Thank you very much, Mr. Chair.
I'm very pleased to be able to be with you today to provide an overview of the amendments to Bill C-36. We have prepared some presentation material, so I'm going to walk you through that material. It essentially does several things.
But before that, I'd like to introduce my colleagues who are with me here today.
Madame Marla Israel, director, international policy and agreements, Seniors and Pensions Policy Secretariat; Nancy Lawand, director general of the Canada Pension Plan Disability Directorate; and Réal Bouchard, senior adviser, Department of Finance.
There are three things I would like to do today with this opportunity to speak to Bill C-36. First is to tell you a little bit about the circumstances that led us to develop the proposed amendments that you are considering today. Second is to provide you with a brief overview of some of the basic eligibility criteria for the OAS and the CPP. I'm sure that many of you have received calls, sometimes good, sometimes not so good, about our programs. As there's some complexity attached to them, I thought, with your indulgence, it might be an opportunity to give you a little bit of background on them.
Third, I just want to walk you through the proposed amendments, first under the CPP and then under the OAS, and then I'll discuss the amendments that apply to both. Then, of course, I'll take your questions.
First, why are we changing the legislation?
In large part, many of the amendments proposed in Bill C-36 began with suggestions that we received from Canadian citizens, through their letters, through meetings that we've been having with seniors organizations, and through the interactions that they have with all of you as parliamentarians.
Amendments to the CPP and OAS don't happen frequently, given that both pieces of legislation are quite complex. We took the opportunity to bundle a number of amendments together. The first trigger for these amendments was the triennial review of the Canada Pension Plan, which was completed this past June. As many of you know, federal-provincial-territorial ministers of finance who are joint stewards of the plan recommended two significant changes, which I'll come back to in a moment.
In addition, we had some observations from the Auditor General regarding the compliance provisions in the Old Age Security Act with respect to the Financial Administration Act. These two events provided the impetus for changes to both pieces of legislation. While the changes that are being brought forward are largely of a technical nature, they do represent very important changes that will improve the administration of benefits and remove some of the anomalies that have caused frustration for our clients in the past. They will also improve access to the benefits for seniors and streamline the delivery of those benefits in order to strengthen the accountability and fairness within Canada's public pensions.
If you go to slide 8, I'll move to a description first of the old age security program. The old age security program goes back to 1952 and is the first of the three tiers of Canada's retirement income system. It provides a basic pension to the majority of Canadians who are age 65 and over and is funded from general tax revenues of the government. There are three related low-income benefits that are tied to the OAS, the guaranteed income supplement, the allowance, and the allowance for the survivor. The latter two benefits are available to persons between the ages of 60 and 64. In 2005 and 2006 benefits were provided to over four million Canadians who received close to $30 billion through these programs.
On slide 7 there's a little bit of information on the basic rules of eligibility of the program. In order to qualify for an old age security benefit, a person must be over 65 and have acquired at least 10 years of residence after the age of 18, if applying for the benefit from Canada. If applying for the benefit from outside the country, a person must have acquired 20 years of residence after the age of 18. The only exception to these rules is if a person has lived or worked abroad and has received benefits through our 50 social security agreements that are now in place and that allow the pooling together of periods in both Canada and other countries in order to meet the minimum eligibility requirements of the OAS and CPP. The supplement is a low-income supplement that is paid to those who are receiving GIS and whose annual income is below a minimum threshold, which is at $15,000 a year for a single individual excluding OAS and $20,000 a year for married or common law pensioners.
Income is reassessed every year through income tax information provided to us by the Canada Revenue Agency. A maximum OAS benefit is close to $500 a month and is paid to individuals who have acquired 40 years of residence.