Mr. Speaker, I am pleased to have the opportunity to discuss Bill C-362 and its 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 up 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 pension delivers about $54 billion in benefits to Canadians every year.
Bill C-362 proposes reducing the minimum residence requirement for OAS benefits from 10 years to 3 years. However, I must respectfully disagree with the hon. member for Brampton West on the premise of the 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 OAS pension is designed as a measure of income security for seniors. It recognizes their valuable contribution to Canadian society, our economy and their community over a lifetime. Unlike pension plans in most other countries, Canada offers, as part of a 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.
In Canada there are none of the restrictions about citizenship or nationality often found in other countries. To gain the right to a lifelong pension, we only ask that seniors make a reasonable contribution of 10 years to Canadian society.
A number of governments have examined the current OAS residence requirement since it was established in 1977 and have kept it intact. In fact, during the last Parliament, the Liberal Party voted against Bloc amendments that would have instituted these very changes. For the Liberals, it has only become an issue of fairness or respect for new Canadians when they no longer are in government and they no longer have to worry about the consequences of their actions.
I believe the 10 year residence requirement is sound and reasonable. It makes no distinction between immigrants who have just arrived in Canada or Canadians who return 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 OAS and who have low incomes also receive a guaranteed income supplement, designed to help Canada's poorest seniors. Once again, the 10 year rule is a reasonable compromise. It strikes a good balance between an individual's contribution to Canadian society and his or her right to receive a lifelong public pension.
This policy is a result of a long-standing dynamic conversation with Canadians. Since 1977, the residence requirement for OAS has served countless new Canadians. This program has been there for generations of immigrants who have built a new life for themselves and their children in Canada, and this government will ensure that it remains that way. Many of these immigrants came from countries that have signed social security agreements with us.
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 OAS pension by using years of residence or contribution in both countries. This means that these seniors are able to receive benefits from both Canada and their countries 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 that people made to their previous country of residence and allows them to qualify for benefits in which they may not otherwise have been entitled.
Canada is continuing to negotiate agreements with countries that share comparable pension plans so 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 OAS 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 have us believe.
I find it interesting that it was the former Liberal government that fought this case in court, yet today the Liberals are claiming the opposite. Only today it has become an issue of discrimination, as far as they are concerned. As my hon. friend from Palliser pointed out a few moments ago, it was the sponsor of the bill who openly admitted that her government believed so strongly in the current model of the bill that it fought seniors' groups in the court until they ran out of money to protect this system and the changes that they now propose. The hypocrisy abounds.
It is no secret that seniors constitute the fastest growing segment in the Canadian population. With baby boomers poised to retire in record numbers, our pension costs will skyrocket in the coming years. In the next 25 years, nearly one in four Canadians will be a senior. With our rapidly aging population, relaxing the residence rule for OAS would have significant fiscal implications for Canada and the public pension program.
In fact, it is now estimated that reducing the 10 year rule for OAS to three years would cost Canadians over $700 million in combined OAS and GIS benefits in the first few years alone. In the long run, these costs would surely rise exponentially.
The government is taking the responsibility to ensure that this program remains for the generations of Canadians to come, including the children and the grandchildren of new Canadians. Canada's retirement income system is a robust, sustainable program, one that is envied around the world. It is hailed for its impact in reducing poverty among Canadian seniors and in preventing a drop in living standards after retirement.
I urge my hon. colleagues to consider these things and vote against the bill.