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37th PARLIAMENT, 1st SESSION

Sub-Committee on the Status of Persons with Disabilities of the Standing Committee on Human Resources Development and the Status of Persons with Disabilities

EVIDENCE

CONTENTS

Tuesday, April 30, 2002

1540

The Chair (Ms. Carolyn Bennett (St. Paul's, Lib.))

The Chair

Ms. Madeleine Dalphond-Guiral

The Chair

Ms. Madeleine Dalphond-Guiral

The Chair

Ms. Madeleine Dalphond-Guiral

The Chair

Ms. Madeleine Dalphond-Guiral

The Chair

Mr. Paul Migus (Assistant Deputy Minister, Income Security Programs, Department of Human Resources Development)

1545

1550

The Chair

Mr. Werner Schmidt (Kelowna, Canadian Alliance)

Mr. Paul Migus

Mr. Werner Schmidt

Mr. Paul Migus

The Chair

Mr. Werner Schmidt

The Chair

Mr. Werner Schmidt

Mr. Paul Migus

1555

The Chair

Mr. Paul Migus

The Chair

Ms. Nancy Lawand (Director, Canada Pension Plan Program Policy, Department of Human Resources Development)

The Chair

Ms. Nancy Lawand

Mr. Paul Migus

Mr. Werner Schmidt

Mr. Paul Migus

The Chair

Mr. Werner Schmidt

Mr. Doug Taylor (Director, Disability and Reconsiderations Division, Department of Human Resources Development)

Ms. Nancy Lawand

1600

Mr. Werner Schmidt

Ms. Nancy Lawand

Mr. Werner Schmidt

Ms. Nancy Lawand

Mr. Werner Schmidt

Mr. Réal Bouchard (Director, Federal-Provincial Relations and Social Policy, Department of Finance)

Mr. Werner Schmidt

Ms. Nancy Lawand

Mr. Werner Schmidt

Mr. Réal Bouchard

Mr. Werner Schmidt

Mr. Réal Bouchard

Mr. Werner Schmidt

The Chair

Ms. Madeleine Dalphond-Guiral

Mr. Werner Schmidt

Ms. Madeleine Dalphond-Guiral

Mr. Paul Migus

Ms. Madeleine Dalphond-Guiral

Mr. Paul Migus

1605

Ms. Madeleine Dalphond-Guiral

Mr. Paul Migus

Ms. Madeleine Dalphond-Guiral

Mr. Paul Migus

Ms. Madeleine Dalphond-Guiral

The Chair

Ms. Nancy Lawand

1610

The Chair

Ms. Nancy Lawand

Ms. Madeleine Dalphond-Guiral

Nancy Lawand

Ms. Madeleine Dalphond-Guiral

Nancy Lawand

Ms. Madeleine Dalphond-Guiral

Mr. Paul Migus

Ms. Madeleine Dalphond-Guiral

Mr. Paul Migus

Ms. Madeleine Dalphond-Guiral

Nancy Lawand

1615

The Chair

Ms. Anita Neville (Winnipeg South Centre, Lib.)

Ms. Nancy Lawand

Ms. Anita Neville

Mr. Paul Migus

Ms. Anita Neville

Mr. Paul Migus

Ms. Anita Neville

Mr. Paul Migus

Mr. Doug Taylor

1620

The Chair

Mr. Werner Schmidt

Mr. Paul Migus

Mr. Werner Schmidt

Mr. Réal Bouchard

Mr. Werner Schmidt

Mr. Réal Bouchard

Mr. Werner Schmidt

Mr. Réal Bouchard

Mr. Werner Schmidt

Mr. Réal Bouchard

Mr. Werner Schmidt

Mr. Réal Bouchard

Mr. Werner Schmidt

The Chair

Mr. Paul Migus

The Chair

Mr. Paul Migus

Mr. Werner Schmidt

Mr. Paul Migus

The Chair

1625

Mr. Paul Migus

The Chair

Ms. Madeleine Dalphond-Guiral

Mr. Paul Migus

Ms. Madeleine Dalphond-Guiral

Mr. Paul Migus

Ms. Madeleine Dalphond-Guiral

Mr. Paul Migus

Nancy Lawand

Ms. Madeleine Dalphond-Guiral

Nancy Lawand

1630

Ms. Madeleine Dalphond-Guiral

Mr. Réal Bouchard

Ms. Madeleine Dalphond-Guiral

The Chair

Ms. Madeleine Dalphond-Guiral

Mr. Réal Bouchard

The Chair

Ms. Anita Neville

The Chair

Ms. Anita Neville

Mr. Paul Migus

Ms. Anita Neville

The Chair

1635

Mr. Paul Migus

The Chair

Mr. Paul Migus

The Chair

Mr. Paul Migus

The Chair

Mr. Paul Migus

The Chair

Mr. Paul Migus

1640

The Chair

Mr. Réal Bouchard

The Chair

Mr. Réal Bouchard

1645

The Chair

Mr. Paul Migus

The Chair

Mr. Paul Migus

The Chair

Mr. Réal Bouchard

The Chair

CANADA

Sub-Committee on the Status of Persons with Disabilities of the Standing Committee on Human Resources Development and the Status of Persons with Disabilities

NUMBER 021

1st SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, April 30, 2002

[Recorded by Electronic Apparatus]

¹ (1540)

[English]

The Chair (Ms. Carolyn Bennett (St. Paul's, Lib.)): We'll call the meeting to order and proceed with our reduced quorum. Everybody's somewhere else, but the witnesses are so fantastic, it will be just as good on paper for them to read it at their leisure.

I apologize. I chair one of the subcommittees on women, peace, and security, and just as I was sneaking away, Mr. Graham arrived to address the group--it's a group of NGOs and four or five government departments--so it was fun.

[Translation]

Ms. Madeleine Dalphond-Guiral (Laval Centre, BQ): Where are they?

[English]

Gone with the wind?

The Chair: They're travelling.

[Translation]

Ms. Madeleine Dalphond-Guiral: Or melted by the—

[English]

The Chair: You were gone for two weeks--and you know why you were gone.

Voices: Oh, oh!

[Translation]

Ms. Madeleine Dalphond-Guiral: Yes, but I am here today.

[English]

The Chair: Some of us only got home from Israel at 6 a.m., Madame.

[Translation]

Ms. Madeleine Dalphond-Guiral: There is usually an opposition member.

[English]

The Chair: No, trois... We've been very good: Anita, Tony, and Nancy.

[Translation]

Ms. Madeleine Dalphond-Guiral: Then I will switch chairs, but not sides.

[English]

The Chair: We have, from the Department of Human Resources Development, Paul Migus, the assistant deputy minister of income security; Doug Taylor, the director of the disability and reconsiderations division; and Nancy Lawand, director of CPP program policy.

From the Department of Finance we have Réal Bouchard, director of federal-provincial relations and social policy.

Bienvenue.

Would you like to start, Paul?

Mr. Paul Migus (Assistant Deputy Minister, Income Security Programs, Department of Human Resources Development): I certainly can.

If it's all right, I have just a short five-minute presentation. If you have the time for it, that would be excellent.

The Chair: I think so.

[Translation]

Thank you.

I welcome the Sub-committee's interest in CPP disability and I am happy to cooperate with you in setting the stage for your delibrations.

My first appearance before your Committee was in May 2001, when I participated in a round-table on the disability income system. It was extremely helpful to hear from the representatives of different disability organizations.

First for the particular information of new members of the Committee, let me briefly review the basic eligibility criteria for CPP disability. To qualify for CPP disability, a person must meet both contributory and medical requirements.

Contributory requirements are valid CPP contributions in four of the last six years, including a minimum level of earnings each year. Medical requirements are as follows: a severe and prolonged disability that prevents any work on a regular basis and for an extended period of time.

[English]

There are three levels of appeal for those who disagree with the decisions, two of which are administered by quasi-judicial independent agencies operating at arm's length from HRDC.

CPP disability is a large and important component of Canada's disability income system. In 2001-2002, there were over 280,000 CPP disability beneficiaries in pay, receiving a total of $2.5 billion, and 56,000 applications were received last year.

HRDC recognizes that people applying for CPP disability are facing very difficult times in their lives. Since CPP disability is so important to Canadians, it is vital that HRDC deliver this program fairly, efficiently, and with compassion. We take the responsibilities very seriously.

I would like to very quickly outline some steps we have taken at income security programs to improve our service delivery. The initiatives fall into three categories of clear communication with clients and their representatives, client engagement, and service delivery links with other disability partners.

For clear communication, clients want to understand how their applications will be treated and a clear explanation of the rationale for our decisions. To accomplish this, we have implemented a new process called early client contact.

Staff call the clients when an application is received to explain the decision-making process and respond to questions. Staff also call the clients at the time of the decision to explain the outcome. Where possible, we try to refer the client to other programs that may be able to assist them. Implementation of the new approach is about 90% complete.

To complement this, we are also implementing more personalized and detailed decision letters. Decision letters explain to unsuccessful applicants why they were not found eligible. We have learned that more client contact and more complete explanations for our decisions produce fewer clients who decide to appeal.

Clients who do choose to appeal our decisions to the review tribunal now receive a detailed written summary describing the reasons for our decision. They receive the information approximately four weeks in advance of the appeal hearing, thus enabling them to better prepare for the appeal.

Other measures we have taken to improve communication include a client newsletter to 280,000 beneficiaries and a physicians guide to CPP disability sent to 21,500 doctors.

With respect to client engagement,

¹ (1545)

[Translation]

We want to draw upon our clients' experiences in order to improve our methods. The present sub-committe has recommended that the Canada Pension Plan organise a consultation with community experts to obtain another perspective regarding service improvements.

I am happy to announce that the Round Table on CPP disability has been implemented and that its first meeting was held at the end of 2001. It will meet twice a year and a second meeting is to be held at the end of May. The eight Round Table representatives provide precious insights from the client's perspective on all aspects of our activities, including delivery modes and communication initiatives.

The very first newsletter for CPP disability clients was mailed in the fall and was very well received. More than 2000 clients took the time to call our department with positive feedback.

[English]

On linkages with other service providers, we understand many clients applying for CPP disability are involved with other service providers, including private disability insurers and provincial programs. It is in everyone's interest to streamline and simplify the requirements for those who need to access benefits or services of more than one program.

More than one-third of applicants for CPP disability also receive private insurance benefits. It's important that HRDC work closely with the insurers so clients do not get the run-around. In the last several months we have held several bilateral meetings with senior managers of major insurance companies to discuss our concerns about inappropriate referral practices and to also find ways to improve communications.

We have also initiated meetings with the Canadian Life and Health Insurance Association to raise our concerns about practices with respect to offsetting benefits CPP pays to eligible children of those who receive CPP disability benefits.

We are co-chairing a federal-provincial-territorial social services working group that is examining common issues, and particularly the impact of new policies on mutual clients.

As an example of the potential for better service delivery, we now have an arrangement with Manitoba Employment and Income Assistance to train front-line staff on CPP disability eligibility and to make sure referrals of clients to our program are appropriate by first reviewing CPP contributions. We look forward to opportunities to do more creative partnering with the provinces.

We have also initiated activities with Veterans Affairs Canada to work collaboratively for the benefit of our common clients, including training of staff and linking our communications initiatives. Similar discussions have also begun with my colleagues in Employment Insurance and with CCRA.

¹ (1550)

[Translation]

Finally, I would point out that in 2001-02, the Federal Court has rendered several important decisions that clarify the legislated definition of disability used for CPP disability. These important decisions have clarified how intangibles such as “personal factors” and “socio-economic” considerations are to apply when determining eligibility.

I thank you for the opportunity to be present and hope I may be of assistance to the Committee members.

[English]

The Chair: Merci.

Is that it for the team?

Mr. Paul Migus: That's it for all of us.

The Chair: Does it include the Department of Finance? Are you here for colour commentary?

Mr. Paul Migus: Yes, and to help as much as possible.

The Chair: We'll find out where the policies get made yet.

Werner.

Mr. Werner Schmidt (Kelowna, Canadian Alliance): Thank you very much, Madam Chair.

Thank you very much to the witnesses for appearing. Thank you for the very concise presentation. I think it was very good.

The actuarial projection was made with regard to CPP making its main objective possible for the payment of pension benefits to CPP contributors.

Did the report also include the demands of the CPP disability component you are presenting here today?

Mr. Paul Migus: Yes. All components of the CPP program were included, including disability.

Mr. Werner Schmidt: What proportion of the CPP pension benefits is paid as pension benefits? What proportion of the total package is paid in disability?

Mr. Paul Migus: Our colleague from the Department of Finance indicates about 15% of the total benefits payable under CPP accrue to individuals with disabilities. We can get you precise details. I'd be happy to provide it in terms of exact numbers.

The Chair: I'll jump in there. As you know, in terms of the study we're hoping to do, all of the kinds of statistics would be really helpful for our website. We want to inform the people who don't get your newsletter as much as we can. The numbers will be really helpful, I think.

Mr. Werner Schmidt: I think it would be very important to get them. Thank you, Madam Chair.

How much time do I have, Madam Chair? I have lots of questions.

The Chair: We'll keep circling around.

Mr. Werner Schmidt: The other question I have has to do with the philosophical concern I have with regard to private insurance companies, other disability providers, and the CPP. The CPP is a publicly funded operation, partly through premiums, of course. We have a government program and private programs.

What is the relationship between the Canada Pension Plan disability and the disability of insurance providers in the private sector?

Mr. Paul Migus: My understanding is that the Canada Pension Plan is known as the first payor. We do have arrangements in place whereby if an individual is disabled, the private sector insurance company commences payment. If they are found to be eligible under CPP, we commence the payments and in fact in some cases reimburse the private sector insurer.

¹ (1555)

The Chair: Thank you, Werner.

Can you show us the legislation that has you as first payor?

Mr. Paul Migus: I don't have it with me.

The Chair: Is there legislation that says you have to pay first?

Ms. Nancy Lawand (Director, Canada Pension Plan Program Policy, Department of Human Resources Development): I'm not aware if it's specified in the legislation, but it's—

The Chair: The insurance companies just think so?

Ms. Nancy Lawand: It's an arranged—

Mr. Paul Migus: Can we take that one on notice? I do not have the answer, obviously, at our fingertips. We will take that question, do the research necessary, and get back to you.

Mr. Werner Schmidt: I have to make a comment on that. Madam Chair, here we have the administrators of the Canada pension disability program, and they cannot answer a simple question like that. I think that's a very serious indictment of the way this plan is run. It's one reason this subcommittee was struck, to bring some of these things to light.

I think, Madam Chair, this is a very serious question. There is clearly a question with regard to conflict here, and it's incumbent upon the government and the department officials—with all due respect to the good presentation that was made—to be able to answer those questions just like that.

Mr. Paul Migus: We would be happy to do so. Next time I'll bring legal counsel with me.

The Chair: I'll just go back to Paul's answer, which he said before in terms of the meetings he's had with the insurance companies. One of the concerns we've looked at in this committee before is the push coming from third parties to make people apply for CPP disability when often, quite frankly, they don't qualify. As a physician I know they don't qualify, but I'm made to fill out the stupid form because the insurance company has insisted that they apply; otherwise, the insurance company won't pay.

We have had this conversation before as to whether there should be a box on the form that says, “Did somebody else make you apply?” Then that could go into a very slow file in my hot little.... These are the kinds of things we could look at.

Mr. Werner Schmidt: I think the other question that comes out of this is an administrative one. When you deal with these other service providers and you have the CPP disability over there, if I'm the private entrepreneur over here, I'm going to say, let CPP pay, then I won't have to. I think CPP would say, let them pay, then I won't have to.

How do you actually get into this business of being a first payor? Who decides who is the first payor? What are the conditions to determine who is first payor?

Mr. Doug Taylor (Director, Disability and Reconsiderations Division, Department of Human Resources Development): I'll take a stab at that one.

Essentially, what we do when administering CPP disability is we look at every application that comes in and determine if the person has contributed to CPP. If they meet the eligibility requirements, then they're entitled to a benefit. It's a question where if you've contributed the minimum amount and if you meet the medical criteria, then you're eligible for the benefit.

The industry practice is to set their premium rates according to an assumption that a certain proportion of clients they have will be eligible for CPP disability, and we all know that it is in their interest to refer their clients to us. What we've been trying to do in talking to the insurance companies is to first make sure they understand who they should be sending our way and who they shouldn't.

We've been having some success in that. In fact, we're now starting to track the numbers of applicants for CPP disability who are getting private insurance benefits. It's in the neighbourhood of 28% to 30% of people who apply for CPP disability who are getting private insurance benefits. If we look at the approval rate for those people, it's about 50%. You can say that's good or you can say that's bad, but that's what the numbers are. It is a higher approval rate than the average.

Mr. Werner Schmidt: Thank you very much.

Ms. Nancy Lawand: The one other distinction is that long-term disability insurance covers people for a much higher range of earnings replacement than what CPP can cover. CPP is legislated. It's a basic earnings replacement for situations where you can't work. If you pay in and you meet the criteria, you can get up to a maximum amount, which is a very small amount if you have been earning a higher salary.

As in the retirement pension area, etc., employers and employees acquire additional insurance coverage, so there is an element of integration there. Employers and employees choose to add to their benefits package so they can have coverage that's much broader from an earnings replacement point of view.

º (1600)

Mr. Werner Schmidt: This next question you may not be able to answer because it's primarily a private sector issue, but you probably are aware of it, in any event. I'm sure insurance companies set their premium levels based on their level of experience in the past and actuarial projections forward, and on the assumption a certain proportion will be on CPP. When they do that, in your experience, is that premium reflected in the disability portion of the premium and for CPP contributors?

Ms. Nancy Lawand: I'm not sure I really understand your question.

Mr. Werner Schmidt: That's okay. The insurance companies, when they provide disability insurance, will set their premiums based on experience, age levels, jobs, and all those kinds of thing.

Ms. Nancy Lawand: That's right.

Mr. Werner Schmidt: And then they project forward as to what will happen. Part of that is going to be taken away because of the CPP contribution. They'll assume that's going to be the case, and I assume it's on their application form.

The CPP contributors also have two parts, the pension portion and the disability portion. When setting the premium that the individual Canadian pays to the CPP, and the projection forward is made on the disability, is the premium charged to the individual employee determined on the basis of where that person works, or is the disability simply an overall general position, so that it doesn't make any difference what the person does or what the danger may be in his or her particular position?

Mr. Réal Bouchard (Director, Federal-Provincial Relations and Social Policy, Department of Finance): It is the latter.

Ms. Nancy Lawand: Yes, it's the latter.

Mr. Werner Schmidt: It's the latter. So in other words, they are not at all comparable. The liability incurred by the CPP disability insurance is far greater than the liability incurred by an insurance company.

Ms. Nancy Lawand: Yes, but the risk is pooled across all the contributors to the CPP.

Mr. Werner Schmidt: As it is with the other case, though, too.

I think that's a very different situation, Madam Chair. The premiums do not reflect the danger or the risk the Canada Pension Plan contributor may be involved in as far as the disability portion is concerned. Is that a correct conclusion?

Mr. Réal Bouchard: The risks, as Nancy has said, are collective, not individual. Those risks, generally speaking, are taken into account effectively because the chief actuary looks at disability incidents in the population at large, and so on.

Mr. Werner Schmidt: Granted, but by the same token, though, somebody working in a very high-risk occupation, for example, runs a risk of being disabled that is far greater than someone, let's say, who has a job like yours.

Mr. Réal Bouchard: That's right. There's no contribution rate tailored to the particular individual's profession or work. It's the same contribution rate for everybody, all the workers in the country.

Mr. Werner Schmidt: Okay.

I think I should probably let someone else ask some questions.

The Chair: We'll come around again.

[Translation]

Ms. Madeleine Dalphond-Guiral: Good afternoon.

[English]

Mr. Werner Schmidt: I'll give you a chance now.

[Translation]

Ms. Madeleine Dalphond-Guiral: Thank you. I have a number of questions.

Since last fall, our Sub-committee has been particularly interested in finding out how the tax credit eligibility criteria are determined.

Do you use a similar template to determine who is and who is not eligible for CCP disability? Is it the same set of criteria that are used to determine income tax credit eligibility?

Mr. Paul Migus: No, there are slight differences in the definitions of eligibility.

Ms. Madeleine Dalphond-Guiral: Could you explain why there are differences? What is the rationale? If I have lost a limb…

Mr. Paul Migus: I cannot.

º (1605)

Ms. Madeleine Dalphond-Guiral: You cannot.

Could you make sure then that you're going to find out the answer? I find it hard to imagine that when we deal with something as sensitive as the loss of functional independence, we are faced with different definitions, different concepts and people cannot tell me why. So I would really like to have an answer on this, if possible, of course.

Mr. Paul Migus: I do not know because the eligibility criteria for our Department's disability benefits were set out by Parliament 35 years ago. They have remained unchanged since then, but at the same time, we have been getting a more recent definition from the Department of Revenue. I am not fully aware of how they drafted that legislation. We could ask our colleagues from the other department, but I am not in a position to give you an answer on that department's policies.

Ms. Madeleine Dalphond-Guiral: You realize that when people are faced with a very upsetting and somehow unfair health problem, the role of the state is to try and mitigate to some extent that unfair condition. It is somewhat ironic that different departments at the same government level cannot use similar definitions.

Am I right to understand that a person who would for instance qualify for CPP disability would not necessarily qualify for the income tax credit?

Mr. Paul Migus: Yes.

Ms. Madeleine Dalphond-Guiral: All right. This is fascinating.

If a person receives disability payments from a private insurance company, does it mean necessarily that the person cannot qualify for CPP disability ? Is it out of the question?

Mr. Paul Migus: I do not understand your question.

Ms. Madeleine Dalphond-Guiral: Let's say I get reasonable disability benefits from a private company; if I receive those benefits as a result of my investing in an insurance scheme, either through my union or my own initiative, does that imply that I am not eligible for CPP disability?

Mr. Doug Taylor: No.

Ms. Madeleine Dalphond-Guiral: So, stacking is possible.

Mr. Doug Taylor: No, at some point, there is an integration of benefits. Typically, the private insurance…

Ms. Madeleine Dalphond-Guiral: I found your answer surprising. I was very pleased with it.

Mr. Doug Taylor: Typically, the private insurance company pays out the benefits for the first two years, and during that time the test is whether the person can or cannot perform the duties of his or her own job. After three years, the test becomes whether the person can work in any position. At that point, the private sector's definition is more or less the same as the CPP's definition and if we start paying out benefits, private insurance benefits will be reduced accordingly.

Ms. Madeleine Dalphond-Guiral: In other words, they pay the difference. Your benefits offset the private sector's benefits.

[English]

The Chair: What about Workers' Compensation? Are some people getting all three? How does that fit in?

Ms. Nancy Lawand: It is possible to get all three. If someone has had a workplace injury, their long-term disability policy covers them for that, and they also qualify for CPP disability. The Workers' Compensation in most of the provinces would offset the CPP, as would the private insurance. It's probably rare, but it can happen. There's nothing intrinsic in the legal frameworks of the programs that would make that impossible.

º (1610)

The Chair: They don't pay tax on the Workers' Compensation, but they do pay it on CPP and the insurance.

Ms. Nancy Lawand: Yes. There are different policies, and some are taxable and some are not. Many long-term disability insurance products are tailored to particular employment situations. In some cases they are non-taxable, but most are taxable.

[Translation]

Ms. Madeleine Dalphond-Guiral: The QPP provides disability benefits. It is a universal plan for all contributors, just as the CPP is universal. Can you tell me about the main differences in delivery for the two plans? I guess you have meetings with the QPP officials.

Ms. Nancy Lawand: Are you talking specifically about disability benefits in both plans?

Ms. Madeleine Dalphond-Guiral: Yes.

Ms. Nancy Lawand: There is a significant difference in the legislation. Under the QPP, from age 60, a person may give evidence that he or she is unable to exercice his or her own job. If you can prove that you are unable to do your job, you are entitled to disability benefits. That is a major difference. Under the CPP, you have to show that you are unable to perform in any occupation until the age of 65.

Ms. Madeleine Dalphond-Guiral: Should that CPP philosophy be reviewed? Having to give evidence that you are unable to work in any position is bad for your self-esteem because you get the feeling that people do not believe you. If I asked you to give me evidence of something, it may be because I am not enclined to believe you.

Would the department consider an approach where people at 60…?

Ms. Nancy Lawand: This is not something for the department to review. The legislation would have to be amended.

Ms. Madeleine Dalphond-Guiral: But as a field worker dealing with people, I guess you also have a duty to advise. In that context, I was asking you if you think that it would be wise to…

A voice: We did not really think about it.

Ms. Madeleine Dalphond-Guiral: You have not thought about it. That is a second assignment then.

Mr. Paul Migus: It is not really up to us to make that judgment because it is a plan that involves every province and there is a consultation with officials from every province and all the Finance Ministers too. It is not really up to us to decide whether the standards of one province, the province of Quebec, are better or no better than the standards in every other province.

Ms. Madeleine Dalphond-Guiral: You could have some ideas. In other words, if you could choose between the Quebec plan and the Canadian plan, you would probably choose the Quebec plan, at least in that respect. Is that right?

Mr. Paul Migus: There are differences between the two plans. This is just one aspect of a large pension plan.

Ms. Madeleine Dalphond-Guiral: Are there other differences?

Ms. Nancy Lawand: There are other differences of an administrative nature. The QPP has agreements with the CSST and also, I think, with the Société de l'assurance automobile du Québec to make sure that people who are covered by those other plans do not apply for QPP disability. There are formal agreements to manage that. In our case, we would have to do it with nine jurisdictions.

Ms. Madeleine Dalphond-Guiral: It is not easy to manage Canada.

Ms. Nancy Lawand: Yes, it is more complex.

º (1615)

[English]

The Chair: Anita.

Ms. Anita Neville (Winnipeg South Centre, Lib.): I'll just pick up on the issue of regional disparity. I apologize for coming in late. You may have spoken to the issues.

Just picking up a little bit on my colleague's questioning, I'd be interested in knowing some of the differences in delivery among the other provinces. I also would like to know the differences in the adjudication processes in other provinces. Are there a higher number of applicants from one region or another? Are more accepted? Are the number who requested adjudication greater or smaller in one part of the country than the other? And on appeals, what are the percentages across the country?

Also, I'm interested in this stacking of pensions that you're talking about. What I just heard from the last response was that for the most part, it doesn't take place. Is that fair, with some exceptions?

Ms. Nancy Lawand: Generally speaking, the stacking does not happen. There are offsets. But there are situations. I believe Alberta's and B.C.'s workers' compensation boards, for example, do not offset CPP, so in those provinces a person who qualifies for both could get the two-benefit stack.

Ms. Anita Neville: I'm interested in the delivery within the different provinces. We heard a little bit about Quebec. Are there other differences?

Mr. Paul Migus: The Quebec Pension Plan is very different from the Canada Pension Plan.

Ms. Anita Neville: I'm aware.

Mr. Paul Migus: Consequently, with respect to delivery of the Canada Pension Plan, it is delivered by Human Resources Development Canada.

We do have national service delivery standards, as well as a national approach in terms of training for our staff, no matter which province they happen to be working in.

With respect to the question as to whether there are differences in the number of applications coming in from different parts of the country, the answer is yes. Each application is evaluated on a case-by-case basis, and so there will be differences in terms of adjudication or decision rates, depending on the types of cases coming forward from different parts of the country.

With respect to the ability to provide you detailed information, yes, we can do that, depending on exactly how you'd like it organized--by province, by type of consideration...

Ms. Anita Neville: I guess I'd be interested in it by province, but I want to know why there are differences from one province to another and if they're significant, particularly in adjudication of the appeals and the concerns related to that.

Mr. Paul Migus: With respect to the adjudication of initial applications, I can let my colleague Doug describe the process in more detail, but you would have a difference of decision-making depending on the nature of the illness that is before you. You can have two applications in two parts of the country dealing with four different kinds of disabilities. Consequently, trying to compare them would be very difficult.

Ms. Anita Neville: What I want to know is, if you have two applications in two parts of the country that are similar, are you likely to have a similar response?

Mr. Paul Migus: The answer should be yes. We do have processes in place to check whether or not that is happening, and by and large, we're fairly confident that it is. But I'll let Doug provide some of the details.

The training and the rules, the procedures, the interpretations and the guidelines are all consistent.

Mr. Doug Taylor: Yes, there really is. We make quite an effort to try to ensure there is consistency across the country.

As Paul says, there is the possibility of there being some differences in your applicant pool, so that could be reflected in the approval rates. But there aren't significant differences from one region to the other in approval rates.

It's the same thing for appeal rates. There isn't a significant difference from one part of the country to the other.

Our training is done nationally, and our attempts to make sure that an adjudicator in B.C. is rendering the same decision as in Newfoundland is something into which we put a lot of effort.

º (1620)

The Chair: Werner has to leave and has a question before he goes.

Mr. Werner Schmidt: Thank you very much, Madam Chair.

The question I have is, do you have a feel for data in terms of the increase in benefits paid out on the Canada Pension Plan disability from when it was first started to where it is today, and what does that look like?

Mr. Paul Migus: I don't know whether we've seen it from 1966, whether we have statistics going back that far. I've seen statistics going back the last 10 years and what that looks like. Maybe my colleagues—

Mr. Werner Schmidt: That's fine. We'll go with that.

Mr. Réal Bouchard: In the report produced by the chief actuary, you have data going back to 1966.

Mr. Werner Schmidt: We don't have that here, but for my benefit right now, could you tell us it where is over the last 10 years? You must have some kind of indication.

Mr. Réal Bouchard: Do you mean how it grew during those years?

Mr. Werner Schmidt: Yes.

Mr. Réal Bouchard: I'll check the record. Can we get back to you on that?

Mr. Werner Schmidt: Sure.

Mr. Réal Bouchard: I'll find your answer.

Mr. Werner Schmidt: Okay.

This is an unrelated question, and it's kind of hypothetical in one sense, but I think I heard you say that about 15% of the total benefits paid under the CPP disability group was for the CPP disability. Does that mean that the contribution to the premium for the CPP disability is roughly 15% of what you pay every month?

Mr. Réal Bouchard: Sorry, can you repeat your question please? I apologize.

Mr. Werner Schmidt: Yes. Of the total CPP, about 15% is CPP disability. Does that mean that the pension part of the CPP premium is roughly 85% of the total premium and 15% is dedicated to disability?

Mr. Réal Bouchard: Well, first of all, you also have survivor benefits.

Mr. Werner Schmidt: I understand.

Mr. Réal Bouchard: So you could say that, yes, although of course it's not apportioned. In other words, you have one contribution rate overall and it covers the three major benefits.

Mr. Werner Schmidt: Yes, well, that's why I called it a hypothetical question. It's just to get a bit of a feel for how this thing works out.

Mr. Réal Bouchard: You could argue that, roughly speaking, the contribution rate that is levied reflects the share of expenditures in the benefits.

Mr. Werner Schmidt: I'm going to have to get that actuarial report. That should be in there as well.

Did you get the answer to that other question?

Mr. Réal Bouchard: No, not quite.

The Chair: Would you just promise, Mr. Schmidt, that it'll be on the website shortly? We have a bit of a shopping list of things we'd like for the website in terms of data.

Mr. Paul Migus: The document itself is currently online on the Department of Finance's Office of the Superintendent of Financial Institutions website. We can hotlink that over to you. We can even provide you the exact page reference so the answer to that question can then be hotlinked directly to your website. We can do that.

The Chair: Can you hotlink it to Mr. Schmidt, too?

Mr. Paul Migus: We can direct it to his office, indeed.

Mr. Werner Schmidt: Well, thank you very much, Madam Chair.

The Chair: Yes.

I think there are a number of things, in terms of the things we think might be useful, that the committee's going to have a look at. Will it be all right if we just send you a letter saying that the data and...?

Also, some of the things we once saw here at the committee, the pie chart of the number of people who apply and what happens after, the number of people who are turned down the first time, and the second—

Mr. Paul Migus: I know the chart you're referring to. I'd be happy to update that and provide it to committee members as well.

The Chair: That would be great.

So we'll tell you what we need. We can circulate it to the members, and then the members will decide what goes on the site, if that's okay. And that would be really soon, wouldn't it, so we can...

º (1625)

Mr. Paul Migus: How soon would you like it?

Do we have until the end of the week?

The Chair: Absolutely.

When we have our round table, I think it would be great if the people coming to the round table have been able to see what we have so far and also make suggestions. Part of the purpose of this study is to try to make it really useful to the Canadians who we're going to try to entice into participating with us, and I think the more information they have, the better the study will be. So that's good.

Madeleine.

[Translation]

Ms. Madeleine Dalphond-Guiral: Among people who become disabled and qualify for CPP disability, some have a chronic disability and others may have a relatively long-term disability but may eventually recover.

How often do you check upon people's disabilities? Is it every year, every second year? Is it the doctor's responsibility to let you know if there is a significant change? How does that work?

Mr. Doug Taylor: If I understand correctly, you want to know when we carry out an eligibility review.

Ms. Madeleine Dalphond-Guiral: Exactly.

Mr. Doug Taylor: When a person qualifies for our program, the adjudicator determines whether the person's condition will have to be reviewed in the future. We receive applications for people who are going to die obviously, and we do not want to review their conditions. But if an applicant's condition may improve over time, we may decide to review his or her file after two years or two and a half years. It all depends on the specifics of each case.

Ms. Madeleine Dalphond-Guiral: So, it's really a case-by-case assessment.

Mr. Paul Migus: Exactly. We also have procedures to identify situations when a review may be required. If we get information suggesting for instance that the person is now able to work, we may be led to review that person's condition.

Ms. Madeleine Dalphond-Guiral: O.K.

Old Age Security is a universal plan: everyone qualifies at 65. How does it work out in the case of people who receive disability benefits? At 65, when you are disabled on top of it, it is more costly.

Mr. Paul Migus: At 65, people automatically start receiving their retirement pensions. It is an automatic change.

Ms. Madeleine Dalphond-Guiral: So, if I understand you correctly, disability benefits are discontinued as soon as the Old Age Security kicks in.

Mr. Paul Migus: At 65, yes.

Ms. Nancy Lawand: There is an automatic transfer to CPP retirement pension.

Ms. Madeleine Dalphond-Guiral: My question might be stupid, but are the amounts reasonably similar or is there… Am I to understand that disability benefits are higher?

Ms. Nancy Lawand: Yes. Retirement benefits are determined in a different way. There are based on other factors than those used in the legislation to determine disability payments. So, typically, there is a decrease when the retirement benefits kick in, but as you said, at that time the person also qualifies for…

Ms. Madeleine Dalphond-Guiral: The Guaranteed Income Supplement.

Ms. Nancy Lawand: The person qualifies for Old Age Security, CPP retirement and, if his or her income is very low, that person may also qualify for the GIS.

º (1630)

Ms. Madeleine Dalphond-Guiral: In actual fact, could you give us the percentage of people who see a significant drop in their income? When your income is low in the first place, even 1% is a lot.

Mr. Réal Bouchard: If I may answer that question—

Ms. Madeleine Dalphond-Guiral: I am sure you can.

Mr. Réal Bouchard: —as Nancy just said, there is a transfer from the disability pension to a CPP retirement pension. That pension may obviously be lower than the disability pension. However, the CPP retirement pension is complemented by Old Age Security and, in the case of a lower income, there is of course the GIS. As a result, the income of a person who receives disability benefits is higher after that person is 65.

Ms. Madeleine Dalphond-Guiral: I am reassured. Thank you.

[English]

The Chair: If there were to be changes to the Canada Pension Plan, what would be the role of the Quebec government in that? Would the Quebec government be included?

[Translation]

Ms. Madeleine Dalphond-Guiral: I am about to receive my cheque.

Mr. Réal Bouchard: I am not sure I really understand your question.

[English]

So you're asking whether Quebec is included in the changes to the Canada Pension Plan. Quebec is a participating province. It's counted as part of the two-thirds/two-thirds rule for the Canada Pension Plan.

Typically, Quebec does not stand in the way of reforms that other provinces agree to. Of course, Quebec is independent and does whatever it wants with its own plan. The other provinces have nothing to say about the Quebec Pension Plan.

The Chair: Except that it's better, right, Mado?

Anita.

Ms. Anita Neville: This may be a stupid question as well, but—

The Chair: We don't have any stupid questions in this committee.

Ms. Anita Neville: What, if any, supports are available to somebody who is on a disability pension for extraordinary medical circumstances? Are there any?

Mr. Paul Migus: There are no additional support payments payable under Canada Pension, only the pension itself. There are other programs in the provinces that do provide support payments for the disabled.

Ms. Anita Neville: So if somebody required extraordinary care that involved travel to another province or something of that sort, they would have to find a provincial program to provide that support, assuming they were not on social assistance and this is their primary source of income?

Mr. Paul Migus: That is correct.

Ms. Anita Neville: Okay, thank you.

The Chair: Mado, do you have another question?

Ms. Madeleine Dalphond-Guiral: Non, ça va.

The Chair: We hope this is the beginning of an ongoing relationship in terms of what we're all hoping to do, which is to make this responsive to and reflective of Canadian needs. We understand there's not been a real study of this for 20 years, so we're hoping we'll be able to help in some way. If there's anything that you who are in the trenches administering the program would like us to be asking or posting, we would be very pleased to take your suggestions.

I think it's quite exciting, and we'll see what we can do. Obviously, the interactions between all of the sectors and all of the.... It's like everything we do at this committee. We're dealing with at least four different levels of government and three different departments, and we want to make sure that it really is complementary. One of the pieces is the appeal process. Is having all of those levels of appeal the most effective way? We have many, many questions.

Everybody on the committee should have received A Physician's Guide. Maybe we can make sure everybody has A Physician's Guide and a copy of the newsletter and anything else you think would be helpful to us.

Then we could pick and choose bits of that for the website as well, to make sure the members are up to date with the kind of communication.... A sample letter of refusal may be helpful. I know you've really tried to make it better. We may also like the pilot project in terms of the early...what is it called?

º (1635)

Mr. Paul Migus: In advance of the appeal process we provide details of why the individual may not have qualified. We can provide you an example of what that might look like, in terms of reasons for not allowing a case to proceed.

We will also provide you a copy of the CPP annual report as well, which includes CPP disability, and I think you'd asked for the linkage to the actuarial report on the Canada Pension Plan. We'll make sure all that's available.

The Chair: Are there policy manuals or things like that, or would they be as bulky as nine telephone books?

Mr. Paul Migus: It would be more than nine telephone books. They're publicly available, by all means. I wish I knew how to provide a simpler answer. If it was online, I'd send it to you. But, yes, we can make all of them available, though I don't think you would want to read them all.

The Chair: All right, but could you also provide some of the more recent data and pie charts and all those things?

Mr. Paul Migus: We'll provide some summaries to give you the basis upon which you can get a better feel for the overall expenditures and how they are being administered.

The Chair: One of the things we've been interested in is how definitions get applied, and I think that's what... Certainly, under the disability tax credit study, we were a bit surprised that what's in the legislation and what happens on the ground seem to be quite different. There's been some concern about CPP that way as well, and I guess the Villani decision is saying it has been applied unevenly in terms of severe.... Is there just a small explanation of how the adjudicators apply “severe”, or how do you...

Mr. Paul Migus: We can share that with you as well, as we'll share with you the Rice decision, which came after Villani and which clarified Villani in terms of what the court felt was the appropriate definition with respect to both socio-economic and personal factors. So I'd be happy to--

The Chair: Sherry Torjman's piece out of the Caledon Institute is, we think, not a bad historical overview, but I would very much like from you the overall policy goals of the CPP disability program as you see it. Is that on the site somewhere, or do those change in terms of the actual goals of the plan? Do they stay?

Mr. Paul Migus: What drives the CPP disability program is the legislation itself, and behind that we do have the regulations, which are approved by Parliament. Then there are the recent court decisions, which also try to provide precision with respect to some of the definitions and the interpretations. We have a number of policies as well in terms of the kind of training we provide to the staff. It's a collectivity of tools that are provided to the staff, very much based on the legislation, though.

º (1640)

The Chair: In this so-called tightening everybody felt in 1997-98, where there seemed to be an overriding feeling that this thing was being tightened down.... How does that happen? Is that a new set of policies that get written? The Department of Finance, I believe, issued a statement that said it wasn't to jeopardize retirement pensions. It seems that there was...obviously, in terms of sustainability of the CPP plan, we did a bunch of things like raising the premiums and doing all that. Is there a policy piece at the finance department that says that even if there's an epidemic of something or other, it still mustn't risk the overall sustainability of the retirement plan?

Mr. Réal Bouchard: At the time of the reform, yes, indeed there were, at some point, some principles, not with the Department of Finance but with the departments of finance, with the provinces, one of which you just alluded to, that while disability benefit is an integral part of the plan, one should ensure that it does not jeopardize the sustainability of the core benefit of the Canada Pension Plan, which is the retirement pension.

One has to remember that in the early days of CPP reform, if I may go back to 1995, I think, when the fifteenth actuarial report was released, and where, at the time, the projection of disability expenditures was quite significant, and so on, the two levels of government came to the conclusion that it needed to be reviewed.

That resulted, of course, in the series of changes to both the financing and the benefits, including some changes to the disability structure. But it was really a series of changes. Just about everything was affected: financing, investment, contributory base, and some benefits.

The objective was to have some kind of balanced package of changes that would ensure that, overall, for the sustainability of the plan, the plan would be put on sound financial footing.

In other words, the objective was not to look at one particular benefit and try to substantially reduce that benefit, but there was some recognition that expenditures in the disability component had grown substantially in the previous year, and that if it continued it could put at risk the overall sustainability of the plan.

The Chair: How often do the federal-provincial meetings take place?

Mr. Réal Bouchard: The review is a triennial one, so every three years. Typically, formally, the three-year period is divided into three parts.

The first year of the three-year cycle is when the chief actuary prepares his analysis on the basis of the most recent information. In the present cycle, the first year was 2001, and it resulted in the production of that report, which was released on December 10.

In the second year of the cycle, which in this case is 2002, essentially officials, the deputy ministers of finance as well as ministers of finance, have a 12-month period during which they're supposed to be making best efforts to arrive at an agreement as to whether some changes are required either on the financing side, on the contribution side, or possibly on benefits.

Then, in the third year of the cycle, which in this case would be 2003, if changes are being made, sufficient notice is given to employees and employers and beneficiaries, and so on, before the changes are implemented.

It is a formal cycle, but one thing is important to remember, that the triennial review process is an ongoing one. There is, of course, that key window in the middle of that three-year cycle where ministers of finance, on the basis of the information, have to say, okay, we have the report; what do we do with it? Do we need to make changes, or is everything okay? But generally speaking, officials are doing ongoing work, reviewing certain ideas, certain proposals, so that when that middle year of the cycle comes, some work is being done and potentially could be discussed and could become part of an agreement among ministers.

So, yes, it's a three-year cycle, with each year meaning a different thing, but informally, of course, what you have is an ongoing process, an ongoing work by officials, federal and provincial, and so on.

º (1645)

The Chair: And does this all change without any changes to legislation? It just changes?

Mr. Paul Migus: No, it culminates in changes to legislation. You asked the question about the last tightening up as a result of the federal-provincial conversations. In fact, the Minister of Finance tabled, back in 1998, the changes on disability that moved the eligibility. Back then, you had to have contributed five years out of the ten or two out of the three. It changed it to basically saying the new requirement was to have made contributions in four of the last six years. Changing that legislation had the impact of tightening the eligibility.

The Chair: In terms of the work of this committee, how can that feed into the process?

Mr. Paul Migus: I think it's a normal process that your committee would normally follow; that is, if you're doing a review and you've got certain recommendations, I'm assuming you would then prepare and table your report. The minister responsible for disability issues, in this case Minister Stewart, would have 150 days to respond. It would, I assume, be up to my colleagues--and to Minister Stewart. If there are certain ideas she would like to be reviewed by federal-provincial officials of finance, that's the way it would normally happen.

The Chair: Would it be beneficial therefore for the committee to hear... How would we find out what provincial officials are thinking about? Would you, as the chair, let us know what their concerns are? You chair that committee, right?

Mr. Réal Bouchard: I chair the committee of federal-provincial finance officials who are reviewing the various proposals, evaluating the actual report, and then making recommendations. My committee is reporting to deputy ministers of finance who in turn report to ministers of finance.

The Chair: Okay. Did you have another comment?

We will send you a letter asking for you to hand in your homework; then we'll see you again, I'm sure.

Thank you all very much for coming.

The meeting is adjourned.