Mr. Speaker, I will be sharing my time with my honoured colleague from Mississauga—Streetsville.
I appreciate being invited to participate in the debate regarding the old age security program, or the OAS, as it is commonly known. This discussion provides the perfect context to clear up some of the confusion, the miscommunication and misinformation that surrounds the issue of seniors' poverty.
I would like to start by assuring everybody that the Government of Canada recognizes financial security as a factor that has an obvious impact on our seniors' quality of life. As the Prime Minister has said, any seniors currently receiving benefits as well as those nearing retirement will not be affected.
Our government is vigilant on this issue and we truly appreciate the contribution seniors have made and continue to make in building our communities in Canada.
A key priority for the Government of Canada is to help Canadians prepare for and achieve financial security in their later years. We know that seniors are concerned about the economy and maintaining their standard of living in retirement. That is understood. This is an issue that has come into even greater focus in light of the demographic shift that we are experiencing.
It is no secret the Canadian population is aging. Events around the world and our aging population make it clear that the government needs to make responsible decisions to ensure that social programs are sustainable.
In 2011 the first baby boomers reached the milestone of turning 65. At the same time, Canadians are living much longer than ever before. Canadians can enjoy one of the longest life expectancies in the world at close to 81 years old. Taken together, these phenomena are profoundly affecting our country. The result is that the age structure of the population is changing so that there is a higher proportion of senior citizens.
There is a demographic projection we will hear quoted many times today that in less than two decades, close to one in four Canadians will be over age 65. To put it into some context, the proportion of seniors in Canada currently stands at one in seven.
There are obvious financial implications to living longer, as more seniors begin to rely on retirement income for longer periods. As a government we have done a great deal to ensure that Canadians have financial security in their later years. As I stated before, it is one of our key priorities.
The most important financial support we provide to seniors is through the public pension system. This system is highly regarded internationally, and for good reason. It has played a very significant role in reducing lower income rates among seniors. In fact, the incidence of poverty among seniors in Canada has dropped from a rate of 21% in 1980 to 5.2% in 2009. This is one of the lowest rates in the world.
We describe Canada's retirement income system as being made up of three pillars. The first pillar is one that dominates our discussion today, the OAS. The Canada pension plan, CPP, is the second pillar. The third pillar consists of personal savings, including employee pensions, registered retirement savings plans, tax-free savings accounts, as well as other savings and investments.
As members are likely aware, the government is seeking to build on the third pillar. To do this we recently introduced Bill C-25 to create the legislative framework for the establishment of pooled registered pension plans, PRPPs. PRPPs would provide the majority of Canadians who do not have workplace pensions with access to well-registered, low-cost, private sector pension coverage.
Let me revisit the first two pillars, OAS and CPP. Together these two public pillars are designed to provide a modest base upon which to build additional retirement income. This year Canadians will receive close to $72 billion in benefits through the Canada pension plan, old age security and the guaranteed income supplement, GIS.
It is true that these benefits do not come automatically. All Canadians have to apply for them. That is why we have taken steps to inform Canadians about their eligibility for these benefits and to help them through the application process.
Through HRSDC and Service Canada, our government is using direct mail, information campaigns, partnerships and community organizations to reach seniors who may be eligible for OAS and GIS.
Some of these efforts are aimed at seniors who are particularly hard to reach, such as those who are homeless, those who live in remote communities, immigrant seniors, aboriginal seniors, seniors with disabilities and those who do not speak either English or French.
We issue more than 600,000 application forms to Canadian seniors who are not yet receiving their CPP or OAS to encourage them to apply. Every year, we mail out thousands of pre-filled applications to people we think may qualify for GIS and the target group changes every year. Most GIS recipients now only need to apply once in their lifetime and have their benefits automatically renewed simply by filling out their annual tax return. As members can see, we are making great efforts to reach out to low-income seniors and to inform them about their benefits.
Speaking of benefits, I will speak a little more on the GIS.
As I said, the GIS provides extra support for seniors with little to no income and has a great success in reducing poverty among seniors. Our efforts to combat senior poverty does not stop there. In our last Speech from the Throne, we pledged that the government's low tax plan would permanently enhance benefits for Canada's most vulnerable seniors. We honoured that pledge last year by providing the largest GIS increase in 25 years. This measure will help Canada's lowest income seniors out of poverty. More than 680,000 low-income seniors are benefiting from this increase. These seniors are now receiving additional GIS of up to $600 for a single senior and up to $840 for couples.
In 2008 we increased the GIS exemption from $500 to $3,500. The earnings exemption allows low-income working seniors to keep more of their hard-earned money. This year we are providing more tax relief for seniors and pensioners, saving them $2.3 billion.
The measures I have just outlined demonstrate that the Government of Canada is taking concrete steps for seniors. We are actively helping Canadians prepare for and achieve financial security in their latter years. This is an ongoing effort for us because it is a key priority.