Evidence of meeting #45 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was subamendment.
A video is available from Parliament.
Conservative
Philip Lawrence Conservative Northumberland—Clarke, ON
My respectful request, Madam Chair, is that we conduct this meeting as scheduled and according to the rules, which is to have the full complement of officials here.
Liberal
The Chair Liberal Karina Gould
Again, Mr. Lawrence, I'd like to know if there is a particular official in this moment of whom you would like to ask a question. Could you let me know? If that official isn't here, then we will suspend the meeting. Could you tell me which one it is, please?
Conservative
Philip Lawrence Conservative Northumberland—Clarke, ON
Thank you, Madam Chair.
I'm going to respectfully request that the clerk provide us with a list of officials who are currently here and of those who are missing.
Liberal
The Chair Liberal Karina Gould
Mr. Lawrence, you have a list of the officials who are scheduled to be here. Could you tell me which one you would like to ask a question of?
Conservative
Philip Lawrence Conservative Northumberland—Clarke, ON
Once again, Madam Chair, I respectfully request a list of the officials who are currently present.
Liberal
The Chair Liberal Karina Gould
Again, I'm going to ask whether there is a particular official. Is there a department that you want to ask a question of in this moment?
Conservative
Philip Lawrence Conservative Northumberland—Clarke, ON
The request that I put forward, which I think is a reasonable one, is to have present all of the staff officials we are supposed to have, in accordance with the rules.
Liberal
The Chair Liberal Karina Gould
I will briefly suspend while we provide you with that list. I look forward to your asking some questions of the officials.
Liberal
The Chair Liberal Karina Gould
Colleagues, we're going to resume.
We have all of the finance officials here, and given that we are on the seventh subamendment to CPC-13, we will begin the study now.
Mr. McLean, you're first now. Go ahead.
Conservative
Liberal
Conservative
Liberal
Conservative
Greg McLean Conservative Calgary Centre, AB
Okay. Pardon me, colleagues, and excuse me if I'm playing catch-up on this.
The whole issue around the Canada pension plan, of course, is the nature of what Canadians can expect from the plan going forward, because it is very much a plan that Canadians have to depend on. The amendment we're speaking to here is, of course, that we actually get preparation in both nominal and inflation-adjusted dollars so that people can see what's going on.
As you know, it's an open-ended pension plan. That means the people paying into the pension plan today are funding the retirees of today. They're not funding their own pension plan. That's part of the issue here. I've seen these 70-year forecasts that look at this pension plan being viable for the foreseeable future, and it's all based upon—my colleague Mr. Turnbull will know this as well—scenario analysis, as if there will be no hiccups going forward here on where Canadians pensions will be, going forward.
As I say, it's purely scenario-based, so having more of a robust illustration of what that means on both a nominal and an inflation-adjusted basis.... Of course, inflation is going to be a guess, as well, going forward, but the government is pretty good at that, based on 10- and 30-year bond rates. Having that will give some illustration of what numbers people can actually expect to see in terms of visibility on the viability of their pensions going forward.
I'll also raise at this point in time that the issue with pensions is a sore one for many people in the financial industry, who see the government continuing to use the debt-to-GDP ratio and including Canadians' pension assets as if they're the government's assets. I get correspondence on this all the time. I think the whole issue of pensions and what people expect from pensions have to be very clear, and that's why this amendment is there.
What does it actually mean? We've gone through a period—you'll know this, Madam Chair—where we raised the pension contribution amount and then raised it to a second tier, and now we're cutting it, so the obvious line of sight on what this means going forward is confusing for everybody involved in the process. You raise it, then you stick a surtax on it, more or less, and now you're coming back and cutting it.
Every one of these times, we were doing this for the viability of the pension plan. Now we're suddenly saying, “Well, we have enough in this pension plan. We just had a study on it that showed it had 70-year viability at the amount we were taking money out.” Now, we're actually saying, “Well, it's viable even if we don't take as much from Canadians as we have in the past.” There's mass confusion around this, and there does need to be some serious financial modelling and some second analysis, some second eyes, on this and what it means for the numbers that have been presented up to this point in time, because it is, like I say, pie in the sky.
If you think about it, somebody's saying, yes, it's barely viable, but you know, in the right financial scenarios—no pandemics, no wars, no recessions, no real hiccups in the foreseeable future—these pension plan contribution amounts will be viable for the foreseeable future for the people who are actually going to be requiring the withdrawals going forward.
We also have an issue about who's contributing and who's extracting. You'll know again, Madam Chair, that the contributors are generally people who are working in the economy. Your withdrawal rate is based upon how much you've contributed and for how much of your working life you actually put money into this plan. That is different for people who have worked for different parts of life, including mothers, who may have taken time off to raise their children. They may not have a full pension here going forward. As well, there are new Canadians who may have spent only a handful of years working in Canada and have a lower contribution percentage.
If you think about our birth rate in Canada, it's 1.3 children per woman. That means we're not sustaining ourselves, so we are going to be bringing in labour that hasn't put a full contribution into the Canada pension plan, yet we are all also going to make sure we see that these people are sustained going forward here.
Think about comparisons with other countries. Chile has a closed pension plan. Effectively, your pension plan with the government follows you: “Here are your contributions and here is what you're going to get, going forward.” It is mandatory, and it's something that works for the whole country. It's a better example in the sense that, in the open-ended system, as I said earlier, people paying now are paying for people who are extracting now. The line of sight is based on a scenario—
Liberal
The Chair Liberal Karina Gould
Mr. McLean, I want to make sure you're on the correct subamendment. This one is about reporting on inflation. Could you please stick to the—
Conservative
Greg McLean Conservative Calgary Centre, AB
It says both “nominal” and “inflation”. It says that the report “must include the projected Canada pension plan assets in both—
Liberal
The Chair Liberal Karina Gould
Mr. McLean, we've gone over this several times in committee in the last 18 hours.
Members, don't reread a subamendment that has already been read into the record. Also, given the standing order on relevance, don't be repetitive. Focus on the subamendment at hand.
Thank you, Mr. McLean.
Conservative
Greg McLean Conservative Calgary Centre, AB
Okay. I was talking about pensions.
I apologized at the beginning for not being part of the discussion yesterday. What was it that I said that was repetitive?
Liberal
The Chair Liberal Karina Gould
The subamendment at hand is about a report on the Canada pension plan. If you could focus on that specific element of the subamendment in your remarks, it would be appreciated.
Thank you.
Conservative
Greg McLean Conservative Calgary Centre, AB
I think I was speaking to that. I was speaking pretty clearly to why we have to do this. It says, “nominal and inflation-adjusted dollars and must include, to the extent that the information is available, projected assets per contributor”.
Liberal
The Chair Liberal Karina Gould
Again, please don't reread the subamendment into the record.
If you can keep your argument to why you support this subamendment, or why you don't support it, it would be appreciated by the committee.
Conservative
Greg McLean Conservative Calgary Centre, AB
I want to make sure I'm on track here.
What was it that I said in my comments that was not relevant to the subamendment?
Liberal
The Chair Liberal Karina Gould
Could you please focus on the subject matter of the subamendment at hand?
Thank you, Mr. McLean. You have the floor and can continue.