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

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

Mr. Speaker, I look forward to speaking at the annual dinner in the riding of my friend, the member for West Nova, in a week and a half. I look forward to being back there.

The CPP is a good thing. None of us is saying it is not. However, if he noticed, in the last minute of my speech I spent time dissecting the crisis in retirement. There is no crisis. Who said there is no crisis? The finance minister said so in his book he was selling to Canadians. Now he is selling them something else entirely. I tried to focus my remarks on that, using Finance Canada's own statistics.

We have a government that loved to get elected in saying, “We're all about evidence-based decision-making”.

What does the evidence say? Finance Canada says that 10,000 jobs will be lost as a direct result of this bill in the midst of a jobs crisis already gripping this country, for a perceived retirement shortfall of a small group of middle-income Canadians who could be helped through TFSA enhancements, through home sales, through RRSPs, through the economy doing better and wages rising.

This bill would likely lead to a wage freeze and fewer jobs.

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

Mr. Speaker, what a great speech. It is actually one of the ones that makes a lot of sense.

My understanding is that this is a cost, not only to the employer but also to the employee, costing them somewhere up around $1,100, or maybe $800, each. Could he help us understand? For most people who are paying into it, particularly those who are just getting out of university, starting their family, buying a home, how long would it be before they actually get any benefit from it?

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

Mr. Speaker, one of the most alarming absences of leadership on the government's side has been in response to my friend's questions about the closure of an old processing facility in his riding that has employed people for two centuries. Yet, because the minister will not grant an exemption to that heritage property, it will be another example of a dozen or so jobs lost.

We are in a jobs crisis. We bring that to the floor of the House every day, my colleagues from Alberta, my colleagues from Ontario, on both a small and a large level, and the government is disconnected with how that affects families.

My friend is right. The premiums paid are both by people and by businesses. The major business groups have told us that in this slow economy right now, businesses will not hire people, or will freeze wages, as a result of this premium, and younger people will not see a benefit for decades.

Fred Vettese, the chief actuary of a firm called Morneau Shepell—I can say that name in the House; I cannot say the name of his co-author, the finance minister—has said there is no retirement crisis and that even this perceived CPP enhancement would help fewer than 5% of Canadians, because only 8% or so of the middle class need an enhancement. There is no retirement crisis.

If they are trying to do something for a very small subset of Canadians that would result in the unemployment of tens of thousands, that is the wrong decision and we have time to stop it.

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

Mr. Speaker, it is great to see my colleague, and I wish him well in his leadership bid.

When I listen to the Conservatives' arguments for why they are voting against the CPP enhancement, I realize that one could use those same arguments against having the CPP today. Could the member tell us what his thoughts are on the current CPP? If he says the current system is okay, is there a situation when he would see CPP payments being enhanced? Would there be a time or scenario where they could be enhanced?

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

Mr. Speaker, I thank the member for Winnipeg North for wishing me well.

I was in the member's city a week or so ago with my friends from Interlake and Brandon at the Free Press News Cafe. People were quite open with their concerns about the carbon tax, and the farmers in the Interlake know they will be paying thousands more just for diesel. In fact, small and medium-sized businesses have little margin and the current government is going after their margins. It does not want them to take anything home and put it in their jeans at the end of the day. This is what I heard loud and clear in friendly Manitoba, and I trust he is hearing the same.

What I would remind the member of, and no one reminds the House of good Liberal virtues more than that member does, because he is up quite regularly, is the incessant call for evidence-based decision-making. When the member goes into his caucus this Wednesday, I ask him to stand up to the Prime Minister and say, “Prime Minister, Morneau Shepell's chief actuary has told us that this bill will lead to job losses while only targeting a small percentage of people, fewer than 5% of middle-class Canadians decades from now.”

If that is what we are trying to do, at the risk of potentially losing 10,000-plus jobs, why would we be doing this in the middle of a jobs crisis? It is time for the member to stand up in caucus and ask the Prime Minister to stop waging a war on job creation.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, at a time when so many people have lost their jobs or are at risk of losing their jobs in the near future, the government is about to implement a new payroll tax and take more money off the paycheques of my constituents.

For those who are listening, who may not realize what is about to happen, the Liberal government is about to increase the amount of money taken off an individual's paycheque that goes to the Canada pension plan. Also, the amount of money that their employer pays into this plan will also increase.

For many Canadians, this amount of money coming off their paycheques will make it harder to pay their monthly bills. For employers, especially small businesses, this increase to their operating costs will force many to make choices on whether to hire more people or simply to let people go.

Today I want to do two things in debate. First, I want to refute the government's primary argument for doing this, and, second, I will refute the government's assertion that this is the best policy to help Canadians save for retirement. I will point out how many of its policies are actually detrimental to them doing so.

On the first point, this is a payroll tax increase. The Liberals believe that my constituents cannot be trusted to make the right decisions to save for their retirement. They want my constituents to believe that the lowly taxpayers do not have the capacity to plan for their own savings and manage their retirement. They want them to believe that dependence on their government in their old age is the path to their security. They want them to believe that the government's seizure and control of their funds is in their best interest.

While there is a role for government in many situations, the fundamental belief in the freedom of Canadians is what sets Liberals apart from common-sense people. Liberals believe that it is only through government control that Canadians can prosper; whereas common-sense Canadians understand that the government should exist to enable our freedom, not to diminish it.

When I listen to the rhetoric around this particular bill and this particular financial instrument, I hear the government saying that Canadians are not saving enough and the government will come in and save them. I hear nothing about how the government will enable their freedom and enable their choice to be economically prosperous.

There is a huge fallacy in trying to convince the Canadian population that the best way for them to plan for their old age, for their retirement security, is to depend upon a large bloated Liberal government. I cannot believe that the government would actually put out that duplicitous comment and not believe that there would be some sort of push-back from the Canadian population.

This is why it is not the correct policy at this point in time. First, the government is creating a crisis where there is none. Certainly we need to ensure that Canadian seniors are well taken care of, that they are well looked after and honoured in their retirement. This measure will not impact Canadian seniors who are already into their retirement. In fact, it will do absolutely nothing for them. This will not increase their pension or help their prospects. Moreover, this will certainly not help their children, which many retirees are concerned about. In fact, this will disable them and disadvantage them.

I think the Liberals have been trying to sell this plan as some form of curative for pensioners who are already in retirement, and we know that is not the case. The fact that there is duplicity in the communications is so dishonest.

Let us talk about people who are planning for their retirement right now. First, there has been no formal consultation to date, absolutely none. The government has not talked to anyone. The Liberals announced this with great fanfare, hoping the Canadian public would turn a blind eye to this absolutely abysmal piece of legislation, which is based on zero financial credibility, and, frankly, zero actuarial credibility. However, I digress.

Beyond the lack of consultation, I would like to see the government commit to creating jobs for Canadians and creating the economic conditions in which people can increase their opportunity for economic growth and prosperity.

In terms of looking at policy instruments which would enable the prosperity of Canadians and my constituents, the government has absolutely failed. The bill will not do this. All this does is take away Canadians' freedom and require more dependence on the government. That is shameful.

Let us talk about these things. First, aside from the great arrogance of the government assuming that Canadians cannot save for themselves and must rely on the great saviourship of the Prime Minister and all of his wonderful gazes into the cameras, Liberals want to put in place a national tax on everything. There is the carbon tax, which will actually not reduce greenhouse gas emissions but only function as a GST, because, number one, they have not done any proper modelling in terms of price elasticity around the demand for carbon. It would only increase the price of everything for people who are struggling to make ends meet.

Liberals want to increase EI premiums, which would put a further chill on small businesses and job creation. They have put in place regulatory uncertainty for major resource projects. Anyone who is looking to invest in Canada right now is going to decide not to because of the political uncertainty, which also puts a chill on job creation. They are not doing anything to retain labour in my province of Alberta. They are allowing the best and brightest in Canada to bleed into the wind.

Liberals talk about increasing humanitarian levels of immigration without looking at the economic implications of that. They are running up a huge debt. I looked at some of the numbers that came out of the parliamentary budget office this year, and, in a non-recessionary period, the government is spending at unprecedented levels. If we are talking about the future of people's retirement, the level of debt that the Liberal government is going into is shameful. I cannot even think about this most of the time. Spending for spending's sake, rather than with any sort of outcome or goal, is not going to help Canadians with their retirement.

Moreover, the thing I find so fundamentally arrogant, in saying that only the government can help them save for their retirement with a program that might not be solvent at some future point, is the fact that the government eliminated the tax-free savings account increase that the Conservative government put in place. They said average Canadians cannot deal with that, average Canadians cannot be trusted with putting their own money into it. I know, without a shadow of a doubt, it is the people in my riding, who are now out of work in the energy sector because of the Liberal government's ideological opposition to that sector, who used the TFSA the most.

Rather than giving Canadians a vehicle in which to save their money, the government is saying it is not going to do that. It is going to take it away. Canadians are going to depend on the government and the Prime Minister and his sunny ways, because he is going to see everyone through with all of his financial acumen, his economic expertise, all of his great connections and understanding how to scrimp and save given his trust fund background. It is saying that everyone should trust in him, and he will show everyone and their children the way. Canadians do not believe that. That is hogwash.

Canadians need economic opportunity and a commitment to freedom, a commitment to understanding that it is Canadian families and workers who first and foremost understand how best to use their money. It is Canadian families who best understand what they need to do to make their families prosperous and give their children opportunities. Increasing CPP premiums, for many small business employers, boils down to a choice between one employee or two. This is at a time when the government has sent a chill through investments and is sending that sort of message. Then it is deciding to put a further chill on investment right now. It is irresponsible and garbage.

I do not even understand how Canadians cannot be infuriated with the arrogance that the government is putting forward in this bill, in saying that Canadians do not know how to spend their own money or how to save for retirement. From the bottom of my soul and with every fibre of my being, I oppose this bill. Because of the arrogance of the leftist, socialist school of thought, that the government first and foremost knows best how people should spend their money and save for their futures, I oppose this bill, and I know many of my constituents do as well.

Instead of putting this absolute pile of garbage forward, I wish the government would commit to creating economic conditions in which investment could occur in Canada and small businesses could thrive. I wish the government would push back against harmful economic practices in fragile economies like Alberta, like a price floor on labour or a carbon tax. This is the sort of economic policy that bankrupts and fails countries. I hope that my colleagues will take that into account.

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

Madam Speaker, the member is definitely passionate; I will give her that much. However, we will have to agree to passionately disagree in terms of her approach. She emulates what many of her Conservative colleagues have been talking about. There does seem to be a distaste coming from the Conservative Party toward the Canada pension plan.

My question is not that difficult. It is one that I started with the member's colleague who spoke prior to her. It is in regard to CPP in general. Can the member give the House any circumstance whatsoever where she could envision CPP being enhanced? If not today, is there another situation where the member would support it, or is she just outright against any enhancement? Is the Conservative Party outright against any enhancement ever of the CPP?

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Madam Speaker, in order to enhance my constituents' retirement prospects, I am not looking just to the CPP. I want them to make more money. I want them to have more job opportunities. I want them to pay less tax. I want them to have more efficiency in government. I do not want them to have to see large debt loads for no reason, brought up just for vanity projects. I do not want my constituents to have to pay more in taxes because I have an environment minister who wants to rub shoulders with elites in Davos. I do not want my constituents to have to pay more in a payroll tax for something that is never going to benefit them in the future.

This is the great Liberal fallacy, that somehow government can produce more freedom for economic opportunity for Canadians. It is this fallacy that the government is putting forward that will end in its electoral defeat.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, there was talk about how can we make this better. A lot of the member's business owners are saying they do not want it. However, when we were at the committee stage, we had a lot of organizations, such as the labour groups and the Canadian National Association of Federal Retirees, saying that because big corporations are not getting into the defined benefits plans or they want to get away from them, the only solution at this time in the three pillars is to expand the CPP. It would not fix all, but it was one of the ways to help our children in the future.

I am wondering, is the member saying that these organizations are wrong, or we have to look at other ways? What I heard is that the TFSAs are not working and the defined contributions are not working.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Madam Speaker, any time the government members tell us there is only one way to solve a problem, and it is the government's, we should be wary.

Some of the feedback that has been brought forward in terms of the efficacy of this particular policy instrument has included that the full new benefits will not be available until at least 39 years after 2025, when the initial implementation of the CPP expansion has been completed. There are questions about the accrual of $1 trillion in assets. Where can one invest $1 trillion today in a prudent fashion that will still earn adequate returns?

Will participants understand that his new tier does not bring guaranteed benefits? What will happen when they have to freeze or even reduce benefits and contributions? Is this politically feasible?

How will small plans respond? Will they respond just by closing? Many of these plans are well administered, and we should not create incentives for them to terminate.

What about a new working income tax benefit? Is that fair? Have we targeted the correct audience for this reform?

The bottom line is that there are many different ways that we can look at the question on how to incent Canadians to best save for their retirement. Certainly one of the best ways we can do that is by providing them with employment opportunities and a prospect of a government without severe debt, none of which the current government has any intention of doing.

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

Madam Speaker, for many years now, the NDP has been fighting tirelessly for improvements to the Canada pension plan, so I can only be happy that it is finally happening. I would like to say that I will be supporting the main motion at report stage. However, I have to oppose the Conservative motions seeking to remove practically every clause in the bill.

Retirement insecurity is reaching crisis proportions in Canada, since many Canadians have been unable and are still unable to save enough throughout their lives to maintain the same standard of living once they retire. At the end of the day, over 6% of seniors are living in poverty. We in the NDP believe that this increase is crucial in order to ensure that our seniors can retire with dignity.

Bill C-26 proposes adding a separate new tier to the current CPP. This new CPP tier would be implemented gradually over the next nine years, until 2025, and basically does the following two things: first of all, it raises the income replacement rate from 25% under the current CPP to 33%; second, it raises the earnings ceiling from where it is today at $54,900 to $82,700.

Once the transition period is complete in 2025, it will still be 40 years before people receive the full enhanced benefit. The first workers who will receive the full benefit are now 16 years old. Someone who is 59 in 2019 and who makes higher contributions for six years before retiring in 2025 at the age of 65 will receive no additional benefit.

It will take time for the changes to come into effect. The NDP believes that certain measures should be taken immediately to help seniors and Canadians on the verge of retiring who will not benefit from these changes.

The government needs to leverage the energy generated by this agreement and do what it takes to improve long-term retirement security for today's workers. It must respond to Quebec's concerns about the impact of this enhancement on low-income workers.

The NDP will keep fighting for other increases to the guaranteed income supplement and old age security as well as the national pharmacare program and the program to improve home care and palliative care.

As is often the case with the Liberals, when we take a closer look at their proposals, we quickly realize that everything is not always perfect. In fact, we need only look at some of the details of this bill to realize that some things are not as we would like them to be. One of them is the child-rearing dropout provision. That is a failure. As the NDP critic for families, children, and social development, I am having a great deal of difficulty understanding and accepting that the Liberals have not kept this child-rearing dropout provision, which is currently in the CPP. This measure ensures that women are not penalized for having left the labour market for a period of time in order to raise children. The Liberal bill also eliminates a similar clause for people who have received disability benefits under the CPP.

It is all very well to increase CPP benefits, but that is not all that should be done. The NDP worked very hard for the CPP to become a reality, and we are going to work very hard to ensure that this bill is not inequitable.

Do members know why I am talking about inequality? It is because women are penalized for having children. Only 4.5% of women receive the maximum amount of benefits. I was really shocked to learn that because we have a Prime Minister who brags at every opportunity that his government supports women and that he is working hard to improve gender parity.

The Prime Minister is squandering an opportunity. I think it is safe to say that he has missed the mark. On the contrary, his government's bill is creating more inequality. It is not right. The fact that the Liberals do not even see the problem makes even less sense.

What we need to keep in mind is that 63% of low-income seniors living alone are women. Does the House understand how high that number is? We in the NDP think that this is unacceptable.

I see this reality in my riding. I see many seniors struggling to make ends meet at the end of the month, and they only make it thanks to the incredible commitment of community organizations back home such as St-Hyacinthe volunteer centre or the Acton Vale volunteer centre. They help our less fortunate seniors every day. Through their engagement and drive, these volunteers make seniors feel less isolated, get them to socialize, and help them continue making an invaluable contribution to the community, which in turn helps improve their quality of life and that of all our fellow citizens. Through their work, they constantly reflect the values of our wonderful community: independence, sharing, caring, loyalty, respect, dignity, and solidarity.

These two volunteer centres have been working with all of the other organizations in the Saint-Hyacinthe region for many years in order to promote volunteer work and help overcome the many challenges associated with meeting the community's growing needs. It is their desire to always want to do more for others that makes such a big difference.

It is time that the Liberal government followed suit. As the Prime Minister has said, in 2016, we cannot allow women to receive fewer benefits because they had to leave the labour market for a time to go on maternity leave. Allowing this to happen basically amounts to gender discrimination. It is unthinkable to give senior women 30% lower benefits than men.

Enhancing the CPP is one step, but more must be done to correct its flaws and injustices. The NDP wants to do more for people. That is why we believe in developing a holistic vision and improving Canada's socioeconomic safety net. That is what we are trying to do with my Bill C-245, which would create a national poverty reduction strategy to make things better for our seniors throughout their lives, not just in retirement.

That is the kind of holistic vision we need to develop to achieve a more inclusive and just society that leaves nobody behind. Doug MacPherson, national coordinator for the Steelworkers Organization, agrees. He welcomes the proposed CPP changes, but says they are an inadequate response to the critical situation facing many working Canadians when they reach retirement. He added that the government, which prides itself on passing evidence-based legislation, obviously failed to see the situation clearly this time around. Mr. MacPherson also said that it should be clear the current system has some serious flaws that the proposed Canada pension plan changes will not fix.

Let us work together to help all seniors, but above all, our senior women.

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

Madam Speaker, the member talked about this worldly vision, more of a holistic approach, dealing with the issue of poverty.

I appreciate what the member is saying, but I would remind her that two specific measures have been announced in the 2016-17 budget. The first is the Canada child benefit program, a program that will literally lift tens of thousands of children out of poverty. The second is a substantial increase to the GIS for Canada's most vulnerable, in particular single seniors. Again, this substantial increase will lift tens of thousands of seniors out of poverty.

I know the NDP voted against the overall budget, but could you give a clear indication of whether she supported those two initiatives?

[The Assistant Deputy Speaker, Carol Hughes]

I cannot give you that indication, but I am sure the member will be able to respond.

The hon. member for Saint-Hyacinthe—Bagot.

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

Madam Speaker, taking a holistic approach specifically means taking into account the consequences of the measures we adopt, rather than being satisfied with going forward one case at a time.

What I said in my presentation is that we could think about the future of the CPP, but it was also important to help the seniors who are retired now and living in poverty. We cannot say that it does not matter because we are doing something else.

Taking a holistic approach means ensuring that all of our measures meet people's everyday needs.

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

Madam Speaker, the member talked about statistics and the percentage in terms of the lesser amount women would receive in CPP once they retired. Could she comment on the impact that this reduction in benefits means to the life of a Canadian senior woman?