“Old age is not for sissies,” said Bette Davis. Indeed, it is not, but the images from our childhood of what it meant to be “old” have changed dramatically. Of course, as I enter my 60th year, my perspective on what it means to be “old,” of necessity, shifts. As another popular aphorism, puts it “the hardest thing to decide is when middle age begins.” Thanks to advances in health care and a focus on healthy living, Canadians are living longer. And today’s senior has different issues and challenges than in our grandparents’ day. I see it every day, as my riding of Saanich-Gulf Islands is one of those with the highest proportion of older citizens. While so much in the mass media sees only the negatives of this aging demographic, there is much to celebrate.

The group Moses Znaimer calls “zoomers” are not abandoning their love of tennis or skiing. The aging population is increasingly embracing the benefits of staying involved, especially as they give back to community through the donations of thousands of hours of volunteer work.

That is, of course, not to deny the challenges. Today’s seniors want to know that pension and retirement savings are adequate to maintain an active lifestyle. The Green Party supports expansion of the Canada Pension Plan. CPP is sustainable and reliable. It is time to review whether RRSP is working as a vehicle. Evidence suggests its uptake is very limited, it has a large impact on government revenues and yet it seems to benefit primarily those Canadians who least need it.

Staying active is challenging in a car dominated culture. An aging population increases the need for convenient, accessible, mass transit. As it becomes less safe to drive at night, seniors want access to public transit.

The most extreme challenges of aging are experienced by seniors living in poverty, a disproportionate proportion of whom are women. While the percentage of seniors living in poverty dropped dramatically from a high of approximately 30 per cent in 1976, to a low of 4.7 per cent in 2007, the poverty rates for seniors have begun to move up once again5.8 per cent in 2008. We cannot be complacent about the economic struggles of our seniors.

Meanwhile, the widely-repeated claim that the growth in aging Canadians as a proportion of our population will drive up health-care costs is not supported by the evidence. Empirical evidence suggests that the aging population is not a major cause of increased costs. According to the Canadian Institute of Health Information: “Analyses of the drivers of increases in public sector health expenditures over the last decade showed that the contribution of aging has been relatively modest. To date, system-level cost drivers such as inflation and increased utilization have played bigger roles in health spending increases,” according to Health Care Cost Drivers: the facts, CIHI, November 2011.

The largest single driver for increased health-care costs is the rising cost of pharmaceutical drugs. We are all too often seeing evidence of over-prescription of drugs, and registration of drugs that actually will harm more people than they help. While seniors are wrongly seen as the reason for increasing health-care costs, the reality is that seniors are particularly vulnerable to the excess use of prescription drugs.

That is not to say that our health-care system is ready for an increase in the diseases of aging, particularly dementia and Alzheimer’s. We need to significantly improve supports for family members. So often a senior becomes the full-time caregiver for their spouse. Particularly, seniors of limited means lose any potential for enjoying life as they sacrifice for their partner. Better respite programs, better supports for home care, as well as more beds in long-term senior care facilities are needed, with supports from both federal and provincial governments.

We also need to have a conversation about the loss of basic rights experienced by seniors in care. One of the most shocking trends that I have uncovered since becoming an MP is the loss of basic human rights for seniors in residential care. Shockingly, I have heard dozens of stories of seniors being denied access to family members, being placed on drugs they do not want, and even being denied the right to go home to family members who would welcome them.

And lastly, we need to grasp the nettle of the thorny ethical problem of assisted suicide and the right to die with dignity. The solutions will not be simple because the problems are complex. Nevertheless, Canadians are demanding better answers. We need to engage in a respectful, informed discussion starting with a review of the various legal regimes in use around the world. We need to ensure that discussion is grounded in bioethics and premised on an acute awareness of the slippery slope of creating the impression that some human lives are worth more than others. What we must not do is to continue to ignore the suffering of well-informed, adult Canadians who wish to make a choice to die with dignity in their own country.

Originally printed in the Hill Times.

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I am attracted to the idea of more municipal bonds. I know we are thinking outside the Bill C-25 box, but what does the member for London—Fanshawe think of Canadians being able to put their retirement savings in municipal bonds in their own communities?

Irene Mathyssen: Madam Speaker, that is something we should be investigating.

In December 2010, the federal government said it was going to sit down with the provinces and talk practically in a progressive way about the retirement crisis we face. Perhaps future talks with a different government would find something solid and workable. I hope there is a different government in 2015. In fact I know there will be a different government.

Perhaps we can sit down with municipalities and find something solid and workable that would invest our pension funds in a way that provides a significant return, safety and security, defined benefits and the kind of pension deserved by Canadians who have spent their entire lives building this country, putting in place the social safety net. It would be far better than allowing that bunch to destroy our social safety net, because, quite frankly, that is what they are up to.

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The general narrative put forth now sounds plausible. The demographic shape of Canadian society is changing. More of us will be older as those born in the post war baby boom, roughly from 1947-1957, enter our senior years. (I can say “our” as a 1954 vintage boomer myself). The story is that all of us will be old and far too few young people will be around to work to generate the wealth to cover our pensions. It sounds plausible until examined. No one is anticipating that the GDP will collapse with fewer workers. We assume the GDP grows because we anticipate the economy will be buoyed by immigration and by less labour intensive economic activity.

Moreover, the Parliamentary Budget Office report (issued Feb. 8) states that, having off-loaded two per cent of health-care costs on the provinces, Ottawa has room to absorb the bump created by retiring baby boomers. In fact, the PBO report says we can increase Old Age Security. Debates about pension reform have pitted the Harper Conservatives who refuse to enhance CPP, against many premiers and opposition parties. Pension reforms must be built upon the system that will best create decent pensions that will keep the elderly out of poverty, require minimum additional contributions and have low administrative and investment costs.

The only system that is capable of meeting these goals is the CPP, a proven system that is the envy of many countries. Its systems can be modified to offer enhanced benefits. Everyone is familiar with the CPP, which is in sound financial health with the latest actuarial report noting that it is sound for at least the next 70 years.

Approximately 35 per cent of older citizens 1.6 million seniors are still dependent upon Guaranteed Income Supplement (GIS) to keep them out of poverty. This is partly because current the CPP objective of just replacing 25 per cent of the average industrial wage is too low. A 50 per cent income replacement ratio would dramatically reduce the reliance on GIS to keep the elderly out of poverty and reduce the cost of GIS to the federal government by billions annually.

The Year’s Maximum Pensionable Earnings (YMPE) should be raised to at least $90,000 and consideration given to raising it to the full Income Tax Act (ITA) limit for Registered Pension Plans (RPP) of ($122,222 in 2009) pending an evaluation/review in a decade.

Subject to an actuarial evaluation, it is expected that these benefits could be achieved with a phased-in increase of CPP contribution rates from the current 9.9 per cent to approximately 14.5 per cent, most, if not all, of which would be offset by reductions in workplace pensions for those with workplace pensions. Redirected GIS savings could be used to offset some of the required contribution increase.

An honest evaluation of the effectiveness of current tax policy will illustrate how inefficient it is for most retirement savings. Net federal RPPs tax expenditures (concessions) were worth $17.6-billion and $11.3-billion in 2007 and 2009. RRSPs cost $12.1-billion and $8.5-billion in the same years. The loss of provincial revenues adds another 35 per cent to 40 per cent.

Defined benefit (DB) plans are much more efficient than defined contribution (DC) plans in that they produce significantly higher pensions for the same contributions, yet DC plans get the same tax support.

RRSPs are terribly tax inefficient in that for the $8.5-billion to $12.1-billion in annual net tax expenditures (around 30 per cent of total contributions), the median value of RRSP assets by Canadians under age 65 is a woeful $40,000 and those over 65 have less than $55,000insufficient to supplement one’s pension, especially at today’s annuity rates. Only 25 per cent of working Canadians contribute to RRSPs, only six per cent with incomes under $20,000. Pro-rating tax expenditures to the value of projected pension would bring fairness and equity back into the system.

Phasing-in the doubling the target income replacement rate to 50 per cent and the doubling the YMPE over the next 47 years is the most efficient way to ensure that future retirees will be able to retire with dignity without inter-generational subsidies.

It’s time to have an open discussion about the fiscal, health, and social implications of the aging population. Let’s start by looking at the evidence before jumping to conclusions.

Green Party Leader Elizabeth May also represents Saanich-Gulf Islands, B.C.

Originally printed in The Hill Times March 12, 2012

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I want to mention something. I hope the hon. member will not mind. The hon. member for York Centre made the same error. I would like to remind us all that we in this Parliament are the Government of Canada. The Prime Minister and the cabinet are Privy Council members, but as a Parliament we are the government. We too often refer to Conservative Party members, whose membership makes up all of Privy Council, as though they are the whole of government. We here as opposition members are also government.

In the view of the hon. member and in the view of the Conservative Party members, would Bill C-25 work for the mobility of workers? About half of Canadian workers have had five or more employers since they started working. Would this plan be viable when the contributions from employers are voluntary and when workers are so mobile?

Charlie Angus: Mr. Speaker, the member makes an excellent point. The new reality of working is that people move from job to job. The days of private pensions have been pretty much deep-sixed. However, people can bring CPP contributions with them.

I do not see anything in this bill that is different from RRSPs except the claim that employers can contribute. If employers really wanted workers to stay, they would say, “Hey, come work for me and I will contribute to your RRSP.” That is not going to happen.

We have a system that works, that is mobile and that people can take with them. Then we have this chimera that is being held out there. The government is trying to push it through as quickly as possible because my dear colleagues in the Conservative Party could not go home and sell this to their people.

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Does she not agree that expanding the Canada pension plan would be far more likely to provide coverage for those who currently are not covered by any pension plan and who do not contribute to RRSPs?

Manon Perreault: Mr. Speaker, I would like to thank the hon. member. I did indeed say that people who have money to invest in RRSPs will have money to invest in the PRPP. But, will people who do not have money to invest in RRSPs have money to invest in a pooled registered pension plan? We need to look at this logically. By improving the QPP and the CPP, we would ensure that workers have a pension plan and a decent standard of living during their retirement.

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Does the hon. member think we can expand CPP right now to deal with those people who do not have pensions?

Hon. Bob Rae: Mr. Speaker, I hope we can. The CPP is a joint plan. It is run jointly by the federal government and the provinces. I agree with the hon. member that we have to recognize that the economy of the past, where people went into the workforce after high school or university and thought their jobs were for life and that they had secure pensions, has changed. Thirty years ago, who would have thought that Nortel would be gone, or that companies we relied on and thought would be there would not be there?

I see my colleague from Sudbury looking at me. When I first started working in Ontario in the 1970s there were 18,000 hourly employees at Inco. There were 15,000 at Hilton Works in Hamilton. Those days are gone. We have to recognize the need for change. The public sector needs to step up with a flexible plan. Until we get the provinces onside, the best we can do is to have some sort of competition for the proposed private plan. We have to recognize that we still have a long way to go to get to a better situation for our current workers and future retirees.

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Ms. May has agreed to have all of her expenses open for public scrutiny and has also suggested capping or cutting MPs’ current base salary of $157,731.

“Canada should pay its MPs well but reviewing their pensions in the context of today’s circumstances would be prudent,” said Green Finance Critic Ard Van Leeuwen. “The divide between pensions haves and pension have-nots is growing in Canada and it`s not appropriate to have MP`s at the very high end of the spectrum.”

“We should be examining options for MP pension reform.  We would be willing to look at any proposals brought forward,” said Green National Revenue and Ecological Fiscal Reform Critic Erich Jacoby Hawkins.  “Originally, there was a need to balance the economic uncertainty of being an MP and to ensure good candidates.  However, with the salary plus benefits, and since an MP is in a position to make maximum RRSP contributions, there is no longer any justification for an MP to have a special pension plan that is richer than one any other employee with similar income would have.  We should also examine pushing back the eligibility for receiving benefits to age 65, thus reducing the potential for double-dipping.”  Once they sit in Parliament for six years, MPs are eligible to collect full pension benefits at age 55.

The recent focus on MP pensions comes from a report by the C.D. Howe Institute revealing that MP pension funds, rather than being invested, are guaranteed by law to grow 10.4% per year.  This is in contrast to other pension funds that are vulnerable to market downturns.  The end result is that taxpayers end up paying $23.30 to the MP pension plan for every $1 paid in by the MP.  The report also says that the pension plan is underfunded by up to $1 billion. The Canadian Taxpayers Federation has been leading the charge to have these inequities addressed, calling the situation “a national disgrace.”

“The bottom line is that we need to ensure that all Canadians have adequate incomes in retirement.  A pension system must keep the elderly out of poverty, require minimum additional contributions and have low administrative and investment costs.   An MP’s pension should be in line with what someone with a similar salary in the public service receives,” said May.

The Greens have also been calling for enhancement of the Canada Pension Plan (CPP) by phasing in the doubling of the target income replacement rate from 25% to 50% of income received during working years.

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