House of Commons Hansard #117 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was retirement.

Topics

Canada Pension PlanGovernment Orders

11:20 a.m.

Liberal

The Speaker Liberal Geoff Regan

I declare the motion carried.

I wish to inform the House that because of the proceedings on the time allocation motion, government orders will be extended by 30 minutes.

The House resumed from November 28 consideration of Bill C-26, An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act, as reported (without amendment) from the committee; and of the motions in Group No. 1.

Report StageCanada Pension PlanGovernment Orders

11:20 a.m.

Burlington Ontario

Liberal

Karina Gould LiberalParliamentary Secretary to the Minister of International Development

Mr. Speaker, I am particularly pleased to speak to the enhancement of the Canada pension plan because, once again, the government is providing the middle class with a concrete solution to help it get ahead.

It is important to recognize that retirement levels have dropped in Canada in recent decades. In 1977, 43% of Canadians had a defined benefit pension plan. In 2012, only 27% of Canadians, or just over one-quarter, had this same type of pension plan.

If we look only at the private sector, that number drops to 11%, or just over one in 10 people. There is also another reality that we have to face: too few young Canadians are saving for their retirement, for all sorts of reasons. One in four families approaching retirement age, or 1.1 million families, might not be saving enough money to maintain their current lifestyle when they retire.

What is even more worrisome is the number of families without a workplace pension plan. One-third may not save enough for retirement.

The government cannot let Canadians live with such uncertainty. That is why we are taking action in concert with the provinces and territories. We must collectively ensure that all Canadians can retire with dignity.

Therefore, the issue is what the government, the provinces, and the territories have decided to do. We started with the fundamentals. We increased the amount of the pension benefit. When the new CPP goes into effect, the amount at retirement will represent one-third of pensionable earnings. At present, it represents one-quarter.

Take, for example, a mother who earns $50,000 a year. When she retires, she will collect approximately $16,000 every year under the new plan, instead of $12,000. Then, the maximum level of pensionable earnings, that is the earnings used to calculate the final amount of the pension, will go up by 14% by 2025. This means that the maximum annual CPP benefit, which is currently $13,110, would go up to $20,000 in today's dollars. Under the enhanced CPP, the maximum benefit will go up by almost 50%.

Another interesting thing about the Canada pension plan is that it is funded entirely by workers' contributions. For most Canadians, the contribution rate will go up by just 1%. In addition, employee contributions to the enhanced portion of the CPP will be tax deductible, while other CPP contributions will remain eligible for a tax credit.

There is a mechanism to compensate low-income workers for CPP contributions. They may be eligible for an enhanced working income tax benefit. Their retirement income will be higher, but their family's budget will not be affected by higher contributions.

The new plan will be phased in over seven years from 2019 to 2025. The government is giving workers and businesses time to prepare for the changes. Canadian families know that they can count on us to safeguard their quality of life and their future responsibly.

I should point out that the enhancement complements other vehicles already available to Canadians that enable them to pay less tax: registered pension plans or RPPs; registered retirement savings plans or RRSPs; pooled registered pension plans; and tax-free savings accounts.

I want to emphasize that the changes we are proposing today are not about ensuring the long-term survival of the Canada pension plan. According to the Chief Actuary of Canada, the plan is already safe for the next 75 years. The purpose of these changes is to encourage Canadians, especially young people and future generations of Canadians, to save more for retirement.

In closing, I want to summarize the main advantages of the enhanced CPP.

Once the enhanced CPP is fully implemented, the maximum benefit will have increased by nearly 50%.

The CPP provides secure and predictable benefits, which means that Canadians can worry less about exhausting their savings or having their savings affected by the vagaries of the market.

CPP benefits are fully indexed to the cost of living, which reduces the risk of inflation gradually eroding the purchasing power of retirement savings.

The enhanced CPP is adapted to the job market, because it helps close the gap resulting from the lower coverage offered by employer pension plans. In addition, it is portable, so to speak, and follows workers from one province to another, which promotes labour force mobility.

The CPP has millions of contributors, which is a crucial factor, because makes it possible for the Canada Pension Plan Investment Board to take advantage of economies of scale in order to generate healthy returns.

Future generations of Canadians can rest assured. They can be assured that, when they retire, the Canada pension plan will still have enough money to pay benefits. This means that they can focus on what matters to them, such as spending time with their families or enjoying their pastimes. Above all else, there is one thing that illustrates the enhancements of the CPP: Canada is at its best when all the governments work together. Today, members have a historic opportunity to raise the bar for future generations of Canadians when they retire. That is why we must support this bill.

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11:30 a.m.

NDP

Sheri Benson NDP Saskatoon West, SK

Madam Speaker, I want to thank my hon. colleague for her passion about pensions and the importance they play in the lives of people.

What does the member think about the fact that people with disabilities who live on disability income and women who choose to leave the workforce to raise children will not be granted the CPP enhancement that all other workers will? How does the member feel about the fact that we will be voting on a bill that in essence is sexist?

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11:30 a.m.

Liberal

Karina Gould Liberal Burlington, ON

Madam Speaker, I thank my hon. colleague for her shared commitment to those people who need greater pension security. It is incredibly important to recognize that with this bill, we would be helping thousands, if not millions, of Canadians achieve greater retirement security.

I have knocked on doors in my riding of Burlington. In fact, this past weekend I knocked on the door of an individual who, although retired, was unable to maintain her quality of life with just CPP and OAS. She talked about how important it was to ensure we made these enhancements.

I want to make it clear that all Canadians who contribute to CPP will receive this enhancement. The base, as the minister mentioned, will maintain that dropout period. It is important that the minister will raise this issue with his provincial counterparts when he meets with them, so we can not only ensure that the enhancement goes through, but that we continue to improve and ensure that Canadians have access to retirement security.

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11:30 a.m.

NDP

Scott Duvall NDP Hamilton Mountain, ON

Madam Speaker, I am curious about the enhancement. Could the member explain why the general dropout provision was included in the enhancement, but the enhancement for child rearing and people with disabilities was omitted? What was the reason for that? Why would the minister have to go back to try to get this back in when he could have done it right away?

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11:30 a.m.

Liberal

Karina Gould Liberal Burlington, ON

Madam Speaker, I would like to focus on why I am really excited about the CPP enhancement. It is really important for me, as a young Canadian, that we encourage young Canadians to save. I have spoken to many of my peers across Burlington and across the country who have told me that they are worried about their retirement because they are not likely going to have access to defined contribution pension plans.

It is incredibly important that we make this enhancement for future generations so that they will have the retirement security they need as they age and move into retirement.

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11:30 a.m.

Conservative

John Barlow Conservative Foothills, AB

Madam Speaker, the member talked about knocking on the door of a senior in her riding this past weekend. I wonder if she explained to that senior that she would not get any benefits from the CPP enhancement until 30 or 40 years down the road.

Has the government done any analytics of the economic impact of a CPP tax hike? Small business owners in my constituency of Foothills tell me that this will cost jobs. They are not going to be able to afford additional hires when a carbon tax and a CPP tax hike are added on. This will make it hard on employers to expand and grow.

Could my colleague tell me if there have been any studies or analyses done on the impact the CPP tax hike would have on jobs?

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11:35 a.m.

Liberal

Karina Gould Liberal Burlington, ON

Madam Speaker, of course research and analysis have been done.

The member's question gives me a great opportunity to mention that my mother is visiting today and is in the gallery. She is a small business owner—

Report StageCanada Pension PlanGovernment Orders

11:35 a.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

The parliamentary secretary knows that she cannot identify anyone who may or may not be in the audience.

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11:35 a.m.

Liberal

Karina Gould Liberal Burlington, ON

Madam Speaker, my mother is a small business owner and she has made it clear to me that she understands this is not a tax but a pension contribution and that it is important for Canadians all across Canada to make sure they have good retirement security. Many small business owners in my community have said the same thing.

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11:35 a.m.

Conservative

Ron Liepert Conservative Calgary Signal Hill, AB

Madam Speaker, I guess this is our last opportunity make the comments we want to make on this particular bill.

It is obvious, in listening to the government, that it is totally stone deaf to any of the suggestions that might be coming forward. However, that does not mean to say we should not keep trying. There is always a glimmer of hope that someone over there might be listening.

This particular bill, more than any other bill the government has brought forward, emphasizes the difference between Liberals and Conservatives. We have heard time and again from speakers on this side of the House that Liberals believe it is their job to ensure that they take care of people; and how they take care of people is by sticking their hand in their pockets, taking out more taxes, and building up a fund. Among the majority of people I talk to, young people, their first comment about the Canada pension plan is that they have doubts it will even be there when they need it.

I try my best to assure them that the Canada pension plan does have an investment board that is investing their dollars, I believe, wisely. Certainly, though, there is a greater risk with this enhanced portion of the Canada pension plan, because finance officials told us at the finance committee meeting that the enhanced plan has something like a four times or five times higher risk than the current plan, because it is predicated on a certain return on investment. The current plan is primarily funded by employer and employee contributions.

We have to rely on a continued strong investment by the Canada Pension Plan Investment Board for this to be sustainable down the road. I am confident that board is the right investment tool, but we have all seen what has happened in the past, relative to the economic downturns. It needs to be acknowledged that this is a much higher risk plan than the current plan that exists today.

Getting back to the basic differential of Conservatives and Liberals, during the past 10 years a number of initiatives were taken by the Conservative Party when it was in government to help Canadians save for the future. However, they were to help Canadians not force Canadians. The Conservative government brought forward a proposal to double the amount of money that one could put into a tax-free savings account. What was one of the first initiatives of the new socialist Liberal government? It was to roll that back.

The government also talked about allowing Canadians to voluntarily contribute into a Canada pension plan enhancement. That, again, has been tossed by the wayside.

The other thing that the government is failing to realize—and in fact I would say it is being disingenuous to young people—is that we have a hard-working, young, entrepreneurial, millennial population in this country who understand they need to save. The government continues to kind of paint them all with the same brush, saying that somehow people are not saving.

Young people I know are investing in ways that can ensure that their future retirement funds will be there. They do not want the government taking money out of their pockets, and then the government, through the Canada Pension Plan Investment Board, running that high risk of investing their money.

The government is standing up, and I heard it again from the previous speaker, and saying that young people cannot be trusted to save for the future. I am quoting what I think I just heard from the previous speaker: the government cannot let Canadians live in uncertainty.

We live in uncertainty every day. Comments like that are disingenuous to Canadians, to young Canadians, and these members who make those statements, frankly, should be ashamed of themselves.

I want to get back to the basic difference between Conservative views of the way Canada operates and the Liberal view.

We have heard an awful lot about small business. That particular member who just spoke may very well have been talking to some different small businesses in the greater Toronto area, but the businesses that came before the finance committee from across this country—whether it was the Canadian Federation of Independent Business, whether it was Canadian taxpayers, whether it was chambers of commerce, or whether it was small businesses as we travelled across the country listening to their concerns—are very concerned about this extra cost that is being added to their bottom line. That is not even taking into account such things as the carbon tax, which is going to be coming into effect right around the same time.

I know in the case of Alberta, we have a situation where the government is increasing the minimum wage to $15 by 2018. It is this piling-on effect that government does not seem to take into account for small business. It will readily admit that small business is the creator of jobs in this country. If the government were imposing a carbon tax, imposing higher taxes for Canada pension plan, and at the same time, honouring the commitment it made in the election campaign to reduce small business tax, then maybe we could think about supporting some of these initiatives. However, it reneged on the promise to cut the small business tax, and now, it is layering on tax increases.

I think the government will pay the price down the road because small businesses are not going to create the jobs. Again, it is government thinking by the Liberals that, somehow, government creates jobs. That will eventually do the government in.

I would like to summarize what we have been through over the past period of time.

We have had a finance minister who has brought in a budget that did not even come close to his leader's election campaign promise of a small deficit of $10 billion.

The Liberal election promise was also that within this mandate it would balance the budget. We have seen no signs of that.

In fact, my colleague who is the finance critic has asked the Minister of Finance at finance committee—I think it is up to 12 times now, including yesterday—when the budget will be balanced. The finance minister has no idea when the budget is going to be balanced. I think he is waiting for the next promise from the Prime Minster. There may be some help on the way. I wonder if we are not going to start to take some lessons from some foreign countries that were ruled by former dictators, because a lot of what I am seeing is the government starting to look like some of these foreign dictators, because we have not only these initiatives that are being pushed through relative to tax increases, but we also have a government that decides, if it cannot get its own way, to bring in closure. We have seen that again today. Is this the ninth or tenth time in a short sitting of the House of Commons that closure has been brought in?

We saw the Liberal members shutting down any debate at the finance committee. The NDP member for Hamilton Mountain attempted to get something on the table. He was unsuccessful because one of the members of the committee called for adjournment and, with the majority of the committee in favour, the committee adjourned. We had, I think, about 15 minutes to talk about this bill at committee stage. Now the government turns around and brings in closure.

I think the government has to take a strong, hard look at itself and ask what kind of government it is offering to Canadians. It keeps talking about looking after Canadians' future.

I think one of the things it should be looking after is the ability for all of us, as representatives of our constituents, to have the opportunity to make these comments in this assembly and try to ensure that, if something is not happening that we believe is in the best of interest of Canadians, we have the opportunity to express ourselves. The current government is taking it away from every one of the members in this assembly.

I will not support this legislation.

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11:45 a.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

Madam Speaker, I commend my colleague for his impassioned speech. He spoke about our side of the House not trusting our youth to save. It is not a case of trusting them or not; it is a case of whether they have the ability to save, given the climate that exists today.

If you come to my rural riding in eastern Ontario and—

Report StageCanada Pension PlanGovernment Orders

11:45 a.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

It is probably best not to use the word “you” as opposed to just addressing the Chair. Thank you.

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11:45 a.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

Thank you, Madam Speaker. I apologize to my colleague.

When I travel around my riding, I meet so many seniors who under the present system are living in poverty because that system does not support them. Today, given the precarious nature of employment, given the high level of student debt, and the high cost of living, there is an inability for individuals to save because they do not have the opportunity to be able to. They are just trying to make ends meet.

For the member across, is it not better to help them protect their future by investing in that future rather than just leaving it to chance that things are going to improve and they are going to have the ability to save?

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11:45 a.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

That question is through me, of course.

The hon. member for Calgary Signal Hill.

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11:45 a.m.

Conservative

Ron Liepert Conservative Calgary Signal Hill, AB

Madam Speaker, this is just typical Liberal speak, where we have to make sure we have everyone protected. I understand now why our Prime Minister likes some of the foreign leaders so much because we are moving toward that kind of a government.

I am 67 years old. I was fortunate enough to live in the generation that created the greatest wealth this country has ever seen. I have confidence in the generations that come behind us that they will do even better than we did. For the government to say that young people cannot or will not save for their future is disingenuous to our young millennials in this country today.

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11:45 a.m.

NDP

Cheryl Hardcastle NDP Windsor—Tecumseh, ON

Madam Speaker, I would like to thank my colleague for his comments and I think that they demonstrate that there is indeed no stalemate on the issue of debating the Canada pension plan enhancements, which has been portrayed today as a reason for time allocation. I was appalled to hear that at the committee level we apparently had only 15 minutes of debate about this. I am appalled. I know that the hon. member and I may not agree on the direction and the purpose of CPP, but I would like to hear about the issue. If we are going to discuss enhancements, was the member disconcerted that persons who are living on disability pensions until their regular pension kicks is a fairly regular situation? Was he at all concerned that people, especially women, who opted out of the workplace so that they could rear children for a period of time were left out and that this was not explored—

Report StageCanada Pension PlanGovernment Orders

11:50 a.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

The hon. member for Calgary Signal Hill.

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11:50 a.m.

Conservative

Ron Liepert Conservative Calgary Signal Hill, AB

Madam Speaker, I share the member's concerns about the government putting the boots to debate because that is exactly what did happen at the committee stage and it is happening here in the House as well.

The position of the Conservative Party in the official opposition is simply this. We do not agree with the bill and so we are not supporting any clause within it. That is our position because we believe there are better ways for people to save other than the government sticking its hand into the pockets of taxpayers and small business employers.

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11:50 a.m.

Burlington Ontario

Liberal

Karina Gould LiberalParliamentary Secretary to the Minister of International Development

Madam Speaker, I appreciate the member's speech and I appreciate that many millennials like to save. They want to, but I wonder what my hon. colleague would say to my peers who are between the ages of 25 and 35 today, who are making between $35,000 and $40,000 a year and just do not have that extra income to put away, and are worried because they do not have stable employment, they do not have a pension, and this is great way for them to make sure that they will have some retirement security moving forward.

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11:50 a.m.

Conservative

Ron Liepert Conservative Calgary Signal Hill, AB

Madam Speaker, no one knows about young people who are unemployed more than us as representatives of the city of Calgary, so I am not going to take any advice from someone from the Liberal side who has every opportunity to help some of these young people who are not employed, to create jobs in this country by doing some things that we have mentioned such as cutting the small business tax. If Liberals cut the small business tax as they promised in the election campaign, then businesses would create jobs, not the government and thereby people would be working and saving for their own future.

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11:50 a.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

Before we resume debate, I know there was some question about how I had pick the speakers. I want to remind the member for Dauphin—Swan River—Neepawa, in case he was not in the House when this occurred, this is an extract from Debates of November 3, 2016. The Deputy Speaker at the time said:

As Chair occupants, we recognize that the time for questions and comments is often the most valuable time for an exchange between members. In accordance with the procedures and practices, we will do our best to ensure that time is generally afforded to the members of the parties who are not associated with the member who has just spoken but not to the exclusion of that party....

That is the way we will do it. We will also be attentive to members who are particularly present during the day and paying attention to the debate to ensure that as many members as possible can participate....

It goes on. I just want to indicate that if there are a lot of people rising from the party that has not been making the speech, those people are being recognized first. If no one is getting up, we will of course recognize members from the party that has just made the speech.

If the member is not in agreement with that, I will certainly take that to the Deputy Speaker and the Speaker of the House.

Resuming debate, the hon. member for Surrey Centre.

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11:50 a.m.

Liberal

Randeep Sarai Liberal Surrey Centre, BC

Madam Speaker, the goal of a stronger Canada pension plan is truly a high priority that is shared by Canadians from coast to coast to coast, with 75% in favour of a stronger public pension plan. By making this priority a reality, we have the opportunity to demonstrate what Canadian federalism can accomplish when governments work together openly and constructively.

Helping Canadians achieve their goal of a safe, secure, and dignified retirement is a key part of the Government of Canada's plan to help the middle class and those working hard to join it. As part of this plan, the Government of Canada is committed to working with all provinces and territories to enhance the CPP to ensure that future generations of Canadians can count on a strong public pension plan in their retirement years. This is precisely what we are doing by enhancing the plan.

We know that middle-class Canadians are working harder then ever before, and many are worried that they will not have set aside enough money for their retirement. The Department of Finance has examined whether families nearing retirement are adequately prepared. About one in four Canadian families approaching retirement, or 1.1 million families, are at risk of not saving enough to maintain their current standard of living, and the risk is highest for middle-class and middle-income families. Families without workplace pension plans are at an even greater risk of under-saving for retirement. In fact, one-third of these families are at risk.

We are aware of the need to help Canadians save more. Saving more will mean that they are more confident about their future and about their ability to secure a dignified retirement.

There is a particular concern regarding younger Canadians who tend to have higher debt than in previous generations and who, in most cases, will live longer than in previous generations. They face the challenge of securing adequate retirement savings at a time when fewer expect to work in jobs that will include a workplace pension plan. Further, a prolonged period of low interest rates could mean that young workers will face lower returns on their retirement savings, which means that they may need to save even more than in the past.

I am proud to be able to say that we are delivering on our commitment to help Canadians save more for retirement. Working in close collaboration and towards a common purpose with governments across Canada, we reached a historic agreement that would give Canadians a more generous public pension to help them retire with dignity.

The challenge that governments faced in crafting an enhanced CPP was that the current plan was not accumulating benefits quickly enough to meet the future needs of Canadians in a world where workplace pension coverage continues to decline. The enhancement that the Canadian governments have agreed to does 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 roughly $12,000 a year today.

Second, the enhancements would increase by 14%, which is the maximum income range covered by the CPP. This means that, once fully in place, the enhanced CPP would increase the maximum CPP retirement benefit by about 50%. In other words, the current maximum of $13,110 would, in today's dollar terms, increase by nearly $7,000 under the enhanced CPP, bringing the maximum benefit up to almost $20,000. The legislation also includes enrichments to CPP disability and survivor benefits.

For most Canadians, these increased benefits would come from just a 1% increase in their contribution rates. We are also making sure to give individuals and their employers plenty of time to adjust to the modest increase, making sure that it is small and gradual, and it would start in 2019.

Our plan is also fiscally sound. The chief actuary released a report in late October that confirmed that the contribution and benefit levels proposed under the CPP enhancement, agreed by Canada's governments on June 20, would be sustainable for the long term, ensuring that Canadian workers could count on an even stronger, secure CPP for years to come.

What does Bill C-26 mean for Canadians? First and foremost, enhancing the CPP means there will be more money from the CPP waiting for Canadians when they retire. This means they will be able to focus on the things that matter, like spending time with their families, rather than worrying about how to make ends meet. It will mean a reduction in the share of families at risk of not saving enough for retirement, as well as a reduction in the degree to which Canadians are under-saving.

The Department of Finance has estimated that by supporting and ensuring royal assent of Bill C-26, parliamentarians would have the opportunity to reduce the share of families at risk of not having adequate retirement savings by one-quarter, from 24% to 18%, when taking into account income from the three pillars of the retirement income system and savings from other financial and non-financial assets. Therefore, the enhanced CPP builds on the core existing CPP benefits. It does so in a smart, carefully targeted, and effective way that reflects the extensive research that governments brought to the table in crafting this enhancement for the benefit of working Canadians. Taken together, it is a comprehensive package that will increase CPP benefits while striking an appropriate balance between short-term economic considerations and long-term gain.

I would encourage hon. members to support the timely passage of Bill C-26 through the House to help the government increase the confidence of Canadians in their future.

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Noon

Conservative

Harold Albrecht Conservative Kitchener—Conestoga, ON

Mr. Speaker, the one problem I am having is justifying the fact that even the finance department that the Liberal government looks to for advice is indicating that there will be a reduction in employment of 0.04% to 0.07%, or about 1,000 jobs per year over the next 10 years, for a loss of 10,000 jobs in total to the economy.

When we speak to our constituents, we often hear owners of small businesses say this tax will certainly have a negative impact on their ability to expand, with no opportunity to hire more people, and that in some cases it will lead to layoffs.

Could my colleague comment on the immediate negative impact this measure would have on jobs in Canada?