Madam Speaker, I am proud to be here to speak in favour of Bill C-38. As I do, I reflect on much of the debate that has gone on, not just tonight, but the constant hours and hours of debate that have gone on in the finance committee. The amount of time that has been allocated to the bill and is still yet to come is unprecedented.
I find as I listen to colleagues opposite, while I have great regard for them, I hear more questions about the process than I do about actual questions about the budget. Therefore, it strikes me that while at one point there is a lot of broad talk about the importance of being able to ensure that we spend more time talking about the budget, it feels more like talking about talking. That is the concern I have.
Members in the House have heard me say in the past a great comment that my Cape Breton mom used to say, “After it's all said and done, there's a lot more said than done”. I really feel in some respects that this is what we have as this circle goes around and around.
In my city of London, in my riding of London West, people are concerned about their families and the economy. I get comments about how the Conservatives have handled that relatively well in the worst recession in all of our lifetimes, not just in the House, but Canadians throughout the country. We weathered that with high marks. We have created some 750,000 jobs, most of them full-time since that time as well. That is positive. We have the strongest financial institutions in the world. We are the envy of the G20 countries.
It would be great if I could ask members opposite to come forward and say that they are proud of this as well because there are some things that we do that we can take pride in as a country. We have those opportunities. There are rare times when members come together in solidarity and say “This is something that matters to us”. We respect the importance of Canadian workers, the people who are trying to do the best they can for their families.
There is a greater optimism now than there has been in some time. There are a lot of countries in the world, tragically, that we are glad we are not there because their tragedy and their stories are very suspect. I think their futures are much more bleak than Canada. I have great optimism for Canada, so I would invite members opposite to share some of that optimism.
I have some formal comments I would like to make because I think that is all part of this process as we try to get into some of the specifics of it.
The bill in front of us, Bill C-38, the jobs, growth and long-term prosperity act, is intended to bring into force significant measures that we have introduced to ensure the long-term strength and sustainability of Canada's economy and its finances. Despite what others would say, these are measures that are decisive, effective and above all, fair.
It is said that if one wants to anticipate how one acts in the future, then look how they have acted in the past. I am exceptionally pleased and proud of how the government has respected our seniors. One just has to look at some of the incredibly positive benefits the government has provided seniors since coming to government, all to make the point that there is no greater respect than honouring those who have built our country and given us the many opportunities that all of us enjoy today.
I am honoured that our government introduced, then doubled the pension income credits for seniors to $2,000. The most dramatic benefit for married seniors has come in the form of pension income splitting, allowing Canadian seniors who receive qualifying pension income to allocate to their spouse, or common law partner with whom they reside, up to one-half of that income. That is phenomenal.
The government increased the age limit for converting RRSPs to RIFs. The tax-free savings account, or TFSA, is one of the most tax-effective and novel ways for seniors, in fact for all Canadians, to benefit. Canadians currently benefit from a retirement income system that is recognized around the world as a model that succeeds in helping Canadian seniors and we want to keep it that way for future generations.
That is why this bill, the jobs, growth and long-term prosperity act, would ensure that it remains that way now and, frankly, for generations to come. We took action in this regard because quite simply, the old age security program was designed for a different time.
Let me give some background. Most members of the House will realize this and some will have to read it in the history books because they are a little younger than others. However, we have very bright young members who would get this. In the 1970s there were seven workers for every one person over the age of 65. In 20 years, there will only be two.
In 1970, life expectancy was age 69 for men and age 76 for women. Today, it is age 79 for men and age 83 for women. At the same time, Canada's birth rate is falling.
The good news about these statistics, though, is that Canadians are living longer and healthier lives, but there are fewer workers to take their place when they retire.
Here is the reality: Canada has changed. Therefore, old age security must change with it if it is to serve the purpose for which it was intended while remaining sustainable and reflecting evolving demographic realities.
If we were to remain complacent in the face of these developments, it would be financially unsupportable in the long term. The cost of the OAS program is scheduled to rise from $38 billion in 2011 to $108 billion in 2030. Clearly that is not sustainable, and not acting for Canadian taxpayers who expect this benefit when they retire would be economically irresponsible. In a caring country committed to its people, the government has an obligation to balance care and cost.
It is important for members of this House to realize that the OAS program is already the single largest program of the Government of Canada.
A recent National Post editorial stated:
Unlike the CPP, OAS is funded out of general government revenues, and will eat up more and more tax dollars as Baby Boomers enter their senior years.... That is not something that we can afford to ignore.
I would just challenge members. If they have never read the book Boom, Bust & Echo, which talks about the demographic reality, the changes that are coming through, such that the baby boomer generation is the one that is going to create the greatest demands on our social system, I would encourage them to read it just to give them some of the background. I think it would help all of us to understand better.
With the passage of Canada's jobs, growth and long-term prosperity act, the age of eligibility for OAS and the GIS would be gradually increased from the age of 65 to the age of 67, starting in April 2023, with full implementation by January 2029. It is intended in that way to give the gentlest implementation and give a lot of advance notice for people to be able to plan and prepare. This change would not affect anyone who is 54 years of age older as of March 21, 2012. I feel it is a responsible and measured approach for taxpayers, particularly with those who have an expectation of these benefits and who expect and deserve no less.
To improve flexibility and choice for those wishing to work longer, our government will also allow for the voluntary deferral of the OAS for up to five years, starting July 1, 2013. This would provide the option for people to defer take-up on the OAS to a later time and receive a higher annual actuarially-adjusted pension as a result. The adjusted pension would be calculated on an actuarially neutral basis, as is done with the Canada pension plan.
This would mean that on average, individuals would receive the same lifetime OAS, whether they choose to take it up at the earliest stage of eligibility or defer it to a later year. The annual pension would be higher if they choose to defer. GIS benefits, which provide additional support to the lowest-income seniors, will not be eligible for actuarial adjustment.
These sorts of changes are in keeping with international best practices, as many OECD member countries have recently planned or are announcing increases to the eligibility ages for their public pensions and social security programs, including—and this is a long list—Australia, Austria, Belgium, the Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Japan, Korea, the Netherlands, the Slovak Republic, Slovenia, Spain, Turkey, the United Kingdom and the United States.
However, these are not the only areas where Bill C-38 would implement improvements to OAS.
The bill would also improve the way we administer OAS for Canada's seniors, while at the same time generating operational savings. The act would do so by putting in place a proactive enrolment regime that would eliminate the need for many seniors to apply for OAS and GIS. This measure would reduce the burden on seniors of completing application processes and it would reduce the government's administrative costs. What a boon that is going to be to seniors.
With the passage Bill C-38, proactive enrolment will be implemented under a phased-in approach from 2013 to 2016.
It is interesting that Gordon Pape, the noted financial columnist, also applauded this move, calling it:
...a welcome elimination of bureaucratic red tape that should have the effect of putting a lot more money into the hands of seniors....This means that many people will no longer have to apply for benefits when they turn 65 – the payments will come automatically. The potential gain for seniors is huge.
The federal government's task force on financial literacy reported that an estimated 160,000 seniors who qualify for old age security are not receiving benefits because they have not submitted a formal application. The loss in pre-tax income to these people is almost $1 billion.
However, the changes that simplify—