Debates of June 21st, 1995

Government Organization Act (Federal Agencies)

[The Deputy Speaker]

Pursuant to Standing Order 76.1(8) a recorded division on the motion stands deferred. The recorded division will also apply to Motion No. 11.

Old Age Security Act

[Allan Rock, Liberal, for the Minister of Human Resources Development]

moved that Bill C-54, an act to amend the Old Age Security Act, the Canada Pension Plan, the Children's Special Allowances Act and the Unemployment Insurance Act, be read the third time and passed.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I rise on a point of order. I think you would find in the interests of expediting the business of the House that the time between now and 11.30 p.m. could be divided among the three parties in the House.

[The Deputy Speaker]

Is there unanimous consent?

[Some hon. members]

Agreed.

[Francis Leblanc, Liberal, Cape Breton Highlands—Canso, NS]

Mr. Speaker, I am pleased to begin third reading debate on Bill C-54, an act to amend the Old Age Security Act, the Canada Pension Plan, the Children's Allowance Act and the Unemployment Insurance Act.

I am pleased to do so for two reasons. First, as chair of the House of Commons committee on human resources development I had the opportunity to review the legislation in detail when it went through clause by clause consideration. I want to thank the members of that committee on all sides of the House for their careful work in examining the provisions of this sometimes complex and very technical bill.

Second, I thank the officials of the human resources development department, the income security programs division, for their patience in explaining the complex, technical aspects of these programs.

Particularly I thank those groups who came on short notice and made representations to the committee on behalf of seniors and Canadians with disabilities who are most affected by this legislation. I especially to thank the Council of Canadians with disabilities and the one voice, the Canadian Seniors Network, for their valuable contribution to the work of the committee studying Bill C-54.

Second, I am pleased to speak to the legislation as a regular member of Parliament for whom sorting out difficulties with the various components of the Canada pension system is an important part of my regular constituency work.

By and large these difficulties are of two types. First of all, it is financial, questions about the adequacy and the timeliness of benefits, conditions for entitlement, sudden or unexplained

changes to the level of benefits and other matters of that sort that bother the seniors or those who are dependent on this stream of income for their income security.

The second category of difficulties with elements of the Canadian pension system that members of Parliament are frequently called on to deal with are administrative in nature: the mechanisms for applying for benefits, rules pertaining to the delegation, the splitting or the reassignment of pension benefits or credits, appeals dealing with errors and overpayments sometimes which are caused by the bureaucracy, and finally, matters of security and confidentiality.

It is primarily this latter set of concerns that are addressed by Bill C-54. The bill improves services to clients. It allows for improved co-ordination and more efficient program administration and service delivery. It increases the consistency between the old age security and Canada pension plan programs. It also reduces administrative costs. It minimizes duplication and paper burden to clients and various departments, and it will also help members of Parliament to better assist their constituents.

According to estimates by the Department of Human Resources Development, the proposed amendments to Bill C-54 would benefit about 1.4 million senior citizens with no net cost to the taxpayer. Expected savings from the amendments will total approximately $10 million annually, largely as a result of more efficient program administration.

I would like to go through in the time that is available some of the aspects of this legislation for the House this evening. For nearly 1.4 million seniors, many of whom are women, at present they must reapply annually to receive the guaranteed income supplement and spouse's allowance benefits. At that time they must make a statement of income even though the income of many does not change significantly from year to year, being limited to old age security and perhaps Canada pension plan benefits.

Payments for the new fiscal year cannot be made until the application is received and approved. As a result, each April up to 100,000 low and middle income pensioners may suffer hardship when benefits are delayed due to late application or a need to verify the information on the application.

This legislation allows the Minister of Human Resources Development to waive the requirement for annual renewal applications for GIS and SPA benefits for any month or months in the following year. The proposed sections of the bill would require the minister in situations where he or she had waived the requirement for an application to give written notice to the pensioner when a subsequent application was required.

The minister would have to meet certain time limits in this regard. These changes would avoid an interruption in benefits for those pensioners and would improve service and administration. There might also be implications for benefit overpayments and underpayments.

Generally what this legislation does is eliminate the need for inconvenient and costly reapplication when that is not necessary because for the most part the information is already in the possession of the department.

The second category has to do with reconsiderations and appeals. Clause 16 of the legislation allows a person to satisfy, with a decision or a determination relating to the payment or the amount of the benefit, to make a request to the minister within certain time limits for reconsideration of the decision, after which the minister could confirm or vary it.

A person dissatisfied with the minister's decision could appeal it to the Canada pension plan, old age security review tribunal established under the Canada pension plan. Where the basis of the appeal was an incorrect ministerial decision about the income of the applicant, the beneficiary or spouse of either of these, the appeal can be referred to the Tax Court of Canada. This legislation thereby facilitates portions of the appeal process.

Another category is retroactive payments. Clients often apply for OAS-CPP retirement benefits at the same time. If application is made after age 65 retroactive old age security benefit payments are made but the Canada pension plan provides for an actuarial increase in the value of the benefit. The result is that benefits that begin to be paid after age 65 are treated differently by the two programs.

With clause 3 of the bill, the section on the Old Age Security Act, section 2(a), periods of retroactive payments to the two programs would be harmonized. The period would be set at a maximum of one year, a reduction from the present maximum of five years in the case of old age security benefits. In the case of retroactive payments a streamlining takes place as a result of the bill.

In this area the council on disabilities made an important contribution to the legislation which I acknowledge. In this case the council led the standing committee to adopt an amendment to the bill which provides for retroactive, early retirement benefits for some recipients of CPP disability benefits. The provision is intended to mitigate to some extent the loss of income for a person no longer eligible for a disability benefit and to assist that person to reduce the amount of overpayment which must be returned to the program. This provision was always intended to be optional for the client.

The government never intended to reduce the options available to clients but the council pointed out the wording of this provision in Bill C-54 would be construed as requiring the client to take the early retirement pension.

To address the concern raised by the council, the government moved an amendment accepted in the standing committee. The government listened to the concerns expressed by the council and these concerns are now reflected in the revised wording of this provision of Bill C-54.

There were numerous other areas in which amendments were made to the bill in response to the input by these groups representing Canadians with disabilities and seniors affected by this legislation.

The bill, which streamlines in many ways the administration of this legislation, is vital to seniors and to those people dependent on these programs because of the complexity this legislation by necessity has to be designed to accommodate in so many different circumstances. Seniors, many of whom live in isolated communities, cannot afford to have their payments disrupted by administrative processes very often far beyond their understanding.

By working to simplify the legislation and streamline the process for applying, for reconsidering, for splitting, for delegating benefits that apply to seniors and to persons with disabilities through the Canadian pension system, we are helping Canadians facilitate access to this very important aspect of the Canadian safety net.

That is the nature of the changes in Bill C-54. They reflect the government's concern for making this vital component of the Canadian social security system accessible to those who depend on it for their livelihood, for their basic fundamental income security and in that respect enabling seniors in Canada to have a greater assurance and confidence that as they move into their old age they will be able to count on secure and regular support from the Canadian government.

[The Deputy Speaker]

According to our agreement, the hon. member for Argenteuil-Papineau now has the floor for 12 minutes.

[Maurice Dumas, Bloc, Argenteuil—Papineau, QC]

Mr. Speaker, obviously, I had prepared a 40 minute speech, but given the requests of our whips, I agreed to cut down my time on the floor.

I would like to speak to the House regarding Bill C-54 and I will focus on the act to amend the Old Age Security Act and the Canada Pension Plan. The official opposition proposed several amendments to this bill in order to protect seniors from injustice.

First, in Motion No. 1 we proposed the following amendments. In summary, this amendment by the Bloc Quebecois aimed to keep the appeals processes for the Canada pension plan and the old age security program separate.

What was the answer we received on May 8 to this first amendment we proposed regarding Bill C-54? The Minister of Human Resources Development went on a violent, undignified and even indecent rampage, calling our amendments bizarre, incomprehensible and absurd. According to the minister, I have a twisted mind and I take a perverted pleasure in complicating the lives of seniors.

The minister wound up with the comment that our amendments were the strangest, most bizarre and most incomprehensible amendments that he has seen in a long time in the House. He also mentioned that if I had truly understood Bill C-54, I would not have proposed such absurd amendments. Unfortunately for the Minister of Human Resources Development, he confused Motion No. 2 with subclause 2 of Motion No. 1.

Bill C-54 integrates the appeals process for the Canada pension plan with that of the old age security program. On May 8, when this amendment was introduced in this House, I reported what the attorney general had said: "The two-tiered appeal process for Old Age Security permits the satisfactory settlement of the few cases there are. The process is simple, fast and informal, and cases are heard in the regions where the appellants live".

Furthermore, the auditor general openly criticized the three-tiered appeals process of the Canada pension plan. So, why propose to integrate the two appeals processes and to use the process under the Canada pension plan, which the auditor general deems to be deficient? Clearly, they are not simplifying the appeals process. In what way will this improve client services?

Lastly, the Pension Appeals Board was authorized to appoint temporary members. At the present time, someone who is not satisfied with a decision made under the Canada Assistance Plan has the right to appeal at three different levels.

First level appeals are to the Minister of Human Resources Development. Second level appeals are heard by review tribunals established under the Act. Finally, third level appeals are heard by the Pension Appeals Board. Why change an appeal process which, according to the Auditor General, works well to replace it with a more complicated one?

The Bloc Quebecois disagrees with this streamlining of appeals under the Old Age Security Act and the Canada Pension Plan because it is not an improvement.

Let us not forget the importance of this amendment since statistics reveal that in 1993-94, there were 23,046 first level appeals, an increase of 0.5 per cent compared to the previous year. Of that number, 83 per cent concern disability benefits. A total of 27,077 appeals were processed during those years.

On Motions Nos. 4, 13 and 15 I supported my colleague for Mercier since the Bloc Quebecois cannot support the provisions of Bill C-54 intended to change access to certain information since the government can increase the number of departments, agencies or even individuals that will have access to information for the purpose of implementing the acts modified by this bill. Agencies having access to information according to the previous act were: the Departments of Revenue, Finance, Supply and Services, Employment and Immigration Commission, Statistics Canada and provincial authorities.

These agencies can have access to the information as long as it deals solely with the entitlement of beneficiaries or the amount of benefits, or if their disclosure is essential to the legislation's application.

When I supported these amendments, I said that we have to be extremely careful when giving personal information on senior citizens since it could be used for other purposes. We have to protect our senior citizens against potential abuse. The government did not prove that disclosing this privileged information was essential and necessary.

I said also that governments are becoming more and more intrusive. This government has the gall to claim that it is a good thing to include Canada Post on the ground that, through the use of new techniques, it could help accelerate the processing of pension cheques.

We noticed time and time again that the government cannot deal with its own administrative problems, and we recently had the best possible example of that when some seniors had trouble getting their income supplement cheques. We cannot condone government intrusion in the private lives of senior citizens and citizens in general.

This major change, even if used in accordance with the present provisions of the Privacy Act, is an intrusion that the Bloc Quebecois cannot accept. Moreover, we proposed in Motions Nos. 5 and 6, amendments which did not seek to remove Clause 23 entirely, but to amend it. For example, they would have kept the one year delay before collecting overpayments and forced the minister to remit the debt in the cases mentioned. For example, in section 37 the one-year statute of limitation is maintained.

The government is incapable of dealing with these matters within a reasonable time frame. The abolition of this clause, which accordingly does away with the limitation or claim on the overpayment, is an obvious example of the government's loss of control.

I repeat here the remarks of the auditor general in his report to the effect that pension fund overpayments amount to between $120 million and $220 million a year. He said: "Past efforts to prevent and detect overpayments have been minimal and largely ineffective". I am quoting the auditor general's report for 1993, at page 486.

The auditor general also indicated that over 90 per cent of appeals concerned applications for disability benefits under the Canada Pension Plan.

Does the provision that would permit the minister to stay benefits during the appeal process together with the increase in the number of unjustified appeals by the department not in fact cover up a shameful way to reduce overpayments?

Clearly, at some point or other, many old people will be faced with administrative errors by the government. They may have received money they were not entitled to, without necessarily realizing it. How can seniors repay a significant amount all of a sudden and budget accordingly?

That is why the Bloc Quebecois proposed, in order to remedy this situation, that the one year limitation on overpayments that are not the result of fraudulent acts be imprescriptible so as to force the government to improve management of the program and to not unduly penalize seniors, who could have to pay back significant amounts a number of years after an error was made.

Bill C-54 provides that, in these cases, the minister may "remit". We have proposed there be no discretionary power in the above cases, to protect the interests of seniors. I have also proposed in Motion No. 12 the following amendment, which is of prime importance: "That Bill C-54 be amended by deleting Clause 38", which reads as follows:

"Where a decision is made by a Review Tribunal or the Pension Appeals Board in respect of a benefit, the Minister may stay payment of the benefit until the latest of [three dates]".

The amendment proposed by the Bloc Quebecois, the official opposition, is intended to not allow the government to stay payments during appeals, because these appeals are the result of the government's inability to manage these programs. I assume the Minister of Human Resources Development also finds this amendment bizarre. How do we tell seniors that they may enjoy their rights, but are not entitled to receive the money they need to live on during the proceedings?

I made a presentation on seniors' incomes when I introduced my motion on May 8. Clearly they are not rich. I conclude here with the question, why must we insist on reducing the deficit on the backs of the most disadvantaged, on the backs of seniors? I repeat my question to the Minister of Human Resources Development.

[Ed Harper, Reform, Simcoe Centre, ON]

Mr. Speaker, it is a pleasure for me to rise in the House tonight to speak to Bill C-54, an act to amend several social programs, including the Canada pension plan.

Tonight I would like to speak in some detail about the Canada pension plan, the amendments proposed to it in the bill, and more generally about the policy direction of the Liberal government and the minister on CPP.

The bill is nothing more than administrative housekeeping. It is designed to improve minor flaws in the current system, but it ignores, as the government has ignored, the very severe problems our social programs face.

The Canada pension plan is a nightmare. The unfunded liabilities of the plan rival our national debt. Those liabilities were estimated to be $491 billion in 1993. That is $491 billion that must either be taxed from future generations, our children and our grandchildren, or it may mean that seniors will have to forgo some of their benefits. Neither scenario is pleasant.

The Superintendent of Financial Institutions reported in February that CPP will be out of funds in just 20 years. Realistically, we have very little time to act to correct the situation. We have been here a year and a half, yet the Liberal government has offered us only a bill written by the bureaucracy for the bureaucracy.

In the past year CPP ran its first deficit, seemingly a small amount in comparison to the many billions of dollars of benefits paid out. The government dipped into the contingency fund for $650 million.

Suddenly the bureaucracy woke up. Even though the contingency fund is over $40 billion, the not so astute central planners had invested all the funds in 20-year loans to the provinces with low interest. As anyone can see, this means that only approximately $2 billion is actually liquid in any given year. Therefore, last year panic set in as human resources development bureaucrats suddenly realized that one-third of the available cash in the contingency fund was going to be used up meeting benefit obligations.

The story does not end here, however. Benefit payouts are projected to increase faster than premiums can be collected. In the next few years we may face a crisis as deficits climb past the point of sustainability. Change must come quickly if we are to preserve the integrity of the social programs for those who depend on them.

Many Canadians are confused about the reasons the Canada pension plan is not financially sustainable. It is really quite simple. Unlike private pension plans or other savings plans, the premiums paid are not invested and then returned to the individual with interest upon retirement. Rather, the premiums paid are used to fund current beneficiaries, with a small portion going to the contingency fund. This would not be a totally unreasonable situation if the demographics of the population never changed. Canada has an aging population. An increasingly higher percentage of the population depends on CPP for their retirement. Correspondingly, a lower percentage of Canadians are left in the workforce to fund the retirees. This situation will only worsen as the baby boom generation reaches retirement age.

If members think this plan sounds irresponsible, I agree with them. I imagine that most members on that side of the House have no problem with this. After all, the Liberals have done exactly the same thing with their budget. They overspend today, taking on debt that future generations will have to pay back. They force future generations to pay for this generation. Some might even call this financial abuse of children.

The Canada pension plan is no different. Today's working mothers and fathers are directly subsidizing today's retirees, and our children and grandchildren will be forced to subsidize us. Based on the current projections there will be no CPP for my children and grandchildren. It will only exist for this self-serving generation. Serious reforms are necessary and are needed immediately to fix this problem. However, we have a lack of leadership from this government.

There are some good improvements proposed in Bill C-54 for the Canada pension plan. There is some streamlining of the appeals process, a possible reduction in overpayments to recipients. There is simplification in the delegation of authority, simplification of the division, reinstatement and assignment of benefits. These are good and worthy benefits to be approved by this House. It will help Canadians and reduce a few costs, but it fails to deal with the most important aspect of pension reform. It fails to deal with the imminent bankruptcy of the system.

What good are administrative reforms like those in Bill C-54 if the whole system goes bankrupt? It does not make any difference how quickly a pensioner receives his cheque if the amount is zero dollars and zero cents. The government of the day would probably wish its system were not quite so efficient if it is going to be sending out cheques like that. This bill represents a baby step when a giant leap was needed.

The priority of this government should be to put CPP on a firm financial footing. A proposal the government seems to keep floating is that premiums should continually increase to fund deficits in the plan. This is plainly unacceptable to a large majority of Canadians. It is no different from increasing taxes, and Canadians have said they are taxed to the limit.

Another suggestion is to cut benefits. There may be some savings to be found in the myriad of benefits paid out, as I will point out in a minute, but these savings will not fundamentally alter the main problem, which is that the plan is actuarily unsound.

We plainly cannot cut benefits to those retirees who currently depend on them, and it would be cruel to cut them significantly for those who are about to retire. The only persons we can cut future benefits for are those who have enough time left before retirement to make alternate arrangements.

I would like to tell of two different constituents of mine who have come to me with stories of problems they have experienced with CPP. The first constituent complained to me about waste in the survivors benefits category, commonly known as widows and orphans benefits. My constituent was concerned that after marrying a widowed woman and adopting her two children the survivors benefits continued to flow. He had to pursue his case through the department all the way up to the minister to get the benefits cut off.

Why is this unacceptable situation continuing to the present day? Clearly if one is no longer a widow or an orphan they should no longer collect a widow's or orphan's benefit. Savings to be found in this area may be in the millions of dollars.

Another constituent complained to me about the overly high benefit payout she is receiving from CPP for her retirement. This constituent had paid in a grand total of $143 in premiums over her lifetime, yet is receiving monthly benefit cheques of $25. Although $25 a month or $300 a year does not seem to be an amount that will bankrupt the plan, think what overpaying many other Canadians hundreds or thousands of dollars a year does to our balances. It is unsustainable and cannot be justified. We must make the plan actuarially sound and financially stable for those who have to depend on it.

The Reform Party has promised to be a constructive alternative in Parliament, and on this issue, like most others, we have laid out our plan. We believe that our approach must be financially sustainable, fair, promote individual responsibility, and must help relieve government of its massive fiscal problems.

We believe that the registered personal savings plans coupled with registered retirement savings plans are a large part of the solution for Canada's working generation. We laid out our plan in our taxpayers' budget prior to the release of the federal budget. We detailed how Canadians would be encouraged to plan for their own retirement without government interference or financial bungling. We showed how individuals could make choices that best suit their needs and we showed how it could be done without incurring additional liabilities for the government.

Reformers demonstrated leadership in the area of pensions and the Liberals have yet to move on the issue. Yet it is the Liberals who have the power to effect the changes necessary to save these programs. If the Liberals refuse to act then I believe the Canadian people will choose leaders who will bring the needed reform, and I believe they will choose Reformers to do that job.

In closing, I want to read the comments of another member from another debate on a similar bill from the last Parliament, which only tinkered with the Canada Pension Plan and failed to effect any meaningful change. I quote:

"I simply want to use this opportunity to draw the attention of members and hopefully of the government or a future government to the fact that the reform of the pension plan system has to go beyond just tinkering, fixing some immediate problems. We may have to come to grips with a lower level of pension benefits that will be available as each generation of Canadians reaches retirement age. I would suggest that the problem is that we should be projecting the profile of what our Canadian population will look like 10, 15, 20 years down the road and designing our CPP to meet that problem so that future legislators will not have to scramble to face a much broader problem or large scale insecurity because we at the present time did not exercise our responsibility of stewardship to make sure that there would be enough of a benefit base to satisfy those needs. Similarly, I also find it of concern that the number of real problems that have been identified in the implementation and administration of the Canada Pension Plan are not being fully addressed in this bill."

The comments were made by none other than the author of this present tinkering bill, the Minister of Human Resources Development.

The leadership and changes the Canadian voters are so desperately looking for will have to wait until the next federal election, when Reform will form the government.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And more than five members having risen:

[The Deputy Speaker]

Call in the members.

And the bells having rung:

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, the table informs me we would now normally be voting on third reading of Bill C-54. However, given that most members are under the impression we will be voting first on ways and means Motion No. 29, I think you would find unanimous consent that we commence with voting on ways and means Motion No. 29 and then follow on the order and terminate with third reading stage of Bill C-54.

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

The House resumed consideration of the motion.

(The House divided on the motion, which was agreed to on the following division:)