Debates of Nov. 23rd, 2010

Pensions

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Madam Chair, sometimes the principle of do no harm should guide the government members when they consider what bold actions are required to assist senior citizens so that they have stable pensions. But do harm they did, as I explained earlier to the House. The decision to amend Canada Revenue Agency policy on how registered retirement income funds are handled for the purposes of calculation of the guaranteed income supplement will cause huge, huge grief and insecurity for our senior citizens.

Seniors may not be aware of this change in May 2010, because certainly there has been no government publicity. Now, should they withdraw, say, $10,000 from their registered retirement income funds, RRIFs, to be able to adapt to or handle a major medical emergency like a heart attack or having to give care to a family member, the consequence is that $10,000 over and above the minimum annual that is required for withdrawal from a RRIF is all calculable for the purposes of whether or not that senior citizen will receive the GIS the following year. In addition to that, by not allowing that $10,000 to be considered optionable income in 2010, they will lose their GIS in 2011 and they will also lose certain provincial benefits that are tied to the GIS, such as a drug card. For the sake of a $10,000 withdrawal, those senior citizens will lose upwards of $17,000 to $25,000, and they do not even know they are about to lose it. This is wrong.

When we talk about the big scheme of pensions, we also have to consider the little details. That is a huge detail that is being lost by the government.

[Luc Desnoyers, Bloc, Rivière-des-Mille-Îles, QC]

Madam Chair, as I said earlier, the guaranteed income supplement needs to be amended. As the Canadian Labour Congress, the CLC, and the FTQ are currently proposing, we need to increase both at the same time to ensure that payments are made by the Government of Canada and not the provinces. We need to undertake an in-depth study of all current proposals and ensure that we are looking to the future. We can no longer be confronted with the same things that we were confronted with during this crisis, where ordinary workers lost their houses, their retirement funds and their right to live with dignity.

It is unfortunate, and this situation needs to be corrected as quickly as possible. Proposals are currently being submitted by various retirees' organizations and unions. We need to act quickly and study things thoroughly. Every day that passes, retirees are suffering. Workers in Quebec and Canada are suffering. It must stop.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Madam Chair, I am most pleased to take part in the debate on those pension reforms that are needed to protect and enhance the lives of Canada's seniors as they live out their sunset years.

From my reports, the House will know that over the last 19 months, I have been crossing Canada, holding some 39 community meetings, so far, on what I call the listening to seniors tour. I want to assure the House that these seniors have been very quick to tell me of their fears and their concerns about the future.

Today far too many of our seniors are forced to live in fear, just one crisis away from financial catastrophe. Seniors are worried about their private pensions and how they might be significantly less than what they were told they would be, or, as in the case of companies like Nortel, where there was a significant loss to the amount of pension income, they worry if they will have a pension at all going forward.

The genesis of my listening to seniors tour was when I was visited by a prominent group of seniors. One of my guests stated that seniors felt invisible to their government. This group also wondered why the government had given $14 billion a year in corporate tax breaks while, as they said, doing nothing for them.

The government will argue that there were things done over the past five years on behalf of seniors and some of that is factual. However, from the point of view of the seniors, they do not see that immediate impact for them.

One of the things we heard today was the corporate tax rate in Canada as compared to the United States. I may be incorrect but it is my understanding that the corporate rate in the U.S. 36% and we are nose-diving to 15%, and we are taking the fiscal capacity out of the government to respond to seniors needs.

Last fall, I told the House something worth repeating. It is the story of a senior who came to my office. He had a letter from the government saying that his pension had been increased 42¢ a month. I am pleased that the finance minister is here to hear this. This man was so upset, he had tears in his eyes. He said, “Not only does the government not give a damn about seniors, but it goes out of its way to insult us by sending us a notice that cost more to post than what it cost in the increase to the government”. He was very concerned.

We faced down the worst recession in years and some credit should go to the government, but Canadians throughout that process were vividly reminded of why we had a social safety net in the first place.

I am pleased to see the government has taken an interest in reviewing the benefits paid under old age security, GIS and CPP. I have to stress that this has also been done with an eye to increasing benefits for seniors.

Repeatedly tonight we have heard references between 200,000 and 300,000 seniors who live below the poverty line. An economist at the Canadian Labour Congress reported that an annual infusion of about $700 million would raise all seniors above the low income cut-off, what is more commonly known as the poverty line.

We heard the Bloc speak about a motion that it had before the House calling for an increase in GIS.

The 200,000 or 300,000 living below the poverty line is a very sobering statistic, but when we consider of that number, 60% are single unattached women, many of them women who never participated in the Canada pension plan because they stayed at home, this is nothing short of a national disgrace. We can do so much more and we must do much more for all senior Canadians.

Today only 38% of Canadian workers have workplace pensions. Nearly one-third have no retirement savings at all. Earlier today the Liberals presented a bill on guaranteeing a charter for the rights of seniors to save. For the one-third of Canadian workers who are outside the umbrella of having a pension plan and cannot save at all, we have to question what the charter would do for them.

More than 3.5 million Canadians are not saving enough in RRSPs, and I am sure the finance minister could back that up. They are not taking advantage of the opportunity that is presented by the government. Seventy-five percent of private sector workers are not even able to participate in a registered retirement plan. Clearly the notion that retirement savings can be adequately accounted for through the purchase of RRSPs has not worked out and requires urgent government action.

In June 2009 the NDP opposition day motion started, in a very public way, a national discussion on the future of our retirement security system. Members in this place today are continuing that discussion.

Part of the discussion from our perspective centred around increasing CPP and QPP funds. I would remind members that CPP and QPP are self-financing, so it then becomes a question of whether Canadians are prepared to pay more for security in their senior years as part of a secure public pension plan. Canadians certainly face insecurity today in the context of their private options, like RRSPs or defined contribution plans, that leave them uncovered or victimized by the market.

We believe it would also be a benefit to beef up CPP. That would be the cheapest way for Canadians and the government to pool risks, take the burden off individuals and secure their senior years. Any voluntary supplemental CPP system would simply not meet the needs of Canadians any more than what an RRSP has done in the past. The NDP believes it would be better to use the resources of CPP and QPP to enhance a retirement system.

I would like to discuss the need that Canada has for a pension benefits guaranteed fund.

Federal leadership is urgently needed to set about working with the provinces to develop a pension insurance regime. This must be done to ensure workers actually receive the retirement benefits they have earned, even if their employer goes out of business.

As I said, we insure our cars and our homes and we have deposit insurance to cover our savings. Why not insure our pension plans? The system would be funded by contributions from federal workplace pension plan sponsors administered by the federal government and designed to ensure efficiency and fairness to all parties.

Another notable model that is worthy of study is the American Pension Benefit Guaranty Corporation, and there are some issues with that. Similar to the Canada Deposit Insurance Corporation, the Pension Benefit Guaranty Corporation is not financed through tax revenues but by premiums paid by sponsors of defined benefit plans, assets from plans that are taken over, recoveries from refunded pension liabilities from plan sponsors' bankruptcy estates and through investment income.

Canada may choose not to follow the American model, but it could create some form of pension insurance uniquely its own or a hybrid of other plans, such as those in Switzerland, Sweden, Germany and Japan and even the Netherlands, which is probably not an option that we would look at here. The government of the Netherlands insures the plans.

Once a guaranteed plan is successfully combined with funding rules or other protection measures, it can effectively perform as a last resort benefit protection measure.

Another clause in our opposition day motion called for ensuring that workers' pension funds would go to the front of the line of creditors in the event of bankruptcy proceedings. My colleague from Thunder Bay was responsible for putting forward Bill C-501. He has worked hard on that file, trying to protect the pensions and severance of workers across the country.

Canadians need to know that there will be a level of pension income for their retirement to ensure that they will spend their final years with financial security and live in dignity.

[The Deputy Chair, NDP, Denise Savoie]

Perhaps the hon. member can complete his comments following questions and comments.

Questions and comments, the hon. member for York West.

[Judy Sgro, Liberal, York West, ON]

Madam Chair, I know the member frequently raises issues to do with the old age security, issues about which we all care very much. We continue to deal with seniors every day, those who are living either below the poverty line or on a low amount of money. Frankly, most Canadians would be quite embarrassed to find out that if their parents do not have a private pension, they try to cope with $12,000 or $14, 000 a year or, if it is a couple, maybe $22,000 a year.

Clearly for a country as rich as ours, we need to do better on that issue. I know the member has raised that periodically.

Has he reviewed the recommendations in the white paper that I recently put out and sent to all members? Clearly the NDP members got an early copy of it because someone else leaked it. Since they had that copy, I would like to know what his comments are to the white paper.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Madam Chair, I am struck by one of the things the member just talked about, and that is the $22,000 on which people live. I was in Elliot Lake when a woman came up to me and told me she lived on $1,160 a month, exactly what the member said.

We have differences on some points here or there, but everyone in this place is trying to find a way to improve the lives of seniors. Therefore, I am glad to hear her bring forward her points today.

The leaked document has not been leaked onto my desk, so I cannot respond to it. However, people know what the problem is. The problem is seniors do not have adequate pensions. If they are living on old age security and GIS, they do not have enough. Eleven hundred dollars a month does not do it. Therefore, we have to do something about that.

Madam Chair, you said I had a bit of time left so I could turn to my last page.

I want to talk about the fact that the NDP has put forward a plan, a seniors' retirement income security plan. We have talked about increasing the GIS to lift seniors out of poverty, strengthening the CPP by doubling it if we can reach that goal, adopting a plan to take in stranded pension funds and a national pension insurance plan. If we were to work on those four points, we would be well under way to making a better life for seniors.

[Jim Flaherty, Conservative, Minister of Finance]

Madam Chair, I will comment on the remarks of the member for Hamilton East—Stoney Creek.

There is this assumption made by Liberal members, and by the NDP member, that somehow we have two classes of people in our country: people who employ people and people who work for other people. It is just nonsense.

If they actually knew what was going on in the country, they would know that the biggest producers of jobs in are ordinary Canadians who run small and medium-sized businesses. They would know that if they paid attention in their own ridings, they would stop this false nonsense talk against employers and they would stop their nonsense talk saying that we should not reduce taxes on employers.

Of course we should. Why? It is the fastest way to create more jobs in Canada. We know that small and medium-sized businesses are the job generators. They are the job generators in the riding of the Liberal member for York West. They are the job generators in the riding of the member for Hamilton East—Stoney Creek. This is vitally important.

I was appalled earlier to hear the member for York West try to take credit for the working income tax benefit, known as WITB, and the tax-free savings account. The Liberals had 13 years in government and they did neither of those things. We became the government and we implemented both of them, despite the fact that we are in a minority Parliament. That is good public policy for Canada and I would hope the Liberal member opposite would acknowledge that.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Madam Chair, I was pleased to hear the finance minister talk about taxation. We have had taxation in Manitoba under the Doer government. Lorne Calvert and other NDP governments across Canada balanced the books repeatedly, over and over, but at the same time they took care of the social welfare of people.

If we want to talk about a corporate tax rate that is competitive with the United States, fine. However, the Americans are at 36% and we are dropping to 15%. Where is the competition? That is ridiculous.

The Conservatives are taking the fiscal capacity out of the country to take care of our seniors. They are taking $14 billion to $16 billion a year out of the fiscal capacity to do what is necessary for a better country. That may be humourous to them, but because of it people are suffering.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Madam Chair, I would like to change tack a bit and not get into all the arguments they are having. This is a question for the member that I hope he can answer at some length, if we still have time.

Today marked the third day of committee hearings on my bill, Bill C-501, which is an act to protect pensions for six million Canadians and their families right across this country. While there are some problems and some difficulties, we are working on them, and I hope that all the parties are working together on this.

One of the things that happened today was that we had a lot of witnesses from industry. They seemed very concerned that defined benefit plans are going to disappear or they are going down. They said, “Woe is me; what are we going to do?” I suggested an alternative and I would like the member to make a comment on it.

The alternative was the we have the best pension plan in the country that we can be part of, and it is the CPP. The Canada pension plan is the best pension plan we have. Everybody can participate. Everybody can be protected and, most importantly, the government cannot get its hands on the money.

I would like to ask the member if he would expand on his thoughts about the CPP and the value that it will have on an ongoing basis as we move forward in this debate.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Madam Chair, in fact I originally proposed Bill C-476, the Nortel bill. It was not timely and the member took it over and brought it to committee, for which I thank him and for the work he has done on it.

It is very clear that we have a system in Canada. The old age security system, which started in 1927, was to end poverty. The CPP was intended to do the same thing. Both have worked reasonably well over the long term, but the reality is that going forward, as the member for York West was saying a few moments ago, with the number of people who are going to be facing retirement in the coming years, it is essential that we build and expand that foundation. By taking the core assets of CPP and increasing them over 35 years, we can double the portion that is available.

In Hamilton, U.S. Steel right now is trying to take away the defined benefit plan for steelworkers, and that is happening in multiple workplaces across the country. If we lose the defined benefit plan, what is going to catch these people if the market is down when they do retire? We have to work on that foundation.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Madam Chair, picking up on the issue of GIS and the penalty that will be imposed upon senior citizens when, for an emergency medical need, for example, they have to cash out $10,000, a relatively small figure but huge to them in their needs, could the member comment on whether or not he is satisfied that the government has looked at all aspects of the needs of senior citizens and considered the fact that there are not two classes of seniors, those who pay taxes and those who do not pay taxes? There is quite a diversity and quite a range of senior citizens who have various needs.

A lower income senior citizen cashing out an RRIF may never know or understand that as a result of that decision, he or she is going to lose thousands of dollars in future years' income, because it will negatively affect his or her eligibility for GIS and whether or not he or she is eligible for a drug card.

With the hundreds of millions of dollars the federal government spends on advertising, why—

[The Deputy Chair, NDP, Denise Savoie]

Order, please. I would like to give equal time to the hon. member, less than a minute, 45 seconds.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Madam Chair, I agree with the member that seniors are going to feel very much blindsided by what has happened to them on this file.

I will give an example of something I discovered when I was elected, which the Liberals had done, and that was the disability tax credit that they were not promoting to people who were entitled to have it. There are hundreds of people in my riding who now have the disability tax credit because we informed them.

The government's job is to make sure the people are well informed on what is happening to them, and I agree with the member that in this particular case, they were not.

[Diane Ablonczy, Conservative, Minister of State (Seniors)]

Madam Chair, I am pleased to have this opportunity to share with the House actions taken by the government to help ensure that older Canadians have the supports they need to enjoy a good quality of life and a secure sense of well-being.

Our government recognizes the important contributions seniors have made and continue to make to both the economic and social fabrics of our nation. Seniors are living longer and healthier lives than ever before.

Recently, David Butler-Jones, Canada's Chief Public Health Officer, issued his report, “Growing Older—Adding Life to Years”. The report highlights the state of Canadian seniors' physical and mental health, as well as their economic and social well-being.

The good news is that Dr. Butler-Jones came away from the study with an overall positive outlook on Canada's aging population. He noted that people, by and large, are actually aging well. He says aging is a vibrant time and while sometimes there are infirmities along the way, people live life well, are engaged in their communities and contribute to society. It has never been better, says Dr. Butler-Jones.

This very encouraging observation is met with the reality, he says, that as Canada faces a larger older population, efforts made toward healthy aging need to be managed in more effective and meaningful ways. This is precisely what the federal government, in collaboration with provincial, territorial and municipal governments, intends to do.

The federal government also intends to ensure that older Canadians have necessary financial supports. We understand that financial security largely contributes to a secure sense of well-being. That is why, since 2006, this government has implemented several key measures to reduce the tax burden on seniors.

To date, our government has provided more than $2 billion in annual tax relief for seniors. That is more than $2 billion each and every year. Some of these measures include implementing pension income splitting; increasing the age credit twice, first in 2006 and then again in 2009, benefiting more than two million seniors; doubling the maximum amount of pension income that may be claimed under the pension income tax credit from $1,000 to $2,000, which removed 85,000 seniors from the tax rolls completely; increasing the allowable earnings exemption from $500 to $3,500; allowing registered retirement income fund annuitants to reduce the minimum amount required to be withdrawn for the 2008 tax year by 25%; and increasing the age limit for registered retirement savings plans from 69 to 71 years of age, allowing more flexible, phased retirement arrangements.

As we can see from that long list, we have been working hard to deliver real financial benefits for Canadian seniors, but our actions have not stopped there. Our government introduced the tax-free savings account, which is especially useful for seniors as withdrawals from it are GIS exempt. Today, over 90% of seniors are receiving support from the GIS and OAS, which provides over $33 billion in assistance to seniors each year.

As well as increasing supports, we have improved service delivery to better ensure that seniors receive the benefits to which they are entitled. The application processes for the Canada pension plan and old age security have been simplified and updated, allowing seniors easier access to these important supports.

Furthermore, by introducing automatic renewal of the guaranteed income supplement under Bill C-36 in 2007, eligible seniors no longer have to reapply for this benefit every year. While these financial supports and the delivery of these benefits are important, we have made significant progress in a number of other ways.

In 2007, our government created the role of Minister of State for Seniors to be a voice for older adults at the cabinet level. That same year we established the first ever National Seniors Council, which provides advice to the federal government on matters related to the well-being and quality of life of seniors. This fall the council held round tables across the country to gain perspective from Canadians on retirement and labour force participation among seniors and on intergenerational relations. The council will produce a report and recommendations on these topics in the spring.

One of the NSC's past studies was on elder abuse, an issue that this government takes very seriously. In budget 2008, we committed $13 million over three years to the federal elder abuse initiative to help educate all Canadians to recognize the signs and symptoms of elder abuse. With an aging population, it is important that Canadians be aware of this type of mistreatment and be empowered to stand up and to speak out.

Through this initiative, we are working with the provinces and territories as well as professional organizations and community support groups to take measures to help prevent the exploitation of older Canadians. One way that community groups are helping to get this message out is through funding from the new horizons for seniors program, a program so successful and in such high demand that we increased its annual funding to $40 million in budget 2010, so that seniors can continue to be provided with opportunities to be active and engaged in their communities. The new horizons for seniors program also assists seniors to be active leaders and mentors in their communities. They are best able to achieve this through programs that foster inclusion, good nutrition and physical activity.

Bill C-40, which creates National Seniors Day on October 1 of each year, received royal assent just last week. This day will give Canadians an opportunity to collectively celebrate the continued contributions of older Canadians.

I would like to commend my colleague, the Minister of Finance, who has been working hard with his provincial and territorial counterparts to help ensure that older Canadians continue to enjoy a sound, reliable retirement income system. I can assure members that this federal government wants seniors to continue to help create a vibrant and successful Canada. We want our policies, programs and services to encourage and support seniors to remain active, healthy and engaged in their families, workplaces and communities.

We remain committed to ensuring that older Canadians receive the benefits to which they are entitled, that they stay financially secure in retirement and that they remain free from abuse and hardship. We also remain committed to ensuring that Canada is prepared to deal with the demographic shift that is upon us. Right now one in seven Canadians is a senior. In the year 2031, it will be one in four. The so-called boomer apocalypse will have profound impacts on the social and economic fabrics of our nation.

We need to be honest with ourselves and each other as leaders, policy makers, policy influencers, advocates and Canadians that the choices we make today will not only affect the baby boomer bubble but also our children, grandchildren and their children. It is our responsibility to ensure that we leave them a Canada that is just as strong and vibrant as the one we have enjoyed.

Our government will lead in preparing for the future with the well-being of seniors and of all Canadians as our goal.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Chair, I would like to follow up on some of the comments and questions I had earlier regarding the treatment of senior citizens who elect to cash out a registered retirement income fund, RRIF. I am speaking of those who are required to do so not as an option or something they choose to do to purchase a luxury item, but specifically and especially those who have to cash out a RRIF, above and beyond their minimum annual requirement, to meet a medical emergency or some other need within their own family.

Currently under the guidelines that have been adopted and created by the Government of Canada, as of May 2010 for anyone who elects to cash out a RRIF, that income will be calculated in whether or not the person is eligible for the GIS, guaranteed income supplement.

That was never what this program was intended for. If someone is drawing employment insurance while over the age of 71 and needs a RRIF, that money is optionable. It is not impacting on the senior's eligibility for GIS, but if he or she draws money out from his or her RRIF, the individual could lose a lot of money. That was never what was intended when we promoted private citizen investment in RRSPs.

Why has the government done this? Will it see fit to correct it and put it back to the old rules?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Chair, I heard the member bring this issue up before.

These are issues that we continue to examine. As the seniors cohort grows, we are going to need to make sure that any anomalies in the system are addressed. We have done that in other ways, as well. We will continue to do that.

I thank the member for raising this issue. He knows it is being examined by the government. We are grateful in this country that we have a very low rate of poverty among seniors. It used to be almost 25% at the end of the 1970s, and today it is less than 6%. We have been tackling this issue successfully. We are proud of it.

We have one of the lowest poverty rates among seniors in the developed world. That does not mean there is not more to do, but it does mean that progress has been good. We will continue to be committed to it.

[Claude Gravelle, NDP, Nickel Belt, ON]

Mr. Chair, I really do not have a question but I do have some comments. Maybe the Minister of State for Seniors could comment.

I heard something tonight that was rather disturbing. A while ago I heard the Minister of Finance say that the Liberals and the NDP are obsessed with thinking there are two classes of Canadians. That is quite the statement to make.

Then I heard the Minister of State for Seniors say that seniors have the support they need. Well, a $1.50 raise in their pension is not the support they need.

Then she went on to quote, I believe it was Dr. Butler-Jones, who said that people are aging well and that they are coping well. In reality, they are aging in poverty.

I would ask the Minister of State for Seniors, the next time she runs into Dr. Butler-Jones and the Minister of Finance, to grab them by the hand, get away from Bay Street and take a walk on Main Street, Canada. They will see two classes of people, and they will see seniors living in poverty.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Chair, I am sorry that my colleague opposite has such a negative view of life.

In fact, Dr. Butler-Jones is the Chief Public Health Officer of Canada. He has tremendous expertise. His report has been very positive. There are obviously always exceptions, and we want to make sure that we support all Canadians.

If the member had been listening, he would know that the rate of poverty among seniors has fallen dramatically in this country. It is among the lowest in the developed world. Less than 6% of Canadian seniors live in financial need. We continue to address their needs with a number of measures that I have already outlined in my remarks.

Canada is a great country. It is a country that cares about all citizens. It is a country that continues to look for ways, and has a commitment to support every member of society. We will continue to do that. For the member to suggest otherwise is simply unfair to a great country that is doing extremely well and will continue to work hard on behalf of all citizens.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Chair, I know the minister has been working with and visiting seniors. In fact, at my invitation she attended a seniors complex that was actually trying to raise money to build an assisted living seniors home in Bragg Creek. I appreciate her making the effort to come out on a day that should have been the Sabbath for her. However, she came out anyway.

Perhaps the minister could reflect on how challenging this is. I am troubled by some of the comments made tonight that we are going to fix this and we are going to fix it right now. Let me read a quote by the finance minister for Ontario, Dwight Duncan:

I have always felt this is going to be a long process. We have to look at moving toward a better integrated national pension system, both private pensions as well as the public pensions.

I wonder if the minister could say whether that is what she has been hearing from the many seniors she has been meeting with across the country. Let us not make a mistake; let us make sure we get it right. Is that what the minister has been hearing?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Chair, my colleague mentioned retirement income security. There is a concern about that across the country, particularly in light of the recent recession and some of the difficulties that savings and investments encountered in that period.

I have had the privilege of attending some of the round tables on retirement income security. People understand that there are ups and downs in investments and savings. They understand that this is a long-term landscape. They want to make sure there is more security for people in retirement but they also want, as my colleague said, to ensure that leaders do not rush into arrangements which may turn out to be unsustainable or ill-considered in the long term.

It is difficult sometimes to not see the magic bullet appear right away. I commend my colleague who has spent countless days and hours attending round tables and public meetings listening to Canadians. He himself has been a tremendous leader in that regard and has shown a real commitment to the well-being of seniors.

I am confident that my colleague, the Minister of Finance and other leaders will get this right. I know they are working hard to do that.

[Judy Sgro, Liberal, York West, ON]

Mr. Chair, given the fact that the Minister of State for Seniors does not seem to have an awful lot of compassion when it comes to the 6% who are still living below the poverty line and given the fact that the government has lots of money for fake lakes, the G20 and all of the rest of it, why is it that the Minister of State for Seniors has not been able to get enough money to help the 200,000 people who continue to live below the poverty line?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Chair, I know my colleague has a real concern for seniors. The member will know that the GIS was increased in 2006 and again in 2007. We continue to examine ways to assist the small cohort of people who truly live in very difficult and desperate circumstances. We recognize that. We are working with the provinces and territories to address it.

I know the member will also be working with other members of the House to look at this issue. I think there will be some movement on that on an ongoing basis until we can ensure that all people have the kind of security they need.

[Judy Foote, Liberal, Random—Burin—St. George's, NL]

Mr. Chair, I rise to speak to this very important matter for all Canadians, not just for seniors and retirees.

In 1927, Liberal Prime Minister William Lyon Mackenzie King presided over the establishment of Canada's first old age pension plan. In the true spirit of Liberal values, the Liberal Party of Canada took a historic step by enacting this legislation and set a trend that would continue. Next it was Louis St. Laurent who delivered the Old Age Security Act. Then in 1963, another Liberal prime minister, Lester Pearson, began working on the Canada pension plan.

As has been pointed out by my colleagues, the Liberal Party of Canada has a collective legacy of valuing the long-term pension security of Canadians. It should be noted that all of these Liberal prime ministers were opposed by the Conservatives of the day. The Conservative Party has a progressive history of opposing improvements to Canada's pension plans and ignoring one of the most vulnerable groups in society. The Conservatives would rather allow our seniors and pensioners to fend for themselves. Quite frankly, this is simply un-Canadian.

While we have an old age security and pension system that has served Canadians well in the past, the Liberal Party recognizes the need to change and improve upon the system that we have grown and nurtured over the years. That is why we are fully supportive of Bill C-574, which is known as the retirement income bill of rights.

It is clear that the next 20 to 30 years will present serious challenges to Canadian pension regimes. An aging population, long natural lifespans and record levels of personal debt will be compounded by lower disposable incomes and continued global economic instability. If we are to plan for the future security of our pensioners, seniors and other vulnerable members of our society, we have to act now. We must act with decisiveness to ensure the viability of our pension security systems in the long run.

There are a number of principles that the Liberal Party of Canada has developed through its expert working group on retirement income security. The first is the inherent value of functioning pension systems. The Liberal Party understands that a robust and dependable retirement income regime is in everyone's best interests. It is really quite simple. Canadians, in fact all people, are happier and more productive during their working life when they are assured of a steady income upon retirement. Subsequently, there is less strain on other social services such as welfare, housing and health care.

There is also the question of dignity. Statistics show that poverty is a very real factor in Canadian society, particularly in the population over 65 years of age, and any suggestion that that is not the case is foolhardy. No one should be living in poverty. It does not matter if it is 6%, 10%, 20%. No one in this day and age in this country should be living in poverty.

Rising costs of basic living are claiming more and more of the income of seniors and retired Canadians. Higher taxes, higher home heating costs, higher transportation and health care costs all point to the need to adjust our current retirement income regime to meet these basic expenses. No Canadian who has worked a lifetime should face the difficult decision of having to pay for medication or to pay the heating bill.

The Liberal plan as laid out in Bill C-574 would ensure that our seniors would not have to deal with such choices, that they would in fact be able to live in comfort.

What the Liberal Party plans to do is to revisit the pillars of the Canadian retirement income system. Traditionally these pillars are: old age security, the guaranteed income supplement, the CPP, or QPP in Quebec, and the various privately sponsored tax-deferred plans. While these Liberal pillars have provided for a strong system in the past, they need to be enhanced in the face of new pressures such as an aging population and the instability of global markets, to name just two things.

What we need to do is to shore up the strengths of the current system while purging its weaknesses. What we propose is a holistic approach to strengthening the current system. Unfortunately for millions of Canadians, only the first two pillars of the system can be relied upon in retirement and old age.

Most Canadians will qualify for old age security and the guaranteed income supplement, as well as the CPP or QPP. However, a Statistics Canada report released on May 25 of this year reports that 75% of private sector employees in Canada did not have a registered pension plan at the end of 2008. That is 75%. Let us keep that number in mind.

This number means that millions of Canadians face dismal prospects after a lifetime of working and contributing.

Every year, I hear from a growing number of my constituents who are affected by clawbacks in their guaranteed income supplement. Every July, I receive many calls from seniors when their incomes are assessed and adjustments are made. If they have an increase in their annual income, such as a CPP increase, this results in a reduction of the guaranteed income supplement.

Let me give an example of how this directly impacts seniors. One lady in particular stands out in my mind. Mrs. Marion Russell of Stephenville Crossing in my riding is 70 years of age and a widow who worked her entire life. Because of an increase in her CPP, she lost the $4.51 she received in GIS. But more importantly, she lost her provincial drug card, her card that enabled her to have access to those medications that she needs in her old age to deal with health issues that she faces on a daily basis. This is simply unacceptable. That a minor increase in CPP could result in the loss of her GIS and her drug card should be cause for concern for everyone.

That is why we are here tonight having this take note debate. That is why my colleagues and I are fighting for our seniors and pensioners.

That is not all. As we speak, there are seniors in my riding and across this country who are sitting in malls to stay warm because they cannot afford to keep their homes heated. There are seniors who are malnourished because they cannot afford good food to keep them healthy.

We know for a fact that right now Canadians are more dependent on food banks than at any other time since the Great Depression.

In January of this year, I had the opportunity to meet with many of my constituents at a town hall meeting in Stephenville to discuss seniors issues and pension reform. I was joined by my colleague, the Liberal critic for seniors and pensioners. What we found was not surprising. People are concerned that the pension plans they have paid into all their lives are not going to be there when they retire. Too many people are simply unable to cover the basic costs of living on CPP and GIS alone. When adjustments are made to their income, many people stand to lose what precious little resources they have, by way of clawbacks to their payments.

The Liberal Party has been pressing the government for reforms to make retirement easier and more secure. We have been consulting with our constituents and Canadians across the country to develop a plan that will facilitate safe and secure savings for retirement.

The Conservatives, on the other hand, are failing to live up to the rights of Canada's seniors and future pensioners by neglecting to undertake much needed pension reform. Today, 1.6 million seniors in Canada are living on less than $15,000 annually. In less than 10 years, one in five Canadians will be over 65. This presents an immediate challenge and we need to act quickly with solid pension reforms.

Given the rising debt load of Canadians and the increased cost of basic living, it is simply unrealistic to expect Canadians to survive with any dignity on old age security and CPP alone.

That is why we are recommending that pension reform should now include private savings outside of tax-sheltered plans. Public and private structures should be integrated with a goal of providing more coverage to Canadians who run the risk of falling through the cracks as the situation now exists. In particular, what we are proposing will benefit women who statistically endure greater rates of poverty because of factors involving longevity, employment type and tenure.

Other specific pension reforms the Liberal Party is calling for include a supplementary Canada pension plan to give Canadians the option of saving more for retirement, allowing employees with stranded or abandoned pensions following bankruptcy the option of growing their pension assets in the Canada pension plan, and protecting vulnerable Canadians on long-term disability by giving them preferred status as creditors of bankruptcy.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Chair, I listened with interest to my hon. colleague across the way talking about this very serious issue that we are discussing tonight. If I heard correctly, she suggested that the Liberals would address all facets of the pension system.

My first question is, would that be in discussion with the provincial and territorial partners? My sense from her comments is that the Liberals want to just go it alone. We all know that constitutionally that is not possible. So I am hoping that the Liberals have actually spoken to some of their colleagues in the provinces to make sure that what they are suggesting would work. I would hazard a guess that provincial colleagues, ministers in other provinces and territories, would not agree with that.

Secondly, the hon. member used the number of 75% of Canadians not having registered pension plans. That is an interesting comment but does not take into account that many Canadians have prepared otherwise for their retirement, whether it is with their business or a second or third home for rental that they would sell and use for their retirement. Have the Liberals taken that into account?

Have the Liberals taken into account how effective it would be if we continued to lower taxes for Canadians so they actually have more money to save?

[Judy Foote, Liberal, Random—Burin—St. George's, NL]

Mr. Chair, I appreciate the comments from my colleague, but let me reassure him that as a Liberal Party and as the official opposition, everything we do in terms of trying to improve things for Canadians we do in consultation. We would not for a minute think that we could just barrel through and not have consultations with the provinces and territories.

In fact, to suggest that maybe they would not be receptive to any kind of improvements does not speak very well in terms of what this member thinks of the provinces and territories and their leadership on this particular file.

Clearly, we will be doing everything we can and we have had ongoing discussions in terms of consultations on this particular issue. Those consultations will continue to exist.

To suggest that there are other ways that people can compensate for not having a pension, we all know that having access to a pension that is secure is the security that Canadians look forward to having so that they can live in comfort in their retirement and not be at the beck and call or the whim of what is happening in the marketplace.