Bill C-26 (Historical)

An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act

Part 1 of this enactment amends the Canada Pension Plan to, among other things,
(a) increase the amount of the retirement pension, as well as the survivor’s and disability pensions and the post-retirement benefit, subject to the amount of additional contributions made and the number of years over which those contributions are made;
(b) increase the maximum level of pensionable earnings by 14% as of 2025;
(c) provide for the making of additional contributions, beginning in 2019;
(d) provide for the creation of the Additional Canada Pension Plan Account and the accounting of funds in relation to it; and
(e) include the additional contributions and increased benefits in the financial review provisions of the Act and authorize the Governor in Council to make regulations in relation to those provisions.
This Part also amends the Canada Pension Plan Investment Board Act to provide for the transfer of funds between the Investment Board and the Additional Canada Pension Plan Account and to provide for the preparation of financial statements in relation to amounts managed by the Investment Board in relation to the additional contributions and increased benefits.
Part 2 makes related amendments to the Income Tax Act to increase the Working Income Tax Benefit and to provide a deduction for additional employee contributions.

Canada Pension Plan

[The Deputy Speaker, Conservative, Bruce Stanton]

I appreciate the intervention by the member for Saanich—Gulf Islands.

The hon. member for Carleton may recall, and for the benefit of the House actually, when the name of another member appears in a citation one cannot use the name, even if in doing so you are doing it indirectly through a citation. So even in a citation we essentially rule that out of order.

The member will then, I am sure, substitute and use the appropriate name, either the title, or the member's riding name.

The hon. member for Carleton.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, sorry, I am new here.

The quote states:

Even [the finance minister], before he was a politician and still worked at the human resources firm that bears his family’s name, co-authored a book with Vettese that repudiated “fear-mongering media stories” and “overblown” worries that Canadians were under-saving.

Now, he’ll force Canadians to save more for their retirement whether they want to or not, or whether they need to or not. Eventual changes to benefits from 25 per cent of covered earnings to a third, and a heightened ceiling on covered earnings from what would have been $72,500 in 2025 to $82,700, will result in some Canadian workers paying as much as 40 per cent more in CPP contributions by that date—up to an additional $2,200 a year deducted from their take-home pay, according to Finance Canada’s backgrounder.

The finance minister opposed precisely what he is now implementing and enforcing on Canadians.

At the end of the day, if Canadians want to contribute more to a large, diversified savings fund, there are hundreds of options available to these millions of Canadians. We as government should not impose our will upon them and their retirement savings plans. That is why we on the Conservative side instead favour voluntary options, low-tax plans, rather than high-tax schemes, to free people to make the best choices for their lives and their futures.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Prime Minister (Intergovernmental Affairs)]

Mr. Speaker, I listened with great interest to my colleague, who has a new job title. The first two letters are J and O. I would suggest he add some more components to his job title, with kids excepted and seniors with nothing. In other words, the joke is on him.

That was not the best joke in the House today. Handwriting is not my long suit.

I keep hearing the other side talk about the 17% who do not. They say that a job is the best social program. Is the member really suggesting that kids go out and get a job if they need daycare? Is he really suggesting that seniors go back to work if they do not have the funds to retire? Is the job really the best social program for everyone, or are there some people who need support? If that support is needed, should that support not lift them out of poverty rather than keep them there?

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, first of all, kids do not make contributions to CPP. I am not sure if that is something the hon. member proposes, nor do people who are out of work make contributions to CPP. If he is saying that this is a solution for long-term unemployed Canadians, he should check the rules of CPP, because those Canadians cannot contribute in the first place and therefore they accumulate no benefit under the existing system or any future one the government may propose.

Nothing in the member's proposal would expand retirement benefits for unemployed Canadians. Nothing. Let us just be clear on that.

My comments were that yes, I believe that the best anti-poverty program is a good job and the best social safety net is a strong family and a strong community.

As it relates to child care, we on this side believe that families are best able to make their own child care decisions. That is a debate we had long ago when we were discussing whether to have a daycare program or give direct benefits to parents. That is a debate the Conservative Party won, because the Liberal Party has now adopted our position on that with this new child benefit.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, poverty in Canada costs us between $72 billion and $84 billion a year in increased health care costs and an increased need to take care of those who are the most vulnerable. As elected officials, it is our job to look out for the most marginal, to try to reduce costs, and to look at a harm reduction strategy that will save taxpayers money.

When we look at the statistics the Conservative Party talks about when they talk about people living in poverty, they say that it is between 3% and 4%. When I look at statistics for seniors, 15% of single seniors are living in poverty, and 30% of single senior women are living in poverty. When we look at the most recent figures and talk about the 30% of single women living in poverty, that number has tripled in the last 20 years.

What plan does my colleague's party have to help lift the most vulnerable elderly women out of poverty? This is not just life circumstance. There is a lot of life circumstances for 30% of single elderly women to be living in poverty.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, one person living in poverty is one person too many, and we here should produce policies that free people to pursue opportunity and escape the terrible state that is an impoverished life. That is why I am so proud of the progress we have made in this area. Back in 1996, 15% of Canadians lived below the low income cut-off line. In the most recent year on record, 2014, that number dropped to 8.8%. That is a spectacular decline, and most of it, by the way, happened under the leadership of Prime Minister Harper.

The reason it happened is that we rewarded hard work, particularly by cutting taxes for low-income people who were entering the labour force. We brought in about $35 billion a year in tax relief, which the parliamentary budget officer said was overwhelmingly directed at low- and modest-income people. We brought in the working income tax credit, a benefit that helped people get over the welfare wall. We raised the personal exemption to take hundreds of thousands of people off the tax rolls. There were people who literally had their federal income tax burden lowered by 100% under the previous Conservative government. We need to continue to lower taxes and create opportunities to make work pay and give people expanded opportunities so that we can defeat poverty once and for all.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I would like my colleague to tell us what he thinks will be the impact of this new tax on businesses, especially small businesses. I will say once more that I am a business person. I know that it is going to have a serious impact on me and, unfortunately, I have no say in it.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, for one thing, these changes will not benefit businesses. They will have to contribute more, but CEOs, company owners, and entrepreneurs will not be able to collect more in retirement. For businesses, there is no upside to the contribution.

Unfortunately, this measure will force some companies to implement hiring freezes, pay cuts, or, in worst-case scenarios, layoffs. That is what will happen. Businesses do not get money for nothing. They have to earn it by working.

Also, there is only so much money to go around. If the government imposes another tax, that will reduce the amount of money available to pay wages and hire Canadians. That will be the fallout of this tax hike.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, it was not that long ago that Canadians found out that the age at which we could retire and qualify for CPP had been changed unilaterally by a prime minister speaking to us from a great height in Davos.

I am looking forward to seeing improvements to the CPP, but I know they are not enough.

I have one of the ridings with the highest proportion of seniors of any riding in this country. I hear from my constituents that they do, on a daily basis, make choices on whether they can afford their medications, which they do, particularly for ailing partners. Quite commonly, elderly Canadians are spouses of elderly Canadians with inadequate care for dementia. At the same time, I have many constituents who know that even though their partner served in the Canadian Armed Forces, because they remarried after the age of 60, they will get no pension.

There are real concerns in the lives of seniors. I think this is one opportunity to improve that circumstance.

I would ask the hon. member why his government did not do more to address these issues.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, as I just finished saying, our government did plenty. We saw a record decline in poverty, including seniors' poverty, during the leadership of our prime minister. In fact, it was the biggest decline, on record, of any prime minister. There was a bigger decline in poverty under Stephen Harper than there had been under the previous seven prime ministers combined.

My question is why she does not do more. She has been a great advocate of these schemes that take money from poor, low-income seniors and give it to wealthy insiders, like the Green Energy Act in Ontario, which the Auditor General of that province said took $47 billion in overpayments to well-connected, multi-millionaire insiders, including one who is a former president of the Liberal Party, and that drove up electricity costs, particularly hammering the poor and seniors on fixed incomes.

I have literally had people come into my office saying, “I have no idea how I'm going to pay my energy bill, because my electricity bill keeps skyrocketing and my income does not”.

Those kinds of policies, which have favoured the rich, have favoured the well-connected, and have favoured the insiders, have come from people like that member for the Green Party, who has supported them. It is outright hypocrisy that they continue to stand in their places and claim that they are so concerned about the well-being of the poor, when they are robbing low-income families blind to give to the most well-connected and undeserving millionaires in Canada.

[The Deputy Speaker, Conservative, Bruce Stanton]

Is the hon. member for Saanich—Gulf Islands rising on a point of order?

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

I rise on a question of privilege.

I cannot help it if other levels of government use the word “green”. We can check, but the Green Party of Ontario did not support those policies, and I personally—

[The Deputy Speaker, Conservative, Bruce Stanton]

I take the hon. member's intervention. However, it is not a question of privilege. It is probably a matter of debate. From time to time the member will have the opportunity to weigh in on those points.

Before we resume debate, I wish to inform the House that five hours have passed since the beginning of the first round of speeches on this matter. As a result, speeches will now be limited to 10 minutes and questions and comments to five minutes.

Resuming debate. The hon. member for Central Okanagan—Similkameen—Nicola.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, I am pleased to contribute to the debate today on Bill C-26, often referred to as “big CPP” by the many Canadian small business owners who abhor yet another payroll tax being imposed on them by the Liberal government. As a former small business owner, I can speak firsthand of the many reasons I strongly oppose this legislation.

Let us be honest that no matter how we slice or dice it, this legislation would increase the cost to an employer of hiring a worker. It would also increase the cost to employers of the workers they already employ. Let us also be honest and recognize that job numbers coming from Statistics Canada are not encouraging. Likewise, we know that projections from the Bank of Canada are being lowered for economic growth at the same time the Liberal government is imposing a top-down national carbon tax that will drive costs up on employers and small business owners alike. Likewise, we know that the Liberal government has also reneged on its promised small business tax cut.

Let me recap. In a relatively short period of time, small business owners in Canada have had the costs of their existing workers increased by the Liberal government. The government has also increased the cost of hiring new workers. It will be increasing their operating expenses as a result of a national carbon tax, and it has not followed through on its commitment to business tax cuts. It has done all of this at the same time that job numbers are looking bleak and our economic growth is being downgraded.

This may sound like a bleak picture, but the reality is that everything I have just stated is factually accurate and true. It is no wonder that investment has also declined. It is also no wonder that the Canadian Federation of Independent Business strongly opposes this additional payroll tax. It is no wonder that close to 20,000 of the federation's supporters signed a petition opposing these Liberal-imposed increase in costs in general. We must keep in mind that many Canadian small business owners now compete with other small business owners in the United States, where there is no national carbon tax and where the government is not drastically increasing the costs of small business owners.

The Prime Minister looks down on small business owners. He has stated directly that “a large percentage of small businesses are actually just ways for wealthier Canadians to save on their taxes”. As a former small business owner, I can tell the House that this comment by the Prime Minister is, to put it into parliamentary terms, a foul smelling, crusty batch of nature.

The reality is that small business owners are not wealthy Liberal elites and, by and large, these people do not pay $1,500 a plate for private access to the finance minister. The fact is that many small business owners from time to time struggle just to meet their payroll, and some even work a second job. Typically, they do not have the luxurious benefits of the public sector. I mention this final point because we should never forget that it is from the private sector that we take so that we can afford to have the public sector. An expanded CPP would take money out of the private sector.

I just heard an argument that this money would ultimately return to the economy when workers retire. However, let us not overlook the fact that not everyone lives to age 65. For them, their families, and their estates, an expanded CPP would do very little. Likewise, even for those who only live a few years beyond 65, that transportability of CPP to loved ones, kids as an example, would basically be negligible. People could pay these hugely increased costs their entire working career and potentially get very little to no benefit from them whatsoever.

However, that is okay for the big CPP pension board, because the cost to administer CPP has basically gone through the roof. As the national columnist Andrew Coyne has recently pointed out, staffing has increased at the CPP Investment Board from five in 1999 to around 1,200 today. Likewise, operating costs have gone from $3 million in 2000 to $803 million in 2015. External management fees have risen from $36 million in 2006 to $1.25 billion in 2015. These are just a few alarming indicators.

To be clear, I am not being partisan about this. These things have happened under both Liberal and Conservative governments alike. However, under a Liberal government obsessed with consultations and reviews, it is curious that this big CPP is being imposed on Canadians with zero consultation with groups like the Canadian Federation of Independent Business, and no review as to how administration and expenses are rising so dramatically for the CPP.

Of course, we have heard the finance minister and the Prime Minister tell us that Canadians are not saving enough for their retirement, which is why they believe having the government do it for them through this big CPP is the answer. When the Liberal government reversed the $10,000 annual maximum contribution to the tax-free savings account, it did so arguing that down the road they were worried Canadians were in fact saving too much.

Now here is the thing with the tax-free savings account. Unlike the CPP, with the tax-free savings accounts, those funds, lifetime savings I might add, are fully transportable. This means that one's kids, spouse, and family all benefit from one's lifetime of savings instead of having that money sucked into the growing administration a of big Canada pension plan. To be clear, a tax-free savings account did not penalize employers who are job creators. Therefore, in reality, we have a Liberal government that one day says it is worried Canadians are saving too much so we better cut back that tax-free savings account, and then a few days later it says that Canadians are not saving enough so we better bring in big CPP.

It is not unlike what the current government has recently done with new mortgage qualification rules. People in Summerland and West Kelowna, in my riding, have phoned me and emailed me and said that this makes home ownership a goal that has been stretched down the line. This is a sad thing, because people work hard. They want to succeed in life, and home ownership is one of the ways we can do that.

Let me be clear. A home is how one can build equity for retirement. If anything, the government should be focused on measures that increase the supply of housing to help increase affordability. More home owners mean more equity for those home owners down the road, and less need for an expensive payroll tax like big CPP.

One final point I would like to raise, going back to the government's argument that people are not saving enough and thus let us impose big CPP to do it for them, is whether it has ever occurred to the Liberals to ask why people are struggling to save. Well, I have an answer, and for a growing number of Canadians, the answer is too much taxation. Governments, at all levels, continue to add more and more taxation, leaving less take-home pay.

In the irony of ironies, the tax-free savings account which, let us not forget, is entirely funded by our net after-tax pay, has now been reduced by the Liberals. It is like the current Liberal government and the Prime Minister have created what I believe is a war on equity. At the same time, let us not forget that it is the same Liberal government that is adding massive amounts of new debt.

Yes, I know the finance minister loves to the use the term “investing”, but regardless of how we wordsmith it, that investing that has created this massive pile of new Liberal debt will down the road have to be paid. Each month we pay interest on our debt. In fact, the amount of the federal government interest on the debt we pay right now is close to what the Canada health transfer is to the provinces. While provinces all squabble for more health care transfers, we can all collectively look the other way, but that interest on debt is rising at alarming levels.

Therefore, down the road, we are going to see a problem, collectively. Either we are going to see more increases in taxes, reduced government services, or possibly a combination of both. That is maybe the real reason that the Liberal government supports big CPP, so that our future retired Canadians will have more capacity to absorb inevitable increased taxation as a result of today's Liberal debt being added to at near record levels.

The bottom line is that I would like to ask all members in this place a simple question. Where exactly will small business owners get the money to pay for these dramatic increases in labour costs?

The reality is that for small business to stay in business, we all know that income has to exceed expenses. In a small business, one's income comes from one's customers. When one's costs rise without a corresponding increase in sales, one goes out of business. That is the message that the government is sending to small business owners across this great country.

I would ask all members in the House to listen to the objections of the CFIB and oppose this damaging measure that would harm employment. Those who are unemployed do not contribute to CPP because they draw down from EI and other government-funded programs. Now is not the time to be expanding big CPP, and that is why I strongly oppose the bill.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Speaker, I have a simple question. The member referred to housing as a very good source of investment for retirement, and he is not wrong. However, in Quebec, homes are owned by about 60% of the population, so 40% do not have that asset. To cash out on that asset, they have to cash out of the house, which means that they are either remortgaging it or selling it so that they then have nowhere to live but have a wonderful pile of money. TFSAs and RRSPs can only be contributed to if people have extra money to do so.

My question for the member is pretty simple. Does he believe the government has a role in helping people who do not have the money to invest themselves?