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Evidence of meeting #68 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was workers.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Arthur Sweetman  Professor, Ontario Research Chair in Health Human Resources, Department of Economics, McMaster University, As an Individual
Michael Wolfson  Professor, As an Individual
Vangelis Nikias  Project Manager, Convention on the Rights of Persons with Disabilities, Council of Canadians with Disabilities
Frank Zinatelli  Vice-President, General Counsel, Canadian Life and Health Insurance Association Inc.
Keith Ambachtsheer  Director, Rotman International Centre for Pension Management

9:35 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Thank you, Mr. Chair.

Welcome to all the witnesses.

Mr. Wolfson, there's something about you that I really like. I think it's the fact that you're a blunt person. I'm a blunt person, too. In our little exchange before the session, I wanted to make sure I encapsulated what you think about the OAS.

From what I learned—correct me, if I'm wrong—you believe in raising the OAS, but you believe it should be done over a longer period of time. Yes, or no?

9:35 a.m.

Professor, As an Individual

Dr. Michael Wolfson

Yes, plus. It should be done over a longer period of time, and it should be done in concert with a fundamental review, not as a piecemeal stovepipe kind of policy.

9:35 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

I hear you. We have said we're not going to start any changes to this process until 2023, which gives time for people to adjust their behaviours and so forth. We're going to also be evaluating it as we go along. That's what governments do. We evaluate and adapt as we need to. I can assure you that we intend to continue to monitor this.

You also said that in 1979 this was on the radar. Are you saying we should have started this a long time ago? Should we have raised the age of OAS a long time ago?

9:35 a.m.

Professor, As an Individual

9:35 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Okay. Thank you.

9:35 a.m.

Professor, As an Individual

Dr. Michael Wolfson

OAS, plus other things, like CPP. Think about the tax system, age exemption—

9:35 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

When you talked about CPP, oddly enough you mentioned some comments made by the Prime Minister with regard to CPP being funded. It's different from OAS, isn't it, Mr. Wolfson? It has its own pool of revenue assigned to it, where OAS does not. It comes out of general revenues, correct?

9:35 a.m.

Professor, As an Individual

Dr. Michael Wolfson

Correct, but both involve intergenerational transfers.

9:35 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Yes, and you've already said that. But the fact remains that it has its own pool of revenue and it is actuarially sound for at least 75 years.

It's an investment fund, so it's very different. When we say it's fully funded, it's because it is actuarially sound. An interpretation of the words is what I'm suggesting. I just want to make sure we clarify it so that you understand exactly what's meant by the term that was used.

Mr. Nikias, you had some questions about CPP. I want to take advantage of this opportunity to share the answer with you.

I have only five minutes, and it will be quicker for me to read what's been said about it than to improvise. So if you'll allow me, I'll read it. How will the CPP and other federal programs be affected by the age of eligibility increase?

The Government will ensure that certain federal programs, including programs provided by Veterans Affairs Canada and Aboriginal Affairs and Northern Development Canada that currently provide income support benefits until age 65, are aligned with changes to the OAS program. Without such an alignment, individuals receiving benefits from these programs would stop receiving them at age 65 and face an income gap until age 67 when they become eligible for the OAS pension and the GIS.

Which is what you said, Mr. Nikias.

...alignment will ensure that these individuals do not face a gap in income at ages 65 and 66. The Government will also discuss the impact of the changes to the OAS program on [CPP] disability and survivor benefits with provinces and territories, who are joint stewards of the CPP, in the course of the next triennial review.

The reason I tell you this is that I want to reassure you that the work isn't finished, but we do have partners in this, the provinces and the territories.

I do want to ask you about proactive enrolment, though, and how that might help our disabled folks. Do you see the proactive enrolment into OAS as a good measure for our disabled Canadians?

9:35 a.m.

Project Manager, Convention on the Rights of Persons with Disabilities, Council of Canadians with Disabilities

Vangelis Nikias

The proactive enrolment into OAS?

9:35 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Yes. Instead of having to apply, which is right now the way you can get access to both OAS and GIS, the government has put proactive enrolment in this bill so that those seniors who can be identified easily by looking at other measures will automatically be enrolled as opposed to them having to apply.

9:35 a.m.

Project Manager, Convention on the Rights of Persons with Disabilities, Council of Canadians with Disabilities

9:35 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

It's a good measure?

9:35 a.m.

Project Manager, Convention on the Rights of Persons with Disabilities, Council of Canadians with Disabilities

Vangelis Nikias

Yes, of course. I do want to clarify, though.

9:35 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Sure.

9:35 a.m.

Project Manager, Convention on the Rights of Persons with Disabilities, Council of Canadians with Disabilities

Vangelis Nikias

Thank you for the opportunity.

One of the points we made, and I want to reiterate, is that people with disabilities—especially women with disabilities and aboriginal people with disabilities—because of lower labour market attachment rely on social assistance.

I applaud the philosophy of looking at these issues and aligning the changes to the OAS, but we have to also think about the impact on people who receive social assistance and who may have to receive social assistance, if we don't take adequate compensatory measures until the age of 67.

9:35 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Yes, and the Government of Canada will be compensating the provinces for that. That's also in the bill.

Mr. Ambachtsheer, do you agree with proactive enrolment?

9:40 a.m.

Prof. Keith Ambachtsheer

Inertia is a fundamental human trait. Therefore, if people have to do something actively to make something happen, x% won't do it.

So if you flip that around.... I had mentioned auto-enrolment earlier in terms of PRPPs as being essential to making that program work.

9:40 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Absolutely, and that's in the PRPP plan.

9:40 a.m.

Prof. Keith Ambachtsheer

No, it's not.

9:40 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Well, for those who take it, they're automatically enrolled. They have to opt out.

9:40 a.m.

Prof. Keith Ambachtsheer

No, the employer has to enrol the employees into the plan. That means...you know, that's automatic enrolment that has force. If you leave it voluntary for employers as to whether they sign up for this or not, you're going to leave a large gap of workers out of the game.

9:40 a.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Yes. I hear you.

9:40 a.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

We'll go to Ms. Nash, please.

June 1st, 2012 / 9:40 a.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Thank you very much.

I have so many questions, but I'll start with you, Mr. Nikias, and just pick up on your point about what happens to low-income people, especially people with disabilities, because of the OAS change.

I know that in my community, people who are on Ontario disability benefits are really living with a lot of hardship—many people with disabilities at the bottom end of the income scale.

I'm noting that Canada as a whole doesn't have the aging problem that many other OECD countries have. Obviously Canadians demographically are getting older, but not as rapidly as some other countries.

The concern I want to raise, just to pick up on something you said, is that between 2006 and 2009, about 128,000 more seniors became low-income. About 70% of those were women. For many of these women, the combination of OAS and GIS is the key factor for them in preventing poverty. Obviously many of these people are people with disabilities.

I'd just like to ask you what you think waiting an extra two years for OAS and GIS could mean for these low-income Canadians, especially people with disabilities.