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

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

Mr. Speaker, I am really puzzled by the question. We are talking about $24,000 for every woman and man. This is just a suggestion, but I am showing there is a real possibility. That is compared to $12,000. Let us not forget that this legislation will not come into effect for about 40 years. If we really want to do something, this is the direction we should be going. We could provide relief and help the poor in a real and positive way.

[Stéphane Lauzon, Liberal, Parliamentary Secretary for Sport and Persons with Disabilities]

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

He spoke a lot about jobs, job creation, and creating jobs for the middle class and the less fortunate. This morning, I had the opportunity to announce historic investments in mills that continue to provide jobs and create new ones. Our plans include innovating so that we can create jobs for the less fortunate, who will be able to receive a pension in the future.

I would like to ask my colleague what he thinks about the historic investments our government is making today to create jobs for the middle class and the less fortunate.

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

Mr. Speaker, respectfully, I will ask a question in response. What jobs? We have not seen any jobs. It has been a year. We have seen massive spending by the government, $30 billion, and it continues to grow. I am waiting for the jobs. I am waiting for the announcements in my riding. The former government was very active in that respect.

With respect, I am not hearing any announcements. I do not see that money being spent. I certainly do not see the result of whatever is happening in jobs.

[Marco Mendicino, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, it is an honour and a privilege to rise to speak in support of Bill C-26, an act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act.

Let me outline the purpose of the bill.

It would, among other things, 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 were made. It would increase the maximum level of pensionable earnings by 14% as of 2025. It would provide for the making of additional contributions, beginning in 2019. It would provide for the creation of the additional Canada pension plan account and the accounting of funds in relation to it. It would 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.

For the benefit of the House, let me provide a number of reasons why the government has put Bill C-26 forward.

We are concerned about the long-term retirement security for those Canadians who have worked hard all of their lives and expect, rightfully, that they will enjoy security in their retirement years.

The fact is that middle-class Canadians are working harder than ever, but many are worried that they will not have put away enough money for their retirement. Fewer and fewer Canadians have workplace pensions based on defined benefits or defined contribution plans to fall back on. To help those Canadians achieve their goal of a safe, secure, and dignified retirement, in the face of these challenges, the Government of Canada is committed to working with the provinces to strengthen the CPP.

Co-operative efforts as joint stewards of the program led to Canada's Minister of Finance reaching a historic agreement, in principle, on June 20 to enhance the CPP. All of my colleagues on this side of the House were very proud of that accomplishment.

What would this agreement mean in principle for Canadians?

Once it is fully in place, the CPP enhancement will increase the maximum CPP retirement by about 50%. Right now, the current maximum is just a little over $13,000, which is not enough by most living standards across the country. In today's dollar terms, the enhanced CPP would represent an increase of nearly $7,000 to a maximum benefit of nearly $20,000. Enhanced benefits will accumulate gradually as individuals pay into the enhanced CPP.

Young Canadians, and this is a group about which I know all members of the House are concerned, just entering the workforce would see the largest increase in benefits.

To fund these enhanced benefits, annual CPP contributions would increase modestly over seven years, starting in 2019. For example, an individual with earnings of about $54,000 or $55,000 would contribute about an additional $6 a month in 2019, an amount that should be manageable for most hard-working Canadians. By the end of the seven-year phase-in period, contributions for that same individual earning that same income amount would be about an additional $43 per month.

To ensure that eligible low-income workers are not financially burdened as a result of the extra contributions, the Government of Canada would enhance the working income tax benefit, an existing benefit that is designed to keep people in the workforce and encourage others to join it.

Enhancing the CPP will significantly reduce the share of families at risk of not saving enough for retirement and a degree of under-saving.

The CPP will always be there for Canadians because it helps to fill the gap for those who do not have a workplace pension plan, and it is portable across jobs and provinces.

Canada's retirement income system provides a balance of mixed public pensions and voluntary savings opportunities to enable Canadians to save for their retirement. The retirement income system is based on three pillars.

The first is the old age security program, which was altered under the last administration in an attempt to extend the age of eligibility to receive the full benefit and appreciation of that plan to age 67. Again, I am very proud to say that among the first measures this government took was to rescind that extension and restore the old age security program eligibility age to 65, something that was met with great support in my riding and, I dare say, right across this country.

The CPP and Quebec pension plan is the second pillar. They provide a basic level of earnings replacement for workers. They are financed by contributions from workers, employers, and self-employed individuals.

The third pillar is a voluntary tax-assisted private savings opportunity. Some examples include registered pension plans; pooled registered pension plans; registered retirement savings plans, commonly known as RRSPs; and tax-free savings accounts. Individuals and their employers may contribute to these savings vehicles on a voluntary basis.

In addition to saving through the retirement income system, Canadians may also choose to draw upon other financial and non-financial assets for retirement income. These include, for example, financial assets held outside of tax-assisted registered plans, housing equity, and small business equity.

Let me say a few more words about the current Canada pension plan. The CPP is a contributory public pension plan that provides a basic level of earnings replacement. With these revisions, as I have said before, we would see modest increases gradually over the course of a number of years at a pace that most hard-working Canadians would be able to absorb.

Let me say a few more words about why it is that we are enhancing the CPP. As we have looked closely at the situation of Canadians as they approach their retirement, we understand that middle-class Canadians are working harder and harder. The Department of Finance has examined whether families nearing retirement are adequately prepared for retirement, based on household income and wealth data from the 2012 Survey of Financial Security. Families are considered to be at risk of under-saving for retirement if their projected after-tax income at retirement does not replace at least 60% of their pre-retirement after-tax family income.

Although Canada's retirement income system has served many Canadians well, the Department of Finance has estimated that almost 24% of families nearing retirement age are at risk of not having adequate income in retirement to maintain their standard of living. This suggests that roughly 1.1 million families approaching retirement age will not have enough money to maintain their standard of living when they retire; hence the enhancements.

I will just take my last few moments to indicate to the House that recently the Minister of Finance had the occasion to come to my riding of Eglinton—Lawrence to meet with my constituents to speak personally about this historic achievement. What was most distinguishing about this visit was that we visited with constituents who are on either side of the age continuum. We visited first with seniors to speak about enhancements to the old age security program and to the GIS program. Then we went to visit with high school students at Lawrence Park Collegiate Institute.

It is truly for them where the focus of this program lies, which is the future, to provide retirement security not only for present day seniors but also for hard-working young Canadians, and I am proud to say that by passing Bill C-26 we will have accomplished that goal. I urge all of my colleagues to support it.

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

Mr. Speaker, my colleague talked about enhancing the retirement benefits for seniors, but for them to actually have retirement benefits they have to have a job to contribute into CPP or their retirement plan. The Department of Finance, to which the government is listening for advice, or should be listening, indicates very clearly in its analysis of the bill that it would reduce employment by 0.04% to 0.07%. That is 1,050 jobs per year over 10 years, 10,000-plus jobs lost. How can these people who do not have a job ever hope to retire with a meaningful pension if they have never been able to pay into one?

[Marco Mendicino, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, my hon. colleague works hard on behalf of his constituents and brings informed debate to the House. Let me say unequivocally that this government is a government that believes in creating jobs. We believe in creating jobs by supporting Canadians with tax cuts for nine million Canadians. It was an unfortunate and regrettable occasion when my friends across the aisle did not support us in our first measure. We wanted to provide tax relief. My friends across the way often talk about how providing tax relief creates jobs. That was the first thing that we did—

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

Raised taxes on small businesses—

[Marco Mendicino, Liberal, Eglinton—Lawrence, ON]

We did not, as a matter of fact, Mr. Speaker. I see my hon. colleagues are getting excited. It is perhaps because they agree with all of what I am saying.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Speaker, I want to draw my colleague's attention to the glaring oversight that is present in the bill, and I am sure he is already aware of it: the fact that the bill does not include the dropout provisions for child-rearing and for disabilities. When we first brought this up, we got non-answers from the government, and then finally we had an acknowledgement from the President of the Treasury Board that there indeed was a problem.

With such a glaring oversight in the bill, why is his government shutting down debate on the bill, and why are they ramming it through before we have had the chance to properly fix the bill?

[Marco Mendicino, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, we are not shutting down debate on the bill. As a matter of fact, there are 55 sitting days between September and December. We have allocated a substantial amount of that time for debate on the bill. We have heard from more than 70 members on the opposition side. We continue to listen for new arguments, which we have yet to hear, but I am quite proud to say that we have had a robust debate. We will continue to have a robust debate, and I look forward to the contributions from the opposition as to how we can continue to enhance long-term retirement security; and it begins by supporting Bill C-26.

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

Mr. Speaker, it is amazing that such a nice guy could say such ridiculous things. He knows that the Liberals have increased virtually every single tax there is for businesses. I want to ask a simple question about this. He says it is about the present, but he knows that this will not impact present seniors. He says it is about the future, but he knows and businesses are telling us that this would reduce long-term GDP, reduce the health of the economy.

If he wants to help people save for retirement, why not empower them through the tax reductions and savings vehicles that we proposed, which would create jobs and help people save for their retirement, rather than what he is proposing, which would kill jobs and, I would argue, certainly not help people save for retirement and, in any event, make it harder for them to do so on their own without government control.

[Marco Mendicino, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, in the spirit of bipartisanship, I agree with the part about my being a rather nice colleague. I have to disagree with everything else my colleague said, and he knows why.

That is because this government did pass a tax cut for nine million Canadians. We created a Canada child benefit, which will benefit nine out of 10 Canadian families. We have an innovation strategy, which will create jobs for youth. We have implemented retirement security, which will benefit seniors today and benefit young Canadians tomorrow. I am proud of all of the work this government is doing, and we will continue to do so. I look forward to the day that my hon. colleague sees the light and starts to support some of the measures on this side of the House.

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

Mr. Speaker, I am very proud to participate in this debate as the representative of Timmins—James Bay. This discussion on improving the retirement system is very important for our country. Canada is obviously facing a crisis with regard to financial insecurity in retirement because many Canadians have not saved enough to maintain their lifestyle in retirement.

The NDP is prepared to work with the government to enhance the plan, but I am troubled by the government's decision to limit debate because there are clearly a number of problems with this bill. I am particularly concerned about the fact that young women and people with disabilities will be excluded from the enhancements in this bill. This could have a major impact, particularly for women who depend on the drop-out provision to be able to raise their children and who currently receive much lower CPP benefits on average.

I remember that in 1977, prime minister Pierre Elliott Trudeau promised that young women would be included in the CPP reform of the day. However, the new Prime Minister forgot that promise. This is not how a feminist government should behave. The NDP will work to change this situation and stand up for the interests of young workers, particularly young female workers.

My grandfather, Charlie Angus, never had a pension. He died on the shop floor of the Hollinger mine. He was 68 years old. In those days, people worked until they died. My grandmother lived upstairs in our little house. There were three generations of us living in that small house. I remember her saying, when she received her Canada pension cheque every month, “The NDP fought for me to get this”.

At that time, of course, the Canada pension was limited. Seniors tended to live with their families. At that time we had a growing, robust private pension plan that was starting to really change the quality of life for Canadians. My father was 42 years old when he finally joined the middle class. He saved all of his money so that when he died my mother, who was a secretary, would be able to live a good quality of life. She is able to live a good quality of life because of their savings and their pensions.

Our younger generation does not have that same stability. Younger workers tell me about the triumvirate of insecurity that is facing them now. They are coming out of school $60,000 and $70,000 in debt without the possibility of paying it off even at today's interest rate. They talk to me about housing, especially in urban areas, and the incredibly high prices they have to pay while trying to pay off their student debt. Then of course, there is the rising precarious nature of work, with more and more people working on contract.

My Conservative colleagues are always talking about letting people choose how they want to save their money. They talk about RRSPs and everything else. That is great if people have money. Conservatives look after their friends, so they tend not to understand what it is like. If contract workers put a bit of money aside and then find themselves in between jobs, they have to eat into those savings. A good friend of mine says people in Toronto are one bike accident away from poverty because they are living in the perpetual cycle of contract work.

As a nation we have to find a way to start changing this situation. I am certainly pleased to see that the government is willing to address the fact that CPP has not kept up and that the vast majority of people are not even getting the maximum contributions. Even if they did get the maximum contributions, it is not enough to live on.

I am concerned about the exclusion of the dropout provisions in this legislation, which would leave out, in particular, young women and people with disabilities. In 1977, then prime minister Trudeau, the elder, when his government was reforming CPP, talked about the importance of making sure to protect the interests of women who stepped outside the workforce to raise children. Young women are already enormously at disadvantage in work. Men tend to get promoted, because it is known that women will take time out in childbearing years.

It affects her overall income. We need to protect their pension contributions, especially as more and more women, at that age, are living alone. They need that support. We are seeing that 30% of women are now living in poverty. It is increasing year by year. Yet, only 4.5% of women are able even to get the maximum CPP payment, and only 18% of men get it.

This is a system that should work, but is clearly not working. What does that mean? I see people in my riding affected by this. I recently spoke to a man who is 68 years old and is going back to work underground in a hard rock mine because he does not have enough for him and his wife to live on.

We need to look at dealing with this. I am concerned that the government has chosen to ignore the issue of the dropout provisions. This is something we can fix in the House. I am very disturbed that the government has shut down debate on this.

To hear the finance minister tell us he is somehow at a stalemate in the House is shocking. It shows a dismissive arrogance. I suppose that maybe at a certain point, members of Parliament are going to have to pay $1,500 and go to the CEO of Shaw or Rogers or some other company to meet with the finance minister one on one to share our concerns.

It is during debate in the House that ordinary people get to talk to the finance minister. For him to say there is a stalemate on this issue is absurd. New Democrats, particularly my wonderful colleague, the member for Hamilton Mountain, have brought forward ideas on how we can fix this. Leaving young women behind is not a feminist action by a Prime Minister who claims to be a feminist.

We see a government that believes it can run on slogans, selfies, and Hallmark card political aphorisms, but within the House we have to be able to find ways to work together to address problems. This is not about a weakness in the government. For any government that brings forward legislation, there will be problems. The role of the House of Commons is to suggest how we can fix these.

Fixing these dropout provisions for people with disabilities and young mothers is a way of making this a more progressive response. Is it enough? No, it is certainly not enough. The pension crisis and the pension insecurity in this country is a very serious issue. We have to start dealing with issues at the ground level of student debt. We have to deal with issues of social housing. We have to deal with issues of the clawbacks to the guaranteed income supplement for senior citizens. We have to talk about the number of people who cannot pay for their dental work.

However, that is an ongoing conversation we can have. What we need to talk about right now is the CPP, which is clearly insufficient to meet the needs of 2016 and the next generation of workers. We also need to say that, yes, this does something right, but it is also doing something very wrong.

It is penalizing young women who will be stepping out of the workforce to have children. When the government does that, it will be putting in place a systemic injustice for young mothers who, when they grow to retirement age in coming years, will have suffered more in terms of their earnings. If we look at it now, we can see the trajectory with 30% of women retiring in poverty today. We should be trying to diminish that level of poverty, not augmenting it when it is a clear problem that can be fixed.

I am worried about my colleagues on the other side getting very dismissive about debate, getting a little arrogant—

[The Deputy Speaker, Bruce Stanton]

Order.

My apologies to the hon. member for Timmins—James Bay. We are not done yet. We still have another minute and a half. It is way too noisy in the House.

Order, order. It is way too noisy in the House. We still have a minute and a half left for the hon. member for Timmins—James Bay. I appreciate that we are just before members' statements and question period, but there is just way too much noise. I could barely hear the hon. member. The hon. member for Timmins—James Bay does have the floor. He has a minute and a half left. We will go to him now.

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

Mr. Speaker, I have enormous respect for you. I was worried that my hon. colleagues were not listening just as I was getting to the real point.

The real point today has been fascinating. I have seen my hon. Conservative colleagues invoking the poor. We know the Conservatives are in trouble when they start to say how much they love the poor. I am seeing my hon. colleagues on the Liberal side saying they are feminists while they are leaving young mothers behind.

We can certainly do better than this. We need to work together to fix a flawed bill so we can go back to Canadians and say that in the House we can actually make positive change for the better.

The government is shutting down debate and saying it is somehow at a stalemate just because people are exposing some of the bogus lines its members are coming up with. The government's argument is not credible. It is certainly not how we need to move forward in 2016.

As always, Mr. Speaker, you have my greatest respect.