Human Resources Committee on Feb. 20th, 2007

[Susan Scotti]

Yes, most definitely. In the event of the breakdown of the sponsorship for whatever reason, whether the sponsor has financial difficulties or dies or is imprisoned or whatever, then in those cases of sponsorship breakdown the individual would be eligible for the benefits.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Specifically on the issues that Ms. Dhalla was talking about with respect to people who were sponsored receiving benefits from their country of origin if we've signed a social security agreement with that country, I could see that a lot of my constituents might wonder about the equity of that. Can you tell me a little bit about how those social security agreements work? Is it a person who has paid into the system in Canada all their lives who winds up paying through their tax dollars for someone who's new to the country to receive benefits, or is it the country of origin that pays those benefits? Can you maybe shed some light on that for me?

[Marla Israel]

There are a number of different factors that are taken into consideration when we sign social security agreements, but generally speaking if a person, for example, comes to Canada--let's talk about old age security--turns 65 and has, let's say, only one year of residence, then we do what's called totalization of the benefit. The obligation is for the individual to be able to use periods, usually of contribution in the other country, that have to equal the minimum we have under the Old Age Security Act. The minimum of course if you're living in Canada is ten years. The person only has one year but they have nine years, let's say, in the other country, or even more than that. Then the individual would be able to receive a pro-rated old age security benefit. At the same time, that person would also in all likelihood receive a foreign pension into Canada. In other words, they'd receive a pension from the other country into Canada.

This is what agreements do. Oftentimes, especially with globalization and mobility, you want to be able to ensure that people are covered in both of the countries that they've either lived in or worked in. You don't want to be able to see gaps in coverage. In other words, you don't want to see people who would have to resort, let's say, to welfare or other benefits. This way there's broader coverage.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

The difficulty, then, would be in cases where countries don't provide benefits like Canada does and it winds up costing the Canadian taxpayer a lot of money, I imagine, or potentially could. That would be the concern that we would have.

Many people in my riding are actually from India or in that situation. I'd like to know what I should tell them. What does India have to do? Where do they have to get to, to get to that level? That would be important, I think.

[The Chair, Conservative, Dean Allison]

This will be the last question. Please give just a quick answer on this.

[Marla Israel]

Well, sometimes the circumstances are difficult. As I said, India's undertaking significant reforms. They've been under pressure not only from the community, Indians living there, but also of course from people living here who may have contributed and who through India's pension system would not necessarily be eligible to receive an Indian pension in Canada. So it works both ways.

The country itself has to take measures in order to develop a maturity of their pension program sufficiently to be able to have the circumstances that would provide Canada with the opportunity to negotiate that agreement with them.

As I say, the intent is there and the willingness is there, generally speaking, from a departmental perspective, but the limitations exist on the part of the other country.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move to Mr. Silva for five minutes.

[Mario Silva, Liberal, Davenport, ON]

I think my question is not unlike that of some of the people who have spoken here earlier. Certainly Ms. Dhalla had a concern that I was going to speak to as well, which is on the issue of immigrant communities.

As you are aware, about half of Toronto's population was born outside the country. This presents really incredible barriers, in terms of both education and providing the information in the appropriate languages.

My office is constantly inundated with people who are not aware of the changes or the benefits they are entitled to. It becomes extremely difficult and frustrating to know that in fact they could be receiving some of these benefits.

It's unfortunate that we have not designed a system such that when we have changes, we could issue them a cheque, as opposed to saying that they have to apply. We are not always able get them, because of language barriers or, as was mentioned, literacy issues. People who are very marginal in society have great difficulties accessing the information. It tends to be better-educated people who know more about the system and make these types of inquiries, not the overall population that is in need. This is a bigger issue.

That's one issue I wanted you to comment on. I also want you to comment briefly on the issue of the charts. This is the chart comparing Canada to other countries. I always find that this comparison is a bit difficult to do, because it's comparing apples to oranges on every issue, whether it's poverty, because there are so many other factors at play.

Somebody making $400 in a country such as Portugal, where I was born, might be better off in comparison to someone in Canada making $600, because of issues such as taxes. In Toronto, for example, if you're a homeowner and a senior, all the money that you're getting from your pension is going to pay taxes, which average between $3,000 and $5,000. That's an incredible amount of money for a senior to pay when all they have is their pension to deal with. In Portugal, your property taxes might be only $100 a year. So you have to consider those factors.

It's also the issue of larger versus smaller cities. Property taxes are an enormous amount of money in larger cities.

So I find that with these numbers, the statistics, it's very hard to give the real picture. It gives you a little example, but not the full picture.

Do you want to comment on that?

[Réal Bouchard]

The only comment I can make is yes, international comparisons are always difficult, whether we're talking about the incidence of low income, poverty among children, or whatever.

Still, the chart I distributed is based on an income study by Luxembourg, and so on, and the expenditures as a percentage of GDP are done. It was calculated by the OECD, and so on. So it's always difficult. But the fact remains that in many international analyses, whether it's OECD or the IMF, when they're talking generally—not in individual cases, as I understand there are always some hardship cases in some situations—Canada's reputation in terms of a retirement income system is absolutely excellent, not only as I've said in terms of protecting low-income seniors, but in terms of affordability, that balance between the two.

Also, with the reforms to the Canada Pension Plan we have alluded to, we are one of the very few countries that has tried to address this issue and put the plan on sound financial footing.

If I may, it's not a pay-as-you-go plan any more; it's a partial funding plan. We still have a way to go, but it's a partial funding plan for the Canada Pension Plan.

[Susan Scotti]

Your first question was a bit of a two-part question. It was whether we do everything we can to reach immigrant communities that may not speak English or French. The answer is yes, we do, through our outreach efforts again. My colleague in Service Canada can probably answer whether we've got the language ability, but in certain communities we do have very active partnerships with organizations that can support our outreach efforts in other languages.

On the second question, I'm not sure it is entirely accurate that the better-educated and, by assumption, middle-income-level Canadians receive more benefits than others. If I look at the evidence, it suggests that overall poverty levels have been reduced by the impact of the measures we put in place through the OAS and the GIS. I think it's made quite a difference in the income levels of low-income Canadians. I think it's generous; I think it always could be much more generous, but if I look at the stats, only 5.6% of seniors are below the low-income cutoffs, which I think is a decrease from about 25% or 30% about 10 years ago.

[The Chair, Conservative, Dean Allison]

Thank you. That's all the time.

We're going to move to Mr. Chong for five minutes, and then I'm going to try to get in a couple of quick comments before we wrap up.

Please go ahead, Mr. Chong.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Mr. Chair.

I noted that two of the improvements proposed in Bill C-36 are to enhance the fiscal sustainability of the Canada Pension Plan. One provides new guidelines that would instruct the chief actuary about how to go about calculating the full benefits of the CPP benefits. The other provides some rules around greater transparency in terms of reporting these costs and integrating this new fully costed arrangement into the deductions that are paid.

I also note that the other part of the bill calls for extending Canada Pension Plan disability benefits. For the benefit of the members of this committee, I'd like you to elaborate on the intricacies around these two proposals with respect to federal-provincial jurisdiction and how complicated it was to get to this point because, as we all know, the Canada Pension Plan is not exclusive federal jurisdiction; it is joint jurisdiction, and there is a very complicated collaborative process to get us to this point. Maybe you could also tell this committee that any changes to this legislation with respect to the pension plan would require us to go back to the provinces to restart the consultation process and regain their consensus on this matter.

[Réal Bouchard]

Yes. To become law, any material changes to the Canada Pension Plan require the consent of two-thirds of the provinces and two-thirds of the population. The two changes--not all of them, not the housekeeping and the others, but the two first changes that were described, the full funding requirement as well as the change to the disability benefit--will require provincial consent.

Those changes were recommended by the ministers of finance when they met last June. At that meeting the triennial review of the Canada Pension Plan was completed. It had taken place in the previous 12 to 24 months at the officials level, and then at every level up to the minister. The recommendation of the ministers was that we needed to proceed with those two changes. We had to operationalize that change, the full funding requirement, that had been in place since 1998. It was one of the key principles of reform that went back to 1998.

On the disability change, 10 years after some tightening was made to the eligibility requirements for disability benefits as part of the reforms in 1998, ministers wanted to have another look to see whether some refinement had to be made, and the decision was made. The recommendation was yes. We were not talking about undoing the changes that were made in 1998. It was fine tuning, making some adjustment after 10 years of experience.

That recommendation by the ministers of finance, of course, is a result of a long period of work. Of course, the next step is for the law to be passed at the federal level, and once this is passed, orders in council from the provinces are required, and only then can it become law. If a significant change were to be made, it would mean having to return to the provinces, starting the process all again, and it definitely puts at risk the changes that have been proposed and recommended by the ministers.

[The Chair, Conservative, Dean Allison]

Thank you very much.

That's all the questions we have. I know that Ms. Dhalla and Mr. Gravel want two quick comments. We do have some committee business to deal with before the bells start in about 30 seconds. We will have to take care of that business.

Ms. Dhalla, and then Mr. Gravel.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

I have a quick comment. The process that you described, especially Marla in terms of the reciprocal agreements with other countries, is important. It's important because this is a non-partisan issue, that we educate the seniors out there. Looking at organizations like the old age benefits forum, they come into my office and I see them at events and we tell them the story, but because of the fact that it hasn't been officially provided from the department or from the government, it becomes very difficult for them to understand. Canada as a country and as government ends up taking the blame. You had mentioned in your words that there was a willingness there, a commitment, but there are limitations from some of these other countries. If you provide that information, it will be most helpful in terms of trying to reach out and educate them on this issue.

Last, but not least, I think my colleague Mr. Silva had brought it up, and I believe Ms. Scotti had mentioned the number of outreach activities that are taking place to ensure that people who are not aware that they are eligible for some of these benefits become aware. In terms of that awareness and that outreach, we do reach out to the immigrant communities. We have seen time and time again that many of the immigrant communities are reading their own newspapers, listening to their radio programs, watching their own TV shows. Government really needs to be proactive in reaching out to these communities to ensure that they get the message and are aware of the eligibility benefits they are entitled to.

[The Chair, Conservative, Dean Allison]

Thank you, Ms. Dhalla.

We'll have a final comment by Mr. Gravel, and then we're going to move into committee business. Mr. Gravel.

[Raymond Gravel, Bloc, Repentigny, QC]

I'd like to go back to retroactivity because something is troubling me on that subject. You said that there were 11 months of retroactivity and that that wasn't done elsewhere, that there was no retroactivity.

Are we talking about the same thing? I wouldn't want to be comparing apples and bananas. When you owe someone money and you grant that person retroactivity, that's an amount owed; it's not a favour or a privilege. I was wondering why full retroactivity isn't granted to people who are entitled to the Guaranteed Income Supplement.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Gravel.

Are you guys going to offer a quick comment? No.

Thank you very much. I want to thank the witnesses for being here today.

We're now going to move directly into committee business. We have the fourth report that you have before you that was brought forward from the subcommittee on agenda and procedure.

Mr. Savage.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

I think there has been some miscommunication that could be rectified very easily.

On February 28 it indicates that we're hearing from sponsors of Bill C-269 and Bill C-278. Down below it indicates that only the sponsors of those bills be heard. A number of witnesses have been submitted for Bill C-278. I've spoken to the sponsor of that bill. He would be satisfied to include two of them, the Cancer Society and the Heart and Stroke Foundation, which represent the two biggest disabling diseases in Canada. They are anxious to speak on that bill, and if we could amend this to reflect that he would share his hour on February 28 with those two representative groups, he would be fine with that, and so would I.

[The Chair, Conservative, Dean Allison]

You are proposing that only the sponsors of Bill C-269 and Bill C-278 be heard on these studies and the others just be struck.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Yes.

[The Chair, Conservative, Dean Allison]

Go ahead, Ms. Yelich.

[Lynne Yelich, Conservative, Blackstrap, SK]

I would just like to mention that we would like department officials as well to speak to those two bills, as experts should be heard on this, if we do have witnesses.

[The Chair, Conservative, Dean Allison]

It looks like we're going to have to add more time to those meetings if we are going to be able to hear people. It would make sense that we have departmental officials there and have a chance for those witnesses to also be heard on the bill.

Ms. Dhalla.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

The other thing is on page 2 it says for amendments to Bill C-269 and Bill C-278 that the deadline would be March 1 at noon. On the calendar that we have in front of us we would actually be going clause by clause on March 1. I want to ensure that three hours would be sufficient time.