Jason Kenney

[Canada Pension Plan Investment Board Act, October 7th, 1997]

Mr. Speaker, it was not a question, it was not a comment, it was an irrational rant by a member who is embarrassed by the moral leadership of the hon. leader of the opposition who took the challenge and gave up his pension last year. Why does that member not meet the same challenge?

All I can do is quote one of my constituents. I have received more mail on this than on any other issue so far in this Parliament. People have been saying that there is a need for real reform of this pension plan. For instance, Mrs. Brad Skeet from my riding writes “I am a hardworking, tax-paying citizen in your constituency. I heard that the federal government is going to raise the pension contributions again. I must strongly protest this action—the CPP is something that my husband and I do not even count on for supporting us in our retirement. We have struggled to put aside the money we can to invest in our future years”.

Those are the kinds of sentiments I am hearing from Canadians instead of the superficial partisan political rhetoric that we just heard from the member opposite. What about talking to young Canadians who are concerned about their future? That would be responsible.

[Canada Pension Plan Investment Board Act, October 7th, 1997]

Yes.

[Canada Pension Plan Investment Board Act, October 7th, 1997]

Thank you very much. That is just what we need, a bunch of senators managing $200 billion public dollars.

The Department of Finance has produced several studies and reports. The Bank of Canada, the World Bank, the International Monetary Fund, and virtually every credible economic think tank in Canada will confirm that payroll taxes kill jobs. The biggest killer of jobs in terms of taxation are higher payroll taxes.

We are now in the 78th straight month of unemployment at over 9%, with 17% youth unemployment that reaches 25% in some regions of the country. Families have been undergoing diminished disposable income for the past 15 years. Even though they are working harder, they are coming home with less. What does the government want to do? It wants to raise those taxes even higher and go against all of the conventional economic wisdom which says that will reduce job growth and mean fewer opportunities for Canadians to get a leg up in the tough new 21st century economy.

There is an option. Yes, we do have an unfunded liability and the country has to make some difficult decisions on how to deal with that unfunded liability. There are no easy choices. As I said at the outset, this party and I think all reasonable Canadians are committed to fully respecting and honouring the commitments that have been made to Canadians concerning their pension benefits. We are committed to that, but it will cost money to honour those obligations.

However, there is a way to fully fund those benefits while at the same time giving younger Canadians better pensions and better retirement security. That is to look at some of the reforms that have been proposed by very respectable mainstream organizations. The C.D Howe Institute has produced several papers proposing the conversion of the defined benefit Canada pension plan Ponzi scheme into a mandatory private retirement savings vehicle, a proposal which has been seconded by the World Bank, an organization which is in part funded and supported by the government, as well as many other think tanks around the world.

Governments around the world are coming to grips with the same problem that Canada is now encountering. Last summer I attended a conference in Budapest attended by economists from welfare state countries around the world. They talked about how to convert these defined benefit pension plans into pensions that are fully funded, mandatory private retirement savings vehicles.

Reform has offered such an alternative and I wish members opposite would take this idea seriously. If young Canadians were allowed to make a payroll contribution to a private investment vehicle and got a modest rate of return of 6% a year, they would end up with an annuity of over $250,000, producing an annual retirement income of nearly $24,000 a year, a far sight better than the measly $8,800 offered by the government. Better pensions at lower cost seem to make too much sense for the Liberals opposite.

I would like to close my remarks by saying that the House has a unique opportunity to really grasp the future. Members should think about the impact that this will have on their grandchildren and the taxes they will be forced to pay. Members should forget about their own interests for a moment if it is possible. Maybe they would give up their MP pension plan if they really started doing that. Members should forget about their own benefits for a moment and think about their grandchildren. If they do that, I have enough faith in the sincerity and good sense of members opposite that they will embrace a real alternative for Canada and for its future by embracing a private mandatory retirement savings plan, as we have proposed.

[Canada Pension Plan Investment Board Act, October 7th, 1997]

Mr. Speaker, I did not mean to impugn the integrity of any member of the House. I meant to impugn the decisions made by successive governments and parliaments that decided to use the coercive power of the state to take money from people, without giving them a choice, to fund their retirement funds.

Maybe I cannot use that word in the House, but I know the words people on Main Street use to describe the MP pension plan. They are a lot worse than the word I just used.

The government and its friends in all the other parties want to raise the CPP payroll tax to 10% to give Canadians an enormously generous pension of $8,800 a year. Is that not something? They are prepared to pay a lesser premium to the MP pension fund to get millions of dollars in unfunded, lifetime pension benefits.

This double standard is a scandal which every Canadian knows about. Members can heckle me from the other side of the House as much as they like, but they know their constituents are fed up with that double standard, and I will take a stand against it every chance I get in the House.

What the government proposes to do, among other things, is to raise the CPP premium, as it is called, from the current rate of 5.6%. It started at 3.5%. I understand that when the father of the Minister of Finance first introduced this concept, it was suggested that the premium rate would stay at 3.5% in perpetuity.

They guaranteed Canadians that at the time. Of course they were wrong. I will not say they lied. I will assume the best intentions. Since then, the rates have creeped up to 5.6% and now in Bill C-2, they propose to move those rates to 9.9% by the year 2003 so that individual premiums will increase from $945 a year to $1,645 a year, a 73% increase. That means payments of over $3,200 a year for a self-employed person, the kind of person who is trying to run a small business, to create jobs, the kind of jobs the government does not know how to create.

What is that going to do, that $10 billion tax grab, the largest single tax increase in Canadian history? Is it going to create any jobs? That is a question I ask members opposite. I believe they ran, quite honestly and sincerely, in the last two federal elections on a commitment to increase employment, particularly for younger Canadians.

I heard the Prime Minister speak quite movingly in his remarks on the Speech from the Throne on the importance of increasing economic hope and opportunity and jobs for young Canadians. I was very impressed by the sincerity and emotion expressed in his speech but actions are the true measurement of sincerity, not just words.

The government proposes in Bill C-2 to take away jobs from younger Canadians, take away opportunities from small businessmen who are struggling to create real employment and growth in our economy. They propose to do that through the single largest payroll tax grab in our history.

What about the question of generational equity? What do they say about that? What we know is that the first retirees, the first beneficiaries of the Canada pension plan, will have received $11 in benefits for every dollar in premiums that they paid into the plan.

Who can argue with that? It is nice that we were able to manufacture money to increase the living standard of retired Canadians. The problem is that somebody has to pay the bill, and that falls on us here today.

Younger Canadians, those of the generation after me, will receive some 57¢ in benefits for every dollar they pay into the plan that the government is proposing. Is that equity?

The Liberal Party of Canada always prides itself on being the party of equity. It claims to be the party of fairness. Where is the fairness in taking from one generation without its consent to subsidize benefits for another generation? Where is the fairness in that?

They talk about supporting young Canadians. This is a government that does not have a single member under the age of 30 but has the temerity to stand up and say that. I appeared before two of the panels that the federal government held on reform of the Canada pension plan.

There were very few representatives of the younger generation of Canadians welcomed at those panels. Why? They were too busy working. They did not have time, like the tax-funded special interest group friends of the government to come before those hearings and to ask for more money from their grandchildren and great grandchildren.

I say shame for not giving younger Canadians a voice on this. We do have younger Canadians. They are looking at one of them right here who is going to have to pay part of these bills.

One of the other things the Liberals propose in these amendments is to create a publicly managed investment fund of over $200 billion. Just imagine that, a bunch of politicians and government appointed patronage hacks controlling the largest investment fund in Canadian history. As far as the eye can see is pork when they talk about that kind of investment board. Where are the controls? A board entirely appointed through cabinet appointments, just like those very noteworthy appointments to the appeals board, to the parole board, to the immigration refugee board—

[Canada Pension Plan Investment Board Act, October 7th, 1997]

Mr. Speaker, I am pleased to rise to debate Bill C-2, an act to amend the Canada pension plan. Some members of my generation think it should be renamed the Canada Ponzi plan.

The pension plan was devised over 30 years ago by a Liberal government with a noble objective, one which all members then and now can agree on. The objective was to provide retirement security to all Canadians and to reduce poverty among seniors.

To a certain extent Canada's retirement income system for seniors has been successful in alleviating poverty among seniors and generally improving the living standards of Canadians. As a young Canadian I would like to be on record as supporting a strong, fully funded retirement income system which ensures that no Canadians fall between the cracks in their older years when they are without earned income and sometimes without support from their families.

This is one thing we can all agree on. It is unfortunate the hon. member who spoke before me found it necessary to engage in overblown, overheated partisan demagogic rhetoric. He suggested that my Reform colleagues and I supported a diminishment of benefits for seniors simply because at the same time we support generational equity.

It is an important first principle that all parties debating the bill support income security for seniors and for all Canadians as a primary objective.

The basic framework of the bill and the plan which it amends is as fundamentally flawed as it was 30 years ago when it was first introduced in this place at a time when the most wildly optimistic demographic projections still foresaw that a pay as you go scheme was unsustainable.

The experts knew it then. They have known it every since. Call after call for responsibility to ensure that we did not rack up a massive unfunded liability, a massive taxpayer IOU, was not heeded by successive Liberal and Tory governments. They put short term political considerations ahead of long term human considerations. They should be eternally shameful for failing to act.

They have created a scenario where the pension fund now has a $580 billion unfunded liability, an amount that almost exceeds the federal debt. This brings the total indebtedness and liability of younger Canadians to well over $1 trillion.

When we add to that the debts and unfunded liabilities of provincial governments, local governments and other pension plans for public servants, we find my generation will be inheriting over $2 trillion in public indebtedness and liabilities. This is a result of successive decisions made by this parliament and provincial parliaments. That is something for which those who sit on the front bench of government, none of whom represent people of my generation, should apologize to my generation.

People of my age will forever have to work harder and longer to get less, keep less and earn less. They will be paying higher taxes, higher income taxes, higher payroll taxes and higher sales taxes, to fund the debts and liabilities incurred by the government and by the Progressive Conservative Party when it was in power. The bill speaks to that and the member for Saint John denies it.

The fact is, whether or not they like it, the Tories made the decision to do nothing. They made the decision not to act. They made the decision to let the unfunded liability rack up to the point where it is now at $580 billion.

Now the government comes to us and presents itself as the saviour of the Canada pension plan. Finally it says it is time for somebody to take up the clarion call and reform the Canada pension plan.

The government is 30 years too late and $580 billion short. It should have structured the plan the right way 30 years ago when it was known that the demographic pyramid would change.

When the plan was designed it was assumed there would be six taxpaying workers to every dependent retiree. We now know that within 20 years the ratio will be two taxpaying workers to every dependent retiree, a ratio which is not sustainable for a defined benefit pension scheme like this one.

We do not need a Ph.D. in mathematics. We need to look at the actuarial report of the Canada pension plan which year after year reports a tragic record of red ink into which the government has decided to steep my generation.

I find it particularly galling that the government spends so much time congratulating itself on its moral courage in deciding to raise payroll taxes by 73%.

This will kill tens of thousands of jobs and reduce hope, growth and opportunity for younger Canadians and future generations. The government is busy congratulating itself. At the same time it is busy stealing from the taxpayers of the country to fund its MP pension plan. It is prepared to impose a 10% payroll tax on all Canadians so they can get a whopping pension of $8,800—

[Canadian Wheat Board Act, October 7th, 1997]

How come he did not run in Yorkton this time?

[Canadian Wheat Board Act, October 7th, 1997]

Madam Speaker, on a point of order. I understand that the member is at least three minutes over his time. Every member has been tightly constricted in the debate, including the Leader of the Opposition. I would ask that the Chair enforce the time limits on this debate.

[Canada Pension Plan Investment Board Act, October 6th, 1997]

The Chilean government has it. An hon. member mentioned some of the other governments which have adopted this kind of plan.

The Government of Chile did it. It is an enormously successful plan which members from every stakeholder group in the economy, from labour unions to business to small business to taxpayers, have embraced. The public opinion polls in Chile show overwhelming support for the self-funding pension plan established in that country.

The member says that Reform has no plan to deal with the unfunded liability of $600 billion. We do. Part of the contribution that will continue to be made to mandatory pension savings would go to fund the unfunded liability which this Liberal government has allowed to develop.

Does the hon. member not think this is a responsible approach to meet the obligations we do have toward older Canadians? Has he not looked at any of the very serious arguments put forward by credible organizations such as those I have listed? Has he not looked at any of the international examples to see that this kind of plan actually can work?

[Canada Pension Plan Investment Board Act, October 6th, 1997]

Mr. Speaker, I would commend the hon. member for his remarks; unfortunately there were several inaccuracies in his characterization of the Reform plan.

It would appear to me that the hon. member, who I believe is an accountant and well acquainted with actuarial concepts, may not have done exhaustive research on this subject. It is not merely the Reform Party which has proposed a mandatory retirement savings plan to replace this giant rip-off Ponzi scheme which Liberal and Tory governments have perpetuated for the last 30 years. Very credible independent think tanks such as the C.D. Howe Institute, the World Bank and even the Bank of Canada have made favourable comment on the concept of a self-funding, defined contribution, mandatory public retirement savings plan.

I wonder if the hon. member has read any of the studies.

[Canada Pension Plan Investment Board Act, October 6th, 1997]

Mr. Speaker, studies produced by the Department of Finance, the Bank of Canada, and virtually every reputable economic authority in Canada and abroad indicate that payroll taxes reduce jobs and reduce job growth. Does the hon. member think that this bill, which will increase CPP payroll taxes by 70 percent, by some $1,800 for self-employed individuals, by over $10 billion a year when fully executed, will help the government to achieve its objective of greater job growth? Or does the hon. member concur with the evidence of all of the reputable economists in Canada that this massive tax grab, the largest tax increase in Canadian history, will in fact kill tens of thousands of jobs, taking away the very kind of economic hope that people of my generation so desperately need in order to pay the kind of tax burden that has been levied on us by the fiscal irresponsibility of this and other governments?