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 fisheries.

Topics

Pooled Registered Pension Plans
Government Orders

12:50 p.m.

Conservative

Kerry-Lynne Findlay Delta—Richmond East, BC

Mr. Speaker, the fact is that we have been applauded for this initiative, not just by industry and employers but by employees and the groups representing them. All the provinces are on board with the idea of providing small and medium businesses with such a plan. We are being lauded by so many.

I have an example. Ingrid Laederach Steven, owner of a store in Toronto, told reporters she has only two employees. She said, “...if I feel it's something that will benefit them, absolutely I would” offer this PRPP to them.

The NDP is fond of saying they are standing up for workers. Well, 60% of workers do not have a pension plan. A majority of workers in Canada are not part of a union that has bargained for pension plans. We need to bring in something that fits the reality of working life for most Canadians.

Pooled Registered Pension Plans
Government Orders

12:50 p.m.

Conservative

Joy Smith Kildonan—St. Paul, MB

Mr. Speaker, it really struck me, as I was talking to one of my constituents last weekend, how grateful my constituents are for this particular pooled pension plan simply because, as my colleague said, if one did not have a pension, there was nothing feasible.

I would like my colleague to outline very succinctly how this pension plan would work and how it would benefit the people who do not have one.

Pooled Registered Pension Plans
Government Orders

12:50 p.m.

Conservative

Kerry-Lynne Findlay Delta—Richmond East, BC

Mr. Speaker, as someone who was self-employed throughout most of my career before becoming a member of Parliament, and in small to medium-sized law firms in my case, I know this is something that would be most welcome. We did not have a vehicle to offer this sort of retirement security to our employees.

I would urge the provinces to get on with their mirroring legislation. The provincial and territorial governments are on side with this. They see the benefit of it. This is something that would benefit us all and benefit the economy.

Pooled Registered Pension Plans
Government Orders

12:55 p.m.

NDP

Alain Giguère Marc-Aurèle-Fortin, QC

Mr. Speaker, I would like to really discuss the issues raised by Bill C-25. This bill should have been an opportunity to improve pension plans in Canada, something that would have made Canadians wealthier. Unfortunately, with this system, the only ones who will benefit will be the corporate welfare bums.

It is important to understand how this system is funded. Employees do not get to decide who administers their retirement savings; the employer decides. Employees are not the ones who decide the level of investment risk they will assume or where their money will go. Once again, it is the employer who decides.

Ironically, the employer that decides the level of risk and chooses the administrator is in a conflict of interest with regard to that administrator. What happens when the employer does business with the same financial institutions with which it negotiates its line of credit, its insurance and all the other financial products a business might need? It is a blatant conflict of interest.

On top of that, in this bill the government is saying that employers, the business owners, are not responsible for their actions under the law. If they choose the worst administrator or the highest level of risk, this legislation exonerates them. Legal exoneration is included in Bill C-25. This is unbelievable. People are either strongly for or strongly against these corporate welfare bums. The Conservatives strongly support them, and Bill C-25 is proof of that.

The government has decided that no matter what the returns on the investments—be they negative or positive—the financial institution will be the first to benefit. Imagine that. The institution will charge administrative fees regardless of the returns. Then it will collect its profit margin because it is a private company. Then, depending on the level of risk, it will collect bonuses. Inflation is also a factor. If the return is 3% and inflation is 2%, then the net return is 1%. Unfortunately, people will not even get that 1% because they are the very last in line after administrative fees, bonuses and rates of return. Basically, this means that no matter what the situation, the administrators will be the ones making money. Whether the market is up or down, they will make money.

Paradoxically, if the deductions are too high, the people investing in the pooled registered pension plans proposed in Bill C-25 will experience consistently negative returns. A person who invests $600 a year for 30 years can expect to withdraw at least $18,000, right? Not so. With this wonderful plan, he might have much less than that. He is not even guaranteed to get back the money he put in. This is not a pension plan or even a lottery. It is outright theft.

The Conservatives have decided to put the financial future of retirees in the hands of people whose primary interest is to earn the maximum amount of money, not to generate a return or guarantee a pension, but to earn money now, right away.

The icing on the cake is that the Conservatives say in the bill that administrators are prohibited from using gifts to encourage employers to allow them to manage the pension fund. However, this type of deal is allowed according to the regulations. Not only is there already a clear conflict of interest, but this also legalizes bribes. Unbelievable. Then they claim that it is for the good of the employees.

We have proposed that, at least, the right to charge administrative fees should be dependent on the return.

If pension funds are properly managed, the administrator has the right to charge a fee, but if it they are poorly managed, the administrator should not be paid. The administrators must take on part of the risk, which would motivate them a bit to always aim for big returns. But no, they do not take on any risk. The only risk is taken on by the employees, who do not even have the right to choose their administrator and level of risk. That is outright abuse. This is where Bill C-25 systematically goes after workers.

This is not a pension plan, but an extremely toxic financial product just like the junk bonds we saw in the 1970s and 1980s, and the commercial papers we saw in 2008. That is how toxic this is. People absolutely must not invest in this. I would like to take this opportunity to tell people that the last thing they should do is choose to participate in such a plan. They should buy a house. We hear a lot about pension plans, but at the same time, we have never seen such a high number of Canadians who own their homes.

Quite often, Canadians' main investment is their home, and that is smart. However, the Conservatives are not taking that into account. They are saying that 60% of people do not have a pension plan. That is not true. Canadians are investing in their pension by investing in their homes. A house is a capital asset that appreciates in value rather than depreciating like the plan the government is proposing.

What can we say about a regime, a political party, a government that systematically stands up for the rich? The government is ignoring the needs of all Canadians to help only 1% of the population, the wealthiest members of our society. Since the Conservatives have come to office, the gap between the rich and the poor has been widening. The poor have become poorer, as has a large part of Canada's middle class—in short, the vast majority of Canadians. Meanwhile, the Conservatives' friends, the corporate welfare bums, have grown even richer. And that does not bother the Conservatives at all. Clearly, they are even in favour of it.

This type of government regime, which robs the vast majority of people to favour its friends, is called a kleptocracy. That is exactly what we are dealing with here: people who work only for the wealthiest members of our society in the hopes that perhaps, one day, these extremely rich people will invest their wealth and use it to buy goods, which will drive the economy. However, what we have been seeing for the past 10 years is that these people are not investing in Canada. They are taking the money that they get in Canada and investing it abroad, in financial products and corporate acquisitions. That is not creating any jobs at all. It is even causing us to lose jobs.

The Conservatives could have taken action to prevent situations like the ones that occurred at Nortel and AbitibiBowater from happening again, but they did not. Their friends, the corporate welfare bums, did not want them to. They did not want regulations to be imposed, and regulations are still not present in Bill C-25. The Conservatives are not regulating this bill.

They say that the market will determine how to proceed. But right now, the market is not favourable to workers in this country. It only works for the people opposite in this kleptocracy, people who only work for the rich. They have once again decided to systematically favour the rich. This pooled registered pension plan is a highly toxic financial product. I urge all Canadians not to invest a single penny in it, because it is a guaranteed loss. The only people who are going to make money from those plans are the ones administering them.

Pooled Registered Pension Plans
Government Orders

1:05 p.m.

Conservative

Phil McColeman Brant, ON

Mr. Speaker, as one of the people who the member across the way considers corporate welfare bums before I got into politics, I take great offence. This warped view of the NDP members that employers, business owners, entrepreneurs, corporations and companies in this great land of ours are somehow the enemy of this country and of workers could not be further from the truth. This is more warped than I have ever heard anybody speak of before. They are the people who hire people, who take the risks and create the wealth.

However, my question for the member is this. How does he square this when the people he represents, who are unionized labour, take their pension money and invest it in these corporations of corporate welfare bums for a return on their investment?

Pooled Registered Pension Plans
Government Orders

1:05 p.m.

NDP

Alain Giguère Marc-Aurèle-Fortin, QC

Mr. Speaker, let us be clear. Corporate welfare bums are entrepreneurs who never take a financial risk, even in investment. They always manage to make us pay for them. If there is money to be made, they are going to make it, and if there is a risk or a financial loss to assume, the community of Canadians is going to assume it.

If you were that type of entrepreneur, it is really sad, but you are one of the corporate welfare bums. But if you were not and you were honest, assuming the risks and the danger of a financial operation, I congratulate you.

In terms of investments, what risks do administrators run? None. Administrators pay themselves first, even when there is a deficit and a performance loss. They make the loss worse.

Where is the notion of risks for entrepreneurs? You are saying that private business is a good thing, but in this case, it is not private business. The fact of the matter is that people leave with the money and we are left with the bill.

Pooled Registered Pension Plans
Government Orders

1:05 p.m.

Conservative

The Acting Speaker Bruce Stanton

I will remind the hon. member that his comments are to be made through the Chair.

Pooled Registered Pension Plans
Government Orders

1:05 p.m.

Liberal

Kevin Lamoureux Winnipeg North, MB

Mr. Speaker, I would like to repeat a question that I asked a little while ago. Why it is that the New Democratic Party has chosen to oppose this bill?

We in the Liberal Party have recognized that there are flaws in the bill. There are things that could have been done that would have ensured that the consumer would have been able to derive a larger return. We have made suggestions to that effect.

However, with respect to the principle of being able to provide another alternative to a consumer, someone who is looking at retirement, and allowing that to move forward, it would seem to me that the NDP are on an island by themselves. There are even provincial New Democrats who support this. It seems to be just the federal New Democrats who do not support the opportunity this bill would enable.

I can assure the House that the member is no more of an advocate for OAS than I. I do not quite understand why the NDP members would oppose this as a tool that could be used—

Pooled Registered Pension Plans
Government Orders

1:05 p.m.

Conservative

The Acting Speaker Bruce Stanton

Order. The hon. member for Marc-Aurèle-Fortin.

Pooled Registered Pension Plans
Government Orders

1:05 p.m.

NDP

Alain Giguère Marc-Aurèle-Fortin, QC

Mr. Speaker, what astonishes me is the Liberal Party's ability to often, always, eternally try to have their cake and eat it, too. But they always discover that they have eaten the cake. They are dismayed to find out that they have eaten the cake.

The problem with this financial product is that the Liberals do not dare acknowledge that it is extremely toxic. We must not invest money in something that does not guarantee a minimum return. It is a pension plan, not a financial risk.

Now, the Liberal Party representative would really like us to ignore this simple reality: at age 65, people will have to have a guaranteed minimum income, which this product absolutely does not guarantee them.

Pooled Registered Pension Plans
Government Orders

June 12th, 2012 / 1:10 p.m.

Conservative

Ted Opitz Etobicoke Centre, ON

Mr. Speaker, I am glad to rise once again in this House and speak again on Bill C-25, pooled registered pension plans act.

This proposed piece of legislation is of vital importance to my constituents in Etobicoke Centre. I have hundreds of businesses, especially small and medium-sized businesses, in Etobicoke Centre. I really do appreciate the opportunity to elaborate on the bill's many merits here today.

As a member of Parliament, I am immensely proud to be part of a party that has the best record in providing retirement security options and for introducing legislation that would encourage the entrepreneurship of the ma-and-pa shops, which are the drivers of our economy and form an essential part of my riding of Etobicoke Centre, as I am sure they do in the rest of the country and in many ridings across the country.

Since 2006, our Conservative government has established a strong record when it comes to aid for small businesses. We have reduced the small business tax rate, provided $20 million to support the Canadian Youth Business Foundation and extended the accelerated capital cost allowance to help businesses make new investments in manufacturing and processing machinery and equipment.

Our government's square focus on incentivizing business has resulted in real growth. Canadians can rest a little easier knowing that our country has the enviable position of creating jobs in a fragile global economy, more than 760,000 so far.

Canadians have come to expect good economic stewardship from this side of the House, and we will continue to deliver that good economic stewardship. As part of this commitment to action, our government introduced the pooled registered pension plans, which would provide for a new accessible, large-scale and low-cost pension option to employers, employees and the self-employed.

In my last speech, I spoke about wide-ranging support for this pension option. I drew particular attention to the fact that all our provincial partners are on board and that stakeholders like the Canadian Chamber of Commerce and the Canadian Federation of Independent Business have urged the government to make PRPPs a reality as soon as possible.

As my colleague, the Parliamentary Secretary to the Minister of Justice, said earlier, Ingrid Laederach Steven, owner of the Swiss chocolate shop in Toronto, is very welcoming and glad of this because there are so many different things for retailers, restaurants, farmers and so on. She wishes it could have been done 25 years ago.

The support is warranted, given the attractive features of the PRPPs, including their portability, whereby many employees will be able to transfer funds between administrators when they change jobs, and their auto-enrolment feature, which would reduce administration costs and increase participation rates in the program.

PRPPs would also have the added bonus of having a very low cost, given their scale, design and lower investment management costs compared to the average mutual fund. This makes it affordable and reachable for the people who work in small and medium-sized businesses.

PRPPs would improve the range of retirement savings to Canadians and provide an accessible option to the 60% of Canadians who do not currently have access to workplace pension plans. In the end, PRPPs are an essential tool, given the aging demographics we face in the future and our need to provide more retirement income options for our constituents.

Instead of acknowledging the many benefits of this plan, as other stakeholders have done, and get working on Canada's economic recovery, as this government does each and every day, members across the way are doing what they do best, trying to delay our economic progress and throwing false accusations our way.

For example, they allege that the pooled registered pension plans would come at the cost of further progress on reforming the Canada pension plan. To that I reiterate yet again what my colleagues have said before me: pooled registered pension plans are meant to complement the services our government has already provided for Canadians' retirement security and not replace them.

Pooled registered pension plans would work in conjunction with new initiatives that our government introduced, including pension income splitting, tax free savings accounts, as well as traditional retirement income vehicles like the CPP.

Furthermore, changes to the Canada pension plan, as the opposition knows full well, require the consensus of two-thirds of the population. We have already seen at the 2010 finance ministers meetings that a number of provinces hold strong objections to expanding the CPP benefit. They are unanimous, however, in pursuing a framework for pooled registered pension plans.

The opposition also glazes over the fact that its suggestion to increase contribution rates for CPP would mean higher payroll costs for small and medium-sized businesses and higher premiums for workers and the self-employed. Since CPP is mandatory rather than voluntary like the pooled registered pension plan, an expansion of CPP would mean that Canadians would face another obligatory reduction from their paycheque and Canadian entrepreneurs would face another barrier in making their business profitable, which is something we cannot abide.

Dan Kelly, the senior vice-president of the Canadian Federation of Independent Business, which represents 108,000 businesses across Canada, said a CPP enrichment would be a payroll tax and is “very worrisome” for businesses.

He went on to state that:

For every one percentage point 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.

That is clearly unacceptable.

Our government, unlike the opposition, does not believe in jeopardizing Canadians' economic welfare by imposing higher barriers for job creation. The opposition also objects to the pooled registered pension plans as a private sector solution and takes particular offence at the fact that these plans would invest in the stock market.

However, as one of my hon. colleagues pointed out earlier in the debate, the entire pension system, both public and private, relies upon the stock market. My colleague drew on the example of Canada pension plan, 49.6% of which is invested in equities or stocks.

Last, the opposition has hijacked this debate to make repeated accusations, criticizing our Conservative government's strong record on seniors' issues. I take exception to those allegations, given that my riding has a large and thriving seniors population and I am consistently working hard to ensure that their voices are being heard in this House.

Contrary to what the opposition alleges, our government has created an enviable retirement security system in Canada and has prioritized seniors' issues. After all, it was our government that introduced pension income splitting, doubled the maximum amount of income eligible for the pension income credit and increased the age credit amount. As a result of actions like these taken to date by this Conservative government, seniors and pensioners will receive $2.5 billion in targeted tax relief for the upcoming fiscal year.

A joint federal-provincial research working group, in May 2009, found that Canada's retirement income system was providing Canadians with an adequate standard of living upon retirement. It found, for example, that the disposable income for Canadians age 65 years or over was about 90% of the average disposable income of all Canadians and was the third highest of selected OECD countries.

This report, however, found that despite the many measures already instituted by our government, some Canadian households, especially modest and middle-income households, are at risk of under-saving for retirement, and that is of great concern. It is precisely because of this that pooled registered plans are so needed and this bill is so important.

I am convinced that pooled registered plans are the way forward, as they would offer an enormous potential to improve the retirement security of all Canadians and, particularly, the 60% of those Canadians who do not have the luxury of a workplace pension.

This program has already drawn the interest of small-business employers, stakeholders and all our provincial partners.

In these fragile economic times, a sound, innovative policy like that behind the pooled registered pension plans is essential for Canadian competitiveness and for the welfare of our citizens.

I urge all members in this House to support the bill.

Pooled Registered Pension Plans
Government Orders

1:15 p.m.

NDP

Malcolm Allen Welland, ON

Mr. Speaker, I want to thank my colleague for his intervention. He quoted statistics from the Canadian Federation of Independent Business, saying we cannot afford even a 1% increase in the Canada pension plan. However, part of the spin that the Conservative government has given us around pooled registered pension plans is this whole idea that employers welcome it with open arms, as if somehow the employers would actually, perhaps, contribute something. However, he just articulated that small and medium-sized businesses are saying, “Wait a minute; we can't afford even 1% in CPP”.

I wonder where indeed this idea comes from, from the government, that somehow small and medium-sized enterprises, if we had this plan, would contribute to this one versus the Canada pension plan. If they cannot afford that one, how could they afford the other? It seems quite an articulate balancing act, almost the equivalent of Mr. Wallenda walking on that tightrope across Niagara Falls, as to how exactly he is going to do that.

I know the member for Niagara West—Glanbrook and I will probably be in attendance when that happens, Niagara being such a great place.

Clearly, employees can actually have a savings plan through an RRSP through their employer if their employer wants to do that. This is nothing more than a glorified registered pension plan with another name, with this whole idea of “You're in, unless you want out”.

It reminds me of the negative billing we did away with when it came to cable TV; we would now take that option and put it back in.

Pooled Registered Pension Plans
Government Orders

1:20 p.m.

Conservative

Ted Opitz Etobicoke Centre, ON

Mr. Speaker, I agree with the hon. member on one point. Niagara is an outstanding place. As the former commander of the Lincoln and Welland Regiment, I know that well.

The hon. member is entirely wrong, because this would offer a vehicle for many people who do not have the option of a large company pension plan or are in the more modest and medium income brackets. This would give them greater potential. It would be another tool in the toolbox.

This is a government that looks to the long term of Canadian prosperity and Canadians' well-being, and this tool in the toolbox would help Canadians save over the long term for their retirement. As with so many other programs, this is yet another program that would help many Canadians be able to do that and look forward to a very comfortable retirement in the years to come.

Pooled Registered Pension Plans
Government Orders

1:20 p.m.

Liberal

Judy Sgro York West, ON

Mr. Speaker, I could challenge the member on a variety of different counts. I am glad he used “tool in the toolbox”, given the fact that it is exactly what I referred to. It is a tool, but it is a very small tool in a very huge toolbox that needs a lot of different ways of dealing with the pension crisis that is facing future generations in the country.

When I was recently in the member's riding and talking to a variety of people, they did not talk to me about Bill C-25 and what a wonderful thing it would be. They talked to me about changing the age from 65 to 67 and the budgetary changes. Their concerns were with the direction the government was going in. It clearly was very much opposite to the concerns the hon. member mentioned.

Next time I am talking to his residents, I will clearly tell them that the member is supportive of pooled pensions but is also supportive of changing the age. How is he responding to those who raised that as a concern?

Pooled Registered Pension Plans
Government Orders

1:20 p.m.

Conservative

Ted Opitz Etobicoke Centre, ON

Mr. Speaker, I thank the hon. member for doing a drive-by in my riding.

I talk to my constituents all the time, every day that I am home, all weekend. I work right through Sunday and I talk to a wide variety of residents and constituents. They write to me, email me and phone me, and I phone them back as well as visit them at their homes. They are interested in a wide variety of things.

This is a tool in the toolbox, as I articulated, but the government is building a bigger toolbox all the time. That is what we are going to do for Canadians.

When it comes to pooled registered pension plans, hundreds of businesses in my community are going to benefit from that. The business owners I have been talking to in my community, because I actually live there and work there and talk to those constituents, tell me that they are in favour of the pooled registered pension plans and that this would be another tool they can look forward to in helping themselves, helping their employees and helping our constituents who do not have access to these plans to prosper, grow and make sure their retirement is comfortable because they would have a new opportunity to save for their retirement.