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

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I would like my colleague to comment on the bigger picture of pensions.

We recognize that this would assist very few Canadians. No doubt, it would be of great assistance to those few. However, there is a great deal of concern for the pensions of all Canadians; in particular, the government's decision to increase the age of retirement, through OAS payments, from 65 to 67.

The member commented on the importance of pension issues. Surely to goodness he would recognize many of his constituents, some would argue most of his constituents, would still say we should provide the opportunity for people to retire at age 65 instead of at age 67. Would he agree with me that changing that retirement age from 65 to 67 would be the wrong direction?

[Costas Menegakis, Conservative, Richmond Hill, ON]

Mr. Speaker, I do not accept the premise with which my hon. colleague set up his question.

The PRPP that would be implemented with Bill C-25 currently proposed in the House would not benefit only very few, as he says. Perhaps he did not listen to some of my speech. Sixty per cent of Canadians do not have a pension plan today. Sixty per cent of the country's population is not very few people.

With respect to the age limit for OAS being increased from 65 to 67, we have said repeatedly in this House, and I know the hon. member has heard it, we are concerned about the sustainability of the program. We want to ensure that OAS is there, not only for people who are currently retiring today, but for our children, our grandchildren and our great-grandchildren. It is just responsible government to ensure that our programs are well funded into the future for our families of all ages.

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

Mr. Speaker, like the other hon. members, I am going to give a speech on the pooled registered pension plans act. I am going to share my time with the member for Churchill.

First, I would like extend my thanks to the member for London—Fanshawe, the NDP critic on this bill. Second, I would like to thank all the hon. members for their various comments on the government bill that we are debating today at third reading. This is a very important topic, one that Canadians are really concerned about.

As we heard earlier, according to the Conference Board of Canada, 1.6 million seniors live in poverty in Canada, and, according to the Canadian Labour Congress, 12 million Canadians lack a workplace pension plan. This is food for thought.

It is amazing to see how two events can be interrelated. Today we are going to debate a special bill tabled in this House by the Minister of Labour less than 24 hours ago. According to the representatives from Teamsters Canada, this special legislation infringes on the freedom to negotiate working conditions. You may wonder how this legislation is related to pooled registered pension plans. Well, the Canadian Pacific conflict basically has to do with pensions and management's wish to revise the system in order to keep up with its competitors.

The vice-president of the Teamsters Canada Rail Conference said the company “wants to take the money from our pension plan and give it to the shareholders”. In a democratic country like Canada, the right to retire in dignity after working your whole life is absolutely non-negotiable. So, yes, that is what we are talking about today.

Since 2006, the Conservative government has been introducing measures to amend Canadians' retirement security; these measures have been highly criticized. Just look at the retirement age, which will go from 65 to 67 in 13 years, when people who are 54 now will be 67. Why introduce this measure when in 13 years there will be less demand? Fewer people will be taking their retirement in 13 years than now. The baby boomers will have already retired by then.

Another measure they implemented was the tax-free savings account. The TFSA may be a good option for those who have the money to contribute to it. There is some debate as to whether the contribution limits should be increased from $5,000 to $10,000. Nonetheless, what is the purpose of this vehicle? According to a recent report by the Canadian Centre for Policy Alternatives, an ING Direct survey found that only 41% of Canadians have a TFSA. Nearly half of them earn $100,000 or more a year and only 24% of those surveyed said that they were using their TFSA to save for their retirement.

I have a TFSA. I was contributing to it bit by bit and it currently has $1,700. In fact, it is money I was saving for a rainy day: in case my washing machine or refrigerator broke down or something. I never considered using the TFSA for my retirement. I was earning a modest income and I never thought that $1,700 would go very far in providing me with a comfortable retirement.

We cannot rely on such savings to provide a decent retirement. I often wondered why the government developed such a measure. The government collects less tax, which leaves less money for investing in repairing bridges, ports and airports, in research and development or even in transfers to the provinces in their areas of jurisdiction. After I thought about it, I remembered that, previously, taxing the savings of the rich and the not so rich resulted in the flight of capital and the use of tax havens. That is quite likely why TFSAs exist: to keep our currency in our banks.

It is time for this government to take some real action to improve retirement security for the 12 million Canadians who do not currently have pension plans through their employers. Bill C-25 will not accomplish that goal. Canadians do not need another voluntary private savings plan. They need real measures that will ensure that they can retire with enough savings to live through their old age with the money they need to be able to dress, house and feed themselves. These are basic needs.

Canadians are wary, and rightly so. Pooled registered pension plans are risky. With this kind of plan, employees set aside funds throughout their entire working lives, and those funds are invested in stocks, bonds, mutual funds and so on. Investment income depends entirely on market fluctuations. Thus, employees are the ones who absorb all of the financial risk associated with stock market ups and downs.

In addition, clause 30 of the bill states:

30. An employer is not liable for the acts and omissions of the administrator.

So, can someone tell me who is liable?

On the one hand, workers are obliged to contribute, while employers, on the other hand, are not, and the funds are subject to stock market fluctuations.

Can someone tell me who assumes the risk, if not the worker?

Quebeckers remember all too well certain recent predators, the kind we call white collar criminals. Some institutions get bad press because they are making huge profits, which they give out as bonuses at the end of the fiscal year.

The NDP wants to increase CPP contributions. We support a pension fund for all Canadians. It is time to get to work on that. However, we do not want a pension fund that fluctuates with the stock market and where workers' savings will diminish when it is time for them to retire.

We are asking that the government secure Canadians' pension funds.

Why does the government not want to study this solution even though seven provinces have agreed to expand the Canada pension plan?

The NDP is being proactive and working on job creation so that Canadians can save. The more workers earn, the more they can save.

The PRPP bill does not provide a fixed benefit, could run out of money if we live longer than expected and is not indexed. Employers and employees can withdraw from the plan, but companies are not required to contribute.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, my question for the member is in regard to pensions in general. In regard to the pool itself, we have all recognized, in particular those within our party, the importance of the CPP, the GIS and the OAS and how it is critically important that the federal government demonstrates some leadership that would ultimately see the level of money seniors receive increase, and that we continue to lobby to ensure we have a retirement option at age 65.

Even though this bill is far from perfect, it is a tool that some seniors might be able to use. Many provincial governments are on side with this. Why would the member oppose this particular tool, albeit small, for some individuals who would be able to benefit from it? Why would the NDP oppose that?

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

Mr. Speaker, I thank the member for his very pertinent question.

We are not opposed to a pension fund for people who have worked their entire lives. The provinces support expanding the Canada pension plan. That is excellent. What I am saying is that we have to ensure that the risk of investing this money in the stock market must be secured. If we took the Canada pension plan—the employer contribution and the employee contribution—and sheltered it in trust, people would be much more inclined to contribute than if employers were entitled to withdraw funds at some point.

At present, Canadian Pacific workers risk losing their life savings. They risk losing everything, or part of their pension fund, which is what happened to employees of White Birch Paper in Quebec.

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

Mr. Speaker, we know that a pension scheme like the one announced in the bill we are debating today clearly puts women at a disadvantage, unlike the NDP's solution of enhancing the public plan.

Given the hon. member's remarkable commitment to causes that affect women specifically, I would ask her to briefly comment on this matter.

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

Mr. Speaker, I thank the hon. member.

Of all seniors, women are among the poorest. In terms of pensions, we are well aware that women live longer than men. Currently, many of them have no pensions for their old age and they are pushing shopping carts with no idea of what they are going to put in them in order to survive.

This is a huge phenomenon in our society. Women's salaries are lower. I am sure that most of the 20 million Canadians without a pension fund are women. Women will become poorer when they retire. And they live longer.

[Colin Carrie, Conservative, Parliamentary Secretary to the Minister of Health]

Mr. Speaker, I have been listening to my NDP colleagues' speeches and one of the things that has become clear to me is that the NDP is simply against providing choice to Canadians who want to look after their retirement income.

The member asked who was responsible. I would ask the NDP member about personal responsibility. When we are looking at our retirement income, I think it behooves us all to have a balanced approach. The NDP wants to put all the eggs into one basket, that being the Canada pension plan, which, as my colleagues have said, is one of the best plans in the world.

However, we are seeing problems in Greece and Europe. Canada is fortunate right now to have a Conservative government and an economy that is moving forward so well. However, things could happen in the future that Canadians could have no control over and an irresponsible government that could be in power.

I would like to know what my colleague has against choice. What does she have against allowing Canadians to take responsibility for their own retirement income instead of rolling the dice and perhaps later on there could be an irresponsible government in power that could blow the whole deal?

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

Mr. Speaker, the hon. member's statement is completely false. This is about taking responsibility and managing risk. We have absolutely nothing against the fact that workers have a retirement fund and even that employers contribute to the fund if that is possible too. I feel that the hon. member's premise is completely false.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I am proud to stand here, along with members of my party, to express our opposition to Bill C-25 and speak to how this is a hasty attempt by the government to cobble together what the Conservatives say is an effort toward establishing retirement security.

However, we see it as just that, a hasty attempt and one that deviates from the real issue here and the kind of lack of retirement security that Canadians are facing and the way in which the government is weakening the foundations of our retirement system in Canada. I will say a few words specifically on this bill today and get more into that later.

The legislation would not guarantee an actual pension. We would like to refer to it more as a savings scheme. Among other things, the bill would create a type of savings scheme that would pool the funds in members' accounts to achieve lower costs in relation to investment management and plan administration. As we know, these savings schemes are being called pooled registered pension plans.

The bill is designed to appeal to the self-employed and workers at small and mid-sized firms and also companies that often lack the means by which to administer a private sector plan. All of the things that have been said as being key goals of the government, we find the bill misses the mark.

Our position is that Bill C-25 fails to protect retirement security because it encourages families to gamble even more of their retirement savings on failing stock markets. People who have watched their RRSPs plummet over the past year know how risky savings tied to the stock market can be. Telling families to double down on the same system that is already failing them shows how out of touch the government is.

We know the Conservatives are not fond of learning from history, facts, science, et cetera, but we can simply look at the most recent history. We know that this attempt to establish retirement security would make Canadians and their savings more vulnerable. In today's global markets, that is an unacceptable proposition. We would like to see the government say no to encouraging greater vulnerability and yes to more stability when it comes to retirement savings.

For the past three years, our party has championed a suite of retirement income security proposals. We have proposed doubling guaranteed Canada and Quebec pension plan benefits to a maximum of $1,920 each month. Growing the CPP and QPP is simply the best and lowest cost pension reform option available. Research has indicated that and advocacy groups that speak on behalf of seniors have indicated that. We have suggested that working with the provinces to build in the flexibility for individuals and their employers to make voluntary contributions to individual public pension accounts is also critical. The provinces have explicitly stated that they want to come to the table and work with the federal government in order to establish greater retirement security for Canadians.

We have proposed amending the federal bankruptcy legislation to move pensioners and long-term disability recipients to the front of the line of creditors when their employers enter court protection or declare bankruptcy. Numerous times a year, we are seeing large employers just pick up and leave. It is all the workers, particularly the more vulnerable workers, who are ultimately paying the price by losing the investments they made into their pension system and facing a very challenging future.

We have proposed increasing the annual guaranteed income supplement to a sufficient level to lift every senior in Canada out of poverty immediately.

All of those measures have received incredible accolades from various organizations, from stakeholders, from seniors and from people who are looking ahead at their retirement prospects. They have said that they want to see these kinds of proposals put into action by the government.

I will read some of what has been said. Ms. Susan Eng, the vice president for advocacy at CARP, an organization that is outspoken when it comes to retirees in Canada, said:

CARP remains committed to improving retirement benefits for the current crop of seniors, including increasing CPP, OAS and GIS payments, getting a moratorium on RRIF withdrawals, making access to Tax-Free Savings Accounts retroactive and lobbying to remove the HST on seniors’ energy bills.

These are a number of very progressive measures. We have not seen the government take leadership when it comes to a variety of these measures.

If we turn to what we are looking at more broadly, it is the way in which the government is weakening the foundations of our pension system. We do not have to look much further than the budget the government tabled some short weeks ago. In fact, the changes to OAS will have a direct impact on seniors, many of whom are already struggling.

As the status of women critic, I know particularly the devastating impact that the changes to OAS will have on many women, for whom OAS is an income they are dependent on at a time when many of them face a situation of poverty. We are looking at that and the way in which the government is standing by and allowing corporations to pull out of Canada, pulling away from agreements they have made with Canadians.

I think of Vale in my hometown of Thompson. It committed to the federal government to increase employment. However, instead of creating jobs, it is pulling out the value-added jobs in our community, and the government has done nothing to stop it.

I think of Hamilton where the workers at Stelco, now U.S. Steel, were dealt the blow when their jobs were shipped away from Canada. The government went as far as to take U.S. Steel to court and then withdrew the case even though it had grounds to keep going.

That is the way the government treats Canadians who are simply contributing to our economy, raising families and building communities. Many of them are investing in a pension system that the government is seeking to take away.

On a host of measures, the government has stood by while jobs have been shipped out. It has taken direct action to attack our pension systems. It has gone so far as to say, actually a misnomer, that somehow our pension system, whether it is CPP or OAS, suffers from instability. This is something that researcher after researcher has indicated is simply not the case. In fact, the Parliamentary Budget Officer stated the very same thing on numerous occasions. Yet the government fails to accept the research, fails to accept the proof and instead further exposes Canadians to greater vulnerability, to a future where poverty and impoverishment at a senior age is a reality.

Perhaps the saddest of impacts will be on my generation, a generation that is just a few years into the workplace, if people have been able to find a decent job, many of whom are unable to invest in a proper pension system and simply do not have the supports to do so.

Instead of having a government that will stand by and seek to strengthen our public pension system, a universal pension system that supports all Canadians, it is standing by and making life more difficult for future generations, for seniors of today, for people who are looking at their retirement and hoping to see a government that is going to stand up for them. Unfortunately, that is not what we have in the Conservative government.

I am proud to be part of a party, the NDP, that has always been at the forefront of fighting for true retirement security and dignity for all Canadians.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I would like to thank my colleague for a speech that was up to her usual standards of excellence.

I would like to go back to a comment by a member opposite and give her an opportunity to respond.

He said that he was proud of the fact that the Conservative government is not taking any risks, but the real threat is not an NDP government; the real threat is a government that does nothing to fix the problem. For example, one issue that comes up often when I talk to my constituents is Nortel. In that situation, there were no measures in place to protect what people had saved for their retirement. The government did nothing to punish a corporation that really put people in a difficult position.

My colleague talked about the NDP's proposal for putting an end to that kind of injustice and ensuring people's financial security. Contrary to what the member opposite said, the NDP's agenda is retirement security, not risk-taking.

I would like my colleague to expand further on that idea.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I would like to thank my colleague for his hard work and the issues he raised in his question.

Obviously, the messages the government is sending have nothing to do with the reality of Canada's pension system. Many experts have stated publicly that the public pension system and the supplement are very solid, that they are sustainable and that young Canadians can depend on them for their retirement down the road.

Instead of listening to those experts, the government is trying to feed us its own line, which is not based on evidence or research. That is a fundamentally flawed way to govern in general and certainly for the future of our country.

[Ted Menzies, Conservative, Minister of State (Finance)]

Mr. Speaker, the one thing I found quite surprising in the speech of my colleague was her suggestion that we should increase the guaranteed income supplement to seniors. This is rather troubling, because when we did make the largest increase in two decades to the guaranteed income supplement, she, and all of her party, voted against that.

Has she now changed her mind?

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, if the member across had heard in more detail what I said, the point was about lifting every senior out of poverty. That is exactly what the government did not do. In fact, it continues to not do that every day.

We hear the government's fury and feigned indignation. I would like to see that same kind of energy put toward the ultimate goal of ensuring that seniors live in dignity, and that young people, who are looking ahead to a pretty insecure situation when it comes to retirement down the line, are part of the solution. I would like to see the government seek to eradicate poverty among seniors and all Canadians and truly establish a strong foundation for all Canadians' retirement.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I have indicated in the past that the Liberal Party has acknowledged as a foundation of our pension programs CPP, OAS and GIS, the guaranteed income supplement, and we believe in those programs. We believe they need to be enhanced and protected.

We consider this pool plan to be a very small tool that will assist some Canadians as a complement to their pension programs. I understand even NDP administrations in provincial governments have recognized the value of this as being a small tool. Why would the NDP oppose a small tool that would at least help some to supplement their pensions?