Finance Committee on June 8th, 2026

[Grant Jackson, Conservative, Brandon—Souris, MB]

I think it's a very good subamendment, to be quite honest with you. I'm glad Mr. Lawrence moved it. I look forward to hearing what members on the Liberal bench have to say about it.

There's a theme to our subamendments. They're trying to make our amendment...which seeks to make the bill better. Dr. Strauss raised a good point, which is that if the bill hadn't been so rushed, there might have been fewer amendments and subamendments at this stage of the game. Unfortunately, we are where we are.

Speaking to the subamendment to CPC-13, I think it's important for readers. This comes back to the theme of accessible, consumable language for Canadians, whether it's talking about the margin of safety, historical margins of safety or how much deterioration, for example, would be needed for contribution increases.

In terms of statutory rates, minimum rates and historical rates—whether it's any of those topics—defining that and making it consumable for everyday Canadians who want to understand the health of their pension plan is important. It demonstrates financial resilience and transparency by showing current and historical margins of safety. This would help stakeholders understand how much buffer actually exists against adverse experiences that may happen in the marketplace. Whether it's a market downturn or a significant demographic shift, this would reinforce confidence that the system is prudently managing funds over time.

We feel that including this would highlight trends and early warning signals that may not otherwise be caught. Certainly, it would be fair to say that it would be less accessible to parliamentarians and the public in general if this provision is not adopted. Presenting historical margins of safety would reveal whether resilience is strengthening or eroding. It ensures that it's encapsulated in a report that's tabled before Parliament, so it's right there in the record permanently for Canadians to review when they're making a determination about the health of a fund.

The trend analysis would allow decision-makers to identify emerging risks rather than reacting only when the threshold has already been breached, so it's good for parliamentarians. Too often in government we're reactive after a problem happens. We miss the warning signs and allow something to spiral into a crisis. Then everybody panics, throws their hands up and says, “Oh my God, we have to do something about this”, when we could have caught it sooner and minimized the impact and damage to Canadians.

There are lots of examples of that, Madam Chair. You're very familiar with them, so I don't need to go into that, but they certainly do exist.

Including these provisions in the amendment to the bill would quantify risk tolerance and trigger points. Illustrating how much deterioration would be required before contribution increases are needed would make risk thresholds explicit. Again, this would help Canadians understand not just the likelihood but the timing of contribution changes under different scenarios, such as whether they need to happen faster than Parliament can necessarily do that through the legislative process. We understand that it can be a cumbersome process.

If these indicators are there and regularly reported on, perhaps Canadians might start demanding changes to contribution rates sooner than a legislative process, given the spool up and how long it takes for legislation to be drafted and go through the rigmarole on the House side, etc. I think these indicators would probably be helpful in allowing a quicker response, should some crisis point occur at some given time in the future.

In addition to that, it would enable clearer policy and funding discussions. Linking margins of safety to contribution requirements would become easier not just for the Minister of Finance but for all parliamentarians. This comes back to what I was talking about earlier regarding the conversations we have at the door when we get whatever questions come at us as soon as somebody opens the door once we've knocked on it. If it's about the CPP, it would be easier to explain the trade-offs among stability, higher margins, future shocks, affordability and whether lower contributions today impact higher risk tomorrow.

Overall, the conditions we've provided in this subamendment would improve communication and the tools from the Department of Finance, the chief actuary and parliamentarians...directly to their constituents. The subamendment didn't specifically outline this, but perhaps it could even include a graphic comparison that would compare the statutory rate, the minimum rate and the historical rates. We could outline that in a simple graphic for Canadians and include that in the report itself when it's tabled annually.

People need information in bite-sized portions these days. We're talking about the 20-second TikTok clip world. That's where people consume more and more of their “news” and “information”. It has a whole set of problems of its own that we're dealing with at the PROC committee. I'd welcome feedback from members on that at any point, but that's not for today. I recognize that's not necessarily a healthy way to consume information, but it is happening whether we like it or not.

Having documents from the Department of Finance include perhaps a graphic or having these reports, as we've moved, would be an important step for ensuring that accurate information is getting out there in a consumable format given all the disinformation we're seeing.

Just to recap, it would show the pension fund's ability to absorb shocks, would provide insight into long-term funding discipline through history, would clarify when contribution increases would and should be triggered and would support intergenerational fairness and stability. We had a subamendment—unfortunately defeated—that talked about that. Adding the provisions in this subamendment would still assist the intergenerational fairness and stability questions that we were raising earlier, and it would enhance the understanding and accessibility of information through funding rate comparisons.

It's a good subamendment. It would not create all that much more work for the Department of Finance. As Mr. Lawrence and Dr. Strauss pointed out, Conservatives often criticize make-work projects. This is a pretty simple thing for the Department of Finance to add to their creation list that would not cause an onerous burden to the officials who do important work on behalf of Canadians.

I sincerely hope that government members support this amendment. It's a good one that makes sense to me.

Thanks, Madam Chair.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Jackson.

Mr. Strauss.

[Matt Strauss, Conservative, Kitchener South—Hespeler, ON]

I really welcome the debate, as when I left the mic, I was honestly not sure which way I would be voting on this one. The issue of red tape means a lot to me. Tomorrow will be—

[An hon. member]

What a waste of tonight.

[Matt Strauss, Conservative, Kitchener South—Hespeler, ON]

I agree on that point as well. There is a lot of time wasted in committees and in the chamber, frankly. Although I'm disappointed that it seems like Mr. Danko is speaking out of turn, I would love to hear more from him on this point, because it's an interesting point of debate that Mr. Turnbull raised yesterday.

I listened very carefully to my colleague Mr. Jackson, and he says it wouldn't take that much time to prepare this report. Looking at it, it seems like it would be maybe three or four line items. I imagine that it couldn't be more than five to 10 minutes of professional time for the right person in the Department of Finance to prepare this. Having considered all of the remarks Mr. Jackson made, I'm more inclined to his point of view. I'm leaning towards a yes vote on this subamendment now, but I haven't really heard anything from the opposite side.

I gather, although I've only just arrived, that most of these subamendments and amendments have not been adopted. If it's an issue of professional time and red tape, I'm not really seeing that the amount of information required rises to such a substantial level that both parties couldn't vote for this amendment. I'm hoping to see them do that. If not, at the very least they owe it to Canadians to raise their hands and say why not.

I'm freely acknowledging that I am substituting on this committee, but even as a substitute, I've been here for multiple hours now. I spent two hours here yesterday, and that was the only major consideration that was put forward by the parliamentary secretary. With this report being much shorter, all of them should be voting for this one.

A subject as important as the Canada pension plan, frankly, ought to be treated as sacred. It is a contract among workers, retirees and the Government of Canada, so to have this basic information publicly accessible and reported yearly seems really reasonable. That's my decision. I'm just looking to see if any hands come up, because I'd love to hear the other side if it exists, but at this point, this is a yes from me.

Thanks, Chair.

[The Chair, Liberal, Karina Gould]

That's great.

Thank you.

Shall subamendment six on CPC-13 carry?

We'll have a recorded division.

[The Clerk of the Committee, Vicky Sedhya Maurice-Sevigny]

The vote is on subamendment six to CPC-13.

(Subamendment negatived: nays 6; yeas 4)

[The Chair, Liberal, Karina Gould]

Mr. Lawrence, we're back to CPC-13.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Thank you.

One of the measures we have seen has had increasing importance. It was more or less dormant for maybe 15 years. The last time it was a significant issue was with inflation and after COVID. A former colleague of mine, Marty Morantz, raised the issue. Because of the amount of printing that went on during the COVID era, we would have inflation. Many people said he was wrong.

At that time the former Prime Minister, finance minister, and even the former Bank of Canada governor and current Bank of Canada governor, Tiff Macklem, said that inflation would be low for long. That proved to be untrue. Inflation has been proven to have a huge impact on the wealth of Canadians. It will also have a big impact on the CPP.

As has been a theme of Conservatives throughout the review of this clause-by-clause study, we would like to work with the government for greater disclosure and more transparency.

I would propose the following subamendment, which seeks to do just that. It demonstrates the impact of inflation on the CPP so that Canadians have a good view of it.

I move that the amendment be amended by adding after proposed subsection 43.1(1) the following:

(1.1) The report prepared under subsection (1) and the report prepared under subsection (3) must include projected Canada Pension Plan assets in both nominal and inflation-adjusted dollars and must include, to the extent that the information is available, projected assets per contributor and projected assets per beneficiary.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Lawrence.

If you could send that in writing, we will briefly suspend and get the translation to you.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Okay.

[The Chair, Liberal, Karina Gould]

Thank you.

[The Chair, Liberal, Karina Gould]

We are resuming the committee meeting.

Mr. Jackson, you have the floor on CPC subamendment seven to CPC-13.

[Grant Jackson, Conservative, Brandon—Souris, MB]

Madam Chair, I'm glad to be back.

I've just received that translation in my inbox. Thank you very much to the folks who do the great work on translation.

Continuing with our theme of trying to ensure that, overall, this amendment provides the accountability that we feel Canadians deserve, we're asking for some additional projections, shall we say, to be added to the reports, which the amendment would add into the bill under discussion.

I think it's important to highlight that Canadians watching this will ask, “Why are the Conservatives asking for these provisions to be added?”

[Ryan Turnbull, Liberal, Whitby, ON]

[Inaudible—Editor] filibuster.

[Grant Jackson, Conservative, Brandon—Souris, MB]

It is a good question, Mr. Turnbull. I'm happy to attempt to answer it.

We think it's important for a number of reasons. Starting with including the “projected...Pension Plan assets in both nominal and inflation-adjusted dollars”, this preserves real purchasing power insight. Showing projected assets in both nominal and inflation-adjusted—or real—dollars ensures that Canadians can understand not just how large the fund appears to grow but also what that growth actually means in terms of future benefit-paying capacity after inflation erodes value.

Also, it would add in some transparency or prevent the misinterpretation of growth. Nominal figures alone can exaggerate perceived financial strength over long horizons, so including real-dollar projections distinguishes true economic improvement from inflation-driven increases, enabling a more accurate assessment of the plan's sustainability.

This is fairly timely, considering the financial projections the government continues to put forward, overall, as it has done for the last 11 years. Its members continue to grandstand about the great economic growth they've created for this country, when in fact, they've created the largest household debt per capita in the G7, amongst many other extremely concerning economic indicators in real dollars versus their nominal projections, which they continue to tout as the only numbers that matter, in terms of trying to sell their success to Canadians.

By putting this specific provision in this subamendment, we would at least be able to tell both stories to Canadians, with respect to the Canada Pension Plan, which would be at least one area in which we could protect them from Liberal victory-flag waving, shall we call it, on other matters with respect to the economy and the finances of Canadians.

In addition, the provisions put forward in this subamendment would improve contribution and policy planning. Inflation-adjustment projections better align with real wage growth, benefit indexation and cost of living adjustments, which would help policy-makers and actuaries set contribution rates and funding strategies that are appropriate in real economic terms.

Additionally, it would provide meaningful participant-level perspective. Again, coming back to the Canadians, particularly—well, not necessarily particularly—young Canadians who are new to contributing to the CPP as they're getting into the workforce. It would ensure their perspective at a participant level.

Reporting “assets per contributor” would highlight the average funding support backing current workers' future benefits, while “assets per beneficiary” would show the adequacy of resources available to pay retirees, making aggregate figures more relevant to individual stakeholders.

Again, it's important to come back to the demographic breakdown and what they're contributing, what that means if catastrophic events occur or what's going to be left for them when they get to the pensionable age, based on what they've contributed over the course of their working career.

These are a couple of important amendments. People may ask me, when they see this clip, why “inflation-adjusted” projections are important, what this means and why it was included it in this subamendment, so I think it's important to explain that to Canadians. Inflation-adjusted projections—also called real-dollar projections—show the future value of pension plan assets after removing the effects of inflation.

We've been dealing with a period of challenging inflationary levels postpandemic. The cost of living has not come down, even though the government, I'm sure, is just about to point out that the inflationary target is within the Bank of Canada's limit. They often mention that in question period. This doesn't mean the impact of inflation—which wasn't in the period during and just after COVID—and its effects on the cost of living aren't still being felt by Canadians.

It's about showing the future value of pension plan assets, instead of just showing how many dollars the fund might have in the future. Adding this requirement to the amendment would show what those dollars will actually be worth in terms of purchasing power in the moment when an individual Canadian viewing the projection would access it. As a simple explanation, these projections would help Canadians have a better understanding of the real purchasing power of what every one of their CPP dollars will be able to buy when it comes time to turn to the “brown envelopes”, as we like to call them, when they arrive for Canadians to support them in their retirement years.

An actuary would start with a nominal projection of assets. Then they would strip out the inflation by discounting future values back into today's dollars using an assumed inflation rate. The result would be a real inflation-adjusted projection, reflecting the true economic value of the pension plan. This matters because benefit payments are often indexed to inflation, which does not reflect the challenges we just outlined. It would allow an apples-to-apples comparison over time, since all values are expressed in constant dollars. It would highlight whether the plan's assets are truly growing in a meaningful way—not just keeping up with rising prices but also planning ahead for what prices may be long term, down the road. It would support better policy decisions, since contribution rates and funding adequacy should be evaluated in real economic terms.

Madam Chair, from our perspective, that's the case for why this subamendment matters. We've been pretty reasonable in the comments outlined here with respect to why this excellent subamendment has been moved. It is an important one. I look forward to the government members' making some comment on this matter. Of course, we would certainly like to see them come around to supporting it in the end.

I think some of my colleagues here have important comments to make with respect to the subamendment and the important provisions therein, so I will end my comments for now and turn it over to those colleagues.

Thank you very much.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Jackson.

Go ahead, Mr. Kelly.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Thank you, Chair.

I want to thank Mr. Jackson for this subamendment.

This is yet another way in which we could improve the bill. That is, after all, what we are here to do as parliamentarians: to consider different options and different ways that we might make this bill more effective. Just before the amendment was moved, Mr. Lawrence reminded the committee of testimony about inflation that we had here at the finance committee back in 2021.

Our colleague, Marty Morantz, raised the spectre of inflation, but I did as well at that meeting. I was there and it was.... No, perhaps we're even thinking of two different meetings, but we had the former governor of the Bank of Canada there, and we said that zero interest rates and quantitative easing would surely trigger inflation eventually. We were assured that it would not. In fact, the former governor said they were only worried about deflation at the time, and inflation would be a lovely problem to have. He didn't see it as a possibility at all.

The effects of inflation are devastating, especially on vulnerable Canadians, on those who are employed in wage employment that does not keep pace with inflation and also on people who may be on fixed incomes that do not index to inflation. It's important that we communicate—and that the Government of Canada communicates—to people so they understand the impacts of inflation. Inflation is a creeping thing that is not visible in the air each day, but it piles up over time, especially when we talk about these long time horizons that the returns on investment project. If the numbers get off just a bit early, the compounding effects over time can be quite devastating for Canadians.

Canadians should be able to see and read a report that will easily and simply, in plain language, communicate what their spending power will be, what their purchasing power will be, so that they can plan accordingly and be prepared for their retirement, when they really will have very limited options left. In many cases, they won't have the option to go back. Either Canadians may feel that they're at a point in life in which they wish to enjoy retirement, or health, mobility and whatnot may prevent them from working or at least make it undesirable to have to do so.

Ensuring that Canadians know what their number is, know when they're going to be able to retire and understand what their purchasing power would be given the effects of inflation over time is just good policy. That's why we have encouraged the government to take this step through this subamendment.

I wanted to make sure that I got on the speaking list, but I wasn't sure whether the government had a response yet. I hope it does now. With that, I will turn it over and see if Mr. Turnbull has any comments on this particular amendment. I hope he will support it.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Kelly.

Mr. Lawrence is next.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Thank you, Chair.

I want to talk a bit about the impact that inflation will have on CPP going forward. It's amazing the impact that time can have on money.

If, in fact, this does pass and there is a reduction of 0.4% in the contributions, it will save taxpayers about $3 billion, I think it was. As Albert Einstein famously said, the most powerful force in the world is compounding interest, and it sort of becomes clear as we look at the impact. The assets are projected to be, after the amendment in 2050, $239 billion lower, which is 8% of the total amount.

By 2100, it will be $8.3 trillion lower, or 30%. You see the delta, not just in absolute terms, which is obviously massive, but the percentage also increases. By 2100, the fund is roughly 30% smaller than expected. This shrinks the buffer available to absorb future shocks, and that's the worry.

So far, I'm certainly not convinced that the move to lower the contribution rate is by any means reckless. Given the affordability crisis, given the fact that we have the highest food inflation in the G7, given the fact that Canadians are facing three of the last four quarters in recession and given that the GDP per capita in the last 10 years has been the lowest since the Great Depression, I do understand the need to give Canadians a break, even a relatively modest one of 0.4%.

If we look going forward once again, because we want additional information in this subamendment about inflation, we can see that it also will affect the assets-to-expenditure ratio. This is one of the key sustainability metrics that actuaries will look at, and what this does is it says, based on a snapshot in time, how long, if there were no more contributions or investment growth, for how long we could sustain CPP.

Without the amendment or the reduction in contribution, the number in 2050 would have been 14.1. If the amendment passes, it's projected to be at 13. Now, there are lot of assumptions that go into that, some of which I've talked about before, the 4.05% rate of growth consistently.

We know with almost certainty that it won't be 4.05, but that does seem like a reasonable average going forward. Then, in 2100, instead of it being at 20.7, it reduces it to 14.5. A lower asset-to expenditures ratio means that the plan has less of a cushion built up for the second half of the century, when demographic pressures are the strongest, meaning that there'll be more retirees per worker. That could become worse if immigration had recently declined. If that trend were to continue, all that simply means is that there are fewer workers per retiree or fewer contributors per recipient. That could be a significant challenge if our fertility or birth rate were to stay the same or lower at the same time that immigration was reduced. It will create significant strain going forward.

That's why it's important, to get back to the subamendment, to not just say it in nominal terms but in real terms or in inflation-adjusted terms so that Canadians can understand the importance.

The other part that happens with inflation—the numbers are bigger later on, but arguably the leverage is greater earlier on—is greater dependence on investment performance. Investments' income share of total revenue falls more than previously expected—in 2050, 1%, and in 2100, 7%. By the end of the century, the plan becomes more dependent on the Canada Pension Plan Investment Board returns to keep it in balance. Any sustained period of lower than assumed returns will have a bigger impact.

All this goes to say that inflation is incredibly important when looking at long-term investments, regardless of whether you're looking at the CPP, a pension plan or your own RRSP. You couldn't be told that if you've saved $50 a month up until now.... If you're 60—I don't know the exact number, but let's say it might add up to $1 million—you'd say, “Well, that's great. If I'm 20, then I'll have $1 million for retirement.” Well, $1 million 40 years from now will be worth considerably less. What's more valuable is to have, at a rate of savings, what the actual amount is in inflation-adjusted numbers, so that you can gauge whether that is sufficient for your retirement.

Now, at 47 years of age, my retirement is getting closer, and so inflation will have less of an impact. However, if there were younger members here—maybe one who has a striking resemblance to Justin Trudeau—inflation would have a much greater impact going forward there.

With that, I think I've done as much as I wish to explain on the importance of this subamendment— of importance of including inflation in future projections with respect to CPP. At this point, I will rest my case, as it were.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Lawrence.

We have Mr. Jackson.

[Grant Jackson, Conservative, Brandon—Souris, MB]

Not to belabour this point, but Mr. Kelly just twigged a couple of things that I wanted to pick up on and flesh out a bit more.

I often hear from seniors that they feel they have completed their part of the bargain in this country. They worked hard, followed the rules and paid their taxes; now their CPP doesn't go far enough to help them sustain their life. In fact, we know that there are more seniors at food banks, as well as becoming housing-displaced or outright homeless, than ever before in this country. Clearly, there is an understanding gap between people who have contributed and are contributing to the CPP and what that CPP is going to look like when it turns around and starts paying Canadians back.

The increased or enhanced provisions within the act, which we're trying to amend here today, might not fix that problem in terms of buying power, but they would at least give Canadians a bit more of a heads-up that this is what's coming—that this is what the dollar amount will actually be worth in terms of their buying power when they hit 65, 75, 85 or, if they're lucky, when they hit 95, versus what may be in their mind as the perception that they're going to be getting back from CPP after having paid into it their entire lives.

I do hear from Canadians, and it's a pretty disappointing result. They've worked very hard and contributed to their community and to society, and then they can't afford groceries at the end of the week.

I just heard a story about somebody from Harvest Manitoba. Her job at the Health Sciences Centre Winnipeg was to drive people to the food banks. When she retired, including her pensions, she still didn't have enough money to keep a roof over her head and pay for her groceries. She's now accessing the food bank herself, in retirement, after a career in the health care sector trying to connect people with the supports that food banks in Winnipeg offer. This is a tragic state of affairs as far as I'm concerned.

The point is that this individual maybe did everything they could to save everything they could, and nothing more could have been done. However, maybe they could have saved more if they had known that their CPP was only going to go a certain distance, a certain length. If that can be explained better with annual or regular reporting, as we're requiring of the finance minister with our amendment, I think that's a good thing. Canadians can then more accurately plan their finances with the information available to them, which will be more accessible and in a more consumable format. I think that's an important thing for Canadians to do. Certainly for this individual it may have benefited her in terms of her own financial planning and the situation she is now very tragically involved in.

Mr. Kelly raised an important point about the realistic funding and contribution decisions that this would outline, as well as the enabling of consistent comparisons over time, which I believe would also allow Canadians to have a better understanding of what the dollar figures will be worth and what their purchasing power will be when they come to be of a pensionable age.

[Ryan Turnbull, Liberal, Whitby, ON]

I have a point of order, Madam Chair.

[The Chair, Liberal, Karina Gould]

Mr. Turnbull, go ahead on a point of order.

[Ryan Turnbull, Liberal, Whitby, ON]

Madam Chair, I know the member opposite is talking about dollar figures. The Conservatives have now wasted 16 hours in total at this committee. They subamend their own amendments on the fly. It's basically “legislate on the fly” on that side.