House of Commons Hansard #102 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was spam.


Business of Supply
Government Orders

6:10 p.m.


The Deputy Speaker Andrew Scheer

I declare the motion defeated.

The House will now proceed to the consideration of private members' business as listed on today's order paper.

Retirement Income Bill of Rights
Private Members' Business

6:15 p.m.


Judy Sgro York West, ON

moved that Bill C-574, An Act to promote and strengthen the Canadian retirement income system, be read the second time and referred to a committee.

Mr. Speaker, I am pleased to be here today to kick off the first hour of debate on Bill C-574, something that I prefer to call the pension income bill of rights.

While Bill C-574 is a private member's bill, and my first, it is also a package of proposals that has been extensively researched from a legal perspective and thoroughly vetted. It is intended to address a series of specific systemic and practical challenges facing Canada's various pension systems, both public and private.

As the official opposition critic for seniors and pensions, I have travelled across this country and I have spoken to thousands of Canadians on this very subject. There are many reasons why, for the most part, the majority of people are not setting aside adequate savings for their retirement, and I fear that this trend will only grow in the years ahead.

Already we know that more than 200,000 Canadians over the age of 65 live well below the low income poverty line. Put another way, after a lifetime of working to raise their families and to pay their taxes, 200,000 Canadians are being forced to choose between buying groceries and paying the rent because their retirement income is simply too low to allow them to do both. While sad, and for many, nearly unbelievable, it is a daily reality for far too many. These financial challenges are compounded even further when one factors in elements such as ill health, geographic isolation, or even the loss of a spouse. This means that the most vulnerable are often the ones facing the greatest risk exposure and suffering to the greatest extent.

New Canadians, women, those with the lowest amounts of formal education, native Canadians, and those living in rural, remote or isolated regions of the country are among those facing the most difficulty. It is these Canadians who can expect the least amount in their golden years.

Statistics Canada tells us that Canada's population over the age of 65 could reach an unprecedented 10.9 million by 2036. Accordingly, we need to start addressing these pension shortfalls today if we are to prevent a full-blown crisis in the years ahead. The question though is how. How shall we address this?

When Lester Pearson first established the Canada pension plan in 1966, people said it could not be done. Three decades later, when Jean Chrétien and Paul Martin made the changes needed to put the CPP on stable financial footing, many said it was a fool's errand. The debates were fierce at that time, but they were fundamental to the financial future of millions. All of those were vehemently opposed by the Conservatives, by the way. Perhaps one day we will look back on this debate and say the same thing.

Regardless of the genesis and tone of those past debates, the outcome is not in dispute. Canada now has a good public pension base, which is composed of the Canada pension plan and the QPP, the old age security pension, and the guaranteed income supplement. Alone, these mechanisms provide somewhere in the neighbourhood of 30% of one's replacement income in retirement. In dollars, these plans pay a maximum of about $20,000 annually, but the average payout has proven to be significantly less.

Current economics suggest that this will not be enough for most Canadians. In fact, it is not enough for most Canadians today. They need private retirement savings to survive. Retirement income security, adequacy and coverage are growing problems that urgently require the attention of business, labour, individual citizens, and governments at all levels.

Seventy-five per cent of Canadians working in the private sector do not have a pension plan at all. They are clearly not saving enough and are effectively prevented from accumulating the same retirement income as their public sector counterparts, including all of us.

With the numbers in mind, we have two choices. We can ignore the problem until it becomes a national crisis, or we can address it now before it becomes a crisis. I choose the latter, and that is why I have introduced Bill C-574.

As I have said, 30% is an okay base, but it still leaves a shortfall for most people of 70% of their income. For many, the attainment of that 70% is insurmountable for many reasons. In addition to the rising cost of living, there are also systemic barriers that stand between hard-working Canadians and that much-needed 70%.

Currently, individuals participating in generous defined benefit pension arrangements routinely accumulate five to seven times more retirement income than those who do not. These defined benefit plans are available only to public sector workers and to a very small minority of private sector workers.

Despite this apparent solution, right now the Income Tax Act says that individuals cannot have a generous defined benefit pension plan unless they have an employer who provides it for them. I think that is wrong, and it places those without an employer at a disadvantage. Why should a farmer, a homemaker or a small business owner not receive a pension plan? Bill C-574 would help to level that playing field.

In essence, clauses 4 to 6 of Bill C-574 would guarantee equality of opportunity by providing that a federal law that has the effect of restricting an individual's right to join a pension plan or the flexibility to make the contributions necessary to accumulate an adequate retirement income would be in violation of this bill.

Put another way, if Bill C-574 becomes law it will be illegal to prevent people without cause from joining a pension plan or to restrict their right to make contributions, subject to reasonable restrictions that must apply to all individuals equally.

I want to make sure that we eliminate every possible barrier currently preventing the self-employed, farmers, stay-at-home parents and those engaged in the workforce from saving effectively for retirement. Today, right now, if MPs from all political parties band together and pass Bill C-574, we will have taken the next step in securing pension security, adequacy and coverage for all Canadians.

It is with these basic concepts foremost in my mind that I speak today to this bill. Yes, Bill C-574 is about many things: financial literacy, pension security and even basic fairness. But more important, the debate could highlight what the legislation is not about.

I think it is fair to say that Bill C-574 is not about partisan posturing or brinkmanship. Bill C-574 is about so much more than that.

From my perspective, my goals are simple: to help ensure that every Canadian has access to effective retirement savings mechanisms; to empower people with detailed, up to date, conflict-free information about their financial future; and to acknowledge that universal dignity in retirement is more than just a nice extra. It is a goal to which we all as legislators should aspire in the years ahead.

With this direction in mind, I am pleased to openly say that the Parliamentary Secretary to the Minister of Finance has signalled that he is prepared to co-operatively explore this matter. While there will almost certainly be differences that we need to work on, I am encouraged that we can at least agree on the stated objectives of the bill. These objectives may be simple but they are far from simplistic.

This legislation is the first of its kind ever proposed to ensure that our seniors have better nest eggs and the retirement income security that they need.

In broad strokes, the bill seeks to do a few general things: to create substantive rights; to give every person a chance to accumulate retirement income in a plan that will be there in the long term; to promote good administration of retirement income plans; to ensure that members of retirement income plans regularly receive good, plain-language information that they will need about their plans; and to set out in law the goals to which we aspire legislatively as they relate to retirement income.

Members might not fully appreciate why these measures are so essential, but I would submit that the recent examples of why they are needed are all around us.

When Canadian technology giant Nortel announced it would seek to liquidate its assets, company pension plans and long-term disability benefits fell into chaos. Thousands of hard-working Canadians suddenly found themselves thrust into financial uncertainty despite having contributed to a workplace pension regime for several years.

Last week, the House industry committee heard that many of these problems could have been prevented if only pensioners had access to some basic financial know-how.

Bill C-574 promotes increased financial literacy for individuals participating in a retirement income plan in three ways.

First, it requires clear disclosure of the risk the individual has in the plan relating to benefit security and conflicts of interest.

Second, it requires regular plain-language disclosure to the individual of his or her rights, obligations and options relating to the plan.

Third, it requires that federal laws governing retirement income plans promote access to training in financial literacy and retirement planning.

It would seem that some of these measures are long overdue, especially for a former Nortel employee.

I would never want to frame Bill C-574 as a response to the Nortel situation. Quite the contrary, Bill C-574 is more inclusive and more far-reaching than that.

In fact, there were many reasons why I opted to present Bill C-574, but in simple terms, I presented it because it is the right thing to do. Bill C-574 is about helping people and protecting pensions for the next generations.

In 1960, when the Bill of Rights was passed by Canada's Parliament, it was heralded as a historic first step towards establishing an important slate of Canadian rights. In that same vein, Bill C-574 strives to be that first step towards ensuring pension security, coverage and adequacy. I have even sought to incorporate some of the language used in the Bill of Rights in an effort to strike a balance between goals to which we aspire and rights that must be protected.

If I had to summarize Bill C-574 in 50 words or less, I would have to say that Bill C-574 is about choice, fairness and flexibility. It is not about tearing down pensions; it is about elevating everyone to the same level. Every Canadian should have the right to a financially secure retirement, and I believe this proposal sets the stage for that to become a reality.

In the days ahead I look forward to working with colleagues of all parties. I welcome any suggestions that can help to strengthen Bill C-574 while at the same time staying true to the stated goals of the legislative proposal.

In the meantime, I would urge each member of the House to consider supporting the bill so that it can be sent to committee for additional study and consideration. Pensions are not a matter for partisan consideration and neither is Bill C-574. Canadians are counting on us to do the right thing.

I believe it is very much a motherhood issue with basic principles that I think all of us espouse. It is clearly one that will start to protect pensions in the future and better prepare our children and other Canadians so that they are better prepared and when retirement comes we are not hearing about 200,000 people still living below the poverty line. Everybody should be able to contribute, no matter what small amount, into a pension fund that would be there for them when they need it.

Retirement Income Bill of Rights
Private Members' Business

6:25 p.m.


Mike Wallace Burlington, ON

Mr. Speaker, I want to thank the member for York West for bringing her private member's bill forward, the pension income bill of rights.

A month ago or so the member sent out a media kit that talked about the bill. As she knows, about 90% of pensions are dealt with at the provincial level, leaving about 10% at the federal level.

It does require a tremendous amount of cooperation between the federal and provincial governments across the country. The parliamentary secretary has been across the country on pension consultations and the Conservative government has been working very hard on that.

Has the member presented the proposals that are in the bill to the provincial houses across the country? Did the member get any response from the provinces, that we can see, on how they feel about the bill of rights that is proposed in this bill?

Retirement Income Bill of Rights
Private Members' Business

6:30 p.m.


Judy Sgro York West, ON

Mr. Speaker, the whole issue of pension security and adequacy in the coverage is an issue that I think involves all governments, whether federal or provincial. It is a partnership in many areas. Our colleague has been travelling the country as well. Clearly we know that provinces are looking to find ways. Just imagine, in 26 years there will be 10.9 million seniors. Just imagine what that would do to the fiscal capacity of our country.

It is imperative, and I know the provinces are very much concerned with the same issue. As we continue to have discussions, my bill of rights very much establishes the goals and the principles to which we should all be aspiring. Putting a magnifying glass on the issue of pensions will help us to start talking about it. We have not talked about pensions in Parliament for well over 20 years. We talk about them every once in a while. Unfortunately, the reason we are talking about the issue is that it has a lot to do with the bankruptcies and things that have happened to many companies this year, such as AbitibiBowater and others. They have really raised the profile of the issue, so that I am sure that anyone who has spent any time looking into that issue will say we had better start doing something. We had better start making some changes so that eventually people will be able to have saved enough and have a sufficient income to retire on.

Retirement Income Bill of Rights
Private Members' Business

6:30 p.m.


Wayne Marston Hamilton East—Stoney Creek, ON

Mr. Speaker, I have travelled the country. The member has talked about people she visited. I am really quite surprised at Bill C-574 because the kind of things we believe are needed now are an increase to old age security and an increase to the guaranteed income supplement and, of course, in this House for the last two years we have been talking about increasing the CPP. What strikes me is that Bill C-574 proposes no amendments to the Pension Benefits Standards Act and no changes in the Canada pension plan, old age security or the Income Tax Act.

I do not see how there is going to be a financial benefit for anybody if we do not change those pieces of legislation.

The reality is that there are people who are suffering right now. The member herself talked about 200,000 seniors living in poverty. I agree with her. We need action now, and this just seems to go in circles.

Retirement Income Bill of Rights
Private Members' Business

6:30 p.m.


Judy Sgro York West, ON

Mr. Speaker, the bill is very direct. It is about a bill of rights. It is what we aspire to. It is what we all, as Canadians, should be aspiring to so that retirement gives us sufficient income and also allows us to retire with dignity.

Why should we become 65 years old and have to turn around and scramble because we are suddenly having to live on $12,000 or $15,000 or $20,000 a year? Just imagine having to do that.

The bill is not focusing on bringing in phoney legislation that talks about raising the old age security or raising a whole bunch of things that we know darn well are impractical and not necessarily going to happen. It will happen as we can afford it.

I hope we are going to see increases to the OAS in the next budget. We need it. I hope we increase the contributions to the CPP and increase the contributions to the GIS. All of those are things that I believe very much are necessary to do.

My bill is not concentrating on those. My bill is concentrating on establishing the basic principles of a bill of rights stating that everybody has the right to be treated with dignity and respect and to be able to retire. It then comes onto us as legislators to do what is necessary to follow through with a bill of rights that we would all support, I would hope, and then we would ensure that we build on top of that.

Retirement Income Bill of Rights
Private Members' Business

6:30 p.m.



Ted Menzies Parliamentary Secretary to the Minister of Finance

Mr. Speaker, I am pleased to have the opportunity to speak to today's Liberal proposal for a broad bill of rights related to the retirement income system.

I want to acknowledge the passion that the hon. member for York West brings to this serious debate. We hear it when we are in our constituencies. It is a very important issue and I am sure all members sitting here will continue the debate later on during a take note debate when we will be able to debate the issues. We may differ on some of the solutions but I think we all are on the same page as to the problem that our seniors are facing.

As someone closely involved in the push to improve retirement income and pension security for Canadians, it would be appropriate to step back and look at the broader picture as we start this debate today.

First and foremost, I want to acknowledge that this is an issue all parliamentarians care deeply about. As I say, although we might not all agree on the exact specific solutions, I would think that we are all working for the same goal, which is helping to ensure a secure and dignified retirement for hard-working Canadians.

Through numerous cross-country consultations I have talked to many Canadians and heard too many challenging personal stories not to realize that this is an issue too important to get wrong. Our Conservative government has devoted considerable effort on the retirement security issue in order to get it right. Indeed, we have been engaged in a very serious discussion with Canadians on pension and retirement income security issues over the past few years.

First, we started by looking at our own backyard, so to speak. We undertook a comprehensive review of the framework governing pensions, those pensions under federal jurisdiction, a review that had not occurred since 1985, nearly 25 years ago. We also ensured that the review was as open as possible. We publicly released a major research paper on the legislative and regulatory framework of federally regulated private pension plans for comment in early 2009. We followed that up through March into May of 2009 with extensive cross-country and online public consultations open to everyone.

I am happy to report that we received tremendous feedback, feedback that led to comprehensive reforms to improve the federal pension framework, reforms that will, first, help protect pensioners by requiring companies to fully fund pension benefits on planned termination; second, restrict an employer's ability to take a contribution holiday; third, make pensions more stable; fourth, give pensioners more negotiating powers; fifth, modernize investment rules for pensions; and many more.

I note that the majority of those reforms have already been put in place through legislation and regulation. What is more, many of the few outstanding reforms are actually before Parliament right now as part of the sustaining Canada's economic recovery act.

However, this reform is only one step in a much larger process to help pensioners and seniors. Another aspect is ensuring seniors keep more of their hard-earned money. That is why our Conservative government has dramatically lowered the federal tax bill for seniors and pensions since 2006. Indeed, we are providing nearly $2 billion annually in tax relief to seniors and pensioners, including increasing the age credit amount by $2,000, increasing the age limit for maturing pensions and registered retirement savings plans to 71, introducing pension income splitting and doubling the amount of income eligible for the pension income credit.

However, we recognize that more is needed. We recognize that there are larger pan-Canadian concerns that can only be addressed nationally, working with the provinces and the territories.

I should note that most pension plans are actually provincially regulated. In fact, only approximately 10% are federally regulated. For that reason, we have long recognized that tackling the larger retirement income issues must involve federal, provincial and territorial governments.

Our Conservative government has taken the leadership needed to start a serious and public pan-Canadian discussion, one that has been approached by all with the gravity it deserves.

In the words of a recent Toronto Star editorial:

--governments at all levels are answering the call from working Canadians for a serious dialogue—and action—on pension reform.

For example, we set up a joint federal-provincial research working group with respected academic Dr. Jack Mintz as director of research to conduct an in-depth examination of retirement income adequacy. The group's findings, made publicly available, were presented at the finance ministers' meeting in December 2009, where we agreed with our provincial and territorial partners to proceed with detailed analysis of areas to improve Canada's retirement income system. Again, we did not do so behind closed doors. Rather, we invited public comment to gather input directly from Canadians.

This research and these public consultations suggested we explore a series of innovative proposals to build further on the strengths of Canada's retirement income system. It also strongly suggested that we rule out certain other proposals, including a supplemental Canada pension currently advocated by the Liberal Party.

The consensus of governments and public interest groups from across the political spectrum has been that this would be costly, ineffective and, ultimately, a misguided solution.

In the words of Ontario's Liberal minister of finance, Dwight Duncan:

We are rejecting the notion of a supplemental, voluntary national plan for a variety of reasons...It’s very costly to set up and administer.

Nevertheless, later this year we will meet with provincial and territorial governments to discuss effective and affordable solutions.

The road ahead will likely include more discussions between Canadians and governments at all levels as these issues are complex. We cannot force a decision without understanding the long-term implications for both Canadians and the Canadian economy.

We need to get this right. We need to get this right together, employees, employers, federal governments and provincial and territorial governments. Our decisions need to be the right ones, not only for today but for tomorrow as well. This will take hard work, careful consideration, compromise on all sides and time. It will also take the will to get it done.

People can rest assured that our Conservative government remains committed to improving the retirement income system in our country. We may not always agree on the specific solution but I would like to think that we share the same goal of ensuring we have a strong and sustainable retirement income system for the benefit of all Canadians. This issue is too important for too many Canadians not to.

In that spirit, with respect to the latest Liberal proposal outlined here today, as I mentioned before, this is an extremely broad and all-encompassing bill of rights. The rights touch on numerous generalities, such as adequacy, transparency, affordability, equity, flexibility, security and accessibility, without offering all of the details that are necessary.

While largely an inoffensive list, it does seemingly suggest the complete scrapping of any limits on how much income Canadians can shelter from taxes for their retirement. Not only would something as radical as that carry a hefty cost, it would also primarily benefit very wealthy high income Canadians.

Nevertheless, in spite of some flaws, as we have demonstrated over the course of the past few years, we are always open to discussing and looking at retirement income issues and proposals.

As a result, we will support sending this proposal to committee for further discussion and examination.

Retirement Income Bill of Rights
Private Members' Business

6:40 p.m.


Luc Desnoyers Rivière-des-Mille-Îles, QC

Madam Speaker, Bill C-574, An Act to promote and strengthen the Canadian retirement income system, “creates a bill of rights for a retirement income system that promotes the goals of adequacy, transparency, affordability, equity, flexibility, security and accessibility for all Canadians”.

The bill introduced by the Liberal member for the Ontario riding of York West establishes a bill of rights that aims primarily to protect individuals who participate in pension plans, whether they are retired or still active in the workforce.

Bill C-574 protects various rights related to pension income, particularly the right to accumulate sufficient pension income and the right to receive complete and accurate information, in a timely fashion, when serious risks become known, specifically, a risk of non-payment or reduction in benefits.

The Bloc Québécois will be proposing an amendment to ensure respect for Quebec's jurisdiction. Private pension plans come under Quebec and provincial jurisdiction, with the exception of federally regulated industries like banking, communications and so on. The same is true of the Quebec pension plan.

The Bloc Québécois wants to avoid any confusion. We believe we must make the necessary amendments to make certain that this bill will not interfere with Quebec's areas of jurisdiction. The Bloc Québécois will propose an amendment to Bill C-574 to ensure that this bill targets only public or private pension plans under federal jurisdiction.

Furthermore, the introduction of this bill is a perfect opportunity to look at the issue of environmental, social and governance risk factors and respect for international treaties.

The Bloc Québécois believes that anyone who contributes to a pension plan cannot conduct a fair analysis of the risks involved unless they are informed of the company's environmental and social responsibility practices in the event that these have an impact on risk and performance.

This is supported by the Canada pension plan and the Caisse de dépôt et placement du Québec, which recognize how important it is for investors to have the information they need regarding the company's environmental, social and governance risk management.

“Corporate behaviour with respect to environmental, social and governance (ESG) factors can generally have a positive influence on long-term financial performance, recognizing that the importance of ESG factors varies across industries, geography and time.

Disclosure is the key that allows investors to better understand, evaluate and assess potential risk and return, including the potential impact of ESG factors on a company's performance.”

And so the Bloc Québécois is proposing the addition of one right, the right to receive information on the retirement fund manager's assessment of social, ethical and environmental criteria during the initial risk analysis for each investment.

Clause 9 states:

Every individual who participates in, contributes to or receives benefits from a retirement income plan shall be entitled to receive, in clear and concise language, all the information the individual requires to understand his or her rights, obligations and choices under the retirement income plan, including...

And this could be amended to include the following:

“Regular disclosure of the list of stocks the retirement fund manager has acquired for the retirement plan. This information may be included in the retirement fund manager's annual report.”

The elected members of the Bloc Québécois, who have always supported demands made by retirees and seniors in Quebec, will continue to support measures that help them.

In addition to numerous other actions we have taken, we introduced Bill C-290, which would offer compensation to shortchanged retirees who are seeing cuts to their pension funds because a former employer has gone bankrupt and is not fulfilling its responsibility to contribute to the pension fund.

The Bloc Québécois is confounded by the rejection by both the Liberals and the Conservatives of its Bill C-290 to protect the retirement income of employees of a bankrupt business.

Once again, the Liberals and the Conservatives are showing their profound indifference towards workers, especially pensioners.

The Bloc Québécois will ensure that pensioners are not ignored by the Conservative government. We have continued to offer the government a series of solutions to protect pensioners. In fact, we have put forward a solid plan with a number of measures to protect their income, one of which would have the federal government follow Quebec's lead and put bankrupt companies' pension plans into trusteeship, when they are under federal jurisdiction. This is done in Quebec, under the Supplemental Pension Plans Act, to prevent these pension funds being liquidated while the markets are at their lowest.

The Quebec pension plan is thus able to take over management of the assets of bankrupt companies' pension plans. The government guarantees the payment of benefits owing to affected employees. However, this amount is adjusted to the solvency level of the pension plans, or their ability to pay all benefits to which contributing employees are entitled.

We have also proposed that preferred creditor status be given to disabled employees who lose their benefits due to a bankruptcy. In times of economic crisis, the declining value of securities diminishes the value of pension funds. If a company goes bankrupt during a downturn, the pension fund will be unable to meet its obligations towards its pensioners. This is not the result of the company defaulting on its normal payments to the pension fund.

Beneficiaries of this type of pension plan provided by companies in financial difficulty have often called for the laws governing bankruptcy to be revised so that pension funds would become preferred creditors in the event of bankruptcy.

The amendment to the investment act in order to maintain the threshold for automatic review of foreign acquisitions at $300 million would ensure that major corporations, like Nortel for instance, are not sold off at the expense of its retired workers. Nortel was sold off piece by piece. The foreign investment act does not force the government to review those transactions. In the case of Nortel, it was a very costly decision, and Nortel's Canadian assets could wind up in the United States and the United Kingdom.

Lastly, I would like to talk about improving the guaranteed income supplement. We are extremely concerned about the fact that over 80,000 Quebec seniors are living below the low-income line. The maximum GIS allowance is not even enough to get seniors out of poverty.

The Bloc Québécois has been working very hard to improve the GIS in order to: increase the guaranteed income supplement by $110 per month; continue paying both pension and survivor benefits, for a period of six months, to a surviving spouse; automatically enrol people over 65 who are eligible for the GIS; ensure full retroactive payment of the GIS for all those who were shortchanged; and increase the surviving spouse's allowance to the same amount as the GIS.

As for the thousands of people who rely on old age security, the federal government has unfairly deprived, and is still depriving, these people of the money owing to them. In order to access the guaranteed income supplement, one must apply. Tens of thousands of seniors in Quebec have been cheated because they did not apply for the GIS as soon as they were eligible.

In closing, the Bloc Québécois supports Bill C-574 in principle , but believes it is important to propose various amendments in order to ensure, above all, that it applies only to federally regulated pensions plans.

Retirement Income Bill of Rights
Private Members' Business

6:50 p.m.


Wayne Marston Hamilton East—Stoney Creek, ON

Mr. Speaker, I rise today to speak to Bill C-574, a retirement income bill of rights.

As reform to Canada's retirement system is a key principle to which the NDP is dedicated, I was pleased to hear that my Liberal colleague from York West had tabled a bill relating to pension reform. I guess in my haste, I thought it might be something around the Nortel situation, especially with the long-term disabilities. In fact, when the member spoke earlier today, she mentioned it. Therefore, I was a little surprised with the bill.

However, upon reading the bill, I came away concerned as to what the goal of the bill was.

The bill purports to create a retirement bill of rights within the authority of the Parliament of Canada, which sounds, in principle at least, like something both myself and my party, the NDP, would be pleased to support wholeheartedly. In fact, we proposed, and the House passed previously, a seniors' charter in this place, yet the government has not implemented that.

The provisions of Bill C-574 would apply to retirement plans established by employers that were federally regulated. We heard the Bloc's concerns regarding provincial jurisdiction and companies such as Air Canada, the Canadian National Railways and Bell Canada.

The bill seeks to create a number of individual rights related to pension income and retirement, such as the right to accumulate sufficient pension income for retirement, the right to determine how and when pension income should be accumulated, the right to the full, accurate and timely disclosure of the risks, which is a very important part of the bill. However, I hear people in this place saying that these things already exist.

In principle, this sounds very good. Let us ensure that there is protection for seniors when they do make their investments. However, does this raise one nickel extra in pension value for seniors? I do not think so.

The clauses of the bill that brought about my concern, or kind of a wonderment if anything, are not so much to do with the bill's stated principles, but its lack of execution. As I read the bill, it seemed it must have been hastily put together, as if the drafters ran out of time and had to turn to an earlier draft.

Most of the bill's provisions are declaratory. For instance, it declares rights, but fails to amend appropriate legislation in order to establish them.

The bill calls for increased transparency with respect to the management of pension funds, even though most of these funds, again as the Bloc has indicated, are provincially regulated. It is a good thing again, certainly in principle, but Bill C-574 proposes no amendments to the Pension Benefits Standards Act, or to any other acts that would require amendment in order for the bill to accomplish its stated goals, such as the Canada pension plan, the Old Age Security Act or the Income Tax Act.

Members will know that the Pension Benefits Standards Act currently applies to pension plans of employees working for federally-regulated employers or businesses. Bill C-574 does not give any information nor clarifies how the rights created under the bill would apply to employers or employees regulated under the Pension Benefits Standards Act. The bill also does not propose any amendments to the Pension Benefits Standards Act.

Clause 4 of the bill states that every individual Canadian has the right to accumulate sufficient pension income in a retirement income plan, subject to any reasonable restrictions imposed by a federal law. That is in place now. These reasonable restrictions are not elaborated on nor the federal statutes that contain a number of the restrictions. Therefore, we are left to wonder just how these changes are purported to take place.

The bill is silent on defining what sufficient pension income means.

In the presentation of the bill, the member for York West talked about a goal of 70% of income, which is a goal that is lauded around the world, but very few countries, if any, reach that goal. However, what percentage of pre-retirement income do the Liberals feel is sufficient for Canadians to live a dignified retirement? Is it 60% Is it 50%? The bill does not tell us.

In addition, it seems the bill does not amend or refer to the Canada pension plan, the Old Age Security Act or the Income Tax Act, which also provide for pensions or contain provisions that regulate the amount an individual can transfer into a pension plan. One can only then assume, for example, that the maximum amount a person could transfer into an RRSP or the maximum contributions a Canadian could make to the Canada pension plan would not be changed by reason of Bill C-574.

Moreover the bill also would impose certain obligations on professionals in the financial services field who would administer retirement income plans or who would provide financial advice on retirement plans. Knowing that the financial services sector apart from banking is largely subject to provincial regulation, consequently it is not clear how this Parliament, through Bill C-574, could possibly regulate the financial service sectors.

For these reasons, it is difficult to understand the exact purpose of the bill and especially its financial implications when put into practice. For example, Air Canada has a retirement plan for its employees. If an individual decides to go to work for Air Canada, he or she would accept the work conditions and the benefits established under the collective agreement. It is not clear where the provisions of Bill C-574 would come into effect. Would the bill allow an individual to contribute more to Air Canada's retirement plan than what would have been provided under the employment contract or collective agreement? We do not know. It is difficult to understand how this could be done in a practical fashion.

In short, it seems to me that Bill C-574 should have been a motion. Nevertheless the NDP wants to encourage the other parties to work toward real reform on retirement income systems. In that spirit the, New Democrats will support Bill C-574 going to committee so we can take a closer look at actually what can be done with the bill.

In the meantime I would like to put forward some of the concrete proposals that we have put forward over the last two years such as eliminating seniors' poverty. The member for York West spoke of seniors' poverty. The poverty gap is about $700 million and that could be put forward by the government by increasing GIS to close that gap.

We have talked about strengthening CPP/QPP. Ninety-three per cent of Canadians are already members of CPP/QPP. We want to phase in a doubling of it.

A national system of workplace pension insurance would be self-financing. It would be a mandatory insurance system funded by the plan's sponsors with a payout of up to $2,500 a month.

Let us ensure that the companies in bankruptcies make good on the pensions they owe the workers. Today when companies go bankrupt, the shortfall in the workplace pension plan, which is called an unfunded liability, does not receive priority as a creditor. Workplace pensions are nothing less than unpaid deferred wages. Workers should have the right to receive these wages, especially when the company goes under.

Our Nortel act would put workplace pension plans in the same creditor category as bondholders and other investors.

In bankruptcies workplace pension plans may be wound up and converted into low interest annuities. Pensioners would often be better off if those plans lived on as “going concerns”. We suggested creating a facility adjacent or part of the CPP, which could manage it, to adopt these pension plans.

I have heard the Liberals of late talking about the orphan plans, so I am glad to hear they have been listening to us.

It is time for the government to acknowledge that pensions are deferred wages. These wages should be there in their entirety when an employee retires. They are not bonuses paid to the workers at the end of their working lives. They are part of an agreed upon compensation package for hours worked.

Retirement security has long been a priority of the NDP. In fact, we heard members talk a few minutes ago about 1966. In 1927 the Independent Labour Party, a precursor to the NDP, proposed the first old age pension.

People who have been in this place for a few years will remember that it was the NDP's Stanley Knowles who fought for the Canada pension plan, and it was a minority Liberal government that put that in. If I recall correctly, that was in 1966.

Our party members will continue to use our leverage in this place until such time as all seniors are able to live out their retirement years with the dignity they deserve, that they have earned as part of helping Canada grow to be the great place it is today.

I do not want to totally fault what is coming forward because the words in the bill are good. It is just the actions that are required to implement it. How do we get to the place where we can actually increase the living standard of seniors today, right now. In my mind that is an increased old age security and GIS to deal with the ones below the poverty line of which close to 300,000, or over 60%, are single women. For me, that has always been a national disgrace.

Retirement Income Bill of Rights
Private Members' Business

November 23rd, 2010 / 7 p.m.


Michael Savage Dartmouth—Cole Harbour, NS

Mr. Speaker, I am pleased to have the opportunity to speak to Bill C-574. I want to congratulate my colleague. I do not think anybody in Parliament has done more work going around the country and understanding the need to strengthen and make our pension more robust than the member for York West.

One of the biggest issues facing Canadians today is the security of senior citizens. If they have gone past working age, what are they going to live on? It is an increasing problem. Among the saddest meetings we have as members of Parliament, certainly in my case, are with people who tell me they are retired or were planning to retire very soon but it has all gone up in smoke. What they thought was there is not. These are people who do not have the option of going back into the workforce, or if they do, their options are very significantly limited.

So I really want to congratulate my colleague from York West. She has worked hard. She has travelled extensively in a non-political, non-partisan way and has brought forward this very important bill.

We know that a significant number of seniors live in poverty. Canada as a country has done a pretty good job over the last 20 to 30 years of reducing poverty rates among seniors. Going back to the 1970s, we have reduced poverty rates among seniors pretty significantly. It has been on the rise again over the past few years, but the poverty rate among seniors has gone down very significantly.

The problem is that there are still groups of seniors, and it tends to be single women, who have very high rates of poverty. We need to take that into account. However, it is not just the lowest income Canadians. Many middle-income Canadians are having a really difficult time now dealing with retirement.

I can recall somebody in a private company where I used to work who told me the story of having come out of technical school years ago with a friend of his. While my friend went to work for a private company, a big, reputable company, his friend went to work for the City of Dartmouth. Thirty-five years later when they went to retire, the person who had the good pension plan and worked for the City of Dartmouth was very well situated, while my friend did not have very much because the pension plan simply was not as robust.

In many cases, back in those days, people did not look at a pension plan when they started working at the age of 18, 19 or 20. They looked at the salary and never really understood the implications down the road for themselves and for their families if they did not have a strong pension plan.

Then there is the case of Canadians who believe, for valid reasons, that they have a robust pension plan. They work for large, reputable, seemingly solid companies, in many cases world-leading companies such as Nortel. Ten years ago, who would have imagined that people who worked for a company such as Nortel would have trouble? Then when things go bad for the company, they are left holding the bag, and the bag happens to be almost completely empty.

So what do we do? What is the role of parliamentarians in this House? What role does the federal government have? First, the regulation of private retirement savings is in fact a shared responsibility, federally and provincially. Federally, we have the Income Tax Act. We can take some of the instruments that we have control of and make them better.

I want to refer to the issue raised by my colleague from the New Democrats who would say that this bill does not really do anything and that we have a $700 million poverty gap for seniors. This is a private member's bill. I look at the work that members such as my colleague from Scarborough—Guildwood did on his private member's bill, Bill C-293, the development assistance act. Those of us in the House know that many Canadians may not know what a royal recommendation is. Very simply it means that, with a private member's bill, we cannot call upon the government to spend money. We can bring it forward, and we have seen many bills from the New Democrats and the Bloc, well intended bills, that required the spending of money, but they do not go anywhere.

Serious parliamentarians who actually want to make things better will craft a bill that is a road map to a better place but does not call on the government to spend money. In other words, some members in the House bring forward bills that can never be enacted, or they can be serious about it and provide a road map. Members can come to the House to make a point or to make a difference, and my colleague from York West is trying to make a difference.

The summary of the bill we are debating today, Bill C-574, is very simple. It says:

This enactment creates a Bill of Rights for a retirement income system that promotes the goals of adequacy, transparency, affordability, equity, flexibility, security and accessibility for all Canadians.

I think in many ways that says it all.

My colleague from York West, in a media release sent out about a month ago, indicated that as she presented the bill in the House of Commons, she noted that the legislation proposes:

to enshrine in law the notion that all Canadians have the right to contribute to a decent retirement plan and to be provided with up-to-date, unbiased and conflict-free information on their retirement savings.

There are 308 members of the House. Many of us have been in business, many of us have been employed, and there are entrepreneurs in this House.

There are a lot of people, and they are not foolish people, who think they are covered, as was the case with the Nortel workers and other people, who simply do not understand that if a company goes under, their retirement goes under as well.

They assume that this is all done above board and it is done with a third-party insurer. They do not understand the concept of self-insurance. I think the government has a role in this case to translate to Canadians what actually is the case so they are not fooled when things go bad.

Our Canada pension plan, established in 1966 under Prime Minister Pearson, was a good and noble goal. It is working. We have had problems. In the early 1990s, there was a severe underfunding of it. Jean Chrétien as prime minister, and Paul Martin as the finance minister, put it on sound financial footing. At the time, I do not think people fully understood how important that was. I do not think the credit was given, but that was a very important piece of both economics and social policy that made it possible for many people to have secure pensions.

Today, once again, we have significant barriers. The bill that we are debating today, Bill C-574, proposes to address that. To some, it may not do enough; to others, maybe it does too much. Maybe that is why it is a good bill, because it sets a road map for Canadians who are having issues with their pensions. It does as much as it possibly can within the restrictions of being a private member's bill. Many people are supporting it.

What does it do? The bill would do five things: create substantive, justiciable rights; give every person a chance to accumulate retirement income in a plan that will be there in the long term, because many Canadians simply cannot join a group pension plan right now; promote good administration of retirement income plans; ensure that members of retirement income plans regularly receive good, plain language information that they need about their plans; and set out in law the goals to which we aspire legislatively as they relate to retirement income.

We all know that Canada is heading into a demographic crunch. We heard from the member for York West her statistic that by 2036 there will be 10.9 million Canadians over the age of 65. It is my sure and fervent hope that I will be among them, because the alternative does not turn me on very much.

The other statistic that I will give people, just to give a sense of where we are going as a country, is from the Association of Canadian Community Colleges. They were in to visit MPs recently and they shared a statistic with us that really says it all. Today in Canada, 44% of all Canadians are not in the workforce. That includes senior citizens, children, the unemployed and those who are unable to work. By 2031, in 20 years, 61% of Canadians will not be in the workforce.

The challenges that presents to us are clear. If Canadians are not in the workforce, they are not producing as much tax revenue for the country that we are going to need; and clearly, at the same time, there is going to be more of a demand for things such as health care and social services.

Many of that 61% will have earned a retirement. I am not suggesting for a second that they should be forced to work. In fact, some of them may choose to work and we probably should make it as easy as possible for them to work if that is what they choose to do.

This is the demographic crunch that Canada is facing. If we do not do more to address the needs of that growing segment of the population, including myself, who are going to be over age 65 by 2031, and from the member for York West's statistics, 10.9 million over age 65 by 2036, then we will have a significant problem.

The time to address that is now, both for those who have a specific and urgent need, those who are hurting right now because there has not been sufficient legislation, but also for the many other Canadians who do not even realize that they are going to have a problem, who do not understand that their retirement is in severe jeopardy.

Those Canadians are going to be going to their members of Parliament in 20 years and saying, “I did not know. I was not aware. Nobody told me that we had this problem.”

We could say in the bill that we should increase the guaranteed income supplement, but then it cannot be enacted. It would require the royal recommendation that so many Canadians go to bed thinking about every night. It simply cannot make a difference.

We either come to this place to make a point or we come here to make a difference. Bill C-574 makes a difference and I want to commend the member for York West for her hard and diligent work on behalf of Canadians.

Retirement Income Bill of Rights
Private Members' Business

7:10 p.m.


The Deputy Speaker Andrew Scheer

The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

Pursuant to an order made on Friday, November 19, 2010, the House shall now resolve itself into committee of the whole to consider Motion No. 8 under Government Business.

I do now leave the chair for the House to go into committee of the whole.

(House in committee of the whole on Government Business No. 8, Mr. Andrew Scheer in the chair)

Government Orders

7:15 p.m.


Gordon O'Connor Carleton—Mississippi Mills, ON


That this Committee take note of the national discussion focusing on improvements to Canada's retirement income system, including the ongoing dialogue between federal, provincial and territorial governments and consultations with all Canadians.

Government Orders

7:15 p.m.



Ted Menzies Parliamentary Secretary to the Minister of Finance

Mr. Chair, I appreciate the opportunity to start tonight's take note debate on retirement income security and pensions. Being someone of such young and tender years, I am sure you are going to enjoy all of this discussion that we will be having here tonight, because rest assured, we are concerned about your future as well.

Tonight's debate is another illustration of how important this issue has become and remains for all Canadians and all parliamentarians. As I have said before, while we may not always have the exact same solutions to these issues, I would like to think all parliamentarians share a common desire to help seniors and retirees in Canada for today and for tomorrow.

This is not a simple or straightforward issue at all. As we have seen in Parliament, especially this past year, there are widely different aspects of this issue. They include everything from private sector pension plans, taxation issues, bankruptcy legislation, the levels of public servants' pensions and much more, all equally worthy of our attention. To be sure, this past spring, the finance committee, of which I am a member, conducted a study on the broad subject matter of retirement income security. In those hearings, we heard the wide range of concerns associated with this issue, concerns that touched countless areas and multiple jurisdictions.

Personally, this is an issue I have had the honour to spend the last three years or so working very closely on, as the finance minister's parliamentary secretary. I know how truly important it is to Canadians. I have conducted town halls. I have chaired round tables. I have read countless handwritten letters. I have spoken directly to thousands of Canadians personally. I heard the personal and heart-wrenching stories. I heard the emotion and the anxiety in the voices of the people telling them. I know how important this issue is to them and the generations of Canadians that will follow, and our Conservative government knows how important it is that we address this, but we also know how important it is that we get it right.

Despite what some might say tonight, there are no quick or easy solutions. The federal government alone cannot find or be the only solution as well. The government action alone, in the absence of personal responsibility, is not the solution. We cannot pretend otherwise. We have to look at the issue from all angles, always aware of the implications of solutions that we may propose, implications on not only those directly affected, but also those indirectly impacted and the larger Canadian economy. We also must always involve Canadians through open and public consultation when exploring this issue. It is too important to exclude Canadians from this discussion.

Since 2006, those are the broad objectives our Conservative government has strived for as we worked to improve the lives of seniors and retirees in Canada, not only for today but for tomorrow as well. This has included everything from our work to reform federally regulated private pension plans to landmark tax relief for seniors and retirees and, most prominently of late, our work with the provinces and territories to address this issue in a collaborative and pan-Canadian manner.

With respect to our work with the provinces and territories, it has been based on both extensive, factual research and open, public consultation. Indeed, there has been extremely good co-operation over the past few years, as we have been able to narrow down what we think can work and what merits more study.

We also ruled out ideas we collectively determined cannot work. For instance, along with our provincial and territorial partners, we examined the notion of creating another supplemental, government-run pension plan. The verdict was unanimous. This was not a good idea. Ontario's Liberal finance minister, Dwight Duncan, has firmly and publicly rejected the supplemental plan as “very costly to set up and administer”.

Indeed, during the finance committee study and elsewhere, we have repeatedly heard the same concerns from academics, labour and business.

For instance, the Canadian Institute of Chartered Accountants came out strongly against the supplemental plan, and said, “We believe that such initiatives would require the inclusion of significant incentives, costing deficit-laden governments scarce funds, and would further complicate the system”.

Labour unions have been equally dismissive. For instance, the Communications, Energy and Paperworkers Union of Canada told the finance committee that a supplemental plan would not work. It said, “As regards supplemental pension plans, our union experience shows that people do not spontaneously or easily contribute to a supplemental pension plan, even when the offer is attractive”.

It is little wonder even my Liberal colleague on the finance committee, the member for Saint-Léonard—Saint-Michel, dismissed the idea. To quote him, “The only thing that will happen is that the people who have the money will voluntarily put it into the CPP, so I don't think we'll solve the problem”.

I am confident that the spirit of co-operation and progress will continue later this year when federal, provincial and territorial finance ministers meet in my home province of Alberta in my riding of Kananaskis in December.

As I have said on numerous occasions, if we really want to tackle this broad issue as a federal government, we have to work with our provincial partners. The fact of the matter is that the overwhelming majority of pension plans in Canada, over 90%, are provincially regulated. Nevertheless, while the federal government cannot act on larger matters without our provincial partners, we can and have acted decisively on matters of exclusive federal jurisdiction.

First and foremost, last year we conducted the most comprehensive review of the framework governing private pension under federal jurisdiction in over two decades. We started that process back in January 2009 when we released a major research paper on federally regulated pension plans for public comment.

As our Conservative government believes that the Canadian public has the right to have their voices heard on this issue, we invited and listened to all who wanted to make their voices heard through public town halls and online consultations from May to March 2009.

Based on the tremendous feedback we received from Canadians from coast to coast to coast, we released the most comprehensive reforms in nearly 30 years of the federal pension framework.

Among those key reforms is: requiring an employer to fully fund benefits if the whole of a pension plan is terminated; establishing a distressed pension plan workout scheme under which employers, employees and retirees may negotiate changes to the plan's funding requirements; permitting the Superintendent of Financial Institutions to replace an actuary if they are of the opinion that it is in the best interests of the members or retirees; and, requiring the administrator to make additional information available to members and retirees following the termination of a pension plan.

I am happy to report that those reforms were welcomed and appreciated. Dan Braniff of the Common Front for Retirement Security described them as “an important milestone for creating greater security for many pensioners and plan members”. He thanked us for taking this “very important step for better retirement income security”.

Those reforms represented one of many instances where we took the time and effort to get it right. Our Conservative government will continue along that path. We will listen to the views of Canadians and all parliamentarians here tonight as we work towards a long-term solution to improve the retirement income security of Canadians.

Government Orders

7:20 p.m.


Gerry Byrne Humber—St. Barbe—Baie Verte, NL

Madam Chair, I would like to ask the parliamentary secretary what was the basis on which the decision was taken to ultimately destroy thousands and thousands of dollars in value to those lower income senior citizens who hold RRSPs?

In May 2010, the Government of Canada decided that for those who cash in RRIFs, registered retirement income funds, those funds would indeed be accountable to whether or not those citizens received the benefits of the guaranteed income supplement.

Prior to May 2010, if a senior pensioner were to cash in a RRIF, he or she could elect to have those funds deemed optionable under the terms and conditions of the old age security, GIS legislation. They were optionable, the same way that employment insurance and other pension income is currently now, to this day, still optionable.

But if a senior citizen cashes in a RRIF today, that income is no longer optionable and it is calculated against the means test of whether or not that senior citizen will gain access to the guaranteed income supplement.

As a result of this unannounced policy decision by the federal government, literally thousands, if not tens of thousands, if not potentially hundreds of thousands, of Canadian seniors who cashed in a RRIF so that they could pay for medical assistance or emergency care will now have that income calculated as to whether or not they will be eligible for the guaranteed income supplement next year.

They are not aware of this because the government did not ever make this known to any member of the public. They are going to lose their guaranteed income supplement, literally thousands of dollars out of the pockets of seniors citizens.

Why did the federal government not publicize this? Why, more importantly, did it take this decision?