Human Resources Committee on Feb. 20th, 2007

[The Chair, Conservative, Dean Allison]

Mr. Bouchard, do you want to finish the second point on the chart?

[Réal Bouchard]

Thank you, Mr. Chairman.

The chart shows, if you look at the vertical axis, the incidence of low income. You will see that Canada is below 2%. The lower you are on that scale means that of course you are doing very well in terms of having a system that protects low-income seniors. The horizontal axis shows as a percentage of GDP how much you are actually spending, and it shows that Canada is not spending that much, 5% of GDP. It is much less than other countries, but it is doing a very good job in targeting assistance to low-income seniors. In terms of balance between the two, it is an affordable system but it does a great job of protecting seniors.

[The Chair, Conservative, Dean Allison]

Ms. Yelich, do you want to comment?

[Lynne Yelich, Conservative, Blackstrap, SK]

I would like to thank you for joining us today. I remember when we introduced the bill and it didn't seem to me when I first saw it that it was as important as I have come to realize. I am really quite excited to get this through. I hope it can happen soon.

I want to talk a little bit about retroactivity, because I'm sure it's going to be an issue. I want to know if there are any other countries that have any longer than the 11-month retroactivity provisions for similar programs, if they could be compared. I realize, according to this chart, we do have among the most generous help for the low income. I'm just wondering if there are any countries that have longer than the 11 months. I think that is generous. I'd also like to know if it is line with other programs. How do you arrive at 11 months for the retroactivity? That is not “you” per se, but how was it arrived at? I'm sure it was thought out as part of the formula.

And do any of these programs have a comparable administrative burden to OAS or CPP?

[The Chair, Conservative, Dean Allison]

Ms. Yelich, we're going to have to maybe answer the first one and we'll catch you on the next round. We'll just get an answer in terms of how the retroactivity compares to other countries, and then we'll have to leave it for the next one.

[Lynne Yelich, Conservative, Blackstrap, SK]

And would it have huge impacts?

[Susan Scotti]

On the comparison on retroactivity, in essence, most other countries do not have any retroactivity provisions whatsoever, so in that respect, Canada is much more generous than other countries in having the limited retroactivity of a one-year period. If I look at Australia, New Zealand, Sweden, there is no retroactivity. In some countries they're all means-tested benefits. There are no universal benefits like the OAS.

When I look at the comparison with provincial programs, most provincial programs allow a 12-month retroactivity, in some with certain stipulations. British Columbia, on the B.C. employment and income assistance, for example, has no retroactivity provisions. Nova Scotia has no retroactivity at all on income-tested benefits. The 11-month retroactivity period is either better or pretty comparable to what exists across the country and better than what exists internationally.

[The Chair, Conservative, Dean Allison]

Thank you, Ms. Scotti.

Thank you, Ms. Yelich.

We're going to move to Ms. Dhalla, for five minutes as we start our second round.

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

Thank you very much to all of the witnesses. I really enjoyed hearing your commitment and genuine sincerity towards the seniors, in terms of being able to help them.

I want to bring up an issue I've been confronted with since being elected, both in my riding of Brampton—Springdale and also in my travels across the country. I'm sure you are familiar with the issue; you alluded to it on page 18 of your presentation. It's been brought up by a number of different seniors who are coming to Canada from a variety of different countries.

As you mentioned, there are reciprocal agreements in place with some countries that ensure eligibility for these individuals. But there are seniors coming from other countries—such as India, as an example—who are not allowed, unless they are here for ten years, those particular benefits.

I have been working very closely with a group called the Old Age Benefits Forum, which is a national organization. I think they have written to you many times about their frustration, feeling that they are being discriminated against because they are from India and that they, like every other Canadian, should be entitled to certain benefits.

On behalf of all of those seniors from the Old Age Benefits Forum and many other seniors across this country who are feeling at the receiving end of that discrimination, could you elaborate on what types of initiatives are being taken to ensure that reciprocal agreements with countries like India will be signed? And how can we try to change the situation?

[Susan Scotti]

I will introduce a response and turn the question over to Marla Israel, who actually negotiates the international agreements for us.

From a contextual perspective, the agreements we have in place are with countries that have fully functioning public pension systems in place that are relatively comparable to what we have in place in Canada, so that we can do the harmonization and coordination of benefits with them.

I know there are, in the new immigrant source countries, many pressures to enter into these agreements, but until these countries have fully functioning pension systems that are able to provide the relevant benefits, it's going to be very difficult for us to enter into negotiations with them.

I'll let Marla elaborate on that.

[Marla Israel]

Thanks, Susan.

I am the negotiator of the international social security agreements. We have heard from the Old Age Benefits Forum in the past and have heard from other countries as well. Certainly there is an impetus for individuals coming from those countries to have us sign those agreements.

To a large extent, I have to say we'd like nothing more. Canada has 50 social security agreements. In my experience, we are the top in terms of how many agreements we've signed. We've signed a number of agreements with countries that other countries have not yet approached—countries from the Caribbean, for example. This was just recognized in an International Monetary Fund discussion: that Canada has gone out seeking agreements with Caribbean nations.

With respect to India—let's take that example—for years India had a type of system that was called the “provident fund”. It ends up paying out benefits almost like an annuity. In doing that, they're not paying out a monthly benefit to individuals, so to try to reciprocate between Canada and India would be very difficult.

However, they've since started to make reforms to their social security system. I know that India is very interested in expanding the coverage in the country beyond public servants, representatives of the military, representatives of the police, for example, and city officials. When, in the case of China and India, there's more development in that regard and there's greater parity in terms of reciprocity, we would welcome it.

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

There is a bill before the House right now submitted by one of the Liberal members regarding to this. What would happen if that bill passed? India right now, you're saying, is not at the table in terms of having an agreement. If this bill passes through the House and becomes law, what would happen at that particular point?

[Marla Israel]

I would encourage consideration. I assume there would have to be some study of the bill itself. I would hope that due consideration would be given to the circumstances in which we negotiate agreements.

As I've said, we have to look at the administration of the benefits; we have to ensure the systems are stable. In other words, sometimes countries will approach us, or sometimes, in effect, we'll approach certain countries, and certain countries will say they're not ready.

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

Do we have any statistics in terms of the number of people who are impacted because of the fact that Canada has not been able to sign agreements for those particular countries?

[Marla Israel]

I don't have those types of statistics. I can certainly try to estimate it, but estimates are hard because you're having to look at factors in terms of the eligibility right now and the eligibility into the future.

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

If you could provide it to the committee, I would appreciate it.

[Marla Israel]

I will try to do the research for it, but my only proviso is that it may take a bit of time.

[The Chair, Conservative, Dean Allison]

Thank you, Ms. Dhalla.

Now to Mr. Gravel. Five minutes, please.

[Raymond Gravel, Bloc, Repentigny, QC]

Good afternoon. Thank you for being with us. This is the first time I've sat on this committee.

Before going back to what my colleague said earlier, I'd like to ask a question on credit sharing. On that subject, you spoke earlier about married people and common law spouses. I hope that homosexual couples aren't excluded. That involves a check. In Canada, we never know.

Furthermore, Ms. Scotti, we see in clause 15 of the bill that a senior may withdraw a pension application. I don't understand why a senior would do that. How would that benefit that person?

[Susan Scotti]

I'm going to answer in English. It's a little easier for me.

The circumstances of the individual might be such that they might not have considered that when they apply right now, they can't withdraw their application if the application has been processed and they're already in pay. The example I gave is someone who's 65, who with a year's delay might have been able to get a higher-level pension because the income level might have changed a little bit.

Marla may be able to explain a little bit more clearly.

[Marla Israel]

A senior may wish to withdraw his or her application. These individuals sometimes change their minds.

[Raymond Gravel, Bloc, Repentigny, QC]

But, madam, why would they change their minds? A person who is 65 years old is entitled to his pension. Why would he withdraw his application?

[Susan Scotti]

In some cases, it's more advantageous for the senior to wait...

[Marla Israel]

I'm going to give you an example.

[Raymond Gravel, Bloc, Repentigny, QC]

Do it quickly: I have another important question to ask.