Human Resources Committee on May 15th, 2008

[André Thivierge]

You would need an agreement to meet the three-year minimum for the very small number of individuals who perhaps reached 65 years of age with only one or two years of residence, but otherwise the agreements would not affect the payment of old age security benefits in Canada.

However, I should add that it would affect the payment of old age security benefits outside of Canada, because we still have a 20-year requirement for the payment of the benefit abroad. A person who lives in Canada for 15 years could export that pension under an agreement through the totalizing provisions.

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

I have one last question.

Ms. Beaumier gave us a set of estimates in terms of the costing and the analysis for this, how much it would cost if this bill went forward and how many citizens at this point in time are being excluded. Do you have a costing of this particular bill?

We've received so many different numbers, so if you could just tell the committee, for the benefit of all members, that would be really helpful.

[Michel Montambeault, Director, Office of the Superintendent of Financial Institutions Canada, Canada Pension Plan, Old Age Security, Department of Human Resources and Social Development Canada]

We have estimated the total cost of changing the rule from ten to three years to be $700 million. It would probably imply having around 93,000 more people put under the benefits of OAS, about 85,000 more on the GIS, and about 2,000 more on the allowance. For the OAS it would be $84 million, for the GIS around $600 million, and for the allowance around $14 million.

[The Vice-Chair, Liberal, Michael Savage]

Mr. Lessard.

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

Isn't it true that there is a form or reciprocity in these agreements, so as to guarantee our own immigrants some security when, for example, they go to countries covered by an agreement? I'm not talking about cases where there's a social security net that is similar or different, or whatever.

[André Thivierge]

Pardon me, but I'm having trouble understanding you, as a result of the echo. I don't have any earphones. Could you repeat your question?

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

Isn't it correct to say that there is a reciprocity agreement in some respects with the countries where these agreements apply? That's the case, for example, for people from here who emigrate to those countries. In some countries, there is a social security net, whether its comparable or different.

[André Thivierge]

We can pay benefits outside the country. One agreement enables people who are in Canada to meet the minimum requirements to receive an old age security pension, but we can transfer the pension outside the country under an agreement. So that works on both sides.

The idea is to protect people coming into Canada who receive benefits from their country of origin and, naturally, people who return to their country. Canadians who leave Canada before the 20 years required by the act can take their old age pension with them.

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

Ultimately, the amounts you're announcing provide security for people who come here as immigrants, and this reciprocity agreement ensures security for our people who go to those countries.

[André Thivierge]

Yes, that's the case. However, I'm going to let Mr. Montambeault address the cost issue. I believe it's equivalent to the old age pension payment inside Canada. If the number of years is reduced to three, that will change nothing for the people who leave the country. People will always have to meet the 20-year requirement for the pension to be exportable.

Have I correctly explained the matter?

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

Yes. We can consider that these agreements make it so that a portion of the costs has an impact on the security of our Canadian citizens who immigrate.

Have you calculated the balance of costs?

[André Thivierge]

Yes. In 2006, we paid approximately $110 million outside the country, either in respect of old age pension or under the Canada Pension Plan. The other countries paid approximately $550 million in Canada. That amount came directly under the agreements. So it appears that, for every dollar paid outside the country, five dollars enter the country.

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

Thank you very much.

[The Vice-Chair, Liberal, Michael Savage]

I have one quick question for Monsieur Montambeault.

You've given us the cost from HRSDC of going from ten to three years. Have you costed going from ten to any other number of years--five or seven, or any other?

[Michel Montambeault]

No, I have just costed to go from ten to three years.

[The Vice-Chair, Liberal, Michael Savage]

Thank you. Are there any other questions on clause 1?

Ms. Bennett.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Yes. I was just wondering about the parallel with Canadians who live away for awhile and then return, in terms of their residency requirement or how long they have to be here in order to obtain their benefit when they return to Canada.

[André Thivierge]

The 10-year rule presently applies to anybody. We're looking at 10 years after the age of 18, so it applies to somebody who enters the country, a new immigrant. It equally applies to someone who may have left the country at an early age and returns perhaps to Canada to retire. So if I left Canada at age 22, I only have four years of residence after age 18. If I come back at age 65, I don't meet the 10-year requirement, nor would I meet the 20-year requirement for payment abroad if I stayed abroad.

So the 10-year requirement applies to everybody equally, regardless of national origin.

[Carolyn Bennett, Liberal, St. Paul's, ON]

This bill only applies to immigrants. Is that right?

[André Thivierge]

No, it applies to anybody who resides in Canada and does not have 10 years of residence in Canada.

[Carolyn Bennett, Liberal, St. Paul's, ON]

So this bill would also apply to Canadian citizens who have gone away.

[André Thivierge]

That's correct.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Okay.

[The Vice-Chair, Liberal, Michael Savage]

Ms. Dhalla.

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

André was saying that the bill would also be applicable to Canadian citizens living abroad, because the requirement for the residency component would change. So does the costing you gave us also take that into account? Or has your costing just been reflective of the immigrants or citizens who are living in Canada now?