Debates of Feb. 4th, 2011

Canada-Panama Free Trade Act

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I am having trouble with the deal that is being struck with Panama. It is different from the deal with Colombia. Human rights are very important to my party. We can understand perhaps why the Conservatives were not so big on labour unions, but with regard to this one, I have had to listen to their pious pronouncements on being tough on crime and getting rid of the drugs in the schools and on the streets and so on. This is a situation where we are legitimizing the world's largest launderer of drug money.

What is in the minds of the Conservatives? How can they go to sleep at night when they are so hypocritical? Why do they not wake up to what they are doing and recognize what the problem is with Panama and why an agreement should not be signed?

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, in the province of Manitoba we have learned that if we want to get tough on crime, the profits of crime must be choked off. If we take the ill-gotten gains away from a criminal there is a fighting chance that we will stop the practice because we want to make the point that crime does not pay. That is why we put in place the proceeds of crime bill, where we could seize the assets and ill-gotten gains of a criminal more easily.

We can do the same internationally by choking off sanctuaries such as Panama that are used by international drug dealers to launder and warehouse their money. However, we do not do that by legitimizing the country and its practices.

There are 400,000 corporations registered in Panama. That is four times all the corporations in Canada. None of them produce a single thing because they are just shell companies that are being used to house and launder money, and to avoid taxes. Tax fugitives and drug dealers make up the entire chamber of commerce in Panama. Why would we sign a trade agreement with it?

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, on a number of occasions I have seen a film narrated by Mary Walsh called Poor No More, which touches on the whole issue of poverty. One of the reasons for poverty, of course, is the tremendous influence the Council of Chief Executives has on government policy. This organization is made up of 150 of the biggest corporations in Canada and some of its members use tax havens so they do not have to pay so much money to the government. As a result, the government has less revenue to do the things it should be doing.

I was wondering if the hon. member could comment on this aspect of the trade deal.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, chartered accountants call it “tax motivated expatriation”. We call it “sleazy, tax cheating loopholes” and it is appalling.

I read a five-part series by Diane Francis in the National Post, not exactly a right-wing rag, that denounced and decried the federal government for allowing tax loopholes to exist where wealthy Canadian families and wealthy Canadian CEOs of corporations can be tax fugitives and avoid the arm of the Canada Revenue Agency. They do not have to pay their fair share which means we have to pay more. Even a right-wing journalist like Diane Francis says it should not be allowed.

The Conservatives not only turn a blind eye to it, but they ratify, endorse and legitimize it by entering into a trade agreement with a country that makes its living by sheltering drug money and offering tax havens for tax fugitives like members of the Canadian Council of Chief Executives headed by John Manley, the rich guys.

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I am pleased to have the opportunity to add my own reflections with respect to Bill C-46, the bill to engage in free trade with the Republic of Panama.

For just a moment I would like to reflect anecdotally on my insights on the role I think Canada should be playing in a hemispheric sense.

The globalization of capital reminds us that we live in a very competitive economic environment where the barriers to the flow of capital and investment should be reduced. The economic and fiscal corollary is that is necessary for us to reduce barriers to investment in our own economy. Traditionally, we have had high tax barriers as part of our national policy. Those particular approaches cannot be part of the character of a modern economy.

As a young person, I had the opportunity to work in the Caribbean and to travel extensively throughout Latin America. As a result of that experience back in the mid-1960s, it was my perception that because Canada was not a colonial power and not a country with a reputation for exploiting economies and people, as had been characteristic of history, we had a natural affinity and responsibility, in fact an opportunity, to develop hemispheric relationships, particularly with the Caribbean, Latin America and South America, whereas European countries had a natural affinity, a responsibility and accountability for development in Africa and Asia.

I do believe that the free trade agreement and the movement to free trade had their roots in those perceptions, those senses of what Canada's role could be in developing the kind of relationships that were more in keeping with the 20th century, the 21st century and, in fact, the future.

I will give the government credit for its outreach to the Caribbean countries, the conferences that have been held with CARICOM, the development of relationships that are non-exploitive in an historic sense, which are opportunities for the Caribbean, and now for Latin American and South American countries, to start to deal with the very issues that are residuals of the isolationism that we have had in a hemispheric sense.

Thus, while I acknowledge the points that have been made with respect to labour and human rights legislation, I also acknowledge the irrelevancy, the acrimonious base, in fact, that is established through tax haven approaches, which have been very competently described. These are the residuals of tax regimes and outlooks and viewpoints that have created the kinds of problems that have existed in social, humanitarian and criminal terms.

If anyone is to argue that we can go forward by looking backwards, that we can go forward in dealing with these humanitarian, labour and fundamentally criminal issues related to taxation, which are in fact anachronisms in today's global community, then the place where we should begin to deal with those is in our own backyard, in our own hemispheric relationships, where we have patterns of immigration, investment and reciprocity that are stronger in human terms, in fiscal and economic terms, and in terms of our own self-interest.

If we argue that what goes on in Mexico with respect to the criminal activity around drugs is only happening in Mexico, if we argue that the issues with respect to Caribbean countries and their being used as turnstiles to subvert Canadian youth in our cities, and if we argue that those are going to be addressed by isolating those particular countries, we are in fact going in a very wrong direction.

Using that as an introduction to the premises that I hope the House will use in establishing a framework for evaluating our economic outreach, I would indeed hope that, per Maslow's hierarchy of needs, self-interest and self-preservation are at the top.

What we are doing is that we are dealing with countries in a hemispheric sense, where we have historic and huge issues that are either going to be a foundation for progress or are going to continue to drag us back, and we and our children and our children's children will suffer for that.

I look at free trade agreement with Colombia, the outreach to the Caribbean, and I look at Panama now and hope that the House was sensitive to the characterization of “losers”. I have great respect for the member and I know that in the heat of the moment, that was the characterization. I know that is out of character for that member.

Here we have a country that was subject to the criminal activity of a man who is now incarcerated but was the president of Panama and who exploited that country and who characterized all that is bad, and now we have a new, free and democratic government that has thrown off the shackles of control of the United States and the Panama Canal and has now inherited its rightful heritage. We have a country that characterizes in every way the hope and aspirations of its young people.

We hope that those aspirations do not find themselves expressed on the streets in rioting in Panama City, as they are in Egypt, Tunisia and other states, where young people look down at the United Arab Emirates, at Abu Dhabi, and at the tremendous development in technology and the luxury cars and so on, and they ask what is happening to them with the unemployment in Egypt and Cairo?

The young people are saying there has to be a change. That change in Panama has been remarkable over the last few decades. That is not to say there are not problems in Panama, but they are representative of the kinds of issues we all have to deal with.

Again, reflecting on that, here I see a treaty that I am going to call a fair trade treaty because it takes the remarkable growth in Panama and reduces the high tariffs reciprocally, as other speakers have talked about.

In terms of the labour and human rights issues, while it would be better that they were entrenched in the agreement, which we would all support, this is a starting point. This is neither the beginning of the end nor the end of the beginning. It is a threshold that we can cross with the people of Panama, as we should with many other countries hemispherically, with whom we share a huge future relationship.

The time to start that is now.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Mr. Speaker, I wonder if my colleague might comment that in fact ratifying the Canada-Panama free trade agreement is a good thing because Canada is a trade-dependent nation and it will lead to growth. In fact, if we get ahead of the United States, it leads to a comparative advantage and will create jobs for Canadians.

I want him to comment on the NDP's concern that Panama is a tax haven. In fact, we have agreements with many tax havens. We trade with many tax havens. I wonder if the NDP thinks we should eliminate those agreements with countries like the Cayman Islands, Switzerland, Liechtenstein, et cetera.

It is criminals who launder money. It is criminals who do not check whether a free trade agreement is in place before they conduct criminal activity.

I wonder if the member thinks this is just a red herring and, in fact, ratifying this treaty is not actually good for our economy.

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I do not think it is a red herring.

There are the sidebar agreements. The issue with respect to criminal activity is one that is of huge concern. It is equally concerning that our colleagues in the New Democratic Party have, from time to time, concentrated on the whole issue of human rights, labour relations, the right of free association, and so on and so forth. The sidebar agreements are not stand-alone silo agreements. They must come under the principles of the international federation of labour and the International Labour Organization.

I am confident that the professionalism, capacity and expertise of those organizations and the opportunity to use them in the manner in which labour organizations and activists have indicated is a good match. We should help them in that respect because it will reinforce the principles of the free trade agreement as they relate to on-the-ground implications and the impact on the citizens of Panama.

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board]

Mr. Speaker, I want to ask the member opposite what his thinking is about Canada's responsibility to other nations around the world. We have been blessed in many ways in this country with the history of our institutions and the strength of those institutions that many other countries do not experience.

I am wondering how he sees the principles of freedom, democracy and the strength of our institutions tying into our responsibility around the world. I would ask him to tie them to our trade agreements and the kinds of agreements that we have made around the world with various nations.

[Alan Tonks, Liberal, York South—Weston, ON]

It is a good question, Mr. Speaker, and it gives me an opportunity to applaud the outreach of some of our former parliamentary colleagues.

We all know about corruption and the implications of corruption in other countries from a perspective of what we can do with respect to sharing what the member has described as our growth in democratic and humanitarian terms. We have colleagues who as part of an organization travel throughout the world and talk to activist groups, non-governmental organizations, government and parliamentary associations in other countries, sometimes at great risk to themselves. They attempt to graft onto those political situations the kind of institutions and institutional experience we have had over the growth of our parliamentary traditions. I laud those members. They come from all sides of the House.

That is a role Canada can play not only in a governmental sense but in a non-governmental sense. We can have a pervasive impact on developing respect for fundamental human rights and mirroring that in democratic institutions. Those efforts will make that kind of outreach more than cosmetic. They will be deep instruments of progress and a better legacy for Canada internationally.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, I believe we should carefully and constructively study what the Canada-Panama free trade agreement says.

I believe we should discuss the questions already raised about human rights and tax havens. They should not be set aside. For example, we know that last July there was a new wave of union repression in Panama that resulted in the death of several workers, more than 100 injured workers and more than 300 arrests, including the arrests of the leaders of two unions, SUNTRACS and CONATO. That was the brutal response of the Panamanian government to protests against a new law restricting the right to strike and freedom of association and providing for prison sentences of up to two years for any worker who protests in the street. This simply shows that the agreement on labour co-operation will not really protect the rights of workers in Panama because it does not contain any real enforcement mechanism and the Panamanian government clearly intends to ignore it.

According to the OECD, Panama is an offshore banking centre and a tax haven. We have already discussed the issue of tax havens. This agreement does not address tax havens and the lack of financial transparency. A free trade agreement modelled after NAFTA would broaden the scope of the foreign investment promotion and protection agreement and would further encourage corporations to commit tax evasion. It would give multinationals other tools and reasons to challenge Canadian regulations.

[The Acting Speaker, Conservative, Barry Devolin]

I must interrupt at this time. When the House returns to this matter, the hon. member for British Columbia Southern Interior will have seven minutes remaining.

It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The House resumed from November 23 consideration of the motion 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.

Speaker's Ruling

[The Acting Speaker, Conservative, Barry Devolin]

The Chair is now prepared to rule on the point of order raised by the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons on November 23, 2010, concerning the requirement for a royal recommendation for Bill C-574, An Act to promote and strengthen the Canadian retirement income system, standing in the name of the hon. member for York West.

I would like to thank the parliamentary secretary for having raised this issue as well as the hon. member for Mississauga South and the hon. member for York West for their contributions on this matter.

In presenting his concerns with respect to Bill C-574, the parliamentary secretary noted that in clause 13 the bill contains a new obligation for the Minister of Justice to “examine every regulation transmitted to the Clerk of the Privy Council for registration pursuant to the Statutory Instruments Act, as well as every bill introduced in or presented to the House of Commons by a minister of the Crown, in order to ascertain whether any of the provisions thereof are inconsistent with the purposes and provisions“ of Bill C-574.

In his view, this new duty would significantly alter the functions of the Minister of Justice, as it would require actuarial, financial and economic expertise that does not currently reside within the mandate of the minister. Accordingly, he contended that this new obligation infringes upon the financial initiative of the Crown.

In support of his claim that the bill requires a royal recommendation, the parliamentary secretary made reference to previous Speaker's rulings regarding bills that require a royal recommendation because they were adding a new function to an existing mandate. He also referred to some of the current duties and functions of the Minister of Justice with regard to the making of federal acts and regulations, specifically those described in sections 4.1 of the Department of Justice Act, as well as section 3 of the Canadian Bill of Rights.

During his intervention, the member for Mississauga South stated that the Minister of Justice is tasked with providing legal opinions on many matters, the substance of which are not necessarily directly within the jurisdiction of the Minister of Justice. In addition, he outlined that in fulfilling this broad responsibility and through proper due diligence, the minister already has available to him the specialized expertise of the government as a whole and, thus, has access to all the pertinent information with regard to whatever subject matter is at hand.

The Chair has examined carefully Bill C-574 as well as the precedents cited and the relevant statutes.

It is clear that Bill C-574, in clause 13, would require the minister to review all proposed regulations and legislation to ensure that they conform to the principles and provisions of this bill. The key question then is whether or not this review would significantly alter the existing duties and functions of the Minister of Justice.

The roles and responsibilities of the Minister of Justice are set out in the Department of Justice Act as well as several other acts of Parliament. The Department of Justice is the central agency responsible for supporting the minister in advising cabinet on all legal matters, including the constitutionality of government initiatives and activities. It also provides legal services to the government on issues that span the entire range of activities of federal departments and agencies.

More specifically, the Chair refers members to section 4(a) of the Department of Justice Act, which reads as follows:

4. The Minister is the official legal adviser of the Governor General and the legal member of the Queen’s Privy Council for Canada and shall

(a) see that the administration of public affairs is in accordance with law;

It would seem that this section, along with the general mandate described above, clearly indicate that the Minister of Justice would be well positioned to examine any new regulations and legislative proposals to ensure that they conform to the provisions of Bill C-574.

It may be that such a review would require a certain amount of coordination of resources, perhaps even resources of an actuarial, financial and economic nature as noted by the parliamentary secretary, however, the related expenditures would be operational in nature. Therefore, the Chair cannot accept the argument that Bill C-574 would entail the expenditure of public funds by the minister for a new and distinct purpose.

Accordingly, the Chair finds that Bill C-574 does not significantly alter the duties and functions of the Minister of Justice and therefore does not require a royal recommendation.

I thank honourable members for their attention.

Second Reading

[Shelly Glover, Conservative, Parliamentary Secretary to the Minister of Finance]

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.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, in preparation for today's debate, I went through some material that came across my desk and I ran across a newsletter called Seniors’ Voice, which is published by Senior Power of Regina Inc.

I am trying to link why we are seeing increased poverty among seniors and among others. I am trying to link this up with the film I saw recently about poverty in general called Poor No More.

I will quote from Seniors' Voice to help us understand what is happening and how we can address priorities, in part, through the bill. This document talks about the power of corporations in our society today. It states:

Corporations have become so powerful that they now control the dominant global economic system as well as the governments of most countries. They own the mass media outlets. The would-be prominent champions of social and economic justice have been marginalized and ridiculed. Even the academics who dare to sound the alarm about global warming or the unfair distribution of wealth risk being discredited by the PR lacks of the corporations that benefit from pollution and poverty.

This overpowering influence of multinational corporations has stifled dissent and made travesty of allegedly democratic governance. It has entrenched an economic system that feeds, parasitically, on the planet's dwindling natural resources.

This may sound extreme and not all of us would agree verbatim with what is happening.

The reason we have more people in poverty, specifically seniors, is because of the way we regulate our revenues.

I mentioned the film Poor No More, which is narrated by Mary Walsh. The film talks about the influence of corporations on our government and other governments in the world and the policies that have been made as a result of this influence. It talks about the rising inequality, the corporate agenda that has taken hold of governments in the country.

An analysis of the film was done by journalist Murray Dobbin, who looked at the various corporate tax cuts that had taken place over the last few years under the previous government and the current government. He crunches the numbers and says that had we not made these cuts, we could have top quality health care. We could pay for half of the tuition of university students. We could ensure that every senior lives in dignity and out of poverty. We could have top quality care for seniors and a first-class child care program. We would still have around $20 billion left over for other needs.

We need these kinds of bills and discussions because governments have made choices and often their choices have not been in the best interests of the people of the country, but have been in the best interests of those such as the Council of Chief Executives, now chaired by John Manley.

Bill C-574 is an attempt to make things better. I thank the hon. member for York West for introducing the bill. The NDP supports the bill going to committee.

This bill creates individual rights related to pension income, 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 involved in the plan, and so on.

Bill C-574 creates rights, but does not amend the relevant legislation to enshrine these rights. It seeks greater transparency in pension fund management, but most of the funds come under provincial jurisdiction.

The NDP is also in favour of greater transparency in government pension fund management. In fact, the pension critic, the hon. member for Hamilton East—Stoney Creek, has already introduced a private member's bill, Bill C-361, An Act to amend the Public Sector Pension Investment Board Act (reduced risk), which presents in detail how to enhance this transparency.

In addition, with regard to Bill C-574, apparently, according to my colleague from Hamilton East—Stoney Creek, none of the national organizations that represent seniors are publicly acknowledging this bill because they think it does not go far enough. However, in light of our past commitments, it would be difficult for us to not give our support to this bill. I have always said that nothing is perfect. You always have to start somewhere and we will start by supporting this bill and sending it to committee.

In general, the NDP believes that Canadians should be able to retire comfortably and securely. Like every party, we have a plan for pension reform. It is a four-point plan. I will try to talk about our vision a little later.

The member for Hamilton East—Stoney Creek stated the following on a cross-country tour:

I know from my travels throughout the country listening to seniors that there is a need for an immediate and consistent increase to programs like the GIS and the elimination of benefit clawbacks. After facing a two year freeze of old age security, seniors are telling me that the extra buck fifty this government is giving just isn't enough.

The bill my colleague is talking about his private member's bill, Bill C-564. The bill would mandate that programs such as the guaranteed income supplement are indexed to the cost of living. It would bring senior support programs in line with most government support programs, which are already linked to the consumer price index. The seniors CPI act would also create a new measure that would take into account purchases that are specific to seniors.

I will go into a little more detail on what we envision to help seniors in this country.

As I mentioned, we propose eliminating seniors poverty by increasing the income tested guaranteed income supplement, GIS, by $700 million a year. What is interesting is that this is less than half the corporate tax cuts that were due January 2010.

We also propose working with the provinces to phase in a doubling of the CPP and the Quebec pension plan benefits from about $11,000 a year to almost $22,000. This would give Canadians a chance to save in the least expensive, most secure, inflation-proof retirement savings vehicle.

What would the cost be for something like this? According to our calculations, an additional 2.5% of wages matched by employers, which is less than what one would pay for private savings plans, money one would often never see again.

Once again, we can look at this with the backdrop of the film I was talking about. I would recommend that members try to get hold of the film, Poor No More . It does not cost very much to download it from poornomore.ca.

We see that choices have been made in other areas. All governments make choices. For example, rather than choosing to double the CPP, the choice is to give corporate tax breaks. Rather than choosing to increase the GIS, the choice is to purchase stealth fighter jets, and we have had a discussion on that.

Certainly we will support sending this bill to committee, but there are more issues we have to look at in-depth when we look at poverty and seniors.

[Judy Foote, Liberal, Random—Burin—St. George's, NL]

Mr. Speaker, I am pleased to speak to Bill C-574, an important and timely piece of legislation introduced by the hon. member for York West, who is also known as our critic on seniors and pensions.

This piece of legislation, known as the “Retirement Income Bill of Rights”, has become very popular throughout the country. My colleague has travelled throughout the country and has had discussions from coast to coast to coast on the importance of dealing with issues affecting seniors and pensioners.

This is the first bill of its kind ever proposed to protect our seniors and their savings. 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.

Bill C-574 has been well researched and vetted. It is the product of months of research and consultations with legal experts, government officials, and most importantly, seniors and pensioners. The bill is a comprehensive piece of legislation that does not aim to simply change one thing or another; rather, it is designed to address systematic and societal challenges relating to Canada's pension system and retirement income.

In developing this bill, the hon. member for York West who, as I said, is the official opposition's critic for seniors and pensions, went from coast to coast to coast. She spent time in my riding of Random—Burin—St. George's. One troubling theme became obvious when she was in my riding. It is clear that Canadians are not saving enough for their retirement, not because they do not want to, but simply because they cannot afford to. It is a sad reflection on our nation when our pensioners and seniors are in such dire straits that they have trouble contributing to their own savings and their own retirement incomes. It is a troubling trend. Fortunately in this House of Parliament we have the opportunity to change that. As legislators we can directly affect that.

The people we met in my riding encounter difficulties day to day, whether it is in paying high home heating costs, paying for the rising cost of gas, or paying their electrical bills that are going up all the time. It is a sad reflection on our society today that in a lot of cases seniors have to leave their homes in the daytime and spend time in shopping malls just to keep warm. They have to make decisions about whether they buy food or medication, or whether they heat their homes. They cannot do all three, again because of their income.

From old age security to the CPP and the supplement, we understand the extreme importance of protecting and preserving pension security and ensuring adequate coverage for all Canadians in the years after they stop working.

There are some dismal statistics to report. There are more than 200,000 Canadians over the age of 65 who live below the low income cutoff line. In a country like Canada, it is disgraceful. It is unfortunate that the government seems to be untroubled by the situation. The government prefers to cut social programming and essential services and make irresponsible corporate tax cuts worth billions, $6 billion a year to be precise. This is to say nothing of the government's priorities to fund things like multi-billion dollar fighter jets and U.S.-style mega prisons.

All of these initiatives pale in comparison when we consider the situation that our seniors find themselves in today.

Statistics Canada also tells us that Canada's population over the age of 65 could reach an unprecedented 10.9 million by 2036. Seventy-five per cent of those people will not have an adequate source of retirement income. That is because most Canadians working in the private sector do not have a pension plan and are not saving enough. They are effectively prevented from accumulating the same retirement income as their public sector counterparts.

With those 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.

The basic cost of living is taking its toll on seniors and retired Canadians. Most Canadians will find it harder and harder to get by on CPP unless the system is changed.

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. This creates a large societal imbalance when it comes to retirement income.

Public sector workers make up only a very small percentage of our population. Hard-working Canadians who spend a lifetime working in industries like the agricultural industry or as small business owners, or who stay at home to care for their children and families will not have the benefit and security of such generous pension plans.

As it stands now, the Income Tax Act states that an individual cannot have a generous defined benefit pension plan unless it is provided to him or her by his or her employer. Most employers in Canada do not provide for such a pension plan.

This bill is concerned with creating the conditions in which all Canadians would have access to pension plans that help them save for a secure retirement.

In particular, clauses 4 and 5 of Bill C-574 guarantee equality of opportunity. The bill would provide that any federal law that has the effect of restricting an individual's right to join a pension plan or flexibility to make the contributions necessary to accumulate an adequate retirement income would indeed be a violation.

If Bill C-574 becomes law, it would be unlawful to prevent people from joining a pension plan or restrict their right to make contributions, subject to reasonable restrictions that would apply equally to all individuals.

The hon. member's bill aims to eliminate the barriers that currently prevent the self-employed, fishers, farmers, homemakers and all others in the workforce who do not now have access to pension plans to allow them to save effectively for retirement.

Bill C-574 acknowledges that dignity in retirement is a right and that we as legislators should move to ensure that all will have such dignity through a secure and equitable retirement income regime.

This bill would also ensure that every Canadian would have access to effective retirement savings mechanisms. It would do this through empowering people with detailed, up-to-date, conflict-free information about their financial future.

The goals of this bill are simple: 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 they need about their plans; and to set out in law the goals to which we aspire legislatively as they relate to retirement income.

It is simply unacceptable that in this great and prosperous nation many elderly people live in poverty or near poverty. The Liberal Party has always understood and championed the values of security, safety and dignity.

One of the most important aspects of the bill is financial literacy. For the most part, Canadians are unsure as to the existence and/or impact of various tax provisions, savings vehicles and/or estate planning options. It is widely accepted that Canadians collectively spend billions of dollars each year on service charges, interest expenses, fees and lost income resulting entirely or in part from a lack of financial literacy. By providing greater access to timely and easily understandable financial management information, Canadians could save money which could be redirected to retirement savings.

The Liberal Party fully supports strengthening our retirement systems. Pensions and their protection is a priority for us. The Conservative Party, on the other hand, has a history of opposing improvements to Canada's pension plans, and of ignoring one of the most vulnerable groups in society.

While we have an old age security and pension system that has served Canadians well in the past, the Liberal Party recognizes there is a need to improve upon the system that we have grown and nurtured over the years.

As I meet with my constituents, it becomes obvious that the need is great. We need to deal with that. We need to start addressing the pension shortfalls today if we are to prevent a full-blown crisis in the years ahead.

In closing, the guiding principle behind the bill is the belief that a strong and secure retirement income system is essential to the well-being of Canadians.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I want to thank all my colleagues for their support on the bill today and for your ruling on the royal recommendation. I had actually forgot it had been raised at an earlier time. I appreciate that the decision was to allow it to go forward to committee subject to everyone's support.

Anyone who has been studying the issue of pension reform, and I think in this last year or two many have been doing that, would know that we have learned about defined benefits and the benefits of what a defined benefit pension plan means. Those who have defined benefit plans have five to seven times higher retirement income than other people. That may be great for all those who have defined benefit plans, but we have to stop and think about those who do not have access to them and what we can do to level the playing field.

Put another way, those who have the opportunity to save effectively in things like defined benefits for retirement have much more gold in their golden years. That is what this is all about. That is precisely why Bill C-574 is so important today.

Traditionally, defined benefit plans are available only to public sector workers and to a very small minority of private sector workers in Canada. This means that only those working for very large companies or for the government have access to this type of retirement plan. We, as MPs, are very fortunate to have access to that. A short look at just what that means shows us how lucky we are to have that opportunity. We should reinforce our desire to ensure other Canadians have better opportunities for retirement. This is clearly wrong and Bill C-574 is intended to be the first step toward correcting that inequity.

This legislation is the first of its kind ever proposed to ensure future seniors have better nest eggs and the retirement income security they will need for all future years. In broad strokes, the bill would create substantive justiciable rights relating to retirement income, as my colleague has indicated, giving every person a chance to accumulate retirement income and promote good plan administration.

We have heard a lot in the last two years about the pensions plans of Nortel and other companies and what has happened to people's retirement income. It really calls on all of us to do what we can to start to put things in place that protect retirement income.

I want to take a moment to underscore this final point because it is one of the most important.

Bill C-574 would set out in law the end goals to which we should aspire legislatively as they relate to retirement income. It would legally compel both the current federal government and future governments to take real action to promote, enhance and preserve retirement income security, coverage and adequacy.

For years, successive governments have set out their plans to help enhance pensions in Canada, but they have done so without any sort of long-term road map. Clearly we have learned over the last several years the need for a long-term road map, so that in the next 20 years when people retire, they have adequate income. Otherwise, it always falls back to the provincial, municipal and federal governments to provide the funds.

That still does not give people a decent level of living. It still means that they are living just at minimum. If we can encourage the changes necessary through legislation and the Income Tax Act to provide the vehicle to protect their money, to ensure they understand full disclosure from the various companies that promote products for retirement and do everything we can to encourage people to put money away, it would certainly benefit all seniors in the future and us as a country. We would have a richer country. When we all reach the age of retirement, we will have what we need for successful and fruitful retirement, which is a lot of gold in the golden years. However, that will take all of us.

Again, I thank all my colleagues for their support. I look forward to future discussions on Bill C-574.

[The Acting Speaker, Conservative, Barry Devolin]

The time provided for private members' business has now expired.

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[An hon. member]

On division.

[The Acting Speaker, Conservative, Barry Devolin]

I declare the motion carried. Accordingly the bill stands referred to the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

(Motion agreed to, bill read the second time and referred to a committee)

It being 2:11 p.m, the House stands adjourned until next Monday at 11 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 2:11 p.m.)