Bill C-480 (Historical)

An Act to amend the Old Age Security Act (funeral arrangements)

This enactment amends the Old Age Security Act to exclude from the calculation of income, for the purposes of the monthly guaranteed income supplement, the lesser of the amount of benefits received from a registered retirement savings plan or a registered retirement income fund and the amount — not exceeding $2,500 — paid to or under an eligible funeral arrangement.

Old Age Security Act

[François Pilon, NDP, Laval—Les Îles, QC]

moved that Bill C-480, An Act to amend the Old Age Security Act (funeral arrangements), be read the second time and referred to a committee.

Mr. Speaker, I am pleased to rise in the House today to introduce my bill, Bill C-480, An Act to amend the Old Age Security Act (funeral arrangements). I wish to thank my hon. colleague from Louis-Hébert for seconding it.

Before I explain the details of this bill, I would first like to give a brief summary and explain where the idea for the bill came from.

In 2011, a woman named Fotini Theodossiades came into my office and told me that her guaranteed income supplement payments had decreased, but no one ever told her why.

After some of my staff did a little digging, we learned that her payments had been cut back because she had withdrawn some money from her RRSPs to pay for funeral arrangements in advance, so that everything would be taken care of when she passed away. What happened to her was totally unacceptable, although it was completely legal.

Canadians who receive the guaranteed income supplement qualify for this program because they are unable to make ends meet with just their pension. Cutting the GIS payments of one of my constituents just because she had the misfortune of having to take money out of her RRSPs to pay for funeral arrangements in advance is really unacceptable.

During the 2011 election campaign, our late leader, Jack Layton, made tackling poverty among Canadian seniors one of the main focuses of his platform.

This bill will therefore ensure that recipients of the guaranteed income supplement who have RRSPs will be able to withdraw an amount of up to $2,500 in order to pay for funeral arrangements in advance. This amount would continue to be taxable. However, it would not be included in the calculation of the GIS for the following year. This will ensure that the GIS of these recipients will not decrease the year after they pay for their advance funeral arrangements, as is the case now.

That is what gave me the idea for the bill before us today. This also shows how serious the NDP is about solving the problems that our constituents deal with every day. We are doing our best to resolve them.

Some may say that $2,500 is not a lot of money, and that is true. However, I used the minimum amount so that my bill would not be rejected on the pretext that it was too expensive. I say “minimum amount” because, right now, according to Statistics Canada, the average cost of cremation is about $1,800. If we do the math, $2,500 minus taxes leaves enough for the minimum.

I would now like to talk about some of the details of my bill. As I mentioned earlier, this bill would allow seniors who receive the guaranteed income supplement to withdraw a taxable amount of up to $2,500 from their RRSPs in order to pay for funeral arrangements in advance. However, this amount of $2,500 would not be included in the calculation of the GIS for the following year, and so recipients would not receive lower GIS payments.

In practical terms, Bill C-480 does a lot for seniors and their families. First, this bill gives seniors greater peace of mind and financial security by providing an additional incentive to help them pay for their funeral arrangements in advance.

In addition to helping families absorb the cost, with the help of the $2,500 GIS exemption, it also gives them peace of mind and removes the burden of making funeral arrangements while grieving a loved one.

Bill C-480 would also allow seniors receiving the GIS, who are the most financially vulnerable in our society, to be in a decent financial situation and to make ends meet each month. It is unbelievable that seniors such as Ms. Theodossiades could find themselves in a precarious financial situation simply because they want to save their children from the financial burden of funeral arrangements.

The NDP is committed to fighting poverty among seniors. It was a cause championed by Jack Layton.

Bill C-480 aims to do just that, and it will help make our seniors more financially stable.

Richard Allaire, a community organizer in Laval who supports my bill, shared this thought with me. It is very relevant and, sadly, very true. He said that we always think about seniors in terms of their past and that this bill is the first one that has focused on building them a better future. That is exactly what I am trying to do with this bill, and that is what my NDP colleagues want as well.

For the past few days, I have been hearing government members ask how much this would cost the government, which indicates that they have some interest in Bill C-480, but they are concerned about how much it might cost. I personally feel that no price is too high when it comes to our seniors. However, I have some good news for my colleagues.

The Library of Parliament has determined that the cost to the government of this measure that will help scores of Canadians will be a mere $132,400 a year. In order to reduce the poverty of our seniors, the government would have to spend less than an MP's salary.

On this side of the House, we believe that tackling seniors' poverty with an amount that is less than an average MP's salary is a no-brainer.

During the election campaign, the NDP had a great slogan: “Working together”. This bill provides a perfect opportunity for all of us, no matter what our political affiliation, to prove to the Canadians who elected us that we can work together and address the pressing social problem of reducing seniors' poverty.

To those who might point out that the Canada pension plan and the Quebec pension plan already have a benefit that covers funeral costs, I would say this. In the case of the CPP, the benefit is only available to those who worked full-time for much of their lives. They have to meet certain criteria to be eligible. Seniors receiving the guaranteed income supplement do so because they cannot make ends meet with their pension. The people who would benefit from Bill C-480 have little or no access to CPP benefits.

Furthermore, the amount paid by the CPP can only be used to pay for funerals and not to prearrange funerals. In that regard, Janet Gray, a certified financial planner and elder planning counsellor, said that everyone wants to help financially vulnerable seniors and that Bill C-480 is a good way to do it.

She adds that today's seniors, especially older ones, are less likely to have worked full time for most of their career. According to her, they may not qualify for CPP. She also says that the measure in Bill C-480 does not compete with existing measures. On the contrary, it is meant to complement CPP and the Quebec pension plan.

The bill we have before us today seeks to send a strong message to our seniors and the Canadian public at large. Bill C-480 gives us an opportunity to deal in part with the serious problem of seniors' poverty.

We have an opportunity to show the most financially vulnerable people in our country that Parliament is ready to help them. We have an opportunity to show all Canadians that we are prepared to work together to solve the problems facing them. We have an opportunity, in some small way, to put an end to people's cynical attitude toward politics and politicians, by showing that we can sometimes set aside partisanship and live up to the expectations of Canada and Canadians.

Today we have an opportunity to take a step, a first step to make this country fairer for all.

[Kellie Leitch, Conservative, Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour]

Mr. Speaker, I wonder if the member opposite could explain to me and to other members in the House exactly what the cost of the bill would ultimately be to Canadians.

My understanding is that it is approximately $100 million as of 2014 if all GIS beneficiaries use this exemption. It is a significantly high cost to Canadian taxpayers.

I would just like to know what the member's cost estimates were with respect to the bill.

[François Pilon, NDP, Laval—Les Îles, QC]

Mr. Speaker, I do not know where my colleague got her numbers from, but mine came directly from the Library of Parliament and are based on Statistics Canada data.

Approximately 11% of retired Canadians make funeral arrangements in advance, and 47% of them use their RRSPs to do so. According to figures published by Statistics Canada and to the Library's calculations, this would cost a total of $132,400 a year.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, what is important to note here is that the seniors we are talking about are low-income seniors. That is the point that really needs to be emphasized.

At the end of the day, there is a serious issue with regard to poverty in our country. Our seniors are on a fixed income. Affording the opportunity for a senior to be able to get into RSPs and to be able to do some planning for the future with regard to their ultimate passing is a responsible way of dealing with legislation. I commend the member for the effort. I will have the opportunity to speak a little bit more on it shortly.

My question is this: to what degree is the member prepared to accept amendments? Does he feel that there might be some amendments if the bill were to pass, or does he feel confident that the bill is adequate to go all the way through?

[François Pilon, NDP, Laval—Les Îles, QC]

Mr. Speaker, I thank my colleague for his question.

I set the amount at $2,500 because that is an amount I am comfortable with. I think that with $132,400 a year it will work. However, if some people want to propose amendments to increase the limit, I am have no problem with that. I am prepared to accept amendments. All I want is for our least fortunate seniors to be able to have a peaceful retirement.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, I wish to thank my colleague from Laval—Les Îles for this excellent bill. Seniors who are already at the poverty line have come to me in my riding with the same issue. The issue is that their income in a following year is affected by their decisions in the previous year. They do not know that this is going to happen until the following year, so they cannot plan for it.

This is a simple but effective change that would change the lives of many seniors, and I wish to commend the member for his foresight in this bill.

It is a very small cost to any treasury. It is less than the cost of one senator per year.

[François Pilon, NDP, Laval—Les Îles, QC]

Mr. Speaker, I thank my colleague for his comments.

This woman came to my office. Receiving even just a few dollars a month through the guaranteed income supplement makes all the difference. It makes all the difference between being able to buy a pint of milk or drinking nothing for a day or two. These people primarily do this for their children. They do not even do it for themselves; they do it to avoid problems for their children. I have lost my parents, but if they had had access to this and could have made funeral arrangements in advance, I think it would have made things easier on the whole family.

[Kellie Leitch, Conservative, Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour]

Mr. Speaker, I appreciate being invited to participate in this debate regarding Bill C-480.

If adopted, the bill would allow guaranteed income supplement recipients to withdraw up to $2,500 from a registered retirement savings plan or RRIF in order to pay for funeral arrangements in advance without having their GIS reduced.

Let me start by saying that I can understand the good intentions behind the member's idea for moving this legislation. However, I find the proposed legislation has some serious shortcomings.

All members on both sides of the House want to ensure that Canadian seniors obtain financial security. In fact, our government has done a great deal to help our seniors prosper in their retirement years.

As the members of the House are likely aware, the most important financial support we provide to seniors is through our public pensions. Canada’s public pensions are highly regarded internationally, and for good reason. They are credited with playing a very significant role in reducing low-income rates among seniors.

Let us just look at a telling indicator. The incidence of poverty among seniors in Canada has dropped from a rate of 21.4% in 1980 to 5.3% in 2010.

Now let us look more closely at the sources of retirement income, which generally have three components.

The first is old age security. This includes the allowance for the survivor and the guaranteed income supplement, the GIS, which provides additional money on top of the old age security pension to low-income seniors living in Canada.

The Canadian pension plan, or CPP, is a second component for those who have worked and made contributions.

The third pillar consists of personal savings, including employer pension plans, registered retirement savings plans and tax-free saving accounts, as well as other savings and investments.

Together, OAS and CPP are designated to provide a modest base upon which to build additional retirement income. This year, Canadians will receive over $76 billion in benefits through the Canada pension plan, old age security and the GIS.

As I said earlier, the guaranteed income supplement provides extra support to seniors with little or no income and has been a great success in reducing poverty among seniors.

In 2008, we increased the GIS earnings exceptions from $500 to $3,500. This enables low-income working seniors to keep more money in their hands. In 2011, we provided the largest GIS increase in 25 years to the most vulnerable seniors. This measure is helping to lift Canada's lowest-income seniors out of poverty.

More than 680,000 low-income seniors are benefiting from this increase. These seniors are now receiving additional GIS, up to $614 for single seniors and $859 for couples. This year we are providing more tax relief for seniors and pensioners, saving them $2.5 billion.

This measure and all of the others that I have outlined demonstrate that the Government of Canada is taking concrete steps to support seniors.

We are actively helping Canadians prepare for and achieve financial security in their later years. That is why seniors' poverty is at an all-time low in Canada.

As I mentioned earlier, there are some issues with the bill. Currently the calculation of income to determine GIS eligibility is determined in accordance with the Income Tax Act. The proposed exemption for income used for funeral arrangements would introduce a new concept of calculations of income for the calculation of the GIS. This likely would create calls for similar exemptions on other compassionate grounds. This would create a precedent for more costly measures that are not affordable under the current fiscal climate.

It would also raise equity issues for seniors, as this exemption would only benefit those seniors who use RRSPs or RRIFs to cover their funeral expenses and would do nothing for seniors who have no savings. It would only benefit the 10% of GIS recipients who have planned for retirement by saving and would not help the poorest of seniors, who are the ones who benefit the most from the GIS.

Let us be clear on this point. The bill would not be helping the most vulnerable of seniors, but rather those who actually have investments in banks.

The Office of the Chief Actuary estimates that the additional program cost associated with this proposed amendment could be as high as $81 million in the first year, if all GIS beneficiaries with RRSPs and RRIFs used this exemption. The bill would also generate additional administrative costs. It is estimated there would be an administrative cost of up to $12 million each year. This is a total cost of almost $100 million in an era of fiscal restraint.

The guaranteed income supplement is paid 100% by taxpayers dollars. I would just ask where the NDP members are in proposing this $100 million tax increase. I think we know the answer to that: from the pockets of hard-working Canadians. I find it astounding that again and again proposals are brought forward by the NDP, but all they do is increase the taxes on hard-working Canadians.

Lastly, the bill would duplicate allowances for funeral expenses in other jurisdictions. The CPP and Quebec pension plan, for example, provide one-time death benefits of up to $2,500, or on behalf of the estate of a deceased contributor. In addition, some provinces, territories and municipalities also offer subsidies for funeral arrangements for low-income individuals. British Columbia, for examples, offers assistance of up to $3,000 for low-income residents who have little or no assets.

Similar benefits are available in Alberta, Nova Scotia, P.E.I., and for first nations living on reserve. As well, some municipalities, like Toronto, offer similar assistance to cover funeral expenses. In light of these programs, this proposed bill would be doubling the efforts made at all those levels.

Given the considerable cost, the fact that it would fail to provide equity benefits for seniors, and that the assistance would not be targeted to the seniors who are in need of it most, our government will not be supporting Bill C-480. While I understand the good intentions of the member opposite, I would encourage all members of this House to join me in voting against the bill.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is a pleasure to rise and address this piece of legislation. We need to deal with issues surrounding poverty and assist those individuals who are on fixed income. These are important issues.

I listened to the parliamentary secretary's response to the bill and I am somewhat disappointed. There is no doubt that she is doing a bit of cherry-picking when she says that the bill would only cater to those individuals who have registered plans or RRIF plans. A significant number of seniors live in poverty who do not have access to these types of plans.

I would suggest to the member that this legislation is much like the pooled registered pension plan legislation. That legislation was brought in by the government and we supported it in principle because we saw it as a tool for many seniors. It will not resolve all pension-related issues, but it is an important tool for seniors able to put money aside in some form of pooled pension plan.

The Liberal Party brought suggestions to the floor of the House with respect to what the government could have done to improve the plan. Unfortunately, the Conservatives did not accept the amendments but still in principle we supported what the government was doing.

Now we have a private member's bill before the House. It would do two different things. It would be yet another tool that could be used by a good number of seniors in Canada who have had the good fortune to build up a nest egg through RRSPs, for example, but are still dependent on an income supplement. If they qualified for the income supplement that means they need additional resources.There is a good chance that they are living below the poverty line.

When I look at the bill being proposed by the member, I see a bill that would address an important issue facing many seniors. It is a tool that could be used to alleviate many of their concerns. To be able to use an RRSP to prepay for funeral arrangements would be a good thing.

The Liberal Party has been very supportive of initiatives that derive benefits for our seniors and in particular get them out of poverty.

During an election campaign we all have the opportunity to knock on doors. I have heard a lot of disheartening stories from seniors on fixed incomes. They may receive the OAS and the income supplement but that is just not enough. I have had seniors tell me, and I suspect others in the chamber have had seniors tell them the same thing, that they have to figure out the best way to spend a limited amount of money. They have to decide between taking a grandchild out for a snack, getting required medicine, or cutting back on their already small and limited food budget.

We have far too many seniors across our land who have been put in this position where they have to make these types of decisions. I think it is very important for us to reflect on what we provide our seniors and how we might assist them in making decisions.

For a good number of seniors, the issue of their passing is something that is there. In many cases they want to make pre-arrangements. What we have is a progressive idea on which seniors will be able to capitalize.

I question the numbers the parliamentary secretary has brought to floor. I do not believe them, quite frankly. She is presenting an extreme to the House. Whatever that dollar value is, I still want to highlight, as I did in the question, that we are not talking about the wealthiest of our society. We are talking about seniors who in many ways are in a poverty type situation by national average standards.

It behooves us, and it is our responsibility, at the very least, to see the bill go to committee. We support the bill. We want to see it go to committee. We look to the Conservative backbenchers in particular to recognize the value of what has been suggested and allow it to go to committee.

Quite often we are afforded the opportunity on private members' bills to vote without party discipline. It does not take many to recognize the value of a bill and at the very least allow it to go committee where we can hear from some of the different stakeholders. Maybe we could even get to the bottom of what some these potential costs might actually be, which could address some of the concerns as to why many of the Conservatives or others might not necessarily want to support the bill. There is a great deal of merit to it.

I want to emphasize that we not overlook the importance of our seniors and pensions. I had a general mailer that went out to my constituents, something I do, like others, on a regular basis. One of the things I thought said so much was around the issue of pensions. As members will recall, over a year ago when while in Europe the Prime Minister made the decision that he wanted to cut back on OAS. When I say cut back, I mean he wanted to increase the age of retirement from 65 to 67.

Like many members of Parliament, we went to our constituents and asked what they had to say. I have one small piece of paper in the form of petition. The person who sent it back to me signed it. It literally attached numerous pieces of paper. I do not want to use it as a demonstration, but I want to emphasize there are some issues that really touch the population such as why not or why we are doing this.

In this case, I would suggest for the government and all members of the House, why not? This bill shows some compassion to our seniors. It is an area I believe could receive support from all political parties. At the very least, members should acknowledge it as a bill that should go to the committee stage to allow more facts to come out.

I am relatively comfortable believing that if this bill passes, it will meet the needs and ultimately through committee, we will find that it has the support to go all the way through. We have very little to lose in allowing that to happen.

I would encourage members to reflect on the message, on the principle of the bill and what it attempts to do and on past initiatives.

We have seen ideas flow from members of all political parties on ways we can improve the living standards of those individuals who are in the low income bracket in many different forms, but especially in regard to the old age supplement and the guaranteed income supplement. Therefore, I really encourage members to reflect on the value of contributing where we can to changes that could really make a difference.

We talked at great length about expanding employment insurance program benefits to others, whether someone was caring for an elderly family member or a during a family tragedy. There are all sorts of changes we have seen to social financial support programs over the last two decades. I see this as yet another of a number that could have a very positive impact.

I appreciate the member for bringing forward the bill. We will have to hope that maybe we can get members from all sides of the House supporting it. My understanding is that members of the Liberal caucus will be supporting it.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, I am very pleased to rise in support of this bill put forward by the member for Laval—Les Îles, who has obviously put together something that will be very helpful to a lot of the poorest of Canadians.

That is part of what the NDP has pledged to do in all of its years of existence: to ensure that the poorest of Canadians are looked after, that we are not placing wrongful burdens on people in our society, and that we are dealing with the poorest citizens and, in particular, the poorest seniors in a way that is humane, thoughtful and reasonable. That is what this bill is.

Being poor in Canada ought not to be a crime, but sometimes poor people are penalized for things most Canadians take for granted. It could be something as simple as prepaying funeral expenses as part of looking after themselves and their families in the future.

We sometimes forget the daily constraints faced by poor people, the three million or so Canadians who live below Canada's poverty line. That is one of the worst records in the G7. Finding enough money after paying the rent is a daily challenge. Too often they do not have enough money to feed their children or to look after their health or their future. It is a sad reality that in a country as rich as ours, hundreds of thousands of people need help putting food on the table and have to rely on food banks. This is a shame and a travesty.

It is said that the inevitable things in life are death and taxes. I will not talk about the tax increases in the last federal budget, which will hurt poor people more than most, but there is a cost to dealing with the practicalities of death, which are funeral expenses. The most prudent way to deal with these expenses is through a prepaid funeral plan. Death comes to poor people as it does to anyone else, but why should the poor be penalized for enlisting in a prepaid funeral expense plan? That is exactly what the government does to elderly people who, because of their poverty, qualify for the guaranteed income supplement as part of old age security.

Let us understand this. For a single senior to qualify for GIS, income must be below $16,500 a year, and for a couple, it must be below $21,888 a year. Let us face it: at those income levels, people are poor. Why, then, does the government penalize those same seniors when they withdraw a bit of money from their RRSPs to pay for the inevitable, their funerals, by cutting their GIS benefit? That is what the current law does, and that is simply penalizing the poor. The irony is astounding.

This bill would allow those same seniors to prepay their funeral expenses with money from an RRSP. This makes sense. It does absolutely nothing to change the living conditions of seniors. This is, in fact, a prudent course of action, a humane, rational, reasonable and emotional course of action to protect their families in the future from having to deal with part of the tragedy of their deaths. Some of the expenses and emotional turmoil will have been taken care of by the seniors themselves. Who better could decide how to do that?

Having an RRSP is not a crime in this country. Some seniors have RRSPs. The government encourages savings through RRSPs, and 47% of seniors on OAS have an RRSP. Surely being poor and dying, as we all do, is not a crime. Using a modest sum of $2,500, a very small amount of money in the grand scheme of things, to pay for funeral expenses should never be considered income in the hands of a senior, but that is what the government is suggesting it is and that is, in fact, the case now. If seniors withdraw $2,500 to prepay funeral expenses, that withdrawal becomes income in that year.

Did they themselves receive a benefit from that $2,500? Did they go out and buy a new TV or an old clunker of a car? Did they do anything to improve their lot in life? No. They are protecting their loved ones from the problems that will face them with when those individuals pass away, and that is not something that should be counted as income. That is what this bill proposes in the calculation of the future GIS.

Luckily, I am not the only one who sees the irony. A single senior with an annual income of $16,000 a year could not afford this any other way. Nobody is going to be able to afford to prepay funeral expenses without dipping into their RRSPs.

The bill stands on its own merits. It is a clear example of a commitment we in the NDP have made to reduce poverty among seniors. I need not remind the government that the NDP, in fact, voted against the budget in 2011 because it did not actually take all seniors out of poverty. Jack Layton and the NDP had suggested to the government, in 2010, in 2009, in 2008, that we needed to deal with that. The government only did a half-measure, which was to raise the level of the GIS, but it was nowhere near enough to get all seniors out of poverty. Then the next year, it took all the money back by telling seniors they could not retire until they are 67 anyway, and actually take more than that money back. We have a government that gives with one hand and takes back with the other.

The irony of this situation is that these seniors are the poorest of the poor in the seniors' world, yet the government will, as the parliamentary secretary has already said, vote against the bill on the basis of some fabricated cost. Some of the government members will anyway. It is a private member's bill and the vote is up to each individual member.

In fact, only those seniors who have an RRSP and only those seniors who decide to do this will benefit, but they will not actually benefit. What will happen is the government will continue to pay them what it has paid them already. Therefore, we are not talking about a cost. We are talking about a reduction in tax savings that the government is taking from these seniors. It is taking money out of the pockets of seniors who do this in the year following their use of this money to prepay their funeral expenses. That is what the government is currently doing. It is taking money out of the pockets of seniors.

We are suggesting that these are the poorest of seniors to begin with. We should not be taking money out of their pockets in subsequent years. The minister has suggested this is an outrageous and exorbitant amount of money. Our calculations are about 1,000 times less than the minister's own calculations. I feel our calculations are much more accurate and more closely reflect what it would mean when it stopped taking money out of the pockets of seniors.

We are not suggesting this money should not be taxable. If a seniors withdraw money from their RRSPs, none of those rules would change. There is no huge administrative expense to this. There is no enormous burden. This is a simple and effective way to allow seniors to plan their death. This is something all seniors should be able to do with dignity, just as the rest of Canadians do.

We firmly believe this is part of an overall policy of ensuring that the people who built this great country, our seniors, are in fact looked after in the best and most humane way. We have been unsuccessful in convincing the government to lift them all out of poverty and we have been unsuccessful so far, however, in 2015 we will change that, in convincing the government to back off on making them wait until they are 67 before they get any of this money. That two-year wait will cause untold harm on a number of seniors in our country.

However, we can, and should, take this simple and straightforward approach and this simple and straightforward forward measure of ensuring that seniors who want to plan their death have the ability to do so without it costing them out of pocket the following year as the government takes the money back.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, I am pleased to speak today to Bill C-480.

The bill would amend the Old Age Security Act to exclude from the calculation of income for the purpose of guaranteed income supplement, GIS, the lesser of the amount of benefits received from a registered retirement savings plan, RRSP, or a registered retirement income fund, RRIF, and the amount not exceeding $2,500 paid to or under an eligible funeral arrangement.

To simplify this, it means that seniors receiving GIS would be able to withdraw up to $2,500 from their RRSP or RRIF to pre-arrange their funeral without having that money be part of the calculation as to whether or not they qualify for GIS.

The hon. member for Laval—Les Îles maintains that this would be a step toward reducing poverty among our seniors. On the surface, this seems like a very compassionate action to take. However, I cannot support the bill.

Let me explain a few things about federal income programs for Canadians over 65. The old age security pension is a monthly payment available to most seniors age 65 and older who meet the legal status and resident requirements. If individuals meet these requirements, they can receive the OAS pension, even if they are still working or have never worked.

The OAS is financed from taxes collected by the Government of Canada, which means that increases and benefits immediately affect the balance of the budget.

The Canadian pension plan, on the other hand, is a contributory program that people pay into when they work. The CPP provides a range of benefits to contributors and their families, including retirement, post-retirement, disability, survivor and death benefits. This is a savings program where Canadians save a portion of their income, which is then used to pay their benefits in their later years.

The OAS program and the CPP combined with Canadians' personal retirement savings, investments and private pension plans provide Canadians with one of the best retirement income systems in the world.

In addition to the OAS pension benefit, the OAS program has three types of benefits that provide additional support to seniors who have low incomes: the guaranteed income supplement, the allowance, and the allowance for the survivor. To use the technical term, these three benefits are income tested. That term is important. The amount of GIS individuals are entitled to receive is based on their income. If their income in retirement is below a certain threshold, they can receive the GIS. If their income rises above that threshold, they cannot.

The Old Age Security Act defines income in the same way the Income Tax Act does. In the Income Tax Act, withdrawals from RRSPs and RRIFs are considered income, and therefore, they are also considered income for the purposes of the GIS.

Let me provide a hypothetical case. Martin is retired and receiving the OAS. Even with the OAS, his monthly income is only $1,000. Because his income is so low, he is eligible for additional support immediately through a monthly GIS benefit. Martin has $30,000 in an RRSP, but as long as it stays in the plan, it is irrelevant to his receiving the GIS.

However, let us say that he makes the decision to withdraw $10,000 from the RRSP. His income for the year has now gone over the GIS threshold, and his benefit would be cut back.

The Old Age Security Act currently does not allow expense-related exemptions, other than the ones already provided under the Income Tax Act. Rather, the existing exemptions under the Old Age Security Act generally relate to earnings and receipt of provincial or territorial social assistance.

The amendment proposed by my hon. colleague would create an exemption for money withdrawn for funeral expenses. Of course, these expenses would have to be documented and forms submitted to the GIS authority for review. This would increase the paperwork that the government would have to do and raise the cost of administering the program by $81 million, as estimated by the Chief Actuary. It is also estimated that the administrative cost of the program could be up to $12 million in addition, almost $100 million in cost.

Additionally, the proposed legislation would also raise issues of fairness, as it would only benefit the seniors who have RRSPs and RRIFs, and it would do nothing for seniors who have no savings or use different savings vehicles.

The legislation would not be helping the poorest of seniors. It would be helping those who still have savings in various registered investments.

I would also point out that the Canada pension plan already provides a one-time death benefit of up to $2,500 to the estate of a deceased contributor. That money can be used for funeral expenses. For people who receive the CPP, the proposed amendment would duplicate public assistance for the same expense.

The hon. member for Laval wants to reduce poverty among seniors, and so do we. Our government is committed to financial security for older Canadians, and we have done a lot to help since we formed the government. Together, the CPP, the OAS and the GIS have contributed to reducing the rate of poverty among Canadian seniors to one of the lowest levels in the world. In fact, poverty among seniors is lower than that of the general population.

In 2011, we provided the largest GIS increase in 25 years to the most vulnerable of seniors. This measure is helping to lift Canada's lowest-income seniors out of poverty. More than 680,000 low-income seniors are benefiting from that increase. These seniors are now receiving an additional GIS, up to $614 a month for individuals and up to $859 for couples.

This year, we are providing more tax relief for seniors on pensions, saving them more than $2.5 billion. This is in addition to creating pension splitting for seniors, allowing couples to significantly reduce their tax burden in many cases. Since we have formed government, we have also taken 380,000 seniors off the tax rolls completely.

I can appreciate the good intentions of the member in moving this legislation. However, we cannot support the cost and the equity of this legislation. We are living in a time of fiscal restraint. Our government has acted to help the poorest of seniors, those who need the most help. Poverty among seniors is now at an all-time low, thanks to the investments this government has made.

For these reasons, I encourage all members of the House to vote against this legislation.

[The Acting Speaker, Conservative, Barry Devolin]

The hon. member for Montcalm has nine minutes.

[Manon Perreault, NDP, Montcalm, QC]

Mr. Speaker, I am pleased to speak today to the bill introduced by my colleague from Laval—Les Îles, Bill C-480, which would help reduce poverty among seniors.

My NDP colleague has a huge heart, but he is also a man of action. This bill before us proves it, because he is trying to fix a problem that primarily affects our seniors. I commend him for trying to bring in a measure to reduce poverty among seniors.

This bill would amend the Old Age Security Act with respect to funeral arrangements. Old age security recipients who have an RRSP could withdraw the taxable amount of $2,500 from their RRSP to make funeral arrangements in advance. This amount would be excluded from their income for their guaranteed income supplement calculation the following year. As a result, their guaranteed income supplement benefits would not be cut or decreased the following year.

All members know that many Canadian families are struggling to make ends meet, and having to cope with funeral costs only makes their existing financial burden worse. This is a tangible measure to combat poverty among seniors and improve their financial security.

We know that low-income seniors typically spend 60% of their monthly budget on housing and food. Their already tight budgets are further consumed by health care necessities, such as medication. They often have to go without essential care because they cannot afford it, and then on top of that, they have to cope with the cost of funeral arrangements, which is a considerable expense for these families.

This bill is in line with our social democratic values and our dedication to social justice. We believe that all seniors should have the right to a comfortable retirement. We want to reduce poverty among seniors, and this bill is part of the philosophy that inspires us as New Democrats. We should enable our seniors to grow old with dignity, and we should guarantee them financial and moral peace of mind. That is the goal of this bill. Seniors should not have to put themselves in a difficult financial position to pay for funeral arrangements in advance.

This bill would take care of that because the guaranteed income supplement would not be affected during the following fiscal year. It is unacceptable that families should have to bear such a huge financial and moral burden alone. Why give them another problem to deal with when they are already grieving the loss of a loved one? This measure will help our neediest seniors, those who receive the guaranteed income supplement.

We are working hard to fight poverty among seniors, but the Conservatives are doing just the opposite with their reforms. We know that two-thirds of the population does not have a private retirement fund and has to depend on public money after the age of 65. Need I remind the House that state support for seniors is minimal indeed?

Unfortunately, the Conservative government is not coming up with any concrete solutions to address poverty among seniors. On the contrary, it is proposing delaying access to old age security for two years. Raising the legal retirement age from 65 to 67 will only increase poverty for many people. It will only add to the number of seniors already living below the poverty line in Canada. According to a recent study by the Center for Interuniversity Research and Analysis of Organizations, or CIRANO, this increase will raise the proportion of people aged 65 and 66 living under the low income cutoff from 6% to 17%.

This bill proposes the exact opposite. It would help those who are the least fortunate in our society, and more specifically, it would help reduce poverty among our seniors. By supporting this bill, we can eliminate a huge financial burden for our seniors and their families. Fighting poverty among seniors was one of our campaign promises, and clearly, we are keeping our word.

We want to come up with real solutions to the problems facing Canadians, instead of making irresponsible cuts to old age security. The government should not be going after Canadian workers like this.

We in the NDP are committed to lifting seniors out of poverty and guaranteeing a comfortable retirement for all Canadians. We want to reduce social inequality and help those less fortunate so they can live in better conditions.

My colleague's bill has the support of many stakeholders. According to Janet Gray, certified financial planner and elder planning counsellor, everyone wants to help needy seniors. This bill is a good way to do that.

The Canada pension plan provides $2,500 to cover funeral expenses. However, Ms. Gray believes that today's seniors, especially older seniors, are less likely to have worked full time for most of their career and therefore may not be eligible for CPP. She also noted that the CPP benefit cannot be used to pay for funeral arrangements in advance. It can only be used to pay for funeral arrangements made after the death of the beneficiary.

It is true that the Canada pension plan and the Quebec pension plan have similar benefits. However, the purpose of this bill is to establish a complementary measure not a competing one. It will help those most in need, our seniors who receive the guaranteed income supplement.

This bill shows that we are listening to our constituents and that, as MPs, resolving their problems should be our priority.

However, that is not all. This bill will also boost sales for co-operatives and stimulate the local economy. It will serve as an added incentive for people who are thinking about making funeral arrangements in advance. In the end, the sales of funeral co-operatives will increase, which will in turn stimulate the local economy.

That is the essence of this bill. It seeks to implement a practical measure to reduce poverty among seniors while allowing them to continue to have a respectable financial situation after paying for funeral arrangements in advance. Their guaranteed income supplement will not be affected in the following fiscal year. They will therefore have peace of mind and financial security, knowing that they will not be leaving their family with the burden of paying for their funeral.

It is high time we provided financial help to the most vulnerable members of our society. This bill does just that.

Given that the income gap between the rich and the poor has only grown over the years, it is time to take action. The income gap is the biggest it has been in 30 years. Given that financial status is one of the primary determinants of health, poverty should not be taken lightly.

Socio-economic inequalities are getting worse every day. This has a significant impact on people's health and on a growing number of older people, many of whom have barely enough money to house and feed themselves adequately, let alone pay for other essential resources.

Poverty is costly, and we have to do something about it. That goes double for vulnerable people. Seniors, who are at greater risk of living in poverty, are among those most vulnerable.

According to a study by the Institut de recherche et d'informations socio-économique, the number of low-income seniors climbed dramatically from 4.6% in 1996 to 12.3% in 2008.

We must take steps to improve our seniors' financial health. That is why I am asking all members to support this bill at second reading.

I would like to add that this is not about money. Those who support this bill will demonstrate good will, empathy and humanity. I urge them to listen to their hearts and realize that, because they cannot be against what is right, they cannot be against this bill.

[The Acting Speaker, Conservative, Barry Devolin]

The time provided for consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

It being 2:30 p.m., the House stands adjourned until next Monday at 11 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 2:30 p.m.)

The House resumed from April 26 consideration of the motion that Bill C-480, An Act to amend the Old Age Security Act (funeral arrangements), be read the second time and referred to a committee.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, if adopted, this bill will allow guaranteed income supplement recipients to withdraw up to $2,500 from a registered retirement savings plan to pay for funeral arrangements in advance without having their GIS reduced.

Let me start by saying that, while it is clear that the proposed legislation has some serious shortcomings, I can understand the good intentions of the member for moving the legislation. All members on both sides of the House want to ensure Canadian seniors obtain financial security. However, there are several reasons why we cannot support the bill.

First, it would leave the majority of seniors who do not have RRIFs or RRSPs out in the cold. Second, it would generate additional costs to Canadian taxpayers. Third, and more important, there are better ways for low-income seniors to pre-arrange their funeral expenses. While the hon. member is commended for wanting to help these seniors, we cannot agree with the methods he proposes. Therefore, we cannot vote in favour of this bill.

The OAS program is one of the cornerstones of Canada's retirement income system. It provides seniors with a minimum income so they can maintain a decent standard of living and it helps reduce the incidence of poverty among the retired. The program provides over $38 billion annually in benefits to five million seniors. This includes, $8.6 billion in GIS benefits to 1.7 million low-income pensioners.

Based on 2009 data from the Office of the Chief Actuary, it is estimated that only 10% of all GIS recipients have RRSP or RRIF income in any given year. This means that a very limited number of seniors could benefit from this bill and it would not be fair to other low-income seniors, 90% of whom do not have RRIFs or RRSPs. These seniors would get no assistance whatsoever under this bill.

Strictly from a cost perspective, the Office of the Chief Actuary estimates that the bill would increase the program costs by up to $81 million in the first year. In other words, it would cost up to $81 million for a measure that would benefit only one out of every ten low-income seniors who decided to pre-pay their funeral in this fashion.

There are other ways of paying for funerals and they do not cost as much. For example, the Canada pension plan and the Quebec pension plan already provide a one-time death benefit of up to $2,500 to, or on behalf of, the estate of the deceased contributor. In 2011-12, 54% of all GIS beneficiaries who passed away had a CPP death benefit paid to their estate and the average benefit received was $2,150.

Also, some provinces and territories already offer grants and subsidies to low-income seniors to help them make funeral arrangements. For example, the province of British Columbia offers assistance of up to $3,000 to those who have little or no assets. Similar benefits are also available in Alberta, Nova Scotia and Prince Edward Island and for first nations peoples living on reserve. As well, some municipalities, including Toronto, offer similar assistance to cover funeral expenses. This bill would duplicate public assistance with respect to the same funeral expenses.

Here is the bottom line. If people are concerned about funeral expenses, they are much better off leaving their money in their RRIF or RRSP. This way, the money can accumulate on a tax-deferred basis and they can arrange to have their estate pay the funeral expenses out of any remaining RRSP or RRIF savings upon their death. As an alternative, since withdrawals from tax-free savings accounts are not included as income for the purpose of determining GIS entitlements, GIS recipients may pre-pay their funeral and other expenses out of TFSA savings, with no impact whatsoever on their GIS benefits.

Let me explain. The Old Age Security Act uses income as defined under the Income Tax Act to calculate GIS benefit entitlements. This includes any money that a pensioner receives, other than basic OAS pension, from the Canada pension plan, Quebec pension plan, employer-sponsored pensions, employment insurance benefits, RRSP withdrawals, interest, dividends, capital gains, employment income, annuity payments and RRIF withdrawals. Therefore, withdrawals from RRSPs and RRIFs are considered as income for the purposes of GIS. As long as savings held in RRSPs and RRIFs are not withdrawn, the beneficiary pays no taxes. However, as soon as the monies are withdrawn, the funds are considered as income for the purposes of calculating the GIS.

There are exemptions under the Old Age Security Act, but they generally relate to earnings and receipt of provincial, territorial and social assistance.

The GIS earnings exemption, which allows an exemption of up to $3,500 of annual employment income, allows low-income seniors who choose to work to keep more of their GIS benefits. However, the Old Age Security Act does not provide expense-related exemptions. Bill C-480 would therefore introduce a new type of exemption in the Old Age Security Act by allowing for an expense-related exemption.

The proposal to exempt RRSP and RRIF withdrawals when used for funeral arrangements would open the door to calls for similar exemptions for GIS purposes on other compassionate grounds, such as accidents, illness and medical expenses and other reasons. As we mentioned earlier, the bill would raise equity issues, as it would only benefit those seniors who use RRSPs or RRIFs to cover their funeral expenses and do nothing for those seniors who have no savings or use different types of savings vehicles.

Not only that, but the bill could possible create pressure to exempt a portion of RRSP or RRIF withdrawals as income for the purpose of determining other income-tested benefits and credits such as the Canada child tax benefit and the goods and services tax credit. In addition, those without RRSP or RRIF income could argue that a basic exemption for all sources of income for all income-tested benefits and credits should be introduced. Such exemptions would increase program and tax expenditure costs associated with income-tested benefits and credits.

Since we formed government, we have taken 380,000 seniors off the tax rolls entirely. We have increased the GIS benefits by the largest single top-up in 25 years. The increase in benefits will help more than 700,000 low-income seniors.

I can appreciate the good intentions of the member in moving this legislation. I am sure we all can. However, the cost and inequity of the legislation is not something I can support. Our government has acted to help the poorest of our seniors. Poverty among seniors is at an all-time low, thanks to the investments our government has made. For these reasons, I would encourage all members of the House to vote against this legislation.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, I am pleased to be here to debate Bill C-480 and voice my concerns or support, depending at which point I will be discussing the bill. However, in the end, I will be supporting Bill C-480 so that it can be examined in detail and costed at committee.

When I say “costed”, I mean looking at both the economic value and benefit, and performing an analysis that is sometimes not done in this place based on the estimates we sometimes get from the Department of Finance, being just one number with no backup or calculations. Therefore, we will probably look to the Parliamentary Budget Officer for backup to this bill once again and have to rely on those calculations and analysis. I have not seen that yet, but I hope it is available. Perhaps the sponsor of the bill would be able to comment on that in his final comments.

As the Conservative government continues to implement its plans to slash seniors' income support benefits such as old age security, I am especially keen to discuss measures like this. We need to find ways to help low-income seniors rather than hurt them.

The only caveat I would offer is that we must make sure we are getting the greatest benefit for any public investment we may make. If Bill C-480 is passed at second reading and sent to the House of Commons committee on human resources, the committee to which I believe it would be sent, the economic cost of not passing the bill should also be looked at and thoroughly reviewed, because there is a cost in not adopting bills like this.

I understand that many of my colleagues on the other side of the House like the idea of finding ways to reduce what we provide to baby boomers and seniors, which is their position and approach, but it is one that I do not share. Liberals know that seniors deserve better.

I would argue that the true value of a society can be gauged by the manner in which it treats the most vulnerable of its people. This adage is perhaps most appropriate in the context of how we collectively show compassion and care for our elderly parents, grandparents, friends and neighbours who require simple accommodations to live in a dignified and financially independent manner. Having our elderly population live in poverty is simply not acceptable in a country as wealthy as Canada. No one should have to decide between food and rent and other basic necessities.

The Liberal Party is known for its leadership role in defending the rights of seniors, particularly those at the lower end of the income scale.

Bill C-480 constitutes another useful tool for seniors who struggle to make ends meet because of the Conservative government's mean-spirited cuts to income support measures.

The proof is that the Liberal administrations of the past have clearly understood and acted upon this belief. Whether we were referencing the Old Age Pensions Act, delivered by the former Liberal Mackenzie King government; the Old Age Security Act, delivered by the former Liberal Louis St. Laurent government; or the Canada pension plan and guaranteed income supplement, both delivered by the previous Liberal Lester B. Pearson government, the Liberal Party of Canada has a collective legacy of valuing the long-term pension security of Canadians, a belief that is upheld in both word and deed.

It is within this context that both the Liberal critic for seniors and pensions, the member for York West, and the Liberal finance critic, the member for Kings—Hants, support the underpinnings of Bill C-480. We will vote accordingly at second reading. As always, the Liberals seek to balance compassion and social justice with a strong sense of fiscal responsibility.

As we have already heard, Bill C-480 amends section 10 of the Old Age Security Act to permit pensioners to withdraw an amount not exceeding $2,500 from an RRSP or RIF for the purposes of paying for advanced funeral planning. That amount would not be considered income for the purpose of the guaranteed income supplement. This sounds like a case of allowing seniors to use their own savings for an important life expense without penalizing them.

I support this, but there are outstanding legislative as well as economic and monetary questions that need to be addressed. Therefore, once again there is the need to send this bill to committee for further study, and hopefully improvement. The considerations would be looked at during the committee process.

Some of the considerations the committee could look at were highlighted on March 25, when the Speaker expressed concern as to the spending provisions contained in Bill C-480. Specifically, the Speaker encouraged members who would like to make arguments regarding the need for a royal recommendation to accompany the bill to do so at the earliest opportunity.

Likewise, on April 18, the Parliamentary Budget Officer released a letter which stated, “it is possible that Bill C-480 may have a material impact on Canada's fiscal framework if passed in its current form”. This is again why we state that we are looking for some amendments. I am not suggesting this is definitely the case; I am saying that there are outstanding questions.

This is why at this point of the legislative process for Bill C-480, our support is only for second reading. We will see what the reactions are from stakeholders, see if the government is open to amendments, and see if committee members can improve this bill.

The sponsor of this bill has touched on an important issue that the Liberals have long supported. At the 2012 Liberal Biennial Convention, the Liberal membership expressly supported the idea of using the Income Tax Act and other legislative measures to help bolster the income security of low-income seniors. Assuming Bill C-480 is respectful of the basic concepts of fiscal responsibility, members should be anxious to explore it once again at committee and going forward.

The Liberal Party of Canada has a long and proud history of enacting, preserving and strengthening Canadian social structure such as pensions and retirement income options. The Liberal Party, its general membership, the Parliamentary caucus, and its various leaders, both past and present, have underscored an unreserved belief that protecting and helping seniors to live with independence and dignity are necessities that deserve attention and protection in the years ahead. Bill C-480 is potentially part of the process, though not the total solution, and we are pleased to lend our support.

I wish the Conservative government would act in a similar manner and look at supporting the bill by sending it to committee.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I am pleased to be speaking today to the bill introduced by the member for Laval—Les Îles.

Members are no doubt aware that the bill's sponsor represents the riding next to Rivière-des-Mille-Îles. We often participate in activities together, so I can attest to her community involvement and the fact that she is often featured in community media as well. I would like to thank her for her dedication and her contribution to righting the wrongs committed against guaranteed income supplement recipients.

Basically, the bill introduced by my colleague aims to amend the Old Age Security Act so that seniors who receive the guaranteed income supplement have the option of taking $2,500 out of their RRSP to pay for funeral arrangements without it affecting their GIS benefits.

When a loved one dies, the family must pay for the funeral. This represents a significant financial burden for low-income households. This bill is important for the dignity of our seniors. It gives them the peace of mind that comes from knowing that they will not be leaving their family with the burden of paying for their funeral.

My colleague's bill provides our seniors with an incentive to prearrange their funerals and protect themselves from the increase in the cost of living.

The Conservative government has indicated that it will not give a royal recommendation to the bill because of the cost. Quite frankly, that is ridiculous.

According to the Library of Parliament's estimates, this bill will cost the federal government only $132,000 a year. This is very little given that it would help more than 300,000 Canadian seniors. Come to think of it, $132,000 is about what Senator Mike Duffy makes, and this would be a much better use of that money.

I believe that it is better to spend public funds on a program that makes it possible to prepay for funeral arrangements without a penalty than on an archaic and undemocratic Senate that abuses public funds. However, those are not the Conservative government's priorities. The Conservative Party's gravy train is chugging along, but the Conservatives are asking seniors who live in poverty to tighten their belts.

Although poverty is a problem in many Canadian households, single people who are 65 and over are particularly susceptible to poverty. The universal pension program accounts for 77% of these seniors' income.

Among seniors, poverty strikes more women than men. This is due to the fact that, in the past, many women stayed in the home to take care of their families. Although many went back to work afterwards, their careers were much shorter and they therefore did not have enough time to accumulate sufficient assets to provide themselves with adequate incomes when they retired.

In Quebec, seniors are getting poorer and poorer and accumulating more and more debt. The percentage of seniors' households carrying debt has more than doubled in 17 years. A study by the Institut de recherche et d'informations socio-économiques published in 2011 found that, in Quebec, the number of seniors living below the low income cut-off tripled between 1996 and 2008. This segment of the population increased from 4.6% to 12.3%.

In the Laurentides region, the Agence de la santé estimates that 7% of seniors aged 65 and older are living below the low income cutoff. This represents about 4,000 people. The Conservative government is only adding to the problem.

According to the Center for Interuniversity Research and Analysis of Organizations, by raising the eligibility age for old age security and guaranteed income supplement benefits from 65 to 67, the Conservative government will drive up the number of people living under the low income cutoff from 6% to 17%.

By changing the eligibility age for old age security, the federal government will download responsibility for more seniors onto Quebec and the other provinces, which will be forced to spend more on social assistance.

In fact, once the change is made, the Canadian government could save $6.9 billion a year while the provinces will lose more than $450 million a year and will have to increase spending on social assistance by $164 million in 2030.

As economics professor and co-author of the study, Jean-Yves Duclos, said:

The main problem with the reform is that it disproportionately attacks the poorest people and will have less of an impact on those with means, who do not often receive old age security benefits or the guaranteed income supplement.

The fight against poverty, particularly among seniors, is is central to our political action. In February 2011, the hon. member for Pierrefonds—Dollard moved a motion in the House of Commons that called on the Prime Minister to lift seniors out of poverty in the next budget. The motion read as follows:

That this House reject calls by the Prime Minister to balance the Conservative deficit on the backs of Canada’s seniors by means such as raising the age of eligibility for Old Age Security and call on the government to make the reduction and eventual elimination of seniors’ poverty a cornerstone of the next budget.

Unfortunately, and this does not surprise me, the motion was rejected by the Conservative government. It is clear that guaranteeing a suitable retirement for our seniors is not the government's priority.

Unlike the Conservatives, who increased the age of eligibility for old age security from 65 to 67, the NDP is proposing real measures for improving financial security for seniors. We understand how exasperated and frustrated seniors are about the cost of living and the lack of support during the aging process. We are fighting relentlessly to protect pension plans so that people with disabilities, seniors and all Canadians can live with dignity and security in their retirement.

To that end, we have come up with a plan for fighting poverty and helping seniors. We are proposing that the federal government improve the Canada pension plan and the Quebec pension plan by gradually doubling the amount of benefits over seven years from 25% to 50% of pensionable earnings.

What is more, we are calling on the federal government to gradually improve the guaranteed income supplement. We are calling for investment in home care and services, through the public health care system. Measures for making prescription drugs safer and more affordable should also be adopted.

Finally, we call for investments in social housing and, of course, in public transit. In fact, my colleague's bill is part of a larger NDP program to help Canada's seniors.

Poverty is a big concern for me, especially poverty among seniors. I was particularly shocked to learn that because of the dithering of the Liberal and Conservative governments in contacting those entitled to the guaranteed income supplement, 160,000 seniors eligible for the supplement were not receiving any payments. The government had known about this problem since 2011, but it insisted on maintaining its red tape. It is estimated that, for the whole of Canada, this helped the government generate savings of $300 million on the backs of its poorest seniors.

In March 2012, I proposed amendments to the Old Age Security Act to provide for automatic enrolment for the GIS. My bill forced the federal government to take the necessary steps to reach recipients. A few weeks after I introduced my bill, the government finally picked it up and proposed a proactive mechanism to contact eligible seniors.

In conclusion, I urge all members of the House to support the exceptional bill introduced by my colleague from Laval—Les Îles to ensure that all seniors can age with dignity.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Speaker, I would like to thank the member for Laval—Les Îles for introducing this bill, which addresses a very significant problem for seniors.

While it is not illegal for guaranteed income supplement benefits to be reduced if recipients take a small amount of money out of their RRSP to prepay for a funeral, it is morally unacceptable.

The member for Laval—Les Îles tried to limit his bill to something quite reasonable and suggested a $2,500 maximum withdrawal. Once taxes are withheld—because money taken out of an RRSP is taxable—the remaining amount can pay for cremation. I am not talking about an entire funeral, just something very simple.

That is why I feel this bill is reasonable. The bill is designed to keep guaranteed income supplement recipients from seeing a drop in their benefits the following year. That is important, not from a taxation point of view, but from the recipients' point of view.

It is important to understand what these people want to do. They feel it is important not to burden the next generation with their personal problems. It is a question of dignity. They simply want to avoid problems for their children when they pass on. It is not complicated. That is all they want to do. Can we support them in this simple human wish? That is what I am asking.

We have to remember that these people do not have a lot of income. To be eligible for the guaranteed income supplement, a single person's taxable income cannot be more than $16,600. For a couple, the figure is a little less than $22,000. This is not asking too much. These people are living in poverty.

What is more, we cannot forget that the $2,500 they take out is taxable. On top of that, their guaranteed income supplement benefits would be cut. According to Human Resources and Skills Development Canada, which oversees the program, I believe, how much money would they lose out on each month?

Depending on the individual's or the couple's income, that would be between $50 and $100 per month. That means that a person who withdraws $2,500 will keep just 20% or 25% of that amount to pay for a pre-arranged funeral. To me, this smacks of double taxation, the kind of double taxation that even the wealthiest are not subject to.

I would like to talk about costs. The Library of Parliament estimates that this would cost $132,000 for a very simple reason. Not everyone is going to rush out to pre-pay their funeral the day this bill is passed. That is not how it works. It was determined that some people would do so over the next 10 years. That is why the costs are so low.

It is important to remember that only 11% of retirees at all income levels pre-arrange their funerals, and 47% of them use their RRSPs to pay for it. That is about one person in 20, which is relatively few people. I am not suggesting that this is a measure for everyone.

Had the government listened to our proposal to get all seniors out of poverty by enhancing old age security, my colleague would not have had to introduce his bill. The problem would have solved itself.

According to the government, the Office of the Chief Actuary determined that this measure would cost $81 million plus $12 million in administration costs. The government might have exaggerated a little and spoke about $100 million. That is a lot of money.

Considering what I just said about individuals who pre-arrange their funerals and about how much of their RRSPs they use to pay for it, and considering a third element, their income, I doubt it will cost that much. It looks like somebody wanted to do the math quickly.

I would like to know how they came up with $81 million. Even more surprising is the $12 million it will cost to say that the money is not taxable income.

Some were saying that people would be receiving money from the government twice, because, on the one hand, the guaranteed income supplement is not taxed, and on the other hand, there are various public pension plans that pay benefits for funeral costs. However, as I said earlier, personally, I think this smacks more of double taxation, rather than double payments to people.

At one point, someone else said that this would introduce a new method for calculating GIS income. Basically, that is false. Technically, all this would do is stipulate that when the RRSP is cashed out for this purpose, it would not count as taxable income. It is as simple as that. Not everyone seems to understand the tax mechanisms. The RRSP counts as a deferred tax. In some cases, the government could even withdraw some money, but we are not talking about those kinds of calculations.

I would like to point out that we are talking about a population that spends 60% of its income on housing and food. These people want to make an additional effort. In fact, all they want to do is sacrifice part of their future income to pre-pay for their own funeral.

I think it is only reasonable to support this bill at second reading. As I said, the parliamentary committee can look into the real costs associated with this measure, and we can then further debate its merits at third reading. I think this deserves further consideration. A parliamentary committee could look into this matter, call in some experts and thoroughly examine the issue—all in the name of dignity for our seniors.

I would like to close by thanking my hon. colleague from Laval—Les Îles for addressing one of the concerns of those less fortunate. I thank him very much.

By passing this bill here in the House, we have an opportunity to show the most financially vulnerable people in our country that Parliament is here to help them. I therefore invite everyone to support this bill at second reading.

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

Mr. Speaker, like the previous speaker, I want to sincerely thank the NDP member for Laval—Les Îles. I was the critic for seniors and pensions following the 2008 election. Jack Layton asked me to take on this file. I travelled over the next two and a half years to 57 town hall meetings across the country. I listened to seniors and heard stories about how difficult it was for them to get along in society. They had contributed to this society, but in many ways, they were excluded from the benefits of society.

Before I go further, a previous speaker for the Liberals, the member for Saint-Léonard—Saint-Michel, talked about what the Liberals had done for seniors. I want to add a little more. Yes, the Liberals brought in OAS and CPP, but OAS was proposed to them by J.S. Woodsworth of the CCF, following the fact that on the Prairies, in those days, many farmers and their families were actually starving.

Again, in the 60s, in a minority situation in Parliament, Stanley Knowles, who was like the dean of this place, par excellence, brought forward the concept of the Canada pension plan. In both instances, we worked together to bring these forward.

I just thought it would be worth putting that on the record for people to hear to remind them of the participation and leadership shown by the CCF and the NDP in the House when it comes to seniors.

The member for Laval—Les Îles, who brought the bill forward, is actually moving forward on things we had in our 2011 platform.

I want to speak to a statement made in the House by a Conservative speaker about how they increased the guaranteed income supplement. Yes, they did do that, and we will give them some credit for that. However, in our proposals in the 2011 election, we proposed an increase of $200 a month for seniors on OAS and GIS who had a combined income of approximately $1,400 a month, just to bring some 300,000 of those folks to the poverty line.

I have spoken many times in this place of the hardships people face when they are on such a meagre income. Yes, the Conservatives brought in their $50 a month, but it is nowhere near what is needed to address the situation.

It has been stated by others in this place that it would benefit members to take the bill to committee to examine the pros and cons. If there are improvements we can make to the bill, that is the appropriate place to do that. However, we should think for a moment about the intent of the legislation.

The people I have spoken to and have listened to are in their senior years. I know that when members of their families pass away, and they are suddenly hit with $8,000 or $10,000 in costs, and for a number of reasons they have not set aside any money earmarked specifically for that but have perhaps put aside a little in an RRSP, to be able to take out $2,500 and put it toward that cost would take the edge off the stress during that time of loss.

It really needs to be stressed that it is not intended to do anything to replace the benefit from CPP, which some people are able to get.

There is another issue it is important to talk about. Some people who are on GIS have gotten part-time jobs and have earned a little money. The following year, after they have honestly filed their taxes and have brought that to the attention of the tax folks, their GIS has suddenly decreased. The provisions in the bill would ensure that this is not the case. In fact, their GIS would not go down, and they would not be penalized.

There is a reality, though. The bill says that the $2,500, when put to use, would have to have taxes paid on it. That is only fair to other Canadians.

Going back to the financial burden on seniors, oftentimes, when they have lost a lifelong mate, it is a burden. This is just a small way we can help these seniors deal with those times of trial.

Again, I spoke about the fact that in the 2011 election, my office and staff put together our platform on pensions and for seniors. I am very pleased to see the member for Laval—Les Îles bringing forward a concrete measure to this House in line with our thinking of that time.

I cannot say the same for the Conservatives. They are increasing the eligibility for OAS from 65 to 67, and adding another two years of burden on workers who perhaps works in a mine some place or as a waitress who has been on her feet all the time. I have had people actually say to me, “I do not know whether I can do it.”

I recall in my days at Bell Canada, there was a gentleman who worked to about 68 years of age. We were frightened every day, because he would go out and climb poles. He strapped spurs on his legs, and his legs were so spindly the spurs hardly even fit him properly. It was his choice to work that long. However, the government is saying, “You have reached 65 but you must work two more years” in either a hazardous job or one that is strain, like for the waitress. People just do not know how they are going to do this.

Some things are crucially important to seniors. We know how seniors tend to worry a bit more about some things in life, such as whether the kids in the neighbourhood are putting up too much graffiti. These things look larger to seniors. If the noise level of the party next door is too much, things like that bother them. We can imagine the feelings of loss of a family member, and then the additional sorting out of the finances. If this, in some small way, helps then I think it is well worthwhile.

Again, we are simply talking about sending this bill to committee to study. I look forward to our people from the NDP on that committee working with the government side. Perhaps there are ways to improve the legislation to make it better for seniors. We will be pleased to do that.

Some of the speakers on the government side today sounded somewhat reluctant. They have proposed some reasons why they have concerns about it. That is fair.

However, let us send it to committee so that it is studied properly. Experts can be brought in and we can look at this in a comprehensive fashion. Then, whatever comes back to the House will be as good a bill as we can possibly make it. I think it is a responsibility of all of us at committee. Sometimes we do not live up to that responsibility for a variety of reasons.

I want to stress that from those 57 town hall meetings that I attended, we brought notes back to my office and shared them with our colleagues. We set our agenda for the last election.

It also carries forward beyond that, because the problems that were there have not yet been addressed. For us, this is a continuation of ensuring that senior Canadians understand that they are a priority to the NDP. They should be a priority for this entire House.

There are some programs, like CPP or the Quebec pension plan, that have similar credits to this. Again, I want to stress this is not intended to compete with them in any way. It is intended for a very simple, direct purpose. It is to assist seniors in a time of need, both financially and emotionally.

I have brought up, a number of times in my remarks today, the importance of doing what we can to add peace to the life of seniors who have had a loss.

[François Pilon, NDP, Laval—Les Îles, QC]

Mr. Speaker, in reviewing the Conservatives' approach to my bill, something struck me.

The Conservative approach does not take into account the fact that every retiree who receives the guaranteed income supplement can already deduct $3,500. What is more, the Conservative approach does not take into account the fact that not all retirees are fortunate enough to have an RRSP. Finally, this approach assumes that all eligible retirees would prearrange their funerals in the first year.

That is not what my bill is about at all, even though I would certainly like to be able to give our retirees $81 million. By the way, $81 million is only 1% of the total envelope.

Unfortunately, my approach just seeks to correct a glaring injustice done to some of the least fortunate retirees. Let me explain. If tomorrow morning, every Canadian withdrew money from an RRSP in order to prearrange their funeral, only 9,000 of them would take a hit to their income in 2014. You heard right: out of 37 million Canadians, only 9,000 of the least fortunate would be penalized, according to official data from the Library of Parliament.

To me that is unfair and unacceptable. This bill is about those 9,000 people, and that is where the $132,400 figure comes from.

Why take two different approaches in the same bill? For the simple reason that we did not have the time or the opportunity to sit down together and take a close look at the purpose of my bill. That is why all of the parties in the House should at least have a chance to take a thorough look at my bill in committee.

I am therefore asking all members of the House to give this bill a chance to go to committee for thorough study and debate. The committee is the only place where we can make amendments to align the two objectives in my bill and find a solution that makes everyone happy.

As I have been saying since the beginning, I am open to amendments because my goal here is not to make political hay; it is to help Canadian seniors who really need help. Let us not forget that, as I have said, this bill targets a small number of people who unfortunately belong to one of the neediest groups in society. These are people who built our great country, who made it what it is today. They deserve all of our respect, and they especially deserve to have us find a solution to a problem that affects only the poorest seniors.

As I said earlier, no other Canadians are penalized income-wise the year after they withdraw money from an RRSP to pay for a pre-arranged funeral. Only these nation-builders, who worked so hard their whole lives and managed to put some of their hard-earned money aside in their RRSPs, are penalized. If they want to help their families cope with the grieving process once they depart for a better world, they will be penalized.

I am therefore asking all members of the House to set partisanship aside and support my bill so that we can work together to find a way to help our poorest seniors enjoy their well-deserved retirement a little bit more.

In closing, I would like to thank all of the members who spoke to my bill. I appreciate that very much.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And five or more members having risen:

Pursuant to an order made on Wednesday, May 22, 2013, the recorded division on the motion stands deferred until Wednesday, June 12, 2013, at the expiry of the time provided for oral questions.

It being 2:30 p.m., the House stands adjourned until next Monday at 11 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 2:30 p.m.)