Status of Women Committee on Oct. 6th, 2009

[The Chair, Liberal, Hedy Fry]

Thank you.

The time is up now. We're moving to the second round, which is now five minutes for questions and answers included.

Madam Zarac.

[Lise Zarac, Liberal, LaSalle—Émard, QC]

Thank you, Madam Chair.

I was very pleased to hear that the CPP is sustainable for 75 years. My Liberal colleagues and Paul Martin worked very hard to ensure that this would be the reality for all Canadians.

I want to ask a question. We know that individuals need to apply for the Guaranteed Income Supplement. Do you know how many people are not getting it?

[Nathalie Martel]

With regard to what is referred to in English as the take-up rate, a Statistics Canada study was published recently. In 2000, the much-talked-about take-up rate, or the percentage of those eligible for and receiving the Guaranteed Income Supplement compared to the total number of eligible individuals was 87%. In 2006, that rate had risen to 90%, according to Statistics Canada. So, the take-up rate is increasing annually. This is due, in large part, to efforts by the government to ensure that the public is aware of the benefit, that the formula has been simplified, that more vulnerable groups, such as aboriginals, the handicapped and the homeless have been better informed. Service Canada is working hard to try to reach those people to ensure they know about the benefit and apply for it.

[Lise Zarac, Liberal, LaSalle—Émard, QC]

Do you know the amounts for women? Have they been calculated?

[Nathalie Martel]

What we do know is that the take-up rate by women is very similar. I do not have the exact figures, but I know that the Statistics Canada survey showed us that the improvement, since 2000, is also perceptible among women.

[Lise Zarac, Liberal, LaSalle—Émard, QC]

It is similar but is it slightly lower or slightly higher?

[Nathalie Martel]

If I remember correctly, I believe it is slightly lower.

[Lise Zarac, Liberal, LaSalle—Émard, QC]

Thank you.

[Nathalie Martel]

But I can check with the people at StatsCan who conducted the survey to find out if they have the exact figures.

[Dominique La Salle]

I simply want to add that I don't believe we will reach 100%, because people have to declare their income in order to get the Guaranteed Income Supplement. So, they will have to declare their income. There are people who, for personal reasons, do not. That is one thing.

We talked a little about discussions with the provinces to exchange information. That is exactly the kind of situation where it would be useful to get information to know who is receiving social assistance in one region, because the provinces are there, on the ground, with individuals, communities, etc. So the activities that Ms. Martel talked about and that Service Canada undertakes with at-risk or priority groups are done above all with community organizations who know who those people are. They know where the homeless are, and so on. We do not know. We are good for the major transfers, but we work with police services and so on to find individuals. We prepare materials.

Now, a one-time application is needed to get the Guaranteed Income Supplement. Previously, the application had to be filled out every year. Now, it's automatic as long as a tax return is filed; it's for life.

[Lise Zarac, Liberal, LaSalle—Émard, QC]

It's encouraging to see that positive measures are being undertaken here.

I'd like to go back to what my colleague Ms. Demers mentioned.

[The Chair, Liberal, Hedy Fry]

You have a very quick 10 seconds between the two of you.

[Lise Zarac, Liberal, LaSalle—Émard, QC]

You are talking about 1% more in 2011, 1% more in 2014 and you are referring to a quarterly review of income. When we are talking about a very modest $368, a $10-cut is significant.

When you talk about reviews, is there a way, given current technology... I too have received complaints from people in my riding who say that ultimately, since the review, they are getting less. We are supposed to be giving them more, but they are getting less. If this $368 is cut by $10, this has a significant impact on someone's budget.

[The Chair, Liberal, Hedy Fry]

Go ahead.

[Dominique La Salle]

I can't answer you. This concerns program integration; that is the issue.

[The Chair, Liberal, Hedy Fry]

Thank you.

Cathy McLeod.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Madam Chair.

I would really like to thank the presenters. It has been quite a fascinating start to our study. I was very pleased and pleasantly surprised to see how much recognition there is already within the programs for women of their unpaid contributions over time, in terms of child-rearing.

The $32 billion was just for the OAS and GIS, not the pension fund. Okay.

My next question is similar to ones we all hear from our constituents. I have an e-mail sitting on my desk from an 85-year-old lady. I'm not sure, but I think her CPP is indexed and went up slightly and she is seeing her GIS going down. She gave me three or four examples.

With someone living on CPP, GIS, and OAS, even though we do very well, intuitively you think that even if it's going down a couple of dollars.... I'm really trying to understand how that happens.

[Dominique La Salle]

I can speak to that.

We are living in a different time, with zero inflation. The OAS-GIS is indexed quarterly, and the CPP is indexed annually. There's not an exact match, so the CPP might be indexed based on the previous year and how prices have moved--an indexation of, say, 2%. The OAS is indexed quarterly, so maybe at the beginning of that period there was inflation, but for the second, third, and fourth quarters inflation was zero. That will only be caught by CPP the next year. But because OAS is done on a quarterly basis and you have zero inflation, your benefit does not increase. All these benefits are fully indexed to CPI, but not on the same frequency. At the end of the day, the indexation is the same over a period of time.

However, if you take a snapshot of this, the 85-year-old lady you are describing received an increase in her CPP because of the annual indexation for the last 12 months. This increased her income. Normally there would be an increase in the GIS due to inflation, but now there's no increase because there's zero inflation. So you see a reduction in the GIS because there's been an increase in the CPP. That reduction is 50%. It's the example Madam Demers was talking about. So an increase of one dollar in revenue, be it CPP or other, reduces the income-tested benefit.

That's the situation. It's very particular at this time because of the different frequencies of calculation of indexation.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

So is there ever a net loss?

[Dominique La Salle]

No. Over a period of time, the two indexation schemes produce the same result. But at a particular time there can be differences.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

So how can we explain this to an 85-year-old?

[Dominique La Salle]

You have to start by saying there was good intent. The good intent was that instead of indexing the GIS annually, we'll give you indexation every three months to really make sure that you're okay. It starts with good intent, and then you have those oddities that are there. The perfect scheme would probably be to have everything indexed the same, but then it's very difficult on the CPP front, as I understand.

[Heather Bordeleau]

I think it's more on the OAS front, because the quarterly indexation is to the advantage of pensioners. You get the money earlier, and then, of course, it builds. With the CPP, like many other pension plans, it is indexed annually.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

It sounds like the communication strategy needs to be much improved, because the perception is different from the reality, and it's a very hard-to-understand reality.

[Dominique La Salle]

Yes, it's complicated.