Good morning. My name is Ray Pekrul and I'm the representative from Saskatchewan for the Canadian Association of Social Workers.
The issue that we again want to advocate to you is the improvement of the financial status of low-income and moderate-income women in Canada. We acknowledge that some improvements have been made by this government in previous budgets, such as the working income tax credit, funding for affordable housing and the homeless, tax credits for seniors, tax credits for persons with disabilities, and increases in the guaranteed income supplement.
Although the budget mentions that the federal government is working to improve retirement income for future generations of seniors through a pooled registered pension plan and the development of options for modest increases in the Canada Pension Plan, it is again unclear whether the initiatives will benefit low-income women.
Why is there need for additional policy? When looking at income and wages, we can see that while the overall prevalence rates of low income, as measured by StatsCan low-income cutoffs after tax, are similar for men and women, senior women, female-led families, and unattached women, particularly in urban areas, are disproportionately poorer than men.
The low income of women is further affected by age, ethnicity, immigrant status, and aboriginal status. The average earnings of women relative to men remain in the 65% to 70% range. It is higher for full-time work, but there's still a significant gap.
While the vast majority of adult women are in the paid work force, women's experience of paid employment is different from that of men. More women are in part-time and non-standard work. This pattern dramatically affects their earning capacity. When looking at individual transfer payments, the allowance component of OAS and GIS is available to low-income individuals aged 60 to 64 who are married to low-income pensioners and to low-income widows aged 60 to 64. But low-income individuals aged 60 to 64 who have never married or who are separated or divorced are not eligible.
On employment insurance, women are less likely than men to qualify for benefits when they lose their jobs. They move in and out of jobs more frequently because of family demands. Rules governing voluntary job-leaving also make it difficult for many women to qualify. In addition, sickness benefits are inadequate for women, and women are more likely to be cut off than men.
We think the following three sets of recommendations will benefit low- and moderate-income women in Canada.
Looking at old age security, the guaranteed income supplement, and the allowance, the combined amount of OAS and GIS for those who have no other sources of income in old age should be at least at the level of the after-tax LICO, regardless of where women live. The additional benefits outlined in the 2011 budget will still leave many women in poverty in urban areas.
To address the problem of the denial of GIS benefits to those with small amounts of personal savings, higher amounts of income should be allowed before cutting back on GIS benefits. The 2011 budget maximum top-up of GIS for single women presupposes an income of $2,000 from income sources other than OAS and GIS. We think that amount should be at least doubled.
Since the CPP retirement pension is available at age 60, it would make sense to eliminate the marital status limitation in the allowance of the old age security system and make benefits available to all low-income persons aged 60 to 64, regardless of marital status.
Looking at the Canada Pension Plan, to improve CPP retirement pensions for low-income individuals, the replacement rate could be increased from 25% of average earnings up to 50% for those with earnings at or below the year's maximum pensionable earnings. Increased replacement rates could be financed by increasing the upper level of contributing earnings from the current amount, which is roughly equivalent to the average wage, to a factor of twice the average wage.
The burden of high CPP contribution rates for lower-income earners could be addressed by increasing the tax credit for CPP contributions or making it a graduated credit geared to income. This would also help multiple job holders whose earnings at any one job are below the year's basic exemption and who wish to make CPP contributions.
A caregiving dropout should be implemented in the CPP, similar to the dropout for children, to allow for those years to be exempt when women come to claim their CPP benefits.
Looking at employment insurance, there could be a gradual increase of the maximum weeks for sickness and compassionate care benefits, with the potential to increase the benefits period further. We could expand the definition and categories of “just cause” for voluntarily leaving a job to provide more flexibility to interpret what constitutes just cause, and we could increase the weekly benefit amount of a claimant's average weekly earnings in their best 14 weeks of earnings during the most recent 12-month period.
We think these recommendations would go some way towards improving the income level of women of low and moderate incomes.