Evidence of meeting #57 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was benefits.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Susan Scotti  Assistant Deputy Minister, Social Development Sectors Branch, Department of Human Resources and Social Development
Marla Israel  Director, International Policy and Agreements, Seniors and Pensions Policy Secretariat, Social Development Sectors Branch, Department of Human Resources and Social Development
Ross MacLeod  Associate Assistant Deputy Minister, Service Canada - Processing and Operations, Department of Social Development
Réal Bouchard  Senior Advisor, Expert Panel on Equalization and Territorial Formula Financing, Department of Finance

4:45 p.m.

Director, International Policy and Agreements, Seniors and Pensions Policy Secretariat, Social Development Sectors Branch, Department of Human Resources and Social Development

Marla Israel

All right. I'm going to answer you in English because of the complex nature of the act.

You could have a circumstance, for example, where a person is living outside of Canada. I don't want to get too bureaucratic. In 1977 rules were changed to introduce partial pensions. But there are people who could perhaps be living outside of Canada, and they would qualify under these older rules that exist for an old age security benefit. And I can follow up with that later, but if they decide to move back to Canada two months after they've applied and they come to realize that they could have had a higher benefit, they would want to withdraw it.

4:45 p.m.

Bloc

Raymond Gravel Bloc Repentigny, QC

In spite of everything, these are exceptions.

4:45 p.m.

Director, International Policy and Agreements, Seniors and Pensions Policy Secretariat, Social Development Sectors Branch, Department of Human Resources and Social Development

Marla Israel

Yes, but since some individuals often travel from country to country, it's a relatively common phenomenon.

4:45 p.m.

Bloc

Raymond Gravel Bloc Repentigny, QC

I want to go back to the question my colleague addressed earlier because I wasn't satisfied with the answer.

It was said that 68,000 persons did not receive the Guaranteed Income Supplement in Quebec alone. We reached 42,000 of them, and there are 26,000 still to be reached. We have the figures. As regards the reasons why those people aren't being reached, you referred, among other things, to immigration and the fact that those persons were outside Canada.

However, it is inconceivable that so many people would not be receiving the Guaranteed Income Supplement. They need it. They're seniors, vulnerable and have no income. Nothing is being done to reach them. You said that Canada was very generous. I have reservations on that point. I don't understand why nothing has been done to date and why we're not taking appropriate measures to reach those people.

4:45 p.m.

Assistant Deputy Minister, Social Development Sectors Branch, Department of Human Resources and Social Development

Susan Scotti

I think we've already answered that question in part. I'm nevertheless going to try to answer it, but in English.

I don't know about the numbers. We'd have to go back and look at the numbers base.

But the essential point here is that we go to extreme efforts to try to reach all eligible Canadians. We use a variety of mechanisms, whether it's letters, agreements, partnerships with the Canada Revenue Agency, or partnerships with the non-governmental sector, which at the community level might be able to identify people much better than we can here in Ottawa.

So the outreach is continuous and constant. Every single effort is made to find those people who might be eligible but have not applied. At the end of the day, there may be other means we haven't thought of. We would be quite open to receiving the benefit of your ideas about other means that we might use to extend our outreach efforts. But I can assure you that through all the mechanisms available to us, we have done our very best to ensure that everybody who is eligible is receiving a benefit.

Through the measures we're introducing in Bill C-36, over time the fact that there will be one single application, and that individuals will not have to continuously report the changes in their income levels to us, will reduce any gaps that may exist in terms of the take-up on eligibility.

So moving forward, things are going to be better. Where we are right now is a vastly improved situation—

4:45 p.m.

Bloc

Raymond Gravel Bloc Repentigny, QC

That's the case of the people who are already receiving it, but for those—

February 20th, 2007 / 4:45 p.m.

Assistant Deputy Minister, Social Development Sectors Branch, Department of Human Resources and Social Development

Susan Scotti

We're trying to reach all the people—

4:45 p.m.

Conservative

The Chair Conservative Dean Allison

Thank you, Mr. Gravel.

We're going to have to move on to Ms. Charlton for five minutes, please.

4:45 p.m.

NDP

Chris Charlton NDP Hamilton Mountain, ON

Thank you very much.

I know the chair is going to be much more indulgent in letting you go over the time than he would with me, so I'll ask both of my questions up front and hope that we get the answers in.

Both of my questions relate to the CPP. Retroactivity is a huge concern for me, whether it concerns GIS, OAS, or CPP, but let me ask about CPP in particular, because it is different from the other two.

CPP is a pay-as-you-go system, so it's not the government's money. The government administers this program. Retroactivity in Quebec is five years on the QPP. Why is it that we're limiting retroactivity on the CPP? I think a whole lot of people would be really happy if we could eliminate that provision.

The other question I have is a follow-up to the question I started to ask earlier about how we calculate what the contribution rates ought to be for the CPP. Let me expand on that question a bit. Is the solvency period on which we base the contributions 75 years?

4:50 p.m.

Senior Advisor, Expert Panel on Equalization and Territorial Formula Financing, Department of Finance

Réal Bouchard

It's 60 years.

4:50 p.m.

NDP

Chris Charlton NDP Hamilton Mountain, ON

Okay, so it's 60 years.

We know, or at least we've been told, that the CPP is solvent for another 75 years. If you're contemplating an increase to benefit levels, at what point do you decide that we need greater contributions, when we know we're solvent for 75 years, but technically we really only need to be solvent for 60?

Regarding the other question, the Minister of Finance talked about potentially putting up to $3 billion of government money into the CPP in the federal budget. I understand that this may or may not have been dropped. What was the rationale when again CPP is a pay-as-you-go program? It's an employee-employer, contribution-based system. What would be the need for topping up the CPP? Also, if you confirm that this has been dropped, do you have any idea where that money went?

Thank you.

4:50 p.m.

Senior Advisor, Expert Panel on Equalization and Territorial Formula Financing, Department of Finance

Réal Bouchard

I'll answer the last two, and perhaps Susan will answer the first one on retroactivity.

Coming back to your question about the period over which we calculated the contribution rate, technically we need 60 years to calculate the steady contribution rate you need to make sure the plan stays on a sound financial footing. However, the chief actuary's report covers a 75-year period in its projections. Of course, you can see that even though 60 years was technically the period used to determine the rate that would ensure sustainability, the numbers—which cover 75 years in the actuary's report—are clearly showing that between years 61 and 75, things continue to be more or less along the same lines as they were previously. So it's perhaps the slight distinction between the 60 and the 75. But fundamentally, the viable steady state rate is calculated over a long period of time.

If I may add, the rate we need to make sure the plan is sustainable is not calculated on the basis of running down the fund, with the fund being zero at the end of the 60-year period. That's not the case. It's essentially maintaining the level of funding during the entire period. So by the end of that 60 or 75 years, the fund has stayed constant in relative terms. The current projection shows that the fund is basically covering five years of benefits throughout the entire period, including to 2075, and so on. That's the answer to the second question.

Your third one was....

4:50 p.m.

NDP

Chris Charlton NDP Hamilton Mountain, ON

It's about money in the budget that will perhaps go to CPP.

4:50 p.m.

Senior Advisor, Expert Panel on Equalization and Territorial Formula Financing, Department of Finance

Réal Bouchard

Yes, that issue was raised in May in Budget 2006. If there is a surplus in the government's budget, a proposal could be to have some of that money go into the CPP and QPP. That was raised with the provinces. Some provinces expressed some concerns about that, one of the main concerns being that we needed to keep the CPP separate from the government books. That was one among a number of concerns that were raised.

The economic update of last November was, fundamentally, that the surplus would be put to debt reduction and tax reductions.

4:55 p.m.

NDP

Chris Charlton NDP Hamilton Mountain, ON

Including the $3 billion?

4:55 p.m.

Senior Advisor, Expert Panel on Equalization and Territorial Formula Financing, Department of Finance

4:55 p.m.

NDP

Chris Charlton NDP Hamilton Mountain, ON

I'm sorry, but going back to the solvency issue, the 60 versus 75 years. In light of how fluid that situation is, what is the timeframe on which you determine the contribution rate needs to be changed to be able to keep pace with increasing benefits, if those were to occur? Projecting solvency 75 years out and taking economic growth or economic declines into account—or however you do these things—isn't exactly an exact science. I can't imagine how you calculate this out when you need to do your calculations.

4:55 p.m.

Conservative

The Chair Conservative Dean Allison

It's an actuarial science.

Anyway, Mr. Bouchard, just make a quick response, because she's over time.

4:55 p.m.

Senior Advisor, Expert Panel on Equalization and Territorial Formula Financing, Department of Finance

Réal Bouchard

In the actuarial report prepared by the chief actuary, there is a sensitivity analysis. It shows the extent to which the contribution rate would vary if certain assumptions were different from the basic assumptions that were used. If fertility were lower than expected, if life expectancy were much longer, and if the economic assumptions, such as the interest rate, we used were wrong, it shows how sensitive it is, and so on.

So reading that sensitivity analysis in the report is quite instructive; it shows that the financing put in place is quite robust.

4:55 p.m.

Conservative

The Chair Conservative Dean Allison

Thank you very much.

We're going to move to the last five minutes of this round. Mr. Lake.

4:55 p.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

Thank you, Mr. Chair.

I want to follow up a little bit on some of the questions that Ms. Dhalla was asking. Immigration is also a big issue in my riding in Mill Woods, and many of the people there will be interested in the changes that affect first-generation Canadians.

First, I just want to clarify what you said, that there's currently a difference between the way sponsored immigrants are treated, based on whether they're a Canadian citizen or a permanent resident. Right?

Okay.

In 1996 I guess the Liberal government of the day made a decision to amend the act. Did you say that they didn't intend to create the differential treatment?

4:55 p.m.

Assistant Deputy Minister, Social Development Sectors Branch, Department of Human Resources and Social Development

Susan Scotti

They created an unintended differential treatment. They intended to cover everybody in the same way, so that whether you were a permanent resident or a Canadian citizen, you would not be eligible for income-tested benefits during the period of your sponsorship.

As a result of the way the particular legislative provision is written, it left a loophole and it created that unintended effect. We're just correcting what was not done in the 1996 legislation.

4:55 p.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

Okay. Good.

One thing I could see here, though, is that someone who is now receiving the GIS because of the loophole, and they may have been receiving it for a while, may be concerned that it may be taken away from them. Is that addressed with the change?

4:55 p.m.

Assistant Deputy Minister, Social Development Sectors Branch, Department of Human Resources and Social Development

Susan Scotti

It will not affect people who are currently receiving the benefit. It will be prospective, so it will apply to the future. It will not go back.

4:55 p.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

It's from here on in. That's good.

Another question I have is let's say you have an older couple who's been sponsored and the sponsor dies. They're left with, obviously, a breakdown of their sponsorship. Is there a contingency in the act to help those people in a situation like that?