Evidence of meeting #45 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was plan.
A recording is available from Parliament.
5:15 p.m.
Conservative
The Chair Conservative James Rajotte
We'll have one person respond.
Who would you like to respond, Mr. Brison?
5:15 p.m.
Pension Lawyer, As an Individual
I could just ask this whole committee a question. Does anyone know what is net asset value? Most people I ask in my day-to-day life say no. They don't realize that when they see their statement from their RRSP provider, the value that's reported is not the real value. It's the value net of fees. So when they see on their statement administration fees for the year of $100, they think that's all they're paying in fees, because they don't know. These are educated people. These are lawyers. These are accountants. These are people I deal with every day. If they don't get it, I certainly don't think the average Canadian is going to get it.
5:15 p.m.
Conservative
March 1st, 2012 / 5:15 p.m.
Conservative
Brad Butt Conservative Mississauga—Streetsville, ON
Thank you very much, Mr. Chair, and thank you, committee members, for the opportunity to join you this afternoon. I've been following this piece of legislation very closely. I came from a small business background before I got elected. I want to share a story with you and ask our guests, our witnesses today, to comment on it.
Before I got elected to Parliament, I ran an association in Toronto for owners of apartment buildings, and there were only two people on staff. There was me, as the executive director, and I had one administrative person who worked with me. We had a heck of a time figuring out how we were going to get a pension system for two employees. Nobody would touch us. They were not interested; it's too costly. It doesn't make any sense to have it for two people. We couldn't pool with anybody else. We looked into chamber of commerce plans, as Mr. Jean mentioned, and all this other stuff. It was way too complicated.
Doesn't this proposal meet the objective for those employers, those very small companies, with two, three, four employees, so that they can now create a pooled registered pension program? Two employees can contribute to it as long as they work there. The employer would also have the option to top up, to put their contribution in...as well as the one I clearly would have put in if I had had that option, if I were still working there. We'd be jumping all over this kind of a plan, because it's flexible. It's another tool in the toolkit. It makes a lot of sense I think for those very small businesses that have two to five employees, as well as self-employed people who may not have another option because they can't participate.
I don't know who wants to jump in on that. Is that not the audience we're trying to target with this new plan, a new tool, something extra that we have, those companies and those employees who work in those businesses so they can finally have an employer-employee contributed pension program?
Who wants to jump in on that?
Go ahead, Mr. Benson, if you wish.
5:20 p.m.
Lobbyist, Teamsters Canada
I agree with you in that regard. It's not just two people; it's groups of 25, 30, 50, up to 100. How do you convince OSFI that they can come into a Teamster's plan? How do you convince them? We have $1 billion and we'd love to take them, but we can't. It's not just two or three or four. It's also for people who own the company, the self-employed. These are people who are owners. Why should we leave them to the travails of high-priced RRSP products and high-priced products when they can get something cheaper? We shouldn't kick them to the curb.
I think the CPP, over time, is the way to go, but there are whole groups of people like that who it would really help and I think make a big difference.
5:20 p.m.
Conservative
5:20 p.m.
President, Quebec Employers' Council
The answer is yes, as simply as that, because what you're also talking about is the need for employers—not only employees but employers—who would like to provide something that enables them to compete with other companies. There are many employers who would like to offer something, and they don't necessarily have in the regulations all the options they want. I think it's a good idea.
5:20 p.m.
Conservative
5:20 p.m.
Senior Research Officer, Canadian Union of Public Employees
Just briefly, I appreciate the problem and the challenge. What's interesting to note is that I'm sure when you were an employer in that instance, you already had one pension available in the CPP. We all know the CPP doesn't pay very much, but what it does pay is secure. That's what I would emphasize. Yes, this creates an option, but it's really a savings option. Our view is that the take-up will be very low and the security will be very low.
5:20 p.m.
Vice-President, Distribution and Pensions, Canadian Life and Health Insurance Association Inc.
I'd agree with your comments. This creates another option in the toolkit. It's innovative and it provides opportunities, not just for those small businesses but for.... When you look at how 50% of private sector employees don't have access to anything, it provides an opportunity for millions of Canadians.
5:20 p.m.
Senior Researcher, Social and Economic Policy Department, Canadian Labour Congress
The problem I have is that the insurance industry in particular—but other providers—already market DC plans and group RSPs to small and medium-sized enterprises, and there's very little evidence of significant take-up there. There just has been for so long.... When there's an option to have a pension plan in your workplace for small and medium-sized enterprises, we have about 14% of those taking up group RSPs. There's just little evidence that it's the fees or the administrative burden that will make the difference with PRPPs.
5:20 p.m.
Pension Lawyer, As an Individual
In your particular case, I would just put you in a simple RRSP with exchange-traded funds, where you pay very little in administration fees. If you want to have a life-cycle fund so you don't have to worry about where you put your money, that's available as well. So I'm not sure that we need new legislation; it already exists.
5:25 p.m.
Conservative
5:25 p.m.
Economist and Coordinator, Community Services, University of Québec at Montreal, As an Individual
I want to say that I agree with the Teamsters Canada representative.
In my experience, the defined benefit plan that we offer to community groups does indeed attract employers who have, on the average, six employees or less. That was set up because the far more effective solution, i.e. improving the Canada Pension Plan and the Quebec Pension Plan, is not being implemented at this time. However, the multi-employer plans are suitable for small groups.
5:25 p.m.
Conservative
5:25 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
I wasn't sure if Mr. Laporte was recommending to disclose those fees in those pension statements or not. Was that what he was recommending, that legislation should be brought forward...?
5:25 p.m.
Conservative
5:25 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
It's a point of clarification. I was just wondering, Mr. Chair.
5:25 p.m.
Conservative
