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.

Motions in Amendment

[The Deputy Speaker, Denise Savoie]

Order, please. The hon. member for Yukon.

[Ryan Leef, Conservative, Yukon, YT]

Madam Speaker, it was not perfectly clear to me if the member intends to support the legislation. I ask that with all sincerity. Is it the position of the Liberals that because it is not enough, they will not support the bill, or can he recognize, as he did toward the end of his comments, that it is a step and a tool that is moving forward? If the Liberals look at it from that perspective, would they support it and then continue to work with parliamentarians to find additional solutions to improve the chances of Canadians for long-term prosperity?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, it may be perfectly clear, as I believe I would have been in second reading, that what I like about the bill is it shows that there is a difference between all three political parties. We in the Liberal Party see this as a valuable tool and therefore will vote in favour of the legislation.

However, we also want Canadians to recognize that the government has dropped the ball in regard to the type of management fees that will be out there. A lot more dollars will go toward management fees than there need to be. Had the government looked at the structure for CPP and allowed CPP a larger role to play on the legislation, more money would have gone into the pockets of retiring seniors in the future. We would have liked to have seen incorporated into the bill.

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

Madam Speaker, I am very disappointed to hear that the Liberals will support this very flawed notion of a pooled private system. I wonder if any of them, including that member, attended last spring when the Canadian Federation for the Humanities and Social Sciences hosted pension expert Keith Ambachtsheer for a big-thinking lecture series on the Hill. He is an internationally acknowledged expert on pensions. He made it very clear that we already had a superb system that operated at a tiny fraction of 1% in terms of administration fees, with guaranteed defined benefits at the end of the day, backed by government. He said it was a system that people could count on and that it was more effective and more efficient than a private system where the fees would be 2.5% to 4% or even more.

I ask the Liberals and that member to rethink this, go with the advice from the real experts in the field and not let any of our ideologies drive this. I ask them to look at the facts and the science behind it.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, having represented an area in the province of Manitoba for many years, one of the things I notice was the difference between the NDP in government versus the NDP in opposition. When NDP members are in government, they tend to think differently. NDP members in government tend to be closer to wanting to be Liberals and are more open-minded to allowing seniors the opportunity to have a multitude of ways in which they can invest in pensions.

I hope my friends in the NDP have many years of future success in opposition. I hope they retain the position in terms of withholding opportunities for seniors to really enjoy their retirement years by denying them what could potentially be a tool. However, not for every senior will benefit from this. That is why we have to ensure we stay on top of OAS, CPP and the GIS. This is to ensure that all seniors benefit.

However, let us not throw out good ideas or ideas that could be improved upon. Do not get me wrong, this bill can and should be improved upon. It does have a serious flaw, but keep in mind that there are thousands of small businesses across the country that like this legislation and many provincial jurisdictions accept it as a positive thing.

Therefore, we need to approach it with an open mind, but we need to keep in mind that the government dropped the ball in not allowing CPP to play a larger role. Canadians, as a whole, have a lot more confidence in CPP and OAS than any other pension program.

[Deepak Obhrai, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Madam Speaker, it is an honour for me to rise again to speak to Bill C-25, the pooled registered pension plans act.

First, I would like to respond to the last Liberal speaker. When I listened to him, I wondered if there were warning bells that there would be a merger between the NDP and Liberals. Maybe he was talking about that. I wish them the best of luck.

Coming back to the business of the pension plan, I will speak to the NDP position later on. Right now I will speak about the Liberal position, which is typical. The Liberals are speaking out of both sides of their mouths. They like this, but they want to do that. What do they want to do?

Let me tell them this. They should not mislead Canadians when they speak about the CPP.

We should look at the CPP legislation. CPP can only be amended by the consensus of two-thirds of the provinces, representing two-thirds of the population. That is how one can change CPP, and not by what the Liberal Party has said. The Liberals can talk about anything they want, but it will not change the fact that CPP can only be changed when two-thirds of the provinces agree to change it. We should be honest about it.

The provincial finance ministers, at their 2010 meeting, had strong objections to changes to the CPP. Maybe the Liberals should take that fact into consideration. The provinces have a strong objection to changing CPP in the way in which the member keeps speaking about as a good way to change it. For that reason, they will support it but they want CPP.

Yet, as was pointed out, the NDP government in Manitoba is different from the federal NDP opposition. However, all provincial finance ministers agreed that this was the right way to go. I am sorry to say that the objections made by the Liberals against this bill hold no water. It is typical Liberal rhetoric. They are sitting on both sides of the fence.

I will talk about the NDP's opposition to the bill. The NDP is now a party with its head in the sand. I look at what the NDP leader has said. He has been talking about the Dutch disease, creating division between resource rich provinces and so-called manufacturing provinces, not understanding that resources and manufacturing are intertwined.

The provincial economies in Canada are intertwined. Yet the Leader of the Opposition is going around the country and talking about the Dutch disease, saying that the resource sector is destroying the economy of the province of Quebec where he was born. He said that it was destroying manufacturing jobs in Quebec. What narrow thinking. The NDP is aspiring to be the Government of Canada? That is the most dangerous scenario one can think about happening in our country.

If the Liberal members would like to join the NDP, I would ask them to think about this. Do they want to join a party that is sowing division in our country? We have one of the best mobility systems in the world, considering Canada's economic situation compared with other countries. We can move from eastern Canada to western Canada within days and have everything transferred.

We have an economic system that benefits the whole country. Yet, what did the NDP leader say? He is blasting the resource rich provinces. Now he has also changed and is hitting northern Ontario. He does not like the forestry sector there.

I can tell the House that he will quickly change his tune when it applies to his province of Quebec. What kind of leadership is being displayed by the so-called Leader of the Opposition, whom some have termed the “prime minister in waiting?”

As long as I am on this side, we will fight tooth and nail to make sure Canadians understand how divisive that party is. That is why it comes as no surprise that the NDP opposes this legislation. When the NDP opposes something, we know we are on the right track.

Let me get back to talking about the pooled registered retirement. Those who have a business background know the value of having this pooled registered pension plan.

My wife ran a business for 15 years. I worked for the city and helped her with her business. I had a government pension plan then and I have a government pension plan even now, and so do many Canadians. Canadians who work for big corporations have a pension plan. After putting 15 years of hard labour into her business, my wife has no pension because there was no vehicle available to her. All she can do is put money into RRSPs to help her out with her pension planning because that is her only vehicle. When I talked to her about this pooled plan, she wanted to know why nobody had brought this idea forward before. Why did it take so long?

All provinces unanimously support this. Not all Canadians will benefit from this plan, but it will reach those people who have been left out, who do not have any other tools like we have. This plan would fill the crack in their retirement planning.

This plan is a strong tool. It would allow a portion of Canadians, those who are self-employed and those who cannot enter into this, the opportunity to have another vehicle for their long-term retirement plan. What is wrong with that picture? I do not understand what those members find wrong with that.

I hear members talking about the fee, saying they think it would be high. Let me get this straight. Those members are going to oppose a very good plan that would benefit thousands of Canadians because they think the fee would be high. Let me be clear. They do not have any proof that it would be high.

This plan would be based on experience, based on pooled resources and based on this being under an act of legislation. Those would ensure we get the best money for this pension plan. In the long term it would help thousands of Canadians in their retirement, which is key.

The opposition will fearmonger again about our government raising the retirement age from 65 to 67 to qualify for OAS. That does not apply to those who are currently getting it or will be getting it in the near future. We have to look at the long term.

On June 2, I will have been in the House for 15 years. When I was on the other side, we debated the Canada pension plan when the issue was raised by the government of the day. At that time, the Liberals sat on this side of the House. We changed to reflect the increase. We recognized that the Canada pension plan needed to be changed because otherwise it would not be there in the long term for Canadians.

Today, instead of raising the premiums, which would impact the fragile economic recovery, all we are saying is that the age be deferred from 65 to 67. This would apply to the younger population. This would provide them with enough time and tools to continue to build a retirement savings plan, which would be there for them when they retire. The plan will not be bankrupt.

To the Liberal who keeps talking about seniors, I am telling him to use the word correctly, when he is talking about 65 to 70. This is for the younger generation coming up. The current seniors and the seniors we will be getting in the next short period of time are not impacted. However, that is not what he is going to talk about because it does not fit into his agenda.

However, I am happy to note, irrespective of whatever they say, at least they will vote with us, so that by itself is a positive factor.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Madam Speaker, it is always with great humour that we welcome the comments of the hon. member opposite. What we want to do is defend the middle class, the people who are in need.

This bill contains no real incentive for self-employed workers, for non-standard workers who have been increasing in numbers over the past 15 years because this government, like the previous one, has been incapable of creating stable jobs. What he and his colleague said is rather infuriating, namely, that it could help everyone and that it would be voluntary. Sure, but this bill takes so much responsibility away from the employer, there is no incentive. I stress the word “incentive”.

How will part-time and contract workers be encouraged to contribute to it? And, furthermore, all it is going to do is that, in 2020 or whatever year, they will have to retire at age 67 instead of age 65. How can people find real incentive in that and how will the employer be involved and accountable for the amounts that will be invested in the pooled fund?

[Deepak Obhrai, Conservative, Calgary East, AB]

Madam Speaker, he talked about humour. Let me talk about the humour he is talking about when he says they are there to defend the middle class. Amazingly, how is the NDP going to defend the middle class when it is fighting the natural resources, talking about a Dutch disease? He is talking about damaging the economy, putting divisive policies in the country, which will have a very negative impact on the whole economy of the country.

He should first get the facts right before he starts getting up and saying the NDP is going to defend the middle class. The way the NDP is going, there will be nothing left to defend anyway.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I appreciate the comments from the member. Just to pick up on one of them in regard to the whole divisiveness, is the Leader of the Opposition very divisive, not very considerate to westerners? I am a westerner. I too was quite offended by his attack on premiers out west.

Having said that, when we talk about CPP, the member said that requires all provinces to come to the table and come up with an agreement to improve CPP, two-thirds, as has been pointed out. That is why I said it is important in my comments.

Seniors today are looking to Ottawa to see national leadership, a prime minister who is prepared to sit at a table and work with premiers. I am not suggesting he behave in the same fashion as the leader of the official opposition, but I am suggesting he sit down and demonstrate leadership in working on what is an important issue to all seniors in Canada, and that is to enhance programs like CPP. If he is not prepared to sit down with them and work with them in good faith, then agreement will never be achieved.

[Deepak Obhrai, Conservative, Calgary East, AB]

Madam Speaker, in answer to his question, yes, in the 2010 meeting with the finance ministers, the government, through the Minister of State for Finance, my good colleague from Okotoks, met with the finance ministers of our country, all of them. They raised a strong objection. Once they raised the strong objection, it was very clear to us that we needed to find another method for going forward.

Therefore, to answer his question whether we met with the provinces, yes, we did.

[Dennis Bevington, NDP, Western Arctic, NT]

Madam Speaker, I rise to debate this particular legislation. I noticed my colleague in his speech pretty well stuck with the topic of the economy rather than actually speaking to this rather insignificant and poorly designed bill that the government put forward. I do not blame him for doing that, because that is the case.

The Conservatives will say that, by bringing forward the bill, they have created something seniors. That is a very minor element and much of what is proposed in the bill can already be accomplished.

When I was mayor of a little town, Fort Smith, we did not have a pension plan for our employees, but we did have a plan by which they could have a certain amount deducted from their paycheque to go into RRSPs for their use once they had finished their working careers.

These types of arrangement can be made by companies. They were made by the community government I represented as mayor, and they carried forward. Were they successful? They were reasonably successful in some ways, but in other ways, because they were not mandatory but voluntary, they did not include a lot of issues. The municipality itself took the time to even enhance the value of these RRSPs, but still we found that many of the employees simply did not have the facility. They needed the money for their everyday life and did not participate in the program to the extent that we would have thought would have been appropriate.

When we have these voluntary programs for employees who, in this day of Conservative economics, are getting less and less in their pay pocket at the end of the day, a voluntary program to encourage them to save for retirement seems rather difficult for them in many cases because they simply need the money to survive in this world.

What we have is a program that may work for some people, but it is not a nation-building program that deserves the recognition of Parliament, that deserves the time and effort the government has put on Parliament to create. If this is the best it can do, it is certainly not adequate for Canadians, and that is what we see.

We compare this pooled program to other programs around the world that do the same thing. Is there mandatory participation by employers? In Canada, there is not; in New Zealand, yes; in the United Kingdom, yes; in Australia, yes.

Is there auto enrolment by employees? In the case of Canada, provided the employer chooses to offer a plan to that class of employees, there is an auto enrolment, but the employee has an opting out opportunity within 60 days for notifications for new PRPPs.

Is there mandatory employer contribution? There is not; but in all three other programs we are looking at, yes, yes, yes. Is there a minimum employer contribution? In Canada there is none; in New Zealand, 2%; in the United Kingdom, 3%; in Australia, 9%. Is there a minimum employee contribution? In Canada there is none; in New Zealand, 2%; in the United Kingdom, 4%; in Australia, none.

The government contribution is tax relief. In other cases, in Australia they top up by $1,000; there is an annual tax credit in New Zealand of $1,000. Are there provisions to allow employees to suspend contributions? Yes, and that is similar within the programs. Are employees restricted to a single lifetime savings plan? This is important, because in Canada the answer is no, in New Zealand, yes, and in the other two countries, no. However, we found with Australia's not having a single program and not having the ability to transfer programs that this causes a mushrooming number of savings accounts, and it emerged as a significant problem in Australia's superannuation program.

By June 2010, there were 32.9 million super pension accounts in Australia, an average of three accounts per employee and almost double the number 15 years before. Many of them are inactive or are lost member accounts. It is a program that really does not work all that well when there are seasonal employees or employees moving from one business to another.

We have seen voluntary pension pairing plans and pooled registered pension plans around the world and the one that is proposed by the Conservative government seems very weak. It seems to be mostly window dressing on things that could be accomplished and carried forward in a good fashion with the existing legislation and pension opportunities.

We want to see something that is more universal and expands opportunities for the universal Canada pension plan, that raises contribution levels and creates greater defined benefits so people will know they have surety in their retirement and that they can work to the age of 65 and retire with dignity. Now the Conservatives are changing that as well by raising the age of retirement, not for those who are seniors now but for young people who will be entering the system. By young, I mean people under 50 years old, not really young, but they will see that change come about.

What is the reaction within the population? We are seeing that seniors are moving to the NDP in greater and greater numbers across the country because seniors understand what it means when the age of retirement is changed from 65 to 67. They do not want to burden their children and grandchildren with that additional cost when the additional cost to the government turns out to be not that bad. It turns out that the Conservatives are overinflating the costs and creating panic in the system when the panic in the system does not need to happen. The Conservatives are once again living to their name: cons. They are working the Canadian public like we are rubes but seniors are not buying it. They are moving away from the Conservatives in droves right now because they understand the reality of what the government is doing.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Not the seniors in my riding.

[Dennis Bevington, NDP, Western Arctic, NT]

One only has to look at the polling numbers to see that seniors are moving away from the Conservatives.

Why are they doing that after the Conservatives introduced this notion of changing the retirement age from 65 to 67? It is because the seniors in this country understand what that means. People who are at the age of retirement understand what the Conservatives will be doing to their children and grandchildren, and they do not like it. I do not blame them. Fair is fair in this country. We have a system that says that the retirement age is 65, so let us keep it there. We need to make the adjustments on what it costs to maintain that program, not this tricky little measure of trying to promote it by saying that it is not really happening right now so people do not have to worry about it. What is that all about?

We are here to make measured and careful decisions for the future of this country. The government is definitely doing that in a bad fashion. It should be held to account and will be by this side of the House going forward over the next three years until we can get rid of it.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, one could emphasize the importance of providing for our aging population and looking for tools to assist seniors in their elderly years and those who would like to retire at 65 and quite often even younger than that.

My question for the member is with regard to the government in Manitoba, which happens to be a New Democratic government. The Government of Canada has made it clear on several occasions that the provincial NDP government in Manitoba actually supports this legislation. Does the member know if that is true or false?

[Dennis Bevington, NDP, Western Arctic, NT]

Madam Speaker, I would need to examine when the so-called endorsement of this took place, what particular details were laid out by the Conservative government to the Province of Manitoba, when it understood the nature of what was going on here and whether it accepted it simply because that was all that was being offered.

I am not standing here in Parliament to promote things that are only half good for Canadians, a quarter good for Canadians or things that are already available to Canadians under the existing law. That is not why I am here. I am here in the hope that I can provide a better vision for where we can go with this country in the future.