Mr. Speaker , I am pleased to rise after my colleague from Victoria, whom I would like to acknowledge and thank today for introducing a motion on a very important subject.
This motion is extremely important because it is being widely discussed, but rarely in the House. Since being elected in 2011, this government has implemented a number of initiatives—the TFSA was created before 2011—as well as private registered pension plans. However, the pension solutions proposed by the government are always individual solutions, much like RRSPs.
In contrast, we are now facing a collective problem. Some people save the full amount allowed for TFSAs or maximize RRSP contributions. Generally, it can be assumed that they are interested in building some security for retirement in their old age. They also have the means to do so, and have been more financially active in their lives.
However, it is much more difficult for the middle class and people who are less fortunate to make long-term and retirement plans. Indeed, they often have day-to-day concerns that force them to deal with their reality today before they can think about retirement. It is clear to me, to my colleague and to this side of the House that the Canada pension plan is the best vehicle to provide security in retirement. We can also include other government initiatives, such as old age security or the guaranteed income supplement, but the Canada pension plan was established more than 40—almost 50—years ago, and has proven itself. It is a portable system with extremely low administrative costs.
If someone has a pension plan in a certain company and then changes companies, the plan does not follow, unless that person goes through a whole bureaucratic process to allow for that. However, the Canada pension plan, and of course its counterpart, the Quebec pension plan, are portable and safe. In 2012, the Department of Finance itself specified in its report—and this was actually confirmed by the chief actuary of the Canada pension plan—that the system is safe for 75 years due to adequate contribution rates, and will even perform well in a future environment with greater demographic pressures. This is expected to happen over the next 15 or 20 years.
The plan is stable. We have an excellent plan, so why not make it better, and not just for people likely to fall below the poverty line when they retire? I know that we have old age security and the guaranteed income supplement to cover the bare minimum and help people who really need income after they retire.
The Canada pension plan can give them the means to be more comfortable in retirement. Of course, these people are encouraged to save up for retirement on their own, but in many cases, that is not possible or desirable for them. Right now, not even 40% of Canadians have additional retirement savings through their employer or independently.
It is extremely important to look at the various options. With all due respect to my colleague from Markham—Unionville, the motion does not mention specific accounting aspects. It does not mention contribution levels or benefit levels because we want the House to agree on the principle that the Canada pension plan—and the Quebec pension plan, we hope—should be able to accommodate the growing need for a secure retirement.
There are other elements in addition to contributions. We can also talk about the existing contribution limit. Contributions are withheld from earnings ranging from $3,500 to about $51,000. In the United States, contributions are withheld from income up to $113,000 U.S. We should think about where income comes from. We know that it will take income or at least contributions or parameters like these to cover higher benefits in the future.
When financial planners recommend adequate retirement income, the say that between 60% and 80% of average income earned during a person's working life should be enough to cover the cost of retirement.
Right now, the Canada pension plan covers about 25%. Some other models and proposals suggest increasing benefits to cover 35%.
We know that the Canada pension plan will not cover 60%, 70% or 80% of a person's working income, but if we can increase it by 10%, that alone would make a big difference. Once again, it would make a big difference for all Canadians, not just the poorest and those who end up struggling once they retire, but also for the middle class and even the upper middle class.
In that sense, it is incredibly important to debate this issue now. There have been meetings of finance ministers. Even before the 2011 election, I followed the meetings that took place in 2009 and 2010, which dealt with critical and fundamental issues. I believe that at the December 2010 meeting, almost all the provinces and territories agreed to expand the Canada pension plan. Since I know people who were involved in the process, I know that at the last minute, the federal government intervened to convince certain provinces to withdraw from the plan. In the end, the government proposed its registered pension plans for companies.
These solutions may be adequate in the short term and under very specific circumstances. However, what we are currently trying to do is to provide the broadest possible coverage and ensure that the Canada pension plan is as useful as possible to as many people as possible.
I have heard the arguments coming from the House and organizations on the economic aspect. People are saying that this is not the right time. The Minister of Finance has said this repeatedly. He is saying that expanding the CPP will reduce growth. The Canadian Federation of Independent Business, among others, has expressed its concerns and reservations about the potential increase in premiums, which could lead to an increase in benefits.
This assessment is always done looking at only one side of the equation. People are always talking about the impact an increase in premiums would have on employers and employees. However, they do not consider the impact of being able to put more money into the pockets of people who will often invest directly in the economy.
As a general rule, retirees are no longer saving for their retirement. Those who had the opportunity to buy a home have already paid for it in full. The government would therefore be providing additional benefits that would, once again, often help the middle and lower classes. Overall, people will spend that money, which will boost the economy. The increase in premiums would not jeopardize small and medium-sized businesses and the business world by taking money away from them. On the contrary, it would result in more investments in the economy. This is one way to more effectively oil the economic machine.
As a result, I did not hesitate for a moment in supporting the motion by my colleague from Victoria, because we need to talk about this motion. It needs solid support in the House.
Since this discussion started, I have seen some positive signs from the Conservative Party and the Liberal Party. I hope they will be able to see for themselves the benefits, not only for Canada but for all savers and ultimately our retirees, of reaching unanimous agreement on this subject.
That will send a message not only to the Canadian government, but also to all the provinces and to their finance ministers who will be meeting on this issue, that we have to find a solution.
The federal government cannot make the decision alone. It needs the consent of many of the provinces and a large part of the population. If the House can send that clear and unambiguous message to the provinces and the federal government, they will be much more likely to reach an agreement that, in the long term, will benefit all Canadians and all Quebeckers, assuming that Quebec would do likewise with the Quebec pension plan.
Depending on the principles used, this would also be an inexpensive way to stabilize the economy. As my colleague mentioned, he has several options on the table. We need an agreement on what direction to take. Then we can leave it up to the provinces and the federal government to determine the best way to carry this out. We hope to be involved in that process.