This bill is from the 42nd Parliament, 1st session, which ended in September 2019.
Bill Morneau Liberal
This bill has received Royal Assent and is now law.
This is from the published bill. The Library of Parliament has also written a full legislative summary of the bill.
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.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from Parliament. You can also read the full text of the bill.
Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-26s:
The House resumed consideration of Bill C-26, an act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act, as reported (without amendment) from the committee, and of the motions in Group No. 1.
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Mr. Speaker, it is a pleasure to rise in this House today to speak about Bill C-26. Obviously, there are philosophical differences that the government has with the official opposition. As always, I try to add something to the debate; hopefully, something that stimulates a better understanding of both sides. This place is Parliament. We are here to discuss various points of view and, at the end, there will be a logical conclusion; one that obviously serves the country. Democracy is a great thing, but it is important that people are heard.
I would like to suggest, before I get to the actual business at hand, that the government has quite a big job ahead of it, particularly as many of its policies are going to require economic growth.
As Canadians, we know we are getting older. We are living longer. Obviously, things like pension reform are always important. It is something the previous government tried to do, albeit by different means—and I will be looping back to that in just a moment.
First, I would like to again go back to the point that, if there were a stronger economy, many of the concerns we have heard from small business owners with respect to adding more payroll taxes might have been alleviated.
As we all know, it is tougher and tougher to run a business when the economy is not producing well. Of course, all of us here would like to see more jobs in our ridings. We want to see people being able to provide for their families. However, that is not always the case, particularly if the economy is stagnating.
We have seen Mr. Poloz, the governor of the Bank of Canada, downgrade his expectations for Canada's growth, on behalf of the Bank of Canada.
I think it is important that we just acknowledge that as being a fact because, as the PBO has said, the job reports are not coming in as strong as we would like, and neither is the economy.
If we are going to ask people to pay more, whether it is into a system 40 years from now or into the coffers of the government today, we always have to remember that there is only one taxpayer. If people are struggling to pay their mortgages, if people are struggling to get into the market, and if people are struggling to pay their bills and suddenly they have less money at the end of the day, they will not give to charities. They will not put money aside for savings for their children as easily because there just is not the money there.
Whether we are talking about carbon taxes, whether we are talking about CPP increases, whether we are talking about perhaps—and I have heard in the pre-budget consultations at the finance committee that some members are thinking of a sugary drinks tax or perhaps some other taxes that we have not yet thought of—at the end of the day, there is only one taxpayer, and we always have to keep in mind the ability to pay for it.
We heard from the Macdonald-Laurier Institute during the study of Bill C-26 at committee, from an economist named Mr. Philip Cross. Mr. Cross simply pointed out what we know to be true: that while there are some concerns that certain segments of our society are not saving enough—and that is usually higher earners who are just choosing not to save, and then there is also a number of, usually, single female seniors who, because they did not participate in the labour market and have lived long enough to get to a point where now they do not have things like Canada pension plan because they did not contribute as much—those measures are not there for them.
As we have seen in the previous budget the government put forward, there was some allocation to that. In fact, in the previous election, many of us on the Conservative side ran on a pledge that we should introduce a tax credit specifically for single or widowed seniors. That was all, again, to make that targeted toward those people who are greatest in need.
Mr. Cross said that these things can be addressed through targeted programs and they can be addressed through other voluntary means. There is not a savings crisis now or predicted in the future in Canada, which is something we should be proud of.
We have a multi-pillar system. Conservatives believe, unlike the NDP and the Liberals, that there should be greater choice.
Again, we have heard time and time again from the Liberal side that the Conservatives do not care about pensions or pensioners, which is not true. We just believe that people should be able to voluntarily put their money into an account that would be there to support them, and it should be of their choosing. It should not be by a forced government program.
Again, I would go back to those many seniors who visited me. They and their spouses contributed the maximum amount to the CPP but their spouses died early, so now they, the surviving spouse, are not able to access the money they expected would be available to them, that they had socked away through the CPP system, because they are already receiving the maximum CPP allowed for an individual. These individuals get no survivor or spousal benefit. If, instead of putting that money in a government-mandated system, that same couple had put it in a tax-free savings account or an RRSP that eventually became a RRIF, and one partner were to die, the other one would have immediate access to that capital. We would all expect that.
The Macdonald-Laurier Institute said we should really be calling the argument what it is. There is an ideological agenda by the government. Just remember, “ideological” is not a dirty word but it is something that we need to acknowledge. We need to acknowledge it when we see the world presented in a certain way to come up with a certain solution. The Ontario Liberals ran on a pledge to create their own Ontario retirement pension plan that would be enormously costly and not in fact complement the federal CPP but would increase costs, with fewer benefits for people. The Ontario Liberals and the federal Liberals said they would fix it by going to the other provinces and basically eschewing any other efforts.
Mr. Speaker, I know you do not hail from Ontario, but I would remind you that it is important to notice the following. When we talked about pooled registered pension plans as a means for having voluntary portable pensions that anyone could take anywhere and employers could voluntarily put money towards if they wanted to participate, Ontario, unlike British Columbia, Alberta, and Saskatchewan, did not go ahead with those. I would encourage the Province of Ontario that, despite this piece of legislation going through, there is still more to be done and that pooled registered pension plans were something that all finance ministers across this great country agreed to. That does not happen often.
I just want to take a minute to step back and talk about young people. We had witnesses at committee who said they understood that most seniors would not benefit from this bill. We are thinking about future generations, and that is an important consideration. But we see that young people are now going on to higher education with higher bills and graduating with higher bills. They are being asked to pay those student loans back while trying to get a job. This is a very difficult time. Now they are being told they should get used to precarious work. The reason work is precarious is that employers do not have confidence.
The Liberals have to understand that when they tell people they will be adding a carbon tax and payroll taxes, those taxes make it less attractive for people who want to hire, especially if they hear that the government and the Bank of Canada say they are downgrading the Government of Canada's economic outlook. This again makes it more difficult for businesses to hire young people. Then the Liberals are telling young people that even if they can pay their student loans, even if they can squirrel some money aside, they are going to have less take-home money that could help them buy a home. Of course, the new rules by the department of finance for mortgage qualification make owning a home very difficult.
To sum up everything I have said, the government is in a real pickle on this one, simply because it wants to have an agenda in which it is doing a lot of things that are probably well-intentioned, but in an environment that does not sustain them. At the end of the day, we are asking more of that one taxpayer, and remember there is only one taxpayer, to put up more than he or she is able to bear. If we do that, we risk what I have mentioned. It is the reason I oppose this measure at this time.
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Mr. Speaker, my hon. colleague and I sit together on the finance committee. In a time when defined benefit pension plans are going away and retirement savings are so important for Canadians and many generations to come, when the CPP is portable, fully indexed, stable, and secure and our government has reached this historic agreement with the provinces, why would the hon. member's colleagues and his party not join with us in celebrating this agreement and working together to ensure that this agreement comes to fruition, which it will, so our children would have good, dignified retirement security to look forward to?
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Mr. Speaker, I do agree that any time we can get all the provinces and territories to agree, it should be celebrated. Actually, I should not say “all the provinces and territories”, because Quebec obviously has its own system.
Again, I would go back to the point that the government is ramping up the CPP, which means that higher costs will be passed on to employers at a time when they have less to give.
If the government had a crystal ball, it might know that no one saw the economic and financial crisis of 2007-08. What happens if there is another recession, and this measure kicks in and causes even greater harm?
We are raising legitimate concerns. I do appreciate the member's contributions on the finance committee. However, we do have concerns about the government going ahead with a plan when there is so much uncertainty, and sending the wrong signal.
Again I go back to the point that the government should be focused on growth. Unfortunately, it is focused on redistribution.
Pierre-Luc Dusseault NDP Sherbrooke, QC
Mr. Speaker, I have a question for my Conservative colleague whose definition of CPP, like that of many of his colleagues, seems to differ from ours. He seems to be saying that it is a tax, while we believe it is an investment, as do experts and many others.
When we pay 5% on our purchases at Canadian Tire, that is money that we will never get back. However, the money deducted from our pay for Canada pension plan contributions still belongs to us. That money does not disappear. It belongs to the taxpayers who invested in the plan and they will get it back when they retire.
Can my colleague clarify the Conservative position? Does he really believe it is a tax, or does he believe it is an investment that allows taxpayers to have a pension when they retire?
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Mr. Speaker, I go back to my comment about ideological filters.
Obviously, the NDP seem to be much more open to using government-imposed measures. Basically, the CPP mandates that people have to contribute to it. Let us not forget that employers have to pay that tax as part of the compulsive nature of this bill.
People may get money back in the future for future consumption. I am not necessarily saying that is a bad thing. However, I do think we should explore other voluntarily methods prior to this.
We did have an agreement on pooled registered pension plans, which would have been portable and have offered employers, if they were in a position to do so, the chance to be pay more on a voluntary basis.
Those are the things I would like to see a little more of, and I would like to see a little less government intervention in this area of Canadians' lives.
Marilyn Gladu Conservative Sarnia—Lambton, ON
Mr. Speaker, my hon. colleague mentioned one of the gaps in this current CPP plan, in which elderly women whose husbands have died cannot take advantage of it. That would have been so easy to fix. After all, the husbands paid in $1,100 that entire time. Why not give that benefit to the spouse? Could the member comment on that?
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Mr. Speaker, the surprising thing is that I have had many constituents contacting me on that very issue. They and their spouse had maxed out their contribution rates to the CPP, then one of them died prematurely, and suddenly the spouse was without that income stream.
Many Canadians would be surprised to know that if they are at the maximum, which I think is around $1,100, they cannot have a survivor benefit. All of them were men. I am not sure why that was. When I tried to see if there were a way for us to deal with that, the previous government said it would try to help through a tax credit. It was something we ran on in the election, and perhaps the government might see it as worthy of endorsement at some point.
Alice Wong Conservative Richmond Centre, BC
Mr. Speaker, I am pleased to rise again to speak to Bill C-26 and the proposed changes to the CPP, as this is not only a very important issue to me personally, but also to my constituents and the very many business owners I have consulted across our country.
The government has failed to recognize the negative impacts this change would have on our economy. The CPP tax hike will take money from the paycheques of hard-working Canadians, put thousands of jobs at risk, and do nothing to help the seniors who need it.
Let me explain what is happening with regard to Bill C-26. The Liberals are encouraging misconceptions that these changes would help our seniors, our youth, and our businesses. This could not be further from the truth. I have heard from small business owners across Canada who have stated that changes to the CPP will mean that they will hire fewer people. They will opt to spread the workload across the current number of employees to offset the increased cost of payroll. When I hear from our job creators and community builders that further increases to payroll costs will mean they will hire fewer workers, it means we must listen. Our economy cannot afford to lose more jobs.
I met with young entrepreneurs in the summer soon after the proposed changes were announced. Already these young leaders saw what the payroll tax would do to their own incomes and employee paycheques. Our young people are struggling to pay off school debt and make ends meet. Reducing the amount of money they are receiving today will only magnify this problem.
We absolutely need to encourage our young people to invest, but let us equip them with long-lasting tools and knowledge that will empower them to save through many different means.
As I mentioned in one of the questions I asked in the House, a study by the Fraser Institute from May 2016 projected the real rate of return for CPP investors to be only 2.1%. It states, “Canadian workers retiring after 2036...can expect a real rate of return of 2.1 percent from the CPP”. This means that the majority of our workforce contributing to the CPP is only making a real rate of return that is barely above inflation. To make matters worse, when they withdraw those CPP funds, they once again will have to pay income tax on them.
Finally, I would like to talk about Canadian seniors. My colleagues know that our seniors are very important to me. As the minister of seniors in the former government, I spent five years working with organizations, health care workers, and hearing from seniors themselves on actions the government needed to take to assist them.
One of the primary ways seniors have chosen to save and the option many have found most helpful is the tax-free savings account. Unfortunately, it has now become very clear that the Liberal government did not consult our seniors when they chose to scale back the TFSA. Now the Liberals claim to be assisting our seniors when the reality is that the proposed changes to the CPP will not provide a single cent to our current seniors.
One common argument for these changes is that they will assist some of our seniors in poverty. These changes will do nothing to reduce seniors' poverty.
In June, a writer of the Financial Post stated:
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.
The writer goes on to explain that fewer than 5% of seniors who fall under the poverty line are those who either are not eligible for old age security or who have not applied for the guaranteed income supplement.
It is exactly for these reasons that when I was the minister for seniors in the Conservative government, I empowered the cities to look after homeless seniors and help them apply for OAS and GIS and to administer the funds for them so that these seniors would have food on their plates and roofs above their heads. With the Liberal government, this good policy has gone.
We know that the CPP is not a means to solve poverty, and we know that TFSAs help our seniors save. Why is the government choosing to do the exact opposite of what our seniors need?
Canada's retirement system is based on three pillars: first, the CPP; then the OAS or GIS; and finally, tax-assisted savings. It is important that each of these pillars is put to Canadians. When we place too much emphasis on one, the system becomes unbalanced and does not effectively serve those who need it.
Canadians are good at saving their money for retirement. McKinsey & Company state that 83% of Canadian households are on track for retirement savings, and the C.D. Howe Institute reports that savings rates have nearly doubled since 1990. What seniors need now is protection from financial abuse, an enhancement of their financial literacy, and the ability to live within their means. What they do not need is a carbon tax, which will increase their cost of living, including heating their homes, buying groceries, and meeting other basic needs.
Let me complete this debate with what I have heard from women entrepreneurs from coast to coast to coast. They want their significant others to be able to share the rewards of their hard work when they retire. A CPP increase will not help them do that. Putting their money into sound investments will.
Young people in Vancouver hope to save enough money to buy their first home. Taking home less money will never enable them to do that.
In summary, the proposed CPP will provide none of the solutions the Liberals claim it will. Instead, our job creators will be forced to hire fewer workers. Our young people will have a harder time paying down debt, and our seniors will continue to be left out of the equation.
I know that members on this side of the House will continue to fight for our job creators and evidence-based policy. I cannot say the same for the members opposite, and I will vote against Bill C-26.
Canada Pension PlanGovernment Orders
November 29th, 2016 / 3:30 p.m.
Winnipeg North Manitoba
Liberal
Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Madam Speaker, I believe that the Conservative Party has lost touch with Canadians in terms of what Canadians expect Parliament to do. They value our pension programs, whether it is the OAS or the GIS.
Today we are talking about the Canada pension plan. When the member across the way decides to be critical of the government on this initiative, she should be aware that this is an agreement we have with all the provinces and territories of all political stripes. It is only the Conservative Party in Ottawa that thinks it is a bad thing.
Why does the member believe that her party is so offside with what Canadians and all other political entities want?
Alice Wong Conservative Richmond Centre, BC
Madam Speaker, what we are doing is not embracing something that is harmful to our economy, harmful to our seniors, and harmful to our young people.
When a policy is drafted, it is not only for the benefit of that specific party but for the benefit of all Canadians. The Liberals have not consulted all the business owners who will be paying into it. They have not considered all the young people who will be paying into it and yet not reaping from it. They have not spoken to seniors, who have told us that this is not exactly what they need.
François Choquette NDP Drummond, QC
Madam Speaker, indeed, what we are talking about today is extremely important. We meet with seniors in our riding offices all the time. They tell us how hard it is to make ends meet on CPP alone. Sadly, those who get CPP only are living in poverty.
The most recent figures show that 30% of single senior women live in poverty. That is totally unacceptable. Unfortunately, it is often women who end up in this situation.
I want to ask my hon. colleague whether she thinks we should be doing something to improve the situation for our seniors who are living in poverty. We cannot stand idly by. We must do something. What does my colleague propose? The Liberal government proposed measures that are weak and flawed, but does my hon. colleague propose that we do nothing at all?
Alice Wong Conservative Richmond Centre, BC
Madam Speaker, this is exactly what I said in my speech. We need to help those seniors who are in poverty. One reason is that some have not even applied. Second, they are not able to administer their own funds. That is why I empowered the cities to look for these seniors, including women who are in great need and are on the poverty line.
Unfortunately, the current government does not even have a minister who can speak on behalf of the women, on behalf of the seniors, who really need the help. That is exactly why we are fighting against Bill C-26, which would not help those women at all.
Marilyn Gladu Conservative Sarnia—Lambton, ON
Madam Speaker, I have a lot of respect for my colleague's opinion in this area, because she was the minister of seniors previously and is now the critic for small business.
I am interested in understanding what impact she sees Bill C-26 having on small business.
Alice Wong Conservative Richmond Centre, BC
Madam Speaker, what small businesses would not like to see right now is a payroll tax hike. There are other taxes the Liberals promised to reduce, like the small business tax, but they did not follow up on their promise. Small businesses are having a tough time paying more taxes, and there is now yet another one.
These job creators are not being given the opportunity to reinvest. We are not giving them opportunities to hire more people. These are our job creators. Bill C-26 simply does not help small business people at all.