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House of Commons Hansard #69 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was plan.

Topics

Pooled Registered Pension Plans ActGovernment Orders

4:15 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, I wonder if the member could provide me some information in terms of the NDP policy. Whether it is the OAS, GICs, or CPP, all these are wonderful pension programs, we understand, in terms of where the Conservatives are coming from on this, which creates a great deal of concern, not only for Liberals but, I suspect, also for New Democrats and for the vast majority of Canadians.

Where I am a bit confused is in terms of what degree does the NDP, as a political entity, believe that an individual should be encouraged or the government should be providing any sort of incentive for individuals to participate in pension programs that go beyond those government programs, which in good part were formed by Liberal governments in the past.

Pooled Registered Pension Plans ActGovernment Orders

4:15 p.m.

NDP

Joe Comartin NDP Windsor—Tecumseh, ON

Mr. Speaker, most of our pension system came out of the CCF and the NDP proposals over the last approximately 80 years when we first started and were eventually picked up by other political parties and implemented.

With regard to the basic question, what he is asking is if people should plan for retirement and contribute to it. From any side of the House, we are all going to say, yes, we all should be doing that.

For those who are more vulnerable, those with disabilities, limited incomes, maybe a series of times when they were unemployed, there has to be a plan in place for government to be play a role there to assist them so they can retire in dignity because they have contributed to this society throughout that period of time. It is always a question of the details and to what degree, such as how much should government be doing, how much should the private sector be doing, how much should the individual be doing.

Bill C-25 does not address that in any realistically plausible way of being successful.

Pooled Registered Pension Plans ActGovernment Orders

4:15 p.m.

NDP

Chris Charlton NDP Hamilton Mountain, ON

Mr. Speaker, I am pleased to get a chance to rise in the House today to debate one of the most important issues of our times: pensions.

It is unfortunate that the Prime Minister and I fundamentally disagree about what those pensions ought to look like. In fact, judging by recent polling of seniors, there are not many Canadians who believe that the Prime Minister is on the right track when it comes to the income security of Canadian retirees. No wonder he waited until he was on the other side of the Atlantic to announce, in Davos, Switzerland of all places, that he would be cutting big chunks out of Canada's old age security system. So much for accountability to Canadians.

Thankfully, Canadian pensioners are much more savvy than the Prime Minister gives them credit for. They are not frail and disengaged. On the contrary, when it comes to their income security, they are ready to fight for what is right. After all, they have worked hard all their lives, they have played by the rules, but now everywhere they turn, every bill they open, they pay more and get less.

It is a well known fact that increases in the cost of living hit seniors disproportionately harder than any other segment of the population. When Statistics Canada determines the annual cost of living upon which adjustments are based, its basket of goods include electronics like iPods, plasma TVs and computers, which are all goods coming down in price and reducing the cost of living figures. However, they are also goods that seniors are not buying. The items they spend money on are essentials like heat, hydro, food and shelter, all of which are outpacing their incomes.

It is no wonder that the vast majority of Canadians are deeply worried about not having enough money to live on after retirement. They are worried about the solvency of their private pensions and the adequacy of both CPP and public income supports. Let us talk about each of those for a bit.

Record job losses, the decline of entire industries and the collapse of larger employers are throwing hundreds of thousands of hard-working Canadians out of work. Far too many bankrupt employers are leaving underfunded pension plans in their wake. Through no fault of their own, workers are now finding that despite their years of making pension contributions, they can no longer count on a secure workplace pension.

However, workplace pensions are just part of the problem because only one-third of Canadian workers have a workplace pension. Similarly, only one-third of Canadians contribute to an RRSP and those who have just watched billions in precious savings vaporize in the stock market crash of this last recession.

The current system is leaving too many people without the retirement savings they need. There is too much at risk and not enough security. Let us face it, for more than a generation, wages have failed to keep pace with the cost of living and most Canadians have not been able to save what they need.

The urgent question before us today is this. What is the best way to help today's workers save enough money for tomorrow? The answer to that is clearly not to be found in the Prime Minister's speech in Davos.

In the past, Canadians came together during crisis to create solutions, to minimize risk by sharing it. That is what we did when we created public health care and, yes, that is what we did when we created public pensions. However, not under this Prime Minister. Instead of looking to opportunities to strengthen our pension system, he said that the demographic pressures from our aging population, “constitute a threat to the social programs and services that Canadians cherish”. Instead of securing our pension system to ensure sustainable prosperity for seniors, he announced that he would limit spending on pension programs.

While no one is quite clear on what exactly he meant, there is a widespread belief that the Conservatives will raise the minimum age at which people become eligible for full old age security payments, from 65 to 67. However, what is clear from the same speech is that we can afford to ensure that Canadian seniors live in the dignity to which they are entitled. As the Prime Minister correctly pointed out in Switzerland, Canada is no Greece.

Government debt levels as a percentage of gross domestic product are low. The federal deficit is being reduced ahead of schedule. There is no fiscal crisis in our country. Funding OAS takes the equivalent of 2.4% of the GDP. It is among the lowest of OECD countries. Italy, by contrast, spends 14% of GDP on public pensions.

True, by 2031, as the wave of baby boomers reaches retirement age peaks, the OAS' share of GDP will increase to 3.14%, an increase of 0.73% of GDP from today's level. However, as UBC economics professor Kevin Milligan points out, an increase of 0.73% cannot be ignored, but neither is it disastrous. When the baby boomer bulge starts to recede, as it will from about 2020 on, spending on the elderly will start to decelerate on its own.

Clearly this attack on the OAS is nothing more than an ideological assault on public pensions. So what do we get instead? Pooled registered pension plans, the enabling legislation for which is before us in the House today.

Ostensibly designed to address the fact that modest and middle income households are at risk of under-saving for retirement, the Conservatives want to work with the provinces to create an option of pooled workplace pensions administered by financial institutions.

In other words, the Conservatives are encouraging families to gamble even more of their retirement savings on failing stock markets. It is a voluntary defined contribution plan that is run by wealthy financial institutions investing in tumbling markets. That uncertainty and volatility leaves families without any guarantees that their savings will be there for them when they retire.

As one critic of the bill so aptly put it, we must conclude that this is an agreement to do nothing except perhaps a handout to the financial services industry at the expense of the average Canadian.

Let us face it, we do not need to reinvent the wheel when it comes to pension security. We do not need Bill C-25. The best way to help today's worker save enough money for tomorrow is through an improved Canada pension plan. Over the next several years we must lay the foundation to double CPP benefits for the future.

The CPP has been proven time and again to be a safe, secure and efficient retirement savings plan. As the Prime Minister himself noted, the CPP is “fully funded and actuarily sound”. It is portable from job to job and across provinces. It keeps up with inflation and 93% of Canadians are already members.

Because the CPP operates independently from government, there is no cost to taxpayers. In fact, there is the potential for governments to save money over time.

Higher and more secure pension savings means seniors will be less likely to rely on income supports like the guaranteed income supplement or provincial and local social supports for medicine, housing and food.

The cost to workers and employers is manageable. Over seven years, CPP premiums would only have to rise by 0.4% each year of pensionable earnings.

We all need to save more for retirement and putting that little extra into the CPP makes more sense than investing in risky RRSPs, pooled or otherwise. It is safer, easier, in fact it is effortless, and it earns more.

It is time for the government to come clean. The Conservatives found $9 billion for prisons. They found $30 billion for fighter jets. They found $6 billion for more corporate tax cuts. However, they say they cannot find the money to protect the pensions of Canadian seniors.

Clearly this is not about money; it is about choices. I choose to invest in people. I choose to stand up for Canadian seniors and for retirement with dignity and respect.

Pooled Registered Pension Plans ActGovernment Orders

4:25 p.m.

Conservative

Joy Smith Conservative Kildonan—St. Paul, MB

Mr. Speaker, I would agree that this is about protecting seniors. This is about dignity and respect. Clearly our side of the House has made it quite clear there would be no changes to the benefits that seniors currently receive. Very substantial notice would be given to any changes that would be made and an adjustment period, which would not reflect upon retirees or those close to retirement.

In actual fact, our government has shown a great deal of responsibility by projecting into the future. To do that, we have to ensure that these very special programs like CPP and OAS remain strong in our country.

With the aging demographic and with the change in the demographic in the country, we have to ensure that needs of seniors are met. It is about doing things in a balanced way that would ensure the future.

I would like to ask the member a question about some of her comments. How does she intend to have this balance maintained in our country if we do not look at these pension plans and do the right thing?

Pooled Registered Pension Plans ActGovernment Orders

4:25 p.m.

NDP

Chris Charlton NDP Hamilton Mountain, ON

Mr. Speaker, the answer is fairly simple. The right thing to do is to invest in seniors instead of investing in megaprisons that we do not need and fighter jets that do not work. This is about choices.

The member says that that would not impact the people who are currently seniors. Oh, really? I do not think we have seen any of that before in this House. We have not received any guarantees. Except for what some of the members were saying this afternoon, we have not heard any specifics. Even if that were true, the people who would be impacted are the very workers who today are losing their jobs in plants from coast to coast to coast. Those workers are losing their workplace pensions because the government did not do its due diligence with respect to the Investment Canada Act, as was the case with Stelco when it was bought out by U.S. Steel. The workers there are now worried about their pensions. Workers at Vale are worried about their pensions.

I invite the member to go to London and talk to the folks working at Caterpillar. They are now worried about their pensions. They cannot count on their workplace pensions and now the government is telling them that they cannot count on their OAS pension either because it may be taking that away from them as well. If we do the math, that is taking $12,000 away from the people who are counting on their public pensions to support them in their retirement.

I do not know how the member can stand in the House and say that she supports retirements with dignity and respect when the government is taking money away from hard-working Canadians and not allowing them to have the retirement they have earned.

Pooled Registered Pension Plans ActGovernment Orders

4:30 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I have two questions for my colleague concerning her excellent speech. Various people have said that the program provided for in Bill C-25 would be adapted to local conditions, and that nothing else can be done with respect to the Canada pension plan.

There are a lot of optional programs available that offer financial and tax incentives, such as RRSPs, group RRSPs, TFSAs and so on. The government can increase CPP contributions for all Canadians, but when it comes to RRSPs, for example, only 30% of Canadians contribute. Despite tax incentives, 70% of Canadians do not have the means to invest. Forty per cent of Canadians invest in TFSAs, but half of those investors earn over $100,000 per year. Very few Canadians earning less than $100,000 have been motivated to invest.

Will the voluntary participation plan provided for in Bill C-25 solve the problem of the 12 million Canadians who do not have workplace pension plans?

Pooled Registered Pension Plans ActGovernment Orders

4:30 p.m.

NDP

Chris Charlton NDP Hamilton Mountain, ON

Mr. Speaker, by its very definition, a voluntary program will, obviously, not develop the same kind of sustainability and pool of pension funds that an excellent plan like the CPP has developed over time. That is one of the reasons that we are supporting the CPP as the best alternative for a public pension system to support retiring workers.

The member is absolutely right. We have the TFSA and RRSPs. Private retirement savings vehicles are already in place. We do not need pooled pension plans on top of that. The reason there is only 30% take-up is that people do not have money to put into these investment vehicles. Anybody in the House who has been following the news knows that we have been experiencing plant closure after plant closure. Decent paying jobs are lost in this country and are replaced by minimum wage jobs. People on minimum wage do not have money to put into TFSAs or RRSPs and they certainly do not care whether a pooled pension plan is created. They do not have the money to invest.

Pooled Registered Pension Plans ActGovernment Orders

4:30 p.m.

Conservative

Mark Strahl Conservative Chilliwack—Fraser Canyon, BC

Mr. Speaker, it is an honour to speak in favour of Bill C-25, the pooled registered pension plans act. I will be splitting my time with the hon. member for Bruce—Grey—Owen Sound.

Ensuring that hard-working Canadians can retire with dignity has been a top priority of this government since our election in 2006. I am proud to say that we have taken a number of initiatives to help Canadian seniors.

In 2009, we introduced a number of changes to the framework for federally regulated registered pension plans. Improvements included ensuring that an employer fully funds benefits if the pension plan is terminated and providing sponsors of defined benefit pension plans more funding flexibility.

Also in 2009, Canada's governments completed their mandated tri-annual review of the CPP, which modernized the plan to better reflect how Canadians currently live, work and retire.

Our government is delivering for seniors.

Just recently, the 2011 budget announced a new GIS top-up benefit for Canada's most vulnerable seniors. Seniors with little or no income are receiving additional annual benefits of up to $600 for single seniors and $840 for couples, benefiting 680,000 seniors across Canada.

We introduced the tax free savings account, a flexible, registered, general purpose savings vehicle that allows Canadians to earn tax free investment to more easily meet their lifetime saving needs, including retirement savings.

We also provided $2.3 billion in additional annual targeted tax relief to seniors and pensioners through measures such as pension income splitting, increases in the age credit amount and a doubling of the maximum amount of income eligible for the pension income credit.

There is much good news to report on the state of Canada's seniors. Among OECD countries, Canada has one of the lowest poverty rates among seniors, 4.4% compared to the OECD average of 13.3%. The disposable income of Canadians over the age of 65 is 90% of the average disposable income of other Canadians.

The problem we have today is that 60% of Canadians do not have a workplace pension plan. Addressing this issue has taken my colleague, the Minister of State for Finance, to communities across this country where he has been consulting with Canadians, meeting with our provincial and territorial counterparts, and discussing key considerations with small and medium-sized businesses.

As a result of these consultations, Canada's finance ministers agreed on a framework for the introduction of an innovative new private sector retirement savings vehicle, the pooled registered pension plan, or PRPP. This marks a significant step forward in advancing our retirement income agenda. It is the result of careful consideration and deliberation with the provinces and territories, key stakeholders and experts, and Canadians themselves.

I want to be clear. The move to create pooled registered pension plans was unanimous among the provinces and territories. The finance minister of my home province of British Columbia, the hon. Kevin Falcon, said:

British Columbia is of the view that pooled registered pension plans could be part of a package of reforms to make saving for retirement easier, more affordable and more secure for Canadians.

Quebec's minister of finance, the hon. Raymond Bachand, said:

The Government of Quebec welcomes the federal government’s decision to quickly make changes to tax legislation to accommodate PRPPs. This announcement will allow us to fulfill our commitment made in the 2011–2012 budget to put in place new voluntary retirement savings plans.

What the province of Quebec does not support is higher CPP contributions from employees, employers and the self-employed as some members of the opposition have advocated. In fact, the minimum two-thirds agreement among provinces to expand the CPP could not be reached because, at a time of global economic uncertainty, such a plan would have put at risk thousands of jobs.

Let me tell the House who else supports our plan, and that is small and medium-sized businesses.

A Leger Marketing poll conducted for the Canadian Life and Health Insurance Association found a majority of 800 small and medium-sized companies polled were supportive of the PRPP. Frank Swedlove, president of the Canadian Life and Health Insurance Association, said:

These savvy employers know a good thing when they see it. Universal access will assure that all Canadian workers have an opportunity to save at the workplace.

There are many benefits to our pooled registered pension plan. First, our straightforward plan is accessible. It is an administratively low cost retirement option for employers to offer their employees. This would allow individuals who currently may not participate in a pension plan, such as the self-employed or employees of companies that do not offer a pension plan, to make use of this new type of pension plan.

Second, there is flexibility for both employee and employer. Companies can choose whether or not to participate in the plan, and early indications are that many will. Employers can choose to match their employee contributions either fully or partially. Employees can also choose to opt out. At the time of retirement, employees would have the same options available to defined contribution pension plan members. These include the purchase of a life annuity, transfer to an RRSP or a registered retirement income fund. Employees would also have the option to receive payments similar to RIF benefits from the employee's PRPP account.

Third, there is portability. Employees would be able to transfer their savings between PRPPs if they move from one job to another. Most workers will have several careers and work for a multiple number of employers. As they move from job to job, workers could continue to build for their retirement in confidence.

Our plan would fill the gap on the voluntary side of our retirement income system by providing millions of Canadians with access to a low cost pension arrangement for the very first time. The introduction of PRPPs marks a particularly significant advancement in supporting the retirement needs of small businesses and their employees who until now have not had access to the same private pension options.

PRPPs would also complement and support the Government of Canada's overarching objective of creating and sustaining jobs, leveraging business investment and securing our economic recovery in sustainable, private sector driven growth.

Some of the retirement income system proposals that we looked at in those consultations I talked about would have significantly raised costs for employers and employees. Introducing them would have been unacceptable during a very tentative economic recovery. PRPPs on the other hand would be efficiently managed, privately administered pension arrangements that would provide greater choice to employers and individuals, thereby promoting pension coverage and retirement savings.

Through numerous cross-country consultations, our government has talked to many Canadians and heard many challenging personal stories. Canadians have made it clear that this is an issue too important to get wrong. That is why we have devoted considerable effort on the retirement security issue in order to get it right. Our plan has found unanimous support among the provinces and territories. It has wide support among small and medium-size businesses. It would help secure the retirement incomes of millions of Canadians who do not have a private pension plan.

I call on members opposite to join with our government, do the right thing for working Canadians and support the passage of Bill C-25.

Pooled Registered Pension Plans ActGovernment Orders

4:40 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, in listening to the member, what comes to my mind is that many argue that there is a hidden agenda with the Conservative Party. It is when that reform element starts to pop its head. I recall the Prime Minister used to believe that we should privatize CPP, or the idea of moving in that direction.

I listened to what the member was saying and we kind of get the hint that this is what he is referring to. He is saying that the CPP does not necessarily have that same sort of support among the provinces and that it is too much of a challenge to increase the CPP or to gain that momentum. That is where one would expect to see leadership from a government, from a Prime Minister who says that he is committed to government programs, whether it is the CPP, the guaranteed income supplement or otherwise.

Where is the government's commitment to continue to support those programs into the future? Why does the government seem to want to waffle and tend to favour some of those old reform ideas from back in the late nineties?

Pooled Registered Pension Plans ActGovernment Orders

4:40 p.m.

Conservative

Mark Strahl Conservative Chilliwack—Fraser Canyon, BC

Mr. Speaker, I see that the Liberal Party still has not given up on the hidden agenda canard that moved it from this side of the House to official opposition, down to the end as the third party. It continues to promote this idea that there is somehow a hidden agenda.

Nothing could be further from the truth. What we have said is that we are standing to support seniors. What happens when we bring forward initiatives to support our seniors? The Liberal Party votes against them. When we brought in income splitting, the Liberal Party voted against it. When we brought in a new GIS benefit in the last budget, the Liberal Party voted against that too. Whenever we bring in measures that support Canada's seniors, the Liberal Party of Canada will continue to advocate against them. It is on the wrong track. We will continue to move ahead with reasonable voluntary PRPPs that have the support of small businesses and Canadians.

Pooled Registered Pension Plans ActGovernment Orders

4:40 p.m.

NDP

Libby Davies NDP Vancouver East, BC

Mr. Speaker, it is being called a hidden agenda because the Prime Minister forgot to tell Canadians during the election about his big plans on pensions and how he was going to start changing the OAS. He went to Davos, Switzerland to do that. I think Canadians feel pretty mad at him for doing that.

As the Minister of State for Finance said this morning, there is already $600 billion of room under RRSPs. With that much room obviously not been taken up by people who can even afford to contribute in the first place, why would the government set up a crazy scheme in the private market that is not going to benefit the people who need it the most? Why would it set it up in that way? Would the member agree that it is really just window dressing because nobody is going to take it up?

Pooled Registered Pension Plans ActGovernment Orders

4:40 p.m.

Conservative

Mark Strahl Conservative Chilliwack—Fraser Canyon, BC

Mr. Speaker, on the take-up of the program, I will take the word of Dan Kelly, Senior Vice-President of Legislative Affairs at the Canadian Federation of Independent Business, CFIB, who said, “A new voluntary, low-cost and administratively simple retirement savings mechanism will allow more employers, employees, and the self-employed to participate in a pension plan”.

The provinces obviously agree that this is a positive plan because they signed on to it. They are moving to introduce legislation to allow this sort of program to be implemented across all of the provinces. There was no agreement to go down the road of the NDP plan, which would have put employees at risk and raised taxes through payroll hikes. That is not the road we are going down. We are going down the road of a plan that has the agreement of the provinces and the small and medium-sized business sectors. It is the right thing to do. I would encourage New Democrats to vote in favour of it.

Pooled Registered Pension Plans ActGovernment Orders

4:45 p.m.

Conservative

David Wilks Conservative Kootenay—Columbia, BC

Mr. Speaker, I would ask my fellow colleague this question. Throughout the consultations that he had in his constituency and across the province of British Columbia, did he talk to business owners, as I am, and ask them what the impact would be on them of the increase in CPP? I would ask him to expound on that.

Pooled Registered Pension Plans ActGovernment Orders

4:45 p.m.

Conservative

Mark Strahl Conservative Chilliwack—Fraser Canyon, BC

Mr. Speaker, as Conservatives have gone across the country consulting with Canadians on our economic action plan, we have heard many say, like the hon. member has heard, that this is just not the right time for an increase in CPP. It is too risky to raise payroll taxes at this time.

Again, the CFIB stated:

For every one percentage point increase in CPP premiums beyond the current 9.9 per cent rate, it would cost 220,000 person-years of employment and force wages down roughly 2.5 per cent in the long run.

That is not a plan that Conservatives can support.

Pooled Registered Pension Plans ActGovernment Orders

4:45 p.m.

Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, this global financial crisis and Canada's aging population have highlighted the important issue of retirement income security. Our government realizes that Canadian seniors deserve not only our respect but also our support to allow them to enjoy their later years after a lifetime of contributing to our society. They have worked hard to build a better country for future generations. Our government's record shows that we are committed to the financial well-being of Canadian seniors, especially those with low incomes.

While the introduction of pooled registered pension plans, or PRPPs, would not help today's seniors, PRPPs are a key component in providing future financial security for Canadians. Our goal is to provide Canadians with another tool to help them prepare for their retirement in an easy and cost-effective way.

From a young age, we have all been told of the importance of saving for the future, particularly for retirement. PRPPs offer another savings tool to Canadians to help them meet their retirement goals. Sixty per cent of Canadians do not have a workplace pension plan. I am one of those. I was self-employed as a farmer. My land accumulated and, like many others, it was my pension plan. Many employers out there do not want the legal or administrative burden of offering a pension plan to their employees. I believe today's PRPP legislation would play a critical role in improving the range of retirement savings options available to Canadians.

This low-cost retirement savings opportunity is ideal for Canadians who do not currently have access to an employer-offered pension plan. PRPPs would make well-regulated, low-cost, private-sector pension plans accessible to millions who up to now have not had access to such plans. This is great news for many Canadians who are employees of small and medium-sized businesses and self-employed workers. They would now have access to a private pension plan for the very first time. PRPPs are designed to remove many of the traditional barriers that have kept some employers from offering pension plans to their employees in the past. PRPPs would be administered by a regulated financial institution, thereby decreasing the cost, complexity and resource demands for small employers.

PRPPs are a lower cost option due to their scale and design. These plans would result in large pooled funds that would enable plan members to benefit from the lower investment management costs associated with such funds. With PRPPs, participation would be encouraged by automatic enrollment of employees into a PRPP where an employer offers one. Automatic enrollment would encourage regular savings into PRPPs by making participation the default choice of employees who do not actively make a decision to opt out. This is a positive attribute of PRPPs. Employees could have their PRPP contributions automatically taken off their paycheque. It would make saving for the future easier.

In addition, PRPPs would allow members to create an appropriate portfolio that is in line with their investment objectives and risk preferences. The PRPP administrator would also provide members with the educational tools and other resources needed to help the members make informed decisions regarding their PRPP investments. This would be a key improvement to Canada's retirement income system.

PRPPs would also complement and support our government's number one priority, strengthening Canada's economy. That means creating jobs and economic growth.

Some of the retirement income system proposals we looked at in our consultations would have significantly raised costs for both employers and employees. That would have been unacceptable at a time of very tentative economic recovery. Canada's finance ministers opted to prioritize a PRPP framework over other options. It was considered the most effective and targeted way to address the prime areas for improvement identified in our working group's research, particularly modest income and middle-income individuals who do not have access to employer-sponsored pension plans.

PRPPs address this gap in the retirement system in a number of ways. A PRPP provides a new accessible, straightforward and administratively low cost retirement option for employers to offer their employees, allowing individuals who currently may not participate in a pension plan, such as the self-employed and employees of companies that do not offer a pension plan, to make use of this new option. It enables more people to benefit from the lower investment management costs that result from membership in a large pooled pension plan. It allows for the portability of benefits that would facilitate an easy transfer between plans, and ensuring that funds are invested in the best interests of plan members.

Those points are all important areas where a retirement income system can and should be improved. That is why federal, provincial and territorial governments are working to implement PRPPs as soon as possible.

Canada's retirement income system has already been recognized around the world as a model that succeeds in reducing poverty among Canadian seniors and in providing high levels of replacement income to retired workers, but we should never rest on our laurels. Anything can and always will be able to be improved, and that is why PRPPs are at the top of that list right now.

Our government will make the right policy decisions to ensure it stays that way. In recent years we have made it even stronger, with a wide range of measures to support those elements of the system with a proven record of success. This includes: providing over $2 billion in additional annual targeted tax relief to seniors and pensioners through measures such as pension income splitting, increases in the age credit amount, and a doubling of the maximum amount of income eligible for the pension income credit; reforming the framework governing federally regulated pensions to better protect pensioners; working with the provinces to modernize the CPP, making it more flexible for those transitioning out of the workforce to better reflect the way Canadians currently live, work and retire; and most recently in our latest budget, announcing a top-up to the guaranteed income supplement, GIS, benefit for Canada's most vulnerable seniors.

With the introduction of PRPPs we will address the remaining gaps in the system by providing an attractive additional pension option to individuals and employers.

In conclusion, the addition of the PRPPs is clearly a step in the right direction to strengthening a retirement income system that has already delivered for Canadians. It offers Canadians another tool to help them meet their retirement goals.

I am sure there are many individuals out there, including my parents, who could have taken advantage of something like this. As I said earlier, while today's retirees will not be able to benefit from this, future ones will. We certainly look forward to that.

I urge all members in the House to support the government in this major step forward in securing Canadians' retirement income needs.

Pooled Registered Pension Plans ActGovernment Orders

4:55 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, I have a question for my esteemed colleague.

He has only good things to say about this new pension plan, but at the same time, the Prime Minister of Canada announced in Davos that cuts would have to be made to the income security system, because Canada would no longer be able to pay for pensions. If this system is so extraordinary and successful, why is it that they are not changing their actuarial studies in their conclusions?

In theory, if a pension plan is working, people no longer need the support of public pension funds like income security and the guaranteed income supplement.

Since that is not the case, this shows at the same time that they admit from the outset that the system is not working.

Pooled Registered Pension Plans ActGovernment Orders

4:55 p.m.

Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, I would urge the member to read what the Prime Minister actually said instead of reading what is sent out by the offices of the member's whip's or leader.

The Prime Minister has made it quite clear that changes need to be made. There will be no reduction in retirement income because of this. As I said during my speech, we have a great system but it is not perfect and we should not sit back and rest on our laurels. All programs and all legislation should always be tweaked, and this is no different.

This is something new, and from all the consultation among the territories, provinces, federal government and the private sector, this is long overdue. I am very proud to be here supporting this today. It is going to be great for seniors.

Pooled Registered Pension Plans ActGovernment Orders

4:55 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, members will know what my feelings are in regard to how the government is handling the CPP file and government pension programs, which is not very well at all and it is very disrespectful toward those programs. This has caused great concern for many seniors today and for those who are looking at turning the wonderful age of 65.

My question is in regard to the type of support the government has for Bill C-25 and how Canadians will benefit. I am sure the member would acknowledge that Canadians only benefit if provinces are onside to bring in the necessary legislation in order to complement the bill. If that does not happen, hundreds of thousands of Canadians will not even be able to benefit from what the government has proposed.

Could the member provide the House with any indication as to which provinces have agreed to bring in the legislation that would complement Bill C-25?

Pooled Registered Pension Plans ActGovernment Orders

4:55 p.m.

Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, I cannot enlighten my colleague on which provinces have committed, but my understanding is there has been full-fledged consultation between all the provinces and territories. On the first day of Parliament we have this legislation and I would like to think that forward-looking provinces and territories will be looking at the benefit of this for their people to save for retirement and their role in it. I look forward to many, if not all of them, contributing in this. This is a good news story for anyone who wants to save for his or her retirement and in the long term it will help our seniors.

Pooled Registered Pension Plans ActGovernment Orders

4:55 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, I would like to begin with a quotation from Mr. Hollande, the French socialist party candidate for the upcoming presidential election in France. He said:

...my real adversary has no name, no face, no party. It will never run for office...and yet it governs...it is the world of finance...

That is certainly the case in France, as it is in Canada, when we look at what the Conservative government is doing. That is exactly it. The government decided that the financial sector is the key to the economic future of Canadian retirees. It wants to keep the financial sector happy instead of meeting the economic needs of future retirees.

Often, the less the Minister of Industry says, the better, but unfortunately, he said:

PRPPs will offer Canadians an innovative new, privately administered, low-cost and accessible pension vehicle to help them meet their objectives.

That is what he is offering future retirees, but none of it is true. There is nothing new about the plan. A similar program has been in place in Australia for 12 years, during which time Australians have had enough quantifiable experience to say that it is a failure. It does not work. It is not producing the outcome they expected.

“Privately administered, low-cost and accessible.” That is the problem. This plan is so private that there are no limits set by regulations. The bill is not supported by any regulations.

Pooled Registered Pension Plans ActGovernment Orders

4:55 p.m.

Some hon. members

Oh, oh!

Pooled Registered Pension Plans ActGovernment Orders

5 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

There are no limits on the administrative fees that will be billed in this program and that will achieve their objectives. However, the problem is that even if the future pensioners know how much they paying, they will never know how much they will get back when they retire. Is that really achieving an objective, paying and not knowing how much one will receive? That is by no means an objective.

Our Prime Minister went to Davos. Speaking to his friends in the financial sector, far away from Canadians, he informed them—the people of Canada—that their pensions were no longer guaranteed. With remarkable complacency, he talked about the fact that people were seeing that their wealth, their services and their pensions no longer belong to them. He criticized developed countries for their general desire to pay for standards and advantages that they cannot afford. The problem is not that they cannot afford them; the problem is that wealth is being hoarded by a financial sector so speculative that it is losing vast sums of money.

The financial sector's greed is entirely to blame for the recent economic recession, but no one talks about that. Wilful ignorance and complete blindness are the status quo. Everyone seems to have memory lapses and to be complacent. We forget about all the money squandered by the financial sector, which is still not keeping its promises. In Canada, what grew the fastest were not bank dividends, but the bonuses the banks paid to their top executives. That speaks volumes. It speaks volumes about who earns money and who loses it. Generally, pensioners do not come out as winners with this government.

This same government, which brags about its record when it comes to the economy, is comparing itself to the worst. It compares itself to countries like Italy and Greece. It does not compare itself to Germany, Sweden or Norway. No. It compares itself to a small club of lesser countries that adopted the same bad policy it did. It compares itself to the very worst. One day I would like our government to compare our country to the best. Then it would realize that creating 100,000 net new jobs since 2008 is not really an accomplishment, losing 350,000 jobs in the manufacturing sector that have not been replaced is not an accomplishment, and replacing jobs that pay $25 an hour with jobs that pay $10 an hour is no way to create wealth in a country. It is shameful.

A myth has been circulating in the past few days that it is fiscally responsible to roll the dice with Canadians' pensions and bet the money on the markets. We can do whatever we want with other people's money. It does not matter. Regardless of what happens, pooled registered pension plans will always guarantee a source of income and administrative fees. Regardless of how they perform, good or bad, the financial sector will always make money.

However, the whole idea behind a pension plan is not to help a certain sector make money. The idea is to guarantee to pensioners that they will be able to collect their pensions and be sheltered from poverty. That is absolutely not what the government is doing, to the extent that RRSPs, TFSAs and all the other private savings plans have no impact at all on actuarial studies regarding future trends in the government's ability to cover the cost of the guaranteed income supplement.

The government says it will cost too much, but if there were a better alternative, people would not need to ask for financial support from the government. They would not need it and they would be able to provide good pensions for themselves.

That is never the case. It basically shows that the government's calculations are wrong and that this pension scheme has only one objective: to give the financial sector what it wants, that is, the economic governance of this country.

This type of pension plan already exists in Australia. We can use it for analytical and comparative purposes. It is interesting because it was introduced almost 10 years ago in Australia, which gives us some hindsight and allows us to analyze the results in detail. First, the plan was mandatory although it was possible to opt out. Employers were required to sign up their employees for one of the many defined contribution plans provided by the private sector.

The Australian government has analyzed the results. It was rather important that it provide some analysis of the financial results. Studies commissioned by the Australian government indicate that people are not really saving. The management fees are so high and the returns so low that it would be more beneficial for employees to directly deposit their money into very low interest bank accounts. They would earn more and not lose money. If they leave their money in the private sector, they lose it. That is unacceptable.

People are being asked to put their money into a pension plan and, to date, in Australia, they are receiving less than they paid in. And yet, the Australian financial system did not hesitate to demand investment and management fees. Things went wrong. It is a major problem.

Canada has a low-cost alternative that has already proven to be effective: the Canada pension plan. No one is disputing this fact. No other system is managed for such a low cost. No one is disputing this. No one is questioning that it is appropriately capitalized.

All they are saying is that the plan will be increased over a 10-year period, not tomorrow morning. That means that, over a 10-year period, a surplus—a portion of future earnings—will be skimmed off. Part of the increase in earnings will be directed to the pension fund. We cannot ask for more in terms of the gradual nature of contributions.

Nevertheless, this government opposes it. It prefers to deprive Canadians of a secure pension in the future rather than to deprive its friends in the financial sector of a single dollar.

Mr. Hollande said that his enemy was the financial sector. Here in the House, the financial sector is represented by a political party that, unfortunately, is in power. That party would do well to remember that it was elected not by the financial sector, but by Canadians. That party promised to represent Canadians, but it is more interested in spoliation than in representation.

The government has the financial means to do this in Canada without upsetting the economy, hindering economic growth or damaging the business sector in any way. God knows that we do not want to hurt the business sector. We want to create jobs. We will not stand by and watch unemployment numbers rise. We want to find a way to turn the unemployed into workers.

We will fight for it. We will fight as hard as we can because this plan is worthless. A pension plan should produce results and have a defined objective. The government has an obligation to produce results. That is what a pension plan is: a result. All the government is saying is that it will take people's money and, with luck, it might give something back to them when they retire. That is unacceptable.

That is why I invite all Canadians to fight this worthless plan and support a public Canadian pension plan that has proven its worth in the past and will continue to do so.

Pooled Registered Pension Plans ActGovernment Orders

5:10 p.m.

Oshawa Ontario

Conservative

Colin Carrie ConservativeParliamentary Secretary to the Minister of Health

Mr. Speaker, I probably disagreed with everything my colleague said in his speech. It was quite poignant that he was quoting a socialist politician from France to get his information.

Let us talk about the reality of today and let us talk about the head-in-the-sand politics of the NDP. If we look at what the Minister of State for Finance has done the last couple of years, he has listened to Canadians and has asked them what they want. From what we have heard, they want choice. They want improvements to their retirement income.

If the NDP members were paying attention, to make the changes they would want to the CPP would require the consent of two-thirds of the provinces and, frankly, in this day and age, there is no consensus. What do they want us to do? Do they want us to wait and rest on our laurels? No, we are providing options to Canadians.

Why is the member against options for Canadians? Would the NDP force the provinces and businesses to go along with a plan that they clearly have told the Government of Canada they do not want? What would the member do if he were in that situation?

Pooled Registered Pension Plans ActGovernment Orders

5:10 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, the hon. member is making the same argument as his colleague from Saint Boniface, who said that many stakeholders came and spoke in favour of this plan at the Standing Committee on Finance. I was sitting on that committee and the people who were in favour of this system all represented financial institutions. However, those who stand in line at the food banks, who need a cheque to pay for their groceries, their rent and their clothes, all told us that they need improvements to the Canada pension plan.

Who is the government listening to, Canadians or financiers? We have decided to listen to Canadians, people who want something positive for their economic future.

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5:10 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, we have acknowledged the importance of the OAS, the GIS and the CPP. I think there is a lot of agreement with the NDP quite possibly in regard to the support of that.

I have asked the member to provide a list of the provinces that would be enacting the provincial legislation that would enable this legislation, otherwise it would be very limited in terms of who would benefit from the program. If the province of Quebec, for example, were to indicate that it would like this legislation to go to committee, or if other provinces, ideally a half dozen or so provinces, wanted to see the bill go to committee, would the New Democratic Party support it going to committee?