EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
I wish to specific to recite a warning from the Auditor General set out on page 14 of the report.
The Auditor General noted four areas of great concern.
One, the ability to repay any future debt if the government moves into a debt position where its revenues do not increase to pay these debt costs it could have to spend less on programs.
High staff vacancies may hide the true cost of government operations.
One third of all positions were vacant on March 31st, 2001.
When Nunavut succeeds in staffing the vacant positions the cost of salaries and employee benefits will be higher.
A young and growing population will put pressures on government services.
This growing pool of people can help Nunavut increase Inuit employment levels in future but there will be also be pressures on programs such as education, housing and health care.
And the strongest warning from the Auditor General came at the end of the section on government financial health.
Tough decisions lie ahead warned the Auditor General.
Nunavut will have to make hard choices to stay in good financial health.
The Territories resources are limited and it doesn't have the financial flexibility to adapt easily to unfavourable economic changes.
In the faces of pressures to increase spending, Nunavut will need to consider which programs are most important and which ones it cannot afford.
How many of us have heard the ministers and officials telling our constituents and us that the programs and initiatives requested by the public are not possible because there isn't enough money.
This is something that is heard almost daily in Question Period.
Mr. Chairman, at the beginning of the life of this Assembly under the leadership of the Cabinet we laid out our vision for the new Territory of Nunavut.
The Bathurst Mandate was released to the public and widely publicized as a statement of what is most important for the people of Nunavut.
The Mandate outlines four important priority areas.
Healthy communities, simplicity and unity, self-reliance and continuing learning.
Under each of these priorities, guiding principles were set out.
Mr. Chairman this Bill, which will implement a very expensive pension plan, is simply not respectful to the promises laid out in the Bathurst Mandate.
The first principle under healthy communities is people come first.
Mr. Chairman, this Bill looks after MLAs first.
It benefits only a handful of residents, sitting MLAs.
It doesn't put people first.
The Bathurst Mandate sets out the priorities of a new Nunavut Government.
As I read them, they are health, economic development in the broadest sense and education.
The Mandate goes on to say that over the coming five years, the government will give priority to completing these objectives.
Mr. Chairman, I ask how can improving the MLA pension package be said to be a priority within these objectives.
A major principle of the Bathurst Mandate is self-reliance.
Under self-reliance the guiding principles include, we will work within our means.
In light of the recent warnings of the Auditor General and considering the pressures to expand programs we are all hearing from our constituents, I must simply ask, can we afford significant enhancements to our own pension plans as MLAs.
The Bathurst Mandate is often invoked by our government in explaining and justifying decisions that have been made.
A year or so ago, our finance minister, the Honourable Kelvin Ng, referred to the Bathurst Mandate when he talked about the tough choices we will have to make considering the fiscal pressures we expect to face in Nunavut.
In his budget speech last February, Mr. Ng, said,
If we are to make a convincing case for additional funding, we have to demonstrate that we are responsible managers providing the right services in the most cost effective ways.
Mr. Speaker, consistent with the Bathurst Mandate, we will live within our means and we will not spend large amounts of money that we do not have.
This means that like every other government in Canada, we will have to make many difficult choices in how we allocate our limited financial resources.
We will have to do many things differently in the future if we are to meet the growing pressures.
We have to find ways to be more resourceful and change programs and services to better meet our needs.
Mr. Speaker, using the knowledge gained over the past two years, we plan a thorough inventory of the activities of this government in order ensure that our efforts and expenditures are consistent with our goals in the Bathurst Mandate and the needs of Nunavummiut.
The choices we make today will affect the lives of Nunavummiut tomorrow.
So we must take the time necessary to be certain any changes we introduce are right for our people.”
Mr. Chairman, today we have to make one of these hard choices.
Oddly enough the pressures to increase spending are coming from within this Assembly.
We all know the strong pressures that are coming from our constituents to find additional money to support the vital public services.
Can we afford to spend 2.7 million on ourselves over the next four years and say no to these strong pressures coming from our constituents?
I find it ironic that this bill proposes to enhance our personal pension plans.
One of the principles of the Bathurst Mandate is that every activity and expense must have a productive purpose.
So I have to ask, what is the productive purpose of this expense.
What kind of productive purpose is served by giving MLAs a big reward after retirement?
We often talk in this legislature about the need to support and respect our elders.
But this bill will do nothing for the meagre pensions of our elders. We are not talking about supplementing the old age pension cheques our elders get each month.
We are talking about supplementing our own pension and we lucky few will be eligible to receive payments as soon as we retire and well before most of us become elders.
What else could we do with the 2.7 million dollars that this bill will cost over the next four years and beyond?
Well, we can employ at least one new teacher in each of our communities.
By my calculations, if we divide the cost of this bill up, each constituency could get an additional 34 thousand dollars per year.
This is money, which if it does not go towards our retirement, could be contributed to youth organizations, shelters, or elders’ groups or other community organizations.
They are always told that there is no funding available to support local programs.
How can we tell them this after finding the money to enhance our own pension plans?
If we pass this bill, how are we going to be able to look these people in the eye?
These are some of the tough choices we are making today in voting on this bill.
I know that I may not be making myself popular with my fellow MLAs but I say this is simply not the right thing to do, especially just as we are facing very tough financial decisions ahead now that the days of the budget surpluses are over.
I believe that now is the time to take one of those hard choices so we can stay in good financial health.
Now is the time to lead by example. I appeal to all members to think of their constituents’ needs before thinking of themselves.
As we said in the Bathurst Mandate, people come first.
As the auditor general warned us, we must live within our means.
If we take this opportunity to look after ourselves so generously, how can we in all good conscience, turn around and tell our constituents that we do believe in putting people first.
If we pass this bill, if we look after ourselves so well, how can we tell our communities that we could not find additional money to meet their pressing needs?
Yes, your speaking notes are good in that they were ten minutes long as allowed.
First of all I would like to say that I've been making the same comments on this since yesterday and I've already agreed to support the bill.
I feel that I'm talking about the same thing over and over again.
I know that my constituents are listening to the comments that I'm making.
The same ones I made yesterday.
When we had the Government of the Northwest Territories, the people of Nunavut, we were not given as much capital items as our western counterparts.
And we had problems with that during the Government of the Northwest Territories days.
We could not acquire many major items when the western counterparts were getting a lot of that and we felt it here in this region.
I often asked myself why that was.
We didn't have enough room in the schools, or adequate gymnasiums or adequate community halls.
They did not think of the forced growth of each community.
We used to ask them for the things that we needed in this region.
But what they did was they gave us what we needed at the time and they didn't think about the growth that was going to occur in the communities.
It has been about two or three years since the Nunavut Government came about, we are bringing about some things that we want such as capital infrastructure.
We provide the communities with facilities thinking about the growth that is going to happen in each community.
What we are thinking about is for our future to make sure the people in the communities have facilities because we have to think about the growth.
Looking at that and knowing what happens in each community, we know as MLAs that if we look at the forced growth, then it's better for all of us.
During the Government of the Northwest Territories days, they did not think about that at that time, about the growth that was going to happen in each of the communities.
The Minister of the Power Corporation tried to reduce the cost of power in my community of Clyde River.
We knew we were going to pay a lot of money for our power.
So what we did is we talked about the options that we had.
We agreed with the Government of Nunavut that we wanted to have our own power facility for our community when we negotiated with the Power Corporation and this has been very good for our community.
There was also an emergency that occurred in my community regarding the school.
So the school was built thinking about the growth that was going to occur in my community.
We all know that we have to try to make things available for the people in each community.
We talk about the needs of each community in Nunavut.
Perhaps the people that are going to be Members of the Legislative Assembly after we are gone will have a better situation than us.
We only have been here for a little over two years.
What we have done at the Legislative Assembly has helped a lot of people in Nunavut.
It’s made them happier.
So what we have to do is make something better for ourselves as well as elected officials.
We want to be able to give the communities contracts so that they would be more self-reliant.
We don't want to be able to give the contracts to the people that have businesses outside of Nunavut.
That is not going to help the people of Nunavummiut.
We have to be able to keep the money in Nunavut so that the people will benefit from it.
If we are going to keep on giving contracts to the people or to companies that are outside of Nunavut then Nunavut will never benefit.
If we don't give them business then we will never grow.
This way if we start using what we know as people and to help the people in our communities than it would be better for the people of Nunavummiut.
General comments from the members.
A general question I have Mr. Chairman. I would like to ask Mr. Speaker or the witnesses to explain this Supplementary Pension Plan.
Basically if it is a registered or non-registered pension plan.
Speaker: Mr. Chairman, the answer to Mr. Tootoo's question is that it is a non-registered plan, therefore not registered in the Income Tax Act.
The difference between a registered pension plan and a non-registered pension plan as outlined I guess in the Income Tax Act, I just want to know what the difference is.
Speaker: Thank you, Mr. Chairman. I know that it deals with what taxes are deductible. But I'll pass it on to our tax expert, Mr. Vanderzan.
Chairperson (interpretation): Okay, thank you. Mr. Vanderzan.
Mr. Vanderzan: Thank you, Mr. Chairman.
The primary difference between a registered and non-registered plan is that with a registered pension plan it meets the requirements of the Income Tax Act, so that all contributions by the members and the plans sponsor, in this case the Legislative Assembly, are tax deductible and tax sheltered until such time as the members receive the pension.
That registered pension plan, if I could just get an explanation as to the difference between a non-registered pension plan and why it's different.
Speaker: Once again, Mr. Chairman, I'll pass it on to our tax expert.
You know that one is registered, one is not and there are various tax implications but I'll allow Rob to provide the details on that.
Chairperson: Mr. Vanderzan.
Mr. Vanderzan: The non-registered plan is not required to comply with the provisions of the Income Tax Act relating to registered pensions so, in that case it is possible to provide pensions that are greater than the maximum pension rules set out by the Income Tax Act.
That is the primary reason that organizations establish supplementary plans to provide pensions in excess of the maximum.
I guess you are saying this is over and above what’s allowed by the Income Tax Act for pensions. Why do they have limits on there?
Is there any specific reason why they have limits on what you're allowed to contribute on these things?
Chairperson (interpretation): Thank you. Mr. Vanderzan.
The primary reason for the limits on deductibility has to do with plan sponsors in the private sector.
The Federal Government wishes to limit the extent to which an organization can make tax-deductible contributions to a pension plan.
In the case of a government, which does not pay tax, the difference is really academic.
It has no significance.
But the purpose of the Act is to limit the amount of tax deductions available to a corporation in the private sector.
Under the non-registered pension plan, which is what this is I guess, or non-funded or a funded non-registered pension plan, are there taxes that are payable on the amounts that are put into this fund.
Mr. Vanderzan: The non-registered pension plan, the Supplementary Plan that is in Bill 21 will not have any taxes payable on the funds that are set aside.
The proposal is that the Supplementary Plan be funded through the Consolidated Revenue Fund and it’s being established in such a way that the Assembly would not have to pay any tax on the funds that are set aside.
Nor would the members have to pay any tax on those funds either.
The only time tax would be payable is when the members start to receive their pensions.
Mr. Tootoo: Mr. Chairman, I guess I am asking about taxes payable on this, I remember, I think it was a couple of months ago, there was an article in the Globe and Mail that indicated that the Province of Ontario had a gold plated pension plan similar to this.
They axed it.
They got rid of it and now Revenue Canada is saying that they’re on the hook for 10 million dollars in taxes on that plan somehow.
I guess I just want to make sure that we don’t fall into the same trap as this and maybe ask Rob if there are taxes that end up being payable that the government doesn’t end up footing that tax bill.
Mr. Vanderzan.
My understanding of the situation in the Ontario Pension Plan is that they were attempting to transfer amounts out of the pension plan that was being closed down into the personal RRSP’s of the members.
And the Income Tax Act does set maximum limits on how much you can transfer into a RRSP from a pension.
It is my understanding that the Ontario Government was trying to transfer amounts that were greater than those maximums and that is the situation that caused them to run afoul of the Income Tax Act rules.
That is why Revenue Canada came back to them and said they now have to pay additional taxes.
With the Supplementary Plan there is no provision for any payments out of this plan to go to a member’s RRSP.
The only way that money will be paid out of the Supplementary Plan is via a lifetime pension to the member or the member’s surviving spouse.
So that avoids the situation that the Ontario Plan ran into.
So I don’t foresee any problems with this plan that would be similar to what the Ontario jurisdiction encountered.
Mr. Tootoo: That’s certainly a relief Mr. Chairman.
You know, it was something I was wondering ever since I saw that article.
Just moving on to another general question topic Mr. Chairman, and one Mr. Vanderzan can certainly understand, I note that he works for the firm that administers our pension and is quite familiar with this type of work, you know, of the job and an expert in the field.
The Supplementary Pension Plan that we’re looking at here, am I correct in stating that it’s going to cost the government, because it’s coming out of the Consolidated Revenue Fund, that I think it’s 2.7 million every four years, basically it relates to 7 hundred thousand dollars a year that the government has to contribute to this plan.
That is essentially the cost of this program, 700 thousand dollars per year.
Mr. Chairman I know the Speaker, in his opening comments, talked about an additional increase of 2 ½ percent the members if they opted into this plan would contribute towards their regular pension plan, I believe.
On the supplementary pension plan the members don't make any contributions to that plan.
It is just a contribution coming from the Consolidated Revenue Fund that funds the supplementary plans?
If the supplementary plan is adopted then there are amendments that will be required to the Retiring Allowances Act that will allow the members to remit their extra two and a half percent contributions to the Retiring Allowances Act and not to the Supplementary Act.
And the purpose of that is so the members receive tax deduction for those contributions.
So the members who opted into the Supplementary Plan will have higher contributions withheld from their pay and all those contributions will go to the Retiring Allowances Act.
I just wanted to clarify that the supplementary goes into the Regular Retiring Allowances Act and not into the Supplementary Retiring Act.
This bill is one hundred percent funded without any matching contributions by members.
Just to clarify on the last point.
It is true that because all of the contributions go to the Retiring Allowances Act that the full cost of the Supplementary Act would be paid for by the Government of Nunavut.
But the cost of the Retiring Act will be reduced by the extra two and a half percent that the members are paying.
There is a net balance, overall the cost of the two plans in total are the same as they would have been if the members were directing contributions to the Supplementary Act instead of the Retiring Allowances Act.
It is just that things have been structured this way in order to be more tax effective for the members.
Mr. Chairman, I would like to direct a question to Mr. Vanderzan.
I know you administer pensions, ours is probably just a fledging account for a fledging government.
In his experience, I am just wondering I'd like to know for myself, is we've heard the term rich.
Someone even used the word Ferrari or Porche in here earlier today.
This pension plan in his opinion, is it something that would be considered a rich plan, a moderate plan, or a mild plan in looking at other jurisdictions’ plans that they administer.
I'll try to respond to that question with some of the facts of the information that we received or researched.
There are five different provinces that have very similar plans ranging from two and half percent to three percent.
So there are six different groups and five different provinces and also the MPs that also have a very, very similar plan.
So call it what you may but that's the numbers that exist as of today. I think that we heard on the radio today comments that Mr. Tootoo made regarding the NWT and their pension, supplementary pension fund, they are now at 2.2 percent and their reintroduction of the supplementary pension plan had first reading yesterday.
So that's seven jurisdictions.
I don't know if the Speaker can also indicate, I guess I'm not looking at just what other jurisdictions have similar plans but in the scheme of pension plans, both registered and supplementary like this, would this be something that's considered mild, moderate or a rich plan all together overall.
Not just looking at other jurisdictions that have similar structured pension plans.
Speaker: Mr. Chairman.
In order to give it a rating we have to compare it to something.
And what I was trying to do was compare it to six of the other provinces in Canada that had very similar plans ranging from 2.5 to 3 percent and in four of these jurisdictions of the provinces they are at 3 percent and the others are at 2.5 percent.
So to classify that as rich, it looks like we're at that 50 percent of the jurisdictions of Canada that are around the same level.
Again, I wasn't more looking at just within the jurisdictions, I'm talking more global, not specifically just to other political jurisdictions but as far as pension plans go whether, in industry pension plans, would this be something that's considered mild, rich or a moderate type of plan.
That's what I want to know because that's what my constituents are going to be asking me and I want to be able to tell them why this is what it is, not just compare it to other politicians and the pensions that they get.
But as far as everyone else out there as well.
That's a difficult question to answer unless we surveyed and polled, I guess, a global survey of pensions around the world or North America.
But there are other factors considered even in the private sector such as bonuses and other job options that are paid out to various individuals.
So it's difficult to answer that on a global point of view but from looking at the other jurisdictions in Canada, which is the country that we live in, and we are a provincial/territorial jurisdiction, it looks like we're not that far off the mark.
And so it would be considered leaning to a tad high.
I had some questions Mr. Chairman.
I just have a couple of quick questions if that's okay.
Hon. Ed Picco: Thank you, just a couple of questions.
I'm wondering if Mr. Vanderzan or Mr. O'Brien or even Mr. Ng could answer my question.
My first question Mr. Chairman is concerning the supplementary pension plan and that is if I opt or any member opts to contribute to the plan, am I entitled to contribute to the plan without the benefit of the additional dollars being given by the Government of Nunavut.
Also, could I at the same time Mr. Chairman, increase my amount to 3 percent to 5 percent of my earnings.
Mr. Picco is asking if he can fund his own pension plan and the answer is there is no such provision for such a luxury.
No, Mr. Picco, there is not.
I think the question is concerning the current plan that is in place.
Is it possible for members to increase arbitrarily my own pension earnings above and beyond what is called for in the current agreement?
The quick answer to that is no, there is no provision for that.
When the Speaker says there is no provision for that at this time, is that to say that it cannot be done or that it hasn't been done before?
Speaker: Mr. Chairman, I believe the answer to Mr. Picco's question is that it cannot be done from a tax-sheltered basis.
Is it possible for another Assembly to end supplemental types of plans Mr. Chairman in 13 months when there are elections for new Members of the Legislative Assembly?
Is it possible at that time for them to rescind what is being accomplished today?
The quick answer to that is yes.
We'll go to the member who didn't make general comments yet.
It seems like we are not the only ones in Canada so this is not unique to us in dealing with this issue.
Also internationally they do the same thing and this is not a different procedure that we are dealing with.
They deal with the same issues internationally and also in Canada.
I do have this question.
For the two years that the Nunavut Legislature has been established and yes we do get deductions from our salary for our pension plan, even before we discussed this in the House for the past two years some members didn’t want to be part of it.