Mr. Speaker, I am pleased to discuss the very important measures that are contained in Bill C-25, an act that is key to implementing the federal framework for the PRPP, the pooled registered pension plan. I can ensure personally that Canada's seniors will have the retirement that they deserve with the implementation of this kind of plan.
It is innovative. It is new. It is privately administered. It is low cost. It is an accessible pension option, and I highlight the word “option”, to help Canadians meet their retirement goals.
This is particularly significant for small and medium-size businesses like mine. I was in business for 35 years. I only wish there had been something like this for me to offer, not only to my family, but also to my employees. Certainly many of us would not be sitting in challenging situations today without options. The legislation would enable many owners and employees to have access to a large-scale, low cost private pension plan for the very first time.
By pooling the pension savings, PRPPs would offer Canadians greater purchasing power. Basically, Canadians would be able to buy in bulk, then they would have the opportunity to get a better bang for their buck. Achieving lower prices than would otherwise be available means that they would get greater returns on their savings. More money would be left in their pockets when they retired.
The design of these plans would also be straightforward, to allow for simple enrolment and management. Simplicity is always best.
Finally, they are intended to be largely harmonized from province to province, which would further lower administrative costs.
Automatic enrolment would encourage regular savings in PRPPs by making participation the default choice of employees who do not actively make a decision to opt out. In other words, a reverse onus would encourage more people to participate.
Canada's finance ministers, both provincial and federal, decided to proceed with this PRPP framework precisely because it was considered the most effective and the most appropriate way to target those modest- and middle-income families and individuals who may not be saving for retirement. It is an option available to people who have not been served before, in particular, those who currently do not have access to an employer-sponsored registered pension plan.
Certainly I never did; neither did my employees and many of the thousands of self-employed people in this country.
With the federal PRPP legislation introduced, provinces could easily and seamlessly use it as a model for their respective frameworks so that the system could get up and running. Really, it is not necessary to go into a full duplication of a bureaucratic maze to administer this. Once the provinces put in place their PRPP legislation, the legislative and regulatory frameworks for the PRPPs would be operational, thus allowing PRPP administrators to develop and offer plans to Canadians and their employees. This would be a very competitive process, thus driving the price down even more.
It is crucial that we continue to maintain this momentum for a stronger retirement system. The PRPP would not carry the system entirely on its own, but it certainly would go a long way toward dealing with people who have not been served.
I also want to take time today to discuss other actions our government is taking and has taken to secure Canadians' retirement income needs and to strengthen Canada's retirement income system.
One particular instrument which I think is very important, yet is not given its due consideration, is financial literacy. For example, this is an area where we are working to improve the retirement income outcomes.
A strong system depends upon the ability of its users to make informed decisions that are critical to its success. I was very pleased when the member sitting in front of me, the chair of the finance committee, put forward a private member's bill that strongly promoted financial literacy in this country. I think that bills like that serve Canadians well.
Federal, provincial and territorial governments are also continuing our work by reviewing options to improve the CPP. While the CPP is efficient, effective and well managed, there are serious considerations around imposing mandatory payroll deductions in the context of the fragile state of the global economy that have to be taken into account.
CPP is an option, but due to time constraints and the economic malaise, it is deemed by many, particularly our provinces, to not be the right decision at this time. As a matter of fact, it could even be harmful to our recovery.
As I made clear at the outset, changes to a system that is so interconnected with our economy must be considered with a great deal of care. A lot of thought has been put into this across the country. The minister of state has spent a couple of years travelling across this country literally meeting with every financial authority and provincial representative. Collectively, they have come up with the unanimous mindset that this is the way to move forward.
We must be mindful that any legislation must have a bottom line. Above all else, it must do no harm. I am confident that we are on solid ground there.
Canada's retirement income system has been recognized around the world as a model for reducing poverty among seniors and providing high levels of replacement income to retired workers. Be assured that our government will make the right policy decisions to ensure it stays that way.
We welcome ideas and considerations, particularly those that are not just driven by a parliamentary ideology that we sometimes find ourselves in, in rather disturbing circumstances in this House of Commons, but are driven by some really sharp, well intentioned and capable suggestions.
In recent years, our government has introduced measures to support a system with a proven record of success. This has included, as most people here would know, but I repeat this as I think it is important, a number of steps.
We have provided over $2 billion in additional annual targeted tax relief to seniors and to pensioners through measures such as pension income splitting. That is huge in a riding like mine. I have the second highest concentration of seniors in the province of Ontario, so I recognize the need for programs to allow them to have a disposable income. We increased the age credit amount. There was a doubling of the maximum amount of income eligible for the pension income credit. It included reforming the framework governing federally regulated pensions to better protect pensioners.
It also included working collaboratively with the provinces to modernize the CPP, making it more flexible for those transitioning out of the workforce to better reflect the way that Canadians live, work and retire. Most recently, in our latest budget, we announced a top-up to the guaranteed income supplement for Canada's most vulnerable seniors.
In conclusion, with the introduction of the PRPPs, we would address the remaining gaps in the system by providing an attractive additional pension option. This would not be one size fits all; it would be an additional pension option to both individuals and employers.
Through all of these measures, combined with the government's determined efforts to make PRPPs a reality, I sincerely believe that we are making a retirement system that is good. Can it be better? Yes. Is it strong? Yes. Can it and should it be stronger? Yes, that is our duty and our responsibility as parliamentarians.
This is something of which I think we as Canadians, and certainly the Parliament of Canada, can and should be very proud.
