Mr. Speaker, as the official opposition critic for seniors, I am pleased to speak to Bill C-25 today.
I must begin by mentioning what our dear Prime Minister said a few months ago in Switzerland. During a speech, he said that Canada's aging population is a problem and that if the government does not tackle the problem, it may have even more serious consequences than the recent economic crises.
First, I would like to express the NDP's official position that the aging population is not a problem; it is a situation. And it is not a surprise situation. We have seen it coming for a long time. Today's 60- and 70-year-olds were not born yesterday. Not only is this not a problem, but I think we can view it as an asset. Canada's seniors are a tremendous resource. They have experience and they share their knowledge and experience. These people volunteer in their communities and in politics, and they spend precious time with their families. No matter how numerous our seniors, they are not a problem for our country.
Today, we should not be attacking the aging population, but we should simply know how to adapt. Yes, there are things that need to be done in this regard. As a country, we need to adapt to ensure that everyone can continue to live well and with dignity. We have known about and seen this demographic trend coming for a long time. One way to adapt is to ensure that the seniors of tomorrow will have reliable pension programs and, we hope, financial security that will enable them to live many more years after retirement in dignity and happiness.
Generally speaking, the fact that today we are talking about a bill on one specific pension program is good news because it means that Parliament is addressing the issue and wondering how it can help people retire with dignity.
However, there is something we do not agree on, and that is how to adapt and what tools to give people to ensure that they will be able to have a pleasant retirement.
What do people want exactly? I think that is a basic question that needs to be asked. What is the problem on the ground? What do people expect the government to do to help them?
I travelled all over Quebec. I visited over 30 towns and cities. People went out of their way specifically to address the issue of seniors' financial security. I heard a number of concerns, questions and fears. I would like to share some of them here today.
First of all, old age security is an important part of Canada's overall pension system. Old age security is universal. Everyone is entitled to receive it when they turn 65. Everyone counts on it, especially middle-income families and people who live below the poverty line—people who do not make enough money to set some aside in savings plans, people who have had an accident, people who have had to stop working for an extended period of time and perhaps have been unable to return to the labour market, people who were laid off at age 55 or 60 and who have not been able to find another job.
Old age security is an essential part of the system, and because of it, Canada can count itself among those countries that have a smaller percentage of seniors living in poverty. Despite that, there are plans to raise the age of eligibility for the program, which will unfortunately increase poverty among seniors. We have talked a lot about this issue. Given that this is not our primary focus here today, I will move on to some of the other subjects before us.
The Canada pension plan, much likes its equivalent in Quebec, is a pension plan that serves all workers. Regardless of the number of hours a person works and no matter what kind of employer he or she works for, everyone who accumulates hours of work contributes to the Canada pension plan or Quebec pension plan. Depending on the number of hours worked and the wages earned, everyone is entitled to receive a certain amount of money. However, this Canada pension plan payment is not enough to replace a person's salary in any meaningful way.
It has to be supplemented by something else. What is more, the Canada pension plan and old age security do not provide Canadians comfortable financial security at retirement either.
Another type of benefit people receive at retirement is an employer provided pension plan. Unfortunately, 12 million Canadians do not have one. Unfortunately, more and more businesses are declaring bankruptcy and are not reimbursing the employees' pension plans, which the employees were counting on for their retirement. Unfortunately, in many cases, these pension plans have been mismanaged by the employers and the benefits have had to be reduced, causing a great deal of discontent.
Something can be done to help Canadians who have employer provided pension plans, but many Canadians do not. What is the government doing for those who do not have an employer provided pension plan?
Another type of savings exists and that is everything to do with RRSPs, group RRSPs, TFSAs, et cetera. Again, many Canadians cannot invest in such plans. People who work full time and earn minimum wage are living below the poverty line. They can hardly put money into an RRSP or a TFSA. I will come back to that later. Here again, more needs to be done to allow Canadians to save for their retirement.
Yes, people have expectations of their government. They have worthwhile suggestions for solving the problems in Canada's pension system. I will come back to this later.
People want a reliable pension system that will provide them with a secure retirement. And I have excellent news: we can create such a system. We have the tools. We have the resources to provide seniors with greater financial security. All that is needed is a willingness to take this issue seriously and a little political courage. Unfortunately, we see no political courage in Bill C-25. This is not a strong, effective measure that will help Canadians save for their retirement, and that is too bad.
What does Bill C-25 really do for Canadians? That is a good question, because there is not much difference between a pooled registered pension plan and an RRSP, a group RRSP or a TFSA. There is some difference, of course, but it is not big enough to ensure that the 12 million Canadians who have no workplace pension plan will be able to retire worry-free. These measures are not really going to solve the problems I talked about earlier.
At present, 12 million Canadians do not have workplace pension plans and 31% of Canadians eligible to contribute to RRSPs do so. Why do almost 60% of eligible Canadians not contribute to an RRSP? Have the Conservatives asked themselves this question? It is important to know the answer. PRPPs and RRSPs are very similar. We have to wonder why Canadians who can contribute to an RRSP do not currently do so. Perhaps they would not contribute to PRPPs for the same reasons. It is important to ask the question.
Here is another statistic: 41% of Canadians have a TFSA. Why do approximately 60% of Canadians not have one? It is very pertinent to ask this question because, once again, if people have trouble making ends meet, and do not have enough income to live on and to support their children, they probably could not put money into a PRPP any more than they could into a TFSA or an RRSP.
Furthermore, 50% of Canadians who have a TFSA earn $100,000 or more.
Once again, what are we going to do for these middle- and low-income Canadians who have no retirement security. Is there a better way to help them than setting up a pooled registered pension plan?
Some countries have tried to implement PRPPs but have failed, whereas other countries have been successful. Let me expand on that. For instance, New Zealand and the United Kingdom implemented pooled registered pension plans and they were successful.
That makes you think. What are the differences between the program implemented in those countries and the program that the Conservatives want to implement? The biggest difference is that, in New Zealand and the United Kingdom, employers are required to contribute if the employee does. So it is a very attractive incentive for employees and it increases the amount of money that people can get after they retire. That has encourage with RRSPs or TFSAs, for example. Neither do we find it in the pooled registered pension plan proposed in Bill C-25.
In New Zealand and the United Kingdom, another incentive for people to contribute to pension plans is that the state provides a tax break or pays a bonus to employees who contribute to their pooled registered pension plans.
Countries that have had success with that kind of pension plan have much stronger, much more solid incentives and restrictions. I am not saying that a pooled registered pension plan would be the best solution. But I do want to stress that there are ways to make the tool much more attractive and much more effective.
In a number of cases, we wonder why the government is proposing a solution of this kind. I suggest a comparison with another situation that is being talked about a lot these days, the increase in the age of eligibility for old age security.
Why raise it by two years? A lot of questions remain for which we have no answers. By “we”, I do not just mean my colleagues and I, I also mean experts who also have no explanation as to why the government is moving in that direction.
First of all, what were the government's objectives for old age security? The government tells us that the program is not sustainable, but a number of experts say that indeed it is. Can we have the figures and the calculations? What is the objective that the Conservatives are trying to achieve by raising the age of eligibility for old age security. How much money do they feel is needed to make the program sustainable? We do not know.
The other day, an hon. member opposite told me that it is about plain old common sense, of very simple math. I am sorry, but calculations and arguments like that are not very convincing. Can you identify a clear problem and propose clear objectives that would allow us to analyze the various options and act accordingly?
What other options are being studied? There are other options. A bill presents one option to us, but what other options have been looked at? Why this option for the PRPP and not another? Why would another option not work? These are questions that have to be asked but have not been answered. It is difficult to work co-operatively and to propose specific initiatives when we have no idea of the basic objectives. What other options have really been studied? Why was this one chosen rather than another?
Lastly, what will the short-term, medium-term and long-term repercussions be? In other countries, an option like that was studied, put in place and did not work. Why would it be any different in Canada, with Bill C-25? I expect to get some very interesting answers. What can we do to ensure that it will work this time in Canada, when it has not worked in other countries?
It is a well-known fact that the NDP is proposing a solution other than the one proposed in Bill C-25. It proposes doubling the Canada pension plan and Quebec pension plan benefits, rather than create a PRPP, first because of the management costs. How much will the management costs be for a PRPP? Once again, we do not really have an answer. The number is approximate, but it is certainly higher than the costs of managing the Canada pension plan. Then, it is much more egalitarian for certain segments of the population.
One of the examples I like to give is the example of women. The Canada pension plan takes into account the obligation of women to leave the work force if they have a child and the obligation of people to leave the work force if, for example, they have to take care of a family member who is ill. Women are often the ones who do that as well. A pooled registered pension plan does not take those obligations into account. People who have to stop contributing during a specific period will then be penalized through reduced benefits when they retire.
The Canada pension plan is a plan where the risk is assumed by everybody and, because everyone's contributions are grouped together, it makes up for the fact that some people have to take time off for an illness or disability or for family reasons.
Introducing PRPPs instead of improving CPP will lead to an increase in poverty among women. I do not think I need to go on at length about this, but there is much more poverty among senior women than senior men. Something must be done about this. It has to be taken into account. It cannot be ignored. It is a problem the government has to be sensitive to.
Risk sharing is also important. With CPP, everyone shares the risk. But with a PRPP, a single individual assumes the risk. I want to come back to what will happen to someone who lives longer. Since a PRPP is not a defined benefit plan, this person knows how much he is putting into the plan, but not how much he will get out of it. There is certainly a fixed amount. This means that someone who lives a long life will have to figure out how to manage his portfolio so that he has enough money to live on for the rest of his days. What are we saying? Should we hope that this person does not live too long, or else he will pay through the nose and live in poverty? It makes no sense. We can avoid this sort of situation by enhancing CPP.
The same applies to someone who becomes disabled at 58, for example. That person has to stop contributing and will be penalized. The individual has to bear all of the risk, but that risk could be shared by improving the Canada Pension Plan.
I still have so much to say, but I think I will end with some good news.
Canadians want to know that this is not the only way to do things. The Conservatives often argue that if they do not take this step, our economy will crumble and we will end up like this or that other country. That is not true. There are many ways to run a country and many ways to address a problem. There are alternatives to Bill C-25. As I mentioned earlier, the government could double Canada pension plan benefits. We think that can and should be done to ensure financial security for as many seniors as possible.
The government could also increase the guaranteed income supplement. I have talked at length about poverty among seniors. Currently, the government does not provide seniors with enough money to get them out of poverty. Seniors have to choose between buying food and buying medication. That is unacceptable in our society. The government should increase the guaranteed income supplement to ensure a certain level of dignity for our seniors.
There are still more things the government could do: leaving the old age security age at 65 is an obvious one for the NDP. Protecting employer-managed pensions and amending Canada's Bankruptcy and Insolvency Act are other options. There are many good things the government could do to ensure financial security for retired Canadians.