The nature of the Canada Pension Plan cannot be fully understood without considering its relationship with other income support and replacement programs. As Sherri Torjman has pointed out:

The design of any given program often is affected by other related programs. Moreover, changes to one part of a system often have an effect on its other components. In modifying the CPP disability benefit, there invariably will be an impact on related programs. ^[1]

Currently, Canada’s disability income system is fragmented and uncoordinated, with different programs providing different levels of income based on varying criteria unrelated to need but determined by how and where an individual became disabled.

The CPP(D) is the smaller part of the CPP benefits system. In 2001-2002, it accounted for about 15% of all CPP benefits paid out by the plan. Decisions about policies and programs for the CPP(D) have been, to a large extent, driven by the need to preserve the security of the CPP ’s retirement benefits. ^[2]

Many commentators, particularly Michael Prince of the University of Victoria, have highlighted the problems with the CPP(D) that have resulted from the low profile of the program compared to the retirement benefits portion of the CPP . Prince has pointed out that compared to recipients of Old Age Security benefits, retirement pensions or veterans’ pensions, the CPP(D)’s beneficiaries are not seen as an important political constituency. He has concluded that in government reports and academic literature on public pension policy, the CPP(D) has not received great attention.

The Canada Pension Plan is to some extent linked with private disability insurance in ways that affect the CPP(D). Although not all workers have private disability insurance purchased either through their employers or directly from an insurance company, approximately 8.6 million workers do have private disability coverage. For more information, see Sherri Torjman, Read the Fine Print, Ottawa, 2001, or Sue Lott, Background on CPP Disability and Private Insurance, April 2002. The private insurers usually require their insurees to apply for CPP(D) benefits or suffer a penalty. If someone who receives benefits from private disability insurance qualifies for the CPP(D), the CPP(D) amount is deducted from the total amount paid to that individual. The CPP was amended in 1993 to facilitate off-setting by private insurers. This “first payer” principle reduces the amount that the private insurer pays out. (It should be noted that premiums charged by private insurers reflect the fact that the CPP(D) is the first payer.) Many workers with disabilities who receive benefits from private disability insurance do not qualify for CPP(D) benefits because their disability does not leave them unable to carry out any substantially gainful employment as specified in the CPP(D). Eligibility for private insurers’ disability benefits, on the other hand, requires that an individual be unable to perform his or her own job.

There is some discrepancy among different provinces in the way that provincial workers’ compensation programs deal with CPP(D) benefits. Workers’ compensation provides benefits to those who lose employment income as a result of an accident at work. In some provinces, workers with disabilities receive both workers’ compensation and CPP(D) benefits, while other provinces deduct CPP(D) benefits from workers’ compensation payments.

Provincial social assistance or welfare form another set of programs with links to the CPP(D). To begin with, many people who are unable to obtain the CPP(D) apply for social assistance. At the same time, in order to contain the costs of their social assistance programs, some provinces require those who are applying for welfare also to apply for the CPP(D). Some of those who move from social assistance to the CPP(D) find that their personal situation deteriorates because they lose certain "in kind" benefits (such as medical and dental care, or public transportation) that form part of an individual's overall entitlement for welfare recipients. On the other hand, some individuals who receive low CPP(D) benefits will receive a top-up from some provincial social assistance programs.

Obviously, one issue that can be addressed in the Sub-Committee’s study is to identify what are, or should be, the linkages should be among the various income programs. Who should be the first or second payer? Should CPP(D) payments be deducted from other benefits such as private disability insurance or workers’ compensation? How does it link to social assistance? What are the costs and consequences of the existing linkages? It is worth noting that Quebec is uniquely situated to manage the integration of disability income benefits — the QPP, accident insurance, workers' compensation and social assistance. The QPP even has some supervisory authority over private pension plans. Are there lessons in the way that Quebec manages these relationships and deals with the offloading of individuals from one income program to another?

The provision of disability-related supports and services, and measures to help people pay for the additional costs of disability, are not addressed by the CPP(D)’s current legislation, policies or programs.