Bill C-25 (Historical)

Pooled Registered Pension Plans Act

An Act relating to pooled registered pension plans and making related amendments to other Acts

This enactment provides a legal framework for the establishment and administration of pooled registered pension plans that will be accessible to employees and self-employed persons and that will pool the funds in members’ accounts to achieve lower costs in relation to investment management and plan administration.

Motions in Amendment

[Judy Sgro, Liberal, York West, ON]

Madam Speaker, I am sure the member will have an opportunity to ask some further questions since he seemed dismayed that his colleague's time was up.

When I last spoke to Bill C-25 on this issue, I expressed my concern that this was little more than breadcrumbs to a starving person. I supported it going to committee, as did our party, with the hope that some significant changes would be made to improve some part of what the government had called pension reform.

Bill C-25 is still nothing more than a mechanism for those who have money to save for their retirement and the government trying to pass it off as its answer to pension reform.

While I have no difficulties with creating savings vehicles, in fact we need to do more of that, we must also work to help those who have little means to save. Pension reform should be all about that. Bill C-25 is not pension reform and any claim that it is false, misleading and deceptive.

For the sake of clarity, it is still my intention to vote for Bill C-25 because it is a breadcrumb to a starving person. It is as simple as that and nothing more than that. It will not satisfy the demand, but perhaps it will offer a small portion of temporary relief to some. Therefore, I will cast my vote with deep concern for what this legislation fails to do.

PRPPs are nothing but locked-in RRSPs and Canadians will face a number of problems if they choose to join these plans. Members will bear 100% of the investment risk. A single market stumble could spell the end to any retirement hopes. There is also no ability to make up for the bad years by making additional tax deductible contributions. They will have to become administrators of their own plans and there is no ability to move out of an underperforming PRPP into a performing one or one that will offer better services.

Employers will be forced to create administrative systems to enrol their members. If provinces make them mandatory, then since both employers and members can opt out, they may incur a significant amount of costs for absolutely no reason.

It is still unclear whether any homemakers would be able to contribute or would it have to be from employment income only? Yet again, the so-called Conservative plan excludes those who contribute to society outside of the traditional workforce.

Why not learn from some of the others who have tried plans like the PRPPs that are being proposed today. Australia tried it well over a decade ago, in 1997. It was published in the Rotman International Journal of Pension Management. It found that the only ones who benefited from the plan were those in the financial sector. The study concluded that the Australian superannuation system was founded on the assumption that market competition would deliver economic efficiency in a largely private, defined contribution system. That did not work.

Management fees are a significant problem. PRPPs will be managed by the very same people who manage Canada's mutual funds, and Canadians already pay some of the highest management fees in the world on their mutual funds.

Morningstar released a report grading 22 countries on the management expense ratios levied on their mutual funds. Canada was the only country to receive an F. Why should we be striving for an F? I, like most, think we should be striving for an A. It would make far more sense.

The government already knows all of this. It was specifically raised in January when Bill C-25 was last before the House. The standing committee knew this too, which is why I am shocked it reported back to the House without any suggestions for improvement and without any insights of any kind, in spite of having a variety of individuals go before the finance committee and suggest some amendments and some ways to improve Bill C-25, clearly because Canada needs serious pension reform.

The standing committee was silent, despite witness testimony that said, “in its current form, Bill C-25 is an example of good intentions, creating a legislative response that will have numerous unintended adverse consequences”. Witnesses also stated that as an effective pension plan, pooled plans were unlikely to achieve that goal.

Expert witnesses at committee begged the government to make even minor changes, again because we need to move forward as a country on pension reform. They said:

There is a considerable body of academic work that shows that putting untrained and uninterested individuals in charge of investment selection is foolish.... If investing money was a simple matter, we'd all be rich. The reality is that investing is challenging, even for professionals, and that it remains to be a full-time job.

The world is becoming increasingly complex, financial innovation continually challenges practitioners and to expect Canadians to suddenly have the time required and the skill needed to manage money carefully is unfair and, to be blunt, ill-advised.

Despite all these warnings, the government had ordered its MPs on the finance committee to ignore all of that good advice and to vote down any amendments from the opposition.

We had suggested several amendments. At second reading the Liberal caucus said, and I led that discussion, that we wanted to work with the government to make Bill C-25 more effective. At the committee we introduced an amendment to address some of the problems raised by the witnesses. All of our amendments were defeated along party lines.

Specifically, the Liberal finance critic presented an amendment that would have addressed the issue of high management fees. Why would the government defeat it? The government decided that Canadians should be cast to the markets without any form of protection, despite the warnings coming from experts on the subject. In simple language, this means that investors, average Canadians interested in the PRPPs, would be legally required to pay fees that would guarantee a profit for the bank. That sounds to me like an inefficient way of delivering pensions.

These requirements are the cornerstone of the PRPP plan. With this in mind, I am left to wonder how PRPPs could possibly yield results for Canadians and pensioners. The simple answer is that PRPPs would not help the average Canadian prepare for retirement, just as millions of Canadians have not been able to max out their RRSPs.

Forcing Canadians to work longer and harder to save for retirement on top of asking them to pay for $6 billion in giveaways to the largest corporations, $13 billion for new megaprisons and $40 billion for an untendered stealth fighter jet deal is not a plan for pensions. PRPPs will not work for those who need them the most.

Why are we not learning from some of the mistakes of other countries? Australia adopted its version of PRPPs over a decade ago, in 1997. The recent study that I alluded to earlier, done by the Rotman International Journal of Pension Management, found that the only benefit from that plan went to the financial services industry.

Why not look at other options? Let me tell the House a bit about the Liberal option. A supplemental Canada pension plan, already proposed by the Liberals, would provide the best of both worlds. It would create a new retirement savings vehicle for Canadians who need it, while delivering the low overhead cost structure of the Canada pension plan.

A supplementary Canada pension would be a simple cost-effective solution to the pension question facing our country. It would be a defined benefit pension for everyone, even those who have left the workforce during their lives for child rearing, illness, seasonal employment and educational advancement. It would use proven and existing resources to give every Canadian man, woman and child a reliable and stable investment vehicle for the future. A supplementary Canada pension would be a plan for real pension reform.

The Conservatives could not care less. By ignoring the amendments that we had put forward, by ignoring our good intention of trying to work with the government on making changes to Bill C-25, the government is clearly showing that it has no interest in the idea that Canadians should have anybody help them to save money.

The government's fend-for-yourself attitude that we see every day in the House continues. Bill C-25 is just another example of good intentions but failed legislation.

[Deepak Obhrai, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Madam Speaker, it is an honour for me to rise again to speak to Bill C-25, the pooled registered pension plans act.

First, I would like to respond to the last Liberal speaker. When I listened to him, I wondered if there were warning bells that there would be a merger between the NDP and Liberals. Maybe he was talking about that. I wish them the best of luck.

Coming back to the business of the pension plan, I will speak to the NDP position later on. Right now I will speak about the Liberal position, which is typical. The Liberals are speaking out of both sides of their mouths. They like this, but they want to do that. What do they want to do?

Let me tell them this. They should not mislead Canadians when they speak about the CPP.

We should look at the CPP legislation. CPP can only be amended by the consensus of two-thirds of the provinces, representing two-thirds of the population. That is how one can change CPP, and not by what the Liberal Party has said. The Liberals can talk about anything they want, but it will not change the fact that CPP can only be changed when two-thirds of the provinces agree to change it. We should be honest about it.

The provincial finance ministers, at their 2010 meeting, had strong objections to changes to the CPP. Maybe the Liberals should take that fact into consideration. The provinces have a strong objection to changing CPP in the way in which the member keeps speaking about as a good way to change it. For that reason, they will support it but they want CPP.

Yet, as was pointed out, the NDP government in Manitoba is different from the federal NDP opposition. However, all provincial finance ministers agreed that this was the right way to go. I am sorry to say that the objections made by the Liberals against this bill hold no water. It is typical Liberal rhetoric. They are sitting on both sides of the fence.

I will talk about the NDP's opposition to the bill. The NDP is now a party with its head in the sand. I look at what the NDP leader has said. He has been talking about the Dutch disease, creating division between resource rich provinces and so-called manufacturing provinces, not understanding that resources and manufacturing are intertwined.

The provincial economies in Canada are intertwined. Yet the Leader of the Opposition is going around the country and talking about the Dutch disease, saying that the resource sector is destroying the economy of the province of Quebec where he was born. He said that it was destroying manufacturing jobs in Quebec. What narrow thinking. The NDP is aspiring to be the Government of Canada? That is the most dangerous scenario one can think about happening in our country.

If the Liberal members would like to join the NDP, I would ask them to think about this. Do they want to join a party that is sowing division in our country? We have one of the best mobility systems in the world, considering Canada's economic situation compared with other countries. We can move from eastern Canada to western Canada within days and have everything transferred.

We have an economic system that benefits the whole country. Yet, what did the NDP leader say? He is blasting the resource rich provinces. Now he has also changed and is hitting northern Ontario. He does not like the forestry sector there.

I can tell the House that he will quickly change his tune when it applies to his province of Quebec. What kind of leadership is being displayed by the so-called Leader of the Opposition, whom some have termed the “prime minister in waiting?”

As long as I am on this side, we will fight tooth and nail to make sure Canadians understand how divisive that party is. That is why it comes as no surprise that the NDP opposes this legislation. When the NDP opposes something, we know we are on the right track.

Let me get back to talking about the pooled registered retirement. Those who have a business background know the value of having this pooled registered pension plan.

My wife ran a business for 15 years. I worked for the city and helped her with her business. I had a government pension plan then and I have a government pension plan even now, and so do many Canadians. Canadians who work for big corporations have a pension plan. After putting 15 years of hard labour into her business, my wife has no pension because there was no vehicle available to her. All she can do is put money into RRSPs to help her out with her pension planning because that is her only vehicle. When I talked to her about this pooled plan, she wanted to know why nobody had brought this idea forward before. Why did it take so long?

All provinces unanimously support this. Not all Canadians will benefit from this plan, but it will reach those people who have been left out, who do not have any other tools like we have. This plan would fill the crack in their retirement planning.

This plan is a strong tool. It would allow a portion of Canadians, those who are self-employed and those who cannot enter into this, the opportunity to have another vehicle for their long-term retirement plan. What is wrong with that picture? I do not understand what those members find wrong with that.

I hear members talking about the fee, saying they think it would be high. Let me get this straight. Those members are going to oppose a very good plan that would benefit thousands of Canadians because they think the fee would be high. Let me be clear. They do not have any proof that it would be high.

This plan would be based on experience, based on pooled resources and based on this being under an act of legislation. Those would ensure we get the best money for this pension plan. In the long term it would help thousands of Canadians in their retirement, which is key.

The opposition will fearmonger again about our government raising the retirement age from 65 to 67 to qualify for OAS. That does not apply to those who are currently getting it or will be getting it in the near future. We have to look at the long term.

On June 2, I will have been in the House for 15 years. When I was on the other side, we debated the Canada pension plan when the issue was raised by the government of the day. At that time, the Liberals sat on this side of the House. We changed to reflect the increase. We recognized that the Canada pension plan needed to be changed because otherwise it would not be there in the long term for Canadians.

Today, instead of raising the premiums, which would impact the fragile economic recovery, all we are saying is that the age be deferred from 65 to 67. This would apply to the younger population. This would provide them with enough time and tools to continue to build a retirement savings plan, which would be there for them when they retire. The plan will not be bankrupt.

To the Liberal who keeps talking about seniors, I am telling him to use the word correctly, when he is talking about 65 to 70. This is for the younger generation coming up. The current seniors and the seniors we will be getting in the next short period of time are not impacted. However, that is not what he is going to talk about because it does not fit into his agenda.

However, I am happy to note, irrespective of whatever they say, at least they will vote with us, so that by itself is a positive factor.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, it is with pleasure that I am able to add a few words today on what is a very interesting bill. It clearly demonstrates first-hand the differences among the Conservative-Reform Party, the New Democratic Party and the Liberal Party.

I will pick up on the member's reference to the Liberal Party's position, saying it wanted to make CPP optional. Of course, that is not true. Let me start by saying that the whole issue of pension has been a very interesting subject to Liberals for generations. In fact, the area of retirement and making sure our seniors are taken care of is nothing new for the Liberal Party. The Canada pension plan, old age security and the guaranteed income supplement were all programs initiated by Liberal prime ministers, going back to some of the ideas that were at the forefront in making a difference and enhancing seniors' pensions today. The Liberal seniors critic today was talking about how we could have incorporated some form of additional contributions to benefit CPP.

What I like about this particular bill is it shows that there are differences among political parties. Let me reference the NDP's position. It is saying it does not support this bill. It does not recognize pooled registered plans as a viable alternative for consumers, individual companies and self-employed individuals. I do not understand why. Many individuals would see this as a positive step forward. It is not going to be the major pension supplement into the future for our seniors but many seniors would be able to benefit from this program.

It is not just the Liberal Party that recognizes that. Some provincial administrations across the country have also seen the value of it. Thousands of small businesses throughout the country have seen the value of pooled registered pension plans. There seems to be fairly tangible support for the concept of having pooled registered pension plans. This is where Liberals differ from New Democrats on this bill.

Then there are the Conservatives, or the Reform-Conservatives as they are better known as nowadays, saying they want to create the fund with management fees. Australia has developed a similar program and the management fees are a killer. They are taking away a great deal of profit, which would, in essence, go back to the seniors who are hoping to be able to use this money to supplement their CPP and OAS.

It was not that long ago that the leader of the Liberal Party spoke on this bill at second reading and talked about the overhead cost structure for CPP. Why are we not going out of our way to incorporate or allow for some sort of similar situation, perhaps one in which the pooled pension plan would have the same structure? What are the options we have? The government tends to turn a deaf ear. We have to ask why it is not looking for a mechanism that would allow for this tool to be maximized for our seniors?

I challenge the government to seriously look at that and to look at bringing in the potential for amendments. I recognize we are already into the third reading stage, but maybe we could get the Senate to rectify this issue. Obviously the government has not been sensitive to that.

It makes sense. If we can allow our seniors to generate more income on their savings and allow the employers that put money to the side to generate more revenue for retiring seniors, why would we not do that?

If we look at what happens in other jurisdictions, we can see these types of funds have huge administrative costs and management fees. There is a good number of people who make huge profits and those profits are in essence taken away from seniors in their ability to maximize their pension benefits.

We are not necessarily against profits. We recognize where the Canada pension plan contributes and relies on profits. A structure is in place where there have been great savings, compared to other types of pooled registered pension plans.

That is why we suggest the government open its eyes and look at how CPP is administered and structured to see how we might be able to maximum the benefits of a pooled registered pension plan and maybe allow some of those agents that manage the CPP an opportunity to deal with this pooled registered pension plan, at the end of the day believing that seniors will benefit.

The issues of pensions is very important nowadays. It is on the minds of a lot of Canadians because the government seems to be fixated on creating a crisis with respect to our OAS. The government has suggested Canadians not retire at age 65 but wait until age 67. That has sent significant shock waves through our communities.

From the perspective of the area that I represent, Winnipeg North, when the Prime Minister was overseas, musing about what he wanted to do with pension plans and the pensions of seniors, it was somewhat insensitive to the day-to-day decisions seniors had to make. Some of those decisions deal with things such as whether they should pass on lunch to buy medicine, or whether they have enough money to take their grandchildren out to a special event.

Seniors face some serious financial issues today in a very real and tangible way. They are looking for leadership from the Government of Canada. What they want to hear from the government is that it truly cares. They want it to provide hope for individuals as they get closer to retirement.

When I look at Bill C-25, I will give the government some credit. It proposes to expand the toolbox of what some seniors might be able to look at, including working with good employers that recognize the value of pensions. However, the bottom line is we need to think about pensions a lot more than we are, and we need to look at a wide variety—

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I agree with my colleague from London—Fanshawe. I am glad to have my RRSPs. I have been trying to put money away in RRSPs. However, when one looks at their efficacy, one finds that overall they cost the system a tremendous amount and really provide little pension availability, and they provide less as we look down the income scale. The people who most need pension benefits are less likely to find them through RRSPs.

I am attracted to the idea of more municipal bonds. I know we are thinking outside the Bill C-25 box, but what does the member for London—Fanshawe think of Canadians being able to put their retirement savings in municipal bonds in their own communities?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

moved:

Motion No. 1

That Bill C-25 be amended by deleting Clause 1.

Madam Speaker, it is important that we look very carefully at the pooled registered pension plan because it simply does not serve Canadians. In addition to not serving Canadians, it does nothing to solve Canada's pension crisis.

The pension crisis has been the subject of debate for the past several years. The issue is that more than 11 million Canadian workers do not have a workplace pension plan. Old age security and the Canada pension plan, which everyone has, do not provide enough money for people to live on in their retirement. To make matters worse, most Canadians are not making up for their lack of pension plan by saving for retirement on their own. Less than one-third of people entitled to contribute to RRSPs actually do so. There are now more than $600 billion in unused RRSP contribution room being carried forward, and only about one-third of Canadian households are currently saving at levels that will generate sufficient income to cover their non-discretionary expenses in retirement.

It also needs to be noted that the market is not a reliable place in which to gamble retirement security. Turmoil on financial markets has had and will continue to have a devastating impact on workplace pension. People who were saving for retirement through RRSPs have found all too often that the value of their investments has dropped so much that they are now faced with having to postpone their retirement or struggle to replace retirement savings by attempting to find some kind of work. The reality is, however, that finding employment at age 68 or 70 is profoundly difficult. The workplace has changed and the skills that retirees once brought to the job are no longer marketable.

For several years there has been a clear consensus among experts that real pension reform was and continues to be critical. However, rather than intelligently and positively engaging in reform that is practical, the government has instead introduced pooled registered pension plans, PRPPs, which, according to the federal finance minister, will make low cost, private sector pension plans accessible to millions of Canadians who have up to now not had access to such plans. It is magic.

The legislation introduced in mid-November would allow employers to offer PRPPs to their employees. The scheme would be run by insurance companies and other financial institutions that would pool the savings of workers whose employers sign up for the program. The financial institutions would run the program on behalf of employers and, of course, will charge fees for doing so. Employers would not have to contribute to the plan. Workers' savings would be locked in unless employees provide notice in writing that they want to opt out, which, apparently, would be allowed.

No pension would be guaranteed by this program. In effect, it is yet another voluntary savings scheme that would do nothing to address the pension crisis we face. Since very few people take advantage of existing voluntary retirement savings schemes, it is not clear why officials are claiming that proposed PRPPs will prove more attractive than existing programs. So far, the only advantage being promoted by PRPPs is that management fees will be lower than for individual RRSPs since contributions will be pooled. However, there is no guarantee of lower fees nor is there any certainty that this will be a big selling point for the plans. It is also worth noting that there is no evidence people are not saving through RRSPs because of the high management fees. It is far more likely that, because individuals are raising families, paying bills, trying to manage the cost of housing and educating kids, there is no money left at the end of the month for an RRSP.

The PRPP is not a defined benefit plans. It does not provide a secure retirement income with a set replacement rate of pre-retirement income. It is not fully transferrable. It is not indexed to inflation and will not increase with the increasing cost of living. Employers, not employees, will decide contribution levels and it will not be mandatory for employers to contribute or match workers' contributions. Without employers contributing, it is not really a pension plan. In fact, employers who do not help their employees save for retirement could end up with a competitive advantage over those who do.

Canada does not need yet another voluntary tax-assisted retirement savings program. It needs public pensions that provide all Canadians with a basic guarantee of adequate income that will protect their standard of living in retirement. Expanding the Canada pension plan would meet this objective.

In fact, federal and provincial finance ministers seemed set to take this route when they assembled for their meeting in Alberta in December 2010. However, because Alberta opted out, the federal government decided to abandon talks and introduce the PRPP scheme instead.

Improving the replacement rate of CPP retirement benefits would provide much better retirement pensions to virtually all Canadians. A relatively modest increase in contribution rates would be required, but that could be phased in over a period of time, as the Canadian Labour Congress and others have proposed.

The CPP covers all workers, including those who are self-employed, and its benefits would be guaranteed in relation to earnings and years of service. They would be indexed for inflation and fully portable from one job to another. This option would address the two key issues in the pension system that are causing concern, the lack of coverage of workplace pension plans and the fact that individuals are not saving for their retirement on their own. As well, of course, an expanded CPP could reduce federal expenditures on GIS, because more people would have adequate retirement incomes.

While the government says CPP contribution rates cannot be increased when there is a fragile economy, it is worth noting that when the financing of CPP was changed at the end of the 1990s, combined employer-employee CPP contribution rates nearly doubled from 5.6% of covered earnings to 9.9% over a five-year period, during which the unemployment rate fell from 9.6% to 7.6%. It should also be noted that the PRPP scheme will do nothing to help the baby boomer generation now coming up to retirement.

It seems this is a lost generation as far as pension reform is concerned. It has been estimated that roughly one-third of Canadians now in the age group 45 to 64 are likely to end up with incomes that fall far short of adequate minimum incomes and/or incomes that would allow them to maintain their standard of living when they retire.

The adequacy of CPP benefits has been an issue for more than 30 years. It is time now for federal and provincial governments to set aside ideology and work together to solve the problem.

The study by pension expert and Canadian Centre for Policy Alternatives research associate Monica Townson provides a thorough analysis of the PRPP program and argues that expanding the Canada pension plan would provide better retirement pensions to virtually all Canadians. Ms. Townson found that the expansion of the CPP would provide a mandatory defined benefit pension to virtually all Canadians, giving them a basic retirement income that for modest and middle income earners would preserve their standard of living.

The government's PRPP proposal does not do that. It does not guarantee a pension. Benefits would depend on selection of investments and stock market performance. Participation would depend on an employer's deciding to take part in the program. It is basically just a defined contribution pension.

In a defined contribution plan, there are no guarantees of how much money would be left when an individual retires. The risks are borne entirely by the individual employee. In these types of plans, the amount of money available at retirement depends on the outcomes of the investments, which cannot be relied upon. Defined contribution plans lack the security of defined benefit pension plans like the CPP-QPP, which pay a guaranteed set amount upon retirement.

It is important to remember that Bill C-25 places no caps on administration fees or costs, and merely assumes lower costs will emerge through competition in the marketplace. Financial institutions like banks, insurance companies and trust companies stand to profit substantially from these fees. However, expanding the CPP-QPP would not cost the government any more than its proposed PRPP.

More important, expanding the CPP-QPP would not entail transferring huge management fees to private financial institutions.

How can I get through to the government? Seniors have worked hard all their lives. They deserve decent retirement. Bill C-25 would not provide that.

Speaker's Ruling

[The Deputy Speaker, NDP, Denise Savoie]

There is one motion in amendment standing on the notice paper for the report stage of Bill C-25. Motion No. 1 will be debated and voted upon.

I shall now put Motion No. 1 to the House.

The House proceeded to the consideration of Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, as reported (without amendment) from the committee.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, our government's priority is, of course, the economy. We are committed to job creation and economic growth.

As a result, this afternoon we will continue debate on Bill C-38, the jobs, growth and long-term prosperity act. This bill implements the budget, Canada's economic action plan 2012, to ensure certainty for the economy.

For the benefit of Canadians and parliamentarians, when we introduced the bill, we said we would vote on it on May 14. The second reading vote on the jobs, growth and long-term prosperity act will be on May 14.

After tomorrow, which will be the final day of debate on this bill, we will have had the longest second reading debate on a budget bill in at least the last two decades.

On Monday and Tuesday we will continue with another bill that will support the Canadian economy and job creation, especially in the digital and creative sectors.

We will have report stage and third reading debate on Bill C-11, the Copyright Modernization Act.

This bill puts forth a balanced, common sense plan to modernize our copyright laws. Committees have met for over 60 hours and heard from almost 200 witnesses. All of this is in addition to the second reading debate on Bill C-11 of 10 sitting days.

After all that debate and study, it is time for the measures to be fully implemented so Canadians can take advantage of the updated rules and create new high-quality digital jobs.

Should the opposition agree that we have already had ample debate on Bill C-11, we will debate Bill C-25, the pooled registered pension plans act; Bill C-23, the Canada–Jordan free trade act; and Bill C-15, the strengthening military justice in the defence of Canada act in the remaining time on Monday and Tuesday.

Wednesday, May 16, will be the next allotted day.

On Thursday morning, May 17, we will debate the pooled registered pension plans act. This bill will help Canadians who are self-employed or who work for a small business to secure a stable retirement.

In the last election, we committed to Canadians that we would implement these plans as soon as possible. This is what Canadians voted for and this is what we will do.

If it has been reported back from committee, we will call Bill C-31, the protecting Canada's immigration system act, for report stage debate on Thursday afternoon.

Financial Statement of Minister of Finance

[Peter Julian, NDP, Burnaby—New Westminster, BC]

As the Canadian Association of Retired Persons has said, and the hon. member for Dartmouth—Cole Harbour has repeated very eloquently: we are punishing future generations in an effort to spend tens of billions of dollars on an over cost fiasco. We are saying Canadian families deserve better than that.

That was the F-35s. I am now going to address the issue of prisons, which are the second part of what we are discussing today, because these are the government's two priorities.

We already know that there are going to be budget cuts, cuts to old age security. We have already seen how this government is attacking ordinary families across the country. Middle-class families and the poorest Canadians are being affected by cuts to services. In this budget, the government claims that the bills it is proposing, for example, the crime bill, will not cost any money.

First, I must point out that, right now, there is a low crime rate. The number of crimes being committed in Canada is decreasing. At the same time, the government made major cuts to programs to prevent and combat crime across the country. We know full well that every penny or dollar spent on a crime prevention program will save us six times that amount—6¢ or $6—down the road in other parts of the judicial system, whether it be costs related to police, criminal courts or, of course, prisons. However, this government has cut funding for programs to prevent and combat crime.

Then, instead of presenting an agenda that we could agree with, the government presented its prison agenda. In the budget, the government says that this will not cost anything. Frankly, we do not believe it. In the studies that were conducted, the government never divulged the real cost of its programs and bills. It never made any estimates or calculations. As a former financial administrator, I am wondering how anyone could go ahead with a bill without doing any calculations at all to determine how much it will cost.

In this case, the government has not done any calculations or made any estimates. It has no idea of the cost. Even in the budget, the government clearly stated that we do not need prisons. Provinces all over the country know full well that the hodgepodge bills that the government has been introducing one after another will cost taxpayers a lot of money. The provinces will have to build prisons, and we also know how much that will cost us.

The Institut de recherche et d'informations socio-économiques did a study that took all these factors into account. It is too bad that the government did not try to do the same. I know that the Parliamentary Budget Officer provided a good estimate of some aspects of the programs, but the only valid estimate, the only valid and complete calculation of the cost of these programs comes from the Institut de recherche et d'informations socio-économiques, which said:

Don Head, the Commissioner of Correctional Services Canada [he did his own calculations], later said that he estimated that federal prisoner numbers would increase by 3,400, requiring 2,700 new spaces, at a cost of $2 billion to support that increase.

The increase will result from the bills this government has introduced without calculating the costs associated with them. This will also have an impact on the provinces.

The study also states:

Although passed by the federal government, many of the bills introduced will have a significant impact on the provinces and their public finances. According to some estimates...for Bill C-25, the provinces will be forced to bear most of the cost of funding the new prison system. The PBO predicts that, for the Truth in Sentencing Act alone, which came into effect on February 22, 2012, provincial and territorial responsibility for funding the prison system will increase from 49% to 56% compared to the federal level. The provinces will have to bear 78% of the cost of building these new cells, that is, $12.655 billion. Quebec's share alone will be $2.6702 billion. There is nothing to indicate that future legislation will reverse this trend.

As for all of the construction-related calculations, not to mention the annual costs associated with these bills, the eminent researchers with the Institut de recherche et d’informations socio-économiques, very reputable people, reported the following:

This socio-economic report has demonstrated the misleading nature of the Canadian government's statements regarding its crime-fighting policies. The changes made by Bill C-25 and Bill C-10 are very unlikely to have any impact on Canada's crime rate. As recent experience has shown, an approach that focuses more on offender reintegration and rehabilitation is more likely to effectively reduce the number of crimes committed. What this report adds to the file is that not only are the government's measures likely to be ineffective, but they will also be very costly for taxpayers.

This is a very important point.

They will require investments of at least $18.802 billion in prison infrastructure and engender ongoing costs of $1.616 billion for the federal government and $2.222 billion for the provinces. In addition to the federal investment, the changes will force Quebec to invest $3.057 billion in its own infrastructure. Bill C-25 will also cost the province an extra $407 million per year, and Bill C-10 will cost an extra $82 million per year. The government of Quebec allocated $379 million for prison operations in 2011-12. These additional annual costs will increase that budget by 129%.

Since the justice minister...promised that, “This is just the beginning of our efforts in this regard. We'll introduce other legislation as well," we feel it is important to point out other solutions. Focusing on reintegration and rehabilitation, which are proven solutions, would enable the government to spend much less on prisons, giving it more flexibility to invest in social policy.

This is extremely important. We are talking about two programs. One would probably cost about $40 billion and the other $19 billion, with additional annual costs of $1 billion to $2 billion.

We find all these priorities to be unbelievable. The government has no credibility since it is telling us that there are cuts coming for seniors and ordinary families, but then it is willing to spend whatever it takes on its pet projects.

We are saying that Canadian families deserve better.

I can honestly say that the NDP caucus, which is made up of dynamic and energetic individuals, is really the best in the world.

One would never imagine that we came from a convention over the weekend during which nobody slept and right into the budget deliberations. We have our new leader in place, the member for Outremont. Everybody in the NDP is still full of vim, vigour and energy. It is a wonderful thing to see. What a fantastic, amazing group. One can just imagine how much more energy we are going to have on October 20, 2015, when the first NDP government is formed.

It will not be a government that is going to spend $40 billion on a fighter jet whose costs have simply exploded. We are going to be tightly monitoring budgets so that kind of thing does not happen. If a project goes off the rails, we will cancel it. We are not going to spend $19 billion on prisons when the crime rate is actually going down. We think we should be investing in crime prevention programs. We think we should be investing in bringing the crime rate down even further. We should be investing in addiction programs.

We will be doing something for our police officers and firefighters as well. It is important to mention this. Five years ago the Conservatives voted for the NDP motion to establish a public safety officer compensation fund to ensure that when firefighters and police officers pass away in the line of duty, their families are taken care of. We have been waiting and firefighters and police officers have been waiting now for six years for the Conservative government to bring that in and the Conservatives have not done it. They have left those police officers and firefighters out in the cold. When an NDP government is elected, one of the first things we are going to bring in is a public safety officer compensation fund.

Ultimately, that is what we are all about in the NDP. We take care of Canadian families. We take care of Canadians. We are folks who work very hard. NDP MPs have the reputation of being very strong constituency advocates. We work very hard. We can see the energy people have been putting in, even over the course of the last hour, which is remarkable, given the last few weeks with everybody working double and triple shifts every day of the week.

We do that because our energy comes from Canadian families. We represent them because we truly believe that our place in the House of Commons is to stand up for those Canadian families, to represent them, to be their voice in the House of Commons.

The many emails and faxes, the postings we are getting on Facebook and the tweets that are coming in on Twitter all attest to the fact that the majority of Canadians out there are concerned about the direction this country is taking. They are concerned about the kind of country we are seeing increasingly, with a small minority of people who seem to have most of the pie and where families are increasingly left out in the cold. They are concerned about the fact that they see families struggling more and more to make ends meet as their wages go gradually, but on an ongoing basis, lower and lower. They are concerned about seeing families in their neighbourhoods lose a breadwinner because of plant closures. I prefaced my remarks this morning by talking about the dozens of plants and factories that have closed in this country only in the last few months. They are concerned about what they see as a meanspirited government, a government that does not respect democracy, a government that does not respect input, a government that says seniors and future seniors have to pay the price for its misguided priorities of prisons and fighter jets before future seniors and services that Canadian families depend on.

That is what is happening with more and more Canadian families. The majority of Canadian families are very concerned.

The Conservative government was elected on May 2 on the promise to maintain health care funding, on the promise to maintain retirement security, on the promise to maintain services for Canadian families.

This budget is a betrayal. It is a betrayal of those promises that were solemnly made by the Prime Minister. He looked Canadians right in the eye, shook their hands and said, “I will not touch health care transfers. I will not touch retirement security. I will not touch the services your family depends upon.” This is a betrayal--

Finance

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Mr. Speaker, I have the honour to table, in both official languages, the sixth report of the Standing Committee on Finance in relation to Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts.

The committee has studied the bill and has decided to report the bill back to the House without amendments.

[The Chair, Conservative, James Rajotte]

You're very prophetic.

Bill C-25, in clause 26, provides that any administrator of a pooled registered pension plan must provide those services at a low cost. The amendment attempts to establish a board that would seek to determine the criteria to be used to decide what an acceptable low cost for such services would be by examining the range of other investment options available to Canadians and their associated fees.

As the House of Commons Procedure and Practice, second edition, states on page 766:

An amendment to a bill that was referred to a committee after second reading is out of order if it is beyond the scope and principle of the bill.

In the opinion of the chair, the creation of this board is a new concept that is beyond the scope of Bill C-25, and the amendment is therefore inadmissible. Additionally, the creation of the board may also infringe on the financial initiative of the crown, as the power to appoint persons to a board also includes the power to pay.

I will state that this also applies to NDP-6.

[The Chair, Conservative, James Rajotte]

Okay. I have a ruling. I will just remind members that rulings of the chair are not debatable. If there is a challenge.... The committee can challenge the chair, but I will inform you of this beforehand.

The ruling is as follows.

Bill C-25 creates a legal framework for the establishment and administration of pooled registered pension plans for employees and self-employed persons. A position of superintendent is created to be responsible for the control and supervision of the administration of this act. The superintendent issues licences to corporations to act as administrators of pooled registered pension plans.

Bill C-25 also contains provisions for the superintendent to oversee the actions of the administrators, with the power to transfer a plan's assets to another entity or even to revoke the registration and cancel the certificate of registration of the plan in question. These remedies are clearly defined, as is the system of objection and appeals.

This amendment attempts to transfer the administrative responsibilities and duties associated with the role of the administrator of a registered plan directly to the superintendent through means of trusteeship. As House of Commons Procedure and Practice, second edition, states on page 766:

An amendment to a bill that was referred to committee after second reading is out of order if it is beyond the scope and principle of the bill.

In the opinion of the chair, the introduction of this scheme is a new concept that is beyond the scope of Bill C-25, and the amendment is therefore inadmissible.

That is my ruling. It applies to NDP-1 as well as to NDP-4. NDP 4 is on page 6 of the documents I have. It relates to clause 34.

[The Chair, Conservative, James Rajotte]

I call to order the 46th meeting of the Standing Committee on Finance.

Pursuant to the order of reference of Wednesday, February 1, 2012, we are doing clause-by-clause consideration of Bill C-25, an act relating to pooled registered pension plans and making related amendments to other acts.

We have a two-hour session here for consideration of this bill clause-by-clause. You should all have the clauses in front of you. Pursuant to Standing Order 75(1), consideration of clause 1 is postponed. Therefore, I shall move to clause 2.

My understanding is there is not an amendment until clause 21. Perhaps for simplicity, and members can just stop me at any time, I will ask if there is any discussion with respect to clauses 2 to 20. We will deal with the clauses for which I have no amendments.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you, Mr. Chair.

Earlier this week, in testimony, we heard from the Canadian Bar Association and the CFIB and the Canadian Association of Retired Persons that the Liberal proposal to have a supplementary, voluntary CPP would help achieve the stated objectives of Bill C-25.

Mr. Laporte, first of all, you're a pension lawyer. You're a member of the bar association. Would the low-fee option help, for instance, provide some advantages, including competition to PRPPs, and as such help keep fees lower?

[Yves-Thomas Dorval, President, Quebec Employers' Council]

Thank you, Mr. Chair.

The Quebec Employers' Council is comprised of several large Quebec companies and also includes the vast majority of sectoral employer associations. It is the only employers' confederation in Quebec.

The mission of the Quebec Employers' Council is to ensure that businesses have the best possible conditions, especially with respect to human capital, in order to prosper in a sustainable way in the context of global competition.

We thank the Standing Committee on Finance for giving us the opportunity to comment on Bill C-25 as part of its consultations.

The Quebec Employers Council supports the federal government bill providing for the creation of pooled registered pension plans for federally regulated companies. The flexibility and adaptability envisioned by the PRPP will allow federally regulated companies that do not already have a pension plan to provide a simplified one for their employees. Employers, notably those in the small and medium-sized business sector, will thus have the opportunity to offer a plan that ensures financial security for their employees when they retire but will not have the fiduciary responsibility or the obligation to make contributions.

Let's recall that, according to several evaluations, in particular from the OECD and Mercer, Canada's retirement income system is one of the best in the world. The three pillars of this retirement income system enable Canadians to maintain an adequate lifestyle when they retire. But it seems that up to 30% of Canadian workers do not save enough to ensure the same lifestyle after retirement as when they were working.

There is also a challenge for future generations. Some changes are desirable to improve retirement savings, even though we acknowledge that the problem of financial security is not necessarily generalized and that, therefore, the solutions mustn't be generalized either.

We need to keep in mind that, to finance their retirement, Canadians invest not only in pension savings accounts, but also in other assets, particularly the house they own and live in or in various financial vehicles. They can also choose to work full-time or part-time for a few years more, assuming they remain in good health.

The Quebec Employers Council proposes that discussions regarding the retirement savings issues be guided by four main principles: no transferring of the burden to future generations; no hindering of businesses' competitiveness; no removing of individuals' responsibility; and no increasing of businesses' administrative load. Any change should encourage a marked improvement in the investment rather than substituting one form of an investment for another form that already exists. The regulatory structure has to be simple and flexible. The simpler the plan is to put in place and the easier it is to administer, the better chance it has to be successfully implemented.

This bill clearly seems to be moving in this direction, and we have a few specific comments to make.

First, this bill offers a greater number of workers who were not covered by a retirement plan, especially those working in small and medium enterprises, the possibility of being covered. It also allows employees in SMEs to benefit from the economies of scale that large plans do. The intended employees would automatically be enrolled in their employer's PRPP, but could withdraw if they wish to. According to all the examples we have seen, being signed up automatically generally encourages greater participation.

Second, we also want employers to be able to offer their employees this kind of plan without being required to contribute. Companies that wish to may do so, but companies, particularly SMEs, often cannot afford to contribute more.