Madame Deschamps?
Evidence of meeting #44 for Status of Women in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was benefit.
A recording is available from Parliament.
Evidence of meeting #44 for Status of Women in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was benefit.
A recording is available from Parliament.
4:05 p.m.
Liberal
4:05 p.m.
Conservative
Joy Smith Conservative Kildonan—St. Paul, MB
Thank you. I'm going to split my time with Mr. Stanton today.
4:05 p.m.
Conservative
Joy Smith Conservative Kildonan—St. Paul, MB
He's got more time? Oh, that's great. We want to make sure that all four of us have a chance to ask questions. Well, that's good.
I want to thank both of you for coming to the status of women committee today. Thank you so much for your insightful comments and recommendations.
Mr. Dussault, my first question is to you. We have found, in government, that income splitting is very beneficial for a lot of the senior population. Could I please have your opinion on that, along with an explanation of why that is so, or why not?
4:05 p.m.
Senior Research and Communications Officer, Federal Superannuates National Association
Pension splitting is important because it corrects one of the aspects of the tax system that was not fair. If you have two couples, one in which there's only one wage earner and the other in which the two are working, and the total family income is the same--$60,000 in one case, which just one person earns, and in the other one both spouses work and each earns $30,000--then the single wage-earner family would pay more taxes than the other family. That's to explain what splitting does.
But the new measure is just in respect to pensions. It would have been much more expensive to apply it to all income, but my view is that it should be applied to all income. It would be much more expensive, but I think it's still affordable. Fairness has no price. There's some limit, of course, because there are a lot of things that are not fair in society. But this is an area that could be simply resolved by applying splitting not only to pensions but also to salaries.
4:05 p.m.
Conservative
Joy Smith Conservative Kildonan—St. Paul, MB
Thank you for your comments.
Right now we have implemented that policy. You're saying you think it's very beneficial. What more can be done in that area? If you want, you could elaborate a little bit. You touched on it briefly in your answer.
As you know, in any kind of budget there are many challenges. But we do have a concern about the aging demographic across our nation. So could you comment a little bit more on that issue?
4:05 p.m.
Senior Research and Communications Officer, Federal Superannuates National Association
I don't know really what more I could say. But I want to make it clear that what was announced in the budget yesterday is only in respect to splitting of pensions. So the salaries or the active income are not concerned. I don't know, in that respect, what else I could say. I don't know if you want me to go beyond....
4:05 p.m.
Conservative
Joy Smith Conservative Kildonan—St. Paul, MB
No, that's fine. We're studying the economic challenges that women, in particular, have.
In your presentation today you were talking about the seniors benefit and about the merits that could apply to senior women, so I want to go back to that in a minute. But could you also comment on the CPP? I understand you've had some involvement with that.
4:10 p.m.
Senior Research and Communications Officer, Federal Superannuates National Association
Yes. Maybe to your surprise I will tell you that I'm not the only one considering that; most actuaries do.
This is the best-designed pension plan in the world. It has a lot of what could be called poverty-related measures. Mrs. Rose referred to one of those. There are some other ones. For example, there's an exemption on the contributions for the first $3,500 of earnings. And there's a drop-off provision for years during which a contributor was raising kids under age seven.
I think there's a limit beyond which a program like the CPP could have more poverty measures. I wouldn't mind if they would introduce more. But we have to also keep in mind that this is not a totally poverty-related program. It's an earnings-related program that includes some poverty measures. So I don't see how, at this time, it could be further improved in that respect.
Sorry for this.
4:10 p.m.
Conservative
Joy Smith Conservative Kildonan—St. Paul, MB
No. That's really good to know. I'm glad you mentioned that.
How much time do I have left?
4:10 p.m.
Conservative
Joy Smith Conservative Kildonan—St. Paul, MB
Shall I finish off, and then you start with the next one? Perhaps we'll split your time.
I'm going to ask you another question, going back to the seniors benefit. What about the program do you think would be the first thing that could be put forward for a seniors benefit program that would immediately address the senior women's poverty issue? You know the plan very well, obviously, for you to be addressing it today. What is the first thing in that benefit plan that you think would be the most beneficial to put forward as quickly as possible?
4:10 p.m.
Senior Research and Communications Officer, Federal Superannuates National Association
It was implicitly covered in the point I made earlier by proposing that the seniors benefit be reintroduced and strengthened. In other words, it means that the threshold of poverty used for the program for the existing guaranteed income supplement needs to be increased. We don't know if it actually exists or what the threshold of poverty is, but the amount used for that purpose in the program should be increased.
On an individual basis, with the program, I think the minimum is something like $13,000 to $14,000 per year. I'm sure nobody here needs an explanation that this is really miserable in terms of income. If it's the only thing you have, you really cannot live in a decent manner on $14,000.
I don't know if I'm answering your question, but the point is to raise this poverty level.
4:10 p.m.
Liberal
4:10 p.m.
NDP
Irene Mathyssen NDP London—Fanshawe, ON
Thank you, Madam Chair.
Thank you very much for being here.
I'd like to start with Madam Rose and explain something to you that I've been working on and thinking about in connection with some of the barriers women face. For example, single moms who are receiving the child tax credit have recently run into the problem of having the child tax credit removed and are being told they have to repay the child tax credit, because CRA has decided they may be cohabiting. They're in a position where they have to prove that they're not. They have to provide three pieces of proof from friends, landlords, and their children's schools to show they're not cohabiting, and they have to provide three pieces of information stating the same from an ex-partner. You can imagine that in the case of ex-partners who are not on friendly terms, it could be very difficult. We've been advocating for these women on their behalf at CRA.
It seems to me that it might make more sense to have an advocate within various government agencies, someone who women could turn to. Would such an advocate be helpful in terms of seniors and in terms of addressing this issue of women confronting their economic problems?
4:10 p.m.
Adjunct Professor of Economics, Université du Québec à Montréal
You're raising another problem that has to do with programs that are targeted to low-income people. It's based on family income. Therefore, when there are two incomes, you lose very large parts of it.
One of the ways that would help to deal with it would be to lower the clawback rates. One of the problems with the child tax benefit is that if you have three children or more, for every $1,000 you earn, you lose $330 of your child tax benefit, plus 5% of your GST tax, plus you're paying taxes. People in those income categories often have tax rates of 80% to 90%. I think one thing the federal government could very easily do, which would benefit almost all middle-class families, would be to lower the tax-back rates, the clawback rates on the child tax benefit.
It's the same thing for the GIS. As I said, there's a 50% clawback rate that adds to tax rates, and it's the main problem with it being used as a poverty measure.
In terms of the application, well, there's no easy way to do it. Of course, the provinces are most often faced with the problem of whether or not they are cohabiting. I know Quebec has introduced a one-year rule and the cohabitation must be for 12 continuous months. It means that very short-term relationships do not have penalties.
Obviously, any kind of an ombudsman or a mechanism that gives support to women who are faced with that situation would be helpful.
4:15 p.m.
NDP
Irene Mathyssen NDP London—Fanshawe, ON
In your remarks you talked about child care and maternity and parental benefits being helpful in terms of addressing women's poverty.
A national housing program is something I would very much like to see. Would this help the economic situation for women? How important is it?
4:15 p.m.
Adjunct Professor of Economics, Université du Québec à Montréal
When you look around the world at countries that have low rates of poverty, particularly for single mothers, they have high rates of labour force participation. That's why I think that while we want women and men to be able to take care of their children, the most important poverty-fighting measure we can have for women is keeping their feet in the labour market when they have small children. That's why child care and maternity benefits are so important. When you're on maternity leave you maintain your relationship with your employer, and you maintain your income.
I also agree that the federal government could provide leadership and direct funding in the area of housing. In the Scandinavian countries, rather than having welfare or social assistance programs, they have housing programs. That means that when people are working at low incomes they also get support and are less likely to need to go on social assistance. There's a greater gap between social assistance and working at a low wage. I would be in favour of a housing program.
4:15 p.m.
NDP
Irene Mathyssen NDP London—Fanshawe, ON
Okay, thank you very much.
Monsieur Dussault, in the budget we heard yesterday there's an extension to age 71 for contributions by seniors to their RRSPs and RIFs. My concern is about whether seniors, particularly women in lower income levels, can afford RRSPs. I wonder if you can comment on that.
4:15 p.m.
Senior Research and Communications Officer, Federal Superannuates National Association
The measure that was announced yesterday raising the age from 69 to 71 to wait before withdrawing RRSPs is beneficial to those who have higher levels of income. So it definitely does nothing for those who have poverty-related measures.
4:15 p.m.
NDP
Irene Mathyssen NDP London—Fanshawe, ON
You spoke about pension splitting. We know that pension splitting is beneficial to couples with disparities in income. I wonder if you can comment on the impact of pension splitting on older single women. What effect does that have?
4:15 p.m.
Senior Research and Communications Officer, Federal Superannuates National Association
It has no effect at all--just like RRSPs benefit people in some situations. It does not benefit single women at all. It's not damaging to them, but it does nothing for single persons.
