Mr. Speaker, I commend the member for Churchill for bringing this to our attention today. The motion states:
That, in the opinion of this House, the government should amend the definition of “pensionable employment” in the Canada pension plan to include worker's compensation payments.
I want to bring to the House's attention a few problems and questions that this would raise. A major problem would be the precedent that it would set if the motion were to be enshrined in legislation, that is, accepting that insurance payments constitute income. By accepting the premise that insurance payments are income it would cause a number questions to be raised.
First, where do we draw the line? There are many people who are on monthly disability insurances, both provincial and federal as well as private insurance payments. Would people receiving CPP disability have it considered as income as well? That seems to be a problem.
The motivation for this motion comes from the fact that CPP does not collect premiums from people receiving provincial workers' compensation benefits. The result is that individuals injured on the job and receiving WCP for an extended period of time would see their CPP pension decrease at retirement since they are unable to contribute while injured.
The federal and provincial governments have been reluctant to implement this change as it would increase the CPP liability without a revenue generating mechanism to cover the increased cost. This raises a couple of other questions at that point.
There is the question of who would mandate that employees pay 4.95% of their disability cheque. It would be a political nightmare. Presumably, the CPP would be expected not to do this, but simply to take this on as an additional cost with no premium revenue to help bear it. It would make the CPP even less sustainable.
To keep the CPP sustainable both the employer and the employee need to pay 4.95% of that employee's income, or nearly 10%. Who would pay the employer's half of that income? That is also a question that has to be asked.
This measure could leave CPP recipients who were injured on the job with more money at retirement. This would lessen of course the need for dependence on family members or reliance on other social programs. There are, however, some other problems that would favour those close to retirement at the expense of current and future contributors or younger relatives who might be left paying more of the bill.
There are also some provisions already given in the CPP that allow for the deduction of the lowest earning years. Individuals can take 15% of the lowest years of their contributory period off their record and thus keep their average up.
The Canada pension plan calculations include both how much and how long people have contributed. However, to protect a person some parts of the contributory period can be dropped and these periods include if a person stops working or earnings become lower while raising children under the age of seven, or if there are low earning months after the age of 65, or any month a person would be eligible for a Canada pension plan disability pension. So, there are provisions already in the plan to average out the low years.
The Canadian Alliance highly values retirement security and that is a vital element of later independence. We believe the government would always have to honour obligations and fund the current programs to retired Canadians and those close to retirement. We do not want to see that dropped, but we also believe that we must maintain support for low income seniors.
However, we believe in providing future retirees with greater choice. There could be choices made between simply the mandatory government plan or a mandatory personal plan. We also believe in eliminating the foreign investment restriction for retirement investments in order to allow individuals a greater opportunity to save for their own retirement and make some of the decisions on their own. We believe, then, in giving Canadians greater control over their own affairs.
A number of questions have been raised. Of course there is one that I guess a lot of people would raise as far as giving people freedom of choice is concerned in order to be able to prepare for their own retirement. We might raise this question. If the candidate for coronation can register ships in foreign domains, then why should ordinary Canadians not be allowed to have greater foreign investments or greater private investments for their own retirement? There are a number of questions.
The CPP benefits are modest in the first place and it would seem harsh to deny a few extra dollars to someone who had the misfortune of getting injured at work and was prohibited from contributing to the plan. However, there is another question. Would that be harsh and detrimental or would it in fact be more important to leave that worker's compensation payments fully in the worker's hands to help meet immediate and pressing needs?
I remember my first job in Canada. In the first week, I was inadvertently injured on the job. As the weeks went on compensation payments came to me and they were very much appreciated, but I did not get rich on them and I was glad to keep it all without losing some of it.
At first glance, it would appear that disallowing workers' compensation benefits as income for CPP contributions would constitute a penalty to future recipients. However, to consider these benefits as income would incur a large liability on the already unsustainable CPP program and it would create, as I have already mentioned, a number of other complex issues.
I bring these things to the attention of the House. We need to weigh all sides as we make up our minds on how to vote on the member's motion.