Bill C-25 (Historical)

Pooled Registered Pension Plans Act

An Act relating to pooled registered pension plans and making related amendments to other Acts

This enactment provides a legal framework for the establishment and administration of pooled registered pension plans that will be accessible to employees and self-employed persons and that will pool the funds in members’ accounts to achieve lower costs in relation to investment management and plan administration.

Pooled Registered Pension Plans Act

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, I listened with interest to my colleague's remarks, but there was one comment right near the end that I really take exception to. She was commenting about the amounts given by government not being adequate. Well, the amounts given by government are actually the money that is earned by Canadians, so we simply cannot continue to spend other people's money. That is the NDP proposal.

I would like to ask my colleague why she would be opposed to extending the right to a workplace pension to Canadians who do not have that option now. Over 60% of Canadians currently do not have access to a workplace pension.

There are all kinds of small and medium-sized enterprises. We know that the small and medium-sized businesses in the country are the economic engine that keeps our country going, so why would she deny them that possibility? The small engine repair shop, a dental office or a hair salon are all examples of these kinds of business that up until now could not afford to go out and buy a pension plan, but if they pool their resources with others in similar professions, they could actually get a low-cost, effective pension plan. Why would she deny that to the 60% of Canadians who do not have access to it?

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Mr. Speaker, I would like to thank the hon. member for his very pertinent and intelligent question.

It is true that I am prepared to say that the pooled registered pension plan is not a problem in itself. I agree with it, but it is not the best solution. A number of Canadians are not able to put money aside in RRSPs. Will PRPPs really help those Canadians? Some, maybe, but certainly not all. We can do better, as I have been saying since this debate began.

Why not enhance Canada Pension Plan benefits? The program works well; it has very low management costs and the ability to handle risks collectively.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, prime ministers like Mackenzie King and Lester Pearson saw the value of retirement and the importance of providing a pension income for our seniors. Today we look at the foundation programs that were put into place by Liberal administrations in the past, such as the CPP, OAS and GIS. These programs have provided for seniors over generations now, and we believe in those programs.

In regard to this specific bill, there are provincial jurisdictions, we are told by the federal government, that support the need for having this bill passed so that this new pension option would be there for those few Canadians, and ultimately it could be quite a few. In particular, the Province of Quebec and the Province of Manitoba, where there is an NDP administration, seem to be supportive of having this pooled pension plan.

We in the Liberal Party see it as a small tool. It needs to be changed and it could be far more effective, but there does seem to be a desire to have it. Why would the NDP oppose it as at least a pension option? That seems to be all it really is. It is a very small one.

We too want to see the increases to programs like CPP, but this does seem to be a consumer-friendly option for individuals who might have additional pension money going forward. I do not quite understand why the NDP would oppose it as an option.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

But, Mr. Speaker, we also have to emphasize the fact that a lot of people are not in favour of creating savings schemes of this kind, but instead are in favour of enhancing the Canada Pension Plan, or its Quebec equivalent, the Régime des rentes du Québec.

I would like to quote from a recent study done by the Régime des rentes du Quebec, which states:

…this quick analysis shows that there may be a significant gap in the standard of living at retirement between those with fixed benefit pension plans and those who must rely only on RRSPs, RRIFs, LIRAs and LIFs.

We can add PRPPs to that list.

There is a better way to provide for people's financial security and quality of life than by creating a program like this. It is time to take decisive action, with political courage and with specific initiatives.

[Rathika Sitsabaiesan, NDP, Scarborough—Rouge River, ON]

Mr. Speaker, I thank my colleague for her excellent intervention on this topic.

Recently at the World Economic Forum, our Prime Minister announced that there would be major transformations coming to Canada's retirement pension system.

The only transformative change that Canada really needs for retirement security is investment in our Canada pension plan and Quebec pension plan, yet the government once again is proposing another privately administered voluntary savings plan. However, statistics have shown and even members across the aisle have said that people are not participating in it, and that makes it difficult.

My colleague here has many suggestions. I wonder if she could elaborate very briefly on some suggestions that would be equitable, to lift every senior in Canada out of poverty rather than just the wealthy ones.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Mr. Speaker, I thank my colleague for her question.

First, I spoke a lot about old age security, an essential part of the social security net. Increasing the age of eligibility for this program would have a direct negative impact on people in the middle class and people living close to the poverty line.

There are other things that Canadians want to see us do about their retirement security. They are investing in RRSPs, but right now they are now seeing their RRSPs decrease because RRSPs depend on the stock market. That is not retirement security.

Canadians want a defined benefit pension plan. This means that they would be able to count on a set amount of money. Regardless of the amount, they must be able to count on a set amount.

[Bruce Hyer, Independent, Thunder Bay—Superior North, ON]

Mr. Speaker, building on the previous several questions, it is clear to everybody on this side of the House and I think we all agree that what we need is a real CPP, expanded, enhanced and made functional.

Having said that, I am getting a lot of correspondence from small business people in my riding saying this is not great, but at least it would be something for small businesses and for people who do not currently have another vehicle.

My question to the hon. member is simple. Despite all the things we would like to see, which would be much better, does she think there is some potential for this to meet the needs of some people, and would there be any real harm in it if we were to go with the flow?

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Mr. Speaker, I would like to respond by talking about another very similar tactic, which we have seen in other cases.

Recently, the Conservative government announced that it was working very hard on combatting elder abuse because it had amended a small part of the law that makes it possible to ensure that elder abuse would be subject to a harsher penalty. That is the type of smoke and mirror show that the Conservatives like to put on. They brag about taking action for a cause, when really all they are doing is amending a small part of the law, and they could have done so much more.

Why not combat the real causes of elder abuse? Why not combat poverty among seniors? Why not ensure that they have access to affordable and adapted housing? Why not take strong measures to truly address the issues, rather than making big promises but very few changes?

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I am happy to stand to talk about the pooled registered pension plan bill that is here before us.

I am going to talk a bit about some of my experiences as a small-business person and how this would help the employers, the employees and the entrepreneurial sector of our economy. The small businesses, as was said earlier, are the driving forces in our economy. We sometimes forget how important that sector is and how hard it is for them to save for retirement.

I am also going to talk a bit about what a pooled registered pension plan is, so that we can better understand what it is, how it works and what it would do.

If I have time, I am going to talk about the organizations and people out there who have talked positively about pooled registered pension plans, and I will try to convince some of my colleagues on the other side that this would be a great tool to put in the toolbox of pension saving.

First, let me talk about small businesses. Let me talk about small-business owners. In my past, I have certainly been a small businessman. I have been a mentor to other small-business people. Far too often the entrepreneurs in this country worry a lot about one thing in their business. That is the customer, the person who they are selling their product or their service to; that is their whole outreach. Small-business people and entrepreneurs are singularly focused to do what they do and do it right.

It is not that they, in any way, dislike their employees or do not want to do best by them, but something like putting together a pension plan for the employees would come under some of the other things that small business owners and entrepreneurs have to do. It is about their economy. It is about growing their business and serving their customers right.

Entrepreneurs, by their true nature, are usually very good at one thing, whatever it is. I rather like the food business and the customer service side of the food business. I was very focused and I knew I was very good at that. Others may be very good as insurance brokers, as mentioned earlier, as dentists or whatever. Whatever small-business owners are engaged in, they are usually absolute experts at the one thing they do.

But guess what? Small-business owners are the only people who get to make the decisions. They get to be the purchasing director, the person who ensures all the supplies show up and at the right price. They are also in charge of marketing, even though their business may not be about marketing. They are in charge of making sure customers come and are happy.

Most of the day, they spend their time being a coach, a trainer, helping their employees do the job right to serve their people properly. They are also financial planners because their bank will want to know what it is they are looking for. Sometimes they are nothing more than cleaners. If there is a spill, as owners, they are the ones who clean it up. That is what small-business people do: customer service, customer complaints. They are in charge of productivity. In a big business, there may be a whole department, but here in small-business and entrepreneurism, it is the owners. The owners of a small business are responsible for ensuring that happens. They are the accounts payable manager. They are the accounts receivable manager. They are all these things. As small-business people, they may be expert at one thing, but they are responsible for being good at all those things.

Let us add to it, then, pension planning. It just is not in their portfolio, in most cases.The pooled registered pension plan would give them the ability to allow that to go somewhere else. It would be administered by pooling together a business' employees with other businesses' employees, those of other small-business people and other entrepreneurs who might otherwise never plan a pension plan. The money would go into a great big pool and would be administered by someone else. A small-business owner would think, “Is that ever good. Somebody is going to do part of my list. I'm going to be able to hand this off to someone else”.

Let us talk a bit about what the pooled registered pension plan would do. It would do exactly what it says. It would allow businesses, certainly small businesses, entrepreneurs, single-owner businesses and single-operated businesses, to pool together.

I cannot tell members how many times during RRSP season I drive by a bank with a sign that says to buy RRSPs by such and such a date. As a small-business owner I may have even been on my way to that bank to make a deposit. However, I would get to that the next day. Procrastination on the areas where we are not really experts, as entrepreneurs, get left until the next day.

One of the previous speakers asked, if this is so great, why is there not more uptake on RRSPs and why is there not more uptake on TFSAs, the tax-free savings accounts. The reason is that they both require a small-business owner to go someplace and do something. This requires employees to automatically become registered as part of a pooled pension, and it works. It will automatically happen.

As a small-business owner, I always thought my small business was my retirement. That was part of the financial planning. At the end of the day, I hoped it was worth enough and I could sell it, and that was how I would retire. I think most entrepreneurs out there with a small number of employees, or no employees at all, think that is what their retirement is. Their saving for retirement is working hard every day, hoping their business is successful.

What the pooled registered pension plan does is make it also available for them to pool together with other small businesses and save for their retirement in a different way besides simply being the cleaner, the dentist, the hairdresser or whatever the business is. It just is out there. It is a tool in their toolbox. It makes it easy. If we can make it easy, people will do it. It makes it easy for them to pool together to get their employees to automatically register, and then there are pensions out there.

I heard one of the previous speakers talk about some 60% of people in Canada not having a pension plan. That is absolutely right. It is terrible. Here is a chance for more people, whatever their rate of pay, to pool together their assets in those pooled pension plans and allow that to pay for itself and provide a pension plan for them.

In order to increase or do anything with the Canada pension plan, it takes the provincial ministers of finance and the federal Minister of Finance to agree to do it. I am sorry, but we are not at that point. We have not yet been able to get the required number of provinces to do that. That is not on the table, but this is, and when it was launched it had unanimous consent of the ministers of finance in the provincial and federal governments to move forward to do this. It can be done.

Let me switch to some of the great comments that have been made about pooled registered pension plans on behalf of small business. I recognize that I am concentrating there because of being a former small-business owner. The new voluntary low-cost and administratively simple retirement savings mechanism would allow more employers and employees and those who are self-employed to participate in a pension plan. Who would not wish for that to happen?

Dan Kelly, from the Canadian Federation of Independent Business agrees and wants it to happen.

The Canadian Chamber of Commerce stated that this legislation:

...introduced...has the potential to benefit the estimated 60 per cent of Canadians who have either no, or insufficient, retirement savings.

That is the group we are trying to address here, those who are not part of a large industry and have a pension plan to go with it. The Canadian Chamber of Commerce believes PRPPs, pooled registered pension plans, would give many businesses the flexibility and tools they need to help their employees save for retirement, who might otherwise not do it because they missed the great big reader board at the front of the bank saying that RRSP time was here and it was time to put some money in there.

Here is one of my favourites. Minister Duncan from Ontario said that the McGuinty government supports the federal Conservatives' PRPP proposal but believes it is only one tool in helping Canadians save more.

I agree. It is only one tool. We will still have the Canada pension plan, the OAS and the rest of the things, but there is just one that would have given me a chance to save for retirement as a small-business owner, a person who got up every morning and went and worked for myself most of my life.

This is important to us. Let us get this done.

[Andrew Cash, NDP, Davenport, ON]

Mr. Speaker, I wonder what the size of that tool is or how big a tool it is in that toolbox that the minister across the way spoke of. There are micro screwdrivers and maybe this pooled pension Ponzi scheme that he is talking about is a micro screwdriver. I can tell the member opposite that there are a lot of small businesses in a riding like mine in a big urban centre. Not one of them would be able to access this plan or use it to build a retirement plan.

Will the member opposite agree with me that, if this is a tool, it is a darned small one at that?

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I am not here to discuss what size of tool he is. I am here to discuss this bill. Business people who have not had the opportunity to save for retirement, this gives them that opportunity. This plan is available to millions of Canadians who otherwise do not have it available to them.

What will the uptake be? If everybody over there would vote for this and get it out there, we will see what the uptake on it will be.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I think a number of stakeholders will be watching once this legislation ultimately passes and we will see what sort of an uptake there is. We have expressed concerns in terms of what we believe would have made it a better bill. Unfortunately, the government did not see the merit in dealing with issues such as management fees and so forth.

Having said that, my question is more related to what I believe most Canadians are concerned about with regard to the current pension programs, the big three being the CPP, OAS and GIS. Could the member provide some comment as to how active he believes the government is on dealing with that file? I understand that it did get consensus from all the provinces on this bill, but the government has failed to get consensus on the big three pension issues with the provinces. Why?

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I know it is not for lack of trying on the part of the Minister of State for Finance. He went coast to coast talking to all stakeholders about pensions. Many of our own members did the same thing in prebudget consultations. We have been doing this consultation. Other than the quote I read from Minister Duncan in Ontario, I cannot speak on behalf of the ministers of the provinces as to why they thought this.

He asked what the uptake would be. I will tell him what small businesses say. They are not paying into CPP, so at the end of their working lives, they do not have it. It is not there for them because small business people invest their money back into their business. I suggest this is an opportunity for them to pool their resources with other small businesses and have great pensions at the end of the day.

[Ed Holder, Conservative, London West, ON]

Mr. Speaker, I come from a background of employee benefits and pensions and throughout that time I noticed that there has been a dramatic shift as it relates to pensions, RRSPs and, frankly, there has not been the uptake. As I have gone through my riding and asked questions about the interest in it, there seems to be a lot of interest in uptake.

I struggle because I am not sure why there is such opposition to this from members opposite, but I would ask my colleague from Elgin—Middlesex—London this question. Does he think, given a chance, that small businesses like the kinds of companies he represented in his pre-political life, would take a hard look at and participate in this program?

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I said in answer to a question from a previous speaker exactly that. I spent my time this weekend wandering through my riding, going to different events, and that is what I being asked. When I told people I was going to be speaking on pooled pensions in the House, people asked me if we had not already passed it, that they were waiting for it to happen.

I thank the member for London West because his previous background was in the type of business that may be the types of groups of people that would administer this, other small businesses helping with pooled pensions so that small business people and entrepreneurs can save for retirement without really having to leave their businesses and be there to serve their customers.