Mr. Speaker, I am pleased to rise again to speak to Bill C-26 and the proposed changes to the CPP, as this is not only a very important issue to me personally, but also to my constituents and the very many business owners I have consulted across our country.
The government has failed to recognize the negative impacts this change would have on our economy. The CPP tax hike will take money from the paycheques of hard-working Canadians, put thousands of jobs at risk, and do nothing to help the seniors who need it.
Let me explain what is happening with regard to Bill C-26. The Liberals are encouraging misconceptions that these changes would help our seniors, our youth, and our businesses. This could not be further from the truth. I have heard from small business owners across Canada who have stated that changes to the CPP will mean that they will hire fewer people. They will opt to spread the workload across the current number of employees to offset the increased cost of payroll. When I hear from our job creators and community builders that further increases to payroll costs will mean they will hire fewer workers, it means we must listen. Our economy cannot afford to lose more jobs.
I met with young entrepreneurs in the summer soon after the proposed changes were announced. Already these young leaders saw what the payroll tax would do to their own incomes and employee paycheques. Our young people are struggling to pay off school debt and make ends meet. Reducing the amount of money they are receiving today will only magnify this problem.
We absolutely need to encourage our young people to invest, but let us equip them with long-lasting tools and knowledge that will empower them to save through many different means.
As I mentioned in one of the questions I asked in the House, a study by the Fraser Institute from May 2016 projected the real rate of return for CPP investors to be only 2.1%. It states, “Canadian workers retiring after 2036...can expect a real rate of return of 2.1 percent from the the CPP”. This means that the majority of our workforce contributing to the CPP is only making a real rate of return that is barely above inflation. To make matters worse, when they withdraw those CPP funds, they once again will have to pay income tax on them.
Finally, I would like to talk about Canadian seniors. My colleagues know that our seniors are very important to me. As the minister of seniors in the former government, I spent five years working with organizations, health care workers, and hearing from seniors themselves on actions the government needed to take to assist them.
One of the primary ways seniors have chosen to save and the option many have found most helpful is the tax-free savings account. Unfortunately, it has now become very clear that the Liberal government did not consult our seniors when they chose to scale back the TFSA. Now the Liberals claim to be assisting our seniors when the reality is that the proposed changes to the CPP will not provide a single cent to our current seniors.
One common argument for these changes is that they will assist some of our seniors in poverty. These changes will do nothing to reduce seniors' poverty.
In June, a writer of the Financial Post stated:
Whatever the reason might be to expand the CPP, it is not to eliminate poverty. The poverty rate among seniors is now as close to zero as we can get.
The writer goes on to explain that fewer than 5% of seniors who fall under the poverty line are those who either are not eligible for old age security or who have not applied for the guaranteed income supplement.
It is exactly for these reasons that when I was the minister for seniors in the Conservative government, I empowered the cities to look after homeless seniors and help them apply for OAS and GIS and to administer the funds for them so that these seniors would have food on their plates and roofs above their heads. With the Liberal government, this good policy has gone.
We know that the CPP is not a means to solve poverty, and we know that TFSAs help our seniors save. Why is the government choosing to do the exact opposite of what our seniors need?
Canada's retirement system is based on three pillars: first, the CPP; then the OAS or GIS; and finally, tax-assisted savings. It is important that each of these pillars is put to Canadians. When we place too much emphasis on one, the system becomes unbalanced and does not effectively serve those who need it.
Canadians are good at saving their money for retirement. McKinsey & Company state that 83% of Canadian households are on track for retirement savings, and the C.D. Howe Institute reports that savings rates have nearly doubled since 1990. What seniors need now is protection from financial abuse, an enhancement of their financial literacy, and the ability to live within their means. What they do not need is a carbon tax, which will increase their cost of living, including heating their homes, buying groceries, and meeting other basic needs.
Let me complete this debate with what I have heard from women entrepreneurs from coast to coast to coast. They want their significant others to be able to share the rewards of their hard work when they retire. A CPP increase will not help them do that. Putting their money into sound investments will.
Young people in Vancouver hope to save enough money to buy their first home. Taking home less money will never enable them to do that.
In summary, the proposed CPP will provide none of the solutions the Liberals claim it will. Instead, our job creators will be forced to hire fewer workers. Our young people will have a harder time paying down debt, and our seniors will continue to be left out of the equation.
I know that members on this side of the House will continue to fight for our job creators and evidence-based policy. I cannot say the same for the members opposite, and I will vote against Bill C-26.