Hansard Transcript pension discussion Legislature Dec 4 2013
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?
Hansard transcipt of pension discussion in Legislature Dec. 3 2013
Mr. Melanson: If there is one promise that this government has broken over and over, it is to be open and transparent and to include people in decision making. When it comes to pension reform, this government has not included people who would be and people who are going to be affected by it.
Hansard transcript pension discussion in Legislature - Nov 27, 2013
M. Melanson : Le gouvernement actuel veut que sa modification au régime de pension public aille de l’avant. Il est évident que, lorsqu’on choisit de convertir un régime de pension d’au-delà de 10 milliards de dollars, une analyse ou un rapport doit sûrement être préparé par un actuaire afin de déterminer le coût de la conversion.
Alors, mes questions sont pour le ministre des Finances aujourd’hui. Nous lui avons demandé à maintes reprises de nous donner les informations sur tous les aspects du nouveau régime de pension qu’il propose. Peut-il déposer un document à la Chambre aujourd’hui ou au moins nous donner les coûts réels de la conversion du régime de pension actuel au régime de pension à risques partagés? Quels en sont les coûts?
Hon. Mr. Higgs: As the member opposite knows, we have spent a long time looking at this, starting two or two and a half years ago, when the Premier assigned a task force. Pension reform is not an easy issue. It is very complicated. Some very qualified individuals spent long hours understanding what made sense for our pension plan and what the issues were for us in New Brunswick.
The cost of this reform, as we have said, not only with regard to the security and sustainability of it or with regard to this plan being able to survive for generations . . . It is important to recognize that what this reform does is to prevent this plan from collapsing in the future. It allows us to be able to pay for it. Yes, we have invested in different individuals to help us get to the solution—one that is right for New Brunswick and one that will soon be seen as being right for the rest of Canada.
We are proud of what we have done so far. We have invested dollars to get this far, but we have invested in the future of New Brunswick. They are dollars well spent, with big returns.
Mr. Melanson: The minister has talked many times and keeps talking about the long-term benefits of the changes to the pension regime. I understand that he is convinced, and I understand that the government is going forward with it. But not everybody in New Brunswick agrees on this decision.
The question is this: How much will it cost the taxpayers of New Brunswick to convert from the existing public pension model that we have today to a shared-risk model? How much is that going to cost? Can you give us a number?
Hon. Mr. Higgs: I would like to answer this in a couple of ways. Firstly, I would like to share a quote: “Real people get hurt when politicians aren’t honest and realistic about the magnitude of these issues . . . If you use a set of assumptions that makes the problem look smaller on paper today, that’s irrelevant 10 years from now when the cash runs out and someone needs a pension check.”
We have looked at honest evaluations. We have had outside people look at this, and they have done their own evaluation. We know that it will cost $1.5 billion over the next 20 years if we do not deal with this problem. We know that it has cost us, for the PSSA alone, $673 million in extra money over the last 20 years to keep it sustainable.
The investment that we have made in pension reform is well offset by the future costs and by the lack of security and opportunities that will eventually result from our inaction if we choose not to move, as a moratorium party would. We are moving forward. The investment is very sound.
Mr. Melanson: I have respect for the Minister of Finance because, most of the time, he is on top of his files, and he is factual. However, I am asking a very specific question. Surely to goodness, an individual who was in the private sector before, who understands cash flow and income statements, would be able to tell us this specifically today, at least. So far, how much has it cost the taxpayers of New Brunswick to convert from the existing pension model to a shared-risk model? How much will it cost, beyond this point, to implement the new model?
Hon. Mr. Higgs: As the member opposite knows, we are still working on the implementation part. We have several pension plans that are now signed up, and we are now working in the Legislature on the PSSA, as you are well aware. We will continue to work. We are sharing information now with the teachers, and the conversations, thus far, have been very good. They are certainly looking at the reality of the situation we are in. They want to be sure that there is a pension for the future.
I would say that what we know is that the $1.5 billion that we will not have to spend in the future, because we are going to correct this, is real. What we know is that the liability of $1billion that we have right now, from the current plan being unfunded to that level over time . . .
We will not have that going forward. What we do know is that the cost of maintaining this pension plan—secure and available for future generations, in the top 10% of the pension plans in the country, and to be a model in this country—will be a lot cheaper than what we have spent in the last 20 years at $1.5 billion, just putting money into it. These are big payout dollars . . .
Hansard transcript pension discussion Nov 26 2013
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.