Ms. Diane St-Jacques (Parliamentary Secretary to the Minister of Human Resources Development, Lib.)
Madam Speaker, thank you for giving me the opportunity to express my point of view on this bill, which would reduce Canada pension plan benefits paid to recipients between the ages of 60 and 69 whose taxable income is above a certain level.
I am very proud to have a chance to defend this plan that truly manages to offer income support to its contributors and their families, when they retire, become disabled or lose a loved one. I emphasize the term contributor, in other words people who have paid contributions to the plan during their working years.
I must admit that I am surprised at the harshness of this bill. Admittedly, I am not sure what prompted my colleague to present it, especially considering that the level at which benefits would be reduced is very low. For the 2002 taxation year, the reduction would have been applicable to an income as low as $31,677, which is just over $2,600 a month in taxable income.
We are not talking about CEOs of companies, or presidents of multinationals, or people who made a fortune on the stock market. We are talking about Canadians who worked hard, raised their children, and managed to put a little money aside and who have a little extra money to supplement their Canada pension plan benefits. That is precisely what we are asking Canadians to do. We are talking about average workers who, thanks to Canada pension plan benefits, are able to make ends meet.
The problem is not just the category of people targeted by the bill, but also the extent of the reduction of benefits for certain people. It is a question of a 60% reduction of their pension cheque. This bill comes from a member whose party brags about promoting lower taxes.
We also notice several administrative problems that would complicate the implementation of such a measure, for example: using different reduction rates based on age, or using an estimation of the client's income to calculate the reduction of benefits.
Given the fact that income can vary considerably from one year to the next, this last point would make the Canada pension plan impossible to administer.
It would be difficult to calculate a reliable estimate for many Canadians, which means that many people would receive cheques long after the year end, in order to compensate for the excessive reductions that would inevitably occur. However, some clients would have to reimburse overpayments because the estimate of their income was not high enough. It is a not a very happy picture.
And what should we do about clients who live outside Canada and pay taxes in that other place of residence? How could we assess or reduce their benefits?
Moreover, what about the federal-provincial repercussions of this bill? We cannot overlook the fact that the provincial governments coordinate the plan jointly with the federal government. The CPP Act says that two thirds of the provinces and two thirds of the population must accept a change of this kind for it to become law.
And another point: has the sponsor of the bill envisaged that the courts might decide that treating clients differently depending on their age is a form of discrimination, and contrary to the Charter of Rights and Freedoms?
Finally, this bill contravenes the principle of the guarantee on which the CPP is based, that is, that the amount of benefits a person receives depends on the amount of contributions and the length of time that person has contributed.
Passing this bill would undermine the foundations of the Canada pension plan and its agreement with its contributors.
But let us set aside those crucial details for a moment and ask ourselves why the hon. member believes it is necessary to make such drastic changes.
Is it because he believes that the financial health of the CPP is threatened and that we should begin to reduce benefits immediately? If so, he is mistaken, because many actuarial reports have shown that the plan is in good health and that current financial provisions are appropriate to present and future needs.
Or is it because he hopes these measures will encourage people to return to the labour market?
Again, he would be mistaken, since some people receive benefits, but not by choice. No one chooses to become disabled to a point where one can no longer work. No one wants to lose a loved one simply to receive survivor benefits.
For people who choose to retire before age 65, it is obviously unfair to suddenly change the rules and dramatically reduce their CPP benefits on short notice, especially when we know that some have decided to retire at a specific age according to a financial plan that they were encouraged to develop many years earlier.
This bill includes many drawbacks and no clear advantages. That is why I will vote against it and I urge other members to do the same. However, I am well aware that no program is set in stone, and that is also true for the Canada pension plan.
That is why CPP legislation needs to be reviewed by federal and provincial governments every three years. Instead of stripping CPP or reducing benefits in a panic, as this bill would have us do, we should instead continue to administer this plan in a conscientious manner by consulting the people concerned as needed and by maintaining our periodic reviews, because that is the only way to do things properly.
Together, we will ensure that the Canada pension plan is able to provide future generations with the same level of benefits that we enjoy today.
Topic: Private Members' Business
Subtopic: Canada Pension Plan