House of Commons Hansard #39 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was cpp.


Canada Pension Plan Investment Board ActGovernment Orders

4:45 p.m.


John Solomon NDP Regina—Lumsden—Lake Centre, SK

Mr. Speaker, I am happy to speak to this again. There are some new amendments before the House and I want to say a few words on behalf of the New Democratic Party caucus with respect to these amendments to Bill C-2.

I would like to begin by thanking the member for Saint John and her caucus in the Conservative Party for supporting some our amendments. I have worked off and on with the member for Saint John over the years and I find her to be a very co-operative person on many issues. She does not totally agree with our philosophy, but she sure agrees with a lot of it. I just want to acknowledge that today and thank her for her support on these amendments.

Before I deal specifically with Motions Nos. 11 and 13, 15 through 19 and No. 22, I want to say a word about No. 21 on which I understand the government has undertaken to follow the advice of the NDP. The NDP suggested that the auditor general be the auditor of record for the Canada pension plan benefits. I understand by reading the orders of the day that the government has put forward an amendment suggesting that the auditor general be the auditor of record for the Canada pension plan. That is something all parties would agree to support.

With respect to Motion No. 11, the NDP has a bit of a problem with accumulating a large surplus without reinvesting in our communities, our local businesses and our provinces with respect to infrastructure and creating jobs. Our motion provides some recognition of the fact that the Government of Canada and the people who support the funding of the government, the taxpayers, unanimously agree that government is a going concern.

What we mean is that when we are in business there are certain long term obligations, whether it is capital costs or capital accumulation. There are long term costs when it comes specifically to pension benefits for some business people. This motion we are putting forward acknowledges that the government has a going concern status, which means that it is going to be around for a long time and has a source of revenue that fluctuates on a regular basis, but is consistent. If it is a stable concern it can fund a pay as you go pension plan more easily than a corporation or a business that is having financial problems.

The notion of an unfunded liability is not really pertinent to the Canada pension plan as we know it.

With respect to Motion No. 13, we are very concerned about what the government is doing with respect to deindexing the yearly earnings. When the minimum is deindexed, there is a burden on those at the lower income scale. Our basic amendment freezes the year's basic exemption, the YBE, at $3,500 beginning in 1998.

We are proposing to let it float, let it be indexed for inflation. My colleague from Qu'Appelle indicated earlier that in 1966 when the plan was initially created as the result of a lot of hard work from the CCF and the New Democratic members across the country, the minimum yearly basic exemption was about $400. At that time the maximum was about $4,000 on earnings. It was a ratio of about 10 to 1.

Now we see the basic yearly earning being $3,500 on the basis of contributions made on a top salary of $34,000, so about a 10:1 ration has been sustained. We feel that if this is not sustained on a long term basis, it will hurt those people who need the support most. We are very concerned about this. We are asking in this amendment to make sure that the yearly basic exemption is indexed with inflation.

On Motion No. 15, I know the Bloc had some concerns about this. We believe very strongly that employees are getting away from paying the Canada pension plan share because many employees are hired on a part time basis. They are paid up to about $3,500 but they do not qualify to pay pension contributions and then they are not called back. These are mostly part time workers, women and others, who would suffer. We are asking that this minimum $3,500 be adjusted particularly in the face of work in this country which is ever-changing.

With respect to Motion No. 16, my colleague from Qu'Appelle basically indicated very clearly what we after here. We want better benefits for our seniors. Our change proposes that the benefit formula in the calculation is altered. The net effect is to provide increased benefits as opposed to reducing benefits, which the government wants to do. It seems to me that as we get older and inflation kicks in and the cost of living increases, we want to provide our seniors, our pioneers, with some sense of security so they will not have to rely on welfare and other things to get by on in their retirement years.

With respect to Motion No. 17, we propose to delete clause 69 because 69 is really attacking those who can least defend themselves. It reduces benefits for the disabled. It really attacks those who need more support as they get older. For example, we have a worker who works for 40 years, turns 55 or 56, gets injured, does not have a disability plan and cannot work. He or she does not contribute in those last eight or 10 years, which are crucial for CPP benefits to maintain a higher pension when he or she gets older. Therefore they diminish their pension for the years they need it the most. These are people who are injured. They are not people who are abusing the system or taking advantage of it.

With respect to Motion No. 18, we want to uncap the ceiling. We are proposing that the $35,800 be increased. For example, the National Council of Welfare is quite disappointed that the size of earnings are not considered an increase. Under current arrangements, CPP contributions apply to a relatively narrow band of earnings. Of the larger earnings base, contribution rates do not have to rise so quickly. The trade off would soften the impact on workers with lower than average wages. Those who are earning more money can afford to pay a little bit more and subsidize the plan.

In 1996 the rules of contributory earnings begins at the year's basic exemption of $3,500 and goes up to the year's maximum pensionable earnings of $35,004, a rough approximation of the average industrial wage. In the United States the upper limit is not $35,004. The upper limit for social security in the United States is about $62,700 U.S. which is about $88,000 to $90,000 Canadian. We are pegging ours at a measly $35,000. We believe it would be in the interests of Canadians to explore the impact of expanding the upper limit of contributory earnings to the Canada pension plan.

Motion No. 19 amends Bill C-2 by deleting clause 76 which in essence, if clause 76 remains, is another attack on women. It is unnecessary and it fails to provide a good overview with respect to how the CPP works and how it impacts on future benefits for Canadians. Why the changes? Reduction in combined benefits, reducing the ceiling for disability and survivor benefits. We do not want to reduce them. We want to increase them. We are suggesting our new combined benefit calculations should be increased for survivor, retirement and disability benefits.

I will end my comments by summarizing that we believe these changes are beneficial to those people who need it most, those people who are disabled, those people who have a lower income. We believe if we adopt these changes we will have a more viable Canada Pension Plan for not just the next four or five years but for as long as our country exists.

Canada Pension Plan Investment Board ActGovernment Orders

4:55 p.m.


Diane Ablonczy Reform Calgary Nose Hill, AB

Mr. Speaker, right now we are having a rather lengthy discussion about Group No. 6 amendments.

The effect of these amendments is pretty much as follows: to increase the level of benefits given in a fair number of areas, better benefits for the disabled, better benefits for survivors, mostly women, better benefits period. This is something that we would all like to see happen.

We would all want to see everyone in our country, probably everyone in the world, be very comfortable in their retirement and indeed throughout their whole lives. It would be wonderful if we could generously protect everyone and even make sure they have the luxuries of life. The thought, the intention behind these amendments is something we would all agree with.

Unfortunately, as we all learn from the time we are young, our wants come at a cost. When we purchase something, we must have money to do that. The reasonable question for Canadians is what level of benefits can we afford. Are we willing to pay for them? This notion that somehow “the government” is going to pay for it is simply a myth. The government is us. It is taxi drivers, hairdressers, people who are working hard every single day, paying their money into these programs and funding the benefits that come out of them.

Here we have amendments saying “We want more”. The question is how much can we afford? We have to remember, and I am sure the members who proposed these motions have not forgotten, that already this program is $600 billion in the hole. Six hundred billion dollars is a fair chunk of change. There is about two years worth of payments only lying around to the pay the benefits that have already been promised. Yet we now have a demand for more benefits where we have almost no money to pay the ones we have got already and some members are saying “More, more, more”.

We have no money available to pay for the ones we have. I guess the question has to be asked: where is the money going to come from?

There are two amendments that are possibly talking about where the money is coming from. They are kind of an interesting mix. One amendment is to uncap the ceiling on earnings on which people must pay benefits. That would make higher income earners pay more into the program than lower income earners.

The other amendment would say that premiums must be based on income and in a sense that is the same thing. If a person earns less, they pay less premium and if they earn more, they pay more premium.

With all respect to the members, we have to decide, and I think this might be a good time, whether this is really a pension plan or whether it is a social program, whether it is an income redistribution program.

If it is just an income redistribution program, let us not mislead the Canadian public by saying that it is a pension plan. Contributions are paid into a pension. They are invested and everyone benefits from that. That is a pension plan.

I have never heard of a pension plan where some people pay some money in and some people pay more money in and, then, at the end of the day some people get more out and some people get less. That is not a pension plan. That is an income redistribution program. It is a social program. It is entirely different.

If we are to say that this is a social program let us be honest about. I actually agree it has been run like a social program in the past. Benefits have been paid to people who have not put in sufficient investment to get them out.

Investment will be put into the plan by people who will not get the value of their investment out. Then let us not call it a pension plan. It is a fiction if we operate it this way and pretend it is a pension plan. It is not a pension plan. There is no pension plan in the world that operates in this way.

If this is a social program where we take from the rich and give to the poor let us at least be honest about it. That is exactly what the majority of the amendments are proposing.

I for one think that if we are to run a pension plan let us run a pension plan. If we are to help the poor and disadvantaged with retirement security, there are other instruments in society to do that. We should get on with that. Let us not subvert or convert a pension program for the purposes that are being talked about here.

I notice the objectives of managing the fund keep coming up. NDP members say that we have to use it for other objectives to build infrastructure and help the economy. If this is actually a pension program it belongs to the people who made investments. Their sole purpose is to get a pension out.

I dare say members of the New Democratic Party would not go to CUPW or any other union and say “By the way, the pension moneys you pay into your union pension fund should be available to the provinces to use for infrastructure and for economic development”. They would get pretty short shrift if they went to union members and said the pension funds should be used for broader objectives. Yet they are saying to Canadians that their pension investment should be used for other good works and to help economic development in the provinces when necessary.

That totally flies in the face of logic, good management and the expectations of Canadians. I do not see any logic, good sense or proper management in the proposals. The one proposal I support is to make sure that the year's basic exemption continues to be tied to inflation.

As other members have pointed out the year's basic exemption, the minimum amount of money that does not require a premium to be paid, started out at $400. We can imagine if it was frozen at $400 and the government went to workers and said “Aren't you lucky you do not have to pay premiums on your first $400 of earnings?” The workers would say “Whoop-de-doo, big deal”. Because of inflation the basic exemption has had to rise to $3,500. After a few years, if we do not tie this to inflation, $3,500 will be worth to workers exactly what $400 is today, nothing.

This is a very sneaky way of taking even more premium from low income people who can least afford it. I think it is dishonest. I think it is unwarranted. It certainly flies in the face of the stated intention of having a year's basic exemption in the first place.

I would certainly urge the government to get rid of taxation by stealth. If it is to take money from people, it should at least be done in an honest and forthright way.

We would like to increase benefits for everybody. I certainly would like to retire on a much bigger pension than I expect I will, having given up my MP pension. I did not think it was fair in light of what other Canadians can expect.

The fact of the matter is that we are already billions and billions of dollars in debt because of what we have promised. To promise more would be irresponsible and totally unrealistic.

Canada Pension Plan Investment Board ActGovernment Orders

5:05 p.m.

Progressive Conservative

Mark Muise Progressive Conservative West Nova, NS

Madam Speaker, I would like to discuss Motion No. 11 put forward by the NDP. Basically if we voted for this amendment we would be negating our Motion No. 12. The NDP amendment would eliminate clause 59 of the bill, which sets out the premiums to be paid now and in the future.

We agree that certain measures must be taken to ensure the stability of the CPP now and in the future. That includes raising CPP premiums. We also believe that hiking CPP rates would put payroll taxes at a level which would stifle job creation. It would place a tax burden on Canadians that would be hard to take.

While we can agree with raising CPP premiums they must be offset by a reduction in EI premiums. As it stands the EI fund has a huge surplus. During the election campaign we argued that EI premiums should be reduced 70¢ per hundred dollars. If members do not want to take our word for it, they can take the word of several business organizations that have echoed our position and said that premiums could be reduced 60¢ to 70¢.

Some business groups have recognized that reducing payroll taxes will not necessarily create jobs but that increasing payroll taxes will stifle job creation. The government recently ignored all these arguments in favour of reducing EI premiums substantially. It reduced them by a mere 20¢, not nearly enough to offset the $11 billion tax hike with CPP premiums.

The NDP motion would eliminate higher CPP premiums altogether. That is irresponsible, to say the least. We cannot turn a blind eye to the crisis facing the CPP. Millions and millions of Canadians are counting on us to save the CPP for now and the future.

Certain decisions have to be made. The government wants young Canadians to foot the bill almost entirely. The NDP does not want anybody to foot the bill. We want to spread the bill as equally and as fairly as we can. I believe our amendments will do that.

Canada Pension Plan Investment Board ActGovernment Orders

5:05 p.m.


Ghislain Fournier Bloc Manicouagan, QC

Madam Speaker, I am pleased to address Bill C-2 and to tell you why my party supports this legislation, thus acting in a responsible way, as it always does. Indeed, when a bill is good, we are prepared to support it.

First, I would like to briefly discuss Motions Nos. 11, 13, 14, 15, 16, 17, 18, 19 and 22. I am very disappointed by the behaviour of the Reformers, the Conservatives and the New Democrats. It has always been said that the opposition's role is to make constructive criticism. Again, I am disappointed by the Reformers, the Conservatives and the New Democrats as regards this bill.

Why is the Bloc Quebecois opposed to Motion No. 11? The purpose of this amendment is to delete the clause allowing for an increase in the contribution rate. We are opposed to this amendment partly because we will partially restore intergenerational fairness through a faster rate increase.

Present workers and babyboomers will pay more than expected, and this increase will ensure the viability of the plan in the coming years.

The increase in the contribution rate, as amended, is the result of an agreement between the majority of the provinces and is identical to the one proposed in the debate on the Quebec pension plan.

Motion No. 13 put forward by the NDP provides for the deletion of the basic exemption limitation provision. Contributors to both plans benefit from an exemption on the first portion. The basic exemption will be fixed and premiums on total pensionable earnings will continue to increase based on salaries. That means that the more you earn, the more you pay.

The Bloc will vote against this motion. This cap on the exemption will have the effect of reducing the gap between the amounts used for calculating premiums and benefits paid. This cap represents in fact an increase in premiums for everybody, but this increase will be proportionally higher for low income people.

The viability of the program for future generations and the need to maintain contribution rates at an acceptable level require that some concessions be made with regard to benefits.

Motion No. 14 put forward by the Conservatives calls for the same thing and we will vote against it essentially for the same reasons as those for which we will vote against Motions Nos. 13 and 15 put forward by the NDP. It makes no sense at all. I think even they do not understand. How can we understand this total mess? It makes no sense from beginning to end.

Motion No. 16, put forward by the NDP, also calls for the deletion of a provision that sets new rules for calculating benefits.

I will not read through the motion. For the same reasons as Motion No. 13, we will vote against this motion because we must make concessions to ensure the long term viability of the plan.

Motion No. 17 is the same as Motion No. 14. As I was saying, we did not understand what it was about and we will vote against it for the same reasons.

Regarding Motion No. 18, if the amount is to go from $35,000 to $70,000, we are against the motion.

As for Motion No. 19 proposed by the NDP, we will vote against it motion for the same reasons as Motion No. 13.

Finally, we will be voting against Motion No. 22 put forward by the NPD, because the lack of concern about the negotiations and the urgent need for action about the pension plan are costing us enough money without having to repeat the same errors.

Earlier, I said that I wanted to tell the House why I, as the hon. member for Manicouagan, and my political party will be voting for Bill C-2. I was elected four times to the Sept-Îles city council and during the last term I was responsible for the senior citizens and the pensioners. There were two associations with a total number of 3,000 members.

Some of these senior citizens came to me and said “We worked awfully hard, we gave everything we had to take care of our children and to get a good pension plan”. They explained their concerns and sent me and my party a message. They wanted us to protect their rights and to think about young people too.

If we want to preserve the pension plan for our children, for the next generation—and may I point out that I am a father of two and a soon-to-be grand-father—we have to be extra careful.

This is why our political party will vote against the amendments I mentioned, but for Bill C-2.

Canada Pension Plan Investment Board ActGovernment Orders

5:15 p.m.

Progressive Conservative

Greg Thompson Progressive Conservative Charlotte, NB

Madam Speaker, I want to speak to Motions Nos. 13 and 14.

Motion No. 13 has been proposed by the NDP and talks about eliminating the freeze on the yearly basic exemption. I cannot support that and I will go on to tell the House why a little later.

While I am on my feet, I also want to speak on our Motion No. 14 which would freeze the yearly basic exemption for 10 years only. I would like to frame this as best I can so that the House will know what we are proposing.

The elimination of freezing altogether as proposed by the NDP would impose an additional 1.4% in premiums. Obviously when we are changing the principal amount of money that we are dealing with and the numbers of people who are paying, it has a huge impact on the fund. We cannot operate in a vacuum when we are talking about the realities of finances. It would be fine if we could, but unfortunately we cannot. We need to make sure that the fund is stabilized. The stabilization of that fund is paramount.

Madam Speaker, earlier today you were very gracious in allowing me a few more seconds than what I should have had in the debate when I was talking about this bill. I talked about the government postponing the inevitable. That is what has happened in regard to the Canada pension plan. The government knew full well a number of years ago and certainly when it took power in 1993 that something had to be done. It could only postpone the inevitable for so long. At some point reality comes home and we have to deal with it.

If it was a normal business transaction in an insurance company in the private sector, it would have had to declare bankruptcy. It would be insolvent. However in government, and this is the only place it can happen, the government has the power to take measures to resurrect itself almost from the dead. Basically the fund at this point is dead. The Reform member mentioned that there is about two years of premiums in the fund. In other words in two years the fund will be broke.

What we are really talking about is pay in and pay out. It is on a day to day basis that the fund is sustaining itself now. The reality of having to deal with it is there.

Picking up from where I left off earlier in the day, the chance to have dealt with this reality presented itself in 1993 but postponing it is only postponing the inevitable. Now with compound interest and the demographics changing and moving around as they are and more people retiring and the pressures that are being placed on that fund, it has forced the government to increase the rates. I would call it an astronomical increase in rates.

Getting back to the reality of it, we have to deal with the cards that we have. None of us in this House or in the country want to see the fund go broke. There is an unfunded liability of $600 billion staring the government in the eye.

The motion that is proposed by the NDP just will not work. The one proposed by the Liberals talks about an indefinite freeze on the basic exemption, and we are talking about a 10 year freeze on the exemption. The differences in these three divergent points of view reminds me of what Aristotle said 2000 years ago when he said that virtue was in the middle. It is in the middle, between the two extremes. That is what our amendment does. It is grappling with reality but it is not going to one extreme or the other. We are looking at a 10 year exemption.

What could happen in the meantime if the plan's earnings are invested wisely, and much more wisely than they have been in the past and are left untampered with, in a 10 year time period we could be looking at a completely different picture. The reality at that time would be that maybe our plan of a 10 year exemption would work, but in the meantime we have to deal with the cards that are on the table. I do not think any of us wants to duck that bullet because if we do, there is going to be a lot of hurt out there in Canadian society.

I think every member of Parliament is dealing with Canada pension plan problems galore back home. A number of disabled people are applying for Canada pension, and rightfully so, and are being turned down. They are just not getting it. One of the PC party members from Nova Scotia spoke yesterday of some of these situations back in his riding. That was during the statement period yesterday, right around 2.15, shortly before question period.

I have the same type of cases back home. People who have had hip replacements and cannot work. People who have a chronic disease or a crippling disability and cannot work, some of them much younger than I am. People apply only to find out that their applications are turned down, whereas just a few short years ago those same people would have been successful in their application for Canada pension plan benefits.

What we have now is the government accepting the reality that the fund is almost broken, but in the meantime there are a lot of innocent people who are casualties because of the inability to deal with this fund in the last number of years. In other words the fund is money in and money out. The government is taking a very hard look at who qualifies for these benefits. I think that is wrong. It is absolutely wrong because we are brought up to believe that if we pay into the fund, it is going to be there.

Now we find out that mismanagement over a number of years has left a lot of Canadians out in the cold. The worst thing that we could do at this point is to allow that mismanagement to continue and to not deal with the reality of having to readjust the premiums paid by you and me to sustain that fund.

Laying blame is not going to solve the problem. It would be easy for me to stand up here and condemn the government for having to do what it is doing, which is fine. And I do not agree with the huge increase in premiums either. Nobody could.

Our position has always been and it continues to be to this day, that if we are going to tackle the question of the CPP, let us also look at the employment insurance fund. Canadians are paying too much into that fund. It is just the opposite of the CPP. We are paying too much into that fund. Today as we sit, there is about a $12 billion surplus in that fund.

What we are saying very simply is that the surplus in that fund should be applied to reduce the premiums in the Canada pension plan or at least to reduce the EI premiums that all Canadians pay so that at the end of the day it is a wash and will not be an extra tax burden on Canadians and on businesses. An increase in the CPP premium is really a hidden tax and we cannot stand any more of those hidden taxes on our businesses and professionals.

Canada Pension Plan Investment Board ActGovernment Orders

5:25 p.m.


Angela Vautour NDP Beauséjour—Petitcodiac, NB

Madam Speaker, I want to talk about the huge problems Bill C-2 will create. This legislation reforms the Canada pension plan, without taking into consideration the needs and the interests of all Canadians. The Liberals would rather protect the wallets of the Toronto brokers and go after the most disadvantaged segments of our society.

The proposals put forward have a disproportionate impact on women, the disabled and the low income Canadians. What is the government trying to do? Is it trying to compete against the United States to see who can best abuse the disadvantaged citizens in their respective countries?

Bill C-2 will make it even tougher to get disability benefits. It is bad enough that these Canadians have to overcome their physical disabilities, but now the government wants to reduce the number of individuals who receive these benefits.

It is bad enough that the government is attacking people with disabilities by reducing the number of people who will receive benefits. Now it has created a category of storm troopers who will harass the disabled to make sure they are worthy of their benefits. Does this government have no shame?

Clauses 69, 87 and 107 of the bill must be deleted so that people living with a disability can do so with dignity and without being harassed by investigators. Resources would be much better spent by increasing benefits and the number of beneficiaries.

Women will also be negatively affected by Bill C-2. It is understood that because women leave the workforce to take care of loved ones, live longer and have fewer wages than men, women receive smaller pensions. On average, women draw CPP pensions worth only 39% of an already low maximum benefit and only 57% of average benefits drawn by men. The government had an opportunity with this legislation to rectify these imbalances, but what did it do? It made the situation of women even more difficult.

One of the most terrible things about this bill is that the amount of the basic annual exemption is no longer indexed. That means the poorest in our society will pay more, but the richest will pay less as inflation rises. Women in particular are penalized, because they are over-represented in the low income worker category. We must ensure that subclause 61(2) is deleted.

Women are also penalized under clause 76, which introduces a new calculation for disability, survivor and retirement pensions combined. Women often live longer than their spouses, and this clause will go after the already modest income they apply for. Clause 76 must be deleted to ensure that the women and men affected are not further penalized.

I have to also add it is not a surprise that women are attacked since they are attacked in every way, if we look at the EI where women have been affected and also the way that the government is abusing its power by not paying the pay equity it owes to women.

Bill C-2 contains a number of problems, because according to the government's philosophy the economy is more important than people. The Canada pension plan looks after workers. Employers and employees contribute to it to ensure that Canadian workers enjoy a comfortable retirement. So would it not make sense for the government to listen to workers in this country and come up with a system that means more money for them? This would be the logical thing to do, but Liberal logic is not always comprehensible.

The Liberals will argue that they consulted provincial governments, but I never saw Franck McKenna protect the interests of New Brunswick workers. Also, union representatives came before the committee reviewing this bill to voice their opposition to the bill. Did anyone listen to them? Of course not.

This government made it very clear that it wants to protect the interests of the rich rather than those of Canadian workers. If the Liberals were really concerned about the situation of workers, they would reduce unemployment.

Quite simply, the larger the number of workers contributing to the Canada pension plan, the better it is for the system. If the Liberals really take the interests of all Canadians to heart, they will deliver on their promises and create the jobs so desperately needed by the unemployed.

The Liberals could ensure that the money paid into the Canada pension plan is reinvested in Canada. The Caisse de dépôt et placement du Québec is a good example, as funds are reinvested to help the Quebec economy prosper.

Why does this government not want to give us any assurances that the Canada pension plan will be used for the benefit of companies here in Canada? Is it afraid of seeing the unemployment rate fall under 9%?

It is clear, however, that job creation is not on the Liberal agenda. They would rather take the Canada pension plan and hand it over to Bay Street brokers to make even more money off it.

The NDP asks that a panel of experts oversee the activities of the board of directors. If this government is well-intentioned, it should not be afraid to have a panel of experts ensuring that friends of the Liberal Party act properly. If it is necessary to monitor people with disabilities who make, at best, slightly more than $800, it is only logical to want to monitor those who will be making millions.

I went through a number of problems Bill C-2 will cause. Simply put, this Canada pension plan reform will see retired Canadians become poorer and poorer. Over the past ten years, Canada has taken major steps to reduce poverty among seniors.

This bill will take us back to a time when seniors were even more vulnerable than they are today. We must see to it that this does not happen and that all Canadian workers can rely on a pension that will allow them to live with dignity.

Canada Pension Plan Investment Board ActGovernment Orders

5:30 p.m.


Gilles-A. Perron Bloc Saint-Eustache—Sainte-Thérèse, QC

Mr. Speaker, thank you for giving me this opportunity to speak on Bill C-2, which the Bloc Quebecois will be supporting, since it is a carbon copy of the Quebec pension plan.

This bill will make it possible to create a fund similar to the Caisse de dépôt et placement created by the Quebec pension plan.

This afternoon, I greatly appreciated the hon. member for Qu'Appelle's praise of our fund. I also appreciated his being so praiseworthy of a fund created by Jacques Parizeau, the former premier of Quebec. Mr. Parizeau is a controversial figure, but he has the courage of his convictions and he does not mince words, whether they are good ones or bad, he dares to express himself. We could do well with more politicians like Mr. Parizeau today.

Returning to the amendments proposed on Bill C-2 which we are discussing this afternoon, I really can say no more, because my Bloc Quebecois colleagues have pretty well touched upon everything we do not like about them.

I must state, however, that Bill C-2, if it is indeed modelled on the Quebec pension plan, will be advantageous for all Canadians. This is the role of a serious opposition, to stand up for everyone, regardless of their political stripes.

I am pleased to have contributed to the review of this bill.

Canada Pension Plan Investment Board ActGovernment Orders

5:35 p.m.


Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

Mr. Speaker, I am pleased to participate in the discussion on this group of amendments to Bill C-2 sponsored by the hon. member for Qu'Appelle who has done my party and the Chamber a great service by doing such a thorough job of researching and presenting alternatives to the provisions before us as a whole.

If Stanley Knowles were here today he would be very proud of the work being done by the hon. member for Qu'Appelle and others. When Stanley Knowles passed away we said the best way we could honour his legacy would be to stand up for the programs he pioneered and to fight against any erosion, cutbacks or plans to terminate those very important programs.

If he were here today he would have stood in the House and said to members of the Liberal government that they were doing a great disservice to Canadians and to our history and traditions of working together to ensure that everyone is guaranteed some measure of equality upon retirement.

He would have said the proposals before us today in the form of Bill C-2 are a fundamental departure from everything we hold near and dear as Canadians, from the values of caring and sharing which have built the country. He would have said to the Reform member for Calgary—Nose Hill that she was wrong to spread the myths and misinformation that have characterized this discussion.

He would have reminded all of us that we were talking about a system which was not in crisis. It is a plan that needs adjustment and changes but one that should not be changed so fundamentally as to cause its inevitable destruction.

He would have said that we need balance. We need to look at the sustainability of the Canada pension plan for the future. That would mean some adjustment in the rates. That would mean some changes in the benefit structure. That would mean some increases in premiums. However these points must be balanced with our sense of valuing human dignity in society today.

He would have said to the Reform member she was wrong to suggest that the Canada pension plan was or should be a personal savings plan. He would have said it was a social insurance program in the best sense of the words.

He would have said that when Canadians supported the Canada pension plan originally they agreed to get together to pool the risk of providing for the loss of income we all face when we retire or become disabled. In so doing all of us as Canadians work to create citizenship rights or entitlements that reflect a collective responsibility for and to future seniors. He would have told Reform members and the Liberal government not to tamper with a program, which means so much to Canadians, to the point where they will cause its demise.

He would have said this was not supposed to be a program or a policy based totally on fiscal management but was about human worth. He would have said that this was not about the Reform view of society that this is a dog eat dog or survival of the fittest world. The plan was originally intended to do the opposite and any amendments to the Canada pension plan should uphold those principles and those values. He would have given our caucus all the support he could have mustered, for the amendments we are proposing today are right and just and deserve the support of every member of the Chamber.

In that context I want to focus specifically on a half dozen amendments before us in this grouping, the amendments that deindex the year's basic exemption of $3,500. All of us by now should be aware that would download the burden of premium hikes to low income earners.

I want to talk about our amendment which seeks to change Bill C-2 in terms of its unfair burden on those who seek self-employment. I want to support our amendment which addresses the government's attempt to alter the benefit formula calculation, leaving a net effect of reducing benefits.

I want to support our amendment which addresses the government's proposal to change minimum contribution requirements for a disability benefit, the net effect being a reduction in disability benefits.

I want to support our amendment which addresses the government's proposal to set maximum pensionable earnings at $35,800 so that those who make over the maximum pensionable earnings pay a lesser share than those who make under the MPE.

I want to support our amendment that addresses the government's attempt to reduce benefits in general for people with disabilities and for survivors. In every one of those amendments we are attempting to stand for those people who are most likely to be forced into poverty. Our amendments would raise people above poverty or remove them from poverty so that they can live their retirement years with dignity, respect and some sense of security.

Is it not ironic that today we are discussing provisions in a bill which disproportionately affect the lowest income people in society, that disproportionately affect women and that place the greatest burden in a negative way on people with disabilities?

Is it not interesting that we are debating those issues on a day when Campaign 2000 came out with its report card on child poverty in Canada? The report card shows that Canada is second from the bottom in terms of the wage gap between the rich and the poor, second from the bottom out of nine selected OECD countries at the same time as being second from the top in terms of having the greatest comparative national wealth.

When we are talking about the gap between rich children and poor children we are talking about the gap between rich families and poor families. Children are poor because their parents are poor. The last thing in the world we should be doing today is anything that will widen the gap even further and will relegate poor children to absolute destitute poverty when they reach the age of 65.

Is it not enough that we have one of the worst records of any developed country when it comes to treatment of women?

Is it not appalling that we are talking about amendments that will put women further into poverty when we know we are already dealing with a situation in Canada where many women live below the poverty line and where the majority of older women live in poverty?

I refer to a report by our own legislative library on women and poverty: “Much contemporary research also indicates that most women in Canada can expect to live their later years in poverty. Statistics show that 45% of unattached women between the ages of 70 and 74 live in poverty. The figure rises to 57% for women in the age group of 75 to 79 and skyrockets to 75% for women 80 years of age and over”.

The report goes on to state that part of the explanation for such high poverty rates for the elderly lies in the inadequacy of the existing income security programs.

The National Council on Welfare has determined that in 1992 maximum benefits from the old age security pension and the guaranteed income supplement for a couple living in a large city were more than $2,000 below the poverty line. For unattached pensioners living in a large city the gap was $3,460. And we today want to make that situation even worse? We want to put more women into poverty? We want to ensure that just because you are a woman, when you become old you are designated to live in abject poverty?

Why are we not thinking about ways to have a balanced approach to income retirement security in this country? Why are we not looking at ways to ensure people can live with dignity and some sense of security after they have spent their working lives trying to contribute to this country? They have raised children, they have tried to hold down their jobs, they have juggled family and work responsibilities, they have participated in the community, they have gone to school advisory meetings to try to help on every front and we say that their entitlement after doing all of that is to live in poverty.

Our amendments are an attempt to address that fact, and it is a fact. It is a fact with this legislation. If Bill C-2 goes forward as this government is so determined to have happen, without real debate, without accepting any suggestions, without listening to any of these amendments, we will see that day, and that can only be described as the most irresponsible action any government could ever take, to deliberately go forward with a policy that will hurt women, people with disabilities and low income people in our society.

This is after the government promised that any social policy initiatives would have a gender analysis. Where is the gender analysis? All we heard from the Minister of Finance was that an analysis was done which showed that women will benefit most from these changes because they live longer. My goodness, what an insult to suggest that because women live longer we should be satisfied with the fact that we are getting anything at all even if it is greatly reduced, even if we are talking about peanuts every month.

Surely in a civilized society we should ensure that everyone is entitled to decent security in their old age, in retirement and when faced with disability. That is our goal today, to try to make sure the government listens and accepts these amendments so we can move forward to ensure we have a great nation of equality, dignity and security.

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5:45 p.m.


Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I will spend some time discussing points that were raised. Motion No. 11 put forward by the NDP would eliminate the rate schedule as proposed, which basically means to revert to the existing schedule. The chief actuary has indicated that if we make no changes now the fund will run out by the year 2015. This is what the NDP would call “one of our reasonable amendments”, which is to do nothing. We have to do something. We have to make sure that the Canada pension plan is still there.

The NDP would prefer to apply the funds as well for regional and economic development rather than for investment to provide for the best possible return for Canadians so that we can keep the rates as low as possible and at a steady rate so that it is efficient in meeting the objectives of the bill and of the Canada pension plan as a whole.

The second item on Motion 13 is with regard to the year's basic exemption and the fact that the $3,500 is not indexed. It is important to put in context the amount that we are talking about. Inflation in Canada right now is about 1.7% If the $3,500 exemption on the CPP was indexed, it would result in a reduction of the Canada pension plan premiums otherwise payable by $1.89 for the entire year. The deindexation item with regard to an employee, the maximum for someone making $35,000, is only $1.89. The member who just spoke talked about throwing people into poverty. I am afraid this is not the case.

The last area I want to comment on—I know other members want to speak and the parliamentary secretary would like to comment on these—is with regard to the issue of self-employed persons. As we know, self-employed persons pay both the employee and employer share. Currently they pay the full 5.85% whereas an employee would only pay half of that if they worked for a company.

There are a number of reasons for that. Members should know that under the Income Tax Act self-employed persons have a number of other opportunities within the tax system to reduce their taxable income. It could be with regard to use of automobile, travel, entertainment expenses, tools, clothing and a number of things which are not available to employees. In terms of the assessment of whether or not it is fair that a self-employed person should pay both sides of it, you have to look at the full tax consequences of being a self-employed person.

As a chartered accountant, I can tell you that in certain fields there are a number of direct expenses related to that self-employed income that are deductible. The same levels or kinds of deductions would not be available to an employee. There is a balance of a process of arbitrage which makes these issues not as black and white as the member may indicate.

I would indicate that although there are a number of issues here they are self evident—

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5:50 p.m.

The Deputy Speaker

I hate to interrupt the hon. member but the hon. for Charlotte has a point of order.

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5:50 p.m.

Progressive Conservative

Greg Thompson Progressive Conservative Charlotte, NB

Mr. Speaker, I find this unbelievable. We are here debating one of the most important bills to come before this House, certainly in this session, and there is not a minister in the House. It has always been the practice, Mr. Speaker—

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5:50 p.m.

The Deputy Speaker

The hon. member knows that it is improper to refer to the absence of members in the House. I am sure he would want to comply with the rules in that regard.

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5:50 p.m.


Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I would like to conclude my comments by clearly stating that, in my opinion, the comments with regard to the last speaker about the benefits available to seniors and those in poverty are going down are absolutely wrong, false and totally out of character with the bill.

Seniors should be assured that the benefits under the Canada pension plan continue at the same levels and are indexed. They are guaranteed, they are secure and they will be there in addition to survivor benefits and the disability benefits.

The member has misunderstood Bill C-2 and the provisions under the report stage grouping which we are dealing with. I want to make sure that it is understood clearly by all members that benefits are not being reduced. We should not fearmonger and scare seniors today that somehow things are going to happen here which will reduce their benefits. It is not so. Seniors should be assured. I want to assure them that the benefits under the Canada pension plan and the amendments of Bill C-2 will ensure that those benefits are there, they are secure, they are guaranteed and they will be indexed.

For Canadians of all generations, the intergenerational equity is in place with these changes and all today's beneficiaries should be assured that nothing will change the benefits that they currently enjoy from the Canada pension plan.

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5:55 p.m.

Stoney Creek Ontario


Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I want to make a few comments on each of the motions that form part of this group.

With respect to Motion No. 11, I think it is important to point out that essentially this motion puts the financial sustainability of the CPP at risk, the very thing that the bill addresses. The motion in fact would mean that instead of rising to 9.9% by 2003 and then levelling off, contribution rates would in fact rise to 10.1% and then to 14.2%, a 140% increase over current contribution levels. That is in fact the motion put forward by the NDP. This motion would impose an unfair burden on our children and grandchildren and never in fact make the CPP sustainable.

I ask the question, does the NDP want to kill the CPP by neglect? Let us do nothing. We have heard a lot of rhetoric from the NDP today which is in full flight. We did not hear anything of substance unfortunately.

With respect to Motions Nos. 13 and 14, the federal-provincial governments have put the plan on a sustainable track through their negotiations after consulting with Canadians. Freezing the YBE was part of the changes required to balance the cost of the program. Despite the freeze, the low income workers will still pay contributions on a smaller portion of their earnings than higher income earners.

In fact the amendment put forward by the NDP and the Conservatives would remove an essential element of the federal-provincial package and would require a significantly higher long term contribution rate than the 9.9% provided for in this legislation.

It also may be of interest to hon. members of the House to know that further examination of the basic exemption will occur in the next phase of the Canada pension plan reform studies. More specifically, the federal and provincial governments have agreed to study Quebec's proposal for graduated removal of the exemption as income rises. In fact there is a commitment on the part of the federal government and the provincial governments to the changes to the YBE in the next review.

Motion No. 16, essentially the measure that is the five year average of earnings, is similar in concept to how most private pension plans adjust for wage growth over a pensioner's working life. The reduction again helps the costs over time and strengthens the sustainability of the CPP. Again, I think it is very important to ensure that Canadians know that current pensioners and persons age 65 or older in 1997 will not be affected by any of the changes.

Changes to the benefits that had to be made were in fact balanced. This particular change is the only measure in Bill C-2 which affects retirement pensions and it is therefore not only essential to the overall goal of sustainability but also to achieving an overall balance in the impact to the benefit changes.

The effect of the motion as worded is somewhat flawed and in fact would make the legislation unworkable. It would not be acceptable to take away this critical element to ensuring the long term security of the program.

Motion No. 17 essentially talks about the labour force attachment rule. The current provisions require very little participation in the workforce, in fact as little as a few months over the course of two years. I think this is important because members of the NDP have been getting up all day and making comments that in fact what the government is intending to do does not reflect what Canadians have been saying. During the consultations many Canadians have said that the current requirements of labour force attachment were not strong enough.

Now, with the changes put forward in Bill C-2, workers do have to demonstrate a slightly stronger attachment to the workforce to be eligible for the disability benefits. The measure will not affect current recipients of the CPP disability benefits. Under the proposed changes, workers must have made contributions in four of the last six years compared to the current requirement to work in two of the past three or in five of the past ten.

Again, it is also very important to make note of this. The new coverage rules are still more generous than the original rules of the plan.

Prior to 1987, workers had to contribute in five of the past ten years and also in at least one-third of the years from their 18th birthday in order to be eligible for disability benefits. We have seen the progressivity of the plan. The new coverage rules are still more generous than the original rules of the plan.

The NDP has continued to focus on the disability aspect of the plan. Persons with disabilities are not being singled out. The CPP changes are only one aspect of the government's broad agenda focusing on persons with disabilities. It is also important to note that the federal and provincial governments are moving forward on a number of other strategies that will enable persons with disabilities to participate more fully in the economy and society.

With respect to the CPP disability, the chief actuary analysis also points out that 75% of the proposed changes to keep the contributions to 9.9% are on the financing side and only 25% are on the benefits side. It reflects the message from Canadians during consultations to go easy on the benefits side when fixing the CPP.

With respect to Motion No. 18 put forward by the NDP, as worded the provision would be temporary in nature and would only be helping contributors who receive a benefit beginning in the period from 1999 to 2003. This would be entirely unfair to other contributors, especially the future generations who will be paying for these pensions through their contributions.

We hear contradictions in the House where the NDP continues to put forward the intergenerational argument and how it is unfair to future generations. Here we have an amendment put forward by the NDP which would in fact do the exact opposite and put a greater burden on future generations.

If it was made a permanent feature of the program, the doubling of benefits as the NDP is asking for would also require an approximate doubling of contributions. This would be unacceptable to the governments that are the stewards of the program, both federal and provincial governments, and also to Canadians who have asked us to ensure that the plan remains financially sustainable.

The point has been made over and over again by various members of the opposition parties other than the NDP that if we want more benefits, premiums have to go up. The NDP have not formed any sort of argument that would deal with the premium side of the program. Canadians have said to deal with the plan, ensure that it is sustainable, ensure that we go easy on the benefits side and ensure that it is balanced off with the premiums.

With respect to Motion No. 19, I must stress that the proposed changes will not affect those who currently receive combined disability-survivor or retirement-survivor benefits. The CPP has always had limits to restrict the stacking of benefits. The proposed changes bring the limits on combined benefits more in line with their original intent.

It is also important to understand that the combined benefit provisions will have no effect on survivor recipients who are not also receiving another CPP benefit, that being a retirement or a disability pension in their own right.

It also may be of interest for hon. members of this House to know that there will be further examination of the role of the CPP survivor benefits in the next round of the federal-provincial review of the plan. The object is to ensure as far as possible that all CPP premiums remain relevant to the needs of Canadians.

I have one final motion to comment on in the time remaining. Motion No. 22 put forward by the NDP asks that we delete the requirement for increased contribution rates to cover the costs of new or increased benefits. It is an important statement of principle and something that Canadians have continued. It has certainly been very effectively communicated during the consultation process that the federal and provincial governments agree that any future benefit enrichments must be paid for, that we should never again put the security of the Canada pension plan at risk by enriching benefits without being willing to pay for them.

On the intergenerational issue, we must ensure the sustainability of the plan. We must do so not only for the seniors who are receiving the benefit now, the near seniors, the middle age Canadians, but for young Canadians. The changes we have made to the CPP will ensure that young people are not saddled with an unbearable burden.

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6:05 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

Mr. Speaker, I noticed that many of the amendments before the House simply want to delete items from the bill. They do not try to improve and they do not try to compromise. They think that whenever they do not like something, it should be scrapped. They do not think about the ultimate consequences and ultimate responsibility. We have to be careful that we do not throw the baby out with the bath water.

We in the Progressive Conservative Party believe that the CPP must be saved. Canadians deserve it and future generations of Canadian deserve it as well.

Our plan for the Canada pension plan which our amendments speak to has to be discussed today.

We know that payroll taxes kill jobs. The communique “The Economist”, speaks to the fact that if we lower payroll taxes it will ultimately create jobs, but also that if we raise payroll taxes it will kill jobs.

The Canada pension plan provides a survivor's benefit. The government wants to raise the premiums by 73% and we know that will kill jobs. We believe that premiums have to be increased in order to save the Canada pension plan and make it viable. Canadians want the Canada pension plan.

The Canadian Federation of Independent Business is possibly one of the most democratic business organizations in the country. It polled 88,000 of its members. They said unequivocally and categorically that the Canada pension plan is part of the small business owner's plan for retirement. It is something that has to be saved. However, they know that payroll taxes will continue to kill jobs.

There is a $14 billion surplus in the EI fund. For the government not to connect that with the increase in CPP premiums will actually kill jobs. We propose that if we have to raise premiums, we must at a minimum lower EI premiums. When the chief actuary visited the issue with respect to the EI fund, it was said that the EI fund would be sustainable at $2 and would still be able to withstand a severe recession.

The government has lowered EI premiums by a mere 20¢, from $2.90 down to $2.70. During question period today I was afraid that the Prime Minister would say that he was going to raise them back up to $2.80 because he was a little confused about the reduction. Reducing the premiums to $2.70 is only a drop in the bucket. We need to get the premiums down to somewhere near $2. This would be good for small business. It would be good for Canadians. It would save the Canada pension plan and would ensure that we saved jobs.

Some of the amendments before us do not recognize the need for change. They do not recognize that we just cannot play around with people's pensions. We cannot eliminate what we do not like without any regard for the consequences.

Actually, this lack of responsibility reminds us of another party's plan for the Canada pension plan. I think you know who they are, Mr. Speaker.

The Reform Party tried to save face by presenting a few amendments to the bill. In fact, we agree with both measures that it proposes. But let us remind everybody that this is not a change of heart.

The Reform Party wants to eliminate the Canada pension plan and jeopardize one of the fundamental pillars of our retirement savings program. I agree with a lot of initiatives that the Reform Party presents from time to time, but there are some initiatives which are just plain wrong and some people might even say just plain kooky.

Reform's plan to eliminate the Canada pension plan would ensure that 325,000 disabled Canadians whose only source of income is the Canada pension plan would not have access to income from the CPP. The party to my left wants to scrap the Canada pension plan and leave 325,000 disabled Canadians without a source of income. I say shame on them. If that party were the government, the Canada pension plan would be over.

I campaigned for 36 days during the election this past May. Mr. Speaker, you did as well. You were there talking about the different issues in the election. We talked about the need to cut taxes, pay down the debt, get our fiscal house in order and restore fiscal conservatism to this House and to this country.

During the 36 days of the campaign, CPP came up on occasion. Every single day of that campaign I asked the Reform candidate who ran against me what Reform was going to do about the $500 billion unfunded liability. Unfunded liability. What are Reform going to do with the $500 billion unfunded liability? Mr. Speaker, when I was on the campaign trail, and maybe when you were there as well, Reformers did not have an answer. They did not have an answer for what they would do with the $500 billion unfunded liability.

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6:10 p.m.

An hon. member

What are you going to do with it?

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6:10 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

We are going to save the Canada pension plan.

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6:10 p.m.

An hon. member

That does not solve your problem.

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6:10 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

We are going to raise premiums as well, compensated with a reduction in EI premiums.

I want to talk about the Reform plan with respect to the $500 billion unfunded liability.

During the recent hearings on this the leaders of the parties sat down and spoke. I am sure people might have seen some of this on television when the finance minister actually presented his plan to save the Canada pension plan and then the Leader of the Official Opposition presented his plan to save the Canada pension plan.

The finance committee in turn asked the Leader of the Official Opposition about the $500 billion unfunded liability. What did he tell that committee? I shake my head about the answer. He actually told the committee that it was a complex issue and it would take too long to explain Reform's plan for the $500 billion unfunded liability.

You would think that after 36 days on the campaign trail and the whole summer and part of the first session of the House that Reformers would at least have some form of an answer about what they would do with the $500 billion unfunded liability.

I have read Reform's platform, and guess what? It is not in the platform either. This fresh start is in fact a false start.

I also want to talk about this very issue in terms of how this party—

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6:10 p.m.

The Deputy Speaker

Not for very long. You have 50 seconds.

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6:10 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

Mr. Speaker, in order to sum up, I will just make a couple of small points.

That party does not understand the necessities or the wants of small business. The Canada pension plan is what small business wants and Reform does not support that. They want to have a flat tax which would mean that ultimately small businesses, because they are private enterprises, would be rolled into taxable income.

We have talked about some very important issues today with respect to pension plan review. We do not support some of these amendments because they do not propose any kind of alternatives. We need to save the Canada pension plan, but we need to provide small business with tax relief by cutting EI payroll taxes.

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6:15 p.m.

The Deputy Speaker

Order, please. It being 6.15 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

People's Tax Form ActPrivate Members' Business

November 27th, 1997 / 6:15 p.m.


Garry Breitkreuz Reform Yorkton—Melville, SK

moved that Bill C-214, an act to allow taxpayers to inform government of their views on levels and priorities for the expenditure of tax revenues and to provide for parliamentary review of the results, be read the second time and referred to a committee.

Mr. Speaker, the bill I have introduced will be welcomed by all parliamentarians interested in improving their tools of representation.

A democracy functions best when people are well informed and through their representatives conduct the affairs of the country according to their will. Information must be open and available. Procedures must follow acceptable patterns. Decisions must be open and available for close scrutiny and all the information must be easily accessible.

This bill provides for one of the most important pieces of information that could be made available to government leaders to be in their hands.

People should have a mechanism by which they can tell government how they want their money spent, the levels at which they want their taxes and what their spending priorities are.

I can see the excitement building in this place as I describe this bill.

A government which is truly democratic would want to carry out the will of its people. It would not just ask for support and direction every four years, it would want to receive that support and that input on a regular basis. Look at the excitement. That is what my bill is designed to do in a very important area.

The people's tax form act, which I have introduced in the House of Commons, has wide public support. It has been around for a couple of years. People up and down this country have been able to look at it.

I only wish that we had three hours to debate this. I am sure many people would like to have input. However, we only have one hour. I only wish that the rules of the House required that all private members' bills were to be votable and I will work toward that end. That is a change which needs to be made. Otherwise we are just wasting our time.

What would Canadians think if they only had one store that they could shop at, which they were forced to shop at? What would Canadians think if money were taken out of their pay cheque for the store manager to fill the store with all the things which he thought were important, not what Canadians thought they needed? What would Canadians think if they went to the store to shop and not only could not get what they wanted, but would be forced to buy and to take the things they did not need, did not want or could not even use?

Does that sound far fetched? Not really. Any Canadian who pays taxes already shops at this store. It is called the Government of Canada. At the end of every month we have to give our money and take whatever it decides to give us without having any input into it.

The government forces Canadians to pay high taxes and give taxpayers what the government wants, not necessarily what taxpayers want or need. Pandering politicians and meddling bureaucrats often will say trust us, we know what is best for you, just keep handing over the money and be quiet.

Taxpayers do not get any choice about the programs and services the government delivers to the taxpayers, to the people of Canada. If they do not like it, they are told to vote for someone else in the next election, as if that is the only way to go.

It is time for us to change the way we do business, to democratize the system. It is time to give taxpayers more say and some choice about how their money is spent.

That is why I think the people's tax form is a tax form taxpayers would really like to fill out. Why? For starters because it is voluntary and because this is no ordinary tax form.

Taxpayers would like filling out this form because it would let taxpayers tell the government where they thing the government should spend the thousands of dollars each and every taxpayer sends in every year.

The people's tax form would let them identify the government programs and services taxpayers do not want to support with their tax dollars. Does that not make sense, Mr. Speaker? I see your excitement.

I think Canadian taxpayers would say this is the kind of schedule that should be included in every Revenue Canada tax kit. Canadian taxpayers want to send a message to Ottawa. They do not just want to send them the money.

Passing my bill into law would give Canadian taxpayers an opportunity to send Revenue Canada the people's tax form every year.

This is the essence of my people's tax form act. It proposes that government would design a form which would be included in every tax kit.

Completion of the people's tax form would be voluntary. All the forms returned to Revenue Canada would be analysed and summarized and a copy of the analysis would be sent to every MP and senator. The analysis would be tabled in both the House of Commons and the Senate.

The analysis would be automatically referred to the standing committee for review and reported back to the House. The duties of the standing committee are included in the bill, including a provision allowing the tax form to be amended.

I first heard about the idea for this people's tax form in an article in the Fraser Forum November 1995. It was written by Professor Filip Palda of the school of public administration, University of Quebec.

He wrote, and I think it is very important that I include this quotation, that every year millions of Canadians go through the agony of filling out their tax returns, their T-1s. Filling out these T-1s is painful, T-4s, whatever. It is painful because people have no sense that they control where their money is going. He suggested we add a sheet to this form that gives people that control. This sheet, which he called the people's tax form, would list the categories of government spending and invite taxpayers to decide what fraction of their tax bill should go to each category. Churches and charities call this earmarking. The people's tax form would allow citizens to earmark where they want their tax dollars to go.

The Library of Parliament examined Professor Palda's concept for me and proposed alternatives for implementing the idea. I bounced the idea off a number of other MPs and Professor Palda was kind enough to give me his comments and advice as well.

In the spring of 1996 I tested the people's tax form in my own constituency and finally sent instructions to lawyers in the House of Commons to draft a private member's bill.

On December 10, 1996, I introduced the people's tax form act. It says it is an act to allow taxpayers to inform government of their views on levels and priorities for the expenditure of tax revenues and to provide for parliamentary review of the results. That is the essence of this tax form act.

More than 500 of my constituents were kind enough to fill out and return the early version of the people's tax form act, proving that given the opportunity, taxpayers do want to have a direct say in how the federal government spends their money.

These results were very interesting but they need that mechanism and they do not have it at the present time.

Based on where they want their tax dollars directed, the top five government programs most strongly supported by my constituents were old age security, health care, justice and the RCMP, Canada pension plan, debt reduction, but also there are areas that they did not want their money to go to. The most strongly opposed areas were official bilingualism. Does that surprise you, Mr. Speaker? How about funding for special interest groups? Over 90% objected. Gun registration just did not fly. Foreign aid was not a priority. Multiculturalism was opposed by over 80%.

Maybe I should not have mentioned those results. There are interest groups in this country that are going to lobby the government to veto this bill, to not have any part of it. Is that not unfortunate?

My test of the people's tax form found support in an article in Western Report , dated May 6, 1996. It read head of the Canadian Taxpayer's Federation, now the hon. member for Calgary Southeast, said the people's tax form is a great idea, and he would like to see it adopted as an advisory measure. He went on to say, and I quote: “If the government would compile the results and then be measured against it, it would wrest control of the budget away from interest groups”. I am honoured to have had this MP second this bill when I introduced it on September 29.

My colleague's reaction was very similar to Professor Palda's. Again I quote: “When I suggest the people's tax form to my academic colleagues I get a shocked reaction: `But that's putting power directly into the hands of the people who know nothing about government. Why would you want to do that?”'.

I come back to my introduction. We live in a democracy. Surprise, surprise. Do those people not have the right to give us that kind of information? I really agree with Professor Palda when he says giving Canadians the power to directly influence government spending would create a panic in the ministries responsible for that spending and among the groups that benefit from that spending. Special interest groups could no longer ignore public opinion.

In the last four years the Liberal government has cut billions of dollars in transfers to the provinces for health and education and programs that my constituents strongly support and yet this same government spends billions on grants and handouts that my constituents strongly oppose. I suspect it is not just in my part of Saskatchewan. I suspect that opposition is across Canada.

The problem is that once the Liberal government extracts money from the taxpayers by force, then it can spend tax dollars any way it wants. Tax dollars are not the Liberals' money to do whatever they wish. All of a sudden the excitement is dying down, Mr. Speaker. What is going on?

This is the truth, though. Listen. Constituents are telling their members of Parliament what their priorities are and either the government is not listening or it does not care, or the message is not clear enough for it. How about making it a little clearer and support this tax form act and get that information into our hands.

Special interest groups, big corporations and paid lobbyist have been able to hijack the agenda and persuade politicians to give them tax dollars and implement programs that most people do not feel are high priorities. It is obvious the people want politicians to cut grants and handouts to special interest groups and big business and thereby help preserve funding for pensions, health care and law and order.

Somehow the Liberal government does not seem to be getting the message. Everybody seems to be disappearing out of here now. They just do not want to hear this. The people's tax form act will make sure the message gets through loud and clear.

Our tax system focuses only on collecting money from people and without allowing them a real say in how it is spent. The current system rewards groups that make the most noise and individuals and organizations that make the biggest donations to the political party in power, not the people who are paying the bills. We ought to listen to them.

Why should taxpayers be forced to support political programs and activities that the vast majority do not believe in? The people's tax form act will give Canadians a chance to make their priorities the government's priorities.

As I draw near to the end, I want to give some other positive spin-off benefits that we would have. It would foster debate across Canada. It would increase interest in the affairs of government. It would combat apathy. It would decrease public cynicism.

Second, if they see government wanting their opinion and listening to it, the attitude of many people that government does not care about what they think would begin to change. If they see government actively seeking information and following the direction, it would restore faith in their institutions.

Third, it may even help unity problems. That is not a stretch because people in all parts of this country feel alienated. They would again feel like they belonged. It would be a small step in the right direction.

Fourth, Canadians would find citizenship much more meaningful. They would be willing to accept more responsibilities.

I have listened to some of the objections from people in Parliament. One of the first is that common people are not capable of knowing how to best spend the money. That is not so. I detect that here in Ottawa the elite have the attitude that they know what is best for the country. The people out there know.

There is an objection that this initiative may cost too much money. It would actually save money. Will Rogers said it well: “Lord, the money we spend on government” and it's not one bit better than what we got for one-third the money 20 years ago. That is the truth.

I seek unanimous consent not to make this a votable item but to refer it to the committee for further study. There is very wide support for this initiative among the members of this House and among Canadians in general, and it is a non-partisan issue. Mr. Speaker, I would like you to ask for unanimous consent because this is supported on all sides of this House.

People's Tax Form ActPrivate Members' Business

6:30 p.m.

The Deputy Speaker

It is my understanding that the hon. member is asking for unanimous consent to refer the subject matter of the bill to the Standing Committee on Finance for further study. Is there unanimous consent?

People's Tax Form ActPrivate Members' Business

6:30 p.m.

Some hon. members