Retirement Income Bill of Rights

An Act to promote and strengthen the Canadian retirement income system

This bill was last introduced in the 40th Parliament, 3rd Session, which ended in March 2011.

Sponsor

Judy Sgro  Liberal

Introduced as a private member’s bill. (These don’t often become law.)

Status

In committee (House), as of Feb. 4, 2011
(This bill did not become law.)

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

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.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Speaker's Ruling
Retirement Income Bill of Rights
Private Members' Business

February 4th, 2011 / 1:30 p.m.
See context

Conservative

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.

Second Reading
Retirement Income Bill of Rights
Private Members' Business

February 4th, 2011 / 1:35 p.m.
See context

Saint Boniface
Manitoba

Conservative

Shelly Glover Parliamentary Secretary to the Minister of Finance

Mr. Speaker, I am pleased to speak today to the proposal on pension and retirement income issues and speak to what our Conservative government has accomplished in this important area.

From the onset, let me state that our government shares the deep-rooted concerns of many Canadians regarding their retirement security. We understand the importance of a secure and dignified retirement, especially after a lifetime spent building our wonderful country. For that reason, we have been aggressively working on improving our retirement income system. Indeed, we have already taken major action to strengthen Canada's retirement income system.

What have we done? First, in recognition of their lifelong contributions to our country and our government's core belief that Canadians should keep more of their hard-earned money, we dramatically lowered the tax bill for our seniors and pensioners.

Since forming the government in 2006, our record includes more than $2 billion in annual targeted tax relief, translating into $3,000 in tax relief for a typical senior couple. This includes increasing the age credit amount by $2,000, doubling the amount of income eligible for the pension income credit, increasing the age limit for maturing pensions and registered retirement savings plans to 71, introducing the tax free savings account, which is particularly beneficial to seniors as it helps them to meet their ongoing savings needs on a tax efficient basis after they are no longer able to contribute to an RRSP, and pension income splitting for 2007 and subsequent taxation years.

What is more, our record also includes important improvements to several specific retirement income supports, such as dramatically increasing the amount working seniors can earn before facing a clawback under their guaranteed income supplement, allowing them to keep more of their hard-earned money. We increased flexibility for seniors and older workers with federally regulated pension assets that are held in life income funds.

Second, we took major steps to reform the legislative and regulatory framework respecting federally regulated private pension plans. Indeed, this represented the most significant reforms in nearly 25 years.

Announced in October 2009, after extensive cross-country and online public consultations held in the months beforehand, the reforms included enhancing protections for plan members, allowing sponsors to better manage their funding obligations, making it easier for participants to negotiate changes to their pension arrangements, improving the framework for defined contribution and negotiated contribution plans, and modernizing the investment rules. Those key reforms were warmly applauded across Canada.

A diverse and broad group of public interest groups ranging from the National Association of Federal Retirees; the Association of Canadian Pension Management; the Canadian Institute of Actuaries; CARP, Canada's association for the 50-plus; the Common Front for Retirement Security; the Bell Pensioners' Group; the Canadian Life and Health Insurance Association Inc.; and even the Canadian Labour Congress. all welcomed and expressed their pleasure with them.

However, those reforms to federally regulated private pension plans were only one step in a much larger process.

That leads to the third area where we have focused, as we work to improve retirement security and pensions in Canada, and that is working with our provincial and territorial partners.

While many Canadians may not realize it, the vast majority of pension plans, approximately 90% in Canada, are provincially regulated. In other words, the federal government only has the constitutional authority to make laws relating to the private pension plans of federally regulated employees, such as airlines, chartered banks and others which employ less than one in ten workers in Canada. That is why, to address larger pan-Canadian concerns about pensions, we must, and have been, examining the relevant issues with our provincial and territorial counterparts in a co-operative and constructive manner, not by imposing unilateral or fragmented solutions. We have demonstrated that co-operation by establishing a joint research working group on retirement income adequacy and by holding numerous federal-provincial-territorial summits on the issue are important.

We also believe that the Canadian public has a fundamental right to be involved in and at the centre of this debate. That is why we ensured that Canadians from coast to coast had the opportunity to make their voices heard in person and online.

From March to May 2010, for instance, we invited public input, through round table discussions, online consultations and public town hall meetings, to gather feedback directly from Canadians. Following those extensive consultations, the findings strongly suggested we explore opportunities to build further on the strengths of Canada's retirement income system.

As a result, we agreed, along with provincial and territorial governments, to explore a set of innovative improvements. I am happy to report this past December, at the last federal-provincial-territorial finance ministers' summit, we reached a unanimous agreement on a new, innovative retirement savings tool, the pooled registered pension plan or, as we also call it, PRPP.

Millions of Canadians do not have access to private sector pension plans because small businesses in Canada face significant challenges in offering pension plans to their employees or because they are self-employed.

The proposed new PRPP will allow these businesses to team up and pool their resources, using a registered financial institution, and allow the self-employed to participate. As a result, millions of Canadians who either work for small and medium-sized businesses or who are self-employed would have access to good, affordable, secure pension plans for the very first time.

The PRPP will be the biggest step forward for retirement security since we introduced the tax-free savings account. It is little wonder we have heard such positive feedback, with support from each provincial and territorial government.

For instance, Nova Scotia's NDP finance minister, Graham Steele, remarked, “There seems to be practically unanimity among the provinces” of the PRPP proposal. “It's a good idea that will now be pursued”.

The Canadian Federation of Independent Business added:

—[PRPP] has significant potential to improve the mix of retirement savings options for smaller firms and self-employed entrepreneurs.

In the months ahead, we will work with our provincial and territorial partners to ensure this proposal meets the needs of employees and employers. Clearly, our Conservative government is taking a leadership role in addressing the concerns surrounding retirement income adequacy.

That brings us to today's proposal for a broad bill of rights related to the retirement income system.

First, it is clear that the proposal has some significant flaws that raise significant questions about its effectiveness. For instance, the federal government would have limited capacity to enforce these rights on behalf of the vast majority of Canadian workers as they fall under provincial jurisdiction. What is more, it does appear little consultations with the provinces and territories were conducted in the drafting of this proposal.

Second, the proposal would essentially give every person the right to shelter, on a tax-free basis, as much retirement income they consider adequate.

Such an open-ended statement has raised concerns about excessive and costly tax avoidance by the very wealthy that would ultimately jeopardize the government's ability to fund many retirement programs on which the needy depend.

Nevertheless, our Conservative government has clearly demonstrated that when it comes to pension and retirement income security matters, we are open to discussion, especially discussion that is measured, collaborative and responsible.

To illustrate that commitment, our government is willing to recommend this proposal, despite its flaws, and that it be further examined in depth at committee.

Second Reading
Retirement Income Bill of Rights
Private Members' Business

February 4th, 2011 / 1:45 p.m.
See context

NDP

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.

Second Reading
Retirement Income Bill of Rights
Private Members' Business

February 4th, 2011 / 1:55 p.m.
See context

Liberal

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.

Second Reading
Retirement Income Bill of Rights
Private Members' Business

February 4th, 2011 / 2:05 p.m.
See context

Liberal

Judy Sgro York West, ON

Mr. Speaker, I want to thank all my colleagues for their support on the bill today and for your ruling on the royal recommendation. I had actually forgot it had been raised at an earlier time. I appreciate that the decision was to allow it to go forward to committee subject to everyone's support.

Anyone who has been studying the issue of pension reform, and I think in this last year or two many have been doing that, would know that we have learned about defined benefits and the benefits of what a defined benefit pension plan means. Those who have defined benefit plans have five to seven times higher retirement income than other people. That may be great for all those who have defined benefit plans, but we have to stop and think about those who do not have access to them and what we can do to level the playing field.

Put another way, those who have the opportunity to save effectively in things like defined benefits for retirement have much more gold in their golden years. That is what this is all about. That is precisely why Bill C-574 is so important today.

Traditionally, defined benefit plans are available only to public sector workers and to a very small minority of private sector workers in Canada. This means that only those working for very large companies or for the government have access to this type of retirement plan. We, as MPs, are very fortunate to have access to that. A short look at just what that means shows us how lucky we are to have that opportunity. We should reinforce our desire to ensure other Canadians have better opportunities for retirement. This is clearly wrong and Bill C-574 is intended to be the first step toward correcting that inequity.

This legislation is the first of its kind ever proposed to ensure future seniors have better nest eggs and the retirement income security they will need for all future years. In broad strokes, the bill would create substantive justiciable rights relating to retirement income, as my colleague has indicated, giving every person a chance to accumulate retirement income and promote good plan administration.

We have heard a lot in the last two years about the pensions plans of Nortel and other companies and what has happened to people's retirement income. It really calls on all of us to do what we can to start to put things in place that protect retirement income.

I want to take a moment to underscore this final point because it is one of the most important.

Bill C-574 would set out in law the end goals to which we should aspire legislatively as they relate to retirement income. It would legally compel both the current federal government and future governments to take real action to promote, enhance and preserve retirement income security, coverage and adequacy.

For years, successive governments have set out their plans to help enhance pensions in Canada, but they have done so without any sort of long-term road map. Clearly we have learned over the last several years the need for a long-term road map, so that in the next 20 years when people retire, they have adequate income. Otherwise, it always falls back to the provincial, municipal and federal governments to provide the funds.

That still does not give people a decent level of living. It still means that they are living just at minimum. If we can encourage the changes necessary through legislation and the Income Tax Act to provide the vehicle to protect their money, to ensure they understand full disclosure from the various companies that promote products for retirement and do everything we can to encourage people to put money away, it would certainly benefit all seniors in the future and us as a country. We would have a richer country. When we all reach the age of retirement, we will have what we need for successful and fruitful retirement, which is a lot of gold in the golden years. However, that will take all of us.

Again, I thank all my colleagues for their support. I look forward to future discussions on Bill C-574.

Retirement Income Bill of Rights
Private Members' Business

November 23rd, 2010 / 6:15 p.m.
See context

Liberal

Judy Sgro York West, ON

moved that Bill C-574, An Act to promote and strengthen the Canadian retirement income system, be read the second time and referred to a committee.

Mr. Speaker, I am pleased to be here today to kick off the first hour of debate on Bill C-574, something that I prefer to call the pension income bill of rights.

While Bill C-574 is a private member's bill, and my first, it is also a package of proposals that has been extensively researched from a legal perspective and thoroughly vetted. It is intended to address a series of specific systemic and practical challenges facing Canada's various pension systems, both public and private.

As the official opposition critic for seniors and pensions, I have travelled across this country and I have spoken to thousands of Canadians on this very subject. There are many reasons why, for the most part, the majority of people are not setting aside adequate savings for their retirement, and I fear that this trend will only grow in the years ahead.

Already we know that more than 200,000 Canadians over the age of 65 live well below the low income poverty line. Put another way, after a lifetime of working to raise their families and to 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 sad, and for many, nearly unbelievable, it is a daily reality for far too many. These financial challenges are compounded even further when one factors in elements such as ill health, geographic isolation, or even the loss of a spouse. This means that the most vulnerable are often the ones facing the greatest risk exposure and suffering to the greatest extent.

New Canadians, women, those with the lowest amounts of formal education, native Canadians, and those living in rural, remote or isolated regions of the country are among those facing the most difficulty. It is these Canadians who can expect the least amount in their golden years.

Statistics Canada tells us that Canada's population over the age of 65 could reach an unprecedented 10.9 million by 2036. Accordingly, we need to start addressing these pension shortfalls today if we are to prevent a full-blown crisis in the years ahead. The question though is how. How shall we address this?

When Lester Pearson first established the Canada pension plan in 1966, people said it could not be done. Three decades later, when Jean Chrétien and Paul Martin made the changes needed to put the CPP on stable financial footing, many said it was a fool's errand. The debates were fierce at that time, but they were fundamental to the financial future of millions. All of those were vehemently opposed by the Conservatives, by the way. Perhaps one day we will look back on this debate and say the same thing.

Regardless of the genesis and tone of those past debates, the outcome is not in dispute. Canada now has a good public pension base, which is composed of the Canada pension plan and the QPP, the old age security pension, and 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 has proven to be significantly less.

Current economics suggest that this will not be enough for most Canadians. In fact, it is not enough for most Canadians today. They need private retirement savings to survive. Retirement income security, adequacy and coverage are growing problems that urgently require the attention of business, labour, individual citizens, and governments at all levels.

Seventy-five per cent of Canadians working in the private sector do not have a pension plan at all. They are clearly not saving enough and are effectively prevented from accumulating the same retirement income as their public sector counterparts, including all of us.

With the 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. I choose the latter, and that is why I have introduced Bill C-574.

As I have said, 30% is an okay base, but it still leaves a shortfall for most people of 70% of their income. For many, the attainment of that 70% is insurmountable for many reasons. In addition to the rising cost of living, there are also systemic barriers that stand between hard-working Canadians and that much-needed 70%.

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.

Despite this apparent solution, right now the Income Tax Act says that individuals cannot have a generous defined benefit pension plan unless they have an employer who provides it for them. I think that is wrong, and it places those without an employer at a disadvantage. Why should a farmer, a homemaker or a small business owner not receive a pension plan? Bill C-574 would help to level that playing field.

In essence, clauses 4 to 6 of Bill C-574 would guarantee equality of opportunity by providing that a federal law that has the effect of restricting an individual's right to join a pension plan or the flexibility to make the contributions necessary to accumulate an adequate retirement income would be in violation of this bill.

Put another way, if Bill C-574 becomes law it will be illegal to prevent people without cause from joining a pension plan or to restrict their right to make contributions, subject to reasonable restrictions that must apply to all individuals equally.

I want to make sure that we eliminate every possible barrier currently preventing the self-employed, farmers, stay-at-home parents and those engaged in the workforce from saving effectively for retirement. Today, right now, if MPs from all political parties band together and pass Bill C-574, we will have taken the next step in securing pension security, adequacy and coverage for all Canadians.

It is with these basic concepts foremost in my mind that I speak today to this bill. Yes, Bill C-574 is about many things: financial literacy, pension security and even basic fairness. But more important, the debate could highlight what the legislation is not about.

I think it is fair to say that Bill C-574 is not about partisan posturing or brinkmanship. Bill C-574 is about so much more than that.

From my perspective, my goals are simple: to help ensure that every Canadian has access to effective retirement savings mechanisms; to empower people with detailed, up to date, conflict-free information about their financial future; and to acknowledge that universal dignity in retirement is more than just a nice extra. It is a goal to which we all as legislators should aspire in the years ahead.

With this direction in mind, I am pleased to openly say that the Parliamentary Secretary to the Minister of Finance has signalled that he is prepared to co-operatively explore this matter. While there will almost certainly be differences that we need to work on, I am encouraged that we can at least agree on the stated objectives of the bill. These objectives may be simple but they are far from simplistic.

This legislation is the first of its kind ever proposed to ensure that our seniors have better nest eggs and the retirement income security that they need.

In broad strokes, the bill seeks to do a few general things: 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 that they will need about their plans; and to set out in law the goals to which we aspire legislatively as they relate to retirement income.

Members might not fully appreciate why these measures are so essential, but I would submit that the recent examples of why they are needed are all around us.

When Canadian technology giant Nortel announced it would seek to liquidate its assets, company pension plans and long-term disability benefits fell into chaos. Thousands of hard-working Canadians suddenly found themselves thrust into financial uncertainty despite having contributed to a workplace pension regime for several years.

Last week, the House industry committee heard that many of these problems could have been prevented if only pensioners had access to some basic financial know-how.

Bill C-574 promotes increased financial literacy for individuals participating in a retirement income plan in three ways.

First, it requires clear disclosure of the risk the individual has in the plan relating to benefit security and conflicts of interest.

Second, it requires regular plain-language disclosure to the individual of his or her rights, obligations and options relating to the plan.

Third, it requires that federal laws governing retirement income plans promote access to training in financial literacy and retirement planning.

It would seem that some of these measures are long overdue, especially for a former Nortel employee.

I would never want to frame Bill C-574 as a response to the Nortel situation. Quite the contrary, Bill C-574 is more inclusive and more far-reaching than that.

In fact, there were many reasons why I opted to present Bill C-574, but in simple terms, I presented it because it is the right thing to do. Bill C-574 is about helping people and protecting pensions for the next generations.

In 1960, when the Bill of Rights was passed by Canada's Parliament, it was heralded as a historic first step towards establishing an important slate of Canadian rights. In that same vein, Bill C-574 strives to be that first step towards ensuring pension security, coverage and adequacy. I have even sought to incorporate some of the language used in the Bill of Rights in an effort to strike a balance between goals to which we aspire and rights that must be protected.

If I had to summarize Bill C-574 in 50 words or less, I would have to say that Bill C-574 is about choice, fairness and flexibility. It is not about tearing down pensions; it is about elevating everyone to the same level. Every Canadian should have the right to a financially secure retirement, and I believe this proposal sets the stage for that to become a reality.

In the days ahead I look forward to working with colleagues of all parties. I welcome any suggestions that can help to strengthen Bill C-574 while at the same time staying true to the stated goals of the legislative proposal.

In the meantime, I would urge each member of the House to consider supporting the bill so that it can be sent to committee for additional study and consideration. Pensions are not a matter for partisan consideration and neither is Bill C-574. Canadians are counting on us to do the right thing.

I believe it is very much a motherhood issue with basic principles that I think all of us espouse. It is clearly one that will start to protect pensions in the future and better prepare our children and other Canadians so that they are better prepared and when retirement comes we are not hearing about 200,000 people still living below the poverty line. Everybody should be able to contribute, no matter what small amount, into a pension fund that would be there for them when they need it.

Retirement Income Bill of Rights
Private Members' Business

November 23rd, 2010 / 6:25 p.m.
See context

Conservative

Mike Wallace Burlington, ON

Mr. Speaker, I want to thank the member for York West for bringing her private member's bill forward, the pension income bill of rights.

A month ago or so the member sent out a media kit that talked about the bill. As she knows, about 90% of pensions are dealt with at the provincial level, leaving about 10% at the federal level.

It does require a tremendous amount of cooperation between the federal and provincial governments across the country. The parliamentary secretary has been across the country on pension consultations and the Conservative government has been working very hard on that.

Has the member presented the proposals that are in the bill to the provincial houses across the country? Did the member get any response from the provinces, that we can see, on how they feel about the bill of rights that is proposed in this bill?

Retirement Income Bill of Rights
Private Members' Business

November 23rd, 2010 / 6:30 p.m.
See context

Liberal

Judy Sgro York West, ON

Mr. Speaker, the whole issue of pension security and adequacy in the coverage is an issue that I think involves all governments, whether federal or provincial. It is a partnership in many areas. Our colleague has been travelling the country as well. Clearly we know that provinces are looking to find ways. Just imagine, in 26 years there will be 10.9 million seniors. Just imagine what that would do to the fiscal capacity of our country.

It is imperative, and I know the provinces are very much concerned with the same issue. As we continue to have discussions, my bill of rights very much establishes the goals and the principles to which we should all be aspiring. Putting a magnifying glass on the issue of pensions will help us to start talking about it. We have not talked about pensions in Parliament for well over 20 years. We talk about them every once in a while. Unfortunately, the reason we are talking about the issue is that it has a lot to do with the bankruptcies and things that have happened to many companies this year, such as AbitibiBowater and others. They have really raised the profile of the issue, so that I am sure that anyone who has spent any time looking into that issue will say we had better start doing something. We had better start making some changes so that eventually people will be able to have saved enough and have a sufficient income to retire on.

Retirement Income Bill of Rights
Private Members' Business

November 23rd, 2010 / 6:30 p.m.
See context

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Mr. Speaker, I have travelled the country. The member has talked about people she visited. I am really quite surprised at Bill C-574 because the kind of things we believe are needed now are an increase to old age security and an increase to the guaranteed income supplement and, of course, in this House for the last two years we have been talking about increasing the CPP. What strikes me is that Bill C-574 proposes no amendments to the Pension Benefits Standards Act and no changes in the Canada pension plan, old age security or the Income Tax Act.

I do not see how there is going to be a financial benefit for anybody if we do not change those pieces of legislation.

The reality is that there are people who are suffering right now. The member herself talked about 200,000 seniors living in poverty. I agree with her. We need action now, and this just seems to go in circles.

Retirement Income Bill of Rights
Private Members' Business

November 23rd, 2010 / 6:30 p.m.
See context

Liberal

Judy Sgro York West, ON

Mr. Speaker, the bill is very direct. It is about a bill of rights. It is what we aspire to. It is what we all, as Canadians, should be aspiring to so that retirement gives us sufficient income and also allows us to retire with dignity.

Why should we become 65 years old and have to turn around and scramble because we are suddenly having to live on $12,000 or $15,000 or $20,000 a year? Just imagine having to do that.

The bill is not focusing on bringing in phoney legislation that talks about raising the old age security or raising a whole bunch of things that we know darn well are impractical and not necessarily going to happen. It will happen as we can afford it.

I hope we are going to see increases to the OAS in the next budget. We need it. I hope we increase the contributions to the CPP and increase the contributions to the GIS. All of those are things that I believe very much are necessary to do.

My bill is not concentrating on those. My bill is concentrating on establishing the basic principles of a bill of rights stating that everybody has the right to be treated with dignity and respect and to be able to retire. It then comes onto us as legislators to do what is necessary to follow through with a bill of rights that we would all support, I would hope, and then we would ensure that we build on top of that.

Retirement Income Bill of Rights
Private Members' Business

November 23rd, 2010 / 6:30 p.m.
See context

Macleod
Alberta

Conservative

Ted Menzies Parliamentary Secretary to the Minister of Finance

Mr. Speaker, I am pleased to have the opportunity to speak to today's Liberal proposal for a broad bill of rights related to the retirement income system.

I want to acknowledge the passion that the hon. member for York West brings to this serious debate. We hear it when we are in our constituencies. It is a very important issue and I am sure all members sitting here will continue the debate later on during a take note debate when we will be able to debate the issues. We may differ on some of the solutions but I think we all are on the same page as to the problem that our seniors are facing.

As someone closely involved in the push to improve retirement income and pension security for Canadians, it would be appropriate to step back and look at the broader picture as we start this debate today.

First and foremost, I want to acknowledge that this is an issue all parliamentarians care deeply about. As I say, although we might not all agree on the exact specific solutions, I would think that we are all working for the same goal, which is helping to ensure a secure and dignified retirement for hard-working Canadians.

Through numerous cross-country consultations I have talked to many Canadians and heard too many challenging personal stories not to realize that this is an issue too important to get wrong. Our Conservative government has devoted considerable effort on the retirement security issue in order to get it right. Indeed, we have been engaged in a very serious discussion with Canadians on pension and retirement income security issues over the past few years.

First, we started by looking at our own backyard, so to speak. We undertook a comprehensive review of the framework governing pensions, those pensions under federal jurisdiction, a review that had not occurred since 1985, nearly 25 years ago. We also ensured that the review was as open as possible. We publicly released a major research paper on the legislative and regulatory framework of federally regulated private pension plans for comment in early 2009. We followed that up through March into May of 2009 with extensive cross-country and online public consultations open to everyone.

I am happy to report that we received tremendous feedback, feedback that led to comprehensive reforms to improve the federal pension framework, reforms that will, first, help protect pensioners by requiring companies to fully fund pension benefits on planned termination; second, restrict an employer's ability to take a contribution holiday; third, make pensions more stable; fourth, give pensioners more negotiating powers; fifth, modernize investment rules for pensions; and many more.

I note that the majority of those reforms have already been put in place through legislation and regulation. What is more, many of the few outstanding reforms are actually before Parliament right now as part of the sustaining Canada's economic recovery act.

However, this reform is only one step in a much larger process to help pensioners and seniors. Another aspect is ensuring seniors keep more of their hard-earned money. That is why our Conservative government has dramatically lowered the federal tax bill for seniors and pensions since 2006. Indeed, we are providing nearly $2 billion annually in tax relief to seniors and pensioners, including increasing the age credit amount by $2,000, increasing the age limit for maturing pensions and registered retirement savings plans to 71, introducing pension income splitting and doubling the amount of income eligible for the pension income credit.

However, we recognize that more is needed. We recognize that there are larger pan-Canadian concerns that can only be addressed nationally, working with the provinces and the territories.

I should note that most pension plans are actually provincially regulated. In fact, only approximately 10% are federally regulated. For that reason, we have long recognized that tackling the larger retirement income issues must involve federal, provincial and territorial governments.

Our Conservative government has taken the leadership needed to start a serious and public pan-Canadian discussion, one that has been approached by all with the gravity it deserves.

In the words of a recent Toronto Star editorial:

--governments at all levels are answering the call from working Canadians for a serious dialogue—and action—on pension reform.

For example, we set up a joint federal-provincial research working group with respected academic Dr. Jack Mintz as director of research to conduct an in-depth examination of retirement income adequacy. The group's findings, made publicly available, were presented at the finance ministers' meeting in December 2009, where we agreed with our provincial and territorial partners to proceed with detailed analysis of areas to improve Canada's retirement income system. Again, we did not do so behind closed doors. Rather, we invited public comment to gather input directly from Canadians.

This research and these public consultations suggested we explore a series of innovative proposals to build further on the strengths of Canada's retirement income system. It also strongly suggested that we rule out certain other proposals, including a supplemental Canada pension currently advocated by the Liberal Party.

The consensus of governments and public interest groups from across the political spectrum has been that this would be costly, ineffective and, ultimately, a misguided solution.

In the words of Ontario's Liberal minister of finance, Dwight Duncan:

We are rejecting the notion of a supplemental, voluntary national plan for a variety of reasons...It’s very costly to set up and administer.

Nevertheless, later this year we will meet with provincial and territorial governments to discuss effective and affordable solutions.

The road ahead will likely include more discussions between Canadians and governments at all levels as these issues are complex. We cannot force a decision without understanding the long-term implications for both Canadians and the Canadian economy.

We need to get this right. We need to get this right together, employees, employers, federal governments and provincial and territorial governments. Our decisions need to be the right ones, not only for today but for tomorrow as well. This will take hard work, careful consideration, compromise on all sides and time. It will also take the will to get it done.

People can rest assured that our Conservative government remains committed to improving the retirement income system in our country. We may not always agree on the specific solution but I would like to think that we share the same goal of ensuring we have a strong and sustainable retirement income system for the benefit of all Canadians. This issue is too important for too many Canadians not to.

In that spirit, with respect to the latest Liberal proposal outlined here today, as I mentioned before, this is an extremely broad and all-encompassing bill of rights. The rights touch on numerous generalities, such as adequacy, transparency, affordability, equity, flexibility, security and accessibility, without offering all of the details that are necessary.

While largely an inoffensive list, it does seemingly suggest the complete scrapping of any limits on how much income Canadians can shelter from taxes for their retirement. Not only would something as radical as that carry a hefty cost, it would also primarily benefit very wealthy high income Canadians.

Nevertheless, in spite of some flaws, as we have demonstrated over the course of the past few years, we are always open to discussing and looking at retirement income issues and proposals.

As a result, we will support sending this proposal to committee for further discussion and examination.

Retirement Income Bill of Rights
Private Members' Business

November 23rd, 2010 / 6:40 p.m.
See context

Bloc

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.

Retirement Income Bill of Rights
Private Members' Business

November 23rd, 2010 / 6:50 p.m.
See context

NDP

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.

Retirement Income Bill of Rights
Private Members' Business

November 23rd, 2010 / 7 p.m.
See context

Liberal

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.

Retirement Income Bill of Rights
Routine Proceedings

October 1st, 2010 / 10:35 a.m.
See context

Liberal

Judy Sgro York West, ON

moved for leave to introduce Bill C-574, An Act to promote and strengthen the Canadian retirement income system.

Madam Speaker, since the Mackenzie King government first introduced the Old Age Pension Act 83 years ago, Liberals have fostered a long history of creating, enhancing and expanding pensions available to Canadian seniors. From old age security, to the CPP and the supplement, we understand the extreme importance of protecting and preserving pension security, adequacy and coverage for all Canadians.

Today I am pleased to present a bill called, “an act to promote and strengthen the Canadian retirement income system”, or as I like to call it, “the pension income bill of rights”. I am seeking 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. Too often financial illiteracy, inadequate opportunity and economic instability strip away the hard-earned savings of our seniors, and that must stop.

This is the first bill of its kind ever proposed to better protect our seniors and their nest eggs. I am proud to present it today.

(Motions deemed adopted, bill read the first time and printed)