Mr. Speaker, I will be sharing my time with the .
I am pleased to join in the debate on old age security and Canadian seniors.
Our government is committed to ensuring retirement security for all Canadians. Canada does not live in a glass house. Canada's demographic state is part of a worldwide phenomenon in the developed world where families are having fewer babies. We cannot afford to put our heads in the sand and hope the challenge of financial sustainability will go away. As a Globe and Mail editorialist said yesterday, “The challenge of ensuring that the retirement income system and other supports are on a secure footing for the next generation is one that no government can avoid.”
There is no doubt that Canadians are living longer, healthier lives than in past generations. The average Canadian can now expect to live to age 81. By 2025 our life expectancy will probably increase by another two years. The bottom line is this: Canadians will be relying on retirement income for longer periods of time. Therefore, helping Canadians prepare for and achieve financial security in their later years is an absolute priority for our government.
Let me outline to members of the House the basic three pillar structure of Canada's retirement income system. The first two pillars are the old age security program and the Canada pension plan. These public pension plans provide a modest base with which Canadians can build additional income for retirement. The third pillar consists of personal savings and RRSPs, as well as employer pension plans. Ideally the combination helps provide a standard of living similar to pre-retirement levels.
Canadians will receive close to $72 billion from Canada's public pension system this year.
The first pillar, the old age security program, OAS, provides a basic level of income to seniors. It recognizes the contributions they have made to Canadian society and the economy. It is also intended to alleviate poverty. The old age security program is funded from general tax revenues on a pay-as-you-go basis. There is no reserve fund. By 2030 the number of OAS beneficiaries will nearly double from 4.7 million in 2010 to 9.3 million in 2030. Program costs could rise from $36.5 billion in 2010 to $108 billion in 2030.
Right now there are four working age Canadians for every senior. By 2030 this will shrink to two. Can two working age Canadians support the pension requirements of one senior? This is the issue. Let us be serious. Can we expect to saddle future generations with that burden? Should we not build an adjustment period so people can benefit from their retirement benefits later in life?
To be eligible for the basic OAS pension, a senior must have lived in Canada for at least 10 years after the age of 18. A person who has lived 40 years in Canada since the age of 18 is eligible for a full pension.
Finally, the guaranteed income supplement, GIS, is an income-tested monthly benefit paid to OAS pensioners with little or no income. Along with the OAS pension benefit, the guaranteed income supplement ensures that seniors' overall income does not fall below a specified threshold.
Under budget 2011 our government introduced a new GIS top-up of up to $600 for single seniors and $840 for couples. This measure is improving the financial security of more than 680,000 seniors across Canada. The GIS top-up, like other OAS benefits, is indexed quarterly to reflect increases in the consumer price index. We have also enabled GIS recipients to earn up to $3,500 without it affecting their benefit amount. This allows seniors to work a bit if they wish to supplement their pension benefit.
The numbers speak for themselves. The rate of poverty among seniors has decreased from 21.4% in 1980 to a rate of 5.2% in 2009. Canada has one of the lowest rates of senior poverty among the countries in the Organisation for Economic Co-operation and Development. It is lower than that of Denmark, France, Germany, the United Kingdom and the United States. Poverty among seniors in Canada is lower than poverty among the general population.
The second pillar of the Canadian retirement income system is the Canada pension plan, which is a contribution-based earning-related social insurance program. It ensures a measure of protection to a contributor and his or her family against the loss of income due to retirement, disability or death.
There are three kinds of Canada pension benefits: first, retirement benefits, which include the retirement pension and the post-retirement benefit; second, disability benefits, which include benefits for contributors with disabilities and for their dependent children; and third, survivor benefits, which include the death benefit, the survivor pension and the children's benefit. The death benefit is a lump sum payment to the person's estate that may help with the cost of a funeral.
The Canada pension plan operates throughout Canada, although Quebec has its own similar program called the Quebec pension plan. The administrators of both plans work closely together to ensure all contributors are protected. Outside of Quebec, the majority of working people in Canada over the age of 18 pay into the Canada pension plan. The employee pays half the required contribution and the employer pays the other half. People who are self-employed pay both portions. No tax dollars are involved and the amount paid is based on a person's salary. In the case of the self-employed, it is based on net income. Contributions are important because they determine if workers and their families are eligible for benefits and in calculating the amount of that benefit.
Canada also has reciprocal pension agreements with certain other countries, so if a Canadian has worked in another country, they may receive pension or benefits from either country and Canadians who live outside of Canada can receive their CPP benefits while outside of Canada. All CPP benefits, except for the death benefit, are adjusted in January of each year and there is an increase in the cost of living as measured by the consumer price index.
The CPP is a secure plan. It is internationally regarded as a model for its sound structure, governance and long-term stability.
The 2009 report of the chief actuary projected that the CPP will be sustainable for the next 75 years. This calculation factors in the demographic changes that we are likely to experience in the foreseeable future such as an increase in life expectancy, the retirement of the baby boomers and so on.
We can be proud of what we are doing to ensure financial security for our senior citizens. However, what is necessary at this point is also to reinforce the sustainability of the first pillar of our pension retirement system, namely the old age security program. We owe future Canadians this element of security. That is why I call on all Canadians and all members of the House to support measures that would reinforce the financial sustainability of the old age security program.
Let us not leave the burden of financing to future generations of Canadians. Let us ensure that any changes are done with substantial notice and adjustment so current retirees or those close to retirement are not affected. Let us give Canadians time to adjust and plan for their retirement. More important, let us not bury our heads in the sand by supporting the motion today.
Finally, let us help shore up the first pillar of Canada's retirement system, the old age security system, so Canadians can build toward a secure future. This is why I cannot support the opposition's motion.
Mr. Speaker, first, I congratulate my colleague from for his commitment, as this Conservative government has, to our seniors. I also thank him for his ongoing support of our veterans and their families.
I am pleased to rise today in this House to reaffirm the Conservative government's commitment to our seniors and retirees. Since the election on May 2, members from Quebec have had an opportunity to rise in this House to preserve the old age security program, index it and enhance it with the guaranteed income supplement. The Conservative members from Quebec and the ministers rose in this House to support these measures, maintain old age security and improve it.
Unfortunately, the same cannot be said about the NDP and Liberal members, who not only remained seated, but also opposed any increase in income for our seniors. The guaranteed income supplement is $600 per single senior and $840 per couple. These are measures that the Conservative members from Quebec supported because we want to be able to provide the best for our seniors, especially the most vulnerable among them. It must be said that as Quebec members, we are here to support our seniors. We are going to continue to do so on this side of the House with our Conservative government.
There are changes on the horizon. Things evolve, just as they do in every sphere of life. These changes will affect everyone, the young and not so young, governments, businesses, organizations and associations. It is therefore our duty as elected representatives to anticipate these changes and act now in a responsible manner to ensure a bright future, and not put our heads in the sand as the opposition is doing and engage in fear mongering.
Canadians are having fewer children—that is a fact—but they are living longer and in better health than previous generations. This is a good thing. It is a fact and the data support it. Over the next five years, for the first time in our country's history, there will be more over 65-year-olds than under 14-year-olds, according to Statistics Canada. Over the longer term, it is estimated that by 2030, one out of every four Canadians will be over 65, compared to one out of seven today. A quarter of the population will therefore be 65 or over in 20 years, and I will be among them.
Aging populations are a global phenomenon. They can be observed in the big western democracies; Canada is by no means alone. If we compare ourselves to other countries, Canada’s population is among those that are aging the fastest.
Last year, the first baby boomer celebrated his 65th anniversary. While baby boomers head towards retirement and the fertility rate remains relatively low, the consequences of an aging population are, and will be, increasingly felt. The stakes are clear: there will be fewer and fewer young people, and there will be more and more seniors who will want to take advantage of services. As a result, there will be fewer young people to take over from their parents and grandparents, especially in the labour market. With fewer people in the labour force, the percentage of the total population that is working and able to finance public services and programs will drop. That is a fact, and it is important to be well prepared in order to address it.
Once again, it is worth quoting the figures. Today, in Canada, there are four workers for every person over 65. In 2030, it will no longer be four workers, but two. From that point on, the question will be how to provide a much larger cohort of retired Canadians with financial security without placing an excessive burden on a dwindling number of workers. In other words, how will the welfare of today's generations be assured without compromising that of future generations?
Many countries around the world are asking themselves exactly the same question. Some have already taken steps to mitigate and manage the repercussions of demographic changes on present and future generations as fairly as possible.
We know that the portion of revenue we invest in programs funded by the state to provide Canadians with financial security when they retire will be growing.
I am not talking about the Canada pension plan and the Quebec pension plan, which are funded by employers and employees. The Canada pension plan is on solid footing, according to Canada’s chief actuary, but this did not happen all on its own. Major changes were made to the Canada pension plan in the late 1990s to ensure that it would remain sound as the population ages and to ensure that it would be sustainable in the long term.
However, there have never been reforms to old age security, and it is paid for entirely out of taxes. What did previous governments do?
This is an important nuance. The Canada pension plan, which is well funded, was reformed. Old age security, which is funded by taxpayers, has never been reformed. It is therefore funded 100% out of income taxes, and all Canadians receive it at age 65. That means that the taxpayers of today are paying for the retirees of today, and the taxpayers of tomorrow, who will be less numerous, will be paying for the retirees of tomorrow, who will be more numerous.
It must also be pointed out that when old age security was created in the 1950s, life expectancy was 66 years for a man and 71 years for a woman. Half of Canadians received it at age 70.
Today, Canadians receive it at age 65; men are living 10 years longer, on average, and women are living 12 years longer, on average, than in the 1950s. This is good news. Fortunately, life expectancy is still increasing, and people’s quality of life, in particular their health, has continued to improve in recent decades. However, the old age security program has not adapted to these new facts of life.
As well, and again according to the chief actuary, who provides us with reliable, sound data, it is anticipated that old age security program spending will increase from $36 billion in 2010 to $108 billion in 2030, the year when the number of baby boomers who have reached the age of 65 will peak.
That said, we have been clear and we will be clear again tomorrow regarding pension programs like old age security: yes, seniors will continue receiving their benefits.
We are going to preserve old age security and index it. We, the Conservatives, have increased it, with the guaranteed income supplement. Nearly 1.9 million Canadians benefit from the increase in the guaranteed income supplement, thanks to our government. The same is true for those who are about to retire: they will not be affected.
People who are receiving old age security benefits will not lose a cent. In the long term, future generations expect that we will ensure the viability of the system so that they too can benefit from the plan, which is reasonable, and so that the most vulnerable Canadians are able to benefit from it.
It is time to make informed choices, because we still have several decades ahead of us. Inertia and the status quo, as the opposition parties are proposing, will take us to a harsh reality that taxpayers will have to face. That is irresponsible. That is why we have to address this issue with fairness and justice, with intergenerational equity, to ensure that our social system and social safety net are sustainable.
Canadians will not allow themselves to be duped by the opposition. They know our government is acting responsibly for the retirees of today and for retirees of future generations.
Mr. Speaker, I would like to note that I intend to share my time with the hon. member for .
Today, I have the unfortunate duty of rising in this House to denounce the government’s actions in an area that is of great concern to the NDP: the rise in poverty among our seniors. When I was elected, I was glad I would be working together with all members of this House, regardless of their political affiliation, with the goal of imagining a Canada where every individual would have the guarantee of a minimum quality of life, and where people can live with respect and dignity.
Our seniors, the people who built this country, who fought tooth and nail to provide us with a secure future and create a social safety net, where individuals care about one another, are disillusioned today. My constituents are unhappy with the proposals made by the government last week. I am outraged at the unspeakable lack of respect and courtesy the government has shown for the public. I think the decision to tell us about things that are to be done in our country in a speech given in a foreign country, to strangers, with no prior consultation with the Canadian public, is despicable. It shows a lack of courage.
Our seniors, people who have lived through economic hard times and through disastrous conflicts, chose to help one another, to work together and to take responsibility for one another. They chose to invest in people so that together, they could meet the challenges ahead of them. That decision meant that more people had access to education, better health and better living conditions. The old age security and guaranteed income supplement programs were developed to ensure that no senior would be in need, regardless of how vulnerable their finances and their health might be.
These programs were not developed for just one generation; they were to become a cornerstone of Canadian values. Growing numbers of seniors are now living below the poverty line, and their families cannot bear the economic burden of looking after their parents because they are having trouble making ends meet themselves. Rather that ensuring that we care for one another and bringing people together, the government is dividing us. I think this is very sad, when we look at the dreams our seniors had for us and how much they invested in those dreams. The government is not consulting and is driving blind, without guideposts and without an accurate knowledge of the opinions of the other citizens of this country who deserve to be heard. I see no indication of any such respect in what the government is doing.
The figures are blatantly clear: disadvantaged seniors who are currently receiving old age security and the guaranteed income supplement have less than $15,000 a year to live on. The poverty line in urban communities is $18,000. I think we can make the connection. At present, disadvantaged seniors are living in unacceptable conditions, and that situation is not going to improve, because the cost of living is going up every month. I regularly hear the horror stories that my senior constituents witness or experience. Every month, they have to make impossible choices between paying the rent, buying food, paying for their prescription drugs and investing in a means of transportation.
There are simple solutions to relieve this burden, such as investing in social housing and public transit infrastructure. In Quebec, there is already a shortfall of 50,000 affordable housing units, and the situation is not getting any better.
Cuts to old age security and the guaranteed income supplement are also a concerted attack against gender equality. The median income of senior women is only two-thirds that of senior men. Given that Canadian women do not always benefit from pay equity, this discrepancy will continue to exist for a number of years. These women are our mothers and grandmothers. They made sacrifices to give us a better future.
I find this government's lack of respect for them revolting and intolerable. I am asking the and the directly what measures they have planned to combat these inequalities and why they think that cutting services will help senior women living in poverty. The role of each government is to make choices that reflect its vision for our country. The current government is offering us a disastrous vision.
The government decided to invest billions of dollars in jets.
With the omnibus bill, huge costs will be downloaded onto the provinces—costs that will endanger their financial health—for an unproven program. The government gave large corporations billions of dollars in tax breaks without any guarantee of job creation. It is giving billions of dollars in subsidies to oil companies, which are part of the richest industry in Canada.
Our seniors are a good investment. They deserve subsidies as large as the ones given to big business. Seniors are active members of our community who have already given so much and who still have a lot to give if we help ensure that they have acceptable living conditions.
The NDP has a more positive vision of our future. In fact, we want to double the pension plan in order to guarantee that no senior has to live in poverty. That is why we tabled a motion on this subject in June. I find the fact that the Conservatives are now backtracking to be hypocritical, given that they originally supported this motion. It is a complete betrayal.
Organizations in my riding are very upset about this step backward. Gilles Tremblay, president of the Blainville 50+ centre, said:
Seniors are having to downsize their living quarters to make ends meet. People cannot live comfortably or for long like that. We have contributed to our communities, and we can continue to contribute our experience. We have to be given the means to do that.
Josée Collard, who is in charge of La Popote à Roland in Blainville, which has been helping seniors in need for over 35 years, said:
As the leader of a group of Blainville seniors whose average age is 77, I see how hard it is for people in their golden years to find the resources that meet their needs. They have trouble getting to appointments with their family doctors, they need accessible, specialized transportation to get to their health care appointments, they need personalized after-care following hospitalization or surgery. They often have to spend so much energy and money on these things that they get discouraged and gradually become more isolated.
In closing, I would like to remind the House that we, too, will be seniors one day.
Let us show today's seniors the respect that we hope our children will show us.
Mr. Speaker, I thank my colleague from for sharing her time with me and for an excellent speech. There were good points, it was well argued and it was an important message from our new generation of NDP MPs.
It is useful, as we enter into a debate on the old age security regime in this country, to pause and reflect on some of the steps that got us to the position we are in. I am very proud, as an NDP member of Parliament, to take up the cause of defending the integrity of our old age security system, as has been our function and role throughout much of the last century.
I represent the riding of Winnipeg Centre, which is home to two of the greatest champions of social justice, I might say, that this country has ever known. In 1921, the Government of Canada wanted to send J.S. Woodsworth to prison for his role as the leader of the 1919 general strike but the good people of Winnipeg Centre sent him to Parliament in Ottawa instead and he stayed there until his untimely death in 1942.
I raise that subject because, only three years after J.S. Woodsworth arrived in Parliament, the prime minister of the day, William Lyon Mackenzie King, was in trouble. He was going to lose his government and needed the coalition support of what J.S. Woodsworth called the ginger group at the time, the Independent Labour Party. Woodsworth negotiated with Mackenzie King a deal, a condition, a compact, a coalition so to speak. The very art of politics is forming compacts, coalitions and agreements. Woodsworth went to Mackenzie King and said, “If you agree to introduce an old age security regime, I will support your government”. That was the birth of the Canadian old age security system. We have that letter on file at NDP headquarters. It took Mackenzie King a long time to live up to his promise but he indeed did introduce old age security.
When J.S. Woodsworth passed away, he was replaced by the man who is known as the father of the Canadian pension plan, Stanley Knowles. Stanley Knowles represented my riding from 1942 until his stroke in 1984 made it impossible for him to continue. He served continuously, except for the Diefenbaker sweep of 1957. During that time, he was not only the undisputed champion of the Canadian pension plan but he fought and fought to introduce it and the old age security system. There are famous speeches on record that people published in their entirety and circulated across the country as this movement gained momentum. He did not stop fighting until he managed to have the old age security pension indexed to inflation as a secondary objective. This took his entire career but it was his proudest achievement and perhaps one of the most proud achievements of the NDP.
It always seems to fall to us to defend the integrity of the pension system, which has been under continuous assault by successive Conservative governments that do not fundamentally believe in this type of universality of old age security systems.
We can trace what is going on today with the terrible notion that the of Canada would announce fundamental social policy changes in a speech in a foreign country. We can trace it back, or I do at least, to the musings of the unofficial prime minister of Canada at the time, Thomas d'Aquino, the chief executive officer of the Canadian Council of Chief Executives. Mr. d'Aquino had a checklist of things he thought Canada needed to do that consisted of 10 or 15 items. One by one he was checking them all off and one of them was, which he announced quite publicly, that Canada had to get out from under the crippling legacy costs.
Nobody really paid too much attention because the term “legacy costs” did not ring any bells. What he meant was pensions. Sure enough, the right wing think tanks started to fall in line and also blame pensions for all of our economic woes. There was no mention of the fact that corporate tax cuts had taken over $100 billion worth of fiscal capacity in the two last governments, the Martin regime and this one.
Even when General Motors and the big auto companies ran into trouble, nobody said that maybe people were not buying their cars because they were making models nobody wanted. Immediately they said that the reason they could not function was because their legacy costs were too great, that they had to get out from under their pensions.
With this notion of never let a good crisis go to waste, they started to segue from the real root cause of their industrial woes and blamed it on this notion that we deserved to retire in some dignity and that we could take seniors out of poverty.
We have three pillars to our old age security system. One is personal savings, whatever one can save and invest during one's working life. Second, hopefully one has a pension through one's workplace, although that is becoming a rarity because of this full frontal assault by the right on the very notion that workplace pensions are possible. Third, is a robust universal government-sponsored pension plan.
The government would have us believe that there is something luxurious and comfortable about the pension system as we know it, the OAS and GIS. In actual fact, when compared with other countries, the replacement of earnings in retirement does not come anywhere close to a lot of western developed nations. It is really quite a modest system.
We have seen this assault on pensions and on the notion of pensions gaining validators and momentum, or currency. In fact, some experts in the field challenge whether it is an emergency at all. Yes, there is a demographic blip, but we would have had the fiscal capacity to provide were it not for the choices made by successive Liberal and Conservative governments to hollow out that fiscal capacity. However, we seem to be able to find money to spend in corporate tax cuts. Let us not kid ourselves. When $6 billion in corporate tax cuts is granted, that is spending money. We argue that is wasteful spending of money, and we believe that has been validated.
The logic was that if we gave those tax cuts to corporations, they would spend that money in the economy, create more jobs and a virtuous cycle would begin. In actual fact, they have been hoarding that money away. Our worst fears are realized. They are stacking it up and stockpiling it like Scrooge McDuck in the comic books, rolling around in their piles of dough but they are not reinvesting. There is no empirical evidence to prove it.
Not a single study in the world has ever proven that a tax cut equals more jobs. The only predictable and verifiable outcome of a tax cut given to companies is that they will have more money and greater profits. That is what was done. It was a transfer of wealth.
In the richest and most powerful civilization in the history of the world, the government cannot tell me that we cannot afford to lift every senior citizen out of poverty.
Our former leader, Jack Layton, costed this out and we ran on that as a platform. Instead of the $6 billion for corporate tax cuts, we could spend $1 billion of that and all 250,000 seniors, who are currently below the poverty line, would at least get to the poverty line. They would not be wealthy, rich or even comfortable. They would still be poor, but out of the depths of abject poverty. That is the cost and it is achievable, yet we go in the opposite direction.
Again, in the spirit of never let a good crisis go to waste, the Conservatives are cutting, hacking and slashing upon ideological lines just as we predicted they would. They are coming up with these dummy saving accounts to offset it. Bill , the bill we were forced to vote on yesterday, is nothing but a 401(k). The only ones who will get rich on that are the stock brokers who will charge a commission every time that money is moved around. It is a 401(k), the Americanization of our pension regime.
We are here to defend the integrity of the old age security in the spirit of Woodsworth and Stanley Knowles. The NDP is proud to present this motion today to flush out the enemies of the public pension system, to denounce them and hold them to account so they will not get away with this. There will be a blue rinse revolution in this land if they proceed in this way.
Mr. Speaker, I rise, like always, out of a sense of pride to address important issues in the House, but also with a great sense of frustration on behalf of a lot of Canadians who are very worried about their retirement futures.
They have watched the trial balloon this notion, this idea, that there is a crisis in the Canadian pension system. They understand the issue of the aging demographic. Canadians are serious people who understand these issues. They want government to be honest with them and to provide real solutions.
When the trial ballooned increasing the age of qualification for the OAS from 65 to 67 years of age in Davos, he frightened a lot of Canadians, a lot of people who look toward their retirement age of 65, people who have, in many cases, worked their entire lives in labour or in a trade, who have saved enough so they can take care of themselves with some level of dignity post-65, providing that they also receive the OAS. They are shocked, surprised and are very fearful of what their future looks like.
They are people who have done all the right things. They have worked hard. They have saved money. They have planned for the future and they fear that just as they are within reach of that future, the Conservative government is threatening to pull the rug out from under them and to, in a very callous way, destroy their future retirement.
Today, the confirmed that the upcoming federal budget would include cuts to old age security. This, despite the fact that the Conservatives promised in the last election not to cut transfers to individuals or pensions. This, despite the fact that the old age security program, as it is set up currently, is in fact sustainable. The Globe and Mail wrote this week:
Expert advice commissioned by the federal government contradicts [the Prime Minister's] warnings that Canada can’t afford the looming bill for Old Age Security payments....research prepared at Ottawa’s request argues Canada’s pension system is in far better shape than the Europeans’, and there’s no need to raise the retirement age.
As we have heard, the federal government currently spends about 2.4% of GDP on OAS payments. In 2030, we are told spending on OAS payments will rise to about 3.14% of GDP.
The amount we spend on OAS clearly fluctuates with demographics. For example, in 1992, federal spending on OAS represented 2.72% of GDP.
The expected rise in old age security between now and 2030 can be manageable. It is simply a matter of priorities. After 2030, spending on OAS as a percentage of the economy is expected to fall once again until it is even below today's levels.
The Conservatives do not like it when we talk about future government spending as a percentage of the economy or a percentage of the GDP. The Conservatives want to scare us with nominal numbers without considering what our ability would be to actually pay.
This is not surprising, because the Conservatives do not like evidence. They prefer making decisions based on ideology, not evidence, and they often ignore the facts when they make decisions.
For examples, yesterday the told parliamentarians to ignore the statistics that showed that crime rates in Canada continue to fall.
Yesterday the chief economist at Statistics Canada quit because of the Conservatives' habit of placing ideology ahead of facts, evidence and statistics.
Yesterday the Conservatives quietly made data from Statistics Canada available for free on line, but since the Conservatives got rid of the mandatory long form census, the data is really quite worthless, so they would not be able to continue selling it anyway. Nobody wants to buy data that is not statistically credible or pertinent.
Now the Conservatives are trying to scare Canadians into believing that the OAS system is somehow about to crumble.
I would like to share with members what the experts are saying on this issue.
Thomas Klassen, a political scientist who recently published research on Canada's OAS, has said:
I haven't heard any academic argue that there's a crisis with OAS, which is why I was surprised a few days ago when the Prime Minister seemed to say there was a crisis... because I don't know where that came from.
From a column in The Globe and Mail earlier this week:
Kevin Milligan, a University of British Columbia economics professor who co-authored another of the supporting research papers prepared for Ottawa, is also of the view that there's no OAS crisis. He says the government's use of statistics showing the cost of OAS will climb from $36.5 billion in 2010 to $108 billion in 2030 is not meaningful because of the impact of inflation.
He says that we should be using percentage of GDP numbers instead. He says:
As an economist, I would never characterize things in terms of nominal dollars in the future because it's hard to put those in context. I don't know what we'll be paying for a litre of milk then.
Meanwhile the said measuring OAS payment as a percentage of the economy is misleading Canadians. Somehow, looking ahead to 2030 and, instead of putting it at a nominal value, putting it into real terms as a percentage of GDP was somehow misleading Canadians. To the contrary.
The is misleading Canadians when she speaks in nominal numbers for 2030. Everybody else who is obviously taking the cost of the OAS as a percentage of GDP is then providing Canadians with important information. The Parliamentary Secretary to the Minister of Finance actually said “We're talking in dollars. Talking in terms of percentages is misleading”. Sadly, it is not the first time that the parliamentary secretary for finance has been confused by the expression of government expense as a percentage of GDP, but I digress.
Further, in terms of the fact that there is no evidence of a real crisis, the government's own report concludes that our pension system, including OAS and GIS, is sustainable. I will quote from this report called “Canada's retirement-income provision: An international perspective”. Edward Whitehouse states:
The analysis suggests that Canada does not face major challenges of financial sustainability with its public pension schemes... There is no pressing financial or fiscal need to increase pension ages in the foreseeable future.
Again, this is from a report commissioned by the government. It commissioned experts to provide it with expert advice based on evidence.
According to this report, the current system is working well:
Canada's public retirement income system provides strong protection for interrupted work histories without unduly affecting incentives for people to work and to save.
Even if there were a crisis in the sustainability of the OAS or our pension systems, one would think that if the government were going to try to strengthen the pension plan to ensure it was sustainable, it would do it in a way that was progressive and fair. This is what the Liberal government did in the 1990s with the CPP, for example, to ensure that it was sustainable for generations in decades ahead.
We have established that there is not a crisis. The Conservatives are doing this for ideological reasons. Even if they felt there were a crisis one would think they would want to be progressive and fair and ensure that the most vulnerable would not be affected most severely by those changes. In fact, to the contrary.
The Conservative government was able to find billions of dollars to enable income splitting which, if affordable, is fine. Yet income splitting disproportionately benefits middle and upper income Canadians. The Conservatives found billions to help with that.
This move, raising the age of qualification for the OAS, would disproportionately hurt low-income Canadians. Forty per cent of OAS recipients get by. They struggle to survive on less than $20,000 per year. More than 50% of OAS recipients make less than $25,000 per year. What kind of government, if it were in fact faced with a crisis of sustainability in our pension system, would solve it by hurting the poorest of the poor?
It is also anti-rural, anti-small town and anti-Atlantic Canada. Rural Canada, small-town Canada and Atlantic Canada have more seniors than urban Canada. That is the reality. Parts of Canada, such as Alberta and Saskatchewan, are doing very well. They had the vision, foresight and wisdom to put oil and gas and potash under the ground. However, large parts of Canada are struggling. The Maritimes, large parts of Ontario and Quebec, and a lot of rural communities are struggling. We are struggling to keep rural communities alive. In the three counties of Hants county, Kings county and Annapolis county, we have lost almost 7,000 full-time jobs since August 2008. We have seen unemployment rates go from about 5.5% to over 8% in the last three years. We have seen families struggling just to make ends meet. Small businesses are going broke. They cannot survive if people cannot afford to go to their little restaurant or to shop at their little store. Do not be fooled when the government talks about how well the economy is doing. If we break it down by region, if we break it down between urban and rural, there is a lot of hardship in Canada right now.
This threat to increase the age of qualification for the OAS would make things worse in rural Canada, small-town Canada and Atlantic Canada.
For example, in Nova Scotia, we have the highest percentage of seniors in the country as a percentage of our population. Seniors comprise 16% of the population in our province. The median income for seniors in Nova Scotia is $21,290 per year. That is almost $2,000 less than the Canadian median income of $23,110 for seniors.
In Nova Scotia, OAS represents 24.6% of seniors' income. That is much higher than the Canadian average of 21.1%.
We have established that this is a regressive step. It is bad for low-income Canadians, Atlantic Canadians, Nova Scotians and rural Canadians. It also bad for single women. For women, the OAS and the GIS are more important, in many ways, than the CPP or the QPP. Unlike the CPP, the OAS and the guaranteed income supplement cover Canadians who have taken time away from the workforce. For example, people who have stayed at home to take care of their children or who have persistently had lower paying jobs or long-term unemployment. I mention the GIS because, the way our system works, we cannot qualify for GIS unless we qualify for OAS. Raising the qualification age for OAS would be doubly regressive. Not only is OAS there to help low-income Canadians, but the GIS is absolutely essential for the lowest income retirees.
According to the 2009 report, “Government and Retirement Incomes in Canada”, by Michael Baker and Kevin Milligan, again a government-commissioned report, by the ages of 60 to 64, employment income represents 40% of income, on average, for men but just 28% of income for women. We know that generationally, particularly in the past, a lot more women were doing work that was not compensated in a monetary sense, important work, but work that was not part of the financial system or part of the formal economy. Meanwhile, 23.9% of women aged 65 received GIS, compared with only 19.6% of men. We know that the GIS and the OAS are even more important to women than they are to men.
The Conservatives' policy on income splitting, which I mentioned earlier, predominantly helps well off, single income couples. Now the Conservatives are getting ready to attack low-income families and single women who rely on OAS and GIS when they turn 65.
It is unfair to women. It is unfair to low-income Canadians. It is unfair to rural Canada. It is unfair to Atlantic Canada. It represents an off-loading to the provinces, without any discussion or consultation. The cutting of OAS, raising the age of qualification from 65 to 67, will force thousands of low-income seniors onto provincial welfare rolls.
The feds are downloading these costs, similar to how they are downloading prison costs. We know that the prisons will cost the federal government billions of dollars. We are also finding out that there will be billions of dollars imposed on provincial governments.
I am hearing from constituents in my riding of , which is of course a rural Nova Scotian riding, a riding that would be hit hard by this kind of regressive step. Fred Rhymes from Centre Burlington has contacted us. He retired early because of his health. This is a guy who worked hard. He saved carefully all his life. His savings were hit badly during the financial crisis. He is now counting on OAS to fill in the gaps when he turns 65. He is very concerned about what the government intends to do. It has been trial ballooned in a callous way. Now we understand there will be some clarity in the budget.
Another fellow who called us was Bryan Draper from Port Williams. Bryan has said that OAS and the social safety net must be there for the Canadians who need it. He referred to the gap between rich and poor and the fact that it is widening. This is not just a Canadian phenomenon. The reality is the gap between rich and poor is growing around the world.
In fact, it is ironic. The was at the Davos conference of the World Economic Forum. Global leaders from countries around the world actually said that the gap between rich and poor is growing and needs to be addressed. Klaus Schwab said in the opening remarks that it is critically important that we address the gap between rich and poor.
I talked to somebody about this a couple of years ago. A business person with a lot of money said that Marx may have been wrong about communism, but he may yet prove correct on capitalism if we are not careful.
People like Warren Buffett, who is no slouch when it comes to business, is saying the gap between rich and poor is wrong. He actually asked the people working in his office to tell him what percentage of their income they were paying in income tax, on a voluntary basis. He found out that his cleaning lady was paying a higher percentage of her income in taxes than he does. This is Warren Buffett, hardly an anti-capitalist.
This is not a question of ideology. This is a question of civility, of doing what is right and changing our tax system and our social system to be fair. It is not just a question of the economy. It is a question of the sustainability of our society. To have the Government of Canada, this Conservative government, threatening to make it worse makes me very frustrated.
I had another note from a constituent who said:
My wife and I are two of the many Canadians who have made financial plans for retirement on the assumption the OAS would be there for us at the age of 65.
Thousands of us who have worked hard and done the right thing will be badly hurt by any wait required for OAS.
Finally, on the politics of deception, the knew that this demographic shift was upon us. The world has known this. Everybody who has been looking at public policy knew this. Why did he not talk about it during the election? Why did he not give Canadians the straight goods that this was a problem? Why did he tell Canadians that he would not, and he was absolutely unequivocal, cut transfers to seniors during the election? Canadians deserve to know the truth. They can handle the truth. They deserve honesty from their government.