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Make a statement in the House of Commons!
Richmond Centre Electoral District
On October 25, 2016, Alice Wong spoke in the House of Commons on second reading of Bill C-26, An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act.
The following is a transcript:
Hon. Alice Wong (Richmond Centre, CPC):
Mr. Speaker, it is my pleasure to rise today to discuss the proposed changes to the Canada pension plan in Bill C-26.
As has been mentioned by my colleagues earlier, this change would raise CPP premium rates. This plan would also increase the maximum level of earnings on which CPP premiums would need to be paid. The net result of these changes would be that both employers and employees would have to pay more. Indeed, the CRA has published a table showing that this amount could be as much as $2,200 more, each and every year, and this number would continue to go higher and higher.
Nearly all Canadians would be affected by this expansion. Everybody earning a salary in this country would be negatively affected and would see their paycheques decrease as this payroll tax takes effect. Likewise, employers would see the cost of hiring employees rise.
As a former small business owner, I have first-hand experience in seeing how a business can be affected by payroll taxes, including CPP premiums. During the past year, I have thoroughly enjoyed my role as the critic for small business, holding the government accountable for its actions and inactions. I have heard from entrepreneurs and small business owners from across the nation in round tables and one-on-one meetings. Each time the topic of the proposed CPP expansion is brought up, immediately I hear the same thing: when the cost of hiring employees rises, employers hire fewer people. Payroll taxes, which include CPP premiums, are one of the largest costs for small business owners.
These employers are leaders of our communities and care about investing in their employees. However, if they cannot afford to pay for their employees, they will be forced to either reduce their workforce or increase the workload on their current staff to avoid hiring new workers.
One entrepreneur from Toronto explained to me that she is already feeling constrained by the increasing tax burden on her business. She said that, if the CPP expansion were to move forward, she would have to expand the job duties of each of her current employees rather than hiring new workers to fill the gaps.
Small business representatives from across the country have also added their voices to this conversation, urging the government to rethink this plan. Among them, the Canadian Federation of Independent Business, the CFIB, is the most notable. It conducted a number of surveys on its members, asking for opinions and potential business decisions they would have to make, should this expansion move forward. The results are troubling.
These surveys indicate that two-thirds of small business owners believe that this expansion would compel employers to freeze salaries in order to account for the changes. The math is simple. Dollars that would otherwise go into salaries would, instead, go into extra payroll taxes. When we consider the government’s track record of increasing payroll taxes, increasing small business taxes, implementing a nationwide carbon tax, and cutting tax credits, it is no wonder business owners are choosing to hold onto their wallets.
I would not be shocked to see the Liberals finally decide to raise the GST to pay for their spending spree. Who wants to invest in such a high tax environment? One of the arguments being used to support the expansion of the CPP is that it would help struggling seniors. However, the proposed plan would not be fully implemented for another 40 years, which means seniors would not be receiving the help now that the government says they need. I would challenge the government that there are many other ways they could help seniors and the aging population, but the Liberals have chosen to turn their backs on Canadian seniors.
I am going to let the House know what seniors think. The carbon tax would increase the cost of everything, including their groceries and heating their homes. That would be dramatic. That would be devastating to our seniors.
Now that I have talked about seniors, I will talk about our youth, whom the government claims the bill would benefit the most. Our youth benefit from employment, and this bill would make it more difficult for employers to hire our graduates. Young participants in my round tables are more concerned about their jobs, about their take-home money now, instead of paying into something for 40 years down the road.
Not only that, but we are forcing Canadians to invest in a pension plan that offers a low rate of return. According to a well-quoted study by the Fraser Institute published in May 2016, and externally validated by many other organizations, the projected real rate of return for CPP investees is 2.1%.
I will quote from the study:
Canadian workers retiring after 2036…can expect a real rate of return of 2.1 percent from the CPP.
This basically means the majority of our workforce today, contributing to CPP, is making a real rate of return that is barely above inflation. Remember, when people retire and draw funds from the CPP, that amount is taxed with income taxes.
Some Canadians are comfortable with the CPP and the fact that it is backed by the government, but we are given no choice in the matter. CPP legislation forces all Canadians to participate in this low-return investment. The government has made the decision for the rest of the country, regardless of the personal situation for how Canadians want to fund their retirement.
There are other ways that government could encourage Canadians to invest in their retirement. There are already many options available to individuals, including the well-known registered retirement savings plan or tax-free savings accounts. The CPP is only one method of saving, amongst others, but this is a forced method of saving for retirement.
By highlighting and encouraging other programs, Canadians are able to create a retirement financial plan that suits them best and does not solely rely on government to make this choice for them.
At a time when our economy is struggling and many people are unable to find work, such an expansion of the CPP would only magnify these problems. Our job creators would face another burden in their ability to hire new workers, and Canadians would have less money in their pockets to invest in the economy.
I am convinced the government does not want to help Canadians save. If it did, the Liberal government would not have chosen to reduce the amount of money individuals can contribute to their RRSPs or tax-free savings accounts.
Canada has excellent programs that allow Canadians to choose how they want to save their money for retirement. As I have said before, instead of making it more expensive for our small businesses to hire staff and create jobs, we should be minimizing taxes, cutting red tape, and trusting Canadians to make their own decisions regarding how to spend and save their money. I will continue to fight for our hard-working job creators.
Mr. Kevin Lamoureux (Parliamentary Secretary to the Leader of the Government in the House of Commons, Lib.):
Mr. Speaker, one of the things that has become very apparent is that the Conservatives are articulating why they believe we should not have any sort of a CPP program, from my perspective from listening to them in this debate.
The arguments the Conservatives are using today are the same types of arguments they used when there was opposition to the creation of the CPP. Maybe an appropriate question to ask members of the Conservative Party would be whether the Conservative Party supports CPP, and maybe the member could enlighten this House.
A number of Conservatives are nodding yes. If that is the case, why, then, would they oppose the good work of so many provincial jurisdictions, working with Ottawa and the many different stakeholders, who are saying that now is the time for us to give this increase? It does not take effect today. It takes effect in a couple of years from now.
Hon. Alice Wong:
Mr. Speaker, Canadians have already said many times that they want to have a say in their own retirement plans. The government has not consulted with real people who are working and paying into the CPP.
I must agree that the CPP has its own value; however, the expansion that the government is suggesting would not really help present retirees and future retirees. It would only kill jobs, which all our people need in order to grow the economy
The member opposite has twisted the facts, saying that the Conservatives do not support the CPP. We do not support the expansion of the CPP that the government is suggesting right now, with increased premiums that would kill jobs and push our youth to unemployment.
Mr. Richard Cannings (South Okanagan—West Kootenay, NDP):
Mr. Speaker, figures show that 30% of single elderly women in Canada live in poverty. Could my colleague tell me what her party’s plan is to get those women out of poverty?
Hon. Alice Wong:
Mr. Speaker, I was the minister responsible for seniors for five years. Our government did a lot for seniors. We increased the GIS to the highest amount in a quarter century.
For single women who do not have any CPP, we really want the government to look at other ways, because increasing the CPP would not help even a single woman who is retired now. We need to make sure these women have proper housing subsidies. We want to make sure they stay healthy so that going to the doctor or pharmacy will not cost them anything.
Do members know what is going to kill them? The carbon tax is going to kill them, because they will have to pay more for everything.
Ms. Marilyn Gladu (Sarnia—Lambton, CPC):
Mr. Speaker, we are seeing high youth unemployment in my riding, and I have heard comments about that today. If people do not have jobs, they cannot contribute to CPP and they are certainly not going to be able to take advantage of it later.
I wonder if the member shares that experience.
Hon. Alice Wong:
Mr. Speaker, new graduates are finding it more and more difficult to pay back their student loans and find jobs after school. With higher payroll taxes and likely limited jobs coming from our small businesses, the CPP enhancement would only magnify these problems. New graduates need money in their pockets to pay back their school debt. We need to help our new graduates find work by creating jobs, not sticking our job creators with larger payroll taxes.