Wayne Marston

[Pensions, November 23rd, 2010]

Mr. Chair, we hear the government speak to us regularly about the fact that it only has jurisdiction over 10% of the pensions of our country. The government has legislative authority over the old age security, the guaranteed income supplement and CPP, just to be clear on what we are talking about here.

Recently, Professor Kesselman, a pension expert, agreed with the NDP's proposition to increase CPP with a goal of doubling it over 35 years. Professor Jack Mintz, who was part of the task force of the government, agreed with Mr. Kesselman.

Having that before us, I am just curious as to whether the member has any knowledge of how soon we can expect the government to start to move on this particular portion of the file.

[Pensions, November 23rd, 2010]

Madam Chair, I agree with the member that seniors are going to feel very much blindsided by what has happened to them on this file.

I will give an example of something I discovered when I was elected, which the Liberals had done, and that was the disability tax credit that they were not promoting to people who were entitled to have it. There are hundreds of people in my riding who now have the disability tax credit because we informed them.

The government's job is to make sure the people are well informed on what is happening to them, and I agree with the member that in this particular case, they were not.

[Pensions, November 23rd, 2010]

Madam Chair, in fact I originally proposed Bill C-476, the Nortel bill. It was not timely and the member took it over and brought it to committee, for which I thank him and for the work he has done on it.

It is very clear that we have a system in Canada. The old age security system, which started in 1927, was to end poverty. The CPP was intended to do the same thing. Both have worked reasonably well over the long term, but the reality is that going forward, as the member for York West was saying a few moments ago, with the number of people who are going to be facing retirement in the coming years, it is essential that we build and expand that foundation. By taking the core assets of CPP and increasing them over 35 years, we can double the portion that is available.

In Hamilton, U.S. Steel right now is trying to take away the defined benefit plan for steelworkers, and that is happening in multiple workplaces across the country. If we lose the defined benefit plan, what is going to catch these people if the market is down when they do retire? We have to work on that foundation.

[Pensions, November 23rd, 2010]

Madam Chair, I was pleased to hear the finance minister talk about taxation. We have had taxation in Manitoba under the Doer government. Lorne Calvert and other NDP governments across Canada balanced the books repeatedly, over and over, but at the same time they took care of the social welfare of people.

If we want to talk about a corporate tax rate that is competitive with the United States, fine. However, the Americans are at 36% and we are dropping to 15%. Where is the competition? That is ridiculous.

The Conservatives are taking the fiscal capacity out of the country to take care of our seniors. They are taking $14 billion to $16 billion a year out of the fiscal capacity to do what is necessary for a better country. That may be humourous to them, but because of it people are suffering.

[Pensions, November 23rd, 2010]

Madam Chair, I am struck by one of the things the member just talked about, and that is the $22,000 on which people live. I was in Elliot Lake when a woman came up to me and told me she lived on $1,160 a month, exactly what the member said.

We have differences on some points here or there, but everyone in this place is trying to find a way to improve the lives of seniors. Therefore, I am glad to hear her bring forward her points today.

The leaked document has not been leaked onto my desk, so I cannot respond to it. However, people know what the problem is. The problem is seniors do not have adequate pensions. If they are living on old age security and GIS, they do not have enough. Eleven hundred dollars a month does not do it. Therefore, we have to do something about that.

Madam Chair, you said I had a bit of time left so I could turn to my last page.

I want to talk about the fact that the NDP has put forward a plan, a seniors' retirement income security plan. We have talked about increasing the GIS to lift seniors out of poverty, strengthening the CPP by doubling it if we can reach that goal, adopting a plan to take in stranded pension funds and a national pension insurance plan. If we were to work on those four points, we would be well under way to making a better life for seniors.

[Pensions, November 23rd, 2010]

Madam Chair, I am most pleased to take part in the debate on those pension reforms that are needed to protect and enhance the lives of Canada's seniors as they live out their sunset years.

From my reports, the House will know that over the last 19 months, I have been crossing Canada, holding some 39 community meetings, so far, on what I call the listening to seniors tour. I want to assure the House that these seniors have been very quick to tell me of their fears and their concerns about the future.

Today far too many of our seniors are forced to live in fear, just one crisis away from financial catastrophe. Seniors are worried about their private pensions and how they might be significantly less than what they were told they would be, or, as in the case of companies like Nortel, where there was a significant loss to the amount of pension income, they worry if they will have a pension at all going forward.

The genesis of my listening to seniors tour was when I was visited by a prominent group of seniors. One of my guests stated that seniors felt invisible to their government. This group also wondered why the government had given $14 billion a year in corporate tax breaks while, as they said, doing nothing for them.

The government will argue that there were things done over the past five years on behalf of seniors and some of that is factual. However, from the point of view of the seniors, they do not see that immediate impact for them.

One of the things we heard today was the corporate tax rate in Canada as compared to the United States. I may be incorrect but it is my understanding that the corporate rate in the U.S. 36% and we are nose-diving to 15%, and we are taking the fiscal capacity out of the government to respond to seniors needs.

Last fall, I told the House something worth repeating. It is the story of a senior who came to my office. He had a letter from the government saying that his pension had been increased 42¢ a month. I am pleased that the finance minister is here to hear this. This man was so upset, he had tears in his eyes. He said, “Not only does the government not give a damn about seniors, but it goes out of its way to insult us by sending us a notice that cost more to post than what it cost in the increase to the government”. He was very concerned.

We faced down the worst recession in years and some credit should go to the government, but Canadians throughout that process were vividly reminded of why we had a social safety net in the first place.

I am pleased to see the government has taken an interest in reviewing the benefits paid under old age security, GIS and CPP. I have to stress that this has also been done with an eye to increasing benefits for seniors.

Repeatedly tonight we have heard references between 200,000 and 300,000 seniors who live below the poverty line. An economist at the Canadian Labour Congress reported that an annual infusion of about $700 million would raise all seniors above the low income cut-off, what is more commonly known as the poverty line.

We heard the Bloc speak about a motion that it had before the House calling for an increase in GIS.

The 200,000 or 300,000 living below the poverty line is a very sobering statistic, but when we consider of that number, 60% are single unattached women, many of them women who never participated in the Canada pension plan because they stayed at home, this is nothing short of a national disgrace. We can do so much more and we must do much more for all senior Canadians.

Today only 38% of Canadian workers have workplace pensions. Nearly one-third have no retirement savings at all. Earlier today the Liberals presented a bill on guaranteeing a charter for the rights of seniors to save. For the one-third of Canadian workers who are outside the umbrella of having a pension plan and cannot save at all, we have to question what the charter would do for them.

More than 3.5 million Canadians are not saving enough in RRSPs, and I am sure the finance minister could back that up. They are not taking advantage of the opportunity that is presented by the government. Seventy-five percent of private sector workers are not even able to participate in a registered retirement plan. Clearly the notion that retirement savings can be adequately accounted for through the purchase of RRSPs has not worked out and requires urgent government action.

In June 2009 the NDP opposition day motion started, in a very public way, a national discussion on the future of our retirement security system. Members in this place today are continuing that discussion.

Part of the discussion from our perspective centred around increasing CPP and QPP funds. I would remind members that CPP and QPP are self-financing, so it then becomes a question of whether Canadians are prepared to pay more for security in their senior years as part of a secure public pension plan. Canadians certainly face insecurity today in the context of their private options, like RRSPs or defined contribution plans, that leave them uncovered or victimized by the market.

We believe it would also be a benefit to beef up CPP. That would be the cheapest way for Canadians and the government to pool risks, take the burden off individuals and secure their senior years. Any voluntary supplemental CPP system would simply not meet the needs of Canadians any more than what an RRSP has done in the past. The NDP believes it would be better to use the resources of CPP and QPP to enhance a retirement system.

I would like to discuss the need that Canada has for a pension benefits guaranteed fund.

Federal leadership is urgently needed to set about working with the provinces to develop a pension insurance regime. This must be done to ensure workers actually receive the retirement benefits they have earned, even if their employer goes out of business.

As I said, we insure our cars and our homes and we have deposit insurance to cover our savings. Why not insure our pension plans? The system would be funded by contributions from federal workplace pension plan sponsors administered by the federal government and designed to ensure efficiency and fairness to all parties.

Another notable model that is worthy of study is the American Pension Benefit Guaranty Corporation, and there are some issues with that. Similar to the Canada Deposit Insurance Corporation, the Pension Benefit Guaranty Corporation is not financed through tax revenues but by premiums paid by sponsors of defined benefit plans, assets from plans that are taken over, recoveries from refunded pension liabilities from plan sponsors' bankruptcy estates and through investment income.

Canada may choose not to follow the American model, but it could create some form of pension insurance uniquely its own or a hybrid of other plans, such as those in Switzerland, Sweden, Germany and Japan and even the Netherlands, which is probably not an option that we would look at here. The government of the Netherlands insures the plans.

Once a guaranteed plan is successfully combined with funding rules or other protection measures, it can effectively perform as a last resort benefit protection measure.

Another clause in our opposition day motion called for ensuring that workers' pension funds would go to the front of the line of creditors in the event of bankruptcy proceedings. My colleague from Thunder Bay was responsible for putting forward Bill C-501. He has worked hard on that file, trying to protect the pensions and severance of workers across the country.

Canadians need to know that there will be a level of pension income for their retirement to ensure that they will spend their final years with financial security and live in dignity.

[Pensions, November 23rd, 2010]

Madam Chair, my friend from the Bloc was speaking earlier about his concerns about companies that have gone under for a variety of reasons, such as AbitibiBowater's and Nortel's issues.

I have said before that we insure our homes, cars and ourselves. Is it not common sense that we should ensure our pensions? The NDP has proposed a national pension insurance plan, which would be funded by premiums paid by the plan holders. I am wondering if the Bloc would support such a measure.

[Pensions, November 23rd, 2010]

Madam Chair, I was pleased earlier tonight to hear the member from York West express her concerns for the 200,000 seniors who live in poverty. I know she has been working with the Nortel workers, as have other members of this House.

In fact, I was on a CBC panel with the member fromMarkham—Unionville where I made the suggestion that the government should consider cancelling the next corporate tax breaks of about $1 billion coming in January 2011 and put the money directly into old age security. The member from Markham—Unionville gave a flat no. I am curious as to what the member would say to that suggestion herself.

The finance minister seems to have a strong opinion here and so he is very helpful to the member I am sure.

[Pensions, November 23rd, 2010]

Madam Chair, the parliamentary secretary talked about the difference between the increase in CPP and QPP and the proposal for a supplemental CPP and he pretty well discounted that. I note recently that Professor Kesselman and Jack Mintz also reached the same conclusions.

We have had discussions on the bankruptcy and insolvency, Companies' Creditors Arrangements Act, CCAA, situation of Nortel, AbitibiBowater and others. In all the dialogue we have had on those issues, there is a more immediate one which is the seniors in poverty that we keep discussing in this place. Does the government have any plans to increase old age security and GIS in the foreseeable future to help people who are in this severe situation?

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

Mr. Speaker, I rise today to speak to Bill C-574, a retirement income bill of rights.

As reform to Canada's retirement system is a key principle to which the NDP is dedicated, I was pleased to hear that my Liberal colleague from York West had tabled a bill relating to pension reform. I guess in my haste, I thought it might be something around the Nortel situation, especially with the long-term disabilities. In fact, when the member spoke earlier today, she mentioned it. Therefore, I was a little surprised with the bill.

However, upon reading the bill, I came away concerned as to what the goal of the bill was.

The bill purports to create a retirement bill of rights within the authority of the Parliament of Canada, which sounds, in principle at least, like something both myself and my party, the NDP, would be pleased to support wholeheartedly. In fact, we proposed, and the House passed previously, a seniors' charter in this place, yet the government has not implemented that.

The provisions of Bill C-574 would apply to retirement plans established by employers that were federally regulated. We heard the Bloc's concerns regarding provincial jurisdiction and companies such as Air Canada, the Canadian National Railways and Bell Canada.

The bill seeks to create a number of individual rights related to pension income and retirement, such as the right to accumulate sufficient pension income for retirement, the right to determine how and when pension income should be accumulated, the right to the full, accurate and timely disclosure of the risks, which is a very important part of the bill. However, I hear people in this place saying that these things already exist.

In principle, this sounds very good. Let us ensure that there is protection for seniors when they do make their investments. However, does this raise one nickel extra in pension value for seniors? I do not think so.

The clauses of the bill that brought about my concern, or kind of a wonderment if anything, are not so much to do with the bill's stated principles, but its lack of execution. As I read the bill, it seemed it must have been hastily put together, as if the drafters ran out of time and had to turn to an earlier draft.

Most of the bill's provisions are declaratory. For instance, it declares rights, but fails to amend appropriate legislation in order to establish them.

The bill calls for increased transparency with respect to the management of pension funds, even though most of these funds, again as the Bloc has indicated, are provincially regulated. It is a good thing again, certainly in principle, but Bill C-574 proposes no amendments to the Pension Benefits Standards Act, or to any other acts that would require amendment in order for the bill to accomplish its stated goals, such as the Canada pension plan, the Old Age Security Act or the Income Tax Act.

Members will know that the Pension Benefits Standards Act currently applies to pension plans of employees working for federally-regulated employers or businesses. Bill C-574 does not give any information nor clarifies how the rights created under the bill would apply to employers or employees regulated under the Pension Benefits Standards Act. The bill also does not propose any amendments to the Pension Benefits Standards Act.

Clause 4 of the bill states that every individual Canadian has the right to accumulate sufficient pension income in a retirement income plan, subject to any reasonable restrictions imposed by a federal law. That is in place now. These reasonable restrictions are not elaborated on nor the federal statutes that contain a number of the restrictions. Therefore, we are left to wonder just how these changes are purported to take place.

The bill is silent on defining what sufficient pension income means.

In the presentation of the bill, the member for York West talked about a goal of 70% of income, which is a goal that is lauded around the world, but very few countries, if any, reach that goal. However, what percentage of pre-retirement income do the Liberals feel is sufficient for Canadians to live a dignified retirement? Is it 60% Is it 50%? The bill does not tell us.

In addition, it seems the bill does not amend or refer to the Canada pension plan, the Old Age Security Act or the Income Tax Act, which also provide for pensions or contain provisions that regulate the amount an individual can transfer into a pension plan. One can only then assume, for example, that the maximum amount a person could transfer into an RRSP or the maximum contributions a Canadian could make to the Canada pension plan would not be changed by reason of Bill C-574.

Moreover the bill also would impose certain obligations on professionals in the financial services field who would administer retirement income plans or who would provide financial advice on retirement plans. Knowing that the financial services sector apart from banking is largely subject to provincial regulation, consequently it is not clear how this Parliament, through Bill C-574, could possibly regulate the financial service sectors.

For these reasons, it is difficult to understand the exact purpose of the bill and especially its financial implications when put into practice. For example, Air Canada has a retirement plan for its employees. If an individual decides to go to work for Air Canada, he or she would accept the work conditions and the benefits established under the collective agreement. It is not clear where the provisions of Bill C-574 would come into effect. Would the bill allow an individual to contribute more to Air Canada's retirement plan than what would have been provided under the employment contract or collective agreement? We do not know. It is difficult to understand how this could be done in a practical fashion.

In short, it seems to me that Bill C-574 should have been a motion. Nevertheless the NDP wants to encourage the other parties to work toward real reform on retirement income systems. In that spirit the, New Democrats will support Bill C-574 going to committee so we can take a closer look at actually what can be done with the bill.

In the meantime I would like to put forward some of the concrete proposals that we have put forward over the last two years such as eliminating seniors' poverty. The member for York West spoke of seniors' poverty. The poverty gap is about $700 million and that could be put forward by the government by increasing GIS to close that gap.

We have talked about strengthening CPP/QPP. Ninety-three per cent of Canadians are already members of CPP/QPP. We want to phase in a doubling of it.

A national system of workplace pension insurance would be self-financing. It would be a mandatory insurance system funded by the plan's sponsors with a payout of up to $2,500 a month.

Let us ensure that the companies in bankruptcies make good on the pensions they owe the workers. Today when companies go bankrupt, the shortfall in the workplace pension plan, which is called an unfunded liability, does not receive priority as a creditor. Workplace pensions are nothing less than unpaid deferred wages. Workers should have the right to receive these wages, especially when the company goes under.

Our Nortel act would put workplace pension plans in the same creditor category as bondholders and other investors.

In bankruptcies workplace pension plans may be wound up and converted into low interest annuities. Pensioners would often be better off if those plans lived on as “going concerns”. We suggested creating a facility adjacent or part of the CPP, which could manage it, to adopt these pension plans.

I have heard the Liberals of late talking about the orphan plans, so I am glad to hear they have been listening to us.

It is time for the government to acknowledge that pensions are deferred wages. These wages should be there in their entirety when an employee retires. They are not bonuses paid to the workers at the end of their working lives. They are part of an agreed upon compensation package for hours worked.

Retirement security has long been a priority of the NDP. In fact, we heard members talk a few minutes ago about 1966. In 1927 the Independent Labour Party, a precursor to the NDP, proposed the first old age pension.

People who have been in this place for a few years will remember that it was the NDP's Stanley Knowles who fought for the Canada pension plan, and it was a minority Liberal government that put that in. If I recall correctly, that was in 1966.

Our party members will continue to use our leverage in this place until such time as all seniors are able to live out their retirement years with the dignity they deserve, that they have earned as part of helping Canada grow to be the great place it is today.

I do not want to totally fault what is coming forward because the words in the bill are good. It is just the actions that are required to implement it. How do we get to the place where we can actually increase the living standard of seniors today, right now. In my mind that is an increased old age security and GIS to deal with the ones below the poverty line of which close to 300,000, or over 60%, are single women. For me, that has always been a national disgrace.