Mr. Speaker, I, like the previous member, wonder why we are debating a motion like this when families are going bankrupt because of the agriculture crisis and when we have so many international problems with which we could be dealing.
I would like to put a different tone on this and talk about what we might do with the Canada pension plan as opposed to the motion itself.
We get kind of tired of the NDP's rhetoric that business is bad, Americans are bad, banks are bad, everybody is bad except them. It is interesting that it talks the line but basically it wants to share everybody else's wealth except for itself. It is sort of like the leader of that party coming for a free lunch every day when he has not even been elected to this place. The NDP members are on this gravy train and want the free lunch, which to me seems to be NDP philosophy.
They pride themselves on being the representatives who care about everything but let us look at their examples in B.C., in Saskatchewan and in Ontario for four years. Fortunately, however, Ontario was smart enough not to re-elect them ever again. It has been a disaster. I myself am a refugee from Saskatchewan. I graduated from university and got out under the wire at night to get away from that sort of socialist sharing of someone else's wealth by a party that has no concept of how to run a government or anything about it.
We have a culture of corruption going on across the way and one would think that would be what we would be talking about today.
CPP, as we all know, started in 1966. That was the period of time when all of us were told that government would take care of us from birth until death, that it would take care of everything: health care, pensions, jobs, funerals, everything. Much of society bought into that.
When the Canada pension plan was designed in 1966 we were told that the government would only have to collect about 5.5% of our income to take care of our pensions for the rest of our lives. The demographics of 1966 would have worked but in 1967 the two designers of the plan said that it would not work. They said that the government had made a mistake, that its calculations were wrong and that its modelling was wrong. They said that it had a demographic problem coming and that in 30 years this thing would go bankrupt.
Does anyone know what happened to those two economists? They were both fired. One of them now lives in Winnipeg and is quite willing to testify before the House and its committees at any time about what a horrible mistake the government made in the design of the Canada pension plan.
By 1988, exactly what the economists said would happen, happened and it was bankrupt. At that point we had to raise it over the next five years to 9.9%. In another 10 or 15 years, by 2015, we will have to raise it to 14.5% to make it sustainable. We are talking about taking 14.5% of every young person's salary and putting it into a pension for them many years down the road. The reason we have to do that is because of our demographics and because of all those seniors.
I put to the House that at that point in time young people will be saying “Whoa, we are not going to keep paying like this. If it is 14.5% now, where are you going and will there be anything there for us?” The whole question becomes whether there will be.
If we were to talk to businesses we would find out that they cannot afford to put in that kind of money and still hire staff. Ninety per cent of this country is run by small businesses. A small business cannot afford to put aside that much extra for payroll deductions so it just does not expand. It does not hire those extra people because it cannot afford those payroll deductions.
As a result, not only are our young people threatened with a 15% deduction but we threaten them with the potential of fewer and fewer jobs because businesses just cannot make it with those deductions.
It was interesting when I went out at about five in the morning to talk to about 150 oil guys who had just come off their rig. Their boss had set up coffee and donuts for them so they could listen to a politician for 15 minutes. I told them all that I knew they had just got paid and that I wanted them to look at the deductions on their pay stubs. I then asked them to ask themselves what they were receiving for each of the deductions.
I then asked them to stop at the CPP deduction so we could talk about it. Most of the men in the room were under 30 so I ask them if they thought the CPP would be there for them at 65. I also asked them if they were prepared to pay all that money. I told them that if they were to invest that money privately they could have a lot of money down the road in some 35 years from now.
Following up on that, I decided to take a trip to Chile and take a look at its pension plan. I started in Santiago and visited its bureaucracy which privatized, I think, in 1967 or 1968. It offered its people the option of a government run plan or a private plan. Everybody under 45 at that time opted for the private plan and everybody over 45 stayed on the government plan. That makes sense because obviously the people at 45 did not have time enough to invest and so they stayed on the government plan.
I spent three weeks looking at that but I do not have time to give all the details. However today over 90% of Chileans are on the private plan. The government plan still exists and is still administered and regulated by government but it is also a private plan.
It was compulsory that 10% of one's salary went into the pension plan. About six or seven years ago people were given the option of putting another 10% into the plan, which was 20% of their salary, and it was tax deductible. It was a way of saving money for retirement and the people themselves did it.
Under the plan they have plans A, B, C or D. It is set up by the government and each one contains a portfolio of investments. Plan A is very conservative. It is all of the blue chip stocks. Plan D is much more adventuresome and has a much greater chance of winning or losing. People choose either plan A, B, C or D and every three months they receive a statement.
I thought it sounded pretty good. I did a rather unscientific poll. I brought along a translator and decided to find out what people thought of their pension plan. I went to markets, to wealthy segments of Santiago, to a poor section and to a slum section. I told the people that I was a member of Parliament from Canada and that I wanted to know about their pension plan. They looked at me as if I were crazy but it was interesting to hear what they had to say. It did not matter their socio-economic position, people told me to wait a minute and ran into their houses. They came back out with their cards. I learned pretty quickly what the card was. It was their investment card. Every three months they received a statement showing that they had invested x number of dollars in shares under whichever category they had chosen and then it shows how their stock is doing. One guy told me that he bought his groceries at such and such a chain because he had those shares.
That has provided a $25 billion capital fund within the country that is invested in Chilean businesses and it prevents them from having to borrow money externally. It helps the country and the people. They are proud of it. They have a pension plan that is secure and it is theirs.
With the Canada pension plan we throw money into the well and it is for people who are retiring today. What about the young people sitting here? Where is their money going? Will it be there for them?
