Mr. Speaker, I am pleased to participate in the debate and discussion on Bill C-490.
Bill C-490 provides for an increase in the amount of supplement to be paid monthly to a pensioner and for the payment of a pension and supplement to a person who ceases to have a spouse or common law partner by reason of the spouse's or common law partner's death. It removes a requirement to make an application for a supplement and allows for the retroactive payment of supplements.
I tend to support the idea of removing the requirement to make an application or to at least have some less bureaucratic way of ensuring that seniors are getting the benefits to which they are entitled. Some seniors get distressed in these cases or may not be fully conversant with the law. I know that ignorance of the law is no excuse, but we need to provide all the support and assistance we can to seniors to make sure they receive the pension benefits to which they are entitled.
Perhaps a process could be put in place to facilitate that, but I have a large problem with seniors who have not taken advantage of their benefits because they did not know they had to fill out an application. I see some of those seniors in my office from time to time.
I am not quite sure about the retroactivity provisions that are called for by the bill. That could be a bit difficult, but nonetheless I want to congratulate the member for opening up this discussion, because Canada's seniors have made an enormous contribution to the social, cultural and economic fabric of Canada.
As a result of their efforts, Canada is considered one of the best countries in the world in which to live. Our generation is receiving the benefit of their efforts and generations beyond us will benefit in the future.
In spite of this contribution, many low income and middle income seniors in Canada living on fixed incomes are financially stressed. Old age security payments and the guaranteed income supplement have not kept pace with the living costs seniors are facing today, notwithstanding regular inflation adjustments and increases that our Liberal government put in place through the GIS and, in fairness, that the Conservative government has put in place as well.
I have heard the arguments from the other side, and I think research would tend to show that on balance seniors in Canada do quite well, but it is equivalent to the summation that if we have our heads in the fridge and our feet in the fire, our average temperature is fine.
We still have some low income seniors who are struggling. Certainly in my riding, which we could characterize as a blue collar riding and where the mean family income is below the national average, many seniors who come to me, especially those on fixed incomes, especially women and especially widows, say that they are really having difficulty keeping pace with the costs they are facing.
This is a problem. It caused to me do some research into the question of whether it would be feasible to set up a cost of living index that was particularly unique to the basket of goods and services with which seniors in Canada are faced. I did some independent research and there also is some research already out there.
For example, a 2002 McMaster University study in the “Quantitative Studies in Economics and Population Research Report”, showed that in explaining the changes in expenditure patterns after the age of 65, most of the major differences that are observed among age groups are a consequence of declines in income after retirement.
At the national level, the study found that while the all-items CPI did generally track closely to the inflation experienced by seniors, there were some notable variances in food and shelter expenses. These are the two items that are frequently brought up to me by seniors, who say they are spending far too great a percentage of income on food and shelter.
The rule of thumb with respect to shelter is that no more than 30% of a person's income should go toward it. Many seniors in my riding, in fact constituents of all ages, are spending 40% to 50% of their income on shelter.
According to the Department of Social Development, the last evaluation of old age security was completed in 1992. As reported by the Auditor General of Canada, the 1992 evaluation report concluded that, in terms of adequacy and earnings replacement, the program was “generally” fulfilling its role within the retirement income system.
However, research conducted by myself concluded that the old age security has consistently lagged behind wages during the period from 1991 to 2003.
The 2004 report of the Prime Minister's task force on active living and dignity for seniors, chaired by my colleague and soon to be member of Parliament again, Tony Ianno, states that:
Generally speaking, Canada has seen a trend where growth in wages has exceeded growth in prices.
Old age security recipients' benefits fall behind the rate of growth seen by the working age population.
A Library of Parliament research report prepared in February 2006, at my request, noted that no effort has been made to establish a consumer price index targeting seniors. Further, independent comparative analyses that I have completed have concluded that cost pressures on seniors have risen at a much higher rate than current old age security inflation adjustments.
While I laud the member for putting forward this private member's bill, it would appear that it probably will not have the support of the government, primarily for reasons of cost, which is not the right criteria necessarily, unless it would bankrupt the government and put the old age security into a non-sustainable position.
Creating a cost of living index specific to seniors would not be that difficult to implement. It would weigh the cost of products and services to which seniors are exposed and it would be updated annually. It would be that cost of living index that would be used to increase the old age security and the GIS annually, rather than this generalized cost of living index, which represents the population as a whole, the basket of goods and services to which Canadians generally are exposed, but does not really reflect the basket of goods and services that our seniors are faced with, seniors who built this country and deserve our respect and our support.
I recall meeting a senior widow in my riding and her family who are the salt of the earth. Her husband had worked in construction for 50 years and, regrettably, passed on. She lives in their small bungalow and raised a family of three. They are all doing well and contributing to society. She was struggling severely. What a tragedy for that woman, who lost her a husband and raised a family, all of whom had contributed and are contributing so much to Canada, was being pressured to move from her small, modest home to something not really appropriate.
While the bill before us is a step in the right direction, and I appreciate its intent, we could do something more significant and more achievable for seniors by creating a cost of living index that would reflect the cost of the goods and services that they face. The index would then be used to increase the old age security and the GIS annually, instead of this generalized cost of living index.