Thank you very much.
I'd like to start off by talking about the CPP. I am commending this government for the work it's doing with the provinces to increase the CPP that will be payable. CARP thinks it's an important first step but not enough. We really would like to see the CPP doubled.
If we take a look at some of the statistics about the next generation of seniors, even those who are in pre-retirement, we know from a Broadbent Institute study that the mean retirement assets of somebody 55 to 64 is less than $4,000. Clearly we are heading for a retirement crisis. Two-thirds of working Canadians have no workplace pension, and that rises to three-quarters when we look at 25- to 34-year-olds. So we need to address issues with senior poverty not only now but also as it's coming forward.
With respect to CPP, I also would encourage the committee to look at raising the threshold of CPP contributions. Right now we do have a situation where very low-income individuals are required to make contributions to CPP on earnings above $3,500. That could certainly be revisited.
I find myself agreeing very much with Mr. Brain's comments on the GIS. I think we have created a system where we have a misalignment between our goals and the various clawbacks and treatments of GIS. Imagine the disincentive of a 50% tax rate. We claw back OAS at 15%. Why are we using a 50% clawback rate on GIS? We would certainly support a reduction in the clawback rate, as well as an increase to the limit of earnings that individuals are able to make before they lose their GIS.
I'd like to speak briefly to the proposal that was made, the election promise, about a cost index for seniors specific to the types of things that seniors buy. What we hear from so many of our members are concerns about living on a fixed income with very low opportunities to make a return from their investments, few remedies available to them in terms of increasing their assets, and the hardship they face when there are spikes in some of the services that they need to pay for. It's particularly acute for seniors who are not homeowners. What we're finding is that many of them are simply unable to continue to live in the communities where they have lived most of their life, and are often going into rural settings where the cost of housing is cheaper, but then facing impacts like social isolation and a lack of accessibility to medical support.
I'd also like to talk about investor protection. This is something that I think is contributing very much to seniors living in poverty now who may not have previously done so, or might have lived well earlier. First, one of the things we know is that individuals do not have high levels of financial literacy. We see that playing out in this field in particular by very low-income earners being encouraged to contribute to an RRSP as their investment vehicle of choice, which for a low-income earner makes no sense. They're getting very little tax benefit at the time of the contribution and then when they cash in the RRSP or the RRIF, it's resulting in a direct clawback of their GIS. They're really paying a price for a system that doesn't have fully trained advisers. Canadians pay some of the highest mutual fund fees in the world at 2.5% to 3%, and that's a significant headwind if we want to empower Canadians to save for retirement and be self-sufficient.
I'll speak briefly about RRIFs. I'd like to acknowledge the positive changes that were made to mandatory RRIF withdrawals in 2014, and implemented in 2015. But they still don't go far enough. While I recognize that a withdrawal from a RRIF doesn't mean that a person has to spend it, anybody who's studied behaviour economics knows that there is a correlation. What we find is that with seniors living longer with low rates of return, increasing what I call the longevity risk, there's an undue risk that seniors will outlive their savings. It's a significant concern among our members. Almost 50% of them are concerned that they will outlive their savings.
Finally, the committee asked for innovative responses. I'd like to touch on something completely different, which is the issue of elder abuse. We know that homelessness among the elderly is rising and that the most prevalent type of elder abuse is financial elder abuse. We're particularly seeing abuses rising around powers of attorney.
I believe a solution such as mandatory reporting of elder abuse would be a significant way to address elder poverty. There are some estimates that up to 10% of Ontario seniors are abused.