House of Commons Hansard #139 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.

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The House resumed from June 11 consideration of the motion that Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, be read the third time and passed, and of the motion that this question be now put.

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11:55 a.m.

Conservative

Mark Adler York Centre, ON

Madam Speaker, it is my great pleasure to rise today to speak to Bill C-25, the pooled registered pension plan.

I want to congratulate the Minister of State for Finance on the amazing and wonderful work he has done on this bill and on chairing the committee headed up by the minister and all the provincial finance ministers. I want to congratulate him on his efforts in guiding this bill through the House of Commons.

I have been a member of Parliament now for a little over a year. What has really struck me in my time here so far is the negativity I hear from across the aisle from the nattering nabobs of negativism. No matter how good a public policy initiative is coming out of this government—

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11:55 a.m.

An hon. member

It's all good.

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11:55 a.m.

Conservative

Mark Adler York Centre, ON

—and it is all good, the members opposite oppose it.

I am reminded of the movie A Few Good Men. Jack Nicholson is on the stand and is being cross-examined by Tom Cruise. Tom Cruise says, “I want the truth”, and Jack Nicholson barks back, “You can't handle the truth”. Those are the people we are opposing on the other side of the House. They cannot handle the truth. They prefer to live with Tattoo on Fantasy Island, and those in the third party, well, they are just Lost in Space.

As a government, we have the responsibility to make decisions. We have a heavy burden on this side. We are the only party standing in the way of the NDP forming government. That is a very heavy burden, one which we do not take lightly.

We on this side are not concerned about 2015. We hear about the NDP and its rush to form government in 2015. In fact, I hear it is even cornering the market on orange carpeting for their ministerial offices already. Let me say one thing. We on this side are not concerned about 2015. We are concerned about 2020, 2030, 2040, 2050. The legislation we are proposing is not just to get us to the next election. We are proposing legislation that is good for our children, our grandchildren and our great-grandchildren for generations to come.

Before I speak specifically to the bill, I will talk about where we are in terms of our economic situation. We are number one in the G8 in terms of economic performance.

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11:55 a.m.

An hon. member

Thanks to this government.

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11:55 a.m.

Conservative

Mark Adler York Centre, ON

The member is right. It is thanks to this government.

We have recovered all of the jobs that we lost during the recession. Since July 2009, we have created 765,000 net new jobs. The World Economic Forum says we have the strongest financial and banking system of any country around the world. Forbes magazine says we are the best place to do business.

A few months ago, Governor Branstad of Iowa said on Meet the Press, “The Canadian government has reduced their corporate income tax to 15%. I've had companies that I've called on in Chicago to come to Iowa say, 'We like Iowa, but if they don't change the federal corporate income tax, we're probably going to go to Canada'”.

It is all about the profits, and with profits come jobs. Moody's has given us a AAA credit rating again, as has Fitch.

Our strong economy, the jobs we have recovered and being number one in the G8 are not good enough. We are not standing still with that. I will be speaking to Bill C-38, the budget implementation bill, tomorrow.

Everything we do on this side of the House, every legislative initiative, has a purpose. Everything is tied together. It is part of our comprehensive plan. Again, it is for Canada's future. We are investing in Canada's future, in our people, not in the next election.

With respect to our retirement system, we have identified that 60% of Canadians will not have a sufficient amount of money to retire. That is unacceptable to the government. That is why we have put forward Bill C-25, the pooled registered pension plans act. Under this plan, we will add a fourth pillar to the retirement income system that we have.

Let us take a look at our retirement income system as it stands today. We have the OAS and the GIS. We increased the GIS in last year's budget by 25%, the largest increase in the history of the GIS, and it was opposed not once, but twice by the opposition. In fact, the first time the opposition forced an election because it was opposed to the initiatives we had in our budget, particularly those to create jobs and to help seniors.

The second pillar is the CPP and the QPP. Both are actuarially sound, yet we still took time to improve the CPP under its mandatory five-year review.

The third pillar is the RPP and the RRSP. The RRSP is an interesting vehicle. That vehicle is open to all Canadians; however, we find that $600 billion is underfunded in the RRSP. This indicates that people are not saving enough for retirement. That is a problem.

What else have we done to help seniors in this country? We have given them, on average, $2.3 billion in tax relief. We have given our seniors pension income splitting. We have doubled the maximum amount of income eligible for pension income credit. We have established the TFSA.

The PRPP is needed in our country. I will close with a personal anecdote. My father was an immigrant to the country and he worked hard. I remember when I was a young fellow looking through the window late at night, waiting for my father to come home. He would pull up in the car, which had a very distinctive sound. I remember running to the window and watching him get out of the car. He was so tired he could barely drag himself out of the car and get into the house.

My father did not have a retirement income mechanism in place at the time. My father has since passed away. My father owned a shoe store and had one employee. It was a small business. This would have been so beneficial for him and his family, and for the employee and her family.

This is the kind of country we are trying to create in Canada, where our seniors have a proper amount of income so that they can retire in dignity and live a full life of quality.

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12:05 p.m.

NDP

Irene Mathyssen London—Fanshawe, ON

Mr. Speaker, just to extend the analogy in regard to A Few Good Men, it might be remembered by this House that the Jack Nicholson character was found guilty of supporting heinous and violent crimes.

I did want to ask a question in regard to the fact that only about 30% of Canadians have the fiscal ability to put savings into RRSPs. Unfortunately, over a 40- to 45-year period, the RRSP is reduced significantly. About 40% of the money that goes in goes to pay fees to the financial institution.

I wonder if the member opposite would like to circle that square.

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12:05 p.m.

Conservative

Mark Adler York Centre, ON

Mr. Speaker, I do not know if it is geometrically possible to circle a square.

The hon. member raises a rather interesting question because she seems to be offering more of an answer. She said that 30% of people cannot invest in an RRSP, which is all the more reason that we need a PRPP.

The hon. members on the other side are proposing an increase to the CPP. They do not understand two things. One, we need to have the agreement of two-thirds of the provinces representing two-thirds of the population to make any changes to the CPP mechanism. Two, CPP comes out of people's paycheques. This would be just another tax on people, which would be a job killer, which the NDP would probably support in any event.

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12:05 p.m.

NDP

Alain Giguère Marc-Aurèle-Fortin, QC

Mr. Speaker, my distinguished colleague is talking about a plan that will guarantee pensions, but what is the point of a pension plan when we do not know how much money it will generate? That is a major problem.

People know exactly how much they will have to pay every month, but the amount they will get out of the plan after 30 or 40 years remains a complete mystery since the employer will choose who administers the plan and the level of risk of the investment. Employees may have to invest in a high-risk plan without having any say in the matter.

Is that what the government calls planning for retirement? Is that what the government calls planning a pension income?

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12:05 p.m.

Conservative

Mark Adler York Centre, ON

Mr. Speaker, it is pure speculation on the part of the hon. member to say that. He clearly does not know the facts. He has not read the legislation.

There is a strict regime in place. That is why they are called pooled registered pension plans. They will be pooled. Administrative costs will be kept down. This is what Canada needs. This is what our seniors need to live a life of quality and dignity.

We owe our seniors so much in this country. This government recognizes that. This government is prepared to do something about it, unlike those people on the other side.

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12:05 p.m.

Liberal

Scott Simms Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, as a supporter of this particular initiative for all the reasons that were outlined throughout this debate, some of it is pretty good. The idea of pooling pensions and the risk taken is mitigated as a result of this, no problem.

However, would the hon. member say that this is the be-all and end-all? Is there not a second part to this that the government could do, such as a supplementary CPP or something else? Is this really it for the Conservatives' economic action plan when it comes to pensions?

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12:05 p.m.

Conservative

Mark Adler York Centre, ON

Mr. Speaker, once again, we are debating Bill C-25, the pooled registered pension plans act. Any further initiatives that would be forthcoming from this government would be total speculation and conjecture at this point, and really, nobody can answer that.

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12:10 p.m.

Conservative

Harold Albrecht Kitchener—Conestoga, ON

Mr. Speaker, I am pleased to have the opportunity to speak to some key measures in Bill C-25, an act that would implement the federal framework for pooled registered pension plans, or PRPPs.

This Conservative government stands with hard-working Canadians who are counting on their pension plan for a stable retirement. As part of this commitment, we continue to take the steps necessary to ensure that Canada's pension framework remains strong. In doing so, we are building on all that has been accomplished so far.

I will offer a few examples of what we have already achieved.

In 2009, we announced an improved regulatory framework to better protect members of federally-regulated pension plans. This included reducing funding volatility for defined benefit plans, making it easier for participants to negotiate changes to their pension arrangements. We ensured that pension plans were fully funded when they were terminated and we modernized the investment rules.

At the same time, the federal government, along with the provinces, agreed to a number of improvements to the Canada pension plan that would modernize the plan and would better reflect the way Canadians live, work and retire.

The hon. members on the other side should know that pensions share joint jurisdiction with the provinces. Only by continuing to work with the provinces will we make the system better. A stronger national economy must include a stronger personal retirement system built with the provinces. In fact, that is exactly what led to the development of the PRPP.

In December 2009, our government held a meeting with provincial and territorial finance ministers to discuss the retirement income system and, in going forward, how to address the issues of retirement income adequacy for all seniors.

In June 2010, federal, provincial and territorial governments agreed to develop options to improve Canada's retirement income system. One of those options was to expand the CPP. Many of the provinces raised strong objections to the idea of expanding the CPP as this would require increased contributions from employees, employers and the self-employed.

Canada's economic recovery is still fragile, and with the debt crisis in Europe still unresolved, now is simply not the time to impose a payroll tax on small and medium-sized businesses. As a former small business owner, I understand that point very well.

To be clear, it is not only our government that feels this way. According to the Canadian Federation of Independent Business:

For every one percentage point increase in CPP premiums beyond the current 9.9 per cent rate, it would cost 220,000 person-years of employment and force wages down roughly 2.5 per cent in the long run...

Simply put, an expanded CPP would hurt both small and medium-sized business owners and working Canadians. This government wants to create jobs, not destroy them.

Since expanding CPP was not feasible, priority was given to the PRPP framework. That is why at the 2010 meeting of finance ministers there was unanimous agreement on the decision to pursue a framework for pooled registered pension plans.

The PRPP will mark a significant step forward in advancing our retirement income agenda by improving the range of retirement savings options available to Canadians. They will make well-regulated, low cost private sector pension plans accessible to millions of Canadians who, up to now, have not had access to such plans. In fact, many employees of small and medium-sized businesses and self-employed workers will now have access to a private pension plan for the first time.

For many years, I operated a private dental practice in Kitchener and employed up to five people. It would have been impossible for me to enrol in a pension plan on behalf of my employees. However, I would have liked nothing better than to access a pooled program in which, by putting our resources together with a number of employers, we could have accessed a pooled registered pension plan.

We can think of other businesses. My colleague mentioned a shoe store. I can think of small engine repair shops, farm implement dealers and hairdressers. We can go on with the number of small and medium-sized employers that would benefit from a measure like we have proposed. When they look for employees, they compete on the employment market and the ability to offer a good pension plan to an employee, in addition to an attractive salary and benefit plan, would go a long way in competing for the best and brightest people who could help to move their companies ahead.

This is an important part of gaining access to pension options and this access to pension options is a key improvement to Canada's retirement income system.

PRPPs will also complement and support the Government of Canada's overarching objective of creating and sustaining jobs, leveraging business investment, securing our economic recovery and encouraging sustainable private sector driven growth, an objective I wish members opposite would understand and support.

Quite simply, the PRPP framework is the most effective and targeted way to address the prime areas for improvement identified by provincial and federal governments in our recent review of the retirement income system, modest and middle-income individuals who do not have access to employer sponsored pension plans.

PRPPs would address this gap in the retirement system by providing a new, accessible, straightforward and administratively low-cost retirement option for employers to offer their employees. It would also allow individuals who currently may not participate in a pension plan, such as those self-employed and employees of companies that do not offer a pension plan, to make use of this new option. It would enable more people to benefit from the lower investment management costs that would result from membership in a large pooled pension plan, allowing for the portability of benefits that would facilitate an easy transfer between plans and ensure that funds would be invested in the bests interests of plan members.

These are all important areas where our retirement income system can and should be improved. That is why federal, provincial and territorial governments are working to implement PRPPs as soon as possible, and we are doing it collaboratively. Once again, I remind hon. members that this pooled retirement pension plan approach was agreed to as the best by all of Canada's finance ministers, provincial and territorial. These plans will help Canadians, including the self-employed, to meet their retirement objectives by providing access to a new, low cost accessible pension option.

The bill before us today, the PRPP act, represents the federal portion of the PRPP framework and is a major step forward in implementing pooled registered pension plans.

In addition, the tax rules for pooled registered pension plans have been developed by the Government of Canada and were released in draft form for comment in December of 2011. Comments received during that consultation period, which ended in February, are being reviewed currently. The tax rules for PRPPs will apply to both federally and provincially regulated PRPPs and will be implemented in 2012. By working in concert with the provinces, we can accomplish so much more by working together.

I would urge all the provinces to take the advice of the Canadian Chamber of Commerce, the Canadian Federation of Independent Business and the Canadian Life and Health Insurance Association Inc. when they collectively said, “The longer governments take to establish a system of PRPPs, the less time those employees will have to use this vehicle to save for their retirement”.

It is clear that Canadians want their governments to act on their priorities and deliver results on a timely basis, and the PRPP should be no different.

Many people in my riding work for small and medium-sized businesses and who are self-employed. As a former small business owner myself, I know how greatly they would benefit from the advantages presented by pooled registered pension plans.

It is for this reason that I urge, not only the Government of Ontario, but all provincial governments, to put in place their respective legislation as soon as possible so that all Canadians can start saving for their retirement. Once provinces implement their own legislation, PRPPs will be a key element of the third pillar of Canada's retirement income system. PRPPs will complement and operate alongside registered retirement savings plans and employer sponsored registered pension plans.

With all the measures we have put in place and with Bill C-25 bringing the federal PRPP framework into force, Canadians can be confident about the long-term viability of their retirement system. We are listening, and will continue to listen, to the views on how we can strengthen the security of pension plan benefits and ensure that their framework is balanced and appropriate for the long term.

Canada's retirement income system is recognized around the world by such experts as the Organisation for Economic Co-operation and Development, the OECD, as a model that succeeds in reducing poverty among Canadian seniors and in providing high levels of replacement income to retired workers.

With Bill C-25, we are making it better by working toward a permanent, long-term solution to encourage greater pension coverage among Canadians. At the same time, we will continue to ensure our retirement income remains one of the strongest in the world.

I would encourage all members of the House to support this important bill.

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12:20 p.m.

NDP

Alain Giguère Marc-Aurèle-Fortin, QC

Mr. Speaker, I am somewhat surprised that government MPs are portraying themselves as pension plan champions when this very government refused to do a thing to protect plans like Nortel's and AbitibiBowater's.

This is the same government that decided to raise the retirement age from 65 to 67 when there was really no financial need to do so. This same government is proposing a pension plan that is supposed to be the greatest thing ever, but it is refusing to include any provisions to control administrative fees, payout amounts and, most importantly, the bankers' ability to pay themselves bonuses out of the fund's returns.

Is it not bizarre that whenever there are corporate welfare bums to support, the Conservatives are always ready to give them whatever they want? They are privatizing profits, but ordinary Canadians are the ones who will have to cope with losses.

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12:20 p.m.

Conservative

Harold Albrecht Kitchener—Conestoga, ON

Mr. Speaker, I find it strange that people across the aisle would say that changes to the OAS system are not necessary. I have not spoken to one person in the past number of months, since we have talked about implementing this, who has not agreed that some changes are necessary. There has been a wide variation in terms of what the proposed solutions would be.

In the 1970s there were seven workers contributing to CPP for every retired worker. Currently that number is down to roughly four workers for every retired worker. In about 20 years that number will be reduced to two workers for every retired person.

Canadians understand. If the numbers are going from seven to one, now four to one and projected to be down to two to one, it was absolutely crucial that we had the courage to make these changes so my children, my grandchildren and great-grandchildren would have a plan in place that would see them have a sustainable retirement system, the Canada pension plan.