Notices of Meeting include information about the subject matter to be examined by the committee and date, time and place of the meeting, as well as a list of any witnesses scheduled to appear. The Evidence is the edited and revised transcript of what is said before a committee. The Minutes of Proceedings are the official record of the business conducted by the committee at a sitting.
This is meeting number 88 of the Standing Committee on Finance. Pursuant to the order of reference of Tuesday, October 30, 2012, we are studying Bill C-45, A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.
We have with us officials from the Department of Finance as well as other departments today to discuss division 15 of part 4. We have officials from CRA, Human Resources and Skills Development Canada, and the Department of Finance.
We want to welcome you all to the committee.
Colleagues, just for your information, in part 4 we have divisions 15, 17, 22, 23, and 24.
We have to be out of this meeting at 6:30 p.m. sharp because there are other meetings here tonight. I encourage us to get through all of this today.
We will start with division 15. I will ask members to state their questions as they did last week.
Could we have one of the officials give us a brief synopsis of these changes?
My name is Ray Cuthbert. I am the director of the Canada Pension Plan and employment insurance rulings division in the Canada Revenue Agency.
We are here to talk about part 4, division 15, the hiring credit for small business for 2012. Essentially, it is the same as the hiring credit for 2011, except for the reference to the years involved.
Small businesses that had employer EI premiums for 2011 of $10,000 or less and whose employer EI premiums in 2012 have increased are eligible for a credit. The credit is equal to the difference between the employer EI premiums in 2012 and 2011. It must be greater than two dollars and it cannot exceed $1,000. The credit is calculated automatically by the Canada Revenue Agency upon processing of the employers' 2012 T4 information return.
The tax credit has been available to businesses for a year already. Are there any statistics indicating the percentage of retention, after one year, of employees hired by businesses that requested the tax credit?
Do you know if the employees are still there after one year? What is the normal duration of a job offered by businesses that received the tax credit?
Given that the measure is included in Canada Revenue Agency income tax returns, we do not have that information. The tax credit is really allocated based on the increase in contributions from one year to another.
Through the various means of consultation available to our ministers and the government, consultations are always carried out. This measure, in particular, was undertaken by certain groups of employers, including the Canadian Federation of Independent Business.
Mr. Cuthbert, I'm looking at what's happening with the pension plans for the employees. There's a provision in this bill that talks about the potential for some retroactivity. In other words, for existing employees—in my understanding of it, anyway—it gives a transition provision. It gives a section on retroactivity. What would that mean for the workers? Are we saying that somehow they could owe something for the plans they have? Do you have any sense of what that could be used for?
They're calling it a transitional provision. If you can't answer, that's fine.
There's a heavy emphasis in the public and in certain media about the richness of public service pensions. My understanding is that the average pension plan for the public service is under $18,000 dollars a year. Is that a reasonable assumption?
I'm a past owner of a small business. I am very excited about the small business tax credit. I know many of my constituents and many small business owners are as well. You went through it—the maximum is if you pay $1,000. Was it $1,000 or $10,000? Could you just go through it again so that people who are listening can understand the basic fundamentals of the tax credit itself, and some changes? Then I will have some further questions for you.
The credit is a calculation based on the difference between EI premiums in 2012 and in 2011. To be eligible for the credit, you must have, in 2011, $10,000 or less in employment insurance premiums. If you meet that criterion, when the employer's T4 information return is processed, there is an automatic calculation that looks at the difference in the amounts.
Okay. They don't have to worry about telling their accountants or anything else. It's just automatically calculated for them. If the difference is over two dollars, for instance, they automatically get that credit.
How does that credit work? Let's say they paid $9,500 last year, and there's a difference this year of possibly $1,000. How does that $1,000 work?
Wow. They automatically get that. They don't have to put any new paperwork in. What has been the uptake of this? Obviously 100% of the people who are eligible would take it up automatically. What has been the response by small business groups such as the Chamber of Commerce, the Federation of Independent Business? What has their response been?
The general response in terms of doing a communications and media scan has been relatively positive. Certainly, the organizations that have raised the issue in pre-budget consultations have talked favourably of the credit from last year.
I don't think it's a matter of one individual being hired; it could be a number of individuals being hired. Depending on how much in employment insurance premiums is paid by that number of employees, the employer has to match—actually, it's 1.4 times what the employees pay. We're looking at the employer premium increase. It depends upon how many employees might be with the organization, how many might be hired; it's not geared to one individual.
I don't think there would be a premium level that the employer would pay to reach the maximum. It really depends upon how much they pay in premiums in total. Employers pay 1.4 times what an employee pays. It really depends upon the aggregate amount. There is no premium level.
Wow. That's 533,000 small business employers who were able to take advantage of this so that they could create 533,000 jobs at a minimum. You're saying that's how many businesses took part, but we're not sure how many of them had one or two positions or more.
Could I please have some clarification about the mechanism? Let's take a hypothetical situation. Let's imagine that a business is hiring about 15 people for a period of six to eight months and it subsequently lays them off, dismisses them or ends their contract. In that case, would the business still be eligible for the tax credit?
The measure aims to simplify administration. This is done through the Canada Revenue Agency. These are aggregate amounts, meaning the contribution levels, the subtraction of one compared with the other and the allocation of a credit.
I don't think we have specific data in that respect but, given that the credit is applied automatically, it is really where the small businesses are located. So the distribution would be the same in terms of small businesses in Canada.
I want to thank in particular a number of you who commented on the pre-budget consultations, which are ongoing right now at this committee. I appreciate the fact that you referred to the consultations of this committee as leading into a budget and then a budget implementation act. In fact, it was CFIB's number one recommendation in the 2011 budget consultation.
I appreciate this, as the chair. Thank you so much for being with us and responding to our questions.
We will bring the next set of officials forward, and we will move to division 17 of part 4. This is dealing with the Canada Mortgage and Housing Corporation Act.
We'll welcome Ms. Pearse back to the committee.
Welcome back. Do you want to give us a very brief synopsis? It seems to be a very straightforward change.
I think my synopsis is actually longer than the amendment in the act. You'll have to forgive me for that.
This amendment repeals a paragraph within a subsection of the Canada Mortgage and Housing Corporation Act that stipulates that
No person shall be appointed or continue as President or as a director from outside the federal public administration if that person...
(c) has reached the age of seventy years
This change, to repeal an age limit on the president and directors, is consistent with changes made to other acts in 2011. These include changes to the Canadian Human Rights Act to prohibit federally regulated employers from setting a mandatory retirement age, and to the Auditor General Act repealing provisions stipulating that the Auditor General must cease to hold office upon reaching 65 years of age.
Likewise, there have been changes to crown corporations such as Canada Post and the Business Development Bank as well as the Bank of Canada to remove or amend age limits.
There is a minimum age in several pieces of legislation. There is a project to ensure that all legislation take the same approach and have the same policy. The current policy is to eliminate all minimums.
Division 22 suspends the Canada Employment Insurance Financing Board until the EI operating account has returned to a cumulative balance and the CEIFB can fulfill its full legislative mandate.
In the interim, the premium rate will be set by the Governor in Council according to the current rate-setting mechanism set out in the EI act. Specifically, it will take into account the recent changes to the rate-setting mechanisms that were introduced as part of BIA 1, namely that the premium rate cannot increase or decrease by more than 5¢ on an annual basis and that the rate be set every year by September 14.
Once the EI operating account is projected to be in cumulative balance, the CEIFB is to set the rates based on the new rate-setting mechanism that was introduced as part of BIA 1—that is, the new seven-year break-even rate approach.
I'd be happy to answer any questions you may have.
Bill C-45 suspends the board. Once the account is in the black, the board will determine the contribution rate based on the new approach under Bill C-38.
Starting today and until then, the rates will increase by 5¢ each year to balance out. Since the board cannot fulfill its duties as set out by the legislation, with respect to investment and funds allocated to the account, the government decided to suspend its activities and resume them once the balance is achieved.
The government's intention is that, once the account is balanced again, the board, which will be revived, will establish the rate under the approach that was presented and adopted in the budget implementation bill in the spring.
It still isn't clear. Why does taking this approach require the board to be abolished or suspended? The board was created with a very specific objective that was, among other things, to propose contribution rates. That's what it has done for three years, based on what you said.
So now you are proposing the suspension until the employment insurance account is back to zero. Why suspend the activities? Is it simply to enable the minister to determine contribution rates?
The budget stated that the rate increase of 5¢ until the balance is achieved would lead to a review of the board's mandate. The purpose of this operation was to establish the contribution rate as effectively as possible from a financial perspective.
So following that review, the government decided to suspend the board and to have the Governor in Council establish the rate, which was a more effective way of doing things. Once the account is balanced and the board can fulfill all its legislative duties, the board's activities would resume. It was mentioned that the board would then return to its role of establishing the contribution rate and its other duties relating to the investment of any surpluses.
All I can tell you is that in the budget the government did make a commitment to look at the operations of the CEIFB and to undertake an examination to ensure that the EI rate was set in the most effective and efficient way possible. This was a decision taken by the government.
The process is similar. An actuary hired by the board currently makes actuarial calculations and submits a report. In the interim period, an actuary will do the same kind of calculations, but the employer will submit the document to the Employment Insurance Commission, which will then draft another report. Both reports will be submitted and taken into consideration when the decision is made on establishing the rate.
Once the decision is made, the two reports will be tabled in Parliament by the Minister of Human Resources and Skills Development, and she will then have 10 days—and by 10 days, I mean 10 days when Parliament is sitting—to do so following the decision.
As is the case currently, the documents will be considered as suggestions. So it will be up to the minister and the committee to make the decision, based on the information that has been presented to them.
I want to clarify for my own understanding here. I'm reading from the budget documents:
Economic Action Plan 2012 ensures stable, predictable EI premium rates by limiting premium rate increases to 5 cents each year until the EI Operating Account is in balance, and then moving to a seven-year break-even rate.
Madam LaRoche, Ms. Miller, can you explain why the government made these changes?
A series of consultations were held and championed by Ms. Glover and Ms. Leitch throughout the fall of 2011. The government heard that they wanted to ensure predictability and stability of the EI premium rates. Those changes were made as a result of these consultations, so the 5¢ was seen as a way to stabilize and to ensure that rates are going up or down in a marginal way so that employers and employees can adjust accordingly.
Similarly, there was a decision in budget 2012 to advance the date at which the rate was set by two months to give employees and employers more time, from September to next year, to adjust whatever systems they needed to and to be able to plan accordingly.
This is mentioned in the budget. Ms. Glover and Ms. Leitch had broad cross-country consultations, including in my own community of Leduc, with small businesses from across that region, asking for advice on how to set these rates going forward.
They did this because concerns were expressed in the past that funds paid in through EI premiums by both employees and employers were then used by the government for general revenues to reduce the deficit. They basically took funds that were there for the purposes of employees and employers and used them for general revenues. That was the concern that started this initially. Am I correct?
—and the concern still expressed by people was—and they used the figure of about $50-plus billion from employees and employers—that it had actually been used for general revenues. Therefore, they wanted that concern addressed. That very large-scale concern, it seems to me, is exactly what budget 2012 and these actions are attempting to address in doing the cross-country consultations and coming out with specific recommendations to do so. Am I correct in that?
Just so I understand the motivation for this change, governments have routinely put EI funds into general revenue and have used them for other purposes, including paying down debt, which the funds were never intended for, because premiums had been paid by unemployed workers and employers. Is that correct?
The intention of this change is to ensure that the EI premium rate-setting mechanism is cost-effective. That is why the financing board has been suspended until the account is balanced and it can be in a position to fulfill its legislative mandate. That is the purpose of this change.
The account hasn't been able to be balanced, though, if governments have been using EI premiums for general revenue and not for the purposes for which they were intended. Tens of billions of dollars were taken out.
The issue is that when you're in a recession and then in a very weak recovery and unemployment remains persistently high, you have elevated demands on EI benefits. Of course, as we see in the report from Statistics Canada today, only 40% of unemployed workers are even able to get benefits, but if people were truly able to get the benefits that they were entitled to, the fund would be in even worse shape. Isn't that correct?
That's right. The people who are eligible for it, the 40% who are the lucky ones, are able to get benefits.
Does it make sense that during a period of low unemployment the EI fund would be increased and have a surplus so that during periods of high unemployment the fund will be built up so that unemployed workers can get access to benefits?
That is why we changed: to ensure that we have stable premium rates over the business cycle. That is why the government is introducing the new rate-setting mechanism, the seven-year break-even rate that will be introduced once the account is in balance, in order to have a longer span in which we project and have greater stability.
The fact that money was taken out before, when there was a surplus, and was not given to unemployed workers is part of the problem. Is that the problem you're trying to address, that these funds were used for other purposes? Are they going to be protected now so that the money cannot be siphoned off into general revenue?
I can't speak to that, but I can speak to your concern that the money is consolidated. It is consolidated on the advice of the Auditor General, and it's a requirement. That is what I can speak to. I'm afraid I can't speak to your other question.
I didn't mean to indicate there were two funds. I was attempting to show that the changes are actually there to address a lot of the concerns that have been raised with respect to that issue in the past, which I think they effectively do. Others may disagree.
I was actually trying to sit back and enjoy the conversation. However, it has gone quite off track, so I think I might step in and try to help, since I took part in a fairly extensive consultation across the country.
First and foremost, Ms. Nash is absolutely incorrect and misleading in the statements that she makes about governments using this account. There is no evidence that any other government, aside from the Liberals, entered into any kind of agreements or contracts to use this money from the EI account for general revenues, so I'd appreciate it if she'd clarify that she had no idea of what she was talking about, because it's in fact absolutely not true.
I think some of these are points of debate, but there is a point of order with respect to decorum. I'd just ask members to deal with the arguments of the other side and not to use terms like “misleading” when referring to another member. We can counter other arguments, but when we speak of other colleagues, we should always speak respectfully.
I'm attempting to do that by saying “misleading”, because I don't know another word to describe that, Chair. I apologize, but it is misleading. There were no other governments, save one, and it was a Liberal government.
With regard to the project at hand, there was a necessity to try to find a way to prevent that same situation from occurring, and under this government we provided for an account, an EI account, and an account that now requires some attention because of the several withdrawals from it by a previous government.
This project was put in place so that we could see predictability for many of our businesses. Under the board there was a suggestion that there be a 15¢ increase, which our government during a time of recovery from a global recession decided to step in and limit to 5¢, simply because businesses at that time were very much in jeopardy of having job losses.
We tried to do what we can to create and maintain jobs, particularly when it's a fragile economy. The predictability factor was taken under consideration across the country, and businesses, labour groups, and individuals who took part were very much in agreement that this is the direction they would like to see the government go.
However, I do want to ask a question. My understanding--and it may not be these officials--is that eight out of ten Canadians qualify for EI, that many of the measures that have been put in place actually are helping to make sure we move towards a balanced account, and that this measure is being suspended so that this board can act when the account is in surplus.
Do the officials agree that all of those things that have been in place appear to be measures that will lead to a balance being obtained, and then the board can be put back into place and continue the work that they would have done if they had had a surplus when they began?
As well, I apologize, Chair, through you. I don't know how else to express it when someone is misleading, but there have been no other governments. There have been no other governments, so I wanted that to be perfectly clear to Canadians who are listening.
My advice as a chair, though, is to say that the member opposite is incorrect, and then state your view in terms of what is correct. Obviously you have a very detailed knowledge of the consultations that happened, so I would just ask members to state what their view is or disagree with the argument. As you know, the word “misleading” is.... Speakers in the House have said that this word ought not to be used.
The responsibility of the chair is to try to ensure that there is a good healthy debate here, but also one that is respectful. That's what I'm trying to do, and I'm encouraging members on both sides to argue with a point rather than to say something about a member opposite.
I appreciate the clarification. Perhaps I would ask then that the member submit the proof rather than to comment on it the next time. I'll do that and continue from there.
I appreciate the officials answering the question with regard to the attempts by this government to close the loophole on other governments being able to access the account and on the fact that it was a consultation done across the board to try to get back to a situation that will benefit both employers and employees for many years to come.
To my friend from Parkdale—High Park, I'd just make one comment. Every time there's a government elected, they are referred to as “governments”. If you have a Liberal government successively three times, they're governments. If you have Conservative ones successively, they're governments, too.
To go back to the point, originally my understanding of the concept of unemployment insurance was that it was an insurance program for workers when they lost their employment, underwritten by the Government of Canada, and using premiums to do that. Would that be an effective way of describing the intent originally?
Okay. Unemployment insurance was changed to employment insurance under the Liberal government. I'll actually name one so we don't get confused here. Prior to that change, the concept of unemployment insurance was that if you lost your job, because you had paid premiums and your employer paid premiums to the government, that money was used. If there hadn't been enough in the account, the government would have added more to cover it. It was underwritten by the Government of Canada.
The concept that Canadian workers have is that there was an unemployment insurance fund that they were paying into. We were of the understanding that it was a separate amount of money and that it wasn't in general revenues in those days. The change that took place in the nineties was that they shifted it to general revenues and at that point in time—the dollar amount we were hearing thrown around was anywhere from $30 billion to $50 billion—it was used by the government of the day to pay down the debt.
My points were the general revenue aspect and that it was being underwritten by the Government of Canada at that time.
We understood that during that time there was a surplus in the billions, without our going back and forth on exactly what it was.
The point I was getting to is this. You're talking about, currently, a break-even point. Instead of $50 billion, let's say there had been $30 billion in there previously. In the last Parliament—I believe it was the last Parliament—there was a motion passed to take that money off the books.
From a technical standpoint, workers perceived the money that had been used to pay down debt was like a loan and had to be repaid by the government to the fund in order to be there for workers. It was written off the books; thus, we got into this.... Well, I guess it would have been in 2007 or 2008 that this occurred. We started this investment board, the board that was going to take care.
What I'm looking for, though, is when we get to the so-called “break-even point”, how much money would have to be on hand to have a break-even point?
When the account is in cumulative balance, we're going to start the new rate-setting mechanism. We'll be looking seven years ahead. We'll be looking at the rate, over those seven years, that would be needed in order to be in balance at that time. That is the way the rate will be set.
No. What I'm looking for is this. Over this interim period of time, we will be having rate increases or not. We will have whatever is deemed effective to get us to a break-even point. At the break-even point, will there be any money on hand to backstop the needs of workers who happen to be unemployed, or are we at zero?
I understand that. Thus the incoming revenue from premiums will cover the outgoing costs without any further costs anywhere else, but there's no extra money anywhere backstopping it, other than general consolidated revenues over here. In other words, we're completely away from where we were.
On the relevance to this particular section, I understand now why the government has limited some of the scope of the budget that the NDP wanted to ask questions on. They're just going fishing, and they're using a fishing reel that goes in every direction at once. I don't really understand what it has to do with the particular section that we're here to have the officials answer questions on. It's like a fishing expedition with a shotgun.
I too was going to raise a similar point, although not as a point of order. I think we can spend a lot of time in terms of the history of the EI fund, but certainly I've heard many people say that this is a good idea in terms of moving forward. In the medium term it's an effective way to save some money by not having a board operating when it doesn't have the flexibility to do what its original mandate was, and to balance that out with the employers and the employees having increases that seem reasonable and that they can count on.
To me, it is a relatively straightforward section that I would hope would have support from all parties, because I think it's a very sensible and reasonable way to move forward.
It was a joint consultation between the Department of Human Resources and Skills Development and the Department of Finance. Subsequently, there were five or six round tables that took place in the various regions of the country. They were held in Quebec City, Halifax, Edmonton, Toronto and other places. There were stakeholders from various settings, including employees and employers, as well as academics. In short, they were people with a stake in the matter. They discussed issues, such as how the government could improve the way costs are established so that things become more stable and feasible.
Our committee has pre-budget consultations. So there are government as well as opposition members. That makes it possible to have two perspectives. If I understand correctly, there was no one from the opposition at those consultations.
Mr. Chair, you are the one who actually raised the issue of consultation. I am just asking questions with regard to what you yourself did regarding consultations, so I am just following up on that issue.
I am actually using the term “suspended” because the government intends to bring it back. The board will then be responsible for setting the rates once the budget of the fund is balanced again.
In fact, a crown agency cannot legally be suspended. That is why the bill dissolves the board. Once the government determines that the account is balanced, the board will be reinstated and it will then be able to set the rate.
Just for information purposes—for Ms. Glover's benefit, actually, since she may not recall this—in 2010 the federal government reduced the EI fund from $57 billion to $2 billion and moved $55 billion into general revenues. That's for her clarification, because she was asking about that and I thought she would be very interested in getting some accurate information.
In 2010 the government closed the EI account and opened the EI operating account. Again, I emphasize what I've already said a few times: it's part of the consolidated revenue fund, so it's a bookkeeping entry and it is how the ins and outs of the EI account are calculated.
It was an active debate at committee at the time. The officials are on record, the opposition's on record, the government's on record. I would strongly advise us, as a committee, to move on. Okay? I think I have a consensus to move on, unless you feel you have to make the point, Ms. Glover.
Well, I want to make sure the officials are clear.... There was no cash moved. Perhaps you could clearly explain that there was no cash moved and that it was a simple way of recording numbers. The cash that was in the account when there was a new opening.... The new account was so that we could close loopholes allowing government being able to access money.
Can you just be clear about that so that Ms. Nash understands?
The EI account was a bookkeeping entry as a way of tracking the ins and outs of EI premium revenues versus EI benefits. All of the accounts are consolidated with the consolidated revenue fund and are part of general revenues, so it wasn't a matter of moving cash from one account to the other but simply a matter of how the ins and outs of the EI account were tracked.
If you wish us to consider anything further on that, you can always submit it to the committee, but debate will continue, I'm sure.
We want to thank you so much for being with us here and for responding to our questions on the two divisions you were here today to present on.
We will bring our next set of officials forward.
Colleagues, perhaps while we're getting the next officials to come forward, I'll ask the clerk to pass around a very small motion. I think it has been agreed to by the three parties, but perhaps I could ask all the members to read over the motion. If there are any problems with it, please indicate this to me as the chair.
Mr. Chair, I'd like to give notice for the following two motions, to be debated on Wednesday. One motion is “that the committee requests the Parliamentary Budget Officer undertake a cost analysis of Bill C-377”.
The other is “that the committee invite officials from the Canada Revenue Agency to appear as witnesses to answer questions regarding the cost of implementing and administering Bill C-377, and that this appearance take place prior to the committee's clause-by-clause consideration of this bill”.
My name is Kathleen Kelly, and I am the executive director of pension policy and programs at Treasury Board Secretariat.
I am here with Joan Arnold, senior director, legislation, authorities, and litigation management, and Kim Gowing, director, pension program management and regulatory policy.
The amendments we're here to discuss are to the Public Service Superannuation Act, the Canadian Forces Superannuation Act, and the Royal Canadian Mounted Police Superannuation Act.
The Public Service Superannuation Act amendments provide that contributors pay no more than 50% of the current service cost of their pension plan. In addition, for the public service, the pensionable age is raised from 60 to 65 in relation to persons who become contributors on or after January 1, 2013.
For the Canadian Forces Superannuation Act, the amendment would change the limitations that apply in respect of the contribution rates at which contributors are required to pay, as a result of the amendments to the Public Service Superannuation Act.
Similarly, the Royal Canadian Mounted Police Superannuation Act is being amended to change the limitations that apply in respect of the contribution rates at which contributors are required to pay, as a result of the amendments to the Public Service Superannuation Act.
First of all, I have a technical question. What would these changes mean for people who are in the public service, leave, and then come back? Would they in fact be involved in two different plans? Would that be the outcome?
If members of the public service leave and they leave a vested interest in the plan—for example, if they leave a deferred annuity—and come back as employees after January 1, 2013, they will go under the old provisions, .
However, if these employees had severed all ties with the government and took a transfer value, for example, then they would come under the new provisions of the plan.
In the past, employee contributions under the public service pension plan were below 30%. Can you confirm that the previous Liberal government changed the rules in 1999 to increase employee contributions and moved towards a cost sharing ratio of 60:40?
What would happen to public servants who were in the pension plan prior to 2013, who leave the public service and return and rejoin after the pension plan? What would apply to them? Would it be a two-tier pension, effectively, or will it be 60 for their entire pension?
It depends on the circumstances when they leave the pension plan. As I just explained, if employees were to leave with a vested interest—for example, they had 15 years of service and they decided to take a deferred annuity, so they've left an interest in the old plan—and they were to come back as employees, they would come under the old provisions of a retirement age of 60. If they had no ties to the current pension plan and they came back again after 2013, they would be subject to a retirement age of 65.
Okay. They told me the same thing about ours. I thought I would ask, just in case. It's a good return on the dollar. There's no doubt about that.
You talked about the difference between the Canadian Forces and the RCMP relative to the rest of the public service pensions. Is there a way of explaining that a little more clearly? I understand that there are some concerns with Canadian Forces and RCMP not being treated quite the same as the other ones. Would that be accurate to say?
That's separate. That has already been passed, obviously.
Are there any other pensions that are retroactive in the way that the Prime Minister's pension went retroactive? The changes in the pension went back to 2006, to the first day he was sworn in. Have any other pensions been dealt with in the same manner? Are there any other pensions at all that have gone retroactive?
One of the questions that were submitted by the Library of Parliament has to do with the impact of the amendments on unfunded liabilities. But could you first tell me what is the current amount in unfunded public sector pension liabilities?
I can't speak as an accountant, but generally it's the annual current service amounts that affect the government on a budgetary basis. The overall pension liability is carried in the Public Accounts of Canada.
The pension advisory committee is made up of both employer and employee representatives. The employee representatives are nominated through the National Joint Council. There is one pensioners representative, as well.
They were constructive conversations, clearly, on the employee side. This was not something they were happy to embrace, but they were very constructive conversations, and they understand the pension plan.
I am Carl Trottier, the executive director of strategic compensation management at the Treasury Board Secretariat.
Before you today on division 24 are three amendments to the CRA Act. The first one is to require that CRA get Governor in Council approval prior to settling a negotiated settlement. The second requires that a bargaining mandate be obtained by the President of the Treasury Board before negotiating a mandate. The third is that they also come to the President of the Treasury Board on any major changes to their HR policies that could also have some cost implications.
Since the agency is a separate body, people will negotiate their own wages with the bargaining agents. However, before the start of negotiations, the President of the Treasury Board will be contacted to approve the mandate that they hope to negotiate. It will then be up to the President of the Treasury Board to determine whether the mandate is appropriate, in light of the mandates given to other employers.
No, it is the responsibility of each separate employer to make the request and to discuss it with the Treasury Board Secretariat, even before going to the president's office to make the request. But prior to that, some kind of consultation has to take place.
Unfortunately, it is not public for a number of reasons. That would make negotiations very difficult and probably very costly as well. For all those reasons, those documents are sealed when a request is made.
The agency was created with a board of management. The agency has the power to hand over mandates to this board. The agency is the only separate employer that has this flexibility. To err on the side of caution, we also wanted all separate employers to be governed in the same way in order to be able to go to one source for all the mandates.
Do they apply to the current parties that are negotiating? Sorry, is that the question? Yes, that's correct.
The CRA has two bargaining agents they deal with. They have two large collective agreements. One is currently bargaining, and one expired a month ago, I believe. Therefore, when this comes into effect, if their mandate has not yet been approved, then they will have to come to us and ask the President of Treasury Board for a mandate.
No, they haven't, and they haven't been held to them either. However, if we just play this out and they take a year to 18 months to negotiate, when they are going to sign the collective agreement, they will be required to get Governor in Council approval before applying the settlement.
I'll follow up on what Mr. Brison mentioned. You would originally have to get an understanding of your mandate before negotiations started under these terms, and then when you concluded negotiations, you would have to go back to have that reaffirmed.
If this bill passes now, on anything going forward from there, would you get pre-approval of where you are expected to go by the government, and then when you concluded negotiations, would you have to go back again?
So now we have a situation in which you had a mandate to negotiate a collective agreement that didn't have that participation by the government at this point in time, and when you conclude that contract, you may have to go to the government and they may say they don't agree with it.
I'm a little concerned about changing in mid-stride. You may have gone into negotiations in perfectly good faith with the employees, and they think they have a good relationship at the bargaining table, and that potentially could be turned upside down.
What's important to know also is that the Treasury Board Secretariat, though it didn't have to come to the President, would be in contact with them constantly, in terms of advising them if it's an appropriate mandate or not. That continues. Therefore, when they come back to the Governor in Council, it shouldn't be a surprise to anyone.