This bill is from the 42nd Parliament, 1st session, which ended in September 2019.
Bill Morneau Liberal
This bill has received Royal Assent and is now law.
This is from the published bill. The Library of Parliament has also written a full legislative summary of the bill.
Part 1 of this enactment amends the Canada Pension Plan to, among other things,
(a) increase the amount of the retirement pension, as well as the survivor’s and disability pensions and the post-retirement benefit, subject to the amount of additional contributions made and the number of years over which those contributions are made;
(b) increase the maximum level of pensionable earnings by 14% as of 2025;
(c) provide for the making of additional contributions, beginning in 2019;
(d) provide for the creation of the Additional Canada Pension Plan Account and the accounting of funds in relation to it; and
(e) include the additional contributions and increased benefits in the financial review provisions of the Act and authorize the Governor in Council to make regulations in relation to those provisions.
This Part also amends the Canada Pension Plan Investment Board Act to provide for the transfer of funds between the Investment Board and the Additional Canada Pension Plan Account and to provide for the preparation of financial statements in relation to amounts managed by the Investment Board in relation to the additional contributions and increased benefits.
Part 2 makes related amendments to the Income Tax Act to increase the Working Income Tax Benefit and to provide a deduction for additional employee contributions.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from Parliament. You can also read the full text of the bill.
Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-26s:
Canada Pension PlanGovernment Orders
Canada Pension PlanGovernment Orders
Canada Pension PlanGovernment Orders
The Speaker Geoff Regan
In my opinion the nays have it.
And five or more members having risen:
Call in the members.
Andrew Leslie Liberal Orléans, ON
Mr. Speaker, I request that the recorded division on the amendment to the amendment at second reading of Bill C-26 be deferred until the expiry of the time provided for oral questions tomorrow, November 15.
Gord Brown Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON
Mr. Speaker, I request that you further defer the vote to the end of government orders tomorrow, November 15.
Canada Pension PlanGovernment Orders
The House resumed from November 14 consideration of the motion that Bill C-26, An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act, be read the second time and referred to a committee, of the amendment and of the amendment to the amendment.
Canada Pension PlanGovernment Orders
The Speaker Geoff Regan
The House will now proceed to the taking of the deferred recorded division on the amendment to the amendment.
(The House divided on the amendment to the amendment, which was negatived on the following division:)
Canada Pension PlanGovernment Orders
The Speaker Geoff Regan
I declare the amendment to the amendment defeated.
I wish to inform the House that, because of the delay, there will be no private members' business hour today. Accordingly, the order will be rescheduled for another sitting.
The House resumed from November 15 consideration of the motion that Bill C-26, An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act, be read the second time and referred to a committee, and of the amendment.
Second ReadingCanada Pension PlanGovernment Orders
Saint-Maurice—Champlain Québec
Liberal
François-Philippe Champagne LiberalParliamentary Secretary to the Minister of Finance
Mr. Speaker, I am delighted to start the debate today on this very important bill. It would be transformational for our nation, and I am delighted to express that on behalf of this government. We would improve the lives of future generations. People would be able to retire with dignity because of this government.
The essence of what we would do is very simple. We would increase pensionable earnings from one-quarter to one-third for generations to come. I am sure that one day, when members in the House retire, they will look back with pride to the great day we adopted the enhancement to the Canada pension plan, because future generations will know that we did the right thing.
It is my privilege to rise today to speak about how this government is honouring its promises to Canadians, how it is helping to strengthen the middle class and all of those working hard every day to join it, and how, through collaboration and partnership as well as a strong commitment to do what is right, we are at the threshold of progress on a very important initiative for our country. The promise of a dignified retirement is fundamental to the Canadian dream. Our country has long been a haven for hard-working middle-class families who helped build this modern, open, and cohesive country that we all enjoy today.
For decades, people in Canada believed that, if they were willing to work hard, the goal of a comfortable retirement was well within reach. That assurance is one of the reasons that our country has thrived, but lately the goal of a secure retirement has come under threat. The world has shifted, and many citizens have not seen the benefits of the tremendous economic growth we have achieved together over the last several decades. The soft underbelly of the world economy has revealed itself in expected and unexpected ways. Hard work does not always equal progress anymore. In many cases, a fundamental promise has been left unkept.
Let us consider these facts. We know that today one in four families nearing retirement, which is 1.1 million families in this country, risk not having enough for retirement. In particular, middle-class families without workplace pension plans are at greater risk of under-saving for retirement. A third of these families are at risk. We also know that young Canadians, in particular, are facing the challenge of securing adequate retirement savings at a time when fewer can expect to work in jobs that include workplace pension plans.
We knew we needed to act, but we could not act alone. That is why, at the earliest opportunity, our government invited provinces to an inaugural discussion on enhancing the Canada pension plan. This goes back to last December, mere weeks after we took office. We made excellent progress at the first meeting, so much progress that consensus was achieved with the provinces by June.
The federal government, alongside participating provinces, reached a historic agreement to make meaningful changes to the CPP that would allow Canadians to retire with more money in their pockets and with dignity. That has truly helped to underscore the importance of partnerships and how serious we are about renewing the relationships we have with other jurisdictions so that we can work together on the challenges that affect us all.
We need our federation to be strong. That is how we will succeed. Let us look at what we have done so far. For young workers in their early twenties, just starting their careers, this would be a great benefit when they retire. In fact, young workers would see the largest increase in their retirement benefits.
I am sure members in the House are looking not only at the immediate term, but at the long-term future, whether it is for their children or grandchildren. As I went across this nation, when we were looking at budget 2016, as I am still doing for budget 2017, people wanted us to act for the immediate term, but they also wanted us to act for the long term.
That is why the Minister of Finance is called the long-term guy. He is looking at the long term to ensure there will be prosperity in our country for generations to come.
By strengthening the Canada pension plan, workers will receive more money from their pension, from one-quarter of their eligible earnings to one-third. This is a significant achievement. It is a historic agreement. It is a transformative agreement for this nation and for future generations.
Let me get to the example. If people are making $50,000 a year over their working life, they will receive about $16,000 each year in retirement instead of today's $12,000. That is $4,000 more each year in their pockets. This is money to save and invest. It is money that Canadian families and hard-working workers expect to have when they retire to be able to contribute to society.
What about those Canadians who are worried that this is nothing more than a new cost on their paycheques? We have heard some members express that. Let me give them a very straight answer. First, we ensured that the increase in contributions would be phased in gradually, so people know about it in advance. When policies are to be changed, we need to tell people about it in advance. That is exactly what we have done.
Someone who is working, with a constant earning of $50,000 a year, will contribute an additional $70 a year or $6 a month in 2019. Let me go back to the example. That person would get $4,000 more in benefits, and in 2019 the individual would contribute $6 a month more.
I can assure members, when they go across this nation, people get that this is in their best interest.
For the employee contribution portion of the enhanced CPP, we are also going to offer a tax deduction instead of a tax credit to ensure that new CPP contributions do not cut into the cost of savings.
How will employers be affected? We have heard members on the other side talk about employers. Let me give them a very straight answer. The employers will also benefit from a long and gradual phase-in starting in 2019. This is the responsible way to ensure that businesses and workers have time to adjust to the additional contributions associated with the enhanced program.
What about the low-income worker who is worried about the effect of increased CPP contributions on his or her paycheque? How will an enhanced CPP help? Let me tell the House in a very straightforward manner. I want to assure my colleagues and low-income workers that an enhanced CPP will benefit all workers, including those with low incomes.
In order to ensure eligible low-income workers are not financially burdened as a result of the extra contributions, the government will also enhance the working income tax benefit. The proposed enhancement to the WITB is designed to provide additional benefits that roughly offset incremental CPP contributions for eligible low-income workers.
With this enhancement, there will be no impact on their disposable income, and when they retire, they will also get a larger retirement benefit payment. The bottom line is that people who are working in Canada, are paying into the CPP and are planning to retire after 2019 are going to have more money in their pockets from their CPP retirement pension benefit.
The time has come to restore the faith of Canadians in their government and to reward hard-working people having the audacity to dream of a secure retirement, like their parents and grandparents before them. After all, that was the deal. With these changes, Canadians can worry a little less about having enough later in life, and can spend a little more time in the present, raising kids and building their communities for the better.
We feel this is a win-win. I urge my hon. colleagues to support an enhanced CPP because they will be doing the right thing, not only for this generation but for future generations. When members retire, they will look back in time and say that they are proud to have been in the House when we did the right thing for our children and grandchildren.
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Mr. Speaker, we will have an opportunity to explore this in greater detail later.
Still, the member failed to mention one number, and that number is 40. It will take 40 years for the effects of this legislation to actually kick in, because that is the full cycle needed before that can happen, and that is a long time. Meanwhile, business owners will be forced to pay on average $1,000 more for each employee, and workers will have to pay $1,000 more, too.
Why is the government bragging about creating justice in the world, when in fact, it failed to mention that it is taking an extra $1,000 away from every worker?