Debates of Dec. 9th, 2013

Question No. 93

[Hoang Mai, NDP, Brossard—La Prairie, QC]

With regard to funding allocated to the constituency of Brossard—La Prairie from fiscal year 2002-2003 to the fiscal year ending in 2013: (a) what was the total amount of government funding, broken down by department or agency; and (b) what initiatives were funded and, for each, what was (i) the amount awarded, (ii) the date the funding was awarded?

(Return tabled)

Question No. 94

[Jean-François Larose, NDP, Repentigny, QC]

With regard to transfer payments to non-profit organizations (excluding hospitals and universities) and the government’s operational spending (O&M) to manage these transfers: (a) what have been the government’s total expenditures in this area since fiscal year 2006-2007, broken down by fiscal year; (b) what has been the break-down of the government’s expenditures since fiscal year 2006-2007 on internal government operations, on grants, and on contributions, broken down by fiscal year; (c) what has been the breakdown of expenditures by department and agency, broken down by program area, by fiscal year and by nature of expenditure (for example, grants, contributions, O&M); (d) what fiscal changes (for example, legislative changes to the Income Tax Act) have been put into place since 2006-2007 that directly impact the not-for-profit sector and what has been the financial result of each of these changes (for example, amount of costs or savings to the Treasury by fiscal year since the implementation of each change); (e) what cuts to transfer payments were made during each round of the four-year cycle of Strategic Reviews and as a result of the Strategic and Operational Review (also known as Deficit Reduction Action Plan), broken down by i) department and agency, ii) program activity, iii) nature of expenditure (for example, G&C, Capital, O&M); (f) how much has the government spent on the new social finance approach and what are its projected spending plans for the next few years, including a breakdown of this spending on special pilot projects discussed in HRSDC’s 2013-2014 Report on Plans and Priorities—i.e., to test social partnership and social finance approaches in the area of literacy, youth and Aboriginal labour market programming, as well as through the Foreign Credential Recognition Loans Pilot; (g) which not-for-profit organizations and private firms have been chosen to test the new approach and what is the break-down of government expenditures to date and spending plans on each project, broken down by not-for-profit organization and by private firm?

(Return tabled)

Question No. 96

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

With regard to Fisheries and Oceans Canada’s capital assets: (a) what are these assets and their current use, broken down by (i) province, (ii) municipality, (iii) complete address; (b) which ones were sold or transferred by the department over the past five years, broken down by (i) year, (ii) province, (iii) municipality, (iv) complete address; (c) to whom and for how much were the assets referred to in (b) sold or transferred; and (d) to whom is the department planning to sell or transfer in the next five years, broken down by (i) year, (ii) province, (iii) municipality, (iv) complete address?

(Return tabled)

Question No. 97

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

With regard to the Canada Summer Jobs program: (a) what were the actual expenditures between 2001 and today, broken down by (i) year, (ii) constituency, (iii) province, (iv) territory; (b) how many recipients have there been between 2001 and today, broken down by (i) year, (ii) constituency, (iii) territory; and (c) how many summer jobs have been generated between 2001 and today, broken down by (i) year, (ii) constituency, (iii) province, (iv) territory?

(Return tabled)

Question No. 99

[Jack Harris, NDP, St. John's East, NL]

With regard to medical releases from the Canadian Forces, for the past five years, for each year: (a) what is the total number of medical releases; (b) what was the number of medical releases by province; and (c) in terms of year of service when a member is given a medical release, what was the number of medical releases by each year of service from one to forty years of service?

(Return tabled)

Questions Passed as Orders for Returns

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I ask that the remaining questions be allowed to stand.

[The Speaker, Conservative, Andrew Scheer]

Is that agreed?

[Some hon. members]

Agreed

The House resumed consideration of the motion.

Opposition Motion—Canada and Quebec Pension Plans

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, it is my pleasure to continue to speak on a motion that calls for an incremental increase and an improvement to our CPP. Despite the arguments we heard earlier from across the aisle, we know this is common sense, backed by sound economic arguments.

I want to make clear today what we are proposing. We are proposing to gradually phase in an increase in CPP and QPP benefits, not the shock and awe that my friends over the aisle would like us to believe. It is also a position that is supported by economists, bankers, actuaries and all kinds of people.

We think the GIS needs to lift low-income seniors out of poverty.

We absolutely believe the age of eligibility needs to go back to 65. It is my understanding that we are the only party to have that position, which is a good position. It does not mean people have to retire. Rather it means that if they can no longer work beyond age 65, they will have that social assurance.

We need to tighten up legislation to protect the pensions of workers when a company is facing bankruptcy, leaving the country, being sold or undergoing corporate restructuring.

I do not know about my colleagues across the way, but I deal with this last point constantly in my riding. It comes up over and over again when people are so worried about the future of their pensions.

We also hear a lot from the other side about how the NDP does not know what it is talking about when it comes to the economy. The NDP knows how the economy works. We have members of Parliament sitting on this side who have managed portfolios, who have dealt with money in the billions of dollars in other parts of their lives and who are experienced parliamentarians.

I am beginning to wonder about the economic argument or ability of my colleagues across the aisle. I will quote some statistics released today. The government across the way is not prone to listening to experts. Nor is it prone to listening to sound research or making decisions based on that research.

Today, Statistics Canada stated that the CPP grew at a rate of 13.7%. Do people have pension funds or retirement savings that they are handling on their own that can give them that kind of return? I would say categorically no. Right now when people put their money into the bank, they are lucky to get 1%.

During that same time period, individual registered savings plans grew by 8%. That is a difference of 5.7%.

We on this side of the House understand economies of scale. When we have larger amounts of money to invest, we benefit from those economies of scale. We understand that. We want to know what the barrier is that is preventing my colleagues who sit across the way from understanding those very simple numbers.

The Globe and Mail has also noted that when we look at a long-term trend, and we all like trends, especially ones that go in the right direction, we have a good news story. Our good news story is our Canada pension plan and its viability, which has been recognized worldwide by the OECD and others. The Canada Pension Plan Investment Board, not the NDP, has provided remarkable returns in virtually every year except the one year after the economic downturn of 2008. Over the last 10 years—

[The Speaker, Conservative, Andrew Scheer]

Order, please. I have been trying to get the hon. member's attention as she is, unfortunately, out of time. We will move on to questions and comments.

The hon. Minister of State for Western Economic Diversification.

[Michelle Rempel, Conservative, Minister of State (Western Economic Diversification)]

Mr. Speaker, my colleague opposite made the implication that she knew the economy and that her speech was based on sound research. Therefore, as such, I would like to ask her the following.

What mortality assumptions as well as the size of the worker base were used to calculate the cost of the program included in the motion? What were the other actuarial assumptions used to show the viability of the plan? Does the motion include the assumption of a balanced budget? Could the member explain the difference between how CPP is funded versus the OAS?

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, we should remember it was the actuary of the Canada pension plan who said that this plan was viable, that the plan had great returns and that it was one of the areas we should be moving toward improving.

The actuaries have that data and they study and analyze it. They look at long-term trends, mortality rates and all of those things. Whether it is the Canadian Imperial Bank of Commerce, pension experts, or university researchers, they are looking at the data and those long-term contributions.

I absolutely know how the OAS is very different from CPP. I believe both need to be increased. However, the CPP is what we are here to debate today and it can hold an incremental increase.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, earlier today on the motion, the member for Toronto—Danforth stood in his place and he seemed to be a little upset with the fact that he was being challenged on what the NDP position was with regard to the CPP. He said that it had no plans on doubling the CPP, but it may be an option.

I have a quote from the member for Rimouski-Neigette—Témiscouata—Les Basques, who stated that, “The NDP plan is quite simple. It aims to double Canada pension plan benefits with minimal increases to the contributions”.

Here is another quote from the election platform of the NDP back in 2011, which states, “work with the provinces to double your public pensions”.

Is it the platform that is wrong, or has the NDP changed its platform, or is the member for Toronto—Danforth wrong?

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, my colleague's question is very good and I appreciate the opportunity to answer it.

We have goals, and because of the cost of living and all the other expenses that seniors have to bear, the CPP will have to go up. The proposal we are putting forward and what we are talking about are incremental changes. We are not talking about doubling it overnight. We are saying that the plan can carry incremental changes and we should be putting those in because it is the right thing to do. If CPP should double in 5, 10 or 15 years in the future, maybe the incremental changes could take it there.

When we look at CPP and the lack of increases to those payments in real terms, we have to listen to the researchers and economists when they tell us that Canadians who retire experience a huge drop in income and a growing number of seniors are living in poverty.

This is a sure way, the cheapest way and the safest way to reduce poverty and improve life for our seniors.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, every time over the last eight years when the New Democrats have talked about the pension crisis, all the Conservatives start to laugh.

When I go home, I talk to people who are 68 and 69 who cannot afford their house anymore, and I have seen guys going back to work underground in the mines at 70. Why does my hon. colleague think every Conservative over there thinks the idea of people being able to retire in dignity is something to be laughed at?

First, the Conservatives raise the OAS to 67. When we talk about pension reform, they think it is some kind of joke. I would ask my hon. colleague if she thinks perhaps they are not living in the real world where ordinary Canadians live.

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, I want to thank my colleague, a very hard-working member of Parliament and a very passionate speaker in the House.

He asks a very good question. I have no answer except that I am terribly perplexed. I hear these concerns in my riding, and surely the Conservatives must hear them in theirs, almost every weekend when I work at home. I do not think I have had a weekend when a senior has not talked to me about the cost of living and how hard it is to heat, eat, et cetera.

[Jim Hillyer, Conservative, Lethbridge, AB]

Mr. Speaker, I am pleased to have this opportunity to address the motion before us today.

The hon. members of the House may differ on solutions, but I am sure we agree that we need to look, continuously, for ways to improve Canada's retirement income system. That does not just mean only looking at the government income system, but for ways, in general, that Canadians can have a comfortable and dignified retirement.

Canada's seniors deserve our gratitude and support. Our government recognizes they have worked hard to build a better country for future generations. Let me assure the hon. members that Canada's retirement system is one that has served Canadians well. Indeed, we have one of the strongest in the world.

Canada's retirement income system has been recognized by expert groups, like the OECD, as a model that succeeds in reducing poverty among Canadian seniors and provided high levels of income replacement to retired Canadians.

Taken together, our system is based on a balanced mix of public and private responsibility, as well as compulsory and voluntary vehicles that provide a basic minimum benefit for Canadians, ensure a basic level of earnings replacement for working Canadians and offer additional opportunities for voluntary retirement saving.

Our system both supports and draws upon the strength of our sound financial sector.

In fact, Canada's financial sector remains strong. The World Economic Forum has ranked our banking system as the soundest in the world for the sixth year in a row. In addition, Canada is rightfully recognized for the responsible management of our economic and financial sectors. It is therefore not surprising that Canada continues to have the highest credit ratings, with continued upside forecasts, according to all the main rating agencies. Canada is the only G7 country with that status. We are coming to grips with the debt and we are on track to balance the budget in 2015.

While the NDP and the Liberals continue to put forward dangerous spending plans, our government is reducing expenses and making the tough economic decisions that will contribute to Canada's long-term prosperity and economic growth. Even more importantly, our pension scheme is also one of our economic objectives for jobs and growth.

The success of this model rests on three solid pillars. The first comprises of old age security and guaranteed income supplement program which provide a basic minimum income for seniors. The second pillar is the Canada pension plan and the Quebec pension plan. The third pillar provides tax-assisted private savings opportunities to help and encourage Canadians to accumulate additional savings for retirement.

A couple of weeks ago I received a letter from a constituent who had just turned 65. She was unhappy about the state of retirement. Her request was not that we increase pension fees and government pension plans. She knew she could not turn back the clock, but said that if she could, she would have governments encourage people to take care of more of their retirement through private opportunities and would encourage us to encourage young people today to do that.

In the rest of my time today, I would like to concentrate on the strengths of the CPP and illustrate why the NDP plan to expand the CPP is just not in the best interests of Canadian workers or employers.

Let me begin with a look at our current situation. The CPP is a mandatory public defined benefit pension plan and provides a basic level of earnings replacement for all Canadian workers. It provides a defined benefit in retirement based on an individual's career earnings as well as ancillary benefits like survivor benefits. They are financed by employer and employee contributions, the contribution rate being 9.9% of earnings shared equally between employees and employers.

Operating at arm's-length from government, the Canada Pension Plan Investment Board is responsible for prudently investing CPP contributions to serve the best interests of CPP contributors and beneficiaries.

The CPPIB is one of world's largest pension funds. On December 31, 2012, its net assets were $172.6 billion. With prudent management of the fund for the benefit of current and future members, the CPPIB invests around the world. Indeed, its mandate is to invest in the best interests of contributors and beneficiaries.

That is why it is important for the CPPIB to be diversified in its exposure to risk. This includes greater diversification worldwide, ensuring that the revenue from overseas investments comes back to Canada.

Our government is committed to the healthy management and sustainability of the Canada pension plan and to strengthen it as much as possible. For example, at the moment, only Canadians can sit on the CPPIB's 12-member board of directors. At this stage in its development, the board of directors would benefit from the contribution of foreign talent.

That is why economic action plan 2013 announced that our government would consult with provinces on permitting a limited number of qualified persons who are not resident in Canada to serve on the board of directors of the CPPIB. Permitting a limited number of qualified non-residents to sit on the board of directors would enable the board to provide the most effective oversight of the CPPIB's activities in the context of a rapidly changing global economy.

This makes sense when considering how important it is that the CPP be diversified in terms of risk exposure and not be exclusively localized to the Canadian economy. This is especially prudent in our current expansion into trade throughout the world.

Let me now turn to the ongoing issue of expanding the CPP to ensure its future sustainability.

To begin, any expansion would require the support of two-thirds of the provinces representing two-thirds of the Canadian population, as well as the federal government. Two-thirds of the provinces plus two-thirds of the Canadian population and the federal government all have to agree on the expansion.

At the meetings of the federal, provincial, and territorial finance ministers in December 2010, 2011, and again in 2012, there was no such agreement on a potential expansion. We could talk about it and we could pass a motion on it, but we would not be able to do it anyway if we do not get that support.

Indeed, a number of provinces expressed concerns about the prospective economic impact of higher payroll taxes on workers and their employers at a time when the global economy remains uncertain. Our government shares the concerns of small businesses, employees, and certain provinces over increasing costs during a fragile global recovery.

The decision as to whether to expand the CPP must be made with Canada's economic situation and the best interests of Canadian workers and employers kept in mind. The motion that is being proposed by the hon. member for Victoria does not meet this threshold. Indeed, despite the fact that Canada's economic recovery remains fragile, the NDP continues to call for a radical plan to increase payroll tax, which would stunt our economic growth and kill up to 70,000 jobs. Clearly, now is not the time for such an expansion to the CPP. To be frank, this plan would be too risky.

However, if members do not believe me, we can listen to advice from those who would be directly affected by the CPP expansion.

Dan Kelly, president of the Canadian Federation of Independent Business, puts forth the following, which the NDP might find interesting:

CFIB's research found that earlier proposals to increase CPP/QPP premiums would kill between 700,000 and 1.2 million person years of employment. ... Small firms believe that the economy cannot manage a significant increase in payroll taxes.

It does not make sense to want to add to the tax burden of employers and employees. It seems clear that we need to do more to properly study the impact of a CPP expansion and determine if that would be appropriate, considering the repercussions this would have on families, businesses and communities.

I would remind the hon. member that the idea of a CPP expansion is not a new one. However, not everyone agrees on this idea.

Let me make it clear again that consensus is critical before moving forward with CPP expansion. While analysis is important, expansion at this time does not have agreement from the majority of provinces. Allow me to provide hon. members with what provinces from across the country are saying on the issue of increasing CPP contribution rates at this time.

Nova Scotia Premier Stephen McNeil has said:

We have some issues about what that will mean to small business owners in this province, and what is the impact on low-income Nova Scotians and Canadians.

Saskatchewan Premier Brad Wall noted that the CPP expansion would not be something they would support at this time, saying, “We're 'No for now'. ... Now's not the time for contribution changes or increases”.

There is more. The British Columbia finance department spokesperson, Jamie Edwardson, said: “B.C. believes pension reforms should not be undertaken before the economy has recovered from the impacts of the recent recession”.

Our government shares these concerns. We believe that before new spending initiatives are contemplated, the provincial, territorial, and federal governments should get their respective fiscal situations in order. Rather than supporting an initiative that does not have the necessary support to proceed, the NDP should support the PRPPs, something all provinces have committed to implement.

While the NDP has been focusing on expanding the CPP, it may not have noticed that an estimated 60% of Canadians do not have access to a workplace pension plan. This is precisely why Canada's finance ministers decided to prioritize the PRPP framework over other options, such as expanding the CPP. It was because it was considered the most effective and targeted way to address the lack of retirement savings among modest- and middle-income individuals, who make up the vast majority of the population of the country.

PRPPs will significantly help small and medium-sized businesses and their employees, who until now have not had access to a large-scale, low-cost private pension option. By pooling pension savings, these new plans will be low cost, as the administration costs will be spread over a large group of people.

Despite the consensus among provincial finance ministers, the NDP did not support these private retirement pension plans. Despite what it wants Canadians to believe, it clearly does not support actual measures that will strengthen Canada's retirement income system. Indeed, when given the chance to support PRPPs, New Democrats voted against our government's legislation, the very legislation that established the federal framework for PRPPs. Rather than support actual reform, they are content to advance proposals that pose risks to Canadians and to Canada's economic recovery.

As Laura Jones of the Canadian Federation of Independent Business points out:

A mandatory CPP increase...is a bad idea. An increase in the CPP tax takes more money out of employees' and employers' pockets. Where will the money come from? Employees may be tempted to lower contributions to their RRSPs, or reduce their mortgage payments. ... Worse still, small businesses report that a mandatory CPP increase would force many to lower wages and even reduce their workforce.

That is the ultimate problem, not just with this suggestion but with a lot of the economic suggestions from the NDP. It fails to take into account that all money has to come from somewhere. We would like to promise everyone a loaf of bread, but if the bakers are standing in line for their free loaf, we might have some empty shelves.

At the end of the day, we have to find a way to pay for all these things, and right now we believe that the more money in Canadians' pockets, the better. More money in employees' pockets and more money in employers' pockets ultimately will not just help the economy today, but will help the economy in the future, including our future retirement.

Clearly, Canadian families cannot afford a drastic expansion of CPP, which would cost them even more. They cannot afford that, nor can small business owners, who could be faced with increased payroll taxes.

As a prudent and responsible government, we share the concerns of small business owners and employees who simply cannot afford such a proposal.

Our government has gone to great lengths to ensure that Canada is in an enviable fiscal position. However, as we have said repeatedly, we are not out of the woods yet. Global demand has softened, and the prices of many Canadian exports, particularly resources, are down. Furthermore, the sovereign debt crisis in the euro area continues to weigh on consumer and business confidence, and south of the border, a slow recovery poses a significant threat to the Canadian economy.

While gains in jobs are being made, they are modest, and there are still too many Canadians who are unemployed. That is why our government will remain squarely focused on job creation and economic growth. That will remain our priority.

We all want a stronger retirement system. However, we must not make changes that could have detrimental effects on our fragile economy today and thereby a devastating impact on today's retirement system and the retirement system of the future. There is no retirement plan if there is no job.

Our economic action plan is working. The unemployment level is at the lowest level since December 2008, and just last week it was announced that 21,600 net new jobs were created in the month of November. That is well over a million new jobs since the lowest level of the recession in December 2008. How are we doing this? It is by keeping taxes low and implementing positive job creating measures.

An expansion of the CPP would increase payroll taxes, reduce wages, and kill jobs. In a recent survey by the Canadian Federation of Independent Business, 65% of businesses said that they would freeze or cut salaries if CPP were increased, 48% said they would reduce investments in their businesses, and 42% said they would decrease the number of employees. These are important and concerning numbers.

Even for places in my own riding, a modest increase in CPP would result in more money being taken out of the pockets of employees and would force employers to cut jobs, hours, and wages.

Instead, our government has a prudent and responsible plan. We will not proceed without thinking about the possible serious economic impact of such an expansion.

We will continue to try to identify all the factors that could help us better understand the possibilities and risks associated with the CPP expansion. The Minister of Finance will discuss this with his provincial and territorial counterparts at next weeks' meeting.

This is a complex issue that will have real consequences for Canadians. We need to fully understand the economic framework in which such an expansion would take place.

The Canada pension plan is sustainable as it is at its current contribution rate, and while the NDP continues proposing its radical economic schemes, our focus must and will continue to be sustainability and long-term manageability of Canadians' retirement system, including jobs today.

Simply put, with the economic recovery still fragile, we do not believe that now is the time to increase costs on workers and employers. To do so would benefit no one.

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I find it disturbing that my colleague from Lethbridge would label a plan that we have proposed as radical when it is that of the former chief actuary of the Canada pension plan we are proposing and it is that of many provinces. As an example, Prince Edward Island's Minister of Finance has one variation on the theme, and the like.

The member said, quoting CFIB research, that small firms believe they cannot afford an increase in payroll taxes, but this is not a payroll tax, according to every economist I have consulted. That is a myth. It is a contribution like any other part of the employee compensation package. Pension contributions are part of that, and employers are essentially paying into an insurance plan.

If the hon. member says we cannot afford this now, could he please inform the House when he believes we can? What is the exact number he is waiting for? What is the GDP per cent growth he thinks is required?

[Jim Hillyer, Conservative, Lethbridge, AB]

Mr. Speaker, throughout my speech, I talked about the fact that now is not the time. I never said that there is going to be a time when we want to radically increase Canada pension plan contributions.

It is not just a matter of GDP. It is a matter of the economic climate of the country and of the world. If at some future point future governments and future populations feel that it is time to start reducing people's take-home pay, because they feel that it would be a good investment, and they want it done through the government instead of through their own private plans, that will be up to them. However, right now, we are focused on today's economy, and we will continue to be.