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

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

Mr. Speaker, the last time I looked there was a majority on the other side of the House.

NDP members will express our opinions in opposition to this particular flawed bill, and the government of the day with a majority will take it to committee. There will be a discussion there.

However, to go back to the member's first point about the cost of the CPP and the consensus required, it does not require 100% of the provinces. It does not require 100% of the representation of the people of Canada.

More importantly, we need the dialogue. We need to go back. The provinces as a whole, including those that object, understand there is a pension crisis in this country. To shut the door on that dialogue by using a flawed excuse that we do not have all of the consensus needed is disingenuous to the Canadian public, which deserves better than to hear that in this place.

The reality is that Canadians need help, and it is up to this place to provide it.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I would like to seek consent to split my time with my colleague, the member for Kings—Hants.

[The Acting Speaker, Barry Devolin]

Is that agreed?

[Some hon. members]

Agreed.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, a little more two years ago I asked the government of the day what it planned to do to protect and preserve pensions for all Canadians. The minister responded by saying that pensions were provincial and should be left to provincial legislatures to deal with. He said pensions were not a federal problem no matter how much the opposition cried out.

Canadians rightly found that notion to be wrong, short-sighted and unacceptable. Therefore, what is Bill C-25? It is the government's answer to our calls for pension reform. In simple terms, providing the provinces go along with this, it creates a federal notion of a pooled registered pension plan similar to a group RRSP. Clearly, that is the best thing the government could come up with.

In 1998, when the current Prime Minister was campaigning, he announced that he wanted to privatize the Canada pension plan. The Conservatives proposed the elimination of the public Canada pension plan. Backed by a bit of research, that is clearly there: it is exactly what the current Prime Minister said. He suggested that the Canada pension plan should be replaced by a super savings account that would allow Canadians to put all of their extra money, if they had any, into investments for their retirement. PRPPs are similar to that fundamentally flawed idea. It continues to be just as flawed an idea now as it was then.

What is the problem? While the Prime Minister is the sixth highest paid political leader in the world, earning an annual salary of $296,000 U.S., and telling Canadians to put their extra money into the bank for their retirement, he seems to forget that not everyone has so much extra money. What about those seniors who pay their taxes, raise their families and work hard but still do not have any extra money to invest? How are they going to survive?

The Liberals have long believed that Canadian seniors need and deserve a secure and reliable plan to help keep the “gold” in the golden years. I mean a pension plan, not an investment plan. In an effort to do this, on March 1, 1928, Liberal Prime Minister King officially created a limited old age security pension plan. That plan was expanded in 1952 by another Liberal prime minister, Louis St. Laurent.

Recent statements by the Prime Minister seem to indicate that the Conservatives do not share this view. They voted against all of those previous policies and continue to look at ways to erode the security of Canadian seniors, which seems much more like waging war on seniors and the poor than anything else.

Under old age security, the guaranteed income supplement and the CPP that were established by the Liberals over the past 90 years, Canadian seniors have gradually been lifted out of poverty. We have finally reached a level where there are a lower number of seniors living in poverty than ever before, although that level is still not acceptable.

The Conservatives have opposed each of these measures. Now it seems they want seniors to work even longer. Forcing them to work longer and harder to save for retirement, on top of asking them to pay for $6 billion in giveaways to the largest corporations, $13 billion for prisons and $30 billion for untendered stealth fighter jets, is not a plan for pensions.

The PRPPs will not work for those who need it most, but for those who have lots of money. For many of us who deal with seniors who are struggling every day, this will not be a very good tool. PRPPs are nothing but locked in RRSPs.

Canadians could face a number of problems if this plan proceeds. They will have to become market experts, as their employer will pay no administrative role in the PRPP plan. Members will bear 100% of the investment risk. A single market stumble could spell the end of any retirement home. We know how difficult the investment industry is when one goes to invest, yet that person has to rely on someone who has that expertise. The majority of Canadians do not have that expertise and will again be subjected to the volatility of the market and those making investments for them. Also, there is no ability to move out of an underperforming PRPP into a performing one or one with better services.

If the provinces make PRPPs mandatory, which we do not know yet, employers will be forced to create administrative systems to enrol members. As well, because both employers and members can opt out, costs will be incurred for no reason.

It is unclear whether homemakers can contribute to or belong to a PRPP. We clearly understand that they are not at the top of the list of concerns of the current government. Yet again the so-called Conservative plan excludes those who contribute to society outside of the work force.

Why are we not learning from some of the mistakes of others? The Australian government adopted its version of PRPPs in 1997, over a decade ago. A recent study published in the Rotman International Journal of Pension Management found that the only one who had benefited from the plan was the financial services industry. That is a shame.

PRPPs will be managed by the same people who manage Canada's mutual funds, and Canadians already pay some of the highest management fees in the world. I hear no talk about how the government will control that or put caps on any of those management fees for anyone subject to this. Clearly, those who will make the most money out of it are the banks and financial institutions.

Morningstar recently released a report grading 22 countries on the management expense ratios levied on their mutual funds, and Canada was the only country to receive an F. Shame on everyone.

Reducing government spending is a laudable goal. However, the financial players offering PRPPs will need to offer annuities so that plan members may convert their accumulated balances into a stream of pension payments. Once that occurs, insurers are required by law to price in a profit margin and to keep regulatory capital aside to underwrite the contracts. These two requirements alone are achieved at the expense of the plan members, who will see their pensions reduced as a result. This is a very inefficient way of delivering pensions.

These two requirements are the cornerstones of the PRPP plan. With that in mind, I am left to wonder how PRPPs could possibly yield results for Canadian pensioners. The simple answer is that they will not help the average Canadian prepare for retirement. The PRPP is another tool in the toolbox. It is not necessarily a particularly good tool, but clearly it is the best the government is prepared to go forward with.

Instead of copying the failed work of others, why did the Prime Minister not seek to lift seniors out of poverty? A supplemental Canada pension plan, already proposed by the Liberals, would provide the best of both worlds. It would create a new retirement savings vehicle for Canadians who needed it, while delivering the low overhead cost structure of the Canada pension plan.

A supplementary Canada pension plan would be a simple and cost-effective solution to the looming pension crisis, and is very different from the NDP proposal. This is a defined benefit pension for everyone, including homemakers and farmers. Anyone could contribute, even those who have left the work force during their lives for child rearing, illness and educational advancement. It would use proven and existing resources to give every Canadian man, woman and child a reliable and stable investment vehicle for the future.

Every Canadian has the right to live in dignity, especially during their golden years, and a SCPP would allow them to do that. The very best part of that is that a SCPP would not require the retention of assets to create a profit margin for banks and insurance companies, and it would not require them to keep regulatory capital aside to underwrite those contracts. It would be a win for the average Canadian pensioner.

However, the Conservatives, as I indicated, could not care less. By ignoring calls to improve the CPP and by floating the idea of slashing the old age pension of those aged 65 to 67, the Conservatives have shown their true colours.

Balancing the budget on the backs of seniors is nothing short of waging war on the poor. It is unacceptable and the government should be ashamed for even putting that idea forward, but clearly that is the opinion of the Conservatives. They have never supported old age security, the Canada pension plan and the guaranteed income supplement, which continues to show in their colours. As far as they are concerned, they will support a big corporation, but if a person cannot take care of themself, goodbye Charlie. That is not the Liberal way. That is not the Canadian way.

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Mr. Speaker, I listened to the member's speech, and some of the inaccuracies and the hyperbole that was used was rather worrisome.

My first question would be about why the Liberals voted against raising the GIS. When we look at what our government has done to improve the lives of seniors and their lot in life, there have been so many things done. We improved the GIS quite markedly. We removed thousands of seniors from the tax rolls and we abolished the mandatory retirement age for federally regulated workers. In addition, we introduced pension income splitting.

There are so many things we have done to support the seniors across our country. Why? Because we know our country has an aging demographic.

I would like to go back to my first question. We increased the GIS exemption and introduced the largest GIS increase in a quarter of a century. If the member is so concerned about the seniors in this country, why did she and her Liberal opposition party vote against the raising of the GIS?

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, history shows where the government's priorities are. Today all we need to do is pick up any newspaper and we can clearly tell what the choices are for the government: $6 billion in corporate tax cuts, $30 billion in purchasing fighter jets and building prisons. Those are the issues that matter to it. It has little interest in improving the lives of seniors. Using income tax for those who have lots of money is one avenue. There are those on the bottom rung living on $15,000 a year and now we are suggesting that they will need to wait until age 67 before they can even start to live on $15,000 a year. It is total hypocrisy and ridiculous.

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

Mr. Speaker, during the election campaign, the Liberals said that they would gradually enhance the pension plan; however, they have provided very few details since that time. We, in the NDP, believe that pensions should be doubled in the future in order to eliminate poverty, especially among seniors.

I would like the member to explain how the Liberals intend to carry out their plan.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, we currently have a Canada pension plan that is administered very well, has very low investment fees and so on. We could include an add-on to the current Canada pension plan and call it a supplementary Canada pension plan that everybody who has a social insurance number would have. If people have an extra $100 a month, instead of putting it into an RRSP they could put it into their supplementary plan. It would be capped as RRSPs are capped but there would not be a question about where their money will be invested. It would not matter if people were homemakers, farmers, self-employed or unemployed. No one wants to live on only $15,000 a year but many of our constituents live on that and, quite possibly, some of them live on less than that.

The supplementary plan is there. It would include low cost minimum fees and it would be a great investment. People would not need to worry about what may happen to the stock market tomorrow. History has shown a steady return on the Canada pension over many years. Thank God we have the Canada pension plan program and that the Liberals had the foresight to bring in that plan.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, it is a pleasure today to speak to Bill C-25, the pooled registered pension plans act.

Canada's retirement system is based on four pillars. The first is the OAS-GIS, the Canadian social safety net for seniors. The second pillar is the CPP, Canada's mandatory public pension plan with defined benefits. The third is the tax-assisted private saving options, such as RRSPs, registered pension plans and the TFSAs. The fourth is private assets, such as a house or the equity people may have in their home, which they may try to downsize at some point to better fund their retirement.

I thank my colleague, the member for York West and the Liberal critic for seniors and pensions, for her exceptionally beneficial and important work and analysis on pension issues over the last several years. Through her hard work, she has developed and helped present to this Parliament and to Canadians a well thought out optional voluntary supplemental CPP that would be superior to the PRPP for a number of reasons, which she has helped explain.

First, a defined benefit plan as opposed to a simple PRPP plan with defined contributions would provide Canadian retirees with that extra degree of security despite market fluctuations. It would also make it voluntary and portable and, unlike the PRPP, it would provide lower administrative costs so that more of one's investment could end up benefiting one's retirement rather than going to ridiculously high fees, which are a real challenge in Canada, particularly with some of the mutual funds. In fact, offering a voluntary supplemental CPP option would create more competition for the PRPPs in terms of fee structures. One of the benefits in having a voluntary supplemental CPP, which I do not think has been adequately considered by this House, is that it would help keep fees low in the PRPP system and for those plans.

The reality is that the Canada pension plan itself has a very low fee and low cost structure administratively. It is diversified in terms of asset class, it is diversified geographically and it is diversified by sector of investment. It is professionally managed. As a result of decisions taken by the Chrétien government and Paul Martin as finance minister back in the 1990s, they helped ensure the fiscal and prudential strength of the Canada pension plan for decades to come. In fact, we have the strongest public pension in the world as a result of those decisions. Also, the decision to invest in public markets through a prudent, professional plan was taken at that time.

It was interesting to hear the Prime Minister last week in Davos taking credit for the prudential strength of the Canadian pension plan. In fact, I believe he, along with the National Citizens Coalition, the Canadian Taxpayers Federation and the Reform Party at the time, fought every step of the way those decisions taken by the Chrétien government which enabled Canada to have one of the strongest pension plans in the world. However, that did not stop the Prime Minister from taking credit for it. Next he will take credit for the oil and gas under the ground in Alberta and the oil under the water off Newfoundland and Labrador, although we all know that was Danny Williams, but I digress.

In terms of Canadians' financial situation right now, it is important to realize that Canadians have record levels of personal debt. On average, there is $1.53 of debt for every $1 of annual income. The Conservatives actually made the situation worse with their first budget in 2006 when the current finance minister recklessly followed the U.S. model and introduced 40-year mortgages with zero down payment. That was the same finance minister who had inherited a $13 billion surplus but raised government spending by three times the rate of inflation and put Canada into deficit even before the downturn.

Today, with an aging population, historically high debt levels and low savings rates, it is clear that the government must make Canada's retirement income system a priority so that seniors are not left out in the cold.

The first pillar I want to speak to is old age security. Old age security was introduced in 1952 by a Liberal government. It was then followed by the GIS, the guaranteed income supplement, introduced by a Liberal government in 1967. The OAS and the GIS have formed a key part of Canada's social safety net. This has been a defining element in terms of Canadians' social values and reflects the dignity that we believe seniors ought to retire to. Ensuring that the government sets aside enough money to pay for the social safety net has always been a priority.

The amount we spend on OAS does fluctuate with our demographics. Last year the federal government spent 2.37% of Canada's GDP on OAS payments. Twenty years ago, in 1992, spending on the OAS reached 2.72% of Canada's GDP. In 2030, spending on the OAS is expected to reach 3.16% of GDP. Ensuring that we have enough money to pay for these increases is a matter of priorities, of planning and of making decisions based on evidence as opposed to making decisions based on ideology.

Back in the nineties, the Conservative government of the day tried to cut the OAS by scrapping the guarantee that OAS payments would keep up with inflation. This was done after they had promised not to touch or reduce Canadian pension benefits. A 63-year-old, Solange Denis, told Prime Minister Brian Mulroney at the time:

You made promises that you wouldn't touch anything... you lied to us. I was made to vote for you and then it's goodbye, Charlie Brown.

We will all remember that pivotal moment. The Conservatives, ultimately, reversed their decision on that and listened to seniors across Canada, like the Canadian Association of Retired Persons and other organizations representing seniors and grassroots across Canada. Canadians stood up and defended themselves against that cut at the time.

Last week, the Prime Minister signalled that his government was considering increasing the qualification age from 65 to 67 for OAS benefits in Canada. We need to think about who would be impacted by this and whether it is fair. According to tax returns filed in 2009, the latest information available from the CRA website, more than 40% of seniors receiving old age security had an income of less than $20,000 per year. Furthermore, over half of the OAS money went to seniors earning less than $25,000 per year. Therefore, increasing the qualification age for OAS disproportionately hurts those Canadians who are most vulnerable, seniors living at or below the poverty line.

By increasing the qualification age for OAS from 65 to 67, the Conservatives would be taking away up to $30,000 from each of our most vulnerable senior citizens. These cuts to OAS would disproportionately hurt the poor, especially older single women. OAS cuts would force these seniors onto provincial welfare rolls and put seniors' drug coverage at risk as provinces only provide certain drug coverage to seniors receiving the GIS supplement. If people do not qualify for GIS, they do not qualify for drug coverage. We can only think of the unintended consequences of these changes on poor seniors.

The Conservatives are trying to download all these costs on to the provinces, with provincial treasuries having to pick up the tab or just do without. It is the same with the Conservative's jail agenda, billions of dollars of federal money but also billions in costs imposed on provincial governments, without any consultation, negotiation or discussion with provincial governments.

It is also important to look back a couple of years when the Conservatives cut the OAS to prisoners in Canadian penitentiaries. At that time, the human resources minister spoke of cutting off OAS for prisoners serving a sentence of at least two years. She said, “Canadians who work hard, who contribute to the system, who play by the rules deserve government benefits such as Old Age Security”.

It is interesting now to take those words forward and see that the Conservatives are now treating senior citizens like prisoners. They are treating senior citizens today, people who have worked hard and played by the rules, like they would treat prisoners.

It is bad enough that the Conservatives follow an ideologically rigid and ineffectual tough on crime agenda that will not work, but where will this tough on seniors agenda get Canada? I look forward to questions.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Mr. Speaker, I know the member is a former cabinet minister under the Liberal government and most of us have heard about the demographic issue coming forward for some period of time. For some of us, it has been over 30 years and certainly as baby boomers we saw this issue coming forward and what was going to take place.

What steps did the member, as a former cabinet minister, take to deal with these issues when he was in government? What substantive things did his government do at that time concerning these issues?

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, that is a terrific question because it was the government of Mr. Chrétien, and Paul Martin as finance minister, that made the fundamental changes to the Canada pension plan, which prepared the CPP for decades of prudential strength looking forward to the future. It was also the government, with Paul Martin as finance minister, that eliminated a $43 billion deficit, balanced the books and ensured that $100 billion was paid down on the national debt. Of course, we know we have now lost all that because of the Conservatives' ideological profligacy in the last few years.

As a minister specifically, I was part of the expenditure review committee of cabinet which was led by the hon. member for Markham—Unionville. During that time we saved billions of dollars. We did not do it based on ideology; we did it based on evidence. We looked at every department and every agency and we worked with departments and agencies. My department of public works saved over $3 billion, working with public servants, and $1 billion every year since by reforming procurement, by privatizing in some cases and by out sourcing in other cases, but also by getting better value for tax dollars. I am certain the hon. member would support all of those initiatives.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I enjoyed the remarks by the member for Kings—Hants.

There seems to be some confusion around the announcement of the Prime Minister in Davos. It is not unusual for the Prime Minister to show contempt for this place by making fairly major policy announcements outside the country. However, there seems to be a lot of discussion on the OAS and the fact that it seems to be the government's objective to increase the time people can qualify, to move it ahead two years to age 67.

I ask the member for Kings—Hants this. Is it true that OAS and GIS are linked, that if we raise one, we will be raising them both? Is this not really just an attack on the most vulnerable in Canadian society?

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, we understand that to be the case, that if we change the qualification age for OAS, we do the same for GIS. Of course, GIS is there for those seniors who are significantly below the poverty line.

However, beyond that, just the OAS numbers alone, over half the seniors receiving OAS in Canada make less than $25,000. Just think of that. These seniors are one of Canada's most vulnerable populations. It was bad and cruel enough that the Conservatives made the caregiver tax credit non-refundable, denying that benefit to low-income seniors, but it is heartless to attack seniors further.

I found it interesting that at Davos last week, at the World Economic Forum, there were world leaders almost without exception saying that income inequality and the gap between rich and poor was an issue that needed to be addressed in countries around the world. The only leader who did not talk about income inequality was the Canadian Prime Minister. Not only did he not speak to income inequality and the challenge it represents to societies, but he actually floated an idea that would make it worse in Canada.

This is another example of how we have a bit of a challenge with the occupiers in the NDP and the Tea Partiers in the Conservatives. We need a good, moderate, centrist, practical Liberal government focused on the future of Canadians and helping all Canadians achieve a dignified retirement.

[Shelly Glover, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I am pleased to have this opportunity to participate in today's debate about the importance of passing Bill C-25 in good time.

I would like to use my time to take a closer look at this new retirement savings option for Canadian workers within the broader context of growing income inequality and, more importantly, what our government has done to fix that.

This troubling trend is affecting countries around the world, and Canada is no exception.

The global economy is more integrated than ever in terms of trade, the job market and even monetary systems, so it should come as no surprise that Canada is feeling the effects of this phenomenon that originated elsewhere. Other countries with advanced economies and social safety nets have experienced similar repercussions. For example, the growing gap between rich and poor in Germany is virtually identical to that in Canada in the most recent decade studied by the Organization for Economic Co-operation and Development, the OECD.

That being said, we must keep in mind that the effects of increased immigration and heightened global interaction and integration have been, for the most part, extremely positive.

In absolute terms, fewer families are living in poverty, and their median after-tax incomes are higher, according to a Vancouver Sun report in October, and this despite the increasing income inequality that has been observed.

These observations are seconded by Statistics Canada research showing that, from the mid-1990s to the mid-2000s, after-tax incomes and transfers increased in all income brackets and that, in fact, low-income families are not nearly as common in Canada as they once were. Of course, this does not mean that we should not consider income inequality.

The Minister of Finance recently spoke about his concerns in this regard. As reported in the Toronto Star, the minister said that income distribution is important and that the issue is that while a very small number of people have very high incomes, others do not have the same opportunities. This is not in keeping with the equal opportunity economy that our government is endeavouring to build, an economy that provides everyone with the opportunity to succeed no matter what their background.

We must not forget that this trend began well before the current government of Canada was brought to power by Canadians.

Therefore, it is one of many challenges that will be handled better by our government than by the opposition parties, as Canadians clearly realize. That is why they gave our government a majority. Canadians can rest assured that we have implemented a number of effective measures to address this challenge, including the pooled registered pension plan, or PRPP.

Some of the comments made by opposition members in this debate would have us believe that the solution to the problem of income disparity is for Canadian governments to simply take money from some people and give it to others, thus magically solving the problem.

The reality is that this approach would impoverish everyone. Our government knows that this is not how a country creates and distributes wealth in the real world.

Scuttling the entire ship will not encourage retirement savings, increase the standard of living or bridge the income gap. The real way to achieve these objectives is to take advantage of the power of our job creators, so that they can invest in higher wages, training, equipment and technology that allows them to do more, be more competitive globally and share their success with the country, which will benefit all Canadians.

With the next phase of Canada's economic action plan—a low-tax plan for jobs and growth—we are taking significant actions to create these conditions. These actions include reducing the tax burden for Canadians, thereby providing support to families and individuals, and encouraging businesses to make the types of productivity-enhancing investments that result in sustained economic growth.

As a result of broad-based federal and provincial business tax changes, Canada now has an overall tax rate on new business investment that is substantially lower than any other G7 country and is below the average of the member countries of the OECD. This tax advantage is aggressively positioning Canada for long-term success.

Forbes magazine recently ranked Canada number one in its annual look at the best countries for business. Globally, more and more people are putting their money to work on this understanding and investing in Canada as the place to be in the future. With the strong mandate we received from Canadians in the last election and with the next phase of Canada's economic action plan becoming a reality, these investments are going to pay off not just for investors, but for all Canadians. When Canada's entrepreneurs and job creators succeed, all Canadians succeed.

With the implementation of the PRPP framework, Canadians saving for retirement will be in the best possible position to invest in this dynamic approach to creating wealth and to support and benefit from it. As we have heard, PRPPs represent an innovative, low-cost, privately administered and accessible pension vehicle to help Canadians meet their retirement savings objectives. These plans are especially important to small and medium-sized businesses because they will allow such business owners and their employees to access a comprehensive, low cost, privately administered pension plan for the very first time.

Professional administrators will be subject to a fiduciary standard of care to ensure that funds are invested in the best interests of plan members. By pooling pension savings, Canadians will have greater purchasing power. The lower costs resulting from pooled purchasing will allow members to devote more of their income to retirement savings. These plans will be straightforward in order to simplify membership and management.

PRPPs will have to be harmonized across the provinces, which will further reduce administrative costs. These design features will eliminate many of the barriers that used to prevent some employers from offering retirement plans to their employees. Our government believes that this will encourage many small businesses to offer PRPPs. This is quite significant when we consider—and this is rather astonishing—that just over 60% of Canadians do not have a retirement plan provided by their employer. What is more, some Canadians might not be capitalizing on the all the saving possibilities currently available to them through individual products such as RRSPs and they might not be saving for retirement on a regular basis.

In cases where employers offer PRPPs, we encourage automatic enrollment for employees. Automatic enrollment will encourage regular savings in PRPPs. Employees who do not opt out will be automatically enrolled.

On another note, in December 2011, Parliament passed the Keeping Canada’s Economy and Jobs Growing Act, which implemented other important aspects of the next phase of Canada's economic action plan to help our economy flourish.

One of the most important measures in the act reflects the idea that jobs are the best income support program.

To protect jobs and support growth, the act grants small businesses a hiring tax credit of up to $1,000 to offset the increase in their employment insurance premiums in 2011 relative to their 2010 premiums. Some 525,000 businesses, and even more Canadian workers, will be able to benefit from this temporary measure.

I want to emphasize that this credit is in addition to our recent initiatives to limit employment insurance premium increases and to protect jobs.

Because we believe that employment is the best social security program, we introduced the working income tax benefit in 2007 and enhanced in it 2009 to encourage low-income Canadians to find and keep jobs.

As my government colleagues have pointed out, the WITB has provided over $1.1 billion per year to working low-income Canadians. Together with other tax cuts introduced by the government, the WITB has had an extremely positive impact in terms of encouraging people to find work and on the financial situation of many low-income Canadians.

Our government recognizes that it is important not only to create and protect good jobs to shrink the income gap, but also to enable people with jobs to keep more of their hard-earned money.

This is especially important for low-income Canadians who spend a greater proportion of their income to meet their families' basic needs: food, housing and clothing.

That is why our government reduced the tax burden for individuals, families and businesses by an estimated $220 billion in 2008-09 and for the following five years.

Individuals and families in all tax brackets are benefiting from tax cuts, with those in lower income brackets benefiting from proportionally bigger tax cuts.

For the 2011 tax year, one-third of the individual income tax cuts introduced by our government has benefited Canadians whose income was lower than $41,544, even though they pay only about 13% tax.

Cutting the GST from 7% to 5% gave all Canadians a break, including those who do not earn enough to pay income tax.

The GST credit, which was not reduced even though the GST was cut by 2%, returns more than $1.1 billion per year to low- and modest-income Canadians.

In addition, all taxpayers benefit from personal income tax reductions, such as the reduction from 16% to 15% for the lowest tax bracket, and the increase in the basic personal amount that Canadians can earn, which is not subject to federal income tax.

The Canada employment credit is another important measure that truly helps workers make ends meet. A credit of up to $1,065 is available for the 2011 taxation year to help cover work-related expenses, such as buying a personal computer, uniforms and supplies.

Measures implemented by our government since coming to power ensure that low-income Canadians now pay considerably less tax and receive greater benefits. A single parent with only one child who earns $37,000 will pay $1,125 less in personal income tax in 2011. In addition, as a result of changes made to the national child benefit supplement in budget 2009, this parent will also receive additional benefits of up to $241.

As a result of initiatives taken by our government since 2006, more than one million low-income Canadians no longer have to pay taxes.

But that is not all. Our government knows that employment is the best social safety net, and we have implemented measures to create jobs and to allow the incumbents to keep more of their hard-earned income.

Nevertheless, we realize that, for various reasons, some people are unable to take advantage of these measures. We therefore took action in order to remedy this situation.

The Canada social transfer and the Canada health transfer allow the Government of Canada to provide significant financial assistance to the provinces and territories in order to help them provide important programs and services to low-income Canadians.

These transfers support health care services, post-secondary education, social assistance and social services, as well as programs for our children.

In 2011-12, the provinces and territories will receive $11.5 billion in cash under the Canada social transfer and $27 billion under the Canada health transfer. These amounts will increase by 3% and 6% respectively over the next few years.

In budget 2009, the government invested $2.1 billion in the construction and renovation of social housing across Canada, including housing units for low-income seniors, people with disabilities and first nations people living on reserve.

In the latest budget, the government also announced a new guaranteed income supplement top-up benefit for Canada's most vulnerable seniors.

Since July 2011, seniors with little or no income other than the old age security pension and the guaranteed income supplement have been able to receive additional benefits of up to $600 for single seniors and up to $840 for couples per year. This measure will improve the financial security and well-being of more than 680,000 Canadian seniors.

Together, old age security and the guaranteed income supplement constitute Canada's largest federal social program, through which over $36 billion in benefits are paid to about 5 million Canadian seniors.

Low-income seniors who receive the guaranteed income supplement and who have a job will now be able to keep more of their earnings.

In budget 2008, the government increased to $3,500 the amount that can be earned before the guaranteed income supplement is reduced, so that GIS recipients will be able to keep more of their hard-earned money.

Thanks to our government's efforts to create jobs, to allow workers to keep more of their earnings and to help those who need it most, Canada has one of the lowest poverty rates among seniors out of the 33 OECD member countries. Our rate is lower than that of Australia at 27%, the United States at 24% and the United Kingdom at 10%.

Once fully implemented, PRPPs will play an important role in closing the income gap by promoting saving, while supporting a global investment process that will create wealth and move our economy forward.

Fortunately, when Bill C-25 passes, the provinces will have a model that is easy to apply to their respective frameworks, so that the system can be put to work for Canadians.

For all of these reasons, I encourage my colleagues to support the timely passing of Bill C-25 and our government's efforts to create a stronger, more prosperous and inclusive country for all Canadians.