Bill C-25 (Historical)

Pooled Registered Pension Plans Act

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

This enactment provides a legal framework for the establishment and administration of pooled registered pension plans that will be accessible to employees and self-employed persons and that will pool the funds in members’ accounts to achieve lower costs in relation to investment management and plan administration.

Pooled Registered Pension Plans Act

[Ted Menzies, Conservative, Macleod, AB]

moved that Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, be read the second time and referred to a committee.

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

As hon. members are aware, our government understands the importance of a secure and dignified retirement for people who have spent their lives building a better and more prosperous Canada for all of us. This legislation would take Canada's retirement income system one step further by helping more Canadians realize their retirement goals.

PRPPs, an acronym people will hear many times over, refers to pooled registered pension plans. I will outline how PRPPs will help millions of Canadians save for their retirement, but first I will provide some context as to why our government is introducing this new low cost and accessible retirement option. Just because Canada's retirement system is strong does not mean it cannot be improved. That is exactly what will happen when the House passes Bill C-25.

In the wake of the 2008 financial crisis, concerns related to retirement income adequacy and pension coverage began to emerge. In response our government took action and established a joint federal-provincial research working group in May 2009. This working group conducted an in-depth examination of retirement income adequacy in Canada.

The working group concluded that overall the Canadian retirement income system is performing well. It is providing Canadians with an adequate standard of living upon retirement. However, the report also found that some modest and middle income households may be at risk of having insufficient savings once they retire.

Of particular concern is the finding of declining participation in employer-sponsored registered pension plans. The portion of working Canadians with such plans has declined from 41% in 1991. As well, Canadians are not taking full advantage of other retirement savings tools such as registered retirement savings plans. For example, currently there is $600 billion in unused RRSP room in Canada. While aggregate RPP and RRSP participation rates for middle and higher income earners are quite high, the research nonetheless indicates that a portion of Canadians is not saving enough.

With these findings in hand, our government went to work on behalf of Canadians. Over the past two years our government's commitment to a stronger retirement system has taken me to every province and territory and countless communities across this country. In my travels I have consulted with Canadians. I have met with our provincial and territorial counterparts. I have held discussions with owners of small and medium size businesses as well as self-employed Canadians. Today's legislation is the culmination of these consultations.

In short, PRPPs are an innovative, new, privately administered low cost and accessible pension option to help Canadians meet their retirement goals. They are particularly significant for small and medium size businesses. They will enable owners and employees alike to have access to a large-scale, low cost private pension plan for the very first time.

Professional administrators will be subject to a fiduciary standard of care to ensure that funds are invested in the best interests of the plan members. By pooling pension savings, PRPPs will offer Canadians greater purchasing power. Basically, Canadians will be buying in bulk. Achieving lower prices than would otherwise be available means Canadians would have more money left in their pockets when they retire. The design of these plans will also be straightforward to allow for simple enrolment and simple management. Finally, they are intended to be a largely harmonized process from province to province, which will further lower the administrative costs.

Overall the design features will remove many of the traditional barriers that might have kept some employers from offering pension plans to their employees. It is my firm belief that this will lead to a greater willingness for small and medium-size businesses to offer PRPPs to their employees. That is crucial because, incredibly, just over 60% of Canadians do not have a workplace pension plan to date.

With PRPPs, participation will be encouraged by automatic enrolment of employees into a PRPP where their employers offer one. Automatic enrolment will encourage regular saving in PRPPs by making participation the default choice for employees who do not actively make a decision to opt out. Canada's Minister of Finance decided to proceed with the PRPP framework precisely because it was considered an effective and appropriate way to target those modest and middle-income individuals who might not be saving enough for their retirement, in particular, those who currently do not have access to an employer-sponsored registered pension plan.

If the NDP had its way, it would increase the payroll taxes on small and medium-size businesses when it suggested doubling the CPP contributions. At a time when Canada's economic recovery is still fragile, imposing a job-killing tax on job creators is simply irresponsible. PRPPs would be an efficiently managed privately administered pension plan that would provide greater choice to employers and individuals and would promote pension coverage and retirement savings.

Once the provinces administer their PRPP legislation, the legislative and regulatory framework for PRPPs will be operational. This will allow PRPP administrators to develop and offer plans to Canadians and their employers. Working together with the provinces, I am confident we can get these important new retirement vehicles up and running for Canadians in a timely manner.

It is important to remember that PRPPs do not stand by themselves. They are part of a bigger picture. They are part of Canada's retirement income system. We must remember that our system is based on a balanced mix of public and private responsibility. It is also a mix of compulsory and voluntary vehicles that provide the basic minimum pension for Canadians, ensure a minimum amount of earnings replacement for all Canadian workers and offer an additional opportunity for voluntary retirement savings. The system both supports and draws upon the strength of a sound financial sector and complements our overall economic objectives of creating jobs and stimulating economic growth.

The success of this model rests on its three pillars. The first pillar is made up of the old age security, or the OAS, and the guaranteed income supplement, which provide a basic minimum income guarantee for seniors. These programs are funded primarily through taxes on Canadian workers. Our government is committed to ensuring the retirement security of Canadians. That is why we have to ensure that programs like the OAS and the GIS remain sustainable so they will be around for Canadians in the future.

The second pillar is the Canada pension plan and the Quebec pension plan. These are mandatory publicly-targeted benefit pension plans which provide a basic level of earnings replacement for all Canadian workers. There are currently 16.5 million workers contributing to CPP and QPP, with these programs paying $44 billion in benefits per year to 6.5 million beneficiaries. The CPP is the centrepiece of Canada's pension system. I am proud to say it is fully funded, actuarially sound and sustainable for the long term.

The third pillar of 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 and registered retirement savings pension plans. In total the cost of tax assistance provided on retirement savings is currently estimated at approximately $25 billion per year.

All in all, these three pillars support each other in a way that is effective and also fair.

The introduction of the PRPP is only the latest example of our government's commitment to ensuring that Canada's retirement system continues to deliver for seniors.

Since 2006, our government has increased the age credit amount by $1,000, increased it by another $1,000 in 2009, doubled the maximum amount of income eligible for pension income credits to $2,000, introduced pension income splitting and introduced the age limit for maturing pensions and RRSPs to 71 years from 69 years.

In budget 2008 we introduced the tax-free savings account, which is particularly beneficial to seniors. It helps them meet their ongoing savings needs on a tax efficient basis after they are no longer able to contribute to an RRSP.

In budget 2011 we announced a new guaranteed income supplement top-up benefit for the most vulnerable seniors. Seniors with little or no income will receive an additional annual benefit of up to $600 for single seniors and $840 for couples.

Overall, since coming to office, our government has provided over $2 billion in additional annual targeted tax relief to seniors and pensioners.

Our government has a proven track record when it comes to ensuring that Canada's retirement income system is the best in the world. By introducing PRPPs, we are taking that system and making it stronger. This is something of which Canadians can truly be proud.

PRPPs would build on our commitment to improve the retirement income system in our country. This new private sector pension vehicle would improve the range of retirement savings options available to Canadians. PRPPs would provide a low cost retirement savings opportunity for hard-working Canadians, who currently do not have access to a workplace pension plan.

It is my hope that the provinces will follow our government's lead and introduce PRPP legislation on a timely basis. The many businesses and employees who I meet with fully support PRPPs. They believe, and I think the provinces appreciate this, that their governments should work together to deliver results on their priorities. The PRPP is a prime example of what we can do collectively to accomplish for Canadians when we do act together.

On that note, I encourage all hon. members to support the bill and ensure that Canada's retirement income system continues to be the envy of the world.

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

Mr. Speaker, I am pleased to welcome all members back to this place. I hope they all had a great Christmas and a great break.

The Minister of State for Finance would never intentionally mislead the House, so I will offer correct a part of what he said in his speech.

When he talked about the NDP plan and the rising cost to employers and that, he left out one important component. Should this plan to double the CPP be put in place, three years before it could even be implemented, there would a seven year additional phase-in period. I want to be very clear on that.

In his speech the minister spoke about the capacity for bulk buying that people would have under the PRPP. We already have bulk buying under the Canada pension plan. It has a proven track record. It is portable across the country. That is clearly the best vehicle.

Most important, the PRPP would be subject to exactly the same market pressures and potential market failures as RRSPs.

Why is the minister moving in this direction?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I welcome my colleague back to the House of Commons after what I hope was a very restful Christmas break for him as well. I know how hard he works on behalf of seniors and I am sure he spent a lot of time talking to them. Therefore, I would hope he had an open mind when he was communicating with them.

We are not only dealing with seniors, but we are dealing with future seniors, future pensioners. Part of the government's overall strategy is to ensure that our wonderful system, which is the envy of the world, is there for our children and grandchildren and that we do not offload that burden of an unsustainable program on to them.

The Canada pension plan, as the hon. member mentioned, is a very good system. However, we have communicated with many businesses, as well as individuals who are part of that mandatory program, and they do not think this is the time, when businesses are struggling and coming out of the recession, to increase their burden. This provides an option for those businesses that want to provide a retirement plan for their employees to be part of this, to simplify the process.

As I reflected in my speech, many businesses find it a challenge. They are struggling to keep their businesses going. They are trying to grow their businesses. At the same time, they want to offer this to their employees.

In the long term, we continue to look at Canada pension plan. We share that jurisdiction with the provinces. We cannot make any arbitrary changes to Canada pension plan without the support of the provinces. We did not have unanimous support among the provinces to expand CPP at this moment. We did, however, have unanimous support from the provinces to move forward with the PRPP framework.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, we are talking about PRPPs, about the Canada pension plan, about billions of dollars and about the retirement of Canadians. It is somewhat disappointing that the Minister of Finance would not have chosen this as an opportunity to clearly give an indication to all Canadians about where the government was on the broader picture.

On the announcement of this important bill, I would like to refer to this. Does the minister of state remember the 2006 Conservative election platform, “Stand up for Canada”, referred to in the blue book. The is a specific quote on security for seniors:

Confirm its commitment to the Canada Pension Plan (CPP) and Old Age Security (OAS) as well as the Guaranteed Income Supplement (GIS) as fundamental guarantees of income security in retirement years.

This was a commitment the Prime Minister gave to all Canadians just a few years back.

Even though I would have preferred to pose this to the Minister of Finance, my question is this. Is the Conservative, or the Reform government, prepared to commit to Canadians to support the CPP, the guaranteed income supplement and other pension programs? Are the Conservatives still true to the commitment today they made to Canadians back in 2006?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, we are true to our commitments. In fact, I might remind the third party members that they actually voted against an increase to the guaranteed income supplement to seniors in the last budget. They ran their campaign against it. We tabled our budget in March and they threw us into an unnecessary election. All the way through that we said that we wanted to raise the GIS support for seniors. They told us not to do it, that it was a terrible idea.

Seniors in my riding were shocked and amazed that members of the third party would suggest that. Then when Parliament resumed, they voted against it.

We have a great system, a three-prong one. The Canada pension plan is part of it, a mandatory contribution which is working well. We have reassured Canadians it is working well into the future.

The OAS is a good system, a guaranteed income supplement for seniors who most need it, and that will remain for Canadian seniors.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I thank the Minister of State for Finance for his speech today. It is an indication of the seriousness the government takes on the pension programs when we create a minister of state to deal with those pension items. Never before in Canadian history have we had a minister of state specifically looking at what the issues are when it comes to pensions and helping seniors in our communities.

I also thank the minister for pointing out that any changes to CPP require provincial agreement. We can talk in this House all we want about changes to CPP but if the provinces are not on board, nothing will happen.

In talking about the PRPP, lower costs for Canadians and cost effectiveness, could the minister tell us how he believes this new pension plan would be a low cost solution for retiring seniors?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I welcome my hon. colleague from Burlington back to this House. I am sure he spent much of his Christmas also consulting with his constituents. I know he has had some prebudget discussions with them.

The pooled registered pension plan has taken a lot of time to design. We have looked at models all around the world, in Australia, New Zealand and Great Britain. In fact, Great Britain is now developing its NEST program that it had hoped to put together in a matter of months. It has actually been about three years now. It is a challenge to put one of these programs forward.

We have taken all of the good points out of those programs and put them into this framework with the primary purpose of keeping low costs. That is why we are opening this up to any valid potential provider, whether it is a financial institution, a pension fund or an insurance company, that can provide strong oversight and can carry out the fiduciary duty to be responsible to the plan members, the employees, to ensure that it guarantees the safety of those funds in the plan.

Competition and the volume of plans that will be involved in the pooled registered pension plan will keep the costs low, lower than we have seen in this country. That is why this will be successful. That is why businesses are coming to us and thanking us for putting this forward. Businesses to which I have spoken in the last two days have said that they will take this and provide it to their employees.

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

Mr. Speaker, I am pleased to rise today to offer the New Democrats' perspective on Bill C-25. However, before I do that I want to refresh the memory of the House and Canadians who may be watching.

In June 2009, the House unanimously passed an NDP opposition day motion that laid out how the House should address the pension crisis that was rising rapidly at that time in our country. We will no doubt remember that the motion spoke of the need for a national pension insurance plan to protect workers' deferred wages; that their pension plans would be protected if their companies were to collapse. We also started a conversation at that time regarding a phased-in increase with the goal of doubling the Canada pension plan.

In that opposition day motion, but first in the platform of the NDP in the May election, was an increase to the guaranteed income supplement, a significant increase to raise seniors on GIS above the poverty line. That was for 250,000 Canadians, most of them women. Our party ran an election platform that showed Canadians what our s intentions were for Canada's retirement security program. Nowhere in the Conservatives' platform was there a plank that indicated to Canadians that, once elected, the Conservatives would be changing the eligibility for old age security from 65 years old to 67 years old.

Last week, at the Davos convention, the Prime Minister told Canadians, along with a stunning PMO release, that many Canadians would need to work an extra two years before receiving old age security. Seniors pay taxes all of their lives expecting to have OAS as part of their retirement income. Now, the Prime Minister, apparently, wants to move the goalposts on them. What about single unemployed women? Those are the women who live in poverty under the GIS. They will now need to stay on some sort of provincial assistance for an additional two years because they are already in poverty and need Canadians' help.

I wonder if the government has considered the statistic that people in the bottom 20% of the workforce pass away five to six years earlier than those in the top 20%. In fact, that very condition exists between Ancaster—Dundas—Flamborough—Westdale and Hamilton East—Stoney Creek where the life expectancy differs because of people's poverty rate. Did the government consider that half of all low-income men will collect OAS-GIS cheques for only a short period of 10 years? Raising the retirement age would clearly have a negative impact on those persons aged 65 who are in poor health and unable to continue working.

What about the cost? The latest actuarial reports on the OAS-GIS project that the number of recipients will increase from 4.9 million today to 9.3 million by 2030. I think the opposition and the government agree on that statistic. However, the increase to the projected total cost is much more modest, which is from 2.4% of GDP to a peak of 3.2% of GDP by 2030, and that is because the economy is expected to grow.

However, we need to think about this for a moment. We have a government that, since taking power, has decreased corporate taxes by $16 billion a year. That is $16 billion taken out of the fiscal capacity of this place to make determinations for things that Canadians need and there is nothing Canadians need more than old age security protection.

Therefore, it should be of no surprise to anybody that, if the moneys coming in are removed, somewhere along the line we need to face the problem of what we need to pay out. We should never ever put that burden directly on our seniors, as suggested by the Prime Minister last week.

One may ask what all this has to do with Bill C-25. That is a fair question. The NDP believes that seniors' retirement income security is about far more than one plan or another option. We believe that we need to have a broader conversation on pensions and that Canadians want us to look at pensions as a whole. It is not to cut them but to ensure they are there to protect our seniors in years to come.

I will now speak specifically and more directly to Bill C-25. I would suggest that Bill C-25 appears to have been hastily put together. In fairness to his work, I know the minister of state did travel the country, as I did, listening to seniors. However, there also was a corresponding campaign across this country coming from labour, seniors groups and political parties, most notably the NDP, talking about increasing the Canada pension plan and the need to build the foundation because 12 million Canadians today do not have any savings or pensions and we need to build that foundation to protect them in the future.

The proposal in Bill C-25 would not even guarantee an actual pension. I would suggest that, at best, we should be referring to this as a pension scheme, not a pension plan. It is true that it would be a savings scheme that would pool the funds of members' accounts to achieve lower costs in relation to investment management and plan administration. However, a cautionary word must be put into this at this point. The fees to be applied by the plan managers would not be capped by this legislation. The experience elsewhere in the world is that the fees often erode pension savings to the point that they do not even keep pace with inflation. Clearly, the bill is designed to appeal to the self-employed and workers at small and mid-sized firms, companies that often lack the means to administer a private sector plan.

Another caution is that this plan would be just another kind of defined contribution plan. Employees would contribute a portion of their salary into the retirement scheme where it would be invested in stocks, bonds and mutual funds. Does that sound familiar? It sounds like an RRSP to me. Some companies with a clear conscience that want to see that their employees are well taken care of, although they are not required to do so, may choose to make matching contributions. However, I would suggest that in the climate of the business community today they cut every corner they can.

I want to caution again that this defined contribution plan would in no way guarantee how much money would be left when people retire. As with an RRSP, the market risks would be borne entirely and solely by the individual or the employee. PRPPs would be managed at a profit by regulated financial institutions like banks, insurance companies and trust companies.

As I already cautioned, Bill C-25 places no caps on administration fees or costs. It is flawed in that it merely assumes lower costs will emerge through competition in the market. Did people's telephone bill go up? Did their cable bill go up over the last 25 years since the market was deregulated? Of course they did. PRPPs allow for but do not require matching funds from employers so I believe they simply will not contribute.

Another caution for Canadians is that, unlike CPP, PRPPs would not be indexed to inflation. Provinces and territories would determine whether it would be mandatory for employers or employees of certain sized companies to offer PRPPs. Pooled registered pension plans, as envisioned in Bill C-25, would fail to protect retirement security because they would encourage families to gamble even more of their retirement savings in a failing stock market. If that market goes up, yes, they go up, but if it goes down, they go down with it.

Anybody who has watched their RRSPs plummet over the past year knows exactly how risky savings tied to the stock market can be. Telling families that investing in the same system that is already failing them shows how out of touch with Canadians the Conservatives truly are. The NDP has for the past three years championed a suite of retirement income security proposals, the first, as we have indicated, being that they should increase the Canada pension plan over a period of time that would double the benefits to $1,920 a month in 30 years. Growing the CPP is simply the best, lowest cost pension reform option that is available to us today.

The government must also amend federal bankruptcy legislation to move pensioners and long-term disability recipients to the front of the line of creditors when their employer enters court protection or declares bankruptcy. We have seen company after company across the country take the savings of its workers and treat it is as a secondary fund to pay off its bills.

As I said in my opening remarks, the bill seems to have been hastily thrown together in response to pressure from labour and other groups. However, according to the Conference Board of Canada, something we must keep in mind is that 1.6 million Canadians live in poverty and 12 million Canadians lack a pension plan. By OECD standards, Canada's CPP/QPP system is relatively miserly. Other countries similar to Canada provide far more generous public guaranteed pensions. Social security in the United States has benefits of about $30,000 a year. The maximum benefit in Canada is less than $12,000 per year. Even if we add old age security to that, which is, at a minimum, $7,000 a year, the total is still far below U.S. social security. Most workers have no RRSPs because they cannot afford it. In fact, only 31% of eligible Canadians actually use their ability to invest in RRSPs.

Meanwhile, the latest numbers for the return on CPP investments show that the CPP barely lost ground by 1%, while the stock market fell by 11%. There goes the pooled retirement pension plan down 11%.

The Minister of State for Finance stated that one of the places the government studied was Australia. Australia had a similar plan to PRPPs, but the plan was mandatory, with an opt-out provision. The Australian super fund required employers to enrol their workers in one of the many defined contribution plans offered by the private sector. A recent review commissioned by the Australian government, after 12 years' experience, reported that the Australian super fund did not even match inflation, again, because the fees being charged were eroding it.

For six years, the Conservatives have done next to nothing by way of securing retirement for Canadians. Bill C-25 is yet another hastily thrown together half measure in lieu of real action. Canadians want and deserve better. The government, once again, with these fees, almost like bonuses to the executives, has put the interests of Bay Street ahead of the interests of hard-working Canadian citizens.

We on this side of the House often hear comments about our ability or our chance to govern. If the NDP were to govern, it would ensure that our pension plans would be there to give retirement security to seniors, as they deserve. Canadians do not want their retirement savings subject to the market. If they did, they would invest in RRSPs. It is very clear they need protection.

For some of the reasons that I have just spoken of, New Democrats will not support this savings scheme, because the Conservatives are offering it up instead of taking real action on both protecting existing pensions and enhancing retirement security for those who lack a workplace pension plan at all.

PRPPs are not pensions. While the government claims a PRPP will provide Canadians with lower fees to potential economies of scale that do not exist with RRSPs, there is no data that proves that. In fact, less than one-third of the people entitled to contribute to RRSPs do not do so.

Over 24% of those surveyed use the TFSAs for retirement savings. Yes, that is one tool in the toolbox. However, it is time for the government to take real action to provide retirement security for those 12 million Canadians I referred to earlier, the 12 million who have no savings, who have no pension and who, God bless them, have a very bleak future. Canadians do not need yet one more private plan: a voluntary savings scheme. Voluntary savings have not worked, for a lot of reasons.

This scheme, if enacted, will do little or nothing to improve the ability of Canadians to foresee their future and live in dignity. Expanding CPP on the other hand, would not cost the government any more than the proposed PRPP. Expanding CPP would not entail transferring huge management fees to private institutions because we have the CPP Investment Board already managing the funds.

The PRPP, as outlined in the bill, fails to extend coverage to those who are unable to afford a pension in the first place. I repeated that several times in my speech because that is the essence of the problem facing many Canadians today. They have very little hope for their future in retirement.

I would like to read from the Calgary Herald, November 27, 2010, which says:

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.

Professor Jon Kesselman, Canada Research Chair, Public Finance, Simon Fraser University School of Public Policy, 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.

CARP, which has made many presentations to our finance committee over the years, and the director of political advocacy at CARP, Susan Eng, writes:

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.

At this point I will stop with the other commentary and add that the government has been clearly and repeatedly on notice in the House, since 2009, of a crisis situation for the pension security for Canadians going forward. It is not that this was a surprise out of the blue.

We heard commentary earlier today from the member for Burlington, who talked about the fact that we needed the agreement of the provinces in order to move forward on the Canada pension plan. It is smoke and mirrors because we do need a majority of the provinces. Going into Kananaskis, six finance ministers from across the country wrote to our finance minister in support of expanding the CPP.

There are issues for the provinces, but in the last round of talks between the finance ministers and the Minister of Finance, there was very little said or done on the Canada pension plan. There is room for action on the Canada pension plan and very clearly the NDP believes that is the vehicle of choice and it is the most secure vehicle for moving forward.

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

Mr. Speaker, I also want to welcome my colleague back to the House after the break. I take issue with a few of the things that were said and I would like some clarification by the member if possible.

First and foremost, trying to put words in the Prime Minister's mouth is really not acceptable. What was mentioned certainly was not what was said in Davos.

Aside from that, when we talk about the provinces and their jurisdiction over pensions, we mentioned several times the need for provinces to be on board in expanding CPP. The Canadian Pension Plan Act says very clearly that two-thirds of the population in two-thirds of provinces and territories must be on board and we do not have that, and the hon. member knows that. Therefore, when he cites different provinces that wanted to consider it, there was some room for consideration, but without meeting the criteria of that plan it was not possible. Therefore, I would hope the hon. member would correct his previous statements.

Is the hon. member's party suggesting that we expressly ignore the will of the provinces and territories, which have said very clearly that they want the PRPP, particularly in Quebec which has been our strongest ally in putting forward the PRPP? Is that what the member is suggesting?

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

Mr. Speaker, I also welcome the parliamentary secretary back. I clearly said in my remarks that the Prime Minister spoke in Davos, and I referred to the PMOs issuance that was given to the media. That is where the conversation began on changing age eligibility for OAS from 65 years to 67 years. The Prime Minister spoke on pensions as a whole and it was a combination of that. I am sure that all government members are hearing from their constituents that this is how they understood it.

As far as consensus on the CPP is concerned, I realize what the legislation says. I am saying that the finance minister should sit down with the provinces and talk to them and work through this. The Minister of Finance indicated in the House last June that he was prepared to do it. I asked him at an emergency meeting of finance committee and he said that now was not the time, and I agree.

If we get the go-ahead to change the CPP, there would be a three year window before it would be implemented and then a seven year phase-in period, which would allow companies and workers ten full years to adjust to those changes.

It is clear we have a different view, but we have to maintain communication with the provinces.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, late one night in the Manitoba legislature a group of retired teachers appeared before committee with a passionate plea. They talked in detail about the impact of their pension program and pleaded with the government to do more.

Over the last couple of days people have come to me again emphasizing just how important the pension issue really is. They have also emphasized the importance of having the ability to communicate their messages.

I listened to the member. NDP members may be a bit offside in the sense that they do not necessarily see a role for the private sector to play in helping with pensionable income.

There is an overall retirement issue, whether it is the retirement pensions of teachers, RRSP contributions or contributions to CPP. There is a mixture out there. The OAS, the CPP and the guaranteed income supplement make up the core, and the government has really fallen short in this regard.

I am interested in hearing the member's belief in terms of the overall need for a multitude of different types of pension programs that ultimately help supplement income in retirement years.

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

Mr. Speaker, nobody is saying that there is no room for an option, but this option would fail the test. It would not offer any kind of guarantee as to what someone would have when he or she retired. It would be completely at the risk of market fluctuations. Anybody who has had investments in the last two or three years knows how bad the market can be. It is like riding a yo-yo at times. This would be another tool in the toolbox, but as far as I am concerned it would be a tool that would fail.

We have said, and I said again in my speech, that we should look at pensions as a whole. We should balance them. We should also look at the best possible vehicle for Canadians and that is clearly the Canada pension plan.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I would like to re-examine the government's arguments with regard to the proposed plan. The member for Burlington and the Parliamentary Secretary mentioned that the provinces were not prepared to accept enhancements to the Canada pension plan, but that they were prepared to accept the items set out in Bill C-25.

I closely followed federal-provincial discussions about the pension plan and how to deal with the issue. At the time, the provinces were prepared to accept enhancements to the Canada pension plan, but the federal government said that enhancements were not being proposed and that only their proposal was on the table. Could my colleague comment on this?

The second thing that the Minister of State mentioned is the fact that an enhancement would lead to an increase in Canada pension plan contributions, which is unacceptable especially to employers. Nevertheless, the government has no problem increasing employment insurance premiums, despite the fact that the fund already has a surplus. This would also affect employers. This argument therefore does not necessarily apply to the Canada pension plan, a better plan that would provide much greater economic security for retirees. I would also like to hear what my colleague has to say about that.

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

Mr. Speaker, very clearly, there is a difference of opinion between us and the government on this.

However, the government cannot shut the door on its relationships with the provinces. We have an opportunity here to, in a very direct fashion, deal with the provinces and talk to them about the changes necessary. As I indicated, our understanding is that at least six provinces were pushing hard for this. In some place on this, there is room for dialogue.

As far as the cost go, as I indicated, Canadians are willing to pay their share moving forward. They are not able to do so in the situation today where 12 million do not have pensions and do not have savings. However, it implies they need a bit of a nudge to put some money aside.

If we allow Canadians to put that money into the Canada pension plan, the safest vehicle there is for Canadians, then at the end of the day they will have participated in their own retirement fund and will have taken some of the costs away from the Government of Canada and the provincial governments.

If we do not do this, then 12 million Canadians are going to hit a wall and it will be a very desperate situation for seniors.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I think we have been clear on the CPP issue that the members opposite are bringing forward that we need the consent of the provinces. We do not have it. We have been discussing it with them.

My question today is, if the NDP members really care about workers and the pensions of seniors, why are they not even voting to get this bill to committee so it can be discussed? Was it not the NDP members' premise that they wanted to have Parliament work and for us to work together to find solutions?

Not even voting for this bill to go to committee is not finding solutions for any senior or future pensioner in this country. Why is the NDP not allowing for a discussion of the bill at committee?