Bill C-3 (Historical)

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act

An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011

Part 1 of this enactment implements income tax measures and related measures proposed in the 2011 budget, and income tax measures referred to in that budget that were previously announced. In particular, it
(a) amends the Income Tax Act and related legislation to allow beneficiaries of Registered Disability Savings Plans who have shortened life expectancies to withdraw more of their plan savings by permitting annual withdrawals without triggering the 10-year repayment rule, subject to specified limits and certain conditions; and
(b) amends the Income Tax Act to ensure that individuals have the legal authority in all circumstances to appeal a determination concerning their eligibility for the disability tax credit.
Part 2 amends the Excise Tax Act to introduce a 100% rebate of the goods and services tax and the harmonized sales tax paid by the Royal Canadian Legion on acquisitions of Remembrance Day poppies and wreaths. Part 2 also amends the Excise Act, 2001 and the Excise Tax Act to allow the sharing of information obtained under these statutes with countries or jurisdictions with which Canada has entered into a tax information exchange agreement.
Part 3 amends the Old Age Security Act to allow an amount to be added to the amount of benefits payable to certain low-income beneficiaries.
Part 4 authorizes payments to be made out of the Consolidated Revenue Fund for various purposes.
Part 5 amends the Auditor General Act to repeal a provision that provides for mandatory retirement.
Part 6 amends the Canada Student Financial Assistance Act to change the rules concerning interest paid by part-time students.
Part 7 enacts the Protection of Residential Mortgage or Hypothecary Insurance Act, which is designed to support the efficient functioning of the housing finance market and the stability of the financial system in Canada by authorizing the Minister of Finance to provide protection in respect of certain mortgage or hypothecary insurance contracts. It also makes consequential amendments to the National Housing Act and the Office of the Superintendent of Financial Institutions Act and repeals Part 9 of the Budget Implementation Act, 2006.
Part 8 amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to certain provinces in respect of major transfers.
Part 9 amends the Insurance Companies Act to prohibit a federal mutual company from distributing its property or other benefits to policyholders and shareholders, until the Minister of Finance has approved a conversion proposal made in accordance with the regulations.
Part 10 amends the Assessment of Financial Institutions Regulations, 2001 to modify the assessment of financial institutions and validates amounts assessed after May 31, 2001.
Part 11 amends the Financial Administration Act to permit departments to enter into agreements respecting the provision of internal support services. It also authorizes the transfer of money when a power, duty or function or the control or supervision of a portion of the federal public administration, is transferred under section 2 or 3 of the Public Service Rearrangement and Transfer of Duties Act.
Part 12 amends the Canada Shipping Act, 2001 to allow the Governor in Council to make regulations exempting vessels, and authorizing the Minister of Transport to temporarily exempt vessels, from the registration requirements in Part 2 of that Act. This Part also amends the Act to allow for the registration of a group of vessels as a fleet in the small vessel register, under a single certificate of registry and single official number.

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I would like to take advantage of the fact that this is the first time I am rising in the House, apart from question period, to say hello and to thank the people of Brossard—La Prairie for giving me the honour and privilege of representing them here in Ottawa as their member of Parliament. I would especially like to thank my family and friends, who have always believed in me and helped me achieve my dream. I would also like to apologize, as head coach of the U10 soccer team in Brossard, for not being present more often, as the players learn to win and lose and, more importantly, to have fun as a team.

I wish to add a few words of thanks to the constituents of my riding of Brossard—La Prairie and to let them know that I will work as hard as I can to ensure their voices are being heard and their concerns are being addressed here in Ottawa.

With part 7 of Bill C-3, the government seeks to take Canadians’ money, money that would normally be used to reduce Canada’s annual budget deficit, and give it to private financial institutions, most of which distribute their profits to American banks. In addition, the government wants to raise Canadians’ liability to $300 billion in order to guarantee the activities of private financial institutions.

In a 2008 Library of Parliament publication, Philippe Bergevin, of the International Affairs, Trade and Finance Division, said clearly that the global financial crisis was triggered by difficulties in the housing market in the United States. Many financial institutions in the United States and elsewhere in the world were hard hit by the mortgage crisis and had to declare bankruptcy or seek government assistance.

Fortunately, Canada made it through better than our neighbours to the south, mainly because its banking system is one of the best regulated and soundest in the world. Unlike American banks, Canadian banks were less active in the securitization of the high-risk loans which were at the centre of the 2002 financial crisis.

By supporting and guaranteeing the activities of American banks, the government is raising Canadians’ liability to $300 billion. The government is not content to give tax cuts to banks that are making billions in profits, it also wants to take Canadians’ money and give it to private financial institutions. That is why we have proposed amendments.

With Bill C-3 and part 7 on mortgage insurance, the government is simply taking money away from Canadians, which could be used to reduce Canada's annual deficit, and is giving it away to foreign private financial institutions, which at the moment are U.S. private mortgage insurance giants that take that money and give it away as profits to their shareholders.

That is not all. It is not enough to take money away from Canadians. The government also wants the Canadian taxpayer to guarantee in case those private financial institutions do not make enough profits and go belly-up. The government wants to increase Canada's liability to $300 billion. The government wants to take money away from the Canadian taxpayer.

According to yesterday's report by Karen Kinsley, president and chief executive officer of Canada Mortgage and Housing Corporation, or CMHC, it is in the business of providing mortgage loan insurance. It operates its mortgage insurance business on a commercial basis at no cost to taxpayers. All income generated by CMHC's mortgage insurance activity goes directly to the Government of Canada and serves to reduce the government's annual deficit. Over the past decade, CMHC has helped reduce Canada's accumulated deficit by $12.3 billion through paid income taxes and residual net income. The vast majority of that money was the result of CMHC's mortgage insurance loan operations.

There are some fundamental differences between CMHC and private insurers. CMHC has a public mandate to provide mortgage loan insurance to qualified borrowers in all parts of the country and for all forms of housing. CMHC is the only mortgage insurer for large multi-unit rental properties and nursing and retirement homes. As well, a significant percentage of the insured high ratio homeowner loans is in rural areas and smaller communities that are traditionally not as well served by private insurers. Together, these areas made up to close to 44% of CMHC's business in 2010.

Private sector insurers, on the other hand, have the ability to not serve those areas of the country or housing forms they deem less profitable.

The government not only intends to take money away from the Canadian taxpayer and give it to private mortgage insurers, but it wants to guarantee financial institutions that were involved in the sub-prime debacle and the global financial crisis.

Our point is that there is no need to involve private insurers, and there are significant risks in doing so. Why would we put the delivery of such important social goods at risk needlessly?

CMHC will be in competition with private insurers, which means more money spent on promotion and advertising of services by all players, money that should be going to house more Canadians.

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

Mr. Speaker, I have a question for the hon. member for West Vancouver—Sunshine Coast—Sea to Sky Country. I have to differ with him initially, of course, in pointing out that Saanich—Gulf Islands is the most beautiful riding in Canada.

The member's speech focused on the budget but, as I understand it now, we are discussing Bill C-3, a budget implementation bill, a very narrow application of 12 specific measures to which I have no objection. Could he expand on why this budget implementation bill does not actually mention the major measures in the budget?

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, yesterday at committee the party of the member from Kings—Hants voted in favour of Bill C-3. Notwithstanding his remarks here today, does the member intend to vote in favour of the bill in the House?

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

Neither has my leader. I can say that unequivocally.

During that time, they picked gratuitous fights with unions. They caused countless strikes and disruptions to government services. They left the public without services, as schools shut down and government offices closed. They really made labour relations toxic throughout the public service.

There is a need, obviously, from time to time, for a government to disagree with the unions leading the public service. However, there is an opportunity at all times to work with the public service and get better results.

Again, in this budget and Bill C-3 and part seven of it, we see a refusal of the government to share with this Parliament and the public service its plans to reduce expenditures. Either the government does not have a plan or it is hiding the plan from Canadians. We know that when it comes to Consulting and Audit Canada, the government hid its plan during the election to eliminate much of the audit capacity of the federal government. Again, this is consistent with a government of secrecy that does not want Canadians to have the facts, that does not want scrutiny by legitimate audit functions within government. This is not a cost-cutting measure but an ideological measure designed to try to shut down anyone who asks legitimate questions of the government and to try to continue to hide the truth from Canadians.

I would like to speak to the residential mortgages issue.

The parliamentary secretary, a few minutes ago, commended the Minister of Finance for his prescience in eliminating 40-year mortgages with no down payments. She neglected to tell the House that it was that minister who, just a few years before that, had introduced in his first budget 40-year mortgages with no down payments.

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

Mr. Speaker, I am pleased to rise today to speak to Bill C-3, the budget implementation bill.

The government has actually not made the case as to why it is rushing the bill through this House, particularly regarding part 11 on shared services and part 7 on residential mortgages.

On the shared services issue, during my tenure as the former minister of public works, I led the way forward for reform of the Department of Public Works. At that time we were in times of very significant surplus. I recognized the importance of always respecting every hard-earned tax dollar we received from Canadians during good times and bad time, in surplus and deficit, and ensuring that we delivered the best possible services to Canadians, and got the best value for tax dollars received.

That is why we in the Paul Martin government engaged in a very extensive expenditure review process. We had an expenditure review committee of cabinet. I was part of that committee. Without reducing services to Canadians, we were able to find billions of dollars in savings within the Government of Canada.

Within the Department of Public Works alone, we were able to identify $3 billion over five years and a billion every year after that by reforming procurement. I remember the hon. Walt Lastewka, who was the parliamentary secretary to public works and the former member of Parliament for St. Catharines, helped lead that. He brought his experience as a procurement expert from General Motors to the department and helped lead some of those reforms.

We were reforming the way we managed our real estate. We used efficiencies, including outsourcing certain types of services to get better value and provide better services to our tenants, which were government departments. We were modernizing all the procurement and real estate services in a way that ultimately saved billions of dollars without reducing services. We did it by working with the public servants.

I remember the day after I was sworn in as minister, as we were going through some of these proposals and ideas, we made a decision very quickly to engage the 14,000 public servants in a discussion about the plans to modernize the department. We did not hide our plans to reduce costs and to get better value for taxpayers. We did not hide those plans from the public service. We decided to engage the public service fully.

In fact, I did town hall meetings across Canada with 1,400 people coming out to a town hall meeting in Gatineau to 400 in Halifax. We engaged public servants at the grassroots. We engaged them not simply as union members but as citizens, as taxpayers, as public servants who were drawn to the public service with a desire to serve Canadians, to do a good job and to make a difference.

What we see with the government is a lack of respect for the public service as it takes an adversarial approach to these kinds of initiatives. There is secrecy wherein it does not share some of its plans to modernize government and save costs to get better value for taxpayers. I do not think there is anybody in this House who would disagree with the idea that there are ways to get better value for taxpayers.

Our quarrel with the government is with its lack of respect for the public service and its inability, incapacity, or refusal to actually work with the public service to get those better results.

We are accustomed to this kind of approach as a Parliament. The government treats Parliament as a rubber stamp. It does not provide Parliament with the facts and the costs required for Parliament to do its work.

If we look at the way the government approaches Parliament and the way it approaches the public service, it brings back memories of the Mike Harris government.

The finance minister, the foreign affairs minister, and the President of the Treasury Board were all members of the Mike Harris government and they picked fights--

[Shelly Glover, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I do want to take this opportunity to also state that I was at that meeting and the NDP did in fact vote for our bill. Regardless of what has been said here, the facts remain. The truth is that the NDP voted for the bill in committee and have now flip-flopped for whatever reason they want to provide. That is up to them.

I would like to share my time with the hon. member for West Vancouver—Sunshine Coast—Sea to Sky Country.

I sincerely thank the House of Commons Standing Committee on Finance for quickly studying and passing this important bill. As hon. members know, the Supporting Vulnerable Seniors and Strengthening Canada's Economy Act includes a number of measures from the 2011 budget and is a key part of the next phase of Canada's economic action plan, a plan that keeps taxes low to stimulate growth and jobs. Our economic growth shows that Canada's economic action plan is working and that the Conservative government is on the right track with our economic recovery.

Let us look at the facts: Canada's economy has seen seven consecutive quarters of growth. Since July 2009, we have created almost 560,000 net new jobs, 80% of which are full time. Canada's unemployment rate is considerably lower than that of the United States, something we have not seen in over 30 years. Little wonder that countless independent experts and observers have been near unanimous in their praise for Canada's economy. For example, Claude Picher, an economic and financial columnist for La Presse, said:

It is true that all of Canada's economic indicators are quite positive when compared with other G7 countries. Canada has weathered the recession better than the others. It is certainly the G7 champion in terms of economic growth and job creation.

However, too many Canadians are still looking for work, and the global economic recovery remains fragile. The financial difficulties of some European countries, such as Greece, attest to the fact that there are still international issues that could affect us. That is why protecting the economy has been and will remain our government's top priority. And that includes implementing the next phase of Canada's economic action plan.

The supporting vulnerable seniors and strengthening Canada's economy act contains many important measures that will not only support our economic recovery but also help everyday Canadians, especially seniors, such as: assisting Canada's most in need seniors with a significant boost to the guaranteed income supplement; supporting health care and social programs at the provincial level with nearly $1 billion in payments to provinces eligible for the temporary total transfer protections extension to 2011-12; encouraging young entrepreneurs with $20 million to help the Canadian Youth Business Foundation; enhancing federal support for part-time students; improving the registered disability savings plan; supporting Canada's veterans with tax relief for the Royal Canadian Legion; maintaining Canada's leadership in genomics research with $65 million for Genome Canada; reinforcing the stability of Canada's housing market with increased government oversight of the mortgage insurance industry; and much more.

I think all parliamentarians recognize that Canada's seniors sacrificed a lot to build this great country and I believe we all want a strong support system for their retirement. That is why our Conservative government has taken significant action since 2006 to improve the quality of life of Canadian seniors.

The measures taken include providing seniors and pensioners with over $2 billion in annual tax relief and creating a minister of state for seniors to ensure they have a dedicated voice in government to address their issues.

However, there is always more to be done. Unfortunately, there are still too many seniors with fixed incomes experiencing financial difficulties. Many of these low-income seniors are widowers who made sacrifices of themselves to stay home, to raise their families and better their communities. As a result of that, they do not have a pension income.

To show our appreciation to these seniors and assist them, our Conservative government is proposing to provide an additional GIS top up annually of up to $600 for single seniors and $840 for couples. This would represent the single biggest increase to the GIS in over 25 long years. The new GIS top up will help over 680,000 of Canada's poorest and most vulnerable seniors starting July 1, providing them with improved financial peace of mind.

It is little wonder that the Service Employees International Union, representing front-line health care providers and other service industry workers, applauded the GIS increase as, “A win for every senior living in poverty in Canada”.

I want to be crystal clear with all elected members in this House and all appointed senators in the Senate when I say that Canada's most vulnerable and poorest seniors are absolutely counting on the GIS top up and they need this bill passed quickly to allow it to come into effect on July 1, 2011, as promised.

I have heard some in Parliament smugly dismiss the GIS top up as only an extra few dollars a year. I challenge those parliamentarians to say that to the countless widows and seniors who are counting on the monthly GIS top up to make ends meet. I challenge members to ask those poor seniors, who do not have the luxuries we as parliamentarians enjoy, if those extra few dollars will make a difference to them as they worry day by day about how they will pay for their rent and food.

I know the answer because I have actually asked them. They need this money and it will make a world of difference for many of them. They are depending on us to ease their financial burden and the hundreds of dollars they will collect from the government's proposed GIS top up are absolutely crucial to their future.

I ask all parliamentarians, both here and in the Senate, to please put partisanship antics aside, do the right thing and pass this bill before we rise. Royal assent must be ensured to allow the increased GIS cheques to start going out July 1. Let us give these vulnerable seniors the dignity and respect they deserve.

I also implore my colleagues to consider another important measure in this bill that has the potential to change lives substantially. Genome Canada is a not-for-profit organization dedicated to supporting Canada's research leadership in genomics.

Genomics is the science of studying the genome or blueprint contained in the DNA of a human or other species, along with what happens when certain genes interact with each other and the environment. Genomics research is helping Canadians make scientific breakthroughs and advances in important areas, such as health, fisheries, forestry, agriculture and the environment.

To date, the government has provided over $900 million to Genome Canada. This support has helped establish Canada as a world leader in genomics research, including in the areas of cancer, infectious and rare genetic diseases, adverse drug reactions and crop sciences. What is more, Genome Canada-funded research has contributed to the development and training of thousands of highly skilled individuals and the creation of more than 20 new companies.

I am proud to note that Genome Canada has a centre in my hometown of Winnipeg as well as centres in Vancouver, Calgary, Halifax, Montreal and Toronto. The additional $65 million for Genome Canada proposed in today's legislation would launch a new competition in the area of human health, while also covering ongoing operating costs.

Genome Canada President Dr. Pierre Meulien has expressed his appreciation for this new financial support, noting:

--it provides the means necessary to continue advancing our genomics...It also reiterates the government’s interest and priority in cultivating a genomics enterprise in Canada--

These are just two of the many important measures we are proposing in the Supporting Vulnerable Seniors and Strengthening Canada’s Economy Act. These measures will help Canadian families, particularly the most vulnerable ones. This bill is an essential part of implementing the next phase of Canada's economic action plan, which will ensure that our economy recovers for the benefit of all Canadians, today and in the years to come. For these reasons, I once again call upon the House to support this bill promptly and without delay.

The House resumed consideration of Bill C-3, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011, as reported (without amendment) from the committee, and of the motion in Group No. 1 to 7.

Speaker's Ruling

[The Speaker, Conservative, Andrew Scheer]

I am now prepared to make the ruling on Bill C-3, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011. There are seven motions in amendments standing on the notice paper for the report stage of Bill C-3.

Motions Nos. 1 to 7 will be grouped for debate and voted upon according to the voting pattern available at the table.

I will now propose Motions Nos. 1 to 7 to the House.

The House proceeded to the consideration of Bill C-3, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011, as reported (without amendment) from the committee.

Business of Supply

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I move:

That, at the conclusion of today's debate on the opposition motion in the name of the Member for London—Fanshawe, all questions necessary to dispose of the motion be deemed put and a recorded division deemed requested and deferred to Tuesday, June 21, 2011, at the expiry of Government Orders provided that, notwithstanding any Standing Orders or usual practice of the House, if a recorded division is requested on any motion to dispose of the remaining stages of Bill C-3, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011, it shall stand deferred immediately following those divisions.

Finance

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

Mr. Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on Finance on Bill C-3, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011.

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

Mortgage Insurance

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, just before the recession, this government rolled out the red carpet for American companies that specialize in mortgage insurance. They invited the very companies responsible for the crash in the United States' housing market. With Bill C-3, the government is planning to take this risky policy even further.

Why should taxpayers have to assume the risks run by these American companies?

[Shelly Glover, Conservative, Saint Boniface, MB]

Thanks to our wonderful analysts.

There's actually an error in the French version of the bill. If we look at Bill C-3, after paragraph 2(1)(a) we see “or”, but in the French version there is no “or”.

On page 1 of the French version of the bill, at the end of proposed subclause 2(1)(a), there should be an “or” to reflect the wording on page 2 of the English version.

Could we call on officials from legislative services or Justice Canada if they are here? They may be able to explain this a little bit better.

Opposition Motion—Seniors' Poverty

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I congratulate you on being elected to this new Parliament.

Today we are looking at an NDP motion from our colleague from London—Fanshawe, calling for an end to poverty among the seniors, something we have talked about for some time. The member says that the government should use the guaranteed income supplement to accomplish that goal.

However, seniors collecting the GIS are not the only seniors facing challenges. This is the problem with the NDP. Focusing just on the GIS is insufficient.

We need to start to look at the real issues of poverty, pension income replacement and quality of life for all seniors in a much more holistic way. Trying to pass off a one-size-fits-all solution is irresponsible, reckless and short-sighted.

As the critic for seniors, pensions and women's issues, I will vote for this motion. I would expect all of us in the House would and should vote for it, but it is very limited when it comes to its real scope.

The Liberal Party is prepared to work, as we have before, to support the goal of ending poverty. I hope it is a goal that all of us in the House will work toward.

In our most recent campaign, the Liberals made senior issues central to our platform. The Liberals were proposing, as was the NDP, to increase the GIS by $700 million a year. If we truly want to eliminate all of those seniors who live below the poverty, there is only one way to do it, and that is by increasing the GIS by that amount of money.

Let us look at the corporate tax cuts. Simply eliminate one corporate tax cut of $1 billion and there would be enough to do a bit more than that.

The Liberal plan would benefit all 1.6 million seniors who are living below the poverty line, not half of them now and half of them in the next budget. The lowest-income seniors would have had an extra benefit of $650 a year.

I am not here just to poke holes in the NDP proposal. I am here to put forward constructive ideas, which is what I hope all of us will do in the House. The NDP plan is limited and overly simplistic, but the end result is very much worth supporting. Maybe we can all agree, following the debate today, on what the end goal will be.

The Conservative budget unveiled earlier this month includes a $300 million bump to the GIS. That increase will be accessible to some 680,000 of the poorest seniors in Canada. Again, it is for only those who quality, only those who are eligible, not all of those seniors living below the poverty line. In fact, what it is actually doing is giving those seniors enough for probably a cup or two of coffee a day.

This is what the Conservative plan does not do. It does not address the fact that women endure higher levels of poverty than men. It does not address the fact that 75% of Canadians do not have access to adequate pension savings, which is the core of the problem about which we are talking.

It does not address issues such as seniors' transportation or access to affordable medications. Nor does it address poverty faced by certain marginalized communities, such as rural, northern or Aboriginal Canadians.

What would I do differently if I had the opportunity to put something forward? Let me talk about some of the things I have done as the seniors critic in the last two years.

Last October I released a comprehensive white paper, which examined the issue of pension reform in a holisitic manner. It is available on my web site and I would be glad to share with anyone. I shared it with the government at the time I introduced it.

The paper contained 28 recommendations, covering everything from the cost of living increases and the establishment of a real poverty line to enhance the CPP and to make the Income Tax Act more senior-friendly.

I introduced the pension income bill of rights, which I have re-introduced in this Parliament. That bill would have given every person a chance to accumulate retirement income in a plan, which would be there in the long term for Canadians. It promoted good administration of retirement plans, to ensure that members of retirement income plans would regularly receive good, plain English information that they needed to understand their plan. However, to set out in law the goals to which we aspire legislatively as they relate to retirement income, a pension income bill of rights would protect pensions and protect pensioners.

Last week I put 15 motions on notice, aimed at dealing with seniors poverty in a real and substantive way. These motions build upon the ideas contained in that very same white paper.

One of those motions was to establish a national program for poverty prevention and independent living to provide support to Canadians over the age of 65 who had expressed a strong desire to remain in their homes regardless of advancing years or faltering health. Many of us, through the campaign, met seniors who were doing everything possible to remain in their home and were looking for assistance, whether that meant home care support, friendly visiting, or somebody checking in on them every couple of days to ensure they were well and had what they needed.

Another motion calls on the government to implement a national and voluntary supplementary Canada pension plan designed to provide enhanced retirement income savings opportunities and income support for Canadian seniors. This would allow people to contribute extra to a supplementary Canada pension plan and would help them save for their future. There is no vehicle for Canadians other than an RRSP. The current government is talking about a PRPP that would make banks and insurance companies rich, but would do little to help people save for their retirement.

Another motion calls on the government to launch an immediate review of the manner in which cost of living is calculated for the purposes of old age security pension, the guaranteed income supplement to the Canada pension plan and the Quebec pension plan.

Another motion is that the government should revise the existing Canada pension plan so as to remove any systemic inequities.

That talks about the failings of the current government and some of the things it could be doing. However, there are issues when it comes to the NDP motion and its failings.

Unfortunately, as much as I applaud today's motion, it is still nothing more than a long stream of motions put forward that fail to seriously address the problems. It is another list of sound bites, same kind of rhetoric, but it does not talk about what we really need to do to move forward. It sounds good, but it misses the mark by reducing a complex national program to a sound bite.

I propose we remove the politics in favour of genuine problem solving. I know the member for London—Fanshawe is very much committed to finding solutions to poverty especially among seniors and throughout the country.

As to some of the failings of the Conservative government, two years ago the minister stated in the House at question period that pension reform had no place in Ottawa. He said that the matter was provincial. The government has reluctantly retracted that stand due to massive public pressure and now admits it does have a role when it comes to pensions. However, the government has still not put forward any real solution to the pension crisis that the country faces. We know that 75% of Canadians do not have a pension plan and do not have the opportunity to save.

The government talks about Bill C-3, which it has the courage to call, “Supporting Vulnerable Seniors and Strengthening Canada's Economy Act”. For the $300 million to go to poor seniors in Canada, the government calls it, “supporting vulnerable seniors”. If it really wanted to take credit for that, it would have put $1.6 billion in there and eliminated the poverty level.

That bill helps seniors by providing $20 million to help the Canadian Youth Business Foundation. I am not quite sure how that would help seniors.

Also, Bill C-3 would help seniors by strengthening the government's oversight of the mortgage insurance industry. I am not sure how that helps seniors either.

As well, it would help seniors by reducing the in-study interest rate for part-time students to zero, bringing them in line with full-time students. How is that strengthening vulnerable seniors? I do not think it does.

Let us talk about the way ahead, the way we want to go, the way we would hope all of us would work toward to making a change. We need to change our national priorities.

In 2010 the government spent more than $1 billion on things such as fake lakes, snacks, hand lotion and glow sticks at the G8 and G20 summits. That is more than $1 billion and yet all it has for seniors living below the poverty line is $300 million. There is clearly a problem. It does not have the same priorities that a lot of us have.

At the same time, the Canadian Association of Retired Persons tells us that 200,000 seniors still live in poverty. That same $1 billion used for fake lakes, snacks and hand lotion could have been used for seniors. Increasing their income by $5,000 would give them free groceries for a year. This must change.

In the way ahead, the government says it wants to stop elder abuse. That is a very important issue and something we need to take a stronger stand on. However, on page 179 of the 2011-12 estimates, the government committed to slash the funding to non-profit organizations that are working to reduce the incidence of elder abuse and fraud. How can the minister stand and say he is going to reduce elder abuse and then turn around and cut the money that supposed to do that? It is the doublespeak that we continually hear. I could other words than “doublespeak”, but I will not in respect to the Speaker and the House.

That is right, despite the promises of help to prevent elder abuse, the government cut it by 44%. Elder abuse is a heinous crime that can and must be stopped. Again, it is all about priorities. Sound bites will not reduce poverty in our country, end elder abuse or alter the government's priority on pension security coverage inadequacy.

The white paper that I put forward in the Liberal plan is comprehensive, targeted and affordable. I would like to invite the government to start taking its responsibility for moral leadership more seriously.

We talked today about what the way ahead is and where we are going. It is the beginning of the 41st Parliament. I believe the issue of seniors for the first time in the last election, thanks clearly to the opposition and a variety of organizations, made it very clear that seniors have to be looked at seriously, treated with a level of respect and given the hand up that they need in so many ways.

I heard about housing throughout the campaign. Some people want to stay in their homes and want the support to be able to do it. For others it was a question of moving into apartments better suited to their needs, but there was nowhere to go. For the aging population, there is a need for more nursing homes. There is a whole segment of issues that need to be addressed in a much more mutual way, along with the provinces of this country.

The Liberal Party of Canada introduced old age security. The Liberal Party of Canada introduced the guaranteed income supplement. The Liberal Party of Canada also introduced the Canada pension plan and in the future hopefully will introduce the supplementary Canada pension plan. Clearly, Liberals have shown their commitment to not only ending poverty but ensuring that Canadians can retire with dignity and a quality of life. It is an objective of the Liberal Party and one that it will continue to fight for.

I am thankful for the opportunity to speak today. I again applaud my colleague from London—Fanshawe for bringing the issue forward today. I hope that together all of us in the House can move this issue forward and find a way on a national level to truly help our seniors, to ensure that they have the quality of life they very much yearn for and do not have to eat macaroni and cheese twice a week or be unable to fill prescriptions. We are very focused on the poorest of the poor at this particular time.

[Finn Poschmann, Vice-President, Research, C.D. Howe Institute]

Thank you very much, Mr. Chairman.

Good morning, members of the committee. It is an absolute delight to be here.

I am Finn Poschmann, vice-president of research at C.D. Howe Institute, a non-partisan, non-profit think tank. It is my absolute pleasure to open this conversation this morning on the proposed legislation before us, the budget implementation bill, Bill C-3.

The budget implementation bill has a number of different parts. I am going to focus exclusively on part 7, which introduces an act, the Protection of Residential Mortgage or Hypothecary Insurance Act. This is very much the interesting different and new part of the legislation. It is something that was expressed telegraphically in the two versions of budget 2011, wherein the government of the day proposed to introduce legislation extending a more stable framework for the financing and insurance of residential housing in Canada.

With this proposed act, the government has acted on its stated intention to introduce legislation and a framework for regulating the Canadian mortgage insurance business. This is probably a good thing. It is an important business too.

The mortgage market has made home ownership affordable for many millions of Canadians. The mortgage insurance market has given lenders the security they need to make ownership affordable for millions of first-time buyers and for others with less than a 25% down payment on the purchase of their homes.

The mortgage business--that is, the mortgage lending business and the mortgage insurance business--is very much part of the firmament of the Canadian residential housing system. It's part of our ethos. It has operated roughly as we know it today more or less since World War II.

It is important to get a feel for the size of the marketplace. CMHC alone is the largest insurer of residential mortgages in Canada. CMHC insures mortgages worth a face value of more than $500 billion. That's about one-third of Canada's GDP. That is a huge exposure. It also represents roughly 70% of the mortgage insurance market.

Part 7 of the bill, in the first instance, refers mostly to private insurers, a number of companies that in a typical year operate within roughly the other 30% of the mortgage insurance marketplace. This proposed act expresses in legislation and then regulation an arrangement that already exists in the form of agreements between the Department of Finance and the private mortgage insurers.

Private mortgage insurers, which operate, as I said, in roughly one-third of the residential mortgage insurance market that CMHC does not occupy, have their liabilities guaranteed by the Government of Canada, less a 10% deductible. We could call that a 90% guarantee. This makes it possible for the private insurers to compete in the residential mortgage insurance business with CMHC.

CMHC is a crown corporation, the liabilities of which are backed 100% by the full faith credit of the Government of Canada and therefore the federal taxpayer. This means that CMHC's cost of capital is less than it is for the private insurers. In order words, it costs the private insurers more to go to the market to raise money to underwrite the insurance premiums that they, in turn, write. It costs more because they do not have the Government of Canada's backing. But as I indicated, the system works well enough that the existing private insurers tend to hold about 30% of the market. The system more or less works, however imperfectly it may do so.

Turning to the proposed legislation generally, it is a very good thing to codify in legislation what currently exists as more or less informal practice in the form of agreements between the Department of Finance and the private insurers. This is especially so when the numbers are as large as they are in the mortgage insurance marketplace.

Mr. Chairman, a number of new folks around the committee table may not have heard me on this point: it's often of significant concern when legislation leaves too much of the detail to regulation. That can be a problem, because legislators, parliamentarians, then aren't clear on some very, very important details that determine the outcome of the things they legislate.

That's a common problem in legislation. I think it is not so much a problem in this case. I think the drafters of this tight legislation have done a pretty good job of striking a balance between legislation and leaving space to determine details and parameters in regulation. I think they've done a not at all bad job.

I mention this not just because the devil is always in the details, but because of the critical importance of getting regulation right and getting it right in this instance because it will have a huge impact on the mortgage insurance landscape going forward. What the legislation--again, part 7 of the act before us--imposes or creates is the authority for private mortgage insurers...or rather, it requires them to meet capital adequacy requirements defined by OSFI that other financial institutions must meet. This is nothing new, but we are going to rely for individual stability on capital adequacy requirements on the part of mortgage insurers.

The legislation also says that, by regulation, the minister may collect a fee from the mortgage insurers commensurate with the risk to which the Government of Canada is exposed through the Government of Canada's backing of the mortgage insurers' underwriting of mortgage lending. That is probably a very good thing. As it stands--or to this point--mortgage insurers have been setting aside in an account roughly 10% of the premiums they write to backstop, or rather, to have available in the event of failure.... This formalizes that arrangement. It allows the fees to be set by regulation and to do so ideally on a risk-adjusted basis. In other words, the government will collect fees commensurate with the risks to which Canadian taxpayers are exposed.

So on the face of it, this is a reasonably stable solution. In other words, with capital requirements defining the stability of individual financial institutions with an insurance premium or a reinsurance premium collected by the government and reflective of the risks to which the taxpayer is exposed, we have a potentially stable market outlook or market framework.

So it goes for the private mortgage insurance part of the business. In the last part of part 7, and a significant part of part 7--perhaps the most significant, from my perspective--are the sections dealing with the National Housing Act. These will affect CMHC quite specifically. What this does, in a way, is codify existing practice.

In other words, the legislation says that CMHC shall “provide” or “make available” to the minister, and the minister may make available to the public, any books or records that are relevant to determining the nature and scope of the corporation's activities and, perforce, the risks to which CMHC is exposed through its mortgage underwriting activities. Now, this is a good thing. Again, it represents something that's not very different in form, in face, from current arrangements.

Naturally, the Minister of Finance has an interest in looking at CMHC's books, as does OSFI. There are a number of informal arrangements through which our oversight agencies are able to have a look at what it is that CMHC does and the risks to which taxpayers are exposed through their insurance and securitization activities. However, it is an informal arrangement, not a formal one. It's good to have this in legislation.

The final point on this is that the legislation also grants authority to write regulation that will determine a fee that CMHC may be charged by the Government of Canada, representing the risks to which CMHC's activities expose the federal taxpayer. If this fee is risk-adjusted and matches the risks that CMHC takes on, we're moving into a new framework or a new sort of marketplace, where you have a much more level playing field, as between the private insurers and between CMHC. If the fees that the minister or the Government of Canada may charge CMHC are indeed risk-adjusted and do reflect that CMHC's liabilities are 100% backed by the Government of Canada, as opposed to 90% backed, we have moved or we will have moved--as I've said--into a very different, more competitive, more level landscape in the mortgage insurance business, and this is potentially a very good thing.

I'll stop there.