OTTAWA – Feb. 3, 2012, Alice Wong Minister of State (Seniors), revealed that the government’s plans for reforming the retirement age will be revealed in the 2012 budget.
Ms. Elizabeth May (Saanich—Gulf Islands, BC GP): Mr. Speaker, we hear there will be reasonable time. I find the message from the government confusing. We are told on one hand that we are panicking needlessly about things the Prime Minister said in Davos. On the other hand, seniors are very concerned and so are people approaching retirement age.When the minister says there will be reasonable time for a phase-in of, for instance, moving the point of earliest receipt of benefits to age 67, how much time does the minister think is reasonable?
Hon. Alice Wong (Richmond, BC Conservative): Mr. Speaker,
we are currently working on that and when the budget comes down, the details will be there. (note: This year's budget is expected to be released in March.)
She also said yesterday, "No senior will lose a penny.":
Madam Speaker, I will be splitting my time with the member for Simcoe-Grey, ON (note: Kellie Leitch) I am pleased to have the opportunity to respond to this misleading motion and talk about what our government is doing for Canada's seniors. In my role as minister, I have travelled across Canada meeting many seniors. I have listened to what they consider to be important. Let me be clear.
No senior who is receiving benefits today will lose a penny because of the changes we will be proposing. Any changes will be announced with a long notice period and be brought in gradually.
It is unfortunate that members of the opposition are attempting to scare seniors to score cheap political points. This motion falsely attempts to connect deficit reduction with the necessary changes to the OAS (
Old Age Security pension). There will be no change to the OAS until well after the budget has been balanced.
I can assure Canada's seniors that the support our government has shown them will continue. We all know someone, a family member, friend or neighbour, who is a senior. We care about their financial future. We want to ensure that the social programs we have come to rely on are sustainable for the next generation.
As someone who was not born here, I can speak from personal experience. Canada is an example to the world when it comes to the care of seniors. We are committed to ensuring seniors have the highest possible quality of life for today and tomorrow. We must ensure the programs and services that give us this quality of life are sustainable for all citizens in the future. Striking this balance is not a choice. It is a necessity. Good choices now mean we will be able to maintain our quality of life today and in the future.
I will take a few minutes to talk about what Canada is doing to help seniors currently. Our government has consistently shown a commitment to helping the most vulnerable seniors across the country, not just with promises but with action.
This summer I was excited to see the new guaranteed income supplement top-up benefit start helping Canada's most vulnerable seniors. This top-up is the biggest increase to the GIS (note: Guaranteed Income Supplement) in 25 years. It represents a $1.5 billion investment over the next five years. This top-up works out to $600 annually for a single senior and $840 for a couple. That is just the latest improvement we have made to the GIS.
We increased the GIS in 2006 and again in 2007, for a total increase of 7% above regular adjustments for inflation. In budget 2008, we increased the GIS earnings exemption from $500 to $3,500, meaning that GIS recipients keep more of their hard-earned money. We also reduced bureaucratic red tape by introducing automatic GIS renewal for seniors who file annual income taxes. Our work does not stop there. There are a number of areas where seniors want action and we are responding.
Seniors want leadership in their communities. In budget 2011, we provided $10 million over two years to increase funding for the new horizons for seniors program. This helps seniors use their leadership, energy and skills to benefit communities across Canada. Everywhere I travel seniors tell me how much they appreciate low taxes, thanks to our government. We have provided over $2.3 billion a year in additional tax relief to seniors through measures such as income splitting and increasing the age credit.
Affordable housing is an important measure to combat senior poverty. We invested $400 million over two years under Canada's economic action plan for the construction of housing units for low-income seniors.
Now more than ever, good health is a concern of seniors. We are supporting positive and active aging through the collaborative age-friendly communities initiative, physical activity tips for older adults and falls prevention initiatives.
Having a voice in decisions is also important to seniors. This is why we created the National Seniors Council in 2007 to provide advice to the federal government on the well-being and quality of life of our seniors.
We proudly established October 1 as National Seniors Day in Canada. On this day, we recognize the significant and on-going contributions seniors make to families, communities, workplaces and society.
I think we can all agree that seniors abuse cannot be tolerated. That is why in budget 2008 we invested $13 million over three years to help seniors and others recognize signs and symptoms of elder abuse and to provide information on available support.
Outcomes matter. The sum of the efforts I have highlighted so far today are resulting in a better Canada, a safer Canada, a Canada that respects seniors and makes them a full partner in the decisions we make as a country. Statistics show we are moving in the right direction.
The low income rate for seniors has declined dramatically from 21% in 1980 to 5% in 2009. The low income rate among seniors in Canada is now one of the lowest rates among member countries of the OECD (
Organisation for Economic Co-operation and Development). That is a record of which we can be proud.
To stay on the right track, we have to plan for the future. That starts with looking at facts, not just opinions, because facts give us a very good picture of what the future will look like, both in terms of opportunities and challenges.
Canada, like many other countries, is facing major demographic challenges because of an aging population. Our aging workforce will present a growing and serious economic challenge for Canada and other developed countries. In Canada the number of seniors will nearly double within two decades.
Among that growing number of seniors, the number of basic OAS pension beneficiaries is also expected to grow, from 4.7 million reported in 2010 to 9.3 million projected by 2030. Population aging involves both current and future generations.
In the future, there will be fewer workers to support higher costs of programs such as the old age security, which is funded from general tax revenues on a “pay-as-you-go basis”. OAS benefits are paid out of the tax revenues collected each year. As the ratio of workers to seniors changes, it will mean less workers have to pay for more benefits.
Currently there are approximately four workers for every retiree. By 2030, that number will have changed to two workers for every retiree. This is why it is critical that we must make changes to the OAS program. As the ratio changes, the cost to the taxpayer of these benefits becomes increasingly high.
The Canada pension plan is a different story. This program does not involve any tax dollars. It is entirely funded through the contributions of employers, employees and the self-employed. These contributions are invested over the life of a worker and grow to cover the cost of their retirement benefits.
The chief actuary recently examined the CPP (
Canada Pension Plan) and said that it was sound for the next 75 years. Therefore, it is clear that we need to make changes to the OAS to ensure our retirement security system stays strong and that it is available to for our children and our grandchildren.
I can assure Canadians that we will provide the time required for younger generations to plan for their retirement. Let me reiterate that people currently receiving OAS will not lose a cent.
The NDP is attempting to confuse seniors. The changes we are proposing will happen long after the budget is balanced. This has nothing to do with deficit reduction. Whether it be through lower taxes, increased funding to fight poverty or simply to make our economy stronger, Canada's seniors are the winners.
Because the motion does not reflect the intent of the government and because it is hopelessly misguided, we simply cannot support it. That is why our government will vote against the motion. I encourage all members of the House to do the same.
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