Human Resources Committee on Oct. 3rd, 2017

[Wanda Morris]

The type of thing we see is not what happens illegally but what happens legally, and particularly on the investor front, where we have financial advisers calling themselves things such as “seniors specialists” or “seniors advisers” and ending up recommending and putting clients into highly illiquid or highly risky investments and encouraging them to take out leverage to invest, offering them free lunches and then pressuring them to invest.

That is one of our biggest concerns; it can make a senior who is on track to a fine retirement end up financially destitute. The health impacts on somebody who loses their financial security are incredibly significant.

[The Chair, Liberal, Bryan May]

Now for six minutes we have MP Wong.

[Alice Wong, Conservative, Richmond Centre, BC]

I'm glad we brought up the issue of elder abuse, especially financial abuse. That was exactly the question I asked of the minister during question period.

When I was the minister for seniors, I travelled to all of the territories and provinces. I listened to seniors and advocacy groups and even went all the way to the north. I went to first nations reserves and listened to the concerns first nations had about health care and their inability to access health care in their native language. I definitely agree with all of the findings that our experts here have reported to us.

There are many issues I'd like to comment on, but I'd like to start by adding to my colleague's comments on elder abuse.

We have identified several different kinds of abusers, and unfortunately some of the abusers can be from a senior's own family, such as someone from a younger generation. They might say, sooner or later all of your property will be mine, so why can't I have it earlier? They use different ways to pressure their older parents or even grandparents to let go of their property.

The minute a senior signs off is the minute they get kicked out. Poor seniors say that the minute they sign over their property or whatever wealth they have, they are out the door. I've heard terrible stories about this.

I congratulate CARP for doing a great job working with me in former years to make sure that elder abuse is not overlooked.

My question to the panel, for whoever wants to comment on it, is: what more can be done to ensure that vulnerable seniors are better protected from financial abuse? I specifically want to ask what the role of education and outreach is.

[Yvonne Ziomecki]

If I may, I'll go first.

It sounds really simple, but it's not so simple. I think more education is absolutely required, but it's about more than just saying that we need education. We need to tell people what needs to be done and teach people how to have these conversations in their homes.

My parents live in a different country, Poland. They're 71 and 73. I work in the business, and I have a very difficult time holding conversations with them about their financial situation. I don't know how much money they have or who their trusted advisers are.

In terms of an education program, I think we also need to guide people on how to have these discussions. We need to have community programs so that people don't feel isolated at home and so that they know there are additional people they can talk to. We need to tell people who to talk to if they're nervous or if something is going on—to go to the bank, a priest, or a doctor, for instance. They need to know what the first line of defence is.

It's not just a question of telling people that they need to have these conversations. They need to have practical guidelines or “go to” strategies so that they know what to do if a nephew or a grandson shows up and pressures them to write a cheque for $10,000. They need to be prepared to say, “I don't know where my chequebook is. Can you come back next week?” Then in the meantime they can remedy the situation.

This education can occur maybe through workshops in libraries or other supports in smaller communities. When someone you're depending on is pressuring you for money, it's really hard to say no, because they will also threaten you with withholding visits or not helping with basic tasks. I'm sure you see this all the time.

We're in a business in which all of our clients have homes, but I don't think this is an issue of whether you have a home or not. If you have a home and you have a lot of equity, there may be many people who are interested in your money, but even if you have very little money, there may still be people who will want your last penny.

I think very practical programs, then, would make most sense.

[Alice Wong, Conservative, Richmond Centre, BC]

Related to that, I heard several of you mention financial literacy, not only for those who are seniors now but for the future seniors who are planning for their futures.

Again I'd like to relate to my experience. Workshops were very useful. Also useful is training for bank tellers, so that if they identify any unusual activities from a senior's account, they are authorized to relay the information to the authorities. Of course, it's very complex: it involves privacy; it involves a lot of other things.

This is open to all the panellists. It's about financial literacy. Even for the sake of very little money, there are abusers elsewhere who just call and say, “Your grandson is in trouble”, or something like that.

How do we usually deal with that? I need to listen more.

[The Chair, Liberal, Bryan May]

Give a brief answer, please.

[Richard Shillington]

Here are two very quick comments.

I get irritated when the financial literacy thing is that we have to make people smarter. There's an attitude like that in financial literacy often.

When I wrote the report on financial literacy for the task force, my take was that we should make the system simple enough that an average person can make reasonable decisions and be treated fairly.

You mentioned that bank tellers might be “authorized”; I think they should be “required”. Bank tellers are required to report to federal agencies when they see $10,000 moving around; or when there's some evidence or suspicion of financial money laundering, they're required to do so. Why couldn't we require them to do so if they look at something that has some level of suspicion?

Then I don't know who they report to, but.... There are privacy issues, and they might be quite legitimate, but I think you can require that when they see something suspicious they must bring in somebody who is going to look at it and say whether it's okay or not.

[The Chair, Liberal, Bryan May]

Now for six minutes we go to MP Long.

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

Thank you, Mr. Chair, and thank you to our presenters this afternoon. These are very important presentations.

I certainly will say this: that one group who, even back when I was campaigning, certainly screamed loud and often and were looking for help was our seniors. It's very important that we're doing this study.

Mr. Shillington, the first question I have is for you. Do you think the government should “means test” seniors benefits?

[Richard Shillington]

Do you mean do an asset test?

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

Yes.

[Richard Shillington]

No.

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

You don't think we should?

[Richard Shillington]

I'm a statistician; I do this as.... I was paid once by a maritime province to work out the assets of people who get GIS. I accessed StatsCan data, and you could do it. You could say that we are not going to pay GIS to somebody who lives in a $500,000 or an $800,000 house.

To do that you're going to have to collect that information and then train auditors, who are going to make sure that all of that asset information is accurate for the million and a half GIS recipients.

How many of them are sitting on substantial assets but have no income? I just don't think it's worth the effort to collect all that—ask that information, hire auditors, and then of course set up a bunch of rules such that people start hiding assets: “I can get a GIS if I sell my house to my children now.”

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

What about income testing?

[Richard Shillington]

Of course you should income-test GIS.

For OAS we have an income test now; the clawback starts at around $75,000. We could talk about how you might want to play with it.

For CPP there is no income testing.

I will make the comment that we spend about $10 billion to $11 billion a year on GIS. We spend $35 billion to $40 billion a year on OAS. We spend about $60 billion a year on tax assistance for RRSPs and pensions. For every dollar we spend on low-income seniors, we spend something like $7 on high-income seniors.

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

Tammy, can you give me your opinion on that?

[Dr. Tammy Schirle]

I think there is a good argument to be made for bringing together the various programs we have and better income-testing them. We offer large demogrants to people who are earning a lot of money, just because they've hit 65. I think the average Canadian probably wants to question that. Politically, I realize it's very difficult.

On asset testing, what I would be very concerned about is not only compliance costs and the shifting of assets, but also that seniors need an opportunity to smooth out their income fluctuations. Things such as utility bills can jump month to month, so they need to have some buffer to work with over their retirement period to be able to smooth payments over time.

It's really self-insuring. This requires at least some level of assets; a move towards asset testing makes it very difficult.

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

Thank you for those answers.

The next question I have is for Tammy and Wanda. Our government has committed to the largest and longest investment in public housing in the history of Canada. Can you give me your opinions and comments on how you would model that rolling forward?

Let's start with Wanda.

[Wanda Morris]

One of the things I mentioned is that housing is very much a seniors issue, but what we hear anecdotally is that seniors have issues accessing housing, and that agencies will often prefer families. Even if there's a quota for so many individuals to have the housing for seniors, that will be violated, so I would say that one of the first things is to enforce what we decide to plan out.

When it comes to housing, there are very much two questions that answer each other. One is, how do we make housing affordable? The other one is, how do we deal with increasing social isolation? We need models that allow people to live in a community, but a small community. For example, after five years, our Barrie chapter has finally secured financing and land to do a test co-house for four people—with one kitchen—so they can live together. I think these are the kinds of innovative models that will solve both the housing and the social issues and will allow people to look after themselves.

I also encourage the idea that we increment rather than simply deploy. For example, rather than building masses of houses and just giving them over, we could look at things like rental allowances, subsidies, and things that help people take advantage of what they already have and give them the little bit extra they need to get to their goals.

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

Thank you.

Tammy, can you give me your opinion on that?

[Dr. Tammy Schirle]

Most economists will always suggest offering cash rather than in-kind transfers. It's the most efficient way to do things. It will help seniors find what they prefer and also what suits them best, given the range of needs out there.

Where public policy steps in is in looking for those market failures. Where is that housing simply not available, not safe, and not accessible? That, I think, is where the priorities would be for public housing.

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

Thank you.

[The Chair, Liberal, Bryan May]

Now, for five minutes, we have MP Steven Blaney.

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

Thank you, Mr. Chair.

Thanks to all of you for being here.

I will begin with you, Mr. Shillington. You are a statistician who co-authored a paper for the Institute for Research on Public Policy in which you talked about the Canada Pension Plan. The Liberal government has changed the rules. They've expanded the GIS, and you mentioned that it would have negative impacts.

If there's something I'm really sensitive about, it's the most vulnerable elderly. Can you expand on the impact on those low-income seniors of the changes the Liberals have made to the Canada Pension Plan?