Bill C-51 (Historical)

Economic Recovery Act (stimulus)

An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and to implement other measures

Part 1 implements income tax measures proposed in the Budget tabled in Parliament on January 27, 2009 but not included in the Budget Implementation Act, 2009, which received royal assent on March 12, 2009. In particular, it
(a) introduces the Home Renovation Tax Credit;
(b) introduces the First-time Home Buyers’ Tax Credit; and
(c) enhances the tax relief provided by the Working Income Tax Benefit.
In addition, Part 1 extends the existing tax deferral available to farmers in prescribed drought regions to farmers who dispose of breeding livestock because of flood or excessive moisture and sets out the regions prescribed either as eligible flood or drought regions in 2007 to 2009.
Part 2 authorizes payments to be made out of the Consolidated Revenue Fund for multilateral debt relief and in relation to offshore petroleum resources. It also makes the following amendments:
(a) the Bretton Woods and Related Agreements Act is amended to implement amendments proposed by the Board of Governors of the International Monetary Fund;
(b) the Broadcasting Act is amended to extend the Canadian Broadcasting Corporation’s borrowing limit to $220,000,000;
(c) the Budget Implementation Act, 2009 is amended to clarify the purposes for which payments may be made;
(d) the Canada Pension Plan is amended to
(i) remove the work cessation test in 2012 so that a person may take their retirement pension as early as age 60 without the requirement of a work interruption or earnings reduction,
(ii) increase the general drop-out from 15% to 16% in 2012 allowing a maximum of almost seven and a half years of low or zero earnings to be dropped from the contributory period and to 17% in 2014 allowing a maximum of eight years to be dropped,
(iii) require a person under the age of 65 who receives a retirement pension and continues working to contribute to the Canada Pension Plan and thereby create eligibility for a post-retirement benefit,
(iv) permit a person aged 65 to 70 who receives a retirement pension to elect not to contribute to the Canada Pension Plan, and
(v) have the adjustment factors that apply to early or late take-up of retirement pensions fixed by regulation after December 31, 2010 and have the Minister of Finance and the ministers of the included provinces review the adjustment factors and make recommendations as to whether the factors should be changed;
(e) the Canada Pension Plan Investment Board Act is amended by repealing section 37 and by permitting the approval of regulations made under subsection 53(1) before they are made;
(f) The Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act is amended to provide for Crown share adjustment payments to be made in accordance with an agreement between Canada and Nova Scotia;
(g) the Customs Tariff is amended to change the conditions relating to containers temporarily imported under tariff item 9801.10.20 and to add new tariff item 9801.10.30 relating to temporarily imported trailers and semi-trailers;
(h) the Financial Administration Act is amended to require that departments and parent Crown corporations cause quarterly financial reports to be prepared every fiscal quarter and to make them public; and
(i) the Public Service Superannuation Act is amended by adding the name of PPP Canada Inc. to Part I of Schedule I to that Act.
Part 2 also amends the Bankruptcy and Insolvency Act and chapter 36 of the Statutes of Canada, 2007 to correct unintended consequences resulting from the inaccurate coordination of two amending Acts.

Economic Recovery Act (Stimulus)

[Ted Menzies, Conservative, Macleod, AB]

Madam Speaker, I am glad my hon. colleague from Scarborough—Guildwood begged forgiveness near the end of his speech because he needs to do that.

I know the Speaker listens intently to all speeches in the House but, Madam Speaker, as you and I know at third reading one is supposed to speak somewhat about the bill being debated. I did not hear a word in there that actually addressed Bill C-51.

I would ask, with all due respect, to either approve his forgiveness or not, whichever the Speaker sees fit, because I do not think his constituents will forgive him. He stood in the House and voted against the economic recovery act. Now he will have to go back and explain that. He referred to me going back to my constituents. I am going back proudly to say that I am standing up for Canadians and I am ensuring that they have all the tools available to them to withstand this economic downturn.

He talked about job losses. The United States lost 190,000 jobs last month. He says that he is worried about our jobs. Absolutely, we are worried about the jobs we lost in Canada, but did it help that when he and his party, just this week, voted against extending EI?

Now I am not speaking to the bill, but I have to ask if the member knew anything that was in that bill. We have seen both sides of it. In the House he voted against it and he supported us at committee. I wish him all the luck in the world when he goes home this week.

[Gérard Asselin, Bloc, Manicouagan, QC]

Madam Speaker, I listened carefully to the Conservative member's speech. It was clear that there are some major oversights in Bill C-51, and the forestry industry is one of them. When the government gives the entire Canadian forestry industry $70 million as part of the economic stimulus, and then turns around and gives the Ontario auto industry $10 billion, that is a double standard.

Then there are the unemployed. People have lost their jobs, for example in the mining industry, or in other industries where they had job security. With the economic crisis, plants and paper mills have been shut down. Given the current economy, the Bloc Québécois proposed much easier access to employment insurance. We wanted to create a 360-hour eligibility threshold and to eliminate the two week waiting period.

The parliamentary secretary is bragging that with this bill, the Conservatives have done everything to stimulate the economy, but they forgot about workers, the unemployed and the forestry industry.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, it is with great pleasure that I stand today to begin third reading debate on Bill C-51, the economic recovery act.

Ideally, this will be a short debate ensuring this important legislation, which includes key provisions from budget 2009, along with other vital initiatives, continues on its path to becoming law.

I want to begin by thanking all members of the finance committee who put partisan politics aside on this legislation. Acknowledging how important this legislation was for Canada's economy, we worked together to expedite our consideration of Bill C-51 at committee stage. We, nevertheless, had the opportunity to hear from strong witnesses who spoke in favour of the economic recovery act. These witnesses spoke of the importance of its timely passage. I will highlight a few of those comments later in my time today.

Why is the economic recovery act so important? As an extension of Canada's economic plan, this legislation continues our Conservative government's focus on the economy, a singular focus that people who elected us here have demanded, a focus from which we will not be distracted.

Implementing Canada's economic action plan, protecting the economy must be our top priority. Our plan is rebuilding Canada's infrastructure, slashing taxes, investing in research and development, supporting the unemployed and much more.

This multi-year plan is working. It is protecting and creating jobs and it is helping shield Canada from the worst ravages of the deepest economic downturn since World War II. Indeed, nearly all independent observers are uniform in their assessment that Canada has remained and will continue to remain in one of the strongest positions to weather this economic storm.

During his recent appearance before the finance committee, the Governor of the Bank of Canada, Mark Carney, declared, “--it is likely that Canada will return to our path of potential quicker than the other crisis-affected economies.... ...that's something one sees over the fullness of time and that's what ultimately will matter”.

A Canadian Business magazine editorial pronounced:

--Canada has come through this economic crisis in relatively robust health. Our recession promises to be shallower and briefer compared with many others;....

...we're in an enviable position compared to other developed countries.

Even the Parliamentary Budget Officer asserted, in his recent economic and fiscal assessment update, said, “Thus far, the Canadian economy has weathered the global recession better than most economies”.

While we have recently seen early signs of a potential global economic recovery on the horizon, they are merely that, early potential signs. In the words of IMF managing director, Dominique Strauss-Kahn, “The good news is that in our view the recovery really has started. That does not mean, and I want to be crystal clear, that the crisis is over. It's too early to crow victory”.

Clearly, we need to stay on track. Early progress made in securing a Canadian recovery will be lost if we allow ourselves to be lulled into distraction and deviate from the course that we have set.

In the words of the recent G7 finance ministers and central bank governors communiqué, “In recent months, we have started to see signs of a global economic recovery and continued improvement in financial market conditions. However, there is no room for complacency since the prospects for growth remain fragile.... We will keep in place our support measures until recovery is assured”.

The economic recovery act is one way we are staying the course and helping to secure a strong sustained economic recovery.

As I mentioned, not only will it legislate measures from Canada's economic action plan but also it contains other diverse but critical measures. In my time remaining, I will highlight the importance of but a few of these measures.

Among the most high profile and popular measures in the economic recovery act is the temporary home renovation tax credit, or the HRTC. This job-creating measure has been overwhelmingly well received by Canadians assisting them to improve and add value to their own homes.

It is estimated that, through the temporary HRTC, millions of Canadian families will receive significant tax relief on eligible renovation projects. Already we have clear statistical proof that the home renovation tax credit has had a measurable impact on the economy.

According to Statistics Canada, even as the overall economy contracted, the volume of home renovation investment had spiked by over 2% in the second quarter of 2009, an increase of 9% on an annualized basis. Without a doubt, the home renovation tax credit has been an awe-inspiring success since our Conservative government first introduced it last January.

All MPs have heard stories of how this tax credit is working in their own communities. They have heard how it is encouraging their constituents to invest in their homes, how those investments are helping employ men and women in the construction and other skilled trades, fueling the purchase of building materials from Canada's forestry sector, supporting local hardware stores and stimulating the local economy when it is needed most.

Indeed, during the finance committee hearings on Bill C-51, all members on that committee heard witness after witness sing the praises of the home renovation tax credit. The Canadian Home Builders' Association told us, “The HRTC is having a significant and positive effect on the level of home renovation activity across the country. In their work with customers, renovators report that the HRTC is a significant factor in motivating homeowners to initiate home renovation projects. This view is reinforced by building material retailers, who also report increased sales as a result of HRTC”.

“I think there's no question it's increased economic activity, it's created jobs, it's definitely shown consumer confidence in renovating their homes, and I think it's done a lot of good for the industry and for consumers as well”.

“I think it obviously has kept the industry stronger in these tough times and in job creation as well”.

Home Depot Canada reported to the finance committee that the HRTC, “--has been a motivating force for consumers”.

“We have seen the results of the stimulus in increased demand for products and services and believe the stimulus did much to temper the impact of a rapidly worsening sales environment across our industry....”

“From the beginning, the HRTC captured Canadians' interest, but the HRTC has done more than capture interest. It kept many contractors in work, and put other contractors back to work. It restored consumer confidence, improved retail sales, and directly and positively enhanced the sustainability and growth of the Canadian home improvement industry”.

Home Depot Canada also revealed at committee that the HRTC has been so successful that, “--we're in a situation where our sales are growing versus the prior year and we're actually having to hire in order to be able to look after the sales that are coming into our stores. I'm sure our competitors are feeling the same”.

We also heard from the president of the Canadian Labour Congress, Ken Georgetti, not someone usually supportive of our Conservative government, however, when asked about the home renovation tax credit he said, “--there's no doubt anecdotally that a lot of people are accessing and conducting home renovations. I'm sure the program is an incentive. We've encouraged and endorsed it as a good incentive to help offset the job losses that are occurring in manufacturing”.

However, this is not the only important tax relief included in the economic recovery act. For instance, to help alleviate some of the costs associated with buying a home, we have introduced the first-time homebuyers' tax credit that will provide up to $750 in tax relief to first-time homebuyers.

Another important provision will relax conditions regarding temporarily imported shipping containers by increasing the amount of time that such containers can remain in Canada on a tariff and tax-free basis from 30 days up to 365 days.

We are also enhancing support for those struggling to get ahead with our improvements to the working income tax benefit, or WITB, as our finance minister likes to refer to it. This was originally introduced in budget 2007 by our Conservative government. The landmark WITB is a refundable tax credit that supplements the earnings of low-income workers. WITB helps ensure that these workers are financially better off by getting a job, and thus helps people stay off social assistance.

The economic recovery act would enhance WITB by $580 million for 2009 and subsequent taxation years, effectively doubling the total tax relief provided by the working income tax benefit.

The OECD, in its September 2009 employment outlook, heralded this measure, noting:

[r]ecent moves to increase the generosity of Canada's Working Income Tax Benefit are welcome, particularly given that the benefit is strongly targeted to the lowest-income households.

Other measures in Bill C-51 include steps to modernize the Canada pension plan. These reforms were unanimously agreed to by federal, provincial and territorial governments, which jointly manage that plan.

The reforms would provide greater flexibility for older workers to combine pension and work income if they wish to do so, expand CPP coverage, and improve fairness in the plan's flexible retirement provisions.

We are improving transparency and accountability in the way government uses taxpayer dollars.

Fulfilling a commitment included in our Conservative Party's 2008 election platform, we are legally requiring all federal departments and crown corporations to produce and publish quarterly financial reports, an idea individuals like Tom Axworthy, chair of the Centre for the Study of Democracy at Queen's University, have advocated for.

Axworthy, writing an op-ed article in a major national newspaper, said:

Canadians will be surprised to learn that quarterly financial reports, a standard accounting requirement in the private and not-for-profit sectors, are not [in fact] required in the public service....

Parliament has many duties, but one of the very first, since the Magna Carta, has been to assess the spending decisions of the executive and provide resources to the state through taxation. Yet this first function of Parliament has, somewhat amazingly, sunk into decrepitude. By depending primarily on reports of the Auditor General, which are made years after the fact, Parliament does eventually fix problems, but millions of dollars are wasted in the meantime....

Quarterly reports would certainly have alerted Parliament to the exponential rise in spending for the [long] Gun Registry program.

Bill C-51 would also mark the historic resolution to the crown share saga for the benefit of the people of Nova Scotia.

It would fully implement the crown share agreement and authorize an initial payment of nearly $175 million to Nova Scotia for 2008-09, as well as 2009-10.

We all understand this is tremendous news for Nova Scotia which, after a decade-plus of neglect under the previous Liberal government, has finally found a partner in our Conservative government to resolve this issue.

Indeed, the NDP premier of Nova Scotia, Darrell Dexter, cheered:

Nova Scotia is seeing progress on the Crown share file. The federal government introduced legislation...that will pave the way for regulations to be enacted.... I congratulate the federal government for moving forward to seal the deal. This is good for Nova Scotia, and good for Canada.

Considering the landmark nature of this measure for Nova Scotia, I am very surprised that the five Liberal members of Parliament from Nova Scotia actually voted against it, and so casually.

Clearly, the Liberal Party of Canada never cared enough about this important issue for Nova Scotia to fulfill its original promise.

I would be remiss if I closed without quickly reviewing other initiatives in the economic recovery act to help provide the stability our economy needs. They include helping farmers by extending the existing tax deferral currently available in regions affected by drought to those in regions affected by flood or excessive moisture as well; ensuring the dependability of public broadcasting by increasing the borrowing limit for the CBC; promoting global growth and cooperation by giving small and low-income countries a bigger voice at the IMF while strengthening Canada's commitment to debt relief; and there are many others.

Our Conservative government has been clear. We are ready to do whatever is necessary during these tough economic times to protect Canadians. The economic recovery act would build upon that commitment and help lay the foundation for long-term growth.

I urge the House to give this legislation its quick approval, allowing Bill C-51 to be introduced into the Senate in a timely manner.

The House proceeded to the consideration of Bill C-51, An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and to implement other measures, as reported (without amendment) from the committee.

Business of the House

[Jay Hill, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I appreciate the brief question from my hon. colleague this week in honour of the tributes that we are about to hear.

Today we began and hopefully will conclude the second reading stage of C-56, the Fairness for the Self-Employed Act. That bill is receiving rave reviews all across the land and it is my hope that it will move very expeditiously through the House.

On Tuesday, we sent another employment insurance act to the Senate, Bill C-50. My understanding is that it has completed third reading over in the other place and we hope that will receive royal assent today.

Following Bill C-56, it is my intention to continue the debate at third reading of C-27, the anti-spam bill, which will be followed by Bill C-44, An Act to amend the Canada Post Corporation Act, which is at second reading.

Bill C-56 will continue tomorrow if not completed today. Backup bills for Friday are Bill C-51, the Economic Recovery Act, which was reported back from committee this week, followed by any bills not completed from today.

When the House returns from our constituency Remembrance Day week, the schedule of bills will include Bill C-23, Canada-Colombia, and bills not concluded from this week. We will give consideration to any bills reported back from committee or new bills yet to be introduced.

Finance

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Mr. Speaker, I have the honour to present, in both official languages, the third report of the Standing Committee on Finance in relation to Bill C-51, An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and to implement other measures.

[Chris Forbes]

Sure. In my opening remarks I went through a few issues. I can go back to them, but I think we've made a number of changes on the first pillar of the retirement income system with respect to increasing the amount of employment income that GIS recipients can earn before their GIS is reduced.

On the second pillar, which is the CPP, I mentioned the triennial review results and a number of changes that have been proposed there, which are before Parliament as part of Bill C-51. Those include the removal of the work cessation test, and increasing the drop-out provisions.

On the third pillar, which would be the tax assistance for retirement savings and other tax measures, in fact we've had increases in the pension income credits. We've had an increase in the age amount. We've introduced pension income splitting. And the age when one has to convert an RRSP into a RRIF has been raised from 69 years to 71 years, and phased retirement as well. And the final one would be the tax-free savings account.

[Chris Forbes]

We just completed our three-year review in May. An announcement was made by the federal, provincial and territorial ministers of Finance. Bill C-51 contains the results of that three-year review.

[Jean-Claude Ménard, Chief Actuary, Office of the Chief Actuary, Office of the Superintendent of Financial Institutions Canada]

Good afternoon Madam Chair, honourable members of the committee. Thank you for the opportunity to appear before you today to address the issues related to women's retirement income security.

The primary role of the OCA is to provide actuarial services to the federal and provincial governments who are Canada Pension Plan stakeholders. While I report to the Superintendent of Financial Institutions, I am solely responsible for the content and actuarial opinions reflected in the reports prepared by my office.

The OCA conducts statutory actuarial valuations of the CPP, Old Age Security Program, and pension and benefits plans covering the federal public service, the Canadian Forces, the Royal Canadian Mounted Police, federally-appointed judges and members of Parliament.

Whenever a bill is introduced before Parliament that has a significant impact on the financial status of a public pension plan falling under the statutory responsibilities of the chief actuary, the OCA must submit an actuarial report to the appropriate minister. The most recent report assessing the financial impact of the proposed changes for the Canada Pension Plan included in Bill C-51 was tabled before Parliament on October 19, 2009. This report confirmed that if the current plan is amended, with current economic conditions taken into consideration, a legislated contribution rate of 9.90% for years 2010 and thereafter would be sufficient to financially sustain the plan.

The status of women within the Canadian pension system is not the same today as it was 30 or 40 years ago. Historically, women had more interrupted work history, lower earnings, and as a result lower retirement pensions as compared to men. Presently, the gap in CPP pensions between males and females is narrowing even if it is not expected to disappear completely.

Labour market participation for women has increased over the years. Based on the most recent CPP actuarial report, the overall labour force participation rates in Canada from 1976 to 2006 clearly show a narrowing of the gap between male and female rates. While this gap was 32% in 1976 it has narrowed to 10% in 2006, and is expected to narrow further but at a slower pace. This trend is also well pronounced in the registered pension plans' coverage. The proportion of female RPP members increased from 35%, 20 years ago, to 49% in 2007. In 2007, 2.9 million females participated in the RPP as compared to only 1.7 million in 1987. For all paid workers, the proportion of female RPP members is now higher than for men, a situation that had not been seen before 2005.

The gap in employment earnings between women and men has also narrowed over the last 40 years. The ratio of female-to-male average employment earnings stood at about 48% in 1996 and was 71% in 2006. The 23^rd CPP actuarial report projects that this ratio will further increase to 84% by 2050. As a result of these trends, it could be expected that future generations of female retirees will have access to more adequate retirement income.

I will now continue in English.

The Canada Pension Plan contains several features that are designed to promote higher retirement income security for women. The CPP provides benefits that are largely determined by how much and for how long a contributor contributed to the plan. As such, it is important to ensure that an individual's average career earnings are not affected by a certain number of years of unusually low earnings, which occur in most people's careers.

The dropout provisions of the CPP, in particular the child-rearing dropout and the general low-earnings dropout, allow for the exclusion of years with low earnings and help an individual to qualify for a larger pension. The child-rearing dropout provision was introduced in 1978. It benefits individuals caring for young children, mainly women. The general low-earnings dropout supplements the child-rearing dropout and permits 15% of the years of low earnings to be dropped from the benefit calculation.

Virtually everyone benefits from this dropout provision. I've heard that the impact on women's pensions is higher, due to lower earnings and a more uneven work history.

Finally, another feature of the Canada Pension Plan that mitigates the impact of low earnings is that no contributions are taken from the first $3,500 of employment earnings. This is called the year's basic exemption. The application of this provision provides a better return on contributions for lower-earning individuals. Once again, even if this is a universal provision, women benefit more from it because of their generally lower earnings as compared with men.

The cost of providing retirement income depends largely on life expectancy. Life expectancy is another aspect that differentiates women from men. Women are living longer than men; therefore, they are expected to receive their retirement income for a longer period of time. At the inception of the Canada Pension Plan in 1966, women at age 65 lived for an average of another 17 years. Today they are living for 21 years and are expected to live for 24 years by 2050. Indeed, women live about three years longer than men after they reach retirement.

In conclusion, the combination of old age security, the guaranteed income supplement, and the compulsory contributory pension plans—the Canada and Quebec Pension Plans—has contributed significantly to reducing poverty among seniors over the past three decades. The OECD and the Luxembourg Income Study Research Institute consider Canada to be the country that has the least difficulty ensuring the economic well-being of retirees. To quote the research institute: “The choice of policy is crucial, as shown for instance by the low cost but highly target-effective Canadian efforts in fighting elder poverty.” Canada is in an enviable group of countries that includes, in particular, the Netherlands, Denmark, Norway, and Sweden, where the incidence rate of low-income seniors is less than 5%.

I hope I have succeeded in providing you with some facts regarding women's retirement income. I wish to thank you again for the opportunity to appear before this committee. We'll be pleased to answer any questions you may have.

Thank you, Madam Chair.

[The Chair, Conservative, James Rajotte]

Thank you, colleagues.

We will go now to clause-by-clause consideration of Bill C-51.

Just for the committee's information, pursuant to Standing Order 75(1), consideration of clause 1 is postponed until the end, so we will go to clause 2.

I do have a suggestion. I understand there may be some discussion on the CPP. CPP clauses start at clause 25, so I'm going to ask: shall clauses 2 to 24 carry?

[Thomas Mulcair, NDP, Outremont, QC]

Thank you, Mr. Chair. I would like to thank all of the witnesses for joining us today. Your comments will be of great help to us as we continue to study Bill C-51.

Dr. Kenward, Mr. Friend, thank you again for being here. It's the second time I've had occasion to listen to the Canadian Home Builders' Association, and the depth of your analysis is a great deal of help to us.

Thank you very much for coming here, Mr. Grondin. The FADOQ is an important partner, one that is not mentioned often enough on this side of the Ottawa River.

I will begin with you, Mrs. Conradi. The FADOQ and the Fédération des femmes du Québec were invited here at the suggestion of the NDP, following a message that we received recently alerting us to the implicit danger of regulatory action being taken, instead of Parliament openly passing legislation, and of the danger that no analysis would be done or public debate held on this matter.

I want to assure you that the committee has unanimously resolved that once the expert report on pensions has been tabled at next month's joint federal-provincial meeting in Whitehorse, additional hearings will be held. You can rest assured that your urgent message was heard, and that for us, women and the particular impact these measures will have on women will be a priority.

You hinted that you might have other proposals to put on the table, such as ways of extending a person's time in the workforce without that person incurring a penalty. I'd like you to elaborate on these proposals.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

Mr. Friend, could you comment in terms of the measures in Bill C-51 and the impact on the number of Canadians employed in your industry?

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much.

Mr. Rowe, can you give the committee an idea of how the measures in Bill C-51 have had an impact on the number of Canadians employed in your industry? Do you think these measures helped to save or even create jobs?

[John Butler, Senior Vice-President, General Counsel and Corporate Secretary, Canada Pension Plan Investment Board]

Thank you, Mr. Chairman.

My name is John Butler. I'm general counsel with the CPP Investment Board. I'm here with my colleague Ian Dale, who is SVP, head of communications and government relations.

I'm here this morning to discuss the provisions in part 2 of Bill C-51 that will amend our governing statute, the Canada Pension Plan Investment Board Act. We do not intend to, and in fact we are not able to, comment on any other aspects of Bill C-51, as we're not familiar with them.

In order to assist the committee, and in anticipation of your legislative work this afternoon, I thought it would be helpful to provide some context by briefly outlining the background as to why these amendments to our governing statute are being proposed.

The first amendment, clause 44 of Bill C-51, proposes to repeal section 37 of our statute. As you recall, the Income Tax Act formerly contained rules restricting the amount of investments that certain taxpayers can make in foreign property to essentially 30% of the cost of all property held by the taxpayer. If the 30% threshold were exceeded, a monthly penalty tax would be charged.

The Canada Pension Plan Investment Board is not itself taxable under the Income Tax Act. Nonetheless, section 37 was originally included in our statute to require the CPP Investment Board to comply with the foreign property rules in the Income Tax Act. As you all know, the foreign property rules were repealed in their entirety in June 2005. Accordingly, since that time section 37 has been a meaningless provision in our statute.

Bill C-51 proposes to repeal that section. It's a matter of housekeeping, simply to remove a redundant and possibly misleading section. The Canada Pension Plan Investment Board endorses this amendment.

The second change to our statute, found in clauses 45 and 46 of Bill C-51, is an amendment to section 53 of our statute. This too is not a substantive change to our legislation, and the CPP Investment Board endorses it as well. Section 53 deals with the manner in which the federal cabinet makes regulations under our governing statute. It provides that regulations made by cabinet have no force or effect until they are approved by the appropriate provincial minister of at least two thirds of the participating provinces—which for this purpose does not include Quebec—having not less than two thirds of the population in those provinces.

The reason for this rule, and another rule I'll refer to briefly at the end of my remarks, is that the CPP, formed in 1966, and the CPP Investment Board, established in 1997, both resulted from cooperation between the federal government and the provinces; therefore, the provinces have an equal voice in any change to both the terms of the CPP and the powers of the CPP Investment Board.

The history of the proposed amendment to section 53 is that in the course of the review of the change made to one of our regulations in 2007, the Standing Joint Committee for the Scrutiny of Regulations noticed that the required provincial approval to the change was obtained before the change was proposed to the federal cabinet, as was the established practice. Legal counsel for the standing joint committee was of the view that this method of enacting regulations did not comply with section 53.

In order to resolve this issue as effectively and efficiently as possible, we agreed with the Department of Finance that section 53 would be amended to expressly allow for prior approval of changes to our regulation by participating provinces, provided that the approved version of the regulations was the same, or substantially the same, as the version ultimately put to cabinet. We also agreed that for the purposes of complete certainty, it would be confirmed that all regulations enacted under our statute to date were in full force and effect. That is therefore the purpose of the amendments to section 53 of our act. As I've already mentioned, the CPP Investment Board fully supports these amendments.

With respect to my final point, while Bill C-51 does not say so expressly, these changes to our statute need to be approved by the provinces by reason of subsection 114(4) of the Canada Pension Plan. That section provides that any changes to the CPP Investment Board Act must be approved by the provincial cabinet of at least two thirds of the provinces—which in this case does include Quebec—having not less than two thirds of the total population.

As mentioned, this approval requirement stems from the fact that the CPP and the CPP Investment Board are the result of a cooperative effort among the provinces and the federal government. As a result, these provisions of Bill C-51 will not come into force, even after they have been approved by Parliament, until the required provincial approvals have been obtained.

As my co-presenter, Ms Conradi, has just pointed out, this same requirement exists in relation to the changes to the Canada Pension Plan included in Bill C-51.

We thank you for the chance to address you today.

[Alexa Conradi, President, Fédération des femmes du Québec]

Thank you very much.

I represent the Fédération des femmes du Quebec, the umbrella organization for 165 women's groups across Quebec, for committees of women from the labour movement and independent women's groups. We are concerned about women's economic independence and I want to thank you for the opportunity to address the committee today on the subject of the Canada Pension Plan.

The economist with whom we usually work is in Quebec City consulting with the government. Therefore, I am here mainly to answer policy questions. As you know, the Quebec Pension Plan is currently being reformed and often, the QPP is harmonized with expected changes to the CPP. So then, our attention is taken up both by the ongoing debate in Quebec and by the debate taking place here in the House of Commons.

In the case of Bill C-51, the proposed changes must be approved by Quebec lawmakers and by two-thirds of the other provinces representing two-thirds of the Canadian population. That means that even if Parliament adopts the proposed pension legislation, additional steps would need to be taken before the bill becomes law.

However, in so far as actuarial adjustments are concerned, we expect that from now on, these issues will be dealt with through regulations, which creates two problem. Firstly, this approach depoliticizes the debate surrounding increases and often more so in the case of planned cuts, or planned increases in the penalties provided for under the scheme. It also means that changes could be made without the approval of the Government of Quebec, that is of the Quebec National Assembly.

The proposed legislation provides for actuarial adjustments. These adjustments will affect people who retire before 65 years of age. This means that maximum benefits which until now totalled $7,634 at age 60, could be reduced to $6,979. This represent a reduction of 9%. Women already receive two thirds of what men receive, because historically they care for persons with diminishing abilities and for children, meaning that they spend less time in the workforce than most men. Women also continue to earn two thirds of what men do in Canada and consequently, they are further impoverished. The measures set out in this bill will impoverish women, who are already among the poorest members of society in Canada.

Not only does this bill make them poorer, it maintains their economic dependence, in particular during economic hard times. Even women who may have had some private savings experienced a drop in their standard of living.

Like my previous colleague, our federation would like to see the whole CPP issue withdrawn from this bill and opened up to a much broader, more substantial public debate than we have seen thus far. I understand that cross-country consultations are being held on the subject, but there has been no public debate and I'm not sure most Canadian women realize that the government is planning to introduce measures that will substantially and adversely affect their standard of living.

In light of demographic changes, the aging population and the fact that we are living longer, we agree with any initiatives aimed at getting people to remain longer in the workforce. However, they should be able to do so without being penalized. If there is time later, we would like to put forward a number of recommendations on this very issue.

Thank you.