Evidence of meeting #22 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was retirement.
A recording is available from Parliament.
4:20 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you.
Thank you very much, Mr. McKay.
Mr. Carrier, please, for seven minutes.
May 27th, 2010 / 4:20 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
Thank you, Mr. Chairman.
Thanks to our witnesses who are providing us with interesting information. I'll start with Mr. Béland, who is our first witness.
In your presentation, you referred to the poverty rate among seniors, which is distinctly lower in Canada, compared to other countries. In spite of everything, a lot of our seniors are living below the poverty line, but we can be encouraged compared to others. You say this is partly due to the success of the Guaranteed Income Supplement.
I'd like you to confirm for me: before the Guarantee Income Supplement is determined, each person's income is considered, including the CPP and QPP that they receive. Is that in fact the case?
4:25 p.m.
Canada Research Chair in Public Policy, Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, As an Individual
Yes.
4:25 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
So the poverty of those receiving the Guaranteed Income Supplement is due in large part to the deficiency of our pension plans, the CPP and QPP.
4:25 p.m.
Canada Research Chair in Public Policy, Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, As an Individual
In some cases, yes.
4:25 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
What percentage of people have access to the Guaranteed Income Supplement, even where there is CPP or QPP?
4:25 p.m.
Canada Research Chair in Public Policy, Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, As an Individual
I don't have the figure.
4:25 p.m.
Bloc
4:25 p.m.
Canada Research Chair in Public Policy, Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, As an Individual
No.
4:25 p.m.
Head of Pension Policy Analysis, Social Policy Division, Organisation for Economic Co-Operation and Development, As an Individual
Could I answer that question?
4:25 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
In any case, I think we could definitely conclude that the Guaranteed Income Supplement is a compensation by the government, in accordance with its social responsibility, that is due to the lack of forecasting of citizens' retirement income or retirement savings. Is that in fact the case?
4:25 p.m.
Canada Research Chair in Public Policy, Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, As an Individual
Yes, it's a tool to combat poverty. In fact, it supplements the Canada Pension Plan and the Quebec Pension Plan, but it's for low-income individuals only. So obviously those who have—
4:25 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
In the study we're conducting on pension plans, couldn't we instead come to the conclusion that the CPP and QPP must necessarily be improved? That would avoid the government having to contribute more, through the Guaranteed Income Supplement, so that citizens will contribute more, despite their own decisions, as well as employers, which participate equally, if I understand correctly.
4:25 p.m.
Canada Research Chair in Public Policy, Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, As an Individual
That's possible. It depends on the increase we're talking about, if you increase the CPP replacement rate. That said, there will still be people who won't have enough income, for one reason or another, who won't have been in the labour market.
4:25 p.m.
Canada Research Chair in Public Policy, Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, As an Individual
In certain cases, indeed, and that's why I don't think we can abolish the program. The Guaranteed Income Supplement will stay.
4:25 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
Without abolishing it, at least it could be limited to exceptional cases where there would be no employment income requiring individuals to contribute to the CPP or QPP.
4:25 p.m.
Canada Research Chair in Public Policy, Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, As an Individual
Under the reform, that could reduce the tax burden associated with the Guaranteed Income Supplement, if the Canada Pension Plan or the Quebec Pension Plan were enhanced. That's what you mean?
In fact, it's like a waterbed effect: if the Canada Pension Plan expands, that could save us money under the Guaranteed Income Supplement. That's in fact what you mean?
4:25 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
Yes, that's what I mean.
In your view, wouldn't that be a normal direction in which a responsible government should be heading?
4:25 p.m.
Canada Research Chair in Public Policy, Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, As an Individual
These are different measures; they're funded differently. When there's an increase in contributions, that also affects employers. That's a macro-economic fact that has to be taken into consideration: the funding isn't the same. So I'd say you need both.
Furthermore, I don't see the Canada Pension Plan reform as a reform based simply on combating poverty. Once again, if you increase Guaranteed Income Supplement benefits, you achieve promising results at a relatively limited cost. I don't think the Quebec Pension Plan and Canada Pension Plan reform should be viewed solely from the perspective of combating poverty. I previously mentioned that income maintenance was very important. In that sense, I don't think this is an alternative. These programs complement each other and play different roles.
That said, it's true that, if you increase the size of the Canada Pension Plan and of the Quebec Pension Plan, if benefits were higher, that could definitely help certain individuals get above the poverty line. Consequently, it could help combat poverty and perhaps reduce the costs of the...
There again, it depends on what reform we're talking about. We need actual figures.
4:25 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
Putting it that way, it's as though we were establishing the facts, the figures without giving any orientation—on your part, in any case. You leave the odium or importance of the decision to us.
4:25 p.m.
Canada Research Chair in Public Policy, Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, As an Individual
Absolutely.
4:25 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
Mr. Ambachtsheer, can you hear me? Do you have the interpretation?
4:25 p.m.
Director, Rotman International Centre for Pension Management, As an Individual
I can hear you, yes.
4:25 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
You heard the questions I asked in French. I'd like to know your opinion on the possibility of reducing the government's share in the Guaranteed Income Supplement by instead increasing responsibility at the bottom level through a larger contribution by every worker and employer.