Mr. Jerry J. Ouellette: I much appreciate the opportunity to speak today. I must say that first of all in dealing with the issue, it’s a very contentious issue in Oshawa, and as many would expect, we get a lot of calls on both sides of the issue. By any stretch of the imagination, it’s far from unanimous either way.
It all comes down to how the process began and where it comes from, back from regulation change 5.1 back in 1992, I believe, when the then government of the day, the NDP, came forward with “too big to fail” issue. At that time it may have been the perceived method in order to assist the companies, but the end result is that a lot of people have a lot of strong concerns now.
I’m hoping that this legislation goes far beyond just the direct impact and actually addresses a lot of other aspects of pension issues province-wide. After the issue of the regulation change 5.1 came forward when our government was in power, at that time the number one question that I got on the line was very specifically: Do we have to work another weekend? When you’re dealing with that aspect, when the concern comes forward, it’s like, “We are not concerned about the pension issue.” I never heard one concern about the issues being readdressed and funds being put back in because the perception was—
Interjection: The economy.
Mr. Jerry J. Ouellette: That’s right, because the economy was moving along wonderfully, cars were selling and everything else was happening.
For a lot of individuals who don’t understand the process, I should explain some aspects of it. We get a lot calls and I do a lot of explaining of what takes place with the pension top-up fund up to $1,000. What that means is that whatever percentage of shortfall is found within the fund, is the percentage that is made up to the $1,000. My understanding of that is—I hear various rates—but the line workers at General Motors, their fund would only be approximately 40% funded now. That would mean that the top-up pension aspect would top up the 60% shortfall to the $1,000, which would mean $600 a month.
If we get a turnaround in the markets because there was a substantial—about 18%—drop in the fund markets that had their funds invested in that, that would mean there would be less of an onus requirement by the province to step in.
The concern here is that if the province had never stepped in, the fund would be fully funded and there would be no issues or concerns. Governments of all stripes have had this kick at the cat, so to speak, and nobody has really fixed the problem, taken care of it or addressed the issues. My understanding is that Chrysler and Ford have no issue but General Motors did not comply.
There were a couple precedents that were set in the province. One was Algoma Steel; that our party supported their pension fund, otherwise it would have broken the very base fund that we’re talking about and lost all the funds. The other, which the current government assisted with, is what took place with Stelco. What do you do in situations like this? I’m going to give some options a little bit later, but I want to talk about some of these things.
What are you going to do with a 92-year-old individual—my uncle, for example—who’s very dependent on his General Motors pension? He never missed a day of work in his entire life, and until he was 91 years old, he never went to the hospital. Here’s an individual who has contributed his entire life and never missed a day of work who has a very, very meagre pension. That individual, if you walk into their house, every wall is white gloss paint. There are no luxuries there. It’s very basic. It has a garden the size of the official opposition party, and that’s how they supplement their income, by taking care of those things.
What about my mother-in-law—86 years old? What about my sisters-in-law, my aunts—there are a lot of individuals that are very concerned with what takes place with this and how it’s going to be impacted.
One of the most concerned individuals about not having the taxpayers supplement the income of these workers are those individuals. They believe that the best way to make sure that this fund can continue on to pay is by ensuring viability within the company so that the company should pay for its due diligence in ensuring that all the funds are kept up-to-date. That is directly from the individuals that I met. I see—he happened to step out—but just joining us now, Mr. Tim Eye, I happened to meet on Friday and we discussed that very issue with him.
I’m hoping that—I know he can’t participate in the debate—but I’m hoping he didn’t pass on my confidential information that I passed on Friday. It’s either a yes or a no.
Interjection.
Mr. Jerry J. Ouellette: Okay. Very good. Thank you very much because I’ve been trying to deal with this issue in a different aspect. What I’ve done is—effectively, the leader of the official opposition has said—and her quote was, “We’re going to put some ideas on the table.” Well, I’m going to do the same thing right now. I’ve been trying to draft legislation for an extended period of time. It’s been shot down, and I fully expect it’ll be shot down the next time as well because it effectively deals with options that are available.
When you’re looking at contributions, who is eligible to contribute in the province of Ontario? Self-employed individuals? Workers who do not otherwise have a pension plan? What about people who may work for an Ontario employer but don’t work in Ontario? For example, when the Kuwait issue took place, there was a huge contingent of people from Ontario that went to Kuwait to put out all the fires on the oil rigs and those incomes there—they’re Ontario-based companies, but they’re working out of province. Are they eligible to contribute? What about the amount of the contribution? Is there a minimum? Is there a maximum? What about the tax implications, if any, for a contribution? Specifically, is there a deduction from a taxable income from the amount of the employee’s contribution? What about portability? What happens when an individual—and we talk about today’s society and the amount of time that they spend in one particular job. What happens, if they move from job to job to job, to the employer’s and the employees’ contributions in particular situations like that? If an employee wants to contribute, is the person’s employer also bound to contribute? So if an employee wants to—these are all questions that need to be answered when you’re looking at a potential opportunity. Effectively, what this is or what it’s leading to is an Ontario pension plan bill.
What this is designed to do is, effectively, to bring all individuals in the province of Ontario, so that it would be managed and funded in the same fashion as the Canada pension plan—not necessarily to replace the Canada pension plan, but to supplement it so that individuals, no matter where they’re working—so when my kids start their—not their paper routes, but the first time they get a paycheque where there are deductions on it, they can contribute into the fund so that when they achieve a retirement age, they know what their level of support will be.
What is the mechanism for collection, enforcement and investment? Who manages those entire processes? What about integration, say, with the public service pension? If you’re going to move forward, how do you include all those other pension funds in Ontario in order to bring it in so that it can be managed by the province of Ontario? Quite possibly, the British example might be one to lead, that is, for those individuals who have a set fund now, it would be fixed in the fashion it is, but those moving forward would also have to contribute to a general fund for an Ontario pension plan. These are some of the things that a lot of us have been considering and have been working on for a considerable amount of time.
When we talk about the impacts here, we talk about General Motors, and everybody thinks Oshawa. Well, quite frankly, the number one employer in Lindsay, and I see the member from Lindsay, is General Motors in Lindsay. The number two employer in Peterborough is, and I see the member from Peterborough was just here, General Motors. The number one employer in Port Hope, and the member from Port Hope, is General Motors, so there’s a lot more than just Oshawa that’s impacted.
What we need to do is ensure that there’s consistency throughout the problem, so one, ??that the issue is resolved, and ??what are some of the options? I met with Mr. Eye on Friday and he had a suggestion whereby under the bankruptcy act, any corporation that goes bankrupt, the assets are seized by the government in order to pay off any back taxes. What happens if there is—his idea was to declare any pension unfunded liability as becoming a tax. I don’t know if that would be possible, but the opportunity of declaring that in the same fashion that bankruptcy takes place, that the taxes are paid and then the unfunded pension liability is also taken into consideration.
I know the discussions are very much so about who buys the assets and where do they come into play and how all that plays out, but where does it take place? You have to start somewhere, and I think this is one of the key issues. There’s a lot of concern that taxpayers’ dollars are going to go into supporting General Motors or high-paid General Motors workers who don’t deserve that.
But quite frankly, if the government of the day, at the time, had not given the exemptions that took place, we would not be in this situation because General Motors would have gone under at that time, saying , “We can’t afford it,” but the pensions would have been secured, or we wouldn’t be in the situation we are in now. We need to make sure that these individuals are taken care of.
There are a lot of considerations. For example, when I’m talking to individuals throughout the riding—what are we going to do with a senior who’s in their 80s and in a retirement home? Their pension comes in and pays for the retirement home stay to take care of that individual. Who is going to pick up that cost when that pension is gone and lost? It’ll be the taxpayer in another form because the support is not there. These individuals need to be taken care of. There are a lot of other areas that need to be addressed as well because it’s not just a matter of the funds; it’s the other support categories that take place. For example, if and when the funding from the pensions is reduced or lost for these individuals, what’s going to happen when they file their taxes for Canada pension plan? Instead of the other aspects, now they will receive greater support from their other form of support, being the Canada pension plan, which effectively means the taxpayers, in another fashion, will be taking care of that instead of General Motors.
These are all the considerations that I explain to individuals when they call in. It’s not just a cut-and-dried issue. It’s going to happen. I know on my own street, I can think of the lady across the road, beside her, skip one, the next two up, the lady right beside me, the next two on top of that are all General Motors pension individuals who are very dependent on that. Their houses were built in 1958, three-bedroom bungalows, effectively not the lap of luxury, so to speak. These are very concerned individuals: Who is going to pick up the tax base and where is it going to come from?
If General Motors folds in Oshawa, the tax-base load in the local community will then fall on the residents and the other businesses, which will effectively mean either cut services or increased tax loads in those communities as well. I think there are a lot of considerations that need to be addressed here, and I want to make sure that everything is put on the table so that everybody realizes the real effect. We need to think outside the box. When I speak to the individuals, whether it’s the local labour council individuals or whether it’s local union presidents, on this, they realize there’s no quick fix for the immediate situation. What we need to do is think outside the box and in the long term.
What I’ve done here is give some of those options or opportunities to think about. I certainly hope the third party will consider some of the things that I’ve brought forward because we need to think as a whole on the entire best interest of the entire province.
