STANDING COMMITTEE ON HUMAN
RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS
COMITÉ PERMANENT DU
DÉVELOPPEMENT DES RESSOURCES
HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES
[Recorded by Electronic Apparatus]
Thursday, October 18, 2001
The Chair (Mrs. Judi Longfield (Whitby—Ajax,
Lib.)): I'm going to call the 33rd meeting of
the Standing Committee on Human Resources Development
and the Status of Persons
with Disabilities to order.
Members, just before we get into our deputations,
there's one item I want to address as a result of
the meeting we had on Tuesday. It concerns the
motion by Ms. Davies to add another area of study.
In our exuberance, and knowing that we had wonderful
cooperation from both sides, I neglected to ensure
that we had unanimous consent to put the motion
forward. You will know that all motions need
48 hours notice. I realize that everyone was nodding, but I
failed to do that. So that we don't get ourselves in
difficulty sometime further on, notices of motions,
unless there's unanimous consent to do otherwise, will
require 48 hours notice.
I thank you for your indulgence, and we just clarify
We have with us today three groups that will be
making presentations. This particular area of study, I
think, is something that crept up on a lot of us.
That so many of our citizens do not
know of benefits they are entitled to is
something I think needs to be addressed. I think
we have people at this end of the table who can
give us the benefit of their understanding of
the situation and perhaps help us as we try to resolve
I would first call on Mr. Richard Shillington from
Mr. Shillington, I think you have someone with you
you might like to introduce.
Mr. Richard Shillington (Principal, Tristat
Resources): Yes, I had the nerve to bring a
citizen with me, Gloria Lewis, who lives
in Perth and contacted me after some articles that
appeared in the Ottawa Citizen. Basically,
she was one of these citizens who discovered
too late that she had been eligible for some benefits.
I'm going to ask her to say a couple words, just about
her personal experience, and I'll just begin my
The Chair: Mr. Shillington, just before I let you
start, we limit your comments to about five
minutes initially, and then at the end there'll be time
Mr. Richard Shillington: Okay.
Very quickly, we're here
because the media discovered, and through the media the
public, that there were hundreds of
thousands of low-income seniors who were missing out on
hundreds of millions of dollars of benefits, and in
fact, through Revenue Canada—if I can still call them
that—and HRDC, they could have been identified.
This has been known to policy experts for some time,
this is not news, but it became news to the public, and
so there were some newspaper articles about it and
some discussion. This GIS story
came to me because of my work at Saint Christopher
House in Toronto. I talked about it in
various speeches, included it in reports, but last
August—I guess it was a slow news month—at a press
conference with the Daily Bread food bank, a food bank
in Toronto that is seeing more seniors,
they were the ones who brought it to the
attention of the media at the right time, so that it got
some press coverage.
When first approached, HRDC officials told me
they couldn't tell seniors about this benefit
because of the privacy issue. There's
been no official announcement, but I understand that
HRDC is working with Revenue Canada, so that, in fact,
citizens will be approached in some way to
tell them they're eligible for benefits. So I guess, in
some sense, that first issue has been addressed.
I just want to raise a couple of issues I think people
should understand. The support programs we've
designed for seniors are extraordinarily complex. You
have various programs that all interact with each
other. So the fact that somebody didn't get GIS, the
guaranteed income supplement, we all know means they're
missing out on $5,000, $6,000—their family could be missing
out on $10,000—of income. A single person could be
living on $5,000 instead of $11,000.
That would also mean in several provinces they're not
getting a GIS top-up. Several provinces run programs
to supplement the income of low-income seniors. So not
everybody would be immediately aware of that. But even
more, and this illustrates the complexity of the
system, in Newfoundland there's a prescription drug
plan for seniors if you're a GIS recipient, but not if
you're not. So the second-order effect of not being
told you're eligible for GIS in Newfoundland is that
you're missing out on a prescription drug plan.
In Saskatchewan there's a prescription drug plan for
seniors; the deductible—the amount of money you have
to pay out of your own pocket—is $400 if you're a GIS
recipient, $1,700 if you're not. Whether
or not you get a GIS affects the rent you pay if
you're in social housing, it affects a whole raft
of various programs. So the thing is extremely
I ask you to think about a couple of things. Why do
we have to apply for GIS at all? Newfoundland has a
support program like GIS for seniors, where you don't have to
apply—you file your tax return, they mail you a
cheque. I don't know if you've seen the GIS form,
but I've helped a couple of people in
my office at home fill in this form. As far as I
understand, that information is not really used as long
as you file a tax return, because they go and use the
tax form information instead. So I ask a basic
question: why do people who file tax returns
have to apply?
Another reason for concern about the reliance on
Revenue Canada for this information is that according
surveys done at the same food bank in
Toronto, 25% of people who go to food banks don't file
tax returns. If we're designing programs for low-income people
based on tax information, it's a problem if a substantial
portion of the most marginalized low-income people
aren't filing tax returns. They don't file tax returns
for the same reason I haven't filed my last year's
return—there are Revenue Canada people back there, I
shouldn't say that—but I'm not losing benefits for not
filing my tax return. I'm going to pay a little
interest, but that's it. Low-income people, if
they don't file their tax return, lose GST credit,
they lose this, they lose this. So I worry about
using income tax information so heavily for things like
the GST credit, the child tax benefit, and GIS.
Of course, the guaranteed income supplement is not the
only program with a notification problem, identifying
people. There's the old age security, Canada Pension
Plan, the GST credit, and the child tax benefit. All
these programs will have Canadians out there who are
eligible, but don't know it.
We need clarity in this system. Look at the old age
security application form—the booklet is 17 pages. It
says in the booklet you might want to apply for GIS if
you have little or no income. You can get the
guaranteed income supplement and have an income of
$10,000, $15,000, $20,000, so I think
“little or no income” is kind of vague.
The one remaining issue I want to speak to for just a
minute is retroactivity. My understanding is that if
somebody comes in, a 75-year-old woman... You wouldn't
believe the phone calls I got from people across the
country saying, my mother-in-law lives at this place
and she's got an income of this, is she eligible? So
there are people now looking at the tax returns of
their mothers-in-law and their parents. We know
there are hundreds of thousands of people who have been
living on incomes of $5,000 when they could have been
living on incomes of $12,000 or $13,000, both of which
sound pretty low, but nonetheless.
Under the current legislation, I'm told, if you walk
in now and say, I'm 75 years old, I've been eligible for
GIS for the last 10 years, you knew I was
eligible—you collectively, the federal
government—HRDC and the current legislation go back 11
months. It's the same 11 months, I understand, for old
age security, although it used to be five years.
It's the same 11 months for Canada Pension Plan, which
I think is outrageous. The reason Canada Pension Plan
is different is that people have bought their own
Canada Pension Plan, they've paid for it. So if I
somehow fall off the tracks, I'm age 75, and I've
been in a nursing home, having emotional problems,
or whatever, and I discover that I'm eligible for Canada
Pension Plan and have been eligible for the last ten
years, they'll only go back 11 months? No, that's my
money. I paid for that in a different way than with
The Chair: I'm going to let Ms. Lewis say a few
words, because I've been very lenient.
Mr. Richard Shillington: Okay. Am I over?
The Chair: Oh, you are over, yes.
Mr. Richard Shillington: Okay.
The Chair: I'm sure some of the issues
you want to address we'll touch on when we get to questions.
Mr. Richard Shillington: Okay.
In 30 seconds,
the system we have now is convoluted, unfair, perverse,
and unfortunately what's come out in this GIS story is
that there are federal agencies that could have
been much more proactive. I understand they're going
to be more proactive, but it's a little late. Anyway, I'm
glad they are now—better late than never.
Ms. Gloria Lewis (Individual Presentation): My
name is Gloria Lewis, and in May of this year I turned
64 years of age. Shortly thereafter I received an
application from the OAS-GIS, HRDC, informing me of my
application for the coming May of 2002, when I would be
entitled to receive OAS. With the application was also
an information brochure that advised me that if I was a
widow and between the ages of 60 and 64, I
would be entitled to a widows supplement. I did
not understand what it meant, so I called HRDC, and
they said I would have been entitled to an amount
from the age of 60 until I turned 65, and I have
never received it. I feel I was never informed of it. HRDC have
told me they will take it back 11 months. I've already
sent the application in, and I have received a form back
that I have to make some corrections to.
feeling is that, first, I was 60 years old, and HRDC
knew that, because I had been collecting early Canada
Pension. HRDC also knew that I was a widow, because I
was collecting widows Canada Pension. I did not think
I would be entitled to anything under OAS, because
OAS stands for old age security. My husband has been
dead for 17 years. I was 48 years old when he passed
away. There was no reason for me to believe I would
be entitled to anything under OAS, unless I was informed.
I realize that the criterion of
$17,000 is applicable, but at least I should have been
given the opportunity to say, oh, I'm over $17,000
this year, next year I might not be over $17,000. But I
was never informed, and so I have never received
the benefit from the age of 60. I'm now 64 and a half.
The Chair: Thank you, Ms. Lewis. I know
there'll be questions when it comes up.
Our next presenter is Monsieur Gilles Fournier from
the Tables régionales de concertation des aînés du
Mr. Gilles Fournier (Coordinator, Tables régionales de
concertation des aînés du Québec): Good morning. I am
pleased to be speaking to people who are so keen to resolve our problems.
Today I'm going to be presenting some excerpts from a study
that is currently underway on poverty amongst the elderly. The
final document will not be ready until the spring of 2000. What
we are now finding out, as we search for a solution to diminish
poverty amongst the elderly, is that an enhanced Guaranteed
Income Supplement is unavoidable.
Indeed, it is the Guaranteed Income Supplement that keeps
indigence at bay for single women once they reach the age of
65—and this is very important—for the retired who were not able
to earn enough money in order to prepare for their retirement and
for the workers who have never had access to an employee pension
plan in the sectors where they were once employed.
I would refer you to the A Pension Primer published by the
National Council of Welfare. I would refer you to page 44, where
it states that 58% of workers have nothing, have no pension.
Consequently, where does all of this lead us, when we think
about the fact that, in January, an individual who received the
Guaranteed Income Supplement was entitled to, along with his or
her Old Age Security pension, $11,328?
What disturbs me about this number, is that everybody says
that the low-income threshold for a single person is $16,486.
Consequently, I am forced to conclude that this individual was
$5,188 below the low-income threshold, and was therefore living
on an income that was 32% lower than this limit, which we all
feel should be respected.
Hence we are deliberately, for economic or other reasons,
keeping our seniors in what I would call poverty. This is why our
regional tables feel it is essential that the Guaranteed Income
Supplement be increased as quickly as possible.
To illustrate how urgent the situation has become, I would
like to remind you that the National Council of Welfare, in its
document 113, which I have here, says on page 95 that 7.5% of the
elderly were living in poverty in 1998.
Our table based itself, particularly in Quebec, on a study
published by a demographer, Serge Benoît, who did a very complete
survey in the city of Laval. His study comprised 480 pages of
statistics illustrating that 28.76% of the people aged 65 and over
live below the low-income threshold. To my great surprise, the
situation there is a little bit better than the one in the city of
Montreal. I'm referring you to these figures because they apply to
our region, our objective in Quebec.
There is another extremely interesting document published by
the Conseil des aînés du Québec [Seniors' Council of Quebec]. I
brought this document with me because many people who are
interested in Quebec would be well-advised to obtain a copy. I
would refer you to table 14, where it says—pay attention to these
figures—19.3% of seniors aged 65 earn less than $10,000. Further
on, we are told that 41.2% earn less than $14,999. If you look at
the situation for women, you can see that 75% of them earn less
than $14,999. For men, the figure is 40.3%.
Consequently, when you're talking about misery, when you're
talking about poverty, the Guaranteed Income Supplement plays a
very important role. I do not think that we will be able to resolve
poverty, because there will always be poor people. If the
Guaranteed Income Supplement was designed as a social measure in
order to help people, I believe that we should do our best to make
use of it.
We are convinced that, in order to reduce poverty, we have to
make certain changes. Once again, I would refer you to the
conclusions drawn in A Pension Primer, published by the National
Council of Welfare in the summer of 1999. The conclusions are
extremely interesting. Our studies are painting a slightly
different picture, but this is what stands out.
First of all, they say that the benefits are inadequate for
protecting the elderly against poverty. Everybody is saying this.
Secondly, they say that the cap established for retirement
income benefits is too low. That means that if someone is counting
on the Quebec Pension Plan or on the Canada Pension Plan, he or she
will usually, because of the limit set, have to apply for Old Age
Security and the Guaranteed Income Supplement once he or she is
retired. These people, however, are still below the low income
threshold. We therefore have a problem, a societal problem.
Thirdly, according to the studies, the coverage or the
protection against inflation provided by the private sector is
inadequate. By private sector I mean companies such as SNC-Lavalin,
Canadian National, etc.
Fourthly, the study states that RRSP and professional
retirement plans are beneficial to well-heeled individuals. As I
said earlier, nearly 58% of the population have nothing. That means
that the others have the means to pay for such a plan.
Fifthly, the study states that as long as 40% of the
population have no other retirement income coverage other than Old
Age Security, the Guaranteed Income Supplement and some income from
the Quebec Pension Plan or the Canada Pension Plan, many retires
will be living below the low income threshold.
It is therefore essential that the federal government take
action and increase the Guaranteed Income Supplement by at least
50% of the difference between the GIS limit and the low-income
threshold. We have to bridge this gap and the matter is urgent.
When our elderly are forced to choose between eating or taking
medication, we all have a problem.
The Chair: Thank you.
Our next presenter is from Canada's
Association for the Fifty-Plus, Bill Gleberzon,
who's the assistant executive director, and Walter Kelm
is here as shotgun.
Mr. Bill Gleberzon (Assistant Executive Director,
Canada's Association for the Fifty-Plus): Thank you
very much. A handout of my presentation
was given to the clerk so she could circulate it to
everyone, and I also have some information about CARP.
The Chair: We have a copy, the clerk has it, but rules
do not permit circulation if it's in one language.
We will make certain that it gets
translated, and it will be distributed to all members of
Mr. Bill Gleberzon: Okay, excellent, thank you.
Sorry about that.
The Chair: Listen, it was very short notice, we're
happy that you're here.
Mr. Bill Gleberzon: Okay. So are we.
just introduce ourselves again. My name is Bill
Gleberzon, the associate executive director of
CARP, Canada's Association for the Fifty-Plus. My
colleague is Walter Kelm, who's a retired civil servant
and a member of CARP. Mr. Kelm, during his working
days for the government,
was instrumental in the creation of CPP, and he is very
knowledgeable about GIS. Both of us, in particular Mr.
Kelm, would be only too happy to respond to any
questions you have later.
It appears to us that the issue before the standing
committee is how to enhance accessibility to guaranteed
income supplement in regard to three areas: greater
awareness about it, improved eligibility for it, and
expanded income from it. I should say that we support
the comments of both previous speakers.
We understand and support HRDC's consideration of
initiatives to improve awareness about GIS among
seniors, to include a note describing GIS, its
eligibility criteria, and how to get it in future
mailings of OAS statements and the appropriate T4
slips, and to become more proactive in making low-income
seniors aware of their eligibility for GIS by working
through Revenue Canada. However it's done, it has to
be done, and that's the main thing.
However, as Mr. Shillington pointed out, many
low-income seniors do not file income tax forms, and
so these initiatives have to be supplemented by
other methods of reaching low-income seniors.
We're suggesting that a major advertising campaign
in all media, press, TV, and radio, magazines that focus
on older populations, such as our magazine, a
copy of which is in here, which reaches about a million
Canadians, should also be utilized, as should all
outlets where seniors congregate, like seniors centres,
community centres, banks, post offices, all sorts of
medical and health facilities and outlets, including
home care services like Meals on Wheels. The Internet
may be helpful to make the announcement, although many
low-income seniors do not have access to it.
In the media campaign, whether in the form of
advertisements or brochures, the language used should
be simple and straightforward, in larger type, at least
12 point, and on non-glossy paper, as should all
instructions. The application forms should also be simple,
straightforward, short, and user-friendly, especially
senior-friendly—and there is a movement out of Calgary
that deals with making materials senior-friendly.
The application process itself must also be
simple and straightforward. Focus groups, consisting of the
target audience, should be organized to review all
materials and procedures before they are finalized, to
ensure that you reach those goals.
The second area is eligibility. The current
low-income cut-off line to be eligible to receive GIS
should be increased to reflect the real increase in the
cost of living, not the one that's published by
Canada, but the one that really affects people in
necessities like the increase in rents and
property taxes, cost of electricity, heat, telephone,
food, medical and health care expenditures out of pocket,
postage stamps, and the like. A more realistic
threshold for receiving GIS would require an increase
of 20% to
25% over the current level at the very least.
Finally, the amount of income
an individual or couple receives in GIS should
also be increased. In that regard, in appendix one of
our presentation we present a formula
for increasing the amount of GIS, as well as a
recommendation on reducing the clawback on GIS for
those occasions when a recipient may experience a
periodic increase in annual income.
For example, some seniors had shares in certain
insurance companies that demutualized, and then they found
that their shares were turned into either cash or
shares in a privatized company. Because they had that
one year blip in their income, they lost GIS for that
year and the following year. We dealt with
some of the ministers in the cabinet to make them aware
of that, and they assured us that they would ensure
that nothing would happen, but people did lose GIS over
that two-year period. That's just an example of the
sort of thing I mean.
Our recommendations would put the clawback more in
line with clawbacks in other areas. Also, annual
increases in the amount of GIS should reflect the real
increase in the cost of the necessities of life, to
which I have previously referred.
we're only allotted five minutes, so we chose not to
read our recommendations, but they are available for
the committee to review later. I'll speak on
Walter's behalf and say that any questions you
have about those I'm sure he'll be only too happy to
I'll conclude, and if you don't mind, I'll then turn
it over to Mr. Kelm for just a few minutes.
We have presented a number of practical and feasible
recommendations on how to improve access to GIS
in regard to awareness, eligibility, and income. The
decisions made by this committee will affect the
quality of life for over a million low-income seniors,
a large percentage of whom, as you've heard, are women,
women who worked at home to raise families without any
compensation. Society, we believe, owes these people
sufficient financial support to ensure a good quality
of life and well-being during the latter years of their
life, when the opportunities to increase income are
severely limited for a variety of reasons.
The Chair: Thank you.
As a follow-up, I would
like to think that this committee could make those
kinds of decisions. Regrettably, we don't have those
powers, but we certainly have the ability to make
recommendations and to lobby on your behalf.
Mr. Bill Gleberzon: Whatever recommendations
you decide to make are the ones we're referring to.
The Chair: Thank you. Okay.
Mr. Walter Kelm (Consultant, Canada's Association
for the Fifty-Plus): I just want to make
one point—I wasn't aware I was going to be asked to
say something—and that's the point Bill was
making about the difficulty low-income seniors have been
having. It's been particularly bad in the last couple of
because shelter, home heating, and energy costs have
been rising much faster than the CPI, and seniors, of
course, spend a lot more on these items than
corresponds to the weight
given these factors in the CPI. As a result, CPI
has not been adequately reflecting the cost of living
for low-income seniors. That's the only point I want
The Chair: That's a good point.
We'll now move to
the question period, and as has been the
procedure here, we'll start with the official
opposition. We'll start with a seven
Ms. Carol Skelton (Saskatoon—Rosetown—Biggar,
Canadian Alliance): Thank you very much for coming. I
really appreciated it. As critic of the family for the
official opposition, I find this very important
in my whole portfolio, and I would like to have all the studies,
will give you my cards afterwards.
I would like to know from each of you what you think
the major point is for seniors. Is it understanding
these forms? Is it not being aware of the forms? Just
what is the major thing? What was the hardest part,
Gloria, for you? Was it lack of information?
Ms. Gloria Lewis: Lack of information.
Many seniors, I think, don't file tax returns because
they have a zero taxable income.
Connecting it to the tax return may be an important
issue in certain areas, but it should not be the only
way, because many seniors don't file.
I'm not a chartered accountant,
but I am a tax consultant, and I know. I personally
have a friend in Perth who makes $11,400 a year, of
which $5,500 is the OAS widows supplement, which
she was made aware of. Why? She found out about it
and I didn't, and I'm the more informed person. I don't
In another area, I was
informed, when my husband was killed, by the funeral
directors of certain benefits under Canada Pension,
which would be a lump sum payment to help with the
death and so on. This information
obviously has gone to funeral directors. Why would OAS
not go to funeral directors? I think the
information needs to be dispersed better than just through
Ms. Carol Skelton: Okay.
Mr. Richard Shillington: I'm one of
those policy people who have known about this for a few
years, and then it somehow had its time in the light.
Six months ago, if you had asked me who these people
were who are missing these benefits, I would have
talked about immigrants, people who don't speak
English or French, people who are in hospitals with
mental health issues or Alzheimer's, and I've learned
that was totally wrong.
You have people—and family members, to
my regret—who are really ill-informed. They thought, old age
security, I'm not there yet, or, I'm not poor enough.
I've had family members who said, I
forgot I had $3,000 of interest income last year, I
guess that makes me ineligible, and I said, no,
you still can apply. So I don't
turn it on the seniors. I say, why didn't we tell
them? Because through income tax and the various
records we knew who they were, the vast majority of
The Chair: Mr. Fournier.
Mr. Gilles Fournier: He has a point. If you look
at the large municipalities, you'll find that about
43% of the elderly are paying more than 50% for their
rent if they earn only $11,300 and something a year.
You can figure out how poor they are. That's why I do
insist on the fact that we have to raise the amount.
It's much too low.
The Chair: Mr. Gleberzon or Mr. Kelm?
Mr. Bill Gleberzon: It's a variety
of things. A lot of the people
aren't aware. When they do become aware, the
issue that it's only retroactive for 11 months is a
It is not only not being aware, it's not knowing the
process, and the process is very cumbersome.
The way the process works, it's incumbent on
the individual to take the initiative, and a lot of
people are intimidated, and if they're not intimidated,
they don't know what to do and they don't know where to
go. Where I work, we get lots of phone calls from
people, and all they want us to do is give them a
telephone number. They don't want us to do it for
them, they ask who they should call about this, and we
give them the hotline—there's a OAS-CPP hotline that
we give them, a telephone number. That's the sort of
information people want when they find out about it.
Then, as you've heard, there are the application forms
themselves. This is a system that should be
simplified, and it should be based on the premise that
if the government is committed to providing this
support to people, it should provide it with an open
The Chair: Thank you.
Ms. Carol Skelton: Having tried to help my mother
fill out one of these forms, I know how terrible
they are—it's mind-boggling.
When you talk about
the heating going up
and everything, how would you help, Walter? What would
you make changes on?
Mr. Walter Kelm: First,
there's the rate, but I think right at the bottom they
could measure, for example, how much the CPI is
out—that's easily measured. We have suggested
that the clawback not apply on the
first dollar of income earned, that you allow an
exemption, and that you have not just one rate, the 50%
rate, but several rates,
applying the ability-to-pay principles of the Income
Tax Act to the GIS. In the income tax you have an
exemption that's not subject to taxation, and after
that your income tax rate depends on the
amount of your income. There's no reason with the GIS you couldn't start
off with, for the sake of argument, a $1,000
exemption: the first $1,000 of income is not going to be
clawed back. After that maybe a band of earnings of
$2,000 might be subject to a 15% or 20% clawback, and
so on until
you finally get to 50%.
You have this strange situation. I know you can get
into the niceties and say a clawback is not the
same as a tax, but it has the same effect on your
pocket. Here we have the situation of a poor
pensioner whose income is clawed back 50%, yet for a
person having an annual income of over $100,000 a year,
under the new tax rate that was established a year ago,
it is less than 50%. The equity of that is kind of
Ms. Carol Skelton: Yes, that's good.
The Chair: Thank you.
Ms. Raymonde Folco (Laval-West, Lib.): Thank you, Madam Chair.
First of all, I would like to thank you all for coming here
today. What struck me in particular was the common thread that ran
through your presentations this morning. Everyone agrees on the
As the Parliamentary Secretary to the Minister of Human
Resources Development, I too came to the realization that the
Guaranteed Income Supplement was not meeting requirements, on the
one hand, and more importantly, on the other hand, few people knew
that they were entitled to it and what they had to do in order to
Moreover, I can tell you that I appeared on a television
program in Montreal, in French, one Sunday morning. Mr. Fournier no
doubt is familiar with this program which is intended for seniors.
Apparently, after my appearance on the program, hundreds and
hundreds of people called in to say that finally, they had received
a little bit of information.
This is simply my prelude. I am struck by many things. You
underscored the problems in a very clear, succinct fashion. Those
are the problems, in my opinion. I really do not need to ask you
any questions, except on a few small issues.
I would like to ask you a more comprehensive question on
solutions. My question pertains to the registration process that an
individual needs to go through the first time that he or she wants
to be put on the list of Guaranteed Income Supplement recipients.
I believe Mr. Shillington asked why someone had to register.
I would like to know why one has to register, not only the
first time but the other times as well, because there are
subsequent registrations. How could we eliminate this step the
first time and the subsequent times? That is my first question.
My second question is related. I know that Mr. Gleberzon
talked a great deal about a media campaign, but there are a lot of
elderly people who, despite the fact that they may look at
television, do not really register these things. I am speaking from
personal experience. I'm wondering how we could reach them to let
them know that they are entitled to this benefit. They see the
information on the television, but perhaps the information doesn't
mean anything to them, personally. Do you have any ideas? My
question is for anyone to answer.
The Chair: Mr. Gleberzon.
Mr. Bill Gleberzon: The studies we've seen show
that the medium many seniors, a large
percentage, use is the radio. Radio
seems to be more of a companion than TV or
It seems to me that if the message is crafted in a
simple way to say—without spending time doing it
now—the government has this program, if
you think you're eligible because you have low income,
call this number. Maybe you don't have to do any more
than that, because as I say, based on our experience,
that's all people want. They just don't know
who to go to to get information about who they can
The Chair: Mr. Kelm.
Mr. Walter Kelm: It seems to me that could be
a way of approaching it. To build on Bill's
point, often we've found—I remember this from when
I was working for the government—that you try to put
something out that answers all possible questions.
As a result, it gets too long and is not read.
Maybe what's required is a
two-stage affair, something that just says, if
you have an income less than x, you may be eligible, call
this number. It's very simple. As Bill says,
often all they want to know is who to call. So
identify the people who should call, instead of giving
them all the information they need.
The Chair: Mr. Gleberzon.
Mr. Bill Gleberzon: One other comment is that in any
information there has to be a statement that says
privacy is guaranteed. We know that a lot
of people are very hesitant to talk about their income,
and I guess it doesn't matter how much your income is.
I'll give you an example. When the Ontario government
began to charge a co-payment for prescription drugs, it
was able to get—by the way—information from HRDC on
low-income people, which was then provided to the
pharmacy retail outlets, so that they could
determine who had low income. A lot of people
phoned us about that because they were really concerned
about the privacy issue. So the privacy issue is
not about providing the information, it's about reassuring people
that the information is going to be provided to you
alone and won't be shared with anyone.
It's our understanding, by the way, that there is
legislation that permits the federal government, we
believe HRDC, to provide that kind of information to
the provinces. As I said, when this happened
in Ontario, we checked it out, and that would seem to
be the case. But again, whatever the message is, it has
to reassure people that this is going to be between
themselves and whoever they talk to on the other end of
Ms. Raymonde Folco: And my first question, Madam Chair—
The Chair: I think Mr. Fournier had a comment.
Mr. Gilles Fournier: I have a suggestion to make. It is true
that we have an information problem and it is true that the elderly
have memory problems. I have noticed, in another association that
I chair, that we need to repeat the same things constantly.
Our government is highly computerized and it receives our
income tax returns when we turn 64. Why couldn't it automatically
send out a nice little letter to every individual who will soon be
turning 65 in order to explain his or her entitlements? A letter
wouldn't cost very much, but all the information would be contained
Secondly, our members of Parliament, who send us all kinds of
information on their activities every year, could perhaps include
this letter. As I was saying, you have to repeat things constantly
with the elderly. You have a wonderful book put out by the federal
government which talks about all of the services provided to the
elderly throughout Canada. We distribute this book on a regular
basis. We order it by the case. You could say that we always have
to start over. There will always be half the people in the room who
are not even aware of it.
The Chair: Madame Folco, your seven minutes
Ms. Raymonde Folco: I understand, and what you have said is
very interesting, but part of my question was, in my opinion, very
important and no one has answered it. Perhaps it is because you
have no answer. Why do people need to register? Could we not avoid
this initial registration? Could we avoid the subsequent
The Chair: Madame Folco, I hate to cut you off, but
we're going to have to move on. We'll put you at the
end, or maybe in
the next round.
Ms. Raymonde Folco: Maybe someone else can
ask the question for me.
The Chair: It may very well come up.
I'm going to move to Monsieur Gagnon.
Mr. Marcel Gagnon (Champlain, BQ): Thank you, Madam Chair.
Indeed, I will repeat your question.
First of all, I would like to thank you. My name is
Marcel Gagnon and I am the Bloc Québécois critic on seniors'
policies. I'm very pleased to welcome you, because you gave us a
lot of information this morning that I was missing.
I'm a bit scandalized when I see how many people are deprived
of important resources. When you talk about people who are not
getting the supplement, you're talking about the poorest members of
I'm also a bit scandalized when I see that we're missing... As
Mr. Fournier said earlier, we are in an age where information
circulates quite quickly. When we want to reach people, we have all
kinds of ways of doing so. This is a serious problem for the
individual who, for example, is spending more than 50% of his or
her income on housing alone. What is left over for other
requirements? It just doesn't make sense.
One other thing shocks me. When the government realizes that
somebody has not claimed his or her entitlement, why doesn't the
retroactivity go back more than 11 months?
I'm convinced that if I were to make an error with my income
tax, I could go back further in time. People have already gone back
two, three or four years to claim things that they were entitled to
claim. We are entitled to do this when we pay our income tax, and
I think that it is inexcusable that we are not able to do so for
income like that, which is an entitlement. This has to be changed
I would like to ask you a question. Someone said that we
needed to repeat things often. I too have noticed that I now need
to often repeat things in order to remember them but there are all
kinds of associations that deal with the elderly, in Quebec in
particular and no doubt in the rest of Canada as well.
In your opinion, would it not be possible to communicate
information through associations that deal with seniors?
Associations such as the golden age clubs or other associations
such as the AFEAS.
Mr. Gilles Fournier: You are quite right, but I would like to
point out one thing. I will take the example of a region that I
know better than all others, the Laval region, where we have about
680 associations of all kinds.
Our regional groups bring together 280 associations for
retired people. That's a lot of people. We always preach the same
things. However, very often, the people who get stuck are
individuals living alone, individuals who are isolated, and
especially widows because in many cases they were dependent on
their husband, who did not keep them well informed.
This is a problem, and we will always have to keep putting the
information out. I belong to several associations—I am even a
member of CARP, so that I can get more information and find out
what is happening throughout Canada. I have noticed that many of
the associations I know, including CARP, FADOQ (the Quebec
Federation of Senior Citizens) and the AQDR always preach the same
thing. Thus we cannot blame ourselves, we cannot say that the
information did not go out. Perhaps there should be more of it, and
perhaps it should be put out in a different way. It is important to
repeat the message; I cannot emphasize that enough. I see this with
the associations in which I am involved. How is it that people who
have been members for seven or eight years suddenly discover, at
one point, a document that passed right under their nose for
months, or even years? What can we do? We cannot wring their neck.
Mr. Marcel Gagnon: Ms. Folco asked whether it would not be
possible for this to be done automatically, instead of making
people fill out a form. When individuals reach the age where they
are entitled to the supplement, the government is aware of this.
Would it not be possible to have an automatic adjustment so that
those entitled to the supplement could receive it?
Mr. Gilles Fournier: I perhaps agree as far as the Old Age
Security pension is concerned, but we cannot do that for the
Guaranteed Income Supplement, because it depends on income tax, on
income. It would be easy to do what I suggested to Ms. Folco: when
you turn 64, you automatically receive a piece of paper telling you
that you should register if you do not want to miss out on some
money. Let us make things simple. Let us use plain language. That
is how we will manage to reach as many people as possible.
The Chair: Mr. Gleberzon, you had a comment on the
Mr. Bill Gleberzon: Yes I did, because I think
the two questions Madame Folco asked and
Mr. Gagnon's are really related, and it's
a matter of process. I can turn to the United States as an
an association there called AARP, which
I'm told, the second largest lobbying group in the
world after the National Rifle Association.
The Chair: Okay.
Mr. Bill Gleberzon: They have more members than
there are people in the whole of Canada, about 34
million. The point is, it's a standing joke in the States that
when anyone turns 50, they're going to get a letter from
AARP that tells them they are now 50 and it's time to
join AARP. So there is a process down in the States
which they're able to identify people on the basis of
We have, I'm sure, more than one data bank in the
federal government, the SIN for example; our SIN number
is probably linked to age. I
think there is a way, if the government
chose, by which it could reach out to people and let
them know, at least if they're 65, there's a number
to call to see if you're
That may deal with the people who are
straightforward 65-year-olds, but then we have all these
refinements, if you will, widows allowance, the
matter of couples, and so on. In our presentation,
in the appendix, we point out that
there are at least five different groups who are
eligible for GIS: single individuals over 65; couples
both of whom are over 65; couples where one
of the spouses is over 65 and the other isn't; someone
who's 65 with a spouse between the age of 60 and 64;
and then finally the widow spouses allowance.
These are slight variations under the general theme,
but the general message is still to be, if you are over,
say, 60 and may be eligible for these programs, here's
a number to call.
The Chair: Mr. Shillington.
Mr. Richard Shillington: I do think the issue
of application is important. All this conversation
about helping seniors know they're eligible assumes
that you have to apply, and I think that's a
mindset that comes from 30 years ago, when these
programs were designed and the computer systems weren't
what they are now. As I indicated, some provinces now run
a GIS top-up,
where people do not have to apply. When the federal
government sent the fuel
rebate, people didn't have to apply; as
long as you got the GST credit, you got this other
amount as well. So you could change the mindset to
say, as long as you file a tax return, we will send you
this money automatically. I don't think
there's any impediment to that except inertia.
Recognize that this will miss the people who don't file
tax returns, but you will know the
vast majority of those people from the fact that they get old
age security. If you do it automatically, based on
a tax return, I think you will have a system
much better than the current one, but it won't be
complete, because the people don't file tax returns.
The Chair: Okay.
Mr. Marcil, seven minutes.
Mr. Serge Marcil (Beauharnois—Salaberry, Lib.): First of all,
I must say that I agree completely regarding the GIS problem. It is
even tragic for some. I have often had to fill out the form for my
mother, my father-in-law and my mother-in-law. They were not very
You have surely done some research. Are some generations more
seriously affected than others? Today's elderly are probably more
affected than people who are 40 years old now will be when they
reach 65. Has your research shown that for people of the current
generation, who for the most part have RRSPs and pension funds with
the companies for which they worked, the problem will be less
serious, or whether a similar percentage of individuals will
experience exactly the same problem as our elderly when they reach
Mr. Gilles Fournier: I assume that your question is for me.
Mr. Serge Marcil: Yes.
The Chair: Mr. Fournier.
Mr. Gilles Fournier: The research that we are currently doing
shows that there is a kind of dead end. We are being strangled by
a situation which is giving us a great deal of trouble. It is the
whole pension plan. It is not strictly the CPI, the Guaranteed
Income Supplement and all that. No, there is more involved.
More than 40% of the labour force have nothing. How do these
people live? They will be living off their Old Age Security, the
Guaranteed Income Supplement and, to some extent, the Quebec or
Canada Pension Plan.
This percentage is comprised of people who, generally
speaking, earn approximately $30,000 a year and sometimes less.
Because of family requirements, they are not even able to save any
money. We are frightened by this constant, which appears to be
stuck there and which hampers people from moving. Think of all our
young people who are in precarious jobs, who do not have stable
employment or work on a freelance basis. Do you think that they
have a pension? They have nothing and this is what scares us a bit.
Moreover, we know that there have been some improvements with
respect to poverty amongst the elderly. Although poverty has been
reduced by 50% over the past 20 years, this improvement has
levelled off. Why? It is because of the system, the system which
does not enable some people to improve their lot.
I look at the statistics from 1996 to 2000 that I was able to
gather. They do not paint a very pretty picture. With everything
that is going on right now, I do not know how the situation will
improve. We have a problem. I do not know if that answers your
Mr. Serge Marcil: Yes, that answers my question. Indeed, you
said that approximately 40% of the workers currently earn salaries
of $30,000 or less and cannot participate in RRSPs or similar
things because they just manage to pay the rent, look after their
children and all of that. Consequently, they do not have enough
money. They are not even thinking about it. There are even some
people who are earning very good salaries and yet they don't think
I read an article in the Toronto Star about a study in August
2000. The article said that more than 86,000 people were entitled
to the Guaranteed Income Supplement but had never applied for it.
How does one determine a number like that?
Mr. Gilles Fournier: I do not know, but I can tell you one
thing. As far as the Guaranteed Income Supplement is concerned—
The Chair: I'm going to remind people to go
through the chair, so I have some sense of who's
Mr. Gilles Fournier: I cannot answer this question, however,
I would like to point out one thing. How is it that the Guaranteed
Income Supplement has never been increased since 1984? Ask yourself
The Chair: That is the question.
Mr. Bill Gleberzon: To reinforce what's been
said, the nature of the labour force has changed in the
past 10 or 15 years. We have more part-time
casual people working. The average income of a family
in Canada is around $60,000—$63,000 or $64,000—and
that's generally because both spouses in the family—or
partners, whichever—are working. If you add up the
amount these people are making and you
divide it, how much could they be making on an
individual basis? But you're looking at
$63,000, which isn't a lot of money.
I think it's fair to say that in the future we're
going to see the need for GIS continuing and
increasing, because beginning in
2011, the first wave of baby boomers are going to turn
65, and that process is going to continue over the
18 to 20 years, so that by the year 2030,
roughly, about one out of four people will be over the
age of 65. There's no reason to believe that the percentage
of those receiving GIS is going to be much lower
than it is today, because of the nature of the
labour force and the nature of work. All you have to
do is read the paper to see how many hundreds
of thousands have been downsized just
over the last six or eight months. When you're
downsized, you don't have money to put into pensions,
and if you're working on a casual part-time basis, where
the greatest growth in jobs is occurring, you
obviously don't have a lot of money or a pension.
So obviously, GIS is going to be with us, should be
with us, has to continue. If present trends continue,
the cost of living is going to be increasing as
well. We had a real shock when the cost of natural gas
suddenly spiked, but if the economy picks up again and
starts expanding again—there's no reason to believe that's not
going to happen again—that's just one example
of what we're looking at into the future.
The Chair: Thank you.
Ms. Libby Davies (Vancouver East, NDP): Thank you.
First, thank you to the witnesses for
Mr. Gleberzon, you said there's probably more than one
database. Believe me, there are probably hundreds or
thousands of databases. The amount of information
the federal government has, millions of pieces of
information on each Canadian, is quite awesome.
I guess, if there were an award for government screw-up
and bungling, where people are actually being hurt,
this would probably take the cake. I just find
Usually we're fighting for expanded social programs,
for new benefits, but here we have something that already
exists, that people are actually entitled to, and yet
they're losing out on $500 million a
year, 380,000 seniors. It's just appalling.
I'm very glad that Mr. Shillington is such a good
number cruncher—I think that's what you call
yourself—because if you hadn't been doing your number
crunching and come upon this black hole, the
fact that so many seniors are missing out, we
might not be here today having this debate.
I wanted to agree that the issue is how to make
this entitlement and benefit more automatic.
We can talk forever about all the different
ways to get information out there, but surely to God,
there has to be a way to design a system so that seniors
who are entitled to this benefit will automatically get
it, even if they're not filing their income tax returns. I know
from the community I represent that there are seniors who
go to the Carnegie Centre in
the downtown east side who haven't filled out an
income tax form for 10 years for one reason or another, and
they have been able to collect certain benefits—more
than 11 months I might add.
So to me, the three issues are how to make it
automatic, how to get a much better
retroactivity, maybe five years, and how we
deal with an adequate cost of living increase.
Mr. Shillington, if I could just follow up with you,
in regard to trying to design something that would
create a more automatic system, do you have any ideas
to offer? And in dealing with the
retroactivity, have you had conversations with HRDC,
and what kind of response did you get from
The Chair: Mr. Shillington.
Mr. Richard Shillington: On the automatic
entitlement, I know
you're meeting with HRDC officials next week, and so you
can ask them. As far as I can see, it's just a
matter of saying, we'll change the process, instead of
waiting for people to reply.
I think some of you may have been through the GIS
application form. I assume that if people file an
income tax return, all the information that's put on
that form is ignored. They're not going to use
the income you write down there on that form,
they're going to use the income from your tax return.
If you write down that your income was zero last year and
apply for GIS, they're not going to use zero, they're
going to look at your tax return and use whatever is on
that. So we have a system where a lot of
stuff is just appearances.
Maybe the world is not as simple as it appears
to me, but if the government can send cheques to
everybody who gets a GST credit without their applying,
it seems to me they can look up people and say,
apparently from your tax return... As I said, some
provinces are doing it now for GIS-like programs. So I
think the application is not a big issue.
As to retroactivity, I've had a couple of
conversations. The HRDC officials have been very kind and open and
said, here are the regulations. The regulations were
made by you people, right? It's in the legislation, it
was passed by the House of Commons, so don't blame the
officials for the fact that the retroactive period is
11 months. It was the House of Commons that decided
that would be the case. They changed it from
five years to 11 months for old age security, and that
was done by the House of Commons. So they say, here's the
legislation—they've been pretty good about that.
But I have basically said, you know, this is
going to be a tough fight. Because
if we're right and it's $500 million a year that people
are missing out on, a retroactive period of five
means $2.5 billion, which will probably get the
notice of people who work for the Department of
Finance. I suspect that's going to be, to put it
mildly, an uphill fight.
Again, I would
differentiate between the retroactive discussions
concerning old age aecurity, GIS, and CPP.
The CPP should be a very simple calculation.
To me, it's no different than a pension plan—though I
am one of the people who doesn't have a
pension plan. If Canada Life had a policy that I
had paid into all my life, and for whatever reason I
applied for my benefits 3 years later, I don't think
they'd get away with saying, no, you're only going to
get the last year, especially if they
knew I was there, knew where I lived, and didn't bother
to tell me about the benefits I was entitled to.
Ms. Libby Davies: Is CPP also only 11 months?
Mr. Richard Shillington: Yes.
The Chair: Ms. Davies, I'd remind you that I'm
Ms. Libby Davies: Sorry.
The Chair: Mr. Kelm.
Mr. Walter Kelm: Let me react to your
question on CPP, and this is something that might be
considered in relation to the retroactivity on OAS—I
might add that
I was an employee of HRDC and Finance.
One way around that might to use what's done in CPP.
In CPP it's only 11 months retroactive, but if you
apply for it after age 65, the amount that's paid on
a continuing basis is increased by 6% for each year,
so that you can get five years, though you won't get the
money in a lump sum. That gets around that $2.5 billion thing.
That wouldn't work for GIS, but it might be
considered for OAS, because it's being done now for CPP.
Ms. Libby Davies: Chairperson, if I just have a
minute or so left, I don't know how we're planning to
follow this up, but it seems to me that the committee
should absolutely focus on the three key areas
and come up with some recommendations to put to,
probably, a couple of departments, so we can try to
get some action on this. Mr.
Shillington, you've said that HRDC is going to look at
casting a wider net, but I think the matter of
how we can make it more automatic and
how we can begin to look at the retroactivity, as well
as a general COLA increase, is something
the committee should follow up. I would hope
everyone would agree to that.
The Chair: I think you'll probably find agreement
on that. And certainly, we'll have officials from the
department here at the next meeting, so some of these
questions we can pose to them and get answers directly.
Ms. Libby Davies: Okay. Thank you.
The Chair: Mr. McGuire.
Mr. Joe McGuire (Egmont, Lib.): Thank you, Madam
I'd like to ask Walter a question on the CPP.
People have worked on the others for over 30 years and
really haven't come up with a solution that applies
right across the board, that catches everybody. You can
have funeral directors involved here, but they have a
self-interest too. They'd like to get paid for their
services, so it's to their advantage to tell somebody
about the benefits that might accrue on the death of a
Especially on the CPP
disability, when you finally get through it, you're
automatically turned down the first trip around, unless
you're at death's door, then they might give it to you.
Otherwise, it will take a year, maybe a
year and a half, two years. I've had files on my desk
for three years
before they get through all the appeal processes.
They needed support while they were
going through all these appeals, and they got
that from social services in the province or
municipality, and when they did get their cheque,
the cheque had to be turned over to them. So
basically, it didn't matter how much retroactivity
they weren't getting anything extra anyway.
But on the whole process of the CPP disability, do you
have any opinions on why there are so many people
applying for it? Nobody ever expected the kind of
pressure that's on that program.
Mr. Walter Kelm: It's been a while since I was
there, but we did some studies
and found—this is not strictly related to your
point—the extent of disability had very little to do with the
hazardous occupations, it had more to do with the
regions they were in. In the Maritimes, where
unemployment was high, you found more disability, and
where unemployment rates were lower, there wasn't as
But that is a tough one. And
it's really the test—as I recall, it hasn't
changed. You have to be considered
incapable of any kind of meaningful work.
And doctors are extremely
hesitant about making yes or no
decisions—they're qualified. So it's that test
Mr. Joe McGuire: Why the explosion of applications
under that program? At one time the program was well
within its limits, and they were able to pay
disabilities and still have leeway.
Mr. Walter Kelm: It's been 25 years since I was
there, but I remember it was starting in the seventies,
a bit before I left. We looked at it, and as I say,
we found it had a lot to do with the unemployment rate
of an area. I suppose one of the reasons it's
exploded is that while the criteria haven't changed,
with the heat the administrators have been getting,
there are a lot of grey areas, so they've probably
agreed with more of these requests.
Mr. Joe McGuire: Mr. Shillington, is there any
partial solution to this through provincial governments and
municipal governments? It must be to their benefit to
have $500 million that could be spent in their
communities or in their province that is not being
spent. Do they have a better handle on seniors than
the federal government has? Could they be of any benefit
to the federal government in upgrading their processes?
The Chair: Mr. Shillington.
Mr. Richard Shillington: The role of the
provincial and municipal governments in this again is
very complex. Let's imagine a senior citizen sitting
in a nursing home, or lying down in a nursing home, in
Ontario. They go and apply for GIS, which they had
been entitled to, but were unaware of. All of a
their income goes up by $3,000 a year. My
understanding of the regulations is that their rent
will go up by $3,000 a year. What will
happen is that the $3,000 GIS will go from the federal
coffers to the provincial coffers.
Mr. Joe McGuire: So why would they bother?
Mr. Richard Shillington: Actually, if we use the
same regulations as apply to other types of
provincial programs, they'll be told by the provincial
government that they must apply for this. One of the
reasons CPP disability applications went up was
that provincial welfare departments were telling
welfare recipients to apply for disability.
Mr. Joe McGuire: But if they're not on welfare, why
would they apply, knowing that they're going to—
Mr. Richard Shillington: They won't necessarily
know the regulations.
Mr. Joe McGuire: If one organization is going to
give and the other one takes away—
Mr. Richard Shillington: I can point to
lots of seniors in nursing homes or in other programs
where, if their income goes up by $1,000, their
standard of living goes down. Suppose somebody
takes $1,000 out of an RRSP. They're going to lose
$500 to GIS. One-third of GIS recipients also pay
income tax, so those people will lose $250 on top of the
$500, because they'll pay income tax on the money they
took out of the RRSP. If they're in social housing,
their rent is 30% of their income. If they're getting
Meals on Wheels, the amount they pay for their meals is
also geared to their income. If they're getting home
care, it is as well. Somebody mentioned demutualization and receiving
dividend income. Right now, if you're in a nursing home
in Ontario and you receive $1,000 of dividend income,
your rent goes up by more than $1,000. You're actually
worse off. That's the kind of system we've
designed for low income people.
Mr. Joe McGuire: So if they know they're going to
be worse off, they're not going to—
Mr. Richard Shillington: They won't know this.
The Chair: No. That's the thing.
Mr. Joe McGuire: They won't know that?
Mr. Richard Shillington: No.
Mr. Joe McGuire: But if they do know it, they're
not going to apply for it anyway, if they're going to be
The Chair: Mr. Gleberzon.
Mr. Bill Gleberzon: That's actually getting back
to something Ms. Davies said, the
three issues to deal with. The issue Mr.
Shillington has raised is the issue we
presented. There is a need to create
within the system an allowance that is not going to
have that happen, because these kinds of incomes,
additional incomes, are usually periodic, not an
Therefore, along with the three
that have been suggested, there are two suggestions
we raised. One is increasing the threshold
at which people are eligible for GIS.
The other is creating this band, if you will, within which
people are eligible to receive additional income, which
usually appears on a periodic basis and for which they
will not suffer, bearing in mind that the financial
suffering, which has other implications, is both for the
current year and the next year. They
may have received $1,000 or even $3,000 in one lump sum
payment, and they will lose GIS that year and, because
the next year is based on the income of the previous
year, the next year. So I think it has to be
expanded beyond the three.
The Chair: Thank you.
We're going into the second round, and normally we'd go
to the opposition, but Ms. Skelton has agreed to let Mr.
Malhi go next. So you've got four minutes, Mr. Malhi.
Mr. Gurbax Malhi
(Bramalea—Gore—Malton—Springdale, Lib.): Thank you,
My question is to Canada's Association for the
Fifty-Plus. Do you have any information about the
many people over 65 who are not eligible
for any benefit because of the residency requirements?
The Chair: Mr. Gleberzon.
Mr. Bill Gleberzon: That's
true. I believe the residency requirement is 10
years, so anyone who has not lived 10
years in Canada would not be eligible. The numbers I
don't know, sorry.
Mr. Gurbax Malhi: At the same time, there are some
people over 65 who have been here less than 10 years, but are
eligible for the benefits.
Mr. Bill Gleberzon: Some of that is due to
the agreements that are made with other countries,
reciprocity agreements. In
effect, they may be receiving whatever they would have
received in their own country, and it's somehow
Without getting too much into a side track,
among the major issues we also hear about are the
taxable rate limits for Canadians who worked in the
States, retire back to Canada, and have 85% of their
social security taxable. This was being introduced
over the past three or four years in a very roundabout
way, and I won't go into the details. Another issue is
British pensioners, people from the U.K. who have moved to
Canada. Because they're outside the U.K. and
Canada doesn't have the same kind of reciprocity
agreement as, say, the States does, they have their pension
frozen at the amount they receive when they turn 65.
That affects a lot of people.
And then you get into the role of other people who,
because of residency requirements, are excluded, or
because they may have come from a country that does
have a reciprocity agreement with Canada, they are not
excluded, even though they've been in Canada for under
Mr. Gurbax Malhi: Does your association have any
comments or information on those who are not eligible
because of the residency requirements?
Mr. Bill Gleberzon: It gets back to
the government policy. I must say, I don't know
whether that's an HRDC policy, if it's bureaucratic
or government. But I think that's an area
the committee should be investigating as well, to
find out exactly what's behind all of that, to try to
sort out what is really a patchwork
of agreements the Canadian government has with other
The Chair: Any other questions, Mr. Malhi.
Mr. Gurbax Malhi: No. Thank you.
The Chair: Ms. Skelton.
Ms. Carol Skelton: I have one quick question here.
The 11-month period commonly
used by the government, is that in other social
programs? Do other social programs use that? Does
Mr. Walter Kelm: I don't know, except that, as I
CPP if you wait five years, the
amount you get on a monthly basis is higher than it
would be. It increases by 6% for each year, and it
works the other way too. If you apply before 65, it's
reduced by 6% for each year; if you apply after 65,
it's increased by 6% for each year, up to age 70.
Ms. Carol Skelton: Okay.
The Chair: Mr. Shillington.
Mr. Richard Shillington: My understanding is that for
the federal programs it's pretty well 11
As an interesting side note, for the child tax
benefit, I wrote to people complaining about the 11
months, because this is low-income children. And
I got a letter that basically says, yes, it's 11
but if you know anybody who wants to go back further,
they can quote subsection 122.62(2) of the Income Tax
and if they're that well informed, we will go back
Ms. Carol Skelton: Really?
Mr. Richard Shillington: I'll show you the letter
in the break, if you wish.
So basically, we have a system that says, it's 11 months
unless you know the secret word; if you know the
secret code, we'll go back further. Maybe there are
secret codes for CPP and OAS and UIS, I don't know and I
haven't been told. But I can tell you that for the child
tax benefit we have 11 months, unless you're on the
inside, and then there's another way. I'll show you the
The Chair: I think we'd all like to see the
Ms. Carol Skelton: Yes, that would be good.
Mr. Richard Shillington: Okay. At break I'll
show it to you.
This is typical. It's like that famous tax ruling
that's being debated
in Winnipeg. Here's the way the capital gains
on trusts works, unless you can meet with Revenue
Canada officials a couple of days before Christmas, and
then there's another way.
The Chair: If there's something like that
you are willing to share with the committee, you can
pass it on to the clerk. She can have it circulated.
Mr. Richard Shillington: Sure.
The Chair: Anything else?
Mr. Marcel Gagnon: Thank you, Madam Chair.
What I have understood from this extremely important and
interesting meeting today, is that, first of all, we have to find
some way of reaching these people who are entitled to it. Of
course, this is the year 2001 and we should be able to find some
way of contacting people who are entitled to it and who really need
Secondly, when it comes to an entitlement, 11 months of
retroactivity does not, in my opinion, make any sense. Even if we
are told that this could cost 2 billion dollars to pay for
retroactivity going back five years, for example, we are not
talking about a gift, but an entitlement. This money has been paid
for. If someone owes me money and does not reimburse me until five
years have elapsed, I am not going to decrease the amount of money
owed me because this person has delayed repayment by five years. In
my mind, 11 months of retroactivity does not make sense. The
retroactivity should go back five years, regardless of what the
amount may be. These are amounts that have been paid for. I do not
know whether I understood correctly, but this is the way I see it.
We are also talking about the need for an adjustment. If,
indeed, the last adjustment to the supplement was made in 1984, we
can imagine how much the poorest people—since those requiring the
supplement are not wealthy but are poor—are penalized by the
increase in the cost of living.
I would like to know if there have been any cases where the 11
months of retroactivity have been challenged. Are you aware of any
The Chair: Mr. Shillington.
Mr. Richard Shillington: I think you misunderstood
the 1984 adjustment. That's the last time the
actual amount paid for the GIS was adjusted, but
there have been cost-of-living increases since.
People could say that the CPI isn't adequate, but
seniors have not been undermined by the cost of living
Mr. Marcel Gagnon: When was the last increase or adjustment
with respect to the cost of living made? I had understood it to be
The Chair: We'll start with Mr. Shillington, and
then go to Mr. Fournier.
Mr. Richard Shillington: OAS and GIS are adjusted every
three months for the cost of living, but the last time the
real value was changed was, I believe, in 1984.
The Chair: Mr. Fournier, you didn't need to answer
Mr. Gilles Fournier: That's clear.
The Chair: Mr. Kelm, did you have anything to add
Mr. Walter Kelm: No, not to that particular point.
Before you leave though, I'd like to make another
suggestion that memory brings back.
The Chair: Mr. Gagnon has half a minute if he has
Mr. Marcel Gagnon: Mr. Kelm wanted to make a brief—
Mr. Walter Kelm: This reminds me of the early days
of CPP. CPP was introduced in the sixties, and
they got a lot of people in from the
private side, particularly the managers, people in
insurance and what not. As a result of that,
a lot of private-sector techniques were
used. One of them, which I know is fairly effective, is
lot of the private sector people joined service clubs.
They found this was a good way to get out to the
community. Some of the headquarters
people were a little leery of that, and there was a fair amount of
discouragement. The government would not pay
membership fees. But some of these people were so
interested in it, they just paid for it out of their
There's an awful lot that can be accomplished at
the local level. You don't have to go to just the
province. You can encourage managers to show some
initiative. Indeed, dealing with service
clubs is a very effective way of getting messages
out, getting service clubs involved in informing
people and doing other things.
The Chair: Thank you.
Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you,
Madam Chair. Even though I'm only back on this
committee briefly, I see my four years' seniority
didn't get me moved up the list.
Voices: Oh, oh!
Mr. Bryon Wilfert: Through you, I'd
like to make a few comments to the
witnesses and maybe solicit a question.
A couple of
years ago this committee dealt with the issue of a
national ID card, the problem being that the SIN card
really has no relevance any more, because it has been
misused by the public in many ways. It was supposed to
be for certain government programs, and now everybody
asks you for the SIN number. It's amazing how we've
moved, though—through you Madam Chair—so
now we have 80% of the population suggesting they would
support a national ID card. Two or three years ago we
had opposition to it.
So there's the question of how much information we
have, and it
seems to me to come down to the issue of whether people
should be entitled automatically to benefits. If so,
what benefits? Or should they apply? Obviously, if
they have to apply, they then have to reapply, at the
moment at least, through the return on their income tax.
I would ask the fundamental question whether or not
the social programs that were designed thirty years ago
are still relevant today. I do not think some of them
are, some of them I personally think we cannot afford
as a society. I know there was a great deal of public
consternation over the CPP review and the fact that it
is going up faster than otherwise, but
if we can't afford it, how do we pay for it?
I would agree with the comment that was made that
unlike OAS or GIS, in respect of retroactivity, the CPP
entitlement should be... The government can go back
seven years on your income tax. If they can go back to
get money out of you for seven years, we should
certainly be able to provide money back to people for
seven years. I think CPP is a special case.
I don't know where the 380,000
came from. I don't know how accurate it is, to
be frank, because of privacy concerns. Maybe it's too
low, maybe it's too high. I guess the question is
whether the Privacy Act is an impediment in
dealing with the situation. The fact is
that we, as members of Parliament, should have the
proper tools—and I guess you could pass this on to the
officials when they're here next week—to inform
constituents how they can acquire this
Finally, Madam Chair, I would agree with the comment
that it is far too complicated a system. In fact,
everything we do is far too complicated. We forget who
we're here for. We're here for the public, not the
other way around. I've given up trying to file my own
income tax, because it's too complicated, and my
accountant keeps telling me that his really is a
full-time occupation. How much is the onus on the
individual? From what I'm hearing from our witnesses,
the onus should all be on the government. If that's
the case, then it would be automatic.
The Chair: Mr. Wilfert, it's a half-hour bell, so
we can stay here until about five to one.
Mr. Bryon Wilfert: Wonderful.
I take it from what you are saying that you would
prefer the automatic approach. If it is the
automatic approach, how much information do we
require from Canadians, and how much are they prepared
to give us? If they don't give it to us, quite
frankly, I don't see how they are entitled.
Through you, Madam Chair, I'll put that to Mr.
Mr. Richard Shillington: I would
prefer it to be automatic. You probably have all
received envelopes recently from the Canada Pension
Plan telling you how much money you have earned every year
since you were 18 years old. I have no choice
but to give them that information. Information goes
from Revenue Canada to HRDC to tell them how much money
I made. If I leave a job, my employer has no choice
but to file a form with HRDC that says how many hours I
worked and how much I made. It's called a record of
employment. There are requirements. Filing my income
tax return is not optional either. I am required to
give both Revenue Canada and HRDC a great deal of
information about me, which is something we do.
That information can be used to deny me a bunch
of benefits. I can't get EI benefits if my income is
too high, so HRDC has to look at my tax return and say,
no, you aren't going to get EI. On old age security, if
my income is over $60,000, they say, no, we
looked at your tax return. So this sharing of
information between government departments can be used
to deny me benefits. I'm saying, maybe we can
share the information to come back and say, it looks
like your income is low enough that you can get GIS. To
me, you can't have it both ways.
The privacy issue I don't think is important. Anybody
who wants can go and read paragraph 8(2)(m) of the
Privacy Act. It says any government
agency can give people information about themselves if
it's to their benefit. Privacy never was an issue.
You can check that next week. The Privacy
Commissioner or people from that office may or may not
be here. I'll happily give you the part of the
Privacy Act that I think makes it clear that this was
never a privacy issue.
As to the 380,000, I asked HRDC officials for their estimate
of what proportion of GIS recipients weren't eligible.
They gave me some percentages, and I looked at the
number of people and did a back-of-the-envelope
calculation. I said 330,000, the Toronto Star said
380,000. I don't think any of us really knows, except
we know it's big.
I want to make another comment about
whether or not we still need these programs. Walter
Mr. Bryon Wilfert: Not whether we need them, but
whether we can afford them—
Mr. Richard Shillington: Well, who's paying for
them and who benefits from them?
Mr. Bryon Wilfert: —and the present form
of how they are delivered.
Mr. Richard Shillington: The GIS, like income
tax, was temporary, correct?
Mr. Walter Kelm: Yes.
Mr. Richard Shillington: The guaranteed income
supplement was introduced as a temporary program until
the Canada Pension Plan was fully matured.
Mr. Walter Kelm: I'll go a step beyond that. In
the paper we put out three years ago—a copy of it
is included in that brief—we saw a perception that
the publicly financed and tax-assisted retirement
represent a net cost
to government. We took a look at that, and there are a
lot of things that are omitted. When you factor all
the considerations in, the publicly financed
pension system and the tax-assisted plan are actually
creating a surplus for the government of about $5
billion a year. That's outlined in the paper we
issued three years ago. As a matter of fact, it was
shortly after that paper was issued that the government
decided to drop the seniors benefit proposal. It was
put forward as a counter to that—it may be
coincidence, but I don't think entirely.
The Chair: Thank you.
Mr. Wilfert, you may not have been bumped up, but you
certainly had more than your time.
Mr. Bryon Wilfert: I've been bumped out anyway.
The Chair: The last question will go to Mr.
Mr. Serge Marcil: Madam Chair, this was more of a comment than
a question. We do have a tendency to confuse things somewhat. When
we talk about a retroactivity period of 11 months for the
Guaranteed Income Supplement, we must understand that there is a
big difference between the supplement and the Quebec Pension Plan
or the Canada Pension Plan, which people pay into. It makes sense
that people who have contributed... Let's take the example of
Canada Life, which Mr. Shillington used. When you make
contributions, it only makes sense that you're able to recover your
investment. The Guaranteed Income Supplement and Old Age Security
come from taxes paid by the entire population. There is, therefore,
a difference, and a significant one at that.
There is something else that needs to be considered. If there
is a retroactivity period of 11 months, it is no doubt because of
the fiscal year, because the government never prepares a budget
over five years. Budgets are tabled on an annual basis. Given the
current economic situation, if the government were to make a
commitment... This does not mean it's right, but I simply want to
explain, as an example, that a retroactivity period of five years
for a group of people who have not received the Guaranteed Income
Supplement when in fact they were entitled to it could represent 3,
4 or 5 billion dollars.
The government needs forecasts. When you look at the current
situation, you can see that even the surpluses of previous years
are all going to be required. So it is a bit more difficult. Two
recommendations have been made. The first recommendation is that
people entitled to the Guaranteed Income Supplement should receive
it. I think that everybody agrees with that. Secondly, Mr. Fournier
recommended that when individuals who are 64 years of age file
their income tax, they be immediately sent a letter advising them
about the supplement. I think that this is an appropriate
You also said that no adjustments had been made since 1984.
That was 17 years ago. We should probably explore this avenue. It
is very difficult to come up with the ideal system, but we must
look after our elderly who are currently in need. You said that 40%
of today's labour force will experience the same problems once they
reach age 65. We don't know what the cost of living will be for
these people, once they reach 65 years of age.
The Chair: Thank you.
Mr. Marcel Gagnon: Madam Chair, I would like to be allowed to
reply. We are not here to partake in a political debate, but this
is the first time that I have heard it said that the government is
giving us a gift. When legislation provides for a system, we are
taxed accordingly. Even though this is not a direct contribution,
the money is taken from taxes. The government never hands out more
than it takes in. We have indeed paid. When it was decided that a
supplement would be provided, we were taxed accordingly in order to
pay for the supplement. The government calculated how many people
were entitled to receive it.
When I receive money from the government, I am sure that I am
not receiving a gift. I am sure that I am receiving money owed to
me as a result of legislation that was passed and taxes that were
paid. You said that we should have a surplus or a small fund for
retroactive payments. That exists. We simply have to administer it
differently. For instance, we could allocate less money for
servicing the debt. But that is an entirely different issue.
The Chair: Right, it's a whole other debate.
Mr. Marcel Gagnon: We should not be taking money from the poor
in order to give it to the rich. Thank you.
The Chair: Okay, thank you.
I will give Mr. Shillington one last go—as long as
we're not into a political debate.
Mr. Richard Shillington: No.
I don't think HRDC is sharing files with the Ontario
government in the prescription area. I think
it's Revenue Canada sharing government files with the
provincial Department of Finance, which is totally
appropriate under the Income Tax Rental Agreement.
You asked about GIS. My understanding is that over the
last 20 years the proportion of seniors who get
GIS has been declining. It's between 35% and 40%, and
that's been declining.
Mr. Walter Kelm: It's 36%.
Mr. Richard Shillington: Thank you.
The question is, will that continue? CPP is
now fully mature. It replaces 25% of your
earnings—most of you with pensions will be getting
more than 50% replacement of your earnings, but CPP is
25%. So that's no longer going to be reducing that
figure. The question is pension coverage, and my
understanding is that pension coverage in the employed
population is now declining. It's a declining proportion
of the working-age population. It is declining slightly,
not dropping off. So I suspect the proportion of seniors who get
GIS will stop declining sometime in the future, when
more and more retiring people don't have pension plans,
and then will go up.
Mr. Walter Kelm: If I could just comment—
The Chair: One short comment—I'm being very
lenient here today.
Mr. Walter Kelm: Just to add to that, the
decline is expected to continue for a while yet, and
we're still, I would say, about 15 or 20 years away from
its stopping. You have to keep in mind that with
seniors, you also have people who have been retired for
a long time, so you've got seniors who are in their
eighties, and they're reflecting really the situation
that existed 20 years ago. That's what's keeping the
number up high, but as they and others die off, the
percentage will go down.
The Chair: Thank you.
I want, on behalf of the committee, to thank Mr.
Shillington, Mr. Fournier, Ms. Lewis, Mr. Gleberzon, and
Mr. Kelm for some very interesting comments. We will
keep you posted as to how we proceed. Thank you.