House of Commons Hansard #126 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was refugee.

Topics

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:15 p.m.

Liberal

Judy Sgro York West, ON

Madam Speaker, thank goodness we have the Canada pension plan, which was brought in by a Liberal government. Without it I would hate to imagine what would be happening today to the thousands of Canadians who rely on the Canada pension, given the fact that the government is going to make people wait two extra years to get OAS.

Part of what we recommend is a gradual increase in the Canada pension plan. When we are talking about all these changes, it sounds wonderful to simply say that we should double the Canada pension. If we could ultimately get to that on a very slow, gradual basis, it would be wonderful for Canadians. That is why the supplementary plan allows people to do that. However, to turn around and ignore the impact that the changes could potentially have on businesses is also to put our heads in the sand.

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:15 p.m.

Independent

Bruce Hyer Thunder Bay—Superior North, ON

Mr. Speaker, it is my pleasure to rise to speak to the government's bill. It is what I call the proposed private, for profit, pooled pensions plan. That leaves me speechless.

More seriously, few things are more important to Canadians than their retirement security. For decades they work hard to build a good life for themselves and their families. Every paycheque deduction includes a little something tucked away in their pension plan.

When it comes time to retire, people rightfly expect to be able to live in dignity and with some financial security. However, as too many Canadians have found out in recent years, their retirement may not be as secure as they were led to believe and were hoping. RRSPs have taken a beating, and many of those who had been counting on a company pension plan have had a rude shock.

Many found out their plans were underfunded, or they lost everything when their company went bankrupt and took workers' pensions with them. This has been a particular problem in Thunder Bay—Superior North, where a host of creditors, often including the actual owners of the failed subsidiary company, have claims that take precedence over those of pensioners. In a modern industrialized democracy, that just should not be allowed to happen, and my friend representing Thunder Bay—Rainy River has tried to introduce a private member's bill to put pensioners first.

One thing that has been rock-steady throughout turbulent times is the Canada pension plan, to which 93% of Canadians subscribe. Companies come and go and iInvestment vehicles like income trusts may arise and then be snatched back the next year by fickle governments, but people can count on the CPP.

It is the most secure retirement vehicle we have. The CPP remains the single most effective solution to ensure retirement security. It is portable, it is sustainable, and it spreads the risk to minimize risk. It is publicly and cheaply administered at a fraction of the administrative costs of private plans. It is far more sustainable than private plans and it pays predictable benefits that do not fall if markets collapse.

The one drawback is that it is not high enough. The maximum benefit currently is only $986 a month, and the average is only $528 a month. That, as we know, is not adequate to live on.

People are expecting to make up the shortfall by investing in private investment vehicles such as the pooled pension plan the government is advancing, but private savings vehicles cost many times more than saving in public pension plans.

The administration cost of the CPP is about one-quarter of 1%, while the cost of RRSPs and mutual funds ranges from 2.5% to 4% or even more. Private plans are great for brokers and bankers in Bimmers, but not so great for real, sustainable growth in pensioners' hard-earned investments, and there is little indication of any cap on fees for those pooled plans.

That 2.5% to 4% or more every year eats away at people's retirement. It adds up. When it comes time to retire, Canadians will have many, many thousands less, so why not have it adding up and working for pensioners instead of for private investment companies? Allowing Canadians to opt for contributions up to an extra 2.5% to the CPP would double their benefits, and those are defined benefits, secure benefits. They are a retirement benefit that future seniors can actually count on.

The benefits of the CPP over private schemes do not stop there. Unlike public pensions, private savings are rarely indexed for inflation. That could mean a further lost savings of from 1% to 3% per year, a loss that alone cuts people's initial investment in half over a 30-year period.

As well, the CPP is highly portable for everyone throughout Canada. Pooled registered pension plans are much less so.

By far the biggest fault in this whole pooled pension plan scheme is that it fails to address the needs of Canadians who cannot afford to save for retirement. The vast majority of Canadians do not pay into plans like RRSPs because they simply cannot afford it. According to StatsCan, 60% of Canadians currently do not have any formal pension at all. There are already private retirement investments available out there; if Canadians could afford them, we would not have millions who do not have a pension.

Adding another voluntary and speculative investment plan they cannot afford will not significantly help the situation.

There is a lot we can do in this House to improve retirement security for Canadians. We should be seeking to insure Canadians' pensions, like we do their bank deposits. We should protect pensions when companies go bankrupt by putting pensioners first as creditors, ahead of banks, ahead of shell companies that skim the profits and dump the subsidiaries, as has happened in Thunder Bay—Superior North.

After all the ruined retirements these past few years due to corporate bankruptcies, including many in our forest sector in northwestern Ontario, it is absolutely incredible that the government has not taken action on that front. We should be taking action on all these fronts and allowing Canadians to choose to contribute more to the CPP as well.

There is no reason to continue preventing Canadians from saving more through the one vehicle open to all workers, including the self-employed, a vehicle that is low cost, universal and portable. It is inflation and risk-proof, with defined benefits, guaranteed by the Government of Canada, that is not yet another private investment scheme that most Canadians will not invest in. That is the CPP.

Instead, all we have is a proposal from the Conservative government to help line the pockets of banks and investment companies some more. It may help some well-off Canadians who can already afford to contribute to private investment vehicles, that may be true, but it will not help the people who need it most, the majority of Canadians. Now we have the added insult and injury of Canadians having to wait from 65 until 67 years old for their old age supplements.

The Conservative government does a great job of looking out for the interests of big banks, big oil companies and other global multi-nationals with little commitment to any country or workers or their families. This past spring the Canadian Federation for the Humanities and Social Sciences hosted international pension expert, Keith Ambachtsheer, for our big thinking lecture here on Parliament Hill. For the MPs who got up that early to attend, this pension expert made it very clear that the administrative fees on private pension plans usually eat up any pension fund growth. He made it clear that the best pathway to any truly safe and sustainable pension plan for Canadian families was retaining and expanding CPP.

I realize that this is an ideologically driven party and government that rarely wants its beliefs to be confused by facts, research, statistics, senseless data or science but, hopefully, on this absolutely crucial question of pensions, it will, it should, listen to experts like Mr. Ambachtsheer. Hopefully it will follow his expert and sage advice and build upon the excellent and sustainable Canada pension plan, a safe, predictable, cost-effective and sustainable model admired worldwide. It just needs expanding to meet modern costs of living.

Canadians know and trust the CPP. They do not want to gamble their pensions, their lives and their retirement futures on a lottery run by expensive bankers and investment brokers.

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Conservative

LaVar Payne Medicine Hat, AB

Mr. Speaker, I listened intently to our colleague's comments and to how he railed against the investments in stocks and bonds, and yet I know he is really a proponent of the Canada pension plan. It is interesting to note that the Canada pension plan has huge investments in the stock portfolios of many companies. I just wonder why the member is in opposition to investing in the stock market while continuing to extoll the benefits of Canada pension plan.

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Independent

Bruce Hyer Thunder Bay—Superior North, ON

Mr. Speaker, I am not opposed to investments at all. Investments should be intelligent and voluntary. It is a form of gambling, let us face it, no matter how good a job we think we are doing. We need to average the risks. We need to average the costs. We need to have skilful people planning and making those investments, and we need to do it at that one-quarter of 1% affordable rate of investment and administrative costs compared to the expensive costs of having brokers do it.

In my province of Ontario, it has become very clear for many years that the security and exchange investment community is badly in need of regulation.

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Green

Elizabeth May Saanich—Gulf Islands, BC

Mr. Speaker, I appreciate the hon. member for Thunder Bay—Superior North raising this critical and pressing issue of pension plans not being protected when corporations go bankrupt. Clearly we need legislation that places corporate pension plans as secured creditors in bankruptcy.

The member mentioned that in his riding, Catalyst Paper's current situation is causing real problems for people in Saanich—Gulf Islands, and people in the Ottawa area know well the disaster that befell so many Nortel workers, particularly those with disability pension plans that they had been counting on.

What does the member think it will take to get government action to protect private pension schemes in bankruptcy?

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Independent

Bruce Hyer Thunder Bay—Superior North, ON

Madam Speaker, as I mentioned in my speech, the hon. member for Thunder Bay—Rainy River introduced private member's legislation that was excellent and would put pension plans first ahead of other creditors. I hope he will reintroduce that legislation in this House and I hope all members of Parliament will support it. Just as paycheques should come before creditors, so should their pension plans, which are really paycheques held in arrears.

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Conservative

The Acting Speaker Barry Devolin

Questions and comments? Resuming debate? Is the House ready for the question?

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Some hon. members

Question.

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Conservative

The Acting Speaker Barry Devolin

The question is on Motion No. 1. Is it the pleasure of the House to adopt the motion?

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Some hon. members

Agreed.

No.

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Conservative

The Acting Speaker Barry Devolin

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

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Some hon. members

Yea.

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Conservative

The Acting Speaker Barry Devolin

All those opposed will please say nay.

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Some hon. members

Nay.

Motions in Amendment
Pooled Registered Pension Plans Act
Government Orders

12:25 p.m.

Conservative

The Acting Speaker Barry Devolin

In my opinion the nays have it.

And five or more members having risen:

Call in the members.

And the bells having rung: