Mr. Speaker, I too am pleased to be participating in this debate on Bill C-26, an act to amend the Canada pension plan, the Canada Pension Plan Investment Board Act, and the Income Tax Act.
First introduced in 1965, the legislation creating the Canada pension plan came into effect in 1966, and was created to ensure that all working Canadians have an opportunity to retire in dignity.
I understand that, as members of Parliament, we have a natural tendency to want to do more for the people we represent. We are tempted to use the incredible financial and regulatory power of the government to do more. With an activist government such as this, there is no problem too small or too complex to be fixed by intervention. We know the Liberal Party believes that the government knows better than Canadians. When we believe that government can and should do everything, there is never a need to say no to increased spending.
As the ancient Chinese philosopher Lao-Tzu said, “Govern a great nation as you would cook a small fish; do not overdo it.” The current government is overdoing it right now.
The reality is that Canada's retirement system is the envy of the world. Canadians are saving more for retirement today than ever before, and poverty among seniors has dropped significantly in recent years. In light of this, I have a few questions.
What should the fundamental role of government be in our country? What percentage of income should Canadians take home at the end of each pay period? Should Canadians be keeping more than 50% of their total income, as a matter of fairness, because they should be deciding how at least 50% of their earnings are spent? What do we believe about the role of government? Do we believe as a country that the individual financial choices that Canadians make are better or worse than those made by government? What percentage of our gross domestic product should be government spending?
According to the 2016 Index of Economic Freedom, government expenditures presently represent 40.7% of GDP in Canada. In comparison, Australia sits at 35.7% and the United States at 38.9%. Therefore, are we better off in Canada than Australia because more of our economy is put through Ottawa? It is obvious that the Liberal government thinks so. However, I certainly do not. To me, limiting government is extremely important, as it has been shown over and over again that once government gets involved in doing something new or doing more of something, competition and choices decrease, which inevitably is a negative for Canadians.
I am proud to be a member of a party that believes that, despite its best intentions, government does not know best. Government should not be forcing Canadians into making decisions that it thinks are best, yet this is exactly what Bill C-26 would do. This bill is about competing visions: a vision of what government can do versus what government should do. This bill is about Canada's finances, and more specifically, the finances of every single Canadian household and every single Canadian business, both big and small.
When government decides that every Canadian must save more, above all through the CPP and not through any other retirement program, and consequently increases premiums on employers and employees, two things happen: first, Canadians have less money in each paycheque to put into an alternative savings vehicle of their choosing; and second, because Canadians are putting more money into the CPP, they feel less inclined to contribute to other retirement savings plans.
As capital is being withdrawn from private sector investment plans, fewer of these would exist, as the demand for them would decrease because retirement contributions would be going to the CPP. This would create an endless feedback loop where increased government intervention would lead to Canadians saving less of their discretionary income for their retirement, which would then lead to government once again looking to top up the CPP through increased contributions, as we have seen in the past. This is an important point, and it is the main reason that I oppose the bill.
Make no mistake, the bill is not some gentle push that will achieve the Prime Minister's stated objectives. The bill would introduce a tax hike. It would be a tax hike because Canadians would not have a choice on whether to pay it. More money would be taken off every single paycheque until retirement. It would be a tax hike because Canadians would not have a choice on how their income would be spent.
The CPP is a mandatory contribution fund. Employees and employers do not have an option to voluntarily participate in the CPP, but are instead required by law to contribute. This distinguishes the CPP from the public pension plans of other countries, such as Britain. Their individuals can opt out of contributing to a central plan in favour other retirement income schemes.
Let us look at how the bill would affect Canadians. The bill would lead to some households paying up to $2,200 more per year. It would be harder for new graduates to pay off their student loans, as more of their income would be going into a pocket they would not be able to touch for 40 years; so rather than pay off the principal of their student loans as quickly as possible, graduates would have to either decide to spend less on day-to-day necessities or spread out the amount of time they take to pay back their student loans. Neither one of these is an appealing choice.
The bill would also make it harder for young people to buy that first home. Everybody who has purchased a house knows that in the first few years of repaying a mortgage, the lion's share of each payment is going to the interest and not the principal of the loan. The bill would reduce the discretionary income that Canadians have to pay down their mortgages more quickly. This would once again force Canadians into a choice: either spend less on items of necessity or take longer to pay down their mortgage. Once again, neither one is an appealing choice.
However, these are the types of choices Canadians would have to make going forward. They would have to make similar choices on whether to invest in a registered education plan, or whether to fly home and visit the family for Christmas, and it would be harder for companies to create jobs and give workers raises.
In conclusion, we know that the Liberal Party of Canada believes the government knows best and that it needs to be a perpetual helping hand to all. “Big Brother” seems hardly adequate to describe the interventionist Liberals' first year in office.
The Liberal government has decided that Canadians are not saving enough for their retirement. I think we can all agree that some folks are perhaps not saving enough, but there are other folks, as we heard in remarks today, who may be saving too much, and then there are folks who are probably saving just the right amount.
People also have vastly different retirement needs, depending on where they live and what their expectations are for their retirement. There are a number of options out there to encourage folks to save, even though a very popular one, the tax-free savings account, was just cut in half.
Getting people to more broadly use these voluntary programs is a good thing that the government should seriously consider. We owe it to our constituents to give them the option on how to save for their retirement. Unfortunately, the government has opted to go the other way.