Mr. Speaker, I am happy to rise today and speak on Bill C-25, an act relating to pooled registered pension plans. In truth, it is legislation from the Conservative government that is really a savings scheme, not a pension plan. Like the omnibus Trojan Horse budget bill, it reminds Canadians of the mess the Conservatives have created for Canada and for our pensioners.
This hole that Canadians find themselves in becomes unacceptable, especially when we see the shovels in the hands of the Conservative government digging the hole.
Let us separate fact from fiction in the government's spin on being good managers of the economy. In fact, the Conservatives' us-them, winners and losers ideology has exposed them as very bad managers of the economy.
Fact number one is that 1.6 million seniors live in poverty.
Fact number two is that 12 million Canadians lack a workplace pension plan.
Fact number three is that most Canadian workers have no RRSPs, but the proposed legislation advises that they invest despite disastrous investment returns.
Fact number four is that last year, only 31% of eligible Canadians contributed to RRSPs. How little money Canadians really have for their RRSPs is evident in the fact that unused RRSP room now exceeds $500 billion.
Fact number five is that the Conservatives tolerate overall poverty numbers of around 10%, one in every ten Canadians. They write off three million Canadians from contributing to productivity or paying taxes. The Ontario food bank estimates that the bill to Canada that the Conservative government writes off is costing our country close to $90 billion.
Facing all these facts, what do the Conservatives do? They bring forward legislation with limited benefits for the self-employed and for those with small and medium-sized businesses. They stick with our country's miserly pension plan rather than bringing it up to the level of other countries that more fairly and generously look after their seniors.
The proposed legislation would do nothing to fix our pension crisis. There is too little money on the revenue side for our country precisely because of the spending and the deep hole that the Conservative government has dug with its ideology-driven priorities.
There is no money for Canadian seniors and their pensions because the Conservative government ignores a declining crime rate and goes on a multi-billion dollar spending spree on crime that the provinces say they do not want and cannot afford.
There is no money for seniors, but there is money for F-35 fighter jets. There is money for a minister's $16 glass of orange juice and money to spend on search and rescue personnel to ferry the Minister of National Defence on his own errands.
The Prime Minister has said that the Canada pension plan is adequately self-financing, but “for those elements of the system that are not funded, we will make the changes necessary to ensure sustainability.”
What changes does the government propose? It plans to cut old age security, denying it to seniors who are 65 and 66. This program provides $526.85 a month to seniors below the income cut-off.
New Democrats recognize the demographics in our country showing that the number of Canadians older than 65 will double in the next 20 years. We also recognize that the pension plan is financially sustainable in its various demands, up and down, over the next 20 years.
The Parliamentary Budget Officer has backed us up with strong evidence, but what is increasingly having Canadians lose confidence in the government is its failure to manage the economy and deal with the inequality that exists in our communities.
There is less money for seniors because of ridiculous spending decisions by the Conservative government. It reduced corporate taxes and had ministers for the G8 spending like drunken sailors.
We on this side of the House have no problem with an honest dialogue with Canadians about belt-tightening, about hard choices that have to be made regarding our pensions and pensioners. However, we will not frame these choices as the Prime Minister does, ignoring the facts and making our seniors pay.
Let us be clear: our seniors and future pensioners need protection and real help. Pool registered pension plans fail to protect retirement security because they encourage families to gamble even more of their retirement savings on failing stock markets. Anyone who has watched the RRSP plummet over the past years knows how risky savings tied to the stock market are.
How out of touch can the Conservative government be to sell such a scheme to Canadians?
The bill is designed to appeal to the self-employed and workers at small and medium-sized firms, companies that often lack the means by which to administer a private sector plan.
The plan created would be a defined contribution plan. Employees would contribute a portion of their salary into the retirement account, where it could be invested in stocks, bonds, mutual funds, et cetera. Some companies would make a matching contribution, up to a certain percentage. The account would grow through contributions and investment earnings until retirement.
In such a direct contribution plan, there are no guarantees about how much of a person's money will be left when he or she retires. The risks are borne entirely by the individual. In these types of plans, the amount of money available at retirement depends upon the outcome of the investments, which cannot be relied upon. Defined contribution plans lack the security of defined benefit pension plans like the CPP and the QPP, which pay a guaranteed set amount upon retirement.
There is also the profit margin taken from these plans by the regulated financial institution, such as banks, insurance companies and trust funds. Bill C-25 also fails to place a cap on administration fees or costs and merely assumes lower costs will emerge through competition in the marketplace, and unlike the CPP and the QPP, the pooled pension plan would not be indexed to inflation.
On the other hand, the NDP has put forward a series of retirement income security proposals that would bring genuine security to our pensioners.
We want to double the guaranteed CPP-QPP benefits, to a maximum of $1,920 each month. Growing the CPP and QPP is the best and lowest-cost pension reform option we have.
We have committed to work with the provinces to build the flexibility of individuals and their employers to make voluntary contributions to individual public pension accounts. We would amend federal bankruptcy legislation to move pensioners and long-term disability recipients to the front of the line of creditors when their employers enter court protection or declare bankruptcy.
New Democrats would increase the annual guaranteed income supplement to a sufficient level, in the first budget, to lift every senior in Canada out of poverty immediately.
These are real reforms. This is the real help for seniors barely getting by or workers forced to delay a hard-earned retirement.
Let me quote the commentary of the Canadian Labour Congress on this bad bill.
The proposed PRPPs [pooled registered pension plans] do not guarantee low management fees that would prevent large management fees from eating up such a large portion of your savings. In fact, there is only a promise that the design of PRPP will result in large pools of capital that might lower fees, with no guaranteed or legislated results. Nothing in the PRPP proposal sets management expenses at levels equal to or lower than those of the CPP. As a result, CPP is still a better deal than PRPP; not only because of its guaranteed indexed retirement income, but because of its much lower management fees.
The government is already engaged in damage control on trying to increase the retirement age from 65 to 67. It is trying to reassure seniors that it would not affect those now retired or soon to be retired. What the government should be afraid of is the large number of Canadians aged 50 to 65, the people who vote in this country, who are seeing freedom 55, and now freedom 65, slip away.
Our seniors have worked hard and managed their budgets, only to see the government dig this very deep hole by giving up revenue it would have had from corporations and spending it on its priorities that are now not the priorities of many Canadians.
This will be the fight of their lives. New Democrats will join this fight. We need to value our seniors, not beat up on them.