moved that Bill C-428, an act to amend the Canada Pension Plan (adjusted pension for persons with other income above the level at which the second percentage of income tax applies), be read the second time and referred to a committee.
Mr. Speaker, Bill C-428 deals with one of the most pressing problems that will affect us in the future. We have an aging population and this demographic threatens to rupture our social programs in the future unless we deal with these challenges today. In particular, it will have a profound impact on our health care system and on our pension system.
Bill C-428 is the first of two bills that I put together dealing with the issue of pensions, specifically, how we ensure that our public pension schemes will be there for us and successive generations. If we do not deal with this we will have a sea of seniors, particularly low and middle income seniors, believing their pensions will be there for them in the future but, unfortunately, will not be there for them.
I want to provide the House with a few specifics. In 1973, 7% of our population was over the age of 65. Today it is 13%. By the year 2030, a staggering 25% of our population will be over the age of 65. In other words, two to three people working at that time will be supporting a retiree. Let us think for a moment what that will do to our pension plans.
We know our aging population will increase because people are living longer. Today it is estimated that a man will live to an average age in the upper seventies and a woman to the average age in the low eighties. It is anticipated that in the year 2030 a person's average lifespan will be 90 years of age. This means that people will receive money from their public pension plans for 25 years.
On top of that, our birthrate is falling. With our aging population there will be a huge demographic bubble. We have a truncated population that is working with a smaller and younger population coming up beneath it. As I said before, this demographic bubble will cripple and punish our pension plans unless we deal with this problem today. The Europeans and the Americans have begun to deal with this problem but we have not. If we fail to deal with it, it will be at our peril.
Bill C-428 has several purposes. First, it would open the debate on the issue of saving our pension plans and our social programs given this demographic pressure, and second, it offers solutions to saving our CPP.
Specifically, Bill C-428 does the following. If people want to retire at the age of 65 they can. If they want to continue to work past the age of 65, they can continue to work and receive their income and still receive a graded percentage of their CPP. For example, people who are age 65 will receive 40% of their CPP premiums. People who are age 66 will receive 50%. This amount will increase to a full 100% at the age of 70. This acts as an incentive to keep people in the workforce. It also reduces the demand on our CPP, and that is important.
The government has been forced to successively increase the amount of contributions we make so that today's contribution of 9.9% is a 175% increase from what it was when the CPP was originally put forth in 1966.
The purpose of the bill is to encourage people to stay in the workforce. As I said previous, in the future fewer people will be in the workforce. How do we encourage them to stay? Back when the retirement age was set at 65, the average lifespan was less than 60. Now it is higher. People at the age of 65 or 70 years of age are physiologically and biologically much younger than people at that age some years ago.
Furthermore, many of the jobs that are available today are in the service sector and that sector does not require the great physical challenges that occurred in times past in the manufacturing and resource sector.
People want to work. A lot of people are having difficulty making enough money to put some aside for their retirement. Why not give them the opportunity to work? Why not encourage them to stay in the workforce and give them the ability to provide for themselves?
The full concept of a mandatory retirement age of 65 in my view is obsolete. We should retire the mandatory age of retirement. It is long overdue. It is an anachronism from times past.
By keeping people in the workforce we are also keeping the brain trust. Many people between the ages of 65 and 70 are our most productive workers. They are often the brain trust in organizations. It would be a shame to lose that by farming people out to retirement when we could greatly use their skills, capabilities and experience.
The other aspect of the bill, which will be dealt with at a subsequent time, is the notion we have of the old age security system. It should be focused on the lower to middle income seniors in an effort to save it. As I said before, that money comes from general revenues. As time passes, the demands we will be putting on those general revenues will increase.
We should also ensure that the voluntary component of savings are actually strengthened. For a long time the government has stood by its anachronistic policies that have prevented people from providing for themselves upon retirement.
There are a few solutions. We should abolish the foreign content in RRSPs. There are so many ways for people to bypass the situation that it makes no sense for the government to oblige everybody else to adhere to this anachronistic system. We should double the amount of money people are allowed to put away in their RRSPs. We should allow people to pull out $15,000 tax free from their RRSPs after the age of 60.
There is going to be greater and greater difficulty to provide for a variety of programs, including health care. Why not enable people to provide for themselves which would allow them to pay for those things that they would like to have and which perhaps may be life saving? As a physician, I see that many things that we would like to provide for our patients are not covered. People will be forced to pay for those things themselves. Where will they get the money from?
It would be innovative of the government to allow people over the age of 60 to remove $15,000 from their RRSPs. It would be a godsend to them. It would provide for the things they need, such as food on the table or medication when they get sick. Perhaps it would help provide for their parents who would be in their nineties.
The World Bank said that there are three pillars to a sustainable, reasonable, fair and strong pension system. The first is a tax financed, means tested, minimum pension system. We have that in the OAS/GIS system. The second is an employee based mandatory pension plan. That is the CPP system. The third is private pension plans.
There are five goals for whatever we do. The first is adequacy, so that people who are retired will have enough money in their pockets to provide for themselves. The second is fairness, so that people can retire at a reasonable age and that they will have enough money to provide for themselves. The third is sustainability. Fourth is transparency. Fifth is that the system is efficient, in other words, that we get the greatest percentage and rate of return from the system that we have today.
There is a big change coming and the House is probably going to prorogue. Everybody knows this. This bill may not go anywhere, but I hope that the government listens to the essence of the bill and the intent with which it was introduced in the House. If we do not take seriously the impact of our aging population on our social programs, we will be left with tens of thousands, perhaps hundreds of thousands of seniors who cannot put roofs over their heads, food on their tables, or pay for their medication when they get sick. What kind of a society will we have if there are so many people who worked so hard for so long for our country and we are not there to help them?
The HRDC website clearly states that our publicly funded pension plans are there as a supplement to our private pension plans.
It is sad to say that until recently with the declining real incomes that Canadians have had, it is the low and middle income seniors who are the most hurt by the government's current regressive tax policies and its regressive policies with respect to pension plans. It cannot continue to take the easy route out simply by trying to increase contributions on the backs of taxpayers, on the backs of employees and think that this is a panacea which in the future will enable seniors to provide for themselves. The facts simply bear out that it is a fallacy.
I looking into the future and see an aging population and a shrinking workforce. That is going to have an impact which is not being acknowledged at this point in time.
The government could easily deal with the concept of mandatory retirement tomorrow. Mandatory retirement is ageism. It is discriminatory. It would be easy for the government to bring in a bill to abolish the mandatory retirement age of 65. Those who would choose to retire at 65 could do so. They would receive the benefits they would normally have, but for heaven's sake, we should give people the opportunity to provide for themselves.
The government should look at the work being done by Dr. David Baxter at Simon Fraser University and the book Boom, Bust & Echo of which Dr. Michael Foot is a co-author. That book and the work that is being done by Dr. Baxter at Simon Fraser provide the specifics and the solutions for the pension problems we will have in the future. They also address the impact on our health care system.
Everybody in the House knows from their personal family experience what will happen in the future. The demands on our health care system and the ability of the public purse to pay for all we ask will create an increasing chasm. More and more people will fall through the cracks to the bottom. More and more people will be unable to get the health care they require. It may be bad today, but it will only get worse in the future.
We in the House across party lines have ideas. Whether or not we have the right ideas is irrelevant, but all of us have ideas that are well meaning and constructive, and which we need to put into the mix. Out of the strong debate that will come from that will be good solutions which the government can act on in order to save our pensions and our health care system.
Everyone here knows of people who cannot get health care today when they need it. We know the pain and suffering they endure. People who are in severe pain are waiting 18 months and longer for hip replacements. There are children who have cancer and cannot get the medication they require because the government is not willing to pay for it. It is not that we do not have medications to treat people, it is that those medications are exceedingly expensive and the public purse is not deep enough to pay for the medications that those people require. That problem is going to get bigger. Rationing will become more extensive and more people, particularly the poor and those in the middle class will be the ones who suffer.
This bill is not about the rich. The rich can take care of themselves. This bill is about the poor and the middle class who will have significantly increasing difficulties in meeting their basic needs in the future. We also know the impact our aging population will have on issues such as housing. A number of people will not have housing. There is the impact of dementias on our health care system. All of these are issues which the government is failing to deal with. The solutions to those problems are out there.
All of us in the House are more than willing to work with the government to deal with these problems that affect all of our constituents. Through you, Madam Speaker, I implore the ministers involved to work to with us. We can pull together the best minds in our country and abroad. In that way we will come up with the best solutions to ensure that our aging population will have their basic needs met. We will not be faced with a sea of seniors suffering incalculable problems that we would prefer not to see.