THE STANDING SENATE COMMITTEE ON SOCIAL AFFAIRS, SCIENCE AND TECHNOLOGY
EVIDENCE
OTTAWA, Wednesday, February 8, 2023
The Standing Senate Committee on Social Affairs, Science and Technology met with videoconference this day at 4:01 p.m. [ET] to study Bill C-242, An Act to amend the Immigration and Refugee Protection Act (temporary resident visas for parents and grandparents); and, in camera, to study the Federal Framework for Suicide Prevention.
Senator Ratna Omidvar (Chair) in the chair.
[English]
The Chair: My name is Ratna Omidvar, a senator from Ontario and chair of this committee. We will begin with a round table and I will ask my colleagues to introduce themselves, starting with the deputy chair of the committee.
Senator Bovey: Patricia Bovey, senator from Manitoba.
Senator Osler: Gigi Osler, senator from Manitoba.
Senator Moodie: Rosemary Moodie, senator from Ontario.
Senator Lankin: Frances Lankin. I’m from Ontario as well.
[Translation]
Senator Petitclerc: Senator Chantal Petitclerc from Quebec.
Senator Poirier: Senator Rose-May Poirier from New Brunswick.
[English]
Senator Greenwood: Margo Greenwood, British Columbia.
The Chair: We have called back our public servants from IRCC — Immigration, Refugees and Citizenship Canada — the Department of Finance, and from the Office of the Superintendent of Financial Institutions, or OSFI. You have come back gladly and willingly a second time. We appreciate that. We have a number of questions that were not anticipated, and the best way to get the answers is to go to the horse’s mouth. That sounds slightly inappropriate, but you know what I mean. We’re happy to see you again.
From Immigration, Refugees and Citizenship Canada, we welcome Alexis Graham, Acting Director General, Social and Temporary Migration; Jean-Marc Gionet, Director General, Immigration Program Guidance; Craig Shankar, Director General, Migration Health; James Seyler, Director, Immigration Program Guidance; and Ben Mitchell, Counsel, Legal Services.
And by video conference, from the Department of Finance, we have Khusro Saeedi, Acting Senior Director, Framework Policy, Financial Institutions Division.
And from the Office of the Superintendent of Financial Institutions, we welcome Darrell Leadbetter, Senior Director, Insurance.
Thank you so much for being with us today. You’ve received our questions in advance, or the gist of them, so we will be proceeding directly to questions from the senators.
For today’s meeting, senators, you will have five minutes for your question, and that includes the answer from the witnesses.
Before asking questions, I’m going to ask all members and witnesses in the room to please refrain from leaning in too close to the microphone, or to remove your earpiece when doing so. This will avoid any sound feedback that could negatively impact committee staff in the room.
Senator Bovey: I’d like to thank you all for coming back. It’s good to see you in person. I love the two-dimensional selves that are on our screens, but somehow it doesn’t let us get to some of the depth we’d like to.
We’ve had very interesting testimony for this bill. It’s fair to say — well, I’ll talk for me; I won’t talk for others — that the bill to enable parents and grandparents to come is good, and I don’t have a problem with extending the period from two to five years.
However, where I’m stuck is on the insurance side of it. I appreciate that before somebody comes they have to have a medical and they have to have proof of having bought a year’s worth of insurance, and they can buy it from insurance companies in foreign countries.
We’ve had witnesses who questioned that — that it should be a Canadian company. I’d like your thoughts on that.
The serious part of my question is that if they buy insurance for a year, there doesn’t seem to be any provision to have proof that they have repurchased it at the end of a year, so they could in fact be here for four years without insurance. Is that true or is it false? Is it a problem? It’s a conundrum for me.
The Chair: Who is going to answer that question? Ms. Graham, will you take the first shot?
Alexis Graham, Acting Director General, Social and Temporary Migration, Immigration, Refugees and Citizenship Canada: I will take the first shot and perhaps ask my colleagues to add where there are details that I may have missed. Thank you very much for the question.
In response to the question about Canadian companies and why that is in the current scheme and is the current requirement until the designation framework is in place, essentially, it boils down to the fact that Canadian companies are well known and they’re well regulated to some of the highest international standards. Originally, the thinking around the insurance provision was to keep it limited to those Canadian companies that we knew were regulated to those standards.
That being said, of course, the goal of this bill is to increase the access to insurance and allow for a bit more competition in the market. That’s why the designation framework becomes potentially a very desirable option so that insurance companies that are deemed to be providing that highly regulated, quality and reliable insurance are going to be accessible to clients.
I hope that gives you a bit more detail on that answer. I don’t know if anybody else wishes to add to that.
Senator Bovey: Can we hear more about what happens at the end of year one?
Ms. Graham: I will defer to my operations colleagues on that. They have a bit more experience on how that monitoring happens.
Jean-Marc Gionet, Director General, Immigration Program Guidance, Immigration, Refugees and Citizenship Canada:
Thank you for the question.
As we covered at the previous meeting, it is true that they need to demonstrate the requirement for the first 12 months.
The applicants or the visa holders also need to present the evidence to the Canada Border Services Agency — CBSA — officials at each entry into Canada, and they need to demonstrate the proof if they want to apply for an extension. You are correct that after the end of the 12 months, if there is no interaction with IRCC or the Canada Border Services Agency, again, when we assess the application, we make an assessment as to whether the applicants going to abide by the requirements to have insurance, so it is a bit of a gap in terms of verification.
Once again, however, as I think we mentioned during our last appearance, we have not heard that there are instances where claims go unpaid.
Senator Bovey: We’ll be looking at having far more people coming, and I’m someone who would like them to come. Does that not increase the risk of illness, a broken leg — whatever — that may go unpaid? Where do the provinces sit on this in terms of their medical responsibilities?
Craig Shankar, Director General, Migration Health, Immigration, Refugees and Citizenship Canada: Maybe I can answer that question.
At this time, as we mentioned last week in our first appearance, designating a foreign health insurance regime is a new line of work for us in the department. We will be consulting with the provinces. You are correct to point out that this does have an impact on them, because they ultimately run the health care system. Those consultations are still under way.
Senator Bovey: What kind of timeline do you have?
Mr. Shankar: This is a new line of work for our department. We were asked to look into designating a foreign insurance regime. As you heard from our colleagues last week from the Department of Finance, we’re currently consulting them as well as the Office of the Superintendent of Financial Institutions, staff from which are currently on the call as well.
The first step is that we’re trying to understand what exists in terms of the regulatory framework for health insurance plans in Canada. Second, we plan to consult the provincial regulatory side for insurance plans, as well as the health side. We need to take into account what’s in the best interests of the clients. Ultimately, at the end of the day, we want to have something that does its best to not only protect the clients, but also protect the health care costs of our provincial health system.
Senator Bovey: I’ll let others carry on. I have another question, but it’s not formulated yet.
Senator Osler: Thank you very much for coming back. I suspect you’ll hear many questions along the theme of consumer protection and preventing undue financial hardship to these families.
My question is this: With extending the maximum length of stay from two to five years, has consideration been given to extending the minimum period of insurance coverage beyond one year? If so, please tell us about it; if not, why not?
Mr. Shankar: Thanks for the question.
I am not aware that the length of the period for the validity of the insurance has been reviewed. However, as my colleague pointed out, when clients come, at each entry they are expected to have proof of the insurance valid for a year.
Senator Osler: But if they enter and do not leave Canada but stay for the full five years, perhaps they don’t renew. We’ve heard there isn’t necessarily a robust tracking system. That could potentially leave them uninsured for four years, correct? If that’s the case, would there be consideration for extending that minimum amount of insurance coverage from one year to something longer?
Mr. Shankar: Regarding the consideration of that, I would defer to my policy colleagues who are thinking that through.
When you raised the issue of monitoring and compliance, et cetera, there are challenges with that for sure. We are able to monitor where our respective organizations — IRCC and CBSA — have touch points with the clients, but when we don’t have those touch points, it gets to be challenging to monitor.
From a standpoint of insurance compliance and whether the insurance plans are able to pay, we don’t have access to that data. The health care system is administered by hospitals, which have billing departments. If an insurance plan doesn’t pay, that would usually be between the client and the insurance. We won’t necessarily get that information. If it’s a private doctor’s office, that matter of payment is between the clients.
I’m unable to speak to compliance in that context. Again, however, as Mr. Gionet mentioned, where we have touch points, when clients either apply or when they enter the country, we are able to look to see what they have in place.
Ms. Graham: In terms of extending, there are a couple of considerations. It could be something that could be looked into.
The considerations partly relate to the availability of these insurance plans as well. Obviously, in our roles, we don’t control whether plans can be one or two years, particularly for people who may be in their sixties or seventies. Insurance companies create their plans based on a variety of risk factors. One may run into a situation where the cost of buying that insurance for an extended period of time can be quite prohibitive. If people can’t meet that insurance requirement because the cost is prohibitive, then they won’t be approved for the super visa.
That adds to a few considerations that we would need to work through as we look at that insurance requirement and the possibility of extending it.
Senator Osler: I appreciate that response. I think it is a balance between the cost of a longer insurance period versus the cost of a hospital stay, which would be much more. Thank you.
Senator Poirier: Thank you all for being here.
My question is a bit more straightforward. You received a ministerial instruction last July to facilitate entry for a super visa, which includes having a company outside of Canada providing this private medical insurance.
Is it the same clause as in Bill C-242? How long would it take your department to implement the ministerial instruction, and what are the current obstacles preventing the implementation of that clause?
Mr. Shankar: Thank you for the question.
I can speak to what we’ve been asked to do by our minister, which is to look at identifying a list of designated insurance companies. The work we’re doing, as I mentioned earlier, is to consult the landscape of what exists, and then we need to speak to relevant stakeholders.
I can’t give you a specific timeline on that. I can say that in the communications materials that went out accompanying the Ministerial Instructions, we did clarify that the designation of a foreign plan would come at a later time.
Senator Poirier: Have you done any risk assessment of that clause?
Mr. Shankar: That’s what we’re working on right now.
The first key piece is to look at what exists currently. We’re looking at what the Department of Finance and OSFI do to regulate plans, what kinds of enforcement mechanisms they have and how companies get into their designated list, et cetera. We’re assessing those things at this point.
Then we need to assess what we find from all of that, plus the consultations with the provincial insurance regulations and the industry itself, the Canadian Life and Health Insurance Association, or CLHIA; we’re also planning to consult CLHIA. Once we get the full input from them, we will be able to do a fulsome analysis of what that looks like and then come up with a plan to meet the expectation that was put to us to identify a list of designated insurance plans.
Senator Poirier: Does that means that, at this point, we don’t know if the risk outweighs the intended goal, or the department probably needs more time to minimize the risk to the taxpayer, the health administration, the clients — everybody? Am I right?
Mr. Shankar: You are correct.
Senator Kutcher: Thank you all for being here. I agree with Senator Bovey: You all look much better in person.
We’re clearly concerned about ensuring that consumers are protected and that people and their families who have recently come here and who may not be the wealthiest people in the country don’t get hit with those kinds of costs that would bankrupt them or put them into huge financial jeopardy. Nobody wants to see that; I know you don’t want to see that, and we don’t want to see that.
When you’re looking at your criteria for choosing a foreign insurance provider, so that we will be assured or comforted, can you tell us that one of the criteria you’re going to use is that those foreign insurance companies have to meet Canadian regulations and they have to be regulated under Canadian law? Are you prepared to tell us today that that’s going to be one of the criteria you use?
Mr. Shankar: At this point, I can’t give you a clear black-and-white answer. I can tell you that the way the Ministerial Instructions are written, as well as the bill, is that the opportunity to align to Canadian standards that exist is there. We have that option available to us, but we haven’t been able to make that specific determination at this time. It’s something we’re reviewing.
Maybe I can turn to my colleagues at OSFI or the Department of Finance, who can explain what types of protections exist and how the existing Canadian regulations that they have right now protect consumers.
Khusro Saeedi, Acting Senior Director, Framework Policy, Financial Institutions Division, Department of Finance Canada: Thank you for the question.
We’re happy to be available to advise IRCC in the development of the criteria for determining what insurers will be designated.
There are a number of protections that are available under the existing Canadian Insurance Companies Act, which is a federal statute, that benefit policyholders. First, and probably most important, they’re insurers that are federally regulated, whether they’re incorporated in Canada or whether they’re foreign insurance companies that have been approved to operate in Canada by OSFI and the minister, and are subject to prudential supervision.
I will defer to my colleague at OSFI in a second on what prudential supervision entails exactly. I think they can provide more details.
In addition, the Insurance Companies Act contains a number of provisions that are geared toward consumers. Of course, the provinces also have their own regimes, but in the federal act, there are, for example, requirements for insurance companies to have complaints-handling procedures in place. There is a requirement for them to belong to a third-party complaints-handling entity. Those are part of a package of protections available to entities that are federally regulated.
If you would like —
Senator Kutcher: I’m sorry. I don’t mean to cut you off, but that’s not the question.
The question was this: Can we ensure that a foreign insurance company, from which people in good faith purchase insurance, will be regulated using federal regulations under, say, the Insurance Companies Act just as Canadian companies are regulated, or are you asking us to hope that you get it right?
Mr. Shankar: At this time, our work is still under way to determine what we’re going to include in the designation framework that we’ve been asked to implement. I can’t say exactly where that’s going to go.
However, as I mentioned, the way the Ministerial Instructions are written, as well as the bill, is that we always have the option to align to the Canadian standards that exist.
Senator Kutcher: I don’t know about my colleagues, but I don’t have comfort with you maybe having the option to possibly align with the regulations that exist.
The Chair: I will ask a question. We’re trying to sort this out. What we thought was a fairly simple bill has taken on complexities and a life of its own.
This bill was tabled in June 2022. In July 2022, the minister gave himself, or was given, the authority to issue a designated list by ministerial instruction. So, in a sense, many of the clauses in this bill are actually irrelevant. Regardless of whether this bill passes, the minister has decided to go ahead with the designation framework. The only difference this bill makes is that it entrenches the requirement for a designated list in legislation.
Is my understanding of that correct?
Ms. Graham: Thank you very much for the question.
Indeed, your understanding is correct. Currently, under the Ministerial Instructions, the minister has the authority. As you’ve heard, there is already work under way to create the criteria and the designation framework that would provide broader access to super visa holders and applicants to purchase insurance from international companies.
But this is a ministerial instruction, so it is something that could be changed in the future. Legislation is a more permanent approach, absolutely, and it entrenches and codifies that in law. So the instruments are different, and the nimbleness of the instruments are also different. I hope that helps.
The Chair: That helps. I hope that helps us all.
[Translation]
Senator Petitclerc: A lot has been said about insurance companies. My question is closely related to all of that and I’ve been asking it since we started considering this bill.
My understanding is that, first and foremost, when someone is trying to get this super visa, a medical exam is required. My understanding is also that it’s a medical exam — and this may be another conversation — that can quite quickly become exclusive, especially for people with disabilities.
Let’s take the example of people, like grandparents, who may be a of certain age. If the period were extended from two years to five years, we can imagine that a person’s initial medical situation may have changed quite significantly in five years. That person, after the five years, may no longer qualify, and we are not talking about insurance here.
What will happen to that person? Will they lose their visa, or is this some form of grandfathering?
In any case, is it known whether that happens?
Mr. Shankar: Thank you for the question, senator.
[English]
The medical exam that clients are required to undergo at the time of application is what we call the immigration medical examination. The purpose is to determine medical admissibility under the Immigration and Refugee Protection Act, or IRPA. That exam is only done once, at the time of the application. So you are correct that, for the duration of this, we are only doing one exam, which is at the beginning.
That’s one of the reasons we’ve asked for the medical insurance to be a requirement.
For our clients, we know that their medical status can change over time, like all of us. It’s for that reason that we ask that individuals have medical insurance. Even though they may be healthy at the time of application and at the time of initial entry, we know that health could change, and that’s the reason we have the requirement for the insurance. It’s so that the individual and our health care system are protected from the costs.
I can put some numbers into context for you. In terms of the screening we do, as I mentioned, the medical exam is for medical admissibility under IRPA. We have three criteria that we look at. One of them is around minimizing excessive demand on our Canadian health care system. We use a benchmark of $120,000 over a five-year period. Among the super visa applicants, less than 0.17% of the applicants are deemed inadmissible under that criterion. Yes, they are typically in an older age cohort, but from a numbers perspective, we don’t see that there is a large number of individuals who are deemed inadmissible for excessive demands. But as mentioned, we also have the added requirement of the health insurance to ensure that protection is there.
[Translation]
Senator Petitclerc: Thank you. Actually, what I’m trying to understand is that if a person whose condition changes — Let’s say a person continues to be insured, but their physical condition changes. I wanted to know what impact that would have. Would that person be at risk of losing their visa?
The prerequisite of the exam — I know it’s a small risk, but people with disabilities, for example, are often excluded as a result of this exam. I’m actually trying to see if that person is at risk of losing their visa, even if they continue to be insured.
Mr. Shankar: Thank you for the question.
[English]
To answer your question, no, they wouldn’t lose their visa or their immigration status due to a change in their medical condition.
Senator Lankin: Thank you very much. My apologies, I was unavoidably away for the first presentation. I have looked through the notes, and I don’t think that my concerns have been completely addressed, but they build on some of the things raised by Senators Poirier, Kutcher and others.
I feel like the bill is ahead of where we’re at and our readiness to be able to implement it. That’s not unusual. There are lots of times when regulations are drafted afterwards. But there is much in this.
We’re in the middle of federal-provincial discussions about health financing, and we have a possibility here of bringing in a private insurance regime for certain people coming to Canada — not Canadians at this point in time, but those coming to Canada — where we don’t know if we can regulate consumer protection to an appropriate degree for those people from foreign entity insurance companies. Despite the very good regulatory regime we have, there are many stories and documentaries of insurance companies going, “No, no, no, yes,” and then you fight it out. There is a lot about this model that worries me.
Has the government, involving health departments and other departments, looked at the possibility of having the province — similarly for other categories of immigration, where there may be a three-month delay or something; it depends on the province as it is all regulated there — negotiating the funding exchange to have them covered under the public health care system as opposed to bringing in more of the private sector? That is controversial in certain provinces right now as they move for surgical clinics and other kinds of things. Have you examined that? Have you only taken the instructions from here? Has any other part of the government that you are aware of and can talk about examined that option?
Mr. Shankar: Thank you for the question. I am not aware of those types of conversations or analyses that have gone on. What I can say is that this is a temporary visa class. When individuals are temporary, the provinces don’t cover all temporary residents. I’m not aware that any conversations have gone on to look at the provinces and territories funding this or to look at transfers to support them funding this.
Senator Lankin: Chair, there is a lot I want to know, but I just want to register that I think our consideration of the detail of this bill is premature given the development stage of the assurances that people are going to need. I don’t know what that will mean as we go forward, but it is a concern that I have that we are not on a matched timetable here.
The Chair: Duly noted. Thank you, Senator Lankin.
Senator Moodie: Thank you to the officials who are here today. I want to pursue the question about your understanding of your programs in terms of the data that you collect. It seems to me that we’ve heard in our previous meetings that IRCC is not concerned about the health insurance data lapsing for super visa holders in Canada. As we’ve heard you say:
. . . I’m not aware that there have been circumstances reported to us that a client who shows up to seek medical care has not been able to get the coverage or that the insurance situation was not found to be valid . . . .
Is there specific data to support this? Is this information even collected? We heard at the last meeting that there are no follow-up mechanisms. You talked about the barrier being a difficulty around touch points. Are there any other mechanisms to collect this information systematically so that we understand the impact of a program such as this and are able to assess its success?
Mr. Shankar: Thank you for the question. I can say that such data collection mechanisms within our department do not exist at this point. As I mentioned, we check that the individuals have the insurance, but regarding what happens on a day-to-day basis with our health care system with the billing and the reimbursement of the services, we have no mechanism to collect that data. That data does not come to us.
I’m not sure if my colleagues at the Department of Finance or OSFI have any data on what Canadian insurance plans that are regulated under their existing regimes have in terms of compliance, instances of nonpayment or insurance policies being there and then the insurance company not honouring it. That’s not an area of expertise for me. Perhaps they have that information.
The Chair: Do other departments collect this information? I think the silence tells me —
Mr. Saeedi: I’m sorry —
The Chair: I think we have the answer to that question. The information is not collected.
Senator Poirier: I want to follow up on the questions that some other people have been asking. The super visa is for five years, and at the end of the five years, we have someone who came here on a super visa and had insurance when they came. Obviously, like we were saying, some of these people are elderly, so the chances of needing more medical care is coming up. If there is no insurance for them after five years, what happens if they become ill and if they can’t afford to pay the health care themselves? Are they covered like other Canadians under medicare? Is everything covered? If yes, what is the cost? Do we have an idea of what the cost will be to Canadians and to the provinces? Does that mean that they are in limbo and if they can’t pay it’s too bad, so sad? Do we have an idea where we are going with this?
Mr. Shankar: Thank you for the question. Unfortunately, I don’t have an answer to that. For individuals, when the five years expire or end and they are still in Canada and they still need health care, that’s a matter between the health care system and the individual. That’s not something I am aware of in terms of what coverage options exist for them within the provinces or how the clients are able to pay or not pay.
Senator Poirier: Did you say that there has been no consultation at this point with the provinces on any of this yet?
Mr. Shankar: Correct.
Senator Poirier: So, since the ministerial instruction came out last July, there has been nothing?
Mr. Shankar: I can only speak on the health insurance aspect of this, and my colleagues can speak about provincial/territorial consultations and other aspects, but on the health insurance side, no, we have not consulted the provinces and territories yet. We are still in the process of developing our framework. Certainly, provincial and territorial consultations will be part of that. In addition, we would also be consulting industry stakeholders like CLHIA, who you heard from last week. We plan to do broader consultations, but that work is still under way.
Senator Poirier: So it is a concern not only for Canadians, but it is also concerning for the people who will be coming, the clients who are a part of this. Thank you.
The Chair: Are there no caps on super visas of this kind, as there are no caps on any other temporary resident programs in Canada? I see from your reactions that I am correct.
Regarding your service standards currently, for 17,000 applicants, how are you meeting the standards, and what do you expect this new ministerial designated list will — are you ready to meet more demand? My assumption is that there will be more demand.
Mr. Gionet: Thank you for the question, Madam Chair. Maybe I will turn to my colleague, Mr. Seyler, for the answer on the service standard, because it is here, but I don’t have it at my fingertips just yet.
If I may, I want to add a clarification to the previous question that was asked about what happens at the end of the five years if the person no longer has medical insurance. As I specified earlier, the applicant would need to apply to extend their status in Canada, and at that point, they would need to meet the requirement and demonstrate that they have the necessary health insurance at that point. If an applicant does not have the insurance to extend their stay in Canada, then presumably that would result in a refusal of that application.
Senator Poirier: To follow on that, would that be again just a one-year proof of insurance for the second time around?
Mr. Gionet: Correct.
The Chair: Thank you.
Senator Moodie: My follow-up question was this: Do you have any understanding of the timeline for the consultation with the provinces? When might this happen?
Mr. Shankar: Madam Chair, unfortunately, I can’t commit to a timeline at this point.
Senator Bovey: Thank you.
Bill C-242 is a private member’s bill, correct? Is that one reason why your study of the implications is coming later, because it is a private member’s bill rather than a government bill?
Ms. Graham: Indeed. This did come up rather unexpectedly, but it does very much align with the principles and commitments of family reunification that the government has committed to. So it has been supported by the government. The Ministerial Instructions, as you know, have already been adjusted to support those principles and key elements of the bill as well. That doesn’t mean that we don’t have important work ahead of us to make this work well for people and ensure that clients remain protected.
The Chair: Since this private member’s bill was the lever that resulted in this new horizon being opened up, even though the work has not been done and there are no timelines we have to hope that the consultations will lead the minister to the right place. But I ask you again: It is possible that the minister will not put a single foreign insurance company on this list after your consultations are over, isn’t it?
Mr. Shankar: From a policy and legal perspective, I would defer to my colleagues on that. It is written in the Ministerial Instructions that the minister would designate foreign insurance plans, but to the extent of him being able to have no foreign insurance companies on that list, I don’t know about that from a legal perspective.
The Chair: Thank you very much for your time. We hope that we don’t have to call you back a third time.
Senators, for our second panel, we welcome Arthur Sweetman, Professor, Department of Economics, McMaster University. Welcome, professor. Thank you for being with us in person today. I ask you now to provide us with your opening statement. You have five minutes. If you want to fill some of those five minutes with a response to what you’ve heard, we welcome that as well.
Arthur Sweetman, Professor, Department of Economics, McMaster University, as an individual: Thank you very much for inviting me today. It’s good to see many of you whom I have seen before, and to meet new people.
Clearly, the bill today addresses an issue that’s very important for many Canadian families. As some of you may know, I spoke to this bill before a House committee last June, and for those of you who know that, I need to warn you that my comments today will only be a little bit different from those earlier comments. As then, I will focus on the insurance issue, and mostly I will talk about the implementation issues, which is largely what it seems the committee has addressed so far. Implementation issues are in some sense much more important than the phrasing of the bill itself.
I see annual renewals as being important, and many of you have spoken about that so far. During a two-year stay, the annual renewal is of some importance, but it’s of modest importance. But as we stretch out to a maximum five-year stay, renewals become increasingly important, especially for people who are parents and grandparents and slightly older in life.
There are two sides to this issue, from my point of view. The first issue is related to visiting parents and grandparents who become very hard or very expensive to insure during their stay, perhaps because of a medical issue that arises during the beginning of their stay. The second issue is visitors who elect or neglect to renew their insurance during their stay. Both of these need to be thought about in advance. They are probably not relevant for the bill itself, but they are important for IRCC and for the minister to think about. The IRCC in particular needs to address the first proactively, the first being the possibility that the price of insurance might rise substantially for some people during a five-year stay.
If you have a medical problem early in the stay, then insurance could become prohibitively expensive partway through the stay. We want to be thinking about that now, in advance, to do something about it. I am not sure of the best way forward. I can give some examples or some suggestions. I will give one suggestion in particular, and that is that the minister modify the regulations around the insurance provision so that individuals can renew with a maximum insurance increase. So individuals who are super visa insurance holders can always change firms if they wish, but one potential solution would be, for the initial offer, to say that this is a one-year contract but it is renewable with, for example, a maximum increase of 10%, or something like this that’s manageable for people.
I can imagine this would be very challenging for families, if they have someone who arrives for five years and after two years, because of some medical problem that arises, the price of insurance skyrockets. So we want to be thinking about that in advance.
On the other side of the issue, some individuals may neglect to renew their insurance, and we need to think about a way to deal with that. Right now, what some insurers offer for tenant insurance — not for health insurance but for tenant insurance — is that if the insurance is terminated for some reason during the period of the tenancy, the landlord is automatically notified. I don’t want to take us on a tangent by talking about tenant insurance, but this idea of automatic notification can be transported over to the health insurance side in a fairly straightforward manner, I think. That is something that at least some insurance companies are doing already.
It would be easy to say that if super visa insurance or other types of insurance for temporary residents were terminated, there would be a requirement on the insurer to inform IRCC. I think that would be fairly straightforward; insurance companies can easily manage that. They are doing it right now.
Again, I am not saying these are the right solutions. They are potential solutions to problems, and other people may have better solutions to them. But I do see them as problems that need to be addressed.
Another related question is that we’re talking about emergency insurance. As the term of the visit is extended from two to five years, we may need to ask ourselves if emergency insurance is enough. I am of an age similar to many super visa holders, and I’m not sure I would be comfortable with only having emergency insurance. I might want a bit more than that.
For a one-year stay, I might be happy with emergency insurance only, but for a five-year stay, I might want to think about a more fulsome insurance package. We want to be thinking about that a little bit. It might only be something we want to make sure is offered; I’m not sure that we would want to force super visa holders to have insurance beyond emergency insurance, but we might want to make sure they are offered that insurance. We might want to require it, also. At a minimum, we want to track how important having only emergency insurance is compared to having broader health insurance coverage.
The final thing I want to say is that we need to involve the provinces, for reporting purposes, if nothing else.
Now, I will upset some people in this city by saying that, ideally, as a federal program, it would be nice if IRCC offered insurance to the provincial governments for unpaid health care. If you want to know exactly how much unpaid health care there is — if you said that we’ll pay for it, I would bet that you would find out very quickly how much there was. I think if the federal government were willing to offer insurance to the provinces saying, “This is our program, and if our program fails, we pay the costs,” that would be a positive step.
As I said, it’s not going to make me popular in this town.
Finally, and related to that, we need a strong procedure to remove inadequate insurance firms from the list. That’s actually very hard to do. Other people may have better ways of doing it, but one easy way to do that is to make membership or being listed on a list a temporary feature. So you might be listed for three or five years as a firm, and then you need to reapply. That puts the onus on the insurance company to remain in good standing rather than putting the onus on the government to investigate insurance firms for problems.
I’m not saying the mechanism I just proposed is the best, but we need some mechanism to remove both Canadian and foreign insurance firms that are providing inadequate insurance.
That’s it for my comments. Thank you very much.
The Chair: Thank you, Professor Sweetman. Some of your testimony has been a surprise, at least to me. I didn’t know that the health insurance coverage was only emergency insurance. It kind of makes sense, but I did not know that. It is good to have that actually in witness testimony.
We will now proceed to questions.
Mr. Sweetman: Madam Chair, I should be careful. There is not one uniform insurance package that insurance companies offer to super visa holders. Different insurance companies offer different packages, but my understanding is that all that is required under the ministerial instruction is emergency insurance. The requirement is a minimal requirement. What insurance companies offer and what super visa holders elect to purchase is a different story, potentially. They can obviously purchase things that are in excess of the minimum.
The Chair: Thank you for that clarification.
Colleagues, you each now have four minutes for questions. The deputy chair of the committee will go first.
Senator Bovey: I will go back to the question I asked pretty much at the outset of the afternoon. With foreign insurers, do you think it is a good move, a problematic move or a questionable move — whatever — to have individuals be allowed to buy the insurance internationally rather than just through Canadian companies? If so, are you confident that the criteria for the international insurance companies should be current Canadian regulations?
Mr. Sweetman: To be perfectly honest, I don’t have a good answer for you. My sense is that, globally, there is enormous heterogeneity in the regulatory affairs of companies. Regulation in some countries is much stronger than regulation in others. We also don’t know exactly what the minister’s rules will be. It is hard to understand or to answer the question in the absence of the minister’s rules.
My sense from listening to the testimony here and in the House earlier is that there is confusion, at least in my mind — others may have a better understanding than I do — as to what is intended regarding foreign insurance companies. Is it foreign insurance companies with some operations in Canada and, therefore, subject to Canadian rules, or is it foreign insurance companies with no Canadian operations that are offering insurance out of a foreign office, entirely regulated by a foreign country? I don’t actually fully understand what the bill is requiring and how the bill will be interpreted. I could interpret it either way. It is a bit unclear to me.
Senator Bovey: I interpret it the latter way, but I could be very wrong.
Senator Osler: Thank you very much for your testimony. You have provided more answers in your short few minutes than I have heard in the last few committee meetings.
I will ask you to reiterate and then to clarify. To reiterate, you had a list of four or five annual renewals where there is a maximum increase. Could you reiterate those conditions that you think should be present? Then, could you clarify what you said about emergency health insurance? That would be health insurance policies that super visa residents purchase that are at minimum a year and only for emergency purposes, meaning only for hospital visits and not necessarily for a doctor’s visit. Can you provide some clarification on what you meant by that?
Mr. Sweetman: To be perfectly honest, I’m not 100% sure what “emergency” means.
Let me start at the top. One of the things we need to worry about — the first one I said — was large increases in the price of insurance during a stay; that would be excessive relative to the means of the families and super visa holders themselves. That’s an issue.
Then there is the issue of people neglecting to renew their insurance.
Those are two issues we want to be proactively addressing.
The other thing is emergency insurance. To be honest, we need to dig down into the regulations and rules that the ministerial instruction has already set up for Canadian firms to understand what that means. Again, I do not have it in front of me — it is something you would need to clarify with officials — but my understanding is that the minimum that is required is “emergency” narrowly defined. I don’t think it refers only to emergency rooms; it can be an emergency for which you go to a general practitioner. For example, chronic disease management would not be on that list. From my point of view, many people in their fifties and sixties might have diabetes, for example, and require chronic disease management. I need to be careful here. I am not saying that people couldn’t buy insurance that included that, but that’s not the minimum requirement, as I understand it, that the federal government has with this program.
Again, I want to make a distinction between the minimum requirement and what people actually do. People can do things in excess of the minimum. I’m asking where we should put the floor on what insurance companies are required to provide for this insurance.
Finally, we need to involve the province and — this might be going too far for an Ottawa committee, but it would be very popular at Queen’s Park — maybe the government should provide insurance to the provinces. It is a federal program. If people are not paying, maybe the federal government should be paying instead of the provincial governments. I realize that, at the end of the day, it’s all one taxpayer. I fully understand that. But the people operating the system pay a lot more attention when the payment comes out of their pocket as opposed to some other order of government’s pocket.
Senator Kutcher: Thank you very much. As a McMaster alumnus myself, it’s really lovely to have a professor from McMaster come and give such clear testimony.
You said the bill was not clear on the issue of whether the foreign insurance company was the one that had to be regulated in Canada or it could be regulated outside of Canada.
Mr. Sweetman: I have the bill in front of me. As I look at it, I could imagine several smart lawyers interpreting this several different ways. I’m not a lawyer, but I could imagine that would or could happen.
Senator Kutcher: Do you think that it would be better to have the bill be very clear in terms of protecting the consumer that it would clearly state that foreign insurance companies would have to be regulated under Canadian law?
Mr. Sweetman: To be honest, I’m not overly worried about this if the minister takes his duty to create these Ministerial Instructions appropriately, and I suspect the minister will. As much as anything, my testimony was about implementation. I know the minister’s staff and the staff at IRCC are going to read this testimony later, and hopefully they will pick up on these issues in drafting their guidelines for the Ministerial Instructions. I’m not so worried about the legislation itself. I’m more concerned about the guidelines that the minister or his staff will develop.
Maybe I’m sidestepping the issue a bit. I’m also giving the minister some discretion because, undoubtedly, things will evolve. Problems will crop up that the legislation doesn’t anticipate. If the minister has discretion on that front, if exercised well, that could be a good thing.
Senator Kutcher: And if it is exercised poorly?
Mr. Sweetman: My view is that IRCC, over the past several governments, has done a reasonably good job. There are always problems, but it’s a reasonably well-managed department given the resources available to it. Maybe I shouldn’t be saying things like that here. There are always lineups and backlogs, but that has to do with the structural policy and the funding given to the department, for the most part.
The Chair: Professor Sweetman, no doubt when we study that matter, we will call you back.
Senator Lankin: Thank you very much, professor, for joining us today. Many of the implementation issues that you have raised are the things that are of concern to me. I know we’re supposed to be looking at the bill, but the bill brings forward these questions.
If we want to ensure that this bill will be helpful to the individuals who are coming and their families, if we want to ensure that the provincial or federal government isn’t landed with some bill at the end with defaulting insurance companies, in fact, some backup scheme like you suggest is quite an incentive for insurance companies here in Canada or elsewhere to default. There is not a sterling record in the Canadian insurance industry.
I don’t understand what the incentive might be. If they are the latter, as you referred to, totally foreign corporate entities, what’s their incentive for developing this kind of insurance with high risk, depending on how “emergency” gets defined, for a relatively small proportion of their population that would take this up? It feels to me like there are too many implementation questions. Have you any comments on any of that, or is that just too far into the weeds?
Mr. Sweetman: I think that’s an excellent question. My suspicion is that relatively few international insurance companies would be interested in this. It’s a very small market.
Let me change gears a bit, but still within health care and my broad area of knowledge. If you think about pharmaceuticals, many drugs are simply never licensed in Canada because we are such a small market that it’s just not worth going through the regulatory process to have the drug approved in Canada. If that’s happening on the drug side, why would we expect it to be any different on the insurance side?
Canada is a very small market. Even within Canada, this is a very small, niche program. It’s hard to believe that too many foreign insurers would be interested. Having said that, all you need is one or two to be interested. Economists believe that prices are set on the margin. It’s the low-cost producer that dominates the market. All you need is one or two. You don’t need everybody and their brother joining the market. It’s possible that one or two would be attracted and they might drive down prices.
Senator Lankin: If they’re not regulated here in Canada — the latter category — if they are totally regulated in a foreign jurisdiction, what backup is there to ensure that they don’t default on the insurance? How could you actually force them to comply with the rent insurance example of notifying if a policy isn’t renewed? There’s a whole number of things there upon which are contingent on good implementation.
Mr. Sweetman: There are a lot of problems with it. The main incentive is that if they are making money in the Canadian market and they do something bad, they would be locked out of the Canadian market in the future. That’s what economists would call a “repeated game.” The reason you behave well today is because you want to play the game tomorrow. If you do something bad today, you don’t get to play the game tomorrow. That assumes they’re making profits. If they’re not making profits, why would you care whether you play the game well or not?
In my earlier testimony before the House, I had a small section where I talked about dealing with countries that have free-trade agreements with Canada. Under some free-trade agreements with Canada, you might have some recourse. If this is under what used to be called NAFTA or USMCA, then you might, depending on exactly how it works, have some recourse under some trade agreements. The minister may decide, may elect or may think it wise to restrict foreign companies to ones in countries with which we have trade agreements where those trade agreements give us some recourse or we believe we would have some recourse. When I say “us,” it’s not the Canadian government, it’s actually the super visa policyholder who needs to have some recourse. I don’t think that is the case in all trade agreements, but it might be the case in some. When I testified before the House, I suggested that was one thing that someone needs to do some serious looking at because that’s a very technical legal issue that you need to think about carefully.
The Chair: Professor Sweetman, that’s an interesting observation. It’s a line of thought we haven’t heard before. We did hear from the insurance industry last time. One could interpret their testimony in one of two ways, and I’m sure my colleagues have interpreted it in one of two ways. One interpretation is that it is dangerous to go down a road of providing foreign insurance companies with policies of residents in Canada and they may or may not hold up. It’s their concern that these insurance companies will not be regulated in Canada and we would have no recourse. And there’s an issue of consumer protection.
On the other hand, you could also interpret their testimony as trying to protect their market share, and it’s not a big market share. It’s what, 17,000 people? These insurance companies deal with billions of dollars. This is a blip on the radar for them. Would you like to give us your assessment?
Mr. Sweetman: You started off saying one thing, and I think you ended up saying something slightly different. I’m going to go with the second half. You started off saying it could be either/or, and you ended up could be both/and. I’ll go with both/and. It is both consumer protection and protecting market share. That makes perfect sense. I think both of those things are issues, and they’re concerned about both.
One of the things that might happen is profits in this niche market might be driven down to the point where many Canadian insurers drop out of the market. It could be that you don’t end up with more insurers because of this legislation, you just end up with different insurers.
Senator Poirier: A lot has already been discussed about what I was going to ask, so I want to ask two short questions.
What role do you believe the industry needs to play to help the success of this bill, if anything at all? Also, how much time do you believe would be needed for all the parties involved to get on the same page to make this legislation a success?
Mr. Sweetman: They need to be involved in the detailed discussions with the ministerial staff and other related bodies, like OSFI, et cetera, about the structure of what the minister in his instructions will require of the industry, both domestic and potentially foreign, for the purposes of this type of insurance. I think that’s clear.
They have a lot to provide. As the chair said, you need to interpret what they said, remembering that it’s both/and; it’s not either/or. In discussions, that “both/and” needs to be remembered.
In terms of how long it could take, it’s like everything: It could be done really quickly if there were some impetus to do it quickly, or it could take years and years.
Senator Poirier: What if we were dealing just with the nine or so Canadian insurance companies that are out there instead of dealing with companies internationally?
Mr. Sweetman: It would undoubtedly be easier, because otherwise it’s a lot more complex, especially if you’re thinking of true foreign firms and the need to think about the regulatory environment of each one of those firms. That adds a lot of complexity.
So if you’re requiring firms to have operations or some presence in Canada, even if they’re not primarily based in Canada, that makes the process easier, in my view.
The Chair: In other words, I hear you saying that if it’s Sun Life — I’m throwing a name out there — Sun Life has a big business division in India — it’s a separate business called Sun Life India — and Manulife has a big business presence in China as Manulife China. Would something like that give you comfort?
Mr. Sweetman: It depends on who is issuing the policy and who stands behind the policy. I’m not an expert on this, but my sense is that they are incorporated as different companies, even though there’s an overarching company. If Sun Life India is issuing the policy under its regulations under Indian law, that’s very different than Sun Life India providing a framework, backroom and maybe other types of services to Sun Life Canada. But at the end of the day, Sun Life Canada is offering it under Canadian laws.
Those are two very different things. I’m not sure which one of those two would actually happen.
Senator Petitclerc: I just have a quick question. How concerning, if at all, do you think it is that we are in front of this bill and have to address this bill, and yet we seem to have a lot of unanswered questions and a lack of data? We don’t know exactly who the super visa individuals are, how many renew their insurance, et cetera. We don’t have the list of insurance companies that are considered. We don’t have the criteria.
Do you see that as a concern at this point?
Mr. Sweetman: It’s clearly a concern.
I’m not quite sure how to answer that. It’s a private member’s bill, and private member’s bills don’t have the staff and the resources behind them to do that kind of work in advance. But the private member’s bill is also written in such a way — I think a reasonably wise way — that it basically hands it off to the minister and says, “You have the staff and the resources.” In one dimension, it says, “Within one year, you have to table a report, so use your staff to prepare it.” In the other dimension, regarding insurance, “You need to come up with this” — I’ll use the term “regulation,” although it’s not really a regulation — “set of rules.”
In some sense, I think the legislation is wise in handing that heavy lifting off to the minister and the department, which have the resources to do it.
But — and this is why I have some concerns — clearly a Ministerial Instruction has been issued already, and they haven’t done their homework already. I would have preferred them to have done their homework before they issued the existing Ministerial Instruction rather than after.
My view is that’s partly attributable to COVID. I think there was a major disruption to the work of the department and of many Canadians on many dimensions. I think they’re playing catch-up. I’m hoping they will catch up in the not-too-distant future.
One last thing on insurance: Insurance is about trust. That’s really what we’re talking about. Trust needs some parameters around it. We’re ultimately saying that, if we give companies money today in the promise that, in the future, they’re going to give us something if something bad happens, do we trust those companies in different regulatory, legislative and legal environments to honour that trust? We are really asking how much we trust our trading partners. Again, we may want to say we trust trading partners with whom we have some types of trade agreements, but we are less trusting of other types of trading partners.
At the end of the day, insurance is all about trust, whether it’s domestic or foreign. We need to maintain that trust relationship between the policyholder and the insurer.
The Chair: Thank you very much, Professor Sweetman. It’s always wonderful to see you, and I hope to see you again at this committee. Thank you for being here in person, coincidental as that was.
(The committee continued in camera.)