October 7, 1997


The Speaker

We have had quite a bit of information on this matter. I remind all hon. members, with respect, that last week a question of privilege was brought up to which I will address myself in the next short while.

All the interveners seem to be of one opinion. The hon. government whip has stated that the matter would possibly be brought up in the Board of Internal Economy today.

I would like to take some time. Perhaps some information will be forthcoming to me in the next 24 hours or so. I will review everything that has been said today as I have been reviewing with regard to the hon. member for Prince George—Peace River. If it is necessary for me to get back to the House I will do so after a brief delay.

Topic:   Oral Question Period
Subtopic:   Privilege

The House resumed consideration of the motion that Bill C-2, an act to establish the Canada Pension Plan Investment Board and to amend the Canada Pension Plan and the Old Age Security Act and to make consequential amendments to other acts, be read the second time and referred to a committee; and of the amendment.


The Speaker

We have six minutes remaining for questions and comments.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Ted White


Mr. Ted White (North Vancouver, Ref.)

Mr. Speaker, I very much enjoyed the debate that was going on in the last couple of hours. It really demonstrates the difference between a group of people who have not really thought about what they are proposing and some people who have given a considerable amount of thought to what is actually happening.

I gave a statement in the House the other day in which I pointed out that young people today, like the member who was speaking, pay $3,400 a year for 35 years to pick up a pension of about $8,800 a year, when that same money invested in a very modest RRSP style plan for the same number of years would end up with an annuity of something like $92,000 a year.

Members on that side who still think an $8,800 a year pension is good news should give their heads a shake because it is totally ridiculous.

As a secondary effect of these CPP taxes, what does the hon. member feel the impact will be on small business? At the moment, having come from small business myself, I know that every month they have to pay CPP taxes, UI taxes, corporate income taxes, income taxes for employees, business licences, Workers' Compensation Board taxes and capital taxes in B.C.

Could the member give us an idea of the impact on small business of this drastic increase in CPP?

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Jason Kenney


Mr. Jason Kenney (Calgary Southeast, Ref.)

Madam Speaker, I thank the hon. member for his question.

The impact on small business of the proposed payroll tax increases in Bill C-2 will be considerable. Self-employed small business people will face an increased payroll tax burden of some $3,600 a year.

For some hon. friends opposite who are expecting to cash out on the great Las Vegas MP pension scam, $3,600 is not a lot of money. For a lot of people in my constituency it is the difference between being able to take a holiday in a year, being able to take their kids for a trip in the summer, and perhaps being able to hire an extra employee to help them so they can actually go home a few nights a week and spend some extra time with their families. For the people that I know $3,600 a year is an integral part of their quality of life, which will be further eroded by the payroll tax increases in the bill.

As I stated during my speech a direct link between higher payroll taxes and fewer jobs has been demonstrated again and again and again. That is one of the reasons we still have over 9% unemployment, 1.4 million unemployed Canadians, and 17% youth unemployment. If that is not evidence enough that high taxes kill jobs, I do not know what is.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Joe Jordan


Mr. Joe Jordan (Leeds—Grenville, Lib.)

Madam Speaker, I listened to the member for Calgary Southeast. The debate has two levels. Clearly our parties disagree on the function of the retirement system. I think we would all agree on that.

I also marvel at the member's skills in terms of making speeches. He has a lot to bring to the debate, but to simply harp on about the form of the system when what he is really talking about is the function does not do any good.

One thing that disturbed me was when the member spoke of his youth. Clearly I do not know exactly what role that plays in the debate, but he opened the door and I will try to get my rickety old body through it. Just because the member speaks of his youth does not mean he speaks for the youth.

I watched that party across the way during the election. Its advertising strategy seems to be let Canada separate from Quebec. We recently went through a colleague of his going through let B.C. separate from Canada.

When he talks about the younger generation not being willing to pay for some of the deficits that are owed in terms of the plan to the old, I would caution him that generations should not be autonomous.

There is a generation of Canadians that went to war to pay the price for his freedom. He simply stood up and said “my generation now, at our age, doesn't think this is a good deal for us, so forget the older generation Canadians”.

I would like a clear answer from the member. Is he laying the groundwork for the third pillar of the Reform Party, which is youth separation? Am I going to have to stand up here and fight against that? Is that something that the hon. member does not stand for?

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Jason Kenney


Mr. Jason Kenney

Mr. Speaker, I can assure the hon. member that I am a strong federalist as are my colleagues in this party. I do think I speak for a large number of young Canadians.

It is interesting that there are nine members of Parliament on this side of the House under the age of 30 and none on that side of the House. I think that says something.

I said during my speech at the very beginning that I would like to be on record as a young Canadian supporting a strong, fully funded retirement income system which ensures that no Canadians fall between the cracks in their older years.

Therefore yes, I do recognize those obligations and do want to fully fund those obligations. I did say it would not be easy to do that.

In the context of funding the obligations to older Canadians, we can also give more retirement security to younger Canadians at lower cost than what the government is proposing.

That is why I encourage hon. members to vote against Bill C-2 and to support a private mandatory retirement savings vehicle, a defined contribution plan which would give more retirement security at lower cost to my generation as well as to all Canadians.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

John Bryden


Mr. John Bryden (Wentworth—Burlington, Lib.)

Mr. Speaker, this is one time I really regret not having an opportunity to ask a question of the previous speaker, the member for Calgary Southeast, rather than having a 10-minute speech.

The question I would have asked him pertains to his continued attacks on the MP pension plan. One does not like to hear old time rhetoric from supposedly new style politicians.

As it happens, when he attacks the MP pension plan, he alludes to the fact that in the last Parliament the majority of Reform MPs, all but one, opted out of the pension plan. That was by statute. We had to make a legislative change because the pension plan for parliamentarians is mandatory. What has been the case of the MPs of the Reform Party of the class of '97 recently elected?

A change of statute, a vote in this Parliament, is required for the MPs of the class of '97 to have the option of opting out of the MP pension plan. Instead of moving legislation or proposing a private member's bill, what the Reform Party has done is that each one of the class of '97 has written to Treasury Board saying they want to opt out of the MP pension plan.

The problem with that is, as they should know, Treasury Board does not have the power to act. It can only be done by statute.

The question I would like to have put to the member for Calgary Southeast, and I am sorry he does not have an opportunity to reply, is whether he is prepared right now to move a private member's bill, which he can write himself, giving MPs the option of opting out of the pension plan. If the Reform Party were really sincere in all it says, it should have done this long ago.

The rest of my speech has to do with the accountability, a term MPs opposite seem to like to throw around, of what has been said in debate by the opposition parties, chiefly the Leader of the Opposition.

I listened with great care to the speech of the member for Calgary Southwest because I am a great believer that, in this Parliament, when the opposition speaks it must speak constructively. It has an important role in making legislation better.

I did not find the kind of constructive criticism that I would like to have found from the Leader of the Opposition. Instead I found, for example, the Leader of the Opposition criticizing Bill C-2 because it does not have a preamble. He says the reason it should have a preamble is so the courts will know how to interpret the legislation. He actually says there is a legal reason and that every time Parliament passes a statute it has to make its intent crystal clear.

If the hon. member for Calgary Southwest had consulted with a competent lawyer he would have been told that a preamble has no legal force in the courts. When a judge approaches legislation for interpretation he is not required in any way to follow the preamble. The legal profession disparagingly refers to preambles in legislation as the pious hope clause.

When there is a preamble in legislation it is usually a political smoke screen which comes out of the department that writes the legislation, usually the Department of Justice.

I will give the House a perfect example of a misleading preamble. It is the preamble to Bill C-46, which the party opposite fully supported at third reading. That bill had to do with restricting the rights of the accused in obtaining records from therapists in sexual assault trials. Remember that the opposition party completely supported that bill. It had a wonderful preamble which outlined how it would protect the rights of victims, how it would do this, that and the other thing. It outlined how the legislation would obey the charter.

Within months of getting through Parliament it is being challenged in Alberta because it defies natural justice. It destroys the right of the accused to defend themselves. It has also been challenged in and overturned by the courts of Ontario.

This is the case of a preamble which was put into legislation that was fundamentally bad. Learned parliamentarians on all sides of the House supported a law which should not have been supported.

I suggest that the hon. member for Calgary Southwest, instead of proposing that bills have preambles, should be condemning preambles. Legislation speaks for itself clause by clause.

The hon. member for Calgary Southwest talked forever about payroll taxes. The point he was trying to make was that increases to CPP premiums are a tax. He cited all kinds of academics to prove the point that the increases to CPP premiums are a tax.

It is certainly true that no one likes to talk about a new tax, be it in Parliament or anywhere in the country. Certainly the government would prefer not to talk about it as a tax. The reasoning is that because the government does not directly collect the tax one should not think of it as being a tax.

The argument was not fully developed by the hon. member for Calgary Southwest. The argument is if it is mandatory, if it is taken off a worker's payroll, then it is a tax. It is a tax because it is mandatory. The hon. member for Calgary Southwest said the government is not being genuine because it is really a tax.

What do we find later in his speech? He talks about super RRSPs which are mandatory. In other words, the other party, while condemning the government for proposing a pension tax, is proposing a tax itself. It is a matter of semantics. Perhaps it is a misunderstanding of the language. The reality is that a mandatory super RRSP is a tax as well.

Finally I come to the issue of accountability. The Leader of the Opposition condemned Bill C-2 because he felt it merely required annual reports and proper reporting by the investment board which will be responsible for the funds under its charge, which is a huge innovation in the bill to turn the management of the pension funds over to an investment panel which will invest them in the open market and do so wisely.

Again the member for Calgary Southwest missed the point. Instead of condemning the fact that Bill C-2 wanted reporting he really should have gone after the bill and said that this is the kind of reporting we want. I do not blush as a government member to warn my government that I am dissatisfied with this aspect of the bill. What is missing from the bill is an itemized account of what we expect from this investment board when it presents its annual report.

We want to know the remuneration of the executives. We want to know the cost of administration and management. We want to know the investment plan. We want to know investment performance. Rather than condemning the government, and Bill C-2 because it wants annual reports, the Leader of the Opposition missed an opportunity for valid criticism and he has left it again to the government backbenchers to warn the government that it has not fully examined the bill. I hope the committee will look very carefully at this whole matter of what kind of accountability there should be.

I also listened very carefully to the remarks of the member for Sherbrooke. He is the leader of the fifth party, I believe. We find Sesame Street economics. This member condemned the bill because it took $11 billion out of the economy over six years. Somehow he does not seem to understand that this investment board is going to reinvest it in the economy, in the open market. It will reinvest the money in Canada.

Later the member for Sherbrooke complained that he wanted RRSPs to be permitted to invest 50% in foreign investment instead of 20%. He is proposing that Canadian pension funds be invested outside Canada. He is not interested in investing in Canada, and no wonder. That party did not succeed very well in the election of 1993.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Paul Crête

Bloc Québécois

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ)

Madam Speaker, I am pleased to speak today to this bill that will finally bring the CPP up to date. It must be admitted that the existing plan has a few shortcomings and is in need of improvement. There is certainly no need to replace it with the sort of formula the Reform Party is proposing, but adjustments are in order.

I think it is also important for those Quebeckers listening to know that very few Quebeckers are affected by the CPP, because a similar plan, the Quebec pension plan, was set up at the same time as the CPP. This evokes memories of a time when some form of co-operation with the federal government was possible.

Members will recall the Pearson era, when Quebeckers were allowed to create the Quebec pension lan, and even to make original contributions, such as the Caisse de dépôt et placement du Québec, an idea which the government has picked up on in the new bill before us today.

The only Quebeckers affected by the CPP are those who have paid CPP premiums, whether they live in Quebec or decide to move there, as well as members of the Canadian Armed Forces and the RCMP. Approximately 12,000 Quebeckers are affected by the plan.

For most Canadians, however, these are significant changes. The increase in premiums will reach 9.9% in 2003. We understand that this increase is due to adjustments required to ensure that the plan can meet the objectives for which it was created.

I think it important to point out that there have been many shortcomings in how the plan's money has been built up in the 20 years it has been around and that we thought the present bill needed to be improved in this regard. In this sense, the Canada pension plan investment board seems like an interesting idea. It is not too direct a market competitor for the Caisse de dépôt et placement because it does not actually have an economic mandate. Its only mandate is to ensure that the funds are managed as well as possible. As a matter of fact, there were major deficiencies in this respect.

I would like to add that I am somewhat surprised by the Reform amendment where it says that the system will be even more unfair to young people when in fact the proposed premium increase will come mainly from the pockets of the baby boomers, that is to say those who are presently aged between 40 and 55, and I am one of them.

It is normal to some extent that we pay more. Indeed, had corrections not been done, we would have ended up receiving benefits for which we would not really have paid premiums and nothing would have been done to ensure that younger people do not have to pay disproportionate amounts for what we, the so-called baby boomers, will be entitled to in terms of benefits.

It seems to me that the position of the Reform Party and their amendment are untenable. The purpose of this bill is not to reform the plan at the expense of the younger generations, but rather to reduce intergenerational inequity by ensuring that everyone pays his or her fair share.

What is missing in this bill and is of great interest to me is mention of what will become of the seniors benefit, commonly called old age pension. Under the current pension plan, the various sources of income available to those eligible for benefits because of their age include private retirement plans such as RRSPs and supplementary pension plans. There are also the public plans, namely the Quebec pension plan and the Canada pension plan. Then there is old age security, the guaranteed income supplement and the spouse's allowance.

Once this bill on the CPP is passed, it will be very important to hold a true consultation across the country regarding the seniors benefit. What little information we have received so far on the government's proposal involves very fundamental issues for the future of pension plans in Canada.

There is, among other things, the universality of benefits. Many people who had planned their retirement based on an existing plan will face a situation different than the one they expected, simply because the government has decided, with this bill, to protect those aged 59 and over. The government should ensure that much younger people have the option to choose between the existing plan and the one that will be implemented in the months to come.

The plan protects those who are already in the current system. These people will not be affected. This is a good thing, but we have to make sure that those who will have to live with the new plan can do so under acceptable conditions. This is why I call upon the solidarity of older people, of those already covered by the existing plan.

The initial reaction of a person aged 65 or 70 could be: “I am protected under my plan. I don't necessarily need to be worried about the coming reform”. However, those who can give the most intelligent opinion, the one most closely reflecting day to day reality, are the people who are 65 or 70 years old today and are living with the current program, those who receive the guaranteed income supplement, who can tell us how it would be if they had to live from day to day on an income that came solely from the new form of allowance the Government of Canada is proposing, and can tell us there would be major problems.

This consultation would, therefore, have to be transparent, and carried out in such a way that everyone may grasp the issues and that all strata of society may have a chance to be heard. The new pension plan is going to be very important to the baby boomers, but it is also going to be important for those who are 20, 25 or 30 years old today, because this will be their opportunity to define the framework under which they will have to live in the years to come.

It is important to look at the Canada pension plan in the perspective of this reform of the seniors benefit.

I would like the government to be more attentive in the next consultations than it was in previous ones, such as the consultations on the employment insurance reform. If the past were any indication of the future, it would be a cause for concern.

The Standing Committee on Human Resources Development and the Status of Persons with Disabilities toured Canada and visited all the provinces to hear what people thought of the proposed employment insurance plan. The consultations did not lead to the results expected.

Again today, we see basic common sense in the auditor general's report, but considered, calculated, assessed and providing the same result as the committee's consultations. In other words, the employment insurance plan must be managed by its contributors—employers and employees—and government must provide an accounting of the way it determines contribution amounts and ensure that the surplus is properly directed to ensure that job creation objectives are met.

The type of consultation done for employment insurance should be done for seniors pensions, but with greater guarantees that the government will listen to those consulted, who will tell us what they want in a benefits plan for seniors, so that after the Canada pension plan is reformed with the change to seniors benefits, we are sure that our seniors have an adequate pension plan. Perhaps the most respectful way a society can acknowledge the contributions of its citizens is in the treatment it accords its seniors.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Larry McCormick


Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.)

Madam Speaker, thank you for the opportunity to speak on Bill C-2. I also congratulate on you your appointment.

Bill C-2 amends the Canada pension plan and secures the future for all Canadians. No government has ever consulted more widely across the country than the Liberal government. We consulted all Canadians from sea to sea on the future of the CPP and on Canadians' vision for the future of the CPP.

Now Bill C-2 allows the CPP to be an investment for Canadians, by Canadians and in Canada. This will be a win-win situation and we will not burden future generations.

My hon. colleague who spoke before me talked about our extensive consultations with the HRD committee, on which he was a very hard working member. The social security review was good and much will come from it. We have set the direction for social security into the next century.

Today we heard the Reform party attack everything we are doing. I commended the hon. member from Quebec on his good attendance and good work in committee. The HRD committee set an all time record for the amount of hours spent here in Ottawa and on the road. I have to disclose that Reform members were not there to listen to Canadians.

It is shameful that they took this opportunity to cross the country and hold their own town hall meetings and then bring the reports back. Reformers are only wanting to represent the views of their own members and not of Canadians.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

An hon. member

We could not get a hearing before the committee.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Larry McCormick


Mr. Larry McCormick

The hon. member opposite says he could not get a hearing before that committee. When we were in Calgary for two days there was a lot of opportunity for walk-ins. If the hon. member had been there he could have been heard.

Last February a federal-provincial agreement was reached on changes to ensure that the Canada pension plan would be sustainable in the future and would make it more fair and more affordable for all Canadians.

The changes are the result of the latest statutory review of the CPP that the federal and provincial governments, as joint stewards of the plan, began in 1995. They reflect what was said during extensive public consultations that were held across Canada in 1996. The key recurring theme was that Canadians believe in the CPP and they want it preserved.

Most participants believe this can be accomplished by strengthening the plan's financing, improving its investment practices and moderating the growth in costs.

This agreement answers the concerns of the residents of my riding and of most Canadians. This is a very balanced approach.

Federal and provincial ministers agreed on a three part approach to restore the financial sustainability of the CPP and make it fairer and affordable for future generations by moving to fuller funding; by accelerating contribution rate increases now so that it will not have to exceed the 10% for future generations; improving the rate of return on the CPP fund by investing it prudently in a diversified portfolio of securities at arm's length from the government; slowing the growth by tightening the administration of benefits and by changing the way that some are calculated.

The following important features of the Canada pension plan remain unchanged. Anyone currently receiving CPP retirement pensions, disability benefits, survivor benefits or combined benefits will not see these benefits affected. Persons over the age of 65 as of December 31, 1997 who elect to start CPP retirement pensions after that date will also not see these pensions affected.

All benefits under the CPP except the one time death benefit will remain fully indexed to inflation. The age of retirement, early, normal or late, will remain unchanged.

Building up a larger fund, fuller funding and earning a higher rate of return through investment in the market will help pay for the rapidly growing cost that will occur once baby boomers begin to retire. This is what Canadians have asked the government for, to ensure that their Canada pension plan will be there in the future.

Accordingly, the Canada pension plan will move from pay as you go financing to fuller funding to build a substantially larger reserve fund.

Contribution rates will rise over the next six years from the current rate of 5.85% to 9.9% and then remain steady instead of rising to 14.2% in the year 2030 as predicted by the chief actuary. In dollar terms an employee earning $35,800 a year now pays about $945 in contributions. In the year 2003 that employee will contribute about $1,635. Yes, that is $450 more than what is currently legislated for that year. However, by the year 2030 employees will be paying $565 less a year than if we had not acted now. Increasing rates more rapidly now will cover the cost of each contributor's own benefits plus a uniform share of the unfunded burden that has built up. These costs will not be passed on to future generations.

There will be positive changes to the benefits and to the administration of the CPP. Changes proposed are how benefits will be administered and calculated in order to moderate the growth of costs. By the year 2030 costs will be reduced by just over 9% compared to what they otherwise would be by then.

Stewardship and accountability are the most important facets of the CPP. To improve stewardship of the CPP and provide for more accountability so that the sustainability of CPP is not again put at risk, federal-provincial reviews will be required every three years rather than every five. Any future benefits will be fully funded.

In any future statutory review of the plan, new default provisions will identify the steps necessary if the chief actuary calculates the CPP to be no longer sustainable at the steady state rate and ministers cannot reach a consensus on actions to sustain the plan.

Canadians will now receive regular statements about their pensions with the intent to provide annual statements to all contributors as soon as possible. The CPP investment board will provide quarterly financial statements and will report to Canadians on the performance of the fund. It will hold public meetings at least every two years so Canadians can know what is going on in every province. CPP annual reports will provide more complete information and will explain how administrative problems are being addressed. Other issues are up for review. These changes will restore the CPP sustainability and make it more fair and affordable for all future generations.

Partial pensions. Many Canadians want to make a gradual transition to retirement. This opens up the possibility of more jobs for younger Canadians. This will be made possible by providing partial pensions during the transition while Canadians can continue to work and earn further pension credits. We are going to examine this and I hope we can make great progress.

Survivor benefits. Compared with today when 68% of working age women are in the workforce, in the past, when the CPP survivor benefits were designed, most women did not work outside the home. Ways to update survivor benefits to reflect changing realities and the needs of today's families will be examined.

In response to misinformation that is being supplied across Canada by the official opposition I want to repeat that there is no change in the age of retirement. There is no change in the contribution rates past the 9.9% that is being set now. It will be held steady. We will know what the rate will be in the future. The year's basic exemption, which is now $3,500, will be frozen at $3,500. There is no change to the maximum pensionable earnings. All benefits except the death benefit will be fully indexed.

Again I want to say that good government makes a difference. This government has certainly listened to Canadians. We have held hearings in every riding that we represent and we are happy to talk to Canadians.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Rob Anders


Mr. Rob Anders (Calgary West, Ref.)

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.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Susan Whelan


Ms. Susan Whelan (Essex, Lib.)

Mr. Speaker, I am pleased to be able to participate in the debate today on such an important issue for Canadians.

In recent years, as hon. members may know, a number of social, economic and demographic trends have developed, such as declining birth rates, increased life expectancy and lower than anticipated growth in productivity and wages, which, if unaddressed, could challenge the sustainability of Canada's public pension system.

This is why we committed ourselves to strengthening Canada's public pension system. The legislation that we are debating, Bill C-2, will enact the joint federal-provincial agreement reached last February to change the Canada pension plan, or CPP as it is known. It is legislation that will place the Canada pension plan on a solid financial footing.

The first point that I would like to make is that whatever the circumstances, CPP will be there for Canadians when they need it. In fact the very reason we are making changes now is to ensure that it is there in the future.

In his February 1995 report, the chief actuary clearly showed that without modification to the Canada pension plan, the CPP fund would be exhausted by the year 2015 and that contribution rates would have had to soar to over 14% to cover the rapid growth in cost. That would be a 240% increase.

It is only through responsible action now that we can avoid bankruptcy and truly intolerable CPP rates later, an increase now with a number of generations sharing the burden or an increase later for our children's generation.

Before moving to make changes to CPP, we held extensive consultations with Canadians. During 33 sessions held in 18 cities throughout Canada, more than 270 formal presentations were made to allow the government to find out what Canadians thought should happen to their plan. Canadians had no reservations in their expectations. They wanted the plan preserved, its financing strengthened and its investment practices improved. We have done that.

I would like to take a moment to tell my constituents what remains the same under CPP legislation and how the plan is being preserved. Anyone currently receiving Canada pension plan benefits, be it retirement pensions, disability benefits or survivor benefits, can rest assured that they will not see these benefits affected in any way.

Anyone currently receiving Canada pension plan benefits will not see these benefits affected in any way. All benefits now and in the future will remain fully indexed to inflation. The ages of early retirement, normal retirement or late retirement all remain unchanged.

What has changed? Let me try to describe the changes today. Effective January 1, 1998 retirement pensions will be based on the average of the year's maximum pensionable earnings in the last five years prior to starting the pension. In the past they were based on a three year average. The amount of the pension will continue to be dependent on how much and for how long a person contributes to the plan.

The administration of disability benefits will be further improved. The appeal process will be streamlined and the legislation will be applied more consistently. To be eligible for disability benefits workers must have made Canada pension plan contributions in four of the last six years prior to becoming disabled. Presently a person needs to make Canada pension contributions in two of the three years previous or five of the last ten years in order to be eligible to apply and qualify for disability benefits.

The rules for combining the survivor and disability benefits and the survivor and retirement benefits will be largely the same as those in existence before 1987. However, changes will limit the extent to which these benefits can be added together.

The death benefit will continue to be equal to six months of retirement benefits but up to a maximum of $2,500 rather than the current $3,580. The option to eliminate the death benefit was rejected by the federal and provincial governments together.

Through enacting the legislation after careful consideration with Canadians the government will ensure that the Canada pension plan is there for future generations, that it is there at an affordable premium and that the benefits are guaranteed for those future generations. Due to our plan some 75% of the reduction has been made on the financing side and only 25% on the benefit side.

The CPP will continue to be affordable. Canada pension plan contribution rates will increase in steps to 9.9% by 2003 or 4.95% for each employer and employee and then remain unchanged instead of reaching the 14.2% projected by the chief actuary for the year 2030.

The Canada pension plan will move from pay as you go financing to fuller funding to build a much larger reserve fund. It will grow in value from two years of benefits currently to about four or five years of benefits. It should be noted that the yearly basic exemption, the first $3,500 of earnings on which no contributions are paid, will be maintained and frozen.

Without these changes future generations would have to pay 14.2% for the same benefits we are currently paying only 5.85% for.

Until now CPP contributions not needed to pay for benefits have been lent mainly to the provinces at the federal government's interest rate on long term bonds. Under this new legislation Canada pension plan funds will now be invested in a diversified portfolio of securities prudently and at arm's length from government.

This means that Canada pension plan funds will be invested in stocks, bonds including provincial bonds, and mortgages. Instead of being lent in their entirety to the provinces we are now in the position with the passing of the legislation to make the investment philosophy of the Canada pension plan more market oriented. This is consistent with investment policies in most public and private pension plans in Canada.

Based on prudent assumptions the Canada pension plan can secure an average long run return of almost 4% a year above the rate of inflation. That compares with only 2.5% assumed under the current policy of the chief actuary. As well, from now on whenever provincial governments borrow from the Canada pension plan they will pay the same rate of interest that they pay on their market borrowings. That is making smart use of public money.

During cross-Canada consultations Canadians told us they wanted the Canada pension plan to run like a private pension plan. In response we have provided that the fund will be managed independently from government by a 12 member investment board. The investment board is accountable to Canadians and their governments through regular reports.

The board will be subject to investment rules similar to other public and private funds in Canada. Therefore the transparency for Canada pension plans of the future is the same transparency in private plans throughout the rest of Canada.

It should be noted that Canadians will start to receive regular statements on the pensions they are earning. We intend to provide annual statements to all contributors as soon as it is feasible. Canadians will receive an annual statement which will show how the Canada pension plan is progressing. Canadians will have the opportunity to see year to year the retirement future their contributions are building.

Last February in the House of Commons the Minister of Finance tabled the first draft of Canada pension plan legislation, in case the member for Calgary West was unaware. In response to the comments received further refinements were made to the legislation and revised draft legislation was released in July for further comment.

The measures proposed in the bill today will become law once the legislation is passed by parliament and support orders in council are received from the provinces that are party to last February's agreement. This will permit the changes to take effect on January 1, 1998.

Finally I would like to take this opportunity to answer some of the critics of these changes. There are some who advocate scrapping CPP and moving to a privatized system with mandatory retirement savings plans. I believe they do not understand two things.

First and foremost, Canadians want the Canada pension plan to remain. Canadians want a public pension plan that is available to everyone.

Second, the Canada pension plan provides protection not available through private RRSPs such as disability benefits and survivor and death benefits.

The Canada pension plan is part of our public pension plan system along with old age security and guaranteed income supplement. Together these three pillars ensure that all our eggs are not in the same basket. The changes reflect the long held Liberal values of providing stability for and protecting those in need.

It was a Liberal government that introduced the Canada pension plan over 30 years ago in 1966, and now this Liberal government is making the necessary changes to ensure the future of the Canada pension plan for all Canadians. This allows all Canadians to prepare for their future together.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Jim Gouk


Mr. Jim Gouk (West Kootenay—Okanagan, Ref.)

Madam Speaker, my comments are sparked in part by the last member who spoke and some of the other members who have spoken today, in particular those on the Liberal side.

I find it very ironic and kind of sad that they would stand and talk about Reform's plan when obviously they have never read it. They have never opened the book, or they read it and they chose to ignore it, to say things they know are not stated in the book and to ignore the things that really are there.

It is unfortunate they would prey on the fears of Canadians, those who have already retired and those approaching retirement, to try to sell a very bad plan of their own.

It has been mentioned today that it started at 5%. They were told it was a wonderful plan and that it would never go up. Now it is doubling from that early start.

I want to speak about one aspect of the plan, the impact of the raising of the payroll taxes to 9.9% on business, in particular small business.

Speaking again of false comments made by the government, its members seem to want to imply that Reform's plan is to scrap CPP and instead simply have people put their money into RRSPs.

Members who think like this are the ones who have not actually read the plan. The plan is an RRSP type system changed over from the existing Canada pension plan. It is not paid out of rich profits from a high paid job but in fact paid by the same deductions that are going into the Canada pension plan right now, money that has been squandered, money that has been spent and still results in a $600 billion liability on the part of the Canada pension plan. I just want to make sure people understand that.

I hope hon. members opposite listen to this example. I welcome heckling when I am speaking. I actually feed on it. Sometimes it gives me some good stuff to carry on with in my speech. When all their friends are away, I hope they get a chance to think of this one point personally and consider it from a non-partisan point of view.

Before I came to this place I had a small construction company that built about eight houses a year. During that time I was doing other things. My company, which was primarily myself, made a profit of about $6,500 per house.

I employed carpenters, plumbers, electricians, excavation people with their equipment, roofers, drywallers and any number of people. I bought supplies from people all over town and throughout my region. It was a good economic engine for the small community and the region I come from.

I had three people who virtually worked full time for me. If I consider the number of people who worked for me as I needed them for drywalling, roofing or some other components, it worked out to be the equivalent of about 10 full-time positions. It was as if I had 10 people full time who, if they had the particular talents, would have been able to do all the jobs. It would have created an annual income for those people.

According to the Liberal plan the wages I paid those people would be subject to this new payroll tax for the purpose of CPP. It would amount to $650 per head. What would be the impact on a small company?

As I said, I made about $6,500 a house and I had the equivalent of 10 full-time positions. As the employer my share would have been $650 times 10. The gross profit for one-eighth of my productivity as a builder would have gone to pay the increased CPP premiums.

When I had people working for me they liked to maintain some form of standard of living. They were pretty reasonable people. If I was still running my company and this increase came along, I suspect many of them would have come to me and said “We know times are tough. We know that the economy is tight. We are not looking for a raise but we certainly cannot afford a cut in pay. What we need is enough of a raise to pay the increase in our CPP premiums”.

They were hard workers. I would have been hard pressed not to have given it to them, but had I done so it would have been another $650 per employee for the equivalent of 10 full-time employees or $6,500, the gross profit from another house.

This was a viable small business and the increase in the Canada pension plan premium, a payroll tax, would have taken 25% of my gross profits from that construction company.

Government members will say that it is a government bill and they have to vote for it. I understand their dilemma. A member of the House who does not happen to belong to the Liberal Party any longer voted according to the way his conscience and his constituents directed him. Consequently he sits on this side of the House because the Liberal Party threw him out. They are not allowed to vote the way they think is in the best interests of Canadians in general or their constituents in particular.

I hope government members will raise this matter in caucus, speak to the minister and speak to the critics who deal with the Canada pension plan. If that is what would have happened to the small business I operated in Castlegar, in the interior of British Columbia, think what it will do to countless hundreds of thousands of businesses across the country.

The Liberals talk about job creation. How in God's name can jobs be created when they increase a payroll tax on people which will ultimately result in 25% of the profit from a small company going out the window? It will not work.

I hope that each of those members will say that they did not look at it from the point of view of employment. They are saying they looked at it from the point of view of rescuing the plan. There are much better ways to rescue the plan than simply throwing more money at it and in doing so destroying the economy of the country by destroying a lot of small businesses.

Instead of spouting the rhetoric thrown by the minister down to them they should read Reform's plan. It is an alternative. It is not the destruction of a pension plan. It is looking at it from the point of view that we have to ensure an income for people in their retirement and we have to make it affordable not only in terms of premiums but in job creation and sustainability. They look at it and say the 9.9% now will be the be all and end all to save the plan. It is the same thing that Liberals of days gone by said when it was brought in at 5%.

I hope my speech gives the Liberals something to think about. I appreciate the attention Liberal members have paid and I truly hope they will reconsider this in a non-partisan manner. If they do, I promise that I will not try and roast them by saying they were wrong. I will congratulate them on their re-examination and their concern for Canadians instead of just following the rhetoric of a few.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Brent St. Denis


Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)

Madam Speaker, I congratulate you on your new office. This is the first chance I have had to speak with you in the chair.

As I listen to members opposite, particularly members of the Reform Party, it becomes more clear that we are dealing with two very fundamentally different visions not only of the Canada pension plan but of the country.

History would make it clear that Liberal governments have put people and their communities first. I suggest the Reform Party would take us back decades when it was not so important that people and communities worked together for the good of all.

The Reform Party attempts to make an issue of sustainability with regard to the changes to the CPP and the program being in place in the future. I think it has much more to do with the kind of society we want for ourselves, our children and our grandchildren.

Throughout the last term of office and through the election campaign I did not hear much from the constituents in my riding of Algoma—Manitoulin calling for a privatized super RRSP for the future. If I heard concerns about the pension plan for the future they were to make sure that what Canada has such as the CPP and OAS will be there for us when we retire and for our children and our grandchildren. Their worry centred around the sustainability of the program and that it be available in the years to come.

While Reformers can argue that a super RRSP, according to their arithmetic, will be better for Canadians, when we get to fine details it is a much different story.

I will cite a couple of examples. The Reform Party claims to be the party of families, a fact which is quite disputable. Its proposal would not cover workers who take leave to look after children, which runs contrary to the fact that CPP does. Working poor families would have difficulty paying mandatory RRSPs and the extra insurance to replace the disability and death benefits provided by the CPP.

In a society where there is a general consensus to move toward a national drug plan, a pharmacare plan, and society is moving toward sharing the wealth in a reasonable way, Reform would have us go back to the beginning of the century when it was quite the opposite. In its plan we would forget the working poor family, the spouse who for one reason or another had to stay home to take of children. I use this as only one example of where the Reform plan would break down and the CPP would be there for spouses who stay home for children.

Reformers also neglect to point out that in a super RRSP plan a tremendous public subsidy is required. As we all know, when you invest in an RRSP, as all Canadians are able to do if they choose to and have the funds to do so, there is a commensurate tax reduction to reflect that investment.

The current system costs billions of dollars per year. It is a system whereby Canadians are redistributing their wealth. In a system totally dependent on RRSPs those with most of the wealth would be benefiting from most of the tax loss as a result of the tax deduction. In the current system which is a balance of RRSPs, Canada pension plan, OAS and the supplement, there is a broader range of pension options available to people. If we provide a pension plan based solely on the RRSP system there will be a much greater demand on the tax system than what we see right now.

It is incumbent on the Reform Party to make it clear that its system does not come without tremendous cost. I submit to the House that the cost will be much greater than what we are seeing right now. The CPP is not intended to be the only source of income for seniors, although by necessity it is for many. The overall pension system in Canada is designed to provide Canadians with a chance to blend several vehicles as they prepare for their retirement.

Much is made about the fact that premiums are going up. The Reform Party uses the word tax. Tax is not the correct word. The correct word is investment. When an employer through a payroll deduction makes a contribution to the CPP he is making an investment in the country for sure but also in the workers who work for him. When the employee makes a contribution to the CPP he too is making an investment.

The previous speaker from British Columbia mentioned his construction firm and the number of houses he made per year. If he asked his employees they would not see it unreasonable that 10 employees would see their premiums matched by the profit, just the profit on one of eight homes. They might see that simply as sharing the benefits that come with a capitalist society.

If we were to move in the direction that is proposed by the official opposition we would see a deterioration in a significant way of Canada's social safety net which is made up not only of our pension system but of the employment insurance system and the health care system.

The pension system is one of the very important three pillars that make up the social safety net. It is in the nature of our society and the reason we are envied throughout the world, it is in our nature to be compassionate to one another. That compassion is reflected in the fact that our pension system makes sure that in every reasonable case Canadians can provide some income for their pension.

When it comes to the cost of administering the Canada pension plan versus millions of private super RRSPs I do not think it takes rocket science to figure out that administration costs would be approximately $20 per person through the CPP versus $150 or $200 per person in a private RRSP plan. When it is all added up, a 10:1 ratio in favour of the CPP makes a lot more sense.

Why should we be spending pension dollars unnecessarily on the administration of a pension plan? The fact that these amendments include the creation of a board to ensure the CPP fund is invested in the most appropriate way for Canadians makes a lot of sense.

To distribute the administration of these funds to hundreds or thousands of fund administrators across the country makes very little sense at a time when we should be looking at better ways of spending our money. We have made changes that will ensure the sustainability of the CPP into the 21st century.

Canada's current government has seen fit to take charge of this issue and to move us forward in a way that most industrialized nations have not yet be able to do. I am pleased and proud to support the government's initiatives. To do contrary would be very irresponsible.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

The Acting Speaker (Mrs. Thibeault)

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Waterloo—Wellington, children; the hon. member for Vancouver East, post-secondary education; the hon. member for West Vancouver—Sunshine Coast, foreign affairs.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Maurice Dumas

Bloc Québécois

Mr. Maurice Dumas (Argenteuil—Papineau, BQ)

Madam Speaker, I am pleased to speak to Bill C-2 on the reform of the CPP.

As is usual, I would like to begin by thanking all those in the riding of Argenteuil—Papineau for their vote of confidence in once again sending me to represent them in this 36th Parliament. I will continue to uphold their rights as staunchly as I have in the past.

This reform of the Canada pension plan is of particular interest to me because I am the Bloc Quebecois critic for seniors and also because it affects me as a member of that generation.

I have risen many times in the House to uphold the rights of seniors, one of society's most vulnerable groups. The Bloc Quebecois agrees in principle with the contents of Bill C-2 at second reading.

I am now going to give a brief history of this bill. The government introduced a preliminary bill in February 1997, followed by a revised bill last July. Amendments proposed by the federal government were approved by at least two thirds of provinces representing two thirds of the Canadian public, as required by law. Eight provinces in all, including Quebec, approved the proposed changes. Only British Columbia and Saskatchewan voted against.

Generally speaking, the Bloc Quebecois is in agreement with the primary objectives of this reform, with a few reservations. Indeed, I cannot help but mention that, on March 9, 1994, I asked a question to the then Minister of Human Resources Development concerning the reform of social programs.

As the official critic on seniors issues, I also made the following statement in the House, again in 1994, and I quote:

Mr. Speaker, my question is for the Minister of Human Resources Development.

On March 9, the minister indicated in this House that he wanted to review old-age security programs. Following the general outcry caused by this announcement, the Prime Minister decided that the review would be limited to the Canada Pension Plan and RRSPs. This review was to be tabled last June but the government has clearly delayed it.

My question is this: Can the minister tell us why the government has delayed announcing its intentions by tabling the review promised for last June?

The following was part of the answer was:

We are presently speaking with a number of groups and organizations throughout Canada, particularly as they represent seniors, to get their point of view.

Allow me to wonder what the government's true intentions were, since it called an election before making good on that commitment. However, we realize that some changes have become necessary, because of the financial implications and of the plan's sustainability.

It had been forecasted that there would be no money left in the fund by the year 2015, at which time contribution rates would have gone up from 6% to 14% for the Canada pension plan, and from 6% to 13% for the Quebec pension plan.

The reform is also more of a concern to Canadians than to Quebeckers, since less than half of one per cent of Quebec residents receive CPP benefits.

So, the bill proposes the establishment of the CPP investment board, which will be quite similar to Quebec's Caisse de dépôt et placement. The Quebec government introduced Bill 149 to deal with the Quebec pension plan and to amend various related acts.

Allow me to reiterate the remark made by my hon. colleague from Mercier, who indicated that the Government of Canada and every province except Quebec should have taken Quebec's lead in 1964-65 when it established the Caisse de dépôt et placement.

While the Bloc Quebecois supports this reform's objective, which is to preserve this public pension plan, increasing contribution rates faster than initially planned will cause an increase in benefit funding. We believe that this in turn will reduce intergenerational inequity by charging more to baby boomers, who, generally speaking, have another 20 years to put in on the labour market.

I would also like to emphasize the changes proposed by the federal government with respect to the disability pension. Under an existing ministerial directive, any person over the age of 55 who is unable to perform the duties of his or her own job can be declared disabled. Now the federal government wants to repeal this directive, thereby making the administration of the plan much stricter.

We have never had any such directive in Quebec. The federal government wants to limit eligibility to those who have contributed to the plan for four of the past six years, which should make the plan considerably less accessible.

In Quebec, those who have contributed for two years out of the past three, five years out of the past ten or half of the contribution period are eligible for disability benefits. Unlike the federal government, the Government of Quebec is about to recognize a proportionately larger number of persons with a disability. The Bloc Quebecois cannot support this part of the CPP reform.

The Reform Party's proposal to establish a super RRSP is based in part on the model developed in Chile. According to the example provided by this country, however, the administrative costs of such a system are far higher than for the present ones. The Quebec pension plan devotes the equivalent of 1.7% of the amount paid out in benefits to plan administration.

In this system of super RRSPs, the government will have to guarantee an acceptable base income at the time of retirement, in the form of either a minimum pension or a separate assistance plan. In both cases, considerable costs are associated with this type of guaranteed minimum income.

This Reform Party position leads me to the position of the government, which is trying to worm out of it by shifting the administration of a government plan to a local administration. The Reform Party proposals will enable the government to assume the same attitude toward its responsibilities, as the example of ADM, Aéroports de Montréal, clearly illustrates.

As the member for Argenteuil-Papineau, I have spoken out on numerous occasions in defence of the development of Mirabel airport, which is located in my riding.

In order to understand the similarities, we must start with a brief review of the history of ADM. This is a not-for-profit body, or as it states in its letters patent, a corporation without share capital, constituted under part II of the Canada Corporations Act. The government is washing its hands by handing the airports over to this body, because it refers any taxpayer claims to it.

The Reform Party proposals relating to the reform of the Canada pension plan place the federal government in a similar position, since it can always answer that, in future, this plan is privately administered and is similar to the registered retirement savings plans.

The Bloc Quebecois has, moreover, never called for termination of the Canada pension plan, and I would refer you to my speeches in the House, which have always been along the same line: do not touch seniors rights.

The younger generations must also be able to benefit from a public pension plan. Our approach is the opposite of the Reform Party's.

I wish to repeat my position on seniors rights and to point out that October 1 of each year will always be a memorable day, because the United Nations have designated that day to mark the important role seniors play in society.

As well, the UN has decreed 1999 to be the international year for paying homage to seniors. Its theme, “Toward a society for all ages” is aimed at raising public awareness of the essential role seniors play in all sectors of activity.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

John Richardson


Mr. John Richardson (Parliamentary Secretary to Minister of National Defence, Lib.)

Madam Speaker, I am pleased to rise today to challenge the flawed reasoning by my opponents across the way and to demonstrate why our efforts to reform the Canada pension plan are far superior to any of the opposition plans and are much preferred to doing nothing.

Our plan is exactly the kind of preventive action that Canadians demand from their governments to avert future crisis in the Canada pension plan. While our opponents would rather we do nothing and let the program collapse, we are moving forward in a decisive way.

Before I reiterate the benefits of the government's well considered plan, I will refute the feeble assertions and the rhetorical rantings of our opponents.

When we came to power in 1993 we inherited a mismanaged plan from the Conservative government of the day. The procrastination of the Conservatives showed their unwillingness to act. If they had acted to repair the Canada pension plan in preparation for the growth in seniors then, we could have capitalized on the massive economic boom of the late 1980s. Instead, they did nothing. They believed that the issue was best left for future generations.

In a similar way the Tories ran their platform in the last election, they essentially said they would do what we would do but they would put it off longer and make more substantial increases in the future. Apparently they were not ready to let the future begin for Canada pension plan reform.

Yesterday I heard the NDP critic, the hon. member for Kamloops, compliment our efforts to reform the Canada pension plan as the economy changes. I thank him for his support of our plan and remind him that when he has the conversation on the Canada pension plan with his parents they or any other senior today will not be affected by any changes in the plan. We can put that yellow herring aside.

The NDP's plan during the election was just not practical. It wanted to maximize the payout while limiting the potential growth in the fund and its viability. This meant that some day Canadians would be forced to borrow to cover the difference or abandon the plan. This we find irresponsible.

This brings me to the Reform plan and the super RRSP. This is not what Canadians want. The Reform plan would break the covenant that was laid down when workers first began to pay into the pension plan in 1966 by breaking the pledge made to those workers by previous governments that the Canada pension plan would be there for them when they retire.

The mandatory Reform plan calls for higher increases in premiums, higher administrative costs and an additional private cost by Canadians to cover the private insurance for disability and death coverage. Reform plans to take this away.

In total it adds up to higher payments for young Canadians than our plan. In the name of intergenerational equity espoused by the member for Calgary Southeast, their fresh start on pensions is a false start for young Canadians.

In addition, the Globe and Mail speaks of the plans already under way. The future reform of Canada pension plan would enable the baby boomers out of the work force to reduce the unemployment of young having difficulty—

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

Ken Epp


Mr. Ken Epp

Talk about your own plan instead of ours.

Topic:   Government Orders
Subtopic:   Canada Pension Plan Investment Board Act

October 7, 1997