Human Resources Committee on Oct. 18th, 2016

[Nancy Milroy-Swainson]

—and certainly some of them would be paying income tax.

[Pierre Poilievre, Conservative, Carleton, ON]

You don't have a range, I guess, is what I'm saying.

[Nancy Milroy-Swainson]

I don't have the post-tax rate, no. It's really related to the reduction rates for our programs.

[Pierre Poilievre, Conservative, Carleton, ON]

I understand. We're short on time, though.

Canadians in certain circumstances have marginal effective tax rates of well over 100%, particularly disabled people who want to work. We know from the statistics that there are hundreds of thousands of disabled Canadians who want to enter the workforce but are punished with METRs of sometimes over 100%. In other words, they lose money by earning money.

Would there be any benefit in ESDC tracking the global METR of Canadians in various different circumstances to ensure that the combined effect of provincial and federal programs and our tax system does not punish people for making the effort to earn a living?

[Nancy Milroy-Swainson]

I can't speak to whether the department should monitor it as a whole, but I can say that programs do monitor it on the basis of their own individual programs.

[Pierre Poilievre, Conservative, Carleton, ON]

Thank you.

Turning my attention now to page 14 of the Stats Canada deck on government programs and the reduction of poverty, I'm curious. This illustrates the per cent reduction in low income due to transfers. Why was taxation not simultaneously added to the bar graph to indicate the effect that it has on income?

[Andrew Heisz]

There's no particular reason. When we think of after-tax income, we think of it as having three major components: those from market income, those from government transfers, and those from taxes. Of course, taxes by and large reduce after-tax income. A similar graph could have been made that included the effect of taxes.

[Pierre Poilievre, Conservative, Carleton, ON]

Why did you say that no “absolute” measures of poverty were considered in this deck?

[Andrew Heisz]

Statistics Canada only produces relative measures of poverty. There are other absolute measures of poverty that are often discussed either in the media or in the academic literature, but none have been taken up by Statistics Canada particularly. We do compute these on an on-request basis for users who would like to have us do them, but what I chose to focus on here was our main headline indicators.

[Pierre Poilievre, Conservative, Carleton, ON]

Finally, for our finance representatives, you spoke about the tax-free savings account. Do you have any data on whether Canadians typically contribute...? What share of tax-free savings account contributions comes from annual or monthly regular contributions, and what share comes from major life events, like a senior downsizing from a home and therefore turning a hard asset into cash or an inheritance resulting typically from a deceased spouse? To simplify, again, what share comes from major life events and what share comes from regularized contributions?

[Pierre LeBlanc]

That's a good question, but we don't have a good answer to it.

[The Chair, Liberal, Bryan May]

That's your time.

We'll go to Ramesh.

You're up first. I think you're going to share your time with Mr. Robillard.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Thank you very much.

My question when we stopped earlier was about the new system for indexing the GIS and OAS. There's the new seniors price index, and before this was done on the consumer price index basis. Could you provide the committee more details regarding the index plan you've developed and when and how that plan is going to be developed? How will your index help reduce poverty among seniors?

[Nancy Milroy-Swainson]

I'll start and StatsCan can weigh in and complement. Thank you for the question.

Absolutely, the government committed to creating an index that more accurately reflects the price increases that seniors face. We're calling it the “seniors price index”. It would be used to adjust old age security and guaranteed income supplement benefits, which are currently adjusted quarterly using the consumer price index.

We're working closely with Statistics Canada to undertake work to develop the index. I'm not a statistician, but it's a very complex process and I've been learning a lot in StatsCan on indices on the way through this. It's complex with a number of different elements, and we're working through those elements. Our goal is to provide the government with advice on an index as quickly as possible, but an index that is as useful as possible. It's a question of balancing the precision of the index and its utility with how quickly we can produce it.

I don't have particular timelines on when that will happen. I know that we're working as quickly as we can, and of course ministers are quite interested in this. It will certainly help reduce low incomes among seniors, because seniors who benefit from the guaranteed income supplement have low incomes. In particular, they will be receiving what we believe to be higher indexation factors over time with the new index.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Do you think the new index will keep on increasing the GIS and OAS for the seniors whenever there is a fluctuation in the market?

[Nancy Milroy-Swainson]

It would reflect the market in the prices that seniors face. If there are price increases, it would definitely increase their OAS and GIS benefits in that context.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Okay.

Go ahead, Yves.

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

My question is for Mr. Heisz.

How should the effectiveness of a Canadian poverty reduction strategy be measured? What objectives should be established to measure progress down the line?

[Andrew Heisz]

Thank you for the question.

I don't have a specific answer for you. However, Statistics Canada, in partnership with other departments, is currently working to develop measures for poverty and other areas. That's all I can tell you.

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

Would you be able to get back to us with an answer at a later date?

[Andrew Heisz]

Yes, of course.

As I mentioned, we are currently discussing the issue of poverty with some departments. We are available, and we have considerable expertise when it comes to assessment measures. We are ready and willing to contribute.

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

Thank you.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

There is a new scheme between the federal and provincial, and both governments have agreed. The provinces have agreed with the federal government that a new Canada pension plan, a new pension plan for seniors, will be developed and most of the provinces have also agreed. When is this expansion of the pension plan going to start, and in which way will it benefit seniors?

[Galen Countryman]

I'll start, and Nancy may want to supplement.

This agreement-in-principle was reached back in June between finance ministers, and legislation was just recently tabled in the House to implement the plan. The plan enhancement would begin in 2019 and would be phased in over seven years. On the benefit side, the income replacement rate would go from 25% to 33%, up to an income at the current year's YMP, the year's maximum pensionable earnings, which is about $54,900 right now for 2016. Eventually the coverage of the income range would increase by 14% by 2025.

[The Chair, Liberal, Bryan May]

Thank you very much.

Now it's over to MP Sansoucy.