House of Commons Hansard #137 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was tobacco.

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Canada Labour Code
Government Orders

7:20 p.m.

Bloc

Madeleine Dalphond-Guiral Laval Centre, QC

Members of the official opposition will vote no, Madam Speaker.

Canada Labour Code
Government Orders

7:20 p.m.

Reform

Chuck Strahl Fraser Valley East, BC

Madam Speaker, Reform Party members present will vote no unless instructed otherwise by their constituents.

Canada Labour Code
Government Orders

7:20 p.m.

NDP

John Solomon Regina—Lumsden, SK

Madam Speaker, members of the New Democratic Party present will vote yes on this motion.

(The House divided on the motion, which was agreed to on the following division:)

Canada Labour Code
Government Orders

7:20 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

I declare the motion carried.

Canada Labour Code
Government Orders

7:20 p.m.

Liberal

Bob Kilger Stormont—Dundas, ON

Madam Speaker, the motion we will be considering during private members' hour stands in the name of the member for The Battlefords-Meadow Lake. All parties have been consulted and have agreed that we will proceed with private members' hour, although we are passed the hour of seven o'clock.

The agreement encompasses the member for Kamouraska-Rivière-du-Loup who would be given the courtesy, and that was agreed to by the member for The Battlefords-Meadow Lake, that he speak first during private members' hour. That is the agreement we came to. I hope it will stand.

Canada Labour Code
Government Orders

7:20 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

Do we have unanimous consent for that agreement?

Canada Labour Code
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7:20 p.m.

Some hon. members

Agreed.

Canada Labour Code
Government Orders

7:20 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

It being 7.25 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

Pensions
Private Members' Business

March 4th, 1997 / 7:20 p.m.

NDP

Len Taylor The Battlefords—Meadow Lake, SK

moved:

That, in the opinion of this House, the government should renew its commitment to British pensioners living in Canada and vigorously pursue an agreement with the government of the United Kingdom to provide them with pensions fully indexed to the cost of living.

Pensions
Private Members' Business

7:20 p.m.

Bloc

Paul Crête Kamouraska—Rivière-Du-Loup, QC

Madam Speaker, it is a pleasure to speak to the hon. member's motion concerning the government's commitment to British pensioners living in Canada.

I agree there is something entirely unacceptable in the present situation. As a result, pensioners are receiving and will receive in the future, if the situation does not change, the same amount they have received since the very beginning. Of course there was no indexation at the time, and now we have a situation that has become absurd, where pensioners who earned the right to a pension are in fact deprived of that right since the amount is not really significant. It is too bad the motion is not votable, but perhaps it could be examined in committee and we will see what can be achieved by going this route.

I would like to draw the attention of the House to a similar situation that existed with respect to American pensions. Last year, a very unfortunate decision was made by the Government of Canada and the Government of the United States when the tax treaty between these two countries was renewed. Formerly, people receiving American pensions received the full amount and declared half of the amount on their income tax return. In other words, someone who received $10,000 in pension payments in one year would declare $5,000, and as result of various tax deductions, low income people were not too severely penalized.

However, under the new tax treaty signed by the Government of Canada, and the Minister of Finance himself admitted it was unfair, pensioners are now taxed at source by the American government and have no way of recovering the amounts they are due. This is totally unacceptable. It leads to situations that make no sense at all.

For instance, someone in my riding is now faced with the following problem: formerly she received $400 per month, which by the end of the year added up to only $4,800. This person is 62 and it is the only income that person has. As result of the deduction at source, this person gets $290 per month instead of $400. It means $110 deducted per month. When your income only amounts to a few thousand dollars, this $110 per month is often needed to pay for rent and food. This is totally unacceptable. The minister

admitted it was unfair, but unfortunately, there has been no concrete action by the government in recent months to deal with the situation.

As you know, negotiations are under way with the U.S. government aimed at modifying the tax agreement. I have made representations to the minister and the senior officials responsible for trying to move this matter along, and according to their best case scenario, the tax agreement will perhaps be changed in 1998, if everything goes well, and if there is rapid progress.

During that time, those who are being penalized will continue to be penalized, and the government has proposed no stop-gap measures whatsoever to remedy the situation, none whatsoever. The latest budget contained not a single one. Yet the Minister of Finance's budget would have offered a fine opportunity to make some corrections, to improve these pensioners' situation. But nothing doing.

I find this absolutely deplorable, since there are 70,000 people across Canada who are affected by this situation. Of these, 10,000 are in Quebec, 1,643 in the lower St. Lawrence region alone. These are all people who went to the U.S. to earn their living, often in New England just across the border in Maine, but also all along the border. Now they are coming back to Canada and finding themselves in an absolutely horrible situation.

To repeat the example I gave just a while ago: when a person is entitled to about $10,000 from that pension, the Americans hold back $2,500, which means he or she is left with $7,500. Then when the person files income tax, he has to declare the whole $10,000 as income, even though the $2,500 has been lost sight of forever, with no way of ever getting it back.

Here is what is being suggested as an interim measure: in calculations for the guaranteed income supplement, for example, the actual amount received by the person could be used, and this would give him a better chance of being eligible for a sizeable portion of the income supplement.

It is hard to understand why the minister has not heeded these requests and why there have been no proposals made. It is not because no one has spoken of them to him, for there have already been important meetings in various parts of Canada, and it is known that 70,000 people are affected by this.

In my riding alone, at least 200 people have written to the minister in recent months. Hundreds of people have signed petitions to get this matter corrected, and we are still unable to rouse the sympathies of the minister to get him to correct the situation for low income earners.

There are some strange situations. For example, in the case of someone with a substantial pension of say $40,000 a year, $10,000 would go to the American government. In the past, this person was taxed on 50 per cent of the amount he or she received, that is $20,000.

Under the new convention, people earning a lot pay less income tax, and people earning little now receive less. This situation must be corrected. It is not a partisan situation, it is a situation that calls for concrete action by the government. In the same way as the member called for fair treatment of British retirees in Canada, I think our own people, Canadian citizens, who worked hard in the United States for a period of time, must enjoy the same treatment.

A number of people in my riding have often worked for logging companies as lumberjacks, cooks and in other capacities, where they have worked very hard. Today they choose to retire in their corner of the land of their birth, and the current situation is untenable.

I think we have reached the stage where more vigorous public action has to be taken to get the government to decide on this matter. At the end of March, I intend to hold a meeting of pensioners from Témiscouata and the whole Lower St. Lawrence region. I also invite all those who could be affected by this situation so that it is made clear that what they are going through is unacceptable for people whose income is only a few thousand dollars annually.

For example, there are women between the ages of 55 and 65 who are still not entitled to a pension and who wait a few years until their income is a little bit more respectable. Their American pension is all they get. They were used to receiving a cheque and making it last, but since January 1996 it has been a nightmare. They are forced to borrow money, to turn to their families, to find other ways of making ends meet. We are not talking about high income earners. These are people for whom this is truly the minimum amount they can manage on.

These are amounts that they have earned and that they have no possibility of recovering from the American government. It is completely impossible right now for a Canadian citizen to apply to the American government for this $2,000 or $3,000 to which he was entitled in the past.

Because the tax rules are different in the two countries, when a person declared his income in Canada, because of the salary protection measures we introduced that are not available in the American system, he was not as heavily penalized. He could cash the cheque. While he was receiving it, he could spend it as required and only paid taxes the following year. This is very different from the present situation where the amount is deducted at source and can never be recovered.

So if we have compassion for British pensioners living in Canada, I think we should show the same compassion for Canadian citizens living in Canada who earned a pension in the United States. I hope the government will take action in the short term because, if not, there will definitely be a lot of questions asked during the next election campaign, because people who are being deprived of the income necessary to their survival will certainly not be content with promises of future action.

A public servant told me they were doing everything possible to negotiate a change to the tax convention and that it will take place in 1998. He can say that to me, but for the person living with this every day, it is unacceptable, and it is vital that a temporary measure be worked out as soon as possible. I hope that the government will work something out in the coming months, so that equity for citizens of Quebec and of Canada in receipt of American pensions can be restored.

For these reasons, I am well aware of the importance of the member's motion concerning British pensioners and I hope that we can study it, that the member can take it to committee so that a concrete solution can be found, and that similarly, with respect to American pensions, a temporary, concrete solution can be found in the short term to correct the inequity that has been acknowledged by the minister.

Pensions
Private Members' Business

7:35 p.m.

NDP

Len Taylor The Battlefords—Meadow Lake, SK

Madam Speaker, today I am very proud to sponsor and debate private members' motion M-53 which supports the cause of British pensioners living in Canada. As I will outline in my remarks today, these people have been unfairly treated and deserve our support in every way we can provide it.

This is certainly not a new issue. It has been around for a long time and I am pleased to say that, informally, the Government of Canada has been supportive of British pensioners living in Canada. It is time that the government became a little more formal in its requests of the British government and that is the reason for my motion today.

When I say that we have been supportive informally, let me quote from a recent letter that I received signed by Canada's former Minister of Human Resources Development, the present Minister of National Defence.

The minister said: "The Government of Canada has been very active for many years in trying to persuade the United Kingdom to conclude a social security agreement that would provide for the indexing of British pensions.

"Prime Minister Chrétien has raised the issue of frozen British pensions on several occasions with Prime Minister John Major.

"These included his visits to London in June, 1994, for the commemoration of the 50th anniversary of D-Day and his visit marking the 50th anniversary of V-E Day.

"These occasions were especially appropriate, given that so many of the British pensioners in Canada are either themselves veterans of the second world war, or the widows of veterans.

"Canada's High Commissioner to the United Kingdom has also been very active on the issue of frozen British pensions.

"The high commissioner and his staff have had numerous meetings with United Kingdom cabinet ministers and with both government and opposition members of Parliament.

"It is clear from these meetings that the U.K. is not about to consider unfreezing its pensions in Canada. However, I can assure you that the Government of Canada will continue to do everything we can to try to persuade the British government to change its position".

That was a letter that I recently received from the former Minister of Human Resources Development. Obviously, the government is committed to the substance contained in the motion in front of us today.

I have also been told that the current minister, the hon. member for Papineau-Saint-Michel, was in London in mid-January, just a short five weeks ago. At that time he raised the frozen pension issue again with his counterpart.

The government is on side with this motion. I hope it will say so again today in this debate. Support in the House of Commons, in public debate, is worth so much more than comments made in private meetings. The word of the minister is one thing, but the voice of Parliament is another. By supporting the motion today, members of the House can help to add the voice of Parliament to the voice of the minister in support of these very deserving people.

For the members of the House who do not yet know why this is important, let me take a minute to outline the issue.

Pensions for elderly British expatriates resident in Canada are frozen at the level paid on the first date of payment or at the date when the individual took up residence in Canada. The same situation exists for almost 425,000 elderly expatriate residents in 137 other countries throughout the world. Yet, at the same time, some 325,000 British expatriate pensioners residing in some 37 other countries enjoy the same annual upgrading enjoyed by the equivalent pensioner beneficiaries living in the United Kingdom.

All of these pensioners, regardless of where they live, accrued their credits toward a state pension on the same basis. During their working life in the United Kingdom, they all paid into the fund in

the same way and reasonably assumed that they would all benefit on an equal basis when it came time to draw their pensions.

Successive British governments have failed to correct this completely unfair and discriminatory situation. The British old age security pension is indexed, in part, to the British retail price index and is subject to being upgraded in April of each year. Since 1965 the value of the pension for pensioners residing in Britain and the 37 other non-frozen countries has increased over 15 times its 1965 value.

The Canadian Alliance of British Pensioners gives this example of how unfair the pension plan is. A 65-year-old man living in Britain who became eligible for a full British pension in 1974 is now receiving a pension of £61.15 per week. If that same individual, on retirement, had elected to move to Canada to be close to his children or other members of his family or for any other reason, he would still be eligible for a pension, but only for the same level of pension paid to him when he left the country, possibly around £10 per week. The amount of the pension would never have changed over the period from 1974 to today. That is clearly discriminatory.

The matter has hit the floor of the House of Commons in Britain and numerous MPs there want to see changes brought about. In July 1994, for example, Winston S. Churchill, MP, said with regard to a particular case being debated:

That lady and others like her are being cheated-there is no other word for it-by the government of £53.60 per week of the pension to which she contributed.

If we were talking about a private personal pension or a life insurance policy, and the directors of the company tried to restrict the territorial area of payment, I am sure that my hon. friend, the minister, would have a shrewd idea of where those directors would be languishing now.

They would be in jail, and rightly so.

In my constituency there is a Dr. Derek and his wife Kathy Brown who now live near Big River, Saskatchewan. On their retirement they came to Canada to get away from the crowds of Britain and were told when they left that their pension would be payable worldwide. Derek Brown was a doctor in Britain for most of his working life and his pension was a full one when he claimed it 10 years ago. Now, because he lives in Canada and because his pension is not indexed, his £42.50 per week is nearly £20 a week less than he would get if he were to move back to Britain.

Dr. Brown says:

The thing that annoys us is that they say they cannot afford to do it for us.

But they index the pensions paid in the United States, but not for us in Canada.

It is this discrimination that we are so fed up with.

Dr. Brown has also written to me to say that he thinks the motion before us today should be somewhat amended to replaced the word indexed with the word prorated since the pensions in Britain are not exactly indexed to the cost of living. This would be quite acceptable and I would propose this change be made should the motion be sent to committee.

During the past few weeks since the motion was drawn for debate I have received many letters from British pensioners in support of the motion. I will quote one letter in particular written by Miss Elaine Dawn of Vancouver, British Columbia. She writes:

I am writing to request that you please support the current plight of British pensioners who live in Canada who, due to no fault of their own have, had their pensions frozen at the rate at which they first entered this country.

I am sure you will agree that this is very unfair considering just south of the border in the United States, British pensioners can enjoy the same indexing of pensions as if they had continued to live in England.

It certainly seems very unfair to me that certain countries support British pensioners while others, like Australia and Canada, have frozen the pensions of British subjects at the same level at which they entered their country.

I am sure you will agree that this has meant a great deal of hardship to many people.

Miss Dawn's letter says what many others said to me in similar letters received during the past four or five weeks.

While I was preparing for this debate today, Mr. Doug Ross, president of the Canadian Alliance of British Pensioners, wrote to me to let me know that in Britain the House of Commons select committee for social security had tabled its report on pension benefits for expatriates living in countries like Canada.

He told me that hearings had been held in London during December 1996, following which the committee issued a report that admitted the design of the current policies of pensions to expatriates was a mess. It also acknowledged that Britain was alone among OECD countries in failing to pay up ratings, as they call them, equally to all the beneficiaries of state contributory pension plans regardless of where they live.

However the committee disappointed many. It fell short of accepting the requests of the pensioner groups which asked them to recommend to the government that it should end the discriminatory practice of using country of residence as a factor in the determination of pension benefits. Instead the committee simply turned the problem over to the government by taking the unusual stand for a committee in Britain of recommending a free vote in the British Parliament to allow members of the British House to express their opinions.

Britain is about due for an election. There is no opportunity or time for this vote to be called. If an election is held and a new house is created with new members of Parliament, the report of the committee will no longer be valid. The next government will not be

required, as the motion puts it, to present any motion to the house for members to vote on. Therefore this pass on of responsibility is a great disappointment to those who appeared before the committee.

Mr. Ross and the Canadian Alliance of British Pensioners in particular have informed me of how disappointed they are the issue is not yet resolved. They have told me they appreciate the efforts of the Canadian government in support of their campaign to end pension discrimination, but at the same time they feel strongly Canada and other Commonwealth countries must take a much more aggressive stance in their bilateral dealings to step up the pressure on Westminster to end the disgraceful practice of freezing the pensions of some expatriates.

Mr. Ross writes that there are 718,000 British expatriates resident in Canada. Some 137,000 of them have some level of current frozen U.K. state pensions earned during the period they lived, worked and served in the United Kingdom. An end to pension freezing by Britain would ease the plight of thousands of cash strapped pensioners living in Canada and would directly inject $150 million in the first year into the Canadian economy.

It is time our Parliament supported the cause of the British expatriate pensioners. This motion which costs the government nothing serves to enhance the position already taken by the government in bilateral international discussions. It adds the voice of Parliament to the voice of the government to the voice of the minister speaking in Britain.

I expect to receive unanimous support of the members speaking in this debate. Therefore I serve notice that it is my intention to rise at the end of the debate to request unanimous consent to move the appropriate motion which would allow us to send the matter to committee for further action. I look forward to the support and comments of other members of the Chamber.

Pensions
Private Members' Business

7:50 p.m.

Liberal

Ian Murray Lanark—Carleton, ON

Madam Speaker, I thank the member for The Battlefords-Meadow Lake for his motion.

The British pensions paid to some 130,000 persons in Canada are frozen. In other words, they are not increased from year to year to compensate for rises in the cost of living. The same situation exists in many other countries around the world including Australia, New Zealand and South Africa.

This is not the case everywhere in the world. Under the European Union's regulations on social security, for example, the United Kingdom indexes annually the pensions it pays to persons who have retired in the Costa del Sol, the French Riviera or elsewhere in the EU.

Under social security agreements the United Kingdom has concluded with many other countries around the world British pensions are also indexed in these countries. They include, to name a few, Bosnia, Croatia, Cyprus, Israel, Turkey and the United States.

For 20 years the Government of Canada has been trying to persuade the United Kingdom to conclude a social security agreement that would lead to the annual indexing of the British pensions paid in Canada. The United Kingdom has repeatedly refused because of the costs it would incur.

The issue of frozen British pensions has been raised at every level. The Prime Minister has personally discussed it twice with Prime Minister John Major. The Minister of Foreign Affairs discussed the unfreezing issue at his first bilateral meeting with the British Foreign Secretary.

Most recently, in January of this year, the Minister of Human Resources Development went to London and personally discussed the issue with his British counterpart, the Secretary of State for Social Security. I regret to say the British reply is always the same: the United Kingdom cannot afford to index its pensions in Canada.

The Government of Canada believes the fundamental issue at the heart of the unfreezing issue is fairness. The persons who are receiving frozen pensions contributed to the British national insurance scheme during their working years in the United Kingdom. They made these contributions in the expectation they would eventually receive a pension in retirement irrespective of where they might choose to live.

Now, however, depending on which country they decide to spend their retirement years in their British pension may or may not be frozen. The unfairness is compounded by the fact that most of today's British pensioners in Canada served the United Kingdom during World War II or are the widows of British veterans. This point was emphatically made by the Prime Minister when he met with Prime Minister Major on the occasion of the commemoration of the 50th anniversaries of D-Day and V-E Day.

There is also a humanitarian consideration. Many of the British pensioners in Canada came to our country so that they could spend their retirement years with their children and grandchildren who immigrated here. Their frozen British pensions make them more financially dependent on their families. For many this can mean a loss of dignity.

There are undoubtedly also some pensioners in Britain who would like to join their families in Canada but have not done so because their British pensions will be frozen.

On February 5 the social security committee of the British House of Commons released a report on the issue of frozen British pensions. The report unfortunately did not call directly on the U.K. government to change its position on unfreezing. However it pointed out the illogic of the current British policy of indexing its pensions in some countries and not in others. In the words of the report:

Surely no one would have deliberately designed a policy of paying pensions to people living abroad intending to end up in the position we are in today-It is impossible to discern any pattern behind the selection of countries with whom bilateral agreements have been made providing for unfreezing.

The committee's report goes on to recommend a free vote in the British House of Commons:

-to allow members to express their opinion on the principle of whether the government should pay upgradings to some or all of those pensioners living in countries where upgradings are not paid at present.

The Government of Canada views this as a positive suggestion. We hope it will be adopted by the United Kingdom.

I urge all members of the House to support the motion put forward by the hon. member for The Battlefords-Meadow Lake. The government is already strongly committed to vigorously pursuing an agreement with the United Kingdom that provides for the indexing of British pensions.

Unanimous adoption of the motion will clearly demonstrate the commitment of all parties in the House and of all Canadians to the resolution of this long outstanding problem.

Pensions
Private Members' Business

7:55 p.m.

Reform

John Williams St. Albert, AB

Madam Speaker, I rise on a point of order. I wonder if you seek unanimous consent of the House to delete Motion No. 259 in the name of the member for Calgary Southwest from the Order Paper and replace the name of the hon. member for Calgary West with the name of the member for Calgary Southwest as the sponsor of Private Members' Bill C-341 on the Order Paper.

Pensions
Private Members' Business

7:55 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

Is there unanimous consent?

Pensions
Private Members' Business

7:55 p.m.

Some hon. members

Agreed.