This week, I changed much of the tech behind this site. If you see anything that looks like a bug, please let me know!

House of Commons Hansard #133 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was jordan.

Topics

Pooled Registered Pension Plans ActGovernment Orders

June 4th, 2012 / 1:05 p.m.

NDP

Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, in my riding, hundreds of Stadacona plant workers have, for the most part, lost $100,000 or more of their pensions as a result of the losses sustained by their private pension fund. This means that their retirement pensions could be cut in half. It is a real tragedy.

I am amazed by the government's failure to consider the risks arising from the proliferation of registered pension plans, given that a large number of them are already experiencing difficulties. The other thing that is absolutely absurd is the refusal to increase contributions to the Canada pension plan on the pretext that it would be too onerous for our workers, businesses and communities. And yet, we will have to find the money to contribute to the registered pension plans.

I will draw a parallel with the mainly private health insurance system in the United States. Private insurance companies now have such high premiums, because of the supposed competition, that even large businesses are finding it impossible to provide health coverage for their workers.

How can my colleague guarantee that Canadian pension funds will not go down the same slippery slope?

Pooled Registered Pension Plans ActGovernment Orders

1:05 p.m.

Conservative

Dean Allison Conservative Niagara West—Glanbrook, ON

Mr. Speaker, I am not sure where the question was. There was some talk there about health care, large corporations, pensions and mismanagement.

As we look at the bill, Canadians, who normally would not have a chance to contribute to a pension plan because of the size of the companies for which they work, would now have the opportunity to do so. As I said, small businesses are the largest employers around our country. For small businesses that hire six, seven, eight or ten people, it is cost prohibitive to set up any kind of pension plan. This legislation aims to pool pensions so that individuals can not only contribute to a pension plan, where otherwise they could not, but they can also take it with them. It is also locked in so that they would not have access to it until retirement age.

Pooled Registered Pension Plans ActGovernment Orders

1:10 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, for viewers who might be watching and listening to this important issue, we recognize that this is a tool, albeit a rather small tool that might assist a good number of Canadians. However, what we were really hoping to see come from the government was the larger picture. How will we be able to make some of the changes to the CPP, OAS and our guaranteed income supplement? There is an obligation for the federal government to negotiate with the provinces to try to enhance those pension programs, which are the fundamental programs that most, if not all, Canadians are very dependent on.

With regard to this specific legislation, could the member indicate to what degree Ottawa has actually received confirmation from which provinces that are prepared to act on this? Are we talking 50% of the provinces on side or 100% of the provinces on side? Could the member indicate how many provinces are on side with the legislation today?

Pooled Registered Pension Plans ActGovernment Orders

1:10 p.m.

Conservative

Dean Allison Conservative Niagara West—Glanbrook, ON

Mr. Speaker, I think what the member is talking about here is apples and oranges. There are a couple of different things going on here. We understand that the CPP is still something that is happening. It will continue to go on and there may be further negotiations. However, this would add another suite of products that would give options to small business owners.

When it comes to pension, that is federal and provincial legislation and it is dealt with in a way that we talk about what is required for people to put in. What we are talking about here is setting up something that will add to the suite of services the government has already delivered on. We have introduced pension splitting and tax free savings accounts. This is meant to complement a number of initiatives that we have already looked at in giving employers and employees options to save for their retirement as they move forward.

Pooled Registered Pension Plans ActGovernment Orders

1:10 p.m.

NDP

Pierre Nantel NDP Longueuil—Pierre-Boucher, QC

Mr. Speaker, I will be sharing my time with the hon. member for Esquimalt—Juan de Fuca.

Earlier, some members mentioned the fact that people may be watching us on television. I hope they have something else to do, because today's debate in the House is really going nowhere.

This is yet another bill with a rather confusing title. This bill, I believe, deals with pooled registered pension plans. But it really deals with savings, not pension plans. That makes me think that the people who work for the government legislators and think up the titles must also work for the paint companies like Sico, where long, evocative names are given to very simple things. If one day they brought us a bill proposing to cut down all the trees, they would call it “Prioritizing new species of vegetation.”

This bill does contain good intentions for small employers and small businesses. In itself, that could be praiseworthy, but the reality is different. I was listening to the member opposite talk about his favourite business, saying that it has the best tartufo or tiramisu or cheesecake around; he talked about the muffler repair shop near his house, and all these small businesses. It was wonderful: what a great story. But I have a tendency to think he was talking about some other local businesses, for example, the local branch of the Royal Bank of Canada, which made a profit of $5.7 billion in the last quarter, the Toronto Dominion Bank, which made a profit of $4.5 billion, or Scotiabank, where the profit was $4.3 billion. I could list a few of those.

We could believe that our colleagues across the aisle are acting in good faith. We could believe that they are listening to the little guys. Unfortunately, experience proves that they have a natural tendency to listen to the big guys, the big corporations, and neglect the little guys quite often. “Unfortunately”—that is a long word that reminds me of a five-letter word: Aveos. We cannot say that the government looks out for the little guy when we see how it behaved in that labour dispute.

When I say little guy, I mean the vast majority of the population. I am talking about people whose jobs do not provide them with very good protection plans.

Usually in society we come up with plans and programs to promote the common good, programs such as the Canada pension plan or the Quebec pension plan. What strikes me is that when it comes to the common good for the little guy, the government just throws something together. Again, it prioritized a solution by throwing something together with its buddies: it says it will do one thing, a good thing, but then it turns around and does another. I keep saying this has to stop.

People are judged on their intentions. The intention of the Conservative government, generally speaking, is always to favour the big corporations. It wants Canada to be a good place to do business, big business. As we speak, it is the little guy who is paying for it and that is sad.

In the past six years, the Conservatives have done absolutely nothing to boost retirement security for Canadians. In every one of their interventions—unfortunately, they often intervene in labour disputes—the thing that ends up on the chopping block is retirement security, the security of the working class. Bill C-25 is just another half measure and that is what they are developing.

Canadians deserve better than that. We will not settle for this. It is not necessarily a problem, but it is not enough. Throwing out a few crumbs in order to move on to something else is not good enough for us.

I think it is also very important to bear in mind that, according to the Canadian Centre for Policy Alternatives, most Canadian workers do not have RRSPs. Why? Because they cannot afford them. Last year, only 31% of eligible Canadians contributed to an RRSP, and unused contribution room exceeds $500 billion. When I was preparing my last tax return, the amount that I could have contributed to an RRSP was huge. I do not think I could contribute that much, even if I wanted to. This example simply illustrates how serious the contribution problem is, even though we have a public program that works very well and guarantees some financial security for everyone. However, this government does not seem to care about everyone equally.

Someone mentioned the fact that the Australians tested the same thing 10 years ago. In the end, that initiative did not work. It did not meet expectations. What does the government want, apart from asking its friends on Bay Street if they feel like investing a few billion dollars in this, just for the fun of it? It is unfortunate, but the Conservatives seem to just do whatever they like. They do not consult anyone. They have no interest in consultation. They go ahead with their own ideas. One might think that they have great ideas, but no, they do not have any strokes of genius. They have not heard the voice of God. They simply came along with their biased opinion that their friends are going to like this.

That is what is happening. They are working for the upper class. This is unfair, because this government was elected by the public, by ordinary people. We are not talking about giving even more crazy tax breaks to the big oil companies or banks; we are talking about protecting ordinary people.

A five-letter word is flashing in my mind: Aveos. I hope that one day, the Conservatives will lie awake at night thinking of that word: Aveos. The people at that company lost everything, but the Conservatives do not care at all. That is unacceptable. How can they even introduce a bill that talks about protecting retirees, when these people were run over by a tractor and were told that it was no big deal, that the bosses were right. That is shameful; but that is a whole other story.

In passing, I would like to mention what a number of journalists think, because we are not the only ones who believe that a public plan would certainly be a better option. For example, the Conference Board of Canada has a disturbing statistic: 1.6 million seniors live in poverty and 12 million Canadians do not have a pension plan. According to the OECD, the Canada Pension Plan and the Régie des rentes du Québec are relatively inadequate and other countries have guarantees and much more generous public pension plans.

In the United States—they like it when we talk about the United States—maximum social security benefits are about $30,000 a year. Here, they are about $12,000 a year. Is that not a nice parallel? Do they not care? It is too bad, but they have erred so much in the past that I simply do not trust them. It is unfortunate, but that is also what the vast majority of Canadians think.

I must stop there, but I encourage my colleagues opposite to preach by example, to show some interest in the common good, an interest in consultation. Then, we would be happy to work with them.

Pooled Registered Pension Plans ActGovernment Orders

1:20 p.m.

Calgary Centre-North Alberta

Conservative

Michelle Rempel ConservativeParliamentary Secretary to the Minister of the Environment

Mr. Speaker, many small employers do not have the ability to offer pension plans because of two key things: the fiduciary responsibility associated with managing a pension plan and the administrative costs. Those are two very burdensome issues that employers would face. The PRPP would give small businesses, which would not otherwise be able to offer a large pension plan or participate in a group RRSP, the tool they need.

If we do not implement this, how would my colleague address the fiduciary responsibility and administrative cost burden?

Small businesses are often at a disadvantage from a recruitment perspective because they cannot offer pension plans. Since the member has signalled that he will not vote for this, how would he rectify the recruitment issue that this legislation would address?

Pooled Registered Pension Plans ActGovernment Orders

1:20 p.m.

NDP

Pierre Nantel NDP Longueuil—Pierre-Boucher, QC

Mr. Speaker, I thank my colleague for her question.

It seems we agree that introducing more tools to improve pensions for small business employees is a good idea. However, the truth is that the Conservatives will not budge on the rest. The simple solution is to enhance our public pension plans, but they seem to be allergic to anything that would require major state intervention when it comes to meeting ordinary people's basic needs.

Pooled Registered Pension Plans ActGovernment Orders

1:20 p.m.

Independent

Bruce Hyer Independent Thunder Bay—Superior North, ON

Mr. Speaker, like the hon. member here, I would really like to see a proper CPP enhanced, brought up to date and modernized to work better.

I find it fascinating that this group across the aisle wants to trust, again, the bankers and the brokers in Bimmers who have caused our problems and encourage Canadians to utilize those pools, many of which already exist, instead of a proper CPP.

My question for the hon. member is, if the members on the other side trade their gold-plated MP pensions for private pooled plans, will he join me in that?

Pooled Registered Pension Plans ActGovernment Orders

1:20 p.m.

NDP

Pierre Nantel NDP Longueuil—Pierre-Boucher, QC

Mr. Speaker, I would like to thank the independent MP over in the corner. My colleague changed his political stripes.

Once again, it is very clear that the government is not interested in funding pension plans. Earlier, we were told how obvious it is that everyone wants to own stocks.

Sure that is obvious. Of course. Unfortunately, that is how finance is done nowadays, and we saw how that turned out. My colleague was right to point out that, in 2008, those people played with real people's money and savings. I know people who lost 40% of their retirement savings. That means that instead of living for 20 years off their retirement savings, they can live for just 12 years.

Pooled Registered Pension Plans ActGovernment Orders

1:25 p.m.

NDP

Alexandrine Latendresse NDP Louis-Saint-Laurent, QC

Mr. Speaker, I have a question regarding the last comment by my colleague from Longueuil—Pierre-Boucher.

The Conservatives' changes to employment insurance will create a huge machine to monitor all available jobs in Canada and to ensure that there is not one unemployed person. If there is a job available somewhere, the unemployed person will have to take that job.

This measure will be expensive, but they still want to implement it. And yet, the Conservatives are saying that they do not want to make any changes to the current pension system that will improve it.

I would like him to comment on the apparent contradiction between these two positions.

Pooled Registered Pension Plans ActGovernment Orders

1:25 p.m.

NDP

Pierre Nantel NDP Longueuil—Pierre-Boucher, QC

Mr. Speaker, this is the first time I have risen to thank the member sitting next to me. I thank her for the question.

The problem lies strictly with their intention. Their intention is the problem. The Conservatives decided to go to Davos to tell their big buddies that the Conservatives are doing a good job of governing Canada and to come and invest here because the public does not call the shots.

Pooled Registered Pension Plans ActGovernment Orders

1:25 p.m.

NDP

Randall Garrison NDP Esquimalt—Juan de Fuca, BC

Mr. Speaker, I rise today to speak to Bill C-25 at third reading. I am very happy to do so. I know that all members in the House share the common goal of making sure that all Canadians have security in their retirement. However, I am rising to speak against the pooled registered pension plan scheme for many reasons.

One of the reasons is that it would not actually guarantee a pension. As many on my side have pointed out, we should not be calling this a pension plan. Instead, it is a savings scheme. The second reason is that it would put the burden solely on employees and would not require any contribution from employers. It would allow employers to say they are doing something for employees' retirement, but they will pay for it. In that sense, the style of the plan is a bit deceptive.

It would not be indexed to inflation. When we combine that with no cap on administrative fees or costs, it means that the risks would be entirely borne by the employees. Therefore, when it came time for employees to retire, there would be no guarantee that they would even get back payments equally valued to the contributions they made.

How do we know that? We have seen the evidence from the Australian plan, which was put in place more than a decade ago, similar to this, called the Australian super fund. In the study of that plan by the Australian government recently, it showed exactly what I said, that the benefits were only equal to the rate of inflation. In fact, the employees who contributed were simply treading water and not really planning for secure retirement.

I have heard members on the other side ask why on earth I would oppose what is another tool in the tool box for retirement savings. I would first say that I am worried it would become another tool in the tool box of investment planners and banks to make more money for their long-term security instead of making more money for the people who actually contribute to those plans. Their tool box is already full, from my point of view, and there is no need to give them another profit source as I think this plan would obviously do.

Is it a real tool for employees to save for their retirement? It would certainly take money out of their cheques. Most families are struggling as it is just to make ends meet by providing housing, putting food on the table and providing for their kids. The vast majority of employees do not have any spare money to risk in a plan like this. Their money would be much better invested in an expanded Canada pension plan. The Canada pension plan is not a theory or ideology but a proven plan that has shown it has lower costs. Why does it have lower costs? Because it spreads out the administrative costs over the entire population. It is a plan that has lower risk. Why does it have lower risk? Because it spreads the risk across the entire population and provides a defined benefit indexed to inflation.

The CPP has a couple of other benefits that we do not often talk about. One of them is that increasing benefits in the CPP would ultimately reduce costs for government because it would reduce the demand for GIS payments. In other words, if people had been allowed to put money into a plan that would provide them a secure retirement and pay for it themselves, they would not be dependent on welfare at the end of their lives in terms of the GIS. That is no criticism of those who collect GIS. Most Canadians have not had the opportunity of having secure jobs with workplace pension plans that pay enough to provide secure income. The easy way to do that is to expand the Canada pension plan.

This has been on the public agenda since 1996 when the NDP government of British Columbia first put an expanded CPP on the table and tried to convince governments at that time. If it had begun with a slow increase in the contributions made by both workers and employers back in 1996, we would be in a place where the CPP would be providing double the benefits it provides now. We would have made a great dent in the problem of seniors poverty. It is still not too late. The NDP campaigned in the last election to do just that: begin with modest increases in the contributions by workers and employers and, over time, double the benefits that are being paid out by the CPP. Again, workers would be paying for their own secure retirement. It is not a welfare program. There would be no cost to government.

The Canada pension plan along with its parallel, the Quebec pension plan, have been major contributors to helping end poverty among seniors. As I said, it is an earned pension with all the dignity and self-esteem that comes with having provided for one's own retirement.

I would point out they are also very good for small business. We are talking about small businesses that are too small, really, to run their own workplace pension plan, that could not bear those administrative costs, that cannot recruit, as the hon. Parliamentary Secretary to the Minister of the Environment talked about, that cannot recruit employees because they cannot offer the same kind of benefits.

Yet, if the benefits under the Canada pension plan were increased, it would level that recruitment playing field for small businesses, because people would be earning an adequate pension in all jobs across the country.

Originally the CPP was designed, along with the QPP, to be supplemented by private pension plans, so the original plan was never meant to provide the full retirement income. It was thought at the time that workplace pension plans and other schemes would fill the gap to bring Canadians up to an adequate retirement income.

What we have learned is that that has not happened for several reasons. One of those, of course, is that more than 12 million Canadians lack any workplace pension plan of any kind. Even those who do have plans are quite often enrolled in plans which are not portable. We all know the days when people go to work for one company and stay there for 30 years are becoming more and more rare. Even if they had a private pension plan, when they are forced to change jobs, people often have to start over in a new private plan or cash out their benefits at that time.

The second problem with workplace pension plans that we have seen in the last years of economic crisis is that they are not secure. When a company goes bankrupt, unfortunately, those with disability pensions and those with workplace pensions are almost last in that line of creditors.

For that reason, the NDP has proposed, as another way of securing retirement incomes, the bankruptcy laws in this country need to be amended to place disability pensions and retirement pensions at the front of the line of creditors in the case of bankruptcy, so that those who have made contributions themselves would have their pension secured before the other creditors of those bankrupt companies. Unfortunately, we are still waiting for action on that very important point.

The Canadian government, under the Liberals, did recognize that retirement savings were inadequate. The government came up with the registered retirement savings plan to allow people to voluntarily put money into a plan to help supplement the CPP in their retirement. A good idea in theory, but the problem with that plan is that because of the high cost of living, the high cost of housing and other difficulties in making ends meet, only 31% of those who are eligible to contribute to RRSPs are actually able to do so. That means that this great solution to fill that gap has not been successful.

More recently the federal government came up with the idea of tax-free savings accounts. Once again, there is an implicit recognition that there is a gap in retirement income for Canadians. So the tax-free savings accounts were set up. Only about 41% of Canadians have established a tax-free savings account. Most of those say that they are not using it to save for retirement.

Most interesting to me, over half of those who have tax-free savings accounts earn more than $100,000 a year in income. They are obviously already able to take care of themselves when it comes to retirement. Most Canadians, obviously, do not earn anywhere near this figure and do not have extra money at the end of every month to put into a tax-free savings account.

The vast majority of Canadians are dependent on the CPP for their own retirement income. When we look at the benefit levels of $12,000 per year, it is clearly not enough. As I mentioned, it was not designed to be enough. It was designed to be supplemented by these other programs which have failed over time to do so.

Now it is time to revamp the CPP and QPP to make sure they provide an adequate retirement income, that we share the risk, that we spread this out over everyone in society, and make sure that everyone is secure in their income.

Clearly there are some other measures that are needed to attack the problem of inadequate retirement income. I mentioned amending the bankruptcy legislation in this country, and I think that is very important.

The NDP also promised that when we are government we will increase the GIS to immediately lift every senior out of poverty at a relatively modest cost.

Why not proceed with the CPP? The government says the provinces are not onside. It requires co-operation to change the CPP and the QPP. As far as I can tell, only one province was really opposed. I have seen no real effort from the federal government to bring the provinces onside to expand the CPP.

In conclusion, I would just like to remind members of the House that all Canadians would benefit from an expansion of the CPP, not just the fortunate few.

It would benefit small business. It would benefit workers changing jobs. In particular, it would benefit those who work hard all their lives in low-wage jobs and are not able to save for their retirement.

I urge the House, rather than create this new plan, which would do nothing to solve the problem, to turn instead to an expansion of the CPP-QPP program.

Pooled Registered Pension Plans ActGovernment Orders

1:35 p.m.

Conservative

Laurie Hawn Conservative Edmonton Centre, AB

Mr. Speaker, I listened with interest to the speech by my colleague across the way. I have a couple of comments to make and then a couple of questions.

First, the TFSA was not necessarily intended for retirement. It was intended for a whole host of things. I would consider 41% uptake to be pretty extraordinary.

The member talked about expanding CPP and QPP. I assume he realizes that would mean more investment in the stock market for those apparently hated things like banks and resource companies. Does he think that the dividends that Royal Bank, for example, is putting into his QPP are a bad thing, when he seems to want more of them?

Early in his remarks he called PRPPs a bad plan because people would be forced to pay for their own retirement. A little later in his comments he said CPP was a good thing because people are paying for their own retirement, with the pride that brings. I am wondering if he could explain that apparent contradiction to me.

Pooled Registered Pension Plans ActGovernment Orders

1:35 p.m.

NDP

Randall Garrison NDP Esquimalt—Juan de Fuca, BC

Mr. Speaker, my point was that being forced to contribute to a pooled pension plan, which is risky and would have no defined pension at the end of it, is the problem. When people contribute to the Canada pension plan, they have a defined benefit and the risks are shared out over society.

I have nothing against the stock market except when the risks are borne by individuals who do not have an adequate income to begin with. Then it is not a good solution for saving for their retirement.

The thing that works is just the thing the member is actually suggesting in the pooled plan. When people pool their resources into a larger plan then it spreads the risk. That is why the CPP is a better way to save for retirement than leaving the risk with individuals or very small pooled plans.

Pooled Registered Pension Plans ActGovernment Orders

1:35 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, we in the Liberal Party agree in essence with regard to the CPP and its benefits. This program has been in place for generations. It was a Liberal Party initiative many years ago that made people realize how important pension plans are for seniors, and that is the reason we established a CPP program.

We would like to see the government demonstrate more leadership on that particular file. The government needs to meet with the provinces and work out a better agreement so that workers today will be able to retire with more money going forward.

I come from a province where there is an NDP administration. That NDP administration talked about the labour crocus fund as a form for retirees to invest in. It promoted the crocus fund. It is quite different from the pooled pension plan that is being proposed, but the concept of seniors using their private money to invest in a venture capital fund was something it saw as a positive thing even though there were management fees and so forth.

Would the federal NDP have opposed a venture fund with tax incentives for seniors to invest in that type of approach? Does it have to be CPP or broke?

Pooled Registered Pension Plans ActGovernment Orders

1:40 p.m.

NDP

Randall Garrison NDP Esquimalt—Juan de Fuca, BC

Mr. Speaker, I note that the Liberals have 20/20 hindsight and vision back to the things they accomplished many years ago. I just wish they had the same foresight at this time.

In supporting the pooled retirement savings plan, a big mistake is being made in terms of public policy. We are telling people they are going to get something that is not there, something that is not secure, something that will not deliver in the long run.

The member asked if I would support seniors investing in venture capital. Only wealthy seniors can afford to take those kinds of risks. It is called venture capital for a reason. Average people who have worked hard all their lives in an average job cannot afford to risk their retirement on those higher risk ventures. They need something secure that will provide them with a defined benefit to take care of them in their old age, and that is the genius of CPP and QPP. They have shown us success over time. That is the reason I think they are the solution to this problem.

Pooled Registered Pension Plans ActGovernment Orders

1:40 p.m.

Willowdale Ontario

Conservative

Chungsen Leung ConservativeParliamentary Secretary for Multiculturalism

Mr. Speaker, as a former small business owner, I wish to speak in support of the pooled registered pension plan.

In these tough economic times, our Conservative government continues to work hard to create jobs for Canadians. Naturally, one way of doing this is to support job creators. What do I mean by this? I mean supporting small and medium-sized businesses.

I am proud to say that this is one of the great aspects of Bill C-25, an act that would implement the federal framework for pooled registered pension plans.

The bill would remove traditional barriers that might have kept small and medium-sized businesses from offering a pension plan to their employees in the past.

Members may ask what are traditional barriers. One is responsibility. Under the PRPP framework, the fiduciary responsibility related to the management of pension plans would be shifted from the employer to a licensed third-party professional administrator.

The second traditional barrier is the administration of the pension. Under the PRPP framework, the administrative burden of the employer would be reduced. Again, most of this burden would be shifted to a licensed third-party professional administrator.

With these significant barriers removed, employers would be able to offer a workplace pension plan to their employees for the first time. In fact, the business community has already commented on how the reduced administrative burden would be of great benefit. For example, Thomas Lambert, the CEO of Canadian Multicultural Radio said:

The PRPP is just the kind of option we've been searching for. With the savings on the administrative costs we can incentivize our staff towards better retirements savings.

By offering a low-cost and administratively simple pension plan, employers would have a new tool to attract and retain skilled employees. I ask hon. members if they would not like to work for a company that offers a low-cost pension option to its employees, a pension option that aims to leave more money in their pocket when they retire. According to the Canadian Chamber of Commerce, that is exactly what PRPPs would do. It said:

...(PRPPs) would be a great option to attract new talent to our business. A pension plan draws a lot of the skilled people that we need to the larger corporations and this would be a nice edge to add to a great business.

There is even more. The introduction of PRPPs would be of great benefit in the self-employed medical profession. Here is what the Ontario Medical Association had to say:

The creation of pooled registered pension plans (PRPPs) levels the playing field by providing the self-employed, including physicians, with better access to additional savings opportunities that have up until now been unavailable.

Mr. Speaker, I am just reminded that I will be sharing my time with the Parliamentary Secretary to the Minister of Veterans Affairs.

Allow me this opportunity to explain how PRPPs would help these employees and self-employed Canadians achieve their retirement goals.

One of the great features of a PRPP is auto-enrolment. Where an employer offers a PRPP, all employees would be automatically enrolled. Not only would this increase participation, but it would also encourage more Canadians to save for their retirement.

Another great feature is portability. This means that when employees changed jobs, they could take their PRPP with them from job to job.

Another innovative feature of the PRPP is that the contributions by members would be locked in. This would ensure that plan members would have savings when they retired.

I would be remiss if I did not talk about one of the major benefits of the PRPP, and that is its low costs. It is clear that the opposition members do not fully understand this concept. Please allow me a moment to explain its key feature to them.

Essentially, PRPPs would facilitate low cost through their scale and design by achieving certain economies of scale. It does not matter whether a person manages $1 million or $100 million; the effort is the same.

As I mentioned earlier, PRPPs would have a broad-based availability. By pooling all these pension savings, the cost of administering the pension funds would be spread over a larger group of people. This would enable plan members to benefit from the lower investment management costs that are typically associated with the average larger mutual funds.

The low cost feature of PRPPs is something that stakeholders around the country are raving about. I will share with hon. members some of the feedback following our broadly based consultation. According to the Canadian Federation of Independent Business:

A new voluntary, low-cost...retirement savings mechanism will allow more employers, employees, and the self-employed to participate in a pension plan....

The Canadian Taxpayers Federation comments:

Canadians will be able to save more for retirement with this new pension plan. People saving for retirement will enjoy lower costs and more flexibility through their working lives.

Unfortunately, instead of jumping on board with this great incentive, the opposition members would rather expand the Canada pension plan. Clearly, the opposition members are not interested in creating jobs. They are interested in taxing the job creators.

Make no mistake; our Conservative government would never take such a reckless and irresponsible position. Our government understands that the last thing job creators need in a time of global economic uncertainty is another tax hike.

Unlike the opposition, our Conservative government understands it is tax reduction that facilitates the creation of jobs and economic growth. That is why in our economic action plan 2012, our government is committed to extending hiring credits to small and medium-sized businesses for another year.

Do members know what this would mean? This would mean jobs, growth and long-term prosperity. On the economy, our record is clear. Since July 2009, more than 750,000 net new jobs have been created. That is a result Canadians appreciate.

With the passing of Bill C-25, federally regulated workers as well as those in the Northwest Territories, Nunavut and the Yukon would be able to take advantage of PRPPs.

I would hope that every province would pass legislation to implement the PRPP as soon as possible, so that all Canadians would be able to access the low-cost, broad-based pension plan.

The legislation is a win-win for both employers and employees. By introducing the PRPP, we would be strengthening Canada's retirement income system, a system that is viewed around the world with envy.

When it comes to PRPPs, our government is on board, small and medium-sized businesses are on board and, most important, Canadians are on board. The only real question is: Why are the members of the opposition not on board?

I would encourage all members of the House to stand and support the swift passage of Bill C-25. The sooner PRPPs are available, the sooner more Canadians could start saving for their retirement.

Pooled Registered Pension Plans ActGovernment Orders

1:45 p.m.

NDP

Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, I would simply like to consult my colleague on the so-called collective aspect of the pooled registered pension plans.

The only collective aspect I see is a collectivization much like that enforced under Stalin more than 80 years ago, in other words, a general misery shared among those who already have very little means, who have limited wages and who work for small businesses that are not on a very strong footing.

Can my colleague explain the magic formula whereby employees of these small businesses will manage to contribute to this retirement tool the government is proposing without becoming completely impoverished? We know that Canadians currently have $500 billion in unused RRSP contribution room and that this has been the case for a long time. People do not have the means to use these savings vehicles.

Where is the solution? What will this do other than make people poor?

Pooled Registered Pension Plans ActGovernment Orders

1:50 p.m.

Conservative

Chungsen Leung Conservative Willowdale, ON

Mr. Speaker, let me say that in our society we are quite unlike that of Stalin, unlike a communist state where it is a totally planned economy. We do not have a totally planned economy. We have an economy that allows businesspeople to exercise their entrepreneurial spirit, thereby achieving the best they can for their employees and for the economy in general.

What the member opposite should know is that there are many ways for people to achieve retirement. One way is through their principal residence that they would have built and renovated as they contributed to its mortgage.

Another way is if people are lucky enough to have a company pension plan. That is fine, but if they do not have that, like most small and medium-sized businesses, this is what the pooled registered pension plan would do.

The member mentioned that the RRSP is another tool that only the rich can afford. That is not true. I think what we are doing is giving the employees or the individual businesspeople that option to decide how they want to save their money. Certainly the tax-free savings account is another option we have provided.

There is an array of tools people can use to plan for their own pension.

Pooled Registered Pension Plans ActGovernment Orders

1:50 p.m.

Liberal

Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, I want to remind my colleague across the way that in his speech, basically, he illustrates that all the opposition are against this type of measure, which is not true at all. I certainly do understand why this is in place. The only thing I would say is that it is just a small tool in the shed that we can use. I suggest we should go a little further, given the situation that society finds itself in and the imperative of trying to find stable income in the retirement years.

However, it does not come without some problems. There are other examples around the world; for example, the Australian example. Here is what was written about the program in Australia from 1997. It said:

...total assets in the system have grown substantially through contributions, but net earnings from investments were relatively low. Despite the presumed role of competition, the investment performance of the system continued to be restrained by high fees and costs.

That is from the similar system in Australia. I wonder if my colleague would comment as to how this program would not do that.

Pooled Registered Pension Plans ActGovernment Orders

1:50 p.m.

Conservative

Chungsen Leung Conservative Willowdale, ON

Mr. Speaker, it seems like the member is only focused on Australia. I would suggest that if he were to look at the provident fund of Singapore and some of the pension funds in Japan and Taiwan, he would find that there is exactly that, where they issue an array of products for employees to participate in.

One of the problems with a centralized mega-fund, as is the case with the CPP, is that one is confined by legislation and, therefore, must invest in very conservative investment instruments. When this is opened up to a more open society that reflects the way our changing world economy and financial system is moving, the individual professional investor who can take advantage of tools like derivatives, commodity investments, options and so on, would be in a better position to buy you better growth in your pension plan.

Pooled Registered Pension Plans ActGovernment Orders

1:50 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

Before resuming debate, I would remind all hon. members to direct their comments and questions to the Chair rather than to their colleagues.

Resuming debate. The hon. Parliamentary Secretary to the Minister of Veterans Affairs.

Pooled Registered Pension Plans ActGovernment Orders

1:50 p.m.

Mississauga—Brampton South Ontario

Conservative

Eve Adams ConservativeParliamentary Secretary to the Minister of Veterans Affairs

Mr. Speaker, I listened to the hon. colleagues across the aisle and the NDP members just do not seem to get it. They continue to advocate for something that is neither feasible nor has the support perceived.

I am talking about their proposal to double the Canada pension plan. There are several problems with this proposal. I will outline them for the NDP and see if it can be convinced once and for all that doubling the CPP is simply not practical.

Any change to the Canada pension plan is subject to a formula specified in the legislation. In case the NDP did not know, I mean the legislation governing the Canada pension plan. The legislation clearly stipulates that the CPP can only be amended by a consensus of two-thirds of the provinces, representing two-thirds of the population.

At the 2010 finance ministers' meeting, a number of provinces had strong objections to expanding CPP benefits. However, the ministers made a unanimous decision. They unanimously decided to set up a framework for pooled registered pensions plans.

Unlike the NDP's proposal, which does not have the support of the provinces, the decision to move forward with pooled registered pensions plans was unanimous. That is not the only problem with the NDP plan. To expand CPP benefits or, in the NDP's case, to double them, we would have to raise contribution rates.

Higher contribution rates would mean higher payroll costs for small and medium-sized businesses and higher premiums for workers and the self-employed. Unlike the NDP, our government remains focused on the economy. This means focusing on job creation and economic growth and Canada's long-term prosperity. Our government does not believe that now is the time to jeopardize Canada's fragile economic recovery by imposing higher costs on job creators.

The House might be interested to hear that many other groups share our government's philosophy that expanding the CPP in these turbulent economic times is the wrong choice.

For example, according to the Canadian Federation of Independent Business, CFIB, for every 1% increase in CPP premiums beyond the current 9.9% tax rate, it would cost 220,000 person years of employment and force wages down roughly 2.5% in the long run. For those who want to double the CPP, they might be interested to know that, according to CFIB calculations, to double CPP benefits would kill 1.2 million person years of employment in the short term.

All these so-called solutions proposed by the NDP would be detrimental to Canada's economic performance. They would result in lower economic growth and lower job creation. This would mean more unemployed Canadians, a sort of the NDP way.

Members can rest assured that our Conservative government will not engage in such a reckless plan. Our government has a strong record of job creation and job growth. In fact, I am pleased to say that, since July 2009, over 750,000 net new jobs have been created in Canada. That is a result that Canadians appreciate and a result that the residents of Mississauga—Brampton South appreciate.

It is important to remember that Bill C-25 represents the federal portion of the PRPP framework. In order to make this available to all Canadians, the provinces must put in place their own PRPP legislation. Once that happens, PRPPs will be a key element to Canada's retirement income system.

However, my constituents may be denied the opportunity to partake in a PRPP. Unfortunately, the McGuinty government has indicated that it may tie the introduction of PRPPs to an expanded CPP. Simply put, such a decision serves only to deny hard-working Ontarians of a low-cost, broad-based workplace pension plan.

Guess what? Many others feel the same way. This is what the Canadian Chamber of Commerce, the Canadian Federation of Independent Business and the Canadian Life and Health Insurance Association think of Mr. McGuinty's plan. In their words:

We do not support the concept that PRPP implementation should be tied to CPP enhancements. Given the time and processes involved in making any changes to CPP, this would only serve to delay an initiative that, in its own right, is viable, innovative and beneficial to Ontarians.

They go on to say:

It is time for Ontario now to step up to ensure that Ontario residents, particularly those who work for small and medium-sized businesses, can reap the benefits of a low-cost, accessible pension plan.

Why is the McGuinty government denying Ontario residents and my neighbours the ability to save for their retirement? Perhaps it is because, like the NDP, it does not understand how PRPPs work.

Pooled Registered Pension Plans ActGovernment Orders

1:55 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

The time for government orders has expired. The hon. parliamentary secretary will have four minutes remaining for her speech when this matter returns before the House.

Olympic GamesStatements By Members

2 p.m.

Conservative

Bernard Trottier Conservative Etobicoke—Lakeshore, ON

Mr. Speaker, in just under two months, Canada's finest athletes from all corners of our country will embark on a quest for goal at the London Olympics.

Today, I would like to recognize three world-class swimmers who live and train in Etobicoke and who will be carrying our banner proudly.

Sisters, Brittany and Heather MacLean, who were both active with the Etobicoke Swim Club from a very young age, will represent Canada in the relays, Brittany in the 4x200 freestyle and Heather in the 4x100 freestyle. Brittany will also compete in the 400 meter freestyle after setting a new Canadian record in qualifying.

Alexa Komarnycky, a Silverthorn Collegiate graduate, had an early start to her swimming career as she took public swimming lessons at the Etobicoke Olympium at the age of four. She will be representing Canada in the 800 meter freestyle.

Those three young stars of the pool will contribute to another great chapter in Canada's Olympic history. After an unmatched success in Vancouver, we look to our young athletes to once again own the podium in London.

I offer my sincere congratulations to all of Canada's Olympians and wish them the greatest of success this summer in London.