retire. It's not a retirement insurance. You do not pay employment insurance premiums in the event that you will be retired one day. That is not what it's about. There is another provision for retirement. You pay into a pension fund, and when you retire, you draw the benefits. The same is true for fire insurance. I have been buying fire insurance for 30 years and my house has never burned down. I have never received money from an insurance company. I have paid the premiums, but I haven't received a cent. A pension is not life insurance. In the case of life insurance, you know that the day you die, someone will receive the amount involved.

What you are probably looking for is a better pension fund, and I agree with you if that is what you are after. But you cannot be both entitled to a pension and employment insurance. If that were to be the case for everyone, it might be necessary to increase... It looks like I'm defending the government. I don't like that very much, Mr. Chairman, but it seems to me...

The Chairman: Encore!

Mr. René Laurin: It may seem ill-placed, but that is not the case. If you are targeting so many things all at once, people will get lost and no longer understand the merits of your claims. I want us to understand what you are looking for with respect to pensioners and employment insurance, which is paid out when someone loses their job, but not when they retire.

[English]

The Chairman: Thank you, Monsieur Laurin, for those points.

Mr. Halayko, under our rules we're going to go now to the government side.

Mr. E.W. Halayko: I don't get a chance to make a rebuttal on that.

The Chairman: He didn't have a question. He just made a statement. So I'm going to go to Mr. Proud.

If there had been a question, I'd have given you a chance. But I'm sure you'll find another opportunity.

I'm going to go to Mr. Proud for ten minutes for the government side now, and then back to the opposition.

Mr. George Proud (Hillsborough, Lib.): Thank you, Mr. Chairman, and lady and gentlemen. I welcome you here today.

I've listened to the question across the way, and the question across the way kind of takes away some of my questions. I understand your situation, so far as the pension and superannuation is concerned. I believe if there's something more you deserve, then you certainly should have it.

• 0950

As for the employment insurance, we can debate this from now until this time next year and nobody's going to come out of it a winner. In the private sector, for instance, people who retire don't collect it either, and that's a sore point with a lot of people. I don't know if it's right or wrong, but it's a system that's been set up this way. It's used for people who are out of work until they get back to work and it is used in seasonal industries as a supplement to their income. For everybody to be able to draw out of it, we'd soon be in a situation where there wouldn't be enough money.

I worked in the private sector for 30 years and paid into it, and I have never taken any out of it either. I don't know whether that's right or wrong, but that's the way the system is.

You talk about this surplus the government has, and there's no doubt they've had a surplus for the first time in a lot of years, but you are not the only group that has come looking for a piece of the surplus. We've had many groups before us in the last two weeks, and we'll have many more before we break for Christmas. The idea is that we have to keep paying down our deficit and our debt. In terms of this surplus, the question I have to ask you is, do we go back into the situation we just came out of?

There are a lot of groups out there. There are pensioners' groups and veterans' groups, and all kinds of organizations of those who have not been recognized as veterans, and we have them before this committee. I've listened to them here for the eight or nine years I've been on it, and I feel very badly for all of them. My quandary, and the quandary of the committee, is going to be what our recommendations will be in all these things. I can see your point as clearly as I can somebody else's.

I don't know whether this is a question or perhaps just a comment, but if you feel like giving me a few of your points, I'd certainly be willing to listen to them.

Mr. E.W. Halayko: I'd like to point out one thing. I'm not here for a piece of the surplus. Our people have more than contributed into the unemployment insurance fund. We've digressed, basically, down to the unemployment insurance, but we paid into it and up until 1984 we collected it. I had to collect it once. I had two jobs after I retired. I taught at the university for seven years, and then I moved on to another job in industry and I was laid off through redundancy after seven years. I actually collected unemployment insurance for the whole year, because there are no jobs for a senior engineer anywhere in the world at my age. So, fine, I collected it. And about two years later, everybody was cut off.

I'm not here for a surplus. If you look at the accounts, we have always been in surplus. The actual contributions by the members of the Canadian Forces, on record, were around $46 million a year. The payouts to retirees was running between $32 million and $36 million per year, with no contributions from the employer. When the Order in Council came into being, the payout to retirees—these are people who, after a second-career job, after a big fight and an act of Parliament was changed, became re-eligible—it went up to $24 million. I think in the second year, to pay back those who had lost some money, it went up to $38 million. As far as I know, it's back down again. I haven't seen any later figures on that. But the employer's contribution of somewhere around $60 million has never been made.

The thing is we used to draw it. Why have we been cut off? We use this word “retire,” but you're not retiring; you're still young enough to work until you're 65 or even longer. We're not looking for a retirement benefit. This is an insurance scheme. You've lost your job. There are no jobs in certain parts of Canada. There's no work, so the unemployment insurance either helps you move, helps you get established, or maybe helps you take a training course, but you have a whole year in which to do this.

In the meantime, the Canadian Forces superannuation looks good, but if you want to look at the average the people collect, and this is including indexation, it's around $9,000 a year. I believe it is $9,700. You can't live on that. Admittedly, some of the generals get $70,000, but not everybody's a general.

I hope that answers your question.

• 0955

Mr. George Proud: Thank you very much. Yes, I can see your point. And I don't want to get back into this employment insurance debate again, because we go on about this forever. But whether it's right or whether it's wrong, that's the way it is in the public sector; that's the way it is in the private sector. For anybody who retires, or if somebody takes early retirement and, for instance, they get severance pay, they can't draw unemployment insurance until the severance is used up.

This employment insurance is a program in which, no, the government's contribution hasn't gone in, but when it comes time to pay it out, the government has to pay it out. That's a fact of life. It's the same with the Canada Pension Plan and all this stuff. That money never went anywhere when we paid into it. It was always going to finance deficits in provinces and other things like this. But when it came time for me or you or somebody else to go on it, it had to be there. That's why they've changed it now in the last year, to make sure there's an abundance of this stuff for people who go on it. Hopefully it will work this way. That's what we're told. We were told that in 1965. It didn't work that way. Hopefully in 1997 it will work the way we're told it's going to work.

I certainly understand where you're coming from on this stuff. I'm probably telling you I don't know all the answers to it, but I know there are a lot of challenges ahead for us to try to work our way through all of these requests that come to us.

The Chairman: Thank you, Mr. Proud. I'm going to go to Mrs. Longfield for about four minutes.

Mrs. Judi Longfield (Whitby—Ajax, Lib.): Thank you. I apologize for nipping out for a minute, but I went to make a phone call to find out some information on some private sector pensions. What I discovered, which I knew, is that when you talk about an end to discrimination against surviving spouses of retirees, currently in the private sector—and I checked General Motors, and this is not an uncommon practice—at General Motors the second spouse gets almost nothing of the pension. In other pension plans it's exactly as it is with the armed forces, which is that the second spouse is denied a pension entirely.

The other thing I'm a little curious about is you talk about an increased survivor's benefit and moving it from 50% to 60%. Are you expecting that's done retroactively? I know in my husband's pension plan there certainly was an opportunity before retirement for him to indicate that he wanted to increase survivor benefits. That means his current pension has been reduced in a similar amount to provide for increased survivor benefits.

I think if this is what you're looking for in the Canadian Armed Forces, it's certainly something that can be negotiated, but to go back and simply say retroactively... Benefits paid out under a superannuation plan aren't changed just because it's changed in the private sector. Do you have a response to that?

Mr. E.W. Halayko: Can I answer the second one first?

Mrs. Judi Longfield: Yes.

Mr. E.W. Halayko: One, nobody's saying anything about retroactivity. Let's put it this way. A few years ago any widow who remarried lost her Canadian Forces superannuation.

Mrs. Judi Longfield: That's correct.

Mr. E.W. Halayko: Litigation was started to correct that.

Mrs. Judi Longfield: In the future.

Mr. E.W. Halayko: Yes, but as of today that's started. On a Monday morning I received a phone call from Warren Allmand, and I turned on the TV and watched the debate. Then one day a bill was passed whereby effective that date all widows were to retain their survivor's benefits, because on Wednesday the case was to be heard by the courts. The reason for this was the courts—we suspect this but can't prove it—because they had done this in the past, would have ordered the reinstitution of the survivor's benefit backdated. Had it been backdated to 1939, that would have been an expensive little sum of money. So effective that date all widows started collecting their survivor's benefits.

In some cases some widows got three. When I queried that, they said if she goes for a fourth one we'll ask the Mounties to investigate. This is what happened. It's the same thing. In this instance, there's no way we're going to get this retroactive, but effective the date of the passage or the change of the legislation, or whatever, the 60% survivor's benefits should come into effect.

Now can I go to your first question?

Mrs. Judi Longfield: Sure.

• 1000

Mr. E.W. Halayko: General Motors has a different type of scheme. Ours is fully prepaid. You pay the same amount regardless of whether you're married or single.

Unfortunately, you can't have more than two wives, so it's for one wife or one husband. I've been married for 60 years—sorry, it's been 58 years. My wife will kill me. For 58 years I have been married to the same woman. But some people have been married two or three times. They're now with their last wife, and they married after the age of 60.

My wife is going to get a survivor's benefit. But the other fellow who has lived with this woman for some 20 years will get nothing. The first two wives, or the first woman, may have died or whatever, or they may have gotten something out of a divorce settlement, but they're gone. So this is the woman who's been with this guy for the greater portion of his life.

Mrs. Judi Longfield: I don't disagree with what you're saying. I'm simply saying that this is not unlike much of what is going on in the private sector.

Mr. E.W. Halayko: Okay.

Mrs. Judi Longfield: I'm not saying it's correct, but it's not unique to the Canadian Armed Forces.

Mr. E.W. Halayko: CPP says you can draw it.

Mrs. Judi Longfield: But that's CPP.

Mr. E.W. Halayko: CPP is the biggest scheme in the country, while OMERS is the second biggest scheme.

Mrs. Judi Longfield: Okay. But again, those are changes... You're probably correct. You should be negotiating to change the current pension. I'm going to leave that just briefly.

Mr. E.W. Halayko: We've been trying to negotiate this for the past 20 years, and I'm getting tired of having been the chairman of this thing for 20 years.

Mrs. Judi Longfield: You're making your point.

The Chairman: You have one last question.

Mrs. Judi Longfield: I have one very short question.

You talk about overpayment and the necessity to pay it back in a very short period of time with 3% above the Bank of Canada rate. Can you tell me what happens when there's an underpayment? Is it returned with the same speed and interest?

Mr. E.W. Halayko: In the past, it has been returned, but you never seem to get any interest. I don't know. We have an odd employer who, when you owe him money, wants interest, but when he owes you money, you just get your money back.

Mrs. Judi Longfield: But you get it back in a timely fashion.

Mr. E.W. Halayko: Oh, yes.

Mrs. Judi Longfield: Okay. Thank you.

Mr. E.W. Halayko: If there's an error, there's no argument and it's corrected.

Mrs. Judi Longfield: Okay. I'm pleased to hear that. Thank you, Mr. Chair.

The Chairman: Thank you, Mrs. Longfield.

We'll now go to the New Democratic Party. We'll have Mr. Earle, for ten minutes.

Mr. Gordon Earle (Halifax West, NDP): Thank you, Mr. Chairman.

First, I want to thank you for appearing before the committee and presenting us with your information, which I found to be quite clear.

I do want to make a comment, though, before I go to my questions, because I was a little bit confused at the start. I looked at the program. I noted that it does say it's a study of veterans' issues. So I'm assuming that's why you were only allowed to present the first part of your brief. I did read your entire brief, as well as the material that was given to me in preparation for this meeting, and it touched also upon the entire brief. So I wasn't sure why we were separating it, but I guess it's probably because of the focus on veterans' issues.

The Chairman: That's exactly right. I'll explain, Mr. Earle.

Mr. Gordon Earle: All I want to say is that I hope it was clear to you at the start—

The Chairman: I'll explain again briefly from the chair.

The witness was invited to appear because he's the president of the association for veterans' pensions. He submitted some interesting comments on the state of the armed forces. This related to the SCONDVA report, which has now been tabled. So the proper thing to do was to have the witness speak to his prime reason for being here and his area of expertise.

There are some interesting comments. I certainly have some questions about them. Some of the things I agree with and some I might find a bit outrageous as an individual member.

When we're through with questioning the witnesses on their primary reason for being here, then we'll go directly to a round of questions to them about the second part of the brief. All right?

Mr. Gordon Earle: Thank you, Mr. Chairman.

Mr. E.W. Halayko: Could I make one point clear?

Mr. Gordon Earle: Yes.

Mr. E.W. Halayko: We're talking about Canadian Forces retirees. I'm a veteran and a Canadian Forces retiree. Veterans are people who served in the war. Now they're being also classified as veterans of peacekeeping in the Gulf War.

But we are talking about prepaid benefits. I am in receipt of a disability pension, which I earned after I got wounded. That's a pension given to me by a grateful government for having fought for our country. The other one is superannuation, which I fully paid for during my service career.

People do have this problem of differentiating between the veterans' pension and the superannuation. Our organization basically deals with superannuation, whereas the Legion or the National Council of Veterans Associations deals with the veterans' side. Okay?

Mr. Gordon Earle: Fine. I understand that. Going through my questions, I just have a couple of comments.

• 1005

First, I want to come back to EI for a minute, because I want to make sure I understand this completely.

I agree basically with what other members have said in terms of what happens in the private sector and public service with respect to retirement. When one retires, one doesn't necessarily get EI. But I notice in your brief that you say you pay into it, but you don't get any benefits, not only with respect to retirement, but even if one is dismissed or laid off. I find that difficult to understand, because certainly in the civil service or private sector, if someone is laid off or their job comes to an end through no fault of their own, and it's not retirement, then they do qualify to receive EI. There may be a penalty depending upon whether they quit or whatever. But are you telling me that you don't get any benefits whatsoever under any circumstances at all?

Mr. E.W. Halayko: Yes, if your superannuation is less than $14,000 a year, you will qualify for some EI.

But the thing is that they're not retired. You don't retire at 45. You have to go to work. You have a family to raise and kids to put through school. EI is a prepaid benefit. It has nothing to do with a handout or anything. You paid for it.

Now I'm fighting for the Canadian Forces retirees. We know from the government's own figures that were even quoted in the House of Commons that we have paid more than our share into this account. Therefore, why can't we have at least some of it back for the people who are released?

For example, we serve our country honourably in a uniform. We have people who serve in prison dishonourably in a uniform who walk out and draw unemployment insurance. I think there's something wrong there. Isn't that so?

Mr. Gordon Earle: Okay.

Mr. E.W. Halayko: I asked the question, but nobody is answering that one.

Mr. Gordon Earle: Okay. My second comment relates to the administrative errors.

I can understand the frustrations caused when an error is made. It's discovered some time later, and then people are asked to pay money back. I also believe that people are not exempt from paying back simply because an error has been made. But I feel it should not present an undue hardship in terms of that person's situation. I don't feel there should be unfair penalties if someone caused that error.

the reason I say I don't feel people should be exempt is that, by the same token, if a civil servant, clerk, or whoever made an error such that you did not get money, you would be the first one to say that just because they made that error doesn't mean you're not entitled to what you should have received. So I think it works both ways.

The position I've always taken is that if an error is caused, then when you try to correct that error, there should be some flexibility to allow for the given circumstances at that point in time so that an undue hardship is not caused to the person. But I don't think there should be an automatic right such that just because an error is made, it means we don't have to pay it back. People did get something they weren't entitled to. This is the same as saying that if they didn't get it, they would be entitled to receive it.

Mr. E.W. Halayko: The thing is that these people thought they were getting what they were entitled to. It turned out that there was a typing error or finger trouble somewhere.

I'll give you a personal example. Many years ago I got involved in a return from Germany. The family was posted one place, while I had to go to another place. There was no accommodation, and so on. Actually, because there were no quarters, I had to live in a YMCA for a while. So I was drawing two lots of subsistence allowance.

Almost a year later, the day before Christmas, the paymaster phones me up to say that he just debited my account by about $300 or $400 because they had given me a second subsistence allowance. That was it. Bang. They took it all in one lump sum.

Through a redress grievance, I eventually got this all back. It came back less $3 times three days, because the bureaucracy is never wrong. They beat me for $9.

So who's to complain? I don't want to get into a fight over that, but this is what happened. I did get it back through a redress. These people redressed this. I say without prejudice that there's this letter, but they've had to pay it back.

I got a phone call from a woman in Calgary. I could hear her kids screaming in the background. She's a retiree from the forces. Her husband just kicked her out, and she got this bill. It was a paltry sum of $200. She wondered where she was going to get $200 from. It bothers me when I get things like that.

• 1010

Mr. Gordon Earle: Well, that's the point I'm making. In those situations there should be flexibility on the part of the administration to either—

Mr. E.W. Halayko: It could be written off.

Mr. Gordon Earle: —forgive that debt or whatever.

But the general principle should not necessarily be that because a mistake was made, there's no onus to pay.

Mr. E.W. Halayko: You could pay it back. But why pay it back? You see, when I got my money back I didn't get interest. I just got it back.

Mr. Gordon Earle: That's right.

Mr. E.W. Halayko: Less $9.

Mr. Gordon Earle: Apart from those two questions, I didn't really have any further comments.

I do thank you for your brief. I think you've made some very important points. They'll certainly be considered, and thank you.

Mr. E.W. Halayko: Well, I hope so. It has taken a long time to get to this stage.

The Chairman: Thank you, Mr. Earle. I appreciate your questions.

Now I'll go to Mrs. Wayne from the Progressive Conservative Party. You have 10 minutes, Mrs. Wayne.

Mrs. Elsie Wayne (Saint John, PC): Thank you very much, Mr. Chairman.

I guess Judi and I are the only two around this table who could be called gold diggers or something else. I've been called all kinds of things, but I've never been called that one before.

What are you saying there, George?

The one thing—and I say this with respect to all my colleagues around the table, and maybe it has to do with the fact that I have the white fluff on the top, I'm not sure, but the one thing I have to say is that I find it difficult when we compare our people from defence with the private sector. They're totally, totally different.

Mr. Chairman, I'll make this comment first before I ask my question. If in the private sector you pick up a gun, you're arrested. They have to have guns to do the work they have to do. So they're totally, totally different. That's why I feel that instead of comparing what they're asking for, and comparing it with what happens in the private sector, we should be looking at them in a different way, totally different.

In the report we received from the library, it was mentioned that you feel it would be better if you had a committee established, rather than having the Canadian superannuation account dealt with by the officials of the Treasury Board and DND. If that committee was put together, could you tell me what you would recommend to be the make-up of it?

Mr. E.W. Halayko: I would suggest we follow the Australian principle. First, there are no permanent people on this committee except the secretary. Second, have people of the equivalent rank or lower than colonel from army, navy, and air force. There were two retirees on that committee, but they may have gone up to three. I don't know.

What they've done with their money is this. They've improved their superannuation benefits, but after five years, and if you've reached the rank of sergeant, you can go to your superannuation account and borrow enough money to buy a house, and I believe it's 1% less than the going rate on the market. You can borrow money from that account for education purposes. Now you've got to pay it back, but you pay it back at this lower rate.

I believe the survivor's benefit was recently jacked up to just over 60%. I'm not too familiar with recent changes in Australia, but I brought this up before to Mary Collins and she said this was great. Now they're no longer in power. But there are some things the Australians have that we surely need and could follow in Canada.

Now, Mrs. Wayne, you're absolutely right. The other thing is, once you put that uniform on, you are on duty 24 hours a day—

Mrs. Elsie Wayne: There's no question about that.

Mr. E.W. Halayko: —no ifs, ands, or buts. You are not a civilian. It's a different way of life. You're living in a dictatorship, and it has to be that way. You can't send a man out on patrol or something and have him say no way. Hey, what kind of a war are we fighting here?

Mrs. Elsie Wayne: No, there's no question about that.

Just on that, Mr. Chairman, perhaps staff could get us a copy of the Australian system that has been referred to, so we could just take a look at it.

Mr. E.W. Halayko: It's available from the ambassador, and I believe Mary Collins had it. You also have the Australian military attaché at the embassy. He can get it because he got it for me some years ago.

Mrs. Elsie Wayne: Okay. Also I'd like you, if you could, to give me, and all of us, some examples of the government denying pension improvements. Could you just elaborate on that? Tell me about that.

• 1015

Mr. E.W. Halayko: Let's put it this way. Bill C-33 popped up, and suddenly they were going to de-index our superannuation, whereas we'd been paying for that indexing since 1968. That died on the order paper. We have asked for improvements to the 60% benefit. That died with Bill C-33. That was the one carrot in that whole bill that we could have gone for. But we're not going to do away with our indexation. We've paid for that.

In Bill C-55, which was finally passed, there's one thing we objected to, which I think most of the others who appeared before this committee and the Senate committee also objected to, and that was that the President of the Treasury Board has the authority by an Order in Council to de-index our superannuation. It's in there, and they wouldn't take it out. Now, that's one of the things.

Some of the improvements we wanted have not come to fruition. There's a Canadian Forces Pension Advisory Committee, and we were told that we would have two members on that committee. When it came out in the wash, the minister did not appoint one of us to that committee, but he did appoint a member from the organization representing the civil service retirees.

Have I answered your question?

Mrs. Elsie Wayne: Yes.

We should look at that, Mr. Chairman.

The Chairman: Absolutely.

Mrs. Elsie Wayne: My final question is this. Has your association approached the finance minister or the human resources minister regarding these changes to the EI?

Mr. E.W. Halayko: Yes, five years ago when this party was elected. We got no response, so we've had to use a circuitous route. The usual way is through the opposition, unfortunately, or fortunately—whatever.

Mrs. Elsie Wayne: I'm going to be here.

I'll just close with this. The surplus that is there, the $40 billion—well, I guess $3 billion has been taken from it—

Mr. E.W. Halayko: No, it's still $40 billion.

Mrs. Elsie Wayne: It's still $40 billion, is it?

Mr. E.W. Halayko: Oh, yes.

Mrs. Elsie Wayne: Okay.

I want to ask you one question on that. In view of what has happened with the budget for Defence being cut to the point where we're told that some people are going to soup kitchens, would your association be opposed if the minister were to use some of that to help Defence in their budget?

Mr. E.W. Halayko: I'd have to go to the members. I'm the chairman, and I'm only one voice.

Mrs. Elsie Wayne: Okay. I'd just like to know—

Mr. E.W. Halayko: However, what I have heard from some of our members is that if we get this $3 billion back with interest, we need a Canadian war museum. How about kicking in $100 million or $200 million towards building a new war museum?

That would still leave us $43.5 billion with which to sustain the superannuation. We have to remember something here. We're getting fewer and fewer people in the forces, and at a certain percentage level there's so much that has to be paid out and so on. So we have to balance this so that it never goes into a deficit.

Mrs. Elsie Wayne: I just would like—

The Chairman: Is it Saint John, New Brunswick, where this war museum would be?

Mr. E.W. Halayko: The museum goes here in Ottawa.

The Chairman: I thought Mrs. Wayne might like it in Saint John.

Mr. E.W. Halayko: But out of that money we could support regimental museums.

The Chairman: That's right.

Mr. E.W. Halayko: When I appeared before the Senate, I suggested that because the Senate may be defunct shortly, we'd use the Senate building. I'm afraid the senators just about threw me out of there.

The Chairman: Some of us might readily agree with that suggestion, too. A little levity, that's all, and we feel sometimes that a little humour around here is quite called for. But we know it wouldn't really be in Saint John, New Brunswick.

Anyway, thank you very much, Mrs. Wayne.

I'm now going to go to round two of questions. I want to be very clear with the members. Of course, the rules of this committee are that now we start with the opposition, then Liberal, next opposition, then Liberal, back and forth for five minutes each.

I'm now going to put on the floor, if the member wishes, part two of the brief. So you can continue to question on part one, which is relevant, or you can continue to question on part two, which is interesting but not the primary purpose to be here. So it's your choice.

We'll now turn to Mr. Goldring for the Reform Party.

Mr. Peter Goldring: Thank you very much.

I do have some questions on the observations, and really I suppose they are related because I think you said that 7.5% of the member's pay goes into this pension.

• 1020

Mr. E.W. Halayko: Superannuation, please.

Mr. Peter Goldring: Superannuation, yes, and of course the pay is relative to rank and the comment here that now we're making the corporal rank automatic when in the past, when I was in, the automatic one was leading aircraftsman, and you had to earn the next stage.

Mr. E.W. Halayko: Only if you qualified and passed recruit training.

Mr. Peter Goldring: Yes, that's right, but it was a time thing. In a year and a half you could become a leading aircraftsman, and to become a corporal you had to earn it, and that could be questionable. There were some who were leading aircraftsmen for 20 years in certain trades that were slow, it seems to me. So that's one change that seems to have been made.

I agree with your observation that that's kind of a false increase in pay, because that's making it an automatic one. But somehow that must affect the significance of the classification, because now a corporal is what we used to consider as a leading aircraftsperson. It's an automatic thing, whereas when I was in, a corporal was an example of somebody who had earned the increase.

Mr. E.W. Halayko: Let's put it this way. He was God in my days. Actually, a lance corporal was God.

Mr. Peter Goldring: Yes, so there is a significance there, too.

I suppose this follows all the way through to your comments on the political correctness of the military now and the introduction of females to combat arms groups. Then we see recently in the paper where actually we're not sure how it fits, because there's some gender bending with certain people in the military authorizing sex changes. So I would suggest that further complicates and confuses the issue for combat operational units.

At the same time we have something that affects the military by having a $30,000 charge for doing this complicated re-engineering when our lower ranks are turning to food banks.

Mr. E.W. Halayko: Have you heard of Mrs. Bobbit?

Mr. Peter Goldring: They're paid so poorly that they're at food banks, while the upper echelon is authorizing the re-engineering of people's sex. I would think that this is all sort of relative to the 7.5% and what is available for pensions in the end. The armed forces are not paid enough.

So I'd like to have your comment as to what you think with regard to the armed forces correct level or whether the lower ranks should be increased. Do you have some comment on what you'd like to see for a pay increase for the armed forces? This relates to the 7.5% and then a pension at the other end, too.

Mr. E.W. Halayko: Let's put it this way. As I mentioned earlier, at one time a lance corporal was really somebody. I was one once, and they stood to attention when they talked to you. Nowadays, as a matter of fact, even generals are held in contempt, and I'm serious, with the media.

I was involved many years ago in this trade business, working with the committee, and one of the things we suggested was never mind this rank and trade, which is the American system—tech sergeant, tech this, tech corporal. Let's have, if need be, 10 levels of trades pay, which is for competence, and on the other side is your rank structure, somebody who can lead or command—not manage. That's where you'd have your NCOs. He could also be a group 8 tradesman, but he was in command.

Now, we've seen even in those days—and I'm going back about 35 years—warrant officers, class 1, grouped for trades pay who couldn't command their way out of a paper bag. But they were getting this because of their technical expertise, which is wrong. They should have been given the technical pay and left at their lower rank or maybe made a corporal so they could go into the corporals' mess, but not anything higher than that. Suddenly, now everybody is a corporal. If we have a disciplinary problem, we have no privates. I don't want to be accused of being racist, but it seems to me that we have all chiefs and no Indians left in the Canadian Forces.

• 1025

Mr. Peter Goldring: In your mind, would this follow through? You indicated here there are approximately 100 generals in the Canadian Armed Forces.

Mr. E.W. Halayko: It's been reduced to 69.

Mr. Peter Goldring: Whether it's 80 generals or 100, would it follow through that perhaps these generals were getting this false increase in pay? In other words, being elevated to the rank of general was just a way of giving extra money to the general. Or are they actually being elevated to the rank of general because they are qualified, because they earned this? Are they getting the rank of general because they earn it militarily, or are they getting the rank of general because it's a method of giving them a pay increase?

Mr. E.W. Halayko: I'd hate to get too deeply into that one. However, let's put it this way. In my last position in the military, because I was categorized, I was on a secondment. I was on an ABCA committee, and the opposite number from the Americans was a major-general, the opposite number from the Brits was a major-general, the opposite number in Australia was a captain, and I was a captain. Upon my retirement, I was replaced on that committee by a major-general. I don't know if I need to explain that any further.

The Chairman: Thank you, Mr. Goldring. I'm going to go now to the government side. Bob Wood, parliamentary secretary for veterans' affairs, will go for five minutes now.

Mr. Wood.

Mr. Bob Wood (Nipissing, Lib.): Thank you, Mr. Chairman.

Mr. Halayko, in this other brief you made a comment that the plan to recruit 500 women into the Canadian Forces is an act of political correctness, which obviously will be challenged by the Hon. Hedy Fry when she appears before this committee next week.

I trust your opposition to women in the forces has to do with combat capabilities, but as you say, the regular forces have some 60,000 members, and in the realities we face today, only a small percentage of these people are actually placed in combat situations. Given these facts, my question to you is, why are you so adamantly opposed to women in the Canadian Forces?

Mr. E.W. Halayko: Whoops, did I not say serve in combat arms? We had women in the forces during the war and we were only too pleased to have them. You're laughing. I'm getting myself deeper and deeper.

A voice: Just a bit patronizing.

The Chairman: Do you want to start over?

Mr. E.W. Halayko: No, we were pleased to have them. They took the jobs of driving... For example, Mrs. Rapp, sergeant in the Signal Corps in Canada, allowed an able-bodied man to serve overseas.

We needed the women. There are jobs for the women in the forces, particularly nursing sisters. When a man is wounded, what's he looking at? A woman—mother. This is what they need. But in the combat arms...

I don't know if any of you ever served in a war, but on one occasion in the Liri Valley, I looked into a tank about two hours after a battle. This tank—the Churchill—was in perfectly good shape, but it had a hole in the turret and out the other side. I looked inside and there was the officer, minus one head. Do you want your daughter to suffer that?

A war is a war. It's not a boy scout camp, where it's a killing game. Do you want your daughter, wife, or sister living in a tank for six or seven hours, being shelled, no bathroom facilities, nothing? Do you want your daughter, your wife, or your mother if you're young enough, sitting in a slit trench with another soldier freezing to death in the middle of winter, having to go to the bathroom, and by Christ, those 88s—I don't know what they would use nowadays, air-burst firing? That's no place for a woman.

I've had comments from our own members, retired servicewomen who say they've been on exercises with the infantry. Look, in the exercises they have porta-loos. An exercise is in a way a camp; it's a little rough living out in a tent. But the loo we had was a pole on a “Y”.

It's absolutely wrong to have a woman in combat arms. In other locations, beautiful. There are jobs for women—lots of jobs. Have I answered that one?

Mr. Bob Wood: I have one more question, Mr. Chair.

Having read your brief, I see you seem to take a very dim view of both politicians, who you describe as thoughtless and idle dreamers, and the senior military leadership, who you describe as disloyal mismanagers of the lower ranks. I personally think it's unfair to paint everyone with the same brush, because I know of many senior commanders, sir, who make great efforts to lead and assist the soldiers under them. Similarly, there are many politicians who take a keen interest in military matters. Many of them are in this room and on both sides of the table.

• 1030

We've just produced a quality-of-life report. I believe it addresses many of the issues you raised, though I regret that not all members of the committee supported it. I am curious to know if you have read this report and what you think of it. A lot of thought and hard work went into it, and I for one believe we were not dreaming when we drafted it.

Mr. E.W. Halayko: No, I have not had an opportunity to read that report, because I've been away and busy. Let's put it this way: I have your attention.

Mr. John Richardson (Perth—Middlesex, Lib.): I listen.

Mr. E.W. Halayko: I had your letter, and I thank you for it. The thing is, we have been after a number of things here for years.

Here we have a prime example. One of the things is this corporal who had his brains bashed out on an armoured vehicle because he didn't have a helmet. That's the sort of thing I'm talking about.

We had the Somalia inquiry where the CDS was blaming his lower ranks for his problems.

Now let's face it, loyalty starts downward, then sideward, and then upward. If one of your men gets in trouble, it's your fault. If one of your men does something, he gets the credit. Now that's loyalty. And we're not seeing that these days.

Well, you obviously heard that, because you're on this committee and you produced that report. So you've seen what's going on these days. So it was necessary to use stronger language.

Another good example is this airborne regiment. It's the only regiment we had that put out brush fires. And I'm not saying that because I'm airborne myself, but it was a ready-made...not police force, but a police force with a gun in its hand that could do something.

We don't have it. They were sort of dismissed, more or less dishonourably. That was not right. There's only one regiment in British history to which something had happened, and they're the ones that wear the cap badges fore and aft.

The Chairman: Thank you.

Mr. Wood, about one minute of your time is left. If it's agreeable, might I be allowed a question from the chair? Thank you very much.

Just briefly, I'm going to read this one statement. I found it a bit remarkable, certainly dismaying. It's in part two, page 2 of the brief, about four bullets from the bottom. You say that senior officers should no longer attempt to gratify the “thoughtless whims of politicians” such as the “aborted initiative to send 3,000 Canadian troops to Zaire”.

I've never served in the Canadian Forces, Mr. Halayko, but that reads awfully like an encouragement to disobey orders.

Mr. E.W. Halayko: Nope.

The Chairman: Can you clarify that then?

Mr. E.W. Halayko: Never to disobey orders. But I do believe that our senior generals and so on are supposed to be advisers to whoever comes up with a scheme on employment. I'm going to give you two examples of something that happened without really being thought about.

When the Congo first came out, it was—

The Chairman: I'd like you to stick to the Zaire mission, if you would.

Mr. E.W. Halayko: Well, I have to, but this is why the statement...

The Chairman: Yes, okay.

Mr. E.W. Halayko: They decided to send Canadian Forces, part of the UN, but they were to be signallers. No thought was given to the fact that each radio detachment had to have an officer. They needed military police, they needed cooks, which are service corps, they needed an ordinance corps, which provided the material, they needed a pay corps, and so on. So because that was the agreement, everybody who went to the Congo had to tear down their regimental badges and wear signals patches. That's one.

The second one was the Suez. There was a decision to send a regiment to the Suez to hold the opposing forces apart. I don't know whether they knew it or not, but they decided to send the Queen's Own Rifles of Canada. Now, if anybody knows the history of Colonel Nasser...the Queen's Own Rifles?

Well, here these people, the Queen's Own Rifles, had vacated Calgary, and they were already loading on the Magnificent when Nasser said, no way, you're not sending the Queen's Own over here.

I'm talking about thinking. Now, suddenly with this 3,000, it was in the papers that we're going to send 3,000 troops. Even the Americans scoffed at it. Either the statement was taken out of context at the time it appeared in the press... It was going to be agreed to in part, and they realized, hey, we don't have 3,000 soldiers. You see, that's...

• 1035

The Chairman: Thank you.

Your clarification helps. It would read on its face to many as kind of an encouragement to disobey orders. I appreciate your clarification. If you're calling for better advice from senior officers to the Minister of National Defence, I know the minister and all of us would agree and encourage that.

I now want to go back to the opposition side for five minutes and Monsieur Laurin, to either part one on veterans' issues and pensions, specifically, or to part two, if you wish to have questions there.

[Translation]

Mr. René Laurin: I have no further questions for the time being, Mr. Chairman. You will perhaps give me some more time later.

[English]

The Chairman: I'll come back to you if you have other questions then. Let me then go to Mr. Earle and I'll come back to Mr. Richardson.

Mr. Earle.

Mr. Gordon Earle: You mentioned the one general per 600 personnel, and that certainly does sound top-heavy. Could you elaborate a bit upon how that situation would come about?

Mr. E.W. Halayko: Let's go back again in history.

Apparently, 30-odd years ago the bureaucratic side of Defence was growing, so it decided the people in uniform were equal in position—a director general should be a brigadier rather than a colonel and so on—and it sort of escalated to at one time about 150 generals.

This year, with great fanfare, it was announced that we had reduced it to 65 generals. About two weeks later they squeezed in 4 more general positions, so we now have 69 generals for 58,000 soldiers. It seems a little high in chiefs when you consider, during the last war, we had one million in uniform, one full general, and then lesser levels all the way down. But we never had anywhere near the number of generals we have now for fewer people.

I just can't understand why we have to have this. We're talking about money. When I appeared before another committee at one time I asked, if we reduced the number of generals, what would we get as a trade-off for one general? The answer was a company of men.

Well, we need men. Some of these guys are going back to Bosnia on their third and fourth tours, and they're not too happy about that. We just heard about a fellow yesterday who had done six months, came back, had seven days' leave and was sent back to Bosnia. That's a bit much to expect. That is a danger zone where people are getting killed and injured. That is a bit high.

Admittedly, at the same time we probably have to reduce the civilian side. That's fair ball. You are interested in saving money, so one way of saving money is to cut that top level. The military is like this when it should be like this.

The Chairman: Mr. Earle, do you have any more questions?

Mr. Gordon Earle: No, that's fine. Thank you.

The Chairman: Thank you.

Now we'll go back to the government side. Mr. Richardson.

Mr. John Richardson: I know you came in here with the best of intentions to do something about the superannuation plan, but you brought a pile of kindling here and put some gasoline on it by using some adjectives and adverbs in a way that incites resentment.

You make all kinds of exaggerations here. I use the word “exaggeration” because you state... Does the armed forces have an airborne capability now?

Mr. E.W. Halayko: They've gone down to one company, and whether they're capable of supporting one company for battalion, I'm not sure. But the reduction has been to one company per battalion, which would be three companies. That's a long way from a regiment, but that's the level it's gone down to. Whether they're maintaining it, I can't say because of the rotation going through so fast.

Mr. John Richardson: On our visit to Petawawa, they were certainly being maintained there.

Mr. E.W. Halayko: That will be the RCR. They always did.

Mr. John Richardson: I can't verify if the Patricias and the Van Doos were full companies or not, but certainly they had the basis for further expansion because of the number of trained paratroopers within the regiments who could be called back and given refresher courses.

Mr. E.W. Halayko: If they were to call them back, would that not reduce their capability of doing their other job, which is rotating through peacekeeping roles?

Mr. John Richardson: I think all of them, whether they're in the airborne or not, are taking turns on peacekeeping. Why would the airborne be an impediment to do peacekeeping?

• 1040

Mr. E.W. Halayko: But you want to keep your airborne as a company, whereas the other companies are being stripped for rotation. If you strip your airborne company, you don't have that capability.

Mr. John Richardson: I think they'd be sent off as a company.

Mr. E.W. Halayko: They are rotating individually and by units and sub-units. It depends on the type of rotation. Yes, okay.

Mr. John Richardson: When we took office in 1993 there were 120 generals, and they have been significantly reduced since then.

Mr. E.W. Halayko: They have been reduced to 69.

Mr. John Richardson: That's a significant reduction. Almost 50 generals have been eliminated.

Mr. E.W. Halayko: But you have also cut 10,000 soldiers.

The Chairman: Mr. Halayko, can I ask you to let the questioner conclude his thought before you come back in?

Mr. Richardson.

Mr. John Richardson: There would be a significant reduction in any force system if you took that number of generals out. We also reduced the forces level as well.

One of the things that seems to be an ongoing problem for our armed forces is our mobilization base has been used only once when we had the posting to the Bosnia situation, when the Patricias had almost 40% of their militia people. I was pleased to read the other day the account of that and was surprised to see the courage and how well and quickly trained the militia people became. The commander of the Patricias was really glowing in the report of that support.

If we are down low, I wonder why the forces don't maintain a mobilization base. I hear rumours of major cuts to militia units, naval units, and air force units, and it's always hard to believe that when we have a small force we don't maintain that mobilization base. Right from the First World War to the Second World War to the Korean War to now, the answer from National Defence Headquarters has been to cut the reserves. I don't think there will be recognizable reserve operations left after the next cut. Is it to save money to maintain the regular units, or is it just to set aside one of the principles of war to have a mobilization base?

Mr. E.W. Halayko: I don't know. I understand there is no mob plan, but that's an aside.

I'm an NPAM, a non-permanent active militia. I've been a militia soldier since I was about 14—I lied about my age, as a lot of us did. We had a permanent force of about 3,000 in 1938, but when the war started, almost overnight all the militia units expanded. My battery jumped from 30 people to 240 within two weeks, and we were overseas a couple of months later with a full regiment of artillery.

The militia plays an important part in the military. However, we cannot keep the good people in the militia. There are always these reductions, but this is why in there you'll find, and I recommend, that the militia be exposed to a similar sort of superannuation scheme, but separate to the regular force. This way you would be able to keep the better people in there.

You have a captain—and there are only so many majors allowed in a militia unit—who after 15 years says he's quitting. But if he knew that at the end of 20 years he would get some sort of superannuation, he would stick around. He has an investment in there, but he has to help pay for it. It would be pro-rated for the number of years of service and so on. That would help keep that, and you might even be able to keep the militia up.

On reduction, in the regular force there's always been a battle between two groups: the strong, permanent force types who say only the permanent force can do it, and the other side that says we need the militia. As a matter of fact, in London right now the militia are running the whole show, basically. I think we have 15 or 20 regular forces, but the militia are running the whole show, and things seem to be moving along quite nicely. The Hussars are always providing people for Bosnia and so is the 4RCR, and there's no difficulty.

• 1045

So I don't know. If there is to be a cut, I think it should be stopped and I think you are the people who can stop it. As a matter of fact, I believe you're the parliamentary secretary to the defence minister; you could probably say no.

Mr. John Richardson: I can't. I was, but we rotate too.

Mr. E.W. Halayko: Okay.

The Chairman: Thank you, Mr. Richardson.

Now to Mrs. Wayne for five minutes.

Mrs. Elsie Wayne: My colleague brought up the issue of the 500 females in the service. Let me say this, and it might shock some of you—maybe it will and maybe it won't—but I'm not a man and I bloody darn well don't want to be a man. And I mean it. So you guys have a role to play, and we have a role to play. I'm saying look, I don't want to be out there in the trenches with you guys with a gun, a machine gun, or anything else. Okay?

I would just like you to explain to me, sir, what role you do see the female playing. You tell me.

Mr. E.W. Halayko: Well, certainly not in the hay.

Mrs. Elsie Wayne: You're right, not in the hay. You're bloody right.

Mr. E.W. Halayko: Unless we marry them.

Let's put it this way. You have vehicles that can be driven. Even in the combat areas you can have women as far forward as corps headquarters who could act as drivers, orderlies, clerks, and so on. But I wouldn't go any further forward than corps, because it gets pretty sharp from division forward.

Mrs. Elsie Wayne: What you need to do is find a way in which there will be promotion for the women, so they don't just stay as someone driving the vehicle. I say this with respect for the role.

Mr. E.W. Halayko: Can we go back to what we used to have?

Mrs. Elsie Wayne: Okay.

Mr. E.W. Halayko: We used to have the Canadian Women's Army Corps. These women were scattered throughout the military, but they had their own corps, and their own promotions were within their corps. Suddenly somebody decided, oh no, let's make them RCR or PPCLI, and that destroyed that. The same thing is true of the WDs and the WRENs. The Brits still maintain the WDs and the WRENs, and they perform those functions for which they're designed for.

Mrs. Elsie Wayne: I understand where you coming from.

Mr. E.W. Halayko: Again, I don't see how a female could possibly be a fighter pilot in action.

Mrs. Elsie Wayne: No.

Mr. E.W. Halayko: There are two things, three things maybe: G forces, their monthly problems, and so on. There is no place for that in the military.

Mrs. Elsie Wayne: No. And I have to say, Mr. Chairman—and I will say this. When I was a mayor I wouldn't let a woman become a fireman, because they bloody well can't crawl up that ladder and carry down a man who needs to be removed from the building. We have a role to play.

I'm just going to close with this, if you let me tell you about it. I went over with Defence to Dieppe, okay. I did. They took us up to the French graveyard in Dieppe, and it was the only night the fog was coming in. It was going in and around the tombstones. All of a sudden we saw this beautiful senior lady, who we thought had come up out of the grave—and the little man I was wheeling was one of the veterans. She had on a nun's habit.

I looked, and the little man I was wheeling, who was from Ontario, said “Oh dear God, dear God, it is Sister Valois”. I said “Who is Sister Valois?” He said Sister Valois had been there when they were torpedoed and shot, right there on the shores of Dieppe. She had saved them, and five of their men died in her arms. He said she was the one who had set up the hospitals, took them there and took care of them. They cherished her, praised her, held her up everywhere they went in Dieppe.

We have a major role to play. We do. We can play our role. And you have a role to play. I just hope, Bob, that honest to God you don't put any more of those women who think they're men in the darned armed forces. That's it, I'll say no more.

Mr. Bob Wood: I won't, I won't.

The Chairman: On that note, I'm going to thank you, Mrs. Wayne. You've been eloquent as always.

Are there any more questions from the government members?

• 1050

Just before I go to Mr. Laurin, I want to remind the committee that I have an important procedural motion we need to deal with when we're through with the witnesses.

Mrs. Elsie Wayne: I have to leave, Mr. Chairman. I have someone waiting for me upstairs.

The Chairman: All right. Thank you.

[Translation]

Mr. Laurin, five minutes.

Mr. René Laurin: Mr. Chairman, I would like to go back to part two of the presentation which dealt with management and command. Mr. Halayko, you alluded to the very high number of generals and senior officers in the army, and I agree with you entirely. You did well to raise this issue, because I think that there is still room to further reorganize military personnel.

In your opinion, in recognizing service, would it be fair to use pay scales instead of promoting an officer to a higher rank to give him a pay increase? I am under the impression that at present, to give a soldier a pay raise, you have to promote him to a higher rank. That way he gets a higher salary.

If, within the rank of captain or lieutenant, several increments were added to allow an officer to obtain a pay raise each year, could we solve the problem of pay raises without promoting people to higher ranks?

[English]

Mr. E.W. Halayko: There's one thing that can be done. This is going to be sort of a devious answer, but I'll try to get to the point. We used to have something called brevet ranks or acting rank. As in the case I mentioned in regard to myself, whereby I was replaced by a major-general on this committee, if he could have had acting major-general while so employed, that would have given him some extra money.

Basically, trades pay should be increased, and there should be several increments of trades pay. That way you could end up with a private, group 8 or 10, getting as much money as a captain. But he's getting the money for his trade; the captain is getting his money for commanding men and being a leader. There's that way of doing it. There are increments even within ranks, a pay raise or an incremental raise every three years while in rank. So you could be a three-year captain with one pay or a six-year captain at a slightly higher pay. There are those levels available.

The major problem is the lower ranks. We have to give those privates—and we shouldn't be treating them as privates—better incremental pay to start with. Right now they need it. Secondly, the trades levels should be increased. There's no point in having a corporal who cannot command men. There's no point in having two corporals in a section when one lance corporal does the job. It's too confusing, and it is an administrative and a command structure that falls apart.

The other thing is we now have platoons commanded by captains, which used to be commanded by second lieutenants and then lieutenants, because there's an automatic promotion to captain these days. That's not right. It goes all the way up to the top. It's confusing. Suddenly someone asks, when did you get to be made a captain? The answer is the first of December. The first then replies, you're senior to me; therefore, you're in command because I was made captain on the fourth of December.

That's the sort of thing that goes on. It shouldn't be. A captain is a captain and a lieutenant is a lieutenant. Each one has his job and each has a command job. For the men it's trades pay.

The Chairman: Mr. Laurin.

[Translation]

Mr. René Laurin: Mr. Halayko, you also allude to the fact that the army is being run by politicians and you seem uneasy with that situation. You say that generals should be making the decisions and doing the planning instead of participating in politicians' stupid initiatives. In your opinion, should the army run the country? Would you like us to have a military dictatorship?

[English]

The Chairman: God forbid!

[Translation]

Mr. René Laurin: You even talk about unionizing the armed forces. I do not know if the country would be run better if the president of the union were to become the CDS and make the decisions.

• 1055

I would like you to give me some clarification with respect to the decisions made by men and women who are elected. Should the armed forces come under people who are democratically elected or are you in favour of a military dictatorship?

[English]

Mr. E.W. Halayko: Only if I were the general. However, no. The military must be subservient to—

[Translation]

Mr. René Laurin: With a good pension.

[English]

Mr. E.W. Halayko: Yes.

[Translation]

Mr. René Laurin: And unemployment insurance.

[English]

Mr. E.W. Halayko: Yes.

But to answer your question, the military must always be subservient to the government. There is no way they can operate otherwise if you want to have a democracy. I've been in Chile where we had Pinochet and before that Allende. Those were dictatorships. I've been in other countries that are still under dictatorships.

Canada is a democracy. It's a democratic country and it has to remain that way. In the United States, although the President is the commander in chief of the forces, they still have a democracy, and the military is subservient to the politician. It must always be such.

On the other hand, there are times when maybe a politician has to be sort of reigned in if he goes off on a tangent. That's why you have a good general say, now wait a minute, sir, we can't do that, it's beyond our capability—and so on.

If we go first to the first war, Churchill made a serious error in the Dardanelles, for which he apologized later, but a lot of people's lives were lost. But it was Churchill's decision on the landing on D-Day and the underbelly in Sicily, where I was. He made the decisions, and then the generals and planning staff got together and said now how can we best implement this. And, yes, we landed in Sicily with a minimum of casualties, and Canadians landed in Europe with a minimum of casualties. We had a disaster in Dieppe, but that was something else.

It's because firstly the politician said this is what I want. The generals said now wait a minute, we cannot do it on that date, but we can do it this way and we need this and that. They got everything they needed, the troops were trained, and we did the job on instructions from a politician.

I wouldn't want a military dictatorship.

[Translation]

Mr. René Laurin: You talk about reserve retirees. You say that for service of less than 20 years the contributions could be returned with interest, along with the employer's portion. Have you seen that anywhere else in the private sector? I would like you to tell me where you have seen that.

[English]

Mr. E.W. Halayko: Where are we, because I'm lost on this one?

The Chairman: Page 8.

[Translation]

Mr. René Laurin: It's in the second part, where you talk about the regular reserve. It is in part (iv) of section L. You say that for service of less than 20 years the contributions could be returned with interest, along with the employer's portion. Tell me where you have seen that in the private sector or the public sector. I would like you to give me an example. If you can't come up with an example, explain to me why a precedent should be set for people in the reserves.

[English]

The Chairman: Mr. Halayko, if you could briefly—

Mr. E.W. Halayko: I am the recipient of exactly what you're talking about. I worked at the university for seven years. When I left the university, I got my cheque, which I immediately transferred over to an RRSP. My contributions, the university's contributions, and the accrued interest I put into an RRSP, because I had only seven years.

When I left my second firm upon redundancy, I collected a substantial amount of money, which I cannot disclaim because it was as a result of a court case for the termination, but my contributions to the company pension plan were transferred over to me along with accrued interest and their contributions. That is done in the business world.

Now, what I'm saying here with this man is that instead of contributing to an RRSP, he's contributing to the regular reserve superannuation account. It's growing in interest. All money draws interest, or it should. So when he leaves, there's his boss's money, which is the government in this case, and his contributions, with interest. It's not going to be large. What can they do? About 40 days a year, unless they go on a peacekeeping trip? But it's going to be enough to keep them. It's that carrot to keep the better people in the regular reserves. That's the intent of it.

• 1100

The Chairman: Thank you, Mr. Halayko.

On behalf of the committee, I want to thank the witnesses for attending today. We appreciate your comments.

As we excuse the witnesses, we do have an important matter to deal with. Thank you very much.

Mr. Proud.

Mr. George Proud: Mr. Chairman, I would like to move that the committee authorize the chair to seek an operating budget of $5,200 and a travel budget of $25,718 for its travel to Germany from January 24 to January 31, 1999.

The Chairman: Mr. Wood seconds the motion.

Discussion? Mr. Laurin.

[Translation]

Mr. René Laurin: Mr. Chairman, I do not want to throw a monkey wrench into things, but we are currently discussing a motion that was not on the agenda. I am willing to co-operate this time, but that seems a bit odd to me. In other circumstances, it could happen that something is added to the agenda on a day that we aren't here. We could end up having some tricks played on us.

[English]

The Chairman: No, that's an important point, Mr. Laurin, that everybody knows. The clerk sent out a notice about this meeting, the one I hold here, and I hope you have it. It went to all members. It indicates the witness—the Armed Forces Pensioners'—some future business, and budget, under B, and that's the matter we're dealing with now, a budgetary matter. That's dated Thursday, November 19. Do you have that one, Mr. Laurin?

[Translation]

Mr. René Laurin: Mr. Chairman, I have that agenda. All that it says is “Budget”. You must admit that it is a very broad category that does not provide much information. I would like the clerk to try to be a bit more specific in the future so that there are not any surprises.

[English]

The Chairman: We'll try to be a little more precise.

Yes, Mr. Proud.

Mr. George Proud: I believe we did speak about this at the last meeting.

The Chairman: Yes, we did.

Mr. George Proud: We were going to seek more funding to do that.

The Chairman: We did have a bit of discussion.

[Translation]

Mr. René Laurin: Mr. Chairman, it is true that we discussed it at the end of the meeting, but it was not on the agenda for that meeting either.

[English]

The Chairman: No, that's true. Let me assure my colleagues that we want to keep everyone fully informed, and we certainly don't want to try to slide anything by. I will try to be vigilant, and I know the clerk, as he always is, will try to be vigilant. We'll try to be as exact as we can, but of course we all know that from time to time some future business or something important could come up that we didn't anticipate. We'll try to make sure that's kept to a bare minimum.

We have a motion to approve...

Mr. Earle.

Mr. Gordon Earle: I have a question on the motion, and I hope I didn't miss this when I stepped out for a minute. You have $25,000 towards travel to Germany. Did you not say at the last meeting that the German government was going to be paying for the trip?

The Chairman: Yes, they are. I can explain that. First of all, the clerk made inquiries, and following the proper question by Mr. Laurin, we would have to take our translator so that we can deal in both official languages. The Germans have invited six members of Parliament, and the additional amounts are to cover the clerk and the researcher, who would be necessary to accompany us.

Mr. Gordon Earle: Thank you.

The Chairman: Thank you. Other questions?

Mr. Laurin and then Mr. Goldring.

[Translation]

Mr. René Laurin: Mr. Chairman, I do not know if the working conditions of our interpreters allow it, but would it be possible to use interpreters who are already in Germany instead of paying the airfare for our Canadians? There must be Germans who speak English and French. Is there something in the collective agreement that prevents that?

[English]

The Chairman: The clerk tells me that the German people are looking into this for us, but they are concerned that they have a translator with military expertise... Perhaps they don't have one available.

I think you've raised a good point. If there is a way for us to save money on translation, with someone with military expertise, because of some of the specialized terminology, etc., if such a person is available, we'll continue to inquire.

• 1105

Mr. Goldring and then Mr. Earle.

Mr. Peter Goldring: My question was along the same line, to clarify who is going to be going on this. It's six members of Parliament, is it?

The Chairman: Six members of Parliament have been invited by the German government...all expenses, except for per diems.

Mr. Peter Goldring: There's one interpreter, and what is the other support staff? There was mention of other staff.

The Chairman: The clerk and the researcher would accompany us, and if necessary a translator.

Mr. Peter Goldring: We covered that; the interpreter is the translator.

The Chairman: It's standard procedure.

Mr. Peter Goldring: So you're looking at six members, one interpreter, and one researcher.

The Chairman: That's correct.

Mr. Peter Goldring: And that's the budget, which can be replaced.

The Chairman: And the clerk, of course.

Mr. Peter Goldring: Thank you.

The Chairman: We have a more detailed breakdown available, but that's what it covers.

Mr. Earle.

Mr. Gordon Earle: My other question is with respect to the operating budget. How is that amount arrived at and what does that cover?

The Chairman: Mr. Clerk, could you please explain that?

The Clerk of the Committee: It's based on witnesses' expenses from now until the end of the fiscal year, working lunches...just a basic operating budget—for instance, your request for your witness.

Mr. Gordon Earle: I was just wondering how the amount was arrived at, because it seems to me it could be higher.

The Clerk: We estimated for eight witnesses from now until the end of the fiscal year at $500 a witness. It could be four witnesses at $1,000 a witness. We have a kind of model we use, and I estimated that from now until the end of the fiscal year, eight witnesses.

The Chairman: So it's the clerk's best judgment as to what it would cost, and if there is any change we'd have to alter it.

Mr. Gordon Earle: I was thinking that it appeared to be a bit low, and I didn't want to shortchange the witnesses. However, we can come back again.

The Chairman: We're being cautious, as the government itself is being cautious in its fiscal projections. We're being cautious, but if we need more money we'll have to come back.

The Clerk: I've looked back on what we've spent up to now, and we haven't spent much more than that up to now, as far as our operating budget is concerned.

(Motion agreed to)

The Chairman: Thank you very much. The meeting is adjourned.