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.


The House resumed consideration of Bill C-2, an act to establish the Canada Pension Plan Investment Board and to amend the Canada Pension Plan and the Old Age Security Act and to make consequential amendments to other acts, as reported (with amendment) from the committee; and of Motions Nos. 10 and 12.

Canada Pension Plan Investment Board ActGovernment Orders

3:05 p.m.

The Deputy Speaker

When the House interrupted the debate to proceed with question period the hon. member for Compton—Stanstead had the floor. He has eight minutes remaining in his remarks.

Canada Pension Plan Investment Board ActGovernment Orders

3:05 p.m.

Progressive Conservative

David Price Progressive Conservative Compton—Stanstead, QC

Mr. Speaker, just before we started question period I was talking about the totally unacceptable tax burden on small business.

Small business people are the real job creators in Canada. The tax burden for small business in Canada is higher than in most competing jurisdictions. Small business owners have to pay both employer and employee premiums. This makes it very difficult for Canadian businesses to survive in today's global economy, which means fewer jobs and fewer job opportunities for Canadians.

Study after study around the world have shown that high taxes kill jobs. Jurisdictions with low relative tax rates have high economic growth and strong job creation. Where the taxes are high, growth is low and there are fewer jobs. That is a Polaroid picture of Canada.

Within Canada our high payroll and corporate taxes form a barrier to jobs and growth by taxing businesses for every new job it creates. It is a job creation tax. That is unheard of. The real solution is to create the conditions under which job creation by the private sector is sustainable over the long term.

That is why it makes sense to cap increases to the Canada pension plan at 10.25%. If the government is serious when it states that changes made to Bill C-2 will prevent premiums from rising above 9.9%, there should be absolutely no problem with requiring parliament to review the changes if premiums ever approach 10.25%.

The CPP is a fundamental part of the Canadian social safety net, an obligation that the government must honour. Capping the CPP at 10.25% and reducing EI premiums are ways of returning the CPP to financial viability and protecting the investment Canadians have already made in the plan.

The Reform Party believes that the only way to deal with this challenge is to abandon our obligation to retiring Canadians and eliminate the CPP. This approach is without merit. The current government solution asks people to put even more of their paycheques into its hands every year. This approach is without merit. Canadians do not need a multibillion dollar tax hike.

Most experts agree that the best solution is to make the CPP fully self-financing. In other words, enough new money should be directed into the plan today to ensure that it can pay the benefits due to those who retire down the road.

It is possible to put more money into the fund and offset the cost by reducing EI premiums. This plan has merit and it makes sense. It would mean more money going into the plan without asking Canadians to pick up the tab and without creating more threats to job creation.

Small business is the engine of growth in the country. We should encourage this engine to grow and run smoothly instead of forcing it to run out of gas and stall. The House can and must make a difference.

Canada Pension Plan Investment Board ActGovernment Orders

3:10 p.m.


Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, the first motion has to do with what some have called a retroactive change. It is important for members to know the dimensions of the change.

Currently an employee pays 2.925% on their insurable earnings. The proposal in Bill C-2 would increase that to a full 3%. In terms of dollars an employee earning $20,000 a year would be required to pay another $12.71. It is important to keep the dimensions of the change in focus. For example, if an employee were making $35,000, the ceiling for insurable earnings, the increase would be marginally over $17. To keep it in perspective it is important to know the numbers.

The hon. member for Calgary—Nose Hill raised the issue with regard to this change and the difficulty it may cause. All members should know the increase that took effect in 1997 was part of the consultation process. It was a change that was discussed. It was also approved by the federal government and two-thirds of the provinces representing two-thirds of the population. This change was seen as an important starting point with regard to providing fuller funding for the CPP.

The intent of Motion No. 10 was to delete that requirement. It is important for Canadians to understand that if the change is not made in 1997 the amount to be paid to get up to the full funding rate would have to increase. It is a matter of a nominal change in 1997.

For that reason, although there may be a case where temporary workers require adjustments, those businesses had consultations with the finance department as early as last spring and were advised of the change. This is not a surprise to business at all.

The second motion in this group has to do with preventing the new CPP contribution rates from coming into effect unless the increases are offset by EI premium reductions. In this area a lot of comments have been made by members which require clarification.

With respect to the EI surplus, it tends to connote that $12 billion will be sitting in some account somewhere, a surplus that is available to be spent for EI benefits or programs. That is not the case. There is a notional account, an EI account, which keeps track of the premiums received and the benefits paid out but as a requirement or a recommendation that was accepted by the government from the auditor general the EI premiums are included in operating revenues, in the general revenue account.

One would only have to ask what to do if there were a deficit in this notional account. How would that be handled? I think that is a very important question to understand. If in an economic downturn the benefits paid out exceeded the premium base of the reserve there would have to be some cross-subsidization or some underpinning by other government revenues to be able to continue to fund and pay out benefits.

I understand that the EI fund actually was in a substantial deficit position in the last downturn of the economy in about the same magnitude as the surplus is now. The amount of the surplus that is being referred to is not really out of line.

I think the Minister of Human Resources Development's announcing a $1.4 billion cut in EI premiums, from $2.90 down to $2.70 per $100, is an indication that when it is sustainable and when it can be delivered and can be counted on by business there will be reductions in the EI rate as long as it is clear that those reductions in the EI premium can be sustained.

Much of the discussion on this motion also has to do with some of the funding requirements of the CPP by taking some this notional surplus. As I explained, since there is no $12 billion surplus that will be sitting in some account somewhere to use for whatever purposes we want, actually what we are talking about is the size of the deficit.

If we were to take funds out of the notional EI account we in fact are taking moneys out of the revenues of the government and therefore increasing the deficit. I suggest that also is inconsistent with an important position of Canadians that we have to get our fiscal house in order. We have to deal with the deficit. Also, what the finance committee has heard time and time again across the country through its exhaustive prebudget consultations is that Canada must continue to deal with the national debt.

The debt, the deficit, it does not matter what we call it, the fact is we have a mortgage which we must continue to pay down on an orderly basis to have our house in order. It is the reason why we have low interest rates. It is the reason why we have one of the strongest records of economic performance and the strongest projected economic growth in the G-7. It is because we have been getting our fiscal house in order.

Members should be very careful about suggesting that somehow there is $12 billion floating around that we could somehow use.

Another very subtle point but I think salient in this regard is that one of the principles that came out from the consultations, agreed on by consensus of the witnesses and by the federal government, the provinces and the territories, is that today's seniors will be insulated from the changes to be made to the Canada pension plan in order to make it sustainable for generations to come.

If we were to somehow take moneys out of the general revenue of the government and increase the deficit what we are basically doing is asking today's seniors to pay something with regard to the CPP changes. We are asking today's seniors, who already have their pensions fixed, who already have their retirement income in place and who have absolutely no major source of other opportunity, to change their current retirement situation.

Members must remember that seniors do pay taxes. Because they retire does not mean they have opted out somehow. They continue to pay taxes on their pension income and on other investment income and other transfers from various sources. They are taxpayers. To the extent that we take money out of general revenues and increase the deficit or reduce spending on some other areas or have to increase taxes, which I doubt will happen, it would therefore be asking seniors to bear some of the burden of the changes in the CPP.

I think it is important to also emphasize this aspect of insulating today's beneficiaries under the CPP from having to pay for some of the portion of funding future benefits of today's workers.

It has to do with the fact that they came through two wars and the depression of the 1930s and 1940s. Their working careers were smaller than we have enjoyed today. Their opportunities to build up a nest egg for their retirement were restricted.

In the real world there is a process of arbitrage and fairness and equity. The CPP was built on that process of fairness and equity and today's seniors will be protected by these changes.

In conclusion, they must be assured that they will not be negatively impacted by the changes being proposed under Bill C-2.

Canada Pension Plan Investment Board ActGovernment Orders

3:20 p.m.

Stoney Creek Ontario


Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I would like to spend a few moments speaking on Motions Nos. 10 and 12.

Motion 10, proposed by the member for Calgary—Nose Hill, intends to delete the requirement for workers and their employers to make extra contributions for 1997, which are the maximum of $24 each for employers and employees.

The contribution rate for employers and employees in 1997 is 2.925% and employers have been submitting their employer-employee contributions based on that rate.

Section 59 of Bill C-2 amends the existing schedule of the contribution rates to require employers and employees to pay the 3% in 1997.

Again I state that the motion deletes the mechanism for collecting the extra contributions resulting from the amended contribution rate for 1997.

The motion would require that the extra contributions be collected starting at the beginning of 1997. Since it is impossible to undo the past, the motion is in fact eternally flawed. I am sure that is not the intent of the member who has put forward this amendment.

Let me spend a few moments talking about what the departments have done to deal with the anticipated increase in the CPP premium.

Departmental officials did meet with several staffing groups concerned about the 1997 rate collections. Revenue Canada did reflect the new higher rate in the 1997 withholding tables, which it puts out each December.

Putting new tables in mid-year is quite expensive for the government and administratively cumbersome for employers. The government did try to make employers aware of the possibility that the 1997 rate could be changed during 1997 so that employers had as much notice as possible to deal with this situation and they could take appropriate action.

As I stated, Revenue Canada alerted employers in December 1996 and contained this information in the 1997 withholding tables.

The Minister of Finance indicated in his February 14 statement that the extra money for 1997 would be collected at tax filing time. Revenue Canada again informed employers in May of the procedures for collecting the 1997 premiums. Again, finance officials talked to a number of employers and their associations over the spring and summer.

There have been ample attempts by the departments and the governments to inform employers that in fact this anticipated increase is coming and tried to work with them to deal with the administrative concerns they may have had.

I just want to talk for a second on the mechanism to collect. Employers file, every February, a T-4 reconciliation statement that is used as a final year end reconciliation for EI, for Canada pension plan premiums as well as other taxes that are collected and withheld from employees.

This T-4 reconciliation form is the form that would be used to collect the 1997 premiums. There is no additional administrative burden put in place as a result of having to collect these 1997 premiums in 1998.

The changes that were made do eliminate that administrative burden and if we had made those changes mid-stream we would have caused much greater hardship on the business community.

With respect to Motion No. 12, it attempts to prevent the new CPP contribution rates from coming into effect for 1997 through 2000 unless the increases are offset by decreases in employment insurance contributions from employers and employees.

It is clear that there is no link between CPP and EI. They are separate programs that serve purposes and rates are established independently. EI premiums nevertheless have been reduced since 1994 and they will fall again from $2.90 to $2.70 which is a $1.4 billion expenditure on behalf of the government. This completely offsets the 1998 CPP rates for workers and more than offsets the increase in CPP rates for employers.

The government has committed over and over again that it will continue to lower EI premium rates as soon as it can. However, the overwhelming message from Canadians throughout the entire consultation period was that the government needs to take action now to fix the CPP so that the contribution rate does not rise above 9.9%.

The second part of the motion deals with the steady state contribution rate. The motion intends to prevent the steady state contribution rate from exceeding 10.25% regardless of the chief actuary's calculations. Establishing a cap of 10.25% is clearly inconsistent with the CPP financing principles set out in the act. The principles require a constant contribution rate that can be sustained. The 9.9% steady state contribution rate is based on prudent assumptions and we are therefore confident that the rates will not exceed this level.

There was also some discussion earlier from the Conservative Party about the so-called tax grab. Let me be very clear that it is not a tax grab. This is a contribution of savings toward pension. When these contributions are made and collected by the government, they go into a separate fund. They do not go into consolidated revenues; taxes go into consolidated revenues. They will go into a separate fund and will be invested like other pension plans. That is what Canadians have asked us to do and that is what Bill C-2 will do.

Under the existing legislation, CPP contribution rates are already set to climb above the 9.9% rate. In fact, the rates are scheduled to reach 10.1% in 2016, so we are reducing the amount that the existing contribution rates would end up being if we did not bring forward Bill C-2.

The chief actuary has shown that if we do not move fast, the Canada pension plan will be bankrupt by 2015 and the rates will have to soar to 14.2% in 2030, which is a 140% increase. No one on this side of the House is saying that the CPP premiums are not going up. Clearly they are going up but they are going up so that we can sustain the plan. They are not going up as high as they would have if we had done nothing. For the first time in a long time the administration of this government has taken action to save the CPP plan.

The same cannot be said about the prior administration which sat there and watched the CPP go into disarray. It sat back and said it would do nothing, that it should be left to become someone else's problem. We do not want that to happen. We are reflecting what Canadians have said. We had the consultation period. Bill C-2 reflects what Canadians have told us.

The responsible thing to do to avoid bankruptcy and truly intolerable rates is to put forward Bill C-2 to ensure the Canada pension plan stays solvent and provides the security Canadians are asking for.

The hon. member from the Conservative Party continued to talk about the increases in the CPP premium. He referred to an $11 billion tax grab. Let us be very clear. He fails to mention that because of the changes that have been made in this bill, premiums would ultimately be $11.5 billion if we compared it to the existing schedule.

When we talk about doing something for future generations, when we talk about ensuring the pension plan is solid, when we talk about doing it in a very balanced manner, and when we look at the premium increase versus the changes on the benefits side, we will find on review of Bill C-2 that we have met those criteria. We have ensured that the concerns of Canadians have been reflected.

The provinces have played a very large part as joint stewards of this plan in the federal-provincial negotiations. We have an agreement that is clearly a balanced approach that will ensure the Canada pension plan will be there for Canadians well into the future.

Canada Pension Plan Investment Board ActGovernment Orders

3:30 p.m.


John Solomon NDP Regina—Lumsden—Lake Centre, SK

Mr. Speaker, I rise this afternoon in opposition to this particular amendment which is being put forward. I want to rise in opposition as the small business critic for the New Democratic Party.

I look at this proposal and I see that the amendments they are putting forward in many ways do not bode well for small business. Small businesses have a lot of challenges right now. They are faced with the pending increase in interest rates. Small business people have always had challenges with respect to capital acquisition.

We are also looking at the huge increase in profits by the banks year over year. The only conclusion one can draw from that is that not only are they receiving a huge amount of increased profits and revenues from consumers in this country, but also from the small and medium size businesses which employ the vast majority of Canadians.

Business is also faced with the challenges of the GST collection on behalf of the federal government. This is a burden the government has put on them.

Finally of course the issue that we will be dealing with this afternoon is the payroll taxes as they are called. They are basically programs which assist small business owners to provide some level of support in terms of a pension plan, or unemployment insurance plan, or disability plan for their employees. By the way, a vast number of businesses and owners of small businesses employ those who own the businesses so this is something that is very important to them.

What the amendment outlines in terms of this particular bill is it proposes that any increase in the contribution rate with respect to the CPP for the years 1997 through 2000 shall not come into effect unless the cumulative increase in anticipated revenues under the Canada pension plan resulting from the changes in the contribution rate after December 1996 are offset by at least a cumulative decrease in anticipated combined employer and employee contributions under the Employment Insurance Act for those same years.

I have some information which I would like to share. The Canada pension plan has been a very helpful program for small business. If small and medium size businesses did not have such a plan, they would be forced in many ways to commit greater resources, which are limited to them, to establishing their own type of pension plan. As we know, establishing a pension plan for a small number of employees on their own would be very costly and prohibitive. There would be less pension coverage for employees who work in the small and medium size businesses.

I want to share with members in the House today some information which was provided and accumulated by Statistics Canada on self-employment. Self-employment grew rapidly both in absolute and relative terms between 1989 and 1996. During this period self-employed workers accounted for more than 75% of total job growth. Seventy-five per cent.

Throughout the period 1989 to 1996 the number of business owners increased by 25%, by a margin of 457,500 compared to an increase of 1% or 132,700 in the number of employees. In essence small business has employed more people over the years. Most of those who became self-employed during this period worked alone and did not hire other workers.

We are concerned about the rapid increase in CPP premiums. As the small business critic and spokesperson for the New Democratic Party caucus, we believe that contributions should be increased at a slower rate over a longer period of time to allow self-employed people to adjust their businesses and to allow small and medium size businesses to adjust their forecast and financial analysis to meet these increased payroll taxes.

I believe the majority of business people want to continue in the program. That is the information I have received. But the information I have also received is that they want more time to ensure that they are able to adjust their revenues.

As we know, small business cannot announce a 25 or 50 basis point increase in the charge for their services like the banks can. If they do, they just do not seem to stay in business very long. Whereby the banks are large businesses and are basically oligopolies and can do whatever they want with respect to charging these very same small and medium size businesses increased rates at the drop of a hat. They do this on a fluctuating basis without a lot of rationale, far too often costing small business and self-employed people a great deal of anxiety, anguish and concern, not to mention the fact that it jeopardizes their business and their way of doing business.

Saskatchewan registered the highest proportion of self-employed workers in 1996. Saskatchewan is the province I represent. If we exclude agriculture from these numbers, actually British Columbia had the highest incidence of self-employment in 1996.

It is extremely important to us in Saskatchewan as in other parts of the country, but more in particular because of the agricultural economy. Many farmers have incorporated and they are paying their own contributions. They are self-employed. In many cases family members work in the incorporated partnerships, farm operations or agricultural operations and they pay their Canada pension plan premiums as well.

People who are self-employed pay not just the employee share, but the employer share. It is a very big concern for Saskatchewan business people in terms of a quick increase in premiums in a short period. This underscores our position in the NDP that we should take lower increases over a longer period of time.

According to the most recent data available, average earnings among self-employed individuals in 1995 were 91% of average wages and salaries. The distribution of earnings among the self-employed is more polarized than the earnings of paid workers.

In 1995 approximately 23% or 392,800 self-employed workers earned less than $10,000. Almost one-quarter of self-employed workers earn less than $10,000 a year. That means they are very restricted in terms of discretionary revenues and discretionary income to meet these higher increases in Canada pension plan premiums.

About 45% of self-employed workers in Canada earned less than $20,000 a year. At the other end of the distribution, only 4% of self-employed workers earned in excess of $100,000. In 1995 the average earnings of self-employed women were slightly higher than one-half of their male counterparts.

Underlying the distribution and earnings of self-employed workers is the amount of time self-employed individuals work. Compared to paid workers, self-employed workers are more likely to work either short or long hour work weeks. But part of the earnings gap between male and female self-employed workers is undoubtedly attributed to the fact that male self-employed workers worked a longer work week. In 1996 male self-employed workers worked an average of 13.3 hours more per week than their female counterparts.

This particular proposal in my view is also detrimental to women, whether they are in small business or not. The increases and changes in CPP will affect women most in a very negative way.

Most of the growth in self-employment between 1989 and 1996 was voluntary. It is estimated by Statistics Canada that only 12% were pushed into self-employment because there was no other work available. This particular statistic means that we have a trend in our country whereby more and more people are being frustrated in terms of finding employment and therefore are going into small business. We also have a trend where more people are interested in working for themselves because they have not had a proper deal with respect to their employers.

I have a number of things I want to raise but the final thing I will talk about is this. I want to agree with the Liberal member for Mississauga South when he said that these increases are of concern to him. They are of concern to us in the NDP. We agree with him on this point, that we should not put the EI surplus into the Canada pension plan benefits. That jeopardizes the employment insurance program which was set up to insure workers who are unemployed. We feel that is not only a cross-subsidization but really a wrong way to deal with it.

In ending my remarks, I want to say on behalf of the small business community in Canada that we oppose this amendment. We would put forward lower increases in CPP benefits over a longer period of time to meet the needs of a very important program.

Canada Pension Plan Investment Board ActThe Royal Assent

3:40 p.m.

The Speaker

Order, please. I have the honour to inform the House that a communication has been received as follows:

November 27, 1997


I have the honour to inform you that the Hon. Peter de C. Cory, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate chamber today, the 27th day of November, 1997, at 4 p.m., for the purpose of giving Royal Assent to certain bills.

Yours sincerely,

The House resumed consideration of Bill C-2, an anct to establish the Canada Pension Plan Investment Board and to amend the Canada Pension Plan and the Old Age Security Act and to make consequential amendments to other acts, as reported (with amendment) from the committee; and of Motions Nos. 10 and 12.

Canada Pension Plan Investment Board ActGovernment Orders

3:40 p.m.


Stéphan Tremblay Bloc Lac-Saint-Jean, QC

Mr. Speaker, I am pleased to have this opportunity to make a few remarks on this bill, an act to establish the Canada pension plan investment board and to amend the Canada pension plan and the Old Age Security Act and to make consequential amendments to other acts.

Bill C-2, which the finance minister introduced on September 25, is a reform of the Canada pension plan, among other things. This reform has three main components. The first one deals with the level of capitalization of the plan which will increase from two to five years of benefits, as suggested by the minister. The second one provides for the optimization of the plan's performance through the establishment of an investment board. And the third one is a series of changes to certain benefits, such as the disability benefits.

Implementation of these measures depends on Bill C-2 going through the parliamentary process. In order to assess this reform, I would like to give the House if I may a brief background of the CPP. The plan goes back to 1966, when nine provinces opted in, while Quebec created its own plan, the Quebec pension plan, which is also being revised.

The Canada pension plan pays benefits totalling about $17 billion a year. This includes survivor and disability benefits. Right now, the plan has enough money in reserve to pay two years worth of benefits, which amounts to some $39 billion. Of course, this reform will have a significant impact on Canada pension plan premiums.

I will now talk about the various amendments, starting with Motion No. 12 put forward by the Conservatives, which says that, for the years 1997, 1998, 1999 and 2000, any increases in the contribution rate provided for in the bill shall not come into effect unless they are offset by an equivalent decrease in employment insurance contributions.

The motion also says that the contribution rate for self-employed persons shall not exceed 10.25% except if the chief actuary is of the opinion that a higher contribution rate is warranted.

We support the idea of a decrease in employment insurance contributions to offset the increase in CPP premiums. However, the cumulative decrease proposed by the Conservatives is equivalent to a 80 cent decrease in the EI contribution rate. Such a decrease is not compatible with the Bloc's position, which calls for an enhancement of the program in addition to a significant decrease in the contribution rate, because we think that the reform went to far.

Now my mouth is watering in anticipation of what I am about to say on the other amendment, this one being proposed by the Reform Party. We thought we had seen everything, but this tops it all.

The amendment proposed by the Reform Party calls for repeal of the section of the legislation allowing retroactivity of the increase in contributions for 1997. At this time, the agreed CPP contribution level is 5.85% and the act will allow this to be retroactively raised to 6% for 1997. The Reform Party members are against this retroactivity.

I feel that, in politics, at some point one has to see beyond the end of one's nose. I was pleased to be able to speak at the first reading of this bill. Opposition parties are always described as being there to get in the face of the government. I do not believe this is the case. The Bloc Quebecois is in favour of such a bill, except that I note that its vision is rather a long term one. If I want to receive benefits some day, at some point, we have to start realizing that there must be more money in the fund.

Yes, I am in agreement with this reform. It imposes a surcharge on taxpayers, in that people will have to contribute more. It is like another tax. I know that the people will not be delighted at that, but we have to look several years down the road. We have to be able to look at our children and tell ourselves that it would be worthwhile for them to have the same advantages we have had all our lives.

What Reform is telling us is that this is a tax increase. This makes no sense; they are playing politics with blinders on. I find this very frustrating. We in this House see our share of short-sighted policies. I need only think of the position taken by the Minister of the Environment, who, very quietly, will take a position much like that of the United States. It is true they say greenhouse gases are serious business, but what about future generations? I am not just thinking about myself. Policies being formulated now will have an effect in 20 or 30 years when I will be 40 or 50. I think they should give thought to future generations when they establish policies. Policies on sustainable development as they are called.

If I were the son of a Reformer or rather a Reform member, I would be wondering how I could look my children in the eye and say “Sorry, my education did not cost me a lot. When I finished university, I got a job and it did not take long. When I retired, I had a pension plan and one heck of a retirement. Unfortunately, you my son, will have to pay for your university education”. What is more, this morning in committee, a Reform member said he was opposed to loans and bursaries. I am not going to get into this, but as I said, the Reform approach is sort of “You are going to pay dearly for your university education. When you get out, you will not have a job, and that is no problem. When you retire there will be no pension, because the coffers will be empty”.

I do not understand. I am not into partisan politics. I do not want to divide the Bloc Quebecois, the Reform Party and the Liberal Party. I am talking much more of a generational thing. I feel sorry for the poor people my age who vote for the Reform Party in Alberta and British Columbia. Perhaps it is time they looked at their policies.

Finally, this shift to the right is of great concern to me because such policies widen the gap between rich and poor. It is like saying to young people: “Our generation was rich, but we don't care if you have to live on a shoestring”. This makes me very uncomfortable. When I talk about the gap between rich and poor, I am talking not only about long term policies, but also about things that are happening right now. My colleague from the NDP mentioned the banks. One of my Bloc colleagues will soon propose a reform package to encourage banks to become more socially involved in our communities.

I believe it is time for policies that are more concerned with social issues. This shift to the right will lead us nowhere. It only redistributes the money so the rich get richer while the poor get poorer. The poor must resort to violence to be heard, leading to total anarchy. I do not want that kind of society. I want a fair system.

Your generation enjoyed a rather fair and equitable system. My generation and that of my children deserve a system that is just as fair.

I intend to keep Reform members on their toes. As long as they keep moving such phoney amendments—I have no qualms about calling them phoney—I will rise in this House to take them to task.

Canada Pension Plan Investment Board ActGovernment Orders

3:50 p.m.


David Iftody Liberal Provencher, MB

Mr. Speaker, it is my pleasure today to speak briefly on the motions before the House and the debate about the Canada pension plan in general.

Having sat on the finance committee and having heard from Canadians both on the larger question of the general finances of the country leading up to our budget and on the CPP, it has provided me with an opportunity, I believe, to speak to a number of points and to add some clarifications.

The member for the New Democratic Party, the critic for small business, referred to a number of points with respect to the Canada pension plan contributions and the effect on small business. Indeed, it is true that it will have an effect.

I think it is important to point out a number of features within the tax arrangements between the provinces and the federal government on the CPP question. That is to say, that with some of the tax measures that are currently available, there is possibly a $900 increase in the Canada pension plan between the employer and the employee. After tax it is more like around $700. I believe those features have to be brought out with respect to small business and for the assistance of small business.

Speaking about small business, the member for the Conservative Party, who spoke eloquently earlier here in the Chamber, talked about the plans of the Conservative Party with respect to unemployment contributions and tying that into the CPP. It is important to remind the House—and I am sure it is not lost on all the members here and those who were here between 1988 and 1993—that the current leader of the Progressive Conservative Party voted many times and repeatedly to raise contributions to a level of $3.30 per $100 of earnings against the small business people and employees.

What we have done in the four short years on that particular question with respect to employment contributions is lower it, indeed with the most recent changes a few days ago, to $2.70. Taken all together over the past four years, this puts $4.2 billion back into the hands of small business people in Canada and their employees. This is an important contribution. As was pointed out by the parliamentary secretary earlier in the debate, we will continue to work toward that goal.

It is really a false assumption to say that we have this large and looming surplus in the employment fund when, as members know, previously, around 1989-90, we had a deficit. Was it proper then? I would like to ask the opposition if it was immoral, as some had suggested at the committee table, to take money now from the surplus? Was it immoral at that time, for example, to ask Canadians to pay that deficit fund under the EI fund which accounted for billions of dollars?

It is prudent practice in terms of consolidating the revenues of the Government of Canada and to balance those out. Certainly in times of surplus, last week we made a $1.4 billion contribution back to the employees. If it runs into a deficit financing position again, obviously we would be prepared to back that up and to support that.

Referring to the CPP specifically, one of the things the Reform Party has not done to address this important debate is the primary antecedent or variable that shapes this whole discussion on the Canada pension plan. Thomas d'Aquino, President of the Business Council on National Issues, for example, when he came to the table of the House of Commons, specifically asked the opposition parties what they were prepared to do with the $600 billion debt that was on the table momentarily and what we are going to do with this liability over the next 25 to 30 years.

There have been no constructive proposals brought forward in this regard. Most certainly the plan of the Reform Party for this super RRSP may benefit a few but it certainly is not going to help the majority of Canadians who make contributions at an average of $3,000 a year. It certainly said nothing, absolutely nothing, about the $600 billion liability which we are trying to address in this formula.

It is very interesting that even in the province of Manitoba, recent reports from Stats Canada, and reported in the local newspaper in Manitoba The Winnipeg Free Press , that the average contribution in Manitoba for RRSPs was less than $3,000. Surely these contributions are not safe enough to provide that template, that safety net for all Canadians into their future. It is just not there.

In other words what I am saying is that the ceiling we have employed at this point in the RRSP contributions of $13,500 is exercised and enjoyed by only a few. The plan for the RRSP will not do that. This says nothing about the absence of a disability plan or some compensation for widows.

The Canada pension plan and the long term proposals we have put forth to the House and through the committee are responsible plans. It should be acknowledged that yes, the plan has fallen short of its goals and its objectives. No one could have foreseen, certainly the crafters and drafters of these documents could not have foreseen, a reasonable person could not have foreseen in 1965, 1967 and 1968 that successive generations of adults would not be having larger families than we currently have, two or three children per family. This is the central feature. Demographics cannot be lost in this debate in terms of their effect on ability to pay.

This is what we are trying to do by responding to the auditor general, to outside consultants' reports and by looking at the overall view and the long term health and prosperity of the country. What we are doing now will provide that template to make sure those people who are 60 years old now, those who are turning 50 this year and in 10 years will be thinking more acutely about their retirement, whatever their arrangements are and whatever packages are as a combination of their work benefits, family inheritances, RRSPs, are secured into the future for their retirement. Further, the younger generation, those for example between the ages of 30 to 40, can have the degree of certainty to know that they will need to have a secure pension plan into the future as well.

I want to conclude my comments by saying that over the next number of months and in the upcoming budget we are responding to the needs of small business in Canada. The recent reductions in the employment insurance, the changes in the CPP to provide a stronger stability and predictability in financial planning for small business, the reduction in interest rates as well are helping small business and keeping the economy moving and growing. This is particularly so in Manitoba where we are enjoying record growth in our exports.

I believe the amendment is wrong. I believe the motion by the Conservative party to bring these two important programs together is a misleading one. It will not be helpful to small business and ultimately will not be helpful to Canadians.

Canada Pension Plan Investment Board ActGovernment Orders

3:55 p.m.

The Deputy Speaker

Is the House ready for the question?

Canada Pension Plan Investment Board ActGovernment Orders

3:55 p.m.

Some hon. members


Canada Pension Plan Investment Board ActGovernment Orders

3:55 p.m.

The Deputy Speaker

The question is on the motions in Group No. 5, which are deemed to have been demanded and deferred.

Accordingly, the question is on the motions in Group No. 6, Motions Nos. 11, 13. 14, 15. 16, 17, 18, 19 and 22. These motions have been deemed moved, seconded and read.

Canada Pension Plan Investment Board ActGovernment Orders

4 p.m.


Lorne Nystrom NDP Qu'Appelle, SK


Motion No. 11

That Bill C-2 be amended by deleting Clause 59.

Motion No. 13

That Bill C-2, in Clause 61, be amended by

(a) replacing line 3 on page 31 with the following:

“20. The amount”

(b) deleting lines 8 and 9 on page 31.

Canada Pension Plan Investment Board ActGovernment Orders

4 p.m.

Progressive Conservative

Jean Dubé Progressive Conservative Madawaska—Restigouche, NB

Motion No. 14

That Bill C-2, in Clause 61, be amended by replacing lines 8 and 9 on page 31 with the following:

“(2) For each year beginning in 1997 and ending in 2006, the amount of a Year's Basic Exemption is $3,500.”

Canada Pension Plan Investment Board ActGovernment Orders

4 p.m.


Lorne Nystrom NDP Qu'Appelle, SK


Motion No. 15

That Bill C-2, in Clause 67, be amended by adding after line 36 on page 36 the following:

“(4.2) Employer contributions for a self-employed person earning less than the prescribed threshold income shall, for the years 1999, 2000 and 2001, be calculated on a progressive scale based on annual income in accordance with the regulations.

(4.3) Every regulation made pursuant to subsection (4.2) shall be laid before both Houses of Parliament within the first fifteen days of the next session after the date it is made, and the regulation shall remain in force until the day immediately succeeding the date of prorogation of that session of Parliament and no longer unless during the session it is approved by resolution of both Houses of Parliament.”

Motion No. 16

That Bill C-2 be amended by deleting Clause 68.

Motion No. 17

That Bill C-2 be amended by deleting Clause 69.

Motion No. 18

That Bill C-2, in Clause 71, be amended by adding after line 23 on page 41 the following:

“(4) For the purposes of subsections (1) and (2), the Year's Maximum Pensionable Earnings for the years 1999, 2000, and 2001 shall be two times the amount calculated under this Act.”

Motion No. 19

That Bill C-2 be amended by deleting Clause 76.

Motion No. 22

That Bill C-2, in Clause 94, be amended by replacing lines 35 to 45 on page 73 with the following:

“year being generally constant.”

Canada Pension Plan Investment Board ActGovernment Orders

4 p.m.


Lorne Nystrom NDP Qu'Appelle, SK

Mr. Speaker, we are dealing here with nine different motions, most of them in my name and one from the Conservative Party. I only have 10 minutes, so I just briefly want to touch on the motions in my name on behalf of our party.

Motion No. 11 relates to the new investment fund that is being established by the legislation. The amendment is to put other objectives into the fund in terms of where it is to be invested. Right now the only objective is to maximize the return for the contributor. That is a very laudable objective. In addition, we believe there should be some other objectives, such as investing in the Canadian economy, in industries and sectors that would create more jobs for Canada.

The model would be la Caisse de dépôt et placement.

The objectives of the Caisse de dépôt in Quebec were quite adequate for a long time; they supported job creation and economic growth. The Quebec economy grew stronger and stronger thanks to the Caisse de dépôt.

We must have similar principles and goals for the Canada pension plan.

Motion No. 11 would create some of the goals and objectives.

Motion No. 13, is extremely important to members of the NDP. This is the one that would reindex the year's basic exemption. In the Canada pension plan there is a basic exemption of $3,500 which has been indexed over the years. That indexation is now going to be eliminated.

When the Canada pension plan was formed back in 1966 the basic exemption was approximately $400. People making less than $400 would not contribute to the Canada pension plan. The government of the day and the Parliament of the day in their wisdom decided to index that $400. Now it has gone up from $400, to $500 to $1,000, to $2,500 and now up to $3,500. Low income people are not making contributions to the CPP on anything they earn up to $3,500.

Now, the government, despite the advice of a lot of people in the country, has decided to deindex that basic exemption so low income people will be paying more and more into the Canada pension plan. That is why we have put forward these amendments and that is why the changes are regressive.

Across the way there are Liberals who are ashamed of this change. I am sure that if you could speak out, Mr. Speaker, you would be ashamed that low income people in Kingston are paying more and more into the Canada pension plan. Now, that is not the tradition of Lester Pearson and Paul Martin, Sr. and the progressive Liberals of the 1960s that brought in a Canada pension plan that was progressive. That is gone.

That is why these amendments are not supported by the governments of British Columbia and Saskatchewan which have the good fortune to have NDP governments which are very enlightened and very progressive.

Motion No. 15 is of great interest to my colleague from Regina—Lumsden—Lake Centre. He spoke very eloquently on the previous motion which is very similar to this one. This deals with the problem of the self-employed who are going to be hit very hard by the changes to the CPP. The premiums are going up from 5.85% over six years to 9.9%. The self-employed person will have to pay both the employer and the employee contribution of 9.9%. That is going to be very difficult for self-employed people who are on the lower income scale.

For a wealthy accountant from the Toronto or Mississauga area who is making $200,000 or $300,00 a year as a self-employed person, it does not really matter. However, it is very difficult for the small businesswoman who is struggling along at $20,000, $30,000 or $40,000 a year, to pay 10% of her income into the CPP.

My motion will make this contribution progressive as well. The lower income people who are self-employed will pay proportionally less and a wealthy lawyer or accountant from Mississauga will pay proportionally more. Who could oppose that outside of the wealthy who come from Mississauga? And he is a Liberal.

I am sure in the days of the old progressive Liberals like Paul Martin, Sr. or Pickersgill or Pearson, they would never have dreamed of doing this to the self-employed people. I am sure they would not. That is another motion I present to the House today.

My colleague from Winnipeg North Centre is extremely interested in Motion No. 16 which would restore the benefits to where they were since there will now be a reduction in benefits. This reduction will affect women the most, especially low income women. That is very regressive. And—

Canada Pension Plan Investment Board ActGovernment Orders

4:05 p.m.

The Deputy Speaker

I regret that I must interrupt. The hon. member will have time in a few minutes, but I have to interrupt the proceedings at the moment because we have received a very important message.

Message From The SenateGovernment Orders

4:05 p.m.

The Deputy Speaker

I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bill: Bill C-22, an act to implement the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction.

A message was delivered by the Usher of the Black Rod as follows:

Mr. Speaker, it is the desire of the Honourable Deputy to His Excellency the Governor General that this Honourable House attend him immediately in the Senate Chamber.

Accordingly the Speaker with the House went up to the Senate chamber.

And being returned:

Message From The SenateThe Royal Assent

4:15 p.m.

The Deputy Speaker

I have the honour to inform the House that when the House did attend his honour the Deputy to His Excellency the Governor General in the Senate chamber, his honour was pleased to give, in Her Majesty's name, the royal assent to the following bill:

Bill C-13, an act to amend the Parliament of Canada Act—Chapter 32.

Bill C-22, an act to implement the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction—Chapter 33.

The House resumed consideration of Bill C-2, an act to establish the Canada Pension Plan Investment Board and to amend the Canada Pension Plan and the Old Age Security Act and to make consequential amendments to other acts, as reported (with amendment) from the committee; and of Motions Nos. 10 and 12.

Canada Pension Plan Investment Board ActGovernment Orders

4:15 p.m.


Lorne Nystrom NDP Qu'Appelle, SK

Mr. Speaker, before royal assent I was discussing Motion No. 16. I suggested that it is a very important motion because it restores the benefits to their current levels. Many people will experience a cutback to their benefits under the legislation. It will make accessibility to benefits more difficult. It is a step in the wrong direction.

Motion No. 17 has been moved by the NDP under my name. It would restore the old formula for the calculation of disability benefits under the CPP.

Unfortunately the Liberals across the way in their new conservative style have decided to make it more difficult for disabled people to collect benefits under the Canada pension plan. They are hanging their heads in shame.

Disabled people are finding it more difficult to get benefits. This is happening at a time when we are experiencing economic recovery in the country. The so-called Liberal government is taking it out on the disabled.

I would be willing to sit down if the Liberals would get up to explain why there is an attack on the disabled. I am puzzled as to why the party of Paul Martin Senior and the party of Lester Pearson would do that kind of thing. It is amazing. They are going after those who are most vulnerable in society. They are making accessibility to disability benefits more difficult.

I plead with the government to accept this reasonable amendment to return to the formula that currently exists in the Canada pension plan for the disabled to receive benefits.

Motion No. 18 is also very interesting. It is a departure from the current Canada pension plan. Currently there is a maximum of $35,800. Above that maximum people do not make any further contributions on their earnings. What actually happens is that the person who is making $35,800 pays as much into CPP as a senator, a member of Parliament, the Minister of Finance or Conrad Black, who is a friend of the Minister of Finance.

I ask again if that is fair. I ask the hon. member for Abitibi if that is fair. That member is a free spirit. He should be rising in the House and saying that it is not fair.

My motion would make it more progressive. It would ensure that people who make more money would make contributions on the money they make above $35,800 a year. Some might say this is a radical idea that could not be sustained.

The upper limit for contributions to the United States pension plan is $85,900 Canadian a year. That is over two and a half times higher than what it is in this country.

Let us make it more progressive when it comes to people who are making $50,000, $60,000, $100,000 or $150,000. As members of Parliament we should be paying a bit more of our income into the Canada pension plan to make it more progressive. It would be more progressive than the contribution rate for low income people. It would be lower. It would not be 9.9% but much lower than that.

Turning to Motion No. 19, there is a cutback in benefits to women. They want to restore the formula so that low income people receive the same kinds of benefits they are getting today.

I am not asking for too much. The economy is starting to turn around. Why penalize women? Why penalize the disabled? Why cut back on survivors benefits? The death benefit is being cut back from about $3,500 to $2,500. Again many widows are receiving that benefit. Once again it is an attack on women.

My Motion No. 22 is self-explanatory. In a nutshell those are the motions I moved. There is also one Reform motion in this grouping.

This group of amendments would restore progressivity to the Canada pension plan. I would like to see one or two progressive Liberals, one or two so-called left wing Liberals or pink Liberals, getting up in the House of Commons to offer a bit of support to a couple of these amendments.

The member for Abitibi may do that. He used to be a Conservative MP. Now he is a Liberal MP. Why does he not continue that move toward the left by getting up and supporting some of these progressive amendments. It would be good for his constituents and good for Canada.

Canada Pension Plan Investment Board ActGovernment Orders

4:20 p.m.

Progressive Conservative

Jean Dubé Progressive Conservative Madawaska—Restigouche, NB

Mr. Speaker, I would like to correct the hon. member. This grouping contains a Conservative motion as well as his amendments.

I have the pleasure to propose an amendment to Bill C-2, based on the principle of equity for all Canadians.

As it stands, Bill C-2 freezes the basic annual exemption at the $3,500 level. I wonder on which planet the authors of this bill live, but they seem not to know the word “inflation” over there. It reminds me of the George Orwell novel 1984 . Whenever the characters in that book wanted to get rid of a reality, they would ban the use of the word depicting that reality.

However, we all know that this is not how things work in the real world. Everybody knows that it is not because Bill C-2 ignores inflation and its impact on low income workers that inflation will disappear.

Bill C-2 in its present form does not provide for a review of the basic exemption. How much do you think the $3,500 of today will be worth in 2017? In 2037?

In clear terms, workers who think they can manage with this exemption will gradually get smothered by inflation.

The government pretends that freezing the year's basic exemption at $3,500 accounts for as much as 1.4% of the premium decrease, but in fact such a case cannot be considered as a real premium decrease of 1.4% since they will end up paying a higher premium on higher income.

Is this what we call creative taxation?

The government should not have the power to change a fundamental and essential program such as the Canada pension plan without explaining to Canadians all the consequences of the changes.

However, that is exactly what it is doing because it does not explain the impact of this deindexation of the basic exemption and it does not specify which Canadians will be affected.

The freeze of the basic exemption in contributory earnings will have more impact on low wage earners, particularly women, students and residents of disadvantaged areas. I should say will have, again, more impact on these people. And I thought that the message sent to the government on June 2 by several regions had been received loud and clear!

The Progressive Conservative Party strongly believes in equity. If the growth of the plan is stronger than forecasted by the last actuarial report, we could have some room allowing us to restore indexation.

We believe that there should be a mechanism to allow for a review of the year's basic exemption. Bill C-2 already provides for a review of the plan every three years. What we propose is that the year's basic exemption be reviewed also in 2006.

If we manage a return on investment comparable to the return of private plans over the next ten years, it would not be necessary to freeze the basic exemption forever. This is the only way to have some equity in this bill. We should not forget that the people most affected by the freeze on the year's basic exemption are the young, women and the self-employed, 45 per cent of whom earn less than $20,000 per year.

In fact, young people are severely affected by the reform of the pension plan. In simple terms, they will pay much more than those before them and get back only a fraction of what those before them received and will be receiving. So much for intergenerational equity.

As for women, it is a secret for no one that their socio-economic profile is generally such that they will not be able to benefit from the plan as much as men. Does Bill C-2 contain anything that may help counteract this? No.

What this government chose to include for these women is a year's basic exemption, which will gradually be eaten up by inflation. The same goes for self-employed workers who, in addition, have to bear the burden of paying both the employee's and the employer's share of premiums. The same goes for people from depressed areas struggling with horrible and outrageous levels of unemployment. The same goes for all low income earners.

There is nothing, absolutely nothing, in Bill C-2 for these people. There is nothing in here to ensure that Canadians are treated equitably, nor, for that matter, in the employment insurance program, the other major social security program, which once was the pride of Canadians.

Instead of compensating working taxpayers by reducing employment insurance premiums by a fair amount, which would help consolidate existing jobs and create many new ones, the government stubbornly insists on offering symbolic reductions and mini-reforms.

Naturally, observers agree that this is a step in the right direction. The problem is that, when I leave my riding, in New Brunswick, and head west toward Vancouver on the Trans-Canada highway, I am also going in the right direction, but I am very far from my destination. At the rate premiums are going down, I will not even make it to Regina by New Year's day.

To conclude, we, in the Progressive Conservative Party, believe in equity for all Canadians. Since this quest for equity is also one of our fellow Canadians' most serious concerns, it is essential that a mechanism be provided for in Bill C-2, that will allow the amount of the year's basic exemption to be reviewed on a yearly basis.

And because equity is a value shared by the members of this House, I encourage them all to vote in favour of this motion.

Canada Pension Plan Investment Board ActGovernment Orders

4:30 p.m.

Progressive Conservative

Elsie Wayne Progressive Conservative Saint John, NB

Mr. Speaker, I am very pleased to stand and participate in this debate on changes to the Canada pension plan. I congratulate my colleague from Madawaska—Restigouche and the other members of our Conservative Party who have mounted solid arguments and amendments to try to fix this ill conceived plan that the government has brought forward.

Also, and this is probably the only time this will ever happen, I want to commend the Minister of Finance for the amendments he brought forth yesterday. I did not get a chance to speak on them then but I was happy to see that the minister listened to our concerns about his bill and being silent on the auditor general's ability to request documentation on the CPP investment board.

As we pointed out to the House, the auditor general himself indicated that there were no guarantees in this bill that would ensure he could request the documentation that he needed to oversee the board's operation. With the amendments he submitted, the minister clarified that situation and we were very pleased that he finally saw the light even if it was for only a brief moment.

I wanted to speak today so I could talk about Motion No. 15. This motion was introduced by one of our colleagues from the NDP. It proposes that self-employed persons pay a CPP premium rate according to their incomes. We believe this is a very good idea and a very good recommendation.

One has to remember that self-employed persons are required to pay the employee's portion and the employer's portion of the premium. When rates go up even a little, self-employed persons have to bear the brunt of the entire increase. In other words, when rates go up to 9.9% the self-employed have to pay $9.90 to the government for every $100 they make. That can be very hard, especially when we know that in 1997 more than 2.5 million Canadians were self-employed.

Consider for a moment that according to Stats Canada, 45% of the self-employed earn less than $20,000 a year. At $20,000 a year you do not have a lot of disposable income left after you give so much of your pay cheque to the government. We must help those millions of Canadians who are trying desperately to earn their livings and to have their dignity.

We can help low income Canadians by lowering payroll taxes. That is the argument we bring forward today when we say that the hike in CPP premiums should be offset by reductions in EI premiums. I was very pleased to see that the minister came forth after I rose to speak in the House and lowered it by 20 cents. However, according to the actuarial report he should have lowered it by 90 cents because he will still have $40 billion in an account by the year 2004.

We can also help self-employed workers by making them pay CPP premiums according to a sliding scale based on their yearly revenue. If you make only $20,000 a year, you could pay a lower rate than someone who makes $60,000 a year. It is a small measure but it can make a big difference in the lives and the pocketbooks of many Canadians.

For the first time in our history a whole generation of Canadians is unsure that it will be able to enjoy the same quality of life its parents did.

Many Canadians worry that some of our most fundamental institutions and values such as health care and Canada pension plan might not be there for them and their families when they need it. Canadians have every right to expect the federal government to set the right priorities and policies and to chart the right course to achieve what they need for the future.

We need an innovative, realistic plan that sets new priorities for government as part of a long term vision for our future. One of these priorities is security for retirement for all Canadians and more especially the restoration of the Canada pension plan.

In 30 years the average age of Canadians will be higher than the present average age of the population of Florida, with no corresponding adjustment in temperature. A lower birth rate and increased life expectancy, along with a sharp rise in disability claims, also put new stress on the CPP. The CPP has also been jeopardized by inadequate contribution levels and inefficient plan management as a consequence of faulty legislation.

CPP funds, for instance, have been loaned to the provinces at the rate Ottawa pays on its 20 year bonds. This is less than what the provinces pay other bond holders and it is also less than what private sector plans earn. No wonder Canadians think the government cannot add.

The liberal plan to fix the CPP is basically a $11 billion tax hike on working Canadians out there and employers over the next six years. This is coupled with already high EI levels which the Minister of Finance, as I have stated, has refused to lower, the 90 cents he should have done.

What this government is doing with these changes to the CPP is a traumatic tax grab that will have a devastating effect on job creation. If we were in power, we would increase CPP contribution rates to levels adequate to ensure the long term viability of the plan. However, these increased contributions would be offset by a substantial reduction of personal income tax rates and EI premiums. This means putting more money into the plan without asking Canadians to pick up the tab and without creating threats to job creation.

We would also make provisions to finance the extra cost per year of seniors benefits resulting from demographic changes. We would also ensure that the mandate of the Canada pension trust and its trustees would be to advise the government on required contribution levels and to select the best private managers acceptable to the industry to invest the fund's growing surplus to secure long term returns.

It is most important that we guarantee all our young people today, not just the ones who are sitting in the House, but those across the country, that there will be a retirement plan for them, a Canada pension plan for them. It is up to each and every one of us to make sure this happens. Now it is our generation's turn to become nation builders. Part of that responsibility is to ensure that Canadians of all ages and all circumstances can count on a secure retirement.

I would argue that unless Bill C-2 is amended to meet the changes that our party is advocating and that the NDP is advocating as well, the Liberals will be passing the biggest tax increase this country has had in a long time and it will impact and hurt every Canadian very hard.

I urge all members of this House to consider this very seriously.

Canada Pension Plan Investment Board ActGovernment Orders

4:35 p.m.


Antoine Dubé Bloc Lévis, QC

Mr. Speaker, I was pleased to give up my turn to the member for Saint John earlier, the reason being that there is a shipyard in her riding, as there is in my riding of Lévis. This may strike you as odd, but all parties sometimes have something in common.

When I listen to her, the old saying about not having your cake and eating it too came to mind. Basically, she is deploring the fact that the population is aging and that the CPP can be expected to cost the government more. If one were consistent, one would then admit that more money needs to be put into the fund, but that is not what she is saying.

On the contrary, she is saying that it is an unwarranted and unacceptable tax hike. We in the Bloc Quebecois feel the same way. The population is aging and there will be an increase in the needs of seniors, of those retiring in the future.

But there is worse. We must not forget those to follow, subsequent generations. Earlier, the member for Lac-Saint-Jean spoke of his concerns and fears as a young person for the future.

There must be no mistake about this. The Liberal and Conservative governments should have taken action much sooner. If we look at the demographic patterns, at the statistics, it is obvious that there will a problem to resolve. It could have been foreseen and resolved much earlier, but this was not done.

We therefore find ourselves in a situation where there is a mad rush to build up the fund, to make it more efficient, more productive, as Quebec did several years ago by setting up its Caisse de dépôt et placement. The Caisse is the pride of Quebeckers. Being a staunch sovereignist, I am delighted to see that the federal government wants to copy Quebec. This augurs well because it is also an admission that the Quebec government's solutions are sometimes good ones.

But back to the amendments. Following this line of thought, Motion No. 13 is admittedly a bit special. The New Democratic Party and the Reform Party agree on something. This worries me. What is the explanation when we see people from parties with completely different ideologies agree? Why is it that they agree on that when they are at opposite ends of the political spectrum?

They are also against it. They want to have their cake and eat it too. That is not possible. There comes a time when we have to make a choice, and this choice is now before us. The Bloc Quebecois' position is that the fund for the pension plan absolutely has to be increased. That is why we cannot support amendments designed to limit the assets going into the fund. For us, it stands to reason that it should operate this way.

The other amendments have more or less the same objective, and the motives in the case of Motion No. 14 are the same. I do not have much too say on Motion No. 15. We have to admit at times that we do not understand very well. I hope the NDP members will be providing more information because, as it now stands, this amendment serious questions.

As for Motion No. 16, it calls for the deletion of the section dealing with the new rules for calculating the benefits. These rules state that the pensionable earnings average will be determined by taking the last five years, instead of the last three years as is presently done. We are against this amendment for the reasons outlined before. This would have the effect of not ensuring the long term viability of the plan.

As for Motion No. 17, I do not have any comments. On Motion No. 18, if I understood correctly, the member for Qu'Appelle wishes to increase the contributions, so that the maximum earnings would go from $35,000 to $70,000. If that is what is meant, we can announce right now that we will be against it.

As for Motion No. 19, it calls for the deletion of the clause that provides for stricter requirements on the payment of benefits in the case of combined retirement and disability benefits. There is something I do not understand in all this. When a person is disabled, it is necessarily because he or she is sick or has a disability. I think everyone would agree that a person with a disability has a higher cost of living. Equipment and facilities that generally cost more are required.

It is the same thing in the case of people who have an incurable disease. They need medication, many types of services, and people to help them. So I think we have to accept the principle that people with a disability, when they are retired, need extra support to continue to live under conditions that are as normal as possible.

So these are the main arguments. Other colleagues from my party may also have observations on this, but that is the position of the Bloc Quebecois on Group No. 6.