Bill C-319

An Act to amend the Old Age Security Act (amount of full pension)

This enactment amends the Old Age Security Act to increase the amount of the full pension to which all pensioners aged 65 or older are entitled by 10% and to raise the exemption for a person’s employment income or self-employed earnings that is taken into account in determining the amount of the guaranteed income supplement from $5,000 to $6,500.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

I thank the opposition parties for allowing Bill C‑319 to pass through the House. We now have an opportunity to look at some fundamental issues that I hear less about in the discussions between the two parties.

Mr. Poirier-Monette, what is the impact of the fact that a fixed income such as the old age security pension has not been increased for seniors aged 65 to 74?

[Michelle Ferreri, Conservative, Peterborough—Kawartha, ON]

Thank you, Mr. Chair.

Thank you to our witnesses as we study Bill C-319, an act to amend the Old Age Security Act.

Perhaps I can start with you, Mr. Janeiro.

Can I call you James? Okay. It's great to see you again.

I think what we're hearing here today is that obviously seniors are in dire straits. Basically, there are so many people in dire straits. Our seniors seem to be more on the vulnerable end of that position. Your testimony today was about primarily caregivers. I think a lot of us here who have aging parents—and those who are watching—know, and it hit home. I saw a lot of nods as you were giving your testimony.

This bill is saying to increase old age from $5,000 to $6,500 a year, which seems so minimal, I'll be honest with you, in a cost of living crisis, which you touched on. When have you ever seen inflation or a cost of living crisis be this bad in your time of working in this industry?

[Philippe Poirier-Monette]

Yes, many things can be proposed.

As Ms. Tassé-Goodman said in her remarks, provisions could be added to Bill C‑319 on the method of indexing old age security, among other things. That pension is indexed to the consumer price index, or CPI, while wage growth is about an additional percentage point above that index.

Simply put, the old age security pension currently replaces about 15% of the average wage. However, because of the method of indexing this pension, the replacement rate decreases over time. Therefore, in 10, 15, 20 years, the amount of the old age security pension would represent a smaller percentage of the average salary.

This is problematic because old age security is the first pillar of retirement. It represents the universal plan, which is supplemented by the Canada pension plan or the Quebec pension plan and personal savings. Since that is the foundation, it has to be solid.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Thank you so much, Mr. Chair, and to the witnesses who have come today.

I really appreciate the gender lens that's been put on some of this in the discussion today. We know that women are punished for caring for family earlier on in their careers and there's also the wage gap. I really appreciate the light that's been shone on that.

There's also the fact that seniors are still working in paid and unpaid work, and certainly in care. There is a lot of unpaid care that's done by seniors.

This is an opportunity, as this comes to committee, to talk about amendments that could potentially come into this bill.

I will ask Mr. Janeiro first.

If there was an opportunity to amend this bill to include something else that is important at this time, is there anything that you would propose?

I also want to know your thoughts on this: The NDP has been asking for some grace period. A lot of times, seniors don't get their income tax filed on time. They can lose their entitlements because they didn't get their income tax in.

I think this might be an opportunity, as we open Bill C-319, to make sure that we also give seniors some grace period. If they become sick or they are caring for a loved one, the income tax falls to the wayside and they lose their entitlements. It seems unfair.

Mr. Janeiro, would you mind giving your thoughts on that?

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

Thank you very much to all the witnesses for being here to discuss this important bill. I would like to disagree with a number of the comments I've just heard, but that's not the basis of my intervention.

Fundamentally, this bill is about fair treatment for all seniors. Old age security in Canada is a universal program, subject to a few conditions. However, in my opinion, the decision was made for the first time to create a gap in the program by distinguishing people aged 65 to 74 from people aged 75 and over, without taking into account the reality of seniors. The bill corrects this unfair treatment based on age, which is a form of discrimination because it does not at all take into account the needs of people aged 65 to 74.

Ms. Tassé-Goodman, you supported Bill C‑319 long before the Liberal government decided to increase old age security, which it had promised to do, but only for seniors aged 75 and over. Not a day goes by without your members asking you when there will be fair treatment for people aged 65 to 74.

What are people telling you and what motivations lead you to support this bill?

[Professor Arthur Sweetman, Professor, McMaster University, As an Individual]

Thank you for inviting me to speak today.

As background, I’d like to start by considering low income in Canada.

Using the market basket measure, in 2019, 10.3% of persons in Canada fell below the low-income threshold. Those under the age of18, at 9.4%, were somewhat less likely to be low income than the average. Those between the ages of 18 and 64 had an above average low-income rate of 11.8%. Of relevance today, those aged 65 and over, at 5.7%, had the lowest likelihood of being in low income among these three age groups.

While there are individuals over age 65 who have low incomes, Canadian programs have been very successful in reducing low-income rates for this age group to below that of society as a whole.

Turning to Bill C-319, as I understand it, two changes are proposed. I will focus on them in turn.

The first will increase what I call the earnings disregards for the guaranteed income supplement, the GIS. Since 2020, the two disregards have been $5,000 each. Current GIS recipients face a three-stage regime. In stage one, the first $5,000 in annual earnings have no effect on their GIS benefit; in stage two, the next $10,000 in earnings are taxed at a maximum of 50%, and second, there's $5,000 disregard. In stage three, earnings beyond $15,000 are taxed at 100% to the full amount of the GIS.

The bill proposes to increase both the stage one and stage two disregards to $6,500 while retaining the stage two tax rate of 50%. This implies that GIS recipients would be able to earn up to $6,500 per year without their GIS amount being affected and that they would then face a 50% tax rate on earnings between $6,500 and $19,500. Beyond $19,500, they would face 100% tax rate. Of course, the eligibility threshold for GIS is not much above $19,500 for a single individual.

I see two obvious motivations for this proposed change. The first would be to provide additional income to low-income seniors who are already earning more than $5,000 per year. The second would be to incentivize low-income seniors to increase their labour supply. However, among low-income seniors, those with the lowest pre-retirement incomes are least likely to work post age 65, so those with more disadvantaged backgrounds are least likely to benefit from this change.

Also, previous changes to the GIS appear to have had modest impacts on changing labour supply among GIS recipients. I suspect that this proposal would similarly have a positive but very modest impact on earnings.

Overall, while the potential policy change will probably not have much impact on extreme poverty, it will benefit those who are low income and who already earn more than $5,000 per year. I therefore see this as worthwhile since it will help some low-income working seniors. It rewards work and hopefully incentivizes it.

Turning to the second part of the bill, it proposes to increase OAS payments to those aged between 65 and 74 by 10%. Over 95% of individuals in this age category receive at least some OAS income, so this part of the policy change is not exclusively targeted at low-income seniors.

Compared to the first part of the bill, this is a much more expensive proposal for taxpayers. My best guess, derived from calculations based on an Office of the Superintendent of Financial Institutions’ report, is that this policy change would cost between 0.15% and 0.2% of GDP. This is a very rough guess, and it's also a very big number.

Further, in terms of labour market incentives, although any effect is likely to be small, I expect it to decrease rather than increase labour supply and earnings. A greater concern is that it’s not obvious that the federal government currently has sufficient fiscal capacity to undertake an expenditure such as this while simultaneously building, for example, a robust pharmacare program. I think the opportunity cost of the funds for this second policy change need to be considered very carefully. Undoubtedly Canadians’ views will differ, but I think that many, including many seniors, would find greater dignity in and prefer alternatives such as spending money on improved health care rather this non-targeted increase to OAS payments.

If, additionally, we are worried about seniors living with dignity and avoiding low income—or, more broadly than low income, avoiding poverty—then a targeted proposal would be preferable to this broad-brush approach.

Thank you very much for your attention.

[Gisèle Tassé-Goodman, President, Provincial Secretariat, Réseau FADOQ]

Thank you, Mr. Chair.

Ladies and gentlemen members of Parliament, my name is Gisèle Tassé-Goodman. I am the president of the Réseau FADOQ.

With me is Philippe Poirier-Monette, special advisor on government relations.

I would like to thank the members of the committee for this invitation to comment on Bill C‑319.

The Réseau FADOQ is a group of people aged 50 and over with more than 550,000 members. In each of our interventions at the political level, we want to contribute to improving seniors' quality of life. At the outset, I must emphasize that Bill C-319 deals with a subject that is of great concern to seniors. Not a day goes by that our members do not ask us about the old age security pension or the guaranteed income supplement. So we are bringing their voices here today, in this committee.

In July 2022, old age security was increased by 10% on a permanent basis for those aged 75 and over. Enhancing this benefit was and continues to be necessary. However, people aged 65 to 74 do not understand why they are excluded from this increase. Currently, a person under the age of 75 receiving only the old age security pension and the guaranteed income supplement has an annual income of $21,345. A senior in this situation has an income that puts them below the official poverty line in Canada, which is based on the market basket measure. Let's remember that this index establishes the cost of a bare subsistence basket. It excludes things like dental care, eye care, as well as the purchase of medication, which are vital expenses for seniors.

Bill C-319 proposes to increase the amount of the full pension by 10% for those aged 65 to 74. The Réseau FADOQ supports this proposal, since financial distress has no age. This amendment will enable all persons aged 65 and over to access the same full pension amount, without age-based discrimination.

The other measure proposed by Bill C-319 is an increase in the guaranteed income supplement earnings exemption for recipients. Currently, it is possible for these individuals to earn up to $5,000 in employment income while collecting all of the guaranteed income supplement benefits. For earnings between $5,000 and $15,000, a partial exemption applies. Over the past few years, the Government of Canada has increased the earnings exemption a few times, and every time, the Réseau FADOQ applauded that decision. This is a measure that reduces the effects of a tax trap that discourages guaranteed income supplement recipients from remaining in the labour market. In addition, in the context of a labour shortage, this measure would be well received.

Let's not forget that, during the last election campaign, the Government of Canada promised to introduce a tax credit for experienced workers. Since that tax credit has still not been implemented, increasing the guaranteed income supplement earnings exemption would be a step in the right direction.

In closing, we feel obliged to address two aspects that are not affected by Bill C-319.

During the 2021 election campaign, the federal government made a commitment to increase the guaranteed income supplement. Three years later, seniors are still waiting. The Réseau FADOQ encourages the Government of Canada to keep its commitment.

Finally, we must also address the shortcomings in the way old age security is indexed. This program is indexed based on the consumer price index, while wages change about a percentage point faster. As a result, federal benefits will play an increasingly smaller role in the retirement income replacement rate in the future. Our organization is asking the government to revise the indexing method for the old age security program in order to take wage growth into account.

I would like to thank the members of the committee for listening to us. We look forward to your questions. Mr. Poirier-Monette will answer questions, and I will reserve the privilege of getting involved.

Thank you.

[James Janeiro, Director, Policy and Government Relations, Canadian Centre for Caregiving Excellence]

Good morning, ladies and gentlemen, and Mr. Chair. Thank you very much for the invitation and the opportunity to speak this morning as part of your study on this very important bill.

I am James Janeiro and I'm with the Canadian Centre for Caregiving Excellence. We are a pan-Canadian organization focused on caregivers, which is to say parents, siblings, friends, neighbours and the like, as well as care providers such as personal support workers and direct support professionals who support people with disabilities all across our country. Our goal is to make Canada the best place in the world to give and receive care.

The intent of Bill C-319 is to raise the pension incomes of retired Canadians. This is both timely and urgently necessary, in our opinion. The National Institute on Ageing recently released their 2023 “Aging in Canada” survey results. This survey of Canadians 50 and over has helped illuminate what caregivers across the country already know: Seniors are feeling the financial pinch resulting from the ongoing cost of living crisis. An overwhelming 70% of survey respondents reported that they are concerned with the rising cost of living, and nearly 50% worry about running out of money. Sadly, over one-third reported worrying about a reduction in pension or other government benefits.

This problem of pinched household budgets due to the cost of living crisis becomes even more urgent when the low-income senior is also a caregiver. One in four Canadians are caregivers today and half of us will be a caregiver at some point in our lives. Today, in 2024, women in Canada are just as likely as not to be a caregiver already. For many of these caregivers, financial distress is at the top of their very long list of struggles. Mercilessly increasing grocery and other bills has made an already difficult situation much worse. Recent data shows that nearly two-thirds of caregivers reported financial hardship last year due to their care responsibilities.

A recent survey conducted by us at the Canadian Centre for Caregiving Excellence found that over two-thirds of people receiving care in Canada are themselves seniors. In addition, approximately 20% of caregivers are also seniors. Of those senior caregivers, 80% care for other seniors, such as wives, adult children, husbands or even their parents. For these seniors, struggling through the already threadbare social safety net designed to help them is part of their daily reality.

Statistically, senior caregivers are mostly women and they have likely had to take time off work at some point in their lives to have children or to care for somebody else. This means they lost out on years of CPP contributions, which continues to punish them for caring for others through lower CPP payments well into their senior years. Imagine worrying about how to pay the rent or feed your ailing wife while also bathing her and coping with cognitive decline. Unfortunately, this is the daily reality of nearly a third of caregivers in their older years, who reported some kind of economic strain due to their care responsibilities.

Seniors are crying out for solutions. We spent the last year advocating for the Canada caregiver credit to be converted into a refundable tax credit. While out of the scope of this study, it would certainly help, as would the provisions in this bill, which would go a long way towards solving the cost of living crisis for seniors.

We strongly endorse this bill. Seniors helped build Canada and are often called upon to look after others during what should be their years of rest and relaxation. The least we can do is adjust our very successful national programs like the CPP to meet the challenges of the current crisis and make sure seniors' lives are a little easier.

Thank you very much.

[The Chair, Liberal, Bobby Morrissey]

The committee is back in session.

I would like to welcome the following witnesses for the study of Bill C-319.

From the Canadian Centre for Caregiving Excellence, we have James Janeiro, director, policy and government relations. From Réseau FADOQ, we have Gisèle Tassé-Goodman, president, provincial secretariat, and Philippe Poirier-Monette, special adviser, government relations. As an individual appearing virtually, we have Arthur Sweetman, professor, McMaster University.

We'll begin with a five-minute opening statement from Mr. Janeiro.

[Andréanne Larouche, Bloc, Shefford, QC]

Mr. Chair, if I understand correctly, I'm giving my opening remarks now, but I'll answer questions later.

Good morning, everyone.

Dear committee members, thank you for having me this morning so we can look at Bill C‑319 together. It's a relatively simple but vital piece of legislation aimed at improving the financial situation of seniors during really tough economic times.

At the heart of the bill is a two-pronged approach to addressing seniors' needs. First, the bill would amend the Old Age Security Act to eliminate the age discrimination that currently exists in our system. This bill would increase the amount of the full pension to which all pensioners aged 65 and older are entitled to by 10%. This will correct a glaring injustice, as, since 2022, only seniors aged 75 and over have been receiving the 10% increase, leaving a large portion of all pensioners in a precarious financial situation.

Second, the bill would raise the exemption for a person's earnings taken into account in determining the amount of the guaranteed income supplement from $5,000 to $6,500 per year. This means that each recipient aged 65 and older will have an extra $1,500 in their pocket each year. That's significant financial support in an environment where prices are rising exponentially.

Recognizing that this is an urgent issue is crucial. More than 7.25 million Canadian seniors and 1.8 million Quebec seniors benefit from the old age security program. Given that more than 3.7 million Canadians are between the ages of 65 and 74, enhancing the old age security program is imperative. Support meant only for people aged 75 and over helps only 2.8 million people. It is missing the mark by helping a minority of seniors and abandoning the majority of them. We need to take action to support seniors, who have made an important contribution to our society.

The facts speak for themselves. We see seniors spending a disproportionate amount of their income on housing and food, expenses that have gone up significantly. In addition, an alarming number of seniors find themselves in situations where housing absorbs too much of their income, making their daily lives even more difficult.

It's also important to note that poverty among seniors is a worrisome reality. In 2020, 13% of seniors were living in poverty, a rate higher than that of all other age groups. It's our responsibility to ensure that seniors can live with dignity after dedicating their lives to the well-being of our society.

Finally, we must consider the financial cost of this bill. The proposed increase in benefits represents a significant investment, estimated at $16 billion over several years, but we must consider it an investment in our society and in the dignity of seniors.

As I bring my remarks to a close, I will say that Bill C‑319 is a crucial opportunity to correct injustices and support seniors in tough economic times. We can't turn our backs on those who have given so much to our society. Approving this bill signals that we value seniors and are committed to ensuring their well-being in the years to come.

This debate and this battle have been going on for a long time. Long before I entered politics, I knew seniors were in distress. Between 2007 and 2011, I worked as a staffer, and even then I noticed that many of the people in financial distress who came to the office were seniors. After that, I worked in community groups. We talked about abuse and poverty. The message I'm sending now with this bill is that we want to help the seniors who are struggling the most and will not give in to gloomy pessimism.

Seniors who are willing and able can also help address another problem we're facing: the labour shortage. As some of them reminded us, they want to contribute to society and stay in the labour market, but, under the current system, they're penalized if they do so.

My bill would really do two essential things. One, it would allow seniors who are willing and able to keep working, since there are lots of benefits to that, and, two, it would give seniors a little extra help from their old age security pension.

Thank you very much, Mr. Chair.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

I want to point out that there's consensus on inviting the sponsor of Bill C‑319 back for the full hour that was planned. I still want to express my sincere regret that we're starting this study this way. However, I agree with inviting Ms. Larouche again.

Again, our apologies, Ms. Larouche.

[The Chair, Liberal, Bobby Morrissey]

—is the minor wording change that you are moving is inconsistent and I have to rule it as inadmissible.

The only debate I'll entertain is on.... No, I'm not entertaining any because I moved to a vote.

We're calling the vote on the main motion as amended.

(Motion as amended agreed to: yeas 11; nays 0 [See Minutes of Proceedings])

We will now move to the order of the committee study.

I would like to welcome Madame Larouche.

Madame Larouche is appearing as a witness on Bill C-319.

Do you have an opening statement?

Yes?

You have the floor for five minutes.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Thank you, Madam Chair.

Minister O'Regan, as you said, you are also the Minister of Seniors. In your presentation, you talked about the importance you attach to the principle of aging with dignity, and we fully agree with that. However, your government made a decision concerning seniors in 2022 by giving a 10% increase in old age security only to seniors aged 75 and over.

This week, we are going to start studying Bill C-319, sponsored by the member for Shefford, meant to address this inequity and to grant a 10% increase in old age security to seniors starting at age 65, which is the age of eligibility for this program.

Will your government support that bill?

Fall Economic Statement Implementation Act, 2023

[Andréanne Larouche, Bloc, Shefford, QC]

Madam Speaker, the member and I are both on the Standing Committee on the Status of Women, so we work together on issues relating to the status of women.

Another file that interests both of us is seniors. She is her party's critic for seniors. We have had a number of very interesting conversations. I completely agree with what she said on the subject. This economic update lacks measures for seniors. There is nothing in it for them. The Bloc Québécois has long been asking the government to do something for seniors. That is one of the Bloc's priorities, and it is one of the things we have asked for in economic updates and budgets. Seniors have been getting poorer and poorer for too long.

Next week, the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities will begin its study of Bill C‑319.

Will the Conservative Party actually do what seniors are asking them to do, seniors like the ones from Saguenay and Chicoutimi that I met with just last week? They want the House to pass Bill C‑319 to make things fairer for seniors. They do not want seniors to be divided into two classes, those under 75 and those 75 and over.

[The Chair, Liberal, Bobby Morrissey]

Committee members, I call the meeting to order.

I apologize. It's a reminder. Please do not have your phones on vibrate near the earpiece when you're speaking, because it will, obviously, hurt the interpreters.

Again, welcome to meeting number 94 of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on June 13, the committee is continuing its study on intergenerational volunteerism.

Today’s meeting is taking place in a hybrid format. Witnesses are appearing virtually, online, as well as here in the room.

You have the option to speak in the official language of your choice. In the room, interpretation is available through your earpiece. If you are appearing virtually, click on the globe icon at the bottom of your screen and choose the language of your choice.

If there's an interruption in interpretation, please get my attention. We'll suspend while it's being corrected. I would like to again remind members to please keep their telephones and earpieces away from the mic to protect the hearing of our interpreters.

I remind all members to address their comments through the chair. Use the “raise hand” function if you're online. If you're in the room, raise your hand.

Before we go to witnesses, I wish to confirm with members a deadline to provide the clerk their list of witnesses for the study on Bill C-319, an act to amend the Old Age Security Act. Is there agreement that the deadline to submit witnesses be on Wednesday, December 13? We will resume the study in the new year.

Seeing no disagreement, we'll set that deadline.

One of our witnesses is in the room, and the other is appearing virtually. From Le Petit Peuple, we have Jeanne Campeau, executive director, by video conference. Welcome. From Volunteer Ottawa, we have Christine Trauttmansdorff, executive director—