Debates of Oct. 24th, 2016

Canada Pension Plan

[Martin Shields, Conservative, Bow River, AB]

Mr. Speaker, I appreciate the comments of my colleague.

One of the things my own children want to make sure of is that I stay financially healthy so that I never live with them, so I understand how important this is. They say that they lived with me for 20 years, and that was enough.

You have mentioned one side of it, but again, the job creators of our communities are small businesses. I have had many small-business people talk to me about their concerns about this, because they are fighting on a fine line to stay in business, and they find this another piece that is going to create difficulty for them in staying in business.

In response to that, you have not mentioned anything about the small businesses and the costs there will be for them.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Before going on to the hon. member for Laurentides—Labelle, I just want to clarify. I am sure the member for Bow River did not mean that I did not mention anything. I just want to clarify that for everyone in the room.

The hon. member for Laurentides—Labelle.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Speaker, to be fair, you had not mentioned it either.

I think there is an opportunity for businesses to plan ahead. This would not even start for three more years and would not be at full scale until 2025. Businesses have an opportunity to prepare for this change. It is not a huge change, from that side of things.

The important thing is that we are planning for the future so that our seniors, later, are able to take care of themselves, like our ancestors, if we can call them that, planned for us today. I think it is very important that we do this work and do not slow down or slack off on it.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Mr. Speaker, I want to thank my colleague from Laurentides—Labelle for his contribution today. He, like all members in the House, realizes how important Bill C-26 is to society and to ensure the growth of our economy well into the future.

Today many Canadians are worried that they will not have enough money for retirement. We all heard this when we were knocking on doors during the campaign. Middle-class Canadians I know who have worked hard their whole lives are working harder than ever but are still concerned that they will not be able to afford retirement. This is wrong. This is not a great policy for Canadians, and we should all make sure we make the necessary changes today so that retirement income exists in the future. That is what Bill C-26, in essence, is all about.

The facts tell the story. Fewer and fewer Canadians have workplace pensions to fall back on. The days of working for one company for 35 to 40 years, although a romantic notion, I am afraid are over. That is the reality we face. We can all harken back to Mad Men. I know everyone here enjoys Netflix, and I am sure everyone here has watched an episode or two of Mad Men. Those days of working for one company for an entire career are over.

That may be good or it may be bad, but the consequence of that reality is that there are no company pensions to look forward to at the age of 65, when we punch out of work on the final day, say goodbye to all our friends from those 40 years, get our gold watch from the boss we probably never really got along with, and ride off home into the sunset to put our feet up on the footstool, have a cold beer, and ponder the next 20 years of our lives, wondering when the kids are going to call. That does not exist. That is not the reality for so many Canadians.

Perhaps it should be, and perhaps we wish it would be, but wishing and hoping does not put food on the tables of seniors. We need to make sure that we are responsible as a government and make decisions today that, yes, are difficult and challenging, but they are decisions that will help in the future, and not only seniors.

I think we all hope to be seniors. Some of my colleagues already are, but I hope to be one some day. I want to make sure that I live in a society, a country, and an economy where everyone can live with dignity and can afford to not only buy the necessities of life but to contribute to the economy.

This is right, not just for social reasons but for economic reasons.

For businesses to thrive in any economy, they need consumers. Consumers need to have money. Seniors who do not have money cannot consume and therefore, small businesses, big businesses, and medium-sized businesses are limited in the amount of profit they can make, because the market is smaller than it ought to be. This is why Bill C-26 is important. This is about the future of Canada and Canadians, but it is also about the economy of the future, and I am happy to be part of a government that has introduced Bill C-26.

We made a commitment to strengthen the Canada pension plan to help all Canadians achieve a strong, secure, and stable retirement. Those three words are important. Strong means that people do not have to worry from day to day. Strong means remaining active participants in Canada's economy. Strong means not relying on our children, grandchildren, or food banks for groceries or asking someone to help pay our rent, keep our hydro on, or pay our monthly bills. That is important, I am sure we can agree, to Canadians.

Canadians also need a secure retirement. Canadians are living longer, which means that retirement will be longer. We do not want Canadians to be in a position of dreading that their money will run out before they do. That is not ideal. That is not a secure environment and is not what anyone in the House would want.

We also want a stable retirement, which in my opinion means that Canadians can enjoy retirement. Canadians who have worked for 40 years, who have grown our economy, who have put children through college and university, who have bought houses, cars, automobiles, washers and dryers, clothes and groceries, all the things that sustain and grow the Canadian economy, deserve to live with stability and peace of mind in their waning years. The sad truth is that too many Canadians are not living under these circumstances today. That is what Bill C-26 is trying to address. We would be hard pressed to find anyone in this House who does not agree with at least the goal of Bill C-26, which is to ensure a stable, strong, secure retirement for Canadians and a strong economy well into the future for Canadians.

The other issue is that demographics are making this more urgent than ever. More than one-quarter of Canadian families nearing retirement today, which is 1.1 million people, will face a drop in their standard of living and will not be able to retire with the dignity they deserve. This demographic reality should make all of us realize that something needs to be done. In my opinion, Bill C-26 does exactly what needs to be done.

There is always change, but it needs to be done moderately and modestly. This bill achieves those goals. We want to make sure that these changes are affordable. We will phase them in slowly over seven years, from 2019 to 2025, so that the impact is small and gradual, which is an important component of this bill, one that ought not be overlooked.

This deal will boost how much Canadians would get from their pensions, from one-quarter of their earnings now to fully one-third, which I think is an important facet of the new legislation that needs to be fully appreciated. It makes this bill strong social policy and strong fiscal and economic policy.

We know that this deal came about because of the agreement in principle reached among all the provinces, with the exception of Quebec, which we hope will be working toward something similar. This is important. It is an important element of today's debate that we could get an agreement in principle, with the number of provinces and our diversity and diverging points of view on so many policies. With many topics in Canadian life today, it is hard to find any consensus. I will not say that it was easy, but we have reached an agreement in principle now, and that needs to be given some weight when we consider how we will vote on Bill C-26.

Whether we live in B.C., Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, or any of the three territories, I think we can all agree that we deserve the right to retire with dignity. We deserve the right to retire with stability. This is inarguable. I think the best approach to get there is what we see in Bill C-26.

I would submit that anyone who cares about seniors today or tomorrow, who cares about Canada's economic integrity well into the future, and cares about Canada's economic integrity well into the future, would be hard pressed to vote against Bill C-26. Every Canadian deserves a secure and dignified retirement after a lifetime of hard work. Through this enhancement, we have taken a powerful step to make that happen. Let us not lose this chance, this historic opportunity, to make sure that all Canadians, today, tomorrow, and well into the future, retire with the dignity they deserve and have earned. To do anything else would be foolhardy.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Mr. Speaker, the member would get a 10 for a big finish.

I appreciate my colleague's vote but in some ways he painted a very dire picture of what is happening in retirement. He talked about wanting to retire and said that we deserve the right to retire in dignity, which is what he wants to do. He wants to put up his feet and retire in dignity. The problem is that McKinsey and other people have done studies on this and I would like to tell the House some of the things that they have said. For example, 83% of Canadian households are on track to maintain their current living standards in retirement. According to Statistics Canada, the share of Canadian seniors living on low incomes dropped from 29% in the late 1970s to 3.7% today.

I agree with my colleague that we all want to live with dignity in retirement. However, I would suggest that by far the majority of Canadians are doing that. Canada is one of the best countries in the world for seniors to live, seniors with pensions and seniors with savings.

My fear with the legislation is that the government is using a big hammer for a small problem. The CPP, as important as it is, is only one strong pillar of our retirement. It is not the main pillar of our retirement. Savings such as tax-free savings accounts, RRSPs, and private pension plans are all part of a comprehensive strategy for retirement.

In a time when our economy is slow, would taxing small and medium-sized businesses and taking money out of the pockets of employers not hurt the economy?

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Mr. Speaker, I appreciate the member opposite listening to my contribution as intently as he did. I was not standing up to paint a dire and bleak picture of Canada. Of course, we are lucky to live in Canada. We should all feel blessed to live in Canada.

Whether we use the McKinsey numbers that say 83% of people are doing well in retirement or the numbers that I quoted, which say 1.1 million Canadian families, or 25% of the population, are worried about their retirement, I am talking about how we are going to deal with the 17% or 25% of Canadians who are not going to have a dignified retirement.

It is fine to say the majority of Canadians are doing well. It might be fine for the member opposite, but it is not fine for me when I look into the eyes of those people who ask me what they can do for their retirement. I agree that Canada is a great place to live. Many Canadians are living a great retirement but unfortunately many are not. That is what the legislation is trying to address. The number of have-nots is going to grow, based on demographics and based on where we are today and where the trends are going.

Our government is trying to make sure that 83% number gets bigger. Why can it not be 90%? Why can 100% of Canadians not live a dignified retirement, a stable and secure retirement? Why should that not be the will and the dream of everyone in the House? I for one think it should be. It is the better approach and it is the outcome Canadians deserve. We all agree that better is always possible and when it comes to pensions that perhaps is the place where we should prove it the most.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, I agree that everyone should have the right to retire with dignity, and that the Canada pension plan should be enhanced. More and more people have precarious, temporary, or part-time jobs. Those people do not have a pension plan and that includes many young families.

I would like to know what this government is going to do for those people who cannot draw a pension.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Mr. Speaker, the member for Hochelaga asked a good question. I share her concern about those who are not able to participate fully in Canada's economy as it is today. I agree that those people are going to have trouble. People are precariously employed when it comes to preparing for their retirement. The legislation would not necessarily address those people specifically, but it would help address the people who are perhaps being left behind by the current system and improve it.

I look forward to working with others, perhaps from my colleague's party, to help other people who might be getting left behind by the current system.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Mr. Speaker, it is indeed a pleasure to rise in this place to speak on behalf of my constituents of Battle River—Crowfoot against Bill C-26, known simply as the Liberal CPP tax hike. I think—

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

I have to interrupt the hon. member. There was a slip-up on my end. I have to read the deliberations that will take place tonight. I will interrupt for a minute and then we will go from there.

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Regina—Lewvan, Employment Insurance; the hon. member for Sherwood Park—Fort Saskatchewan, Foreign Affairs; and the hon. member for Abitibi—Témiscamingue, National Defence.

I thank the hon. member for Battle River—Crowfoot for his understanding. He may proceed.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Mr. Speaker, I was starting to wonder if it was something I had said or done, but thank you for allowing me to come back and say some more about the important debate we are having today.

I introduced it by saying that this is another tax increase. It is a payroll tax increase. We will go into that a little later. I want to talk about why we would say that.

Perhaps the Liberals have read the reports. I mentioned previously in my question the McKinsey report finding that four-fifths of Canadians are on track for a good, adequate retirement income. The report also says this compares very favourably with other developed countries. However, the Liberal government has said, “We have one-fifth of the people that we can help, but let's hit everyone with the tax. Let's hit small business and every employee, and let's see the coffers go up in the CPP investment. We will just do what we can to increase taxes.”

This is at a time when our economy is faltering. The problem is timing. Is this a good time, over the next five years, to invoke new taxes and hit the pocketbooks of employers and employees? I would say it is not. In fact, every time we turn around there is another story in the papers about our finance minister meeting with economists, trying to figure out why our economy is not growing.

Is there a retirement crisis in the country?

The Canada pension plan is but one pillar of a very strong, strategic pension retirement strategy that every Canadian should have and that the government believes Canadians should have. The first pillar is a strong, solid CPP.

The second pillar is the OAS and GIS. This pillar is there for lower-income Canadians. In fact, our government enhanced the guaranteed income supplement. This government has said it is going to do the same. Those are areas where we can effect change for that other fifth, or that other 3.7% who are living not in poverty but below where we would like to see them living in their retirements. Is there a crisis with CPP? I think there is not.

The third pillar, I never hear the Liberals and New Democrats talking about. That pillar is personal private investment. It is things like RRSPs and tax-free savings accounts.

I was privileged to serve with Minister Flaherty and Minister Oliver on the pension file and dealing with CPP. Our government wanted to be certain that Canadians had a dignified, secure retirement, so we did things like bring forward the pooled registered pension plan, where those 60% of Canadians who do not have a pension plan could be part of a pooled pension plan that would be administered by the provinces.

We brought forward things like the tax-free savings account, making certain that Canadians could put $5,000 a year in a TFSA and watch it grow. They could watch the power of compounding interest. Then we saw that 60% of Canadians earning under $60,000 were topping up their tax-free savings account, so we doubled it. We took it to $10,000. By far, a large majority of the people investing in the tax-free savings accounts were pensioners, seniors. They were putting their savings in there and watching the power of compounding interest work for them.

We also brought forward pension income splitting for seniors, and pension income splitting. All of these the Liberals said they would either cut back or eliminate. They are going to get rid of the way people save. Why is that? It is because the Liberal way is the big government way: let the government look after them in their retirement.

I have fears about what will happen, even now with some enhancement, if people stop saving.

In 2013, the total household net worth of Canadians was $7.7 trillion, split almost equally among pension assets, CPP, QPP, RRSPs, employer pensions. Also included in that were real estate equity and other financial and non-financial assets. It was pretty diversified. Most Canadians had a good portfolio when it came to their retirement.

However, I have heard over and over today members say that people are scared about their retirement, that they are uncertain about their retirement. That may very well be the case, because who knows how long one will live? Who knows how much money is enough?

I know people who will actually do better in their retirement than they have done through many years of working if they sell their home and downsize. They will have a better income in their retirement, but they are still fearful. One does not know the amount of time or the amount of money needed.

This bill would take money out of the pockets of those Canadians over 40 years and it would leave them with very little. It is not like another pension plan where, when I pass away, all my savings from CPP go to my wife. That is not what happens. She gets a very small portion of the dollars I may have invested in it over 40 years. Then, when she passes away, how much out of this pension plan is passed on to our estate, to our children? Zero. It is not the greatest pension plan in the world when we compare that with just about everything else.

Is it a needed pillar? Absolutely. There are some who depend on it, and we absolutely want that pillar strong.

The Liberals feel they can solve the pension crisis when there is no pension crisis and they will do it by taking money from everyone and putting it into a fund. When I am gone, it goes back into the CPP and it stays there. It is certainly not the best investment for our retirement.

Currently, CPP premiums are set at 9.9% of an employee's pensionable earnings, between $3,500 and $54,900 per year, up to a maximum contribution of $4,959.90 per year, split evenly between the employee and the employer. Eighty-three per cent of Canadians households are on track to maintain their current living standards according to the study by McKinsey, which I already referenced.

According to Statistics Canada, the share of Canadian seniors living on low income has dropped from 29% in the late 1970s to 3.7% today. It is among the lowest in the world. We should be encouraged. The member for Newmarket—Aurora says that if there is only one senior living in poverty, we need to do something to help. However, we can actually be proud of this.

Do we have to help the 3.7%? Yes, but let us do it in a measured way. Let us do it in a way that will not hurt our economy more than what we have right now. When I was in cabinet, that was one of the other things we were encouraged by with Canadians.

Canada's savings rate has climbed from 7.7% of pay in 1990 to 14.1%, today. That is according to C.D. Howe. People are starting to realize that if we encourage them toward their own private portfolios, the tax-free savings account, the RRSPs, pool registered pension plans, they will invest in those things.

The Liberals cut back those measures. Why? I am thankful they did not cut the pension income splitting for seniors like they had said they would do However, they do not believe that personal incentive and initiative should count, that big government will look after them. It is a typical socialist plan and strategy to have people sit back and let government look after them. However, Canadians are catching on and savings rates are going up. We need to ensure that the poorest Canadians are looked after with a strong OAS and GIS.

Finance Canada's analysis shows that the higher CPP premium will hurt the economy. I want to speak to that for a few moments. Right now our economy is hurting. In Alberta, right now we have a crisis not only in the gas and oil sector, but we have a crisis in agriculture where 40% of the crop is under snow. We saw a little of that many years ago in September, but when we come into November, there may be a writeoff of many crops that are under snow. Be aware of that.

Small businesses are being hurt by the low price of gas and oil. They know that many of the businesses are laying off employees and employers are scrambling with incentives to stay such as job sharing, and so on. They are frustrated that their incomes are dropping and that they cannot keep their employees busy. Then they hear the government is coming in with a new carbon tax, a tax on everything.

We heard where 100,000-head feedlots were shutting down and one of the reasons they were shutting down was because of the red tape, the carbon tax, all these extra taxes that the government was throwing at them. Now the Liberals have come with another scheme with the CPP. It will cost every employee more. It hurts the economy.

In many of the discussions we had with finance ministers from across the country they all said that we should wait until our economy was strong, that we should move forward with CPP enhancement when the economy was strong. Our finance minister meets every week with economists who keep trying to explain to him why our economy is slowing down and not meeting expectations. The Liberals' answer to that is another tax.

It is poor strategy in my opinion. It is a strategy that will not help seniors. I have seniors who call to tell me they think it is all right to have a CPP enhancement. I tell them that not one nickel will go to them, that it will help them 40 years down the road. It will not reach the full enhancement until 2025. No seniors today or no one close to approaching their senior years will benefit from the bill. It is a bill that will help someone who is 20-years-old today and it will only help marginally and it will hurt magnificently. It will hurt because it will hurt the economy.

A CPP tax hike will reduce employment by 0.04% to 0.07%. The Canadian Federation of Independent Business represents over 100,000 small businesses. It said that if Liberals moved ahead with CPP enhancement, many of those businesses, and I think it was 60% of them, would either cut hours or cut employment. A high percentage said that they would not hire any new workers. If they have another increase in expenses, if they see another input cost expense, they will not hire new employees and they will cut hours or cut employment.

If people want a strong, dignified, secure retirement, they had better have a very secure and dignified job today. If people do not have a job, there is no dignified retirement. That is the problem. We have a government that is driving this economy into the ground and more and more people are being laid off and unemployed.

Our problem is that we have a government that does not recognize what we need to do to have an economy that moves ahead strong.

Finance Canada's analysis indicated there would be 1,050 fewer jobs per year for 10 years. It would reduce the GDP by 0.03% to 0.05%. It would reduce business investment. It would reduce disposable income of the average employee. It would reduce private savings by 7% over the long run. Why? Because there are Canadians today who will say that because of a CPP enhancement, they do not have to put money into my RRSP, or top-up they tax-free savings account, or save. The CPP, OAS, and GIS will look after them. That is not the message we want to give to Canadians.

According to the CFIB, a full 70% of small business owners disagree that the enhancement would be modest. They see this as having a big impact on their businesses. I would remind the government that 90% of the jobs created in our country are created by small and medium-sized business. They say this is not a modest increase.

Ninety per cent of small businesses think it is important to have a public consultation before anything on this is finalized. That is according to the Canadian Federation of Independent Business. A paper released by the C.D. Howe Institute shows that the Liberals' CPP plan would not benefit low-income workers, that they would see their premiums go up. Yet their net increase in retirement benefits would remain low since higher CPP payments would be offset by clawbacks in GIS benefits.

Canadians are unaware of the implications that this CPP enhancement would have. Angus Reid found that 9% were following the debate, and very few understood what was meant. The CFIB Ipsos survey found that the majority of Canadians did not know the design of CPP and how it worked. In fact, it found that many people believe that the government paid into CPP, whereas we know it does not. It perhaps pays into the GIS and OAS, but not into CPP. Many Canadians, we know, always like the idea of an enhancement until they realize the government is taking money from one pocket and putting into the other. It is stealing from Peter to pay Paul. Typically we do not have any complaints from Paul when that happens; it is usually Peter.

The government is determined to push Bill C-26 through. It is a majority government so obviously it can do that. The Liberals are going to go ahead without the consent of employees and employers. They are going ahead contrary to what the provincial finance ministers said, which was to wait until the economy was strong. There is more education needed for the average worker and for firms. There are many other alternatives, and I wish I had more time to speak on that.

Regarding the tax-free savings account, at one time many people asked why the government would even go there. They said that it could not work, that it would not work. We found out that 12 million people bought into it, 2 million people maxed out on it, and 70% of them made under $75,000 and 60% under $60,000. Low and middle-income Canadians were seeing the benefits of this. Why does the government not grab some of that and say that it can do these thing, but it will also enhance the way Canadians can save?

We want a secure, dignified retirement for all Canadians. These are not the measures that will get us there.

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Mr. Speaker, we have had many discussions over the last five or six years about what is the best way to enhance the Canada pension plan or to provide some secondary vehicles to encourage people to save for tomorrow. The same rhetoric I have heard for the last five years is the exact same thing. The member's government introduced the pooled pension plans, thinking that would be a positive alternative. Clearly it was not. We clearly saw that very few people took that up.

I understand the ideology difference but without the CPP, thousands of people today would be in real poverty. A small amount of money per month from the employer or from the individual builds up for a better pension for people tomorrow. How can the member possibly object to that?

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Mr. Speaker, philosophically and ideologically, I object to higher taxes all the time. I stand here because I believe that we need to lower taxes on Canadians. We need to put more money back into their pockets. We need to give them the ability so that they can depend on a solid CPP, and that is what we have at this point. They can depend on the solid pillar of old age security and the guaranteed income supplement. However, we also have to be certain that we are allowing them to save as well.

Are the other two pillars stand-alone pillars? There is no three-legged chair that can stand on two legs. We have to make sure that they are all secure.

The member referenced pooled registered pension plans. Again, it is another idea thought up by the Conservative government, along with the tax-free savings account and income splitting for seniors and others, which depended on the buy-in of the provinces.

We had provincial buy-in. We had some provinces that were buying into it fairly quickly, and others were trying to manage the legislation. Ontario said that it would buy into the pooled registered pension plan. Now some of those provinces are wondering if they have to do that if we are going to start enhancing the CPP.

With pooled registered pension plans, unlike the CPP, when something happens to me, with my estate, my wife and children will see the benefits of my savings. With CPP, my wife will get very little of the survivor benefit, very little of what I had accumulated over 40 years. However, I do not hear governments objecting to the fact that all of this pooled money will come back to the big pension plan.

We need to keep money in the pockets of Canadians.

[Cheryl Hardcastle, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, I am glad to have this opportunity to ask a question of the hon. member. I stress that what we are talking about here with CPP enhancement is not wealth management. Therefore, this pillar definitely is important.

It is nice to hear about how in certain circles that one moves in, everybody is doing okay so there is not a crisis in retirement. To have Canadians hear that is a disservice. We do know that reports like the McKinsey report, which I have done extensive research on, is calculated using the value of retirees' real estate as well. In an area like mine, where real estate values are not as high as, let us say, in the GTA, people do not have that nest egg.

However, guess what? Our pharmacare, which is nonexistent, is something that hangs in the air for us and is very oppressive. Our medicine costs are the same. When one has to go to the lab and get extra blood tests, those costs are the same. Nursing home costs are the same, no matter where one lives. However, the fluctuation in our values in retirement mean we are going to have a certain percentage of Canadians who are not able to maximize and leverage their real estate.

Therefore, it was disconcerting to hear all day today, this lack of understanding on what that pillar of CPP is supposed to be achieving, and what personal investment is supposed to achieve. There is a clear difference there. For us to be using the time here today to confuse Canadians about what this really is, is alarming to me.

I would like to hear the member's plan for how the Conservatives would address the exponential increase in poverty among elderly women, especially single women, in the last 20 years.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Mr. Speaker, again, listen to what Statistics Canada said.

Statistics Canada said that in the late 1970s, 29% of Canadians were low income, seniors living on low income. That number of 29%, by 2014, had dropped to 3.7%. The member over here will say that we do not care about the 3.7%. He better believe that we do. That is why we brought forward measures specifically to those 3.7%, the GIS, TFSAs, OAS enhancements. They are the reason that we did those things.

I will commend the government today if it will continue to move towards enhancement of survivor benefits. We did some; I think there is perhaps more room for that measure to be done.

However, we again have a Liberal government, working together I believe with the NDP, who would say that we need a sledgehammer for a very small problem. I hear the NDP saying that oh, it is not a small problem, it is 3.7%. Typically Canadians are better off today than they were in the seventies. We have to continue to enhance it.

I am not saying that we should never make any adjustments, but I am saying that when our economy is like it is now, the last thing we should be looking for are ways to increase taxes on the average Canadian, the middle-class Canadian, the low-income Canadian. The last thing we should do is to say that the government is taking more. It is doing it with the carbon tax. It is doing it with payroll tax increases. It is continuously doing it with measures that mean that Canadians do not have disposable income. That is why we will continue to see household debt rising.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Speaker, my colleague has really defined the problem.

I have been listening to the speeches in the House today, and they are saying that retired single females are having a real problem. Well, my colleague explained really well that what the Liberals are trying to do is not going to help anybody who is suffering today.

The challenge I am hearing with the youth in my community who are looking for jobs is that they do not trust the government to look after their savings moving forward. With the way things are going right now, with the job losses, especially out west, and in manufacturing in my community, they want to know what the solution is for the government moving forward. Is it going to end up devaluing people's savings and investments in real estate?

I want to talk to my colleague about an issue that is being missed by the Liberals and the NDP. It is about competitiveness and how this incrementalism that is being put forward in government policy is affecting our competitiveness, especially in Oshawa and for manufacturing, whether it is the highest rates for electricity in North America that we suffer from in Ontario, or this carbon tax that the government is bringing in, or now with the increase in payroll taxes.

Could the member explain to the NDP and Liberal members why this is so harmful to attracting new business to our country, when countries that we compete with do not have these burdens?

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Mr. Speaker, that is a very good question from my friend.

First of all, I want to say that one of the things our Conservative government did, among all of our consultations, was that we listened to what seniors said, and not just on one issue but on many. When they said they would like us to reduce the minimum withdrawal requirements from the RIFFs, another measure we gladly did, it meant they could stretch their portfolio over a much longer period of time, until they were 85, 90, 95 years old.

The member talked about competitiveness. We have a presidential election going on in the United States. If members could stand to watch any of it, they will have heard talk about jobs going to Mexico, jobs going everywhere else. Why is that happening in the States? Jobs will go to where they can be competitive, to where they can have an advantage.

We have seen it in the provinces. We have Premier Wynne here, who has a problem on her hands. She is watching manufacturing leaving because it is not as competitive anymore as with other provinces. This is a massive problem. Competition, competitiveness, productivity: all of this can hurt.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, let me begin by thanking the leader of Her Majesty's loyal opposition for recently naming me the spokesperson for work and opportunity for the Conservative caucus. I will approach this issue and all issues by breaking them down into those two constituent parts, work and opportunity.

The reason that those two things are so important is because they will determine the well-being of our people. The best anti-poverty program is a good job. The greatest social safety net we have is a strong family and a strong community. I am here today to talk about how we can use the power of work and opportunity to lift people up, particularly people who are less fortunate. It is through that prism that I will comment on the government's proposed increase in Canada pension plan payroll taxes.

Let us start with the impact of that policy on work. What will be the impact on work? First, it will make it more expensive to work. Anybody who has a job and receives a wage will pay higher payroll taxes. According to one estimate, it will be as much as $2,200 in extra payroll taxes, and that will be matched by the employer. It would be $2,200 per household, and an equivalent amount for each contribution by the employee will then be paid by the employer.

That deals with the second half of the work dimension. Not only will it be more expensive to work, it would be more expensive to hire. When it becomes more expensive to hire, understandably less hiring happens. That is particularly the case for small businesses, whose ability to take on marginal costs like payroll taxes is lower than that of larger firms.

This is particularly important because new evidence has emerged this month showing that small and medium-sized firms are vastly outpacing big business when it comes to hiring people. A report from Scotiabank said:

Annual payroll growth among small firms (fewer than 100 employees) averaged 1.4% from 2010-2015, significantly stronger than the 0.9% increase among large firms (500 or more employees), though lagging the 2.0% gain among mid-sized firms (100-499 employees). Small firms generated more than 500,000 net new jobs over this period, or 45% of national payroll gains.

In other words, small companies were responsible for half of the net new hiring that occurred between 2010 and 2015, and large businesses, the kind that the Liberal government likes to associate with, are not generating jobs in the same numbers as the small and medium-sized enterprises. This new payroll tax will make it more expensive for the small companies to hire people, and therefore they will do less hiring.

Anyone who has been out in their communities and talked to small electrician firms, small construction companies, local mom and pop shops, will say they are hearing of the increased burden of government that applies every time a small business tries to hire someone, whether it is restrictive labour laws, higher payroll taxes, provincial and municipal building code restrictions, or the endless volumes of paperwork that a small business must complete for the mere crime of creating jobs and providing goods and services in a community. All of these burdens make it more difficult for entrepreneurs to hire and grow their payroll, and this new payroll tax will make it harder still.

Let us be clear. The government has argued that the CPP payroll tax increase is not a tax at all. It argues that it is simply deferred income, that it goes in one end of the CPP machine, and that when the person retires, it comes out the other. That is not the case for small business. The entrepreneur will pay an increased premium, but he or she will get absolutely nothing in return for it. Their pension will not go up as a result of the increased payroll tax. Their costs will simply go up.

The reality is that they do not have spare change sitting around waiting to throw at the government, so they will have to make difficult decisions. The Canadian Federation of Independent Business has already said that many employers will either cut wages or jobs to make up the extra cost from new tax burden.

That is how this new tax will affect small business in particular, but what about businesses in the export market? Canada is a trading nation. Without exports, we do not have an economy.

I look at the struggling manufacturing sector in Ontario, already hammered with literally tens of billions of dollars in inflated electricity prices imposed by the provincial government to reward well-connected, so-called green energy firms. We look at the new carbon tax these firms will have to pay just to keep their factories operating, and now they will have to pay new contributions to CPP. Large manufacturing firms, particularly in the auto sector, have already warned that this triple whammy will make it more difficult to create jobs here in Canada.

We have a global supply chain where investment goes to where the returns are, and if the returns on hiring Canadians are lower because the costs are higher, then these firms will just build and hire somewhere else. They have lots of options. Other places around the world are competing fiercely for opportunities and jobs for their people, and they are doing it by lowering taxes and streamlining red tape. The government is doing precisely the opposite of that, so we can expect that this new and expanded tax on jobs will mean fewer jobs and less work.

As the critic for work and opportunity, I think that is terrible. We need to expand job opportunities for people by lowering the cost of hiring. If we do that, then entrepreneurs, large and small, will come here and hire in record numbers. That is the agenda we should push.

Let me remind our colleagues across the way who say we need to have more contributions to the CPP, that if someone loses their job, the contribution they make to their CPP retirement is zero. They get absolutely nothing put away in a rainy day fund, in their retirement nest egg. If we want to ensure that people have enough money to retire, we have to make sure they have a chance to work so they can contribute to their savings in the present day rather than taxing them out of a job.

Let us move to the second part of my new duties as critic and spokesperson on the issue of opportunity for Canadians. What kind of opportunity will this proposal bring to the Canadian people? The government says that we need to increase the mandatory contributions to CPP because people cannot afford to save for their retirement. Let us think about that for a second: people cannot afford to save for their retirement, so we will force them to save.

If the government's position is that no one has any money to set aside at the end of the month, then how will they afford to pay this new tax? It has to come from somewhere. It is not magic. The amount that the government is proposing the average family contribute is $2,000. If Canadians do not have $2,000, what will they do when this new tax kicks in? They will not have a lot of options.

In fact, options are precisely what we should be providing them. We should live in a big, opportunity filled free enterprise economy where Canadians get to choose what is right for them. That is what free enterprise means, and that is why it is the greatest poverty fighting machine ever invented.

Prior to the current government's taking office, we as a Conservative government introduced the tax-free savings accounts. The government does not actually understand the purpose or the use of those accounts. It has suggested that tax-free savings accounts are merely a tool for the rich. They are exactly the opposite. It has been proven that RRSPs tend to be weighted more in that direction. TFSAs are weighted to favour low-income people. That is because low-income people often do not have access to the biggest tax-free savings account that has ever existed in Canada, which is the capital gains tax exemption on a primary residence. We have long had a tax-free savings account for real estate so that we can grow the value of our property infinitely without paying any capital gains tax at all as long as it is our primary residence. What about low-income people who do not have a primary residence but who instead rent because they have never been able to afford a down payment? A tax-free savings account is precisely the equivalent for them. It gives them the ability to save tax free through equities and other savings instruments the way that more affluent Canadians already have saved tax free through the ownership of a principal residence.

Lower income people pay a lower marginal tax rate because they are in a lower tax bracket. As a result, an RRSP does not necessarily save them as much money when they contribute to it. Therefore, if their marginal tax rate is somewhere around 20%, an RRSP contribution does not defer nearly as much either in percentage or absolute terms as if they were a millionaire, like the finance minister, and pay a marginal tax rate of 48%. The millionaire would save 48% whereas the working class person would only save or defer 18% or 19% on an RRSP. With tax-free savings accounts, not only do the savings accrue over time but the accounts also exempt a low-income person from having eventual GIS and OAS benefits clawed back later in life because TFSA earnings are exempt from that clawback. Therefore, lower income people can retain the GIS and the OAS while they take gains out of their tax-free savings account.

The government will say that low-income people never contribute in the first place. Actually, the statistics from Finance Canada prove exactly the opposite. The average income of a TFSA contributor is $42,000. Maybe the government does not consider that middle class. Its so-called middle-class tax cut did not give a penny to anyone earning below $45,000 a year. I consider that middle class. At the very least, the people who earn $42,000 a year are working hard to join the middle class, and TFSAs are one way to help them do it.

Of those who actually maxed out their tax-free savings account, the average income is about $60,000 a year. Our friends across the way will say that it is impossible for someone earning only $60,000 to max out a $5,500 tax-free savings account. That is because the Liberal government does not understand when and how people contribute to those accounts. They do not always do it out of their income but out of big life events. When a spouse dies, an elderly survivor may want to put the inheritance in a place where it will not be taxed. That is why he or she would take that inheritance and put it into a tax-free savings account. If a senior gets too old and can no longer climb the stairs in his or her large multi-level house, if he or she disposes of the house and moves into an apartment, he or she has turned a hard, real asset into a liquid asset and can put that money into a tax-free savings account. That is why the people who have maxed out TFSAs are not all rich. They are often people with low incomes who have had major life events that cause them to turn their assets into cash, and they want to turn that cash into tax-free income. We wanted to give them the opportunity to do that, which is why we created the tax-free savings account, and that is why we increased the amount people can contribute to it.

On the other hand, the government wants to force everyone to contribute through the CPP, arguing that this instrument is the only way people should be allowed to make contributions to their savings. However, we are increasingly finding data that shows that it is not the best savings instrument compared to the other alternatives out there in the marketplace.

In fact, a recent study by the Fraser Institute demonstrated that the 1.07% management cost of running the CPP is quite high. It is not low, as was argued earlier. It is actually quite high, and Canadians, increasingly, can access exchange traded funds with the click of a mouse on the Internet, from very reputable firms like Vanguard, iTrade, or others. These funds are massively diversified, with extremely low management costs, much lower than the CPP. In fact an investor can own the entire American stock market, the entire Canadian stock market, and even the entire worldwide stock market and be diversified into every single company that exists and is publicly traded on planet earth, with a management expense ratio lower than the current CPP's.

Warren Buffett was recently asked how he would encourage the average investor to prepare for their future. Given that most people do not have the time or expertise to pick one stock at a time, he suggested exchange traded funds because of their extremely low management expense ratios, because it costs so little to invest in them, and because they diversify so widely it protects the investor against major losses.

That is just one vehicle, but there are all sorts of other vehicles available to people if they so choose. I am not here to offer them financial advice. I think most of us in this place struggle just to plan our own financial futures. However, we do acknowledge the cornucopia of opportunity for people out there in the private sector, and that Canadians are smart and wise enough to make those decision for themselves. They should not be robbed of those decisions by a government that thinks it knows best how they ought to prepare for their future. That is exactly what this government is doing by forcing people to invest more money in an expensively managed CPP savings account.

I conclude by turning the attention of the House to a column recently written by Kevin Libin in the Financial Post, who said:

So what if a new report by Morneau Shepell, the human resources firm once chaired by our current federal finance minister, finds that the new enhanced CPP doesn’t significantly tackle all that much—and, in some ways, makes our retirement system even worse.

The article goes on to say:

Even Bill Morneau, before he was a politician and still worked at the human resources firm that bears his family’s name, co-authored a book with Vettese that repudiated—

[The Deputy Speaker, Conservative, Bruce Stanton]

Order, please.

I see the hon. member for Saanich—Gulf Island rising on a point of order. I started to detect this commotion. I did not hear. Perhaps the member could enlighten me.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, entirely inadvertently I am sure, the official opposition advocate for opportunity used the opportunity to use the personal name of the Minister of Finance. I think he will regret that. It's just a hunch.

[The Deputy Speaker, Conservative, Bruce Stanton]

I appreciate the intervention by the member for Saanich—Gulf Islands.

The hon. member for Carleton may recall, and for the benefit of the House actually, when the name of another member appears in a citation one cannot use the name, even if in doing so you are doing it indirectly through a citation. So even in a citation we essentially rule that out of order.

The member will then, I am sure, substitute and use the appropriate name, either the title, or the member's riding name.

The hon. member for Carleton.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, sorry, I am new here.

The quote states:

Even [the finance minister], before he was a politician and still worked at the human resources firm that bears his family’s name, co-authored a book with Vettese that repudiated “fear-mongering media stories” and “overblown” worries that Canadians were under-saving.

Now, he’ll force Canadians to save more for their retirement whether they want to or not, or whether they need to or not. Eventual changes to benefits from 25 per cent of covered earnings to a third, and a heightened ceiling on covered earnings from what would have been $72,500 in 2025 to $82,700, will result in some Canadian workers paying as much as 40 per cent more in CPP contributions by that date—up to an additional $2,200 a year deducted from their take-home pay, according to Finance Canada’s backgrounder.

The finance minister opposed precisely what he is now implementing and enforcing on Canadians.

At the end of the day, if Canadians want to contribute more to a large, diversified savings fund, there are hundreds of options available to these millions of Canadians. We as government should not impose our will upon them and their retirement savings plans. That is why we on the Conservative side instead favour voluntary options, low-tax plans, rather than high-tax schemes, to free people to make the best choices for their lives and their futures.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Prime Minister (Intergovernmental Affairs)]

Mr. Speaker, I listened with great interest to my colleague, who has a new job title. The first two letters are J and O. I would suggest he add some more components to his job title, with kids excepted and seniors with nothing. In other words, the joke is on him.

That was not the best joke in the House today. Handwriting is not my long suit.

I keep hearing the other side talk about the 17% who do not. They say that a job is the best social program. Is the member really suggesting that kids go out and get a job if they need daycare? Is he really suggesting that seniors go back to work if they do not have the funds to retire? Is the job really the best social program for everyone, or are there some people who need support? If that support is needed, should that support not lift them out of poverty rather than keep them there?

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, first of all, kids do not make contributions to CPP. I am not sure if that is something the hon. member proposes, nor do people who are out of work make contributions to CPP. If he is saying that this is a solution for long-term unemployed Canadians, he should check the rules of CPP, because those Canadians cannot contribute in the first place and therefore they accumulate no benefit under the existing system or any future one the government may propose.

Nothing in the member's proposal would expand retirement benefits for unemployed Canadians. Nothing. Let us just be clear on that.

My comments were that yes, I believe that the best anti-poverty program is a good job and the best social safety net is a strong family and a strong community.

As it relates to child care, we on this side believe that families are best able to make their own child care decisions. That is a debate we had long ago when we were discussing whether to have a daycare program or give direct benefits to parents. That is a debate the Conservative Party won, because the Liberal Party has now adopted our position on that with this new child benefit.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, poverty in Canada costs us between $72 billion and $84 billion a year in increased health care costs and an increased need to take care of those who are the most vulnerable. As elected officials, it is our job to look out for the most marginal, to try to reduce costs, and to look at a harm reduction strategy that will save taxpayers money.

When we look at the statistics the Conservative Party talks about when they talk about people living in poverty, they say that it is between 3% and 4%. When I look at statistics for seniors, 15% of single seniors are living in poverty, and 30% of single senior women are living in poverty. When we look at the most recent figures and talk about the 30% of single women living in poverty, that number has tripled in the last 20 years.

What plan does my colleague's party have to help lift the most vulnerable elderly women out of poverty? This is not just life circumstance. There is a lot of life circumstances for 30% of single elderly women to be living in poverty.