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

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

Mr. Speaker, we know absolutely that the provinces were rallying for increased CPP not very long ago. In fact, one Liberal government was going to create its own pension program, because the CPP was not enough. Now it has not had to do that, or apparently it has indicated that it is not necessary anymore.

I do know Premier Notley in Alberta is very supportive of an increased CPP. However, I would hope that the government would consider making it fair all the way around, for women and persons living with disabilities.

In this negotiation the member talks of with the provinces, what did the government give away? How on earth can we expect our country to thrive if women and those living with a disability are left out? It is inconceivable.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I would like to thank my colleague for a very thoughtful and well-presented speech on the very important matter of the future access to CPP.

As I have shared with my colleague, I have been receiving letter after letter from constituents concerned about what is not in the CPP bill, particularly about the impacts to women who take time away from work, not earning income and will therefore get dropped out from the CPP benefits. They raise the additional concern of what happens if at some point in time they are sharing the work between two spouses, but then it does not work out, there is a divorce, and there are no CPP benefits.

There are all kinds of extrapolations we can look at where certain Canadians are going to be prejudiced by the fact that the government, in its wisdom or lack of, has decided to delete benefits that were once available more broadly to Canadians.

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

Mr. Speaker, I thank my colleague very much for that observation. We know that women, whether they are divorced or face widowhood, are very disadvantaged by a reduced CPP benefit.

I would like to point out that nearly one million Canadians rely on food banks in our country. They do that because they are poor, they cannot manage, and they do not have the income they need. Of that one million, 49% are women. Almost 18% are persons living with disabilities. That paints the picture quite clearly. We are failing these groups.

I recall the days, not so very long ago, perhaps in the mid-1970s, when the travesty of our country was the people who were retired, particularly women, and the stories of them having to live on animal food and not doing well at all. I do not want to go back to that. I do not understand why the government would want to go back to those days.

If we look to the future, we know there will be more and more seniors. We have to ensure they are taken care of, and that includes women and persons living with disabilities.

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

Mr. Speaker, I would like to take a bit of a different perspective in dealing with the legislation before us today. Just over a year ago, Canadians went to the polls and voted for real change. The reason I say that because what we are debating today is not only symbolic, but it demonstrates, in a very real way, the difference between the current government and the previous government.

For many years, when I sat in opposition, I would look to the government and the prime minister of the time, Stephen Harper, for strong leadership on the retirement file, on the issue of CPP. It was not because it was coming from nowhere. The issue was coming from many different regions of our country. Many provinces wanted Ottawa to do something with the CPP. For years, the Conservatives sat in government and chose to do nothing. They have their own mindset about how retirement should work into the future.

I have always believed that the Conservatives were not really big fans of the CPP program. Through this debate, my belief has been reinforced.

Why the real change? Since taking office, seniors have been addressed in a very real and tangible way. Today, we are talking about the CPP. The Minister of Finance reached out to the provinces, listened to what Canadians wanted, and understood the demands of what the provinces also wanted to see. For the first time, we have seen a national government demonstrate leadership by going to the table and working out an agreement among the different provinces and territories on how we can deliver on ensuring a better retirement for today's workers. I believe Canadians as a whole want to see that.

We got the job done. The government introduced the legislation, after getting a historic agreement signed off with the provinces and territories. Now we are debating it today. Future workers will benefit when the time comes for them to retire. This is about having a vision, something the previous government did not have.

I then look at my New Democratic colleagues. They seem to want to continue to give the impression that only they care about seniors. They look at ways to criticize, not acknowledging that in fact what we are doing today is a positive thing. They look for ways in which they can be critical, even though a New Democratic premier is supportive of this.

I would suggest for my New Democrat elected friends across the way that even the vast majority of New Democrat members would in fact support and say positive things about this legislation.

Is it absolutely perfect? As we know, there is always room to be better. The Minister of Finance has made a commitment to bring those issues raised on the floor of the House to the attention of premiers to see if they can improve upon the agreement. However, at the very least, the New Democrats should acknowledge that this has been in the making virtually since day one with our government. Canadians have been waiting for this for more than 10 years.

The member who just spoke said that we had to be sensitive about our seniors and their needs and made reference to food. We have to take a holistic approach in what the government is doing on the senior file. The most vulnerable seniors today are getting a substantial increase in the guaranteed annual income. Tens of thousands of seniors will be lifted out of poverty as a direct result of our government's action to increase the guaranteed income supplement. This is good news.

Again, for my New Democratic friends, they do not have to stand and applaud when the government does good things, but at the very least try to reflect reality and express the truth of the matter at hand. The matter is that our government is committed to servicing and trying to improve the quality of life, not only for future retirement needs but also for those most vulnerable seniors who find it so difficult to make financial ends meet.

I know how serious it is. While canvassing in Winnipeg North, I spoke to seniors who said that they were having a tough time deciding on whether to buy food, or purchase the medications they required or other necessities. Far too many seniors go to food banks as a direct result of this. Our government clearly understands that and has delivered on making a difference by increasing the guaranteed income supplement. However, that is not all. We still have three foundation stones dealing with public pensions. I made reference to two of them. The other one is our old age supplement.

One of the first things this government did within a couple of months of taking office was reverse the decision former prime minister Stephen Harper took when he increased the age of retirement from 65 to 67. I remember it well. I sat on the other side and the prime minister was overseas when he made the announcement that we were in a financial crisis in Canada and that the government would have to increase the age of retirement from 65 to 67. There was nothing to substantiate it. It was a personal opinion of a prime minister who had no faith in other pensionable social programs in Canada. Within a couple of months, we reversed that decision. Now individuals know that when they hit age 65, they will be able to retire and receive old age supplements.

Today should be a happy day. This bill has received support from many different sectors of our society, in particular, our provincial governments that have signed off on enhancing CPP. The Conservatives, on the other hand, talk about why they oppose the legislation. They brought forward a series of amendments. Their argument seems to be that we should not allow for the increase in the CPP because it is a tax. Therefore, they will not support the bill.

It contradicts the actions of the Conservatives on Bill C-2. They voted against Bill C-2, which was hundreds of millions of dollars in tax breaks for over nine million Canadians. Their arguments are not consistent with their actions. When I think of the Conservative Party's real agenda on the CPP, I believe it would be quite content if the CPP were not there. The arguments the Conservatives are using today could be used ultimately in getting rid of the CPP.

I would challenge the Conservatives to change their position and vote with the rest of the members, the Bloc, the NDP, and the Liberals, support the legislation, and oppose the amendments that are being debated.

[Ted Falk, Conservative, Provencher, MB]

Mr. Speaker, I want to thank my hon. colleague, the member for Winnipeg North, for his very passionate speech and for the good work he does for his constituents. It does not go unrecognized.

I also want to note that I am happy he has so adequately expressed the former Conservative government's position of reducing taxes for Canadians. That certainly is a position we are very proud of: balancing budgets, reducing taxes, creating jobs. I thank my hon. friend across the way for identifying that as a Conservative platform.

My question is that in their campaign promises, the Liberals promised to reduce the tax for small business. As he also so adequately stated, this is a payroll tax. Not only will the employees experience it, but also employers. Instead of reducing taxes on small business, this will increase them.

Could my hon. friend explain how he thinks he can justify that?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the member wants to talk about taxes. To me, that is not what this debate is about. This debate is about our future and those individuals who are employed having a better retirement fund in the years ahead. That is really what this debate is all about.

However, if we want to vote on the issue of taxes, all I need to do is refer the member to Bill C-2, something I have already provided comment on. That is a bill that put hundreds of millions more dollars into the pockets of Canada's middle class.

The Conservatives—and I know it is hard to believe—actually voted against it. They wanted to keep the money, not give that tax break.

Therefore, there is a bit of inconsistency in terms of the small business. Hopefully, in my next answer, I will be able to address that.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, I want to thank my friend. I know my friend works very hard in this House every day. I feel sorry for him sometimes, as I do not think he gets enough sleep. I want to thank him.

I listened to the member's good speech. He said a year ago that Canadians voted for change, and real change. I agree with that. That is what they voted for. However, they did not expect chump change, which is what this proposed bill will do. Right now, 4.5% of women receive the maximum benefits under this legislation that we have under CPP.

What real change would this proposed legislation give women, when it is omitted from the dropout period of child-raising and people with disabilities?

My other question is, why has the dropout period for women raising children and people with disabilities been omitted, and why was this not discussed when the provinces met with the federal government?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I can tell the member that, through the Minister of Finance, a series of discussions had taken place that ultimately saw the different provinces and territories come to an agreement. To make the type of changes that are being talked about from the New Democratic Party would require the provinces and territories to come onside. Having said that, we need to also recognize that the premier of Alberta is a New Democrat, and sometimes these kinds of things go through.

Is it perfect? No, we think there is room for improvement. That is why the Minister of Finance has made the commitment to go back to the table to see if we can improve upon this.

However, let us not underestimate the value of the current agreement and how workers into the future are going to benefit by it. There is always room for—

[The Deputy Speaker, Bruce Stanton]

The hon. member for Cumberland—Colchester.

[Bill Casey, Liberal, Cumberland—Colchester, NS]

Mr. Speaker, when I hear talk about Canada pension, I think back to when I was first elected in 1988. I had been in the retail business for 25 years in a small town in Nova Scotia. The thing that surprised me the most after I was elected was how many people I was helping get the Canada pension disability. These were not people who abused the system. These were people with real disabilities and no way to put food on the table. They depended on the Canada pension disability plan. That, to me, is an important role. It is hard to understand how people can speak against increasing the benefits of the Canada pension.

I wonder if the member would tell me if he has had the same experience with people with disabilities. Again, their quality of life goes to zero. They go broke. The minute someone becomes disabled, the first thing that happens is they go broke, and that makes the situation worse.

I would like the member to comment on the disability aspect of Canada pension.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the strength of the individual who posed the question has been well demonstrated through his electoral success, and I commend him on that.

He has identified one of those social issues that no matter what level of government people are elected to, they genuinely care about helping individuals who are in need, and they want, as much as possible, to see social programming. Our benefits programs, including CPP, for disabilities, OAS, and the GIS, are all solid programs. This is why government needs not only to give the programs attention, but to further enhance them whenever possible. We want to be able to provide that hand to try to improve the quality of life of all Canadians, especially those in society who are most vulnerable.

[The Deputy Speaker, Bruce Stanton]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Selkirk—Interlake—Eastman, National Defence; the hon. member for Essex, softwood lumber; the hon. member for Trois-Rivières, Housing.

[Bradley Trost, Conservative, Saskatoon—University, SK]

Mr. Speaker, it is a privilege to speak in this debate and discussion on the CPP, something which affects almost all Canadians. I spoke to this bill at second reading, and it is interesting to see at report stage how the debate has gone forward, or in some cases not gone forward.

Before I get to the main body of my speech, I want to deal with an issue that the parliamentary secretary has continuously repeated, that all of the provinces have come onside to support this change, and citing the Conservative premiers, of which there are very few. It should be noted that the premier of my province, Mr. Brad Wall, said very clearly that the reason he was backing this was because he was concerned that a worse agreement was going to be put in place. This was not exactly a ringing endorsement.

As he said, he was more concerned that a more aggressive Ontario Liberal plan would be put in place. He signed on to the Liberals' changes, not because he thought it was a good idea, but to prevent something worse from happening. When someone endorses something because the person fears the government will do something worse, I do not know if the government can honestly claim that as a ringing endorsement, as was presented to the House. I wanted to note that. I am sure the parliamentary secretary will address that in questions and comments.

When looking at the overlying issue with the CPP, the Conservative Party has objections to it, and the government is pushing it forward. The reasoning is very similar on both sides, but comes to very different conclusions. The government is arguing that for the cost of living and people's retirement, this is a good bill. The Liberals are saying that the cost of living for seniors is too high and it is difficult for them to make ends meet. It is difficult for seniors to make a living, so we therefore need to make these changes so that future seniors should benefit.

Interestingly, we in the opposition, in some respects, are arguing a similar issue. The cost of living makes it difficult, and people need every cent they can get. The Conservative Party is arguing that people should be allowed to keep doing what they are currently doing with their funds and decide for themselves what they should do with their money. As has been noted, this could end up being an $1,100 hit for the average person, assuming the average person pays the maximum. While, for some people, $1,100 a year is not significant, for people whose budgets are tight, that is very significant.

As has been noted frequently in debate, there are studies by the Fraser Institute and other institutions that have noted that almost all of the increased premiums will come from savings. However, some of it will come from consumption. One way or the other, Canadians have a problem. They have a problem because they do not have enough money to pay for their necessities of life, now or in the future. Every circumstance is different, but this needs to be noted.

We are not dealing with abstracts for people at the high end of the income scale, and, frankly, this does not target people at the really low end of the income scale, because the OAS, and particularly the GIS, are used to deal with that. That is how the current Liberal government and past Conservative governments have dealt with the issue of poverty. The CPP deals more with middle-class Canadians, the broad swath, the centre, economically and socially, of our society, and their cost of living.

The question we are really debating here today is how we can make things more affordable for Canadians now and in the future. How can we make things more affordable and create a better standard of living for Canadians in the present, in the future, and in retirement? This needs to be underlined in this whole debate. The largest cost for all Canadians across the board is taxes. In Canada, over 40% of our GDP ends up getting sucked up into taxes. That is the size of it when we put everything together.

One of the reasons why seniors are struggling and having a difficult time today and why the Liberals are arguing that they need increased CPP benefits in the future is because we continually have taxes that are too high. The Liberals like to talk about the one element of tax changes that was positive in their budget, but they do not talk about the positive tax changes from the previous government that they eliminated: income splitting and assistance to families. Parents with children is one particular group that is going to be under fiscal pressure due to these changes with the CPP.

Just think about when in life people have the greatest expenses. When is the time that they have a mortgage? It is also a time that they frequently have their children. People's children are growing up, spending more money, wanting to do sports, and to do things with their schoolmates. Those are the years when people are trying to earn their peak amount of money. It is not their retirement, but their earning years.

Along came the Liberal government. First it eliminated income splitting, which was again a policy that benefited Canadians at the middle of the spectrum of our society. Most Canadians, depending on where they are in life, would have benefited from that for a good portion of their life because we know that as they go through their lives they are all in different income strata for different seasons.

When they are students they are technically very poor, maybe living in their parents' basement. Most of their income may go to pay for tuition, but they get by. They are considered poor.

The years when people are paying the maximum in CPP premiums are often when they have the greatest expenses. They need to take care of their house. They perhaps have parents to take care of. Generally that is when they have children. This is when the government again is coming after people with tax hikes and, as I noted earlier, the elimination of income splitting.

That is why we in the opposition have been referring to the CPP hike as a tax hike. It would take money directly from people, reduce their freedom, reduce their choice in what they could do with it, and give them a worse rate of return than they would otherwise have if they had invested it in private savings plans. This is something that has been documented by researchers looking at this.

For my grandpa, the CPP was a marvellous investment. He paid into it for practically the minimum number of years, and since he lived to be 92 years old he collected well above the average amount. It was fantastic, better than a 20-some per cent rate of return, which was the average for people. He made way more on his investment than he could have anywhere else.

But for people of my age, a generation Xer born in 1974 and younger, the rate of return after inflation for CPP that is invested is barely 2%. That is horrendous. People could do better. That is why we are referring to it as a tax. The government takes the money and people ultimately lose money. It drives up their cost of living.

What could people be using this money for if the Liberals were not taking it away? Electricity prices are going up, in many cases due to the wrong-headed environmental policies of federal and provincial governments. Property taxes are going up, again something that often hits people in their prime earning years with children and families the most. Inflation and various other expenses are all going up. Here we are, taking away more of people's money.

The basic argument is this. If the government is taking money away from people, not returning to them the amount that they should have and could have earned had they been able to invest and control their money privately, it is definitely a tax hike, because what people are doing with this money is subsidizing the government. It allows the government to get away with lower OAS premiums. It allows pension plans that are integrated with the CPP to get away with lower premiums. People are losing money. That is why it is a tax hike. It is a tax hike that raises people's standard of living and, as has been noted, taxes are the most expensive thing that we have to deal with in our society.

That is why I and my fellow Conservatives oppose this bill. It is the wrong policy for Canadians. It is a bad investment. It takes money out of people's pockets. That is why we as Conservatives are opposing it.

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

Mr. Speaker, my question for the member for Saskatoon—University is this. If the member wants things to be more affordable, should they not ensure that people actually have money available to them in the future? Does the member not believe that planning for the future through OAS, GIS, and through CPP is a worthwhile venture? Does he believe the CPP should be planned for the future, prepared for generations to come? Or does he believe it should be scrapped altogether?

[Bradley Trost, Conservative, Saskatoon—University, SK]

Mr. Speaker, I am not arguing for the scrapping of the CPP altogether, and one of the reasons is the basic inertia of the system. To redesign something purely from scratch is not necessarily the best idea. What we did in government was, instead of expanding something that was not the best, we chose other vehicles, like TFSAs, to give people better rates of return, more freedom, and more flexibility.

Therefore, while CPP was really a great deal for people who got in early, it is a bad deal for people of my generation. The entirety of CPP is a bad deal for people of my generation. However, to unwind something that substantive and large is very difficult, and there are better ways to do it, but we are where we are and so we will go forward.