Debates of April 26th, 2012

Question No. 522

[Leona Aglukkaq, Conservative, Minister of Health and Minister of the Canadian Northern Economic Development Agency]

Mr. Speaker, since 1998, the Aboriginal Healing Foundation, AHF, has received $515 million to provide community-based healing initiatives to address the experiences of former students of Indian residential schools and their families and communities.This investment includes the provision of $125 million in 2007 as part of the Indian residential schools settlement agreement, the IRSSA. In 2010-11, $46.8 million was allocated for the Indian residential schools resolution health supports program, the IRS-RHSP.

In addition, in budget 2010 the Government of Canada announced an investment of $199 million over two years in new funding to Health Canada, Aboriginal Affairs and Northern Development Canada, and Service Canada to meet the increased costs associated with implementing the IRSSA. Going further, economic action plan 2012 commits to continue work with aboriginal communities and organizations, provinces and territories to improve the mental health and well-being of aboriginal peoples in Canada.

In 2011-12, Health Canada provided approximately $245 million for a range of on-reserve mental health and addiction services, from mental health promotion to addictions to suicide prevention to counselling and other crisis response services, treatment services and after-care services.

Health Canada works with its regional and national partners to ensure that all former Indian residential school students and their families are aware of the services available to them via the Indian residential schools resolution health support program. Health Canada has reached out to all former Aboriginal Healing Foundation projects to assist them in referring their clients to Health Canada’s existing services. Information has also been distributed through direct mailings to community health centres, nursing stations and treatment centres, and has been sent to former students participating in an adjudication hearing, participating in a truth and reconciliation event, or receiving a common experience payment.

In order to ensure access to services for eligible former students and their families who had been previously served by Aboriginal Healing Foundation projects, Health Canada has entered into 26 new agreements with aboriginal service provider organizations and has enhanced funding to 22 existing service providers. Of the 26 new contribution agreements entered into by Health Canada to deliver resolution health support program services, 20 are with aboriginal organizations that were previously funded by the Aboriginal Healing Foundation. If services are not available in an individual’s home community, Health Canada will arrange for transportation to a professional counsellor or cultural support provider, or for a resolution health support worker to visit the community.

Health Canada does not have data available on the number of clients served. Rather, data is collected on the number of funded service interactions and counseling sessions and is available at the national level only.

In 2010-2011, the most current year with complete data, IRS-RHSP delivered approximately 170,000 emotional and cultural support service interactions to former IRS students and their families and approximately 31,000 professional mental health counselling sessions.

In 2009-2010, the IRS-RHSP delivered approximately 80,000 emotional and cultural support service interactions to former IRS students and their families and approximately 27,000 professional mental health counselling sessions.

Question No. 524

[Malcolm Allen, NDP, Welland, ON]

With respect to the Crop Logistics Working Group formed by Agriculture and Agri-Food Canada on November 7, 2011, what progress has been made with regard to: (a) a template service agreement; (b) movement of product in producer cars; and (c) key public sector performance measurements?

[Gerry Ritz, Conservative, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board]

Mr. Speaker, with regard to (a), regarding a template service agreement, the crop logistics working group allows agriculture stakeholders, including shippers moving product in bulk and intermodal and carload shippers, to identify common interests and exchange views about issues, including service level agreements, in support of the Transport Canada facilitation process following from the rail freight service review. A crop logistics working group subcommittee continues to work to support agriculture sector stakeholders who are involved in the Transport Canada facilitation process.

With regard to (b), the crop logistics working group provides a forum to discuss and exchange views and to examine in detail operational issues, such as the movement of product in producer cars, arising from the transition to marketing freedom for wheat and barley. A crop logistics working group subcommittee considered issues related to moving product in producer cars and has submitted recommendations to the co-chairs of the working group.

With regard to (c), the crop logistics working group fosters discussion among agricultural stakeholders on key public sector performance measurements to reflect the present and future needs of an evolving crop logistics sector. A crop logistics working group subcommittee is documenting the range of grain industry performance measurement initiatives being undertaken by public and private entities, including the performance measurement protocols and methodologies involved in this performance measurement work. The subcommittee is also identifying the gaps in grain industry supply chain performance measurement and is working to develop a grain logistics performance measurement framework.

Question No. 525

[Malcolm Allen, NDP, Welland, ON]

With respect to the Crop Logistics Working Group, formed by Agriculture and Agri-Food Canada on November 7, 2011, when will a report be available on the progress made by this working group?

[Gerry Ritz, Conservative, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board]

Mr. Speaker, the crop logistics working group’s terms of reference include a briefing for the Minister of Agriculture and Agri-Food. The working group is not preparing a formal report.

Questions on the Order Paper

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Madam Speaker, I ask that the remaining questions be allowed to stand.

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

Opposition Motion—Pensions

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

moved:

That this House reject the government’s plan to raise the age of eligibility for Old Age Security and the Guaranteed Income Supplement from 65 to 67 years even though the current system is financially sustainable.

Madam Speaker, I am pleased to introduce this motion, which reaffirms our dedication to seniors and the viability of old age security in Canada. This motion highlights that the system is sustainable if we maintain the eligibility for OAS at age 65.

I am also pleased to be splitting my time with the member for Pierrefonds—Dollard.

The motion is about government priorities or, more accurately, the lack of intelligent practical priorities that benefit Canadians. Investing in seniors, investing in our economy and ensuring they have security is essential because seniors spend all of their money in their community. They shop at home and create jobs in local businesses.

I also want to talk a bit about the impact of the government's decision to increase the age of retirement to 67 on young people who are working today.

Raising the age of the OAS-GIS penalizes younger Canadians. The Conservatives claim that their changes are necessary to ensure that the pension system is viable for future generations. However, the Parliamentary Budget Officer, the OECD and numerous other pension experts dispute this claim.

This change proposed by the government will hurt younger Canadians more than the baby boomers of today. These young Canadians are already facing record levels of unemployment, which tends to reduce income levels later in life. There is an extremely high level of student debt among these young people and housing costs are eating up more and more of their earnings.

The government's decision will make life for young Canadians even more difficult. It will affect the poor the most. Those who can least afford to choose will be impacted negatively. Above all, senior women will be disproportionately affected.

I have been meeting with seniors across the country, as has my partner in the seniors pensions portfolio. Yesterday, I was in Truro, Nova Scotia where I talked to seniors who told me that investing in seniors should be a priority.

Canadians have taken great pride in the social safety net that we have in this country. Beginning in 1927, J.S. Woodsworth convinced the minority government of Mackenzie King to create the old age pension, which, in about 1952, became the OAS. Since that time, we have seen all kinds of changes, with the addition in 1967 of the GIS, all to help alleviate seniors' poverty.

The OAS is universally available to all retirees who have lived in Canada for 10 years or more and full pensions for those who have been here for 40 years after age 18 with pro-rated scales for those who have been here for less than that time. It is the first of three government supported retirement income systems, the second being CPP-QPP based on workplace earnings and the third being private savings like workplace pensions, RRSPs and RRIFs. For singles, the maximum OAS monthly payment is $540.12. The average is about $508. The maximum GIS is $732 with the average being $491. That makes a total income for a single person of $15,270. The low income cut-off in Canada is $18,373.

It is interesting and quite disturbing that when it became clear about 35 years ago that there would be lots of baby boomers, the government's response was that we must have RRSPs. In the interim, we have discovered that RRSPs are expensive in terms of government revenues. It costs about $18 billion to supplement RRSPs.

The tragedy is that RRSPs are not a good savings vehicle. About 40% of their value was lost through management fees over a 45-year period. If it is necessary to cash them in, such as if someone needs a new roof or the furnace breaks down, there is a huge penalty. Fewer than 30% of Canadians are able to find enough money at the end of the month to even consider RRSPs. Therefore, as a savings vehicle, they are not very good.

The next concern about pensions probably heated up with the Nortel employees. Many of those employees lost 40% of their pension benefits. I need to underline that pensions are deferred wages and they belong to the employees. Nortel declared bankruptcy and then sold off a great deal of intellectual property that was worth millions and billions. The governments in the U.K. and in the United States protected their Nortel workers' pensions. Canada did not. The Conservative government chose not to and it could have because the NDP had a bill before the House, workers first, that would have protected holiday pay, severance pay and pensions. The government could have acted and chose not to.

Because of the Nortel meltdown and the crisis that so many workers faced, people became aware that only 30% of Canadians have private pensions and many are dependent on CPP, OAS and GIS. In many cases, it is simply not enough for people to manage, particularly single women. The call for reform was out there, and justifiably so. The federal government agreed to meet with the provinces and nine of them wanted pension reform. Alberta balked and the federal government then said that it would bring in pooled registered pensions plans.

I will tell everyone about pooled registered pension plans. First, the employer may or may not set up a PRPP and the employer determines the level of contributions, although the employer may choose not to contribute. If employees want out, they need to give 60 days written notice. The problem with these so-called pension plans is that they are not indexed. They are defined contributions without any set or determined pension benefit. They are gambled on the stock market. They are not reliable and have very high management fees. It is just another crapshoot, which is simply not acceptable. Nothing in the PRPP proposal sets management expenses at levels equal or lower than those of the Canada pension plan. As a result, CPP is still a much better deal.

What is needed is real reform and six provinces are still interested in talking. I will begin with CPP, which is the best way to save for retirement. It covers 93% of Canadian employed workers, essentially the entire labour force, and it is portable from job to job across the provinces. It keeps up with the cost of living and is exclusively financed by workers and their employers. It is absolutely independent of any cost to government. It is safe, secure, indexed against inflation and, as I mentioned, there are very low management fees. In terms of CPP reform, a modest increase in CPP contributions, as Bernard Dussault, the former chief actuary for Canada pension, said, is absolutely doable. Therefore, we can do that.

We can also take a very close look at OAS. We know that the Parliamentary Budget Officer has been very clear in saying that we can afford OAS now and in the future. Right now it is about 2.3% of gross domestic product. In 2030 it will climb to 3.3% and then it will go down significantly. To pretend that we cannot afford it is simply abusing the numbers.

I hope the House will support this motion. It is absolutely essential. If we respect our seniors, we will make sure their pension and their retirement is secure.

[LaVar Payne, Conservative, Medicine Hat, AB]

Madam Speaker, I was listening to the opposite member's speech.

We have heard that there are some really simple facts. The number of Canadians over the age of 65 will increase from 4.7 million to 9.3 million over the next 20 years. At the same time, by 2030, the number of taxpayers for every senior will be two, down from four in 2010. This is pretty simple math, more seniors and fewer workers.

Would the member opposite explain why they are refusing to look at those particular facts?

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

Madam Speaker, I am reminded of the old saying that one can use numbers and figures for whatever one wants, and in this case the government is manipulating figures.

Yes, there will be 9.8 million seniors, so let us plan for them. Let us start now. Let us start with plans around their health needs, home care, long-term care and pharma care. Let us consider their need for affordable housing. The government has no interest in a national affordable housing strategy and seniors' main concerns about their finances, their housing and their health care, as the three top priorities.

The government uses figures, and that is fine, but I trust the OECD and I trust the Parliamentary Budget Officer, who said that in the 1990s, the cost of OAS was about 3% or higher. Right now it is 2.3%. It will rise to 3.3% in 2030 and then decline.

We can absolutely afford this, and to say anything different is to undermine and cheat the seniors who built this country.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Madam Speaker, I would like to thank my colleague for moving this motion and making the opening statement.

I would like to begin by situating the debate where it belongs. For people who have worked their whole lives, old age security means independence and dignity. It is a universal program for everyone, but in particular, it helps fight poverty among seniors.

Raising the age of eligibility means downloading responsibility onto the provinces because many people will have to rely on social assistance.

I would like my hon. colleague to comment on that. Are we not fighting for the dignity of people who have contributed so much to today's society?

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

It is interesting. Madam Speaker, you may recall I said in my remarks that the government did not consult with the provinces when it decided out of the blue that it would raise the age of retirement from 65 to 67, and it will have a profound and negative impact.

The provinces and private insurance at this point in time base the retirement age on age 65, so there has been no discussion. There has just been this heavy-handed “thou shalt”.

One of the realities, and we have discovered this through our research, is that raising the age from 65 to 67 will indeed have a profoundly negative impact on seniors. It will increase their poverty rate by as much as 28%, 38% for senior women. That means we will have 95,000 more poor, impoverished, struggling seniors.

This is a country that was built on the belief in support for people, in the social safety net, in making life better. I do not see anything better about what the government has done.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Madam Speaker, today is the second time the NDP has proposed an opposition day motion on old age security. It did so the first time a few weeks ago because the government raised some suspicions about how it planned to go about reforming the old age security program. The Conservative government refused to answer any questions, which is why the NDP moved an opposition day motion to ask the government not to balance the budget on the backs of seniors.

Unfortunately, we need to have a second opposition day dedicated to old age security today because the government finally announced its plans and confirmed the fears of many Canadians. The government confirmed that it would gradually raise the age of eligibility for old age security from 65 to 67.

I am proud that we, as a party, are opposing this austerity measure proposed in the Conservative budget.

Some time ago, I travelled around the province of Quebec and met with many people from across the province. I would like to share their concerns with the House today.

First of all, they asked me what would happen to their private pension plans. That is one concern that was raised and that is completely understandable. In fact, many doubts remain about what will happen to these pension plans if the government raises the age of eligibility for old age security. Some may ask, what does one have to do with the other? There is definitely a difference between old age security and private pension plans arranged between employees and employers. However, they are related. Indeed, the calculations made by employers for their private pension plans are based on the fact that employees will receive old age security at age 65 and the employers can therefore reduce the amount of the private pension when the old age security is paid out.

People are worried. Small unions have just negotiated their working conditions and pension plans, and they are worried about whether they will be able to renegotiate their pensions or whether there will be a gap between when their private pensions diminish and when they receive old age security. That is one concern for which, unfortunately, we have yet to receive a clear answer.

I was also asked when the Prime Minister intends to retire. Unfortunately, I cannot answer that question, but I would like to.

People are also wondering whether there are other ways to reform old age security, since the proposed reform seems to be a direct attack on the people who are the most vulnerable to poverty. It is true. Why is this government choosing to push back the old age security eligibility age? Unfortunately, we have no information on that either.

The government seems to be making things up as it goes along. It needs to make cuts somewhere so why not here? There are other solutions, but there have been absolutely no discussions on this whatsoever and this is another question we are unable to answer because the Conservative government is not providing us with any information.

In any event, one thing is clear: there is no need to cut old age security. To me, the types of cuts the government wants to make to old age security are not the issue, because the important thing here is that the government does not have to touch old age security.

Someone else asked me the following question. He wanted to work longer, but his employer lets go of employees when they are 50 or 55 because he says they get too old or cost too much. That person wanted to know whether the government had thought about that.

That is a very good question. Just because the government requires people to work two more years, that does not mean that everyone can. When a person does physical labour, at age 55 their body is no longer able to do the work. Even if the government threatens to cut people's pensions or to give them money later, they might not be able to work that long.

Then there are the people who want to work longer and can, but are dismissed when they reach a certain age or are strongly encouraged to leave their job to make way for young people. This brings us to another possible solution. If the government wants people to work longer, then why not give employers incentives to keep their employees longer? That would be a good way to address the problem.

The government could also help people who decide to continue working after the age of 65 or 67. That is already built in to a certain extent because people who decide to continue working for another five years are not penalized and they accumulate the amount of old age security, which they can receive later. This is one example of a very attractive incentive. No one's arm has to be twisted. However, it will not be any more effective, because those who can no longer work at 55, 60 or 65 can no longer work, and that is that. There are other ways to encourage people to stay in the labour market, and there are other ways to encourage employers to keep their employees longer.

Can the hon. member tell me how to better prepare myself? The Conservative government keeps on saying that it will give us time to prepare ourselves for the delay in accessing old age security. What can I do? Hon. colleagues, there are things that can be done to prepare for retirement. Unfortunately, not everyone can do them.

Consider that someone working full-time at minimum wage may be living below the poverty line. Will this person be able to put aside $50 or $75 a month for retirement? Unfortunately, they will not. Even if they were told 20 years in advance, this person would not be able to adequately prepare and would be affected by the increase in the eligibility age for old age security.

There is something else I wanted to talk about. I believe that these concerns and questions that are not being addressed indicate that the increase in the eligibility age will have major consequences. This is a direct attack on the middle class and on the people most vulnerable to poverty.

The government has not convinced us that it was necessary to make cuts to the old age security program. Experts have all stated that the old age security program is sustainable. The member opposite spoke about “pretty simple math”. I am sorry but, in my opinion, a minister's common sense or the “pretty simple math” done by a Conservative member do not hold up against a study conducted by a Government of Canada chief actuary. They do not hold up against the findings of a parliamentary budget officer, a study conducted by the OECD on pensions throughout the world or a study conducted by university X or Y, which all show that the old age security program is sustainable. I am sorry but the “pretty simple math” argument does not fly. I do not believe that it holds up against the opinion of experts who all agree that the program is sustainable.

The number of seniors will in fact increase for 5, 10 or 15 years, but we are able to deal with that increase since it was expected. Actuarial calculations are done over decades, 50 or 60 years even. The actuarial calculations allowed for an increase in life expectancy. Logic and common sense tell us that we cannot disregard the arguments and conclusions of experts. What is more, since the Conservatives did not have specific objectives, we do not know whether the proposed measure to increase the age of eligibility for old age security from 65 to 67 meets the objectives. We do not know if these measures will really have the expected impact on old age security.

First and foremost, the objective was not clear. Second, the government has not provided any figures or studies to show how much money it will save. Will the amount saved be sufficient to make the old age security system sustainable? I get the impression that the Conservatives are just winging it. They are saying that cuts have to be made somewhere, and this is where they are going to be made. Why? We do not really know. It is truly ridiculous that the Conservatives are going to attack a program that places Canada among the countries that are best equipped to combat poverty among seniors. They are going to make cuts to this program without explaining why and without explaining what the impact will be.

In conclusion, the NDP feels that cuts to old age security are clearly not necessary and that a lot more could be done to improve the quality of life of seniors rather than reducing it.

[Robert Sopuck, Conservative, Dauphin—Swan River—Marquette, MB]

Madam Speaker, our intentions are very clear. Our intentions are to save Canada's pension plan for the foreseeable future.

It is interesting to hear my colleague opposite, and indeed the NDP. The common refrain is that there is always lots of money and that is all we spend. That is the NDP's solution to everything.

She talked about experts. Let me quote a real expert. David Dodge, the former Governor of the Bank of Canada, said this:

...we're at least 15 years late in getting started in raising that age of entitlement for CPP, OAS and the normal expectation as to how long people would work in the private sector with private-sector pension plans. That's absolutely clear, and because labour participation rates will start to fall later this decade, we're up against the wall.

This is not a partisan comment. This is not a Conservative pundit. This is the former Governor of the Bank of Canada—actually appointed by the previous government, I might add—who is saying we are actually late in moving on this issue and we need to do something now.

Would the member comment on the comments of the former Governor of the Bank of Canada?

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Madam Speaker, I am glad to hear that the Conservatives have finally quoted an expert to justify their cuts to old age security. Unfortunately, their chosen expert is a former governor of a bank, and I do not think that the opinion of that former governor holds much water in light of the calculations of the Government of Canada's chief actuary.

I am sorry, but if the Conservatives do not put any faith in the conclusions of the Government of Canada's non-partisan experts, then how long will it be before they get rid of those positions? Why not get rid of a few more while they are at it?

It is true that we will be dealing with an aging population, but the situation will be temporary. The government is not saying that since there will be more seniors, it will help and protect them; it is saying that since there will be more seniors, it will make cuts to the programs that help them escape poverty.

At any rate, cutting those kinds of programs will not save money because it has been shown that poverty affects the crime rate, people's living conditions and their health. The provinces are going to be forced to foot the bill. There is no evidence that raising the age of eligibility for old age security will really save any money.

It seems to me that there is a tidy sum of money set aside for old age security and that the government would like to get its hands on that cash and do something else with it.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Madam Speaker, I would like to say how much I appreciated the speech by my colleague and neighbour and how much I agree with her. Like her, I would like to respond to our colleague's question.

He, for once, quoted an expert.

Even though I am asking my question through the chair, I will look at the member.

I would ask the member through you, Madam Speaker, what she would say to this quote of the OECD about Canada's increasing the pension age:

There is no pressing financial or fiscal need to increase pension ages in the foreseeable future.

Is the OECD wrong or right?

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Madam Speaker, according to our colleagues' pretty simple math, perhaps the OECD study is wrong. However, even if the old age security program costs the government more for the next 20 years—that is a fact and we all agree on that—the government's studies and experts are saying that we can deal with this.

Yes, certainly, if the government reduces its revenues, it will have a hard time funding programs that are important to Canadians, but we must bear in mind that a budget is not an obligation; it is the government's choices.

Will the government choose to invest the money needed to ensure our seniors' quality of life or will it choose to invest elsewhere? That is the question people need to ask. There is no reason for the government to present these cuts as inevitable or as an obligation. That is false. Our program is sustainable. This is not merely an opinion. It is not a matter of common sense or simple math. This is what the experts are saying.

So, let us focus on that and ensure that our seniors will have a better quality of life, instead of doing something else with the money that belongs to them.

[Kellie Leitch, Conservative, Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour]

Madam Speaker, I am pleased to rise today to explain why the government will be opposing this motion. I am also pleased to say that I am very flattered that the opposition seems to be using my comment again and again. Obviously, repetition is something that is quite flattering, and I greatly appreciate it.

In budget 2012 our government indicated the changes that will be made to the old age security program to ensure the sustainability of the program for future generations. This morning our government tabled the jobs, growth and long-term prosperity act to implement various provisions of the budget. The legislative changes to the old age security program are contained in this bill.

It is my hope that by tabling the details of this legislation, we will be able to dispel much of the fearmongering that members opposite have chosen to wilfully bring forward. I note that they seem to be ignoring the realities of our aging population here in Canada.

Even after I and the Minister of Human Resources and Skills Development have risen dozens of times in this place and delivered the same answer, I still feel the need to reiterate that all those currently receiving OAS and GIS benefits will not lose a single cent because of these changes, no matter how often the opposition wants to fearmonger otherwise. People who are close to retirement—that is, people who are age 54 and over as of March 31 of this year—will not be affected by this policy change at all. We are providing Canadians with a lengthy period of notice in order to adjust their retirement savings plans. Sadly, we have witnessed attempts by the opposition to score cheap political points by fearmongering on both these points.

Our government is committed to ensuring the sustainability of the old age security program for future generations. These changes will ensure that the OAS remains strong and that it will be there for our children and grandchildren when they need it.

Before I go further, I will outline that these changes have nothing to do with the Canada pension plan, which is a separate program with a different form of financing. There is no sustainability issue for the CPP. It is fully funded for the next 75 years at current contribution rates. This fact has been confirmed by the Chief Actuary.

However, the same cannot be said for the old age security program. I am aware that our government has already explained why these changes are necessary many times over, but the current motion before the House indicates yet again why there is a need to reiterate these reasons. The opposition just does not seem to understand the reality of an aging population here in Canada.

Life expectancy for Canadians has gone up significantly over the last number of decades, and it is expected to continue rising. It is good news, of course, that Canadians are living longer, healthier lives. They enjoy one of the longest average life expectancies in the world, at around 81 years of age.

I am currently a pediatric orthopedic surgeon. As a medical professional, I am well aware of the many advances Canadians have made in making healthier life choices. However, with the increases in life expectancy, Canadians are collecting retirement benefits for a much longer time than when the OAS was first introduced. This has an impact in the ratio of workers who are paying for the benefits our seniors are collecting.

In 2010, 4.7 million people collected basic old age security. By 2030, the number of people collecting OAS will have nearly doubled to 9.3 million.

To put it bluntly, this means that a small number of working taxpayers will be supporting a larger number of OAS recipients. As a result, the cost of the OAS program is projected to rise dramatically, from approximately $38 billion now to $108 billion in 2030.

As members know, the baby boom generation—that is, people born between 1946 and 1964—is the largest cohort in Canadian history. Canada's wealth and economic productivity expanded enormously when baby boomers brought their values, knowledge, skills and energy into the workforce. They have contributed greatly to the development of our great country, but now, as these men and women are starting to retire in greater numbers, there are fewer and fewer younger workers to replace them.

In 1990 the ratio of working-age Canadians compared to the number of retired Canadians was roughly five to one. Today, the ratio has shrunk to four to one; in 2030, it will be two to one. The visualization and the realization are quite striking. There will be only two working people for each retired individual. This will be the first time that this has happened in the history of our country, and it will have a profound effect on the fiscal balance of our country. The fewer people we have in the workforce, the less productive our country is likely to be and the less tax revenue there will be to pay for government programs.

Canada is not alone in this demographic shift. Population aging is a worldwide phenomenon. According to the United Nations, in 2005 10% of the world's population was 65 years of age or older; by 2025, that proportion is expected to reach about 15%, or slightly more than one person in six.

If we look to our neighbours and counterparts in the industrialized world, we see that many have already started reforming their pension systems to take demographic changes into account. Twenty-two of the 34 OECD countries have recently increased, or announced plans to increase, the public pension age. These include the United Kingdom, Australia, France, Germany, the Netherlands, Italy, Japan, Denmark and many others. These countries are making changes to keep their retirement income system sustainable and ensure the financial security of their older citizens now and in the future. It is time for Canada to follow their example.

The OAS program cannot continue in its present form indefinitely. It is becoming unaffordable and needs to reflect demographic shifts. That is why we are taking action now to give Canadians certainty to plan for the implementation of these changes in the future.

If we had refused to acknowledge these realities and had simply sat back and done nothing, the OAS program would be unsustainable. OAS is the largest single program of the Government of Canada, and it is funded 100% by annual tax revenue. Let me be clear on this point: the benefits that were paid this year to our deserving seniors came exclusively from the taxes that were collected this year. This is why the ratio of workers to retirees is critical to the understanding of why we have to act now to ensure the sustainability of this program. Today we spend 13¢ of every federal tax dollar on old age security; if we do not make changes now, in about 20 years that share will grow to spending 21¢ of every federal tax dollar on this program.

If we do not make these changes to the OAS program, there are only two alternatives for dealing with this cost: raising taxes or diverting funds from other government programs and services. We know that the tax-and-spend coalition across the aisle has no problem raising taxes. Whether it is a job-killing carbon tax or increases to the GST, the opposition has not met a tax it does not like. However, considering the decreased ratio of workers who would have to shoulder the increased costs of government services, raising taxes would critically damage Canadian business competitiveness and the Canadian economy.

As an MP, I represent an Ontario riding, and my constituents know far too well the record of the leader of the Liberal Party and his track record of damaging a fragile and struggling economy by increasing taxes. This is simply not a reasonable solution, and it would cause far too much harm to the Canadian economy. As we have consistently stated in previous campaigns, the Speech from the Throne, and the most recent budget 2012, we remain committed to our low-tax plan for jobs and economic growth.

Diverting funds from other programs and services is obviously not an option. To pay for the increases in OAS, the government would be forced to take funds that are currently being used to support deserving Canadians requiring assistance from the government.

We have seen over-the-top reactions from the opposition benches as the government moves to find efficiencies for our latest rounds of deficit reduction reviews. They simply cannot have it both ways. We are talking about an 8% increase in the total cost of government spending. We are convinced that the only way, and the only just way, to relieve the cost pressures on OAS is to raise the age of eligibility. This would ensure that the OAS will still be there for our children and grandchildren by the time they reach retirement.

The proposed changes will happen with a lengthy notice period and will be phased in over several years. We will gradually raise the age of eligibility from 65 to 67. These changes will not affect people who are currently receiving OAS benefits. They will continue to receive them as they did before.

The operative word here is “gradual”. Nothing is happening overnight. In fact, the transition will only start on April 1, 2023, which is 11 years from now. Once the transition begins, it will take six years to complete. To put it another way, the process will take 17 years, until 2029. This is a longer implementation period than most OECD countries will provide when increasing the eligibility age of their public pensions.

Let me be very clear on this. Everyone will have more than a decade before the changes start to set in, and it will be close to two decades before they are fully implemented. There is ample time for all Canadians to adapt their retirement plans.

Anyone 54 years of age as of March 31, 2012, in other words those born before or on March 31, 1958, will still be entitled to OAS and GIS at age 65.

The ages at which the OAS allowance for low income spouses and the OAS allowance for the survivors are provided remain the same for anyone who is 49 years of age or older as of March 31, 2012. They will continue to be eligible between the ages of 60 and 64.

I know this is reassuring news to older Canadians after all the fearmongering that has happened from our opposition colleagues. I want to reassure Canadians that current seniors' benefits are not being affected.

For younger people, there is plenty of time to prepare for these changes and adapt their retirement plans. Canadians born between April 1, 1958 and January 31, 1962 will be eligible to receive their OAS benefits and the GIS between the ages of 65 and 67, depending on the month in which they were born. The details of the transition will be outlined in the budget and are also reflected in the budget implementation bill which was tabled this morning.

Canadians born on or after February 1, 1962 will be eligible to receive OAS benefits at the age of 67. For the allowances, the range of eligibility will shift from between 60 to 64, gradually increasing to 62 to 66 for people born between April 1, 1963 and January 31, 1967, depending on their birthday. In other words, the age of eligibility will be 62 for the allowance and the allowance for the survivor for people born on or after February 1, 1967.

Certain federal programs that are currently providing income benefits until age 65 will be changed in tandem with the OAS program so that there is no sudden gap in income for recipients 65 and 66 years of age. These programs include those provided by Veterans Affairs Canada and Aboriginal Affairs and Northern Development Canada.

Also, the Government of Canada will compensate provinces and territories for net additional costs they face resulting from the increase in the age of eligibility for OAS. Again, for Canadians who are 54 years of age or over as of March 31, 2012, they will still be eligible for the OAS pension and the GIS at age 65. If they want to stay in the workforce past 65, they will be able to defer their OAS benefit and receive a higher actuarially adjusted pension up to five years later. I will speak to this in a moment.

In addition to gradually increasing the age of eligibility, we are making two other changes to OAS we believe will benefit Canadians. The first is proactive enrolment. Right now all seniors have to formally apply for the old age security and guaranteed income supplement benefits. Between 2013 and 2016, we will begin proactively enrolling Canadians into the OAS program, eliminating the need for seniors to apply. This will reduce the government's administrative burden, but more important, it will ensure that more seniors have access to the benefits they deserve.

We are making changes to the OAS in the near future, changes which I think Canadians will appreciate. We will be providing Canadians the flexibility as to when they will be able to start receiving the OAS pension. Canadians turning 65 on July 1, 2013 will have the option to defer their OAS benefits for up to five years. People who defer receiving their OAS benefits to a later time will subsequently receive a higher actuarially adjusted monthly pension for the rest of their lives.

This change will give people more flexibility and choice when planning for their retirement, especially when they want to continue working past the age of 65.

It is no secret that Canadian seniors are choosing to stay in the workforce longer. This is a great time for the Canadian economy. More than ever, we need to be able to tap into their energy and continue to benefit from the knowledge and skills they acquired over a lifelong period in the economy.

The flexibility of deferring the OAS pension will make it worthwhile for many Canadians to stay on the job. I want to emphasize that pension deferral will be an option, not an obligation. I would also like to point that people who defer their pension will, on average, receive the same total OAS pension over their lifetime as those who do not defer their benefits.

Never in the history of our country have so many people lived such long and fulfilling lives. This is something to celebrate. However, an aging population is also creating new challenges that we have to face realistically.

When the OAS was introduced, Canadians could expect to live only a few years after retirement. Now many can look forward to two or more decades. Over the next 20 years, the number of Canadians over the age of 65 will jump from 4.7 million to 9.3 million. This is a staggering increase in a relatively short period and it comes with a high price tag. The annual cost of OAS will increase, in fact triple, between 2010 and 2030 from $36 billion to $108 billion.

At the same time as our seniors population is rising, the ratio of workers to retirees will be falling. Unlike the Canada pension plan, the OAS is financed entirely from tax revenues from workers paying that year. Currently, one in seven Canadians is over age 65. By 2030, less than 20 years from now, the ratio will change to two to one. Fewer people working means less revenue and higher costs.

We owe a lot to our seniors. They built our country and they deserve security and dignity in retirement. Our government is determined to take on this responsibility in a fair and prudent fashion to ensure that the OAS system remains sustainable. It is the responsibility of the federal government to think of the future and act in the long-term interests of Canadians. Sadly, the opposition has refused to acknowledge the realities of this aging population. Private sector economists, financial institutions and former Bank of Canada governors have confirmed that we must act now to ensure OAS is sustainable in the long term.

Unfortunately, the opposition parties have chosen the low road. Their baseless fearmongering and ignorance of the need for change do not serve the interests of Canadians. We will not follow the opposition's approach of sticking our heads in the sand and pretending we are oblivious to a coming challenge.

I ask all members in the House to consider our duty to our constituents, to our great country and to our current and future retirees, to rise above our partisanship and to reflect on the actions that need to be taken to ensure fiscal sustainability of a cherished social program. As such, I ask all members of this House to reject the opposition motion and support the actions that our government is taking for the long-term sustainability of OAS for future generations of Canadians.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Madam Speaker, I would like to point out that this government is making another harmful, arbitrary and unilateral decision that will penalize our seniors, especially our most vulnerable seniors.

The member across the floor talked about myths. I think she is completely mistaken and that this Conservative government is perpetuating its own myth. I recently met with some people in my constituency who are very worried about this plan to raise the retirement age and who clearly see—this is no myth for them, but a reality—that they will not be able to find new jobs in the labour market.

How does the member's government plan to address this kind of problem?

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Madam Speaker, let us be very clear. There will be no reduction in current seniors' pensions.

As I have mentioned several times in this House, in order to ensure there is old age security for future generations of Canadian retirees, these changes need to be made now. The shift in demographics of the number of individuals that will be retired and eligible for OAS will jump substantially from 4.7 million to over 9.3 million over the next 20 years. We need to take action to ensure that this cherished social program is available to future generations of Canadians.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Madam Speaker, our colleague started by complaining that she always has to repeat the same things. Therefore, I invite her to say something else and answer a very simple question.

The report of the OECD said, taking into account all the aging trends she mentioned, that because of the sustainability of our program today, it will remain sustainable in the future. The OECD concluded that there is no pressing financial or fiscal need to increase pension ages in the foreseeable future. By the way, the Chief Actuary and the Parliamentary Budget Officer said that the increase in the OAS will be only one percentage point of our economy in the next 20 years and after that it will go down.

As she does not want to repeat the same thing over and over, what is her answer with respect to these numbers?

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Madam Speaker, our OECD colleagues have all stepped forward and made these changes already. We are following suit to make sure that future generations of retirees in this country have a program that Canadians cherish. Seniors built this country. Young individuals now are doing exactly the same thing. We want to make sure that future generations of Canadians are able to receive OAS. That is why we are going to gradually implement, from 2023 to 2029, a program that Canadians will cherish, very similar to the substantive changes that many of our OECD colleagues have made to their retirement programs.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Madam Speaker, I want to thank my colleague for a very informative speech which set out what we are actually doing.

Members on the other side take a very short-term view. They cannot look forward a few years, let alone 15 years. In this case, we are way behind. We should have done this previously. In fact, David Dodge, the former governor of the Bank of Canada said:

[W]e’re at least 15 years late in getting started in raising that age of entitlement for CPP, OAS and the normal expectation as to how long people would work in the private sector with private-sector pension plans. That’s absolutely clear, and because labour participation rates will start to fall later this decade, we’re up against the wall.

It is clear that it is time for action. The point we continually have to make is that we are not removing benefits for today's seniors. This will not be implemented until 2023 and it will not be fully implemented until 2029, 17 years from now.

Is 17 years an adequate warning for people to adjust their retirement plans?

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Madam Speaker, in my riding of Simcoe—Grey there are a lot of young families, people such as Pam Irwin and her husband, Larry, and Stan Voutier from Wasaga Beach. These young people are concerned that old age security will not be there at all for them. They are delighted that they are being given an opportunity to make sure that a cherished social program in this country will be available for them. They know they have a long adjustment period to make sure they save for retirement. This will not begin until 2023 and will not be fully implemented until 2029. These are young people in their thirties and forties who are delighted that this government is taking action now to make sure that they, as future retirees, will be protected.