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

[Shannon Stubbs, Conservative, Lakeland, AB]

Madam Speaker, I am pleased to speak to Bill C-26, which would have consequences for all people and communities across Canada with very real costs that would not deliver the promised benefits, and at a time when job losses are escalating with not one single net new full-time job created in Canada during the past year under the Liberals. Government must work with entrepreneurs, job creators, and employers and not against them.

The Liberals often claim to be committed to public consultations, so their failure to listen to Canadians about this bad plan is rich. The Canadian Federation of Independent Business recently confirmed that 83% of employed Canadians do not support this payroll tax hike, and more than 80% agree that they want the government to consult them on it. However, the Liberals are pushing it through, banking on Canadians believing the Liberal spin and misinformation.

According to the same CFIB study, 40% of Canadians think the government pays for part of the CPP, and 70% of Canadians believe current seniors would benefit, which is how the Liberals are selling it; but of course, both notions are completely false.

It is galling that the Liberals are exploiting the anxieties of young Canadians about their futures, the urgency of people nearing retirement who are worried about financial security in the next stage of their lives, and the challenges faced by retirees who are struggling now to make ends meet on fixed incomes, by selling this punitive increase as the responsible and shared value of helping people save for retirement and implying that it would help retirees now, while pretending there will be no negative or damaging consequences.

Both employees and employers would bear the cost of this hike that would take more away from job creators, harming their ability to grow their businesses and invest in their employees. As it would force small businesses to reduce staff or pay, in order to stay afloat, or increase prices for their products or services if they can, it is employees and customers, all of us, who truly pay for it.

The Liberals should walk their talk on fact-based decision-making. Many experts and extensive studies conclude that expanding the forced retirement pension plans on small business owners would likely result in a decrease in private sector investment, a decrease of labour force, and an increase in inflation. These are important warnings that government should heed, because in Canada small businesses comprise 97.9% of all privately owned businesses and employ 70% of Canadians working in the private sector.

In Lakeland, the people and businesses are struggling. Job losses are escalating, even though entrepreneurs are doing their best to keep going. The damage from the downturn and bad government policies is rippling through all sectors and across Alberta. This payroll tax hike would just make things worse and add costs for employers at an already enormously challenging time.

Small business owners across Lakeland oppose this expansion, because it is yet another tax hike. Whether it is an increase in employment insurance premiums, a carbon tax, or the proposed CPP hike, families and businesses in Lakeland cannot afford the Liberals' agenda.

The owner of a Vegreville window and glass company explained to me that not only would this be bad for the employee and the employer, but it would reduce our economy. Businesses cannot raise prices; the only way is to lower input costs, which is limited to the employee. Tough choices would have to be made, as every input cost is increasing: electricity, insurance, base product costs, which cannot be decreased. It would lead to fewer workers and fewer hours. Negative effects on our economy would be far reaching, as raising prices does not and will not work. Government would harm businesses and workers with this move.

It is clear that this plan would lead to wage freezes, reduced benefits, or even layoffs. Job creators in Lakeland are cautioning exactly what others all across Canada are telling the Liberals. This hike would hurt their ability to invest in and to expand their businesses, to hire and to compensate their employees, and to start new ventures. These consequences would ricochet through the whole economy.

A co-op grocery store in Vegreville might have to increase membership fees. A bookstore owner in Lloydminster might have to lay off a hard-working employee, and a student in Edmonton might not get that pay raise at work, needed to pay for school.

Each one of these situations has profoundly different impacts on communities. That membership fee increase at the co-op might be the last straw for a single mother, forcing her to choose between necessities for her family. That former bookstore employee, who volunteered with the Girl Guides of Canada, teaching kids important life skills and values, would have to participate less in order to look for more work. The student in Edmonton might have to take a second job, taking more time away from her studies, hampering her academic performance, and limiting her potential. This combined with a job-killing and price-hiking carbon tax would devastate communities even more.

What does this mean for average Canadian families and why should they be concerned? Studies show that some households will pay up to $2,200 more per year as a result of this hike. That is enough to take a course and upgrade credentials for work on the rigs, or to transition into something else, a season of minor hockey, or a once-in-a-lifetime bucket list vacation for two. All for what?

The consequences for businesses will not help seniors now, contrary to what the Liberals have been telling everyone. It will take 40 years for the CPP expansion to even provide marginal benefits, if the program even still exists. Businesses and families will be paying the price for this made-in-Ottawa disaster the whole time. I would understand of course if it helped seniors today but that simply is not the case. Canada's demographic transition is under way and the timing of this change will hurt both businesses now at the very worst time and will not even benefit baby boomers.

Reducing red tape and cutting taxes would help those who create the majority of Canada's middle-class jobs. If Canada is to maintain its competitive edge, increase productivity, and spur innovation, legislators must constantly strive to improve the conditions for doing business, not make them worse. This means understanding how government policies affect everything job creators, contractors, and entrepreneurs do. Increasing Canada's international competitiveness is also vital to the success of small businesses and their hard-working employees.

Our philosophy as Conservatives is that Canadians' money belongs to them and not to the government. Reducing and lowering taxes equals more jobs because the more than one million small businesses from across the country are unable to continue to expand, invest, and employ.

So far the Liberal philosophy of borrow, tax, and spend is failing. Earlier this month Canadians received the shocking news that during October, 23,000 jobs were lost. That is one job every two minutes. Canadians expect and deserve more from the government. The previous low-tax plan was stimulating growth, jobs, and savings, and not on the backs of future generations.

There are other measures the Liberals could have taken to help Canadians save for their retirement. They could increase RRSP contribution limits. RRSPs have been successful at allowing Canadians to save for retirement and prove that when we work with the private sector instead of against it, goals like secure retirements can be achieved.

The second is the tax-free savings account. If the government wants to encourage Canadians to save, why on earth would the Liberals reduce the amount they can contribute to the most versatile savings and investment tool? The flexibility of a TFSA recognizes that Canadians have different savings needs and can plan for their futures. We are not a one-size-fits-all country and a one-size-fits-all solution will not work.

The “Ottawa knows best” approach is failing. Despite what the Liberals think, Canadians are smart enough to make their own decisions when it comes to retirement savings and what solutions work best for them.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Madam Speaker, I am pleased to speak to this bill, and I am especially happy to have this opportunity to rise in the House knowing that many members will not have a chance to express themselves because of the government's decision to once again limit the time for debate.

Apparently we will have to do like Chinese billionaires and shell out $1,500 to buy time with Liberal ministers to get them to listen to our concerns. That is really too bad, but that is what it has come to.

I would like to start with something we know to be true. People often say that Canadians are not financially prepared for retirement and could end up living in misery because they do not have enough money. They do not have enough cash in the kitty to fund the retirement they want, a retirement they can really enjoy that does not include frequenting soup kitchens.

This is a serious problem, one we need to tackle at its source. If Canadians are not investing enough for their retirement, perhaps it is because they do not have the means to do so. Although salaries have gone up over the past few decades and interest rates are currently very low, the situation is not perfect for Canadians. That is because such a large portion of their income is taken away by the various levels of government in the form of sales tax, premiums, permits, licences, and income tax. There is no shortage of words to describe how the government picks the pockets of the middle class.

If we want Canadians to be able to plan for their retirement, we need to give them the means to do so. I know this is hard for the members over there to understand. This means giving Canadians greater flexibility so they do not have to hand so much over to all levels of government, until they have almost nothing left to plan for their golden years.

The government loves being generous with other people's money. I would remind members that it is generous with taxpayers' money, including corporate taxpayers. Despite the Liberals' shameful $25-billion deficit, which has not created any wealth, they are not putting any tax dollars into this plan.

However, this will come at a cost to the Canadian economy. This is a glorified tax on businesses and Canadians. The Liberal government unilaterally decided what Canadians will do with an even bigger part of their salary. Our deficit experts are introducing yet another payroll tax.

Instead of working to create wealth, they are undermining it. In many cases, these costs mean the difference between profitability and hardship. Every business, big or small, will be affected by this measure.

I know what I am talking about. I am a businessman and have been a business owner for 21 years. I know all about costs and obstacles to hiring. The more governments drive up the costs, the less appetite there is for hiring. It is as simple as that.

That amount can be significant for large companies with several hundred employees. Production costs for the same output will go up by $100,000, $200,000, $300,000 or more overnight, and we haven't even talked about the carbon tax the Liberals are going to tack on. The future is not bright for our businesses. It is going to take a lot more than a Care Bear stare to grow our economy.

The finance minister's officials confirm our fears about the changes in Bill C-26: the proposed increased contributions will have an adverse effect on job creation. For a government that said it would base its decisions on science, facts, and sound advice from the public service, it is sad to see the Liberals act in this way. They are listening more to Kathleen Wynne that to experts on this. It seems that the Butts and Telfords of this world have more pull than finance department experts.

I have some examples. According to officials at the Department of Finance, the measures proposed in Bill C-26 will have an adverse effect on job creation.

Over 10 years, the drop in job creation will be between 0.04% and 0.07%. These are jobs lost, not created. There will also be a drop in GDP of between 0.03% and 0.06%. A drop in GDP is not synonymous with job creation. There may also be a drop in corporate investment of between 0.03% and 0.06%. When companies invest less, there are fewer jobs for Canadians. There will also be a decrease in disposable income of between 0.03% and 0.06%. Canadians with less money in their pockets means less money to keep our economy going. There will be a 7% drop in long-term private savings. Once again, this measure is supposed to encourage saving for one's old age. However, it will accomplish the exact opposite. People will have less money.

The government is gambling that by increasing taxes it can solve everything. The Liberal government is reverting to its old habits: it thinks that it should not let Canadians manage their own money because they will buy beer and chips instead of investing in their future.

On this side of the House, we believe that Canadians are smart enough to invest in their retirement if we give them the means to do so by cutting taxes. If they do not invest, it is because they do not have the means. If we give them the means, they will invest.

The Fraser Institute reports that a one percentage point increase in the CPP contribution rate reduces private savings by 0.9%. The Liberals' measures only shift the problem rather than resolving it. It is worrisome that 70% of small business owners do not agree that the proposed increase is a modest one and that it will have a limited impact on their businesses. SMEs are Canada's main employers. Could the government listen to them?

The decision to increase contributions was made without consulting Canadians. It would be interesting to consult those who are going to pay for this decision: the public and the employers.

In short, to resolve the problem, the government is proposing to take money away from Canadians who already do not have enough to make ends meet.

I would like to read a quote by Hendrik Brakel, the senior director of economic, financial, and tax policy at the Canadian Chamber of Commerce. On May 31, 2016, he said:

Here at the Canadian Chamber of Commerce, 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.

These people need the government to give them a break, not foist another tax on them.

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Madam Speaker, I rise today to speak somewhat in support of Bill C-26, though New Democrats have some serious concerns and amendments that we would like to once again raise. It is unfortunate that this debate is happening within the framework of the government once again invoking time allocation, which is shutting down debate. New Democrats have identified a serious error in this legislation. We wish the Liberals had acted on our suggestions to amend and that we had more time to discuss why they are reluctant. However, I will start with the positive.

Bill C-26 incorporates the recent agreement reached with the provinces to enhance Canada pension plan benefits. It is a very important step in improving retirement security for young Canadians and we congratulate everybody, especially our friends in the labour movement who worked very long and hard to lay the groundwork for this agreement. This is a success.

When fully implemented, the new CPP expansion would replace 33% of pre-retirement income. That is up from the current 25%. This action is needed. Retirement security is reaching crisis levels. Many Canadians do not have adequate financial security to maintain their lifestyles upon retirement, and this is particularly fuelled by the erosion of workplace pension plans, to the point that six in 10 working Canadians have no workplace pensions.

New Democrats have fought consistently for increases to the CPP, old age security, and the guaranteed income supplement. This bill would benefit a whole new generation of workers entering the workforce, but more is needed. This bill does little to alleviate the retirement income crisis of those now approaching retirement and the full effect of the changes would not be felt for 49 years.

Much more needs to be done right now to help lift seniors out of poverty and to help them live with the dignity they deserve. There are high housing costs, high drug costs, the clawback of the guaranteed income supplement, and the indexing of pensions. New Democrats want the Liberal government to keep its promise to introduce a new seniors price index, to make sure that old age security and the guaranteed income supplement keep up with rising costs and, in particular, to recognize that single elderly women are particularly living in poverty in this country, which is shameful.

Here is the big mistake in this bill. Bill C-26 does not contain the child-rearing dropout provisions that exist in the current CPP, so that parents, mostly women, are not penalized for time taken out of the workforce to raise children. The Liberal bill also fails to replicate a similar existing dropout provision for people who receive CPP disability benefits.

This is how the CPP already works in this regard. The benefits that people receive are based on an average of earnings from the time people are 18 until they retire. To accommodate periods where people may have low or zero incomes, the plan now allows for the lowest eight years of earnings to be dropped from the calculation, and that exemption is referred to as a dropout. That rule applies to everyone. Everyone who now qualifies for that will continue to. They should be assured that nothing will change for people already in this category.

Right now, on top of this basic exemption, there are two other specific dropouts. One is for disability, so that people receiving disability benefits are allowed to drop up to eight years out of their calculations. The other dropout is for child rearing, where people can drop up to eight years, while they were bringing up their children and their income was reduced or zero, from the calculations of their benefits. However, in the new plan that we are debating today, these dropouts would simply apply to the calculation related to base benefits, not to the calculations of the additional or enhanced benefits.

The original dropout provision for child rearing was introduced with much fanfare in 1977 by the government of Pierre Trudeau. The Liberal government of the day included this line in its 1977 throne speech:

You will be asked to consider amendments to the Canada Pension Plan which would further recognize the value of the contribution made to the family and society by both marriage partners, in the event that one remains at home to raise children while their partner works outside the home....

My friend, Iris Taylor, from Nanaimo described this. She said, “My sister Diane Wiebe along with her husband Art, raised three wonderful, hard-working, well-educated taxpayers. Diane was a stay-at-home mom until the youngest left home. Neither parents had jobs with pensions, so when they retired they solely lived on savings, CPP, and OAS. In fact, both worked part-time to cover living expenses until their passing at 70 years. My sister was always appreciative of CPP factoring in her years at home with children into her CPP pension payment.”

The effect of losing this could be significant, especially for women who are overwhelmingly the ones who applied for the child rearing dropout and presently receive a much lower average CPP benefit. The NDP ask was that the government restore it for the new CPP enhancements and that it do it now. We have debated every day in the House, asking the government if it would work with us to get this fixed. My colleague from Hamilton Mountain basically laid out all the groundwork at committee. All the Liberals needed to do was pick it up and run with it, but they chose not to.

In the House, we invited the government to amend its own bill. At committee, the New Democrats moved two motions to include the dropout provisions for women and those living with disabilities. However, the Liberals were not reasonable in looking at our amendments and ruled them out of order. When we tried to make a motion to have the committee recommend to the House that the provisions be put into the bill, the Liberals moved to adjourn debate. They kind of cut and run. It was very strange.

In case the Liberals might try to cite cost as a factor in their decision to omit the dropout provisions from the new enhanced benefits, our very preliminary calculations show that the cost would be very low. Using available information, it looks like the dropouts might cost each employee and each employer 0.2% of a worker's average salary. That is a very cheap price to pay to provide such an important and significant benefit.

On the other hand, looking at the calculations on Service Canada's website, the failure to fix this program could cost parents significantly. A mother who spent six years raising children would get between $800 to $1,200 less each year than she would otherwise.

Again, we have time allocation on the bill so we are not able to debate this fully. Again, this is inconsistent with previous Liberal positions. Here is what the Minister of Transport was quoted in Hansard in 2012 as saying:

Slowly but surely, Canadians are beginning...to question what the government meant when it promised...to be open, transparent and, most of all, accountable. I believe Canadians are beginning to feel that there is a contradiction between what has been promised and what is actually being done by the government.

This is déjà vu. That was the Liberals talking about the Conservatives, but now this is just how the Liberals are acting. It is very disappointing.

Hammering home again how important this program has been for Canadian women, June Ross from Nanaimo wrote to me and said, “The credit for my child rearing years was seven years. That credit helped my pension to increase. ln my view, the child rearing credit should have also been applicable to the old age pension as well. The woman who did not work outside the home and therefore was eligible for only the old age pension is punished yet again. As you are no doubt aware...we women have lesser pensions than our male counterparts because our work outside the home had very little value placed on it. Our hourly wages were very low...therefore, our pensions are much lower”.

Again, the Prime Minister likes to call himself a feminist, but when we point out that the Liberals' legislation is penalizing young women workers who would qualify for this in the future, they suddenly have nothing to say. The Liberal government should immediately agree to our proposal and live up to its feminist rhetoric. It should amend the bill so future generations of stay-at-home mothers and the disabled are not penalized. Please do the right thing, amend your bill and I will vote in support of it.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, I thank my colleague, who has just given a very good demonstration and a very good speech on what motivates the official opposition to oppose Bill C-26.

During the previous speech, our government colleague from Winnipeg North said that the Conservatives were, to use his words, “out of touch” with Bill C-26.

We are indeed out of touch because Bill C-26 is totally out of touch with seniors and the people it is supposedly designed to help. In fact, it will be 40 years before Bill C-26 produces any results. The results will not come right away.

The government is in such a hurry to pass a bill that will have an impact 40 years from now that we have once again been presented today with a time allocation motion. In tabling yet another time allocation motion to get its legislative agenda through, the government is demonstrating its incompetence. It is also demonstrating a real lack of respect for parliamentary procedure and, ultimately, for Canadians. The government continues to try to prevent members from participating in the proceedings of the House of Commons and from representing their constituents in this place.

It was well put, was it not? Those were the words of the member for Winnipeg North. He said them when he was in the opposition and the government tabled time allocation motions. This member talks a good deal in the House, so much so that he seems to forget what he said in the previous parliament. Today, what used to be good for Peter is no longer good for Paul. That is what it looks like.

Regardless of what was said by the member for Winnipeg North, we must remember that this government was elected on a loud and clear affirmation that it would be a different government. It is succeeding, because it will probably become the government that has reneged the most on its promises in the entire history of the Parliament of Canada. That is where this Liberal government is headed.

First of all, this government will impose a Liberal tax on carbon, which is going to be very expensive, in addition to costing thousands of jobs in companies of every sector. Despite having committed to reducing corporate income taxes from 10.5% to 9%, this government does not seem the want to act on or keep that promise—not in the slightest.

The government had promised just a small deficit of $10 billion, as if $10 billion could be a small deficit. It was already a very big deficit, and we are now being told that it will not be a very big deficit of $10 billion, but rather an enormous deficit of $30 billion. What is more, the finance minister is unable to tell us when we will get back to a balanced budget.

With Bill C-26, not only has the government enticed seniors with visions of their pension plan being enhanced now, but it has also made them believe that it has their own good at heart. Their own good and their own property, which the Liberals have gone after so they can administer it themselves. The government is giving them nothing right now, since it will be 40 years before the system works.

In a document released by his office entitled “Open and Accountable Government”, the Prime Minister himself has laid down certain ethical rules and rules on gaining access to ministers in order to represent any views. This is known as preferential access, and this government is very clear on this matter: there must be no preferential access, or presumption of preferential access, to ministers.

Unfortunately, what we have seen from the start is that the Prime Minister himself is breaking his own rules. I understand that seniors unfortunately do not have the money required to go and meet the members of this government in order to present their views, for it seems that is the way to get responses and results. That is the new Liberal tax, the tax on meetings with ministers. That is what one might call this new policy, this new method of getting what one wants from the government.

Let us return to Bill C-26. Seniors were promised that the Canada pension plan would be enhanced. That promise has been kept, but we have to read between the lines, as we have to do every time the government presents us with something. The reality is that this measure will take full effect not in two, five, 10 or 20 years, but rather in 40 years. In 40 years, I will be 90 years old. Life being what it is, many of my colleagues will no longer be here, like most of the seniors who are expecting an increase to their pension plan.

In the 2016 fall economic statement, the government laid out “a plan for middle class progress”. In that program, we read about Maya, an example of a Canada pension plan success story. To reach people more effectively, the government decided to use concrete examples. According to this document, Maya is a young graphic designer who is working hard to establish herself in her field. She earns $55,000 a year, and thanks to the CPP enhancement announced in Bill C-26, in about 40 years, when she retires, Maya could receive $17,500 per year.

In other words, since Maya will have benefited from an increased Canada pension plan and she will have been told not to save, because the CPP would do that for her, once she has worked all her life and contributed to our economy, she will receive $17,500 per year. Maya is a success story in the eyes of the Liberal government, but in fact she is an example of Liberal failure.

What Maya is being told is that the government will manage her retirement savings for her and enhance the pension plan, and thanks to the government, instead of earning $55,000 a year when she retires, she will earn $17,500 a year. They say that will afford her a decent living and that this is an example of a Liberal success story. On the contrary, it is a failure caused by their desire to manage every aspect of people's lives.

Consequently, when we see the term “success story” in the government’s fall economic statement 2016, that is to be taken with a grain of salt. If people follow Maya’s example, in 40 years young hard-working middle-class Canadians are going to have difficulty making ends meet, because they will have put their entire fate in the hands of the government, even though it is common knowledge that no one is in a better position than we ourselves to manage our own money.

Bill C-26 also wants to increase workers’ current contributions to the Canada pension plan. At present, that plan takes 9.9% of our income, and this bill will increase that rate to 11.9%. In clear terms, that means that the average worker is going to pay up to $1,000 more every year. That means an additional expense of $1,000 per employee for every small business.

Despite all that, a study by the government’s own finance department shows that these increases would have harmful impacts on all economic vectors and not just on one small component. It predicts a drop in employment, gross domestic product, private investment, disposable income, and above all, personal savings, of which I have spoken from the beginning.

Those, then, are the consequences of Bill C-26. In addition to taking $1,000 more from people’s pockets and imposing on business people an additional burden of $1,000 per employee, this bill is going to affect the economy, job creation and savings. Finally, it is going to compromise wealth creation in Canada. That is what we are denouncing.

I could talk about the government’s position on plenty of other things, but I must conclude by saying that we are going to object to Bill C-26.

[Alice Wong, Conservative, Richmond Centre, BC]

Madam Speaker, what small businesses would not like to see right now is a payroll tax hike. There are other taxes the Liberals promised to reduce, like the small business tax, but they did not follow up on their promise. Small businesses are having a tough time paying more taxes, and there is now yet another one.

These job creators are not being given the opportunity to reinvest. We are not giving them opportunities to hire more people. These are our job creators. Bill C-26 simply does not help small business people at all.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Madam Speaker, I have a lot of respect for my colleague's opinion in this area, because she was the minister of seniors previously and is now the critic for small business.

I am interested in understanding what impact she sees Bill C-26 having on small business.

[Alice Wong, Conservative, Richmond Centre, BC]

Madam Speaker, this is exactly what I said in my speech. We need to help those seniors who are in poverty. One reason is that some have not even applied. Second, they are not able to administer their own funds. That is why I empowered the cities to look for these seniors, including women who are in great need and are on the poverty line.

Unfortunately, the current government does not even have a minister who can speak on behalf of the women, on behalf of the seniors, who really need the help. That is exactly why we are fighting against Bill C-26, which would not help those women at all.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, I am pleased to rise again to speak to Bill C-26 and the proposed changes to the CPP, as this is not only a very important issue to me personally, but also to my constituents and the very many business owners I have consulted across our country.

The government has failed to recognize the negative impacts this change would have on our economy. The CPP tax hike will take money from the paycheques of hard-working Canadians, put thousands of jobs at risk, and do nothing to help the seniors who need it.

Let me explain what is happening with regard to Bill C-26. The Liberals are encouraging misconceptions that these changes would help our seniors, our youth, and our businesses. This could not be further from the truth. I have heard from small business owners across Canada who have stated that changes to the CPP will mean that they will hire fewer people. They will opt to spread the workload across the current number of employees to offset the increased cost of payroll. When I hear from our job creators and community builders that further increases to payroll costs will mean they will hire fewer workers, it means we must listen. Our economy cannot afford to lose more jobs.

I met with young entrepreneurs in the summer soon after the proposed changes were announced. Already these young leaders saw what the payroll tax would do to their own incomes and employee paycheques. Our young people are struggling to pay off school debt and make ends meet. Reducing the amount of money they are receiving today will only magnify this problem.

We absolutely need to encourage our young people to invest, but let us equip them with long-lasting tools and knowledge that will empower them to save through many different means.

As I mentioned in one of the questions I asked in the House, a study by the Fraser Institute from May 2016 projected the real rate of return for CPP investors to be only 2.1%. It states, “Canadian workers retiring after 2036...can expect a real rate of return of 2.1 percent from the the CPP”. This means that the majority of our workforce contributing to the CPP is only making a real rate of return that is barely above inflation. To make matters worse, when they withdraw those CPP funds, they once again will have to pay income tax on them.

Finally, I would like to talk about Canadian seniors. My colleagues know that our seniors are very important to me. As the minister of seniors in the former government, I spent five years working with organizations, health care workers, and hearing from seniors themselves on actions the government needed to take to assist them.

One of the primary ways seniors have chosen to save and the option many have found most helpful is the tax-free savings account. Unfortunately, it has now become very clear that the Liberal government did not consult our seniors when they chose to scale back the TFSA. Now the Liberals claim to be assisting our seniors when the reality is that the proposed changes to the CPP will not provide a single cent to our current seniors.

One common argument for these changes is that they will assist some of our seniors in poverty. These changes will do nothing to reduce seniors' poverty.

In June, a writer of the Financial Post stated:

Whatever the reason might be to expand the CPP, it is not to eliminate poverty. The poverty rate among seniors is now as close to zero as we can get.

The writer goes on to explain that fewer than 5% of seniors who fall under the poverty line are those who either are not eligible for old age security or who have not applied for the guaranteed income supplement.

It is exactly for these reasons that when I was the minister for seniors in the Conservative government, I empowered the cities to look after homeless seniors and help them apply for OAS and GIS and to administer the funds for them so that these seniors would have food on their plates and roofs above their heads. With the Liberal government, this good policy has gone.

We know that the CPP is not a means to solve poverty, and we know that TFSAs help our seniors save. Why is the government choosing to do the exact opposite of what our seniors need?

Canada's retirement system is based on three pillars: first, the CPP; then the OAS or GIS; and finally, tax-assisted savings. It is important that each of these pillars is put to Canadians. When we place too much emphasis on one, the system becomes unbalanced and does not effectively serve those who need it.

Canadians are good at saving their money for retirement. McKinsey & Company state that 83% of Canadian households are on track for retirement savings, and the C.D. Howe Institute reports that savings rates have nearly doubled since 1990. What seniors need now is protection from financial abuse, an enhancement of their financial literacy, and the ability to live within their means. What they do not need is a carbon tax, which will increase their cost of living, including heating their homes, buying groceries, and meeting other basic needs.

Let me complete this debate with what I have heard from women entrepreneurs from coast to coast to coast. They want their significant others to be able to share the rewards of their hard work when they retire. A CPP increase will not help them do that. Putting their money into sound investments will.

Young people in Vancouver hope to save enough money to buy their first home. Taking home less money will never enable them to do that.

In summary, the proposed CPP will provide none of the solutions the Liberals claim it will. Instead, our job creators will be forced to hire fewer workers. Our young people will have a harder time paying down debt, and our seniors will continue to be left out of the equation.

I know that members on this side of the House will continue to fight for our job creators and evidence-based policy. I cannot say the same for the members opposite, and I will vote against Bill C-26.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, it is a pleasure to rise in this House today to speak about Bill C-26. Obviously, there are philosophical differences that the government has with the official opposition. As always, I try to add something to the debate; hopefully, something that stimulates a better understanding of both sides. This place is Parliament. We are here to discuss various points of view and, at the end, there will be a logical conclusion; one that obviously serves the country. Democracy is a great thing, but it is important that people are heard.

I would like to suggest, before I get to the actual business at hand, that the government has quite a big job ahead of it, particularly as many of its policies are going to require economic growth.

As Canadians, we know we are getting older. We are living longer. Obviously, things like pension reform are always important. It is something the previous government tried to do, albeit by different means—and I will be looping back to that in just a moment.

First, I would like to again go back to the point that, if there were a stronger economy, many of the concerns we have heard from small business owners with respect to adding more payroll taxes might have been alleviated.

As we all know, it is tougher and tougher to run a business when the economy is not producing well. Of course, all of us here would like to see more jobs in our ridings. We want to see people being able to provide for their families. However, that is not always the case, particularly if the economy is stagnating.

We have seen Mr. Poloz, the governor of the Bank of Canada, downgrade his expectations for Canada's growth, on behalf of the Bank of Canada.

I think it is important that we just acknowledge that as being a fact because, as the PBO has said, the job reports are not coming in as strong as we would like, and neither is the economy.

If we are going to ask people to pay more, whether it is into a system 40 years from now or into the coffers of the government today, we always have to remember that there is only one taxpayer. If people are struggling to pay their mortgages, if people are struggling to get into the market, and if people are struggling to pay their bills and suddenly they have less money at the end of the day, they will not give to charities. They will not put money aside for savings for their children as easily because there just is not the money there.

Whether we are talking about carbon taxes, whether we are talking about CPP increases, whether we are talking about perhaps—and I have heard in the pre-budget consultations at the finance committee that some members are thinking of a sugary drinks tax or perhaps some other taxes that we have not yet thought of—at the end of the day, there is only one taxpayer, and we always have to keep in mind the ability to pay for it.

We heard from the Macdonald-Laurier Institute during the study of Bill C-26 at committee, from an economist named Mr. Philip Cross. Mr. Cross simply pointed out what we know to be true: that while there are some concerns that certain segments of our society are not saving enough—and that is usually higher earners who are just choosing not to save, and then there is also a number of, usually, single female seniors who, because they did not participate in the labour market and have lived long enough to get to a point where now they do not have things like Canada pension plan because they did not contribute as much—those measures are not there for them.

As we have seen in the previous budget the government put forward, there was some allocation to that. In fact, in the previous election, many of us on the Conservative side ran on a pledge that we should introduce a tax credit specifically for single or widowed seniors. That was all, again, to make that targeted toward those people who are greatest in need.

Mr. Cross said that these things can be addressed through targeted programs and they can be addressed through other voluntary means. There is not a savings crisis now or predicted in the future in Canada, which is something we should be proud of.

We have a multi-pillar system. Conservatives believe, unlike the NDP and the Liberals, that there should be greater choice.

Again, we have heard time and time again from the Liberal side that the Conservatives do not care about pensions or pensioners, which is not true. We just believe that people should be able to voluntarily put their money into an account that would be there to support them, and it should be of their choosing. It should not be by a forced government program.

Again, I would go back to those many seniors who visited me. They and their spouses contributed the maximum amount to the CPP but their spouses died early, so now they, the surviving spouse, are not able to access the money they expected would be available to them, that they had socked away through the CPP system, because they are already receiving the maximum CPP allowed for an individual. These individuals get no survivor or spousal benefit. If, instead of putting that money in a government-mandated system, that same couple had put it in a tax-free savings account or an RRSP that eventually became a RRIF, and one partner were to die, the other one would have immediate access to that capital. We would all expect that.

The Macdonald-Laurier Institute said we should really be calling the argument what it is. There is an ideological agenda by the government. Just remember, “ideological” is not a dirty word but it is something that we need to acknowledge. We need to acknowledge it when we see the world presented in a certain way to come up with a certain solution. The Ontario Liberals ran on a pledge to create their own Ontario retirement pension plan that would be enormously costly and not in fact complement the federal CPP but would increase costs, with fewer benefits for people. The Ontario Liberals and the federal Liberals said they would fix it by going to the other provinces and basically eschewing any other efforts.

Mr. Speaker, I know you do not hail from Ontario, but I would remind you that it is important to notice the following. When we talked about pooled registered pension plans as a means for having voluntary portable pensions that anyone could take anywhere and employers could voluntarily put money towards if they wanted to participate, Ontario, unlike British Columbia, Alberta, and Saskatchewan, did not go ahead with those. I would encourage the Province of Ontario that, despite this piece of legislation going through, there is still more to be done and that pooled registered pension plans were something that all finance ministers across this great country agreed to. That does not happen often.

I just want to take a minute to step back and talk about young people. We had witnesses at committee who said they understood that most seniors would not benefit from this bill. We are thinking about future generations, and that is an important consideration. But we see that young people are now going on to higher education with higher bills and graduating with higher bills. They are being asked to pay those student loans back while trying to get a job. This is a very difficult time. Now they are being told they should get used to precarious work. The reason work is precarious is that employers do not have confidence.

The Liberals have to understand that when they tell people they will be adding a carbon tax and payroll taxes, those taxes make it less attractive for people who want to hire, especially if they hear that the government and the Bank of Canada say they are downgrading the Government of Canada's economic outlook. This again makes it more difficult for businesses to hire young people. Then the Liberals are telling young people that even if they can pay their student loans, even if they can squirrel some money aside, they are going to have less take-home money that could help them buy a home. Of course, the new rules by the department of finance for mortgage qualification make owning a home very difficult.

To sum up everything I have said, the government is in a real pickle on this one, simply because it wants to have an agenda in which it is doing a lot of things that are probably well-intentioned, but in an environment that does not sustain them. At the end of the day, we are asking more of that one taxpayer, and remember there is only one taxpayer, to put up more than he or she is able to bear. If we do that, we risk what I have mentioned. It is the reason I oppose this measure at this time.

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

Report Stage

[Marco Mendicino, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, we are not shutting down debate on the bill. As a matter of fact, there are 55 sitting days between September and December. We have allocated a substantial amount of that time for debate on the bill. We have heard from more than 70 members on the opposition side. We continue to listen for new arguments, which we have yet to hear, but I am quite proud to say that we have had a robust debate. We will continue to have a robust debate, and I look forward to the contributions from the opposition as to how we can continue to enhance long-term retirement security; and it begins by supporting Bill C-26.

[Marco Mendicino, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, it is an honour and a privilege to rise to speak in support of Bill C-26, an act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act.

Let me outline the purpose of the bill.

It would, among other things, 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 were made. It would increase the maximum level of pensionable earnings by 14% as of 2025. It would provide for the making of additional contributions, beginning in 2019. It would provide for the creation of the additional Canada pension plan account and the accounting of funds in relation to it. It would 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.

For the benefit of the House, let me provide a number of reasons why the government has put Bill C-26 forward.

We are concerned about the long-term retirement security for those Canadians who have worked hard all of their lives and expect, rightfully, that they will enjoy security in their retirement years.

The fact is that middle-class Canadians are working harder than ever, but many are worried that they will not have put away enough money for their retirement. Fewer and fewer Canadians have workplace pensions based on defined benefits or defined contribution plans to fall back on. To help those Canadians achieve their goal of a safe, secure, and dignified retirement, in the face of these challenges, the Government of Canada is committed to working with the provinces to strengthen the CPP.

Co-operative efforts as joint stewards of the program led to Canada's Minister of Finance reaching a historic agreement, in principle, on June 20 to enhance the CPP. All of my colleagues on this side of the House were very proud of that accomplishment.

What would this agreement mean in principle for Canadians?

Once it is fully in place, the CPP enhancement will increase the maximum CPP retirement by about 50%. Right now, the current maximum is just a little over $13,000, which is not enough by most living standards across the country. In today's dollar terms, the enhanced CPP would represent an increase of nearly $7,000 to a maximum benefit of nearly $20,000. Enhanced benefits will accumulate gradually as individuals pay into the enhanced CPP.

Young Canadians, and this is a group about which I know all members of the House are concerned, just entering the workforce would see the largest increase in benefits.

To fund these enhanced benefits, annual CPP contributions would increase modestly over seven years, starting in 2019. For example, an individual with earnings of about $54,000 or $55,000 would contribute about an additional $6 a month in 2019, an amount that should be manageable for most hard-working Canadians. By the end of the seven year phase-in period, contributions for that same individual earning that same income amount would be about an additional $43 per month.

To ensure that eligible low-income workers are not financially burdened as a result of the extra contributions, the Government of Canada would enhance the working income tax benefit, an existing benefit that is designed to keep people in the workforce and encourage others to join it.

Enhancing the CPP will significantly reduce the share of families at risk of not saving enough for retirement and a degree of under-saving.

The CPP will always be there for Canadians because it helps to fill the gap for those who do not have a workplace pension plan, and it is portable across jobs and provinces.

Canada's retirement income system provides a balance of mixed public pensions and voluntary savings opportunities to enable Canadians to save for their retirement. The retirement income system is based on three pillars.

The first is the old age security program, which was altered under the last administration in an attempt to extend the age of eligibility to receive the full benefit and appreciation of that plan to age 67. Again, I am very proud to say that among the first measures this government took was to rescind that extension and restore the old age security program eligibility age to 65, something that was met with great support in my riding and, I dare say, right across this country.

The CPP and Quebec pension plan is the second pillar. They provide a basic level of earnings replacement for workers. They are financed by contributions from workers, employers, and self-employed individuals.

The third pillar is a voluntary tax-assisted private savings opportunity. Some examples include registered pension plans; pooled registered pension plans; registered retirement savings plans, commonly known as RRSPs; and tax-free savings accounts. Individuals and their employers may contribute to these savings vehicles on a voluntary basis.

In addition to saving through the retirement income system, Canadians may also choose to draw upon other financial and non-financial assets for retirement income. These include, for example, financial assets held outside of tax-assisted registered plans, housing equity, and small business equity.

Let me say a few more words about the current Canada pension plan. The CPP is a contributory public pension plan that provides a basic level of earnings replacement. With these revisions, as I have said before, we would see modest increases gradually over the course of a number of years at a pace that most hard-working Canadians would be able to absorb.

Let me say a few more words about why it is that we are enhancing the CPP. As we have looked closely at the situation of Canadians as they approach their retirement, we understand that middle-class Canadians are working harder and harder. The Department of Finance has examined whether families nearing retirement are adequately prepared for retirement, based on household income and wealth data from the 2012 Survey of Financial Security. Families are considered to be at risk of under-saving for retirement if their projected after-tax income at retirement does not replace at least 60% of their pre-retirement after-tax family income.

Although Canada's retirement income system has served many Canadians well, the Department of Finance has estimated that almost 24% of families nearing retirement age are at risk of not having adequate income in retirement to maintain their standard of living. This suggests that roughly 1.1 million families approaching retirement age will not have enough money to maintain their standard of living when they retire; hence the enhancements.

I will just take my last few moments to indicate to the House that recently the Minister of Finance had the occasion to come to my riding of Eglinton—Lawrence to meet with my constituents to speak personally about this historic achievement. What was most distinguishing about this visit was that we visited with constituents who are on either side of the age continuum. We visited first with seniors to speak about enhancements to the old age security program and to the GIS program. Then we went to visit with high school students at Lawrence Park Collegiate Institute.

It is truly for them where the focus of this program lies, which is the future, to provide retirement security not only for present day seniors but also for hard-working young Canadians, and I am proud to say that by passing Bill C-26 we will have accomplished that goal. I urge all of my colleagues to support it.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Mr. Speaker, thank you for this opportunity. It is a great honour to speak to initiatives that are very close to a lot of our hearts. I know it is close to mine. We are talking about the proposed changes in Bill C-26.

I think it should be noted again that these changes will not take full effect until 40 years have passed and will take money out of the paycheques of hardworking Canadians and put thousands of jobs at risk.

It needs to be re-stated that these changes will not provide relief to our seniors. If we want to give relief to our seniors we could start with the high cost of electricity in the province of Ontario and the failed policies that have resulted in those things. Those are the real issues that are causing poverty among our seniors today.

We are going in a little different direction. I have not heard this said yet, so I will talk about someone else the bill will hurt. We know it will hurt employers. Employers are the ones that do the hiring. They are the ones who make those higher CPP payments. It will hurt employees, because they will not longer be employed. They will not get those job opportunities. The one group of people who will really hurt the worst is the the poor. I have not heard that discussed by the opposite side, and surprisingly by the other party on the left.

What about the poor? The poor are the ones who need jobs. We talk so much about how we need to help the poor today, but if we want to help a poor man or a poor woman, give them a job. This particular legislation puts a death knell to that.

We have a good organization in my riding of Chatham-Kent—Leamington, the Chatham-Kent Workforce Planning Board. We had a meeting with them. They are involved in job creation and are doing their part. We heard some encouraging statistics, because the rate of unemployment is dropping in Chatham-Kent—Leamington.

In a former life I had a business. I was a car dealer. I got to work for who I think is probably the smartest guy I have ever met in the car business. He is an actuary. He was a graduate of the University of Toronto. He used to tell me that it is all in the numbers and that I should check the numbers. Subsequently, I have kind of been a number miner.

When I looked at the Chatham-Kent workforce statistics, they showed first of all that we had the large employers and the small and medium-sized businesses. There were some really discouraging statistics. First, we have only two employers who employ over 500 people in the riding of Chatham-Kent—Leamington. The other group is shrinking too.

However, we all know who does the hiring. It is small business. There was a group of businesses with zero to 100 employees. Which group was the largest? Let me just clarify this so members can understand my question. Of that group of businesses that employ from zero to 100 people, which segment was the largest hiring group? I have asked this question of a number of people and we get some varying answers. Some went as low as three employees. Do members know what it is? It is the segment with zero employees.

I was shocked when I saw those numbers, but I am not that shocked when I see legislation like this, because an employer will hire someone when he does a good job. If an individual is a finishing carpenter and the demand is such that the business is getting more work and it makes sense to hire another employee, then they have a whole lot more managing to do, but they will pay that employee what he is worth.

Oftentimes, those people who are at the entry level do not have that value yet. Members can check the statistics for themselves. It is shocking to see that more and more people are doing it on their own. They are not going out and hiring. Who does that affect? It affects the poor, the disenfranchised, the ones we often call the generational poor. It is generational poverty.

My wife and I love parades. When we go down King Street and get into the east end in our home town of Chatham, we get the marginalized people. These people oftentimes do not have the privileges we have. Life is a bit tougher. A lot of them do not have jobs or have not had jobs for a long time. It is those people who will be affected. It is those people who will not be hired. The sad thing is that this continues on generationally.

If the cost of hiring an employee was such that it made sense for that carpenter, plumber, electrician, or whoever to hire, they would. The economy is growing, but the problem is that we put these restrictions on people and we do not realize who it is hurting.

We hear so much in the House about the middle class. I am part of the middle class too. However, we should be talking about the poor. The poor do not necessarily vote for me. However, we should be talking about those people. They are the people who have no voice. Those are the people who look for jobs and cannot find them, or just give up. If we talked about those people, if we have a heart for the people who do not necessarily have a chance, I think we would be talking about something else when it comes to CPP.

I have an idea. Let us have a universal pension plan. I have talked about this with a number of people. We have universal health care. Imagine talking to our neighbours or other people in our home towns who need knee replacements. However, because they do not have a universal pension plan, it will be two years until they can get their knee fixed. However, for us, it would be two weeks. We do the same thing in our pensions. If we really wanted to make change and affect the economy, we should talk about a universal pension plan.

Years ago I had the privilege of working on the finance committee and I got to know a man by the name of Bill Tufts. He is involved in an organization called Fair Pensions for All. Bill and I talked about what would happen if we took all the CPP, OAS, GIS contributions and all of the government's contributions to pension plans, threw it in a big pot, and divided it among all the people who were retired. Every woman and man in our country would get $24,000 when they retired. There is a real solution. If we really wanted to help the poor, if we really wanted to make some changes, there is a universal pension plan right there.

I know that might be a pipe dream, but I am concerned that this legislation would further exacerbate the hiring abilities of employers today. Although that is tough and although it is going to make it rough on employers, it is especially going to make it rough on the poor.

I fear that for the coming generation, more and more it will be impossible for us to hire those who need the jobs, those who will move from their poor status to a higher status, to the middle class, the one we all talk about so much in the House.

I hope members on the other side, because ultimately this will go vote, will consider the damage this will do to our economy, the damage it will do to that group, and ask their government to make the changes and not let the bill before us pass.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am glad to join this debate since this is actually the last time we will be able to have this debate on Bill C-26 in this House.

I want to start with something I used in the last session, a Yiddish proverb. “With money in your pocket, you are wise, and you are handsome, and you sing well too.” I am sure the Minister of Finance has a great singing voice. However, this proverb speaks to how money is best left in the pockets of Canadians, of the people who actually earned it through hard work, having a job, either working for themselves or fulfilling someone else's need.

What the government has done today by shutting down debate after a mere eight days does a great disservice both to the discussions so far on this bill and the interventions other members have made. This debate on the Canada pension plan is important. It is with respect to a proposed law that will amend that which will impact Canadians for many generations. Therefore, having 20 days, 25 days, or 30 more days of debate is absolutely worth having on something that will have an impact on future generations 40 years down the line.

I also think it is shameful that the Minister of Finance called this debate a stalemate so far. It is a commentary by a minister of the Crown on the work that we do on behalf of our constituents here to loyally oppose the government's agenda, to bring new ideas, and to raise points for future consideration and possibly for amendments that the government could bring to its own bill, either at committee or second reading, wherever it chooses to do that. Therefore, debate in this House is not a stalemate; it is an enriching process of what I will call crowdsourcing of new ideas. We are the crowd sent here by our constituents to speak to ideas and to offer them up to the government. Therefore, it is not a stalemate, and I very much think the government should realize we are not here as an audience, we are not here to spectate while it passes legislation. Her Majesty the Queen has given us the constitutional authority to loyally oppose, and that is what we will continue to do. Therefore, I very much look forward to the Minister of Finance not using such terminology.

I also want to point out that it was an internal finance document from his own department that said that this bill, the expansion of the CPP, will be a drag on the economy until 2030, and that it will suppress employment growth until 2035. I come from a province where we have a jobs crisis. The Speaker knows this. I had asked for an emergency debate last week on this because 122,000 energy workers are out of work. However, there are very many people who are under-employed, people who have been furloughed. Normally, they have a job, but they are just not being paid, and they are not being captured by the unemployment figures. When people are not working and not earning an income they are not paying into CPP, so it really does not matter. None of this will help any of the people if they do not have a job in Alberta right now because we have a jobs crisis.

There is also an open question that remains unanswered on the administration costs of layering on this new CPP program on top of the old CPP. It is not clear how much that will cost in the long term, over the next 40 years, and how much its management and administration will eat up the savings of Canadians.

Jack Mintz is a very well-respected tax specialist, a former professor, and a former head of the School of Public Policy at the University of Calgary. He wrote a piece entitled, “What the TFSA limit increase really means for future governments”. Although that was on TFSAs, he had a lot of great points on savings, and the behaviour and psychology behind saving as well. He brought up the fact that what many future governments will be looking at is a tax rate with a low-interest environment and 100% on inflation-adjusted returns. What we will find is that the tax rate will have a huge impact on the savings themselves, how we save, and what is deducted off our savings, so there is an open question there on people's incomes, how they save, and what they will see on their tax returns. They will get nothing from the CPP on it there.

He went on to say that a one-size-fits-all rule is of little help and that for a lot of Canadians, the need for a comfortable retirement depends entirely on individual circumstances and preferences. That is an important consideration too. Not everyone retires in the same way or with the same model. Not everyone chooses to simply stop working entirely. There are a great many people who choose at 65, 70, 75, or even earlier if they take early retirement, to work part time, and to maybe volunteer in their community or at their faith-based institution, at a church or at a temple. They may also choose to change career paths later and choose the concept of retirement around 65 years of age to choose a new career they would like to pursue. Therefore, not everyone chooses to simply stop working.

A point I have brought up in previous debate here, and a question I asked one of the members of the Liberal government caucus, is this concept of savings substitution. There is a study by the Fraser Institute that shows that forcing Canadians to save more, using the government's concept of “more”, would lead to a decrease in private voluntary savings with little or no increase in overall savings.

Savings substitution is a real danger to both the government's plan, but in general also to our economy and to people's independence from government.

People should be allowed to choose how they retire. They should also be allowed to choose how they save and what type of investment vehicle they want to use. A lot of people have chosen to save in real estate, and real estate has provided the best returns over the last two generations to those who have chosen to go down that path.

One of the very first things my wife and I did was to purchase a condo, because we knew that would get us onto the property ladder. It allows people to save. They put aside money because they are trying to pay off mortgage interest and trying to put money away toward the principal. It is a mechanism that allows them to choose saving, but to choose it in the way they want to do it.

When the previous Conservative government introduced TFSAs, then doubled the maximum amount people could put away, it was a way of showing Canadians they could choose another model to save on their own, one that is tax free. We should stop taxing the savings of Canadians and forcing them to put more toward this layered CPP on top of another CPP. The administration fees for this are another form of taxation. We send money to Ottawa, to the government departments for some work to be done. That is a form of taxation. That is what our taxes go toward.

Building equity in housing has consistently been the best thing for saving, for youth especially. By buying a property they are getting onto that saving ladder.

I would be remiss if I did not mention the rate of return. The annual rate of return, reported by the CPP Investment Board, is actually quite low, and the younger one is, the worse off one is. For those who nominally put money into the CPP because they were forced to do so back in the 1960s and 1970s, they will get the best rate of return. I look at the pages in this chamber. They will have the worst rate of return. My generation and their generation will be worse off because the rate of return is so low, sometimes falling below 2%. That is because of record low interest rates, which are really driving this low rate of return. Also, administration fees cannot help but be higher.

No one cries for a job that is never created. No one cries for an investment return that never happens. What we always talk about here is the give and take, this job here or that job there, the taxation of incomes on one side and how government chooses to spend it, versus the individual who chooses to spend it in a certain way.

What the government is doing with the CPP increase is substituting for the person's choice on how they will save. That substitution will have worse results at the end of the day, especially for the next generation, because the rate of return will be so low. If someone chooses to invest in a property or in investments where they could earn a higher rate of return than the government is able to achieve, why can a Canadian not make that choice? Sure, the government will say it is one size fits all, that we are guaranteed a return. The higher the risk the higher the return. Canadians can choose to take a higher risk. With risk, of course, can come disappointment. They could lose their investment. Their retirement may not be as certain as they thought it would be, and they may have to adjust their goals and plans. That is why everyone should be doing financial planning for themselves. We should be encouraging people to not be dependent on the government.

The Fraser Institute noted this as one of the five myths of the Canada pension plan. Myth number 4 was “The CPP produces excellent returns for individual contributors”. They are thin margins.

There are a great many seniors who are better off today than they were pre-2006. They are better off thanks to the previous Conservative government's work to try to ensure they had a solid retirement. Lots of reports have shown this. Statistics Canada has said that the share of Canadian seniors living on low income has dropped from 29% in the 1970s to 3.7% today, which is among the lowest in the world.

The Human Resources Institute of Alberta is responsible for HR professionals in the province. It has said that consistently, across the board, only about half of all organizations offer employment pension plans and group RSPs with employer-matching plans. That means half of all employees in the province of Alberta may lose the opportunity to continue investing in their employee pension plan or group RSP, because they do not have the money to invest in it and see that matching funding by their employer. They simply will not take advantage of it.

I oppose the bill, and I encourage all members to oppose it as well.

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

Mr. Speaker, today and over the past few days, we have heard the same as we have heard in previous debates on this legislation. The fundamental difference is that ideologies in the chamber become more and more evident every day.

Differences in opinion are good and, in fact, are foundational to our Westminster style of Parliament. However, what we are seeing from the Liberal Party and the New Democratic Party is a trend that is deeply troubling. Whether it is the Liberals in government or as individually elected members of Parliament, they still think that they know better than their constituents and all ordinary Canadians. Conservatives believe that Canadians know what is best for them. For the Liberals and NDP to imply that they know better than ordinary Canadians is an insult. Canadians are in the best position to make their financial decisions, and those include decisions related to their retirement.

We saw this difference in perspective most clearly recently when the Liberals clawed back the tax-free savings account contribution limit. The TFSA is a phenomenal vehicle for personal savings. For retirement, it could be used to make a lump-sum mortgage payment, maybe do an urgent home repair, or maybe even finally take that long-awaited vacation, but the important detail is that it is completely tax free.

We have all heard the saying that Liberals have never seen a tax they do not like and the NDP has never seen one it does not want to hike, but if the government thinks it can increase payroll taxes on Canadians because it has decided to blow through its election promise of a supposedly small deficit, which has now grown to over $30 billion, it can expect strong opposition from the Conservative Party and many other Canadians.

The Liberal government has spent much of its time patting itself on the back for its openness and transparency, but let me share what Canadians actually believe about the CPP and what this legislation would change. Liberals have been slow to correct these misconceptions. So much for transparency.

Forty per cent of Canadians actually think the government pays into their portion of CPP, and nearly three-quarters of Canadians do not realize that current retirees would not benefit from the proposed expansion. In fact, nearly one-quarter of current retirees wrongly believe that they will see larger CPP benefits as a result of the proposed expansion. Most Canadians are not aware that it would take up to 40 years of increased premiums in order for workers to see the full impact of these increases to their CPP benefits. I would like to know what efforts the government is making in addressing these misunderstandings. Will it be open and transparent and point out upfront that it will take 40 years for the additional CPP benefits to be realized?

As a former small business owner, I know the real effects that these CPP premium increases would have on small and medium-sized businesses in Canada. In committee two weeks ago, Ms. Monique Moreau, director of national affairs for the Canadian Federation of Independent Business, shared a compelling statement as it relates to the impact on small businesses.

Representing more than 109,000 small and medium-sized businesses, the CFIB is worried about the negative impacts on these businesses. She shared that its monthly poll on small business confidence dropped in September and October, now sitting at 57.7%, as opposed to the 70% where they would like to see it. She said:

Small business owners don't have money hiding under the mattress waiting for government tax hikes. If CPP/QPP is increased, even if it results in higher future benefits, two-thirds of business owners indicated they would feel pressure to freeze or cut salaries, while nearly half would be forced to reduce investments in their businesses. This impact comes at a time when the government is trying to encourage innovation, investment in business, and job creation in small firms.

The results of these changes in CPP premiums might not be as visible in business operations with just a few employees, but if we start to look at businesses with 15 or maybe 20 employees, the costs that these changes would impose could be crippling, causing layoffs, wage freezes, or even closure of businesses.

Ms. Moreau went on to say:

...if employed Canadians had extra money to save for retirement, they would first invest in RRSPs and TFSAs over other savings vehicles such as the CPP/QPP. Small business employers also favour such saving vehicles if they have the opportunity to contribute toward the retirement savings of their employees.

If the government is trying to help Canadians save more for retirement, only 18% of Canadians are choosing mandatory CPP increases. There is a variety of other options available, including reducing taxes, creating new incentives for savings, and allowing employees to voluntarily contribute to their own CPP/QPP. Putting pressure on financial institutions to lower their management fees for retirement savings vehicles is also an important consideration.

It is clear that not only are Canadians for the most part unaware of the changes the government would make to CPP, but those who are aware are misunderstanding the impact of these changes. For those who do understand, the large majority seem to drastically oppose these changes in favour of other measures.

Aaron Wudrick, federal director of the Canadian Taxpayers Federation, also shared his concerns at committee, noting, as I have, that it is a classic case of government believing that it, rather than Canadians, knows what is best for Canadians. Aaron touched on a very important point in his opening remarks. He said:

It is also important to stress here that, when we are discussing income security for seniors, income support is often conflated with income replacement. CPP, of course, is a program where the yield you receive depends on what you pay in. Enhancing it, therefore, does nothing for people who are not paying very much into it in the first place. It does not give people extra money. It simply shifts the money from the current day into the future.

This is very troubling. We know that household incomes are stagnant and that in many sectors wages are frozen or shrinking. What Canadians do not need is another tax that shrinks their take-home pay. This would have effects on spending and investing habits, and would ultimately hurt our already fragile economy.

Furthermore, it is true that since CPP is geared to income these changes would not help lower-income Canadians. A paper released by the C.D. Howe Institute shows that the Liberals' plan for CPP would not benefit low-income workers. They would see their premiums go up but their net increase in retirement benefits would remain low since higher CPP payments would be offset by clawbacks in GIS benefits. These changes would also not help Canadians who are facing rising unemployment. In fact, it seems like the changes being made today would make life harder for those who are trying to enter their field of work. The Department of Finance analysis shows that the Liberal government's plan to increase CPP would hurt job creation and the economy as a whole. Quoting directly from its information, these changes would reduce employment by 0.04% to 0.07%. That is 1,050 fewer jobs every year, which means, over a 10-year period, 10,000 Canadian jobs that would not be created, as a result of this CPP increase. This is from the Department of Finance.

Do the Liberals really believe that the changes they propose, which would have no benefits today or in the near future and would have minimal benefits for Canadians retiring 40 years from now, are really worth the job losses today and decreased investments for jobs for tomorrow?

In closing, it is worth noting once again that the Liberal Government of Canada does not know what is best for Canadians and that the Liberal government should provide Canadians with all of the choices they deserve in making their own retirement decisions. The government needs to immediately return the annual contribution limit to the tax-free savings account and promote its use through advertising and educational programs. This is a fantastic savings mechanism that does not lock in people's savings that might be needed in case of an emergency, unlike CPP contributions, which they cannot access as needed.

For the benefit of the survival and success of small and medium-sized businesses, I urge my colleagues to reject Bill C-26.