Human Resources Committee on Feb. 27th, 2007

[The Chair, Conservative, Dean Allison]

Pursuant to the order of reference of Tuesday, January 30, 2007, Bill C-36, An Act to amend the Canada Pension Plan and the Old Age Security Act, will now go clause by clause.

I'll ask everyone to get their bills and their pieces of paper out, and we'll get started with the clauses.

I see that in clause 1 we have no proposed amendments, so I'll just call the question, unless someone wants to speak on it.

(Clauses 1 to 3 inclusive agreed to)

(On clause 4)

[The Chair, Conservative, Dean Allison]

We're going to move to clause 4, where we have an amendment, BQ-1.

Mr. Lessard, would you read your motion, please?

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Yes, Mr. Chair. I move that Bill C-36, in Clause 4, be amended by replacing line 41 on page 2 with the following:

recoverable within six years in the Federal Court or

With your permission, I could argue this amendment, Mr. Chair.

[The Chair, Conservative, Dean Allison]

Go ahead.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Chair, the act provides for no time limit for recovering sums of money. In other words, if a person owes Her Majesty money, for any reason, she may claim interest and penalties without there being any time limit.

Section 32 of the Crown Liability and Proceedings Act already provides for a limit of six years, where the government has an obligation. Since that act is highly inclusive, we should draw on it so that the measure that applies where the government is liable also applies to an individual who is liable.

[The Chair, Conservative, Dean Allison]

Do we have any comments?

Ms. Yelich, and then Mr. Lake.

[Lynne Yelich, Conservative, Blackstrap, SK]

Thank you, Mr. Chair.

I would like to say that the issue is about the translation. It was raised in light of the Whitton case, where the court interpreted the French version, which did not contain a statement equivalent to “at any time”, as more restrictive when correcting these inconsistencies. This is what we're trying to do, to correct these inconsistencies to ensure that the legislation, in both the English and French versions, is not subject to misinterpretation. I just wanted to make that clarification on the translation issue.

I would like to also say that in light of the fact that both the CPP and OAS overpayments are not subject to a limitation period, associated debt such as interest payments or penalties should be treated in a consistent fashion. This is why we would not be able to support that particular amendment.

We also wanted to go back prior to 1995, when the old age security was amended to remove the existing limitations on the recovery of overpayments, and align the provisions of CPP, which had an indefinite period of time to recover overpayments.

Prior to the amendment, the Old Age Security Act contained a time limit that restricted the recovery of overpayments to the current year and the preceding fiscal year. This time limit was subsequently removed in order to ensure greater recovery and to ensure accountability to the integrity of the program.

What I'm saying is that we want to ensure accountability and having a greater recovery, and this provision was there just to have the translation consistent.

[The Chair, Conservative, Dean Allison]

Thank you, Ms. Yelich.

Mr. Lake.

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

First, can I ask Mr. Lessard what is the rationale behind the six years? Why is it six years and not five or eight or...?

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Lake, your question is excellent. We hesitated between six and five years. In Quebec, the taxation time limits are five years. We checked at the federal level to determine whether an act already provided for a measure governing the government itself.

The measure that we found in the Crown Liability Act, the CLPA, section 32, states that, in cases where the government is liable to a person and is in the wrong, retroactivity may be extended to six years.

We think that same measure should apply to an individual. If the government has not made an immediate claim, we think that the six-year retroactivity rule, which is already established, could enable us to govern ourselves in future, since we're not establishing a new rule.

[The Chair, Conservative, Dean Allison]

Does anybody have any other comments?

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

Yes. I just want to ask the officials here, in terms of this amendment, how this would affect the spirit of the act overall, but also the bill as we're looking at it.

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

Thank you.

I take the comments and I thank you for them.

Right now, in terms of the overpayments, because the Canada Pension Plan and old age security benefits are over a person's lifetime, you can have a situation where there would be an overpayment, for example, that would take place over a number of years.

In other words, let's say that someone's marital status had changed for low-income benefits and let's say the department never found out about that situation. You don't want to create a situation of undue hardship on the part of a senior by having only a limited period of time in which to recover a potential overpayment. The principle I think is one whereby you want to extend the period for a length of time, to allow a person to provide only a certain level of their income per month. That was the rationale for extending it to “recoverable at any time”. Otherwise, you may find yourself in a situation where the tendency would be to recover a larger share of the overpayment and a higher share of a senior's income.

[The Chair, Conservative, Dean Allison]

Thank you. If I understand correctly, Ms. Israel, this would enable them to benefit the person whom they may have overpaid for a number of years without its being caught.

I have Ms. Dhalla and then Mr. Lessard.

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

I'd like some commentary from the officials. Can you just perhaps expand on that and, with the amendment that's coming forward, on the number of seniors who would perhaps be impacted as well? Do you have any statistics at all?

[Marla Israel]

I don't have any statistics in terms of the number of overpayments or the number of people who have overpayments in the system.

I may have said on previous occasions that there are a number of circumstances that could lead to a situation of overpayment. To be clearer, and just to expand on that example, if you have a person who is married and who suddenly gets divorced but doesn't come to the department to let us know that, you might be in a situation of recovery of an overpayment. Or the opposite may hold true because you've paid the guaranteed income supplement on different income levels and different marital status; you could find yourself in a situation where the individual hasn't come forward to let us know.

For the most part, they do let us know, but there are situations where they do not, and they won't tell us, let's say, for a number of years. People can find themselves in a situation where the recovery of the overpayment would have taken place over a number of years. You have to recover that overpayment, and it might be big. With a time limitation of six years, you have a short period of time in which to recover that overpayment.

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

But you cannot recover the overpayment beyond the six years.

[Marla Israel]

Well, it “shall be recoverable” within six years, so that would be the limitation.

[The Chair, Conservative, Dean Allison]

I have Mr. Lessard, followed by Ms. Charlton.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Thank you, Mr. Chair. Ms. Israel's answer to Mr. Lake's question doesn't appear to apply here. I refer you back to the text of the bill, which states:

(2) If a person has received or obtained a benefit payment to which the person is not entitled, or a benefit payment in excess of the amount of a benefit payment to which the person is entitled, the amount of the benefit payment or the excess amount, as the case may be, constitutes a debt due to Her Majesty and is recoverable at any time [...]

In other words, if that debt dates back eight or nine years, retroactivity could be eight or nine years. Ms. Israel answered that the repayment of what is owed would be spread over a longer period. However, that is not entirely correct. At line 41 of Clause 4, which we're changing here, we're talking about retroactive liability. That's very different. Ms. Israel's answer doesn't apply here.

The same is true of the answer she gave our colleague Ms. Dhalla.

[The Chair, Conservative, Dean Allison]

Okay.

Ms. Charlton.

[Chris Charlton, NDP, Hamilton Mountain, ON]

I have the same concern as Monsieur Lessard did. It may just be that I'm misreading this, but the way I read clause 4 suggests that the debt is recoverable in Federal Court or any other jurisdiction, which seems to me to suggest that's the start of the action that allows the recovery by the government, so that in fact the period of six years is quite apart from the repayment schedule of that debt.

If you could just clarify that for me, I'd appreciate it.

[The Chair, Conservative, Dean Allison]

Ms. Israel.

[Nancy Lawand, Director General, Canada Pension Plan Disability Directorate, Department of Human Resources and Social Development]

Sorry, could we have a moment?

[The Chair, Conservative, Dean Allison]

Sure. I guess what's being suggested here by Mr. Lessard is that should there be an overpayment, that goes back indefinitely, but should there be a limit with regard to those who owe them money, it would be six years. That's what I understand Mr. Lessard was saying.

Mr. Lessard, did you want to add a comment?