Pooled Registered Pension Plans Act

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

This bill is from the 41st Parliament, 1st session, which ended in September 2013.

Sponsor

Jim Flaherty  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament has also written a full legislative summary of the bill.

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.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-25s:

C-25 (2022) Law Appropriation Act No. 3, 2022-23
C-25 (2021) An Act to amend the Federal-Provincial Fiscal Arrangements Act, to authorize certain payments to be made out of the Consolidated Revenue Fund and to amend another Act
C-25 (2016) Law An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act
C-25 (2014) Law Qalipu Mi'kmaq First Nation Act
C-25 (2010) Nunavut Planning and Project Assessment Act
C-25 (2009) Law Truth in Sentencing Act

Votes

June 12, 2012 Passed That the Bill be now read a third time and do pass.
June 12, 2012 Passed That this question be now put.
June 7, 2012 Passed That, in relation to Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, not more than five further hours shall be allotted to the consideration of the third reading stage of the Bill; and that, at the expiry of the five hours on the consideration of the third reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and, in turn, every question necessary for the disposal of the said stage of the Bill shall be put forthwith and successively, without further debate or amendment.
May 28, 2012 Passed That Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, {as amended}, be concurred in at report stage [with a further amendment/with further amendments] .
May 28, 2012 Failed That Bill C-25, be amended by deleting Clause 1.
Feb. 1, 2012 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.
Jan. 31, 2012 Passed That, in relation to Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, not more than two further sitting days shall be allotted to the consideration at second reading stage of the Bill; and That, 15 minutes before the expiry of the time provided for Government Orders on the second day allotted to the consideration at second reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and, in turn, every question necessary for the disposal of the said stage of the Bill shall be put forthwith and successively, without further debate or amendment.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:30 a.m.

Conservative

Ted Menzies Conservative Macleod, AB

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:30 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, today it is my pleasure to speak to third reading of the pooled registered pension plans legislation in front of the House. This is not my first time speaking to this bill and I am glad it is moving through the House. It could have gone a little faster than it has, but I appreciate this opportunity.

I want to talk a bit about the pension system in Canada to begin with, about the role this pooled registered pension plans act would play within that system and then about the different aspects of the pooled registered pension plan that are important and why I think everybody in the House should support it.

I will first talk about pension plan retirement savings for Canadians overall. There are a number of vehicles that already exist. There are company pensions and, as many of us know, only about 40% of Canadians have a company pension plan that they can rely on and that they and their company pay into. They vary from company to company to what level they are contributing, but that is part of the pension savings program that many working Canadians have.

Of course there is CPP, which I will come back to later in my dissertation this morning. CPP is a pension plan that—

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:30 a.m.

The Deputy Speaker Denise Savoie

Order, please.

There is too much noise in the House. I would ask members to take their conversations to their individual lobbies and allow the hon. member for Burlington the opportunity to speak.

The hon. member for Burlington.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:30 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

Madam Speaker, part of the problem is that we have been dealing with this legislation for so long. If things would move faster around here we could get through this. People tend to talk about other issues because there are other things happening here today. However, this is an important piece.

I am going to come back to the CPP, but it is a program where the employer and the employee pay in, and it goes to a Canadian pension program savings board that looks after the savings that go into that program. It does the investments. It invests in the stock market, which for some reason the opposition members in previous speeches indicated they did not realize. It invests in government bonds and in the stock market. It is a relatively safe investment portfolio. There is always risk in everything one invests in and even during the recession the board's numbers went down, but overall it is a very secure, well-managed program. It is part of the savings program. Of course, one has to be an employee; one has to work to qualify for CPP because it is an investment piece.

A third piece is the registered retirement savings plans, which have been around for about 40 years or so, maybe a little longer. I believe they were introduced in the early 1960s. It is a program that is voluntary, which maybe the Liberal Party will want to talk about a bit. It is a voluntary program and does not have full take-up. Even in my own investment plans, I have not used all of the room available in my RRSP. There is still room for me to invest. However, it is a savings tool. I want to come back to that. It is a savings option. It is a savings tool for people to save for their retirement. There are RRSPs that are a lot more aggressive than others. It depends on one's level of tolerance for risk. That is why the vast majority of people have some sort of financial advice, whether through a bank or through an independent organization, on where they should invest their RRSP money, their savings, to help them in their retirement years.

We have made some changes to the RRSP system to allow for people to invest for longer. Then when people come out of the RRSP it turns into an annuity so they can have an income stream, hopefully, for the rest of their life.

We have also introduced a new savings tool, which is very popular. Even my own 21-year-old daughter has invested in it. It is a tax free savings account, which did not exist before our government took office. It is another savings tool where people can save money for retirement, and for other things, but it is also a retirement option where people save their money and hopefully it grows through the investments they choose for their TFSA. That growth is tax free. There is no tax on the money when they take it out. Therefore, if it is needed in the short term it can be used. A lot of people are considering the TFSA option as part of their retirement plan options.

Of course, there are other savings vehicles, like straight savings and a number of other options that are available to most people. However, there is something missing for many of those who are working, whose employer does not have a registered retirement savings plan that they are involved with or a pension plan. There is nothing for them. If people are self-employed, there is really nothing for them.

Our Minister of State for Finance has done an excellent job of consulting with the provinces and all Canadians on the pension system over the last number of years. In fact, the government is so concerned about the pension system in our country, and the retirement savings and ability of senior Canadians to have a quality of life after retirement, that we have a minister of state for finance, which did not exist before, to deal almost exclusively with the pension issue and seniors issue. This is a worldwide issue, but in the context of Canada we have taken it very seriously and added a cabinet position. This is a position at the table at cabinet to deal specifically with this issue.

The pooled registered pension plan has a number of components. There is a bit of a gap of course in terms of the retirement piece, even though I have listed out all the options that are available. I want to talk about that gap.

One of the pieces is that it is accessible and straightforward, and it is a low-cost option. I will get into why that is important. It allows for individuals who currently do not participate in a pension plan, whether they are self-employed or employees of companies that do not have pension plans, to get involved in a registered pension plan. The key is that It is an opt-out plan and not an opt-in plan. This is very important, and it is different from what has been suggested by other parties.

More people will benefit from its low-cost investment management, which will result in better returns. Whether it is an RRSP or other investments, part of the cost of the investment goes against what one would have in one's retirement. If we can lower the costs, which the pooled registered plan would do, it would mean more money in the pockets of the retirees.

Another very important component is its portability. A pooled registered pension plan is portable. If a person leaves one company to go to another, that person could take the retirement savings in the plan and either move it to a new plan that the new employer has or just keep it in the existing plan. It would be the employee's decision, but it is portable. I have left jobs before, and the money that was invested in my pension plan had to be either put into a locked-in RRSP or taken in cash.

Let us face it: in today's marketplace, my generation and generations after mine are not staying at the same company for 35 or 40 years. We are changing jobs every four or five years. My university friends have all had four or five careers in the 30 years since we graduated from university. I hate to say it, but it has been approximately 30 years, which is hard to be believe. I was only 12 when I graduated.

However, we have all moved, and the portability of this new program is very important. The investment in the funds would be there for those who have invested in it.

There is a company whose management I know very well. I will use it as an example of why this important, and I will start with the automatic enrolment piece.

This company is in the high-tech medical business. It is very high end. There are about 30 employees in the company, and about half of them have a Ph.D. in chemistry. They are highly intellectual, highly skilled individuals.

This company has a group RRSP program. The employer adds a certain percentage—up to 5% or 6%, I think—of whatever the employee puts in the plan. I talked to the owner and asked how it was going. He said that he had all of these highly skilled, highly educated individuals, but only 30% of the 30 people take advantage of the company's money. They are not investing on their own, even though there is an automatic 5% return in that system.

That is an example of what happens across the country in company after company. Canadians often have an opportunity but do not take advantage of it. However, the advantage of the pooled registered pension plan, in my view, is that there is an automatic enrolment.

That means that when people join a company that has taken advantage of the pooled registered pension plan, they have, I think, three months or six months—off the top of my head, I cannot remember the timeframe—to decide not to be part of the program. Otherwise, they are automatically enrolled, which in my view makes a big difference.

We often hear the opposition asking why we do not just increase the CPP role. There is no doubt that the advantage of the CPP is automatic enrolment, but this plan takes the positive aspect of the CPP and adds to it.

There are two fundamental differences between the CPP and this plan. First, as we all know, we can talk to ourselves until we convince ourselves, but we need two-thirds of the provinces with two-thirds of the population to agree to make changes to the CPP. That is the law. We can see if we can change the law, but that is the law that runs the CPP program.

The Minister of State (Finance) has worked very hard at discussing what options are available that the provinces will buy into in terms of changes. The response has been that some provinces are in favour and some are not, so we cannot proceed with CPP changes.

The official opposition has said that we should just change the CPP and have et the employers and employees pay more. Of course it will take 18 to 20 years before anyone sees the benefit of that, but it is an option, and we have discussed that option with the premiers of the provinces. It is just not feasible, because they are not interested. Maybe we should just stand up for it and say so, but we like to take action on this side of the House. We like to make a difference in people's lives.

When the previous leader, who has unfortunately passed away, was at the kitchen table, as he used to say, he was doing things and making things happen for Canadians. This is making things happen for Canadians. Is it the final answer on all the pension requirements for our future generations of seniors? Absolutely not. We are not saying it is the only or the final answer, but it is part of the puzzle and part of the options.

As I listed from the beginning, there are four or five options that exist now. We are adding another one. We are adding an opportunity for Canadians to invest and to save for their future and their retirement. The automatic enrolment is a key element of making sure that in this registered system, Canadians will have to choose not to save for their retirement. In this case, with this plan, we are requiring them to do so. That is why I think there will be a huge take-up on this program.

Even with this program, we can put the legislation into effect for nationally regulated industries, but we need the provinces on board too. We need each province to pass legislation so that they can recognize these pooled registered pension plans for employees at the provincial level, which we have no influence over.

I am hearing that the vast majority of provinces are interested in doing this. They were supportive. Unfortunately, Ontario has now indicated that it is not interested. I do not think it is good for Ontarians if the province takes its ball home because it does not want to play.

I am from Burlington, Ontario, and as a member of the Ontario caucus here, I want to see Ontario take advantage of this plan. It is of no cost to the province. It is an opportunity for the people of Ontario, as it is for every province. I think the province is being very short-sighted by not taking advantage of this plan. Ontario will say that it is not the final solution, and I agree with that. It is not the final solution. It is part of the puzzle of opportunity and options that should be available to all Canadians, regardless of what province they live in.

The portability piece is very key to me. I had asked the minister and his team about that. What if employees are moving around? It is portable. My concern is that if we do not get all of the provinces on board, I do not know what would happen to portability if people move from one province to another. It does not make sense. I want it to be portable, not just within Ontario and not just within federal government-regulated industries, but also through every business, including self-employment businesses.

The self-employed work very hard every day. We all know those individuals in our ridings who are entrepreneurs, who are risk-takers, who are out trying to make a living and trying to better themselves, their livelihood, their family's livelihood and their community. There is nothing more satisfying than when a local entrepreneur is involved in community events.

They have not had the same opportunities in the past to save for their retirement. Often they hope that their business is their retirement plan. Perhaps they own the real estate that their business is on, but they hope to have some value in it so that they can sell it at the end of the day and retire, or else pass it on to their children or whomever they wish to.

Normally there is a cash-flow system that will help them with their retirement, but here is another opportunity for them. It will encourage entrepreneurship and self-employment and encourage people to create jobs and wealth in this country, and they will have an opportunity to save for their retirement. They themselves can sign up as individuals for the pooled registered pension plan.

With the concept of low cost, the issue is that just as in anything else we do, the greater we spread the risk and have economies of scale, in normal circumstances the less the cost will be for individuals to take part. It is a simple concept that works. No matter what it is, it works. It is a simple concept, and that is what these pooled registered plans would do.

There would be regulations about how much whoever is administering the plan would be able to charge, whether a bank or an insurance company. We would have some control over that level, so we would ensure it would be affordable. We have a large variety of people who have said positive things about this plan.

We had an amendment at report stage yesterday that would have gutted the bill. The New Democratic Party, the official opposition, voted against it. I just do not understand.

I can understand the opposition's argument that this is not the final answer—absolutely, we are not denying that—but why is the NDP denying Canadians an opportunity for another tool in the toolbox for their retirement? I can understand that the NDP members would like to see other things happen or that they have other suggestions. However, they had an amendment that would have gutted the bill completely. I do not understand denying the opportunity. The majority of provinces are on board and the majority of businesses are on board. I can go over quotes of different individuals and organizations saying that this is an important piece.

We need to provide the tools for savings. In our view, part of people's retirement planning is their individual responsibility. I do not think the majority of people in this country are interested in having the government completely control their retirement plan. There needs to be opportunity. It looks like I—

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:50 a.m.

The Deputy Speaker Denise Savoie

Order, please. Questions and comments. The hon. member for La Pointe-de-l'Île.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:50 a.m.

NDP

Ève Péclet NDP La Pointe-de-l'Île, QC

Madam Speaker, as the hon. member knows, a better plan, although similar to the one being discussed here today, has already been tested in Australia. Australian institutions realized that, after 10 years, the plan was producing results that showed that it had very high fees and costs, but gave rather low returns on investments.

Given that the Australian plan was mandatory and the one before us today would be voluntary, can the government provide any assurances that this will really work?

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:50 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

Madam Speaker, I appreciate the question from the member opposite. What we have done differently from the Australian plan is we have regulations about the administration and the costs that are involved with the plan.

Is it voluntary? It is voluntary for the organization to sign up to start the program, but the voluntary aspect of this plan is that one has to opt out. One does not opt in. When ABC company is started and it has a pooled registered plan, one comes in and is signed up for it. Employees have to tell the company that they are not interested in saving for retirement through this program.

We have looked at other programs around the world, including Australia. The indication was that the member believed the Australian plan was better. If so, why were there no amendments from the NDP to try to improve the plan rather than gut it? I do not understand how that works for Canadians.

In my view, this plan has the safeguards on the administrative side, and the opt-out issue will help Canadians save for retirement.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:50 a.m.

Liberal

Sean Casey Liberal Charlottetown, PE

Madam Speaker, just last week I held a town hall in my riding on the subject of pensions and old age security. When the various options facing the country with respect to pension reform were presented, a lot of people in the room nodded their heads when one person said that this was all well and good, but he did not have money to set aside in this economy. He said that what was happening with old age security was not going to help him much.

The question I have for the member, however, relates to a comment he made with respect to the enhancement of the Canada pension plan. The provincial treasurer in Prince Edward Island has been one of the champions in bringing finance ministers together to enhance the Canada pension plan. What I heard the hon. member say was that the CPP could not be enhanced because of some resistance from the province, which is the exact opposite of what I have been told in my conversations with the finance minister in Prince Edward Island. He says that the reason for not going forward with enhancements to the CPP is a flip-flop on the part of the federal government.

Would the hon. member be able to enlighten me on his version of what is happening with regard to why are not going forward with this enhancement to the CPP, which makes a whole lot more sense than what is being put at the top of the priority list by the government?

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:55 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

Madam Speaker, I am happy to enlighten my colleague from the Liberal Party. What I actually said, and what is the actual truth, which he needs to know, is that we need two-thirds of the provinces with two-thirds of the population. I agree that P.E.I. has been in favour of changes to the CPP. The population of the whole province is the same as that in my riding. P.E.I. is part of a group, a federation. As he should know, we are in a federation of provinces. It is not just P.E.I. and Canada.

What has happened is that other provinces, which I will not name, have been public about it and have told the minister that they are not in favour of changes to the CPP program. Therefore, we have no choice. It is not a flip-flop by the federal government. It has been on the table at the first ministers meetings and at the finance ministers meetings. I am talking about pensions, which have been on the agenda at every one of these meetings. The answer from some of the provinces with huge populations is that they are not interested in changes because they think their business communities will not be supportive of that change.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:55 a.m.

Macleod Alberta

Conservative

Ted Menzies ConservativeMinister of State (Finance)

Madam Speaker, I want to acknowledge the member for Burlington for all his hard work and his in-depth understanding of our retirement system. Indeed, we have focused a lot on it because we know the challenges that Canadians have faced. This has been reiterated in the report recently on the increasing number of seniors and the challenges they face.

To clarify one point, when companies enrol individuals, the employees have 60 days to opt out.

Referring to the previous question, there was unanimous support among all provincial finance ministers to pursue a framework for a pooled registered pension plan. Therefore, the hon. member for Burlington was exactly correct in his answer that there was not unanimous support for expansion of CPP.

The hon. member for Burlington mentioned one business. Could he reflect on some of the other businesses that have looked at this as an opportunity to help their employees?

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 11:55 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, my riding is not all of Burlington. The Minister of Labour also represents a part of my city. In my city the largest employer employs just under 1,000 people. It has a pension plan. The city of Burlington has a pension plan.

Other than that, of the small and medium-sized businesses that make up the vast majority of my riding, most do not have pension plans. This is an opportunity for all those entrepreneurs, job-creators and people who are looking for new employees. A pooled registered pension plan would be an employee attraction opportunity so employers could gain and retain good quality employees for future generations.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / noon

NDP

Denis Blanchette NDP Louis-Hébert, QC

Mr. Speaker, I listened with interest to the speech given by my colleague from Burlington.

This bill is an admission of weakness in the sense that the premise is that since people cannot change their pension plans, the Conservatives are merely falling back on something else, something smaller, for a small group.

It seems to me that a government needs to show some leadership. If it is going to set out on a crusade, it must do so confidently and convincingly. I am sure that if the government had decided to try to convince the provinces that improving public pension plans was the way to go, it would have had the unanimous consent of the House.

So is this bill not an admission of weakness?

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / noon

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, absolutely not. The bill is an opportunity for small and medium-sized businesses that do not have the capacity or the level of risk needed to have company pension plans. It is an opportunity for entrepreneurs and small and medium-sized businesses.

We operate under the rule of law in our country. For any changes to CPP, we need an agreement of two-thirds of the provinces with two-thirds of the population. We do not have that agreement. We are looking at other available opportunities and options. This is a good one. All provinces have agreed, initially, that this framework is the right approach to take. This is not an admission of weakness; it is an admission of doing something for Canadians, which the opposition does not seem to want to do.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / noon

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Mr. Speaker, it is very important to continue in this debate because there is a real divergence of opinion, which has a great deal to do with the fact that the proposed pooled registered pension plan would do nothing to solve Canada's pension crisis.

The pension crisis has been the subject of debate for the past several years. The issue is that more than 11 million Canadian workers do not have a workplace pension plan and the public pension plans, old age security and the Canada pension plan that everyone has, do not provide enough for people to live on in retirement. Even worse, the plan by the current government is to increase the age of retirement for OAS and seriously undermine the ability of workers who live with disabilities, or workers who have very stressful jobs to retire at an age that would allow them to have some quality of life in their senior years.

To make matters worse, most Canadians are not making up for their lack of a pension plan by saving for retirement on their own. Less than one-third of the people entitled to contribute to RRSPs actually do so. There is now more than $600 billion in unused RRSP contribution room, all of that being carried forward. Only about one-third of Canadian households are currently saving at levels that would generate sufficient income to cover their non-discretionary expenses in their retirement.

It also needs to be noted that the market is not a reliable place in which to gamble retirement security. Turmoil in financial markets has had, and will continue to have, a devastating impact on workplace pension plans. People who have saved for retirement through RRSPs have found all too often that the value of their investments has dropped so much that they are now faced with having to postpone their retirement or to struggle to replace retirement savings by attempting to find some kind of work.

The reality is, however, that finding employment at ages 66, 67, 68 is profoundly difficult. The workplace has changed and the skills that retirees once brought to the job are no longer marketable.

There is indeed a pension crisis, but this bill seems to have been simply thrown together hastily, in response to pressure from labour, seniors groups, political parties, notably the NDP, as a result of a national campaign to increase the CPP-QPP. There was no thought, just a knee-jerk response.

According to the Conference Board of Canada, 1.6 million seniors live in poverty in Canada and 12 million Canadians lack a workplace pension plan. Statistics Canada tells us more than 14% of senior women on their own are living in poverty, according to standard LICO measurement.

The sensible NDP proposal to increase the GIS enough to eliminate poverty among seniors would take care of this issue. Unfortunately the government is not interested.

By OECD standards, Canada's CPP-QPP system is relatively miserly. We are not terribly generous at all. Other countries similar to Canada provide much more generous public and guaranteed pensions. For example, social security in the United States has a maximum benefit of about $30,000 a year. The maximum benefit in Canada is less, at $12,000 a year.

Even if we add old age security to that, and that would be a maximum of just under $7,000 a year, the total is still far below social security and places seniors in that poverty range of which I spoke.

As I indicated, most Canadian workers have no RRSP because they cannot afford it. Last year, only 31% of eligible Canadians contributed to their RRSPs and unused RRSP room is now about $600 billion, according to the Canadian Centre for Policy Alternatives.

Meanwhile, the latest numbers for the return on the CPP investment show that it barely lost ground, less than 1% during this current downturn in the economy, while the stock market, which is where the government wants Canadians to park most of their retirement savings in this pooled private plan, fell by 11%. That is significant.

The Australian experiment has been mentioned. Australia tried about 10 years ago to introduce a similar plan and had less than encouraging results. The Australian plan was mandatory with an opt-out provision. It was called the Australian superfund and it required employers to enrol their workers in one of many defined contribution plans offered by the private sector.

A recent review of the Australian superfund was commissioned by the Australian government after 12 years of experience. The review shows that, while people were saving as a result of the mandatory contributions, the investment returns were no better than inflation. The report attributed the poor results to high fees and costs despite the presumed role that competition was supposed to play in keeping these fees at a reasonable level. I will speak to that again in regard to the pooled registered plan.

There has been for several years a clear consensus among many experts that real pension reform was, and continues to be, critical. However, rather than intelligently and positively engaging in practical reform, the government has instead introduced its pooled registered pension plan, which, according to the federal Minister of Finance, is this incredible panacea. He said that it would make low-cost, private sector pension plans accessible to millions of Canadians who have, up to now, not had access to such plans.

The legislation introduced in mid-November would allow employers to offer PRPPs to their employees. The scheme would be run by insurance companies and other financial institutions. According to the minister, they would pool the savings of workers whose employers sign up for the program. The financial institutions would run these programs on behalf of employers and, of course, will charge a fee for doing that. Employers would not need to contribute to the plan and workers' savings would be locked in, although if employees provide notice in writing they. apparently. would be allowed to opt-out.

No pension would be guaranteed by this program. In effect, it is yet another voluntary savings scheme that would do nothing to address the pension crisis since very few people take advantage of existing voluntary retirement savings schemes now. It is not clear why officials are claiming that the proposed PRPPs will prove more attractive than anything that currently exists.

So far, the only advantage being promoted for PRPPs is that management fees would apparently be lower than individual RRSPs because of the pooling. There would be no cap on the management fee and therefore no guarantee of lower fees, nor is there any certainty that this would be a big selling point for the plans.

It is also worth noting that there is no evidence that people are not saving through RRSPs because of high management fees. It is far more likely that they are not saving because individuals are busy raising families, paying bills, trying to manage the cost of housing and trying to educate their kids. There is no money left at the end of the month for an RRSP.

As I said, there are no guarantees for lower fees. The PRPP is not a defined benefit plan. It would not provide a secure retirement income with a set replacement rate of pre-retirement income and it would not be fully transferable. The plan would not be indexed to inflation and it would not increase with the increasing cost of living.

Employers, not employees, would decide the contribution levels. As I indicated, it would not be mandatory for employers to contribute or even match employees' contributions. Without employers' contributions, it is not really a pension plan. In fact, employers who do not help their employees save for retirement could end up with a competitive advantage over employers who do.

Canada does not need yet another voluntary tax-assisted retirement savings program. It needs public pensions that provide all Canadians with a basic guarantee of adequate income that will protect their standard of living in retirement.

Expanding the Canada pension plan would meet this objective. In fact, federal and provincial finance ministers seemed set to take this route when they assembled for their meeting in Alberta in December 2010. Only one province opted out. That gives us our 66%. Despite the fact that only one province opted out, the federal government decided to abandon talks and introduce this pooled registered pension plan scheme instead.

Improving the replacement rate of the CPP retirement benefit would provide much better retirement pensions to virtually all Canadians. A relatively modest increase in contribution rates would be required but that could be phased in over a period of time, as the Canadian Labour Congress and others have proposed. The CPP covers all workers, including those who are self-employed, and its benefits would be guaranteed in relation to earnings and years of service. They would be indexed for inflation and fully portable from one job to another.

This option would address the two key issues in the pension system that are currently causing concern: the lack of coverage of workplace pension plans and the fact that individuals are not saving for their retirement by themselves. As well, an expanded CPP, of course, could reduce federal expenditures on GIS because more people would have adequate retirement incomes. It would also benefit employers because it would be a clear pension plan and they need not be concerned about a private plan. It is a public plan and it has a lot of true and clear benefits.

While the government says that CPP contribution rates cannot be increased when there is a fragile economy, it is worth noting that when the financing of CPP was changed at the end of the 1990s, combined employer-employee CPP contribution rates nearly doubled, from 5.6% of covered earnings to 9.9% over that five year period, but unemployment fell from 9.6% to 7.6%. So there are other side benefits.

It should also be noted that PRPPs will do nothing to help the baby boom generation now coming up to retirement. It seems that this lost generation will remain lost as far as pension reform is concerned. As I said previously, it has been estimated that roughly one-third of Canadians now in the age group of 45 to 64 are likely to end up with incomes that fall far short of adequate minimum incomes and the kind of income that would allow them to maintain their standard of living in retirement. The adequacy of CPP benefits has been an issue for more than 30 years. It is time now for federal and provincial governments to set aside ideology and work together to solve the problem.

The study by the pension expert for the Canadian Centre for Policy Alternatives, Monica Townson, provides a thorough analysis of the PRPP and argues that expanding the Canada pension plan would provide better retirement pensions for virtually all Canadians. Ms. Townsend found that the expansion of the CPP would provide a mandatory defined benefit pension to virtually all Canadians, giving them a basic retirement income that, for modest and middle-income earners, would preserve their standard of living in retirement.

The government's PRPP proposal does not do this, not at all. It does not guarantee a pension, the benefits would depend on selection of investment and stock market performance and participation would depend on the employer deciding to take part. As I indicated before, the stock market took an 11% hit in the most recent economic downturn. People cannot afford an 11% economic hit.

The pooled registered pension plan is basically a defined contribution pension plan. In defined contribution plans, there are no guarantees as to how much money will be left when people retire. The risks are borne entirely by the individual employees. In these types of plans, the amount of money available at retirement depends on the outcome of investment in the stock market and people cannot rely on it. I have indicated that very clearly. Defined contribution plans lack the security of defined benefit pension plans, like CPP and QPP, which pay guaranteed set amounts on retirement. This is important to remember.

Bill C-25 places no caps on administration fees. It merely assumes lower costs will emerge through competition. Financial institutions, like banks, insurance companies and trust companies, stand to profit substantially from these fees. If we look at all those recommending this pooled registered pension plan, it is those with a vested interest, like financial institutions.

However, expanding the CPP-QPP would not cost the government any more than its proposed PRPP. Most important, expanding CPP-QPP would not entail transferring huge management fees to private financial institutions.

How can I get through to the government that seniors need to be protected? The PRPP would not help families drowning in debt. It fails because it is a voluntary defined contribution plan run by wealthy institutions. With a tenuous economy and high rates of unemployment, families do not need more risk. They need the stability of the CPP and QPP. Economists and provincial leaders have said so for years, but the out of touch government has turned its back on families. We need effective and fair pension reform.

We have validators for this. An editorial in the Calgary Herald of November 2010 stated:

The CPP already covers almost all Canadian workers and thus spreads the risk and management fees. It is fully portable, offers guaranteed income to all retirees, and is the only risk-free investment broadly available to workers. Private RRSPs and employer pension plans have proven much riskier than initially billed. Those who are in company pension plans are likely in a defined contribution scheme, where the amount that goes in is predetermined, but the payout is based on how well the fund is invested and ultimately performs. Nortel workers know only too well how that worked.

We know that Nortel employees in Canada have taken a beating because of the bankruptcy of Nortel. Many of those retirees are receiving a pension that is 40% less than they planned on and believed would be available. Anyone who was a disabled Nortel worker has lost all benefits. It is interesting to note, and the House should note it, that in the United States and Great Britain, when Nortel sold off its assets, there were billions of dollars in liquid assets. The Americans and the British protected their Nortel workers but in Canada there was nothing. Our government did not see fit to protect those pensioners. That is why it is so very important that we come up with a remedy that works.

Seniors have worked hard all their lives and have played by the rules. Now they simply want access to programs and services that their hard-earned tax dollars helped to make. Every senior in Canada has the absolute right to pension and income security. This bill would not provide the pension security that seniors today want and need, nor would it help them in preparing for their retirement.

It is time for real pension reform, not this sham perpetrated by the government. Bill C-25 would not accomplish any kind of security. Canadians do not need any more private voluntary savings schemes. They want real action to ensure they can retire in dignity.

I will say this one last time. Expanding the CPP and QPP would not cost the government any more than its proposed pooled registered pension plan. It would simply mean that there would be real retirement security. People deserve that. They have earned it.

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May 29th, 2012 / 12:20 p.m.

Nepean—Carleton Ontario

Conservative

Pierre Poilievre ConservativeParliamentary Secretary to the Minister of Transport

Mr. Speaker, the hon. members says that stock markets are too risky for the retirement savings of Canadian people. She proposes as an alternative the Canada pension plan. How does she square those two statements when the Canada pension plan is overwhelmingly invested in the stock market?

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 12:20 p.m.

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Mr. Speaker, as everyone in this House knows, the board of CPP is very responsive and responsible. The costs of investing amount to about 4% of fees, whereas the RRSP system is about 40% management fees on money saved over a 40-year period.

As I indicated very clearly in my remarks, the CPP in this very difficult economic time experienced a 1% reduction in monetary assets. The stock market had an 11% decline. When we start to compare, people in this country cannot afford to take a hit of 11% on their savings. It is as simple as that.

The pooled registered pension plan guarantees nothing.

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May 29th, 2012 / 12:20 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, I have been working for some time with my hon. colleague on issues of pensions and seniors. I applaud her comments and her interest in these issues.

In her experience in dealing with the need for pension reform in Canada, what percentage of people across this country does the member think would benefit from this proposed answer from the government as to what pension reform is? We did not hear how it was a failure in Australia. How many people does the member think would take advantage of this plan?

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 12:20 p.m.

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Mr. Speaker, it is hard to say. Only about 30% of Canadians are able to set aside any money in personal private plans. Only about 30% of Canadians have any kind of workplace pension. My guess is that will not improve. What the government is offering is another private vehicle. It would be optional for employers to make contributions. The employer would have to set it up. If the employer were not interested, nothing would happen.

It makes far more sense to look at the CPP, because it is absolutely solid and it guarantees the workers of this country a substantive and reasonable retirement. We need to improve it, most certainly. I have been very clear about that. We cannot continue to let 70% of Canadians fall by the wayside.

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May 29th, 2012 / 12:25 p.m.

NDP

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

Mr. Speaker, I believe that we are at a historic crossroads, particularly with Canadian Pacific, whose retirement funds are back up for negotiation.

These people have worked for a certain number of years for the company and they have many years of experience. Despite that, they are losing their pension fund and have to renegotiate it.

I would like to congratulate the member on her excellent speech and ask her to explain what she would do to ensure a secure retirement fund for these people so that they can retire comfortably after working for a company for 35 years.

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May 29th, 2012 / 12:25 p.m.

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Mr. Speaker, my colleague has provided me with an opportunity to talk about legislation that has been proposed by New Democrats over a number of years. Basically it would be pension protection legislation. It would also protect workers in the case of bankruptcy or a company moving. We have seen a lot of companies, particularly in my riding, moving away and causing real disruption to families. This NDP bill would provide three levels of protection. It would provide vacation pay, it would provide pension protection, and it would ensure that if a company moved, there would be something there. We need to have that in place.

In addition, it would be possible to set up an insurance plan where various pension contributors would make a small contribution and provide insurance so that when a plan went bust there would be this savings for Canadians.

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May 29th, 2012 / 12:25 p.m.

NDP

Jean Rousseau NDP Compton—Stanstead, QC

Mr. Speaker, I would like to congratulate my colleague on her excellent speech.

She began by talking briefly about poverty among seniors. I would like her to expand on the fact that, for the past 35 years, workers throughout the industrialized world have been fighting for adequate pension plans, not just private pension plans but, most importantly, public ones. The government is dealing with an imaginary problem not with the real ones: poverty and job creation. What the government should be doing is creating a strong social fabric to enable communities to reach their full potential. This is about older people who want to continue contributing to society, but do not have an opportunity to do so. Can my colleague comment on that?

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May 29th, 2012 / 12:25 p.m.

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Mr. Speaker, there is a great deal in that question. It reminds me that an estimated 1.3 million seniors in this country live below the poverty line. They do not have an adequate amount to sustain themselves, whether it be for prescriptions, housing or food on the table. That is not acceptable. This is an incredibly wealthy country. We have resources that are the envy of the world. We should most definitely be looking after our seniors.

I think a very valid point was made. Seniors tend to spend all of their earnings in their community and local neighbourhood. They are looking after themselves and occasionally perhaps doing a little shopping for their grandchildren. If they had adequate incomes, and they deserve adequate incomes, they would be generating jobs and stimulating their local economy.

It is interesting and tragic that government members have spoken about seniors as being a drag on the economy. They keep talking about the deficit in terms of the seniors of the future. Seniors are contributors. They are not a drag on our economy or on our community. They are important members and they deserve to be treated in that respectful way.

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May 29th, 2012 / 12:30 p.m.

NDP

Denis Blanchette NDP Louis-Hébert, QC

Mr. Speaker, I would like to thank my colleague for her speech.

In an earlier question for a government member, I said that this bill is the government's admission of weakness with respect to the pension plan problem. I would like her to comment on that.

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May 29th, 2012 / 12:30 p.m.

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Mr. Speaker, I am reminded of the hysteria that loomed about 30 or 35 years ago. I was just a child, but I do recall the hysteria that the CPP would not be there for my generation and that it was going to evaporate. We all had to run out to buy RRSPs if we did not want to live in penury.

Well, the reality is that the CPP is absolutely solid and it will remain solid for the foreseeable future. Estimates have it remaining solid for the next 75 years at least. We need to make sure that it has the proper investment so that it can continue well beyond that time.

The same is true regarding old age security. We have heard from the former actuary of OAS who has said that OAS is absolutely rock solid for the next 30 to 35 years. We do not have to worry about future generations. We have heard from the Parliamentary Budget Officer who has said that the cost of OAS is about 2.3% of GDP now, it would climb to about 3.3% in the next 20 years and then decline rapidly, but we can still afford it. We have also heard from the OECD. It said that Canada is blessed in terms of retirement security. We simply have to make sure that we do what is necessary now to secure it. This pooled registered pension plan scheme is not that.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 12:30 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, I am pleased to have a chance to speak to Bill C-25, its inadequacies and the concerns that many of us continue to have here on this side of the House.

I have often referred to Bill C-25 as being nothing more than bread crumbs to a starving person because in reality that is all it is. I doubt very much that it would help very many Canadians. From everything I am hearing from the provinces and from other people who have looked into the issue, there would be big management fees and little help for people when it comes to serious pension reform. It would simply be a mechanism for those who have money to save for their own retirement. The government tries to call that its answer to pension reform. I am sure we will hear its solution to pension reform was PRPPs for the next five years or so, until it realizes that as Australia's plan failed, so would this one. While I have no difficulties with creating savings vehicles for Canadians, we must also work to help those without the means to save. That is what pension reform is really all about. Bill C-25 is not pension reform. Anyone who makes that claim is misleading the public.

Two years ago, I asked the government what it planned to do to protect and preserve pensions for all Canadians. The minister responded in this House by saying that pensions were provincial and should be left to provincial legislatures to deal with. He said pensions were not a federal problem. However, Canadians rightly found that notion to be wrong, short-sighted and clearly unacceptable. The Conservatives produced Bill C-25 which is a copy of an Australian proposal that, after 12 years, has been declared a failure. The government was sent into a scramble. It had to find something to satisfy the accusations that it was not doing anything so it came up with this idea.

I will cast my vote, as will my party, with very deep concern and caution because it is nothing more than bread crumbs to a starving person. However, it is that small tool in a toolbox. It is not the answer but we will support it because it is one small step in the advancement of talking and recognizing the need for pension reform in Canada.

In 1998, when the current Prime Minister was campaigning, he announced that he wanted to privatize the Canada pension plan. That is right, the Conservatives proposed the elimination of the public Canada pension plan. Just imagine where we would be today. Not only is the government talking about moving from age 65 to 67 in this current budget bill, and is clearly moving in that direction, imagine where Canadians would find themselves if we did not have the Canada pension plan or it had been privatized. All of a sudden their retirement plans would severely change.

Who knows if that is not the next shoe to drop in the big plans that the government has? Will the Conservatives decide they are going to privatize the CPP? I am not fear mongering, but who knows what is going to be next on the agenda of the government?

At the time, the government suggested that the CPP should be replaced with a super savings account that would allow Canadians to put all of their extra money into investments for their retirement. The government did not talk about the fact that most Canadians are not up to speed on how to invest in the stock market, that they can make poor choices and that their alternative would be to pay high management fees to people who have that expertise. This would be another way of discouraging Canadians from what they are trying to do. Canadians would have to become market experts. Their employer would be playing no administrative role in PRPPs. Canadians would have to bear 100% of that investment risk. A single market stumble could spell the end of any retirement hopes. We all know what happened with the investments a few years ago when the stock market crashed, and what happened to thousands of Canadians whose retirement income was lost.

The Conservatives talk about people working later. They are going to have to work later because they lost a tremendous amount of their retirement income. They do not have the expertise needed. They would need the expertise with PRPPs, to be able to manage a certain degree of their investments. Employers would be forced to create administrative systems to enrol members. If the provinces made them mandatory, and that is highly unlikely, Ontario, the province I represent, has already indicated it is not going to have anything to do with PRPPs. It does not believe this is the answer to the pension issue.

The proposal for an enhancement of the Canada pension plan, which is what we have been proposing, along with the supplementary Canada pension plan, which I will talk about a little further, are much more reasonable methods for most Canadians out there.

This PRPP will be of no help to homemakers unless they are contributing to employment income. One of the challenges facing many women today is that, when they are at home caring for children or elderly relatives, parents and so on, they are out of the workforce. When they are out of the workforce, they have a much more difficult time thinking about their pension and what will be in it for them. That is why unless they are in the workforce for 35 or 40 years, most women at 65, or 67 as the government is going to, end up with minimal income. They are living on $11,000 or $12,000. That is not the Canada I want to live in, and I do not think it is the Canada most people want to live in. Changing that age to 67 years old will certainly hurt a tremendous amount of people.

I had a meeting in Kemptville last night. There were about 60 or 70 people. When I asked the people there, who were a non-partisan group, to raise their hand if they supported moving the age of retirement from 65 to 67, everyone in that room opposed the change, and there were many Conservatives in that room. They did not feel it was necessary, but that it was part of an ideology of the government or because the Conservatives are starving the government for revenue sources by removing the GST and lowering taxes. The government only has so much money. That is probably the real reason: they are starving the beast we call the government. They will not have the money to give people pensions at age 65, so they want to move it up and take $30,000 out of the pocket of every Canadian over that two-year period of time.

As I indicated, the management fees are a big problem on PRPPs. We know that Canada has an F rating, according to the OECD. It says Canadians already pay some of the highest management fees in the world on their mutual funds. That is exactly where we are going with PRPPs, creating more vehicles for people to be able to do this.

However, the government knows all of this. We raised all these issues at committee. Our Liberal finance critic moved a couple of amendments that would have strengthened and improved the PRPP, which went nowhere. The Conservative members put their heads in the sand and voted down the amendments rather than possibly thinking that maybe together, because we were prepared to work with the government on this, we could strengthen it and make it better, recognizing that we need some pension reform. However, the government members do not care what everybody else offers. If it is not their idea, it is not good enough.

It is the same if we talk about some of the things in the budget. Look at the changes to EI and what impact they will have on Canadians all across the land. Never mind talking about where they are putting money into pensions. Many of these people will be forced to move away from their families to go out west, which is clearly where the jobs will be, starving other parts of Canada. Again, that is not the way we are supposed to be going. Canada needs to be a land where everybody is treated fairly and with a bit of respect and understanding.

What happens to the seasonal workers who are being brought into the country? Many of those seasonal workers are the reason we have a thriving industry when it comes to fruits, vegetables and so on. Canadian employers need those temporary foreign workers to come over and be able to do those jobs. We should not kid ourselves. There are lots of Canadians who physically do not want to do those jobs. I think they are quite happy to see these temporary foreign workers come over and work for six months in the agriculture industry or other industries and then go back to their home countries with some very much needed money, because many of these people are coming from countries that are very poor. Will we deny them that opportunity, again with short-sightedness and some of those issues that are in the budget, in Bill C-38, that we will continue to deal with over these next few days that will hurt many Canadians and employers? It will hurt Canadians if that is the only work they have. It is not as if they do not want to work 12 months or 10 months of the year. They are seasonal workers. Who will be working the fisheries?

I remember the amount of people who told me they would love to work longer but the season is only so long, when I visited the east coast last year with one of my colleagues. Where are they supposed to go at the end of that particular point? They have to collect EI because they have no other options.

Some of the changes at second reading, which the Liberal caucus said it would have liked to put forward, were raised by many witnesses as additional ideas. However, when it comes to voting at the committee level, government members vote down anything anybody else suggests, no matter how good it is. The Liberal finance critic put a very good amendment forward on the issue of controlling high management fees, because that is a major concern for Liberals, one that would cap the management fees. There was a bit of discussion with government members, but it did not matter. They voted it down as they do everything else because it was not their idea.

Reducing government spending is a laudable goal, as we hear from the government. However, financial players offering PRPPs will need to offer annuities so that 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 keep regulatory capital aside to underwrite those contracts. In simple language, this means that investors, the average Canadians the government is talking about, are legally required to pay fees that would guarantee a profit for the banks and insurance companies. This is a very inefficient way of delivering pensions, and once Canadians find out about all the small print, fewer and fewer of them and businesses will be interested in getting involved in all of this.

Those requirements are the cornerstones of the PRPP we are talking about. With this in mind, I am left to wonder how the PRPPs could possibly yield any results for Canadian pensioners. The simple answer is that they are not going to help the average Canadian prepare for retirement, just as millions of Canadians have not been able to max out their RRSPs either. It is just a locked-in RRSP. That is what the PRPP is. Forcing seniors 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 new megaprisons and $40 billion for untendered stealth fighter jet deals is not a plan for pensions. However, the government is certainly spending a lot of money and clearly it is looking to pay for all of these on the backs of Canada's seniors.

PRPPs will not work for those who need them the most. Instead of copying the failed work of others, why did the Prime Minister not seek to lift seniors out of poverty? The 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 need it, while delivering the low overhead cost structure of the Canada pension plan.

The supplementary Canada pension plan is a simple and cost-effective solution to the pension question. It is a defined benefit pension for everyone who has a social insurance number, even those who have left the workforce during their lives for child rearing, illness, seasonal employment 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.

The supplementary Canada pension plan is a plan for real pension reform, and I offer it to the government at any time because it would benefit Canadians all across the board, no matter what their occupation. Even if they are home and not able to work, they could still contribute to the Canada pension plan. I could contribute to the supplementary plan. However, by steadfastly following their PRPP plan, by ignoring Liberal calls to improve the CPP, moving to slash the old age pension, slashing EI, cutting people off, making it difficult for farmers to be able to employ temporary foreign workers and all that goes with it, the Conservatives are really showing their true colours. Balancing the budget on the backs of seniors is nothing short of waging a war on the poor. It is unacceptable, and the government should be ashamed of that direction.

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

Let me tell members about a woman named Mary, whom I met last night. She is a single woman who talked to me about income splitting. Yes, the income splitting idea is a good idea for all those who have money and who have a partner, but for single men or women who do not have anyone to share their pension income with, what help is it to them? Mary has to take the hit for the taxes that others get to save. She asked me why the government would do that when it is clearly unfair. I said she would just have to look around and judge for herself. Government is all about choices.

As a government, one makes choices every day and decides what is important and what is not. Clearly, this government's choices are far more interested in helping the rich and much less interested in helping the low-income or middle class Canadians, or in helping to build the Canada, Mr. Speaker, that you and I believe in.

The Prime Minister is the same man who said that the Canada pension plan should be scrapped in 1998, which I referred to earlier, and that government involvement in the financial security of Canadians runs counter to the Conservative ideology of fending for oneself. If one cannot fend for oneself, there is no room in the Conservatives' Canada.

That is very different from the Canada I want to live in. I believe we have an opportunity for a hand up, not a hand out. We can create an atmosphere where Canadians can thrive and do well. Canadians are a very independent, tough bunch of people. We are used to standing on our own feet, and we take great pride in that. I do not believe there are a whole lot of Canadians who are interested in living off the purse of the government.

Given the fact that the Prime Minister has made the kind of comments he has made, I have to wonder if these changes are not the first bricks in the long-desired firewall that the Prime Minister indicated he wanted to create.

I am very glad to have had the opportunity to speak for a bit today. The changes that are coming forward, both in Bill C-25, the PRPP legislation, and in Bill C-38, and all the things the government is moving are going in this direction, which is not an area to which I think we should be going.

We need to be making some changes as well to the Bankruptcy Act. We all know about Nortel and what happened to the thousands of people who were working for Nortel and in other companies that go bankrupt where individuals lose their pension funds.

There is no change. With all of the multitude of things in the omnibus Bill C-38, there is nothing in there about how to protect people's pensions when it comes to bankruptcy, how to better protect Canadians. It is all about creating crisis management and making people think that the country is in a major crisis situation when it is not, whether or not we are talking about immigration issues and creating a crisis, in order to justify the means at the end.

It is unacceptable for us and it is unacceptable for Canadians.

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May 29th, 2012 / 12:50 p.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

Mr. Speaker, I thank my hon. friend for her speech on the pension issue. She has been very involved in the question of pensions for a long time.

I stand with the members of the opposition parties in general in believing that the CPP is our best and most reliable pension system and that it must be expanded. I am concerned about this new approach, because it is discretionary. It appears to create the greatest benefit for those people who buy and sell investment services.

I would like to ask my hon. friend what can be done and whether we can put forward perhaps a private member's bill from this side of the House to ensure that we protect the pensions that are held in firms that go into bankruptcy. For such plans as that of Nortel or Catalyst Paper and others, can we make those secured creditors in bankruptcy?

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May 29th, 2012 / 12:50 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, we had many discussions and actually asked many questions of the government on this side of the House in that whole debacle with Nortel, calling on the government to make the kind of changes to the Bankruptcy Act that would eliminate the contribution holiday. The government did take some action on that part of the file, requiring a larger amount of surplus before they could take a contribution holiday, but there is much more to be done when we come to this whole issue of protecting individuals' pensions.

We all believe that, when we put money into a pension fund, it is sacrosanct. Certainly, we Liberals believe it has to be protected 100%. We have to realize people are counting on that money to be there, and if a company goes bankrupt and leaves them as Nortel did, many have nowhere to go.

We have examined many different options. The Province of Ontario has a fund, as does the U.S., which backs up to $1,000 per month some of the pensions of companies that go bankrupt, but that is under huge pressure and it is not necessarily the best answer either.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 12:50 p.m.

Conservative

David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON

Mr. Speaker, I want to ask the hon. member a question regarding how she feels seniors are being treated now after six years of successive increases in the personal exemption, which helps seniors; an increase in the age exemption, which helps seniors; the enrichment of GIS greater than it has been in the past 25 years, which directly helps seniors and low income seniors as well; the tax-free savings account, which will help future seniors and has been heralded by many economists and accountants as being the biggest step since the RRSP; and pension splitting for seniors as well.

These are successive innovations toward helping seniors have a better quality of life after they have retired. Now we are adding the pooled pension plan. This will be one more tool for them to have the best years of their life after they retire. Would the hon. member not agree with that?

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May 29th, 2012 / 12:50 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, the government has clearly made some moves. TFSAs were a recommendation in the red book under Paul Martin when he was the minister of finance. TFSAs were recommended as a good savings vehicle. I did not say there was anything wrong with that.

I referred earlier to income splitting. The government has done a lot of things to help people who have a lot of money. What happens to those people who are living on $11,000? There was a bit of an increase to the GIS but was it enough?

Why was the decision made to increase the age to 67? That clearly takes $15,000 a year out of the pockets of every Canadian. The government could have done lots of things rather than change the age to 67. It could have used the clawback amount. If someone is earning $60,000, does that person still need $540 a month in OAS, or would it be better to look at the whole system?

There is a bigger issue. The government should have consulted with Canadians on the future plans of our social security safety net to find out what we could all do to better improve the lives of Canadians rather than deny Canadians and make them wait an extra two years.

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May 29th, 2012 / 12:50 p.m.

NDP

Chris Charlton NDP Hamilton Mountain, ON

Mr. Speaker, I have listened with great interest to the debate and more particularly the recent exchange between the member for Ancaster—Dundas—Flamborough—Westdale and that member. I find it interesting that they are congratulating each other or wanting to take credit for the tax-free savings account, which to me misses the boat entirely for the vast majority of seniors.

If a person could only put $5,000 into a TFSA that makes 2% interest right now, that person would get $100 a year in interest. Because it is tax-free that individual would save $30. That would be $1 a month for seniors, which would buy them exactly nothing.

What we really need is a serious debate about doubling the CPP, about ensuring that we do not lose our defined benefit pension plans to defined contribution plans. Above all, we need to lift seniors out of poverty by increasing the GIS.

Could the member comment on which of those three things she would make the number one priority in the next Liberal red book, or pink book, or whatever iteration we will see next?

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May 29th, 2012 / 12:55 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, as soon as we have the book ready, I will ensure she gets the first copy.

The government is expected to talk about a variety of different issues and how it can better help Canadians. That is what Canadians expect us to do. They do not expect us to be partisan all of the time. We are supposed to do what is in the best interests of Canadians throughout the country. I do not want to see seniors continuing to live in poverty. We know that at least 300,000 seniors live in poverty.

Let me remind everyone that it was Mackenzie King, Lester Pearson and Pierre Trudeau who brought in everything from OAS to GIS to the spouses allowance. None of those programs were ever brought in by the Conservatives. All of them were brought in by Liberal governments because we saw how many people were living in poverty. The Conservative government is clearly going in the opposite direction.

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May 29th, 2012 / 12:55 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, I always appreciate my colleague's passion and caring attitude when it comes to dealing with seniors in Canada. I appreciate her comments with respect to why the House should deal with the issue of pensions, whether it is the GIS, OAS or CPP. These are good solid programs that are the cornerstone of our pensions going forward.

With regard to the budget, the member knows that the government has increased the age of retirement from 65 to 67. She has spoken a great deal on this issue. Maybe she could provide comment on what responses she has received. Many of our colleagues in the House, particularly those on the opposition benches, have stood up on virtually a daily basis to bring forward petitions on this issue. Canadians are quite upset with this element of pensions. This bill is all about that.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 12:55 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, I want to repeat an issue. I was at a meeting in rural Ontario last night. Of the 50 to 60 people who were in that room, probably 40% of them were in their sixties or maybe in their seventies and the rest were much younger.

When I asked them whether they supported or rejected the idea of moving the age for old age security from 65 to 67, every person in that room was opposed to that issue. I think they all recognized that if the average age of retirement today was 62, we would be moving backward to increase it to age 67. At one time, we did have it at age 67. That is when a previous Liberal prime minister, recognizing there was a severe amount of poverty among seniors, moved the eligibility from 67 years of age to 65 years of age and started to introduce other programs in addition to the OAS.

The current government is going in the exact opposite direction, back to where we were years ago, with seniors having to suffer in poverty, alone.

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May 29th, 2012 / 12:55 p.m.

Calgary Southeast Alberta

Conservative

Jason Kenney ConservativeMinister of Citizenship

Mr. Speaker, the member does herself a great discredit and undermines her own arguments and credibility with some of the demagogic and over-the-top rhetoric she uses to characterize the motives of the government, saying that it does not care about low-income people, that it only wants to help those who are wealthy and so forth.

Would the member not agree with the objective, incontrovertible fact, that the Government of Canada is currently spending more on transfers to seniors than it ever has in the history of the Dominion? We are spending more on transfers on CPP, more in transfers on OAS, more in transfers for GIS, more per capita for seniors than ever in our history.

If it is her view that this is inadequate, then what does that say about the government of which she was a member? If this government is too parsimonious with respect to transfers to seniors, then what was her government doing when it was spending less on these programs?

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May 29th, 2012 / 1 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, we have an aging population. Every year we have an increased amount of seniors collecting OAS and GIS. Next year there will be even more money spent on OAS, GIS and so on, because of that aging seniors population. All we have to do is look at the numbers five years ago and look at the numbers today. It is not a difficult thing.

To suggest that some of us are exaggerating things, we are actually taking lessons from those folks across the hall.

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May 29th, 2012 / 1 p.m.

Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, I am pleased to have this opportunity to speak to some of the key measures in Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts.

I will splitting my time with the member for Richmond Hill.

First, I would like to thank the Minister of State for Finance, the member of Parliament from the great riding of Macleod, for bringing forth this great legislation.

Our government understands that working Canadians and seniors want an effective and sustainable retirement income system that will help them achieve their retirement goals. Canadians who have worked hard, saved diligently and are relying on their pension and savings to support them once they retire should have full confidence that the system will serve them well when they need it.

Canadians can rest assured that our government stands with hard-working Canadians who are counting on their pension plan for a stable retirement. As part of this commitment, we continue to take the steps necessary to ensure that Canada's pension framework remains strong. In doing so, we are building on all that has been accomplished so far.

Let me offer a few examples of what we have achieved.

In particular, since 2006, our government has increased the age credit amount by $1,000 in 2006 and by another $1,000 in 2009. We have doubled the maximum amount of income eligible for the pension income credit to $2,000.

We have introduced pension income splitting. This single item was lobbied for very diligently for years by organizations like CARP and other organizations that represented seniors. It was well received when this came in.

We have increased the age limit for maturing pensions and registered retirement savings plans to 71 from 69 years of age.

Despite these advancements, there is always more to be done. That is why in December 2009, our government held a meeting with the provincial and territorial finance ministers in Whitehorse to discuss the retirement income system and, in going forward, how this system could be further improved.

In June 2010, federal, provincial and territorial governments reviewed options to improve Canada's retirement income system after extensive consultations with Canadians. Many of the members of the opposition will be interested to know that among these proposals was a modest expansion to the CPP, the Canada pension plan.

However, many employers, especially small and medium-sized businesses, something my riding has hundreds of, raised serious concerns about increasing the mandatory deductions that would come with an expanded CPP. Simply put, during these times of economic uncertainty and with Canada's economic recovery still fragile, it would have been reckless to impose a job-killing tax on job-creators.

While there were strong objections to expanding the CPP, there was unanimous agreement to moving forward with pooled registered pension plans. This led to priority being given to the PRPP framework, the announcement of the initiative at the subsequent finance ministers' meeting in December 2010 and the legislation that is before us today.

PRPPs mark a significant step forward in advancing our retirement income agenda by improving the range of retirement savings options available to Canadians. They will make well-regulated, low-cost private sector pension plans accessible to millions of Canadians who have up to now not had access to such plans. In fact, many employees of small and medium-sized businesses and self-employed workers will also now have access to a private pension plan for the very first time. This is groundbreaking. This will be a key improvement to Canada's retirement income system.

PRPPs will also complement and support our government's overarching objective of creating and sustaining jobs, growth and long-term prosperity. Quite simply, the PRPP framework is the most effective and targeted way to help these modest and middle-income individuals save for their retirement. These individuals consist of the 60% of Canadians who do not have access to employer-sponsored pension plans.

PRPPs address this gap in the retirement system by first providing a new, accessible, straightforward and administratively low-cost retirement option for employers to offer their employees. It would allow individuals who currently may not participate in a pension plan, such as the self-employed and employees of companies that do not offer a pension plan, to make use of this new option. It would enable more people to benefit from the lower investment management costs that result from membership in a large pooled pension plan. It would allow for the portability of benefits and facilitate an easy transfer between plans, and it would ensure that funds are invested in the best interests of plan members.

These are all important areas where the retirement income system can be improved. However, members need not take my word for it. Let us hear what others have to say.

According to the Canadian Bankers Association:

PRPPs will provide a new, accessible, large-scale and low-cost pension option to employers, employees and the self-employed. PRPPs will give all working Canadians the benefit of professionally-managed pension plans, and will be particularly beneficial to the self-employed and employees of small businesses.

I can speak to that as someone who was a self-employed farmer before I came to this House. My only pension at that time was my land, or whatever I could accumulate over the years. It was the same with my parents. There are hundreds of thousands of Canadians in the same boat, and they are going to get a chance to benefit from this great initiative.

The Canadian Federation of Independent Business says:

PRPPs can give many businesses, individuals and the self-employed additional retirement options, and many millions of Canadians who currently lack adequate retirement savings will benefit.

That is why our government, in coordination with the provincial and territorial governments, is working to implement PRPPs as soon as possible. These plans would help Canadians, including the self-employed, meet their retirement objectives by providing access to a new low-cost accessible pension option.

I am sure that all the provinces will take the advice of the CFIB, the Canadian Chamber of Commerce and the CBA when they jointly said that the longer governments take to establish a system of PRPPs, the less time those employees will have to use this vehicle to save for their retirement. Simply put, we need to act now.

Bringing the federal PRPP framework into force means Canadians can be confident about the long-term viability of their retirement system. We are listening, and we will continue to listen to their views on how we can strengthen the security of pension plan benefits and ensure that the framework is balanced and appropriate for the long term.

Canada's retirement income system is recognized around the world by such experts as the Organisation for Economic Co-operation and Development, or OECD, as a model that succeeds in reducing poverty among Canadian seniors. With Bill C-25, we are making it better by working toward a permanent long-term solution to encourage greater pension coverage among Canadians.

I know that members on this side of the House will support Bill C-25 and vote to establish a pension plan that would help millions of Canadians save for their retirement. I encourage all the members of the opposition to support this very important bill and to vote to help the seniors of tomorrow provide for their retirement today.

I remind all members that a lot of legislation, whether government legislation or private members' bills, comes before this House. Not all of us in this place like every aspect of every bill, but the potential of Bill C-25 to help people plan their retirement is something that is certainly needed and has been wanted for a long time. I think that all members in this House should look at the quality parts of the bill. It is an improvement to what we have today, and I think it will be very well received out there among seniors.

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May 29th, 2012 / 1:10 p.m.

Liberal

Sean Casey Liberal Charlottetown, PE

Mr. Speaker, I was interested in my colleague's comments respecting the degree of opposition to the enhancement of the Canada pension plan. I have three questions for him in connection with his characterization of the apparent opposition to the enhancement of the CPP.

One, is the most vociferous opponent to the enhancement of the plan the Government of Canada? Two, is that a reversal of its earlier position? Three, who are the others?

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May 29th, 2012 / 1:10 p.m.

Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, when it comes to adding any new restrictions or taxes on small and medium-sized businesses, which are predominant in my riding and I think in most ridings across this country, these are entities that feed families and create jobs and economic activity in this country. This government is the only party in this House that supports them by not adding on those taxes.

The member across the way belongs to a party that has never seen a tax it did not like. This government is philosophically opposed to that idea. We have reduced over 140 taxes in our six years here, and we are not done yet.

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May 29th, 2012 / 1:10 p.m.

NDP

Ève Péclet NDP La Pointe-de-l'Île, QC

Mr. Speaker, a number of spokespeople came to talk about the Canadian system and about the fact that there are already a number of private savings plans on the market right now. Yet, it is no secret that the government is in the process of creating a new private savings plan when such plans already exist and are underused. Most Canadians do not contribute to such plans.

Why create a new plan instead of investing in providing information to Canadians about the existing systems? Why not improve the existing systems instead of creating another one when we do not even know what effects it will have on Canada's private savings plan market?

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May 29th, 2012 / 1:10 p.m.

Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, my hon. colleague across the way is basically asking why we would act on something that hundreds of thousands of seniors across this country have been asking for.

This government cares about the seniors of this country, and that is why we are doing this. The territories and provinces realize the importance of it. We sat down with those provinces and territories to come up with a solution; this was a consensus, and here today we have that culminated in Bill C-25.

We listened to them, and I suggest that the member should listen to her seniors as well.

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May 29th, 2012 / 1:10 p.m.

Conservative

Brad Butt Conservative Mississauga—Streetsville, ON

Mr. Speaker, I thank my colleague from Bruce—Grey—Owen Sound. He very articulately explained the benefits.

What I like best about the new pooled registered pension plan, and I would like the member to comment on it, is the flexibility it would have for workers and employers to participate. We know what is happening with the workforce. We know there is fluidity. We know that people are not staying at one job for 30 years any longer, but are moving around. This is one of those pension scheme systems that would allow employees to have a pension that would be portable to wherever they choose to work.

Would the member comment on that and share some anecdotes about how it would specifically help businesses and residents in Owen Sound?

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May 29th, 2012 / 1:15 p.m.

Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, I would like to thank the member for Mississauga—Streetsville. The constituents of that riding are very fortunate to have him as their representative here in Ottawa.

In regard to some of the examples that he has about how it would help Owen Sound, it would help the same types of businesses and individuals in his riding of Mississauga—Streetsville. I talked about the self-employed, for example. I was in agriculture, but there are all kinds of small business owners across this country who do not have a pension plan they can contribute to; in the same way that the employees of those small businesses could contribute, those small business owners would also get a chance.

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May 29th, 2012 / 1:15 p.m.

Conservative

Costas Menegakis Conservative Richmond Hill, ON

Mr. Speaker, let me just take a moment to thank the hon. member for Bruce—Grey—Owen Sound for sharing his time with me. The good people of Bruce—Grey—Owen Sound are fortunate to have such a passionate and hard-working member of Parliament speaking here in the House on their behalf.

I am pleased to have this opportunity to highlight some of the key measures in Bill C-25, an act that implements the federal framework for pooled registered pension plans, or PRPPs, as I will refer to them.

Our Conservative government understands that hard-working Canadians want an effective and sustainable retirement income system in place to help them achieve their retirement goals. On this side of the House, we believe that Canadian seniors, after working hard, contributing to society and saving diligently, deserve nothing less. Members can rest assured that our Conservative government stands with these hard-working Canadians and that it will continue to take action to ensure that Canada's retirement income system remains among the strongest in the world. This is where pooled registered pension plans fit in.

The PRPP will mark a significant step forward in advancing our retirement income system by improving the range of retirement savings options available to Canadians. It will make low-cost, broad-based private sector pension plans accessible to the millions of Canadians who up to now have not had access to such plans. In fact, it is important to note that currently 60% of Canadians do not have access to a workplace pension plan. Self-employed individuals do not have access to workplace pension plans at all. Introducing pooled registered pension plans means that many employees of small and medium-sized businesses, as well as self-employed workers, will finally have access to a workplace pension plan for the very first time in their lives.

Let us take a look and see what features of the PRPPs might be found attractive by employees of small and medium-sized businesses and by the self-employed.

A key feature of PRPPs is auto-enrolment. This means that if an employer offers a PRPP, employees will be automatically enrolled in a pension plan. This feature is expected to increase participation in PRPPs by promoting retirement savings specifically targeting those disengaged savers.

Once plan members begin contributing to their PRPP, it is important that they use this money for what it was intended: their retirement. After all, the goal of the pooled registered pension plan is to help Canadians save for their own retirement. Unlike the funds in RRSPs, which can be accessed at any time, the funds in a PRPP would be locked in. This provision will help to ensure that plan members will in fact have savings when they retire.

Another key feature is portability. Many employees will appreciate the ability to transfer funds between administrators when they change jobs. Not only will portability benefit employees of the plan; it will also increase competition among PRPP administrators, thereby encouraging lower costs.

This leads me to my next point, and it is a very important one. One of the key benefits of PRPPs is that they will be low cost. By achieving lower costs, pooled registered pension plans will leave more money in the pockets of Canadians when they retire.

Members might ask how this will work. Pooling pension savings means that the costs of administering the pension funds will be spread over a larger group of people. This will enable plan members to benefit from the lower investment management costs that are typically associated with an average mutual fund.

Stakeholders across our nation are excited about the pooled registered pension plans and the prospect that millions of Canadians will now have access to a workplace pension for the very first time.

However, let us not just take my word for it. Let us hear what others have to say.

Dan Kelly, Vice-President of the Canadian Federation of Independent Business, stated, “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”.

If we are not satisfied with that, let us hear what the Ontario Medical Association had to say. It stated, “The creation of pooled registered pension plans...levels the playing field by providing the self-employed, including physicians, with better access to additional savings opportunities that have up until now been unavailable”.

The pool registered pension plan is not some patchwork scheme. It is an important program that would benefit millions of Canadians. Whether people work for or own small businesses, the pooled registered pension plan would be available to them.

What are the next steps? The bill before us today, Bill C-25, the pooled registered pension plans act, represents the federal portion of the PRPP framework, which is a major step forward in making these available to Canadians. Our government has been collaborating closely with the provinces to implement pooled registered pension plans across our country. Once the provinces put in place their PRPP legislation, the legislative and regulatory framework for PRPPs would be up and running, allowing pooled registered pension plan administrators to develop and offer plans to Canadians and their employers.

Canadians want their governments to act on their priorities and deliver results on a timely basis. The PRPP should be no exception. For this reason, I urge all of the provinces to follow the wise advice of the Canadian Chamber of Commerce, the Canadian Federation of Independent Business, and the Canadian Life and Health Insurance Association when they collectively said that the longer governments take to establish a system of pooled registered pension plans, the less time those employees will have to use this vehicle to save for their retirements.

Our government is confident that the provincial side of the framework will soon be in place so that millions of Canadians can reach their retirement objectives. We urge our provincial counterparts to take action and follow the lead of our Conservative government. By bringing the PRPP framework into force, Canadians can be confident about the long-term viability of their retirement system. We are listening and we will continue to listen to their views on how we can strengthen the security of pension plan benefits and ensure the framework is balanced and appropriate for the long term.

Canada's retirement income system is recognized around the world by such experts as the Organisation for Economic Co-operation and Development as a model that succeeds in reducing poverty among Canadian seniors. Our system is the envy of the world. With Bill C-25, we would be making it even better by working toward a permanent, long-term solution to encourage greater pension coverage among Canadians.

Let me summarize this new defined pension plan. It would be available to employers, employees and the self-employed. The PRPP would improve the range of retirement savings options to Canadians in a number of ways. It would provide access to a straightforward retirement savings option for employees at administratively low cost and it would provide people who currently do not participate in a pension plan a retirement savings option. More people would benefit from the lower investment management costs that result from the economies of scale of membership in large pooled pension plans, employees would be able to move their accumulated benefits from job to job and the PRPP would ascertain that funds are invested in the best interests of the plan members.

I urge all members of the House to support this very important bill. At this time, I move:

That this question be now put.

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May 29th, 2012 / 1:25 p.m.

NDP

Mylène Freeman NDP Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, before this debate comes to an end—too quickly in my opinion—I would like to speak a little bit about the fact that, in my riding, retirees from Fraser Papers lost 40% of their pension fund when the parent company declared bankruptcy.

How do the Conservatives think that this will help the Fraser Papers employees who lost 40% of their pension fund after working their entire lives? They had a good retirement fund that belonged to them. Then, all of a sudden, the company declares bankruptcy and all the money vanishes. I spoke to many employees who were about 60 years old and close to retirement.

The NDP is proposing good options that would help to improve Canada's retirement system. For example, the NDP proposed that changes be made to the Bankruptcy and Insolvency Act, a federal law. However, the Conservatives do not understand what is happening on the ground. They are so out of touch that they think their measure will really solve the problem.

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May 29th, 2012 / 1:25 p.m.

Conservative

Costas Menegakis Conservative Richmond Hill, ON

Mr. Speaker, this is a new initiative that would respond to what hundreds of thousands of Canadians across this country have asked. It would assist them along the way.

I would suggest to the hon. member from the New Democratic Party that if she feels as passionately as she spoke about seniors, perhaps she could urge some members in her party to finally vote for something that would benefit seniors rather than vote against every single positive measure that our government has put forward that would benefit seniors in this country from coast to coast to coast.

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May 29th, 2012 / 1:25 p.m.

Liberal

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?

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May 29th, 2012 / 1:25 p.m.

Conservative

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.

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May 29th, 2012 / 1:30 p.m.

NDP

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.

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May 29th, 2012 / 1:35 p.m.

Liberal

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?

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May 29th, 2012 / 1:35 p.m.

NDP

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.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 1:40 p.m.

NDP

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.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 1:40 p.m.

NDP

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.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 1:40 p.m.

Oshawa Ontario

Conservative

Colin Carrie ConservativeParliamentary 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?

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 1:40 p.m.

NDP

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.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 1:40 p.m.

NDP

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.

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May 29th, 2012 / 1:50 p.m.

NDP

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.

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 1:50 p.m.

NDP

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.

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May 29th, 2012 / 1:55 p.m.

Macleod Alberta

Conservative

Ted Menzies ConservativeMinister 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?

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 1:55 p.m.

NDP

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.

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May 29th, 2012 / 1:55 p.m.

Liberal

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?

POOLED REGISTERED PENSION PLANS ACTGovernment Orders

May 29th, 2012 / 1:55 p.m.

NDP

Niki Ashton NDP Churchill, MB

Mr. Speaker, I would ask the member to listen to the speech I put forward and the various points that our caucus, our team, has put forward in the House and ultimately join us in asking the government to stand and present an act on a real retirement security action plan, one that will actually make a difference in the lives of all seniors, that will lift all seniors out of poverty and ensure the next generations of Canadian pensioners will have real pensions to look forward to.

The House resumed from May 29 consideration of the motion that Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, be read the third time and passed, and of the motion that this question be now put.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 12:40 p.m.

Nepean—Carleton Ontario

Conservative

Pierre Poilievre ConservativeParliamentary Secretary to the Minister of Transport

Mr. Speaker, I will be splitting my time with the hon. member for Niagara West—Glanbrook.

I must confess that my plan to lose two inches off my waistline by summer is not going well. Part of the blame rests with a lovely little restaurant in my riding called La Porto A Casa, which has the best tiramisu in Canada. I am prepared to certify that on the floor of this House of Commons. It has, as a business, been a model of a Canadian success story.

Only about four years ago, it opened the restaurant and, within several months, it had to double in size of square footage to accommodate the enormous demand. It now employs 16 people in our community. It has never asked for a government grant or handout, but it pays salaries and wages and provides the citizens of Barrhaven with a wonderful meeting place and a good, solid, authentic Italian dinner or lunch.

The only thing not on the menu, though, is a workplace pension plan. The reason for that is that out of the 16 employees that one would have in a business that size, it does not make financial sense to hire somebody, or a group of people, to administer a pension plan. In fact, there are businesses just like La Porto A Casa, and business owners, just like Ozzie and Caroline, right across this country. They might be small mechanic's shops, landscaping companies, small restaurants or small accounting firms. By themselves, they do not have the economies of scale to provide a workplace pension plan and, as a result, 60% of Canadian employees do not have one.

However, what if people like Ozzie and Caroline from La Porto A Casa, Sonny from Sonny's Manotick Garage and thousands of other small businesses that employ millions of people combined could pool their efforts and provide such a pension program for their employees?

Let us imagine if banks, insurance companies and existing pension plans, like the Ontario teachers' pension fund, could offer such a pooled service to employees of small businesses just like the ones I just finished describing. Such would provide an opportunity for the 60% of Canadians who currently lack a workplace pension fund to buy into one.

That is exactly what the bill before the House proposes to do. They would be called the “pooled registered pension plans”. They would be administratively simple and cost-effective, and they would provide mobility to the workers who travel between small employers on a fairly frequent basis. That would allow these businesses to come together and pool the costs and the risks associated with a pension fund for employees.

This is an excellent opportunity to allow working people to have greater participation in our economy and to set aside money that would be invested for their future. By the way, that money, when invested, is not simply hidden under somebody's bed. In fact, it is invested in other Canadian companies that then use it to hire people, buy machines and grow wealth and prosperity for other workers, creating a virtuous cycle.

The opposition has said that it opposes this idea. It does not believe that small businesses like La Porto A Casa and Sonny's gas station in Manotick should be allowed to pool their resources in order to create a pension fund opportunity for their employees. The reason the opposition does not like the idea is because it says that these funds would be invested in the stock market. That is partly true, but they could also be invested in real estate, bonds or treasury bills.

However, it is true that almost every successful pension fund in the world does invest in the stock market because stock markets grow and it is good when pension funds grow with them. In fact, all of the pension funds that the left of centre opposition claims to support are invested in the stock market. Let us take, for example, the Quebec pension plan, which is the province's equivalent of what we in English Canada call the CPP. It is widely invested in private sector businesses.

One business in which the Quebec pension plan is invested is Canadian Natural Resources Ltd. It is an oil sands company taking 100,000 barrels out of the Alberta oil sands every day. That would make it a perfect target for the NDP. The only problem is that the same oil sands company pays enough dividends into the Quebec pension fund to cover the retirement cheques of 1,100 workers every year. The opposition would raise taxes on that company, impose a carbon tax and raise taxes on profits. The only problem with that is that the same company can only pay benefits to the Quebec pension fund out of its after-tax profits, which means that if taxes go up, the dividends to pension funds go down.

Half of the Canada pension plan is invested in companies just like the one I mentioned already. It is invested in the stock market. Even public pension funds that are administered by government are invested in the private sector stock market. Let us take the defined benefit pension plans of, say, the Canada Post employees. The top five holdings in the Canada Post pension plan are Toronto-Dominion Bank, the Royal Bank of Canada, the Bank of Nova Scotia, Suncor and Canadian Natural Resources Ltd., all banks and oil companies. The twin villains in every left wing storyline are the ones paying dividends into the pension funds of mail delivery workers and other employees of Canada Post who will rely on the profitability of those same businesses for their retirement.

The opposition does not believe that pension funds should be invested in the private sector. In fact, it does not think there should be a private sector at all. It believes in growing government and having government take over every sector of the economy. I will explain what I mean by that. Its leader has said that there is something called Dutch disease; that is to say that there are too many Canadians working in the energy sector and not working elsewhere. However, according to the S&P/TSX composite index of the Canadian Stock Exchange, the energy sector is actually not the biggest. The financial sector is. The problem is that the NDP does not like the financial sector either. One-third of the entire valuation of the TSX includes banks and other financial services sectors. The NDP does not like that one-third. Then we have the energy sector, which makes up one-quarter. The NDP does not like that either. Now, well over half of the value of the publicly-traded economy is in the crosshairs of a prospective NDP government.

The NDP is an opposition party that believes that government should control everything. There is a laboratory for that approach. It is called Greece. In Greece, the government debt is 160% the size of the entire economy. Its debt has now been downgraded to junk status. In Portugal, it is the same thing. Nine other Euro currency countries have also been downgraded. In Washington, where over the last several decades this kind of approach of big public spending has been tried, the government debt is now bigger than the entire U.S. economy and American taxpayers spend more on interest to the People's Republic of China than the People's Republic of China spends on its military.

On this side, we choose the Canadian way, a free market plan to create jobs and enable small businesses to provide opportunities for retirement security to their employees.

Therefore, in the interest of jobs, growth and long-term prosperity, I ask members to support the bill.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 12:50 p.m.

NDP

Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, I would like to thank my colleague for having shared what I would call a completely unrealistic interpretation of reality. It was very entertaining, but alas, totally out of touch with reality. Allow me to explain.

The important thing to understand is that this government bill will force millions of Canadians to invest their savings against their will and take on the full risk of that investment in a series of private funds, without necessarily getting any guarantees about the quality of fund management.

In fact, that is already a problem. I would just like to point out to my colleague that, unfortunately, since the beginning of 2012, all stock exchanges have fallen by an average of 10%.

What does my colleague have to offer new retirees and those retiring in a year or two, other than an extremely high stress level that could end up forcing people to retire later than planned or to go back to work?

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 12:50 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

Mr. Speaker, I must begin by correcting the error in the question. No one will be forced to join. It is a voluntary program. People will decide whether or not this plan works for them.

Furthermore, the member is attacking stock market investments, but all pension funds are invested in the stock market, even public pension funds.

I already mentioned that half of the Canada pension plan is invested in the stock market. There is no successful pension fund in the world that does not invest in the stock market and therefore there is not a single one of them that can survive and succeed unless businesses have strong after-tax profit. These are mathematical realities that one cannot help but see, even with ideological blinders on.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 12:55 p.m.

Liberal

Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, I do not know about that last statement. The member's own pension plan, which he just qualified for, is pretty generous and avoids the markets. Perhaps my colleague would like to comment on that.

When he says that all opposition members are against this sort of concept, the member is overstretching it a bit. On this side of the House, we have said many times that we like the idea of pooled pensions. If we understand the concept of it, we get that. However, if we take it to its logical conclusion, we would go to a supplementary CPP system, which would then be the best investment machinery around for this type of thing.

I believe in what my colleague is saying, about the mobility of it, about the pooling and how if people pooled with others for their pension plan, that would make a greater investment. However, the specific program that the member talks of, which I am not totally against, has not worked in jurisdictions like Australia, which had problems with efficiency from 1997, as it was described.

Would the member not take the concept that he speaks of, the majority of which I agree with, into one of the greatest investment vehicles we have, which would be a supplementary CPP?

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 12:55 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

Mr. Speaker, the member stands and says that he is against the pension plan for members of Parliament, but I presume he is going to accept his unless he is going to announce the contrary today. Then he says that he is in favour of the concept of a pooled registered plan, but will vote against it. The one thing I have to respect about the Liberal Party is its ability to see all sides of every issue, because those members are on all sides of every issue.

On this side of the House, we take a clear stand. We are in favour of empowering small businesses in Canada to provide their employees with a pooled pension plan that would help them prepare for their retirement on a voluntary basis. That is where we stand.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 12:55 p.m.

Conservative

Dean Allison Conservative Niagara West—Glanbrook, ON

Mr. Speaker, I would like to take this opportunity to explain to the House and the people of Canada how our government's new low-cost and accessible pooled registered pension plan will help millions of Canadians save for retirement. More specific, I would like to touch on how pooled pensions will benefit small businesses, which are the backbone of the economy, not only in my riding of Niagara West—Glanbrook but across this great land.

As a former small business owner, I know first hand how difficult it is to save for retirement. There is simply so much else to focus on. Small business owners wear many hats and often the most menial tasks take priority over thinking of retirement or how to save for it. Therefore, by pooling pension plans together, small business owners can pass on the burden of planning for retirement to a qualified and reliable body, freeing them up to focus on improving other aspects of their business, such as improving customer service or, more important, ensuring their survival in the world of free enterprise.

As a small business owner, I was very committed to providing financial assistance to my employees. For my part-timers, I offered thousands of dollars in scholarships. However, for my full-time and my key employees, who had already graduated or were no longer interested in attending university, I had to find other incentives. Unfortunately, pooled pension plans were not available back then, which would have provided me and fellow small business owners the opportunity to provide our employees with a pension package comparable to any large corporation.

I looked for ways to try and incentivize my staff to try and keep them around, because small business is very competitive. The only thing I could come up with was registered retirement savings plans, which were not a bad thing. The challenge was that they were very complicated to set up. As members can imagine, with a small business owner, with only five or six employees, trying to meet with financial investors and setting them up with staff is not always the easiest thing to do. Therefore, as a business owner, I really would have appreciated having something like this to take away some of the burden on me by being able to lock these funds in for employees who would use them at a later point in time.

What I did was set up some registered retirement savings plans wherein I matched some of the dollars that my key employees put in. The challenge was that they were not locked in for pensions. The money could be taken out at any time. The second issue was it was difficult to manage. Members can imagine having 10, 20, 30 or 40 employees all trying to figure out, with a financial adviser, what was happening and trying to make their own decisions when, quite frankly, a pension plan or some kind of professional management would have been helpful. Therefore, from experience, I understand how important a plan like this would be.

Until Bill C-25 is passed, small business owners will continue to worry about the possibility of their employees being attracted to a larger corporation that offers a more attractive pension plan. This is worrisome to small business owners whose employees form the core of their small business, much more so than the case of large corporations. Small businesses of 5, 6 to 10 people cannot afford the costs of employee turnover. When they lose key employees, it hurts in a big way. In this regard, pooled pensions will benefit small business owners by increasing employee dependability, thereby decreasing the time, burden and costs associated with hiring.

Equally beneficial to small business, pooled pensions will allow millions of Canadians access to a workplace pension for the first time in their lives.

Pooled pensions will improve the range of retirement savings options to Canadians by allowing individuals who are not currently participating in a pension plan, such as the self-employed, to make use of this new type of pension plan. Pooled pensions will enable more people to benefit from the lower investment management costs that result from membership in a large pooled pension plan. Further, pooled pensions will allow for people's accumulated benefits to move with them from job to job, all the while ensuring that their funds are invested in the best interests of plan members.

With our baby-boomer generation nearing the age of retirement, coupled with the ongoing global financial crisis, our government has deemed this time appropriate for the development of pooled pensions. The issue of retirement income security is very important to our government. It is for this reason that the joint federal-provincial working group was established in May 2009 to undertake an in-depth examination of retirement income adequacy in Canada.

The working group found that overall the Canadian retirement income system was performing well and providing Canadians with an adequate standard of living upon retirement. However, some Canadian households, especially modest and middle-income households, were living with the risk of not saving enough for retirement.

After over a year of exhaustive research, led by our finance ministers, our government agreed to pursue a framework for pooled registered pension plans.

Pooled pensions are designed to address the lack of low-cost, large-scale retirement savings options available to many Canadians. Many Canadians continue to struggle taking advantage of the savings opportunities offered to them through individual structures like RRSPs. For example, the average Canadian has over $18,000 in unused RRSP room.

In addition, many Canadians can only access a workplace pension plan if their employer offers one. Many employers, especially small and medium-sized businesses, do not want the legal administrative burden of offering a pension plan. As a result, over 60% of Canadians do not have a workplace pension. There is not only the legal issues. The fact remains that it is almost impossible for small businesses to join a pension.

The design features of pooled pensions remove a lot of the traditional barriers that might have kept some employers from offering pension plans to their employees.

The design of these plans would be straightforward to allow for simple enrolment and management. A third-party pooled pension administrator will take on most of the responsibilities that employers bear in the existing pension plans, including the administrative and legal duties associated with administering a pension plan.

Pooled pensions will offer Canadians greater purchasing power, allowing them the opportunity to benefit from greater economies of scale. Achieving lower prices means that Canadians will benefit from greater returns on their savings and put more money in their pockets when they retire. Pooled pensions are intended to be largely harmonized from province to province, which also lowers administrative costs.

Pooled pensions will result in large pooled funds that will enable plan members to benefit from lower investment management cost associated with such funds. The design of these plans will be straightforward and are intended to be largely harmonized across jurisdictions, which would facilitate lower administrative costs.

Pooled pensions will assist Canadians in meeting their retirement savings objectives by providing access to the new low-cost pension option. Through the pooled nature of pooled pension investments and the auto enrolment of employees, it is expected that members will be able to benefit from greater economies of scale and lower costs compared to small, singular employee group RRSPs. Since pooled pensions will be subject to pension standard rules, unlike group RRSPs, the management will be held to a higher standard.

Our government decided not to expand the Canadian pension plan because changes to the CPP would require the agreement of least two-thirds of the provinces with at least two-thirds of the population. Federal, provincial and territorial ministers have discussed a CPP expansion, but there has been no agreement. Our government understands that the fragile economic recovery is not the right time to increase CPP contributions, which would be required if CPP were expanded.

That being said, moving forward on pooled pensions does not preclude future changes to CPP.

Our government continues to improve Canada's retirement income system. Budget 2011 announced a new guaranteed income supplement top-up benefit for our valuable seniors. Seniors with low or no income other than the old age security and the GIS would receive additional annual benefits of up to $600 for single seniors and $840 for couples.

In particular, since 2006, our government has increased the age credit amount by $1,000 in 2006 and by another $1,000 in 2009. We have doubled the maximum amount of income eligible for the pension income credit to $2,000, introduced pension income splitting and increased the age limit for the maturing pensions in registered retirement savings plans to 71 from 69 years of age.

Overall, our government has provided about $2.3 billion in additional annual targeted tax relief to seniors and pensioners through measures such as pension income splitting, increases in the age credit amount and the doubling of the maximum amount of income eligible for the pension income credit.

In addition, budget 2008 introduced a tax-free savings account, which is of particular benefit to seniors because it helps them to meet their ongoing savings needs with a tax efficient way after they are no longer able to contribute to an RRSP.

We have also made several other important improvements to specific retirement income supports. Budget 2008 increased the amount that could be earned before the GIS would be reduced to $3,500, so GIS recipients would be able to keep more of their hard-earned money without any reduction in GIS benefits. Budget 2008 also increased flexibility for seniors and older workers with federally-regulated pension assets that were held in life income funds.

We all win if we make it easier to plan for our future. Pooled pensions would remove the barriers that make it impossible for my business and other small businesses like it to offer the ability to be part of the pension plan for their employees. This is a significant and timeless solution. I am proud of our government for taking steps to provide this opportunity for Canadians.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:05 p.m.

NDP

Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, in my riding, hundreds of Stadacona plant workers have, for the most part, lost $100,000 or more of their pensions as a result of the losses sustained by their private pension fund. This means that their retirement pensions could be cut in half. It is a real tragedy.

I am amazed by the government's failure to consider the risks arising from the proliferation of registered pension plans, given that a large number of them are already experiencing difficulties. The other thing that is absolutely absurd is the refusal to increase contributions to the Canada pension plan on the pretext that it would be too onerous for our workers, businesses and communities. And yet, we will have to find the money to contribute to the registered pension plans.

I will draw a parallel with the mainly private health insurance system in the United States. Private insurance companies now have such high premiums, because of the supposed competition, that even large businesses are finding it impossible to provide health coverage for their workers.

How can my colleague guarantee that Canadian pension funds will not go down the same slippery slope?

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:05 p.m.

Conservative

Dean Allison Conservative Niagara West—Glanbrook, ON

Mr. Speaker, I am not sure where the question was. There was some talk there about health care, large corporations, pensions and mismanagement.

As we look at the bill, Canadians, who normally would not have a chance to contribute to a pension plan because of the size of the companies for which they work, would now have the opportunity to do so. As I said, small businesses are the largest employers around our country. For small businesses that hire six, seven, eight or ten people, it is cost prohibitive to set up any kind of pension plan. This legislation aims to pool pensions so that individuals can not only contribute to a pension plan, where otherwise they could not, but they can also take it with them. It is also locked in so that they would not have access to it until retirement age.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:10 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, for viewers who might be watching and listening to this important issue, we recognize that this is a tool, albeit a rather small tool that might assist a good number of Canadians. However, what we were really hoping to see come from the government was the larger picture. How will we be able to make some of the changes to the CPP, OAS and our guaranteed income supplement? There is an obligation for the federal government to negotiate with the provinces to try to enhance those pension programs, which are the fundamental programs that most, if not all, Canadians are very dependent on.

With regard to this specific legislation, could the member indicate to what degree Ottawa has actually received confirmation from which provinces that are prepared to act on this? Are we talking 50% of the provinces on side or 100% of the provinces on side? Could the member indicate how many provinces are on side with the legislation today?

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:10 p.m.

Conservative

Dean Allison Conservative Niagara West—Glanbrook, ON

Mr. Speaker, I think what the member is talking about here is apples and oranges. There are a couple of different things going on here. We understand that the CPP is still something that is happening. It will continue to go on and there may be further negotiations. However, this would add another suite of products that would give options to small business owners.

When it comes to pension, that is federal and provincial legislation and it is dealt with in a way that we talk about what is required for people to put in. What we are talking about here is setting up something that will add to the suite of services the government has already delivered on. We have introduced pension splitting and tax free savings accounts. This is meant to complement a number of initiatives that we have already looked at in giving employers and employees options to save for their retirement as they move forward.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:10 p.m.

NDP

Pierre Nantel NDP Longueuil—Pierre-Boucher, QC

Mr. Speaker, I will be sharing my time with the hon. member for Esquimalt—Juan de Fuca.

Earlier, some members mentioned the fact that people may be watching us on television. I hope they have something else to do, because today's debate in the House is really going nowhere.

This is yet another bill with a rather confusing title. This bill, I believe, deals with pooled registered pension plans, but it really deals with savings, not pension plans. That makes me think that the people who work for the government legislators and think up the titles must also work for the paint companies like Sico, where long, evocative names are given to very simple things. If one day they brought us a bill proposing to cut down all the trees, they would call it “Prioritizing new species of vegetation.”

This bill does contain good intentions for small employers and small businesses. In itself, that could be praiseworthy, but the reality is different. I was listening to the member opposite talk about his favourite business, saying that it has the best tartufo or tiramisu or cheesecake around; he talked about the muffler repair shop near his house, and all these small businesses. It was wonderful: what a great story. However, I have a tendency to think he was talking about some other local businesses, for example, the local branch of the Royal Bank of Canada, which made a profit of $5.7 billion in the last quarter, the Toronto Dominion Bank, which made a profit of $4.5 billion, or Scotiabank, where the profit was $4.3 billion. I could list a few of those.

We could believe that our colleagues across the aisle are acting in good faith. We could believe that they are listening to the little guys. Unfortunately, experience proves that they have a natural tendency to listen to the big guys, the big corporations, and neglect the little guys quite often. “Unfortunately”—that is a long word that reminds me of a five-letter word: Aveos. We cannot say that the government looks out for the little guy when we see how it behaved in that labour dispute.

When I say little guy, I mean the vast majority of the population. I am talking about people whose jobs do not provide them with very good protection plans.

Usually in society we come up with plans and programs to promote the common good, programs such as the Canada pension plan or the Quebec pension plan. What strikes me is that when it comes to the common good for the little guy, the government just throws something together. Again, it prioritized a solution by throwing something together with its buddies: it says it will do one thing, a good thing, but then it turns around and does another. I keep saying this has to stop.

People are judged on their intentions. The intention of the Conservative government, generally speaking, is always to favour the big corporations. It wants Canada to be a good place to do business, big business. As we speak, it is the little guy who is paying for it and that is sad.

In the past six years, the Conservatives have done absolutely nothing to boost retirement security for Canadians. In every one of their interventions—unfortunately, they often intervene in labour disputes—the thing that ends up on the chopping block is retirement security, the security of the working class. Bill C-25 is just another half measure and that is what they are developing.

Canadians deserve better than that. We will not settle for this. It is not necessarily a problem, but it is not enough. Throwing out a few crumbs in order to move on to something else is not good enough for us.

I think it is also very important to bear in mind that, according to the Canadian Centre for Policy Alternatives, most Canadian workers do not have RRSPs. Why? Because they cannot afford them. Last year, only 31% of eligible Canadians contributed to an RRSP, and unused contribution room exceeds $500 billion. When I was preparing my last tax return, the amount that I could have contributed to an RRSP was huge. I do not think I could contribute that much, even if I wanted to. This example simply illustrates how serious the contribution problem is, even though we have a public program that works very well and guarantees some financial security for everyone. However, this government does not seem to care about everyone equally.

Someone mentioned the fact that the Australians tested the same thing 10 years ago. In the end, that initiative did not work. It did not meet expectations. What does the government want, apart from asking its friends on Bay Street if they feel like investing a few billion dollars in this, just for the fun of it? It is unfortunate, but the Conservatives seem to just do whatever they like. They do not consult anyone. They have no interest in consultation. They go ahead with their own ideas. One might think that they have great ideas, but no, they do not have any strokes of genius. They have not heard the voice of God. They simply came along with their biased opinion that their friends are going to like this.

That is what is happening. They are working for the upper class. This is unfair, because this government was elected by the public, by ordinary people. We are not talking about giving even more crazy tax breaks to the big oil companies or banks; we are talking about protecting ordinary people.

A five-letter word is flashing in my mind: Aveos. I hope that one day, the Conservatives will lie awake at night thinking of that word: Aveos. The people at that company lost everything, but the Conservatives do not care at all. That is unacceptable. How can they even introduce a bill that talks about protecting retirees, when these people were run over by a tractor and were told that it was no big deal, that the bosses were right. That is shameful, but that is a whole other story.

In passing, I would like to mention what a number of journalists think, because we are not the only ones who believe that a public plan would certainly be a better option. For example, the Conference Board of Canada has a disturbing statistic: 1.6 million seniors live in poverty and 12 million Canadians do not have a pension plan. According to the OECD, the Canada Pension Plan and the Régie des rentes du Québec are relatively inadequate and other countries have guarantees and much more generous public pension plans.

In the United States—they like it when we talk about the United States—maximum social security benefits are about $30,000 a year. Here, they are about $12,000 a year. Is that not a nice parallel? Do they not care? It is too bad, but they have erred so much in the past that I simply do not trust them. It is unfortunate, but that is also what the vast majority of Canadians think.

I must stop there, but I encourage my colleagues opposite to preach by example, to show some interest in the common good, an interest in consultation. Then, we would be happy to work with them.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:20 p.m.

Calgary Centre-North Alberta

Conservative

Michelle Rempel ConservativeParliamentary Secretary to the Minister of the Environment

Mr. Speaker, many small employers do not have the ability to offer pension plans because of two key things: the fiduciary responsibility associated with managing a pension plan and the administrative costs. Those are two very burdensome issues that employers would face. The PRPP would give small businesses, which would not otherwise be able to offer a large pension plan or participate in a group RRSP, the tool they need.

If we do not implement this, how would my colleague address the fiduciary responsibility and administrative cost burden?

Small businesses are often at a disadvantage from a recruitment perspective because they cannot offer pension plans. Since the member has signalled that he will not vote for this, how would he rectify the recruitment issue that this legislation would address?

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:20 p.m.

NDP

Pierre Nantel NDP Longueuil—Pierre-Boucher, QC

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

It seems we agree that introducing more tools to improve pensions for small business employees is a good idea. However, the truth is that the Conservatives will not budge on the rest. The simple solution is to enhance our public pension plans, but they seem to be allergic to anything that would require major state intervention when it comes to meeting ordinary people's basic needs.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:20 p.m.

Independent

Bruce Hyer Independent Thunder Bay—Superior North, ON

Mr. Speaker, like the hon. member here, I would really like to see a proper CPP enhanced, brought up to date and modernized to work better.

I find it fascinating that this group across the aisle wants to trust, again, the bankers and the brokers in Bimmers who have caused our problems and encourage Canadians to utilize those pools, many of which already exist, instead of a proper CPP.

My question for the hon. member is, if the members on the other side trade their gold-plated MP pensions for private pooled plans, will he join me in that?

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:20 p.m.

NDP

Pierre Nantel NDP Longueuil—Pierre-Boucher, QC

Mr. Speaker, I would like to thank the independent MP over in the corner. My colleague changed his political stripes.

Once again, it is very clear that the government is not interested in funding pension plans. Earlier, we were told how obvious it is that everyone wants to own stocks.

Sure that is obvious. Of course. Unfortunately, that is how finance is done nowadays, and we saw how that turned out. My colleague was right to point out that, in 2008, those people played with real people's money and savings. I know people who lost 40% of their retirement savings. That means that instead of living for 20 years off their retirement savings, they can live for just 12 years.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:25 p.m.

NDP

Alexandrine Latendresse NDP Louis-Saint-Laurent, QC

Mr. Speaker, I have a question regarding the last comment by my colleague from Longueuil—Pierre-Boucher.

The Conservatives' changes to employment insurance will create a huge machine to monitor all available jobs in Canada and to ensure that there is not one unemployed person. If there is a job available somewhere, the unemployed person will have to take that job.

This measure will be expensive, but they still want to implement it. And yet, the Conservatives are saying that they do not want to make any changes to the current pension system that will improve it.

I would like him to comment on the apparent contradiction between these two positions.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:25 p.m.

NDP

Pierre Nantel NDP Longueuil—Pierre-Boucher, QC

Mr. Speaker, this is the first time I have risen to thank the member sitting next to me. I thank her for the question.

The problem lies strictly with their intention. Their intention is the problem. The Conservatives decided to go to Davos to tell their big buddies that the Conservatives are doing a good job of governing Canada and to come and invest here because the public does not call the shots.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:25 p.m.

NDP

Randall Garrison NDP Esquimalt—Juan de Fuca, BC

Mr. Speaker, I rise today to speak to Bill C-25 at third reading. I am very happy to do so. I know that all members in the House share the common goal of making sure that all Canadians have security in their retirement. However, I am rising to speak against the pooled registered pension plan scheme for many reasons.

One of the reasons is that it would not actually guarantee a pension. As many on my side have pointed out, we should not be calling this a pension plan. Instead, it is a savings scheme. The second reason is that it would put the burden solely on employees and would not require any contribution from employers. It would allow employers to say they are doing something for employees' retirement, but they will pay for it. In that sense, the style of the plan is a bit deceptive.

It would not be indexed to inflation. When we combine that with no cap on administrative fees or costs, it means that the risks would be entirely borne by the employees. Therefore, when it came time for employees to retire, there would be no guarantee that they would even get back payments equally valued to the contributions they made.

How do we know that? We have seen the evidence from the Australian plan, which was put in place more than a decade ago, similar to this, called the Australian super fund. In the study of that plan by the Australian government recently, it showed exactly what I said, that the benefits were only equal to the rate of inflation. In fact, the employees who contributed were simply treading water and not really planning for secure retirement.

I have heard members on the other side ask why on earth I would oppose what is another tool in the tool box for retirement savings. I would first say that I am worried it would become another tool in the tool box of investment planners and banks to make more money for their long-term security instead of making more money for the people who actually contribute to those plans. Their tool box is already full, from my point of view, and there is no need to give them another profit source as I think this plan would obviously do.

Is it a real tool for employees to save for their retirement? It would certainly take money out of their cheques. Most families are struggling as it is just to make ends meet by providing housing, putting food on the table and providing for their kids. The vast majority of employees do not have any spare money to risk in a plan like this. Their money would be much better invested in an expanded Canada pension plan. The Canada pension plan is not a theory or ideology but a proven plan that has shown it has lower costs. Why does it have lower costs? Because it spreads out the administrative costs over the entire population. It is a plan that has lower risk. Why does it have lower risk? Because it spreads the risk across the entire population and provides a defined benefit indexed to inflation.

The CPP has a couple of other benefits that we do not often talk about. One of them is that increasing benefits in the CPP would ultimately reduce costs for government because it would reduce the demand for GIS payments. In other words, if people had been allowed to put money into a plan that would provide them a secure retirement and pay for it themselves, they would not be dependent on welfare at the end of their lives in terms of the GIS. That is no criticism of those who collect GIS. Most Canadians have not had the opportunity of having secure jobs with workplace pension plans that pay enough to provide secure income. The easy way to do that is to expand the Canada pension plan.

This has been on the public agenda since 1996 when the NDP government of British Columbia first put an expanded CPP on the table and tried to convince governments at that time. If it had begun with a slow increase in the contributions made by both workers and employers back in 1996, we would be in a place where the CPP would be providing double the benefits it provides now. We would have made a great dent in the problem of seniors poverty. It is still not too late. The NDP campaigned in the last election to do just that: begin with modest increases in the contributions by workers and employers and, over time, double the benefits that are being paid out by the CPP. Again, workers would be paying for their own secure retirement. It is not a welfare program. There would be no cost to government.

The Canada pension plan along with its parallel, the Quebec pension plan, have been major contributors to helping end poverty among seniors. As I said, it is an earned pension with all the dignity and self-esteem that comes with having provided for one's own retirement.

I would point out they are also very good for small business. We are talking about small businesses that are too small, really, to run their own workplace pension plan, that could not bear those administrative costs, that cannot recruit, as the hon. Parliamentary Secretary to the Minister of the Environment talked about, that cannot recruit employees because they cannot offer the same kind of benefits.

Yet, if the benefits under the Canada pension plan were increased, it would level that recruitment playing field for small businesses, because people would be earning an adequate pension in all jobs across the country.

Originally the CPP was designed, along with the QPP, to be supplemented by private pension plans, so the original plan was never meant to provide the full retirement income. It was thought at the time that workplace pension plans and other schemes would fill the gap to bring Canadians up to an adequate retirement income.

What we have learned is that that has not happened for several reasons. One of those, of course, is that more than 12 million Canadians lack any workplace pension plan of any kind. Even those who do have plans are quite often enrolled in plans which are not portable. We all know the days when people go to work for one company and stay there for 30 years are becoming more and more rare. Even if they had a private pension plan, when they are forced to change jobs, people often have to start over in a new private plan or cash out their benefits at that time.

The second problem with workplace pension plans that we have seen in the last years of economic crisis is that they are not secure. When a company goes bankrupt, unfortunately, those with disability pensions and those with workplace pensions are almost last in that line of creditors.

For that reason, the NDP has proposed, as another way of securing retirement incomes, the bankruptcy laws in this country need to be amended to place disability pensions and retirement pensions at the front of the line of creditors in the case of bankruptcy, so that those who have made contributions themselves would have their pension secured before the other creditors of those bankrupt companies. Unfortunately, we are still waiting for action on that very important point.

The Canadian government, under the Liberals, did recognize that retirement savings were inadequate. The government came up with the registered retirement savings plan to allow people to voluntarily put money into a plan to help supplement the CPP in their retirement. That is a good idea in theory, but the problem with that plan is that because of the high cost of living, the high cost of housing and other difficulties in making ends meet, only 31% of those who are eligible to contribute to RRSPs are actually able to do so. That means that this great solution to fill that gap has not been successful.

More recently the federal government came up with the idea of tax-free savings accounts. Once again, there is an implicit recognition that there is a gap in retirement income for Canadians. So the tax-free savings accounts were set up. Only about 41% of Canadians have established a tax-free savings account. Most of those say that they are not using it to save for retirement.

Most interesting to me, over half of those who have tax-free savings accounts earn more than $100,000 a year in income. They are obviously already able to take care of themselves when it comes to retirement. Most Canadians, obviously, do not earn anywhere near this figure and do not have extra money at the end of every month to put into a tax-free savings account.

The vast majority of Canadians are dependent on the CPP for their own retirement income. When we look at the benefit levels of $12,000 per year, it is clearly not enough. As I mentioned, it was not designed to be enough. It was designed to be supplemented by these other programs which have failed over time to do so.

Now it is time to revamp the CPP and QPP to make sure they provide an adequate retirement income, that we share the risk, that we spread this out over everyone in society, and make sure that everyone is secure in their income.

Clearly there are some other measures that are needed to attack the problem of inadequate retirement income. I mentioned amending the bankruptcy legislation in this country, and I think that is very important.

The NDP also promised that when we are government we will increase the GIS to immediately lift every senior out of poverty at a relatively modest cost.

Why not proceed with the CPP? The government says the provinces are not onside. It requires co-operation to change the CPP and the QPP. As far as I can tell, only one province was really opposed. I have seen no real effort from the federal government to bring the provinces onside to expand the CPP.

In conclusion, I would just like to remind members of the House that all Canadians would benefit from an expansion of the CPP, not just the fortunate few.

It would benefit small business. It would benefit workers changing jobs. In particular, it would benefit those who work hard all their lives in low-wage jobs and are not able to save for their retirement.

I urge the House, rather than create this new plan, which would do nothing to solve the problem, to turn instead to an expansion of the CPP-QPP program.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:35 p.m.

Conservative

Laurie Hawn Conservative Edmonton Centre, AB

Mr. Speaker, I listened with interest to the speech by my colleague across the way. I have a couple of comments to make and then a couple of questions.

First, the TFSA was not necessarily intended for retirement. It was intended for a whole host of things. I would consider 41% uptake to be pretty extraordinary.

The member talked about expanding CPP and QPP. I assume he realizes that would mean more investment in the stock market for those apparently hated things like banks and resource companies. Does he think that the dividends that Royal Bank, for example, is putting into his QPP are a bad thing, when he seems to want more of them?

Early in his remarks he called PRPPs a bad plan because people would be forced to pay for their own retirement. A little later in his comments he said CPP was a good thing because people are paying for their own retirement, with the pride that brings. I am wondering if he could explain that apparent contradiction to me.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:35 p.m.

NDP

Randall Garrison NDP Esquimalt—Juan de Fuca, BC

Mr. Speaker, my point was that being forced to contribute to a pooled pension plan, which is risky and would have no defined pension at the end of it, is the problem. When people contribute to the Canada pension plan, they have a defined benefit and the risks are shared out over society.

I have nothing against the stock market except when the risks are borne by individuals who do not have an adequate income to begin with. Then it is not a good solution for saving for their retirement.

The thing that works is just the thing the member is actually suggesting in the pooled plan. When people pool their resources into a larger plan then it spreads the risk. That is why the CPP is a better way to save for retirement than leaving the risk with individuals or very small pooled plans.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:35 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, we in the Liberal Party agree in essence with regard to the CPP and its benefits. This program has been in place for generations. It was a Liberal Party initiative many years ago that made people realize how important pension plans are for seniors, and that is the reason we established a CPP program.

We would like to see the government demonstrate more leadership on that particular file. The government needs to meet with the provinces and work out a better agreement so that workers today will be able to retire with more money going forward.

I come from a province where there is an NDP administration. That NDP administration talked about the labour crocus fund as a form for retirees to invest in. It promoted the crocus fund. It is quite different from the pooled pension plan that is being proposed, but the concept of seniors using their private money to invest in a venture capital fund was something it saw as a positive thing even though there were management fees and so forth.

Would the federal NDP have opposed a venture fund with tax incentives for seniors to invest in that type of approach? Does it have to be CPP or broke?

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:40 p.m.

NDP

Randall Garrison NDP Esquimalt—Juan de Fuca, BC

Mr. Speaker, I note that the Liberals have 20/20 hindsight and vision back to the things they accomplished many years ago. I just wish they had the same foresight at this time.

In supporting the pooled retirement savings plan, a big mistake is being made in terms of public policy. We are telling people they are going to get something that is not there, something that is not secure, something that will not deliver in the long run.

The member asked if I would support seniors investing in venture capital. Only wealthy seniors can afford to take those kinds of risks. It is called venture capital for a reason. Average people who have worked hard all their lives in an average job cannot afford to risk their retirement on those higher risk ventures. They need something secure that will provide them with a defined benefit to take care of them in their old age, and that is the genius of CPP and QPP. They have shown us success over time. That is the reason I think they are the solution to this problem.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:40 p.m.

Willowdale Ontario

Conservative

Chungsen Leung ConservativeParliamentary Secretary for Multiculturalism

Mr. Speaker, as a former small business owner, I wish to speak in support of the pooled registered pension plan.

In these tough economic times, our Conservative government continues to work hard to create jobs for Canadians. Naturally, one way of doing this is to support job creators. What do I mean by this? I mean supporting small and medium-sized businesses.

I am proud to say that this is one of the great aspects of Bill C-25, an act that would implement the federal framework for pooled registered pension plans.

The bill would remove traditional barriers that might have kept small and medium-sized businesses from offering a pension plan to their employees in the past.

Members may ask what are traditional barriers. One is responsibility. Under the PRPP framework, the fiduciary responsibility related to the management of pension plans would be shifted from the employer to a licensed third-party professional administrator.

The second traditional barrier is the administration of the pension. Under the PRPP framework, the administrative burden of the employer would be reduced. Again, most of this burden would be shifted to a licensed third-party professional administrator.

With these significant barriers removed, employers would be able to offer a workplace pension plan to their employees for the first time. In fact, the business community has already commented on how the reduced administrative burden would be of great benefit. For example, Thomas Lambert, the CEO of Canadian Multicultural Radio said:

The PRPP is just the kind of option we've been searching for. With the savings on the administrative costs we can incentivize our staff towards better retirements savings.

By offering a low-cost and administratively simple pension plan, employers would have a new tool to attract and retain skilled employees. I ask hon. members if they would not like to work for a company that offers a low-cost pension option to its employees, a pension option that aims to leave more money in their pocket when they retire. According to the Canadian Chamber of Commerce, that is exactly what PRPPs would do. It said:

...(PRPPs) would be a great option to attract new talent to our business. A pension plan draws a lot of the skilled people that we need to the larger corporations and this would be a nice edge to add to a great business.

There is even more. The introduction of PRPPs would be of great benefit in the self-employed medical profession. Here is what the Ontario Medical Association had to say:

The creation of pooled registered pension plans (PRPPs) levels the playing field by providing the self-employed, including physicians, with better access to additional savings opportunities that have up until now been unavailable.

Mr. Speaker, I am just reminded that I will be sharing my time with the Parliamentary Secretary to the Minister of Veterans Affairs.

Allow me this opportunity to explain how PRPPs would help these employees and self-employed Canadians achieve their retirement goals.

One of the great features of a PRPP is auto-enrolment. Where an employer offers a PRPP, all employees would be automatically enrolled. Not only would this increase participation, but it would also encourage more Canadians to save for their retirement.

Another great feature is portability. This means that when employees changed jobs, they could take their PRPP with them from job to job.

Another innovative feature of the PRPP is that the contributions by members would be locked in. This would ensure that plan members would have savings when they retired.

I would be remiss if I did not talk about one of the major benefits of the PRPP, and that is its low costs. It is clear that the opposition members do not fully understand this concept. Please allow me a moment to explain its key feature to them.

Essentially, PRPPs would facilitate low cost through their scale and design by achieving certain economies of scale. It does not matter whether a person manages $1 million or $100 million; the effort is the same.

As I mentioned earlier, PRPPs would have a broad-based availability. By pooling all these pension savings, the cost of administering the pension funds would be spread over a larger group of people. This would enable plan members to benefit from the lower investment management costs that are typically associated with the average larger mutual funds.

The low cost feature of PRPPs is something that stakeholders around the country are raving about. I will share with hon. members some of the feedback following our broadly based consultation. According to the Canadian Federation of Independent Business:

A new voluntary, low-cost...retirement savings mechanism will allow more employers, employees, and the self-employed to participate in a pension plan....

The Canadian Taxpayers Federation comments:

Canadians will be able to save more for retirement with this new pension plan. People saving for retirement will enjoy lower costs and more flexibility through their working lives.

Unfortunately, instead of jumping on board with this great incentive, the opposition members would rather expand the Canada pension plan. Clearly, the opposition members are not interested in creating jobs. They are interested in taxing the job creators.

Make no mistake; our Conservative government would never take such a reckless and irresponsible position. Our government understands that the last thing job creators need in a time of global economic uncertainty is another tax hike.

Unlike the opposition, our Conservative government understands it is tax reduction that facilitates the creation of jobs and economic growth. That is why in our economic action plan 2012, our government is committed to extending hiring credits to small and medium-sized businesses for another year.

Do members know what this would mean? This would mean jobs, growth and long-term prosperity. On the economy, our record is clear. Since July 2009, more than 750,000 net new jobs have been created. That is a result Canadians appreciate.

With the passing of Bill C-25, federally regulated workers as well as those in the Northwest Territories, Nunavut and the Yukon would be able to take advantage of PRPPs.

I would hope that every province would pass legislation to implement the PRPP as soon as possible, so that all Canadians would be able to access the low-cost, broad-based pension plan.

The legislation is a win-win for both employers and employees. By introducing the PRPP, we would be strengthening Canada's retirement income system, a system that is viewed around the world with envy.

When it comes to PRPPs, our government is on board, small and medium-sized businesses are on board and, most important, Canadians are on board. The only real question is: Why are the members of the opposition not on board?

I would encourage all members of the House to stand and support the swift passage of Bill C-25. The sooner PRPPs are available, the sooner more Canadians could start saving for their retirement.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:45 p.m.

NDP

Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, I would simply like to consult my colleague on the so-called collective aspect of the pooled registered pension plans.

The only collective aspect I see is a collectivization much like that enforced under Stalin more than 80 years ago, in other words, a general misery shared among those who already have very little means, who have limited wages and who work for small businesses that are not on a very strong footing.

Can my colleague explain the magic formula whereby employees of these small businesses will manage to contribute to this retirement tool the government is proposing without becoming completely impoverished? We know that Canadians currently have $500 billion in unused RRSP contribution room and that this has been the case for a long time. People do not have the means to use these savings vehicles.

Where is the solution? What will this do other than make people poor?

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:50 p.m.

Conservative

Chungsen Leung Conservative Willowdale, ON

Mr. Speaker, let me say that in our society we are quite unlike that of Stalin, unlike a communist state where it is a totally planned economy. We do not have a totally planned economy. We have an economy that allows businesspeople to exercise their entrepreneurial spirit, thereby achieving the best they can for their employees and for the economy in general.

What the member opposite should know is that there are many ways for people to achieve retirement. One way is through their principal residence that they would have built and renovated as they contributed to its mortgage.

Another way is if people are lucky enough to have a company pension plan. That is fine, but if they do not have that, like most small and medium-sized businesses, this is what the pooled registered pension plan would do.

The member mentioned that the RRSP is another tool that only the rich can afford. That is not true. I think what we are doing is giving the employees or the individual businesspeople that option to decide how they want to save their money. Certainly the tax-free savings account is another option we have provided.

There is an array of tools people can use to plan for their own pension.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:50 p.m.

Liberal

Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, I want to remind my colleague across the way that in his speech, basically, he illustrates that all the opposition are against this type of measure, which is not true at all. I certainly do understand why this is in place. The only thing I would say is that it is just a small tool in the shed that we can use. I suggest we should go a little further, given the situation that society finds itself in and the imperative of trying to find stable income in the retirement years.

However, it does not come without some problems. There are other examples around the world; for example, the Australian example. Here is what was written about the program in Australia from 1997. It said:

...total assets in the system have grown substantially through contributions, but net earnings from investments were relatively low. Despite the presumed role of competition, the investment performance of the system continued to be restrained by high fees and costs.

That is from the similar system in Australia. I wonder if my colleague would comment as to how this program would not do that.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:50 p.m.

Conservative

Chungsen Leung Conservative Willowdale, ON

Mr. Speaker, it seems like the member is only focused on Australia. I would suggest that if he were to look at the provident fund of Singapore and some of the pension funds in Japan and Taiwan, he would find that there is exactly that, where they issue an array of products for employees to participate in.

One of the problems with a centralized mega-fund, as is the case with the CPP, is that one is confined by legislation and, therefore, must invest in very conservative investment instruments. When this is opened up to a more open society that reflects the way our changing world economy and financial system is moving, the individual professional investor who can take advantage of tools like derivatives, commodity investments, options and so on, would be in a better position to buy you better growth in your pension plan.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:50 p.m.

The Acting Speaker Barry Devolin

Before resuming debate, I would remind all hon. members to direct their comments and questions to the Chair rather than to their colleagues.

Resuming debate. The hon. Parliamentary Secretary to the Minister of Veterans Affairs.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:50 p.m.

Mississauga—Brampton South Ontario

Conservative

Eve Adams ConservativeParliamentary Secretary to the Minister of Veterans Affairs

Mr. Speaker, I listened to the hon. colleagues across the aisle and the NDP members just do not seem to get it. They continue to advocate for something that is neither feasible nor has the support perceived.

I am talking about their proposal to double the Canada pension plan. There are several problems with this proposal. I will outline them for the NDP and see if it can be convinced once and for all that doubling the CPP is simply not practical.

Any change to the Canada pension plan is subject to a formula specified in the legislation. In case the NDP did not know, I mean the legislation governing the Canada pension plan. The legislation clearly stipulates that the CPP can only be amended by a consensus of two-thirds of the provinces, representing two-thirds of the population.

At the 2010 finance ministers' meeting, a number of provinces had strong objections to expanding CPP benefits. However, the ministers made a unanimous decision. They unanimously decided to set up a framework for pooled registered pensions plans.

Unlike the NDP's proposal, which does not have the support of the provinces, the decision to move forward with pooled registered pensions plans was unanimous. That is not the only problem with the NDP plan. To expand CPP benefits or, in the NDP's case, to double them, we would have to raise contribution rates.

Higher contribution rates would mean higher payroll costs for small and medium-sized businesses and higher premiums for workers and the self-employed. Unlike the NDP, our government remains focused on the economy. This means focusing on job creation and economic growth and Canada's long-term prosperity. Our government does not believe that now is the time to jeopardize Canada's fragile economic recovery by imposing higher costs on job creators.

The House might be interested to hear that many other groups share our government's philosophy that expanding the CPP in these turbulent economic times is the wrong choice.

For example, according to the Canadian Federation of Independent Business, CFIB, for every 1% increase in CPP premiums beyond the current 9.9% tax rate, it would cost 220,000 person years of employment and force wages down roughly 2.5% in the long run. For those who want to double the CPP, they might be interested to know that, according to CFIB calculations, to double CPP benefits would kill 1.2 million person years of employment in the short term.

All these so-called solutions proposed by the NDP would be detrimental to Canada's economic performance. They would result in lower economic growth and lower job creation. This would mean more unemployed Canadians, a sort of the NDP way.

Members can rest assured that our Conservative government will not engage in such a reckless plan. Our government has a strong record of job creation and job growth. In fact, I am pleased to say that, since July 2009, over 750,000 net new jobs have been created in Canada. That is a result that Canadians appreciate and a result that the residents of Mississauga—Brampton South appreciate.

It is important to remember that Bill C-25 represents the federal portion of the PRPP framework. In order to make this available to all Canadians, the provinces must put in place their own PRPP legislation. Once that happens, PRPPs will be a key element to Canada's retirement income system.

However, my constituents may be denied the opportunity to partake in a PRPP. Unfortunately, the McGuinty government has indicated that it may tie the introduction of PRPPs to an expanded CPP. Simply put, such a decision serves only to deny hard-working Ontarians of a low-cost, broad-based workplace pension plan.

Guess what? Many others feel the same way. This is what the Canadian Chamber of Commerce, the Canadian Federation of Independent Business and the Canadian Life and Health Insurance Association think of Mr. McGuinty's plan. In their words:

We do not support the concept that PRPP implementation should be tied to CPP enhancements. Given the time and processes involved in making any changes to CPP, this would only serve to delay an initiative that, in its own right, is viable, innovative and beneficial to Ontarians.

They go on to say:

It is time for Ontario now to step up to ensure that Ontario residents, particularly those who work for small and medium-sized businesses, can reap the benefits of a low-cost, accessible pension plan.

Why is the McGuinty government denying Ontario residents and my neighbours the ability to save for their retirement? Perhaps it is because, like the NDP, it does not understand how PRPPs work.

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:55 p.m.

The Acting Speaker Barry Devolin

The time for government orders has expired. The hon. parliamentary secretary will have four minutes remaining for her speech when this matter returns before the House.

The House resumed from June 4 consideration of the motion that Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, be read the third time and passed.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:20 a.m.

NDP

John Rafferty NDP Thunder Bay—Rainy River, ON

Mr. Speaker, I am pleased to stand today to speak on this bill. Members will remember Bill C-501 in the last Parliament, my bill to protect workers' pensions in case of bankruptcy. Although it was not successful and the parliamentary session ended before there was a chance to pass it into law, I was very pleased to see a number of Conservatives stand to support Bill C-501. As they did, it was very clear to the government in the last Parliament that something needed to be done about pensions.

This is the government's answer to protecting pensions for all Canadians. As this bill does not guarantee an actual pension, it is best to refer to this as a savings scheme. That would be a better term for it. I will not go into detail about how it is set up, but there are some problems with it and I would like to outline some of those today.

This pooled pension or savings plan would be managed at a profit by financial institutions, banks, insurance companies and trust companies, and by the very nature of it, there will be an administrative cost on the money everybody puts into the plan. There is no regulation in this bill to regulate the costs that could be charged, and I guess the government's reasoning is that, by doing that, the costs will remain low because there will be competition among the institutions.

By the way, I will be sharing my time with the member for Brossard—La Prairie.

Unlike other pension plans we have seen in the past, workplace plans and the like, this particular pooled plan would not require matching contributions from employers. That is problematic in itself. I suppose there would be some provincial regulations put in place when the plan is set up on whether employers would have to be part of it, but in the bill right now there is nothing like that.

The first big problem with the pooled savings scheme is that it is not indexed to any kind of inflation. Workers would be putting their money aside for their retirement, which is a good thing, money would be deducted for administrative costs over the course of 20 or 30 years or however long they are putting money into this plan, and they would not have an opportunity to take advantage of inflation.

In addition to that, the other problem is that they are not really protected. Because it is not indexed, people will not be protected from the vagaries of the marketplace. As we have seen in the last couple of years, people who have been saving for most of their working lives and had RRSPs, which are not unlike this particular plan because they are privately managed by institutions, in many cases saw the value of their RRSPs drop by 25% or 30%. People have come to my office in Thunder Bay and talked about a 35% drop in the value of their RRSPs. Therefore, there is no real protection.

I would suggest to the government that there is another much simpler way to help Canadians save for their retirement, with fewer fees, indexed to inflation, and the money will be guaranteed to be there when they retire. In fact, they will have a pretty good idea of how much they will be receiving when they do retire. That is using the best pension plan we have in this country, which is the CPP. We put money into the CPP now and most Canadians are happy to do that. I see the benefits of that every day when people come to my office and ask me to help them apply for their CPP or CPP disability, OAS, GIS and these sorts of things. It is wonderful that we have this in the country.

However, what we could have done, and what we still can do, instead of a savings scheme like this, is we could open up the CPP. We could open up the CPP so that people could contribute to the CPP over the course of their working life, at a higher rate for example, or people who are self-employed could pay into it, or people could pay on behalf of a spouse who might be a stay-at-home mom or dad. They could pay into this scheme over the next 20 or 30 years.

Let us just say for example that people were allowed to pay double the contributions they are making now. If they did that, they would of course reap the benefits of CPP because right now they get out of CPP what they put into it, so it would still work.

What happens is that we reduce all those fees. I understand that the government is interested in having private business involved in pension plans. I understand where it is coming from that on that. What I am suggesting is that is not the best way to go about doing this.

If someone were to double their contributions to CPP, if they were allowed to do that over the course of their working life, and that kind of change is not going to help people like me who are nearing retirement, but let us just think about the people who are in their 20s and working. Not many people in their 20s think about retirement.

CPP would be a wonderful vehicle for them to start planning for their retirement. If they did that now, then 10 years down the road the benefit would be somewhere in the neighbourhood of about $1,900 a month when they retire. If it were a gradual shift, a gradual increase in contribution, let us say doubling over the next 10 years, that is what is would be worth. I think it is actually $1,920.

Imagine younger workers being able, over the next 10 years, to double their contributions. There can be an assumption, I suppose, that people who are working will have their wages increase over that time. They are not going to take a disposable income hit to make that investment.

If people did that, we would not be caught in a situation, as the government seems to think we would be, where OAS would have to be raised to 67 from 65. It thinks a big crisis is coming. We can avoid all of that kind of talk. We can avoid that situation by simply doubling the CPP over the next 10 years and allowing a wider contribution pool for people to get into it.

It is safe. It is secure. The market does not affect it at all to the same extent as private savings plans, RRSPs for example. We would have a very secure fund.

The other reason I like the CPP, and I am talking about that as the alternative to these pooled savings plans, is of course that the government cannot get its hands on it. I think that is critical. It is an important part of the CPP and how it is managed today.

There is a protected pension fund that is guaranteed to be there. People know what they are going to have. It is a defined benefit plan. We have seen what has happened in the past with defined benefit plans. We have seen what happens when organizations like Nortel go bankrupt and people are left out in the cold.

In the pooled plan, I wonder what is going to happen. First of all employers are not required to put any portion into it. It is simply a savings plan, an RRSP-related kind of savings plan, for people to have for their retirement. My understanding from the bill is that it is portable.

If employers are not required to match or make contributions, and I suppose some will, perhaps with some kind of collective agreement, but what happens if that company goes bankrupt? What happens to that employer's contributions? Are they safe and secure? There are some very serious concerns about this.

From 2008, when I introduced—

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:30 a.m.

The Deputy Speaker Denise Savoie

The hon. member's time has elapsed, but he may add some comments in response to questions and comments.

The hon. Parliamentary Secretary to the Minister of Transport, Infrastructure and Communities and for the Federal Economic Development Agency for Southern Ontario.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:30 a.m.

Nepean—Carleton Ontario

Conservative

Pierre Poilievre ConservativeParliamentary Secretary to the Minister of Transport

Madam Speaker, the hon. member talked a lot about the Canada pension plan.

I think we all agree that this is a very well run national plan that helps Canadians prepare for their future. The board has obtained good returns on its investment.

However, in the same sentence as praising the CPP, he went on to suggest that it is not dependent upon the mercurial nature of the stock market.

If we look at the holdings of the Canada pension plan, we will find that about half of them are invested in the stock market. It is very much dependent, therefore, upon the profitability of the business sector. Of course, a stock in a company is only worth what that stock can pay out in dividends over time. So, the CPP, which the NDP purports to cherish, depends very much upon after-tax corporate profit.

Would he join with me in supporting lower taxes on Canadian business so that after-tax profit would be higher and the benefits to plans like the CPP would be increased?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:30 a.m.

NDP

John Rafferty NDP Thunder Bay—Rainy River, ON

Madam Speaker, I know the member is very concerned about pensions and the future of Canadians and how they retire and so I thank him for that question.

However, in response to that, I have a couple of quotes.

Jon Kesselman, Canada Research Chair in Public Finance at Simon Fraser University, says:

Expanding the CPP is the best option for improving Canadian workers' retirement income security; it can ensure results that none of the many alternative reform proposals for private schemes can provide.

I will not read the whole quote, but in part a Calgary Herald editorial states, at the end of 2010:

The CPP already covers almost all Canadian workers and thus spreads the risk and management fees. It is fully portable, offers guaranteed income to all retirees, and is the only risk-free investment broadly available to workers.

So, Madam Speaker—

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:35 a.m.

The Deputy Speaker Denise Savoie

I regret to interrupt the hon. member, but I must allow time for more questions.

Questions and comments.

The hon. member for Winnipeg North.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:35 a.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Madam Speaker, the Liberal Party has talked about this particular fund as a potential small tool that would be able to facilitate a number of individuals who are aging and are thinking in terms of their pension plan.

However, we are very much concerned about the bigger picture, with regard to the CPP.

What we are looking for is stronger leadership coming from the Prime Minister and the government, in terms of sitting down at the table with the different provinces to try to get some sort of an agreement that would enhance CPP benefits for all individual Canadians who are working.

I wonder if the member might want to comment on the importance the federal government has, in terms of demonstrating leadership in negotiating with the provinces.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:35 a.m.

NDP

John Rafferty NDP Thunder Bay—Rainy River, ON

Madam Speaker, the problem with this savings scheme, as the government outlines it, is that it misses a whole demographic in Canada that CPP would be able to cover. I am talking about those who are living in poverty.

According to Statistics Canada, more than 14% of senior women on their own are living in poverty. To increase the availability of CPP and GIS, for example, would be enough to eliminate poverty in our lifetime and the next generation's lifetime. More than half, 52.1%, of lone mothers of children under the age of six live in poverty. They would not really have any kind of access at all to the savings plan. Therefore I think what the government should be doing, as the member suggests, is showing leadership, real leadership, to include all Canadians in a retirement scheme in this country.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:35 a.m.

NDP

Hoang Mai NDP Brossard—La Prairie, QC

Madam Speaker, I am pleased today to speak to Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts.

At first glance, this measure seems to be a good one. However, it turns out to be a half measure when we take a closer look. That is exactly what was done by the House of Commons Standing Committee on Finance and even more so by the NDP in the House. This bill really has holes and problems. It has to be studied in its entirety, and we must figure out why the government has introduced this bill.

In Bill C-38 , the Conservatives attack seniors. That is clear. Just look at the provisions concerning the old age security program and the guaranteed income supplement.

The government has decided to increase the retirement age from 65 to 67 without providing any explanation. We posed questions to the Minister of Finance at the Standing Committee on Finance. The opposition was very insistent and, in the end, the government admitted that the savings would amount to $10.8 billion in 2030. The government is therefore balancing its budget at the expense of seniors and future generations, and that is a problem. We must understand where the government is coming from when we study this bill.

One of the first things that is obvious about the RPPP is that this product is very similar to an existing product, the RRSP.

In fact, RPPPs are more comparable to RRSPs—because they are administered by banks and financial institutions that will invest the money in the markets—than to a pension plan for seniors or future retirees.

On the weekend, one of my constituents told me that when he was younger, people talked about retiring at 55. They believed that if they invested as much as their advisor told them to into a retirement plan or their RRSP, they would be able to retire at 55, no problem. Today, that constituent is still working even though he is over 55 because these retirement investment products fluctuate with the market and the market has been turbulent lately. The investor's retirement income depends on the market.

What we are talking about today is exactly the same thing. It seems like the government has learned nothing from past mistakes and is doomed to repeat them. It claims it is introducing a product for the people who need it. Obviously everyone wants to have a stable and guaranteed retirement. However, this product does not offer such guarantees.

I would say it is like an RRSP because the employee is told to invest in this plan, but the employer is in no way forced to contribute to it. Therefore it is the employee who assumes all the risk. Of course, the employer might contribute, but that depends on his goodwill.

The government currently has tools such as the Canada pension plan and, in Quebec, the Quebec pension plan. These are solid plans.

No one across the way can deny that the Canada pension plan works, that it is well run and ensures a good retirement for those who are lucky enough to benefit from it: workers, self-employed workers, and people in the public and private sectors.

This plan exists and that is why we are saying that instead of creating a product that is similar to RRSPs or TFSAs, which we already have, the government should be investing in a plan that works. According to witnesses at the Standing Committee on Finance, the cost-benefit ratio for taxpayers is very high. It costs less to administer the CPP than to create a new product.

One problem is that this product is administered by financial institutions that want to generate profits. We know this; it is normal. At whose expense are these financial institutions going to make their profits? At the expense of those who have invested in this product. In this case, there is no guarantee. We talked about the fact that regulations might be brought in to ensure that the fees are not too high. However, there can be no guarantee that those fees will not go up over time. And when those fees go up, who loses? Who will have less money in the end? The people who paid in will lose. In this case, it will mainly be employees.

Rather than helping employees and people who are going to retire, the government is helping financial institutions, which, clearly, are already at an advantage thanks to the choices this government has made with previous budgets and the most recent budget. All the government is doing is continuing to reduce their tax rate so they can generate more profits. However, those profits do not go back to the common people. They do not go to those who want to retire with dignity and prepare for their future. Once again, clearly, this government does not have the best interests of seniors at heart.

My colleague from Thunder Bay—Rainy River introduced a bill to protect pension plans in case of bankruptcy. During the last election campaign, I met people. One person came to see me to say that we had come up with a very good idea, something that would protect them. He had spent a good part of his life working for Nortel, investing, working hard and keeping the economy going. Money was invested in his pension for the future. He was promised that he would be protected when he retired. We all know what happened in the end. Nortel went bankrupt. Because pensions were not protected, he is now living in misery. That is what he told me. This man's plight touched me deeply. He had tears in his eyes when he said that he had worked, he had invested, he had done everything he was expected to do, and yet the government failed to protect him.

What I find so difficult to understand is why the government does not really want to protect seniors, the people who truly helped build this country, who worked very hard. Thanks to these people, Canada has made progress in terms of the economy and quality of life. The government should be thanking them and telling them that they have worked hard, but what is it doing instead? It is giving them the cold shoulder. Not only that, but it is also attacking them. They worked hard and set money aside, but the government does not even want to protect them. What a shame to see that kind of attitude from the government.

As I said, that is what we are seeing in the budget, in Bill C-38. All of that and various changes have resulted in a record gap between rich and poor. That gap has been growing steadily since the Second World War. Of course, former Liberal governments have to take some of the blame, but so does the Conservative government.

The Conservative government is aware of the situation. The Conference Board of Canada and the OECD are saying it. The facts are there. The gap between the rich and poor is growing wider and wider, particularly in Canada, where it is growing more rapidly than in the United States. Imagine that. The United States has always seemed to be the prime example when it comes to this gap. Of the industrialized countries, Canada has surpassed the United States and other countries in how fast this gap is widening. It is because of measures like the budget and this bill that we are seeing these differences. Why? It is because the government is not helping those who need it most.

When we talk about old age security and the guaranteed income supplement, we are talking about people— seniors who are living on the edge of poverty. This government's solution is to tell them to work two years longer—to increase the age of retirement from 65 to 67—and that things might be better for them later. This is a completely ideological way of doing things. As the OECD said, there is no problem; this is purely a government decision.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:45 a.m.

NDP

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

Madam Speaker, I would like to thank the hon. member for Brossard—La Prairie for his speech. We know that, of the 75 or so members who could speak, he is one of the few who will be allowed to do so because the government has just imposed a gag order.

The cat is finally out of the bag. We heard it recently from the Conservative member for Nepean—Carleton. The plan is to make entrepreneurs, companies and business leaders pay less while workers pay more. This is a disguised tax. Employers will not be required to contribute to the pension fund and all of the responsibility will fall on workers' shoulders.

I would like the hon. member to explain this aspect in greater detail. Why is the government not asking employers to pay their fair share of their workers' pension funds?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:45 a.m.

NDP

Hoang Mai NDP Brossard—La Prairie, QC

Madam Speaker, I thank my hon. colleague for the very good question. That is really at the core of this bill and it is truly what we oppose.

Generally speaking, the bill looks good. However, upon closer examination something very important stands out. It is not mandatory for the employer to contribute, and therefore the employee is told to set aside some money and maybe the employer will contribute. If the objective is to protect employers rather than employees—the people who will be retiring—it is not mandatory for employers to contribute. In that case, the employee assumes all the risk.

That is why I repeated that it is the same as an RRSP. It is about putting money aside. The employer does not have to contribute.

I would like to read a statement by Michel Lizée, coordinator of UQAM's Service aux collectivités, who sits on the Université du Québec retirement committee:

We should first expand the Quebec pension plan in order to increase universality and income security. An enhanced QPP could reduce employers' current service costs, and consequently their funding risk and administrative burden, while levelling the playing field with respect to competition among businesses.

Clearly, the government is not even going with what makes the most sense.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:50 a.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Madam Speaker, I know the Liberal Party critic was quite strong on the point of the importance of CPP, but also emphasized that this was something we classified as a relatively small tool that many consumers would be able to utilize. There are other tools.

I recall the Crocus fund, for example, in the province of Manitoba. The NDP provincial government promoted it as a fund for seniors to invest in to get the tax breaks and so forth.

Does the member believe seniors or individuals looking at retirement should have other options outside of CPP? If so, what should those options be?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:50 a.m.

NDP

Hoang Mai NDP Brossard—La Prairie, QC

Madam Speaker, I want to thank the hon. member for his question. In terms of the options to be considered, why look elsewhere when we have a program that works?

The Canada pension plan and the Quebec pension plan work. They help those who are eligible. Accessibility can be changed and expanded, but that is a discussion to be had with the provinces. If a product is working and helping those who benefit from it, then we have to invest in that product. That is why in the NDP, we have said that this program works. It has been shown to have lower costs and higher profits. Who benefits from those profits? People taking their retirement; that is who. The program works.

We have heard the government say that it has to negotiate these things with the provinces. However, when we look at the government's current approach to negotiating with the provinces, we see that it is less about negotiating and more about imposing things. Just look at the health transfers to the provinces. This government makes unilateral decisions. The same goes for employment insurance. The government imposes its decisions, end of discussion. Then it turns around and says it consulted the provinces. When the federal government imposes its way of doing things and tells the provinces what they are going to receive, where is the opportunity to negotiate?

We think this should be discussed with the provinces. There are ways to improve the pension plan and I agree that there are ways to go about it. However, above all, we have to talk to the provinces, which the government is not doing.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 11:50 a.m.

Conservative

Joyce Bateman Conservative Winnipeg South Centre, MB

Madam Speaker, I will be sharing my time today with the hon. member for Crowfoot.

I am honoured today to add my voice in support of the work our government continues to do for Canadians regarding pensions and retirement income security.

Promoting the retirement income security of Canadians is an important goal of the Government of Canada, and we will continue to ensure that our policies, programs and services meet the evolving needs of Canadians.

In the wake of economic shocks from beyond our borders, Canadians are concerned about the long-term viability of their pension plans. We are listening to their views on how we can leverage Canada's financial sector advantage to strengthen the security of pension plan benefits and ensure the framework is balanced and appropriate. We are working toward a permanent long-term solution to protect the pensions of Canadians.

In our efforts to achieve greater retirement security for Canadians, our government is building on the inroads we have already made to strengthen the framework for federally regulated private pension plans. In 2009, we consulted Canadians from coast to coast to coast on these earlier initiatives and subsequently introduced a number of significant changes based on the advice of individual Canadians.

Why were pooled registered pension plans, or PRPPs, created? Canada's aging population and the global economic crisis brought the issue of retirement security to our attention. It is a very important issue. In this context, a joint federal-provincial working group was established in May 2009 to undertake an in-depth examination of retirement income in Canada.

The working group found that, overall, the Canadian retirement income system was performing well and providing Canadians with an adequate standard of living for retirement. However, some Canadian households, especially middle-income households, were living with the risk of not saving enough for retirement. The ministers worked together to analyze the wide range of ideas put forward in order to address the issues raised by the research report.

This exhaustive research led the Minister of Finance and the provincial ministers to agree on a framework for pooled registered pension plans in December 2010.

Since taking office in 2006, our government has also introduced several improvements to the tax rules for registered pension plans and registered retirement savings plans. If I have a moment I will get back to those important initiatives as well, but the pooled registered pension plans really are the crux of this bill.

Pooled registered pension plans, or PRPPs, will mark a significant step forward in advancing our retirement income agenda and will be a vital improvement to Canada's retirement income system.

What is a pooled registered pension plan? PRPPs are a new kind of defined contribution pension plan that will be available to employers, employees and the self-employed. PRPPs will improve the range of retirement savings options for Canadians. In fact, they will give all Canadians an opportunity to save for their retirement by providing an accessible, straightforward and administratively low-cost retirement option for employers to offer their employees.

They will allow individuals who currently do not participate in a pension plan—over 60% of the population—such as the self-employed and employees of companies that do not offer a pension plan, to make use of this new kind of plan.

More people will benefit from the lower investment management costs that result from the economies of scale of membership in large pooled pension plans, while allowing employees to transfer their accumulated benefits from one system to another and ensuring that funds are invested in the best interests of the plan members.

Some Canadians may also be failing to take full advantage of the discretionary savings opportunities offered to them through individual structures like RRSPs. In fact, the average Canadian has about $18,000 in unused room in their RRSP, unused for possible contributions. Research indicates that a portion of Canadians are not saving enough, and as I said, more than 60% of Canadians do not have a pension plan. We are trying to provide them with a means to save for their future.

PRPPs will address this gap in the retirement income system by providing a new, accessible, large-scale and low-cost defined contribution pension option to employers, to employees and to the self-employed.

We will allow individuals who currently may not participate in an employer-sponsored pension plan the same opportunity to save for the future. This is very, very important.

What are the advantages of pooled registered pension plans? PRPPs are innovative retirement savings plans that will address the lack of large-scale, low-cost retirement options for many Canadians. Some Canadians cannot take advantage of savings opportunities provided by individual structures, such as RRSPs.

For example, the average Canadian has about $18,000 in unused contribution room. Many Canadians have access to a pension plan only if their employer offers one. Many employers refuse to take on the legal and administrative burden related to a pension plan. PRPPs will eliminate most of the usual barriers that may have discouraged some employers from offering a pension plan to their employees in the past.

Since these plans will involve large pooled funds, plan members will benefit from the lower investment management costs associated with the scale of these funds. Essentially, they will be buying in bulk.

The design of these plans will be straightforward. They will remove barriers that might have been in the way of people who want to save for their future and for the future of their families.

We all understand that Canadians want their governments to work in partnership with them to provide and deliver results, and the bill today does exactly that.

Canada's seniors have worked hard to build a better country for future generations, and today's workers should be given every chance to follow in their footsteps.

Our record shows that our government is committed to the financial well-being of Canadian seniors, as well as those Canadians who are currently still working to realize their retirement dreams.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / noon

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Mr. Speaker, I want to thank the member for her presentation, but the reality is that 12 million Canadians have no savings and no pensions whatsoever. The PRPP will not address that because it is not mandatory. The biggest problem with the bill is that those same people who are not investing now will not invest unless they are put into a position where they must invest. The other problem with the bill is that the fees are not capped.

When we made the proposition that we should increase the Canada pension plan, it was on the basis that the Canada pension plan was portable and mandatory. The cost to a person who makes $40,000 a year to double the Canada pension plan in 30 years would be $161 a year, roughly $9,000 over their working career. Where can we invest $9,000 today and look forward to having $1,800-plus per month in the future? The reality is that the PRPP fails.

Also, the government has announced that it is going to make seniors work two extra years. People on disability or welfare who looked forward to moving up when they got OAS and GIS will now have to wait two more years to have that money.

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June 7th, 2012 / 12:05 p.m.

Conservative

Joyce Bateman Conservative Winnipeg South Centre, MB

Mr. Speaker, it is my pleasure to explain a few more details to my colleague opposite.

First, the reality right now is that more than 60% of Canadians do not have pension coverage. That is a very serious reality. Given that, with this legislation we are enabling Canadians to help themselves, to take charge.

We have just created 750,000 new jobs, but if the average experience in the Canadian workplace applies to those jobs, some of them may not have entitlements. We have created those jobs, and now we are creating an opportunity for those people to save for their future, enabling them to accept that responsibility and to be helped with lower-cost opportunities for that saving.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 12:05 p.m.

NDP

Hoang Mai NDP Brossard—La Prairie, QC

Mr. Speaker, I would like to thank my hon. colleague for her speech.

However, I want to make it clear that this product will merely encourage people to save; it will not guarantee anyone's retirement income.

My colleague said that people can invest in these pension plans, but consider TFSAs, which are a similar product to help people save tax-free. Only 41% of Canadians have a TFSA, and nearly half of them earn $100,000 or more per year. Only 24% of those surveyed said they are using their TFSA to save for retirement. The product envisaged in Bill C-25 is the same as an existing retirement product.

Why does my colleague say that people will invest more if they are not required to, even though he knows that people who do not have money do not invest for their retirement?

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June 7th, 2012 / 12:05 p.m.

Conservative

Joyce Bateman Conservative Winnipeg South Centre, MB

Mr. Speaker, I thank my colleague from the opposition, but I must clarify some facts so that he better understands our bill.

Our bill will help all Canadians. In fact, it will give Canadians the opportunity to save for their retirement. How? People who are not currently part of a pension plan, such as self-employed workers and business owners without a retirement plan, will be able to use the new PRPPs. When we save money, we set that money aside for retirement.

The hon. member addressed another part of our strategy to help all Canadians.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 12:05 p.m.

Conservative

Kevin Sorenson Conservative Crowfoot, AB

Mr. Speaker, it is an honour to rise in this place and represent the constituents of Crowfoot and speak on their behalf in this House of Commons.

I realize that the introduction to this will not necessarily deal immediately with the pooled registered retirement plan, but over the last couple of days here on Parliament Hill we have had some major announcements about some things that I had never heard about.

Two days ago, the Minister of Health and a couple of other ministers made an announcement about a drug known as “bath salts”, which was a negative part of the drug culture and basic culture around the world, where people, young and old, were using this new drug, and so we banned it. My point is that our government was stepping forward to protect Canadians from something that some of our young people may not have even realized at the time would be such a potent, devastating tragedy just waiting to happen.

Yesterday, we had another announcement about human trafficking where we stepped up and said that we would protect Canadians.

Our government is implementing plans across the country and across a wide scope of areas to protect Canadians. We are implementing plans to create jobs and enable small businesses to provide opportunities for retirement, which is what we are here debating today, because we want Canadians to be secure on our streets, in a job and in retirement. Bill C-25 is part of that plan.

Our Conservative government's efforts to help Canadians save for their retirement do not begin with a pooled registered pension plan. It begins with a vast number of other plans that we want to see stable and secure. We see and have heard that our CPP is stable and strong. In the 75-year projection, CPP will be very strong and it will be there when Canadians need it.

However, not always does one size fit all. Not always can we tell Canadians that only if they wait CPP will take care of them at the end of the day. I think every economist and all individuals who are trying to better their life or pass on some financial instruction to their children would encourage their children to save, not just to go out and get a job and pay into CPP, but that they look at a number of different avenues in which they can protect their retirement and have a strong retirement.

This is a modern-day effort to assist Canadians who are self-employed or who work for small firms or businesses that do not have part of a benefits package that includes a pension plan. Our intent is to help Canadians who work where there is no pension plan. Sometimes the opposition members stand back and say that we should just throw more money into CPP or we should have that wealth transfer so the wealthy can put more money into it and we will all get a bit more. The CPP is strong and maybe we can make it stronger, but there need to be more avenues than just the CPP and more avenues than just this pooled retirement pension plan.

Many constituents in my riding of Crowfoot do not have access to a pension plan. The colleague who just spoke said that 60% of Canadians do not have access to a pension plan. I live in a rural riding and I believe that is true in most rural or remote ridings in Canada.

I spoke to this bill at second reading. When I had town hall meetings, met with constituents and had satellite office days, constituents came to me and asked me about the pooled registered retirement savings plan. I explained to them that we were not trying to incorporate a mandatory plan for all Canadians. I told them that it was not another tax grab, that it was not another opportunity for the government to put more of a premium down on CPP or any one plan. I told them that this was an opportunity, if they so chose to do it, to invest in a pooled registered retirement plan.

Around our place this summer, we will have a different type of summer. My oldest child, my daughter, is getting married. With that has come all the fun things with being involved in wedding planning. For years we have sat down and talked to our children about planning for the future and about some day in the future buying a home. We have told them that even when they come right out of college they should purchase an RRSP, that they should look into all of those different avenues.

Now, as my daughter is preparing to get married, she and her fiancé have asked me to n go with them to look at a house. They are just out of college and yet they want to invest in a home. I have for years told my children that they want to buy a home with 20% to 25% down. Now my daughter is telling that, even though I always told her that it was important to have that 20% to 25% to put down, she does not have 5% to put down, which is why she needed me to look at a home. The point is that some of these lessons are learned. Our children learn that it is important to have equity in a home and that it is important to invest and prepare for the future. As a father, I want to be able to help where I can.

As a government, we also want to be able to help where we can. As a government, we want to be able to say that we will not only be satisfied with the CPP, that we will not only be satisfied with the tax-free savings account and that we will not only be satisfied with a pooled pension plan, we want people to pick and choose and perhaps invest but to prepare.

In the rural constituency that I represent there are many farmers and many agricultural based companies who do not have a pooled registered pension plan. This is one of those opportunities. I commend our government for bringing this forward. I encourage the opposition to get off the bandwagon of one-size-fits-all and to recognize that when people have a registered plan they have something to count on.

Not only do we have agriculture in Crowfoot but many people also work in the oil patch in Crowfoot. Many people today will be contracted to work for one company but in a year or two will be working for a different company. The thing I like about this plan is that people would be able to take the plan with them because it is a plan in which they invest. When they leave that company, maybe after two years, they would not need to decide whether to pull out that little chunk of money they put away in a pension plan and put it into an RRSP, which is really the only way to protect that money. There is the tax-free savings account, but to save some taxes people can invest in an RRSP.

Now, as people switch from one company to another, one job to another or one contract to another, the pooled pension plan would remain constant. Now, when they go to the next place of employment that does not provide a pension plan, they would have this tool in their toolbox. It is something they will appreciate.

I encourage the opposition to recognize that there are many Canadians with many different groups. People cannot always reach into their toolbox and pull out a hammer. We reach in and pull out the tool that best suits our needs for the job that we are doing.

We are fortunate sitting here because we have pension plans. That is the topic of discussion, as well, in my constituency. I think it is time to say that this opportunity needs to avail for all those who want to take advantage of it. Our government is providing that tool and I congratulate it.

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June 7th, 2012 / 12:15 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Mr. Speaker, we in the NDP have said that we should have a comprehensive view of the retirement security plans for all Canadians. That has been our position for a number of years.

The member spoke about town halls and previous speakers spoke about the parliamentary secretary doing town halls in 2009. I did 20 town halls that summer. The next year I did 20 more, and I have done 7 this year so far. Overwhelmingly, people have told me that the type of plan the government talks about in the PRPP is not what suits their needs. We have a difference of view. I am not saying that the government is not making attempts to do things, because it is. In fact, I have had discussions with members regarding the enhancement of the Canada pension plan. I still think that is something we will get to at some point in time.

However, the PRPP has two significant flaws, which I have mentioned before: it is not mandatory and there is no cap on fees. It relies on the goodwill of the provinces involved.

The situation in Australia with the Australia superfund, which was a similar type of plan, is that over a 10-year period it did not even keep pace with inflation because of the fees that were applied to it. That is my concern.

If you cap the fees, then you might have something that has some reasonableness to it, but if you do not do that, it will not help Canadians.

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June 7th, 2012 / 12:20 p.m.

The Acting Speaker Barry Devolin

Again I would remind all hon. members to direct their comments to the Chair rather than to their colleagues.

The hon. member for Crowfoot.

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June 7th, 2012 / 12:20 p.m.

Conservative

Kevin Sorenson Conservative Crowfoot, AB

Mr. Speaker, I know the member has worked on this file. I wish he had been present when the minister gave his speech because he gave the member quite an accolade. I know this is something that is near and dear to the member's heart.

As we heard in the member's question, that is one of the big differences between the New Democratic Party and the Conservative Party. The hon. member said that one of the frustrations he has is that it is not mandatory, but there are other tools that are mandatory.

When people have a job, no matter what the job is, they do pay into the CPP and they do have employment insurance deductions. All of those things are mandatory. RRSPs are not mandatory. Does that make RRSPs wrong? I do not believe that hon. gentleman would suggest that it does. Why, then, would he say that his frustration is that they are not mandatory? This is an option, as we have stated before, an option for people to plan for the future.

Some individuals may have the opportunity to put thousands of dollars into the retired pension savings plan while others may have hundreds of dollars. The beauty of this plan is that it would allow people to make their decisions for their future.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 12:20 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, my hon. colleague's speech was very similar to the speeches I have made on this particular topic about adding a tool to the toolbox in terms of options and opportunities for Canadians.

We have heard from the other side, particularly on the CPP but even on the RRSP plan, criticism that this would be based on the marketplace of the stock markets and that it was just an investment with no guarantee because it would be invested in the stock market.

I would like the member to comment on the wrong thinking of the opposition that the stock market is the wrong place to have retirement investments. What role does the stock market play in all retirement investments in this country?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 12:20 p.m.

Conservative

Kevin Sorenson Conservative Crowfoot, AB

Mr. Speaker, if the member is asking for advice on the stock market, he is asking the wrong guy. I know he is not.

A well-diversified portfolio is what is important. There was a very wise man who, a number of days ago, said that it was very important to take a medium to long-range look at one's planning. In an investment portfolio, I would encourage people to have some degree of investment in the stock market, but if we want to have a strong, solid, viable retirement, I would warn against lumping all of our investments into the stock market.

The plan will be well managed. It will there for employees who do not have time to manage their portfolios. This is another avenue for people to take. It will be managed, diversified, secure and registered. The government will be behind it. It is a strong, solid option.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 12:25 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I rise today to debate Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts.

I am trying to bring a little balance to the debate today. I have listened to what the members of the NDP and Conservatives have said. I understand the government has realized that Canadians are worried about their retirement or realized, finally, that something has to be done.

I think it was two years ago that my friend, the Minister of State for Finance, travelled across the country, had consultations and came up with something called a pooled registered pension plan, which is an offshoot of the registered retirement savings plan. Now the government is making a big PR event out of it. Again, I agree with the member for Burlington, that it is an extra tool in the toolbox. That is why we support it. However, that is not the answer to the crisis we are having or the retirement savings and their future that people are worried about.

We have had six years of the Conservative government, with increases in hidden taxes. That has been part of the cause. Canadians have less money in their pockets to put toward retirement. We have had a lot of pressure on Canadians, whether they have lost their jobs or have had to take on other responsibilities. We have seen Canadians of all age groups having less money in their pockets, for various reasons. As I have said, most of this had led to some of the policies of the Conservative government.

Even those who do have savings are worried about retirement. We have seen rates of interest that have been the lowest ever in history. Therefore, even people who have money put away in a savings account are barely getting 1%. A lot of times it has been 0.5% or 0.25%. Canada savings bonds used to pay 10%. They are now paying less than 2% and 3%, if people are lucky because they have been holding on to the bonds for six or seven years. We expect these interest rates to continue to be low.

Canadians have taken risks. They may be retiring in a couple of years and need to get their retirement savings up. How do they do that? Maybe they take a gamble on something, but are they not sure what it will be. Some people have put it in the stock market.

We saw what happened a couple of years ago with the tech bubble where people put tons of money in companies like Nortel, which was supposed to be the most secure company around. It was an offshoot of Bell Canada. Some people got their shares for free, like my parents. They decided to keep them. The stock went up to $100 then $200 a share. They decided to buy some more because it was going to go to $400, trading in multiples based on sales never heard before. That was the way these tech stocks were evaluated. All of a sudden, overnight, stock portfolios of millions and millions of dollars went down to zero. We are still seeing lawyers making money from the Nortel bankruptcy. People who have disability plans and pension plans with Nortel cannot get their money out. They cannot get paid because the lawyers are holding up the distribution. The government is not willing to help these people. There is some money stuck out in some tax haven and the only people making money are the professionals, and people see this.

As recently as the bank crisis a couple of years ago, people thought it was secure to have stocks in the banks. They put their money in the banks thinking it was as secure as ever. Then we saw the bank closures in the states. We were lucky in Canada, but we cannot put all our eggs in one basket, as most personal investment advisers say. They will also advise to diversify. People who took the advice of professional advisers, they would have lost some money a couple of years ago by having their money in bank stocks.

Again, people are worried. People have invested money in resources. People have invested money in the past in metals such as gold. As recently as a few years ago, gold was at a couple of hundred bucks. Now, if one was lucky enough to have invested in gold, it is at $2,000 an ounce practically, but who can forecast those things?

Some people have their money invested in secure investments such as bonds, but countries have gone bankrupt and are unable to pay their bondholders. They are being renegotiated. Who is making the big money? It is the big players. I do not see how individuals who are busy trying to raise a family will make any more money than they can make today.

Again, some people are taking more risks, such as in real estate. We see what is happening in the real estate market across the country if one is fortunate enough to buy a condo. It seems like the condo market is fine. Those who live in a condo may buy another one to rent out to maybe make some money. However, as soon as the condo market collapses, as is predicted, they may have to take some money out of their retirement savings to supplement these real estate deals.

Therefore, I do not see how the government could think that people can easily put some money into a pooled savings plan that is administered by somebody we do not know and all of a sudden, miraculously, their retirement savings will be secure for a 5, 10, 15 or 25-year period.

For years, the Liberal Party has said that we should start with the Canada pension plan. In Quebec, it is the Quebec pension plan. It survived relatively well in comparison to many of the other private pension plans, so we should be working with that.

Elderly Canadians are not the only ones who are beginning to worry. As I have said before, we have young people who are worried about their future. We see Quebeckers who are going to the streets based on the fact that their tuition fees and cost of living are going up. They see a crisis developing in the next while. That all means they know their retirement will be affected because the Conservative government has told them they will not be able to retire until the age of 67.

This is nothing new. We have had crises, whether it be over pensions or other issues. In the 1990s, the Liberal government recognized that the Canada pension plan was not sustainable and action had to be taken. What did we do? We consulted with individuals and stakeholders, not just our friends. We met with the provinces. We looked at how we could secure the CPP in the long term and we did not just issue talking points.

We realized there was a problem, and we did not turn to private institutions to solve it. We negotiated truly, we invoked thought-provoking discussions and, miraculously, we came to an agreement with all of the provinces. It was not self-imposed. It was not dictated to them, as the current government likes to do. We recently saw that with the health accord. The previous Liberal government sat down with all the provinces and discussed the issues and the needs, came to an agreement and signed a 10-year health accord. The Conservative government has said that it does not need to discuss anything with the provinces. It will give them some money and increase it at a certain level. After that, it is their problem, even though it knows that the cost of health care will increase within five to ten years.

Coming back to the bill, the government says that it will secure people's pensions. In actual fact, the only thing we think it will do is make the banks and insurance companies happy by allowing them to offer pooled registered pension plans to employers and the self-employed in federal jurisdictions. It would also provide a framework for provinces to pass similar legislation.

The budget tabled recently in the Quebec National Assembly provides for companies to offer this pooled registered pension plan to their employees, which we have not seen in the other provinces.

I do not believe the province of Ontario passed it in the last budget and there has not been any movement with the other provinces. I am sure somebody on the other side will correct me.

We also think it is great that the administrators of the plans will be regulated. Financial institutions need a special licence from the Superintendent of Financial Institutions, and we have no problem with that.

The only problem is that most individuals already have trouble saving. A lot of them are working in low-paying jobs. Many of them work for small companies, which do not have the time, energy, resources or ability to set up these plans no matter how easy it is. It will be very difficult to see any of these smaller companies implement a registered pension plan. As an accountant by trade, I just do not see it.

A lot of employers would not want to make RRSP contributions, even for employees who want to have them deducted from their pay cheques and put aside. They do not want to take on that responsibility. There would have to be separate accounting, extra cheques would be involved, for example, and administration. They would have to hold the money in an account, ensure there is enough money in that account a month later to make the remittance, and then ensure the amounts are deposited into the correct employees' accounts. I could go on and on. I do not see why we would not use the tool available to us, which would be the CPP or the QPP.

Companies would have the option of rolling into a plan. If it is not made mandatory and companies would have an option, I am not so sure how many companies would take us up on that, unless of course they have a dedicated payroll resource person and they really need to keep these employees and the employees all agree they need to have this plan.

Again, we are not asking the employer to contribute, and we are not asking all the employees of a certain company to opt in. They have the option of opting out. A company may only have 10 or 20 employees. If only 2%, 3%, or less than 50% of them opt in, I do not see why that company would go to the trouble of setting up a pooled registered pension plan.

Also, the troubling part is that this new option is another private registered savings vehicle, which more than likely would help the financial institutions. I think it was a member from the Conservative Party who stated Canadians, on average, have $80,000 of unused RRSP contributions. If there were an urgency because Canadians have totally utilized all their RRSP room, I would understand the purpose of coming up with something like this.

Right now, the only people I am aware of who are using their RRSP to the maximum, again, using my background as an accountant and speaking to my accounting friends and bankers, are people who can afford it. That means it is the higher-income people. I do not see the necessity to start a program just for these people.

The Liberals believe the solution is that we do not need to look any further than working with the Canada pension plan and the QPP to help people save for retirement. The CPP and QPP have proven track records. They have been stable and secure. Even through these economic downturns, they have been quite strong.

We see it in Quebec. The QPP has rebounded in the last two years, with rates of return close to 10%. There was a bit of a crisis about three years ago where it lost tons of money in certain investments in the banking sector. It changed its management. It changed its direction. It made recent statements that it is going to change direction again. It will be looking at making investments in infrastructure and other areas that would require a lot of money that individuals do not have in their RRSPs.

Even if we wanted to take the example of these pooled registered pension plans, there would not be enough money in these pooled plans to be able to diversify risk, as the CPP and the QPP are doing today. Supplementary CPPs could allow those who want to investment more in a secure retirement vehicle to do so.

Again, we are not sure about the fees. I know we are very worried about the fees. Even if these registered pooled pension plans start with low management fees, it would be a matter of time before the banks and insurance companies get a hold of people's accounts and hold them hostage. If the funds do a good job and the return is high, we know what would happen. All of a sudden, the fees will go up. If there is no return, the fees will stay the same. I do not see how we are going to win with this.

Again, we would be adding another level of complexity to people's options for savings, such as deciding what to do their money when they change employers: “Do I keep it in this pooled retirement savings plan? Do I keep it with the bank? Do I move it to an insurance company. What point am I at in my life? Am I going to be retiring in five years, ten years, fifteen years?

The administration of what an individual is to do with the money in that pooled registered pension plan would be a headache for unsophisticated investors, and the areas they would want to invest in would add another level of complexity.

We could look at options for opening it up further. One of the options would be for government to look at options to help those who are in the low-paid workforce. These are people who are moving from job to job, and they are the people who need the most help with their retirement savings.

In making these decisions, we need to look at the evidence. Policy decisions, such as retirement savings plans for Canadians, were not made on a whim but rather based on solid evidence.

Somebody also stated that Australia implemented a similar program to the pooled registered pension plans. After 10 years, it was obvious that the only ones making money were the financial institutions. In Australia, $161 billion of investments were made in pooled pension plans versus $105 billion in fees that were taken out of these plans. It is not dollar for dollar, but 80¢ was charged for every dollar that was put into the pooled pension plan.

A recent study by the Rotman International Journal of Pension Management found that despite the presumed role of competition, the investment performance of the system continued to be restrained, again by high fees and costs. We think this could be averted by using the CPP or QPP as the supplementary retirement investment tool.

As parliamentarians, we should also be concerned by all of this and perhaps look at how we could improve the pooled registered pension plan, or look at other options. The other option is easily the CPP, QPP.

However, we have seen that the Conservatives have already made up their minds. Like many other things, they will not listen to anyone else's opinion, or reason. They will not even look at evidence on a lot of issues. They will blindly follow this approach and put their hands over their ears and march on.

As we have seen today, the Conservatives have moved time allocation so we can no longer debate this issue. The very reason each and every one of us is elected to this House is for debate, but they decided they have heard enough, or they have pretended they have heard, and have imposed time allocation on this particular bill. This is one of many bills on which they have imposed time allocation. In Parliament, they have imposed time allocation over 60 times, and if we include committees, we are almost at the 300-point mark.

It is important to talk about how we got to a point where we suddenly have to rush through the bill. The minister of state consulted on this for about two years, and then all of a sudden there seems to be a rush to get the bill through. There have been concerns about retirement security for some time, while the Canada pension plan, and I repeat, the Canada pension plan has been secure for at least 75 years. It is not just the CPP that has been secure, but also QPP.

Canadians also need to save more for retirement to live comfortably. We all agree with that.

It was in 2009 that the Conservatives announced the consultation on pension reform. Now, all of a sudden, as I said, it has been a rush. In December 2010, the Conservatives announced this program, I will not call it a scheme, but a program.

I will wrap it up. I have a lot more notes that I could go through.

Retirement income for Canadians is important. Pensions all of a sudden have become an issue. It has always been an issue, but as we get older it becomes a greater issue.

The government has created a crisis by changing the age of retirement for being able to collect OAS. I am in favour of the flexibility the OAS will provide, but I am not in favour of changing the age from 65 to 67. One of the first people it would affect would be me. The government will be taking about $12,000 out of my pocket, and I have not even got there yet.

I do not see how Canadians could be happy with that. I do not need the money, but imagine how Canadians my age, who are relying on this money, feel about $12,000 being thrown away overnight like that.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 12:40 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I thank my hon. colleague, with whom I sat on the finance committee, for his speech. I disagreed with most of it, but I do appreciate his time.

Part of the member's argument is that there should be a voluntary opportunity to contribute to CPP. However, in the same speech the member argued that taxpayers do not have the money to contribute to a pooled registered plan. If they do not have the money for a pooled registered plan, how would they have money for the voluntary aspect of the CPP?

It is a defeatist argument, and it does not make any sense. The member cannot argue in one sense in one area and then argue the opposite in the same speech.

The member talked about how the Liberal Party put the CPP back on its financial feet. However, it was forced to do that after it took all the money out of the plan. They had to get it back on its feet, so they did something in the 1990s.

If this voluntary CPP contribution plan would be effective and the right thing to do, why did they not consider it when they were doing those changes in the 1990s?

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June 7th, 2012 / 12:45 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I will address the member's first point.

The speech I gave was totally coherent. It is very easy. If we use CPP as an example, we would not force it upon all companies to contribute for all their employees because some companies cannot afford to, but some companies can.

The reason some companies would not have a pooled registered pension plan, as I stated, is because they are too small to even administer or handle the extra paper, as they are overloaded. That is the reality.

However, if there were enough employees who want to opt in with the CPP, eventually everybody will. It may start with 1¢ a pay, 10¢ a pay, $1, $10, or whatever it may be, but at least the system is there and already set up.

We have spoken to the people from CPP and QPP, and they are willing and able to do this. I do not see what the big deal is. I do not know why we have to make bankers and insurance companies richer by setting up a separate program.

Also, the Liberal government did not take money away from anything. The CPP is a totally independent board that administers money independently. None of that money was ever transferred.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 12:45 p.m.

NDP

Marjolaine Boutin-Sweet NDP Hochelaga, QC

Mr. Speaker, my former employer set up a pooled registered pension plan, to which the employer contributed, but only a fraction of the employees took advantage of it, probably because most employees worked part-time and did not have the money to invest. It is a similar situation in my riding, because many people have a very tight budget and do not have even $5 or $10 to set aside every week.

We know that 74% of Canadians do not invest in RRSPs because they do not have the means to do so. Despite that, the Conservatives' plan today is to pass the bill quickly through a time allocation motion, claiming that there is a huge demand for these plans.

I would like to hear what my Liberal colleague has to say, as he perhaps touched on this issue earlier in his speech.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 12:45 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I would like to thank the hon. member for the neighbouring riding of Hochelaga. Our ridings are facing similar challenges. In fact, some areas of Hochelaga—Maisonneuve and Saint-Léonard—Saint-Michel are very poor.

The hon. member raised some very important points. According to the Liberal Party, we should start with a voluntary program. Are we going to ask people who work part-time and earn $100 a week—like my son who has just started working— to contribute 20% of their salary to a retirement plan? That is unacceptable.

For that reason, we believe that we must start by deducting the amounts already set out in the law. Later, we could increase these deductions by establishing criteria that we will have discussed beforehand. This is not something we should impose today. The government should not be imposing a gag order on a bill that should be debated.

I do not understand this government's attitude. There are a number of things that are more important than retirement plans for people who are already rich and are already making significant contributions to their RRSPs. In my opinion, the issues this country must address today are pensions, students and young people.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 12:45 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I want to follow up on the response from the member. I want it to be clear and on the record that it was the current government that brought in the process that contributions to CPP cannot be raided of any surpluses by any government in the future. That was our doing, our policy.

Based on the member's comments, I assume the member is in support of and congratulates the government in making sure that future governments cannot raid surpluses, as previous governments have done in the past.

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June 7th, 2012 / 12:50 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, the only thing this government has done in terms of raiding was to set up an independent unemployment board and dedicate $1 billion to it. It already has a deficit of $3 billion or $4 billion after three years. This government has only been in power for six years and has done nothing but tax Canadians and put them in the situation they are today.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 12:50 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

Mr. Speaker, I am delighted to be sharing my time with the member for Brandon—Souris.

Our government understands that hard-working Canadians and seniors want an effective and sustainable retirement income system that will help them achieve their retirement goals. That is why I am pleased to have this opportunity to speak to Bill C-25, an act that would implement the federal framework for pooled registered plans, or PRPPs.

PRPPs would mark a significant step forward in improving Canada's retirement income system by providing a new pension option to Canadians. Currently, 60% of Canadians do not even have access to a workplace pension plan. Most of these Canadians work for small and medium-sized businesses or are self-employed. Clearly, this represents a gap in Canada's retirement income system, a gap that PRPPs would fill.

PRPPs would allow these Canadians to access a pension plan for the very first time. In short, PRPPs would be a broad-based, low-cost, privately administered pension plan option. We may think of it this way: pooling pension savings would spread the cost of administering the pension funds over a large group of people. This would allow plan members to benefit from lower investment management costs, lower than those typically associated with the average mutual fund. Do members know what this would mean? It would mean that more Canadians would have more money left in their pockets for when they retire.

Simply put, the PRPP is the most effective and targeted way to address the gap in Canada's retirement income system. How will it do that, one might ask? PRPPs would address this gap by providing a new, accessible, straightforward and administratively low-cost retirement option for employers to offer to their employees; allowing individuals who currently may not participate in a pension plan, such as the self-employed or employees of companies that do not offer pension plans, to make use of this new option; enabling more people to benefit from lower investment management costs that result from membership in a large pooled pension plan; allowing for the portability of benefits, facilitating an easy transfer between plans; and, finally, ensuring that funds would be invested in the best interests of plan members.

Clearly, PRPPs are what Canada's retirement income system has been waiting for. This is why it is so important that the provinces follow the lead of our government and implement PRPPs as quickly as possible. Doing so would enable Canadians from coast to coast to coast to take advantage of this great new pension option.

Unfortunately, not everyone feels the same way. While our government is trying to implement PRPPs, the NDP would rather take the irresponsible and reckless route. It wants to double CPP. Do people know what that would do? It would result in higher CPP contribution rates for employers, employees and the self-employed. In the case of small and medium-sized business owners, it would act as a payroll tax, and that is a tax on job creators.

Members need not take my word for it. Let us hear what the Canadian Federation of Independent Business had to say. According to its research, “to double CPP benefits would kill 1.2 million person-years of employment in the short term”. Only the NDP would propose something so reckless. That is the difference between our Conservative government and the irresponsible NDP.

While our government is committed to generating economic growth and long-term prosperity, the NDP has no problem jeopardizing Canada's fragile economic recovery by imposing higher taxes on job creators. That, to me, is unbelievable.

It should be clear that doubling the CPP is the wrong decision for Canada and our economy. Unlike the NDP, our government believes that lower taxes help to generate economic growth and create jobs for Canadians.

Let us just look at the facts. Since July 2009, more than 750,000 net new jobs have been created. What is more, Forbes magazine ranks Canada as the best place for businesses to grow and create jobs. When it comes to the economy, there is no doubt why Canadians trust this government. This government gets results. That is why Canadians trust this government to keep Canada's retirement income system strong.

I will take a moment to tell the House just how much our government has done to ensure that Canada's retirement income system will continue to be the envy of the world.

Since 2006, our government has increased the age credit amount by $1,000 in 2006 and by another $1,000 in 2009. Next, we doubled the maximum amount of income eligible for the pension income credit to $2,000. Our government introduced pension income splitting, and we increased the age limit for maturing pensions and registered retirement savings plans, RRSPs, to 71 from 69 years of age.

What is more, budget 2008 introduced the tax-free savings account, which is particularly beneficial to seniors as it helps them to meet their ongoing savings needs on a tax-efficient basis. Our record also includes important improvements to several specific retirement income supports. Budget 2008 increased to $3,500 the amount that can be earned before the GIS is reduced. This means GIS recipients will be able to keep more of their hard-earned money without any reduction in GIS benefits. Budget 2008 also increased flexibility for seniors and older workers with federally regulated pension assets that are held in life income funds.

Budget 2011, the next phase of Canada's economic action plan, announced new measures to improve seniors' financial security and ensure they can benefit from and contribute to the quality of life in their communities. The plan includes a new GIS top-up benefit targeted to the most vulnerable seniors. Since July 1, 2011, seniors with little or no income have been receiving additional annual benefits of up to $600 for single seniors and $840 for couples.

The plan also provides an additional $10 million over two years to enhance the new horizons for seniors program. This additional funding will enable more seniors to participate in social activities, pursue an active life and contribute to their community. It will also provide funding for projects that will increase awareness of elder abuse and promote volunteering, mentoring and improved social participation of seniors.

Canadians just have to look at our record to know that this Conservative government is on their side, and the proposed PRPP is just the latest example. However, members need not take my word for it. The Canadian Chamber of Commerce states:

PRPPs—with simple and straightforward rules and processes—will give many businesses the flexibility and tools they need to help their employees save for retirement.

Greg Thomas, the federal and Ontario director of the Canadian Taxpayers Federation, says:

Canadians will be able to save more for retirement with this new pension plan. People saving for retirement will enjoy lower costs and more flexibility throughout their working lives.

It seems clear to me and to Canadians that PRPPs are the way to go.

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June 7th, 2012 / 1 p.m.

NDP

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

Mr. Speaker, I would like to thank the hon. member for his speech.

We know that the tax-free savings account is one way of saving available to Canadians and that it is often the wealthiest people who can take advantage of these accounts. In general, it is rich people who can take advantage of these accounts or people who are at a point in their lives where they are transferring their pension funds into tax-free savings accounts to save on taxes and ensure that they have more money for their retirement.

I would like to ask a question about pension funds because we have spoken about them a number of times since this morning. Since when is a pension fund considered to be a withholding tax for employers? Why are we requiring workers, but not employers, to contribute to this pension fund?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

Mr. Speaker, as a small and medium-sized business person in my previous career path, I can tell members that my business struggled with options to provide security to our employees. We used, for example, group RRSPs in our business as one means of providing an option to our staff, our team.

To me, this plan is the perfect opportunity to provide a low-cost, flexible product or option with a greater ability of employees to get in. It will give our staff the opportunity to participate in something that they simply never had before.

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June 7th, 2012 / 1 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, the member himself would no doubt acknowledge that the number of individuals who will benefit from this particular legislation is somewhat limited.

There are a large number of Canadians, and there is some value in terms of establishing this fund. It can be used as a tool to facilitate additional retirement funds for many seniors going forward. However, the vast majority of Canadians are quite concerned about the future of CPP. They are looking for the Government of Canada to sit down with the provinces and look at ways to enhance the quality of life for future retirees by making a more sincere, genuine investment in CPP.

Can the member can provide his perspective on CPP versus this particular pooled pension plan, and whether it would be worth the government's time and effort to work with the provinces to improve the CPP?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

Mr. Speaker, my colleague has asked a good question that is obviously at the root of the decision process that evolved the PRPP.

First, two years ago the government met with finance ministers across the country and tried to arrive at a solution for reviewing CPP. There was no unanimity. The finance ministers unanimously agreed that PRPP would provide a new and more flexible tool that would bring more Canadians into the net of those who would like to participate in such a program.

The hon. member asked about CPP versus PRPP. Clearly, when I look at CPP and some of the comments that have been made today and in previous debates about doubling CPP, the extra cost to employees and employers and the tax costs to employers make it untenable and tremendously expensive for an employer in a small or medium-sized business or someone who is self-employed to participate, whereas the PRPP truly gives the benefit of that flexibility and a new opportunity.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:05 p.m.

Conservative

Merv Tweed Conservative Brandon—Souris, MB

Mr. Speaker, I am pleased to stand and speak to Bill C-25.

I would think that all members of the House would see this as a benefit to all Canadians, particularly, as previously stated, the self-employed, small and medium-sized businesses and organizations that are probably too small to have their own plan but would like to offer another form of investment in the people they employ and an opportunity for people to grow within that company and stay with it based on the fact that they would have a plan at the end of the day that provides for their retirement.

As many are aware, our government understands the importance of a secure and dignified retirement for people who spent their entire lives building a better and more prosperous Canada and for their families themselves. This legislation would take Canada's retirement income system one step further by helping more Canadians realize their retirement goals.

A lot of work was put into developing this proposal. Canada's retirement system is strong, but that does not mean it cannot be improved, that we cannot offer enhancements to pick up those individuals outside of the circle and offer them something better and an opportunity to invest for their retirement. This legislation addresses exactly that.

We all have memories of the crisis of 2008 and how it brought out concerns with regard to retirement. We all asked ourselves if our pension would be adequate, if we would be able to retire in the style we choose. I suspect upon reflection many people found they would not be able to. Things changed dramatically after 2008. If people were in the stock market or in RRSPs or in any type of investment, they took a hit. There is no question about it. The proposal we are putting forward would address that.

We did not do this blindly. We did it through co-operation and discussion with provinces and finance ministers across Canada, with people in our communities and, as the previous speaker mentioned, small business people. I was a small business person too. We always looked for opportunities to provide our employees with better security and better programs. Quite often we had to make the decision that we could not afford it.

This would address many of those issues. As I said, we did not do this blindly. We did it with a lot of consultation. We are trying to provide Canadians with an adequate standard of living upon retirement, and that is what everyone wants.

During the consultation period we found out that modest and middle income Canadians risked facing retirement with insufficient savings. Of particular concern was the declining participation in employer-sponsored RPPs. The proportion of working Canadians with such plans declined from 41% in 1991. Canadians are not taking full advantage of other retirement saving tools, like the RRSP.

I have been told that there is $600 billion in unused RRSP room. That is a clear indication that Canadians have priorities, and their families are their priorities. Sometimes we make those decisions and forget about the future. We need to always be aware of that and have that in our view.

With these findings, our government went to work on behalf of Canadians. We consulted, we met with provincial and territorial counterparts and held discussions with many businesses and we came to today's legislation.

In short, PRPPs are a new, innovative, privately administered, low-cost and accessible pension option to help Canadians meet their retirement goals.

PRPPs are particularly important and significant for small and medium-sized businesses. It is quite often unaffordable for business owners to provide these types of benefits. The bill would give them that opportunity, because it would enable owners and employees alike to have access to a large-scale, low-cost private pension plan for the first time. We basically would piggyback on larger corporations. We would get a better buy-in and we would get a better return because of the pooled funds.

Professional administrators would be subject to a fiduciary standard of care to ensure that funds were invested in the best interests of the plan. That is obviously a given, but I think it needs to be said.

By pooling pension savings, PRPPs would offer Canadians greater purchasing power. Basically, we would be buying in bulk. We would be getting a bigger, better deal for less money. By achieving lower prices than would otherwise be available to Canadians, it would mean more money left in the pockets of those same Canadians when they retire.

The design of the plan would also be straightforward to allow for simple enrolment and management. People in small and medium-sized businesses, the self-employed, I suspect, and the employees themselves will like the simplified form.

Finally, they are intended to be largely harmonized from province to province, which further lowers administrative costs and makes the transferability a lot easier to deal with.

Overall, these design features would remove any of the traditional barriers that might have kept some employers from offering pension plans to their employees.

It is my belief that this would lead to a greater willingness for small and medium-sized businesses to offer PRPPs. That is crucial. It is crucial because, incredibly, more than 60% of Canadians do not have a workplace pension plan. That is a huge number. When the members opposite look at it and talk to their friends, they will see it would include a lot of the people who support them and work with them in their day-to-day lives, and it is important that we try to include them in the discussion.

With PRPPs, participation would be encouraged by automatic enrolment of employees into a PRPP where an employer offered one. The automatic enrolment would encourage regular savings by making participation the default choice of employees who do not actively make a decision to opt out.

I remember the best advice I ever received as a young person entering the workforce in a family business was from a financial advisor who told me to just take a little bit off my cheque every month as I would never miss it. Then, as I grew older and my needs changed and my income earnings changed, I could increase it. It is the best advice I have ever received and the best advice I have ever given my children or their friends.

Canada's finance ministers decided to proceed with the PRPP framework precisely because it was considered an effective and appropriate way to target the modest and middle-income individuals who may not be saving enough for retirement, particularly those who currently do not have access to an employer-sponsored pension plan. These PRPPs would strike the right balance.

I know that if the NDP members had their way they would double CPP benefits and increase payroll taxes on small and medium-sized businesses, but that is not the way this government operates. At a time when Canada's economic recovery is still fragile, imposing a job-killing tax on the creators of those very jobs would be simply irresponsible.

PRPPs would be an efficiently managed privately administered pension plan that would provide greater choice to employers and individuals and promote pension coverage and retirement saving.

Once the provinces put in place their PRPP legislation, the legislative and regulatory framework would be operational. This would allow administrators to develop and offer plans to Canadians and their employers. Working together with the provinces, I know and I am confident that we can get these important new retirement vehicles up and running for Canadians in a timely manner.

It is important to remember that PRPPs would not just stand by themselves. They would be part of a bigger picture, part of Canada's retirement income system. We must always remember that. This bill is designed to help the many who do not qualify or are unable to have a pension plan within the confines of where they work. I know the Minister of State for Finance has gone to great lengths to listen to Canadians and to hear what they asked for and what they need. I believe this bill responds to their needs in a very positive way.

I encourage all Canadians and all members of Parliament to support this legislation.

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June 7th, 2012 / 1:15 p.m.

NDP

Francine Raynault NDP Joliette, QC

Mr. Speaker, I thank my colleague for his speech.

Something similar was tried in Australia more than a decade ago, and the results were not encouraging. After a dozen or so years, people did not have more money. Their investments did not do better than the rate of inflation.

The members of this House know that the Canada pension plan has barely lost any ground, with barely a 1% drop in interest, while the stock market, in which the government would like Canadians to invest more of their pension and retirement savings, has declined by 11%. I would like to hear what he has to say about that.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:15 p.m.

Conservative

Merv Tweed Conservative Brandon—Souris, MB

Mr. Speaker, the fact that 60% of the Canadian working public does not have access to this type of plan is the very reason we are considering it.

We have spoken to provinces, employers and employees. This appears to be the best vehicle for them to move forward with. It would be tightly managed by professionals. I believe very firmly that this would be an ideal opportunity for employers and employees to work together on a pension for each other.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:15 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

Mr. Speaker, I would first like to say that we could pick any point in time to suit an argument on the returns of the stock market.

The whole point behind the PRPP is that it is over a lifetime, with the dollar cost averaging over 40 years. With a tax-free savings account, RRSPs and now this program, we would provide Canadian working families a great opportunity for their retirement future.

I wonder if the member could talk about the importance of fiscal and financial literacy for Canadians of all ages moving forward for their retirement.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:15 p.m.

Conservative

Merv Tweed Conservative Brandon—Souris, MB

Mr. Speaker, it is extremely important. When we are moving into a program that is new to a lot of people, the understanding of it is very important. The member for Edmonton—Leduc has put forward a bill regarding financial literacy, which is of utmost importance.

As I said earlier, as a young first-time employee, it was the experience and depth of a senior statesman who gave me the advice I needed. Trust was a big part of it, but I believe and think it is imperative that all Canadians understand what they are signing up for, what the benefits are and what the long-term benefits are for their families.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:15 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, we clearly do not have the same definition of financial security. This bill clearly indicates that the administrator administers all the plan assets, pays himself management fees, a margin, bonuses and that anything left over goes into the fund.

The plan member has no guarantee of a return. Even worse, the member cannot plan his retirement because he will have absolutely no idea of the amount accumulated. Can that be called a pension plan? It certainly cannot. Above all, there should not be closure on this bill, especially in light of the fact that Nortel could lose $7 billion that could be directed into its pension fund. And yet, the government is not doing anything. Why not?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:15 p.m.

Conservative

Merv Tweed Conservative Brandon—Souris, MB

Mr. Speaker, like anything in this world, we can look at it as the glass being half full or half empty. We on this side look at the world as the glass being half full and wonder how to continue to add to that glass.

The bottom line is that 60% of all working Canadians do not have any form of pension plan within their area of work. The bill is designed to address that. It is based on a collection of information from the owners of businesses, employees and professionals across the world. I wish I could give every member a guarantee in life, but that is not how it works. What we have to do is give them the best opportunity.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:20 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, it should come as no surprise that I disagree profoundly with my colleague from Brandon—Souris, as I disagree with his party on the policy direction they are taking. I even disagree with just about everything the Parliamentary Secretary to the Minister of Finance said. I think those guys are going down the wrong road and are doing the dirty work for corporate Canada once again.

Here are the origins of the bill. Thomas d'Aquino, when he was the head of the Business Council on National Issues, and then John Manley, when he became the president of the chief executive officers, or whatever they call themselves—the Grand High Poobahs of, really, the unelected Prime Minister of Canada, which is essentially what he is--declared that what was really holding back Canadian productivity was “legacy costs”. That is a nice way of saying those dirty pensions that our predecessors got into in the 1930s, 1940s, 1950s, 1960s and 1970s. That was back when we used to negotiate fair wages for working people, back when working people and their employers would sit down and put together a sensible benefit package with a real benefit plan for their retirement years. All of a sudden, the corporate world has declared that unaffordable and it does not like having the burden of legacy costs.

We can even look at what happened in 2008 with the economic downturn. As soon as the auto industry got into trouble, what did the executives of the auto industry say? It had nothing to do with the cars they were producing or their management skills or the way that they had dropped the ball and made products that nobody wanted to buy anymore. Right away they said that the reason they were not productive was because of the legacy costs. They said that it was the pension plans that were dragging them down. They said that something needed to be done about the pension plans so they trooped down here to their friends, the guys who they bought and paid for and put into power, and complained to them that they had to do something about these pensions.

Mr. Speaker, I forgot to say that I will be splitting my time with the member for Châteauguay—Saint-Constant.

The Conservatives put it in fine print so the world can see. They put in place this disingenuous bill with a title that actually uses the words “registered pension plan” in the title. This is another example of the creative writing class that takes place somewhere down in the bowels of the Conservative Party's black operations department. They develop these names that have nothing to do with the bill. In fact, they are 180 degrees opposite to the true intent.

There is nothing about this that is a pension plan. It does not bear any resemblance to a pension plan. It is a savings scheme that, frankly, is no different from what ordinary workers could do today if they were lucky enough to make enough to set money aside in an RRSP. They could put a little more money aside in an RRSP and have the same net effect as this, except that they would be gouged even further by the financial sector that also stands in the wings waiting to benefit from this huge shift of money that should normally be going into a pension vehicle such as a proper registered retirement pension plan or, the best retirement vehicle that we have, the Canada pension plan.

And you wonder, Mr. Speaker, why I have strongly held views on this issue?

I represent the riding of Winnipeg Centre and that, frankly, has been the home of two of the greatest champions of social justice that our country has ever known. In 1919, the Government of Canada wanted to send J.S. Woodsworth to prison for his role as a leader of the 1919 general strike. The good people of Winnipeg Centre sent him to Parliament instead where he became the founder and first leader of the CCF. He served there until 1942 when he died. Then the good people of Winnipeg Centre elected the person who came to be known as the father of the Canada pension plan, Stanley Knowles.

J.S. Woodsworth, while he was here, managed to wrestle old age security out of the Liberal government of the day. William Lyon Mackenzie King had a minority government. J.S. Woodsworth had two members, A.A. Heaps and J.S. Woodsworth were called the Ginger group. They were the Independent Labour Party, predating the CCF. They went to Mackenzie King and told him that they would support his government and prop it up if he would introduce old age security.

We have a letter on file at the NDP headquarters today that is signed by William Lyon Mackenzie King agreeing to that. It took him seven years to do it. It was 1926 by the time he actually fulfilled that promise. However, William Lyon Mackenzie King yielded to the pressure of the ginger group. The member of Parliament for Winnipeg Centre managed to negotiate some semblance of pension.

When Stanley Knowles was elected, he not only brought in the Canada pension plan, the second initiative was the indexing of the Canada pension plan. Now, at a 1% operating cost, the Canada pension plan with a small amount of contribution yields a guaranteed benefit to Canadians in the neighbourhood of $900 or $1,000 a month. That is a good return. That is in the best interests of Canadians.

I am worried that as the government puts in phony bills like this and phony diversions like this, it will siphon off attention to, contributions in and participation in vehicles that work, like the Canada pension plan. It is as if it is throttling down the emphasis on the Canada pension plan.

We, when we form government in 2015, intend to undertake a comprehensive overhaul of the Canada pension plan, which will be meaningful support in old age security for Canadians. It has been charted out and it is part of our platform. It will be the most effective investment vehicle ever. Even if the Canadian pension plan as we know it were doubled, as being proposed by the NDP, the total old age security coming from that would still be less than social security in the United States. Social security in the United States has a maximum benefit of about $30,000 a year. If we take the CPP as it is today, even adding on the old age security of under $7,000 a year, that still only comes up to about $19,000 a year. We are well behind other countries, even the United States, in our social security benefits for seniors.

It frustrates me how disingenuous the Conservatives are when they introduce a bill that purports to be a pension plan for ordinary Canadians. I just heard the member for Don Valley West saying that his employees could never have a pension plan if it were not for this. He said that he had worked for years and all his employees never had any benefits. Maybe if he had given them a raise in pay they would have been able to buy some old age security. Why did the member not put a pension plan in his company? That is what we used to do in the old days, we had corporate social responsibility. We had capitalists with a social conscience. That seems to be gone.

Capital has no conscience. If it were not for the NDP here to impose some conscience into that party, it would just be following loyally and faithfully behind the Business Council on National Issues, the Canadian Taxpayers Federation and all the other dummy outfits that undermine the basic needs of Canadians for their own selfish self-interest.

We can look at the handout this is to the financial sector. We can look at the dough they will make by managing all this dough again. It is appalling, frankly, how they gouge, and the percentages they take for moving money around. The best bargain is the Canada pension plan with an operating cost of less than 1%.

This bill diminishes and undermines the systems that work and would put in place a system that will not be effective and will be no better than issuing a piggy bank. The Conservatives might as well give every Canadian a piggy bank and say, “I know you have not had a raise for seven or eight years but here is a piggy bank. Put more money into it and you will have more money to spend when you retire.”

That is not creative. There are no financial geniuses over there. That is like pulling a sedated rabbit out of a tattered old top hat and trying to convince people it is magic. It is not magic.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:30 p.m.

Conservative

Robert Sopuck Conservative Dauphin—Swan River—Marquette, MB

Mr. Speaker, one does not know where to begin except to correct my hon. friend across the way.

The Parliamentary Secretary to the Minister of Finance is the female member from Saint Boniface, an MP we are all very proud of.

I would also remind the member of that great saying, “Socialism works until you run out of other people’s money to spend”. Many countries in Europe are finding out that other people simply do not have any money.

Given the member's evident disdain for corporations and the corporate world, when will the member be making the recommendation to all of his union friends and the unions he knows and purports to represent that they should divest all of their pension funds from the nasty corporations, especially the energy and financial corporations?

Will the member have the courage to recommend that kind of divesture?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:30 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I am very proud of the years that I have spent negotiating on behalf of ordinary working people as a trade unionist. We believe that fair wages and benefits benefit the whole community.

I was in the United States recently and saw a bumper sticker that read, “At the least the war on the middle class is going well”. That is about the size of it. There is a war on the middle-class. For some reason, the government is trying to lower our expectations so we will accept globalization unquestioningly, that we have to expect less and that there is no way we can afford a living wage, fair wages or to live as well as our parents did.

On this side of the House, we have dedicated our lives to elevating the standard of wages and working conditions for working people. That side of the House seems determined to undermine and diminish the wages and standard of living of Canadians. Why would anyone elect a government that would cut his or her wages? We had this debate yesterday on the Fair Wages and Hours of Labour Act. It seems it is one thing after another. It is this war on labour on the left.

In whose interest is it to undermine the retirement and social security of Canadians by pieces of paper like this that are not worthy of the consideration of the chamber? Legacy costs are not the answer.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:30 p.m.

NDP

Marjolaine Boutin-Sweet NDP Hochelaga, QC

Mr. Speaker, 74% of Canadians do not contribute to RRSPs, mainly because they cannot afford to.

In my hon. colleague's opinion, why do the Conservatives believe that people could afford this program more than an RRSP?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:30 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I believe the figure is 64% of Canadians made no contributions to RRSPs. They do not have the money. They cannot afford it. This is another instrument that would encourage them to save more. It is like pushing the onus on individuals. I do not mind individuals standing up for themselves in their own best interests, but if they do not have the money to save currently, where will they find the money to contribute to this new savings scheme?

There is nothing that adds to the retirement security of ordinary Canadians in this bill. It is an illusion. As I say, it is not sorcery. It is bad magic. The government is trying to snow Canadians by putting the words “pension plan” in the title of a bill. It has nothing to do with a pension plan. It is a phony piece of work. Canadians should not fall for it. They deserve better.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:30 p.m.

Conservative

James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, I always enjoy listening to my friend across the way. I rarely agree with him, but I do enjoy listening to him.

I want to get back to the bill itself and the pooled registered pension plan. He talked about labour. In fact, Mr. Phil Benson with Teamsters Canada made a presentation to the committee on this bill and he put forward some very practical suggestions in terms of dealing with it at the regulatory stage. I will Mr. Benson. He stated:

No single solution will resolve the retirement savings issue. I think the PRPP proposal will move the ball closer to the goal line. Improving savings, reducing risk, and reducing costs is a winning formula. We think our suggestions will make this an even better product.

Would the member opposite, who has a very strong labour background, respond to the endorsement by Mr. Phil Benson with Teamsters Canada of the pooled registered pension plan? This is a very large union in Canada that has endorsed our government's initiative with respect to providing retirement options for people, particularly the 60% of Canadians who do not currently have a retirement option.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:35 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, if we are trading quotes, I will read what this guy from the EES Financial Services, a mutual fund fee organization, said. He stated:

In general terms, the PRPP program is no different than an RRSP. Contributions generate tax deductions, enable tax-deferred growth, tax is payable on withdrawals and for the most part, will be invested in mutual funds – pooled investments that according to a 2006 report...are subject to far higher fees in Canada than in any other country. It’s no wonder the investment and insurance industries are applauding the introduction of PRPPs.

It is like handing over a gift to Bay Street. It is like giving it a half a billion dollars worth of management fees per year to manage the investment of this new mutual fund. All this is is a glorified mutual fund. If people did not have enough money to buy an RRSP before, they probably will not have enough money to participate in this PRPP baloney.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:35 p.m.

NDP

Sylvain Chicoine NDP Châteauguay—Saint-Constant, QC

Mr. Speaker, I am pleased to speak today to Bill C-25, the Pooled Registered Pension Plans Act. I would like to say from the outset that like my colleagues from the NDP and from all the opposition parties, I am very disappointed in this bill, because contrary to what the title suggests, this can hardly be called a pooled pension plan.

Before getting into the details of the bill, I would like to put into context the situation with pension plans and the Canadians who are depending on them. According to the Conference Board of Canada, 1.6 million seniors in Canada are living below the poverty line, and this bill will do nothing to help them. What is more, according to the Canadian Labour Congress, 12 million Canadians lack a workplace pension plan. Unfortunately, we do not believe that this bill will do much to help those 12 million Canadians gain access to a pension plan either.

By OECD standards, the CPP and QPP systems are relatively inadequate. Other similar countries have guarantees and much more generous public pension plans than ours. In the United States, maximum social security benefits are about $30,000 a year. Here in Canada they are about $12,000 a year and, if we add the $7,000 a year from old age security for the less fortunate, that is still far from what is being done in the United States.

According to the Canadian Centre for Policy Alternatives, most Canadian workers do not have RRSPs. Over the past few years, only roughly 25% of Canadians have contributed to their RRSP, which is far from what it should be. That suggests that, unfortunately, Canadians do not have the means to contribute.

In fact, I am disappointed because this bill will simply create a new type of savings plan enabling the funds from plan members' accounts to be pooled in order to reduce the costs associated with the management of investments and of the plan itself. The program is called a pooled registered pension plan, but it would be more appropriate to call it a savings plan, because this bill cannot guarantee that it will provide any retirement income.

This bill is designed for self-employed individuals and employees of small and medium-sized businesses, which are often unable to manage a private sector pension plan. The system created by the passage of this legislation would be a defined contribution plan. Employees would contribute a portion of their earnings to a retirement fund, and that money would be invested in stocks, bonds, mutual funds, and so on. Some companies might match their employees' contributions, up to a certain percentage.

The account grows through contributions and investment income until retirement. However, with this kind of defined contribution plan, there can be no guarantee about the amount of money that will be available upon retirement. Thus, it is the individual, the employee, who assumes all of the risks associated with the investments. With this kind of system, the amount of money available upon retirement depends on market fluctuations, and markets have not exactly been stable over the past 10 years. I invested in RRSPs and I have less money now than when I invested 10 years ago. These investments are not reliable; they are risky.

Defined contribution plans do not provide the same level of income security as defined benefit plans, such as the CPP and the QPP, which guarantee a certain payout upon retirement. Pooled registered pension plans would be managed by regulated financial institutions, such as banks, insurance companies and investment companies. The latest numbers on CPP investment returns show that the plan has lost hardly any ground over the past few years—less than 1%—while the stock markets, in which the government wants Canadians to invest their savings through pooled registered pension plans, have declined by about 11%.

Pooled registered pension plans will not provide workers with greater retirement income security because they will simply encourage families to gamble their retirement savings on the stock market, which often goes down instead of up.

As I said, anyone who has ever watched his RRSP take a dive knows how risky it is to invest his savings in the stock market. The government is so out of touch with reality that it is encouraging families to double down on what has turned out to be a system that does not work very well. With such an unstable economy, families do not need to take on any more risk. They need the stability of the Canada pension plan and the Quebec pension plan. Many economists and provincial leaders have said as much over the past few years, but the government has turned its back on families and refused to consider this solution.

Bill C-25 does not cap administrative fees or costs and assumes that competition will keep costs low. Once again, the government is dreaming in colour because it is relying on the invisible hand of the market and hoping that that alone will keep administrative costs and fees as low as possible, but as the Australian experience proves, that hope is in vain. More than 10 years ago, Australia created a similar plan. The results were disappointing, to say the least. The plan had been in existence for 12 years when the Australian government-ordered review of it showed that even though people were saving money through mandatory contributions, the returns on their investments were no greater than inflation. In many years, returns were lower than inflation.

The report attributed these disappointing results to the very high costs, despite the fact that it was originally thought that competition among companies would lead to lower costs. That was unfortunately not the case. However, the Conservatives do not want to learn from the Australians' experience, which was essentially a failure. With this bill, the government would rather hide behind its ideological ideas and make decisions without truly examining the issue.

In six years, the government has unfortunately not done much to help provide security for Canadian retirees. This bill appears to have been hastily drafted in response to pressure from union groups, seniors' groups and political parties, particularly the NDP, which, after the last election campaign, proposed an increase in Canada pension plan and Quebec pension plan benefits.

Bill C-25 is a half measure, when what we truly need is some real, concrete action. Canadians deserve and want more than what the government is proposing. Once again, the Prime Minister is putting the interests of Bay Street giants and insurance companies ahead of the interests of Canadians. It is time for the government to take real action to increase the number of Canadians who have access to retirement security and to lower the current number of 12 million Canadians who do not have access to these plans. Bill C-25 will not help achieve that objective.

Canadians do not need new private, voluntary savings plans. They really need concrete measures to ensure that they will be able to retire with dignity.

The NDP is proposing doubling the benefits provided by the Canada pension plan and the Quebec pension plan to a maximum of close to $2,000 a month. The NDP wants to work with the provinces to make it easier for workers and employers who want to make voluntary contributions to individual public pension accounts. The NDP also wants to amend federal bankruptcy legislation to move pensioners and long-term disability recipients to the front of the line of creditors when their employers file for bankruptcy protection. The NDP also wants to increase the annual guaranteed income supplement in order to lift every senior in Canada out of poverty immediately.

The NDP understands that Canadians want more than what the government is proposing with the pooled registered pension plan. The NDP will obviously not support this bill because it merely offers a new type of savings plan and does not even come close to solving the problem of making pension plans accessible.

In closing, the NDP urges the government to abandon Bill C-25 at third reading and to come up with a real plan that will help the 12 million Canadians who do not have a pension plan and the 16 million seniors who are living below the poverty line.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:45 p.m.

NDP

Matthew Dubé NDP Chambly—Borduas, QC

Mr. Speaker, I would first like to congratulate my colleague on his speech. I would like him to say a little more about how we can protect pensions. He gave the example of an individual who invests in RRSPs for 10 years and loses money when the value of the RRSPs then falls. So we lose money we invest for our retirement. He also said the measures proposed in the bill do nothing to provide better protection.

In addition, we might think of examples like Nortel, where the corporation came ahead of the employees. My colleague is certainly aware of that case. When we talk about retirement security for people who have worked hard all their lives and who invested their money, it is extremely important to protect their retirement pension. I would like to let my colleague talk some more about how we can better protect that, so it is better than what is proposed in this bill.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:45 p.m.

NDP

Sylvain Chicoine NDP Châteauguay—Saint-Constant, QC

Mr. Speaker, I thank my colleague for his question. The example of Nortel is in fact a good example, to show how unprotected pensions are. Last year, a number of people in my riding saw their pensions cut in half as a result of the liquidation of Nortel’s assets. That is simply scandalous.

We should bring back the bill that was introduced by the NDP, which proposed putting employee pension plans ahead of creditors. That would be a very good solution to protect Canadians from bankruptcies, when cases like Nortel occur. It would be an ideal solution to protect Canadians’ pension funds. However, the government bill before us simply adds another savings plan. Apart from people who are already contributing to an RRSP, there are really no more Canadians who will be contributing to it. In our opinion, it is a waste of effort.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:45 p.m.

Conservative

Bob Zimmer Conservative Prince George—Peace River, BC

Mr. Speaker, I am confused as to why the hon. member would not take up this opportunity.

The demographic we are talking about in the pooled pension system being offered is usually a demographic that is not covered by normal pension systems. I am a little confuse as to why he would not be supportive of a measure like this since it would help people. I am curious to know what his alternative is and why he is opposed to it.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:45 p.m.

NDP

Sylvain Chicoine NDP Châteauguay—Saint-Constant, QC

Mr. Speaker, I thank my colleague for his question. There are a range of registered savings plans available. Unfortunately, companies do not use them very much. This will essentially be an additional plan being made available, but there are already numerous plans and they do not help Canadians to contribute to a pension plan.

We think the solution is to increase Canada pension plan and Quebec pension plan benefits. That would cover all Canadians, who could contribute more and benefit more from it. These plans already exist; they are defined benefit or defined contribution plans. People know what they will be getting when they retire and so that tool, which already exists, makes it is easier to plan for retirement.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:50 p.m.

Macleod Alberta

Conservative

Ted Menzies ConservativeMinister of State (Finance)

Mr. Speaker, it is a pleasure to stand and take us through to the beginning of question period.

I have listened to many of the debate today, or the false information, I would suggest to you, Mr. Speaker, and I am sure you have been able to recognize this, having listened to many of these debates. We have certainly given this fulsome debate in the House as well as in committee. We have brought in witnesses who talked about the benefits of the pooled registered pension plan.

It has been said many times, but not enough and it deserves repeating, that this will be a low-cost option to those Canadians, 60% of those in the workforce, who do not now have available to them a workforce pension plan that their employer can choose to contribute on their behalf. That is the option of the employer.

We, on this side of the House, think that option is exactly what our businesses want. They have asked us for an opportunity so they can choose to offer this pension option, this retirement option, this savings option to their employees and, if so, they can choose to contribute as well on their behalf.

We see it as accessible, which has been mentioned many times, by any Canadian. In many forums I have been asked if this is this only for small businesses. Absolutely not. It is available to any business that chooses to offer it.

For the first time in history, this is available to self-employed Canadians who can contribute to their retirement. A lot of self-employed Canadians have not had the option to become part of a larger pool at low cost, where the administration costs are low.

I have heard lots of comments from the other side that are very much ill-informed. Canada has been accused of having very high MER rates, management expense ratios, to put it in layman's terms, and of course the industry will complain that those are required because of the complications of the pensions they offer.

We have simplified it down so the parties that are interested, once they qualify, in offering the pooled registered pension plans. They have told us that they can bring their costs down very low.

We are trying to provide a realistic low-cost option so Canadians can actually participate in a larger pool, the same type of pool that the Canada pension plan and the Quebec pension plan is. That is what makes sense for Canadians.

The NDP continues to harp on the fact that all we should do is double the Canada pension plan. That absolutely negates the position in which many Canadians are. They do not want another mandatory reduction from their paycheque, and it would be mandatory, because that is the makeup of the Canada pension plan. Many people are saving in other ways and they do not want it deducted from their paycheque.

Many businesses have said that they are struggling to hire new people and make their businesses profitable. Now is not the time to add another cost, albeit a tax, on them contributing on behalf of their employees. This gives those businesses an option if they feel comfortable to offer a savings plan for their individual employees. That is very important.

We have a very good system in our country. The NDP loves to talk down our economy, our seniors and what a great country this is in which to live. We should be proud of the fact that we have a great country, a great financial system and a great retirement system for our seniors. It is the envy of the world.

I have spoken at many pension conferences in Canada and around the world, and I have also listened. Many approach us and ask how we have done it in Canada and could they follow our model. Many have asked about the pooled registered pension plan. They think it is a good idea and they would like to adopt it in their countries. Some people recognize that, but obviously not the opposition.

The opposition members stand over there and say that we have done little for seniors. We have done a lot for seniors. We have given the largest increase in the guaranteed income supplement for those low-income seniors. We on this side of the House thought that was a great idea. Apparently, the NDP did not like it because its members voted against it. They stand in here and say that they support seniors, yet they voted to keep them as low-income seniors. That is an incredible position for them to take.

We have the Canada pension plan. As I have said before, it is actuarially sound for 75 years. We co-share the jurisdiction of that with the provinces. It is in good shape. We have discussed whether we can increase that, and that discussion continues among our officials. As well, the Quebec pension plan is there for seniors.

We have the tax-assisted registered pension plans and registered retirement savings plans. Those are good. They have had some struggles, but, over the years, averaged out, they have done well.

However, we think there is an option that is missing, and that is the option for so many of our Canadian workers who do not have that.

In the last few minutes I have, let me just share a bit of the chronology from where we started.

In 2008, when we saw some of the insolvent pension funds in trouble, we realized we needed to look at those that were federally regulated. The Pension Benefits Standards Act had not been changed since 1985. We took a serious look at that, through consultation. We have improved that to protect the federally-regulated ones. We moved from there. We saw the challenges that individual pension funds were facing, so we moved to make improvements to them through a working group.

We did extensive analysis and we found out what segment of the Canadian population was not saving enough for their retirement. This is directed toward the middle section of income earners who need the support to help them save. This process will help them save and they are sharing in the contributions for that. Most Canadians think that is only fair that they help save for their own retirement.

We know the socialists love to share everybody else's money but their own. We would like to suggest that is probably not the way most Canadians think.

We have shared this challenge with our partners, the provinces.

I mentioned earlier how progressive the Quebec government had been on this. In fact, in its last two budgets, it has addressed this. It wants to move forward with it.

It is very unfortunate that the NDP is the sole roadblock in us being able to move forward, the Quebec government being able to move forward and other governments that actually want to put in place mirror legislation to this so we are able to provide pooled registered pension plans to those Canadians who want them and those Canadians who need them.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:55 p.m.

The Acting Speaker Barry Devolin

Order, please. The time for government orders has expired. The hon. minister of state will have 11 minutes remaining when this matter returns before the House.

The House resumed from June 7 consideration of the motion that Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, be read the third time and passed, and of the motion that this question be now put.

Pooled Registered Pension Plans ActGovernment Orders

June 11th, 2012 / 5:40 p.m.

NDP

Lysane Blanchette-Lamothe NDP Pierrefonds—Dollard, QC

Mr. Speaker, as the official opposition critic for seniors, I am pleased to speak to Bill C-25 today.

I must begin by mentioning what our dear Prime Minister said a few months ago in Switzerland. During a speech, he said that Canada's aging population is a problem and that if the government does not tackle the problem, it may have even more serious consequences than the recent economic crises.

First, I would like to express the NDP's official position that the aging population is not a problem; it is a situation. And it is not a surprise situation. We have seen it coming for a long time. Today's 60- and 70-year-olds were not born yesterday. Not only is this not a problem, but I think we can view it as an asset. Canada's seniors are a tremendous resource. They have experience and they share their knowledge and experience. These people volunteer in their communities and in politics, and they spend precious time with their families. No matter how numerous our seniors, they are not a problem for our country.

Today, we should not be attacking the aging population, but we should simply know how to adapt. Yes, there are things that need to be done in this regard. As a country, we need to adapt to ensure that everyone can continue to live well and with dignity. We have known about and seen this demographic trend coming for a long time. One way to adapt is to ensure that the seniors of tomorrow will have reliable pension programs and, we hope, financial security that will enable them to live many more years after retirement in dignity and happiness.

Generally speaking, the fact that today we are talking about a bill on one specific pension program is good news because it means that Parliament is addressing the issue and wondering how it can help people retire with dignity.

However, there is something we do not agree on, and that is how to adapt and what tools to give people to ensure that they will be able to have a pleasant retirement.

What do people want exactly? I think that is a basic question that needs to be asked. What is the problem on the ground? What do people expect the government to do to help them?

I travelled all over Quebec. I visited over 30 towns and cities. People went out of their way specifically to address the issue of seniors' financial security. I heard a number of concerns, questions and fears. I would like to share some of them here today.

First of all, old age security is an important part of Canada's overall pension system. Old age security is universal. Everyone is entitled to receive it when they turn 65. Everyone counts on it, especially middle-income families and people who live below the poverty line—people who do not make enough money to set some aside in savings plans, people who have had an accident, people who have had to stop working for an extended period of time and perhaps have been unable to return to the labour market, people who were laid off at age 55 or 60 and who have not been able to find another job.

Old age security is an essential part of the system, and because of it, Canada can count itself among those countries that have a smaller percentage of seniors living in poverty. Despite that, there are plans to raise the age of eligibility for the program, which will unfortunately increase poverty among seniors. We have talked a lot about this issue. Given that this is not our primary focus here today, I will move on to some of the other subjects before us.

The Canada pension plan, much likes its equivalent in Quebec, is a pension plan that serves all workers. Regardless of the number of hours a person works and no matter what kind of employer he or she works for, everyone who accumulates hours of work contributes to the Canada pension plan or Quebec pension plan. Depending on the number of hours worked and the wages earned, everyone is entitled to receive a certain amount of money. However, this Canada pension plan payment is not enough to replace a person's salary in any meaningful way.

It has to be supplemented by something else. What is more, the Canada pension plan and old age security do not provide Canadians comfortable financial security at retirement either.

Another type of benefit people receive at retirement is an employer provided pension plan. Unfortunately, 12 million Canadians do not have one. Unfortunately, more and more businesses are declaring bankruptcy and are not reimbursing the employees' pension plans, which the employees were counting on for their retirement. Unfortunately, in many cases, these pension plans have been mismanaged by the employers and the benefits have had to be reduced, causing a great deal of discontent.

Something can be done to help Canadians who have employer provided pension plans, but many Canadians do not. What is the government doing for those who do not have an employer provided pension plan?

Another type of savings exists and that is everything to do with RRSPs, group RRSPs, TFSAs, et cetera. Again, many Canadians cannot invest in such plans. People who work full time and earn minimum wage are living below the poverty line. They can hardly put money into an RRSP or a TFSA. I will come back to that later. Here again, more needs to be done to allow Canadians to save for their retirement.

Yes, people have expectations of their government. They have worthwhile suggestions for solving the problems in Canada's pension system. I will come back to this later.

People want a reliable pension system that will provide them with a secure retirement. And I have excellent news: we can create such a system. We have the tools. We have the resources to provide seniors with greater financial security. All that is needed is a willingness to take this issue seriously and a little political courage. Unfortunately, we see no political courage in Bill C-25. This is not a strong, effective measure that will help Canadians save for their retirement, and that is too bad.

What does Bill C-25 really do for Canadians? That is a good question, because there is not much difference between a pooled registered pension plan and an RRSP, a group RRSP or a TFSA. There is some difference, of course, but it is not big enough to ensure that the 12 million Canadians who have no workplace pension plan will be able to retire worry-free. These measures are not really going to solve the problems I talked about earlier.

At present, 12 million Canadians do not have workplace pension plans and 31% of Canadians eligible to contribute to RRSPs do so. Why do almost 60% of eligible Canadians not contribute to an RRSP? Have the Conservatives asked themselves this question? It is important to know the answer. PRPPs and RRSPs are very similar. We have to wonder why Canadians who can contribute to an RRSP do not currently do so. Perhaps they would not contribute to PRPPs for the same reasons. It is important to ask the question.

Here is another statistic: 41% of Canadians have a TFSA. Why do approximately 60% of Canadians not have one? It is very pertinent to ask this question because, once again, if people have trouble making ends meet, and do not have enough income to live on and to support their children, they probably could not put money into a PRPP any more than they could into a TFSA or an RRSP.

Furthermore, 50% of Canadians who have a TFSA earn $100,000 or more.

Once again, what are we going to do for these middle- and low-income Canadians who have no retirement security. Is there a better way to help them than setting up a pooled registered pension plan?

Some countries have tried to implement PRPPs but have failed, whereas other countries have been successful. Let me expand on that. For instance, New Zealand and the United Kingdom implemented pooled registered pension plans and they were successful.

That makes you think. What are the differences between the program implemented in those countries and the program that the Conservatives want to implement? The biggest difference is that, in New Zealand and the United Kingdom, employers are required to contribute if the employee does. So it is a very attractive incentive for employees and it increases the amount of money that people can get after they retire. That has encourage with RRSPs or TFSAs, for example. Neither do we find it in the pooled registered pension plan proposed in Bill C-25.

In New Zealand and the United Kingdom, another incentive for people to contribute to pension plans is that the state provides a tax break or pays a bonus to employees who contribute to their pooled registered pension plans.

Countries that have had success with that kind of pension plan have much stronger, much more solid incentives and restrictions. I am not saying that a pooled registered pension plan would be the best solution, but I do want to stress that there are ways to make the tool much more attractive and much more effective.

In a number of cases, we wonder why the government is proposing a solution of this kind. I suggest a comparison with another situation that is being talked about a lot these days, the increase in the age of eligibility for old age security.

Why raise it by two years? A lot of questions remain for which we have no answers. By “we”, I do not just mean my colleagues and I, I also mean experts who also have no explanation as to why the government is moving in that direction.

First of all, what were the government's objectives for old age security? The government tells us that the program is not sustainable, but a number of experts say that indeed it is. Can we have the figures and the calculations? What is the objective that the Conservatives are trying to achieve by raising the age of eligibility for old age security. How much money do they feel is needed to make the program sustainable? We do not know.

The other day, an hon. member opposite told me that it is about plain old common sense, of very simple math. I am sorry, but calculations and arguments like that are not very convincing. Can you identify a clear problem and propose clear objectives that would allow us to analyze the various options and act accordingly?

What other options are being studied? There are other options. A bill presents one option to us, but what other options have been looked at? Why this option for the PRPP and not another? Why would another option not work? These are questions that have to be asked but have not been answered. It is difficult to work co-operatively and to propose specific initiatives when we have no idea of the basic objectives. What other options have really been studied? Why was this one chosen rather than another?

Lastly, what will the short-term, medium-term and long-term repercussions be? In other countries, an option like that was studied, put in place and did not work. Why would it be any different in Canada, with Bill C-25? I expect to get some very interesting answers. What can we do to ensure that it will work this time in Canada, when it has not worked in other countries?

It is a well-known fact that the NDP is proposing a solution other than the one proposed in Bill C-25. It proposes doubling the Canada pension plan and Quebec pension plan benefits, rather than create a PRPP, first because of the management costs. How much will the management costs be for a PRPP? Once again, we do not really have an answer. The number is approximate, but it is certainly higher than the costs of managing the Canada pension plan. Then, it is much more egalitarian for certain segments of the population.

One of the examples I like to give is the example of women. The Canada pension plan takes into account the obligation of women to leave the work force if they have a child and the obligation of people to leave the work force if, for example, they have to take care of a family member who is ill. Women are often the ones who do that as well. A pooled registered pension plan does not take those obligations into account. People who have to stop contributing during a specific period will then be penalized through reduced benefits when they retire.

The Canada pension plan is a plan where the risk is assumed by everybody and, because everyone's contributions are grouped together, it makes up for the fact that some people have to take time off for an illness or disability or for family reasons.

Introducing PRPPs instead of improving CPP will lead to an increase in poverty among women. I do not think I need to go on at length about this, but there is much more poverty among senior women than senior men. Something must be done about this. It has to be taken into account. It cannot be ignored. It is a problem the government has to be sensitive to.

Risk sharing is also important. With CPP, everyone shares the risk, but with a PRPP, a single individual assumes the risk. I want to come back to what will happen to someone who lives longer. Since a PRPP is not a defined benefit plan, this person knows how much he is putting into the plan, but not how much he will get out of it. There is certainly a fixed amount. This means that someone who lives a long life will have to figure out how to manage his portfolio so that he has enough money to live on for the rest of his days. What are we saying? Should we hope that this person does not live too long, or else he will pay through the nose and live in poverty? It makes no sense. We can avoid this sort of situation by enhancing CPP.

The same applies to someone who becomes disabled at 58, for example. That person has to stop contributing and will be penalized. The individual has to bear all of the risk, but that risk could be shared by improving the Canada Pension Plan.

I still have so much to say, but I think I will end with some good news.

Canadians want to know that this is not the only way to do things. The Conservatives often argue that if they do not take this step, our economy will crumble and we will end up like this or that other country. That is not true. There are many ways to run a country and many ways to address a problem. There are alternatives to Bill C-25. As I mentioned earlier, the government could double Canada pension plan benefits. We think that can and should be done to ensure financial security for as many seniors as possible.

The government could also increase the guaranteed income supplement. I have talked at length about poverty among seniors. Currently, the government does not provide seniors with enough money to get them out of poverty. Seniors have to choose between buying food and buying medication. That is unacceptable in our society. The government should increase the guaranteed income supplement to ensure a certain level of dignity for our seniors.

There are still more things the government could do: leaving the old age security age at 65 is an obvious one for the NDP. Protecting employer-managed pensions and amending Canada's Bankruptcy and Insolvency Act are other options. There are many good things the government could do to ensure financial security for retired Canadians.

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June 11th, 2012 / 6 p.m.

Conservative

Harold Albrecht Conservative Kitchener—Conestoga, ON

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

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

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

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June 11th, 2012 / 6 p.m.

NDP

Lysane Blanchette-Lamothe NDP Pierrefonds—Dollard, QC

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

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

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

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June 11th, 2012 / 6 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

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

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

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

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

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June 11th, 2012 / 6:05 p.m.

NDP

Lysane Blanchette-Lamothe NDP Pierrefonds—Dollard, QC

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

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

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

We can add PRPPs to that list.

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

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June 11th, 2012 / 6:05 p.m.

NDP

Rathika Sitsabaiesan NDP Scarborough—Rouge River, ON

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

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

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

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

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June 11th, 2012 / 6:05 p.m.

NDP

Lysane Blanchette-Lamothe NDP Pierrefonds—Dollard, QC

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

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

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

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

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June 11th, 2012 / 6:05 p.m.

Independent

Bruce Hyer Independent Thunder Bay—Superior North, ON

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

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

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

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June 11th, 2012 / 6:05 p.m.

NDP

Lysane Blanchette-Lamothe NDP Pierrefonds—Dollard, QC

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

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

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

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June 11th, 2012 / 6:10 p.m.

Conservative

Joe Preston Conservative Elgin—Middlesex—London, ON

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Canadian Chamber of Commerce stated that this legislation:

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

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

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

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

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

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June 11th, 2012 / 6:20 p.m.

NDP

Andrew Cash NDP Davenport, ON

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

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

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June 11th, 2012 / 6:20 p.m.

Conservative

Joe Preston Conservative Elgin—Middlesex—London, ON

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

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

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June 11th, 2012 / 6:20 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

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

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

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June 11th, 2012 / 6:20 p.m.

Conservative

Joe Preston Conservative Elgin—Middlesex—London, ON

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

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

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June 11th, 2012 / 6:20 p.m.

Conservative

Ed Holder Conservative London West, ON

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

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

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June 11th, 2012 / 6:25 p.m.

Conservative

Joe Preston Conservative Elgin—Middlesex—London, ON

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

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

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June 11th, 2012 / 6:25 p.m.

The Acting Speaker Bruce Stanton

Before I call on the hon. member for Chambly—Borduas, I must inform him that I will have to interrupt him at 6:30 p.m., at the conclusion of today's government business.

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June 11th, 2012 / 6:25 p.m.

NDP

Matthew Dubé NDP Chambly—Borduas, QC

Mr. Speaker, thank you for your kind warning.

My speech will be very similar to that of the hon. member for Pierrefonds—Dollard. The simple reason is that the public consultations that she carried out in Quebec with the hon. member for Marc-Aurèle-Fortin were also held in my riding. Many of the comments that she heard about the problems facing our seniors or those retiring soon are the same comments that I have heard. And when we think about it, this affects everyone.

I would like to use the short time that I have to talk about that and to explain why we think the measures proposed in Bill C-25 are not appropriate.

That is basically it. We are not saying that this bill is a travesty. We simply want to provide people who are going to retire or who already have retired with better tools.

What this bill is proposing is very similar to what we already have, such as RRSPs. What is more, we have been given very little information. We do not know the administrative costs associated with this plan. The employer is not required to contribute to the plan, something that is done in many other countries. The pension plans of the largest corporations require the employer to make a certain contribution. There are many problems with all this.

The NDP believes that these measures are not appropriate at this time, especially when the eligibility age for old age security is being increased from 65 to 67.

We saw with RRSPs what can happen when people are asked to invest their pensions in the stock market. That is what happened in 2008.

Many Canadians were rather fortunate compared to Americans. Nonetheless, people have been seriously affected. At the very least, we cannot downplay the importance of all this. People invested in RRSPs for 10 years and saw their investments dwindle. When it comes to retirement security, that is not the norm in a country such as ours. Members will recall the case of Nortel, where there were no provisions in place to guarantee people's pensions.

In the last minute I have left, I would like to say that in talking to people, their main complaint was that they were tired of investing in the market and not having retirement security. They said that they want to have the support of a system in which they can invest, such as old age security and the guaranteed income supplement.

The guaranteed income supplement is a very important tool. We in the NDP would like to increase the GIS. With a very small investment, we could lift most seniors living below the poverty line above that line and enable them to live in dignity. That is what the people in my riding and many other ridings told us.

We oppose this bill because it is not the right tool in the current economic situation. There are much better tools. That is what the NDP would do if it formed the government.

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June 11th, 2012 / 6:30 p.m.

The Acting Speaker Bruce Stanton

The hon. member for Chambly—Borduas will have six minutes to finish his speech and another five minutes for questions and comments when the House resumes debate on the motion.

The House resumed from June 11 consideration of the motion that Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, be read the third time and passed, and of the motion that this question be now put.

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June 12th, 2012 / 11:55 a.m.

Conservative

Mark Adler Conservative York Centre, ON

Madam Speaker, it is my great pleasure to rise today to speak to Bill C-25, the pooled registered pension plan.

I want to congratulate the Minister of State for Finance on the amazing and wonderful work he has done on this bill and on chairing the committee headed up by the minister and all the provincial finance ministers. I want to congratulate him on his efforts in guiding this bill through the House of Commons.

I have been a member of Parliament now for a little over a year. What has really struck me in my time here so far is the negativity I hear from across the aisle from the nattering nabobs of negativism. No matter how good a public policy initiative is coming out of this government—

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June 12th, 2012 / 11:55 a.m.

An hon. member

It's all good.

Pooled Registered Pension PlansGovernment Orders

June 12th, 2012 / 11:55 a.m.

Conservative

Mark Adler Conservative York Centre, ON

—and it is all good, the members opposite oppose it.

I am reminded of the movie A Few Good Men. Jack Nicholson is on the stand and is being cross-examined by Tom Cruise. Tom Cruise says, “I want the truth”, and Jack Nicholson barks back, “You can't handle the truth”. Those are the people we are opposing on the other side of the House. They cannot handle the truth. They prefer to live with Tattoo on Fantasy Island, and those in the third party, well, they are just Lost in Space.

As a government, we have the responsibility to make decisions. We have a heavy burden on this side. We are the only party standing in the way of the NDP forming government. That is a very heavy burden, one which we do not take lightly.

We on this side are not concerned about 2015. We hear about the NDP and its rush to form government in 2015. In fact, I hear it is even cornering the market on orange carpeting for their ministerial offices already. Let me say one thing. We on this side are not concerned about 2015. We are concerned about 2020, 2030, 2040, 2050. The legislation we are proposing is not just to get us to the next election. We are proposing legislation that is good for our children, our grandchildren and our great-grandchildren for generations to come.

Before I speak specifically to the bill, I will talk about where we are in terms of our economic situation. We are number one in the G8 in terms of economic performance.

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June 12th, 2012 / 11:55 a.m.

An hon. member

Thanks to this government.

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June 12th, 2012 / 11:55 a.m.

Conservative

Mark Adler Conservative York Centre, ON

The member is right. It is thanks to this government.

We have recovered all of the jobs that we lost during the recession. Since July 2009, we have created 765,000 net new jobs. The World Economic Forum says we have the strongest financial and banking system of any country around the world. Forbes magazine says we are the best place to do business.

A few months ago, Governor Branstad of Iowa said on Meet the Press, “The Canadian government has reduced their corporate income tax to 15%. I've had companies that I've called on in Chicago to come to Iowa say, 'We like Iowa, but if they don't change the federal corporate income tax, we're probably going to go to Canada'”.

It is all about the profits, and with profits come jobs. Moody's has given us a AAA credit rating again, as has Fitch.

Our strong economy, the jobs we have recovered and being number one in the G8 are not good enough. We are not standing still with that. I will be speaking to Bill C-38, the budget implementation bill, tomorrow.

Everything we do on this side of the House, every legislative initiative, has a purpose. Everything is tied together. It is part of our comprehensive plan. Again, it is for Canada's future. We are investing in Canada's future, in our people, not in the next election.

With respect to our retirement system, we have identified that 60% of Canadians will not have a sufficient amount of money to retire. That is unacceptable to the government. That is why we have put forward Bill C-25, the pooled registered pension plans act. Under this plan, we will add a fourth pillar to the retirement income system that we have.

Let us take a look at our retirement income system as it stands today. We have the OAS and the GIS. We increased the GIS in last year's budget by 25%, the largest increase in the history of the GIS, and it was opposed not once but twice by the opposition. In fact, the first time the opposition forced an election because it was opposed to the initiatives we had in our budget, particularly those to create jobs and to help seniors.

The second pillar is the CPP and the QPP. Both are actuarially sound, yet we still took time to improve the CPP under its mandatory five-year review.

The third pillar is the RPP and the RRSP. The RRSP is an interesting vehicle. That vehicle is open to all Canadians; however, we find that $600 billion is underfunded in the RRSP. This indicates that people are not saving enough for retirement. That is a problem.

What else have we done to help seniors in this country? We have given them, on average, $2.3 billion in tax relief. We have given our seniors pension income splitting. We have doubled the maximum amount of income eligible for pension income credit. We have established the TFSA.

The PRPP is needed in our country. I will close with a personal anecdote. My father was an immigrant to the country and he worked hard. I remember when I was a young fellow looking through the window late at night, waiting for my father to come home. He would pull up in the car, which had a very distinctive sound. I remember running to the window and watching him get out of the car. He was so tired he could barely drag himself out of the car and get into the house.

My father did not have a retirement income mechanism in place at the time. My father has since passed away. My father owned a shoe store and had one employee. It was a small business. This would have been so beneficial for him and his family, and for the employee and her family.

This is the kind of country we are trying to create in Canada, where our seniors have a proper amount of income so that they can retire in dignity and live a full life of quality.

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June 12th, 2012 / 12:05 p.m.

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Mr. Speaker, just to extend the analogy in regard to A Few Good Men, it might be remembered by this House that the Jack Nicholson character was found guilty of supporting heinous and violent crimes.

I did want to ask a question in regard to the fact that only about 30% of Canadians have the fiscal ability to put savings into RRSPs. Unfortunately, over a 40- to 45-year period, the RRSP is reduced significantly. About 40% of the money that goes in goes to pay fees to the financial institution.

I wonder if the member opposite would like to circle that square.

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June 12th, 2012 / 12:05 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Mr. Speaker, I do not know if it is geometrically possible to circle a square.

The hon. member raises a rather interesting question because she seems to be offering more of an answer. She said that 30% of people cannot invest in an RRSP, which is all the more reason that we need a PRPP.

The hon. members on the other side are proposing an increase to the CPP. They do not understand two things. One, we need to have the agreement of two-thirds of the provinces representing two-thirds of the population to make any changes to the CPP mechanism. Two, CPP comes out of people's paycheques. This would be just another tax on people, which would be a job killer, which the NDP would probably support in any event.

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June 12th, 2012 / 12:05 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, my distinguished colleague is talking about a plan that will guarantee pensions, but what is the point of a pension plan when we do not know how much money it will generate? That is a major problem.

People know exactly how much they will have to pay every month, but the amount they will get out of the plan after 30 or 40 years remains a complete mystery since the employer will choose who administers the plan and the level of risk of the investment. Employees may have to invest in a high-risk plan without having any say in the matter.

Is that what the government calls planning for retirement? Is that what the government calls planning a pension income?

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June 12th, 2012 / 12:05 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Mr. Speaker, it is pure speculation on the part of the hon. member to say that. He clearly does not know the facts. He has not read the legislation.

There is a strict regime in place. That is why they are called pooled registered pension plans. They will be pooled. Administrative costs will be kept down. This is what Canada needs. This is what our seniors need to live a life of quality and dignity.

We owe our seniors so much in this country. This government recognizes that. This government is prepared to do something about it, unlike those people on the other side.

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June 12th, 2012 / 12:05 p.m.

Liberal

Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, as a supporter of this particular initiative for all the reasons that were outlined throughout this debate, some of it is pretty good. The idea of pooling pensions and the risk taken is mitigated as a result of this, no problem.

However, would the hon. member say that this is the be-all and end-all? Is there not a second part to this that the government could do, such as a supplementary CPP or something else? Is this really it for the Conservatives' economic action plan when it comes to pensions?

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June 12th, 2012 / 12:05 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Mr. Speaker, once again, we are debating Bill C-25, the pooled registered pension plans act. Any further initiatives that would be forthcoming from this government would be total speculation and conjecture at this point, and really, nobody can answer that.

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June 12th, 2012 / 12:10 p.m.

Conservative

Harold Albrecht Conservative Kitchener—Conestoga, ON

Mr. Speaker, I am pleased to have the opportunity to speak to some key measures in Bill C-25, an act that would implement the federal framework for pooled registered pension plans, or PRPPs.

This Conservative government stands with hard-working Canadians who are counting on their pension plan for a stable retirement. As part of this commitment, we continue to take the steps necessary to ensure that Canada's pension framework remains strong. In doing so, we are building on all that has been accomplished so far.

I will offer a few examples of what we have already achieved.

In 2009, we announced an improved regulatory framework to better protect members of federally-regulated pension plans. This included reducing funding volatility for defined benefit plans, making it easier for participants to negotiate changes to their pension arrangements. We ensured that pension plans were fully funded when they were terminated and we modernized the investment rules.

At the same time, the federal government, along with the provinces, agreed to a number of improvements to the Canada pension plan that would modernize the plan and would better reflect the way Canadians live, work and retire.

The hon. members on the other side should know that pensions share joint jurisdiction with the provinces. Only by continuing to work with the provinces will we make the system better. A stronger national economy must include a stronger personal retirement system built with the provinces. In fact, that is exactly what led to the development of the PRPP.

In December 2009, our government held a meeting with provincial and territorial finance ministers to discuss the retirement income system and, in going forward, how to address the issues of retirement income adequacy for all seniors.

In June 2010, federal, provincial and territorial governments agreed to develop options to improve Canada's retirement income system. One of those options was to expand the CPP. Many of the provinces raised strong objections to the idea of expanding the CPP as this would require increased contributions from employees, employers and the self-employed.

Canada's economic recovery is still fragile, and with the debt crisis in Europe still unresolved, now is simply not the time to impose a payroll tax on small and medium-sized businesses. As a former small business owner, I understand that point very well.

To be clear, it is not only our government that feels this way. According to the Canadian Federation of Independent Business:

For every one percentage point increase in CPP premiums beyond the current 9.9 per cent rate, it would cost 220,000 person-years of employment and force wages down roughly 2.5 per cent in the long run...

Simply put, an expanded CPP would hurt both small and medium-sized business owners and working Canadians. This government wants to create jobs, not destroy them.

Since expanding CPP was not feasible, priority was given to the PRPP framework. That is why at the 2010 meeting of finance ministers there was unanimous agreement on the decision to pursue a framework for pooled registered pension plans.

The PRPP will mark a significant step forward in advancing our retirement income agenda by improving the range of retirement savings options available to Canadians. They will make well-regulated, low-cost private sector pension plans accessible to millions of Canadians who, up to now, have not had access to such plans. In fact, many employees of small and medium-sized businesses and self-employed workers will now have access to a private pension plan for the first time.

For many years, I operated a private dental practice in Kitchener and employed up to five people. It would have been impossible for me to enrol in a pension plan on behalf of my employees. However, I would have liked nothing better than to access a pooled program in which, by putting our resources together with a number of employers, we could have accessed a pooled registered pension plan.

We can think of other businesses. My colleague mentioned a shoe store. I can think of small engine repair shops, farm implement dealers and hairdressers. We can go on with the number of small and medium-sized employers that would benefit from a measure like we have proposed. When they look for employees, they compete on the employment market and the ability to offer a good pension plan to an employee, in addition to an attractive salary and benefit plan, would go a long way in competing for the best and brightest people who could help to move their companies ahead.

This is an important part of gaining access to pension options and this access to pension options is a key improvement to Canada's retirement income system.

PRPPs will also complement and support the Government of Canada's overarching objective of creating and sustaining jobs, leveraging business investment, securing our economic recovery and encouraging sustainable private sector driven growth, an objective I wish members opposite would understand and support.

Quite simply, the PRPP framework is the most effective and targeted way to address the prime areas for improvement identified by provincial and federal governments in our recent review of the retirement income system, modest and middle-income individuals who do not have access to employer sponsored pension plans.

PRPPs would address this gap in the retirement system by providing a new, accessible, straightforward and administratively low-cost retirement option for employers to offer their employees. It would also allow individuals who currently may not participate in a pension plan, such as those self-employed and employees of companies that do not offer a pension plan, to make use of this new option. It would enable more people to benefit from the lower investment management costs that would result from membership in a large pooled pension plan, allowing for the portability of benefits that would facilitate an easy transfer between plans and ensure that funds would be invested in the bests interests of plan members.

These are all important areas where our retirement income system can and should be improved. That is why federal, provincial and territorial governments are working to implement PRPPs as soon as possible, and we are doing it collaboratively. Once again, I remind hon. members that this pooled retirement pension plan approach was agreed to as the best by all of Canada's finance ministers, provincial and territorial. These plans will help Canadians, including the self-employed, to meet their retirement objectives by providing access to a new, low-cost accessible pension option.

The bill before us today, the PRPP act, represents the federal portion of the PRPP framework and is a major step forward in implementing pooled registered pension plans.

In addition, the tax rules for pooled registered pension plans have been developed by the Government of Canada and were released in draft form for comment in December of 2011. Comments received during that consultation period, which ended in February, are being reviewed currently. The tax rules for PRPPs will apply to both federally and provincially regulated PRPPs and will be implemented in 2012. By working in concert with the provinces, we can accomplish so much more by working together.

I would urge all the provinces to take the advice of the Canadian Chamber of Commerce, the Canadian Federation of Independent Business and the Canadian Life and Health Insurance Association Inc. when they collectively said, “The longer governments take to establish a system of PRPPs, the less time those employees will have to use this vehicle to save for their retirement”.

It is clear that Canadians want their governments to act on their priorities and deliver results on a timely basis, and the PRPP should be no different.

Many people in my riding work for small and medium-sized businesses and who are self-employed. As a former small business owner myself, I know how greatly they would benefit from the advantages presented by pooled registered pension plans.

It is for this reason that I urge not only the Government of Ontario but all provincial governments, to put in place their respective legislation as soon as possible so that all Canadians can start saving for their retirement. Once provinces implement their own legislation, PRPPs will be a key element of the third pillar of Canada's retirement income system. PRPPs will complement and operate alongside registered retirement savings plans and employer sponsored registered pension plans.

With all the measures we have put in place and with Bill C-25 bringing the federal PRPP framework into force, Canadians can be confident about the long-term viability of their retirement system. We are listening, and will continue to listen, to the views on how we can strengthen the security of pension plan benefits and ensure that their framework is balanced and appropriate for the long term.

Canada's retirement income system is recognized around the world by such experts as the Organisation for Economic Co-operation and Development, the OECD, as a model that succeeds in reducing poverty among Canadian seniors and in providing high levels of replacement income to retired workers.

With Bill C-25, we are making it better by working toward a permanent, long-term solution to encourage greater pension coverage among Canadians. At the same time, we will continue to ensure our retirement income remains one of the strongest in the world.

I would encourage all members of the House to support this important bill.

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June 12th, 2012 / 12:20 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, I am somewhat surprised that government MPs are portraying themselves as pension plan champions when this very government refused to do a thing to protect plans like Nortel's and AbitibiBowater's.

This is the same government that decided to raise the retirement age from 65 to 67 when there was really no financial need to do so. This same government is proposing a pension plan that is supposed to be the greatest thing ever, but it is refusing to include any provisions to control administrative fees, payout amounts and, most importantly, the bankers' ability to pay themselves bonuses out of the fund's returns.

Is it not bizarre that whenever there are corporate welfare bums to support, the Conservatives are always ready to give them whatever they want? They are privatizing profits, but ordinary Canadians are the ones who will have to cope with losses.

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June 12th, 2012 / 12:20 p.m.

Conservative

Harold Albrecht Conservative Kitchener—Conestoga, ON

Mr. Speaker, I find it strange that people across the aisle would say that changes to the OAS system are not necessary. I have not spoken to one person in the past number of months, since we have talked about implementing this, who has not agreed that some changes are necessary. There has been a wide variation in terms of what the proposed solutions would be.

In the 1970s there were seven workers contributing to CPP for every retired worker. Currently that number is down to roughly four workers for every retired worker. In about 20 years that number will be reduced to two workers for every retired person.

Canadians understand. If the numbers are going from seven to one, now four to one and projected to be down to two to one, it was absolutely crucial that we had the courage to make these changes so my children, my grandchildren and great-grandchildren would have a plan in place that would see them have a sustainable retirement system, the Canada pension plan.

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June 12th, 2012 / 12:20 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, I disagree with the member's statement on the crisis situation that he has tried to portray to Canadians in regard to the OAS program. As a result, the government is going to increase the eligibility age from 65 to 67, something with which the Liberal Party totally disagrees. It is not necessary and the evidence is clear to demonstrate that.

The Liberal Party supports the principle of a pooled pension plan. For this plan to be as effective as it could be, a number of things should have happened. Amendments should have been accepted that would have modified the program.

There is one other component that is really important, and that is the participation of provincial governments in the plan and how they would be engaged in promoting it and bringing in legislation to support it.

Could the member provide an update as to what other provincial jurisdictions are doing to support or complement this program that the government is bringing in through this legislation?

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June 12th, 2012 / 12:20 p.m.

Conservative

Harold Albrecht Conservative Kitchener—Conestoga, ON

Mr. Speaker, my hon. colleague may have misunderstood the intent of the OAS changes. He said that we see a crisis. Nobody on this side of the House has said there is a crisis.

The system we are putting in place would be implemented starting in 2023. I do not see a crisis in looking that far ahead. We are going to avoid a crisis that would see the country thrown into a situation where there would be no long-term, sustainable Canada pension plan. By planning ahead to 2023 to begin implementation of the plan, to have it fully implemented by 2029, is a practical, measured approach that would ensure future sustainability.

My colleague mentioned provincial co-operation. I did mention in my speech that all provincial and territorial finance ministers agreed that this was the way to move ahead.

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June 12th, 2012 / 12:25 p.m.

NDP

Claude Gravelle NDP Nickel Belt, ON

Mr. Speaker, I am happy to rise today and speak on Bill C-25, an act relating to pooled registered pension plans. In truth, it is legislation from the Conservative government that is really a savings scheme, not a pension plan. Like the omnibus Trojan Horse budget bill, it reminds Canadians of the mess the Conservatives have created for Canada and for our pensioners.

This hole that Canadians find themselves in becomes unacceptable, especially when we see the shovels in the hands of the Conservative government digging the hole.

Let us separate fact from fiction in the government's spin on being good managers of the economy. In fact, the Conservatives' us-them, winners and losers ideology has exposed them as very bad managers of the economy.

Fact number one is that 1.6 million seniors live in poverty.

Fact number two is that 12 million Canadians lack a workplace pension plan.

Fact number three is that most Canadian workers have no RRSPs, but the proposed legislation advises that they invest despite disastrous investment returns.

Fact number four is that last year, only 31% of eligible Canadians contributed to RRSPs. How little money Canadians really have for their RRSPs is evident in the fact that unused RRSP room now exceeds $500 billion.

Fact number five is that the Conservatives tolerate overall poverty numbers of around 10%, one in every ten Canadians. They write off three million Canadians from contributing to productivity or paying taxes. The Ontario food bank estimates that the bill to Canada that the Conservative government writes off is costing our country close to $90 billion.

Facing all these facts, what do the Conservatives do? They bring forward legislation with limited benefits for the self-employed and for those with small and medium-sized businesses. They stick with our country's miserly pension plan rather than bringing it up to the level of other countries that more fairly and generously look after their seniors.

The proposed legislation would do nothing to fix our pension crisis. There is too little money on the revenue side for our country precisely because of the spending and the deep hole that the Conservative government has dug with its ideology-driven priorities.

There is no money for Canadian seniors and their pensions because the Conservative government ignores a declining crime rate and goes on a multi-billion dollar spending spree on crime that the provinces say they do not want and cannot afford.

There is no money for seniors, but there is money for F-35 fighter jets. There is money for a minister's $16 glass of orange juice and money to spend on search and rescue personnel to ferry the Minister of National Defence on his own errands.

The Prime Minister has said that the Canada pension plan is adequately self-financing, but “for those elements of the system that are not funded, we will make the changes necessary to ensure sustainability.”

What changes does the government propose? It plans to cut old age security, denying it to seniors who are 65 and 66. This program provides $526.85 a month to seniors below the income cut-off.

New Democrats recognize the demographics in our country showing that the number of Canadians older than 65 will double in the next 20 years. We also recognize that the pension plan is financially sustainable in its various demands, up and down, over the next 20 years.

The Parliamentary Budget Officer has backed us up with strong evidence, but what is increasingly having Canadians lose confidence in the government is its failure to manage the economy and deal with the inequality that exists in our communities.

There is less money for seniors because of ridiculous spending decisions by the Conservative government. It reduced corporate taxes and had ministers for the G8 spending like drunken sailors.

We on this side of the House have no problem with an honest dialogue with Canadians about belt-tightening, about hard choices that have to be made regarding our pensions and pensioners. However, we will not frame these choices as the Prime Minister does, ignoring the facts and making our seniors pay.

Let us be clear: our seniors and future pensioners need protection and real help. Pool registered pension plans fail to protect retirement security because they encourage families to gamble even more of their retirement savings on failing stock markets. Anyone who has watched the RRSP plummet over the past years knows how risky savings tied to the stock market are.

How out of touch can the Conservative government be to sell such a scheme to Canadians?

The bill is designed to appeal to the self-employed and workers at small and medium-sized firms, companies that often lack the means by which to administer a private sector plan.

The plan created would be a defined contribution plan. Employees would contribute a portion of their salary into the retirement account, where it could be invested in stocks, bonds, mutual funds, et cetera. Some companies would make a matching contribution, up to a certain percentage. The account would grow through contributions and investment earnings until retirement.

In such a direct contribution plan, there are no guarantees about how much of a person's money will be left when he or she retires. The risks are borne entirely by the individual. In these types of plans, the amount of money available at retirement depends upon the outcome of the investments, which cannot be relied upon. Defined contribution plans lack the security of defined benefit pension plans like the CPP and the QPP, which pay a guaranteed set amount upon retirement.

There is also the profit margin taken from these plans by the regulated financial institution, such as banks, insurance companies and trust funds. Bill C-25 also fails to place a cap on administration fees or costs and merely assumes lower costs will emerge through competition in the marketplace, and unlike the CPP and the QPP, the pooled pension plan would not be indexed to inflation.

On the other hand, the NDP has put forward a series of retirement income security proposals that would bring genuine security to our pensioners.

We want to double the guaranteed CPP-QPP benefits, to a maximum of $1,920 each month. Growing the CPP and QPP is the best and lowest-cost pension reform option we have.

We have committed to work with the provinces to build the flexibility of individuals and their employers to make voluntary contributions to individual public pension accounts. We would amend 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.

New Democrats would increase the annual guaranteed income supplement to a sufficient level, in the first budget, to lift every senior in Canada out of poverty immediately.

These are real reforms. This is the real help for seniors barely getting by or workers forced to delay a hard-earned retirement.

Let me quote the commentary of the Canadian Labour Congress on this bad bill.

The proposed PRPPs [pooled registered pension plans] do not guarantee low management fees that would prevent large management fees from eating up such a large portion of your savings. In fact, there is only a promise that the design of PRPP will result in large pools of capital that might lower fees, with no guaranteed or legislated results. Nothing in the PRPP proposal sets management expenses at levels equal to or lower than those of the CPP. As a result, CPP is still a better deal than PRPP; not only because of its guaranteed indexed retirement income, but because of its much lower management fees.

The government is already engaged in damage control on trying to increase the retirement age from 65 to 67. It is trying to reassure seniors that it would not affect those now retired or soon to be retired. What the government should be afraid of is the large number of Canadians aged 50 to 65, the people who vote in this country, who are seeing freedom 55, and now freedom 65, slip away.

Our seniors have worked hard and managed their budgets, only to see the government dig this very deep hole by giving up revenue it would have had from corporations and spending it on its priorities that are now not the priorities of many Canadians.

This will be the fight of their lives. New Democrats will join this fight. We need to value our seniors, not beat up on them.

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June 12th, 2012 / 12:35 p.m.

NDP

Sadia Groguhé NDP Saint-Lambert, QC

Mr. Speaker, according to Statistics Canada, more than 14% of senior women who live alone are living in poverty. The NDP supports enhancing the Canada pension plan to address these instances of poverty.

However, with respect to the pooled registered pension plan scheme, benefits will depend on investments and the stock markets. This scheme will do nothing to address poverty among the elderly, especially senior women.

Could my colleague comment on that?

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June 12th, 2012 / 12:35 p.m.

NDP

Claude Gravelle NDP Nickel Belt, ON

Mr. Speaker, I thank my colleague for her very good question. She is quite right.

The Conservative government's plan will force Canadians to invest their money in the markets. Everyone knows what happens when the market drops: pension plans shrink and Canadians no longer have the money to retire.

This is the NDP's plan: we want to increase the CPP and the QPP to lift the poorest people out of poverty. The members on this side of the House are aware that only the poorest seniors receive old age security. The government's plan will make the poorest even poorer. The poorest of the poor, especially women, will be affected, not the rich.

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June 12th, 2012 / 12:35 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, over the years I have heard a great deal about the importance of CPP, OAS and GIS through the Liberal critic for seniors and how we need to invest in, enhance and improve these programs. I share in the passion for improving and moving forward with those programs, so I appreciate the comments of the member from the New Democratic Party on that particular point.

Where I disagree, and where I would ask the member to respond, is with respect to this: why would the NDP oppose outright the opportunity for some individuals to benefit from this pooled registered fund?

My understanding is that even the New Democratic Party in Manitoba was supportive of this fund being brought in. What I do not quite understand is why the federal New Democratic Party would vote against allowing individuals to benefit. It is a small tool, but it will derive some—

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June 12th, 2012 / 12:35 p.m.

The Acting Speaker Bruce Stanton

Order. The hon. member for Nickel Belt.

Pooled Registered Pension PlansGovernment Orders

June 12th, 2012 / 12:35 p.m.

NDP

Claude Gravelle NDP Nickel Belt, ON

Mr. Speaker, the reason we do not support this pooled pension plan is that there are no benefits to it.

When people invest their money in the stock market—which is what the government wants, seniors investing in the stock market—and the stock market falls, the pension plan falls. Therefore, the seniors who lose their money in the stock market would not have a retirement pension plan.

If today's seniors want to invest and have the extra money, albeit there are people in this country who do not have extra money to invest in RRSPs, they can do that now. What we would like to do is increase the CPP and the QPP to include everyone in Canada who could contribute to and collect from the CPP and the QPP.

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June 12th, 2012 / 12:35 p.m.

The Acting Speaker Bruce Stanton

There are about 30 seconds left for a brief question.

The hon. member for Hochelaga.

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June 12th, 2012 / 12:35 p.m.

NDP

Marjolaine Boutin-Sweet NDP Hochelaga, QC

Mr. Speaker, I want to know whether my colleague agrees that the government is trying to distract Canadians by passing a bill with the words “pension plan” in its title to suggest that it is improving the pension system when really the government is more or less creating a pooled RRSP?

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June 12th, 2012 / 12:35 p.m.

NDP

Claude Gravelle NDP Nickel Belt, ON

Mr. Speaker, I want to thank my colleague for her question. I would simply say in response that the Conservative government will stop at nothing to violate Canadians' rights.

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June 12th, 2012 / 12:40 p.m.

Delta—Richmond East B.C.

Conservative

Kerry-Lynne Findlay ConservativeParliamentary Secretary to the Minister of Justice

Mr. Speaker, I am honoured to add my voice in support of today's debate on retirement income security.

Before I commence my remarks, I will correct something that I believe the member opposite just said, which is that old age security is only available to the poorest seniors. OAS is universally accessible to our seniors. If he is getting mixed up between OAS and GIS, the guaranteed income supplement, it is true that our poorest seniors can apply for that supplemental income through GIS. However, OAS is universally acceptable.

As all members are well aware, seniors have led the way in making Canada the dynamic and successful nation that it is today. Through their sacrifices, succeeding generations have had the opportunity to prosper. There is at times the perception that our senior population may be forgotten in the rush of modern life but the reality is that when it comes to our government, nothing could be further from the truth.

Since 2006, we have taken important steps to improve government support for seniors. I know I have participated in round tables on seniors issues in my riding and met with numerous seniors groups to hear their concerns first-hand, as I am sure so many of my colleagues have as well.

We believe today's legislation would build on our success by improving the range of retirement savings options available to Canadians. The pooled registered pension plan, or PRPP, would make well-regulated, low cost, private sector pension plans accessible to millions of Canadians who have, up until now, not had access to such plans. In fact, many employees of small and medium-sized businesses and self-employed workers would now have access to a private pension plan for the very first time. This would be a key improvement to Canada's retirement income system.

PRPPs would also complement and support the Government of Canada's overarching objective of creating and sustaining jobs, leveraging business investments, securing our economy recovery and encouraging sustainable, private sector driven growth.

Some of the retirement income system proposals we heard in our consultations would have significantly raised costs for employers and employees. They would have been unacceptable in the midst of a very tentative economic recovery.

Promoting the retirement income security of Canadians is an important goal of the Government of Canada. We will continue to ensure that our policies, programs and services meet the evolving needs of Canada's senior population.

I am the fifth of six children in my family. Quite typically for modern Canadians, my father lived to the age of 89 and my mother to the age of 93. My father was a self-employed electrician and electrical contractor. Except for four years in her later life, my mother stayed at home to raise six children.

At the beginning of my father's working life, Canada did not even have a Canada pension plan. Our country has come a long way in the intervening decades. However, innovation is required and should be welcome.

The Canadian Chamber of Commerce commented in November 2011 that this legislation had the potential to benefit the estimated 60% of Canadians who have either no or insufficient retirement savings. This legislation ushers in excellent opportunities for employers and employees to work together and the self-employed to benefit in a way that can create a more secure future in one's senior years. This would have helped lifelong contributors to the Canadian economy, like my father and his family.

Through these legislative and policy efforts, we recognize the contributions seniors have made and continue to make to our nation. They deserve pension security and we are ensuring that the retirement income system and the tax system support those goals.

We are doing so in a number of ways. For example, the CPP provides a secure indexed lifelong retirement benefit. To ensure that the CPP remains on solid footing, it is regularly reviewed by federal, provincial and territorial governments that have successfully acted as joint stewards of the plan since its inception.

As a result, the chief actuary indicated in his most recent report on the CPP that the plan was sustainable, at least for the next 75 years, at current contribution rates and benefits.

Canada's retirement system includes tax assisted private savings opportunities to help and encourage Canadians to accumulate additional savings for retirement. This includes registered pension plans, RPPs, and registered retirement savings plans, RRSPs.

RPPs are sponsored by employers on a voluntary basis and can be either defined contribution or defined benefit with employers and often employees responsible for making contributions.

RRSPs are voluntary individual defined contribution savings plans. Employers may provide a group RRSP for employees and may remit a share of contributions on behalf of their employees.

Contributions to RPPs and RRSPs are deductible from income for tax purposes and investment income earned in these plans is not subject to income tax. Pension payments and withdrawals are included in income and taxed at regular rates.

In all, the cost of tax assistance provided on retirement savings is currently estimated at approximately $25 billion per year in forgone revenue for the federal government and about one-half that amount in forgone provincial revenue.

However, that is not the only way the government helps Canadians ensure that they have more money available when they retire. I will quickly elaborate on some other measures our government has introduced to assist seniors and pensioners which, together, are providing roughly $2.5 billion in additional annual targeted tax relief to seniors and pensioners.

Since 2006, our government has increased the age credit amount by $1,000 on two occasions, doubled the maximum amount of income eligible for the pension income credit to $2,000, introduced pension income splitting, and increased the age limit for maturing pensions and RRSPs to 71 from 69 years of age.

In 2012, a single senior can earn $19,542 and a senior couple $39,084 before paying federal income tax. Due to measures taken since 2006, about 380,000 seniors will be removed from the tax rolls in 2012.

In addition, in budget 2008, our government introduced the tax free savings account, TFSAs. The TFSA is a general purpose savings vehicle that helps all adult Canadians, including seniors, to meet their ongoing savings needs on a tax preferred basis, including those who are over age 71 and are required to begin drawing down their registered retirement savings.

Of note, the income earned within a TFSA and withdrawals from the account are not subject to income tax and do not affect eligibility for federal income tested benefits or credits, such as old age security, the guaranteed income supplement or the goods and services tax credit. This feature improves savings incentives for low and modest income Canadians who would expect to receive GIS benefits in retirement. In its first five years, it is estimated that over three-quarters of the benefits of saving in a TFSA will go to individuals in the two lowest tax brackets.

Last year, we introduced measures strengthening the GIS, which is a benefit for low income seniors. Budget 2011 included a new GIS top-up benefit targeted to the most vulnerable seniors.

On top of all these efforts, our government provided an additional $10 million over two years to enhance the new horizons for seniors program, funding that will enable more seniors to participate in social activities, pursue an active life and contribute to their community. The program provided funding for projects that will increase awareness of elder abuse and promote volunteering, mentoring and improved social participation of seniors. We are continuing to help seniors.

I have been approached by constituents on this legislation who had two primary concerns: whether the PRPP was portable and whether a worker who does not opt into such a plan initially can opt in later. The answer to the first concern is, yes, the plan is portable. We urge all provincial governments to move quickly with their mirroring legislation. The answer to the second concern is yes. A worker who does not opt in initially can opt in later.

In fact, Dan Kelly, vice-president of the Canadian Federation of Independent Business, said, in November 2011 in media interviews, that the pooled plans are desperately needed because presently only about 15% of small and medium-sized businesses his company represents offer some form of retirement savings plan for their employees. He further stated, “This can't come soon enough from our perspective”.

In conclusion, I will reassure seniors that in carrying out our plan to restore budget balance, this government will not raise taxes. There are employers and employees across the country in all sectors who are anxiously looking forward to seeing this fundamental change in Canada's pension landscape becoming available. I would, therefore, encourage all members of this House to support this very important legislation.

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June 12th, 2012 / 12:50 p.m.

Conservative

Jeff Watson Conservative Essex, ON

Mr. Speaker, the opposition members have mis-characterized PRPPs as somehow being the silver bullet cure-all for retirement, when it is simply another tool or plugs another gap in the retirement savings system for Canadians.

Would the member care to comment on how necessary that particular tool is, how it does fit a portion of the Canadian public who are without pensions currently, and what the status might be with regard to the fact that Canada pension plan discussions are still ongoing with the provinces?

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June 12th, 2012 / 12:50 p.m.

Conservative

Kerry-Lynne Findlay Conservative Delta—Richmond East, BC

Mr. Speaker, the point here is that we are trying to broaden the scope of retirement savings options for Canadians. We have some 60% of Canadians who do not have pensions through employment. This is an opportunity for employers and employees to work together to create an option for retirement and a benefit for their senior years, which they do not have now. It is one of several options we have introduced and strengthened.

We continue to stand up for seniors and those working Canadians who need this kind of assistance.

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June 12th, 2012 / 12:50 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, I note that, in her statement, my distinguished colleague left out something very important.

Every independent commentator has essentially said that this is not the solution and that the old age security program and the guaranteed income supplement are financially viable.

When I say independent commentators I am not talking about those who want to manage the contributors' money, but truly independent experts: the Superintendent of Financial Services, the Parliamentary Budget Officer and Canada's actuaries.

I am not asking the Conservatives to consult their friends, the corporate welfare bums. I am asking them instead to consult the people who are not financially dependent on their friends. All these experts are saying that there is no problem with old age security and the guaranteed income supplement.

What do the Conservatives make of the fact that these people are telling them that they are entirely wrong?

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June 12th, 2012 / 12:50 p.m.

Conservative

Kerry-Lynne Findlay Conservative Delta—Richmond East, BC

Mr. Speaker, the fact is that we have been applauded for this initiative, not just by industry and employers but by employees and the groups representing them. All the provinces are on board with the idea of providing small and medium businesses with such a plan. We are being lauded by so many.

I have an example. Ingrid Laederach Steven, owner of a store in Toronto, told reporters she has only two employees. She said, “...if I feel it's something that will benefit them, absolutely I would” offer this PRPP to them.

The NDP is fond of saying they are standing up for workers. Well, 60% of workers do not have a pension plan. A majority of workers in Canada are not part of a union that has bargained for pension plans. We need to bring in something that fits the reality of working life for most Canadians.

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June 12th, 2012 / 12:50 p.m.

Conservative

Joy Smith Conservative Kildonan—St. Paul, MB

Mr. Speaker, it really struck me, as I was talking to one of my constituents last weekend, how grateful my constituents are for this particular pooled pension plan simply because, as my colleague said, if one did not have a pension, there was nothing feasible.

I would like my colleague to outline very succinctly how this pension plan would work and how it would benefit the people who do not have one.

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June 12th, 2012 / 12:50 p.m.

Conservative

Kerry-Lynne Findlay Conservative Delta—Richmond East, BC

Mr. Speaker, as someone who was self-employed throughout most of my career before becoming a member of Parliament, and in small to medium-sized law firms in my case, I know this is something that would be most welcome. We did not have a vehicle to offer this sort of retirement security to our employees.

I would urge the provinces to get on with their mirroring legislation. The provincial and territorial governments are on side with this. They see the benefit of it. This is something that would benefit us all and benefit the economy.

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June 12th, 2012 / 12:55 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, I would like to really discuss the issues raised by Bill C-25. This bill should have been an opportunity to improve pension plans in Canada, something that would have made Canadians wealthier. Unfortunately, with this system, the only ones who will benefit will be the corporate welfare bums.

It is important to understand how this system is funded. Employees do not get to decide who administers their retirement savings; the employer decides. Employees are not the ones who decide the level of investment risk they will assume or where their money will go. Once again, it is the employer who decides.

Ironically, the employer that decides the level of risk and chooses the administrator is in a conflict of interest with regard to that administrator. What happens when the employer does business with the same financial institutions with which it negotiates its line of credit, its insurance and all the other financial products a business might need? It is a blatant conflict of interest.

On top of that, in this bill the government is saying that employers, the business owners, are not responsible for their actions under the law. If they choose the worst administrator or the highest level of risk, this legislation exonerates them. Legal exoneration is included in Bill C-25. This is unbelievable. People are either strongly for or strongly against these corporate welfare bums. The Conservatives strongly support them, and Bill C-25 is proof of that.

The government has decided that no matter what the returns on the investments—be they negative or positive—the financial institution will be the first to benefit. Imagine that. The institution will charge administrative fees regardless of the returns. Then it will collect its profit margin because it is a private company. Then, depending on the level of risk, it will collect bonuses. Inflation is also a factor. If the return is 3% and inflation is 2%, then the net return is 1%. Unfortunately, people will not even get that 1% because they are the very last in line after administrative fees, bonuses and rates of return. Basically, this means that no matter what the situation, the administrators will be the ones making money. Whether the market is up or down, they will make money.

Paradoxically, if the deductions are too high, the people investing in the pooled registered pension plans proposed in Bill C-25 will experience consistently negative returns. A person who invests $600 a year for 30 years can expect to withdraw at least $18,000, right? Not so. With this wonderful plan, he might have much less than that. He is not even guaranteed to get back the money he put in. This is not a pension plan or even a lottery. It is outright theft.

The Conservatives have decided to put the financial future of retirees in the hands of people whose primary interest is to earn the maximum amount of money, not to generate a return or guarantee a pension, but to earn money now, right away.

The icing on the cake is that the Conservatives say in the bill that administrators are prohibited from using gifts to encourage employers to allow them to manage the pension fund. However, this type of deal is allowed according to the regulations. Not only is there already a clear conflict of interest, but this also legalizes bribes. Unbelievable. Then they claim that it is for the good of the employees.

We have proposed that, at least, the right to charge administrative fees should be dependent on the return.

If pension funds are properly managed, the administrator has the right to charge a fee, but if it they are poorly managed, the administrator should not be paid. The administrators must take on part of the risk, which would motivate them a bit to always aim for big returns, but no, they do not take on any risk. The only risk is taken on by the employees, who do not even have the right to choose their administrator and level of risk. That is outright abuse. This is where Bill C-25 systematically goes after workers.

This is not a pension plan, but an extremely toxic financial product just like the junk bonds we saw in the 1970s and 1980s, and the commercial papers we saw in 2008. That is how toxic this is. People absolutely must not invest in this. I would like to take this opportunity to tell people that the last thing they should do is choose to participate in such a plan. They should buy a house. We hear a lot about pension plans, but at the same time, we have never seen such a high number of Canadians who own their homes.

Quite often, Canadians' main investment is their home, and that is smart. However, the Conservatives are not taking that into account. They are saying that 60% of people do not have a pension plan. That is not true. Canadians are investing in their pension by investing in their homes. A house is a capital asset that appreciates in value rather than depreciating like the plan the government is proposing.

What can we say about a regime, a political party, a government that systematically stands up for the rich? The government is ignoring the needs of all Canadians to help only 1% of the population, the wealthiest members of our society. Since the Conservatives have come to office, the gap between the rich and the poor has been widening. The poor have become poorer, as has a large part of Canada's middle class—in short, the vast majority of Canadians. Meanwhile, the Conservatives' friends, the corporate welfare bums, have grown even richer. And that does not bother the Conservatives at all. Clearly, they are even in favour of it.

This type of government regime, which robs the vast majority of people to favour its friends, is called a kleptocracy. That is exactly what we are dealing with here: people who work only for the wealthiest members of our society in the hopes that perhaps, one day, these extremely rich people will invest their wealth and use it to buy goods, which will drive the economy. However, what we have been seeing for the past 10 years is that these people are not investing in Canada. They are taking the money that they get in Canada and investing it abroad, in financial products and corporate acquisitions. That is not creating any jobs at all. It is even causing us to lose jobs.

The Conservatives could have taken action to prevent situations like the ones that occurred at Nortel and AbitibiBowater from happening again, but they did not. Their friends, the corporate welfare bums, did not want them to. They did not want regulations to be imposed, and regulations are still not present in Bill C-25. The Conservatives are not regulating this bill.

They say that the market will determine how to proceed, but right now, the market is not favourable to workers in this country. It only works for the people opposite in this kleptocracy, people who only work for the rich. They have once again decided to systematically favour the rich. This pooled registered pension plan is a highly toxic financial product. I urge all Canadians not to invest a single penny in it, because it is a guaranteed loss. The only people who are going to make money from those plans are the ones administering them.

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June 12th, 2012 / 1:05 p.m.

Conservative

Phil McColeman Conservative Brant, ON

Mr. Speaker, as one of the people who the member across the way considers corporate welfare bums before I got into politics, I take great offence. This warped view of the NDP members that employers, business owners, entrepreneurs, corporations and companies in this great land of ours are somehow the enemy of this country and of workers could not be further from the truth. This is more warped than I have ever heard anybody speak of before. They are the people who hire people, who take the risks and create the wealth.

However, my question for the member is this. How does he square this when the people he represents, who are unionized labour, take their pension money and invest it in these corporations of corporate welfare bums for a return on their investment?

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June 12th, 2012 / 1:05 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, let us be clear. Corporate welfare bums are entrepreneurs who never take a financial risk, even in investment. They always manage to make us pay for them. If there is money to be made, they are going to make it, and if there is a risk or a financial loss to assume, the community of Canadians is going to assume it.

If you were that type of entrepreneur, it is really sad, but you are one of the corporate welfare bums. However, if you were not and you were honest, assuming the risks and the danger of a financial operation, I congratulate you.

In terms of investments, what risks do administrators run? None. Administrators pay themselves first, even when there is a deficit and a performance loss. They make the loss worse.

Where is the notion of risks for entrepreneurs? You are saying that private business is a good thing, but in this case, it is not private business. The fact of the matter is that people leave with the money and we are left with the bill.

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June 12th, 2012 / 1:05 p.m.

The Acting Speaker Bruce Stanton

I will remind the hon. member that his comments are to be made through the Chair.

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June 12th, 2012 / 1:05 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, I would like to repeat a question that I asked a little while ago. Why it is that the New Democratic Party has chosen to oppose this bill?

We in the Liberal Party have recognized that there are flaws in the bill. There are things that could have been done that would have ensured that the consumer would have been able to derive a larger return. We have made suggestions to that effect.

However, with respect to the principle of being able to provide another alternative to a consumer, someone who is looking at retirement, and allowing that to move forward, it would seem to me that the NDP are on an island by themselves. There are even provincial New Democrats who support this. It seems to be just the federal New Democrats who do not support the opportunity this bill would enable.

I can assure the House that the member is no more of an advocate for OAS than I. I do not quite understand why the NDP members would oppose this as a tool that could be used—

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June 12th, 2012 / 1:05 p.m.

The Acting Speaker Bruce Stanton

Order. The hon. member for Marc-Aurèle-Fortin.

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June 12th, 2012 / 1:05 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, what astonishes me is the Liberal Party's ability to often, always, eternally try to have their cake and eat it, too, but they always discover that they have eaten the cake. They are dismayed to find out that they have eaten the cake.

The problem with this financial product is that the Liberals do not dare acknowledge that it is extremely toxic. We must not invest money in something that does not guarantee a minimum return. It is a pension plan, not a financial risk.

Now, the Liberal Party representative would really like us to ignore this simple reality: at age 65, people will have to have a guaranteed minimum income, which this product absolutely does not guarantee them.

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June 12th, 2012 / 1:10 p.m.

Conservative

Ted Opitz Conservative Etobicoke Centre, ON

Mr. Speaker, I am glad to rise once again in this House and speak again on Bill C-25, pooled registered pension plans act.

This proposed piece of legislation is of vital importance to my constituents in Etobicoke Centre. I have hundreds of businesses, especially small and medium-sized businesses, in Etobicoke Centre. I really do appreciate the opportunity to elaborate on the bill's many merits here today.

As a member of Parliament, I am immensely proud to be part of a party that has the best record in providing retirement security options and for introducing legislation that would encourage the entrepreneurship of the ma-and-pa shops, which are the drivers of our economy and form an essential part of my riding of Etobicoke Centre, as I am sure they do in the rest of the country and in many ridings across the country.

Since 2006, our Conservative government has established a strong record when it comes to aid for small businesses. We have reduced the small business tax rate, provided $20 million to support the Canadian Youth Business Foundation and extended the accelerated capital cost allowance to help businesses make new investments in manufacturing and processing machinery and equipment.

Our government's square focus on incentivizing business has resulted in real growth. Canadians can rest a little easier knowing that our country has the enviable position of creating jobs in a fragile global economy, more than 760,000 so far.

Canadians have come to expect good economic stewardship from this side of the House, and we will continue to deliver that good economic stewardship. As part of this commitment to action, our government introduced the pooled registered pension plans, which would provide for a new accessible, large-scale and low-cost pension option to employers, employees and the self-employed.

In my last speech, I spoke about wide-ranging support for this pension option. I drew particular attention to the fact that all our provincial partners are on board and that stakeholders like the Canadian Chamber of Commerce and the Canadian Federation of Independent Business have urged the government to make PRPPs a reality as soon as possible.

As my colleague, the Parliamentary Secretary to the Minister of Justice, said earlier, Ingrid Laederach Steven, owner of the Swiss chocolate shop in Toronto, is very welcoming and glad of this because there are so many different things for retailers, restaurants, farmers and so on. She wishes it could have been done 25 years ago.

The support is warranted, given the attractive features of the PRPPs, including their portability, whereby many employees will be able to transfer funds between administrators when they change jobs, and their auto-enrolment feature, which would reduce administration costs and increase participation rates in the program.

PRPPs would also have the added bonus of having a very low cost, given their scale, design and lower investment management costs compared to the average mutual fund. This makes it affordable and reachable for the people who work in small and medium-sized businesses.

PRPPs would improve the range of retirement savings to Canadians and provide an accessible option to the 60% of Canadians who do not currently have access to workplace pension plans. In the end, PRPPs are an essential tool, given the aging demographics we face in the future and our need to provide more retirement income options for our constituents.

Instead of acknowledging the many benefits of this plan, as other stakeholders have done, and get working on Canada's economic recovery, as this government does each and every day, members across the way are doing what they do best, trying to delay our economic progress and throwing false accusations our way.

For example, they allege that the pooled registered pension plans would come at the cost of further progress on reforming the Canada pension plan. To that I reiterate yet again what my colleagues have said before me: pooled registered pension plans are meant to complement the services our government has already provided for Canadians' retirement security and not replace them.

Pooled registered pension plans would work in conjunction with new initiatives that our government introduced, including pension income splitting, tax free savings accounts, as well as traditional retirement income vehicles like the CPP.

Furthermore, changes to the Canada pension plan, as the opposition knows full well, require the consensus of two-thirds of the population. We have already seen at the 2010 finance ministers meetings that a number of provinces hold strong objections to expanding the CPP benefit. They are unanimous, however, in pursuing a framework for pooled registered pension plans.

The opposition also glazes over the fact that its suggestion to increase contribution rates for CPP would mean higher payroll costs for small and medium-sized businesses and higher premiums for workers and the self-employed. Since CPP is mandatory rather than voluntary like the pooled registered pension plan, an expansion of CPP would mean that Canadians would face another obligatory reduction from their paycheque and Canadian entrepreneurs would face another barrier in making their business profitable, which is something we cannot abide.

Dan Kelly, the senior vice-president of the Canadian Federation of Independent Business, which represents 108,000 businesses across Canada, said a CPP enrichment would be a payroll tax and is “very worrisome” for businesses.

He went on to state that:

For every one percentage point in CPP premiums beyond the current 9.9 per cent rate, it would cost 220,000 person-years of employment and force wages down roughly 2.5 per cent in the long run.

That is clearly unacceptable.

Our government, unlike the opposition, does not believe in jeopardizing Canadians' economic welfare by imposing higher barriers for job creation. The opposition also objects to the pooled registered pension plans as a private sector solution and takes particular offence at the fact that these plans would invest in the stock market.

However, as one of my hon. colleagues pointed out earlier in the debate, the entire pension system, both public and private, relies upon the stock market. My colleague drew on the example of Canada pension plan, 49.6% of which is invested in equities or stocks.

Last, the opposition has hijacked this debate to make repeated accusations, criticizing our Conservative government's strong record on seniors' issues. I take exception to those allegations, given that my riding has a large and thriving seniors population and I am consistently working hard to ensure that their voices are being heard in this House.

Contrary to what the opposition alleges, our government has created an enviable retirement security system in Canada and has prioritized seniors' issues. After all, it was our government that introduced pension income splitting, doubled the maximum amount of income eligible for the pension income credit and increased the age credit amount. As a result of actions like these taken to date by this Conservative government, seniors and pensioners will receive $2.5 billion in targeted tax relief for the upcoming fiscal year.

A joint federal-provincial research working group, in May 2009, found that Canada's retirement income system was providing Canadians with an adequate standard of living upon retirement. It found, for example, that the disposable income for Canadians age 65 years or over was about 90% of the average disposable income of all Canadians and was the third highest of selected OECD countries.

This report, however, found that despite the many measures already instituted by our government, some Canadian households, especially modest and middle-income households, are at risk of under-saving for retirement, and that is of great concern. It is precisely because of this that pooled registered plans are so needed and this bill is so important.

I am convinced that pooled registered plans are the way forward, as they would offer an enormous potential to improve the retirement security of all Canadians and, particularly, the 60% of those Canadians who do not have the luxury of a workplace pension.

This program has already drawn the interest of small-business employers, stakeholders and all our provincial partners.

In these fragile economic times, a sound, innovative policy like that behind the pooled registered pension plans is essential for Canadian competitiveness and for the welfare of our citizens.

I urge all members in this House to support the bill.

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June 12th, 2012 / 1:15 p.m.

NDP

Malcolm Allen NDP Welland, ON

Mr. Speaker, I want to thank my colleague for his intervention. He quoted statistics from the Canadian Federation of Independent Business, saying we cannot afford even a 1% increase in the Canada pension plan. However, part of the spin that the Conservative government has given us around pooled registered pension plans is this whole idea that employers welcome it with open arms, as if somehow the employers would actually, perhaps, contribute something. However, he just articulated that small and medium-sized businesses are saying, “Wait a minute; we can't afford even 1% in CPP”.

I wonder where indeed this idea comes from, from the government, that somehow small and medium-sized enterprises, if we had this plan, would contribute to this one versus the Canada pension plan. If they cannot afford that one, how could they afford the other? It seems quite an articulate balancing act, almost the equivalent of Mr. Wallenda walking on that tightrope across Niagara Falls, as to how exactly he is going to do that.

I know the member for Niagara West—Glanbrook and I will probably be in attendance when that happens, Niagara being such a great place.

Clearly, employees can actually have a savings plan through an RRSP through their employer if their employer wants to do that. This is nothing more than a glorified registered pension plan with another name, with this whole idea of “You're in, unless you want out”.

It reminds me of the negative billing we did away with when it came to cable TV; we would now take that option and put it back in.

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June 12th, 2012 / 1:20 p.m.

Conservative

Ted Opitz Conservative Etobicoke Centre, ON

Mr. Speaker, I agree with the hon. member on one point. Niagara is an outstanding place. As the former commander of the Lincoln and Welland Regiment, I know that well.

The hon. member is entirely wrong, because this would offer a vehicle for many people who do not have the option of a large company pension plan or are in the more modest and medium income brackets. This would give them greater potential. It would be another tool in the toolbox.

This is a government that looks to the long term of Canadian prosperity and Canadians' well-being, and this tool in the toolbox would help Canadians save over the long term for their retirement. As with so many other programs, this is yet another program that would help many Canadians be able to do that and look forward to a very comfortable retirement in the years to come.

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June 12th, 2012 / 1:20 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, I could challenge the member on a variety of different counts. I am glad he used “tool in the toolbox”, given the fact that it is exactly what I referred to. It is a tool, but it is a very small tool in a very huge toolbox that needs a lot of different ways of dealing with the pension crisis that is facing future generations in the country.

When I was recently in the member's riding and talking to a variety of people, they did not talk to me about Bill C-25 and what a wonderful thing it would be. They talked to me about changing the age from 65 to 67 and the budgetary changes. Their concerns were with the direction the government was going in. It clearly was very much opposite to the concerns the hon. member mentioned.

Next time I am talking to his residents, I will clearly tell them that the member is supportive of pooled pensions but is also supportive of changing the age. How is he responding to those who raised that as a concern?

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June 12th, 2012 / 1:20 p.m.

Conservative

Ted Opitz Conservative Etobicoke Centre, ON

Mr. Speaker, I thank the hon. member for doing a drive-by in my riding.

I talk to my constituents all the time, every day that I am home, all weekend. I work right through Sunday and I talk to a wide variety of residents and constituents. They write to me, email me and phone me, and I phone them back as well as visit them at their homes. They are interested in a wide variety of things.

This is a tool in the toolbox, as I articulated, but the government is building a bigger toolbox all the time. That is what we are going to do for Canadians.

When it comes to pooled registered pension plans, hundreds of businesses in my community are going to benefit from that. The business owners I have been talking to in my community, because I actually live there and work there and talk to those constituents, tell me that they are in favour of the pooled registered pension plans and that this would be another tool they can look forward to in helping themselves, helping their employees and helping our constituents who do not have access to these plans to prosper, grow and make sure their retirement is comfortable because they would have a new opportunity to save for their retirement.

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June 12th, 2012 / 1:20 p.m.

The Acting Speaker Bruce Stanton

Before I recognize the hon. member for Burlington, under resuming debate, I will just let him know I will need to interrupt him at 1:29, this being the end of the time allocated for the current motion that is before the House.

The hon. member for Burlington.

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June 12th, 2012 / 1:20 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I am pleased to rise as the last speaker on third reading of this bill. I know you will regret interrupting me because my speech will be so good.

I have spoken to Bill C-38, the pooled registered pension plans act, before. Therefore, I will try to summarize what I think are the four important points and then I will to respond to some of the things I have heard over the last number of readings. I spoke to the bill at second reading and report stage. It is a very important bill and it is the right opportunity available to the government at present.

Previous speakers have said over and over again that there are other options, which other parties have been promoting, including changes to the CPP. However, that requires two-thirds of the provinces with two-thirds of the population to make the changes, and that is not available to us at this moment. The provinces are onside with an opportunity to bring forward legislation of their own to match the pooled registered pension plans act. We can pass something in the House that will affect federally-regulated industries. What is important for me and the residents of my riding is that it is available to all industries.

I believe the Liberal Party is in support of the bill, which we will see when we vote shortly, and we appreciate its support. It has, throughout the discussion, pointed out some areas where it feels there are other opportunities. We do not disagree with that. There are other opportunities.

What I do not understand is the position of the NDP members on the bill. They have an option that they would like to see happen. We have been very clear that the option is not available to the government at this time, but that should not stop members of the official opposition from supporting this tool. It makes no sense to me that they made the claim during an election time that they would come to Ottawa to make things work, to work with other groups that hoped to form government, I guess. Going from third place to becoming government would have been very difficult, but they did very well and they need to be congratulated for that.

The idea those members were selling at election time was they were coming here to work for average Canadians, who they met at the kitchen tables, and they were going to make Parliament work. Here is a perfect opportunity. The bill does not solve all the problems with regard to retirement income that Canadians face now and in the future, but it is a tool, an option and an opportunity that is available and can be supported by all parties. That is making things work for Canadians and that is why they should be supporting it.

The member for Welland said that this was the same as an RRSP. It is not the same as an RRSP. Two things are different. First, employees have six months to opt out. It involves people in the program. It is portable and people can take it with them if they change jobs. That is an important difference from an RRSP, where people have to opt in.

The other comment was that the owners of businesses were saying they could not afford to do it. They cannot afford the RRSP program because they have to manage the process on their own and that is tough for small businesses that only have a few employees. Even for medium-sized businesses, it is a very costly endeavour. The pooled registered pension plan would average out the costs, spread the costs out and would offer ease of entry into the program for employers. It is a perfect tool for employers to keep and attract employees.

One of the issues, maybe not from my generation but from my daughter's generation, is that workers move from employer to employer every three, four or five years. This is an opportunity for employers to use the pension plan to attract and retain employees. It is an excellent program.

We have not voted on third reading stage yet, but I would encourage the NDP to do the right thing and support the bill.

Pooled Registered Pension PlansGovernment Orders

June 12th, 2012 / 1:25 p.m.

Carleton—Mississippi Mills Ontario

Conservative

Gordon O'Connor ConservativeMinister of State and Chief Government Whip

Mr. Speaker, there have been discussions among the parties and I believe you would find unanimous consent for the following motion. I move:

That, notwithstanding any Standing Order or usual practice of the House, at the conclusion of the debate on the motion for third reading of Bill C-25, the pooled registered pension plans act, and on the previous question, the question be deemed put, a recorded division be deemed requested and deferred to immediately after the time provided for oral questions later this day, provided that there shall be no extension pursuant to Standing Order 45(7.1).

Pooled Registered Pension PlansGovernment Orders

June 12th, 2012 / 1:30 p.m.

The Acting Speaker Bruce Stanton

Does the Chief Government Whip have the unanimous consent of the House to propose the motion?

Pooled Registered Pension PlansGovernment Orders

June 12th, 2012 / 1:30 p.m.

Some hon. members

Agreed.

Pooled Registered Pension PlansGovernment Orders

June 12th, 2012 / 1:30 p.m.

The Acting Speaker Bruce Stanton

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

Pooled Registered Pension PlansGovernment Orders

June 12th, 2012 / 1:30 p.m.

Some hon. members

Agreed.

Pooled Registered Pension PlansGovernment Orders

June 12th, 2012 / 1:30 p.m.

The Acting Speaker Bruce Stanton

(Motion agreed to)

The House resumed consideration of the motion that Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, be read the third time and passed, and of the motion that this question be now put.

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:10 p.m.

The Speaker Andrew Scheer

Pursuant to an order made earlier today, the House will now proceed to the taking of the deferred recorded division on the previous question at the third reading stage of Bill C-25.

Call in the members.

Before the Clerk announced the results of the vote:

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

The Speaker Andrew Scheer

The hon. Chief Government Whip is rising on a point of order.

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

Conservative

Gordon O'Connor Conservative Carleton—Mississippi Mills, ON

Mr. Speaker, I would like you to confirm that the member for Beauce was included in the vote. He was, okay.

(The House divided on the motion, which was agreed to on the following division:)

Vote #281

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

The Speaker Andrew Scheer

I declare the motion carried.

The next question is on the motion. The hon. Chief Government Whip is rising.

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

Conservative

Gordon O'Connor Conservative Carleton—Mississippi Mills, ON

Mr. Speaker, if you seek it I believe you will find agreement to apply the result of the previous vote to the current vote, with the Conservatives voting yes.

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

The Speaker Andrew Scheer

Is there unanimous consent to proceed in this fashion?

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

Some hon. members

Agreed.

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

NDP

Nycole Turmel NDP Hull—Aylmer, QC

Mr. Speaker, we agree to apply the vote. The NDP will be voting against the motion. I would like to add the name of the hon. member for Victoria, who has arrived.

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, the members of the Liberal Party will be voting in favour of the motion.

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

Bloc

Louis Plamondon Bloc Bas-Richelieu—Nicolet—Bécancour, QC

Mr. Speaker, the Bloc Québécois will be voting in favour of the motion.

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

Independent

Bruce Hyer Independent Thunder Bay—Superior North, ON

Thunder Bay—Superior North will be voting no.

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

The Green Party votes no.

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

Independent

Peter Goldring Independent Edmonton East, AB

I will be voting yes.

(The House divided on the motion, which was agreed to on the following division:)

Vote #282

Pooled Registered Pension Plans ActGovernment Orders

June 12th, 2012 / 3:15 p.m.

The Speaker Andrew Scheer

I declare the motion carried.

(Bill read the third time and passed)