Debates of Nov. 29th, 2016

Canada Pension Plan

[Anthony Housefather, Liberal, Mount Royal, QC]

Madam Speaker, it is a pleasure to rise in the House to talk about the amendments the government is planning to make to the CPP. I call upon all my colleagues to consider all the debates we have heard on this issue over the last many days.

One of the things that strikes me the most in this debate is that we are failing to recognize the achievement of reaching an agreement with all nine provinces that have opted into the CPP. It is rare in Canada that we have provincial-federal agreement on an issue as broad and comprehensive as this in a way that has brought everyone together. This is one example of co-operative federalism that works.

Even my own province of Quebec has agreed to look at these changes and to incorporate them as best it can into the QPP. For me, this agreement, by itself, the nature of the Government of Canada talking to the provinces, is a success story.

What I have heard an awful lot of is that it is either this or that. I have heard people talk about this taking away people's obligations and their opportunities to save for themselves. I have heard from the other side the importance of government acting on behalf of people and protecting them.

In my view, we need to have a balance. People need to take responsibility for themselves. I agree that people should be contributing to RRSPs, and people should be contributing to TFSAs. I have been lucky enough to do that, but I also know that there are other people in the country who have not been lucky enough to be able to do that. Whether because of family obligations or the fact that their salary gives them just enough to survive on week to week, they have not been able to save for retirement. Does that mean they have no such responsibility? No, I do not agree with that. Everyone has a responsibility.

However, at the same time, all parties in the House have agreed that the Canada pension plan deserves to exist. If we agree that it deserves to exist, because we need to have a balance to protect people to a certain extent in retirement, we obviously then agree that at certain times in history, the Canada pension plan needs to be updated. I think the real debate I am hearing is whether this is one of those times that the Canada pension plan needs to be updated.

Some of the statistics I have looked at show that, on balance, among all the G20 countries, Canadian households seem to have the highest debt. The Canada pension plan covers a smaller percentage of retirement income than similar pension plans in other countries, including our neighbours, the United States.

The wage ceiling of the pension plan, at $54,900, is well below what the wage ceiling is in comparable pension plans. When I was the mayor of Cote St. Luc, for example, we noticed that the wage ceiling for our pension plan was one of the lowest on the island. We were at exactly the $54,000 level. We increased that to $82,000, because we recognized that since we had not adjusted the wage ceiling for decades, we were no longer allowing people to provide for themselves in retirement.

The increase from approximately one-quarter of one's earnings to one-third is a valuable improvement. I believe that there are facts in hand to justify the increase to the CPP at this time.

I want to tackle one issue I have heard as well in this debate. One of the things I have heard that is very interesting has been the argument that this is a payroll tax on employers and that it will inordinately impact small businesses. I do not see this as a payroll tax, because in the end, the amount employers are asked to give is going to the employees for their pensions. In a sense, it is saying that the employers are compelled to give the employees a salary increase, to some extent, because they are contributing more to the employees to protect them in old age, but I do not believe that it is actually a tax.

For the many years I was involved in private business, which was my entire career until I was elected to the House, my company never once looked at our obligations under the CPP to determine whether we would hire employees in Canada versus other countries. What we looked at was how easy it was to terminate an employee and the average cost of engaging an employee in this jurisdiction versus others, all things taken into consideration.

Canada was usually, if not always, a good choice based on the fact that we had relatively flexible regimes in place. I do not think this is going to change the idea of whether a Canadian employer is going to engage an employee.

I do think this will help a certain group of people in retirement. I agree with all that has been said. This is not a measure that will help current poor seniors. The increase to the GIS certainly will do that as will other measures the government has put in place. However, this regime change is for a long-term benefit. This will help those people in their 20s, 30s, and 40s today, not people who are today in their 70s, 80s, already retired, or on the verge of retirement.

A government needs to take into account comprehensive solutions to problems. This is simply one of them. However, if we do not act, and I will not invoke biblical references like my colleague from Winnipeg, when we can, we will face the same problem with the Canada pension plan years from now, when an increasing number of people will be entering retirement and falling into poverty because they have not adequately been able to save for their retirement.

As such, this change to the Canada pension plan is a good change.

I agree with my colleagues in the NDP that certain proposed amendments would be very important to look at going forward. I do not think the intent was to harm people who were outside of the workplace. I appreciate that my colleagues on the finance committee are working to encourage the minister. I know he has already announced his intention to work with the provinces to further change the CPP.

When we have an agreement on 90% of the points, I do not think a deal should fall because we then have disagreement on 10%. Let us get the 90% done, and then let us come back to the 10% afterward.

I support these measures. They are good changes to the CPP. I encourage all my colleagues to consider this philosophically. If we support the CPP and we agree that at certain times amendments should be made to the CPP, why not support the long-term benefits we are giving to the future generations by changing the CPP?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Madam Speaker, I thank my colleague for his speech in the House on Bill C-26.

Does he think that the government has a duty to ensure that our seniors, most of whom worked hard and paid taxes all their lives, have a well-deserved retirement and can live with dignity at the end of their career, once they are retired? As a government, we must not let our seniors live in poverty.

Does my colleague think that a strong, solid public pension plan will in fact ensure a good standard of living for our seniors once they are done working and are ready to just enjoy life after many years of hard work?

[Anthony Housefather, Liberal, Mount Royal, QC]

Madam Speaker, I thank my colleague from Sherbrooke for his question.

Yes, absolutely, an enhanced pension plan will help give our seniors a secure future. It is important to note that the government has already improved the guaranteed income supplement by 10% this year. In other words, poor seniors will have almost $1,000 more in their pockets. However, we need to do more.

As my colleague said, and as I said in my speech, the changes to the Canada pension plan will help future generations. We need to think of those generations when we make changes today.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Madam Speaker, in my riding of Saint John—Rothesay, people who come into my constituency office are very happy and proud that our government has the foresight to make changes to the Canada pension plan, adjustments that will help people save and will protect retirement savings in the future.

I am surprised that all the party opposite can offer is the tax-free savings account, and that this is a vehicle for savings for seniors. I challenge the party opposite to go to a priority neighbourhood and ask seniors how many of them are saving for the future through a tax-free savings account. The answer is really none.

The party opposite's answer was to actually double the tax-free savings account, double something that only 6.7% of Canadians actually maximized, which is mind-boggling to me.

People in my riding are very happy with the upcoming amendments to the CPP. What response is the member getting from constituents in his riding?

[Anthony Housefather, Liberal, Mount Royal, QC]

Madam Speaker, from what I am hearing, most residents in my riding, whatever their income level, are pleased with the proposed changes to the CPP. I note, however, that many residents in my riding are also happy with the TFSA. I personally make use of it. It is a good vehicle.

The question that was raised was whether the TFSA needed to be doubled. I agree that at this this point it did not need to be doubled because only 6.7% of Canadians were maximizing their use of it. However, that does not mean I do not also agree that the TFSA is a good vehicle and that people do have an obligation themselves to save for retirement.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Madam Speaker, I again thank my colleague.

I agree with what the member said about the tax-free savings accounts. It was certainly absurd to increase the contribution limit, given the numbers the hon. member just mentioned.

However, the Conservatives seem to think that this is a tax. Does my colleague see it that way as well? It is more of an ideological question, like the one I asked my colleague earlier.

I believe this is not a tax, but a retirement savings investment by the employer and the employee. This money does not disappear into government coffers, like a sales tax does, for example. We get this money back at retirement. This is an investment, not a tax like the GST.

[Anthony Housefather, Liberal, Mount Royal, QC]

Madam Speaker, I totally agree with my colleague from Sherbrooke. This is not a tax.

As I said in my speech, I see the employer's contribution as a sort of raise for the employee, since that money will go to the employee and not the Government of Canada.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Madam Speaker, I am extremely pleased to rise today to speak to our bill on the Canada pension plan.

I am from Nova Scotia and represent the riding of Sackville—Preston—Chezzetcook, which surrounds the two cities of Halifax and Dartmouth.

This is federalism at its best. I am shocked that the Conservatives are not on board with this important initiative. That was the problem with the last government. Over the last 10 years, there was no co-operation, no partnership, no collaboration of any kind between the provinces and the federal government.

I remember the former prime minister showing up in Newfoundland or in B.C. on a number of occasions, not even advising the premiers of those provinces that he was going to make an announcement. It was unbelievable.

This initiative is a clear indication of how strong our government is in working in collaboration with the provinces and territories. This was not an easy thing to do. This took a lot of hard-working individuals doing what was right for Canadians.

This is not a tax. This is an investment in Canadians. We should be proud of the fact that we are taking important steps toward ensuring that Canadians will be able to retire in dignity.

Let me talk about our youth. We have had experiences and opportunities that they will never have. Most people in here, including myself, have workplace pensions. Today, many businesses do not offer workplace pensions.

When I was young, a pension did not mean much to me because retirement was too far away. However, five or 10 years ago I started to think about whether I had invested enough money and would I have a pension that would allow me to do the things I would like to do when I retired. Young people today may not have the same opportunities. Over the last 10 years, the gap has continued to expand. Instead of pension funds increasing in value, they will probably be worth a lot less when our youth retire. That is even more important.

The United States has predicted a possible shortfall in its social welfare program if it does not invest. We are saying that we need to ensure that Canadians can retire in dignity. We need to ensure that our youth are able to put more money aside. This is an investment in their pension fund, which is extremely important.

This is not an investment where people need to put in everything in year one. This is a seven year process. Canadians will invest in the CPP gradually. What is the end product going to be? People on CPP today receive approximately $13,110 a year, and that amount depends on the salary they have received while working. With this new plan, they would receive approximately $20,000. That is close to a 50% increase, which is very impressive when we look at how it is going to be structured.

As my colleague said earlier, Quebec, which is not be a part of this plan, is looking at implementing some of the pieces of this government's plan, or possibly implementing it all at the end of the day. That is extremely positive.

Let me talk about the OAS. The former government said that Canadians are living longer, so it would not give them their pension at 65. It did not matter if they planned to retire then. No, they would have to work until they were 67; it would not give them their old age pension at 65. This government committed to returning to the retirement age of 65. We did that shortly after forming government, which shows how we were able to move quickly on our commitment.

Let us talk about CCB, the child care benefit. Throughout the campaign, that was the main issue I was hearing about, and I covered approximately 22,000 houses. Young families were out there struggling and needing support so they could provide for their families. That is an extremely important issue, and I was impressed because I asked young couples about the cost for young kids, whether they were struggling, and how we could help. They said that what we were proposing was exactly what they needed. It was to increase the child care benefit by an enormous amount and it would be tax free. That is what is important, tax free. That means they would not be taxed on the extra money they would receive from the government to help them as a family. That was a key point for young families.

The other piece that we have to keep in mind is seniors. When we talk about seniors, we brought forward also the 10% increase, which brings almost $1,000 to low-income seniors and single seniors. It is a multiple approach to ensure that we are helping the middle class. That is what it is all about, helping the middle class.

I could spend hours talking about infrastructure, which is one major strategy that will ensure job creation. We need to renovate, we need to improve what is out there, and we need to build, and the infrastructure investments are pieces. It is not just happening in one area. This is an investment that is taking place across Canada, in all parts, in all provinces.

When we put these pieces together, it becomes more and more obvious that we are a government that cares about its people. We are a government that cares about the middle class, youth, and seniors. We are a government that made commitments, and we are delivering on those commitments. I am extremely happy to support the government's CPP initiative.

[François Choquette, NDP, Drummond, QC]

Madam Speaker, as I have already said, every year we meet seniors who tell us that the pension plan is not very generous and that it must be enhanced. Therefore, the government's desire to enhance the CPP is good news.

However, the Liberal government has made some mistakes with its approach. One of them is not stressing the importance of keeping the dropout provisions. We currently have dropout provisions that ensure that years spent outside the labour market raising children do not count in the calculations. There are also dropout provisions for people with disabilities, who can no longer earn income when they are unable to work.

Why did my hon. colleague not support these requests? Why did he not work with his team so that we could keep these two dropout provisions, which are extremely important when trying to keep women, seniors and people with disabilities out of poverty?

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, I thank my colleague for his question.

This agreement was put together by the provinces, the territories and our government. It is not perfect. However, our minister has already indicated that he intends to raise this issue with the provinces and the territories at their next meeting, which is coming up. Our intention is to support Canadians in every way possible.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Madam Speaker, I thank my colleague for his speech, even though he spent half of it talking about other things. I have a hard time understanding why the Liberals think it is so urgent to pass Bill C-26.

They are saying that it is so urgent that we pass Bill C-26, that they had to move a time allocation motion. That is what the government did this morning. I did not support it. Nevertheless, there have been three or four Liberals who have spoken on the subject.

If Bill C-26 is so urgent, why do Liberal members keep rising to speak to it? I would like to know the reason for this double-talk.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Madam Speaker, I thank my colleague for his question.

It is important to remember that we want to tell Canadians about the CPP enhancement and how it will help them. It is our responsibility to speak and move things forward so that we can implement these measures. Our government made promises, and we must work to pass this bill. That is what we are doing.

[Ginette Petitpas Taylor, Liberal, Moncton—Riverview—Dieppe, NB]

Madam Speaker, I thank my hon. colleague for his speech. I would like him to elaborate on how Bill C-26 will help Canadians.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Madam Speaker, I thank my colleague for her question.

Obviously, this is an investment. Canadians will benefit from it for years to come. It is one of many extremely important social initiatives that our government has put in place to help Canadians. It is another part of our government's plan to ensure success in this area.

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, it is an absolute pleasure for me to be addressing the House on this issue of Bill C-26 on behalf of the residents of Davenport.

I love meeting with the residents of Davenport. I have, over the last few months and since I was elected, constantly met with them. The groups of people I most enjoy are seniors. They are not shy about letting me know what they are thinking, what they are worried about, whether for themselves or for their families. They always joke with me. They often say to me, “When is the Prime Minister of Canada going to give me a raise?” They talk to me about the increasing cost of prescription drugs. They talk to me about the increasing cost of everyday life. They also tell me that they are worried about their children. I also have spoken to many of the middle-class Canadians who work in my riding, and they tell me that their pension and saving for their pension is one of the things that most worry them.

That is where I am going to start, by just reminding us all of some of the facts.

We know that middle-class Canadians are working harder than ever and that many are worried that they will not have enough set aside for retirement. I have heard that time and again right across my riding, and I am sure that is a message that is heard right across this country in every riding. We know there has been extensive analysis conducted by our finance department and by provincial governments, and they have found that around one-quarter of families nearing retirement—some 1.1 million families—face a drop in their standard of living when they retire. This is absolutely something worrisome. We also know that, according to Statistics Canada, in 2014 only 37.9% of employees had a pension plan and that number was trending down.

We know from the Broadbent Institute, which put out a report earlier this year, that 47% of those aged between 55 and 64 have no accrued employer pension benefits, and the vast majority are retiring with inadequate savings for retirement. We also know from that same report that just 15% to 20% of middle-income Canadians retiring without an employer pension plan have saved anywhere near enough for their retirement. Therefore, we know that there is a huge worry. We see the statistics. We know that Canadians currently are not saving enough for their retirement, and we know that action needs to be taken.

There was a commitment from the Liberal Party in the last election that we were going to improve the Canada pension plan, and indeed that is what we are proposing. I am very proud that our Minister of Finance met with his provincial counterparts earlier this year, and in June came up with a way to enhance our Canada pension plan. I just want to say that it is not easy to be dealing with all the provinces. I note that the Ontario government had its own pension plan enhancement that it was planning to put into place. I know there were a number of other provinces that were further down the line in terms of what they wanted to do. I know this was a huge effort on the part of our Minister of Finance. It was a huge coming to the table by all parties, all finance ministers from all provinces right across the country. I just want to say that it was wonderful leadership and a wonderful show of co-operation right across this country to actually enhance the Canada pension plan and to really be thinking about the future of all Canadians in every province.

Next, I will take this opportunity to say what the enhancement of the Canada pension plan means and what changes are being proposed. I am going to be heavily using information from a wonderful CBC news article that I happened to be reading, because it makes it so easy to understand and I want to make sure I am explaining it in a way that makes it easy for people in my riding of Davenport and all Canadians to understand what we are proposing.

The first thing is that there would be an increase in premiums. The increase would be for both the worker and the employer. Under the proposed enhanced plan, the CPP would replace fully one-third of a person's pre-retirement income, up from the current 25% replacement rate, up to a maximum amount of earnings that would also rise quite a bit.

Currently, a worker and an employer contribute 4.9% of the worker's income to the plan. The proposed change would increase it by one percentage point. So, it would go up to 5.95%. It will be phased in over five years, beginning in 2019. By the time the higher premium is fully in place in 2024, a worker earning around $50,000 a year on average would pay roughly about $25 a month more in premiums, or almost $300 a year.

That is just an idea of what is going to happen to our premiums. There would also be a bit of an increase on the employer's side. We are working to try to better save for our future retirement.

What happens to benefits? How will Canadians benefit from this increase? What does this actually mean?

In plain terms, a middle-income Canadian entering the workforce and now earning around $50,000 a year would in the future receive a pension of around $16,000 a year in retirement, instead of what they would currently be receiving, which is around $12,000. That is according to Finance Canada.

I should note, though, that younger workers will be contributing at the higher rate for a longer period of time, the 5.95% I was talking about, but it is an investment in their future, as my colleagues have been saying, and they also stand to gain the most when they eventually reach retirement age.

I know that constituents in my riding of Davenport will be very sad that the current CPP enhancements will not be positively impacting them, but we do have a number of different programs we are putting into place that will be benefit them, moving forward.

There is one other thing I wanted to mention because I thought it was an interesting fact. There was some concern by a number of people that the increase in the CPP premiums would impact lower-income Canadians. As a result, the Minister of Finance and his provincial counterparts have agreed to an expansion of the existing refundable tax credit known as the working income tax benefit, to offset any higher premiums. The maximum payout for this program is currently $1,800 for a family earning less than $28,000 a year.

We want to make sure that we are protecting lower-income Canadians and so have been very thoughtful in trying to make sure that not only will this benefit future generations, including helping middle-class Canadians and youth to invest in their future and their retirements, but will also include protections for those on the lower end of the salary scale in Canada.

There has been a lot of concern about the impact on small business. I have a lot of those small businesses in my riding. I know they were very happy to hear that it would be implemented over five years. I think they appreciate that there would be enough time for them to be plan, organize, and arrange for the future. So while I believe there will be an impact, I think overall it would be beneficial to our businesses, to our workers, to our economy overall, and to Canadians in general.

In conclusion, I encourage everyone in the House to vote in favour of supporting Bill C-26. It would benefit youth, it would benefit families, and it would ensure that future generations would be more secure in their retirement.

[Alice Wong, Conservative, Richmond Centre, BC]

Madam Speaker, I just heard what the member opposite said and would like to correct her in many ways.

I have been consulting entrepreneurs across the nation. I have been consulting seniors in my own riding and across this nation. I have been speaking and listening to seniors for at least five to six years. This is not what they are telling us.

There is a misconception or misinformation. The Liberal government is trying to say it is good for seniors. No, not a single senior would benefit from the CPP hike.

Then there are the young people. I have talked to and listened to young workers. They do not want this because, after 40 years, they want their own money so they can decide where to put it for the best investment.

The Liberals are not doing anything good for seniors, they are not doing anything for the youth, and they are killing jobs.

My question is, how can you treat our small business people like that?

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I will remind the member to address the Chair and not use the word “you”. It will save a lot of headaches.

The hon. member for Davenport.

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, while seniors may not immediately benefit from this enhanced CPP, I will say that when I talk to seniors, they care about their grandkids, their children, and the future of their families. They love to hear about the Canada child benefit and that we are enhancing the Canada pension plan for their kids. They want their kids to be secure in their future retirements. It gives them great comfort to know that. Therefore, I know they see this as very positive.

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

Madam Speaker, I listened very carefully to the member for Davenport, whom I think made very persuasive arguments for this bill. She also said something very important in her response to the member for Richmond Centre, which I think is true, that seniors do care very much about the future of their families and that this is about guaranteeing security for everyone going forward.

That said, why have the Liberals been so tone deaf to the mistake in this bill to penalize women who drop out of the workforce to provide child care, or people with disabilities? How can we move forward with this without making sure that those provisions, which were in the original CPP, are maintained in this expansion?

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, in general, the changes to the CPP would be beneficial to all Canadians, women and men.

If there are additional enhancements that need to be made, I know there are ongoing discussions between the Minister of Finance and his provincial counterparts. I do not think this is going to be the last of any supports or changes that might be made to our pension system. I am sure we will continue to fill in any perceived gaps and make enhancements as we move forward.

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

Madam Speaker, I have asked this question of other Liberal members before and I do not know if I have had an answer to it, so I will ask the member as well.

She spoke specifically about youth. One of the advantages of private savings over public savings is that it allows people to invest, spend that money on interim projects, and then leverage those investments for the future. For example, I could l put money aside now, then use it for post-secondary education, and realize the value of that for a home or small business. The disadvantage of government-controlled savings is that people cannot invest in interim projects. Their money is taken away from them and held by the government until they retire.

Is that not one of the many obvious disadvantages, especially for youth who are trying to save for more than just their retirements but also many other, different things along the way? Is that not a disadvantage of the government's approach? Would we not be better off creating private savings vehicles that Conservatives have advocated as an alternative to this expansion?

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, it is important to have a balance of different approaches that would help youth save for their future. It is good for them to have private vehicles to invest in for their retirement, but it is also extraordinarily beneficial and absolutely necessary for government to help youth, middle-aged Canadians, and older Canadians to save for their retirements.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

It being 5:45 p.m., pursuant to order made earlier today, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the report stage of the bill now before the House.

Is the House ready for the question?

[Some hon. members]

Question.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

The question is on Motion No. 1. A vote on this motion also applies to Motions Nos. 2 to 69. Is it the pleasure of the House to adopt the motion?