Debates of Oct. 24th, 2016

Canada Pension Plan

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

Mr. Speaker, I would like my colleague to tell us what he thinks will be the impact of this new tax on businesses, especially small businesses. I will say once more that I am a business person. I know that it is going to have a serious impact on me and, unfortunately, I have no say in it.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, for one thing, these changes will not benefit businesses. They will have to contribute more, but CEOs, company owners, and entrepreneurs will not be able to collect more in retirement. For businesses, there is no upside to the contribution.

Unfortunately, this measure will force some companies to implement hiring freezes, pay cuts, or, in worst-case scenarios, layoffs. That is what will happen. Businesses do not get money for nothing. They have to earn it by working.

Also, there is only so much money to go around. If the government imposes another tax, that will reduce the amount of money available to pay wages and hire Canadians. That will be the fallout of this tax hike.

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

Mr. Speaker, it was not that long ago that Canadians found out that the age at which we could retire and qualify for CPP had been changed unilaterally by a prime minister speaking to us from a great height in Davos.

I am looking forward to seeing improvements to the CPP, but I know they are not enough.

I have one of the ridings with the highest proportion of seniors of any riding in this country. I hear from my constituents that they do, on a daily basis, make choices on whether they can afford their medications, which they do, particularly for ailing partners. Quite commonly, elderly Canadians are spouses of elderly Canadians with inadequate care for dementia. At the same time, I have many constituents who know that even though their partner served in the Canadian Armed Forces, because they remarried after the age of 60, they will get no pension.

There are real concerns in the lives of seniors. I think this is one opportunity to improve that circumstance.

I would ask the hon. member why his government did not do more to address these issues.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, as I just finished saying, our government did plenty. We saw a record decline in poverty, including seniors' poverty, during the leadership of our prime minister. In fact, it was the biggest decline, on record, of any prime minister. There was a bigger decline in poverty under Stephen Harper than there had been under the previous seven prime ministers combined.

My question is why she does not do more. She has been a great advocate of these schemes that take money from poor, low-income seniors and give it to wealthy insiders, like the Green Energy Act in Ontario, which the Auditor General of that province said took $47 billion in overpayments to well-connected, multi-millionaire insiders, including one who is a former president of the Liberal Party, and that drove up electricity costs, particularly hammering the poor and seniors on fixed incomes.

I have literally had people come into my office saying, “I have no idea how I'm going to pay my energy bill, because my electricity bill keeps skyrocketing and my income does not”.

Those kinds of policies, which have favoured the rich, have favoured the well-connected, and have favoured the insiders, have come from people like that member for the Green Party, who has supported them. It is outright hypocrisy that they continue to stand in their places and claim that they are so concerned about the well-being of the poor, when they are robbing low-income families blind to give to the most well-connected and undeserving millionaires in Canada.

[The Deputy Speaker, Bruce Stanton]

Is the hon. member for Saanich—Gulf Islands rising on a point of order?

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

I rise on a question of privilege.

I cannot help it if other levels of government use the word “green”. We can check, but the Green Party of Ontario did not support those policies, and I personally—

[The Deputy Speaker, Bruce Stanton]

I take the hon. member's intervention. However, it is not a question of privilege. It is probably a matter of debate. From time to time the member will have the opportunity to weigh in on those points.

Before we resume debate, I wish to inform the House that five hours have passed since the beginning of the first round of speeches on this matter. As a result, speeches will now be limited to 10 minutes and questions and comments to five minutes.

Resuming debate. The hon. member for Central Okanagan—Similkameen—Nicola.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, I am pleased to contribute to the debate today on Bill C-26, often referred to as “big CPP” by the many Canadian small business owners who abhor yet another payroll tax being imposed on them by the Liberal government. As a former small business owner, I can speak first-hand of the many reasons I strongly oppose this legislation.

Let us be honest that no matter how we slice or dice it, this legislation would increase the cost to an employer of hiring a worker. It would also increase the cost to employers of the workers they already employ. Let us also be honest and recognize that job numbers coming from Statistics Canada are not encouraging. Likewise, we know that projections from the Bank of Canada are being lowered for economic growth at the same time the Liberal government is imposing a top-down national carbon tax that will drive costs up on employers and small business owners alike. Likewise, we know that the Liberal government has also reneged on its promised small business tax cut.

Let me recap. In a relatively short period of time, small business owners in Canada have had the costs of their existing workers increased by the Liberal government. The government has also increased the cost of hiring new workers. It will be increasing their operating expenses as a result of a national carbon tax, and it has not followed through on its commitment to business tax cuts. It has done all of this at the same time that job numbers are looking bleak and our economic growth is being downgraded.

This may sound like a bleak picture, but the reality is that everything I have just stated is factually accurate and true. It is no wonder that investment has also declined. It is also no wonder that the Canadian Federation of Independent Business strongly opposes this additional payroll tax. It is no wonder that close to 20,000 of the federation's supporters signed a petition opposing these Liberal-imposed increase in costs in general. We must keep in mind that many Canadian small business owners now compete with other small business owners in the United States, where there is no national carbon tax and where the government is not drastically increasing the costs of small business owners.

The Prime Minister looks down on small business owners. He has stated directly that “a large percentage of small businesses are actually just ways for wealthier Canadians to save on their taxes”. As a former small business owner, I can tell the House that this comment by the Prime Minister is, to put it into parliamentary terms, a foul smelling, crusty batch of nature.

The reality is that small business owners are not wealthy Liberal elites and, by and large, these people do not pay $1,500 a plate for private access to the finance minister. The fact is that many small business owners from time to time struggle just to meet their payroll, and some even work a second job. Typically, they do not have the luxurious benefits of the public sector. I mention this final point because we should never forget that it is from the private sector that we take so that we can afford to have the public sector. An expanded CPP would take money out of the private sector.

I just heard an argument that this money would ultimately return to the economy when workers retire. However, let us not overlook the fact that not everyone lives to age 65. For them, their families, and their estates, an expanded CPP would do very little. Likewise, even for those who only live a few years beyond 65, that transportability of CPP to loved ones, kids as an example, would basically be negligible. People could pay these hugely increased costs their entire working career and potentially get very little to no benefit from them whatsoever.

However, that is okay for the big CPP pension board, because the cost to administer CPP has basically gone through the roof. As the national columnist Andrew Coyne has recently pointed out, staffing has increased at the CPP Investment Board from five in 1999 to around 1,200 today. Likewise, operating costs have gone from $3 million in 2000 to $803 million in 2015. External management fees have risen from $36 million in 2006 to $1.25 billion in 2015. These are just a few alarming indicators.

To be clear, I am not being partisan about this. These things have happened under both Liberal and Conservative governments alike. However, under a Liberal government obsessed with consultations and reviews, it is curious that this big CPP is being imposed on Canadians with zero consultation with groups like the Canadian Federation of Independent Business, and no review as to how administration and expenses are rising so dramatically for the CPP.

Of course, we have heard the finance minister and the Prime Minister tell us that Canadians are not saving enough for their retirement, which is why they believe having the government do it for them through this big CPP is the answer. When the Liberal government reversed the $10,000 annual maximum contribution to the tax-free savings account, it did so arguing that down the road they were worried Canadians were in fact saving too much.

Now here is the thing with the tax-free savings account. Unlike the CPP, with the tax-free savings accounts, those funds, lifetime savings I might add, are fully transportable. This means that one's kids, spouse, and family all benefit from one's lifetime of savings instead of having that money sucked into the growing administration of a big Canada pension plan. To be clear, a tax-free savings account did not penalize employers who are job creators. Therefore, in reality, we have a Liberal government that one day says it is worried Canadians are saving too much so we better cut back that tax-free savings account, and then a few days later it says that Canadians are not saving enough so we better bring in big CPP.

It is not unlike what the current government has recently done with new mortgage qualification rules. People in Summerland and West Kelowna, in my riding, have phoned me and emailed me and said that this makes home ownership a goal that has been stretched down the line. This is a sad thing, because people work hard. They want to succeed in life, and home ownership is one of the ways we can do that.

Let me be clear. A home is how one can build equity for retirement. If anything, the government should be focused on measures that increase the supply of housing to help increase affordability. More home owners mean more equity for those home owners down the road, and less need for an expensive payroll tax like big CPP.

One final point I would like to raise, going back to the government's argument that people are not saving enough and thus let us impose big CPP to do it for them, is whether it has ever occurred to the Liberals to ask why people are struggling to save. Well, I have an answer, and for a growing number of Canadians, the answer is too much taxation. Governments, at all levels, continue to add more and more taxation, leaving less take-home pay.

In the irony of ironies, the tax-free savings account which, let us not forget, is entirely funded by our net after-tax pay, has now been reduced by the Liberals. It is like the current Liberal government and the Prime Minister have created what I believe is a war on equity. At the same time, let us not forget that it is the same Liberal government that is adding massive amounts of new debt.

Yes, I know the finance minister loves to the use the term “investing”, but regardless of how we wordsmith it, that investing that has created this massive pile of new Liberal debt will down the road have to be paid. Each month we pay interest on our debt. In fact, the amount of the federal government interest on the debt we pay right now is close to what the Canada health transfer is to the provinces. While provinces all squabble for more health care transfers, we can all collectively look the other way, but that interest on debt is rising at alarming levels.

Therefore, down the road, we are going to see a problem, collectively. Either we are going to see more increases in taxes, reduced government services, or possibly a combination of both. That is maybe the real reason that the Liberal government supports big CPP, so that our future retired Canadians will have more capacity to absorb inevitable increased taxation as a result of today's Liberal debt being added to at near-record levels.

The bottom line is that I would like to ask all members in this place a simple question. Where exactly will small business owners get the money to pay for these dramatic increases in labour costs?

The reality is that for small business to stay in business, we all know that income has to exceed expenses. In a small business, one's income comes from one's customers. When one's costs rise without a corresponding increase in sales, one goes out of business. That is the message that the government is sending to small business owners across this great country.

I would ask all members in the House to listen to the objections of the CFIB and oppose this damaging measure that would harm employment. Those who are unemployed do not contribute to CPP because they draw down from EI and other government-funded programs. Now is not the time to be expanding big CPP, and that is why I strongly oppose the bill.

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

Mr. Speaker, I have a simple question. The member referred to housing as a very good source of investment for retirement, and he is not wrong. However, in Quebec, homes are owned by about 60% of the population, so 40% do not have that asset. To cash out on that asset, they have to cash out of the house, which means that they are either remortgaging it or selling it so that they then have nowhere to live but have a wonderful pile of money. TFSAs and RRSPs can only be contributed to if people have extra money to do so.

My question for the member is pretty simple. Does he believe the government has a role in helping people who do not have the money to invest themselves?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, it is a very simple premise. Let us say people are working and earning low incomes. We would be taking money away for their consumption today. Maybe they want to hire a math tutor for their sons or daughters, or maybe they want to invest in going back to school, those kinds of things that make us wealthier and smarter down the road. They cannot access those. In fact, they have put that money into the future, where there will be other benefit programs like old age security and the guaranteed income supplement, which track with inflation. They are going to have more money down the road, but they have less money right now. That really cuts off their ability to do other things, like I said, in education or investments in themselves.

I have heard from young families in Summerland who are being told they cannot qualify for the larger homes that they have been saving for. This has been tough on young Canadians who want to start families and want the same benefits that many of us here have had.

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

Mr. Speaker, I am hoping that the hon. member can assure me that he understands that in order to pay for the increased benefits to CPP, the increases will have to be phased in gradually over a number of years. The reason we are doing that, as he stated, is that home ownership is threatened. It is threatened by precarious work, which I believe is one of the reasons the CPP enhancement is timely for the younger generation that is experiencing the precarious work reality.

I am wondering if he can reassure us that he understands the phase-in for this CPP enhancement.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, the finance minister has talked about precarious work, so I am glad that we are also talking about it.

First, if people do not have jobs, they cannot contribute to CPP. I just confirmed that the parliamentary budget officer still projects that this year's budget, which was set by the government to raise 100,000 new jobs, will only raise 60,000. There are less small businesses willing to hire young people because of things like CPP and carbon taxes.

I would love to be able to say that we are able to take these small amounts over time, which would be the logical thing, but that is not what is happening. What happens if there is another recession in five years when these things start to kick in full bore? Will the government actually rescind those things or will it be ideological? We just do not know. We do not know what the future is. I do not believe this is the best way to go forward, but I appreciate the member's point.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Mr. Speaker, the one thing that both the member and I understand is small business. I was a small business owner myself. We are doing a study on poverty in the human resources committee, and we always expect a certain demographic to pay more, but there is a point at which that particular individual or business just cannot do it. Eventually something occurs and the inevitable happens.

The Conservative government proposed an 11%, 10% to 9% small business low corporate tax rate because those are job creators. The member spoke a bit about the negative potential of this, but what could possibly happen if small businesses are simply taxed too much?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Like I said earlier, Mr. Speaker, if they cannot sell to their customers at competitive prices, the customers will go elsewhere. Eventually, if they cannot find new customers willing to pay what their costs are, they will go out of business.

We talked about precarious work. What happens when it becomes too precarious for small businesses to employ young people? What happens when it becomes so precarious for larger corporations that they say the province or country they are in is no longer competitive? I am worried that there will be Canadian oil sands companies operating in Mexico and other jurisdictions rather than here in Canada. Why? We are not cost competitive and that is a shame.

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

Mr. Speaker, I am proud to rise to speak to this important issue today.

New Democrats were first to fight on behalf of an enhanced Canada pension plan in this century, launching a multi-faceted plan that would have ensured retirement security for Canadians back in 2009. While we are supporting the current level of enhancements, we nevertheless understand that for many retirees it will be inadequate. That is why we will continue to fight on behalf of all present and future retirees so that they can retire with the dignity we believe they deserve.

Canadian retirement income, and in particular enhancement to CPP, is one of the defining issues of a generation. Juxtaposed with the precarious work issue, we know Canadians are facing a retirement income crisis that must be addressed. The enhanced CPP would benefit a new generation of workers entering the workforce, but it would not alleviate the retirement income crisis of those who approach retirement.

An expansion of the CPP is the right way to modernize the retirement income system for the 21st century. The CPP is universal, providing pension benefits to all workers earning more than $3,500 throughout their working life. The pension benefits follow us from job to job and for periods of self-employment as well. These attributes are important, given that this is a generation of workers who are more likely to change jobs many times over their working lives and less likely to have a workplace pension plan. Add to the mix the proliferation of low-paying, precarious jobs, along with increasingly high student loans, and we begin to see that there is a real structural impediment to saving for retirement.

Given the urgency of this situation, it has always been difficult to listen with a straight face to the Conservatives declare that the CPP enhancement is a tax. A tax that pays us back later, is it? I do not think so. Like all real pensions, the CPP is a deferred wage. It is income that will be received later, and tax will be paid on that income later, by the way. It is disingenuous to continue referring to this enhancement to the CPP as if it were a negative, as if it did not matter that people would be in a better position to retire with financial security in the future.

Also, increasing the CPP now is a great way to diminish future reliance on the taxpayer-funded guaranteed income supplement, so this enhancement would actually be good for the taxpayer. Increasing CPP is largely a no-brainer as the plan performs very well and its administration costs are kept low. Low operating costs mean more of the money Canadians contribute through their CPP premiums gets invested, which means higher returns, which means more money for retirement incomes. The high administration fees charged by the retirement plans sold by the financial industry eat into future savings. In fact, an extra fee of 1% can cut into lifetime savings by as much as 25%. The typical fee charged for mutual funds in Canada, 2.3% for example, can slash returns in half.

The CPP was created to be a universal pension program, meaning it belongs to everyone. Everyone pays into it when he or she works and everyone gets a pension from the CPP when he or she retires, fair and simple. The CPP provides a lifetime benefit that maintains its value over time as it is indexed. There is no need for people to fear that they will outlive their retirement savings or that those savings will be reduced by inflation as they age.

Currently, the CPP covers earnings capped at $54,900. For earnings up to the cap, the CPP aims to replace about 25% of the income. Therefore, the maximum pension comes in at about $1,092 per month, or $13,100 per year. Contributions are 4.9% for each the employer and the employee up to the same cap. The expanded CPP would be a new and separate tier. This tier would be added on top of the existing CPP. The new CPP tier would do two things, phased in over the next years to 2025.

First, it would take the replacement rate up to 33.3% from the current 25%. Second, it would expand the upper earnings cap from today's $54,900 to $82,700.

To pay for the increase in benefits, contributions for employers and employees would increase. This increase would be phased in between 2019 and 2025. There would be two tiers for the increase between 2019 and 2025. For those earning less than the yearly pensionable maximum earnings, which is currently $54,900 and would be adjusted each year, it would increase slowly to rise to an additional 1%. Those workers and employers would then be paying at a rate of 5.95%, up from 4.95%. In real numbers, this would mean that a person whose rate was set at the maximum would pay an additional $43 a month, as would the employer.

The Liberals claim that the maximum benefit under the enhanced plan would rise by 50%. Well, this is creative mathematics, as they get that number by using a faulty comparison. In fact, the maximum benefit would rise by 33%. The maximum a person can receive is now $13,110. That number is based on the maximum earnings that can be used to determine benefits, which is $54,000. Under the new plan, that person will receive $18,117, and that is in 2016 dollars, or a 33% increase.

The high cost of housing and drugs, the looming issue of the clawback of the GIS, and the indexing of pensions come immediately to mind as areas we need to act on quickly. Canadians from coast to coast to coast agree.

We are witnessing and experiencing the untenable pressure our seniors must bear. More must be done, because all of our seniors deserve to live with dignity. We need immediate action to help those seniors and seniors on the cusp of retirement who will not benefit from these changes.

Let us build on the momentum of this agreement and take the next steps to improve long-term retirement security for today's workers. Social justice advocates, including the labour movement, have done a tremendous job in laying the groundwork for this agreement. I am so proud of the work they do in my riding to advance our social conscience.

It is in that vein that I raise a profound concern about how the enhanced CPP contributions will be managed and invested. The Canadian Pension Plan Investment Board must diligently examine its areas of investment, including resource extraction in developing countries. The Norwegian pension plan investment board, for example, withdrew from all such portfolios because of human rights concerns.

As Canadians, we need to stand up to cavalier attitudes that suggest that this is how business is done. We must begin to think of the human consequences of our activities around the world, and where businesses behave in a predatory and exploitative fashion, I believe we should withdraw our investments in those areas forthwith. Canada has a social responsibility for our seniors and a responsibility to ensure the corporate social responsibility of Canadian companies in other countries, as well.

In closing, I would like to say again that the proposed changes to the CPP are welcome. They are expected by Canadians who have high expectations of our government. However, they are also an inadequate response to the retirement plight of working Canadians. For a government that prides itself on legislation that is fact based, it must go back and examine the facts.

In a society such as Canada's, where retirement security is built on the premise that employer-provided workplace pensions perform a significant portion of retirement security, along with personal savings and public pensions, it should be clear that the present system is broken and will not be fixed by the changes to the Canada pension plan alone that are being debated here today.

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

Mr. Speaker, I think it is important to reinforce that what we are really debating today is a historical moment in which the provinces came together under strong federal leadership to agree to increase the CPP for the betterment of working people today.

I appreciate the comments by the member that we have to think that when people retire, they have a nest egg. I am very appreciative of the fact that New Democrats are supporting this particular piece of legislation.

Could the hon. member comment on another major aspect of the measures taken by the Prime Minister and this government, the significant increase in the guaranteed income supplement? Many single seniors will receive $900 more, lifting thousands of them out of poverty. Would she comment on that because the pension issue goes far beyond the CPP itself.

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

Mr. Speaker, I wholeheartedly agree with the member that CPP is just one part of a larger issue.

In terms of the GIS, I think this would be an opportune time for the government to ensure there will be no future clawbacks on the GIS when the CPP increases come in.

Let me go back to something the member described about the guaranteed income supplement. When we raise people out of poverty, let us picture it as a line. How far are we raising people out of poverty? How far do we raise them with GIS? Those same seniors are struggling to decide whether they should be paying a hydro bill or paying for medication.

We have lots of working seniors, the so-called healthy and lucky ones with workplace pensions, who are still struggling.

If we are serious about the structural change that needs to take place, the next thing to tackle for seniors is pharmacare.

[Ted Falk, Conservative, Provencher, MB]

Mr. Speaker, I appreciate the concern of the member for Windsor—Tecumseh for the economic welfare of folks who are retiring and to make sure they have adequate funds to retire with comfortably. However, she is wrong when she says an increased CPP is not an additional payroll tax. If something is being forced upon an employer to remit to the federal government on behalf of an employee, which is what this increased CPP will do, it is an additional tax legislated by the House and forced upon employers.

I know the member has a great appreciation for people's ability to retire comfortably, but at what point are we pushing the real job creator or our country, our small to medium-sized enterprises, too hard? At what point have they contributed enough?

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

Mr. Speaker, first I am very disconcerted to hear a respected member's alarmingly narrow definition of a tax, because this is not a tax.

I was raised in a small business family. I have a family that dutifully invested and was devastated during the recession. I also understand the regulatory environment we have today for garnishing wages. This CPP is exempt from that. Everything from student loans to GST to family support is garnished based on an individual's cash flow, what they are taking home, which is very important if people are to save for retirement.

In the hon. member's social circle it may not be an issue, but this is extremely relevant in my riding. Small businesses in my riding, the BIAs in Windsor—Tecumseh, have advocated and have talked about how they struggle, and about the stigma attached to their financial struggle when the narrative becomes, as I have heard over and over today from the other members, that they have made bad choices, that it is their fault. We cannot do that anymore.

We need a structural change, and the way to address it is to look intelligently and meaningfully at other changes that need to take place, but when it comes to the CPP, do not do a disservice to those same small businesses. Do not call it a tax.

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, thank you for the opportunity to speak to Bill C-26, the enhanced Canada pension plan that the government has introduced. While it might seem laudable that the government wants to improve the public pension that future generations may possibly collect, it is odd that it has chosen to increase the payments made by Canadians today so that potentially one-third of a person's retirement income 40 years from now will be provided for by the government.

This makes one question why the government feels compelled to increase pension benefits for future generations. By the current government's own actions today, through deficit financing, it will imperil the ability to save for the future because of the increases in taxes that its reckless deficit spending must entail. If we have to pay someone else's bills first, it is hard to save for ourselves. I have watched the government as it spends billions of taxpayer dollars today with little regard for where this money comes from, how it will be repaid, and what sort of damage this reckless spending will cause these very same retirees that the enhanced CPP is promising to help in the future.

By its own admission, the government wants to increase the monies it collects for workers today for the CPP because there is a belief that not enough Canadians have a pension plan at their work and/or that Canadians are not saving enough of their own resources for the future. Let us explore these beliefs.

Whether it is a defined benefits plan or a defined contribution plan, both of which are paid for by the employer and employee, nearly 50% of Canadian workers do not have an employer-provided pension plan at work. This may seem like a high number, and perhaps it is if we believe it is the obligation of the employer to provide a pension on top of a reasonable wage, vacation time, sick time, and a balanced work life—and the list goes on of what an employer ought to be responsible for. However, if nearly 50% of Canadian businesses are small businesses that employ between one and four people, it may seem a bit onerous on a small business to offer an additional pension plan to its one or four employees. Of these workers, 100% contribute to the CPP. Therefore, every worker in Canada does have a pension plan, yet some may have a much better plan than others. The argument that not enough Canadian workers have a pension plan at work is really an argument based on envy, that some have a better plan than others, and that it ought to be rectified by forcing small businesses to pay more for the future of their employees, some of whom may remain for one year and some for a lifetime.

I am confident that most Canadians agree that some form of a public pension plan is of benefit to society as a whole. I think the potential disagreement comes from just how much their pension should be worth, and by whom it should be run.

The math behind the enhanced CPP is based on raising the contribution rates and the ceiling at which those contribution rates apply to our public pension scheme to enhance the CPP of all Canadian workers. I am not certain this math is convincing. Current estimates show that the CPP at present provides a real rate of return of approximately 3.6% and that this will decrease to around 2.1% for those retiring in 2037, according to the Fraser Institute. Currently, the average Canadian worker contributes 4.9% of his or her income to the CPP. This will increase to 5.95% based on the proposed CPP enhancement. The employer provides the same contribution. This current total contribution is 9.9%, and will rise to 11.9% of one's earnings to a maximum amount. The average Canadian wage is $48,200. Therefore, an expected contribution of $4,800 per year is invested in a pension scheme for the average Canadian worker. At the age of 65, this same worker can expect to obtain a maximum pension from the CPP of approximately $1,000 per month. However, because that worker's average wage is less than the pensionable maximum, he or she will only receive approximately 75% of that amount.

Today, the average CPP payout in Canada is $642 per month. If this same worker earning the same average wage contributes his or her enhanced 5.95% CPP allotment into his or her retirement plan and earns the same rate of return of 3.6% for 45 years, the amount of time needed to obtain the maximum payout from CPP, he or she would be able to use these funds to pay his or herself the maximum amount of $1,000 per month for at least 40 years and still have money left over at the end of this time of approximately $220,000. If we add in the employer portion, then there is now an 11.9% contribution, and the maximum return is more than attainable.

We know that the return is not exact. The worker earning the average wage of $48,000 per year, who should be able to generate $1,000 per month return from their own 5.95% contribution over 45 years, now needs to factor in how the overall employee-employer contribution of nearly 12% will go to covering such things as administrative fees to manage the money, the maximum $3,500 tax credit for the contribution rebate, and the extra funds that go to those who earn less than the average industrial wage.

The argument that not enough Canadian workers have a pension plan at work is in fact not correct and speculative at best. If the CPP is in fact a pension plan, then it really comes down to how that pension plan is being administered.

The second item I would like to address is the belief that some Canadians are not saving enough on their own, so by taking extra funds from their paycheque for an enhanced CPP contribution each month, the government is going to be doing them a favour. If I have limited resources and the government takes more of my resources in order to obligate me to settle for something second-rate, then of course I am not going to be able to save as much of my limited resources since they have already been taken by the government.

The C.D. Howe Institute examined four pillars for sources of income for retirement in exploring why the government wanted to enhance the CPP. The first source is government transfers, such as OAS and GIS. The second is the CPP. The third is employment pensions. The fourth is other assets, such as real estate, financial assets, private business, life insurance, inheritances, and essentially, any asset not managed by the government. If the government is truly convinced that it is going to improve the lot of the middle class, then this fourth pillar needs to be paid more attention in a positive manner.

Unfortunately, the government has seen fit to, instead, meddle in this income source through reducing the tax-free savings account limit, trying to cool the housing market, failing to reduce small business taxes, imposing a carbon tax, and enhancing the CPP. This will unduly impact the overall burden on some business activity in Canada by increasing the contribution rate that employees, employers, and the self-employed will have to come up with to meet the government's solution to a problem that is beyond them.

Taking money from hard-working Canadians' paycheques will make it harder for families to save for such things as vacations, children's post-secondary education, and purchasing a home. Likewise, employers will have to choose between hiring that extra hand or requiring their employees to do more for less.

We know that sunny ways in Canada means that the government wants to manage all aspects of how we live as Canadians, from cradle to grave. We know that there is nothing the government does not want to poke its nose and legislation into.

The enhanced CPP proposal is simply another tax to address a problem that really is not a problem. If we look at how society functions and decide there are specific items that a government ought to be responsible for, such as promoting rule-based free trade, ensuring the security of our communities both internally and from activities abroad, or allowing for the free movement of goods and people internally in Canada, then determining how much someone receives in retirement or insinuating that one person's pension is better than another's, and that is somehow bad, seems to be the least of our concerns.

In conclusion, let me finish by quoting Hendrik Brakel of the Canadian Chamber of Commerce. On May 31, 2016, he stated:

...we’re worried a big tax increase is headed for the middle class like an elbow to the chest....This comes at the worst possible time—an economy reeling from weak commodity prices and slower consumer spending will be lucky to eke out growth of 1.5% next year. It’s difficult to stimulate the economy while pulling money out of the pockets of Canadians.

The government talks a big story and loves to use the catchphrase, “Helping the middle class and those who are struggling to join it”. Between the carbon tax and the CPP tax, that elbow to the middle class has bounced off the chest and is now a hit to the head.

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

Mr. Speaker, in listening to the speeches today about the CPP, it has become very obvious that everyone will understand why the Conservatives lost touch with Canadians. Canadians want to see a strong and healthy pension program, whether it is the GIS, the OAS, or the CPP. The Conservative Party still believes there is no room for improvement to the CPP, even though the provincial governments and many different stakeholders came to the table. Strong national leadership led to a historical agreement.

Why are the Conservatives are so out of touch with what Canadians and other provincial jurisdictions have called for at this time when we should be celebrating a historical agreement which will help so many retirees in the future?

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, the Liberals are so keen on studying everything and talking to everybody, but the people they have not talked to is the CFIB. The CFIB has indicated that 70% of small business owners disagree with that notion. Therefore, I do not know how the member can say that they have engaged with everyone when small business represents such a big, important factor of this economy and generates a significant amount of employment and jobs. By creating those jobs, we have more people contributing to the CPP.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I congratulate my colleague on an excellent speech. It is interesting to hear my colleague across the way talk about this apparently being a historical agreement. I do not think it is even a historic agreement.

The government has tried to bring together other levels of government in a government knows best approach. What we are hearing from ordinary Canadians, from business owners, is that they do not want to have to pay more in tax. They want to keep more of their own money. That is the approach that we advocated. Could the member talk about why we are better off by giving people the mechanisms to save for themselves?

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I thank the member for all the good work he has done.

Small business is the backbone of our country and small business includes our agricultural industry. Our farmers are out there working day in and day out. They have been fighting to succeed and get their products to the market. The Liberals put forward a carbon tax and now they want to put another tax on farmers. Farmers employ people and they will continue to pay the CPP for these individuals. There again, it is another tax that is being added to the farmers. How are they going to find the labourers and people to work for them?

[The Deputy Speaker, Bruce Stanton]

Before we go ahead with the next segment, I would remind the hon. member for Souris—Moose Mountain that there are two and a half minutes remaining in the time for him for questions and comments when the House next returns to debate on the question.