Bill C-574 (Historical)

Judy Foote Random—Burin—St. George's, NL

Mr. Speaker, I am pleased to speak to Bill C-574, an important and timely piece of legislation introduced by the hon. member for York West, who is also known as our critic on seniors and pensions.

This piece of legislation, known as the “Retirement Income Bill of Rights”, has become very popular throughout the country. My colleague has travelled throughout the country and has had discussions from coast to coast to coast on the importance of dealing with issues affecting seniors and pensioners.

This is the first bill of its kind ever proposed to protect our seniors and their savings. The legislation proposes to enshrine in law the notion that all Canadians have the right to contribute to a decent retirement plan, and to be provided with up-to-date unbiased and conflict-free information on their retirement savings.

Bill C-574 has been well researched and vetted. It is the product of months of research and consultations with legal experts, government officials, and most importantly, seniors and pensioners. The bill is a comprehensive piece of legislation that does not aim to simply change one thing or another; rather, it is designed to address systematic and societal challenges relating to Canada's pension system and retirement income.

In developing this bill, the hon. member for York West who, as I said, is the official opposition's critic for seniors and pensions, went from coast to coast to coast. She spent time in my riding of Random—Burin—St. George's. One troubling theme became obvious when she was in my riding. It is clear that Canadians are not saving enough for their retirement, not because they do not want to, but simply because they cannot afford to. It is a sad reflection on our nation when our pensioners and seniors are in such dire straits that they have trouble contributing to their own savings and their own retirement incomes. It is a troubling trend. Fortunately in this House of Parliament we have the opportunity to change that. As legislators we can directly affect that.

The people we met in my riding encounter difficulties day to day, whether it is in paying high home heating costs, paying for the rising cost of gas, or paying their electrical bills that are going up all the time. It is a sad reflection on our society today that in a lot of cases seniors have to leave their homes in the daytime and spend time in shopping malls just to keep warm. They have to make decisions about whether they buy food or medication, or whether they heat their homes. They cannot do all three, again because of their income.

From old age security to the CPP and the supplement, we understand the extreme importance of protecting and preserving pension security and ensuring adequate coverage for all Canadians in the years after they stop working.

There are some dismal statistics to report. There are more than 200,000 Canadians over the age of 65 who live below the low income cutoff line. In a country like Canada, it is disgraceful. It is unfortunate that the government seems to be untroubled by the situation. The government prefers to cut social programming and essential services and make irresponsible corporate tax cuts worth billions, $6 billion a year to be precise. This is to say nothing of the government's priorities to fund things like multi-billion dollar fighter jets and U.S.-style mega prisons.

All of these initiatives pale in comparison when we consider the situation that our seniors find themselves in today.

Statistics Canada also tells us that Canada's population over the age of 65 could reach an unprecedented 10.9 million by 2036. Seventy-five per cent of those people will not have an adequate source of retirement income. That is because most Canadians working in the private sector do not have a pension plan and are not saving enough. They are effectively prevented from accumulating the same retirement income as their public sector counterparts.

With those numbers in mind, we have two choices. We can ignore the problem until it becomes a national crisis, or we can address it now before it becomes a crisis.

The basic cost of living is taking its toll on seniors and retired Canadians. Most Canadians will find it harder and harder to get by on CPP unless the system is changed.

Currently, individuals participating in generous defined benefit pension arrangements routinely accumulate five to seven times more retirement income than those who do not. These defined benefit plans are available only to public sector workers and to a very small minority of private sector workers. This creates a large societal imbalance when it comes to retirement income.

Public sector workers make up only a very small percentage of our population. Hard-working Canadians who spend a lifetime working in industries like the agricultural industry or as small business owners, or who stay at home to care for their children and families will not have the benefit and security of such generous pension plans.

As it stands now, the Income Tax Act states that an individual cannot have a generous defined benefit pension plan unless it is provided to him or her by his or her employer. Most employers in Canada do not provide for such a pension plan.

This bill is concerned with creating the conditions in which all Canadians would have access to pension plans that help them save for a secure retirement.

In particular, clauses 4 and 5 of Bill C-574 guarantee equality of opportunity. The bill would provide that any federal law that has the effect of restricting an individual's right to join a pension plan or flexibility to make the contributions necessary to accumulate an adequate retirement income would indeed be a violation.

If Bill C-574 becomes law, it would be unlawful to prevent people from joining a pension plan or restrict their right to make contributions, subject to reasonable restrictions that would apply equally to all individuals.

The hon. member's bill aims to eliminate the barriers that currently prevent the self-employed, fishers, farmers, homemakers and all others in the workforce who do not now have access to pension plans to allow them to save effectively for retirement.

Bill C-574 acknowledges that dignity in retirement is a right and that we as legislators should move to ensure that all will have such dignity through a secure and equitable retirement income regime.

This bill would also ensure that every Canadian would have access to effective retirement savings mechanisms. It would do this through empowering people with detailed, up-to-date, conflict-free information about their financial future.

The goals of this bill are simple: to create substantive rights; to give every person a chance to accumulate retirement income in a plan that will be there in the long term; to promote good administration of retirement income plans; to ensure that members of retirement income plans regularly receive good, plain language information they need about their plans; and to set out in law the goals to which we aspire legislatively as they relate to retirement income.

It is simply unacceptable that in this great and prosperous nation many elderly people live in poverty or near poverty. The Liberal Party has always understood and championed the values of security, safety and dignity.

One of the most important aspects of the bill is financial literacy. For the most part, Canadians are unsure as to the existence and/or impact of various tax provisions, savings vehicles and/or estate planning options. It is widely accepted that Canadians collectively spend billions of dollars each year on service charges, interest expenses, fees and lost income resulting entirely or in part from a lack of financial literacy. By providing greater access to timely and easily understandable financial management information, Canadians could save money which could be redirected to retirement savings.

The Liberal Party fully supports strengthening our retirement systems. Pensions and their protection is a priority for us. The Conservative Party, on the other hand, has a history of opposing improvements to Canada's pension plans, and of ignoring one of the most vulnerable groups in society.

While we have an old age security and pension system that has served Canadians well in the past, the Liberal Party recognizes there is a need to improve upon the system that we have grown and nurtured over the years.

As I meet with my constituents, it becomes obvious that the need is great. We need to deal with that. We need to start addressing the pension shortfalls today if we are to prevent a full-blown crisis in the years ahead.

In closing, the guiding principle behind the bill is the belief that a strong and secure retirement income system is essential to the well-being of Canadians.

Alex Atamanenko British Columbia Southern Interior, BC

Mr. Speaker, in preparation for today's debate, I went through some material that came across my desk and I ran across a newsletter called Seniors’ Voice, which is published by Senior Power of Regina Inc.

I am trying to link why we are seeing increased poverty among seniors and among others. I am trying to link this up with the film I saw recently about poverty in general called Poor No More.

I will quote from Seniors' Voice to help us understand what is happening and how we can address priorities, in part, through the bill. This document talks about the power of corporations in our society today. It states:

Corporations have become so powerful that they now control the dominant global economic system as well as the governments of most countries. They own the mass media outlets. The would-be prominent champions of social and economic justice have been marginalized and ridiculed. Even the academics who dare to sound the alarm about global warming or the unfair distribution of wealth risk being discredited by the PR lacks of the corporations that benefit from pollution and poverty.

This overpowering influence of multinational corporations has stifled dissent and made travesty of allegedly democratic governance. It has entrenched an economic system that feeds, parasitically, on the planet's dwindling natural resources.

This may sound extreme and not all of us would agree verbatim with what is happening.

The reason we have more people in poverty, specifically seniors, is because of the way we regulate our revenues.

I mentioned the film Poor No More, which is narrated by Mary Walsh. The film talks about the influence of corporations on our government and other governments in the world and the policies that have been made as a result of this influence. It talks about the rising inequality, the corporate agenda that has taken hold of governments in the country.

An analysis of the film was done by journalist Murray Dobbin, who looked at the various corporate tax cuts that had taken place over the last few years under the previous government and the current government. He crunches the numbers and says that had we not made these cuts, we could have top quality health care. We could pay for half of the tuition of university students. We could ensure that every senior lives in dignity and out of poverty. We could have top quality care for seniors and a first-class child care program. We would still have around $20 billion left over for other needs.

We need these kinds of bills and discussions because governments have made choices and often their choices have not been in the best interests of the people of the country, but have been in the best interests of those such as the Council of Chief Executives, now chaired by John Manley.

Bill C-574 is an attempt to make things better. I thank the hon. member for York West for introducing the bill. The NDP supports the bill going to committee.

This bill creates individual rights related to pension income, such as the right to accumulate sufficient pension income for retirement, the right to determine how and when pension income should be accumulated, the right to the full, accurate and timely disclosure of the risks involved in the plan, and so on.

Bill C-574 creates rights, but does not amend the relevant legislation to enshrine these rights. It seeks greater transparency in pension fund management, but most of the funds come under provincial jurisdiction.

The NDP is also in favour of greater transparency in government pension fund management. In fact, the pension critic, the hon. member for Hamilton East—Stoney Creek, has already introduced a private member's bill, Bill C-361, An Act to amend the Public Sector Pension Investment Board Act (reduced risk), which presents in detail how to enhance this transparency.

In addition, with regard to Bill C-574, apparently, according to my colleague from Hamilton East—Stoney Creek, none of the national organizations that represent seniors are publicly acknowledging this bill because they think it does not go far enough. However, in light of our past commitments, it would be difficult for us to not give our support to this bill. I have always said that nothing is perfect. You always have to start somewhere and we will start by supporting this bill and sending it to committee.

In general, the NDP believes that Canadians should be able to retire comfortably and securely. Like every party, we have a plan for pension reform. It is a four-point plan. I will try to talk about our vision a little later.

The member for Hamilton East—Stoney Creek stated the following on a cross-country tour:

I know from my travels throughout the country listening to seniors that there is a need for an immediate and consistent increase to programs like the GIS and the elimination of benefit clawbacks. After facing a two year freeze of old age security, seniors are telling me that the extra buck fifty this government is giving just isn't enough.

The bill my colleague is talking about his private member's bill, Bill C-564. The bill would mandate that programs such as the guaranteed income supplement are indexed to the cost of living. It would bring senior support programs in line with most government support programs, which are already linked to the consumer price index. The seniors CPI act would also create a new measure that would take into account purchases that are specific to seniors.

I will go into a little more detail on what we envision to help seniors in this country.

As I mentioned, we propose eliminating seniors poverty by increasing the income tested guaranteed income supplement, GIS, by $700 million a year. What is interesting is that this is less than half the corporate tax cuts that were due January 2010.

We also propose working with the provinces to phase in a doubling of the CPP and the Quebec pension plan benefits from about $11,000 a year to almost $22,000. This would give Canadians a chance to save in the least expensive, most secure, inflation-proof retirement savings vehicle.

What would the cost be for something like this? According to our calculations, an additional 2.5% of wages matched by employers, which is less than what one would pay for private savings plans, money one would often never see again.

Once again, we can look at this with the backdrop of the film I was talking about. I would recommend that members try to get hold of the film, Poor No More . It does not cost very much to download it from poornomore.ca.

We see that choices have been made in other areas. All governments make choices. For example, rather than choosing to double the CPP, the choice is to give corporate tax breaks. Rather than choosing to increase the GIS, the choice is to purchase stealth fighter jets, and we have had a discussion on that.

Certainly we will support sending this bill to committee, but there are more issues we have to look at in-depth when we look at poverty and seniors.

The Acting Speaker Barry Devolin

The Chair is now prepared to rule on the point of order raised by the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons on November 23, 2010, concerning the requirement for a royal recommendation for Bill C-574, An Act to promote and strengthen the Canadian retirement income system, standing in the name of the hon. member for York West.

I would like to thank the parliamentary secretary for having raised this issue as well as the hon. member for Mississauga South and the hon. member for York West for their contributions on this matter.

In presenting his concerns with respect to Bill C-574, the parliamentary secretary noted that in clause 13 the bill contains a new obligation for the Minister of Justice to “examine every regulation transmitted to the Clerk of the Privy Council for registration pursuant to the Statutory Instruments Act, as well as every bill introduced in or presented to the House of Commons by a minister of the Crown, in order to ascertain whether any of the provisions thereof are inconsistent with the purposes and provisions“ of Bill C-574.

In his view, this new duty would significantly alter the functions of the Minister of Justice, as it would require actuarial, financial and economic expertise that does not currently reside within the mandate of the minister. Accordingly, he contended that this new obligation infringes upon the financial initiative of the Crown.

In support of his claim that the bill requires a royal recommendation, the parliamentary secretary made reference to previous Speaker's rulings regarding bills that require a royal recommendation because they were adding a new function to an existing mandate. He also referred to some of the current duties and functions of the Minister of Justice with regard to the making of federal acts and regulations, specifically those described in sections 4.1 of the Department of Justice Act, as well as section 3 of the Canadian Bill of Rights.

During his intervention, the member for Mississauga South stated that the Minister of Justice is tasked with providing legal opinions on many matters, the substance of which are not necessarily directly within the jurisdiction of the Minister of Justice. In addition, he outlined that in fulfilling this broad responsibility and through proper due diligence, the minister already has available to him the specialized expertise of the government as a whole and, thus, has access to all the pertinent information with regard to whatever subject matter is at hand.

The Chair has examined carefully Bill C-574 as well as the precedents cited and the relevant statutes.

It is clear that Bill C-574, in clause 13, would require the minister to review all proposed regulations and legislation to ensure that they conform to the principles and provisions of this bill. The key question then is whether or not this review would significantly alter the existing duties and functions of the Minister of Justice.

The roles and responsibilities of the Minister of Justice are set out in the Department of Justice Act as well as several other acts of Parliament. The Department of Justice is the central agency responsible for supporting the minister in advising cabinet on all legal matters, including the constitutionality of government initiatives and activities. It also provides legal services to the government on issues that span the entire range of activities of federal departments and agencies.

More specifically, the Chair refers members to section 4(a) of the Department of Justice Act, which reads as follows:

4. The Minister is the official legal adviser of the Governor General and the legal member of the Queen’s Privy Council for Canada and shall

(a) see that the administration of public affairs is in accordance with law;

It would seem that this section, along with the general mandate described above, clearly indicate that the Minister of Justice would be well positioned to examine any new regulations and legislative proposals to ensure that they conform to the provisions of Bill C-574.

It may be that such a review would require a certain amount of coordination of resources, perhaps even resources of an actuarial, financial and economic nature as noted by the parliamentary secretary, however, the related expenditures would be operational in nature. Therefore, the Chair cannot accept the argument that Bill C-574 would entail the expenditure of public funds by the minister for a new and distinct purpose.

Accordingly, the Chair finds that Bill C-574 does not significantly alter the duties and functions of the Minister of Justice and therefore does not require a royal recommendation.

I thank honourable members for their attention.

Judy Foote Random—Burin—St. George's, NL

Mr. Chair, I rise to speak to this very important matter for all Canadians, not just for seniors and retirees.

In 1927, Liberal Prime Minister William Lyon Mackenzie King presided over the establishment of Canada's first old age pension plan. In the true spirit of Liberal values, the Liberal Party of Canada took a historic step by enacting this legislation and set a trend that would continue. Next it was Louis St. Laurent who delivered the Old Age Security Act. Then in 1963, another Liberal prime minister, Lester Pearson, began working on the Canada pension plan.

As has been pointed out by my colleagues, the Liberal Party of Canada has a collective legacy of valuing the long-term pension security of Canadians. It should be noted that all of these Liberal prime ministers were opposed by the Conservatives of the day. The Conservative Party has a progressive history of opposing improvements to Canada's pension plans and ignoring one of the most vulnerable groups in society. The Conservatives would rather allow our seniors and pensioners to fend for themselves. Quite frankly, this is simply un-Canadian.

While we have an old age security and pension system that has served Canadians well in the past, the Liberal Party recognizes the need to change and improve upon the system that we have grown and nurtured over the years. That is why we are fully supportive of Bill C-574, which is known as the retirement income bill of rights.

It is clear that the next 20 to 30 years will present serious challenges to Canadian pension regimes. An aging population, long natural lifespans and record levels of personal debt will be compounded by lower disposable incomes and continued global economic instability. If we are to plan for the future security of our pensioners, seniors and other vulnerable members of our society, we have to act now. We must act with decisiveness to ensure the viability of our pension security systems in the long run.

There are a number of principles that the Liberal Party of Canada has developed through its expert working group on retirement income security. The first is the inherent value of functioning pension systems. The Liberal Party understands that a robust and dependable retirement income regime is in everyone's best interests. It is really quite simple. Canadians, in fact all people, are happier and more productive during their working life when they are assured of a steady income upon retirement. Subsequently, there is less strain on other social services such as welfare, housing and health care.

There is also the question of dignity. Statistics show that poverty is a very real factor in Canadian society, particularly in the population over 65 years of age, and any suggestion that that is not the case is foolhardy. No one should be living in poverty. It does not matter if it is 6%, 10%, 20%. No one in this day and age in this country should be living in poverty.

Rising costs of basic living are claiming more and more of the income of seniors and retired Canadians. Higher taxes, higher home heating costs, higher transportation and health care costs all point to the need to adjust our current retirement income regime to meet these basic expenses. No Canadian who has worked a lifetime should face the difficult decision of having to pay for medication or to pay the heating bill.

The Liberal plan as laid out in Bill C-574 would ensure that our seniors would not have to deal with such choices, that they would in fact be able to live in comfort.

What the Liberal Party plans to do is to revisit the pillars of the Canadian retirement income system. Traditionally these pillars are: old age security, the guaranteed income supplement, the CPP, or QPP in Quebec, and the various privately sponsored tax-deferred plans. While these Liberal pillars have provided for a strong system in the past, they need to be enhanced in the face of new pressures such as an aging population and the instability of global markets, to name just two things.

What we need to do is to shore up the strengths of the current system while purging its weaknesses. What we propose is a holistic approach to strengthening the current system. Unfortunately for millions of Canadians, only the first two pillars of the system can be relied upon in retirement and old age.

Most Canadians will qualify for old age security and the guaranteed income supplement, as well as the CPP or QPP. However, a Statistics Canada report released on May 25 of this year reports that 75% of private sector employees in Canada did not have a registered pension plan at the end of 2008. That is 75%. Let us keep that number in mind.

This number means that millions of Canadians face dismal prospects after a lifetime of working and contributing.

Every year, I hear from a growing number of my constituents who are affected by clawbacks in their guaranteed income supplement. Every July, I receive many calls from seniors when their incomes are assessed and adjustments are made. If they have an increase in their annual income, such as a CPP increase, this results in a reduction of the guaranteed income supplement.

Let me give an example of how this directly impacts seniors. One lady in particular stands out in my mind. Mrs. Marion Russell of Stephenville Crossing in my riding is 70 years of age and a widow who worked her entire life. Because of an increase in her CPP, she lost the $4.51 she received in GIS. But more importantly, she lost her provincial drug card, her card that enabled her to have access to those medications that she needs in her old age to deal with health issues that she faces on a daily basis. This is simply unacceptable. That a minor increase in CPP could result in the loss of her GIS and her drug card should be cause for concern for everyone.

That is why we are here tonight having this take note debate. That is why my colleagues and I are fighting for our seniors and pensioners.

That is not all. As we speak, there are seniors in my riding and across this country who are sitting in malls to stay warm because they cannot afford to keep their homes heated. There are seniors who are malnourished because they cannot afford good food to keep them healthy.

We know for a fact that right now Canadians are more dependent on food banks than at any other time since the Great Depression.

In January of this year, I had the opportunity to meet with many of my constituents at a town hall meeting in Stephenville to discuss seniors issues and pension reform. I was joined by my colleague, the Liberal critic for seniors and pensioners. What we found was not surprising. People are concerned that the pension plans they have paid into all their lives are not going to be there when they retire. Too many people are simply unable to cover the basic costs of living on CPP and GIS alone. When adjustments are made to their income, many people stand to lose what precious little resources they have, by way of clawbacks to their payments.

The Liberal Party has been pressing the government for reforms to make retirement easier and more secure. We have been consulting with our constituents and Canadians across the country to develop a plan that will facilitate safe and secure savings for retirement.

The Conservatives, on the other hand, are failing to live up to the rights of Canada's seniors and future pensioners by neglecting to undertake much needed pension reform. Today, 1.6 million seniors in Canada are living on less than $15,000 annually. In less than 10 years, one in five Canadians will be over 65. This presents an immediate challenge and we need to act quickly with solid pension reforms.

Given the rising debt load of Canadians and the increased cost of basic living, it is simply unrealistic to expect Canadians to survive with any dignity on old age security and CPP alone.

That is why we are recommending that pension reform should now include private savings outside of tax-sheltered plans. Public and private structures should be integrated with a goal of providing more coverage to Canadians who run the risk of falling through the cracks as the situation now exists. In particular, what we are proposing will benefit women who statistically endure greater rates of poverty because of factors involving longevity, employment type and tenure.

Other specific pension reforms the Liberal Party is calling for include a supplementary Canada pension plan to give Canadians the option of saving more for retirement, allowing employees with stranded or abandoned pensions following bankruptcy the option of growing their pension assets in the Canada pension plan, and protecting vulnerable Canadians on long-term disability by giving them preferred status as creditors of bankruptcy.

Judy Sgro York West, ON

Madam Chair, it is great to be focused on pensions tonight. It helps to show Canadians that we are very serious about these issues and that we care.

In a country like Canada, it is unacceptable that senior citizens would be subjected to poverty and squalor during their retirement years. If Canadians are to take a more active role in retirement planning, then governments must also be prepared to step up and do their share.

That is a quote. On October 13, 2010, I presented a white paper to the leader of the Liberal Party. That paper took more than a year to write and it contained 28 recommendations for substantive changes to the various pension systems in Canada. That paper contained the words that I have just said. They represent the guiding philosophy that was used during the drafting of that paper. They are the basis for my actions and beliefs as they relate to pensions and pension reform in this country.

Canada is a nation rich with resources and potential and our citizens should be able to enjoy a measure of dignity during retirement. Contrarily, more than 200,000 Canadians over the age of 65 currently live well below the low income poverty line.

What that means is that after a lifetime of working to raise their families and pay their taxes, 200,000 Canadians are being forced to choose between buying groceries and paying the rent because their retirement income is simply too low to allow them to do both. While almost unbelievable in Canada, this is a daily reality for far too many. In response, the daily goal set by this or any government of Canada should be to immediately correct this wrong.

I would suggest it is shameful that the government seems ambivalent to the issues of inadequate pension security. We need to get serious about pension security, coverage and adequacy before we see more situations such as the one which is currently threatening 17,000 former employees of Nortel. That is 17,000 people who worked for a lifetime, paid their taxes and put money away for a rainy day, but despite their efforts saw their savings wash away because of inadequate legal protections. Shame on all of us.

I am not here to poke holes without offering my thoughts and ideas. That is what my white paper is all about. Historically speaking, prior to the Great Depression, most Canadian social services were delivered by a patchwork of religious, volunteer and charitable organizations. However, the reality is that today, in addition to being essential for basic living, many Canadians view pensions as defining elements of our national identity.

Where are we today? Most Canadian seniors are eligible for old age security and most former workers can receive Canada pension plan or Quebec pension plan benefits based on their contributions during the course of their careers. Those at the lowest end of the income scale are also eligible for the guaranteed income supplement. Alone, these mechanisms provide somewhere in the neighbourhood of 30% of one's replacement income in retirement.

In dollars, these plans pay a maximum of about $20,000 annually, but the average payout continues to be significantly less. Current economics suggest that this will not be enough for most Canadians who will need private retirement savings to survive. All of us know that is not sufficient today, never mind 20 years from now.

A number of Canadians do have a private pension through their employers and/or take advantage of government tax shelters, such as RRSPs or the tax free savings account, but recent events have called the security of these private investments into question. With this, it is this last option that in many respects needs some of the most dramatic attention from government today.

In the past few years alone, we have seen a number of private companies become insolvent. Once that occurs, it would seem that employee pension plans are inadequately protected under Canadian law. The real life result is that thousands of hard-working Canadians, like the 17,000 former employees of Nortel, are being cast to the wolves and the government seems content to watch the carnage.

In fact, last week one witness at the industry committee suggested that Nortel employees can expect to take a “haircut at the neck” when it comes to their pensions. How is this acceptable?

Despite repeated calls for action, the government seems willing to sit back and allow the markets to do as they will to many of these people. I will not support this approach and I am proud to say that my party is not prepared to sit back either.

On paper, it may seem as though Canada has already addressed the challenges presented by an aging population through the utilization of a range of public and private mechanisms. But, despite this apparent resolution, retirement income security, adequacy and coverage continue to be looming problems that require the immediate attention of business, labour, individual citizens, and governments at all levels. I very much hope all of us can work together to come up with some solutions as we move forward on this important issue.

The undeniable fact is that over the next 20 to 30 years, Canadian pension regimes will face a perfect storm of an aging population with longer lifespans and dramatically higher levels of personal debt, coupled with lower disposable incomes and global economic and market instability. Immediate steps must be taken in the short term if pension security, adequacy and coverage are to be attainable for the long term.

In an effort to ensure that Canada's retirement income system is prepared for these challenges, I have suggested adopting a multi-pronged, internally coherent strategy that will shore up our system while being mindful of several key principles.

First, we need to underscore the value of a functioning pension system. I strongly believe that a reliable retirement income regime is in everyone's best interests, as indicated by the parliamentary secretary.

Second, we should be rethinking the three pillars of the existing pension system. Canada has long prided itself on the success of its current retirement income system. The three primary mechanisms associated with that system are: old age security and the guaranteed income supplement; the Canada pension plan; and the various private plans in privately administered options. A fourth pillar includes private savings outside of tax-sheltered plans. These structures have provided a strong base. However, they will face new pressures as the national population continues to age over the next 20 years. Weaknesses must be purged and strengths should be expanded upon.

Third is the integration of existing systems. It is essential that the existing structure be examined holistically and with a multi-generational focus. Public and private structures should be integrated with the stated goal of providing more seamless coverage to the population.

Consideration must also be given to those who have traditionally fallen through the cracks. In particular, women, who statistically endure a greater rate of poverty due largely to factors involving longevity, employment type and tenure, must receive the attention needed to ensure retirement income security, adequacy and coverage on par with all Canadians.

With these principles in mind, and understanding the need to respect any relevant jurisdictional and partnership issues, my white paper is proposing several specific recommendations to help ensure Canada's pension and retirement savings structures are fortified in a way so as to ensure they are prepared for the anticipated storm. Those reform proposals include measures such as: the establishment of a supplemental Canada pension plan; launching financial literacy measures; a review of the cost of living calculation; and the creation of a stranded pension agency.

All of the items in the white paper have been shared with the government. I am very hopeful that it will review those recommendations. Clearly, I would not be offended if it adopted several of them.

Many of these measures are also encapsulated in Bill C-574, the pensioners' bill of rights that I presented earlier and on which we had the first hour of debate.

While I am pleased to hear that the parliamentary secretary is going to support sending my bill of rights to committee, I look forward to working with all of the parties in the House to improve the pension system.

Michael Savage Dartmouth—Cole Harbour, NS

Mr. Speaker, I am pleased to have the opportunity to speak to Bill C-574. I want to congratulate my colleague. I do not think anybody in Parliament has done more work going around the country and understanding the need to strengthen and make our pension more robust than the member for York West.

One of the biggest issues facing Canadians today is the security of senior citizens. If they have gone past working age, what are they going to live on? It is an increasing problem. Among the saddest meetings we have as members of Parliament, certainly in my case, are with people who tell me they are retired or were planning to retire very soon but it has all gone up in smoke. What they thought was there is not. These are people who do not have the option of going back into the workforce, or if they do, their options are very significantly limited.

So I really want to congratulate my colleague from York West. She has worked hard. She has travelled extensively in a non-political, non-partisan way and has brought forward this very important bill.

We know that a significant number of seniors live in poverty. Canada as a country has done a pretty good job over the last 20 to 30 years of reducing poverty rates among seniors. Going back to the 1970s, we have reduced poverty rates among seniors pretty significantly. It has been on the rise again over the past few years, but the poverty rate among seniors has gone down very significantly.

The problem is that there are still groups of seniors, and it tends to be single women, who have very high rates of poverty. We need to take that into account. However, it is not just the lowest income Canadians. Many middle-income Canadians are having a really difficult time now dealing with retirement.

I can recall somebody in a private company where I used to work who told me the story of having come out of technical school years ago with a friend of his. While my friend went to work for a private company, a big, reputable company, his friend went to work for the City of Dartmouth. Thirty-five years later when they went to retire, the person who had the good pension plan and worked for the City of Dartmouth was very well situated, while my friend did not have very much because the pension plan simply was not as robust.

In many cases, back in those days, people did not look at a pension plan when they started working at the age of 18, 19 or 20. They looked at the salary and never really understood the implications down the road for themselves and for their families if they did not have a strong pension plan.

Then there is the case of Canadians who believe, for valid reasons, that they have a robust pension plan. They work for large, reputable, seemingly solid companies, in many cases world-leading companies such as Nortel. Ten years ago, who would have imagined that people who worked for a company such as Nortel would have trouble? Then when things go bad for the company, they are left holding the bag, and the bag happens to be almost completely empty.

So what do we do? What is the role of parliamentarians in this House? What role does the federal government have? First, the regulation of private retirement savings is in fact a shared responsibility, federally and provincially. Federally, we have the Income Tax Act. We can take some of the instruments that we have control of and make them better.

I want to refer to the issue raised by my colleague from the New Democrats who would say that this bill does not really do anything and that we have a $700 million poverty gap for seniors. This is a private member's bill. I look at the work that members such as my colleague from Scarborough—Guildwood did on his private member's bill, Bill C-293, the development assistance act. Those of us in the House know that many Canadians may not know what a royal recommendation is. Very simply it means that, with a private member's bill, we cannot call upon the government to spend money. We can bring it forward, and we have seen many bills from the New Democrats and the Bloc, well intended bills, that required the spending of money, but they do not go anywhere.

Serious parliamentarians who actually want to make things better will craft a bill that is a road map to a better place but does not call on the government to spend money. In other words, some members in the House bring forward bills that can never be enacted, or they can be serious about it and provide a road map. Members can come to the House to make a point or to make a difference, and my colleague from York West is trying to make a difference.

The summary of the bill we are debating today, Bill C-574, is very simple. It says:

This enactment creates a Bill of Rights for a retirement income system that promotes the goals of adequacy, transparency, affordability, equity, flexibility, security and accessibility for all Canadians.

I think in many ways that says it all.

My colleague from York West, in a media release sent out about a month ago, indicated that as she presented the bill in the House of Commons, she noted that the legislation proposes:

to enshrine in law the notion that all Canadians have the right to contribute to a decent retirement plan and to be provided with up-to-date, unbiased and conflict-free information on their retirement savings.

There are 308 members of the House. Many of us have been in business, many of us have been employed, and there are entrepreneurs in this House.

There are a lot of people, and they are not foolish people, who think they are covered, as was the case with the Nortel workers and other people, who simply do not understand that if a company goes under, their retirement goes under as well.

They assume that this is all done above board and it is done with a third-party insurer. They do not understand the concept of self-insurance. I think the government has a role in this case to translate to Canadians what actually is the case so they are not fooled when things go bad.

Our Canada pension plan, established in 1966 under Prime Minister Pearson, was a good and noble goal. It is working. We have had problems. In the early 1990s, there was a severe underfunding of it. Jean Chrétien as prime minister, and Paul Martin as the finance minister, put it on sound financial footing. At the time, I do not think people fully understood how important that was. I do not think the credit was given, but that was a very important piece of both economics and social policy that made it possible for many people to have secure pensions.

Today, once again, we have significant barriers. The bill that we are debating today, Bill C-574, proposes to address that. To some, it may not do enough; to others, maybe it does too much. Maybe that is why it is a good bill, because it sets a road map for Canadians who are having issues with their pensions. It does as much as it possibly can within the restrictions of being a private member's bill. Many people are supporting it.

What does it do? The bill would do five things: create substantive, justiciable rights; give every person a chance to accumulate retirement income in a plan that will be there in the long term, because many Canadians simply cannot join a group pension plan right now; promote good administration of retirement income plans; ensure that members of retirement income plans regularly receive good, plain language information that they need about their plans; and set out in law the goals to which we aspire legislatively as they relate to retirement income.

We all know that Canada is heading into a demographic crunch. We heard from the member for York West her statistic that by 2036 there will be 10.9 million Canadians over the age of 65. It is my sure and fervent hope that I will be among them, because the alternative does not turn me on very much.

The other statistic that I will give people, just to give a sense of where we are going as a country, is from the Association of Canadian Community Colleges. They were in to visit MPs recently and they shared a statistic with us that really says it all. Today in Canada, 44% of all Canadians are not in the workforce. That includes senior citizens, children, the unemployed and those who are unable to work. By 2031, in 20 years, 61% of Canadians will not be in the workforce.

The challenges that presents to us are clear. If Canadians are not in the workforce, they are not producing as much tax revenue for the country that we are going to need; and clearly, at the same time, there is going to be more of a demand for things such as health care and social services.

Many of that 61% will have earned a retirement. I am not suggesting for a second that they should be forced to work. In fact, some of them may choose to work and we probably should make it as easy as possible for them to work if that is what they choose to do.

This is the demographic crunch that Canada is facing. If we do not do more to address the needs of that growing segment of the population, including myself, who are going to be over age 65 by 2031, and from the member for York West's statistics, 10.9 million over age 65 by 2036, then we will have a significant problem.

The time to address that is now, both for those who have a specific and urgent need, those who are hurting right now because there has not been sufficient legislation, but also for the many other Canadians who do not even realize that they are going to have a problem, who do not understand that their retirement is in severe jeopardy.

Those Canadians are going to be going to their members of Parliament in 20 years and saying, “I did not know. I was not aware. Nobody told me that we had this problem.”

We could say in the bill that we should increase the guaranteed income supplement, but then it cannot be enacted. It would require the royal recommendation that so many Canadians go to bed thinking about every night. It simply cannot make a difference.

We either come to this place to make a point or we come here to make a difference. Bill C-574 makes a difference and I want to commend the member for York West for her hard and diligent work on behalf of Canadians.

Wayne Marston Hamilton East—Stoney Creek, ON

Mr. Speaker, I rise today to speak to Bill C-574, a retirement income bill of rights.

As reform to Canada's retirement system is a key principle to which the NDP is dedicated, I was pleased to hear that my Liberal colleague from York West had tabled a bill relating to pension reform. I guess in my haste, I thought it might be something around the Nortel situation, especially with the long-term disabilities. In fact, when the member spoke earlier today, she mentioned it. Therefore, I was a little surprised with the bill.

However, upon reading the bill, I came away concerned as to what the goal of the bill was.

The bill purports to create a retirement bill of rights within the authority of the Parliament of Canada, which sounds, in principle at least, like something both myself and my party, the NDP, would be pleased to support wholeheartedly. In fact, we proposed, and the House passed previously, a seniors' charter in this place, yet the government has not implemented that.

The provisions of Bill C-574 would apply to retirement plans established by employers that were federally regulated. We heard the Bloc's concerns regarding provincial jurisdiction and companies such as Air Canada, the Canadian National Railways and Bell Canada.

The bill seeks to create a number of individual rights related to pension income and retirement, such as the right to accumulate sufficient pension income for retirement, the right to determine how and when pension income should be accumulated, the right to the full, accurate and timely disclosure of the risks, which is a very important part of the bill. However, I hear people in this place saying that these things already exist.

In principle, this sounds very good. Let us ensure that there is protection for seniors when they do make their investments. However, does this raise one nickel extra in pension value for seniors? I do not think so.

The clauses of the bill that brought about my concern, or kind of a wonderment if anything, are not so much to do with the bill's stated principles, but its lack of execution. As I read the bill, it seemed it must have been hastily put together, as if the drafters ran out of time and had to turn to an earlier draft.

Most of the bill's provisions are declaratory. For instance, it declares rights, but fails to amend appropriate legislation in order to establish them.

The bill calls for increased transparency with respect to the management of pension funds, even though most of these funds, again as the Bloc has indicated, are provincially regulated. It is a good thing again, certainly in principle, but Bill C-574 proposes no amendments to the Pension Benefits Standards Act, or to any other acts that would require amendment in order for the bill to accomplish its stated goals, such as the Canada pension plan, the Old Age Security Act or the Income Tax Act.

Members will know that the Pension Benefits Standards Act currently applies to pension plans of employees working for federally-regulated employers or businesses. Bill C-574 does not give any information nor clarifies how the rights created under the bill would apply to employers or employees regulated under the Pension Benefits Standards Act. The bill also does not propose any amendments to the Pension Benefits Standards Act.

Clause 4 of the bill states that every individual Canadian has the right to accumulate sufficient pension income in a retirement income plan, subject to any reasonable restrictions imposed by a federal law. That is in place now. These reasonable restrictions are not elaborated on nor the federal statutes that contain a number of the restrictions. Therefore, we are left to wonder just how these changes are purported to take place.

The bill is silent on defining what sufficient pension income means.

In the presentation of the bill, the member for York West talked about a goal of 70% of income, which is a goal that is lauded around the world, but very few countries, if any, reach that goal. However, what percentage of pre-retirement income do the Liberals feel is sufficient for Canadians to live a dignified retirement? Is it 60% Is it 50%? The bill does not tell us.

In addition, it seems the bill does not amend or refer to the Canada pension plan, the Old Age Security Act or the Income Tax Act, which also provide for pensions or contain provisions that regulate the amount an individual can transfer into a pension plan. One can only then assume, for example, that the maximum amount a person could transfer into an RRSP or the maximum contributions a Canadian could make to the Canada pension plan would not be changed by reason of Bill C-574.

Moreover the bill also would impose certain obligations on professionals in the financial services field who would administer retirement income plans or who would provide financial advice on retirement plans. Knowing that the financial services sector apart from banking is largely subject to provincial regulation, consequently it is not clear how this Parliament, through Bill C-574, could possibly regulate the financial service sectors.

For these reasons, it is difficult to understand the exact purpose of the bill and especially its financial implications when put into practice. For example, Air Canada has a retirement plan for its employees. If an individual decides to go to work for Air Canada, he or she would accept the work conditions and the benefits established under the collective agreement. It is not clear where the provisions of Bill C-574 would come into effect. Would the bill allow an individual to contribute more to Air Canada's retirement plan than what would have been provided under the employment contract or collective agreement? We do not know. It is difficult to understand how this could be done in a practical fashion.

In short, it seems to me that Bill C-574 should have been a motion. Nevertheless the NDP wants to encourage the other parties to work toward real reform on retirement income systems. In that spirit the, New Democrats will support Bill C-574 going to committee so we can take a closer look at actually what can be done with the bill.

In the meantime I would like to put forward some of the concrete proposals that we have put forward over the last two years such as eliminating seniors' poverty. The member for York West spoke of seniors' poverty. The poverty gap is about $700 million and that could be put forward by the government by increasing GIS to close that gap.

We have talked about strengthening CPP/QPP. Ninety-three per cent of Canadians are already members of CPP/QPP. We want to phase in a doubling of it.

A national system of workplace pension insurance would be self-financing. It would be a mandatory insurance system funded by the plan's sponsors with a payout of up to $2,500 a month.

Let us ensure that the companies in bankruptcies make good on the pensions they owe the workers. Today when companies go bankrupt, the shortfall in the workplace pension plan, which is called an unfunded liability, does not receive priority as a creditor. Workplace pensions are nothing less than unpaid deferred wages. Workers should have the right to receive these wages, especially when the company goes under.

Our Nortel act would put workplace pension plans in the same creditor category as bondholders and other investors.

In bankruptcies workplace pension plans may be wound up and converted into low interest annuities. Pensioners would often be better off if those plans lived on as “going concerns”. We suggested creating a facility adjacent or part of the CPP, which could manage it, to adopt these pension plans.

I have heard the Liberals of late talking about the orphan plans, so I am glad to hear they have been listening to us.

It is time for the government to acknowledge that pensions are deferred wages. These wages should be there in their entirety when an employee retires. They are not bonuses paid to the workers at the end of their working lives. They are part of an agreed upon compensation package for hours worked.

Retirement security has long been a priority of the NDP. In fact, we heard members talk a few minutes ago about 1966. In 1927 the Independent Labour Party, a precursor to the NDP, proposed the first old age pension.

People who have been in this place for a few years will remember that it was the NDP's Stanley Knowles who fought for the Canada pension plan, and it was a minority Liberal government that put that in. If I recall correctly, that was in 1966.

Our party members will continue to use our leverage in this place until such time as all seniors are able to live out their retirement years with the dignity they deserve, that they have earned as part of helping Canada grow to be the great place it is today.

I do not want to totally fault what is coming forward because the words in the bill are good. It is just the actions that are required to implement it. How do we get to the place where we can actually increase the living standard of seniors today, right now. In my mind that is an increased old age security and GIS to deal with the ones below the poverty line of which close to 300,000, or over 60%, are single women. For me, that has always been a national disgrace.

Luc Desnoyers Rivière-des-Mille-Îles, QC

Madam Speaker, Bill C-574, An Act to promote and strengthen the Canadian retirement income system, “creates a bill of rights for a retirement income system that promotes the goals of adequacy, transparency, affordability, equity, flexibility, security and accessibility for all Canadians”.

The bill introduced by the Liberal member for the Ontario riding of York West establishes a bill of rights that aims primarily to protect individuals who participate in pension plans, whether they are retired or still active in the workforce.

Bill C-574 protects various rights related to pension income, particularly the right to accumulate sufficient pension income and the right to receive complete and accurate information, in a timely fashion, when serious risks become known, specifically, a risk of non-payment or reduction in benefits.

The Bloc Québécois will be proposing an amendment to ensure respect for Quebec's jurisdiction. Private pension plans come under Quebec and provincial jurisdiction, with the exception of federally regulated industries like banking, communications and so on. The same is true of the Quebec pension plan.

The Bloc Québécois wants to avoid any confusion. We believe we must make the necessary amendments to make certain that this bill will not interfere with Quebec's areas of jurisdiction. The Bloc Québécois will propose an amendment to Bill C-574 to ensure that this bill targets only public or private pension plans under federal jurisdiction.

Furthermore, the introduction of this bill is a perfect opportunity to look at the issue of environmental, social and governance risk factors and respect for international treaties.

The Bloc Québécois believes that anyone who contributes to a pension plan cannot conduct a fair analysis of the risks involved unless they are informed of the company's environmental and social responsibility practices in the event that these have an impact on risk and performance.

This is supported by the Canada pension plan and the Caisse de dépôt et placement du Québec, which recognize how important it is for investors to have the information they need regarding the company's environmental, social and governance risk management.

“Corporate behaviour with respect to environmental, social and governance (ESG) factors can generally have a positive influence on long-term financial performance, recognizing that the importance of ESG factors varies across industries, geography and time.

Disclosure is the key that allows investors to better understand, evaluate and assess potential risk and return, including the potential impact of ESG factors on a company's performance.”

And so the Bloc Québécois is proposing the addition of one right, the right to receive information on the retirement fund manager's assessment of social, ethical and environmental criteria during the initial risk analysis for each investment.

Clause 9 states:

Every individual who participates in, contributes to or receives benefits from a retirement income plan shall be entitled to receive, in clear and concise language, all the information the individual requires to understand his or her rights, obligations and choices under the retirement income plan, including...

And this could be amended to include the following:

“Regular disclosure of the list of stocks the retirement fund manager has acquired for the retirement plan. This information may be included in the retirement fund manager's annual report.”

The elected members of the Bloc Québécois, who have always supported demands made by retirees and seniors in Quebec, will continue to support measures that help them.

In addition to numerous other actions we have taken, we introduced Bill C-290, which would offer compensation to shortchanged retirees who are seeing cuts to their pension funds because a former employer has gone bankrupt and is not fulfilling its responsibility to contribute to the pension fund.

The Bloc Québécois is confounded by the rejection by both the Liberals and the Conservatives of its Bill C-290 to protect the retirement income of employees of a bankrupt business.

Once again, the Liberals and the Conservatives are showing their profound indifference towards workers, especially pensioners.

The Bloc Québécois will ensure that pensioners are not ignored by the Conservative government. We have continued to offer the government a series of solutions to protect pensioners. In fact, we have put forward a solid plan with a number of measures to protect their income, one of which would have the federal government follow Quebec's lead and put bankrupt companies' pension plans into trusteeship, when they are under federal jurisdiction. This is done in Quebec, under the Supplemental Pension Plans Act, to prevent these pension funds being liquidated while the markets are at their lowest.

The Quebec pension plan is thus able to take over management of the assets of bankrupt companies' pension plans. The government guarantees the payment of benefits owing to affected employees. However, this amount is adjusted to the solvency level of the pension plans, or their ability to pay all benefits to which contributing employees are entitled.

We have also proposed that preferred creditor status be given to disabled employees who lose their benefits due to a bankruptcy. In times of economic crisis, the declining value of securities diminishes the value of pension funds. If a company goes bankrupt during a downturn, the pension fund will be unable to meet its obligations towards its pensioners. This is not the result of the company defaulting on its normal payments to the pension fund.

Beneficiaries of this type of pension plan provided by companies in financial difficulty have often called for the laws governing bankruptcy to be revised so that pension funds would become preferred creditors in the event of bankruptcy.

The amendment to the investment act in order to maintain the threshold for automatic review of foreign acquisitions at $300 million would ensure that major corporations, like Nortel for instance, are not sold off at the expense of its retired workers. Nortel was sold off piece by piece. The foreign investment act does not force the government to review those transactions. In the case of Nortel, it was a very costly decision, and Nortel's Canadian assets could wind up in the United States and the United Kingdom.

Lastly, I would like to talk about improving the guaranteed income supplement. We are extremely concerned about the fact that over 80,000 Quebec seniors are living below the low-income line. The maximum GIS allowance is not even enough to get seniors out of poverty.

The Bloc Québécois has been working very hard to improve the GIS in order to: increase the guaranteed income supplement by $110 per month; continue paying both pension and survivor benefits, for a period of six months, to a surviving spouse; automatically enrol people over 65 who are eligible for the GIS; ensure full retroactive payment of the GIS for all those who were shortchanged; and increase the surviving spouse's allowance to the same amount as the GIS.

As for the thousands of people who rely on old age security, the federal government has unfairly deprived, and is still depriving, these people of the money owing to them. In order to access the guaranteed income supplement, one must apply. Tens of thousands of seniors in Quebec have been cheated because they did not apply for the GIS as soon as they were eligible.

In closing, the Bloc Québécois supports Bill C-574 in principle , but believes it is important to propose various amendments in order to ensure, above all, that it applies only to federally regulated pensions plans.