Mr. Speaker:

I have a short correction to make. At page 1045 of Votes and Proceedings for yesterday there appears an entry relating to the tabling by the Minister of Finance, pursuant to standing order 40, of the public accounts, volumes I to III, and an abridged version thereof.

At the same time a copy of the annual report of the Auditor General of Canada for the fiscal year ended March 31, 1964 was also tabled but through an oversight it was not recorded in yesterday's Votes and Proceedings. A record will be made in today's issue of the tabling of this annual report.

Right Hon. L. B. Pearson (Prime Minister):

Mr. Speaker, I have a short statement to make about old age security. The government, and I am sure all hon. members of the house, have read with great interest the proceedings of the joint committee on the Canada pension plan, and I would like if I may, Mr. Speaker, to take this opportunity of congratulating the joint chairmen and the representatives of all parties who were members of the committee. I think I speak for all members of the house when I express appreciation for their work, most of which was done during the recess.

Hear, hear.

Mr. Pearson:

In reviewing the representations made to the committee, its discussions and its report, the government has come to the conclusion that there should be certain amendments on the lines recommended by the committee, though not identical in all respects, and there is also one major change that should be made in Bill No. C-136 consequent upon the work of the committee. Many of the representations made to the committee were concerned not with the new earnings-related pension as such but with the flat rate pension which is now provided at age 70 for virtually all Canadians under the Old Age Security Act. Some of the proposals put forward are ones that everyone would like to act on, but they are too expensive for the government to accept as financially responsible at this time when there are so many other things that we in Canada need to do.

One of the most urgent of our social needs, however, is to make pensions available at age 65. Bill No. C-136 proposes to do this, over a five year transition period, both for the new earnings-related pension and the flat rate old age security pension. Under the bill as it is now before the house old age security would be paid in a reduced amount the earlier it is taken. Many of the people and organizations submitting briefs to the committee pointed to hardships that this reduction could involve. After reviewing such representations the government has come to the view that it should recommend to parliament that old age security be paid in the full amount from the time people are 65.

Hear, hear.

Mr. Pearson:

That amount at present is, of course, $75, to which it was raised in 1963. Under Bill No. C-136 the $75 will in future increase automatically if the cost of living rises. The additional change the government now recommends is that, beginning next January, the full pension will be paid to people who have reached age 69; the following year the full pension will be paid at age 68, and so on until by 1970 everyone reaching age 65 will be entitled to the full amount of $75 or more, in addition of course to the Canada pension plan benefits which will then be available to newly retiring people.

The government will move this amendment to Bill No. C-136 when the relevant sections in part IV are reached in committee. Since additional expenditures are involved, I hereby give notice of the necessary resolution, in the name of the Minister of National Health and Welfare, which might be taken to the table now, Mr. Speaker. I should make it plain that the old age security pension at age 65

Canada Pension Legislation will not be subject to any retirement or means test.

Hear, hear.

Mr. Pearson:

Old age security is a universal, flat rate benefit, and we do not believe that conditions should be applied in a federal program of this kind. At the same time, however, the government does think it reasonable to recognize that the needs of people between 65 and 70, when many are retired but some are not, vary a great deal. It is therefore the government's intention to recommend to parliament that the Income Tax Act be modified so that the additional personal deduction of $500, now available from age 65, will in future begin at age 70.

This change will, of course, be made only in stages as the old age security benefit becomes available to people at ages earlier than 70. The withdrawal of the additional deduction will not affect people who have little or no income apart from old age security. It will affect only those people between the ages of 65 and 70 who have other resources sufficient to put them into a taxable category.

What is now proposed, Mr. Speaker, will of course cost money. We believe, however, that this cost can and should be met. Through the conjunction of old age security and the Canada pension plan we will have a pension system that puts Canadian social justice in the forefront of achievement throughout the world.

Hon. J. W. Monleiih (Perth):

Mr. Speaker, we are now seeing what I think is the fifth edition of the Canada pension plan. May I say immediately that we as the official opposition heartily agree with this particular step. If I recall correctly, moves along this line were suggested in the committee but were opposed by the government majority in that committee.

I think there is one thing I should mention, and that is that I do not think it is entirely equitable to have the $75 becoming payable to people aged 69 one year from now, to those aged 68 two years from now, and so on. Another matter that the Prime Minister did not mention-at least if he did I failed to hear it-was whether the extra payment was to come out of Canada pension plan funds. I am not sure whether the Prime Minister did mention that, but at this stage I think that is all I can say. We will be discussing the plan further. The official opposition at that time will have many more suggestions to make which can improve this present plan;

and I believe the government should take these further suggestions into consideration when a major step like this is being announced.

Mr. Stanley Knowles (Winnipeg North Centre):

Mr. Speaker, on behalf of this party I want to express our very warm appreciation of the announcement made today by the Prime Minister. Even though I might wish that the announcement had gone further, what has been announced indicates the value of the work which was done by the joint committee on Bill No. C-136.

I want most of all to say that what is being proposed in this announcement does establish a very important principle, namely that the flat rate old age security pension should be available without a means test at ages below 70. I wish the full pension could start at 65 right away, but at any rate the principle has been established that we are to get down to 65 as the universal age for the paying of pensions under the Old Age Security Act.

With regard to the principle, I wish only to say that it is good and that it is warmly welcomed. In my view the government has done well to pay attention to some of the arguments which were put forward in the joint committee, particularly with respect to the earlier proposal of the government to pay old age security at ages between 65 and 70 at a reduced rate. The government has now come to the realization that that is not a good idea but that instead we are going to have the full amount of the old age security payable at these lower ages. I must say that I wish the progress could be a little swifter in getting down to the age of 65, but at least we are getting it started.

I hope that even yet the government will study the other phases of the work of the joint committee and will note that there was very strong support in the committee not only for lowering the eligible age for old age security but for increasing the amount of the pension under that act. While it is true that my amendment to raise the pension to $100 per month did not receive the support of the committee, there was support for raising it by some amount.

I remind the government that when it brought in the first version of the Canada pension plan in 1963 it recognized that coincident with the Canada pension plan there had to be an increase in the amount of old age security. That increase was brought in separately in 1963, but I submit that when the Canada pension plan benefits begin to be

received by Canadian citizens in 1967, it will not be good enough to leave the fiat rate old age security benefit at $75 per month. Just as the government has now made an announcement as to what is going to happen in 1966, 1967, 1968, 1969 and 1970, I think it should make an announcement as to its intentions for increasing the basic amount of old age security. It is still my view, and the view of this party which has backed me in the move I made in the committee, that the pension ought to be $100 per month payable at age 65.

Nevertheless, Mr. Speaker, we welcome the announcement that has been made, and we are particularly glad that an important principle has been established, namely that the flat rate universal pension is to be paid to Canadians at age 65.

I have just one other comment to make. I noticed the suggestion of the Prime Minister that the $500 extra exemption on income tax, which is now available to persons age 65 and over, is to be removed progressively. I gained the impression that it is to be removed one year at a time. May I suggest to the government that there is still time to deal with this suggestion, and that if the government feels that with these pensions being paid at these ages it is not necessary to have the differentiation that existed, rather than take away the $500 extra exemption from those over 65 it would be better to increase the exemption for everyone to at least $1,500 under the Income Tax Act. I think that is the kind of change which ought to be considered by the Minister of Finance when he brings down his budget.

Mr. Speaker, hon. members are well aware of the improvements we should like to have made, and I hope I have set them out clearly in the few remarks I have made to the house. But even if there is some suggestion of criticism, and a clear suggestion that something more should be done, on behalf of this party and on behalf of the Canadian people I would state that we welcome the kind of announcement which has been made today.

Mr. Bert Leboe (Cariboo):

Mr. Speaker, on behalf of this group I should like to say at once that we are very happy the government has seen fit to bend its ear and pay attention to the proceedings of the Canada pension plan committee, which did work hard to produce results. I was interested in the announcement by the government to the effect that the gap between ages 65 and 70 will be filled. I refer to that gap as the time between the

Canada Pension Legislation normal retirement age of 65 and the eligible age for old age security at 70. We are very happy that this gap is being closed, and we should like to commend the government in this regard.

Mr. Speaker, I am very much concerned about the indexing or tying of the pensions to the cost of living. I am not suggesting that an increase is not needed, but I do think a periodical review is a much superior system to indexing, because by indexing we are opening a door which is tantamount to the lid of Pandora's box. I think we will find ourselves being pressured into indexing for many other purposes with the result of a lessening of the bands on inflation. I think the government should take a very serious look at this situation. If we were to make a proper analysis at this time of the cost of an increase in the amount of old age security payments I think we would find that the overall cost to the Canadian people would not be nearly as great as it might appear on the surface, because if you give the people of Canada something as of right you remove the necessity to give them something because they happen to be unfortunate and in need.

I certainly hope the government may see fit to increase the old age security payment substantially over the amount now paid because, as I have said, I do not think it will cost the taxpayers too much.

Mr. Real Caoueiie (Villeneuve):

Mr. Speaker, I was very interested to hear the Prime Minister (Mr. Pearson) state in the house that he intends to become more and more creditist between now and 1970, when he announced that in 1970, old age pensions will be paid without any means test, mind you, to every person aged 65 and over.

Now, this is precisely what the Ralliement Creditiste advocated during the 1962 and 1963 election campaigns. At that time, the Liberals, who are now trying to interrupt me, were afraid of inflation. But when such a suggestion comes from the Prime Minister of Canada, undoubtedly, inflation is no longer a danger.

Mr. Speaker, we are all for the payment of a monthly pension of $75 at age 65, but as pointed out earlier by the hon. member for Winnipeg North Centre (Mr. Knowles), what are we going to do about our older citizens until 1970?

At that time pensions of $75 a month will no longer be sufficient. Why not provide immediately for such an old age pension for

Introduction of Legislation the benefit of those who are 65 or older. In addition, people who have reached the age of 60 and who are in need could, after investigation if you wish, be given a similar pension which would enable them to live or at least to survive in their country, Canada.

Mr. Speaker, the statement made by the Prime Minister to the effect that such a pension will be paid in 1970 is nothing but window dressing. Tonight, some old people will feel pretty good when they hear on television the news that they are to get a pension of $75 a month at the age of 65. However, it will not be before they are 69 that they will be entitled to a pension of $75 a month.

At any rate, the pension of $75 a month announced by the Prime Minister and payable at the age of 65, starting in 1970, will no longer be sufficient at that time. I am sure that before 1970 we will have to consider the possibility of providing a pension of $100 a month for all Canadians who are 60 or over.

Consequently, Mr. Speaker, we shall support Bill No. C-136, amended as the Prime Minister just announced. Still, we feel that that is too little and that it is merely window dressing. The government will have to introduce more concrete and complete legislation to help Canadians who are 60 or over. [Text]

Hon. Paul Martin (Secretary of Stale for External Affairs):

Mr. Speaker, I would like to table in French and English the texts of an agreement between the government of Canada and the inter-American development bank signed in New York on December 4, 1964.