May 10, 1984

GOVERNMENT ORDERS

BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME

PC

Flora Isabel MacDonald

Progressive Conservative

Hon. Flora MacDonald (Kingston and the Islands) moved:

That this House profoundly regrets the two-year delay of the Government in bringing in promised legislation to improve guaranteed income supplements for low-income single elderly Canadians, and condemns the Government for its failure to respond to the innovative proposals of the all-party Parliamentary Task Force on Pension Reform to expand opportunities for Canadians under age 65 to make adequate provision for income in their retirement years.

She said: Mr. Speaker, I am very pleased that the Opposition is able to raise this question of pension reform once again for debate in this House of Commons. We do so in the hope and expectation that somehow it will move the Government forward, if only slightly, to the very real changes which are needed in the pension system in Canada; to make sure that those who are now in greatest need will have their wants addressed; and that there will be changes so that the poverty we see now all too often among our elderly citizens is not perpetuated into the future.

Back in March of 1983, Mr. Speaker, at a meeting of the Standing Committee on Health, Welfare and Social Affairs, I posed a question to the Minister of National Health and Welfare (Miss Begin) concerning the tragic plight in which so many of our elderly citizens find themselves as a result of inadequate income. I asked her when there might be an increase in the guaranteed income supplement so as to relieve their poverty. The Minister responded in this way. Mind you, this was back in March of 1983. She said that "the cost of bringing the single pensioners over the poverty line . . . has been approved by the Government as their first social spending-whenever we can afford it".

[DOT] (mo)

When I posed that question one year ago, Mr. Speaker, it was not the first time it was asked. It was not the last time that it was posed to the Minister, to the Minister of Finance (Mr. Lalonde) and to the Prime Minister (Mr. Trudeau). Each time they were asked about Canada's elderly poor, the Ministers replied that the needs of this group were their top priority and

that legislation to improve their lot would be the first piece of social legislation which would be brought before the House.

Since then the Minister of National Health and Welfare has seen fit to bring in the Canada Health Act. The Government has introduced measures to put restrictions on transfers for post-secondary education. There have been these Bills and others dealing with social issues, but there is still no sign of legislation to address the pressing needs of Canada's 600,000 elderly poor, the group which the Government has said time and again is their top priority.

The fact that we have 600,000 elderly Canadians living in poverty in a country as rich and bountiful as Canada, in a society supposedly as compassionate and humane as ours, is a national disgrace. The fact that this has been allowed to continue month after month, year after year, is a telling indictment of the Government. The Government is bereft of ideas, drained of decency, and unable to recognize the priorities which must be dealt with in this society. I know the Government has its priorities: bail-outs of de Havilland, Cana-dair and Maislin; bonuses for executive officers in de Havilland and the Canada Development Investment Corporation; and the purchase of Petrofina gas stations. We know what the priorities of the Government are. For the people who have, throughout their lifetimes, worked for and contributed to the development of this great country, there is only a promise trotted out time and time again that some day, some time, they too will become a priority.

Is it any wonder, Sir, that today we condemn the Government? We condemn it not only for its failure to introduce legislation that would meet the current needs of today's elderly poor, but also for its failure to bring about long overdue pension reform of the whole system so that we can ensure that the poverty of today will not be meted out to those who will be senior citizens in 10, 20 or 30 years' time. We must begin to come to grips with this issue and reverse what is happening.

Studies, conferences and task forces on pension reform have been going on for years, Mr. Speaker. It would take the rest of my allotted time today to even name all of the conferences and commissions which have taken place, let alone comment on the recommendations which they have put forward. It was the concern about the difficulties encountered by many of today's elderly, and the prospect of even greater numbers being in straitened circumstances in the not too distant future unless corrective measures are taken quickly, that precipitated most of the studies which have taken place. It was the same concern which precipitated the establishment of the all-Party parliamentary task force on pension reform. I want to pay credit to the work of that task force because it worked long and hard

May 10, 1984

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and studied the issues. I believe it came up with some very positive and innovative proposals.

First, I want to examine the current situation in this country. Presently there are some 2.5 million Canadians who are over the age of 65. Of those, 600,000 live below the poverty line. What is critical to note is that most of those 600,000 are single and four-fifths of them, or 80 per cent, are women. They are women who, for the most part, worked full time in the home when they were younger and had little or no opportunity to prepare financially for what we so euphemistically term their "golden years". Even if they receive the full Old Age Security and guaranteed income supplement, it is a total of $534 a month or $18 a day. That amount is $2,000 below the poverty line for people living in medium-sized cities across this country, such as Kingston, Sudbury, Sydney, Kelowna and Sherbrooke. People who live in cities like those, where they receive only the Old Age Security and guaranteed income supplement payment, live $2,000 below the poverty line.

The all-Party task force on pension reform recommended that the income for single persons over the age of 65 should be set at two-thirds of the income of married couples. For those most in need, that would mean a maximum increase of $102 a month of the guaranteed income supplement. However, that increase would be based on a sliding scale downward, depending on other additional income that the pensioners might have. It meant that those most in need would receive the largest increase.

The Government chose not to accept that recommendation. Instead, the Minister of Finance in his February Budget proposed to raise the guaranteed income supplement by $25 a month on July 1 and by a further $25 a month in December. That is the proposal that the Government has brought forward and the proposal that I hope will go through Parliament. But I must ask Government Members today, where is the legislation to implement even that increase? It is less than two months before the first half of that $50 increase is supposed to take effect, yet there is no sign of any such Bill on the Order Paper. Surely the Government, with all its bureaucrats and advisers, cannot be having that much difficulty drafting such a simple piece of legislation. Surely that is not difficult. Perhaps we should ask whether it is the will to find a way that is holding the Government back.

Three years ago, the Minister of National Health and Welfare made this statement in the House of Commons, as reported at pages 8609 and 8610 of Hansard on March 25, 1981:

-we have often repeated the commitment of this Government to bring all the senior citizens who now receive the supplement over the poverty line.

Of course, she did not say when. Therein lies the deception. When statements like that are made by a Minister of the Crown, expectations are raised. The elderly poor anticipate that their burdens will be lessened, but nothing happens except that the limited income that they receive gets stretched thinner and thinner as the costs of the bare essentials of life get higher

and higher. Surely if there is any sense of decency and awareness of priorities left in the Government benches at all, it will bring in the legislation that was promised in the February Budget to increase the guaranteed income supplement.

I do not understand what the holdup is. The Government since that time has seen fit to introduce any number of other measures. Why not this one? Why has the Government not felt that this one was as necessary as any other piece of legislation that could be considered by this House? If this Opposition Day motion does nothing else but provoke the Government into taking action in this regard, we will have achieved something really worth while.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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?

Some Hon. Members:

Hear, hear!

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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PC

Flora Isabel MacDonald

Progressive Conservative

Miss MacDonald:

I would like to ask what are the prospects for those under the age of 65 who are still in the paid labour force or who are working full-time in the home? That subject was addressed by the all-Party task force on pension reform. The task force had two very real concerns in this regard, Mr. Speaker. One was coverage and the other was cost. It came up time and time again.

First with regard to coverage was how to reform the pension system so as to encourage and make it possible for those who are not now in retirement income plans to be able to participate in them. That was the one question we dealt with. The second was the cost of such reform, not only at the outset but the escalating cost to the public purse if these critical measures are not taken to bring all of these people who are not presently in retirement income plans into them. What would be the cost to the public purse down the road if this issue is not dealt with? We looked at the immediate costs and we looked at the long-term costs to the people of Canada. We did so, Mr. Speaker, because the problem is there before us. Old Age Security payments, public expenditure, this year amount to some $12 billion. That is a lot of money, Sir, but that amount will increase rapidly with an aging society. However, if those presently below the age of 65 are encouraged to prepare now for their retirement years, the public expenditure could be reduced.

Let me elaborate on coverage. At present, there are some 2.7 million people who work full-time in the home who have no access to the Canada Pension Plan, let alone any other pension plan. That group was of great interest to us-almost three million people who work full-time in the home. There are as well some five million people in the paid labour force who have no supplemental benefits. They pay into the Canada Pension Plan and that is it. These five million people in the paid labour force are primarily in the $10,000 to $28,000 income bracket. They work for the most part in businesses and firms which do not have pension plans, and they see RRSPs as a vehicle for higher income earners, not for themselves. Both groups that I have mentioned, those who work full-time in the home and the five million in the paid labour force who have no supplemental benefits at the present time, account for a total eight million

May 10, 1984

Canadians who are without adequate pension coverage at the moment.

The Minister of National Health and Welfare has recognized the problem. She did so when she came before the parliamentary task force on March 17, 1983, and said:

I believe coverage is the key issue of pension reform. I really mean extension of coverage to all workers, and that is on a universal basis... You see, the majority of working Canadians do not belong to private pension plans. Only 54 per cent of men and 38 per cent of women in paid employment are protected by private pension plans. These are cold, hard facts.

Those were the cold, hard facts 14 months ago when the Minister said that, and they remain the same cold, hard facts today. The Minister of Finance failed to address this critical issue in his February Budget. He promised to discuss the concept of a homemaker's pension with the provinces, but he did not indicate that the federal Government was committed to bringing homemakers into the Canada Pension Plan in their own right. The Leader of my Party has made that a personal commitment.

The all-Party task force laid out in detail the way in which homemakers could be brought into the Canada Pension Plan. The Minister and his officials certainly had adequate time to study the details of the task force proposal. He must know that the recommendations stipulated that contributions for homemakers' pensions would be from family income and, where this was not possible, would be subsidized by a 0.3 per cent increase in over-all Canada Pension Plan contributions, bringing them from 3.6 per cent to 3.9 per cent of payroll. None of the cost for this would come from the public purse, but the Minister of Finance did not even react to the task force proposal in his Budget or at any time since.

Would he prefer to have the majority of those 2.7 million people who work full-time in the home being put in the position where they have to rely solely on the guaranteed income supplement when they reach the age of 65? What would that do to the public expenditure? What about the five million people in the paid labour force who have no supplemental pension plans? What encouragement was given to them to seek additional coverage? None whatsoever. Unbelievably, the changes proposed to money purchase plans by the Minister in his February Budget, which will mean a reduction in federal revenues of some $300 million annually when they come into effect, will be of greatest benefit to those earning in the upper income brackets, $55,000 or more. The changes may help those who can afford to put $10,000 per year away into such plans, but for people earning only $12,000, $15,000 or even $20,000, that idea does not particularly grab them. They simply cannot indulge in such fantasies.

Instead, the task force proposed establishing a flexible, portable, registered pension account which would have the benefit of a 40 per cent tax credit rather than a tax deduction. This incentive was aimed at encouraging lower to middle income earners, particularly women, to contribute to their own retirement income. Again, there was no response from the Minister of Finance.

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In closing my remarks today, I say to the House that the parliamentary task force recognized the pressing need for real pension reform. So too did the Leader of my Party and Hon. Members on this side of the House. We realize that we cannot go on forever piling burdens of debt upon the shoulders of the next generation and the next, not if we expect the intergenerational contract to be honoured. We have to look after our elderly poor today. We have to be prepared to do more to look after ourselves tomorrow. That will only take place if those presently outside the pension system are given the opportunity and the incentive to participate. That the Government has not allowed.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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?

Some Hon. Members:

Hear, hear!

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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LIB

Eymard G. Corbin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

A ten-minute period is now provided for questions and comments.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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LIB

Douglas Cockburn Frith

Liberal

Mr. Frith:

Mr. Speaker, there is much I agree with in what the Hon. Member for Kingston and the Islands (Miss MacDonald) said this morning. I will have the opportunity later this afternoon to make a speech on the same topic. In my hand I have the Budget presented on December 11, 1979 by the Hon. Member for St. John's West (Mr. Crosbie) when he was Minister of Finance in the Conservative Government. I admit that the poverty level among our elderly is a problem that exists today. It existed five years ago and it existed ten years ago. When the Hon. Member's Government was in power there was only one Budget we can judge by, and on reading through it I see there was no money to increase the guaranteed income supplement in that 1979 Budget. The question is, why not?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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PC

Flora Isabel MacDonald

Progressive Conservative

Miss MacDonald:

Mr. Speaker, one of the great comments I hear across the country about the Liberal Party and the Liberal Government is that it is forever living for yesterday. The concern of today's elderly poor is what is of pressing need. That is what the Government should be addressing at the present time.

The Hon. Member for Sudbury (Mr. Frith) can go back to 1979. I can go back to the 1940s when Mr. Harris, the then Minister of Finance, became known as the "six-buck boy". It was Mr. Diefenbaker who addressed that issue. We can go back over the history of pensions from the time they began, but that is not the issue before us today. The issue today is that there are 600,000 people over the age of 65 who are living in need. The urgency is to get on with doing something about it. I say to the Hon. Member for Sudbury, who I know is concerned about this issue, that he should be pressing his Ministers to bring in this Bill and not be reminiscing about 1979, 1970, 1950 or any other year in the past. It is today that we are concerned about.

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Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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LIB

Douglas Cockburn Frith

Liberal

Mr. Frith:

Mr. Speaker, the point I am making is that since 1980 the Liberal Government instituted a Bill that gave an immediate $35 per month increase and is now proposing a $50 per month increase. Under one Government, by the end of

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May 10, 1984

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December, 1984, the elderly in our country will be $85 per month better off than they were in 1980. That was the point I was making.

If the Hon. Member for Kingston and the Islands is serious in terms of her commitment for pension reform and for the guaranteed income supplement Bill to be passed in this House-and the Opposition House Leader was here just a few moments ago-she well knows that other pieces of legislation are being tied up at the present time. She knows how this goes. The Opposition want to have the Western Grain Stabilization Act introduced and passed as quickly as possible. We on the Government side have several pieces of legislation emanating from the February Budget that we would like to have passed, including the guaranteed income supplement increase and some measures that involve elements of pension reform that were in the February Budget.

Why do we not make a deal? The Opposition wants to have that Bill passed and we have pieces of legislation we would like to have passed. Why do they not instruct their House Leader to meet with ours? We would get these pieces of legislation through as quickly as possible. There are pieces of legislation that we deem to be a priority. That will have to be part and parcel of the deal.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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PC

Flora Isabel MacDonald

Progressive Conservative

Miss MacDonald:

Mr. Speaker, the Hon. Member asks why we do not deal with other pieces of legislation. That was very much the tone and temper of my speech. I think this Bill should have a greater priority. If the Government had any sense of priority, it would have at least put this Bill on the Order Paper. It would have introduced it. It would have drafted it and brought it into the House so that we would know it is there in the whole bargaining process. It is not even in the process where we can debate it.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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LIB

Jack Sydney George (Bud) Cullen

Liberal

Mr. Cullen:

Mr. Speaker, I do not have the statistics in front of me, but I do know the concern that all of us have. I share with the Hon. Member for Sudbury (Mr. Frith) and the Hon. Member for Kingston and the Islands (Miss MacDonald) concern for people who will be retiring and are apprehensive about their retirement income. I like the idea of a universal old age pension. Those who worked and tried to get a pension were entitled to see something across the board. There were others who tried and were not able to do it. CN pensioners received small pensions. Therefore, it made good sense to have an across-the-board pension. It helped those who were not in a position to do it to have a guaranteed income supplement. We piled one more on top of that and required people to contribute to the Canada Pension Plan.

The information I have is that the Canada Pension Plan funding is in some difficulty. There is some apprehension that in order to make it actuarially sound, we will have to increase premiums or face increased costs. Figures I have seen indicate that the time frame is not that far in the future when there will be some difficulty with the Canada Pension Plan.

I listened to the Hon. Member talk about the 0.3 per cent increase and the fact that it would not cost the Government anything. All of the items suggested by the task force involve

some cost. I am concerned that we might push something like the Canada Pension Plan costs too high by bringing in too much at once. We have the old age pension, the guaranteed income supplement and the Canada Pension Plan, which has been improved. There are more people who have access to it today. A small point is in a divorce situation, where the wife now gets half the benefits of the Canada Pension Plan, which should have been the case all along. It is there, or will be, and voluntarily some of us have to do that. The fact that I am 57 and getting closer to 65 may mean that I have a vested interest in this.

I am worried about the costs that we may be imposing on the Canada Pension Plan, all of the people who pay into it, in order to meet all the commitments that both the Hon. Member and I would eventually like to see. I am afraid that if we try to bite off more now, it may have the impact of overloading the system with costs and we will not be able to meet the benefits that should be met today.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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PC

Flora Isabel MacDonald

Progressive Conservative

Miss MacDonald:

Mr. Speaker, the concern that was expressed by the Hon. Member was expressed to the task force on many occasions. There is a perception in the public that there is something drastically wrong or inadequate about the funding of the Canada Pension Plan. Our studies did not bear that out, but they did show that the percentage of payroll that would have to be contributed to the Canada Pension Plan over the years would have to be increased. By the year 2000, we anticipated it would go up to 8 per cent of payroll. That was why we said that the proposal we put forward with regard to the inclusion of homemakers in the Canada Pension Plan would be a contributory one, as with anybody else. If they contribute in the same way, they would not be asking any more or any less from the Canada Pension Plan than you or I. Nor would they contribute any less.

The question is, why should these people in Canada be treated as second-class citizens? That is what is happening at the present time with regard to the Canada Pension Plan and those who can participate in it. What we did was to make sure that this was actuarially possible. In all of the studies that we did and in everything we looked at, we were satisfied that this could be accomplished, but it would have to be on a contributory basis.

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Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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LIB

Garnet McCallum Bloomfield (Parliamentary Secretary to the Minister of State (Small Businesses and Tourism))

Liberal

Mr. Bloomfield:

Mr. Speaker, I have a question for the Hon. Member regarding her proposal. All of us in this House want to see our elderly taken care of in fine fashion. Can she give examples of other countries with better support programs for the elderly than Canada?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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PC

Flora Isabel MacDonald

Progressive Conservative

Miss MacDonald:

Mr. Speaker, I do not look at the needs of the elderly poor in this country in comparison with any other country. I really do not. If they are in genuine need, we have to do something about it. Whether there are better or worse situations in other countries should not be our major concern. Our major concern is, what are we going to do about our problems in Canada? That is the approach which the task force and people on this side of the House have taken.

May 10, 1984

i do not think it is enough to go about saying that people are worse off in the United Kingdom, Europe, Asia or Africa, because we are not able to change the pension plans in those countries. However, we can do something here and we have a responsibility and an obligation to get on with it.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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LIB

Eymard G. Corbin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Order. Debate.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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LIB

Garnet McCallum Bloomfield (Parliamentary Secretary to the Minister of State (Small Businesses and Tourism))

Liberal

Mr. Bloomfield:

Mr. Speaker-

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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LIB

Eymard G. Corbin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

The Chair is sorry but the time for questions and comments has expired.

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Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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LIB

W. Bennett Campbell (Minister of Veterans Affairs)

Liberal

Hon. W. Bennett Campbell (Minister of Veterans Affairs):

Mr. Speaker, I welcome the opportunity to participate in the debate in the House today. To begin with, I believe that one should first examine the point which has been raised by the Hon. Member opposite with respect to her contention that the Government has delayed the introduction of legislation to fulfil its promise to alleviate the difficulties experienced by Canada's single elderly pensioners.

I hear the word "delay" being used quite often. I think we should begin by examining the accomplishments of the Government with respect to pension reform and I think one could then conclude that it is simply not the case that there has been a delay. Contrary to what has been indicated, when examining the events of the past couple of years it becomes very clear that not only has action been taken but it has been consistent with the fulfilment of the Government's 1980 promise of pension reform.

In order to look at the history of the pension reform process, one must go back to the early part of 1981 when, shortly after the election, the National Pension Conference was convened. That conference brought together all of the players in the pension system including business, labour, government and women's groups. These players came together for the first time to look at the real problems of our pension system and to begin moving toward a national consensus on reform.

The Government followed up on the momentum established by this conference with the 1982 publication of the green paper entitled Better Pensions for Canadians. It should be noted that the proposals contained in that paper included the Government's position vis-a-vis income for the single elderly pensioner. I quote from the statement of that position:

-the situation of these single pensioners will be improved as soon as resources permit.

That same paper included a proposal to establish a parliamentary committee to undertake widespread public consultation on the issues surrounding pension reform. As the Hon. Member opposite knows, having served on that committee, that special committee on pension reform was formed on March 1, 1983. In other words, the promise to establish the committee was made in December, 1982 and fulfilled in March, 1983.

As Hon. Members know, the committee members undertook an amazing responsibility. They undertook a study of all of the

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proposals contained in the Government's paper on pension reform. These not only included suggestions for changes to the public pension system of Old Age Security and Canada Pension but also included suggestions for changes to the private pension sector and changes to reflect inflation protection, the special situation of women and pensions and the financial issues associated with those proposals.

The committee heard hundreds of witnesses and scrutinized briefs from all sectors of Canadian society. All areas of vital concern to Canadians were covered thoroughly in its final report. Recommendations concerning each issue were submitted to the Government of Canada in December, 1983, and I might note that under its terms of reference the committee had an assigned reporting date of December 31, 1983. There was certainly no delay on the part of the parliamentary committee.

The Government gave its response to the parliamentary task force only two months later. This response was contained in the Budget Speech of February 15, 1984, made by the Minister of Finance (Mr. Lalonde). In other words, within two months the Government announced its intentions to introduce legislation to improve the financial situation of single low-income pensioners. This announcement did not contain generalized promises. It contained specific proposals to increase the guaranteed income supplement for single pensioners by $25 a month in July of 1984 and another $25 a month in December of 1984.

The same Budget also specified that the guaranteed income supplement program would be further amended to guarantee recipients of partial Old Age Security pensions the same minimum income guaranteed under the GIS program for other Canadians. I might point out to Hon. Members that the parliamentary task force had recommended further study of ways to assist these partial pensioners. The Government chose, however, not to study this issue further but instead to announce its intentions to introduce this proposal at the same time as it introduced the two-stage $50 increase in the supplement for single pensioners.

Let us examine in more detail the $50 increase in the guaranteed income supplement single rate. This increase will benefit current low-income single pensioners, widowed pensioners receiving the spouse's allowance and one-pensioner couples, about 750,000 pensioners in all. As well, some 25,000 persons whose incomes were just slightly too high to qualify for the supplement will now be entitled to receive part of the increase.

This proposed increase is by no means the first step taken to ensure income adequacy for low-income Old Age Security pensioners. In 1979, the guaranteed income supplement was increased by $20 per pensioner household. In 1980, a further increase of $35 was provided to each pensioner household. However, even though single pensioners received the full benefit of the $20 and $35 increases, for those pensioners it was not enough. Single GIS recipients, three-quarters of whom are women, were still not guaranteed an income sufficient to meet their basic needs.

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Various groups and organizations, including the Royal Commission on the Status of Pensions in Ontario, the Canadian Council on Social Development and the Senate Committee on Poverty, have studied the question of benefit adequacy for singles. They all agree that a single individual needs at least 60 per cent of the income required by a couple. Given that two-pensioner couples are already guaranteed an adequate level of retirement income under the OAS-GIS program, it was decided that the guaranteed income level for single pensioners must be at least 60 per cent of the amount provided to couples. The S50 monthly increase in the guaranteed income supplement single rate will do just that. In fact, by December, 1984 this increase, along with the regular quarterly cost-of-living increases, will guarantee single low-income pensioners 62 per cent of the income guaranteed to a two-pensioner couple.

Some Hon. Members will undoubtedly question why the Government did not accept the proposal put forward by the parliamentary task force on pension reform. The task force recommended that a special top-up benefit of $102 per month, taxed back at a rate of 100 per cent, be provided only to single GIS pensioners at the lowest income levels. Unfortunately, Mr. Speaker, analysis showed that the Government could not accept this proposal exactly as it was put forward. The fact was that low-income Old Age Security pensioners could have been worse off than they currently are.

For instance, several provincial governments already provide top-ups to the guaranteed income supplement. These top-ups generally operate with a 50 per cent tax-back structure. This in combination with the 50 per cent tax-back rate used under the guaranteed income supplement program means that low-income pensioners already lose $1 of benefit for every $1 of other income they have. Unless the provinces agreed to fully exempt the first $102 of income a pensioner has, something which would be quite expensive to do, the pensioners with the lowest incomes would effectively lose $1.50 of benefits for every $ 1 of other income they have.

In view of this situation, it proved to be better to make a straightforward increase of $50 per month for every pensioner receiving GIS at the single rate. The wisdom of this course of action has already been proven by the announcement made by the Ontario Government that it will not only pass on this $50 to Ontario pensioners receiving the GAINS supplement but will actually add to the increase to ensure that low-income single Ontario pensioners will be guaranteed 60 per cent of the income of marrieds. That action was possible only because of the way in which the $50 increase has been designed.

I would now like to turn to the second major proposed amendment which will guarantee partial pensioners the same minimum income as provided to the full pensioner under the OAS/GIS program. Whether they have lived in Canada for 40 years or as little as 10 years, all Old Age Security pensioners will be guaranteed an adequate level of retirement income. About 3,000 persons, primarily immigrants, receiving partial OAS pensions will benefit from the proposed amendment in

the first year. This number will rise rapidly over the next ten years as more partial OAS pensioners become eligible. For example, by 1990-1991 it is estimated that as many as 25,000 persons will benefit from this amendment.

As Hon. Members know, Mr. Speaker, the Old Age Security residency rules were changed in 1977. For persons coming to Canada since that date, the old age pension is earned at the rate of one-fortieth of the full amount for each year of residency in Canada after age 18. Partial pensions were introduced to simplify the previous complex rules which not only determined entitlement on an all or nothing basis, but under which some period of residency carried more significance for eligibility purposes than others, depending on when in a person's lifetime they occurred.

The introduction of the partial benefits earned in accordance with the years of residency in Canada enables the federal Government to enter into international social security agreements. These agreements allow new Canadians to bring to Canada the pension rights they have earned in other countries. Such rights can then be combined with the rights earned here to meet eligibility rules for Canadian benefits, such as the ten-year requirement for an OAS. Right now we have agreements in force with five countries; Italy, France, Portugal, Greece and Jamaica. We anticipate an agreement with the United States will become effective this year. In fact, Mr. Speaker, just at this moment the Minister of National Health and Welfare (Miss Begin) is in Belgium to sign a similar agreement with that country.

As well, we have negotiations under way with a number of other countries. However, despite progress in this regard, it remains that some pensioners do not have access to foreign pension income, nor income from any other source. As a result, they have nothing to fill the gap between the partial old age pension they receive and the amount of the full pension which lifelong Canadian residents receive.

Significantly, Old Age Security pensioners receiving a partial benefit can receive maximum GIS benefits. However, because they do not receive full basic pensions, partial pensioners are guaranteed less total income than is guaranteed to persons who have lived in Canada all of their lives. The proposed amendment will mean that low-income pensioners receiving partial OAS benefits will qualify for whatever additional guaranteed income supplement benefits are necessary to give them the same minimum income level as other pensioners. This change will eliminate any adverse consequences which could have arisen as a result of the amendments to the OAS Act in 1977. As well, it is consistent with the goals of the guaranteed income supplement program, namely, ensuring income adequacy to all pensioners in Canada.

There is no doubt that every Hon. Member of this House would have been happy to see this legislation introduced earlier. The needs of the low-income elderly have been known to all of us. However, the economic circumstances of a worldwide recession made it necessary for the Government to wait until it could responsibly make the commitment implied by the $50 increase in the GIS single rate. This increase is going to

May 10, 1984

take place beginning this July. That is an undertaking which was given in the February Budget and is one which was not given lightly.

Hon. Members know that thousands of pensioners are now counting on this increase. They also know that the Government will bring the legislation forward shortly, Why, then, is there now this suggestion of delay? What can be accomplished, Mr. Speaker, by this suggestion except to create needless anxiety among our pensioners? Pensioners, Mr. Speaker, have enough to contend with in making ends meet without worrying that somehow the promised increase will be denied to them. I know that Hon. Members from the benches opposite will want to reassure pensioners that when this legislation is brought forward, it will be given speedy consideration.

For our part, Mr. Speaker, I can assure Hon. Members of this House, and all Canadians, that the Government of Canada remains committed to these promises and that the introduction of the proposed legislation is imminent. With the co-operation of all Hon. Members, the legislation can be passed quickly, and since Opposition Members have expressed their support for these proposals, I have no hesitation in assuring low-income single pensioners that they will see the S25 increase in their GIS pension cheques in July.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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LIB

Eymard G. Corbin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Questions and comments.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY ALLOTTED DAY, S.O. 62-RETIREMENT INCOME
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May 10, 1984