Mr. Speaker, I am pleased to speak today to the proposal on pension and retirement income issues and speak to what our Conservative government has accomplished in this important area.
From the onset, let me state that our government shares the deep-rooted concerns of many Canadians regarding their retirement security. We understand the importance of a secure and dignified retirement, especially after a lifetime spent building our wonderful country. For that reason, we have been aggressively working on improving our retirement income system. Indeed, we have already taken major action to strengthen Canada's retirement income system.
What have we done? First, in recognition of their lifelong contributions to our country and our government's core belief that Canadians should keep more of their hard-earned money, we dramatically lowered the tax bill for our seniors and pensioners.
Since forming the government in 2006, our record includes more than $2 billion in annual targeted tax relief, translating into $3,000 in tax relief for a typical senior couple. This includes increasing the age credit amount by $2,000, doubling the amount of income eligible for the pension income credit, increasing the age limit for maturing pensions and registered retirement savings plans to 71, introducing the tax free savings account, which is particularly beneficial to seniors as it helps them to meet their ongoing savings needs on a tax efficient basis after they are no longer able to contribute to an RRSP, and pension income splitting for 2007 and subsequent taxation years.
What is more, our record also includes important improvements to several specific retirement income supports, such as dramatically increasing the amount working seniors can earn before facing a clawback under their guaranteed income supplement, allowing them to keep more of their hard-earned money. We increased flexibility for seniors and older workers with federally regulated pension assets that are held in life income funds.
Second, we took major steps to reform the legislative and regulatory framework respecting federally regulated private pension plans. Indeed, this represented the most significant reforms in nearly 25 years.
Announced in October 2009, after extensive cross-country and online public consultations held in the months beforehand, the reforms included enhancing protections for plan members, allowing sponsors to better manage their funding obligations, making it easier for participants to negotiate changes to their pension arrangements, improving the framework for defined contribution and negotiated contribution plans, and modernizing the investment rules. Those key reforms were warmly applauded across Canada.
A diverse and broad group of public interest groups ranging from the National Association of Federal Retirees; the Association of Canadian Pension Management; the Canadian Institute of Actuaries; CARP, Canada's association for the 50-plus; the Common Front for Retirement Security; the Bell Pensioners' Group; the Canadian Life and Health Insurance Association Inc.; and even the Canadian Labour Congress. all welcomed and expressed their pleasure with them.
However, those reforms to federally regulated private pension plans were only one step in a much larger process.
That leads to the third area where we have focused, as we work to improve retirement security and pensions in Canada, and that is working with our provincial and territorial partners.
While many Canadians may not realize it, the vast majority of pension plans, approximately 90% in Canada, are provincially regulated. In other words, the federal government only has the constitutional authority to make laws relating to the private pension plans of federally regulated employees, such as airlines, chartered banks and others which employ less than one in ten workers in Canada. That is why, to address larger pan-Canadian concerns about pensions, we must, and have been, examining the relevant issues with our provincial and territorial counterparts in a co-operative and constructive manner, not by imposing unilateral or fragmented solutions. We have demonstrated that co-operation by establishing a joint research working group on retirement income adequacy and by holding numerous federal-provincial-territorial summits on the issue are important.
We also believe that the Canadian public has a fundamental right to be involved in and at the centre of this debate. That is why we ensured that Canadians from coast to coast had the opportunity to make their voices heard in person and online.
From March to May 2010, for instance, we invited public input, through round table discussions, online consultations and public town hall meetings, to gather feedback directly from Canadians. Following those extensive consultations, the findings strongly suggested we explore opportunities to build further on the strengths of Canada's retirement income system.
As a result, we agreed, along with provincial and territorial governments, to explore a set of innovative improvements. I am happy to report this past December, at the last federal-provincial-territorial finance ministers' summit, we reached a unanimous agreement on a new, innovative retirement savings tool, the pooled registered pension plan or, as we also call it, PRPP.
Millions of Canadians do not have access to private sector pension plans because small businesses in Canada face significant challenges in offering pension plans to their employees or because they are self-employed.
The proposed new PRPP will allow these businesses to team up and pool their resources, using a registered financial institution, and allow the self-employed to participate. As a result, millions of Canadians who either work for small and medium-sized businesses or who are self-employed would have access to good, affordable, secure pension plans for the very first time.
The PRPP will be the biggest step forward for retirement security since we introduced the tax-free savings account. It is little wonder we have heard such positive feedback, with support from each provincial and territorial government.
For instance, Nova Scotia's NDP finance minister, Graham Steele, remarked, “There seems to be practically unanimity among the provinces” of the PRPP proposal. “It's a good idea that will now be pursued”.
The Canadian Federation of Independent Business added:
—[PRPP] has significant potential to improve the mix of retirement savings options for smaller firms and self-employed entrepreneurs.
In the months ahead, we will work with our provincial and territorial partners to ensure this proposal meets the needs of employees and employers. Clearly, our Conservative government is taking a leadership role in addressing the concerns surrounding retirement income adequacy.
That brings us to today's proposal for a broad bill of rights related to the retirement income system.
First, it is clear that the proposal has some significant flaws that raise significant questions about its effectiveness. For instance, the federal government would have limited capacity to enforce these rights on behalf of the vast majority of Canadian workers as they fall under provincial jurisdiction. What is more, it does appear little consultations with the provinces and territories were conducted in the drafting of this proposal.
Second, the proposal would essentially give every person the right to shelter, on a tax-free basis, as much retirement income they consider adequate.
Such an open-ended statement has raised concerns about excessive and costly tax avoidance by the very wealthy that would ultimately jeopardize the government's ability to fund many retirement programs on which the needy depend.
Nevertheless, our Conservative government has clearly demonstrated that when it comes to pension and retirement income security matters, we are open to discussion, especially discussion that is measured, collaborative and responsible.
To illustrate that commitment, our government is willing to recommend this proposal, despite its flaws, and that it be further examined in depth at committee.