Debate on Bill C-25 (Pooled Registered Pension Plan Act) – Feb 1, 2012

Transcript from the Debate on Bill C-25 (Pooled Registered Pension Plan Act) – Feb 1, 2012


Mr. Pierre Poilievre (Parliamentary Secretary to the Minister of Transport, Infrastructure and Communities and for the Federal Economic Development Agency for Southern Ontario, CPC):  

       Mr. Speaker, over 60% of Canadians have no workplace pension. That is because many employers do not want the legal or administrative burden of offering them. These costs can be prohibitively high and the benefits inordinately low for a small business with a limited budget and only five or ten employees.

     Let us consider or create an example. Joe and Martha Stephens are a married couple without a pension plan. He owns a corner store and she works as a restaurant manager. Neither the restaurant nor the corner store has enough employees to justify the cost of running a pension plan for its people. It is true that RRSPs help as an option, but some people find them too intimidating or time consuming to establish. On average, each Canadian has about $18,000 in unused RRSP room.

     What if thousands of Canadian workers from these kinds of businesses could pool their benefits together to achieve the bulk-buy savings that come with a pooled plan? That would spread the risks and costs among a larger number of people. That is exactly what the pooled registered pension plan offers. Canadians would be able to buy in bulk and get better purchasing power. All of a sudden, the Joes and Marthas and millions of people like them who are on their own could join forces and secure affordable pensions. The design of these plans will be straightforward with simple enrollment and management. A third-party administrator, normally a bank, insurance company or existing pension plan, would be responsible for the administrative and legal duties.

    What a relief for a small business owner. These plans would also be subject to the standard pension rules that exist for plans across the sector right now, unlike group RRSPs, which have no similar standard of regulatory practice.

    The opposition parties oppose this idea because it is a private sector solution. They believe that government should run and operate everything. They particularly oppose the fact that these pooled pension plans would invest in the stock market. What they fail to realize is that the entire pension system, public and private, relies heavily on the stock market already. Consider the Canada pension plan, 49.6% of which is invested in equities or stocks. These stocks can only pay income into the CPP out of their after-tax profits. Liberals and the NDP want to raise taxes on the very businesses that the CPP invests in. The result would be increased pressures on our public pension system.

    For example, the CPP owns $59 million in Bank of Nova Scotia shares. When that company profits, so does the CPP and, ultimately, so do the millions of Canadians who rely upon it. The CPP also owns $13 million in TransCanada shares. Does TransCanada ring bells in this place? I ask because TransCanada is the same company that is attempting to build the Keystone pipeline, which, admittedly, would profit that company but would, by definition, also profit its owners of whom $13 million is represented by the Canada pension plan and the 17 million Canadians who are invested in that plan. The opposition, which opposes this pipeline, is attacking a company that is literally paying its profits into the CPP fund.

    The opposition parties are also attacking workplace pension plans, even though they do not realize they are doing so. Take the Canada Post pension plan. During the debate over the postal strike, members of the New Democratic Party simultaneously demanded that the existing pension plan for mail workers be bolstered and that business taxes go up. These concurrent demands are painfully ironic.

      The top five holdings of the Canada Post pension plan are the Toronto Dominion Bank, the Royal Bank of Canada, Bank of Nova Scotia, Suncor and Canadian Natural Resources. The banks and oil companies, the twin villains in every left-wing storyline, paid dividends into the pension fund of these unionized workers. These dividends come exclusively from after-tax profits. That means that if we tax these profits more, pensioners will ultimately get less.

    On January 1, 2012 the final instalment of our business tax cuts took effect, dropping the rate from 15% to 22%. That is a one-third reduction. By contrast, the NDP election platform proposed increasing the business tax rate from 15% to 19.5%, a one-third hike. That would be a $9 billion tax increase on job creators, the companies in which pension funds are invested. Liberals propose a similar hike on these job creators. That would drastically reduce the after-tax earnings left to the pension funds that own these shares.

    We should celebrate the fact that workers are invested in capital markets. It is good for everyone involved. People grow their retirement savings while their money provides investment capital to companies that create jobs.

    However, the benefit is not just economic but also societal. Politicians always like to divide people along socio-economic class lines, the workers versus capitalists. However, the two are increasingly becoming one and the same due to direct or indirect share ownership by workers. The old utopian socialist dream was for workers to become owners of the means of production through a process of forced collectivization, nationalization and expropriation.

    In an ironic twist of fate, it was the capitalistic stock market and not the state that made workers into business owners. Pooled pension plans, tax free savings accounts, lower taxes on businesses and workers give Canadians ownership over their own destinies. Herein lies the sharp difference between this side of the House and that side. Members on that side want to turn workers against business owners; we want to turn workers into business owners. That is the hopeful, uplifting message that our government offers Canadians who aspire to a brighter, more secure and prosperous future.

Mr. Mike Sullivan (York South—Weston, NDP):  

    Mr. Speaker, I listened with some interest to my colleague’s speech.

     Once again he has reiterated the Conservative Party’s second story about tax cuts for businesses, that the tax cuts for businesses have resulted in greater profits.

    His colleague, the Minister of Finance, would suggest that is not the case, that the tax cuts for businesses were to create jobs. One cannot suck and blow at the same time: Either there are profits to be made in otherwise profitable corporations by lowering their tax burden, or they will create jobs. We cannot do both. Which is it?

Mr. Pierre Poilievre:  

    Mr. Speaker, in fact the hon. member is wrong. That is the core difference between us and them. We believe that the amount of wealth in a society can actually grow, and that by investment there is more to go around for everyone. They believe there is a finite, static amount of wealth in existence and that the only way to give more to one is by taking away from another, that the only way for one person to move up the ladder is by pulling someone else down.

    The answer is that when we cut business taxes, we increase the return on investment for the investors, and that means they invest more because it is a more lucrative proposition.

    Who are these investors? They are pension funds. They are people who are retiring and using mutual funds as income for their families, their kids and grandkids. How does this create jobs? It allows more capital so that businesses can hire, purchase new equipment and create more economic activity, all of which put people to work.

    The answer is that when we lower business taxes, yes, we increase the return on investment to the pension funds, the mutual funds and the savings that our seniors have invested, and in the process we make it possible for businesses to grow, hire more people and expand opportunity.

Mr. Scott Simms (Bonavista—Gander—Grand Falls—Windsor, Lib.):  

    Mr. Speaker, I now know why Newt Gingrich likes to give a shout out to Canada. After hearing something like that, he must really like us now.

    The member talked about the beauty of having the private sector involved in all of our pensions, most notably, the one which I am particularly fond of, the CPP. The Canada pension plan and its activities with the investment board does this country a good service. The private sector, no doubt, plays a major role, far more major than we even know. The member says that we should celebrate pensions involved in the private sector.

    Since the member has been here six years, how come his pension is not involved in the private sector?

Mr. Pierre Poilievre:

    Mr. Speaker, I personally do not run the pension system around here but I am interested to learn that the hon. member has all of a sudden taken an interest in it. I have never once heard Liberals say that they wanted to cut their own entitlements. In fact, entitlement has been the driving force behind the Liberal Party for approximately a generation. It is the uniting principle of the Liberal Party.

    Today we are talking about the pensions of Canadians and the fact that we need a strong, robust business sector in order, not only to employ people today but to pay out the dividends that form the income of our pension plans. That requires a strong, free enterprise economy, and that is what we are providing.

Ms. Elizabeth May (Saanich—Gulf Islands, GP):  

    Mr. Speaker, I would ask the parliamentary secretary to perhaps amend his remarks. I think he mistakenly referred to a postal strike. I think he meant the postal lockout.

    My question is on other urgent pension matters that I do not know that the government is dealing with. I wish we were able to look at pension issues and not be merely focused on this quite inadequate private sector pooled registered pension plan. Instead, I wish we were able to look at the urgent issue that pensions that were not protected in the private sector be protected as secured creditors in bankruptcy, such that the workers at Nortel would not be wiped out by what happened to them. This is a continual problem in our economy.

    Why are we not acting to protect the pensions of people under the superannuation scheme, of retired RCMP, military and civil servants who lose pension benefits to their surviving spouse if they remarry after age 60.

    Those are urgent issues and I do not see the government addressing them.

Mr. Pierre Poilievre:  

    Mr. Speaker, the hon. member has raised good questions.

    I would simply add that in order for any of our pensions, public or private, to function, we need a strong business sector generating the wealth to pay into those funds.

    We have created a vibrant business sector by signing nine new free trade agreements, by lowering business taxes by one-third, by cutting red tape and by moving forward with a budget that is coming this spring that will reduce the cost and the burden of government so that we can unleash the strength of free enterprise so that people can aspire to provide for themselves, their families and, eventually, for their retirements.