Mr. Speaker, I am very pleased to participate in the debate today. I will be sharing my time with the member for Gatineau.
I would like to thank my NDP colleague from Victoria for submitting this motion and his tremendous work on the issue of pensions, which affect so many Canadians. For the benefit of those participating in the debate and for Canadians watching the debate, I will read the motion so that it is clear what we are discussing.
The motion reads as follows:
That the House call on the government to commit to supporting an immediate phase-in of increases to basic public pension benefits under the Canada and Quebec Pension Plans at the upcoming meeting of federal, provincial and territorial finance ministers.
The meeting is to take place this month at Meech Lake.
The motion does not specify exactly what form these increases would take or the rate of increase, but it does say that the ministers should take the opportunity to address this issue without delay at the meeting at Meech Lake.
That is because, as many are now recognizing, Canada is facing a retirement security crisis. Nearly a third of Canadians face a drop of more than 20% in their standard of living by the time they face retirement. I see this frequently in my riding of Parkdale—High Park. Constituents come to my office and say they had no idea how financially strapped they would be when they retired.
They kind of expected there would be enough through the Canada and Quebec pension plans to support them in their retirement years, and let us be very clear that the Canada and Quebec funds are absolutely rock-solid and that this program is the most solid pension base that Canadians could ever want. It is indexed to inflation and it is portable no matter where a person worked. No matter where one goes in the country, people have access to the same benefits. It is a rock-solid investment that Canadians can be confident in for many decades to come. The major problem is that the benefits that it currently pays out are not sufficient to guarantee retirement security for Canadians.
The reason so many Canadians are facing a steep decline in their retirement income is that the vast majority of Canadians do not have a private pension plan, a company pension plan, an employer pension plan, or RRSPs. Canadians who had RRSPs and who became unemployed would often have to take the money out of their RRSPs, and they did not have other investments. The reality is that most Canadians rely on the Canada and Quebec pension plans, but the problem is that it does not replace enough of people's pre-retirement income. That is why so many agree that there is a retirement security crisis looming in this country.
Last year the finance minister agreed with this assessment, and he agreed to move forward to increase CPP and QPP benefits. However, now he does not seem to even want to meet with the provincial finance ministers. He has been ducking and diving on this issue, so New Democrats want to encourage him to address it.
We know that our colleagues in the Liberal Party have proposed a voluntary plan; we believe that what Canadians need is a mandatory plan that will guarantee their retirement income, and that is what we are proposing.
What we are proposing is completely affordable. Let me share with my colleagues some costing that my colleague from Victoria has done.
There are a variety of ways to increase the CPP. One is the plan proposed by the Canadian Labour Congress, which would lead to a doubling of benefits. That would cost about $4 a week, the cost of a couple of cups of coffee a week. That would be the cost to double the retirement benefits for Canadians.
However, there are other proposals that are out there. P.E.I. has a proposal that would cost less than $2 a week. What would that mean for Canadians? It would provide additional pension benefits for Canadians of $3,000 each year. That sounds like a pretty darn good deal. I do not think there is any investment that Canadians could find that would give them that kind of return with the security and surety of the Canada pension plan.
It is not just New Democrats who are saying this makes sense. As we have heard, there was an editorial today in The Globe and Mail, not exactly a radical leftist newspaper, I am told. Let me quote from it. With regard to expanding CPP, it says:
It should be done, and it should be done soon. Conservatives of the large and small-c variety have long been uncomfortable with a bigger national pension plan. It sounds like a tax increase. It's not. It's a savings plan. And it's the best one we've got.
I wholeheartedly agree.
Let us look at some others. We have an expert on payroll taxes, Rhys Kesselman, the Canada Research Chair on Public Finance at the School of Public Policy at Simon Fraser University. Here is what he has to say:
Since the proposed CPP premium hikes would provide workers correspondingly higher benefits in retirement, they are not like an ordinary payroll tax increase. Rather, they are like an individual's payment for improved insurance coverage.
That is what it is, retirement insurance.
He went on to say:
This premium-benefit linkage means that CPP premiums lack the disincentive effects of most taxes.
In other words, it is not a negative but a positive.
He also said:
Concern over the effects of CPP premium hikes is unwarranted and should not be allowed to block this important policy reform any longer.
We wholeheartedly agree.
Let us hear what the OECD pension team has to say about Canada's pension plan. Edward Whitehouse, leader of the OECD pension team, said:
The analysis suggests that Canada does not face major challenges of financial sustainability with its public pension schemes. ... Long-term projections show that a public retirement-income provision is financially sustainable.
That is what we said earlier: our public pension plan is sound.
He went on to say:
Population ageing will naturally increase public pension spending, but the rate of growth is lower and the starting point better than many OECD countries. Moreover, the earnings-related public schemes (CPP/QPP) have built up substantial reserves to meet these future liabilities.
He is convinced that we have the capacity with our current plan.
Another Globe and Mail article also said:
On the other hand, Canada is different because, unlike most other countries, our public pension commitments are not a substantial threat to our public finances. The Canada Pension Plan is in long-run balance. Old Age Security takes only 2.41 per cent of GDP. Very few OECD countries have lower levels of public pension spending as a share of GDP than Canada.
To take the extreme example, Italy spends more than 14% of GDP on public pensions, up 10% from only a few years ago; we are at 2.41% of GDP.
We have the support for this initiative. As I said, The Globe and Mail, tax experts, and the Canadian Association of Retired Persons just want us to get on with this. Even the CIBC economics report said that the CPP is a good plan, saying, “The CPP has the scale to make big investments and get better returns with relatively low cost.”
Canadians rely on the Canada and Quebec pension plans. We have to make them better and stronger so that they cover more of people's post-retirement income. We can do it.
Let us get together in the House and address this crisis now. Let us make it happen.