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

[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.

[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 Chair, Conservative, Harold Albrecht]

I think I said “motion” and I should have said “bill”. It's Bill C-326. If I did say “motion”, my error.

Any discussion on Bill C-326?

Mr. Reid.

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

moved for leave to introduce Bill C-326, An Act to amend the Canada Pension Plan and the Old Age Security Act (biweekly payment of benefits).

Mr. Speaker, as is quite evident, I could not sleep much last night so I spent a lot of time doing my bills.

This is a very popular bill. I introduced it in the last session and I received a lot of positive feedback. The bill would allow people who receive the CPP or OAS monthly benefit to have an option, and I would stress it is an option to be paid biweekly, twice a month, if they choose to do so.

It is inspired largely by a provincial group of 50-plus clubs and pensioners in Newfoundland and Labrador. Year over year, they were passing this resolution within their organization where they wanted the option to be paid twice a month instead of just once.

It would be a good budgeting measure, especially for the younger seniors. This way, because it is an option, older seniors who live in homes can maintain their payment of once a month, which is also better budgeting for that particular institution that looks after them.

I am begging the government to seriously consider this as a good positive measure for seniors and their ability to budget.

I thank my colleague from Avalon, who is a great member. There is not much else I can say about him other than the fact that he simply inspired me. The fact that I stayed up all night to do this is also his fault.

(Motions deemed adopted, bill read the first time and printed)