Evidence of meeting #68 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was oas.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Arthur Sweetman  Professor, Ontario Research Chair in Health Human Resources, Department of Economics, McMaster University, As an Individual
  • Michael Wolfson  Professor, As an Individual
  • Vangelis Nikias  Project Manager, Convention on the Rights of Persons with Disabilities, Council of Canadians with Disabilities
  • Frank Zinatelli  Vice-President, General Counsel, Canadian Life and Health Insurance Association Inc.
  • Keith Ambachtsheer  Director, Rotman International Centre for Pension Management

10:05 a.m.

Conservative

Brian Jean Fort McMurray—Athabasca, AB

Absolutely.

I don't know if you've had an opportunity to see the National Post this morning, but Windsor has a Tim Hortons in a hospital. Did you see that article?

10:05 a.m.

Professor, Ontario Research Chair in Health Human Resources, Department of Economics, McMaster University, As an Individual

Dr. Arthur Sweetman

No, I'm sorry. I didn't.

10:05 a.m.

Conservative

Brian Jean Fort McMurray—Athabasca, AB

I didn't know it was possible for Tim Hortons to lose money, but they have a Tim Hortons business in a hospital that has to pay rates of $26 an hour, instead of the usual $10 an hour that other Tim Hortons pay their staff. As a result, taxpayers are on the hook for $265,000 in losses per year.

I had a similar situation. I had a Quiznos in Fort McMurray, the busiest Quiznos in North America for a period of time. I had to pay $25 an hour, and I couldn't change the retail prices at that time.

Can you comment on that, as far as what's happening in the rest of the country—the artificial, inflated employment wages that aren't competitive?

10:05 a.m.

Professor, Ontario Research Chair in Health Human Resources, Department of Economics, McMaster University, As an Individual

Dr. Arthur Sweetman

I'm not sure how artificially inflated those wages are in all regions of the country. In Alberta, you're in the middle of a boom, and in booms, wages go up. I don't think that's artificial inflation; that's economics at work.

In other parts of the country—

10:05 a.m.

Conservative

Brian Jean Fort McMurray—Athabasca, AB

In Windsor, it's a union issue. They can't employ anybody in the hospital who is not union. They have to pay $26 an hour, which is obviously a non-competitive rate.

10:05 a.m.

Professor, Ontario Research Chair in Health Human Resources, Department of Economics, McMaster University, As an Individual

Dr. Arthur Sweetman

I can't speak to that. I haven't read that article.

10:05 a.m.

Conservative

The Chair James Rajotte

Thank you.

I realize we're going past the time, but as the chair, I want to take advantage of the panel we have here. I do have a few questions.

A number of you have raised the issue of the need for a comprehensive approach to changes to retirement income, or income security.

Mr. Wolfson, you raised the issue of RRSPs. Perhaps I'll address my questions to Mr. Wolfson, Mr. Ambachtsheer, and Mr. Sweetman.

In terms of RRSPs and RRIFs, one of the other witnesses said we should look at the RRIF conversion rate, or the mandatory withdrawals for RRIFs. Is that what you're pointing to when you mention RRSPs?

10:05 a.m.

Professor, As an Individual

Dr. Michael Wolfson

No, I wasn't thinking of that specifically. In fact, I invented the RRIF, in 1980, and I can tell you the story, if you want, about why I did that.

The kind of cacophony that one sees, where you have to mature your RRSP by age 71; CPP, you can claim at 65, plus or minus five years; OAS, in the fullness of time, you will start at 67, plus perhaps up to 72, but not below 67.... These things are uncoordinated.

10:05 a.m.

Conservative

The Chair James Rajotte

But should you have the same age for all of them?

10:05 a.m.

Professor, As an Individual

Dr. Michael Wolfson

There should be flexibility. I agree with Keith on that.

We can think of a band, whether it's from 60 to 70, or 62 to 72, or eventually higher than that; that's fine with me. But we should be thinking of a band and coordination and integration.

Employers have plans that already have ages in them for workplace pensions.

10:05 a.m.

Conservative

The Chair James Rajotte

Mr. Ambachtsheer or Mr. Sweetman, do you want to comment briefly on that, the coordination between...?

10:05 a.m.

Prof. Keith Ambachtsheer

I'll bring up a somewhat different issue. You have something like $300 billion or $400 billion of RRSP money in retail mutual funds. Those are currently being charged 2% plus, in terms of fees. In a low-return environment, it doesn't work.

To me, a lot of these technical things are interesting and important, but I believe we have a fundamental market failure, in the sense that we have this retirement income system—a large part of it is RRSP-driven—and people are not going to get any kind of return on their contributions in the current retail mutual fund environment.

That's one of the big things we could be doing through PRPPs, but as I say, I don't see it coming yet.

10:05 a.m.

Conservative

The Chair James Rajotte

Okay.

Mr. Sweetman, do you want to comment on that in terms of coordination between RRSPs, RIFFs, and the OAS changes?

10:10 a.m.

Professor, Ontario Research Chair in Health Human Resources, Department of Economics, McMaster University, As an Individual

Dr. Arthur Sweetman

I think that definitely the ages need not be the same, but they should be coordinated across those various public policy elements, and they probably shouldn't be fixed over time. As Canadians age—or at least as life expectancies increase—those fixed years should be adjusting accordingly.

10:10 a.m.

Conservative

The Chair James Rajotte

One witness actually said with respect to OAS that you don't fix the ages, but you actually adjust it as life expectancy changes. Is that what you would recommend?