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

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, it is a great honour and privilege to speak to Bill C-26, which I agree is one of the most important bills of this government, not just for the people of my generation but also for the next generation.

There are 11 million working Canadians without a workplace pension plan. As well, if we talk to people in the food banks today, they will report that a lot of working families are availing the help of the food banks.

When we combine the fact that 11 million working Canadians are without a workplace pension plan and a lot of working families are going to food banks for help, we know that when these families retire, they will retire in poverty.

We already have a lot of issues with the growing number of seniors. Just to give one example, in eastern Ontario, 2.5% of the patients account for close to 35% of the total hospital expenses. In this 2.5% of patients, close to 50% of them are seniors. The issues related to seniors are already costing us a lot. We have to take adequate steps so the seniors of the future years are well covered.

This bill, an act to amend Canada pension plan, the Canada Pension Plan Investment Board Act, and the Income Tax Act, as I mentioned earlier, is the most important thing. Let us summarize what the bill would do.

The bill proposes to amend the Canada pension plan to increase the amount of the retirement pension as well as survivors and disability pensions and the post-retirement benefit, subject to the amount of additional contributions made and the number of years for which those contributions are made; increase the maximum level of pensionable earnings by 14% as of 2025; provide for the making of additional contributions beginning in 2019; provide for the creation of additional Canada pension plan accounts and the accounting of funds in relation to it; and, finally, 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.

I know this on its own cannot operate and deliver the results, so there are other related acts that need to be amended. Therefore, part 2 of the bill seeks amendments to the Income Tax Act to increase the working income tax benefit and to provide a deduction for additional employee contributions.

The first part of the act also proposes to amend addition 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 interpretation of financial statements in relation to amounts managed by the Investment Board in relation to the additional contributions and increased benefits.

As I mentioned earlier, middle-class Canadians are working harder than ever, but many are worried they will not have enough money for their retirement. A lot of working Canadians have no workplace pension plan. Each year, fewer and fewer Canadians have workplace pension plans on which to fall back. For this reason, we made a commitment to Canadians to strengthen the Canada pension plan to help them achieve their goal of a strong, secure and stable retirement.

Earlier this year, Canada's Minister of Finance released a historic agreement to make meaningful changes to the CPP, an example of federalism at its best.

The more than one quarter of Canadian families nearing retirement, about 1.1 million families, who are facing a drop in their standard of living will be able to retire in dignity as a result of this enhancement. This deal will boost how much Canadians will get from their pensions, from one quarter of their earnings now to nearly one third, which in my opinion is quite significant and is a necessary change we need to address.

To make sure these changes are affordable, we will phase them in slowly over seven years, from 2019 to 2025, so the impact is small and gradual. Every Canadian deserves a secure and dignified retirement after a lifetime of hard work. Through this announcement, we have taken a powerful step to help make that happen.

There are certain facilities that are available to plan for retirement. One is the RRSP account, which is available to every Canadian. We note that there is a huge gap. A lot of Canadians are eligible to make contributions to those accounts but are unable to make contributions because of the cost of living.

One of the ideas a friend from the opposite side of the House pointed to is financial literacy. While I agree that financial literacy is an important component in achieving this result, we also need reasonable, tangible ways and means to make this possible.

To conclude, I repeat, there are 11 million working Canadians without a workplace pension plan. A lot of food banks are seeing working Canadians. Keeping that in mind, I think we should all support Bill C-26.

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, one thing I did not hear the member talk about was jobs.

He talked about the middle class and said that “middle-class Canadians are working harder than ever”. He also talked about workplace pension plans to fall back on not being there as much as they should be. However, the government's policy is to cancel jobs. With its policies on energy, it has destroyed my area in southeast Saskatchewan by ruining good-paying, middle-class jobs that had sustainable pension plans. They are being wiped out because of the policies of the government.

How does the government sit there and talk about putting in a CPP program that will not support these people, because they have no jobs?

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, I am glad the member opposite brought up the issue of jobs. We are making historic investments in infrastructure in this country. All the investments we make will go toward creating new quality jobs.

Here is a fact. There is something on the job front taking place. Many Canadians have to manage with not just one job but more than one job simultaneously. This is going to continue in the future. We have to take steps today so that when young and middle-age Canadians retire, they will have an adequate pension to retire on.

[Sheri Benson, NDP, Saskatoon West, SK]

Mr. Speaker, I want to make one point and then ask one question. I think it is important that much of the discussion from the government, when we are talking about pension benefits, relates to the maximum pension benefits people will get. However, only about 10% of the folks who actually receive CPP get the maximum benefit. Generally, the statistics are that almost three times as many men as women get access to those maximum benefits.

Knowing that fact, was the member not dismayed to hear that women who leave the workforce to raise children and those living on disability incomes are not going to receive the maximum benefit, as we originally thought, as they were excluded from the bill?

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, I recognize that the bill can always be improved, and I hope that the finance minister, in his next meeting with his provincial counterparts, will look into some of the shortcomings of the bill and that they will be addressed in the future.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, the member knows that according to McKinsey & Company, 83% of Canadian households are on track to maintain their current living standards in retirement. Statistics Canada says that the share of Canadian seniors living on low incomes, which I think is called the LICO, has gone from 29% in 1970 to 3.7% today. In fact, not just seniors but regular Canadians are doing a great job of saving by themselves. They do not need big government intervention to tell them how to save.

What will happen, though, with this CPP increase, this tax on payrolls, is savings substitution. The saving that would have happened in the private sector will be moved over to the public sector and controlled by the government.

What does the member have to say about savings substitution, the phenomenon in economics whereby instead of saving by themselves, people expect the government to do it for them?

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, I think the hon. member forgot the number of problems faced by seniors today. The hon. member seems to indicate that everything is so good that we do not need this bill. I have to completely disagree with him.

Today, in Ottawa alone, there are 10,000 people on the waiting list for affordable housing. We understand that a lot of seniors today face problems in maintaining their day-to-day living. Seniors of tomorrow, as I mentioned, will have a much bigger problem.

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

Mr. Speaker, it is an honour to rise today to speak to Bill C-26, a bill to enhance the Canada pension plan.

I want to start by lamenting, as I did this morning, time allocation, which is bringing this debate to a premature end. I think this is one of those times, particularly with the degree of controversy about the drop-out provisions in the bill and how they will unequally impact women in this country, when we really should have more time for debate and more time to ensure that we have all the facts.

I want to take a moment to say that if there is anything sadder than watching Liberals fall short of their promises, it is the Conservatives jumping on them for doing about one-tenth of what the Conservatives did when they had power. The use of time allocation was constant in the 41st Parliament.

[Some hon. members]

Oh, oh!

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

Mr. Speaker, I know that many who are currently heckling me were not here in the 41st Parliament, but I can assure them that we had no time to turn around before there was yet another time allocation motion. The Conservatives broke through all historical records. However, this does not excuse the Liberals for doing the same thing.

I would urge members on both sides of the House to consider what we really want in terms of parliamentary decorum and in terms of being able to address bills and get them through the House in an expeditious way while also ensuring that we do not trample on the rights of each of us here as members of Parliament to do the work we were elected to do, which is to study the legislation, provide suggestions, work together, and produce what the people of Canada want. They want parliamentarians who see the big picture and are prepared to put their heads together to come up with better legislation by taking the time that is needed.

Time allocation is in no one's interest here. I very much regret that the current government has brought it in now, for the ninth time. Again, for those who live in glass houses, I will remind them that it was 100 times that time allocation was brought in during the 41st Parliament.

I urge the Liberals in this place to consider what the threshold is against which they strive to achieve their goals. I would urge them not to think that their goal is to be better on any issue—the environment, climate, the treatment of veterans, criminal justice, Bill C-51, parliamentary decorum, the use of time allocation—than what Prime Minister Harper did. I want to set a really ambitious goal for them: Do better than what Prime Minister Mulroney did.

Obviously, I did not agree with everything done by the Progressive Conservative majority back in the 1980s, but I think if members go back and look at the use of time allocation, the number of whipped votes, and the treatment of issues and use that as a benchmark, they will find that they have to set their sights a good deal higher than trying to do better than the prime minister in the 41st Parliament.

Turning to the specifics of Bill C-26, I wish it did include—

[Some hon. members]

Oh, oh!

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

I am sorry, Mr. Speaker, but I am having trouble speaking through the noise.

I wish that Bill C-26 dealt with another pension issue. There is an omission, and I hope that the Minister of Finance will get back to it in the spring budget. It is an egregious situation that affects a minority of pensioners for sure, but they are the very people we should do the most to honour. These are people receiving pensions who, through the Superannuation Act, are deprived of spousal benefits if they are veterans, retired service persons, retired RCMP members, and other retired categories of public servants and have remarried over the age of 60. They are deprived of spousal benefits on their death.

This is a terrible injustice to a lot of constituents in my community of Saanich—Gulf Islands. I know that a lot of other members of Parliament are aware of this. It is due to the most anachronistic of all pension rules. It goes back to the Boer War. It was called the “gold-digger” clause.

I do not mind saying that I am 62. I do not feel that I am so far along with one foot in the grave that the gold-digger clause makes sense. The gold-digger clause in the Boer War was that if a soldier came back from the Boer War and remarried over the age of 60, the only possible reason anyone would have married one of these soldiers would have been to get their hands on their benefits when they passed away.

Times have changed. Very healthy, vigorous adults who have a lot of life left get married over the age of 60. I have one such serviceman in my riding who received the highest medals of honour, including the Legion of Honour from the French government, for his service in the Second World War. He is now over 90, and every day I see him, he reminds me to please do something about this terrible injustice. He does not want to leave his wife destitute. Therefore, I flag that again for the Minister of Finance.

Overall, the Green Party supports the bill. We support the fact that it is expanding the most reliable and consistent way in which we can ensure that seniors in Canada have adequate savings for retirement. The Canada pension plan is the most reliable and the most sustainable of what is available.

RRSPs, for example, are a good program. I know many of us will pay into it, but the registered retirement savings plan appeals primarily to those Canadians who already have discretionary income to put into an RRSP. That taxable benefit to higher wage earners costs the tax system quite a lot of money. If we look at it as a public policy question, we see it is not clear that the RRSPs make sense.

The Canada pension plan makes abundant sense, and we know right now that two-thirds of Canadians no longer have any workplace pension. Workplace pensions are disappearing. More and more Canadians have inadequate savings for retirement, so the workplace pension plans are shrinking at the same time as we have what is sometimes called the grey tsunami. We know we have a demographic with many more people about to enter retirement.

By the way, I commend the government for returning the retirement age to 65; that is commendable. However, we do need to enhance CPP benefits. There is no question that overall the bill is going in the right direction. We know that right now the median value of retirement assets for Canadians between the ages of 55 and 64, with no accrued employer pension benefit, is under $4,000. We know we need to augment the CPP. Only one in five Canadians have adequately saved for their retirement.

It is all well and good for some members of this place to say that Canadians should plan ahead and it is their responsibility to figure out how to save for their retirement. This is a very small cost of a public program, with the cost split between the employer and the employee, to make sure that people have adequate savings for retirement. The reason people do not put aside money for retirement is generally that they lack disposable income because the other costs of daily life eclipse their ability to set aside money for retirement.

I urge my friends on the other side of the House to embrace expansion of CPP. I agree with the analysis of the Canadian Association of Retired Persons. It does really good work on public policy and commends the bill as well.

That brings me to the point where I wish we had time in this place and I wish the Minister of Finance and the Minister of Families, Children and Social Development could have provided, at committee, by accepting amendments, a fix to what looked initially like an oversight, and that is the dropout provisions for disability and child-rearing to ensure gender parity. Both ministers have said that they can fix this problem by renegotiating terms with the provinces. I wish they had fixed it while they had the chance at committee. They still have the opportunity to fix it, if they are willing to accept amendments when we get through this process. However, at this point there has been no sign of a willingness to accept amendments, and we are left hoping for public pressure to continue what both ministers say they are willing to do by changing the terminology in the negotiated agreements with the provinces.

It is very hard to understand how this oversight has not been fixed already. The conclusion that my friends in the NDP have reached appears an inescapable conclusion. On the evidence we have before us, it appears that the bill will disadvantage women for no apparent reason other than an oversight. I did have a brief moment to discuss this with the Minister of Finance earlier this morning, and his position is that to do what the NDP asks now would result in a transfer of wealth from poorer women to wealthier women because of the way the calculation works. Unfortunately, I do not have the full facts on this. I had a 30-second conversation with the Minister of Finance, which is what happens when there is time allocation and inadequate time for debate.

I am left with the dreadful conclusion that, with the chance to bring in a really strong bill that would have no negatives attached to it, which is what Bill C-26 was when I first read it, it needs to be fixed. The NDP spotted this problem. I commend the NDP for spotting it. With that, I will close.

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

Mr. Speaker, I appreciate the words from the leader of the Green Party. She mentioned that the NDP has spotted a problem. There are issues that the Minister of Finance has clearly indicated that he intends to raise going forward. The bill we have before us is a bill that has been negotiated among the different provinces and the national government. Both she and I sat in opposition for many years, watching the Conservatives virtually ignore a very important file to Canadians; that is, an increase to CPP.

The question I have for the member now is this—and I know she is very knowledgeable about the rules and process and so forth of the House. When we have an official opposition that is in complete opposition to a particular bill, and its intention is to kill the bill, would she not agree that sometimes it is necessary to use time allocation as a tool; that if we forfeit that tool and do not use it, ultimately, the official opposition will be able to talk indefinitely, thereby potentially even killing the bill? Would she not, at the very least, acknowledge that, at times, there is a need to use the tool known as time allocation?

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

Mr. Speaker, I am in a position where I believe it is the role of the House leaders for all the main recognized parties, the Conservatives, the Liberals, the New Democrats. I think time allocation, when used in this place, is a signal of failure of the basic mechanisms of this place. I do not think it should ever be used, with all due respect to my friend the parliamentary secretary.

If we cannot get bills through the House in the normal process—and I do not see great delays in this process on this bill. We have only had eight days, and the government says, “Look, we've had eight days”. To the average Canadian and to me, as someone who is trying to stay on top of all legislation in this place—and I know I have been very preoccupied with having the honour of serving on the Special Parliamentary Committee on Electoral Reform, but it is not possible to be at committee. I read the bill. I thought I understood it. The NDP spotted this problem, which I think is a real problem. To find time to fix that would be preferable rather than to bring in time allocation.

This example comes more easily from the U.S., so I do not insult anyone here. The Republicans decided in Obama's first administration, “Whatever he wants, we say 'no'”. That is not good governance. That is hyper-partisanship.

I hope we never come to that place, in this House.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I want to put forward a couple of points for her consideration. In order to help current low-income seniors, there are many much more direct mechanisms that put money back into their pockets. I think we did some of them—tax reductions for seniors and expansion of the OAS—and more could be done along those lines. Those kinds of reforms would actually give money back to seniors. They would not involve taking more money away from them for government to control them. I think she knows that we favour a model that emphasizes giving money back to people, and private savings.

One of the biggest advantages, as I see it, to encouraging private savings is that they create a mechanism for people to invest in interim projects. Someone could put money aside, use that money for an education, maybe to buy a home, and then realize the value of that, subsequently; whereas, if there is a government-controlled plan, the money is taken away and is put in a separate fund from which that individual cannot draw, or use at all for interim projects, until retirement.

On that basis, would she not consider that there are more effective alternatives to helping people save for interim projects, as well as for retirement, than just going with this sort of government control, all to a government pot kind of approach that is being put forward in this bill?