Mr. Speaker, a strong pension system is a cornerstone of a decent society. Adequate pensions provide retirement security to those who build our country. Pensions reduce the extent to which seniors must draw upon other social welfare programs. When retirees spend pension income in their local communities, it provides an important and relatively stable source of consumer demand. Therefore, pensions are critical to our economy and to our broader society. That is why most other advanced countries have established robust universal public pension systems to cover all workers.
Even the United States set up a public social security system that is more generous than the current Canada pension plan. Here is Canada, I believe we made an historic error. We set up a public pension system only as a complement to workplace pensions. The CPP replaces only about a quarter of employment earnings, on the assumption that employees have another pension from their employers. That assumption has been severely tested in recent years, and I would suggest that the Canadian approach to pensions is actually very similar to the American approach to health care.
This reliance on the workplace for benefits has many pitfalls. Workers can lose benefits if they change jobs or if their employer goes bankrupt. The aggregate costs of administering separate plans in each workplace, or separate accounts for each employee, are far higher than administering a universal plan that covers all Canadian employees. In any case, we are at a point where only about one-tenth of private sector employees have a defined benefit pension plan in the workplace.
Of course, we can and must do more to safeguard workplace plans where they exist. One idea would be to enact a national pension benefits guarantee fund, as exists in the United States and at the provincial level in Ontario. This is something the Government of Canada could try to initiate for the whole country that would serve as a backstop to workplace pension plans.
However, the fundamental solution is to enhance the Canada pension plan to provide more defined benefit coverage for all Canadian employees, regardless of where they work. The CPP is universal, efficient, portable between employers, and indexed to inflation.
We in the NDP, and our allies in the trade union movement, have advocated doubling CPP benefits over time to replace half of employment income. The government's plan to eventually expand the CPP to replace one-third of employment income does not go far enough, but it is a significant step in the right direction. I am proud of the role New Democrats have played in the House to push the government to follow through on its promise to improve the CPP.
The federal-provincial agreement reached on the CPP is so reasonable that even Saskatchewan's right-wing premier, Brad Wall, signed on to it. To provide a bit of context, in the months before the deal, Premier Wall had been the shrillest opponent of expanding the CPP. When commodity prices were high, it was not the right time to enhance the CPP, according to Mr. Wall. When commodity prices were low, he again said that it was not the right time to expand the CPP. Indeed, in response to falling oil prices, Premier Wall's priority was to argue against improved CPP benefits rather than in favour of improved employment insurance benefits for laid-off resource workers.
There is quite a contrast with our neighbouring province in this regard. In Alberta, Premier Notley made a very strong case for extended employment insurance benefits. As a result, that benefit extension was provided to all Albertans. In Alberta, we had effective advocacy by the provincial government for better EI benefits.
In Saskatchewan, we had a right-wing premier going on a crusade against expanding the CPP. He completely ignored the issue of employment insurance. As a result, the government left half of Saskatchewan out of extended EI benefits and, even after having added the region of south Saskatchewan, it is still excluding Regina.
Workers in my city are paying the price for a lack of effective advocacy from our Premier. However, even though Premier Wall was so hell-bent on opposing an expansion of the CPP, even he came around to sign on to this important federal-provincial agreement.
It is really quite striking that premiers of all stripes, including a very right-wing premier, as I mentioned, have signed on to this reasonable compromise, and yet in this House, the federal Conservatives are opposing improvements to the Canada pension plan. I really think it speaks to just how out of touch the Conservatives are with the reality of working Canadians, that they alone are standing up and opposing any kind of enhancement of the CPP.
While I would certainly argue that this bill is an important step in the right direction, obviously it is not sufficient. Obviously, much more needs to be done to help current retirees and to help lower-income working people. We want to see the government do a lot more to improve the guaranteed income supplement for seniors.
I would note that, in the proposed bill, the enhanced portion of the CPP is actually a separate line on income tax. Might there be a way of exempting the additional benefits from the GIS clawback? That is just one idea that could perhaps help lower-income seniors.
Another idea would be to expand the working income tax benefit as a way of compensating lower-income employees for any cost of increased contributions. The government has said it is going to do this, but we absolutely need the details. We need to see something concrete for working Canadians.
On balance, I think this is a good bill. The NDP is going to support it. However, definitely the government can and should do more.
I would like to briefly respond to some of the points made in the last speech by my hon. colleague from Portneuf—Jacques-Cartier. He suggested that, instead of expanding the CPP, we should just increase the contribution limit for tax-free savings accounts. However, voluntary savings are not working. Canadians are not even filling up the TFSA contribution room they already have. That is why it is important to expand the CPP. Just further increasing the contribution limit to the TFSA would not help all the Canadians who are not meeting the current limit. It would just help the very affluent who have the extra money to put into that account.
In support of private savings, the member for Portneuf—Jacques-Cartier also made the point that those savings would be reinvested in the economy. However, the same is true of funds contributed to the Canada pension plan. Those funds would also be reinvested. While certainly savings and investment are important, that is by no means an argument against expanding the CPP.
As I pointed out in questions and comments, this money does not go into government coffers. Unlike the EI fund, the CPP truly is a separate fund with its own administration that does not appear as part of the government's budget.
In summary, this proposal is an important way of ensuring retirement security for all Canadian employees.