Evidence of meeting #99 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was seniors.
A recording is available from Parliament.
Conservative
Tracy Gray Conservative Kelowna—Lake Country, BC
On a point of order, Mr. Chair, to be clear, do we have only 15 minutes with Ms. Larouche?
Conservative
Tracy Gray Conservative Kelowna—Lake Country, BC
Perhaps we can invite Ms. Larouche back at another time so that she would get the full amount of her time.
Conservative
Tracy Gray Conservative Kelowna—Lake Country, BC
It's either that or the witnesses we had scheduled in the second hour get invited back at another time, perhaps, whatever might work best for everyone, just so we don't cut into their time.
Liberal
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
I would suggest that we give MP Larouche her 15 minutes but invite her back for more time. We already have witnesses scheduled at 9:15. Let's continue with the witnesses. My apologies to MP Larouche, but let's find some time to invite her back after this.
Thank you.
Liberal
The Chair Liberal Bobby Morrissey
What I'm going to suggest is that we would proceed with that, and we would invite Madam Larouche back for the hour slot that we have set up for committee business for next week. Would that be okay? We were doing a subcommittee.
Do I see a consensus on that?
Liberal
Bloc
Louise Chabot Bloc Thérèse-De Blainville, QC
I want to point out that there's consensus on inviting the sponsor of Bill C‑319 back for the full hour that was planned. I still want to express my sincere regret that we're starting this study this way. However, I agree with inviting Ms. Larouche again.
Again, our apologies, Ms. Larouche.
Liberal
The Chair Liberal Bobby Morrissey
Thank you, Ms. Chabot.
That's my understanding. It's the consensus in the committee that we would invite Madame Larouche back for one hour at the first appropriate meeting, which I'm going to say is for the hour slot that we had identified for committee business for next Thursday's meeting.
Madame, is that good?
Liberal
The Chair Liberal Bobby Morrissey
At this time, Madame Larouche, we will still allow you an opening statement.
You have the floor.
Bloc
Andréanne Larouche Bloc Shefford, QC
Mr. Chair, if I understand correctly, I'm giving my opening remarks now, but I'll answer questions later.
Good morning, everyone.
Dear committee members, thank you for having me this morning so we can look at Bill C‑319 together. It's a relatively simple but vital piece of legislation aimed at improving the financial situation of seniors during really tough economic times.
At the heart of the bill is a two-pronged approach to addressing seniors' needs. First, the bill would amend the Old Age Security Act to eliminate the age discrimination that currently exists in our system. This bill would increase the amount of the full pension to which all pensioners aged 65 and older are entitled to by 10%. This will correct a glaring injustice, as, since 2022, only seniors aged 75 and over have been receiving the 10% increase, leaving a large portion of all pensioners in a precarious financial situation.
Second, the bill would raise the exemption for a person's earnings taken into account in determining the amount of the guaranteed income supplement from $5,000 to $6,500 per year. This means that each recipient aged 65 and older will have an extra $1,500 in their pocket each year. That's significant financial support in an environment where prices are rising exponentially.
Recognizing that this is an urgent issue is crucial. More than 7.25 million Canadian seniors and 1.8 million Quebec seniors benefit from the old age security program. Given that more than 3.7 million Canadians are between the ages of 65 and 74, enhancing the old age security program is imperative. Support meant only for people aged 75 and over helps only 2.8 million people. It is missing the mark by helping a minority of seniors and abandoning the majority of them. We need to take action to support seniors, who have made an important contribution to our society.
The facts speak for themselves. We see seniors spending a disproportionate amount of their income on housing and food, expenses that have gone up significantly. In addition, an alarming number of seniors find themselves in situations where housing absorbs too much of their income, making their daily lives even more difficult.
It's also important to note that poverty among seniors is a worrisome reality. In 2020, 13% of seniors were living in poverty, a rate higher than that of all other age groups. It's our responsibility to ensure that seniors can live with dignity after dedicating their lives to the well-being of our society.
Finally, we must consider the financial cost of this bill. The proposed increase in benefits represents a significant investment, estimated at $16 billion over several years, but we must consider it an investment in our society and in the dignity of seniors.
As I bring my remarks to a close, I will say that Bill C‑319 is a crucial opportunity to correct injustices and support seniors in tough economic times. We can't turn our backs on those who have given so much to our society. Approving this bill signals that we value seniors and are committed to ensuring their well-being in the years to come.
This debate and this battle have been going on for a long time. Long before I entered politics, I knew seniors were in distress. Between 2007 and 2011, I worked as a staffer, and even then I noticed that many of the people in financial distress who came to the office were seniors. After that, I worked in community groups. We talked about abuse and poverty. The message I'm sending now with this bill is that we want to help the seniors who are struggling the most and will not give in to gloomy pessimism.
Seniors who are willing and able can also help address another problem we're facing: the labour shortage. As some of them reminded us, they want to contribute to society and stay in the labour market, but, under the current system, they're penalized if they do so.
My bill would really do two essential things. One, it would allow seniors who are willing and able to keep working, since there are lots of benefits to that, and, two, it would give seniors a little extra help from their old age security pension.
Thank you very much, Mr. Chair.
Liberal
The Chair Liberal Bobby Morrissey
Thank you, Ms. Larouche.
It would be a disservice to Madame Larouche on this important topic to begin for a few minutes.
What I'm going to do is suspend. The committee made a decision to invite Madame Larouche back for the full one hour of questions and answers at the meeting I identified.
We will suspend so we can start on time with the witness portion of this committee meeting.
With that, thank you, Ms. Larouche.
We'll suspend while the witnesses are being brought in.
We'll start the second hour at 9:15.
We are suspended.
Liberal
The Chair Liberal Bobby Morrissey
The committee is back in session.
I would like to welcome the following witnesses for the study of Bill C-319.
From the Canadian Centre for Caregiving Excellence, we have James Janeiro, director, policy and government relations. From Réseau FADOQ, we have Gisèle Tassé-Goodman, president, provincial secretariat, and Philippe Poirier-Monette, special adviser, government relations. As an individual appearing virtually, we have Arthur Sweetman, professor, McMaster University.
We'll begin with a five-minute opening statement from Mr. Janeiro.
James Janeiro Director, Policy and Government Relations, Canadian Centre for Caregiving Excellence
Good morning, ladies and gentlemen, and Mr. Chair. Thank you very much for the invitation and the opportunity to speak this morning as part of your study on this very important bill.
I am James Janeiro and I'm with the Canadian Centre for Caregiving Excellence. We are a pan-Canadian organization focused on caregivers, which is to say parents, siblings, friends, neighbours and the like, as well as care providers such as personal support workers and direct support professionals who support people with disabilities all across our country. Our goal is to make Canada the best place in the world to give and receive care.
The intent of Bill C-319 is to raise the pension incomes of retired Canadians. This is both timely and urgently necessary, in our opinion. The National Institute on Ageing recently released their 2023 “Aging in Canada” survey results. This survey of Canadians 50 and over has helped illuminate what caregivers across the country already know: Seniors are feeling the financial pinch resulting from the ongoing cost of living crisis. An overwhelming 70% of survey respondents reported that they are concerned with the rising cost of living, and nearly 50% worry about running out of money. Sadly, over one-third reported worrying about a reduction in pension or other government benefits.
This problem of pinched household budgets due to the cost of living crisis becomes even more urgent when the low-income senior is also a caregiver. One in four Canadians are caregivers today and half of us will be a caregiver at some point in our lives. Today, in 2024, women in Canada are just as likely as not to be a caregiver already. For many of these caregivers, financial distress is at the top of their very long list of struggles. Mercilessly increasing grocery and other bills has made an already difficult situation much worse. Recent data shows that nearly two-thirds of caregivers reported financial hardship last year due to their care responsibilities.
A recent survey conducted by us at the Canadian Centre for Caregiving Excellence found that over two-thirds of people receiving care in Canada are themselves seniors. In addition, approximately 20% of caregivers are also seniors. Of those senior caregivers, 80% care for other seniors, such as wives, adult children, husbands or even their parents. For these seniors, struggling through the already threadbare social safety net designed to help them is part of their daily reality.
Statistically, senior caregivers are mostly women and they have likely had to take time off work at some point in their lives to have children or to care for somebody else. This means they lost out on years of CPP contributions, which continues to punish them for caring for others through lower CPP payments well into their senior years. Imagine worrying about how to pay the rent or feed your ailing wife while also bathing her and coping with cognitive decline. Unfortunately, this is the daily reality of nearly a third of caregivers in their older years, who reported some kind of economic strain due to their care responsibilities.
Seniors are crying out for solutions. We spent the last year advocating for the Canada caregiver credit to be converted into a refundable tax credit. While out of the scope of this study, it would certainly help, as would the provisions in this bill, which would go a long way towards solving the cost of living crisis for seniors.
We strongly endorse this bill. Seniors helped build Canada and are often called upon to look after others during what should be their years of rest and relaxation. The least we can do is adjust our very successful national programs like the CPP to meet the challenges of the current crisis and make sure seniors' lives are a little easier.
Thank you very much.
Liberal
The Chair Liberal Bobby Morrissey
Thank you, Mr. Janeiro.
Ms. Tassé-Goodman, you have the floor for five minutes.
Gisèle Tassé-Goodman President, Provincial Secretariat, Réseau FADOQ
Thank you, Mr. Chair.
Ladies and gentlemen members of Parliament, my name is Gisèle Tassé-Goodman. I am the president of the Réseau FADOQ.
With me is Philippe Poirier-Monette, special advisor on government relations.
I would like to thank the members of the committee for this invitation to comment on Bill C‑319.
The Réseau FADOQ is a group of people aged 50 and over with more than 550,000 members. In each of our interventions at the political level, we want to contribute to improving seniors' quality of life. At the outset, I must emphasize that Bill C-319 deals with a subject that is of great concern to seniors. Not a day goes by that our members do not ask us about the old age security pension or the guaranteed income supplement. So we are bringing their voices here today, in this committee.
In July 2022, old age security was increased by 10% on a permanent basis for those aged 75 and over. Enhancing this benefit was and continues to be necessary. However, people aged 65 to 74 do not understand why they are excluded from this increase. Currently, a person under the age of 75 receiving only the old age security pension and the guaranteed income supplement has an annual income of $21,345. A senior in this situation has an income that puts them below the official poverty line in Canada, which is based on the market basket measure. Let's remember that this index establishes the cost of a bare subsistence basket. It excludes things like dental care, eye care, as well as the purchase of medication, which are vital expenses for seniors.
Bill C-319 proposes to increase the amount of the full pension by 10% for those aged 65 to 74. The Réseau FADOQ supports this proposal, since financial distress has no age. This amendment will enable all persons aged 65 and over to access the same full pension amount, without age-based discrimination.
The other measure proposed by Bill C-319 is an increase in the guaranteed income supplement earnings exemption for recipients. Currently, it is possible for these individuals to earn up to $5,000 in employment income while collecting all of the guaranteed income supplement benefits. For earnings between $5,000 and $15,000, a partial exemption applies. Over the past few years, the Government of Canada has increased the earnings exemption a few times, and every time, the Réseau FADOQ applauded that decision. This is a measure that reduces the effects of a tax trap that discourages guaranteed income supplement recipients from remaining in the labour market. In addition, in the context of a labour shortage, this measure would be well received.
Let's not forget that, during the last election campaign, the Government of Canada promised to introduce a tax credit for experienced workers. Since that tax credit has still not been implemented, increasing the guaranteed income supplement earnings exemption would be a step in the right direction.
In closing, we feel obliged to address two aspects that are not affected by Bill C-319.
During the 2021 election campaign, the federal government made a commitment to increase the guaranteed income supplement. Three years later, seniors are still waiting. The Réseau FADOQ encourages the Government of Canada to keep its commitment.
Finally, we must also address the shortcomings in the way old age security is indexed. This program is indexed based on the consumer price index, while wages change about a percentage point faster. As a result, federal benefits will play an increasingly smaller role in the retirement income replacement rate in the future. Our organization is asking the government to revise the indexing method for the old age security program in order to take wage growth into account.
I would like to thank the members of the committee for listening to us. We look forward to your questions. Mr. Poirier-Monette will answer questions, and I will reserve the privilege of getting involved.
Thank you.
Liberal
The Chair Liberal Bobby Morrissey
Thank you, Ms. Tassé-Goodman.
Mr. Sweetman for five minutes, please.
You have the floor.
Professor Arthur Sweetman Professor, McMaster University, As an Individual
Thank you for inviting me to speak today.
As background, I’d like to start by considering low income in Canada.
Using the market basket measure, in 2019, 10.3% of persons in Canada fell below the low-income threshold. Those under the age of18, at 9.4%, were somewhat less likely to be low income than the average. Those between the ages of 18 and 64 had an above average low-income rate of 11.8%. Of relevance today, those aged 65 and over, at 5.7%, had the lowest likelihood of being in low income among these three age groups.
While there are individuals over age 65 who have low incomes, Canadian programs have been very successful in reducing low-income rates for this age group to below that of society as a whole.
Turning to Bill C-319, as I understand it, two changes are proposed. I will focus on them in turn.
The first will increase what I call the earnings disregards for the guaranteed income supplement, the GIS. Since 2020, the two disregards have been $5,000 each. Current GIS recipients face a three-stage regime. In stage one, the first $5,000 in annual earnings have no effect on their GIS benefit; in stage two, the next $10,000 in earnings are taxed at a maximum of 50%, and second, there's $5,000 disregard. In stage three, earnings beyond $15,000 are taxed at 100% to the full amount of the GIS.
The bill proposes to increase both the stage one and stage two disregards to $6,500 while retaining the stage two tax rate of 50%. This implies that GIS recipients would be able to earn up to $6,500 per year without their GIS amount being affected and that they would then face a 50% tax rate on earnings between $6,500 and $19,500. Beyond $19,500, they would face 100% tax rate. Of course, the eligibility threshold for GIS is not much above $19,500 for a single individual.
I see two obvious motivations for this proposed change. The first would be to provide additional income to low-income seniors who are already earning more than $5,000 per year. The second would be to incentivize low-income seniors to increase their labour supply. However, among low-income seniors, those with the lowest pre-retirement incomes are least likely to work post age 65, so those with more disadvantaged backgrounds are least likely to benefit from this change.
Also, previous changes to the GIS appear to have had modest impacts on changing labour supply among GIS recipients. I suspect that this proposal would similarly have a positive but very modest impact on earnings.
Overall, while the potential policy change will probably not have much impact on extreme poverty, it will benefit those who are low income and who already earn more than $5,000 per year. I therefore see this as worthwhile since it will help some low-income working seniors. It rewards work and hopefully incentivizes it.
Turning to the second part of the bill, it proposes to increase OAS payments to those aged between 65 and 74 by 10%. Over 95% of individuals in this age category receive at least some OAS income, so this part of the policy change is not exclusively targeted at low-income seniors.
Compared to the first part of the bill, this is a much more expensive proposal for taxpayers. My best guess, derived from calculations based on an Office of the Superintendent of Financial Institutions’ report, is that this policy change would cost between 0.15% and 0.2% of GDP. This is a very rough guess, and it's also a very big number.
Further, in terms of labour market incentives, although any effect is likely to be small, I expect it to decrease rather than increase labour supply and earnings. A greater concern is that it’s not obvious that the federal government currently has sufficient fiscal capacity to undertake an expenditure such as this while simultaneously building, for example, a robust pharmacare program. I think the opportunity cost of the funds for this second policy change need to be considered very carefully. Undoubtedly Canadians’ views will differ, but I think that many, including many seniors, would find greater dignity in and prefer alternatives such as spending money on improved health care rather this non-targeted increase to OAS payments.
If, additionally, we are worried about seniors living with dignity and avoiding low income—or, more broadly than low income, avoiding poverty—then a targeted proposal would be preferable to this broad-brush approach.
Thank you very much for your attention.