Mr. Speaker, I would first like to thank my NDP colleagues for their various interventions on the government bill before us here today. I think this is a very important subject, one that Canadians are really concerned about. A number of people from my riding have contacted me to share their concerns about their retirement. That is why I wanted to speak here today.
In a democratic country like Canada, the right to retire in dignity after working hard one's entire life is absolutely fundamental. What I mean by “in dignity” is having enough money to pay for groceries, to pay the rent and to pay for health care. The current economic situation, economic projections for the future and our aging population are all crucial factors in determining how we, as a society, should manage our retirement programs.
In that regard, I must commend the government for recognizing the issues that will affect how and when Canadians retire and for trying to come up with solutions to ensure a decent retirement for everyone. Where I disagree with the Conservatives—and where I agree more with the NDP's opinion—has to do with how the government is going about solving the growing problem of access to a decent income when the time comes to retire. Bill C-25, introduced by the government, has many flaws that really need to be examined and understood by Canadians, because, I would remind the House, it is their money on the line.
According to the main points of the bill, the new pooled registered pension plans, PRPPs, a retirement savings vehicle very similar to RRSPs, would enable plan members to pool their funds to reduce costs associated with managing the plan's investments. The bill notes that the benefits of PRPPs are transferable, but that they are not indexed to inflation. These plans are intended for self-employed workers and small and medium-sized businesses that do not have the means to manage a private sector pension plan.
Despite the government's claims, pooled registered pension plans will not enable Canadians to achieve their retirement goals. The plans will not improve income security for retired workers. The plan proposed here is a defined contribution plan, not a defined benefit plan. In this kind of plan, employees set aside funds throughout their working lives, and those funds are invested in stocks, bonds, mutual funds and so on. Investment income depends entirely on market fluctuations. That is an extremely important point. The employees absorb all of the financial risk associated with stock market ups and downs.
If the government made an effort to listen to all of the Canadians whose RRSPs melted away like snow in sunshine in 2008, it would understand that more stable and secure savings options should be made available. People who can tolerate significant risk can turn to the stock market and RRSPs. Worse still, depending on the province, employers could potentially be required to offer this plan to their employees without having to contribute. People already have the option of contributing to a savings plan without employer participation. That is called an RRSP. What more does the government have to offer?
Last November, in its press release announcing Bill C-25, the government said:
...over 60% of Canadians do not have a workplace pension plan. Because of this, our government acted by introducing legislation...that implements pooled registered pension plans.... Our Conservative government is delivering PRPPs to offer a new, low-cost and accessible pension option to help Canadians meet their goals.
What low-cost, accessible pension is the Conservative government talking about? Last year, only 31% of eligible Canadians contributed to an RRSP. The rest just could not afford to. Currently, Canadians have $500 billion in unused RRSP contribution room available.
Let us say it again loud and clear: Canadians do not have access to an affordable and accessible retirement because they have absolutely nothing left at the end of the month to put into savings. And the Conservatives are asking them to take what little they have managed to put aside and put it into investment funds administered by banks, the very banks that have nearly wiped out the global economy, with no guaranteed income and no guarantee that the funds available will see the workers all the way through retirement?
And the Conservatives want these funds to be managed by fund management “experts” at the banks and insurance companies without any limits on the cost of their management fees and bonuses that will be paid out of the pockets of our future retirees?
During a radio interview, the Minister of Industry said:
By pooling retirement savings, PRPPs will allow Canadians to benefit from greater purchasing power. We are talking about economies of scale here. Canadians will essentially be able to buy in bulk. Professional administrators will exercise a duty of care to ensure that the funds are invested in the best interests of the plan members.
In my opinion, the advantage of economies of scale is quite questionable. We should learn from the Australian experience, but this government is again turning a deaf ear, as it did to the warnings from the United States about the omnibus Bill C-10.
Ten years ago in Australia, a similar system provided very disappointing results. Their system was mandatory, with the possibility to opt out, a bit like what the government wants to do here. The Australians came to the conclusion that, even though people saved because it was mandatory, the returns on investment did not outpace inflation.
The report commissioned by the Australian government attributes these discouraging results to the high costs and fees, even though it was thought that competition among the banks would, as we just heard, lead to reduced costs and economies of scale. So much for that argument; it does not fly. Let us have the wisdom to learn from our Australian counterparts and avoid making the same mistakes.
What Canadians want is not another incentive to save more money. The average Canadian is already trying to save and can barely manage. First we have to come up with a solution closer to the source of the problem. Canadians want to have a decent income that will allow them to save. The solution is job creation.
The excessive debt of Canadian households has made the headlines again, and 1.6 million Canadian seniors are living in poverty. By OECD standards, the CPP system is relatively miserly since other similar countries have much more generous public pension plans.
In 2010, one in four workers had a low-wage job. Does the government think that a Canadian who earns $13 an hour will be able to meet his needs and the needs of his family and contribute to his PRPP, where his hard-earned money will be at the mercy of the stock market as it operates today?
Canadians must understand that the measures proposed here are superficial and risky. The government has not taken the time to carefully consider the problem.