Mr. Speaker, I am pleased to have the opportunity to speak today about the importance of a secure and dignified retirement for people who have spent and will spend their lives building a better and more prosperous Canada for us all.
We have devoted considerable effort on the retirement security issue in order to get it right. Over the past two years our government's commitment to a stronger retirement income system has taken my colleague, the Minister of State for Finance, to communities across this country. He has been a very busy man making sure that Canadian voices are heard.
While travelling across the country, the minister has engaged and challenged opposition parties in constructive dialogue, met with his provincial and territorial counterparts, discussed key considerations with business and labour groups, and received valuable input from some of the most respected experts in the retirement income field. Most important, he has consulted with day-to-day Canadians in all of our communities. We have made significant progress as a result of these efforts. I would like to thank the minister for his incredible effort to reach out to Canadians.
As a result of these meetings and round tables, the pooled registered pension plan, PRPP, was created. The PRPP will mark a significant step forward in advancing our retirement income agenda. It will be a vital improvement to Canada's retirement income system. PRPPs will be a large-scale, broad-based pension arrangement available to employees with or without a participating employer, as well as the self-employed.
As a former self-employed small businessman myself, I know first-hand how difficult it is to save for retirement. When one is running a business and is the head of operations, the president of human resources, the director of purchasing, the supervisor of maintenance, and the marketing expert, sometimes just ensuring the sidewalks are shovelled or all staff are in place is more important and takes priority over thinking of retirement or how to save for it. In small business one less thing to think about is one more chance to give better customer service and one more way to ensure survival in the world of free enterprise.
PRPPs will fill a 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 had no access to large-scale, low cost pension options.
To quote the Canadian Chamber of Commerce, “The legislation introduced...has the potential to benefit an estimated 60% of Canadians who have either no, or insufficient, retirement savings”.
Dan Kelly, vice-president of the Canadian Federation of Independent Businesses said that the pooled pension plans are desperately needed because only about 15% of small- or medium-size businesses that the CFIB represents offer some form of retirement savings plans for their employees”.
As members can see, there is great excitement and enthusiasm for this plan.
PRPPs will also complement and support the Government of Canada's over-arching objective of creating and sustaining jobs, leveraging business investment, securing our economic recovery and sustainable private sector driven growth.
Some of the retirement income system proposals that were presented in the consultations the minister had would have significantly raised costs for employers and employees. Introducing them would have been unacceptable during the very tentative economic recovery that we are currently going through.
PRPPs on the other hand will be efficiently managed, privately administered pension arrangements that will provide greater choice to employers and individuals, thereby promoting pension coverage and retirement savings, people saving for their retirement.
This legislation is to put in place the federal requirements supporting the framework for PRPPs. It would improve the range of retirement saving options for Canadians by: providing a new accessible, straightforward and administratively low cost retirement option for employers to offer to 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 type of pension plan; enabling more people to benefit from the lower investment management costs that result from membership in large pooled pension plans; allowing for the portability of benefits that will facilitate an easy transfer between plans; and ensuring that funds are invested in the best interests of plan members.
In addition, my colleague, the Minister of State for Finance, met with the provinces to assist them in making the necessary changes from their side. All provinces are on board with the idea of providing small and medium businesses with pooled registered pension plans. My own provincial finance minister has stated that the McGuinty government supports the federal Conservatives' PRPP proposal. Working together, I am confident we can get these important retirement vehicles up and running for Canadians in a timely manner.
Our record of support for seniors remains strong and has been since our very first budget. One only has to look at the facts. I will give some examples of things that our government has done since 2006, many of which have been mentioned today.
In budget 2011 we announced the guaranteed income supplement top-up benefit for the most vulnerable seniors. Seniors with little or no income other than the old age security and the GIS received an additional amount through the GIS this year.
Our government increased the age credit twice, with $1,000 in 2006 and another $1,000 in 2009. We doubled the maximum amount eligible for the pension income credit to $2,000. We introduced pension income splitting, something that is really talked about back home. We increased the age limit for maturing pensions and registered retirement savings plans. Boy we have done a lot. We increased the age credit amount and doubled the maximum amount of income eligible for the pension income credit.
In addition, in budget 2008, we introduced the tax-free savings account. This is particularly beneficial to seniors as it helps them meet their ongoing savings needs on a tax-efficient basis after they can no longer contribute to their RRSPs.
In closing, the formula is nearly perfect. We want to make it work and it will accomplish having Canadians save for their retirement. We want to make it simple and seamless. As I stated before, most small businesses, employees of those businesses, and the self-employed really do want to save for their retirement to put away for their future, but we failed to act.
For example, each Canadian has about $18,000 of unused RRSP room, some because they have not got around to it. A plan like this would help to correct that. Making the option of PRPPs available relieves the already very busy small and medium businesses of the burden of administering a pension plan while creating an easy and simpler process for employees to enrol and save.
As an entrepreneur, like many Canadian small business owners, I am not an expert in all areas of business, admittedly even in some of the areas of my own business. To have the opportunity to use the PRPP to provide a professional plan for retirement savings administered by experts in that field allows me to offer something to my employees that is currently not possible.
We all win if we make it easier to plan for our future. PRPPs would remove the barriers that made it impossible for my business and other small businesses like it to offer the ability to be part of a pension plan for their employees. This is a significant and timely solution. I am proud of our government for taking the steps to provide this opportunity for Canadians.
I will support this legislation. Canadian families will benefit because of this legislation.