moved:
Motion No. 24
That Bill C-2, in Clause 96, be amended by replacing lines 24 to 26 on page 81 with the following:
“period in which the report is prepared;
(d) set out the manner in which that contribution rate was calculated; and (e) describe how the contribution rates presently set out under this Act will affect the income level of future retirees as well as their income share relative to the income of those working.”
Mr. Speaker, I want to say a few words on a couple of the motions I have presented under Group No. 1 before the House at this time.
The first motion we are dealing with asks to establish a panel of experts to review the conflict of interest procedures established by the board of directors. We are talking about the board of directors of the new investment fund that will be established.
We believe it is very important that there be an independent panel of experts which will help to set up a court of conflict for the boards. The reason is that we want to make sure the board is as independent as possible from the government. It seems wise to have an independent panel of experts. It makes it more independent from the government. It is fairer, more transparent and something that should be done. I hope the government across the way would be willing to consider it.
In committee a number of amendments were moved. On many of the amendments in committee the four opposition parties were in agreement but the government did not accept them. It has now had a chance to think about another whole series of amendments. I hope this time around it will be a bit more receptive to some of the wise ideas coming from the opposition parties in the House.
The second amendment I am moving in Group No. 1 is Motion No. 24. This will establish a new reporting requirement by the chief actuary in terms of how he or she reviews the Canada pension plan.
Right now the actuary only focuses on costs. In the future the actuary should focus as well on forecasting the income of seniors. That has not been done. What will be the income of seniors in 20 years or 30 years? That is a very important aspect of the bill before us today. Those are the kinds of things I believe should be done.
We support the idea of a pay as you go plan, but a number of things in the new Canada pension plan bill are not fair and not progressive. There have to be a number of changes to make the plan more progressive. It is important to say that at the beginning of the debate.
For the most part the Canada pension plan cannot be amended without the support of two-thirds of provinces representing two-thirds of the people of the country in addition to the federal Parliament of Canada.
When the provinces were negotiating with the government a while back, the federal government obtained the support of eight of the ten provinces. The two provinces not in support of the amendments being made to the Canada pension plan are the provinces of Saskatchewan and British Columbia, both of which have NDP governments.
I come from Saskatchewan and want to and do reflect, on behalf of my party, a number of concerns of those two governments about the amendments moved at committee stage and again here at report stage. Now we are finding that there is going to be a rapid escalation in the premiums facing workers and employers of this country. In fact over the next three years after this bill takes effect on January 1 there will be an increase in premiums of some 73%. That is a rapid escalation in premiums that will be very difficult to meet by a number of people.
It is particularly going to be difficult for the self-employed and more and more people are self-employed. The self-employed have to pay both sides of the premiums, the employer and employee premiums. Instead of being the current 5.3% or 5.4%, in six years they are going to have to pay 9.9% of their earnings in terms of CPP benefits. That is going to be very difficult for the self-employed and very difficult indeed in terms of many workers who are receiving wages at the lower end of the scale.
We are also very concerned that the whole thing is not progressive enough, that the basic yearly exemption of $3,500 is no longer going to be indexed. From 1966 on, that exemption was always indexed so that when the cost of living went up, the basic exemption also went up, giving a bit of a break to low income people. That is going to be eliminated and it is going to be a hardship on a great number of people across this country.
On the other hand, the maximum on which one has to pay contributions is going to be $35,800 per year. We are suggesting that that should be increased as well so that people who are making more money, such as members of Parliament, senators, the Minister of Finance or many of the wealthier people in this country can pay a greater share of those CPP benefits.
Again that was a suggestion made by two of the governments during the round of negotiations on changes to the Canada pension plan. It is another area which I believe we should look at.
The contributions are going up and they are going up in a very regressive way. That regressive way is also going to hit generationally as younger people, many of whom are not in the workforce yet, are going to be paying more and more in order to pay the CPP to people who are retired or who are going to retire in the next five or ten years. That is also very unfair.
On the side of the benefits, on the side of the recipients we are also seeing very regressive changes under the amendments to the Canada pension plan. The benefits are going to drop. They are going to drop in particular for low income people, the majority of whom of course are women in this country.
We are also going to see a drop in the survivor's benefits. With respect to the survivor's and death benefits, once again most of those recipients are women because women live longer than men. There are more widows than widowers. It is going to discriminate against women in this country. That of course is a concern to us as well.
Those are some of the concerns we have about the changes that are being made to the Canada pension plan. We strongly believe in a public pension system in this country. We do not believe as the Reform Party is suggesting that we should privatize the whole thing or abolish the existing Canada pension plan or the public pension plan and move to a super RRSP plan.
If we do that, what do we do with the so-called unfunded liability of $600 million that is going to increase to over $1 billion within a few short years? How do we do that? How do we cover that? Those are questions that have not been answered appropriately in terms of getting rid of the Canada pension plan, in terms of a radical solution for the problem that is facing us today.
The other thing that should be pointed out is that the Canada pension plan is not strictly a pension plan. In fact it is misnamed. It should really be the Canada pension and insurance plan. A lot of the money, about one-third of it, is paid out for insurance benefits. It is somewhere around that amount. When we are looking at insurance benefits in terms of CPP disability, which by the way will be harder to get under the amendments, survivor's benefits, death benefits and all of these other benefits are really insurance benefits.
If we were to privatize the Canada pension plan, what happens to the insurance side of it? Those questions have not been answered.
I do not think those are amendments that should be seriously considered at all by the Parliament of Canada. The important thing is to make sure that this country has a very strong public pension plan.
CPP in its first 30 years has been a great social program in terms of helping to redistribute some income in Canada. If we look at the statistics we find that the number of seniors who are living in poverty is a lot lower today than it was in 1966 when the Canada pension plan was first formed. Any regressive change in the CPP in terms of who has to pay the premiums and who will get the benefits is something which is not going in the right direction.
On behalf of my party I have recommended a whole series of amendments, two of them in this particular group, which will help improve the Canada pension plan to make it more transparent, to make it more accountable.
An independent group that would advise on the code of conduct is something the government can certainly live with. It is not going to detract in any way, shape or form from the Canada pension plan to have an independent group to advise on how to set up the code of conduct and look at conflict of interest rules for the board of directors of this new investment fund.
The new investment fund is going to be a big fund. It will eventually be over $100 billion, perhaps the largest investment fund or largest pension fund in this country in a few short years. It is important that there be very stringent, very transparent conflict of interest rules. Some of the people who will be investing in that fund will be involved in other investment organizations. It is very important that they be at arm's length from any kind of conflict of interest.
Those are some of the reasons why I am moving these amendments. I hope the government will be receptive to some of these amendments. I am reminded that the government across the way had the vote of only 38% of the people so the majority is actually on this side. Therefore, the government should take some of our advice very seriously.