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, for some time I was the pension critic, and I did a great deal of work in terms of studying this particular question. One of the things that I learned, and which I think is quite widely known, is that investment in the CPP is the gold standard. Because of the wisdom of those investments, the return is quite significant, compared to private pension plans, which depend on the vagaries of the stock market; one day we are up and the next day we are down. Quite frankly, depending on that possibility is something that many seniors are most certainly not willing to gamble on.

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

Mr. Speaker, let me suggest that the hon. member has some dated information, because the Fraser Institute did a study, and like I said, for people my age, people born in the 1970s and later, this has been an awful rate of return.

I understand that some people prefer the security of a system where everything is more clearly laid out for them. However, different people have different views, and that is why we should give them the choice and not continually force everyone to put the entirety of their savings into the Canada pension plan. There are other things out there, like RRSPs and TFSAs.

The goal from the government's perspective is to keep people out of poverty, not to provide a middle-class income with pensions, and allow people to decide how they want to do their savings. Do they want to spend their money now or do they want their money later for retirement? This is why we give people the freedom, because everyone's situation is different.

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

Mr. Speaker, I have to chuckle at the Liberals. Any time we question their plans to undertake major expansion of government programs, it must be because we are against the program entirely. Whatever happened to striking the right balance between a public pension program and also preserving space for private savings?

We have a government that is cutting back on tax-free savings accounts. We have a government that does not support those more effective changes that encourage private savings. It is not undertaking measures for current seniors, but is instead talking about future seniors by taking more money out of the economy at the present time.

Could my friend talk more about the cost that this will have on small business? We have heard from the Canadian Federation of Independent Business and others about the significant negative impact that this will have on the economy, on the ability to create wealth that benefits seniors and all Canadians.

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

Mr. Speaker, labour and capital are some of the basic inputs into business. The way CPP is structured, it has the effect of a payroll tax, which is a tax directly on labour. This means it is a tax on productivity. As we tax productivity, it makes productivity naturally less productive, because the tax is slowing it. Therefore, it is making it more difficult for businesses to hire, it drives up the unemployment rate, and lowers businesses' profits. It makes a business more difficult to succeed, and therefore makes people less likely to take risks.

This is bad for the economy. Taxing productivity is the worst thing we can do if we want to grow the economy. We should target consumption, but instead the Liberals here are targeting productivity, and we are all losers for it.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, before I get started with my remarks, specifically I would like to reference the previous speaker. At one point during answering questions he talked about the CPP and not using it as an opportunity to provide middle-income opportunities, yet earlier on his speech he talked about how it was the gold standard that his grandfather came to admire so much. We are left wondering whether or not the member thinks we need to move away from what CPP used to be as opposed to just arguing against what might happen or what he perceives to be happening.

When we talk about this issue, the first thing we need to identify is the fact that there are changes in the workforce. The workforce today is not what it used to be decades ago. In fact, there are far fewer people who are receiving employment pensions or pensions that are being paid for by their employers. The fact of the matter is that in the fifties and sixties, there used to be robust pensions that were set up by employers to pay into these pension plans so that people could have that security when it came time to retire. Many people did enjoy that benefit and take advantage of that.

However, even within those pensions it is changing. Those pensions that used to be so reliable are not as reliable as they used to be, as we see companies and employers starting to do things for various reasons that affect those pensions.

Not that long ago in my office in Kingston and the Islands, I had a couple of former executives from manufacturing plants that used to operate in Kingston but unfortunately do not anymore, to talk to me about what companies were doing to avert, whether directly or indirectly, paying those pensions out. That just creates less stability and less reliability of the employees to make sure they have that security when they retire, eventually.

It is not just about the changes in the workplace, it is also about young people and what they are coming to expect. Years ago young people could conceivably leave with a high school education, get a good paying job, whether in manufacturing or another sector, that provided them with a pension, that provided them with security during their employment, and then afterwards, provided them with a pension. They could live a comfortable life off that, but things are much different for younger people now.

We have pages who come to this House to help out. Sometimes I look at them and think, is it not much different for them. They are expected to get a university degree or a college degree at a minimum. The vast majority of graduates then go on to post-graduate work, and the debt they incur as a result of that is something they have to carry for many years into the future. They have to start planning to pay that back.

Couple that with the fact that more and more young people now see it more unreasonable that they will actually own a house. There are more people now than ever before who actually come to terms with the fact that they might be renting forever and not actually owning.

As a government it is our responsibility, as this legislative body it is our responsibility to make sure that our society has those reliable and predictable means of knowing that they will be taken care of in the future.

There is also another change in the demographics of then versus now, and that is with respect to the haves and the have-nots. Quite frankly, there are more people who have and many more people who have not, and the middle, in between, is shrinking dramatically. It is changing the way Canadians view that security and stability for the future.

I would submit that it is time that we take a serious look at how we can implement policy to make a change and create a greater security among Canadians. That is about planning for the future, and ultimately it is about what I like to think of as preventive maintenance.

We hear these arguments from the other side of the aisle about spending so much money, forcing small businesses to spend money, and I will get to that point in a second. The one thing we do not talk about is what happens if we do not do this. What if we do not make sure that we are setting up the security now for later? We will pay for it one way or the other.

If we do not pay for it now by making sure the proper measures are in place for CPP, or whatever other measures might come forward, later on we are going to be taking care of those people, and we are going to be paying for it then.

When I was mayor of Kingston and I was on the health board, I remember the frustration of the health unit that the government was always so unwilling to put money into preventive health care. It was always about reactive measures.

My submission is that this government is doing the exact opposite of that. This government is looking at setting up preventive measures so that generations from now, young workers are properly taken care of and have those measures. By no means is this setting up a middle-class lifestyle. This is providing the bare minimum. This is providing a small portion of what people will actually need to retire.

I also want to address another topic that has come up on the other side of the House today, and no doubt I will be asked a question about it, so maybe I will pre-empt that by talking about it now. It is with respect to small businesses. I am a small business owner. At any given time, I have four or five employees who work for our small business in Kingston. I have no problem with this small increase. We pay source deductions just like every other business does. We pay EI, CPP, and WSIB, and these are necessary to make sure that society is being taken care of. We respect that as a business.

With regard to the small increments over the six-year period between 2019-25, the question is how small businesses will deal with this. We have heard that asked in the House today. The reality is that small businesses have to look at ways they can make this work. They have to find alternatives where necessary. They have to look for opportunities where they might not currently exist. The reality is that in any business, any added cost, whether it is a cost for a product or for a service to add to the business, adds to the bottom line and ultimately adds to an increase in whatever goods or services the individual is selling.

On the point that businesses will have to close their doors, although we would hate to see that and would hope it does not happen, I would suggest that it is a very unlikely scenario.

This is something the Liberal Party ran on and talked about in the election. This should come as no surprise to anyone that we are taking serious action when it comes to CPP and that we are taking the time to make sure that future generations are taken care of. It is about providing dignity with respect to income security for future generations.

Quite frankly, this is the right thing to do. I am extremely supportive of this piece of legislation, and I know that future generations will look back on this and regard this as a pivotal shift in CPP in the direction of helping plan for people's futures.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, in terms of costing, my colleague touched on health care. I have to remind him that in terms of preventive health care, all of us will agree that this is a cost that comes from businesses and individuals to the provincial government. The Conservatives gave the provinces a 6% increase per year. The Province of Ontario used to brag about cutting health costs to 3%. I am wondering what the member's comments would be on the Liberal health minister in Ontario who did not use the money we gave him to supply health care and preventive medicine.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, that is very loose connection. I spoke to my time on the health board and a particular issue we had.

In any event, if the member is looking for me to say that at some point or another I have, can be, or was critical of the provincial government, yes, as the mayor of a municipality in Ontario, we obviously took positions that were sometimes critical.

I cannot recall this exact reference the member is bringing up other than to say that, yes, there are always times when municipalities have to show the provincial government if they are not happy with them. I would encourage any municipality to do that.

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

Mr. Speaker, on a point of order, during the speech by the member for Kingston and the Islands, I saw the member for Calgary Nose Hill come in, under the camera over there, and use her cellphone, appearing to take a picture in this general direction. Could the Speaker address that?

[The Deputy Speaker, Bruce Stanton]

I thank the member for Laurentides—Labelle for his intervention. I did not see anything in particular. We will have a look to see and will check. Members will know, of course, that the use of smart phones for recording video, audio, or photographs in the chamber is not allowed. I thank the hon. member for bringing it to our attention. I am not able to respond to it at this particular moment. I did not see anything that was against the rules of the House. We will take it up and see if there is anything we can do.

I was going to say, just before the hon. member for Laurentides—Labelle made his point of order, that for the benefit of all hon. members, some members may have seen the last question and comment as not particularly relevant to the hon. member for Kingston and the Islands's speech, and that may be true in the form of it. However, hon. members should know that when they raise a matter in the course of a speech that may not be exactly on topic with respect to the question before the House, it is absolutely relevant if another member wishes to pose a question on it. Members would probably recognize that.

By the way, I am not taking the hon. member for Kingston and the Islands' time. Questions and comments.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, thanks for that clarification. I can assure you that I am not recording. I do not think I am capable.

I want to share a letter written to me by a constituent, completely unsolicited. I want to share in the House what she said:

Now with this exclusion of the child-rearing dropout provision in the proposed expansion of CPP, I'm even more concerned that those making the decisions are either inadvertently or intentionally excluding this work from the social policy conversation. If it's an error, then there is a dire need for more diverse voices and experiences to be involved with policy development, and I want to know how this gap is going to be redressed.

She has written to the Government of Canada to answer that question. I wonder if the hon. member could respond to that.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I am not the Government of Canada, so I cannot answer that question, which was sent to the Government of Canada, other than to say that, as the parliamentary secretary pointed out, the Minister of Finance had indicated that there is always room for improvement and room to look at ways to do things better. He had committed to going back and having further discussions with the provinces.

[Jenny Kwan, NDP, Vancouver East, BC]

Mr. Speaker, I am curious about how the dropout provisions got taken out to begin with.

If the government was at the table with provincial and territorial leaders, someone had to raise it. Did the government raise it? Did the minister raise it? Did his officials raise it? How did it come to be that it is actually not part of this important bill?

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I am not going to repeat what I just said, because I think I covered it.

The important thing is to look at what this bill actually is doing. This bill will change the lives of future generations. This bill will contribute to the security of young people today as they move toward retirement. More importantly, it will contribute to their faith in a system that will have security for them later on.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, it is an honour for me to rise today in the House of Commons from my new perch here in the back row. It is my first speech, since taking this spot, to engage with more Canadians. As I said when I was first elected and sat in the corner over there, any seat in this chamber is a true honour to occupy, and I think all members on all sides would agree with that.

I am glad to be speaking again about CPP reform and specifically about Bill C-26, because this, yet again, is an example of a government absolutely disconnected from the reality of the economy.

We have a jobs crisis in Canada right now, and this legislation would lead to fewer jobs. The finance department has confirmed that.

It is a jobs crisis of epic proportions, and the Prime Minister and the finance minister have done nothing. In fact, they have made it more difficult for employers to hire people, and I will spend a few moments talking about that.

Where is the crisis most acute? It is in Alberta, where 200,000 Canadians, families, are without the certainty and the confidence a job provides. If that alone is not a crisis, I do not know what is. I am very proud of my colleagues from Alberta who have been raising this in the House daily for the last year. We have yet to see a plan of any sort from the Liberal government.

The epicentre of our jobs crisis in Canada is in the west, which we have to remember kept Canada moving forward through the great recession of 2008-09, when Canada led the G-7 in economic growth and job creation after the worse recession since the thirties. We relied on family members in Alberta, Saskatchewan, British Columbia, and Manitoba, and now the government is turning a blind eye to that crisis.

In Calgary, the unemployment rate is 9%. People were coming from around the world to work there because of the opportunities in the last generation. The government has no plan. The unemployment rate in Edmonton is roughly 8%, and there is not even an acknowledgement, in a serious way, of that prolonged state of affairs.

Let us look at whether this is just a global commodity cycle, which I have heard members of this government sometimes suggest, instead of their inaction. Let us look at the parliamentary budget officer's recent report on the labour market. Let us look at what the PBO found on job creation in Canada. I will quote from page 1, which really summarizes the PBO's report,

The Canadian economy created 96,000 (net) jobs from Q3 2015 to Q3 2016, which is half the average annual gain of 192,000 over the previous five years.

That is when our party was in charge of the economy, so the Liberals are not even batting half our average. I will continue.

Job gains from Q3 2015 to Q3 2016 were entirely part-time and mostly in the private sector. Full-time and public sector employment contracted.

Does that not underscore the crisis we are experiencing? Is that not a call to action for the Liberal government? When is the government going to come to grips with the economy?

The $30 billion the Prime Minister has spent to put us in deficit has created zero full-time jobs. We will hear the Minister of Innovation and the ACOA minister, who is in Mississauga, I might add, speak about jobs, but they are part-time jobs.

We remember the election, when the Prime Minister, the third-party leader at the time, said that Canada was in a recession. That was false then, and it was proven false afterward. He said he would spend no more than a $10-billion modest deficit. That was another false claim. He spent $30 billion. Why did he say he was going to go into deficit? It was to stimulate job creation. That is false. He has created zero full-time jobs, according to the PBO. This is the job crisis we are in, yet the Prime Minister is going around the world, spending our money elsewhere, and has no plan for job creation at home.

The last time I rose in the House to speak on this very subject, 2,000 jobs at Bombardier were lost, so this is not just a job crisis in western Canada; it is a Liberal job crisis.

What is worse, the unemployment rate for young people has remained fixed at 13%, which is unreasonably high. What was the response of the finance minister? It was that our young Canadians should get accustomed to job churn. That is shameful absence of leadership. In fact, I think it is the modern equivalent of “Let them eat cake”, a comment that is disconnected from the reality our young people are facing. Rather than saying “We're working on innovation jobs, working on clusters, and making sure there are more people going into the STEM fields and coding”, he said, “You'd better get used to unpaid internships and being underemployed”. That is a failure of leadership.

Why are we in this crisis? Taxes are going up on job creators and entrepreneurs, who are highly mobile. Taxes are going up on small and medium-sized businesses that have had their previous tax reduction decreased. We have a carbon tax, which on the weekend the environment minister said would make our economy more competitive, showing the height of her disconnect from reality. Today, we are discussing a payroll tax. In one year, the run up in the deficit and the taxation of people, businesses, and consumption is unparalleled in Canadian history. In fact, it would take multiple Liberal governments of the past to introduce so many different types of tax increases all in one year.

Getting back to Bill C-26, what did Finance Canada's own report say about the CPP reforms? It said that 10,000-plus job losses would result from these reforms in the bill in the coming years. We are in a job crisis. We are creating a carbon tax that would raise the import costs of manufacturers in Ontario, and the costs of farmers in the west and across the country, and of people who are hauling lobster and trying to get it sent over to Europe to be sold, and of the lumber industry. Higher costs on all those people translates into higher costs for families and seniors. Now we are doing a payroll tax that the minister's own department has said will lead to 10,500 job losses in the coming years. His own department has said so. It is staggering.

What have the leading groups that work with employers said? The Canadian Chamber of Commerce and the Canadian Federation of Independent Business have both implored the government not to bring in a payroll tax at a time when we are trying to get corporations, small and large, to use some retained earnings to hire one or two more people. We are putting a payroll tax on them and stopping them from hiring more people, whether by a 1% increase in premiums today or a 4% increase in coming years.

As I have said many times in the House, there is no crisis in retirement savings. In fact, who claimed the media was “fear-mongering” with regard to a retirement crisis? It was the finance minister in his book with his actuary at Morneau Shepell, Fred Vettese, in a book called The Real Retirement. They said it was fear-mongering. Well, the finance minister is now relying on that fear-mongering to bring this bill forward.

Who will it help? Ipsos Reid showed that 70% of Canadians do not realize that retirees and people near retirement will not benefit. In fact, Fred Vettese, the chief actuary at Morneau Shepell, has said it will only help 8.7% of middle-income Canadians boost their retirement income. It will not help people on the low end, those we were trying to help when we were in government, with GST reductions and other things, and not people at the high end. It will only help 8.7% of people in the middle. That translates into 5% of Canadians who in the future might have some modest increase in retirement income, if they do not use RRSPs, if they do not get the value from their home, and if they do not use the TFSA that minister Flaherty brought in. Therefore, potentially 5% would benefit while 95% of Canadians would pay, and employers, whom we are imploring to hire more people, are forced to pay premiums for every new person they hire.

It is shameful, in the midst of a jobs crisis, the government is introducing yet another tax that would lead to more Canadians being unemployed.

We must stop it here. We have to focus on job creation for the future.

[Colin Fraser, Liberal, West Nova, NS]

Mr. Speaker, we have heard one Conservative after another get up to talk about it being a payroll tax and the difficulties of enhancing the Canada pension plan.

Does my hon. colleague agree that the Canada pension plan does good for Canadian society—indeed, Canadians overwhelmingly support it—and why is it a good thing for this country?