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.

[The Chair, Liberal, Wayne Easter]

Okay. In any event, it's a notice of motion, and it will be scheduled in and debated at the first opportunity after 48 hours.

Turning to Bill C-26, I think everybody has been through this procedure before. There are only two amendments for the bill, which have been proposed by the NDP. One is on clause 22 and the other is on clause 24.

The procedure we can follow is to go clause by clause or, where there are no amendments, we could go from clause 1 to 21. How do you want to proceed? Do you want to go clause by clause or have them in a block?

Mr. Albas.

[The Chair, Liberal, Wayne Easter]

We'll call the meeting to order.

Pursuant to the order of reference of Thursday, November 17, 2016, we're here to deal with Bill C-26, an act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act, in clause-by-clause consideration.

I would just mention a couple of things before we get to that. Officials are in the room. If there are any questions on any clause, officials are willing to come to the table and answer them.

We also have a written response from the Department of Finance on Bill C-26, which we asked for at a previous hearing. That is on your iPads. It just came in.

Pensions

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, 10 times I stood in the House last week and asked if the government would fix its flawed CPP legislation, Bill C-26. Ten times I received non answers.

Today, I will be introducing my amendment at committee to fix this Liberal flaw that would have serious consequences on the well-being of Canadian women and people living with disabilities.

I have a very simple question for the minister. Will he fix the flaw in the bill by supporting my amendment, yes or no?

[The Chair, Liberal, Wayne Easter]

The problem is that we're under a very tight time frame. Anyway, we'll give that a little thought. I'd love to see what those independent numbers would be.

Committee members, tomorrow we meet in room 112-N for clause-by-clause examination of Bill C-26 and we go until we're done.

Witnesses, thank you very much for your presentations and your responses, and thanks to some of you for coming on short notice.

The meeting is adjourned.

Canada Pension Plan

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, we have all heard the stories that middle-class Canadians are trying to work harder than ever, but they are worried that they will not have enough to put away for this month's bills much less their retirement. Our whole economy, in fact, over the last 15 to 20 years, has been based on consumer spending, and we have run up the credit cards. Therefore, putting that little bit away each month or even in the course of a year for retirement is becoming extremely difficult.

I have to admit that I am not one of the 20% of Canadian families who get 46% of the wealth. The rest of us are left to basically fight over the scraps, and that does not bode well for the future.

We have one in four families approaching retirement, and about 1.1 million families at risk of not having enough. We have heard this loud and clear in our meetings with the constituents, in town halls, and on the doorsteps right across the country. I certainly heard it, and mine is a relatively prosperous riding.

This is why the Government of Canada committed to helping Canadians achieve that goal of a safe, secure, and dignified retirement. It is why we made it a core component of our commitment to work with the provinces and territories to strengthen the CPP, and on June 20, in Vancouver, we delivered. It was a historic occasion. Canada's governments, plural, agreed to enhance the CPP to give Canadians a more generous public pension that would help them retire in dignity.

The definition of dignity came up. What does that mean? Well, it means not having to split one's medications in half or go without. It means not having to choose between keeping the house warm or keeping a good meal on the table.

On behalf of hard-working Canadians, I would like to once again thank our hon. colleague, the Minister of Finance, for his tremendous efforts in advancing this dialogue. The credit also goes to his counterparts in the provinces right across the country who also saw the need, had the vision, and agreed with us that it needed to be done.

Today, we as parliamentarians have a chance to support these quintessentially Canadian values and join their efforts to provide Canadians with a stronger CPP. Canadians have made it clear that they support an enhanced CPP. They did that by an overwhelming majority about a year and a couple of months ago.

The Minister of Finance did a tremendous job, when he introduced the legislation last week in the House, of articulating Canadians' concerns and spelling out precisely how this bill would give them a more generous public pension that would help them retire well. Today, I would like to build on this momentum for a stronger CPP by kind of taking a look under the hood at the enhancements that the CPP changes would bring. When we do this, we are going to see in even greater detail why this agreement is going to be so effective in meeting its objectives and why it merits support.

First, it is a balanced approach on a rock-solid foundation. One of the greatest strengths of this government and this agreement is that it is based on extensive, professional, and rock-solid economic analysis. Central among its assumptions is the premise that families need to have enough in savings set aside to replace about 60% of their pre-retirement income.

This 60% income replacement threshold is fully consistent with the considerable range of empirical literature suggesting an appropriate adequate income replacement rate should be between 50% and 70%, depending on family circumstances. At the top of the range, some suggest that 70% is sufficient to keep the consumption of an average Canadian family in line with that seen over their working years. However, the 70% target is a benchmark typically used in defined benefit pension plans, which are a pretty rare breed these days. It is also often used by retirement planners in providing advice to their clients.

However, we know that retirees typically spend less in their older ages, because they generally buy fewer durable goods like cars, or because of physical limitations. Many households also downsize their homes in retirement and use those proceeds to finance consumption. This implicitly means that a lower pension income replacement rate would be appropriate.

In view of these considerations, the Department of Finance, as well as many academics engaged in studying these issues, believe that using the 60% replacement rate is more appropriate, as it is generally regarded as sufficient to avoid a material drop in the standard of living. Therefore, this carefully targeted, balanced approach is reflected in the legislation we have before us today.

Now, had finance ministers tried to make the enhancements more dramatic, they would have, as the fears expressed by the other side, placed too much of a burden on workers and their employers as a result of the correspondingly higher increases in contributions that a dramatic enhancement would have entailed.

Had the finance ministers not been ambitious enough in targeting the enhancement, the resulting increase in benefits would have been too marginal to effectively support Canadians in reaching their retirement income goals.

As it stands, today's legislation would have a comprehensive package of enhancements that would increase CPP benefits while striking an appropriate balance between short-term economic considerations, long-term gains, and the provision of flexibility in retirement income decision-making.

Let us talk about the balanced approach and the benefits it would bring.

The balanced CPP enhancement contained in Bill C-26 would increase the maximum CPP retirement benefit by almost 50%. To put this in dollar terms, the current maximum benefit is, give or take, $13,000 in today's dollar terms, but the enhanced CPP benefit would represent an increase of nearly $7,000, to a maximum of around $20,000 a year. With this increase, it would meaningfully reduce the share of families at risk of not saving enough for retirement, as well as the degree of under-saving.

The Department of Finance has estimated that the enhancements would reduce the share of families at risk of not having adequate retirement savings by about a quarter. It would take it from 24% to about 18%, when considering income from the three pillars of the retirement income system and savings from other financial and non-financial assets.

For most Canadians, all these increased CPP benefits would come from only a 1% increase in contribution rates.

Moreover, as the finance minister explained last week, it would also include provisions that would help ensure that low-income Canadians are not financially burdened as the result of the extra contributions and, because of its balanced and targeted approach, it would achieve this while also supporting a stronger economy over the long term.

However, above all else, it would mean there would be more money from the CPP waiting for Canadians when they retire, so they would be able to focus on the things that matter, like spending time with their families, rather than worrying about making ends meet.

This outcome is precisely what we had in mind when we began engaging with the provinces to enhance the CPP. With Bill C-26, we are delivering on this promise.

However, how we have achieved this is just as important as what we have achieved.

We have done it by basing our decisions on rock-solid economic analyses and research that draws on the best elements of independent academic literature on retirement savings.

Equipped with this knowledge, we have taken a carefully targeted and balanced approach that would give Canadians more money in retirement without burdening them or the economy. We have given Canadians the flexibility to invest in other discretionary retirement savings as they see fit and, as important, as they are able. We have accomplished all this by working in common purpose with our provincial and territorial governments.

By doing all this, we have shown the power of the fundamental principles of commonwealth and co-operation upon which this country was built.

Today, we have the historic opportunity to act on these principles to build an even stronger country for future generations. With Bill C-26, we have the chance to support the implementation of the agreement that Canada's governments came to on June 20 of this year to enhance the CPP, to give Canadians a more generous public pension that would help them retire in dignity.

I invite members to become part of this history by giving this bill their full support.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Mr. Speaker, this is my first opportunity to speak to Bill C-26. If I am one of the 36 on this side, I am privileged to extend the debate here today in the House.

The Liberal government continues its assault on hard-working Canadian families. If it is not the carbon tax, it is the CPP tax hike from 9.9% to 11.9%.

What does this mean for hard-working Canadian families? It means they will have less money in their pockets today. They will have less money in their pockets to maybe purchase their first home. They will have less money in their pockets to maybe go on a trip this winter. The economy will suffer because of this. This increase, as we all know, could put thousands of jobs at risk.

I will go further on that. It is another tax on small businesses. The Liberals have broken their clear promise to small businesses to proceed with their reduction in the small business tax rate to 9% in 2019. This decision will cost small firms over $900 million per year as of 2019, according to the CFIB. Now businesses will have to pick up the increase in these CPP premiums. Premiums will rise up to $2,200 per worker, split between the employer and the employee. Seventy per cent of small business owners totally disagree that the proposed CPP increase is “modest”, as the government calls it. Ninety per cent of small businesses think it is important to have public consultations before any deal at all is finalized.

The Liberal government talks about being engaged with Canadians. Then why does it not sit down with the business community of this country first before going ahead with this? Yes, it has said before that it has consulted with the territories and the provinces, but perhaps it should first talk to the businesses that will be most affected by this CPP increase.

Even with the low Canadian dollar, the Liberals have generated 20,000 fewer manufacturing jobs in the country. In my province of Saskatchewan alone, we lost 4,000 jobs this August from the same period last year. The trend continued. Six thousand fewer people are working in my province this year than they did the year before. The October numbers are out, and they do not paint a pretty picture. Ten thousand fewer people are working in my province today than they did in 2015.

Our previous government led the way for Canadians to save for their future. Canada's savings rate has climbed, as we all know, from 7.7% of pay back in 1990 to almost double that today, at 14.1%. According to Statistics Canada, the share of Canadian seniors living on low income has dropped from 29% in 1970 to 3.7% today. That is still too high. We would all love to see it at zero. However, that is still among the lowest rates in the world today. Eighty-three per cent of Canadian households are on track to maintain their current living standards for retirement.

Let us be honest that each and every family has different views on retirement and that this, too, is up to the family.

The TFSA, put in by our previous government, was simply a fantastic tool for investing for retirement, or even for someone today who is one of the 10,000 in my province who were laid off . Many Canadians are enjoying these benefits. We wanted to increase the contribution limit to $10,000, knowing that it would give Canadians an incentive to save for the future, but the Liberal government, as we all know, rejected that idea.

I believe that the CPP tax hike is really an insult to hard-working Canadian families. Our previous Conservative government believed that Canadian families were able to manage their own money. We had confidence. Obviously, the Liberal government does not trust the Canadian family.

What is concerning to me is that in my province of Saskatchewan, since we have had downturn, more than half of the people are on the verge of not paying their bills. A report by Meyers Norris Penny shows that 64% of people in my province are now living within $200 a month of not being able to pay their bills or their debts. The Liberals can talk about the CPP increase starting at $6 a month and increasing to $33 or $43 a month, but think about these families who today are within $200 a month of not meeting their bills. Thirty-four per cent of people in my province say they already do not make enough money to cover their bills and 57% of people are concerned about their current level of debt—again a jump of 14%.

May I remind the Liberals of laid-off workers. Their families are not the only ones hurting. The slowdown has trickled down to everyone in my province, including the retailers, the restaurants, and virtually every business and every sector. This is why the CPP tax would have a major effect on everyone in my province, the 1.2 million who live there.

We all know that the small- and medium-sized businesses drive the healthy economy, but the additional CPP tax on them could have major impacts on their hiring decisions. We have already seen that. In the past year, the Liberals have not created one full-time job in this country. We wonder about this. The millennials in this country are now upset, as they should be, about the sunny ways of the finance minister, who was recently talking about the job turn and saying not to expect any long-term employment at all. We have witnessed massive increases in part-time jobs at the expense of full-time employment. This will further erode the middle class in our country.

Employees have four avenues of retirement. We have pensions, the current CPP, the improved GIS, and the OAS. Plus, let us not forget that we have other assets like inheritance, life insurance, and other financial assets along with the TFSAs. The value of housing has certainly gone up over the last 10 years, more so in Vancouver and Toronto markets, so that when the baby boomers die, their bequests will give many millennials a healthy financial backing.

We have talked about the CPP tax increase. I am going to discuss the carbon tax now because it is another tax on employees and employers.

In my province of Saskatchewan, we have been very vocal about this carbon tax. I am going to invite the politicians in this House to fly over my province, and especially over Buleya, Saskatchewan. On the field, farmers have created circles with the letters c-a-r-b-o-n t-a-x. These farmers have gotten together in their fields and have drawn a circle around those letters and a line through them, saying no to a carbon tax.

I hope all of the farmers in our province do the same for the CPP tax increase. We do not need it in our country at this time. We all want to have money for retirement, and increasing the CPP premium rate from 9.9% to 11.9% starting in 2019 would have a big effect, not only in my city and in my province but also in the entire country.

[Randy Boissonnault, Liberal, Parliamentary Secretary to the Minister of Canadian Heritage]

Mr. Speaker, I rise today to address what has transpired in this House over today and yesterday.

Today would have been the sixth day of debate on Bill C-26, a bill that would help Canadians achieve a secure, safe, and dignified retirement.

The Conservatives have requested more time for debate on the bill. They could have debated the bill today, as scheduled, but instead, they resorted to procedural tactics to obstruct debate and attempt to shut down the House of Commons and go home.

I had hoped for a negotiated consensus, but now we will respond to political manoeuvring from the other side in the Conservative Party, so that such important financial measures that affect all Canadians are brought to a vote.

Disappointingly, it has become clear that the Conservatives would rather focus on these type of tactics than debate substantive issues. As a result of Conservative tactics, six committees were disrupted or cancelled, including the appearance of five ministers and important witnesses scheduled to testify on issues of relevance to Canadians.

This kind of behaviour is exactly what Canadians rejected when they voted for real change a year ago.

Consequently, the Conservatives have left us with very few options in terms of how—

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

Mr. Speaker, I am especially pleased to speak again to an issue that is so important to the future of our seniors, our country, and retirees.

I am referring to Bill C-26, an act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act. There are several reasons for that. This bill is the promise of a better future. It also reflects the government's commitment to help Canadians achieve their dream of a more secure retirement.

It is a project for the future and for young people who are currently preparing to enter the labour force. This next generation will also be assured of a dignified retirement. We are acting for a future that goes beyond any election cycle to help those who will come after us.

We are building on what was accomplished by the decision-makers of the 1960s who created the Canada pension plan, enhanced old age security by creating the guaranteed income supplement, and implemented measures that, in the long term, would significantly reduce poverty among seniors. What is more, we are here in a true spirit of federalism because the agreement to enhance the Canada pension plan, or CPP, comes from a real spirit of co-operation with the provinces, who approved the approach.

Do we need to enhance the CPP? Absolutely. It is essential and I will explain why. Middle-class Canadians work hard, but they still do not feel as though they are getting ahead. One in four families who are approaching the age of retirement, or about 1.1 million families, may not be able to save enough money to maintain their current lifestyle when they retire. We have to take action.

We also have to accept the fact that fewer companies are offering defined benefit pension plans and that fewer Canadians have such a plan. It is a major challenge for Canadian families and it is time we dealt with this. The agreement we reached with the provinces will increase the retirement income of Canadians who are in this difficult situation, and also promote economic growth and create jobs.

How will the CPP expansion work? There are two key things to keep in mind. First, the CPP currently replaces a quarter of Canadians' average annual earnings. The new CPP will replace a third. Future retirees will therefore have more money in their pockets. Take Mila for example. She is a mother who has earned on average $50,000 a year during her working life. Under the current plan, she will get $12,000 when she retires. Under the new plan, Mila could get a little more than $16,000.

Second, there is a limit on pensionable earnings. The maximum level of pensionable earnings will go up 14% by 2025. That means that the maximum annual CPP benefit, which is currently $13,110, would go up to $20,000 in today's dollars. Under the enhanced CPP, the maximum benefit will go up by almost 50%. It is clear that these changes to the CPP will make life better for retired Canadian workers and will help them achieve their goal of a strong, secure, and stable retirement.

How much will this cost? For most Canadians, the contribution rate will rise by just 1%. Take Kevin, for example, who earns about $55,000 a year. His contributions will increase by $6 per month in 2019. Once the progressive implementation is complete in 2025, Kevin's contribution will have gone up by about $43 per month.

That minor increase will be largely offset by his higher retirement income. With the enhancement, Kevin will collect approximately $17,500 per year in today's dollars in CPP benefits, which is about $4,400 more than under the current plan.

I should also mention that contributions to the enhanced portion of the CPP for wage earners like Kevin will be tax deductible and that a tax credit will continue to apply to employees' current CPP contributions.

We can therefore proudly say that Canadians will have more money in retirement thanks to the new CPP. Furthermore, the budgets of low-income workers will not be affected, because the working income tax benefit will also be increased to offset the premium increases.

I would like to add that our government has decided to give everyone time to prepare for the new provisions. The changes will implemented gradually over seven years, from 2019 to 2025. This is the responsible way to go, to make sure that businesses and workers have time to adapt. We are taking into account the problems that exist at the provincial and national levels. We have engaged with each province to discuss their particular situation, and we will continue to do so.

We took steps to ensure that we could implement these measures in a way that will not hurt businesses, because we want the owners of businesses of all sizes to be assured that the government will implement these changes to the CPP without harming the functioning of the Canadian economy.

As I said in my introduction, the government is creating a better future for Canadians, especially the middle class. This will have a much broader impact on all Canadians, because it is important to have a long-term vision. Higher CPP benefits will lead to greater domestic demand, which will stimulate the Canadian economy.

Since savings will grow, more money will be available for investment, also thanks to the new CPP. As a result, we expect the gross domestic product to increase by 0.05% to 0.09%, which represents approximately 6,000 to 11,000 new jobs. Quite simply, an enhanced CPP means more savings and a better retirement.

Middle-class Canadians will then be able to focus on what matters most, such as spending quality time with their family and friends, rather than worrying about not being able to make ends meet.

Proportionally, my riding, Laurentides—Labelle, has more seniors than almost every other riding in this country. In 2011, the average age was 49.5 years. Seniors' issues are therefore extremely important in my riding. I am acutely aware of retirees' needs. People think my riding is rich because of Mont-Tremblant, but it is not. Workers in my region do not have much money. We need every tool in the toolbox so we can help seniors and future generations and plan for the long term, not just up to the next election.

Personally, I am sick of the government doing all the planning for future generations in just four years. Life does not end in four years. Life goes on. The country and society continue to advance. We will never fix our problems by always thinking only about the next four years. As the indigenous peoples say, we must think of the next seven generations. If we do not, then society will never improve.

I strongly support Bill C-26, because it is an important step in the right direction. It is not a solution to all the problems. A lot of work remains to be done. However, this is one aspect of a plan for the future, for our seniors, and for society in general.

[Eva Nassif, Liberal, Vimy, QC]

Mr. Speaker, I am pleased to speak today to Bill C-26, which seeks to improve the Canada pension plan. This plan is a recognized and effective part of Canada's public retirement income system. Since its inception and implementation in 1965, under the Liberal government of Lester B. Pearson, it has provided contributors who reach the age of eligibility regular retirement income payments in order to help them cover living expenses during retirement, and to guarantee the financial security of hard-working Canadians.

Together with old age security, the CPP provides the foundation for our publicly funded system for retired Canadians that allows people and their families to hold on to their savings while living comfortably, without the insecurity that comes with financial instability.

As all hon. members may know, the Government of Quebec manages its own retirement plan, the Régime de rentes du Québec, which is akin to the Canada pension plan. The improvements that Bill C-26 makes to the Canada pension plan are an investment in the future.

The bill presents a comprehensive plan that will provide an appropriate and realistic increase in benefits for contributors when they become eligible. This will have a positive and lasting impact on the financial security of Canadian retirees in the coming decades.

The proposed enhancement, which will be implemented gradually and through the creation of a new separate account to manage additional funds for retirees, will guarantee a stable and smooth transition, without imposing a financial burden arising from unmanageable financial expectations.

As indicated in the bill, the changes will be administered by the Canada Pension Plan Investment Board, which will have the authority to prepare financial statements concerning the amounts managed, which consist of the additional contributions and increased benefits.

Last year, Statistics Canada announced that the number of seniors in Canada, people aged 65 years and older, had exceeded the number of children aged 0 to 14 years. In fact, on July 1, 2015, seniors represented 16.1% of Canada's population, compared to 16% for young children. There are now about six million seniors in Canada and this number is expected to grow by 50% in the next 21 years.

In my riding of Vimy, which is located in the heart of Laval, Quebec, there is already a large population of seniors. Since the population is aging, it is vital that we improve the existing mechanisms that, to our knowledge, effectively provide the necessary financial assistance in retirement.

We have the data in front of us, and we know which way the wind is blowing. Bill C-26 will gradually improve the existing system to help meet the needs of our aging population.

Some opposition members believe that this is just another tax hike and that there are better retirement savings options available to individuals. To say that this is a tax hike is completely absurd, and while it may not be completely false to say that there are better retirement savings options, that is true only within reasonable limits and under very specific circumstances.

Members of the official opposition talk up the tax-free savings account, saying that it could and should be the main means by which low-income and middle-class Canadian workers save for retirement. According to the Conservatives, the higher the annual TFSA contribution limit, the more low-income and middle-class Canadians will benefit.

Let us be realistic. The previous government increased the TFSA limit to $10,000. Does anyone really believe that low-income or even many middle-class Canadians can afford to contribute that much to their TFSA?

The TFSA is a mechanism that can be used effectively to invest and save depending on a person's income threshold, but make no mistake, the $10,000 limit benefited only Canadians with very high incomes who were able to use their TFSAs to get a tax exemption. The public purse paid the price of that measure.

The people that TFSAs were supposed to help are the very same ones who were forgotten when that ill-considered increase was introduced. It would have been better to properly address income inequality by optimizing and using other mechanisms enabling low- and middle-income Canadians to keep more money in their pockets and enjoy a comfortable retirement.

We have heard people say that low-income taxpayers are able to contribute the maximum to their TFSAs. Does anyone really believe that low-income workers and certain middle-class workers who support themselves can pay all of their bills, eat reasonably well, pay off their debts, and splurge on something every now and then and still deposit $10,000 per year into a savings account? That would be really disingenuous, and it would be a pretty mean thing to do to the people we are trying to help.

There is also the criticism that this would do nothing to help seniors now. This argument is not only missing the point of the legislation entirely, but fails to recognize what the government has already done for seniors, both through enhancements to existing programs and fixing the mistakes from the previous government. The first budget made provisions to restore the age of eligibility to the OAS and enhance the GIS for low-income seniors, again, putting money directly in the pockets of those who need it most.

This legislation does not do anything immediately, because that is not its purpose. We have already made changes for the interim to help offset the rising cost of living for our most vulnerable seniors. Therefore, to say that Bill C-26 would do nothing for seniors now, has very little to do with the nature of this debate to begin with. This is a long-term project that would ensure financial security of our seniors for decades and has nothing to do with other adjustments to social security we have already made. The reality is a significant decline for a large percentage of employees in Canada who had access to a registered pension plan through their jobs. It is the shortfall in middle-income retirement planning that is opening up as a result of disappearing corporate pensions.

CPP reform is designed to address these shortcomings. The current maximum amount of income covered by the CPP is $54,900. An enhanced CPP would see that maximum raised to $82,700 by 2025. It would also raise the annual payout target from 25% of pre-retirement earnings to 33%. For retired Canadians, this could represent thousands of dollars in take home pension income.

With Bill C-26, we are planning for the future. We are ensuring the well-being of retirees whose other savings options were curtailed by the elimination of private employer-sponsored pension plans. We are offsetting the rising cost of living by increasing the pension benefits that Canadians receive from a quarter of their income to a third.

We are preserving a certain standard of living for all families so that everyone can live with dignity in retirement. Most importantly, our affordable and sustainable approach will ensure that today's prosperity lasts.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Mr. Speaker, I rise today to speak to Bill C-26, an act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act,

I must say that the bill proposes drastic intervention in the form of increased payroll taxes on every working Canadian in our nation. It is not just Canadian workers who would pay for the bill, but Canadian employers would likewise be required to increase their CPP contributions for each and every employee.

At a time when there are already clouds of uncertainty over our economy and employment insecurity for too many Canadian workers, the Liberal government proposes to take more cash from the pockets and books of Canadian workers and employers.

Why?

Canadian economists, Canadian business owners, and even the Department of Finance have told the Liberal government that this proposed tax hike would hurt Canadians. Analyses from Finance Canada show that this proposed tax hike would reduce employment, which is a nice way of saying it would kill jobs; reduce our national GDP; reduce business investment; reduce Canadians' disposable income; and reduce Canadians' private savings.

The Liberal government's own Department of Finance has warned the government of the harms this bill would inflict upon Canadian workers, Canadian employers, and Canada's economy. Yet, the Liberals want to steamroll this bill through Parliament.

Again, I would ask, why? What is the impetus driving this tax hike? Where is the crisis?

Finance Canada has reported that the median Canadian senior earns 91% as much as the median Canadian, which is well above the OECD average of 84%. A study by McKinsey & Company found that 83% of Canadians are on track to maintain their living standards into retirement. It seems that Canadians are saving for their retirement already. The Liberal government could take a lesson from Canadians who are saving at a rate of 14.1% of their pay, which is a marked increase from the 1990 rate of 7.7%.

Canadians understand the importance of personal responsibility, of living within one's means, and of fiscal prudence. It is too bad the Liberal government cannot achieve these same understandings.

It is my belief that the people are best served by government policy when such policy supports and provides incentives for Canadians to make sound decisions, such as saving for their future.

This is why Conservatives introduced tax-free savings accounts, TFSAs, to support and provide incentives for Canadians to save for their future. Unfortunately, the Liberal government has chosen to reduce the amount that Canadians can save in TFSAs.

This is also why our Conservatives expanded the guaranteed income supplement, or GIS, as a means of reducing the poverty rate among seniors, those who need it the most. It was a logical policy that actually worked.

I do congratulate the Liberal government for following our lead by increasing the GIS rate by a further 10% in budget 2016. I hope I can stand in this House one day and congratulate them for also restoring the contribution limits to TFSAs.

Today, the poverty rate among seniors is reported to be 3.7%, which is a significant decrease from the rate of 29%, in 1970.

As Charles Lammam and Hugh MacIntyre of the Fraser Institute wrote in the Financial Post on June 22:

Instead of expending political energy on debating CPP expansion in the misguided belief that many middle- and upper-income Canadians are not saving enough for retirement, the focus of public debate should be on how best to help financially vulnerable seniors.

I say, do it today. While savings are up and the poverty rate among seniors is down, I believe that governments ought to concern themselves with the responsibility of supporting our seniors who need support today, especially the 3.7% who remain in poverty. Unfortunately, this bill would do little to support these seniors this year, next year, or the year after that.

This bill proposes an increase in CPP benefits and that Canadians wait and wait a little longer, and wait a little longer yet, for the next 40 years. If the prevailing trend is that Canadians are saving more and investing and doing their own planning and strategizing for their futures, why is the government not supporting those responsible decisions? Canadians are speaking with their actions when it comes to planning for their retirement, and this bill before us today would undermine Canadians' ability to plan for their future by saving. The finance department's own analysis projects a 7% reduction in private savings over the long run if higher CPP contributions are imposed upon Canadians.

In 1964, the Liberal minister who was tasked with establishing the CPP, the Hon. Judy LaMarsh, stated that the CPP “is not intended to provide all the retirement income which many Canadians wish to have. This is a matter of individual choice and, in the government’s view, should properly be left to personal savings and private pension plans.” Who in this House can disagree with that logic?

Allowing Canadians their individual choices seems a natural conclusion, but not for the current Liberal government. The Liberal government remains bent on steamrolling this bill through Parliament and right across every paycheque, every Canadian worker, and the bottom line of every Canadian employer. Canadians are not comfortable with the proposals in this bill. Seventy per cent of employed Canadians oppose a CPP expansion if it means a wage freeze. This begs the question of whether wage freezes could result from this tax hike. According to the Canadian Federation of Independent Business, “Two thirds of small firms say they will have to freeze or cut salaries and over a third say they will have to reduce hours or jobs in their business in response to a CPP/QPP hike”. Also, according to the CFIB, a full 70% of small-business owners disagree with the notion that the proposed CPP increase is modest and would have a limited impact on their businesses. The CFIB also found that 90% of small business owners think it is important to have public consultations before any deal is finalized.

The C.D. Howe Institute has also issued a report showing that the Liberals' CPP proposal would not benefit low-income workers. Low-income workers would see their premiums go up, but the net increase in their retirement benefits would remain low. This is because higher CPP payments would be offset by clawbacks in GIS benefits.

Surveys have shown that over one-third of employed Canadians say that the proposed tax increases are unaffordable. Canadians know that the proposed Liberal hike would hurt them. Moreover, over 80% of Canadians want the government to further consult before making its decision, according to another public survey.

Canadians deserve to be trusted. They deserve the freedom to make their own choices on where and how they will save their hard-earned money for their retirement. Canadians also deserve to be heard on this matter. The current Liberal government seems motivated to launch consultations on everything under their paper sun. Why not consult Canadians on this tax hike?

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Mr. Speaker, it is a pleasure to rise today to share my enthusiasm for Bill C-26 and the updates being proposed for the Canada pension plan. The ability to have a safe and secure retirement is something that is incredibly important not just to Canadians broadly but to the folks in my riding of Pitt Meadows—Maple Ridge and to me. They are rightly concerned about what retirement will look like for the young people in our communities. This is an issue I hear about from constituents, and there is a wide Canadian consensus that this is a very real issue for millions of Canadians. By taking action now, we are securing a future Canadians can count on.

When the CPP was introduced in 1965 by then Prime Minister Pearson, it took both courage and fortitude to introduce a program that had a long-term, not just a short-term, vision for this nation and its workers. Millions of Canadians today benefit from the Liberal government's bold action at that time. Today we are witnessing the same courage and commitment to the long-term economic prosperity of Canadians by the Minister of Finance, the Prime Minister, and all those in this House who are thinking about Canadians not three or four years from now but in 50 years. I know that the generations to come will look upon this Parliament for its strength and willingness to do the right thing.

Families and workers across this nation have had an overwhelming desire to look to the federal government for national leadership on this issue. For far too long, this leadership has been lacking, and I am proud to stand in this chamber and be part of a government that is listening and responding, not just to the short-term needs of Canadians but for the long-term success of our nation.

Canadians today are working harder than ever to keep up with the financial demands of today's economy and to save for the future. The enhancements to the CPP are part of a comprehensive and multi-dimensional approach our government is taking to invest in Canadians today and for the future. The improvements to the CPP in Bill C-26 will be an investment economically. Perhaps more importantly, when it comes time for Canadians to retire, they can do so with dignity.

I have heard a lot over the last few days about how 85% of Canadians are supposedly ready for retirement. I do not see that in my community. When I talk to seniors in my community, they are struggling. Even with the CPP, the GIS, and the OAS, they are struggling. It is not enough for them today.

Today we are looking to the future. We are looking to make sure that our youth are in a good position. When I knock on doors and meet people in my riding, it is no secret that hard-working families are worried that they and their children will not have enough money set aside for retirement. I have had countless conversations with a wide variety of constituents, and it is clear that this concern is present across all demographics.

Youth in my community are facing many challenges in ensuring that they are saving enough for retirement. Young people understand the reality they face today and in the future. They know that fewer of them will work in jobs that will guarantee a workplace pension, like perhaps most of their parents had. There are a lot of factors, including a shifting economy, a change in culture, and a boost in entrepreneurial spirit.

The reality is that fewer young Canadians in this era can expect to have a single employer throughout their careers, as many once did decades ago. In addition, fewer employers are providing opportunities to save. Studies have found that in 2011, only 11.1% of the workforce was covered by private workplace pension plans, which is down from 28.6% in 1982. At that time, only a quarter of Canadians who earned between $40,000 and $60,000 contributed to RRSPs.

The CPP was established in 1965. I know that members opposite like to joke about what year it is, but it is 2016, and the labour market simply is not what it once was.

The CPP needs to be enhanced to reflect the realities of today and the anticipated changes of tomorrow. It is the responsible thing to do in response to a big challenge facing Canadians today. The enhancements to the CPP are well thought out and responsible. CPP contributions will increase modestly over seven years, starting in 2019, and when fully implemented will significantly reduce the number of families at risk of not saving enough money for retirement.

In my riding, when I talk to my constituents, I ask if they are saving money. From age 20 to age 50-plus , everyone is struggling to save money. Without the CPP we have today, where would our seniors be? It is a struggle already. The enhancements will boost how much Canadians will get from their CPP by increasing the earning range covered by the plan, resulting in an increase of up to 50% in benefits. As a result, these enhancements will increase the maximum CPP benefit by about 50%. The current maximum benefit is $13,110. In 2016 terms, the enhanced CPP represents an increase of nearly $7,000, to a maximum benefit of nearly $20,000. If we look at the children this is going to affect, are they really going to be able to survive on $13,000? Is that where we want to put our children, struggling at that point? We need to do this today for the future.

Numbers aside, there is a reason there is support on both sides of the House and across the nation for enhancement. All the provinces have agreed to do this. It is because it is what Canadians have been calling for. Canadians know that a secure retirement means secure access to healthy food, an ability to afford adequate housing, and the capacity to travel to see their children and grandchildren if need be.

I would also like to emphasize that as a small-business owner myself, all politics aside, I support the enhancements to the CPP outlined in Bill C-26 because it is the right thing to do. Bill C-26 will ensure the financial security of many employees down the line. It will help those who each and every day put their hard work into the success of my business and all businesses. The enhancements to the CPP are being slowly introduced over seven years to reduce the impact on small business.

This is smart policy-making that has rightfully gained the support of many small-business owners like me. When seniors and middle-class families have money, they can spend that money in the local economy. As a small-business owner, and as a member of Parliament and a member of my community, I do not wish to see any seniors living in poverty and without the dignity they deserve. The much-needed enhancements to the CPP proposed in Bill C-26 are something I can be proud of having voted in favour of and something I know will ensure that millions of Canadians have a retirement they deserve down the line.

I want to conclude by acknowledging the leadership our government has shown in making the tough decisions that will benefit Canadians not only today but for generations to come. I think this demonstrates a sincere willingness to think beyond the next election cycle, something the previous Conservative government put before the best interests of Canadians. The enhancements to the CPP are something Canadians have been demanding for years, something the provinces and territories, organizations, think tanks, and workers' representatives have been advocating for.

The time is upon us. I welcome all members to reflect on what it would be like to work an entire lifetime, a lifetime in which every extra dollar has gone to putting healthy food on our family's table, and to wake up in retirement and have to go back to work to put food into our own mouths.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Mr. Speaker, I am pleased to rise today to talk to Bill C-26. However, I want to take a few moments to talk procedurally about what is going on today.

My friend opposite had some concerns, but let us ensure we look at the facts. Today would have been the sixth day of debate on Bill C-26, a bill that would help Canadians achieve a secure, safe and dignified retirement.

The Conservative Party had requested more time for debate on the bill. Its members could have debated the bill today as scheduled, but instead resorted to procedural tactics to obstruct debate and attempt to shut down the House of Commons and go home.

Disappointingly, it has become abundantly clear that the Conservatives would rather focus on these types of tactics than substantive debate on this important issue. This kind of behaviour is exactly what Canadians rejected when they voted for real change a year ago. As a result, the Conservatives have left us with few options on how to proceed with this bill. We have an obligation to ensure the legislation is sent to committee for further study, and we will do what it takes to ensure that occurs.

Therefore, it is a pleasure to speak to the enhancements to the CPP found in Bill C-26. Today, middle-class Canadians are working harder than ever, but many are worried they will not have enough money for their retirement.

Each year fewer and fewer Canadians have private pension plans to fall back on.

To address this, we made a commitment to Canadians to strengthen the Canada pension plan in order to help them achieve their goal of a strong, secure, and stable retirement. Earlier this year, Canada's finance ministers reached a historic agreement to make meaningful changes to the CPP, an example of federalism at its best. The more than one-quarter of Canadian families nearing retirement, 1.1 million families, who are facing a drop in their standard of living would be able to retire in dignity as a result of this enhancement. The deal would boost how much Canadians would get from their pension, from one-quarter of their earnings now, to fully one-third. To make sure these changes are affordable, we would phase them in slowly over seven years, from 2019 to 2025, so the impact would be small and gradual.

Every Canadian deserves a secure and dignified retirement after a lifetime of hard work. Through these enhancements, we have taken a powerful step to help make that happen.

It is worthwhile to look back at the CPP and its history. The CPP was first established by the Liberal government of Lester B. Pearson in 1965. It was a minority government. At its creation, there were six and a half workers for every retiree. By the 1990s, projections indicated that there would only be two workers per retiree very soon. By 1996, for these demographic reasons, the CPP payouts were higher than the contributions coming in. Obviously, this was not a sustainable model, and change was required. In 1997, the Canadian government acted to address these demographic changes and created the CPP investment board, the CPPIB.

Responsible governments react to the realities and challenges of the day. Earlier this year, agreement was reached between eight provincial governments and the federal government to enhance the Canada pension plan. The result of that agreement is what is before us in Bill C-26.

Changing demographics is not the only factor that necessitated these enhancements, however. The greatest factor is the effective disappearance of company pension plans. There was a time when nearly half of Canadians could look forward to a regular monthly pension for a defined amount fully supported by their employer.

Unfortunately, these defined benefit pension plans are rapidly becoming a thing of the past. According to Statistics Canada, back in 1971 around 48% of people were covered by a defined benefits plan. By 2011, that number had fallen to nearly half that rate.

These enhancements are designed to address the disappearance of corporate pensions. An aging population, coupled with the evaporation of company pensions, makes enhancements vitally important at this time. Quite frankly, Canada and Canada's economy cannot afford to not make these changes. Importantly, these changes would proceed at a gradual, reasonable pace beginning in 2019 and taking seven years to complete. Additionally, tax breaks would help employees absorb these adjusted pension contribution rates.

All Canadians deserve a strong, secure, and stable retirement. I think all members can agree on this. The new measures, importantly, would help young Canadians. Young Canadians today, like all Canadians, hope to retire with dignity, hope to retire with money to live on, and hope to retire in a stable economic environment. It is these young Canadians whom we must not lose sight of when we consider and debate this bill.

This bill would have long-reaching effects into the mid term and long term. It is important, not just from a social perspective—which it certainly is—to make sure Canadians have a dignified, secure, and stable retirement, but it is equally important from an economic standpoint. Canadians are living longer. There is no doubt about this. Canadians are going to live longer in their retirement years. This trend will continue.

To keep Canada's economy sound, viable, and strong, we need people who have money to afford retirement. People with money, of course, buy things. This consumption is what drives economic growth. As our population ages, if there were a corresponding decrease in the amount of income that they had, thereby resulting in a corresponding decrease in the amount of disposable income, our economy would screech to a halt.

We cannot let this happen. Responsible governments ought not to let this happen. We need to ensure that our economy remains viable well into the future. Of course the CPP has a well-managed, professionally run investment board. Any payouts have to be met with contributions. This is a reasonable amount of contribution that will result in payouts to Canadians.

The CPP will be around for generations to come. If we do not act now, that reality will deteriorate. People will be living on less and less money as they retire. We need to increase the retirement income of Canadians to make sure they have a secure retirement, to make sure they can pay their bills, but also to make sure they can enjoy the retirement they have earned after a lifetime of hard work, after a lifetime of contributing to the great Canadian economy, after a lifetime of raising children, working hard, perhaps putting their kids through school or paying for trade skills training, and after a lifetime of growing our great country.

We look at the CPP and we think of retired people, of course, but I want us to take a step back and also think of the young people this would definitely help well into their future, maybe some of us in this very chamber, maybe our children. We need to make sure Canada and Canadians will be able to retire in dignity, not only today, not only tomorrow, but well into the future.

I can think of no better way to make sure that happens than through these enhancements found in Bill C-26. I urge all my colleagues, for those social reasons and for the economic reasons, to support these changes to the CPP.

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

Mr. Speaker, I can tell my colleague from Mégantic—L'Érable that for 10 years, the middle class felt forgotten by the Government of Canada, and that this change will ensure that people will no longer be forgotten, that the government will help them and it will plan for the future.

I have a question specifically for the hon. member for Mégantic—L'Érable. If he is so concerned that his colleagues will not have the chance to speak to Bill C-26, then why is he speaking to it for the second time? He already spoke to it on October 21. Why is he speaking for the second time if he is concerned that the others will not have the opportunity to speak?

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

Eight motions, Mr. Speaker.

I have begun to speak in English. Soon everyone will hear me more and more in English, but not now. I will continue in French, because my speech is in French.

On October 27, 2011, the member for Winnipeg North said:

In recognition of the importance and respect of the chamber, in which we all want to represent our constituents, by not allowing ample opportunity for members of the opposition, even government backbenchers, to provide comment on bills is not a healthy environment. The government House leader has the responsibility to work with and negotiate with House leaders. Time allocation should only be brought in when the government has failed to negotiate with opposition House leaders.

Has the government House leader given up negotiating in good faith with House leaders to the degree to which the government now feels obligated to bring in time allocation as a standard procedure nowadays in the House?

Is this what it means to do things differently? The members opposite were the ones tearing their hair out to oppose time allocation motions. They kept telling Canadians that they were going to do things differently.

By moving yet another time allocation motion to pass its legislative agenda, this government is showing its incompetence. It is also showing a genuine lack of respect for parliamentary procedure and, ultimately, a lack of respect for Canadians.

The government is still trying to prevent members from participating in the proceedings of the House of Commons and representing their constituents. Once again, I refer to the comments made by the member for Winnipeg North on June 3, 2015. I have the right to do so because the government was elected under false pretenses. It claimed to want to do things differently.

However, at the rate the government is going, Canadians will soon realize that it will have moved more time allocation motions than the previous government. The Liberal Party has been in power for less than a year, the session is not yet over, and it has already used time allocation eight times, even though only about fifteen bills have been passed. About half the bills introduced have been subject to time allocation. That is unbelievable.

Let us return to the Canada pension plan. The first time I spoke about it, I said that the government had misled Canadians during the last election campaign. After Bill C-26 was introduced, I had the chance to speak to people in my riding. I asked them what they thought it meant when a campaign platform stated that the Canada pension plan would be enhanced and they would have more money in their pockets. They told me that they expected to have more money soon, in six months, a year or two years. They understand that things do not happen as quickly as we would like in Parliament. However, it is going to take 40 years.

People over 75 will reap the benefit of these measures in 40 years. Let us do some simple math: 75 + 40. Forty equals 4 x 10. Thus, 75 + 10 = 85; 85 + 10 = 95; 95 + 10 = 105; 105 + 10 = 115. People in my riding who are 75 years old today will be 115 years old when the plan enhancements take effect. However, SMEs will have to start paying higher contributions soon as a result of the Canada pension plan enhancement. That will hurt businesses.

Last week, something happened in North America, with our American neighbours, that many of us were not expecting. Something happened—

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

Mr. Speaker, when I was the mayor of Thetford Mines, there was a tactic I often used at board meetings. A little “shh” is very effective, particularly when it comes from a member and not the Speaker. People seem to pay more attention.

I am pleased to have my colleague's attention as I speak to Bill C-26. I planned to speak about it, but this morning the government moved a time allocation motion regarding this bill. This means that many of my colleagues will not have the opportunity to speak to this bill, which, as the Minister of Finance said himself, is very important for Canadians.

At the beginning of question period, I was surprised to hear the Minister of Finance answer a question from my colleague from Louis-Saint-Laurent and say the following about the official opposition:

We were “the party that is playing games with the Canada pension plan”.

I think the government is the one playing games with Bill C-26 right now. The government is the one playing games with Canadians with Bill C-26.

During the election campaign, I remember a number of Liberal candidates who were running and knocking on doors, telling people in their riding that they wanted constituents to know that their party was going to improve the Canada pension plan. When seniors are told that the Canada pension plan is going to be improved, they do not expect that it will take 40 years for that to happen. However, that is precisely what is going to happen with Bill C-26.

I think Bill C-26 misleads Canadians. Again, this government's strategy is to keep making commitments and then expecting others to be forced to follow through on them later. The CPP commitments will not be met for 40 years, and investments in infrastructure will be made in 10 years. There is nothing on the books for the next three years.

Passing a bill that will not kick in for another 40 years is so pressing that a time allocation motion was moved today. My question is about an issue that I have raised over and over again: time allocation. This practice illustrates the government's contempt for the democratic process.

The words I am about to say are not my own. They were spoken by the member for Winnipeg North on April 30, 2015, when he was talking about time allocation motions:

Why does the government House leader feel that the only way [to] get legislation through the House of Commons is through time allocation? By doing that, they are really saying that they do not have the ability to negotiate in good faith with opposition parties, which is not healthy for democracy inside the House.

The government claims to be open and transparent and got itself elected on a promise to do things differently. However, with bills like Bill C-26 for seniors, we find ourselves in the eighth time allocation scenario in less than a year. We have been here for less than a year, and there have already been eight time allocation motions.