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

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

Madam Speaker, I thank my hon. colleague for his fine speech. I have the pleasure of serving with him on the Standing Committee on Government Operations and Estimates.

He spoke about DNA, and I think that is a very important issue. The approach I take is based on the principle of walking the talk. For example, the Conservative Party often says that it does not like deficits. However, that party ran a deficit in 2009, 2010, 2011, 2012, 2013, 2014, and 2015. They do not walk the talk.

The member also spoke about the Conservative Party's long-term vision. Since we are talking about pension plans, I would like to remind him that the Conservatives sold the GM shares at a loss. That is not a long-term vision. The only purpose that served was to allow the Conservatives to tell Canadians that they balanced the budget in 2015.

Since we know that defined benefit plans are in decline in Canada, what does my hon. colleague propose? Should we do the same thing that we have done for the past 40 years or should we do things differently?

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Madam Speaker, it is not up to me to suggest measures. The Liberals are in government. What I can say is that their current proposal will not increase or strengthen the CPP, but instead will provide the government with additional revenue to cover its poor financial management.

I would like to say to my colleague from Glengarry—Prescott—Russell that in 2007, 2008 and 2009, the world went through the greatest economic crisis since the Great Depression of the 1930s. We ran deficits at the time to weather that great storm, and we did so with the best record of all G7 countries as we created more than 1.2 million jobs and had the best employment rate of all OECD countries.

We believe that the government should follow our lead.

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

Madam Speaker, I hear a lot about tax breaks. This is a government that generally supports tax breaks. After all, we introduced Bill C-2, which gives a substantial tax break to Canada's middle class of hundreds of millions of dollars, and nine million plus Canadians are benefiting from that.

One could ask the question, why then, if there is so much focus on tax breaks, did the Conservatives vote against that most significant tax break?

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Madam Speaker, we voted against Bill C-2 because it is a false decrease of taxes in Canada.

I would invite my colleagues to chat with Senator Larry Smith, who has done great research and has put forward some amendments at the Senate committee on finance. This is research that shows, without doubt, that the decrease of taxes will only benefit households that make between $140,000 and $170,000 per year. It will not help any household with revenue under $100,000 per year. People with lower incomes are not better off with that. That is my answer to my colleague.

[The Assistant Deputy Speaker,, Carol Hughes]

Before we resume debate, I want to advise the Parliamentary Secretary to the Minister of Health that I will have to interrupt her speech and that she will be able to finish afterwards.

Resuming debate, the hon. Parliamentary Secretary to the Minister of Health.

[Kamal Khera, Liberal, Parliamentary Secretary to the Minister of Health]

Madam Speaker, I am honoured to rise in the House today to talk in support of Bill C-26, an act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act. This is an extremely important piece of legislation that will help millions of hard-working Canadians from coast to coast to coast, including many in my riding of Brampton West.

Opponents who are critical of this legislation often cite the fact that we have hard-working Canadians struggling to make ends meet today. I have residents from my riding calling and meeting with me on a regular basis to express how difficult it has become to support their families. Let me start with a story.

I met a couple with three children from my riding a year ago last November at a coffee shop before my constituency office had even opened. Both parents worked and the father had a second part-time job, yet this family was struggling. They were barely able to feed their children. Unfortunately, their story has become too common in our country. Canadian families that work so hard should not be struggling.

This same family visited me again a couple of months ago in September. They asked me if I could thank our Prime Minister on their behalf. The Canada child benefit that our Prime Minister has championed has taken a huge burden off this family. The increase in the Canada student grants has given this family hope that their children will be able to attend university one day.

This is just one of the many examples of families that have been positively impacted by the reforms our government has introduced to address the urgent issues facing Canadian families.

Short-term stimulus is extremely important. However, to generally serve Canadians our government must deliver for Canadians in the long-term as well. We need to give Canadians hope for their future. We need to ensure that all Canadians are given the opportunity to have a strong, safe, and secure retirement. Ensuring that all Canadians have the support of a pension plan that helps them maintain their standard of living after they retire is essential to achieving this objective.

Canadians value the long-term pension security provided by the Canada pension plan since its inception over 50 years ago by Lester B. Pearson's government. One of the harsh realities of today's economic climate is that it is becoming increasingly difficult for Canadians to plan and save for their retirement years. The cost of living in Canada continues to spike sharply. Retirement savings and the pension plans of Canadians are not keeping pace. The life expectancy of Canadians is going up. As a result, an increasing number of Canadians will be forced to reduce their standard of living in their retirement years.

I have heard these issues loud and clear at the doorsteps, in our town halls, at community events, and in my constituency office. Last week, one of my constituents said that if it is this difficult now, what would he do when he retires and needs to live on a fixed income? What would his grandchildren do? How would they support themselves in their retirement? This is a real and growing concern for middle-class Canadians. As I said, the cost of living in Canada is rising. The cost of food is increasing, particularly healthy foods. The cost of leasing an apartment is increasing. Transportation costs continue to go up. These trends are expected to continue and will increasingly burden Canadian families in their retirement years.

I see that my time is up for now. I will continue my remarks after question period.

[The Speaker, Geoff Regan]

The hon. Parliamentary Secretary to the Minister of Health will have six minutes remaining in her speech following question period.

The House resumed consideration of Bill C-26, An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act, as reported (without amendment) from the committee, and of the motions in Group No. 1

Canada Pension Plan

[The Speaker, Geoff Regan]

Resuming debate, the hon. Parliamentary Secretary to the Minister of Health has six minutes remaining in her speech.

[Kamal Khera, Liberal, Parliamentary Secretary to the Minister of Health]

Mr. Speaker, thank you for allowing me to continue my speech on an extremely important piece of legislation.

As I was saying, last week, one of my constituents said to me, “If it is this difficult now, what will I do when I retire and need to live on a fixed income? What will our grandchildren do, and how will they support themselves in their retirement?”

This is a real and growing concern for middle-class Canadians. The cost of living in Canada is rising. The cost of food is increasing, particularly healthy foods. The cost of leasing an apartment is rising. Transportation costs are going up. These trends are expected to continue, and these trends will increasingly burden Canadian families in their retirement years.

As a result of technological advancements, Canadians are living longer and healthier lives. In 1971, a 65-year-old Canadian was expected to live to the age of 79. Today, the expectation has risen to the age 87. The numbers continue to improve, continue to rise. However, this also increases the risk that Canadians will outlive their savings.

Today, 1.1 million Canadian families with major income earners approaching retirement are at risk of not having enough saved for their retirement. This is about a quarter of families approaching retirement. We need to take action to help ensure that this trend does not continue.

Fewer Canadians have access to a workplace pension plan, and even fewer have access to a defined benefit workplace pension plan. In 1981, about 34% of private sector employees had workplace pension plans. Today, this figure is close to 24% and continues to drop.

After working hard for 40 or more years over their lifetimes, Canadians deserve better. A stronger Canada pension plan is a critical priority for middle-class Canadians and those working hard to join it. Our government has developed a responsible, long-term solution to address this issue. The enhancements to the Canada pension plan proposed in Bill C-26 will provide real and meaningful change for all Canadians.

Enhancing the Canada pension plan will give Canadians a larger public pension, helping them retire with dignity. I am proud of our government's hon. Minister of Finance, and all of the Canadian provincial finance ministers, for prioritizing an enhancement to the Canada pension plan, and for reaching a bold and historic agreement to deliver for the benefit of each and every Canadian.

Working Canadians currently receive a pension that is one-quarter of their eligible earnings. This figure could increase to one-third of eligible earnings under the proposed plan. This is a meaningful and significant change. To ensure that our most vulnerable Canadians are not held back by the changes, the working income tax benefit will be increased. The increase in the working income tax benefit will roughly offset the incremental Canada pension plan contribution for low-income workers. Only the contributors who make additional contributions will be able to receive the benefits of the enhancement.

This important feature of our nation's pension plan legislation would ensure that each generation pays for its own benefits and that our Canadian pension plan remains financially sustainable. If the enhanced Canadian pension plan had been implemented in the past, instead of the 24% of families who are approaching retirement being at risk of not having adequate retirement savings, that number would be closer to 18%. This represents a life-changing difference for many hard-working middle-class families who will likely struggle to maintain their standard of living through retirement under the current system.

The proposal would make a meaningful impact for all Canadians. This means more money to put toward living expenses for retirees, more money to put toward housing, more money to put toward food or health services such as prescription drugs, and the list goes on.

Ensuring that Canadians have more money in their pockets at retirement through the proposed Canada pension plan changes would stimulate our economy in perpetuity, creating long-term growth. Canadians have given our government a clear mandate to ensure that all workers have a minimum level of financial security as they retire.

All Canadians deserve to retire with dignity and to have the opportunity to maintain their standard of living in their retirement years. It is our responsibility to support legislation that would have such a meaningful impact on the day-to-day lives of Canadians in their retirement years.

On behalf of the residents of Brampton West, I proudly support the proposed enhancements to the Canada pension plan, and I encourage all parliamentarians to vote in favour of Bill C-26.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I have two specific questions for the member about this proposed pension change.

First, the government cut back on tax-free savings accounts. It is concerned about people being able to save for retirement. Why not let people save for their own retirement?

Second, the government speaks, often, about concern for current seniors. It should be frank about the fact that this program is not aimed at current seniors at all. There could be a variety of mechanisms, such as cutting taxes for seniors and cutting taxes across the board, but especially for vulnerable seniors, that would actually help seniors who need the help right now.

Why is the government increasing taxes, which reduces the capacity to save, in a way that does not actually help our current seniors at all but adds an additional burden for our businesses in the present time. Why is the government proceeding in that direction, when it has much better, more effective alternatives available?

[Kamal Khera, Liberal, Brampton West, ON]

Mr. Speaker, Canadians want to see reforms to the Canada pension plan. Canadians want and deserve the opportunity to retire with dignity.

Our government, under the leadership of the Prime Minister, has illustrated our unwavering commitment to assisting senior citizens. Our government has increased guaranteed income supplement payments for single seniors. Our government has rolled back changes to old age security, reducing the eligibility age back to 65 from 67. Our government has invested in affordable housing infrastructure.

This legislation governing the Canada pension plan requires that individuals who make additional contributions receive the increase in benefits associated with higher contributions. This reform was established in the 1990s to ensure that the Canada pension plan remains fully funded and financially sustainable.

Canadians are asking for a more secure retirement, and our government plans to do just that.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, earlier the member mentioned what a great result it is for people in the middle class with the income tax breaks, but they do not include people who make $44,000 or less with no children or their families.

She mentioned how important this bill is for the middle class looking for long-term solutions, but apparently, it eliminates people raising children and people living with disabilities. What is the long-term solution for them going forward?

[Kamal Khera, Liberal, Brampton West, ON]

Mr. Speaker, Bill C-26 would benefit all Canadians. Canadians deserve a strong, safe, and secure retirement. Our government has demonstrated and illustrated an unwavering commitment to creating equality and opportunity for women and persons with disabilities. We are aware that more could be done with respect to the dropout provisions for disability and child-rearing to make sure that this expansion is as inclusive as possible.

However, as my colleague also knows, to make any changes to the plan, we need agreement with the provinces. The Minister of Finance will 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.

Canadians are asking for a secure retirement, and our government is committed to delivering on that.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, quite simply, the parliamentary secretary did not answer the simple question I asked, so I will ask it again and hope she answers.

The OAS and the CPP changes the government talks about do not help current seniors. What she is talking about imposes costs on current businesses and on the current economy. We know that businesses are going to suffer. Some businesses are going to close as a result of this. However, it provides absolutely no relief or benefit for current seniors.

Why is the government not contemplating proposals that actually provide benefits for current seniors and strengthen our economy for the future? Why is it not looking at some of these more effective alternatives that empower the private sector rather than going in the direction it is going?