44th Parl. 1st Sess.
March 29, 2022 10:00AM
- Mar/29/22 5:44:40 p.m.
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moved:
That:
(a) the House recognize that (i) seniors deserve a dignified retirement free from financial worry, (ii) many seniors are worried about their retirement savings running out, (iii) many seniors are concerned about being able to live independently in their own homes; and
(b) in the opinion of the House, the government should undertake a study examining population aging, longevity, interest rates, and registered retirement income funds, and report its findings and recommendations to the House within 12 months of the adoption of this motion.
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- Mar/29/22 5:45:26 p.m.
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She said: Mr. Speaker, I rise today to talk about seniors, who have contributed throughout their lives to our country, society and the economy. Seniors have worked tirelessly, served Canada and communities with dedication, raised families and paid taxes. They deserve a dignified retirement free from financial worry.
However, far too many seniors remain concerned about their retirement savings running out. They are worried about not being able to live independently in their own homes. None of us can be okay with this. I am always grateful for the opportunity to listen to seniors' groups in Etobicoke North, the Asian Humberwood Seniors, Caribbean Seniors' Social Club of Toronto, Democratic South Asian Seniors Association, Humberwood Seniors, South Asian Seniors, St. Andrew's Senior Club and Sri Lankan Tamil Seniors Group of Etobicoke.
I love to listen to their stories, benefit from their wisdom, and hear what they need. During the last election in Etobicoke North, I spoke to senior after senior over the telephone. One of the highlights of the election was when a woman who used to sing in Welsh choirs and teach singing sang Pure Heart in Welsh to me over the telephone.
With such joy came real heartache. The overwhelming issue I heard during the last election was that seniors need help to ensure a dignified retirement. This was vastly different from my previous four elections, when the overriding issues were jobs and the economy. Some seniors I spoke to were in their 90s and even their early 100s, and had served during the Second World War. One was a 48th Highlander who said that eight decades ago, they had stepped up for their generation and for future generations, and that their motto is Dileas Gu Brath, which means “faithful forever”.
I spoke to women who had worked in the war effort. I spoke to teachers who had taught generations of young Canadians for over three decades. I also spoke to many women who had not only worked and cared for their families but also cared for numerous extended family members as they aged, some for over decades, and with no remuneration. I spoke with some who had recently lost their partners and were worried if their savings would be enough to carry them through.
Some seniors stress that, in their words, they had done everything right and had saved for their retirement because they had the means. Not everyone does. However, they were forced to take out money from their registered retirement income funds, or RRIFs, when they did not need the money, when they were not sick, when they had not lost a partner, or when they did not need care.
However, when they really needed the money, it had been depleted through mandatory withdrawals or, in some cases, was gone altogether. They said that while their costs were always increasing, their RRIFs were forever decreasing.
Their challenges did not end there. Sometimes RRIF withdrawals pushed seniors into a higher tax bracket and could even result in clawed back old age security and guaranteed income supplement benefits. For seniors in non-profit housing, withdrawals could mean increased rent because rent is tied to income.
Today, when Canadians turn 71, they must convert their registered retirement savings plans, or RRSPs, to RRIFs and begin making mandatory withdrawals at a set rate. Seniors are concerned that the current rates do not reflect that people are working longer than ever before, the length of retirement is generally longer and life expectancy is increasing. When they are forced to draw down on their savings, they risk outliving their funds, and that problem is compounded by lower rates of returns.
I hope that colleagues in the House can come together to start a national conversation around registered retirement income funds, or RRIFs. Specifically, Motion No. 45 asks the government to undertake a study examining population aging, longevity, interest rates and registered retirement income funds, and record its findings and recommendations to the House within 12 months.
All Canadians matter, and they matter throughout their lives. The job of governments is to provide the support Canadians need across their lifespan. We are either seniors today or, hopefully, seniors-in-waiting. We are all in this together. The well-being of older members of our society must be a concern to all of us.
There will be those who ask why we need another study. In this case, requesting a comprehensive study is a good first step to starting a national conversation; focusing attention on RRIFs; collecting evidence; hearing about the realities Canadians are living today, more than two years into a pandemic; and, most importantly, having the government come back to the House within 12 months with real recommendations and options to help Canadians.
There is also a long-standing debates regarding mandatory RRIF minimum withdrawals and the scheduling of withdrawals, whether to increase the mandatory withdrawal age, reduce the rate of withdrawal set for each age, do a combination of these or eliminate mandatory withdrawals. These are just a few options, and the study could identify more. There are also unknowns regarding the full financial market implications of COVID-19, and how they will vary from person to person.
Private member's motions cannot commit the government to invest public resources. This would require subsequent decisions. Having said this, the motion does focus attention on an issue Canadians very much care about and are anxious about. It encourages the government to do real work and to come back to this House with recommendations on a way forward.
Let me address why this motion focuses on RRIFs. There are over seven million Canadians who are 65 years and older today, and 60% have RRIF savings. That is over four million people, and an opportunity for the government to make recommendations that potentially could help millions of Canadians. While RRIFs cannot be the whole answer to ensuring a dignified retirement, free from financial worry, they are an important part of the solution.
Moreover, Canadians and organizations, such as CanAge, CARP, the C. D. Howe Institute, the Investment Industry Association of Canada and the National Association of Federal Retirees, have been asking for changes to RRIFs.
Today, seniors are forced to make more and more difficult choices as they face the rising cost of living for everything from electricity to food to gas. This compounds the cost of aging and the difficulties brought about by two years of life during the pandemic. In short, this is the time to look at RRIFs, to study how to better support seniors today, how to better protect the middle class and how to better support seniors of tomorrow.
Seniors know that the rules around RRIFs have not kept pace with the times. Canadians are living longer, and that is a good thing. However, with increasing age, seniors may also have increased care needs. Canadian life expectancy is now 82 years of age, and the age cohort of those who are at least 85 years old is growing four times faster than the rest of the population, according to Statistics Canada data.
While almost eight million Canadians provide care to a family member or friend, almost half of these provide care for a parent or parent-in-law, yet seniors are still struggling. I have spoken to people in their late 90s who have increasing care needs, who have lost their partner, their children and their friends, and their RRIFs are gone. As one woman said to me, “I see no option but to sell my home, the place where I raised my children. I can't afford the care I need because everything I saved for is gone.”
This is a reality for far too many women, who often live longer than men and are disproportionately and negatively impacted. Moreover, the baby boomers, the large generation born between 1946 and 1965, are aging. The oldest of the baby boomer generation are just 76 years old today. Between 2017 and 2037, Canada's population of seniors, those age 65 and older, is expected to grow by a staggering 68%. The Canadian Institute for Health Information predicts that, over this period, the number of seniors in Canada will reach almost 10.5 million.
Importantly, care for aging parents may shift as baby boomers have had fewer children. Adult children have been and continue to be the backbone of long-term care in Canada. In fact, research by the National Institute on Ageing at Ryerson University found that 75% of all care is being provided informally by close family members. The same institute also shows that the cost of publicly funded, long-term care for seniors, including long-term care and home care, is expected to more than triple in 30 years, rising from $22 billion to $71 billion in today's dollars.
Canadians are also working longer than ever before, many because they lack private retirement income and they have to work. The percentage of seniors working past age 71 has increased from 15% in 1995 to 24% in 2015, and salary was the main source of income for almost 44% of seniors in 2015, up from 39% in 1995.
Increased longevity and longer retirements mean that mandated RRIF withdrawals put people in a position to outlive their savings as they age, which threatens retirement security. Seniors' savings are further impacted by lower investment returns. When outdated withdrawal rules combine with increased longevity and reduced investment returns, it causes exponentially greater problems for seniors.
In short, Canadians are facing a perfect storm when it comes to long-term financial retirement security. Workplace pensions are becoming less common and interest rates are at historic lows, meaning income is going down while retirement costs are going up. At the same time, Canadians are living longer than ever before, while family size has decreased to historic lows. This matters as adult children have typically provided most of the caregiving so that seniors can stay in their homes.
However, solutions do exist. Rules concerning RRIFs have changed before and they can change again. After RRIFs were first introduced, amendments were made in 1986, 1992, 2015 and most recently in 2020.
Canada's seniors contribute to our communities, country and society in countless ways. They have helped shape our country, and they have raised, mentored and invested in generations of Canadians. They are our parents, grandparents, friends, neighbours, workers, volunteers, and they matter. We must do more than just thank them for everything they have done for us and our country. After all, they laid the foundation for a better future for all of us.
One of the best measures of a country is how it treats its older citizens and the most vulnerable. Seniors worked hard, played by the rules and deserve a dignified and secure retirement free from financial worry. I know that every member in the House cares about seniors and ensuring they have a dignified retirement. My colleague has done decades of work on this specific issue. Our colleague for Edmonton West has previously brought forward a bill concerning RRIFs.
Friends, with this motion, we have an opportunity to do something really important and impactful. We can come together to start a long overdue conversation, encourage the government to gather evidence and come forward with recommendations to improve RRIFs for Canadian seniors. Most importantly, we have an opportunity to do something for those who have given us so very much.
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- Mar/29/22 6:00:44 p.m.
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Mr. Speaker, I welcome my hon. colleague to the House. I look forward to meeting.
Our government has undertaken many things for seniors. One of the first things we did was to restore the age of eligibility for OAS back to 65 from 67. I do not want to talk about accomplishments. What I want to say is that the RRIF minimum withdrawal rules were established in 1992 and retirement financial circumstances have changed. The RRIF policy should adapt to the current environment. Canadians are living longer. They are facing longer retirement. Workplace pensions are becoming less common. Interest rates are at a historic low.
The reality is that income is going down while retirement costs are going up and fewer adult children are available to provide care to aging parents. We really are facing a perfect storm. The solutions exist. That is why this motion encourages the government to come back to the House within 12 months and give real recommendations and options to help Canadians.
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- Mar/29/22 6:13:42 p.m.
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Mr. Speaker, I rise today to speak to Motion No. 45 regarding the financial security of seniors. When this was first proposed to me, my initial reaction was to think that this has already been done, and we already have solutions that could be put in place now. However, as the Bloc Québécois critic for seniors, I will give this matter all the attention it deserves. Members will understand that I have studied the content of this motion with great interest. Let me assure the House that the Bloc Québécois will vote in favour of the motion.
The motion asks that:
(a) the House recognize that (i) seniors deserve a dignified retirement free from financial worry, (ii) many seniors are worried about their retirement savings running out, (iii) many seniors are concerned about being able to live independently in their own homes; and
(b) in the opinion of the House, the government should undertake a study examining population aging, longevity, interest rates, and registered retirement income funds, and report its findings and recommendations to the House within 12 months of the adoption of this motion.
For some seniors, however, this means another year of making tough choices.
My speech will focus on three things. First, I will talk about how the Bloc Québécois has fought hard for an increase in the old age security pension. Then I will talk about pension indexing and the protection of retirement funds.
We are not opposed to the federal government conducting studies on the financial situation of seniors, as Motion No. 45 proposes, because it is important to seek out new tools that would enable seniors to better take advantage of their financial wealth and enjoy the best standard of living possible. No one can be against apple pie.
On one hand, we have seniors who have accumulated a fair amount of assets during their life, it is true, but who nonetheless face financial challenges once they retire. On the other hand, we have more vulnerable seniors who absolutely need the support that the social safety net provides. Let us not forget that one in 10 seniors live close to the poverty line. These two groups of seniors do not have the same concerns, do not think the same way and do not turn to the same solutions.
This evening's motion has more to do with the first group of seniors, but that does not mean that we should not also talk about the second group, the so-called most vulnerable seniors who need our help.
Although many seniors have a decent amount of savings when they retire, they are often left to their own devices when it comes to withdrawing that money, even though they are in situation where the risk of longevity could negatively impact their savings, in other words, they could outlive their savings.
Another poll by RBC had similar findings. When respondents from Quebec were asked about their main concerns regarding their retirement finances, 52% of them were worried about not having enough savings. That number was higher than anywhere else in Canada. Some 42% of Quebeckers also expressed concerns about being able to maintain their standard of living. In addition, 31% of Quebeckers expressed concerns about the cost of health care, and again that number was the highest in Canada.
After Japan and South Korea, Quebec has one of the fastest-aging populations, a demographic challenge that is expected to peak in 2030.
The aging population presents many challenges, but there are a number of things we can do to improve living conditions for seniors, and in particular their financial situation, without conducting a new study.
First, the government needs to substantially increase old age security for all seniors 65 and over, on an ongoing basis.
Obviously, we are also not opposed to a motion calling on the House to recognize that all seniors deserve “a dignified retirement free from financial worry”. In fact, seniors' quality of life and their financial security are among the Bloc Québécois's top priorities, and we act accordingly.
Members will recall that, last year, the Bloc Québécois got a motion passed calling on the House of Commons to increase old age security. Everyone but the Liberals supported the motion.
There is currently a petition to increase OAS by $110 a month for people 65 and up. I am sponsoring it, but it was submitted by Samuel Lévesque of Saint‑Eustache on behalf of his grandparents with the goal of achieving intergenerational equity.
Still, it is surprising that the Liberals would put this kind of wording in their motion when they voted against our motion and chose to increase OAS by 10%, but only for people 75 and up, thereby creating two classes of seniors.
That is a funny way of recognizing that seniors have a right to a retirement “free from financial worry”. By making this choice, the Liberals are abandoning seniors aged 65 to 74, who account for about half of those collecting OAS, 57% to be precise. In other words, the government is abandoning 3.7 million beneficiaries.
Regardless of what the Liberals think, financial insecurity does not hold off until people turn 75. The FADOQ agrees. We can share numerous examples of people experiencing financial insecurity before the age of 75. Any of my colleagues here can attest to that.
Given Canada's less-than-stellar record on income replacement in retirement, we might at the very least have expected the Liberals to implement the 10% increase more quickly and to extend it to those 65 and up.
It is also hard to understand how the Liberals can propose the notion of a “dignified retirement free from financial worry” considering how they handled the CERB and GIS file. Despite knowing about the problem since the spring of 2021, the government took too long to correct an inequity in the interaction between CERB and GIS.
Many seniors have had their GIS cut since last July because they legitimately received CERB payments in the previous year.
The member for Joliette and I sent letters to the Minister of Finance and the Minister of Seniors on two separate occasions to demand that the situation be fixed as quickly as possible. It was not until 2022, following significant pressure from the Bloc Québécois, that the government finally decided to take action and reimburse the affected seniors for their losses.
Second, let us talk about the indexing of pensions. It is especially important to talk about it now, considering how high inflation is and how the people most affected are those on fixed incomes, such as seniors.
For a dignified retirement free from financial worry, benefits need to be increased. The transition to retirement usually means a major drop in the average standard of living. According to OECD estimates, the net pension replacement rate was 50.7% of pre-retirement income in Canada in 2018, while the average for member countries was 57.6%. The EU average was 63%.
The runaway inflation we have been seeing for some time now is driving up the cost of groceries and rent. This is having an impact on seniors' finances. Those who are in a tough financial situation have been hit hard, as evidenced by the increased use of food banks everywhere. Organizations that help homeless women have noticed an increase in the number of elderly women among their clients.
The Association québécoise de défense des droits des personnes retraitées et préretraitées, an organization that advocates for the rights of retired and pre-retired people, has noted an increase in incoming messages over the past year, including dozens of emails from seniors who have ended up in disastrous situations. A person's ability to react to the rising cost of living is obviously limited when that person no longer has paid employment.
When it comes to indexing, we know that OAS and the GIS are indexed to the consumer price index. The indexing rate for 2022 is 2.7%, based on the previous year. However, according to Statistics Canada, the rate of inflation reached 5.1% in January 2022, or nearly double the indexing rate. Even setting aside this one-time discrepancy between the indexing rate and the actual inflation rate, what about the performance of the calculation method in the long term?
Indexation is a key determinant of the quality of benefit coverage. As the average life expectancy has increased in recent years, indexation of pensions has become more important, because the payments are made over a longer period of time. The standard of living and purchasing power of seniors are therefore directly affected. Purchasing power is affected when a person's pension increases at a slower pace than the cost of goods and services. It is a question of math.
For example, if the projected level of inflation for the next few decades is 2%, this means an approximately 50% decline in purchasing power over 30 years if a pension is not indexed.
Many pension advocacy groups are suggesting that pensions be calculated based on trends in wages rather than trends in the consumer price index. Many have decried the current situation, including the FADOQ, which spoke out against the sluggish indexation in July 2021, pointing out that the increase is not even enough to buy a coffee at Tim Hortons.
Third, concerning pension funds, my colleague, the member for Manicouagan, worked very hard to protect Bill C-253, which was introduced by that member in 2020 and then died on the Order Paper when an election was called. All four parties had been in agreement, but that bill died anyway. Another bill had met the same fate when the 2019 election was called. We have not made progress.
It is up to the Government of Canada to pass legislation to prevent these mishaps. The public understands very well that we must do everything we can to enhance and protect seniors' buying power. We all know that the population is aging. The number of people over the age of 75 in Quebec is increasing and will double by 2040. The number of people aged 85 and over is actually expected to triple during that time.
We must also help more seniors remain in the labour force. The Bloc Québécois made various proposals during the election campaign. We suggested that a tax credit for experienced workers be created. We also proposed that seniors who want to work longer be allowed to earn a higher income for the purposes of calculating the GIS.
I would like to make one last remark. Having worked in the community setting, at an organization that sought to raise awareness about elder abuse, I am very aware that it is not cool to talk about old people. They are seen as a drain on our society. In other words, we do not care about old people. Let us stop being ageist and recognize them for who they really are: a grey-haired source of strength. They deserve recognition for everything they have done for our society over the years. Truly, let us work together for seniors in our society.
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- Mar/29/22 6:32:55 p.m.
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Mr. Speaker, I am really pleased to stand and speak to the motion put forward by the hon. member for Etobicoke North.
I listened to the previous speaker's comments about her mom being in a retirement home and the added expenses and so on. The whole core of the motion my colleague put forward is to talk about RRIFs and the fact that when someone is 71 years of age, they have to start taking out the money that they put away for years. That takes a lot of the money. People are living longer, and they are being forced to start taking money out at 71 years old, which often puts them in a higher tax bracket. By the time they are in their mid-80s, they often do not have any funds left. They were forced to take all of their savings when they did not even need it, and then they were taxed on it.
As we promote RRIFs and RSPs and all these programs that we bring in, we have to pay attention to what happens when people get to be 71 and are forced to start taking money out of their RRSPs at a much higher tax rate. If a senior ends up in a retirement home or another centre when they are in their mid-80s, they have limited funds. How long is their money meant to last?
The whole intent of the motion that my colleague has put forward is to focus on the issue of RRIFs and to get the government of the day to change the current system and allow people to hold on to their RRSPs until 75 or 80 or whatever the magic number is. People are living much longer, so they need to hold on to their money and not end up having to give it back to the taxman.
Back in the days of the Harper government in 2010, I was the critic for seniors. We did a study and a white paper on the whole issue of what we needed to be doing for seniors. It was a variety of things. One of them was of course to change the RRIFs. That was in 2010. We were talking about the very issue that my colleague has on the table now, to change the RRIFs so we would not have to start pulling out all of our savings at 71 years of age.
I would fully expect that everybody in the House would support something that makes sense and would end up helping seniors, because I know we all have the same feelings for seniors and we want to make sure we are helping them as much as we can. After this motion is passed, I would hope that within the 12-month period of time, the government would come back with a recommendation specifically saying that it is going to change the 71 years of age requirement to a minimum of 75 years of age to help the very seniors we are talking about.
In this motion from my colleague, we are not talking about the OAS and the GIS and the seniors at that level. This is specific to the RRIF program. The withdrawal rules are outdated and antiquated, and as much as we have made a lot of changes and helped seniors a lot throughout the pandemic and so on, ultimately we have to change some parts of the tax system that penalize people.
We do have a Minister of Seniors in the government now. We had a minister of seniors previously. Ms. Schulte was the first minister of seniors, and she spent an enormous amount of time and effort on behalf of all of seniors in Canada to bring forth a variety of changes. Whether we are talking about the OAS or the GIS, there were changes and constant discussions on how we could make the lives of our seniors that much better.
Loud voices need to be happening. This motion gives us a chance to continue that discussion, but it has to be focused on the RRIFs. We need the tax changes to happen. The majority of Canadians are going to live long past the retirement age of 65. We know that. I believe the median age is already 84 or 85.
I go to a lot of birthdays now for people who are 102 and 103. By the time they get there, they do not have anything left because they have taken the money out of their home and used it all. Retirement homes and nursing homes are quite expensive. The seniors who are calling us and talking to us want us to make sure that, if they are prepared to save their money and they have it, we should let them keep it and not force them into withdrawals so they end up not having the money to pay the bill at the retirement home. Then their children end up having to contribute more than what is necessarily the purpose for them to do.
If we can stay focused on what the motion is about, we can have a discussion at committee so that we start talking about what tax changes can be made to help the very people that each and every one of us cares about in the House. The criticism is that it will be another study. However, it will be a study focused specifically on RRIFs, and it will give us a chance to have a bigger conversation about what happens when people are 65, 70 and 75. If they have savings, are they forced to take it out? Yes, currently they are forced to take it out and they end up having to give probably a good third of that back to the tax man.
I am proud to be part of the government, but I am not proud to be under a government that is taking seniors' money and making them have to pay taxes on it. They worked all their lives to save that money. They should be allowed to take it out as they need it, not be forced to do so at any particular age. I want a complete abolition of having an age when we have to start withdrawing our RRSPs and the rest of it. The goal for me in supporting the motion is to see that it gets eliminated completely. If seniors have $100,000 in bank, let them draw it out as they need it as they get older, especially given the fact that people are living to 101 and 102 years old.
That is the focus that I see in this motion. It is to keep these kinds of discussions going so that we all work together to get this change to happen. It will take all of us working together and pushing the government of the day to make this happen. In 12 months, there will be a report, whether we agree with it or not. If we do not agree with it, then it is up to us to change it.
This is an opportunity for us all to make a difference here in the House on this motion, and I hope that everybody will support it. I know my colleague puts it forward with the utmost sincerity because she has seen it herself and wants to make sure that we make the changes that are going to help. Many of those changes could end up helping many of us in the House today.
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