Madam Speaker, our position regarding Bill C-326, an act to amend the Canada Pension Plan and the Old Age Security Act, is unchanged since the debate at first reading. We cannot support paying old age security and Canada pension plan benefits on a biweekly basis.
Please allow me to start by assuring everyone that the Government of Canada is committed to the well-being of seniors and continues to seek ways to address their needs now and into the future. I might add that I find it shameful that members of the opposition parties are using seniors as a political ploy, a tool, for a matter of such importance. I know that many seniors across Canada, and certainly in my great riding of Richmond Hill, appreciate the fact that they get their cheques once a month. They are used to it. I have not had, and we have not heard, an overwhelming number of seniors across the country saying that the payment terms should be changed.
I am certain that the notion of paying Canada pension plan and old age security benefits to seniors on a biweekly rather than a monthly basis was proposed with the best of intentions. However, our government's priority is reducing administrative costs to ensure the maximum amount for seniors' benefits. The less we spend on administration means more money in the pockets of seniors.
The government recently undertook a significant cost-cutting exercise to reduce duplication, overlap and redundant processes across government to ensure the greatest value for taxpayers' dollars. We recently implemented a one-for-one rule to reduce government red tape. Not only will this transformative measure reduce the bureaucratic administration of government, it will also reduce the cost to businesses and create jobs and growth.
Clearly, we are passionate about reducing the size of government and reducing redundancy within government. As a result, the government cannot support a bill that would increase the administrative cost of government by tens of millions of dollars in a time of fiscal restraint, nor is it something that Canadians want to see from coast to coast to coast, nor is it something in particular that our seniors are asking for or want to see from coast to coast to coast across our great nation.
As the first two pillars of Canada's retirement income system, the OAS and CPP are designed to provide a modest base upon which to build additional income for retirement. This year, our public pension system is projected to provide Canadians with close to $76 billion in benefits.
However, in regard to the public pension system, we cannot support Bill C-326, because it does not make sense from a financial administration perspective. In fact, making the change would result in additional costs and would increase the taxpayer dollars devoted to running the OAS and CPP. This type of increase is exactly what we are trying to avoid.
Let me underscore that our government has many good reasons for opposing a change in the frequency of payments to CPP and OAS.
To start with, monthly payments ensure an efficient administration of the OAS and CPP programs. The practice represents an efficient use of taxpayer dollars and serves the needs of seniors, and after all, that is what we are here to do. Monthly payments have the advantage of ensuring every senior receives what he or she is entitled to by allowing the department time to respond to any changes to the individual's eligibility status, such as marital status or income. By giving the department the time to respond to these changes, monthly payments help to avoid the subsequent complications associated with recuperating overpayments.
As the number of seniors increases with the coming demographic shift, we are focused on the effective, timely and efficient delivery of services for our seniors.
Our goal is to streamline processes, not complicate them. That is precisely why budget 2012 introduced the proactive enrolment of OAS benefits, to make it easier for many seniors to get their benefits.
Let me remind all members of the House that the first of Canada's baby-boomer generation have started to enter their senior years. Within less than two decades close to one in four Canadians will be over 65 years of age.
Governments have limited resources and Canadians expect programs to be delivered as efficiently as possible. Service delivery includes processing new applications, responding to inquiries, changing addresses, updating banking information, issuing millions of cheques and deposits, and more.
The practice of paying benefits at the end of each month was adopted to provide the best service possible and is consistent with the delivery of other income support payments both in Canada and in other countries.
To ensure the efficient delivery of not only CPP and OAS but all benefits payments, Service Canada works in partnership with Public Works and Government Services Canada, Canada Post and the banks to coordinate the financial transfer of benefit payments.
From a practical standpoint, the current payment schedule gives all the agencies involved enough time to note changes in a client's profile, determine the amount of benefit payable and coordinate the transfer of payments. Each of these organizations has developed work plans based on a payment date that is on the third last banking day of each month. A biweekly payment schedule would make it more difficult to process and issue the benefits in a timely manner.
During the last fiscal year, 90% of old age security payments were made through direct monthly deposit with the remainder being paid by cheque. The numbers were similar for CPP, with 87% of recipients receiving their benefits through direct deposit.
In a time of spending restraint, it would be difficult to justify the cost involved in changing the payment schedule for CPP and OAS. Were it to be universally adopted, a biweekly payment schedule would more than double the number of transactions for CPP and OAS benefits, resulting in increased administrative costs and difficulties processing and issuing benefits in a timely manner.
Public Works and Government Services Canada estimates that the proposed bill would increase the total cost of payment administration and processing by about $18 million per year. This includes such direct costs as postage, banking fees, printing services and cheque reconciliation for both direct deposit and cheque payments.
The system's costs for information technology alone would be significant. Service Canada estimates the transaction cost could be as high as $30 million. It would also require amending both the OAS and CPP acts. This would mean additional and unnecessary costs.
Seniors have worked hard all their lives and they count on their pensions to be delivered consistently and in a reliable manner. It is incumbent upon us as a government to ensure that they get their payments on time reliably every single month.
We have reviewed the changes proposed in Bill C-326, and we believe they cannot be justified given our fiscal realities, nor can we justify the risk the changes pose to the efficiency of service delivery. We want to be as efficient as possible.
For these reasons our government cannot support the bill in a time of fiscal restraint. I urge all hon. members in this House to join me in opposing it.