House of Commons Hansard #127 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was seniors.

Topics

Canada Pension Plan
Private Members' Business

1:35 p.m.

Conservative

Costas Menegakis Richmond Hill, ON

Madam Speaker, our position regarding Bill C-326, an act to amend the Canada Pension Plan and the Old Age Security Act, is unchanged since the debate at first reading. We cannot support paying old age security and Canada pension plan benefits on a biweekly basis.

Please allow me to start by assuring everyone that the Government of Canada is committed to the well-being of seniors and continues to seek ways to address their needs now and into the future. I might add that I find it shameful that members of the opposition parties are using seniors as a political ploy, a tool, for a matter of such importance. I know that many seniors across Canada, and certainly in my great riding of Richmond Hill, appreciate the fact that they get their cheques once a month. They are used to it. I have not had, and we have not heard, an overwhelming number of seniors across the country saying that the payment terms should be changed.

I am certain that the notion of paying Canada pension plan and old age security benefits to seniors on a biweekly rather than a monthly basis was proposed with the best of intentions. However, our government's priority is reducing administrative costs to ensure the maximum amount for seniors' benefits. The less we spend on administration means more money in the pockets of seniors.

The government recently undertook a significant cost-cutting exercise to reduce duplication, overlap and redundant processes across government to ensure the greatest value for taxpayers' dollars. We recently implemented a one-for-one rule to reduce government red tape. Not only will this transformative measure reduce the bureaucratic administration of government, it will also reduce the cost to businesses and create jobs and growth.

Clearly, we are passionate about reducing the size of government and reducing redundancy within government. As a result, the government cannot support a bill that would increase the administrative cost of government by tens of millions of dollars in a time of fiscal restraint, nor is it something that Canadians want to see from coast to coast to coast, nor is it something in particular that our seniors are asking for or want to see from coast to coast to coast across our great nation.

As the first two pillars of Canada's retirement income system, the OAS and CPP are designed to provide a modest base upon which to build additional income for retirement. This year, our public pension system is projected to provide Canadians with close to $76 billion in benefits.

However, in regard to the public pension system, we cannot support Bill C-326, because it does not make sense from a financial administration perspective. In fact, making the change would result in additional costs and would increase the taxpayer dollars devoted to running the OAS and CPP. This type of increase is exactly what we are trying to avoid.

Let me underscore that our government has many good reasons for opposing a change in the frequency of payments to CPP and OAS.

To start with, monthly payments ensure an efficient administration of the OAS and CPP programs. The practice represents an efficient use of taxpayer dollars and serves the needs of seniors, and after all, that is what we are here to do. Monthly payments have the advantage of ensuring every senior receives what he or she is entitled to by allowing the department time to respond to any changes to the individual's eligibility status, such as marital status or income. By giving the department the time to respond to these changes, monthly payments help to avoid the subsequent complications associated with recuperating overpayments.

As the number of seniors increases with the coming demographic shift, we are focused on the effective, timely and efficient delivery of services for our seniors.

Our goal is to streamline processes, not complicate them. That is precisely why budget 2012 introduced the proactive enrolment of OAS benefits, to make it easier for many seniors to get their benefits.

Let me remind all members of the House that the first of Canada's baby-boomer generation have started to enter their senior years. Within less than two decades close to one in four Canadians will be over 65 years of age.

Governments have limited resources and Canadians expect programs to be delivered as efficiently as possible. Service delivery includes processing new applications, responding to inquiries, changing addresses, updating banking information, issuing millions of cheques and deposits, and more.

The practice of paying benefits at the end of each month was adopted to provide the best service possible and is consistent with the delivery of other income support payments both in Canada and in other countries.

To ensure the efficient delivery of not only CPP and OAS but all benefits payments, Service Canada works in partnership with Public Works and Government Services Canada, Canada Post and the banks to coordinate the financial transfer of benefit payments.

From a practical standpoint, the current payment schedule gives all the agencies involved enough time to note changes in a client's profile, determine the amount of benefit payable and coordinate the transfer of payments. Each of these organizations has developed work plans based on a payment date that is on the third last banking day of each month. A biweekly payment schedule would make it more difficult to process and issue the benefits in a timely manner.

During the last fiscal year, 90% of old age security payments were made through direct monthly deposit with the remainder being paid by cheque. The numbers were similar for CPP, with 87% of recipients receiving their benefits through direct deposit.

In a time of spending restraint, it would be difficult to justify the cost involved in changing the payment schedule for CPP and OAS. Were it to be universally adopted, a biweekly payment schedule would more than double the number of transactions for CPP and OAS benefits, resulting in increased administrative costs and difficulties processing and issuing benefits in a timely manner.

Public Works and Government Services Canada estimates that the proposed bill would increase the total cost of payment administration and processing by about $18 million per year. This includes such direct costs as postage, banking fees, printing services and cheque reconciliation for both direct deposit and cheque payments.

The system's costs for information technology alone would be significant. Service Canada estimates the transaction cost could be as high as $30 million. It would also require amending both the OAS and CPP acts. This would mean additional and unnecessary costs.

Seniors have worked hard all their lives and they count on their pensions to be delivered consistently and in a reliable manner. It is incumbent upon us as a government to ensure that they get their payments on time reliably every single month.

We have reviewed the changes proposed in Bill C-326, and we believe they cannot be justified given our fiscal realities, nor can we justify the risk the changes pose to the efficiency of service delivery. We want to be as efficient as possible.

For these reasons our government cannot support the bill in a time of fiscal restraint. I urge all hon. members in this House to join me in opposing it.

Canada Pension Plan
Private Members' Business

1:45 p.m.

Liberal

Denis Coderre Bourassa, QC

Madam Speaker, I rise on a point of order. I have a question for you.

Justice Thomas Lederer just made a decision and has declared the election in Etobicoke Centre null and void, on a challenge by our former Liberal colleague, Borys Wrzesnewskyj.

I would like to know what the status is of the member now. Since the election has been declared null and void, does it mean there is no longer a member of Parliament for Etobicoke Centre?

Canada Pension Plan
Private Members' Business

1:45 p.m.

NDP

The Deputy Speaker Denise Savoie

I thank the hon. member for his comments. According to the information I have, there is an appeal period. The question is whether there will be an appeal. We cannot answer that question here today. This should lay the matter to rest for now, until we have more information. We will revisit the matter as needed.

The hon. member for Montcalm.

Canada Pension Plan
Private Members' Business

1:45 p.m.

NDP

Manon Perreault Montcalm, QC

Madam Speaker, I am delighted to support Bill C-326, An Act to amend the Canada Pension Plan and the Old Age Security Act (biweekly payment of benefits), which provides that, on the request of the beneficiary, benefits be paid on a biweekly basis. For me, this is a simple question of being able to live in harmony with the rest of Canadian society, regardless of one's age.

This bill will allow seniors to better manage their budget and will help them make their benefits last throughout the entire month. It is a good idea, especially considering that more and more seniors are facing money problems. We need to give them as many options as possible to keep them from becoming victims of poverty.

We have good reason to worry about the increasing precariousness of seniors in Canada. As we know, they are being forced to turn to charity organizations and food banks more and more in order to meet their most basic needs. I find it appalling that people who have worked hard their entire lives to build our country must now turn to clothing donations, or even worse, to food banks to meet their basic needs in Maslow's hierarchy of needs. Social workers are continually condemning this situation, which they see every day on the ground.

The government does not seem to be taking this seriously. It should be leading the fight against seniors' poverty and making it possible for seniors to live in dignity. It is the least we could do for them after they have spent their lives in service to this country. Needless to say, the future of the pension system, as envisioned by the government, is very worrisome.

Some seniors would benefit from having bimonthly payments because they have difficulty managing their meagre financial resources.The end of the month would be more bearable and much less sad for many of them.

However, they only receive very limited benefits. That is why other measures are needed. The benefits provided by the Canada pension plan and the Quebec pension plan absolutely must be doubled. There is no question that increasing the guaranteed income supplement to an adequate level is another pertinent measure. It is fundamental to ending seniors' poverty. Why such hesitation when it is time to make such an important social choice?

The government's response is based on pure and simple ideology. We have seen this a number of times since 2006. The government prefers to scare the public with its usual fearmongering. We are told that the matter is urgent, that continuing in this way will lead us straight into financial disaster, and that old age security will no longer be financially sustainable.

This statement is really misleading because the only issue that is truly urgent is ending seniors' poverty for good. The experts agree that our public pension system is well funded, but the government does not want to listen and is blinded once again by ideology. We know that old age security represents 2.4% of GDP and that it will reach 3.1% of GDP in 2030. In light of these figures, it will not be impossible to manage the baby boomers' retirement. We need only look to the standards set by the OECD to realize that the Canada pension plan and the Quebec pension plan benefits are relatively modest.

To glance at the figures, we see how bad the situation is. Nonetheless, it is mostly on the ground that we see this reality, or at least part of this reality. If anyone is affected by isolation, it is seniors. If anyone is affected by poverty, it is seniors. If anyone is being neglected by this government, it is seniors.

In many cases, seniors have no social or family ties. Accordingly, old age security is a pressing matter. There will only be more and more of these dramatic situations. The conditions are ripe for a continuing upward trend in poverty rates among seniors in the years to come. How this government does not see the social disaster we are headed toward at high speed simply escapes me.

Let us be clear: by making such changes to old age security, the government is directly attacking the less fortunate, the most vulnerable in society. Low-income earners with no pension fund will be the biggest losers when the retirement eligibility age increases from 65 to 67.

There are 12 million Canadians who do not have a pension plan through their work. We know that the government did not ask itself the right questions when it was developing this policy. The most important question would have been this: what is the best way to provide a decent retirement for everyone and not just for those who have the means to contribute to pooled registered pension plans or RRSPs, as the government envisions? It has been shown that less than a third of the people who can contribute to an RRSP actually do.

In that context, increasing the retirement age from 65 to 67 will do nothing but keep many people in poverty for an additional two years. Those people cannot wait for their pension and the guaranteed income supplement, which will allow them to make ends meet every month.

It is important to recall that this is a minimum level of support and that it is a paltry sum compared to programs in other industrialized countries. Knowing that 1.7 million Canadians receive the guaranteed income supplement, the government should be asking itself what it can do to ensure a decent retirement for everyone.

The government does not seem to realize that two-thirds of Canadians do not have a private pension and are counting on assistance from the state to be able to meet their needs after age 65. We also know that those who really need it have problems saving money.

Accordingly, instead of delaying access to our public system by two years, why is the government not coming up with real solutions, on one hand, to put an end to the increasing precariousness facing seniors and, on the other hand, to address the problem that Canadians have when it comes to saving? These problems will not be solved by betting on volatile financial markets through voluntary defined contribution plans managed by the private sector. We already know where that would lead us, and that is not what most Canadians want.

On the contrary, Canadian workers need to have access to risk-free options with guarantees regarding the associated costs. It would be pathetic to make the same mistakes as other countries in this regard. We just have to look at Australia.

This government is making gross injustice the norm. Its goal is to prevent the cost of OAS from rising. Interestingly, it did not apply the same principle as strictly with respect to the F-35s or many other decisions.

Nevertheless, this is a good illustration of the government's priorities. It could not care less about guaranteeing retirement income security for all Canadians. Vulnerable seniors, such as single women, immigrants and people with disabilities, will have to bear this heavy financial burden themselves and make do with the meagre income they receive from the government.

The government has chosen to undermine the country's pension system despite the fact that it has proven its effectiveness over time. The only way to make the system more effective is to improve its fundamentals. Instead of merely subsisting, seniors in need would receive, at the very least, an adequate income. This measure is both necessary and financially viable.

Through its proposed measures and its lack of action during the past six years to ensure that Canadians have a retirement income, the government is jeopardizing the social contract we have given ourselves. Poverty among seniors is not without consequences. Dependency increases as health declines. The risk of malnutrition also goes up. It also has an impact on housing. The choice to age in place, at home, for as long as possible simply evaporates.

Is that what we want for our seniors: more and more uncertainty? What our seniors need are larger, public, guaranteed retirement incomes. They deserve more than the series of half-measures the government is serving up. Seniors deserve to have access to sufficient retirement income to maintain their standard of living and to grow old with dignity.

Canada Pension Plan
Private Members' Business

1:55 p.m.

Conservative

Scott Armstrong Cumberland—Colchester—Musquodoboit Valley, NS

Madam Speaker, I want to thank the hon. member who put this bill forward, the member for Bonavista—Gander—Grand Falls—Windsor. I know he did this in good faith.

On behalf of the Government of Canada, I want to start by expressing our appreciation for seniors who have worked hard to build a better country for future generations of Canadians. We commend each and every one of our seniors for all they have given and continue to give, and we recognize that they deserve a secure and dignified retirement that reflects on the contributions they have made.

I want to assure everyone that the Conservative Government of Canada recognizes financial security as a factor that has an obvious impact on the quality of life for seniors. In this regard, the government is taking a number of decisive actions to improve the lives of seniors on many fronts, including providing Canadians with almost $76 billion this year through Canada's public pension system.

We also introduced a new guaranteed income supplement top-up benefit to help Canada's most vulnerable seniors. This is the largest increase to the GIS for the lowest income seniors in a quarter century. This will improve the financial security and well-being of more than 680,000 seniors across Canada. These measures demonstrate that the Government of Canada is taking concrete action to help our seniors.

Of course part of helping seniors is the assurance that benefits will be paid in an efficient and timely manner. These are traits that would be hindered, not helped by this bill.

There are a number of critical problems with the bill. The first is the matter of cost. This is a significant issue in light of the current fiscal reality facing this global economy. The current system of monthly payments has been and will continue to be the most efficient way to administer the old age security and the Canada pension plan programs.

While we can never be sure exactly how many seniors would take advantage of a bi-weekly payment schedule were it universally adopted, a bi-weekly payment schedule would more than double the number of transactions for CPP and OAS benefits. This would significantly increase the administrative costs of processing and issuing benefits in a seamless and timely manner.

Public Works and Government Services Canada estimates that this proposed bill would increase the total cost of payment of administration and processing by about $18 million a year. That is $18 million that could actually go to seniors. This figure includes direct costs such as postage, banking fees, printing services and cheque reconciliation for both direct deposit payments and paper cheques.

When examining the proposed legislation, we must also consider the fact that the seniors population is also growing in Canada, and growing significantly. We need a more efficient and simple delivery method of benefits, not a more complicated one.

Canadians gave our government a strong mandate to complete Canada's economic recovery and return to balanced budgets. That is exactly what we are doing. We recently began to implement a significant deficit reduction strategy to ensure government programs are as efficient as possible.

Service delivery includes processing new applications, responding to inquiries, changing addresses, updating banking information, issuing millions of cheques and deposits, and cancelling benefits upon the death of a recipient. Payment processing already involves several different departments, all acting in conjunction to process these payments.

The processing cost of a single cheque or direct deposit may not seem like much when it is looked at in isolation, but when the government is issuing millions of cheques and deposits each month, this becomes a whole different matter.

As members of the House are likely aware, the first of Canada's baby boomer generation turned 65 in 2011. Within less than two decades, close to 1 in 4 Canadians will be over 64. Changing the payment schedule during this demographic shift would only increase expenses and create complications for the delivery of OAS and CPP benefits.

Canadians expect the programs to be delivered as effectively and efficiently as possible. The current system of monthly benefit payments for the CPP and OAS programs is the best use of taxpayers' dollars.

The real advantage of the monthly payment schedule is that it ensures the accuracy of payments by allowing the department time to respond to any changes in the individual's eligibility status, such as marital status or an increase or decrease in income. This important step is to make sure all seniors get exactly what they are entitled to when they are entitled to get it.

We must remember that the monthly payment schedule also serves the needs of seniors across this country. The practice of paying all benefits at the end of the month was adopted to provide the best service possible for our seniors. It is a commonly accepted standard for government benefits. This includes other federal benefits, such as those provided by Veterans Affairs Canada, as well as the universal child care benefit and the Canadian child tax benefit.

I would also add that most provincial and territorial benefits are also paid on a monthly basis. It is important to provide consistency across government so Canadians know exactly when they will be receiving their cheques and exactly what they will be owed.

If the government supported this bill, it would cause a ripple effect of increased program costs for both the provincial and federal governments.

Internationally, most of the OECD countries also provide monthly benefits for their seniors programs.

Ultimately, the change would be expensive and would further add to the complexity of a system that currently works well. It would also duplicate arrangements that could be made on an individual basis with financial institutions without the need for legislation.

In this kind of situation, our government strives to find a balance. We think we should maintain the monthly payment schedule as the most efficient system we can provide our seniors.

In this time of fiscal restraint, our Conservative government is committed to delivering the highest quality service in a way that is efficient, effective and focused on the needs of Canadians.

In conclusion, our government cannot support Bill C-326. It would be an irresponsible use of taxpayers' dollars. I encourage all members of this House to vote against it.

Canada Pension Plan
Private Members' Business

2 p.m.

NDP

The Deputy Speaker Denise Savoie

Is the House ready for the question?

Canada Pension Plan
Private Members' Business

2 p.m.

Some hon. members

Question.

Canada Pension Plan
Private Members' Business

2 p.m.

NDP

The Deputy Speaker Denise Savoie

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Canada Pension Plan
Private Members' Business

2 p.m.

Some hon. members

Agreed.

No.

Canada Pension Plan
Private Members' Business

2 p.m.

NDP

The Deputy Speaker Denise Savoie

All those in favour of the motion will please say yea.

Canada Pension Plan
Private Members' Business

2 p.m.

Some hon. members

Yea.

Canada Pension Plan
Private Members' Business

2 p.m.

NDP

The Deputy Speaker Denise Savoie

All those opposed will please say nay.

Canada Pension Plan
Private Members' Business

2 p.m.

Some hon. members

Nay.

Canada Pension Plan
Private Members' Business

2 p.m.

NDP

The Deputy Speaker Denise Savoie

In my opinion, the nays have it.

And five or more members having risen:

Pursuant to Standing Order 93, the division stands deferred until Wednesday, May 30, 2012, immediately before the time provided for private members' business.

It being 2:05 p.m., the House stands adjourned until Monday, May 28, 2012, at 11 a.m., pursuant to Standing Orders 28(2) and 24(1).

(The House adjourned at 2:07 p.m.)