Mr. Speaker, I am honoured to rise in this chamber today to speak to Bill C-25, an act relating to pooled registered pension plans.
Innovative measures like pooled registered pension plans demonstrate our Conservative government's focus on the issues that matter most to Canadians: economic growth and financial security. This focus has continually achieved results. Under the leadership of our Conservative government, the Canadian economy has maintained the strongest job record in the G7. I'm very proud to say that over 600,000 net new jobs have been created since July 2009. We have also ensured a higher standard of living for Canadian seniors and our government has provided an additional $2.3 billion in annual targeted tax relief for seniors and pensioners, with measures like increases in the age credit amount and the introduction of pension income splitting.
While these are all very positive and necessary developments, there remains much to be done. Unlike the members opposite, who continue to promote job-killing tax hikes that threaten the growth of wealth and prosperity in Canada, our government has been working hard at crafting prudent, responsible and creative plans to move Canadians forward in these very fragile economic times.
I have just recently spent some time in Europe and seen first hand the difficulty that the EU is in and I am thankful that this government has ensured that we have stayed ahead of all the G7 nations. However, this requires continual improvement, vigilance, innovation and flexibility in how we manage our economy and the long-term financial prosperity and security of all Canadians well into their golden years. We must encourage all Canadians to save for their retirement and to plan for it early. To help the many Canadians who presently have no plan, the pooled registered pension plan is a vehicle that would help address that very need.
While some of the provinces raised serious concerns about expanding the CPP, there was unanimity among the provinces about pursuing the PRPP framework. Continued consultations with our provincial partners have revealed that a key area to help the Canadian economy move forward is the retirement income system. How else can we explain the fact that there are still Canadians who face a serious risk of not saving enough for retirement? This is especially true for the self-employed and Canadians working in companies that presently do not offer a pension plan. Pension reform is a key priority considering that over 60% of Canadians have no workplace pension.
Existing retirement income structures, while good vehicles, are not the key to addressing this problem. Instead, programs like RRSPs continue to be underutilized. On average, each Canadian has approximately $18,000 in unused RRSP room. Shortcomings and holes in our pension options pose a real threat as our population ages and more people reach retirement age. With this in mind, our government is proposing new low-cost and accessible pooled registered pension plans. Their introduction would widen the range of retirement savings options for Canadians and allow a greater percentage of our citizens to reach their retirement goals.
Employers would be drawn to the pooled registered plans because these would allow them the opportunity to forego the prohibitive burdens that traditional pension plans generally carry. Instead, a third-party administrator would take on most of the legal and administrative duties associated with the maintenance of the plan. Plan members would rest at ease, knowing that this third-party administration would come from regulated financial institutions that have already demonstrated a capacity to fill fiduciary roles and to act in the best interests of potential plan members.
Canadians joining PRPPs would also gain greater purchasing power, as they would essentially buy into a pool of investments. This would allow members to benefit from greater economies of scale and lower management costs, which would be an improvement over the existing smaller RRSPs. The fact that the regulatory framework of PRPPs would be harmonized between the provinces would also reduce the cost of these measures and remove administrative burdens. PRPPs would also be flexible enough to allow members to easily transfer between plans. This feature would undoubtedly also increase the attractiveness of the plan to small business owners who may find the locking-in provisions of other plans too much of a barrier.
The innovative design and new features of PRPPs have garnered universal praise. All of our provincial partners are enthusiastic about the positive effect of PRPPs on small and medium business. The Canadian Chamber of Commerce, the Canadian Federation of Independent Business, the Association of Canadian Pension Management and the Canadian Taxpayers Federation have all declared their support for PRPPs.
In my riding of Etobicoke Centre, PRPPs would be a very effective means to help many of my constituents start a pension where many do not have one today. I have a huge number of small and medium-sized businesses that this will apply to perfectly. I know that the people of Etobicoke Centre working in those businesses will benefit from this tremendously.
The introduction of the pooled registered pension plans does not preclude us from continuing on our work on other retirement savings vehicles. However, our government understands that in these economic trying times Canadians cannot afford further increases in CPP contributions. Because of this, the provinces have stalled their debate on reforms to CPP.
Already entrepreneurs are making plans to enrol their employees in new PRPPs.
The Ontario Medical Association recognizes the tremendous positive potential PRPPs will have on essential professions, like doctors, and praises the government for creating savings opportunities that have hereto been unavailable to them.
At this point, the introduction of a new alternative pension plan like PRPPs has been far better received than have other reforms.
Pooled registered pension plans have an enormous potential to improve the retirement security of all Canadians, particularly the 60% of Canadians who do not have the luxury of a workplace pension. This program has already drawn the interest of small business employers and relevant stakeholders, including all of our provincial partners.
In these fragile economic times, sound and innovative policy like that behind the pooled registered pension plans is essential for Canadian competitiveness and for the welfare of our citizens.
