Madam Speaker, part of the problem is that we have been dealing with this legislation for so long. If things would move faster around here we could get through this. People tend to talk about other issues because there are other things happening here today. However, this is an important piece.
I am going to come back to the CPP, but it is a program where the employer and the employee pay in, and it goes to a Canadian pension program savings board that looks after the savings that go into that program. It does the investments. It invests in the stock market, which for some reason the opposition members in previous speeches indicated they did not realize. It invests in government bonds and in the stock market. It is a relatively safe investment portfolio. There is always risk in everything one invests in and even during the recession the board's numbers went down, but overall it is a very secure, well-managed program. It is part of the savings program. Of course, one has to be an employee; one has to work to qualify for CPP because it is an investment piece.
A third piece is the registered retirement savings plans, which have been around for about 40 years or so, maybe a little longer. I believe they were introduced in the early 1960s. It is a program that is voluntary, which maybe the Liberal Party will want to talk about a bit. It is a voluntary program and does not have full take-up. Even in my own investment plans, I have not used all of the room available in my RRSP. There is still room for me to invest. However, it is a savings tool. I want to come back to that. It is a savings option. It is a savings tool for people to save for their retirement. There are RRSPs that are a lot more aggressive than others. It depends on one's level of tolerance for risk. That is why the vast majority of people have some sort of financial advice, whether through a bank or through an independent organization, on where they should invest their RRSP money, their savings, to help them in their retirement years.
We have made some changes to the RRSP system to allow for people to invest for longer. Then when people come out of the RRSP it turns into an annuity so they can have an income stream, hopefully, for the rest of their life.
We have also introduced a new savings tool, which is very popular. Even my own 21-year-old daughter has invested in it. It is a tax free savings account, which did not exist before our government took office. It is another savings tool where people can save money for retirement, and for other things, but it is also a retirement option where people save their money and hopefully it grows through the investments they choose for their TFSA. That growth is tax free. There is no tax on the money when they take it out. Therefore, if it is needed in the short term it can be used. A lot of people are considering the TFSA option as part of their retirement plan options.
Of course, there are other savings vehicles, like straight savings and a number of other options that are available to most people. However, there is something missing for many of those who are working, whose employer does not have a registered retirement savings plan that they are involved with or a pension plan. There is nothing for them. If people are self-employed, there is really nothing for them.
Our Minister of State for Finance has done an excellent job of consulting with the provinces and all Canadians on the pension system over the last number of years. In fact, the government is so concerned about the pension system in our country, and the retirement savings and ability of senior Canadians to have a quality of life after retirement, that we have a minister of state for finance, which did not exist before, to deal almost exclusively with the pension issue and seniors issue. This is a worldwide issue, but in the context of Canada we have taken it very seriously and added a cabinet position. This is a position at the table at cabinet to deal specifically with this issue.
The pooled registered pension plan has a number of components. There is a bit of a gap of course in terms of the retirement piece, even though I have listed out all the options that are available. I want to talk about that gap.
One of the pieces is that it is accessible and straightforward, and it is a low-cost option. I will get into why that is important. It allows for individuals who currently do not participate in a pension plan, whether they are self-employed or employees of companies that do not have pension plans, to get involved in a registered pension plan. The key is that It is an opt-out plan and not an opt-in plan. This is very important, and it is different from what has been suggested by other parties.
More people will benefit from its low-cost investment management, which will result in better returns. Whether it is an RRSP or other investments, part of the cost of the investment goes against what one would have in one's retirement. If we can lower the costs, which the pooled registered plan would do, it would mean more money in the pockets of the retirees.
Another very important component is its portability. A pooled registered pension plan is portable. If a person leaves one company to go to another, that person could take the retirement savings in the plan and either move it to a new plan that the new employer has or just keep it in the existing plan. It would be the employee's decision, but it is portable. I have left jobs before, and the money that was invested in my pension plan had to be either put into a locked-in RRSP or taken in cash.
Let us face it: in today's marketplace, my generation and generations after mine are not staying at the same company for 35 or 40 years. We are changing jobs every four or five years. My university friends have all had four or five careers in the 30 years since we graduated from university. I hate to say it, but it has been approximately 30 years, which is hard to be believe. I was only 12 when I graduated.
However, we have all moved, and the portability of this new program is very important. The investment in the funds would be there for those who have invested in it.
There is a company whose management I know very well. I will use it as an example of why this important, and I will start with the automatic enrolment piece.
This company is in the high-tech medical business. It is very high end. There are about 30 employees in the company, and about half of them have a Ph.D. in chemistry. They are highly intellectual, highly skilled individuals.
This company has a group RRSP program. The employer adds a certain percentage—up to 5% or 6%, I think—of whatever the employee puts in the plan. I talked to the owner and asked how it was going. He said that he had all of these highly skilled, highly educated individuals, but only 30% of the 30 people take advantage of the company's money. They are not investing on their own, even though there is an automatic 5% return in that system.
That is an example of what happens across the country in company after company. Canadians often have an opportunity but do not take advantage of it. However, the advantage of the pooled registered pension plan, in my view, is that there is an automatic enrolment.
That means that when people join a company that has taken advantage of the pooled registered pension plan, they have, I think, three months or six months—off the top of my head, I cannot remember the timeframe—to decide not to be part of the program. Otherwise, they are automatically enrolled, which in my view makes a big difference.
We often hear the opposition asking why we do not just increase the CPP role. There is no doubt that the advantage of the CPP is automatic enrolment, but this plan takes the positive aspect of the CPP and adds to it.
There are two fundamental differences between the CPP and this plan. First, as we all know, we can talk to ourselves until we convince ourselves, but we need two-thirds of the provinces with two-thirds of the population to agree to make changes to the CPP. That is the law. We can see if we can change the law, but that is the law that runs the CPP program.
The Minister of State (Finance) has worked very hard at discussing what options are available that the provinces will buy into in terms of changes. The response has been that some provinces are in favour and some are not, so we cannot proceed with CPP changes.
The official opposition has said that we should just change the CPP and have et the employers and employees pay more. Of course it will take 18 to 20 years before anyone sees the benefit of that, but it is an option, and we have discussed that option with the premiers of the provinces. It is just not feasible, because they are not interested. Maybe we should just stand up for it and say so, but we like to take action on this side of the House. We like to make a difference in people's lives.
When the previous leader, who has unfortunately passed away, was at the kitchen table, as he used to say, he was doing things and making things happen for Canadians. This is making things happen for Canadians. Is it the final answer on all the pension requirements for our future generations of seniors? Absolutely not. We are not saying it is the only or the final answer, but it is part of the puzzle and part of the options.
As I listed from the beginning, there are four or five options that exist now. We are adding another one. We are adding an opportunity for Canadians to invest and to save for their future and their retirement. The automatic enrolment is a key element of making sure that in this registered system, Canadians will have to choose not to save for their retirement. In this case, with this plan, we are requiring them to do so. That is why I think there will be a huge take-up on this program.
Even with this program, we can put the legislation into effect for nationally regulated industries, but we need the provinces on board too. We need each province to pass legislation so that they can recognize these pooled registered pension plans for employees at the provincial level, which we have no influence over.
I am hearing that the vast majority of provinces are interested in doing this. They were supportive. Unfortunately, Ontario has now indicated that it is not interested. I do not think it is good for Ontarians if the province takes its ball home because it does not want to play.
I am from Burlington, Ontario, and as a member of the Ontario caucus here, I want to see Ontario take advantage of this plan. It is of no cost to the province. It is an opportunity for the people of Ontario, as it is for every province. I think the province is being very short-sighted by not taking advantage of this plan. Ontario will say that it is not the final solution, and I agree with that. It is not the final solution. It is part of the puzzle of opportunity and options that should be available to all Canadians, regardless of what province they live in.
The portability piece is very key to me. I had asked the minister and his team about that. What if employees are moving around? It is portable. My concern is that if we do not get all of the provinces on board, I do not know what would happen to portability if people move from one province to another. It does not make sense. I want it to be portable, not just within Ontario and not just within federal government-regulated industries, but also through every business, including self-employment businesses.
The self-employed work very hard every day. We all know those individuals in our ridings who are entrepreneurs, who are risk-takers, who are out trying to make a living and trying to better themselves, their livelihood, their family's livelihood and their community. There is nothing more satisfying than when a local entrepreneur is involved in community events.
They have not had the same opportunities in the past to save for their retirement. Often they hope that their business is their retirement plan. Perhaps they own the real estate that their business is on, but they hope to have some value in it so that they can sell it at the end of the day and retire, or else pass it on to their children or whomever they wish to.
Normally there is a cash-flow system that will help them with their retirement, but here is another opportunity for them. It will encourage entrepreneurship and self-employment and encourage people to create jobs and wealth in this country, and they will have an opportunity to save for their retirement. They themselves can sign up as individuals for the pooled registered pension plan.
With the concept of low cost, the issue is that just as in anything else we do, the greater we spread the risk and have economies of scale, in normal circumstances the less the cost will be for individuals to take part. It is a simple concept that works. No matter what it is, it works. It is a simple concept, and that is what these pooled registered plans would do.
There would be regulations about how much whoever is administering the plan would be able to charge, whether a bank or an insurance company. We would have some control over that level, so we would ensure it would be affordable. We have a large variety of people who have said positive things about this plan.
We had an amendment at report stage yesterday that would have gutted the bill. The New Democratic Party, the official opposition, voted against it. I just do not understand.
I can understand the opposition's argument that this is not the final answer—absolutely, we are not denying that—but why is the NDP denying Canadians an opportunity for another tool in the toolbox for their retirement? I can understand that the NDP members would like to see other things happen or that they have other suggestions. However, they had an amendment that would have gutted the bill completely. I do not understand denying the opportunity. The majority of provinces are on board and the majority of businesses are on board. I can go over quotes of different individuals and organizations saying that this is an important piece.
We need to provide the tools for savings. In our view, part of people's retirement planning is their individual responsibility. I do not think the majority of people in this country are interested in having the government completely control their retirement plan. There needs to be opportunity. It looks like I—