Human Resources Development Canada. File Blocks 3000-3999, Income Security : Almost all of today's seniors receive income from Canada's Public Pensions. Basic financial support is also available to survivors and to people who become too disabled to work and their children. Income Security Programs delivers these pensions and benefits through the Old Age Security (OAS) program and the Canada Pension Plan (CPP). Together, the OAS and CPP provide a modest base upon which Canadians can build their retirement income.
- 1927-2002 Public Pensions, 75 years of Helping Canadians.
An overview :
1867-1914 : Age and poverty : When Canada was still an agricultural society, most Canadians did not 'retire" but worked into old age. Many seniors lived in extreme poverty because public assistance was difficult to obtain.
1915 - 1927 : Our first old age pension : Politicians, including James Woodsworth and Abraham A. Heaps, pressed for a national pension scheme to help seniors. In 1927, William Lyon Mackenzie King's government made social history by passing the Act Respecting Old Age pensions and establishing Canada's first pension for seniors.
1928-1951 - Demanding more : Even with the 1927 Old Age pension, seniors had difficulty coping with the financial hardships of the Depression and WWII. In the 1940s, Unemployment Insurance and Family Allowances were introduced to assist workers and their families. In 1951, the Old Age Security Act was passed (to be implemented in 1952)
1952-1967 - Reducing poverty : The Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) were introduced in 1966 to provide tax-paying workers in Canada with an employment-based pension plan. The Old Age Security pension became more widely available and the Guaranteed Income Supplement was offered to the poorest seniors.
1968-1989 - Reaching more Canadians : Public pensions were expanded (the Guaranteed Income Supplement became permanent, the Spouse's Allowance and Widowed Spouses Allowance were introduced, etc. ) to provide additional help to women, low-income seniors, persons with disabilities and Aboriginal peoples. In 1979, Canada entered into an international social security agreement with Italy - the first over 40 such agreements with other nations that have public pension systems.
1990-2000 - Pensions on solid ground : With more people receiving public pensions, the Government of Canada and the provinces made changes to the Canada Pension Plan to put it on solid financial ground. They set up a plan for increasing CPP contribution rates to build up a larger fund while the baby boomers are still in the workforce, and created the CPP Investment Board to invest the fund in the markets at arm's length from government for the best possible rate of return. Benefits were also extended during this period to people living in common-law relationships with a partner either of the opposite or of the same sex.
From 2000 on - A secure future : Almost 20 million Canadians benefit from or contribute to our public pension system. Canada's public pensions are a significant part of our seniors' income. Our pension system is recognized internationally for improving the financial security of Canadians throughout our lives.
Reflecting on Canadian values of social justice and greater income equality, our public pensions also provide extra help for seniors who have low or modest incomes. The Guaranteed Income Supplement and the Allowance were added to the OAS program to ensure that these members of our society could maintain a reasonable standard of living.
- The History of Unemployment Insurance
Fundamental goal: to provide income support for people who are temporarily without work.
The primary role of the current UI program remains that of income replacement through social insurance. However, the program is now also expected to contribute to the achievement of goals such as the promotion of equity through income redistribution, to labour market adjustment and to macroeconomic stabilization.
Despite these trends, by the 1920s, Canadian policy still reflected the belief that obtaining and retaining employment and providing the basic essentials of life were largely an individual matter. The Great Depression forced a change in the attitudes of Canadians and their governments towards unemployed people.
The Great Depression of the 1930s forced a change in the attitudes of Canadians and their governments towards unemployed people. It was no longer possible to categorize them as lazy and of bad character, or to suggest there was something ennobling about poverty. The combination of these rapid changes in social attitudes and the example of government responses to the crises in Britain, Europe, the United States and elsewhere created demands for Canadian governments to act. Tied to that was the realization that, even if they had the potential authority to act, most provinces had little capacity to finance such programs.
Employment and Social Insurance Act, June 1935.
1940, Unemployment Insurance Act.
Once the King government was reelected in 1940, creation of an unemployment insurance program took only three months, with a federal-provincial agreement, a constitutional amendment, and introduction, debate and passage of legislation through both houses of Parliament.
The program paid benefits only in cases where the insured person was unemployed, capable of, and available for, work and unable to obtain suitable employment. There were no special provisions to recognize layoff due to illness, injury, quarantine or pregnancy and no provisions for payment of benefits on retirement.
The Act gave a claimant whose claim was disallowed the right to appeal to a Court of Referees. The Court of Referees was composed of a chairperson appointed by the Governor in Council, a number of members representing employers and an equal number representing employees. Under certain conditions, a further appeal to an Umpire was allowed. The Umpire was chosen from the judges of the Exchequer Court and the Superior courts of the provinces.
The Act stated that UI contributions were to be credited to a special account in the government's consolidated Revenue Fund called the Unemployment Insurance Fund. The government's form of a grand of one fifth of the aggregate contributions of employers and workers.
The Minister of Labour was responsible to Parliament for the UI Act. The Act created the UI Commission to administer the program.
The UI Act of 1940 was in force until 1955, a 15 year period during which the program was established and grew rapidly.
Supplementary Benefits Legislation.
In response to the increased unemployment and a health surplus in the UI Fund, the government amended the UI Act early in 1950. The most significant change was the creation of a new kind of benefits. Supplementary benefits, as they were called, were payable to people unable to qualify for regular benefits and included those :
- whose benefit rights had been exhausted since the preceding March 31st or
- who had at least 90 daily contributions since the preceeding March 31st.
Benefits for sick claimants.
An important amendment to the Unemployment Insurance Act in August 1953 allowed continuing benefit payments for claimants becoming ill after having left a job. Although some left the amendment was legitimizing what was already happening, this marked the 1st time the requirement that claimants be capable of work was formally set aside.
On October 2 1995, the 1940 Act was repealed and replaced with the revised and consolidated Unemployment Insurance Act, 1955. In broad terms, the new Act contained a number of departures from the original. Its purpose, as noted in the throne speech of that year, was to introduce amendments designed to make unemployment insurance more effective in providing financial support to the unemployed. It was designed to respond to various changes in the labour market that had arisen since 1940.
The new UI Act covered 75 percent of Canada's 4.4 million wage earners and salaried employees. Introduction of the new Act required modifications to many of the regulations. For example, the married women's regulation changed to reflect the move from daily approach to the new weekly approach of the 1955 Act. New seasonal regulations were formulated in an attempt to increase their effectiveness. The new UI Act was introduced at the end of a long period of strong economic and labour-force growth in Canada, and at the end of an era of largely unchallenged federal dominance in intergovernmental relations. The program now demonstrated the belief that a strong central government could meet needs of working people that extended beyond the narrow focus of the original 1940 program.
UI was also affected by the larger social and economic policy. In general, the 1950s, and particularly the 1960s, saw steadily greater involvement by government in most areas of Canadian life.
From 1955 to 1971, the basic shape of the program changed little during this period. However, UI was the focus of a series of studies that began in 1961. These studies, and the broader trends in government, set a stage for the larger UI program that resulted and for a number of other income support programs. In 1956, extension of coverage to people in the fishing industry.
1965 was a particularly important year, it marked the introduction of the Canada and Quebec Pension Plans.
Under the Government Organization Act, the powers, duties and functions related to employment services were transferred yet again, this time, from the Minister of Labour to the Minister of the newly created Department of Manpower and Immigration. This was intended to create one department that could manage all employment development services including immigration. As part of that process, the number of NES offices was expanded and they were now called Canada Manpower Centres. Responsibility for UI and the Commission remained with the Minister of Labour (1966).
1969. The Report of the Study for Updating the Unemployment Insurance Programme suggested the aims of the UI program were the relief of hard-ship from short-term unemployment, minimizing barriers to greater output coordination with other federal programs, reduced administrative and compliance costs, maximum contribution to economic stability and an equitable allocation of costs.
On June 17 1970, the Hon. Bryce Mackasey Minister of Labour, tabled the White Paper on Unemployment Insurance in the House of Commons. It was then referred to the Standing Committee on Labour, Manpower and Immigration for study and comment. In his introductory remarks to that Committee, Mr. Mackasey said that the review and updating of the UI program was aimed at eliminating some of the welfare elements, such as seasonal benefits, which had a more appropriate place in other social legislation.
Coverage under the new program was to be universal. It was to be extended to virtually all workers who could be considered employees with enriched benefits and lower contributions. Benefits would be substantially increased and related to the worker's income. A wider range of benefits was also to be created. Not only would benefits be paid for interruptions of earnings from layoffs, but also when earnings were lost because of sickness and pregnancy. A special severance or retirement benefit would be available to insured workers who qualified for a pension under the Canada or Quebec Pension Plan.
1971. He said its main purpose was to assist people temporarily out of work and facing the problem of insufficient income during employment.
Most of the major benefit structures and levels proposed in the White Paper were carried over into C-229.
A review of previous public attitude studies on the UI program recalled that Canadians wanted UI income protection but were suspicious of those protected. This reaffirmed the ambivalent attitude of Canadians toward UI. Experience rating of employers was rejected by the Review. It concluded that the impact would be limited and would require complex and costly administrative arrangements. (1977) The review suggested two major amendments to the UI program. The first was the replacement of the existing five-phase benefit structure with a three-phase benefit structure. This was meant to overcome various problems.
In its conclusion, the Review restated the significant role of the UI program in Canada, its changing orientation from insurance to income transfer considerations and the possible direction of the program with the social security system, the labour market and economy in the years to come.
The Review provided much of the rationale for the second major set of amendments to the 1971 legislation. Bill C-27, the Employment and Immigration Reorganization Act, was tabled for the first reading on December 9, 1976. Minister Cullen notes that the bill had two objectives:
- to integrate the Department of Manpower and Immigration and the Unemployment Insurance Commission and
-to make three major changes to the UI Act.
These changes were an increase in the number of insurable weeks to qualify for benefits from eight to 12 weeks, a three-phase benefit structure and the use of UI funds for income maintenance for claimants on approved training courses, job creation projects and work sharing arrangements.
Reintegration of UI with the employment functions was meant to reflect the increased scope of both operations, the need for more consistent policy advice than was possible with two distinct structures and the significant harmonization that had developed. Including immigration in the new organization maintained recognition of the important social objectives of the program and their impact on the labour market.
The tripartite management of the Unemployment Insurance Commission was to be continued and enhanced in the new organization. The legislation called for the new Canada Employment and Immigration Commission with four corporate officers (a chairperson, vice-chairperson, commissioner for workers and commissioner for employers). The new Commission was to be responsible for administering the labour market, the employment, unemployment insurance and immigration programs and the policies underlying those programs.
A smaller Department of Employment and Immigration was also created by the legislation. It was to be responsible for strategic policy development, program evaluation, labour market research and public information services. The Department was to ensure links between the Commission's policies and programs and the government's overall economic and social strategies. The chairperson and vice-chairperson of the Commission would be the Deputy Minister and Associate Deputy Minister, respectively, of the Department.
The new legislation also created the new Canada Employment and Immigration Advisory Council to help the government's co-operation with the private sector and, in particular, labour and management. It was to be made up of a chairperson and 15 to 21 members. One third of the members would be appointed after consultation with organizations representing labour and one thirst after consultation with organizations representing management.
The benefit structure proposed in C-27 was the same as the one in the Comprehensive Review. Under the 1971 Act, claimants with 12 weeks of insurable employment could be entitled to 48 weeks of benefits, whereas under the C-27 proposals, maximum entitlement would be 32 weeks. The savings arising from the changes were to be redirected to create new employment opportunities as well as to help prevent unemployment. This was seen as a more effective allocation of resources.
C-27 also contained administrative amendments and amendments to correct minor drafting errors and to clarify specific sections of the Act. Perhaps the most notable change related to the broadening of the right to appeal Board of Referees' decisions. It gave all claimants and employers the right to appeal to the Umpire against a unanimous decision of the Board of Referees, as had been recommended by the UI Advisory Committee in 1976. The bill also called for more Federal Court justices to hear appeals in an effort to cut backlogs. It was noted that the new appeal provisions would be implemented only after consideration of the findings and recommendations of the Law Reform Commission, also studying administrative practices in the UI program.
(1981) On July 7, 1981, the Report of the Task Force on Unemployment Insurance was tabled in the House of Commons. The Report traced the evolution of the UI program and examined and assessed the impact of the program on the Canadian economy and society, especially in the period from 1971. ... Early on, the Task Force decided to exclude fishing benefits from its review of the UI program. The Task Force concluded that although there were signs of a developing consensus that the UI program had to change, there was little agreement about the scope or nature of that change. The disagreement arose from differences of opinion about the proper role and objectives of an unemployment insurance program and about its place within Canada's income security strategy.
In the face of this disagreement about 'ends', the Task Force decided not to attempt to propose a radical restructuring of the philosophy or principles of the UI program. Instead, it chose to try to find practical changes that, if adopted, would eliminate or significantly reduce inequities, promote labour market adjustment and simplify program administration.
Royal Commission on the Economic Union and Development Prospects for Canada (the MacDonald Commission)
The Royal Commission on the Economic Union and Development Prospects for Canada was chaired by Donald Macdonald, a former Minister of Finance. It commissioned numerous analyses by economists and others of aspects of the economy during its work between 1982 and 1985. Some included studies of UI as one of a wide range of issues affecting the overall health of the Canadian economy.
The August 1985, final report of the Commission recognized that the UI program had been of great help to many Canadians during the high unemployment of the early 1980s. However, it concluded that certain UI provisions hurt the effective operation of Canada's labour market. In particular, the Commission argues that the UI program :
-contributed to an increase in the duration of unemployment;
-increased the volume of temporary lay-offs;
-reinforced the concentration of temporary and unstable jobs in high-unemployment and low-wage regions; and
-provided too generous a subsidy to Canadians whose labour force behaviour was characterized by repeated unstable employment.
The Commission criticized the wide-ranging role of the UI program. It suggested that other programs be created to provided a guaranteed annual income and to meet the needs of the long-term unemployed. It argues for a smaller UI program linked much more strongly to insurance principles with lower benefits and higher qualifying criteria. It suggested that regional benefits be eliminated, that financing costs be amended to relive the cyclical burden on the private sector during recessions and that experience rating of premiums be introduced on a business-by-business basis.
The Commission of Inquiry on Unemployment Insurance (the Forget Commission)
Two months after the Progressive Conservative Government of Prime Minister Brian Mulroney was elected in September 1984, it made an economic statement that promised a comprehensive review of UI. The six-person Commission of Inquiry on Unemployment Insurance, under Claude Forget, began its work almost a year later. Its work drew on the Macdonald Commission's research but also involved public hearings and submissions.
The Commission heard some 475 p678
