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

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Madam Speaker, I will make my answer very short. The member asked this question earlier in terms of the seniors he spoke to when he went door to door. The long phase-in period of Bill C-26 will do nothing to support those very people he was talking to today. Nobody will benefit from this for 40 years.

I am not sure why he is making the connection between Bill C-26 and the things he was hearing from seniors on the doorsteps today.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Madam Speaker, I am pleased to participate in this debate on the amendment to Bill C-26.

I had the opportunity to speak on Bill C-26 at second reading and will readily admit that my position on this ill-conceived bill has not changed. In fact, after spending a week in my riding, I am more convinced than ever that the bill needs to be scrapped.

I had the privilege of meeting with many constituents and holding a series of round tables with members from the chambers of commerce from the communities of Rosetown, Martensville, Warman, and Humboldt, just to name a few. Without fail, everyone spoke to what the impact of the CPP premiums increase would be on their businesses. Their responses were unanimous: this tax hike would hurt their businesses both indirectly and directly. Every single attendee said that they will have to consider this payroll increase when they budget for staffing next year, and that overall employee compensation will be affected.

Since the bill was introduced, I have been hearing a lot of conceptually wrong statements and value judgements from the members on the other side.

For starters, Bill C-26 would not create new money for today's retirees or for low-income Canadians nearing retirement. The bill would increase CPP premiums from 9.9% to 12% and would increase the benefits that people receive once they retire by the amount of the increase.

The increases in benefits are only made possible due to the increased contributions that workers and their employers are being forced to make today. The CPP is a contribution program. The benefits received once a contributor retires are equal to what they contributed to the program plus whatever investment returns the CPP investment fund realized.

The CPP is not an income redistribution program. It was never designed to be. It does not support low-income seniors. Quite simply, what one puts in is what one hopefully will get out plus interest. This is why retired Canadians or folks who are nearing retirement will see no change to the benefits they can expect to receive.

The Liberals claim they are raising the CPP premium because my children's generation is not saving enough for their retirement. Undoubtedly, there are some Canadians who are not saving enough, but this is not a universal problem. This CPP increase would end up costing an individual more than if the Liberals increased the sales tax from 5% to 7%, which, given the fact that Canada is in the midst of the largest year-over-year peacetime increase in federal government spending, is becoming more and more likely.

When the CPP was first created in 1965, the contribution rate was set at 3.6%. Over time, governments have increased this rate by three and a half times to the 12% being proposed by the current government.

Because CPP contributions are made as a percentage of income up to a maximum each year, there is no need to increase contribution levels to account for inflation. The CPP Investment Board returns are sufficient to ensure that the fund grows at a faster rate than inflation. The chief actuary reviews the solvency of the CPP fund every three years, and the last report indicated that the program was fully funded for the next 75 years. Therefore, this increase in the contribution rate is not being done to ensure the fiscal health of the plan.

Of course, Canadians deserve to retire with the peace of mind that their retirement is fully funded, but that does not give the government free rein to collect a growing part of every Canadian's income. The CPP was never designed to be the only pillar of retirement. It was designed to be one of many.

Also, young Canadians are faced with many expenses, like their first home, first car, and starting a family. Should retirement income be considered more important than having 2% more of one's after-tax income to pay for today's necessities? It is absolutely reasonable for many young families to want to keep more of their income at a time when their living expenses are at their highest.

With this proposed CPP tax hike, the current Liberal government actually would be discouraging young people from saving by taking the small amount that they might have been able to put into a TFSA or an RRSP and taxing it away. We have heard the Liberals say that because of the child care benefit, they now have carte blanche to increase the taxes of families. However, it makes no sense to give some money back to families and then tax it again. All that ends up happening is the government forcefully becoming more involved in the day-to-day lives of Canadians.

I believe the CPP is important, but how much further can the contribution rate really be increased? What if, according to the government, in the future Canadians are still not putting enough aside to maintain their standard of living? How much more should contribution rates be increased? Will we see an increase to 14%, to 16%, or maybe even to 18%? What is the limit? I am confident that Lester B. Pearson never envisioned that the combined contribution rates for the CPP would grow to 12% and that government would seek to take over retirement planning for Canadians, but that is the road the Prime Minister and his finance minister are taking Canadians down.

Beyond the basic problem that this would be a tax hike when businesses and employees can least afford it, it would also contribute to an endless feedback loop. The more that government gets involved in managing retirements, the less people will feel the need to save for their own retirement; and then government will once again feel the need to get involved in forcing Canadians to save more, and on it goes.

For my colleagues on the other side, here is another reason to consider this as a tax hike. If contributors die before they are eligible to claim CPP benefits, the benefits that were accrued would not flow to their partner or their dependants. Unlike other retirement-saving options, CPP contributions are not money that contributors or their beneficiaries will necessarily get back.

In conclusion, on this side of the House we trust Canadians with the money they have earned. We believe they should keep their hard-earned money and make the decisions on how to save and invest for their future, not the government. That is why I will be voting in support of this amendment.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Madam Speaker, the bill deals with an expansion of the CPP for Canadians. This has been a long discussion. It was discussed at the provincial level. Our previous government suggested other alternatives. Then, when this government came in, it has been treating it as a primary piece of legislation.

It really comes down to a debate between ideologies. It is between those who think the government should be managing Canadians and taxpayers' money and should have the capacity to force Canadians into limited options when it comes to their retirement, or those who believe people should have the choice as to how they wish to invest their retirement income and should be able to manage their own money. Of course, on this side of the House, we believe that Canadians have enough of a sense of responsibility to manage their money. The Conservatives have taken the position over the years that we believe people have the ability to do that, and we have walked the walk. We walked the walk in both our tax policies and our positions on pension reform as well.

I am going to go through a few of the things we did when we were in government in terms of tax benefits, just to point out that we have been consistent. We increased the amount that Canadians can earn tax free. We believe that Canadians should be able to keep their money. They should be able to make choices about how they want to spend it. Consistent with that, we cut the lowest personal income tax rate to 15%, giving low-income Canadians in particular an opportunity to be tax free. We cut the GST from 7% to 5%. That tax cut had an impact on everyone across the country.

My colleague from Saanich—Gulf Islands was just asking about seniors and whether they spend their money locally. We believe they do spend their money locally, but certainly the tax cuts that our government provided Canadians across the board made it more possible for seniors to live out their lives keeping more of their own money. We did things for families, including creating and enhancing the monthly universal child care benefit.

There is a whole other area of improvements we made for pensioners and seniors as well. We did things like improve the rules for the registered retirement income funds to allow seniors to change the way they were moving their money from those investment funds. We increased the age credit amount by $2,000, and doubled the $2,000 maximum amount of income eligible for the pension income credit. We introduced pension income splitting, which was a big deal for pensioners across the country. When we talked to Canadians about this, they were very thankful for it and wanted us to extend it to others as well, which we were doing. This government has decided that is not important.

Probably the single most important thing we introduced was the tax-free savings account. It was interesting how quickly Canadians took to them. In fact, these were introduced in 2009-10, and by 2013, nearly 11 million individuals in Canada had a TFSA, and the total value of the assets held in them at that time was nearly $20 billion. That is a pretty significant initiative. It is one Canadians obviously welcomed. They were willing to put their money into it. Everywhere I went, people were very happy with that. It was individuals with annual incomes of less than $80,000 who accounted for more that 80% of those accounts, and three-quarters of those assets, by 2013. In spite of what the other parties have said about the TFSAs, these are is not just for wealthy people. There were a lot of lower-income people with them too. A lot of seniors, actually, were maxing out their TFSAs because they believed it was a very good retirement vehicle for them. By the end of 2013, about two million people had contributed the maximum amount to their TFSAs and 46% of those individuals were seniors. It is really interesting to look at the reality of TFSAs compared to the illusion the other parties were trying to create about them. Over 70% of those folks who had maxed out their TFSAs were over 55.

Therefore, if we are here to talk about seniors and protecting seniors, that was a real way of doing it, and it was something that was going to be done in real time. The changes we are talking about today with what the Liberals are proposing are not going to impact folks who are middle-aged or seniors now. It is going to take decades for this supposed benefit the Liberals are bringing in to really impact the people who would take advantage of these extra CPP benefits.

There are a number of other things I mentioned. We did pension income splitting. We raised the pension income credit for older people as well. We raised the guaranteed income supplement so that pensioners could make up to $3,500 from that, and the change to the age limit on RRSP to RRIF conversions was an important thing.

That brings us today to Bill C-26, an omnibus piece of legislation that is going to implement an agreement reached on June 20, 2016, between the provinces and the federal government. As noted before, Quebec does not participate directly in this, but it has its own plan. As a result of this legislation, CPP premiums are going to rise for workers and employers, by up to $2,200 per worker, which would be split between workers and employers. Obviously, that will have an impact on employers' capacity to hire workers.

The tax hike would take at least $100 a month directly from the paycheques of hard-working Canadians, an amount that will probably increase as time goes on. It puts thousands of jobs at risk. We have also had discussions on the planned increases in minimum wages in the provinces, which threaten low-income jobs, and this is one more threat that employers will have to deal with in trying to hire and keep people at work. Certainly this is not the time in Canada when we should deliberately be putting jobs at risk. It is not a strong, stable economy that we are dealing with right now. It certainly is not the economy we had two years ago. It is unfortunate, because it seems that every choice the government is making puts Canadians and their jobs more and more at risk.

If households are going to have to pay up to $2,200 per year out of their salaries, it means that students in post-secondary education are going to have a much more difficult time to pay off their student loans. Families will face a challenge even on things like vacations. They will have a harder time funding post-secondary education as well. Certainly it will be harder for companies to create jobs and give workers raises. It is interesting that 70% of small and medium-sized enterprises see this as having a significant impact on their business. People are paying attention to it and understand that it will have an impact on them.

Furthermore, 90% of small business owners say they would certainly like to be consulted more by the government. They do not feel like they have had a chance to have their say. They do not feel like they have been listened to. It seems to be a topic I am hearing across the country, that the government is not capable of listening to people in spite of the multi-million consultations it seems to be having. It does not seem like it is talking to the average Canadian, because they do not feel like they are being heard. This is one more issue in which this shows its face.

As I mentioned earlier, this is going to take 40 years to be fully implemented, so none of the new benefits will go to people who are presently seniors. In our questions and answers, we have heard questions focused on present day seniors, whether they have low or medium incomes, but the reality is that these changes in Bill C-26 have nothing to do with people who are seniors right now because they will not experience any of these benefits. As I pointed out, that is quite in contrast to the tax-free savings accounts and the fact that people were able to manage their own money. They could put it into those vehicles and invest as they choose, and then benefit from that.

We believe that our system has been the envy of people around the world. One of the reasons people have been envious of it is that there has been some choice within the system. We believe on this side of the House that it does not hurt Canadians to have more choice, and that because they are saving more for retirement than they have ever done before, it is necessary for them to have those choices.

I am sorry to see that my time is winding up, but we are concerned that the bill the Liberals have introduced and are pushing through will reduce employment, impact GDP, and reduce business investment, and reduce the disposable income of Canadians. Over the long run, it is predicted that the bill would reduce private savings by up to 7%. It is unfortunate that more money is going to be taken from the pockets of Canadian workers. That affects them directly. It will put jobs in jeopardy and it will do nothing to impact today's seniors because it will take 40 years for it to be fully implemented.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Speaker, I would like to tell a story today, a tale from history, which may be somewhat unfamiliar to those on the other side of the aisle, but I assure them that it is true.

Once upon a time, there was a country with a pioneer spirit. It grew from a small settlement in the Maritimes and the banks of the St. Lawrence and expanded until it stretched from sea to sea to sea. It was filled with proud people, immigrants and first nations, who believed that there was no limit to what they could accomplish. They valued hard work and what they could achieve when they set their minds to it and worked together. They built a great nation, one that was to become the envy of the world.

This nation was built not only on hard work but on a common set of values. The people knew that one of the keys to success was planning for the future. They were careful with their money, saving a portion of their income for a rainy day and their retirement. They knew that they might at some point face adversity and need to use that rainy-day fund. They wanted at some point to be able to retire and enjoy well-earned retirement. Therefore, they put aside what they would need to deal with emergencies and a stable future.

When they did this, they were showing personal responsibility, knowing that they could not and should not depend on someone else to make such financial decisions for them. The people who made Canada great understood that they controlled their own destinies. They passed these values of common sense and thrift on from one generation to the next. They did not look to government to do what they should do for themselves. They knew that the individual is the person best suited to decide how to prepare for his or her own retirement, which is part of personal responsibility.

It seems that, somewhere along the way, the idea of personal responsibility, that core Canadian value, has been lost by some in this country. There is a group of Canadians—let us call them Liberals—who feel that individuals cannot be trusted to do what is in their own best interests. These so-called Liberals feel that it is their responsibility—indeed, their right—to dictate to others when and how they save for their future.

That is a true story we face with the bill before us. With this ill-considered attempt to raise premiums for the Canada pension plan, the current Liberal government distrusts the ability of the Canadian people to plan for their own retirement. There is no other reason for this ill-conceived tax hike, which members opposite like to pretend is not a tax on Canadians.

They tell us that, over the next 40 years, CPP retirement benefits would rise from an income-replacement rate of 25% to 33% of employment earnings. To finance these benefits, the government would hike the CPP premium from 9.9% to 11.9%, which is about a 20% increase, starting in 2019. In addition, the yearly maximum pensionable earnings would rise to $82,700 in 2025. Earnings between the current and future yearly maximum would be subject to an 8% premium. As a result, CPP premiums would rise by up to $2,200 per year per worker split between the employer and the employee.

I have met with business owners in my riding on many occasions since this plan was first introduced. Just last week, I was told that they were unanimous in their opposition to this plan. They feel that it is like the Liberal carbon tax; it would limit their ability to make a living as the government piles tax upon tax.

This CPP tax hike would take money from the paycheques of hard-working Canadians, putting thousands of jobs at risk, and yet it would do nothing to help the seniors who need it. If the government feels that there is a problem for seniors today not having sufficient retirement funds, why is it bringing in legislation supposedly helping the future generation 40 years from now? Where is the help for Canadian seniors today?

Figures show that some households would be paying up to $2,200 more per year if this ill-planned scheme is implemented. This means that it would be harder for new graduates to pay off their student loans or buy their first home.

It would be harder for families to save for vacations or their children's post-secondary education and harder for companies to create jobs and give workers raises. Make no mistake about it; not only would Canadian workers take home less in their paycheques, but Canadian businesses would also be taxed under this plan. If they have to give more money to the government, that means less that can be passed along to their employees.

Canada's retirement system is already the envy of the world. Poverty among seniors has dropped significantly in recent years, and Canadians are saving more for retirement today than ever before. Conservatives believe in reasonable, evidence-based policies to help Canadians retire with dignity, which is why the previous government expanded the guaranteed income supplement.

The Liberals clearly agree with this approach, since they increased the GIS by 10% in their first budget, but that is different from this plan to force people to save by having the government take more money from their paycheques. It shows a Liberal lack of trust in the ability of Canadians to manage their own money responsibly. Liberals always believe that they can do it better, that Canadian citizens cannot be trusted to handle their own finances. By contrast, the previous government helped Canadians save through the tax-free savings accounts and opportunities to make voluntary contributions to the CPP.

Conservatives believe Canadians should be able to manage their own money, and given the track record of the Liberal government, we believe Canadians cannot trust the Liberal government with their pensions. After all, they have not been able to keep the promises they made less than a year ago, let alone a decade from now, and who knows what their excuses will be in 40 years?

Finance Canada's analysis shows that higher CPP premiums would hurt the economy. They would reduce employment, the GDP, business investment, disposable income, and private savings. The Liberal government, when faced with that information, wants us to trust it and believe that what it is doing is for our own good. Liberal members do not seem to understand why we do not believe them.

According to the Canadian Federation of Independent Business, 70% of small business owners disagree with the Liberal notion that the proposed CPP increase is modest and would have a limited impact on their businesses. They know it is going to hurt. A paper released by the C.D. Howe Institute shows that the Liberals' CPP plan would not benefit low-income workers. They would see their premiums go up, but their net increase in retirement benefits would remain low since higher CPP payments would be offset by clawbacks in GIS benefits.

Bill C-26 would take money from the pockets of hard-working Canadians, who are being given no choice in the matter. The benefits of this tax hike, Liberals tell us, would happen at some point in the far future. If that means less money in Canadians' pockets and fewer jobs because business taxes are too high, I guess they expect us to thank them for that, too.

I have said it before, but it bears repeating. If the government were truly serious about helping Canadians save for retirement, it would reinstate the TFSA contribution levels set by the Conservative government, treat Canadians like adults, and let them choose how to save their money. Instead, we are told that Liberals know best. History has already shown us that is not true.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Madam Speaker, I am pleased to speak to Bill C-26 this afternoon, as there is no question that the suggested changes to the CPP will have a significant impact on Canadians and our economy.

I have heard a repeating mantra from the government that people are struggling to save, yet Canadians' retirement system is one of the most envied in the world. Poverty among seniors has dropped significantly in recent years, and Canadians are saving more for retirement today than ever before. I agree that all Canadians should be able to retire with dignity: those now retired, those soon to retire, and young Canadians who are just beginning their journey in the workforce who will, before they know it, be where our seniors are today.

Despite these facts, there are definitely many seniors currently living in poverty and many working poor Canadians who are struggling to make ends meet. These are the individuals government should be focusing on. Our government should be implementing ways to help these individuals help themselves and should provide assistance when circumstances are such that retirement is difficult and the basic needs of life are out of reach.

The previous government expanded the guaranteed income supplement, and the current government did the same, increasing it by 10% in its first budget, which was a very good decision that I applaud.

When it comes to CPP contributions, I believe that the approach in Bill C-26 would cause more harm than good. Why? It is because it is not specific, when is could be, and so it would impact Canadians who have their savings plans already established and growing and would negatively impact Canadian businesses that actually fuel the economic growth our entrepreneurs, tradespeople, professionals, and labourers need to be successful.

We should be targeting voluntary additional individual contributions to CPP and not mandating that all Canadians participate further in a program that is complementary to the savings they choose to make as individuals. Canadians should be able to manage their own money. If they want to make additional individual contributions to the CPP, that could be done. As a small business owner, I know that it would be an easy move to add a request on a TD1 indicating how much more an employee would like attributed to his or her CPP contributions above and beyond the minimum. They could also use TFSAs, RRSPs, employer pensions, and other means of providing for their own retirement.

Small business owners are being penalized when they are forced to contribute more to CPP rather than being able to invest those funds in their businesses or other means of fund growth. Instead of stimulating the economy, they are being forced to contribute to a government program that takes away their right to manage their own investment of that income.

As well, we know that the CPP is unfair to single and divorced individuals. A constituent in my riding, who has been a certified financial planner for 20 years, indicated to me that 15% to 20% of his clients fit this category. When they pass away, their estate receives a CPP death benefit of only $2,500, because they have no spouse to receive the survivor benefit, yet they have faithfully made their CPP contributions over the years, and in the case of the self-employed, have made double contributions, which could have amounted to over $100,000 in the past, and in the future to perhaps well over $200,000.

Why would anyone wish to pay into a program that may never benefit them or their estate? This is unfair and is a form of discrimination. If I personally came up with a new pension plan today that asked clients to contribute $2,500 to $5,000 per year over their lifetimes, with the only guarantee on death, before drawing CPP, being $2,500, I am quite certain that the authorities would call such a plan criminal in nature.

Another concern is that the offsetting tax credit the Liberals are suggesting to balance the additional monthly contributions for the working poor would only apply to a maximum annual income of approximately $28,000 a year. For an individual, let alone a family living on a monthly income of $2,400 a month before deductions, an increased CPP contribution will be a hardship they cannot afford.

In 2013, the total household net worth of Canadians was $7.7 trillion, split almost equally between pension assets, real estate equity, and other assets. According to a study by McKinsey & Company, 83% of Canadian households are on track to maintain their current living standards in retirement. According to Statistics Canada, the share of Canadian seniors living on low incomes has dropped from 29% in 1970 to 3.7% today, which is among the lowest in the world.

According to Finance Canada's analysis, higher CPP premiums will reduce employment, reduce GDP, reduce business investment, reduce disposable income, and reduce private savings by 7%.

A paper released by the C.D. Howe Institute shows that the Liberals' CPP plan would not benefit low-income workers. Their premiums would go up, but their net increase in retirement benefits would remain low, since higher CPP payments would be offset by the clawback of GIS benefits.

Seventy per cent of employed Canadians oppose a CPP expansion if it means a wage freeze. Fewer than 20% of Canadians say they would opt to put more of their savings into the CPP, according to a survey by the CFIB.

Clearly, low-income workers and the working poor should be the focus of this government's argument that people are struggling to save. It should help those working hard to join the middle class through a voluntary CPP program instead of having an all-encompassing program that benefits the well employed, who already have strong retirement pensions and plans in which CPP payments are an added bonus.

I now quote Fred Vettese, chief actuary at Morneau Sheppell and co-author with the Minister of Finance of The Real Retirement. This appeared in the Financial Post on June 5, 2016. He said:

Whatever the reason might be to expand the CPP, it is not to eliminate poverty. The poverty rate among seniors is now as close to zero as we can get. Yes, a little over five per cent of seniors today still have income below the poverty line

Charles Lammam and Hugh Macintyre, of the Fraser Institute, stated, in the Financial Post, on June 2, 2016:

Instead of expending political energy on debating CPP expansion in the misguided belief that many middle- and upper-income Canadians are not saving enough for retirement, the focus of public debate should be on how best to help financially vulnerable seniors.

Yves-Thomas Dorval, CEO of CPQ, said that he was worried about the new direction of the Canada Pension Plan and the impact on the Canadian economy. He said that if we want to encourage saving for retirement, a universal solution doesn't work. On the contrary, it is likely to have a negative impact on economic activity, jobs, and wages.

What impacts Canadians' ability to save is a slow economy, a loss of confidence in our economy, a loss of jobs, a loss of incentives, and increased taxes, all of which have a huge impact on the ability of young families to save.

I received a call from Brian, a constituent in my riding, who was emotional and distraught as he told me that the impact of an increase in CPP premiums, coupled with a carbon tax on everything, means that his wife will no longer be able to remain a stay-at-home mom, the way she wants to be, with their two small children. He was overwhelmed by the thought of his wife having no choice but to go to work, which will also increase their monthly costs, with child care, another vehicle, and all the additional expenses of a secondary income for their family.

The government is calling on Canadians to contribute more to the CPP, saying that Canadians do not know how to save enough, yet the Prime Minister has blown his modest deficit promise, borrowing three times more than he ever said he would. The Prime Minister has broken his promise to cut taxes for small businesses. The Prime Minister has broken his promise to make his tax plan revenue neutral. The Prime Minister has made children's sports, arts classes, students' textbooks, and tools for tradespeople more expensive. The Prime Minister has taken away the universal child care benefit, a plan that was easily implemented without a lot of red tape, that helped families and lifted hundreds of thousands of children out of poverty.

Those with higher incomes paid the benefit back in taxes too. However, if that well-off family faced a downturn in the economy that ended its employment, like what we are seeing in our resource sector right now, for example, they could keep that benefit. Under the Liberal child benefit, those families will have to wait until next year to show their income loss before benefits are adjusted.

Some people truly are struggling to save, absolutely. That is why the government should be targeting voluntary additional income contributions to the CPP and should be focusing on helping those who are working hard to join the middle class and on seniors living in poverty right now, rather than blanketing all Canadians and all businesses, which are growing the economy, with a punitive program that limits their ability to save and invest.

[Tracey Ramsey, NDP, Essex, ON]

Madam Speaker, let us take a moment and talk about what pensions really look like. In Canada, there is the concept that if we go to work every day and work hard, one day we will be able to retire with dignity. Canadians planning for retirement dream about what it will be like to finally not have to go to work every day and instead do things they enjoy, such as spending more time with their family, travelling, and volunteering. This is the dream of many Canadians.

Bill C-26 would be a positive step forward in enhancing CPP benefits. This bill, when fully implemented, would increase the current level of CPP benefits from 25% to 33%. Although this falls short of the NDP's long-standing proposal to double CPP benefits, Bill C-26 is a step in the right direction. It would improve retirement security for young Canadians today.

I want to give a huge thanks to the many organizations that have been working hard for this improvement over many years. Labour and retired-persons organizations have long called for an expansion, and we congratulate them for their hard-fought win.

New Democrats have also been long calling for dignity for our seniors, the very Canadians who have built our beautiful country, many of whom are struggling in their later years with very limited incomes. We have consistently fought for increases in CPP, OAS, and GIS and will continue to do so.

The CPP is the best retirement pension deal available to Canadians. The fund is widely considered to be well managed. As of June 2016, the CPP Investment Board manages over $287.3 billion in investment assets for the Canada pension plan on behalf of 19 million Canadians, making it among the 10 largest sovereign wealth funds in the world. The CPP currently covers earnings up to a cap of $54,900; and for earnings up to this cap it aims to replace 25% of income. Maximum pensions are at $1,092 per month or $13,100 per year. For many Canadians, this only covers their basic needs.

The extended CPP would be a separate new tier. This would be added on top of the existing CPP and do two things: taking the replacement rate up to 33%, and expanding the earnings cap to $82,700. While the increase in Bill C-26 is welcome, New Democrats know that better is always possible and the government could have gone further with the percentage changes and still maintained a healthy CPP. The government could also have implemented the changes more quickly to help seniors right now. This bill could have done so much more for those who are struggling today. We need to see immediate action to help seniors and Canadians who would not see the benefits of these changes.

Retirement security is in crisis in Canada. We have fewer workplace pensions than ever, with six in 10 Canadians having no workplace pension. This means that 60% of Canadians rely on CPP, OAS, GIS, and personal savings. Most people know that seniors do not have a lot of disposable income and very few have significant savings to help. Many rely on their family to help supplement their needs and to provide them with security. Many are women who are widowed or do not have their own private pension to supplement them.

I remember a conversation I had with a widow in Amherstburg whose husband's workplace pension had been drastically slashed because the company, General Chemical, had left Canada and was now only paying a small portion of its promised pensions to retirees. She was now talking about selling her house that she had lived in her whole life because she could not live on CPP, OAS, and GIS alone.

There are many seniors in my riding who are struggling. We have a lack of affordable housing; rising costs of drugs; and increased costs of food, gas, and hydro. The list goes on and on. Seniors today are struggling, and there is so much that could be done today. The changes that are being proposed us would not take place for 40 years. Those who would see the biggest benefit from the proposed changes are millennials.

If we talk to millennials, we hear they are often not even able to imagine a future that includes a workplace pension. They are struggling to find secure employment and are often working multiple jobs to patch together a living. They do not even think about retirement because they are so focused on working to find a job.

My colleague from Churchill—Keewatinook Aski recently brought her precarious work tour to Windsor, where we met with millennials to talk about their issues. I was crushed to hear a young woman talk about the fact she never envisions having a family or owning a home because she cannot find work. She is certainly not saving for retirement, which shows the clear need for CPP changes for future generations.

What an incredible difference we have had in a generation. It is a sad reflection on our society that 20 years ago when I began working, I was able to find work easily in a unionized workplace that had a decent wage and a workplace pension, which meant that I could retire with security and dignity. Today these opportunities are few and far between. With the decline of workplace pensions we are heading into a future in which there will be no security in later life for Canadians.

We often hear of people talking about the concept of the Canadian dream, that if people work hard for 30 years they can retire with dignity. I continually hear from the other side of the House that if Canadians just work hard enough, they too can join the middle class. This narrative is not only misleading but also insulting. Many Canadians work extremely hard every single day, but for so many reasons they are not able to save enough for a decent standard of living, let alone for retirement. They do not even think about trying to join the middle class, because they are struggling to survive today.

We can go back a generation before that. My grandfather was on the bargaining team in his workplace after he came back from serving in the war. He worked at a place called Dominion Forge. When they negotiated a retirement benefit for a 30-year-and-out contract, he became the first person to retire under that contract once it was signed. Today, we are losing these pensions at an alarming rate in Canada.

Today, our workplaces are creating divisions between new hires and long-term employees. They are pitting working people against each other. This new tier of workers is asked to accept lower wages and smaller pensions, if any pension at all. We see this in workplaces right across Canada. It is a trend that reinforces the growing problem of retirement insecurity.

When I started working 20 years ago, things were relatively good. People with a high school diploma could find a job, and many jobs paid well. People could get jobs with a pension and benefits. They knew they could start a family. Today, this is just a dream for so many Canadians. Young people are struggling to find these good jobs and do not imagine planning for retirement because they cannot even find a job today.

We have a serious problem in our country today with many seniors living in poverty. I am pleased to see that Bill C-26 would address future generations, which will certainly be necessary, because there are fewer young people today who have a job in the first place so they can put some type of personal savings away and, second, have some form of workplace pension .

What are we doing today for seniors in this country? We hear the government talk about the changes it has made to the GIS, which amount to under $1,000 per year at the maximum amount people are receiving. Seniors in my riding who get that extra amount of money have not been elevated out of poverty. They are still suffering from the high costs of medication and still cannot find affordable rent. When some people in my riding found out that seniors were going to receive that money, they turned around and raised their rent. Seniors are not seeing any benefit of that bonus.

So much more could be done today. I look forward to seeing what future initiatives will come forward in the House that would help the retired person and seniors of today.

[Bradley Trost, Conservative, Saskatoon—University, SK]

Madam Speaker, one of the things I like to do when I address an issue is always lay out the philosophical principle grounds as to why I am addressing it and where my conclusions come from. One thing I have noted in this House, over the years, is members do a fairly excellent job of going through the details. However, when we are in this House, we are not just speaking to other members, explaining details, we are laying out our basic understanding to our constituents and to the broader Canadian public as to why we are voting for or against something. I always consider it very wise to lay out the basic principle as to why I will be voting on a piece of legislation in one particular way or another.

However, with respect to this particular legislation, the CPP tax hike, as we the Conservatives are noting Bill C-26, the reason I am particularly voting against it is that the government is taking away freedom and choice from Canadians. Let us be fairly clear with what the government is doing by raising the CPP premiums: it is taking away people's choice. This is not some money that is coming from somewhere else into people's accounts. It is not money falling from heaven like manna. It is people being forced to take the money, which they may very well need now, and to delay it for some future benefit some day, as the data and research shows for Canadians of my age and younger, at a very poor rate of return.

Let us go through the basic objections as to why the Liberal government's CPP hike would be bad for Canadians, would give them less freedom, and, in the final analysis, would not be good for our economy or people's individual lives.

The first point is that increases to the Canadian pension plan, hikes to the premiums, have not over the long term increased savings. The government is naturally going to argue, “Of course, this is forcing people to put money into the future that they will get back from the CPP when they retire”, but the empirical data and research that has been done, in the past, shows that whenever we have hiked the rates on premiums the number one place where Canadians tend to take the money from, when the government takes it from them forcefully, is their savings. It is almost a 1:1 ratio.

That means every time there is a hike, the government requires more in contributions, be it directly from people's paycheques or indirectly, although it still comes from people, ultimately, under the guise of taking it from their employers' contribution share. What do Canadians do? They put less money into mutual funds; they put less money into RRSPs; and now, with the introduction of the tax-free savings account, we will see less investment and less savings there.

What is happening is not that Canadians are getting a larger sum of money for their retirement, but that the government is taking away options from Canadians, taking away flexibility, and putting money into a pension plan for them, which may or may not be in their best interest.

Canadians are at different points in their lives, with different interests.

I am married. I have a 20-month-old daughter. All members of the caucus who know me know I am very proud of her. My wife and I, rather than wanting to put more money toward our pension plans, are looking to start a registered educational savings plan for our daughter. We hope some day she will grow up, graduate from high school, and go forward for further education. That is the priority for us. However, when the government begins to engage in things like the CPP hike, it takes away people's freedom to make those choices and, instead, decides for them, “This is where your savings need to go”.

There is an issue right now with affordable housing across the country, and in Vancouver and Toronto in particular. One of the greatest places where people save money is in their real estate. It is very difficult for young people now to get a foot on the ladder. The argument is, “Well, these aren't great sums of money, but a dollar is a dollar, and every little bit makes it more difficult”. To top it off, with the government's changes to mortgages, it continues to make it more difficult for young people who want to get on the housing ladder. The point is that by taking away people's freedoms, the government does not increase and encourage more savings for retirement, it just changes the vehicle for how it is done.

The second point is this. There might actually be some benefit to Canadians if the rate of return was that much greater. There was an interesting paper done by the Fraser Institute that analyzed, depending upon what year people were born, the actual rate of return, in real value, for the average Canadian. For people born after 1972, it is barely over 2%.

I am 42 years old and was born in 1974. For me, the rate of return on my retirement plan is absolutely lousy. For people from my grandpa's generation born before 1920, it was an absolutely fabulous rate of return. It was incredible. He lived to be 92 years old, he paid for approximately 10 years, and it was amazing.

However, this is the issue. For young Canadians going forward, an increase to the Canada pension plan is not great. It is a poor return on investment. If people put money in, say, a low-cost indexed fund or something like that, historically, it is shown to have greater returns that one can control. Let us say that, unfortunately, someone passes away early. Their heirs would receive extra benefits. The government's plan would instead provide weaker returns for younger Canadians. It is not helping people. It is deciding for Canadians when they need their savings, now or later, and at an inferior rate of return. That is the second point that the government needs to note.

What problem is the government addressing? Again, this needs to be dealt with. When we discuss retirement, we talk about replacement income. This really is not the issue when it comes to retirement income. The question is more one of whether Canadians are living in poverty at certain times in their lives. I am sure that when most hockey players quit playing in the NHL, they do not get retirement replacement income of 70% of their previous earnings. That is not the point. The question is whether their incomes will drop to a point where they will live in poverty. They have a choice. They have their bulk earning years and they can move things around. That is an extreme example.

I found this statistic earlier today on the Fraser Institute's website, which is that only 3.7% of Canadian seniors live in poverty, whereas it is more than 10% for working-age Canadians 18 to 64. For young people trying to put money into their educations, which for many people is the best investment by far, it is going to be difficult. Again, the government is taking away people's flexibility and making decisions for them, so that, in the end, they will not have the best return on their investments for their lives.

Instead of concentrating on replacement income, retirement policies, from a federal government perspective, should zero in on people who have low incomes. Those are almost always people who have not contributed to the Canada pension plan, because they have not worked over the years or were self-employed and not able to save money.

As my time has just about expired, I will mention another point that can be discussed in questions and comments, which is the cost of CPP versus other low-cost options available for savings. What it comes down to is that we will lose our freedom. We lose our freedom when we allow the government make decisions for us.

Let me reiterate that this bill would not solve the problem for low-income seniors, which is the real problem in retirement. It would provide a poor rate of return for people who view it as an investment, and it would displace savings from one portion of life to another portion of life by taking away people's freedoms. I will be voting against this legislation because it is bad policy. It is bad policy for Canadians now and in the future.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Madam Speaker, I am proud to rise in the House to speak to Bill C-26, an act to amend the Canada pension plan, the Canada Pension Plan Investment Board Act and the Income Tax Act.

Since being elected a little over a year ago, I have had many conversations with my constituents in Mississauga—Streetsville, ranging from security for seniors to things that concern youth. However, one of the more consistent concerns that has been brought to my attention is what our government is doing to help working-class Canadians who are looking to retire.

Many of my constituents have contacted my office and explained to me that even though they have been working hard their entire adult life, they are not confident they can safely retire. I know my constituents are not the only Canadians who have such concerns. All across the country, middle-class Canadians are working harder than ever, yet they are deeply concerned that they do not have enough money saved for a stable retirement.

More than one-quarter of Canadian families are nearing retirement and each year fewer and fewer Canadians have workplace pensions to fall back on. This leaves approximately 1.1 million families facing the intimidating risk of not having enough money saved to maintain their standard of living when they retire.

These Canadians fear that because of this, they will have to work for longer than they had planned and ultimately miss out on spending precious time with their families. As a result of this, a grandfather may not be able to take his grandchildren on a camping trip or may miss their sporting events because he could not get time off from work. A mother may have to cancel the road trip she was planning with her daughter for years, because she was called in for a last-minute shift. Ultimately, many Canadians will miss out on many important moments.

However, it is not just families nearing retirement that are concerned with this issue. Over the past year, I have met with any young Canadians who are just finishing school and are about to enter the workforce. They are concerned that with fewer jobs offering workplace pension plans, they will find it difficult to save enough of their earnings for a stable retirement.

It is no secret that Canadians are living longer lives. Although we should be grateful for this, longer life expectancies ultimately mean that the level of savings required to achieve a stable retirement is increased. With the population of my riding expecting to grow by 4% over the next 15 years and 6% over the next 25, there will only be more constituents with the same concerns if these issues are not addressed. However, I am confident that this bill addresses the concerns of my constituents and many Canadians across the country.

With all nine Canada pension plan participating provinces confirming their support, I know I am not the only person who has confidence in the bill.

Once it takes effect, Bill C-26 will increase the maximum Canada pension plan retirement benefit by roughly 50%. Currently, the maximum benefit is $13,110. However, after this enhancement, the number will increase by roughly $7,000 for a maximum benefit of $20,000.

Bill C-26 would do two very crucial things. It would increase the amount of money Canadians would get from their pension from one-quarter of their earnings to one-third. This means that a hard-working Canadian making $50,000 annually would received $16,000 annually in retirement. The bill would also increase the maximum income range covered by the Canada pension plan by 14% so that those who earn more will receive more in retirement.

We have heard from our colleagues that they are concerned that the cost of the bill would put a significant strain on taxpayers. To answer this, the government is ensuring that the changes in contributions will be phased-in slowly over seven years, which will give individuals and employers sufficient time to adjust to the minor increase. For low-income workers who may be concerned about the change in contributions, the legislation would provide an enhancement to the working income tax benefit designed to provide additional benefits that would offset the incremental Canada pension plan contribution.

Furthermore, it is important to note that contributions to the enhanced portion of the Canada pension plan will be deductible. Providing a tax deduction for new employee Canada pension plan contributions will avoid increasing the after-tax cost of savings for Canadians. For employers, employer contributions to the enhanced portion of the Canada pension plan will be deductible for income for tax purposes. For self-employed Canadians who contribute both the employer and employee share of the Canada pension plan, they will be able to deduct both the employee and employer share of contributions to the enhanced portion of the CPP.

Last week, I visited many local high schools and spent time speaking to hundreds of students. When discussing the proposed Canada pension plan enhancement, these young individuals overwhelmingly supported the legislation. They understood and supported the idea of small, incremental increases in contributions to ensure a secure and stable pension.

It is young people like the ones I met last week who will be inheriting the policies and programs we create today. The support of these young people should be a testament as to why all members in the House should support the bill. We, as members of Parliament, must think of them when debating legislation in the House. I am confident the bill will have a positive impact on the future of young Canadians, which is why I am proud to be speaking to the bill today.

During my campaign last year, I had many young volunteers helping me. When I was elected, I promised to be their advocate in Ottawa. By standing here today to speak to the bill, a bill that would have a positive impact on their future, I know I am fulfilling that promise. The positive impact the bill can have is truly significant. The bill would ensure that every Canadian worker could retire with a safe and secure pension. Young Canadians entering the workforce could enter with confidence, knowing that legislation would be in place to ensure they would have enough saved when the time comes for them to retire.

The House resumed from November 4 consideration of the motion that Bill C-26, An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act, be read the second time and referred to a committee, of the amendment and of the amendment to the amendment.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, I am pleased to rise today to address Bill C-26, which amends the CPP in this country.

The changes that are being proposed today would not help today's seniors. The CPP tax hike that the Liberals are proposing would only help seniors 40 years from now and in the interim would damage the Canadian economy.

Being from Alberta, I know that our economy right now is in a shaky place. We have seen double digit unemployment rates and all sectors are being affected. This is not just an oil price problem. This is a problem across Alberta's entire economy. I particularly want to push back on the idea that Alberta does not have a diverse economy. For anyone who says that Alberta's economy is not diverse, I would challenge that person to come and visit my riding.

If there is something that starts in the ground it probably comes from my riding. I have a significant agriculture industry in my riding as well as a significant forestry industry and a significant oil and gas industry. All of these industries work hand in hand.

I met with a constituent during the campaign and when I asked him what he did he told me it was hard to explain. He said his family are traditionally dairy farmers. They have a herd of about 120 cows. He said he has a mechanics ticket and on the side he soups up Dodge diesel pickups. He has a lot of fun with that and it makes him about $12,000 a year. He said he also services a number of gas wells in the area.

This gentleman's story typifies Alberta in that its entire economy is integrated. If a person works in one industry, that does not necessarily mean that he or she only works in that industry. A lot of guys are doing multiple things. There is a lot of shift work in the oil and gas industry. People will work for two weeks at a time and then be off for a week, or they will work for 10 days and be off for four. They work a combination of such. A lot of people who work their oil and gas job will have a separate commercial interest going on when they have days off. When the number of oil and gas jobs is reduced, it affects every other sector of Alberta's economy because they are self-funding another project on the go.

A common saying in Alberta is “we're funding our farming habit one way or the other”. A lot of guys will either pick up a job servicing gas wells in their area or they will drive logging trucks. I know a number of guys who farm year-round and they drive logging trucks in the winter. They already have a big rig sitting in their yard so they get a commercial licence, insure the truck, and go logging. They bring in more income that way. These are just some of the things that show the diversity of the economy in northern Alberta.

Then we have all the spinoff that comes from the diversification of our economy, one being the service industry. We also have welders who work for all three of the industries. They will do some welding at one of the sawmills, some welding on one of the oil lease sites, and some welding work for a farmer. The hotel and restaurant industry will service all three of these industries. We have a lot of schools in the area that educate all of the children who live in the towns and whose parents work in one of the three industries.

Alberta is one of the best regulated parts of the country and because of that we tend to be on the cutting edge of new technology, whether that be in farming, logging, or the oil patch.

A number of the lumber mills that I visited said that they were the first in the country to have the technology. When logs come into the mills, they are scanned, a picture is taken of them, and the computer does an algorithm on the value in those logs. Whether they cut two-by-fours, or two-by-eights, or two-by-fives out of a log, it is all planned by the computer as they come through the gate into the mill. The company that provided the technology to the mills is able to go and sell it around the world.

It is the same thing when it comes to the oil patch. The development of the flare stack technology and the ability to create electricity off what used to be flared, was developed in Alberta. Now we go around the world and sell that technology.

People who say that Alberta should have worked harder to diversify its economy should check out what we are doing in engineering, in innovative farming practices, and in harvesting logs.

Our logging companies have a 100-year plan on how they will harvest the logs in northern Alberta. It is fascinating to watch.

Oil and gas is being depressed because of oil prices and a lack of pipelines. It is a huge problem for Alberta. The logging industry is under a couple of threats. The species at risk legislation and caribou are causing consternation with the logging industry, as well as the softwood lumber agreement. These are the other things that are causing instability in the marketplace. People are not ready to invest in things like that.

Also about a third of the canola crop is laying underneath the snow right now. This is causing a significant hardship for our farmers in the area. Our farmers typically do not have the margins to pay significantly, at the oil and gas level, so they typically pick up oil and gas workers as well.

All of these things are working together. The three major sectors in my riding have significant instability. They are unable to invest right now, because they are unsure of where we will go.

On top of all of these things, the Liberal government is now putting an extra burden on all of these employers and employees by bringing in a new CPP tax hike. This CPP tax hike is going to make it more expensive to hire people. It is also going to cost more for the current employees, which is what we are looking at in northern Alberta right now.

A lot of companies are surviving with a zero margin. If they can get their costs out right now, they are happy to come and do the work. In some cases, they are doing the work at a loss purely to keep their guys so when the price comes back around, they will have the good guys working for them.

What the CPP tax hike will do is drive the costs up even higher, making it more difficult for companies to survive through this economic downturn. It will do nothing for seniors right now. The entire reason why the Liberal government is bringing this in right now, as they have told us, is to help seniors.

This is not going to help them. It is completely preposterous for the Liberals to say that they will bring this in to help seniors, and then say that it will only help seniors 40 years from now. It is incredibly frustrating to watch the government, completely oblivious to the fact of what is happening in northern Alberta, throwing this on there and saying that it is doing it to help seniors. I am at a loss for words to say how frustrating this is.

I know many of my colleague have raised a lot of similar points and I hope we can continue to do this. I feel the government should reconsider its position on the CPP tax hike, go back to the drawing board and come back with something that will not be so detrimental to our economy.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, I am pleased to rise this afternoon to speak to Bill C-26, the Liberal CPP tax hike.

Today marks the one year anniversary since the government was sworn in. In that context, it is appropriate, at the outset, to take a step back to look at the past year, because it really has not been a pretty one.

Over the past year, the economy has slowed and more and more Canadians are losing their jobs. In my province of Alberta, more than 100,000 people have been laid off in just the past year since the government came to office. The more than $1 billion surplus left by our previous Conservative government has turned into a massive deficit, with over $100 billion in new debt projected over the next five years and with no end in sight to the red ink. Taxes are going up for hard-working families. The tax credit for families for children's arts and sports is gone. The universal child care benefit has been eliminated. In addition, we can forget about the commitment to reduce the small business tax from 11% to 9%. It turns out that it is just another Liberal promise made and another Liberal promise broken in the long line of Liberal promises made in 2015 and broken in 2016.

Now, we have Bill C-26, a massive Liberal tax hike on hard-working Canadians. What it is going to do? It is going to take money out of the pockets of hard-working Canadians. How much will it take out of the pockets of hard-working Canadians? It will take as much as $2,200 annually out of the pockets of families.

Let us think about that. What is $2,200 going to mean for a young person who has just finished post-secondary education and is starting a career? It means $2,200 less for that young Canadian to pay down his or her student loan. What about a young couple that is trying to put money down on its first home so it can attain home ownership? It is $2,200 less for that young couple. What about the family that wants to save for its children's post-secondary education? It is $2,200 taken out of its wallet, per year. It is $2,200 less for Canadians to save and invest in TFSAs, tax-free savings accounts.

Speaking of TFSAs, let us not forget that it is the Liberal government that is responsible for reducing and rolling back the amount that Canadians can save in TFSAs, from $10,000 back to $5,500.

It is very difficult to swear, on the one hand, the government's assertion that this CPP tax hike is about savings when it is the same government that has rolled back the opportunity for Canadians to save in TFSAs. That is the government's record. The reason for that is this CPP tax hike has nothing to do with savings and everything to do with paying for the government's out-of-control spending.

What is this going to do? What impact is this CPP massive tax hike going to have?

The Department of Finance Canada projects that it will result in reduced employment, a reduction in Canada's GDP, reduced business investment, reduced private savings, and reduced disposal income for Canadians.

Those are not Conservative Party projections, those the Department of Finance's projections. The Canadian Federation of Independent Business projects that as many as 110,000 jobs will be lost due to this CPP Liberal tax hike. In the one year since the government was elected, it has dug Canada into a hole of more than $30 billion without creating a single job. Now, it wants to kill 110,000 jobs with this CPP tax hike.

What does Bill C-26 seek to achieve? What problem does it seek to solve? I would submit that this is really the million-dollar question. The fact is that Canada's retirement system is the envy of the world. According to the Department of Finance, the average Canadian senior is earning 91% of the median Canadian. That is well above the OECD average of 84%.

According to Statistics Canada, the number of Canadian seniors who are living on a fixed income has drastically decreased over the last many years. It was at 29% in 1970. It is now down to 3.1% today. Canadians are saving like never before, when it comes to planning for their retirement. In fact, since 1990, the percentage of income that Canadians are saving has doubled from 7.7% in 1990 to 14.1% today.

It is no wonder that just about everyone is panning this Liberal CPP tax hike, including none other than the hon. Judy LaMarsh, the cabinet minister who was responsible for presiding over the implementation of the CPP in 1964.

In closing, I say that there is not a problem for Canadians when it comes to savings, but the government does have a problem. It has a problem with increasing spending and increasing taxes. Frankly, Canadians have had enough. They cannot take it anymore. It is time to defeat this Liberal CPP tax hike and defeat Bill C-26.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Mr. Speaker, I am very happy today to rise and speak to the proposed legislation, Bill C-26. In order for me to explain my position on this bill, I want to say a bit about the great riding of Mississauga—Erin Mills.

While I was canvassing over a year ago, I had the opportunity to knock on a door in a good neighbourhood. An old lady opened the door. She was very dishevelled. She had bruises on her arms and her hair was a mess. I was still a candidate, and I asked her what she thought our government would need to do to better support Canadians. She said, “After I pay my rent, after I pay my medical bills, I don't have enough money left for food.” That is the plight of many retired people who live not just in my riding but all across Canada.

Over the summer, I had the opportunity to take part in the Red Cross Meals on Wheels program. Together with Red Cross, I went to different homes in my riding. We visited senior citizens who could not afford food. They were getting food from food banks and programs like the Red Cross Meals on Wheels program. I got to speak to them and really understand their plight, their difficulty in finding stability in their age of retirement, in their most vulnerable time.

The average age in my riding is 37. We have a lot of young families. Over the summer, I had the opportunity to knock on doors and get to understand what Canadians were most concerned about. I knocked on over 1,000 doors, and the number one concern, even from young people, was about what they are going to do when they retire. They wondered if they will have stability in their living and if they will have to downgrade their lives at that point, and what the government is doing.

Despite all the current benefits that are provided for retired people, we recognize that it is not doing enough to support Canadians in their retirement. Having understood the concerns of Canadians, the government has introduced Bill C-26. This bill seeks to boost how much each Canadian will receive from the Canada pension plan. The current system provides retirees with up to one-quarter of their earnings. Under the proposed system, this would increase to one-third, up to a maximum benefit of $20,000.

Seniors have for the most part spent their lives contributing to Canada's economy, by working hard, striving for opportunity, and building in their own way the Canada that we love. They have raised families in Canada. Their children will one day grow and continue to carry the torch of progress for this beautiful country.

This legislation will also support and benefit the next generation of workers. Young Canadians who enter the work force over the next few years will benefit the most from the enhancement of the CPP. Young workers visit me in my constituency office on a very regular basis, looking for employment, or they are starting their careers and looking for advice as to how to further their careers. I am very pleased to say that our young Canadians are very dedicated to the progress of Canada and to making sure that we build a strong nation. I am very happy to see that our government, through Bill C-26, will ensure that their future is also maintained in their times of vulnerability.

As I have alluded to earlier, many current retirees face troubling challenges in making ends meet. Recognizing this, our government took steps to improve the quality of life for seniors today. In budget 2016, our government provided a boost to the GIS, the guaranteed income supplement, to help seniors who are single with up to $947 annually. This ensures that the future of Canada is protected.

We will see over the next many years an increase in the number of retired people. As a government, if we do not begin to look to the future and make sure that Canadians are well taken care of after they have spent so much of their lives contributing to Canada's growth, then we do not succeed as a government. We need to ensure that our current and future workers are able to have stability in their workplace, and after they retire in the future.

We need to work hard to ensure that we all succeed as Canadians. Bill C-26 is not the only way we are doing it. There are many other ways. As we know, progress is not a one-step approach, but a multi-faceted approach through our many investments in infrastructure, our CCB, and our recent assistance for our youth. We have raised the bar to bring Canada to a level that ensures we progress as a nation.

I would like to thank our Minister of Finance and the provincial and territorial ministers for their dedication to improving the lives of Canadians with this historic agreement on expanding the CPP. As stated in the Toronto Star:

The agreement...provides for the first substantive change to our national retirement scheme...The deal recognizes that the time has finally come to do something about retirement security.

I am very happy with the role our federal government has played in collaborating and working together with our provincial and territorial counterparts and our municipalities to ensure we are all on the same page, that we really understand the issues, so we can stand in the House and fight to ensure that the work we do as parliamentarians is effective and is what Canadians need.

I am very happy that here has been a lot of debate in the House and a lot of passion shown with respect to helping our seniors, not just the seniors of today but those of tomorrow, and their families.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Mr. Speaker, I have a very brief question for my colleague. I happen to know a couple in their late twenties who are working for their brother-in-law in a small business. Now, under the Liberal's Bill C-26, they are going to have to each contribute, as I understand it, $1,100, and the person who owns the business, who happens to be their brother-in-law, is going to have to match that money. If those folks were to invest in a savings plan, the TFSA or something similar, and the small business owner was allowed to use that money to expand his business, which would be better? Would it be better to put $1,100 of taxes into a CPP that will maybe pay something 40 years later, or save the money themselves? I wonder if he could give me an opinion on that.

The House resumed consideration of the motion that Bill C-26, An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act, be read the second time and referred to a committee, and of the amendment, and of the amendment to the amendment.

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, it might be helpful, or perhaps even instructive, if I prefaced my remarks by sharing with my colleagues the definition of a tax. A tax is defined as a “compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions”.

I would suggest that anyone with a reasonable outlook would know that hiking the CPP premiums is a form of taxation. It is in effect a payroll tax.

I would argue that raising taxes in times of a sluggish economy, in times of the weak economy we are experiencing here today in Canada, is absolutely the wrong thing to do. Raising taxes would have negative impacts on the Canadian economy. For example, it would restrict and reduce the ability of businesses to reinvest in their businesses. It would reduce the ability of Canadians to have more take-home pay, and it most certainly would reduce their ability to add to their savings. It would reduce the amount of money they would be able to save.

It is simply the wrong approach to take. This payroll tax is regressive. It harms employers and employees alike. Most particularly, it is harmful to small businesses.

Let me share a small story from just a few weeks ago. I happened to be in Thunder Bay on some business. Since I had never been to Thunder Bay before, I went out for dinner to a restaurant that night with a colleague. I had a lovely dinner. Following dinner, the business owner and I engaged in a conversation. Once he found out I was a member of Parliament, he wanted to talk about the proposed hike in CPP premiums. He told me his profit margin was so skinny that any increase to the CPP premiums would result in only two things. One, he would be looking at a negative profit for the year, which might result in his closing his doors; or two, he would be forced to lay off employees. Neither of those two options was particularly attractive to this young employer. He said he had a business partner in another restaurant in Edmonton who was facing exactly the same situation.

I know it does not matter whether one is a small business owner in Surrey, British Columbia; Edmonton, Alberta; Winnipeg, Manitoba; Thunder Bay, Ontario; or Corner Brook, Newfoundland, because this is a problem for all small business owners.

The frustrating thing about this is there is no need to increase CPP premiums. The government's stated objective is to allow Canadians in their retirement years to retire more comfortably. However, the statistics do not indicate there is a problem today. Statistics indicate that fewer than 4% of seniors are living on a lower income, or below the poverty line. That is a great change from many decades ago. In fact, in 1970, 29% of seniors were living below the poverty line, so we have made great strides in the decades since 1970.

Additionally, statistics indicate that Canadians are saving more money today. In 1990, Canadians saved slightly more than 7.5% of their income. Today, it is almost twice that. Canadians are saving over 14% of their take-home pay, or at least their gross income, and putting it into savings vehicles like RRSPs, TFSAs, and the like.

We are making progress on that, so for the government to say it is doing this out of necessity is, frankly, disingenuous at the very least.

The government appears to be trying to create a solution for a problem that does not exist. The irony of all of this is that because of the government's reckless, out of control spending, the reality is that the government is creating a problem for which there is no solution, because of the billions of dollars of debt it is incurring and throwing upon the backs of taxpayers. It has no solution for getting out of debt. There is no plan to get back to balance.

It appears that the government's economic plan, if we want to call it that, is following very closely the path of the previous Ontario governments of McGuinty and, currently, Premier Wynne. That disastrous economic plan has resulted in the Province of Ontario, on a per capita basis, being more indebted than any jurisdiction in the world. What is even more frightening is the fact that two of the main architects of the disastrous economic policy of Ontario were Gerald Butts and Katie Telford, who are now two of the main economic advisers to the Prime Minister. I would hate to see these two do to Canada what they have done to Ontario, but that is certainly what appears to be happening.

However, I think there are alternatives to what the government is planning and proposing with Bill C-26. I have always thought it is instructive and helpful if opposition members, rather than just criticizing the government, offer alternatives or things the government could at least consider to replace flawed legislation—and Bill C-26 truly is flawed. My suggestions to the government would not cost the taxpayer a nickel.

The first suggestion I would make is this. Why does the government not work with its provincial and territorial counterparts and encourage them to add financial literacy to the K-to-12 educational curriculum? I think it would be extremely helpful for young people to learn why they need to save for retirement. It would helpful for them to learn how to save for retirement, to learn about the investment and savings vehicles that are available in Canada today, so that when they finally enter the workforce, they have a plan, or at least have charted out a course of action, to be able to work their lives and then retire with dignity. That no-cost item would, I believe, be extremely helpful.

The second thing is again a very simple concept. Of course, I believe it is totally alien to the government's thinking, but it would not cost the taxpayers a nickel, and it is simply to lower taxes. Do not raise taxes, but lower taxes. Allow Canadians to take more money home with them. Put more money in their jeans. Put more money into savings vehicles. At the same time, lowering taxes would stimulate the economy.

Our previous government had a low-tax, high-productivity agenda. It resulted in having the lowest tax regime in 50 years. What was the result? Well, we created 1.3 million net new jobs from the height of the recession until the day we left office. Why? It is because lowering taxes increases productivity. That is a concept the current government is totally unaware of. Bill C-26 is totally opposed to lowering taxes, because this bill would raise taxes.

For those reasons, and some of the others I articulated in the few moments I had for my address, my colleagues and I in Her Majesty’s loyal opposition will be vociferously opposing Bill C-26.