Mr. Speaker, I am sharing my time today with my colleague from Nanaimo—Cowichan.
Last June, the NDP member for Hamilton Mountain introduced a seniors charter of rights. We are very proud and we want to congratulate her for that work. That charter of rights was supported by the government. The charter was passed by a vote of 231 to 52. It was a landslide.
One of the rights outlined in that charter is the right of all seniors to income security. Yet, despite Parliament's clear message, this is the first legislative initiative that the Conservatives have introduced to enact any of the rights that the seniors charter guarantees. Unfortunately, Bill C-36 does not even deal with the real causes of poverty among Canadian seniors.
To date, the Conservatives have been disinclined to help seniors living in poverty. Of the few attempts that even come close to addressing the income of seniors, the two trumpeted most are the increase of $2,000 in the pension tax credit and pension income splitting. But who benefits from that tax credit or income splitting? Not a single senior whose only income is CPP, OAS and GIS. The tax credit applies only to private pensions, so the seniors who need the money most receive no help from their government, none at all.
Currently about 130,000 eligible seniors receive GIS, the guaranteed income supplement. About 80% of those missing out are women, mostly women who are very elderly. In addition, there are also about 55,000 seniors who are missing out on CPP retirement benefits.
Interestingly, there are virtually no eligible seniors without QPP. That is because officials in Quebec identify those eligible seniors and ensure they apply for their benefits.
If a senior realizes that he or she qualifies, the current legislation for OAS, GIS and CPP provides only 11 months of retroactive payments unless governments provided erroneous advice or there was an administrative error. Years of income may be lost.
To add insult to injury, Ottawa does not pay interest on the retroactive CPP payments, even when those cheques are for lost benefits due to administrative error. Again, in Quebec, QPP pays retroactive benefits for up to five years, including interest.
There is also precedent in the rest of Canada, where long periods of retroactivity are allowed for other programs. Income tax returns can be re-filed for several years to make claims that have been missed. As well, GST credits are paid retroactively for more than 11 months.
Why are seniors penalized more than others?
About 38% of seniors receive GIS. The majority of seniors who retire without an employer pension plan receive GIS. RRSPs can be a terrible investment for many Canadians who do not have a pension plan, but for those seniors on GIS, their income includes earnings, RRSP withdrawals and CPP benefits, which can result in an effective tax rate of 50% to 100%. I repeat: 50% to 100%. This occurs because GIS is reduced by 50¢ for every dollar in income, including RRSP withdrawals, and that income is still taxable.
The structure of the current clawbacks for GIS makes it virtually impossible for GIS recipients to enjoy the benefits of any RRSP savings they make. Most of the funds will be clawed back in the form of GIS reductions and income tax.
Similarly, if a senior is employed, this will also lead to a GIS clawback as the money will still be subject to income tax and payroll taxes. Thus, under the current regulations, employment is unlikely to improve the standard of living of the poorest seniors.
Those dependent on OAS and GIS are condemned to live below the poverty line. In 2004 about one-third of seniors, mostly single women, were dependent on OAS and GIS for an average income of about $12,400. The Statistics Canada low income cut-off is approximately $17,000.
The particular impact on women was outlined in the Ottawa Citizen just last month. The paper stated:
Many elderly Canadians, especially women, are losing thousands of dollars in income because the federal government bars them from collecting all the Canada Pension Plan benefits they have earned....[T]he government should be doing more to reach out to seniors who are eligible for benefits, but who, for reasons ranging from ill health to illiteracy, might not realize it or have the wherewithal to apply. Women are hardest hit because officials often assume that elderly women were stay-at-home wives and mothers, and therefore do not check to see whether they are eligible for Canada Pension Plan benefits when they are applying for old age pension or the guaranteed income supplement.
I would like to note that in particular, unattached senior women remain very vulnerable. They make up 60% of seniors living below the poverty line. In 2003, according to a Government of Canada report, 154,000 unattached senior women lived in poverty. Let me repeat that, 154,000 senior women lived in poverty.
The GIS, which is supposed to help, forces many seniors, especially those who are unattached, into poverty. I want to emphasize again that a single senior receiving OAS and GIS is forced to live on about $1,000 per month. That is just not acceptable. One thousand dollars a month simply does not do it.
There are many reasons why senior women end up living in poverty or near poverty. Women's unpaid work makes their risk of poverty higher and results in less access to private pensions. Senior women receive smaller pension incomes because of the wage difference between men and women. Most divorced women do not claim a portion of their former spouse's pension, even though they are entitled to it.
Immigrant women are particularly vulnerable. Many over the age of 65 who have lived in Canada for less than 10 years are without any income at all. Approximately 65% of GIS beneficiaries are women. Women are concentrated in low wage and part time jobs where there is rarely a pension available. Because many retirement plans do not compensate for absences to raise children or look after sick relatives, women are left out once again. It is usually women who do the caregiving.
The ratio of male to female earnings tells a story of persistent systemic inequality between male and female incomes whether from employment or pensions. The first step to ending the poverty cycle for senior women and men is ensuring access to safe, affordable and accessible housing. If a person spends the majority of his or her income on his or her place of residence, this leaves little money for food, medication and other necessities, thus forcing many into the poverty cycle.
In 2001 more than half of seniors living on their own in rental accommodations were paying more than 30% of their income on housing. In particular, single women were more likely to be living in substandard conditions because of those low incomes. If housing costs are tied to one's income level and not to market value, then and only then does one have a chance to break out of poverty and live in dignity.
The cost of housing across Canada is on the rise. Last year housing costs were up 13%. With no new affordable housing money in the foreseeable future, many Canadians, especially senior Canadians, run the risk of becoming house poor. I hear from my constituents in London—Fanshawe about this very dilemma all the time. Many of them are energy poor because of the increase in the cost of utilities. When housing costs are higher than 30% of a person's income, the person is indeed condemned to live a life below the poverty level.
Over four million seniors rely on the OAS, GIS and CPP for their income. While past changes and increases in payment amounts have helped to alleviate some of the poverty faced by these seniors, there are still too many falling between the cracks.
Bill C-36 was an excellent opportunity for the government to fix many of the mistakes left over by the Liberals, but it fails to do so. If we want to do more than just pay lip service to the rights of seniors, we need to enshrine the seniors' charter. We need to explore all possible means of creating better income security for those who built our country.
There is great potential in Bill C-36. I hope all parties will come together and amend this bill so that seniors have the opportunity to live in dignity.
