Finance Committee on Nov. 2nd, 2011

[Susan Eng]

Thank you for that question.

I know there's a concern that when we help seniors, somehow we are not helping the younger generation, and that is not our purpose. Our purpose is to focus on those vulnerable communities that are not in a position to improve their own situation themselves.

One example is single women. They will not benefit from the pension-splitting changes that this government has brought in, which were mostly extremely welcomed by—

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

But they will benefit from GIS, if they're low-income.

[Susan Eng]

Yes, they would, and—

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

I guess my point is we're talking about an increasing debt. We already know that this budget is going to result in a deficit. I think if you have a good balance is my—

[Susan Eng]

I think there is an opportunity to improve their lot. The dollar amount for those people on an individual basis.... As you saw very well with the top-up of the GIS, there's a limited number of actual dollars in the grander scheme of things, but it means a great deal to that targeted group of people.

We would say the same thing in relation to, for example, single women. There are those who have a bit of money, who cannot split their pension income. Then there are single women who are under the age of 65 who do not have access to their own OAS, and would not benefit from the spouse allowance that their sisters who are married would get.

Those are the kinds of targeted groups that we worry about, because at this point there's no way for them to change their circumstances.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

I want to make a quick comment to the Canadian Association of Fire Chiefs.

I represent a community that has many volunteer fire departments. I know that without reservation they were cheering this measure. They've been wanting it for a long time. I want to express my thanks for the great work they do.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. McLeod.

We'll go to Mr. Marston, please.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you, Mr. Chair.

I want to say from the outset that I've seen you as a champion for seniors and pensions for a number of years. Mr. Layton introduced me to you, I think it was in 2009. Since that time, you've made a number of presentations I've taken part in, in various places.

You will know the NDP's call for a phased-in increase to the core assets of the Canada Pension Plan, with the concept of doubling it over 30 years. You'll also be very aware of the government response from the testimony you gave just the other day. I want to offer to the government that I do agree, it was a beginning, the PRPP. But one of the concerns I have is that PRPP still leaves Canadians exposed to market fluctuations in a way that I don't think is acceptable.

A point you made in your last presentation to us was that you were concerned that there should be a capping of the fees for the PRPPs, so I was wondering if you'd like to comment further on that.

[Susan Eng]

Yes, thank you for the question.

Indeed, the focus for us is to make sure that future generations of retirees have access to a savings vehicle that will help them provide for their own retirement and obviously not have to fall on the public purse. The focus there is to make sure that whatever new vehicle we come up with is a net improvement on the status quo. The fact that it's going to be a pooled fund is already by itself a massive improvement, and the acknowledgement that there is a retirement gap, a savings gap, is also a major improvement.

That said, in our written submission we made reference to an Australian report based on their 12 years of experience with a similar plan. The bottom-line consideration there was the fact that the fees wiped out most of their savings, so they were no better off than if they'd just left their money in the bank. They had the net positive of saving that money instead of spending it, but beyond that there was no measurable value. So we want to learn from that. We want to take a lesson from that to make sure that when we introduce the project here, we don't fall into that trap.

This is supposed to be handled by the private sector, so we need to look at those fees. The CPP, OMERS, teachers, all of those kinds of plans are in fact non-profit, if you will. Even though their own management fees are quite enough, the added profit feature is not part of their statement. It is important to look at that as a way of controlling costs and not eroding savings.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you.

Mr. Wark, I'd like to take this over to you now, because you're talking about the PRPPs and small business, and that it at least gives them a vehicle. From our standpoint--and you were talking about defined benefit plans--the Canada Pension Plan is owned by Canadians and it's a defined benefit plan. If all Canadians had access to that and paid into it, would you not see that as a solid vehicle for those people going forward?

[Kevin Wark]

When we did our review of the various programs that were being proposed, the target group that we thought needed to be benefited were employees of small businesses and the self-employed. Although the CPP proposal, or supplementary pension plan proposal--

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

No, we're not talking supplementary. That's a Liberal position. We're talking about increasing the core assets of the CPP to grow it to double. We're talking about $1,800 a month in 30 years, is what it would accrue to.

[Kevin Wark]

The specific concern we had with that was the time it would take to integrate that to provide a benefit and the fact that it would put an additional cost on small-business owners and others at a time when it's a very difficult financial environment. We don't say not to do it, but we think other things should be done.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you.

Do I have more time, Mr. Chair?

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Ms. Eng, you talked about the increase in cancer rates from 2000 to 2009. Last night the CBC reported that cancer has passed heart disease as the number one killer. I've lost nine friends and family in 15 months. They all wanted to stay at home. You mentioned in your presentation about a balance between an insurance model paying part of that cost. Could you expand on that? I hope there's a little time left.

[Susan Eng]

I think the point is, when people are looking after this care at home, it will still cost, but it does not cost as much as in institutions. We're talking about chronic diseases or even severe diseases like cancer. When we talk about chronic diseases, for example dementia, it doesn't necessarily require the same levels of nursing care or costs that you would find in an institution. If there's an opportunity to deal with those kinds of costs at home, the system would save.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Marston.

We'll go to Mr. Adler, please.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Chair.

And welcome, witnesses.

I want to ask Ms. Eng my first question. I'm going to go down a little bit of a different road here, if everyone could just bear with me for a second.

I want to talk about the national securities regulator. I know that this is something that is important, as far as our seniors go. During the campaign, the Prime Minster made a promise to seniors in the country that he would increase the penalties for elder abuse and all that. But there is another kind of elder abuse, and it's financial elder abuse.

The legislation for the new national securities regulator, which is currently before the Supreme Court, calls for an enforcement agency. I'd like you to talk about that enforcement agency and what that would mean in terms of preventing financial elder abuse and how it would be beneficial for everyone.

[Susan Eng]

Thank you for that.

In fact, the proposal to add a strong enforcement arm to the national securities regulator is extremely important to our members, many of whom have investments. There is a strong belief that many of the investments they were put into were inappropriate. In other cases, their families have invested their money for them. All of these kinds of issues would be part and parcel of the focus of such an enforcement agency.

It is important, because despite the fact that all of the other regulators purport to have a complaints agency or some kind of consumer protection, in fact, they don't. They might be mediators. They can't focus on restitution. It's hard for the average retail investor to access that.

This specialist body being proposed excites us, because there will be, first of all, specialists who will help with the prosecutions. They will have the authority to provide restitution and even to charge criminally. That provides a major sanction against the financial fraud that is often perpetrated against seniors.

[Mark Adler, Conservative, York Centre, ON]

Thank you.

I'd like to direct my next line of questioning to Mr. Macdonald.

As you know, Canada has received rave reviews from economic organizations around the world--the World Economic Forum, Economist Intelligence Unit, the OECD, the IMF, Forbes magazine, and on and on--which say that Canada has the strongest economy in the G-8 and is well positioned to weather an economic maelstrom and economic repercussions that could reach our borders. For all intents and purposes, Canada has managed its economy really well, and we're recognized for that.

I'm just curious about where you came up with your economic figures in terms of the numbers. You're saying that unemployment is increasing. Where are these figures from? I'm just curious.

[David Macdonald]

In answer to the previous question, unemployment has certainly increased since the crisis in 2008, which has left 1.5 million Canadians either unemployed or underemployed.

[Mark Adler, Conservative, York Centre, ON]

Sir, with all due respect, that's not really true. Canada has gained 650,000 jobs since July 2009 and actually has more people employed today than before the recession.

[David Macdonald]

Right, but the number of people in the labour market now is larger than before the recession, as well, so--

[Mark Adler, Conservative, York Centre, ON]

Well, that's a natural result of a good economy. More people jump into the labour market, because there are a lot more jobs available.