Petition 441-01774

Petition details

Petition to the Government of Canada

WHEREAS

The United Kingdom (UK) is the only OECD country to discriminate based on country of residence for state pension indexation. UK state pension recipients in many countries enjoy annual indexation, while recipients in others receive an amount which is "frozen" at the same level as when it is first received - i.e. a pension which is never indexed to provide an annual cost of living increase;
This policy is arbitrarily applied. For example, the 127,000 UK state pension recipients in Canada are "frozen", while the 128,000 recipients in the USA are "unfrozen" and receive annual indexation. Other "unfrozen" countries include Turkey, Israel, The Philippines, and all countries in the European Union;
In contrast, the Canada Pension Plan (CPP) is indexed for inflation wherever the recipient lives in the world;
Over 91% of "frozen" pensioners live in Commonwealth Countries. Canada is a Founding Member of the Commonwealth, and both the Canadian and Commonwealth Charters of Rights are committed to equality and non-discrimination;
This policy is estimated to cost Canada around $490 million each year, and results in many Canadian pensioners living in poverty;
The UK has repeatedly rejected requests from Canada over the years for a new Social Security Agreement covering pension indexation. In the past three years the UK has snubbed seven such requests, and shows no indication of changing this stance going forward; and
A protocol on Social Security Coordination, guaranteeing pension indexation, was agreed by the UK within the post-Brexit UK-EU Trade and Cooperation Agreement. Canada and the UK are currently negotiating a Trade Agreement. Canada has raised pension indexation twice in these talks, only to be immediately dismissed by the UK.

THEREFORE:

We, the undersigned citizens and permanent residents of Canada, request the Government of Canada to ensure that the current Canada-UK trade negotiations result in the "unfreezing" of UK state pensions paid to Canadian recipients.

Government response tabled

Response by the Minister of Labour and Seniors

Signed by (Minister or Parliamentary Secretary): Terry Sheehan

Under UK law, UK State Pensions are paid anywhere in the world. For many UK pensioners living in countries outside the UK, including in Canada, pensions are not adjusted for increases in the cost of living. Pensions are paid at the same rate as when pensioners became entitled, or the date they left the UK if they were already pensioners.

Over the years, the Government of Canada has sought to address this issue with the UK, including by proposing that the two countries negotiate a comprehensive social security agreement (SSA) that would provide for the indexation of UK pensions. To date, the UK has maintained its long-standing position that it cannot consider the indexation of UK pensions paid into Canada.

The UK policy of non-indexation is codified in UK domestic law. A bilateral agreement with Canada is not required if the UK chooses to pay indexed pensions into Canada.

In 2020, the British Secretariat of the All-Party Parliamentary Group (APPG) on Frozen British Pensions launched an inquiry regarding the impact of the UK Government’s approach to UK State Pensions paid to UK pensioners living abroad. The final report was released in December 2020. The Government of Canada presented a submission on the issue regarding the non-indexation of UK pensions paid in Canada, for the APPG’s consideration. The submission is consistent with Canada’s position of support for UK pensioners living in Canada.

In November 2020, Employment and Social Development Canada officials wrote to the UK Government’s Department for Work and Pensions, seeking their interest in concluding a comprehensive SSA between Canada and the UK. UK officials declined the request, but noted they would continue to consider this matter carefully.

In March 2021, motions were presented in both the House of Commons in Canada and the UK regarding the UK’s non-indexation policy, urging the UK to negotiate a SSA with Canada that would allow for the indexation of pensions. This showcases the continued support to resolve this long-standing issue.

In June 2021, the Minister of Seniors, in her capacity as the Minister responsible for concluding SSAs on behalf of the Government of Canada, sent a letter to the UK Secretary of State for the Department for Work and Pensions, to formally request the conclusion of a comprehensive SSA between Canada and the UK, which would provide for the indexation of UK pensions. No response was received from the UK Government.

In April 2022, the Minister of Seniors met with the British High Commissioner to Canada, to reiterate Canada’s longstanding position that UK pensioners who live in Canada should be recognized for the contributions they have made to society and should be treated equally, regardless of where they live. The British High Commissioner re-confirmed that the UK Government had no plans to change its current policy.

In June and October 2022, the Minister of Seniors wrote to the UK Secretary of State for the Department for Work and Pensions to reiterate Canada’s request to conclude a comprehensive bilateral SSA that would provide for the eligibility of benefits and the payment of indexed UK pensions. The UK Minister for Pensions and Financial Inclusion responded to the letter of June 2022, re-confirming that the UK Government had no plans to change its current policy. No response was received from the UK Government to the letter of October 2022.

In April 2023, the Minister of Labour, met with the UK Minister for Employment. The Minister of Labour raised the issue of the non-indexation of UK pensions paid in Canada. The UK Minister for Employment noted the concern of the Minister, however, he re-confirmed that the UK Government has no plans to change its current policy.

Also in April 2023, the Minister of Seniors together with the Minister of International Trade, Export Promotion, Small Business and Economic Development, wrote to the UK Secretary of State for the Department for Business and Trade, requesting her assistance in encouraging the UK government to resolve this issue. To date, no response has been received from the UK Government.

Negotiations towards a comprehensive Canada-UK Free Trade Agreement are focused on advancing specific trade-related issues. Canada’s negotiating objectives were tabled in Parliament in 2022 and were informed by extensive public consultations across Canada.

The Government of Canada will continue to raise this issue with the UK through various channels, where appropriate.

Response by the Minister of Foreign Affairs

Signed by (Minister or Parliamentary Secretary): Rob Oliphant