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.

Motions in amendment

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Madam Speaker, I thank my colleague for his excellent speech. I would also like to thank him for being so available to the NDP on this file. I know he attended the Standing Committee on Finance meetings.

Some issues should not be up for debate. Unfortunately, some of those issues are. In a little while, my colleague will tell us more about how the new Canada pension plan definition will have an unfair impact on women and people with disabilities.

I would like to give my colleague an opportunity to add to what he said about that.

[Raj Grewal, Liberal, Brampton East, ON]

Madam Speaker, my hon. colleague is a man of towering intellect and has a fierce passion in advocating for his constitutes. Unfortunately, we fundamentally disagree on a lot of items.

Although I appreciate the fact that he thinks I am open to the NDP suggestion, I very much support CPP enhancement. As I have mentioned numerous times throughout this debate, the most important thing is that we are strengthening Canadians' retirement. We are increasing CPP enhancement, and all Canadians across the country will benefit from our plan.

I encourage all members, irrespective of their party ideology, to support this bill.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, on October 6, the current government introduced a flawed bill in the House of Commons, Bill C-26. It did so while being fully aware of the bill's shortcomings. It did so with full knowledge that women and people living with disabilities would be negatively affected. That the bill would omit dropout provisions already in the Canada pension plan to protect women and people living with disabilities seemed to matter very little. Getting a deal done quickly, the PR, and the photo-op were more important. Looking good was more important. Sadly, looking good is more important to the government than sound public policy that protects the rights and needs of all Canadians.

Removing the dropout provision from the CPP was a surprise to many experts who have been working on a pension reform for many years. While testifying at committee, I asked Mark Janson, a pension expert from CUPE national, if he or his union had any indication that the child-rearing or disability dropouts were on the table for CPP expansion. In reply, Mr. Janson said:

...it was a surprise to us to see they were not included. The signed document the finance ministers put out in June and the backgrounder they produced at the time said nothing about this, so it was only when we saw the legislation. During the years of talks we had not heard that this was an item to be discussed and perhaps changed.

When I asked Mr. Hassan Yussuff, president of the Canadian Labour Congress, about the government's plan to omit the dropout provisions, he was very straightforward. He said:

[The] committee has a direct responsibility to amend the bill to fix that problem. This is an affront to women's equality in this country, and it is simply wrong. It was corrected in 1997, and we have no business going back and taking that away from women and people who get disability benefits. However, the department came up with a draft. They've made a fundamental mistake, in my view, and it needs to be fixed. This committee has the responsibility to fix that.

More than half the workforce today is represented by women. To tell them that they are not going to be treated equally as men in the workforce is wrong and this committee has a responsibility. Equally, the department should come back to say that it made a mistake. This will do very little, I think, in terms of the premium increase. It disadvantages two very important groups in this country, and in my view, it was never discussed during the enhancement.

It's fundamentally wrong and given what the government has said about women's equality, I don't think this was intended. It needs to be fixed.

It did not take the NDP long to discover the flaws. At first we wondered if the omission of these critical provisions was an oversight or done on purpose. How could the government leave out provisions designed to protect the well-being of such a large number of Canadians? How could the government leave out provisions originally put into the CPP by the Prime Minister's father after he discovered a major hole in the legislation? We thought that for sure the omission had to be a mistake. However, we have come to find out that it was no mistake at all. We have learned that in the haste to get a deal with the provinces in June, the current government was willing to throw the rights of women and those living with disabilities under the bus. It was a shameful move and, now that they have been exposed, the Liberals should feel ashamed and fix the bill.

I know that many members on the other side of this House realize the government made a mistake. I watch them look down and squirm uncomfortably any time that we raise the deceit in this House or at committee. However, even when they have been exposed and their mistakes are laid bare, the government and all its members still refuse to commit to fixing the bill. Many times, my colleagues and I have stood in this House and asked if the government would fix its flawed bill. For days on end, all we got back were disdain and non-answers. Not one member on the other side of this House would even admit that the bill would trample on the rights of vulnerable Canadians.

We were challenged to take our concerns to committee, so we did. The New Democrats studied the bill and we figured out how to fix it. We developed the language and the clauses needed in the bill to fix the government's mistake. In good faith, we went to committee. We listened to the witnesses, some of whom supported the bill, and some who did not. Many witnesses recognized the flaw in the legislation and urged the committee to put the dropout provisions into the bill.

During the clause-by-clause consideration of the bill, I presented amendments to fix the legislation. My two amendments were all that were needed to put the dropout positions back into the bill. There were two amendments that would restore the protection for women and those living with disability. However, my amendments were ruled out of order. The only way to fix the bill would be to come back to the House and have the minister make the appropriate amendments at that time.

I moved the motion to have the committee consider making these recommendations to the House of Commons. What happened next was shocking and disheartening. The Liberal members on the committee resorted to the lowest form of procedural manoeuvring, and moved and passed the motion to adjourn debate. That meant that a motion to consider fixing the bill could not even be debated or discussed, never mind actually voted on. I could not believe it. It was a clear that a heavy-handed whip had been used. So much for the government of sunny ways, free votes, and the best intentions. It is clear that Canadians who voted for change are receiving nothing but chump change.

A few days later, I was able to bring my motion back to the committee. Again, the Liberal members of the committee proved very clearly that they were not serious about fixing the bill. Instead of even debating my motion, they used another procedural manoeuvre, which guaranteed no immediate fix for the bill. It was shameful and disappointing.

I have mentioned what happened at committee because I want Canadians to know, and I want my constituents to know, that things do not always happen here in Ottawa the way that we think they should. The government had a very easy way of fixing a major flaw in a bill it introduced, a flaw that could affect 14 million Canadian workers. It chose not to. We in the NDP now find ourselves in an awkward position. We plan on supporting the bill, but we are very concerned about whether the CPP will ever be fixed and the necessary dropout provisions included in the legislation.

So far, we have heard from the President of the Treasury Board, who said:

We are aware that more could be done in respect of the dropout provisions for disability and child rearing and, in fact, the Minister of Finance will raise these provisions at the next meeting of provincial and territorial finance ministers in December in the context of a triennial review of the CPP.

The Parliamentary Secretary to the Minister of Finance said:

Our intent is to pass the bill, as is; however, the Minister of Finance will then raise the dropout provisions at the next provincial and territorial finance ministers' meeting in December, in the context of the triennial review of the Canada pension plan.

In my view, these are both weak and non-committal statements. We have heard nothing from the Minister of Finance himself. Is he committed to fixing the legislation? Is he committed to making sure that women and those living with disabilities are not victimized for the mistake in Bill C-26?

No one knows for sure. I am not optimistic. I will believe it when I see it.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Madam Speaker, I have listened to my hon. colleague's concerns with regard to some of the amendments he is proposing. We are not saying we are against them; we are saying that he needs to consult with and work with provinces. If he speaks to his Quebec colleagues, for instance, I am sure they would be against a top-down approach, or maybe he wants to speak to the members who sit behind him. There are about 10 or 12 of them. I am sure they would also be against an Ottawa top-down approach.

I am just wondering whether he has consulted at all with provinces. Have any provinces come on board and said that they support this?

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, I am really surprised at that question. Actually, I am shocked. The Liberals brought in a bill, Bill C-26, that was supposed to enhance the CPP benefits for other people. We know it had to be fixed. They brought in a certain portion of it for one group of Canadians only, and omitted another group of Canadians. It is insulting.

The Liberals knew about it. They had time to fix it. Now they want to blame it on the provinces for not being there and hoping they will be in the future. Fix the bill now.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Madam Speaker, my question follows up on the previous question.

The Liberals are saying that we need to negotiate with the provinces to correct this oversight. The problem is that during the negotiations that took place with the provinces, from my perspective, and I have witnessed federal-provincial negotiations in the past, the improvements that are needed were discussed only in broad strokes. For instance, in this case, we are talking about increasing premiums and enhancing benefits. I would be very surprised if, through those negotiations, everyone would agree on how that provision should be amended, a provision that affects the contribution period, as well as women and people with disabilities.

In creating this legislative measure, the federal government completely ignored the downside of this bill in its current form. Basically, it is now asking the provinces to fix this mistake, even though the federal government's own ineptitude is entirely to blame, in my view.

I would like to hear my colleague's thoughts on that.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, that is a very good question. Was it even talked about with the provinces, was it purposely omitted, or did the Liberals have something at the provincial level, when they met with them, that they were not going to discuss this at all, and they were told they were going to omit it.

I do not know what happened there, but I am really surprised that any province or anyone would try to take away a piece of legislation that has been in effect since 1977 and omit it for people in the future. What is going on is absolutely insane.

They admit they want to make it better and stronger, and they can do it with this piece of legislation. They do not have to go back to the provinces, unless they purposely did it when they had the meetings with the provinces and said they were going to omit it.

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

I am disappointed in the NDP. We have a CPP reform, a historic agreement, which was agreed to with the consensus of provinces, including NDP Alberta. The NDP, as opposed to recognizing the valuable, historic agreement, is trying to focus on an issue that all members are very sympathetic to, but which would require us to go back to the table.

My question for the member is: Does he believe that it is better that we not proceed with the changes and instead go back to the provinces and, hopefully, at some point in the future, come back with an amended piece of legislation, or should we do what has been suggested, that the Minister of Finance take the issue to the premiers?

However, at the very least, let us get this thing passed. It has been decades since we have improved the CPP. Now is the time for us to do it. If we can improve it, the Minister of Finance is committed to doing just that.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, my colleague is asking me if I think we should now just pass Bill C-26 the way it is and hope for something in the future. My question back is: Why was this omitted to begin with? That is the whole problem.

I do not understand what the Liberals are asking. They are doing such a great job for one group of Canadians and not including all Canadians. It is the same thing that happened with their tax deduction. They forgot the group. Why was this omitted? You should make sure it is fixed.

[The Assistant Deputy Speaker, Carol Hughes]

Order, please. First, time is up. Also, I just want to remind the member that he needs to address the Chair and not the individual member.

Resuming debate, the hon. member for Scarborough Centre.

[Salma Zahid, Liberal, Scarborough Centre, ON]

Madam Speaker, it is a privilege to rise in the House today in support of Bill C-26. This is a piece of legislation that would bring peace of mind to millions of Canadians, many of them my constituents, who are worried about their retirement.

With Bill C-26, an act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act, our government is fulfilling its campaign commitment to reform and enhance the Canada pension plan and help Canadians who are having trouble saving for their retirement.

The CPP is a Canadian success story and it is the right way to help Canadians save for retirement in a world that is very different from that of our parents and our grandparents.

There was a time when Canadians would work for one company all of their life and then retire comfortably with a gold watch and a defined benefit pension plan. Complemented by the Canada pension plan, they could be assured of a comfortable and dignified retirement but sadly, those days are no more. They are over.

It is very rare today to find a defined benefit pension plan outside of the public service. Today, due to costs and risks, most companies have moved to a defined contribution pension plan, which shifts the investment risk to the employee and that is if one is lucky enough to be working for a company that offers any kind of pension at all. According to Statistics Canada, in 2014 only 37.9% of employees had a pension plan and that number was trending down.

Then there is the changing nature of work today. A 2014 Workopolis study found that if current trends continue, average Canadians can expect to hold roughly 15 jobs in their careers. Indeed, 51% of people now stay in any one role for less than two years. Some of this is by choice, but some is also by necessity. Contract work is increasingly prevalent and employees are often seeking new challenges and new opportunities.

In short, Canadians can no longer rely on the traditional retirement savings methods. The onus has now shifted to employees, but the data makes it clear that Canadians are having difficulty with this new responsibility.

A report earlier this year from the Broadbent Institute found that only 47% of those aged 55 to 64 have no accrued employer pension benefits and the vast majority are retiring with inadequate retirement savings. Just half have savings that represent less than one year's worth of the resources they need to supplement old age security and the Canada pension plan, and fewer than 20% have the resources needed for five years of retirement.

According to the report, just 15% to 20% of middle-income Canadians retiring without an employer pension plan have saved anywhere near enough for their retirement. Without action, this means seniors are forced to continue working whether their health allows it or not, or are living their retirement in poverty. No Canadian seniors who have worked hard all their lives deserve to retire in poverty.

I understand why Canadians are having difficulty saving for retirement because I have been there myself. First, my husband and I saved to purchase a home in Scarborough, in the expensive greater Toronto housing market. At the same time, we set aside what money we could to put into a registered education savings plan for our two boys to save for their educations. Our first son started at Ryerson University this fall and our second son is not far behind. All along, my husband and I changed jobs and employers two times and have not had the benefit of an employer pension or savings plans.

I am privileged now as a member of Parliament to have access to an employer pension plan. While I can now worry less about my retirement, millions of Canadians are not as lucky as we are, and many of my constituents are not as lucky. I regularly knock on doors in my riding of Scarborough Centre to stay connected to the concerns of my constituents, and many of them tell me that they are worried about their retirement. For many Canadians, this is one of the most important things on their mind.

Canadians are justly proud of the Canada pension plan. Like our public health care and the Canada child benefit, it is one of those things that helps to define Canada.

It has been a long time, since 1965, when the Liberal government of Prime Minister Lester B. Pearson first established the Canada pension plan. As I have said, we live in a very different world than we did back in 1965, and Canadians face a very different retirement scenario today.

If we are to help Canadians save for their retirement and ensure that our retiring seniors do not slip into poverty, we need an enhanced Canada pension plan. With its efficient administration and strong performance, the Canada pension plan is the right vehicle to use as we seek to provide enhanced retirement savings for Canadians.

With Bill C-26, we would increase the maximum level of pensionable earnings by 14% by 2025. By increasing the amount of retirement pension, as well as the survivor and disability pensions, and the post-retirement fund, we are keeping our commitment of helping Canadians secure a strong, secure, and stable retirement.

We recognize that there will be an impact on both employees and employers, which is why the changes are being phased in gradually over the next seven years, from 2019 to 2025, for these needed investments. Canadians are investing in themselves and in their future. By investing in their employees, businesses will benefit as well. An employee who does not need to worry about their retirement is an employee who is happier and more productive for their employer.

Canadians deserve to retire with dignity. Today, 1.1 million families nearing retirement are facing a drop in their standard of living, but they will be able to retire with dignity when these reforms are fully in place.

Pension reform is an issue that needs national leadership. For years, as the provinces called out for federal leadership to address this growing problem, the previous government stayed silent, while everyday Canadians retired without enough savings to live comfortably.

I am proud to be part of a government that is prepared to lead and make some difficult choices. This is what leadership is about. The finance minister has worked closely with his provincial counterparts to reach an agreement that critics said was impossible.

We do not need to worry about our retirement in this place, but the millions of Canadians we represent do. This bill is for them, and I am proud to support it.

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

Madam Speaker, this summer I had the privilege of meeting a lady who is doing the financial work for a number of different companies in her area. She said very clearly that if the CPP increase goes through, a number of her companies would actually be forced to lay off workers, let alone hire new ones.

My colleague gives the impression that this change in CPP would somehow eliminate poverty. I want to quote a book by the chief actuary of Morneau Shepell, co-authored by the finance minister.

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. Yes, a little over five per cent of seniors today still have income below the poverty line.

Going back to the first comment I made, when companies are forced to lay off workers, or when companies that would like to expand and hire more workers are not able to do that, in the end we will have fewer people working. How is it beneficial if a very few people get access to a small increase in CPP but hundreds of others are actually laid off or are out of job?

[Salma Zahid, Liberal, Scarborough Centre, ON]

Madam Speaker, CPP enhancement is crucial to ensure that Canadians do not slip into poverty and can retire with dignity. Enhancement of the CPP will help Canadians secure a strong, secure, and stable retirement.

Allow me to share some independent commentary and reviews on our government's proposal for CPP reform.

Thomas Walkom of the Toronto Star said that it was “a clever bit of work” that made sense.

Ontario finance minister Charles Sousa said, “this federal government has shown great leadership and great desire to do something of great benefit for our young people.

B.C. finance minister Mike de Jong said it was “a balanced approach to setting the objectives that were set out”.

Hassan Yussuff, president of the Canadian Labour Congress, called the plan “historic”, adding “I never thought this moment would come”.

[Jenny Kwan, NDP, Vancouver East, BC]

Madam Speaker, does the member have anything to say with respect to the fact that the dropout provision has been taken out, impacting particularly women and people on disability? I know the member is a very caring individual who wants to ensure that these provisions are in place for the protection and support of women and people with disabilities in our community. Would she support the call for change from her government with respect to this?

[Salma Zahid, Liberal, Scarborough Centre, ON]

Madam Speaker, we are proud of Bill C-26, the agreement reached with the provinces, to reform the Canada pension plan and improve retirement outcomes for all Canadians, including women and those with disabilities. I agree with the hon. member that more can, and should, be done with respect to dropout provisions for disability and child bearing. I would note though that such changes will require agreement with the provinces. I understand the finance minister will raise this issue with provincial and territorial colleagues in December. I look forward to the results of those discussions.