Ted Menzies

[The Economy, December 3rd, 2010]

Mr. Speaker, my hon. friend is right. In fact, the Liberals want to dramatically hike taxes on job creators. It is a proven fact that it would kill almost 400,000 jobs in this country.

Our government is focused on keeping taxes low and creating jobs. November's job growth gains prove that, once again, our economic action plan is working, with five straight quarters of steady economic growth. Since July 2009, this country has created 440,000 net new jobs. That is good news.

[Pensions, November 23rd, 2010]

Mr. Chair, I cannot sit idly by and let a statement such as that last one go unanswered.

Does that hon. member not understand who holds pension funds, who contributes to pension funds, wherein pension funds are invested, where RRSPs gain their money from? That is an incredibly naive statement for that hon. member to make.

That is what fuels the economy in this country. That is what people's RRSPs are invested in: companies that make a profit. If we took the advice of the NDP and ran every company, every business, out of this country, the RRSPs would go with them. The RRSPs would be in the toilet. Then we would have the pension crisis that the hon. member refers to.

It is incredibly naive for any individual, some learned person who stands in this House and professes to understand the economy, to make such a statement that if we chase the companies away from this country, chase the job creators out of this country, we would have any pension fund left whatsoever, that we would have any bank that would want to fund RRSPs. We would then have a pension crisis.

I realize there is no question in that, just a clarification of fact or reality.

[Pensions, November 23rd, 2010]

Mr. Chair, something I do not think has received enough notice this evening is one part of what the ministers of finance, coming out of the Charlottetown meeting, wanted to discuss further, and that is financial literacy. The finance minister has put in place a task force that will report very soon, hopefully before the end of the year.

We are talking about current issues, and I am sure the minister will share this, being a parent. At what age do we teach our children about financial and economic literacy so they do not fall into the same trap that some people do when they have not prepared for their retirement?

I spoke to an economist at Purdue University last week who suggested that the U.S. research said that we needed to educate these young people in financial and economic literacy between the ages of four and twelve. I was a little surprised by that, seeing as we do not legislate or we cannot get involved in education, which is a provincial matter.

Does the minister have any ideas as to how we can deal with that? How we catch these kids? How can we teach them the value of a credit card, the costs of a credit card, the financial responsibilities that go along with that and the need to prepare for their retirements?

[Pensions, November 23rd, 2010]

Mr. Chair, I listened with interest to my hon. colleague across the way talking about this very serious issue that we are discussing tonight. If I heard correctly, she suggested that the Liberals would address all facets of the pension system.

My first question is, would that be in discussion with the provincial and territorial partners? My sense from her comments is that the Liberals want to just go it alone. We all know that constitutionally that is not possible. So I am hoping that the Liberals have actually spoken to some of their colleagues in the provinces to make sure that what they are suggesting would work. I would hazard a guess that provincial colleagues, ministers in other provinces and territories, would not agree with that.

Secondly, the hon. member used the number of 75% of Canadians not having registered pension plans. That is an interesting comment but does not take into account that many Canadians have prepared otherwise for their retirement, whether it is with their business or a second or third home for rental that they would sell and use for their retirement. Have the Liberals taken that into account?

Have the Liberals taken into account how effective it would be if we continued to lower taxes for Canadians so they actually have more money to save?

[Pensions, November 23rd, 2010]

Mr. Chair, I know the minister has been working with and visiting seniors. In fact, at my invitation she attended a seniors complex that was actually trying to raise money to build an assisted living seniors home in Bragg Creek. I appreciate her making the effort to come out on a day that should have been the Sabbath for her. However, she came out anyway.

Perhaps the minister could reflect on how challenging this is. I am troubled by some of the comments made tonight that we are going to fix this and we are going to fix it right now. Let me read a quote by the finance minister for Ontario, Dwight Duncan:

I have always felt this is going to be a long process. We have to look at moving toward a better integrated national pension system, both private pensions as well as the public pensions.

I wonder if the minister could say whether that is what she has been hearing from the many seniors she has been meeting with across the country. Let us not make a mistake; let us make sure we get it right. Is that what the minister has been hearing?

[Pensions, November 23rd, 2010]

Madam Chair, I do need to recognize the member for Hamilton East—Stoney Creek. He indeed has done extensive consultations with people not just in his own riding, but he has travelled around and listened to people. We recognize his contribution. As he states, he and I have had many discussions both in the House and in my office. He is passionate about making sure that we make the right decisions. We are trying to put forward as a package what will work for the short term, whether it be changes that help seniors today, but also to make sure that the changes that we make will help young people going forward.

The one issue we have not talked about yet and I am sure it will come up is a report we are expecting very soon from the financial literacy task force that will provide us with some insight on how we need to educate young people. I referred to this in my opening remarks about people looking after themselves. We cannot take away the responsibility of the individuals to make sure that they make the right decisions to prepare for their retirement. It cannot just be government that looks after their retirement. People have to take some personal responsibility. There are extenuating circumstances that are beyond people's control. I talked about that in the downturn in the markets, but personal responsibility also has to be a part of this. That has to be factored into our discussions here tonight. How do we encourage young people to think about their retirement? How also do we encourage people to keep working longer?

I personally feel that there is no place in my future for retirement. Why should many other people who want to continue working be forced out of work? They have productive years. They want to contribute. There are many good years left in some of us old souls and we should be given a chance to keep contributing.

[Pensions, November 23rd, 2010]

Madam Chair, there are a lot of pension members who found themselves in most distressing situations especially with the downturn in the markets. We saw large pension funds that were losing millions of dollars a day. Some of those pension funds could have been topped up and should have been topped up, but the rules that were in place at that time, in fact the rules that had been in place since 1985, allowed them to take a pension holiday. If they were 85% funded when they had to report to OSFI, they were allowed to take a pension holiday. They were also not required to report to OSFI for three years. We did not realize how serious that was. That has been in place since 1985.

We recognize that challenge. I heard from many fund sponsors that if they were allowed to top up their contributions over the 100%, they would do that. We put in place that mechanism so they could over-fund for a rainy day to make sure they were funded in case of drops in value. As well we made sure that we required them to report every year so they would not get so far behind in their funding.

[Pensions, November 23rd, 2010]

Madam Chair, I am afraid I do not know all of the details on that, but I will certainly look into getting a fulsome answer for that.

What the government did recognize was the fact that those people holding RRSPs suffered a severe shock in 2008-09, seeing the value of their RRSPs drop drastically. For those who were required as of that date to roll those instantly, at the end of that year, into a RRIF, the government extended that two years so they would not be forced to roll their RRSPs at that low rate. It would actually provide them the opportunity to rebuild the value of those RRSPs.

The government recognized that they, through no fault of their own, saw the value of their RRSPs drop. It was market factors, blame whoever, it was not the seniors who should be blamed. The government recognized that and moved that date back two years so it would actually allow the seniors to regain value in their RRSPs before they were rolled into RRIFs.

[Pensions, November 23rd, 2010]

Mr. Chair, I appreciate the opportunity to start tonight's take note debate on retirement income security and pensions. Being someone of such young and tender years, I am sure you are going to enjoy all of this discussion that we will be having here tonight, because rest assured, we are concerned about your future as well.

Tonight's debate is another illustration of how important this issue has become and remains for all Canadians and all parliamentarians. As I have said before, while we may not always have the exact same solutions to these issues, I would like to think all parliamentarians share a common desire to help seniors and retirees in Canada for today and for tomorrow.

This is not a simple or straightforward issue at all. As we have seen in Parliament, especially this past year, there are widely different aspects of this issue. They include everything from private sector pension plans, taxation issues, bankruptcy legislation, the levels of public servants' pensions and much more, all equally worthy of our attention. To be sure, this past spring, the finance committee, of which I am a member, conducted a study on the broad subject matter of retirement income security. In those hearings, we heard the wide range of concerns associated with this issue, concerns that touched countless areas and multiple jurisdictions.

Personally, this is an issue I have had the honour to spend the last three years or so working very closely on, as the finance minister's parliamentary secretary. I know how truly important it is to Canadians. I have conducted town halls. I have chaired round tables. I have read countless handwritten letters. I have spoken directly to thousands of Canadians personally. I heard the personal and heart-wrenching stories. I heard the emotion and the anxiety in the voices of the people telling them. I know how important this issue is to them and the generations of Canadians that will follow, and our Conservative government knows how important it is that we address this, but we also know how important it is that we get it right.

Despite what some might say tonight, there are no quick or easy solutions. The federal government alone cannot find or be the only solution as well. The government action alone, in the absence of personal responsibility, is not the solution. We cannot pretend otherwise. We have to look at the issue from all angles, always aware of the implications of solutions that we may propose, implications on not only those directly affected, but also those indirectly impacted and the larger Canadian economy. We also must always involve Canadians through open and public consultation when exploring this issue. It is too important to exclude Canadians from this discussion.

Since 2006, those are the broad objectives our Conservative government has strived for as we worked to improve the lives of seniors and retirees in Canada, not only for today but for tomorrow as well. This has included everything from our work to reform federally regulated private pension plans to landmark tax relief for seniors and retirees and, most prominently of late, our work with the provinces and territories to address this issue in a collaborative and pan-Canadian manner.

With respect to our work with the provinces and territories, it has been based on both extensive, factual research and open, public consultation. Indeed, there has been extremely good co-operation over the past few years, as we have been able to narrow down what we think can work and what merits more study.

We also ruled out ideas we collectively determined cannot work. For instance, along with our provincial and territorial partners, we examined the notion of creating another supplemental, government-run pension plan. The verdict was unanimous. This was not a good idea. Ontario's Liberal finance minister, Dwight Duncan, has firmly and publicly rejected the supplemental plan as “very costly to set up and administer”.

Indeed, during the finance committee study and elsewhere, we have repeatedly heard the same concerns from academics, labour and business.

For instance, the Canadian Institute of Chartered Accountants came out strongly against the supplemental plan, and said, “We believe that such initiatives would require the inclusion of significant incentives, costing deficit-laden governments scarce funds, and would further complicate the system”.

Labour unions have been equally dismissive. For instance, the Communications, Energy and Paperworkers Union of Canada told the finance committee that a supplemental plan would not work. It said, “As regards supplemental pension plans, our union experience shows that people do not spontaneously or easily contribute to a supplemental pension plan, even when the offer is attractive”.

It is little wonder even my Liberal colleague on the finance committee, the member for Saint-Léonard—Saint-Michel, dismissed the idea. To quote him, “The only thing that will happen is that the people who have the money will voluntarily put it into the CPP, so I don't think we'll solve the problem”.

I am confident that the spirit of co-operation and progress will continue later this year when federal, provincial and territorial finance ministers meet in my home province of Alberta in my riding of Kananaskis in December.

As I have said on numerous occasions, if we really want to tackle this broad issue as a federal government, we have to work with our provincial partners. The fact of the matter is that the overwhelming majority of pension plans in Canada, over 90%, are provincially regulated. Nevertheless, while the federal government cannot act on larger matters without our provincial partners, we can and have acted decisively on matters of exclusive federal jurisdiction.

First and foremost, last year we conducted the most comprehensive review of the framework governing private pension under federal jurisdiction in over two decades. We started that process back in January 2009 when we released a major research paper on federally regulated pension plans for public comment.

As our Conservative government believes that the Canadian public has the right to have their voices heard on this issue, we invited and listened to all who wanted to make their voices heard through public town halls and online consultations from May to March 2009.

Based on the tremendous feedback we received from Canadians from coast to coast to coast, we released the most comprehensive reforms in nearly 30 years of the federal pension framework.

Among those key reforms is: requiring an employer to fully fund benefits if the whole of a pension plan is terminated; establishing a distressed pension plan workout scheme under which employers, employees and retirees may negotiate changes to the plan's funding requirements; permitting the Superintendent of Financial Institutions to replace an actuary if they are of the opinion that it is in the best interests of the members or retirees; and, requiring the administrator to make additional information available to members and retirees following the termination of a pension plan.

I am happy to report that those reforms were welcomed and appreciated. Dan Braniff of the Common Front for Retirement Security described them as “an important milestone for creating greater security for many pensioners and plan members”. He thanked us for taking this “very important step for better retirement income security”.

Those reforms represented one of many instances where we took the time and effort to get it right. Our Conservative government will continue along that path. We will listen to the views of Canadians and all parliamentarians here tonight as we work towards a long-term solution to improve the retirement income security of Canadians.

[Retirement Income Bill of Rights, November 23rd, 2010]

Mr. Speaker, I am pleased to have the opportunity to speak to today's Liberal proposal for a broad bill of rights related to the retirement income system.

I want to acknowledge the passion that the hon. member for York West brings to this serious debate. We hear it when we are in our constituencies. It is a very important issue and I am sure all members sitting here will continue the debate later on during a take note debate when we will be able to debate the issues. We may differ on some of the solutions but I think we all are on the same page as to the problem that our seniors are facing.

As someone closely involved in the push to improve retirement income and pension security for Canadians, it would be appropriate to step back and look at the broader picture as we start this debate today.

First and foremost, I want to acknowledge that this is an issue all parliamentarians care deeply about. As I say, although we might not all agree on the exact specific solutions, I would think that we are all working for the same goal, which is helping to ensure a secure and dignified retirement for hard-working Canadians.

Through numerous cross-country consultations I have talked to many Canadians and heard too many challenging personal stories not to realize that this is an issue too important to get wrong. Our Conservative government has devoted considerable effort on the retirement security issue in order to get it right. Indeed, we have been engaged in a very serious discussion with Canadians on pension and retirement income security issues over the past few years.

First, we started by looking at our own backyard, so to speak. We undertook a comprehensive review of the framework governing pensions, those pensions under federal jurisdiction, a review that had not occurred since 1985, nearly 25 years ago. We also ensured that the review was as open as possible. We publicly released a major research paper on the legislative and regulatory framework of federally regulated private pension plans for comment in early 2009. We followed that up through March into May of 2009 with extensive cross-country and online public consultations open to everyone.

I am happy to report that we received tremendous feedback, feedback that led to comprehensive reforms to improve the federal pension framework, reforms that will, first, help protect pensioners by requiring companies to fully fund pension benefits on planned termination; second, restrict an employer's ability to take a contribution holiday; third, make pensions more stable; fourth, give pensioners more negotiating powers; fifth, modernize investment rules for pensions; and many more.

I note that the majority of those reforms have already been put in place through legislation and regulation. What is more, many of the few outstanding reforms are actually before Parliament right now as part of the sustaining Canada's economic recovery act.

However, this reform is only one step in a much larger process to help pensioners and seniors. Another aspect is ensuring seniors keep more of their hard-earned money. That is why our Conservative government has dramatically lowered the federal tax bill for seniors and pensions since 2006. Indeed, we are providing nearly $2 billion annually in tax relief to seniors and pensioners, including increasing the age credit amount by $2,000, increasing the age limit for maturing pensions and registered retirement savings plans to 71, introducing pension income splitting and doubling the amount of income eligible for the pension income credit.

However, we recognize that more is needed. We recognize that there are larger pan-Canadian concerns that can only be addressed nationally, working with the provinces and the territories.

I should note that most pension plans are actually provincially regulated. In fact, only approximately 10% are federally regulated. For that reason, we have long recognized that tackling the larger retirement income issues must involve federal, provincial and territorial governments.

Our Conservative government has taken the leadership needed to start a serious and public pan-Canadian discussion, one that has been approached by all with the gravity it deserves.

In the words of a recent Toronto Star editorial:

--governments at all levels are answering the call from working Canadians for a serious dialogue—and action—on pension reform.

For example, we set up a joint federal-provincial research working group with respected academic Dr. Jack Mintz as director of research to conduct an in-depth examination of retirement income adequacy. The group's findings, made publicly available, were presented at the finance ministers' meeting in December 2009, where we agreed with our provincial and territorial partners to proceed with detailed analysis of areas to improve Canada's retirement income system. Again, we did not do so behind closed doors. Rather, we invited public comment to gather input directly from Canadians.

This research and these public consultations suggested we explore a series of innovative proposals to build further on the strengths of Canada's retirement income system. It also strongly suggested that we rule out certain other proposals, including a supplemental Canada pension currently advocated by the Liberal Party.

The consensus of governments and public interest groups from across the political spectrum has been that this would be costly, ineffective and, ultimately, a misguided solution.

In the words of Ontario's Liberal minister of finance, Dwight Duncan:

We are rejecting the notion of a supplemental, voluntary national plan for a variety of reasons...It’s very costly to set up and administer.

Nevertheless, later this year we will meet with provincial and territorial governments to discuss effective and affordable solutions.

The road ahead will likely include more discussions between Canadians and governments at all levels as these issues are complex. We cannot force a decision without understanding the long-term implications for both Canadians and the Canadian economy.

We need to get this right. We need to get this right together, employees, employers, federal governments and provincial and territorial governments. Our decisions need to be the right ones, not only for today but for tomorrow as well. This will take hard work, careful consideration, compromise on all sides and time. It will also take the will to get it done.

People can rest assured that our Conservative government remains committed to improving the retirement income system in our country. We may not always agree on the specific solution but I would like to think that we share the same goal of ensuring we have a strong and sustainable retirement income system for the benefit of all Canadians. This issue is too important for too many Canadians not to.

In that spirit, with respect to the latest Liberal proposal outlined here today, as I mentioned before, this is an extremely broad and all-encompassing bill of rights. The rights touch on numerous generalities, such as adequacy, transparency, affordability, equity, flexibility, security and accessibility, without offering all of the details that are necessary.

While largely an inoffensive list, it does seemingly suggest the complete scrapping of any limits on how much income Canadians can shelter from taxes for their retirement. Not only would something as radical as that carry a hefty cost, it would also primarily benefit very wealthy high income Canadians.

Nevertheless, in spite of some flaws, as we have demonstrated over the course of the past few years, we are always open to discussing and looking at retirement income issues and proposals.

As a result, we will support sending this proposal to committee for further discussion and examination.