COPIED FROM Dr Ruby's web site

Bill C-36 - An Act to Amend the Canada Pension Plan and the Old Age Security Act

Thank you Mr. Speaker,

Mr. Speaker, I’m pleased to stand in this house today to speak on Bill C-36 both as the Member of Parliament for Brampton Springdale and as the new critic for Social Development for the Official Opposition. As the critic for Social Development I look forward to working on behalf of all Canadians to ensure the they have the tools and resources they need to succeed and actively contribute to their communities.

Today I will be speaking on Bill C-36 a bill amending the Canada Pension Plan and the Old Age Security Act..

To begin with a bit of history :

One of Canada’s greatest achievements and hallmarks is its retirement income system for seniors. It’s a program that has helped and assisted millions of seniors in Canada. As a Liberal Party we have always promoted investments in our seniors. Every previous Liberal Government has demonstrated this commitment by investing in our seniors and their well being.

It was a Liberal government that implemented the Old Age Security Program, the Canada Pension Plan, the Guaranteed Income Supplement and reinstated the New Horizons Program.

To ensure that seniors would have a voice at the cabinet table the former Liberal government first appointed a Minister of State for seniors and in

2005 also announced the creation of a “Seniors Secretariat” to serve as a federal focal point for collaborative efforts to address senior’s issues.

Mr. Speaker, in the 1990s the Liberal Government demonstrated its commitment towards seniors and ensured long term stability in the funding for the Canada Pension Plan and Old Age Security. The Canada Pension Plan fund itself currently stands at over $100 billion and remains safe for many generations to come. In 2004, the Liberal government increased the GIS by $2.7 billion over two years -the largest single increase since 1984. This increase directly benefited low income seniors.

Thanks to 13 years of Liberal government and its investments in seniors, fewer Canadian seniors are now living in poverty.

Public Pension benefits such as Old Age Security; the Guaranteed Income Supplement; and the Canada Pension Plan Retirement, Survivor and Death benefits have been vital components of Canada’s retirement income system. Canada’s retirement income system has successfully and dramatically reduced the rate of low income seniors. Low income among Canada’s seniors who are over the age of 65 has dropped from almost 11 % in 1993 to an all time low of 5.6 % in 2004. However single seniors living in urban areas and single senior women still face significant challenges. Because many of the seniors live on fixed low income they are more likely to remain in low income for an extended period of time. Even though the previous Liberal Government increased the GIS benefits for low income seniors it is imperative that all parliamentarians in the house continue to ensure that we invest in Canada’s Retirement Income System and policies and programs that will allow for a greater number of seniors to NOT live in poverty.

The Conservative Government cannot claim to be the defenders of a sound public pension system when the Minister of Finance has launched an attack on vital CPP funds by linking the CPP account to the national debt. CPP funds must only be used for one purpose only_ for future pension payments

With their Economic Update in the fall of 2006, the Conservative government set a goal to eliminate Canada’s net debt by 2021. While on the surface, this sounds like a laudable goal- reality paints a different picture.

Canada’s national debt currently stands at about $480 billion. In the past decade , thanks to years of Liberal fiscal management it has decreased drastically from its record high of more than $560 billion.

The Conservatives have pledged the pay down $3 billion per year on the national debt. A simple calculation shows that at that rate, the national debt will be eliminated in the year 2166. However, this is where the difference between net debt and national debt comes in.

The national debt is the amount of money the government of Canada owes to its creditors – mostly international institutions such as the World Bank and the International Monetary Fund (IMF), and other countries. It is basically the equivalent of the national mortgage, and the accumulation of all past deficits and surpluses.

Net debt is the national debt – and all other liabilities held by the government – plus national assets. The single biggest national asset held by the government is the Canada Pension Plan (CPP) fund. It currently has a value of more than $100 billion, and by 2021, will reach a value in excess of $400 billion. At current trends, in 2021 the nominal values of the national debt and the CPP fund will converge, essentially canceling each other out since one is negative and the other is positive. This is what allowed the Conservatives to announce the goal of eliminating the net debt by that year.

However, it is completely misleading and irresponsible to attach the CPP fund to the national debt. Implicitly, the government has announced that the CPP fund will be used as collateral for future borrowing, when in fact the CPP fund exists for one reason only: future CPP benefit payments. Net debt is the accumulation of all assets and all liabilities. In making their pledge to eliminate the net debt (which, incidentally, contained nothing new, since paying $3 billion per year on the national debt had already been booked well into the future by the Liberal government) the Conservatives ignored one of the biggest liabilities faced by the government: future CPP payments, which are increasing every day as our population ages.

Between now and the year 2030, the population is projected to grow to 38.6 million. By 2030, the median age is expected to increase to 44, from 38. During this period, the proportion of retirees will increase significantly from 13 per cent to 23 per cent or 8.9 million people. Those 80 and older will also significantly increase from 3 per cent to 6 per cent of the general population or 2.3 million people. This group represents one of the fastes growing segments of the population.

In 2003 there were 21 retirees for every 100 persons of working age. By 2030 it is expected this ration will almost double to 41 per 100.

These demographics highlight the necessity for the government to be able to respond to these changing conditions and the aging of our population. Government must be committed to poverty reduction among seniors and ensuring seniors can maintain their standard of living in retirement. Public policy must be able to respond to future financial pressure on the public pension system, so that all seniors, not just high-income seniors are guaranteed a decent quality of life in their latter years.

Less than 50 per cent of seniors benefit from a private pension plan.

Women are far more likely to depend on OAS and GIS as important sources of income. These two programs accounted for 32 per cent of women's income, compared to men's income.

Now, despite the improvements the Bill will make, this Government’s policies to date have not been helping Canada's seniors. Consider Income Trusts. On Oct 31, 2006 the Conservative government announced measures to impose a new tax regime on income trusts, reversing their campaign promise: " to levy no new taxes on income trust."

Canadians invested their money based on this promise and their trust ended up costing them tens of thousands of dollars of their hard earned savings. The Prime Minister appointed Senator Lebreton Secretary of State for Seniors despite her inability to see the devastating impact this had on seniors. She said, "I have not seen any evidence that people have individually lost large sums of money."

This is the same government that, less than a year ago, proposed to the provinces to put all future federal surpluses into the CPP account. This was roundly shot down by the premiers, who were very wary of political interference in the fund. The CPP fund is kept at arms-length from the government (managed by the CPP Investment Board) and as such is sheltered from all political interference. The Conservatives have compromised this principle with increased political interference in the CPP account.

Though Bill C-36 does not contain anything egregious in itself, it gives us an opportunity to remind ourselves of the fact that this Conservative government is not the steward of our public pension system it claims to be. We must work together to ensure better!

Thank you


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can anybody tell me if there is any follow up on this speech by Dr Ruby Dhalla MP. Although it seeks for change in the act for CANADA PENSION PLAN to bring on par asian parents with European parents but I am not sure if this issue has the support of any other M.P. Can anybody throw some light on this issue?