After pushing back retirement benefits for millions of Canadians earlier this year, the Conservative government is shrinking the generous pensions of MPs and federal public servants.
Finance Minister Jim Flaherty will table his second omnibus budget bill on Thursday morning, a wide-ranging piece of legislation that will cover parts of the March, 2012, budget that were not in the highly controversial first bill.
That legislation pushed back the age of eligibility for Old Age Security benefits to 67 from 65, with a five-year phase-in that will start in 2023. While Conservative MPs debated at one point whether to use the same timeline and gradually raise the age of eligibility for a Parliamentary pension to 67, The Globe and Mail has learned that it will be set at 65.
It is expected that public service pensions would follow suit. The age of eligibility for full Canada Pension Plan benefits is 65.
Making MPs wait until age 65 is still far less generous than the current system, which allows MPs to begin collecting benefits at 55. The bill is also expected to require MPs to contribute significantly more each year to their pension plan. The base salary for an MP is currently $157,731, which the budget bill is not expected to change.
The new rules won’t take effect until after the next election. Public servants also currently can retire early based on years of service, a benefit that is expected to be erased for new hires.
Treasury Board President Tony Clement is scheduled to detail the changes on Thursday morning after the bill is introduced in the House of Commons. Mr. Flaherty is planning to hold a news conference at an Ottawa bicycle shop to draw attention to the budget bill’s provisions to extend a small-business tax credit for the current year. The extension was first announced in the March budget.
Mr. Flaherty told reporters the second budget bill will have no surprises, but opposition MPs are skeptical. The first budget bill was criticized for containing measures – such as Employment Insurance reform and cuts to the oversight of Canada’s spy agency – that were not clearly outlined in the March budget document.
During Question Period, the Finance Minister insisted large budget bills are routine.
“When we do a budget, we follow it up with two budget bills. We do that every year. The second budget bill is ready and will be introduced shortly. It contains, not surprisingly, measures that are in the budget,” he said.
The decision to include the MP pension changes in an omnibus budget bill has already reignited opposition complaints about the government’s use of wide-ranging bills. Opposition parties said they would be willing to vote in favour of reforming MPs’ pensions if it was presented in a standalone bill, but the government has rejected those requests.
This week, the Liberals forced a vote on a motion calling on the House to agree with comments Prime Minister Stephen Harper made in 1994 – when he was a 34-year-old opposition MP – criticizing the use of omnibus bills. The motion was defeated 152-131, with no Conservative MPs voting in favour.
NDP House leader Nathan Cullen said he expects surprises in the second budget bill and repeated his party’s view that the benefits of MPs should be decided independently.
“We think the process is entirely wrong,” he said. “MPs shouldn’t be voting on their own pensions. ... It’s an obvious conflict.”