Madam Speaker, I would like to thank the member for Peterborough for splitting his time with me.
I want to commend the New Democrats for putting forward this timely motion. Clearly the issue of underfunded pension and retirement plans for Canadians is a looming concern and a looming challenge in our country, so the NDP has done some service here to public debate and awareness in putting forward this motion. We may disagree on certain aspects of its proposal, but it is a timely measure and a timely motion on which to have this debate.
Clearly Canada is in the most severe economic downturn in 60 years. We are not alone in this. The International Monetary Fund has said that, for the first time in 60 years, the world's economy will contract this year. This has never happened before, in the last 60 years. This will be the first year in 60 years that global GDP will decline. I think that illustrates the breadth and depth of the global circumstances in which we find ourselves.
That said, I believe our government has acted swiftly on this crisis. Since this crisis started to unfold last autumn, the Government of Canada has reacted quite quickly in the intervening eight months. It has put forward an economic action plan that I believe has mitigated some of the downturn in which we find ourselves.
We have provided approximately $62 billion in stimulus over the next two years. That includes stimulus that was triggered by provincial governments on part of our government's budget. That represents over 3% of GDP in stimulus funding in the next two years. I think that illustrates our government's quick reaction to this crisis, and we are starting to see some of the effects of that stimulus package take hold.
Our good economic position has also been recognized internationally. I quote from World Bank President Robert Zoellick, who said that, by global standards, Canada is in an enviable position. He said:
I think a lot of people would like to change places with Canada.
However, clearly, despite our government's interventions in the economy, private sector pensions and retirement savings for Canadians are an issue, and because of the downturn in global equity markets and global debt markets, many private sector pension plans in Canada are underfunded and many companies are struggling to recapitalize those plans.
It is important for Canadians to realize that only a fraction of the private sector pension plans in Canada are federally regulated. The vast majority of private sector pension plans are provincially regulated. I believe less than 10% of all private sector pension plans in Canada fall under the federal regulator. The balance fall under provincial regulation. As a result of these areas of jurisdictions, we do not have the biggest impact on pensions in the private sector .
That said, within our own responsibility of federally regulated plans, we have taken significant measures to try to mitigate the undercapitalization of retirement savings of Canadians. We have doubled the length of time that companies have to recapitalize their employees' pension plans, from five to 10 years. We have also increased the age, from 69 to 71, at which a Canadian who has an RRSP has to convert that RRSP to a registered retirement income fund.
We have also reduced, as a result of the downturn in equity markets and debt markets, the amount of money that seniors 71 years of age and older need to withdraw from RRIFs every year by 25%.
These are some of the measures we have taken. In addition to these measures, we are engaged with our provincial and territorial counterparts in the discussion of retirement savings and private sector pensions. On May 25, at a provincial, federal and territorial meeting, we struck a working group on retirement adequacy. This group will meet for the duration of this year and will report by the end of the year on the state of Canadians' retirement and pension investments.
In addition, the federal regulator, the Office of the Superintendent of Financial Institutions, is continuing to monitor the situation and has indicated that she will act, if necessary, to protect the private sector pensions of Canadians.
We have done a lot of work to help mitigate the downturn in equity and debt markets globally that has impacted Canadians' RRSP investments, their RIFF investments, and their private sector pension investments.
I think the good news is that on the public pension side, on the public retirement safety net, we are in a very good position. The Canada pension plan is fully capitalized. It is fully there for Canadians. The most recent reports, audits and actuarial reports on this pension indicate that the pension is sustainable for years to come.
We have a generous old age security and guaranteed income supplement regime for Canadians as well. Both of these provide income for seniors that is at some of the best levels internationally. I am quite proud of that, because seniors have worked many years to build the kind of society we have today, and these retirement funds, these public programs, ensure that they will be taken care of in retirement.
I note that old age security and guaranteed income supplement provide up to $14,000 a year for a single senior in Canada, and that the Canada pension plan provides up to $11,000 a year for a senior in Canada. Combined, these three different programs provide up to $25,000 a year for seniors in Canada. Clearly, on the public pension side and in the two programs of old age security and GIS, we have a generous and well-funded social safety net.
I just want to speak briefly about some of the specifics in the New Democrats' motion with respect to pensions and retirement security. One of the five things that the motion calls on the Government of Canada to do is to expand and increase the Canada pension plan, the Quebec pension plan, old age security and the guaranteed income supplement.
While the government may want to consider enhancements to these programs at some future date, I think we also need to be cognizant of the fact that the current generation of working Canadians pays significantly higher premiums into the Canada pension plan than past generations. Canadians today pay a combined employer-employee contribution of 9.9% of their earnings into the Canada pension plan, almost 10% of their earnings. Increasing that amount hurts the current generation of working Canadians and would not be fair across the generations.
So I think we need to be careful about simply proposing to increase Canada pension plan payouts, because we may in fact hurt younger generations of Canadians who are struggling to pay their bills and to make their start in life.
The second thing that the motion demands of the Government of Canada is to establish a self-financing pension insurance program for private sector companies and private sector workers. This is certainly a debate that has started to take place with some of the recent bigger public pension managers in provinces like Ontario. It is debate that could take place through this working group that has been established by federal, provincial and territorial ministers. I think we should wait for the outcome of those consultations and those deliberations at the end of this year.
Let me comment on the third demand, which is to move private sector pension recipients to the front of the line when it comes to the order of creditors. I think we need to be careful about this issue as well, because companies have difficulty accessing commercial paper, raising capital in debt markets, raising capital in equity markets in the context of this downturn. I think we want to be careful not to hurt or affect their ability to raise that capital by changing too quickly or by changing inadvertently the order of creditors, which may have an impact on that ability to raise capital.
I note that the two final requests in this motion concern the Canada Pension Plan Investment Board. I would just say that I think it is important that we do not subject the Canadian pension plan to too much political inference. However, I will conclude by saying that I, too, am concerned that, in recent years, executive compensation packages have, far and away, exceeded the general rate of income growth for average workers in Canada.
When I hear that presidents and CEOs of certain companies are getting compensation in excess of $15 million to $20 million a year, I wonder if that is in the broader public interest.