FEWO Committee Report

Chair
Standing Committee on the Status of Women
House of Commons
Ottawa, ON
K1A 0A6

Dear Sir or Madam:

Pursuant to Standing Order 109 of the House of Commons, I am pleased to respond on behalf of the Government of Canada to the recommendations made by the House of Commons Standing Committee on the Status of Women in its Report entitled Improving the Economic Security of Women: Time to Act, tabled in the House of Commons on June 14th, 2007. 

The Government of Canada commends and thanks the members of the Standing Committee for their valuable work in identifying key challenges facing Canadian women, and in making recommendations for ways in which the government can support women’s economic security.

The Government also commends and thanks the many witnesses who appeared before the Committee and made written submissions.  Their thoughtful insights shed light on the challenges that women face.

The Government of Canada strongly supports the objective of enhancing the economic security of women.  Through its two Budgets, Advantage Canada and recent announcements, the Government is taking concrete steps to support this objective.  Some of these include: expanded training opportunities for vulnerable groups through new Labour Market Agreements; enhanced retirement income benefits through changes to the Guaranteed Income Supplement; implementation of a Universal Child Care Plan that provides choice, support and spaces for today’s parents; and appointment of an Expert Panel on Older Workers and a National Seniors Council to explore ways to improve the situation of older Canadians.

The Government Response illustrates women’s significant advances in education and the labour market, as well as recent Government of Canada initiatives that are intended to further women’s advances and economic security.  Our response demonstrates our commitment to improving the economic security of all women, and of all Canadians.

I look forward to working closely with the members of your Committee, and with stakeholders, to help ensure that women’s economic security continues to improve.

Sincerely,

Monte Solberg, P.C., M.P.

Enclosure: 1

Over the past few decades, Canadian women have made significant improvements to their economic security.  In particular, recent achievements in the labour market and in education have allowed Canadian women to make progress and take their place among the best educated and qualified in the world. 

The increased participation of women in the paid work force has been one of the most significant trends in Canada in recent decades.  Employment and labour participation rates for Canadian women are at record highs and are converging towards those of men.  In 2006, employment and participation rates for Canadian women (ages 15 to 64) were the highest among G7 countries and were sixth highest among OECD countries.  The unemployment rate for Canadian women is the lowest it has been in over thirty years and is now below the unemployment rate for Canadian men.  

Women in Canada have also made tremendous gains in education.  Women now constitute the majority of undergraduate and master’s level students.  This achievement gives Canadian women the highest rate of post-secondary educational attainment among member countries of the Organization for Economic Cooperation and Development (OECD). 

Women are also increasing their enrolment in fields of study traditionally dominated by men.  In 2003, women represented half of law school graduates and the majority of medical school graduates.   While men continue to outnumber women in certain fields of study, e.g. mathematics, computer science, engineering, architecture, and business, enrolment growth by women in many of these areas is outpacing that of men.

As well, women have significantly increased their representation in a wide range of professional fields of work, and now represent the majority of new doctors and dentists, and business and finance professionals.  Over the past two decades, the number of women entrepreneurs in Canada has more than tripled.  Since 1997, on average, women have entered the small and medium-sized enterprise marketplace at twice the rate per year as men.

Many women in Canada have been able to seize upon new labour market opportunities and have experienced consequent gains in their earnings and assets.  The incidence of low income among Canadian women has decreased in recent years and it is anticipated that women’s incomes will rise towards those of their male counterparts, given the significant strides that young women have made in education and in the labour market.

Canada has made significant progress in recent decades in reducing low income among senior women.  Despite this impressive progress, women currently represent a majority of seniors living in low income and women continue to earn, on average, less than men.  Significant challenges also remain for certain segments of the female population.  For example, single-parent families are four times more likely to live in low income than two-parent families, and over 80% of single-parent families are headed by women.  Single parent families face greater challenges in balancing work and family responsibilities.  Furthermore, certain groups of women are at higher risk of persistent low income, such as women with disabilities, immigrant women, and Aboriginal women.  These groups are less likely to secure an adequate level of earnings.

The Government of Canada recognizes the importance of helping women and men balance work and family responsibilities, and of assisting vulnerable groups in achieving greater economic independence and security.  Accordingly, the Government of Canada is moving ahead on a wide range of commitments, which will assist women in meeting challenges highlighted in the Committee’s Report. 

The Government of Canada is taking action to enhance women’s economic security by: modernizing federal labour standards; expanding business opportunities for women; supporting work-life balance; improving employment opportunities for vulnerable groups; improving standards of living among older Canadians; and providing affordable housing and reducing the incidence of low income among Canadians.

The Government of Canada launched a comprehensive review of Part III of the Canada Labour Code in December 2004, in recognition of the importance of modernized federal labour standards.  The final Report, Fairness at Work, released in October 2006, recommended steps to address issues that will help families deal with work-life pressures, as well as support flexible work arrangements and quality workplaces in the context of an internationally competitive marketplace.  

Part III of the Canada Labour Code has been amended several times since coming into effect in 1965, to support the participation of women in the workforce, to improve worker protections and enhance working conditions.  The most recent changes took place in 2000 (extending parental leave) and 2003 (establishing compassionate care leave). 

Since 1996, Part III of the Canada Labour Code has fixed the federal minimum wage at the rate prevailing in the province where the employee is working.  Many studies have looked at the effect minimum wage increases have on the employment of workers affected by the change.  The main argument against an increase is that it may cause job losses among low-skill workers.  The evidence suggests that raising minimum wages can reduce hiring, particularly of teenagers and, to a lesser extent, adults under the age of 25.

The concept of non-standard work covers forms of employment that in some cases have existed for a long time. This kind of employment has grown considerably over the past twenty-five years. This phenomenon likely reflects a combination of factors, such as new technologies, the desire of businesses to be more flexible to adapt and compete, and the needs of some workers, including women, to reconcile their work and family-related responsibilities.

Labour legislation was initially designed to protect workers in “traditional” jobs (permanent full-time employees who work for a single employer for long periods).  However, under current labour laws, workers who fall outside the common law definition of “employee” are generally excluded from labour standards protection.  Although federal labour legislation generally does not explicitly differentiate between part-time and full-time, or between permanent and temporary employees, some non-standard employees may not qualify for certain labour law protections because of the terms and conditions of their employment, such as limited job tenure.

The Government of Canada is currently considering the impact of implementing recommendations in the Fairness at Work Report.  In January 2007, the Fairness at Work Report, which made similar recommendations (10.4, 10.7 and 10.14) regarding labour legislation, was presented and discussed at the Federal-Provincial-Territorial Meeting of Ministers responsible for Labour.  The Minister of Labour has since met with a number of employer and union representatives to obtain their views on the recommendations outlined in the Report.  When these consultations are completed, the Government will be in a better position to assess ways to address the Report’s recommendations.

The Government of Canada recognizes the significant contribution that women entrepreneurs are increasingly making to our economy.  With the dramatic surge in the number of women undertaking independent business endeavours, the government is committed to supporting their efforts through a range of business training and counseling programs across the country (e.g. Women’s Enterprise Initiative). 

The Government of Canada, through Industry Canada programs, supports micro-credit through a network of 25 community-based Community Investment Funds providing micro-credit facilities in urban areas.  These initiatives complement the work of the Community Futures Development Corporations in rural and remote communities, as well as individual community-based efforts through cooperative and credit unions such as Vancity in Vancouver. 

An Aboriginal Financial Institution network (ACCS, ACFDCs, and Economic Development Officers) exists, which focuses on community development and could provide business coaching with proper supports.  Previous initiatives (such as Cal Meadow) also indicate that these services may best be provided by financial institutions (such as credit unions), which can absorb and manage the sustained cost and risk of microfinance within a fully integrated and diversified operation.

Programs that provide assistance to women entrepreneurs, such as a Centre of Excellence, are already in place across Canada.  Industry Canada (IC) supports excellence in women’s entrepreneurship through business centres in Ontario and Quebec modelled on the Women’s Enterprise Initiative created by Western Economic Diversification Canada and operated in B.C., Alberta, Saskatchewan, and Manitoba. 

The Ontario program, The Network for Women Entrepreneurs is an IC supported program committed to serving Ontario business women and is administered by the Canada-Ontario Business Service Centre.  Also, Le Centre d'entrepreneuriat féminin du Québec, opened in 2005, is located in Montreal and is funded by Canada Economic Development for Quebec Regions.  In addition, Indian and Northern Affairs Canada also supports Aboriginal Women for Tomorrow and Inuit Women in Business, workshops designed to provide women with the necessary skills and confidence to succeed as entrepreneurs or in other economic activity.  Over 1500 women have participated in these workshops to date.

There are a number of federally supported micro lending programs for Aboriginal people although these are not gender targeted.  They include: programs in Northern Manitoba and Toronto to support traditional crafts and promote self sufficiency; Aboriginal Capital Corporations (ACCs) that provide loans to youth (up to age 35) under an Aboriginal Business Canada program; and an Aboriginal Community Futures Development Corporation (ACFDCs) that has developed a micro lending circle.

The Government of Canada is committed to supporting working women across the country and to helping Canadians balance the demands of their working and family lives.  The Government of Canada is taking steps to support work and family choices through a Universal Child Care Plan that provides choice, support and spaces for today’s parents and through a range of supports available in the Employment Insurance program. 

Canada’s Universal Child Care Plan

The federal government has implemented a Universal Child Care Plan to help parents balance work and family life.  It includes direct supports to parents through the Universal Child Care Benefit; creation of new child care spaces through increased transfers to provincial and territorial governments; and tax credits for businesses to encourage them to create child care spaces. 

In 2006, the Government of Canada introduced the Universal Child Care Benefit that provides families with $100 per month for each child under the age of six, which can be used to offset the costs of whatever form of child care they choose.  This benefit provides 1.5 million Canadian families with $2.4 billion annually.  The Child Tax Credit (2007) will also provide $1.5 billion per year in tax support for over 90% of families with children.  These new measures are in addition to supports such as the Child Care Expense Deduction, and the Canada Child Tax Benefit, which includes the National Child Benefit Supplement.

Recognizing that the provinces and territories have primary responsibility for child care services, the Government of Canada’s Universal Child Care Plan includes an increased transfer to provincial and territorial governments to help them to expand the supply of child care spaces.  Beginning this year, an additional $250 million per year is being provided to the provinces and territories to support the creation of child care spaces.  For 2007-2008, it is being provided through direct transition payments.  Beginning in 2008-2009, it will be part of the Canada Social Transfer (CST).

Canada’s Universal Child Care Plan also includes a tax incentive for employers to encourage them to create new child care spaces.  Budget 2007 introduced a 25 % investment tax credit for businesses that create new child care spaces, to a maximum of $10,000 per space created. 

In total, the federal government is transferring $1.1 billion to provinces and territories this year for programs and services for families with children.  This includes funds already provided in support of the 2000 Early Childhood Development Agreement and the 2003 Multilateral Framework on Early Learning and Child Care.  This amount will grow to $1.3 billion by 2013-14 as a result of the 3% annual increase that is part of the renewed CST.

The Government is providing over $5.6 billion in 2007-2008 in support of early learning and child care through transfers to the provinces and territories, direct benefits for families and related tax measures. 

Employment Insurance (EI) Program

The Government of Canada helps Canadians balance work and family responsibilities through a range of supports available in the Employment Insurance program, which is administered by Human Resources and Social Development Canada.  EI is a social insurance program that temporarily replaces lost employment income as a result of job loss, maternity/parental leave, sickness or caregiving for the gravely ill.

Overall, slightly over half of the $12.7 billion paid out by the federal government in total EI Part I benefits went to women during 2005-2006.  Women received $3.4 billion of the $4 billion paid out in maternity, parental, sickness and compassionate care benefits (EI Special Benefits) and $2.8 billion of the $8 billion paid out as a result of job loss (EI Regular Benefits).

EI Special Benefits: Maternity and Parental Benefits

The Government of Canada has been providing maternity benefits to Canadians for over 35 years and parental benefits for almost 20 years.  More recently (2000, 2001), a number of major changes were made to improve access and flexibility that have proven highly successful in providing support to new parents, including:   

• benefit duration was doubled to a full year;
• the minimum number of insurable hours needed to qualify for special benefits was reduced from 700 to 600;
• the two-week waiting period for the second parent claiming parental benefits was waived;
• a provision was made allowing parental benefits recipients to work to maintain labour market attachment;
• a benefit repayment provision (i.e., clawback) was eliminated for all special benefits claimants (sickness, maternity/parental, and compassionate care); and
• a provision was introduced to allow parents returning to the labour market after absence for childbirth/care to qualify with the same number of hours as other workers.

The Committee recommends that the Department of Human Resources and Social Development expand maternity and parental benefits to cover two years, and increase the benefit rate to 60%.  To date, evidence indicates that the total duration of Canadian benefits compares favourably with international standards.  Most countries with a longer duration eventually move to a flat-rate benefit or a lower replacement rate towards the end of the parental period.  Evidence from the 2006 Monitoring and Assessment Report indicates that the current replacement rate does not appear to undermine the use of maternity and parental benefits, as parents use on average 94% of the entire year of entitlement. 

In addition, the Employment Insurance Act allows provinces to enter into agreements to establish provincial programs that replace EI maternity and parental benefits.  The Government of Quebec has implemented its own parental program, which provides claimants the option of a higher replacement rate.   Such provincial programs can build on the federal government’s experience in providing maternity and parental benefits to meet the broader social objectives in their respective jurisdictions.

EI Special Benefits: Compassionate Care Benefits

Since January 4, 2004, six weeks of the Compassionate Care Benefit (CCB) and eight weeks of job protection have been made available to EI-eligible workers, who must be temporarily absent from work to provide care and support to a family member who is at significant risk of death within 26 weeks.  In June 2006, the Government of Canada made an important improvement to the benefit when it expanded the eligibility criteria from caring for parents, children and spouses to a broader range of EI-eligible workers (those caring for siblings, grandparents, grandchildren, in-laws, aunts, uncles, nieces, nephews, foster parents, wards, guardians, or those whom the gravely ill person considers to be like a family member).  In 2005-2006, women received $5.4 million of the $7.8 million in Compassionate Care Benefits paid out to Canadians. 

Concerning the Committee’s recommendation that the benefit duration of the CCB be extended, the maximum length of six weeks is based on a variety of evidence that was examined.  This included medical evidence, and what was heard from Canadians through research, including who they cared for, and how long they were absent from work to provide care.  The Government of Canada determined that six weeks of benefits within a 26-week period represented a balanced approach to meeting the needs of Canadians, while at the same time respecting the needs of employers.  Research indicated that 72 per cent of Canadians who take time off work to care for a family member take less than six weeks.  This has been echoed by recent survey results (2007) indicating 76% of those in this situation took six weeks or less away from work.  The importance of benefit duration is recognized by the Government of Canada as a key element of program design.  The proportion of clients that use the maximum number of weeks of CCB available will be monitored and reported on regularly as the CCB matures.  This information will help to further inform Government of Canada efforts to ensure that the CCB remains responsive to the needs of those working Canadians requiring income support when caring for a gravely ill family member.

Concerning the recommendation that the CCB be expanded to include individuals other than the gravely ill and at significant risk of death, it should be noted that the benefit is designed to provide temporary assistance during a period of crisis.  The broader population of the sick and elderly face various conditions that are potentially longer-term in nature.  The CCB is available to support their caregiving during the most critical circumstances.  Beyond the CCB, there are a range of longer-term supports that are administered through the tax system or through services and supports provided by provincial and territorial governments. Although the CCB is only one tool for providing support to caregivers, it has already played an important role in supporting thousands of Canadians.  Canada has played a leadership role in the establishment of this important social insurance benefit.

EI Regular and Special Benefits: Access

In the Report, the Committee expresses concern that women have lower access to employment benefits than men due, in large part, to the nature of their work.  The Committee recommends that the federal government change the eligibility criteria under the Employment Insurance Act to increase access to benefits to persons in part-time or part-year work.

While women make up the majority of part-time workers, evidence to date indicates that EI coverage for women remains high.  Of women claiming EI regular benefits, 93% qualified with 700 or more insurable hours in 2005/06.  Over 91% of all female employees have sufficient hours to collect EI special benefits, should they need them.  In addition, among women with children aged 12 months or less in 2005 who had insurable employment in the year prior to childbirth, 86% received maternity and/or parental benefits.

The EI program also contains a number of features that are sensitive to the particular needs of those involved in seasonal (part-year) employment.  For example, the program is currently designed to respond automatically and quickly to local labour market conditions.  Variable entrance requirements ensure that, as unemployment rates increase, entrance requirements are lowered and the duration of benefits increases. 

Self-employed workers are generally not insurable under EI and do not pay EI premiums due to the structure of their contractual relationship.  Surveys of self-employed workers, conducted periodically since 2000, reveal a diverse population with varied needs – some self-employed workers have expressed interest in being covered by EI, while others remain strongly opposed.  Most (68%) of the self-employed would choose not to be away from work for more than one month even if up to 50 weeks of maternity/parental benefits were available. As such, it is not clear that current program design and benefit duration would meet the needs of the self-employed.

A specific area of divergence among the self-employed is the issue of mandatory premiums without which an insurance-based self-funding program would not be sustainable. Voluntary coverage of the self-employed would not be financially viable on insurance principles, since only those who expect to draw benefits would participate.

The challenges associated with designing a public insurance scheme that would respond to the different needs and work patterns of the self-employed were more thoroughly discussed in the 2006 Government of Canada Response to the fifth Report of the Standing Committee on the Status of Women.

The Government of Canada recognizes the unique challenges that some vulnerable groups face to participating in the workforce.  These groups include:people with disabilities, recent immigrants and Aboriginal Canadians.  The Government of Canada has taken action to eliminate barriers to labour market participation for these groups. 

Budget 2007 announced funding of $3 billion over six years, starting in 2008-2009, for labour market training to be delivered through new Labour Market Agreements with provinces and territories.  These funds are intended to help individuals not eligible for Employment Insurance related training, including underrepresented groups, get the skills they need and employers want.  The Minister of Human Resources and Social Development is working with provincial and territorial counterparts to conclude agreements that make use of these new investments, and to ensure appropriate Reporting and accountability.

Provinces and territories may provide, according to their regional needs, opportunities for literary and basic skills training, workplace readiness assistance, wage subsidies, on-the-job training, and basic workplace skills upgrading for those not covered by existing programs, including under-represented groups such as immigrants and people with disabilities.

People with disabilities

The Government of Canada provides a number of important initiatives to promote and support the full inclusion of people with disabilities in Canadian society.  The Opportunities Fund (OF) provides employment related programs and services for people with disabilities.  Currently, with an annual budget of $30 million, the program provides services to approximately 5,000 Canadians with disabilities a year.  The terms and conditions for the Opportunities Fund for Persons with Disabilities were recently extended to March 31, 2009.  The Government of Canada also transfers approximately $220 million annually to provinces to administer programming for people with disabilities through Labour Market Agreements for Persons with Disabilities (LMAPD).  As well, the federal government provides a number of disability-related tax measures, such as the Disability Tax Credit (DTC), that recognize the additional costs faced by people with disabilities.

In addition, Budget 2007 committed to the creation of the Registered Disability Savings Plan (RDSP) as well as a Working Income Tax Benefit (WITB), which will provide an additional supplement for low-income working Canadians with disabilities that often experience greater barriers to workforce participation.

Recent Immigrants

Citizenship and Immigration Canada (CIC) funds the delivery of settlement programs to help reduce the barriers faced by newcomers as they integrate into the country’s society and economy.  The majority of CIC’s settlement funding (which includes an additional $1.3 billion over five years identified in Budget 2006 and 2007) is devoted to the provision of language training programming.  It provides basic language training in one of Canada’s official languages to newcomers of legal school-leaving age (15 years or older), including successful refugee claimants.  To facilitate access to LINC, child-minding services are available to LINC participants. 

The Government recognizes that immigrants are central to Canada’s continued prosperity, which hinges on their successful integration in the labour market.  Budgets 2006 and 2007 committed to facilitating the assessment and recognition of credentials of skilled immigrants.  Following consultations with Provinces, Territories and stakeholders, the Minister of Citizenship and Immigration launched the Foreign Credentials Referral Office on May 24, 2007, with $32.2 M in funding over five years and $6.4 M on-going. 

Live-in Caregivers

The Government of Canada recognizes the importance of protecting the rights of all workers, including participants in the Temporary Foreign Worker Program (TFWP), such as the live-in caregivers.  Live-in caregivers are provided with information through pamphlets and websites on their legal rights to fair working conditions and fair treatment under provincial labour laws.  Other available information is given on the right to refuse work, the right to privacy, use of free time and dealing with abuse.  As well, CIC funds a program in the Philippines, where the majority of live-in caregivers originate, which provides pre-departure counselling on rights and adapting to life in Canada.  A contract between the employer and the live-in caregiver defines job duties, hours of work, salary and benefits, and the employer’s obligations.

As part of recently announced improvements to the TFWP, increased monitoring and follow-up of employer compliance with the program requirements will increase protection for all streams of the TFWP, including participants in the Live-in Caregiver Program (LCP).

The live-in requirement is a vital component of the LCP.  Although there are Canadians qualified to work as caregivers, there is a shortage of those willing to work as live-in caregivers.  Recommendation 8, suggesting that the live-in requirement be made optional, would mean that temporary foreign workers would be taking jobs for which there is already a sufficient labour supply of Canadians.

The Government of Canada is working closely with provinces and territories to ensure the rights of all workers, including participants in the Live-in Caregiver program, are protected.

Aboriginal Canadians

The Government is committed to working with partners to ensure that all Aboriginal women and men have access to skills training and jobs that enable them to participate in the workforce and the economy, and to improve their standard of living.  The Aboriginal Human Resources Development Strategy – a five-year $1.6 billion partnership initiative – helps Aboriginal peoples prepare for, find and keep jobs.  Also, the Aboriginal Skills and Employment Partnerships program provides training and job opportunities for Aboriginal peoples on major economic development activities.  Budget 2007 provided an additional $105 million over five years for this program.

Canada’s retirement income system is key to the economic security of senior women.  This system contains three pillars: 1) Old Age Security (OAS) and the Guaranteed Income Supplement (GIS); 2) the Canada and Quebec Pension Plans (C/QPP); and, 3) tax-deferred and other private savings and workplace pensions. 

This mix is viewed internationally as an effective way of providing for retirement income needs.  Canada is one of the few developed countries with a public pension system that is financially sustainable today and in the long term.  The three pillars work together to prevent and alleviate low income in old age and to assist Canadians in preventing declines in their standard of living upon retirement. 

The Government of Canada Tax Fairness Plan introduced the splitting of pension income for Canadians, and increased the pension credit as well as the age credit, providing significant tax relief for many of Canada’s seniors.

Expected payments to Canadians for the current fiscal year (2007-2008) for the CPP, OAS and GIS programs are $27 billion, $25 billion and $7 billion, respectively. 

OAS and GIS

The Old Age Security (OAS) program is a non-contributory, residence-based program.  It provides a basic pension to virtually all seniors 65 years of age and over who meet the residence requirements. 

Low income OAS pensioners may be eligible for the income-tested, non-taxable, Guaranteed Income Supplement (GIS).  GIS benefits are designed to supplement the income needs of seniors with little or no other income, by providing a minimum guaranteed income.  The amount of the supplement is based on marital status and family income.  Currently, close to 1.6 million seniors receive the GIS, most of whom are women.  OAS/GIS benefits are adjusted quarterly to take into account increases in the cost of living as measured by the Consumer Price Index (CPI). 

In addition to the quarterly indexation of benefits, the GIS maximum benefit was increased by 7% or $36 per month for single persons and $58 per month for couples, in the past two years.  The vast majority of GIS recipients benefited from this increase, including more than 50,000 seniors who became eligible for benefits as a result of the increase.  Increases to the GIS since 2005 will increase payments to low-income seniors by an anticipated amount of $2.7 billion over five years. 

GIS benefits help many seniors to stay above low income levels.  For example, OAS/GIS benefits for couples in October 2005 ($20,431) were above the 2005 Low Income Cut-off (LICO) in all but large urban centres.  Since most GIS recipients have other sources of income, the provision of the GIS benefit puts many of them above the LICO.  GIS recipients may also be eligible for provincial income supplements which help them increase their total income.

The Government of Canada recently passed Bill C-36, which allows for the automatic renewal of the GIS, which will ensure low-income seniors continue to receive this important benefit.  The Government of Canada recently created a National Seniors’ Council to advise on seniors issues of national importance, including low-income seniors. 

Canada Pension Plan (CPP)

Canada is one of the few developed countries with a public pension plan that is financially sustainable in the longer term.  The Chief Actuary of the CPP has confirmed that the CPP is financially sustainable for at least the next 75 years, ensuring this benefit will be available to assist Canadians when they retire.  The CPP must be equitable and sustainable, not only for today’s recipients, but also for future generations.  Any new benefit or increase would have to be fully funded, as stipulated in the CPP legislation.    

As a contributory, earnings-related program, entitlement to CPP benefits is largely determined by the extent of the contributor’s labour market attachment.  The intent of the CPP is basic replacement of pre-retirement earnings, not provision for all retirement needs. 

The fundamental objective of the CPP is to provide basic earnings replacement protection in the event of disability, retirement or death.  The current structure of contributions and limits ensures that basic coverage is provided at modest cost to both workers and employers, for whom contributions are mandatory. 

Allowing voluntary contributions while outside the workforce or in addition to existing contributions, as suggested by the Committee, would move the CPP away from the fundamental objective of basic earnings replacement.  If this recommendation were put in place, it would assist only certain groups. Notably, individuals who can afford to pay additional contributions would be better able to take advantage of this measure, while others may have insufficient income to increase contributions.  In addition, most individuals may have to pay both the employer and employee share of such contributions.  These proposals would have to be assessed in the context of the entire retirement income system, most notably the effects on employer provision of pension arrangements for workers.     

The existing drop-out provisions of the CPP reflect the goal of providing some protection to contributors for periods of low or no earnings.  Striking an affordable balance between this protection and contributors’ labour market attachment is essential.  While the CPP does not contain a specific drop-out provision designed to protect contributors with caregiving responsibilities, a “general” drop-out provision automatically excludes 15% of the months of lowest earnings in the contributory period from the calculation of pension benefits.  This general drop-out provision is intended to compensate for times of unemployment, illness, or schooling, and can also help eligible caregivers offset the negative effects of reduced work. 

Designing a stand-alone caregiving drop-out provision for the CPP, as proposed by the Committee, would be challenging.  Challenges include, but are not limited to defining and gaining consensus on: the range of family members who could qualify under such a provision; the range of tasks that could count as caregiving; the length of time as well as the number of times portions of the contributory period could be “dropped out”.

Furthermore, any new benefit or increase would have to be fully funded, in keeping with the guiding principles of the 1998 reform package and the CPP legislation.  The magnitude of the increase would depend on the design of the proposed provision.

The federal government cannot unilaterally amend the CPP.  The federal and provincial governments are joint stewards of the CPP, and any major changes to the CPP, including drop-out provisions, require the approval of Parliament and of at least two-thirds of the provinces representing at least two-thirds of Canada’s population. 

CPP Survivor Benefits are designed to assist individuals who have suffered the loss of a spouse or common-law partner, by replacing a portion of lost income.  The CPP survivor benefit provides basic replacement income to a spouse or common-law partner on the death of a CPP contributor.  In addition to their survivor benefit, most CPP survivor pension beneficiaries aged 65 or older receive the basic OAS pension.

Surviving spouses or common-law partners aged 65 or older receive up to 60% of their deceased spouse's or partner’s CPP retirement pension.  The payment of CPP survivor benefits is based on a formula driven by the level of earnings and length of contributions of the deceased contributor and, (if applicable, the surviving spouse).  Survivors who do not have a CPP retirement pension in their own right receive 60% of their spouse’s retirement pension.  Those who receive their own retirement pension receive a combined benefit.

The CPP survivor benefit is particularly important for today’s older women, who represent the vast majority of today’s CPP survivor beneficiaries.  Overall, tomorrow’s female survivor beneficiaries will likely be less reliant, relative to previous generations, on the CPP replacement of income of a deceased spouse or partner to maintain their standard of living.  This is evidenced by an increasing proportion of CPP survivor beneficiaries who receive a partial benefit as a result of having their own CPP retirement pension, reflecting their participation in the paid labour market and associated CPP contributions.

Social Security Agreements

The majority of social security programs around the world, including Canada’s, require minimum periods of residence or contributions to qualify for a benefit.  Many immigrants to Canada may not have sufficiently long periods of residence or contributions to meet the eligibility requirements for either Canadian or foreign social security benefits.  International social security agreements allow for periods of residence or contributions to be added together to meet requirements and receive a benefit from Canada, the foreign country, or both.

The Government of Canada has signed 50 international social security agreements since 1977.  Every three years, Canada prioritizes future negotiations with other countries based on both social and economic considerations.  It is Canada’s objective to conclude as many agreements as possible to provide pension coverage to an even larger proportion of immigrants.  An agreement with Japan is expected to enter into force in early 2008.  Canada is currently in negotiations with Poland, Serbia, and the former Yugoslav Republic of Macedonia.  Negotiations with several other countries – yet to be determined – are expected to begin in 2008.

The Government of Canada is working towards increasing the availability of affordable housing across Canada – one among several approaches that the Government is taking to help low-income Canadians secure an adequate standard of living. 

Affordable Housing

The Government of Canada recognizes the housing needs of low-income Canadians, including women, and has committed to a range of investments and initiatives that will work to improve the housing situation for many women.  Although the programs are not targeted to women specifically, women tend to benefit most from Government funding since women, whether in single-parent, female-led households, living alone or otherwise, are disproportionately represented among Canadians with housing needs.  It is estimated that 61% of the occupants of the existing social housing portfolio are women and girls, and 78% of single-person households are women.

Currently, the Government of Canada is making substantial investments in the production of new, and preservation of existing, affordable housing in collaboration with provinces, territories, and local communities.  In 2006, the Government made a one-time strategic investment of $1.4 billion in three provincial/territorial housing trusts that will assist Canadians, including many women and children, to find safe, affordable housing.

In 2006, the Government also announced an investment of $270 million over two years for the new Homelessness Partnering Strategy aimed at combating homelessness in communities across Canada.  It will be used to provide concrete, meaningful and lasting results for some of Canada’s most vulnerable citizens, including women, children and Aboriginal peoples.

The Government of Canada is in the process of investing $1 billion under the Affordable Housing Initiative (AHI) through bilateral agreements with all the provinces and territories.  Provinces and territories have the flexibility to design and deliver programs that are best suited to their affordable housing needs, including the needs of single women and women with children.  The federal investment is being matched by provinces and territories and third parties.  As of March 31, 2007, $758 million of the $1 billion being invested under the AHI has been committed or announced for the provision of some 32,000 housing units across Canada.  The Government of Canada also provides $1.8 billion annually through the Canada Mortgage and Housing Corporation (CMHC) to support the maintenance and infrastructure of approximately 630,000 housing units dedicated to lower-income households, including many single women and single-parent households led by women. 

To help maintain the existing affordable housing stock, the Government of Canada announced a $256 million two-year extension (to March 31, 2009) of CMHC’s housing renovation programs.  This includes the: Residential Rehabilitation Assistance Program (RRAP); Home Adaptations for Seniors Independence Program (HASI); and Shelter Enhancement Program (SEP).  In 2006, approximately 20,500 low-income households, including single women and single mothers, were served by housing renovation programs.  In particular, SEP assists in repairing, rehabilitating and improving existing shelters for women, children and youth as well as men who are victims of family violence.   

CMHC also conducts research and provides statistical data on the housing needs of women.  A gender-based analysis of the AHI program will be completed as part of the normal program evaluation.   The CMHC 2007 Consumer Survey will include gender specific questions that will help CMHC better understand the needs of women who are buying homes.  CMHC is also looking to other sources of information to better understand this segment of the mortgage market.

Through CMHC and Indian and Northern Affairs Canada (INAC), the Government of Canada provides an estimated $261 million a year to help address housing needs on reserves.  This supports housing construction and renovation, and ongoing subsidies for some 25,000 rental units.  CMHC’s Housing Renovation Programs are also available to First Nations. 

In Budget 2007, the Government announced a $300 million First Nations Market Housing Fund (FNMHF) that will give First Nations people living on-reserve a better chance to own their own homes.  Off-reserve Aboriginal households are eligible for all current federal housing initiatives, for example the Affordable Housing Initiative (AHI) and housing renovation programs.

Improving Standard of Living for Low-Income Families

In addition to these extensive investments in housing initiatives, the Government of Canada supports low-income Canadians through a range of programs, transfers and tax measures that work together to improve self-sufficiency and adequacy of income. 

Like most countries, Canada does not have an official measure of poverty.  Instead, a range of measures are used to assess low income.  All current measures of low income show that significant strides have been made over the past decade in addressing low income in Canada.

Provinces and territories play a key role in supporting low-income Canadians in meeting their basic needs, and have primary jurisdiction over social assistance, which is income support of last resort, as well as social services, health, education and housing.

The Government of Canada continues to work to reduce the incidence of low-income for all Canadians, which has contributed to a decline in low-income from 15.7 % in 1996 to 10.8 % in 2005 (as measured by the LICO).  While challenges still exist with respect to gender and poverty, significant progress is being made in improving the low-income situation of women.  For example, the low-income rate among females in Canada has been steadily declining since the mid-1990s, from 16.5 % in 1996 to 11.2 % in 2005.

The Government of Canada currently supports low-income Canadians through a range of programs and initiatives that work together to improve their self-sufficiency.  The Government is supporting families with the cost of raising their children through the Canada Child Tax Benefit, which will provide $9.5 billion this year to families with children, including $3.7 billion through the National Child Benefit Supplement to          low-income families with children; the Universal Child Care Benefit, which provides $100 per month for each child under age 6; and a $2,000 Child Tax Credit, announced in Budget 2007, will provide up to $310 in tax savings for each child under the age of 18.  

Budget 2007 also introduced the Working Income Tax Benefit (WITB), which seeks to reduce the welfare wall, and make work for low-income Canadians more rewarding.  This is in addition to the Canada Employment Credit of up to $1,000 to help working Canadians.

The Government has renewed and increased the Canada Social Transfer (CST) to provinces and territories for social assistance, early childhood development, early learning and child care, and post-secondary education.  The CST has been extended on a long-term basis and will increase 3% annually, starting in 2009-2010. 

The Government of Canada through CMHC also provides programs and initiatives that assist First Nations in working toward self-sufficiency in housing through the acquisition of knowledge, skills, training and other resources.   The Housing Internship Initiative for First Nations and Inuit Youth provides on the job training to assist youth in pursuing employment in the housing industry.