Mr. Chair, further on PRPPs, there's been extensive work done by Canadian think tanks. The C.D. Howe Institute produced one of the most substantive reports in this area. Again, the conclusion of the C.D. Howe Institute report is that while the PRPPs may improve pension coverage, it will continue to leave a significant gap in the options available to and likely to be capitalized on by Canadians. Further, Mr. Chair, and I'll quote directly from the report:
When the federal government first announced the basic PRPP framework in 2010, it indicated that it would develop tax rules to put PRPPs “within the basic system of rules and limits” for Registered Retirement Savings Plans (RRSPs) and pension plans.
Proposed tax rules for PRPPs were released, as you know, Mr. Chair, on December 14, 2011. The main elements of those were that PRPP contributions will be limited to an individual's available RRSP contribution room. I want to touch on that for a moment.
The reality is that most Canadians, the overwhelming majority of Canadians, are not even coming close to maxing out their RRSP contributions. In fact, most Canadians will not be able to max out their PRPP contributions.
You can say that this is a reflection that maybe a mandatory option forcing Canadians to put away more would be helpful, but again the challenge to that is that you'd actually be increasing payroll deductions at a time when there's quite stubbornly high unemployment, particularly in non-resource-rich provinces. As well, you'd be cutting the take-home pay of Canadians at a time when personal debt is extremely high, in some cases because Canadians are trying to replace full-time work with part-time jobs. It is a real challenge. While I posit that in the long run moving towards more mandatory approaches may be the best approach, in the short run, I understand the government's rationale in putting something forward.
The challenge we have to consider is that these changes can disproportionately benefit those who have an opportunity to save. In this place we should always consider the progressivity of our measures.
We've heard from Governor Carney and we've heard from Dean Roger Martin of the school of business—I was going to say Dean Martin, but Conservatives may think I was thinking of the guy who used to sing in the Rat Pack or something. Roger Martin, Governor Carney, the Conference Board of Canada and others have indicated the growing issue of income inequality in Canada. We have to be careful in this place that we consider unintended consequences that may actually contribute to income inequality.
If, in fact, the measures we are offering to Canadians—even with our hearts in the right place of helping Canadians have better options for saving for retirement—are designed in such a way that they only advantage those with the means to pay into them, it could actually contribute to a growing income inequality. Governor Carney spoke to the journalists in Nova Scotia this summer and said that those who say income inequality is not an issue are wrong, but those who want to create a sense of class warfare around it are wrong, too, in that we should be focusing on equality of opportunity.
The reality is that the opportunity to contribute to plans like PRPPs and RRSPs belongs to a very small number of Canadians who actually have the means to do it. I posit that, Mr. Chair, because I think that all of us in this committee, regardless of party affiliation, want to help all Canadians achieve retirement incomes that are sustainable and can provide a decent retirement income for themselves and for their families, particularly with the demographic shift that is upon us, which will only become more pronounced in the future.
I think it's important that members consider that as we're considering this measure.