Madam Speaker, I will be sharing my time with my colleague, the member for Thunder Bay—Rainy River.
This motion, tabled by the member for Hamilton East—Stoney Creek, speaks to the concerns of Canadians from all walks of life that the security they thought they would have in their retirement may be at risk, or worse, gone.
The motion supports expanding and increasing the CPP, old age security and the guaranteed income supplement to ensure a dignified standard of life for our seniors. It supports establishing an insurance program for workplace sponsored plans so that in the event of an economic downturn or some other financial crisis, as we are suffering today, workers' pensions would be protected. It makes the pensions of workers a priority. If a company becomes insolvent and declares bankruptcy, the promised pensions would be paid out before other creditors, including banks, before banks could deplete the remaining business assets.
This motion also addresses the Canada pension plan. It ensures that the directors of the Canada Pension Plan Investment Board ensure that their investments are sound, that the compensation is based on competitive rates across the industry rather than allowing for overly generous performance benefits, especially as the pension fund continues to lose money.
Why is this important for my province of Alberta?
Our seniors population has been growing steadily. Between 1974 and 2005, the number of Albertans over 65 years increased by 162%. In 2005, seniors comprised over 10.5% of our population. At present, one in ten Albertans is a senior. This number rises by 1,000 people per month. The total population of seniors is forecast to double in less than 20 years.
Coupled with this exponentially rising seniors population, we are faced with the economic recession. In Alberta, as with the rest of the country, we have experienced large job losses and with that, rising personal and business bankruptcies. The past mismanagement of the CPP has made matters worse.
This motion tabled by my colleague presents solutions to address both the current problems faced by Canadians and reforms to avoid future challenges.
Why do New Democrats support expanding the CPP, old age security and the guaranteed income supplement? In Canada, the federal government provides two key supports for seniors: the old age security program and the guaranteed income supplement. These are not generous. They provide only a basic level of support premised on personal income, and where Canadians have been able to save for retirement, these benefits are further reduced.
In the past 15 years, the average pre-tax income of seniors families in Alberta increased by more than 27%. However, much of that growth was based on non-government sources, including RRSPs, RPPs and private investments such as stocks, bonds, mutual funds or T-bills.
In the good times, about 60% of seniors' average income came from sources not related to government transfers. The majority of this was from private pensions, employment earnings and investments. Approximately 62% of seniors had some form of private investment income. Almost 55% of seniors received income from other pensions outside of Canada pension plan or old age security benefits.
These sources served us well when the economy was strong. People could save and benefit from high interest rates. The stock market was bullish. Businesses were prospering, contributing to pension funds and paying out to retirees. In the past year, however, this has not been the case. Many people have lost their life savings as the markets have tumbled, leaving them without a cushion and reliant on government programs.
With a high proportion of Albertans reliant on private pensions outside of the CPP, the population is extremely vulnerable to market downturn. Because of this, we are also calling on the government to establish a self-financing pension insurance program to ensure the viability of workplace sponsored plans in tough economic times.
Canadian small businesses are the backbone of our economy. In fact, 98% of Canadian businesses are small businesses. They employ nearly half of our private sector workers. Small businesses are responsible for about 20% of all Canadian exports. They create employment, generate wealth, and serve as the anchors for our communities. In tough economic times, these businesses are suffering. Workers and the owners are left out in the cold when bankruptcies occur.
In Alberta, consumer bankruptcies jumped near 61% this past year. In Edmonton, sadly, one of the few growth industries now is bankruptcy trustees.
When businesses are forced to shut down and owners and workers lose their livelihoods, entire communities lose. Federal leadership is needed to work with the provinces to institute a pension insurance regime to ensure workers actually receive the retirement benefits they have earned, even if their employer goes out of business. Such a system could be funded by contributions from federal workplace pension plan sponsors, administered by the federal government and designed to ensure efficiency and fairness for all parties.
What happens when a business goes bankrupt and there are assets left? Should the managers continue to collect large bonuses while those who worked for years for that company are left without the pension they worked for and paid into?
We believe that workers' pension funds must go to the front of the line of creditors in the event of bankruptcy proceedings.
I know of a case personally where a couple moved into a new area which had grown up around a new company. They raised their family while dad went to work each day for 40 years until he retired. He worked hard and paid into his pension all his life. Sadly, shortly after retiring, he succumbed to cancer, leaving his wife behind to survive on his pension. Just a year later the company declared bankruptcy and the pension she had counted on could be gone. She could now lose her house. Is this fair? No.
It is for this reason that employee pension plans should come first. It is the workers who created the value of the company, and they should be first in line to receive a share of the benefits that their dedicated work produced.
Finally, we must ensure that the CPP Investment Board protects the CPP from imprudent investment practices. Measures are needed to ensure the board ends the practice of awarding managers performance-based bonuses. We need to take all necessary steps to recover the bonuses granted in 2009, and ensure that in the future, managers are only paid appropriate industry competitive salaries.
The measures provided for in this motion are critical to the security of all Canadians and are worth the support of every member of this House.