House of Commons Hansard #150 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was claims.

Topics

Specific Claims Resolutions Act
Government Orders

5:15 p.m.

The Acting Speaker (Ms. Bakopanos)

All those in favour of the motion will please say yea.

Specific Claims Resolutions Act
Government Orders

5:15 p.m.

Some hon. members

Yea.

Specific Claims Resolutions Act
Government Orders

5:15 p.m.

The Acting Speaker (Ms. Bakopanos)

All those opposed will please say nay.

Specific Claims Resolutions Act
Government Orders

5:15 p.m.

Some hon. members

Nay.

Specific Claims Resolutions Act
Government Orders

5:15 p.m.

The Acting Speaker (Ms. Bakopanos)

In my opinion the yeas have it.

And more than five members having risen:

Specific Claims Resolutions Act
Government Orders

5:15 p.m.

The Acting Speaker (Ms. Bakopanos)

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

Specific Claims Resolutions Act
Government Orders

5:45 p.m.

The Speaker

I declare the motion carried.

(Amendments read the second time and concurred in)

The House resumed from October 31, consideration of the motion that Bill C-54, an act to amend the Federal-Provincial Fiscal Arrangements Act and the Federal-Provincial Fiscal Arrangements Regulations, 1999, be read the second time and referred to a committee.

Federal-Provincial Fiscal Arrangements Act
Government Orders

5:55 p.m.

The Speaker

The House will now proceed to the taking of the deferred recorded division on the motion at the second reading stage of Bill C-54.

(The House divided on the motion, which was agreed to on the following division:)

Federal-Provincial Fiscal Arrangements Act
Government Orders

5:55 p.m.

The Speaker

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Finance.

(Bill read the second time and referred to a committee)

Federal-Provincial Fiscal Arrangements Act
Government Orders

5:55 p.m.

The Speaker

It being 5:58 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

Canada Pension Plan
Private Members' Business

November 4th, 2003 / 5:55 p.m.

Canadian Alliance

Keith Martin Esquimalt—Juan de Fuca, BC

moved that Bill C-428, an act to amend the Canada Pension Plan (adjusted pension for persons with other income above the level at which the second percentage of income tax applies), be read the second time and referred to a committee.

Mr. Speaker, Bill C-428 deals with one of the most pressing problems that will affect us in the future. We have an aging population and this demographic threatens to rupture our social programs in the future unless we deal with these challenges today. In particular, it will have a profound impact on our health care system and on our pension system.

Bill C-428 is the first of two bills that I put together dealing with the issue of pensions, specifically, how we ensure that our public pension schemes will be there for us and successive generations. If we do not deal with this we will have a sea of seniors, particularly low and middle income seniors, believing their pensions will be there for them in the future but, unfortunately, will not be there for them.

I want to provide the House with a few specifics. In 1973, 7% of our population was over the age of 65. Today it is 13%. By the year 2030, a staggering 25% of our population will be over the age of 65. In other words, two to three people working at that time will be supporting a retiree. Let us think for a moment what that will do to our pension plans.

We know our aging population will increase because people are living longer. Today it is estimated that a man will live to an average age in the upper seventies and a woman to the average age in the low eighties. It is anticipated that in the year 2030 a person's average lifespan will be 90 years of age. This means that people will receive money from their public pension plans for 25 years.

On top of that, our birthrate is falling. With our aging population there will be a huge demographic bubble. We have a truncated population that is working with a smaller and younger population coming up beneath it. As I said before, this demographic bubble will cripple and punish our pension plans unless we deal with this problem today. The Europeans and the Americans have begun to deal with this problem but we have not. If we fail to deal with it, it will be at our peril.

Bill C-428 has several purposes. First, it would open the debate on the issue of saving our pension plans and our social programs given this demographic pressure, and second, it offers solutions to saving our CPP.

Specifically, Bill C-428 does the following. If people want to retire at the age of 65 they can. If they want to continue to work past the age of 65, they can continue to work and receive their income and still receive a graded percentage of their CPP. For example, people who are age 65 will receive 40% of their CPP premiums. People who are age 66 will receive 50%. This amount will increase to a full 100% at the age of 70. This acts as an incentive to keep people in the workforce. It also reduces the demand on our CPP, and that is important.

The government has been forced to successively increase the amount of contributions we make so that today's contribution of 9.9% is a 175% increase from what it was when the CPP was originally put forth in 1966.

The purpose of the bill is to encourage people to stay in the workforce. As I said previous, in the future fewer people will be in the workforce. How do we encourage them to stay? Back when the retirement age was set at 65, the average lifespan was less than 60. Now it is higher. People at the age of 65 or 70 years of age are physiologically and biologically much younger than people at that age some years ago.

Furthermore, many of the jobs that are available today are in the service sector and that sector does not require the great physical challenges that occurred in times past in the manufacturing and resource sector.

People want to work. A lot of people are having difficulty making enough money to put some aside for their retirement. Why not give them the opportunity to work? Why not encourage them to stay in the workforce and give them the ability to provide for themselves?

The full concept of a mandatory retirement age of 65 in my view is obsolete. We should retire the mandatory age of retirement. It is long overdue. It is an anachronism from times past.

By keeping people in the workforce we are also keeping the brain trust. Many people between the ages of 65 and 70 are our most productive workers. They are often the brain trust in organizations. It would be a shame to lose that by farming people out to retirement when we could greatly use their skills, capabilities and experience.

The other aspect of the bill, which will be dealt with at a subsequent time, is the notion we have of the old age security system. It should be focused on the lower to middle income seniors in an effort to save it. As I said before, that money comes from general revenues. As time passes, the demands we will be putting on those general revenues will increase.

We should also ensure that the voluntary component of savings are actually strengthened. For a long time the government has stood by its anachronistic policies that have prevented people from providing for themselves upon retirement.

There are a few solutions. We should abolish the foreign content in RRSPs. There are so many ways for people to bypass the situation that it makes no sense for the government to oblige everybody else to adhere to this anachronistic system. We should double the amount of money people are allowed to put away in their RRSPs. We should allow people to pull out $15,000 tax free from their RRSPs after the age of 60.

There is going to be greater and greater difficulty to provide for a variety of programs, including health care. Why not enable people to provide for themselves which would allow them to pay for those things that they would like to have and which perhaps may be life saving? As a physician, I see that many things that we would like to provide for our patients are not covered. People will be forced to pay for those things themselves. Where will they get the money from?

It would be innovative of the government to allow people over the age of 60 to remove $15,000 from their RRSPs. It would be a godsend to them. It would provide for the things they need, such as food on the table or medication when they get sick. Perhaps it would help provide for their parents who would be in their nineties.

The World Bank said that there are three pillars to a sustainable, reasonable, fair and strong pension system. The first is a tax financed, means tested, minimum pension system. We have that in the OAS/GIS system. The second is an employee based mandatory pension plan. That is the CPP system. The third is private pension plans.

There are five goals for whatever we do. The first is adequacy, so that people who are retired will have enough money in their pockets to provide for themselves. The second is fairness, so that people can retire at a reasonable age and that they will have enough money to provide for themselves. The third is sustainability. Fourth is transparency. Fifth is that the system is efficient, in other words, that we get the greatest percentage and rate of return from the system that we have today.

There is a big change coming and the House is probably going to prorogue. Everybody knows this. This bill may not go anywhere, but I hope that the government listens to the essence of the bill and the intent with which it was introduced in the House. If we do not take seriously the impact of our aging population on our social programs, we will be left with tens of thousands, perhaps hundreds of thousands of seniors who cannot put roofs over their heads, food on their tables, or pay for their medication when they get sick. What kind of a society will we have if there are so many people who worked so hard for so long for our country and we are not there to help them?

The HRDC website clearly states that our publicly funded pension plans are there as a supplement to our private pension plans.

It is sad to say that until recently with the declining real incomes that Canadians have had, it is the low and middle income seniors who are the most hurt by the government's current regressive tax policies and its regressive policies with respect to pension plans. It cannot continue to take the easy route out simply by trying to increase contributions on the backs of taxpayers, on the backs of employees and think that this is a panacea which in the future will enable seniors to provide for themselves. The facts simply bear out that it is a fallacy.

I looking into the future and see an aging population and a shrinking workforce. That is going to have an impact which is not being acknowledged at this point in time.

The government could easily deal with the concept of mandatory retirement tomorrow. Mandatory retirement is ageism. It is discriminatory. It would be easy for the government to bring in a bill to abolish the mandatory retirement age of 65. Those who would choose to retire at 65 could do so. They would receive the benefits they would normally have, but for heaven's sake, we should give people the opportunity to provide for themselves.

The government should look at the work being done by Dr. David Baxter at Simon Fraser University and the book Boom, Bust & Echo of which Dr. Michael Foot is a co-author. That book and the work that is being done by Dr. Baxter at Simon Fraser provide the specifics and the solutions for the pension problems we will have in the future. They also address the impact on our health care system.

Everybody in the House knows from their personal family experience what will happen in the future. The demands on our health care system and the ability of the public purse to pay for all we ask will create an increasing chasm. More and more people will fall through the cracks to the bottom. More and more people will be unable to get the health care they require. It may be bad today, but it will only get worse in the future.

We in the House across party lines have ideas. Whether or not we have the right ideas is irrelevant, but all of us have ideas that are well meaning and constructive, and which we need to put into the mix. Out of the strong debate that will come from that will be good solutions which the government can act on in order to save our pensions and our health care system.

Everyone here knows of people who cannot get health care today when they need it. We know the pain and suffering they endure. People who are in severe pain are waiting 18 months and longer for hip replacements. There are children who have cancer and cannot get the medication they require because the government is not willing to pay for it. It is not that we do not have medications to treat people, it is that those medications are exceedingly expensive and the public purse is not deep enough to pay for the medications that those people require. That problem is going to get bigger. Rationing will become more extensive and more people, particularly the poor and those in the middle class will be the ones who suffer.

This bill is not about the rich. The rich can take care of themselves. This bill is about the poor and the middle class who will have significantly increasing difficulties in meeting their basic needs in the future. We also know the impact our aging population will have on issues such as housing. A number of people will not have housing. There is the impact of dementias on our health care system. All of these are issues which the government is failing to deal with. The solutions to those problems are out there.

All of us in the House are more than willing to work with the government to deal with these problems that affect all of our constituents. Through you, Madam Speaker, I implore the ministers involved to work to with us. We can pull together the best minds in our country and abroad. In that way we will come up with the best solutions to ensure that our aging population will have their basic needs met. We will not be faced with a sea of seniors suffering incalculable problems that we would prefer not to see.

Canada Pension Plan
Private Members' Business

6:10 p.m.

Shefford
Québec

Liberal

Diane St-Jacques Parliamentary Secretary to the Minister of Human Resources Development

Madam Speaker, thank you for giving me the opportunity to express my point of view on this bill, which would reduce Canada pension plan benefits paid to recipients between the ages of 60 and 69 whose taxable income is above a certain level.

I am very proud to have a chance to defend this plan that truly manages to offer income support to its contributors and their families, when they retire, become disabled or lose a loved one. I emphasize the term contributor, in other words people who have paid contributions to the plan during their working years.

I must admit that I am surprised at the harshness of this bill. Admittedly, I am not sure what prompted my colleague to present it, especially considering that the level at which benefits would be reduced is very low. For the 2002 taxation year, the reduction would have been applicable to an income as low as $31,677, which is just over $2,600 a month in taxable income.

We are not talking about CEOs of companies, or presidents of multinationals, or people who made a fortune on the stock market. We are talking about Canadians who worked hard, raised their children, and managed to put a little money aside and who have a little extra money to supplement their Canada pension plan benefits. That is precisely what we are asking Canadians to do. We are talking about average workers who, thanks to Canada pension plan benefits, are able to make ends meet.

The problem is not just the category of people targeted by the bill, but also the extent of the reduction of benefits for certain people. It is a question of a 60% reduction of their pension cheque. This bill comes from a member whose party brags about promoting lower taxes.

We also notice several administrative problems that would complicate the implementation of such a measure, for example: using different reduction rates based on age, or using an estimation of the client's income to calculate the reduction of benefits.

Given the fact that income can vary considerably from one year to the next, this last point would make the Canada pension plan impossible to administer.

It would be difficult to calculate a reliable estimate for many Canadians, which means that many people would receive cheques long after the year end, in order to compensate for the excessive reductions that would inevitably occur. However, some clients would have to reimburse overpayments because the estimate of their income was not high enough. It is a not a very happy picture.

And what should we do about clients who live outside Canada and pay taxes in that other place of residence? How could we assess or reduce their benefits?

Moreover, what about the federal-provincial repercussions of this bill? We cannot overlook the fact that the provincial governments coordinate the plan jointly with the federal government. The CPP Act says that two thirds of the provinces and two thirds of the population must accept a change of this kind for it to become law.

And another point: has the sponsor of the bill envisaged that the courts might decide that treating clients differently depending on their age is a form of discrimination, and contrary to the Charter of Rights and Freedoms?

Finally, this bill contravenes the principle of the guarantee on which the CPP is based, that is, that the amount of benefits a person receives depends on the amount of contributions and the length of time that person has contributed.

Passing this bill would undermine the foundations of the Canada pension plan and its agreement with its contributors.

But let us set aside those crucial details for a moment and ask ourselves why the hon. member believes it is necessary to make such drastic changes.

Is it because he believes that the financial health of the CPP is threatened and that we should begin to reduce benefits immediately? If so, he is mistaken, because many actuarial reports have shown that the plan is in good health and that current financial provisions are appropriate to present and future needs.

Or is it because he hopes these measures will encourage people to return to the labour market?

Again, he would be mistaken, since some people receive benefits, but not by choice. No one chooses to become disabled to a point where one can no longer work. No one wants to lose a loved one simply to receive survivor benefits.

For people who choose to retire before age 65, it is obviously unfair to suddenly change the rules and dramatically reduce their CPP benefits on short notice, especially when we know that some have decided to retire at a specific age according to a financial plan that they were encouraged to develop many years earlier.

This bill includes many drawbacks and no clear advantages. That is why I will vote against it and I urge other members to do the same. However, I am well aware that no program is set in stone, and that is also true for the Canada pension plan.

That is why CPP legislation needs to be reviewed by federal and provincial governments every three years. Instead of stripping CPP or reducing benefits in a panic, as this bill would have us do, we should instead continue to administer this plan in a conscientious manner by consulting the people concerned as needed and by maintaining our periodic reviews, because that is the only way to do things properly.

Together, we will ensure that the Canada pension plan is able to provide future generations with the same level of benefits that we enjoy today.

Canada Pension Plan
Private Members' Business

6:20 p.m.

Bloc

Suzanne Tremblay Rimouski-Neigette-Et-La Mitis, QC

Madam Speaker, like my hon. colleague, I am very pleased to speak on this bill, an act to amend the Canada Pension Plan (adjusted pension for persons with other income above the level at which the second percentage of income tax applies).

I listened very carefully to the presentation by the hon. member for Esquimalt—Juan de Fuca, because I was trying to figure out what his bill was all about. I had read it, I read it again earlier and I read the letter he sent us. Unfortunately, it reads:

“This bill contains the following provisions”.

It is too bad he did not take the precaution of sending his letter through the official channels of the House to have it translated. We could have received a French version, instead of just the English.

In his letter, he identifies five points covered by his bill. I have read the bill over and over, sent it to the research services, and even to a lawyer, and oddly enough, nowhere in this bill have we found what he said it contained.

Understandably, it will be very, and even hugely difficult for us to vote for this bill. There will be a free vote on the bill, but I would recommend to the members from my party that we vote against it. This is a bill that is fundamentally discriminatory, a bill that wold have people believe that, past the age of 65, we are still in our prime and can work ourselves to death.

Our life expectancy may be 80 years, but we should see what kind of life people have between the ages of 65 and 80. If workers can afford to take an early retirement at age 55, I do not see why they should be told that, if they stay on until the age of 65, they will receive a small portion of their pension as an incentive.

I find it quite awful that this bill is, in the end, negative. It is intended to be positive and our colleague's remarks contain positive aspects. It is true that the population is aging and that there will be fewer young people to support retirees. The statistics cannot be denied. This will be a problem.

Another problem is our very low birth rate. We cannot deny this either. However, as long as people aged 65 and up are being encouraged to remain employed, our economy can also provide employment for young people. This seems extremely important.

Our colleague also mentioned that it was important to increase or double the annual RRSP contribution limits. I do not object per say, except that I see no need to double the limit. It is currently about 15%. Allowing people to invest 15% of their income tax-free seems sufficient. There is no need to double it. That is one reason we oppose this bill.

Furthermore, the hon. member would also like to increase the limit on foreign investments. He wants to double the RRSP contribution limit and increase the limit on foreign investments. This is a surprising measure. I have known the hon. member since 1993. I had pegged him as more left of centre and not on the extreme right. Doubling the amount of money we can save and, additionally, invest abroad, is almost encouraging tax havens.

As you know, the Bloc Quebecois is averse to the idea of tax havens. To us it seems rather incompatible with the position the hon. member may be taking.

Bill C-428 would make it possible for people with taxable incomes above $60,000, the infamous second tax threshold, to work after the age of 65 and to receive a graduated portion of their pension. With this bill, the hon. member is seeking to attenuate the effects of demography. I am not convinced that this bill would achieve his objectives.

We shall vote against this bill—in any case I hope my colleagues will act on the recommendation I will be making in caucus—basically because it is discriminatory. I am somewhat uncomfortable voting against it but I would be even more so were I to vote in favour of it. This pension plan, with or without this new bill, does not affect Quebec, since we have our own pension plan. Therefore, this bill does not apply in Quebec. If there had been any advantages, I would have tried to find them, identify them and speak about them.

I shall listen to the debates that follow and during the time allotted for the hon. member to reply at the end of his speech—if we have the opportunity to resume this debate—I will ask the hon. member to explain what advantage there is in improving the precarious economic situation or improving the situation for people who want to retire or continue working. Nevertheless, the bill is not excessively clear.

Canada Pension Plan
Private Members' Business

6:25 p.m.

Progressive Conservative

Norman E. Doyle St. John's East, NL

Madam Speaker, I wish to say a few words on Bill C-428.

I commend the member for bringing forth the bill. As he mentioned a few moments ago, Canada is a greying nation. It is about time that people in positions of public responsibility took note of that very salient fact. We are living longer. Many people have the capacity to work beyond age 65.

To some extent, of course, we in the chamber are guilty of turning a blind eye toward a double standard. While 65 is the normal retirement age, in both the public and private sector, it does not apply here. People here can work beyond 65 and certainly, in the Senate people can work beyond 65.

As Canadians, we value freedom. Many would ask, should people not be free to work beyond the age of 65 if they choose to do so? If they so choose, why can they not also avail of the benefits of an adjusted Canada pension plan?

Some would ask, is it not better for the economy to have these people still productive past the age of 65? The people we are talking about here are people who choose to work, not people who are being forced to work or people who are required to work. If working makes them happy or for some reason is an economic necessity, then I would ask, why can they not carry on with a reduced Canada pension of course?

At the same time, these senior workers would reduce the financial pressure on the Canada pension plan. One of the aims and objectives of the bill is to reduce the pressure on the Canada pension plan by taking a reduced payout while these senior people continue to work. That makes perfectly good sense to me.

Bill C-428 would provide for a sliding scale of adjusted pensions over ages ranging from 60 to 69 years of age. For example, a working person taking Canada pension plan benefits between the ages of 60 and 65 would receive 40% of the CPP benefits. A 66 year old worker would receive 50% of CPP benefits and a 69 year old would receive 80% and so on.

I think this is a very good bill. The bill would also apply where the senior worker's taxable income exceeded the second tax bracket in our income tax system. Simply put, the system would apply to the majority of senior Canadians. It would afford them with a choice to continue working with a reduced Canada pension benefit as an incentive for remaining in the workforce.

Those who choose to retire at 65, of course, would receive 100% of their CPP entitlement. That makes sense to me.

I said earlier that we are a greying nation. This fact was brought home to me quite forcefully during the recent provincial election in Newfoundland and Labrador because of the last decade of out migration by young families. The greying of our province was probably more noticeable than in any other Canadian jurisdiction.

During the Newfoundland and Labrador election, I can tell members that seniors' issues played a prominent role. All the political parties had policy positions on issues that affected seniors and well they should. Today, seniors are more educated, more informed and they have a tendency to speak out on matters that affect them, and well they should. Indeed, they have no hesitation in making their views known at election time. They have become an increasingly important sector of the electorate and we in this Chamber would do well to pay them the respect that they deserve.

In this regard, there are a number of other matters that the House would do well to consider. We should eliminate, for instance, income tax altogether for low income seniors. Many would say that they have paid their dues. It was their blood, sweat and tears that got us where we are today. It would be a good idea to eliminate income taxes altogether for low income seniors.

Our nation's health care system needs to be adjusted as well, with added emphasis on home care for seniors so that they will be able to live longer in their own homes. We should assist seniors by giving them more flexibility with regard to their RRSPs. To help save for retirement, we should increase the RRSP contribution limit to 20% of income, for instance. If an individual were to cash in an RRSP tomorrow, the value of the amount cashed in would be added to the taxable income and would be taxable at the regular rate. Because they are registered retirement savings plans, why not give retired people a break? Why not let retired people cash in their RRSPs tax free up to a stipulated yearly limit?

I wish to commend the member for bringing Bill C-428 to the floor of the House, not only for its content, but because it deals realistically with the fact that we have an aging population. People are getting older. Whether or not we want to face up to it, a growing number of Canadians are facing up to it every day. Their needs, concerns and aspirations must become our common cause here in the House of Commons.

Much has been said in the House about the importance of renewed federal financial support for our health and education systems and properly so. The modern nation we call Canada is composed of people who are healthier, wealthier and more educated than their forebears, mainly because their forebears had the insight to put such publicly funded systems in place. However, because we are better informed and healthier, we are living longer. The success of the health and education system has created a new problem that our grandparents did not even know about.

Bill C-428 deserves serious consideration by the House. It treats our seniors with the respect that they deserve. The bill would apply where the senior worker's taxable income would exceed the second tax bracket in our income tax system. Simply put, it would apply to the majority of senior Canadians. It would afford them with a choice to continue working with a reduced Canada pension benefit as an incentive for remaining in the workforce, and to those who choose to retire at age 65 would of course receive 100% of their CPP entitlements.

We support the bill because it would provide more flexibility to seniors who want to work. It would help combat certain growing skill shortages in the economy. It would lessen the financial pressure on the Canada pension plan system and dare I say it? It would make some people happy.