Mr. Speaker, for the first time in our history a whole generation of Canadians is unsure that it will be able to enjoy the same quality of life that their parents did.
Many Canadians worry that some of our most fundamental institutions and values, such as health care and the Canada pension plan, might not be there for them and their families when they need it.
Canadians know that they can no longer count on the federal government for everything. There was a time when they did, no matter which political party was there. We all know that. Everybody was looking for the government to take care of them, and the political parties were only too happy to promise everything. Canadians have every right to expect the federal government to set the right priorities and policies, and to chart the right course to achieve what they need for the future.
We need an innovative, realistic plan that sets new priorities for government as part of a long-term vision for our future. One of these priorities is security of retirement for all Canadians, and more especially, the restoration of the Canada pension plan.
Canadians are looking for leaders that are committed to maintaining the CPP as a central component of our social safety net. They want obligations of the CPP to be clearly defined. They want it to be put on a sound financial footing, and they want it to be managed efficiently now and in the future.
What is wrong with the CPP? For one thing, it is bordering on bankruptcy. The rapid aging of our population is one of the main reasons. I know that because they just have to take a look at my grey hair. My hon. friend across the way might have a little dye in his—I am not sure—but I think he is almost as grey as I am.
Today, for every person of retirement age there are five persons of working age. In 20 years, there will be one person of retirement age for every four persons of working age. When today's youth retire 40 years from now, that ratio will be just one to three. We have young pages sitting here. We want to make sure that they have a good retirement pension plan.
In 30 years, the average age of Canadians will be higher than the present average age of the population of Florida, with no corresponding adjustment in temperature.
A lower birth rate and increased life expectancy along with a sharp rise in disability claims also puts new stress on the CPP. The CPP has also been jeopardized by inadequate contribution levels and inefficient plan management as a consequence of faulty legislation.
CPP funds, for instance, have been lent to the provinces at the rate Ottawa pays on its 20-year bonds. This is less than what the provinces pay other bond holders. It is also less than what private sector plans earn. No wonder Canadians think the government cannot add.
The CPP must be changed now if it is to provide pensions in the future. Older Canadians have earned the right to a secure retirement. Middle class workers cannot afford to pay more, and I know that because I had a young mother come to me just last week. She came with her husband and said “It will cost us $700 more, Mrs. Wayne. We have two children. We are trying to save every month for their education. We don't want any handouts but we can't afford that $700 more”.
Younger Canadians want the CPP to be there when they need it, and they expect it to be flexible. They expect government to plan for the future in the same way Canadians plan for their future.
How are some proposing to preserve the CPP? The Liberal plan to fix the CPP is an $11 billion tax hike on working Canadians and employers over the next six years. This is coupled with already punitively high EI levels which the Minister of Finance has refused to lower, despite a substantially high fund surplus. Such a traumatic tax grab would have a devastating affect on job creation. This is an attack on the middle class taxpayers, families and small businesses.
The Reform's plan is even simpler. Just scrap it and replace the CPP with super RRSPs. That is even more scary when we remember that at its last convention the Reform Party advocated eliminating the RRSP plan. I do not know whether it has any plan at all?
Under the Reform Party's plan Canadians would be given recognition bonds to reflect the CPP credits they have already earned. This approach would leave young Canadians paying for the CPP benefits of their grandparents, for the recognition bonds due to their parents and for their own retirement savings. On top of all of that, it fails to provide any numbers as to how it will pay for its proposals. It reneges on a commitment to Canadians made by successive governments. It ignores the profound attachment that Canadians have for this social program in favour of an extreme ideological position.
Individuals also have to assume the risk of inflation in their investment decisions under the Reform Party's plan. The disability coverage now included in the CPP would be eliminated.
Both the Liberal Party and Reform Party solutions are shortsighted and self-defeating. The security, affordability and stability of the CPP are an integral part of the Progressive Conservative Party's plan to address the economic and social insecurity felt by so many Canadians.
We set out three key benchmarks to do so. Make the CPP self-financing, offset premium increases with tax cuts and encourage more RRSP savings. How would we meet these objectives? We would increase CPP contribution rates to levels adequate to ensure the long-term viability of the plan. However, these increased contributions would be offset by the substantial reductions of personal income tax rates and EI premiums. This means putting more money into the plan without asking Canadians to pick up the tab and without creating more threats to job creation. We would also make provisions to finance the extra cost per year of seniors benefits resulting from demographic change.
Canadians also need to know that never again will their pension funds be mismanaged the way they have been in the past. They deserve a greater return on their investment. To ensure this we would transfer all CPP funds to a separately managed Canada pension trust as is already done in Quebec. We would structure the Canada pension trust to be completely independent of the government of the day. We would select the Canada trustees on a non-partisan basis, recruiting experts in the financial business and actuarial community in consultation with the provinces.
The mandate of the Canada pension trust and its trustees would be to advise the government on required contribution levels and to select the best private managers acceptable to the industry to invest the funds growing surplus to secure long-term returns.
It is most important that we guarantee all our young people today, not just the ones who are sitting in the House, but those across the country that there will be a retirement plan, a Canada pension plan for them. It is up to each and every one of us in the House to make sure that this happens. Now it is our generation's turn to become nation builders. Part of that responsibility is to ensure that Canadians of all ages and all circumstances can count on a secure retirement.
I look forward to debating this issue in the future because this must take place.