Bill C-326 (Historical)

An Act to amend the Canada Pension Plan and the Old Age Security Act (biweekly payment of benefits)

This enactment amends the Canada Pension Plan and the Old Age Security Act to provide that any benefits that are required to be paid on a periodic basis under those Acts shall, on the request of the beneficiary, be paid on a biweekly basis.

Canada Pension Plan

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

moved that Bill C-326, An Act to amend the Canada Pension Plan and the Old Age Security Act (biweekly payment of benefits), be read the second time and referred to a committee.

Mr. Speaker, I appreciate being given this time on what is certainly a special occasion, given the fact that I introduced this bill several years ago for the first time.

I discovered some time ago that the essence of this bill is really about allowing pensioners and seniors the freedom and flexibility to budget. This bill would certainly allow them to do that. Honestly, the number one issue in my riding, from looking at the number of calls that come into my offices, is about income security for seniors, certainly for those who are receiving the CPP and old age security, as well as GIS, the guaranteed income supplement.

In essence, this bill does not create a large burden on the taxpayer by putting up more money; it is a question of administration. It is a question of budgeting for the individual who chooses, is not forced, to be paid twice a month instead of just once.

Where does this come from? What is the origin? Who particularly wants this and why? At first blush, many people who are not receiving this might say to themselves, “I do not really see the difference. If we are dealing with the same amount of money on a monthly basis, why would people be worried about getting paid twice of month instead of once?”

During the deliberations, in several meetings across this country, including one in Newfoundland and Labrador, about four years ago it was brought to my attention that it would be a good benefit for seniors to be paid twice a month or at the very least have the option for that. That option allows seniors to budget better, especially those who are impoverished or are living below the poverty line. I will explain that soon.

This first came about in a meeting at a convention I went to staged by the Newfoundland and Labrador Pensioners and Senior Citizens 50+ Federation. Its president, Robert Rogers, brought this to my attention, about how so many seniors would love to have this type of flexibility to be paid twice. To me it seemed as if it had been mentioned before but was not really a big issue, until they took a vote at the convention. Well over 80% of the people said they would like to have that option.

One of the things I have noticed, too, is that many of the people who said they would like to have the option were between the ages of 65 and 80. In that age group of 65 to 80, a lot of seniors in my riding still live in their home or live in an apartment dwelling, where they pay for their medications and food. Being paid twice a month helps those seniors to budget that much better.

For seniors over the age of 80, a lot prefer to be paid once a month because they are in assisted living. They are in a place where all their bills are paid up front, and therefore they would like to retain that option.

That is what the bill does. It essentially allows an individual to check a box to say “Yes, I prefer to be paid twice a month”. Once again, that is the Canada pension plan, old age security and, if eligible, the guaranteed income supplement. The benefit of this is that it would allow seniors who were used to receiving their income biweekly during their working life to continue with a familiar schedule.

My office has had several discussions with a gentleman by the name of Leo Bonnell who works out of Newfoundland. He is a former banker, and he is a big believer in this type of policy that allows seniors to have the flexibility to be paid twice a month. He is on the Newfoundland and Labrador Provincial Advisory Council on Aging and Seniors, and he is an active member of the Newfoundland and Labrador Pensioners and Senior Citizens Federation. As I mentioned, he has been advocating for this option for quite some time.

He believes that this type of system would be much more convenient for seniors as they would have a more regular cash flow. The cash flow element is of the essence here. That is what Mr. Bonnell talked about.

In Newfoundland and Labrador we often see a mad dash for the supermarkets on what many people call cheque day. There is one day of the month when most of the cheques are mailed, and on that particular day the grocery stores and the pharmacies are overcrowded. I see MPs in the House nodding their heads in agreement. They know what I am talking about. They hear about it, and they see it time and time again.

The people who own these stores will tell us much the same. The story is that the stores are overcrowded and some people are desperate, especially when it comes to medications.

For example, seniors budget their cheque for bills, medications and groceries. So they go out on the day they are paid, like most seniors do on that particular day, and they buy all the necessary provisions based on their own budget.

The problem is that unexpected things happen. Two weeks later they can come down with a chest infection and need another type of medication. They are only paid once a month, but emergencies occur. Let us say they bought the normal amount of medication and now they have a chest infection so they have to go back and get more, based on the doctor's orders, and they have to wait. Many seniors are waiting up to four weeks because they do not have the extra amount of money, because they buy all of their goods, including not just medications but also groceries. They also look after provisions such as fuel, home heating, their rent and all of that. If something unforeseen happens, being paid twice a month certainly would help. It does not alleviate the indebtedness they have to take on, but instead of waiting three weeks to get that essential medication, they may only have to wait three or four days because they know that at the middle of the month another cheque is coming.

We have also received some great feedback from seniors groups across this country. From the most populous provinces, Ontario, Quebec, and also British Columbia we see a lot of support for the bill. One of our local seniors groups, in the riding of my hon. colleague from Random—Burin—St. George's around the community of Clarenville, hosted a seniors information session whereby various presentations were given to some 60 seniors from Clarenville.

Mr. Speaker, I am asking you for a little—

[The Acting Speaker, Conservative, Bruce Stanton]

Order, please. The hon. member for Bonavista—Gander—Grand Falls—Windsor has the floor.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

I appreciate that, Mr. Speaker.

I mentioned a group around the Clarenville area. The feedback survey included a question as to whether participants would like the option of receiving their benefits biweekly. About 75% of respondents answered yes. We believe this is a good indicator of the type of support the bill would receive.

We received feedback from the group known as CARP, the Canadian Association of Retired Persons. CARP supports measures that increase the flexibility with which Canadians have access to their CPP funds and other retirement benefits, and that is what the bill is about. The bill gives seniors the option of biweekly payments.

My colleague has given me material from her riding that shows there is overwhelming support for issues that come up for seniors, especially those between the ages of 65 and 80 and those who live in their own dwellings.

One of the points that is brought up in this House quite a bit is the costs. I realize there would be administrative costs to change this. We did our due diligence and looked into it. The Parliamentary Budget Officer said the cost of administering the bill is “not fiscally significant”.

Administrative costs should not be high because most seniors now receive their payments via direct deposit, which reduces mailing costs. It is the mailing costs which are one of the biggest financial liabilities when it comes to the administrative costs of changing this measure, but because people are getting paid by direct deposit, the costs would not be as significant. I hope the government and all members of the House will bear that in mind. If this is a time of austerity in Canada, then I certainly think the benefits far outweigh the administrative costs in this particular measure.

I would like to wrap up by referring to a letter that I received from Benjamin and Dawn Crewdson of St. John's, Newfoundland and Labrador. I would like to read most of the letter because I think it is very pertinent to this debate. I thank them, if they are watching, for allowing me to read this letter in the House. It brings out the points very clearly. Mr. Crewdson writes:

I am a senior citizen (age 74) and for many years I and my wife have been trying to exist on CPP, OAS & GIS for a total at present of $2,000.00 a month.... We have no other assets. But what...did not bring to the table (or else it wasn't reported) is not only the difficulty of budgeting, but the fear that pervades one's life after a small monthly cheque is received. When my cheque arrives (by direct deposit) the first thing my wife and I do is pay the rent, the light, and the communications (telephone, TV, computer). Then we try to take care of personal grooming, hair-cut for me, hair-do for the wife . Then we have to calculate the number of weeks before the next cheque to allocate our monthly groceries. Many's the month my cheque is fully allocated within a few days of receiving it. We then know that we have to live the rest of the month with no additional funds.

The fear I mention not only pervades one's life for the period before the next cheque, but in my case, I am diagnosed Chronic Kidney Failure patient. I have to attend hemo-dialysis treatments three times a week, the costs of which (transportation, dietetic and medications) was never considered in our original allocation of our funds. I now live in fear that one day I will not have sufficient [money] to cover my bus fares to the hospital and so miss a treatment, or that we will have significant funds to cover the cost of my medications, which are hefty, or that we can only cover the cost of my diet requirements by cutting down on other foodstuffs....

I hope you appreciate that we are not asking for more money, which would be nice, but my hope and prayer is that we can get your Bill through Parliament, and give us a cheque twice a month instead of once. I acknowledge that the sum of money--

[The Acting Speaker, Conservative, Bruce Stanton]

Order. I hate to interrupt the hon. member, but hon. members, there is too much noise in the chamber. The hon. member for Bonavista—Gander—Grand Falls—Windsor has the floor, and I am certain there are many members in the House of Commons who would like to hear what the hon. member has to say.

The hon. member for Bonavista—Gander—Grand Falls—Windsor.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, that was very well said.

I want to read the last paragraph of the letter from Mr. Crewdson, who says that he wants to be paid twice a month instead of once. He thinks it is a small measure that could go a long way. The final paragraph states:

I hope you appreciate that we are not asking for more money, which would be nice, but my hope and prayer is that we can get your Bill through parliament, and give us a cheque twice a month instead of once. I acknowledge that the sum of money will be the same, but it can be handled better, budgeted better, and take away a lot of fear that we experience at present. If I can assist you in promoting your Bill -- letter writing and so on, do not hesitate to contact me.... This is something worthy of us all pulling together to achieve.

Sincerely

Benjamin W. Crewdson and Dawn Crewdson

St. John's, Newfoundland and Labrador

By pulling together, I think he means all of us here in this House. I am willing to bet that for most MPs, income security for seniors if it is not the most talked about issue in constituency offices, it is up there in the top five. It has to be. I can tell by the nodding heads that I am right.

This is not a slight against anybody or any party. This is a measure that would allow people the dignity to be able to budget better. Yes, sometimes and oftentimes tragically things happen where, if one is being paid twice a month, it would become that much better to budget.

I bring this matter to the House because I feel it is that important. Again, the administrative costs are not that high. The benefit of allowing people CPP, old age security and guaranteed income supplement to be paid twice a month instead of just once is a huge benefit for seniors to budget.

I want to thank this House and all members. Mr. Crewdson would also like to thank members very much.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, although sometimes it was hard to hear my colleague's comments because of all the noise, I appreciate his persevering through it. I appreciate his bringing up the budgeting issues and other aspects for seniors. He raised some good points.

The member talked about the Parliamentary Budget Officer. I think that with any bill we consider we would want to consider the cost of it as well. The member indicated in his comments that the PBO said that it was not fiscally significant. The PBO is usually not unreserved in issuing his numbers. I wonder if the member might give us an indication as to what that number was when it was not fiscally significant.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, there are a lot of variables involved that we really cannot calculate. When the Parliamentary Budget Officer said that it was not fiscally significant, chances are it was based on the people who had claimed in the past through electronic payment, which would therefore reduce the cost. I think there was more of a variation. In the past there was a high price tag attached to it, but now with people getting payments electronically, as Mr. Crewdson is getting, it brings the cost down substantially.

Again, I go back to the benefits. I certainly feel that the benefits outweigh the cost in this particular measure. I am one who considers that issues should be fiscally prudent as well. I think this is a good measure.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, I have a question for my Liberal colleague.

This bill is all well and good, but is it going to help those living in poverty? Will the combination of old age security and the guaranteed income supplement ensure that, henceforth, the elderly will remain above the poverty line?

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I appreciate the question, but I would like to answer the member's question by reading from the letter once again.

Mr. Crewdson, who is from St. John's, said, “I acknowledge that the sum of money will be the same, but it can be handled better, budgeted better”. This is a budgeting issue, quite frankly.

Would I love to double the amount that seniors are receiving? Of course, I would, in a flash, in a minute. However, it is not in the budget. I would love to make the amendment to do so. However, right now I want to move at this level, which is to say that I think there is a way the government could accept this particular measure as a modest way of improving the lifestyles of our seniors over the age of 65.

As a matter of fact, the member for Edmonton—Leduc brought forward a motion, which the government vehemently supported, regarding financial literacy. This is an example of a good measure toward financial literacy. It would allow better budgeting in this nation, and the administrative costs would not be that significant in order for us to provide that benefit of better budgeting.

I would love to bring all of these people above the poverty line. However, right now I want to focus on this because I think it is a modest measure which I hope the government would see as a common-sense thing to do.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, I would first like to congratulate my colleague on his speech regarding this bill.

Having listened to all the examples he gave on the daily lives of those people who receive cheques, it is quite clear that this money is spent locally.

I would like his point of view on this. Beyond any economic consideration, does not simplifying these people's lives also simplify the life of the community around them?

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, that is the wonderful thing about debate in this House. Even though we spend years working on a bill, a new dimension of something that is good in public policy gets borne out. I would like to thank my hon. colleague for doing that. Of course, it is an issue for the local community, given the fact that many of these people would be able to remain within that community because they would know that they would get a payment twice a month. Therefore, it would be easier for them to shop locally.

I would humbly suggest that it is not something that we would strictly consider an economic value or an economic development, but it is one dimension to this particular issue. In the member's province and in mine, there are a lot of towns where mills have shut down. If the seniors in those particular communities received a steady income, it would count toward the viability of a particular community.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Speaker, I rise on a point of order. There have been consultations and I believe if you seek it, you would find unanimous for the following motion: “Whereas Canada, by nature, offers abundant recreational and fitness opportunities through such things as our mountains, oceans, lakes, forests and parks, we, as Canadians, could, with access to these opportunities, be the healthiest and fittest people on earth; participation rates in healthy physical activities have been declining; we have public facilities to promote health and fitness operated by local governments from coast to coast to coast; the Government of Canada and Canadian people recognize the growing concern over chronic disease and other impediments to health and fitness for Canadians; health and fitness ought to be promoted for Canadians of all ages and disabilities; and we all aspire to increase participation by Canadians in health, recreational sports and fitness activities; therefore, as a step to increase participation and enhance the health of all Canadians, this House encourages local governments across Canada to collaborate in promoting higher participation rates in recreational sports and fitness activities.”

[The Acting Speaker, Conservative, Bruce Stanton]

Does the hon. member have the unanimous consent of the House to propose the motion?

[Some hon. members]

Agreed.

No.

[Kellie Leitch, Conservative, Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour]

Mr. Speaker, I will start by underscoring our government's commitment to improving the well-being of seniors and our continued efforts to address their needs now and into the future. For this reason, I welcome the opportunity to speak to Bill C-326, an act to amend the Canada Pension Plan and the Old Age Security Act (biweekly payment of benefits).

I am certain 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 of seniors benefits.

The government recently undertook a significant exercise, the deficit reduction action plan, to reduce duplication, overlap and redundant processes across government to ensure the greatest value for taxpayer 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, but it will reduce the cost of businesses and create jobs and growth.

Clearly, members can tell that 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 costs of government by tens of millions of dollars in this time of fiscal restraint.

The old age security program and Canada pension plan are the first two pillars of Canada's retirement system. As such, they provide significant income security to Canadians in their senior years. Indeed, our public pension system is projected to provide Canadians with close to $72 billion this year alone. When month-to-month circumstances do not change, as is the case with retirement benefits, the practice of paying all benefits at the end of the month is the most efficient. This practice is also consistent with other income support methods both in Canada and internationally.

For the sake of contrast, I would point out that the employment insurance system is different. The EI system is meant to support individuals in a time of transition and, as such, is highly reactive to changing circumstances of those individuals. As a result, EI is paid in two week increments.

This is quite different from retirement programs that are largely set out once an individual applies initially and rarely have the benefit rates re-evaluated.

Changing the frequency of benefit payments may seem like a simple administrative task, Mr. Speaker, but it is fraught with consequences. The current system works well, allowing for efficient administration, as well as an efficient use of tax dollars. A bi-monthly payment schedule would put this efficiency at risk.

Consider the number of players involved in the delivery of all benefit payments. Service Canada works in partnership with Public Works and Government Services Canada and Canada Post and the banks coordinate the financial transfer of benefit payments. Each organization has its own work plan around the payment dates that take place on the third last banking day of each month. This is not to say nothing of the provincial and territorial governments that provide top-ups, tax credits and other benefits that are tied to monthly calculations for these payments.

Apart from the system costs of amending two acts of Parliament, changing the frequency of benefit payments would demand additional resources of all the players involved. Frankly, it would be difficult to justify the significant costs.

However, there are deeper issues at stake here. The changes proposed by the bill fly in the face of profound socio-economic changes effecting the country.

Like many countries, Canada is in the midst of a major demographic shift. Our population is aging. On the one hand, Canadians are living longer and on the other, we are having fewer children. These significant changes are making the total costs of OAS benefits increasingly difficult to sustain and afford for tomorrow's workers and taxpayers.

The chief actuary forecasts that the number of OAS recipients will nearly double from 2010 to 2030, from 4.8 million to 9.3 million individuals. Today, there are four Canadians working for every retired person. In 2030 the ratio will be two to one. In essence, about the same number of workers as today will be supporting twice as many seniors by 2030.

In this light, it is our view that the benefits to seniors of an increased flexibility in budgeting are outweighed by the extra cost shouldered by the taxpayers. Simply put, the changes proposed in Bill C-326 are not good value for money, not in light of our need to ensure the very sustainability of OAS for future generations. This is why our government plans to increase the age of OAS eligibility from 65 to 67, to ensure the sustainability of the OAS program.

Our government has the best interests of seniors at heart, both the seniors who receive public pensions today and those who will count on them in years ahead.

However, should any doubt remain, I would like to remind the House of the government's actions on behalf of current generations of seniors.

Since 2006, this government has provided $2.3 billion in annual tax relief to seniors and pensioners. We have introduced pension income splitting and doubled the pension income credit. We have also invested significantly in affordable housing. These changes were introduced in spite of the opposition's attempt to vote them down.

What is more, we have targeted the needs of low-income seniors through a variety of measures related to the guaranteed income supplement, or GIS.

First, seniors no longer have to apply to GIS every year. Automatic renewals exist, linked to their income tax return each year.

Second, in addition to raising the GIS twice above indexation, we introduced a top-up benefit to help the most vulnerable seniors. This represents a $1.5 billion investment over five years, the largest increase of the GIS for our most vulnerable seniors in a quarter century.

Third, our government is committed to Canada's economic action plan 2012 to proactively enrol seniors in OAS and to ensure that they receive the benefits to which they are entitled. This measure further enhances the financial security and well-being of more than 680,000 seniors across the country. As of last July, single seniors entitled to the GIS will receive an additional $600 of annual benefits and couples will receive $840.

Finally, through budget 2008, we introduced the GIS exemptions earning, from $500 to $3,500. This enables working GIS recipients to keep up to another $1,500 of their benefits each year.

Our government is committed to improving the quality of life of seniors, and continues to seek ways to address their needs now and in the future.

To that end, we take our role as custodian of the OAS and CPP very seriously. Any changes to these programs, no matter how minor, are examined carefully to assess their potential impact, not just on seniors but on all Canadians.

We have reviewed the changes proposed in Bill C-326 and believe they cannot be justified in our current fiscal reality. Nor can we justify the risk of changes posed to the efficiency of service delivery that would be imposed at this government level, on the provinces and the other service providers.

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