The House resumed from November 15 consideration of the
motion that Bill , be read the second time and referred to a committee, and
of the amendment.
Mr. Speaker, I am delighted to start the debate today on this very important bill. It would be transformational for our nation, and I am delighted to express that on behalf of this government. We would improve the lives of future generations. People would be able to retire with dignity because of this government.
The essence of what we would do is very simple. We would increase pensionable earnings from one-quarter to one-third for generations to come. I am sure that one day, when members in the House retire, they will look back with pride to the great day we adopted the enhancement to the Canada pension plan, because future generations will know that we did the right thing.
It is my privilege to rise today to speak about how this government is honouring its promises to Canadians, how it is helping to strengthen the middle class and all of those working hard every day to join it, and how, through collaboration and partnership as well as a strong commitment to do what is right, we are at the threshold of progress on a very important initiative for our country. The promise of a dignified retirement is fundamental to the Canadian dream. Our country has long been a haven for hard-working middle-class families who helped build this modern, open, and cohesive country that we all enjoy today.
For decades, people in Canada believed that, if they were willing to work hard, the goal of a comfortable retirement was well within reach. That assurance is one of the reasons that our country has thrived, but lately the goal of a secure retirement has come under threat. The world has shifted, and many citizens have not seen the benefits of the tremendous economic growth we have achieved together over the last several decades. The soft underbelly of the world economy has revealed itself in expected and unexpected ways. Hard work does not always equal progress anymore. In many cases, a fundamental promise has been left unkept.
Let us consider these facts. We know that today one in four families nearing retirement, which is 1.1 million families in this country, risk not having enough for retirement. In particular, middle-class families without workplace pension plans are at greater risk of under-saving for retirement. A third of these families are at risk. We also know that young Canadians, in particular, are facing the challenge of securing adequate retirement savings at a time when fewer can expect to work in jobs that include workplace pension plans.
We knew we needed to act, but we could not act alone. That is why, at the earliest opportunity, our government invited provinces to an inaugural discussion on enhancing the Canada pension plan. This goes back to last December, mere weeks after we took office. We made excellent progress at the first meeting, so much progress that consensus was achieved with the provinces by June.
The federal government, alongside participating provinces, reached a historic agreement to make meaningful changes to the CPP that would allow Canadians to retire with more money in their pockets and with dignity. That has truly helped to underscore the importance of partnerships and how serious we are about renewing the relationships we have with other jurisdictions so that we can work together on the challenges that affect us all.
We need our federation to be strong. That is how we will succeed. Let us look at what we have done so far. For young workers in their early twenties, just starting their careers, this would be a great benefit when they retire. In fact, young workers would see the largest increase in their retirement benefits.
I am sure members in the House are looking not only at the immediate term, but at the long-term future, whether it is for their children or grandchildren. As I went across this nation, when we were looking at budget 2016, as I am still doing for budget 2017, people wanted us to act for the immediate term, but they also wanted us to act for the long term.
That is why the is called the long-term guy. He is looking at the long term to ensure there will be prosperity in our country for generations to come.
By strengthening the Canada pension plan, workers will receive more money from their pension, from one-quarter of their eligible earnings to one-third. This is a significant achievement. It is a historic agreement. It is a transformative agreement for this nation and for future generations.
Let me get to the example. If people are making $50,000 a year over their working life, they will receive about $16,000 each year in retirement instead of today's $12,000. That is $4,000 more each year in their pockets. This is money to save and invest. It is money that Canadian families and hard-working workers expect to have when they retire to be able to contribute to society.
What about those Canadians who are worried that this is nothing more than a new cost on their paycheques? We have heard some members express that. Let me give them a very straight answer. First, we ensured that the increase in contributions would be phased in gradually, so people know about it in advance. When policies are to be changed, we need to tell people about it in advance. That is exactly what we have done.
Someone who is working, with a constant earning of $50,000 a year, will contribute an additional $70 a year or $6 a month in 2019. Let me go back to the example. That person would get $4,000 more in benefits, and in 2019 the individual would contribute $6 a month more.
I can assure members, when they go across this nation, people get that this is in their best interest.
For the employee contribution portion of the enhanced CPP, we are also going to offer a tax deduction instead of a tax credit to ensure that new CPP contributions do not cut into the cost of savings.
How will employers be affected? We have heard members on the other side talk about employers. Let me give them a very straight answer. The employers will also benefit from a long and gradual phase-in starting in 2019. This is the responsible way to ensure that businesses and workers have time to adjust to the additional contributions associated with the enhanced program.
What about the low-income worker who is worried about the effect of increased CPP contributions on his or her paycheque? How will an enhanced CPP help? Let me tell the House in a very straightforward manner. I want to assure my colleagues and low-income workers that an enhanced CPP will benefit all workers, including those with low incomes.
In order to ensure eligible low-income workers are not financially burdened as a result of the extra contributions, the government will also enhance the working income tax benefit. The proposed enhancement to the WITB is designed to provide additional benefits that roughly offset incremental CPP contributions for eligible low-income workers.
With this enhancement, there will be no impact on their disposable income, and when they retire, they will also get a larger retirement benefit payment. The bottom line is that people who are working in Canada, are paying into the CPP and are planning to retire after 2019 are going to have more money in their pockets from their CPP retirement pension benefit.
The time has come to restore the faith of Canadians in their government and to reward hard-working people having the audacity to dream of a secure retirement, like their parents and grandparents before them. After all, that was the deal. With these changes, Canadians can worry a little less about having enough later in life, and can spend a little more time in the present, raising kids and building their communities for the better.
We feel this is a win-win. I urge my hon. colleagues to support an enhanced CPP because they will be doing the right thing, not only for this generation but for future generations. When members retire, they will look back in time and say that they are proud to have been in the House when we did the right thing for our children and grandchildren.
Mr. Speaker, I am pleased to rise in this debate, even though we saw from the vote that took place earlier that, unfortunately, the government is infringing on parliamentarians' right to speak.
This government is allowing no more than one-third of the members of the official opposition to speak about this bill, which will have a direct impact on taxpayers both in the short and long term. The so-called positive measures set out in this bill will not take effect for 40 years. I do not want to make anyone feel old, but there are many people here who will not benefit from the supposed enhancement of the CPP set out in this bill.
There are in fact two conflicting views. On one hand, there is the view of the Conservative Party, which would prefer to give Canadians the tools they need to save for themselves. Let us not forget that we came up with the well-known TFSA, which is very popular and should not only be maintained but also made more accessible. We are giving people the tools they need to make the best choice about how to save.
On the other hand, the Liberal government says that it knows what is good for Canadians, that it will take more money from workers, and that it will force employers to pay higher CPP premiums.
These are two conflicting views. Not everyone will agree on which one is best, but it is clear to us that it should be the worker, the citizen, or the business person who decides what works best for them, rather than leaving it up to the government.
What will this bill do? It will result in workers paying an additional $1,000 on average into the Canada pension plan. For business owners, it means paying $1,000 more on average for every employee in every business. What a heavy burden to bear.
Let us first look at the $1,000 per worker. We believe that it is always better to leave money in people's pockets than to put it in the government's hands. A tax grab of $1,000 per worker is not the right thing to do.
What about businesses and employers? We believe that private enterprise, not the government, creates jobs. The government must do everything it can to support, empower, and pave the way for businesses. It is not the government's job to do the work of business people, who are the real creators of jobs and wealth. They are the backbone of the Canadian economy. We have to do everything we can to help them create jobs and wealth, but mostly, we should not be foisting new taxes on them, and yet, the government has decided to saddle them with additional costs amounting to $1,000 per worker.
Knowing that this government is going to charge our businesses even more fees does not bode well for the future. Let us not forget that this government wants to impose the Liberal carbon tax, which will have a direct impact on every one of our businesses. Let us not forget that this government was committed to reducing the business tax rate from 10.5% to 9%, but there is not one iota of information on how the government plans to do that. Let us also not forget that this government was elected on a promise of running a modest $10-billion deficit, but in reality it is three times worse and so far we have no idea when there will be a return to balanced budgets. Let us not forget that a deficit is a tax we are deferring to our children and grandchildren who will have to pay for today's mismanagement.
We believe that the government is on the wrong track with this bill.
Let us face facts: it goes without saying that we would all like to have a more pleasant and worry-free retirement. That is what everyone agrees on, hopes for, and wants to work toward. Here is another fact: the situation has vastly improved over the past few decades thanks to the sound policies put in place by previous governments, including that of the Right Honourable Brian Mulroney.
I should point out that, in recent years, the government implemented measures to help people save money. As a result, according to Statistics Canada, the proportion of low-income seniors dropped from 29% in 1970 to 3.7% today, which is one of the lowest rates in the world. That is something to think about. Of course, we always have to be mindful of the less fortunate among us, but there are fewer of them than before, particularly among seniors.
We were on the right track because we gave people the tools they needed to make the right choices for themselves. In 1990, Canadians saved 7.7% of their paycheque, and now they save 14.1%. That is happening because we got people more interested in saving and investing wisely.
If, God forbid, this bill is passed and comes into force, what impact will it have? According to a Finance Canada analysis, it will result in reduced employment, reduced GDP, reduced business investment, reduced disposable income, and reduced private savings. That is five reductions all told. That is two more strikes than baseball players get. Five strikes, five reductions, five factors that will slow economic growth. We know we need growth, especially considering that the people across the aisle are on such a spending spree, have no control over public spending, and do not even know when the budget will be balanced. Theirs is a worrisome approach.
A paper released by the C.D. Howe Institute shows that the Liberal Party's plan will not benefit low-income workers, because their premiums are going to go up but their net increase in retirement benefits will remain low, since higher CPP payments would be offset by clawbacks in GIS benefits.
Bragging about one's fine principles is all well and good, and so is saying that the most vulnerable among us will have more. That is fine, but what the government has given with one hand, it has taken away with the other. We, the Conservatives, are not the ones saying so; this is coming from the C.D. Howe Institute.
Incidentally, C.D. Howe was one of the greatest ministers in Canada's history. From my perspective, he was one of the people who helped shape Canada in the 20th century and helped establish this country's industrial base at a time when we were at war. I really like making historical asides from time to time. If we are going to be talking, we might as well enjoy ourselves a little.
The guaranteed income supplement was supposed to help the most vulnerable among us in the unfortunate event that people could not make ends meet with their private pension alone. Given that we pay more attention to that these days than we did in the past, when wages were lower and saving money did not occur to people so much, we created the guaranteed income supplement to bridge that gap and put people on a more equal footing.
However, considering the Liberal approach, that goal can unfortunately no longer be reached as it should be, and that spells trouble.
This bill is a clear indication of where we can draw the line between the government and our party. As far as we are concerned, we must give people the tools they need to make the right choice with respect to a good pension plan that is based on their own priorities. Of course we do not want to cancel anything that is coming from the federal government. The point is this. If it has to bring something new, then it should bring it on behalf of the people instead of putting it into the hands of the government. If we adopt this bill, the reality is that people will have less money in their pockets. This bill will give the government the right to take $1,000 a year out of the pockets of working people. Worse than that, it will cost entrepreneurs, those who create wealth and jobs and who are the real backbone of our economy, around $1,000 more for every worker in their business. This is not good for the Canadian economy, nor is it good for the people who work because it will take 40 full years before it achieves anything good for the people.
I urge all members of the House to vote against this bill.
Mr. Speaker, my colleague from knows that I have a tremendous amount of respect for him. That said, I would like to pick up on what he said.
Let us not forget what we told Canadians and what they voted against.
Let us not forget that we promised to help the middle class. The first thing this government did was introduce a tax cut for the middle class, of which nine million Canadians are benefiting today.
Let us not forget that we promised to help Canadian families. We did that with the Canada child benefit, which will help nine out of ten families and lift 300,000 children out of poverty. Our Conservative colleague voted against that measure.
Let us not forget that we proposed improvements to the Canada student loans and bursaries program. The Conservative Party voted against that measure.
Let us not forget that we have made an historic $8.4 billion investment in first nations in order to provide services in indigenous communities properly. The Conservative Party voted against this measure.
Let us not forget what we have done for our seniors. Today we are proposing improvements to the Canada pension plan. We also proposed improvements to the guaranteed income supplement that would help 900,000 seniors in the country, especially women, since most seniors living alone are women.
Let us also not forget that we lowered the age of retirement back to 65 from 67.
I have a simple question for my colleague from : why is he planning to vote against measures that benefit our seniors, our young people, the middle class, and everyone in his riding?
Mr. Speaker, this measure will take even more money out of the pockets of taxpayers and business owners who need that money to create jobs and wealth so that people can make their own choices.
Since we are once again talking about the Liberals' election platform and the budget implementation bill, I am pleased to remind members that 65% of Canadians are not affected by the so-called tax cuts. Those who will benefit the most from the government's new tax cuts are Canadians who earn between $140,000 and $200,000 a year.
I must admit to my conflict of interest, as I am indeed in that tax bracket. However, I voted against the measure because the Liberals were leading people to believe that everyone would have more money when that is not true. In fact, 65% of Canadians will not benefit from the measure.
Let us remember that the Canada child benefit, which was supposed to be revenue neutral, is going to end up costing $3.4 billion more than our existing programs. Also, need I remind my colleagues that the Liberals forgot to index that benefit? That small oversight will add billions of dollars to the national debt.
My colleague spoke about first nations. Need I remind him that, on June 11, 2008, the Right Honourable Stephen Harper, issued a formal apology to the first nations here in the House? That is the only time in Canadian history that a prime minister has done that. The only time in Canadian history that the grand chief addressed parliamentarians was when our government was in power, and we are very proud of that.
Must I also remind him that this government was elected on a platform that states, on page 76, that the Liberals would run a modest deficit of $10 billion and return to a balanced budget in three years? The deficit is three times larger, and we do not know when we will return to balance. Shame on them.
Mr. Speaker, just to respond very quickly to my colleague and friend across the way when he posed the question of whether the previous Conservative government could have done more, I would argue that the Conservative Party did virtually nothing in regard to assisting Canadian seniors. Indeed, the Conservatives could have done a whole lot more. In fact, for many years I sat in the opposition benches and listened to provinces calling for strong national leadership on the CPP. The Stephen Harper Conservative government continued to turn a deaf ear to what many provinces wanted and pushed the federal government to act upon. There is no doubt in my mind that it was a very low priority of the Stephen Harper government, that the Conservatives did not see the pensionable incomes.
To give any grace, I would suggest that at the very least the Conservatives did not understand and appreciate the importance of the CPP to the Canadian population and to many of the jurisdictions that wanted to see the national government demonstrate leadership on the file. That was not seen until we had our current in this current government who has taken decisive action and has demonstrated strong leadership in terms of recognizing what Canadians indeed wanted to see happen.
Before I get into that aspect, I want to make this very clear. I am a sensitive guy at times and I hear members provide questions or quotes, and maybe a little earlier quotes even about me in regard to the issue of time allocation. Let me address this issue because it is important for us to recognize. The Conservatives might have hoodwinked or fooled the New Democrats across the way, but they have not fooled the government members. I do not think it is going to be any surprise that what the Conservatives really want to do is kill Bill . They might be the only entity in our country that opposes Bill C-26, but let there be no doubt that they want to kill this bill. They would be very happy if this bill never saw the light of day. That is why I was not surprised to see the Conservative Party play its games yesterday to try to prevent an ultimate vote occurring on Bill C-26. If it were up to the Conservative Party, we would never be voting on Bill C-26. That is why the Conservatives brought forward amendments.
They fooled the NDP, the third party. I give them credit for that, but sometimes it is not the easiest party to fool in this chamber. At the end of the day, time allocation is in fact a tool that is used to try to get the government business dealt with. This is something that Canadians want. A vast majority of Canadians support Bill . I know that. If we are not prepared to use the tools, at times, that government has provided, then we will not be able to pass the important types of legislation that Canadians expect governments to pass.
I will give the Conservatives some credit. They have focused on what I would suggest is a bad bill, to line up and say that they do not want the bill to ever see the light of day. The Conservatives have had 30 speaking spots, but that does not mention the good number of other spots that they had in questions and answers. I would suggest that very easily more than half of the Conservatives, if they wanted to, could have actually spoken to the bill.
I will go further by saying that it does not take much. It takes 10 or 12 MPs to have party status. Any party can be fairly destructive in terms of the proceedings of the House because we have a finite amount of time in order to pass legislation through this chamber. If an opposition party chooses to be mischievous and not recognize what the government is trying to accomplish, it does not take very much to invoke time allocation. I saw that when I was in the opposition benches, where we had time allocation over 100 times. It does not take a genius from within an opposition party to create a bit of frustration on the government benches where it has to look at using that tool. Look at how much time has been allocated to Bill .
If the government and opposition were to come to a consensus, that is always the ideal. We have a government House leader who has reached out to the opposition party in a very real and tangible way. If the opposition wants to be accommodative, and we are accommodating, that is great, but let us not kid around. We know that at times, the official opposition members will not want to co-operate, because they will want to kill a bill. However, just because the official opposition wants to kill a bill, it does not mean the government would not pass the bill, as we will continue to do what we believe is in Canadians' best interests first and foremost.
If we look at the substance of Bill and what it would do, it is pretty straightforward. It is a historical agreement achieved by our national government demonstrating leadership, right from the Prime Minister's Office to different ministries and, indeed, to our caucus. Every member of the Liberal caucus has been able to participate in this great debate regarding pensions for our seniors, and the CPP is one of those fundamental pensions that Canadians truly believe in and want to see action on by our government.
We took it a step further by saying that we were going to demonstrate that leadership, and within the first year of being elected, we have an agreement with provinces in every region of our country and their different political parties. Even Progressive Conservative parties have agreed to what we have before us today. We have many different advocacy groups that recognize that, yes, this is the type of legislation they want to see.
This is not just about today's seniors, but the government has not ignored them. The best example is the guaranteed income supplement, which was substantially increased in this budget. That initiative is going to lift tens of thousands of Canada's most vulnerable and poorest seniors out of poverty. That is helping today's seniors.
However, let us not focus on and think that because this would not help today's seniors in a very real and tangible way, we do not need to have this bill before us today. If we talk to seniors, they care about their children and grandchildren. They want their children and grandchildren to retire in dignity. This bill is all about the future, and this means having vision. This is a government that has leadership and understands that.
If I were to take any bill presented so far, this would be the bill I would focus my attention in showing why the Conservatives are no longer in power. It is because they lost touch with Canadians. That is the simple truth of it. They did not understand what Canadians really and truly wanted. They lost touch with them.
Contrast that with the attitude of the and this government. We have a who has consistently mandated his ministers, in fact, all of our caucus, to reach out to and better understand what Canadians want, and to bring that back to Ottawa so that the types of initiatives we take reflect what Canadians really want. This is really what Bill is all about.
I do not understand why the Conservative Party continues to oppose this legislation. This demonstrates that they still have not learned their lesson from the last election. They are ignoring what a vast majority of Canadians really want, and this is just one example of that.
I do not mind if the Conservatives want to stay out of touch with Canadians, but we will continue to move forward and will have to see what happens. However, we recognize what Bill is all about. Imagine a group of premiers, reflective of different political parties, meeting with the federal government, which is able to come to the table in such a way that we achieve an agreement.
It is an agreement that we believe is in the best interests of working people, not only in the short term, but also in the long term. The stakeholders, even businesses, in good part agree that this is legislation that all members of the House should be supporting.
Mr. Speaker, it is a pleasure to rise to speak to the bill that I think is so critical to the future of all Canadians.
The reality is that Canadians have not been saving enough for retirement. This has been a result of a changing workforce in which pensions are less prevalent, and where employers' retirement provisions are becoming more and more meagre. Oftentimes Canadians are working contract positions or working in self-employed situations where they do not have access to funds to help support their retirement ambitions.
I can say, having lived through my twenties, longer ago than perhaps I would like to admit, and having talked to friends in that period of their life, it was something they did not consider and were not saving appropriately for. Unfortunately, as they have families and their lives get busier, that trend continues, and they do not start saving adequately until it is often too late. That means that the retirement funds they have are insufficient to fund their needs.
The reality of that is that seniors are now left with low incomes and in situations in which they have limited opportunities to either expand their income or to meet their basic needs. We do not want that retirement future for anyone, and it is incumbent upon us as legislators to look at the policy mechanisms we can put in place to ensure that it is not the outcome that hardworking Canadians meet when they complete their careers and decide it is time to retire, or when they are in a position when work is no longer possible.
Frankly, not taking action in this regard is reckless, irresponsible, and in flagrant disregard of the future of those Canadians. It is a totally unacceptable position to say that we should not be making policy moves to try to ameliorate this situation.
What particularly concerns me about the position taken by the official opposition, the Conservatives, is that they put forward no alternative. It is, “You're on your own. Good luck. Hope you figure it out”. That is not good enough. We ran very clearly on improving the Canada pension plan and ensuring that Canadians have that bedrock underneath them.
This plan will see Canadians having about one-quarter to a third of their retirement income from their pension. That is a very important change. It is an expansion of all the other things we are doing and not the only thing we are doing, but an important piece of the solution to where we need to go. If we do not do it, frankly, we will be in a lot of trouble.
I hear the Conservatives try to portray this as a taxation issue. The reality is, as I saw in my time leading various teams in different organizations, that an employer has a responsibility for the retirement of their employees, and an individual has a responsibility to plan and pay for their own retirement. This enables both of those things to happen. Savings are not a tax, but a prudent, intelligent plan for our future, and to characterize it otherwise is dishonest and disingenuous.
The bill is very clear. It is broadly supported by many provinces, by many people of different political stripes, but certainly, after six days of debate, after more than 36 interventions by the Conservative Party, there has been more than enough debate for us to move forward.
Just to give people some context about what we have in the parliamentary calendar, there are 55 sitting days from September to December. That is all we have: 55 days. Seven of them are supply days, which the opposition can use as they see fit. There were three days of debate on the Paris agreement, one day mandated to debate the Standing Orders, one day lost to debate on procedural tactics from the Conservative Party. That only leaves 43 days for the rest of government business. We have given six days to this, including today, and the Conservative Party, rather than using the full day for debate, as they supposedly had other members who wanted to speak, had us engage in all kinds procedural tactics, including trying to shut down the House yesterday.
It is disrespectful of this place.
For the Conservative Party, which invoked time allocation more than 100 times, which stunted debate entirely and shut down the House from having an opportunity to have a say on the issues of the day, when it has been allocated this amount of time on a matter that is focused, that is clear, and that is simple, to cry that somehow its rights have been infringed upon is obscene.
The reality is that the government has many important items it must pass and get done on behalf of the Canadian people. This place, this Parliament, has an obligation to ensure that the business of the nation is done.
These procedural tactics and games do not do any justice to that, and they particularly do not do any justice when the matter in front of us is as substantive as this.
The debate we should have, and I would welcome it, is how we can do more. How can we make sure that this pending issue, this huge problem we have of Canadians not saving enough and not having the funds they need to have a safe and secure retirement, is something we can work on collectively in a bipartisan way?
I am encouraged that this issue of CPP across the country, by and large, has been bipartisan. We have heard from Conservatives, from New Democrats, from Greens, and from people of all stripes saying that this is something we can agree on.
I would have hoped that the debate would extend that further to say, what else can we do? What other policy mechanism can we bring to bear? We cannot afford to have our population come to a point where their retirement is not going to be able to fulfill their needs?
The bill we have in front of us today is an important step in the journey, but it is not the end of the road. Therefore, we are looking at other measures, which were identified just a few moments ago, such as reducing the retirement age from 67 to 65 and looking at the supplement mechanism for old age security and how much it is able to provide for folks who are in income-insecure positions. We have to look at some of the other elements of the social safety network.
We recognize, and anyone who is interested in fiscal prudence would recognize, that if we do not make the investments on the pension side of the equation to ensure that people have adequate income, the forces that will come to bear on the costs of those social programs because Canadians do not have adequate income will be absolutely overwhelming.
If Canadians do not have the funds in retirement, we are not going to say to seniors, “Go sit on the street corner”. We are not going to say to them, “Sorry, you are not eating tonight”, and “Sorry, your heat is not going to be available”. It is going to come to the doorstep of government. This problem is going to land on our laps one way or the other.
We can put our hands over our eyes, ignore the problem, and do nothing about it today, or we can pass on a debt to the next generation or have the terrible choice of either paying for it or having people be in these terrible situations.
What we are saying is that the imperative is to act now.
I would encourage us, in the spirit of trying to move this forward, to take the time remaining to us to have a dialogue on the basis of what more we can do, that we set aside the faux arguments and the faux indignation about this issue of time allocation and acknowledge that we have had more than sufficient time to debate this issue. What we need to do is look at what more we can do. What we need to do is get on to the rest of the important business this House has to undertake and recognize that we do not have that much time in which to do it.
I look forward to getting to the vote. I look forward to seeing these measures implemented and to making sure that Canadians are able to have the retirements that, after a lifetime of working, they so richly deserve.
Mr. Speaker, it is an honour to join this debate on this piece of legislation. I would certainly like to go through not only some of the past and present issues but also some potential possibilities in the future. I hope my arguments will find ears that will listen and we can have a good debate about everything under the sun when it comes to the CPP.
I would first like to talk about the previous government. I know that there are fans of the previous government in this chamber, and I know that there are those who did not appreciate its approach. However, every government takes an approach for a reason. Sometimes it is built on the context of the ideology of the party. Sometimes it depends on the environment in which it operates. Sometimes it is about the long-term interests of the country.
This country is great, not just because of its political system but because often, as Canadians, we can set aside some of those differences to do what is right. I hope that in this Parliament, perhaps not on this issue but on others, we can find those points.
The previous government focused on the pooled registered pension plan, which was a way for individuals to put away money. It would have been fully portable across this great country, and the costs would have been low, because it was pooled together with other Canadians. The benefit of that approach was simply this. If people had extra money to contribute, instead of putting it against a mortgage, toward lowering debt, or toward saving for a new home, they would have a place to squirrel that money away for retirement. Because of its pooled nature, the cost of administering it would have been low. It would have had the benefit of the private sector running it. It would also have had the obvious benefit that if someone were to pass away, those benefits would instantly be passed on to a spouse or family member.
One of the great pitfalls of the Canada pension plan is that it is not fully transferable, and I will speak to that a bit further. While the government may say that it is not a tax but an investment, when I put money into a TFSA, if I were to get hit by a bus tomorrow, my wife would have full access to those funds. That is not the case with the Canada pension plan. It is the case with a registered savings plan, though.
Getting back to the pooled registered pension plan, even though every single province across this great country agreed with the concept that we would give more choice and allow people who wanted to save more, and it would have had lower costs and been fully portable, not every province followed through. I am happy to report that British Columbia did, and I appreciate the Government of British Columbia for doing so. However, many provinces, particularly Ontario, chose another path.
Although Ontario agreed, at the finance ministers' meeting, to the pooled registered pension plan, it instead decided to go on a crusade and create a totally separate pension plan solely for the province of Ontario.
We have heard all the issues with respect to the administration fees. We have heard that it spent millions of dollars trying to scope out the plan, advertise, and whatnot. That was all for naught, because we all know what happened. Instead of producing a pooled registered plan that would have had immediate pickup, because it had a lot of support from the business community and the Canadian Federation of Independent Business, which was very supportive of the concept because an employer could add to an employee's pension on a voluntary basis, unlike with the Canada pension plan, it convinced the new Liberal government, which listened to it, to bail it out by instead pushing for an enhanced Canada pension plan.
I am not opposed to pensions, and anyone who tries to say otherwise I think is being disingenuous. We all benefit when we all play on the same level playing field of facts. To say that any Conservative is against pensions because he or she is raising legitimate concerns about the process by which the government is going about it I do not think benefits this place at all.
Getting back to Ontario, a deal was made, the government pushed this agenda, and the provinces signed on for a variety of reasons. I would not begrudge anyone for that. However, I think it is important that when members of this place, regardless of party, raise the legitimate concerns they hear from their residents, we owe them at least the admission that they may have a point. We have heard some members talk about our wanting to kill the bill. We just want to be heard.
In fact, I am just going to make the point that many members of the Liberal Party have stood up today and said that this should go to committee. It is already at the finance committee. We already engaged in a pre-study. We have studied it for the last few days.
Why deny members of Parliament the ability to raise their voices if they are not a member of that committee? The gentleman opposite said earlier that we only have so much time. I agree, but this is a big piece of legislation, and hopefully I am going to point out some improvements to it.
That takes us to here, right now. Again, we have a bill before us, and there are some shortcomings in the bill. I am going to start first with survivor's benefits. Unfortunately, the government has chosen not to make changes to the survivor's benefit. I have had many people my riding, who in the situation of their life, were quite fortunate that both the husband and wife, the team so to speak, were able to put away a fair bit of money and always maxed out on their payments.
Unfortunately, life had a different plan. Instead of living out the rest of their time in the sunny Okanagan, one died because of a disease or other reason. The spouse—and a funny thing in my riding is that I have heard from more men than women—as the remaining spouse would get no survivor benefit, because they were already receiving the maximum allowed under the Canada pension plan, because they had maxed out their contribution.
What does that mean? That means that, of all the money that is set aside and people believe would go toward their family, in terms of benefits, if their spouse has also maxed out, they would receive nothing. Some people may have varying circumstances. One person I know had to sell the house in which they had planned to stay together. The reason they were able to keep up the house and were able to pay the taxes was that they both had a good income coming in, plus their CPP.
The government's new bill does not address this. I really hope we can find mechanisms so that this is evaluated by this place, and I think that would be suitable. Through a committee study might be optimal. I do think it should be done.
Second of all, we also heard from Prof. Tammy Schirle from Wilfrid Laurier University that there is an issue in terms of accountability and transparency with the working income tax benefit.
There is a provision in the CPP, this legislation, that allows someone who is a low-income earner a choice to be able to use the working income tax benefit as a way to offset their contributions. She has mentioned that perhaps that could be done by a different means. What happens is that it creates a bit of a gender inequity in how someone can apply for that, because only one spouse of a dual-income household can take advantage of that.
Therefore there has to be some negotiation. Instead of treating people on an individual basis, like all individuals who contribute to CPP—I make my own contributions and my wife, when she was working, would make her own—it actually treats them together, and there is some negotiating that goes on, which creates a gender inequity.
It also does not create the accountability, where the person can see clearly how much is going in and how much is going out. Perhaps, maybe like the GST rebate for low-income earners, which is given on a constant basis, that would be a better method to be able to give people their contributions back on a more regular basis, rather than once a year through the process right now.
Last, none of us—unless someone here can show it—expected that in 2008 there would be a financial crisis leading to a great recession. Economists, including our own government's economists, were not ready for that and had to make a lot of decisions on the fly. Fortunately, we had some fantastic leadership that understood how to weather the storm. As a country, we were able to come out of that recession quickly.
However, the past may not be the future. If we cannot predict these kinds of things, perhaps the should consider some method within the bill that, if enough provincial counterparts—along the lines of six out of 10 of the provinces and territories contributing, representing two-thirds of the population—ask for a deferment or even a pause to the schedule, perhaps that is something we should consider.
In the heat of the moment when there are difficulties it is better to know we have options and flexibility.
I hope I have been able to present not only some of the challenges here but some of the opportunities that members on both sides can consider, and hopefully that will make for a better debate.
Mr. Speaker, I want to thank my colleagues for allowing me this opportunity to speak. Quite frankly, since taking office about 12 years ago, I would have to say that this is close to the top, if not at the very top, when it comes to issues brought to my constituency offices. I have two in riding in Newfoundland and Labrador, one in Gander and the other in Grand Falls-Windsor. Formerly I had one in Bonavista, which was part of my old riding. Without a doubt, seniors' poverty is one of the greatest issues I have ever seen. Every year calls come in about how much the increase will be this particular year, how the formula works, what is going to be on their GIS, and how it affects their ability to receive the provincial drug card in order to receive medications, because medication is one of the largest expenses of any senior no matter where they are, as members know.
We engage in this debate and we talk about how we hope to bring seniors to a higher level of income security. To do that, we have talked to the provinces, because in shared jurisdiction we do this. On June 20 of this year, we were able to arrive at a compromise for the entire nation, which allows us to increase that level of support for our seniors. There are three main ways in which Canadians can save through tax measures and the like. One would be through CPP, which we are debating here today. We also have several tools available for tax deductions—for example, tax breaks when it comes to buying a home—and also through RRSPs, or RPPs, we are able to use tax incentives when we voluntarily put money into those. The third would be other tools that we use to save for retirement including home equity, business equity, and the like.
Now we look to what we are dealing with here today, and we are talking about the Canada pension plan and how the contributions will rise, as many people have said in the House. We acknowledge that, but think about the benefits that will ensue because of all this. In many cases, the numbers have been put through the machine, as it were, and it shows that when it comes to retirement, the ideal goal for any senior retiring is that they are able to replace their pre-retirement income at a rate of about 60%. This does not alleviate that for all seniors in this case, but it certainly goes a long way to alleviate the hardships suffered by many.
I mentioned all the calls I get in my office, and this is a big part of it. Many of them have to do with old age security and the guaranteed income supplement that also flows from that. We can save that for another day and another piece of legislation, but in the meantime what excites me about this is that now, over the seven-year period ahead, we would see an increase that I think is substantial for the average Canadian, the average impoverished Canadian, someone making less than $30,000 per year, even less than $20,000 when we take in the other aspects of this legislation. I will get to that in a moment.
Also in this case, it would affect a whole host of young people who are currently not thinking about retirement, and many of them are not at this stage in the game. Many millennials are not thinking about retirement, but they would know now that they would face an enhanced benefit once they retire, after we have the seven-year phase-in. I mentioned the phase-in of the first five years would look at the income replacements, the contribution rate, and it is substantial in the sense that, instead of now one-quarter of income replacement, it would raise it to one-third of income replacement. That is a substantial investment for all of us; for employers, employees, and for the government.
The upper earnings limit on the back end of that seven years, in the final two years, 2023-2025, would increase by about 14% and that too is substantial, especially when it comes to the middle class. That would put the rate up to about $83,000 at that stage, and that is substantial considering that now it is in the lower $50,000 range.
In essence, in the last 10 years prices have gone up substantially in many sectors. I think of the many sectors in Newfoundland and Labrador where seniors find the hardest struggle, such as energy prices, medications as I spoke about earlier. Travel expenses in rural areas are also a substantial expense. Many seniors live in their homes and the energy bills many of them face are incredible. With a small lowering of energy prices over the past little while, it is still a substantial part of their day-to-day lives. Many of them are forced to abandon their homes, not because they are unable to look after themselves but because they cannot afford it anymore.
Many of these people do not have workplace pensions on which to rely. Many people between the ages of 60 and 65 will have workplace pensions that they have accrued through defined benefit programs, which go a long way toward replacing income, certainly even above the 60% level. However, in this case, let me consider my family.
My father worked over 40 years in one mill. Through the good work of his union, he was able to attain a defined benefit package, which meant he received the government old age security at 65. However, he was able to supplement that with a fairly large and generous defined benefit package from the company he worked for at the time. It was Abitibi-Consolidated, a mill in central Newfoundland. It no longer exists unfortunately. Through the work of his union, the International Brotherhood of Electrical Workers, the employees were able to negotiate a generous pension package.
Let us take a look at the workforce today. Not a lot of young people are able to work in one place for more than 40 years. That pool is very small. What is so important here is that means they do not get the benefit from having a defined benefit package because they have moved around from place to place and job to job. In other words, my father's pension package was generous only because he was there for 40 years. If he moved around from job to job, he would not have had that, simply because that pension was not portable. Portability is going to be a major issue over the next 20 or 30 years.
What is key is the fact that the CPP is 100% portable no matter where we go in Canada. That is why we have to increase the benefit for those who need it to get even close to fulfilling their dream of replacing their pre-retirement income of 60%. We hope to get closer to that goal over this seven year period. Yes, contributions will rise for employees and employers, and we have all accepted that. Certainly I have. However, when it comes to the benefits we are talking about here, we are trying to put this in line for those who need it at the time they retire.
Going back to my example, a lot of people will be moving around from job to job and they may have private savings that are portable, such as a myriad of RRSPs, or RPPs or things of that nature, including RRIFs for that matter. However, a lot of people do not and this is a way for us to keep that base level of income for Canadians when they retire, not at 67 but at 65.
I look forward to this going to committee, and looking at amendments as it goes forward. I want to congratulate the provinces in this. They have come a long way in helping us create what we think will help alleviate poverty for seniors. Again, it is the number one issue in my riding and I am not alone in that. There are many people, especially rural ridings, for whom the price they have to pay on just basic goods has become quite crippling.
Mr. Speaker, it is a privilege to rise today to talk about a very important bill, Bill , and the security of people in Canada when they retire.
I have a few introductory comments. I echo the comments of my colleague from who arrived in the House as a brand new member of Parliament, looking forward to a new spirit of collaboration and co-operation. Our hopes were very high that things would be different. I therefore want to register my disappointment around the government's choice to move forward with time allocation. I share that disappointment with the colleagues on my side who, unlike me, will be unable to share their points of view and comments with our colleagues today.
As I said, I am honoured to be speaking to Bill , which will amend the Canada Pension Plan Act and incorporate recent agreements the government has been able to reach with the provinces to enhance the Canada pension plan.
Although the effect of the changes will not be felt for many years, 49 years, this enhancement is a very important first step in improving retirement for young Canadians. I want to acknowledge and offer my congratulations to the many citizen groups, in particular, unions that have really been fighting long and hard and laid the important groundwork so we were able to get to an agreement on these enhancements.
When this is fully implemented many years from now, but still important, the CPP will replace 33% of pre-retirement income, which is up from its current 25%. The New Democrats have long worked hard for improvements to many aspects of our social safety net, including the Canada pension plan, fighting for better old age security, and increasing guaranteed income supplement benefits.
As I mentioned in some of my questions, retirement security for many Canadians has reached a new crisis level. It really has been increasing and made worse under some of the policies of the previous government, which really saw the crisis come to a head with many people being unable to look toward a retirement. A golden retirement, as people used to say, will not be there.
A large part of that problem is that six in 10 working Canadians no longer have a workplace pension. I will do what a lot of people do not do usually and reveal my age. I am 53 years old. My dad would have been one of the first groups of workers who worked for a very large multinational corporation and had a workplace pension. Closer to the end of his tenure in the corporation, during a large corporate takeover, he lost that defined benefit pension plan. My parents, along with many others, have had to look forward to retirement, but, as my colleague on the opposite side said in his previous comments, have had to take on a lot more risk when it comes to pensions, more risks than his parents had and many before him. Younger generations are looking forward to an even more precarious work environment and retirement, one that may not provide them with the things they need to have a safe and healthy retirement.
During the election, the Liberals promised to enhance CPP, and we are glad to see that has come forward. I have a couple of comments on this.
I want to acknowledge my colleague from . As any good MP would, he did some digging and studying up on the bill so we could speak about it as it was coming forward. He found some flaws with it. I thought the government would be very eager to hear about this and do a quick fix. It is one of the reasons we want to continue to debate this, because we would like to hear a response from the government that it does plan to fix this. Just saying that going to committee somehow that will make everything better does not reassure me or people in my constituency, in particular, women and those living with disabilities, that their retirement is going to be as secure as they thought it was.
Of course, what I am talking about is that the proposed changes to enhance the Canada pension plan would actually not afford women and those with a disability the same increases. Although we know this was brought in under a previous prime minister, Pierre Elliot Trudeau, it was not included in this particular enhancement to the Canada pension plan. I know members on this side and my colleagues have been asking the government over and over, both in question period and in debate, to tell us if this was a mistake. We have asked if it is going to fix it, or if it was not a mistake, why it was not included.
Of course, if it was not a mistake then I question its claims about being sincere in addressing some of the inequities and issues, particularly when it comes to retirement for those two groups of people who would be most vulnerable. They are those living on some type of CPP disability and women who had to leave the workforce who were the primary caregivers of children and were therefore not contributing to the Canada pension plan. From what we can see, from what we know, and from the research from my colleague, these folks are not going to see the increase, as others would. It is one reason to continue debate.
I understand the government has just recently, within a month, done some great work and brought our provinces together and got agreement. However, sometimes in haste, things get overlooked. This is one aspect I hope the Liberals just overlooked, and I hope they are going to try to fix it, because it is extremely important to me.
When I was campaigning to be the member of Parliament for my riding of Saskatoon West, one of the key issues in my riding was income and affordability. For seniors, it was being able to afford housing, and if they were lucky enough to scrape together enough to afford housing, they were not able to afford medication.
Retirement income, particularly for women and those who have lived on a more limited income because of a disability, is extremely important to me. Therefore, I rise today to speak about this and to draw it to the government's attention again. It would be nice to hear, definitively, from the government that it does plan to not allow this inequity to move forward, that it does plan to fix it, and not just say that everything will be all right, that we will talk about it in committee, to just get going with this, and keep talking—or not keep talking, I guess—so that we can address this.
I feel honoured to stand up and speak about this issue. I want to congratulate my colleague for bringing forward these two key pieces of inequity in the legislation.
Mr. Speaker, first and foremost, I want to thank the Government of Canada for taking on this initiative of expanding the CPP. It is no small task to get the provinces, which represent two-thirds of the Canadian population, to sign on to CPP enhancements. These provincial governments represent all parties, the Liberal Party, the NDP, and the Conservative Party, so the expansion of the Canada pension plan is very much a Canadian solution that is not only important but very much needed.
We know that, today, one in four families, or 1.1 million people, nearing retirement risk not saving enough for retirement. In particular, middle-class families without workplace pension plans are at a greater risk of under-saving for retirement, and a third of those families are at risk.
To address this, this historic agreement was reached with the provinces in June to make meaningful changes to the CPP. These enhancements would be phased in over a seven-year-period, starting in 2019. Once fully in place, the CPP enhancement would increase the maximum retirement benefit by about 50%. Enhanced benefits would accumulate gradually as individuals pay into the enhanced CPP, and to fund these enhanced benefits, annual CPP contributions would increase modestly over seven years, starting in 2019.
I would like to remind the House that our contribution rates in Canada are much lower than those in other countries with public pension plans. In fact, the CPP contribution rate is about half the average rate among the 25 countries in the OECD that have such public pension plans. This remains true even with our CPP enhancement.
What would this mean to Canadians, at the end of the day?
Young workers in their twenties or workers nearing retirement would all benefit from the enhanced CPP. For the young workers in their early twenties just starting out in their career, this would be a great benefit when they retire. By paying their portion of the CPP contributions, which are then matched by their employers, they would be building toward a safe, secure retirement for their own future.
The modest increases in contributions would be phased in over seven years. Someone working with constant earnings of $50,000 would contribute an additional $70 per year, or $6 a month, in 2019. By the end of the phase-in period, that same person would be contributing $475 per year, or $40 per month. By strengthening the Canada pension plan, workers would receive more money from their pension, an increase from one-quarter of the eligible earnings to one-third. For example, people who make $50,000 a year for their working life would receive about $16,000 each year in retirement instead of today's $12,000. That is $4,000 more a year in their pockets.
In addition, the enhancement would increase the point at which a person stops making contributions by about 14% in 2025.
I know that some people are concerned about the increased contributions and what they would mean to their bottom line: their paycheque. We thought about this and designed a gradual phase-in, so that contributions would increase modestly over the seven-year implementation period. We also thought about employers, in designing this enhanced CPP. We specifically designed a slow phase-in process with the express purpose of minimizing the impact and giving employees and employers time to adjust to these changes.
The great news is that our young workers would receive the largest increase in their retirement benefits. In fact, we know that young people, in general, find it difficult to save. Many are working in jobs that do not have company pension plans, which makes them have to save for their retirement on their own.
The other fact is that a tax deduction, instead of a tax credit, would be provided to the employee contribution portion of the enhanced CPP. This would avoid the new CPP contributions increasing the cost of saving.
Workers in the middle of their career or nearing retirement would still benefit from an enhanced CPP as the increased contributions that are made in 2019 and later would go toward an enhanced retirement pension.
What about the low-income worker worried about the effect of increased CPP contributions on his paycheque? How will the enhanced CPP help him or her? I want to assure my colleagues and low-income workers all across this country that an enhanced CPP will benefit all workers, including those with low incomes.
To make sure that eligible low-income workers are not financially burdened as a result of the extra contributions, the government will also enhance the working income tax benefit. The proposed enhancement to the working income tax benefit is designed to provide additional benefits to roughly offset the incremental CPP contributions for eligible low-income workers.
With this enhancement, there will be no impact on disposable income. When he or she retires, they will also get a larger retirement benefit payment. The bottom line is that people who are working in Canada, paying into the CPP, and planning to retire after 2019 will have more money in their pocket from their CPP retirement pension benefit.
In my riding of Brampton East, day in and day out, I speak to constituents who call me personally about the issues they or their families are facing. I often hear that young Canadians have a hard time finding permanent, stable employment with reliable pension plan. That is often way out of reach. I hear from young families and established families alike who are thinking of retirement and realizing they do not have adequate savings. This concerns me, and it should concern every member of the House.
The Canadian Association of Retired Persons estimates there are roughly 600,000 seniors living in poverty in Canada. That is more than the population of Brampton. Frankly, that is unacceptable.
Our government is doing its part to ensure that in the future no seniors live in poverty. We started by reducing the age of eligibility for old age security back to 65, and boosting the GIS by 10% to provide almost $1,000 per year per GIS recipient, aimed especially at helping low-income seniors who live alone.
However, that is not enough. Associations like CARP have been calling for an expansion of the CPP for years, and it is about time we delivered. We feel this is a win-win. I urge my hon. colleagues to support an enhanced CPP that will further help Canadians contribute to a safe and secure retirement.