Mr. Speaker, I am pleased to get a chance to rise in the House today to debate one of the most important issues of our times: pensions.
It is unfortunate that the Prime Minister and I fundamentally disagree about what those pensions ought to look like. In fact, judging by recent polling of seniors, there are not many Canadians who believe that the Prime Minister is on the right track when it comes to the income security of Canadian retirees. No wonder he waited until he was on the other side of the Atlantic to announce, in Davos, Switzerland of all places, that he would be cutting big chunks out of Canada's old age security system. So much for accountability to Canadians.
Thankfully, Canadian pensioners are much more savvy than the Prime Minister gives them credit for. They are not frail and disengaged. On the contrary, when it comes to their income security, they are ready to fight for what is right. After all, they have worked hard all their lives, they have played by the rules, but now everywhere they turn, every bill they open, they pay more and get less.
It is a well known fact that increases in the cost of living hit seniors disproportionately harder than any other segment of the population. When Statistics Canada determines the annual cost of living upon which adjustments are based, its basket of goods include electronics like iPods, plasma TVs and computers, which are all goods coming down in price and reducing the cost of living figures. However, they are also goods that seniors are not buying. The items they spend money on are essentials like heat, hydro, food and shelter, all of which are outpacing their incomes.
It is no wonder that the vast majority of Canadians are deeply worried about not having enough money to live on after retirement. They are worried about the solvency of their private pensions and the adequacy of both CPP and public income supports. Let us talk about each of those for a bit.
Record job losses, the decline of entire industries and the collapse of larger employers are throwing hundreds of thousands of hard-working Canadians out of work. Far too many bankrupt employers are leaving underfunded pension plans in their wake. Through no fault of their own, workers are now finding that despite their years of making pension contributions, they can no longer count on a secure workplace pension.
However, workplace pensions are just part of the problem because only one-third of Canadian workers have a workplace pension. Similarly, only one-third of Canadians contribute to an RRSP and those who have just watched billions in precious savings vaporize in the stock market crash of this last recession.
The current system is leaving too many people without the retirement savings they need. There is too much at risk and not enough security. Let us face it, for more than a generation, wages have failed to keep pace with the cost of living and most Canadians have not been able to save what they need.
The urgent question before us today is this. What is the best way to help today's workers save enough money for tomorrow? The answer to that is clearly not to be found in the Prime Minister's speech in Davos.
In the past, Canadians came together during crisis to create solutions, to minimize risk by sharing it. That is what we did when we created public health care and, yes, that is what we did when we created public pensions. However, not under this Prime Minister. Instead of looking to opportunities to strengthen our pension system, he said that the demographic pressures from our aging population, “constitute a threat to the social programs and services that Canadians cherish”. Instead of securing our pension system to ensure sustainable prosperity for seniors, he announced that he would limit spending on pension programs.
While no one is quite clear on what exactly he meant, there is a widespread belief that the Conservatives will raise the minimum age at which people become eligible for full old age security payments, from 65 to 67. However, what is clear from the same speech is that we can afford to ensure that Canadian seniors live in the dignity to which they are entitled. As the Prime Minister correctly pointed out in Switzerland, Canada is no Greece.
Government debt levels as a percentage of gross domestic product are low. The federal deficit is being reduced ahead of schedule. There is no fiscal crisis in our country. Funding OAS takes the equivalent of 2.4% of the GDP. It is among the lowest of OECD countries. Italy, by contrast, spends 14% of GDP on public pensions.
True, by 2031, as the wave of baby boomers reaches retirement age peaks, the OAS' share of GDP will increase to 3.14%, an increase of 0.73% of GDP from today's level. However, as UBC economics professor Kevin Milligan points out, an increase of 0.73% cannot be ignored, but neither is it disastrous. When the baby boomer bulge starts to recede, as it will from about 2020 on, spending on the elderly will start to decelerate on its own.
Clearly this attack on the OAS is nothing more than an ideological assault on public pensions. So what do we get instead? Pooled registered pension plans, the enabling legislation for which is before us in the House today.
Ostensibly designed to address the fact that modest and middle income households are at risk of under-saving for retirement, the Conservatives want to work with the provinces to create an option of pooled workplace pensions administered by financial institutions.
In other words, the Conservatives are encouraging families to gamble even more of their retirement savings on failing stock markets. It is a voluntary defined contribution plan that is run by wealthy financial institutions investing in tumbling markets. That uncertainty and volatility leaves families without any guarantees that their savings will be there for them when they retire.
As one critic of the bill so aptly put it, we must conclude that this is an agreement to do nothing except perhaps a handout to the financial services industry at the expense of the average Canadian.
Let us face it, we do not need to reinvent the wheel when it comes to pension security. We do not need Bill C-25. The best way to help today's worker save enough money for tomorrow is through an improved Canada pension plan. Over the next several years we must lay the foundation to double CPP benefits for the future.
The CPP has been proven time and again to be a safe, secure and efficient retirement savings plan. As the Prime Minister himself noted, the CPP is “fully funded and actuarily sound”. It is portable from job to job and across provinces. It keeps up with inflation and 93% of Canadians are already members.
Because the CPP operates independently from government, there is no cost to taxpayers. In fact, there is the potential for governments to save money over time.
Higher and more secure pension savings means seniors will be less likely to rely on income supports like the guaranteed income supplement or provincial and local social supports for medicine, housing and food.
The cost to workers and employers is manageable. Over seven years, CPP premiums would only have to rise by 0.4% each year of pensionable earnings.
We all need to save more for retirement and putting that little extra into the CPP makes more sense than investing in risky RRSPs, pooled or otherwise. It is safer, easier, in fact it is effortless, and it earns more.
It is time for the government to come clean. The Conservatives found $9 billion for prisons. They found $30 billion for fighter jets. They found $6 billion for more corporate tax cuts. However, they say they cannot find the money to protect the pensions of Canadian seniors.
Clearly this is not about money; it is about choices. I choose to invest in people. I choose to stand up for Canadian seniors and for retirement with dignity and respect.
