Human Resources Committee on Oct. 3rd, 2017

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

Thank you.

[Lola-Dawn Fennell]

It's very frustrating.

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

It is very frustrating.

Thank you.

Tammy, in your paper “Senior Poverty in Canada” you demonstrate that seniors are not keeping up with the current living standards. Can you tell us what some of the solutions are to this?

[Dr. Tammy Schirle]

I'll suggest that first we need better measurement.

I was fortunate to be part of Minister Duclos's Miami Herald efforts with the poverty strategy and got to attend that conference last week. Our first challenge is just having a good measure of poverty.

We see that seniors are not keeping up with the working-age population's living standards. The general measurement issue—I wouldn't even call it a concern—is that as the economy grows and people are better off over time, if seniors are saving to maintain their own standard of living from when they were working and to be included with their peers, they're always going to lag behind the next generation. That's a conversation to have in and of itself.

I think what we need more, now—and this is also thinking of Ms. Fennell's comments—is to develop a better measure of poverty that's very applicable to seniors specifically and that allows for regional differences in housing costs, in what is available at the provincial level, in in-kind benefits, in the differences between being in the north and being in the south, and these kinds of things.

These are some of the bigger issues.

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

As an MP who represents a rural riding with a lot of remote communities, I find that the challenges are significant, and transportation is a significant issue as well.

I'll follow up again with you, Tammy. We're looking at closing the gaps that exist in our current system. In your report, “The Pressing Question”, you stated that “[e]xpanding CPP for low earners risks making some Canadians pay for pension coverage they don’t need” and said that “extra contributions may reduce the living standards of low earners today for modest net rewards in retirement tomorrow”.

Can you tell us how to address the shortcoming?

[Dr. Tammy Schirle]

The big concern here is that when individuals while working are making contributions as low-income individuals, they're not going to reap the same rewards as a higher-income senior when they start to pick up their CPP. This was the interaction with the GIS that Richard was pointing to as well. What was done in negotiating with the provinces was to slightly raise the wage subsidy that comes with the working income tax benefit in order to balance this out.

In concept, I think this is a good idea. We're basically prepaying future pensions with today's tax dollars rather than passing that cost on to the next generation. I think this makes a lot of sense.

The problem, of course, is that our working income tax benefit has a very small base. If you work full time at the minimum wage, you are going to be ineligible for that support. You would be someone who is likely to end up using the GIS down the road.

Generally, I suggest moving away from the working income tax benefit and thinking about how to support that type of contribution to CPP now, or perhaps further expand the working income tax benefit so that more low-income workers will be eligible for the subsidy.

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

Thank you.

I'm going to move on to Wanda. I'm hoping I have enough time to get some of this; I want to ask a question about pensions.

CARP has a current campaign entitled “Put Pensioners First”. Right now we are seeing what happens when large corporations fail—Sears for example. They use Canada's inadequate bankruptcy laws to take the money meant for the employees' pensions to pay off CEOs, banks, and investors instead. In my opinion, this is legalized theft, and it needs to be stopped.

Can you tell us what CARP is proposing?

[The Chair, Liberal, Bryan May]

You have about one minute.

[Wanda Morris]

We're proposing something called “super-priority” for pensions. Frankly, I think it's egregious that our corporations would, as Sears has done, sell off assets, make a dividend of $500 million to primarily a U.S. parent, and leave the pension plan underfunded by $300 million. What's even worse is that our laws allow this to happen.

What CARP is saying is that in the event of a bankruptcy or insolvency, pensioners should be at the front of the line for any unfunded liability in a pension plan. I understand that others have security, but when we look at the reality, banks have other customers. A small business creditor may be owed for 30, 60, 90, or 180 days of work. Pensioners don't typically have other pensions, and they can be owed decades' worth of deferred compensation. I therefore think the most critical ones to be covered in the event of a bankruptcy or insolvency are pensioners. That's why we are strongly recommending pensioners be put at the front of the line for unfunded liabilities.

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

Thank you.

[The Chair, Liberal, Bryan May]

Now we go over to MP Robillard.

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

Thank you, Mr. Chair.

The committee is meeting to study how the government can support vulnerable seniors today while preparing for the diverse and growing seniors' population of tomorrow.

Can you tell us how the issues you are facing are similar to those elsewhere in the country, specifically, in urban centres?

What solutions could the federal government deliver to address the issues that come to your attention?

[The Chair, Liberal, Bryan May]

To whom are you asking the question?

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

It's to anybody.

[Wanda Morris]

The best way to protect vulnerable seniors is not to have any in the first place. If we can take steps right now to improve financial security and health for individuals to make sure that they reach retirement healthy and financially secure, that will greatly improve how things happen in the future—for example, making sure that we have affordable housing for everybody; that we have walkable cities; that we invest in world-class transit so that people can age in place; that we create building codes so that seniors don't have to relocate because they aren't able to age in their homes, but instead homes all have walk-in showers, corridors that are wide enough for strollers and wheelchairs, and for larger homes, large closets, so that elevators can be easily installed in later life.

We need to look at other programs, and certainly at the CPP enhancements. While CARP is very pleased that something has happened for CPP, it seems that more could be done; particularly the CPP coverage for our lowest-income seniors is something we could address.

We can take a look at incenting individuals to stay in the workforce longer. When people are close to retirement, often they're wondering, “Should I try to save more? Should I try to spend less? Should I work longer?”, when the only effective alternative is to work longer. Yet our CPP and OAS don't increase past age 70, and there are disincentives to work past age 65 for CPP, unless you aren't a full contributor. If somebody isn't pulling down RRIF income from an RRSP they've accumulated and is still working, there's a double-whammy of tax that we need to address.

I think there is fundamental legislation that we can put in place—certainly pension protection, certainly better investor protection. It makes no sense that Canadian investors pay some of the highest fees in the world.

Those are all fundamental changes that we could make to help Canadians reach retirement with more security.

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

Let's discuss the age pyramid among seniors and the age breakdown. Consider a pyramid that starts at 65 years of age and goes all the way up to 85 or 90 years of age, or even older, at the top.

Can you describe the age pyramid for city-dwelling seniors? What's the breakdown by age?

More importantly, can you describe how their needs and issues vary as you move towards the top of the pyramid?

What would you recommend the federal government do in response?

[Wanda Morris]

One thing I think is critical is that we start to recognize that seniors aren't a homogenous group. There's a tremendous difference between young seniors at, say, 65 to 74, to middle seniors, to our most frail and elderly seniors. By looking at them as one group, we really miss the nuances of policy that are required. That's one thing we should consider separately.

A significant way that we could help some of our older seniors who are vulnerable is by making investments in assisted living. In B.C. there was a significant survey done of long-term care homes, and it uncovered that fully 40% of people in long-term care don't want to be there. That's consistent with the findings of CIHI, the Canadian Institute for Health Information, which found that about a third of people in long-term care don't need to be there, but family members want their elderly relatives to be in care.

What's happening is that people are losing their quality of life. They're going into care facilities that really aren't geared to giving them the stimulation and support they need because there are no assisted living alternatives. That's certainly something we can do.

We also could do much more with creative support in the communities. Right now, I think we are far too risk-averse and are not recognizing that seniors want to and should be allowed to take risks. People don't need to be pain-free, but they want to be living in their homes and coping with risk. They would rather do that than be 100% secure and be in a long-term care facility.

On a larger scale, we often build care facilities in places where we can make sure that they get fire engine access. They are thus in a brand new area far away from services, inaccessible to transit, but boy, if they had a fire we could get there quickly.

Instead, what seniors are telling us they want is to be right in the thick of things. They want to be near facilities and grocery stores and movie theatres.

Similarly, there is a huge, I believe, interest and need in communities to offer alternative types of care facilities—homes that could be upgraded to provide care for maybe four or five or six seniors. But by the time we ask those homeowners to install, for example, fireproof curtains, the cost has become so excessive that they're not able to do it.

I think we have to balance the costs that are involved against the benefits to seniors.

[The Chair, Liberal, Bryan May]

Thank you.

We go over to MP Ruimy, please.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Thank you very much, everybody, for coming today.

It's a tough one, there's no question about it. The reason we're doing a national seniors strategy is exactly that. I don't think there's a question as to whether we are or are not going to do one. I think we are doing one; that's the whole point of this.

Lola, I just want to say that I come across the exact same thing in my riding with seniors who are struggling. They are not seniors who own homes, which to me is a problem. We tend to focus on people who have home ownership. There are many seniors who don't, who are paying a great amount of their money to rent. Tying this to a national housing strategy, I will say that if seniors were able to have an affordable home, they would be able to have a bit more money in their pockets.

One thing that concerns me is this. I'm a new MP and I see people coming in.... This is not something that has just popped up; people have been living like this for a long time. Seniors in their 70s.... We talked about CPP at 65 or 67. It really doesn't make a difference at this point, because they've already been living like this.

There are two things going on, then: how do we take care of our seniors now; and what's happening with the people who will become seniors in the next 10 years? Are they improving their situation?

I guess, Tammy, I want to direct my question to you. What does the picture look like for people who will become seniors in 10 years? Is it better? Are they more educated? Are they better prepared for retirement?

[Dr. Tammy Schirle]

The short answer is yes. Things have changed a lot, and I think the biggest changes here are really for women. Women have gained much better access to independent incomes and to having pensions of their own. These types of resources are more clearly available to them.

Just to pick up on some of the things that have been said here, though, I think part of what has become more difficult is the complexity of what they're entering—trying to navigate that system. That's where, as a few people have pointed out, we really need feet on the ground.

I think of my own mom moving into retirement, very humbly. She has the benefit of having a daughter who has read the CPP act and the OAS act and can work this out for her, but other people need that person to come and see, to work through things with them.

That said, on average seniors are much better off today than they were 50 years ago. I think we could imagine this continuing as we move forward, both in terms of health and retirement income and the pensions that will be there. People are having to rethink how they think about pensions and retirement income for generation X and subsequent generations, but it's just a different picture rather than necessarily a worse picture.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Thank you.

When we're talking about money, the challenge is that it's not just money. When we look at seniors who are vulnerable—and vulnerable to theft and fraud....

Yvonne, do you in your HomEquity Bank area come across fraud? If you do, how frequently do you see it? Is that a predominant issue for seniors?

[Yvonne Ziomecki]

We do see it; it's not predominant, but there's a lot of abuse that we see. We would see financial abuse. If you are lucky enough to be a senior homeowner and you have accumulated a lot of equity in your home, sometimes you want to take advantage of it and better your retirement, but sometimes there are other people who want to get access to that money for themselves.

At the end of a process of getting our product, we ask everyone to see an independent lawyer and get independent legal advice. Occasionally we get a call from the lawyer saying that their client showed up with a super-friendly family member and that the lawyer has concerns about undue influence and is not comfortable proceeding with a product.

We also have clients calling in to access additional funds. They tell us that they won a lottery and they need to make a small deposit payment to access the funds. Our call centre staff, our servicing staff, is very well trained to identify these issues and also to report them to authorities as required.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Thank you.

Lola, is there any in your neck of the woods?

[Lola-Dawn Fennell]

We're certainly seeing more seniors scammed all the time; scammers are getting smarter.

We're also seeing more financial abuse from younger family members. When I first started this job a decade ago, that happened once in a while; now it's commonplace.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Wanda, how about you? Are you seeing a lot of this happening?