Mr. Speaker, that was very kind of you. The folks across the way could listen and learn a bit about the CPP legislation. Then they would understand. There is a very good colleague across the way who happens to be a parliamentary secretary who is helping them understand some of the finer details and we very much appreciate that.
In the review of what I talked about yesterday it is critical to understand that the legislation which started 30 years ago needed some upgrading to be brought into the reality of today's society. Certainly when the chief actuary reported that there was a tremendous imbalance in the relationship between the contributions on the one hand and the payouts on the other hand and that it would not be a long sustainable plan, the finance minister took it upon himself to make certain corrections were made.
As I pointed out, the minister did not move along in this in some way in that he did not hide the fact that this plan needed revision. He went about it in a very open clear obvious way. He did consultations with all provincial and territorial governments in trying to examine the direction we should go. He talked to professional actuaries across the country, insurance experts. He talked to social planners, seniors, youth and the disabled to make certain that all the elements of society that are affected by the Canada pension plan were taken into account.
The consultations took a very long period of time. The answer that came back from Canadians was to keep the CPP and to make changes if necessary. The message was that the CPP is a very vital part of Canadian society, a very foundation under which we operate and one that needs to be maintained.
I also pointed out that there were some distortions when talking about the CPP. Many colleagues across the way have suggested that it is a tax grab. Quite the contrary. This is a savings plan, an investment fund that will be managed by an independent body. Any profits that come to the management of that independent body will go back into the fund. No dollars will go into general revenue. It is an independent fund that will be managed separately.
CPP contributions are tax deductible and therefore a tax deductible process that is put in place for the future of Canadians, for seniors of today. When we look at it, there is no question that it is a very vital program.
Anyone who says it is a tax grab is saying “Don't put any more money into it”. If that is the case, the reality is that if no more money goes in, payments do not go out. In reality what they are saying is no CPP for low income seniors in the future. That is a shame because that is removing the vital foundation under which this country operates which is to look after the seniors of this land. To say “Don't put money into the CPP” is to say “Low income seniors, we don't care about you”. I have a tremendous concern about that.
The basic features remain the same today as they were before. What we were told as well through these consultation processes that I pointed out yesterday was to go very easy. We were told not to go at this process very rapidly to alienate, hurt or upset any group in society. The plan was put in place so that changes would occur over a seven year period. Those adjustments would not be put in immediately. They would be spread over a seven year period and therefore it would not be a catastrophe or a blow to any group in our society.
Thus I have arrived at the point where I finished last night and I am continuing today. The impact of the changes will be shared among retirees, future survivors of retirees and recipients of disability benefits.
As noted earlier, one currently in receipt of a retirement pension under the CPP will not see that pension change. Let me state that again because that is something everyone in this House and everyone in society should be aware of. If you are in receipt of a CPP pension today, that will not change. All of those people who have pensions now can look forward to that same pension over the years without change.
However retirement pensions for future beneficiaries would change since the calculation would be based on five year maximum earnings instead of the current three. As an example of that impact of the proposed change, the maximum monthly pension based on the year's figures would drop from $736 to $724. That proposed change means a $12 a month change in benefits. That is a minimal change. It has been designed to be minimal, not to upset or destroy the balance but to make it affordable and make those changes minimal.
There are also changes proposed in the disability benefits of the CPP. As of now, to qualify for a disability pension an applicant must have contributed to the CPP in two of the last three years, or five of the last ten years. The bill proposes to change that requirement so that to be eligible for the benefit you must contribute in four of the last six years.
Changes are also proposed to the formula which will be used to calculate the disability levels. Under these proposals, pensionable earnings would be based on the applicant's maximum pensionable earnings at the time of disability.
I see I have a short time left to finish and there are a couple of points I would like to underline. We found ourselves in a position from the actuarial studies that stated that changes had to occur in the plan. We have tried to make those changes as easy and spread over a longer period of time as possible. We believe it is very vital that all seniors have pensionable earnings. We believe that seniors must be protected with the Canada pension plan and it has to be put in place to be sustainable.
Anybody who says you cannot increase the rates is saying you cannot pay benefits to seniors in the future. That is the reality. It is either pay into the plan and pay the benefits, or do not pay into the plan and cut the whole CPP.
What I am hearing from the right wing side of the House, from the Reform Party, from the Conservative Party, is they do not want seniors to have the Canada pension plan any longer. That is the reality if they are saying not to renew it or not to do what needs to be done to improve the plan.
Liberals strongly believe this fundamental foundation in security has served Canada well and will in the future.