Bill C-513 (Historical)

Retirement Income Bill of Rights

An Act to promote and strengthen the Canadian retirement income system

This enactment creates a Bill of Rights for a retirement income system that promotes the goals of adequacy, transparency, affordability, equity, flexibility, security and accessibility for all Canadians.

Retirement Income Bill of Rights

[Judy Sgro, Liberal, York West, ON]

moved that Bill C-513, an act to promote and strengthen the Canadian retirement income system, be read the second time and referred to a committee.

Mr. Speaker, I am very pleased to have an opportunity to discuss an issue that I think is critically important to Canadians and one that I have been involved in for some time, especially as the critic for seniors, pensions and the status of women, which I had previously held. I had an opportunity to talk to countless Canadians.

People who are seniors today talked to me about their struggles and how difficult it was to make ends meet. I talked to people who were in their fifties who said they don't have any ability to save money. It's not that they don't have it, but they don't have anywhere to put it. They don't work for a company that has a pension plan, so they put some into RRSPs but in many cases that's not a pension plan either. Unless they choose to work for the government or some of our major employers that provide a pension plan to which they as well as the employer can contribute, many Canadians are simply out of luck and do not have that opportunity.

Another part of this whole equation and discussion is the issue of the impact on many small companies that have a responsibility and would like to have a pension plan for their employees, but it is far too expensive. They are small companies that are trying to ensure they are able to employ people. We clearly do not want to have an impact on their businesses and deter them from being successful.

I heard that from all different equations. I heard it from the middle-aged.

I did not hear anything from the young folks who are in their thirties because they really think that the government is going to take care of them. When I would say to them, “When you think the government's going to take of you, that means you may be living on $1,500, $1,600, maybe $2,000, if you are really lucky”, they were quite taken aback. They thought that the government had a pension for them. We have old age security and our Canada pension plan. They thought it would be enough. It is not enough.

I think part of our role as government, as parliamentarians, is to ensure that people understand that we cannot sit back and wait for government to take care of us. We have to be establishing a plan. We have to be contributing. It is very difficult for those in a low-income bracket.

However, we have a guaranteed income supplement that was brought in by a Liberal government, as was the old age security, as was the Canada pension plan. However, this is not about partisan politics tonight. This is about trying to move forward to recognize the challenges that are facing Canadians and to help them start to plan.

Financial literacy is a big issue that we will hear more about as I go on with this speech. Canadians are being affected all the time because they have not spent enough time learning what pensions are and why it is important to contribute, as well as finding the opportunities to contribute. That is a major concern.

When I introduced the bill in our last Parliament, it had the support of all political parties in the House. I want to thank the member for Hamilton East—Stoney Creek, in particular, and the member for Macleod, both of whom set aside partisan differences and supported the bill because it was the right thing to do.

While the bill was lost when the election was called, I am hopeful that the MPs in this Parliament will use the same sense of this not being about partisan politics or knocking anyone. It is about trying to think of a future and what we can do to make a difference in the lives of many people.

For clarity, Bill C-513 is exactly the same as Bill C-574. Not one word has changed.

However, I would like to be clear. I am not asking members' support for the sake of an ego or anything else. I am asking for your support so people such as Ray and Dawn-Marie Brown can get the help they need.

For those who did not happen to read Saturday's Financial Post, I would urge them to take a look at the Barbara Shecter story. It is just one small example of some of the challenges that are facing Canadians today. The story tells of how Ray and Dawn-Marie Brown tried to put money away for retirement, but because of financial illiteracy and financial counsel that was not truly in their best interests, which has to stop, they now have the major problem of dealing with a huge debt they took on thinking it was going to help them in their retirement.

Canadians are urged to put their money away for retirement if they have some, but investing is not as intuitive as the industry rhetoric might indicate and good advice is hard to find. The Browns thought they had good advice. It came from a reputable firm. However, $200,000 later, for them it was clearly not good advice.

Worse yet, anyone who is studying the issue of pension reform knows that individuals in a defined benefit pension arrangement accumulate five to seven times more retirement income than those who are not. Put another way, those who have the opportunity to save effectively for retirement have much more gold in their golden years. We as parliamentarians have been very fortunate to be part of a defined benefit plan. However, fewer and fewer people in this country have that opportunity. This should not be about bringing people down to the bottom level. Rather, it should be about how we can increase and provide opportunities for more Canadians to have access to a good pension plan. That is exactly why Bill C-513 is so important.

Traditionally, defined benefit plans are available only to public sector workers and a small minority of private sector workers. That means only those working for large companies or the government have access to this type of retirement plan. Everyone else is forced to go it alone in the markets and face the challenge, as Ray and Dawn-Marie did when they were trying to find a proper investment counsellor to help them invest for their coming 20 or 30 years. That is wrong and Bill C-513 is intended to be the first step toward correcting that inequity.

In a country like Canada, it is unacceptable that senior citizens would be subjected to poverty and squalor during their retirement years. It falls upon all of us as parliamentarians to do what we can to provide opportunities for people to save their money for their retirement years. If Canadians are to take a more active role in retirement planning, then governments must also be prepared to step up and do their share. Private and public retirement saving options must be explored and integrated more effectively with one another. We know that systems, such as the guaranteed income supplement, the Canadian pension plan and the Old Age Security Act are important, but they are only elements of a much larger strategy. That is again where Bill C-513 comes into play.

The legislation is the first of its kind proposed to ensure that our future seniors have better nest eggs and the retirement income security that they need. In broad strokes, the bill would create substantive, justiciable rights relating to retirement income, give every person a chance to accumulate retirement income, promote good plan administration, and set out in law the pension reform goals to which we aspire legislatively. This is about establishing goals. This is about a first step. This is not saying that we will increase pensions or increase anything. This is about setting the goals to which Canadians and governments need to aspire to make sure that the vehicles needed for people to be able to save some money are there.

The government has introduced the PPRP plan. We have suggested the supplementary Canada pension plan, and there are other suggestions out there. However, there needs to be a vehicle for Canadians to be able to invest and save in a well-administered and safe plan. Whatever that plan would be is not in the bill. These are the first steps of a bill of rights that would start to establish the goals that I think government should have.

I want to take a moment to underscore that final point because it may be one of the most important. Bill C-513 would set out in law only the goals to which we should aspire legislatively as they relate to retirement income. It would legally compel both the current federal government and future governments to take real action to promote, enhance and preserve retirement income security, coverage and adequacy.

For years, successive governments have set out their plans to help enhance pensions in Canada, but they have done so without any sort of long-term map. Bill C-513 can be that road map.

This bill of rights is for pension income. It recognizes that a strong retirement income system is essential to the well-being of Canadians and to the overall health of our economy. It recognizes that the Canadian retirement income system is built on a combination of personal, public and private options. It affirms that we have the right to a retirement income system that promotes adequacy, transparency, affordability and equity. It also enshrines these principles in law, while respecting Parliament's constitutional limitations.

To me, and to the hundreds of pensioners with whom I have consulted, pension reform is as fundamental as motherhood. Canadian seniors, particularly the 300,000 who now live below the poverty line, are tired of struggling to make ends meet. They do not want their families and kids to have to do the same thing. Seniors should not be forced to decide between medicine and food or shelter and heat. Unfortunately, we do have certain seniors who for various reasons are in that situation. I do not think any of us want to see that continue. After all, today's seniors are yesterday's labour force, yesterday's caregivers and yesterday's builders of the economy.

If we are going to talk about consumers today, we need to remember to look beyond their current spending abilities. They carried this country through wars, depression and countless other times of difficulty, and they did it while working to raise a family and while building the social programs that we so value today. They deserve better than to be relegated to a life of poverty. It is within our power to give them and their children what they deserve.

Compassion, consideration and respect are terms that go hand in glove with retirement income security, coverage and adequacy. Today, we will conclude the second reading debate on Bill C-513 and we will then be asked to make a decision. Are we prepared to stand with our seniors or are we determined to let them stand alone?

Bill C-513 is not part of any single partisan agenda, and I would be more than pleased to share the credit of passing Bill C-513 with all members in the House. The provisions of Bill C-513 already have the endorsement of several groups, such as the Canadian Medical Association and the Canadian Federation of Pensioners. These groups do not support this effort because they are Liberal. They support it because they, too, believe that the security of the pension promise is paramount.

I have spoken to many members of the House on this subject and I have come to believe that this notion is one that really unites all of us. We have differences on how to arrive at the destination, but the end goal should be the same. Bill C-513 would offer us the freedom to pursue our own legislative paths, so long as the outcome is one that enhances pension security for all.

As I said, I have travelled across the country and I have spoken to many on this subject. Sadly, most are not adequately saving for retirement. This truth clearly requires foresight and leadership on the part of all of us and the government.

Clearly, we have learned that there is a need for a long-term road map for pension reform so that in the next 20 years, when people retire, they have an adequate income. Otherwise, the task falls back to the provincial, municipal and federal governments to provide that aid. This would allow people to survive, but it would not give people a decent level of living. It would still mean that they are living at just the minimum.

If we could encourage the changes necessary and do everything we can to encourage people to put money away, we would all be better off and our seniors would find more gold in their golden years. However, it will take time to make those changes and it will need people, such as all of us in the House, supporting things such as Bill C-513 to ensure that we are moving forward, thinking about retirement for many Canadians and helping them to achieve their goals.

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I guess my first question to the member would be as follows. She said that the bill would just set goals to which governments should aspire. I think those were her words.

How exactly would the bill legally compel any change of government behaviour? Where are the justiciable standards that would create a better nest egg for people in their golden years?

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, if we talk to people today about saving their money, they will tell us that there are PRPPs, RRSPs and a few things like that, but there are very few plans that are a road map to help people to achieve the goal that a defined benefit does for those of us in Parliament. There is even a DC plan for people who work in other companies that are not as quite as affluent as the government when it comes to investing in pensions.

We have to start establishing some benchmarks of what people need to have and we need to help them get there. If they are able to save a few dollars, where would they put it? In RRSPs? They end up taking that out. That is not a given plan.

I am not setting down what the plans have to be. We are suggesting in C-513 that there needs to be a plan as we move forward into the future. Otherwise, much of the responsibilities for seniors as they get older will fall back on provincial government as well as put pressure on our federal budgets.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I applaud the member for York West for her general approach in dealing with the seniors and the pensions issue. She has been a very strong advocate.

Her opposition to increasing the retirement age from 65 to 67 and her commitment to bringing forward the important stability of programs, such as our guaranteed annual income, CPP and pension programs in general, should be commended. She should be commended for the advocacy role she has played in protecting the financial interests of our seniors.

I ask her if she would provide some further comment. When she talks about retirement goals, does she see all of those different forms of pension programs being incorporated into it in some fashion and to what degree?

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I thank my hon. colleague for his continued great work in the House, representing Winnipeg North and working for all of us.

We talk about a bill of rights. We were to have an airline bill of rights. In fact, my colleague from Newfoundland and Labrador introduced an airline bill of rights. It did not cost a whole lot of money, but it was a bill of rights that would have established certain activity, procedures or rights to how passengers should be treated.

This bill outlines how we should treat seniors in Canada, which means we need to put down in legislative form that we will be keep retirement and financial literacy as an important part as we go through the process.

It is up to the federal government to show the leadership that says retirement income is important, the protection of that income is important, ensuring that Canadians are literate on the issue of financial literacy so they fully understand what they need to do to better protect themselves and move forward in the future.

[The Acting Speaker, Conservative, Bruce Stanton]

We have time for a quick question.

The hon. member for Marc-Aurèle-Fortin.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, this is reminiscent of the grasshopper and the ant. Unfortunately, the Liberal Party is made up of a bunch of grasshoppers who want to make sure the ant's stockpiles are at their disposal.

I would like someone to explain how they can be talking about helping people avoid poverty without necessarily talking about how much money will be put in the pension fund, who will put it there and when it will happen.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, we talk about money and budgets all the time. The bill does not talk about how much money needs to be saved. It talks about providing the opportunity for people to become financially knowledgeable about pensions and about where they should invest.

The bill is about the government using this bill of rights in the future as a road map to say that it has a responsibility to ensure Canadians are financially literate. They understand that they have to save money for their future, whether it is a small amount or not.

At the moment people are just sail along, unless they work for a company that provides a pension, thinking they will live on OAS and the rest of it. If we want to help Canadians be better prepared for the future, then we need a road map, and that is what Bill C-513 would do. It calls on the government, whatever government is in play, and hopefully it will be ours the next time around, to devise a road map to help Canadians move forward.

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, I am absolutely pleased to have this opportunity to rise in the House to talk about private member's Bill C-513.

First, our government is committed to standing up for seniors. We do not just talk, we act. We established October 1 as National Seniors Day so people across Canada could pay tribute to the seniors who helped build our country and continue to help make Canada great. We have also taken action to combat social isolation of seniors because we want to ensure they continue to be active members of our communities.

We understand that Canadian seniors have a tremendous diversity of skills and experiences that serve as a benefit to the Canadian economy and we want to give them the opportunity to share their skills and experiences with other Canadians. That is why our government is funding over 1,750 community projects across Canada for seniors.

For example, through the new horizons for seniors program, the Maple Pioneer Italian Seniors Club in Vaughan, Ontario, is receiving $25,000 to purchase a computer, provide lessons and organize outings for over 600 local seniors.

Another aspect of our commitment to seniors is ensuring that they are protected from abuse. This is very important. In Canada, it has been estimated that between 4% and 10% of seniors experience some form of abuse. We know elder abuse is a hidden crime. Cases are vastly under-reported. This crime can take many forms, including physical, financial or emotional. That is why our government passed the Protecting Canada's Seniors Act so t those who committed these terrible crimes would receive stronger penalties.

We are also funding initiatives that help protect seniors against elder abuse. For example, through the new horizons for seniors program, the Punjabi Community Health Services in Mississauga, Ontario, will receive $25,000 in funding for a project where people can learn about various forms of elder abuse. Their discussions and stories will be documented in an educational video that will help raise awareness in the community. This project has been very well received. For instance, Baldev Mutta, chief executive officer of the Punjabi Community Health Services, stated:

Punjabi Community Health Services is excited about the funding we have received. We will be developing a video...to educate South Asian seniors on senior abuse. The seniors are very excited to participate in the project and are getting ready with the script, acting and composition of the story.

That is good news. We are not only protecting seniors from abuse, but we are also protecting the hard-earned money in their wallets. Since 2006, our government has introduced over $2.7 billion in targeted tax relief to both seniors and pensioners. For example, we increased the age credit by $1,000 in 2006 and by another $1,000 in 2009. We doubled the maximum amount of income eligible for the pension income credit to $2,000. We introduced pension income splitting and increased the age limits for maturing pensions and RRSPs to 71 from 61 years of age. These are just a few of the steps we have taken to benefit seniors.

We also have cut the GST from 7% to 6% to 5%. When the recent recession struck the global economy, our government took decisive action. We have ensured that the Canadian economy has remained strong, while many other countries have not. We are very proud of our record. We know and seniors know that we made the right choices for Canadian families, businesses and communities. We have managed debt, we have tackled spending, we have kept taxes low and all Canadians are benefiting.

Our strong economic management has helped create one million net new jobs since the end of the recession. Of course, we are now an international leader in job creation, leading the G7. In fact, just recently the Prime Minister announced the historic Canada-European Union trade agreement. The trade agreement will create even more jobs and bring greater prosperity to Canadians.

We have been demonstrating responsible fiscal management because we know it ensures the sustainability of public services and lower tax rates for future generations.

Canadians gave us this mandate and we are delivering. Just recently Dan Kelly, president of the Canadian Federation of Independent Business, said:

It is clear the Federal Government is listening carefully to the needs of Canadian entrepreneurs by announcing plans to...reduce taxes on small businesses and address the burden of red tape they shoulder.

Indeed, he is correct. We continue to safeguard the Canadian economy. An important part of safeguarding the economy of Canada is ensuring that Canada's retirement income system remains strong. We have done exactly that. Canada's retirement income system is recognized internationally. It is a model that succeeds in reducing poverty among seniors and in providing high levels of retirement income.

This model is based on a three pillar approach.

The first pillar is made up of the old age security and guaranteed income supplement benefits, which provide a minimum income guarantee for seniors.

The second pillar is the Canada pension plan and the Quebec pension plan. Both plans provide a defined benefit in retirement based on an individual's career earnings. Both plans also provide additional benefits, such as disability benefits and survivor benefits.

The third pillar includes tax-assisted private savings opportunities to help Canadians to accumulate additional savings for retirement. This includes registered pension plans and registered retirement savings plans.

In addition, we introduced the highly successful tax-free savings account. I am pleased to report that just a few years after we introduced it, the TFSA is benefiting more than eight million Canadians. They are benefiting from a flexible, tax-assisted savings account that may also be used for retirement savings purposes.

As I have said, Canada's system has been highly effective, but that has not stopped us from taking action to improve it.

In 2012, we demonstrated leadership in this area by passing the Pooled Registered Pension Plans Act that will provide employers, employees and self-employed with a low-cost pension option. This will enable more workers to benefit from the lower costs that result in a large pooled pension plan. This is another tangible example of concrete action that we have taken that will benefit millions of seniors.

This is where our government and the Liberal Party differ. While we take concrete action, the Liberals make empty proposals. While we take positive action to benefit Canadians, the Liberals put forward hollow bills in a cynical attempt to win votes.

Bill C-513 is simply a gimmick, a sham. The bill would apply to less than 10% of pension plans in Canada, and the Liberals know it. It also unnecessarily duplicates existing pieces in federal pension legislation.

Simply put, the private member's bill sponsored by the member for York West is not in the best interests of Canadian seniors and for that reason we oppose it. What we do support are policies that actually benefit seniors.

Unfortunately, I am not surprised that this empty bill has come from the Liberal Party. After all, the Liberal leader himself fails to provide any serious policy. He seems more concerned about his drug smoking policy.

While our government listens to Canadians who want a better job and a brighter future, the Liberals listen to pot smokers who want a bigger joint and a better reefer. Canadians know better. We take the pension system very seriously. We take the economy seriously. We will continue to ensure greater financial security for seniors and prosperity for all Canadians.

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I rise today to speak to Bill C-513, the so-called retirement income bill of rights. As I will describe in greater detail later, I have very serious reservations about supporting the bill even at this stage, but on balance, I believe that it is more important that the bill be sent to committee for careful scrutiny than it is to vote against the bill at this time.

The stated goal, as the member for York West noted, is to enshrine in law the notion that all Canadians have the right to contribute to a decent retirement plan. Unfortunately, this Liberal bill contains some very vague declarations and half measures, which we will not oppose, but does very little to actually improve the retirement security of Canadians. I will discuss the actual contents of the bill later.

In the meantime, let me talk about what the bill is not about.

Canadians are not saving enough for their retirement. No one disagrees with that statement. I am particularly worried about the younger members of our workforce.

Last January, the Prime Minister announced that he would increase the eligibility age for old age security, effectively raising the Canadian retirement age from 65 to 67. New Democrats have committed to reversing those changes, and expert bodies such as the OECD and the Parliamentary Budget Officer agree that this dramatic change was not necessary. The old age security system as it was is entirely sustainable.

By 2030, Conservative cuts to the OAS will slash $11 billion in retirement income from seniors as they raise the retirement age to 67. That amounts to $13,000 in retirement savings out of the pockets of every Canadian senior. Combined with cuts made by the previous Liberal administrations, cuts to both CPP, the Quebec pension plan, and OAS will take $26 billion in retirement income away from Canadians.

Retirement security is one of the most pressing economic issues facing Canadian families today. As many as 5.8 million Canadians, nearly a third of our workforce, are facing a steep decline in their standard of living once they retire.

The simple truth is this: a great number of Canadians are simply not saving enough. As a result, provincial governments, the Canadian Labour Congress, Canada's largest retirement group—CARP—and various financial experts have all been calling on the federal government to move forward with plans to increase the Canada pension plan.

The chief executive officer of the CIBC, Mr. Gerald McCaughey, has also been speaking out about the need to improve our public pensions, and the former chief actuary of the Canada pension plan, Mr. Bernard Dussault, supports doubling the CPP. We hope the Liberals do the right thing and get on board. So far they have opposed expanding the CPP, even though provinces, experts, unions, and CARP have all been on side.

Provincial finance ministers have indicated strong support for an increase to the CPP, yet in June, the Minister of Finance failed in his commitment to meet with provincial and territorial finance ministers to get going on this job. When will the Conservatives stop standing in the way of the reforms that so many take for granted as necessary and indeed vital?

Let me turn to this bill.

The title, “retirement income bill of rights”, is very misleading. The bill only addresses certain features of the retirement income system. It purports, as the member said, to promote certain goals, such as adequacy, transparency, affordability, and so forth, but it is entirely unclear how those goals would be achieved.

To call it a bill of rights is misleading in the extreme. What does it mean? As a lawyer, I must point out that this is no Charter of Rights and Freedoms. It has no constitutional force. It has no way to render an inconsistent regulation or bill of no force and effect, as the charter can do under our Constitution, so it is rhetoric. To call it a bill of rights, or in French, une déclaration des droits, is misleading in the extreme. It is empty rhetoric.

If it is enacted, it is just going to be another statute. It might have some interpretive force, but for reasons I will describe, it is hard to believe it will have any real impact.

The bill is also very badly drafted. Sometimes it says “every individual has the right...”, and then it says “every individual must have the right...”. In French it only says, tout individu a le droit. Why are there differences in drafting? It is of no particular force and effect. Lawyers are going to have a field day with the bill as it is currently drafted.

A couple of the sections are entirely superfluous. It says it applies to Canadian legislative authority, the legislative authority of the Parliament of Canada. Obviously that is the case. Why put a section in? There really are only nine substantive clauses in this bill.

Let me turn to the first of them. Clause 4 says, in part, “Every individual has the right to accumulate sufficient pension income...to provide for a lifestyle in retirement that the individual considers adequate...”. What does that mean? It is an entirely subjective standard. If I believe I have a right to a Rolls Royce pension in my retirement, what does this bill say about that? It is my belief that counts, it seems to say. Moreover, clause 4 of the bill goes on to say that even that right is “subject to any reasonable restrictions imposed by a federal law”, except those restrictions cannot be based on “...[such] personal characteristic[s]...as age, sex, national origin or occupation”. Most of those things are already covered, and have long been covered, by the Canadian Human Rights Act, so they would make no difference and would change nothing.

As for the “occupation”, I have a lot of trouble understanding what that would mean. Is it not obvious that one's occupation will determine in part the extent of one's retirement income? Is that not a reasonable restriction? If one person is a CEO and another person is a cashier, are not their respective occupations reasonable restrictions on their retirement income? According to this bill, as I read it, that would not be the case, and so I do not know what it means.

Clause 5 discusses how an individual can “...determine how and when to accumulate pension income...”. It goes on to say, “...except that an individual who participates in a workplace plan may be required by that plan to save for retirement”. How would that change the status quo? Would it simply prohibit an employer from forbidding workplace pension plans? If so, it may be of very little value indeed.

Clause 7 would require retirement income plans to provide a “full, accurate and timely disclosure of...[all] material risks...”. Presumably, if consumer protection legislation to that effect does not already exist, that may be of some value.

Clause 8 would codify common law. All it says is that those providing investment advice could not have a conflict of interest. I assure members that is pretty well standard in the industry. It is hard to believe that would add any value.

The bill goes on to say a number of things about training and financial literacy that are all very useful, I suppose. However, greater clarity would be achieved if the laws the bill refers to were actually amended themselves, rather than putting pious statements in this other bill.

This bill contains very little of substance that would address why Canadians are struggling to save for their retirement. Portions of the bill refer to transparency of plans and access to information. That would certainly be helpful, but it is regrettable that the bill is mostly made up of grandiose proclamations of retirement rights, which would do very little to change real people's lives.

New Democrats are committed to addressing retirement security needs of Canadians. We have made strong commitments to strengthen our pension plan system and to ensure that Canadians have a secure retirement. This bill would do nothing to change those fundamental issues. It also fails to include any reversal of the Conservatives' retrograde changes to the old age security and guaranteed income system, which will leave seniors more vulnerable at the time of their greatest needs.

In conclusion, I hope that by introducing this bill the Liberals are not demonstrating that they think window dressing is sufficient to address an issue that affects the future retirement security of Canadians. New Democrats are proposing real solutions, such as increasing the CPP and reinstating 65 as the age for accessing old age security. We will support this bill and hope we can strengthen it at the committee stage.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I am very pleased to rise in support of the bill put forward by my colleague. I would to take this opportunity as well to correct some of the misstatements by the NDP and Conservatives on this matter.

I think my NDP colleague does not really understand the limitations of a private member's bill. What this would do is set out in law the legal framework, the bill of rights. It would also address issues of financial knowledge and literacy. However, he seems to imply that this means it is the only Liberal policy. That is far from the truth. A private member's bill, he should know, does not allow expenditure of funds. The Liberals have very concrete proposals outside the scope of this law that do involve funding and which would improve the pension situation of Canadians.

As for the Conservatives, it was amazing listening to that speech. It was eight minutes of boasting about previous Conservative measures with virtually nothing about pensions at all, except a litany of what the Conservatives had done, but nothing whatsoever about the problems and challenges of the future facing Canadians as the population ages.

Let me just remind the House of some of the problems that the Conservatives have failed to address. Then I would like to speak about some of the Liberal proposals, which my NDP colleague has studiously avoided.

Members may not know that 75% of Canadians working in the private sector do not have access to any pension plan, except those provided to all of us by the Canadian pension plan, old age security and the guaranteed income supplement. These three provide a maximum income of some $27,000 per year, although the great majority of people receive significantly less. Experts tell us that Canadians in the private sector earning between $30,000 and $100,000 who plan to retire in 20 years will not have enough retirement income to cover necessary living expenses. Those are enough statistics to give us the idea that we have a problem. We have a challenge in our country about our future pensions, a challenge that the Conservatives studiously ignore.

Let me now come to proposals for dealing with this problem.

First, a Liberal government would certainly repeal the idea of increasing the age for the old age security from 65 to 67. Contrary to what the government says, the chief actuary and other experts say that the current system is indeed sustainable. There is no need to move in this direction.

Second, even if we wanted to save money, this is the most heartless, cruel way to do it. By raising the age from 65 to 67, we deprive people who may have had hard-working physical labour and cannot work longer of not only old age security but also of GIS. It hits hardest the weakest and most vulnerable members of Canadian society and will throw them onto provincial welfare.

If the government did have to save money, and we do not believe it does, a better more humane way would be to reduce the maximum income level at which one collects OAS from something over $100,000, which it is today, to a lower figure. That would be a better, more humane way to do it than raising the retirement age. However, our view is we do not have to do either because the system is sustainable.

That is the first action by the Conservatives on pensions, which is completely negative, retrograde and will hit the most vulnerable.

The second is their pooled retirement plans, which the Conservatives have introduced with great fanfare, but which are really nothing more than a glorified registered retirement savings plan. The take-up by provinces has been minimal. The guarantees against excessive charges by the private sector are non-existent. The inadequacy of these proposals are such that provinces have been led to propose increases to the CPP to the point where I believe two provinces, Ontario and British Columbia, have said that if the government will not go ahead with the CPP enhancement, they will make their own provincial pension plans.

That, as experts tell us, is distinctly a second-best solution compared with an increase in the national plan, but they are so frustrated and aware of the challenges, which the federal government fails to address, that they are going to go this route on their own should sufficient numbers of provinces and the federal government not agree to go with the Canada pension plan.

In order to deal with this issue of inadequate pensions, the Liberal Party previously proposed a supplementary Canada pension plan. It would be a voluntary plan involving auto-enrolment so that a high proportion of individuals would likely participate. Since the last election, we have evidence from the U.K., which has introduced a similar plan with good enrollment and with minimal cost. In other words, this could be a good solution to our future pension challenges.

One major advantage it would have over the government's pooled plan is cost. This would be a government plan with costs equivalent to the Canada pension plan, significantly less than one percentage point per year, compared with private sector plans, which are one, two or even three percentage points per year, a much higher cost.

As experts have shown us, a fairly small difference in those costs, between say 1% and 2.5%, can cause a reduction in one's pension in the order of 25% to 30% because of the power of compound interest. As I have said previously, let a thousand flowers bloom. Let the supplementary Canada pension plan proceed to provide competition with the private sector. Let it put forward its best products and let the consumer decide whether to go with the private sector or the supplementary Canada pension plan. I think that would provide more choice and better options for Canadians to deal with their retirement challenges in the future.

Finally, we are also very interested in the proposals currently being put forward by Prince Edward Island, and supported by Ontario, to expand the Canada pension plan, if only because the government's actions are so totally inadequate. Some reaction is necessary, whether it is a supplementary Canada pension plan, as we propose, or a moderate expansion of the existing Canada pension plan put forward by a number of provinces. As I said, certain provinces are even prepared to have their own provincial pension plans should this one not materialize.

Both an expanded CPP and our previous proposal for a supplementary CPP have the advantage of low cost, 1% or less per year, and that, compared with the private sector alternative favoured by the government, would produce materially better pensions in the future for Canadians.

In summary, I believe that my colleague's bill is a good bill. I think it provides a legal framework setting out Canadians' rights, a bill of rights. It also deals effectively with the financial literacy issue.

It is not a panacea, as my colleague would be the first to admit. Private members' bills cannot spend money, just as the NDP's bill on housing strategy does not have any money either. That is not the function of private members' bills.

However, when the member's bill is combined with other proposals, first of all, not to raise the retirement age from 65 to 67, and also to go with either a supplementary CPP or a moderate expansion of the existing CPP, then the bill, in combination with those actions, would provide a groundwork or a good start in dealing with the pressing pension needs of Canadians.

Contrast that with the Conservative speech, which did not even acknowledge future problems, let alone make proposals on how to deal with this problem. Contrast that with the NDP speech, which, while that member supported our bill, seemed to have a false or inflated idea of the eligible or permitted scope of private members' bills in general.

When we put all these things together, I am very pleased to support the bill.

[Andrew Saxton, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I am pleased to have the opportunity to speak to this private member's bill today, particularly because it deals with Canada's retirement income system. This is an issue about which I and the Conservative government feel very strongly.

Seniors in my riding of North Vancouver, and indeed across Canada, have spent their lives working hard to build stronger communities within a more prosperous Canada. Many seniors have made great sacrifices to provide the lifestyle and privileges that so many of us enjoy and sometimes take for granted. It is their hard work that has helped make Canada the greatest nation in the world.

We have tremendous respect for Canadian seniors. That is why our government has been demonstrating our commitment to them for more than seven years.

For example, we established October 1 as National Seniors Day. We have funded more than 11,000 new horizons for seniors program projects in hundreds of communities across Canada, including in my community of North Vancouver. We have invested in helping seniors quickly access information about the programs and services they need in their communities. We have passed the Protecting Canada's Seniors Act.

The Protecting Canada's Seniors Act is an important piece of legislation regarding a very critical issue. It will help ensure consistent, tough penalties for crimes involving elder abuse. The act confirms that age and other personal circumstances will be considered as aggravating factors for criminals who target the elderly.

Our government has also taken concrete action to ensure that seniors and pensioners continue to have more money in their pockets, so that they can enjoy the quality of life they have worked so hard to achieve. For example, we have introduced pension income splitting, doubled the maximum amount of income eligible for pension income credit, increased the maximum GIS earnings exemption to $3,500, increased the age credit by $1,000 in 2006 and another $1,000 in 2009, and increased the age limit for maturing pensions and RRSPs to 71 from 69 years of age. The government has also introduced the highly praised tax free savings account and cut the GST from 7% to 6% to 5%. Overall, our action has resulted in the delivery of over $2.7 billion in targeted tax relief to seniors.

Let me tell the House about some of the seniors who are benefiting. People like Harold and Shirley, a retired couple, are real people. For many years, they worked hard and paid their taxes. Each year, they receive $55,000 and $25,000 respectively in pension income. As a result of the actions our government has taken since 2006, they now have more money in their pockets.

Harold and Shirley are expected to pay $2,260 less in personal income tax. This includes about $700, which they have saved by taking advantage of pension income splitting, and about $960 from the doubling of the pension income credit and the increases in the age credit. They are also paying $740 less because of our GST cut. This adds up to a total of $3,000 in tax relief for 2013 alone. This allows Harold and Shirley to keep more of their pension income right where it belongs: in their wallets.

This year's economic action plan builds on these efforts and contains more measures to benefit seniors. For example, we are expanding tax relief for home care services to include personal care services for those who, due to age, infirmity or disability, require assistance at home. Our government is supporting palliative care services by providing the Pallium Foundation of Canada with $3 million over the next three years to support training for front-line health care providers. We are assisting in the construction and renovation of accessible community facilities by investing $15 million a year in the enabling accessibility fund.

Seniors are benefiting not only from these measures but also from our country's strong retirement income system. This system is based on three pillars. The first pillar is the old age security program, which provides a basic minimum pension for all Canadians.

The second pillar includes the Canada pension plan and Quebec pension plan. These plans ensure a basic level of earning replacement for working Canadians. They currently provide over $45 billion per year in benefits.

The third pillar of Canada's retirement system includes tax-assisted private savings opportunities to allow Canadians to accumulate additional retirement savings. This includes registered pension plans, registered retirement savings plans, and, as I mentioned earlier, the tax-free savings account we introduced.

Though this three-pillar system is strong, we have taken action to improve it. In 2012, our government passed Bill C-25, the Pooled Registered Pension Plans Act, to provide employers, employees, and the self-employed with an accessible large-scale and low-cost pension option.

For millions of Canadians, PRPPs, as they are called, will provide access to a low-cost pension arrangement for the very first time. They will enable more workers to benefit from the lower investment management costs that result in a large pooled pension plan.

PRPPs are portable and represent a tremendous opportunity for many employees and small businesses that want greater pension plan options as they prepare for retirement.

The Canadian Federation of Independent Business welcomed our PRPP legislation, stating that “PRPPs will be an excellent addition to the retirement savings options for small business owners and their employees.”

We agree. PRPPs are an outstanding addition that will benefit millions of Canadians. It is estimated that 60% of Canadians are not provided with a pension plan by their employer. PRPPs would fill this gap.

I would also like to note that the system our government is building on is one of the greatest retirement income systems in the world. Canada's retirement income system is recognized around the world as a model that succeeds in reducing poverty among seniors. It also provides high levels of replacement income to retirees.

Andrew Coyne of the National Post wrote:

By most measures, Canada's retirement income support system is an outstanding success. The poverty rate for Canadian seniors...is among the lowest in the world.

He is correct.

Unfortunately, the bill we are debating today, Bill C-513, does nothing to benefit Canada's strong and world-renowned retirement income system and brings no value to helping seniors. In fact, the private member's bill from the member for York West could seriously impair key aspects of the existing pension and retirement savings system. It falsely claims to provide a retirement income bill of rights, but in fact the bill would only impact pensions that are federally regulated—that is, less than 10% of all pension plans in Canada. To be clear, over 90% of all pension plans in Canada are not covered by this bill.

The bill also unnecessarily duplicates existing provisions in federal pension legislation, such as information disclosure provisions to pension plan members and retirees, and fiduciary requirements for pension plan administrators.

Bill C-513 also falsely claims to enhance the financial literacy of Canadians. Indeed, the bill is repetitive and would introduce needless complexities to our government's actions in this area over the past years.

With financial products constantly evolving, we know that financial literacy is an increasingly necessary skill for all Canadians to learn. As November is Financial Literacy Month, I am pleased to note that our government has taken action to increase the financial knowledge of Canadians. We began by establishing the task force on financial literacy and committing additional funding to the Financial Consumer Agency of Canada to undertake financial literacy activities.

We passed Bill C-28, the financial literacy leader act, to allow for the appointment of a financial literacy leader. Once appointed, the financial literacy leader will work with stakeholders across the country and direct a national strategy on financial literacy. This will empower Canadians by equipping them with the skills they need to make the best financial choices.

This year's budget also committed to better protecting seniors who use financial services. This initiative will be completed by working with banks and other financial institutions to ensure they develop and distribute clear information. This will help ensure seniors get the information they need about powers of attorney and other bank services geared toward seniors' needs.

Our commitment to financial literacy is clear. What is also clear is that this private member's bill is simply not in the best interests of Canadians.

We will continue to take action to benefit Canadians and seniors and to create prosperity for them and for all Canadians.

The House resumed from November 5, 2013, consideration of the motion that Bill C-513, An Act to promote and strengthen the Canadian retirement income system, be read the second time and referred to a committee.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I have the honour to rise in the House to speak to a private member's bill, Bill C-513, which was introduced by the hon. member for York West, one of our Liberal Party colleagues.

I would like to read the bill summary so that everyone knows exactly what we are talking about. It states:

This enactment creates a Bill of Rights for a retirement income system that promotes the goals of adequacy, transparency, affordability, equity, flexibility, security and accessibility for all Canadians.

Everything that could be in there is, and who would not want those things? As a result of this description, we will support the bill at second reading, even though it does not contain any real advances with regard to the extremely important issue of future old age pensions.

This high-sounding statement talks about the right to retirement income. However, it does not seek to enhance the Canada pension plan and the Quebec pension plan. That is a bit worrisome for such a broad statement that seems to cover the entire future of Canadian pensioners. The bill does not even address the issue of the Canada pension plan, which is the fundamental tool for planning for the future of retirees, particularly those with fewer means.

The bill also does not seek to reverse the changes to the old age security program so that Canadians can once again be eligible for benefits at age 65. The current government decided that, from now on, Canadians would not be eligible for these benefits until age 67.

Since we are talking about a private member's bill from a Liberal member, there is one thing that I think is extremely important to point out. The cuts to the Canada pension plan made by the former Liberal government will total the exorbitant amount of $15 billion a year in 2030. That is what the Liberals did a few years ago, and today, they are making a grand statement about the need to have accessible, transparent and affordable pensions.

Actuaries are being asked to find solutions to ensure that our pension funds are viable in the long term. Just imagine how decisions made by previous Liberal governments and the current Conservative government make their lives impossible.

Let us discuss the consequences of a pension plan that will not meet the challenges of current and future demographic change. Transfer payments make up more than 90% of the income of seniors living in poverty in Canada. The pension plan represents 90% of the small amount of money that prevents the poorest retired Canadians from living in abject poverty.

According to the National Council of Welfare, between 122,000 and 567,000 seniors lived in poverty in 2008. Need I remind members that, over the past 40 years, they built one of the richest economies on the planet? Now they find themselves in poverty.

There are currently 11 million Canadians without a workplace retirement plan, and many young families are struggling to pay for their children's education and their mortgage. Consequently, they do not have a pension plan.

Between 2005 and 2010, the rate of poverty among Canadians 65 and older increased by 2%. Of the 34 most advanced countries, only Turkey, Poland and Canada lost this much ground.

According to the Organisation for Economic Co-operation and Development, these poor results are in part due to the current Canadian pension system, or at least the way it is managed. Public transfers represent less than 39% of the gross income of Canadian seniors, compared to an average of 59% for OECD countries.

In this situation, approximately 5.8 million Canadians could see a significant deterioration in their standard of living when they retire.

On average, this will affect women even more than men, as 70% of seniors are women.

Let us talk about the opposite scenario, in other words the impact of having a pension plan that addresses the challenge of current and future demographic changes.

The most important thing is that we have a moral obligation to ensure that an entire generation does not end up living out retirement below the poverty line. That is essential.

Nonetheless, there are economic aspects to consider, things as basic as maintaining a certain purchasing power.

The Parliamentary Budget Officer confirmed that bringing the retirement age back down to 65 would not threaten the pension plan. Increasing the retirement age to 67 is a striking example of the government taking money out of retirees' pockets.

In our economy, which has been developing for many years, the manufacturing sector accounted for only 12% of the jobs in Quebec in 2011. Ten years earlier, it accounted for 18% of the jobs. These well-paying jobs in the processing industries are often shipped to developing countries. Another type of economy and service is developing.

Where is the government collecting its taxes from? It is thanks in large part to consumer spending. Sales tax has slowly been replacing business income tax.

More and more, the economy is being driven by consumer spending. The lack of long-term vision, and the fact that millions of pensioners living in financial conditions whereby they will no longer—in 5, 10, 15 or 20 years—be able to afford to eat out once a week or go on short vacations, is a moral and ethical problem, but also an economic problem.

We have a real retirement security crisis on our hands that might trigger an economic slowdown in the medium and long terms and problems for the public treasury if nothing is done about it.

Consolidated savings through increased contributions to a public retirement fund seems like a surefire way to secure a number of important aspects.

A public retirement fund would ensure a better savings rate among Canadians, a better return, less dependence on voluntary contribution models such as RRSPs, which often are barely or not at all within reach of low-income families, and in the end, a decent income for our seniors and a healthy economy.

The current government does not seem to be thinking about these obligations. It has a short-term vision.

A number of my NDP colleagues ask questions about the pension plan, and the government always tells us that now is not the time. It will never be the time if the government keeps its short-term vision and does not think about what will happen in 10, 20 or 30 years if we do nothing. They can keep saying that tomorrow morning is not the right time and then nothing will get done.

The Minister of Finance did not fulfill his commitment to meet his Canadian counterparts in June. The provinces were expected to approve an increase to Canada pension plan benefits, but they cannot do that as long as the federal finance minister refuses to meet with them.

We cannot forget that Quebec is different when it comes to negotiations between the federal and provincial governments. In Quebec we have the QPP and not the CPP. I do not know how quickly these negotiations could move in order to improve the pension plan to avoid the crisis that is expected to strike retirees in 15 or 20 years.

The government should at least sit down so everyone can work on it together and see what we can start doing now that will result in fewer Canadians struggling with poverty in 20 years. That would be encouraging, but we are not even getting that from this government.

Actuaries like Bernard Dussault, who was the chief actuary of the CPP from 1992 to 1997, fully support a small increase to help provide for the future of Canadian retirees.

We have to remember that sooner or later we will all be seniors. Some people will be privileged, like many members in this House who were fortunate enough to be elected twice and will have access to an excellent pension. Do not think about those people. Think about the increasing number of families who struggle to pay their mortgage. These people deserve to be living with dignity 10, 15, 20 and 35 years from now.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, I am pleased to stand in support of Bill C-513. This is a bill that was put forward by my friend and colleague from York West.

I certainly hold in high regard the work that the member has done on this particular issue. I know that over the last number of years she has travelled the country and met with numerous stakeholders, many Canadians who have voiced their concerns around the entire pension issue. This bill is an outgrowth from that experience.

The member listened to experts in the field and to a broad range of voices from many sectors, and I am sure she would be able to share that when she has an opportunity to speak herself. I am sure that was her motivation; trying to help Canadians in their later years is certainly what brought this bill to the floor.

To understand the focus of the bill, it is important that we appreciate the changing demographic in this country. Certainly our aging population, where Canadians are living longer and some are retiring sooner, puts a shift in the paradigm as to how many people in this country are contributing and how many are benefiting from investments in pensions.

As a matter of fact, the ratio has changed considerably over the years. If we look back to 1980, the ratio of retirees to workers was at 36% in 1980, and today that ratio is 53%. That is fairly substantive, and it is a shift, so we have to look differently at how we prepare for retirement. That demographic shift alone places many Canadians' retirement at risk.

A recent survey indicates that 30% of Canadians feel they would not be able to retire at the age of 65. We see that more and more now, whether it is from necessity, or that they want to continue to work past the age of 65, which is not uncommon in this day and age. However, among those Canadians who would like to retire at the age of 65, at least 30% of them feel they would not be able to do so. Also, that study identifies that only 14% of seniors believe they are going to be able to retire with any degree of comfort. They have anxiety leading up to the point when they do retire.

What we are seeing is the development of a two-tier retirement in Canada. We have those who get along quite well and are comfortable. They have had a pension plan that they have been able to pay into, or they have earned quite well, and saved and invested well for their retirement. Then we see the people at the other end of the spectrum, who have not had the benefit of a company pension plan and have not made the money they felt was necessary to invest and save. They have spent most of their time trying to get by and raise their family. We are seeing that gap widen between those in retirement who have and those who do not have.

Some additional statistics that came out of that study are that 75% of Canadians working in the private sector do not have a pension plan other than CPP, OAS, or a guaranteed income supplement. Seventy-five per cent of Canadians is certainly a number we should all be concerned about.

Many Canadians expect to depend mostly on those government benefits in retirement. However, together these government plans can pay only up to a maximum of about $27,000. The average is considerably less.

Those who work for the government or a large company will have some type of plan to rely on. I know of some unfortunate cases, which we can find right across this country, of companies that have come up against hard times. One of the first casualties of tough economic times is an investment in the company's pension plan. We know that they do not have to be fully funded. There are laws on the level of funding for company pension plans.

Stora Enso, in my riding of Cape Breton—Canso, is a company that has been a great corporate citizen and has had a great history in the riding. It did newsprint and high-end glossy paper for many years. However, we know where newsprint and the paper industry have gone in this country and globally. When Stora Enso fell upon hard times, it sold to NewPage Corporation. One of the things NewPage did not invest in was topping up the defined benefits pension plan. When the company went into receivership, many people who left the mill years ago all of sudden themselves making 40% less from their pensions than they did before the downturn and the bankruptcy.

People have a particular lifestyle. They think that they will have a guaranteed income going forward into retirement. To have almost half of that pulled away certainly comes as a shock to many. That is what the retirees and pensioners of Stora Enso and NewPage have experienced.

The provinces recognize this, and they have been pushing the federal government to expand the CPP. However, the government has been dragging its heels. We have heard the minister responsible stand in the House and speak against that. However, it is coming in loud and clear from the provinces that changes have to be made. The government's new PRPP retirement plans are voluntary tools. Employers do not have to offer them, and employees do not have to use them.

We know that Canadians are not saving enough for retirement. There are reasons for that. In the last five years, we have seen an increase of 78% in the number of Canadians who are working for minimum wage. People working for minimum wage are doing the best they can to pay the bills. People are doing the best they can to keep the wolves away from the door if they are trying to run a household on minimum wage. Therefore, they are not able to make those types of investments in savings. What they are investing in is food and heat and lights for their homes. That has to be of concern.

CIBC recently did a study that showed that a 35-year-old today saves half of what a 35-year-old saved a generation ago. I think we all know about those experiences.

To sum up, the bill does two things. It gives Canadians the right to contribute to a decent retirement plan and to be provided with up-to-date, unbiased information about their savings plans. That is worthwhile and noble. If we were able to embrace that through this legislation, those principles would serve us well. That is why I would be happy to stand and support my colleague from York West when the opportunity arises to vote on this piece of legislation.