Seniors: Tax Cuts or Long Term Investment

Well as to be expected the Harper announced his Seniors bribe, err policy two days after the NDP announced their plan. And Harpers was well wait for it, yep tax cuts. 2.2 billion by 2010. To increase the amount of pension income that can be sheltered from income tax from its current $1,000 a year to $2,000 a year -- and increase it to $2,500 over five years. Yep if you are a coupon clipper and living off your investment income this helps you. But not the majority of Canadian seniors who are not as well off. And who do not have RRSP's and rely upon CPP, OAS, and GIS for their retirement.

However when it comes to seniors who are the poorest, and in need of care the NDP announced it would invest in seniors care and home care, for a total of $7.5 billion over the same time period. Investment is always better than taking a dividend, which is all a tax cut really is.The money would provide home care for about 100,000 people, Layton said, taking some pressure off hospitals, and helping to ease wait times.

Harper promises not to touch CPP, OAS, GIS and keep their COLA updated. Thats good because unlike his tax cut for the cuopon clippers, the majority of seniors in Canada rely on their income from these programs to supplement their other pensions.

Seniors on the margins: Aging in poverty in Canada

Until recently, the percentage of seniors with low incomes had been declining. It went from 21% in 1980, to 10% in 1990, to 7% in 2003.⁴ The National Council of Welfare points out that this catch-up period is over. Since the middle of the 1990s, seniors' income has reached a ceiling and the gap between seniors' revenues and those of other Canadians is now increasing. Between 1997 and 2003, the mean income of senior households increased by $4,100 while the average income of other Canadian households increased by $9,000.⁵ The situation is even more pronounced for seniors living alone.

The significant increase in seniors' income over the last 25 years was the result of the maturation of Canada's public pension plans, as more and more people became eligible for the Canada Pension Plan (CPP) and its Quebec equivalent, the QPP. In 1999, 85% of seniors received these benefits, while in 1983, there were fewer than 75%. This increase reflects the greater presence of women in the paid labour force since the 1970s. Another change was the growing number of pensioners receiving the maximum amount of pension benefits. The plans were established in 1966, and the first workers to receive full CPP/QPP benefits turned 65 in 1976. It is only by the 1990s that a majority of retirees were receiving full benefits. This means that the effect of the CPP/QPP on seniors' income has now reached its maximum. An OECD study acknowledged the success of Canada's public pension system in increasing seniors' income, but it also points out that "a large public system matures only once."⁶ Between 1980 and 1995, gaps in income decreased among seniors, the poorest seniors seeing the largest increases in income, thanks to their participation in public pension plans and to increases in the OAS benefits.⁷

The Harper tax cut will do little for women seniors who make up the majority of seniors who live in poverty. So much for family values.

POVERTY IN CANADA: AN OVERVIEW

Seniors:
Note: The number of women 65 and older in economic families who are poor increased from 5.4% in 2000 to 5.9% in 2001.
• 40% of all seniors living alone are poor
• 45.6% of senior women living alone are poor
• 32.8% of senior men living alone are poor


Oh yes and the Harper has never found a public pension fund he liked, when he was in the Reform party, the Alliance party or as President of the right wing business lobby NCC. So his promise now to protect them rings hollow.

Mr. Stephen Harper (Calgary West, Ref.): It may take 10 years to balance the budget, 10 years to lower taxes, and 10 years to reform people's pension Hansard, Thursday, March 7, 1996 -- STATEMENTS BY MEMBERS (008)