Status of Women Committee on March 20th, 2007

[The Chair, Liberal, Yasmin Ratansi]

I call the meeting to order.

Members of the committee, we have with us witnesses from the University of Montreal and the Federal Superannuates National Association. From the University of Montreal we have Madame Ruth Rose, researcher, and from the Federal Superannuates National Association we have Monsieur Bernard Dussault, senior research and communications officer.

We're trying to locate the third witness, but since these witnesses are already here, we would like to start off with Madame Rose. Could give us your presentation in ten minutes?

Do you speak French or English?

[Ruth Rose, Adjunct Professor of Economics, Université du Québec à Montréal]

I will be making my presentation in French, but I will be happy to answer questions in English.

[The Chair, Liberal, Yasmin Ratansi]

Thank you. You have 10 minutes.

[Ruth Rose]

I would first like to point out that I am not from the University of Montreal, but from l'Université du Québec à Montréal.

[The Chair, Liberal, Yasmin Ratansi]

Pardon, my fault.

[Ruth Rose]

Please forgive me; I have been away and travelling for the last three weeks. I did not have as much time as I would have liked to prepare this presentation. You have the document in both languages. I will begin my presentation by making a few observations.

First, we can see that over the years, the gap between men and women has been shrinking, as it relates both to their participation in the workforce as well as their income. However, they are far from being equal. Women continue to assume most of the domestic chores, and more particularly, the care of others, whether it is their children or older people who can no longer take care of themselves. Therefore, they are still lagging behind when it comes to their participation in the labour force. They are the ones who are most likely to interrupt their career and most of them work part-time. That is one of the reasons why they earn less than their male counterparts, although wage discrimination does continue to exist.

They are more likely to be poorer while they are working, which means that they will be poorer in retirement as well. That is why the government, through social services and government transfers, is so important to their financial security. After young people, women are the ones who most benefit from social assistance. They are responsible for the care of their children. Therefore, child benefits are more important for them. Because their families are often poorer, they rely on these benefits to top up their income. Of course, they are the ones who are entitled to maternity leave because women are biologically different from men: they are the ones who carry the infants, who bear them and then who nurse them. As to parental benefits, men are encouraged to assume their share of parental responsibilities, but the women are in greater need of the benefits and the leave.

When it comes to retirement and public programs, Old Age Security and the Guaranteed Income Supplement are universal programs intended to help low wage earners. Women receive less from these programs than do men, because they have lower salaries. Finally, services provided to the public, including health, education and child care services, are more important to women because they are less likely to have access to private plans.

I have a few graphs to support my arguments. I have chosen them because they were available but also because they illustrate the delayed entry of women into the labour market and their income level, and how this affects their retirement. I believe that you have a special interest in women's financial security at retirement, in other words, women who are seniors.

The first graph gives you the percentage of retirees who receive a pension, according to gender. The top line, the one that is closest to 100%, or 95%, represents men. The trend has been relatively stable for the past 10 years. The line along the bottom, with the small dots, begins at 19% in 1980 and approaches 67% in 2005. So the gap has been shrinking, but it has not yet disappeared. As the Quebec Pension Plan becomes more established, more women have been entitled to a pension in their own name. There remains, however, a spread of 28% among those who receive a retirement pension. I am sure that the data would be similar for the Canada Pension Plan.

The second graph shows the average retirement pension of women as a percentage of what men receive. Here again, we see that women have not yet caught up to men. In 2005, the women pensioners received 61% of the pensions received by men, and even the newly retired women only receive 64% of the amount that goes to their male counterparts. Strangely enough, as the plan matured, the percentage dropped because more and more women were entitled to the pension, but had interrupted their careers. So, until about 1992, the ratio dropped. It is rising now, but very slowly. There is still quite a gap.

Is there any chance that this gap will narrow in the near future? The answer is on the third graph. There again, we can see a difference. The graph represents contributors, people who are working and who therefore contribute to the Quebec Pension Plan. In 1980, women represented 50%, and they now represent 55%. So there has not really been an increase, while the percentage of men has dropped. There are fewer men in the labour force, either because they stay in school longer, or because they are retiring earlier. The last line, the one with the small blank squares, the line near the top, shows the ratio of female to male contributors. We see that after the first drop, the curve rises to another level, but remains at 82%. So there is still a gap of 20%.

The last graph, number four, uses the figures we have just seen, but they are distributed according to age. Here is the question: Can today's young people ever hope to catch up when they retire? The answer is no. Among those who are under 25 years of age, between 18 and 24, and they are represented on the first two lines, there isn't much of a difference between men and women in terms of the number of contributors, but women still contribute only 80% of the amount contributed by men. Between the ages of 25 and 55, women increase their contribution rate. They contribute 76%, 75%, while men contribute 85%. So, there again, we see a difference. When today's young workers retire, in 40 or 50 years, the gap will still be there. It won't be as great as it is now, for current generations, but it will nevertheless be there. Which leads me to conclude that women have made some progress, they have narrowed the gap, but they are still far from being equal.

I will come back to the first page, to the political options, and some recommendations that I would like to make. First, I think there should be measures to facilitate the conciliation of employment, education and family, in other words, something to help women escape poverty, by being part of the labour force. In order to do that, we must acknowledge the fact that they have families; we must provide measures that will help them to combine their work and responsibilities at home, and men should be eligible as well. The more programs we have, the greater the likelihood that men will also do their part, because what is good for families, and good for children, will lead us closer to equality. And as an added bonus, it will also be good for the environment.

The most important measures are maternity and parental benefits. I would also recommend a universal benefit and, with respect to employment insurance, an increase in the EI replacement rate. Canada could learn a great deal from what Quebec is doing. We also need good quality, universally accessible and affordable child care; there should also be support given to employers in order to promote flexible working hours. We also need pay equity and affirmative action programs to ensure equality in the labour force, and, most importantly, we need good jobs, particularly in areas like the Maritimes, where women are less active in the labour force, not because they are lazy, but because there are no jobs for them.

We already provide a number of child benefits; we could do even more. There has been a great deterioration in social assistance programs in recent years. I think the federal government should provide more support. We also need improvements in public pension programs and employment insurance. What is most important is to improve accessibility for women, because they are the ones who were the most affected by the cuts in 1996.

We need credits to recognize unpaid caring for children and the elderly within the CPP/QPP.

Finally, the public health system must be strengthened in order to cover, for example, vision and dental care, prescription drugs, and home care.

[The Chair, Liberal, Yasmin Ratansi]

Thank you, Ms. Rose.

Mr. Bernard Dussault.

[Bernard Dussault, Senior Research and Communications Officer, Federal Superannuates National Association]

Good afternoon and thank you for inviting me to appear before your committee. Even though there are not many men here today, I do not feel uncomfortable. I come from a family with four sisters, and I have met a lot of women in my lifetime.

[The Chair, Liberal, Yasmin Ratansi]

We have another man here: Mr. Stanton.

[Bernard Dussault]

I apologize if I gave the impression that I was the only one here; I see that I am not the only man, but there are not very many of us.

I was not chosen to represent my organization because of my deep understanding of women, but also because, like Ms. Rose, I do have some knowledge of public and private pension plans. I am a former chief actuary for the Canada Pension Plan and the public service superannuation plans. So, I subscribe to everything that she has already said. When it comes to the public service superannuation plan, the government, as the employer, could easily take into account the differences between men and women, because the public service pension is not a social program. You are probably already aware of the changes involving pay equity. A great deal has been done in that area and, as Ms. Rose said, there is still a gap, but it is narrower.

The main thing that I would like to bring to your attention today is the fact that, to a certain extent, nature has found a way to reward women for everything that they have contributed to the men in their lives, including, bearing their children and raising them. You can't put a price on that. Nature has rewarded them by allowing them to live longer than men. You are probably well aware of that, but it is a phenomenon that is nevertheless hard to explain. No matter how you look at it, this phenomenon will continue because as soon as they are born, women are destined to live longer. We will never be able to take that away from them. Nature is kind to women by allowing them to live longer, but that also causes problems because women become poorer as they age, and we have clear proof of that.

I have all of the figures here; I can prepare a report for you later. I apologize, I did not have time to prepare one beforehand. The Guaranteed Income Supplement program clearly demonstrates that not only are there more seniors who are women, but that they are becoming even poorer. Even if we project into 2050, and take into account the improvements made to the program, there will still be women who are poorer. The number might drop as we approach 2050, but some women will be poor, and if the forecasts bear out, 40% of senior women will be living under the poverty level. As you know, this is because women continue to earn less than men and because they will, for the most part, always be the ones who are responsible for raising their children. Their career will not be as long, so the phenomenon will continue to exist.

Not only will they earn a lower employment or pension income than men, but if their husband dies—and, usually, the husband is the first one to go, because they have a shorter life span—the woman will lose her access to health insurance. Their financial needs are great, and when it comes to health, that is an area that should be emphasized because it is so important. Good health is important to the quality of one's life.

Those are the main points that I wanted to make. I hope you found them helpful, and I would be delighted to answer your questions.

[The Chair, Liberal, Yasmin Ratansi]

Thank you very much, Mr. Dussault.

We'll go with the first round of seven minutes, starting with Ms. Minna.

[Maria Minna, Liberal, Beaches—East York, ON]

I thank both of you for your presentation as well. A lot of what we're discussing today we already know, but we need to find ways of fixing it. Your graphs are very telling. They tell me, anyway, things that I think I already knew, but it's good to see them reinforced in your graphs and in some of your recommendations.

I have to start out by saying that since we're here talking about women's economic security, it is no amount of disappointment to know that we have just had a budget that doesn't address women at all, especially in terms of pensions.

[An hon. member]

On a point of order—

[Maria Minna, Liberal, Beaches—East York, ON]

No, I'm sorry. I have questions with respect to this. I think I have a right to say what I want to say.

[The Chair, Liberal, Yasmin Ratansi]

Finish, Ms. Minna.

[Maria Minna, Liberal, Beaches—East York, ON]

I was going into specific things that we are talking about that address women's economic security, like pensions. We're talking about pension splitting. That leaves out single women, women who are the poorest. Senior women or unattached seniors, most of whom are women, are the largest group of poor seniors in our country, if I'm not mistaken—I think Madame Rose and Mr. Dussault can verify that or not after a while—and they are not going to be able to benefit any from that measure.

The GIS threshold has not been increased for I don't remember how many decades now, but I think it has been a very long time, since the fifties maybe. It has at least been thirty years or more, and that's also a major factor with respect to the current senior women I'm talking about.

And then, of course, there's the issue of younger women who are now building up a pension and the need for drop-off rates.

So I wanted to ask, first of all, what measures either of you would recommend right now for current seniors who are having difficulty, and senior women specifically. And for young women who are entering the labour force or young adults now in the labour force, if we were to choose one or two major measures—because sometimes it's hard to do a lot—what would be the one or two that would have the major impact on helping women to eventually become more economically secure, especially in their senior years?

[Ruth Rose]

For elderly women, one of the things the women's movement in Quebec and across Canada has been requesting for a long time is recognition of the time they've spent taking care of children. We have some measures in the QPP and the Canada Pension Plan that do that, but one of the things we could think about doing is giving an extra supplement in old age security. Women are not going to be able to catch up even with measures specifically recognizing children, but there could be a universal measure, according to the number of children a woman raised, and that would be a supplement to the old age security.

[Maria Minna, Liberal, Beaches—East York, ON]

To follow on that point, I don't remember what it is now—it's $6,000 or $7,000—but perhaps we could take the personal exemption for the spouse that now exists in the tax system, say the stay-at-home parent, whether it's the male or female, although in most cases it's women. Instead of having it come off the tax as a reduction for the wage earner, that money could then be applied for the stay-at-home mom, either as an RRSP contribution or as a payment to the CPP or something of that nature, a pension. What do you think of that notion?

[Ruth Rose]

The purpose of that measure is to not tax the amount of money that is necessary for essential needs. While I would favour a measure that would give the value of that money to the woman herself in the form of a reimbursable tax credit, I don't think we should confuse it with old age pensions.

The trouble with increasing the GIS—and I think it was last increased in the 1980s—is that there's a very high tax-back of it, because every dollar that you earn above the old age security reduces the GIS by 50%. That means that the elderly with very low incomes are in fact taxed at a rate of something like 80%. That's why I recommend a supplement to the old age security, especially to reduce the inequality between men and women, to take account of the social contribution that they've made over their lifetime.

For younger women, I would recommend pay equity and job creation—especially the creation of good jobs—other than the kinds of cutbacks we've been having.

[Bernard Dussault]

For younger women, I would say that the target should be those who have children. There are a lot of ways to help families through family allowances or tax measures. Generally speaking, that's where the target should be, because these are the women who, because of their children, temporarily can't be in the workforce.

I have three other measures that affect more senior persons. I'll keep the most important one for the last. For those who can benefit from a pension plan, either themselves or from the survivor benefit from a spouse who worked in the private sector or the public sector, normally the survivor benefit consists of a surviving spouse allowance of about 50%. It seems that the 50% is not enough, so in this area improvements should be introduced. It's expensive, but this is where there are some ways of improving the economic standing of women.

The second one, which is at an even lower level of importance, pertains to the public sector pension plans. Most provisions of those plans are fair between men and women, except for a restriction that affects mainly women. We call it the marriage-after-retirement restriction, or marriage over age 60. Those who marry after retirement lose entitlement to the survivor pension.

This restriction does not exist in the CPP. It does not exist with the QPP. We--the Federal Superannuates National Association--been lobbying the government to remove that limit. Hopefully, eventually it will be removed.

On the last point I have to make, please keep in mind that it's personal. I'm not saying it on behalf of the FSNA; the FSNA has another position. I joined the association just three years ago and have not been able so far to convince them that this is the right target.

In 1996 the government proposed what's called a seniors benefit, which consisted mainly of transferring a portion of the OAS to the GIS. I'm much in favour of such an approach, so much in favour that if it were just for me, I would convert totally all the money paid through OAS into GIS.

Mrs. Rose mentioned that although the GIS is a very nice program, the level of poverty is set so that even if you receive this level, you're still in poverty. You live in a manner that can easily be qualified as miserable.

That's my main point. If there were a way to come back to the seniors benefit and reintroduce it in the House and even strengthen it, I would support it 100%.

[The Chair, Liberal, Yasmin Ratansi]

Thank you very much.

You have seven minutes, Ms. Deschamps.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Thank you, Madam Chair.

I would like to start by welcoming you and thanking you for being here today.

I've had an opportunity to travel around Quebec twice. The purpose of the first trip was to present the bill currently being studied by the committee, which is designed to improve the employment insurance system. Through our travels, we consulted with various groups and saw very clearly that women are extremely affected by the current employment insurance system. I'm thinking of women who are single parents and women who were about to be eligible for a pension, but were continuing to work in the hope that their pension would increase somewhat.

In the context of our study on the status of women, my colleague and I also met with a number of women's groups. They told us they suffered from discrimination in the measures introduced by the government. Often, these women do not choose to remain at home. For example, when they choose to have children, they take themselves out of the labour market and consequently, are not eligible for some measures that would guarantee their future security.

Ms. Rose, the paper we received about pensions states that you do not expect the gap between men and women to be filled in the next 40 years. Can you give us more clarification on this? In your opinion, what could be done to try to reduce the huge gap between men and women?

[Ruth Rose]

This is a major problem that needs to be addressed. We could increase all retirement income, particularly for women, by improving public plans. Women have less access to private plans, except if they have worked in the public sector, because generally speaking, there are fewer and fewer private pension plans.

I would therefore be in favour of an improvement along these lines, and even of doubling the QPP and the CPP. I would also be in favour of recognizing the work done by women in raising children, either through Old Age Security, the Quebec Pension Plan or the Canada Pension Plan.

I addition, I would like to disagree with what Mr. Dussault said. I did not say that I was in favour of the Guaranteed Income Supplement, or with the Seniors' Benefit that the Mulroney government had put forward, precisely because that would have meant the tax rate of very low-income families would be 80%. All the people who had invested in RRSPs would have lost this money once they retired. In fact, this is why the program was abandoned.

There must be investment in universal programs, because women can rely on them. The Guaranteed Income Supplement and income-dependent programs are such that as soon as a person's income increases, he or she is no longer entitled to them, and it becomes very difficult. It becomes a poverty cap: people have to be here or there, but if they are somewhere in between, there is always a downward levelling.

The only way to help retired women under the circumstances is to have different types of recognition of the work they do with children, and, increasingly, with their aging parents. There are still many women who leave the labour market or reduce their hours of work in order to look after their aging parents.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Would you like to add something, Mr. Dussault?

[Bernard Dussault]

I apologize for misinterpreting what you said.

In support of what I said about the Guaranteed Income Supplement, the points you make are correct, but I nevertheless think that this plan is ideal in the medium term because when people have income, they are covered by the plan, but only at the rate of 50%. So there remains some

incentive to go back to work, even if some part of the benefit is reduced. I think this is the best way to deal with poverty.

She mentioned unemployment insurance. It pops into my mind that a good program to help families with children would be to give them a higher unemployment benefit. This is one of the problems, if I may say, that having children brings to women. They can't do both things at one time. In my view, it's preferable that the mother stays at home. She should not be financially penalized for that. The unemployment insurance program might be a good program to use for that purpose. It's not the only one, but it's a very good one.