|| That the House reject calls by the Prime Minister to balance the Conservative deficit on the backs of Canada's seniors by means such as raising the age of eligibility for Old Age Security and call on the government to make the reduction and eventual elimination of seniors' poverty a cornerstone of the next budget.
She said: Mr. Speaker, I will be sharing my time with the member for .
Today's motion is about seniors' poverty. The NDP has taken a clear position on the conjectures and hypotheses about old age security that the Conservative Party leader raised during his speech in Davos. We need an open, honest, transparent debate so that we can start working together right now to plan changes to old age security, the guaranteed income supplement, and all other aspects of Canadian pension plans. Our seniors need us when they retire.
I would like to give a brief overview of the pension plans and the social safety net in place for seniors in need. First, there are people who work and who have the opportunity to participate in a registered pension plan. Some people also have the opportunity to put money in an RRSP or in another fund that enables them to save for retirement. Naturally, we are pleased that they can do so.
Then there is the Canada pension plan. This plan is offered to all Canadians and provides them with income when they retire. However, this plan is not always enough to keep seniors from living in poverty. In that case, seniors have access to old age security and the guaranteed income supplement. These programs help seniors live in dignity and keep them from suffering a life of poverty. That is why we are concerned about the vague remarks the made in Davos recently. If old age security is either cut or delayed, this would have very serious repercussions on our society.
I would now like to read an email I received from one of my constituents this week.
This constituent wrote, “Should the electoral headlines have read “[Prime Minister] to cancel OAS, CPP”, he would never be sitting in the Prime Minister's chair today. I am a self-employed worker owning a small business. I already bear the burden of constantly increasing costs and reduced profits. Five years ago my household budget for food was $700 monthly, and we are currently down to $400. We have no dental plan, no private medical insurance, no RRSPs, no company or private pension and I am 58 years old. As I age, I have fewer breaks, less services, no corporate tax cuts and now I am threatened to have no pension.“
I think what this person is trying to tell us is that he is worried because he was promised certain things, because he has worked his entire life and he is seeing cuts to programs and services. Of course, he will definitely have access to some sort of income when he retires, but he is right to worry about his retirement in a few years.
The issue of poverty among seniors should concern us all, and we cannot cuts programs arbitrarily. We need to have an open debate, which we will do here today. I look forward to hearing the intentions of all the members. For instance, if we were to push back the age for receiving old age security, this would primarily affect the most financially vulnerable seniors. What kind of impact would that have? If we look at old age security as an isolated program, there would be a number of negative effects and the most vulnerable seniors would suffer. But let us look at the overall picture.
Poverty among seniors affects many other things, for example, our health care system. Seniors who do not have enough to eat, who do not have heating and cannot pay for medication use our health care system more, which merely transfers the problem somewhere else. Here is another example. Some people can continue to work until they are 67. Good for them. Some of them want to do so. But some cannot. Remember that when we are talking about old age security, for example, we are talking about seniors who do not necessarily have RRSPs or a registered pension plan. We are talking about seniors who are the most likely to live in poverty. These seniors worked all their lives on their feet all day as cashiers; they worked in warehouses and factories. Their arms are tired and they have likely sustained a number of injuries. Perhaps they will be able to continue working at 65, but most likely they will not.
What will happen to these seniors who are unable to work longer? They will have to seek assistance elsewhere. Where? They may have to seek social assistance from the provinces, for example. What is the government doing once again? It is transferring the problem and sticking the provinces with the bill. This is not the way to find a real solution to a problem or to overcome a societal obstacle. We have to look at the bigger picture, seriously consider the issue, have a debate and listen. All parties in the House must be heard, but so must the people who work with seniors every day. We must listen to seniors who have needs. We must listen to the future generations. We have been talking a lot about these future generations since the beginning, and I am going to come back to them.
I would like to mention the choice that we, as a society, are facing today. Clearly, the government has plans to change programs that help seniors. We still do not know how. We hope that we will know soon and we hope that we will be able to participate in a discussion before the government presents us with a fait accompli. However, the and the Conservative Party are saying that this is a crisis situation. First, they are using skewed data that make the situation seem much more alarming than it actually is. They are also saying that this is a crisis situation for future generations, a situation that is not viable in the long term. They are presenting these cuts as though they are the only solution. However, such is not the case. We have a choice. It is not true that we must cut services and programs. We can do something different. We have a choice. We have resources and we have alternatives.
What the NDP is saying is that we should first start a dialogue and listen to what people and experts have to say. Then we could start improving the Canada pension plan. This would require a little more investment, but as I was saying earlier, we are not necessarily getting further ahead by cutting services or programs since we will end up paying the price in the long run and it will be a high price. Why not look at the big picture and see where we can make strategic investments in order to reduce the overall cost? There are other solutions.
What is often presented to us as an inevitability, a result of the economic crisis or the aging population, is not an inevitability. It is a choice among so many others that the government is making. It is important to address this.
I would like to say a few words about the so-called best interest of future generations. We are told at every turn that the population is aging and that we have to do something for the sake of future generations. Allow me to say that I am part of that future generation. I do not intend to retire in the next few months or the next few years. Increasing the eligibility age for old age security does not affect me in the short term, but I am still worried. I am part of the future generation and I do not want these cuts to programs and services.
I believe we have a social choice to make today. Are we going to make further cuts to social programs and social services? Are we going to widen the gap between the rich and the poor? I say no. No, because that is not the Canada I want to grow old in. As a member of these future generations, I say we should think this through and make informed decisions that will benefit everyone.
Madam Speaker, I am pleased to speak today to this particular NDP motion.
In his recent speech at the World Economic Forum in Davos, Switzerland, the suggested that, as a broad part of the social transformation, the Canadian retirement system should undergo significant changes. Government documents distributed to the media suggested at that time the possibility of changing the eligibility to collect OAS from 65 years to 67 years.
Following the 's speech, which set off alarm bells across the country, the government quickly started backtracking on its own materials. Out came the almost obligatory cover statement assuring Canadian seniors that there would be no changes to the present benefits currently received by Canadian seniors. In addition, the government also repeated that the Canada pension plan was fully funded and in need of no change.
All I can say is that this is a rather classic tried and true Conservative tactic, “Don't worry, seniors, we'll never sell you out. You'll be just fine. It is your kids and your grandkids, those generations behind you, who will have to face the burden of our cuts, but don't you worry. You're okay”.
Unfortunately for the and the government, Canadian seniors are not buying any of that. Conversations I have heard over the last few months, from government circles, from certain academia and from the mainstream media, seem to have been telling Canadians to prepare to work until 70 years of age.
These trial balloons remind me of a bully who, with a clenched fist, says that people will need to work until they are 70 years old. Then he smiles and says that they should not worry because he is just kidding. He tells them that they will only need to work until they are 67, and then, of course, people are supposed to feel relieved at that point. Somehow, Canadians are supposed to believe the government is doing them a favour. I can tell the House that the government will not do our seniors any favours when it comes to their pensions.
Instead of tearing down our cherished retirement security program, New Democrats have been working hard for three years putting together a retirement security program designed to ensure that all Canadians are able to retire with dignity. To that end, we propose the phase-in of a doubling of the CPP over an extended period of time so that generations to come will have more of a sense of a foundation on which to retire.
Part of our plan would eliminate poverty among seniors by increasing the guaranteed income supplement. New Democrats will also create a national pension insurance program to protect existing pensions paid for out of premiums from the plan's sponsors.
New Democrats want to further protect existing pensions by ensuring that pensioners are among the creditors who are paid out of a company's remaining assets when it goes bankrupt.
What do we get from the government? We get talk of forcing seniors to work longer, a pooled registered pension plan that provides no security and, worse, the PRPP would have Canadians investing their retirement savings in the very same marketplace that caused such catastrophic losses in the value of RRSPs and other pension funds.
Unlike the CPP or private savings, the OAS is a universal pension that does not depend on retirees' work history or their participation in a registered pension plan or other savings plan. OAS, along with the GIS, has, over the years, made impressive gains in lowering, although not eliminating, poverty among seniors. Full OAS is based on residency and is available to Canadians who have lived here a minimum of 40 years. Partial OAS pensions are pro-rated for Canadians who have spent less of their lives in Canada. For example, if a person has lived in Canada for only 20 years, he or she would receive half of the monthly benefits, or, if a person has lived in Canada for 10 years, he or she would receive a quarter of the monthly OAS benefits.
Unlike CPP, which is funded through equal contributions from employers and employees, OAS and GIS are paid directly from government general revenues. High income seniors must also pay back some or all of their OAS benefit. The guaranteed income supplement is entirely means-tested and available only to our poorer seniors.
I will now talk about our more vulnerable seniors for a moment. Economist, Andrew Jackson, and others have noted that raising the age of eligibility by two years would especially impact low-income older workers. Today, people whose income is in the bottom 20% of the workforce, and I hesitate at this, they tend to die earlier than those in the top 20% because of the lives they live. Half of all lower income men, on average, will collect OAS-GIS cheques for a meagre 10 years.
Raising the retirement eligibility by two years would also have a negative impact on persons aged 65 and closing in on 65 who are in poor health and have difficulty working. At what cost? The latest actuarial report on the OAS-GIS projects that the number of recipients will increase from 4.9 million today to 9.3 million in 2030. However, the increase in total cost that is projected is actually much more modest. Today's current level of 2.5% of GDP would become 3.5% in 2030. That is because our economy will continue to grow.
I would suggest that a cost of under 1% of GDP is a very small price to pay for maintaining basic retirement levels for all Canadians, especially the one in three seniors who have low incomes. Because many of these low income people are senior women who are not part of the paid labour force, the OAS and GIS are particularly important retirement instruments for them. Senior women are less likely than senior men to draw income from CPP, private pension plans, RRSPs or employment earnings. This makes universal programs like OAS-GIS particularly important to female seniors.
In 1927, when J.S. Woodsworth first envisioned OAS, he believed it was essential to have such a program to address seniors' poverty of the day. Today, we are being told by the government that the old age security program is unsustainable. Essentially, the government wants to restructure the entire Canadian retirement system because of what we see as a clearly affordable, short-run, short-term demographic change. This resulted from the gradual retirement of baby boomers, which actually started last year in 2011.
According to the government's own reports, the anticipated growth in cost is driven largely by the retirement of the baby boomers. Its own reports do not describe any longer term issues of sustainability. Therefore, in the long run, the current system is clearly affordable and will even be a smaller share of the budget than it is today following the decline in baby boomers. Simply put, in the medium run, this is a cost increase that Canadians can clearly afford.
While speaking at Davos, the scolded our European friends for their spending, so let us look at that for a moment. According to the OECD, total public social expenditures on pensions as a percentage of GDP is estimated at 4.7% in Canada. The equivalent average in OECD counties is more than 7%. Even crisis countries, such as Italy, pay 14%. Canada, in relation to that, pays one-third of what Italy pays. Australia, France and Greece spend roughly 12%. Germany, Poland and Portugal spend roughly 11%. Therefore, such comparisons to the troubled eurozone are simply not appropriate and are only used to create fear for our time-tested Canadian programs that they might be unsustainable.
In addition, it should also be noted that the Canadian public pensions, OAS, GIS and CPP, are not overly generous when compared to other OECD countries. In fact, a recent study ranks us 20th out of 30.
The 's priority is to spend billions of dollars on corporate tax giveaways while cutting support to Canadian seniors, particularly women, and that is wrong. We should be taking practical, affordable measures to lift every senior out of poverty by expanding the GIS, not making it worse by slashing the eligibility to OAS. New Democrats have been meeting with seniors' groups to talk about how seniors will be affected and work on the best ways to oppose these reckless Conservative cuts. A better option for Canadians is to expand the CPP.
In closing, in response to the 's triumphant speech, economist Jim Stanford asked, “If Canada has been so wonderfully successful, why must we take money away from Canadian pensioners?”
Madam Speaker, I will be splitting my time with the member for .
I stand here in the House to provide some clarity on a significant demographic shift that is happening in our country. I will provide some detail on that in a moment, but first let me be very clear with the House and with Canadians. Over the past few days, the opposition has created, and indeed perpetuated, fear and confusion among Canadians. They are intentionally misleading Canadians, and particularly our seniors, about the old age security program and I would like to put an end to that today.
Let me confirm right now that our government will ensure the security of retirement benefits for Canadian seniors and for future generations. Specifically, as I have said in the House many times, seniors who are currently receiving benefits will not lose one cent because of any potential changes. Any changes to OAS will be implemented gradually and with substantial notice for all concerned.
We will not jeopardize the well-being of our seniors. We want to protect the OAS and ensure that it is sustainable for future generations. Therefore, we are changing some measures in order to protect Canadians' pensions in the long term.
Let me put this in context. It is no secret that Canada's population is aging and that this is going to bring significant changes to our society. These are changes that we need to think through and that we need to prepare for right now.
Why is Canada aging? There are two main factors. First, our birth rate is low. In fact, it is less than the level needed to replace ourselves. At the same time, average life expectancy for each individual has gone up. The average Canadian can now expect to live to 81 years old.
When it comes to longevity, our country ranks among the world's leaders. We are living longer than ever and we are enjoying more years of good health as we get older. However, with fewer people being born and more people living longer, the age structure of our population is being significantly reshaped.
By 2030, 25% of the population will be over 65, compared to the current 14%. This new reality will have a serious impact on the labour force. With fewer workers, our productivity will decline, which could slow down our economic growth.
With fewer workers to pay taxes, we will also face a shortfall in revenue. A shrinking tax base means it will be harder to finance our unfunded social programs. Looking to the longer term, that means some programs, like OAS, will soon become too expensive and unsustainable if not addressed.
This is not a short-term problem, nor does it have anything to do with deficits or deficit reduction. Frankly, the issues with old age security sustainability will come into play long after we have achieved balanced budgets, but they are tomorrow's challenges that need to be addressed today.
Any important decision needs to be assessed carefully and implemented responsibly. We all make important decisions every day, at home and at work, for ourselves and for our families. Some can be made at lightning speed, reactively, and they really do not make a dent in the grand scheme of things, but others take longer to make. We need to look at all of the angles and assess all of the facts. Some decisions cannot be made in a snap because the future is involved. We have to plan or invest for those moments down the road.
As a government, when we talk about potential OAS changes, we are talking about prudent planning for the future, for the long term. It is one of those decisions where we will examine all of the angles and assess all of the facts. In doing so, our job is to take time today while we still can to think about how we can introduce changes gradually that will improve Canada in the future.
It is our job to figure out how to ensure the sustainability of programs that Canadians cherish, like OAS. The opposition, of course, has the luxury of ignoring these looming challenges, but our government does not. We will not sacrifice seniors' benefits in the future for the sake of recklessly keeping our head in the sand, as the opposition would have us do.
I promised some detail when I started my speech this morning. I would like to paint a picture of the present versus the future.
Today there are four working Canadians for every person who is retired. By 2030 that will be cut in half to only two working Canadians for every retiree. With fewer citizens working there will be less revenue to invest in programs for retired Canadians. Here is the kicker: the estimated cost of OAS will nearly triple. Half the people will be paying three times the price.
I want to pause at this point to make an important distinction between OAS and CPP, the Canada pension plan. When I talk about retirement benefits today and their cost, I am not referring to the Canada pension plan. The CPP is 100% funded by contributors. It is paid by employers, employees and the self-employed through premiums.
In the 1990s, important changes were made to the CPP to address the potential impact of the aging population. Now it is secure and it is sustainable; in fact it is rock solid for at least 75 years.
In contrast, OAS is 100% funded by tax dollars on a pay-as-you-go basis. There is no reserve; there is no fund. Since it was created in the 1950s, the OAS has never been adjusted to reflect our aging population, nor has it been updated to incorporate the fact that people are living longer and collecting OAS for a longer period of time.
It has not been changed to address the fact that very soon there will be an unprecedented number of Canadians retired and eligible for OAS. The outdated nature of the OAS program becomes important when we return to the point that taxpayers fund it each and every year.
This means that today's Canadian workforce pays for today's OAS recipients. And tomorrow's Canadian workforce will pay for tomorrow's OAS recipients.
Today, OAS is the largest single transfer that we make to Canadians, at around $36 billion a year. By 2030, it will be $108 billion, nearly triple the cost. The number of basic OAS pension beneficiaries is expected to almost double. The per cent of GDP expenditures will increase to 3.14%, in 2030, accounting for billions of dollars in increased costs. By that time, as I mentioned, we will have fewer Canadians contributing to the tax base and active in the workplace, compared with those retired. With those dramatically changing costs and statistics, the current OAS program will present a tremendous burden on tomorrow's workforce and taxpayers if it stays the way it is.
Our government holds the responsibility for protecting future generations, whatever the opposition may believe. This is not a crisis that we invented. I am very disappointed that its only apparent interest is in deliberately misleading and confusing Canadians on this issue. It is clear that the opposition is not interested in facing reality. It is also clear that it is not interested in proactively discussing Canada's long-term challenges and opportunities.
The opposition's irresponsible approach to Canada's finances would, quite frankly, put the entire OAS system at risk. Actions speak louder than words and its flawed actions today and over the past few days show that it does not have the best interests of Canadians at heart.
The motion would indicate to hard-working Canadians that the opposition prefers to play tricks and games in the House. It prefers to ignore the facts that hundreds of experts are confirming. It prefers to ignore the changing landscape.
As I close, I want to acknowledge the Canadian seniors who built our great country. We are not considering change for the sake of change. We are considering change because it is in the best interests of Canadians.
Madam Speaker, I welcome the opportunity to correct the record on what is a misguided, misleading opposition motion.
I can state with certainty that the changes being contemplated for the old age security have nothing to do with deficit reduction. Because of the long notice period and the gradual phase-in period, any changes to the OAS will happen long after Canada's return to balanced budgets. For opposition members to suggest otherwise is reckless, misleading and speaks ill of their understanding of this issue.
To avoid the rhetorical excess that appears to have consumed this debate, I will add some facts to this discussion.
We will provide a lengthy notice period before any changes occur. As the minister has stated, seniors who are currently receiving benefits will not lose a penny by the changes being contemplated. The old age security program is an important feature of our retirement income system. Together with the guaranteed income supplement, it helps alleviate poverty among seniors by providing a modest base upon which they can build. This is a universal program for all people over age 65 who have resided at least 10 years in Canada.
I stress from the outset that the survival of the OAS is a priority for this government. That is why we are acting now to ensure this critical social program that Canadians have come to rely on is and will be affordable for current and future generations. We will not turn a blind eye to the numbers that illustrate this looming crisis. We will not continue the unfortunate trend of past governments in ignoring this pending challenge until it is too late to act. Instead, our government will take action.
We have a proven record of balancing the economic interests of Canada with the compassion Canadians expect from their government. That is why Canadians gave us a strong majority mandate in the last election to guide Canada through these fragile economic times. Thanks to the strong leadership of our and the , Canada can approach this democratic challenge from a position of relative strength. Many of our OECD counterparts do not have the flexibility afforded to Canada because of the strength of our fiscal picture.
We have also been consistent over the past six years of our mandate in our support for our most vulnerable seniors, providing fiscal support, such a GIS top-up announced in budget 2011 and implemented over the summer months. I say that to drive home the point that we are committed to ensuring that social programs remain sustainable for future generations and continue to be available for the most vulnerable individuals. We are ready to take action now and make the tough decisions that are necessary for Canada's future because it is the right thing to do.
On January 26, at the World Economic Forum, the once again demonstrated Canada's economic leadership on the world stage. In his speech, which outlined how Canada would make the transformations necessary to sustain economic growth, job creation and prosperity, he demonstrated a vision that stretches beyond the next election cycle and the immediacy of politics in this place.
It is my hope that all members of the House will see the need to ensure that Canada makes the necessary economic choices now to prepare for the demographic pressures we will face in the future. The issue of the demographic shift is one that is well-known to world leaders. Unfortunately, it is evident that some countries have been unable to avoid their own crisis, sometimes through lack of leadership or political courage, for which their populations are now paying a very heavy price. That will not be the case here.
Thankfully, our has the foresight to explore changes now well in advance of any future crisis. In less than two decades, close to one in four Canadians will be over the age of 65, a drop from one in seven today. Meanwhile, the number of Canadians below age 65 will remain almost flat. The result is that by 2030 we will be living in a country with the same number of workers but with twice as many seniors.
Furthermore, the number of Canadians over the age of 65 will increase from 4.7 million to 9.3 million over the next 20 years. By 2030, OAS program expenditures will triple to $108 billion from $35.6 billion in 2010. Here it is important to remember that OAS is the largest statutory program in the federal government. Finally, by 2030 the number of taxpayers for every senior will be two, down from four in 2010.
This is not a short-term problem: it will affect many generations to come. As a government, it is our responsibility to future generations to ensure that this type of growth is addressed. At the same time, we will ensure that any changes will not affect current recipients. Therefore, any seniors currently receiving benefits as well as those nearing retirement will not be affected.
We are raising these issues now to be transparent and open with Canadians about the road ahead. We are considering these important steps now to ensure the viability of OAS for future Canadians. It is the right thing to do.
We are currently engaging the public on this issue through our debate here, at the kitchen tables of the nation and across the airwaves. We cannot bury our heads in the sand. We cannot misinform Canadians for our narrow political gain. Unfortunately, this has not been the case to date.
There may be some misunderstanding as to how the OAS system works. All OAS benefits are paid from taxes collected that year. This means that any benefits that cannot be paid from taxes collected that year will have to be borrowed.
Canadians understand that continued deficit spending is not a viable alternative. Beyond our own history, the economic crisis in Europe serves as a fresh reminder of the dangers of debt financing.
By acting responsibly now we can address this issue of intergenerational fairness and ensure that our children and their leaders are not forced into unacceptable financial choices because of our actions. We want to ensure that the OAS will be there for future generations. We have a responsibility to future generations to take action now to secure their future as well as our own.
The situation, thankfully, is not the same with the Canada pension plan. The chief actuary recently reviewed the CPP and pronounced it actuarially sound for the next 75 years.
Some confuse the CPP with OAS when they are talking about retirement. Many people are familiar with the CPP simply because of the deductions off their paycheques every month. They do not realize that hidden in the income tax deductions is another pension contribution.
Let us be clear in this debate that when we are talking about sustainability, we are only talking about the OAS system and not the CPP.
Demographic changes are putting pressure on our retirement income system and on many other programs. This has been clearly documented by many experts.
All of us, young and old, cherish our future and want to grow old knowing that we have a secure one. It is this security that this government is committed to providing to every Canadian at every stage of life. This government will act to ensure that our programs are viable for generations to come. Sadly, we are not seeing the same foresight from the opposition. Instead, we see the tired politics of fear and misinformation. Such wilful ignorance of the facts in the face of demographic trends that have been known for decades is disappointing to say the least.
We have an opportunity here to look beyond this sitting, to look beyond this session and this Parliament to the future of our nation. The trends are clear; the facts are unmistakable. Now is the time.
The opposition motion before us here today is sadly misinformed. It does not provide a solution to the demographic challenges our nation faces. For these reasons, our government cannot support it. I would ask that all members of the House do likewise.
Madam Speaker, it is with real sadness this morning that I listen to all of this talk about political rhetoric and the rest of it. This is such an important issue for millions and millions of Canadians. This is something that we should all have been working on together.
We all know that the population is aging; this is nothing new that just popped up yesterday. We as a party have been working on retirement issues and moving these things forward. To be standing here blaming each other for political rhetoric, fear-mongering, and all the rest of it is sad. It is sad because there are thousands of people watching, listening to every word and worried now about what they are going to do in their future. Seniors today have a hard enough time coping with retirement at 65, never mind going to 67.
If this is the direction we are going in, I do not think this is a day in which anyone is happy. Not only did our groundhog see his shadow and tell us that we were going to have six more weeks of winter, but I also think it is an ominous reflection of the kinds of shadows we are dealing with here in the debate today.
On January 26, the stood in front of the world, not here in Canada, because I am sure he would never have had the courage to stand up to some audience in Canada and make the kinds of comments he did. He had to go over to Switzerland to make those kinds of comments there. Whatever he was trying to prove over there, I am not sure what it was. When he was telling them what they needed to do to clear up their debts and so on, one of the things he forgot to mention was that Canada did all of those things. We got our house in order years back. It was all under the prudent leadership of Liberal governments. He opposed all of that, including the CPP. At one point he wanted to privatize the CPP because he did not think we needed it either.
During this diatribe in Davos, the let one small detail of his own design float out. He suggested that Canada's old age security pension plan would have to be changed forever. Specifically, after the Conservatives had money for $6 billion in corporate tax cuts, $30 billion for untendered jets, another $1 billion for fake lakes and gazebos, the Prime Minister decreed to the world, not just to Canada because he did not want Canadians to know, that Canada's lowest income seniors would have to tighten their belts. After giving away all of that money and umpteen millions on a bunch of other stuff, he did not have the courage to come here and make that announcement in Canada, telling seniors they were going to have to tighten their belts after all they have done to build the country we are enjoying.
I will just provide a bit of background because people sometimes forget why we have and how we got some of these programs. Our old age security was first created by a Liberal prime minister, William Lyon Mackenzie King, in 1927. Back then even he recognized the fact that seniors' poverty was rampant and totally unacceptable.
In 1952, again, another Liberal prime minister, Louis St. Laurent, expanded the program because he felt it was unfair for the provinces to have to deal with so much poverty when it came to seniors.
Then in 1967, Liberal PM Lester Pearson created the guaranteed income supplement, again to reduce the incidence of extreme poverty among our seniors, because we recognize that when people get to their senior years those are not the years when they should be eating macaroni and cheese three times a week.
Then in 1975, again in response to seeing too many seniors in poverty, Prime Minister Trudeau created the spousal benefit.
For 90 years, successive Liberal governments have worked to build and maintain an old age security pension system that would make sure that seniors could live with dignity. Even today, in spite of all of that, we are still not doing enough because we still have seniors living in poverty. In fact, if they do not have a private pension, the most they will get is $15,000. Try living today on $15,000. I still consider that to be poverty.
We wanted to make sure that the provinces did not have to deal with these issues alone. We wanted to show the world that we had a heart when it came to the very people who built the country so that we and our children and grandchildren could enjoy it, not cast seniors aside when they are 65 and no longer able to work, never mind now moving the age to 67.
However, on January 26, the Conservative took the first step toward reversing all of those things.
The said that raising the qualifying age for the OAS will have no real impact. He did not stop to think about the triple effect it would have on umpteen other levels of support, like the provincial drug card. People do not get the provincial drug card unless they are getting OAS, and they cannot get GIS unless they are getting OAS. If seniors are receiving OAS, lots of our municipalities give them municipal tax breaks in a variety of ways to help seniors move along.
Between 1965 and 1968, Liberal Prime Minister Pearson recognized that having to work to age 70 was far too difficult. Many of the people in those days were farmers, people who were working all day at heavy jobs and their backs and their physical bodies would not carry them to age 70. That was why the age was moved down to 65. We cannot ask people to work until they are 67 years old, never mind 70 if they are in hard jobs where they are standing on their feet all day. Their health just will not carry them.
We understand that. Our seniors deserve better than poverty during their golden years. There was a time when we thought the actually understood that too.
During the April 12 leaders debate in the most recent election--which I remind people was only eight months ago; it may seem like a much longer period some days, but it was only eight months ago--the said that he would not cut pensions. Canadians believed him, sadly. We told them not to trust him, but that was not the way it went. Canadians did trust him, just as they did with income trusts and some of the other things he said he would not touch, but the next day he turned around and did exactly the opposite.
Perhaps the surprise should not have been so great. After all, it was the who campaigned against the CPP and said it should be privatized. At that time he vowed to create a super savings account so Canadians could invest all their extra money for retirement, as if all Canadians have a lot of extra money.
I wonder how much extra money a 66-year-old widow with an annual income of less than $20,000 might have to invest. The average Canadian family that is trying to survive on a $40,000 or $50,000 income does not have any extra money to put into a pension either.
I will mention a few of the facts, according to the government's own numbers.
Twenty-four per cent of all women over the age of 65 qualify for GIS. That means they have an income of less than $16,300 per year. I wonder how much money our can invest in his various retirement plans, but he has lots of money, contrary to many Canadians out there today.
Over the next decade, 4.5 million Canadians will turn 65, and of this group of people, 92% will qualify for the OAS. In 2009, for all of the OAS recipients with an income under $20,000, the OAS and GIS accounted for 50% of their total income.
The numbers paint a very simple picture. If the Conservatives carry through with their threat to take away the OAS, even phased in over time, they will be dealing a crushing blow to the seniors of tomorrow in this country.
Why is this on the table? In the last election the said that seniors' pensions would not be touched. Now he says that the economy just cannot afford to lift seniors out of poverty, that we just have to keep them working longer and harder.
Setting aside all of the money that has gone into jets, jails and gazebos, that is very short-sighted, given the fact that all of this has happened in the last eight months. It was not as if everybody woke up and suddenly found out that we have an aging demographic and we have to do something, so we should go after the OAS and penalize that group of people.
The economists are telling us clearly that it is a sustainable program. Edward Whitehouse, who researches pension policy on behalf of the Organisation for Economic Co-operation and Development and the World Bank, says the analysis suggests that Canada does not face major challenges of financial sustainability with its public pension scheme.
In Europe, in Greece and Italy, many of them have very rich pensions. It is a real pension that they have. What we have in Canada, and the minister made a point of that, we call it a pension, but it was always meant to be very modest. It was not meant for people to live on.
Part of the challenge that is facing all of us is to make sure that people understand that when they get to be 65 and they get the OAS and GIS, that is not meant to be all of what they are to live on. They are supposed to have been supplementing those programs, but unfortunately, most Canadians think that is the pension.
When compared to countries like Italy and Greece, and I certainly hear a lot about how they have great pensions, that is not the system we have. We have a job on our hands of making sure that people are educated to understand their need to invest in the various programs, which are quite limited.
There is talk about our heads being in the sand and not planning for the future. On this side of the House, we have been working very hard on this issue. A plan was recently adopted at the national Liberal convention to bring forward a companion program to the existing Canada pension plan, similar to what is now being offered by the OMERS, which is a program for those who are in municipal politics in Ontario. People can add on to their Canada pension plan as a companion piece. It is not a payroll tax, which is what the NDP is proposing. It is a companion plan to people's existing Canada pension plan. All that is needed is a social insurance number. People do not have to be working to put the money in. It is for homemakers, farmers, the self-employed. It is helping Canadians prepare for the future.
That is the kind of thing that has to be done. That is the kind of involvement that should have all parties working to help Canadians prepare for the future. We all know the demographics. We all know that changes are coming, but we should not go after the most vulnerable in order to make those changes.
Governments have choices. All of us in government or wherever we are have choices to make. Our choices are clearly to help people, to help the poorest of the poor, not to penalize them. There are lots of areas where budgets can be balanced without having to balance them on the backs of seniors and future seniors of this country. We should look at some of the choices that government has made in the past and make some different ones.
I want to talk about how this affects women in particular. Some women get married and drop out of the workforce to care for their children. Sometimes they have to care for parents. A man who works in construction for his entire life may have a wife who goes in and out of the workforce, and always earns somewhere between $25,000 and $30,000 because she is never employed long enough because she is caring for her children or elderly parents, a sick husband or whatever. When she turns 65, she has next to nothing when it comes to CPP because she was not in the workforce long enough or with a high enough salary.
Most women do not max out on their contributions to CPP. Men do, if they are fortunate, but not the majority of women, unless they are career women. I am talking about average women who take time out of the workforce to have children and leave and return to the workforce a couple of times. When they turn 65, a husband and wife, for the most part, are living on $16,000 a year. If the husband dies, all of a sudden the woman is living on $10,000 or $11,000 a year. These are not magical things I am saying. If members do not have people with lives like that in their ridings, they are very fortunate, but they are welcome to come to my riding and speak to many people who live that life. As we plan to make changes for the future, which I hope involves all of us as parliamentarians, to help Canadians better prepare for the retirement, I hope we move forward with positive things.
The other sad part about this is the issue of trust. We get smeared all over the place because we are politicians and people say that nobody can believe a word we say. The clearly outlined that he was not going to make cuts to seniors' pensions and people trusted him. People need to be able to trust their legislators and parliamentarians at all levels of government, the especially. Even if he decides to do this for the seniors of tomorrow, it is a big move to change it from 65 to 67. It is going to have huge impacts. I am not talking about little things. It is a sad day for Canadian politics when that happens.
We are talking about working together and building this country together. We are not trying to increase poverty. That is why we are bringing forward a supplementary Canada pension plan. As I said earlier, it is a companion piece to the current Canada pension plan which would be easily administered, would have low management fees and would be secure. That would help the seniors of tomorrow have a much better retirement and would put less onus on the government.
Remember that at a $65,000 income the OAS is clawed back. That means fewer Canadians would end up in the poverty levels of the people we are dealing with today. Today we are dealing with many people who never had opportunities to get a higher education, so by and large, if people have good jobs, they are earning a higher level of money. This means they will be paying more taxes, which also means they will be less apt to draw the OAS and the GIS. But that takes investment in the kinds of programs and plans so that all Canadians have access to this.
I know that everyone is feeling the pressure of this kind of a discussion. I would hope that my colleagues on the other side would stand and fight on behalf of all Canadians to make sure that we are doing the right thing as legislators and that we will not have more people in poverty at a time where the challenges are out there for all of us.
Madam Speaker, I will be splitting my time with the member for .
I rise here today to defend the rights of the people of my riding, . These Canadians, including men and women from Thurso, Brownsburg, Saint-Placide and Lachute, will be affected by the Conservatives' attack on old age security.
My riding is definitely not the only one to lose industries, but my constituents have been hit hard, because they are losing their jobs. Plus, young people are leaving the region because of the shortage of opportunities for work and education. Problems accessing health care are also not unique to my riding, especially considering our aging population. There are many ridings like mine, and I urge all families and all workers from those regions to rise up against what this government is proposing, that is, reducing the deficit by attacking people's pensions.
Like many of the cuts proposed by the government, the planned attack on OAS and the GIS is very insidious because it is directed against the most vulnerable Canadians. In fact, this measure affects those already dealing with poverty, illness, advanced age and, at times, disabilities caused by aging. This is a particularly despicable attack because those who will be most affected are middle-class workers and the poorest Canadians. They work at physically demanding jobs and often cannot continue working until 65, let alone 67. It is also difficult for the disabled and those suffering from chronic illnesses to work past the age of 65.
It is obvious that increasing the retirement age and making cuts to social solidarity programs for seniors will harm the less fortunate, especially women and particularly single mothers. The Conservatives have an unfortunate habit of attacking those groups in our society who have the greatest difficulty being heard. By actively attacking these groups, the Conservatives are ignoring the problems of seniors, women, the less fortunate, aboriginal peoples, people who need employment insurance and a number of other groups. Because of the Conservatives' attitude, we should not be surprised that they are trying to attack those who will retire in the future. These groups often believe that they do not have a voice. But they do have a voice in this House. The people of my riding can depend on me. People in every Quebec region have a voice thanks to the NDP.
According to Statistics Canada, the median income in Argenteuil and Papineau is 10% to 20% lower than in the rest of Quebec even though household size is the same. Families in my riding are not rich like the big businesses that have been given tax breaks by the and have then moved a staggering number of jobs outside Canada.
That is the situation for many workers in my riding. Young people from the region are leaving because there are no jobs. These young people do not have access to higher education. Although the region is not far from major centres, the public transit system that would give them access to colleges and universities is either inadequate or non-existent. As a result, young people are leaving the region and cannot take care of their aging parents.
The median age in Argenteuil and Papineau is about 10 years higher than in the rest of Quebec and will continue to increase in the future. The average income after taxes is approximately $17,000 and decreasing as a result of the economic situation affecting Canada and the world. People like the ones in my riding are in dire need of support from programs such as old age security and the guaranteed income supplement.
Income inequality continues to grow in Canada. No one can really predict what type of long-term damage the economic crisis will cause for Canadians. We absolutely must not play sorcerer's apprentice with social solidarity programs because they have been helping retirees with modest incomes since the 1960s.
In my riding, those are the fallouts.
First, I will speak for the women of my riding. I sit on the Status of Women committee and we have spent the past three months studying senior women. Anything that hurts our seniors, hurts our senior women the most. Women are substantially poorer than men, both in my riding and across Canada. Fourteen per cent of single women live under the poverty line and a staggering 52.1% of single women with small children live below the poverty line. The reasons for this are systemic and not that complicated. EI, parental leave and pay equity are needed to close the gender gap, but what this means to my argument today is that women are far less likely than men to benefit from CPP, private pensions or RRSPs. Women are not the top income earners in the country since so much of their contributing labour is unpaid.
There are far more senior women than men. Women live longer than men. The fact that senior women are much poorer than senior men has deeper roots. This makes OAS and GIS so important to women.
Women today need to understand that the factors that plunge them into poverty in their old age are systemic and require structural solutions.
We assume that our public health care system will give all seniors what they need to stay healthy. I thought this, too, until I studied the case of elder abuse. I learned that of all the forms of health care offered in Canada it is seniors' care that is not necessarily covered under the Canada Health Act. Long-term care, both in home and in facilities, is not necessarily covered, and the exorbitant costs of pharmaceuticals, wheelchairs and walkers are also not provided for. Of all the forms of health care in this country, it is seniors who suffer the most from a two-tiered, inequitable system.
When a senior's income hovers around $18,000 a year and the children have left the hometown because the factory has closed down, for that senior to lose any part of his or her OAS and GIS will be a major blow that will necessarily plunge the individual below the poverty line.
Here is another thing that plunged the workers in my riding below the poverty line. When Fraser Papers closed in Thurso, Quebec, it declared bankruptcy, which meant that it was legal for it to divest itself of all workers' pensions. The fact that the company declared bankruptcy is dubious enough since the major financial corporation that owned the controlling shares of Fraser Papers is Brookfield Asset Management, a company that continues to turn huge profits on Bay Street today while it thanks our for its tax breaks. These workers, who invested in their pensions throughout their entire lives, lost them entirely through a corporate sleight of hand. We need to pass the NDP bill that would protect pensioners such as those.
Now I must now go to those pensioners, who have already lost so much, and tell them that they can no longer rely on their OAS and GIS.
Until the looks the hard-working people of Thurso and the women of my riding in the eyes and offers them a way out of the poverty they are facing, it is deplorable to talk about needing to shrink the deficit because of changing demographics.
Let us speak about demographics. The likes to remind us that the population is changing. Yes, we are aging. That is a fact we must prepare for. What he fails to say is that poverty among seniors is also on the rise and, according to forecasts, will continue to rise. Middle-class jobs are disappearing and being replaced by low-paying jobs that are often only part time. People who work in these low-paying jobs, who do not get enough hours and do not receive any benefits, will not be adequately protected by employment insurance. The rich are getting richer. The government is rushing to invest in big business and grant tax breaks to the wealthy, while the poor continue to sink deeper into poverty.
The Conservatives' threat to old age security is another measure that will increase inequality. This is not the time to invest in oil and in fighter jets. It is not the time to impose an austerity budget.
The Conservatives are questioning our ability to invest in social programs. I would respond by asking them these two questions. How can we not invest in social programs? What could be more important than the health, security and dignity of Canadians?
Madam Speaker, I rise in support of the motion tabled by my colleague, the member for . Her motion has been brought before this place on the heels of the announcement by the , which was made outside of the country, in Davos, Switzerland, of his intention to change our pension system, including old age security.
New Democrats are calling on this place to reject calls by the to balance the Conservative deficit on the backs of Canada's seniors. The member for recommends instead that the government make reducing and the eventual elimination of seniors' poverty a cornerstone of its upcoming budget. I fully endorse her motion. I cannot conceive of any member speaking against her call.
One hundred and six million Canadian seniors are now living in poverty, and he majority are women. Eleven million have no workplace pension plan. Canadians are reported to have acquired a record household debt. Many lost much of their retirement savings in the recent economic crash.
Far too many Canadians remain underemployed or unemployed. Those underemployed in part-time jobs usually have no benefits. Many are unable to save because they simply have no surplus dollars at the end of the day to set aside. A mere one-third of Canadians are reported to be saving at levels to cover the basic cost of retirement. They are unable to even consider a tax free savings account, let alone investing in yet another risky saving system such as the proposed PRPP.
In 2009, the premiers called for a national summit on pensions. This has yet to occur. However, the Conservatives continue to deny, or have continued up until Davos, that Canadians face any pension crisis whatsoever. That was until the suddenly announced from afar that Canadians were apparently facing an imminent old age security plan crisis. In other words, as a nation, we can no longer continue to offer struggling seniors a meagre $540 a month. This, regardless of the fact that the government's own commissioned report found no crisis into the future in financing the OAS.
What is the option? Is it to download the problem to the provinces' welfare rolls, or perhaps to our cities and churches to finance additional shelters for homeless seniors, or how about more food banks for our struggling veterans?
It has been duly noted that any concerns raised with the government have received the same carefully scripted reply, “We are not cutting programs for existing seniors”. This offers little comfort to those who will be reaching retirement age in a few years or in a few decades. Has the government simply decided that some seniors just are not sustainable? Is that what fiscally responsible government means to the government?
The government finally, reluctantly, partially increased the GIS payments but it refused to raise GIS payments to the level New Democrats called for, to rates that would actually lift all seniors out of poverty. This would have cost an additional $700 million a year. Now, post election, the Conservatives are suggesting that OAS payments could be cut back or delayed.
It is not a question of finances. It is a question of priorities. Do we offer all of our seniors a life of dignity or do we buy one more F-35? Do we assist all of our elders and grandparents to enjoy a reasonable quality of care or do we give an additional unnecessary tax break to profitable banks and oil companies, both reporting, by the way, record profits?
New Democrats have based our budget priorities on what Canadians have expressed are their preferred routes to retirement and dignity: to increase the GIS to levels that will lift all seniors out of poverty and double the CPP over time through small increases in contributions. It would cover all workers. It would be indexed, have defined benefits, be secure, a proven portable pension plan and the majority of Canadians support it. CARP supports it.
We propose building into the CPP potential for workers or employers for voluntary additional contributions. We have called for and tabled in this House an amendment to federal bankruptcy laws to put pensioners and the disabled at the front of the line. We have called for greater investments in caregivers, home care and long-term care.
A recent poll reported that 80% of Canadians view increasing the CPP benefits as their first priority for retirement.
The current has a propensity to seek parallel policies with our major trading partner, the United States of America. What do Americans provide, under their social security? Thirty thousand dollars a year, I am told. In Canada, the maximum provided is close to half of the American benefits.
Across Canada, we benefit from the dedicated efforts of volunteer organizations, such as CARP, which advocate for a decent retirement for all Canadian seniors. In Alberta, two advocates for seniors stand out: Carol and John Wodak.
When I spoke yesterday with Carol, she shared this sentiment. A quality of life for our seniors requires that we consider more than just the amount of the pension. We must give equal attention to policy shifts that are making the lives of our seniors already living on the edge even more perilous. Where income security is delayed or reduced, it may mean denial of basics of life, most certainly of quality of life, in our so-called golden years.
The National Forum on Health advises that income is one of the primary determinants of health. There is a growing problem in affordable housing and care for seniors, as some jurisdictions, including Alberta, move from long-term care to what they call assisted living. Elder care is increasingly provided by for-profit corporations. No longer can seniors expect that their housing fees will cover all services once considered basic. Many now must pay extra for palliative care, home care, cardiac post-surgery rehabilitation, prescription drugs, dental care and eye care. The cost of a wheelchair is beyond the means of most on basic pensions.
Seniors need these social benefits to enjoy a basic quality of care.
Let us not only maintain these basic benefits. Let us make OAS automatic. We are finding in my riding many could have benefited earlier from these supports were they aware they had to apply. I received many calls from seniors concerned with delays in receiving these important benefits needed to pay their rent, their rising electricity bills and their prescription medicines.
In closing, it is important to address my concern with the implications of clawed back retirement benefits for aboriginal elders. Canada may rank among the top countries of the UN human development index, but our treatment of aboriginal populations has been ranked near 75th place.
The director of health for the Native Women's Association of Canada has testified that almost half of aboriginal women live in poverty and, consequently, experience high rates of chronic illness. This leaves a substantial portion of their communities with little capacity to save for retirement.
Concern has also been expressed to me by a number of first nations that seniors' housing and support services are simply non-existent in their communities. Elders are either poorly cared for or relegated to extended care in centres far from their communities. This leaves them without family support and often struggling to communicate in their traditional language.
I will close by echoing the comments of my colleague. How can we afford not to make retirement in dignity for all Canadian seniors our priority?
Madam Speaker, I will be splitting my time with the member for .
I am pleased to have the opportunity to respond to this misleading motion and talk about what our government is doing for Canada's seniors. In my role as minister, I have travelled across Canada meeting many seniors. I have listened to what they consider to be important. Let me be clear. No senior who is receiving benefits today will lose a penny because of the changes we will be proposing. Any changes will be announced with a long notice period and be brought in gradually.
It is unfortunate that members of the opposition are attempting to scare seniors to score cheap political points. This motion falsely attempts to connect deficit reduction with the necessary changes to the OAS. There will be no change to the OAS until well after the budget has been balanced.
I can assure Canada's seniors that the support our government has shown them will continue. We all know someone, a family member, friend or neighbour, who is a senior. We care about their financial future. We want to ensure that the social programs we have come to rely on are sustainable for the next generation.
As someone who was not born here, I can speak from personal experience. Canada is an example to the world when it comes to the care of seniors. We are committed to ensuring seniors have the highest possible quality of life for today and tomorrow. We must ensure the programs and services that give us this quality of life are sustainable for all citizens in the future. Striking this balance is not a choice. It is a necessity. Good choices now mean we will be able to maintain our quality of life today and in the future.
I will take a few minutes to talk about what Canada is doing to help seniors currently. Our government has consistently shown a commitment to helping the most vulnerable seniors across the country, not just with promises but with action.
This summer I was excited to see the new guaranteed income supplement top-up benefit start helping Canada's most vulnerable seniors. This top-up is the biggest increase to the GIS in 25 years. It represents a $1.5 billion investment over the next five years. This top-up works out to $600 annually for a single senior and $840 for a couple. That is just the latest improvement we have made to the GIS.
We increased the GIS in 2006 and again in 2007, for a total increase of 7% above regular adjustments for inflation. In budget 2008, we increased the GIS earnings exemption from $500 to $3,500, meaning that GIS recipients keep more of their hard-earned money. We also reduced bureaucratic red tape by introducing automatic GIS renewal for seniors who file annual income taxes. Our work does not stop there. There are a number of areas where seniors want action and we are responding.
Seniors want leadership in their communities. In budget 2011, we provided $10 million over two years to increase funding for the new horizons for seniors program. This helps seniors use their leadership, energy and skills to benefit communities across Canada. Everywhere I travel seniors tell me how much they appreciate low taxes, thanks to our government. We have provided over $2.3 billion a year in additional tax relief to seniors through measures such as income splitting and increasing the age credit.
Affordable housing is an important measure to combat senior poverty. We invested $400 million over two years under Canada's economic action plan for the construction of housing units for low-income seniors.
Now more than ever, good health is a concern of seniors. We are supporting positive and active aging through the collaborative age-friendly communities initiative, physical activity tips for older adults and falls prevention initiatives.
Having a voice in decisions is also important to seniors. This is why we created the National Seniors Council in 2007 to provide advice to the federal government on the well-being and quality of life of our seniors.
We proudly established October 1 as National Seniors Day in Canada. On this day, we recognize the significant and on-going contributions seniors make to families, communities, workplaces and society.
I think we can all agree that seniors abuse cannot be tolerated. That is why in budget 2008 we invested $13 million over three years to help seniors and others recognize signs and symptoms of elder abuse and to provide information on available support.
Outcomes matter. The sum of the efforts I have highlighted so far today are resulting in a better Canada, a safer Canada, a Canada that respects seniors and makes them a full partner in the decisions we make as a country. Statistics show we are moving in the right direction.
The low income rate for seniors has declined dramatically from 21% in 1980 to 5% in 2009. The low income rate among seniors in Canada is now one of the lowest rates among member countries of the OECD. That is a record of which we can be proud.
To stay on the right track, we have to plan for the future. That starts with looking at facts, not just opinions, because facts give us a very good picture of what the future will look like, both in terms of opportunities and challenges.
Canada, like many other countries, is facing major demographic challenges because of an aging population. Our aging workforce will present a growing and serious economic challenge for Canada and other developed countries. In Canada the number of seniors will nearly double within two decades.
Among that growing number of seniors, the number of basic OAS pension beneficiaries is also expected to grow, from 4.7 million reported in 2010 to 9.3 million projected by 2030. Population aging involves both current and future generations.
In the future, there will be fewer workers to support higher costs of programs such as the old age security, which is funded from general tax revenues on a “pay-as-you-go basis”. OAS benefits are paid out of the tax revenues collected each year. As the ratio of workers to seniors changes, it will mean less workers have to pay for more benefits.
Currently there are approximately four workers for every retiree. By 2030, that number will have changed to two workers for every retiree. This is why it is critical that we must make changes to the OAS program. As the ratio changes, the cost to the taxpayer of these benefits becomes increasingly high.
The Canada pension plan is a different story. This program does not involve any tax dollars. It is entirely funded through the contributions of employers, employees and the self-employed. These contributions are invested over the life of a worker and grow to cover the cost of their retirement benefits.
The chief actuary recently examined the CPP and said that it was sound for the next 75 years. Therefore, it is clear that we need to make changes to the OAS to ensure our retirement security system stays strong and that it is available to for our children and our grandchildren.
I can assure Canadians that we will provide the time required for younger generations to plan for their retirement. Let me reiterate that people currently receiving OAS will not lose a cent.
The NDP is attempting to confuse seniors. The changes we are proposing will happen long after the budget is balanced. This has nothing to do with deficit reduction. Whether it be through lower taxes, increased funding to fight poverty or simply to make our economy stronger, Canada's seniors are the winners.
Because the motion does not reflect the intent of the government and because it is hopelessly misguided, we simply cannot support it. That is why our government will vote against the motion. I encourage all members of the House to do the same.
Mr. Speaker, I rise in the House today to respond this misguided and misinformed opposition motion.
It is unfortunate that the opposition would attempt to confuse Canadians and misrepresent the intentions of our government with its own narrow political gains. This demonstrates how reckless the opposition is with the facts. I am pleased to have this opportunity to set the record straight.
The changes our government is considering have nothing to do with deficit reduction. In fact, the budget will balanced years before any potential changes to OAS come into effect. I will repeat what the , the minister and the minister of state have already said. No current recipient of OAS will lose any of their benefits because of potential changes, not a penny.
It is unfortunate that the opposition is attempting to use these tactics. It demonstrates how out of touch it is with the reality of the demographic challenges that are facing our country.
Let me focus for a moment on the intentions of our government.
Our government wants a strong and sustainable future for Canadians. We believe Canada's seniors are valuable members of our society. They are more than a demographic or a statistic; they are the individuals who built our country. People like Alex Currie or Elsie Cruikshank from my riding in Simcoe—Grey built our country. That is why our government has made seniors a priority in every budget we have implemented.
Since forming government, we have provided $2.3 billion annually in additional tax relief to seniors and pensioners. This has been achieved through pension income splitting and increasing the age credit. We brought in a new guaranteed income supplement top-up benefit to help Canada's most vulnerable seniors, the biggest increase in the GIS in 25 years, and the opposition voted against it.
This is in addition to the 7% increase in the GIS above regular indications between 2006 and 2008. We invested $400 million over the two years for the construction of homes for low-income seniors. In budget 2008 we increased the GIS earnings exemption from $500 to $3,500, and the opposition voted against that as well.
In budget 2011 we provided $10 million over two years to increase the funding to the new horizons for seniors fund. The funding supports seniors to use their leadership, energy and skills to benefit their local communities. We are supporting positive and active aging through collaborative initiatives, age-friendly community initiatives, physical activity tips for older seniors and fall prevention initiatives, all initiatives that my constituents in Simcoe—Grey utilize.
We appointed Canada's first ever and created the National Seniors Council in 2007 to provide advice to the federal government on matters that related to well-being and quality of life of seniors. We proudly established October 1 as National Seniors Day in Canada.
These actions demonstrate how much we value our seniors, and we are proud of our record.
We will not endanger our seniors' well-being. We want to protect the old age security program and ensure its viability for future generations. That is why we are considering changes.
We are committed to ensuring seniors have the highest quality of life, not just for today but also in a way that will be sustainable for citizens in the future. These are not mutually exclusive goals, these are things done properly and we need to meet both of these goals.
We understand the importance of a secure and dignified retirement for people who have spent their lives building Canada through their hard work, people like John Nell of Collingwood or Tom Walsh in Adjala. The evidence of all the good work our government has done to improve the lives or seniors is evident by improved quality of life of seniors from coast to coast to coast.
The low income rate for seniors has declined dramatically, from 29.4% in 1978 to 5.2% in 2009 under this government, according to Statistics Canada, post-tax low-income cut-offs. The low income rate among seniors in Canada is now one of the lowest among members of the OECD.
However, there is a looming demographic challenge that we can see on the horizon, and that speaks for itself. The World Health Organization says that the average life expectancy in Canada is increasing and is one of the highest in the world, something of which we as Canadians should be proud. It is almost 81 years.
In 2010-11, $35.7 billion in OAS benefits were provided to Canadians. This includes $7.9 billion in the guaranteed income supplement payments for 1.6 million low income seniors. In 2030, the cost to the Canadian taxpayers will escalate to $108 billion a year. A similar trend is observed in the number of recipients.
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.
This is not a local trend. Canada is not alone in its demographic shift, as population aging is a worldwide phenomenon.
According to the United Nations, in 2005, 10% of the world's population was 65 or older.
By 2025, that proportion is expected to reach about 15%, or slightly more than one in six.
This phenomenon is even more marked in developed countries like Canada. Today, one in seven Canadians is over 65. By 2030, less than 20 years from now, one in four Canadians will be over 65. This new reality will have major repercussions for the labour market.
A smaller number of working taxpayers will be supporting a larger number of OAS recipients. We owe it to future generations to leave both a solid OAS program and an affordable tax burden.
Looking at these facts, the coming challenges are clear. What is not clear is the reason that opposition members are attempting to mislead Canadians about the health of the Canada pension plan. The CPP is directly funded from contributions made by employees, employers and the self-employed. According to Canada's chief actuary, it is sustainable for the next 75 years. The reason the CPP is so robust is that the contributions of individuals are invested over their careers, thereby growing the fund to cover the benefits in their retirement. This is a fundamentally different model than the OAS program. The OAS is funded from general tax revenues on a pay-as-you-go basis. This means that all the benefits are paid for by the taxes collected that year. There is no reserve fund. This is why the worker-to-retiree ratio is so important.
This is not just a problem for Canada. According to the latest OECD report, “Pensions at a Glance 2011”, two-thirds of OECD countries are already increasing statutory pension ages, and will do so in the coming decades to respond to this issue.
We must get things right now to ensure that our retirement security system stays strong and sustainable for generations to come. Thankfully, because of the strong economic leadership of the and the , we can begin from a position of relative strength and can afford to make changes over time. Younger generations will have the time to plan and adjust. Older generations, who have planned accordingly, will play by the rules of today and will not be affected. We will address this issue in a manner allowing Canadians to continue to enjoy the quality of life we all cherish. To be clear, any changes that our government implements will provide a lengthy period of notice and adjustment.
In summary, our government is reviewing measures to protect Canadians' pensions in the long term. We will implement any changes fairly, allowing significant notice and time for adjustment. We will not follow the opposition and stick our heads in the sand and pretend that we are oblivious to the obvious problems of an aging society in Canada. For these reasons, our government will be voting against this motion, and I urge all members of the House to do exactly the same.
Mr. Speaker, I will be sharing my time with the member for .
We have heard a great deal today about the OAS, but I would like to take this opportunity to remind the House that just this past June, we all made a commitment to lift every senior out of poverty. To date, the government has taken no action on that NDP motion and has demonstrated complete disregard for seniors living in poverty in Canada. The Conservatives have touted tax breaks and income splitting but neither of those helps those in this country living in or near the poverty line. Tax breaks do not help the poor because their incomes are too low to benefit from any tax break.
Now the government is shifting gears. Instead of ignoring the poor, it is making suggestions that the poor should be the ones to pay for the financial mismanagement of the Conservative government. By suggesting cuts or other such changes to the OAS, the government is chipping away at the security of seniors in this country. Asking the poor to pay while giving tax breaks to the rich is despicable, unacceptable and unfathomable. The rumblings of changes to the OAS show complete disregard for the motion passed unanimously in this House last June. The government is well aware that the OAS and GIS are critical to keeping seniors above the poverty line. The government's own responses to the petitions calling on the Conservatives to end seniors' poverty trumpet how successful the OAS and GIS have been in reducing the levels of poverty among our seniors. I do not understand why the Conservatives are trying to create more challenges. Clearly, they do not even believe their own rhetoric.
Over the past couple of weeks, as the NDP seniors critic I have received many emails and letters from seniors across the country reacting to the 's suggestion that there may be changes to old age security. People are outraged and insulted, but most of all they are terrified of what the future may hold.
I have heard from seniors living at the poverty line, who are wondering how on earth they will make their monthly payments and afford to buy food if their OAS is cut. Seniors have shared their fear that they may have to return to work but they have no idea what kind of job they would do. They have no skills for some of the jobs out there.
I heard from Nortel workers who have not only lost their jobs but also lost significant portions of their pensions and are relying on the OAS when they turn 65 just to make ends meet.
People wrote to me concerned about how this would impact first nations who already live in some of the worst living conditions in Canada. How can they be expected to take yet another hit?
I heard from seniors who have been forced to sell their homes because they do not have the money to keep them. They cannot keep their homes because of the reality of retirement.
Our seniors are worried that any changes to the OAS would push them over the edge into poverty.
I heard from one senior who was actually forced to move to the country, far from friends and neighbours, because he could not afford to live in the city on his meagre pension. For rural seniors, finding work is not an option. Unemployment is high and competition is fierce for the few available jobs, which are often seasonal. Services for seniors are reduced in rural areas, further adding to the burden of making ends meet. Changes to the OAS would be doubly detrimental to them.
People have carefully tried to plan for retirement at age 65. Making changes to the GIS now would have a significant and negative impact on their lives.
Many of those with health problems are already struggling to keep working until they reach age 65. If the government plans to raise the age of receipt of OAS to 67, this would be a significant burden, in particular for those with little CPP or other pension savings and who are forced to rely on OAS and GIS. The people who rely on OAS are for the most part those who have struggled their whole lives. The reason they have not saved is that there is no money to save: every penny has been spent on the necessities of life, in raising kids and getting by.
I had people point out in no uncertain terms that changes to the OAS should have been brought up during the election.
What is proposed by the government is a future that is bleak for retirees. How can the Conservatives pretend, just eight months after the last election, that they were taken by surprise by this so-called crisis in the funding of OAS? The scramble that followed the announcement at Davos and the suggestion that changes will be a few years down the road and seniors now will not be affected is a tactic that will divide future and current seniors.
I also have letters from younger people in their forties and fifties who are concerned about what access to OAS they may have when they are ready to retire. They are afraid for their retirement and they see that the government is looking to divide Canadians.
The politics of division will not work this time. People have written to me and have pointed out the economic benefit of the OAS to all of society. Seniors on OAS spend all of their money in their neighbourhoods. That is money we invested in our economy. OAS is not a burden on the economy. It is an investment in our economy.
A constituent in my riding of has called the government and its actions an abusive act on the average working person. I could not agree more.
I wish to be very clear. The money for OAS is readily available. We have the money to lift seniors out of poverty in the present and the money to address additional expenses the government will face in the future as our population continues to age.
Instead of investing in Canada, the Conservatives chose to saddle the treasury and Canadians with corporation tax giveaways that will not create and have not created a single new job.
Seniors represent one of the fastest growing populations in Canada today. The number of seniors in Canada is projected to increase from about 4.2 million to 9.8 million from 2005 to 2036. With so many more people retiring in the years to come, we need to have the social safety net in place now to avoid dramatic increases in the rate of poverty in the future.
The current government is clearly making the wrong decisions regarding how to care for the increased number of seniors in 2036 and its plan falls far short of what we really need.
We need investment in home care and in pharmacare, increased access to resources, appropriate and affordable housing and investment in geriatric studies. Investment in our communities and in our families are essential.
Our actions now will have an impact on how we treat our seniors in the future. If we fail to invest and make plans for and aging population, it is our own retirement that will be in jeopardy. Future seniors will not have the choice to age in their homes and will not have access to the care that they need. The concerns for the future are very real.
Today, only 38.5% of Canadian workers have workplace pensions and nearly one-third have no retirement savings at all. More than 3.5 million Canadians are not saving enough in RRSPs for what used to be called their “golden years” and 75% of workers are not even participating in a registered pension plan.
Clearly, the notion that retirement savings can adequately account for retirement through purchases of RRSPs does not work and urgent government action is needed.
It should further be noted that private retirement savings are concentrated in a small percentage of families. According to Statistics Canada, 25% of families hold 84% of these assets, while three out of ten families have no private pensions at all.
In total, more than a quarter of million seniors live below the poverty line and, since the mid-1990s, incomes of seniors have reached a ceiling. Now there is a significant gap. Seniors' incomes have increased by about $4,100 while other Canadian households' incomes increased by $9,000. The situation is even more pronounced among seniors living alone.
Seniors have worked hard all their lives, have played by the rules and now they simply want access to the programs and services that their hard-earned tax dollars helped to build. They saved that money, made that money available and now they demand that it be made available to them in their time of need.
Mr. Speaker, I am honoured to rise today to defend the seniors in my riding of Notre-Dame-de-Grâce—Lachine and in Canada. I would also like to thank the hon. member for for introducing this motion, which is very important to me, today.
I would like to start by reading the motion because the government has clearly stated that it is going to reject it. I would like to explain to my fellow citizens what the Conservatives are going to reject today.
|| That this House reject calls by the Prime Minister to balance the Conservative deficit on the backs of Canada’s seniors by means such as raising the age of eligibility for Old Age Security and call on the government to make the reduction and eventual elimination of seniors’ poverty a cornerstone of the next budget.
It seems that the Conservatives want to balance the deficit on the backs of Canadian seniors and that the age of eligibility for old age security will be increased from 65 to 67, as we have heard. The government will not consider the reduction and elimination of seniors' poverty in its next budget and will allow the threat of poverty to hang over Canada's seniors.
On Monday—three days ago—I was in my riding because a round table on seniors was being held. The Notre-Dame-de-Grâce community council called upon the public to help resolve the problems faced by seniors. The main issue was poverty. There are three organizations in my riding that take care of seniors: the Table de concertation aînés de Lachine, the Table de concertation pour les besoins des aînés de l’Ouest-de-l’Île and the Conseil des aînés et des aînées de N.D.G. They are all concerned about the same thing: poverty.
Their action plan involves improving transportation for seniors. Seniors want more affordable transportation since they do not have the means to pay to take the bus. The action plan also involves making seniors aware of existing organizations and services that can provide them with financial assistance. Once again, we see that seniors are having difficulty making ends meet. This is the Table de concertation aînés de Lachine's action plan. Rather than taking the time to read the whole thing, I will simply say that all the reports and mission statements of the consultation committees for seniors in my riding talk about poverty.
Today, we are asking the government to take this into consideration and to help the seniors in our ridings. It is not right to prevent people who worked hard their whole lives from living in dignity.
There were about 20 seniors and 20 observers at the round table I attended on Monday, and they were all scared. The government keeps saying that we are trying to scare the public. On Monday, my constituents did not know that we were going to have this opposition day today. It was not the opposition that was scaring them; it was the government's proposal. To tell older people that their old age pension is going to be delayed by two years, that is serious and very negative.
The Montreal Health and Social Services Agency has released a number of statistics on this recently. For instance, the number of seniors living below the poverty line is proportionally higher in Montreal than anywhere else in Canada: 36% of seniors live below the poverty line, compared to the Canadian average of 19%. That is almost double. Furthermore, 48% of female seniors without a spouse tend to have a low income. The use of food banks by people over 60 has doubled since 1995.
People come to my office and ask me how I can help them. All I can say to them is that, unfortunately, the government simply dismisses any motions that could help seniors in a tangible way, like the one we are presenting today.
I repeat: 48% of female seniors without a spouse tend to have a low income. As we know, most women over 55 spent most of their lives at home, raising children. Their husbands were the bread winners. So they have less income. More women than men have a low income, because they did not contribute to CPP, a private savings plan or an RRSP, or they receive nothing from former employers.
They are expecting the government to thank them for founding our society, for having children and for building our communities. Instead, they are abandoned at retirement age. I cannot accept this. I want the government to listen to us and to really read the motion instead of saying no right from the outset. I will read the motion once again. It is shocking to be told that it will be defeated.
|| That this House reject calls by the Prime Minister to balance the Conservative deficit on the backs of Canada’s seniors by means such as raising the age of eligibility for Old Age Security and call on the government to make the reduction and eventual elimination of seniors’ poverty a cornerstone of the next budget.
What I cannot accept is the idea of increasing the OAS eligibility age from 65 to 67. Throughout the last session, the government tended to pass the buck to the provinces to balance its budget.
In my riding, which is part of Montreal, many 60- and 61-year-old seniors are on social assistance and must wait until they are 65 to receive the old age pension. Today, the provinces are being told that the eligibility age will be pushed back to 67 and that they will have to provide social assistance to these people for two more years.
An organization in my riding, the Community Economic Development and Employability Corporation (CEDEC), published a report entitled A Profile of English-speaking Mature Workers Residing in the Greater Montreal Area. In Montreal, we must deal with the challenge of anglophones who have difficulty finding work. Imagine someone who only speaks English, is 62 and is looking for work. That is tough. I understand this and I even understand the employer's point of view. I cannot deny that there may be less incentive to hire a 62-year-old who will be retiring soon. These people have a great deal of difficulty finding a job, and CEDEC works hard to help them with their job search. Now, we are telling these people, who are having a hard time and are forced to go on social assistance, that they will have to wait two more years because they have a hard time finding a job and that the Canadian government is abandoning them by increasing the eligibility age for OAS.
I have a very hard time accepting that. I want to know how this government, which is supposed to be closer to the people—or so I would hope—can refuse to help seniors who have contributed to society their whole lives.
Today I am appealing to the government's human side. I am asking the government to reconsider its decision and support the motion moved by my colleague from . I want to be sure the government understands that we are talking about living with dignity, a concept we have been hearing about for a long time. We have been hearing more and more about dying with dignity. Dying with dignity is not just about the last few months of life one spends in a hospital; it is about being in one's sixties and finding life a little more difficult, finding it a little harder just getting around in the winter. We all know what winter is like in Quebec. Last Wednesday, the farm women's association I visited told me that there were not many people in attendance because of the winter. Seniors have a hard time getting around when it is icy, so it is difficult for them to have a social life.
We are asking the government to help these people, but it only replies that it needs to reduce the deficit in its next budget, that it has goals to achieve between now and 2015, that it has cut taxes, that it gave money to its friends in big business and that it is really sorry it cannot help seniors because it has to balance its budget instead.
In closing, I would ask the new government to reconsider its position and support my colleague's motion.
I hope to soon be able to tell my constituents that the government has listened to reason and has decided to help them.
Mr. Speaker, I will be sharing my time with my honoured colleague from .
I appreciate being invited to participate in the debate regarding the old age security program, or the OAS, as it is commonly known. This discussion provides the perfect context to clear up some of the confusion, the miscommunication and misinformation that surrounds the issue of seniors' poverty.
I would like to start by assuring everybody that the Government of Canada recognizes financial security as a factor that has an obvious impact on our seniors' quality of life. As the has said, any seniors currently receiving benefits as well as those nearing retirement will not be affected.
Our government is vigilant on this issue and we truly appreciate the contribution seniors have made and continue to make in building our communities in Canada.
A key priority for the Government of Canada is to help Canadians prepare for and achieve financial security in their later years. We know that seniors are concerned about the economy and maintaining their standard of living in retirement. That is understood. This is an issue that has come into even greater focus in light of the demographic shift that we are experiencing.
It is no secret the Canadian population is aging. Events around the world and our aging population make it clear that the government needs to make responsible decisions to ensure that social programs are sustainable.
In 2011 the first baby boomers reached the milestone of turning 65. At the same time, Canadians are living much longer than ever before. Canadians can enjoy one of the longest life expectancies in the world at close to 81 years old. Taken together, these phenomena are profoundly affecting our country. The result is that the age structure of the population is changing so that there is a higher proportion of senior citizens.
There is a demographic projection we will hear quoted many times today that in less than two decades, close to one in four Canadians will be over age 65. To put it into some context, the proportion of seniors in Canada currently stands at one in seven.
There are obvious financial implications to living longer, as more seniors begin to rely on retirement income for longer periods. As a government we have done a great deal to ensure that Canadians have financial security in their later years. As I stated before, it is one of our key priorities.
The most important financial support we provide to seniors is through the public pension system. This system is highly regarded internationally, and for good reason. It has played a very significant role in reducing lower income rates among seniors. In fact, the incidence of poverty among seniors in Canada has dropped from a rate of 21% in 1980 to 5.2% in 2009. This is one of the lowest rates in the world.
We describe Canada's retirement income system as being made up of three pillars. The first pillar is one that dominates our discussion today, the OAS. The Canada pension plan, CPP, is the second pillar. The third pillar consists of personal savings, including employee pensions, registered retirement savings plans, tax-free savings accounts, as well as other savings and investments.
As members are likely aware, the government is seeking to build on the third pillar. To do this we recently introduced Bill to create the legislative framework for the establishment of pooled registered pension plans, PRPPs. PRPPs would provide the majority of Canadians who do not have workplace pensions with access to well-registered, low-cost, private sector pension coverage.
Let me revisit the first two pillars, OAS and CPP. Together these two public pillars are designed to provide a modest base upon which to build additional retirement income. This year Canadians will receive close to $72 billion in benefits through the Canada pension plan, old age security and the guaranteed income supplement, GIS.
It is true that these benefits do not come automatically. All Canadians have to apply for them. That is why we have taken steps to inform Canadians about their eligibility for these benefits and to help them through the application process.
Through HRSDC and Service Canada, our government is using direct mail, information campaigns, partnerships and community organizations to reach seniors who may be eligible for OAS and GIS.
Some of these efforts are aimed at seniors who are particularly hard to reach, such as those who are homeless, those who live in remote communities, immigrant seniors, aboriginal seniors, seniors with disabilities and those who do not speak either English or French.
We issue more than 600,000 application forms to Canadian seniors who are not yet receiving their CPP or OAS to encourage them to apply. Every year, we mail out thousands of pre-filled applications to people we think may qualify for GIS and the target group changes every year. Most GIS recipients now only need to apply once in their lifetime and have their benefits automatically renewed simply by filling out their annual tax return. As members can see, we are making great efforts to reach out to low-income seniors and to inform them about their benefits.
Speaking of benefits, I will speak a little more on the GIS.
As I said, the GIS provides extra support for seniors with little to no income and has a great success in reducing poverty among seniors. Our efforts to combat senior poverty does not stop there. In our last Speech from the Throne, we pledged that the government's low tax plan would permanently enhance benefits for Canada's most vulnerable seniors. We honoured that pledge last year by providing the largest GIS increase in 25 years. This measure will help Canada's lowest income seniors out of poverty. More than 680,000 low-income seniors are benefiting from this increase. These seniors are now receiving additional GIS of up to $600 for a single senior and up to $840 for couples.
In 2008 we increased the GIS exemption from $500 to $3,500. The earnings exemption allows low-income working seniors to keep more of their hard-earned money. This year we are providing more tax relief for seniors and pensioners, saving them $2.3 billion.
The measures I have just outlined demonstrate that the Government of Canada is taking concrete steps for seniors. We are actively helping Canadians prepare for and achieve financial security in their latter years. This is an ongoing effort for us because it is a key priority.
Mr. Speaker, the motion tabled by the hon. member for suggests that the government is turning its back on Canadian seniors. This is absolutely false.
This government is doing exactly the opposite. We are standing up for Canadian seniors. This government remains committed to ensuring the retirement security of all Canadians. Indeed, let me assure the member that our government will ensure that seniors maintain all the benefits they currently receive.
Achieving this goal, however, will not happen through wishful thinking. Our aging population will have profound implications on all aspects of Canadian life, including our retirement income system. That is why this government is determined to ensure the long-term strength of our economy. Only in this way can we protect the well-being of both current and future generations.
For the benefit of the House, I would like to elaborate on how the government is responding to the challenge of a demographic shift. In particular, I would like to set Canada's challenges into an international context. As members know, there are three pillars to Canada's retirement income system. There are the old age security program, the Canada pension plan and, finally, personal savings, which include employer pension plans.
There are no concerns with the viability of the Canada pension plan. In the 1990s, in light of our aging population, the government made major changes to ensure the program's financial sustainability. As a result, the CPP is on a secure and sustainable path.
There are, however, major concerns with the affordability of the old age security program. Just as we once refined the Canada pension plan to protect future generation, the time has come to examine the OAS. To do anything less would betray the hopes and dreams of Canadians for a secure and dignified retirement. The stakes are high and the government will not gamble away the economic security of older Canadians by failing to act.
Let me reflect first on why reviewing measures to protect OAS in the long term are so necessary. Our population is aging. Over the next 20 years the number of Canadians over the age of 65 will jump from 4.7 million to 9.3 million people. That is a staggering increase in a relatively short period of time, and it comes with a high price tag. The annual cost of the OAS program is expected to triple between 2010 and 2030, from $36 billion to $108 billion.
At the same time, as our senior population is rising, our working population is falling. This is the crux of the issue. Unlike the Canada pension plan, the OAS is financed primarily through taxes on working people. By 2030, the number of taxpayers for every senior will have dropped in half, from four to two. Fewer people working means less revenues and higher costs.
This is not a recipe for sustainability. Unless we act decisively and responsibly, the old age security program will impose an increasing burden to future generations, which in turn challenges the ability of the government to continue delivering its important benefits to our seniors. That is why our government is determined to take balanced and fair action now to protect the well-being of current and future seniors. This government will take responsible actions in recognition of the changing demographics so we can have sustainable programs to support all Canadians in the future.
I stress the word “fair”. Any changes to the OAS program would not affect current retirees or those close to retirement. They would also give others sufficient time to adjust and plan for their retirement. Let me be absolutely clear. People receiving OAS and GIS right now will not lose one cent.
Canada is not the only country with an aging population. It would be useful to examine how other industrialized nations are responding to economic stresses on their retirement income systems and what we can learn from them.
Take the case of the United Kingdom. In 2011 the U.K. proposed to accelerate changes to pension reforms that were approved a few years ago, as events around the world made it clear that governments needed to make responsible decisions to ensure social programs remain sustainable. For Canada, this reaffirms our belief in a balanced, fair and responsible action. Any changes to our old age security program will be well planned and gradual. We will work hard to get it right the first time.
I will use Australia as an example. You may know, Mr. Speaker, a review panel recommended increasing the age of eligibility for the old age pension from 65 to 67. Naturally the proposals provoked much debate. What is interesting, however, is that seniors groups actually supported an increase in the retirement age. They understood, given the country's aging population, that changes were inevitable. Canada can learn a lot from the Australian experience. The government is convinced that Canadians will understand what is at stake and therefore support reforms to our old age security program. No doubt today's debate will be the first of many. Canadians appreciate our country's fiscal realities, unlike the opposition parties that continue their campaign of fear, with half truths and disingenuous comments.
Japan's experience also shows why public awareness is so important. Back in the 1990s, a major study reached a significant conclusion. Many Japanese in their 50s believed that public pensions would not be around for their retirement. Given this clear understanding of what was at stake, there were major concerns after Japan raised the age requirement for a basic public pension.
Closer to home, the United States passed pension reforms back in 1983 and is considering new increases in the retirement age. A recent proposal is being supported by reform advocates and actuaries for one simple reason. Since Americans are living longer, they need to work longer. This, too, is a lesson that Canada should take to heart.
The opposition falsely accuses the government of fighting the deficit on the backs of our country's seniors. Unlike the Liberal Party before us, we will not cut transfers to individuals or provinces to balance our budget. This is not about deficit reduction. This is about securing the pensions of Canadians for today and tomorrow. We cannot put our heads in the sand and ignore the demographic realities facing us. We must meet the challenge square on and protect our old age security program as other countries around the world have protected theirs.
As we move forward, our government will work to protect the financial security of all Canadians, while ensuring that the social programs remain sustainable for the long term. That is why I will not support this motion and I recommend that all members of the House do likewise.
Mr. Speaker, I will be splitting my time with the hon. member for .
I believe we are at a watershed moment in our new 41st Parliament. We have now experienced the first of what I am fearful, and we talk about fear a fair bit, will be one of the many hidden agenda items of the Conservative government.
There was never any discussion in any of the past election campaigns about the need to raise the age at which people receive old age security. If there is a problem, and we do not believe there is, there has never been any discussion among the Canadian people about this problem. Baby boomers, of which I am a member, have been around since I was born in 1952, which, coincidentally, was the year the old age security system actually started.
We all know we will retire and now the Conservatives have created a crisis in order to achieve a different agenda, in order to start rolling back the social safety net of Canada. This is the first step and it is a dangerous first step. We will see more of this in the future I am afraid.
As a wag in Halifax has said, the opened a can of worms with a Swiss army knife and once again the most vulnerable members of society must pay for the excesses of the government. Seniors are just one of a long list of members of our society who, according to the , must accept less from government and should not expect to keep a reasonable standard of living when they reach retirement.
This crisis has been created as a result of a temporary blip caused by baby boomers. It is temporary, so why not find a temporary fix, like perhaps rescinding the corporate tax cuts that have taken so much out of the government treasury?
The government came to office with an enormous structural surplus and it is gone. Not only is it gone but, in their term in office, the Conservatives have created the biggest deficit ever in Canadian history. Now they are saying that the cupboard is bare and that seniors will need e to pay for it. That is not what the NDP believes. We do not believe in going backward. We believe in moving Canada forward, and this is moving backward.
The and the government also tell us not to worry because the Canada pension plan is solvent and that it will not be touched. What they have forgotten to tell us is that Canada pension is inexorably intertwined with the old age security system, as are all the pension plans in this country, private and public. They all have what is called a normal retirement date and they all require that there be some other form of assistance for the poorest of Canadians and the middle class of Canadians, that being old age security at age 65.
Once we step into the 67 world, as the appears willing to do, all of those systems must move to age 67. It will not just be old age security, because that would leave an enormous gap between what all of the other pension, retirement and income systems in Canada already have. All pension plans are based on a normal retirement age and almost, without exception, they are all at age 65, not 66 or 67. Moving away from that would put enormous pressure on other plans to move in lockstep.
Many employees have planned their careers around retirement at age 65. For those whose total pension income pays less than $16,000, they count on the guaranteed income supplement to top-up their pension to a reasonable amount. For seniors who have only the old age security to count on, most of them women, it is the difference between abject poverty and living at the poverty line. However, the government is telling them to suck it up buttercup, that they should either continue working past retirement age or go on welfare for the next two years.
We do not agree that we should drag this country backward when we have worked so hard to protect the systems and security measures that are in place now.
What if those individuals were not able work another two years, as the suggests? Both the federal government and the Government of New Brunswick allow forced retirement at age 65. All provinces allow forced retirement in jobs that require large physical or safety requirements, such as firefighters. Employers can fire people for being too old. How would people be able to work past the age of 65 when several levels of government suggest that they can be fired at age 65? Many employers work very hard to discourage people from working past 65.
I am aware of that from my career as a union rep. As soon as the Province of Ontario eliminated forced retirement at age 65, employers went through hoops to make it difficult for people to stay on past the age of 65. They changed benefit plans, income plans and tried to make people work for less, all to try to force them to leave or quit at age 65. Why? Because the kid coming out of school will work for a lot less. That is the kind of Canada the Conservatives are building.
The 's proposal largely affects lower and middle income Canadians. This does not bother the famous 1%. They have other income beyond CPP and OAS. Their OAS is clawed back and they never qualify for GIS, so they would not be affected by the 's proposals.
As for the guaranteed income supplement, it is not paid to those who already have reasonable pensions. The GIS goes to the 1.7 million seniors today who otherwise would live in abject poverty. That is one in three seniors in Canada. The fastest and easiest way to cut government spending on items like the GIS is to raise the minimum pensions. If Canada pension goes up, the GIS bill goes down. There is no need to raise the retirement age to 67 if the Canada pension plan can pick up the slack and, surprise, surprise, there would be no cost to the treasury.
There are significant impacts on the provinces that no one is talking about. Welfare stops at age 65. What happens between ages 65 and 67? Provincial long-term disability is not paid past age 65. Provincial workers' compensation and WSIB is not paid past age 65. This unilateral proposal by the to raise the retirement age to 67 would create significant holes in provincial social assistance programs, costing millions of dollars.
Further, most private pension plans take into account OAS payments. They are interdependent. Many of them have what they call the level income option where individuals can opt for a different retirement age based on the knowledge that they will get OAS. All of those deals would be gone.
Those holes in the private sector plans would create significant costs for employers and force extra costs on the provinces. All private benefit plans depend on retirement at age 65. Private long-term disability plans all end at age 65. There would be enormous costs to employers to do this.
Has anybody talked about the domino effect of what you are proposing? What you are proposing would actually cause an enormous cascade of costs on employers, on governments and on individuals. It is not just future seniors. I know you are musing, “This is only those younger people who don't really think about retirement right now. Don't worry, we won't touch it for several years yet”.
Mr. Speaker, I am pleased to rise and speak for a few moments in support of the motion. I thank my colleague for bringing it forward and the member for for some of the valid and very interesting points he has made. One thing he talked about persuasively was the cascading effect this potential change will have on benefits that have been negotiated by Canadians based on a retirement age of 65. That is extremely important for the government to consider.
I have been noting the government members' responses to the concerns raised on this side. They have suggested on most occasions that it is the official opposition that is scaring seniors and raising fears about things the government is purportedly going to do. Yet it was the , when he was hobnobbing with that august body in Switzerland, the World Economic Forum, who pontificated about the significant social transformation he would bring about in this country, a transformation in which the retirement income system would play a major part.
It is interesting that the , the leader of the Conservative Party, and none of the members opposite talked about that just a few short months ago when running in the election. None of them said to Canadians, including Canadian seniors, to vote for them to bring about a major social transformation, including cutting pensions to senior citizens. Whether now or in the future, it is all about cutting resources to seniors. They did not say anything about that. But here we are less than a year later and the government is starting to drop the hammer on seniors. Rightly so, my constituents are calling and asking what is going on. They are concerned about this.
The and members of the government benches are talking about changing the OAS, changing a system that often keeps people from the breadlines because of their insufficient income and who live below or very near the poverty line, seniors who as a result of health concerns and of being downsized or outplaced lost their jobs at age 62 or 63 and are trying to hang tough until age 65 when they will get a bit of a return from the contribution they have made to society. Now they are being told that the government is proposing to change that system, without it providing any details, without it having any discussion and without any consultation. They have a right to be concerned because we do not know for sure what the government is going to do.
My responsibility as the MP for , and as my colleagues have been doing today and over the last couple of days, is to ask the government pertinent questions about why it is heading in this direction. It does not matter whether the Conservatives say they are not going to touch the system or seniors now but somewhere down the road, because a senior today and a senior tomorrow is still a senior. It is still about a person trying to make ends meet, who has contributed to our society, to our country, and made sacrifices and raised families and made this country into what it is. It is those people who are being asked by the government to carry the burden. Frankly, I do not think that is right and my colleagues agree with me.
I will talk about a couple of things the government mentions. Here, I am shocked at the way some commentators have jumped on the bandwagon to say that the system is not sustainable, that the demographics of our aging population are such that we are just not going to be able to afford it. They say this when talking about OAS, which makes up 2.7% of the gross domestic product now, a mere fraction of total economic activity in this country. The huge increase they are talking about is from 2.7% to 3.1% of GDP by the year 2031. That is the impact it is going to have relative to gross domestic product.
Some commentators have been using dollar figures, without taking into consideration inflation and the overall budget and overall revenues of the government in 2031, when suggesting this is a burden we cannot afford. That is bogus. Economists have said we need to make the comparisons on the basis of the percentage, as it relates to overall expenditures and the ability of the government to pay its bills.
It is the same with the deficit and debt, which are reviewed by rating agencies on a per capita basis and what we are able to handle on that basis. Are we able, as an economy, to pay our debts? That is the equation, and that should be the equation here. I say shame on those who are suggesting that we cannot afford to pay seniors the princely sum of $509 a month. Frankly, it is shocking.
The OECD, the Organisation for Economic Co-operation and Development, has indicated that total public social expenditures on pensions as a percentage of GDP are estimated to be 4.7% in Canada. The average in other OECD countries is more than 7%. It has been suggested that we should look at what has happened in Europe and in the United States, where the sky is said to be falling. There is no question that some of those countries have been experiencing some significant economic pressures as a result of problems in the financial sector. However, in some of those countries, such as Italy, Germany, and Poland, social expenditures on pensions as a percentage of GDP are more like 11% to 12% or, in some cases, as high as 14%, compared to 4.7% in Canada.
Therefore, let us make relevant comparisons and not scare people. Let us actually recognize what we are facing.
The other fact is that none of these changes were indicated to Canadians on May 2 as coming down the pike. No one talked about there being a democratic crisis and that these changes would need to be made. Anyway, this government did not, back on May 2.
I understand there are things that need to be done to ensure that we pay our bills. I say that we should ensure that profitable corporations in this country start paying their fair share. We recognize that the money we are proposing to spend on F-35s can be better spent on seniors, that the money we are going to spend, the billions of dollars, to lock more Canadians up in prisons can be better spent looking after seniors today, tomorrow and into the future. That is the kind of choice this party, this opposition, is making. It is time the government recognized that it has a commitment to seniors and that it had better start living up to it.