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House of Commons Hansard #136 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was panama.

Topics

Third ReadingPooled Registered Pension Plans ActGovernment Orders

12:45 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I will address the member's first point.

The speech I gave was totally coherent. It is very easy. If we use CPP as an example, we would not force it upon all companies to contribute for all their employees because some companies cannot afford to, but some companies can.

The reason some companies would not have a pooled registered pension plan, as I stated, is because they are too small to even administer or handle the extra paper, as they are overloaded. That is the reality.

However, if there were enough employees who want to opt in with the CPP, eventually everybody will. It may start with 1¢ a pay, 10¢ a pay, $1, $10, or whatever it may be, but at least the system is there and already set up.

We have spoken to the people from CPP and QPP, and they are willing and able to do this. I do not see what the big deal is. I do not know why we have to make bankers and insurance companies richer by setting up a separate program.

Also, the Liberal government did not take money away from anything. The CPP is a totally independent board that administers money independently. None of that money was ever transferred.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

12:45 p.m.

NDP

Marjolaine Boutin-Sweet NDP Hochelaga, QC

Mr. Speaker, my former employer set up a pooled registered pension plan, to which the employer contributed. But only a fraction of the employees took advantage of it, probably because most employees worked part-time and did not have the money to invest. It is a similar situation in my riding, because many people have a very tight budget and do not have even $5 or $10 to set aside every week.

We know that 74% of Canadians do not invest in RRSPs because they do not have the means to do so. Despite that, the Conservatives' plan today is to pass the bill quickly through a time allocation motion, claiming that there is a huge demand for these plans.

I would like to hear what my Liberal colleague has to say, as he perhaps touched on this issue earlier in his speech.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

12:45 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I would like to thank the hon. member for the neighbouring riding of Hochelaga. Our ridings are facing similar challenges. In fact, some areas of Hochelaga—Maisonneuve and Saint-Léonard—Saint-Michel are very poor.

The hon. member raised some very important points. According to the Liberal Party, we should start with a voluntary program. Are we going to ask people who work part-time and earn $100 a week—like my son who has just started working— to contribute 20% of their salary to a retirement plan? That is unacceptable.

For that reason, we believe that we must start by deducting the amounts already set out in the law. Later, we could increase these deductions by establishing criteria that we will have discussed beforehand. This is not something we should impose today. The government should not be imposing a gag order on a bill that should be debated.

I do not understand this government's attitude. There are a number of things that are more important than retirement plans for people who are already rich and are already making significant contributions to their RRSPs. In my opinion, the issues this country must address today are pensions, students and young people.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

12:45 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I want to follow up on the response from the member. I want it to be clear and on the record that it was the current government that brought in the process that contributions to CPP cannot be raided of any surpluses by any government in the future. That was our doing, our policy.

Based on the member's comments, I assume the member is in support of and congratulates the government in making sure that future governments cannot raid surpluses, as previous governments have done in the past.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

12:50 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, the only thing this government has done in terms of raiding was to set up an independent unemployment board and dedicate $1 billion to it. It already has a deficit of $3 billion or $4 billion after three years. This government has only been in power for six years and has done nothing but tax Canadians and put them in the situation they are today.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

12:50 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

Mr. Speaker, I am delighted to be sharing my time with the member for Brandon—Souris.

Our government understands that hard-working Canadians and seniors want an effective and sustainable retirement income system that will help them achieve their retirement goals. That is why I am pleased to have this opportunity to speak to Bill C-25, an act that would implement the federal framework for pooled registered plans, or PRPPs.

PRPPs would mark a significant step forward in improving Canada's retirement income system by providing a new pension option to Canadians. Currently, 60% of Canadians do not even have access to a workplace pension plan. Most of these Canadians work for small and medium-sized businesses or are self-employed. Clearly, this represents a gap in Canada's retirement income system, a gap that PRPPs would fill.

PRPPs would allow these Canadians to access a pension plan for the very first time. In short, PRPPs would be a broad-based, low-cost, privately administered pension plan option. We may think of it this way: pooling pension savings would spread the cost of administering the pension funds over a large group of people. This would allow plan members to benefit from lower investment management costs, lower than those typically associated with the average mutual fund. Do members know what this would mean? It would mean that more Canadians would have more money left in their pockets for when they retire.

Simply put, the PRPP is the most effective and targeted way to address the gap in Canada's retirement income system. How will it do that, one might ask? PRPPs would address this gap by providing a new, accessible, straightforward and administratively low-cost retirement option for employers to offer to their employees; allowing individuals who currently may not participate in a pension plan, such as the self-employed or employees of companies that do not offer pension plans, to make use of this new option; enabling more people to benefit from lower investment management costs that result from membership in a large pooled pension plan; allowing for the portability of benefits, facilitating an easy transfer between plans; and, finally, ensuring that funds would be invested in the best interests of plan members.

Clearly, PRPPs are what Canada's retirement income system has been waiting for. This is why it is so important that the provinces follow the lead of our government and implement PRPPs as quickly as possible. Doing so would enable Canadians from coast to coast to coast to take advantage of this great new pension option.

Unfortunately, not everyone feels the same way. While our government is trying to implement PRPPs, the NDP would rather take the irresponsible and reckless route. It wants to double CPP. Do people know what that would do? It would result in higher CPP contribution rates for employers, employees and the self-employed. In the case of small and medium-sized business owners, it would act as a payroll tax, and that is a tax on job creators.

Members need not take my word for it. Let us hear what the Canadian Federation of Independent Business had to say. According to its research, “to double CPP benefits would kill 1.2 million person-years of employment in the short term”. Only the NDP would propose something so reckless. That is the difference between our Conservative government and the irresponsible NDP.

While our government is committed to generating economic growth and long-term prosperity, the NDP has no problem jeopardizing Canada's fragile economic recovery by imposing higher taxes on job creators. That, to me, is unbelievable.

It should be clear that doubling the CPP is the wrong decision for Canada and our economy. Unlike the NDP, our government believes that lower taxes help to generate economic growth and create jobs for Canadians.

Let us just look at the facts. Since July 2009, more than 750,000 net new jobs have been created. What is more, Forbes magazine ranks Canada as the best place for businesses to grow and create jobs. When it comes to the economy, there is no doubt why Canadians trust this government. This government gets results. That is why Canadians trust this government to keep Canada's retirement income system strong.

I will take a moment to tell the House just how much our government has done to ensure that Canada's retirement income system will continue to be the envy of the world.

Since 2006, our government has increased the age credit amount by $1,000 in 2006 and by another $1,000 in 2009. Next, we doubled the maximum amount of income eligible for the pension income credit to $2,000. Our government introduced pension income splitting, and we increased the age limit for maturing pensions and registered retirement savings plans, RRSPs, to 71 from 69 years of age.

What is more, budget 2008 introduced the tax-free savings account, which is particularly beneficial to seniors as it helps them to meet their ongoing savings needs on a tax-efficient basis. Our record also includes important improvements to several specific retirement income supports. Budget 2008 increased to $3,500 the amount that can be earned before the GIS is reduced. This means GIS recipients will be able to keep more of their hard-earned money without any reduction in GIS benefits. Budget 2008 also increased flexibility for seniors and older workers with federally regulated pension assets that are held in life income funds.

Budget 2011, the next phase of Canada's economic action plan, announced new measures to improve seniors' financial security and ensure they can benefit from and contribute to the quality of life in their communities. The plan includes a new GIS top-up benefit targeted to the most vulnerable seniors. Since July 1, 2011, seniors with little or no income have been receiving additional annual benefits of up to $600 for single seniors and $840 for couples.

The plan also provides an additional $10 million over two years to enhance the new horizons for seniors program. This additional funding will enable more seniors to participate in social activities, pursue an active life and contribute to their community. It will also provide funding for projects that will increase awareness of elder abuse and promote volunteering, mentoring and improved social participation of seniors.

Canadians just have to look at our record to know that this Conservative government is on their side, and the proposed PRPP is just the latest example. However, members need not take my word for it. The Canadian Chamber of Commerce states:

PRPPs—with simple and straightforward rules and processes—will give many businesses the flexibility and tools they need to help their employees save for retirement.

Greg Thomas, the federal and Ontario director of the Canadian Taxpayers Federation, says:

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 throughout their working lives.

It seems clear to me and to Canadians that PRPPs are the way to go.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1 p.m.

NDP

Anne-Marie Day NDP Charlesbourg—Haute-Saint-Charles, QC

Mr. Speaker, I would like to thank the hon. member for his speech.

We know that the tax-free savings account is one way of saving available to Canadians and that it is often the wealthiest people who can take advantage of these accounts. In general, it is rich people who can take advantage of these accounts or people who are at a point in their lives where they are transferring their pension funds into tax-free savings accounts to save on taxes and ensure that they have more money for their retirement.

I would like to ask a question about pension funds because we have spoken about them a number of times since this morning. Since when is a pension fund considered to be a withholding tax for employers? Why are we requiring workers, but not employers, to contribute to this pension fund?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

Mr. Speaker, as a small and medium-sized business person in my previous career path, I can tell members that my business struggled with options to provide security to our employees. We used, for example, group RRSPs in our business as one means of providing an option to our staff, our team.

To me, this plan is the perfect opportunity to provide a low-cost, flexible product or option with a greater ability of employees to get in. It will give our staff the opportunity to participate in something that they simply never had before.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, the member himself would no doubt acknowledge that the number of individuals who will benefit from this particular legislation is somewhat limited.

There are a large number of Canadians, and there is some value in terms of establishing this fund. It can be used as a tool to facilitate additional retirement funds for many seniors going forward. However, the vast majority of Canadians are quite concerned about the future of CPP. They are looking for the Government of Canada to sit down with the provinces and look at ways to enhance the quality of life for future retirees by making a more sincere, genuine investment in CPP.

Can the member can provide his perspective on CPP versus this particular pooled pension plan, and whether it would be worth the government's time and effort to work with the provinces to improve the CPP?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

Mr. Speaker, my colleague has asked a good question that is obviously at the root of the decision process that evolved the PRPP.

First, two years ago the government met with finance ministers across the country and tried to arrive at a solution for reviewing CPP. There was no unanimity. The finance ministers unanimously agreed that PRPP would provide a new and more flexible tool that would bring more Canadians into the net of those who would like to participate in such a program.

The hon. member asked about CPP versus PRPP. Clearly, when I look at CPP and some of the comments that have been made today and in previous debates about doubling CPP, the extra cost to employees and employers and the tax costs to employers make it untenable and tremendously expensive for an employer in a small or medium-sized business or someone who is self-employed to participate, whereas the PRPP truly gives the benefit of that flexibility and a new opportunity.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:05 p.m.

Conservative

Merv Tweed Conservative Brandon—Souris, MB

Mr. Speaker, I am pleased to stand and speak to Bill C-25.

I would think that all members of the House would see this as a benefit to all Canadians, particularly, as previously stated, the self-employed, small and medium-sized businesses and organizations that are probably too small to have their own plan but would like to offer another form of investment in the people they employ and an opportunity for people to grow within that company and stay with it based on the fact that they would have a plan at the end of the day that provides for their retirement.

As many are aware, our government understands the importance of a secure and dignified retirement for people who spent their entire lives building a better and more prosperous Canada and for their families themselves. This legislation would take Canada's retirement income system one step further by helping more Canadians realize their retirement goals.

A lot of work was put into developing this proposal. Canada's retirement system is strong but that does not mean it cannot be improved, that we cannot offer enhancements to pick up those individuals outside of the circle and offer them something better and an opportunity to invest for their retirement. This legislation addresses exactly that.

We all have memories of the crisis of 2008 and how it brought out concerns with regard to retirement. We all asked ourselves if our pension would be adequate, if we would be able to retire in the style we choose. I suspect upon reflection many people found they would not be able to. Things changed dramatically after 2008. If people were in the stock market or in RRSPs or in any type of investment, they took a hit. There is no question about it. The proposal we are putting forward would address that.

We did not do this blindly. We did it through co-operation and discussion with provinces and finance ministers across Canada, with people in our communities and, as the previous speaker mentioned, small business people. I was a small business person too. We always looked for opportunities to provide our employees with better security and better programs. Quite often we had to make the decision that we could not afford it.

This would address many of those issues. As I said, we did not do this blindly. We did it with a lot of consultation. We are trying to provide Canadians with an adequate standard of living upon retirement, and that is what everyone wants.

During the consultation period we found out that modest and middle income Canadians risked facing retirement with insufficient savings. Of particular concern was the declining participation in employer-sponsored RPPs. The proportion of working Canadians with such plans declined from 41% in 1991. Canadians are not taking full advantage of other retirement saving tools, like the RRSP.

I have been told that there is $600 billion in unused RRSP room. That is a clear indication that Canadians have priorities, and their families are their priorities. Sometimes we make those decisions and forget about the future. We need to always be aware of that and have that in our view.

With these findings, our government went to work on behalf of Canadians. We consulted, we met with provincial and territorial counterparts and held discussions with many businesses and we came to today's legislation.

In short, PRPPs are a new, innovative, privately administered, low cost and accessible pension option to help Canadians meet their retirement goals.

PRPPs are particularly important and significant for small and medium-sized businesses. It is quite often unaffordable for business owners to provide these types of benefits. The bill would give them that opportunity, because it would enable owners and employees alike to have access to a large-scale, low-cost private pension plan for the first time. We basically would piggyback on larger corporations. We would get a better buy-in and we would get a better return because of the pooled funds.

Professional administrators would be subject to a fiduciary standard of care to ensure that funds were invested in the best interests of the plan. That is obviously a given, but I think it needs to be said.

By pooling pension savings, PRPPs would offer Canadians greater purchasing power. Basically, we would be buying in bulk. We would be getting a bigger, better deal for less money. By achieving lower prices than would otherwise be available to Canadians, it would mean more money left in the pockets of those same Canadians when they retire.

The design of the plan would also be straightforward to allow for simple enrolment and management. People in small and medium-sized businesses, the self-employed, I suspect, and the employees themselves will like the simplified form.

Finally, they are intended to be largely harmonized from province to province, which further lowers administrative costs and makes the transferability a lot easier to deal with.

Overall, these design features would remove any of the traditional barriers that might have kept some employers from offering pension plans to their employees.

It is my belief that this would lead to a greater willingness for small and medium-sized businesses to offer PRPPs. That is crucial. It is crucial because, incredibly, more than 60% of Canadians do not have a workplace pension plan. That is a huge number. When the members opposite look at it and talk to their friends, they will see it would include a lot of the people who support them and work with them in their day-to-day lives, and it is important that we try to include them in the discussion.

With PRPPs, participation would be encouraged by automatic enrolment of employees into a PRPP where an employer offered one. The automatic enrolment would encourage regular savings by making participation the default choice of employees who do not actively make a decision to opt out.

I remember the best advice I ever received as a young person entering the workforce in a family business was from a financial advisor who told me to just take a little bit off my cheque every month as I would never miss it. Then, as I grew older and my needs changed and my income earnings changed, I could increase it. It is the best advice I have ever received and the best advice I have ever given my children or their friends.

Canada's finance ministers decided to proceed with the PRPP framework precisely because it was considered an effective and appropriate way to target the modest and middle-income individuals who may not be saving enough for retirement, particularly those who currently do not have access to an employer-sponsored pension plan. These PRPPs would strike the right balance.

I know that if the NDP members had their way they would double CPP benefits and increase payroll taxes on small and medium-sized businesses, but that is not the way this government operates. At a time when Canada's economic recovery is still fragile, imposing a job-killing tax on the creators of those very jobs would be simply irresponsible.

PRPPs would be an efficiently managed privately administered pension plan that would provide greater choice to employers and individuals and promote pension coverage and retirement saving.

Once the provinces put in place their PRPP legislation, the legislative and regulatory framework would be operational. This would allow administrators to develop and offer plans to Canadians and their employers. Working together with the provinces, I know and I am confident that we can get these important new retirement vehicles up and running for Canadians in a timely manner.

It is important to remember that PRPPs would not just stand by themselves. They would be part of a bigger picture, part of Canada's retirement income system. We must always remember that. This bill is designed to help the many who do not qualify or are unable to have a pension plan within the confines of where they work. I know the Minister of State for Finance has gone to great lengths to listen to Canadians and to hear what they asked for and what they need. I believe this bill responds to their needs in a very positive way.

I encourage all Canadians and all members of Parliament to support this legislation.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

June 7th, 2012 / 1:15 p.m.

NDP

Francine Raynault NDP Joliette, QC

Mr. Speaker, I thank my colleague for his speech.

Something similar was tried in Australia more than a decade ago, and the results were not encouraging. After a dozen or so years, people did not have more money. Their investments did not do better than the rate of inflation.

The members of this House know that the Canada pension plan has barely lost any ground, with barely a 1% drop in interest, while the stock market, in which the government would like Canadians to invest more of their pension and retirement savings, has declined by 11%. I would like to hear what he has to say about that.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:15 p.m.

Conservative

Merv Tweed Conservative Brandon—Souris, MB

Mr. Speaker, the fact that 60% of the Canadian working public does not have access to this type of plan is the very reason we are considering it.

We have spoken to provinces, employers and employees. This appears to be the best vehicle for them to move forward with. It would be tightly managed by professionals. I believe very firmly that this would be an ideal opportunity for employers and employees to work together on a pension for each other.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:15 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

Mr. Speaker, I would first like to say that we could pick any point in time to suit an argument on the returns of the stock market.

The whole point behind the PRPP is that it is over a lifetime, with the dollar cost averaging over 40 years. With a tax-free savings account, RRSPs and now this program, we would provide Canadian working families a great opportunity for their retirement future.

I wonder if the member could talk about the importance of fiscal and financial literacy for Canadians of all ages moving forward for their retirement.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:15 p.m.

Conservative

Merv Tweed Conservative Brandon—Souris, MB

Mr. Speaker, it is extremely important. When we are moving into a program that is new to a lot of people, the understanding of it is very important. The member for Edmonton—Leduc has put forward a bill regarding financial literacy, which is of utmost importance.

As I said earlier, as a young first-time employee, it was the experience and depth of a senior statesman who gave me the advice I needed. Trust was a big part of it, but I believe and think it is imperative that all Canadians understand what they are signing up for, what the benefits are and what the long-term benefits are for their families.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:15 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, we clearly do not have the same definition of financial security. This bill clearly indicates that the administrator administers all the plan assets, pays himself management fees, a margin, bonuses and that anything left over goes into the fund.

The plan member has no guarantee of a return. Even worse, the member cannot plan his retirement because he will have absolutely no idea of the amount accumulated. Can that be called a pension plan? It certainly cannot. Above all, there should not be closure on this bill, especially in light of the fact that Nortel could lose $7 billion that could be directed into its pension fund. And yet, the government is not doing anything. Why not?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:15 p.m.

Conservative

Merv Tweed Conservative Brandon—Souris, MB

Mr. Speaker, like anything in this world, we can look at it as the glass being half full or half empty. We on this side look at the world as the glass being half full and wonder how to continue to add to that glass.

The bottom line is that 60% of all working Canadians do not have any form of pension plan within their area of work. The bill is designed to address that. It is based on a collection of information from the owners of businesses, employees and professionals across the world. I wish I could give every member a guarantee in life, but that is not how it works. What we have to do is give them the best opportunity.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:20 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, it should come as no surprise that I disagree profoundly with my colleague from Brandon—Souris, as I disagree with his party on the policy direction they are taking. I even disagree with just about everything the Parliamentary Secretary to the Minister of Finance said. I think those guys are going down the wrong road and are doing the dirty work for corporate Canada once again.

Here are the origins of the bill. Thomas d'Aquino, when he was the head of the Business Council on National Issues, and then John Manley, when he became the president of the chief executive officers, or whatever they call themselves—the Grand High Poobahs of, really, the unelected Prime Minister of Canada, which is essentially what he is--declared that what was really holding back Canadian productivity was “legacy costs”. That is a nice way of saying those dirty pensions that our predecessors got into in the 1930s, 1940s, 1950s, 1960s and 1970s. That was back when we used to negotiate fair wages for working people, back when working people and their employers would sit down and put together a sensible benefit package with a real benefit plan for their retirement years. All of a sudden, the corporate world has declared that unaffordable and it does not like having the burden of legacy costs.

We can even look at what happened in 2008 with the economic downturn. As soon as the auto industry got into trouble, what did the executives of the auto industry say? It had nothing to do with the cars they were producing or their management skills or the way that they had dropped the ball and made products that nobody wanted to buy anymore. Right away they said that the reason they were not productive was because of the legacy costs. They said that it was the pension plans that were dragging them down. They said that something needed to be done about the pension plans so they trooped down here to their friends, the guys who they bought and paid for and put into power, and complained to them that they had to do something about these pensions.

Mr. Speaker, I forgot to say that I will be splitting my time with the member for Châteauguay—Saint-Constant.

The Conservatives put it in fine print so the world can see. They put in place this disingenuous bill with a title that actually uses the words “registered pension plan” in the title. This is another example of the creative writing class that takes place somewhere down in the bowels of the Conservative Party's black operations department. They develop these names that have nothing to do with the bill. In fact, they are 180 degrees opposite to the true intent.

There is nothing about this that is a pension plan. It does not bear any resemblance to a pension plan. It is a savings scheme that, frankly, is no different from what ordinary workers could do today if they were lucky enough to make enough to set money aside in an RRSP. They could put a little more money aside in an RRSP and have the same net effect as this, except that they would be gouged even further by the financial sector that also stands in the wings waiting to benefit from this huge shift of money that should normally be going into a pension vehicle such as a proper registered retirement pension plan or, the best retirement vehicle that we have, the Canada pension plan.

And you wonder, Mr. Speaker, why I have strongly held views on this issue?

I represent the riding of Winnipeg Centre and that, frankly, has been the home of two of the greatest champions of social justice that our country has ever known. In 1919, the Government of Canada wanted to send J.S. Woodsworth to prison for his role as a leader of the 1919 general strike. The good people of Winnipeg Centre sent him to Parliament instead where he became the founder and first leader of the CCF. He served there until 1942 when he died. Then the good people of Winnipeg Centre elected the person who came to be known as the father of the Canada pension plan, Stanley Knowles.

J.S. Woodsworth, while he was here, managed to wrestle old age security out of the Liberal government of the day. William Lyon Mackenzie King had a minority government. J.S. Woodsworth had two members, A.A. Heaps and J.S. Woodsworth were called the Ginger group. They were the Independent Labour Party, predating the CCF. They went to Mackenzie King and told him that they would support his government and prop it up if he would introduce old age security.

We have a letter on file at the NDP headquarters today that is signed by William Lyon Mackenzie King agreeing to that. It took him seven years to do it. It was 1926 by the time he actually fulfilled that promise. However, William Lyon Mackenzie King yielded to the pressure of the ginger group. The member of Parliament for Winnipeg Centre managed to negotiate some semblance of pension.

When Stanley Knowles was elected, he not only brought in the Canada pension plan, the second initiative was the indexing of the Canada pension plan. Now, at a 1% operating cost, the Canada pension plan with a small amount of contribution yields a guaranteed benefit to Canadians in the neighbourhood of $900 or $1,000 a month. That is a good return. That is in the best interests of Canadians.

I am worried that as the government puts in phony bills like this and phony diversions like this, it will siphon off attention to, contributions in and participation in vehicles that work, like the Canada pension plan. It is as if it is throttling down the emphasis on the Canada pension plan.

We, when we form government in 2015, intend to undertake a comprehensive overhaul of the Canada pension plan, which will be meaningful support in old age security for Canadians. It has been charted out and it is part of our platform. It will be the most effective investment vehicle ever. Even if the Canadian pension plan as we know it were doubled, as being proposed by the NDP, the total old age security coming from that would still be less than social security in the United States. Social security in the United States has a maximum benefit of about $30,000 a year. If we take the CPP as it is today, even adding on the old age security of under $7,000 a year, that still only comes up to about $19,000 a year. We are well behind other countries, even the United States, in our social security benefits for seniors.

It frustrates me how disingenuous the Conservatives are when they introduce a bill that purports to be a pension plan for ordinary Canadians. I just heard the member for Don Valley West saying that his employees could never have a pension plan if it were not for this. He said that he had worked for years and all his employees never had any benefits. Maybe if he had given them a raise in pay they would have been able to buy some old age security. Why did the member not put a pension plan in his company? That is what we used to do in the old days, we had corporate social responsibility. We had capitalists with a social conscience. That seems to be gone.

Capital has no conscience. If it were not for the NDP here to impose some conscience into that party, it would just be following loyally and faithfully behind the Business Council on National Issues, the Canadian Taxpayers Federation and all the other dummy outfits that undermine the basic needs of Canadians for their own selfish self-interest.

We can look at the handout this is to the financial sector. We can look at the dough they will make by managing all this dough again. It is appalling, frankly, how they gouge, and the percentages they take for moving money around. The best bargain is the Canada pension plan with an operating cost of less than 1%.

This bill diminishes and undermines the systems that work and would put in place a system that will not be effective and will be no better than issuing a piggy bank. The Conservatives might as well give every Canadian a piggy bank and say, “I know you have not had a raise for seven or eight years but here is a piggy bank. Put more money into it and you will have more money to spend when you retire.”

That is not creative. There are no financial geniuses over there. That is like pulling a sedated rabbit out of a tattered old top hat and trying to convince people it is magic. It is not magic.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:30 p.m.

Conservative

Robert Sopuck Conservative Dauphin—Swan River—Marquette, MB

Mr. Speaker, one does not know where to begin except to correct my hon. friend across the way.

The Parliamentary Secretary to the Minister of Finance is the female member from Saint Boniface, an MP we are all very proud of.

I would also remind the member of that great saying, “Socialism works until you run out of other people’s money to spend”. Many countries in Europe are finding out that other people simply do not have any money.

Given the member's evident disdain for corporations and the corporate world, when will the member be making the recommendation to all of his union friends and the unions he knows and purports to represent that they should divest all of their pension funds from the nasty corporations, especially the energy and financial corporations?

Will the member have the courage to recommend that kind of divesture?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:30 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I am very proud of the years that I have spent negotiating on behalf of ordinary working people as a trade unionist. We believe that fair wages and benefits benefit the whole community.

I was in the United States recently and saw a bumper sticker that read, “At the least the war on the middle class is going well”. That is about the size of it. There is a war on the middle-class. For some reason, the government is trying to lower our expectations so we will accept globalization unquestioningly, that we have to expect less and that there is no way we can afford a living wage, fair wages or to live as well as our parents did.

On this side of the House, we have dedicated our lives to elevating the standard of wages and working conditions for working people. That side of the House seems determined to undermine and diminish the wages and standard of living of Canadians. Why would anyone elect a government that would cut his or her wages? We had this debate yesterday on the Fair Wages and Hours of Labour Act. It seems it is one thing after another. It is this war on labour on the left.

In whose interest is it to undermine the retirement and social security of Canadians by pieces of paper like this that are not worthy of the consideration of the chamber? Legacy costs are not the answer.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:30 p.m.

NDP

Marjolaine Boutin-Sweet NDP Hochelaga, QC

Mr. Speaker, 74% of Canadians do not contribute to RRSPs, mainly because they cannot afford to.

In my hon. colleague's opinion, why do the Conservatives believe that people could afford this program more than an RRSP?

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:30 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I believe the figure is 64% of Canadians made no contributions to RRSPs. They do not have the money. They cannot afford it. This is another instrument that would encourage them to save more. It is like pushing the onus on individuals. I do not mind individuals standing up for themselves in their own best interests, but if they do not have the money to save currently, where will they find the money to contribute to this new savings scheme?

There is nothing that adds to the retirement security of ordinary Canadians in this bill. It is an illusion. As I say, it is not sorcery. It is bad magic. The government is trying to snow Canadians by putting the words “pension plan” in the title of a bill. It has nothing to do with a pension plan. It is a phony piece of work. Canadians should not fall for it. They deserve better.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:30 p.m.

Conservative

James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, I always enjoy listening to my friend across the way. I rarely agree with him but I do enjoy listening to him.

I want to get back to the bill itself and the pooled registered pension plan. He talked about labour. In fact, Mr. Phil Benson with Teamsters Canada made a presentation to the committee on this bill and he put forward some very practical suggestions in terms of dealing with it at the regulatory stage. I will Mr. Benson. He stated:

No single solution will resolve the retirement savings issue. I think the PRPP proposal will move the ball closer to the goal line. Improving savings, reducing risk, and reducing costs is a winning formula. We think our suggestions will make this an even better product.

Would the member opposite, who has a very strong labour background, respond to the endorsement by Mr. Phil Benson with Teamsters Canada of the pooled registered pension plan? This is a very large union in Canada that has endorsed our government's initiative with respect to providing retirement options for people, particularly the 60% of Canadians who do not currently have a retirement option.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:35 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, if we are trading quotes, I will read what this guy from the EES Financial Services, a mutual fund fee organization, said. He stated:

In general terms, the PRPP program is no different than an RRSP. Contributions generate tax deductions, enable tax-deferred growth, tax is payable on withdrawals and for the most part, will be invested in mutual funds – pooled investments that according to a 2006 report...are subject to far higher fees in Canada than in any other country. It’s no wonder the investment and insurance industries are applauding the introduction of PRPPs.

It is like handing over a gift to Bay Street. It is like giving it a half a billion dollars worth of management fees per year to manage the investment of this new mutual fund. All this is is a glorified mutual fund. If people did not have enough money to buy an RRSP before, they probably will not have enough money to participate in this PRPP baloney.

Third ReadingPooled Registered Pension Plans ActGovernment Orders

1:35 p.m.

NDP

Sylvain Chicoine NDP Châteauguay—Saint-Constant, QC

Mr. Speaker, I am pleased to speak today to Bill C-25, the Pooled Registered Pension Plans Act. I would like to say from the outset that like my colleagues from the NDP and from all the opposition parties, I am very disappointed in this bill, because contrary to what the title suggests, this can hardly be called a pooled pension plan.

Before getting into the details of the bill, I would like to put into context the situation with pension plans and the Canadians who are depending on them. According to the Conference Board of Canada, 1.6 million seniors in Canada are living below the poverty line, and this bill will do nothing to help them. What is more, according to the Canadian Labour Congress, 12 million Canadians lack a workplace pension plan. Unfortunately, we do not believe that this bill will do much to help those 12 million Canadians gain access to a pension plan either.

By OECD standards, the CPP and QPP systems are relatively inadequate. Other similar countries have guarantees and much more generous public pension plans than ours. In the United States, maximum social security benefits are about $30,000 a year. Here in Canada they are about $12,000 a year and, if we add the $7,000 a year from old age security for the less fortunate, that is still far from what is being done in the United States.

According to the Canadian Centre for Policy Alternatives, most Canadian workers do not have RRSPs. Over the past few years, only roughly 25% of Canadians have contributed to their RRSP, which is far from what it should be. That suggests that, unfortunately, Canadians do not have the means to contribute.

In fact, I am disappointed because this bill will simply create a new type of savings plan enabling the funds from plan members' accounts to be pooled in order to reduce the costs associated with the management of investments and of the plan itself. The program is called a pooled registered pension plan, but it would be more appropriate to call it a savings plan, because this bill cannot guarantee that it will provide any retirement income.

This bill is designed for self-employed individuals and employees of small and medium-sized businesses, which are often unable to manage a private sector pension plan. The system created by the passage of this legislation would be a defined contribution plan. Employees would contribute a portion of their earnings to a retirement fund, and that money would be invested in stocks, bonds, mutual funds, and so on. Some companies might match their employees' contributions, up to a certain percentage.

The account grows through contributions and investment income until retirement. However, with this kind of defined contribution plan, there can be no guarantee about the amount of money that will be available upon retirement. Thus, it is the individual, the employee, who assumes all of the risks associated with the investments. With this kind of system, the amount of money available upon retirement depends on market fluctuations, and markets have not exactly been stable over the past 10 years. I invested in RRSPs and I have less money now than when I invested 10 years ago. These investments are not reliable; they are risky.

Defined contribution plans do not provide the same level of income security as defined benefit plans, such as the CPP and the QPP, which guarantee a certain payout upon retirement. Pooled registered pension plans would be managed by regulated financial institutions, such as banks, insurance companies and investment companies. The latest numbers on CPP investment returns show that the plan has lost hardly any ground over the past few years—less than 1%—while the stock markets, in which the government wants Canadians to invest their savings through pooled registered pension plans, have declined by about 11%.

Pooled registered pension plans will not provide workers with greater retirement income security because they will simply encourage families to gamble their retirement savings on the stock market, which often goes down instead of up.

As I said, anyone who has ever watched his RRSP take a dive knows how risky it is to invest his savings in the stock market. The government is so out of touch with reality that it is encouraging families to double down on what has turned out to be a system that does not work very well. With such an unstable economy, families do not need to take on any more risk. They need the stability of the Canada pension plan and the Quebec pension plan. Many economists and provincial leaders have said as much over the past few years, but the government has turned its back on families and refused to consider this solution.

Bill C-25 does not cap administrative fees or costs and assumes that competition will keep costs low. Once again, the government is dreaming in colour because it is relying on the invisible hand of the market and hoping that that alone will keep administrative costs and fees as low as possible. But as the Australian experience proves, that hope is in vain. More than 10 years ago, Australia created a similar plan. The results were disappointing, to say the least. The plan had been in existence for 12 years when the Australian government-ordered review of it showed that even though people were saving money through mandatory contributions, the returns on their investments were no greater than inflation. In many years, returns were lower than inflation.

The report attributed these disappointing results to the very high costs, despite the fact that it was originally thought that competition among companies would lead to lower costs. That was unfortunately not the case. However, the Conservatives do not want to learn from the Australians' experience, which was essentially a failure. With this bill, the government would rather hide behind its ideological ideas and make decisions without truly examining the issue.

In six years, the government has unfortunately not done much to help provide security for Canadian retirees. This bill appears to have been hastily drafted in response to pressure from union groups, seniors' groups and political parties, particularly the NDP, which, after the last election campaign, proposed an increase in Canada pension plan and Quebec pension plan benefits.

Bill C-25 is a half measure, when what we truly need is some real, concrete action. Canadians deserve and want more than what the government is proposing. Once again, the Prime Minister is putting the interests of Bay Street giants and insurance companies ahead of the interests of Canadians. It is time for the government to take real action to increase the number of Canadians who have access to retirement security and to lower the current number of 12 million Canadians who do not have access to these plans. Bill C-25 will not help achieve that objective.

Canadians do not need new private, voluntary savings plans. They really need concrete measures to ensure that they will be able to retire with dignity.

The NDP is proposing doubling the benefits provided by the Canada pension plan and the Quebec pension plan to a maximum of close to $2,000 a month. The NDP wants to work with the provinces to make it easier for workers and employers who want to make voluntary contributions to individual public pension accounts. The NDP also wants to amend federal bankruptcy legislation to move pensioners and long-term disability recipients to the front of the line of creditors when their employers file for bankruptcy protection. The NDP also wants to increase the annual guaranteed income supplement in order to lift every senior in Canada out of poverty immediately.

The NDP understands that Canadians want more than what the government is proposing with the pooled registered pension plan. The NDP will obviously not support this bill because it merely offers a new type of savings plan and does not even come close to solving the problem of making pension plans accessible.

In closing, the NDP urges the government to abandon Bill C-25 at third reading and to come up with a real plan that will help the 12 million Canadians who do not have a pension plan and the 16 million seniors who are living below the poverty line.