Mr. Speaker, it is an honour to rise in the House today to express my support for Bill C-26. I am speaking today because I believe Bill C-26 will benefit my constituents in Mission—Matsqui—Fraser Canyon.
As members know, a strong Canada pension plan was a core element of our government's bold plan to put people first and to help the middle class, because we understand that a strong economy starts with a strong middle class. That is precisely what we are doing by enhancing the Canada pension plan.
Middle-class Canadians in my riding are working harder than ever, and many are worried that they will not have set enough money aside for their retirement. The Department of Finance has examined whether families nearing retirement are adequately prepared for retirement. About one in four Canadian families approaching retirement, or about 1.1 million families, are at risk of not saving enough to maintain their current standard of living.
The risk is highest for middle-class families, families without workplace pension plans are at even greater risk of under-saving for retirement. A third of these families are at risk.
I spoke with many seniors in my riding during the last election who were concerned that they will not be able to afford basic costs before they receive their next guaranteed income supplement cheque. Our government has to address this by substantially increasing the GIS, and also honouring our campaign commitment to lower the age of retirement from 67 to 65.
However, they were more concerned about their families' futures. They wanted to know their grandchildren would have the same security going through life that they had. Hearing that on the doorsteps from residents of Mission—Matsqui—Fraser Canyon is why I support Bill C-26.
Younger Canadians across the country and in my riding, who tend to have higher debts than the previous generation and in most cases will live longer than the previous generations, face the challenge of securing adequate retirement savings at the time when fewer can expect to work in the jobs that will include a workplace pension plan.
We are aware of the need to help Canadians save more. Saving more will mean they are more confident about their future and about their ability to secure a dignified retirement.
I am proud to be able to say that we are delivering on our commitment to do just that. Working in close collaboration towards a common purpose with governments across Canada, we reached an agreement that will give Canadians a more generous public pension to help them retire with dignity. The goal of a stronger CPP is truly a high priority, which is shared by Canadians from coast to coast to coast, with 75% in favour of a strong public pension plan.
The challenge that government faced in drafting an enhanced CPP was that the current plan was not accumulating benefits quickly enough to meet the future needs of Canadians in the world where workplace pension coverage continues to decline.
The enhancement that the Canadian government agreed on would do two things to address this. First, it would boost the share of annual earnings received during retirement from one quarter to one third. For example, an individual making $50,000 a year in today's dollars over his or her working life would receive about $16,000 per year in retirement instead of the roughly $12,000 they receive today.
Second, the enhancement would increase, by 14%, the maximum income range covered by CPP. This means, once fully in place, the enhanced CPP would increase the maximum CPP retirement benefit by 50%.
In other words, the current maximum benefit of $13,110 in today's dollar terms would increase by nearly $7,000 under the enhanced CPP, bringing the maximum benefit up to almost $20,000.
The legislation also includes enrichment to the CPP disability and survivor benefits. For most Canadians these increased benefits would come from just a 1% increase in contribution rates. This enhancement is set to help young Canadians just entering the workforce the most. They would see the largest increase in benefits. This means that young people throughout my riding and across Canada would have a Canadian pension plan that fills the gap for those who do not have a workplace pension plan.
Having grandchildren myself, this is important for me, knowing that young people today will have a CPP that ensures their security when they grow older and eventually retire. We are also making sure to give individuals and their employers plenty of time to adjust to this modest increase, making sure it is small and gradual starting in 2019.
Today's legislation as agreed upon with the provinces and territories would ensure that low-income Canadians are not financially burdened as a result of their extra contributions. It would do this by enhancing the working income tax benefit to roughly offset incremental CPP contributions, leaving eligible low-income Canadians with little to no change in disposable income, while still securing a higher retirement income for them.
The enhanced CPP would simply build on the core existing CPP benefits, in a smart, carefully targeted, and effective way that reflects the extensive research that governments brought to the table in crafting this enhancement to the benefit of working Canadians. Taken together, it is a comprehensive package that would increase CPP benefits while striking an appropriate balance between short-term economic considerations and longer-term gains.
What does Bill C-26 mean for my constituents and Canadians across the country? Enhancing the CPP means first and foremost there would be more money from the CPP waiting for Canadians when they retire. This means they would be able to focus on the things that matter like spending time with their families rather than worrying about making ends meet. It means reducing the share of families at risk of not saving enough for retirement as well as reducing the degree to which Canadians are under-saving.
A stronger CPP is also the right tool at the right time to improve retirement income security of young workers. It is an opportunity for today's hard-working Canadians to give their children, grandchildren, and future generations a more secure retirement. Since I was elected last October, I have had the honour and great responsibility of representing my constituents in Ottawa. I have enjoyed time with young people in my riding, local schools, community groups, and other events. Their ability to save money for a secure and comfortable, dignified retirement is very important to me.
This enhancement of the CPP and this investment in Canadians would ensure future generations are secure in their retirement. This is why I will be voting for Bill C-26 and I encourage my colleagues from every party to do so as well.