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

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, I am pleased to rise this afternoon to speak to Bill C-26, the Liberal CPP tax hike.

Today marks the one year anniversary since the government was sworn in. In that context, it is appropriate, at the outset, to take a step back to look at the past year, because it really has not been a pretty one.

Over the past year, the economy has slowed and more and more Canadians are losing their jobs. In my province of Alberta, more than 100,000 people have been laid off in just the past year since the government came to office. The more than $1 billion surplus left by our previous Conservative government has turned into a massive deficit, with over $100 billion in new debt projected over the next five years and with no end in sight to the red ink. Taxes are going up for hard-working families. The tax credit for families for children's arts and sports is gone. The universal child care benefit has been eliminated. In addition, we can forget about the commitment to reduce the small business tax from 11% to 9%. It turns out that it is just another Liberal promise made and another Liberal promise broken in the long line of Liberal promises made in 2015 and broken in 2016.

Now, we have Bill C-26, a massive Liberal tax hike on hard-working Canadians. What it is going to do? It is going to take money out of the pockets of hard-working Canadians. How much will it take out of the pockets of hard-working Canadians? It will take as much as $2,200 annually out of the pockets of families.

Let us think about that. What is $2,200 going to mean for a young person who has just finished post-secondary education and is starting a career? It means $2,200 less for that young Canadian to pay down his or her student loan. What about a young couple that is trying to put money down on its first home so it can attain home ownership? It is $2,200 less for that young couple. What about the family that wants to save for its children's post-secondary education? It is $2,200 taken out of its wallet, per year. It is $2,200 less for Canadians to save and invest in TFSAs, tax-free savings accounts.

Speaking of TFSAs, let us not forget that it is the Liberal government that is responsible for reducing and rolling back the amount that Canadians can save in TFSAs, from $10,000 back to $5,500.

It is very difficult to swear, on the one hand, the government's assertion that this CPP tax hike is about savings when it is the same government that has rolled back the opportunity for Canadians to save in TFSAs. That is the government's record. The reason for that is this CPP tax hike has nothing to do with savings and everything to do with paying for the government's out-of-control spending.

What is this going to do? What impact is this CPP massive tax hike going to have?

The Department of Finance Canada projects that it will result in reduced employment, a reduction in Canada's GDP, reduced business investment, reduced private savings, and reduced disposal income for Canadians.

Those are not Conservative Party projections, those the Department of Finance's projections. The Canadian Federation of Independent Business projects that as many as 110,000 jobs will be lost due to this CPP Liberal tax hike. In the one year since the government was elected, it has dug Canada into a hole of more than $30 billion without creating a single job. Now, it wants to kill 110,000 jobs with this CPP tax hike.

What does Bill C-26 seek to achieve? What problem does it seek to solve? I would submit that this is really the million-dollar question. The fact is that Canada's retirement system is the envy of the world. According to the Department of Finance, the average Canadian senior is earning 91% of the median Canadian. That is well above the OECD average of 84%.

According to Statistics Canada, the number of Canadian seniors who are living on a fixed income has drastically decreased over the last many years. It was at 29% in 1970. It is now down to 3.1% today. Canadians are saving like never before, when it comes to planning for their retirement. In fact, since 1990, the percentage of income that Canadians are saving has doubled from 7.7% in 1990 to 14.1% today.

It is no wonder that just about everyone is panning this Liberal CPP tax hike, including none other than the hon. Judy LaMarsh, the cabinet minister who was responsible for presiding over the implementation of the CPP in 1964.

In closing, I say that there is not a problem for Canadians when it comes to savings, but the government does have a problem. It has a problem with increasing spending and increasing taxes. Frankly, Canadians have had enough. They cannot take it anymore. It is time to defeat this Liberal CPP tax hike and defeat Bill C-26.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I would like to thank my friend from St. Albert—Edmonton for his usual passionate remarks. I have a couple of questions.

First, the hon. member told the House that the hon. Judy LaMarsh, who brought forward this plan, is against this. Judy LaMarsh died in 1980. I would like to ask if the hon. member for St. Albert—Edmonton went to a psychic, had a card reading, and somehow spoke to Judy LaMarsh from beyond?

Second, the hon. member said that this young person would suddenly see a contribution increase of $2,200, making it sound like next year, he or she would go into the workforce and $2,200 would magically come off their paycheque.

Given that contributions only start increasing in 2019 and are phased in over a multi-year seven-year period, can I ask the member at what year this $2,200 hike would come into effect, and what would the salary of this young person have to be in order to reach the $2,200 hike?

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, as I was getting passionate in my speech, I meant to say that Judy LaMarsh would have opposed the legislation, not that she actually has said that she opposed the legislation.

In that regard, the quote that I was looking at, prior to making that mis-statement, is the following from Judy LaMarsh, who said:

It (CPP) is not intended to provide all the retirement income which many Canadians wish to have. This is a matter of individual choice and, in the government’s view, should properly be left to personal savings and private pension plans.

I would suggest this government could learn from the pronouncement of Judy LaMarsh.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Mr. Speaker, I want to compliment our colleague from St. Albert—Edmonton for his passionate speech about statistics. Here is one statistic that came out today. The unemployment rate in Calgary is double digits today at 10.2%, rising from 9.3% over the past four weeks. It has gone from 36% above the national average to 46% above the national average in just four weeks.

Could my colleague tell me what is happening in Alberta to cause these drastic numbers in unemployment?

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, the situation in Alberta is dire and unfortunately nothing that the government is doing in the way of policy is helping the situation.

After the Liberals were elected to government, the Prime Minister sat on his hands when President Obama killed the Keystone pipeline. Then the Prime Minister killed the gateway pipeline, which will prevent Alberta energy from getting to market. Now the Prime Minister is seeking to impose a massive carbon tax on the people of Alberta that even Premier Notley says is not acceptable at the present time. Now we have this massive job-killing CPP tax hike.

When it comes to helping the situation in Alberta, the Liberal government simply has all of the wrong priorities.

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

Mr. Speaker, the Conservatives love to call this a tax, so for semantics let us continue to call it a tax.

I am wondering if the member could tell the House of any other government tax that exists that pays retirement benefits at age 60 or 65?

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, the fact of the matter is that the problem with the Liberal CPP tax hike is that they want to tell Canadians how to save and when to save. Our previous Conservative government provided Canadians with flexibility, including making voluntary CPP contributions. In addition to that, our government worked in a targeted way to support seniors who are most vulnerable by increasing the GIS.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, it is a pleasure to participate in today's debate, particularly after my friend from St. Albert—Edmonton. It is always hard to follow him, but I will do my best. I would also like to take this opportunity, as so many other members have, to thank all of our veterans across this country and all of the members of the Armed Forces on this eve of Remembrance Day, this being the last time that we have this opportunity in this chamber before this year's celebrations.

The Canada pension plan amendments are something that are important for me to talk about because I think they are an example of co-operative federalism that has really succeeded. The Canada pension plan was originally started in the 1960s when we saw the fact that a lot of seniors were moving into poverty after they left the workforce. At the time it was unclear as to who had jurisdiction over pension plans. There was a feeling that this may be purely a provincial jurisdiction. In the era of co-operative federalism, the provinces worked together to adopt a constitutional amendment to allow us to set up the Canada pension plan and later allowed Quebec to have its own plan that was similar in nature to the CPP.

This year, we recognized another problem with the plan. We saw that based on what we had all seen over the last many years, we still had a number of seniors who were not poor in the years that they were working, they were solidly middle class, but they were moving into poverty as they retired from their jobs. We needed to see an augmentation to the amounts contributed under the Canada pension plan by both the employee and the employer, and to raise the wage ceiling under the Canada pension plan over time, in order to ensure that over one million Canadians when they reach retirement age would not become poor under the class of who constitutes poor Canadians.

That is something that is important, so what the federal government did was meet with the provinces. We went to all of the provinces and secured agreement among nine provinces in Canada to amend the Canada pension plan. That is not an easy thing to do. We have umpteen examples in Canadian history of federal-provincial negotiations that have gone awry, where the federal government was not able to convince the provinces to take the action that the federal government thought would be in the best interests of Canadians. However, in this case, the federal government and all nine provinces that participate in the CPP agreed to move forward. Quebec also agreed to move forward with a review of its own pension plan. I think this speaks to co-operative federalism and speaks about the success story we can have in Canada when the federal government and provinces work together.

I have also listened to the arguments brought forward by our friends in the official opposition as to why these changes to the CPP should not be made. I am someone who believes that there is a dual obligation in this country. There is indeed an obligation to take care of ourselves. I have had the luxury of having jobs that have allowed me to contribute the maximum to my RRSPs and indeed also to my TFSA every year. I believe in individual initiative. I believe it is the responsibility of individuals to take care of their own money and to contribute the best they can to provide for their retirement. However, as we know, not all Canadians can do this because they do not earn enough, because they do not have that ability, and other Canadians for whatever reason seem unable to save enough for their retirement.

As such, we have to come to a situation where there is a balanced approach. We have already decided over 50 years ago, long before some of us were born, that the Canada pension plan was a good idea, that there needed to be a national plan, which by the way has much lower administrative costs than private plans, to allow the government to help Canadians to save for their retirement.

That is not to say the government plays a nanny state or only role, but it is to say that we have recognized that the government has such a role. If this is truly the case, then the government has the obligation and the responsibility to look at the current situation in our country, to look at what wages are in our country, to look at the fact that Canadian households have the highest debt ratio of any households in, I understand, the G7 and to say we have a situation in our country today that is problematic.

Many Canadians are not adequately preparing for their retirement and many are not making use of their RRSP and TFSA contribution limits. Therefore, what are we to do to prevent having even more costs on the state in the future when we see more and more seniors joining the poor after they stop working? We have to take proactive measures. We need to take preventive action.

I am very proud that we increased the guaranteed income supplement by 10%. That will help bring many seniors out of poverty, but it is not a be-all and end-all solution, because the goal is for most seniors not to need that supplement because most of them, those who have worked their entire lives, should not be that poor.

I was talking about Remembrance Day. Veterans built this country. The last thing we want are women coming out of the armed forces and being poor, but I see that in my riding. Many World War II veterans, who are now in their nineties, are having trouble making ends meet. The president of the Legion in my riding even talked to me about how a number of Legion members have trouble affording medication and food. That is very sad, because the pensions they are living on are not sufficient. One thing we could do is proactively take steps to fix this.

In my previous life as a mayor, I was part of a municipal pension plan. It is true that pension plans in Canada are changing. We are moving from defined benefit plans to defined contribution plans. It is impossible for an employer in the private sector today to realistically start a defined benefit plan, because with changing markets, these have become a death knell for many employers in Canada.

I can say that in my old life as general counsel of a multinational corporation, it would not purchase a company that had a defined benefit plan, because a defined benefit plan was too risky in the private sector. Fewer and fewer companies have these plans and more and more are moving to defined contribution plans, the outcome of which they are unsure of. Most companies are without plans. There are workers all across the private sector who do not have pension plans when they retire.

There are two groups of workers. There are those who say they are going to save for their retirements and do their best to put money away, but are unable to do so for whatever reason. Perhaps their kids' educations, or their own rents or mortgages, are too expensive. Then there are others who are barely scraping by on the salaries they earn and do not have the means to put money aside.

I think we have all agreed that the government has this role, because I have never heard the official opposition say we should scrap the CPP entirely. All I have heard it say is that we should not increase the amount we are contributing now, because it is a payroll tax, a tax on employers and employees. It is not $2,200 a year, by the way, but I will leave that aside.

If we agree with the premise for having a CPP, then we need to look at it in light of what our economy is like today and the impact on people from changes in the market today. Indeed, fewer companies have pension plans, particularly defined contribution plans; more Canadian households are in debt; and average incomes and the cost of living are rising year by year, but the wage ceiling under the Canada pension plan has not been increased for many years.

We need to take stock of that and decide to update the plan to bring it in line with Canadians' situation today. That is not to say that plans allowing Canadians to save money for themselves are not good. It is not to say that Canadians do not have the responsibility to govern their own funds and to put money aside, but we still need to help those who are unable to do that. This, I think, is the right balance.

The right balance in Canada is finding that place where the state intervenes to ensure that the best interests of all Canadians are met. In this case, the interests of Canadians are met by the fact that it will eventually cost the state a lot more if we do not take these actions today to bolster the CPP, because it we do not, more and more people will need OAS in the future.

What I think we need to do is take stock of the fact that this is a necessary update—

[The Assistant Deputy Speaker, Anthony Rota]

Questions and comments, the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I have a very simple question for my colleague.

Why is Canada's debt-to-GDP ratio so good? Can he explain that to me?

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I thank my colleague very much for his question.

I would say that we managed the economy very well during the Chrétien-Martin years. It was during those years that things turned around. I am not criticizing the Conservative government that preceded us. I am not saying that that government mismanaged the economy. I am just saying that things started to improve during the Chrétien-Martin years.

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

Mr. Speaker, I certainly appreciate the warm welcome my colleague from Mount Royal gave me at the justice committee. I am looking forward to working with him.

I appreciate that in his speech the member mentioned the fact that this agreement has come about with strong support from the provinces, which is key, and he went over the jurisdictional conundrums that come with pensions.

What our colleagues in the Conservative Party sometimes miss the point on is that our retirement system is based on three pillars. There are the workplace pensions, private savings, and the government's CPP and OAS. Two of those pillars are not doing so well, and now is the time to bring up the CPP. It is not going to have immediate effects. This is a long-term vision.

However, my question concerns the here and now. As the NDP's critic for seniors, I am concerned that there are so many seniors still living in poverty. The increase to the guaranteed income supplement was welcome, but there is so much more to do. I am wondering if I could hear the member's comment on what the government's actions will be in future years to take care of those seniors, because the here and now is desperate.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I would like to say how pleased I am that my hon. colleague is going to be working with us on the justice committee going forward.

This government, and all of us, on all sides of the House, are very much committed to seniors. The increase in the guaranteed income supplement is one step, but so is money for social housing for seniors. That is something in our infrastructure plan that we are committed to. That is not going to be the end of it. There are seniors who need home care and who are living in poverty. The $3 billion we talked about for home care for seniors would make an incredible difference. I would love to work with the hon. member to find better ways to ensure that we take care of our seniors, so that we agree with all parties to move forward with that.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, one of the issues we are dealing with here is decisions that have been made in the past that were clearly out of touch with what the future was going to bring. We had Conservative governments in Alberta and Conservative governments in Ottawa that failed to see the end of the energy economy, and in fact they doubled down on it. At the same time, they neglected to diversify Alberta's economy, just as they are continuing to refuse to diversify the economy in Saskatchewan.

We also now are in a situation where being out of touch with what the future holds for us is going to be dangerous. We do not want to find ourselves in another situation like we are in today 20 years down the road. Could the member maybe talk about the importance of acting now to get those benefits in line?

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I do not want to impugn blame to anyone. I do not think that is useful for me. I just want to talk about why, as the member said, we need to do something now.

I was lucky enough, as mayor, to recognize at one point that we needed to update our municipal pension plan. The amount of the maximum wage ceiling had been set at $54,000 for 20 years. As a result, management employees were not attracted to our city anymore because the pension would not pay them enough in retirement. Moreover, we saw that existing retirees were having trouble. We always needed to look at our plan based on existing circumstances, and update. I thank the member for giving me the opportunity to say that.