Hon. Monique Begin (Minister of National Health and Welfare) moved
that Bill C-40, an Act to amend the Old Age Security Act, be read the second time and referred to the Standing Committee on Health, Welfare and Social Affairs.
She said: Mr. Speaker, let me say, first of all, that I certainly appreciate the healthy applause rising up from the Opposition benches. This augurs well for the debate on this Bill! I assume that Members will vote unanimously in favour of what will probably be the last Bill we shall be proposing in support of the Guaranteed Income Supplement, because once this Bill is passed, from then on all senior citizens will necessarily be above the poverty line.
As you know, Mr. Speaker, Bill C-40 is basically focused on adding, in two slices, a full $50 a month, on top of the usual indexation, to what we call in the jargon "single pensioners" receiving the supplement. That means hundreds of thousands of seniors who are widows, widowers, single, separated, divorced and so on, who have no means or very little income other than what we call the "public pensions".
That is what this Bill is intended to do. However, we took the opportunity-and I am really confident that we will obtain the support of all Hon. Members of this House-to make other changes which will improve the pension system at the same time. These are small changes affecting perhaps 3,000 or even as few as 50 people a year. These are Canadians who for some technical reason fall between two chairs when it comes to the guaranteed income supplement. This, in a way, is a means to an end, and it is a happy end because it is the end to a very unhappy situation.
Some seniors, because of the limitations of, I suppose, the social sciences in preceding decades, still suffer a lot by not having a basic income guaranteed to them. Let me explain. In Canada, as in many other countries, I suppose-I would not know for sure until I researched the question-when we established the pension the concept was that a person who was
alone, for whatever reason, would receive half of what a couple receives. However, because of studies of family budgets and so on we now know that to live alone costs more than 50 per cent of a couple's needs. For example, the basic one-bedroom apartment, hydro and telephone will cost the same for a person alone as for a couple. Therefore, many groups-and in all fairness we should refer to them right now in this House-such as the Royal Commission on the Status of Pensions in Ontario, the Canadian Council on Social Development, the Senate Committee on Poverty and, I believe, the National Council on Welfare, have advocated that pensioners living alone and in need receive 60 per cent or a little more-which is what they are going to receive-of the budget of a couple.
That is why-and I do not say it in apology but in explanation-the couples who receive the supplement will not at this time receive a special increase. They will receive their usual indexation in July, next month. It is those, however, who are single and receive the supplement who will receive an additional $25 a month starting with their July cheque, and another additional $25 in their monthly cheques beginning in December. That, in a nutshell, is the purpose of this Bill.
I should mention that this increase will also be provided to widowed spouse's allowance recipients. Whatever their age or status, if they become widowed and they receive the spouse's allowance, which means they are younger than 65, which also means they are automatically in need, they will get the full $50 as well. In that way we are correcting what I would call a mistake of the past, of which I myself did not know. [Translation]
At this point I would like to say, Mr. Speaker, and I think it is very important, that my colleague, the Hon. Member from Montreal-Sainte-Marie (Mr. Malepart), is to be commended for having brought this problem to the attention of the Government. When individuals receiving the spouse's allowance are widowed-and in most cases they are women-they do not receive the special increase for single persons because of a technicality in the Act. However, they are single, to all intents and purposes.
We are therefore correcting this, so that all widowed spouse allowance recipients will now receive the additional $50 provided in Bill C-40.1 think this is extremely important. [English]
I will make the point rapidly that many people who get this $50 are women. Unfortunately I do not have in my notes the exact percentage, but it is a majority and quite a high percentage. It reflects the make-up of society. The Hon. Member for
June 4, 1984
Old Age Security Act
Kingston and the Islands (Miss MacDonald), even if she is not always very nice to me when she speaks in this House, has joined forces with many of us to obtain changes in the pension system for homemakers. They raised the children, did unpaid voluntary work, or worked in the service industry or perhaps the small business enterprise of their husband, father or members of their family. They often had to work to help the family make ends meet without pay or with small pay and no private pension.
I also want to bring to the attention of Canadians that the group forming what we call the GIS pensioners, those who receive the supplement, are people in need. If they were younger than 65 they would be on welfare. We should not hide that fact from ourselves. We call it a supplement and there is no stigma attached to it, which I am very proud of. These people are in need and this Bill is not providing a luxury for them, it is a necessity.
To come back to this point of information, which I think should be shocking and shaking us all towards pension reform, the fact is that 235,000 single-rate pensioners in Canada have to receive the full supplement to the basic old age pension. That means they have absolutely nothing else in the way of income to live on during their old age. This is quite shocking for any country. It is dangerous as well because it means that a great number of Canadians, when they reach the so-called official age of retirement, will suffer quite a substantial fall in their standard of living. They may have their home paid for, especially in small towns or in rural Canada. However, in a city such as Montreal where 80 per cent of the people are tenants, they will not enjoy that benefit. That is a very worrying situation for the future and we want to address it.
Before moving to my next point I will explain something. The so-called single pensioners who get the supplement, even if only a partial supplement, will get the full additional $50, twice $25. People should know that. We are broadening the base of those who will get the supplement. There are those in the grey area of being very close to the poverty line. We are increasing the base. Our departmental estimates indicate that 25,000 old age pensioners who are not receiving any supplement will start to qualify immediately for a small supplement. They should check with my numerous offices all over the country and their local MPs to see whether they will qualify. These people have very little income and should apply.
Recognizing that single GIS pensioners are in need of better financial assistance was very important but in a way was not new. I will refer to the task force of parliamentarians of the three Parties who participated in what is now called the great pension debate. The task force on pension reform which studied the reform of private pensions also studied all pensions, including the two public pensions. For these GIS pensioners the task force recommended a special top-up benefit of $102 per month taxed back at 100 per cent in the lowest income group. Many Members and many Canadians think that would have been much better. However, it would have totally
changed the system. It would have been better for some but it would have eliminated a lot of GIS pensioners from receiving the supplement.
Let me explain why I did not recommend that to the Government. The reason is that the $102 per month with a tax back rate of 100 per cent would have given more money immediately to those who have nothing but the GIS. However, any pensioners receiving any money from another source would have that amount deducted from their GIS. That is a problem. As a Minister I could not talk with the task force on pension reform because it must operate independently, but I think it is fair that I explain today to the House and my colleagues why I did not recommend that to the Government.
Our system has two advantages which would have been lost by the recommendation of the task force report. One advantage of our present system is that it is proportionately adapted to each dollar of additional income from other sources. It is a fine graduation from those who receive the full OAS and the GIS with no other income to those with limited other income, and finally to those who have other income but not enough to match what is missing by even $10 a month and takes them over the poverty line. There is no disruption in this system; it is a scale that is finely tuned to the realities.
The second advantage is that we only take back 50 per cent of other income and thereby leave them 50 cents on the dollar. This means that we have built in within the public pension system in Canada incentives for people to build up their own savings. I do not know if I am turning into a capitalist, I do not think so, but I believe it is sacrosanct to build in and keep incentives for Canadians to save toward their older days.
Topic: GOVERNMENT ORDERS
Subtopic: OLD AGE SECURITY ACT