Bill C-27 (Historical)

An Act to amend the Pension Benefits Standards Act, 1985

This enactment amends the Pension Benefits Standards Act, 1985 to provide a framework for the establishment, administration and supervision of target benefit plans. It also amends the Act to permit pension plan administrators to purchase immediate or deferred life annuities for former members or survivors so as to satisfy an obligation to provide pension benefits if the obligation arises from a defined benefit provision.

Opposition Motion—Commitments Regarding Electoral Reform

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, for the benefit of those who may be listening at home, I will remind the House that the motion we are debating today states:

That, in the opinion of the House, the government misled Canadians on its platform and Throne Speech commitment “that 2015 will be the last federal election conducted under the first-past-the-post voting system”, and that the House call on the government to apologize to Canadians for breaking its promise.

It is a simple motion in response to a simple act. The Liberals announced last Wednesday that they simply would not be following through on their commitment. It was a clear commitment and it clearly demands an apology to the House and Canadians.

I rose in the House last spring on an optimistic note. The Liberals made that commitment in the election campaign, repeated it in the throne speech, and then proceeded to drag their heels in getting the process started. Incidentally, they later argued that they did not have enough time to change the voting system, but they burned up six months sitting around to come up with the lame idea of having an ordinary committee study the issue. How it takes six months to come up with the idea of establishing a regular committee with a government majority, I do not know. Neither did Canadians nor the media, and that is why it was panned broadly.

Last spring, I was pleased to rise when the government saw fit to act on a good idea, which was the NDP idea to have an all-party committee where the government would not have a majority. It seemed that maybe this was a step forward, that maybe the government after all was serious about following through on that election and throne speech commitment. That was an optimistic time, but since then, a lot has happened. It seemed at times that we were moving in the right direction and then there were setbacks.

For instance, last October, it felt like a setback when, all of a sudden, the Prime Minister, who had said many times in the House that 2015 would be the last election under first past the post, said in an interview, “Under Mr. Harper, there were so many people who were unhappy with the government and his approach that people said, ‘We need electoral reform in order to stop having governments we don’t like’.”

Essentially, he was saying that if it works for him, it must be working for Canadians, and when it works for people he does not like, then there is a problem. That felt like a setback. That felt like the Prime Minister was moving away from his commitment.

Later, on December 2, hope sprang again, because the Prime Minister stated, “I make promises because I believe in them. I’ve heard loudly and clearly that Canadians want a better system of governance, a better system of choosing our governments, and I’m working very hard so that 2015 is indeed the last election under first past the post.”

The Liberals have since said that there was no consensus. That sounds to me like the Prime Minister was saying there was a consensus that we need to make a change. When there is that kind of consensus for a change which, granted, is not the same as consensus on a solution, what people expect from their government is leadership to put forward a proposal that might actually move us forward. We are still waiting on the proposal. They have announced they are not keeping the promise and we never even heard what the proposal would be.

It surely was not for lack of consultation, because members on all sides of the House went into their own constituencies and talked to their constituents. The committee travelled across the country and talked to Canadians and experts. Over 80% of Canadians who spoke to the committee said they wanted a proportional system and over 90% of the experts said that a proportional system was the best for Canada.

Then we heard all sorts of possible solutions, possible voting systems, and possible proposals. The government had but to pick one and put it to Canadians, but before it could be bothered to do that, it said it simply was not going to go ahead with its promise. That is pretty sad, particularly coming from a Prime Minister who, in the last election, said he was the one who was going to ride into the House of Commons on his white horse, clean up the cynicism in Canadian politics, that he would be the one to show Canadians there is a better way, that he would inspire young people to get involved in politics and affirm the value of electing different governments, because different governments could behave differently. Believe me, that is not the only example.

Last Wednesday was the most cut and dried example of the Prime Minister walking away from that message of hope. In a week, well over 90,000 Canadians have signed an online petition calling on the government to keep its promise. That is not 90,000 people in the rinky-dink way that they set up the My Democracy survey, where we do not know if they live in Canada, and do not know if they signed up many times, because the e-petition system, unlike the government's lame survey, actually has integrity.

We know that over 90,000 individual Canadians have signed that e-petition and are calling on the government to keep its promise. Instead, today the Liberals are standing up and shamefully saying that not only are they going ahead with breaking that promise, but they do not even have what it takes to apologize for going ahead with that. Then we are told that it is the government that is going to bring an end to cynicism.

Let us look at the Liberals' excuses for breaking that promise. At the time that they decided to break it last week, the initial answer was that there is not consensus. We certainly heard that from Liberals here today, although I say they cannot have consensus on a proposal they never made, so there is something structurally wrong with that argument. If they had actually proposed something and could not reach a consensus on that, then they might have a case, although we do not even know what the threshold for consensus is. Is it a vote in the House of Commons? Is it a referendum? Is it how many retweets they get when they put it out on Twitter? We do not know. The government has not said.

There is an issue with saying that they do not have consensus when they have not tried, but there is also an issue with a government that says it needs to have consensus, whatever that means. I do not know if that means every Canadian in the country has to agree on one thing before we go ahead with it. The Liberals certainly did not think they needed consensus to break promises, so it is an interesting inversion. If they were to go and talk to most Canadians, they would say that a government can go ahead and implement the election promises that it has a mandate to implement, and if it wants to break those promises, then it should be looking for consensus from Canadians, who could say that something has changed since the election, something has changed since they decided to cast their ballot for the Liberals and so they agree that the government needs to break this promise. Instead the Liberals are going around breaking promises all over the place without consensus, and then saying they need consensus just to keep the promises they made during the election. I cannot be the only one who thinks that is completely backwards.

For instance, when the Liberals said they would not approve new pipelines without a new process and then went ahead and approved at least three pipelines under the old Harper process which they ran against, that to me seems like something they might have sought consensus on. I do not think they would have found it if they had sought consensus on that. But the Liberals do not think they need consensus to break their promises, only to keep them. They did not seek consensus when they launched an attack on defined benefit pensions in this country by tabling Bill C-27, and that was not even an election commitment.

The idea that somehow the Liberals are bound by consensus is ridiculous. If they really felt that they needed consensus from Canadians to move forward with important initiatives, they would do that particularly in the context where they are breaking promises. That was laughable. I do not think anyone in Canada is buying the idea that simply because there was not consensus, when the government never even so much as tried to build it around a particular proposal, somehow that is an excuse for breaking a cut and dried promise.

Then there was the leak to the Huffington Post that maybe this was not about the lack of consensus; maybe this was about the growing threat of the alt-right and this was really about Prime Minister Trudeau standing up against the alt-right and making sure it could not sneak in. But the fact of the matter is, and members have said it before—

Income Tax Act

[Scott Duvall, NDP, Hamilton Mountain, ON]

Mr. Speaker, I want to thank the member for Edmonton West for bringing this private member's bill forward. Many times the member and I do not see eye to eye, but I certainly have a lot of respect for him, and I enjoy listening to him.

It is my pleasure to rise today to speak to the private member's bill, Bill C-301, an act to amend the Income Tax Act and to make a related amendment to another act, which will affect registered retirement income funds, otherwise known as RRIFs.

The NDP is supporting the bill at second reading because we feel it deserves to be sent to committee for further study. The issue of mandatory minimum withdrawal requirements is an important issue for retirees trying to maintain an adequate income in their retirement.

It is our view that a detailed examination of the rules regarding RRIFs is necessary to help ensure that seniors are not outliving their savings. Retirement insecurity is reaching a crisis level in Canada, as many Canadians do not have adequate savings to maintain their lifestyle upon retirement. Any measures that will make it easier for seniors to maintain an adequate income must be looked at.

Much more needs to be done to help our seniors live with the dignity they deserve. The high cost of housing and drugs, the clawback of the GIS, and the indexing of pensions are just a few immediate issues. The government also needs 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.

Of more immediate concern is that the government must immediately fix the flaw in its new plan for enhanced CPP benefits. I am sure that members have heard the discussion about the mistake that the government made in Bill C-26 and how the exclusion of dropout provisions in the bill would have a negative impact on those who take time to raise children, especially women, and on those living with a disability. The government will have its chance next week at the finance ministers meeting to fix its mistake. We will all be watching.

This private member's bill will remove the mandatory minimum withdrawal requirements from registered retirement income funds and will change the retirement income fund definition. Registered retirement income funds, known as RRIFs, can be thought of as an extension of a person's registered retirements savings plan, or RRSP. An RRSP is used to help people save for retirement, while a RRIF is used to withdraw income during retirement. RRIFs are similar to RRSPs in several respects. Each allows for tax-deferred growth, offers several investment options, and is government regulated.

A major difference between an RRSP and a RRIF is that with an RRSP, a person can make annual contributions as long as they have earned income and have contribution room available. Withdrawals are optional and will be taxed. With a RRIF, contributions are not allowed, and a person must make minimum minimum mandatory withdrawals each year. RRIF rules and withdrawal rates were introduced in 1978, and then increased in 1992.

In 2015, the Conservative finance minister lowered the mandatory registered retirement income fund withdrawal amount to 5.27% from the previous 7.38%. Also, previous to 2007, the age limit for converting an RRSP was 69. The 2007 budget changed the age to 71, in order to strengthen incentives for older Canadians to work and save. When RRIF rules came into effect, lifespans and time spent in retirement were much shorter than they are today. RRIF holders now face the considerable likelihood of running out of money in late stages of retirement.

The NDP has long been in support of lowering these rates. In 2015, the NDP pension critic John Rafferty introduced Motion No. 595. It read:

That, in the opinion of the House, the government should review the Registered Retirement Income Fund mandatory minimum withdrawal thresholds and amend them to ensure they do not unduly force seniors to exhaust their savings too quickly.

The problem with the RRIF withdrawal schedule is that people are living longer, and if the schedule is followed then it is very likely that an account holder will run out of savings by age 92. At that point, the person who had saved diligently throughout their life will see their quality of life decline at a delicate time, through no fault of their own.

There are also concerns that RRIF rules can cause clawbacks on people's benefits from OAS and/or GIS. We know that people are living longer, and this fact will have an impact on seniors and on their ability to have enough money to see them through their retirement. In this context, it is interesting to look at some facts about today's seniors.

The probability today of a 71-year-old female reaching age 94 has almost doubled compared to 1992, from 13% to 24%. The probability of a 71-year-old male reaching that age has more than tripled, from 4% to 14%. There are 265,000 Canadians who are 90-plus years of age today. With the baby boom generation reaching these ages, the number of people living beyond 90 is expected to rise dramatically. By 2021, there are projected to be 355,000 Canadians aged 90-plus, including 80,000 people over the age of 95.

Most Canadians do not have alternatives to private savings for retirements besides CPP, OAS, and GIS. When RRIF rules were first put into place in the 1970s, Canadian households saved about 15% of income. By 2011, the household savings rate plummeted by a factor of five, to just above 3% of income. Canadians between the ages of 65 and 69 today hold only an average of $40,000 in RRSPs, which is a very modest amount. In 2011, workers aged 55 years and over accounted for 18% of total employment, compared to 15% in the 2006 census. This was the result of an aging baby boomer generation and increased participation of older workers in the labour force. Mandatory minimum RRIF withdrawals are becoming irrelevant as women and men are living at least twice as long, and staying in the labour force longer.

As I said earlier, the NDP intends to support this bill at second reading, as we feel it should be sent to a committee where the issues of RRIF withdrawal and income security for seniors can be properly studied. I am disappointed to hear that our Liberal colleagues will not be supporting the bill and are not in favour of this issue getting further study. However, then again, maybe I should not be surprised. The Liberals have made some progress on the issue of retirement insecurity with their modest increases in the GIS and their modest increases in benefits in the enhanced CPP proposal. That being said, the government has also launched a tax on some Canadian pensioners. Its failure to include dropout provisions in the enhanced CPP is certainly an attack on women and those living with disabilities.

We also have Bill C-27, which is clearly an attack on every worker and retiree who has invested in a defined benefit pension plan. It is a policy on which the former Conservative government did consultations and eventually decided not to move forward with it. Now it looks like the Liberal government is going to finish the work that the Conservatives started. The current government's plans are inconsistent and confusing. The strategy for dealing with the retirement income crisis is uneven, inadequate, and at the end of the day will be ineffective. Canadian seniors will be hurt as a result.

I urge all members to support this bill, so we can refer it to a committee where we can study how to better help Canadian seniors live with the security and dignity they deserve.

Pension Benefits Standards Act, 1985

[Bill Morneau, Liberal, Minister of Finance]

moved for leave to introduce Bill C-27, An Act to amend the Pension Benefits Standards Act, 1985.

(Motions deemed adopted, bill read the first time and printed)