Proceedings of the Standing Senate Committee on
National Finance
Issue 20 - Evidence - November 5, 2014
OTTAWA, Wednesday, November 5, 2014
The Standing Senate Committee on National Finance met this day, at 6:45 p.m., to study the subject matter of Bill C-43, the Economic Action Plan 2014 Act, No. 2; in particular, Part 4, Division 14, clauses 225 and 226.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: Honourable senators, we are continuing our study this evening on the subject matter of Bill C-43, A second Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures.
[English]
This afternoon we covered quite a bit of material, but we didn't quite finish Part 4, Division 14, Employment Insurance Act, clauses 225 and 226, which can be found at page 370.
From Employment and Social Development Canada, we welcome back Annette Ryan, Director General, Employment Insurance Policy, Skills and Employment Branch; and Helen Smiley, Director of Regulatory and Revenue Policy Design, Employment Insurance Policy.
From Canada Revenue Agency, we welcome back as well Ray Cuthbert, Director, CPP/EI Rulings Division, Legislative Policy and Regulatory Affairs Branch.
From Finance Canada, we welcome François Masse, Chief, Labour, Market, Employment and Learning.
This is Division 14. We were well into your explanation of clause 225, Mr. Cuthbert, and I had actually two names on the list, but we're down to one now. I think it would be helpful if you could give us a two-line précis of where we were in terms of the purpose of this particular section. What's it all about?
Ray Cuthbert, Director, CPP/EI Rulings Division, Canada Revenue Agency: The small business job credit is designed to refund a portion of employer EI premiums back to employers if they meet the eligibility requirements. Those requirements are that they must have $15,000 or less in employer EI premiums in the years 2015 and 2016. The credit will be calculated automatically by the Canada Revenue Agency when the employer's T4 information return is processed. The credit is calculated by taking a $0.28 reduction to the legislated premium rate, multiplying it by the amount of insurable earnings of the employees of that business and multiplying it by a factor of 1.4. That's the credit. The credit itself must be greater than $2 and no interest is payable. That's how it works.
The Chair: To have a maximum of $15,000 that the employer is paying in, can you estimate or tell us what the gross salary of all the employees would be? Have you got that in your head?
Mr. Cuthbert: I actually have it here. It would be the maximum insurable earnings to get that amount of premiums, and for an employer situated outside of Quebec it would be $569,908.81.
The Chair: That would be an employer that had that kind of salary base?
Mr. Cuthbert: Yes.
The Chair: Thank you. That's helpful.
[Translation]
Senator Rivard: I am not against the federal government not paying interest. It seems that it would be more administratively cumbersome if the federal government was to refund 1 per cent or 2 per cent of $350. However, are you not concerned about creating a precedent? For instance, when a taxpayer or a company pays insufficient installments or is late with the GST rebate, the government often imposes penalties and fairly high interest rates. If the opposite is true, and I have the right to a tax refund, which the government provides five or six months later, the government is much less generous. In such cases, I understand that the amount is only $350. Do you think it is fair that interest is not paid to companies entitled to a refund?
François Masse, Chief, Labour, Market, Employment and Learning, Finance Canada: What needs to be pointed out is that companies do not need to register to benefit from this credit. Companies will pay their installments — their contributions to employment insurance over the course of the year — and, at the end of the year, the Canada Revenue Agency will automatically do the calculations and issue due payment. The chances of a payment being late are very low, as this is done automatically by the government. If any money is due to the Canada Revenue Agency, the payment will be deducted from those amounts. If no money is due, a refund will be issued. Given the red tape this could create, the decision was made to forego the interest in such cases.
Senator Rivard: I think that is reasonable. Thank you, Mr. Chair. This answers my questions.
Senator Chaput: You mentioned that there were 780,000 small- and medium-sized companies in Canada. Did I understand that correctly?
Mr. Masse: That is correct, but I will provide some context. The 780,000 figure represents the number of employers expected to be eligible for the credit. The total number of companies in Canada is 1.2 million. The number of employers who would be eligible to receive the credit is 780,000.
Senator Chaput: Are you talking about SMEs when you say 1.2 million?
Mr. Masse: No, that is the total number of employers.
Senator Chaput: Okay. The 780,000 represents companies that have a payroll of at least $569,000.
Mr. Masse: Exactly, but I should clarify. You are correct, but there is a small detail I want to point out. Employers with no payroll are not included in that figure. So, the 780,000 represents companies with a payroll from $1 to $569,000, as Mr. Cuthbert said.
Senator Chaput: The maximum refund those companies could receive would be about $350. What would the minimum amount be? From $5 to $350?
Mr. Masse: Actually, no refund below $2 will be issued. That $350 is the average amount of money refunded. The highest refund would be $2,234.04
Senator Chaput: Employers do not have to do anything to receive that credit. There is no form to complete or anything like that?
[English]
Mr. Cuthbert: That's correct. As they have done in prior years, the way the system works is that they will be filing a T4 information return. There is no additional burden to the employer. It's automatic.
[Translation]
Senator Bellemare: In the relevant clauses of division 14, it is stated that amendments would apply to the Employment Insurance Act regarding the Canada Employment Insurance Commission's discretionary decisions. It is stated that this makes it possible to clarify the commission's write-off decisions under the Employment Insurance Act. Can you elaborate on this?
Annette Ryan, Director General, Employment Insurance Policy, Skills and Employment Branch, Employment and Social Development Canada: I have still not provided explanations on that. May I explain this measure?
The Chair: Yes, go ahead.
[English]
Ms. Ryan: I'll describe that amendment as a clarification of the application, of the existing provisions, of the Employment Insurance Act. As you said, it pertains to the discretionary powers that are in place for the Canada Employment Insurance Commission.
The amendment is proposed to clarify that under the EI regulations, the discretionary write-off decisions made by the CEIC — the commission — are just that. They are discretionary to the commission and are not subject to review under the EI act. They can't be appealed, specifically, to the Social Security Tribunal.
This amendment is a clarification that aligns provisions of the act with the government's long-standing view of this piece of legislation, which is that write-offs aren't subject to appeal. That is because it's a discretionary power.
[Translation]
Senator Bellemare: I am not sure I understand. The commission has discretionary powers and makes discretionary decisions. The amendment clarifies the application of those discretionary decisions. Is that what this means? What are those powers? Does the commission usually set the employment insurance rate? Does this have to do with the regular establishment of the rate?
[English]
Ms. Ryan: This measure is not in any way specific to the rate. This has to do with the different channels by which a person can pursue a decision that's been made by Service Canada officials in the first place. Those appeals are specified under the act and they touch on the reasons under which a person can appeal a decision that was made. It gives the various steps that they can pursue.
After all those steps have been followed to determine the substance of an issue —
[Translation]
For instance, could we be talking about someone who has had benefits denied because they are not seeking employment?
[English]
Ms. Ryan: Was the person in the right, or not, for having conducted a suitable job search? There is essentially a long-standing body of jurisprudence around that. That decision on substance can be pursued through the reconsideration process, the Social Security Tribunal, General Division, Appeals Division, and after that, in the court system. That entire chain is intended to establish the substance of a decision: Was it right or wrong?
After that chain has been followed, there are then provisions for a decision to be written off. That speaks to the amount of an overpayment or of a debt, for example, being less than $100, if the person is deceased, bankrupt, or so on. The commission has the discretion to not pursue those cases.
What this measure would do is clarify that those decisions on that final write-off stage, after all of the appeal processes have been duly followed, are not in turn subject to a new round of appeals. This has been the previous view of the government with the existing legislation. Going forward, we would like to clarify that application through this measure.
Senator Bellemare: It would be impossible to have another appeal?
Ms. Ryan: Yes, that's correct, for the question of the write-off decision. There are provisions around write-offs for things like hardship or the length of time that the debt has been outstanding.
The Chair: Is this clarification the result of a court case, or is someone sitting around saying, ''That's not very clear, so let's clear it up''?
Helen Smiley, Director of Regulatory and Revenue Policy Design, Employment Insurance Policy, Employment and Social Development Canada: There have been a number of incidents where it has been pointed out that there is room for interpretation. The court has acknowledged that this leaves room for another interpretation. The way the legislation reads, it says a ''claimant or other person.'' The court has noted that ''other person'' does leave open the possibility of a debtor. So that's never been in a formal decision, but it's been in an obiter statement. So yes, that addresses that weakness in the way the legislation is currently written.
The Chair: I think you and I understand what an obiter statement might be, but some of our colleagues might not.
Ms. Smiley: It's simply a non-binding statement made by a court.
The Chair: Thank you.
We have now looked at clauses 225 and 226. Seeing no further questions, I thank you very much for being here, and we'll move on to the next one.
We're dealing with Employment and Social Development again but another team. Part 4, Division 19 of Bill C-43, page 390, clause 252.
From Employment and Social Development Canada, we welcome Benoît Long, Senior Assistant Deputy Minister, Processing and Payments Services Branch, Service Canada; Kei Moray, Director General, Policy, Appeals and Quality; and Eric Giguère, Director, Employment Insurance Appeals, Processing and Payment Services Branch.
Benoît Long, Senior Assistant Deputy Minister, Processing and Payments Services Branch, Service Canada, Employment and Social Development Canada: I'm here to present Part 4, Division 19 of the bill, as was just explained, as part of the amendments made to the Department of Employment and Social Development Act.
Clause 252(1) amends subsection 45(1) of the Department of Employment and Social Development Act by eliminating the legislative cap on the number of full-time Social Security Tribunal members and allowing for the appointment of part-time Social Security Tribunal members by the Governor-in-Council.
Clause 252(2) repeals subsection 45(3) of the Department of Employment and Social Development Act. In essence, the workload criteria to appoint part-time members and the maximum amount of time part-time members can collectively devote to the functions and duties are removed.
[Translation]
As you know, the Social Security Tribunal hears appeals related to the Canada Pension Plan, Old Age Security and employment insurance.
Budget 2012 announced the creation of the Social Security Tribunal to replace the four existing tribunals. The new tribunal was created to provide an appeal process that is simplified, fair, credible and accessible to Canadians. At the same time, it was supposed to achieve administrative efficiencies.
The SST became operational on April 1, 2013.
[English]
The Chair: Could you go a bit slower? We have simultaneous interpretation, and they sometimes have difficulty keeping up to witnesses who are very familiar with their work. I'll get a little pacer going for you.
[Translation]
Mr. Long: Absolutely. Any appeals that had already been submitted to the four defunct tribunals have been transferred to the SST. The number of transferred appeals exceeds what was anticipated based on the previous workloads of the old tribunals, especially those cases concerning pensions at the first level of appeal. Moreover, as a newly created organization, the SST is still in transition and has not yet achieved final stability.
[English]
The SST and the department are committed to ensuring that the inventory of transferred appeals is addressed as quickly as possible. The current limits on the number of tribunal members are not sufficient to reduce the inventory of transferred appeals and ensure that appellants receive a decision in a timely manner. The proposed amendments to the Department of Employment and Social Development Act to remove the limit on the number of full-time and part-time members is a key action to reduce the inventory of transferred cases as quickly as possible.
In addition, the tribunal has taken measures to improve its output by improving internal processes, including the imaging of incoming material. The tribunal has also launched a study expected this fall that will identify potential efficiencies, establish service standards and determine appropriate resource requirements.
[Translation]
The department is also taking measures to foster the SST's productivity. For instance, we are accelerating the hiring of a full staff of part-time members, as prescribed by the legislation in force, and the hiring of a support staff. Moreover, in order to reduce the inventory of transferred cases, the department established a special unit tasked with reviewing the transferred appeals in order to determine which ones could be settled thanks to new information received.
The department is also implementing a priority-based interim imaging solution in order to improve the effectiveness of the SST's administration and case preparation.
[English]
In conclusion, the department and the SST are taking a number of actions to reduce the inventory of transferred appeals, and the proposed amendments to the Department of Employment and Social Development Act represent a key element of the inventory reduction plans.
[Translation]
Thank you for your attention. My colleagues and I would be pleased to answer your questions.
The Chair: Mr. Long, thank you for your presentation and for slowing down a bit. A number of senators want to ask questions. We will begin with Senator Smith from Montreal.
[English]
Senator L. Smith: Could you give us a little history of the number of appeals and the volume of incomplete appeals and tell us what caused this backlog? What caused the problem?
[Translation]
It would help us if you provided some background.
Mr. Long: Yes, I will do so as slowly as possible.
[English]
When the tribunal was created, the department, as you can imagine, did its very best to not only project the best forecast for the volume of cases that the tribunal would face but also to reduce the volume of cases that would get transferred to the tribunal. In the case of Employment Insurance, volumes and cases transferred over were actually reduced significantly.
That was not the case for cases around pensions, and part of the reason for that was that for the Office of the Commissioner of Review Tribunals, two things happened. Volume started to increase and activities started to decrease given the fact that there was a transition from one tribunal to another. That led to a significant number of cases that were transferred over to the tribunal, much higher than anticipated. That means that, when the tribunal started, it obviously had to start with a very large volume initially, while it was still trying to ramp up, get organized and get set up.
Senator L. Smith: What was the volume?
Mr. Long: The volume of the first transfer was around 7,000 cases on the pension side, and that was much higher than anticipated.
Senator L. Smith: How many members did you have handling that volume?
Mr. Long: The current membership is 73 full-time members and 21 part-time members, with one extra part-time member expected to be in place now. On the first day, there weren't that many. It was a much lower number. You would expect a smaller number at the beginning before the ramp-up of appointments and selections, which is a rigorous process that also took some time. That was part of the ramp-up, but because the initial number of cases was so large it did not help the ability of the tribunal to meet its targets.
Senator L. Smith: Is that because we have an aging demographic and the volume of these cases naturally evolves to a level that the tribunals were not set up to handle?
Mr. Long: A lot of work was done by the department to establish the number of cases — the load, if you wish — that the tribunal could review. If you recall the history of these tribunals, there were four separate tribunals with many part-time members. When the department did the assessments, they reviewed the number of cases that those members were able to review as part-time members, assuming that when they were full-time they would be able to see cases over time and understand what they were. All of those projections were put together, but because of the great number of unanticipated cases in one particular tribunal, it changed the numbers and the starting point.
Senator L. Smith: What is the time for a case from start to finish, so we could understand how that could affect your productivity?
Mr. Long: I don't have that information. Each tribunal had different time frames. That's part of the complexity of merging the four tribunals. Obviously, each one reviews different types of cases; for example, EI cases are different from pension cases. Establishing how long individual cases can take — what we can say for sure is that the volume of EI cases is actually lower today than expected. That has provided capacity for the tribunal to address the backlog on the pension side. One advantage of creating a single tribunal is that it can actually move the capacity to review cases from one program to another as the needs arise.
Senator L. Smith: How long did this problem go on?
Mr. Long: The tribunal has been in existence since April 1, 2013. The problem started relatively early, that is, immediately when it was created. Since then, the tribunal and the department have been taking significant actions to try to reduce —
Senator L. Smith: Did this problem exist before 2013?
Mr. Long: There would have been backlogs, yes.
Eric Giguère, Director, Employment Insurance Appeals, Processing and Payment Services Branch, Employment and Social Development Canada: There were backlogs but not to this extent. As Mr. Long indicated, the combination of the transition period and the reduction and productivity of the one tribunal, as well as a slight increase in volume, created this excessive backlog to the point that they were no longer hearing cases and waiting for the transfer to happen.
I have the breakdown by the legacy tribunals. For instance, on the EI side, the board referees had the added bonus of continuing to hear cases filed before April 1, 2013 up until October 31. They were able to get a significant number of cases dealt with before transferring. They transferred 321 cases.
There was a transfer of 1,071 cases to the Office of the Umpire, which is the second level of appeal at EI. On the pension cases side, the first level of appeal, which was the review tribunal — that's where the big issue was — there were 7,224 cases. The Pension Appeals Board was a reasonable number of 466 cases.
Senator L. Smith: You had four boards and now there is one.
Mr. Long: Correct.
Senator L. Smith: Is there any conclusion to the story? How is it going now?
Mr. Long: The efforts of both the department and the tribunal are improving matters in the sense that the backlog is diminishing. It will take some time for all of the activities that we put in place, including making more of the work that is done right now by all of the individual tribunal members more electronic and a lot less paper — all of these things are taking time, but there is traction. We are confident that progressively we are getting through the problem.
Senator L. Smith: What does that mean to the pensioners who are awaiting results? Is money being withheld from them?
Mr. Long: It depends on the possible rulings, of course. It's possible, yes.
Senator L. Smith: There may be some disaffected, unhappy people.
Mr. Long: Yes.
Mr. Giguère: Part of the reason for the proposed legislative change is to deal with it as quickly as possible.
Senator Eaton: I think you have answered my question, but are the newly appointed members part time or full time?
Mr. Long: We just appointed 21 new part-time members. There was a cap on the number of members, so now we'll be able to progressively increase the number of full-time and part-time members based on the requirements of the tribunal.
Senator Eaton: Yes, because surely there will not be too much of a diminishment in your case workload.
Mr. Long: At this point, we expect a continuation of the workload, although the backlog is going down. It is a matter of having sufficient capacity in terms of members to be able to address the new cases and help to reduce the backlog. That's why the number of members will increase and why it is a critical step. They will be full-time and part-time members. We're removing the cap on the number of hours of part-time members because that will give more flexibility to the tribunal to deploy more capacity when it's needed.
Senator Eaton: Do you have any idea of how many full-time members you will add? You can't judge right now.
Mr. Long: No.
Senator Eaton: When will you have that answer, next year?
Mr. Long: I suspect that when we and the tribunal — particularly the tribunal — have caught up on the backlog, we will have a very good idea how many members they need to support an ongoing level of workload. It will be higher, obviously, than it is today, and that is part of the reason for the proposed amendment.
The Chair: To be clear, you are asking us to remove the cap on both the full-time and part-time members.
Mr. Long: Correct.
The Chair: There is no longer an upper limit.
Mr. Long: No.
The Chair: No means yes, there is no longer an upper limit.
Mr. Long: I'm sorry, yes.
[Translation]
Senator Rivard: I would like to come back to staff recruitment methods. Unless I am mistaken, a few years ago — and I think the process might be the same today — the available positions were posted on the official website for federal government jobs. Competitions and interviews followed.
Mr. Long: Yes.
Senator Rivard: Is there some sort of distribution? We are talking about 73 full-time positions and 21 part-time positions. Are they spread out across Canada? Is there some sort of territorial distribution, as the majority of those people are working online and not necessarily receiving clients in a government office?
Mr. Long: The answer is yes. The employees are concentrated in the two largest provinces — Quebec and Ontario — but members do come from across the country.
Senator Rivard: In the case of part-time work, how many hours per week or month are we talking about?
Mr. Long: The limit was set by the tribunal, and a request was made to remove it in order to provide more flexibility. The number of hours will be determined by the tribunal. Part-time work could range from one day to several days within a month.
Senator Rivard: Is that currently not the case, since the number of hours is limited by the legislation?
M. Long: Yes.
Mr. Giguère: We could be talking about six consecutive months at full-time capacity.
Senator Rivard: When individuals are appointed by the Governor in Council, is the length of their mandate three or four years?
Mr. Long: The mandates may vary in length, as the idea is to provide the tribunal and the government with flexibility, but the length is generally from two years to five years.
Senator Chaput: An amendment to the Department of Employment and Social Development Act is under consideration.
What is the connection between Shared Services Canada and Employment and Social Development Canada, as the Deputy Minister of Shared Services Canada is making the presentation and seems to be responsible for answering questions?
Mr. Long: It is nice of you to remember me, but I changed jobs a few weeks ago.
Senator Chaput: You were with Shared Services?
Mr. Long: That is right.
Senator Chaput: I even remember the questions I asked you.
Mr. Long: I hope your BlackBerry is working better today than it was then.
Senator Chaput: So you are with Service Canada?
Mr. Long: Yes.
Senator Chaput: Are you in charge of Employment and Social Development Canada?
Mr. Long: I am not in charge of the whole department. I am responsible for the branch that deals with payments and processing across the country, for all social programs, such as employment insurance, Old Age Security and the Canada Pension Plan.
Senator Chaput: Who ensures the smooth operation of the tribunal? Whom does the tribunal report to? Is it to you?
Mr. Long: The tribunal is independent and reports directly to the minister.
Senator Bellemare: I would like to come back to the reform that was carried out in spring 2013. How many judges participated in those arbitrations?
Mr. Long: Just over 1,000 judges, most of whom were working part time.
Senator Bellemare: Of course. However, there were slightly over 1,000 of them and, through the reform, the number was reduced to 94, to 73. There may have previously been more flexibility in part-time work.
Mr. Long: It was also a matter of the workload volume members had in the past. They often sat on a tribunal once a month. There was only one day with several cases in one community — for instance, in Rimouski or in Moncton.
So you can imagine that dividing those tasks among more members, by making them permanent employees — full-time, and in some cases, part-time employees — would lead to an increase in their productivity once they settled in. At the very least, their productivity would be equivalent to what it was before.
Senator Bellemare: You said earlier that, during the reform, the number of employment insurance cases dropped. People were complaining they had a hard time coming before tribunals. Are you aware of recipients wanting to come before a tribunal but not being able to? Was a change made that led to not everyone being eligible to request a decision reversal?
Mr. Long: Some changes to the program have been made. Since the tribunal's creation was announced, when it comes to the work and appeal eligibility for people receiving employment insurance, the department has implemented a program. This program involves an additional effort, so that, when an individual requests a review or a recommendation on their case, they automatically receive a call from a Service Canada agent who explains the reasons behind the decision, its impacts and the facts. That process has helped us substantially reduce the number of appeals coming before tribunals. Once they understand, people realize that most cases involve prerequisites established on the basis of objective facts, and their requests for appeal decrease significantly. That is what has enabled the tribunal to move that capacity from one program to the other. Without that measure, we would have a bigger problem.
Mr. Giguère: Within the reconsideration stage, which Mr. Long mentioned, opportunities are also available during the appeal process to obtain additional information that was not in the file before and therefore allows for a decision to be reversed.
Senator Bellemare: Congratulations and thank you for that clarification.
Mr. Long: Thank you.
[English]
The Chair: My recollection is that this committee handled the legislation a couple of years ago. It was another budget implementation bill that combined the various tribunals, as I recall.
Mr. Long: Correct.
The Chair: You will recall that honourable senators expressed a concern at the time that by putting all of these different appeal tribunals into one, you're losing the expertise that various referees, et cetera, had developed in their more limited range of work that they were doing. Now they are expected to do everything.
Has there been any analysis of this new Social Security Tribunal from the point of view of those participating in terms of developing expertise or trying to be a generalist and relating that to the backlog you now have?
Mr. Long: What I can say, and perhaps Eric will be able to amplify it, is that my understanding, and that of everyone I've spoken to, is the quality of the decisions have been commensurate with the quality of decisions made before. There has not been a change in the quality of what an appellant would have expected between one and the other.
The Chair: How about efficiency?
Mr. Long: The time lines are a different matter, obviously.
On the EI side, appellants would have similar experiences to what they were, if not better. On the pension side, obviously it's quite a bit lengthier at this point.
[Translation]
The Chair: Mr. Giguère, did you have anything to add?
Mr. Giguère: Not really.
The Chair: Is it still possible to develop expertise, or does the person have to be a journalist?
Mr. Giguère: What we know is that specific divisions have been created within the tribunal and members have been assigned to those divisions.
The other element is that these people now work full time, rather than part time, and being more familiar with the employment insurance side, I know they used to meet a few times a month on a part-time basis. Now, the members can work full time. And the same types of cases come up a lot more often, so in theory, their expertise in employment insurance or pension matters should increase.
Eventually, I think that is what will happen. But, as Mr. Long said, we are still ironing out the kinks, and a lot of training is under way at the tribunal. Eventually, things will run more smoothly.
Senator Chaput: I have a bit of an odd question, so you will have to forgive me as it is late. I was wondering whether any of the cases that go before the tribunal involve veterans, be they related to employment insurance or pensions.
Mr. Long: I could not say. We could find out and provide you with a more factual answer. I cannot say as I know of any. Perhaps Mr. Giguère, who has more experience in this area than I do, could answer that.
Senator Chaput: The reason I ask is that, after the offices that provided services to veterans were closed, it was announced that Service Canada would deliver services to veterans. So I was wondering whether that tied in with the tribunal at all.
Mr. Long: The tribunal has a very clear mandate in relation to four specific programs. So if a veteran is accessing benefits under one of those programs, there may be a tie-in between the two elements. The programs the tribunal deals with do not target specific groups of clients. The tribunal simply handles files related to programs such as Old Age Security, Employment Insurance and the Canada Pension Plan.
[English]
Senator L. Smith: I have a couple of follow-up questions. Between initiating the claim to completion of a request, how long does that process take?
Mr. Giguère: To complete a request, you mean all the way to the appeal?
Senator L. Smith: A case where a request has been initiated about a person, whether it's the Old Age or Canada Pension, how long does it take for that request to be handled and completed?
I'm trying to get a sense of the next question: What's the average dollar amount per claim? I took 7,200, and I was trying to figure in my head is the claim $100, $300, $500 just to see what the amount is. Is it a major material amount? Obviously for the individual it's a case of time and money, but for you folks, if you have a big backlog, how significant is that backlog in terms of time and money?
Mr. Long: My apologies. I don't have that information and neither does Eric. We will provide that to the committee. We will have to not only look at our own records but also probably seek input from the tribunal. As I mentioned, they are independent, so we keep a distance, but we should be able to obtain the information you're looking for.
The Chair: Please provide it to the clerk and it will be circulated to everybody.
Mr. Long: Yes, of course, absolutely.
[Translation]
Senator Bellemare: Initially, there were 1,000 administrative judges in 2013. You told them, ''See you later.'' But did any stay or come back?
Mr. Long: I think some came back. Some decided to become permanent members and applied for the position. If they met the criteria, they were selected and are now on the tribunal.
Senator Bellemare: They might still be available if you ever needed them.
Mr. Long: I have a feeling that some of the new part-time members will have definitely done the work before and will still be interested in doing it.
[English]
The Chair: That concludes this particular division. I'd like to thank Employment and Social Development Canada for being here to help us with lots of questions on a very small clause. That often arises, doesn't it? Thank you very much.
Now, colleagues, we'll go to Division 23. This is the Financial Administration Act, clauses 304 and 305 at page 405 of the 500-page statute. We are moving along. This is good.
From Treasury Board Secretariat, our friends we have in pretty regularly with our responsibilities on estimates, we're very pleased to welcome Anthea English, Acting Assistant Comptroller General, Financial Management Sector — you will recall we had the comptroller general in not that long ago as well — Marc-André Audette, Director, Financial Management Sector; and Yvon Besner, Senior Legal Counsel.
Ms. English, you have the floor.
Anthea English, Acting Assistant Comptroller General, Financial Management Sector, Treasury Board of Canada Secretariat: Division 23 concerns low-value payments. It is an amendment to the Financial Administration Act. The amendment in the clause establishes the legislative financial authority for the government to neither pay nor collect low-value amounts.
The changes to the Financial Administration Act would give Treasury Board the authority to approve and to adjust as required a regulation to set a low-value threshold and any exemptions. These amendments would take precedence over other federal statutes to ensure a government-wide, overarching and consistent authority over low-value payments. However, given that some statutes already contain a similar regime for lower-value payments, these federal statutes would be unaffected by the changes to the FAA.
In addition, a provision is included to exempt payment of interest on Canada Savings Bonds or any other potential impact on public debt to prevent any perception of default or cause prejudice to the Government of Canada. The amendments would take effect on April 1, 2015.
The Chair: That last statement that you made, what does that mean, not pay interest on Canada Savings Bonds because of what?
Ms. English: Where there is a situation where the interest on a Canada Savings Bond would be less than whatever the threshold amount is established to be, that interest would still be paid because to not pay the interest on any debt that Canada owes would be considered to be potentially a default of Canada's debt and could potentially affect our credit rating.
The Chair: That's an exception?
Ms. English: Yes.
The Chair: That's good. I'm glad that exception is there because what may be a small amount for the federal government might be a large amount for an individual.
Ms. English: That's correct.
Senator L. Smith: To follow up on the chair's questions, what are low-value amounts transactions? You gave us an example. What other examples would constitute low-value amounts as transactions, just so we can get a clearer understanding of exactly what you're talking about.
Ms. English: A low-value amount is considered to be any payment either to or from the government underneath a certain value, so usually a very low value, obviously. The Income Tax Act has a threshold of $2 below which it does not pay or collect money from Canadians or businesses.
Senator L. Smith: Just on tax? This is just about tax?
Ms. English: No. The Income Tax Act is already in place and has that limit in place. This would apply to all other statutes across government.
Senator L. Smith: Could you give us some examples, please?
Ms. English: For example, in March of this year, a cheque was issued by the government to the estate of a deceased soldier, and the cheque was for one cent. This caused some concern from the family and in the media. That brought this issue to the forefront.
The government issues and collects thousands of payments every year that are less than very small amounts, and this amendment to the FAA is intended to address those types of situations.
The Chair: My recollection is that the public wasn't upset because the government went to the expense of writing a cheque for one cent; the public was upset because the family thought it should be a whole lot more than one cent. Is that not correct?
Ms. English: I'm afraid I can't speak to that.
The Chair: It was because they expected to receive more, not because they were upset the government went to the expense of writing a cheque for one cent.
I'm back to that issue because this allows for regulation — so we don't know what's going to be in the regulation — to authorize the government not to pay as well as not to pursue or not to collect. It's the ''not to pay'' that concerns me, because what might be de minimis, what might be a small amount for the government, could be a much larger amount for an individual. We have to represent the interests of the individuals here against the government. How can you give us some comfort on that?
Ms. English: The amendments allow for Treasury Board to make regulations not only to set a threshold but also to set any exemptions that Treasury Board sees fit. Therefore, for situations where it was perceived that perhaps a group of Canadians might be put at risk by not paying under a threshold, then Treasury Board would have the ability through regulation to exclude that group from these changes and therefore would continue to pay.
Treasury Board would also have the ability to, again through regulation, set up a situation so that any Canadian who wished to receive the money that the government would otherwise not pay could do so.
The Chair: I guess it's a matter of waiting for the regulations and keeping an eye out and hoping they're reasonable. It's a ''trust me'' kind of request here.
Is there anything further you'd like to tell us about this particular section? I think it's just one section.
Ms. English: It's just one section, yes.
The Chair: Well, on behalf of the Standing Senate Committee on National Finance, we thank you for coming and telling us about this. We'll be keeping an eye on this one.
Ms. English: Thank you.
The Chair: We'll move on to Division 25, which is at page 410. This would be for prothonotaries of the Federal Court. We have asked experts on Federal Court procedure to come and explain this to us. From Justice Canada, we welcome Adair Crosby, Senior Counsel/Deputy Director, Judicial Affairs, Courts and Tribunal Policy, Public Law Sector; and Anna Dekker, Counsel, Judicial Affairs, Courts and Tribunal Policy, Public Law Sector.
From Treasury Board of Canada Secretariat, we welcome Dominique Laporte, Executive Director, Pension, Policy and Programs, Pension and Benefits Sector.
Who wants to tell us what a prothonotary is?
Anna Dekker, Counsel, Judicial Affairs, Courts and Tribunal Policy, Justice Canada: Mr. Chair, I have a question first. I'm prepared to go through clause by clause, and we've prepared a brief clause-by-clause description. However, if you would prefer an overview, we'd then be open to questions. There are a fair number of clauses in this division.
The Chair: Division 25 is only about three or four pages. We are going to have to go through clause by clause, believe it or not, and we'd feel a lot more comfortable doing that if somebody has been here to talk to us about each one. If it's just consequential to something you've already told us about, that's fine, but give us your overview and then we will quickly go through it clause by clause.
Ms. Dekker: Division 25 would implement the government's response to the Report of the Special Advisor on Federal Court Prothonotaries' Compensation.
Prothonotaries are judicial officers of the Federal Court appointed by Governor-in-Council pursuant to the Federal Courts Act. They perform a range of functions, including case management duties as well as interlocutory motions.
There are currently six prothonotaries. They are deemed to be public servants for the purposes of the Public Service Superannuation Act, and their salary is set by order-in-council at 69 per cent of the salary of a Federal Court judge.
As judicial officers, the determination of prothonotaries' compensation is subject to the constitutional requirements established by the Supreme Court of Canada in the Prince Edward Island judges' reference case; namely, the compensation of judges and judicial officers must be subject to periodic review by an independent, objective and effective commission.
In February 2013, the Honourable Douglas Cunningham was appointed special adviser to the Minister of Justice to inquire into the adequacy of prothonotaries' compensation. His report, which was issued in July of 2013, recommended a salary increase to 80 per cent of the salary of a Federal Court judge, as well as significant pension enhancements.
The government issued a response in February of 2014, and the amendments before you would implement this response. They reflect the government's decision to propose that prothonotaries' salaries be set at 76 per cent of that of a Federal Court judge, which is in clause 318 of the bill. This would be effective April 1, 2012. The amendments also propose that pensions, benefits and other administrative arrangements would be established in the Judges Act.
In terms of pensions or annuities, as they're called in the Judges Act, prothonotaries would be entitled to an annuity in the same way as a judicial annuity based on their date of appointment as a prothonotary.
With regards to administrative arrangements, the adequacy of prothonotaries' salary in the future would be determined by the Judicial Compensation and Benefits Commission rather than by a separate process, as has been done in the past.
Complaints about prothonotaries' conduct would be dealt with through the procedures established by the Canadian Judicial Council, and the administration of prothonotaries' compensation, as well as their day-to-day expenses such as travel and related expenses, would be assumed by the Office of the Commissioner for Federal Judicial Affairs.
Finally, current prothonotaries would be able to elect to remain subject to the public service pension. Clause 330 provides for the transitional provision that would apply if a prothonotary made this election. Certain provisions, as listed in subsection (2) of the new section 2.1 of the Judges Act, mostly pertain to annuities and would also not apply to a prothonotary who made this election.
The Chair: There may be some questions as to why a prothonotary might choose one over the other, but could you look at clause 315 and onward? Having heard your overview, this achieves what we just talked about.
Ms. Dekker: Clause 315 is an amendment only in the French version of the act, and it adds the word ''interprétation'' to the heading, since previously it only said ''définition.'' In English it already reads ''definition of interpretation.''
Clause 316 would amend two of the existing definitions to refer explicitly to prothonotaries to ensure that they would be treated as Superior Court judges for the purposes of retirement age and survivor benefits.
The Chair: Do they have the same opportunity to work as supernumeraries as do judges?
Ms. Dekker: The government has not proposed to allow prothonotaries to elect supernumerary status.
Clause 317 would add a new section, section 2.1, to the Judges Act. Subsection (1) of that new section lists all the provisions that would apply to prothonotaries as if they were Superior Court judges. The list includes all provisions related to annuities, administrative processes, such as Commissioner for Federal Judicial Affairs and the Judicial Compensation and Benefits Commission, and travel and certain other allowances. The list does not include the representational allowances that judges receive, and it does not include the supernumerary status provisions.
The Chair: When you use the term ''annuity,'' are you talking about their annual salary?
Ms. Dekker: Annuity is how the Judges Act refers to pensions, so annuities would be after retirement.
The Chair: Okay.
Ms. Dekker: Subsection (2) of the new proposed section 2.1, as I mentioned, is the list of a subset of the ones in sub (1), that if a prothonotary made the election to remain subject to the PSSA, they would not be treated as judges for those purposes.
Clause 318 is the one that would set prothonotaries' salaries at 76 per cent of that of a Federal Court judge. The Judges Act provides for annual statutory indexation of judicial salaries. Since prothonotaries' salaries would be defined in relation to the salary of a Federal Court judge, clause 319 would exclude prothonotary salaries from the provisions of the Judges Act that relate to indexation.
The Chair: Senator Chaput has a question. On clause 319 or 318?
[Translation]
Senator Chaput: Yes, for clauses 318 and 319.
The Chair: Yes.
Senator Chaput: Is that a salary increase for prothonotaries?
[English]
Ms. Dekker: It is an increase from 69 per cent to 76 per cent of the salary of a Federal Court judge.
Senator Chaput: For all six?
Ms. Dekker: That's correct.
Senator Chaput: Thank you.
The Chair: Moving right along, you are at 319 now.
Ms. Dekker: Clause 319 is the one that would exclude prothonotaries' salaries from the statutory indexation, so an amendment is proposed there.
Clause 320 would amend the Judges Act to specify that an assessment officer of the Federal Court who is not a judge or a prothonotary would determine the costs of the Judicial Compensation and Benefits Commission. Currently, a prothonotary is the one who is listed in the Judges Act to do that, but once the prothonotaries are included in the commission process, they would be in a conflict of interest position, so it would no longer be right for them to determine the costs.
The Chair: Senator Eaton from Toronto has a question.
Senator Eaton: Could you tell me the background or the education of a prothonotary?
Ms. Dekker: The six current ones essentially have the same qualifications as judges, which is to say 10 years at the bar. The current ones have been appointed from either private practice or the public service.
Senator Eaton: Why does somebody want to become a prothonotary?
The Chair: So you could get 76 per cent of what a judge makes.
Senator Eaton: I can understand practicing law and I can understand being a judge. I don't understand why you wouldn't want to become a judge as opposed to a prothonotary.
Adair Crosby, Senior Counsel/Deputy Director, Judicial Affairs, Courts and Tribunal Policy, Justice Canada: I think that it is viewed much like the career path for a judge. The demographics of the ones who have been appointed more recently are comparable to those appointed to the bench. I think it may be a question of choice in the sense that they may not get an appointment as a judge.
There is also a slightly different selection process for prothonotaries. While the court is involved in the selection, it is currently a Governor-in-Council appointment. It's a different process.
I think it's probably a combination of choice and circumstance. It is viewed as a natural progression at the end of a career, and that's one of the reasons why the Public Service Superannuation Act was not viewed as a suitable means of securing security of tenure.
Senator Eaton: Does a prothonotary often go on to become a judge?
Ms. Crosby: There have been no instances of elevation. There is not a long history of prothonotaries. They're a relatively new judicial creature but none have been elevated.
The Chair: Where did the word come from? Is this an old English term?
Ms. Crosby: We're aware of a bird in the Maritimes. I think it's just a different term. The comparable office in the provinces would be ''master.'' Perhaps it was selected to distinguish them from that office, but honestly, I'm not sure we have an answer to that. We could undertake to do some historical research for you, if you like.
The Chair: Just of interest. You're doing such a fine job, Ms. Dekker. I hate to knock you off your script here, but did I understand that section 319 took prothonotaries away from the annual indexing that judges go through?
Ms. Dekker: That's correct. Because their salary will already be set in relation to the salary of a judge which benefits from that indexation, they're excluded from the statutory indexation. They will already receive a benefit to the link.
The Chair: That's exactly what I thought was the case.
Some of us will remember that parliamentarians, including senators, had their salaries tied to judges' salaries, but that somehow fell by the wayside. It's of interest to me to see others are getting tied to judges' salaries. Thank you.
We'll move right along.
Ms. Dekker: Clause 320 is the one where the assessment officer will be determining the cost of the Judicial Compensation and Benefits Commission. Previously, it was a prothonotary as defined in the act, but because they will now be part of the judicial compensation process, they cannot be the ones to determine the costs.
Clause 321 would ensure that references to the judiciary in the existing provisions that relate to the Judicial Compensation and Benefits Commission would include the prothonotaries.
Clause 322 would amend section 42 of the Judges Act, which defines the eligibility criteria for an annuity. The definition of ''judicial office'' in English and ''fonctionne judiciaire'' in French would be amended to include prothonotaries' offices or functions. This would ensure that all the years spent as prothonotary, not just if these amendments come into force, would count for the calculation of their annuities.
Clause 323 would amend a definition to ensure that prothonotaries would benefit from prorated annuities if they chose to do early retirement in the same way that clause 322 applied to section 42.
Clause 324 would guard against the retroactive application by stipulating that only the survivors of prothonotaries currently in office would be able to claim benefits under the Judges Act.
Clause 325 would ensure that prothonotaries would be treated like judges for the purposes of reservations from salary, which vary depending on an individual's age and years in office.
Clause 326 would amend paragraph 69(1)(a) of the Judges Act to specify that prothonotaries would be treated in the same way as Superior Court judges for the purposes of inquiries of the Canadian Judicial Council.
Clause 327 amends section 71 of the Judges Act to specify that the existing powers of the Governor-in-Council with regard to removing a prothonotary from office would remain unchanged. Under section 99(1) of the Constitution Act, Superior Court judges can only be removed from office by the Governor General on address of the Senate and the House of Commons, but this process would not be extended to the prothonotaries.
The Chair: Would not?
Ms. Dekker: No.
Clause 328 would amend subsection 12(4) of the Federal Courts Act to specify that salaries, allowances and annuities payable to the prothonotaries would be provided under the Judges Act rather than as fixed by the Governor-in-Council.
Subsection (2) would repeal subsection 12(5) of the Federal Courts Act so that prothonotaries would no longer be deemed to be public servants for the purposes of the Public Service Superannuation Act.
The Chair: Did you say they could elect not to be part of that?
Ms. Dekker: They could elect to remain in the PSSA, and that is contained at clause 330.
The Chair: Okay.
Ms. Dekker: Clause 329 is a transitional provision that would ensure that despite the retroactive salary increase, which is at clause 333, prothonotaries would only receive the difference between what they have already been paid and the increase, so the difference between 69 per cent and 76 per cent of a Federal Court judge's salary and not the 76 per cent going back to April 1, 2012.
Clause 330 is the transitional provision that would allow current prothonotaries to continue to be deemed to be public servants for the purposes of the Public Service Superannuation Act if they so elect. If they do not make this election, this transitional provision would extinguish their entitlements under the PSSA effective the date of appointment.
Clauses 331 and 332 are consequential amendments to the Garnishment, Attachment and Pension Diversion Act. They would be necessary to ensure that prothonotaries' salaries would continue to be subject to that act even once their salaries were defined in the Judges Act.
Clause 333 refers back to clause 318, which is an increase in salary. It proposes to set prothonotaries' salary effective April 1, 2012, and that would implement the government's proposal that the salary increase be effective on that date.
The Chair: Could you speculate as to why this clause is in here, that a prothonotary has the option of staying under the Public Service Superannuation Act?
Ms. Dekker: It was deemed to be preferable to give them that option. The current prothonotaries were appointed under that regime and they may have made their plans accordingly. In the interest of fairness, it was decided to propose to offer them that election.
The Chair: They might have done their planning based on the other?
Ms. Dekker: Exactly.
The Chair: Is the mandatory retirement age the same as judges as for prothonotaries?
Ms. Dekker: It's 75, the same as judges.
The Chair: And the same as senators.
In terms of what you call an ''annuity,'' is that based on how many years you've worked times a certain percentage of your annual income?
Ms. Dekker: It's based on a modified rule of 80, so it's a combination of years in office with age. If your years in office and your age are equal to 80, you would be eligible for an annuity.
The Chair: The amount of the annuity is what I'm asking about.
Ms. Dekker: The amount of the annuity is two thirds of the final year's salary.
Ms. Crosby: The annuity is a statutory entitlement established under the Judges Act. It's not a conventional pension plan. There is not an accrual rate tied to years of service.
The Chair: Is there a contribution from their annual salary toward the annuity even though it's not a traditional pension plan?
Ms. Crosby: Yes. The Judges Act provides that judges and prothonotaries will be captured by that, that they will be contributing to the CRF; actually, it's a 7 per cent contribution.
[Translation]
Senator Bellemare: I actually wanted to know what the contribution to the annuity was. Did you say 7 per cent?
Ms. Crosby: Yes.
Senator Bellemare: Does the employer pay, or is the 7 per cent —
Ms. Crosby: I am going to let my colleague answer that, since he can explain how it works better than I can.
Dominique Laporte, Executive Director, Pension, Policy and Programs, Pension and Benefit Sector, Treasury Board of Canada Secretariat: Unfortunately, I am not able to answer the question regarding the employer's contribution. I would be happy to get back to you with that information, if you like.
Senator Bellemare: From your answer, Ms. Crosby, I gather that, for prothonotaries, 7 per cent of their salaries is paid in annually and their pension is equivalent to two thirds of their final salary. After how many years?
Ms. Crosby: After 15 years. It is a combination of age and —
Senator Bellemare: When was the system put in place?
Ms. Crosby: For prothonotaries, it is going to be put in place. But for judges, it has been in place since the 1950s.
Senator Bellemare: But judges have never participated in the public service pension plan.
Ms. Crosby: Never.
Senator Bellemare: Prothonotaries have participated in the plan and now have the option of leaving it, should they choose. Is that basically it?
[English]
Ms. Crosby: What is going to happen is they will have the choice of either staying or having the years of service as a prothonotary counted toward a judicial pension. I believe three of the prothonotaries had pre-appointment service as public servants before being appointed as prothonotaries. That time would still count as part of their public service pension, but from date of appointment they would have a choice as to whether the time since then would be counted toward a judicial pension or they wish to remain in the public service pension plan.
[Translation]
Senator Bellemare: In French, is it called a ''pension judiciaire''?
Ms. Crosby: That is a good question. Forgive me, I am not sure.
Ms. Dekker: It is ''pension des juges.''
Senator Bellemare: Very good. Thank you.
The Chair: We do not seem to have any further questions.
[English]
Thank you very much for being here.
Mr. Laporte, it is good to have had you here.
Thank you very much Ms. Dekker; your presentation was very good.
We will move on to clauses 382 to 386 concerning public service labour relations. We have four or five clauses here at page 453.
We will call on the Treasury Board of Canada Secretariat again. I think we have the whole Treasury Board Secretariat here. Mr. Drew Heavens is Senior Director of the Compensation and Labour Relations Sector, and Ms. Maureen Crocker is Senior Counsel.
Thank you very much for being here. You just heard all this information about judges and prothonotaries, so that's quite interesting. Mr. Heavens, you have the floor, sir, to tell us all about these clauses that are here.
Drew Heavens, Senior Director, Compensation and Labour Relations Sector, Treasury Board of Canada Secretariat: The provisions that we're talking here are sections 382 to 387. They relate to recourse processes that public servants have under the Public Service Labour Relations Act and the Public Service Employment Act.
In BIA2 2013, Bill C-4, there were some changes in both of those acts relating to recourse processes. Those changes were meant to the streamline the processes and avoid duplications while maintaining the same level of rights that exist in the current legislation for the employees themselves.
The changes from BIA2 2013 have not yet come into force. Flowing from those measures, the amendments in the current bill are required to bring greater clarity and resolve some of the ambiguities that exist. They contain no policy change in what was contained in Bill C-4.
These amendments are with respect to the staffing complaint process under the Public Service Employment Act. They will eliminate any potential confusion surrounding the important distinction in accountabilities which exist between the Public Service Commission and departmental deputy heads. They will also ensure that an explicit remedy exists for one of the complaint processes that was introduced in Bill C-4.
Finally, a clarification is also being made to the grievance process under the Public Service Labour Relations Act. This will ensure that it is clear that a board member who is hearing a grievance — a grievance arbitrator — will have the right without question to provide systemic remedies in cases where he or she finds that there has been systemic discrimination.
That's an overview of the changes being proposed. As I mentioned, they don't include any policy changes. It's merely — and I hate to use the phrase ''cleaning up'' —providing clarity with respect to some of the changes from BIA-2 2013.
The Chair: That was Budget Implementation Act, No. 2 this time last year.
Mr. Heavens: Right.
The Chair: And we would have talked to you about that at that time.
Have there been any court cases? What's the reason for so quickly bringing this back to clarify?
Mr. Heavens: Just to be clear, the changes that are in the current bill impact changes from BIA2 2013 that have yet to come into force. They will be proclaimed by order-in-council at a future date. Upon reflection in reviewing the act, it was noticed that there could be some arguments made by either employer parties or unlikely union parties that could cause some ambiguities in future litigation. This is to clarify and ensure the rights that currently exist will also exist when these changes are introduced.
The Chair: Is that a usual process that we pass it and then sit down and review it and say, ''Oh my goodness, we must make some more changes ''?
Mr. Heavens: I can't speak to what the usual process is.
The Chair: I think he's skating. It seems a little strange to me, but that's fine.
Senator Bellemare.
[Translation]
Senator Bellemare: Does this clarification pertain solely to grievance cases involving discrimination in the workplace, or does it also apply to things like essential services, occupational health and safety and all kinds of issues that had been discussed previously?
[English]
Mr. Heavens: They relate solely to grievances under the Labour Relations Act and staffing complaints under the Employment Act. The other changes you're referring to with respect to the Canada Labour Code and other changes in the PSLRA with respect to essential services, they have come into force and are not being amended here.
The Chair: Can you take us through the amendments?
Mr. Heavens: Clause 382 is the provision which will ensure that the grievance arbitrators, the ones who hear the grievance adjudications for employee grievances, will have the right to provide systemic remedies in cases of discrimination. It's a grievance, but it may allege violations of the Human Rights Act or discrimination. This provision will ensure that the same remedial powers currently found under the Human Rights Act are contained in the Public Service Labour Relations Act. Without this change, there will be a lack of clarity on that issue. It will be crystal clear that the adjudicator does have that authority to order systemic remedies.
The Chair: We are being asked to repeal a particular section or subsection of last year's budget implementation act.
Mr. Heavens: That's correct, yes.
The Chair: Relating to human rights.
[Translation]
Senator Chaput: So the commission or deputy head is being added.
Mr. Heavens: Yes, that is in another clause.
Senator Chaput: Okay. Sorry, I will wait until we get there.
[English]
Mr. Heavens: Subclauses 383(1) and (2) do exactly what you just mentioned. The staffing act has a division of authorities between the Public Service Commission, who has the ultimate appointing authority, and some of those authorities are delegated to deputy heads. When the revisions were made in BIA2 2013, that distinction was not necessarily as clear as it currently stands in the current act.
In subclause 383(1), the concept of deputy head is added, so any type of complaint can be against either the commission or the deputy head. On this side it would be an employer or deputy head arguing. There would be no argument that the complaint could be filed against the deputy head as well as the commission.
[Translation]
Senator Chaput: I will now ask my question. Are complaints of abuse of authority by the deputy head common? Has that situation been noted? Is that why the provision was added?
Mr. Heavens: That is not why it was added.
[English]
It was to maintain that distinction of authorities between the Public Service Commission and the fact that the deputy heads have certain authorities as well, and employees do have the right to complain against deputy heads as well as the actions of the commission.
[Translation]
Senator Chaput: Did the department decide that? Did employees request that the deputy head be added?
[English]
Mr. Heavens: I don't know who actually asked for it. When you look at the current act, it actually says you can complain against the actions of the commission and the deputy head. When you look at the modifications made last year, the term ''deputy head'' was not there. It is just to parallel what currently exists.
The Chair: Thank you.
Mr. Heavens: Similar to 383(1), 383(2) does the same thing in terms of adding the notion of deputy head to ensure what currently exists will exist in the future.
Subclause 384 modifies the employment act at subsection 78(1). Part of the changes from 2013 were to actually split off a certain type of complaint so that you have complaints filed by people who were qualified in a process and people who complain in situations where they were found not qualified in a selection process. All of these subsequent or consequential amendments in the act were not included, and so section 384 provides that it's reflected throughout the act so that 78(1) is also included alongside 77.
Clause 385 and 386 simply relate to a numbering issue that existed in Economic Action Plan No. 2, 2013. I have to get this straight because there are so many different acts involved here. There is reference made to the budget implementation act of 2009, and the EAP of 2013 modified that section. Unfortunately, the reference number there was section 422, and it should have been section 404. So it modified a section of the act that didn't actually have anything to do with the subject matter of the budget implementation act at section 404. It is really just a numbering correction.
The Chair: Take a look at page 454 and you will see clause 384. Then you see right under it 354. The way this is printed makes it very difficult to follow this through; 354 is not a clause of this particular bill, but it says section 384 of the act is repealed by the following.
Mr. Heavens: Right, it is confusing, admittedly. Section 354 is in reference to Economic Action Plan No. 2, 2013.
The Chair: Last year.
Mr. Heavens: Right.
The Chair: I know the Treasury Board Secretariat has a whole lot to say about how things are presented. You might want to take that one back. It would make it easier to follow.
Mr. Heavens: When it's all implemented it will.
The Chair: Sometimes it is indented a bit or sometimes one print is bolder than the other.
Mr. Heavens: Right.
The Chair: Okay, we can move right along.
Mr. Heavens: Those are all the sections, subject to any questions you may have.
The Chair: I have no senators who have requested to intervene, so I would like to thank you very much for being here. We appreciate your help to understand this.
We're going now to Division 31, the Royal Canadian Mounted Police, clauses 387 to 401. It goes from page 455 to 460, which is the end of bill.
I'm very pleased that we have back with us, from Treasury Board Secretariat, Mr. Dominique Laporte, Executive Director, Pensions and Benefit Sector; and Deborah Elder, Acting Director, Pensions and Benefits Sector.
Welcome. Tell us about Division 31, the Royal Canadian Mounted Police pensions.
Mr. Laporte: Thank you.
We are here to provide an overview as well as a description of the clause in Division 31 of the Royal Canadian Mounted Police pension transfer provision.
The Enhancing Royal Canadian Mounted Police Accountability Act, which received Royal Assent on June 16, 2013, provides authority to the Treasury Board to deem certain members — and we're talking about approximately 4,000 civilian members — as public service employees under the Public Service Employment Act. As a result, civilian members will become subject to the Public Service Superannuation Act.
Since January 1, 2013, as a result of the Jobs and Growth Act 2012, which was Bill C-45, the public service pension plan requires a retirement age of 65 for new employees. All public service plan members and RCMP civilian members prior to that date currently have a retirement age of 60.
I will describe each of the clauses contained in the division, starting with clause 387. It defines ''published date'' and ''deemed employee.'' These terms will be used in the amendments that follow to refer to civilian members who will be deemed as persons appointed under the Public Service Employment Act.
The Chair: Do I recall that there were two different categories of employees in the RCMP? Does this include all of the non-uniformed RCMP members now?
Mr. Laporte: Yes, you are right. There were two categories of employees: members who did not hold rank in the RCMP and regular RCMP members. These provisions deal strictly with civilian RCMP members, so the ones who do not hold rank.
In light of the new retirement age of 65 under the Public Service Pension Plan, clauses 388 to 394 and 396 would, therefore, accommodate the transfer of RCMP civilian members into the core public service without loss of accrued pensionable services and would maintain a normal retirement age of 60 for RCMP civilian members, regardless of hiring date. This is accomplished by clauses 388 to 394 as well as 396. We can provide further details on these specific clauses after, if you wish.
In addition, clause 395 provides the authority to charge the RCMP pension account and credit the public service pension account the amount required to cover the value of the accrued pension benefits by civilian members for pensionable services before April 1, 2000.
Clauses 397 to 399 specify that effective from the date that all civilian members of the RCMP are deemed as public service employees, the RCMP will no longer have the authority to hire civilian members. Consequently, the provision in the Royal Canadian Mounted Police Superannuation Act that relate to members of the force not holding a rank in the force are proposed for repeal, and other provisions that include references to those repealed sections are amended.
The Chair: Who would do the hiring? You say after a certain date the RCMP cannot hire any civilian members?
Mr. Laporte: Exactly, after the deemed date.
The Chair: Then would it go through the Public Service Commission?
Deborah Elder, Acting Director, Pensions and Benefits Sector, Treasury Board of Canada Secretariat: That's correct. They would be considered public service employees. As of the deeming date, the civilian category will no longer exist.
The Chair: Would the RCMP be then treated, for the purposes of these employees, under the delegated authority of the Public Service Commission?
Ms. Elder: Yes.
The Chair: We have the Public Service Commissioner in here quite regularly to explain to us the delegated authorities, and we understand a bit about that. They act as an overseer.
Ms. Elder: That's correct.
The Chair: And we will see the same thing within the RCMP as we would see in any other core government department?
Ms. Elder: In any other department, yes.
Mr. Laporte: Moving to clause 400, it specifies that once all provisions related to the members of the force not holding a rank in the force are repealed, this transitional provision would continue to provide pension coverage to employees of the Canadian Security Intelligence Service, CSIS, who were deemed in 1984 to remain a member of the force for the purpose of the Royal Canadian Mounted Police Superannuation Act. The transitional provision is also necessary to maintain pension coverage for civilian members discharged before the deeming date.
We are talking about any CSIS members who remain subject to the RCMP, so it's a small number of people.
The Chair: When CSIS was first created, a lot of RCMP went over to CSIS and they are the ones you're talking about.
Mr. Laporte: Exactly. That is what we want to provide for.
Finally, clause 401 stipulates that this proposed legislation will come into force on the published date.
[Translation]
Senator Bellemare: I would just like to go over with you the provisions concerning the RCMP pension plan. Changes are being made to the plan, but do they improve it, bring it more in line with the public service plan or make significant changes in the way of benefits or the cost of the plan?
Mr. Laporte: It is a grandfathering provision mainly for RCMP members who were also civilian members. It ensures that they can still retire at age 60. Otherwise, they would be subject to the new provisions in Bill C-45, which was passed. And that is why there are now two retirement ages as of January 1, 2013. Without this provision, they would be subject to the retirement age of 65, which applies to new public servants from that date onwards.
Senator Bellemare: But they are keeping that right?
Mr. Laporte: They are keeping the rights they had.
Senator Bellemare: But the other provisions bring the contributions and benefits in line with those under the public service plan?
Mr. Laporte: My understanding is that the benefits will be the subject of bargaining afterwards. We are dealing solely with the pensions here. As I understand it, this bill does not address benefits.
Senator Bellemare: I am talking about retirement benefits.
Mr. Laporte: They will stay the same.
Senator Chaput: The same?
Mr. Laporte: They are being grandfathered just as public servants were.
Senator Bellemare: The pension plan is being converted to the public service pension plan, except for the retirement age?
Mr. Laporte: Except for the retirement age. They are keeping the right to retirement eligibility at age 60.
Senator Bellemare: That is the only difference?
Mr. Laporte: The other difference is that RCMP members used to be able to retire after 35 years of service, regardless of their age. This change affects about 1 per cent of RCMP members, the civilian members. They are losing the provision that allowed them to retire.
Senator Bellemare: After 35 years.
Mr. Laporte: These are people who would have started working in the RCMP at a very young age, so the measure affects a limited number of people. It is a negative effect of the change.
[English]
The Chair: Perhaps you should explain to us what impact that would have on that member's pension. After 35 years you say he can go because they have special rules, or after 60, because they have special rules. The normal rule is they take a reduction in their pension as a result of leaving early. Will that have an impact? Or are we going to have to change the actuarial provisions for pensions in order to allow their special rules to fit in so they can get the full pension they are expecting?
Ms. Elder: The benefit formula under the pension plan and the RCMP pension plan is the same. It's only the retirement eligibility threshold of being able to retire after 35 years regardless of age under the RCMPSA. Currently this affects less than 1 per cent of the current civilian member population. It's only two individuals, and by deeming date, those two individuals will probably have taken their retirement.
The Chair: Are there any other special provisions? RCMP can retire at 60, not 65. If I retire at 60 and not 65 — this is hypothetical, of course — then I would take a reduction in my pension, but RCMP shouldn't have to take a reduction. They are like members of the Armed Forces.
Ms. Elder: They are like the Armed Forces, but unfortunately the civilian members are subject to either 35 years regardless of age or 55 and 30 or 60 with at least two years of service.
The Chair: Which is the same as the public service?
Ms. Elder: Yes.
The Chair: The members in uniform are not being impacted?
Ms. Elder: No. The regular members still have the capability of retiring after 25 years of service.
The Chair: There may be a number of employees who had the special privilege previously but are down to only two now?
Ms. Elder: Yes.
The Chair: That's getting smaller.
Ms. Elder: It's getting smaller.
[Translation]
Senator Chaput: As far as their contribution rate is concerned, will they pay a different rate now that they fall under the public service plan? Will the rate be higher or the same?
[English]
Ms. Elder: Under the RCMPSA, they pay the same rate as a public service pension plan. However, the cost-sharing ratio for that plan is different because they have different benefit provisions.
Senator Chaput: What would be the cost-sharing ratio?
Ms. Elder: The cost-sharing ratio under the RCMP pension plan by 2017 will be 55-45, whereas under the Public Service Pension Plan it will be 50-50.
[Translation]
Senator Chaput: How many employees will be affected by this change?
Mr. Laporte: We are talking about 4,000 employees.
Senator Chaput: How many will not be affected by the change?
Mr. Laporte: All civilian members of the RCMP will be affected. I do not know what the RCMP's total workforce is.
[English]
Ms. Elder: The regular members of the RCMP?
Senator Chaput: First of all, I wanted to know the ones that would be affected by this change, and I think you told me it was 4,000.
Mr. Laporte: Yes.
Senator Chaput: And the ones that will not be affected?
Ms. Elder: I don't know the current population of the RCMP regular force, but they are not touched by these provisions.
Senator Chaput: You don't know how many of them there are?
Ms. Elder: No, but I can find out.
Senator Chaput: Thank you.
Senator Eaton: I'm intrigued. Why would you bother to take the RCMP civilians and put them in the public service?
Mr. Laporte: First, I'm not in a position to answer this question. This one was something that was dealt with when the Enhancing Royal Canadian Mounted Police Accountability Act was passed. What I can say is that my understanding is that it is to provide for a greater kind of efficiency in terms of HR management. I think it did evolve over time, but in terms of the rationale that went into it back then, I am not in a position to comment.
Ms. Elder: The RCMP civilian member category was originally created April 1, 1960, to just provide specialized technical and operational support to the regular RCMP force. Unfortunately, at that time the public service didn't have those categories of employees. Now, as the public service has evolved, it's markedly different from 1960, and there is an overlap of the functions provided by the civilian members under the RCMP and public service employees.
Senator Eaton: It makes perfect sense.
The next thing I do not understand, is the new retirement age in Canada 65 or 67?
Mr. Laporte: It is 65, but you can pick to go to 67.
Senator Eaton: Why would the public service not retire at the same age the rest of us retire at?
Ms. Elder: Are you talking about the retirement age under the Canada Pension Plan?
Senator Eaton: Well, now that you have moved them into the public service, why would they be allowed a special exemption?
Ms. Elder: That was a decision made by Parliament in 2012 with the Jobs and Growth Act, 2012, when they decided to make the new retirement age under the public service 65.
Senator Eaton: These people who have come over from the RCMP have kept the right to retire at 60. Will it be grandfathered to new people coming into the civil service? Will anybody who's considered a civilian RCMP continue to be able to retire at 60, or will they be like the rest of the public service and have to retire at 65?
Ms. Elder: As of the deeming date, there will no longer be a civilian category. Any new employees hired by the RCMP will be considered public service employees. These will be new employees coming into the plan, and they will have a retirement age of 65.
The Chair: Do you know if these employees in the RCMP have been represented by a union or are members of a union?
Ms. Elder: At this moment in time, until they are actually deemed public service employees, they do not have union representation.
The Chair: Like the members in uniform, do they have a member association that could speak for them?
Ms. Elder: Yes, they do.
The Chair: So we could perhaps have them in to explain to us how they feel about these changes. We appreciate you coming in to explain to us what the government is seeking and the intention of the legislation. Our next phase in dealing with the bill is to bring in those who are impacted by the legislation to explain to us whether they feel it's a good idea or a bad idea.
Thank you very much for being here. We appreciate you staying on until this hour to help us get through the first phase of our study of this bill.
Colleagues, we're through the first round on the bill, which is very good. Thank you all very much for working away at getting it through. I haven't spoken to my steering committee, but I see no reason why we should meet tomorrow afternoon now that we've been through the bill. It's too soon for us to ask the clerk to line up other witnesses. We thought we'd have the break week to line up other witnesses.
If you have anyone or any group who you feel are impacted by any of the legislation we've looked at, please let any member of steering know, Senator L. Smith, Senator Eaton or me, and we will deal with the clerk in trying to line up witnesses for when we come back. We will start right away.
We're hoping to have the Supplementary Estimates (B) referred to us by tomorrow. If that happens, we'll be able to start on Tuesday morning, November 18, with supplementary estimates, and then on Tuesday afternoon and Wednesday we'll carry on with this bill.
(The committee adjourned.)