Mr. Speaker, before discussing the pertinence of the Reform Party motion, it might be worthwhile to point out that the Canada Pension Plan does not apply in Quebec, which has a parallel plan, the Régime des rentes du Québec. It compares very favourably with the Canada Pension Plan. Moreover, the current recommendations by the federal government take into account the way the Quebec plan has been administered, and the way it ought to be administered in future.
The Reform Party motion makes what seems to be a rather demagogic association between the Canada Pension Plan and the MP pension plan. If we must debate the matter of the MPs' pensions, fine, but these are two very different matters. What needs to be done in connection with the Canada Pension Plan is to assess whether the recommendations made by the government that are to be implemented are indeed necessary, pertinent and essential.
This pension plan has not been modified for some years, and today it differs greatly from what it was like initially. For one thing, the modifications to the plan must reflect our changing demographics.
Care must also be taken to ensure equity in the way the pension fund operates. At the moment, the plan covers the entire baby boom generation, those between 35 and 50 years old, like myself, and if nothing is done to change the plan, they will benefit from a far better plan than the one they have contributed to. Corrections are necessary. The people who are between 35 and 50 and who will be retiring in 10, 15 or 20 years will have to have contributed enough and we have to ensure, through increased contributions, that this is indeed the case.
On the other hand, an aspect of the government's position should perhaps be corrected and it will be perhaps at the stage bills are considered. We could have contemplated a significant reduction in unemployment insurance premiums and permitted a quicker short term increase in Canada pension plan contributions. As the result, today's young people would not have to bear the burden of the need to refloat the plan for so long.
Any reduction in unemployment insurance premiums would allow for an equivalent increase in Canada pension plan contributions. This approach would not create a negative impact on the total payroll or on payroll taxes, which can, as we know, have an effect on jobs. This morning, I read that a study by the Department of Finance estimates the cost at 26,000 jobs. There is a whole question of balance and common sense involved here. Demagoguery must be avoided.
Such a pension plan must provide for intergenerational continuity, that is, over time, as people contribute, each generation must pay its fair share to avoid having the younger generation paying excessively for the older one.
As you know, it is now much harder than in the past to join the labour force, to find a steady and well paid job. A number of considerations must be taken into account and, in my opinion, one way to make the system more equitable and to ensure that every age group contributes its fair share would have been to make up, in part or in whole, for the increase in CPP contributions by significantly reducing UI premiums.
We must also determine whether the rate of return of this fund, the Canada Pension Plan, is adequate. The government's proposal seems to be a step in the right direction, because it is patterned on the model developed in Quebec, where the fund is invested in options involving various degrees of risk, making for an diversified portfolio and an attractive rate of return.
By contrast, the Canada Pension Plan has been used to provide financial assistance to the provinces, which may be a good thing, but the plan's rate of return is totally unsatisfactory and partly explains why we currently have an inadequate reserve and why contributions must now be increased.
With a better rate of return, like that of the Régie des rentes du Québec, the increase in contributions might have been lower, although the demographics would still have had to be taken into account. So, one cannot say that, from that perspective, the government did something that was inadequate or inappropriate.
The Régie des rentes du Québec is an example which shows that, when Quebecers have control over their money, their investments and the management of their finances, they can do as well, if not better, than anyone else in Canada, North America or the world.
Quebec's expertise is such that several of the amendments being proposed by the federal government are already implemented in the Quebec plan, or are the result of suggestions made during the consultations with Quebec regarding its Régime des rentes.
It must be remembered that, in the 1960s, the Government of Quebec, which was then headed by Jean Lesage, had a certain expertise in economics. Experts like Jacques Parizeau and Bernard Landry were there at the time to advise the government. All these people helped develop a system whereby Quebec was able to accumulate a fairly large amount of money and, more importantly, a system Quebecers can now be proud of, in spite of a few minor flaws. With this system, a number of Quebecers start receiving a pension at a time when they are not yet eligible for an old age pension, so that Quebecers in general, at the exception of women at home unfortunately, receive directly a decent pension.
Quebec does have a reason to be proud. This is one system that can be held up as a model, and it is not the only one. The Caisse de dépôt et de placement, which manages these pension funds, and the Fonds de solidarité des travailleurs are other examples of various economic initiatives taken by Quebec that enable us to manage our money in a reasonable fashion.
These remarks are an indication that, were the Reform motion votable, the Bloc Quebecois would be voting against it. It says in part "that this House condemn the government for requiring Canadians to pay over 70 percent more in CPP premiums". Let us look at the reasons for this increase. Can we afford to ignore the problem and not to bail out this program, if this means the program will run out of money 10, 15 or 20 years from now?
I think this would be one way to go for Canadians affected by the plan because, as I mentioned at the start of my speech, Quebec is not covered by the CPP. It has its own plan, the Quebec pension plan. I think that, if the amount in the CPP dropped and was not replenished, Canadians would think that their government had acted irresponsibly and for this reason the measures tabled must be considered.
When people say it increases the impact on payroll taxes, and I mentioned this earlier, yes, it is true that it will have an effect. Care must be taken to ensure that this effect is minimal. My proposal to decrease UI premiums by a corresponding amount is perhaps something that could be considered and included as an amendment to the initial government proposal, so that the negative effects of the plan on employment could be kept to a minimum.
Comparing it to the MPs' pension plan begins to sound more like grandstanding, in my view. There is not necessarily any connection between the two. I think the CPP has to be looked at separately and care taken to ensure that it is an effective plan. In this regard, there are a number of points to consider.
Let us look, for example, at the proposed measures. They say that none of those now in receipt of survivors' and disability benefits or both, nor those aged 65 and older as of December 31, 1997 will be affected by the proposed changes. This is to protect the elderly. Is it being done with an eye to the upcoming federal election? The government may have had this in mind, but at least it
ensures some security for seniors and does not change the plan to which they contributed. I think this is acceptable.
In addition, they say that all CPP benefits will continue to be fully indexed to inflation. This is good news, because the federal government is following in the steps of the Quebec pension plan. The same is true for age of retirement. Whether it is the usual age, earlier or later, things will remain unchanged. Here again, they have followed the lead of the Quebec pension plan.
There is another similarity with Quebec. The fund now consists of two years of benefits owing. They want to increase this to a reserve of five years. That seems reasonable to us. Contribution or premium levels will also rise over the next six years, to 9.9 per cent in 2003, after which they will remain stable. This insures the viability of the plan. Certainly, it is never a big thrill to have to pay into a plan, but when people see the advantages it can have for them in future, in Quebec at any rate, this is something on which there is going to be a consensus, I believe, and something which people are quite prepared to live with.
There is, however, one aspect that is bad news and ought to be looked at by the government. It ought to try to find a new approach to this aspect, which is the new way of calculating to be applied to the combined pensions of people receiving both disability and survivor's benefits, or retirement and survivor's benefits. This is very bad news indeed, and I invite the government to examine it closely. This situation here is more or less the same as with the American pensions at the moment.
I will give you the example of a lady who receives a survivor's benefit because her husband is deceased. She becomes disabled, and is eligible for disability benefits. Under the present plan, this lady receives two full benefits, which is understandable, since a person who is experiencing such difficult circumstances does not deserve to have them made more difficult economically. Yet the new rules will place a ceiling on the amount this person can receive. That could mean receiving benefits of $800 a month, instead of $1,200.
I think this is a point on which we ought to do battle, in order to ensure that such an unfair situation is not created by the bill. It is unfair to penalize people who are victims of such misfortune in this way. If a person has lost his or her spouse, and then becomes disabled as well, I believe that he or she is entitled to a minimum of financial security, and cutting that person's income is not the way to go, in our view.
We are also told that eligibility for disability benefits will require greater participation in the work force. The person will need to have contributed for four of the six years preceding application for benefits.
In Quebec the plan is a little more generous: its requirements are for two of the last three years or five of the last ten. I think we will have to wait and see what the witnesses who appear before the finance committee will have to say about the consequences of this measure. It would seem to eliminate a number of contributors who will get nothing in return for what they paid. We must look into this.
For instance, someone who paid contributions for three years of the last six before his application for benefits is not eligible, which means he paid contributions but is not eligible for the plan's benefits. I think that is intolerable, and the same applies to the employment insurance reform the Liberals introduced.
This reform means that people who regularly pay their employment insurance premiums, especially those entering the labour market who have worked less than 910 hours, these people, after paying 600, 700 or 800 hours worth of employment insurance premiums will not be eligible for employment insurance.
This is intolerable, and I think that as far as the Canada pension plan is concerned, the government would do well to avoid making the same mistake.
A good thing about the Canada pension plan is the fact that Canadians will receive an annual statement of their Canada pension plan account. I think this is a way to make people responsible. They can see how much money they put in, they can plan for their retirement and ask how much they will get in benefits, how many years they still have to contribute and what impact this will have on their budget. I think this kind of specific information will be very useful to the various users of the plan.
It seems there will also be a federal-provincial review every three years instead of every five. This is a good thing. In fact, the Quebec government agrees. It means we will be able to keep a close watch on how the plan evolves and make adjustments as problems arise.
What we learn from the history of these funds-the Quebec pension plan and the Canada pension plan-over the past 20 years, is that from year to year, from one government to the next, there has been a tendency to postpone any decision making. Today, we are forced to accept a major increase in premiums. If there had been the same obligation in the past to review the plan every three years, we might have had a chance to make adjustments more regularly and it might not have been necessary to make such drastic changes. I think it would be useful to be able to operate this way.
The Reform Party's motion may have its merits as an attention getter, but it should be examined in greater detail. This is not about minor details. We are talking about some very important issues, about a pension plan that has existed for many years and will have a future for many more decades, about important decisions, and to
associate this directly with the way members of Parliament are treated smacks of grandstanding, in my opinion.
We need to turn a critical eye on the Canada pension plan. Among other things, we must ensure that performance is improved and that, if performance is improved and if the funds created perform well, the plan contributors benefit.
In this regard, even though the minister assured us earlier that this plan accrued separately, we cannot have a surplus of billions and billions of dollars accumulating as in the unemployment insurance fund. We will end up with $12 billion, $18 billion or $20 billion in an insurance plan where people contribute and employers and employees have no control over the surplus. What happens to the surplus? Will premiums be reduced?
The same thing must not happen in this plan, if its economic situation is improved.
In conclusion, the Canadian retirement income system has three pillars: the Canada pension plan, the old age security and the guaranteed income supplement. We have no strong reason for opposing the proposed reform, on the contrary, except for the points I mentioned earlier, including the benefits for persons on disability and survivors. It must complement the other pillars, like the guaranteed income supplement and the tax incentives for retirement savings.
A person earning $100,000 and paying into an RRSP will save $313 in federal tax, whereas a person earning $30,000 will receive $175, which we do not consider much of an incentive. We proposed a standard tax credit of $268.
In conclusion, the motion is not votable, but we do not think it is acceptable as it stands. If there had been a vote, the Bloc would have voted against the motion, because it lacks the sense of responsibility needed in the development of a plan like the Canada pension plan.