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

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Mr. Speaker, it is certainly an honour for me to be here today to speak to the bill and to the amendments that have been put forward.

First, as many people have done, I would like to honour our veterans. I will be in Red Deer for the ceremony, and then I will be dropping in to all the Legions in the riding. I would also like to thank all those people who will be participating in wreath-laying on behalf of the federal government. A great friend of mine, a veteran from the Korean War, Smiley Douglas, has done this for me for many years. I certainly appreciate their great effort and commitment in presenting wreaths on behalf of Canada.

One of the other points that came up was this quote, which has been presented two or three different times. It says:

It (the 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.

That was from the Hon. Judy LaMarsh, the Liberal minister responsible for establishing the CPP in 1964.

Many people ask me how I got my start in politics. I talk about the political side and choosing a political party. The reality is that I got my start by trying to understand the things that were happening in this country when the Canada pension plan was being discussed back in the sixties.

I remember going with my father to meetings in town halls or in basements and the discussion that was taking place. My father was in his mid-forties at the time. He said that the pension plan was going to be great for him, but it was going to be awful for me, because I would end up having to pay this for the rest of my life and if I were a self-employed person, this would be the key approach. It turned out that I have not been a self-employed person, but a self-employed person pays twice as much. They pay both sides.

These are the kinds of things I learned. I recognize the importance of what will take place. That is something I certainly remember. My father passed away six weeks after I was elected in 2008. I think of him every time I walk into this chamber, but I also think of the lessons learned. Certainly the lesson on the Canada pension plan was ingrained in me.

We should really talk about what the government is looking for and what this omnibus legislation would do. It says that over the next 40 years, CPP retirement benefits will rise from an income replacement rate of 25% to 33% of employment earnings, and to finance these benefits, the government will hike the CPP premium rate from 9.9% to 11.9%, starting in 2019, which we might notice is not until after the next election.

The other thing to keep in mind as we continue to hear from the other political parties is that we have to help seniors. This will not be helping the present-day seniors. This will not be helping the majority of the people who are in this chamber because of the timing.

There are some things we can do to help seniors, and there are some things we can do to help people who are working so that when they are in their senior years, they have something to fall back on.

Something that was mentioned earlier by one of our colleagues was to teach some financial literacy to people so they understand. There must have been some financial literacy taught, as we have reduced the poverty rate for seniors from the 29% it was back in the 1970s to less than 4% now. People are looking at what they are doing, and they are recognizing the importance of dealing with issues themselves.

As far as financial literacy is concerned, I spent a career teaching mathematics. I always wanted to make sure that people understood how they could look after their money so they could deal with things themselves. It was understanding annuities, looking at the different tax credits so they could do their tax forms and probably help their parents finish these things off, and understanding the different investment instruments, how this would work, and what they could do for themselves.

I always use the concept that, if people didn't smoke and took that much every day and invested it, just think how much money people would have at the end of the day. Then, of course, we would be investing it back into the government. We would be paying our taxes and everything else that was associated with that. However, when they start realizing that would have been a way to maybe come up with $1 million for themselves, these are the sorts of things that I think are important. They are the sorts of things that people should recognize.

When we talk about this and when we take a look at what it is going to do, for those that would be at the maximum when this comes into force, it would be $2,200, $1,100 for the individual and $1,100 for the company. If a person happens to be the company, that is $2,200 that is going to come out of what they could have reinvested to help themselves. These are critical components that we have to recognize.

I have yet to hear anyone really talk about the self-employed and the plight they are in, especially when we look at what is happening in Alberta right now. Look at the situation we heard about earlier. Calgary has hit the 10.2% unemployment rate. Red Deer has been into the double digits for a number of months. Right now, when we start to talk about where we are going to go in the future, this is where the difficulty lies. The difficulty lies in the fact that people have no confidence. We do not know whether or not we are ever going to be able to move our natural resources to tidewater. We look at people who are throwing sand in the gears and it seems as though they are the only ones who are being heard.

The second aspect that we have to recognize here is the tax burden. We look at carbon taxes and we look at the different types of things. In Alberta, there was a price on carbon, and the way in which it was set was so that it was going to be put in to help businesses so that they could do their own reduction. If we make a general carbon tax for anyone, it is easy. Let the government deal with that. We do not have to worry about it. These are the kinds of things that could be done.

When we also consider the payroll tax and the costs that are going to be tied into that right now, where then is the confidence? The confidence is going to other countries. It is not like in 2008 and 2009 when even banks would not lend to each other. The situation now is that there is money and there are dollars available, trillions of dollars just with our seniors and our investors here in Canada alone, but we have to be careful. We have to recognize that if we continue to look at ways of discouraging entrepreneurs from doing the things that are necessary, we are certainly going to be in a terrible situation.

In closing, I would like to point out some of the concerns that people have. I could perhaps have gone through even a few more of the quotes that we have, but I will just close with this particular quote. It says:

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

This is a quote from Morneau Shepell, by the co-author with our Minister of Finance of The Real Retirement, in the Financial Post on June 5, 2016.

I had known it to be 3.7%. I do not know whether it already bumped up to 5% by the time they looked at it, but I know that we have done an amazing job and that we have all of the tools there for our seniors.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, 11 million working Canadians do not have a workplace pension plan. It is also a fact that today many go to the food banks. As for the executives there, they say more and more working families are coming to food banks for support.

When we combine these two facts, we know, going forward, a lot of these 11 million working Canadians will retire directly into poverty. We have to take action now so that when people become seniors 10, 15, or 20 years down the road, we are ready to support them.

I did not hear my hon. friend mention anything concrete that is going to help these people who are going to become seniors in 10 to 20 years.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Mr. Speaker, 10 to 20 years, if we think about the investment, that is not particularly going to be helping people at this point in time. The major input and the major opportunities will be 30 and 40 years down the road.

However, we have looked at the damages that can be done over the next 20 years. When we have companies saying, “Where are we going to invest? How could we be sure that we are going to have something in the future”, and they see this type of a payroll cost for their companies, the big companies are not going to be coming in.

However, more importantly, and the point I was trying to make, people who work for self-employed people are probably, in many cases, making more dollars per hour than the person who owns the shop and is the self-employed person. If we add this to the problems they already have, we are really going to see a problem here in Canada.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, when I meet with people in my riding, I realize that there are fewer and fewer workers who have access to an employer-sponsored retirement plan. These workers do not have the means to save for retirement.

The Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities is currently doing a study on poverty. Statistics Canada representatives appeared before the committee and stated very clearly that the poverty rate for seniors is cause for concern. We know that 30% of elderly women living alone live in poverty.

I am not reassured at all about the current situation of seniors. Too many seniors live in poverty; that is what they are telling me. Their retirement income is not indexed to the cost of living and they are growing poorer by the day. I find it difficult to understand how my colleague can be content with the situation of the past few years.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Mr. Speaker, there are so many other tools available instead of dealing with and causing problems for the economy.

I feel for the people who speak to seniors, and I do that in my own riding. Seniors will come and talk to me about the issues they have. However, the reality is that there are only 3.7% of seniors who are actually below the poverty line, and we have tools for that. Our Conservative government increased the GIS, and to their credit, the Liberals followed suit and increased it as well.

These are the kinds of things that we could target. We can target the support that we have for those who are in trouble, but only if we can keep the economy strong, and only if we can be assured that we are going to be able to keep businesses growing here in Canada.

[Jim Eglinski, Conservative, Yellowhead, AB]

Mr. Speaker, my hon. friend mentioned earlier that he was an educator and he talked about informing his students. I would like him to expand on that a little.

Many of the younger people in my riding that I am talking to are looking at ways of self-funding their retirements. They are not relying on government. They know that it is going to be a problem later on and they are self-funding. Could the member expand on that a bit?

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Mr. Speaker, it is very important that we are able to teach young people and give them the tools they need so that they can invest. There are so many opportunities at this point in time.

The world is open to young people. When we take a look at the way in which they communicate and the opportunities they have, they need to have more financial literacy now and a different type of financial literacy than people like the member or myself would have. This is what is critical, but we have to make sure that we keep up the hard work to train people so that they understand what they have to do.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, I am pleased to rise today to address Bill C-26, which amends the CPP in this country.

The changes that are being proposed today would not help today's seniors. The CPP tax hike that the Liberals are proposing would only help seniors 40 years from now and in the interim would damage the Canadian economy.

Being from Alberta, I know that our economy right now is in a shaky place. We have seen double digit unemployment rates and all sectors are being affected. This is not just an oil price problem. This is a problem across Alberta's entire economy. I particularly want to push back on the idea that Alberta does not have a diverse economy. For anyone who says that Alberta's economy is not diverse, I would challenge that person to come and visit my riding.

If there is something that starts in the ground it probably comes from my riding. I have a significant agriculture industry in my riding as well as a significant forestry industry and a significant oil and gas industry. All of these industries work hand in hand.

I met with a constituent during the campaign and when I asked him what he did he told me it was hard to explain. He said his family are traditionally dairy farmers. They have a herd of about 120 cows. He said he has a mechanics ticket and on the side he soups up Dodge diesel pickups. He has a lot of fun with that and it makes him about $12,000 a year. He said he also services a number of gas wells in the area.

This gentleman's story typifies Alberta in that its entire economy is integrated. If a person works in one industry, that does not necessarily mean that he or she only works in that industry. A lot of guys are doing multiple things. There is a lot of shift work in the oil and gas industry. People will work for two weeks at a time and then be off for a week, or they will work for 10 days and be off for four. They work a combination of such. A lot of people who work their oil and gas job will have a separate commercial interest going on when they have days off. When the number of oil and gas jobs is reduced, it affects every other sector of Alberta's economy because they are self-funding another project on the go.

A common saying in Alberta is “we're funding our farming habit one way or the other”. A lot of guys will either pick up a job servicing gas wells in their area or they will drive logging trucks. I know a number of guys who farm year-round and they drive logging trucks in the winter. They already have a big rig sitting in their yard so they get a commercial licence, insure the truck, and go logging. They bring in more income that way. These are just some of the things that show the diversity of the economy in northern Alberta.

Then we have all the spinoff that comes from the diversification of our economy, one being the service industry. We also have welders who work for all three of the industries. They will do some welding at one of the sawmills, some welding on one of the oil lease sites, and some welding work for a farmer. The hotel and restaurant industry will service all three of these industries. We have a lot of schools in the area that educate all of the children who live in the towns and whose parents work in one of the three industries.

Alberta is one of the best regulated parts of the country and because of that we tend to be on the cutting edge of new technology, whether that be in farming, logging, or the oil patch.

A number of the lumber mills that I visited said that they were the first in the country to have the technology. When logs come into the mills, they are scanned, a picture is taken of them, and the computer does an algorithm on the value in those logs. Whether they cut two-by-fours, or two-by-eights, or two-by-fives out of a log, it is all planned by the computer as they come through the gate into the mill. The company that provided the technology to the mills is able to go and sell it around the world.

It is the same thing when it comes to the oil patch. The development of the flare stack technology and the ability to create electricity off what used to be flared, was developed in Alberta. Now we go around the world and sell that technology.

People who say that Alberta should have worked harder to diversify its economy should check out what we are doing in engineering, in innovative farming practices, and in harvesting logs.

Our logging companies have a 100-year plan on how they will harvest the logs in northern Alberta. It is fascinating to watch.

Oil and gas is being depressed because of oil prices and a lack of pipelines. It is a huge problem for Alberta. The logging industry is under a couple of threats. The species at risk legislation and caribou are causing consternation with the logging industry, as well as the softwood lumber agreement. These are the other things that are causing instability in the marketplace. People are not ready to invest in things like that.

Also about a third of the canola crop is laying underneath the snow right now. This is causing a significant hardship for our farmers in the area. Our farmers typically do not have the margins to pay significantly, at the oil and gas level, so they typically pick up oil and gas workers as well.

All of these things are working together. The three major sectors in my riding have significant instability. They are unable to invest right now, because they are unsure of where we will go.

On top of all of these things, the Liberal government is now putting an extra burden on all of these employers and employees by bringing in a new CPP tax hike. This CPP tax hike is going to make it more expensive to hire people. It is also going to cost more for the current employees, which is what we are looking at in northern Alberta right now.

A lot of companies are surviving with a zero margin. If they can get their costs out right now, they are happy to come and do the work. In some cases, they are doing the work at a loss purely to keep their guys so when the price comes back around, they will have the good guys working for them.

What the CPP tax hike will do is drive the costs up even higher, making it more difficult for companies to survive through this economic downturn. It will do nothing for seniors right now. The entire reason why the Liberal government is bringing this in right now, as they have told us, is to help seniors.

This is not going to help them. It is completely preposterous for the Liberals to say that they will bring this in to help seniors, and then say that it will only help seniors 40 years from now. It is incredibly frustrating to watch the government, completely oblivious to the fact of what is happening in northern Alberta, throwing this on there and saying that it is doing it to help seniors. I am at a loss for words to say how frustrating this is.

I know many of my colleague have raised a lot of similar points and I hope we can continue to do this. I feel the government should reconsider its position on the CPP tax hike, go back to the drawing board and come back with something that will not be so detrimental to our economy.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Speaker, I am curious if my colleague from Peace River—Westlock believes the CPP itself is important and if it is, should we make it sustainable for 100 years like the logging industry? If he does not think it is, should we get rid of it?

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, when I was first employed, I discovered that I was not allowed to take home all my pay. I was getting paid $5.90 an hour, which was minimum wage. I did the calculation on my hours worked and on how much I should be paid. However, I was told that I had to pay CPP, taxes and all sorts fun stuff, which was deducted from my wages. It was a bit of a shocker to me. However, retirement was not on my radar at that point either. It was something that cued me to look at this.

The system is in place and many people rely on it. I am not in any way advocating that we should get rid of it. What I am saying though is that it is just one of the tools that Canadians are using to fund their retirement.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, when the member talked about the first time he received his paycheque, I am sure this is why he became a Conservative. We have discovered that there is a lot of money being taken out of our pockets and this is what the trick is with the bill.

Members may not know that the gentleman is the father of two. I played with them on Wednesday, and they were very energetic. If the government proceeds with this attitude of taking more money from the pockets of the people instead of letting them make their own preferences and their own choices, what does he think this will do for the future of his children?

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, that is precisely why I became involved and why I came here. I was not that into the whole what happens in Ottawa until I had children and had to look to the future. When we have children, suddenly the future becomes much larger in our field of vision, so that is precisely why I am involved.

What is the government doing for our children? It is saddling them with a massive debt that they will have to pay off. When I address the government, I do it often from the perspective of my children. Why do the Liberals not care about the children?

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

Mr. Speaker, we have good, strong national leadership that has led to the provinces and all regions saying yes to the bill. When we have provincial jurisdictions and Canadians as a whole saying yes to the bill, why is the Conservative Party is voting against it?

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, Canadians as a whole are saying that the government is spending too much money. When the member says that the Liberals are bringing leadership, the Canadian Federation of Independent Business would argue otherwise, and it has said so repeatedly.

[The Assistant Deputy Speaker, Anthony Rota]

It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.