Madam Speaker, on October 28 I asked the finance minister a question prefacing it by saying to him that he is rumoured to be a successful businessman in Canada or elsewhere, we are not sure now. But this businessman, I said to him, is now telling our kids that he will be taking 10% of their lifetime earnings and he will manage their money so that they will get back a 1.8% return on all that money, that lifetime investment. I asked the minister that as a businessman would he put his money into a venture with that kind of a return.
The minister's answer was very instructive. He said first of all that the return that is projected is a 3.8% return, not 1.8%. This was very disingenuous of the finance minister who knew very well that his own actuarial report says that our children will indeed get only a 1.8% return on their lifetime investment. The 3.8% return he was referring to, to kind of muddy the waters, is the return that he says will be earned by his new CPP investment fund.
We just saw in the pages of the newspaper today some grave warnings by financial analysts saying that as this fund's investment is presently structured it is doubtful that it will get even such a low rate of return as 3.8%, which I might point out is not even as much as the new RRSP bonds that Canadians can buy from the Canadian government. But to get back to the point, our children for a lifetime of having to put 10% of their earnings into this CPP fund will get a return of 1.8%.
He also said that the great advantage of the Canada pension plan is that the Government of Canada stands behind it regardless of market fluctuations. I might point out that the government in fact intends to invest our money in the market, but of course we are not smart enough to do that ourselves. Only the government can do that. But then he said the Government of Canada stands behind that. Is that not reassuring?
Guess who the Government of Canada gets its money from. From us. So if the Government of Canada screws up and miscalculates and does not do its investment properly, guess who it can look to to make it up. Us. So we get to pay more in premiums, in taxes or in lost benefits. That is not very reassuring.
Then he said, using some scare tactics to keep people from looking at alternatives, that Canadians should not have to be subjected to having their retirement at the whim of market volatility, as if the stock market were the only kind of investment Canadians could make.
I just have a follow up question which I would be very pleased to have the government answer. I hope people who are watching these debates at home will answer the same question.
Your child or grandchild comes to you and says “I want your advice on some investments. You have lived a few years and have managed your money well. Now I need your advice. I have heard about a good new investment. I will contribute 10% of my salary and the fund manager will guarantee 1.8% return on my investment, a real rate of return over the years. Should I buy in?”