Mr. Speaker, it is a pleasure to rise today and support BillC-26 at second reading.
We have heard quite a difference of opinion in the House on the advisability of this bill. Maybe we can start from a place that we do all agree with, that it does not serve the Canadian economy well and certainly does not serve Canadian seniors well to have people retire into poverty. Unless people are going to work their entire life until they drop, we project that there will be a period when they are not working for their income. That income has to come from somewhere, and if it is not coming from their going into work every morning, then it has to come from money they have saved on their own, or it is through a mechanism like the Canada pension plan, or from another kind of benefit if it is not from their working family members.
The kind of system projected by the Conservatives, when they talk about individual savings, is the one we once had when people who were past their working lives had to be supported by their family members. That was great for those who had family members who could support them, and it was very bad for those who did not. So the CPP was by far and away an improvement on that situation, through which people could manage to save for themselves throughout their working life. Things like the OAS and GIS are important in that regard too.
There is a need for income in retirement. We can all agree on that. The gold standard for that would be to have some kind of guaranteed annual income in retirement, I think it is fair to say. But given that we do not provide in that way, the Canada pension plan has been a great mechanism for working Canadians to make sure they do have at least a basic income when they retire. It was based on three pillars, that there would be a CPP there to provide about a third of what people might need in retirement; that their company pension plan would provide another third; and that their personal savings would provide the final third.
In Canada today, two of those pillars are in serious jeopardy. We know that almost seven out of 10 Canadians working today do not have a company pension, meaning that a third of that retirement income scheme is gone. We know that most working Canadians are struggling very hard to save. Many are living pay cheque to pay cheque, so they are not able to save to the extent they need to in order to be able to furnish a third of their retirement income once they are no longer working. That is why there is a need to enhance the first pillar, the public pension. It has to do more, in our view, to make up for the problems in realizing the potential of those other two pillars.
People may be approached by their financial adviser and told there are all these plans, but one plan has 40 million people in it, those being everyone in the country, and it is fully portable.
Particularly in this age, people are having a hard time finding a job that will last the 20, 25, 30, or 35 years necessary for them to be able to buy in sufficiently into a company pension plan, if there is one, to have it produce adequate income for them in retirement. Most Canadians are going to have seven or eight different employers in their working life if they are young now, and it is almost certainly the case that many of those employers will not have company pension plans. Even if they did, they would not have the same plan. CPP provides an important benefit with its full portability. That is an advantage of the plan.
Every working Canadian is in the plan. That is another advantage in spreading the risk. Furthermore, it has been proven to have some of the lowest administration fees and, therefore, it gets the best value for money for the contributors, who do not have to have their money shuffled off to those who are administering the plan.
It has the added advantage, when every working Canadian is in that plan and everyone who has worked is living off a portion of that plan, that it has a certain political backing. That also goes toward mitigating risk. We really are all in the CPP together in a way that we are not in any private pension plan, so Canadians can feel confident that their savings held with the CPP are less likely to fail than those in many of the private options that are out there.
It has another benefit that is even rarer today, even in the case of Canadians who do have private sector pension plans, in that it provides a defined benefit. That is very helpful when trying to project what income people will have in retirement and, therefore, how much they need to save to go above and beyond what their pension plan will provide, whether CPP or a combination of CPP and a private pension.
People who are in a defined contribution plan who do not know what that plan is going to produce once they do finally stop working will find it a lot harder to know exactly how much they have to save. That is another benefit of the Canada pension plan.
I do applaud the effort to raise the benefits of the CPP. I think there are a few things to say about that. One is that I really do doubt whether it is enough. In fact, I do not think it is. I would like to see the government go further in enhancing the Canada pension plan, because I do think it is a great option for most working Canadians, who are not making a lot of money, not just to save for their own retirement in a well-working, proven fund, but also to have their employer make a matching contribution to that.
Indeed, when we talk about Canadians taking charge of their own future and saving their own money through TFSAs, for instance, we do not talk about what is absent, namely employer contributions. That is another important aspect of the CPP.
I would like to see it further enhanced. This is a good first step. It is certainly not worth opposing simply because it is not ideal. However, I would like to see the government push harder for an bigger increase in the CPP. I think it is important.
We also know that this will not do anything for seniors right now. That is important to consider, because it will do a lot for young people over the course of their working lives, but not for seniors rights now. My children, who are three years old and four months old, are going to benefit from this. They will see that benefit. I am quite happy to do that for them. However, for people in my parent's generation who are just looking at retiring, other measures will be needed for them.
I do want to take a moment to address some of the arguments I have heard in the chamber today. The first is that somehow the Canada pension plan is a payroll tax. I simply do not agree with that. It may be true as a term of art in accounting terms, which may be where it is recorded on the ledger. However, for ordinary Canadians who are going into work every day and are working to put food on the table today and for that period in their life they look forward to when they will not go into work every day, the CPP contribution on the part of their employer is part of the wage package. That is part of what they are going into work for, as well. So I do take exception to those who continually refer to this as a tax. It is not a tax. It is part of the wage package.
It is up to Canadians to take charge of their own future and to decide how they are going to save for retirement. In that regard, a perfectly legitimate decision on their part is to decide to do that saving through the CPP, to do it collectively, to have a plan that is better than the options they get through the private sector, and to decide that we are in this together and to elect a government that will implement a mandatory public pension. That is a perfectly acceptable decision. That is something I take them to have done in the last election.
Again, I would like to see it go further. I think many Canadians would like to see this proposal go further. However, part of the decision that was made was also to reject the idea that somehow each Canadian is on their own individually, and that they have to make choices as individuals. I believe we can make a collective decision to enhance our public pension system and that it would be a good way for us all to save for our retirement, and to do it in a way that is fair to each Canadian.
When we talk about individual Canadians who are saving for their retirement and some of the options available to them, what is missing is that Canadians with more money have more options to invest. As people hit certain income thresholds, they can gain access to certain funds and other clubs that provide better returns. It is a fiction to say that all Canadians are equal when it comes to the private retirement investment market, and that we all have the same options. One of the things that the Canada pension plan recognizes is that we all need to be treated fairly. This is another reason to support the plan.