Mr. Speaker, it is my great pleasure today to speak in favour of Bill C-301, which was introduced by my colleague and friend from Edmonton West. I would like to thank him for the work he has done on this bill and very important issue that affects millions of Canadian seniors.
At this time, I also want to thank my NDP colleagues who have indicated that they will support this legislation and send it to committee, so witnesses, financial experts, and, most of all, Canadian seniors, can weigh in on the merits of this legislation. As a good rule of thumb, any time that a bill introduced by a Conservative is adopted by an NDP and opposed by a Liberal, it must mean we are on the right track.
The issue of mandatory minimum withdrawals from registered retirement income funds has long been a thorn in the sides of Canadian seniors. Many seniors who have diligently saved for retirement and invested wisely are well within their right to ask that mandatory minimum withdrawals from their RRIFs be completely eliminated.
It was just a couple of weeks ago that I spoke in the House against the Liberal government's heavy-handed approach of forcing Canadians to put more of their own money into the government-controlled Canada pension plan. At that time, I spoke about how the Liberal government's approach, however well intentioned, was a direct blow to Canadians who prefer investing their own money into savings vehicles and want nothing to do with putting more of their disposable income into CPP.
It comes as no surprise that the Liberal government is opposing this legislation, and it was highly discouraging to read the Parliamentary Secretary to the Minister of Finance's speech, in which he dismissed the legislation outright. While the parliamentary secretary patted himself on the back for the recent changes to the Canada pension plan and old age security, my hon. colleague from Edmonton West was completely right to call out the erroneous information in his speech. The changes that the Liberal government has introduced will not help seniors today. Its recent legislation will not affect the vast majority of seniors currently living in Canada.
I support the legislation, Bill C-301, for three very important reasons. They are, one, that Canadian seniors should have complete and utter control regarding their own financial investments; two, the life expectancy of Canadians has increased dramatically since mandatory minimum withdrawals were introduced way back in 1978; and, three, financial markets are volatile and unpredictable. Seniors should be able to cash in on their investments when it is most advantageous for them.
Bill C-301 will have an immediate benefit by finally removing the archaic and outdated legislation that forces seniors to make mandatory withdrawals regardless of their own financial situation or the current state of financial markets. Far too often, governments, of all stripes, forget that the money invested in RRSPs or RRIFs is not their money. The money belongs to the hard-working Canadians who have earned it.
I firmly believe and have long advocated that the government has no business in forcing Canadians to divest themselves of their RRIFs. Canadians should be given the benefit of the doubt that they know what is best for their families. Millions of Canadians have financial investments, which range from mutual funds, stocks, and various other assets. Many folks have the assistance of financial advisors while, in some cases, they make their investments solely on their own. Financial literacy in our country has grown in recent decades. However, there is still much more to do.
In my recent speech regarding the Liberals heavy-handed approach to the Canada pension plan, I mentioned specifically how improving financial literacy rates should be at the forefront of every conversation regarding retirement savings. By empowering Canadians through education and innovative savings vehicles, such as the tax-free savings account, we can provide the tools needed so folks can retire with a high standard of living. Removing mandatory withdrawals from RRIFs is the logical next step to provide that much-needed flexibility.
When Canadians are asked if they want the mandatory minimums to be eliminated, the resounding answer is yes, they do. According to the Canadian Association of Retired Persons, 66% are calling for this elimination explicitly, and 78% say that offering retiree's complete control over their RRIFs is a more important goal than government recouping deferred taxes through mandatory withdrawals. I, for one, will stand up for Canadian seniors rather than giving this spend-happy Liberal government any more money. A dollar in the pockets of Canadian seniors will be far better spent on their priorities and needs than the Liberal finance minister could ever do.
In respect to the issue of the life expectancy of Canadians, people are living longer, healthier lives. This is just one more reason why this legislation needs to be enacted. If we do not pass it and make the necessary changes, there is a very real possibility that seniors will have completely depleted their retirement savings by age 91, only 20 years after converting their RRSPs into RRIFs.
Many of us in the House know very active seniors, who, by the grace of God, continue to live healthy into their 90s. As of right now, there are over 265,000 seniors living in Canada who have reached the wonderful age of 90 years old, and that number will only continue to grow in the years ahead.
Now to the issue of providing more flexibility for RRIFs, in many circumstances seniors continue to work part-time jobs for either financial reasons or because they are not ready to completely retire. Many seniors, who choose to work still, and do not need income out of their RRIF at that moment, should be given the option of foregoing mandatory withdrawals. Seniors are living longer and, in many cases, in their own homes, so it only makes sense to allow their RRIFs to increase in value until need those funds. If for some reason a senior has serious health concerns and needs to move into assisted living or needs home care, it can be a tremendous strain on one's savings. Rather than ushering seniors into care facilities, due to the high costs of living independently and the costs associated with home care or health care aides, removing mandatory minimum withdrawals for RRIFs might allow a senior to continue saving so they could afford those higher costs later in life. The longer an investment can accrue interest, the more money seniors will have in their pockets.
For my Liberal friends who are concerned about the government's foregoing the capital gains taxes, the government will collect more in taxes if the investment continues to grow even larger. Now the issue of capital gains taxes is a much larger battle for another day, but in this circumstance, the Liberals' concern about the government's not collecting its fair share of taxes is moot. The government will still be able to tax the profit of a RRIF when it is cashed out. This issue should not be about the government's worrying about the loss of revenues, but about providing seniors with the freedom to control their own financial investments.
Further to my last point about why mandatory minimum withdrawals should be eliminated, the stock market has been extremely volatile since the great recession. When the market crashed in 2008 and 2009, our previous Conservative government introduced a one-time 25% reduction in withdrawal rates. It was my desire that this be dealt with at the time, but alas it was not, and now due to this legislation, it provides all of us in the House an opportunity to finally repeal this injustice.
While previous Parliaments have tinkered around the edges and slightly adjusted the minimum withdrawal rates, it is up to us in this chamber to enact the necessary changes. Giving seniors the freedom to divest their savings on their own accord will remove the pain of selling assets that have seen extreme swings in the financial markets.
Due to low interest rates and the sluggish economy, investments are not growing nearly as fast as they once were. For example, on long-term Government of Canada bonds, the interest rate has fallen from 8.5% to 3.1%, which is not that good a return when calculating inflation.
I also believe we can completely eliminate the needless headaches caused by cashing in RRIFs on a yearly basis when determining GIS or OAS rates. If people want to withdraw their savings of their own free will, they should be able to do so and at least have the peace of mind that the government's antiquated rules are not to blame for any clawbacks. If the Liberal government is serious about helping seniors, they will vote in favour of this legislation. If they want to do something meaningful to provide immediate assistance, then let us pass this bill.
While the Liberal government has already clawed back people's tax-free savings accounts, which has diminished seniors' ability to save without paying capital gains taxes, the least it can do is to give seniors greater financial flexibility in retirement. While the era of burdensome regulations continues to thrive, I believe this very minor change could send a powerful message, that Canadians do not need to be told what to with their own financial investments.
In closing, I urge my Liberal colleagues to break ranks with cabinet and vote in favour of this legislation. Stand up for seniors; stand up for individual freedoms; stand up against excessive and outdated regulations; and most of all, stand up for your constituents and do what is right.