Finance Committee on Feb. 28th, 2012

[The Chair, Conservative, James Rajotte]

I call to order this 44th meeting of the Standing Committee on Finance. Pursuant to the order of reference of Wednesday, February 1, 2012, the committee is continuing its study of Bill C-25, an act relating to pooled registered pension plans and making related amendments to other acts.

We have with us here today six organizations: the Canadian Association of Retired Persons; the Canadian Bankers Association; the Canadian Bar Association; the Canadian Federation of Independent Business; the Canadian Medical Association; and the Regroupement des jeunes chambres de commerce du Québec.

You have five minutes to make your presentation.

Ms. Eng, we'll begin with your presentation, for five minutes, please.

[Susan Eng, Vice-President, Advocacy, Canadian Association of Retired Persons]

Thank you very much.

CARP is a national, non-partisan organization with more than 300,000 members and 50 chapters across the country. We advocate for policy and legislative changes that will improve the quality of life for all Canadians as we age, and retirement security is the issue that brings us here today.

The core goal of any country's pension system is to provide an adequate system that is available to the full breadth of the population, sufficient to prevent poverty in old age, affordable to employers and employees, and robust enough to withstand major shocks, including economic, demographic, and political volatility. Recent events demonstrate that Canada's retirement system is not meeting that goal, in part because of inadequate pension coverage.

The question is whether the pooled registered pension plan envisioned by Bill C-25 fulfills the goal of a robust system.

It is not universal, but is optional. It's at the employer's option.

It's not necessarily low-cost. We have already heard the Minister of State for finance indicating that they may not set fees according to section 26 of the act.

It is a strictly defined contribution plan, which is little different from a group RRSP and not as attractive in some cases, since this plan is going to be locked in. And it is not as portable as it could be, given the challenges of the bureaucratic changes.

So it is respectfully submitted that material improvements are necessary, including proceeding with the promised enhancement of the CPP in order to ensure that the vast majority of Canadians can actually have access to an affordable and reliable pension savings vehicle to save for their own retirement.

To speak specifically first on the issue of universality, the PRPPs are dependent on the voluntary choice of employers to enrol their employees, and once enrolled the employees have an option to opt out. If they are not enrolling in RRSPs now, then what are the improved incentives going to be that will have employees choose to remain within PRPPs? Certainly deductible contributions are welcome, but mandatory employer contributions would be even more welcome. Even the existing DC plans require a 1% payroll contribution by the employer in order to be registered.

We would suggest that some reconsideration be made of the locking-in provision, because at this point, for many people it's a disincentive. It is important to allow some flexibility to employees, because they are now, according to the scheme of the act, not able to change their own administrator once an employer makes that change.

Auto-enrollment is something we have recommended, because it would improve uptake. But it's only beneficial if the plan itself is providing a predictable and adequate pension; it's not necessarily valuable if it is driven into the arms of a private-sector plan.

The second point that's important is that any new plan should enhance the adequacy of any retirement income, in terms of both sufficiency and predictability. The pooling and professional management envisioned by the PRPPs will of course improve adequacy, but high fees can still erode the earnings, as evidenced by the Australian experience with its superannuation fund. We are concerned with the reported comments that the government will not use section 26 to regulate the fees but will rather let it go to competition among relatively few players.

Finally, defined contribution plans leave the risk with the employees.

We are also a little bit concerned about the governance and fiduciary responsibilities, which at first seem to impose a fiduciary obligation, but we find that as soon as an employee makes a choice, this is going to be relieved.

I want to make a final comment on the CPP enhancement.

I left with the clerk, Mr. Chair, a copy of a chart that I think the members might find useful and, if it's acceptable to you, I'd ask that it be circulated.

The point I want to make about CPP enhancements simply is that it is an opportunity to provide for a mandatory contributory plan. CARP members were very encouraged in June 2010 when the finance ministers offered both a CPP enhancement and the PRPPs. Now that the CPP enhancement is off the table, that is a concern.

Our point to you simply is that even a modest improvement in the CPP—say, a 10% improvement to the benefit—would be a very cost-effective method to improve on people's retirement security. The cost is no more than $45 a month for employer and employee at the maximum levels, and for a low-income person—for whom this matters the most—at, say, a $20,000 income, the cost is an additional $18 a month for employer and employee.

We believe that Bill C-25 is mostly an important first step in addressing the retirement savings gap among Canadians, but we believe more can be done.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

I have your document. It is in English only, and as the chair, I can't distribute documents unless the committee overrules our procedure unanimously. If the committee wants me to do that, I can, but the practice is, of course, to have only documents in both official languages distributed. We will translate it and have it distributed to members for their reference.

[Susan Eng]

That's fine with me. Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll now go to the Canadian Bankers Association, please.

[Marion Wrobel, Vice-President, Policy and Operations, Canadian Bankers Association]

Thank you. Good afternoon.

I would like to thank the committee for this opportunity to provide the banking industry's perspective on pooled registered pension plans. The Canadian Bankers Association represents 53 banks operating in Canada, banks which are well-managed, well-capitalized, and which operate in a competitive market with strong prudential oversight.

A strong and healthy banking system is the cornerstone to a strong economy. It is an essential component in helping small businesses grow and thrive and helping Canadians to buy homes and save for education and retirement. We believe that banks and other financial institutions can also make a significant contribution to closing the gap in pension plan coverage for several million Canadians, and that is what I want to speak to you about today.

It is our view that, designed properly and subject to an appropriate regulatory regime, PRPPs have the capacity to achieve the government's objectives of substantially increasing both the number of Canadians who participate in a pension plan and the number of employers who provide such plans. This will be achieved by making available a low-cost pension savings product that is attractive to employers and employees as well as to self-employed Canadians.

The PRPP offers opportunities and incentives to save while ultimately letting individuals decide how they do so. Canadians, particularly employees of small and medium-sized businesses and self-employed individuals, will have the ability to participate in structured pension plans, meaning that contributions will be locked in for retirement—options that many currently do not have.

For those who tend to avoid making active decisions about their retirement investments, PRPPs will have a default option that combines capital protection and growth. For those who wish to take greater control of their investments, PRPPs offer advice and more sophisticated investment options.

For employers, the PRPP allows SMEs to provide a pension plan to their employees. While many employers recognize that pension plans can be an important part of their total employee compensation package, the options available under the current regime are costly and administratively complex, and they contain some risks that smaller employers are simply not prepared to take. Group RRSPs go partway to addressing these challenges, but PRPPs go one step further. As currently drafted, employers would have a limited set of obligations and responsibilities under the PRPP and thus would bear fewer risks. Those risks and responsibilities would be borne by plan administrators; that is, financial institutions.

Banks are well-placed to deliver a low-cost pension savings vehicle to Canadians. Banks are able to leverage their relationships with more than one million SMEs across the country to provide them with information about PRPPs and how they work. This broad reach ensures that the federal government's target market for PRPPs is developed quickly and cost-effectively. Moreover, the banks can rely on the skills, resources, and experience of their broader financial group to effectively deliver PRPPs.

Let me address four key factors that will be crucial in ensuring the success of the PRPP and the achievement of the government's objectives, particularly the objective of keeping costs low.

First, there will need to be a regulatory regime that does not impose costs in excess of what is needed to provide employee protection appropriate for the nature of this product. This is especially true for the default investment option.

Second, there must be a sufficient number of participants that a minimum efficient scale can be achieved. This requires that the PRPP be appealing to SMEs and individual workers, and that requires that there be few obligations and risks to SME employers.

Third, there must be a high degree of regulatory harmonization across federal and provincial jurisdictions and a simplifying and a streamlining of the supervisory requirements, again with a view to federal and provincial harmonization. The degree of harmonization that appears to have been achieved to date, as outlined in the December 2010 framework, along with more recent efforts, is commendable.

Fourth and finally, to make the PRPP successful, provincial governments need to adopt companion legislation to enable the PRPP to be provided to provincially-regulated businesses. We ask committee members to bring this issue to the attention of their provincial colleagues to ensure that employers and employees in all parts of Canada have access to this savings tool.

I look forward to your questions.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the Canadian Bar Association.

[Mitch Frazer, Chair, National Pensions and Benefits Section, Canadian Bar Association]

Mr. Chair and honourable members, good afternoon.

On behalf of the Canadian Bar Association, I would like to thank you for the invitation to appear before the committee today to discuss our submission on Bill C-25 and to answer any of your questions. We are grateful for your parties' interest in securing the pension promise for all Canadians.

The Canadian Bar Association is a national organization representing more than 37,000 legal experts, including lawyers, law students, notaries and law professors throughout Canada. The primary objectives of the association include improvement of the law and the administration of justice. It is with these objectives in mind that I am speaking to you today.

The CBA submission you have received was prepared by members of the pension and benefits law section. This section consists of lawyers who have specialized knowledge and expertise in pension and benefits. They provide advice to a wide range of stakeholders, including pension administrators, employers, unions, employees and employee groups, and trust and insurance companies, to name a few.

The CBA has encouraged the government to adopt legislation permitting PRPPs in Canada as one means of improving the retirement savings system by providing an accessible, straightforward, and administratively low-cost retirement option for Canadians. We provided advice and recommendations to the government on the framework for PRPPs and on related tax issues as Bill C-25 was being developed.

The CBA was pleased with the government's introduction of legislation to allow PRPPs, which should fill a gap in the retirement savings system, particularly for the self-employed and for employees of small to medium-sized businesses that do not currently participate in registered pension plans. However, based on our expertise and knowledge of pension law, we have four general concerns about the bill's proposed framework.

First, PRPPs, as contemplated by the bill, do not appear to be a traditional pension plan, such as a defined benefit plan. Rather, they appear to be a new savings plan vehicle, analogous to group RSPs. As such, PRPPs may not, by themselves, provide adequate retirement income.

Second, PRPPs should strive for provincial harmonization to achieve the government's desired effect of offering simple, low-cost plans. Having to accommodate for different provincial treatments increases costs and could prevent eligible administrators from offering a single PRPP across the country.

Third, the bill should specifically allow associations of professionals to act as plan sponsors. We believe that this would help achieve the government's primary goal of achieving expanded pension coverage.

Fourth, the bill requires PRPP administrators to act as trustees, which will give rise to a fiduciary duty on their part. The CBA section questions how that duty will be reconciled with the administrator's ability to offer a commercial service.

Our written submission to the committee also contains a number of technical recommendations that we believe would help clarify the interpretation of the bill. While I do not have time to go through all of these recommendations in detail, I'd be pleased to answer any questions during the allotted time.

We at the CBA would be pleased to respond to any follow-up questions at a later date.

On behalf of the CBA, thank you again for the opportunity to appear before the committee.

I would like to thank you for the interest and time you have given me.

We commend all of you for your efforts with respect to this extremely worthwhile initiative.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll hear now from Mr. Kelly, please.

[Daniel Kelly, Senior Vice-President, Legislative Affairs, Canadian Federation of Independent Business]

Thank you very much.

We're pleased to be here on behalf of our 108,000 small and medium-sized business members to support this piece of legislation. We think it's a very important tool, one that will respond well to many of the needs of small and medium-sized firms across Canada.

It is our sector of the economy, the small businesses, that is the primary target for PRPPs in Canada. Quite frankly, the success or failure of this tool depends on how small and medium-sized businesses perceive it and take it up. I should mention that today the CFIB was meeting with different suppliers about offering this to our 108,000 members across Canada as an option for our members, who have currently very few retirement savings options for themselves and their employees.

Just as a reminder, there are 2.3 million businesses in Canada. Half of those are self-employed; they're businesses of one. Some 98% of the businesses in Canada have fewer than 50 employees. It is this target that this tool is designed for, and we hope it will meet their needs. In any discussions of pensions, one of the things we've flagged over the last number of weeks is to ensure that the gap between public-sector and private-sector retirement savings options is equalized.

It's something that is of great concern to small and medium-sized firms right now, with unfunded liabilities in the billions. We note that the self-employed retire on average at 66, whereas those in the public sector retire on average at 60. Private-sector workers fall somewhere in between.

Why do small firms not offer pensions now? Why do Canadians struggle today to use the retirement savings options now on the market? The biggest issue is affordability. They struggle to find the dough to put into these retirement savings tools that exist today. The PRPP, on the surface, is not necessarily going to change that. It is how small businesses react to this and some of the measures you're putting in place that will make or break this tool.

Some 80% of our members—small businesses—offer nothing. They offer their employees no retirement savings options. They have no company retirement savings plan for themselves. This is the biggest hurdle for the PRPP or for any other retirement savings option that exists today. It is this group that we most need to focus on. It is only at about 50 or more employees that the majority of firms offer some form of retirement savings plan for their employees.

Why is this the case? The number one reason is that they find it too expensive. They don't have the money to put into retirement savings plans. That is true, whether it is a PRPP or a CPP increase. That is the biggest struggle we have: small businesses are not sitting on basements full of cash that they're just too cheap to unlock. This is the issue we need to address.

The other important reason is that some of the tools are complicated for small business owners, and the administrative costs are significant. How do small businesses save on their own? One, they use the value of their own business; the $750,000 capital-gains exemption is very important to them. We note, with interest, that back in the 2008 election the government committed to increase that and index it to inflation. This has not happened.

We also need to look at RRSPs. That is a tool that many small business owners use. Our members are opposed to a CPP premium increase; we view that as an employee deferring income for a business owner. That's just a payroll tax hike. We think it would lead to a potential loss of 1.2 million person-years of employment.

In summary, we think that the PRPPs are an important measure for allowing small business to access proper pensions. We think that the regulations are very important, particularly for many firms that have a lot of part-time workers and have difficulties with turnover.

I'd be happy to answer any questions.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the Canadian Medical Association.

[Dr. Jeffrey Turnbull, Past-President, Canadian Medical Association]

Thank you.

Mr. Chair, honourable members, thank you for the opportunity to appear before this committee.

The Canadian Medical Association represents 76,000 physicians from across the country. Over the past 30 years, we have been very proactive in the area of pensions, and have engaged in a wide range of public consultations. In fact, the CMA was advocating for retirement savings plans even before the creation of the RRSPs in the 1950s.

Like the Canadian population at large, physicians represent an aging demographic; 38% of Canada's physicians are 55 years or older, for whom retirement is an important consideration. In addition, the vast majority of CMA members are self-employed physicians, and as such do not participate in workplace registered pension plans. Physicians, therefore, rely heavily on registered retirement savings plans relative to their retirement savings vehicles.

Our research shows that our membership favours plans that would enable the self-employed to participate in pension plans like the PRPPs. Further, physicians employ an estimated 155,000 Canadians, meaning that in fact they operate small businesses. Their employees would also be eligible for and benefit from the PRPP process.

CMA members believe that PRPPs will begin to address the imbalance between retirement savings opportunities for self-employed Canadians and those with workplace pensions. We are, however, concerned about the proposed structure and limitation of the PRPPs in three particular areas, which I'll bring to your attention, if you'll allow me.

To achieve adequate income replacement in retirement, CMA believes that Canadians should be encouraged to save more for their retirement through tax-deferred vehicles. The current percentage of dollar limits on contributions for vehicles such as the PRPPs and the RRSPs are well below the limits in the United States and the United Kingdom. Maximum dollar limits were essentially frozen 25 years ago, and despite a modest increase in 2004, these limits are easily attainable, and could now be easily improved or increased.

CMA therefore encourages this committee to consider amending Bill C-25 to increase the retirement savings capacity for self-employed individuals by raising the combined limit of the RRSPs and the PRPPs.

As for defined benefit and targeted benefit pension plans, the summary report on retirement income adequacy research highlighted that defined benefit pension funds and annuities enable investors to share longevity risks as well as pool risky investments to diversify risk. By pooling risk, defined benefit and targeted benefit pension plans provide more secure saving vehicles than defined contribution plans. The PRPP proposal should thus not be limited to defined contribution pension plans but also include targeted benefit and defined benefit plans. That should be considered and encouraged.

The CMA also believes that the sponsors of PRPPs should not be limited to financial institutions. Large, well-governed professional associations that represent a particular membership should be able to sponsor PRPPs for their own members, including self-employed members. The CMA recommends that clauses 14 to 26 of Bill C-25 be amended to clarify the type of organizations that can qualify for PRPP sponsorship.

As Canadians age, concerns about long-term care are also on the increase. The CMA encourages the government to consider options for pre-funding long-term care, including private insurance and tax-deferred, or tax-prepaid, savings approaches.

In closing, while the CMA supports the proposed PRPP framework in principle, we strongly ask you to consider our recommendations, as in our view they would improve the proposed legislation before us today by ensuring that PRPPs provide value to all self-employed Canadians, including physicians.

We appreciate this committee's work in seeking retirement solutions for all Canadians. We believe that together we can find innovative ways to provide hard-working Canadians with income security and dignity after retirement.

Thank you very much for listening.

[The Chair, Conservative, James Rajotte]

Thank you very much, Dr. Turnbull.

Mr. Dubreuil, you have five minutes.

[Guillaum Dubreuil, Vice-President, Public Affairs, Regroupement des jeunes chambres de commerce du Québec]

Thank you very much.

We would like to thank you for inviting the Regroupement des jeunes chambres de commerce du Québec to appear. Our organization is dedicated to defending and promoting the social and economic interests of our membership, our membership being the young members of Quebec's business community. The RJCCQ is a complete network of entrepreneurs, small business owners and professionals which has been representing and defending its members for over 20 years now. Our membership comprises more than 7,500 individuals found in approximately 30 young chambers of commerce and professional organizations. We have noted that our members are currently facing a problem that we are trying to deal with and we believe that this pension plan may go a long way to solving this issue.

We recently surveyed our members with Question Retraite, one of our partners. The problem is as follows: more than half of our members surveyed were under the impression that they were going to have to work beyond the age of 65. They did not feel that they would be in any position to retire at age 65. Of course, we encourage members who so choose to work as long as they wish, as long as they desire to do so. Of course, when people like their jobs, we encourage them to continue, there is no doubt about that. However, we do not believe that our generation should have to shoulder the cost of the demographic changes facing Canada. Consequently, we believe that it is important to provide this new generation of workers with significant tools so that they can prepare for their retirement properly. We therefore believe that the plan proposed here is a very attractive option.

The second trend noted in the survey was that most of our members—more than 50%—had no confidence in the savings plan provided by their employer. If given the choice, the majority would prefer to have a salary hike and be able to generate their income and savings themselves instead of relying on their employer, considering the situations that we have witnessed over the past few years. Once again, the plan outlined in Bill C-25 does address some of these concerns. We would encourage you to go ahead with this measure.

Finally, a large proportion of our members are in small businesses. We also believe that this measure could encourage their growth. The reason is a very simple one; we believe that by providing such pension plans—despite the fact that certain employees had less confidence in such plans—small businesses will be able to be as competitive as their larger counterparts, in terms of the employment conditions that they are able to provide. In so doing, small businesses will be better able to retain their skilled employees rather than losing them to larger companies. When combined with measures such as our proposed entrepreneurship access regime, we believe that this will help stabilize the growth of small businesses and promote entrepreneurship which, obviously, will be beneficial for the entire Canadian economy.

The only recommendation that we would make now is that you not force employers to contribute to such a plan, particularly small businesses, as this would cancel out the economic stability and flexibility. We obviously believe that most of our members and small businesses who can will in fact contribute to such a plan, but forcing them to do so would certainly pose a problem.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We will begin members' questions with Mr. Marston.

I will just indicate to our witnesses that in members' time, they have about five minutes each. It is a very short time, so I would ask for your answers to be very brief. If any of you want to comment on a question posed to someone else, please indicate that to me. I will do my best to get you on, but it is up to the members in terms of what direction they want to go in.

Mr. Marston, go ahead, please.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you, Mr. Chair.

Ms. Eng and gentlemen, thank you for the work you have put into this. It was very evident, listening to your presentations, that you looked very closely at this.

Mr. Turnbull in particular, on your reference to defined contribution as opposed to defined benefit, there is a major crisis developing in our country where defined benefit is being offloaded into defined contribution, and at the end of the day the workers are losing.

Two weeks ago Minister Menzies was before us and he talked about the PRPPs and what he thought the value of them was. I would suggest we shouldn't be confused. This is a savings scheme. This is not really a pension plan, as we are used to hearing.

Mr. Wrobel, if you had a contribution of $161 a year and you were making $40,000 a year, that would end up giving you a total input of about $6,500 over a period of 40 years, and that proposal for the Canada Pension Plan would end up giving a person $900 a month. Where in the world could we get an investment like that where we could put it to the advantage of those 12 million Canadians who have nothing now?

[Marion Wrobel]

When we look at an expansion of the Canada Pension Plan, it is important to remember that about 15 years ago the federal government and the provincial governments went through a significant study of the plan to make it sustainable, and in the process they raised premiums quite substantially.

We have a system now that we believe is sustainable going forward for a number of years, and we want to make sure that any potential changes in the future do not threaten that sustainability. As we look at where there are gaps in the retirement savings system, we see it not so much in pillar one and pillar two, but it is really in pillar three, in the private sector sphere, where a number of employees don't have access to employer-sponsored plans. We see the PRPP as a means by which smaller employers can offer these plans to their employees, and to be something that employees would find very attractive.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

I agree with you in the sense that we understand that the business community as a whole is viewing it this way, but we've had the situation with the Australian superfund where in effect they did a review at the ten-year mark, and because of the administration piece it never even kept up with the cost of living. So we were concerned about that. The similarities between this plan and that one were really problematic for us.

When we looked at some of the reasons for the Canada Pension Plan, several presentations talked about risk in the Canada Pension Plan. As far as our view is concerned, the risk isn't there, as it would be in this particular plan, where you're going up and down with the market. We're troubled with that.

Again, we are talking probably about two different groups of people. There is the small-business group and there are a lot of workers on the other side of this equation who have nothing at all, so finding a way to utilize the Canada Pension Plan—Ms. Eng, you may like to comment on this—to enhance it is critical at this point.

[The Chair, Conservative, James Rajotte]

Ms. Eng.

[Susan Eng]

I would like to comment on that.

When we make our recommendations we are including both those people who are in the low income brackets as well as those in the middle and higher income brackets. While we are sympathetic to the idea that we should just increase the RRSP room, in fact higher-income people are using their limits quite well, but the general population has left almost 95% of their room on the table.

The only way the average worker is going to actually contribute is if it's a mandatory situation. People, we know now, are not taking the steps to look after their own retirement. With the acknowledgement now that we have a bit of a savings gap, maybe more people will take up this option, this one among many, but at the present time they are not. The question is whether or not this scheme, as presented, will make any difference in terms of that savings environment.

We would suggest that it would not make much of a difference, especially not for the lower-income people. For many of those people, in addition to having to set aside in a mandatory fashion, they need to see the employer contribution. That often levers the contributions of other employees. It is human nature.

[The Chair, Conservative, James Rajotte]

We'll come back to you, Mr. Marston. Thank you.

We'll go to Ms. McLeod, please.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Mr. Chair.

First of all, I just wanted to quickly come back to something. Mr. Dubreuil, I understand Quebec is fairly keen on moving forward. They're going to actually have some of the legislation ready to go. You had one recommendation. Could you clarify it? I thought we had already accommodated within this legislation what your concern was. Could you clarify for me again what that final recommendation was, and what your concern was?

[Guillaum Dubreuil]

I'm sorry, actually, yes, that recommendation has been addressed compared to prior versions of the bill, and in this case our recommendation is to keep on that same path and to maintain that. It was just an important point that we wanted to have stand out. Our basic point was to make sure that employers are not forced to contribute to a PRPP.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

My next question or comment would be for perhaps Ms. Eng and Mr. Kelly, because I think we have a bit of a difference of opinion.

First of all, it's of course very important to recognize that all of the provinces had consensus on PRPPs. We don't have consensus, of course, in terms of moving forward with CPP options. It doesn't mean that it's not going to happen down the road. To some degree, I think this legislation is focused on PRPPs and not the other options, but I did want to acknowledge the letter to the finance minister that CARP did, where you did propose an increase in the CPP, and your letter had calculations to expand the CPP by 10%. It would raise the contribution rates from 4.95% to 6.05%, etc.

CFIB's response was that for every 1% increase in CPP premiums beyond the 9.9% rate, it would cost 220,000 person-years of employment, and wages would go down roughly 2.5% in the long term. CARP is saying it's not going to be a job killer, but CFIB is very concerned.

I'd like to give you both a chance to maybe have some quick statements. We have to listen to the business community, who have really been struggling in the last few years in terms of moving forward. Whenever there's a marginal increase in EI premiums, we certainly hear about it in terms of the negative impacts.

I guess I'll open it up at this point for conversation.

[The Chair, Conservative, James Rajotte]

Who would like to go first?

We have Ms. Eng and then Mr. Kelly.