Status of Women Committee on Nov. 3rd, 2009

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

Thank you, Madam Chair.

There are so many things I want to try to understand better. I would like to start with page 4 of Mr. Forbes' paper.

At the bottom, you talk about your third pillar. Could you talk about each of your bullets and help us understand what's behind each of them, in terms of the minister's intention? We've hit upon a couple in vague ways as we've gone along, but I'd like to understand them specifically in my linear mind.

[Chris Forbes]

Just to be clear, because my pagination may be a different from yours, are you talking about the announcement made on October 27?

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

Yes.

[Chris Forbes]

Okay. Mr. Rudin will answer that question.

[Jeremy Rudin]

Thank you; I'd be glad to.

We're speaking again of the legislative and regulatory framework governing private pension plans in federal jurisdiction. Here the reform proposals were grouped under five principal headings, which I will reiterate and then elaborate upon a little. The backgrounder runs to seven pages, so the chair won't let me read it to you.

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

Give us the Coles' Notes version.

[Jeremy Rudin]

Yes, this is the Coles' Notes version.

The first item is enhanced protections for plan members. We've already discussed a couple of these.

In addition, there are the employer contribution holidays: an employer deciding to stop contributing because, by their calculation, the pension plan is overfunded. These will be made more limited. Contribution holidays had been a contributing factor to low pension funding, as there was a failure to recognize just how volatile the value of the investments could be. hey will not be eliminated, to be sure, but they will be limited.

There will be a rule implemented that amendments that would enrich the payments in the pension plan cannot be taken if the pension is too underfunded. Benefits will vest immediately instead of, as under the current framework, after a two-year waiting period.

There's a variety of others. I'm sure the chair wants me to go on to the next topic: reducing funding volatility for defined benefit pension plan sponsors.

Here, the headline item is to introduce a new standard for establishing the funding position, such that it's less sensitive to the sorts of wild gyrations we've seen recently and more attuned to average performance over time. That will be of value to sponsors.

We've mentioned that the 10% pension surplus threshold in the Income Tax Act will be raised. This will make it more attractive for sponsors to fund their pension plans in anticipation of potential declines in values.

We have an aspect of this that looks at the resolution of plans' specific problems and would provide a mechanism for plans that wish to reorganize in co-operation, with the consent of their members and retirees; they will be able to do that in an expeditious manner. We've seen a couple of these reorganizations done essentially as one-offs recently. This would provide an ongoing mechanism to help solve these problems.

There would be some improvements in the framework that governs defined contribution plans, which are becoming more popular, and the hybrids somewhere between defined contribution and defined benefits plans, which are the negotiated contribution plans. These could also benefit from a clear regulatory framework.

And last, there's a modernization of the rules governing investments by the pension plan.

[The Chair, Liberal, Hedy Fry]

You have one minute.

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

I guess this would then go to the Office of the Superintendent. These will impact your office, I would expect. Can you talk a little bit about the anticipated changes?

[Jean-Claude Ménard]

Well, although it's my office, I'm not responsible for this particular section of the business of OSFI. But when I look at my responsibility for the Canada Pension Plan, everything that helps to reduce the volatility of financial markets is definitely helpful to all administrators, plan sponsors, investors. The idea of using the average solvency ratio over three years is certainly a good idea to reduce the volatility for funding.

Last week, my colleague came to this committee saying that the estimated solvency ratio for federally regulated pension plans has gone from 85% to 88%—a modest improvement, but still in the right direction. The 88% means that we have assets equal to 88% of the pension liabilities.

[The Chair, Liberal, Hedy Fry]

Thank you very much. I think we have ended this round.

We have a vote, so we must leave here at 5:30. Bells begin at 5:30 for a vote at 5:45.

I don't usually ask questions, but there is a question I want to ask.

What is the impact of income splitting, on women especially in their ability to be able to have access to GIS and OAS? If you “income split”, a woman who may have had zero income before will be able to get her GIS. If she splits income, she now no longer has zero income, so is she denied GIS, and does that decrease her OAS contribution?

So is the overall impact of income splitting poorer for the couple than it was originally?

[Louise Levonian]

The GIS is on a family income basis. Whether or not the income is split, the income is still on a family basis; it's not going to affect the—

[The Chair, Liberal, Hedy Fry]

And what about OAS?

[Ian Pomroy]

OAS is individually income-tested. If an OAS recipient happens to be near the OAS clawback range, then it could affect the—

[The Chair, Liberal, Hedy Fry]

It could affect the overall.

[Louise Levonian]

May I add one point to that?

Income splitting is a joint filing requirement, so both parties have to agree to do it. And both parties are liable for the tax, so it's not as though one party could do it and then reduce the other person's—

[The Chair, Liberal, Hedy Fry]

I understand that. I just think it diminishes the overall income, at the end of the day, especially with regard to the OAS. It is disconcerting, because one made that decision based on thinking that all families work in a particularly harmonious manner and that people can disagree to have income splitting, whereas in a family it may not be as easy for the woman to disagree to share in income splitting.

Anyway, that was a comment. I want us to move on. I got the answers I wanted about the impact on the OAS, which was the one that concerns me now and has always concerned me in the past.

Thanks very much.

You wanted to say something, Ms. Levonian.

[Louise Levonian]

Even if the woman couldn't make the decision, the overall income of the family would still be something that, hopefully, the male would take into account. If there's that kind of control, the amount of income overall in the family would be reduced, if they were not to split income. I think you'd weigh all aspects as to what the family's income would be.

[The Chair, Liberal, Hedy Fry]

I don't agree with that, essentially. We studied this a long time ago, when our government was looking at income splitting, and we felt that many women would actually be worse off and that the family as a whole would be.

Anyway, thank you so much for attending and for giving us the answers. Many of them were quite complex and difficult, but I want to thank you very much.

And thank you, Ms. Schirle, for being with us today.

We have to move into some members' business. We'll have a one-minute recess while we do so.

[Proceedings continue in camera]

[Public procedings resume]

[The Chair, Liberal, Hedy Fry]

The motion by Ms. Mathyssen reads:

That, pursuant to Standing Order 108(2), the committee invites the Minister of State for the Status of Women Canada to appear at the earliest opportunity to explain the extent to which federal government departments make use of Gender Based Analysis (GBA) across government departments for the process of decision making and the creation of policy.

Since it's Ms. Mathyssen's notice, I will ask her to speak.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Thank you, Madam Chair.

I hope to take the minister up on her offer to come here whenever we require and have questions or concerns.

My concern arises from two things. First is the appearance of the Auditor General at the public accounts committee and the information she gave that committee. I must say it was very much like the information she provided to this committee on concerns about deficiencies when it comes to the application of gender-based analysis.

I asked the minister this question because I think it's absolutely essential that there be consistent and effective GBA. Concerns were expressed by the Auditor General about having no written proof. There were verbal submissions or explanations back and forth, but nothing concrete that she could utilize in her determinations.

The minister did not answer my question. In fact she said:

Treasury Board submissions in 2007, also now under the leadership of this government, required evidence of gender-based analysis. In 2008 we put a requirement in place that all memoranda of the cabinet would require evidence of gender-based analysis.

I think use of the word “evidence” makes me very uneasy, because it's not concrete. Evidence is not proof. Evidence is not a sense of confidence that I think we should have in the process going on. I would like her to clarify what she means by evidence of GBA, and explain how reliable the GBA is in terms of the various departments.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

I'm going to open it up for discussion, but before I do so, because many people are new to the committee and were not here just before the last session, we had the minister speak to the issue of gender-based analysis. She suggested at that time—this is just for information—that she was not responsible for responding to the finance department, HRSDC, or the decisions of Treasury Board, and that those should come from the ministers themselves. We asked those ministers to come to explain, and neither minister came. They all had very plausible reasons for not turning up, but we still never got the answers. So in case someone says to call the ministers, I would like to point out that was done.

Mr. Van Kesteren.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

I think it's a wonderful motion, and we should vote on it.

[The Chair, Liberal, Hedy Fry]

Is there any other debate?

[Anita Neville, Liberal, Winnipeg South Centre, MB]

I won't go there. It's okay.