Human Resources Committee on Oct. 25th, 2016

[The Chair, Liberal, Bryan May]

Mr. Long.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you, Mr. Chair.

Thank you to our presenters.

I'll ask Mr. Brain and Mr. Wudrick a couple of questions with respect to poverty reduction. This is a study on poverty reduction. I think the committee is determined to come out with a different style of report, and not just the same old policies debated back and forth.

That being said, Mr. Brain, you talked about the TFSA and how beneficial that was. Can you explain to me how beneficial the TFSA is to those living in poverty right now? And in your business, how many of the people who you actually deal with live in poverty?

[Brad Brain]

As one of the other presenters mentioned, the problem with some of the other planning tools, specifically the RRSP or eventually the RRIF, is that they're going to be taxable upon withdrawal. If somebody of modest means is potentially a candidate for the guaranteed income supplement, adding to their taxable income is just working at cross-purposes with the idea of continuing to be eligible for government benefits.

The beautiful part about the tax-free savings account is that it provides a way for people to efficiently save for their future without some future punitive situation where they're going to be facing an additional tax burden when they go to spend their own money.

As somebody mentioned—

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Sorry—thanks for that—but how many people living in poverty are you dealing with who have tax-free savings accounts?

[Brad Brain]

To answer the question specifically of how many people in poverty I am dealing with, it would be a handful. Typically my clients aren't the people your committee would be fully focused on. However, certainly I do have some people who are of limited means. I know one lady in particular who is almost petrified about touching her money for fear of losing her guaranteed income supplement. For people who do not have an abundance of resources to work with, the TFSA is a beautiful tool that allows them to be a little more self-sufficient.

[The Chair, Liberal, Bryan May]

Thank you very much, sir.

MP Sansoucy, you apparently want a bit of time.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair.

I would like to thank all the witnesses for their contribution to our committee.

Mr. Brain, I am very pleased to hear your views on the registered disability saving program. Having worked with individuals with a disability, and with their families, I would say this program needs to be improved. Thanks to improved health care, we are facing a new situation as compared to a few decades ago. Nowadays individuals with a disability can outlive their parents, which worries many families a great deal.

One solution would be to improve the registered disability savings plan. Right now it is underutilized because it is much too complicated.

Ms. Piller, you are quite right in saying that your contribution is valuable to our committee. We need to hear from the users of the various programs.

My question is for Ms. Morris. I would like to say something first—my colleagues would be surprised if I did not. You pointed out that your organization, the Canadian Association of Retired Persons, CARP, does not really know what a national poverty reduction strategy could be. I invite you to look at Bill C-245, which I introduced. It sets out the direction we could take.

You are right in saying that two thirds of the citizens we represent do not have a workplace pension plan. That is something we have to consider. I think all of our witnesses spoke today in particular about seniors. In our society, they are especially poor.

At the end of your presentation, you mentioned some interesting innovations that we should consider, as a committee looking at ways to reduce poverty. You said one way of reducing poverty among seniors is to focus on the abuse they suffer. You mentioned living wills. I would like to hear more about this please.

[Wanda Morris]

Thank you. I appreciate the question.

The magnitude of elder abuse can't be overstated. What's important to realize about elder abuse is that it's often hidden. If you compare decades, we're 20 years behind where we are in addressing violence against women. Violence against elders is a tremendous problem, because so often the senior is dependent on the people perpetrating the violence.

I mentioned that the most prevalent type of elder abuse is financial. It can happen in a number of ways. A senior can bring in an adult child to look after them, and then the adult child can almost extort the senior, take over assets—i.e., they're given money to buy groceries, and the change never comes back—and the senior becomes virtually a prisoner in their own home. One of the remedies to this is to make sure it gets reported. Often there is often a stigma with seniors, particularly because so much of this abuse is perpetrated by their own family. If, for example, personal support workers, letter carriers, hairdressers, or others who are interacting with the seniors are reporting potential issues of abuse, I think that would be a great first step.

Another thing we're looking for is specialized police forces. I realize this isn't a federal issue, but we're looking for task forces and training. Often when people come to a situation where there is a report of elder abuse, the prevalent stereotypes that we have of agism come into force. If a senior is complaining about something, for example, and their adult child says their mother's memory isn't as good as it should be and she's a little confused, often their testimony cannot be as persuasive as it might be if they were not elderly.

I know that the City of Toronto has recently piloted some specific training in their police force around elder abuse, and I think that should happen nationwide. Certainly we need to reach out. Elder abuse is particularly prevalent in certain cultural communities where there is a lot of risk. For example, individuals who have been sponsored to come to Canada, who perhaps don't speak the language and aren't aware of the resources available to them, are particularly vulnerable.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Okay, thank you.

I have no further questions, Mr. Chair.

[The Chair, Liberal, Bryan May]

Thank you.

Over to MP Sangha, please, for six minutes.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Thank you to everyone for coming and giving input.

Mr. Brain, you talked about the RRSP, the tax-free savings account, and other programs. You have worked in financial services for many years with other customers. While there are people who were unable to put money into the program and people who are unable to save the money, you also told us that half of the population of Canada are those who are living from paycheque to paycheque.

In this situation, what it is your advice to them? What are the solutions for your customers who are in such difficulties? Can they put money into the savings programs? What is the best course for these people? Please explain this to the committee.

[Brad Brain]

Thank you for the questions.

One of the things I had to do today was trim my remarks a bit to meet the time frame that was allowed for us. I don't know if I did a very good job of explaining what I meant by the idea of these increased payroll taxes having an unintended consequence.

One of the issues here is that everybody who contributes to the Canada Pension Plan is eligible for benefits. If what we want to do is address seniors poverty, then, as somebody mentioned, we have a pretty blunt instrument here. Even millionaires are going to get the Canada Pension Plan. But we're not going to be able to allow people of modest means to have that same access to it because they aren't contributing as much money. Where we're getting this unintended consequence is that we're asking people to pay higher payroll taxes now on this promise of a future benefit. If somebody is in dire straits right now and has pressing financial circumstances, then, given the choice, they probably would elect to deal with whatever the emergency is today, such as paying down credit cards, paying for health care costs or education funding, or even meeting the basic necessities of life.

What the higher premiums with the enhanced CPP are going to mean is that choice of how to best use the dollars that are going to be spent on the Canada Pension Plan contributions is removed from the individual. As another presenter mentioned, there's the assumption that the government knows the best way for people to use their own money. I would prefer that we had a situation where more flexibility is given for people to decide what their priorities are, including making sure that they can live within their means today and not take too much money off the table now to increase the Canada Pension Plan later on.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Thank you, Mr. Brain.

You said you assist and counsel people with diverse and difficult financial situations. Could you explain to the committee your experience regarding tackling this with the clients? Were they open to listening to you and discovering how to save money, or were there too many challenges in working with them? Are people discouraged by the recent measures put in place, or do they want to understand?

[Brad Brain]

That's a very interesting question. People have a lot of different approaches and attitudes towards money. Really, there's a wide range of attitudes, from people who want to delve right in and become as knowledgeable as possible to people who are very reluctant to do it.

To some, the idea of money and discussing money is a painful topic. It's almost like going to a dentist for a painful treatment; they'd prefer not to have that discussion in the first place. I really do think that's an unfortunate attitude. As somebody mentioned, the idea of where we are with financial literacy in the country is probably something that we could improve on, even going right back to school ages, which I think would make a lot of sense. I don't know that there's much formal education when it comes to financial literacy, so we're relying on a bit of a hodgepodge of various ways to get this information out to Canadians.

One of the things that was mentioned today is that there are probably some skills lacking in the financial advisory community. One of the things I find extremely interesting is that the term “financial planner” is actually something that is not regulated in any way. Basically, anybody can call themselves a financial planner. I think that's an unfortunate circumstance. To me, the level of professionalism needs to be raised in the industry. That's a great big topic in itself, but it's an issue that somebody could be in a completely unrelated field and call themselves a financial planner overnight. It doesn't make much sense.

It's a very big topic, how to increase financial literacy in the country. It would be nice to have a quick and easy solution to it, and I don't know that I have one, but raising the professional bar in the country is one area. The other is to look at some sort of financial literacy that goes right back to school-age kids.

[The Chair, Liberal, Bryan May]

Thank you very much, sir.

Now we'll go to MP Long.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

I think it's MP Tassi.

[The Chair, Liberal, Bryan May]

Sorry, over to MP Tassi.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thank you to each of you for your input today.

I would like to address my questions to you, Ms. Piller. I'm interested in the biggest challenges that people with disabilities face, which in effect results in them falling into poverty. In your opening statement, you talked about two challenges in particular: the issue of requalification and the problems that provides, as well as the issue of health care costs.

Can you expand on those two items for us, please?

[Gwendolyn Piller]

Regarding mental health disability, one of the problems that I have faced, and I know that other people have faced, is requalification for the disability tax credit. In that requalification, one of the things I have never done is take out an RDSP, because we could not find the information on what would happen if I didn't requalify for the disability tax credit.

With the disability tax credit, it actually does very little for someone who is living in poverty, because they're all non-refundable tax credits. Unless you have someone such as a spouse, a parent, or a caregiver to whom you can transfer the medical expenditures, there is no actual benefit to the person with the disability unless they have a high enough income to be paying taxes.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

What exactly are the costs incurred with respect to health care and this requalification as well as other things for people living with disabilities?

[Gwendolyn Piller]

Do you mean the cost incurred just for the requalification?

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Well, that first; yes.

[Gwendolyn Piller]

The cost of the requalification would be to have the doctors fill out the forms. Even though the government does pay the doctor to do that, they always charge the patient as well to fill out the forms. For the actual requalification, there is a cost for the doctors to do the forms.

On the health care, when you're on CPP disability and living in poverty, the only health care coverage you have is OHIP, so all your health care costs are out of pocket.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

What is the cost of that form to a patient not covered by OHIP—the form the doctor fills for the requalification on the mental health side?

[Gwendolyn Piller]

Depending on the psychiatrist you have, it could be anywhere between $50 and $200.