Status of Women Committee on Feb. 15th, 2007

[The Chair, Liberal, Yasmin Ratansi]

I'd like to bring the meeting to order.

Members of the committee, what I'd like to do is read the following, so that the focus of the witnesses and of the committee will be one and the same:

At its meeting on 30 May 2006, the Standing Committee on the Status of Women adopted a motion to undertake a study of the economic security of senior women, including an exploration of income-splitting and caregiving.

The committee has heard that women earn less than men and experience higher levels of low income than men, including during their senior years. What the members have agreed is to discuss a wide range of factors, including the economic costs incurred by women, women's disproportionate share of non-standard work, lack of education, and awareness of the long-term implications.

We would like to study public policy options that could support a greater choice for women, in terms of choosing to engage in paid work or to spend more time in unpaid caregiving work.

Today we have before us as witnesses, from the Canadian Centre for Policy Alternatives, Ms. Monica Townson; from the Department of Human Resources and Social Development, Ms. Glover and Ms. Poter; and from Stats Canada, Mr. Lindsay, Ms. Michaud, and Mr. Stone.

I'm told by the clerk that she has advised each group—i.e., the Canadian Centre for Policy Alternatives, the Department of Human Resources and Social Development, and Stats Canada—that you have ten minutes of presentation per group. How you divide the time is up to you. I am a very strict clock-watcher. I will give you ten minutes and will give a sign, and we will ask that you stop after ten minutes.

We would like to keep it a very interactive session. Members will be given opportunities to ask questions for seven minutes, and if they interrupt you, it's because you have not answered their question.

With that, I'd like to start off with Ms. Townson, for ten minutes.

[Monica Townson, Research Associate, Canadian Centre for Policy Alternatives]

Thank you very much for inviting me to speak before you today. I know that you've already heard from the National Council of Welfare and the National Advisory Council on Aging, among others. Those organizations presented you with detailed information about the economic situation of senior women and about programs and policies that affect them. What I have to say today may repeat some of what they've already told you, but I think to some extent that's inevitable.

I'm going to base some of my comments today on a comprehensive report I wrote for Status of Women Canada's policy research fund, which you may have seen. It's called Reducing Poverty Among Older Women: the Potential of Retirement Incomes Policies. In that report, you'll find a detailed analysis and recommendations. Perhaps I can direct you to it for more details.

The good news, of course, is that Canada has made quite a bit of progress in improving economic security for senior women over the past 20 years or so, thanks largely to our public pension programs, such as OAS, GIS, and the Canada and Quebec Pension Plans. After taking government transfers and taxes into account, about 7% of senior women lived in low income in 2004, although that was double the rate of senior men who had low incomes. This compares with a low income rate of 12.8% among Canadians under age 18, which is the number that is usually used to measure what we call “child poverty”, and it compares with a low income rate of 11.7% of all Canadians aged 18 to 64.

But there's one group of senior women who have a much higher rate of low income, and that's senior women on their own. In 2004, 17% had incomes that were below Statistics Canada's after-tax low income cut-off. The depth of their poverty—that is, the average amount by which they fell below the cut-off—was estimated at $2,100.

I think it's worth noting here that women who were lone-parent heads of families in 2004 had a low income rate of 35.6% and an average depth of poverty of $6,300. So they are in much more serious condition than senior women, of course.

Retirement income policies could be used to reduce poverty among future elders and to ensure the financial security of women in old age in two ways: they could mitigate poverty in old age by providing benefits to poor women once they are old; and/or, they could assist women through a variety of measures that would improve their ability to accumulate retirement income throughout their lifetimes.

Other people who have appeared before you I think have pointed out that economic security for senior women depends largely on events that they experienced earlier in their lifetimes. For instance, some women who are currently aged 65 or older perhaps did not work outside their homes for significant periods of time and so weren't able to build up pension incomes in their old age. As of 2004, for example, Statistics Canada reports that about 17% of women now aged 65 or older had never been part of the paid workforce.

But most women in younger age groups now have paid employment, and the expectation is that their future financial security will be much better than that of the current generation of senior women. Personally, I think that assumption is far too optimistic, and I'll give you some of the reasons why. While there are now more women in the paid labour force than ever before, their wages still lag far behind those of men. Last year, for example, 82% of women in the age group 25 to 44—and those are the main childbearing years, of course—were in the paid workforce. But women earned only 63% of the average earnings of men. And that's exactly where they were 10 years earlier, in 1995.

If we look at women employed full-time for a full year, their earnings were just 70% of the average earnings of men in 2004. And about 20% of women, compared with just 10% of men, who had full-time jobs that year were employed in low-wage occupations.

Implementing pay equity, of course, might help some of the women who are employed full time, but as I think you've already heard, more and more women in paid employment are no longer working full time for a full year. They are part of the contingent workforce; they are working in part-time jobs, employed through temporary help agencies or on call, working in casual jobs, or are self-employed and working on their own.

Those are precarious jobs. They're generally poorly paid and they have no benefits like pensions. There is little or no job security, and about 40% of women who have jobs are now employed in those kinds of jobs.

Women in paid employment generally don't earn enough to be able to save for their own retirement through RRSPs, and most of them are not covered by workplace pension plans either.

In case you think women are choosing to work part time because they can combine part-time work with caring for their families, you should know that about one-third of women in the main childbearing years are working part time because they can't find full-time work. That's about the same percentage as are working part time because they're caring for children.

When women lose their jobs, they generally can no longer qualify for what we used to call unemployment insurance. Back in the 1980s, 70% of unemployed women got benefits. Then in 1996 the rules were changed, and the program was renamed employment insurance. Now only about 32% of unemployed women, compared with 40% of unemployed men, get employment insurance benefits, which replace about 55% of their usual earnings when they're out of work. In some parts of the country, coverage is much lower than that. In Ontario, for instance, only 23% of unemployed women get EI benefits.

This denial of temporary income support has serious consequences for women and their families, not just in terms of current income, but for their future financial security when they are older. What's happening to these younger women will have an important bearing on their economic security when they grow old, and that's why I think we need a national strategy to improve women's economic security.

It must take into account the origins of older women's poverty, including women's lower earnings; their family responsibilities; the way in which they combine paid and unpaid work during their lifetimes; the changing structure of the paid workforce; and the fact that women, because of their greater life expectancy, will spend longer in old age, on average, than men will, and will likely be left on their own eventually.

We also need to review such income support programs as EI, public pensions, social assistance, and legal aid, and to make sure that such reviews include a thorough gender analysis if we want to make any progress in improving women's economic security, and of course it goes without saying that we need to pay special attention to those groups of women who face particular disadvantages, such as lone parents, aboriginal women, immigrant women, and racialized women.

[The Chair, Liberal, Yasmin Ratansi]

Thank you. You were two minutes early.

We next have Ms. Barbara Glover. You'll be sharing your time with Ms. Poter?

[Barbara Glover, Acting Director General, Labour Market Policy, Department of Human Resources and Social Development]

Yes, I will.

[The Chair, Liberal, Yasmin Ratansi]

Please go ahead.

[Virginia Poter, Director General, Economic Security and Policy, Department of Human Resources and Social Development]

Thank you. I appreciate the invitation to be here today.

Our understanding is that this is the start of a study, so we are just looking at broad trends in a high-level overview. I'll be focusing on low-income trends, and Barbara Glover will be focusing on the labour market situation.

The economic security of both men and women is highly dependent on the economic environment. As you all know, the economic context in Canada has been extremely positive. Many women in Canada have been able to seize upon new labour market opportunities and have experienced consequent gains in their income and assets, and the rate of low income among Canadian women has decreased.

Despite this success, segments of the female population continue to experience higher levels of low income than their male counterparts. This is a reflection of both circumstances and decisions.

As mentioned at a previous hearing, poverty rates among seniors--both men and women, singles and couples--have declined significantly over the past 25 years. Despite this impressive progress, senior women have higher rates of low income than their male counterparts. Overall, women comprised 72% of all low-income seniors in in 2004. Why is this the case? Older women were less likely than the young women of today to engage in substantial paid work outside the home. As a result, these women had lower levels of contribution to the CPP and to workplace pension plans.

For younger generations of women, retirement should be quite different. ln fact, their retirement income should be more similar to their male counterparts than to the senior women of today, given their high rate of labour force participation and higher contributions to CPP and workplace pensions.

Despite this positive outlook in retirement, significant challenges remain for these younger women. As in every generation, it is young women who have children and who are often the main caregivers. There are challenges for young parents, and particularly for young mothers, to juggle the demands of a career and family-related responsibilities. Reduced attachment to the labour market, costs of day care, and other child-related expenses can compete with other critical financial needs, including saving for retirement. Beyond the care of young children, many Canadians also provide care to an elderly relative. About one million Canadian seniors receive formal and informal care for long-term physical needs. This care is usually provided by women. These caregiving challenges are most acute for women with little or no family support network.

As you have already heard, women are more likely to experience divorce or separation than in the past. As a result, they are more likely to experience financial hardship and become a lone parent. Single-parent families are five times more likely to live in low income than two-parent families, and over 80% of single-parent families are headed by women. On the positive side, the low-income rate for single mothers has declined considerably in recent years, from over 50% in 1996 to 35.6% in 2004.

Women are also more likely to experience persistent low income than men. Between 1999 and 2004, 6.3% of women lived in low income for at least four years, compared with 4.6% of men. Three groups of women are at higher risk of persistent low income: women with disabilities, immigrant women, and aboriginal women. Women with disabilities make up the majority of adults with disabilities, and this increases with age. Their median income is significantly less than men's: $15,500, compared to $28,157 for men with disabilities.

Immigrant women also face challenges. In 2000, 23% of foreign-born women lived in a low-income situation, a considerably higher percentage than for Canadian-born women.

[The Chair, Liberal, Yasmin Ratansi]

Can you speak more slowly, please?

Translation has a problem if you go fast, so please slow down a little. You have the last few comments.

[Virginia Poter]

Aboriginal women also have lower incomes and are less likely to be in the labour force. In 2000 their median income was $12,300, about $5,000 less than for non-aboriginal women.

Responding to the challenges I've have just mentioned requires the efforts of all sectors of society, including provinces, territories, and municipalities, as well as employers, employees, and the labour movement. The Government of Canada also plays a key role in this area, primarily through the provision of income support programs, tax benefits, and transfers to provinces and other partners. In the interests of time, I won't detail all of these programs and initiatives.

I'll now turn the floor over to Barbara Glover.

[Barbara Glover]

Good afternoon, Madam Chair. Bonjour, mesdames et messieurs.

I realize there are time considerations, so I'll move straight into my subject matter, which is the latest labour market information we have about women. I think you probably know that women's labour market performance in Canada has been extremely strong in recent years, and their labour market outcomes have shown significant improvement over time.

Participation rates for women rose from 57% in 1996 to 62% in 2006, while those for men remained relatively stable. Similarly, the employment rate of women has risen more quickly than that of men over the past decade, and stood at 58% in 2006.

Unemployment rates have declined significantly for men and women and are currently at a 30-year low. In 2006 the rate for women was 6.1%. The female rate of unemployment has been lower than that of men for well over a decade; the differential is particularly pronounced for core-age women--that is to say, 25- to 54-year-olds.

Women's unemployment rates, like those for men, naturally vary by region and other characteristics. For example, the rates of unemployment are higher in Atlantic Canada, in Quebec, and in other parts of Canada. As well, unemployment rates are higher among the less skilled women.

Women are more highly represented than men in non-standard employment, particularly in part-time and temporary work. As Monica said, in 2006 the proportion of women in non-standard work was 40%, compared to 34% for men. This does have implications for income and earnings and private pension coverage rates.

Internationally, I think it's worth pointing out that Canadian labour market outcomes for women compare very favourably with those in other developed countries. For example, Canada ranks first among the G-7 countries in terms of the participation rate for women aged 25 to 64. Canada also ranked first among the G-7 in terms of the unemployment rate for prime-aged women.

In the area of education, women have made similar strides. Educational attainment has risen significantly for young women. This is true both In terms of high school dropout rates,which for women.... I think the most recent high school dropout rates are 7% for women, compared to 12% for young men.

In terms of post-secondary completion, 60% of all university graduates are women, 52% of graduates at the master's level are women, and 41% of graduates at the doctoral level are women. With these higher rates of graduation among women at the undergraduate and master's level, it's expected that women will surpass men in the number of doctoral graduates in the near future.

It's notable that the World Economic Forum found that in 2006 Canadian women had the highest rate of post-secondary education enrolment in the world.

The fields of study are changing as well. Fields that traditionally were male-dominated, such as medicine and law, have seen large increases in female enrolment over the past decade. I have some stats in my speaking points, but I won't do them.

On the wage gap, while women still, on average, earn less than men, the wage gap has shrunk over time. I want to pause on that, and maybe that's what I'll focus on for the last minute.

In 1997 average hourly wages for full-time prime-age women were 82.7% of those of their male counterparts; by 2005 this ratio had risen to 85.7%. I just want to focus in and say that notably among university graduates under 25 years of age who are working full time, there is virtually no difference between the earnings of women and men. I just want to point out that I'm citing figures using a different methodological approach. I'm glad StatsCan is in the room, because that's the method they encouraged us to use in a report by Madame Drolet a few years ago.

There are different ways to measure and different purposes for different kinds of measurement. This story is one of a closing gap, a narrowing gap, particularly in the young age cohort, but looking forward in the future, it's hard to tell. You can read a lot of studies that are trying to forecast what's going to happen to that wage gap. Will it continue to narrow? Will it not narrow? We're not sure.

In fact, what we've done is ask the OECD to do a comparison on wage gap by age cohort to compare what's happening in terms of education participation and wage gaps across OECD countries. In this way we can have a better understanding of what's happening across these countries that are generally facing the same kinds of challenges.

Thank you.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

You'll have an opportunity in the Q and A.

Mr. Lindsay, are you going to lead off?

[Colin Lindsay, Senior Analyst, Social and Aboriginal Statistics Divison, Statistics Canada]

Yes, I will. Thank you very much.

As much as possible, I will try not to repeat what the previous speakers have said.

We want to thank the committee for this opportunity to present this material today. A great deal of time and effort went into compiling reports, such as the “Women in Canada” publications, “The Wealth of Canadians” report, and Dr. Stones book, New Frontiers of Research on Retirement. I believe copies of all three of those reports have been made available to the committee.

It's certainly gratifying to everyone who worked on these reports to know that the material is being put to good use in a forum such as this, and that in some small way, we may have an impact on the development of social policy in Canada.

As I noted in our presentation in the springtime, there was something of a good news and bad news element to the overall theme of gender equality that we found in the Women in Canada report. On the one hand, there is no question on many indicators that the quality of life in women in Canada has improved. However, there are still substantial gaps between the socio-economic status of women and men, at least as measured by basic social indicators in many areas.

For example, women have closed the education gap on men very significantly over the last quarter century. In fact, the levels of educational attainment now are very similar for men and women.

More women are unemployed, as the other speakers have noted, but at the same time, we noted in the spring that women are still concentrated in traditional employment sectors, and those have been slow to break down. Women still make up the large majority of part-time workers in Canada. The earnings gap seems to be stuck at 70%, and there's been very little change in that over the course of the last decade. Even when employed, women are still largely responsible for home work and looking after the children in the home.

This general pattern of positive steps combined with negative steps seems to hold true to some degree for the economic security of senior women. As the other speakers have noted, there has been a very significant increase in the incomes of senior women over the last quarter century. Between 1981 and 2003, for example, the average real income of women aged 65 and over in Canada increased by 30%. In contrast, the average real incomes of all Canadians in that time period increased by just 10%.

Again, as other speakers have noted, there has been a very significant drop in the low-income rates among senior women today. In fact this represents a rather major social change in Canada from a statistical point of view. As recently as the 1980s, for example, senior women were easily the poorest age group in Canada, with low-income rates that were two to three times those of other women. Today, however, the share of senior women with low incomes is actually lower than other groups of women, including women under the age of 65 and females with children.

However, there are significant differences in the likelihood of senior women having low incomes, depending on their family status. In fact, today only about 2% of senior women who are living in a family, either with their spouse or with other family members, are considered to be living in a low-income family.

In contrast—and you can see this in chart 1, accompanying this package—17% of unattached women, aged 65 and over, currently have after-tax incomes below the low-income cut-offs. At the same time, as with all senior women, or the overall senior population, there have been very significant declines in the low-income rates among senior women living alone.

Again, as you can see in chart 1, the current 17% figure for the share of low-income senior women living alone is down from 40%, as recently as 1985. It was well over 50% in the early 1980s.

At the same time, it's also true, or the statistics seem to show, that senior women in the very oldest ranges are considerably more likely to have low incomes than their younger counterparts.

If you flip to chart 4, I'll reorganize my talk, so as not to be too duplicative.

In the fourth chart you can see that in 2001 women aged 85 and over were twice as likely as women aged 65 to 74 to be living in a low income situation. It's for women overall. Unfortunately, we weren't able to break out the women 85 and older living alone, but figure again that they are far more likely, in that age range, to be in a low-income situation than their younger counterparts.

The data from the various reports we have done also suggest that in the future the issue of social support may be as critical to women over the age of 85 as that of economic security. Women currently make up about 70% of the total population in Canada aged 85 and over. While about one-third of these women live in institutions, two-thirds of them still live at home. And the vast majority of senior women aged 85 and over living at home—about 60% today—are living alone.

At the same time, as you can see in chart five, a lot of these women have disabilities. As of 2001, 72% of all women aged 85 and over living at home had a long-term disability that precluded their doing at least one major activity in their daily living, meaning that they were going to require help.

As at least several of the other speakers said, the issue of social support for the very oldest segments of Canadian society is going to be a kind of double-barrelled burden for the overall female population. On the one hand, female seniors will make up the substantial majority of those needing such support in the future; at the same time, if history is any guide, it will largely fall to their daughters to provide that kind of support.

We don't have a formal indicator of this, but we just did some quick calculations before we came over today. Currently you have in Canada about eight women aged 45 to 65—that would be more or less the age of daughters—for every senior aged 85 and over. By 2030, in about three decades, that number is going to drop to about four—it's going to be halved—so those younger women are going to have even more responsibility than they have right now.

That's a quick look at the income.

The economic security situation for senior women also involves the wealth and assets they have. I'm going to pass the microphone to my colleague, Sylvie Michaud.

[Sylvie Michaud, Director, Income Statistics, Statistics Canada]

I will be brief.

We did a survey on financial security to get a better look at assets and liabilities. Since 1999, we have been calculating the value of pension rights for people who have an employer-sponsored pension plan. The survey has been carried out periodically, the latest being in 2005. We compared those results with the results from 1999.

Graph 7 shows the life cycle of net worth, which increased by 23.2% between 1999 and 2005. The medium value was $148,400. However, the net worth of people aged 65 and over was much higher than that of the age group between 45 and 64. As one might predict as well, the net worth is much higher for economic families than for unattached individuals. The net worth for unattached men and unattached women is indicated by the blue and pink lines.

The following chart shows the distribution of wealth among people 65 years and over. The age group with the largest net increase in wealth value is the 55-to-64 group, followed by those 65 and over, whose wealth increased by approximately $100,000, from $343,070 to $443,610 between 1999 and 2005, in 2005 dollars.

The group showing the largest increase is women 65 years of age and over living outside an economic family; that means that they are living alone. Their wealth in 2005 was still lower than that of men: $155,000 versus $197,000 for men 65 and over who live alone.

At a previous committee meeting, you talked about access to ownership and seniors living in a residence versus renting. Chart 9 gives you just a few statistics about the rate of ownership among people 65 years and over. In families, the percentage remained unchanged between 1999 and 2005 at 83%. It varies.

Finally, we can see that the gap has widened. If we look at the gap between the top and bottom economic levels, the gap grew between 1999 and 2005.

[The Chair, Liberal, Yasmin Ratansi]

Merci.

We'll go to our first round of questions, with Mr. Dhaliwal, for seven minutes.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Thank you, Madam Chair.

Will you be talking, Ms. Bennett? Do you have a problem...?

[Carolyn Bennett, Liberal, St. Paul's, ON]

I wouldn't mind first asking Stats Canada, in terms of the PAL survey about how people are and what you've said in terms of disabilities, whether it was conducted in the last census.

[Colin Lindsay]

Yes.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Is it now being done with each census?

I'm just saying that with an aging population—

[Colin Lindsay]

Yes.

[Carolyn Bennett, Liberal, St. Paul's, ON]

—the limitation of being able to work a bit or contribute is going to matter more and more.

Do you need some pressure from this committee's report to make sure you have the money to do that with each census? Should that be one of the recommendations?

[Colin Lindsay]

It's probably beyond our...whatever, but I would say yes.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Yes, okay.

The flexibility around retirement also seems to be an issue for women because they've had a lesser attachment and don't end up with as many years and as good a pension.

I noticed in one of the Library of Parliament documents that people come back to work after their supposed retirement. Is there a way we look at that, in terms of whether compulsory retirement has actually adversely affected people? How do you ascertain whether people have choice in whether they stay at work or not, or whether they have a choice to actually supplement their income?

Maybe I'll just fire these questions out, and then you can figure out who wants to answer which.

Is there any difference in rural and urban terms? One of the questions there would to me be about the security people have about housing and what income is actually disposable after they have a roof over their head. Is there a way you can disaggregate that for us?

It would seem that whereas the people who are living with someone else are sharing the rent, the people who are on their own are paying their rent on their own, so they would be doubly discriminated against, if you aren't separating that out.

I'd also like to know, in terms of disposable income, about the supports and services for these people who need a little help. Is there some variety across the country in what's covered and what's not covered for seniors, in terms of supports and services and help to stay independent—all of those things? In terms of how we're doing across the country, are seniors in certain parts of the country doing better than in other parts of the country on all of those?

That's my first little barrage.

[Colin Lindsay]

I could answer a couple of them very quickly.

Unfortunately, we really didn't break the data down In terms of provinces, for this particular report. If it's something you'd like to see, certainly it's something we could prepare for you. It would be tough to talk off the top of our heads.

The numbers are fairly consistent across the country. You find that low income rates among senior women tend to be highest, surprisingly, in Quebec and British Columbia and lowest in Saskatchewan and Alberta. But the numbers are fairly close across the country.

In terms of the urban and rural divide, there are interesting numbers, in the sense that rural senior women tend to have lower incomes than their urban counterparts but are far more likely to be living either with their spouse or with their family. Very few rural senior women live on their own, so that mitigates that situation.

I think Dr. Stone would probably be the best one to talk about changing retirement patterns.

[Leroy Stone, Associate Director General, Unpaid Work Analysis, Statistics Canada]

With regard to the return to work, the work we have done recently, not yet published, suggests that women are less likely to unretire, having retired. This may be connected with their care and responsibilities, and also with, let us say, a more hostile labour market with regard to their opportunities—especially with regard to things such as starting a new business, where women seem to have lower rates of entry.

So the “return to work” process is taking place, but it seems to be at a lower rate for women than for men.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Maybe, Monica, you have some experience in terms of the punishment people would get at the GIS or other things. Do you see in your work that there has been a deterrent to going back to work? I know we were trying to give a $4,000 exemption if you went back to work a little bit.

[Monica Townson]

I haven't looked at that specifically, but I do have some statistics here from StatsCan on the reasons people retire. I think you asked that question among the others you listed here.

These are 2005 numbers, and they refer to people 55 and older who said they had retired. Only 10% of people retired because of mandatory retirement. The interesting thing is that 24% retired because of personal or family responsibilities and another 23% retired because of personal health; health issues seem to be a big reason that people may be forced to retire, even if they didn't particularly want to.

The other point you made is about women continuing to work because they may not have had enough time, because of family responsibilities, to build up retirement income. That's one of the arguments often put forward in favour of abolishing mandatory retirement: it would allow women to accumulate better pensions. I have to confess I have a serious problem with that, because most women are not in a workplace pension plan, and most women's earnings are too low for them to contribute to RRSPs, so telling them they could go on working and build up more pension income, it seems to me, is not a reasonable thing to do. Fundamentally, it is in fact telling women that if they want a decent income in retirement, they can just go on working.

I think we should address that issue by looking at how our public pension programs deal with women--for example, by looking at the possibility of having a dropout in the Canada Pension Plan and in the Quebec Pension Plan for caregiving for elderly family members, in the same way we do for people who care for children. I think that would be a very important issue and would help older women who are being forced to retire because they have caregiving duties. There are other measures we could take like that to help older women, apart from telling them they can just go on working until they have enough money.