Human Resources Committee on Oct. 5th, 2017

[The Chair, Liberal, Bryan May]

I call the meeting to order.

Welcome, everybody. Thank you all for being here today.

Pursuant to Standing Order 108(2), the motion adopted by the committee on Thursday, May 4, 2017, the committee is resuming its study of advancing inclusion and quality of life for Canadian seniors.

Today is the second of three panels that will be held on the subject of income security for vulnerable seniors. Today I see that we have a very full panel, so we'll get right to it.

I'll introduce everybody first. As individuals, we have Charles M. Beach, professor emeritus of the economics department at Queen's University. Also appearing as an individual, we have Bonnie-Jeanne MacDonald, an actuary and senior research fellow with the Ted Rogers School of Management at Ryerson University. From the Canadian Union of Public Employees, we have Mark Janson, who is the senior pensions officer with the national office. From the National Association of Federal Retirees, we have Jean-Guy Soulière, the president, and Sayward Montague, the director of advocacy. From the Office of the Seniors Advocate of British Columbia, we have Isobel Mackenzie, the seniors advocate.

Welcome to all of you. We'll ask you to keep your opening statements to seven minutes because we have such a large group today.

We will start off today with Mr. Beach. The next seven minutes are yours, sir.

[Professor Charles M. Beach, Professor Emeritus, Economics Department, Queen's University, As an Individual]

Thank you very much for inviting me.

I'll be following quite closely a written set of comments that I provided.

Page 2 of my comments says I am an economist, so I am going to focus my remarks on what I view as economic challenges. The topic is very broad, but I'll have to focus on that.

On page 3, starting at “Economic Challenges”, I identify six different points in particular.

First is that the aging of the population, increased longevity, and the oncoming tidal wave of retirements lead to a growing elderly dependency ratio, slower economic growth, increased fiscal burden for governments, and a greater retirement income risk for seniors. This has received a lot of the public attention in the media, so I'm not going to focus on that in my remarks. A lot has been said about it already.

Second, what I do want to emphasize, though, is that it's not just greater longevity; increased longevity is coming with a growing number of healthy years. This provides an opportunity and a challenge to enable people to work longer if they wish to. You can see the figures there of seniors' labour force participation rates for Canada for groups ages 55 and over. They were increasing until the mid-1990s. That was the “Freedom 55” period. Since then, they have been going up quite substantially.

This means we need to get incentives right and focus on flexibility, choice, and reducing barriers to entry for people who do wish to work. This isn't new to me. This is a major theme of the federal expert panel report that came out in 2008. If you haven't read it, I definitely recommend it.

This growing longevity of healthy years provides opportunities for seniors to make greater use of the gig economy: more flexible work hours, self-employment options, and technical advances, medical and otherwise, for things like mobility, eyesight, and hearing. It's fortuitous that people are working longer now, as opposed to 20 years ago, when there is much greater opportunity for fostering and accommodating it.

This is such a major point that a major special issue of The Economist last July—and I can give you specifics if you want them—identifies the need to think in terms of a whole new stage in life. We can think of them as early seniors, or what they call “owls”—“older, working less, and still earning”. If you want to complete the idea of highlighting the point that seniors are not a homogeneous group, you have the healthy people who are continuing to work like me—I'm a senior—and you have those who do have health problems. I might suggest complementing the idea of “owls” with later seniors called “elfs”, as in “elder folks needing support”. The support could be just a private pension, but it could also be support from the family, OAS, GIS, or whatever. The point is that seniors are not a homogeneous group. We have an increasing group who are really quite healthy, and the other group, who are living longer and for whom health and quality-of-life concerns are very important.

Third, median real incomes—“real” meaning adjusted for inflation—of seniors have advanced, but only slowly, since the early 1990s. Some numbers are given there in my comments. One of the main reasons they haven't advanced all that fast is that the median total incomes for adults as a whole have advanced even more slowly. The latter have gone up about 13% or 14% over this period, and for seniors they've gone up about twice that. However, there is a growing concern when you combine the rather slow growth of median earnings of seniors with the run-up of pharmacare costs, which are just going to continue increasing.

Fourth, low-income rates among seniors have risen considerably since the mid-1990s. That's Statistics Canada's way of saying “poverty rates”. Numbers are provided at the top of page 5 of my comments.

They decreased dramatically between the 1970s and the 1990s because of new things brought in, such as the CPP and things like that. Since then, they've been inching up, so now it's about the same as for people as a whole in the economy. There are a number of reasons we could talk about when time allows, but you should keep in mind that the low-income measure StatsCan uses is a relative measure of poverty: it's those with income below one-half of median income. Basically, what this says is not that the real median incomes of seniors are slipping; it's that they're not participating in the rising earnings elsewhere in the economy.

Point five is that in the long run, fallen age-earnings profiles will likely reduce the effectiveness of the CPP and QPP and will put a greater burden on OAS and the GIS.

Economists refer to an age-earnings profile. You start off earning relatively little. As you get older, it peaks around age 45 to 54 and then tails off a bit. What was found is that between about 1980 and 2000 the real income of the younger group fell by about 20%, and it hasn't gone up. Very tentative results for Canada and the United States suggest that they haven't been making up for it by growing it faster later in their careers. The whole age-earnings profile has shifted down. Since a major source of income for retirees and seniors is CPP or QPP, which is based on your earnings career, we should expect that pillar of retirement support to weaken and more weight to fall on OAS and GIS.

Do I have time for my sixth point?

[The Chair, Liberal, Bryan May]

Hopefully, we'll get to it through questions.

[Prof. Charles M. Beach]

Okay. Very good.

[The Chair, Liberal, Bryan May]

Thank you very much, sir.

Up next we have Bonnie-Jeanne MacDonald, actuary and senior research fellow with the Ted Rogers School of Management, Ryerson University, for seven minutes.

[Dr. Bonnie-Jeanne MacDonald, Actuary and Senior Research Fellow, Ted Rogers School of Management, Ryerson University, As an Individual]

Thank you, Brian.

Just to broaden that a bit, at Ryerson I'm actually with the National Institute on Ageing as well.

I've been doing research for quite a long time. I always find it very surprising that when we look at retirement income security for Canadian seniors, we always look at age 65, but most 65-year-old Canadians who don't have enough money to sustain their living standards do what the rest of Canadians do: either they go back to work or they curb their spending. However, there is a crisis, and the real crisis comes when people develop chronic health conditions at more advanced ages. Once you develop a chronic health condition, you don't have the option to go back to work and you cannot curb spending because the associated costs are not voluntary costs: they're fixed costs, and they cannot be postponed.

Throughout time and around the world, that is where family would step in. Up until now in Canada, when seniors became frail and elderly and developed chronic health conditions, families stepped in to support the seniors in their household in their daily household needs and their daily care needs. Unfortunately, in Canada, this will not continue into the future. One reason is simply that baby boomers did not have children; the other is that mobility has increased in Canada substantially, and therefore children don't live near enough to their parents to help in any feasible way on a daily basis.

Somebody is going to have to pay these for costs, and they're going to be enormous. If seniors can't afford to pay for these services themselves and we want to help these vulnerable seniors, then somebody is going to have to pay. If it's not the seniors themselves, it's going to be a shrinking workforce of workers who are already supporting the economy and are already paying for our social programs.

The difficulty of understanding this absolute truth that we know is going to be happening in the next decade is that it's not just a complicated system. The retirement income system in Canada is not just complicated and it's not just about rules, formulas, and numbers. It's actually what we call, in the sciences, a complex system, because it's made up of real people and it's made up of components that are connected and interdependent, and they adapt and evolve. Nevertheless, I've worked for the last dozen years independently between government, academia, and industry, and I can tell you with absolute certainty that there are huge disconnects in the system.

I can also tell you with absolute certainty that there are also incredible areas of synergy between the three, and if we can leverage and identify those synergies, we can create extremely effective, viable, valuable solutions that will substantially help Canadian seniors in their well-being today as well as tomorrow.

In my mind, a valuable solution has to satisfy three criteria. The first is that a valuable solution has to be what seniors want; second, a valuable solution has to be what seniors actually need; and third, a valuable solution cannot pass financial burdens on to a shrinking workforce.

Fortunately, solutions do exist. The first solution is basically to allow Canadians seniors to have the money they need when they need it. The way we could do this at a federal level is to integrate in the Canadian registered retirement savings plan an option for Canadian seniors to take a portion of their savings and put it into a pool. Then, basically, with the other Canadian seniors, this pool would pay out a guaranteed income for those among them who live past age 85, the time at which they will develop chronic health conditions.

That is called “longevity insurance”. Longevity insurance is extremely popular and very successful around the world. It's completely absent in Canada. This solution satisfies my three criteria: it gives seniors what they want, it gives seniors what they need, and it does not transfer any financial burden onto Canadians. In fact, it will save us an incredible amount of money.

I recently presented this idea to leading pension policy thinkers in Canada. It was met with unanimous support, and it's soon going to be coming out in a C.D. Howe Institute public policy report.

A second solution is that we want to try to preserve the invaluable services being provided by the family for Canadian seniors, because we know these costs are enormous. Fortunately, right now 70% of care for seniors is being done from within the family. Despite the changes in our culture, we can still preserve this practice. The way we do that is by paying informal caregivers. Again, this solution has been implemented with amazing success around the world, in the Netherlands and in Germany, and I'm currently partnering with provinces across Canada and researchers to explore this solution.

Again, it's giving seniors what they want, it's giving them what they need, and it will save us a ton of money.

As Victor Hugo said, “Nothing is more powerful than an idea whose time has come.” If we can leverage on the synergies between academia, industry, and government, as well as learn from the experiences of other countries, it will be very effective in creating viable and valuable solutions that will substantially improve the well-being of Canadian seniors. It will help them get what they want and get what they need without transferring financial burdens onto Canadians—the younger Canadians, part of what will be a shrinking workforce.

Unfortunately, the big “but” is that the effectiveness of all these solutions is time-limited. If you don't do it now, there's not enough time to make these solutions work. I implore you: the time to implement powerful solutions is now, and you are the people to do it.

Thank you very much.

[The Chair, Liberal, Bryan May]

Thank you very much. You were well within time, and we appreciate that.

From the Canadian Union of Public Employees, we have Mr. Mark Janson, senior pensions officer, national office.

Thank you very much. The next seven minutes are yours, sir.

[Mark Janson, Senior Pensions Officer, National Office, Canadian Union of Public Employees]

Thank you, Chair, and thank you to the committee for having me today.

The Canadian Union of Public Employees is the largest trade union in the country. We represent 650,000 workers across the country, mostly in the public sector. Pensions and retirement security are issues we take very seriously. I'm a pension specialist with CUPE, so I'll be focusing on the income question before you today.

We see the same things everyone sees. We see that most Canadian workers don't have a pension at work and that the few who do are seeing the quality of those pensions under pressure from employers. We see that individualized savings systems such as the RSP and the TFSA predominantly benefit workers at the higher-income, higher-wealth end of the spectrum, and that as Richard Shillington told you yesterday, Canadians who don't have a pension at work—most Canadians—have wholly insufficient retirement savings.

This is why one in three seniors in Canada receives the guaranteed income supplement that keeps most, but not all, Canadian seniors out of poverty. We've actually seen Canadian senior poverty levels ticking up slowly, steadily, since the mid-1990s. The major attacks we've seen on pension plans have been relatively recent, in the last couple of decades. It takes a long time for that to work itself through the system and to be seen on the ground in future seniors, but the indications we're getting from research by academics and statisticians is that significant portions of the boomer generation have not saved enough for retirement. They are looking at a big drop in living standards when they retire, and the problem is projected to get worse for future generations.

This is why CUPE and the labour movement in Canada were so supportive of the government's successful expansion of the Canada Pension Plan in the deal that you reached last year. We recognize that this was not an easy thing to do, so we applaud you for doing it. We know it could have gone much further. We were essentially pushing for a doubling of CPP benefits; we got an increase of about one-third in CPP benefits. Much more could have been done there, but we applaud the work that was done. We should continue this critical campaign to improve the Canada Pension Plan and improve public pension plans in Canada.

A major shortcoming of the CPP expansion deal in the legislation that implemented that deal, Bill C-26, was the lack of child rearing and disability dropout provisions. Basically, a CPP benefit is a function of your lifetime earnings over your career, so if you have a period of zero or low earnings while you're working, that's going to pull your CPP benefits down someday. Governments realize this, and they realize there are some inequities in what we call the dropout provisions in the CPP. There's been a long-standing dropout for disabilities, meaning that if you were disabled and away from the workforce, those years were dropped from your CPP calculation and you were not penalized because you were unable to work. The same provision existed for decades for child rearing if you were at home raising a small child.

These provisions had long been part of the CPP, so we were quite frankly shocked to see that they weren't included in the CPP expansion legislation. They're going to continue to exist in the CPP we've always known, but they're not going to exist in the new benefits that are going to sit on top.

We don't think there's a rationale for this situation. We flagged it for government when Bill C-26 was tabled, but the government passed the legislation unamended and essentially punted this issue to the triennial review of CPP, 2016 to 2018. We urge the government to work with the provinces to fix this issue before these changes start to take effect.

The child-rearing dropout predominantly impacts female seniors. It's mostly women who take up that provision, and disabled seniors, obviously, people who have had a disability in their working career. These are among the most vulnerable future seniors in Canada, and they don't need more challenges in retirement. This is an easy fix. It's not a costly item, and we urge you to fix it.

I was going to make a point about how the old age security program increases over time, but I know Richard Shillington made it very eloquently on Tuesday. It's indexed to prices, not to wages. The chief actuary predicts that wages are going to go up faster than prices. He thinks prices are going to go up by 2% a year and wages are going to up by about 3%, so the old age security system will essentially be falling behind the standard of living by a per cent in every year that this situation is not remedied.

Other OECD countries peg their social security system to wages as well. There are different ways of doing this. This is a long-term problem for old age security. It's been around for a long time. If it's not fixed, we're going to see that program continue to shrink, compared to living standards as a whole.

I'd like to turn briefly to Bill C-27. This is federal legislation tabled by Minister Morneau about a year ago. It's still only at first reading. This is a bill we are strongly opposed to and that the labour movement is strongly opposed to. It would give federally regulated employers—banks, telecoms, airlines, crown corporations—a legal avenue to basically walk back on pension promises they've made to workers and retirees. They currently can't do that under pension law. This bill would give them the legal ability to do that.

I'm sure you've all heard the public outcry about Sears retirees not getting what they were promised. This is not something Canadians support. It's not something the labour movement supports. We're shocked that the Liberal government has tabled this bill. We call for it to be withdrawn.

Finally, I have just a few quick remarks. We can't have decent and secure retirements if we don't have decent and secure working lives. This government and all Canadian governments should be doing everything they can to improve the work prospects of working Canadians, particularly young Canadians, who are faced with increasingly precarious employment, low-wage employment, and part-time work when they want to be working full time. There are all kinds of things the government can be doing on minimum wages, employment standards, and universal social programs that could make working life better for Canadians, and that, in turn, could make retiring a whole lot easier.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you very much, sir.

Now, from the National Association of Federal Retirees, we have the president, Jean-Guy Soulière, and the director of advocacy, Sayward Montague. The next seven minutes are yours.

[Jean-Guy Soulière, President, National Association of Federal Retirees]

Thank you very much, and thank you for the opportunity to address this committee. We're very grateful to be participating in your study on advancing inclusion and quality of life for Canadian seniors. Of course, what should result from all of this is the establishment and creation of a national seniors strategy.

In seven minutes, of course, we can't go into detail on a whole lot of things, so I'm going to be general in our presentation. If you have specific questions, I'd be pleased to answer, with the assistance of Sayward.

As some of you may know, I was also the first chair of the National Seniors Council, a position I held from 2007 to 2013. From a personal point of view, that was the most interesting part of my life. It was a time when I had the opportunity to meet with seniors organizations and many stakeholders to discuss many issues related to an aging society.

I'd like to recognize the Hon. Alice Wong, who was my last boss when she was the minister responsible for seniors. It was a pleasure working with her. I shared a lot of issues with her, and she was very supportive when I was chair of the National Seniors Council. The problem is that many of the issues the council raised some 10 years ago are still unresolved, and we are still discussing them today.

My organization represents 180,000 federal retirees, including 60,000 Canadian Forces veterans. I cannot think of a more important issue that concerns Canadian retirees and their loved ones than creating a national seniors strategy that would coordinate programs with policies. I am sure that Canadians over 65, who make up 16.9% of the country's population, will agree with me.

In 2015, the news that there were more seniors than children in Canada made headlines. What surprised me was that so many Canadians were surprised by the findings. I can understand why the baby boomers took society and a great many parents by surprise back in the 1940s, but in truth, we all knew that this great generation would one day grow old.

Canadians and all three levels of government have a lot of catching up to do. Lest we think of a national seniors strategy as a short-term need, we should be mindful that average Canadian life expectancy has increased by 30 years over the past 100 years, thanks to the medical advances that continue today.

For this reason, we were glad to see the three major themes of the committee's study: access to affordable accessible housing, income security for vulnerable seniors, and community programs that promote social inclusion and recognize the importance of social determinants of health. Indeed, these were all issues that were being discussed by the seniors council some 10 years ago.

All of these things are related. Any physician will tell you that a miserable life will make you sick. Unhealthy people cost the health care system a lot. They cannot contribute to society or the economy if they are sick.

Public policy must ensure that retirement savings measures created for and available to Canadians are effective, efficient, and realistic. Earned retirement pensions must be protected, and government programs must meet the needs of the most vulnerable seniors. This is why we are very concerned about Bill C-27, as the CUPE representative said, which would introduce a target benefit plan or shared risk plan that would shift the risk from employers and plan sponsors to employees and retirees. In tough times, target benefit pensions can be reduced, providing less retirement security for their members, something that works contrary to the goals of the national seniors strategy.

In order to respond to the housing needs of seniors, a national seniors strategy needs to include home care, palliative care, and end-of-life care, as well as investments in infrastructure.

However, to achieve this, the provincial and federal governments need to be on the same page. Is this possible?

A new political approach will mean investing in infrastructure to improve access to housing; with affordable, accessible housing and measures designed to help seniors remain in their homes, infrastructure funding would be linked to the establishment of age-friendly communities.

We need to innovate by developing effective home care strategies, like the veterans independence program. Home care is not limited to just health care, but also includes access to non-medical support services, like housekeeping, meal preparation, transportation to appointments and social activities, as well as snow removal.

We believe a national strategy is an opportunity to ensure that Canadians continue to be healthy and productive well into retirement, contributing to the local and national economies.

Finally, the appointment of a minister responsible for seniors is a most important must to our organization, as I'm sure it is for all Canadians. The former government had a minister responsible for seniors, as I mentioned. We have a minister responsible for youth—we all know who that is—and we have a minister responsible for families, but we do not have a specific minister responsible for one of the most important parts of our society. We need this.

Let me conclude with a thought I expressed in our magazine Sage when we produced our last issue. I said that to have older Canadians is a challenge but also an opportunity. It is an opportunity to do something now that will benefit all Canadians, because all of you who are younger Canadians expect to grow old, and whatever is done for seniors today will benefit you in the future.

Let me conclude with some wise words from another person, Dr. Samir Sinha, director of geriatrics at Mount Sinai Hospital in Toronto and author of the Ontario government's seniors strategy. He says that aging is not a disease, but rather a triumph. I would add that we should get ready for a new definition of retirement. Let's get it right, and you have the opportunity of doing that.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you very much, sir.

Now from the Office of the Seniors Advocate of British Columbia, we have Isobel Mackenzie, seniors advocate.

You have seven minutes.

[Isobel Mackenzie, Seniors Advocate, Office of the Seniors Advocate of British Columbia]

Thank you.

Thank you. My name is Isobel Mackenzie, and I'm the seniors advocate for the Province of B.C. I was appointed by the government in March 2014. My office has a statutory mandate to monitor services to seniors in five key areas, including income, so I would like to thank the committee for inviting my office to provide our perspective on some matters that should be considered to address income security for seniors.

I recognize that the committee has heard from many of my colleagues at various levels of government and academia on the demographic projections, annual expenditures, and other technical and statistical information related to seniors, so I won't repeat those in the interests of time.

Income security for seniors means the ability to provide for all of life's necessities. I think we would all agree that only once this threshold has been met can we really talk about dignified aging and the quality of life. The challenge facing the federal government is how to ensure that all Canadians are guaranteed to achieve this threshold of income security, given the differences in costs across Canada for two of the most basic necessities, housing and health care.

As you have heard, the median personal income for a Canadian over the age of 65 is $26,000 a year. This tells us that at least 50% of Canadian seniors rely on OAS and CPP, with 30% adding in the GIS, to form a significant part of their retirement income. While these income supports are federally controlled, the expenses against the income are provincially controlled. Creating equality, therefore, is not just a function of income, the federal responsibility, but also controlling expenses, a provincial responsibility. If our goal is income security for a Canadian senior living in Vancouver to match that of a senior living in Charlottetown, we need to look at a more complex approach than just relying on universal income supports.

Health care costs are not something that figure into the budgets of most Canadians. We pay our taxes and we have the comfort of knowing that we don't need to bring our chequebook when we visit the doctor or the hospital, which is how most of us view health care. However, as we age, and as has been referenced by my predecessors, health care actually becomes a cost for many people. It can often exceed the cost of food and sometimes shelter. This is because as we age, help that was seen as a luxury when we were younger—someone to clean our house, cook our meals, cut our lawn—becomes a necessity as frailty and chronic disease impede our ability to engage in the independent activities of daily living without assistance.

Many types of the quote-unquote health care we need as we age are not covered by the Canada Health Act, so provinces are very different in what they provide. Hearing aids, walkers, eyeglasses, dentures, supplies for incontinence, nutritional supplements, help with bathing and keeping the house clean—none of this is covered through any federal program. Some provinces provide partial coverage for such things as mobility aids. Some provinces provide free housekeeping. Some provide dental care. Others provide nothing. No one provides it all.

Further complicating matters are those seniors who are covered by a benefits plan that they have either purchased or received as part of their workplace retirement benefits. My office recently surveyed B.C. seniors on this aspect, and we found that 65% of low-income seniors, or households under $30,000, had no supplemental benefits coverage. Paradoxically, our research showed that the higher your income, the more likely you were to be covered by the benefits plan and more able to pay.

To highlight the disparities, I'll use a bicoastal comparison of two 85-year-old single seniors, Margaret and Helen. They're both of sound mind. However, they have some frailty and require daily help in the morning to get up, washed, dressed, and check on their medications. They both have an annual income of $26,000 a year.

The one-bedroom apartment that Margaret rents in Charlottetown costs $696 a month, so she pays $8,300 a year in rent. In P.E.I. there's no copayment for her daily home support. The program includes housekeeping. In addition, Margaret worked for 15 years in the bank after her children left home, so she has a very small but indexed pension, ensuring that her $26,000 income will remain constant in real terms. She also has employer-paid retirement benefits covering her dental and extended health costs.

Now, compare Margaret with Helen, who lives in Vancouver. Helen rents her one-bedroom apartment for $1,054 a month and receives a shelter grant under SAFER, or shelter aid for elderly renters, of $90 a month.

This leaves Helen paying $11,500 a year in rent. In B.C., there's a copayment for her home support. Based on Helen's income, it's $12 a day, or $4,300 a year, for her daily home support, but in B.C. it doesn't include housekeeping. Currently, Helen's neighbour helps her with housecleaning, but she'll be moving soon, and Helen will need to hire someone.

Helen worked most of her life as a bookkeeper for small companies, so she has no company pension or benefits, just the RSP that she converted to a RRIF, which will be depleted at age 90. Then her income will drop by $5,000 a year. Helen pays about $2,000 a year for her dental and extended health benefits.

The result is that after rent and basic health care costs, these two Canadian seniors are left with vastly different incomes. In Charlottetown, Margaret has $16,600, or $1,400 a month, for all her other needs. Helen has $8,300, or $677 a month, for groceries, transportation, cable, clothing, haircuts, etc.

They are the same age and have the same income, same health care needs, same size of apartment, same citizenship, yet one is left with twice the income of the other after paying for very basic needs.

If the concomitant goals are income security and equality for all Canadian seniors, it will require that the federal government examine mandating standards for health care coverage among provinces and tackle the issue of vastly different housing costs for renters, in addition to the fluctuating incomes for seniors who are not covered by indexed workplace pensions or benefit plans. These are the very types of issues that need to be addressed in a national seniors strategy, and indeed the reason we need one. Hopefully, equality of access to health care and housing for all Canadian seniors will be at the forefront of deliberations.

Thank you for your time.

[The Chair, Liberal, Bryan May]

Thank you very much. Thank you to everybody for keeping on time and making my job very easy.

First up, we have Mr. Warawa for six minutes.

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

Thank you, Chair, and thank you to the witnesses for being here.

I appreciate the testimony. It's very informative.

As has been pointed out, we have an aging population. At this present time, I believe it's one in six Canadians is a senior. In 12 and a half to 13 years, it will be one in four. I have a number of questions and not enough time, so I'm assuming I know the answer to this question, but is there any witness here today who believes that Canada is ready to take care of an aging population? I don't see any hands, so I will assume that no one thinks that we're ready, which is what I think. I don't think any member of this committee thinks we're ready, and that's why we're discussing this issue.

Dr. MacDonald, you mentioned the synergy. We just heard from Ms. Mackenzie, and she's the advocate for seniors. We heard from the federal retirees that they would like to have a national seniors strategy and a minister for seniors. Over the last two years, having worked with my colleague, Alice Wong, who used to be the minister for seniors, we've heard over and over again from the different stakeholders representing seniors of the importance of working together as a country, creating a national seniors strategy, binding all the synergy, and finding the solutions to the problems. You created some very practical solutions. I'm thinking of the studies that have been done over the last three years by the Office of the Seniors Advocate of British Columbia and I think, since we have Mrs. Mackenzie and her office focusing on the needs of seniors, we have incredibly valuable and important studies and reports that we can rely on that could apply to the situation in Canada.

Would you agree that to provide a plan and a strategy and to move forward in a positive way and get ready, we need to have in every province and territory a person or a minister appointed to focus on their senior issues, so that we can start moving the synergy forward and get ready for this aging population?

[Dr. Bonnie-Jeanne MacDonald]

The problem is that we have so many disconnects between all these different studies that it is difficult to bring the information together and get a storyline and come up with effective solutions. When analysts come to these problems, their difficulty will always be data.

Fortunately, in the Canadian federal government, analysts will take pieces of data and use that data to come up with solutions. Over the last 25 years, the government has actually been taking all the data that we have available in Canada and they've put it together into a very comprehensive model. Because of that, for Canadians across Canada, both rural and urban, we're able to get a fuller picture of what their needs are, what their income sources are, their family structures, and all this information.

Each Statistics Canada survey is like a piece of puzzle. When we can use these gold-standard computer models, we can put those pieces of the puzzle together. That will give us the fuller picture that we need to actually see, if we change this piece, how it affects the rest of the picture. If we change the GIS clawback, what's the evidence? What's going to happen? If we change our working income tax benefit, is that going to make CPP enhancements fairer?

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

Sorry for interrupting, but we need to have people, experts in Canada, come together. Would you agree that we start the process of building this national seniors strategy and have a minister or a person, in every province and territory, at all levels of government, including the federal level, and that we start moving forward?

[Dr. Bonnie-Jeanne MacDonald]

Right. Absolutely. What I was getting to was that—

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

I'm sorry, but I'm running out of time, and I have a quick question for Ms. Mackenzie.

You wrote a recent report on home care. We do not have enough people trained in home care. We do not have enough nurse practitioners. We have a lot of people trained in pediatrics but not geriatrics, and not enough people trained in palliative care.

What is the solution in Canada so we can now start preparing for that aging population and train enough Canadians?

[The Chair, Liberal, Bryan May]

You have one minute, please.

[Isobel Mackenzie]

Step one is to establish national standards, national entitlements, or national expectations to deal with this variation among provinces. That will lead to an ability to attract to the labour force the kinds of people we need. When they look at the ability to rise to national standard certifications, for example, and they can see mobility within their profession because it's the same in Saskatchewan as it is in British Columbia as it is in Ontario, that will be a way to move that forward.

Informal care or family caregivers, which one of my predecessors spoke about, is also not to be underestimated as a solution to caring for our aging society in a way that is potentially more cost-effective, although not always, and it is certainly more centred on the needs of the seniors themselves.

[The Chair, Liberal, Bryan May]

Thank you very much.

Mona, you're up for six minutes.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you, Mr. Chair.

Thank you for your testimonies today. We can see that you have a variety of experiences with seniors.

We need to recognize that we have work to do. We have to find solutions or measures that will help us do our part in ensuring that seniors in Canada can retire in comfort and dignity.

Ms. Mackenzie, I found your remarks on the cost of health care very interesting. Could you please tell us about some of the best practices or some of the models, in Canada or abroad, that you might have studied? Perhaps that will help us better understand how to tackle this issue.

[Isobel Mackenzie]

Thank you. I apologize for giving my answer in English.

Yes, there are jurisdictions where we see better practice around home care and universal availability of home care supports on a national level, such as in many of the European countries. It starts with recognizing that if the goal is to facilitate independence for the senior to live in the community for as long as possible, financial impediment should not be the reason that they go into a care facility setting where the government is going to step in and pay more. The analogy is penny-wise and pound foolish.

For example, if we don't provide supports for people to go and assist with those who can no longer handle their activities of daily living, such as bathing and getting dressed, they're going to go into a care facility and we're going to pay much more. In some countries, at a certain age—and it's not 65, but generally much older, like 75 or sometimes 80—there is an assessment done regardless to determine what we would call a baseline. You are then able to monitor to see when help is needed, and help is then provided.

Certainly when we look at other countries, we see that our rate of what I would call institutionalization is much higher than in some other countries. Those are countries with populations older than our populations. While our population is going to reach 25% in about 20 years, some other countries are already there, and they have much lower rates of institutionalization of their senior population.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you very much.

Affordable and accessible housing was top of mind when I was preparing for today's meeting. As we know, that is one of the country's main concerns, as many seniors currently have nowhere to stay.

If any of you have any ideas, I am all ears.

As you surely know, in its budget, the government invested $200 million to repair existing affordable housing units and build new ones.

Where should the federal government continue to focus its attention in this particular area?

Mr. Soulière, what are your suggestions?

[Jean-Guy Soulière]

First of all, I believe that we should stop talking about the aging population in terms of something we need to prepare for. The shift has already begun. Canadian society is aging, and it has been for some time now.

In my career, I worked in HR at the federal government. That was 25 years ago, and we were already looking into the phenomenon back then. Today, we talk about it as if it were something new, but this is not a problem for future generations; it is already here.

With regards to housing, there is a lot of available information. I suggest you take a look at the National Seniors Council's website. If I remember correctly, there was a study done about seven or eight years ago on affordable housing.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Studies are not what I asked about, however; rather, I would like to know what steps the government should be taking.

[Jean-Guy Soulière]

Of course, but there are recommendations.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

If you had to name one or two measures that should be a priority, what would they be?

[Jean-Guy Soulière]

Some examples exist already, such as housing for veterans.

Health Canada has set up all sorts of measures aimed at helping folks with their home improvements. All sorts of benefits are available. One of the challenges we face is that many seniors are not aware of everything that is out there.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

All right, so we need to raise awareness.

[Jean-Guy Soulière]

We have heard many recommendations like those.

With regard to seniors, not knowing who is in charge can be confusing. Seniors don't know whether to deal with the municipal, provincial or federal government. Sooner or later, these programs will need to be streamlined in order to stop wasting so much time and money.

[The Chair, Liberal, Bryan May]

Thank you.

You have about 10 seconds, so I'm going to suggest we move on.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

I'll bank that.

[The Chair, Liberal, Bryan May]

It doesn't quite work that way.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

I tried.

[The Chair, Liberal, Bryan May]

Now we'll go over to MP Rachel Blaney.

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

I want to thank you all so much for being here.

Just for the record, I want to make sure that we have information. I want to ask you a yes-or-no question, and you're free to abstain. Do you believe the government should implement a national seniors strategy?

I will start at Mr. Beach and end at Ms. Mackenzie.

[Prof. Charles M. Beach]

My answer is yes. Do you want me to explain why, a bit?

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

“Yes” is good for now. I can come back.

[Prof. Charles M. Beach]

Okay.

[Dr. Bonnie-Jeanne MacDonald]

Yes from me.

[Mark Janson]

Yes.

[Jean-Guy Soulière]

You don't have a choice.

[Voices]

Oh, oh!

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

That's a yes.

[Sayward Montague, Director, Advocacy, National Association of Federal Retirees]

Yes.

[Isobel Mackenzie]

Yes.

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

Thank you, everybody.

Mr. Janson, you talked about the CPP expansion and how it just doesn't go far enough, and you have some serious concerns. Perhaps you could tell us how Canada can do this differently to benefit seniors.

[Mark Janson]

There is a whole lot of room in the CPP where we still could go. The replacement rate of CPP was set at 25% income replacement back in 1967, which was 50 years ago, when the program started, and it's still at 25% today. We were calling for that to be moved up to 50%. It is moving up to 33%. There's a whole lot of room there where we could still go. We polled on this issue, and Canadians are actually quite willing to put more money into the CPP. We gave them dollar figures and per cent figures, and they were supportive of doing that. This is a trade-off they are willing to make.

The reforms were important, but they just didn't go far enough. Our philosophy is that we should keep pushing to go farther.

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

Okay.

You mentioned that we should look at how OAS and GIS are indexed. Can you tell us how the government could match it to wages and economic growth?

[Mark Janson]

Yes. It would be a simple amendment. It's a fiscal cost to do so, to have the program grow at the speed of the economy rather than the speed of prices. The actuaries who look at the OAS and GIS system show, and they've been saying the same thing for decades, that in the long run, because this program is indexed to prices rather than wages, it gets cheaper and cheaper as a proportion of our economy over the long run. There are demographic ups and downs. We're going into one now where there is a bit of an uptick, but the long-run cost curve of the program is still down because it's indexed to prices.

To me, that means we can afford increases in the OAS and GIS. I don't think Canadians should accept the idea that if living standards in Canada increase, we should leave seniors behind on that increase. I don't think that's a principle that Canadians would support.

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

Thank you.

Can you give more examples of specific recommendations to this committee that we should look at in terms of protecting seniors from poverty?

[Mark Janson]

Yes. In terms of poverty, you need a pension system that's working for most Canadians. In terms of our pension system, we've put a lot of our eggs in Canada in the workplace pension basket. We have comparatively a pretty small public pension system. When you look at other equivalent OECD countries, our public pension system, our CPP and OAS, is actually comparatively pretty small.

We have put a lot of eggs in the basket of workplace pension plans. Our philosophy is that those have to work out for most people. The experience, of course, is that they don't. We've never in our history cracked 50% pension coverage. We got close, but it's been going down, and we're now at about 40%. The characteristic of that 40% has become less generous and less secure too. That's why the labour movement thinks that the only real solution is an expansion of public pensions, and that's why we've put such great effort into it. We've been saying the same thing for 50 years.

We started this campaign in 2009 to expand the CPP. I don't think the fact that we have a partial win is reason for us to back away from that philosophy. I don't think we expect a lot of Canadians to all of a sudden have workplace pension plans or tax-free savings accounts to save us all. Our view is that the one and only solution is bigger public pensions. We've had this increase in the CPP. We could certainly look at an increase in the OAS. Given this long-run indexing issue, I think there's fiscal room there and I think there's reason to do it.

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

Thank you.

In your 2018 pre-budget brief, Mr. Soulière, the National Association of Federal Retirees is calling for action on a national seniors strategy. I'm wondering if you could tell me a bit more about how you envision this strategy. Who would be in charge? As well, should there be targets?

[Jean-Guy Soulière]

The first step is to get the provinces and the federal government on the same wavelength. There's duplication of work, programs, and costs.

You are dealing in the title of your study with the major aspects of a strategy. It all deals with healthy aging. Again, a report was produced by the National Seniors Council on that topic. It provides a whole lot of different recommendations on how that can be achieved.

Somebody mentioned it in one of the presentations. The strategy needs to involve seniors themselves in saying what they need and how it is going to be implemented. You need to have this coordinated somewhere, and that's why a minister of seniors is so important, in my view and in our view as an association. It's so you get all the information in one place, digest it in one place, and act in one place.

The key element, which we've not achieved in Canada in many instances, is to have the provinces and territories and the federal government working together. Unless you achieve that, it's going to be a failure, and we can't fail. As I said, the situation is with us today. It's not future planning; it's now.

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

Thank you.

[The Chair, Liberal, Bryan May]

That's your time. Thank you.

We'll move now to Monsieur Robillard.

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

Thank you, Mr. Chair.

Mr. Beach, you have a PhD from Princeton University, in the United States, isn't that so?

[Prof. Charles M. Beach]

Yes.

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

As an economist, are you able to draw any parallels between federal programs for seniors in the U.S. and those that exist in Canada? Beyond that, when we compare the situation in both countries, are you able to point to some specific measures that we might draw upon?

[Prof. Charles M. Beach]

I was a graduate student many years ago, and I was down there for just four years.

I'm not a policy wonk, so I'm afraid there's not much I can add. My gut feeling is that the Canadian social security system in general is more generous than it is in the States.

My sister died a few months ago, and I'm having to take care of the results. I was appalled by the lack of involvement of government transfers or programs and so on. A great deal of reliance had been given to private sector pensions. She worked all her career for a particular well-known organization, and in my view her pension was an absolute pittance. I was really quite shocked.

I probably shouldn't say this, but I wouldn't look to the U.S. on this particular matter as the place to go. I think Europe and Japan, which has one of the most rapidly aging populations, have far more experience and best practices for us to learn from.

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

Thank you.

Could you tell us about your work on the challenges to aging program? What studies are you conducting and what can you tell us about your findings thus far?

[Prof. Charles M. Beach]

Me...?

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

Yes.

[Prof. Charles M. Beach]

I'm not really working on any such projects. My area of expertise has been on incomes, not just of seniors but of people in general, and particularly where these incomes come from in the labour market.

You can see why my concern, noted in one of my remarks, is that if wages or earnings in the long run are going down, this does not bode well for the role of CPP and QPP in being able to help support seniors, and it will put more burden on other pillars of support, such as OAS and GIS.

One other thing I would mention along that line—and this was my sixth point that I didn't get to say at the time—is that what's also happening in incomes in general, particularly earnings, is being driven by what's happening in the labour market, and that's a quite rapidly growing income inequality since the 1980s—again, far more so in the United States than in Canada, but it is still the case in Canada.

If earnings are growing further and further apart, particularly at the top end, and things like CPP depend upon earnings, that means you will have a growing fraction of people at the top end who will be at the top end of CPP and QPP. Also, private sector pensions, or private pensions no matter what sector you work in, are more generous for high-income workers. Also, high-income workers have a greater opportunity to save more, so private savings and the wealth that those savings provide will also be going up for a significant portion at the top end of the distribution.

My conclusion is that you shouldn't have to worry about those people. They're going to be doing very well, thank you very much. I think your perspective should be more on worrying about floors—not the people at the top 15% or 20% or so, but the floors and, if you wish, at income-contingent transfers, so that if one person had a substantially higher income than another, for the one with the higher income there would be a tax back right to the transfer, so that the transfer that person would get would be less, possibly none.

I have a good pension from where I worked for 40 years, so I don't get OAS. I think that's perfectly appropriate.

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

Thank you.

I will share the rest of my time with Mr. Jowhari.

[The Chair, Liberal, Bryan May]

You have literally six seconds, sir. Go.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

How about that?

[Some hon. members]

Oh, oh!

[The Chair, Liberal, Bryan May]

That is the end of the first round, unless anybody needs to take a break.

Yes, sir?

[Prof. Charles M. Beach]

May I respond briefly to one question that Mona Fortier raised?

[The Chair, Liberal, Bryan May]

If Mona gets another opportunity, then we'll bring it up. I'm sorry, but we have to stick to the timing.

Does anybody need a quick break, or shall we just keep going? Okay, we will continue.

Next up we have Ramesh Sangha for six minutes.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Thank you.

I have one question for Mr. Beach, again.

We are doing a study of poverty reduction in Canada and in that we now have a chance to study the seniors living in poverty.

I have been an immigrant, and in my riding of Brampton Centre there are mostly immigrants living there.

Parents and grandparents who come to Canada, sponsored by their children, do not qualify for benefits because they have not been here for the required 10 years to get the pension, and they live in poverty. They have nothing, no earnings. They have medical coverage, and that is good, but no other things.

My question to you is this: can any government or any other agency help these people to improve their standard of living and take them out of poverty?

[Prof. Charles M. Beach]

That's a tough question. I don't know the answer. It's a very important question.

I've worked for a number of years on immigration issues, and the main reason I got into it is that there has been a gradual decline for about 30 years in the relative income and standard of living of immigrant families, not just in Canada but in essentially all developed countries. It appears to be based on a number of long-running basic economic events. The economy is shifting from manufacturing to services. Thirty years ago you could get a job putting on a windshield at a Ford plant with barely any English, whereas now, much of that has been outsourced.

The shift to services means there's a greater reliance on the role of language. For immigrants, particularly the first generation, that can be very difficult. The adjustments are indeed more difficult for those who come from very foreign areas. Again, 30 or 40 years ago most immigrants came from either English-speaking parts of the world, western Europe, or British Commonwealth-type countries, so they came with a common set of perspectives and experiences as to how labour markets operate and so on. Increasingly now, the majority of immigrants come from Asia and the Middle East, places like that, so the adjustment—not just language, but culture and everything else—is much more difficult.

One of the things the federal government has done—and I very much agree with them—in putting together the rules is to place a greater reliance, either within a point system or whatever, on the importance language. If I had to figure out two important things, as research has indicated, they would be education and language. Those are the two biggies.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

I'm not talking about those persons. Those who are coming on a point system are young enough. They can go into the labour market and start earning. I'm talking about those who are coming as aged persons, seniors sponsored by their children whose parents are the grandparents.

[Prof. Charles M. Beach]

Yes. It's always been the case that older people, whether sponsored or however they come here, have a tougher adjustment, whether it's language or whatever. The federal government, in changing the point system, has provided more points to younger people, to try to see that there are fewer older people who come in and are subjected to these problems. It doesn't address the question. Your question, as I understand it, is about the ones who are here and are facing a real problem. What can be done about it?

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Can I ask a question to you, Bonnie-Jeanne?

You are saying that we have to first see what they want, then see what their needs are, and then look at the financial burden and how we are going to accommodate them. Do you have anything in your mind as to how these people can be assisted? It's a very small category of people, but they are poor.

[The Chair, Liberal, Bryan May]

Very briefly, please....

[Dr. Bonnie-Jeanne MacDonald]

Right, they're poor. Basically the most direct way would be to alter the OAS regulation so as not to have this residency requirement. A change like that is going to depend on the cost for the government to implement it. We need tools to calculate this cost and to integrate the data. Also, through those tools, we could understand the benefit of bringing in immigrants to the long-term Canadian economy.

As I was asked before and was just getting to, what Canada actually needs more than anything, if we want to have a national seniors' program, are tools that are computer models that experts across Canada can use to test these ideas, get real numbers, and have authoritative answers to the questions.

We had this model. It was developed for 25 years. It was used to test the CPP enhancement. It was used to test the OAS enhancement. I'm now using it to test the CPP enhancement because the government discontinued the funding. As an analyst and somebody who's using the government model, which the government should actually be using, I'm getting calls from provinces, from private industry, from academics, from everybody, asking me to run these analyses because the government is no longer running the analyses within the government.

If you want to do a national strategy and get real answer to real questions, you need the tool that's going to bring the data together.

[The Chair, Liberal, Bryan May]

Thank you very much.

Now we will go over to MP Wong.

[Alice Wong, Conservative, Richmond Centre, BC]

Thank you very much.

First of all, I'd like to acknowledge a number of people who are here. The first is Mr. Soulière, for serving as the president of the national seniors council.

For your information, the seniors.ca map, which shows all the different provinces and their different benefits, is gone. They took it down in August.

The national seniors council has done a lot of studies, and those studies contain very valuable data on the healthy act of aging, seniors in social isolation, aging at home, and extending the work of seniors in the workforce. All of these are wonderful studies, and the data is still there. Hopefully it has not been taken away.

I thank Ms. Mackenzie for your work as an advocate in my province of British Columbia. I was there when you did the presentation for home care. Thank you very much for all the good work.

I thank the folks from academia as well, because the synergy is right there. It's in exactly the kind of panel we have here, with academics and government. We have at least two levels of government here.

I'll go back to the questions. The first is about caregiving. It may be related to Mr. Sangha's question about looking after seniors at home. I know that Australia supports family caregivers. I was also in London, England, with the minister and spoke with the carers' association. They have the term “carers”, which is informal. When we talk about caregiving, we have to distinguish between the unpaid, informal family caregivers and the paid, formal caregiver. I think I'm talking more about the informal caregiver .

Within our strategy we really need to look after those people as well, because they're there and their jobs are in jeopardy if their employers do not even recognize that their employees have those questions. I started the employers' panel and then, again because of the change of government, it's gone.

My question is this. Do you see the need for all three levels of government to be working together, and also for bringing back the federal-provincial-territorial forum, where two levels of government look at all the services so that there's no duplication, and then at the areas of need that both levels of government can identify? You need a leader in those areas.

This is open to all of you.

[Isobel Mackenzie]

I think if we don't involve the provincial government, we're not going to have equality in the basic income being provided to seniors throughout the country, because income is only half of the equation.

The other half is the expenses the senior has to pay out of pocket for what have become the necessities of life at the age of 85 or 90, when seniors are purchasing labour costs that are outstripping goods in terms of the cost of living. If we don't bring those two together, the federal government can increase income supports, but it will not be providing equality of income to all seniors until we get the provinces to the table and everybody agrees on the basic provision of services across the country.

[Jean-Guy Soulière]

Your basic question was whether we should reinstitute the process that existed before. That is, once every year, ministers responsible for seniors across the country—some provinces have a specific minister for seniors; some don't—met and decided on the issues they would be dealing with during the year. Absolutely, that's a key element to a strategy. For the federal government to fly away, thinking it can establish a strategy without provincial input, it's dreaming in colour. Maybe it's dreaming in colour that both of them can get together, but that's another story. It is absolutely essential that provinces and territories work together on this.

Also, many provinces have, if not a seniors advocate, a seniors group, usually within the ministry of health or the department of health. Each one of the provinces has a staff devoted to seniors. My concern has always been—and I mentioned this when I was chair of the national seniors council—the enormous waste of duplication that we have in Canada. We could put that money into doing things as opposed to.... For example, each province is looking at long-term care, doing all sorts of studies. Each province is looking at care at home, doing all sorts of studies. It's not coordinated. I'm taking off my professional hat now. That's a personal point of view.

There were even recommendations to encourage families to take care of their elderly relatives by establishing some kind of tax incentive. For example, if you gave so many hours to care at home, there would be a deduction that you could put on your tax return. These are the sorts of things we should be looking at.

Also, as mentioned, there are countries that are...I won't say far more advanced, because I don't think there are many more countries that are better than we are in taking care of our elderly people, and I'm an elderly person myself. We should look at what's being done in other countries and not force-fit it but adapt it to our country.

Yes. We need to coordinate a bit more.

[The Chair, Liberal, Bryan May]

Thank you very much. I have to step in there, sorry. Thank you.

Now for six minutes, we have MP Ruimy, please.

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

Thank you all very much for coming today and presenting to us.

I'm a data guy. To me, numbers are critical. Between testimony we've heard today and testimony we heard at the previous meeting, take your pick: seniors are doing better, or seniors are not doing better.

We have the National Association of Federal Retirees, most of whose members, I imagine, have pensions. I've run into many people in my riding who actually don't have any pension whatsoever. When we look at these numbers from StatsCan, presented by Mr. Beach, they show 14.3% in 2015. In looking at that statistic, one could say that 85% of Canadians are good to go for retirement, but that's not an accurate statement and that's the thing that's really bothering me right now.

I want to jump to Bonnie-Jeanne MacDonald. You talk about your living standard replacement rate. This is a study you've put together. Could you give us a sense of what that is and how it might play into getting us better numbers?

[Dr. Bonnie-Jeanne MacDonald]

Basically, when governments around the world want to evaluate how prepared their citizens are for retirement, they have two criteria. One is poverty. The second is that they want to see how well Canadian, American, or Australian workers will sustain their living standards in retirement.

Unfortunately, the target they use right now is to say, can they replace 70% of their employment earnings? For a long time we've realized that this is a completely inadequate benchmark. It actually makes no sense. When I did an extremely large research review of all the studies that have ever been done, I found that there was no scientific demonstration anywhere in the world that showed that people who replaced 70% of their income actually do sustain their living standards in retirement.

I present a new, alternative measure that basically says people want to sustain their living standards, which means they actually want to have enough money to buy the same level of goods and services after retirement as they do before retirement. That's what our living standards are really made up of: how much money we have to spend.

In terms of data, going back to the CPP question, that's critical because that's what the CPP is there for, to help people sustain their living standards. Currently, I'm testing the CPP enhancements using the model that the government developed—because it's outside their mandate to use this model—to understand who in Canada is actually benefiting from the CPP enhancements and by how much. Is it high-income Canadians or low-income Canadians?

My concern is that I hear of meetings such as this in industry, in the academic world, and everywhere. People have a lot of questions, and there are no answers. If you go to the United States, the government supports universities or different groups to actually develop very sophisticated models. They can then draw on this expertise and have the authoritative models to answer these questions. We don't have this in Canada. It's literally pennies for the government to continue to support the models where we can take all the data that we have available, put it together, and actually understand where the CPP enhancement went right and where it went wrong. Should it or should it not have been doubled?

I've now talked to leading Canadian thinkers across Canada. What's interesting in the results that happened in the CPP enhancement is that they actually weren't that punitive for low-income Canadians. This is very contrary to what's in the media. The problem is that people who speak in the media are researchers looking at it from a very narrow dataset. Once you look at data of all Canadians, across time, across their working careers, you get very different results. I really believe that before we put forward policy changes we have to understand how it's going to unfold into the future. It cannot just be an ideological debate and having people come together and put together whatever is popular at the time. We need to have informed evidence coming from authoritative sources.

It's funny, but I've spoken 20 times to industry and academia over the last three months. I'm constantly travelling and talking. To be honest, I just talk about my work and I'm never selling an idea. However, I am selling an idea today. I implore you, if there's one thing I can get across today, basically it's that the government needs to put some money back into the analytical tools.

It doesn't have to be housed in government. We can house it outside of government, in the university. It's going to be lot cheaper and will make it more accessible to all the academics across Canada, and for all the special interest groups to actually test their ideas and get real answers. Then, when government has questions, they can draw on this expertise and we can argue based on some baseline numbers. Right now, we don't even know what these numbers are, and neither does the government, I'm afraid, because, again, they cut the model.

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

Thank you.

When we came into power, we reinstated the long-form census. Would you have any data that has come out of that at this point that would be helpful to us in this study?

[Dr. Bonnie-Jeanne MacDonald]

The difficulty is that you can get a census, but if you're not using the data in some type of comprehensive model that's going to put the information together, it's just bits and pieces of data.

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

Is your program, the living standard replacement rate, something that—

[Dr. Bonnie-Jeanne MacDonald]

No, that's a statistic. That's something separate, but that's a way of understanding how well changes in the CPP have actually performed.

The model I'm talking about is something that the government developed in Statistics Canada for 25 years, using the top minds in government. In 2010, the government used it to test the CPP enhancements. They then used it to test the OAS changes. However, just a number of years ago they cut the funding to this model. This is our population microsimulation model, which was actually the gold standard in the world.

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

Wow.

[Dr. Bonnie-Jeanne MacDonald]

I was the only person outside of government who learned it, so guess what's happened to me. I am completely inundated with phone calls from provinces, from the industry, and from other academics, who want me to run this model. I can't do this alone. I don't have an interest in doing that, but the government could just put a couple of analysts in there and help support this model, and then suddenly it's going to open up the scope for so many answers and so much innovation, and it will all be done for free.

[The Chair, Liberal, Bryan May]

That's amazing. Thank you.

You're well over time. Sorry, Dan, you can't bank anything.

[Some hon. members]

Oh, oh!

[The Chair, Liberal, Bryan May]

Mr. Kent, you have five minutes, please.

[Peter Kent, Conservative, Thornhill, ON]

Thank you very much, Chair.

Thanks to all of you for your insight and advice here today.

One of the things I hear most often from seniors in my riding of Thornhill is a request that the age of mandatory withdrawal from RRIFs be raised significantly. Some folks say, why not raise it to 75? Others, who are still capable of working and are still generating income, say that because they have prepared for their retirement...and they recognize that it has been notched up somewhat to 71.

I wonder if all of you could offer a comment on that particular aspect.

[Jean-Guy Soulière]

It's something that we hear also. Of course, it was 71, then it went to 69, and now it's back to 71, I think. As people live longer, they probably don't need it at 71, because people say that 71 today is yesterday's 50 or 51. I'm 51. As people live longer, they want to ensure that the money is there later on in life, so forcing them to take their RRIFs at 71 defeats the purpose. Yes, we hear that as a recommendation as well.

[Dr. Bonnie-Jeanne MacDonald]

A lot of the analysis says that seniors want two things. They want to have flexibility over their savings in the beginning of their retirement, but at the same time they want long-term protection. One way of doing it is, as you say, to raise the RRIF age so that people aren't forced to withdraw the money and they can leave it for when they reach an elderly age.

However, the difficulty with that is that if people don't draw on their savings, they are not actually using their income in retirement and they may pass away without taking advantage of the savings.

One of the best solutions, which, as I mention in my talk, has been incredibly popular, is that people pool their money together and buy what's called longevity insurance. It's very cheap. They would put a very small fraction of their savings with a group of seniors, and then the half of them who do live past 85 will have a guaranteed income stream to support them in that advanced age. We could do this at a national level and make it very accessible.

They are not managing the money, and it's extremely cheap. Basically, half the people die, so people are not just getting the investment returns they would get in their RRIF, but they are also doubling their money. It's giving seniors what they want: flexibility over the majority of their savings during the early part, but also guaranteed income coming from this fund of savings, like a pension, at a later age.

[Peter Kent, Conservative, Thornhill, ON]

Is that advice widely available?

[Dr. Bonnie-Jeanne MacDonald]

I actually wrote it in a C.D. Howe pension policy paper, which will be released soon. It gives the details. I didn't invent this. This is an idea that has been used with incredible success around the world. It's popularly known as longevity insurance, but if we can do this as a national.... The difficulty with longevity insurance is that only the healthiest people buy it, but if you do it as a national program, that does amazing things in terms of reducing the cost, because a lot more people will buy it. What we know about seniors is that they actually want this protection in later life.

Again, this is a way to help Canada's economy later on, because we are getting the people with the money and the savings to save the money for when they need it so that they don't become dependent on the state later on in their retirement.

[Isobel Mackenzie]

I believe we should be raising the age at which you are required to withdraw from your RRSP, and we should also be looking at whether we continue to recalibrate CPP and OAS in terms of how long we can defer it for and what the rewards are for deferring to age 70. What if we pushed it to age 75? What about if we pushed it to age 80?

It's another way of getting to what Bonnie-Jeanne is alluding to, which is that you could view it—if you can push it off far enough—as the insurance policy for those later years when you're actually going to be needing to buy more help with your activities of daily living than you are currently.

About 25% to 26% of Canadians aged 65 to 69 are still actively engaged in the labour force, and it is still about 7% when we look past age 70. We want to be careful not to de-incentivize people to remain in the labour force when they are actually able to but for financial reasons it doesn't make sense. We want people engaged in the labour force for a whole host of reasons.

One of the issues this committee is looking at is the isolation and engagement of seniors, and sometimes there is no better way to do that than through employment, through the workplace. This is not to say we should compel people to work who are unable to do so because of some of the chronic conditions that develop as we age, making it difficult for us to work. But neither should those who are perfectly capable and wanting to work be economically penalized for it.

I agree with RRSP raising, but we also need to keep looking at the CPP and OAS, and see whether we need to be pushing a bit further out on that as well.

[The Chair, Liberal, Bryan May]

Thank you very much.

Now, for three minutes, we have Rachel Blaney.

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

Thank you.

I want to come back to you again. One of the things your group is advocating for is an increase in the GIS. Can you tell us how much you think is needed?

[Jean-Guy Soulière]

No. It's part of the pillars of safety for older Canadians. I don't have the study. I couldn't tell you what amount that should be. There are all sorts of ways of looking at it, but no, I can't answer that.

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

Can you tell me a bit about the veterans independence program and what that would look like in a larger Canadian context?

[Jean-Guy Soulière]

In the larger Canadian context...? Maybe Sayward can answer that one.

[Sayward Montague]

The veterans independence program is something that's accessible to veterans who are eligible for it, obviously. It does some things quite well, and in other ways it could be improved. Obviously, scaling that with our geography and the numbers of people involved would be a challenge. The veterans independence program looks at those extra things that Ms. Mackenzie was talking about, which come to be considered necessities of living as we age: housekeeping, grounds maintenance, personal care, and so on.

The way the program is delivered permits some flexibility in which of those additional items the veteran chooses, to some extent, or what they must access the fund for. What works well is that there is some level of integration with provincial and municipal services or programs that may be available too, so it manages to tread that line between federal-provincial programs quite well in terms of its delivery.

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

Thank you.

Ms. Mackenzie, your report “Every Voice Counts: Residential Care Survey Results” was extremely detailed and very enlightening actually, but it dealt with B.C. Based on that report and what you learned, what would you recommend and share with this federal government?

[Isobel Mackenzie]

The report that MP Blaney is referring to was a survey of all of the residents in residential care facilities in British Columbia. From looking at the raw data and comparing province to province, we know that our population is not much different from other populations in the other parts of the country.

What came out of that report were two messages. One was clearly related to ensuring that we have sufficient levels of staffing support in our care facilities to make sure people can get to the toilet when they need to, get a bath when they want it, and so on.

However, there was another equal voice that came through that's not about staffing or money. It was about the 45% of people who said that there was nobody there who they had anything in common with and the 46% who said that there was nobody there who they had things to do with. That's not fixed with staffing or money. That is a reflection of people in long-term facilities who are still able to be actively engaged, and in my opinion and the opinion of others but not everybody, could still be in the community. Where we are falling short is in making sure that our communities provide the supports necessary for those who still want to live at home, who still have some ability for independence, who still have cognitive engagement in the world around them, to remain in their communities.

Long-term care actually looks very similar from province to province. Home care supports for activities of independent living look very different from province to province. Long-term care is funded in every province slightly differently, but essentially, any Canadian senior who requires long-term care is going to be provided with it and they are not going to become bankrupt. It's not the same with the other ones.

We need national standards around what Canadian seniors are going to get that will allow them to remain independent because that's what you are seeing to a large extent in the 45% of people who say that there is nobody there they have anything in common with.

[The Chair, Liberal, Bryan May]

Thank you very much.

That brings us to the conclusion of the second round. We do actually have some committee business that we need to address at the end, but I want to give an opportunity for each side to have one more four-minute round. We will start with the Conservatives.

I was remiss in the beginning in welcoming David, Peter, and Majid to our committee, so I'll do so now. Thank you for joining us today.

David, the next four minutes are yours, sir.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

Thank you, Chair.

I'd like to personally thank the witnesses for participating in this study, which is very important because we'll all be there.

[Alice Wong, Conservative, Richmond Centre, BC]

I'm there already.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

It's getting close for me too.

We have heard a lot about federal and provincial responsibilities, but one element that is really missing is the municipal side of things. From a municipal background, we subsidized a lot of things for seniors and we thought it was very important. It's quality of life. It's transportation. A lot of municipalities provide seniors with busing, but some don't. It's a geographic issue too. Some municipalities cannot afford to have the luxuries for our seniors.

I'd like each of the witnesses to touch on how important it is for municipalities to be part of the discussion and also part of the national seniors strategy because I think that's one component that I haven't heard mentioned today.

[Jean-Guy Soulière]

If I could, many municipalities are already participating in this. It's called the age-friendly city.

[Alice Wong, Conservative, Richmond Centre, BC]

Yes, age-friendly communities....

[Jean-Guy Soulière]

There are many communities. This was not invented by Health Canada, but certainly recommended and put in place by Health Canada some years ago. Also, we're really leaders in this country for having so many municipalities participating in this. The original concept of age-friendly cities was to make the cities friendly for seniors. It's age-friendly, though. It's for everyone, so whatever is done is of benefit to all Canadians.

Part of the strategy is to continue on that path. I don't know if it's still named that or if it's some other title now, but as I said, within Health Canada, there is a component that has world-leading experts on age-friendly cities. We should perhaps put a little bit more money in that. It's a collaboration between the three levels of government to have these programs in cities.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

I'd like to hear more about the rural part of things, because the major cities really have it done well. It's the smaller communities that have limited access to doctors, have shortages. We paint everybody with the same brush, but we always miss out the rural communities, so if you could add that to your answer, I'd appreciate it.

[Jean-Guy Soulière]

That would be part of the strategy.

[Sayward Montague]

It would be part of the strategy. It's something to recognize that in Canada not all municipalities are created equal. It comes back to what I said to Ms. Blaney about the veterans independence program and what the discussion focused on earlier. There are great examples of innovative or sensible programs and use of resources to ensure that seniors' care needs are met in rural communities. I can think of one example where there's a coordination with paramedic and ambulance teams to do wellness visits, and so on, and flagging any areas that can be of concern for certain senior individuals within a community.

That exists in other countries. There are similar programs. It's having a good, hard look at those things and bringing it together under some coordinated umbrella or leadership with all three orders of government, but then looking at the home care, the health care situation. The retirement income security is vastly important and complex, as we heard today, so marrying it all together under a strategy is critical.

[The Chair, Liberal, Bryan May]

Thank you very much.

Majid, welcome. You have four minutes or less.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair. It's great to be on this committee for such an important topic.

My riding is Richmond Hill. I had the opportunity to hold a town hall meeting over the summer on seniors, as well as look at the 2015 data. What the data showed and what I heard in the town hall was alarming. The rate of increase of seniors in my riding was almost triple. We went from 10% in 2006 to about 14.6% in 2015.

Also, when we did the town hall, we heard there are two major issues. One was indexing, and the other one was home-based care by caregivers. I was glad to hear Mr. Janson touch on the indexing. If I understood you correctly, you talked about moving from a price-based system to an economy-based one.

Also, Bonnie, you touched on what I call home-based care services, through the model you mentioned, paying an informal caregiver.

I have two questions. They're questions more on the clarification of the definition, and also the economic impact, the dollar-value impact, because as a government we always say, “Where's the money going to come from?”

I'm going to start with Mr. Janson. Can you explain the impact of moving from a price-based to an economy-based system, and how we should account for that?

Then, Bonnie, could you explain where the money for paying informal caregivers should come from?

[The Chair, Liberal, Bryan May]

You each have about a minute.

[Mark Janson]

Regarding the price-based system, as I said, the chief actuary is predicting prices to increase by 2% a year, and the wage measure would be about 3% a year. Essentially, the OAS costs are increasing by 2% a year now; they would increase by 3%.

In one year, it's not going to make a huge amount of difference, but over 10 or 20 years it starts to add up significantly. The chief actuary has costed this in his recent actuarial reports. The numbers are there as to how much it would cost to move from a price-based system to a wage-based system. It's not especially cheap over the long run, but it's an important step. There are places where you could land in the middle, too, if you didn't have the fiscal room.

[Majid Jowhari, Liberal, Richmond Hill, ON]

How much money does that translate to, that 1% increase?

[Mark Janson]

I would have to confirm it in the report, but I believe his projection was that the difference 60 or 70 years from now would be about 1% of GDP in expenditure.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

[Dr. Bonnie-Jeanne MacDonald]

Also, moving things to wages, you're basically saying that you're keeping the seniors up more with wage growth in the economy, but with OAS and CPI, it is keeping up with inflation. A major concern of seniors is that they're finding with things such as their pension plans that aren't indexed to inflation, they're losing purchasing power. It's not the OAS. I think we have to make that differentiation.

[Majid Jowhari, Liberal, Richmond Hill, ON]

My question to you was more on paying informal caregivers. What is the cost of that?

[Dr. Bonnie-Jeanne MacDonald]

The idea with paying informal caregivers is that going forward there will be a much smaller supply of informal caregivers, because there are fewer children.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Yes.

[Dr. Bonnie-Jeanne MacDonald]

When there are fewer children, children have to make the decision, can I stay home and take care of mom and dad or will I go to work? If we can start paying them, then that's going to make that—

[Majid Jowhari, Liberal, Richmond Hill, ON]

What's the impact of the cost?

[Dr. Bonnie-Jeanne MacDonald]

I'm calculating the impact of the cost right now in a very large-scale study.

But to give you an idea of what the cost is, it's actually a cost savings because the idea is that you actually pay them less than you would a formal caregiver. For every dollar you would pay a formal caregiver, you're paying an informal caregiver, say, 60¢ on the dollar. So the government is going to be saving 40%.

Realize that right now 70% of all care is being done by the family, and right now we're getting a 70% discount on all our care needs for seniors across Canada. We will not get the 70% discount in the future. Half of provincial budgets are being paid on health care costs, and half of those health care costs are already for seniors.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay.

[Dr. Bonnie-Jeanne MacDonald]

We're getting a 70% discount, so I think that should raise some alarm bells.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

[The Chair, Liberal, Bryan May]

Thank you. It's a very good point.

For the final word, we go to Rachel.

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

Thank you.

I'm going to come back to you. I can hear your frustration. I just wanted to explore a little why you think they've stopped using the data. What would be the results in starting to move forward with using that data? If you have a minute at the end, just talk about how rural committees could be impacted. I represent a rural riding and one of the biggest challenges is the huge expense that exists for seniors living in remote and rural communities.

[Dr. Bonnie-Jeanne MacDonald]

Right. In terms of the idea of this big data, I was just visiting with Michael Wolfson. He was actually in charge of Statistics Canada when a lot of this stuff happened. Basically a number of years ago, they just felt the cost of sustaining this model.... They wanted to cut costs so they cut the model. I don't think the people who did it quite realized what they were doing. Basically we've been developing this model with teams of researchers in the government for 25 years. Baby boomers are retiring right now. This is the time we need the models to make really good decisions. What this model does, as I was explaining, is it actually takes all the data that we have, rural and urban, puts it together and gives us a fuller picture of Canada's needs and what happens when you change parts of the system. Where will the impacts be? What will the costs be to making those changes?

Going back to the urban-rural question, I did quite a bit of research on poverty for seniors and I actually did price out poverty lines across Canada based on the costs of goods and baskets. What I found time and time again is that the cost of goods in different cities across Canada differs by rent and by transportation costs, and food is pretty much the same. The big difference is going to be as soon as somebody has health care needs, and this is what distinguishes seniors from the rest of Canadians. Their poverty line, if you want to call it that, the senior poverty line for someone with a high level of care needs doubles. That's really the characteristic of differentiation.

For what you're saying, rural and urban, accessing good health care was an issue. Transportation was an issue for seniors because they don't have the public transportation systems. I think someone working on the ground could actually give more information. I work on more the data side of things.

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

What is always interesting to me is the intersect between data and actual realities on the ground and how do we make sure that those things fit together so that we are really facing and meeting the needs of people.

[Dr. Bonnie-Jeanne MacDonald]

Right.

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

My last question is going to go back to you.

One of the things, Ms. Mackenzie, that I've heard a lot about is around the caregiving and how much of a challenge it is to find people to do the work and how we're seeing poaching happening across that sector. You're talking about the national standards. How can we make those things work together so that we can see more people training perhaps? I don't know what the solution is. I'm asking you if you know.

[Isobel Mackenzie]

I think the solution is going to come from working with immigration around whether we need to look at the temporary foreign worker program and how that has to be potentially recalibrated. I think that it is working with the post-secondary sector around training, and I think it is actually working—this is more a British Columbia perspective—with our unions around a model of.... We have the apprenticeship model for many trades. I would like us to look at a potential apprenticeship model for caregivers so that people can start to get their training and earning money at the same time.

One of the big impediments is the investment you have to make up front in the training before you're able to earn wages. If you adopt an apprenticeship model, you can help address that to some extent.

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

Would that address the international standards?

[Isobel Mackenzie]

That's correct.

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

Thank you so much.

[The Chair, Liberal, Bryan May]

Thank you to all of you. I know I sure learned a lot today. There was a lot of information and I heard a lot of clicking going on and scratching of pencils.

I sincerely thank you. I spoke with a few of you at the beginning of today about submitting reports, so I'll mention it again. I know we didn't have a long introduction, but if there are reports, specifically if you are wrapping up the C.D. Howe report, if it's possible to share that with us, I'm sure we would all benefit from that. But if any of you have reports you'd like to submit, please do so with the clerk.

Thank you all very much. I hate to do this, but I do have to rush you out. We're going to suspend for 90 seconds and then come back for some committee business.

Thank you very much.

[The Chair, Liberal, Bryan May]

Welcome back.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Can we call the question now?

[The Chair, Liberal, Bryan May]

We can call the question.

[Peter Kent, Conservative, Thornhill, ON]

Do we need the motion read into the record, Mr. Chair?

[The Chair, Liberal, Bryan May]

No, I don't believe so. It has already been posted.

[Peter Kent, Conservative, Thornhill, ON]

Okay.

[The Chair, Liberal, Bryan May]

Is there any discussion?

All those in favour of Mr. Blaney's motion?

(Motion negatived [See Minutes of Proceedings])

Thank you very much. Have a great Thanksgiving, everybody.

Thank you to everybody who made today possible. The meeting is adjourned.