Tough choices ahead as little-known pension changes take effect

TheGlobeandMail.com – news/politics
Posted on Thursday, December 30, 2010.   Bill Curry, Ottawa

Canadians approaching their 60s are learning they’ve got big new decisions to make regarding the Canada Pension Plan, as notices are now going out to the public about a policy change the Conservatives included in the 2009 budget bill.

The changes provide another example of the Conservative government’s increasing use of budget legislation to pass a wide range of policies that are not spelled out in the original budget documents.

The latest notices, which were recently distributed in the mail and are available online, explain the change.

Canadians can now choose to receive a larger monthly benefit if they choose to start collecting CPP after age 65. Conversely, collecting CPP before age 65 will mean a decrease in benefits from the previous formula.

The changes also allow Canadians who keep working through ages 65 to 70 to continue making CPP contributions while also collecting CPP benefits. A requirement to stop working completely for two months before colleting CPP is eliminated.

In a news release dated Dec. 23, Human Resources and Skills Development Canada notes that the changes were approved unanimously by federal, provincial and territorial ministers of finance in 2009 as part of a regular review of CPP that takes place every three years.

The changes, which will be phased in over six years, were passed in law as part of Bill C-51, the legislation implementing the January, 2009, federal budget.

However, the changes were not detailed in the actual 2009 budget document. They only appeared in the legislation that followed. As a result, the measures never received the focused parliamentary debate that would have occurred had the CPP changes been passed as standalone legislation.

The Conservative government’s use of budget legislation to pass a wide range of laws that would have historically been standalone bills is coming under increasing scrutiny, particularly as parties begin their political positioning in advance of the 2011 budget.

Queens University political scientist Ned Franks is once again criticizing the Conservatives for this growing trend toward using the budget bill – which is a confidence matter – as a key vehicle for passing a wide range of policy measures.

The Globe and Mail reported in May about an attempt by Progressive Conservative Senator Lowell Murray – which ultimately proved unsuccessful – to oppose the practice with the 2010 budget bill.

In a recent interview with The Canadian Press, Prof. Franks says the practice short-circuits parliamentary scrutiny.

“What they’ve done is in this (budget implementation bill) is just whop, whop, whop, whop, whop, a whole bunch (of measures),” he is quoted as saying in reference to the 2010 budget bill. “The country didn’t even know what happened.”

The practice creates obvious political challenges for the opposition parties. Because budgets are confidence matters that could force an election, all three opposition parties are under pressure shortly after the annual budget is released to declare whether or not they support the document. There is then a House of Commons vote to adopt the budget. That vote is followed up by the introduction of a budget bill and several votes on the legislation. Increasingly, the budget bill includes measures that were not spelled out in the budget document.

Maclean’s columnist Paul Wells points out this week that Prime Minister Stephen Harper once said that simply passing the budget bill was enough to make an entire parliamentary session productive in his view.

“I know we’ve been criticized for how much was in that budget bill,” Harper once told the Reuters news service. “But putting a lot in that budget bill effectively ensured—passing it ensured a productive parliamentary session.”

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