October 25, 1951

PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

Yes-and will instruct his

officers in such cases to take note, on behalf of applicants in other regions, of the proof submitted in the particular case on behalf of one member of that family.

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LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. Marlin:

Instructions like that were given two months ago.

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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

Then I think it is time a reminder of such instructions should be sent to officials. I put to the minister again the utter unreasonableness of denying both notarial and photostatic proof in the case of records that are not readily available. I ask the minister to re-examine this whole matter without delay, because there is no little consternation felt on the part of many applicants who are confronted with problems, in the light of the present rigid requirements which they find themselves unable to meet.

The minister and I belong to about the same vintage. We have not had the experience that many persons a generation older than ourselves have had of finding that their parents seventy years ago and more did not take the trouble that parents are compelled to take today to register the births of their children. The system or registration then was in its infancy, and it was more often honoured in neglect than in observance. Then, to a degree not commonly recognized, other sources of proof of age such as church records have been destroyed in large numbers by fires. Fires occurred in country churches in those days much more often than they do now. Records are lacking today in many cases

where their absence is attributable to no other fact than that they have been destroyed by fire or other causes entirely beyond the control of those who are applying for the benefit of the pension payable on January 1.

I ask the minister in all earnestness to re-examine this whole matter of proof in a sympathetic and understanding way, because I feel in all seriousness that he has not fully appreciated the extent of the consternation that has been created in many applicants by what they have encountered in the way of demands for further proof.

I should like to close on the note with which I opened today. It is a pleasure to welcome a measure which will, I know, command in its goal and its objective the unanimous adherence and support of the house. It is a happy thing, sir, that in the attainment of this high national goal all political parties in the house are as one, and all of them claim, and properly so, their share of the credit for achieving this goal today. While in due course we will have to come to the other side of the picture, the picture placed before us this afternoon in perhaps more sombre tones by the Minister of Finance, and deal on their merits with the inescapable questions he has raised, I am sure that all of us are happy to endorse the goal set forth in the resolution now under debate.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Stanley Knowles (Winnipeg North Centre):

Mr. Speaker, no one is more conscious than are we of this group of the historic significance of this day, when we are taking the first step to place upon the statute books of Canada an old age pension law which will be free of the means test. One thinks of those who have worked in bygone years in the hope that this day might come. Indeed I feel I should go no further without mentioning the name of one former member of this house, the late J. S. Woodsworth, who played such a prominent part in getting the first old age pension legislation upon our statute books. Not only did he play a part in the initial stages; he continued to advocate and work for more adequate measures of old age security, including the abolition of the means test and an over-all program of social security for all Canadians. I believe members of all parties will agree with me that when we are taking this forward step we should remind ourselves of the efforts made, not only by those of us who are here now and have had a part in these current activities, but by those who were here in years gone by.

I realize too, Mr. Speaker, that the popular thing to do on this occasion is to spend some time saying what a good job parliament is

94699-26 J

Old Age Security

doing, to spend some time praising the measure that is being forecast by the resolution before us. It is a praiseworthy piece of legislation, particularly in that it removes the means test from the old age pension as at age seventy. But perhaps it can be taken without my saying it at length, from one who has had a good deal to say across the years urging that this step be taken, that I for one and the members of the group with which I am associated are indeed pleased to be here on this occasion when we are abolishing the means test as at age seventy. Nevertheless, Mr. Speaker, I feel that it is our duty, despite the charge that will be made by some hon. members opposite that we are forever finding something wrong even with what is good, to point out the shortcomings of the legislation that is being presented.

There are two main faults that I find with the bill that will be introduced when this resolution is passed. There are other points than those two with which I might deal and to which I may refer in passing, but they relate more to the Old Age Assistance Act which we passed last June. However, what we have before us now is legislation to provide for old age security from age seventy onward. The first thing to say with regard to the inadequacies of this measure is that the $40 a month provided by the legislation is insufficient, particularly in the light of today's prices and in the light of what we in Canada regard as a decent standard of living. Much was made by the Minister of National Health and Welfare (Mr. Martin) about the unanimity of last year's parliamentary committee in presenting its report. He had every right to refer as he did to that unanimity. There were some of us on that committee who were not satisfied that the report went far enough, but all of us agreed that in so far as it went we welcomed its provisions, so we gave it our unanimous support.

May I point out, however, that in addition to the unhappiness many members of the committee felt then over the fact that there was no proposal to increase the amount of the pension, since that time there has been a drastic and serious rise in the cost of living which has reduced still further the value of the $40 old age pension. In another debate the other day I referred to the loss in value of $40 that has taken place since that committee made its report in June, 1950. Another comparison that might be made, indeed one that I feel should be made, is between the value of $40 today and the value of $40 in April, 1949. The reason I picked that date is that it was in the month of April, 1949,

Old Age Security

just before the 1949 election, that the old age pension was increased to $40 per month. Surely, Mr. Speaker, our old people, both those already on the pension and those about to go on the new pension, have a right to expect that the purchasing power provided for them in April, 1949, will be maintained. The fact of the matter is that whereas the cost of living index in April, 1949, stood at 159-3 it is now 189-8. That means that $40, in terms of 1949 dollar values, is now worth only $33. If you look at it in terms of the food index-I mention that because a large proportion of what our old age pensioners have to purchase is food-you find that $40, in terms of the April, 1949, dollar value, is only worth $31.62. It does seem to me that our older people had every right to expect we would keep the value of the pension up to what it was in the month of April 1949.

As a matter of fact, before the minister and other members from the government side indulge in too much boasting about this measure, I believe we should compare what we are now doing with what was done when the pension was first inaugurated at the lowly figure of $20 per month. The government boasts that the amount has been doubled, from $20 to $40 per month. But if you look at $40 pension today in terms of 1935-39 values the result, in terms of the general cost of living index, is that $40 today is worth only $21.07. If you look at it in terms of the food index the $40 today is worth only $15.92 in 1935-39 purchasing power. So I submit, Mr. Speaker, that the temptation to boast is one the Liberals should not yield to so readily. The government is not doing anything very wonderful for our old age pensioners in providing only $40 per month, particularly in view of the way the cost of living has been allowed to go up.

I want to say quite candidly and quite seriously, not in the sense of trying to make a debating point or anything else but just a plain, ordinary humanitarian appeal, that I feel the government should have increased the figure that was included in the parliamentary committee's report of last year to not less than $50 per month. I pick that figure on the basis of the comparisons I have just given as to the shrunken value of $40 since April, 1949. Personally I would go further and say that, in the light of today's productive capacity and today's standard of living, in the light of today's overstocked inventories about which we have heard so much during this session, we should be paying our old people not less than $60 per month. I, for one, am indeed sorry the government did not, on its own initiative and on the basis of

this humanitarianism of which it boasts, increase the amount of the pension before bringing in this legislation.

My mind goes back to something which happened in this house in 1947, when there was a resolution preceding a bill to amend the Old Age Pensions Act. When we received the bill the proposed increase was to $30 a month; but on that occasion the minister had not put that figure in the resolution preceding the bill, thus leaving us in the position of feeling, from the rules of this house, that we had the right to make an amendment to increase the amount of that pension. We did so on a day and in a debate which I am sure the Minister of National Health and Welfare well remembers. I notice that this time he took the precaution to write the $40 into the resolution preceding the bill, to make sure that we would not have the opportunity to move an amendment when the bill comes before us.

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LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. Martin:

I agreed to $40 because, among others, the hon. member had recommended that amount.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

Has the minister completely ignored the remarks I have made in the last ten minutes as to what has happened to the cost of living since the committee made that report in June of 1950, to say nothing of what has happened to the cost of living since the $40 figure was arrived at on the basis of the bill brought in by the minister in April, 1949? Because of these changes in the cost of living, I submit that the government should have acted accordingly and should have increased that figure of $40 to at least $50, in order to compensate for the rise in the cost of living. I make that plea on behalf of old people generally. I make it on behalf of a really proper and adequate old age security system which we are trying to get established in this country. But I make it in particular on behalf of the more than 200,000 old age pensioners who will not get any increase in the amount of their pensions as a result of this legislation. There are many-more than 200,000-who are already drawing the full $40 a month. For them there is no increase whatsoever. I am one of those so thoroughly opposed to the means test that I do not suggest there should be any means test supplemental allowance for those people. They need a higher amount, as of right, and so I feel that there should be an increase across the board and that, correspondingly, there should be the kind of taxation proposals to take care of those who, as a result of the increase, would be getting pensions they do not need. But I insist, Mr. Speaker, that this parliament in this special fall session is not doing its duty by the old people of this

country if we go home satisfied to have given our old age pensioners only $40 a month. The amount of $50 or $60 a month is just as necessary now for our old people as $40 was in 1949, on the eve of the election. It is a matter of regret, perhaps, that there is no election coming now. We might have obtained an increase in that amount if there were. I hope the minister is not just saving it for the eve of another election, for the problem is serious for those 200,000 who will get no increase, as well as for many others who will come on the pension for the first time and who, in many cases, need it just as much as do the 200,000 already drawing the full amount.

In that connection may I point out that there are many people who will start to draw the pension for the first time when the means test comes off and who have needed it right along, but who did not like to go through the red tape, or did not like the feeling of charity that was attached to it, or did not like the provision made for recovery from their estates and so on. I am glad the means test is off for that particular group. As a matter of principle, I am glad it is off across the board. But in the name of these 200,000 people for whom there is no increase, I submit that there should be an increase in the amount of the pension to either the figures that I have suggested, that is, $50 or $60 a month.

While speaking of a matter of that kind, Mr. Speaker, I think I should say, even though it is a bit of a digression, that another matter to which we must give serious attention is this whole problem of health services and health insurance; and it comes to mind particularly because of the needs of our old people with respect to health. This would be a good place to start a national program, only I would hope that we would not stop there. For all the pride and pleasure that we have in the step we are taking today, I urge that we realize that our job is not done until we have placed upon the statute books of Canada a really adequate program of over-all social security, including the various measures we now have as well as proper and generous provisions for the care of our people's health, with provision for financing it through a proper health insurance plan.

While I am referring to these things and making the point that there should not be too much boasting but rather some searching inquiry into the whole situation, may I say that I was disappointed to hear the Minister of National Health and Welfare today make the boast-and with it the implication that that was the whole story-that the federal government had never required

Old Age Security

the filing of liens on the property of old age pensioners, even under the legislation we have had on the statute books for the last quarter of a century. Mr. Speaker, that is another statement which is true as far as it goes, but it does not tell the whole story. Certainly the federal government has never required the filing of liens. The federal government could not do that. The British North America Act, with its section on property and civil rights, leaves that matter to the provinces. But the federal government has required the provinces to make recoveries to pay back pensions that have been paid, and has required that, where those recoveries are made, a certain percentage be paid back to the federal government. Up until about 1943 that requirement was across the board. In 1943 or 1944, I think it was, Mr. Ilsley wrote a letter to the provinces indicating that so far as the federal government was concerned it was optional with the provinces as to what they did with regard to estates of the value of $2,000 and under; but it is still required by the federal government that recoveries be made in the case of estates of $2,000 or more. Just to say that the federal government has not required the filing of liens is not telling the whole story. It is federal legislation that has required recoveries. Perhaps I had better not spend too long in dealing with these boasts made by the minister, but I felt that the whole story should be told in respect of all aspects of a matter such as that.

Generally speaking, as I have already said, the proposal before us today is one that we heartily welcome, particularly in that it removes the means test as at age seventy. As I have already indicated, however, there are two shortcomings. With one of them I have already dealt, namely, the inadequacy of the $40. The other serious fault I find with the proposal laid before us today is in part of what the Minister of Finance (Mr. Abbott) had to say. I noted that the hon. member for Eglinton (Mr. Fleming) preferred to leave that section of it until a later time; but from what the Minister of Finance said today it seemed to me that there is at least one aspect of his taxation proposal which certainly ought to be changed. I refer in particular to his statement that this 2 per cent personal income tax is to have a ceiling of $60 a year. That means that anyone who has taxable income-and I emphasize the words "taxable income"; that is, income over and above his personal and family exemptions-of more than $3,000 a year, will pay no old age security tax on the portion of his income that is above that $3,000. I regard that situation as grossly unfair. It means that the bulk of the burden of financing the old age security plan will be met through the

Old Age Security

sales tax on everybody, including those who cannot afford to pay it, and through the income tax on the middle income group, those in the brackets where they have taxable income of between $2,000 and $3,000 a year. Surely every member of this house has been faced with questions about the removal of the means test. One of those questions has been: What about the millionaires? And I am sure every member in this house has said: Do not worry about the millionaires; they will pay it back in their taxes. I have said that. I felt sure that would be the plan. As a' matter of fact, this morning I saw a copy of the Financial Post a bit ahead of time; it is dated October 27, and today is only October 25. On pages 1 and 3 of that issue there is a story of the tax it was expected the Minister of Finance would propose to finance this new old age pension program. The Financial Post seems to have a pretty good pipe line, but it missed the boat on one or two features. The Financial Post expected that there would be these three taxes, two, two and two. They were correct in that. But then they thought that the 2 per cent increase in personal income tax would be without any change in the exemption levels or without any other exceptions. The Minister of Finance comes along today and tells us that the principle of excluding upper income has been included in this plan, with the result, as I say, that people who have over $3,000 of taxable income will not pay any old age security tax on that portion of their income above $3,000 a year. I think that is socially and economically wrong. I think it is completely indefensible, and for my part it will have to be fought as hard as we can fight it when we get to that part of the bill.

Last spring when an additional tax for national defence was brought in, the Minister of Finance made it a 20 per cent surtax. The effect was that the money that had to be found for national defence was to be obtained on something of a sliding scale. Those paying the higher rates of tax were subject to a higher rate of increase, because it was a 20 per cent surtax on the tax being paid, and there was no exclusion of those in the upper brackets. It went right up to the top. In fact I well recall the hon. member for Coast-Capilano (Mr. Sinclair) emphasizing that point when we felt that it did not go far enough. His point was that it was a steeply graduated tax; in other words, that is the way the Minister of Finance felt he had to raise additional money for purposes of national defence. But now, when we come to raising this old age security money, not only does he get away from the principle of a surtax that graduates upwards into the upper brackets, not only

does he make it just a 2 per cent flat increase, or a 2 per cent addition, but he says, if you pay $60 a year into this you do not have to pay any more, even if you are a millionaire.

The Minister of Finance had a good deal to say about the sales tax. He said that it would be the place where people would pay, and where they should pay, and it would be the place where the wealthy would pay their share. I tried to do a little figuring on that since the minister announced the proposal, and it looks to me like this. The millionaire will pay only $60 a year in direct old age security tax; and if he is over seventy and drawing a pension he will get $480, paying only $60 of it back into the old age security fund. That hardly seems fair. But, says the minister, he will pay a lot more, if he is a millionaire, into the fund on the basis of the 2 per cent sales tax. Well, he will have to spend $21,000 on goods subject to the sales tax before he pays into the old age security fund that other $420. So, Mr. Speaker, I do not think-

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

He will be paying his surtax, and all the rest of it. That is completely fallacious.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

So will all the others. The Minister of Finance is trying to isolate for the little people what they are paying for their old age security. Does he not have to apply the same thing to the millionaire and isolate what he is paying? All he would be paying is a limit of $60 so far as the direct old age security tax is concerned, and a portion of the sales tax that he pays on the things he purchases. And as I have said, he will have to spend $21,000 at 2 per cent in order to pay that other $420 into the special fund.

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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

Maybe he will lose the special $500 exemption which he receives at age 65.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

The hon. member for Eglinton says: "Maybe he will lose the special exemption which he receives at 65.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Completely fallacious.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

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LIB

Leslie Alexander Mutch (Parliamentary Assistant to the Minister of Veterans Affairs)

Liberal

Mr. Mutch:

Who gave the lecture?

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

I quote:

Those are both two perfectly understandable, perfectly justifiable views as to the function and purpose of social security in our democratic society. But I like to think of our social security programs in a slightly different light. I like to think of them not merely as the badge of our compassion, nor as a necessary cost of doing business, but as the purposeful symbol of our democratic way of life itself, a recognition of our common brotherhood, our common interdependence.

Then comes the quotation from Franklin D. Roosevelt, as taken from his first inaugural address as governor of New York in January, 1929, when Mr. Roosevelt was discussing the relationship between the individual and the community. This is what he said:

It is the recognition that our civilization cannot endure unless we, as individuals, realize our personal responsibility to and dependence on the rest of the world. For it is literally true that the "selfsupporting" man or woman has become as extinct as the man of the stone age. Without the help of thousands of others, any one of us would die, naked and starved. Consider the bread upon our table, the clothes upon our backs, the luxuries that make life

Old Age Security

pleasant; how many men worked in sunlit fields, in dark mines, in the fierce heat of molten metal, and among the looms and wheels of countless factories in order to create them for our use and enjoyment.''

That is the kind of society we live in. It is no longer a case of each man being able to fend for himself and to save up for his own old age. Surely this inflationary period has proven that. There has been talk today about annuities. Look what has happened to people who bought government annuities years ago; inflation came along. We do not save when we are working the goods and services we live on when we retire. No; what happens is that during the years we are working part of what we produce provides social security in those years for those already retired. And, in return for that, when our day to retire comes along, the society of that day sets aside part of what it will produce for our retirement.

Therefore I think we should keep away from these notions of a direct relationship between what we put in and what we get out. It is not a case of how much we put in either through a direct contributory scheme, through private insurance, through a government annuity, or through a tax for old age security. It is not a case of adding that up and saying, "How many dollars am I going to get back when I am seventy?" If you had to analyse it on that basis, it would never seem satisfactory or fair.

The reality of the situation is that in this year we work in our economy and in our society to produce a total volume of goods and services, and we arrange that a portion of those goods and services be set aside for these other purposes. We do it with the feeling and the confidence that society moves on, and that when our day to retire comes along we will be treated in the same way by those who are working at that time. And if, when that day comes, we have helped to build up a productive capacity which is greater, our retirement should be even better than we are able to provide at this time.

In that connection, one of the things I do not like about the way the Minister of Finance (Mr. Abbott) wants to isolate this fund and to review it every year is that it seems to me he has given in to the propaganda of some of these manufacturers' organizations, tax foundations and the like, who wish to have this matter set up in a way that will put the brake on demands for increasing the amount of the pension. Family allowances are not put aside in a separate fund, with the taxes paying for them earmarked for that purpose. We do not treat defence expenditures in that way. Why is old age security picked out for special treatment? It looks to me as if there is this desire

Old Age Security

to put it in such a way that it will be difficult for society to say, "We want a reasonable increase in the amount of old age pensions".

That is the reason I have taken time to analyse the system, as I did a moment ago. It seems to me we should think of this, not in terms of fiscal burden, as the Minister of Finance has said, but rather in terms of an interdependent society. What counts is what we are able to do each year. If we are able this year to produce enough to provide a better retirement for our people, then let us do it by all means and not be hamstrung by having to review the matter in an isolated fashion as is proposed by the Minister of Finance. It seems to me we have gone a long way in the right direction in the plan now before us; in its universality, in the removal of the means test, and to the extent that there is no relationship between what the individual pays in and what he gets out. That is all to the good. Let us not spoil it by putting it in such a way that any attempt to have the amount of the pension increased will be forestalled.

Certainly the pension will have to be increased. Do not let the government, or any government which may succeed it, think it will get away with $40-or $50 or $60-for years and generations to come. Surely as society goes on and our productive capacity increases, surely as our standard of living improves, future generations will do better for their older people than we are doing for them now. Let us see to it that that principle of solidarity in our society, and our interdependence, is woven into the fabric of this old age security system.

In that connection I noticed the Minister of Finance enjoyed the little bit of so-called economic logic he handed out when he said that he had never found any way to get a dollar to pay to one person without taking it from another. And that is supposed to be the answer to these appeals to increase the amount of the pension, or to extend our social services. I hope he has not overlooked what was said by the Minister of National Health and Welfare, namely that what we pay comes out of current production, and that if we want larger pensions and broader social security the thing for us to do is to increase our production and see to it that the increase is used for socially desirable purposes. So long as you do it by a taxation method which puts a limit of $60 a year on the millionaire, you are not carrying out the principle of passing on and sharing the full benefit of increased production.

There are two or three other things I wish to say, if time permits. I feel that although it perhaps applies to the other bill passed

last spring, parliament will soon have to review the whole question of the means test at sixty-five. I was interested in the plan announced by the Minister of National Health and Welfare today with respect to annuities, namely that it will be possible to integrate government annuities with old age pension legislation. But bearing in mind the shrinking value of money, bearing in mind this interdependence I have been talking about, I think the day will come when we will have to take still more community responsibility, still more social responsibility, for the retirement needs of our people.

Incidentally I could not help noticing the contrast between what the government has been able to do in relation to annuities, and what it has been able to do with respect to war veterans allowances. At the last session of parliament the government was asked repeatedly from this side of the house to be ready at this fall session with the necessary amendments to the War Veterans Allowance Act, to make sure the veterans on that allowance would not be the only group who would not have any improvement in their position. The Minister of Veterans Affairs I thought took the point seriously, and I was hoping something would be done by the time the house met this fall. However they have shown, on the other side, that they have had time to think out a plan whereby old age pensions can be integrated with the government annuity, but they have not had time to think out a plan to integrate old age pensions with war veterans allowances.

That is highly regrettable. I say if there was time for one, then there certainly should have been time for the other. It is quite clear-and I was glad to hear the minister say it today-that every person of seventy years and over, with the proper residence qualifications, should apply for old age pension. There is no means test in it. In other words the fact that you are drawing a burnt-out pension does not deny you the right to draw the full old age pension, if you meet the age and residence requirements.

But the fact of the matter is that the means test is still in the War Veterans Allowance Act, and once the burnt-out pensioner starts drawing the old age pension and in January or February of next year begins receiving the actual cash, according to the law as it now stands such amounts will be treated by the war veterans allowance board as income, and such a war veteran's allowance would be reduced accordingly. In some cases, if that happens, the entire advantage of the old age pension will be wiped out. In some cases the veteran will be left with an advantage of about $10, and his treatment and hospitalization rights.

That is not good enough. It really is a retention of the means test, so far as one group of our people over seventy is concerned.

I urge strongly that this question of the relationship between old age pensions and war veterans allowances be dealt with at this session of parliament. It is not good enough to tell us that there will be a committee next year. These people need some improvement in their position now, not next year. I think the Canadian people generally will feel annoyed when they realize that almost every other group of Canadians seventy years of age and over will benefit by this legislation except those receiving war veterans allowances. In that case the benefit will be either nothing at all or very little.

There is one other group to which I should like to refer, and I do this because it illustrates the type of problem that will have to be dealt with. I hope the government will give attention to this matter. I had hoped the Minister of Transport (Mr. Chevrier) might be here, but perhaps it will be drawn to his attention. I have before me a copy of the rules and regulations governing the Canadian National Railways pension fund. Under this fund there is paid what is known as a basic pension of $25 per month to every employee of the Canadian National on retirement at a certain age for certain years of service. Section 9 of the rules and regulations reads:

9. This pension fund shall not apply to any employee who is eligible for or in receipt of any pension or superannuation allowance under any other pension fund or plan now or hereafter in effect where such pension or allowance is contributed to wholly or in part by the company or the government of Canada, except war pensions.

If no change is made in those regulations it will mean that every Canadian National Railways pensioner over seventy years of age will find that he will lose the $25 per month he is now getting when he starts to draw the old age security benefit of $40 per month. When we have referred to the plight of the Canadian National pensioners in this house from time to time it has been difficult to get much satisfaction. It has been suggested that their problem would at least be alleviated by the introduction of this new old age pension plan. I take the government at its word that that is the intention, but it is pretty clear from the section I have read from the Canadian National pension rules that unless a change is made these men will suffer a loss.

My fear is that there are other cases in addition to the burnt-out pensioners and the Canadian National pensioners. The whole problem should be gone into most thoroughly by the government, and now rather than waiting until next session. The government

Old Age Security

has found time to work out a scheme to integrate annuities with the old age pension legislation and they should be able to find time while we are here to integrate all these other plans.

I said earlier that we in this group welcome most heartily this significant piece of legislation because it represents the taking of a step we have advocated across the years. It removes the means test, although not entirely so far as our old people are concerned. However, it does remove it for those seventy years of age and over, and that is a step which we support wholeheartedly. I regret that the legislation now before us does not provide for more than $40 per month, and I regret that the Minister of Finance has not devised a fairer method of dealing with what he calls the financial burden.

I have been quite specific in my complaint on that score. Whereas the general income tax legislation is on a sliding scale graduated upwards; whereas national defence is being paid for by a surtax which is a percentage on a percentage and therefore is graduated upwards, when it comes to old age security the minister proposes a straight 2 per cent tax with a limit of $60 on the wealthiest people in Canada. I believe it would have been better for him to have imposed a surtax at whatever percentage was necessary so that it would be a small tax for those in the lower brackets and then go on up. If he did not want to do it by a surtax he could have done it by imposing a one per cent tax on those just above the exemption levels and a 3 or 4 per cent tax, or more on those in the higher income brackets.

I am sorry there are these flaws in the legislation. I hope they will be corrected and that as time goes on we will make other improvements in our social security legislation until we reach the day when we have a really adequate, over-all plan, based on the right of our people to these things because of the wealth they produce, and providing protection for our people against all the exigencies of life.

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SC

Frederick Davis Shaw

Social Credit

Mr. F. D. Shaw (Red Deer):

Mr. Speaker, parliamentary records disclose that since Social Credit members first entered this house almost sixteen years ago they have taken advantage of every opportunity to express their views relative to the treatment Canada has extended to her senior citizens. We have never hesitated to make specific recommendations on their behalf. Moreover we have never hesitated to support measures designed to improve their lot. Of course we have at all times reserved the right to criticize whatever the government might bring down even

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PROVINCIAL LIBRARY. VICTORIA, B. C. HOUSE OF COMMONS


Old Age Security though such measures might have a certain amount of good. Upon this occasion we are satisfied that we are taking an important step forward even though in trying to achieve a certain goal the government may be employing methods we cannot wholeheartedly support. In his earlier remarks the hon. member for Eglinton (Mr. Fleming) paid tribute to the joint chairmen of the old age security committee of 1950. Upon a previous occasion I also paid tribute to those chairmen. I said that this was certainly one occasion on which members of a committee had good reason to feel that nothing was being imposed upon them or, as we sometimes say, that the chairman was not endeavouring to force something down our throats. We felt it was due, in part at least, to the skill and ability of the joint chairmen that the committee was able to accomplish as much as it did during the short period it sat. The hon. member for Eglinton also paid tribute to certain departmental officials who were so generous with their time and who assisted so greatly in enabling us to accomplish our work. I feel that their assistance enabled us to be more efficient. Their assistance certainly contributed to the speed with which the committee was able to reach certain conclusions. I think also their assistance enabled us to reach a degree of unanimity which could not have prevailed without that help. I considered the committee to be free from political pressures, even though its personnel was determined on the basis of party representation in the House of Commons. I recall telling one of the joint chairmen on one occasion that I had reason to believe he was having more trouble with his own members than he was with the opposition members. May I refer first to the abolition of the means test in connection with this universal old age pension. We have always taken issue with the means test. I am compelled to believe that we in turn have been forced into that position over the years because of two very important factors. In the first place there was never uniformity of administration. Even within a province we found that pensioners were not being treated, and probably could not be, in a fair and equitable manner as far as the means test was concerned. Because of that we found a great deal of dissatisfaction among pensioners. Of course that dissatisfaction was communicated to us, and it certainly was a motivating factor when it came to the position we have taken in the House of Commons with respect to the means test. In the second place, down through the years we have always clamped a pretty severe test upon old age pensioners in that there was such an extremely low allowable income. Under the old act the allowable income of $120 a year caused a great deal of dissatisfaction. It has been said that it created a certain amount of dishonesty among the people. It certainly did not encourage many of them to go out and do the work they were capable of doing, even though we kept admitting that it was better for the country if they would work if they could, and certainly if physically able it was better for them mentally if they were able to carry on. Therefore conceivably the government itself contributed immeasurably toward the dissatisfaction which arose because, as I say, of the very low ceiling which was imposed upon our people. So far as the amount of $40 per month is concerned, I am perfectly willing to admit that the committee agreed that $40 a month should be recommended as the payment to old age pensioners, but there are two or three things which I think should be borne in mind at this time. First, I am absolutely convinced that the government would not have accepted the recommendation if it had suggested a payment of more than $40 a month. I might add that some of us, who felt that $40 was inadequate, agreed to support it because of what I have just said, namely, that I doubt whether the government would have accepted the recommendation if the figure had been higher. In the second place, there is a vast difference between the cost of living in June, 1950, and today. Even those who agreed that probably $40 as a basic pension was adequate have been obliged to change their views today because of the inflationary condition which has developed during the intervening months and years. I thought the pension of $40 was capably dealt with by the hon. member for Winnipeg North Centre (Mr. Knowles). He actually attached it to the cost of certain essential commodities such as foodstuffs. It does not require any stretch of the imagination whatsoever to realize that $40 a month is hopelessly inadequate so far as our senior citizens are concerned. The value of $40 varies, naturally, depending upon where the pension recipient may live. In the larger urban areas rents are very much higher. A pensioner would be far worse off in such an area than if living in a little home on a corner of his son's farm in some rural community. It is hard to say that $40 per month is equal to a certain figure of so many years ago unless we tie it to a specific area, but it is a fact that on the broad general principle of applying it to the cost of living today compared with the cost of living ten years ago we find that financially the pensioner is not any better off than he was ten years ago when he was drawing $20 per month as the basic pension. I should like to refer for a moment to the question of the numbers who have applied for payment of the universal pension as of January 1. Early in the summer, when we were suddenly bombarded by announcements over the radio several times a day and by the many advertisements which appeared in the newspapers, I wondered just what the government had in mind. As a matter of fact I suppose the minister would say: We wanted to get all the applications in so we could get them cleared away in order that payment might commence in January. However, one very important impression conveyed to the people was that this thing is compulsory. People everywhere were expressing the view that universal old age pensions were a compulsory piece of legislation, and that they had to apply. I have had many letters within the last few days. Some are from war veterans allowance recipients who are still under the impression, by virtue of the nature of that advertising, that they are obliged to apply. I dare say thousands of people, who would not otherwise have applied for the universal old age pension, have done so because of the nature of the advertising-some called it propaganda-that was carried on in connection with this matter. The sum of $50,000 for that type of advertising may not be a very large amount, but I often wonder how many thousands of dollars are going to be paid out as a result of that advertising which would not have to be paid out if people had not been given the impression that it was compulsory; or is there something else behind this? I well recall that when family allowances were paid one could elect to accept or refuse them. So far as income tax was concerned, a person was no worse off as a result of his refusing. Before long, however, the act was amended so that certain deductions were allowed if you had no children of family allowance age. Certain other deductions were allowed if you had children of family allowance age, with the result that if a person did not accept he was far worse off than if he had accepted for his children of family allowance age. I am wondering if behind all this may be the idea that before too long it will be put on the compulsory basis in the sense that tax adjustments will be made in such a Old Age Security way as to force a man to accept the pension or leave him in a worse position financially than would otherwise be the case. I certainly feel that the matter of the universal old age pension, so far as recipients of war veterans allowance are concerned, should be cleared up without delay. I have had a great many letters from recipients of war veterans allowance, as I am sure other members have. We are still not in a position to be certain of what advice we should give them. The reason is that the government have managed to keep their intentions pretty much in the dark in this respect, and I think that matter should be cleared up quickly. I should like to suggest to the Minister of National Health and Welfare (Mr. Martin) that with respect to the question of proof of age it is a fact that for those persons who cannot produce birth or baptismal certificates it has been made more difficult foy them to prove age today than was the case under the old act. The minister shakes his head, but let me remind him that on their own form they say either the birth certificate or baptismal certificate, or any two of the following. I look down that list, and I find that the provincial authorities were accepting any number of those things, and pensions were being paid on that basis.


LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. Martin:

It is much easier now.

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Frederick Davis Shaw

Social Credit

Mr. Shaw:

It is easy to make an assertion of that kind, but on the basis of actual cases that have come to our attention we find it extremely difficult to find out what is acceptable.

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LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. Martin:

We are having no difficulty. If you have any cases of that kind, please bring them to my attention.

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October 25, 1951