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

[Kamal Khera, Liberal, Brampton West, ON]

Mr. Speaker, as I said, a stronger national pension plan will make our economy and Canadian businesses more sustainable.

Our government has made a strong commitment to helping small and medium-sized businesses innovate and grow. Small and medium-sized businesses are the backbone of our economy.

As Canadians retire with their enhanced Canada pension plan, they will have more money in their pockets to spend. They will purchase goods and services from businesses and in turn stimulate our economy. This is the long-term vision we are looking at. We will continue to deliver on the commitment we made.

[Sylvie Boucher, Conservative, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Mr. Speaker, I rise in the House to speak once again to Bill C-26, which seeks to expand the Canada pension plan.

We have always known that the Liberals do not listen to anyone except their cronies. Although they like to stand up and tell us that they are defending the middle class, I have my doubts. In fact, the more they talk about defending the middle class, the more they raise taxes, and the more money they take from taxpayers' pockets, which does not help the middle class.

Every time the Liberals introduce a new bill, we can expect taxpayers to be forced to fork out more for a new tax. We all pay taxes. The government is taking even more money out of taxpayers' pockets.

The Liberal mindset is this: I am, I demand, and I think for Canadians. We on this side of the House believe in Canadians and the middle class. We believe that taxpayers need their money. We know perfectly well that Canadians, not the government, are in the best position to manage their own money.

If the Liberals had listened to what anyone other than their cronies had to say, they would realize that not everyone agrees with them.

I have some quotations from certain people to share. On May 31, 2016, the senior director of economic, financial and tax policy at the Canadian Chamber of Commerce said:

...we're worried a big tax increase is headed for the middle class like an elbow to the chest....This comes at the worst possible time—an economy reeling from weak commodity prices and slower consumer spending will be lucky to eke out growth of 1.5% next year. It’s difficult to stimulate the economy while pulling money out of the pockets of Canadians.

On June 20, 2016, the president and CEO of the Canadian Federation of Independent Business said:

It is tremendously disappointing to see that finance ministers are putting Canadian wages, hours and jobs in jeopardy and willfully moving to make an already shaky economy even worse.... It appears that jobs and the economy are not particularly high priorities for the governments that have signed off on this deal.

We have been talking about seniors a lot. The basic principle is not a bad one, but seniors who are 70 years old now will not need help in 40 years. They need help right now. Seniors who are 70 now will never get this help because it will not be available for another 40 years. The Liberal government is bringing in a law that will not take effect until 2019, which is so interesting because that is when the next election happens. That is a very Liberal way of doing things. The Liberals never really cared about the middle class. They cared, as always, about themselves.

It is one thing to hold $1,500 fundraising cocktails and invite a bunch of millionaires, but the middle class is having a hard time making ends meet. The economy is faltering. All of those grand Liberal principles are just a smokescreen. The Liberals talk about giving this to people, and they think we are not politically savvy enough to see through their little game. If changes are to be made, it should not take 40 years.

It is good to think about the long term, but we also need to think about our seniors who need help now, not 40 years from now.

That is why I will be voting against this bill. It is full of holes. It is not what the Liberals say that worries me. It is what they never tell the public. They give nice speeches and make headlines, but what scares me the most is what the Liberals are not saying.

Middle-class families are being taxed to death and are struggling to make ends meet. Many of them will now have a harder time. For example, it will now be even more difficult for new graduates to pay back their student loans or buy their first home. The Liberals did away with the old rules, and now young families will be unable to buy their first home. It will also be more difficult for companies to create jobs and increase wages.

Every time I hear the Liberals talking about their plans, I worry about what they are not saying because that is what is dangerous. No one is against virtue, but the bill before us says in black and white that it will take 40 years for the system to work properly. Not even I will see that money, and I am in my early 50s. In 40 years, I will probably be too old to remember that the Liberals implemented this measure. Our seniors need help today, not in 40 years.

What is more, the same question keeps coming up: where are the Liberals going to find this money? The Liberals are giving out money hand over fist to everyone right now. However, as far as I know, money does not grow on trees. Everyone dreams of a better future, a better life, and a better situation, but that takes money. It is not always pleasant to live on credit. As taxpayers, if we were to live on credit, the bank would not hesitate to come and take our money and our assets when the bill comes due.

I would therefore like someone to explain to me what the Liberals do not understand. We will not vote for this bill as long as it does not produce an immediate effect. The effects of this bill will not be felt for a very long time. However, our seniors need help now, not 40 years from now.

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

Mr. Speaker, I think it is important every so often to reinforce what we are actually debating here. This is a historic agreement.

For many years I sat on the opposition benches hoping that some day, Stephen Harper and the then Conservative government would do something with regard to the CPP. We finally have strong national leadership and have actually seen provinces of all political stripes, meaning NDP, Conservative, and Liberal, come to the table. We have an agreement with those provinces and territories. That is what we are debating today. It is about the future of pensions for today's workers.

Only the Conservatives have determined that this is a bad piece of legislation. Why does the Conservative Party believe that everyone else is wrong and that it is the Conservatives who are right? I would suggest that the Conservatives have lost touch with reality and with Canadians.

[Sylvie Boucher, Conservative, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Mr. Speaker, I thank my colleague for the question. I will be honest, this is not only about the Conservatives.

The hon. member might be under the impression here in the House that it is just the Conservatives who are against this bill. However, when we go around some of the poorer ridings, we see that people do not understand what the Liberal government is trying to accomplish with this because the money is needed now, not 40 years from now.

I am glad to know that my colleague across the way would have liked the Conservatives to do something. Unlike the hon. member, we think that makes a lot of sense. The Liberals do not believe in Canadians, but I do. I believe that Canadians are the only ones who can say what they want to do with their money, but the Liberals do not believe that because they always think they are above everyone else.

As the saying goes, when the Liberals stand up, the good Lord rests. I am sorry, but when the Liberals stand up, I sit down because I do not believe a word they say.

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

Mr. Speaker, I thank my colleague for her speech.

Like her, I believe that the government could be helping seniors who are retired now. Among all seniors, 30% of women who currently live alone live in poverty. That number has tripled over the past 20 years.

Could my colleague elaborate specifically on the situation of retired women living in poverty and how this bill is only going to make matters worse for them?

[Sylvie Boucher, Conservative, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Mr. Speaker, I thank my colleague for her question.

Indeed, I could speak at length about women living in poverty because I was poor at one point.

This bill brings into focus the situation of a segment of the population that is already struggling. The bill never refers to these people and that bothers me. We have heard some fine speeches. However, as I already said, will repeat, and will continue to say, it is what the Liberals have left unsaid that frightens me.

They never once mention women living in poverty or single women with children who struggle day after day. I know what that means because I struggled my entire life. I was a single parent when I was 28 years old and now I am a member of Parliament.

I am so proud to stand with the Conservatives for the simple reason that I have come to understand something: when you struggle in life, you end up succeeding; but if you rely on promises that are not kept, like those of the Liberals, you can go on being poor for a long time, because those promises are just empty words.

[Jati Sidhu, Liberal, Mission—Matsqui—Fraser Canyon, BC]

Mr. Speaker, it is an honour to rise in the House today to express my support for Bill C-26. I am speaking today because I believe Bill C-26 will benefit my constituents in Mission—Matsqui—Fraser Canyon.

As members know, a strong Canada pension plan was a core element of our government's bold plan to put people first and to help the middle class, because we understand that a strong economy starts with a strong middle class. That is precisely what we are doing by enhancing the Canada pension plan.

Middle-class Canadians in my riding are working harder than ever, and many are worried that they will not have set enough money aside for their retirement. The Department of Finance has examined whether families nearing retirement are adequately prepared for retirement. About one in four Canadian families approaching retirement, or about 1.1 million families, are at risk of not saving enough to maintain their current standard of living.

The risk is highest for middle-class families, families without workplace pension plans are at even greater risk of under-saving for retirement. A third of these families are at risk.

I spoke with many seniors in my riding during the last election who were concerned that they will not be able to afford basic costs before they receive their next guaranteed income supplement cheque. Our government has to address this by substantially increasing the GIS, and also honouring our campaign commitment to lower the age of retirement from 67 to 65.

However, they were more concerned about their families' futures. They wanted to know their grandchildren would have the same security going through life that they had. Hearing that on the doorsteps from residents of Mission—Matsqui—Fraser Canyon is why I support Bill C-26.

Younger Canadians across the country and in my riding, who tend to have higher debts than the previous generation and in most cases will live longer than the previous generations, face the challenge of securing adequate retirement savings at the time when fewer can expect to work in the jobs that will include a workplace pension plan.

We are aware of the need to help Canadians save more. Saving more will mean they are more confident about their future and about their ability to secure a dignified retirement.

I am proud to be able to say that we are delivering on our commitment to do just that. Working in close collaboration towards a common purpose with governments across Canada, we reached an agreement that will give Canadians a more generous public pension to help them retire with dignity. The goal of a stronger CPP is truly a high priority, which is shared by Canadians from coast to coast to coast, with 75% in favour of a strong public pension plan.

The challenge that government faced in drafting an enhanced CPP was that the current plan was not accumulating benefits quickly enough to meet the future needs of Canadians in the world where workplace pension coverage continues to decline.

The enhancement that the Canadian government agreed on would do two things to address this. First, it would boost the share of annual earnings received during retirement from one quarter to one third. For example, an individual making $50,000 a year in today's dollars over his or her working life would receive about $16,000 per year in retirement instead of the roughly $12,000 they receive today.

Second, the enhancement would increase, by 14%, the maximum income range covered by CPP. This means, once fully in place, the enhanced CPP would increase the maximum CPP retirement benefit by 50%.

In other words, the current maximum benefit of $13,110 in today's dollar terms would increase by nearly $7,000 under the enhanced CPP, bringing the maximum benefit up to almost $20,000.

The legislation also includes enrichment to the CPP disability and survivor benefits. For most Canadians these increased benefits would come from just a 1% increase in contribution rates. This enhancement is set to help young Canadians just entering the workforce the most. They would see the largest increase in benefits. This means that young people throughout my riding and across Canada would have a Canadian pension plan that fills the gap for those who do not have a workplace pension plan.

Having grandchildren myself, this is important for me, knowing that young people today will have a CPP that ensures their security when they grow older and eventually retire. We are also making sure to give individuals and their employers plenty of time to adjust to this modest increase, making sure it is small and gradual starting in 2019.

Today's legislation as agreed upon with the provinces and territories would ensure that low-income Canadians are not financially burdened as a result of their extra contributions. It would do this by enhancing the working income tax benefit to roughly offset incremental CPP contributions, leaving eligible low-income Canadians with little to no change in disposable income, while still securing a higher retirement income for them.

The enhanced CPP would simply build on the core existing CPP benefits, in a smart, carefully targeted, and effective way that reflects the extensive research that governments brought to the table in crafting this enhancement to the benefit of working Canadians. Taken together, it is a comprehensive package that would increase CPP benefits while striking an appropriate balance between short-term economic considerations and longer-term gains.

What does Bill C-26 mean for my constituents and Canadians across the country? Enhancing the CPP means first and foremost there would be more money from the CPP waiting for Canadians when they retire. This means they would be able to focus on the things that matter like spending time with their families rather than worrying about making ends meet. It means reducing the share of families at risk of not saving enough for retirement as well as reducing the degree to which Canadians are under-saving.

A stronger CPP is also the right tool at the right time to improve retirement income security of young workers. It is an opportunity for today's hard-working Canadians to give their children, grandchildren, and future generations a more secure retirement. Since I was elected last October, I have had the honour and great responsibility of representing my constituents in Ottawa. I have enjoyed time with young people in my riding, local schools, community groups, and other events. Their ability to save money for a secure and comfortable, dignified retirement is very important to me.

This enhancement of the CPP and this investment in Canadians would ensure future generations are secure in their retirement. This is why I will be voting for Bill C-26 and I encourage my colleagues from every party to do so as well.

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

Mr. Speaker, my colleague said he is looking forward to improved retirement security for his grandchildren. I, too, have a number of grandchildren. However, how will it be more secure for our grandchildren if, as Dan Kelly said, two-thirds of small firms have to freeze or cut salaries, or even reduce hours or the number of jobs? If our grandchildren do not have jobs, it does not matter what the CPP will be, because there will be no CPP for them without jobs.

Also, the member mentioned once these measures are fully in place, but he failed to address the fact it will be 40 years from now. How can we really believe that these measures will help current retirees when they clearly will not be implemented for a full 40 years?

[Jati Sidhu, Liberal, Mission—Matsqui—Fraser Canyon, BC]

Mr. Speaker, I am pretty sure we all remember when CPP was introduced back in 1965-66. Even then, those across the aisle said that businesses would close as a result, but look at the result today. Our seniors have a better retirement from the CPP.

My government today understands the need to enhance the CPP so that the next generation can have a decent retirement.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, my colleague made a couple of statements on what the bill would do for our grandchildren and children going forward. He gave us a little bit of a history lesson about when the CPP was introduced in 1966, but he never mentioned the 1977 ruling when the Liberal government at the time introduced legislation so that people dropping out of the workforce to raise children and those living with disabilities would not be penalized as a result.

Now, in 2016, Bill C-26 calls for enhancements to the CPP, but it eliminates the dropout periods for people in the future. What will that do to our grandchildren and children, and why was it omitted?

That is the main question: why was it omitted?

[Jati Sidhu, Liberal, Mission—Matsqui—Fraser Canyon, BC]

Mr. Speaker, I am proud of the work our government has done with the provinces and territories to enhance the CPP. However, we are aware that more could be done with respect to the dropout provisions as a result of disability and child-rearing. However, any changes need the approval of territorial and provincial governments. The finance minister is fully aware of that, and he will bring that issue to the meeting with the territories and provinces in December.

[Ted Falk, Conservative, Provencher, MB]

Mr. Speaker, we know that small businesses are the big job creators in our country. We know that for every extra $1,000 in CPP payroll taxes an employee is going to pay, the employer is also going to match that contribution. Therefore, for a small business with 20 employees, that will be an additional annual cost of $20,000 directly out of its income.

If a small business is to incur that additional cost, what does the member think that will do to its ability to increase employee wages? An employee's income is already going to be reduced by $1,000 because of the CPP contributions they will have to make. Therefore, they will get no raise and will have a reduced income. Where does he think that will leave the employees?

[Jati Sidhu, Liberal, Mission—Matsqui—Fraser Canyon, BC]

Mr. Speaker, as I mentioned in my speech, and as negotiated by the Minister of Finance with the provincial and territorial finance ministers, the changes to the CPP will be phased in over seven years, starting in 2019 to 2025, to ensure that the impact is small and gradual.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I welcome the opportunity to speak today to Bill C-26, because it has the potential to address an issue that is so very vital to our identity as Canadians. The manner in which we care for each other is the measure of who we are as a people. We have much work to do in many areas to ensure accessible and affordable health care, child care, education, and housing for every Canadian so that none of us is left behind. We must address the shameful colonial legacy of inequality forced on this nation's indigenous peoples and ensure, as the bill before us today purports to do, that every Canadian is able to retire in dignity and security.

While the measures outlined in Bill C-26 represent incremental progress in providing retirement security for Canadians, they fall short in many aspects and completely fail in one critical regard. I would like to speak to these shortcomings in the time I have here today, in the hope that the current government will do the right thing and fix the very serious flaws in this bill.

We know that Canadians take pride in their work, the proceeds of which allow us to care for our families, raise our children, and pursue our dreams. Whether in the private sector, public service, or the military, the work of Canadians contributes to our economy and weaves our social identity. It is reasonable to expect and to hope that in a country as rich in resources as ours, when Canadians come to the end of their working careers they are able to retire in dignity and security. This is the reason we created the Canada pension plan, a system so successful that it is considered the international gold standard. We extend our gratitude to Stanley Knowles, an incredible former member of the House who proposed the Canada pension plan and pursued it so that Canadians could be safe in their retirement years.

We know, however, that the CPP as it currently stands falls short of providing full retirement security for Canadians. That is the reason New Democrats have called for what we know are affordable and sustainable enhancements and improvements to the CPP in order to ensure that Canadians are able to retire in dignity, not just now but for generations to come. New Democrats stand with the Canadian labour movement in calling for a doubling of CPP so that it will provide benefits set at 50% of pre-retirement income. That is sustainable, affordable, and necessary, especially when we consider that defined pension plans from employers, including the Government of Canada, are under serious attack.

Many Canadians do not have adequate savings to maintain their lifestyle upon retirement and the need to address income insecurity is becoming ever more urgent. A large part of this problem is fuelled by the erosion of workplace pension plans to the point where only six in 10 working Canadians have one. According to the finance minister himself, young people today face a future of precarious work in which the odds of staying in a job long enough to benefit in retirement from a private pension plan, if one exists, are slim.

The enhanced CPP is a plan that would benefit a new generation of workers entering the workforce, but would do little to alleviate the retirement income crisis of those approaching retirement today. The New Democrat platform includes a national seniors strategy to address the issues of affordable housing and home care, pharmacare, and health care, as well as income security. My Motion No. 21 calls on the government to adopt that strategy. The New Democrat member for Saint-Hyacinthe—Bagot has introduced Bill C-245, outlining a poverty reduction strategy for all of Canada. I encourage the government to consider the informed and considered proposals put forward by New Democrats on these issues, supported by extensive community and expert consultation.

Now I would like to move back to the bill that we have before us today and address the major failure of Bill C-26 to include dropout provisions for the enhanced portion of the CPP benefits it proposes.

As an activist who has fought for equity and equality of access for women my whole life, I am appalled at the backsliding that will penalize those who drop out of paid work to raise children or as a result of disability. More often than not, those penalized workers are women.

Under the current system, women receive CPP payments that are 13% less than men's. Without the child-rearing dropout for the enhanced benefits, that gap will grow. The narrow eligibility criteria and cumbersome application and appeals process create a system in which CPP disability benefits are extremely difficult to obtain. People who manage to collect CPP disability benefits should not be penalized because they have dropped out from making contributions due to disability.

Women and persons with disabilities are more reliant than other Canadians on public pensions like the CPP, after having faced a lifetime of economic disadvantages. They earn less than their male counterparts and when they raise children they have fewer dollars to contribute to the CPP and are penalized as a result. They receive far less from the CPP because it favours higher-income workers. Seniors with disabilities have higher than average expenses, and it is criminal to overlook their needs.

The special dropout provisions correct some of that systemic discrimination and are an important equity feature of the Canada pension plan. The current dropout provisions introduced in 1977 by a certain Monsieur Trudeau, and lauded as recognizing child-rearing as a value to Canadian society and our economy, do not apply to the additional or enhanced benefits that would be created by this particular legislation. One has to wonder whether the Liberals of 2016 value child-rearing and child care even less than their predecessors.

Women and persons with disabilities will suffer a penalty as a result of Bill C-26, and this discrimination will be most severe for women with disabilities. Are these the sunny ways our Prime Minister mentioned or is this part of his declaration as a feminist?

The Liberals may try to cite costs as a factor in their decision to omit the dropout provisions from the new enhanced benefits, but our very preliminary calculations show that the costs would be very low. Using the available information, the estimated cost of dropout provisions for each employee and each employer would be just 0.2% of a worker's average salary. This is a small price to provide such an important and significant benefit.

Failure to fix this problem would cost parents significantly. Calculations based on figures from Service Canada's website indicate that a mother who spent six years raising children will get between $800 and $1,200 less per year than she would with the dropout provisions in effect for her enhanced contribution.

New Democrats fought hard for changes to the CPP and for increases in CPP benefits. We welcome the changes tabled by the government, but we can and should do better. We need to address the needs of seniors today, as well as those of future generations. To that end, in addition to the measures I have already outlined here, we will continue the fight to stop the clawback of GIS benefits. New Democrats call on the government to follow through on its promise to develop a seniors price index as soon as possible.

We can do better. We must do better. Our future is literally at stake. Our reputation as a progressive society is on the line.

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

Mr. Speaker, one of the things I have talked about extensively is the importance of the government of the day getting support from the different levels of government, specifically provincial governments. We have been waiting a long time to see an agreement in place and finally have that agreement. That is why we have this legislation.

Could the member comment on how encouraging it is when provincial governments of all political stripes—New Democrat, Liberal, or Conservative—say this is a good thing for future generations and all Canadians.