Mr. Speaker, it is a pleasure to join in the discussion on Bill C-490, concerning the cornerstone of Canada's retirement income system, the Old Age Security Act. I appreciate the opportunity to rise to speak about the government's record on seniors' issues because we have a record worth talking about.
Unlike the Bloc Québécois members who can only sit in the House and complain, the government has taken real action to support Canadian seniors. We recognize the contributions seniors have made and continue to make to our nation. That is why we have taken measures to ensure that the OAS and the GIS continue to meet the needs of seniors. Unlike the Bloc, we must concern ourselves with the consequences of our actions. We do not have the room for hypocrisy that members opposite have, knowing they will never form the government and never need to worry about the future of a program as important as old age security.
OAS is one of the most important programs in our social safety net. It is important for all Canadians, those who are seniors now and the Canadians who will be seniors in the future. It is the responsibility of the government to manage these programs so they will continue to exist in the future.
Bill C-490 proposes to increase the monthly GIS payment by $110 per month. I commend the hon. member for trying to find ways to alleviate poverty among seniors. I believe, however, this proposal would not achieve the results the hon. member desires. It would instead have the opposite effect. It would bankrupt the program.
We have spoken about this important issue in the House several times. I point out for my colleague that income for Canadian seniors has risen dramatically over the past 25 years. According to Statistics Canada, the income of Canadian seniors has more than doubled over the past 25 years and the rate of poverty among seniors has been cut from 21% in 1980 to less than 6% today. Canada now has one of the lowest levels of poverty among seniors in any country in the industrialized world.
Certainly it is not time to stop working to reduce poverty further because even one senior living in poverty is one too many. That is why the government acted when we elected to increase the GIS by 7%. We did this again in January 2007. These measures are providing all single recipients of the GIS with an additional $430 per year and $700 more per year for a couple.
These increases will raise the total GIS benefit by more than $2.7 billion over the next five years and benefit more than 1.6 million GIS recipients, including more than 50,000 seniors who were not eligible for the program under the previous Liberal governments.
The government heard from thousands of seniors across the country in the lead up to budget 2008. We heard that more and more of them wanted to remain in the workforce. They want to continue working, but under the previous Liberal regime they could not do it without having their hard earned benefits clawed back. That is why the government proposed in budget 2008 an increase in the earned income exemption to $3,500, up from the previous Liberal system that only allowed $500 in earnings before benefits were withheld.
My colleague across the aisle also proposes that we bring in unlimited retroactive payments of the OAS/GIS for eligible beneficiaries. I remind the House that currently these benefits are payable retroactively for up to a year from the month of application. This period of retroactivity is consistent with retroactivity provisions of most other international jurisdictions.
Moreover, it is important to keep in mind that these benefits have been designed to help low income seniors meet their current needs, not to compensate them for past needs. Yet, the government does make exceptions to the basic one year limit to ensure that seniors are treated fairly. If the person is incapable of applying, or is given bad advice or if the mistake is an administrative error of the government, we will ensure that people get the benefits that they are entitled to.
I would ask the House to consider the financial implications of adopting the proposed measure. It is estimated that there would be an initial lump sum payout to clients amounting to $300 million for each additional year of retroactivity. And where would it stop? A new five year limit could entail a payout of $1.5 billion, a 10 year limit would be more than $3 billion and unlimited retroactivity could be as high as $6 billion in initial lump sum payments.
The government takes significant efforts to ensure that eligible low income seniors receive the benefits to which they are entitled. GIS applications are sent to low income seniors who do not receive OAS and GIS. Our efforts have resulted in an additional 325,000 low income seniors receiving the benefits that they were not getting before.
Through Bill C-36, we have also enabled seniors to make a one-time application for the GIS and receive it whenever they become eligible, as long as they file a tax return.
These are reasonable actions that will ensure the OAS and GIS programs exist well into the future.
Speaking of the survivor's pension payment, the bill also proposes to pay six months of the deceased person's pension to the survivor. While we are all sympathetic to those who lose their life partners, it would be patently unfair to other single seniors living on single incomes. The GIS already makes adjustments for changes in family status because low income seniors may become eligible for the GIS or an increase in that supplement owing to their now single income status.
We should also remember that the Canada pension plan and the Quebec pension plan contain survivor benefit provisions.
Finally, the proposal to eliminate the requirement to apply for GIS benefits is, unfortunately, not workable. Formal application is needed since the information available from the Canada Revenue Agency is sometimes insufficient to determine eligibility. As well, some persons choose not to receive the GIS for personal reasons and it is incumbent upon us to respect their wishes.
The onus remains on the individual to make the initial application, but with the single lifetime application, most of the necessary information can be captured at the time the client first contacts Service Canada prior to their 65th birthday.
We can applaud the sentiments behind Bill C-490, but for the reasons I have outlined, we cannot support it. I can assure the House, however, that the Government of Canada will continue to ensure that its policies, programs and services meet the evolving needs of Canada's senior population.