Human Resources Committee on Oct. 3rd, 2017

[Richard Shillington]

The enhanced Canada Pension Plan that was announced roughly 14 months ago, in June, is going to start collecting more contributions. Those will build up over time and will pay additional benefits on top of what the base Canada Pension Plan pays, but if you're a GIS recipient, it could, depending on your circumstances, wipe the GIS out almost totally or just make it not as good an investment. If it were a voluntary investment plan, you would be much better off investing somewhere else that didn't have the 50% back-end load. That's the basic point.

This was an issue that was part of the discussion between the provinces. Some provinces were not keen on the proposal as passed because of this issue. It's something that people knew about.

I'm not sure that the working income tax benefit is much of a remedy for this. I think the remedy is in the GIS. Changing the rules of the GIS exemption, that $3,500, as I would advocate, means probably a couple of billion dollars, or two and a half billion dollars, so it's significant money, but it would not just improve the circumstances, it would create more freedom. You wouldn't have this problem with RRSP withdrawals versus TFSAs.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

It's a little troubling. Are you saying that with this change the government brought in, the low-income seniors will have less money in their pockets and the government will save money?

[Richard Shillington]

Well, certainly at the time when a low-income person is working, they are going to be required to make additional contributions to a payroll tax, to an investment that is not a very good investment for them. One of the primary beneficiaries will be the people who administer the guaranteed income supplement, because they will have to spend less money than they would have otherwise.

I think the remedy is in dealing with the GIS clawback because of the other benefits of modifying the clawback: both the freedom and not having to deal with the RRSPs versus the TFSAs so much.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

I am new to this committee. When you mentioned the GIS clawback, you mentioned the fact that if you're a beneficiary of the GIS and you get additional revenue, the GIS is cut accordingly?

[Richard Shillington]

Yes, and for most seniors, by 50%. If you take $1,000 out of your RRSP, your GIS the next year will go down by $500. For some of them, it will go down by $750, and for some of them, because of the GIS top-up that the provinces administer, it will go down by $1,000. You will get no benefit whatsoever. Also, for some of those people, their rent will go up on top of that.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

We've all seen those cases in our ridings.

My second question will be for you, Madam Ziomecki. One thing struck me in your report. You mentioned that once a person has retired, the person will have a cash flow problem after 10 years. Can you elaborate a bit more? Normally when you plan your retirement, you feel you're good for a while. Why is there this 10-year debt wall, if I can put it that way?

[The Chair, Liberal, Bryan May]

Just a brief answer, please.

[Yvonne Ziomecki]

It usually is related to health problems as people age, let's say in the early 70s. They retire in their early to mid-60s. By the time they're in their mid-70s, some health problems hit. They have more requirements for help in doing things around the house and for nurses, etc.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Thank you.

[The Chair, Liberal, Bryan May]

MP Rachel Blaney, please, for three minutes.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you.

I'm going to come back to you, Wanda. The caregiver tax credit remains non-refundable. This means that only those who are paying tax will benefit. The poorest caregivers and those who have given up work completely to care for loved ones get no relief at all. Do you have any statistics on this information?

[Wanda Morris]

I don't have any off the top of my head, but let me provide that to the committee.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you. I would really appreciate that.

I also wanted to touch on national pharmacare. Canada is the only country with a universal health care system that doesn't have universal coverage for prescription drugs. CARP has been encouraging the federal government to be a leader in this process. We all saw the PBO report recently.

Can you share with us what the obstacle is to realizing this?

[Wanda Morris]

Essentially, a national pharmacare program would save significant dollars, but it's a bit of a political hill to climb because you're going to have to fund the taxes to pay for it. In many cases, individuals are now paying premiums through their companies or, through CARP plans, they are funding their extended medical that way. We're saying that you're going to save in all these places, but you have to pay more taxes in exchange. Looking at it holistically, it makes so much sense.

We polled our members. Our membership tends to skew a bit better educated and a bit more well off, but even many of our members are admitting to cutting out their medications. In particular, those who are under 65 are often making decisions not to fill medications, which then has significant health care costs down the road as they suffer from complications.

I think the business case is clear. We just need the political will.

[Rachel Blaney, NDP, North Island—Powell River, BC]

You also talked a bit about GIS, the challenges to accessing it, and how many people are not accessing it.

One of the things we've heard a lot about is that people are getting a letter in the mail saying that they may be eligible for GIS and are afraid that it actually means something bad, so I think there's a communication issue. The other thing we've dealt with in our constituency is in regard to people who are elderly and not well and have not submitted their taxes and all their forms on time. They're being cut off from GIS and then having to wait several months for it, and they're at risk of losing their homes.

I'm just wondering about this. When you talk about simplifying that process, how much of an impact would that really have?

[Wanda Morris]

We put far too much emphasis on financial literacy and consumers and not nearly enough on how we can make that process simpler, fair, and more accessible. I would really encourage the committee to look at what the U.K. does, where lower-income individuals—in fact, many individuals—don't file their own tax returns. They are automatically calculated for eligibility. That would be a great model for Canada to follow.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you.

[The Chair, Liberal, Bryan May]

Thank you very much.

I see the clock is at 5:01. We have about 15 minutes before the bells start. If there is desire for additional questions, I propose that each side take four minutes.

We'll start over at Madam Wong.

[Alice Wong, Conservative, Richmond Centre, BC]

There is one thing that really hits my heart heavily when I visit Vancouver East. There are a lot of seniors who are mentally affected who, surprisingly, do not get any government GIS or OAS because, number one, they didn't file, and number two, they didn't know how to do it.

One of the initiatives we started at the end of my term was to work with the cities and reputable organizations to authorize them to act on behalf of these seniors to help them fill out the forms, help them manage money so they can get the money, and then help them get housing rather than being homeless. This is an initiative I hope the current government will look into, because we need the cities to help us as well.

Seniors issues are very complex, and we need all three levels of government working on that. If you need more information.... Luckily, the government did not scrap my website, which is seniors.ca. It has a whole map of the nation, and you can click different provinces to see the different benefits and where to go. Please, don't scrap that.

[Richard Shillington]

I've done a lot of work on income tax and people not getting benefits. If you get the GIS numbers monthly from the federal government, you can see. It used to be that the number of people getting GIS dropped every July by 10% and recovered by September. That was people being kicked off because they had not filed their income tax. It gets covered. The data gets filled in, but can you imagine all of a sudden your GIS doesn't show up and you're living on that kind of income?

The other part is, to state the obvious, when you file a tax return and you are a low-income senior, you are not telling CRA anything they don't already know about you: this is what you got from OAS, and this is what you got from CPP. There might be a T5 from a bank, and that's it. CRA could send a completed form to a senior and say, “This is what we have on you from all the T4s. If it's accurate, sign it, and you're done”. This is kind of what they do with GIS now, thank goodness.

[Alice Wong, Conservative, Richmond Centre, BC]

The problem is that these seniors are homeless. You don't know where to send it.

Okay, I'm past the time. I'll turn it over to my colleagues.

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

I have a quick question for Lola, from Prince George. I had a similar situation in Langley. I was speaking at a senior resource centre and a senior came up to me. The roof of her mobile home had been leaking for about four years, and it was getting to the point where they were going to have to move out because they didn't have the money to maintain it, to build it...hot water tank and furnace. I could find no government or NGO that would help. I ended up funding it myself. We got community volunteers and put a new roof on so at least they could stay.

Are you aware of anything that would help struggling seniors who don't have a nest egg take care of the basic maintenance? In this situation, she would have become homeless if we hadn't helped. Are there any programs?

[Lola-Dawn Fennell]

Not that I am aware of. We have faced the same issues multiple times. Unfortunately, Prince George service clubs don't like to see me coming anymore, because I am usually coming with my hand out, saying, “I have another person with a leaky roof and their home is going to be condemned.”

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

Should that be a federal, provincial, municipal, or multi-level program?

[Lola-Dawn Fennell]

Probably multi-level.... I wish I could bring a particular client here who spouted off beautifully because all we had to offer her was the HAFI program, home adaptations for independence. She said, “What the—does this do for me when my roof is leaking? I don't need grab bars. I need a roof. Get me a roof.”