Gerry Byrne

[Points of Order, November 26th, 2010]

Mr. Speaker, as I indicated during the course of question period, I will be seeking unanimous consent to table documents that are in direct reference to the government's recent decision to amend the OAS regulations to exclude RRIF funds from an optional exercise of the calculation for purposes of the guaranteed income supplement.

Specifically I would like to table five items.

One is a recent letter that I referred to during question period, from the Minister of Human Resources and Skills Development to a constituent of mine. This letter indicates that she understood the program, accepted the program and defended the program. It is the same program that she now says she knows nothing about.

The second item is on the regulations, the actual revisions to the functional guidance given to members of Service Canada in revising the program. This is dated May 17, 2010. These are the functional guidance orders that the minister authorized to amend the program that she says she knows nothing about.

The third item is a court case, which the minister refers to in her letters to my constituent. One is the case of Ellen Ward, made January 11, 2008 by Justice Hershfield. When we talk about whether or not the minister was aware of this, I will read the following for the relevance of members so that they understand whether to accept that or not:

[I]t may be necessary for the appropriate policy and legislative department of government to revisit the subject provision with a view to ensuring that it operates in a manner that reflects the policies of government in an intelligible way and in a way that does not discriminate against one group of retired persons...[versus] another

These are all relevant documents that I am sure hon. members will want to have tabled in the House.

[Pensions, November 26th, 2010]

Mr. Speaker, seniors deserve a pension system they can trust, not another double-cross like income trusts.

The Conservatives did it all right. They did it to seniors. They did it in the Senate when it came to Nortel pensioners.

How can the Conservatives look at 1.5 million senior citizens at a time when we are moving more and more into seniors' poverty, 25% more. What are the Conservatives going to do? They are going to do a review. They stuck it to 1.5 million pensioners in this country and all they are going to do is review it. They must act immediately to change the OAS Act.

[Pensions, November 26th, 2010]

Mr. Speaker, review is not reversal. There has been no notice, no consultation, no information and no compassion. The minister now says that it is brand new information. Allow me to table letters the minister signed to senior citizens across Canada informing them of this policy just recently. Now she says that she will review it.

Well, 1.5 million lower income Canadians have just been told that all is on the table when it comes to pension income.

Will the minister, or at least her cabinet colleagues, not just review this policy but reverse it and table changes to the Old Age Security Act to prevent it from ever happening again?

[Pensions, November 26th, 2010]

Mr. Speaker, we have uncovered a Conservative directive that will drastically cut pension incomes for up to 1.5 million lower income Canadian seniors. Effective May 17, 2010, seniors who make an emergency withdrawal from a registered retirement income fund, as they try to cope with unexpected emergencies such as medical costs and urgent home repair, will lose government pension benefits as a result.

Will the minister now confirm to the House that this is indeed her new and, up until now, secret pension policy for seniors, and, if they have not done so already, will her cabinet colleagues force her to rescind the policy?

[Pensions, November 25th, 2010]

Mr. Speaker, Canadians are genuinely concerned about their future well-being in retirement. They are undeniably nervous and anxious about whether they will ever be able to amass the necessary resources to live in reasonable comfort. They wonder whether the tools and safeguards for generating those resources are stable enough to ensure that these needs are met.

However, instead of acting to relieve Canadians of these concerns, the Conservatives are acting to worsen that anxiety.

On May 17 of this year, the Conservatives secretly changed the rules and the benefits of RRSPs and registered retirement income funds. As of that day in May, all Canadians who withdraw a lump sum from their RRIF will likely lose their eligibility to the guaranteed income supplement for up to two years.

As it stands now, if a senior citizen with modest means needs to make an emergency withdrawal from his or her RRIF to pay for an unforeseen medical expense, an emergency home repair or any other necessity, he or she will lose the GIS in return. If that is not bad enough, the senior will not necessarily learn of the consequence until the year after because GIS eligibility--

[Pensions, November 23rd, 2010]

Mr. Chair, I encourage the hon. members opposite to stick around. They will learn something here tonight. This will be my seventh try at getting some bits of information into these guys heads, so here goes.

Canada introduced registered retirement savings plans in 1957 and, ever since then, we have been encouraging Canadians to try to invest in registered retirement savings plans for their own retirement. We told our seniors of today, when they were making these investments yesterday, that this was an investment that the government would never mess with. We promised tax savings and other advantages to those who proactively plan for their own retirement by investing in RRSPs.

In May, however, that message fundamentally changed when the government secretly, without any notice, implemented changes to the old age security and guaranteed income supplement programs by the policies guiding each respectively, by way of what is known as functional guidance and procedures amendments to staff.

Whenever staff were dealing with registered retirement income funds for the purposes of guaranteed income supplement, allowance for the spouse and allowance for the widow or widower, the Conservative government's orders were that Human Resources and Skills Development Canada staff were to include the withdrawals of RRIF income when calculating GIS eligibility. In other words, the Conservatives were either knowingly or negligently wiping out tens of thousands of dollars in benefits formerly available under the rules as they applied to RRSPs and RRIFs.

In so doing, Human Resources and Skills Development Canada staff did not even bother to inform seniors before these changes were made, and to this day, even in the debate in the House tonight, they are still denying they did it. Specifically, the changes to the old age security and guaranteed income supplement programs policy no longer allow for the discretionary or emergency spending of these investments by way of lump sum withdrawals from RRSPs or RRIFs without consequence to eligibility for the GIS.

Let me take a moment to explain this so the government gets it and understands what it did.

When a person has invested in an RRSP, at the age of 72 he or she must convert those funds into an RRIF. Under the rules of calculating whether or not a citizen is eligible for the guaranteed income supplement, which is income-tested, they take all the money that they made from various pension sources, not including OAS, old age security. What they did is they took those rules and said, “Listen, we never used to calculate”. When someone took a lump sum from the RRIF to pay for cancer treatment or medical costs related to a heart condition, or if they needed to make an emergency investment in a car to be able to care for a fellow family member, they could option that money out. In other words, they could ask the government, when it was making the calculation of the GIS, to take that RRIF lump sum withdrawal that they made and, because it was a one-time-only withdrawal, to calculate their eligibility for the GIS as if they never made it.

For years and years, the government allowed that to occur, but in May it said, “We are not going to do that anymore. If people make a lump sum withdrawal from their RRIF, they are now going to lose their GIS”.

Here is what that means. In a court case, if the government is taking any comfort from a court case, here is what a judge said:

I do not wish to leave this matter, however, without expressing the hope that the government might give consideration to proposing an amendment to the Act that would give some relief to persons in the Appellant's position. There are occasions when recipients of the guaranteed income supplement find it necessary to withdraw funds from a registered plan to meet an urgent need for cash—

[Pensions, November 23rd, 2010]

Mr. Chair, the member spoke of the importance of the integrity of a third tier of the retirement income system in Canada, which is the self-directed, self-contributed registered retirement savings plan.

The Conservative member emphasized how essential that tier, that key plank was to the overall security of the retirement income system in our country and basically implied to Canadians, through the House, that messing with that was a mistake. Yet the government messed with it.

The government messed with it in May 2010 through a functional and guidance order to staff when dealing with applications for the guaranteed income supplement. It changed the rules. It fundamentally changed the message to Canadians about the safety and security of their investments, which they thought they were making when they were in their working lives and which have now changed now that they are in their retiring lives.

I want to hear from the member, not whether the government is reviewing the situation and not whether it is assessing the situation. The government made a decision in May 2010 to eliminate tens of thousands of dollars in value from RRSP and RRIF contributions by amending the orders for RRIFs and it did so without any thought or even giving one word of advice or information to seniors—

[Pensions, November 23rd, 2010]

Mr. Chair, the hon. member said that her government has acted and is prepared to act for seniors.

I have a very simple, straightforward question. Over the course of this evening, I have raised the serious state facing senior citizens as a result of the change the government implemented in May 2010 to amend, by order of Human Resources and Skills Development Canada, the way the government handles voluntary withdrawals that senior citizens may make from registered retirement income funds, RRIFs, with respect to the way those withdrawals affect eligibility for the guaranteed income supplement.

I have explained in detail during the course of this evening how the government's decision will cost seniors tens of thousands of dollars as a result of that policy change. I have asked if the government would amend the policy to bring it back to the way it was prior to May 2010.

Will the hon. member commit on behalf of her government that it will see the error in its ways and bring the policy back to the way it was so that senior citizens do not lose their GIS if they have a medical catastrophe and need to make a voluntary withdrawal of their RRIF? Before, senior citizens could simply option that money but they no longer have that option. They will lose their GIS. That is not treating seniors fairly.

[Pensions, November 23rd, 2010]

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?

[Pensions, November 23rd, 2010]

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—