Mr. Chair, this brings us back to the issue of pooled registered pension plans. The Liberal Party has voted for and supports the government's decision to introduce pooled registered pension plans, but we agree with the C.D. Howe Institute and others who have told us that in fact the pooled registered pension plans will be a small step forward but not a significant step forward in terms of retirement security for the broadest number of Canadians.
One of the challenges we have with PRPPs or RRSPs is the reality that not enough Canadians are able to actually contribute to or maximize their contribution to them. The people who are able to maximize an RRSP contribution could potentially maximize a pooled registered pension plan contribution. The same goes for the tax-free savings account, TFSA. There is a benefit in the TFSA, but again it belongs to those who have the means to make that investment.
Our concern is that more broadly...and the NDP want to have a mandatory increase to CPP at this time. We feel that at a time when we have high unemployment in Canada, and stubbornly high in some provinces, particularly in certain sectors, that increasing mandatory payroll premiums is something we ought not do. Where we do agree is that some compromise would actually achieve a stronger PRPP. We proposed a voluntary supplemental CPP. That recommendation was endorsed by the CFIB, the Canadian Federation of Independent Business, and by CARP, the Canadian Association of Retired People. It would have the benefit of giving Canadians not a defined contribution but another defined benefit option in an expanded voluntary supplemental CPP.
The reality is that the CPP is very well managed. It has a relatively low cost structure. The potential benefits of passing on to Canadians on a voluntary basis greater access to an investment vehicle that is well diversified across asset class, geography, and sector, and has low management costs would actually strengthen the PRPPs.
I think the minister would agree that one of the challenges with PRPPs could be that fees could be quite high. We always have to be careful to ensure that we're doing everything we can to make sure that the fees on retirement investment vehicles are low. One of the best ways to do that is to create competition.
Having as an investment option a voluntary supplemental CPP with lower fees might help keep management fees that are paid on to investors lower. It would potentially strengthen the PRPP option and would help to address.... This is where the C.D. Howe Institute and others have identified that a lot of Canadians believe that somehow a PRPP is going to be miraculously insulated against the vagaries of market fluctuation. The reality is it will be no more insulated from market fluctuations than RRSPs or any other investment vehicles are.
With a defined benefit option you don't have necessarily the same returns during the good times, but you have that guarantee.
We believe that in addition to PRPPs—and we will be voting ultimately to support this clause—an additional expansion of the Canada pension plan to include an optional supplemental CPP would improve, strengthen and fortify the PRPP and increase and improve the retirement options for Canadians.