Mr. Speaker, I am pleased to rise today on behalf of the constituents of Fleetwood—Port Kells to participate in the debate on Bill C-25.
Bill C-25 proposes to establish pooled registered pension plans, extending pension coverage to the self-employed and those who work for small companies. It is geared at those small businesses and entrepreneurs, who do not have access to affordable pension plans and will help them secure financial freedom in their retirement.
Speaking with residents in my riding, especially those approaching retirement age, there is grave concern for their future. More and more I am hearing worries over whether they have enough money for their retirement.
The next generation of retirees includes a large number of workers without pensions who are left to their own devices and facing an uncertain financial future. As formal pension plans become increasingly less common, many Canadians face a savings burden that many are unable to shoulder.
For a big chunk of the population, for the self-employed, for those who work at small businesses, for professionals, for immigrants, a secure, comfortable lifestyle after working for years is now in question. At a time when our population is aging, more than six out of ten Canadians have no formal pension plan. That is more than eight million Canadians.
Statistics Canada finds the percentage of the population with some sort of pension has been dropping steadily for three decades, to 38% of Canadian workers in 2007 from 46% in 1977.
The problem is most acute at smaller businesses. There are about 5.1 million Canadians, or 48% of the private sector workforce, at small companies.
According to the Canadian Federation of Independent Businesses, only about 15% of small and medium-sized businesses offer some form of retirement savings plan for their employees.
A joint federal-provincial working group, established in May 2009, undertook an in-depth examination of retirement income adequacy in Canada. The working group concluded that while overall the Canadian retirement income system was performing well, some modest and middle-income households were at risk of not saving enough for retirement. From the working group's exhaustive research came a plan to pursue a framework for a new type of pension plan.
Our government aims to help millions of Canadians save for retirement more easily by introducing pooled registered pension plans. There will be an innovative new pension plan designed to address the lack of low cost, large-scale retirement savings options available to many Canadians.
Pooled registered pension plans, or PRPPs, are defined contribution pension plans that will be available to employers, employees and the self-employed.
The design features of PRPPs will remove a lot of the traditional barriers that might have kept some employers in the past from offering pension plans to their employees. The design of these plans will also be straightforward to allow for simple enrolment and management.
A third party PRPP administrator will take on most of the responsibilities that employers bear in existing pension plans, including the administrative and legal duties associated with administering a pension plan.
By pooling pension savings, PRPPs will offer Canadians greater purchasing power. Basically, Canadians will be able to buy in bulk. Achieving lower prices than would otherwise be available means they will get greater returns on their savings and more money will be left in their pockets when they retire.
PRPPs are also intended to be largely harmonized from province to province, which also lowers administrative costs. In short, PRPPs would be efficiently managed, privately administered pension arrangements that would provide greater choice to employers and individuals, thereby promoting pension coverage and retirement savings.
Reaction to Bill C-25 has been overwhelmingly positive. The Canadian Chamber of Commerce believes that pooled registered pension plans would give businesses the flexibility and tools they need to help their employees save for retirement. The Canadian Taxpayers Federation feels the legislation is a very good legislation, both for Canadians planning for retirement and for taxpayers. All the provinces are on board with the idea. British Columbia finance minister, Kevin Falcon, believes that our government has “responded to a real need out there in providing pension opportunities for small business people and those that don't have access to their own private pension plans”.
Pooled registered pension plans are the latest in a series of important steps our government has taken to strengthen Canada's retirement income system. This system is already seen around the world by experts like the Organisation for Economic Co-operation and Development as a model that succeeds in reducing poverty among seniors and in providing high levels of income replacement to seniors.
We recognize, however, that we can always do more. That is why we have already made a number of targeted improvements to the system. Bill C-25 is just one more step our government has taken to assist Canadians as they age and enter their retirement years.
Since first coming to office, we have offered more than $2.3 billion in annual targeted tax relief specifically for our seniors. We have also provided over $2 billion in annual tax relief for seniors and pensioners. We have completely removed 85,000 seniors from the tax roles. We have raised the GIS exemption from $500 to $3,500. We have introduced pension income splitting. We have introduced an automatic renewal of the GIS, meaning that our seniors no longer have to reapply each year. We have made significant investments in affordable housing for low-income seniors. We have raised the age credit amount twice. We have doubled the pension income credit. We have provided a top-up benefit to the guaranteed income supplement that will provide up to $600 extra per year for single seniors and up to $840 per year for senior couples. We have introduced the tax-free savings account. We have modernized and streamlined the application process for the Canada pension plan and old age security, making it easier for seniors to apply and receive their benefits. We have allocated $220 million over five years to the targeted initiative for older workers, which has thus far assisted over 10,000 unemployed older workers.
In addition, we have appointed a Minister of State for Seniors, someone who can bring the concerns of older Canadians to the cabinet table and stand up on their behalf. We also created the National Seniors Council to provide advice to the federal government on matters related to the well-being and quality of life of seniors.
Our government is supporting older Canadians and we are committed to ensuring that they have the opportunity to enjoy their retirement in comfort with an improved quality of life.
Bill C-25 is important legislation that deserves the support of all members in the House. We would be helping millions of Canadians save for retirement and more easily meet their retirement goals.
