Back in my July 6th MP report I discussed the many proposed changes by the Liberal Government to increase Canada’s CPP system; that report can be found at: http://www.danalbas.com/mp-report/changes-in-cpp This week debate on expanded CPP, known as Bill C-26, is currently before the House of Commons where I voiced opposition. As I believe in being accountable to citizens I would like to share some of the reasons why I believe now is not the ideal time to expand CPP.
One of the concerns I heard loudly from small business owners after my July MP report on this subject was the obvious fact that expanded CPP will increase the costs of not only hiring new workers, but also increases payroll costs for existing workers. It is for this reason that expanded CPP is often referred to as a payroll tax. While no small business owners shared with me they would eliminate existing staff due to increased costs many said future wage increases might instead be directed into covering the CPP increases or that plans of hiring additional workers may be put on hold. Given that Canada’s job numbers are weak right now and economic growth forecasts are being downgraded in my view now is not the ideal time to increase employment costs to small business owners.
Another reason why I oppose expanded CPP is due to the fact that in my view it is not an ideal retirement asset. For those citizens who do not live to reach 65 or only live a few years beyond 65, a lifetime of contributions paid to CPP are of no significant benefit to a spouse of family in that the full value of the contributions cannot be transferred through an estate. Conversely a TFSA is fully transferable to your family though an estate and does not adversely impact small business job creators. Ironically the Liberal Government reduced TFSA contribution levels arguing they were worried Canadians would be saving too much before turning around to announce plans to increase CPP over concerns citizens were not saving enough thus Government would do it for them.
One of the lesser known criticisms of CPP and one I raised in Ottawa this week was the fact that increasingly your CPP contributions are being consumed by significantly rising administration costs. As well-known national media columnist Andrew Coyne has also pointed out staffing has increased at the CPP Investment board from 5 in 1999 to around 1,200 today. Likewise operating costs went from $ 3 million in the year 2000 to $ 803 Million in 2015 not to mention that external management fees have risen from $ 36 million in 2006 to $ 1.25 Billion in 2015. These are significant administration increases and more so when one considers that the Office of the Superintendent of Financial Institutions in the August 2014 report assessing the sustainability of the CPP through actuarial balance sheets reported that although sustainable currently the CPP has an unfunded liability of $ 9 Billion using open group methodology.
Given that increased CPP adversely impacts small business job creators at a time when the economy is sluggish this is a serious concern. On top of that concern is the limited financial transportability of CPP. When you consider that you and your employers lifetime contributions to your CPP is very limited in being able to be transferred to your spouse or family in an estate I believe that the Liberal Government should have spent more time exploring other options. When one also considers the significantly growing administration costs combined with the fact that there is currently an unfunded liability of the existing CPP plan I spoke against expanding this program at the present time.
As always I welcome your comments, questions and concerns on this or any topic. I can be reached at Dan.Albas@parl.gc.ca or toll free at 1-800-665-8711
It has been suggested that if you are an elected representative, the worst day in Government is still preferable than the best day in opposition. Although I am still relatively new to the role of being a member of the official opposition I believe it is always important to focus on the fact that both sides of the house are important in a properly functioning democracy. I also believe that as opposition we can also aim higher and raise the bar in how we hold the Government to account and in that process ultimately influence the shaping of Government policy.
If you have been following the Prime Minister's efforts to change how Supreme Court Justices are appointed in Canada, you may be aware that part of these changes aimed to end the unbroken convention of respecting regional representation from different parts of Canada on the Supreme Court. As Atlantic Canada was the first to be adversely impacted by these changes, it was only natural that it became a very unpopular proposal there. Unfortunately for Atlantic Canada as there were no opposition MPs from the region, it was up to the official opposition to raise this unpopular issue in Ottawa.
In order to force the Government and its members to address these concerns the Official Opposition tabled a motion in the House of Commons to respect the convention of regional representation when making appointments to our Supreme Court. To the surprise of many in Ottawa, the Liberal Government ultimately voted in support of this Conservative Opposition motion and subsequently passed. As a result this week it was announced that Malcolm Rowe from Newfoundland is our newest Judge to sit on the Supreme Court Bench.
This example of maintaining regional representation on the Supreme Court illustrates that despite being in Opposition, well intended proposals can become part of Government policy. It is for this reason that I have maintained my position as a member of the Opposition will always include the importance of proposing alternatives from time to time as opposed to exclusively opposing. On a related note earlier this week I was also honoured to be named as the Deputy Critic for Finance and by extension also a member of the Finance Committee. This is an opportunity that I greatly welcome and one of the reasons why pertains to input I am hearing from many local credit unions who are frustrated with changes that increasingly force administratively costly one size fits all policies onto them. As many in our riding of Central Okanagan-Similkameen-Nicola will know credit unions provide an important community based alternative to the larger financial institutions. Unfortunately for credit unions they simply do not have the clout and lobbying power of the big banks who are increasingly shaping Liberal Government policy as was evidenced by recent changes to mortgage rules that benefit banks over independent mortgage finance companies.
As the Deputy Critic for Finance these are some of the local community related issues that I will raise with my work in this area. It is also my intention as critic from time to time to mention those actions that I believe are potentially beneficial to Canadians. As an example I have heard large concern from home builders and those involved in construction at recent significant increases in tariffs, in some cases as high as 276% on dry wall that will make housing even more expensive. I have heard this may attach an extra $5000 or more to a new home. I have raised this issue in the House of Commons appealing both publicly and privately to Liberal Government members. Although I am disappointed that the Finance Minister has not supported the Canadian Home Builders Association suggestion to suspend the new tariffs, I am pleased to report that the Finance Minister has announced that this tariff policy will be formerly reviewed. This is an issue I will continue to press the Government on as every effort from Ottawa should make housing more affordable, not more costly.
I welcome your comments, questions and concerns on this issue or any other matter before the House of Commons. I can be reached at Dan.Albas@parl.gc.ca or toll-free at 1-800-665-8711.
One of the things I enjoy the most about representing the riding of Central Okanagan-Similkameen-Nicola is the diversity of the region that ranges from rural unincorporated areas to more densely populated urban centres. As much as there are many different challenges because of this diversity, there are also some common themes. One of those is that most citizens have a strong connection with local media that in many regions of Canada, including here, are also struggling to survive. Princeton and Merritt have both seen community papers close their doors permanently while others have dropped their publication from twice a week to one.
Elsewhere many newsrooms have laid off staff as media organizations struggle with changing market dynamics and declining advertising revenues. As I have previously stated on several occasions and in Ottawa, local media is a critically important facet of life in our communities.
Fortunately for many citizens there continues to be local live and recorded programming broadcast by the CBC throughout our region. Although I generally hear support for the CBC, one common complaint that I do receive from time to time is that many citizens would prefer it if the CBC was entirely commercial free. This suggestion is also circulating in Ottawa as many struggling media organizations resent the fact that they are losing much needed ad revenue to a national public broadcaster that is funded with tax dollars. The debate is an understandable one as CBC is essentially immune to the same market forces that other media organizations are forced to adapt to.
This leads me to the question for this week’s MP report. For those of you who do listen to or watch CBC on a regular basis- would you support a commercial free CBC?
Key to this conversation would be recognizing that this could mean a loss of revenue to the CBC if Government did not make up a revenue shortfall created by the loss of advertising revenue. On that note I should also add that the Liberal Government is currently increasing funding to the CBC, which now receives in excess of one billion tax dollars per year.
A commercial free CBC would not in my view substantially help our struggling local media organizations however it is one measure that many national media organizations have voiced their support; this is in addition to the many local citizens who have expressed support to me for a commercial free CBC. I welcome your comments on the idea of a commercial free CBC or any other matter before the House of Commons. I can be reached at Dan.Albas@parl.gc.ca or toll free 1-800-665-8711.
The buzz out of Ottawa this week relates to an announcement from Prime Minister Trudeau that the Liberal Government will enforce a national carbon tax onto Canadian Provinces and Territories that do not implement a Provincial Carbon tax or a cap and trade system by 2018. The carbon tax was announced by Prime Minister Trudeau at the same time Provincial Environment Ministers were meeting to discuss the same topic. This resulted in Saskatchewan, Nova Scotia and Newfoundland storming out of the conference and with some engaging in a war of words with the Prime Minister. In particular Premier Brad Wall of Saskatchewan pointed out that during the 2015 federal election, Prime Minister Trudeau stated the federal government imposing a climate change plan on provinces would be ‘nonsensical’ and demanded that the Prime Minister keep his word.
While this back and forth continues it is also worth noting that British Columbia already has a carbon tax in place with rates set already well above the entry carbon tax rate proposed by Ottawa.
While the national carbon tax announcement captured most of the media attention, there was another policy change quietly made by the Government that may well have far more troubling implications on middle class Canadians attempting to buy a home. The Liberal Government intends to make changes with respect to mortgage qualifications that even the Department of Finance projects could lower home sales across Canada by close to 10% in the first year.
The changes to mortgage qualifications from my perspective are concerning for a number of different reasons. While there is little debate that housing prices in Toronto and Vancouver have reached concerning levels, recent policy changes enacted by the BC Government appear to be already having an impact and the changes announced by the Federal Liberal Government will penalize middle class home buyers in all regions of Canada. More troubling is rather than try to encourage housing supply through measures such as possibly increasing the threshold for the GST rebate on new home construction that would also help affordability and generate economic growth, these measures in effect make housing less affordable as fewer families will be able to qualify for a mortgage.
In defense of these policy changes the Liberal Government argues they are concerned about rising Canadian debt levels. However as the opposition would point out, adding billions of dollars of debt through increased federal deficit government spending as is currently the case creates the same problem only without generating any equity as can be created through home ownership. In my view allowing Provinces to take action in specific hot spot regions such as the British Columbia government has done recently may be a more effective policy than a national change that will adversely impact many regions of Canada solely for the benefit of a few.
As always I welcome your comments, questions and concerns on any matter before the House of Commons and can be reached at Dan.Albas@parl.gc.ca or toll-free at 1-800-665-8711.
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Dan Albas is the Member of Parliament for the riding of Central Okanagan-Similkameen-Nicola.