Citizenship and Immigration Committee on June 3rd, 2024

[The Chair, Liberal, Sukh Dhaliwal]

I call the meeting back to order.

We are resuming with the witnesses on the second panel.

Welcome back, members.

I would now like to welcome our witnesses.

From Sun Life Financial Services of Canada, we have Ms. Laura Hewitt, vice-president and head, global government affairs and public policy. From the Manufacturers Life Insurance Company, we have Ms. Maryscott Greenwood, global head, government relations.

Welcome Ms. Greenwood and Ms. Hewitt. You have five minutes each for opening remarks.

We will start with Madam Hewitt. Please go ahead for five minutes.

[Laura Hewitt, Vice-President and Head, Global Government Affairs and Public Policy, Sun Life Financial Services of Canada Inc.]

Thank you, Mr. Chair. It's a pleasure to be here with you today.

I would like to begin by thanking the committee for the chance to appear on this important study and clarify the role that MPF trustees such as Sun Life play in the early MPF application withdrawal process.

At the outset, we want to assure the committee that Sun Life does not prevent Canadian permanent residents or citizens who have permanently left Hong Kong from withdrawing their Sun Life MPF funds. On the contrary, as I will outline in my remarks, we have, in fact, accepted 97.5% of all applications for early MPF withdrawal due to permanent departure since 2021.

Hong Kong is one of Sun Life's longest-standing international markets, where we have held a continuous presence since 1892. Most of our product and service offerings in Hong Kong are long-term and span several decades, including life insurance, health insurance, asset management and, of course, pension management, including as one of 13 approved trustees to administer the MPF program, Hong Kong's mandatory retirement savings plans for all workers.

At Sun Life, our purpose is to help our clients achieve lifetime financial security and live healthier lives. In any jurisdiction where we operate, whether it be our home base of Canada, in the United States or in Hong Kong, Sun Life is focused on meeting the needs of our clients. Each market and each client has distinct needs, and we tailor our approach to best support them. We also ensure that we are compliant with the specific laws and regulations of each of those markets, which enables us to serve our clients to the best of our ability.

These principles are true for Hong Kong and for early MPF withdrawal requests by clients who have permanently left Hong Kong, which is the nature of our discussion today.

I want to provide committee members some context into how the early MPF withdrawal application approvals process works and the role that trustees such as Sun Life play in the process versus the role that the Hong Kong MPF regulator, the Mandatory Provident Fund Schemes Authority, or the MPFA, plays.

There are two levels of approval for any early MPF withdrawal request.

The first level of approvals is done through the MPF trustee, such as Sun Life. The trustee reviews all documentation provided by the applicant and either accepts or declines the application based on whether they have successfully met the criteria for early withdrawal. In the case of early withdrawal due to permanent departure, there are three criteria: first, a statutory declaration that the applicant has permanently departed or will permanently depart Hong Kong on a certain date; second, proof of permission to indefinitely reside outside Hong Kong; and third, that an applicant may only use the “permanent departure from Hong Kong” stream once in their lifetime for an early MPF withdrawal.

If the trustee determines that the applicant has successfully met all three criteria, the application is approved and is sent to the MPFA for final approval.

The MPFA has access to an applicant's entire MPF history, including any former early withdrawal requests for reasons of permanent departure.

In rare cases, Sun Life has approved an application for early withdrawal based on the documentation submitted to us, but upon the MPFA's review, the client was declined due to having received a prior payout under the permanent departure stream.

To provide a clear picture for committee members in this important study, I would like to share the following data for the committee to consider. Between 2021 and Q1 2024, Sun Life processed a total of 14,590 applications for early MPF withdrawal due to permanent departure from Hong Kong, and 97.5% of these applications were approved by both Sun Life and the MPFA. Of the remaining 2.5% of applications, which were not approved, approximately 1.2% were declined by Sun Life for failing to meet the criteria or for administrative reasons, such as missing or incomplete paperwork, and approximately 1.2% were approved by Sun Life but subsequently declined by the MPFA for having previously received a payout under the permanent departure stream.

Of the applications declined by Sun Life, there were only two clients with Canadian citizenship or permanent residency who were declined for administrative reasons, such as incorrectly filled out forms or missing supporting documents.

In closing, I want to reassert to committee members what we said at the outset. Sun Life is not preventing Canadian permanent residents or citizens who have permanently left Hong Kong from withdrawing their Sun Life MPF funds. In fact, our records show that we have approved all eligible and properly completed applications.

Again, I thank the committee for the chance to appear before it today.

I hope this information will help you study this important issue.

I look forward to answering your questions.

[The Chair, Liberal, Sukh Dhaliwal]

Thank you, Madam Hewitt.

Now we will go to Madam Greenwood for five minutes, please.

Go ahead.

[MaryScott Greenwood, Global Head, Government Relations, The Manufacturers Life Insurance Company]

Good afternoon.

Thank you so much, Mr. Chair and members of the committee.

I'm greatly honoured to be here today.

It's good to see you.

My name is Maryscott Greenwood. I serve as the global head of government relations at Manulife. It's an honour to appear before this parliamentary committee. The meeting was noticed quickly, so I'm appearing remotely from Washington, for which I apologize.

I am pleased to provide background on Manulife's pension business in the Indo-Pacific region and to try to answer your questions.

A proudly Canadian company, Manulife was founded 137 years ago. Today we provide financial services to 35 million customers around the world, including seven million Canadians. Financial services are one of Canada's most important export categories. We are proud not only of our Canadian heritage, but also of our role in shaping Canada's impact on the largest growing population in the world, the Indo-Pacific, where we have had a presence for 125 years.

Manulife has been providing financial services in Hong Kong since 1898. We currently have 2.5 million customers there and 2,470 employees.

We're here today to talk about pensions. A pension is a long-term product. Pensions are designed to ensure that people fund their retirement. Almost all pension systems, including pensions in Canada and in the United States, restrict individuals from accessing their pension money before retirement age. This is done to ensure that the funds are available for retirement. Hong Kong pensions, like ours here at home, are similarly restricted.

In 1995, Hong Kong passed legislation to require most workers to have a pension. These pensions, called MPF, were launched in 2000, and Manulife was one of the first companies to offer these pension plans to workers. Currently, there are 13 MPF trustees, including Manulife, that offer 27 MPF plans to about 4.5 million members and 330,000 participating employers.

The pension laws in Hong Kong allow for pensions to be withdrawn prior to the age of 65 only in specific circumstances set out in legislation, including early retirement after the age of 60, permanent departure from Hong Kong, total incapacity, terminal illness, small balance or death.

To unlock their pension due to a permanent departure from Hong Kong, a customer must provide evidence, which includes documents showing that they have obtained a right to permanently reside in a jurisdiction outside of Hong Kong. For Hong Kong pension holders moving to Canada, this means providing evidence that they have been granted permanent residency or have Canadian citizenship. Once we receive Canadian government-authorized evidence of permanent residence status or citizenship and have satisfied all the requirements, Manulife's MPF operations in Hong Kong can process the application for early unlocking of the pension.

For total clarity, Manulife does not and is not authorized to waive the residency or citizenship requirement to unlock the pension for Hong Kong workers.

From 2021 to 2023, Manulife received about 4,650 requests from customers requesting that pension funds be unlocked for reasons of permanent departure from Hong Kong to Canada. Manulife was able to process applications on the grounds of permanent departure for 3,750 applicants who moved to Canada. We were unable to process applications from about 900 customers for a variety of reasons, including insufficient documentation, forms filled out incorrectly or having previously unlocked an MPF pension.

In offering life insurance and pension products, Manulife makes a long-term commitment to its customers for their financial security. We abide by our contracts in accordance with relevant laws. Our commitments span decades, and our responsibility to honour our obligations to our customers has been at the core of our business for 137 years.

We are proud that 35 million customers around the world have chosen Manulife to help them save for retirement and protect their families with life and health insurance.

Thank you very much. I would be happy to try to answer your questions.

[The Chair, Liberal, Sukh Dhaliwal]

Thank you, Ms. Greenwood.

Now I will go to the honourable members.

Honourable members, in the beginning, if you can point out who your question is for, that will help.

We will start with my dear friend, Mr. McLean.

You have six minutes.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Chair, and thank you to both representatives of financial institutions who are here today. We appreciate your comments. Your comments do differ greatly from the figures that have been provided to us, so I'm going to ask you some pointed questions about how you're arriving at your numbers.

The numbers we see coming out are predicated on the fact that, of course, there is this issue since 2021, with the Hong Kong Special Administrative Region saying that people leaving Hong Kong on a British national overseas passport were not eligible to take their mandatory provident fund scheme deposits with them. Has your policy changed since 2021?

I'll ask Madam Hewitt first of all, please.

[Laura Hewitt]

There are very clear criteria articulated for the early departure, as I outlined in my opening remarks. They include evidence of the ability to permanently depart or indefinitely depart Hong Kong. That has been true since before 2021, and it remains true today. I think that our numbers, including, as I shared, the 97.5% approval rate for applications, and the approval of all eligible Canadians and Canadian permanent residents, shows that we continue to give access to those funds for those who are eligible for the early departure stream.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, and I respect that you're the trustee for these individuals, not for any government.

Your two firms are the most stringent about turning down the actual applications that come in through the British national overseas passport, and the data we have seen shows that you turn down about 90% of them in that respect. The reason you turn it down, as recognized when you decline it, is that the BNO visa is not recognized as a valid document. Is that the case?

I ask because it does differ strongly from the numbers you presented, Ms. Hewitt.

[Laura Hewitt]

As indicated in the numbers I shared, we are approving all eligible Canadian permanent residents and Canadian citizens. The BNO passport is not sufficient proof of ability to permanently reside outside of Hong Kong, but once those folks have their eligible documentation in terms of permanent residency or citizenship, whether that be for Canada or another jurisdiction, then, as our record shows, we will approve those applications as soon as they meet the eligibility.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

They're not eligible if they come to Canada on a BNO passport. After they gain permanent residency in Canada, are they then eligible, even though they came over on a BNO passport?

[Laura Hewitt]

Yes, they are eligible once they have Canadian permanent residency, and as our numbers have shown, we are approving all of those applications. The two examples that I shared of Canadian permanent residents who have been declined by Sun Life since 2021 were for missing or incomplete paperwork, and those folks are able to reapply. We've actually had instances—

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

Our information shows that when Hong Kongers come over to Canada on the BNO passport and then become permanent residents of Canada, it's still indicated on their permanent residency card that they came over on the BNO, and then they're actually turned down to move over the funds that are provided from the mandatory provident fund. Is that correct?

[Laura Hewitt]

I can speak only on behalf of Sun Life. The permanent residency is sufficient proof of ability to permanently depart, and so we are approving those applications regardless of which passport they are using. We proactively ask them for their Hong Kong ID cards, and we will continue to approve those applications.

[Greg McLean, Conservative, Calgary Centre, AB]

I am going to ask the same question of Ms. Greenwood.

Ms. Greenwood, do you hold back any of the funds allocated because the person comes in on the BNO passport before they are a Canadian permanent resident?

[MaryScott Greenwood]

We do not decline to process an application for reasons of the BNO visa or passport. That is not one of the reasons. The issue is really whether or not an individual has the right to permanently reside in Canada or elsewhere. Permanent residency evidence or citizenship is what they are able to use in support of their application for the early withdrawal of their MPF pension fund.

[Greg McLean, Conservative, Calgary Centre, AB]

We have a great discrepancy of information here, because, according to the information we were provided by the researchers at Hong Kong Watch, your two Canadian companies with subsidiaries in Hong Kong are sitting at about $3.7 billion Canadian of pension assets that belong to Hong Kongers, some of whom are discouraged from applying because of the record. What we see sometimes is a 90% decline in this. You're saying that the numbers that you have are far different from the numbers that were being provided by research organizations.

I'll go to Ms. Hewitt, first of all.

[Laura Hewitt]

Again, I'd like to confirm that we are approving those applications, so for those individuals who are eligible, we hope our numbers today give them comfort and assure the committee that we are approving eligible applications and—

[Greg McLean, Conservative, Calgary Centre, AB]

Just hold on. Madam Hewitt, you keep saying “eligible”, and if you don't mind my saying so, I think it might be a crutch. Okay, yes, “eligible”...but only 10% are actually eligible. I'm trying to square the numbers between what you've given and what we've been provided with previously.

[The Chair, Liberal, Sukh Dhaliwal]

The time is up.

Madam Hewitt, please give a quick answer.

[Laura Hewitt]

Those who are eligible.... I'm just referring to the criteria for proof of early permanent departure, proof that they are able to permanently reside outside of Canada. A Canadian permanent residency card or Canadian citizenship are both examples of eligibility. Just to confirm, we have approved 97.5% of all applications, including all Canadians, with the exception of those two I mentioned, who had incorrectly completed paperwork.

[The Chair, Liberal, Sukh Dhaliwal]

Thank you very much.

Now, before I go to Mr. El-Khoury, my friend, I welcome Mr. Blois to this committee.

Now, Mr. El-Khoury, my friend, you have six minutes.

[Fayçal El-Khoury, Liberal, Laval—Les Îles, QC]

Thank you, Mr. Chair.

Welcome, witnesses.

My first question is addressed to both, in reality, Ms. Greenwood and Ms. Hewitt. The U.K. government issues “British national (overseas)”, or BNO, status to Hong Kong residents. Have Manulife and Sun Life refused to recognize BNO status, in line with the Chinese government's current position? Can you tell this community why you don't recognize this status?

[MaryScott Greenwood]

A BNO visa or passport does not convey the right, in Canada, to permanently reside in Canada. That's a decision of the Canadian government, actually, so it is, therefore, not used to support an application for early withdrawal of MPF pension funds. There are a number of criteria that are acceptable, which.... I'm happy to go through the steps.

Just to let the honourable member know, from 2021-23 our operations in Hong Kong received 4,650 requests for early withdrawal for reason of permanent departure to Canada, and we were able to process these requests for 3,750 applicants. There were 160 customers who did not provide sufficient evidence of the right to permanently reside in Canada—that could have been a student visa or some other form of paperwork. For the remaining customers we weren't able to process, it would have been another documentation or administration issue: a mismatched signature, or perhaps they had already previously withdrawn their MPF early.

However, I will let the committee know that there's a process to reapply, so from the point of view of the trustee we abide by the laws and the regulations that are set forth in every single jurisdiction in which we operate around the world. They are similar in Canada and the United States, and we apply those laws faithfully. The question of permanent residency and citizenship is, of course, one for governments to determine.

[Laura Hewitt]

As my colleague noted, there are the clear steps that I outlined for early withdrawal. I can speak to Sun Life's position, which is that we continue to approve and have approved 97.5% of all applications we have received for early withdrawal. Those include the Canadians who have Canadian citizenship and Canadian permanent residency, which are both proof of permanent departure that we're able to accept for permanent withdrawal of the MPF funds.

[Fayçal El-Khoury, Liberal, Laval—Les Îles, QC]

Thank you.

Madam Hewitt, what challenges have your respective insurance agencies had in providing pension benefits to Hong Kongers in Canada who have made claims?