House of Commons Hansard #102 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was pension.

Topics

Pensions
Government Orders

8:05 p.m.

NDP

The Deputy Chair Denise Savoie

The hon. member for Hamilton East—Stoney Creek.

Pensions
Government Orders

8:05 p.m.

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Madam Chair, my friend from the Bloc was speaking earlier about his concerns about companies that have gone under for a variety of reasons, such as AbitibiBowater's and Nortel's issues.

I have said before that we insure our homes, cars and ourselves. Is it not common sense that we should ensure our pensions? The NDP has proposed a national pension insurance plan, which would be funded by premiums paid by the plan holders. I am wondering if the Bloc would support such a measure.

Pensions
Government Orders

8:05 p.m.

Bloc

Luc Desnoyers Rivière-des-Mille-Îles, QC

Madam Chair, the Fédération des travailleurs et travailleuses du Québec is calling for some type of insurance to protect pension plans. We need to take a closer look at the approaches proposed by the Fédération des travailleurs et travailleuses du Québec and by other unions in Quebec to determine how to protect pension plans.

Pensions
Government Orders

8:05 p.m.

Bloc

Yves Lessard Chambly—Borduas, QC

Madam Chair, first I would like to thank my colleague from Rivière-des-Mille-Îles for his speech. He spoke about the two types of plans. I would like to ask him about the guaranteed income supplement, a public plan for seniors that he mentioned briefly, which is available to individuals whose old age pension income is too low.

Can he tell us why, under this government and the one before it, people who were entitled to the guaranteed income supplement did not receive it?

Pensions
Government Orders

8:05 p.m.

Bloc

Luc Desnoyers Rivière-des-Mille-Îles, QC

Madam Chair, I thank my colleague for his question.

Seniors must apply to receive the guaranteed income supplement. Unfortunately, a number of retired seniors were shortchanged by these two governments, by both the Liberals and the Conservatives. They did not receive the guaranteed income supplement because they had not applied. We are obviously calling on the government to make this automatic, to ensure that individuals are automatically registered for the guaranteed income supplement once they are entitled to it and have reached the required age.

Pensions
Government Orders

8:05 p.m.

Liberal

Gerry Byrne Humber—St. Barbe—Baie Verte, NL

Madam Chair, sometimes the principle of do no harm should guide the government members when they consider what bold actions are required to assist senior citizens so that they have stable pensions. But do harm they did, as I explained earlier to the House. The decision to amend Canada Revenue Agency policy on how registered retirement income funds are handled for the purposes of calculation of the guaranteed income supplement will cause huge, huge grief and insecurity for our senior citizens.

Seniors may not be aware of this change in May 2010, because certainly there has been no government publicity. Now, should they withdraw, say, $10,000 from their registered retirement income funds, RRIFs, to be able to adapt to or handle a major medical emergency like a heart attack or having to give care to a family member, the consequence is that $10,000 over and above the minimum annual that is required for withdrawal from a RRIF is all calculable for the purposes of whether or not that senior citizen will receive the GIS the following year. In addition to that, by not allowing that $10,000 to be considered optionable income in 2010, they will lose their GIS in 2011 and they will also lose certain provincial benefits that are tied to the GIS, such as a drug card. For the sake of a $10,000 withdrawal, those senior citizens will lose upwards of $17,000 to $25,000, and they do not even know they are about to lose it. This is wrong.

When we talk about the big scheme of pensions, we also have to consider the little details. That is a huge detail that is being lost by the government.

Pensions
Government Orders

8:10 p.m.

Bloc

Luc Desnoyers Rivière-des-Mille-Îles, QC

Madam Chair, as I said earlier, the guaranteed income supplement needs to be amended. As the Canadian Labour Congress, the CLC, and the FTQ are currently proposing, we need to increase both at the same time to ensure that payments are made by the Government of Canada and not the provinces. We need to undertake an in-depth study of all current proposals and ensure that we are looking to the future. We can no longer be confronted with the same things that we were confronted with during this crisis, where ordinary workers lost their houses, their retirement funds and their right to live with dignity.

It is unfortunate, and this situation needs to be corrected as quickly as possible. Proposals are currently being submitted by various retirees' organizations and unions. We need to act quickly and study things thoroughly. Every day that passes, retirees are suffering. Workers in Quebec and Canada are suffering. It must stop.

Pensions
Government Orders

8:10 p.m.

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Madam Chair, I am most pleased to take part in the debate on those pension reforms that are needed to protect and enhance the lives of Canada's seniors as they live out their sunset years.

From my reports, the House will know that over the last 19 months, I have been crossing Canada, holding some 39 community meetings, so far, on what I call the listening to seniors tour. I want to assure the House that these seniors have been very quick to tell me of their fears and their concerns about the future.

Today far too many of our seniors are forced to live in fear, just one crisis away from financial catastrophe. Seniors are worried about their private pensions and how they might be significantly less than what they were told they would be, or, as in the case of companies like Nortel, where there was a significant loss to the amount of pension income, they worry if they will have a pension at all going forward.

The genesis of my listening to seniors tour was when I was visited by a prominent group of seniors. One of my guests stated that seniors felt invisible to their government. This group also wondered why the government had given $14 billion a year in corporate tax breaks while, as they said, doing nothing for them.

The government will argue that there were things done over the past five years on behalf of seniors and some of that is factual. However, from the point of view of the seniors, they do not see that immediate impact for them.

One of the things we heard today was the corporate tax rate in Canada as compared to the United States. I may be incorrect but it is my understanding that the corporate rate in the U.S. 36% and we are nose-diving to 15%, and we are taking the fiscal capacity out of the government to respond to seniors needs.

Last fall, I told the House something worth repeating. It is the story of a senior who came to my office. He had a letter from the government saying that his pension had been increased 42¢ a month. I am pleased that the finance minister is here to hear this. This man was so upset, he had tears in his eyes. He said, “Not only does the government not give a damn about seniors, but it goes out of its way to insult us by sending us a notice that cost more to post than what it cost in the increase to the government”. He was very concerned.

We faced down the worst recession in years and some credit should go to the government, but Canadians throughout that process were vividly reminded of why we had a social safety net in the first place.

I am pleased to see the government has taken an interest in reviewing the benefits paid under old age security, GIS and CPP. I have to stress that this has also been done with an eye to increasing benefits for seniors.

Repeatedly tonight we have heard references between 200,000 and 300,000 seniors who live below the poverty line. An economist at the Canadian Labour Congress reported that an annual infusion of about $700 million would raise all seniors above the low income cut-off, what is more commonly known as the poverty line.

We heard the Bloc speak about a motion that it had before the House calling for an increase in GIS.

The 200,000 or 300,000 living below the poverty line is a very sobering statistic, but when we consider of that number, 60% are single unattached women, many of them women who never participated in the Canada pension plan because they stayed at home, this is nothing short of a national disgrace. We can do so much more and we must do much more for all senior Canadians.

Today only 38% of Canadian workers have workplace pensions. Nearly one-third have no retirement savings at all. Earlier today the Liberals presented a bill on guaranteeing a charter for the rights of seniors to save. For the one-third of Canadian workers who are outside the umbrella of having a pension plan and cannot save at all, we have to question what the charter would do for them.

More than 3.5 million Canadians are not saving enough in RRSPs, and I am sure the finance minister could back that up. They are not taking advantage of the opportunity that is presented by the government. Seventy-five percent of private sector workers are not even able to participate in a registered retirement plan. Clearly the notion that retirement savings can be adequately accounted for through the purchase of RRSPs has not worked out and requires urgent government action.

In June 2009 the NDP opposition day motion started, in a very public way, a national discussion on the future of our retirement security system. Members in this place today are continuing that discussion.

Part of the discussion from our perspective centred around increasing CPP and QPP funds. I would remind members that CPP and QPP are self-financing, so it then becomes a question of whether Canadians are prepared to pay more for security in their senior years as part of a secure public pension plan. Canadians certainly face insecurity today in the context of their private options, like RRSPs or defined contribution plans, that leave them uncovered or victimized by the market.

We believe it would also be a benefit to beef up CPP. That would be the cheapest way for Canadians and the government to pool risks, take the burden off individuals and secure their senior years. Any voluntary supplemental CPP system would simply not meet the needs of Canadians any more than what an RRSP has done in the past. The NDP believes it would be better to use the resources of CPP and QPP to enhance a retirement system.

I would like to discuss the need that Canada has for a pension benefits guaranteed fund.

Federal leadership is urgently needed to set about working with the provinces to develop a pension insurance regime. This must be done to ensure workers actually receive the retirement benefits they have earned, even if their employer goes out of business.

As I said, we insure our cars and our homes and we have deposit insurance to cover our savings. Why not insure our pension plans? The system would be funded by contributions from federal workplace pension plan sponsors administered by the federal government and designed to ensure efficiency and fairness to all parties.

Another notable model that is worthy of study is the American Pension Benefit Guaranty Corporation, and there are some issues with that. Similar to the Canada Deposit Insurance Corporation, the Pension Benefit Guaranty Corporation is not financed through tax revenues but by premiums paid by sponsors of defined benefit plans, assets from plans that are taken over, recoveries from refunded pension liabilities from plan sponsors' bankruptcy estates and through investment income.

Canada may choose not to follow the American model, but it could create some form of pension insurance uniquely its own or a hybrid of other plans, such as those in Switzerland, Sweden, Germany and Japan and even the Netherlands, which is probably not an option that we would look at here. The government of the Netherlands insures the plans.

Once a guaranteed plan is successfully combined with funding rules or other protection measures, it can effectively perform as a last resort benefit protection measure.

Another clause in our opposition day motion called for ensuring that workers' pension funds would go to the front of the line of creditors in the event of bankruptcy proceedings. My colleague from Thunder Bay was responsible for putting forward Bill C-501. He has worked hard on that file, trying to protect the pensions and severance of workers across the country.

Canadians need to know that there will be a level of pension income for their retirement to ensure that they will spend their final years with financial security and live in dignity.

Pensions
Government Orders

8:20 p.m.

NDP

The Deputy Chair Denise Savoie

Perhaps the hon. member can complete his comments following questions and comments.

Questions and comments, the hon. member for York West.

Pensions
Government Orders

8:20 p.m.

Liberal

Judy Sgro York West, ON

Madam Chair, I know the member frequently raises issues to do with the old age security, issues about which we all care very much. We continue to deal with seniors every day, those who are living either below the poverty line or on a low amount of money. Frankly, most Canadians would be quite embarrassed to find out that if their parents do not have a private pension, they try to cope with $12,000 or $14, 000 a year or, if it is a couple, maybe $22,000 a year.

Clearly for a country as rich as ours, we need to do better on that issue. I know the member has raised that periodically.

Has he reviewed the recommendations in the white paper that I recently put out and sent to all members? Clearly the NDP members got an early copy of it because someone else leaked it. Since they had that copy, I would like to know what his comments are to the white paper.

Pensions
Government Orders

8:20 p.m.

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Madam Chair, I am struck by one of the things the member just talked about, and that is the $22,000 on which people live. I was in Elliot Lake when a woman came up to me and told me she lived on $1,160 a month, exactly what the member said.

We have differences on some points here or there, but everyone in this place is trying to find a way to improve the lives of seniors. Therefore, I am glad to hear her bring forward her points today.

The leaked document has not been leaked onto my desk, so I cannot respond to it. However, people know what the problem is. The problem is seniors do not have adequate pensions. If they are living on old age security and GIS, they do not have enough. Eleven hundred dollars a month does not do it. Therefore, we have to do something about that.

Madam Chair, you said I had a bit of time left so I could turn to my last page.

I want to talk about the fact that the NDP has put forward a plan, a seniors' retirement income security plan. We have talked about increasing the GIS to lift seniors out of poverty, strengthening the CPP by doubling it if we can reach that goal, adopting a plan to take in stranded pension funds and a national pension insurance plan. If we were to work on those four points, we would be well under way to making a better life for seniors.

Pensions
Government Orders

8:25 p.m.

Whitby—Oshawa
Ontario

Conservative

Jim Flaherty Minister of Finance

Madam Chair, I will comment on the remarks of the member for Hamilton East—Stoney Creek.

There is this assumption made by Liberal members, and by the NDP member, that somehow we have two classes of people in our country: people who employ people and people who work for other people. It is just nonsense.

If they actually knew what was going on in the country, they would know that the biggest producers of jobs in are ordinary Canadians who run small and medium-sized businesses. They would know that if they paid attention in their own ridings, they would stop this false nonsense talk against employers and they would stop their nonsense talk saying that we should not reduce taxes on employers.

Of course we should. Why? It is the fastest way to create more jobs in Canada. We know that small and medium-sized businesses are the job generators. They are the job generators in the riding of the Liberal member for York West. They are the job generators in the riding of the member for Hamilton East—Stoney Creek. This is vitally important.

I was appalled earlier to hear the member for York West try to take credit for the working income tax benefit, known as WITB, and the tax-free savings account. The Liberals had 13 years in government and they did neither of those things. We became the government and we implemented both of them, despite the fact that we are in a minority Parliament. That is good public policy for Canada and I would hope the Liberal member opposite would acknowledge that.

Pensions
Government Orders

8:25 p.m.

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Madam Chair, I was pleased to hear the finance minister talk about taxation. We have had taxation in Manitoba under the Doer government. Lorne Calvert and other NDP governments across Canada balanced the books repeatedly, over and over, but at the same time they took care of the social welfare of people.

If we want to talk about a corporate tax rate that is competitive with the United States, fine. However, the Americans are at 36% and we are dropping to 15%. Where is the competition? That is ridiculous.

The Conservatives are taking the fiscal capacity out of the country to take care of our seniors. They are taking $14 billion to $16 billion a year out of the fiscal capacity to do what is necessary for a better country. That may be humourous to them, but because of it people are suffering.

Pensions
Government Orders

8:25 p.m.

NDP

John Rafferty Thunder Bay—Rainy River, ON

Madam Chair, I would like to change tack a bit and not get into all the arguments they are having. This is a question for the member that I hope he can answer at some length, if we still have time.

Today marked the third day of committee hearings on my bill, Bill C-501, which is an act to protect pensions for six million Canadians and their families right across this country. While there are some problems and some difficulties, we are working on them, and I hope that all the parties are working together on this.

One of the things that happened today was that we had a lot of witnesses from industry. They seemed very concerned that defined benefit plans are going to disappear or they are going down. They said, “Woe is me; what are we going to do?” I suggested an alternative and I would like the member to make a comment on it.

The alternative was the we have the best pension plan in the country that we can be part of, and it is the CPP. The Canada pension plan is the best pension plan we have. Everybody can participate. Everybody can be protected and, most importantly, the government cannot get its hands on the money.

I would like to ask the member if he would expand on his thoughts about the CPP and the value that it will have on an ongoing basis as we move forward in this debate.

Pensions
Government Orders

8:25 p.m.

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Madam Chair, in fact I originally proposed Bill C-476, the Nortel bill. It was not timely and the member took it over and brought it to committee, for which I thank him and for the work he has done on it.

It is very clear that we have a system in Canada. The old age security system, which started in 1927, was to end poverty. The CPP was intended to do the same thing. Both have worked reasonably well over the long term, but the reality is that going forward, as the member for York West was saying a few moments ago, with the number of people who are going to be facing retirement in the coming years, it is essential that we build and expand that foundation. By taking the core assets of CPP and increasing them over 35 years, we can double the portion that is available.

In Hamilton, U.S. Steel right now is trying to take away the defined benefit plan for steelworkers, and that is happening in multiple workplaces across the country. If we lose the defined benefit plan, what is going to catch these people if the market is down when they do retire? We have to work on that foundation.