New bill would see immigrant seniors receiving Old Age Security paymen

[scribblet]

Typical Liberal policy - bring in immigrants who are a drain on society, the purpose of immigration is to bring in people who will benefit the new country - it is not a world-wide welfare program.

[August1991]

It's pretty simple, really. Money coming in should be equal or greater to the money going out. Anything else is frankly living off one's credit card. That governments seem to forget this at times is nothing new.

That comparison is stupid and wrong when applied to a society at large. Governments use other people's money to give to other people. In that narrow sense, there is no such thing as "government debt".

If you have a large bank account and your daughter has a mortgage, is your family in debt?

Now then, if the government cuts taxes, goes into debt so that your daughter can pay off her mortgage, is Canada in debt?

The fact is that Canada is, overall, a very, very wealthy country. To characterize Canada as "in debt" is wrong and stupid.

Typical Liberal policy - bring in immigrants who are a drain on society, the purpose of immigration is to bring in people who will benefit the new country - it is not a world-wide welfare program.

The issue of who we accept as immigrants should be separate from what benefits Canadians receive.

----

Please people, apply a bit of thought some times before letting your knee instinctively jerk.

Edited June 15, 2008 by August1991

[Guest American Woman]

I can understand how bringing elderly immigrants into Canada with the aim of keeping families together helps contribute to Canada's values. As far as the money goes...somehwere in the scheme of things are immigrant families who come here because subsidies paid to people here helped depressed foreign economies to the exent the people there felt compelled to leave. I have a real problem with further damaging developing economies by only inviting their professionals to immigrate here.

I'm not suggesting that only "professionals" should be invited to immigrate to Canada, but I do think it's going a bit far to extend that invitation to the entire family. Grown children have been moving away from their families-- thousands of miles away-- for some time, and often it's because they cannot find work in their hometowns. It isn't the government's responsibility to keep these families together-- especially at someone else's expense-- and no one expects it to. I'm sure many of those contributing to the Old Age Pension these new elderly immigrants would receive are among those who have had to move away from their families.

I have no problem with deliberately choosing to trump economics with virtue if all it takes is a little compassion. As for the money...I know damn well the government will be giving just as much or more to some filthy-rich corporation that's taken far more out of the system than its ever put in.

It doesn't just take a little compassion, though. It takes money, and in this day and age, many young families are struggling to make ends meet with both parents working. Doesn't seem fair to me that they should also have to shoulder the responsibility of providing for new elderly immigrants who've never paid into the system just so their families can stay together. I don't think that's being hard hearted; I think it's being fair.

With regards to the government giving money to rich corporations, that's not going to change if this law goes into effect, we both know that; so the money will have to come from somewhere. Where do you think that would be?

Besides all this, what would Jesus do?

He'd perform a miracle and provide for the masses just like he fed thousands with five loaves of bread and two fish.

Edited to add:

August1991,

Thanks for all the information you provided-- I really appreciate it. There's a lot to take in with all the information you and Riverwind have provided, but I'm definitely understanding your system better than I was before.

Edited June 15, 2008 by American Woman

[msj]

A few things:

1) Riverwind is wrong when he talks about clawbacks leading to some seniors paying a marginal tax rate of ">75%."

The OAS clawback kicks in around $63,000 of net income.

The claw back rate is 15% of OAS.

This means that the OAS pension (roughly $6,100 for 2008) would be entirely clawed back between net income of $63,000 to ~ $103,000.

Most federal/provincial marginal tax rates in this income range vary between ~30% - ~ 39%.

Ok, so 15% claw back + 39% marginal tax rate is still 54% right?

Well, actually, the OAS that is clawed back is deducted against taxable income. So, in reality, a senior with, say, $95,000 of taxable income is facing down a marginal tax/claw back rate of ~ 48%.

That is a far cry from the 75% guess made on page 1.

2) GIS is the Guaranteed Income Supplement. It is meant to supplement the OAS for poor seniors. It is income tested (OAS does not count as income in the test but everything else pretty much does count).

It is clawed back at 50 cents on the dollar. So, any senior who makes $100 of interest income will lose $50 of GIS pension.

The GIS pension goes on the tax return but is deducted further down so it is not taxable (but would be used to calculate OAS clawback, EI clawback etc... as applicable - an important distinction for seniors who have a large capital gain for one year from finally selling the cottage, for example. Not only do they lose their GIS for the next year but they have their OAS clawed back for the past year).

Given the income thresholds and tax exemptions available for seniors, the total marginal tax rate/claw back rate is normally around the 50% of the GIS lost (IOW, by the time the GIS is lost entirely, seniors are then normally starting to pay income tax at marginal tax rates - but this depends on a number of factors).

3) Any attempt to compare the US to Canada systems should consider that there are important differences such as the rate that people pay into the CPP versus into US social security, different maximum earnings (which means the tax stops being applied at different income levels), and the fact that Canada's CPP system has been changed to take excess contributions and invest them for future use rather than rely on the old fashioned model of having the "young" pay the CPP of the "old."

Edited June 16, 2008 by msj

[MontyBurns]

Monty, do you really understand what "government" is? It takes from A and gives to B.

You mean stealing.

[Remiel]

You mean stealing.

Kind of like how owners steal the excess labour of their workers, eh?

(One ridiculous oversimplification deserves another.)

[Argus]

Invested how? Where? It is the country as a whole we are talking about and I generally don't trust government bureaucrats to pick winners.

Invested as in put away in stocks and bonds, as in all the private pension plans in the world, which take a continuing stream of payments and put them into investments so they'll be able to disburse payments when their clients get old and start collecting. Invested as in not simply put into general revenues and spent without any eye to the future need for vastly increased CPP outlays.

Argus, the only way we can have benefits today is if someone pays today. We cannot "borrow from the future".

Nonsense. The boomers did so for decades. They got all the benefit of spending every cent that was collected in taxes, plus billions more besides which their children will have to pay back.

IOW, your biggest fear should be if someone in the future refuses to pay or rather, decides to make you pay instead (by changing the tax regime). When will a finance minister be able to introduce a budget clawing back all of the CPP, OAP and GAINS payouts for anyone earning below $30,000? When will the age exemption be abolished? How soon will see incentives to delay CPP payments to after 65?

I'd venture to guess that we'll see these changes by 2025 if not before.

In other words, when all the boomers are dead.

[Renegade]

Second, it's probably civilized (and Confucious) to offer old (honest) people a reward. This inspires young people to be honest and civilized to win the same reward when they are old.

Why? Is it hte state's role to reward honest people? If so, why just reward old honest people, and not just all honest people? Further, the state is notorious for changing the rules. There is no guaranteee that in 40 years, a young person will get the same reward.

If I was a young person, I'd prefer if the state neither rewarded me when I'm old nor penalized me when I'm young.

Third, it is wrong to believe that individuals pay into a State pension scheme and then receive their pay out. State support for older people are transfer systems and the only questions are who is eligible and who pays. As usual in State schemes, if you work and save, you will merely transfer money to your profligate neighbour.

You must then believe the same of any Defined Benefit pension plan, because I don't see much difference between CPP and a DBPP.

Now then returning to the OP, should recent older immigrants be entitled to pension benefits? In particular, should we remove the residency restriction? I think so. It seems to me that if we let these people into Canada, we should grant them the same basic benefits as other Canadians. I have never felt comfortable with this residency rule.

1. Perhaps we should start with first not letting these people into Canada. It seems that there is no obvious benefit to Canada to doing so. The elderly cost a disproportionate amount in medical and social services, why should Canada even let them in.

2. OAS is not unique in having a residency requirement. Citizenship for example has a residency requirement. Are you in favour of removing all residency requirements for all programs? If not what criteria determines why one would be entitled to one but not the other.

[Renegade]

Monty, do you really understand what "government" is? It takes from A and gives to B.

You presume August, that weath transfer is the purpose of government. Many would disagee.

[DogOnPorch]

That comparison is stupid and wrong when applied to a society at large. Governments use other people's money to give to other people. In that narrow sense, there is no such thing as "government debt".

If you have a large bank account and your daughter has a mortgage, is your family in debt?

Now then, if the government cuts taxes, goes into debt so that your daughter can pay off her mortgage, is Canada in debt?

The fact is that Canada is, overall, a very, very wealthy country. To characterize Canada as "in debt" is wrong and stupid.

The issue of who we accept as immigrants should be separate from what benefits Canadians receive.

----

Please people, apply a bit of thought some times before letting your knee instinctively jerk.

Whatever...literally. I operate without debt...how about you? I think those who contribute nothing shouldn't get anything. Welcome to my Canada. Don't vote for me if I run for power.

---------------------------------------------

Neither a borrower nor a lender be.

---Shakespeare: Hamlet

Edited June 16, 2008 by DogOnPorch

[MontyBurns]

I think those who contribute nothing shouldn't get anything.

Exactly.

If for example I moved to India, I wouldnt have the heart to sponge from the poor people of India's social programs. But these people come here and feel entitled to Canadians money. It's outrageous. What are we running here, a global social welfare program or what? :angry:

Edited June 16, 2008 by MontyBurns

[August1991]

Invested as in put away in stocks and bonds, as in all the private pension plans in the world, which take a continuing stream of payments and put them into investments so they'll be able to disburse payments when their clients get old and start collecting. Invested as in not simply put into general revenues and spent without any eye to the future need for vastly increased CPP outlays.

IOW, someone has to decide what future projects are likely to succeed and which ones are likely to fail.

IME, we should keep government bureaucrats as far from these decisions as is possible. In any event, these decisions are entirely separate from how much we want to transfer from younger people to older people.

Why? Is it hte state's role to reward honest people? If so, why just reward old honest people, and not just all honest people? Further, the state is notorious for changing the rules. There is no guaranteee that in 40 years, a young person will get the same reward.

If I was a young person, I'd prefer if the state neither rewarded me when I'm old nor penalized me when I'm young.

I can see why the State would create a reward for honest, older people. If you are honest, work hard, pay your taxes for thirty years or so, you are rewarded with a hefty prize when you turn 65. This is a good incentive to make people civilized. It's a reward for good behaviour.

1. Perhaps we should start with first not letting these people into Canada. It seems that there is no obvious benefit to Canada to doing so. The elderly cost a disproportionate amount in medical and social services, why should Canada even let them in.

That was kind of my point, Renegade. If we let them in, we should grant them the same benefits as other Canadians. But then, maybe we shouldn't let them in in the first place.

Here's the problem. We may admit all the brothers and sisters and then dey the right of their parents to join them. The hallmark of Canada's immigration law is supposedly family reunification.

2. OAS is not unique in having a residency requirement. Citizenship for example has a residency requirement. Are you in favour of removing all residency requirements for all programs? If not what criteria determines why one would be entitled to one but not the other.

That's another good point. You must be resident in Canada six months per year to benefit from health care.

I happen to think that 10 years is too long as a criteria for doling out welfare payments to older people.

I operate without debt...how about you? I think those who contribute nothing shouldn't get anything. Welcome to my Canada. Don't vote for me if I run for power.

---------------------------------------------

Neither a borrower nor a lender be.

---Shakespeare: Hamlet

You never borrowed money to buy a house? Did you live in a shack until you amassed the $200,000 to pay cash for the bungalow? And how about your kids? Did they borrow? From you?

But DogOnPorch, the bigger question is whether you are living off other people's tax payments. When Trudeau and Mulroney ran up those great deficits, you received government services but didn't pay for them. This left you with more cash in your hand. You may have thought that you were paying your way but the government was borrowing in your name.

I think this is why I object to people referring to "government debt". It's just a debt that we owe to ourselves. Governments move money around from people to people. For some reason, some people call some of these transfers "debt" as if that changes what governments are doing.

If the State taxes A and gives the money to B, or if the State borrows from A and gives the money to B, what is really the difference? In the case of borrowing, the State will have to tax A and then use the money to pay back A. Same diff.

The same kind of confusion underlies the false perception that CPP contributions are not a tax since people pay into a savings fund that is used to pay out future benefits. We all know that our provincial health schemes don't work this way, so why do we persist in the illusion that our pension scheme does? Provincial governments don't have a "health fund" to cover the present value of future liabilities.

1) Riverwind is wrong when he talks about clawbacks leading to some seniors paying a marginal tax rate of ">75%."

The OAS clawback kicks in around $63,000 of net income.

The claw back rate is 15% of OAS.

This means that the OAS pension (roughly $6,100 for 2008) would be entirely clawed back between net income of $63,000 to ~ $103,000.

Most federal/provincial marginal tax rates in this income range vary between ~30% - ~ 39%.

Ok, so 15% claw back + 39% marginal tax rate is still 54% right?

Well, actually, the OAS that is clawed back is deducted against taxable income. So, in reality, a senior with, say, $95,000 of taxable income is facing down a marginal tax/claw back rate of ~ 48%.

That is a far cry from the 75% guess made on page 1.

2) GIS is the Guaranteed Income Supplement. It is meant to supplement the OAS for poor seniors. It is income tested (OAS does not count as income in the test but everything else pretty much does count).

It is clawed back at 50 cents on the dollar. So, any senior who makes $100 of interest income will lose $50 of GIS pension.

The GIS pension goes on the tax return but is deducted further down so it is not taxable (but would be used to calculate OAS clawback, EI clawback etc... as applicable - an important distinction for seniors who have a large capital gain for one year from finally selling the cottage, for example. Not only do they lose their GIS for the next year but they have their OAS clawed back for the past year).

Given the income thresholds and tax exemptions available for seniors, the total marginal tax rate/claw back rate is normally around the 50% of the GIS lost (IOW, by the time the GIS is lost entirely, seniors are then normally starting to pay income tax at marginal tax rates - but this depends on a number of factors).

Zzzzzzz....

msj, if the purpose of your post was to prove that riverwind was wrong about the 75% marginal tax rate, I think you achieved the opposite.

You also inadvertently proved that our pension scheme is needlessly complex (a complexity that no doubt gives you msj a livelihood) and bears no resemblance to any insurance scheme that I know of. It's a transfer scheme and CPP contributions are taxes.

Edited June 16, 2008 by August1991

[DogOnPorch]

Exactly.

If for example I moved to India, I wouldnt have the heart to sponge from the poor people of India's social programs. But these people come here and feel entitled to Canadians money. It's outrageous. What are we running here, a global social welfare program or what?

Agreement. Too boot, the 'forces that be' are busy destroying whatever Canadian culture we had in deference to alien cultures. This would be viewed as a form of iconoclasm in many countries but here we call it multiculturalism. Welcome to Canada...we have no values of our own.

----------------------------------------------

For five years I've felt like the best prostitute in a high-class whorehouse. But all the other girls get paid more than I do.

---Dennis Rodman

Edited June 16, 2008 by DogOnPorch

[DogOnPorch]

You never borrowed money to buy a house? Did you live in a shack until you amassed the $200,000 to pay cash for the bungalow?

But DogOnPorch, the bigger question is whether you are living off other people's tax payments. When Trudeau and Mulroney ran up those great deficits, you received government services but didn't pay for them. This left you with more cash in your hand. You may have thought that you were paying your way but the government was borrowing in your name.

I think this is why I object to people referring to "government debt". It's just a debt that we owe to ourselves. Governments move money around from people to people. For some reason, some people call some of these transfers "debt" as if that changes what governments are doing.

I'm not that thick. Of course it's all good. However, the average Canadian still owes more than his or her lifestyle can afford. As we can see, with gas prices shooting through the roof, perhaps it's time for all of us to cut back a bit and live within our means. I pity the fool who commutes from Abbotsford to Vancouver or Branford to Toronto...etc. If you are one of the lucky ones, you don't work to service your own personal debt. I don't. Just born lucky, I suppose. We'll see if I can maintain my Utopia. Many forces are at work to stop me...lol.

---------------------------------------------------------

Debt is the slavery of the free.

---Publilius Syrus

[MontyBurns]

... the 'forces that be' are busy destroying whatever Canadian culture we had in deference to alien cultures.

These "forces that be" need a good old-fashioned ass whipping. A good flogging would do these people a world of good and save the country in the process.

[Renegade]

Monty, do you really understand what "government" is? It takes from A and gives to B.

You presume August, that weath transfer is the purpose of government. Many would disagee.

[August1991]

You presume August, that weath transfer is the purpose of government. Many would disagee.

I'm not certain what the purpose of government is and I suspect most politicians couldn't answer the question intelligibly either.

So, I don't presume that the purpose of government is to "transfer wealth". I will say that a major activity of government is to transfer money between people. Explicit transfers make up about 50% of government budgets in Canada. Then again, some of those transfers include taxing A and then sending the money back to A - even if different levels of governments are involved in the taxing and transferring.

Such is modern government.

[Renegade]

I can see why the State would create a reward for honest, older people. If you are honest, work hard, pay your taxes for thirty years or so, you are rewarded with a hefty prize when you turn 65. This is a good incentive to make people civilized. It's a reward for good behaviour.

You have then directly contradicted your argument to extend the benefit without imposing a residency requirement. If the purpose is a "reward" then those who "work hard, pay your taxes for thirty years or so" are rewarded with OAS. Why would the state then reward recent immigrants who havent been working and paying taxes for 30 years or so??

Also if the purpose of OAS is as a "reward" for past behaviour, why must I be a resident to collect it? Should it not be like CPP where I can collect it anywhere?

Here's the problem. We may admit all the brothers and sisters and then dey the right of their parents to join them. The hallmark of Canada's immigration law is supposedly family reunification.

I would dispute that it is a "right" for parents to join them.

If family reunification is the halmark of Canada's immigration system, then I would suggest that the system is misguided. Canada's best interest should be the only hallmark for its immigration system. Where the interest of Canada coincide with those of the would-be immigrant, that person should immigrate.

I happen to think that 10 years is too long as a criteria for doling out welfare payments to older people.

Perhaps the state should pay them without the 10 year wait, but collect reimbursement from those who sponsor the recepient.

[Renegade]

So, I don't presume that the purpose of government is to "transfer wealth". I will say that a major activity of government is to transfer money between people.

August, you have said of government in your response to Monty "It takes from A and gives to B." If you don't presume that the purpose of government is to "transfer wealth" then you shouldn't presume that the government SHOULD take "from A and gives to B.".

[scribblet]

Thought you might like to see a reply from Liberal MP Marlene Jennings

I acknowledge receipt and thank you for your recent e-mail in which you express your comments regarding Bill C-362, An Act to amend the Old Age Security Act (residency requirement) and please be assured that I have duly taken note of your correspondence.

I wish to inform you that I support Bill C-362 and my colleague, Colleen Beaumier expresses my point of view on this matter. I take this opportunity to attach Mrs. Beaumier's speech on Bill C-362 and I invite you to take the time to read it.

Mrs. Beaumier's bill has not been "kept under wraps until third reading" . Here is the "parcours" of her bill in House of Commons:

Status of the Bill

Bill C-362 An Act to amend the Old Age Security Act (residency requirement)

House of Commons Senate

1st Reading October 16, 2007 1st Reading

Placed on the Order of Precedence October 16, 2007

Debate(s) at 2nd Reading

October 23, 2007;

November 26, 2007;

November 28, 2007 Debate(s) at 2nd Reading

2nd Reading November 28, 2007 2nd Reading

Committee Human Resources, Social Development and the Status of Persons with Disabilities Committee

Committee Meeting(s)

May 13, 2008 (30);

May 15, 2008 (31) Committee Meeting(s)

Committee Report April 9, 2008 Committee Report

Report Presentation and Debate(s)

April 9, 2008;

May 16, 2008 Report Presentation and Debate(s)

Report Stage May 16, 2008 Report Stage

Debate(s) at 3rd Reading

Debate(s) at 3rd Reading

3rd Reading 3rd Reading

Notes:

Pursuant to Standing Order 86.1, this bill was deemed to have been considered and approved at all stages completed at the time of prorogation. Report recommending an extension of the time allotted was presented 9 April 2008. Report recommending an extension was concurred in 16 March 2008.

Royal Assent:

Statutes of Canada:

[August1991]

You have then directly contradicted your argument to extend the benefit without imposing a residency requirement. If the purpose is a "reward" then those who "work hard, pay your taxes for thirty years or so" are rewarded with OAS. Why would the state then reward recent immigrants who havent been working and paying taxes for 30 years or so??

Renegade, I think you misunderstand the meaning of the idea "reward". The State doesn't give money to people over 65 to reward them - it gives the money as an incentive for those who are still 25.

Also if the purpose of OAS is as a "reward" for past behaviour, why must I be a resident to collect it? Should it not be like CPP where I can collect it anywhere?

Another good point, involving as it does the question of fraud.

I would dispute that it is a "right" for parents to join them.

If family reunification is the halmark of Canada's immigration system, then I would suggest that the system is misguided. Canada's best interest should be the only hallmark for its immigration system. Where the interest of Canada coincide with those of the would-be immigrant, that person should immigrate.

If we are to have immigrants, then we will have their families. Family reunification was a major factor in post-war Canada. With the ease of travel now, maybe it's less of an issue.

I'd be the first to argue that we shoudl seriously rethink our immigration policies and selection Canada. In PC Canada, good luck with any kind of debate though.

August, you have said of government in your response to Monty "It takes from A and gives to B." If you don't presume that the purpose of government is to "transfer wealth" then you shouldn't presume that the government SHOULD take "from A and gives to B.".

I say that governments transfer money. It's a fact.

The essence of government is to spend other people's money.

[msj]

Zzzzzzz....

msj, if the purpose of your post was to prove that riverwind was wrong about the 75% marginal tax rate, I think you achieved the opposite.

Really?

You mean you do not understand the concept that 48% is less than 75%?

Time for some math lessons perhaps?

You also inadvertently proved that our pension scheme is needlessly complex (a complexity that no doubt gives you msj a livelihood) and bears no resemblance to any insurance scheme that I know of. It's a transfer scheme and CPP contributions are taxes.

I didn't inadvertently prove anything.

Granted, if you don't understand the concept that 48% is less than 75% then I guess you may not have noticed that the pension system is complicated for the average Joe (altough I suspect that the average Joe knows that 48% is less than 75%).

[Renegade]

Renegade, I think you misunderstand the meaning of the idea "reward". The State doesn't give money to people over 65 to reward them - it gives the money as an incentive for those who are still 25.

I presume you mean those who are still 25 and live in the country. Since those who are still 25 already will be accorded the reward when they retire, why then extend the reward to recent immigrants?

If we are to have immigrants, then we will have their families. Family reunification was a major factor in post-war Canada. With the ease of travel now, maybe it's less of an issue.

When we mean their families we mean their spouses and children as they are considered the family unit. For the most part we consider adult parents to be independant of their adult kids. For example, we do not allow the tax deductions for adult parents the same way as we would for a dependant kid. When an immigrant moves part of the process is breaking bonds, including that of their homeland but also that of parental contact. I know of no other country that puts family reuniicaiton as such a priority for immigration as does Canada.

I'd be the first to argue that we shoudl seriously rethink our immigration policies and selection Canada. In PC Canada, good luck with any kind of debate though.

It would indeed be a pity if we couldn't have that kind of debate. Besides those motivated by personal self-interest, I'd like to understand if anyone's position is that Canada should not put its own interest first when considering immgration.

I say that governments transfer money. It's a fact.

The essence of government is to spend other people's money.

Ageed. But Monty was questioning who that money was transfered to. That is entirely consistent with the nature of government and I'm clear why you would then question his understanding of government.