Bill C-26 (Historical)

An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act

Part 1 of this enactment amends the Canada Pension Plan to, among other things,
(a) increase the amount of the retirement pension, as well as the survivor’s and disability pensions and the post-retirement benefit, subject to the amount of additional contributions made and the number of years over which those contributions are made;
(b) increase the maximum level of pensionable earnings by 14% as of 2025;
(c) provide for the making of additional contributions, beginning in 2019;
(d) provide for the creation of the Additional Canada Pension Plan Account and the accounting of funds in relation to it; and
(e) include the additional contributions and increased benefits in the financial review provisions of the Act and authorize the Governor in Council to make regulations in relation to those provisions.
This Part also amends the Canada Pension Plan Investment Board Act to provide for the transfer of funds between the Investment Board and the Additional Canada Pension Plan Account and to provide for the preparation of financial statements in relation to amounts managed by the Investment Board in relation to the additional contributions and increased benefits.
Part 2 makes related amendments to the Income Tax Act to increase the Working Income Tax Benefit and to provide a deduction for additional employee contributions.

Canada Pension Plan

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, I thank my colleague, who has just given a very good demonstration and a very good speech on what motivates the official opposition to oppose Bill C-26.

During the previous speech, our government colleague from Winnipeg North said that the Conservatives were, to use his words, “out of touch” with Bill C-26.

We are indeed out of touch because Bill C-26 is totally out of touch with seniors and the people it is supposedly designed to help. In fact, it will be 40 years before Bill C-26 produces any results. The results will not come right away.

The government is in such a hurry to pass a bill that will have an impact 40 years from now that we have once again been presented today with a time allocation motion. In tabling yet another time allocation motion to get its legislative agenda through, the government is demonstrating its incompetence. It is also demonstrating a real lack of respect for parliamentary procedure and, ultimately, for Canadians. The government continues to try to prevent members from participating in the proceedings of the House of Commons and from representing their constituents in this place.

It was well put, was it not? Those were the words of the member for Winnipeg North. He said them when he was in the opposition and the government tabled time allocation motions. This member talks a good deal in the House, so much so that he seems to forget what he said in the previous parliament. Today, what used to be good for Peter is no longer good for Paul. That is what it looks like.

Regardless of what was said by the member for Winnipeg North, we must remember that this government was elected on a loud and clear affirmation that it would be a different government. It is succeeding, because it will probably become the government that has reneged the most on its promises in the entire history of the Parliament of Canada. That is where this Liberal government is headed.

First of all, this government will impose a Liberal tax on carbon, which is going to be very expensive, in addition to costing thousands of jobs in companies of every sector. Despite having committed to reducing corporate income taxes from 10.5% to 9%, this government does not seem to want to act on or keep that promise—not in the slightest.

The government had promised just a small deficit of $10 billion, as if $10 billion could be a small deficit. It was already a very big deficit, and we are now being told that it will not be a very big deficit of $10 billion, but rather an enormous deficit of $30 billion. What is more, the finance minister is unable to tell us when we will get back to a balanced budget.

With Bill C-26, not only has the government enticed seniors with visions of their pension plan being enhanced now, but it has also made them believe that it has their own good at heart. Their own good and their own property, which the Liberals have gone after so they can administer it themselves. The government is giving them nothing right now, since it will be 40 years before the system works.

In a document released by his office entitled “Open and Accountable Government”, the Prime Minister himself has laid down certain ethical rules and rules on gaining access to ministers in order to represent any views. This is known as preferential access, and this government is very clear on this matter: there must be no preferential access, or presumption of preferential access, to ministers.

Unfortunately, what we have seen from the start is that the Prime Minister himself is breaking his own rules. I understand that seniors unfortunately do not have the money required to go and meet the members of this government in order to present their views, for it seems that is the way to get responses and results. That is the new Liberal tax, the tax on meetings with ministers. That is what one might call this new policy, this new method of getting what one wants from the government.

Let us return to Bill C-26. Seniors were promised that the Canada pension plan would be enhanced. That promise has been kept, but we have to read between the lines, as we have to do every time the government presents us with something. The reality is that this measure will take full effect not in two, five, 10 or 20 years, but rather in 40 years. In 40 years, I will be 90 years old. Life being what it is, many of my colleagues will no longer be here, like most of the seniors who are expecting an increase to their pension plan.

In the 2016 fall economic statement, the government laid out “a plan for middle class progress”. In that program, we read about Maya, an example of a Canada pension plan success story. To reach people more effectively, the government decided to use concrete examples. According to this document, Maya is a young graphic designer who is working hard to establish herself in her field. She earns $55,000 a year, and thanks to the CPP enhancement announced in Bill C-26, in about 40 years, when she retires, Maya could receive $17,500 per year.

In other words, since Maya will have benefited from an increased Canada pension plan and she will have been told not to save, because the CPP would do that for her, once she has worked all her life and contributed to our economy, she will receive $17,500 per year. Maya is a success story in the eyes of the Liberal government, but in fact she is an example of Liberal failure.

What Maya is being told is that the government will manage her retirement savings for her and enhance the pension plan, and thanks to the government, instead of earning $55,000 a year when she retires, she will earn $17,500 a year. They say that will afford her a decent living and that this is an example of a Liberal success story. On the contrary, it is a failure caused by their desire to manage every aspect of people's lives.

Consequently, when we see the term “success story” in the government’s fall economic statement 2016, that is to be taken with a grain of salt. If people follow Maya’s example, in 40 years young hard-working middle-class Canadians are going to have difficulty making ends meet, because they will have put their entire fate in the hands of the government, even though it is common knowledge that no one is in a better position than we ourselves to manage our own money.

Bill C-26 also wants to increase workers’ current contributions to the Canada pension plan. At present, that plan takes 9.9% of our income, and this bill will increase that rate to 11.9%. In clear terms, that means that the average worker is going to pay up to $1,000 more every year. That means an additional expense of $1,000 per employee for every small business.

Despite all that, a study by the government’s own finance department shows that these increases would have harmful impacts on all economic vectors and not just on one small component. It predicts a drop in employment, gross domestic product, private investment, disposable income, and above all, personal savings, of which I have spoken from the beginning.

Those, then, are the consequences of Bill C-26. In addition to taking $1,000 more from people’s pockets and imposing on business people an additional burden of $1,000 per employee, this bill is going to affect the economy, job creation and savings. Finally, it is going to compromise wealth creation in Canada. That is what we are denouncing.

I could talk about the government’s position on plenty of other things, but I must conclude by saying that we are going to object to Bill C-26.

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

Madam Speaker, I was very much intrigued by the member making reference to the days when I was in opposition. I can assure the member, when I was in opposition one of the things I talked about was how important time allocation was as a tool in order to get government agenda moving forward. I even acknowledged that while I was in opposition, I must say.

I am sure he would concede that the Conservative Party here in the House of Commons has made the decision that it wants to stop this bill. It is going to be voting against the bill. It does not think it is a good idea, even though the vast majority of Canadians, all the different provincial governments, and even the New Democrats and the Green Party are all saying yes, that this is a bill we should be voting in favour of.

The Conservatives, who have lost touch with Canadians, I must say, have decided to oppose this legislation. They are prepared to talk and talk if they believe it will kill the bill.

Does the member not agree that the Conservative Party has made a poor decision to vote against this, because it seems to be the only entity in the land that has seen fit to do so?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, when the hon. member says official opposition MPs talk too much despite being the member who has uttered the most words in this place since we were elected to this 42nd Parliament, that leaves an odd taste in my mouth. The member for Winnipeg North himself has said that the government's use of time allocation illustrates its contempt for the democratic process, in all cases—no ifs, ands or buts. Those are his own words.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Madam Speaker, I am pleased to ask my colleague a question like I did this morning on Twitter, where he said the same thing. He said, “Ninth time allocation motion. How shameful.” Actually, he used the term “gag order”, but whatever term was used, he still criticized this ninth time allocation motion by saying it was shameful and that the government lacked transparency.

I therefore reminded him that, in the past, his own government imposed over 100 time allocation motions. I asked him if he thought the current government would break that record, and his answer seemed to imply that the Liberals were well on their way to doing so. In any case, at the current rate, this government will not beat the previous government's record.

Can my colleague explain to the House why the Conservatives are now criticizing the use of time allocation motions when the previous Conservative government used time allocation over 100 times?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, I would urge my hon. colleague, for whom I have a great deal of respect, to reread my tweet, because all I said was, “Ninth gag order by the Liberal government in less than a year. So much for the promised transparency”.

Did I say it was shameful? Did I say anything other than, “So much for transparency”? No, I did not. Members wishing to quote somebody in the House should make sure to quote them properly.

The point I am making is that the government was elected on a promise to do things differently; yet, it jumped at the first opportunity to silence the opposition with a time allocation motion.

[Sylvie Boucher, Conservative, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Madam Speaker, I thank my colleague for his eloquent speech. Earlier, he talked about a young woman who would collect $17,000 in 40 years. That is pretty much peanuts.

Can he explain why the government is in such a hurry to pass this budget?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, the enhanced plan will benefit people in 40 years, but they will be taxed now. This government wants to take taxpayers' money now and not give them anything back for 40 years.

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Madam Speaker, I rise today to speak somewhat in support of Bill C-26, though New Democrats have some serious concerns and amendments that we would like to once again raise. It is unfortunate that this debate is happening within the framework of the government once again invoking time allocation, which is shutting down debate. New Democrats have identified a serious error in this legislation. We wish the Liberals had acted on our suggestions to amend and that we had more time to discuss why they are reluctant. However, I will start with the positive.

Bill C-26 incorporates the recent agreement reached with the provinces to enhance Canada pension plan benefits. It is a very important step in improving retirement security for young Canadians and we congratulate everybody, especially our friends in the labour movement who worked very long and hard to lay the groundwork for this agreement. This is a success.

When fully implemented, the new CPP expansion would replace 33% of pre-retirement income. That is up from the current 25%. This action is needed. Retirement security is reaching crisis levels. Many Canadians do not have adequate financial security to maintain their lifestyles upon retirement, and this is particularly fuelled by the erosion of workplace pension plans, to the point that six in 10 working Canadians have no workplace pensions.

New Democrats have fought consistently for increases to the CPP, old age security, and the guaranteed income supplement. This bill would benefit a whole new generation of workers entering the workforce, but more is needed. This bill does little to alleviate the retirement income crisis of those now approaching retirement and the full effect of the changes would not be felt for 49 years.

Much more needs to be done right now to help lift seniors out of poverty and to help them live with the dignity they deserve. There are high housing costs, high drug costs, the clawback of the guaranteed income supplement, and the indexing of pensions. New Democrats want the Liberal government to keep its promise to introduce a new seniors price index, to make sure that old age security and the guaranteed income supplement keep up with rising costs and, in particular, to recognize that single elderly women are particularly living in poverty in this country, which is shameful.

Here is the big mistake in this bill. Bill C-26 does not contain the child-rearing dropout provisions that exist in the current CPP, so that parents, mostly women, are not penalized for time taken out of the workforce to raise children. The Liberal bill also fails to replicate a similar existing dropout provision for people who receive CPP disability benefits.

This is how the CPP already works in this regard. The benefits that people receive are based on an average of earnings from the time people are 18 until they retire. To accommodate periods where people may have low or zero incomes, the plan now allows for the lowest eight years of earnings to be dropped from the calculation, and that exemption is referred to as a dropout. That rule applies to everyone. Everyone who now qualifies for that will continue to. They should be assured that nothing will change for people already in this category.

Right now, on top of this basic exemption, there are two other specific dropouts. One is for disability, so that people receiving disability benefits are allowed to drop up to eight years out of their calculations. The other dropout is for child-rearing, where people can drop up to eight years, while they were bringing up their children and their income was reduced or zero, from the calculations of their benefits. However, in the new plan that we are debating today, these dropouts would simply apply to the calculation related to base benefits, not to the calculations of the additional or enhanced benefits.

The original dropout provision for child-rearing was introduced with much fanfare in 1977 by the government of Pierre Trudeau. The Liberal government of the day included this line in its 1977 throne speech:

You will be asked to consider amendments to the Canada Pension Plan which would further recognize the value of the contribution made to the family and society by both marriage partners, in the event that one remains at home to raise children while their partner works outside the home....

My friend, Iris Taylor, from Nanaimo described this. She said, “My sister Diane Wiebe along with her husband Art, raised three wonderful, hard-working, well-educated taxpayers. Diane was a stay-at-home mom until the youngest left home. Neither parents had jobs with pensions, so when they retired they solely lived on savings, CPP, and OAS. In fact, both worked part-time to cover living expenses until their passing at 70 years. My sister was always appreciative of CPP factoring in her years at home with children into her CPP pension payment.”

The effect of losing this could be significant, especially for women who are overwhelmingly the ones who applied for the child-rearing dropout and presently receive a much lower average CPP benefit. The NDP ask was that the government restore it for the new CPP enhancements and that it do it now. We have debated every day in the House, asking the government if it would work with us to get this fixed. My colleague from Hamilton Mountain basically laid out all the groundwork at committee. All the Liberals needed to do was pick it up and run with it, but they chose not to.

In the House, we invited the government to amend its own bill. At committee, the New Democrats moved two motions to include the dropout provisions for women and those living with disabilities. However, the Liberals were not reasonable in looking at our amendments and ruled them out of order. When we tried to make a motion to have the committee recommend to the House that the provisions be put into the bill, the Liberals moved to adjourn debate. They kind of cut and run. It was very strange.

In case the Liberals might try to cite cost as a factor in their decision to omit the dropout provisions from the new enhanced benefits, our very preliminary calculations show that the cost would be very low. Using available information, it looks like the dropouts might cost each employee and each employer 0.2% of a worker's average salary. That is a very cheap price to pay to provide such an important and significant benefit.

On the other hand, looking at the calculations on Service Canada's website, the failure to fix this program could cost parents significantly. A mother who spent six years raising children would get between $800 to $1,200 less each year than she would otherwise.

Again, we have time allocation on the bill so we are not able to debate this fully. Again, this is inconsistent with previous Liberal positions. Here is what the Minister of Transport was quoted in Hansard in 2012 as saying:

Slowly but surely, Canadians are beginning...to question what the government meant when it promised...to be open, transparent and, most of all, accountable. I believe Canadians are beginning to feel that there is a contradiction between what has been promised and what is actually being done by the government.

This is déjà vu. That was the Liberals talking about the Conservatives, but now this is just how the Liberals are acting. It is very disappointing.

Hammering home again how important this program has been for Canadian women, June Ross from Nanaimo wrote to me and said, “The credit for my child-rearing years was seven years. That credit helped my pension to increase. ln my view, the child-rearing credit should have also been applicable to the old age pension as well. The woman who did not work outside the home and therefore was eligible for only the old age pension is punished yet again. As you are no doubt aware...we women have lesser pensions than our male counterparts because our work outside the home had very little value placed on it. Our hourly wages were very low...therefore, our pensions are much lower”.

Again, the Prime Minister likes to call himself a feminist, but when we point out that the Liberals' legislation is penalizing young women workers who would qualify for this in the future, they suddenly have nothing to say. The Liberal government should immediately agree to our proposal and live up to its feminist rhetoric. It should amend the bill so future generations of stay-at-home mothers and the disabled are not penalized. Please do the right thing, amend your bill and I will vote in support of it.

[The Assistant Deputy Speaker, Carol Hughes]

I want to remind the member to address the comments to the Chair and to avoid “you” or “your”, so it would be the government.

Questions and comments, the hon. parliamentary secretary to the government House leader.

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

Madam Speaker, I am a bit surprised. I thought the NDP was going to vote in favour of the bill. If that is not the case, it would be unfortunate.

I think the member has forgotten, or has chosen not to raise the issue, the importance of working with our provinces. I sat in opposition for many years, waiting for the Harper government to do something on the CPP. For the first time in many years, we now have a government that is demonstrating leadership. It brought all the provinces together and an agreement was achieved. Then we brought forward the legislation.

I understood the NDP was going to support it. There is an idea that there are some changes that would ultimately improve the bill, but it requires the provinces to come onside. I believe the Minister of Finance indicated that we would be raising this issue with the provincial ministers at the next meeting.

Would the member acknowledge that many different stakeholders have looked forward to this change for many years? Does she not believe it is worthwhile supporting the bill?

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Madam Speaker, I, along with the New Democrats, intend to support the bill. It is important for the country. We have pushed for it much longer than the Liberals have.

My whole presentation is around us trying to work together to correct a flawed bill. We cannot believe that the government intends to leave out disabled workers and stay-at-home mothers in the future. This is why it is extremely discouraging not to talk this through and amend the bill now. Why would the government, when it has taken all this time, want to put forward a flawed bill?

The Liberals should be showing leadership with the provinces and territories. I certainly did not see any media that suggested our provincial and territorial leaders did not want to extend these benefits to stay-at-home mothers and the disabled. Again, the government has shut down debate, so we cannot discuss it.

I will quote the parliamentary secretary in 2015 on time allocation. He said:

The government, by once again relying on a time allocation motion to get its agenda passed, speaks of incompetence. It speaks of a genuine lack of respect for parliamentary procedure and ultimately for Canadians.

I agree with him.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Madam Speaker, I agree that it is a flawed bill. The amendment on the dropout clause being adopted is one idea. I presented an idea a few minutes ago on how we could immediately address the issues for elderly widows by ensuring that when their spouses were deceased, they would get the CPP benefit. Would the member support an amendment like that?

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Madam Speaker, I did not hear the details of my colleague's proposal, but we absolutely have an epidemic of poverty among elderly women in our country. There are a number of ways to get at that, and I have named some of them in my speech. Certainly, advocacy organizations, whether around basic annual income, and a little more money in the pockets of seniors would address food insecurity and help with the cost of prescription drugs.

We would like to see the government take leadership on a multitude of fronts. If we make elderly women better off, then we would save money in health care and all kinds of places. It is the right thing to do.

[François Choquette, NDP, Drummond, QC]

Madam Speaker, my colleague's speech was excellent. She pointed out that too many seniors are still living in poverty, unfortunately.

Only 4.5% of the women who collect Canada pension plan benefits receive the maximum benefit, whereas 18% of the men do. That is why measures like those we have today to improve women's quality of life are essential.

Why are the Liberals rejecting our amendments?

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Madam Speaker, there were a lot of places where the difference in the New Democrat platform and the Liberal platform were unrecognizable. We were certainly pulling in the same direction. We had hope for our constructive proposals for amendment. Our initial belief was that the Liberals must have left these pieces out in error. We have tried to be as constructive as we can. We want the Liberals to fix these losses. If they did, it would certainly be better for women of the future.