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

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, given the fragile economic times that we currently face, what would an increase in CPP premiums do?

[Ted Opitz, Conservative, Etobicoke Centre, ON]

Mr. Speaker, it would be a very difficult time because this is a fragile economy. It also takes two-thirds of the population in order to change that rule. Right now, in very difficult economic times, like those I observed in Europe recently, this would be a burden that we could not fairly place upon Canadians.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, the image that haunts me from the May 2011 federal election, from campaigning in my riding of St. John's South—Mount Pearl in the great province of Newfoundland and Labrador, is that of the seniors I met at their doors, in the middle of the afternoon, in their winter coats. They wore their winter coats inside their homes, decent homes in the suburbs of St. John's and Mount Pearl, because they could not afford to turn up the heat.

The number one issue in my riding is seniors, people living on fixed incomes, people trying to make ends meet.

According to the Conference Board of Canada, 1.6 million seniors across the country live in poverty, and it is slowly and steadily getting worse. The cost of everything is going up, the cost of food, the cost of oil, the cost of gas, except their incomes. Seniors are having a hard time. People are worried about their retirement years. Lately, people are practically panicking about the thought of retirement.

The Conservative government has thrown out the idea of raising the age of eligibility of old age security to 67 from 65. I have to stop myself there and offer an apology to the man in my riding who wrote to me to complain about the term “old age security”, which he finds, “disgusting”. To quote the man further, he said:

—it is very obvious that the term is not only outdated and lacking creativity as a program title, but it is insulting and downgrading to individuals reaching age 65, and are very active and independent members of society.

That is a very good point.

However, my speech is not about OAS, although it is what most Canadians are talking about from coast to coast to coast. I am on my feet in this esteemed chamber today to speak about pooled registered pension plans and to speak against them.

Pooled pension plans are not the solution for the retirement security of Canadians. Why? Because they amount to gambling even more of their retirement savings on failing stock markets.

Here is the $64,000 question. Will they have a decent retirement income from a pooled registered pension plan? The answer is, who knows. Roll the dice and see, but do not count on it. Do not take it to the bank, do not dare take it to the bank. Is that how we want to see their retirement, as a big fat question mark, as a gamble, as a crapshoot?

Bill C-25 is designed to appeal to the self-employed, as well as workers in small to medium-sized businesses, companies that often lack the means to administer a private sector pension plan. The plan created would be a defined contribution plan, and Canadians need to understand that. Employees will kick in a portion of their salaries into a retirement account where it could be invested in stocks, or bonds or mutual funds. Companies can contribute or they can decide not to. It is up to the individual company. Canadians have to understand there is no guarantee how much of their money will be left when they retire. Their pension will depend upon how well their money is invested. This is not a defined benefit plan. Again, it is a defined contribution plan.

Anyone who has watched their RRSPs nosedive in recent times knows how incredibly risky it is to tie savings to the stock market. Most people have taken losses in recent years, and that is most people who can afford to put money into RRSPs.

When people think about retirement, they want stability. They want to know that their retirement years will be comfortable years. Forget that with the pooled registered pension plan.

Here is what the New Democrat position comes down. The NDP will not support pooled registered pension plans. Although this is not a pension plan so much as a savings scheme. Canadians need to understand that as well.

The NDP will not support this savings scheme because the Conservatives are offering this up instead of taking real action to protect both existing pensions and enhance pension retirement security for those who lack a workplace pension plan.

An estimated 12 million Canadians do not have a workplace pension plan. That is more than one in three Canadians. Bill C-25, an act relating to pooled registered pension plans, or pooled registered savings schemes, would not give them one.

A New Democratic government would double the guaranteed Canada pension plan. The CPP is a universal program for all Canadians, whether self-employed, in small or large businesses, or in the public or private sector.

Why give workers a savings scheme to roll the dice on their retirement when we could simply expand the CPP? Participation in the CPP is mandatory, meaning its expansion would impact everyone. No one would be left behind. Is Canada not all about leaving nobody behind? That is the New Democrat line. That is what New Democrats are about.

However, the Conservative line is about money for prisons. The Conservative line is about money for fighter jets. Prisons and fighter jets have a higher priority than our seniors who are most vulnerable.

The Conservative's safe streets and communities act was debated here last fall. It would make it much safer for seniors to line up outside of soup kitchens. That is what our country is coming to. Our Canada is changing. The safety net that makes our country a great country, one of the best in the world, is under Conservative attack.

At the recent World Economic Forum in Switzerland, the Prime Minister said, “Our demographics also constitute a threat to the social programs and services that Canadians cherish”. Funny, I would say the Conservatives constitute a threat to the social programs and services that Canadians cherish. The Conservatives pose that threat.

The Conservatives have only been a majority government for nine months and already they have attacked or are in the process of dismantling core services across the country and across my province of Newfoundland and Labrador.

Look no further than to the closure of the Maritime Rescue Sub-Centre in St. John's, a service that is vital to our mariners. It is a closure that the regional minister defended by sneaking away in a decoy car.

Look no further than to the defence minister using our search and rescue Cormorant helicopters as a taxi for his holiday on the Gander River.

Look no further than Service Canada and how it is being gutted. Just last week two EI claimants tried to kill themselves because their claims were delayed or rejected.

Look no further than the Canadian seal hunt and how the Conservative government has allowed market after market to ban products from an industry that is central to our heritage and our culture.

Look no further than to our precious seniors. The Conservatives would have it so that the retirement of so many Canadians is a crapshoot.

Again, the Conservatives constitute a threat to the social programs and services that Canadians cherish.

The Prime Minister also said in Switzerland that there would be major transformations coming to Canada's retirement pension system. The only transformative change that Canada needs in terms of retirement security is to lift every senior out of poverty and expand the Canada and Quebec pension plans. However, all the Conservative government proposes is yet another privately administered voluntary savings scheme like several others already on the market. It is the same old, same old. Canadians are not impressed.

I will conclude with this quote from a constituent in my riding, one of about a dozen who have written my office in recent days concerned about retirement and the Conservative agenda that transformed Canada into a warped shadow of itself, “Young people do not stand a chance in this world. Everything we have worked so hard for to make things better for them is slowly being taken away. What a sad message we are sending”.

[Cathy McLeod, Conservative, Parliamentary Secretary to the Minister of National Revenue]

Mr. Speaker, I have listened to opposition members for a number of months now and I continue to be very puzzled. They speak against every industry that would great jobs, create progress and, ultimately, invest in pension plans and create the wealth of the pension plans we have.

On the one hand, the opposition members want to shut down all the pension plans. Then we hear them talking in terms of the Canada pension plan. We have had conversations with the provinces but the opposition members are missing the important detail of needing the agreement of the provinces in order to move forward. Then they are speaking against something that is an option for our businesses, our employees and employers, which is the pooled registered pension plan. It is a great option, another opportunity.

Perhaps the hon. member could put some clarity to the reason that he would vote against an option that the Canadian Federation of Independent Business supports. Many people say that it is an additional, very important tool for our retirement scheme.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, there is a very simple answer to that question. The message that all Canadians need to understand about this pooled pension plan is that it is a gamble. We put money into a fund that will be invested into the stock market, into mutual funds, and it is a gamble.

Nobody knows what amount of money they will end up with when they are of the age to retire. It is a gamble. This is not the answer to retirement security. It is as simple as that.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I understand the federal New Democrats' position in that they oppose unilaterally PRPPs.

If the province of Quebec, the province of Manitoba, which is currently governed by New Democrats, or other provinces were to approach the New Democratic Party and say that some form of PRPPs is a good thing, would the NDP then change its position on this issue and allow the bill to go to committee or even allow PRPPs to come into existence?

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, the question is a hypothetical one and I will not answer hypothetical questions.

I will say that registered pooled pension plans are a gamble. Canadians who invest in these plans will have no idea, when they are at the age of retirement, what they will end up with. This is not the answer to the retirement problems we have.

The Canada pension plan and the Quebec pension plan are the answer. We need to support those and make them better. We need to put more money into them so people will have a decent amount to live on when they retire.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Mr. Speaker, I have a question for my colleague. The government often says that it has no more money and asks how, in this case, it could invest more in the Canada pension plan. I know that tax cuts for big business total $2 billion. Could we have invested that money in our Canada pension plan?

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, I think there is a hell of a lot of money that we could take from savings.

We could take tens of millions of dollars in savings from the fighter jets that the Conservative government is trying to purchase. We could take untold millions of dollars from tax breaks to big businesses. We could take it all that and put it into the CPP to ensure that all Canadians have a decent retirement plan and will be able to live their retirement years in dignity. Untold millions could be saved.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Speaker, it is a pleasure today to rise in the House on behalf of the constituents of Northumberland--Quinte West and participate in the debate on Bill C-25, the pooled registered pension plans act.

Much like my colleague from Crowfoot mentioned yesterday, the bill is vitally important to the constituents of Northumberland--Quinte West.

As other members have also highlighted since the debate began on the bill, most rural ridings in this country depend on small and medium size businesses as primary employers. These businesses are vital to the economic growth and continued job creation within my riding. We owe a great deal of gratitude to the hard-working people who ensure that our economy continues to grow. However, not all small and medium size businesses can afford to provide their employees with a third-party pension plan. That is, of course, why this government has introduced Bill C-25.

As most members will recall, in December 2010, the federal and provincial governments agreed on a framework for defined contribution pooled registered pension plans, or PRPPs. The PRPPs would provide Canadians with a new, low cost, efficiently managed, portable and accessible savings vehicle that would help them meet their retirement objectives.

PRPPs are the new kind of defined contribution pension plans that would be available to employers and employees, as well as self-employed individuals. As a result of this legislation, millions of Canadians would be able to save more for retirement and their retirement goals.

This legislation would allow individuals who currently may not participate in a pension plan to make use of a new mechanism that encourages retirement savings. Ultimately, this new pension plan would enable more people to benefit from the lower investment management costs that result from membership in a large pooled pension plan that few small or medium size businesses can afford.

Moreover, in an age of economic uncertainty, PRPPs would provide the people of Canada with a great deal of flexibility considering the fact that PRPPs would allow for an individual to accumulate benefits and carry those benefits forward as individuals transition from job to job. Additionally, there would be assurances that this fund would be invested in the best interests of plan members.

I have listened to the debate over the past few days and I would like to take a few moments now to address some of the concerns the opposition has raised.

Foremost, with respect to the cost of PRPPs, I can inform my hon. colleagues that this government will ensure low contribution costs of PRPPs through their scale and their design. These plans will result in large pooled funds that will enable plan members to benefit from the lower investment management costs associated with such funds.

Second, I have heard some hon. colleagues question why the government does not simply expand existing CPP benefits. My hon. colleagues ought to know, and I am sure they should know or could know if they wanted to I suppose, that changes to the CPP require the agreement of at least two-thirds of the provinces with at least two-thirds of the population of this country. Federal, provincial and territorial ministers of finance have discussed CPP expansion but there is currently no agreement.

This government understands that a fragile economic recovery is not the right time to increase CPP contributions, which would be required if the CPP were expanded. In other words, it would be an additional payroll tax, counterproductive to the beginning of better times as we exit the great economic downturn that commenced in 2008.

In these uncertain times, Canadians need assurances that their government is working diligently to ensure the very best for their economic security and prosperity. This bill is yet another example of this government's commitment to the financial security of retirees in our dear country.

During my budget consultations in January and throughout my meetings in and around the great riding of Northumberland—Quinte West, I heard from constituents who support the Government of Canada's plans with regard to seniors and the improvements we have made to guaranteed retirement security, such as the guaranteed income supplement, the largest increase in the last 20 years.

However, it is not just this government or those we represent who support this bill. Provincial governments, stakeholders and industry leaders alike have come out in support of Bill C-25. For example, the Ontario finance minister, Dwight Duncan, said that the McGuinty government supports, in principle, the federal Conservative PRPP proposal.

Additionally, in 2011, the Canadian Chamber of Commerce said that the PRPPs had the potential to benefit an estimated 60% of Canadians who had either no or insufficient retirement savings. The chamber also believes that PRPPs, which rely on simple and straightforward rules and processes, would give many businesses the flexibility and tools they need to help their employees save for retirement.

Finally, Dan Kelly, vice-president of the Canadian Federation of Independent Business, said:

A new voluntary, low-cost and administratively simple retirement savings mechanism will allow more employers, employees, and the self-employed to participate in a pension plan. CFIB is particularly pleased that firms will be given a choice as to whether to register for or contribute to a PRPP.

Bill C-25 would provide a new, accessible, straightforward and administratively low cost retirement option for employers to offer their employees. This bill would support individuals who currently may not participate in a pension plan, such as the self-employed or employees of companies that do not offer such a plan or any plan whatsoever.

As such, I will be supporting this legislation on behalf of the good people of Northumberland--Quinte West. I would ask that all my hon. colleagues consider seriously supporting this bill given the benefits of PRPPs that I have highlighted in this speech.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, the member has touched on a very important aspect of this bill: not all Canadians can afford to retire. That is what he said word for word. With this bill, the worker contributes to his future retirement, but the employer is not required to do so.

A Canadian who is currently unable to contribute to an RRSP does not qualify for the related tax refund. I am talking about hundreds and thousands of Canadians. How will they manage to come up with the money they need for their retirement by making a mandatory contribution to a fund that does not provide a subsidy, rebate or tax credit, as an RRSP does? I would like the member to tell us that.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Speaker, the contributions to this plan would be tax deferred. I agree that not everybody may be able to afford to put money toward a PRPP. This is just another tool.

Here is one critical aspect of all registered retirement plans. As I listened to other members speak, I heard some questions from across the way about increasing and doubling the Canada pension plan. That requires a lot of co-operation on behalf of the provinces and that is not there right now. What the provinces have said is that this is the plan they think the people of Canada should be offered. Not only that, the small businesses that employ some of these very people,which the good member is talking about, have told us not to raise their payroll taxes. They are already having a hard time just existing and now the government wants to raise their payroll taxes, which the CPP would o.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the member made reference to the province of Ontario as one of the provinces that support the bill. I am wondering if the member can provide the House with a list of which provinces are onside with the bill. I am sure the member would acknowledge that without the provincial governments bringing in legislation, the bill itself would not apply to the majority of Canadians.

While he is answering that question, I would also ask him to answer the CPP question I asked one of his colleagues. Is he in a position to guarantee that the Conservative government will not increase the CPP eligibility age from 65 to 67?

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Speaker, those are two very important questions.

In answer to the first question, to the best of my knowledge all my notes and research indicate that all provinces in Canada have indicated they would opt in to the PRPP so the citizens of each province would have the ability to get involved in this great retirement tool that would be available to over 60% of Canadians who are not enrolled in a pension plan.

In answer to the second question, as the member knows, the Canada pension plan is a plan to which all working Canadians contribute. To the best of my knowledge, that plan is actuarially sound, at least into the foreseeable future and generally that means 15 to maybe 25 years. Those are the numbers I am hearing. To the extent that anyone can guarantee anything, I would say that if it is actuarially sound, that pension plan will be there for Canadians who pay into the plan.

I heard a member on the other side say that the NDP would ensure that every single Canadian would be entitled to the CPP. I want to inform him that some very close relatives of mine who, because they had larger families, chose to stay home to raise their children and never worked in the workplace are not eligible for CPP. They are eligible for CPP survivor benefits, but because they did not pay into the plan, they are not eligible. New Democrats need to be very careful.

New Democrats also say the PRPP is a risky plan because it is invested in the stock market and other things. Where do they think the CPP is invested? The CPP is invested in the stock market, although in very cautious investments. The NDP members need to listen to some of their questions because the answers lie with them to be more knowledgeable before they ask them.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I would like to point out something that is very obvious. When I think of pensions, I think of the wide spectrum of pension options, whether it is the RRSPs or even to a certain degree people's private investments as they look forward to their retirement years.

There are three fundamental cornerstones of our pension safety net: the old age security, the guaranteed income supplement, and the Canada pension plan. Those are the cornerstones and I believe the Government of Canada needs to stand by that.

While the Prime Minister was abroad he announced that the government is looking at making some fundamental changes to that program. Then in response to question after question during question period over the last few days the government has been in denial and does not want to share any bad news with the public. Let there be no doubt there is some bad news, but the government is just not bold enough or courageous enough to be transparent on the issue.

Today I asked two different members for a guarantee. The Prime Minister and other ministers were afforded the opportunity earlier today to answer. I asked if the government would guarantee that it would not increase the age from 65 to 67. Not one of them was prepared to give that guarantee.

That is why Canadians should be concerned. We do not know what the intentions of the government are in terms of making the reforms. We have not been privy to the documents in the Prime Minister's office. I suspect that probably the vast majority of the Conservative MPs are not aware of it either.

Let us not be fooled. The Prime Minister does have an agenda, and I do not think it is a healthy agenda for the cornerstones of our pension program.

This is a great issue, because it shows the differences between the Conservatives, the Liberals and the New Democrats. We have long advocated the importance of these programs. In fact it was Liberal prime ministers, King, Laurier and Chrétien, who built those programs, who put them into play.

We recognize the value and importance of pensions for our seniors, so that seniors can afford the necessities and hopefully a little bit more than just the necessities here and there. That is why we believe very passionately that this is something we are going to fight for.

We believe that we will uncover the truth. We will find out the true intentions of the government. We will continue to press the government on the issue indefinitely, up to the next election if need be. We will circulate petitions and cards. We want Canadians to know that this is something the government is looking at. Canadians want leadership. We are prepared to provide leadership in the fight for this issue, because we believe in this issue. I asked the New Democrats what their position is on this bill.

The pooled registered pension plans do have a role, but there are some fundamental problems with this bill. There are some serious issues. We need to create an opportunity where there is more competition, maybe involve the CPP planners or managers to a certain degree, and have access so there is more competition. Management fees under the PRPPs will be of concern. Whether it is in the House of Commons or in the different legislatures across Canada, it will be of concern.

The Liberals have an open mind toward it. We recognize that many of the provinces, although the government says it is all of the provinces, are in agreement. I hope the government is being honest about that. We will find out over the next year or two. We will wait to see which provinces bring in the necessary legislation to give Canadians the opportunity to participate in this program, if in fact they are in a position to participate.

Let there be no doubt that we are going to continue to fight for those fundamental cornerstones, the CPP, GIS and OAS. However, we are not going to put on blinders and ignore other pension issues that are also important to Canadians.

We want to see stronger leadership on this issue. The Prime Minister should meet with the first ministers on this issue.

Member after member stands and says that we cannot do anything about the CPP because constitutionally we are required to get two-thirds of the provinces onside and they would not agree to it. I wonder to what degree the Prime Minister has really tried to push for that.

We know that before he was the leader of the Conservative Party and a member of the Reform Party, he advocated that we might not even need the CPP, that it could be privatized. I am not convinced that the Prime Minister demonstrated any leadership whatsoever in terms of advocating for a healthier CPP.

We appreciate that the provinces have a role to play. However, the provinces have to recognize the reality of what the population as a whole wants. The pension issue is very important. The Prime Minister made it that much more important in terms of some of the announcements the Conservatives have made over the last number of days. That is why there is an obligation on the government to come clean in terms of its actual position. Many, including myself, believe that its intentions are to belittle the importance of those three very important fundamental cornerstones to future pensions.

After making an enquiry I was told that in the province of Manitoba over 7,000 seniors 65 years of age and older have to use a food bank on occasion every month. I suspect many of those are from the riding I represent. However, whether I represent them or whether they live in a different riding, it is important that we stand up for seniors who are having a difficult time in trying to make ends meet.

More and more, pharmaceutical costs have been shooting through the roof. Far too many seniors are having to decide between buying the prescribed medication they are supposed to be taking or buying food, which is absolutely essential. Many members might be surprised at the number of seniors who are having to make that decision. I would have expected the government to act on this issue in terms of looking at ways in which to provide more funding for our seniors who are in need.

The government will say that the Liberals did not support the last budget, so the Liberals did not support the last increase to the guaranteed income supplement. Nothing could be further from the truth. We support the increase. In fact, we believe there should have been a larger increase going to our seniors under the guaranteed income supplement because we recognize the hardships they are having to endure.

We want to see a government that believes in protecting seniors' interests, those pension issues that are before us. This will be an issue that I will continue to push on and ask the government to do the right thing in addressing those basic three programs that I have emphasized, the OAS, the GIS, and the CPP. These are very important national social programs that Canadians have grown to respect. Canadians acknowledge how critically important they are to the future of our country.

Sixty-five years of age is what we should be keeping the OAS at. If we can afford some of the expenditures the government is making, surely to goodness the government can come up with a little more money to support the GIS in the upcoming budget, and maybe make our seniors a little better off so they can better afford to get food and not have to make a decision between it and prescription drugs.