Bill C-574 (Historical)

Retirement Income Bill of Rights

An Act to promote and strengthen the Canadian retirement income system

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.

Retirement Income Bill of Rights

[Judy Sgro, Liberal, York West, ON]

moved that Bill C-513, 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 very pleased to have an opportunity to discuss an issue that I think is critically important to Canadians and one that I have been involved in for some time, especially as the critic for seniors, pensions and the status of women, which I had previously held. I had an opportunity to talk to countless Canadians.

People who are seniors today talked to me about their struggles and how difficult it was to make ends meet. I talked to people who were in their fifties who said they don't have any ability to save money. It's not that they don't have it, but they don't have anywhere to put it. They don't work for a company that has a pension plan, so they put some into RRSPs but in many cases that's not a pension plan either. Unless they choose to work for the government or some of our major employers that provide a pension plan to which they as well as the employer can contribute, many Canadians are simply out of luck and do not have that opportunity.

Another part of this whole equation and discussion is the issue of the impact on many small companies that have a responsibility and would like to have a pension plan for their employees, but it is far too expensive. They are small companies that are trying to ensure they are able to employ people. We clearly do not want to have an impact on their businesses and deter them from being successful.

I heard that from all different equations. I heard it from the middle-aged.

I did not hear anything from the young folks who are in their thirties because they really think that the government is going to take care of them. When I would say to them, “When you think the government's going to take of you, that means you may be living on $1,500, $1,600, maybe $2,000, if you are really lucky”, they were quite taken aback. They thought that the government had a pension for them. We have old age security and our Canada pension plan. They thought it would be enough. It is not enough.

I think part of our role as government, as parliamentarians, is to ensure that people understand that we cannot sit back and wait for government to take care of us. We have to be establishing a plan. We have to be contributing. It is very difficult for those in a low-income bracket.

However, we have a guaranteed income supplement that was brought in by a Liberal government, as was the old age security, as was the Canada pension plan. However, this is not about partisan politics tonight. This is about trying to move forward to recognize the challenges that are facing Canadians and to help them start to plan.

Financial literacy is a big issue that we will hear more about as I go on with this speech. Canadians are being affected all the time because they have not spent enough time learning what pensions are and why it is important to contribute, as well as finding the opportunities to contribute. That is a major concern.

When I introduced the bill in our last Parliament, it had the support of all political parties in the House. I want to thank the member for Hamilton East—Stoney Creek, in particular, and the member for Macleod, both of whom set aside partisan differences and supported the bill because it was the right thing to do.

While the bill was lost when the election was called, I am hopeful that the MPs in this Parliament will use the same sense of this not being about partisan politics or knocking anyone. It is about trying to think of a future and what we can do to make a difference in the lives of many people.

For clarity, Bill C-513 is exactly the same as Bill C-574. Not one word has changed.

However, I would like to be clear. I am not asking members' support for the sake of an ego or anything else. I am asking for your support so people such as Ray and Dawn-Marie Brown can get the help they need.

For those who did not happen to read Saturday's Financial Post, I would urge them to take a look at the Barbara Shecter story. It is just one small example of some of the challenges that are facing Canadians today. The story tells of how Ray and Dawn-Marie Brown tried to put money away for retirement, but because of financial illiteracy and financial counsel that was not truly in their best interests, which has to stop, they now have the major problem of dealing with a huge debt they took on thinking it was going to help them in their retirement.

Canadians are urged to put their money away for retirement if they have some, but investing is not as intuitive as the industry rhetoric might indicate and good advice is hard to find. The Browns thought they had good advice. It came from a reputable firm. However, $200,000 later, for them it was clearly not good advice.

Worse yet, anyone who is studying the issue of pension reform knows that individuals in a defined benefit pension arrangement accumulate five to seven times more retirement income than those who are not. Put another way, those who have the opportunity to save effectively for retirement have much more gold in their golden years. We as parliamentarians have been very fortunate to be part of a defined benefit plan. However, fewer and fewer people in this country have that opportunity. This should not be about bringing people down to the bottom level. Rather, it should be about how we can increase and provide opportunities for more Canadians to have access to a good pension plan. That is exactly why Bill C-513 is so important.

Traditionally, defined benefit plans are available only to public sector workers and a small minority of private sector workers. That means only those working for large companies or the government have access to this type of retirement plan. Everyone else is forced to go it alone in the markets and face the challenge, as Ray and Dawn-Marie did when they were trying to find a proper investment counsellor to help them invest for their coming 20 or 30 years. That is wrong and Bill C-513 is intended to be the first step toward correcting that inequity.

In a country like Canada, it is unacceptable that senior citizens would be subjected to poverty and squalor during their retirement years. It falls upon all of us as parliamentarians to do what we can to provide opportunities for people to save their money for 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. Private and public retirement saving options must be explored and integrated more effectively with one another. We know that systems, such as the guaranteed income supplement, the Canadian pension plan and the Old Age Security Act are important, but they are only elements of a much larger strategy. That is again where Bill C-513 comes into play.

The legislation is the first of its kind proposed to ensure that our future seniors have better nest eggs and the retirement income security that they need. In broad strokes, the bill would create substantive, justiciable rights relating to retirement income, give every person a chance to accumulate retirement income, promote good plan administration, and set out in law the pension reform goals to which we aspire legislatively. This is about establishing goals. This is about a first step. This is not saying that we will increase pensions or increase anything. This is about setting the goals to which Canadians and governments need to aspire to make sure that the vehicles needed for people to be able to save some money are there.

The government has introduced the PPRP plan. We have suggested the supplementary Canada pension plan, and there are other suggestions out there. However, there needs to be a vehicle for Canadians to be able to invest and save in a well-administered and safe plan. Whatever that plan would be is not in the bill. These are the first steps of a bill of rights that would start to establish the goals that I think government should have.

I want to take a moment to underscore that final point because it may be one of the most important. Bill C-513 would set out in law only the 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 map. Bill C-513 can be that road map.

This bill of rights is for pension income. It recognizes that a strong retirement income system is essential to the well-being of Canadians and to the overall health of our economy. It recognizes that the Canadian retirement income system is built on a combination of personal, public and private options. It affirms that we have the right to a retirement income system that promotes adequacy, transparency, affordability and equity. It also enshrines these principles in law, while respecting Parliament's constitutional limitations.

To me, and to the hundreds of pensioners with whom I have consulted, pension reform is as fundamental as motherhood. Canadian seniors, particularly the 300,000 who now live below the poverty line, are tired of struggling to make ends meet. They do not want their families and kids to have to do the same thing. Seniors should not be forced to decide between medicine and food or shelter and heat. Unfortunately, we do have certain seniors who for various reasons are in that situation. I do not think any of us want to see that continue. After all, today's seniors are yesterday's labour force, yesterday's caregivers and yesterday's builders of the economy.

If we are going to talk about consumers today, we need to remember to look beyond their current spending abilities. They carried this country through wars, depression and countless other times of difficulty, and they did it while working to raise a family and while building the social programs that we so value today. They deserve better than to be relegated to a life of poverty. It is within our power to give them and their children what they deserve.

Compassion, consideration and respect are terms that go hand in glove with retirement income security, coverage and adequacy. Today, we will conclude the second reading debate on Bill C-513 and we will then be asked to make a decision. Are we prepared to stand with our seniors or are we determined to let them stand alone?

Bill C-513 is not part of any single partisan agenda, and I would be more than pleased to share the credit of passing Bill C-513 with all members in the House. The provisions of Bill C-513 already have the endorsement of several groups, such as the Canadian Medical Association and the Canadian Federation of Pensioners. These groups do not support this effort because they are Liberal. They support it because they, too, believe that the security of the pension promise is paramount.

I have spoken to many members of the House on this subject and I have come to believe that this notion is one that really unites all of us. We have differences on how to arrive at the destination, but the end goal should be the same. Bill C-513 would offer us the freedom to pursue our own legislative paths, so long as the outcome is one that enhances pension security for all.

As I said, I have travelled across the country and I have spoken to many on this subject. Sadly, most are not adequately saving for retirement. This truth clearly requires foresight and leadership on the part of all of us and the government.

Clearly, we have learned that there is a need for a long-term road map for pension reform so that in the next 20 years, when people retire, they have an adequate income. Otherwise, the task falls back to the provincial, municipal and federal governments to provide that aid. This would allow people to survive, but it would not give people a decent level of living. It would still mean that they are living at just the minimum.

If we could encourage the changes necessary and do everything we can to encourage people to put money away, we would all be better off and our seniors would find more gold in their golden years. However, it will take time to make those changes and it will need people, such as all of us in the House, supporting things such as Bill C-513 to ensure that we are moving forward, thinking about retirement for many Canadians and helping them to achieve their goals.

Second Reading

[Judy Sgro, Liberal, 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.

[Judy Foote, Liberal, 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, NDP, 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.

Speaker's Ruling

[The Acting Speaker, Conservative, 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.

The House resumed from November 23 consideration of the motion 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.

Pensions

[Judy Foote, Liberal, 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, Liberal, 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.

Retirement Income Bill of Rights

[Michael Savage, Liberal, 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, NDP, 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, Bloc, 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.

[Wayne Marston, NDP, 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.

[Judy Sgro, Liberal, 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.

Royal Recommendation--Bill C-574

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, on the same point, I want to thank the hon. member for his comments on these issues, but Bill C-574 is very much a statement of principle.

As the mover of the motion, I was very careful to ensure that it did not require a royal recommendation. I understand the interpretation of clause 13, but I can say that I reviewed that because I did not want it to be ruled out of order and require a royal recommendation.

It is very much a statement of principle. It does not require actuaries to come forth with an extended report. It is an issue of setting down principles. It is a motherhood issue that establishes the principles of a bill that would protect pensioners, protect Canadians and ensure that all Canadians have the right to have a pension system.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, first of all the presumption here and the references to Bills C-286, C-250 and C-257 all are with respect to the same statement about a new function and beyond the mandate.

However, I would like to submit that the Minister of Justice already has responsibilities in the area that C-574 deals with. To discharge that responsibility, it is clear that the minister would have to get information from resources such as actuaries and other experts in the area.

It is not incumbent on the Minister of Justice himself to have all of those particular levels of expertise within his own department to fully discharge his responsibilities. There is a reliance obviously on the resources of the Government of Canada, available to all ministers.

In this regard, before any minister of justice would opine on any matter related to the retirement income system, it is clear that the retirement income itself is not within the jurisdiction of the Minister of Justice.

However, there is a due diligence and a due care requirement on behalf of the Minister of Justice to ensure that in giving legal opinions that he or she also has the important information with regard to the fundamentals and the dimensions.

This argument about “significantly alters” is a qualitative assessment by the hon. parliamentary secretary, but the argument does not, in my view, sustain the suggestion that a royal recommendation is required, most simply because in this particular case the Minister of Justice, in fact, has a responsibility with regard to opining on Bill C-574 on the Canadian retirement income system and must engage these kinds of resources in the normal course of his work to do his job in a proper fashion with due diligence.

Therefore, I submit that, since the Clerk of the House normally advises a member about the likelihood of a royal recommendation being required on a bill, and the House has extensive resources to make such an assessment, it is clear that the question about extending the mandate beyond what the minister may have has already been considered. It is one of the fundamental positions.

I would submit that the expertise within the Clerk of the House's office has taken that decision and not made that recommendation, and indeed the Chair has not given that notice of a likelihood of a royal recommendation.