Status of Women Committee on June 8th, 2006

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Okay, so we're waiting for them.

[Mitch Bloom]

Yes.

[The Chair, Liberal, Judy Sgro]

Ms. Smith.

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Thank you.

I have one more question. When seniors apply for CPP, it's my understanding they have to apply for that only once. Is that correct? For the GIS benefits, do they have to apply more than once?

From my understanding from my constituents...there was one woman who came in and said she thought she had those benefits but she didn't, and I thought she had to reapply. Could you clarify that, please?

[Mitch Bloom]

My pleasure. Yes, in fact, CPP is a contributory-based scheme. Once you're in the system, you will get your cheques right through to the very end.

GIS is re-evaluated every year. The reason it's re-evaluated every year is that there are conditions of eligibility, the largest one being income. So we have to make sure that you're still within the income ranges we describe.

Marital status will also change it. You get a larger benefit if you're a single individual. So if your spouse or partner has died, we need to know that so we can increase the value of the benefit.

As I also mentioned, residency is important. If somebody has left the country, we don't send those benefits outside of Canada. So that's the reason.

I will also say, as I've said a couple of times, if somebody files their tax return, it is essentially an automated process. We will take care of it all in the background for them as long as they fill out their tax return.

[The Chair, Liberal, Judy Sgro]

Mr. Stanton.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Madam Chair.

I'm just going to go back for a bit to the CPP, and I appreciate, Mr. Bloom, you mentioning just how many improvements have taken place with regard to the stability of CPP. I do wonder, though, as we go forward and as the Canada pension fund becomes so large and in fact will have such weight in terms of its ability to purchase securities and other savings instruments to help keep the plan in place, are there provisions to make sure that the sheer size and weight of the CPP is spread in such a way that it doesn't interfere, as you can imagine, with trading?

When we have such a large block--and I think of, for example, teachers funds, and so on, that become a huge player in equity markets. A fund of this size conceivably is going to be one of the largest funds in the world in terms of its ability.... Could you comment on that, on what provisions might be in place?

[Mitch Bloom]

I really can't say a lot about it, for good reason, because it's an arm's-length body that manages the fund. So the distribution of their portfolio is entirely up to them, and they report annually on it.

As a contributor to the plan myself, I'm delighted to see the diversification they have. They have equity investments, securities, and of course now they're able to invest globally, which allows them to further diversify the risks. Before some recent budget changes, the amount you could invest outside of Canada was restricted. Now, with that--again as a contributor--I'm delighted they'll have that full flexibility.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you.

[The Chair, Liberal, Judy Sgro]

You have a minute and a half left on your side.

[Bruce Stanton, Conservative, Simcoe North, ON]

Can I add something, then?

[The Chair, Liberal, Judy Sgro]

Yes.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Madam Chair.

Let's just go back to this GIS question again--and I appreciate the answer with regard to the fact that most people who are receiving the GIS in fact don't have any additional income. But some would have some retirement income, some RRSPs. Once they cash those, it becomes taxable in their hands. It could basically have the effect of negating any benefit from the GIS.

Where is the current threshold on that right now in terms of annual income? At what point do you lose that benefit?

[Mitch Bloom]

As I think I mentioned, I'm going to leave my charts for the committee, which have the thresholds in them.

Just to reiterate, yes, those other sources of income would be included and would reduce the amount of your GIS.

The principle is very, very simple. It's really about getting as much money as possible in the hands of people who have none. Then, of course, it starts to top out as their income starts to increase.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Cotler, I don't know if you have any questions. Ms. Minna is on the list. You can share the time, if you'd like.

[Maria Minna, Liberal, Beaches—East York, ON]

Earlier we were talking about the question with respect to CPP for caregivers and the dropout possibilities. I want to look overall at the depth of poverty of seniors and women who are in the workforce, doing caregiving, and then becoming the poor seniors of tomorrow, which is what we seem to be looking at.

I understand from the data that it shows the number of low-income rates among seniors and women has gone down, but I'm looking more at the depth of poverty, which is a little more than just the income they receive. I know there are a lot of seniors who are not getting GIS but are on the cusp or just above it. By the time you add rent, they're really in a wholly different bracket, because housing is a huge problem and there is a lack of supportive housing if they need assistance.

My question is this. Have you done any studies to measure the depth of poverty of seniors, not only the absolute income they receive when they happen to be above a threshold, or they're not above it and are therefore fine, but in terms of other factors like housing, drug costs, the need for caregiver programs, and so on?

Could you give me an idea of what that picture looks like? I think that's probably a little more realistic than looking at the hard numbers.

[Mitch Bloom]

I appreciate the question, because I'm also interested, understanding that the benefit is about getting above the measures that are out there. What does that really mean at the end of the day?

There's a big difference in the senior population, for example, between living in a house that you've owned for 40 years and still having to pay rent. I wish I could say here's the study and here's the information on it, but I don't have that. It's an issue that we're trying to get a better understanding of.

As we've already discussed, some of those elements are not federal elements at all and have significant cost implications for seniors. It's already been mentioned that accommodation is a fundamental issue. Drug costs can become a fundamental issue. Those are things that we need to better understand, and I think we're going to try to better understand them.

[Maria Minna, Liberal, Beaches—East York, ON]

I guess we haven't yet done an analysis in the system to try to get at the depth of poverty over and above the exact numbers and thresholds. Are there any studies in place now? Is there anything of that nature?

[Susan Scotti]

I don't think there are any that accurately look at it.

[Deborah Tunis]

I think there's a growing recognition that the simple fact of being above or below the low-income cutoff isn't really the determining factor. Part of what the department's been trying to do is to develop a market basket measure to look at some of the other components. I think that's partly what you're getting at.

In terms of depth and duration, more of our focus has been on low-income families and mothers with young children. I think you're talking more about the senior population. Canada has made so much progress in terms of the statistics of taking more people out of poverty. We've been focusing more on low-income mothers.

[Maria Minna, Liberal, Beaches—East York, ON]

For what it's worth, I have my own little study. It's all word of mouth and it's not very scientific, but I can tell you about it.

I'm asking about it because I see it out there every day. I only want to get a handle on what that means and what the factors are so we can actually get some data. I know that housing is a factor.

The other thing is this. I was very involved in trying to restructure our pension system so that women are not left completely behind. I didn't succeed, obviously, because it would have happened.

I'm again asking if any analysis has been done, because I know that Finance was doing something. I'm not quite sure if it ever translated to your department, because that's where the policy would be.

I know there's CPP sharing, but it's not compulsory. I was looking at splitting CPP, RRSPs, or any pensions that are assisted or subsidized by government through tax dollars at a time of separation or divorce. It would be compulsory, so that both the man and the woman carry 50% of pension assets, if you like. A stay-at-home mom, who isn't earning an RRSP or a work pension, is especially taking nothing with her. It was one of the things I was working on.

Has any of that kind of work been done in your department?

[Mitch Bloom]

Absolutely.

There are two rules. One was the pension sharing, which, you're right, is voluntary. It's almost a tax planning tool. Credit splitting is a different rule that's available, and it is for divorced and—

[Maria Minna, Liberal, Beaches—East York, ON]

Sorry, none of it's compulsory, though, right?

[Mitch Bloom]

No, you have to come in and let us know that you're being divorced or you're separating and you wish to avail yourself of this rule.

It's a pretty blunt instrument. They come in, and the CPP credit assets acquired during the period of cohabitation are split 50-50. We get a lot of correspondence on this. I think it's an exceptionally good rule to ensure equity after a split.