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

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, I appreciate the opportunity to debate this private member's bill this afternoon.

First, our government is dedicated to supporting Canada's senior citizens. Many have spent their lives working hard, while demonstrating great resolve and determination to make this country great. As the older generation passes the torch along to a new and younger generation of Canadians, we want to ensure that seniors are always respected and receive the appreciation they deserve.

We have also taken concrete action to benefit our seniors. I would like to take this opportunity to highlight just a few of the steps we have taken in that vein.

Our government has established October 1 as National Seniors Day to pay tribute to the seniors who have helped build our country and continue to help make it great.

Since 2006, we have funded over 11,000 new horizons for seniors programs and projects, in hundreds of communities across Canada. The new horizons for seniors program is a federal grants and contributions program that supports projects led or inspired by seniors who want to make a difference. Projects must be led or inspired by seniors and address one or more of the following five program objectives: promoting volunteerism among seniors and other generations; engaging seniors in the community through the mentoring of others; expanding awareness of elder abuse, including financial abuse; and providing capital assistance for new and existing community projects and/or programs for seniors.

One other objective of the new horizons for seniors program is to combat social isolation. Although it is not the case for every senior, there are too many who are not aware of or cannot partake in their community's activities due to social isolation. Research clearly shows that isolation continues to be a serious concern, particularly for older Canadians. We take it very seriously.

Recently, the Minister of State for Seniors conducted calls for proposals for projects that focus on one of three priorities: identifying seniors at risk of isolation and determining the existing programs and services that could support them; expanding community-based services for seniors who are experiencing or are at risk of social isolation; and supporting social participation through intergenerational learning.

By doing this, our government is making it easier for seniors, individuals, and organizations to form partnerships with the not-for-profit sector, the private sector, and governments, to localize and leverage the resources in their community. We are pleased to help create partnerships that would form a circle of support around all seniors in our communities.

Another object of the new horizons for seniors program is protection. I am proud to note that our government passed the Protecting Canada's Seniors Act. This act will help ensure consistently tough penalities for criminals who have committed elder abuse. We want to ensure that seniors feel safe and secure in their homes and in their communities. We believe this legislation will help.

We are not only committed to protecting the safety and the security of seniors, but also to protecting the security of their pensions and Canada's retirement income system. Obviously, the level of retirement income in Canada is directly related to the state of the Canadian economy.

I am proud to note that just last week, Statistics Canada announced that the Canadian economy grew by 2.7% in the third quarter. This is the ninth consecutive quarter of economic growth in Canada. This is yet further evidence that despite a fragile global economic environment, our government's economic action plan is working. We are also on track to balance the budget in 2015, all the while keeping taxes low.

Our plan is working. That does not mean we have not faced difficulties. We have faced the adversity of the worst recession in a generation. We have faced the difficulty of an opposition party that wants to raise taxes and punish job creators.

Recently, we faced a new threat. It is not the same as the economic threats that lie beyond our shores; rather, this is one that is right here at home. It is the threat of one of the world's most inexperienced leaders, the member for Papineau. Time and time again, the Liberal leader shows poor judgment. This is the type of judgment that would damage our economy. It would damage the confidence of foreign businesses looking to invest in Canada. It would create dangerous instability that would prevent businesses from expanding.

It almost sounds comical, but sadly it is true. Even though he is the federal Liberal leader, he has not put forward one single economic policy. While many Canadians are honourably giving their hard-earned dollars to support charities, the elected member for Papineau was taking those same charity dollars and pocketing the speaking fees. While we create greater prosperity that gives the nation hope, he emphasizes dictatorships and free-flowing dope.

Pensioners and seniors know better. They know the Canadian economy has benefited from the unprecedented leadership of the Prime Minister for eight consecutive years.

In fact, the Prime Minister has recently signed an historic trade agreement with Europe that will contribute to greater prosperity in Canada for generations to come. Canada has also profited from our prudent and responsible fiscal plan. This has been led by the Minister of Finance. They do not call him the world's greatest finance minister for nothing.

Across the globe, Canada has a reputation as a nation with steady leadership and a strong economy. Despite the economic threats that continue to exist outside our borders and beyond our shores, Canada has enjoyed strong economic performance during both the recession and the recovery.

I would like to highlight a few other examples of how our plan for creating jobs, growth and long-term prosperity is benefiting Canadians.

Since 2009, Canada has created over one million net new jobs. Almost 90% of those are full-time and more than 80% are in the private sector. This is the strongest job creation record in the entire G7.

This is good news, but we cannot be complacent. We must continue to take responsible, prudent steps to build our economy. Economic action plan 2013 is continuing to support our economy. It includes helping small businesses by extending the small business hiring credit, helping manufacturers with tax relief when they make new investments in machinery and equipment, and supporting persons with disabilities with new training investments to help them secure employment.

Economic action plan 2013 also keeps taxes low. We are keeping taxes low for all Canadians including seniors. Since 2006, we have cut taxes for seniors and pensioners, and have taken many steps to ensure they keep more of their hard-earned dollars in their wallets. For example, we have introduced pension income splitting, doubled the maximum amount of income eligible for the pension income tax credit, increased the maximum GIS earnings exemption to $3,500, and increased the age limit for maturing pensions and RRSPs to 71 from 69 years of age.

Overall, our actions have resulted in delivering over $2.7 billion in annual targeted tax relief to seniors. Seniors have asked for this and they have also asked that we keep Canada's retirement income system strong. We have done exactly that.

Canada's retirement income system is recognized around the globe. It is a model that succeeds in lowering poverty for 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. These plans provide a defined benefit in retirement based on an individual's career earnings. The third pillar includes tax-assisted private savings opportunities. This includes registered pension plans and registered retirement savings plans.

The three pillars are strong, but we have taken action to make the system stronger. We passed the Pooled Registered Pension Plans Act that will provide employers, employees and the self-employed with a low-cost pension option. This will enable more workers to benefit from the lower costs that result in large, pooled pension plans.

PRPPs are a viable option that provinces can enact very quickly. It would assist the 60% of Canadians who do not have access to workplace pensions. Unfortunately, the bill we have here today, Bill C-513, would only apply to less than 10% of the pension plans in Canada.

We do not support the private member's bill. Rather than focus on ineffective proposals, I encourage the Liberal Party to support our job-creating measures. After all, the best way to ensure a healthy retirement plan for tomorrow is to have a job today.

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

Mr. Speaker, I would like to begin by saying that the NDP will be supporting the bill so that the Standing Committee on Finance can discuss the Canada pension plan. This is important and serious.

I want to immediately correct the falsehoods that have been put forward by government members.

The Conservatives began by saying that they have delivered $2 billion in tax relief for seniors. Take Nortel, for example. The file was handled with such incompetence that Nortel workers lost more then $2 billion from their pension fund. That says a lot about how poorly the pension plan was managed. That is serious.

The people of Nortel worked their whole lives and lost more than 40% or 50% of their pension funds. It happened just like that. What did the government do? Nothing. That is serious. That type of situation needs to be addressed.

Here is another major falsehood. The Conservatives indicated that this was not the time to discuss the issue of pension plans. They do not know what they are talking about. The provincial proposal and the legislation concerning the Canada pension plan show that it will take three years from the moment the government decides to improve the pension plan for the change to happen. Increases to the Canada pension plan will happen over a seven-year period. It will take a total of 10 years from start to finish. Does that mean that the government is saying that the economic slump is going to last another 10 years? Is that the government's idea of economic growth? A 10-year slump?

Perhaps the government members need to understand that there is a difference between a pension fund and a tax. They are not the same thing. If they do not know what they are talking about, it would be better for them to study up on the issues instead of reading from notes prepared by the Prime Minister's Office. If the Conservatives were to do that, they would look more successful.

It is shameful that we are faced with such an astounding situation. The people who are losing their pension funds will not have the necessary income to meet their needs when they retire. However, the Conservatives refuse to talk about it.

With regard to the bill, I would have hoped that the Liberals would be better than the Conservatives, but that is not the case. The Liberals do not know what they are talking about either. It is appalling.

We have before us a bill that seeks to protect people who want to invest in a pension plan. That sounds good. It is good to know that the Liberals want to protect investors who put money into a pension fund.

However, when we look at the bill more closely, we see that it reflects a total lack of knowledge in this area. It does not make any sense. The Liberals want flexibility, but pension plans must produce a rate of return. Such plans must give a minor, quantifiable and identifiable return so that people who draw their pensions have at least 70% of their income. Math does not give the Liberals the wiggle room that they are used to. Two plus two equals four. That is always the case. The Liberals would like two plus two to equal three sometimes because then they can slip the extra into their pockets.

I would now like to explain why the bill is not viable. Subsection 248(1) of the Income Tax Act deals with registered pension plans. To be recognized as a registered pension plan, a pension plan must include a mandatory contribution from the employer. The Conservatives are changing the registered pension plan without taking into account that key element of the act.

The employer has to make a contribution. I did not find anything in their bill that amended the Income Tax Act. Obviously, they did not see this coming, they did not catch it and they did not even understand it.

Even if I went out of my way to explain it to them, I am not sure whether they would bother making the effort to understand. This is unfortunately what most deeply affects the Canada Pension Plan issue. We keep talking about it, but nothing gets done.

The bill refers to “other” savings vehicles without defining them. However, under section 147.1 of the Income Tax Act, a deferred profit sharing plan is determined by legislation, not a definition that says “other savings vehicles”, as stipulated in clause 2 of the Liberal bill. Therefore, there is a total lack of understanding of the relationship between pension plans and the Income Tax Act. That is not really being discussed, either.

Subclause 4(1) of the bill states that the right to accumulate sufficient pension income is subject to any reasonable restrictions. What exactly is a “reasonable restriction”? This means that all legislation addressing pensions is now subject to judicial control to define what is a reasonable restriction.

We want pension plans to put money in the pockets of retirees, not legal firms. Once again, they did not get that and did not see it coming. They do not want pension plans to violate an individual's right to accumulate a pension on the basis of their religion, language or place of birth. That is nice, but the Charter of Rights and Freedoms already guarantees that.

However, what takes the cake is when they say that there should not be an age restriction, even though the pension plan is, first and foremost, an age-based restriction. For example, people often hear that they cannot retire before 30 or 35 years of service without a financial penalty. That is an age restriction.

The Liberals are saying that there should not be one. That says a lot. I do not know who wrote that or what they were smoking, but perhaps they were smoking a bit too much.

An annotation to section 146.2 of the Income Tax Act indicates that people who have RRSPs must roll their RRSPs into RRIFs at age 69. This is clearly an obligation and a penalty based on age. This text is so weak that we could talk about it for hours. However, there are a good number of really important questions here.

Are old age security, income security and the guaranteed income supplement enough to protect our seniors? That question needs to be addressed. Are people getting enough money?

Second, defined benefit pension plans are not protected by the Bankruptcy and Insolvency Act. Retirees are not considered preferred creditors. This was a major reason why the people at Nortel lost so much money. Can something be done? Can we create a group insurance plan with regard to registered pension plans? We must discuss this. CPP and QPP premiums are about 25%. Perhaps that needs to be increased to 50%, as suggested by the provinces.

In closing, this is about RRSPs. We need to limit the management fees and the rates of return.

This is why the NDP wants to be able to discuss this bill—basically so that the Standing Committee on Finance can have a closer look at these critical issues.

[Scott Andrews, Liberal, Avalon, NL]

Mr. Speaker, it is a pleasure to rise here today to speak to the bill.

To refresh us on what the bill would do, I would like to quote a few words from the member from Toronto who proposed it.

In broad strokes, the bill would create substantive, justifiable rights relating to retirement income, give every person a chance to accumulate retirement income, promote good plan administration, and set out in law that pension reform goals to which we aspire legislatively.

This bill, in a few short steps, would improve people's financial retirement.

For a lot of people, retirement takes years of planning. Those who start working in their mid-20s to mid-30s are not always thinking about retirement. Thirty years or 25 years is a long way away. A lot of factors can go into what may happen to one's retirement savings over that 30 years. We only need to look back at the last 10 years to see what happened when the markets collapsed and people's retirement savings vanished overnight, making them have to work longer. One never knows what might happen to one's retirement savings. It has taken at least the last five to six years to get back to where their savings were almost 15 years ago.

Wherever I have travelled in my riding over the last little while, the number one issue I have heard from seniors has been how they are struggling in their day-to-day operations trying to survive on the little bit of pension income they have. The cost of living is going up. The cost of a quart of milk has gone up over the last little while. This impacts many seniors. There are a lot of seniors out there who are going to the malls to get warm, which is a shame. When one gets to that age in life, one should be able to retire in dignity and with respect.

I hear it everywhere I go. A lot of seniors are finding it very hard. A lot of them will admit that they did not think of retirement planning for the last 30 years. We have to make sure that these things are there so that people have the retirement savings they need.

People refer to some of the programs we have in place now, such as the guaranteed income supplement, or GIS, the Canada pension plan, and old age security. As the member for Cape Breton—Canso mentioned, when we look at the sum of those plans, it is only in the range of $27,000 a year. With the cost of everything going up, and as people are getting older and living longer, their needs become greater. When they get to a stage where they need care and help, it is costly.

My mother is 82 years old. It is not easy living alone in a home one has lived in one's entire life. When property tax goes up by a small increment, it can really cash-strap a lot of our seniors. When they get into a home or alternate living, it is not cheap. It costs of a lot of money. A lot of people at that age are spending every nickel on it. They have no money left over to share with their grandchildren, family, and friends.

We need people to be thinking about this. We need to make sure that people are guaranteed an honourable retirement. All this bill is doing is proposing a bill of rights for retirees and seniors to make sure that they have the funds to live out retirement with dignity.

Getting back to the GIS and the CPP, one of the things I hear most, and what really gets me going, is that the government will say that it has given a little increase in the CPP. It gives this increase to the CPP; people receive it in January. They have their increase in their CPP, and it is not a whole lot, but it is a little. It is not enough to cover the cost of a carton of milk. However, by the time June comes around and they get reassessed, they are clawed back on their GIS. Therefore, they are no further ahead, at all, on any increase in the CPP. It is clawed back through their GIS.

Seniors, retirees and people in the House cannot understand why the government would claw back their GIS. It gives it on one hand and takes it away on the other. I hear it every June, without fail, from people who call our offices and complain that their GIS, their income supplement, has been decreased because they were lucky enough to get a little more on their CPP in January. It is very frustrating.

Much like where we have a number of bills of rights and charters for our veterans, we need to have this bill of rights for our seniors and for retirement.

It is a pleasure to support the bill. I know the member has been an advocate for seniors and pension plans for a number of years now. She has seen what has happened when people's retirement incomes have slipped away through no fault of their own, or through businesses that collapse and pension funds are in jeopardy. I know there were some references made to Nortel.

Bill C-513will help try to preserve that and make sure it gives seniors every tool they need to remain happy in their senior years.

I would like to close by quoting this one the member put together. Basically, it says that is she had to summarize the bill in 50 words or less, she would say it is about “choice, fairness and flexibility”. She goes on:

It is not about tearing down pensions; it is about elevating everyone to the same level. Every Canadian should have the right to a financially secure retirement and I believe this proposal sets the stage for that to become a reality.

That is what the bill is about, and it is a pleasure to support it.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Mr. Speaker, I am pleased to have the opportunity to speak to this private member's bill. I want to thank my colleague, the member for Chatham-Kent—Essex, for his comments. I will be repeating some of the very important points that he pointed out in his speech.

Like many other Canadians, I feel very strongly about being able to have a safe, secure retirement. That is one of the reasons I am particularly pleased about our government's strong economic record. As we know, a secure retirement is directly connected to a stable economy. After all, there is no retirement if there is no job. That is one of the many reasons that our government has made creating jobs, growth and long-term prosperity our top priority.

Despite obstruction attempts from the opposition across the way, we have been steadfast in our economic commitment, and Canada is benefiting. One week ago today, Statistics Canada announced that the Canadian economy grew by 2.7% in the third quarter. This is the ninth consecutive quarter of economic growth in Canada. This is especially noteworthy when we consider the delicate global economic environment in which that was achieved. While many other economies around the world are faltering, one simply cannot argue with the success of nine consecutive quarters of economic growth.

However, this is not the first economic accomplishment under our government's stewardship. Canada has created over a million net new jobs since the depths of the recession in 2009. More importantly, nearly 90% of these new jobs are full-time and over 80% are in the private sector. This is the strongest job creation record in the G7. The International Monetary Fund and the Organisation for Economic Co-operation and Development both project that Canada will have some of the strongest growth in the G7 in the years ahead. These organizations are expressing steadfast confidence in our government because they know we are steadfast in our commitment to the economic action plan.

Economic action plan 2013 is continuing to support job creation and helping our economy grow. It includes helping small business by extending the small business hiring credit; helping manufacturers with tax relief when they make new investments in machinery and equipment; and supporting persons with disabilities, aboriginal people, youth and newcomers, with new training investments to help them secure employment.

We are proud about creating a pro-growth environment while keeping taxes low. Canada continues to have the lowest overall tax rate on new—

[The Acting Speaker, Conservative, Barry Devolin]

Order, please. The hon. member for Skeena—Bulkley Valley is rising on a point of order.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, apologies to my friend across the way for interrupting his speech. It was my intention to have it otherwise, but the pressing clock requires me to rise now.

I am rising on a point of order resulting from a very disturbing event that took place this very afternoon. I will be asking for unanimous consent to table a document at the end of remarks to the House.

At 12:53 p.m. today, Conservative Senator Jean-Guy Dagenais circulated a letter to all members of Parliament, senators and their staff. The letter was addressed to the MP for Terrebonne—Blainville. The letter was offensive to the point that I rise today in the House.

Senator Dagenais was rejected by voters in the 2011 election, and then appointed by the Prime Minister to the Senate, which is unelected, unaccountable and under investigation. From atop his pedestal of legitimacy, this man used his Senate office, title and taxpayers' money to make vicious and personal attacks against the duly elected member for Terrebonne—Blainville.

The letter in question attacks the very legitimacy of a sitting member of Parliament. The attack is paternalistic, childish, condescending and frankly misogynistic.

This man is a federal legislator, but not because he was elected by voters. He holds this position simply because he was a Conservative Party of Canada crony.

The timing of this attack could not be worse. Today, of all days, the tone deafness of Senator Dagenais's actions are absolutely stupefying.

We often lament the lack of participation of young Canadians, and in particular young women, in the democratic process. We are all aware of the effort to bring those voices into our Parliament. We will be looking more closely at this matter over the weekend and I expect that you, Mr. Speaker, will be hearing about this again from us when the House resumes on Monday.

I will now ask for the unanimous consent of the House and my colleagues to table the letter that was issued by their Conservative senator just this very afternoon in the attack on the member from Terrebonne—Blainville.

[The Acting Speaker, Conservative, Barry Devolin]

Does the hon. member have unanimous consent to table the document?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Barry Devolin]

Order, please. At this point we will go back to private members' business. As there is only five minutes remaining before 2:15 p.m., the hon. member for York West can make her five minute right of reply at this point.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I thank everyone who spoke for and against my seniors' bill of rights, and in particular, my two colleagues who spoke so very well.

Both my colleagues who spoke understand the challenges of being a senior today. Because of their closeness with them, they understand when seniors say that they have to eat macaroni and cheese for several days in the last week of the month because they do not have adequate pension funds.

The work I did in my previous critic role is hence the reason I tried to establish a basic bill of rights for seniors in Canada.

I am sure there are many on this side of the House and possibly some on the government side who understand what a bill of rights sets out to do, which is to establish parameters. It does not say to put money into it anywhere, because that is not a private member's bill anyway, but it is to set down the quality of life we want our seniors to have.

In the few minutes I have, I will try to reiterate a few points. Too often it is financial illiteracy that gets people into problems. They do not understand the awful lot of red tape that is involved when one invests in a bank. It sounds like a good investment so an individual might put their money there. An awful lot of people do not take the time to understand how complicated some of that is.

Often there is a conflict of interest with the person promoting a particular investment because they get a higher management fee on it. Many people do not know these things. They do not know enough to ask those questions. They are busy trying to make the money to put away.

Every once in a while we hear about a group of people who lost their life savings in investments. Over and above issues such as Nortel and companies that go bankrupt, which is another issue altogether, people have the perception that if they put money away, it will be perfectly safe. People need to get up to date on what they need to know, the questions they need to ask and they need to become much more aware of what happens to their pension money if they are able to put any away.

Often it is inadequate opportunity and economic instability. An individual has a job, which they lose, then they draw out their savings, not thinking about what will happen 20 years later because it is today that they need that money. That instability strips away the hard-earned savings of our seniors, and that is what we are trying to stop.

Bill C-513 is the first bill of its kind ever proposed to better protect our seniors and their nest eggs. I was hopeful that all of my colleagues in the House would support that. However, I have heard the message from the government side and it does not surprise me as the Conservatives move forward to promote the things they think are best, in their viewpoint, to help those who have.

When we look at the aging demographics and the population, there will be an awful lot of people who will have to rely on the province for more than the current GIS and OAS.

The intent of part of the bill of rights is to put in parameters that would ensure that people get spoken to in plain English when they talk about retirement, so that they start to learn about financial literacy early on, understand the issues better and will not find themselves at the time of retirement with inadequate funds, if any at all, because they have used them for various reasons.

The bill is about building people up, not tearing people down. It is about helping Canadians better prepare for tomorrow. That is a responsibility we all have in the House.

We been talking about enhanced CPP. We have been talking about the Liberals' supplementary CPP. We need to get this issue on the agenda to talk about just how we would create the vehicles, the instruments, to help Canadians understand the reason they have to prepare for their retirements, and also provide the vehicles necessary for them to do that.

I thank all hon. members for their participation and for the opportunity to present the bill.

[The Acting Speaker, Conservative, Barry Devolin]

It being 2:15 p.m., the time provided for debate has expired.

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Barry Devolin]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Barry Devolin]

All those opposed will please say nay.