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

9:30 p.m.

Liberal

Judy Sgro York West, ON

Mr. Chair, I know the hon. member spends a lot of time working on these issues.

We have certainly heard a lot about bankruptcy in the last two years. Thousands of people from Nortel and AbitibiBowater have complained, and rightfully so, about losing their pensions. As the member talks about championing so many other issues, what has she done within the confines of her own government to ask the government to respond and make some changes to the Bankruptcy and Insolvency Act to help protect the very people who are about to be on the street?

Pensions
Government Orders

9:30 p.m.

Conservative

Cheryl Gallant Renfrew—Nipissing—Pembroke, ON

Mr. Chair, there are a number of retired and former Nortel employees in my riding and we have been advocating on their behalf. Nortel is one of the 90% of companies in Canada whose pensions are provincially regulated. We need to find a solution together with our provincial partners to ensure this type of tragedy does not happen again.

Pensions
Government Orders

November 23rd, 2010 / 9:30 p.m.

Bloc

Yves Lessard Chambly—Borduas, QC

Mr. Chair, I feel it is important to take part in this take note debate on Canada's retirement income system, especially since workers in my riding and most members' ridings have been affected by a very unfortunate situation in recent years, especially the past three years.

It used to be that we were especially concerned about people who had no private pension coverage. When people without private pension coverage reached retirement age—65 for most people or 60 for people who qualified for the Quebec pension plan—they received public pension benefits, of necessity. But few of them had enough money to retire.

Two things happened. With the economic crisis, the economic structure or the problems experienced by companies weakened many pension funds. But they were also weakened when one of the major stakeholders was denied a role in managing pension funds. In the past 10 years, pensioners themselves have been excluded from managing many plans. When companies started tampering with pension plans to try to refloat them, if I can put it that way, by giving the employer a contribution holiday or restricting coverage, one stakeholder was missing every time. So when it became necessary to take measures, most of the time, they were taken and the people who were affected right away were those who were receiving private pension benefits.

This is a reflex that is relatively normal under the circumstances and abnormal in other situations. It is normal because we have a survival instinct. We tell ourselves that we will be retiring later, so we will have time to make up for the shortfall in the fund. We do not worry about the people who are receiving their pension when we make this decision.

I would like to remind members of two specific examples, Atlas Steels in Sorel and the Jeffrey mine in Asbestos. These people ended up in a situation in which the union and the employer agreed that the employer's contributions could be suspended or, in some cases, they agreed upon exceptional measures that meant that insufficient contributions were being made to the pension fund. At Atlas Steels, in Sorel, pensioners saw their pension benefits cut by 20%, 30%, 40%, 50% or 60%. That is huge. You are entitled to receive an amount every year because you and your employer contributed. But then all of a sudden your pension goes from $27,000 a year to $13,000 or $14,000 a year. That is terrible.

These situations happened—and this has not been brought up yet this evening—because a key player was disregarded, someone with an opinion on such situations and especially on the management of a pension fund.

We introduced Bill C-290 to partially fix this situation by creating a tax credit.

This tax credit would allow anyone whose benefits were cut to recover approximately 22% of the money they lost. That is not very much, but it is still a significant amount for people who do not earn much to begin with. But, contrary to expectations, some of the Liberals voted with the Conservatives to deny workers from Jeffrey mine in Asbestos and Atlas Steels in Sorel the right to this measure, which would have helped alleviate financial difficulties.

This evening we are debating measures to confront the new realities of pension plans. However, there is still some ambiguity because no action is coming out of all this talk.

I would like to give an example of the elements of the public pension system. There is old age security for seniors, which is their income security. For many of them, it is insufficient because it is their only income. So the guaranteed income supplement was created to give seniors a decent income on which to live. But then what happened? Some of the people who are eligible have been beaten up by life and a large number of them are marginalized. Some of them are isolated by poverty, others by their low level of education or training or simply because they do not know their rights or have communication problems.

In 2001, we learned that 183,000 people in Canada were in that situation, including 81,000 people in Quebec. Since then, the Bloc Québécois has been on the attack. Our colleague at the time, Marcel Gagnon from Shawinigan, the member for Saint-Maurice—Champlain, led a crusade that allowed us to find many of these people. However, 42,000 have not yet been reached. So they are the people we are talking about.

Our Conservative colleague was saying earlier that seniors only have to apply once. However, in order to apply that first time, they need to know they are entitled to the supplement. The government, on the other hand, knows they are entitled to it, so why not just give it to them?

Over the years, the government has misappropriated a great deal of money, $3.3 million to be precise, that belongs to some of our most vulnerable seniors. That money belongs to them. We need to start with measures like that one. We also need to look at the possibilities being discussed right now in Quebec by unions and seniors' advocacy groups, which are proposing increasing the income provided by public pensions. In Quebec, some people have suggested doubling the Quebec Pension Plan with appropriate deductions and contributions to make that possible. This would give people who are working and do not have a private pension plan the opportunity to participate in a group plan that will guarantee them at least enough income to live with a little dignity when they retire.

This is what people should take away from this evening's debate: we need to take a close look at what we are doing wrong and remain open to what we can do better.

Pensions
Government Orders

9:40 p.m.

Liberal

Judy Sgro York West, ON

Mr. Chair, let me congratulate my colleague on the issue. I would like to ask him a couple of questions.

Clearly, in the white paper that I recently issued, and I believe his party has a copy of it, with the 28 recommendations, we talk about the supplementary Canada pension plan. We also talk about how we support the expansion of the Canada pension plan. We also support the whole issue of people having a longer period of time to be able to collect their Canada pension plan if they are late collecting it.

Is the member aware that there is a group of people on long-term disability who are appearing before the Senate on Bill S-216? These people are former Nortel workers. Since Nortel has gone bankrupt, there is nobody left to pay their monthly disability benefit premiums to continue their long-term disability benefits. It is a very serious issue in Canada that I believe has been raised as a result of the unfortunate incident with Nortel.

I would like to hear what the member thinks of this. Of course this bill must be passed before the House rises in order to have any effect and help these poor disabled people. When the bill was at committee last week and ready to go to clause by clause, the Conservative senators adjourned the meeting and left these people high and dry there, trying to get a bill passed that could help them by paying their premiums as a result of the Nortel incident.

I wonder what the member thinks about those particular actions and about how the Conservative senators have just abandoned these people.

Pensions
Government Orders

9:45 p.m.

Bloc

Yves Lessard Chambly—Borduas, QC

Mr. Chair, I would first like to thank and congratulate my fellow member for all of the time and effort she has put into addressing this issue. Like her, I was taken aback by the casual attitude toward a situation that I believe is urgent.

During the economic crisis in Canada, special, emergency measures were put in place to address issues related to municipal infrastructure and the automotive industry. Far fewer measures were taken with regard to the forestry industry. When people lose their jobs or retirement income, it constitutes a severe economic crisis for them that calls into question their ability to provide for themselves and their families.

When we fail to urgently and immediately resolve a problem that falls under our responsibility and to see what we can do to help these people and do right by them, we are not respecting our obligations. We are merely accentuating the effects of the economic crime to which they have fallen victim.

Pensions
Government Orders

9:45 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Mr. Chair, our pension critic, the member for Hamilton East—Stoney Creek, is fond of saying that we ensure our cars, so why can we not ensure our pension funds.

Actually, it is not as complicated as it sounds. In 1987, after two or three property and casuality insurance bankruptcies, the provinces across the country got together with the industry and set up a compensation fund. Right after that, the life insurance companies did the same thing. We have travel acts in Ontario, Quebec and British Columbia, where if we do not get the trip we paid for, if the agency goes bankrupt, we are compensated. Canada has all sorts of examples of how we should be doing this.

We can insure our trips and we insure our cars and our houses. Why in the world can we not insure our pension plans?

I would like to ask the member. I am sure he agrees with the idea. Why is the government dragging its feet on this issue?

Pensions
Government Orders

9:45 p.m.

Bloc

Yves Lessard Chambly—Borduas, QC

Mr. Chair, that is a very good question. Under the regulations, pension plans are required to have a compensation fund of 15% to 20%. I think the legislation did not allow compensation funds to exceed 20% of the plan requirements as such. We have to make sure that the rules governing these plans uphold this requirement at all times and that provisions are implemented to ensure compliance.

Any time the rules have been broken it has been because one of the two contributors—usually the employer—has been allowed to take a break from contributing. That should not happen. Other sources should be found to support the plan, especially when the employer is going bankrupt, if there is bankruptcy, to ensure that workers are the first creditors in line to receive all the money or assets left to hand out.

Pensions
Government Orders

9:50 p.m.

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Mr. Chair, the member from the Bloc raised earlier the issue of the guaranteed income supplement.

The government knows the people's age and it knows how much money they make. Would it not be nice if the bottom of the assessment said that in the future they may qualify for this and they should check it out, or something to that effect? It should be that simple because it is an entitlement really.

We heard the member for York West talk earlier about the Nortel situation with the LTD workers. The LTD workers at Nortel had a problem because, instead of premiums being paid to an insurance company, the company was self-insured. That is why when the assets went down there was a problem.

We have talked in the House under one of the bills I proposed, Bill C-476 and now C-501, about protecting workers' assets in their pension funds at the time of bankruptcy and insolvency or the CCAA because corporations are hiding behind CCAA, in particular, to get out of their responsibilities to the pensioners.

I am very curious. Would the Bloc be supportive of Bill C-50l, which was before committee today?

Pensions
Government Orders

9:50 p.m.

Bloc

Yves Lessard Chambly—Borduas, QC

Mr. Chair, given the number of bills, I am trying to recall it. I probably know it, but with only the number to go on I am having difficulty.

However, we will support any measure that could counter this flaw that has been introduced along the way and that has weakened pension plans.

As I said a little earlier, there is supposed to be oversight, but it is not respected, just as there is no respect for the guaranteed income supplement. The government knows who is entitled to it, but it does not give it to them. If a disabled person falls out of his wheelchair, he is unable to get back up even though he has his wheelchair. Will we leave him there? Common sense dictates that we will not. We will support him and help him up.

Some people do not know that they are entitled to the guaranteed income supplement. However, the government knows. These people live in poverty. They do not have enough to eat because they spend all their income on rent. This is a fact. Why do we not do the same thing? Why do we not go out and help them? They must be told that they are entitled to it. We must tell them it is theirs, and give it to them. If there are doubts, we can write to them. If we have doubts, we can ask them if that is their situation. Most of the time, there is no question about it. We know it, just as the government knows that it misappropriated $3.3 billion, which came from the pockets of these people.

Pensions
Government Orders

9:50 p.m.

Halton
Ontario

Conservative

Lisa Raitt Minister of Labour

Mr. Chair, today I rise to speak on a subject that is personally important to me and equally important to all Canadians, which is their retirement. After many years spent in the Canadian workforce building the Canada that we have today and caring for their families, Canadian seniors deserve to have the benefit of a top notch retirement system that will support them through their retirement. One of the best ways to support our seniors is by cutting taxes and leaving money in their pockets. I am proud to say that our Conservative government has delivered on lowering taxes.

Now there are many examples that I can provide on what this government has accomplished for retirees over the past four years. We have increased the age credit amount by $2,000, saving seniors hundreds of dollars. We doubled the pension income credit, the first time it was ever increased. We increased the age limit for maturing pensions and RRSPs from age 69 to 71, allowing seniors to save longer for their retirement. We introduced the tax-free savings account, the most important savings tool to be introduced since the RRSP. Seniors benefit immensely from this account. It provides them with a savings vehicle after they must withdraw their money from their RRSPs and RRIFs.

Finally and perhaps most importantly, we introduced pension income splitting, one of the most important tax changes for seniors ever instituted and one that seniors of Halton indicate to me over and over again has been incredibly important to them, because for many seniors this means thousands of dollars off their taxes every year. Clearly, we are getting things done for seniors, and the seniors in my region of Halton, as I indicated, are telling me this.

Our Conservative government also has a strong record when it comes to retirement income. The global recession exacerbated the fears of many Canadians about the adequacy of their retirement savings. As markets plummeted around the world, so did the savings of many Canadians. But our government listened to the concerns of Canadians and we granted special one-time relief to help them get through this time. We reduced the mandatory minimum RRIF withdrawal by 25% so that Canadians could hold onto their savings for better times.

Our government continues to listen to the concerns of seniors and Canadians across this country. As Canada's labour minister, I am concerned as well with the aging workforce in Canada, so I am listening to older workers who are calling for elimination of the mandatory retirement age. These are issues that are of concern to Canadians. As an elected official and a minister of the Crown, I also regard them as a concern.

Seniors make up nearly 15% of the population of Canada. Canadians are living longer, and increasingly they are becoming more concerned about their retirement incomes and their financial stability past the age of 60 or 65. Not only is an aging workforce concerned with pension but workers are also asking to continue in the workforce longer and employers are benefiting from the years of experience and the knowledge that these older workers bring to the table. These are all important issues for me as Minister of Labour and as well for this government on the whole.

That is why this government is also working toward providing a more permanent solution to the retirement income system, and we begin this by doing what our government has always done. We listen. I know some opposition parties want us to act recklessly and without the proper research, but our government is not going to make changes that will affect generations of Canadians without careful consideration and thorough review. The file is too important to too many Canadians to do otherwise.

In that vein, the Parliamentary Secretary to the Minister of Finance criss-crossed this country and listened to the concerns of pensioners and consulted widely on the proposed solutions to federally regulated pensions. Based on what he heard from Canadians of all walks of life, our government came up with new regulations for federally regulated pensions last October. These regulations and these reforms struck an important balance. They provide the necessary improvements while not harming the current system.

Specifically, our government put in place a regulatory framework to enhance the protections for plan members, to reduce that funding volatility for defined benefit plans, make it easier for participants to negotiate changes to their pension arrangements, improve the framework for defined and negotiated contribution plans and modernize the rules for investments.

These reforms were well received by seniors across Canada. In fact, Susan Eng from Canada's Association for the 50Plus praised them and said, “I'm happy...when you look at something like this you see a lot of positives... we're looking at some of the changes that they've proposed, they sound great”.

The National Association of Federal Retirees said they were “pleased to hear that the Government of Canada is taking action to strengthen the pension framework and enhance benefit security for some workers and retirees”.

Dan Braniff of the Common Front for Retirement Security joined the choir and said, “I wish to congratulate... [your government] for the proposed reforms to the Canada Pension Act. This is an important milestone for creating greater security for many pensioners and plan members...We also wish to show our appreciation for the excellent work of your [Parliamentary Secretary]...who travelled across Canada and obviously listened to the voices of pensioners... Thank you for taking this very important step for better retirement security at this very critical time”.

I know everyone in the House joins Dan Braniff and others in their praise for the parliamentary secretary who, quite frankly, did an amazing job on behalf of all Canadians.

Our government also acknowledges the fact that less than 10% of Canadian pension plans are regulated by the federal government. This is clearly an area of joint responsibility that requires the support, consideration and co-operation of the other provinces. This is a fact that opposition members should keep in mind when they propose measures. We need to support the engagement of the provinces. Indeed, our Conservative government is working collaboratively with the provinces to bring forward realistic and effective solutions.

The first thing we did was put together a joint federal-provincial-territorial working group on pensions to examine the issues. To ensure we got expert advice, we created a research working group with the well-respected academic, Jack Mintz, as chair. After reviewing the research, all federal and provincial governments agreed to examine options to improve Canada's retirement system.

Our government and provincial governments across Canada consulted with Canadians on ways to improve our pan-Canadian retirement income system. Last June we met with Canadians and brought forward innovative proposals for our indepth review. We continue to work with the provinces with these proposals collaboratively. Let me be clear. We will not impose unilateral solutions on the provinces.

Our Conservative government has accomplished much on the pension front. We reduced taxes for seniors and pensioners. We performed the first review of federally-regulated pensions since 1985. We have smart solutions to strengthen our federal pension framework.

Instead of resting on our laurels, we are actively and constructively working with the provinces to propose pan-Canadian solutions. Going forward, we will continue to work with the provinces to move forward on pension reform.

Canadians can rest assured that we will continue to work in their best interest to improve our retirement income system.

Pensions
Government Orders

10 p.m.

Liberal

Judy Sgro York West, ON

Mr. Chair, I thank the minister for speaking tonight. I certainly know she is very sincere in her comments.

The consulting has been going on for two years. Several times I asked the Minister of Industry about changes to the Bankruptcy and Insolvency Act or the pension issue. He would often tell me to wait, that it was coming, or that he would do something. I also asked what could be done on the Bankruptcy and Insolvency Act when it came to Nortel and so on.

I would be interested to hear from the Minister of Labour just what influence she has exercised with the Minister of Finance and the Minister of Industry to try to deal with the terrible situation that Nortel and AbitibiBowater have found themselves in.

Second, when we talk about the RRIFs, that is good. It is certainly a recommendation in the white paper that I put out. However, it is still only seniors who are withdrawing.

The fact is, many of them have not recovered from the impact of the income trust debacle when it was promised there would be no changes. However, immediately upon being elected, income trusts were one of the first things where the rug was pulled out from under them. We can talk about the good things that the government has done such as income splitting and a few other things, and praise is due. However, income trusts have hit seniors immensely.

We have been waiting for two years now for some sort of comment back on pension reform. Clearly it takes working together with the provinces to make any of these things happen.

I would be very interested to know what she has done to attempt to get her government to do something about the Bankruptcy and Insolvency Act, or if not that, a stranded pension agency, or something that is going to help many of the people we are dealing with today.

Pensions
Government Orders

10 p.m.

Conservative

Lisa Raitt Halton, ON

Mr. Chair, I am quite pleased to answer that question in the context of what I have done as Minister of Labour.

As the member knows, in labour we have a very privileged perch in that we get to speak to both employers and organized labour employees. They come together around the same table. In fact, tonight there was a meeting of the ministerial advisory committee on labour relations and there was a discussion of pension issues. People gave me their feedback and points of view on the matters.

There is no question that employers, employees with organized unions and non-unionized employees all share the concern about the future of pensions. They understand and respect that there is a process around what we are trying to accomplish and that we have but one chance to get it right. That is why we are taking more time in order to get the job done correctly.

The other aspect of discussing it from a labour point of view is we look at some of the other programs we have put in place that have helped in the same vein. We introduced the wage earner protection, for example, which dealt with certain aspects that we did not expect to encounter with respect to bankruptcies of companies. It has been a very successful program. I appreciate the member giving credit where credit is due in terms of that, the TFSA and what we have done with respect to income splitting.

The process I laid out in my remarks is important to think about as well. I appreciate the fact the member acknowledges it is not always easy to collaborate with all of the provinces. However, we are moving in the right direction and are going to get to the right spot.

Pensions
Government Orders

10:05 p.m.

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Mr. Chair, I know the minister has dialogued with the Canadian Labour Congress and others. In fact, I was speaking with the secretary treasurer tonight and I know they are in discussions around doubling CPP, which the NDP is recommending.

I want to take us to a different place at this point in the conversation. I and the member for York West have repeatedly raised the issue of seniors living below the low-income cutoff, the ones living in poverty. Between 200,000 and 300,000 people are living below it.

Since the government has come in, it has lowered the tax rate. The corporate tax rate was at 22%. The comparative American tax rate is 36%. When the regime of corporate tax breaks has ended, we will have a 15% tax regime in Canada for corporate taxation.

With regard to people living below the low-income cutoff, the next stage of cuts in January 2011 will be approximately $1 billion to $1.2 billion. If we set that aside and say that corporations can survive quite well with the regime that would keep them in the area of 16% or 17%, would the government consider setting aside that tax break and invest that $700 million annually into the GIS to get those seniors above the poverty line?

Pensions
Government Orders

10:05 p.m.

Conservative

Lisa Raitt Halton, ON

Mr. Chair, I truly appreciate where the member is coming from. I was raised by senior citizens on Cape Breton Island and am very well aware of the issues surrounding the cutoffs and the amounts of pension and old age supplement that are available when trying to raise a family.

I am very proud that this government has taken action by taking 950,000 people off the tax rolls by dealing with those things. That is really going to the heart in a lot of cases of the poverty issue.

With respect to the broader question on what we plan to do on taxation of corporations, the fundamental truism is that we need corporations in order to generate jobs. One way to ensure we have employers generating jobs and creating growth is by having the most competitive tax regime we possibly can in the world. That is what is going to create jobs for us and drive our economy.

Pensions
Government Orders

10:05 p.m.

Macleod
Alberta

Conservative

Ted Menzies Parliamentary Secretary to the Minister of Finance

Mr. Chair, something I do not think has received enough notice this evening is one part of what the ministers of finance, coming out of the Charlottetown meeting, wanted to discuss further, and that is financial literacy. The finance minister has put in place a task force that will report very soon, hopefully before the end of the year.

We are talking about current issues, and I am sure the minister will share this, being a parent. At what age do we teach our children about financial and economic literacy so they do not fall into the same trap that some people do when they have not prepared for their retirement?

I spoke to an economist at Purdue University last week who suggested that the U.S. research said that we needed to educate these young people in financial and economic literacy between the ages of four and twelve. I was a little surprised by that, seeing as we do not legislate or we cannot get involved in education, which is a provincial matter.

Does the minister have any ideas as to how we can deal with that? How we catch these kids? How can we teach them the value of a credit card, the costs of a credit card, the financial responsibilities that go along with that and the need to prepare for their retirements?