House of Commons Hansard #102 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was pension.

Topics

Pensions
Government Orders

8:30 p.m.

Liberal

Gerry Byrne Humber—St. Barbe—Baie Verte, NL

Madam Chair, picking up on the issue of GIS and the penalty that will be imposed upon senior citizens when, for an emergency medical need, for example, they have to cash out $10,000, a relatively small figure but huge to them in their needs, could the member comment on whether or not he is satisfied that the government has looked at all aspects of the needs of senior citizens and considered the fact that there are not two classes of seniors, those who pay taxes and those who do not pay taxes? There is quite a diversity and quite a range of senior citizens who have various needs.

A lower income senior citizen cashing out an RRIF may never know or understand that as a result of that decision, he or she is going to lose thousands of dollars in future years' income, because it will negatively affect his or her eligibility for GIS and whether or not he or she is eligible for a drug card.

With the hundreds of millions of dollars the federal government spends on advertising, why—

Pensions
Government Orders

8:30 p.m.

NDP

The Deputy Chair Denise Savoie

Order, please. I would like to give equal time to the hon. member, less than a minute, 45 seconds.

Pensions
Government Orders

8:30 p.m.

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Madam Chair, I agree with the member that seniors are going to feel very much blindsided by what has happened to them on this file.

I will give an example of something I discovered when I was elected, which the Liberals had done, and that was the disability tax credit that they were not promoting to people who were entitled to have it. There are hundreds of people in my riding who now have the disability tax credit because we informed them.

The government's job is to make sure the people are well informed on what is happening to them, and I agree with the member that in this particular case, they were not.

Pensions
Government Orders

8:30 p.m.

Calgary—Nose Hill
Alberta

Conservative

Diane Ablonczy Minister of State (Seniors)

Madam Chair, I am pleased to have this opportunity to share with the House actions taken by the government to help ensure that older Canadians have the supports they need to enjoy a good quality of life and a secure sense of well-being.

Our government recognizes the important contributions seniors have made and continue to make to both the economic and social fabrics of our nation. Seniors are living longer and healthier lives than ever before.

Recently, David Butler-Jones, Canada's Chief Public Health Officer, issued his report, “Growing Older—Adding Life to Years”. The report highlights the state of Canadian seniors' physical and mental health, as well as their economic and social well-being.

The good news is that Dr. Butler-Jones came away from the study with an overall positive outlook on Canada's aging population. He noted that people, by and large, are actually aging well. He says aging is a vibrant time and while sometimes there are infirmities along the way, people live life well, are engaged in their communities and contribute to society. It has never been better, says Dr. Butler-Jones.

This very encouraging observation is met with the reality, he says, that as Canada faces a larger older population, efforts made toward healthy aging need to be managed in more effective and meaningful ways. This is precisely what the federal government, in collaboration with provincial, territorial and municipal governments, intends to do.

The federal government also intends to ensure that older Canadians have necessary financial supports. We understand that financial security largely contributes to a secure sense of well-being. That is why, since 2006, this government has implemented several key measures to reduce the tax burden on seniors.

To date, our government has provided more than $2 billion in annual tax relief for seniors. That is more than $2 billion each and every year. Some of these measures include implementing pension income splitting; increasing the age credit twice, first in 2006 and then again in 2009, benefiting more than two million seniors; doubling the maximum amount of pension income that may be claimed under the pension income tax credit from $1,000 to $2,000, which removed 85,000 seniors from the tax rolls completely; increasing the allowable earnings exemption from $500 to $3,500; allowing registered retirement income fund annuitants to reduce the minimum amount required to be withdrawn for the 2008 tax year by 25%; and increasing the age limit for registered retirement savings plans from 69 to 71 years of age, allowing more flexible, phased retirement arrangements.

As we can see from that long list, we have been working hard to deliver real financial benefits for Canadian seniors, but our actions have not stopped there. Our government introduced the tax-free savings account, which is especially useful for seniors as withdrawals from it are GIS exempt. Today, over 90% of seniors are receiving support from the GIS and OAS, which provides over $33 billion in assistance to seniors each year.

As well as increasing supports, we have improved service delivery to better ensure that seniors receive the benefits to which they are entitled. The application processes for the Canada pension plan and old age security have been simplified and updated, allowing seniors easier access to these important supports.

Furthermore, by introducing automatic renewal of the guaranteed income supplement under Bill C-36 in 2007, eligible seniors no longer have to reapply for this benefit every year. While these financial supports and the delivery of these benefits are important, we have made significant progress in a number of other ways.

In 2007, our government created the role of Minister of State for Seniors to be a voice for older adults at the cabinet level. That same year we established the first ever National Seniors Council, which provides advice to the federal government on matters related to the well-being and quality of life of seniors. This fall the council held round tables across the country to gain perspective from Canadians on retirement and labour force participation among seniors and on intergenerational relations. The council will produce a report and recommendations on these topics in the spring.

One of the NSC's past studies was on elder abuse, an issue that this government takes very seriously. In budget 2008, we committed $13 million over three years to the federal elder abuse initiative to help educate all Canadians to recognize the signs and symptoms of elder abuse. With an aging population, it is important that Canadians be aware of this type of mistreatment and be empowered to stand up and to speak out.

Through this initiative, we are working with the provinces and territories as well as professional organizations and community support groups to take measures to help prevent the exploitation of older Canadians. One way that community groups are helping to get this message out is through funding from the new horizons for seniors program, a program so successful and in such high demand that we increased its annual funding to $40 million in budget 2010, so that seniors can continue to be provided with opportunities to be active and engaged in their communities. The new horizons for seniors program also assists seniors to be active leaders and mentors in their communities. They are best able to achieve this through programs that foster inclusion, good nutrition and physical activity.

Bill C-40, which creates National Seniors Day on October 1 of each year, received royal assent just last week. This day will give Canadians an opportunity to collectively celebrate the continued contributions of older Canadians.

I would like to commend my colleague, the Minister of Finance, who has been working hard with his provincial and territorial counterparts to help ensure that older Canadians continue to enjoy a sound, reliable retirement income system. I can assure members that this federal government wants seniors to continue to help create a vibrant and successful Canada. We want our policies, programs and services to encourage and support seniors to remain active, healthy and engaged in their families, workplaces and communities.

We remain committed to ensuring that older Canadians receive the benefits to which they are entitled, that they stay financially secure in retirement and that they remain free from abuse and hardship. We also remain committed to ensuring that Canada is prepared to deal with the demographic shift that is upon us. Right now one in seven Canadians is a senior. In the year 2031, it will be one in four. The so-called boomer apocalypse will have profound impacts on the social and economic fabrics of our nation.

We need to be honest with ourselves and each other as leaders, policy makers, policy influencers, advocates and Canadians that the choices we make today will not only affect the baby boomer bubble but also our children, grandchildren and their children. It is our responsibility to ensure that we leave them a Canada that is just as strong and vibrant as the one we have enjoyed.

Our government will lead in preparing for the future with the well-being of seniors and of all Canadians as our goal.

Pensions
Government Orders

8:40 p.m.

Liberal

Gerry Byrne Humber—St. Barbe—Baie Verte, NL

Mr. Chair, I would like to follow up on some of the comments and questions I had earlier regarding the treatment of senior citizens who elect to cash out a registered retirement income fund, RRIF. I am speaking of those who are required to do so not as an option or something they choose to do to purchase a luxury item, but specifically and especially those who have to cash out a RRIF, above and beyond their minimum annual requirement, to meet a medical emergency or some other need within their own family.

Currently under the guidelines that have been adopted and created by the Government of Canada, as of May 2010 for anyone who elects to cash out a RRIF, that income will be calculated in whether or not the person is eligible for the GIS, guaranteed income supplement.

That was never what this program was intended for. If someone is drawing employment insurance while over the age of 71 and needs a RRIF, that money is optionable. It is not impacting on the senior's eligibility for GIS, but if he or she draws money out from his or her RRIF, the individual could lose a lot of money. That was never what was intended when we promoted private citizen investment in RRSPs.

Why has the government done this? Will it see fit to correct it and put it back to the old rules?

Pensions
Government Orders

8:40 p.m.

Conservative

Diane Ablonczy Calgary—Nose Hill, AB

Mr. Chair, I heard the member bring this issue up before.

These are issues that we continue to examine. As the seniors cohort grows, we are going to need to make sure that any anomalies in the system are addressed. We have done that in other ways, as well. We will continue to do that.

I thank the member for raising this issue. He knows it is being examined by the government. We are grateful in this country that we have a very low rate of poverty among seniors. It used to be almost 25% at the end of the 1970s, and today it is less than 6%. We have been tackling this issue successfully. We are proud of it.

We have one of the lowest poverty rates among seniors in the developed world. That does not mean there is not more to do, but it does mean that progress has been good. We will continue to be committed to it.

Pensions
Government Orders

8:45 p.m.

NDP

Claude Gravelle Nickel Belt, ON

Mr. Chair, I really do not have a question but I do have some comments. Maybe the Minister of State for Seniors could comment.

I heard something tonight that was rather disturbing. A while ago I heard the Minister of Finance say that the Liberals and the NDP are obsessed with thinking there are two classes of Canadians. That is quite the statement to make.

Then I heard the Minister of State for Seniors say that seniors have the support they need. Well, a $1.50 raise in their pension is not the support they need.

Then she went on to quote, I believe it was Dr. Butler-Jones, who said that people are aging well and that they are coping well. In reality, they are aging in poverty.

I would ask the Minister of State for Seniors, the next time she runs into Dr. Butler-Jones and the Minister of Finance, to grab them by the hand, get away from Bay Street and take a walk on Main Street, Canada. They will see two classes of people, and they will see seniors living in poverty.

Pensions
Government Orders

8:45 p.m.

Conservative

Diane Ablonczy Calgary—Nose Hill, AB

Mr. Chair, I am sorry that my colleague opposite has such a negative view of life.

In fact, Dr. Butler-Jones is the Chief Public Health Officer of Canada. He has tremendous expertise. His report has been very positive. There are obviously always exceptions, and we want to make sure that we support all Canadians.

If the member had been listening, he would know that the rate of poverty among seniors has fallen dramatically in this country. It is among the lowest in the developed world. Less than 6% of Canadian seniors live in financial need. We continue to address their needs with a number of measures that I have already outlined in my remarks.

Canada is a great country. It is a country that cares about all citizens. It is a country that continues to look for ways, and has a commitment to support every member of society. We will continue to do that. For the member to suggest otherwise is simply unfair to a great country that is doing extremely well and will continue to work hard on behalf of all citizens.

Pensions
Government Orders

8:45 p.m.

Macleod
Alberta

Conservative

Ted Menzies Parliamentary Secretary to the Minister of Finance

Mr. Chair, I know the minister has been working with and visiting seniors. In fact, at my invitation she attended a seniors complex that was actually trying to raise money to build an assisted living seniors home in Bragg Creek. I appreciate her making the effort to come out on a day that should have been the Sabbath for her. However, she came out anyway.

Perhaps the minister could reflect on how challenging this is. I am troubled by some of the comments made tonight that we are going to fix this and we are going to fix it right now. Let me read a quote by the finance minister for Ontario, Dwight Duncan:

I have always felt this is going to be a long process. We have to look at moving toward a better integrated national pension system, both private pensions as well as the public pensions.

I wonder if the minister could say whether that is what she has been hearing from the many seniors she has been meeting with across the country. Let us not make a mistake; let us make sure we get it right. Is that what the minister has been hearing?

Pensions
Government Orders

8:45 p.m.

Conservative

Diane Ablonczy Calgary—Nose Hill, AB

Mr. Chair, my colleague mentioned retirement income security. There is a concern about that across the country, particularly in light of the recent recession and some of the difficulties that savings and investments encountered in that period.

I have had the privilege of attending some of the round tables on retirement income security. People understand that there are ups and downs in investments and savings. They understand that this is a long-term landscape. They want to make sure there is more security for people in retirement but they also want, as my colleague said, to ensure that leaders do not rush into arrangements which may turn out to be unsustainable or ill-considered in the long term.

It is difficult sometimes to not see the magic bullet appear right away. I commend my colleague who has spent countless days and hours attending round tables and public meetings listening to Canadians. He himself has been a tremendous leader in that regard and has shown a real commitment to the well-being of seniors.

I am confident that my colleague, the Minister of Finance and other leaders will get this right. I know they are working hard to do that.

Pensions
Government Orders

8:50 p.m.

Liberal

Judy Sgro York West, ON

Mr. Chair, given the fact that the Minister of State for Seniors does not seem to have an awful lot of compassion when it comes to the 6% who are still living below the poverty line and given the fact that the government has lots of money for fake lakes, the G20 and all of the rest of it, why is it that the Minister of State for Seniors has not been able to get enough money to help the 200,000 people who continue to live below the poverty line?

Pensions
Government Orders

8:50 p.m.

Conservative

Diane Ablonczy Calgary—Nose Hill, AB

Mr. Chair, I know my colleague has a real concern for seniors. The member will know that the GIS was increased in 2006 and again in 2007. We continue to examine ways to assist the small cohort of people who truly live in very difficult and desperate circumstances. We recognize that. We are working with the provinces and territories to address it.

I know the member will also be working with other members of the House to look at this issue. I think there will be some movement on that on an ongoing basis until we can ensure that all people have the kind of security they need.

Pensions
Government Orders

8:50 p.m.

Liberal

Judy Foote Random—Burin—St. George's, NL

Mr. Chair, I rise to speak to this very important matter for all Canadians, not just for seniors and retirees.

In 1927, Liberal Prime Minister William Lyon Mackenzie King presided over the establishment of Canada's first old age pension plan. In the true spirit of Liberal values, the Liberal Party of Canada took a historic step by enacting this legislation and set a trend that would continue. Next it was Louis St. Laurent who delivered the Old Age Security Act. Then in 1963, another Liberal prime minister, Lester Pearson, began working on the Canada pension plan.

As has been pointed out by my colleagues, the Liberal Party of Canada has a collective legacy of valuing the long-term pension security of Canadians. It should be noted that all of these Liberal prime ministers were opposed by the Conservatives of the day. The Conservative Party has a progressive history of opposing improvements to Canada's pension plans and ignoring one of the most vulnerable groups in society. The Conservatives would rather allow our seniors and pensioners to fend for themselves. Quite frankly, this is simply un-Canadian.

While we have an old age security and pension system that has served Canadians well in the past, the Liberal Party recognizes the need to change and improve upon the system that we have grown and nurtured over the years. That is why we are fully supportive of Bill C-574, which is known as the retirement income bill of rights.

It is clear that the next 20 to 30 years will present serious challenges to Canadian pension regimes. An aging population, long natural lifespans and record levels of personal debt will be compounded by lower disposable incomes and continued global economic instability. If we are to plan for the future security of our pensioners, seniors and other vulnerable members of our society, we have to act now. We must act with decisiveness to ensure the viability of our pension security systems in the long run.

There are a number of principles that the Liberal Party of Canada has developed through its expert working group on retirement income security. The first is the inherent value of functioning pension systems. The Liberal Party understands that a robust and dependable retirement income regime is in everyone's best interests. It is really quite simple. Canadians, in fact all people, are happier and more productive during their working life when they are assured of a steady income upon retirement. Subsequently, there is less strain on other social services such as welfare, housing and health care.

There is also the question of dignity. Statistics show that poverty is a very real factor in Canadian society, particularly in the population over 65 years of age, and any suggestion that that is not the case is foolhardy. No one should be living in poverty. It does not matter if it is 6%, 10%, 20%. No one in this day and age in this country should be living in poverty.

Rising costs of basic living are claiming more and more of the income of seniors and retired Canadians. Higher taxes, higher home heating costs, higher transportation and health care costs all point to the need to adjust our current retirement income regime to meet these basic expenses. No Canadian who has worked a lifetime should face the difficult decision of having to pay for medication or to pay the heating bill.

The Liberal plan as laid out in Bill C-574 would ensure that our seniors would not have to deal with such choices, that they would in fact be able to live in comfort.

What the Liberal Party plans to do is to revisit the pillars of the Canadian retirement income system. Traditionally these pillars are: old age security, the guaranteed income supplement, the CPP, or QPP in Quebec, and the various privately sponsored tax-deferred plans. While these Liberal pillars have provided for a strong system in the past, they need to be enhanced in the face of new pressures such as an aging population and the instability of global markets, to name just two things.

What we need to do is to shore up the strengths of the current system while purging its weaknesses. What we propose is a holistic approach to strengthening the current system. Unfortunately for millions of Canadians, only the first two pillars of the system can be relied upon in retirement and old age.

Most Canadians will qualify for old age security and the guaranteed income supplement, as well as the CPP or QPP. However, a Statistics Canada report released on May 25 of this year reports that 75% of private sector employees in Canada did not have a registered pension plan at the end of 2008. That is 75%. Let us keep that number in mind.

This number means that millions of Canadians face dismal prospects after a lifetime of working and contributing.

Every year, I hear from a growing number of my constituents who are affected by clawbacks in their guaranteed income supplement. Every July, I receive many calls from seniors when their incomes are assessed and adjustments are made. If they have an increase in their annual income, such as a CPP increase, this results in a reduction of the guaranteed income supplement.

Let me give an example of how this directly impacts seniors. One lady in particular stands out in my mind. Mrs. Marion Russell of Stephenville Crossing in my riding is 70 years of age and a widow who worked her entire life. Because of an increase in her CPP, she lost the $4.51 she received in GIS. But more importantly, she lost her provincial drug card, her card that enabled her to have access to those medications that she needs in her old age to deal with health issues that she faces on a daily basis. This is simply unacceptable. That a minor increase in CPP could result in the loss of her GIS and her drug card should be cause for concern for everyone.

That is why we are here tonight having this take note debate. That is why my colleagues and I are fighting for our seniors and pensioners.

That is not all. As we speak, there are seniors in my riding and across this country who are sitting in malls to stay warm because they cannot afford to keep their homes heated. There are seniors who are malnourished because they cannot afford good food to keep them healthy.

We know for a fact that right now Canadians are more dependent on food banks than at any other time since the Great Depression.

In January of this year, I had the opportunity to meet with many of my constituents at a town hall meeting in Stephenville to discuss seniors issues and pension reform. I was joined by my colleague, the Liberal critic for seniors and pensioners. What we found was not surprising. People are concerned that the pension plans they have paid into all their lives are not going to be there when they retire. Too many people are simply unable to cover the basic costs of living on CPP and GIS alone. When adjustments are made to their income, many people stand to lose what precious little resources they have, by way of clawbacks to their payments.

The Liberal Party has been pressing the government for reforms to make retirement easier and more secure. We have been consulting with our constituents and Canadians across the country to develop a plan that will facilitate safe and secure savings for retirement.

The Conservatives, on the other hand, are failing to live up to the rights of Canada's seniors and future pensioners by neglecting to undertake much needed pension reform. Today, 1.6 million seniors in Canada are living on less than $15,000 annually. In less than 10 years, one in five Canadians will be over 65. This presents an immediate challenge and we need to act quickly with solid pension reforms.

Given the rising debt load of Canadians and the increased cost of basic living, it is simply unrealistic to expect Canadians to survive with any dignity on old age security and CPP alone.

That is why we are recommending that pension reform should now include private savings outside of tax-sheltered plans. Public and private structures should be integrated with a goal of providing more coverage to Canadians who run the risk of falling through the cracks as the situation now exists. In particular, what we are proposing will benefit women who statistically endure greater rates of poverty because of factors involving longevity, employment type and tenure.

Other specific pension reforms the Liberal Party is calling for include a supplementary Canada pension plan to give Canadians the option of saving more for retirement, allowing employees with stranded or abandoned pensions following bankruptcy the option of growing their pension assets in the Canada pension plan, and protecting vulnerable Canadians on long-term disability by giving them preferred status as creditors of bankruptcy.

Pensions
Government Orders

9 p.m.

Macleod
Alberta

Conservative

Ted Menzies Parliamentary Secretary to the Minister of Finance

Mr. Chair, I listened with interest to my hon. colleague across the way talking about this very serious issue that we are discussing tonight. If I heard correctly, she suggested that the Liberals would address all facets of the pension system.

My first question is, would that be in discussion with the provincial and territorial partners? My sense from her comments is that the Liberals want to just go it alone. We all know that constitutionally that is not possible. So I am hoping that the Liberals have actually spoken to some of their colleagues in the provinces to make sure that what they are suggesting would work. I would hazard a guess that provincial colleagues, ministers in other provinces and territories, would not agree with that.

Secondly, the hon. member used the number of 75% of Canadians not having registered pension plans. That is an interesting comment but does not take into account that many Canadians have prepared otherwise for their retirement, whether it is with their business or a second or third home for rental that they would sell and use for their retirement. Have the Liberals taken that into account?

Have the Liberals taken into account how effective it would be if we continued to lower taxes for Canadians so they actually have more money to save?

Pensions
Government Orders

9 p.m.

Liberal

Judy Foote Random—Burin—St. George's, NL

Mr. Chair, I appreciate the comments from my colleague, but let me reassure him that as a Liberal Party and as the official opposition, everything we do in terms of trying to improve things for Canadians we do in consultation. We would not for a minute think that we could just barrel through and not have consultations with the provinces and territories.

In fact, to suggest that maybe they would not be receptive to any kind of improvements does not speak very well in terms of what this member thinks of the provinces and territories and their leadership on this particular file.

Clearly, we will be doing everything we can and we have had ongoing discussions in terms of consultations on this particular issue. Those consultations will continue to exist.

To suggest that there are other ways that people can compensate for not having a pension, we all know that having access to a pension that is secure is the security that Canadians look forward to having so that they can live in comfort in their retirement and not be at the beck and call or the whim of what is happening in the marketplace.