Bill C-290 (Historical)

An Act to amend the Income Tax Act (tax credit for loss of retirement income)

This enactment amends the Income Tax Act to provide a refundable tax credit to an individual whose employer, and certain employees of that employer, failed to make the contributions required to be made to a registered pension plan.

Second Reading

[Tilly O'Neill-Gordon, Conservative, Miramichi, NB]

Madam Speaker, Bill C-290 proposes a costly refundable tax credit related to shortfalls in pension plans with a potential estimated cost of about $10 billion per year. This Bloc proposal would not be good pension or economic policy. It would not be fair to the taxpayers of the country.

This Bloc proposal essentially suggests that corporations and big businesses be let off the hook from the important responsibility to properly manage their pension plans and to control risks. This is because in a situation like Bill C-290 plan sponsors may exercise less due diligence knowing that benefits are backstopped by the government through a refundable tax credit.

The fact that these corporations and big businesses would not be required to contribute anything whatsoever to cover the cost of the refundable credit would worsen that potential. The Bloc proposal not only would be costly for taxpayers, it also would raise fairness issues, given that the costs would be borne by all taxpayers and it would only benefit a minority of those participating in the pension plan.

What is worse, the Bloc proposal would place on the federal government's shoulders the responsibility for providing compensation for all pension plans that were unable to meet pension obligations, even though only about 10% of all pension plan members participate in federally regulated plans. Since the provinces are responsible for the protection of pension benefits for plans sponsored by provincially regulated employers, this makes little to no sense.

This Bloc proposal is undoubtedly not the best way to promote the security of pension benefits. It would undermine sound pension policy objectives and be unfair to taxpayers. It would reduce incentives for employers to properly fund and manage their pension plans. And it would place the responsibility on the federal government for providing compensation for provincially regulated plans.

This Bloc proposal also ignores our government's comprehensive agenda to improve the retirement savings system and provide tax relief to pensioners and seniors since 2006. For example, as part of Canada's economic action plan, we increased the age credit amount by $1,000. This is on top of the $1,000 increase in the age credit amount.

That is why, to improve incentives for Canadians to save, our government has established the landmark tax-free savings account, the TFSA, what BMO Financial Group called “the single most important savings vehicle since the introduction of the RRSP in the 1950s”. The TFSA will assist Canadians in meeting their retirement savings goals by allowing investments to grow tax free. In this respect—

[Tilly O'Neill-Gordon, Conservative, Miramichi, NB]

Madam Speaker, today I will address the many deficiencies in the Bloc proposal being debated, and also highlight the important work our Conservative government has done to address concerns surrounding pensions and pension security. Before outlining the numerous flaws in this costly Bloc proposal, we should look at the broader context of Canada's pension system and the actions taken by our Conservative government to ensure it remains sound.

Clearly, all parliamentarians recognize that pension security is a matter of the utmost importance to all workers and a key element in ensuring the effectiveness of Canada's retirement income system.

Canada has a diversified retirement income system based on a mix of public and private pensions. The two public pension pillars, the old age security and the guaranteed income supplement programs, along with the Canada and Quebec pension plans ensure a basic level of income in retirement for Canadians.

The third pillar, tax deferred private retirement savings, includes registered pension plans and RRSPs. These plans provide Canadians with incentives to save for retirement and to help bridge the gap between public pension benefits and their retirement income goals.

Employer-sponsored pension plans are a key component of the third pillar of the retirement income system. The best way of ensuring that pension benefits are secure is to have healthy supervision. Pension benefit standards are a responsibility of both the federal government and the provincial governments.

I note here that only about 10% of all pension plan members participate in federally regulated plans. At the federal level, pension plans are regulated under the Pension Benefits Standards Act and are supervised by the Office of the Superintendent of Financial Institutions.

This retirement income system has been relatively successful when compared to other jurisdictions internationally in ensuring Canadians achieve acceptable levels of income in retirement in order to maintain their living standards.

As was reported in the Toronto Star earlier this week, Canada actually has one of the best retirement systems in the world. This country is essentially tied with the Netherlands, Australia and Sweden for pensioner protection, as measured by adequacy of funding, long-term sustainability of payouts and integrity in management. The survey of 11 industrial nations was conducted by Mercer LLC, one of the leading world corporate benefit consultants, and the Melbourne Centre for Financial Studies.

Nevertheless, all parliamentarians would concede that while our retirement income system is effective and sound, that does not mean we should not be working to improve it further. That is exactly what our Conservative government has been doing.

Since the beginning of the year, we have been looking at ways to ensure that the retirement income system is responsive to the needs of workers, pensioners and seniors, consistent with sound and sustainable policy principles. In January, we released a major research paper on federally regulated pension plans for comment, after which we conducted a cross-country and online public consultation open to all.

Indeed as part of the consultation process, the Parliamentary Secretary to the Minister of Finance, the member for Macleod, engaged with Canadians through public meetings across Canada, including stops in Halifax, Montreal, Ottawa, Toronto, Winnipeg, Edmonton, Whitehorse and Vancouver. Based on the feedback we received from Canadians, comprehensive regulatory changes to improve the federal pension framework are being drafted and will be released shortly.

Also, we have long recognized the need to work with our provincial partners to examine the larger pension concerns facing Canadians. That is why we raised the issue at the annual meeting of finance ministers in late 2008, and earlier this year set up a joint federal-provincial research working group with respected academic Jack Mintz as director of research to conduct an in-depth examination of retirement income adequacy.

The Minister of Finance has already convened a national summit of his provincial and territorial counterparts for this coming December to discuss the findings of this important group.

Without a doubt, our Conservative government has taken the pension issue seriously and is treating the issues surrounding it in a comprehensive manner.

On the other hand, Bill C-290 falls short in this respect.—

[Serge Cardin, Bloc, Sherbrooke, QC]

Madam Speaker, I would like to begin by thanking and congratulating my colleague from Richmond—Arthabaska, who worked on human resources issues with other colleagues, including the members for Chambly—Borduas and Bas-Richelieu—Nicolet—Bécancour. They worked especially hard on two files: Atlas Steels in Sorel-Tracy and the Jeffrey Mine in Asbestos. They took an interest in these cases involving retirees who were deprived of so much of their pension income that it caught our attention and got us thinking of ways to alleviate their losses.

Like all Bloc members, and I say this often and without partisan bias, my three colleagues consult their fellow citizens and listen to their needs and expectations more than anyone else. They are also very aware of the responsibilities of different levels of government. In this case, the federal government has a clear responsibility.

For example, I would like to describe some of the meetings that took place at the Jeffrey Mine in Asbestos, because I want to focus on this case. The mine is just a few minutes' drive from my riding and I visit the area often. We know that the municipality has taken some serious hits economically because of the mines located there.

Naturally, retirees have a lot riding on Bill C-290. It was previously introduced by the member for Richmond—Arthabaska during the last Parliament. However, the Conservative government was so determined to have an election that it stopped the work in its tracks.

In the case of the Jeffrey Mine, over 1,200 retired workers saw most of their retirement funds cut off. This had a major impact on their living standard and quality of life. So, after speaking with those affected, this refundable tax credit—which this clearly is—was developed and proposed. We also know that, unfortunately, the Conservative government often creates non-refundable tax credits, which means that people in the lowest income brackets can never benefit from these tax credits. In fact, they cannot benefit from them, because they do not pay taxes. In cases where retirement pensions are largely cut off, and if those people's incomes are low, they can still benefit from this refundable tax credit. As my colleague said earlier, this tax credit is not equivalent to the losses these retired workers can face. It is a tax credit of 22% on what they lose. Therefore, it is not a huge bailout. Another important point is that it is not taxable.

So what this does is soften the blow and ensure that retired people can benefit from this money.

I would like to quickly explain what is happening with pension funds, especially in this economic environment. As we all know, there are two kinds of pension plans. There are defined benefit plans and defined contribution plans. Specifically in order to avoid creating differences and disparities between the two systems, the bill tries to respond to both systems, since it calculates the gap between the pension that should have been received and the pension that is actually received. The 22% refundable tax credit is calculated based on that difference.

With a defined benefit plan, it is possible to calculate in advance the pension a person will receive, for example, 2% per year of service, based on the individual's best five years on average. The benefit is determined and the employee's and employer's contributions are adjusted using actuarial analyses and calculations.

Sometimes there are surpluses during periods when rates of return are high. There are also sometimes deficits, as we have seen recently. However, the employer is normally responsible for making up any deficits so that the predetermined benefit does not change and is always equal to 2% of the best five years for the number of years for which contributions were made.

There is also the money purchase plan. The name says it all: people agree on pension contributions and actuarial studies determine what the benefits will be. The employer and the employee both contribute to the plan. All sorts of things can happen. Additional contributions may be needed to maintain a pension at a level similar to what was anticipated. As I said, this is not a defined benefit plan. Benefits can therefore vary, but one thing is certain: if the pension plan is underfunded, it is still possible to calculate the difference between the pension that would have been received if all the contributions had been made and the pension actually received. Here again, there is a difference between the two. Whether the plan is a defined benefit plan or a money purchase plan, a refundable tax credit will be determined by multiplying 22% by the difference.

What is the government's responsibility in all this? I believe the federal government has a responsibility. Take the defined benefit plan. There are periods when the interest rate and performance are fantastic and everyone wants to invest. We know how that works. As a result, there are surpluses. When there is a surplus in the fund, the employees no longer need to contribute. When there are surpluses the employer can keep contributing or this can be negotiated. The Conservatives will surely ask us why there is no contingency fund for the lean years when there might be a deficit and no plan to keep the surplus high enough to avoid actuarial deficits.

The Conservatives might blame management, but it is not necessarily management's fault. It is the federal income tax act that does not allow surpluses to exceed 10%. Accordingly, the federal government bears a significant share of the responsibility because it does not allow surpluses to exceed 10%. If that had been allowed, I am sure that people would have acted responsibly and would have built up this surplus in order to help cope with the difficult years. We have to hold the government accountable for not allowing pension fund managers to have the necessary tools.

I am calling on all hon. members in this House to vote in favour of this bill so that it can be referred to committee. We can then discuss it and make the government aware of its share of the responsibility. We have to pass this wonderful bill introduced by my colleague from Richmond—Arthabaska.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Madam Speaker, I am pleased to have the opportunity to speak to Bill C-290, An Act to amend the Income Tax Act (tax credit for loss of retirement income) that has been put forward by the member for Richmond—Arthabaska. I know the member has tried on a number of occasions to move the bill through the House. In the last Parliament he succeeded in getting it a considerable way through the process, but the early election call short-circuited that effort and unfortunately we have had to start all over again in consideration of this piece of legislation.

I know too that the legislation came out of the member's discussions with workers and retirees in his riding and other ridings in the province of Quebec who faced a loss of income in their retirement pensions. This was one of the solutions that came about as a result of those discussions, those conversations. I commend him for that process and for putting this idea before the House of Commons.

New Democrats believe this is an important idea and that it merits support. New Democrats are supporting the idea although we recognize that it is only a small piece of what needs to be done in terms of ensuring pension security, retirement income security for Canadians. I am sure the member also recognizes that this is only one piece of a much larger puzzle.

What does the bill do? It would grant a refundable tax credit equal to 22% of the reduction in pension benefits experienced by beneficiaries of registered pension plans other than trusts who suffer a loss of pension benefits normally when their pension plans are wound up in whole or in part. It would apply to both defined benefit plans and defined contribution plans.

What exactly does that mean? That is the official description or account of what the bill does. One of the examples of what the bill would actually mean is that if the income of a retiree's pension drops from say $30,000 to $22,000, he or she would receive 22% of the $8,000 loss which would mean a non-taxable amount of $1,760. So it does not go the whole way to recovering the loss someone might experience in their registered pension plan, but it would be of some assistance to the folks who do find themselves in that difficult position. This is a contribution to dealing with the situation of loss in pension income and income security for retirees in Canada.

My colleague, the NDP critic for seniors and pensions, the member for Hamilton East—Stoney Creek, has been working diligently on this issue holding consultations and conversations with retirees and seniors across Canada to find out exactly what would be helpful to them much in the same way that the member for Richmond—Arthabaska has done in coming up with this legislation.

The NDP's pensions critic has come up with a very detailed and broad-based plan to assist Canadians with the security of their retirement income. We know that is very important these days. It was important when the bill was originally introduced, but the change in the economic situation, the recession, has made it even more necessary because more and more people are feeling that pinch and have seen a reduction in their retirement income.

We know there are two facets to retirement income in Canada. There is the private system of workplace pensions, of RRSPs, of private savings. We know those private elements of our retirement income system have taken the biggest hit in this recession with the collapse of financial markets.

The parts of the system that have maintained themselves, that have been rock solid in many people's opinion, are the public elements: the old age security program, the guaranteed income supplement and the Canada and Quebec pension plans. It is very important for us to realize that in planning a public retirement income system we have designed a system that can weather this kind of economic storm where the private system has taken significant hits and retirees who have had significant investment in the private elements of the system have taken a significant hit.

The public system has been there to support people through this kind of crisis. I hope we hold that experience close at hand when we are considering how we might approach security and retirement income in the coming months and years. People put a lot into saving for their retirement and they need to depend on that when they are no longer able to work or choose not to work any longer.

The NDP has put forward a very detailed plan. Part of that plan was passed unanimously in the House back in the spring. Hon. members will remember when all parties in the House agreed that significant action was needed on pension reform and to ensure income security in our retirement. That was good news, although the government has yet to act on that unanimous sentiment of the House and has yet to act in any way to shore up, to expand or to make better our pension system in Canada. We are hoping we will see that kind of movement from the government in the not too distant future.

New Democrats continue to put forward other ideas and expand on those we have already made. One of those ideas is to expand the CPP-QPP for the 93% of Canadians who already are members of that plan and who benefit from it. The NDP is proposing that there be a phased-in doubling of benefits in the CPP-QPP from the current maximum of $908.75 a month to $1,817.50 a month. It would take the pressure off both people's savings and private workplace plans and create a more stable savings environment for people on pensions.

We know there is a cost associated with this. It is estimated that this plan to double CPP-QPP benefits would need to see an additional payroll deduction of about 2.5%. That is often less than the annual administration fees of many RRSPs. Therefore, in that sense, it is a very good bargain for people who are trying to find a stable and reliable source of retirement income.

Our proposal goes on to mention that there could be a tax credit to soften the burden of that increased payroll deduction for low income people. This would go a long way to ensuring stable and reasonable retirement income for Canadians. It would also go some way to increasing the benefit of able people. In fact, this plan would see up to 63% replacement of pre-retirement income for Canadians, as opposed to the current 38% under the existing terms of the CPP-QPP.

It is a great idea and it is one that we could accomplish. It is one that we collectively contribute to and that we could actually make happen if we decided to move in that way. I hope the government will consider this very serious idea.

Another great idea would be to increase the old age security. This is the basic bottom line plan that should ensure that no Canadian senior lives in poverty. The NDP is saying that an investment of $700 million in the OAS program would accomplish lifting all Canadian seniors out of poverty. I know that is a significant amount of money but it is not a significant amount of money when we consider some of the other places in which the current government is spending money, including the $60 billion in tax cuts it is giving to large corporations in Canada. That is $60 billion for the large corporations when $700 million would ensure that no Canadian senior would live below the poverty line.

It seems to me that would be an excellent investment, especially during a recession when we know that anybody who is collecting OAS is spending that money in their community. If we can lift all Canadian seniors out of poverty with that kind of investment, we should go about it and do it right away.

The final piece of the NDP plan is to ensure that there is a pension insurance scheme, like the deposit insurance scheme that we have on our bank and credit union deposits. This scheme would be self-funded. It would go some way to ensuring that if there were a problem with the pension, there would be an insurance program that guaranteed some continuation of that pension. We also think there should be some kind of federal government mechanism to ensure that when a pension plan is falling apart, the government has a mechanism for intervening and ensuring that some continuation of that pension is possible.

We have some specific examples on the table for discussion, which we hope the government will look at carefully. We have costed them out and we think they are cost effective. We think they will help Canadians. Like the suggestion in Bill C-290, we think they are all necessary to move forward in ensuring retirement income security for Canadians, something that is particularly important today during the economic crisis that we are experiencing.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Madam Speaker, thank you for this opportunity and your ruling. That was in fact one of the points that I was going to raise in debate. This bill did appear to require a royal recommendation and I think that you have clarified that point. In some respects, it makes the debate a bit moot because it is very doubtful that the government will give a royal recommendation to this particular bill.

This debate takes place in the context that Canadians are exceedingly worried about their pensions. We saw a demonstration this week by Nortel employees in front of Parliament Hill. It was a very moving and powerful demonstration of people who have worked for a very long time with a particular company that has gone bankrupt.

They experience a double whammy. First, their pensions have literally gone south with the bankruptcy because the assets of Nortel have in some measure gone to the United States to be distributed according to the laws in the United States, which leaves Canadian pensioners out in the cold.

Here, the pensioners rank behind certain categories of creditors. It is a double hit as far as they are concerned. They rank below secured creditors here and those assets that are attributable to the American operation take priority and go south, so those assets cannot be realized either.

The Nortel folks are in real difficulty. There was a particular scene on television two nights ago where a woman was asking where her prime minister was? Her pension and retirement are devastated. Where is the government? The truth of the matter is that the government is missing in action on this file. It has proposed no legislation whatsoever with respect to pension protection.

While the hon. member has proposed Bill C-290, which may be in and of itself be a flawed bill, it is probably a greater response than we have received from the government in the four years in which it has been the government.

I do commend the hon. parliamentary secretary for his work in this area. I know that he has engaged others in this conversation, but having engaged others in this conversation is too little, too late. The pensions of Canadians melted down last year and a lot of them have not come back. It is very sad and difficult.

While Rome literally burns, the government fiddles. We have no comprehensive response to either the Nortel people or others. When questions are raised on this side of the House, the Minister of Industry says that it is a provincial problem. As a consequence, the government says that it is washing its hands of it and that it is just too bad for the folks who do not have pensions.

People put in 30 to 35 years of work at a particular company and they are set to enjoy their retirement, but they are out of luck. That is the sad state of affairs in our country and it is a sad state of affairs with respect to the government's response to the pension crisis that is happening in this country.

The bill itself raises a number of interesting difficulties. I suppose that our party is in the position of saying that it is probably worth going to committee, even though we know full well that it will require a royal recommendation and that this bill will never receive royal assent. Nevertheless, it does raise some interesting questions.

The first question has to do with the government funding shortfalls of pensions. The concept of the bill is that if an employer does not contribute the proportion that he, she or it is supposed to contribute to the pension plan that year, the taxpaying employee will receive, in this case, a refundable tax credit, which is the operative difficulty. Effectively, that means that the employee of company A, which does not contribute, will get a tax credit. However, the employee of company B, which does contribute, will not receive a tax credit.

This brings us into a kind of moral hazard, slippery slope argument. The problem is that the government, or the taxpayer in this case, is effectively bailing out companies that do not contribute to pension plans for whatever reason. That in and of itself is a difficulty because we should not encourage competition among companies in the same industry to not contribute.

For example, let me use companies A, B and C. Companies B and C contribute to pension plans and are therefore draining their own capital. Company A does not contribute. Companies B and C are actually at a competitive disadvantage with company A, all at the cost of the taxpayer of Canada. That is a fairly significant flaw. I commend the hon. member for bringing this legislation forward, but that is a difficulty that is problematic for those of us on the committee that would look at this legislation. I do not know whether the member anticipated this difficulty.

The second difficulty I see with the bill is that it would only deal with people who have pensions. I am given to understand that something in the order of 70% of Canadians do not have pensions. Therefore, taxpayers are contributing to a pension plan out of taxpayer-funded dollars where 70% of those same taxpayers have no plan at all. The no plan taxpayer is contributing to the plan taxpayer. While we would like to redress all of the inequities in this world, this does not seem to me to be quite fair to those who fund their retirement through RRSPs or investments of some kind or another.

It is a bit difficult to rationalize to constituents of mine who have lived in their houses for 35 years, have worked, have no pension, and have lived frugally, to contribute to this pension through their tax dollars. That is a difficulty in itself.

Those are two of the difficulties that I would raise with the bill independent of the requirement for a royal recommendation.

Just for the purposes of those who may or may not understand what a royal recommendation is, a private member's bill cannot cause the Government of Canada to spend money. Any private member's bill has to be shaped and framed so that it does not cause an expenditure out of the treasury.

Having made your ruling, Madam Speaker, and having given us fair warning that this legislation would require a royal recommendation, means that when a vote takes place and if the vote is positive and the bill ends up in committee, there is a very slim likelihood that it will emerge from committee.

On the face of it, I again commend the hon. member for his diligence in putting the bill forward, but in addition to the royal recommendation problem it does seem to have some flaws which would make it difficult. Nonetheless, the bill is an attempt on the part of a private member to address issues relating to pensions. I am rather saddened that we are not looking at comprehensive legislation from the government to deal with what is really a pension crisis in this country.

Speaker's Ruling

[The Acting Speaker, Denise Savoie]

Before resuming debate on this bill, I am prepared to rule on the point of order raised on June 18, 2009 by the Parliamentary Secretary to the Leader of the Government in the House of Commons concerning the requirement for a royal recommendation for Bill C-290, An Act to amend the Income Tax Act (tax credit for loss of retirement income), standing in the name of the member for Richmond—Arthabaska.

I would like to thank the parliamentary secretary for having raised this matter, as well as the member for Richmond—Arthabaska for his contribution to the questions.

Members will recall that Bill C-290 was among those bills identified as causing some concern for the chair, as stated on June 2 at Debates, page 4074. In his remarks, the parliamentary secretary clearly identified Bill C-290 as proposing to reintroduce a refundable tax credit. He further commented that refundable credits are direct benefits paid to individuals regardless of whether the tax is owed or not, and are paid out of the consolidated revenue fund.

He went on to point out, citing a Speaker's ruling made on June 4, 2007, and a ruling made by the Speaker of the other place on May 11, 2006, that refundable tax credits have been ruled to require a royal recommendation.

In his comments on this issue, the hon. member for Richmond—Arthabaska, while acknowledging that the bill seeks to create a refundable tax credit, drew the attention of the House to an earlier Speaker’s ruling of October 16, 1995 in support of his contention that measures to alleviate taxation do not require a royal recommendation.

The chair notes that a question similar to that at issue here was raised with respect to Bill C-445, An Act to amend the Income Tax Act (tax credit for loss of retirement income), in the second session of the 39th Parliament.

That bill, which appears to be very similar to Bill C-290, was also introduced by the member for Richmond—Arthabaska, and was determined to require a royal recommendation in a ruling given on May 2, 2008.

The chair has reviewed carefully Bill C-290, particularly with respect to the manner in which it compares to the earlier Bill C-445, and as was noted in the May 2, 2008 ruling on Bill C-445,

Whether or not the tax credit is refundable or non-refundable is the key issue in determining the need for a royal recommendation.

Non refundable credits are deducted from a person’s tax payable rather than being calculated separately: they simply reduce the amount of tax payable by an individual.

Refundable credits, on the other hand, are not limited simply to the reduction of tax payable. They provide an entitlement to funds which is independent of the tax otherwise due. They are calculated separately and, where no further reduction of tax payable is possible, they give rise to a disbursement from the consolidated revenue fund. Any such disbursement, no matter how it may be characterized in the legislation which proposes it, represents spending for a new and distinct purpose and must therefore be accompanied by a royal recommendation.

In this regard, there does not appear to be any substantive difference between Bill C-290 and its predecessor, Bill C-445. Both involve refundable tax credits.

Accordingly, the Chair will decline to put the question on third reading of Bill C-290 in its present form unless a royal recommendation is received.

The debate, however, is on the motion for second reading, and this motion will be put to a vote at the conclusion of the second reading debate.

The House resumed from June 18 consideration of the motion that Bill C-290, An Act to amend the Income Tax Act (tax credit for loss of retirement income) be read the second time and referred to a committee.

Income Tax Act

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

Madam Speaker, I am pleased to have the opportunity to respond to Bill C-290, the proposal for a refundable tax credit related to pension income.

This extremely flawed proposal raises a number of concerns, primarily the one that was referred to earlier. This proposal would easily cost $10 billion, which is a very substantial sum, especially considering the significant pressure on fiscal resources at the present time.

I would refer back to a question by my colleague from Mississauga—Erindale. He asked the honourable sponsor of this bill, the member for Richmond—Arthabaska, if he had put in a request to the Parliamentary Budget Officer to have a costing done on this proposal. The hon. member was unable to or did not provide an answer as to whether he had or had not.

As we know, part of the mandate of the Parliamentary Budget Officer is to cost out private members' bills, proposals that private members bring forward, to see whether they require a royal recommendation, which I would suggest this one does, but also to tell the House whether this is a reasonable request. The number we have now is $10 billion. We did not receive an answer and I would encourage the hon. member to proceed with that process.

He suggested that $10 billion was too large an amount. The critic for the Liberal Party, the member for Markham—Unionville, also suggested it was too large an amount. However, they did not back that up with anything, other than saying that number was wrong. There are facts available. The Parliamentary Budget Officer could provide those facts and I would encourage the hon. member to do it. If he thinks the number is not accurate, then he should ask the Parliamentary Budget Officer to provide us with the realistic number.

Not only that, the bill would reduce the employer incentive to properly fund and manage its pension plans to control financial risks. Overwhelmingly, the benefit of a small group of taxpayers would benefit, while the costs would be borne by all taxpayers. This ignores the strengths of our present retirement income system.

It also fails to take into account our government's action to improve the retirement savings system for Canadians.

First, this proposal would entail substantial costs, as I say, a projected $10 billion. Not only would it provide a refundable tax credit for pension income shortfalls, but it suggests that it would in fact effectively provide a refundable credit on the full amount of pension benefits received by most retirees. This is because, as drafted, the proposed credit would be based on the difference between the pension benefits payable to an individual from a registered pension plan and the amount of benefits received by the individual from a retirement pension compensation arrangement. As a result, the proposed credit would cost about, as I say, $10 billion annually. Clearly, such a costly measure would be untenable.

Second, by providing a partial government-backed guarantee for pension benefits, we would be creating a disincentive for employers to properly fund and manage their pension plans to control financial risks.

Third, such a guarantee would raise issues of fairness because the costs would be borne by all taxpayers, while benefiting a minority of those participating in pension plans. For example, RRSP savers or those in defined contribution pension plans who do not achieve the pension income they expect because of poor investments could demand similar compensation.

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

Madam Speaker, I am pleased to support Bill C-290, tabled by the hon. member for Richmond—Arthabaska.

We worked hard on this issue together, and we met the former workers of Atlas Steel and the Jeffrey mine on several occasions. I also want to mention that we had an exceptional partner from the Bloc Québécois, namely the hon. member for Chambly—Borduas, who helped us a lot with his experience in this area, and who supported us, as did the researchers working for the Bloc Québécois. We also consulted senior officials from the Department of Finance and from the House, as well as our law clerks, who provided advice to us.

The Conservative member who spoke earlier said that today's bill was a botched piece of legislation. He asked whether we had consulted people. Does he think that one can table a bill here, in the House of Commons, without checking the facts? Before a bill can be introduced, it must comply with the financial regulations, and also with the other regulations. It is a requirement. It is an obligation. We did what we had to do and we were advised by senior officials from his government, from Parliament, and by law clerks who told us that this legislation is very consistent with Canadian laws. Therefore, our bill is financially and legally acceptable.

I also want to congratulate the hon. member for Richmond—Arthabaska, who, earlier, conveyed so well the trauma of these former workers, because of the awful situation that they are experiencing. They have been receiving a pension for 10 to 12 years and then, all of a sudden, that pension is reduced by one third. We are not talking about a commitment that had been made, but could no longer be met: that pension fund was started many years ago.

I should also point out to the Conservative member who spoke earlier that it is not 1,000 or 10,000 plants that are affected in Canada, but only two, namely Atlas Steel and the Jeffrey mine. So, this is very much an isolated problem. If these people find themselves in this situation, it is because of government measures that allowed contributions to be stopped for a while in these plants, in an attempt to save the companies. However, we did not manage to save them and they went bankrupt, with the result that the fund found itself in a deficit and that these people's pensions had to be cut by one third.

So, this measure would not cost $10 billion. In one case, we are talking about some 300 workers, and 800 or 900 in the other case. The tax credit that the government would provide has been estimated at about $1.7 million. This amount would gradually diminish because, like everyone else, these people are going to die some day. They have already reached a certain age, since they are retired. So, at some point, this measure would no longer cost anything.

We want to correct a mistake that was not made by workers who might have gambled their money away, or made bad investments. No, the mistake was made by a government. So, we must correct it with the help of a government. We got the support of the Quebec government. If this bill is adopted here, it will also be passed by the Quebec National Assembly, with the result that these 22% would become 44%. This would help workers recover a significant part of their annual loss, as the member for Richmond—Arthabaska explained in the example that he provided earlier.

I want to thank the Liberal member who spoke a little while ago. He raised questions—and we will be able to answer those questions when the bill is referred to committee—but he has nevertheless agreed, in good faith, to referring this legislation to committee. In order to do so, the bill must get the support of a majority in the House at second reading.

He agreed to that on the Liberals' behalf. We will check and discuss it in committee. It will take about a week and we will have a chance to hear from witnesses.

I would also like to thank my NDP colleague who expressed himself so honourably earlier when he said that the bill was timely and would give us cause to consider pension funds as a whole. That might not happen when we discuss this particular bill, but it might be a starting point for us to do some more looking into the complex world of pension funds.

I would also like to express how disappointed I am in the Conservative members from Quebec. I have not heard a single Conservative member discuss this issue or stand up in support of it. This is an issue that affects Quebec workers, some of whom have cousins, brothers and sisters in my riding. It also affects the people in their ridings. The Quebec members have not said a word. That is remarkable. Every time we talk about social measures, compassionate measures, measures to help people in need, they are nowhere to be found. But when we talk about protecting oil companies by giving them $2.5 billion, they give the minister a standing ovation. They are in league with those profiteers.

I have a question that I want to ask them one by one. I want to ask the member for Lévis—Bellechasse, who is always ready to take a stand when it comes to helping the well-off, the member for Beauport—Limoilou, the member for Pontiac, the members for Beauce, Jonquière—Alma, Lotbinière—Chutes-de-la-Chaudière, Roberval—Lac-Saint-Jean, Mégantic—L'Érable, Charlesbourg—Haute-Saint-Charles and Louis-Saint-Laurent, what are you waiting for? You made a choice. I made the choice to come here and stand with the other members of the Bloc Québécois to defend the interests of Quebeckers, including the Atlas Steel and Jeffrey mine workers and other workers. I am here to stand up for National Assembly consensus issues, such as demanding $2.6 billion in equalization—which is what Ontario and Nova Scotia got—and whatever else might be in Quebec's interest. You made a different choice. That was your right, and when you made that choice, you were saying: “I will get elected as a member of the party in power and I will be able to influence decisions made by the party in power when I am part of that caucus”.

Well now, it is time to act. So far, the 10 Conservative members from Quebec have not said a word. As the second hour of debate on this issue will not take place until October, you will have until then to think about whether you are representing Quebec's interests here in Ottawa.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Madam Speaker, as the NDP critic for seniors and pensions, I am very pleased to participate in tonight's debate on Bill C-290.

Let me begin by thanking the Bloc member for Richmond—Arthabaska for bringing forward this bill.

For those who may have just turned on their televisions, I would like to add some commentary to help them understand what we are talking about.

Bill C-290 would grant a refundable tax credit equal to 22% of the reduction in pension benefits experienced by beneficiaries of registered pension plans, other than trusts, who suffer a loss of pension benefits when their pension plans are wound up in whole or in part. It applies to both a defined benefit plan and a defined contribution plan. Bill C-290 would also allow taxpayers to apply for a reassessment of taxation if they voluntarily request reassessment on or before 10 calendar days after the end of the taxation year.

Without the legalese, that essentially means that if the income of a retiree's pension drops from, say, $30,000 to $22,000, he or she would receive 22% of the $8,000 loss, which would be a non-taxable amount of $1,760.

This bill is particularly timely. It allows us to discuss pension protection and retirement security on the cusp of a demographic change that we will see very soon. In fact by 2014, one-quarter of Canada's population will be over the age of 65.

This bill is equally timely because of the NDP motion that was just put before us. Members will know that the motion passed on Tuesday of this week, which was an NDP opposition day. It was my motion in fact, which I am very pleased with. It called upon the Conservative government to expand and increase CPP, OAS and GIS, to establish a self-financing pension insurance program, to ensure that workers' pension funds go to the front of the line of creditors in the event of bankruptcy proceedings, and to end the practice of rewarding bonuses to CPP investment managers and recover the $7 million in bonuses paid out this year when they lost $24 billion.

Bill C-290 is very much in keeping with the spirit of my party's own work, and my work, and as such we will be supporting it.

To hear some Conservative MPs in this place tonight, one would think the debate over retirement security is mostly about containing costs. For more progressive voices, it represents an opportunity to re-examine the growing gap between the rich and the rest of Canadians and to make decisions that protect the public interest instead of the interests of the wealthy few.

At a time when more wealth is being created in this country than at any other time in our history, people in Canada are working longer and harder, not to get ahead, but just to keep up. In fact, average Canadians today are squeezing out 200 more hours of work each year than they did nine years ago.

Until recently, a few people at the top were enjoying the benefits of the current economy while everybody else was not. We have seen the windfall salaries and extraordinary bonuses of CEOs, but wages and purchasing power for everyone else are essentially stagnant or falling. The working people and retirees are falling farther and farther behind.

One of the reasons of course is tied to what is happening in our economy. In the manufacturing sector, our economy lost over 350,000 jobs between 2002 and 2007, and since October 2008, an additional 406,000 jobs were lost in Canadian forestry, industry and manufacturing.

This week, in fairness to the government, we did see an announcement of an infusion of $1 billion into the forestry industry. I do hope that money flows faster than the infrastructure dollars.

It is absolutely essential that the government sit down with leaders from both the labour movement and the business community to develop a plan to maintain and build both the manufacturing and resource sectors of our economy. Not only are those jobs crucial for sustaining families, but we know empirically that the highest level of pension coverage is associated with union memberships in those jobs.

About 80% of union members belong to workplace pension plans, compared to just under 30% of non-union members. With the overall percentage of people who belong to workplace pensions being in a continual decline, it is imperative that we continue to fight for unionized jobs and to maintain the struggle at the bargaining table for defined benefit plans. It is the only way to ensure predictable retirement incomes for workers.

What is happening now is not sustainable. I am from Hamilton. I have witnessed the economic insecurity faced by industrial workers in Hamilton. One can see the shock on their faces and the fear in their eyes. Every time a plant closes down, the pensions and benefits of workers are threatened. Anyone in the House who followed the CCAA proceedings at Stelco, which is now U.S. Steel, will know what I am talking about. Sadly, that is but one of many local examples where restructuring or plants closures have created pension uncertainty for workers.

It is time for the government to acknowledge that pensions are deferred wages. They are not bonuses paid to workers at the end of their working lives. They are part of an agreed-on compensation package for hours worked. That is why the NDP has been pushing the government to finally enact certain clauses in the Wage Earner Protection Program Act that is already the law of the land.

The purpose of that act was to ensure that workers' pension funds go to the front of the line of creditors in the event of bankruptcy proceedings. The Wage Earner Protection Program Act sets out provisions to ensure that unpaid wages in the event of a bankruptcy are paid to workers and that super creditor status is set up for unpaid pension contributions.

Elements of the amendments to the above pieces of legislation were enacted by the Governor in Council in the summer of 2008. However, not all aspects of the changes were implemented. That left some glaring loopholes that our party's leader made it his mission to close.

On May 13, the member for Toronto—Danforth said:

Mr. Speaker, the truth is that the government will not act even when it is the law.

In December 2007, Parliament took action to protect Canadian pensions by adopting Bill C-12 to amend bankruptcy laws. Section 39(2) prioritizes unpaid pension contributions in the case of bankruptcy. Sections 44 and 131 ensures that the court cannot unilaterally overturn a collective agreement. Section 126 prohibits a court from sanctioning restructuring plans unless all unpaid wage claims and pension obligations have been met. It is the law but the government has refused to put it into force. Why?

At the root of that bill, of course, is the vision that workers must receive the pensions they have earned. Bill C-290 shares that vision as well. I would suggest that, for that reason alone, this bill deserves the support of all members of the House.

Yes, there are some areas that merit further examination. However, the Bloc members who have participated in the debate thus far have acknowledged that and have expressed their willingness to explore these issues further at the committee stage. For example, public data detailing the number of pension plan beneficiaries who would be eligible to claim the tax credit proposed in Bill C-290 is not available.

We do know that in 2003 there were approximately 3 million members of private sector registered plans, of which 73% were members of defined benefit plans. However, at present, no one collects the data on this, so it is really hard to say just what the amount of cost would be. The government does say $10 billion in costs. That is certainly conjecture and I think this bill should be moved to the committee for review.

I call upon my Conservative and Liberal colleagues now to walk the talk. They supported our opposition day motion, which really meant, in its commitment to principles, they should continue in that frame of thought and support Bill C-290. They voted for my motion; they should now vote for Bill C-290. The principles are the same.

I would remind my colleagues that the House also supported the most recent incarnation of Bill C-445 in the 39th Parliament.

[John McCallum, Liberal, Markham—Unionville, ON]

Tory times are tough times, as my colleague so wisely says, Mr. Speaker.

As long as Canada has a Conservative government, Canada will have a Conservative deficit. Because we have a big, fat, juicy Conservative deficit, Bill C-290 would reduce taxes for today's pensioners, but our children and grandchildren would pay those taxes down the road. If we are going to ask a teenager in Richmond—Arthabaska to pay taxes 10 years from now in order for a senior in Prince George to use this tax credit today, we should know how much tax we are talking about. Before a third reading vote, it would be vital that members know how much revenue the bill would cost the government, and more important, our children.

During the second reading of Bill C-290's predecessor, the Parliamentary Secretary to the Minister of Finance suggested that the cost would be upward of $10 billion a year. That number is suspiciously round. It is reminiscent of the alleged $50 billion deficit created by the finance minister, and I suspect it may be equally inaccurate. When the government says $10 billion, it may be $10 million or $2,000. The government is not good with numbers.

It is our position that the bill should be sent to committee. Then we can hear from real experts, finance department officials, not the Minister of Finance and his friends, as to what the costs of the bill are in reality.

Let us be clear: there is no doubt that we need to take action on pension reform in this country. Today, at the finance committee, we heard from Nortel employees and retirees. As we all know, Nortel is currently in bankruptcy protection and there are some serious concerns about the pensions of current and former employees. They have concerns that their underfunded pension plan does not have preferred creditor status in bankruptcy negotiations.

We also heard from many experts at the finance committee that the 110% maximum funding limit on pension plans acts against the interests of retirees. For this and many other reasons there is much more work to be done on the subject of pensions.

Few things could be more nerve racking than having one's pension reduced, especially in the years when one cannot return to the workforce to supplement that lost income. While that reason alone is sufficient, I believe that the principle of the bill certainly merits further study. Therefore, we in the Liberal Party believe that the bill should be sent to the finance committee where members can determine if it is the best way to go about helping retired individuals whose pension benefits are reduced.

[John McCallum, Liberal, Markham—Unionville, ON]

Madam Speaker, I am pleased to debate Bill C-290, which is an act to amend the Income Tax Act to compensate for the loss of retirement income. The bill is a reintroduction of Bill C-445, which was on its way to finance committee last year before the Prime Minister broke his own fixed election date law and called the 40th general election.

At its heart, Bill C-290 has a very laudable goal, to help protect Canadians' pensions when a business fails and it can no longer meet its pension obligation in full. It would provide a 22% tax credit on the portion of a pension that was promised but not delivered.

Having a pension suddenly reduced or cancelled entirely can be devastating to seniors. A great many of them do not have the option of going back to work to supplement their lost pension income. Instead, they are forced to lower their standard of living, eat less food, keep the thermostat a bit lower in the winter. Nothing about it is pleasant.

Despite the emotional, sociological, and economic toll that loss of retirement income can take, the Conservatives deliberately put thousands of seniors in that exact position two and a half years ago when they hiked taxes on income trusts by 31.5%. In one fell swoop the Conservatives killed an investment vehicle that thousands of seniors relied on for regular monthly distributions to live out their retirement in dignity.

To make matters worse, 10 months before destroying $25 billion of seniors' hard-earned savings, the Prime Minister promised up and down that a Conservative government would never, ever tax income trusts. As a result, seniors flocked to income trusts, putting their life savings in them, only to watch the Prime Minister break his promise and destroy their hopes and dreams.

The worry and the dread of the seniors who suffered at the hands of the Prime Minister is very similar to the worry that seniors who lose their defined benefit pension plan experience. Bill C-290 seeks to alleviate some of that worry. As a result, I am happy to say that my position has not changed since the last Parliament. I do have some concerns about the bill, but it certainly deserves to be sent to the finance committee where MPs can hear from experts and hopefully improve the bill.

Once it arrives in committee, I would specifically like to hear from finance officials about how much the bill would cost the treasury. This is particularly important now because we currently have a Conservative government.

As every Canadian knows, a Conservative government means that Canada is currently running a deficit. The two go hand in hand and they have become synonymous in the minds of voters.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Madam Speaker, I appreciate the opportunity to speak about this Bloc proposal.

Bill C-290 proposes a costly refundable tax credit related to pension income at an estimated cost of about $10 billion per year. Such a costly measure would be untenable at any time, but it is particularly unsupportable in the current fiscal context. However, the cost of this proposal is not its only problem. It also raises serious issues, such as serving as a disincentive for employers in financial difficulty to properly manage their pension plans to control risks.

Clearly, having adequate retirement savings is important to all Canadians. While Canada's retirement income system is strong, with a balanced mix of public and private retirement savings programs, with both compulsory and voluntary components, our government has sought, and will continue to seek, improvements.

Indeed, our Conservative government has introduced a litany of tax-cutting measures to provide much needed relief to seniors and those saving for retirement.

We doubled the amount of eligible income that can be claimed under the pension income tax credit to $2,000. It is the first time the credit amount has been increased since it was introduced in 1975.

To improve work and savings incentives, we increased the maximum age to 71 by which Canadians must convert their RRSPs to registered retirement income funds and begin receiving pension payments.

We brought in tax changes to permit employers to offer more flexible phased retirement programs in order to retain older experienced workers and ease succession planning measures.

We introduced the landmark pension income splitting, a move that Cynthia Kett of Stewart and Kett Financial Advisors Inc. called “a huge gift from the government that more and more senior Canadians are taking into consideration in their financial and retirement planning”. And we increased the age credit by $2,000.

Our Conservative government's tax-cutting agenda since we formed government in 2006 has provided nearly $2 billion in tax relief every year for Canadian pensioners and seniors.

Additionally, we provided a 25% one-time reduction in the required minimum withdrawal amount for registered retirement income funds for 2008. This will provide approximately $200 million in tax relief to RRIF holders, while allowing retirees to keep more of their savings in their RRIFs sheltered during an extraordinary drop in market conditions.

We also recognize that Canadians need stronger incentives to help meet ongoing savings needs. As a recent HSBC Insurance Agency survey indicated, almost half of Canadians think, “The best way the government can support aging people planning for their retirement is to give them tax breaks and to allow them to look after themselves”.

This is one of the many reasons our government introduced the historic tax-free savings account, or TFSA. The TFSA is a flexible savings vehicle that complements existing registered savings plans by allowing Canadians to earn tax-free investment income to more easily meet their lifetime savings needs.

Starting this year, Canadians 18 or older can contribute up to $5,000 annually to a TFSA, with unused room being carried forward. While contributions to a TFSA are not tax deductible, all investment income, including capital gains, earned in the account will be tax-free even when withdrawn.

Important TFSA features for retirees include the fact that TFSAs have no upper age limit and that neither investment income earned in a TFSA nor withdrawals affect a senior's eligibility for federal income tested benefits, such as OAS or GIS. It is little wonder then that renowned financial author Gordon Pape has proclaimed that TFSAs are “a welcome tax shelter for Canadian seniors”.

Clearly, our Conservative government has worked aggressively to ensure that the retirement income system is responsive to the needs of savers, pensioners and seniors. We will continue to build upon and enhance the system in a way that supports its objectives, consistent with sound pension and economic policy principles.

This brings us to the Bloc's flawed proposal outlined in Bill C-290.

The measure proposed here would go far beyond its stated intent. Not only would it provide a refundable tax credit in respect of shortfalls and pension income, but it would also effectively provide a refundable credit on the full amount of pension benefits received by most retirees. This is because, as drafted, the proposed credit would be based on the difference between the pension benefits payable to an individual from a registered pension plan and the amount of benefits received by the individual from a retirement compensation arrangement.

As a result, the proposed credit would cost approximately $10 billion per year. This represents a major and ongoing cost, and one that is clearly irresponsible in the current fiscal context. For this reason alone, I submit that the proposal should not be supported.

Regardless of whether the bill has been drafted properly to achieve its intended result, its objective is to provide a partial government-backed guarantee for pension benefits. Such a guarantee would reduce the incentive for employers to properly fund and manage their pension plans to control financial risks. This is because sponsors may exercise less due diligence with respect to prudential goals, knowing that benefits are backstopped to some degree by the government.

The fact that pension plan sponsors would not be required to contribute anything whatsoever to cover the cost of this refundable credit would exacerbate this effect.

Moreover, this proposal would place on the federal government's shoulders the responsibility for providing compensation in respect of all pension plans that reduce pension benefits. It is important to note that the federal government is only responsible for pension benefit standards for plans sponsored by federally regulated employers. Indeed, nearly 10% of all pension plan members participate in federally regulated plans.

Since provinces are responsible for the protection of pension benefits for plans sponsored by provincially regulated employers, the onus placed on the federal government for such compensation would be unjustified.

Furthermore, the best way of ensuring that promised pension benefits are secure is to have healthy plans with good supervision.

At the federal level, pension plans are regulated under the Pension Benefits Standards Act, which sets forth a number of requirements in respect of the funding and administration of pension plans.

Providing any kind of guarantee or compensation for pension benefits, whether through the tax system or otherwise, would be extremely costly for taxpayers. It also raises issues of fairness, since the costs would be borne by all taxpayers while the benefits would accrue only to a minority of those participating in pension plans.

A refundable tax credit in respect of shortfalls of pension income would not be the best way to promote the security of pension benefits. It would create undesirable economic incentives for pension plan sponsors and be an improper use of the tax system. It would also be costly and unfair.

Therefore, I strongly urge members not to support this proposal as drafted.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

moved that Bill C-290, An Act to amend the Income Tax Act (tax credit for loss of retirement income), be read the second time and referred to committee.

Mr. Speaker, it is a great honour to participate in this debate once again. I say once again because, as I will have the opportunity to explain, this is the second time I am tabling this bill. Of course, it has now changed its number. Previously, it was Bill C-445. It has become Bill C-290.

So I am truly very happy to take part in this debate this evening. I also thank my colleague for having seconded this bill. Once again we are returning to the task and not letting up. I am sure that the people watching us at home right now who are affected by this bill are also very happy that we have come back to it before the summer break to have the first hour of debate on the second reading of this bill.

On May 17, 2007, as I was saying, I took the floor in this House to table Bill C-445. One year later, that bill had passed second reading and was about to be debated in committee. It was going to be submitted to the Standing Committee on Finance when elections inopportunely, as I would put it, interrupted the entire process. The people from our region with whom we worked on this bill were aware of the parliamentary process, whereby the bill and the entire initiative could be interrupted by the calling of an election. This delayed all of our work. We always said it was like building a house: you have to go about it brick by brick, and at some point the job might have to be interrupted. However we began again immediately after the election, and two years later, here I am again with Bill C-290, which reintroduces the full text of Bill C-445. You will recall that that bill was intended to grant a refundable tax credit to taxpayers who are the victims of a failure of an employer or certain employees of that employer to make contributions to a registered pension plan.

Bill C-290 is a bill to amend the Income Tax Act (tax credit for loss of retirement income). That is now its title. I must explain that there has been a minor change to the bill, and that was to its title only. Initially, Bill C-445 referred to a tax benefit, whereas now we refer to a tax credit. The legislative drafters said that it was more correct to speak of a tax credit than a tax benefit. For the rest, this is precisely the same bill, which I tabled again last February after promising to do so. In fact I see this as a commitment. One must always pay attention to one’s election promises. Our people knew very well, at the time of the last election campaign, that I was making this commitment in order to keep it. I had to be re-elected, and fortunately I was. I have kept my promise with the tabling of the bill which now bears the number C-290.

This bill proposes a refundable tax credit, as I said earlier, for loss of retirement income equivalent to 22% of lost revenues. The credit would have no impact on the retiree's income, whether or not he pays taxes. In addition, the credit could always be transferred to a surviving spouse, and it would apply to both a determined contribution plan and to a determined benefit plan. The usual example given is that of a retiree whose income would drop from $30,000 to $22,000. That is a loss of $8,000. If we take 22% of this $8,000 loss, as provided in the bill, a non taxable amount of $1,760 would go to this person whose pension was reduced because his company went bankrupt or closed.

This was what happened with the 1,200 retirees of the Jeffrey mine in Asbestos, in my riding. That is why I spoke of my electoral commitment to these people, naturally. It happened as well to the 300 people working at Atlas Steel in Sorel, in the riding of the seconder of this bill, my colleague from Bas-Richelieu—Nicolet—Bécancour. He too told his fellow citizens that the Bloc was going on the attack. Even if the bill unfortunately died on the order paper when the last election was called, we were not going to let go.

Another thing happened as well. We know how it works, but I want to explain it to our viewers. There is the famous draw, in the case of private members' bills, which allows each member the opportunity to introduce a bill at one time or another. My colleague from Bas-Richelieu—Nicolet—Bécancour and I decided that whichever of us was chosen first would introduce the bill again. I do not want to monopolize this bill. We are working as a team.

It did not matter which colleague introduced it, what counted was to move it forward as quickly as possible. I am not very lucky in the lottery or in draws, but this time I was lucky and I was drawn first. So, I reintroduced the bill, and now we have a chance to debate it for the first hour at second reading before the summer recess. I am therefore very happy. My colleague from Bas-Richelieu—Nicolet—Bécancour was drawn right after me. It would not have made much difference. But I won and so I stand before you. You will still have an opportunity to hear my colleague in a few minutes.

The retirees from the Jeffrey mine and Atlas Steel worked hard and honestly all their life. They contributed to a pension fund that was drastically cut through no fault of their own. This is important to say. We have the option of helping them, and this is what we are trying to do with Bill C-290, by giving them part of their loss. Or we could leave them to their fate. Unfortunately, that is what the people in the Conservative government did with Bill C-445, while the Liberals and the NDP supported the Bloc to have it sent to committee.

I want to remind this House that the Conservatives told us that this bill would cost a fortune. Despite my requests, I never did find out how they came up with figures as outrageous as $10 billion. I can talk about this later if I have time, but I asked the people at the Library of Parliament to do some research. I was told that it would take an absolutely unbelievable catastrophe for the figures to reach such incredible levels, even though the economic situation today is not what it was when I first introduced this bill. Other retirees could certainly benefit from this tax credit, but if more people who have been penalized can benefit, then that is good.

I am certain that my Liberal and NDP colleagues will continue to support us. At least, I hope so. Perhaps there will be speeches later to confirm this. Perhaps the Conservatives have changed their minds since this bill was first introduced in 2007 and will recognize that these retirees deserve the little boost that the measure in Bill C-290 will give them.

I want to give some background on this bill to show how the idea came about. The bill was the result of extraordinary cooperation between the subcommittee of retirees from the Jeffrey mine in Asbestos and from Atlas Steel and my colleagues from Bas-Richelieu—Nicolet—Bécancour and Chambly—Borduas. My colleague from Chambly—Borduas attended the initial meetings here in Ottawa. The retirees came to meet with us, and we asked our human resources and social development critic to come with us to see whether we could find any common ground. Our former labour critic was also present. We wanted to try to see what we could do to help these people. It is all well and good to say that we support them, but can we do something tangible to help them?

When they explained their problem to us we did not have an immediate solution. It would not have been fair to these people, who have certain expectations of their elected members when they tell them their problems, to present a bill and not have a tangible solution. Thus, we took our time and had discussions with them and, finally, agreed that it would be possible to present a bill. My colleague from Chambly—Borduas was very involved from the beginning and quite active in the discussions that led to the idea of a bill for a refundable tax credit for people who lose retirement income when the company closes its doors or goes bankrupt.

Creating a tax credit was the idea of Gaston Fréchette, the chair of the Jeffrey Mine retirees subcommittee in Asbestos, who lives in my riding. We had been talking about this for quite some time. Not only is he very involved in this matter but he is also helping retirees with something else. Mr. Fréchette is working very hard to help people with a legal battle. He is also very involved in his community.

I would have to say that it was rewarding. At the same time, we realized that we might have something that one day could be put on the table as a real solution. As I said earlier, Rome was not built in a day and we had to start somewhere. This is what we finally came up with. The parliamentary process is somewhat difficult and it can also be lengthy. That is obvious from the fact that two elections have taken place since we started this.

As for me, this is my third term. It was during my second that I introduced this bill for the first time, and here we go again. There is no doubt that there will be another vote this fall to see whether there is agreement to refer this bill to committee. That was the solution we had, and there was no other solution anyway for us to get this file through the federal government.

As I said, Mr. Fréchette worked very hard on the first introduction of this bill and we will certainly hear from him again just before we vote on it in the fall, when we will of course be seeking the support of my 307 colleagues in this House of Commons for our bill.

Back when we introduced Bill C-445, Mr. Fréchette sent a letter to each member, as well as taking time to personally phone every Quebec member, regardless of party, soliciting their support for the bill. He also circulated a petition, which originated in my riding, calling for public support for our bill. That was a great success, with more than 2,000 signatures gathered in a relatively short period of time from people willing to sign in favour of Bill C-445.

As I said, exactly the same bill has now become Bill C-290. In my opinion, if people signed the petition on Bill C-445, it is abundantly clear that they still support the demands made in the petition which circulated immediately after the first bill was introduced.

So this has been a team effort involving people from both Sorel-Tracy and Asbestos. There was great solidarity and they focused their efforts on enabling us to advance this idea, introduce it here in the House of Commons, get it through an initial vote and to achieve the right to have it go to committee. I know that the pensioners are prepared to appear before the committee. This is something we have been waiting for for a long time, and I hope that it will become reality when the time comes to vote on it, which will, as I said, likely be in October. It is always a bit risky to set a date, but it ought to be somewhere around that time .

The people who have supported us, the ones who signed the petition, believe that no retiree should have trouble making ends meet because he is not receiving the retirement income to which he contributed all those years.

Since 2003, Asbestos retirees have lost $55 million from their pension fund and $30 million in benefits. With Bill C-290, compensation will be available to retirees whose supplementary pension funds have been cut.

I see that I have one minute left, so I will get to my conclusion. I must say that surviving spouses would also be eligible if their spouse was entitled to part of the pension.

In addition to all the support we have in our respective ridings, we also have the support of the NDP and Liberal members in this House. Also, just recently, Ernest Boyer, the president of the FADOQ network, the Quebec federation of seniors, said:

Too often, in such a situation, we hear the same old arguments: retirees who have a supplementary defined benefit pension fund are very lucky, almost like the bosses who got generous bonuses from their companies, so the Quebec government [or the Canadian government] does not need to assist these so-called fat cats.

He said that on the contrary, they believe these retirees need assistance.

Private Members' Business

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, on June 2, you read a statement concerning certain bills which would infringe on the financial prerogative of the Crown and might therefore require royal recommendation. At that time, you specifically referred to my bill, Bill C-290, which is why I wanted to speak briefly. I am responding to your invitation to make representations to you on the matter.

I know that the Parliamentary Secretary to the Leader of the Government in the House of Commons spoke to this matter this morning, stating that my bill did require royal recommendation. You will not be surprised to learn that I do not share that opinion. I totally disagree and, I repeat, I will be brief in stating my point of view.

Hon. members need to understand that my bill amends the Income Tax Act to provide a refundable tax credit to an individual whose employer, and certain employees of that employer, failed to make the contributions required to be made to a registered pension plan. The bill seeks to help retired workers whose retirement income is reduced by the closure or bankruptcy of their company.

I am sure I will be able to convince you with my arguments. According to a ruling by the Chair on October 16, 1995, relating to Bill S-9, reducing income tax does not contravene Standing Orders 79 and 80. The Speaker at that time made the following ruling:

The bill will also have the effect of granting some tax relief retroactively and there may be some reimbursements payable for taxes paid under the law as it now reads, should Bill S–9 be passed by the House and receive royal assent.

The bill does not appropriate tax revenue, but rather exempts or reduces taxes otherwise payable, in some cases retroactively. [...]

In conclusion, Standing Orders 79 and 80 have not been contravened, as Bill S–9 neither imposes a tax nor appropriates money for any purpose. Since the bill relinquishes funds it might otherwise have gained, it is not appropriating money but forfeiting revenue it would have raised without such changes.

Thus, it seems to have the same tax effect given that we are reducing the state's tax revenue with our bill, as allowed by the Standing Orders. The Speaker should consider the fact that this measure does not seek to create a specific program to help workers who may have lost their retirement funds but rather to allow citizens who have paid taxes all their lives to benefit from tax credits.

This tax measure will reduce the tax burden of individuals who have lost their retirement income because their retirement fund was inadequate at the time the company they worked for ceased operations.

Take, for example, the 1,200 retired employees of Jeffrey Mine in Asbestos, which is in my riding. Since February 2003, they have lost no less than $55 million in retirement funds and $30 million in benefits. A retired worker who normally would have been entitled to $30,000 now only receives $22,000. Once the bill in question, Bill C-290, goes into force, that worker will receive 22% of the lost $8,000, or the non-taxable amount of $1,760.

In closing, passage of this bill will mean that all retired employees who find themselves in this type of situation can recover a portion of amounts lost through tax credits. It is important that we mention this fact. This would only result in a reduction in the government's revenue and not in a new social program.

I will conclude by saying that I am convinced this explanation will allow you, Mr. Speaker, to reconsider the need for obtaining a royal recommendation for Bill C-290.