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Hansard Transcript pension discussion Legislature Dec 4 2013

Pensions

Mr. Gallant: We are weeks away from the conversion of the PSSA to the government’s sharedrisk plan, and the government has not released the details on the costs. There will be costs associated with converting the PSSA to the shared-risk plan. Will the Minister of Finance inform this House what will be the costs of converting the PSSA to the shared-risk model?

Hon. Mr. Higgs: Yes, that is true, we are weeks away. However, as we go through the process—and this has been a process for the past two and a half or three years—the final cost of conversion . . . I cannot give you the final cost at this point. However, what I would say is that the costs of not converting are extremely high. The costs of avoiding this are extremely high.

This conversion is going to ensure that we have a pension, it is going to ensure that we can afford the pension, and it is going to ensure that it will be there and it will be secure for the pensioners who are here today and for the pensioners who are not here today. That is the cost of making sure that we are looking after employees, retirees, future employees, and the taxpayers of this province, so it is money well invested.

Mr. Gallant: A pretty basic, fundamental principle of finance and economics is that, to know whether it is a good investment, you have to know how much you are spending. To have the Minister of Finance get up and say that he has no idea what will be the cost of converting the PSSA model to the shared-risk model is of incredible concern, to say the least.

I would at least assume that his ministry would have an estimated cost and that the Minister of Finance would have been briefed as to such cost, so I ask the minister to provide us today with the estimated cost of converting the PSSA to the shared-risk model.

Hon. Mr. Higgs: I think that, through the process, what we have identified is that the cost of servicing both the PSSA plan and the teachers’ plan—but the PSSA plan, in particular—has exceeded $673 million in excess payments over the last 20 years. Last year alone, it was over $50 million.

Let me say that, as we convert to a new model and we have security in our pension plan, it will be well less than what we are spending today in extra payments. In fact, I would say, it will be a significant magnitude—5 or 10 times—less than what it would cost us every year to have a plan that is not sustainable or not going to be there when we need it. There is only a 50% chance if we put $1 billion in it today without structural changes.

What we are doing is a must-do in order to be sure that it is there. It is a good investment for this province, and it will ensure that the pension survives. Thank you. Mr. Gallant: The only thing that we can say through this process is that we have a government that will not provide the information to us, will not provide the information to pensioners and retirees, and will not provide the information to New Brunswickers.

Nous sommes à moins d’un mois de la date prévue par le gouvernement pour la mise en oeuvre du changement du régime de pension de la Loi sur la pension de retraite dans les services public au modèle à risques partagés. Malgré cela, le gouvernement n’a toujours pas publié l’information demandée ou n’a pas confirmé des détails importants sur la gestion du régime de pension à risques partagés. Le ministre des Finances va-t-il au moins nous dire aujourd’hui quand sera créé le conseil qui va gérer le régime à risques partagés et quand seront nommés les membres de ce conseil?

Hon. Mr. Higgs: The MOU that has been signed by the members of the union is very, very prescriptive on how the governance model of the board of trustees is set up. It consists of five members of the plans, individuals from the plans, and it consists of five members appointed by the government, one of whom will be a coalition member—a retiree, I should say. That plan is all set up. There is not anything new. We are not inventing anything there. That is all part of the MOU. It was done for the previous plans, for the nurses and hospital workers. We are doing what was done before, so that is not a new thing.

What you may be speaking of is in relation to the governance model and working with the NBIMC, and that is something that says: How do we look at best practices, how do we ensure that the NBIMC can be the investment manager, and how can we ensure that it delivers on the results that are required to make this plan secure?

We are confident not only in the plan that has already been set up through a board of trustees—we have already done it once—but also in how we are going to go forward. Thank you.

Mr. Gallant: I am not convinced that the Minister of Finance is listening to the questions, but I can guarantee you that there are many people here today who are listening to the questions and who are certainly listening to the answers. I asked when—when—the members would be named to this board, when we would see that in place, and there was no answer to that. Let’s try another one.

Le gouvernement n’a toujours pas fourni aux gens du Nouveau-Brunswick l’information importante sur les coûts associés à sa réforme du régime de pension.

Le gouvernement a déclaré qu’il garantirait les prestations de base, ce qui veut dire qu’il y aurait des responsabilités résiduelles sur le gouvernement. On ne peut pas garantir qu’un montant sera payé sans avoir la responsabilité du montant garanti. Le ministre des Finances peut-il nous dire quelle somme, par rapport à la Loi sur la pension de retraite dans les services publics,demeurera dans les livres du gouvernement suite à la mise en oeuvre de la réforme? Hon. Mr. Higgs: First, to go back to the board of trustees, it will be done in the next two weeks, because the plan is expected to be in place for January 1 of this year. It will happen over the next two to three weeks. We have done it before. If that helps with your timeline, that will happen and the board members will be put in place. It will not be a big public announcement. It is not like other, different boards that are put in place. There will not be a big splash in the paper. However,

the idea is that this is all part of the process.

In relation to the guarantee of base benefits, do you know what? We said from the very beginning that the risk was really small—really small—and we meant it. It was not a financial issue. In fact, it was an emotional issue. What we did was deal with the emotion because we are so sure of the plan, its design, and its ability to achieve what it says it will achieve. With regard to the actual base benefit, we are saying that it will never go lower than what you receive today, and we are making that commitment in the legislation and making it part of General Revenue.

We do not have to book a liability because the risk is so, so small.

Mr. Gallant: It may be an emotional issue for some, but it is an emotional issue because we are talking about their livelihood. We are talking about a government that gave its word to make this a voluntary process. We are talking about a government that gave its word that everyone would be consulted, but that was not the case. Charts have come from the pensioners and the retirees that indicate the thousands of dollars that they risk losing, potentially, over their lifetimes. That is why this has become an emotional issue. We are talking about people who have to pay their bills. People have made decisions on a quality of life that they would like to have when they retire and in their later days.

I would ask the Minister of Finance this: Considering that we cannot get specific answers to the questions that we are asking today, does he agree with his government’s actions in terms of shutting down the debate on Bill 11?

Hon. Mr. Higgs: There comes a time when you have to fish or cut bait. We could talk about this until the end of this session, in the session to come, and for another year, because that is primarily what you would like to do: just talk. The purpose of getting something accomplished means that we have to look at the situations that are threatening our pensions and look at the development of a philosophy and a reform that can actually improve our pensions. That is what we are doing.

We have to move forward, because, as we stated before, we are not a party of inaction. We are not a party of moratorium. We are going to move forward and make it happen. Our leader committed to a decisive path forward at the beginning. Pension reform was a priority, it is a priority, and it is going to happen. Yes, I agree with it, and we need to do it.

Mr. Gallant: I am a little disappointed. Although the Finance Minister did not answer all the questions that we put forth today, we find him, in his last answer, reverting to the talking points of his caucus.

I will ask the Minister of Finance again: Considering that this will be seen as one of the most important, if not the most important, pieces of legislation that his government will put forth in its mandate, considering that thousands of people have very legitimate questions, and considering that the opposition still has many questions that we would like to bring to light, does the minister agree with his government’s actions—considering all of this—to shut down the debate on

pension reform, to shut down the conversation, and to shut down the questions being asked? Can the Minister of Finance get up today, despite all of that, and say that he agrees that we should shut it down?

Hon. Mr. Higgs: Do you want a direct answer? Yes, I do agree. I agree because I have witnessed what the show has been over the past several weeks and months. I witnessed, when we started this, that pension reform was unanimous. We needed to make it happen. Every party said that it was great that the Premier was looking at this as a solution. We do not want to be another Detroit or Chicago. We do not want another Nackawic on our hands. We said that we wanted to fix the pension plan and we wanted to make sure that it was going to be there for the people who depend on it.

I have listened to the level of discussion, the level of questions, and the details—or lack thereof—in terms of real information or the questions being asked. Yes, it is time to avoid the public presentations that we have seen, get down to the meat of it, and say: Let’s fix it. Let’s move something forward. It is time to move, we are prepared to move, we are ready to move, and we will move.

Mr. Gallant: The Minister of Finance once said that he thought that debate was good and that it could be productive. Now, he is saying that we are not doing a good enough job, when he is the one who will not even answer a simple question: What would be the cost of converting the PSSA to the shared-risk model? If he does not know, what is the estimated cost? The minister comes back today—the same day he will not answer that simple question—and says that we are trying to filibuster or that we are not filibustering enough or that we are not asking good questions.

Our critic was doing a phenomenal job in Committee of the Whole. Unfortunately, we are going to be limited. We have pensioners and retirees who have written thousands of letters to us and to the government, asking very legitimate questions and not getting the answers. This is an important piece of legislation. Whether we agree with the outcome or not, would the Minister of Finance not take today for debate and make sure that we have our questions answered? That is important, and it should be respected. Will the Minister of Finance confirm that he wants to shut down debate?

Hon. Mr. Higgs: I do not know how many times I have to say that, in relation to getting to the point of asking real questions, we have been spending a lot of time in discussions like this or in statements and presentations and avoiding getting into Committee of the Whole, where we could actually get into some real discussion. Yesterday, we had a good discussion back and forth.

Unfortunately, my voice played out a time or two. Nevertheless, we talked back and forth. Some good questions were asked, and we gave good answers. That is real discussion. That is real debate. You have procrastinated in getting to that point, in order to have more opportunity to grandstand.

You are where you are, and that is not our fault. We are going to move the bill forward because it is the right thing to do, to ensure that we have a sustainable and affordable pension plan for

pensioners, for employees, for future employees, and for taxpayers. This is a win-win situation, and we need everyone’s help to get there. I am looking forward to this plan delivering exactly what it says it will. People will look back and say: What was all the fuss about? Thank you.

M. Gallant : Nous avons un gouvernement qui avait promis en 2010 qu’il discuterait avec les citoyens et que, en tout temps qu’il y aurait une grande décision à prendre, il ferait sûr de consulter les citoyens et d’avoir un vrai dialogue.

We have many New Brunswickers who have ideas, who have questions, who have suggestions, and who have concerns. How in the world can the Minister of Finance say that there has been grandstanding? For weeks and weeks, we have been asking questions. If you listened to the speech I gave last week, I mentioned that I wrote an op-ed months ago, almost a year ago to the day, asking for the same information we are asking for today. This government has provided none of that information.

If the Minister of Finance thinks that this is so good and that people will look back and ask what the big deal was about, why will he not tell us how much it will cost to convert? Why will he not give us the actuarial tables? Why will he not give us the legal opinions that he received? Why will he not give us the numbers for all the assertions that he made? I would like to have the Finance Minister explain that.

Hon. Mr. Higgs: I am sure that, when all is said and done, you will see the exact cost of conversion. You will see everything on how we got to this point, in relation to working from our current plan to the new plan. When we talk about the actual information that is being provided, why did we agree to have an independent actuary look at the numbers? Why did we pay for that to happen? It was to look at all the valuations, to look at the validation of our situation—and it was validated.

Unfortunately, the solution on the other side is always: We do not want to do anything. We know it is a problem, but somebody else will deal with it. That somebody else is us. That somebody else is taking the opportunity to fix something in this province—not just to undo what somebody else has done but to actually move the province forward.

You can talk to Robert Blais. You can give us the credentials of Mr. Dussault, and we will welcome him in to look at the numbers as well. However, the credentials are very important. This is a professional association guided by professionals, not by a hired gun who is looking . . .

Mr. Gallant: I will tell the Minister of Finance why we got an actuary to look at the documents. It is because the government would not release any of the information. That actuary had to sign a confidentiality agreement and agree not to talk about the figures. That is why the government provided that actuary.

Now, we have an expert. We have someone who has been a Fellow of the Society of Actuaries and the Canadian Institute of Actuaries for over 30 years. We have someone who was the chief actuary for Les Prévoyants du Canada, which was a private insurance company in Montreal. We

have someone who has acted as an international consultant actuary specializing in social security and pension programs. We have someone who was the chief actuary of the government of Canada, responsible for statutory reporting of the Canada Pension Plan, the Old Age Security Pension, and the five main federal public sector pension plans. This person is not good enough to look at the numbers?

The Minister of Finance, his department, and the people in his caucus are the only ones who saw the numbers. The Minister of Finance says that he does not understand them. Will the Minister of Finance allow this person to look at the numbers?

Hon. Mr. Higgs: The profession of being an actuary is very precise, and I would challenge the Leader of the Opposition to go through these risk analyses and understand them. I am convinced that this is a profession that neither you nor I would spend time on and understand every detail. That is why it is a profession unto itself.

You can go through the credentials and past credentials of Mr. Dussault all you like. All we are asking is that he be a current, certified member of the Canadian Institute of Actuaries. If he is not, that means that he is not bound by the ethics of that society and that means that he is free to make any comment that he likes, regardless of the factual nature of it. He is not bound by the professional nature of that society.

The member opposite, the Leader of the Opposition, being in the legal profession, would know well the confidentiality requirements in the professions, and he would understand well the need for that confidentiality. Thank you.

Mr. Gallant: The Minister of Finance is essentially questioning the credibility of this individual simply because he has been critical of this government’s actions. We have the Finance Minister, in a grandiose scheme, saying that he will allow me to look at some of the facts and figures. We are voting on Bill 11 today because this government is shutting down debate. How insincere can you get?

Mr. Gallant: We have been asking for more information and asking the government to make it public. As a consolation prize, we took the government up on its offer to have an expert actuary look at the numbers. We have someone who, I believe, looking at his resume, is incredibly credible and who has, I believe, a good, ethical standard. This Minister of Finance is saying that, because this individual has been critical of the government’s plan, the government is not going to allow him to look at the numbers because he will go out and tell everyone how bad it is. That is a little rich.

I ask the Minister of Finance whether he is even opening the door slightly to having an actuary, an expert, or someone look at the numbers. Will the minister ask his government not to shut down debate?

Hon. Mr. Higgs: We opened the door with Robert Blais. We opened the door and said: Look at our numbers. Go to it. You are in the profession. You are a registered actuary in the Canadian

profession. We said the very same thing about Bernard Dussault. We said: Give us your credentials. Be a current member of the actuary association, and you are good. We have said that. We have responded to the member opposite in relation to his letter. We are saying that this is fine but that it has to be aboveboard. It has to be something that is legitimized in the process of the profession. We will stick to that.

Once again, no, I will not make any requests to change the plan to shut down the debate. We have debated this. We went through this last spring. We went through this with the coalition members when we decided that we needed to hire another actuary to look at it. We have talked about this for three years. The time to act is now, and act we will. Thank you.