March 10, 1950

?

Some hon. Members:

Order.

Topic:   NATIONAL DEFENCE
Subtopic:   METHOD OF AWARDING CONTRACTS
Sub-subtopic:   MOTION FOR ADJOURNMENT UNDER STANDING ORDER 31
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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

Unless the Prime Minister's remarks were directed to that motion, they had no place at this time. After all, the Prime Minister has seen fit to express an opinion in regard to that report; doubtless that is his opinion. I have no doubt that the laughter of the Liberal members was laughter at the fact that anybody should doubt that such a meeting took place. I believe this discussion should proceed now, on the basis of the remarks that have been made by the Prime Minister.

Topic:   NATIONAL DEFENCE
Subtopic:   METHOD OF AWARDING CONTRACTS
Sub-subtopic:   MOTION FOR ADJOURNMENT UNDER STANDING ORDER 31
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LIB

Louis Stephen St-Laurent (Prime Minister; President of the Privy Council)

Liberal

Mr. Si. Laurent:

My remarks were made because the hon. member for Peterborough West (Mr. Fraser) referred to the fact that the orders of the day were not being called; therefore the member for Winnipeg North Centre would not have an opportunity of receiving an answer to a question which he considered to be of importance. It was for that reason I volunteered the answer.

Topic:   NATIONAL DEFENCE
Subtopic:   METHOD OF AWARDING CONTRACTS
Sub-subtopic:   MOTION FOR ADJOURNMENT UNDER STANDING ORDER 31
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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. Coldwell:

I think the point made by the leader of the opposition should be considered by Your Honour and by the house. According to the press dispatch, this matter involves not only some government supporters in the Liberal party, but also a civil servant, one who occupies an important position which enables him to place contracts. Since the question has been reopened by the Prime Minister-I think it should have been dealt with when the member for Peterborough West (Mr. Fraser) asked the question he did-the house should have an opportunity of discussing it today.

Mr Speaker: When I made my ruling, no appeal was taken from it. May I point out to the leader of the opposition something which I am sure he realizes, namely, that he will have an opportunity of discussing this matter, because he has not spoken on the amendment to the amendment to the motion for an address in reply to the speech from the throne.

Topic:   NATIONAL DEFENCE
Subtopic:   METHOD OF AWARDING CONTRACTS
Sub-subtopic:   MOTION FOR ADJOURNMENT UNDER STANDING ORDER 31
Permalink
PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

I do not rise for the purpose of questioning the ruling or reopening the debate. I would point out, however, the validity of the contention put forward by the mover of the motion. If there is any basis for the report it should be discussed before we deal with the estimates of the Department of National Defence. If it is true, it is a most serious situation which should be known to the members when the estimates of the Department of National Defence are being considered.

Topic:   NATIONAL DEFENCE
Subtopic:   METHOD OF AWARDING CONTRACTS
Sub-subtopic:   MOTION FOR ADJOURNMENT UNDER STANDING ORDER 31
Permalink

APPOINTMENT OF JOINT COMMITTEE TO STUDY

LEGISLATION, ALTERNATIVE METHODS, ETC.

LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Hon. Paul Martin (Minister of National Health and Welfare) moved:

That a joint committee of both houses of parliament be appointed to examine and study the operation and effects of existing legislation of the parliament of Canada and of the several provincial legislatures with respect to old age security: similar legislation in other countries1; possible alternative measures of old age security for Canada, with or without a means test for beneficiaries, including plans based on contributory insurance principles; the probable cost thereof and possible methods of providing therefor; the constitutional and financial adjustments, if any, required for the effective operations of such plans and other related matters;

That twenty-eight members of the House of Commons, to be designated by the house at a later date, be members of the joint committee on the part of this house, and that standing order 65 of the House of Commons be suspended in relation thereto.

That the committee have power to appoint, from among its members, such subcommittees as may be deemed advisable or necessary; to call for persons, papers and records; to sit while the house is sitting, and to report from time to time.

That the committee have power to print such papers and evidence from day to day as may be ordered by the committee for the use of the committee and of parliament, and that standing order 64 of the House of Commons be suspended in relation thereto.

And that a message be sent to the Senate requesting that house to unite with this house for the above purpose and to select, if the Senate deems advisable, some of its members to act on the proposed joint committee.

He said: Mr. Speaker, in moving the adoption of this resolution, I should like to set out certain basic facts and considerations which may be of interest to the proposed committee and may receive further study at its hands.

At the outset let me say that, as the Prime Minister (Mr. St. Laurent) stated in the house on February 20, the government attaches the greatest importance to improving old age security in Canada.

Regardless of any improvements that may be made in our present pensions system, or any new system that may be suggested or instituted, all of us in this house, regardless of party, can agree on one common objective. This is to develop the best possible old age and retirement system that can be devised, with full consideration for the well-being of all Canadians. This proposed joint committee can do a real public service by its investigations in clearing the way for a better system of pensions, if that is thought desirable after analysis, for our senior aged citizens.

The idea of a parliamentary committee on old age pensions, sir, is not new to this house. Committees were set up in 1908 and in 1924; and in both instances were followed by beneficial results. The committee of 1908 was

Old Age Security

followed immediately by the enactment of the government annuities measure. The committee of 1924 led to the introduction in 1926, and the passage in 1927 by parliament, of the first Old Age Pensions Act. The act of 1927 is the foundation of the legislation which is in effect in all parts of our country today. It is based on the principle of dominion-provincial co-operation and partnership, thus conforming to the constitutional situation which prevailed in 1927 and which prevails today.

So far as the proposal to establish a joint committee of both houses on old age security is concerned, the facts of the situation will speak for themselves. What we want, and I think what the country wants, is a committee to study in objective fashion all the various aspects of this important and complicated problem.

I do not feel it would be appropriate at this stage for me to argue the case for any particular type of old age security legislation. I do believe, however, that changing factors and the complexity of the problem, which have been given intensive study by the department which I administer and by the government itself, should also be examined carefully and studiously by parliament, and that public opinion should at the same time have the opportunity to express itself on all aspects of this matter. The committee, if and when established, will represent both houses and all political parties. It will provide an opportunity to representatives of labour, industry, agriculture and social welfare organizations, as well as other interested groups, to make their views known on this vital social question.

The study which the joint committee will give to this problem will naturally, of course, take into account the limits of the constitutional powers of parliament in connection with old age security, and the relative areas of jurisdiction of both federal and provincial authorities. It was with full recognition of this division of constitutional responsibility that parliament passed the Old Age Pensions Act of 1927.

I think it is only fair to say that there is undoubtedly a growing feeling in Canada for some type of contributory system of old age security. While there are indications that some members are changing their views in this particular, the fact is that until recently, within the last few days, no members of the house except those of the Social Credit party have opposed this idea. It must be recognized, however, that a contributory scheme calling for compulsory payments by beneficiaries on a national basis will involve a constitutional amendment, just as our Unemployment Insurance Act was preceded by an amendment to the British North America Act.

These limitations on the federal power to legislate in the field of compulsory contributory social insurance remain today a vital factor in any consideration we may give to the question of planning proper measures of old age security for our population. At the conference to be held this fall undoubtedly the matter of old age retirement will provide a basis for discussion between the federal and provincial governments.

It will be a matter of the greatest importance, therefore, for the government, and I think also for the provinces, to have considered and careful study given to this problem, in the light of changing factors, by a committee made up of representatives of all political parties and both houses of parliament. When this committee starts its work, one of the first things it will want to do will be to assess carefully the facts of social benefit that have emerged since the passage of the act in 1927.

As the house knows, successive amendments have been made to the original legislation, particularly those of 1937, 1947 and 1949, which have greatly extended the benefits and the coverage of this important social security measure. It will be found that the present old age pensions provisions-in the language of the Prime Minister (Mr. St. Laurent), by no means perfect-do provide features that make our legislation compare favourably with that of any other country in the world. Here are some of the facts that the committee will want to assess.

1. The number of pensioners has increased sevenfold, from 42,000 in 1930 to 293,000 in March of 1950.

2. The number of pensioners has doubled in the last thirteen years, from 146,524 in March, 1937, to 293,000 in March, 1950.

3. The maximum pension has been increased 100 per cent in the last seven years, from $20 at the start of 1943 to $40 in 1949. There has been a sixty per cent increase in pension in the last three years, from $25 in 1947 to $40 in 1949.

4. The amount of allowable income, including pension, has been increased from $365 per year to $600 a year for single persons, and $1,080 for married persons, with even higher limits of $1,200 and $1,320 where one or both spouses are blind.

5. The federal government's annual expenditures on old age pensions have increased threefold in seven years, from $33J million in. 1943-44, to $67 million in 1948-49, and to $103,626,000 in 1950-51.

6. Federal expenditures on old age pensions have more than doubled in the last three

years. For the fiscal year 1946-47 the expenditure on federal account was $45| million; for 1949-50 the expenditure on federal account was $94 million. When these figures are compared with those of comparable countries it will be seen that they represent a significant portion of expenditures on social security in one field, and are part of a significant contribution in the whole field of social security in terms of the total income or total expenditures of the nation.

7. Federal pension costs have increased in the last year alone by $27 million, from $66,764,285.03 in 1948-49 to $94 million, estimated, in 1949-50.

8. Total expenditures, federal and provincial, are today running at the rate of $135 million annually.

9. Since March, 1947, as a result of amendments introduced at that time, 77,000 new pensioners have been added to the rolls, a 35 per cent increase.

10. As a result of amendments made with respect to the blind in 1947, when the eligible age was reduced from forty to twenty-one years, the number of blind pensioners has increased from 7,311 in March, 1947, to 10,300 in March, 1950-an increase of 40 per cent in the three years following the 1947 amendments.

If one may say anything about the inadequacy, if that be argued, of the present measure, let no one fail to assess the very important contribution that has been made thus far, by the existing legislation and amendments, to the older people of our country.

I should, of course, add that a number of provinces have supplemented in varying degrees the statutory amounts provided to pensioners under the old age pensions legislation.

British Columbia leads the way in this by payment of a $10 supplement, without means test, to all persons on old age pension in that province, making a total available pension of $50 a month in British Columbia.

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
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SC

Solon Earl Low

Social Credit

Mr. Low:

The same is true of Alberta.

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
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LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. Martin:

Alberta also pays a supplement of $7.50 a month-

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
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SC

Solon Earl Low

Social Credit

Mr. Low:

$10 a month.

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
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LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. Martin:

-of $7.50 a month-

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
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SC

Solon Earl Low

Social Credit

Mr. Low:

$10 a month.

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
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LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. Martin:

-to all its pensioners on a basis similar to British Columbia, making a total available pension of $47.50 a month.

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
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SC

Solon Earl Low

Social Credit

Mr. Low:

May I interject at this point? I am sure the minister wants to have the

Old Age Security

facts. The budget introduced by Mr. Manning early this week provided for an extra $2.50 to the old age pensioners of Alberta, which brings the supplementary pension to $10.

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
Permalink
LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. Martin:

My hon. friend will see as I go along that I am not trying to draw invidious comparisons. When he hears my next remark I think he will be happy.

Saskatchewan pays a somewhat more modest supplement of $2.50 a month-

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
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SC

Solon Earl Low

Social Credit

Mr. Low:

That does not make me happy.

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
Permalink
LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. Martin:

-and even this is, of course, subject to a means test-not on the basis of regulations prepared by the federal government, but on means-test regulations of its own, and similar in principle to the means test applied in connection with the Old Age Pensions Act itself.

All three provinces provide, in addition to the cash supplements, fairly complete medical care and hospital service free of charge for their pensioners.

Ontario, Manitoba, and Nova Scotia, which formerly provided cash supplements prior to the increase in pension in May, 1949, have now discontinued these supplements; but Nova Scotia and Ontario provide a limited service in the field of medical care to their pensioners.

It will be apparent from the facts which I have recited that a great deal has been done, even within the framework of our present legislation, to improve the position of our aged citizens and to provide them with a measure of security equal to that which other countries provide for their older people.

The committee, I feel sure, will wish to study not only the facts of the present situation, but also the progress which has been made; and, in particular, it will no doubt wish to consider in the light of its study how our present program in Canada compares with schemes already in existence in other countries comparable to our own.

How does our program, for example, compare with that now in effect in the United States, Australia, New Zealand and the United Kingdom?

In the United States a twofold system is now in operation. First, a contributory insurance scheme has been in existence since 1935. Employers and employees each contribute 11 per cent of payroll to a special old age insurance fund. The federal government makes no contribution to that fund. From this fund are paid old age insurance benefits to insured persons sixty-five and over so long as they remain out of covered employ-

Old Age Security

ment. The average primary benefit after fifteen years of contributions amounts at present to approximately $26 a month. This benefit is forfeited in any month when the beneficiary earns more than $15 in covered employment. Today approximately 1,200,000 retired workers, 10 per cent of the United States population over sixty-five, receive benefits on behalf of themselves and their dependents under this insurance program.

Second, side by side with this insurance scheme-the house and the committee will want to know and to consider this-we find in the United States an old age assistance program similar to that in effect in Canada. The numbers receiving old age assistance have continued to grow each year, despite the expectation that as the contributory insurance scheme developed the numbers on the means test program would decline. The maximum contribution to any state old age assistance scheme from federal funds is $30 -exactly the same as the federal contribution under the Canadian program. The federal government in the United States, however, contributes seventy-five per cent only in respect to the first $20; whereas in Canada the federal government contributes seventy-five per cent in respect to the first $40 of any pension paid.

While the federal contribution in the United States is roughly comparable to that under the Canadian scheme, state contributions are in some cases more generous than those made by the Canadian provinces. The result is a wide range in average benefit payments-from $19 a month in Mississippi to $75 a month in Colorado. The average means test pension for all states is just under $45. Almost 2,700,000 individuals-twenty-three per cent of the aged population-are receiving assistance under this means test program. The means test itself varies from state to state, but is on the whole more severe, as the committee will find, than in Canada.

In the state of Michigan, which I know best because of its proximity to my own city and my own constituency, the pensioner, either single or married, who has real property exceeding $6,000 in value is automatically debarred from pension, and the provisions effective in Michigan are among the most generous in that country. What is the situation in Canada in this regard? Such a person in this country would have his property taken into account on a fair rental value basis in the calculation of his income, but would undoubtedly be entitled to a partial or full pension, depending on his marital status. Likewise, in the state of Michigan, an individual with cash in the bank in excess of $500, or $750

if married, is automatically debarred from pension until he reduces his cash reserves to the figures mentioned.

Under the scheme in our country, a single pensioner can have between $1,400 and $1,500 in the bank and still draw full pension. He is not completely debarred unless he has liquid assets in excess roughly of $6,000, because the calculation is not on the basis of liquid assets but on the basis of income derivable from those assets.

In the case of married pensioners, in Canada, a man and his wife would have to have liquid assets of almost $12,000 before going off pension altogether; and if the wife is under seventy years of age and not on pension, a married man could have close to $7,000 in the bank without affecting his right to a full pension of $40.

I wonder if hon. members who have been criticizing the administration have taken into account the liberality of the provisions of our Old Age Pensions Act as against those on a comparable basis. These comparisons are given to illustrate the great variance of the means test as it is applied in various countries.

In a committee such as the one now proposed, it would no doubt be the wish of the house to give detailed study to various features of the legislation in other countries whose systems are comparable to our own. It will be helpful, I believe, to have the committee examine, for instance, the New Zealand system, which has been referred to so often in the house, and which has an interesting feature known as the universal superannuation plan. Under this act at the present time payments are made, based on contributions under the general social security tax but without a means test, to all persons of sixty-five years and over.

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
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CCF

Angus MacInnis

Co-operative Commonwealth Federation (C.C.F.)

Mr. Maclnnis:

Mr. Speaker, may I ask the minister if those contributions are made specifically in regard to the old age pension-the universal superannuation benefit, which is the real name for it-or is it for the total social security?

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
Permalink
LIB

Paul Joseph James Martin (Minister of National Health and Welfare)

Liberal

Mr. Martin:

Topic:   APPOINTMENT OF JOINT COMMITTEE TO STUDY
Subtopic:   LEGISLATION, ALTERNATIVE METHODS, ETC.
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March 10, 1950