Madam Speaker, I would like to tell you a story about some mad scientists. Many people know them as social engineers. They have this theory, this idea that the more centralized a project is, the better it is. They also believe the more people that are involved, the better it is. But these scientists have a problem. There are so many observations that refute this theory. These fallacies of theirs are obstacles that prevent this scientific theory from becoming a scientific law.
These social engineers have staked their reputations, even their views of the world, on this framework of centralizing more jobs, but the anomalies are overwhelming. Hence we have a real crisis. They created this crisis called the Canada pension plan.
I will talk about a number of these anomalies, these complications they had. First, other government run disasters do not work. Government members point to their own example when they talk about how it is a half trillion dollars underfunded. There is also the Quebec pension plan. Although it is better than the CPP it has repeatedly earned a rate of return substantially below the market average for investments.
I look to my own province with the Alberta Heritage Fund which squandered hundreds of millions of dollars on Gainers meat packing and Novatel. Those are two examples but there are more. Even Singapore's Central Providence Fund will not be able to meet even the modest levels of retirement benefits estimated by the Central Providence Fund itself. We have examples within Canada and without that point to government run disasters on investment funds like this.
When these Liberal social engineers set up the CPP in 1966 they made some promises. Paul Martin Senior and his Liberal cronies said that it would “never cost more than a few hundred dollars”. Those were their own words. Yet today Liberals are talking about something in the thousands of dollars which is 10 times what their initial promises were. But oh no, we should trust them.
The Liberals also promised the CPP would never climb above 5% contributions, but lo and behold they are talking about 9.9% as though it was nothing. They say that's it. Can we trust them now?
It was a con job all along. We know that now. And it is still a con job. Some people are convinced that they are entitled to this tax. I say that if it comes out of your pocket, if it is taken out of your wallet, it is called extortion; if it goes back into your pocket once the government has taken it, then it is blood money. It is paying you off. It is trying to buy back your support with the fruits of your own labour. The GST rebate worked the same way.
The Liberals said that Canadians asked for these changes. I do not remember being asked if I wanted the CPP tax doubled. I have friends on this side of the House who wanted to make application before the travelling board and they did not get an opportunity.
Even if were dense, I surely would have remembered the government selling this high priority Canada pension plan tax hike during the election campaign. It is a high priority bill that is being introduced right after the election. Surely the Liberals would have mentioned it there and I would not have missed it.
Where was the tax increase mentioned in the Liberal red book? I did not see it. I am not blind and I do not think I am all that deaf, but nonetheless these things were not talked about during the campaign. I am reminded of when the Liberals broke their promises on the GST.
I doubt whether doubling the CPP would have passed a referendum vote. They say it is something that is grassroots and democratic. If they put a vote to the citizens of this country in terms of whether or not they want to see a doubling of their CPP, they know that would fail.
The Liberals have more tricks in their bag. They bent the ears of the provincial governments. How did they do that? The Liberals bought off the provinces with promises of cheap loans that would be available due to the federal government's extra CPP tax revenue.
History has a funny way of repeating itself. The last time the government raised the CPP tax it squandered pension funds in provincial bonds at below market rates. We could well see that type of thing again. Canadians would once again be in the debt hole and the Liberals would once again come back to them and say “Trust us. This time it is only going to be 15% or 20%.”
This job killing tax hike is going to bring in nearly $11 billion over and above what it does now. That is $700 extra per year for every working Canadian. According to a Department of Finance study acquired through an access to information request, the increase in compulsory contributions from 3.6% to 5% that happened between 1986 and 1993 reduced employment by nearly 26,000 jobs. These are the same people who are saying this tax hike will not cost jobs. This Department of Finance study indicates that the Liberal tax hike this time could kill up to 75,000 jobs.
I would like to quote the finance minister. In 1994 in his blueprint for the economy entitled A New Framework for Economic Policy, he said “Higher payroll taxes increase the cost of labour and reduce the incentive to create new jobs.” It is 75,000 fewer jobs. That is what the finance minister is talking about. The Liberals do not like to call it a tax hike or a payroll tax, but that is what it is. It reminds me that the Liberals are short-sighted. They only see as far ahead as the next election because the finance minister can say one thing in 1994 and another thing in 1997.
Indeed, members opposite said during the beginning of this debate that they only realized there was a problem three years ago in 1994. They did not sense this baby boom population bubble. They did not feel it. They were oblivious to it. Marketers, demographic trend setters, everybody was talking about it but the government did not know.
This Liberal plan was created in 1966. Surely these people could not turn a blind eye to this. They were not daft, or were they? They should have known and anticipated this bubble in the demographic trends. For them to notice the plan even on their own admission only three years ago, it has taken them this long to finally catch wind that it has to be changed, that it has to be reformed. It sounds very fishy indeed.
What we have is a government that wants to bring in a tax hike right after an election. What they are hoping is that people are going to forget it, but I do not think that is going to be the case.
The Liberals claim that the screw-up they created could have been worse. If they had stuck their head in the sand a little bit longer, then the hike would actually have been 14%. This is so typical of Liberal promises. They promise to spend taxpayers' money and then when they do not spend it they say “We are heroes. We've saved you money because we didn't spend your 14%. We are only doubling it to 10%”.
I am going to make a prediction, and this will be very short. The Liberals are bringing in this tax hike early in their term and they are hoping the people are going to forget about it by the time of the next election. This increase only gets worse over time, and its coat tails will be long.
If they cut taxes, they might not slit their own throats but if foreign pressure on interest rates causes them to rise, especially with a separatist vote in Quebec, then they will dig their own debt grave.
