Human Resources Committee on Oct. 18th, 2016

[Pierre Poilievre, Conservative, Carleton, ON]

It would raise the threshold. Would it raise the rate of people who are considered to be low income as a result?

[Andrew Heisz]

If there were no other change in the income distribution, then yes, more people would fall below that threshold and the rate would increase. However, I want to underscore that I'm not making any connection between that arithmetic—

[Pierre Poilievre, Conservative, Carleton, ON]

You're not making a policy judgment.

[Andrew Heisz]

—and the carbon issue.

[Pierre Poilievre, Conservative, Carleton, ON]

Is food considered as part of the market basket?

[Andrew Heisz]

Yes.

[Pierre Poilievre, Conservative, Carleton, ON]

Is home heating?

[Andrew Heisz]

Yes.

[Pierre Poilievre, Conservative, Carleton, ON]

Is vehicular fuel?

[Andrew Heisz]

Yes.

[Pierre Poilievre, Conservative, Carleton, ON]

All of these things would become more expensive under a carbon tax, and therefore, the threshold would go up and the number of people beneath that threshold would also rise.

I'd like to move on to the question of measurement. I noticed that you spent an inordinate amount of time on the low-income measure, which I felt was ironic given the government we have today. The government has spoken quite a lot about the need to increase middle-class incomes, and of course, we agree with that. We are very proud of the fact that, under the previous government, they rose faster than under the previous seven governments combined. But under the low-income measurement, when median income goes up, if nothing else changes, the number of people considered to be living in low income also rises because low income is measured as 50% of median income.

If the government actually fulfills its objective and raises median income and nothing else changes and people who are lower on the income scale are not falling any further behind—they're doing just as well in four years as they are today—we will actually see an increase in the low-income rate. Do you believe it is logical to use a measurement that paints an ugly picture in the event that median incomes actually rise?

[Andrew Heisz]

That's a great question, and it's often raised as a criticism of the low-income measure. I guess I would answer by saying it's multi-faceted. The situation you described, going from year to year, does in fact happen when you look at the statistics on a year-over-year basis. The low-income rate under the LIM doesn't always rise on the onset of a recession such as the 2008 crisis.

From a year-to-year perspective, it's often a good idea to look at other measures as well, such as the LICO, which are fixed in real values over time.

However, over a longer term, the measures that Statistics Canada uses are all relative low-income measures, so it's important to keep in mind that the concept of low income here is a relative one. A person in low income in 2014 should have about the same relative standard of living as a person in low income in 1990, say. Under a low-income rate that's fixed for a long period of time, that would not be the case.

[Pierre Poilievre, Conservative, Carleton, ON]

In reality, for example, between the years 2006 and 2014, we saw a spectacular decline in the number of people below the LICO rate. But because median incomes were increasing so fast in that decade-long period, the low-income measurement rate did not decline. However, what's measured gets done. If governments were seeking to keep the low-income measure rate low, then they could do that by actually decreasing median incomes.

That would be one way to reduce the LIM rate, which is a perverse incentive for governments, isn't it?

[The Chair, Liberal, Bryan May]

That's your time actually. Sorry. Maybe we can come back to that.

We'll go over to Mr. Robillard, please.

[Yves Robillard, Liberal, Marc-Aurèle-Fortin, QC]

My questions are for Ms. Milroy-Swainson.

In the context of your work, how do you define poverty?

[Nancy Milroy-Swainson]

I actually don't define poverty in the context of my work. We measure the performance of our old age security and guaranteed income supplement program based on the use of the LICO, the low-income cut-off. The reason we use the low-income cut-off is that we have a longer time series to be able to compare it to. It's the one that's been around for the longest period of time.

[Yves Robillard, Liberal, Marc-Aurèle-Fortin, QC]

Can you tell us what steps have been taken towards developing a national poverty reduction strategy?

Where do seniors and the most vulnerable members of society fit in?

[Nancy Milroy-Swainson]

The government has always recognized the contribution of seniors and has wanted to ensure that income levels, low-income levels, are protected in retirement, as someone moves from employment to what is often a fixed income. Historically, there have been lots of measures to reduce low income among Canadians. I've spoken about old age security and guaranteed income supplement. That said, I do know that the discussion paper that the department has prepared, and which Minister Duclos tabled for supporting the discussion, certainly addresses seniors as one population that may be low income.

While the data about Canadian seniors compared with some other populations is relatively positive, they are a vulnerable population. We are interested in ways in which we can improve low income.

Another measure that I think is very important, but it's long term, is with respect to preventing future seniors from falling into poverty. The increase in the Canadian pension plan that has been tabled at this point is an important measure that, over the long term, would help prevent future seniors from falling into poverty, those who may not be saving enough right now for future retirement.

[Yves Robillard, Liberal, Marc-Aurèle-Fortin, QC]

Mr. Chair, I'm going to share my time with my neighbour.

[The Chair, Liberal, Bryan May]

Go ahead, Mr. Sangha.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Thank you very much. Thank you, Mr. Chair.

Thank you, everyone.

My question is to Nancy Milroy. It's regarding financial security for the seniors, which is essential. We are a developed nation in Canada, yet many seniors face the grave threat of living in poverty. In budget 2016, the Liberal government introduced measures to increase the guaranteed income supplement by 10% and revert the old age back to 65. Can you please now provide us information on how this initiative is having a positive effect on financial security and dignity of the seniors?

Secondly, how many seniors do you think we will have lifted out of poverty?

[Nancy Milroy-Swainson]

Thank you for your question.

With respect to the increase in the guaranteed income supplement, the increase was $947 per year for Canadian single seniors, and that benefits 900,000 single seniors. It will lift about 13,000 of those seniors above the LICO, the low-income cut-off. At the same time, for those seniors who remain below the low-income cut-off, it will reduce the depth of their poverty by approximately $728, so they are better off as well, notwithstanding the fact that they still may be below the low-income cut-off. That's been a significant policy decision that has already been implemented. It started in July 2016.

With respect to restoring the age of eligibility to age 65 for old age security and guaranteed income supplement benefits, the government did so because it would otherwise have put 65- and 66-year-olds who rely on government pensions into a low-income situation. At this point, for some reason, I don't have the data with me on the number of seniors who will benefit from that or will be prevented from falling into poverty, but I can certainly get you that figure.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Thank you.

Another question is this. As per the mandate letter of priorities for the Minister of Families, Children and Social Development, there was a price index. Now we are going to change the new price index, that senior's price index, which was earlier the consumer price index. With this new system, changing from the consumer price index to the new senior's price index, when and how is this plan going to go out? What will be your plan for this one? What changes will it bring and how will the new index help reduce poverty?

[The Chair, Liberal, Bryan May]

I'm afraid that's the end of the time. We can come back to that question in another round, but I'm afraid that's the time. Sorry.

Go ahead, Mr. Warawa.

[Mark Warawa, Conservative, Langley—Aldergrove, BC]

Thank you, Chair.

Thank you to the witnesses.

My questions are going to focus on seniors. Just doing some simple math regarding the targeted GIS for low-income seniors, 900,000 Canadians times a $947 per year increase is $852 million. Is that an accurate costing?