John Solomon

[Division No. 40, December 1st, 1997]

Mr. Speaker, NDP members vote yes on this one.

[Division No. 39, December 1st, 1997]

Mr. Speaker, NDP members present this evening vote no on this motion.

[Division No. 38, December 1st, 1997]

Mr. Speaker, NDP members present vote no on this motion.

[Division No. 37, December 1st, 1997]

Mr. Speaker, members of the NDP present vote yes on this motion.

[Division No. 36, December 1st, 1997]

Mr. Speaker, members of the New Democratic Party present vote yes on this motion.

[Division No. 34, December 1st, 1997]

Mr. Speaker, NDP members vote yes on this motion.

[Canada Pension Plan Investment Board Act, November 27th, 1997]

Mr. Speaker, I am happy to speak to this again. There are some new amendments before the House and I want to say a few words on behalf of the New Democratic Party caucus with respect to these amendments to Bill C-2.

I would like to begin by thanking the member for Saint John and her caucus in the Conservative Party for supporting some our amendments. I have worked off and on with the member for Saint John over the years and I find her to be a very co-operative person on many issues. She does not totally agree with our philosophy, but she sure agrees with a lot of it. I just want to acknowledge that today and thank her for her support on these amendments.

Before I deal specifically with Motions Nos. 11 and 13, 15 through 19 and No. 22, I want to say a word about No. 21 on which I understand the government has undertaken to follow the advice of the NDP. The NDP suggested that the auditor general be the auditor of record for the Canada pension plan benefits. I understand by reading the orders of the day that the government has put forward an amendment suggesting that the auditor general be the auditor of record for the Canada pension plan. That is something all parties would agree to support.

With respect to Motion No. 11, the NDP has a bit of a problem with accumulating a large surplus without reinvesting in our communities, our local businesses and our provinces with respect to infrastructure and creating jobs. Our motion provides some recognition of the fact that the Government of Canada and the people who support the funding of the government, the taxpayers, unanimously agree that government is a going concern.

What we mean is that when we are in business there are certain long term obligations, whether it is capital costs or capital accumulation. There are long term costs when it comes specifically to pension benefits for some business people. This motion we are putting forward acknowledges that the government has a going concern status, which means that it is going to be around for a long time and has a source of revenue that fluctuates on a regular basis, but is consistent. If it is a stable concern it can fund a pay as you go pension plan more easily than a corporation or a business that is having financial problems.

The notion of an unfunded liability is not really pertinent to the Canada pension plan as we know it.

With respect to Motion No. 13, we are very concerned about what the government is doing with respect to deindexing the yearly earnings. When the minimum is deindexed, there is a burden on those at the lower income scale. Our basic amendment freezes the year's basic exemption, the YBE, at $3,500 beginning in 1998.

We are proposing to let it float, let it be indexed for inflation. My colleague from Qu'Appelle indicated earlier that in 1966 when the plan was initially created as the result of a lot of hard work from the CCF and the New Democratic members across the country, the minimum yearly basic exemption was about $400. At that time the maximum was about $4,000 on earnings. It was a ratio of about 10 to 1.

Now we see the basic yearly earning being $3,500 on the basis of contributions made on a top salary of $34,000, so about a 10:1 ration has been sustained. We feel that if this is not sustained on a long term basis, it will hurt those people who need the support most. We are very concerned about this. We are asking in this amendment to make sure that the yearly basic exemption is indexed with inflation.

On Motion No. 15, I know the Bloc had some concerns about this. We believe very strongly that employees are getting away from paying the Canada pension plan share because many employees are hired on a part time basis. They are paid up to about $3,500 but they do not qualify to pay pension contributions and then they are not called back. These are mostly part time workers, women and others, who would suffer. We are asking that this minimum $3,500 be adjusted particularly in the face of work in this country which is ever-changing.

With respect to Motion No. 16, my colleague from Qu'Appelle basically indicated very clearly what we after here. We want better benefits for our seniors. Our change proposes that the benefit formula in the calculation is altered. The net effect is to provide increased benefits as opposed to reducing benefits, which the government wants to do. It seems to me that as we get older and inflation kicks in and the cost of living increases, we want to provide our seniors, our pioneers, with some sense of security so they will not have to rely on welfare and other things to get by on in their retirement years.

With respect to Motion No. 17, we propose to delete clause 69 because 69 is really attacking those who can least defend themselves. It reduces benefits for the disabled. It really attacks those who need more support as they get older. For example, we have a worker who works for 40 years, turns 55 or 56, gets injured, does not have a disability plan and cannot work. He or she does not contribute in those last eight or 10 years, which are crucial for CPP benefits to maintain a higher pension when he or she gets older. Therefore they diminish their pension for the years they need it the most. These are people who are injured. They are not people who are abusing the system or taking advantage of it.

With respect to Motion No. 18, we want to uncap the ceiling. We are proposing that the $35,800 be increased. For example, the National Council of Welfare is quite disappointed that the size of earnings are not considered an increase. Under current arrangements, CPP contributions apply to a relatively narrow band of earnings. Of the larger earnings base, contribution rates do not have to rise so quickly. The trade off would soften the impact on workers with lower than average wages. Those who are earning more money can afford to pay a little bit more and subsidize the plan.

In 1996 the rules of contributory earnings begins at the year's basic exemption of $3,500 and goes up to the year's maximum pensionable earnings of $35,004, a rough approximation of the average industrial wage. In the United States the upper limit is not $35,004. The upper limit for social security in the United States is about $62,700 U.S. which is about $88,000 to $90,000 Canadian. We are pegging ours at a measly $35,000. We believe it would be in the interests of Canadians to explore the impact of expanding the upper limit of contributory earnings to the Canada pension plan.

Motion No. 19 amends Bill C-2 by deleting clause 76 which in essence, if clause 76 remains, is another attack on women. It is unnecessary and it fails to provide a good overview with respect to how the CPP works and how it impacts on future benefits for Canadians. Why the changes? Reduction in combined benefits, reducing the ceiling for disability and survivor benefits. We do not want to reduce them. We want to increase them. We are suggesting our new combined benefit calculations should be increased for survivor, retirement and disability benefits.

I will end my comments by summarizing that we believe these changes are beneficial to those people who need it most, those people who are disabled, those people who have a lower income. We believe if we adopt these changes we will have a more viable Canada Pension Plan for not just the next four or five years but for as long as our country exists.

[Canada Pension Plan Investment Board Act, November 27th, 1997]

Mr. Speaker, I rise this afternoon in opposition to this particular amendment which is being put forward. I want to rise in opposition as the small business critic for the New Democratic Party.

I look at this proposal and I see that the amendments they are putting forward in many ways do not bode well for small business. Small businesses have a lot of challenges right now. They are faced with the pending increase in interest rates. Small business people have always had challenges with respect to capital acquisition.

We are also looking at the huge increase in profits by the banks year over year. The only conclusion one can draw from that is that not only are they receiving a huge amount of increased profits and revenues from consumers in this country, but also from the small and medium size businesses which employ the vast majority of Canadians.

Business is also faced with the challenges of the GST collection on behalf of the federal government. This is a burden the government has put on them.

Finally of course the issue that we will be dealing with this afternoon is the payroll taxes as they are called. They are basically programs which assist small business owners to provide some level of support in terms of a pension plan, or unemployment insurance plan, or disability plan for their employees. By the way, a vast number of businesses and owners of small businesses employ those who own the businesses so this is something that is very important to them.

What the amendment outlines in terms of this particular bill is it proposes that any increase in the contribution rate with respect to the CPP for the years 1997 through 2000 shall not come into effect unless the cumulative increase in anticipated revenues under the Canada pension plan resulting from the changes in the contribution rate after December 1996 are offset by at least a cumulative decrease in anticipated combined employer and employee contributions under the Employment Insurance Act for those same years.

I have some information which I would like to share. The Canada pension plan has been a very helpful program for small business. If small and medium size businesses did not have such a plan, they would be forced in many ways to commit greater resources, which are limited to them, to establishing their own type of pension plan. As we know, establishing a pension plan for a small number of employees on their own would be very costly and prohibitive. There would be less pension coverage for employees who work in the small and medium size businesses.

I want to share with members in the House today some information which was provided and accumulated by Statistics Canada on self-employment. Self-employment grew rapidly both in absolute and relative terms between 1989 and 1996. During this period self-employed workers accounted for more than 75% of total job growth. Seventy-five per cent.

Throughout the period 1989 to 1996 the number of business owners increased by 25%, by a margin of 457,500 compared to an increase of 1% or 132,700 in the number of employees. In essence small business has employed more people over the years. Most of those who became self-employed during this period worked alone and did not hire other workers.

We are concerned about the rapid increase in CPP premiums. As the small business critic and spokesperson for the New Democratic Party caucus, we believe that contributions should be increased at a slower rate over a longer period of time to allow self-employed people to adjust their businesses and to allow small and medium size businesses to adjust their forecast and financial analysis to meet these increased payroll taxes.

I believe the majority of business people want to continue in the program. That is the information I have received. But the information I have also received is that they want more time to ensure that they are able to adjust their revenues.

As we know, small business cannot announce a 25 or 50 basis point increase in the charge for their services like the banks can. If they do, they just do not seem to stay in business very long. Whereby the banks are large businesses and are basically oligopolies and can do whatever they want with respect to charging these very same small and medium size businesses increased rates at the drop of a hat. They do this on a fluctuating basis without a lot of rationale, far too often costing small business and self-employed people a great deal of anxiety, anguish and concern, not to mention the fact that it jeopardizes their business and their way of doing business.

Saskatchewan registered the highest proportion of self-employed workers in 1996. Saskatchewan is the province I represent. If we exclude agriculture from these numbers, actually British Columbia had the highest incidence of self-employment in 1996.

It is extremely important to us in Saskatchewan as in other parts of the country, but more in particular because of the agricultural economy. Many farmers have incorporated and they are paying their own contributions. They are self-employed. In many cases family members work in the incorporated partnerships, farm operations or agricultural operations and they pay their Canada pension plan premiums as well.

People who are self-employed pay not just the employee share, but the employer share. It is a very big concern for Saskatchewan business people in terms of a quick increase in premiums in a short period. This underscores our position in the NDP that we should take lower increases over a longer period of time.

According to the most recent data available, average earnings among self-employed individuals in 1995 were 91% of average wages and salaries. The distribution of earnings among the self-employed is more polarized than the earnings of paid workers.

In 1995 approximately 23% or 392,800 self-employed workers earned less than $10,000. Almost one-quarter of self-employed workers earn less than $10,000 a year. That means they are very restricted in terms of discretionary revenues and discretionary income to meet these higher increases in Canada pension plan premiums.

About 45% of self-employed workers in Canada earned less than $20,000 a year. At the other end of the distribution, only 4% of self-employed workers earned in excess of $100,000. In 1995 the average earnings of self-employed women were slightly higher than one-half of their male counterparts.

Underlying the distribution and earnings of self-employed workers is the amount of time self-employed individuals work. Compared to paid workers, self-employed workers are more likely to work either short or long hour work weeks. But part of the earnings gap between male and female self-employed workers is undoubtedly attributed to the fact that male self-employed workers worked a longer work week. In 1996 male self-employed workers worked an average of 13.3 hours more per week than their female counterparts.

This particular proposal in my view is also detrimental to women, whether they are in small business or not. The increases and changes in CPP will affect women most in a very negative way.

Most of the growth in self-employment between 1989 and 1996 was voluntary. It is estimated by Statistics Canada that only 12% were pushed into self-employment because there was no other work available. This particular statistic means that we have a trend in our country whereby more and more people are being frustrated in terms of finding employment and therefore are going into small business. We also have a trend where more people are interested in working for themselves because they have not had a proper deal with respect to their employers.

I have a number of things I want to raise but the final thing I will talk about is this. I want to agree with the Liberal member for Mississauga South when he said that these increases are of concern to him. They are of concern to us in the NDP. We agree with him on this point, that we should not put the EI surplus into the Canada pension plan benefits. That jeopardizes the employment insurance program which was set up to insure workers who are unemployed. We feel that is not only a cross-subsidization but really a wrong way to deal with it.

In ending my remarks, I want to say on behalf of the small business community in Canada that we oppose this amendment. We would put forward lower increases in CPP benefits over a longer period of time to meet the needs of a very important program.

[Canada Pension Plan Investment Board Act, November 26th, 1997]

We know who their friends are. Their friends are people like Conrad Black. My colleague across the floor from the Liberal Party says that the Reform Party should be called the reverse party. That is probably a suggestion others have as well. Others suggest that maybe it is the reformatories, we do not know. There are many things people use to refer to these individuals and their parties because they keep wanting to reform and change the way Canadians govern themselves, the way we have built our country, the way we have encouraged small business to build up this country from the grassroots.

Reformers are like ostriches with their heads in the sand who say that they are close to the grassroots. The problem is they are buried in the sand and do not understand what grassroots is all about. If you ask anybody in this country if we should give tax deductions to Canadians to invest outside our country they will say “I don't think so”. If we are going to give tax deductions, we would rather give them to Canadians to build our economy, to reinvest in our communities, to reinvest in our small businesses.

I am puzzled as to why the Reformers are proposing this. The only conclusion is they are very supportive of these individuals who have lots of money. My advice to them is that if they want to invest outside of Canada, they should take their own money out of their own pockets, out of their own farms and businesses if they have them and go and invest in Fukuoka, Japan or in Kumamoto, Japan or in Kuala Lumpur, Malaysia or go and invest in Indonesia. There are some good gold stocks in Indonesia they could probably invest in. I do not happen to have any because I do not do that sort of thing. I have problems enough, as most Canadians do, investing in things they know, never mind in countries they have never heard of before.

We must look at this proposal by the reformatories and defeat it as quickly as possible.

[Canada Pension Plan Investment Board Act, November 26th, 1997]

Mr. Speaker, I am pleased to say a few words on Motion No. 2. I want to say a few words because I am a bit puzzled with respect to my colleagues who are moving this and supporting this motion.

The premise that the Reform Party and the Conservative Party put forward with respect to this issue on Canada pension plan amendments is they want Canadian taxpayers to give tax deductions to individuals and businesses that make CPP contributions, give tax breaks in Canada, yet they want the money invested outside Canada.

I do not understand the rationale for this. Maybe they have not heard of the Hang Seng or Tokyo or some of the other foreign markets that seem to be in a little turmoil.

It seems to me if tax breaks are going to be given in Canada for deductions with respect to pension plans, then maybe the money should be invested in Canada to support the businesses that are hiring people and building our country. I do not understand this.

However, the Reform and the Conservatives talk about back to the future. They are winding the clock back to 1897, 100 years back to the future when it was archaic. I think it is outrageous what they are proposing.

Let us just clarify this one more time. The Conservative Party is the party of Brian Mulroney and Grant Devine and the harem that is now in jail. We have the Reform Party which is the party of Grant Devine and Brian Mulroney. They want to support tax expenditures in this country to invest outside our country for their friends. Who are their friends?