If you completely
unlock the pension funds at age 65 so that people can do whatever they want to
do, I suggest it would be pretty important for the Minister of Finance (Mr.
Fielding) to put together a booklet which could be on the Web and widely
available for people who are considering this option. People need to know what
the tax implications of various choices are. People need to know what this will
mean in terms of their choices in terms of where they put the money, how they
invest it or don't invest it, or how they spend it.
I think that the
assumption of members of the Conservative caucus has been that they know how to
manage their own money and therefore everybody should be able to manage their
own money. I'm not opposed to people having more choice in managing their money
but, at the same time, I think we need to be very careful in making sure that
people who are provided that choice have the information they need to make that
choice well.
I have come
across already a number of people who have been scammed or ill-advised by
investors. You can only imagine, for example, what will happen is that the
moment that somebody turns 65, they will have a flock of people who will want
to come and help them invest their money, and that if we are not careful, then
we will have people who–I have seen this happen–who lose a lot of the money
that they've invested because they received poor advice on what to do with the
money that they had.
So this has the
potential to be a good thing but, on the other hand, there are some very
significant pitfalls and problems that need to be looked at ahead of time and
make sure that the government is aware and that the government will be standing
by and making sure that they have such a package available.
I would have expected that the government, in introducing a bill which is as important as
this, in giving people choice, would have already produced such a booklet to
make sure that people have the full implications of what this would be. We
should be seeing that booklet before we have a final vote, I suggest.
It is so
important that we have this information communicated well and that it is
readily available for people. Otherwise, we're going to have a situation where
there could be potential very significant problems and a set-up for people who
are less able to manage their money to be the victim of scams, of poor
investors coming–poor advisers coming in and saying, well, this is what you
have to do with all your money, and putting at risk their life savings.
I have to comment
that this is a government which already is playing fast and loose with people's
pensions. I refer, to start with, with the ranchers who have been ranching on
Crown lands. And they have invested in those Crown lands for many years.
Some of them, they have been building up what they thought was
equity in those Crown lands. And this government came along and with one stroke
of a pen has taken that equity completely away from many, many ranchers. And
they came to us, and I was with my colleague, Dougald Lamont, and others in
Crane River. And one after one, the ranchers pointed out this government has
taken away our pension. This is one of the worst things that any government
could ever do.
And you would be surprised–I
think the government might be surprised at the extent of anger in that room,
the extent of people which were upset because this government had got rid of
what they thought was going to be their pension–the money that they had
invested in improving the Crown land. And the fact of the matter is that
instead of those people having pensions, that Crown land is now going to be
auctioned off to other people. And, although they may have a chance to bid on
it, for a variety of reasons that may not always be easy. And the other thing
is that the fundamental taking away of pensions, which has already happened for
people who are ranchers on Crown lands, is something that we have to be very,
very careful about.
It is not the
only example that has been occurring under this government. If you go and talk
with people who used to have–some who still have–leases to operate businesses
at The Forks Market, what has happened is that the policy changed under this
government–and the previous government–the NDP are not innocent here–so that
instead of people being able to, you know, sell their lease as it were and have
that as a pension, that they are no longer able to do that. And they are no
longer able to do that because The Forks Market administration decided that
they were no longer to have what was the equivalent of unit transfers for
people with Crown lands. And it has taken away pensions.
And I have talked
with people who ran businesses at The Forks who have been crying over how they
were treated. It is really important that we are very careful in treating
people's pensions well, in looking after their funds and making sure that they
have the opportunity, the advantage of being really well advised in terms of
how they manage pension funds.
There is an
aspect of this which we also have to be careful of. And this is not just for an
individual, but this is as a society. Suppose because of coronavirus, suppose
because of what happened in 2008, there is a recession and a steep drop in
the value of–the money market value of many shares, that may be a time when,
under this legislation, what you would see is a lot of people who are having
trouble, who are living at the margin, going to unlock their shares and take
the money out of pension funds.
Now, there is a
real possibility that there could be a run, right, on some pension funds, that
they wouldn't have enough ready cash available, right, particularly with a
declining stock market. You could have a situation where, just when people
needed it, the value of some pension funds would drop.
There are–different pension funds which are organized differently. Some have a
guaranteed amount [of pension] - for the large majority of RRSPs, they are invested in mutual funds or other funds, and so they are dependent on the value
of the stock market.. So, you could have a situation where the stock
market declines steeply, people on marginal incomes are all of a sudden in
great need, they are withdrawing the money from their pension at a time when it
is low value, at a time when you could have a run on pensions and put pension
funds, in some cases, in peril.
This bill, this
legislation, is not without some major concerns. That's not to say that we
shouldn't necessarily proceed, but that we should look at this with
great care and we should make sure that pension fund managers have had a
careful look at what the potential implications are.
We should have a
look at what we have at the moment - significant
numbers of people who are 65 years of age or older who could, immediately this
[bill] is passed, unlock a large amount of funds. And, if it were just one year
class of people aged 65, it would be one thing, but if it was everyone from age
65 to 85 or 90 who are taking out the rest of their funds, that's a lot of
money to be taken out very quickly, and if that happens at the time of a
downturn in the economy, as you might predict it could, because that's
when people need the money, then you have a situation which is potentially
quite problematic for the people who are taking the money out. It may be less
valuable than it should have been and it may be a time which is problematic for
the pension funds if they get a large run of people taking it out all at once.
So we need to
consider and think very carefully about this legislation. I'm all for giving
people options, but I do think that there are some concerns here that need to
be looked at very, very carefully before we pass and implement this
legislation.
I would suggest
that one of the options, instead of moving right away in one step to free up
all the people able to unlock their funds at age 65, then it might be a
smart to move to do this in a series of steps, so that you unlock more
gradually over a period of five or 10 years until you have the freedom that is
trying to be achieved in this legislation.
Now, I mentioned
earlier on about people from 65 to 90 all taking their money out at the
same time–or many of them–you don't have to have everybody. But, in fact, what
this legislation allows is if there's a downturn in the economy or
something like that, people from 55 on can take out.
So you now have
the potential, if it's an adverse economic situation, for people all the way
from 55 to 90–a lot of people–taking out their money very quickly as a
potential possibility. Not saying it's going to happen, but we need
to be able to think about that. And I suspect it would be smarter if
this approach, if it's to be used, was phased in over a five‑ or 10-year period
so that you have much less risk of a massive take-out of funds by many, many
people all at the same time.
Those are my
comments, Mr. Speaker. Thank you.
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