House of Commons Hansard #138 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was plan.

Topics

Petitions
Routine Proceedings

3:35 p.m.

Liberal

David Iftody Provencher, MB

Mr. Speaker, in the third, the petitioners pray that Parliament ensure that the present provisions of the Criminal Code of Canada prohibiting assisted suicide be enforced vigorously and that Parliament make no changes in the law which would sanction or allow the aiding or abetting of suicide or active or passive euthanasia.

The petition is signed by a number of my constituents from Morris and the Niverville area.

Petitions
Routine Proceedings

3:35 p.m.

Liberal

John Finlay Oxford, ON

Mr. Speaker, I would like to present a petition signed by a number of my constituents and constituents from surrounding counties. The petitioners call upon Parliament to urge the federal government to join with the provincial governments to make the national highway system upgrading possible.

Petitions
Routine Proceedings

3:35 p.m.

Liberal

Harold Culbert Carleton—Charlotte, NB

Mr. Speaker, pursuant to Standing Order 36, I am honoured to table a petition today. The petition contains over 100 signatures from the St. Stephen area of New Brunswick. The petitioners request Parliament to support an immediate initiation and conclusion by the year 2000 of an international convention which will set out a binding timetable for the abolition of all nuclear weapons.

Petitions
Routine Proceedings

3:35 p.m.

Reform

Dale Johnston Wetaskiwin, AB

Mr. Speaker, pursuant to Standing Order 36, I have the honour to table a petition from 27 Albertans from central Alberta.

The undersigned residents of Canada allege that 38 per cent of the national highway system is substandard and that Mexico and the United States are upgrading their national highway systems. The petitioners say that it would save lives, avoid injury and lower congestion, among other things. Therefore the petitioners call on Parliament to urge the federal government to join with the provincial governments to make the national highway system upgrading possible.

Petitions
Routine Proceedings

3:40 p.m.

Reform

Randy White Fraser Valley West, BC

Mr. Speaker, I have yet another petition from the good and concerned citizens of the province of Nova Scotia. In June of 1996 the Prime Minister of Canada announced that he would work toward diverting the Sable Island gas pipeline to Quebec City. It is unacceptable for the Prime Minister to decide the destination of Nova Scotia's natural gas without consulting Nova Scotians. Nova Scotians assert their right to control the destination of Sable Island gas and demand the federal cease tampering with this issue.

Questions On The Order Paper
Routine Proceedings

March 5th, 1997 / 3:40 p.m.

Fundy Royal
New Brunswick

Liberal

Paul Zed Parliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I suggest that all questions be allowed to stand.

Questions On The Order Paper
Routine Proceedings

3:40 p.m.

The Deputy Chairman

Is that agreed?

Questions On The Order Paper
Routine Proceedings

3:40 p.m.

Some hon. members

Agreed.

Supply
Government Orders

3:40 p.m.

Reform

Preston Manning Calgary Southwest, AB

moved:

That this House condemn the government for requiring Canadians to pay over 70 per cent more in CPP premiums, thus increasing payroll taxes that are a cancer on job creation, while refusing to eliminate the huge subsidy that those same Canadians must pay to maintain the gold-plated MP pension plan.

Mr. Speaker, I rise to speak on this motion which pertains to the government's 70 per cent hike in CPP premiums. I will begin with a brief review of the Liberal-Tory record on the Canada pension plan.

The plan was established in 1966 under the Liberal government of Lester B. Pearson. The plan was originally established as a pay as you go plan. It has been described critically by Bill Robson of the C.D. Howe Institute as a pyramid type scheme in which income for early investors is provided not from investment in real assets but from the capital of later investors.

During its 31 years of existence the CPP has never been administered by anyone other than Liberal and Tory administrations. Over the years various observers have pointed out that the CPP was headed for trouble and that it would require a significant increase in contributions to deliver the benefits promised, particularly to the aging baby boom generation.

Successive governments ignored this problem and the situation was allowed to deteriorate to the point where drastic action was required. On February 14, four days before the federal budget was brought down, the finance minister therefore announced that Canada pension plan premiums would be increased from 5.8 per cent of earnings to 9.9 per cent of earnings over six years, a whopping 73 per cent increase in payroll taxes, the greatest single increase in payroll taxes in the history of the country.

He also announced that despite the increase in premiums there would be no increase in benefits. Thus the average worker will end up paying a total of $1,635 per year matched by another $1,635 from the employer. Self-employed people will pay both shares just to receive a pension of less than $9,000 per year, in 1997 dollars.

What was most conspicuous about the government's announcement was what it did not contain. First, there was no acknowledgement of the mismanagement by both Liberal and Tory administrations which allowed the CPP to get into this situation in the first place. As has been pointed out, if the CPP had been a private plan and had been mismanaged in this way, its managers would now be making licence plates in some penitentiary.

Second, there is no honest assessment of the negative impacts of the 70 per cent hike in payroll taxes, in particular the negative impacts on jobs, even though the finance minister on previous occasions has acknowledged that payroll taxes are a cancer on jobs.

Third, there is no serious assessment of alternative approaches to securing retirement income for Canadians at a lower cost such as those proposed by the Reform Party of Canada. What the government has neglected to do, my colleagues and I now propose to do in this debate, starting with an assessment of the negative job impact of a 70 per cent increase in CPP premiums. We want the finance minister to frankly admit, first of all, that the 70 per cent hike in CPP premiums is a payroll tax hike and to table in the House his department's assessment of how many jobs this payroll tax hike will kill so that we can propose counter measures.

In his presentation to the finance committee on October 17, 1994, the finance minister clearly referred to CPP and QPP contributions as payroll taxes and acknowledged their negative impact on jobs. But now that he has had to increase them, the finance minister is living in denial and says exactly the opposite. He now says that CPP premiums are not a payroll tax.

The finance minister refuses to acknowledge, for example, the position of the Minister of Industry, who ought to know about such things, and who said in the House as far back as 1991: "When you look at the burden of payroll taxes on small firms you have to include, of course, the Canada pension plan employer contributions. The combination of all these payroll taxes imposes an onerous burden, especially on small and medium sized businesses".

Perhaps most importantly, the finance minister is flatly contradicting the published views of the forecasting division of his department. I refer to a paper by Mr. Joe Italiano of that division published on April 25, 1995, entitled "Growth in CPP and QPP

contributions: Implications for employment and participation". In that paper Mr. Italiano clearly defines compulsory CPP and QPP contributions as payroll taxes. He also studied the employment impact of the Tory increases in these payroll taxes from 1986 to 1993 and showed how they had killed 26,000 jobs.

We therefore call on the finance minister to frankly and honestly admit that the 70 per cent hike in CPP premiums is a payroll tax hike of unprecedented proportions and to table in the House his department's assessments, and we know that they run these assessments, of how many jobs this payroll tax hike will kill so that we can propose counter measures.

In criticizing the government's ill-conceived approach to rescuing CPP, Reformers are not saying that nothing should be done, far from it. But what we propose in our fresh start platform is a more comprehensive reform than what the government proposes.

Our fresh start proposals to secure retirement income for Canadians are a combination of Canada pension plan reform, of expanding the RRSP system and of providing tax relief for lower and middle income seniors. Our proposals-we will argue this during the election campaign-deliver more retirement income per dollar invested than anything that the government has proposed to date.

I hope that MPs will ask me about this superior alternative in our question and answer time because it is worth the House considering.

Finally, I want to conclude with some observations on the government's moral authority to lead pension reform. To gain the trust of Canadian seniors, Canadian youth and the aging baby boomers, the government must be seen to be acting fairly and ethically on the issue of pension reform.

The Liberal government abandoned its responsibility to act fairly and ethically on this issue when it adopted, as its first pension reform priority, not the improvement of CPP, not the improvement of pensions for the Canadian people, but when it adopted as its first and highest pension priority the provision of the gold plated pensions for its own MPs and other MPs willing to receive them.

What does the average Canadian worker get at age 65 after contributing to CPP at 9.9 per cent of earnings? A lousy $9,000 a year. But what do Liberal, Tory, NDP and Bloc MPs get who accepted the gold plated MP pension plan at age 55? If they live to age 75, pension benefits amounting to: for the Conservative member for Sherbrooke, $4.3 million; for the Liberal member for Cape Breton-East Richmond, $3.9 million; and the NDP member for Winnipeg Transcona, $2.7 million. And the list goes on and on.

When it comes to issues of integrity, a moral authority to lead, we have observed that the government has a blind spot and perhaps a fatal blind spot.

On February 5 I asked both the Prime Minister in the House and later in the day his ethics counsellor in committee whether they did not see an ethical dimension, an integrity dimension, issues of right and wrong with respect to the political interference with the Somalia inquiry, the stonewalling of the Krever inquiry, the use of the justice department to go on a political witch hunt and the Prime Minister's broken GST promise.

The Prime Minister professed not to understand what I was talking about but the answer of his ethics counsellor was more revealing. I was asking about ethical matters, matters of public trust and integrity and right and wrong. On February 5, 1997 at the Special Joint Committee on A Code of Conduct he said: "I think you are speaking about policy questions, questions in which there is a difference between opposition parties and that of the government. It is the essence of our democratic system. I do not believe I can go and take your question"-questions about the ethics of those situations-"any further than that".

In other words, political interference and cover-up in the investigation of a murder, stonewalling an inquiry into tainted blood from which Canadians died, misuse of the powers of the justice department, breaking a key campaign promise and denying you broke it-I would add to that list giving yourself a gold plated pension while giving Canadians tin plated pensions-by the ethics of the Prime Minister and his ethics counsellor are simply differences of opinion on policy matters, not matters of trust or integrity or right and wrong.

If these are the ethical standards of the government, I believe it will never be trusted by Canadians to bring fairness and integrity to the pension issue. By its own actions and blindness it has forfeited that right to others.

To conclude, I am reminded of a study on integrity and 19th century British politics by the historian D.C. Somervell. He focused his study on two British statesmen, William Gladstone, the moralist who if he did not see right and wrong in an issue was uninterested in it, and Benjamin Disraeli, the pragmatist at the other end of the scale who never saw right or wrong in any issue, only differences of opinion.

What was Somervell's conclusion? He concluded that while it is an error to discover moral issues where none are in fact at stake, it is a greater error to be blind to them when moral issues really arise.

When the government put the old age security of MPs ahead of the old age security of Canadians, it committed that greater error, which is why I urge hon. members to support the motion before the House.

Supply
Government Orders

3:50 p.m.

Liberal

Charles Caccia Davenport, ON

Mr. Speaker, it is worthwhile noting that while given 20 minutes to speak on this subject matter, the member for Calgary Southwest devoted barely half of his speech to the subject matter on the Order Paper which reads in part: "This House condemn the government for requiring

Canadians to pay over 70 per cent more in CPP premiums-," and so on.

It is a fully misleading statement. The fact that the hon. member would devote half of his time speaking about tainted blood, misuse of justice, integrity of government, ethical standards rather than addressing the subject matter of the Canada pension plan demonstrates how thin and how poorly researched his subject and his speech are by the people who prepared it for him.

Obviously the member from Calgary does not know his subject and the people who prepared his speech for him today ran out of steam in dealing with it, so much so that he had to fill up the time available to him with other subjects which are not contemplated in the motion.

The member from Calgary is trying to mislead Canadians by convincing them that there is a 70 per cent hike in the Canada pension plan contributions. I would like to ask the member for Calgary Southwest whether he would use his ability to go through the proposal that has been approved by the 10 provinces and the Government of Canada and verify for himself that the 70 per cent figure is totally wrong. The reality is that the increase for the employee goes from 2.9 per cent of pensionable earnings in this year to 3.5 per cent in 1999 and gradually to 4.9 per cent by the year 2003.

Supply
Government Orders

3:55 p.m.

Reform

Preston Manning Calgary Southwest, AB

Mr. Speaker, I will answer the hon. member's points by making three of my own. First, in not using all the time allocated to me, I am of the belief that if you want to practice economy in government it starts with economy of speech.

Second, I found the member's comments interesting because they illustrate the last point I was trying to make. The member obviously sees no connection between getting the moral authority from people to reform pensions and the fact that the government lost that moral authority when it gave its party the MP pension. The very fact that the member sees no connection between that issue and the MP pension precisely illustrates the blind spot of the government.

With respect to his substantive point, Reform has gone through the proposals that the minister and the provinces agreed to with respect to the reform of CPP. It is our conviction that the CPP cannot be fixed simply by working on it. We have to look more broadly at all the contributing factors to retirement income. That is why our proposal includes the following elements which I will take just a couple of minutes to explain.

First, a guarantee that existing seniors, every Canadian aged 60 and above, will receive all the benefits promised to them by CPP.

Second, a proposal to shift younger Canadians on to an expanded RRSP system, mandatory, tax sheltered retirement savings accounts like RRSPs and these deliver, of course, greater pension benefits per dollar invested than anything that has ever been proposed for CPP.

Third, for older workers not young enough to accumulate an adequate retirement income by expanded RRSPs alone, we propose a transition combination of CPP and expanded RRSPs to ensure pension benefits at least on a par with CPP if not better.

Finally, through our fresh start tax relief proposals, we propose to lift 1.2 million Canadians, including 300,000 seniors, off the federal income tax rolls altogether, thus improving their retirement income.

If one takes the collection of those things, the modified CPP, the expanded RRSPs and the tax relief afforded to seniors, our argument is that the package delivers greater retirement income per dollar than anything we have seen from the finance minister or from the government.

Supply
Government Orders

3:55 p.m.

Liberal

Harold Culbert Carleton—Charlotte, NB

Mr. Speaker, hopefully I will be brief and the leader of the Reform Party will be brief in his answer.

I listened very carefully to the presentation this afternoon. My understanding is, along with some other things, he wants to expand the RRSP system.

I would like to pose a question to the leader of the Reform Party stemming from his presentation this afternoon. Does he realize and is he considering in his Reform program, the fresh start program, that the CPP which came into being in 1966 actually has several aspects? It includes not only the retirement benefit plan but a disability option, a death benefit, and a benefit for spouses and children in the unfortunate or untimely death of the contributor. Are these not important aspects to the Reform Party?

I note with regard to his comments that in comparison the members' pension program was changed a year and a half ago. There are three important aspects of that program. The minimum retirement age was reduced to age 55 or increased to age 55. There had never been an age limit before. The reduction in benefits of over 20 per cent saved over $3 million in one year alone. It also eliminated double dipping which is something the Reform Party could check its members on.

Supply
Government Orders

4 p.m.

Reform

Preston Manning Calgary Southwest, AB

Mr. Speaker, I am delighted to hear these members defend the MP pension plan. I invite the hon. member to join me in any place in the country. We will round up 1,000 people. The hon. member can defend the MP pension plan and I will argue against it. At the end of the day I do not think there will be much question about where the Canadian public stands.

With respect to the member's substantive question at the beginning, when I say we propose to guarantee the CPP benefits to the existing generation of seniors and make provisions for others, we

intend to guarantee the entire range of benefits. We are not just speaking about retirement income.

With respect to survivor benefits, under this expanded RRSP program we propose a substantial improvement over CPP. We propose to improve the retirement incomes of surviving spouses, particularly elderly widows, by proposing that 100 per cent of the funds of a deceased individual's RRSP would be transferable to a surviving spouse tax free. Nobody would have to go hat in hand. That is a far superior survivor benefit to that offered by CPP.

Supply
Government Orders

4 p.m.

Liberal

Julian Reed Halton—Peel, ON

Mr. Speaker, first, I point out to my hon. friend across the way in terms of members' pensions that 400 of the 600 living ex-members of the House get no pension whatsoever.

Second, I have a young constituent who was permanently disabled at the age of about 31. If it was not for the CPP disability clause he would have nothing. He has no family. He has no other means of support.

Supply
Government Orders

4 p.m.

Reform

Preston Manning Calgary Southwest, AB

Mr. Speaker, I repeat. We made clear that we are continuing to support the benefits of the CPP program to the existing generation of seniors. Therefore the member is going down the wrong path by implying that we will cut that.