Debates of Oct. 24th, 2016

Canada Pension Plan

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Speaker, I appreciate the time today to speak on a topic that is very important to many Canadians.

During last year's general election, I knocked on many doors and visited with many residents, and many asked about the enhancement of the CPP. After years of hard work, Canadians have earned a secure retirement, but because of continued escalations in the cost of living, many wonder if that secure, dependable retirement will be possible in the future. As the costs of bills rise, fixed incomes stay stagnant. To address this disparity, we made a commitment to Canadians to strengthen the Canada pension plan to assist in securing a strong, secure, and stable retirement.

In order to make meaningful changes to the CPP, we need a significant change in the approach from the previous government of the past 10 years. The more than one-quarter of Canadian families approaching retirement and 1.1 million families who are facing a drop in their standard of living will be able to retire with dignity and confidence as a result of the enhancement to their CPP provided for in Bill C-26. This first major reform of CPP benefit levels since the establishment of the CPP in 1966 is without a doubt timely in its design to address the futures of our children and grandchildren.

Seniors today are benefactors of prudent planners of the Pearson government in the mid-1960s and of the Paul Martin government in 1997, who realized that times and opportunities were changing. They accordingly made adjustments to retirement funding and investment therein for seniors.

The first CPP in 1966, the GIS in 1967, and the CPP Investment Board in 1997 were pivotal changes to simplistic tax-based earlier plans initiated in 1952 with the inception of Canada's first pension called old age security. Now it is time to adapt our pension to the fluctuating, unpredictable conditions that prevail in everyday life, conditions that will dominate the lives of those approaching retirement and the experiences of our young people.

Contemporary global economic and social conditions have been radically altered from those experienced and encountered by current retirees when they were in the workplace or raising young families. An evolution of financial and social conditions, even for my peers, has rendered some of their future economic planning ineffectual and erratic.

Our young people, as we often hear, frequently make do with contract jobs, short-term jobs, if they are lucky, or jobs below their education with sometimes no benefits. They face expensive, almost unattainable housing; an inability to save regularly or under-saving; no stable retirement plan beyond RRSPs, which they cannot afford to tend; and relatively low rates of interest on any savings.

Bill C-26 would help young people address those challenges and cope with the ever-changing, unstable conditions of life by shaping a firm, reliable pension plan with a reasonable enhancement of the current plan. It is something they can count on. An updated CPP is one way that the government can assist these young people in arranging for their senior years with a fully national plan.

Already this government returned the retirement age to 65, as the right place for a meaningful retreat from the workplace. Young Canadians just entering the workforce will see the largest increase in benefits. This is the right place for a meaningful phased-in enhancement, as these young adults and their descendants will be the most vulnerable to the labour market in the 21st century.

The provisions of the enhanced plan would increase how much Canadians will get from their pension, ultimately, from one-quarter of their earnings to fully one-third. This will be a good boost for many Canadians who do not have workplace pensions to look forward to.

The previous government, for over 10 years, refused to address the needs of our most vulnerable, but this government sees the enhancement as a priority and has set it up in a logical, progressive way.

Bill C-26 is easy to support in the way that it sets up the enhancement. With this gradual phase-in approach, contributions are shared by both the employee and the employer based on the yearly maximum pensionable earnings of the employee with the specified contribution rates. By 2025, the enhancement would be fully phased in, as the making of the additional contributions is provided for in the bill commencing in 2019.

The vision of this government in establishing the provisions of Bill C-26 is level-headed and logical, balancing modest increases of contributions by employees and employers with stable results and appropriate counterbalancing taxation deductions for all participants. In Bill C-26, this government understands economic vulnerability, especially of our children and grandchildren, to the consequences of societal change. Accordingly, it focuses its priorities on pension remediation with an equitable realistic approach.

So far I have addressed the Canada pension plan alterations, as well as concurrent tax changes represented in Bill C-26. The third aspect that is the subject of amendment in Bill C-26 is the Canada Pension Plan Investment Board Act. The amendments for the investment board are necessitated by the practicalities of the other two changes. Because of the alteration to the mode of acquisition of pension funds, the staging of additional contributions, it is necessary to supply suitable instruments and modus operandi to provide for the transferring of increased contributions and in the preparation of statements.

Bill C-26 links the board to the new additional Canada pension plan account. This alteration, however, is a reflection of the positive outcomes of the enhancement phase. The investment board, an arm's length independent entity accountable to Parliament, is responsible for the workability of the plan. The board is in charge of the investment, the monies, and the contribution phases of the enhanced plan, as well as the regular contributions.

With the enhanced plan, there would be more money to invest because more has been contributed. Accordingly, pensions would increase. The Department of Finance has declared that once fully in place, the CPP enhancement would increase the maximum retirement benefit by about 50%. For example, the current maximum is $13,110. Compare that with the enhanced CPP with a maximum benefit total of nearly $20,000. Whereas early quasi-pensions in the 1950s were funded by taxes, current ones rely on good, long-term investments of employee and employer contributions.

It is a big contrast from the $40 a month or $480 a year, even in 1952 dollars. Investment is how all Canadians can save for retirement today and sustain the CPP through the instruments the government initiates and modifies. Bill C-26 would confirm the adjustments to the role of this board that is so instrumental in helping Canadians have a decent retirement.

The enhancement of the CPP is vital and most helpful to our youth. It would also significantly reduce the share of families at risk of not saving enough for retirement. Canadians are assured of a dignified retirement.

The enhanced CPP would provide for the first substantive change to our national retirement scheme. The time has finally come to do something about retirement security. Yes, the time has come for the House to adopt this well-conceived and formulated bill. In all respects, I stand behind Bill C-26.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Mr. Speaker, I appreciate the opportunity to ask questions of the government today on CPP changes, something that is not at all evidence based. It is strictly a public policy to garner votes.

Why have the Liberals not been more up front with Canadians? It is going to be 40 years until the entire contributions of this change to CPP is realized by seniors. It will not even kick in until 2025, so today's seniors will not benefit from any of these changes. They are being sold this bill of goods by the Liberals without any opportunity to benefit from CPP enhancements.

The main issue that Conservatives have with the bill is the way it would impact small and medium-sized enterprises. The Canadian Federation of Independent Business has said that this would force more and more businesses to make a decision as to whether they hire new people, maintain what they have, or lay off people to deal with the increased contributions they would have to make in this whole process.

I would ask the member to speak to how this would hurt small business and employment in a situation where the economy is stagnant under the current government. There needs to be an increase in job opportunities. First, will Liberals listen to small business and change the way they are going to go about getting employer contributions for the CPP?

Second, would they reinstate other savings mechanisms that were in place, like the tax-free savings account? The tax-free savings account limit was $10,000, helping Canadians save money for their retirement, along with their RRSPs. It was well embraced by Canadians, especially seniors. Will they bring that back up to $10,000 rather than reducing it to $5,500?

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Speaker, I listened intently to the member's question.

What I have heard from the Conservative member has been a vigorous attack on our CPP and on the enhancement of the CPP. The member, in his question, spoke about seniors. Well, there are millions of seniors who are today benefiting because somebody made the right decision in 1966 to bring forward a CPP.

I would like to know if that member were in the House at that time, if he would have voted against the CPP. The CPP, I know in my community, is held as a Canadian value, one that provides support for millions of Canadians. This is the right time to enhance the CPP.

If the member cannot see that, how the labour market has changed and how that is affecting our young people, and today make the right decision, the same way they did in 1966, then the member does not have vision or foresight into our future.

I am proud of the decision we are making to enhance the CPP and of how it will better the lives of millions of Canadians.

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

Mr. Speaker, I would like to ask the hon. member across the way what he sees as some of the ways that we can reverse the increasing levels of poverty among seniors today.

As we know, the CPP enhancement, which we do support, will not be fulfilling its full intent for almost 50 years. What would the member envision would complement this momentum that we are starting here today?

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Speaker, we have to look at our most vulnerable citizens, our seniors, and provide support in a very comprehensive way. That is why our government came forward with an increase to the GIS.

I met a number of those soon-to-be retired seniors who were feeling a lot of anxiety when the previous government was looking to raise the retirement age from 65 to 67. We have repealed that. I thank the member for her support on that.

Now with the enhancement of the CPP, looking at this holistically, it is a virtuous circle. We have to be prepared, especially to help those who are most vulnerable. With the enhancement of the GIS, I am glad that many of those very vulnerable seniors are seeing at least a $900 increase to their income.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I will be sharing my time with the excellent member for North Island—Powell River.

Today I am pleased to rise in the House to speak to Bill C-26, an act to amend the Canada pension plan and other acts.

Today is a very important day. Every day spent in the House of Commons is very important, but today is especially important because we are talking about our seniors and how to show them the proper respect. They are the ones who built our country. They are the ones who raised our families. They are the ones who created and protected our culture. It is very important to show them the respect they deserve.

Every year, I tour the seniors' residences in my riding and I am always saddened to hear seniors talk about how worried they are about their precarious financial situation. They tell me they worked their entire lives and now they are receiving the minimum, roughly $1,000 a month. It is incredible to think that after working their entire lives, seniors are receiving barely $1,000 a month. That is why it is very important to talk about it and to do something about this situation.

Therefore, I would like to congratulate the Liberal Party for finally understanding, as did the NDP, that the retirement age had to be brought back to 65. The Conservatives wanted to increase it to 67. As a result of the NDP's many efforts, the Liberal government understood that that was not the way to go. Therefore, it changed the retirement age back to 65, which is a good thing.

Although it would have been possible to do better, we should mention that enhancing the Canada pension plan is an important first step in improving retirement security for young Canadians. We congratulate everyone who was involved in improving the CPP, especially the unions, who worked very hard to lay the foundation for this agreement. Nevertheless, steps must be taken now to help seniors and Canadians who will be retiring soon and who will not benefit from these measures. The government must examine this issue. It must build on the enthusiasm created by this agreement and take the steps required to improve the long-term security of today's workers when they retire.

We also need to start paying attention to something else, namely, retirement insecurity, which is beginning to reach crisis proportions in Canada. In fact, many Canadians have not saved enough to maintain their standard of living in retirement, and for various reasons. Sometimes their wages were too low, so they could not save. My constituents are asking me a lot of questions these days about the fact that people who work full time at minimum wage cannot make ends meet.

If you really think about it, that is a very serious problem. Some people work full time at minimum wage and are forced to turn to charities in order to provide for their families. That is not normal, and that is why it is important to have a closer look at this issue.

Much of the problem can be attributed to the erosion of pension funds offered by employers, to the point where, at present, six out of ten Canadians have no pension plan from their employer. Of course, some can set money aside through RRSPs, but not everyone can do that. As I just mentioned, some people who work full time for minimum wage are having a hard time making ends meet and providing for their families, so they cannot invest in RRSPs, and these are people who are working—they are not lazy. Instead, they sometimes have to turn to charities for help. Unfortunately, this is a very real situation that needs our attention and must be dealt with.

As I said earlier, the maximum pension benefit is $1,092 per month, or $13,100 per year, which is really the bare minimum for survival. People who collect that much in a year do not live high off the hog. Far from it. They live below the poverty line and have trouble making ends meet.

As I said, seniors are people who devoted their lives to our country, to raising Canadian families, and to sharing our culture. When we see what is happening to them, it is clear that they are not getting the respect they deserve, unfortunately.

We would also like the government to further enhance the Canada pension plan to offer our seniors a more dignified retirement. That is really important. The NDP is also calling on the government to stop trying to convert public sector defined benefit pension plans into undefined pension plans. People work very hard and expect a decent retirement income, but they are being offered undefined pension plans, which can increase or decrease in value depending on the vagaries of the stock market.

That is a problem. Look at what happened in 2008. That did not seem to wake anyone up because the measures that should have been implemented to prevent such situations have still not been adopted. Unfortunately, this could happen again. That is why it is important to have secure pension plans to ensure our seniors' well-being, as well as our own well-being in the long term.

We also need a long-term vision for our seniors, not only when it comes to the Canada pension plan but also when it comes to health. Right now, the Liberals are maintaining the Conservatives' bad decision to cut $36 billion in health transfers over the next 10 years.

As they say, as you get older, your body starts to give out. Seniors have more and more health problems. That is to be expected, but we need good health care services. The Liberals are not going to achieve that by making $36 billion in cuts, like the Conservatives planned to do, quite the contrary. We need to think about seniors. We need to think about our family caregivers.

I always think of my mother and my sister, Suzanne Brodeur and Maryse Choquette, who do amazing work with the elderly in a seniors' residence. They are so devoted. I often say that an MP has to be devoted, but what those women do in the health care field is true devotion.

Housing is another factor. Thirteen thousand dollars a year does not cover much in the way of housing. That makes access to affordable housing extremely important. I know that the Drummondville municipal housing office is working hard to find more housing for seniors. Without accessible, affordable housing, how can seniors survive on such a low income?

According to the Federation of Canadian Municipalities:

Some cities are already showing a significant and growing need for seniors’ social housing. Seniors are on social housing waiting lists and are at risk of becoming homeless.

Some seniors may even become homeless because we failed to take proper care of them.

I would like to congratulate the Liberal government on taking the first step toward making things better for seniors by lowering the pension eligibility age to 65 at the NDP's urging. I would also like to congratulate the government on enhancing the Canada pension plan, again at the NDP's urging. However, there is still a lot of work to do. The government needs to see the big picture and further enhance the Canada pension plan right away for everyone currently living below the poverty line. Housing and health care have to be part of the equation. The Liberals should cancel the $36 billion health care cut immediately because it is totally unacceptable.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Speaker, I thank my colleague from Drummond for his good work. I have had an opportunity to work with him in the past in committee, and I know he is very passionate about these issues.

My question for him today is regarding the following. As the Liberals move forward with these changes to the CPP, he mentioned that they really are not doing anything for seniors.

One of the challenges I have in my community, a manufacturing community in Ontario, is that we are seeing some government policy changes that are really starting to affect our competitiveness. We have in Ontario the highest electricity rates in North America. We are seeing that affecting our manufacturers. We have lost 300,000 manufacturing jobs.

The Liberals are putting in a new carbon tax, which would make us less competitive, and now with the CPP implementation at this time, it really means that anyone who wants to do work in Ontario or this part of Canada is at a disadvantage versus those who sometimes are literally 10 miles across the border, whether in Michigan, New York, or other states.

What are his ideas for actually solving the problem of some of our seniors today, while keeping in mind the necessity of Canada remaining competitive in this global marketplace?

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I did indeed have the honour of working with my colleague on the Standing Committee on Environment and Sustainable Development.

I am always shocked to hear my Conservative colleagues say that a price on carbon is a tax on carbon. A price on carbon is an investment in a low-carbon economy. It is quite different.

Even though the Liberals' plan is far from perfect, everyone who wants the government to invest in the environment can agree on one thing: transitioning to a low-carbon economy cannot happen without pricing carbon.

That being said, as far as the Canada pension plan is concerned, it is true that the Liberals must absolutely think about all the SMEs. My riding, Drummond, is another riding that depends a great deal on SMEs.

The Liberals have introduced some tax deduction measures. I will not list them all, but they ensure that employers and employees alike do their part, put money aside for improving CPP. The adverse effects can be mitigated by the fact that this is considered a tax credit, as it currently is by the way. This is an investment in the Canada pension plan.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I have had the opportunity over the years to table many petitions of what my constituents and, I would argue, all Canadians want to see, the stability and potential strengthening of our pensionable programs. I am referring to the guaranteed income supplement, old age security, and what we are debating today, the CPP.

When we think specifically of the CPP, it is one of those fundamental free pensionable programs in which all Canadians feel fairly confident and want to see benefits from in a very tangible way. Could he provide some of his thoughts on that package of three programs, and how government needs to attempt to move forward with all three of them?

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, indeed, it is extremely important that we continue to enhance the Canada pension plan, as I said in my speech. I agree with the Liberals on that, and I said this was a first step in the right direction.

However, we still need to remember to tackle certain important challenges. As my colleagues said earlier, women tend to be much poorer in retirement than men at this time. A lot of women receive smaller pensions than men. We need to come up with solutions to this urgent problem.

A broad range of measures is needed to do that. However, $36 billion in health cuts and inadequate investment in affordable housing are not going to help matters any. A whole series of solutions are needed. I therefore congratulate the Liberal government for this first step, but there is still a lot of work to be done.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, I am happy to rise today to speak on Bill C-26. I will be voting in favour of it.

I am very proud to represent the riding of North Island—Powell River, which is full of hard-working people from many sectors, largely the resource sectors. It is in a wonderful place of transition right now. I do know that all the hard-working people in my riding work hard towards a good retirement. That is a priority for all of them.

In my riding, I take a lot of time to speak with seniors. Earlier this year, I was really proud to travel around Campbell River and go to several different seniors centres the day before Canada Day. I have to say that I really appreciated Carol Chapman and the Canada Day planning committee who worked so hard to allow dignitaries to go into these homes annually and to be with the seniors the day before, and really get an opportunity to speak and chat with them.

It was heartbreaking in some cases to talk to senior constituents of mine who have multiple challenges as they age, including concerns about how they are going to make ends meet and afford their medication. That is a reality in this country and my riding.

This bill will take 49 years to reach full implementation. My son just turned 16 in June, and he will be experiencing the full benefit of it. However, the reality now is that many seniors are living in poverty, and that number is growing in my riding. On a weekly basis, constituents are contacting my office to share their real challenges. The truth is that Bill C-26 will not address these issues. My office hears about seniors who are making choices between purchasing medication, buying food, paying for the heat, or figuring out how they are going to pay for transportation.

This is not a discussion that seniors should be having in a country like Canada. In the numerous town halls I have held on seniors issues in the riding, seniors say that what they really want to see is a national pharmacare program. These seniors were very clear that affordable medication would be a real change for them and would make a real difference.

There was also a clear demand for a national seniors strategy. I can see why. Nationally, we know what is happening. There is a Broadbent Institute study and analysis of the economic circumstances of Canadian seniors, and it tells us a startling story. The study found that 47% of Canadians aged 55 to 64 are without an employer pension plan. It also found that roughly half of Canadians aged 55 to 64 are without a workplace pension and have less than $3,000 saved for retirement. The poverty rate of seniors has increased from a low point of 3.9% in 1995 to 11.1% in 2013, or to one in nine seniors.

One of the particular privileges of being a member of Parliament is that we get to speak to and be in our communities. I was heartbroken when one person who had worked with the homeless population for over 30 years made time to come to see me to tell me that in the last three years he had seen a startling change. For the first time, seniors were walking through the door, telling him stories of being at risk of homelessness. Seniors, people in their 70s, were couch-surfing.

How can that be in Canada? How can it be that seniors are now seeing homelessness as one of the options they have to face at a time when we should be taking care of them?

In my riding of North Island—Powell River, we are seeing these issues increase. For example, in Campbell River, where the overall population is projected to increase by about 16.3% by the year 2030, the population of people 75 years and older at the same time is expected to increase by 128%. In the Comox Valley, where seniors 80 years and older are currently 4.7% of the total population, there will be an increase to 7.4% by 2031. Most startling, in the regional district of Mount Waddington, the overall population is expected to decrease by 9.8% by 2030, while the population of seniors 75 years and older is expected to grow by 263%.

Powell River, with 23% of its population aged 65 and older, has the ninth-largest population of seniors out of 10 locations across Canada. The issues of seniors in my riding are real and growing.

This bill is a start for my child, but it is not a solution for the people I serve. We know that only 11.5% of CPP recipients currently receive the maximum benefit, and for women it is only 4.5%. These numbers are telling us an important story why we need to see a CPP increase. As Susan Eng, the former executive vice-president of advocacy at CARP, said:

So why is a CPP increase needed again? Canadians are not saving enough for retirement and government can help. Those braying “Too bad for them!” need to realize that every pension dollar reduces the need for taxpayer-funded payments like Old Age Security, Guaranteed Income Supplements or even welfare.

The other reality is that young workers are facing a more precarious work environment than ever before. Many people are facing the reality of a patchwork approach to employment. Seasonal, part-time, and temporary work is precarious work, and people are putting these kinds of jobs together to try to support themselves and, in many cases, their family.

The reality is that only four out of 10 people have a workplace pension plan. I have had young families speak to me about the debate they are having whether to save for their children's education or for their own retirement. That is shameful in this country. The majority save for their children's education. They should not be having this debate.

Sadly, I also have constituents who have to go to the food bank weekly just to feed their family. They cannot afford food and have challenges paying for their housing and everyday costs. How will they put away money for retirement? A tax-free savings account will not make their life easier.

I spent many years in the non-profit sector. The people who work in that sector are tremendously passionate about the people and organizations and services they provide, but very few of them have workplace pensions. When we look at the return on investment we get from those non-profits, it seems the right thing to make sure that the people who work for them get a return on investment for their retirement.

Poverty is also not very good for business. In the world in which we live today, with so many financial challenges, there will continue to be challenges for many in the future, such as small businesses. People who have lower incomes spend money locally. This bill would mean less abject poverty in the future, and that would result in more local spending.

Bill C-26 is a start, but I still have many concerns. I want to know how the current government is going to address the erosion of workplace pensions in Canada. How will the current government address the increasing levels of poverty among seniors while we wait for these enhancements to take place? This bill would not address the 30% of single female seniors who are currently living in poverty. How do we lift them out of poverty now? Seniors deserve better. This is a step in the right direction, but it can be better. The people of Canada and the people of my riding deserve it.

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

Mr. Speaker, I appreciate the member's speech and her support for this bill. I agree there is always more that can be done, and I would like to give her this opportunity to tell us the following. In a perfect world, what would the perfect policy for seniors look like?

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, that is an important question. In response, I will just outline what was already in my speech.

What we need to do is to put forward a policy with a national framework around seniors. They are a growing population in our country and we need to make a plan. One of the realities is that we are not working with all of our partners provincially, territorially, and municipally. We need to get together and figure out how we are going to create these solutions.

These issues often arise most powerfully in municipalities and regional districts, and in towns and villages across our country. I am very impressed by what they do every day to make a difference, and I thank these communities for stepping up, but we need a national strategy in which all of the partners work together to make a difference for people who are suffering today.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Mr. Speaker, I would first like to congratulate my colleague on her very heartfelt speech about her community. It is obvious that those folks are lucky to have an MP who is so in tune with their primary concerns.

I do agree that this CPP enhancement is good news, but it is very troubling to know that, when you think about it, her son will be the one who could benefit from this change to the system. In my region of Longueuil—Saint-Hubert, the number of people on the wait list for affordable housing will soon top 2,000. The wait lists are extremely long.

Is my colleague really hopeful that this government will be willing to work on this issue in particular, given that housing is still the biggest single budget expense for most people, especially seniors?

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, I am always accused of being an optimist, and I think sometimes that is a positive life choice. I am hopeful. I am guardedly hopeful. This is the reality in the communities that we serve. Across this country, housing is a bigger and bigger challenge. Affordable housing is devastating.

I have talked in this context to many seniors who have to make terrible choices. Recently, I talked to a woman whose husband is in care, and 90% of his pension is going to pay for him to be in care. Her housing, her life, is totally at risk. She is only getting 10%, from a time when women stayed home for a longer period. We need to have that national strategy, so we can look at issues that are facing seniors and we can provide a rounded approach on how we move forward in the future.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, today we are talking about the CPP and the importance of investing for the future. The member made reference to a young person and how the benefit will be there, but she also put a great deal of emphasis on poverty, and seniors in poverty. Would she acknowledge that in the last budget we saw a substantial increase for the guaranteed income supplement? Well over 10,000 seniors in poverty will actually be lifted out of poverty. Would she acknowledge, when we deal with seniors' issues, that it is much more complex than just the one issue of the CPP? The CPP that we are debating today is one step forward, but we still need to improve where we can.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, I want to clarify that the young person I was speaking of was actually my son. His name is Kai. He just turned 16 in June, and he is six foot three. That is who we are talking about.

I am always appreciative of people listening and trying to help people out of poverty, but there are some parts that are left out. When we look at what is happening in my community, a largely resource-based economy, with many seniors and people retiring in a beautiful location, what we really need is a pharmacare strategy. I am glad that some of those steps are being made, but they are not the solutions that are long reaching. If we look at medication and what families are struggling with every day, we really need to have a solution that is based on making medication more affordable.

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

Mr. Speaker, I will be sharing my time with my colleague from Newmarket—Aurora.

The average age in my riding, Laurentides—Labelle, is among the highest in the country. According to the 2011 census, the average age was 49.5. It will surely be more than 50 according to the 2016 census. In some communities, homes are listed at less than $40,000 and are not even selling at that price. Young people are leaving the region in droves and seniors are only staying in retirement. We have many challenges and we welcome many changes for seniors. As a government and as a party, we like to plan for the long term and not just for tomorrow.

Therefore, I am very pleased to speak to Bill C-26, an act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act. There are several reasons for that.

This bill is the promise of a better future. It also reflects the government's commitment to help Canadians achieve their dream of a more secure retirement. This is a long-term project. It is a project for the future and for young people who are currently preparing to enter the labour force. This next generation will also be assured of a dignified retirement. We are acting for a future that goes beyond any election cycle to help those who will come after us.

We are building on what was accomplished by the decision-makers of the 1960s who created the Canada pension plan, enhanced old age security by creating the guaranteed income supplement, and implemented measures that, in the long-term, would significantly reduce poverty among seniors. What is more, we are here in a true spirit of federalism because the agreement to enhance the Canada pension plan or CPP comes from a real spirit of co-operation with the provinces, who approved the approach.

Is the enhancement of the CPP necessary? Absolutely. It is essential, and I will explain why.

Middle-class Canadians work hard, but they still do not feel as though they are making any progress. One in four families who are approaching the age of retirement may not be able to save enough money to maintain their current lifestyle when they retire. That represents 1.1 million families. We had to take action.

We also have to accept the fact that fewer and fewer companies are offering defined benefit pension plans and that fewer Canadians have such a plan. It is a major challenge for Canadian families and it is time we dealt with this.

The agreement we reached with the provinces will increase the retirement income of Canadians who are in this difficult situation, and also promote economic growth and create jobs.

How will the CPP expansion work? There are two key things to keep in mind.

First, the CPP currently replaces a quarter of Canadians’ average annual earnings. The new CPP will replace a third. Future retirees will therefore have more money in their pockets. Take Mila for example. She is a mother who has earned on average $50,000 a year during her working life. Under the current plan, she will get $12,000 when she retires. Under the new plan, Mila could get a little more than $16,000.

Second, the maximum level of pensionable earnings will go up 14% by 2025. That means the maximum annual CPP benefit, which is currently $13,110, would go up to $20,000 in today's dollars. Under the enhanced CPP, the maximum benefit will go up by almost 50%. It is clear that these changes to the CPP will make life better for retired Canadian workers and will help them achieve their goal of a strong, secure, and stable retirement.

How much will this cost? For most Canadians, the contribution rate will rise by just 1%. Take Kevin, for example, who earns about $55,000. His contributions will increase by $6 per month in 2019. Once the progressive implementation is complete in 2025, Kevin's contribution will have gone up by about $43 per month. That minor increase will be largely offset by his higher retirement income. With the enhancement, Kevin will collect approximately $17,500 per year in today's dollars in CPP benefits, which is about $4,400 more than under the current plan.

I should also mention that contributions to the enhanced portion of the CPP for wage earners like Kevin will be tax deductible and that a tax credit will continue to apply to employees' current CPP contributions.

We can therefore proudly say that Canadians will have more money in retirement thanks to the new CPP. Furthermore, the budgets of low-income workers will not be affected, because the working income tax benefit will also be increased to offset the premium increases.

I would like to add that our government has decided to give everyone time to prepare for the new provisions. The changes will be implemented gradually over seven years, from 2019 to 2025. This is the responsible way to go, to make sure that businesses and workers have time to adapt.

We are taking into account the problems that exist at the provincial and national levels. We have engaged with each province to discuss their particular situation, and we will continue to do so. We took steps to ensure that we could implement these measures in a way that will not hurt businesses, because we want the owners of businesses of all sizes to be assured that the government will implement these changes to CPP without harming the functioning of the Canadian economy.

As I said in my introduction, the government is creating a better future for Canadians, especially the middle class. This will have a much broader impact on all Canadians, because it is important to have a long-term vision. Higher CPP benefits will lead to greater domestic demand, which will stimulate the Canadian economy. Since savings will grow, more money will be available for investment, also thanks to the new CPP.

As a result, we expect the gross domestic product to increase by 0.05% to 0.09%, which represents approximately 6,000 to 11,000 new jobs. Quite simply, an enhanced CPP means more savings and a better retirement.

Middle-class Canadians will then be able to focus on what matters most, such as spending quality time with their family and friends, rather than worrying about not being able to make ends meet. It is important that we plan for the future.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I heard my colleague opposite talking about the average age of people in his riding and the relatively low household income.

Obviously, his riding is not made up exclusively of retirees, even though the people who live there will retire someday. His riding is also home to entrepreneurs.

What does my colleague have to say to those entrepreneurs who will have to contribute to the plan, along with the people they hire? There is the potential for job losses in his own riding.

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

Mr. Speaker, I am not worried about job losses. I am proud of increasing pensions for the future.

Planning for the future is an important strategy. It goes hand-in-hand with the enhancement of the guaranteed income supplement. It is part of a larger plan to improve the situation of seniors. If we did not make those plans 50 years ago, where would we be today?

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Mr. Speaker, I congratulate my colleague on his speech.

There is no question that everyone is happy that the government is moving in this direction and that it has made major financial plans over 50 years. We need to ensure that those plans remain viable in 50 years for the 16-year-olds who are about to begin working.

That being said, can my colleague talk to us about the vulnerability of seniors in his riding?

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

Mr. Speaker, there is no doubt that the seniors in my riding have a lot of concerns. I do not come from a wealthy riding. Even though Mont-Tremblant is located in the middle of my riding, there are 42 other towns that have less money, so everyone is concerned about improving the situation of seniors.

This will be the third program we improve, after making changes to two programs. If we had managed to get everything done, we could just walk out of here. However, there is still a lot of work to do, and I am not afraid to work to build a better future for our seniors.

[Ginette Petitpas Taylor, Liberal, Moncton—Riverview—Dieppe, NB]

Mr. Speaker, I would like to thank my colleague for his speech.

Could he tell us more about the personal benefits to Canadians of the increase in additional contributions to the Canada pension plan?

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

Mr. Speaker, this measure will definitely help people in the future by providing them with more money. It is an extremely important program for everyone's long-term future. I mentioned the figures in my speech. It is a significant increase, and that is not the only thing we could do.

[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.