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Hansard transcript pension discussion Nov 26 2013

Pensions

Mr. Melanson: It is pretty obvious that this government has squeezed every taxpayer in this

province for three years. It has compared New Brunswick to Greece and to the city of Detroit.

Everything was doom and gloom. What those members are doing now is trying to buy votes in

the last year of their mandate by spending over $600 million in six months. That is an average of

$100 million per year. That is incredible old-time politics.

Mr. Melanson: The Minister of Finance said that other provinces are looking at New Brunswick

for pension reform. That is not the case, because no other province has used the shared-risk

model. Can the Minister of Finance please tell us this today? With Bill 11, which he put forward

last week, what will the financial impact be? How much liability will be deducted from the

books of the province with this bill?

 

Hon. Mr. Higgs: First, I need to clarify about the announcements being made on capital

spending. As you know, capital spending is amortized over many, many years—20 or 25 years.

It is not the same as spending on the expense side. If you want to talk about the expense side and

you want to look at the commitments and the spending that we did, you want to look at the

results of our spending.

The curve has flattened out. For the first time in 11 years, we are under the previous year’s

expenses. This year, we are under by a percent in all departments—98% of departments. We

have seen controls on expenses. We have also seen controls on the hiring frenzy, which was

typical of the previous government leading up to the election. We are not doing that. The

numbers are coming down. We have seen trends in overall spending coming under control.

In the case of the pension reform, I think the minister should look at the people who are looking

at this who are not paid consultants: Jim Leech, CEO of the Toronto pension plan; the New York

Times; most lately, Moody’s; the Boston College Center for Retirement Research; former

executive vice-president and chief economist Dr. Lloyd Atkinson.

 

Hon. Mr. Higgs: Outside forces are looking at this and saying that this is the model. This is

the . . .

 

Mr. Melanson: If the Minister of Finance said that there is a hiring freeze, the government

should have applied the same rule to Margaret-Ann Blaney. They should have applied the same

rule to her—$2 million for a 10-year contract.

(Interjections.)

 

Mr. Melanson: The question is this. With Bill 11, which you brought forward last week to

reform pensions, what financial liabilities will be on the books of the province, by introducing

this bill? You have been talking about a $1-billion liability. What will be the impact of this bill

on the $1-billion liability?

 

Hon. Mr. Higgs: I answered this question last week. The program of putting together this new

pension reform actually deals with the $1-billion liability that is currently on the books. More

importantly, it deals with the $1.5-billion increase in that liability over the next 20 years. That is

what it deals with.

The other important thing that it deals with is that we, as taxpayers and current employees, no

longer put $140 million of extra money into a plan that is destined to fail unless we fix it. That is

why we are looking at this. That is why we are moving forward with it. You cannot ignore it.

You have to fix it. It may come as a foreign concept, but it is reality.