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.

Report Stage

[The Assistant Deputy Speaker, Carol Hughes]

Before we resume debate, I know there was some question about how I had pick the speakers. I want to remind the member for Dauphin—Swan River—Neepawa, in case he was not in the House when this occurred, this is an extract from Debates of November 3, 2016. The Deputy Speaker at the time said:

As Chair occupants, we recognize that the time for questions and comments is often the most valuable time for an exchange between members. In accordance with the procedures and practices, we will do our best to ensure that time is generally afforded to the members of the parties who are not associated with the member who has just spoken but not to the exclusion of that party....

That is the way we will do it. We will also be attentive to members who are particularly present during the day and paying attention to the debate to ensure that as many members as possible can participate....

It goes on. I just want to indicate that if there are a lot of people rising from the party that has not been making the speech, those people are being recognized first. If no one is getting up, we will of course recognize members from the party that has just made the speech.

If the member is not in agreement with that, I will certainly take that to the Deputy Speaker and the Speaker of the House.

Resuming debate, the hon. member for Surrey Centre.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Madam Speaker, the goal of a stronger Canada pension plan is truly a high priority that is shared by Canadians from coast to coast to coast, with 75% in favour of a stronger public pension plan. By making this priority a reality, we have the opportunity to demonstrate what Canadian federalism can accomplish when governments work together openly and constructively.

Helping Canadians achieve their goal of a safe, secure, and dignified retirement is a key part of the Government of Canada's plan to help the middle class and those working hard to join it. As part of this plan, the Government of Canada is committed to working with all provinces and territories to enhance the CPP to ensure that future generations of Canadians can count on a strong public pension plan in their retirement years. This is precisely what we are doing by enhancing the plan.

We know that middle-class Canadians are working harder than ever before, and many are worried that they will not have set aside enough money for their retirement. The Department of Finance has examined whether families nearing retirement are adequately prepared. About one in four Canadian families approaching retirement, or 1.1 million families, are at risk of not saving enough to maintain their current standard of living, and the risk is highest for middle-class and middle-income families. Families without workplace pension plans are at an even greater risk of under-saving for retirement. In fact, one-third of these families are at risk.

We are aware of the need to help Canadians save more. Saving more will mean that they are more confident about their future and about their ability to secure a dignified retirement.

There is a particular concern regarding younger Canadians who tend to have higher debt than in previous generations and who, in most cases, will live longer than in previous generations. They face the challenge of securing adequate retirement savings at a time when fewer expect to work in jobs that will include a workplace pension plan. Further, a prolonged period of low interest rates could mean that young workers will face lower returns on their retirement savings, which means that they may need to save even more than in the past.

I am proud to be able to say that we are delivering on our commitment to help Canadians save more for retirement. Working in close collaboration and towards a common purpose with governments across Canada, we reached a historic agreement that would give Canadians a more generous public pension to help them retire with dignity.

The challenge that governments faced in crafting an enhanced CPP was that the current plan was not accumulating benefits quickly enough to meet the future needs of Canadians in a world where workplace pension coverage continues to decline. The enhancement that the Canadian governments have agreed to does two things to address this.

First, it would boost the share of annual earnings received during retirement from one-quarter to one-third. For example, an individual making $50,000 a year in today's dollars over his or her working life would receive about $16,000 per year in retirement, instead of roughly $12,000 a year today.

Second, the enhancements would increase by 14%, which is the maximum income range covered by the CPP. This means that, once fully in place, the enhanced CPP would increase the maximum CPP retirement benefit by about 50%. In other words, the current maximum of $13,110 would, in today's dollar terms, increase by nearly $7,000 under the enhanced CPP, bringing the maximum benefit up to almost $20,000. The legislation also includes enrichments to CPP disability and survivor benefits.

For most Canadians, these increased benefits would come from just a 1% increase in their contribution rates. We are also making sure to give individuals and their employers plenty of time to adjust to the modest increase, making sure that it is small and gradual, and it would start in 2019.

Our plan is also fiscally sound. The chief actuary released a report in late October that confirmed that the contribution and benefit levels proposed under the CPP enhancement, agreed by Canada's governments on June 20, would be sustainable for the long term, ensuring that Canadian workers could count on an even stronger, secure CPP for years to come.

What does Bill C-26 mean for Canadians? First and foremost, enhancing the CPP means there will be more money from the CPP waiting for Canadians when they retire. This means they will be able to focus on the things that matter, like spending time with their families, rather than worrying about how to make ends meet. It will mean a reduction in the share of families at risk of not saving enough for retirement, as well as a reduction in the degree to which Canadians are under-saving.

The Department of Finance has estimated that by supporting and ensuring royal assent of Bill C-26, parliamentarians would have the opportunity to reduce the share of families at risk of not having adequate retirement savings by one-quarter, from 24% to 18%, when taking into account income from the three pillars of the retirement income system and savings from other financial and non-financial assets. Therefore, the enhanced CPP builds on the core existing CPP benefits. It does so in a smart, carefully targeted, and effective way that reflects the extensive research that governments brought to the table in crafting this enhancement for the benefit of working Canadians. Taken together, it is a comprehensive package that will increase CPP benefits while striking an appropriate balance between short-term economic considerations and long-term gain.

I would encourage hon. members to support the timely passage of Bill C-26 through the House to help the government increase the confidence of Canadians in their future.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, the one problem I am having is justifying the fact that even the finance department that the Liberal government looks to for advice is indicating that there will be a reduction in employment of 0.04% to 0.07%, or about 1,000 jobs per year over the next 10 years, for a loss of 10,000 jobs in total to the economy.

When we speak to our constituents, we often hear owners of small businesses say this tax will certainly have a negative impact on their ability to expand, with no opportunity to hire more people, and that in some cases it will lead to layoffs.

Could my colleague comment on the immediate negative impact this measure would have on jobs in Canada?

[Randeep Sarai, Liberal, Surrey Centre, BC]

Mr. Speaker, it will have the opposite effect. Small businesses are the ones with the least ability to provide adequate pension or retirement programs and plans for their employees. It is exactly for those type of employees that this new enhancement will be of the most benefit and provide the most security, because it is the small employers who are not necessarily able to provide company retirement pension plans. Therefore, it is even more paramount that we adequately secure the retirement of employees who are working in small businesses. This enhancement will come at a very low cost and help small businesses secure employment for their employees, secure retirement for them, and provide a benefit that exceeds what they were offering before. I think it is a better inducement for them to retain their employees, and I do not think there will be an adverse effect on their employment abilities.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, the issue of reforming the CPP is very important for this country. The New Democrats are committed to doing whatever it takes to get a good process in place.

Our concern is with respect to the government's declaring a stalemate with respect to our asking questions about the real and clear problems in this bill. There is a danger of government slipping very quickly into arrogance when it comes up with a bill that has problems, rather than the government working with the opposition.

I am talking about the dropout provisions that particularly target young women who step out of the workforce to have children, or persons with disabilities. Young women suffer time and again in the workplace because they are the ones who step out to have children. In the 1977 changes to CPP under the then Liberal government of Pierre Trudeau, we had provisions that identified the need to make sure that women would not be affected when they stepped out of the workforce. However, the current government has decided to exclude these provisions.

Therefore, I am asking my hon. colleague this. Why is the government shutting down debate on such an important provision that we can fix if we work collectively?

[Randeep Sarai, Liberal, Surrey Centre, BC]

Mr. Speaker, there has been very rigorous and thorough debate on this bill. I believe there have been well over 70 or 75 speeches on this bill on both sides of the House. It has been rigorously debated and thoroughly fleshed out. It is also important sometimes for the government to move forward with its agenda. It would be in the best interests of the House to get on with a vote.

I have heard a lot of debate in the House on this bill and a lot of concerns from the opposition and members of the New Democratic Party have been very valid, but the case has been made and it is time for a vote, appropriately timed, as debate may end shortly.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, I am very concerned after closure has been imposed on debate that the member can recommend that we accept this bill as written when it would discriminate against women raising children and people with disabilities. How can he support such a bill that would cause an injustice in the future?

[Randeep Sarai, Liberal, Surrey Centre, BC]

Mr. Speaker, it is a very tough situation and a lot of the concerns have merit, but when an agreement is reached, with the buy-in of all the provinces, we have to look at the whole picture. Perhaps this may come up again. I agree that the issue of people with disabilities and women raising children is valid, but the overall concept of this enhancement would make Canadians much better off.

[Karine Trudel, NDP, Jonquière, QC]

Mr. Speaker, I am very pleased to speak to Bill C-26 today. However, I find it unfortunate that our speaking time has been cut short. I became involved in politics to represent the constituents of Jonquière. I took on this role to uphold everyone's democratic rights. Whether we agree with the government or not, we are here to ask questions on behalf of Canadians in order to determine where our society is going.

First of all, I would like to thank my colleague from Hamilton Mountain for his excellent work on Bill C-26. He worked very hard, especially in committee, to raise the issues that I will discuss in my speech.

This bill would amend the Canada Pension Plan Act to incorporate the recent agreement reached between the provinces to enhance CPP benefits. While a better outcome was possible, since the full effect of the changes will not be felt for another 49 years, our young Canadians will benefit. Unless something changes along the way, when my young boys reach retirement age they will benefit from the changes we are debating in the House. I have to say that, as a mother, I find it a bit funny to say that. My boys will get older and benefit from this measure.

We must now see immediate action to help those seniors and Canadians on the cusp of retirement who will not benefit from these changes. The government must build on the momentum of this agreement and take steps to improve long-term retirement security for today's workers. It is all well and good to have changes that will come into effect in 49 years, but there is no denying that many seniors who are about to retire or who are now retired are grappling with financial insecurity. Unfortunately, they do not have enough income to live on, in other words to pay rent or eat properly. Still today in my riding, some seniors cannot afford a decent retirement home when the time comes to move into one.

Retirement insecurity is reaching a crisis level in Canada, as many Canadians do not have adequate savings to maintain their lifestyle upon retirement. A large part of this problem is fuelled by the erosion of workplace pension plans. Six in ten working Canadians have no private pension plan.

The NDP supports the bill, even though we feel that it does not quite meet Canadians' expectations regarding CPP reform. New Democrats, along with many in the labour movement and groups working for the rights of seniors and retirees, have long advocated that benefits be increased from replacing 25% of a worker's pre-retirement income to 50% of pre-retirement income. However, this legislation has offered up a very modest increase, from 25% to 33% of pre-retirement income.

Although we do like to see an increase, we feel that the amount is wholly inadequate, especially in terms of ensuring that our seniors do not have to live in poverty and can retire with the dignity and quality of life they deserve.

While many would be happy to finally see some changes to the plan and some increases in benefits, there are many who will be very unhappy. Those are the people who will see very little or no benefit from the changes presented in this bill. The government needs to leverage the energy generated by this agreement and do what it takes to improve long-term retirement security for today's workers. It must respond to Quebec's concerns about the impact of this enhancement on low-income workers.

The problem for today's seniors is that these pillars are falling behind in terms of enabling seniors to maintain an adequate standard of living. Dramatic increases in the costs of things like electricity and housing are causing great strain on seniors' fixed incomes.

Failing to take action now will have a great social cost, forcing many seniors into poverty. The number of seniors forced to use food banks will rise dramatically.

We talk about young moms a lot in the House. I want to talk about my best friend, Nathalie. Since I was elected, we have not spent as much time together as we used to because of my new responsibilities, but my friend Nathalie has been on my mind since Bill C-26 was introduced. She is a young mom who, together with her husband, decided to raise her children, to be there for them and to stay home with them, but also to work on her own personal growth by doing other things, such as volunteering with her local farm women's group.

I really admire this young woman because she is caring for her children and making a good life for them. She and her husband made some tough choices. She stays home, which means less income for the family, but the two of them feel it is very important to provide a good quality of life to their two young daughters.

However, I am disappointed by a major flaw in the bill. I fail to understand why the government simply will not help mothers like my friend Nathalie by immediately making the necessary changes. It would be so easy for us to do and it would help these mothers when they retire. Why do we penalize young mothers who decide, together with their spouse, to stay home to raise their children? We are talking about our future generation.

It is great that child care services are available to women like me who have a career. That is wonderful. However, it is not right to penalize women who stay at home to help their children become the adults of tomorrow because a bill fails to meet their needs. That is unacceptable. We must immediately rectify this as part of the new improvements.

It is easy to change a bill. We would just have to change a subclause, two or three lines maybe. Why is the government so bent on penalizing young women? I cannot stand by that.

The Canada pension plan is being improved and will benefit future generations, as I said, including my children, but not for another 49 years. I talked about our seniors earlier and I am quite concerned about what will happen to them now.

My parents are retired. They worked their entire lives to make a decent living in order to be able to pay for their house and groceries and to help me with my children. In fact, my parents look after my children when I am here in the House and am working on behalf of all Canadians. I am proud to be here for them and to do this work every day. However, when I meet with people from my riding of Jonquière and see the inequalities among them, I start asking myself serious questions. We have to find ways to take action now.

The NDP is recommending further increases to the GIS and the OAS, a national pharmacare program, and programs to enhance home care and palliative care.

We have much more work to do to ensure that workers can retire with adequate incomes and access to the services they need to have a good quality of life. The NDP will continue to work with our labour allies and others to improve the lives of Canadian seniors and retirees.

I will end my speech there. I hope that the government will listen, especially to women, like my friend Nathalie, and our seniors. I am thinking of Ms. Tremblay who devoted her entire life to looking after her granddaughter, a person with reduced mobility who needed very special care. We must consider these people because they, too, will need us in retirement. It is our responsibility and our duty as parliamentarians. It is also the government's duty.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, the government is listening to Canadians, whether it is to increase the guaranteed income supplement, reduce the age of retirement from 67 to 65, or the bill before us today. The bill was achieved because of the co-operation and strong national leadership. Governments of all political stripes, even the New Democratic government in Alberta, signed on, recognizing the value of the legislation.

The change that the member is requesting is not as easy as she seems to imply, and the NDP knows that. The Minister of Finance has clearly indicated that he will bring this topic forward at the next discussion among his cohorts at the provincial level.

My question for the member is with respect to the issue of trying to get the bill passed. Would the member not recognize that if it were up to the official opposition, the Conservative Party, the bill would never pass? Does she believe we should succumb to what the Conservatives want on this bill?

[Karine Trudel, NDP, Jonquière, QC]

Mr. Speaker, I thank my colleague for his question.

We agree on one part of the bill. However, I am wondering why the government did not introduce a comprehensive bill that includes women, mothers who decide to stay at home to raise their children. That is a full-time job. When they retire, they will not be able to collect the new enhanced benefits. Why are they being penalized?

Before introducing a bill, the government could have assessed the overall situation. My colleague from Hamilton has already proposed amendments and he made suggestions in committee. Why not make these changes now instead of later? We have a job to do. I choose to believe that, before introducing bills or amendments, the government takes every step possible to ensure that they are fully in line with the needs of our families.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I have a great deal of respect for my colleague.

I am troubled by the government's decision to limit this debate. There are clearly a number of problems with the bill, particularly with regard to the fact that people with disabilities and young women are being excluded from the enhancement. This could have a significant impact, particularly for women who depend on the drop-out provision when they leave the labour force to raise their children. I find that odd since the Prime Minister claims that his is a feminist government.

My question is simple. How can a government that claims to be feminist move forward with a bill that undermines the retirement of young women in Canada?

[Karine Trudel, NDP, Jonquière, QC]

Mr. Speaker, I thank my colleague for his question.

That was 2015. This is 2016, and the government calls itself feminist. We have had to set the record straight on that a number of times in the House.

The new enhanced benefit in Bill C-26 will not help young women.

The same applies on the labour front. So much has been done in pursuit of pay equity, but the bill will not take effect for another 18 months. Pay equity is more than 40 years overdue.

How can the government call itself feminist? “Feminist” is a great little word, but the government has to walk the talk. I think that Bill C-26 makes it clear the government is not really feminist.

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, I would like to follow up on my colleague's question.

The Liberals call themselves feminists, but they also say they are putting young people first and talk about how important it is to listen to them and meet their needs.

My husband is currently at home. What will happen when he is old enough to collect retirement benefits? He has been at home for two years. He will not be allowed to exclude those two years from his pension calculation. The Liberal bill is further jeopardizing the future of young people.

[Karine Trudel, NDP, Jonquière, QC]

Mr. Speaker, I thank my colleague for her question.

Her remarks are interesting. What I forgot to mention is that more and more young fathers are playing an active role. I want to emphasize this, because it is becoming increasingly common, which is great.

Bill C-26 does not encourage young parents, whether the father or mother, to stay home. The bill ignores fathers and mothers who choose to stay home to raise their children. In those cases, the enhanced benefits will not be calculated, which I think is appalling. This does nothing to help our young people create a better future for themselves and make good decisions regardless of their financial situation in order to give their children a good upbringing. How people help their children and the values they want to instill remain their choice.