Mr. Speaker, our people are growing older and living longer. What does that mean and what should we do about it? I will start with old age security.
In 1975, there were seven taxpayers for every senior. Right now, it is four. In 20 years, there will be two taxpayers for every senior. What is more, people now collect OAS for longer.
When Canada introduced old age security in 1951, the average life expectancy was 79 and eligibility was 70, meaning that the average person did not collect old age security at all. Today, eligibility is 65 and life expectancy is 82, meaning that the average person gets 17 years of OAS.
As we project forward, life expectancy is growing by 47 days per year. Put morbidly, the average dead person this year is 47 days older than the average dead person from last year. In 2031, people will die on average at about 84 years old, which means that under the current rules they will collect OAS for almost two decades. This is a benefit, I remind members, that was expected to be collected for only a very short period of time.
Put together, these facts mean that in two decades the number of people on OAS will double, the cost will triple and the number of taxpayers supporting each retiree will fall by half. By consequence, OAS will rise from 15¢ of each dollar the federal government spends to 25¢.
The Macdonald-Laurier Institute calculated, “...by 2040 Canada would face a $67 billion deficit (in today’s dollars) based on current policies and demographic change”.
We need to think of OAS as a glass of water. Retirees can only drink out of the cup in benefits what workers pour into it in taxes. If Canadians are drinking out of the cup faster than what is poured in, then someone goes thirsty. We can look to Greece and Portugal where government debts are rated at junk status to see the consequences of drinking from the cup of profligacy.
We reject that failed model and choose the Canadian way instead. Our plan lowers the cost and therefore protects the integrity of the old age security system with a gradual increase to 67 years of age over the next decade and a half without impacting anyone currently over the age of 54.
The opposition parties oppose this move. In fact, they are already promising to increase the costs associated with this program. The NDP deputy leader moved and the Liberal leader seconded bills in this House that would allow people who have only lived in Canada for three years to collect old age security. The cost to taxpayers would be another $700 million. How would the opposition make up the $67 billion gap that I described earlier and how would it further fund billions of dollars in new promised entitlements?
The oppositions' election strategy is a cunning one. They would tell voters that they will give them a lot of free stuff and make someone else pay for it, and who better than big corporations. Who are these big corporations? Perhaps they mean Canadian Natural Resources Limited, the country's largest independent oil producer with over 100,000 barrels from the oil sands every day. It makes them a perfect target for the NDP.
The NDP promises to raise taxes on that company's profits but where do these profits go now? Well, they go to the shareholders. One of the biggest shareholders is the Quebec pension plan with $576 million invested. When the company profits it pays more money to the public pension.
Based upon today's dividend, this oil company pays the Quebec pension plan $6.3 million. That is enough to pay the pensions of 1,100 Quebeckers. There is only one problem. Canadian Natural Resources can only pay Quebec pensioners after it pays taxes to the government. Business taxes up, pension benefits down.
This is not an isolated example. Over half of the CPP's assets are invested in businesses, including the Canadian Oil Sands Trust, Suncor Energy, Imperial Oil and Athabasca Oil Sands Corporation. When these businesses profit, the CPP has more money to pay out to Canadian retirees. Raise taxes on those companies and they will pay a lower return to the CPP.
Take the Canada Post pension plan. It is no different. Its top five holdings are: the Toronto Dominion Bank, Royal Bank of Canada, Bank of Nova Scotia, Suncor and Canadian Natural Resources. Banks and oil companies, the twin villains in every left-wing storyline, pay dividends to the pension fund of these unionized postal workers. These dividends come from after-tax profits. If the business tax rate rises, the after-tax profit remaining to the pension fund drops. In that sense, the opposition's proposed business tax hike is really a tax on the pensions of unionized blue-collar workers.
What happened to solidarity? The answer is that solidarity is incompatible with the opposition's overriding sentiment: envy.
If we do not have a job, the opposition tells us it is because someone else does. If we do not have enough to retire on, it tells us it is because businesses are too profitable. If a company fails, the oppositions tells it that it is because someone else is succeeding. If we are doing badly, it says it is because someone else is doing well. In sum, the opposition suggests that “them” has too much and “us” has too little. So it will take from the “them” and give to the “us”. Yet “us and them” does not work when our destinies are intertwined.
The retired Ottawa mailman relies for his pension cheque on the earnings of an Alberta oil sands company. In order to buy the machines and hire the workers in the first place, that oil sands company must seek investment from the mailman's pension fund. In that sense, the two are symbiotic and interdependent. Millions of voluntary transactions like these connect us all. Independently of government, through the free market, we truly are all in this together. Class distinctions start to fade. Millions of everyday Canadians now own shares in the largest corporations, through their pensions, RRSPs and tax-free savings accounts.
While some try to turn workers against business owners, free enterprise turns workers into business owners. That is the Canadian way: a low-cost government, a free people, a shared destiny and a bright future.