Mr. Speaker, I am pleased to offer my comments on Bill C-2 as we take part in this very colourful and hotly debated third reading today.
In my remarks I want to emphasize how we are earning the confidence of Canadians in the Canada pension plan that will be there for them. I want to talk about how this bill is a comprehensive package that will maintain the security of our citizens.
First, it should be made clear to all of us that the Canada pension plan is a defining feature of the quality of life in Canada. In the three decades since the plan was introduced by the Liberal government of the day, the Canada pension plan has become firmly established as a the cornerstone of our social policy.
This is not just some monument to enlightened thinking in our past. It is a key part of the planning for tomorrow's retirement for virtually all Canadians outside of Quebec and with its Quebec counterpart provides a very uniform portable protection from coast to coast.
In the last few years, however, concerns have been expressed about the viability of the Canada pension plan. A leading magazine, Maclean's , put this in sharp perspective a few months ago. It polled Canadians and found that two-thirds of our fellow citizens were not confident that the Canada pension plan would be around when they needed it.
Canadians heard statements like the one made by the Canada pension plan's chief actuary and they were concerned. I believe we all know that he projected that at current ratios of contributions to benefits paid, the Canada pension plan would be exhausted by the year 2015. Their concerns were rooted in more than finances.
Expert analysis showed us that the rules of the plan had to be updated to reflect the realities of today's world as well as tomorrow's. The facts were clear, the need for action obvious.
This government has acted to preserve the Canada pension plan for all Canadians. The changes to the plan that are before this House in Bill C-2 are not the product of tinkering in Ottawa. They are the result of a long and wide-ranging process of public consultation that began during our last term in office. They represent a complete and balanced package.
This process of consultation was jointly conducted with our counterparts in the provincial and territorial governments and professionals in Canada's actuarial and insurance professions. The consultations reached out to the representatives of social planning organizations, seniors, youth and persons with disabilities as well as interested private individuals.
In short, these consultations involved a large number of Canadians who had views and concerns about building a stronger Canada pension plan. One of the clearest messages that Canada's governments heard during the consultations was that Canadians want and need the Canada pension plan.
To hear some people talk, you would swear that the Canada pension plan was an anachronism, a throwback to the sixties. Those people should get out of their ivory towers and listen to Canadians. People on the streets of this country would tell them something quite different.
Canadians told us in no uncertain terms to preserve the Canada pension plan, change it if necessary, but preserve it. We heard them. We listened and the result is this Bill C-2.
This bill is more than an effort to address today's valid concerns. It launches a plan for the future. Bill C-2 recognizes how different our economy and our society have become since the year when the plan began. It makes the changes necessary to sustain the Canada pension plan.
Three-quarters of those changes are on the financing side of the ledger. They respond to the gap between the contribution rates and the benefit payouts. In fact, I am sure that members recall that the chief actuary in the Canada pension plan projected that contribution rates would have to increase to 14.2% of income covered by the plan by the year 2030, that is unless changes were made.
This government and our provincial partners agreed that 14.2% of income was too high. We knew that it would be more than Canadians would be willing to pay. Therefore, we went to work.
We looked at what experts and at what ordinary citizens alike told us as we set out to rebalance the relationship between the Canada pension plan income and expenses.
One key part of the response is addressed in Bill C-2 through the proposals that would increase contribution rates over a seven-year period.
In this way, contributions will increase each year and reach 9.9% of covered income by the year 2003. Then, we will hold the contributions at this rate indefinitely.
Some hon. members have been quick to leap to their feet with shouts of tax grab. The reality is quite different, and I want to set them straight.
Canada pension plan contributions are not a tax. They are contributions toward pensions. They are an investment by Canadians in their own future. That is hardly a tax. It is planning prudently for tomorrow.
Let me add more information on this point. Canada pension plan contributions will not go into the government's general revenues. Canada pension plan contributions will not go to anything other than the Canada pension plan.
Let me make another point to show how hollow tax grab claims are. Are contributions to company plans taxes? Of course not. In fact, both the Canada pension plan premiums and company pension plan contributions reduce the taxes we pay.
The simple fact is this. Both are investments in the future and I think it is important that Canadians understand that. Bill C-2 is very, very clear. These contributions will not get mixed into some government coffers. They will become part of a separate investment fund. An independent body will manage and will invest this money on behalf of a plan and its contributors.
Those investments will go into a diversified securities portfolio and should earn higher rates of return than the status quo. That improved investment performance should help us lower the long term contribution rate by providing more income to help pay the benefits for future generations.
Opposition parties in this House have consistently avoided providing a comprehensive alternative. Each is unable to say how they would meet our obligations to people receiving benefits today, those who expect to do so soon and those who have many years to go in their working lives.
This government and our counterparts in the eight provincial capitals have a plan. It is called Bill C-2 and it is right on the agenda. Bill C-2 is about ensuring a sustainable, affordable and fairer Canada pension plan. It is about giving peace of mind to Canadians who are getting pensions now and for those who are looking ahead to receiving pensions in the future.
This bill is about ensuring fairness between the generations in our country so that our children and grandchildren do not have to pay as high as 14% of their earnings.
As I hear the comments about this or that aspect of Bill C-2, I find nothing that shakes my conviction that this is a sound piece of legislation. It is balanced. It is fair. It is the right direction for us to go. It represents the complete package that Canadians told us they want.