Status of Women Committee on June 8th, 2006

[Mitch Bloom]

Perhaps I can give you a brief overview of our system. There is one major reason why we believe that our system is better than the rest.

There are many levels to the system.

It is one difference compared to other countries. We have the Canada Pension Plan.

It's a contributory-based scheme, which provides full coverage to all workers, regardless.

It is not the same in other countries.

[Maria Mourani, Bloc, Ahuntsic, QC]

Pardon me. Could you speak in just one language, either French or English? I am asking you because the translation is difficult to listen to. You may speak in English, it doesn't bother me at all.

[Mitch Bloom]

As I was saying, the system has three levels. The Canada Pension Plan is the first level, which covers all workers in the system, regardless of where they work. In other countries, that's not necessarily the case; it doesn't seem to cover all parts of the workforce.

The old age pension is something almost no other country has. It's one that doesn't require your having been simply in the paid workforce; it covers unpaid work as well. It's measured on the basis of your contribution to Canadian society. Most other countries find this outstanding. They don't understand how we ever even invented it. It has a significant cost to the government, which pays it every year, and again, it's found in almost no other place in the world.

Many of the benefits we have, which I've already mentioned, like survivors and like the GIS, are paid to women on a vastly disproportionate basis. Again, these kinds of benefits just aren't found anywhere else. In terms of the gender aspect of our programs, most countries find that very surprising.

There are many other points that could be made about how our system is built to spread risk and cost across contributory-based schemes, tax dollars, and investments. Most other countries don't have that kind of diversification in their system so it creates this kind of stability that few other countries in the world actually have and many others wish they did have. In general, that's the reason we consider it to be one of the best.

[Maria Mourani, Bloc, Ahuntsic, QC]

As to how generous the system is, compared to other countries and in monetary terms, meaning how much winds up in people's pocket, are we number one, are we ahead or are we quite behind?

[Mitch Bloom]

Merci.

In that regard, every country comes to a different position as to how much they should replace after a person retires. The standard around the world is that about 70% of pre-retirement earnings should be enough to live on in post-retirement. Canada's public pension system itself covers off about 40% and private pensions, RRSPs, and other elements of our system cover off the remaining 30%.

What people find interesting about our system is how much we spend on low income. The guaranteed income supplement, which was mentioned, is not a feature found in many other countries. Canada has made a decision in the design of its system to include this benefit, which is up to $7 billion right now in benefits paid to low-income seniors, which is not a feature found in many other countries.

[Susan Scotti]

You've also asked about whether poverty amongst older women is dropping. I noted in my opening comments the drop that has taken place over the past few years. The recent measure that was introduced to provide an increase to the GIS will mean that we will make the benefit available to about 50,000 more low-income seniors, and it will reduce the LICO rate, the low-income cut-off rate, for a number of seniors from 6.9% to 6.3% when that increase is fully implemented.

You also asked about how many seniors are not receiving the guaranteed income supplement. There's a bit of a debate about the numbers on that one. You'll have seen different numbers pointed at in different reports. The GIS client base is constantly in flux because clients die, their current client experiences change in income levels or they may leave Canada for other countries, and new clients become eligible. It's hard to estimate, but there was a recent figure, in 2000, provided in the NACA report that estimated it to be.... It's a figure that is not consistent with the Statistics Canada data we have, which estimates these numbers are quite a bit lower, about 206,000.

It's hard to do an accurate assessment of the numbers, as the eligibility is also based on a number of factors, like marital status or periods of residence in Canada. It's difficult to do a precise estimate of the numbers. I can assure you we do the very best we can to reach all potential beneficiaries of the GIS, and we can describe that for you in another round if you wish.

[The Chair, Liberal, Judy Sgro]

Ms. Mourani, you have only a few seconds left. Be very quick.

[Maria Mourani, Bloc, Ahuntsic, QC]

When people say that someone lives below the poverty line, what figure is being used? When you say that poverty is dropping, I suppose this means that people are no longer living below the poverty line, which does not mean that they are earning $20,000 per year. It may mean that they are earning perhaps $15,000 per year, which is not easy for someone who has to pay for housing and survive. So, I want to understand the figure being used.

[Lenore Duff, Acting Director, Economic Security, Department of Social Development]

Canada, of course, doesn't have an official poverty line. In measuring low income we use the standard Statistics Canada post-tax low-income cut-off. It's the measure that's used in all their publications relative to measuring low income in Canada. People often refer to it as the poverty line. Statistics Canada continues to underline that it isn't a poverty line, but rather a measure of low income.

It's a constructed figure. People who spend 20 percentage points more on the necessities than the average family or individual are deemed to be below the low-income cut-off. That's how the number is constructed.

It is a very standard measure that's used across groups to describe low income in Canada.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Could I ask you if you could supply the committee with a comparison chart for the other countries and how Canada compares, following Ms. Mourani's question?

[Susan Scotti]

Yes, we can do that.

[The Chair, Liberal, Judy Sgro]

Thank you.

Ms. Smith.

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

Thank you, Madam Chair. I want to thank the presenters today for their presentation, because it is clearly something that impacts on every single Canadian woman, and man too. It is something we really have to examine.

The one question that really presents itself is this. I know there are a number of people who are eligible for the guaranteed income supplement who never get around to actually applying for it. It is the same with CPP. This is a mystery to me, in a sense. I'm very surprised that this happens here in Canada.

Could you comment on that? Could you comment on the numbers you know of to whom this is happening and on how we could all better inform people? I'm sure people would apply for it if they knew how to do it.

[Mitch Bloom]

I wish I knew the answer to that question in the same detail you'd like to have.

I can't express strongly enough how much effort the government goes to, to reach all these people. Having MPs in the room, I will use this opportunity to ask you to help as well. We try to work with MPs and anybody else we can find to do this.

The good news is the world has changed a lot, certainly technologically, so we have all sorts of new tools we didn't have 10 years ago. It's unfortunate that some of the data we have is still a bit dated. We'll have some new information out as time progresses, so you'll see how much we're able to do.

I'm a huge advocate of getting seniors to fill out their tax returns. We will find them 100 times out of 100, if they fill out a tax return, because we share data with the revenue agency. On top of that, they also get a GST rebate if they're low income, so it's really a winning scenario for them to do it.

We also appreciate, especially on the low-income side, that it's not going to happen in every case. One of the things we work really hard on is to work with provinces to get their social assistance data for people around 64 years of age who might not file a tax return but who are likely on low income as well. Some of them are starting to cooperate with us, and again we'll get automatic data transfers in and I'll be able to find these people. If somebody ever made a CPP contribution, and if at the age of 65 we haven't heard from them yet, we go out to try to find them. Everybody gets a letter with their statement of contributions. It's not just on CPP either. We tell them about all the benefits they may be entitled to.

We have people on the ground across the country who go out to trade fairs, who go out to nursing homes. We try to do anything we can in that regard. One of the new things we're trying to do also is work more with third parties—the Salvation Army, tax planners, funeral directors—for survivors' benefits.

We're looking under every rock we can possibly find, and it's really a question of getting an understanding of why somebody might not want to apply for a benefit they may be entitled to. There is a recent Statistics Canada report that came out—I don't have it with me—that actually went into this a little bit. One of the things they realized was that because the GIS is an income-tested benefit, when people have a very small amount of the benefit—the kind of thing that literally tops out at $2 per month—they decide not to do it.

There are also some logical reasons they'd like not to do it: some provincial governments have programs in which the income from our program is used as a test against their program, and it could result in a loss of a benefit. So there is a conscious decision in some cases by people not to do it.

That's also an area we're working on with provinces, to try to get a better alignment across the benefits.

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

Yes. It sounds as if you feel the same way I do. It's a complete mystery to me.

Could you also tell us what the line is? How much income do people have to have available to them to be eligible for the guaranteed income supplement? From what I can tell, one of the problems is that people get to a point where they're not quite sure what the exact line is. I think people feel the bureaucracy is too much for them to reach out to. I know this is not the case. I mean, we're doing everything we can on all sides.

I think this is an issue that would help a lot of seniors. And I agree, members of Parliament and others need to help in this initiative as well.

But what is the line of income they are earning or have that guarantees them the GIS?

[Mitch Bloom]

We can provide the committee...I have a little chart in front of me that we distribute to the public that I think you'll find helpful. Anybody who is interested in it can get it. If you're a single person, the current lines right now for the guaranteed income supplement are $14,256. Yes, it literally calculates in that degree of specificity. If you're the spouse or a common-law partner, there are different thresholds, depending on whether your spouse or partner is getting an old age security pension at 65 or not. For example, if the person is under that age and not getting OAS, the threshold moves up to a little more than $34,000; if your partner is a pensioner as well, the threshold is $18,720; and if the person is getting our allowance program for a person 60 to 64 also in a low-income situation, that threshold is $34,638.

It's one of the reasons we encourage people to file taxes. We do all these things for you automatically.

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

When could we have that chart? As members of Parliament, we could put it in some of our householders and ten percenters, just to make people aware, educate them. We could use that chart.

[Mitch Bloom]

I'll leave you my copy of the chart. And I can assure you we work with MPs and their offices and your staff every year to try to give you the materials you need. I read the letters from MPs and your constituents, and anything you can do to help reduce the number of letters I get would be welcome.

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

It's a twofold benefit.

Do I have more time, Madam Chair?

[The Chair, Liberal, Judy Sgro]

Yes, 30 seconds.

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

All I'll say, then, is thank you, and I look forward to the chart.

[The Chair, Liberal, Judy Sgro]

Good.

Mrs. Mathyssen.

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

Thank you very much.

I, too, have a number of questions.

I'm going to start with young working women first, and I'd like to come back to Ms. Mourani's question.

You talked about the reduced work time when it comes to caregiving and young women actually having less income. We know that women make two-thirds of what men make, and I've come across another statistic that shows that, since 1992, the participation of women in pension plans, company pension plans, has declined. With all these situations, it seems we may have reduced poverty among older women at this point, but we may be looking at a resurgence of poverty in future.

Is there any sense of how that future could play out, given all these problems young women are facing?

[Deborah Tunis]

I think part of my response will build on the question Madame Mourani also asked.

We don't have a crystal ball to see what poverty rates are going to be like in the future. I noted in the Montreal Gazette today that a study has been released, and as the baby boomers move through the age cohorts...and I'm part of that crowd myself.

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

Some boomers are here, yes.