Evidence of meeting #66 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was literacy.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Nicole Laveau  Representative, Comité retraite et fiscalité, Association québécoise de défense des droits des personnes retraitées et préretraitées
Irene Sheppard  Executive Director, Fraser Health
Michael R. Veall  Professor, Department of Economics, McMaster University, As an Individual
Jane Rooney  Financial Literacy Leader, Financial Consumer Agency of Canada
Sébastien Larochelle-Côté  Managing Editor, Education, Labour and Income Statistics Branch, Statistics Canada
Andrew Heisz  Assistant Director, Income Statistics Division, Statistics Canada
Pamela Best  Assistant Director, Social and Aboriginal Statistics Division, Statistics Canada

3:30 p.m.

Liberal

The Chair Liberal Bryan May

Good afternoon, everybody.

Welcome, everyone, to the HUMA committee. Pursuant to Standing Order 108(2) and 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 third of three panels that will be held on the subject of income security for vulnerable seniors. We have a very large panel today.

Before I introduce the panel, I will let you know that we will likely be interrupted by votes at about 5:15, just so that you can be prepared for that. Also, if you see me raise my pencil or my finger, it means you have approximately one minute left before I have to cut you off.

Mark?

3:30 p.m.

Conservative

Mark Warawa Conservative Langley—Aldergrove, BC

Chair, just on a quick point of order, Mr. Wayne Long hasn't been with us. He's a member of the committee and he's been gone now for a number of weeks. Is there something we need to be concerned about?

3:30 p.m.

Liberal

The Chair Liberal Bryan May

As you know, it's been fairly public as far as I'm aware, that Mr. Long is no longer on this committee.

3:30 p.m.

Conservative

Mark Warawa Conservative Langley—Aldergrove, BC

Oh, I—

3:30 p.m.

Liberal

The Chair Liberal Bryan May

We can talk about that after, if you wish.

3:30 p.m.

Conservative

Mark Warawa Conservative Langley—Aldergrove, BC

I hope the reports aren't true that the Prime Minister has removed him from this committee, because I think he was a very constructive member of it. I think it's important that we not be puppets on a string, that there be committee independence, because that's what the Prime Minister said we would have. If members are being kicked off for representing their constituents, I don't think that's a good message.

3:30 p.m.

Liberal

Dan Ruimy Liberal Pitt Meadows—Maple Ridge, BC

On a point of order—

3:30 p.m.

Conservative

Mark Warawa Conservative Langley—Aldergrove, BC

This is a point of order.

I raise that as a concern. I think it's important that we maintain our committee independence.

Thank you.

3:30 p.m.

Liberal

The Chair Liberal Bryan May

Well, having chaired this committee for the last two years, I can proudly say that I have never felt that I've been under any thumb, so I can reassure the member that we remain and will remain an independent body.

I believe we have another point of order.

No? We're passing on that?

Thank you very much.

Without further ado, I'd like to introduce the panel we have before us.

From the Association québécoise de défense des droits des personnes retraitées et préretraitées, we have Nicole Laveau, representative, coming to us via Quebec.

From Surrey, British Columbia, via video conference we have, from Fraser Health, Irene Sheppard, executive director.

Coming to us as an individual we have Michael Veall, professor in the department of economics at McMaster University. Welcome, sir.

Also we have Jane Rooney of the Financial Consumer Agency of Canada. Welcome.

We have a number of people from Stats Canada today: Pamela Best, Andrew Heisz, and Sébastien Larochelle-Côté. Thank you all for being here.

We're going to get started with seven-minute presentations. We're going to begin with Nicole, who is coming to us from Quebec.

The next seven minutes are yours, Nicole.

3:30 p.m.

Nicole Laveau Representative, Comité retraite et fiscalité, Association québécoise de défense des droits des personnes retraitées et préretraitées

Thank you very much.

A few days ago, we received an invitation to appear before the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities on the theme of income security for vulnerable seniors. Thank you for inviting our association to present its point of view.

In 2016, the Association québécoise de défense des droits des personnes retraitées et préretraitées, or AQDR, conducted an extensive consultation both with its members and with the general public. That consultation concerned 10 rights and four challenges, including poverty. It is summarized in the document we have submitted to you, which also includes a link to our website. Our main concern is to improve the quality of life of seniors.

What is the low-income cutoff threshold? There is a definition of it on page 4 of your report, but we could not find its dollar value in the report. Only percentages are provided. On page 1 of the document we submitted, we provided a reference source we found, Retraite Québec, for the low-income cutoff. We indexed that amount to take inflation into account and ended up with about $24,460.

Who are the vulnerable seniors of today? They are seniors who are alone or have little support from a family member. They are often isolated and lack companionship. They are seniors who earned an income that can be described as low or average, who worked over a limited period of time and have little savings. They are seniors with physical or mental health problems.

Statistical evidence shows that women live longer than men. Individuals who are now aged 75 and over earned a low income or no income, having mostly been homemakers with no earnings. In those days, planning your retirement was not a priority nor was it popular; it was only for rich people.

Why have most of those seniors become vulnerable? They were often not used to asking for help. They are embarrassed to ask for something, as they don't want to bother anyone. They were self-sufficient in the past and capable of surviving and living. They may have also experienced the sudden loss of their spouse, which radically changed their lives.

How can someone survive with less than the low-income cutoff?

In the 2017 federal budget, the government increased the maximum GIS benefit by 10%, but only for single seniors. Imagine the frustration and the feeling of unfairness for senior couples! An effort was made, but it is clearly insufficient. A new increase should be planned to move toward an increase of at least 15% for the entire client base.

Individuals who are eligible for the GIS are those who did not earn a high income during their working lives and did not have access to an employer-sponsored pension plan. Seniors with no source of public income are living significantly below the poverty line, and that leads to a risk of malnutrition, health problems and social isolation. This is a tragic situation. Added to that over the past several years is the material or financial abuse of that clientele.

When we make a senior's budget, it is easy to see that their income is too low. I show that in the document I submitted.

The tax-free guaranteed income supplement should cover the shortfall between old age security combined with other income sources and the low-income cutoff. That could be the basis of a minimum guaranteed income, which is different for every individual based on the federal income tax return.

Which senior can have the assurance of making the right choice when they complete an application for old age security or the GIS?

A few years ago, in response to political pressure from groups representing seniors, it was shown that a large percentage of that clientele did not claim its entitlement to the GIS. What about the spouse's allowance for individuals aged 60 to 64? Do they all claim it?

The federal government has all that information in the tax data from individual income tax returns. Data could be reconciled easily with today's computer equipment, and that would simplify everyone's work.

We know that the majority of seniors are known to be discreet about their accumulated wealth. They are apprehensive about relying on others after bad experiences in the past.

Many of those people did not do any major studies or even graduate from high school. For most of them, economics are limited to saving and having no debt. Saving is possible with a decent income. However, if someone has earned the equivalent of minimum wage or slightly more over the past 30 years, they had several children at home and their spouse did not work, it was very difficult for them to save for their retirement.

That is mainly why we are recommending solutions 4 and 5. I did not read them out, but they are in my presentation. In the absence of a support service, a number of community organizations across Canada could certainly provide that service if they were subsidized accordingly. Those organizations are closer to that vulnerable clientele and are more numerous across the country than Service Canada offices.

We have read in the papers horror stories about companies closing abruptly, often because they go bankrupt or struggle financially. Suddenly, employees' pensions would be reduced by more than 40%, which is drastic. Solution 7, which is in my presentation, asks the Government of Canada to take the necessary steps to address this unfairness in the Bankruptcy and Insolvency Act, so that pensioners would become priority creditors.

In closing, solution 1 is clear: the government should guarantee a retirement income of at least the equivalent of the low-income cutoff. Regardless of the means, every senior should reach the equivalent of the low-income cutoff individually.

I see how quickly seven minutes go by.

Thank you.

3:40 p.m.

Liberal

The Chair Liberal Bryan May

It does. Thank you very much.

3:40 p.m.

Conservative

Steven Blaney Conservative Bellechasse—Les Etchemins—Lévis, QC

Mr. Chair, may I ask something?

3:40 p.m.

Liberal

The Chair Liberal Bryan May

Yes.

3:40 p.m.

Conservative

Steven Blaney Conservative Bellechasse—Les Etchemins—Lévis, QC

During her presentation, Ms. Laveau referred to a document several times. Can the committee members have access to that document?

3:40 p.m.

Liberal

The Chair Liberal Bryan May

We did receive the document, but it was only in French. We were unable to translate it, but we will get that to everybody.

3:40 p.m.

Conservative

Steven Blaney Conservative Bellechasse—Les Etchemins—Lévis, QC

So we will get the document once it has been translated, right?

3:40 p.m.

Liberal

The Chair Liberal Bryan May

I have no translation here.

3:40 p.m.

Conservative

Steven Blaney Conservative Bellechasse—Les Etchemins—Lévis, QC

Mr. Chair, when do you think this document will be available?

3:40 p.m.

Liberal

The Chair Liberal Bryan May

In a couple of days, with the translation....

3:40 p.m.

Conservative

Steven Blaney Conservative Bellechasse—Les Etchemins—Lévis, QC

Okay.

3:40 p.m.

Liberal

The Chair Liberal Bryan May

We didn't receive it in time, unfortunately.

We'll move on quickly. From Fraser Health, we have Irene Sheppard.

October 17th, 2017 / 3:40 p.m.

Irene Sheppard Executive Director, Fraser Health

Thank you, Mr. Chair, and members, for this opportunity to speak.

I have held a variety of roles in health care for over 35 years, and much of my work has revolved around seniors. Currently I am the executive director responsible for residential care and assisted living for the Fraser health region, which encompasses a population of 1.8 million.

My comments today arise from my observations and experience over the past few decades.

I've learned that defining a senior is like trying to define a sunset: no two are truly alike. There are some general categories, of course, ranging from the vibrant, active senior to the physically and cognitively frail senior, but age is not the defining characteristic of a senior.

Poverty is also about a lot more than income. It's about attitude and beliefs, life skills, personal resilience, and personal support systems. I find in my work that there are so many myths about seniors: that aging is depressing so just expect to be depressed when you get old; that dementia is the inevitable if you live long enough; that when you're old it's too late to start exercising; and that everyone goes into a care home when they get old.

The truth is that seniors tend to have better mental health than those who are younger. They're more accepting of life and they appreciate what they have. Research is showing that social connections are as relevant as genetic makeup and lifestyle to the health and longevity of adults.

Using B.C. statistics, only one out of 20 persons who are between the ages of 65 and 84 have dementia. One out of four who are 85 and older have dementia. That means that three out of four seniors who are over 85 do not have dementia. Furthermore, in B.C., about eight out of 10 seniors live on their own in a community, with the other two out of 10 being in a care home.

We know from experience that people can continue to live in their own homes in familiar surroundings even if they have mild dementia, and some can with moderate dementia if they have the supports. As a former physical therapist, I can tell you that the science shows that everyone can benefit from exercise, no matter what age they are when they start.

The decline caused by biological aging can be mitigated with planning and the use of simple approaches to life. We don't know yet what innovations will change the experience of aging, but there is enough to suggest that there are going to be significant opportunities afforded by emerging technology. We need to search out those technologies, facilitate innovation, and make it affordable and accessible so it can spread to all seniors, regardless of income, location, or technological literacy.

At the same time, adults need to take personal responsibility to plan and invest for their future and prepare themselves for making the decisions that will support them to age well in their own home.

There are some things that we need to think about. For seniors who are hoping to age with some grace, housing is critical. It's one of our basic needs, and they need to wrap their head around the fact that if the family home has the bedroom on the second floor, they may need to sell it and buy that one-floor condo while they're still young enough to make friends and adjust to the change. If they're building a home, they need to think about putting the master bedroom and an accessible bathroom on the main floor, and maybe include a suite for a live-in helper, and if there are stairs, they need to make sure that they're built so they can add a chair lift, and always wire the home for technology.

In terms of managing the home and life, you can make life easier with automatic deposit of income and automatic payment of bills. Make sure you purchase appliances with an automatic shut-off, whether it's the iron, the kettle, or the stove. Purchase a fridge that beeps when the doors aren't quite shut. Have remote controls to turn lights on and off. Simplify the surroundings. Declutter the rooms of furniture and knick-knacks, and declutter the cupboards and the papers in order to make it easier to keep clean and not be overwhelmed as energy wanes.

These are simple things. They make a difference.

When we look at new buildings, whether it's condos, townhomes, or houses, we should be requiring that the wiring allow smart homes to happen. Today we already have that technology, whether you call it granny cams, or whatever. You can have smartphone apps that allow adult children to live far away from their mom and dad and able to observe things like the blister pack of medications, and whether the doses were taken that day, or to take a look at who is coming in and out of the front door. There can be sensors in the bed or chairs, so that you can see the patterns, and the app alerts you if there's a change to the normal pattern. You can have GPS trackers for those who wander. The technology already exists, and it's probably only the start.

In terms of supporting the care side, I think there are two categories to look at. One is the informal or unpaid caregivers. We need to strengthen policies and incentives like compassionate care benefits and income tax deductions for adults with a disability who are dependants. We know that families are willing to care, but they do need workplaces that support them to do so. Employers are willing to support employees to care, but not at a cost to their bottom line.

Supporting the informal caregiver has an economic benefit to the country, but more importantly, it's a societal good. Paid caregivers are also critical to supporting individuals with their functional dependencies. They provide important personal care, yet there are gross inequities in pay and hours.

My recommendations are threefold; to foster innovation through grants and policy regarding affordable home adaptations and/or technology to compensate for loss of physical and/or cognitive function; to foster grants and policy relating to housing that's affordable and design-built to be accessible, and promoting of social connecting; and to address pay and work environment inequities for personal care workers, and strengthen policies and incentives for informal caregivers.

Thank you.

3:45 p.m.

Liberal

The Chair Liberal Bryan May

Thank you very much.

I would now like to welcome Mr. Michael Veall, a professor with the department of economics at McMaster University, just down the street from Cambridge.

Welcome, sir. The next seven minutes are yours.

3:45 p.m.

Dr. Michael R. Veall Professor, Department of Economics, McMaster University, As an Individual

Thank you for the invitation. I will speak only to the income security goal.

As my fellow economist, Professor Tammy Schirle, told you two weeks ago, the reduction in senior poverty is a great Canadian policy success, from close to 70% 45 years ago to about 13% in 2015. No other country has done as well.

However, about 10 years ago, senior poverty was down to 6%. It has in fact been increasing recently. Why is there this recent increase in measured poverty in the older population? There are many seniors who are almost entirely dependent upon OAS and GIS, and that puts them very close to the most commonly used poverty cut-off, which is called the low-income measure. The low-income measure increases with wage inflation. OAS/GIS is indexed by price inflation. In what is overall good news, wage inflation has recently been greater than price inflation, so a fair number of seniors, especially the currently unmarried, who would have been just above the cut-off, are now somewhat below. These seniors, on average, might have the same standard of living they had 10 years ago, which no one would say is high, but on average they are also relatively poorer when compared to current wage earners.

How do we move forward? That's very much a matter of value judgments; hence, everyone's answer is going to be personal. Along with what other witnesses have said, I think one key is to increase the number of seniors who are earning wages and not receiving as much OAS and GIS. I think everyone understands that the OAS/GIS system becomes a lot more expensive if you keep the age of retirement at 65 while average longevity increases from 72 years of age to 80 years of age to more.

Many countries, from Sweden to the United States, have increased the age of eligibility for public pensions or public transfers to the older population. More senior labour force participation also increases average productivity, average incomes, and tax revenues. Of course, any increase in eligibility age would have to be very gradual, with the full increase taking decades, not years.

For some seniors, an increase in the OAS/GIS eligibility age would be an excessive hardship because they have already lost their jobs with no prospect of finding a new one. Some will have bad health. They may be just hanging on until they get into the OAS/GIS system.

Your witness Richard Shillington had a suggestion to keep GIS eligibility at 65 and only delay OAS eligibility, all designed so there would be no effect on poor seniors. As the new system matured, more fortunate seniors would work longer, but these people would also be the ones benefiting from what we expect to be a continued and wonderful trend to greater longevity and more years with good health.

Let me reinforce another point Richard Shillington made. Potential GIS recipients should not be contributing to RRSPs, at least until they have maxed out on their TFSAs.

I wrote an article about this in the Canadian Tax Journal , as well as a couple of op-eds. As an example, suppose someone I will call Chris is 64 and puts $1,000 in an RRSP. Chris is in the 20% tax bracket and therefore gets a tax refund that year of $200. Then Chris becomes eligible for GIS at age 65. Now when Chris takes that $1,000 out of the RRSP, it is going to cost Chris much more than $200. The GIS clawback will be at least $500, and with other clawbacks and tax, it is possible to lose the whole $1,000. Furthermore, if someone knows they are going to be GIS eligible, it is often better to take money out of an RRSP at age 64 and pay the tax on it then, rather than be subject to the clawback, especially if it enables a larger TFSA contribution.

It is actually hard to know what to do about this in terms of public policy. Perhaps that will come up in questions. Maybe we can collectively do our best to inform our fellow citizens, your constituents, who are not yet GIS recipients but will likely be when they are 65, to use TFSAs rather than RRSPs as their primary saving vehicle, and if they already have significant RRSP holdings, they may benefit from consulting a financial planner immediately.

Thanks very much.

3:50 p.m.

Liberal

The Chair Liberal Bryan May

Thank you very much, sir. I appreciate that. You're well under time as well, so thank you.

Now we are going to Jane Rooney, financial literacy leader, with the Financial Consumer Agency of Canada. The next seven minutes are yours.