Mr. Speaker, thank you for the opportunity to discuss Bill C-362 and the proposed amendments to the old age security program.
All Canadians can be proud of our country's retirement income system. Simply put, it is recognized as one of the best in the world and is emulated by countries looking to set an effective long term public pension system.
The old age security program, along with the Canada pension plan, provides all Canadians with a solid foundation upon which to build their retirement income. Together, Canada's public pensions deliver about $54 billion in benefits to Canadians each year.
Bill C-362 proposes reducing the minimum residence requirement for old age security benefits from ten to three years. However, I will respectfully disagree with the hon. member for Brampton West on the premise of this bill.
From a public policy perspective, the old age security program is fair and sound. It is the first tier of Canada's retirement income system, serving over four million Canadian seniors every year. The old age security pension is designed as a measure of income security for seniors. It recognizes their valuable contributions to Canadian society, our economy and their community over a lifetime.
Unlike pension plans in most countries, Canada offers, as part of its public pension system, a tier that is fully funded by general tax revenues instead of contributions. Most countries have pension schemes that require years of contributions to qualify for benefits. For example, Japan's seniors must contribute for 25 years to be eligible for a pension. From this standpoint, we can see that Canada's pension plan is exceptionally generous.
Here in Canada, there are none of the restrictions about citizenship or nationality often found in other countries. To gain the right to a lifelong public pension, we ask only that seniors make a reasonable contribution of 10 years to Canadian society.
A number of governments have examined the current old age security residence requirement since it was established in 1977 and they have kept it intact.
In fact, during the last parliament, the Liberal Party voted against the Bloc amendments that could institute these very changes. So, for the Liberals it only became an issue of fairness or respect for new Canadians when this government came to power and they no longer had to worry about the consequences of their actions.
I believe that the 10-year residence requirement is sound and it is reasonable. It makes no distinction between immigrants who have just arrived in Canada or Canadians who are returning to Canada after living abroad.
Under current rules, a person must live in Canada, after reaching the age of 18, for a total of 40 years to receive a full pension. A person must live in Canada for a minimum of 10 years to receive a partial pension.
Many seniors who qualify for old age security and who have low incomes also receive the guaranteed income supplement, GIS, designed to help Canada's poorest seniors.
Once again, a 10-year rule is a reasonable compromise. It strikes a good balance between the individual's contribution to Canadian society and his or her right to receive a lifelong public pension.
This policy is the result of a longstanding and dynamic conversation with Canadians. Since 1977, the residence requirement for old age security has served countless new Canadians. The program has been there for generations of immigrants who built a new life for themselves and their children in Canada, and this government will ensure it remains that way.
Many of these immigrants come from countries that have signed social security agreements with us, and on the world stage Canada is a leader among countries that have signed social security agreements.
To date, 50 agreements have been signed between Canada and foreign countries. Because of these reciprocal agreements, many newcomers to Canada are able to meet the 10-year residence requirement to receive the old age security pension by using years of residence or contribution in both countries. This means that these seniors may be able to receive benefits from both Canada and their country of origin.
In a nutshell, it means that people who have lived or worked abroad can meet the 10-year residence rule by adding these periods to their Canadian residence. These agreements recognize the contributions people have made in their previous country of residence and allow them to qualify for benefits to which they might not otherwise be entitled.
Canada is continuing to negotiate agreements with countries that share comparable pension systems so that we can improve the access of our growing immigrant communities to pension benefits.
The courts have also considered the residency issue that the bill raises. In two landmark cases they upheld the issue of fairness of our residence provisions for the old age security pension.
One of these legal challenges made it all the way to the Federal Court of Appeal. The 2003 ruling confirmed what most Canadians knew. The 10-year residence rule does not in any way discriminate against Canadians on the grounds of national or ethnic origin as my hon. colleague across the aisle would like us to believe.
I find it interesting that it was the former Liberal government that fought this case in court and yet today the Liberals are claiming the opposite. Today it has become an issue of discrimination and hypocrisy abounds.
It is no secret that seniors constitute the fastest growing segment of Canada's population. With baby boomers poised to retire in record numbers, our pension costs will skyrocket in years to come. In the next 25 years nearly one in four Canadians will be a senior. With our rapidly aging population, relaxing the residence rule for old age security could have significant fiscal implications to Canada and the public pension program.
In fact, it is estimated that reducing the 10-year rule for old age security to three years would cost Canadians over $700 million in combined old age security and GIS benefits in the first few years alone. In the long run these costs will surely rise exponentially.
This government has a responsibility to ensure that this program remains for the generation of Canadians to come, including the children and the grandchildren of new Canadians, and that is just what we plan on doing.
Unlike the previous government, which largely ignored seniors issues during the last 13 years in power, this government has taken swift and decisive action on the seniors file. For example, within months of being elected this government improved: seniors' well-being through increased federal representation, including significant investments in programing as well as putting in place real tax relief.
We have created a Secretary of State for Seniors. We have established a National Seniors Council to advise the government on issues of importance to older Canadians. We have committed an additional $10 million per year to the new horizons for seniors program to encourage seniors to continue their valuable contributions to their communities.
After years of being ignored by the Liberals, seniors, both new to this country and those who have been here their entire lives, can rest assured that Canada's new government is listening to them and delivering results.