Social Security Programs Throughout the World: The Americas, 2009

 

Canada

Exchange rate: US$1.00 equals 1.16 Canadian dollars (C$).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1927 (old-age assistance), 1937 (blind assistance), and 1955 (disability assistance).

Current laws: 1952 (universal pension), 1965 (earnings-related pension), and 1967 (income-tested supplement).

Type of program: Universal pension and social insurance system.

Coverage

Universal pension (Old-Age Security): All persons meeting residence requirements.

Earnings-related pension (Canada Pension Plan/Quebec Pension Plan): Employees and self-employed persons working in Canada.

Exclusions: Those in casual employment (annual earnings less than C$3,500) or in seasonal agricultural employment.

A province may opt out of the federal earnings-related Canada Pension Plan if it establishes a comparable program, as with the Quebec Pension Plan; benefits are portable between the two plans.

Source of Funds

Universal pension

Insured person: None.

Self-employed person: None.

Employer: None.

Government: The total cost, including the cost of income-tested benefits.

Earnings-related pension

Insured person: 4.95% of covered earnings.

The minimum annual earnings for contribution calculation purposes are C$3,500.

The maximum annual earnings for contribution calculation purposes are C$46,300.

Earnings limit adjustment: Adjusted annually according to increases in the average industrial wage.

Self-employed person: 9.9% of covered earnings.

The minimum annual earnings for contribution calculation purposes are C$3,500.

The maximum annual earnings for contribution calculation purposes are C$46,300.

Earnings limit adjustment: Adjusted annually according to increases in the average industrial wage.

Employer: 4.95% of covered payroll.

The minimum annual earnings for contribution calculation purposes are C$3,500.

The maximum annual earnings for contribution calculation purposes are C$46,300.

Earnings limit adjustment: Adjusted annually according to increases in the average industrial wage.

Government: None; contributes as an employer.

Qualifying Conditions

Old-age pension

Universal pension (Old-Age Security): Age 65 or older with at least 10 years of residence in Canada after age 18. Retirement is not necessary.

The pension is payable abroad if the beneficiary resided in Canada for at least 20 years after age 18.

Low-income supplement (income-tested): Age 65 or older, receiving the universal pension, and with low annual income. Income is based on individual income or family income if the pensioner has a spouse or common-law (same sex or opposite sex) partner. The supplement is payable abroad for up to 6 months.

Low-income allowance (income-tested): Age 60 to 64, with at least 10 years of residence in Canada after age 18, and the claimant's spouse or common-law partner (same sex or opposite sex) is entitled to the universal pension and the low-income supplement. At age 65, the allowance is replaced by the universal old-age pension and, depending on income, the low-income supplement.

Earnings-related retirement pension (Canada Pension Plan/Quebec Pension Plan): Age 60 with at least 1 valid contribution. If the pension is awarded before age 65, the insured must have fully or substantially ceased employment. If the pension is awarded at age 65 or older, it is not necessary for employment to cease. Pensioners who return to work can no longer contribute to the pension plan.

Early pension: A reduced pension may be paid from age 60.

Deferred pension: A deferred pension is possible.

The pension is payable abroad.

Earnings-related disability pension (Canada Pension Plan/Quebec Pension Plan): The insured must be assessed with a severe and prolonged incapacity for any gainful activity and have contributions in 4 of the last 6 years. (The Quebec Pension Plan normally requires contributions in half the years in which contributions could have been made; the minimum contribution period is 2 of the last 3 years.)

The pension is payable abroad.

Survivor pension

Universal pension (survivor allowance, income-tested): Paid to widows and widowers aged 60 to 64. The survivor must be a resident of Canada and have resided in Canada for at least 10 years after age 18.

The survivor allowance ceases on remarriage or entering into a common-law relationship lasting at least a year.

The survivor allowance is replaced by the universal old-age pension at age 65.

Earnings-related pension (Canada Pension Plan/Quebec Pension Plan): The deceased must have made contributions during the lesser of 10 years or one-third of the years in which contributions could have been made; the minimum contribution period is 3 years.

The pension is payable abroad.

The spouse and widow(er) include legally married persons and common-law partners (including same-sex partners).

Old-Age Benefits

Old-age pension

Universal pension: The pension is calculated as 1/40th of the maximum pension for each year of residence in Canada after age 18, up to 40 years. The maximum monthly pension is C$516.96. The pension of high-income earners is subject to recovery (the pension is reduced by 15% of annual income, minus allowable income tax deductions and expenses, over C$66,355).

Low-income supplement (income-tested): The supplement increases the maximum monthly universal pension to C$1,169.47 for a single person or C$1,895.72 for a couple.

Benefit adjustment: Automatic quarterly adjustments of benefits are made according to changes in the consumer price index.

Low-income allowance (income-tested): Up to C$947.86 a month is paid for a pensioner and low-income supplement's spouse or common law partner between ages 60 and 64.

Benefit adjustment: Automatic quarterly adjustments of benefits are made according to changes in the consumer price index.

Earnings-related retirement pension (Canada Pension Plan/Quebec Pension Plan): If claimed at age 65, the pension is about 25% of average monthly pensionable earnings during the contributory period. (The contributory period starts at age 18 or January 1, 1966, whichever is earlier, and ends when claiming a pension, at age 70, or upon death.) If it is in the insured's favor, 15% of the years with the lowest income, years in which the insured was caring for a child younger than age 7, and months when the insured received a disability benefit may be disregarded.

Early pension: The pension may be awarded between ages 60 and 65 and is reduced by 0.5% a month until the pensioner reaches age 65.

Deferred pension: The pension is increased by 0.5% a month for each month between age 65 and the start of the pension. No adjustment is made after age 70.

The maximum monthly pension is C$908.75.

Pension credits accumulated by spouses or common-law partners (including same-sex partners) during marriage or cohabitation may be divided equally in case of divorce or separation.

Recorded earnings are adjusted according to changes in national average wages.

Benefit adjustment: Automatic annual adjustments of earnings-related pensions are made according to changes in the consumer price index.

Permanent Disability Benefits

Earnings-related disability pension (Canada Pension Plan/Quebec Pension Plan): A basic monthly pension of C$424.43 is paid, plus 75% of the earnings-related retirement pension.

The maximum monthly pension is C$1,105.99.

The disability pension is replaced by a retirement pension at age 65.

Recorded earnings are adjusted according to changes in national average wages.

Child's supplement: C$213.99 a month is paid for each child younger than age 18; age 25 if a student. (Quebec Pension Plan: C$67.95 is paid for each child younger than age 18 only.)

Benefit adjustment: Automatic annual adjustment of all benefits according to changes in the consumer price index.

Survivor Benefits

Survivor pension

Universal pension (survivor allowance, income-tested): Up to C$1,050.68 a month to a widow(er) aged 60 to 64.

Earnings-related survivor pension (Canada Pension Plan/Quebec Pension Plan): A surviving spouse aged 65 or older receives 60% of the deceased's earnings-related retirement pension, up to C$545.25 a month.

A surviving spouse younger than age 65 receives 37.5% of the deceased's earnings-related retirement pension plus C$165.60, up to C$506.38 a month. (Quebec Pension Plan: A surviving spouse aged 45 to 64 receives up to C$765.18 a month. For a surviving spouse younger than age 45 with a disability, the maximum pension is C$765.18 a month; if without a disability but caring for a dependent child, up to C$734.82; if without a disability and with no dependent children, up to C$449.47.)

A surviving spouse under age 35 who does not have dependent children or a disability is not eligible for benefits under the Canada Pension Plan.

Orphan's pension (Canada Pension Plan/Quebec Pension Plan): C$213.99 a month is paid for each child younger than age 18; age 25 if a student. (Quebec Pension Plan: C$67.95 is paid for each child younger than age 18 only.)

Death benefit: Six months of earnings-related retirement pension are paid, up to C$2,500.

Benefit adjustment: Automatic annual adjustment of earnings-related pensions according to changes in the consumer price index.

Administrative Organization

Human Resources and Skills Development Canada (http://www.hrsdc.gc.ca), through district and local offices, administers the universal and earnings-related pensions and income-tested supplements.

Canada Revenue Agency (http://www.cra-arc.gc.ca) collects contributions for the earnings-related pensions.

Quebec Department of Revenue (http://www.revenu.gouv.qc.ca) and Quebec Pension Board (http://www.rrq.gouv.qc.ca) administer the earnings-related Quebec Pension Plan.

Sickness and Maternity

Regulatory Framework

Cash benefits

First and current laws: 1996 (employment insurance) and 2006 (Quebec maternity benefits).

Physician and hospital services

First laws: 1957 (hospital services) and 1968 (physician services).

Current law: 1984 (health).

Type of program: Social insurance (cash benefits) and universal system (physician and hospital services).

Coverage

Cash benefits: All salaried workers, including federal government employees; self-employed fishermen. Self-employed persons in Quebec covered by the Quebec Parental Insurance Plan are eligible for maternity and parental benefits.

Provincial government employees may be covered with the consent of provincial government.

Exclusions: Self-employed persons other than fishermen and self-employed persons in Quebec covered by the Quebec Parental Insurance Plan.

Physician and hospital services: All persons residing in Canada who satisfy federal and provincial criteria for eligibility and insured status. (Virtually the total population is covered.) Coverage is portable from province to province and for emergency care anywhere in the world. In the latter case, payment is limited to the rate paid in the person's home province.

Special provisions for certain groups, including members of the armed forces.

Source of Funds

Insured person

Cash benefits: See source of funds under Unemployment, below. In Quebec, 0.484% of earnings.

The maximum earnings for contribution calculation purposes are C$62,000.

Physician and hospital benefits: Financed through general taxation. Premiums are paid in Alberta and British Columbia. Ontario has a health premium that is based on taxable income above a certain threshold. No premiums are paid in the other provinces.

Self-employed person

Cash benefits: See source of funds under Unemployment, below. In Quebec, 0.737% of taxable income.

Physician and hospital benefits: Through general taxation. Premiums are paid in Alberta and British Columbia. Ontario has a health premium that is based on taxable income above a certain threshold. No premiums are paid in the other provinces.

Employer

Cash benefits: See source of funds under Unemployment, below. In Quebec, 0.677% of payroll.

Physician and hospital benefits: Contributions vary by province from 1% to 4.5% of payroll.

Government

Cash Benefits: None.

Physician and hospital benefits: Most of the cost is met from federal, provincial, and territorial general revenues. Federal government makes contributions to provinces and territories through block transfers, part of which are conditional on provinces and territories meeting federal program requirements as set out in the Canada Health Act.

Qualifying Conditions

Cash sickness and maternity benefits: The insured must have at least 600 hours of covered employment in the previous 52 weeks or since the last claim. In Quebec, eligibility for maternity benefits is based on having at least C$2,000 of insured income in the previous 52 weeks and having ceased work or reduced work by at least 40%.

Compassionate care benefits: The insured must have at least 600 hours of covered employment in the previous 52 weeks or since the start of the last claim. The benefit is paid to insured persons who leave work temporarily to provide care or support to a family member with a grave illness.

Medical and hospitalization benefits: Generally, 3 months of residence in the province is required to be insured. When the insured moves from one province to another, the former province continues to provide coverage during the waiting period.

In Alberta, British Columbia, and Ontario, the payment of premiums is an additional condition, but such payment is not linked to entitlement to services.

Sickness and Maternity Benefits

Sickness benefit: The benefit is 55% of average weekly covered earnings in the last 26 weeks, plus a family supplement for low-income and modest-income earners with dependent children. The supplement is awarded if annual net family income (after application of allowable deductions under the Income Tax Act) is less than C$25,921. The benefit is paid after a 2-week waiting period, for up to 15 weeks.

Maternity benefit: The benefit is 55% of average weekly covered earnings in the last 26 weeks, plus a family supplement for low-income and modest-income earners with dependent children. The supplement is awarded if annual net family income (after application of allowable deductions under the Income Tax Act) is less than C$25,921. The benefit is paid for up to 15 weeks, plus up to 35 additional weeks for parental care (provided by the mother, father, or both) on the birth or adoption of a child.

In Quebec, there is a choice of benefits. Maternity benefits are 70% of covered earnings and are paid for 18 weeks; 75% of covered earnings for 15 weeks. Paternity benefits are 70% of covered earnings and are paid for 5 weeks; 75% of covered earnings for 3 weeks. Parental benefits (mother, father, or both) are 70% of covered earnings for 7 weeks plus 55% of covered earnings for 25 weeks; 75% of covered earnings for 25 weeks. Adoption benefits are 70% of covered earnings for 12 weeks plus 55% of covered earnings for 25 weeks; 75% of covered earnings for 28 weeks. If the net family income is less than C$25,921, benefits may be increased.

Compassionate care benefit: The benefit is 55% of average weekly covered earnings in the last 26 weeks, plus a family supplement for low-income and modest-income earners with dependent children. A supplement is awarded if annual net family income (after application of allowable deductions under the Income Tax Act) is less than C$25,921. The benefit is paid after a 2-week waiting period for up to 6 weeks.

The maximum weekly benefit is C$447. In Quebec, the maximum weekly benefit is based on a maximum annual income of C$62,000.

Workers' Medical Benefits

Medical benefits include general medical and maternity care and surgical, specialist, and laboratory services. Benefits are paid directly by provincial authorities according to predetermined formulas and agreed-upon fee schedules.

Hospital benefits: Benefits include standard ward care, necessary nursing, pharmaceuticals provided in the hospital, and diagnostic and therapeutic services. Benefits are paid directly by provincial authorities according to predetermined formulas and agreed-upon fee schedules.

Other benefits include oral surgery if required and performed in an approved hospital and, in some provinces, services of osteopaths, chiropractors, and optometrists; dental care for children; prosthetics; and prescribed drugs. Some cost sharing may be required in such cases.

In some provinces, welfare recipients and persons older than age 65 are eligible for free drugs, eyeglasses, and subsidized nursing home care.

Dependents' Medical Benefits

Benefits include surgical, specialist, and laboratory services; and general medical and maternity care. Benefits are paid directly by provincial authorities according to predetermined formulas and agreed-upon fee schedules.

Hospital benefits for dependents: Benefits include standard ward care, necessary nursing, pharmaceuticals provided in the hospital, and diagnostic and therapeutic services. Benefits are paid directly by provincial authorities according to predetermined formulas and agreed-upon fee schedules.

Other benefits include oral surgery if required and performed in an approved hospital and, in some provinces, services of osteopaths, chiropractors, optometrists; free dental care for children; prosthetics; and prescribed drugs. Some cost sharing may be required in such cases.

Administrative Organization

Health Canada (http://www.hc-sc.gc.ca) administers programs for groups not covered under provincial plans; monitors provincial compliance with conditions of national legislation; and provides provinces with technical, consultative, and coordinating services.

Provincial authorities administer their health insurance plans, establish resident eligibility status, assess hospital and medical claims, pay providers, and monitor all aspects of programs.

Providers are usually public, not-for-profit hospitals and other specialized institutions; doctors and allied practitioners in entrepreneurial practice.

Human Resources and Skills Development Canada, through Service Canada (http://www.canadabenefits.gc.ca), is responsible for cash sickness, maternity, parental, and compassionate care benefits provided under the Employment Insurance program.

Quebec parental benefits are administered by the Quebec Parental Insurance Plan.

Work Injury

Regulatory Framework

First and current laws: 1908 and 1996 (Newfoundland), 1915 and 1996 (Nova Scotia), 1915 and 1998 (Ontario), 1916 and 1996 (British Columbia), 1916 and 2006 (Manitoba), 1918 and 2004 (New Brunswick), 1918 and 2002 (Alberta), 1928 and 1998 (Quebec), 1930 and 2003 (Saskatchewan), 1949 and 1994 (Prince Edward Island), 1974 and 1998 (Northwest Territories/Nunavut), and 2002 (Yukon).

Type of program: Social insurance system.

Coverage

Employees in industry and commerce (some differences exist among provinces).

Exclusions: Self-employed persons, household workers, professional athletes, and members of sports clubs (some differences exist among provinces).

Special systems for merchant seamen and federal civil servants.

Source of Funds

Insured person: None.

Self-employed person: Not applicable.

Employer: The total cost, met through contributions varying by industry and according to the assessed degree of risk (large firms in some provinces may self-insure).

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

The benefit varies from 75% to 90% of gross earnings, according to province.

There is no nationally enforced minimum benefit. The minimum benefit varies according to province.

Permanent Disability Benefits

Permanent disability pension: In most provinces, the pension is either 75% or 90% of the insured's earnings for full disability.

There is no nationally enforced maximum benefit. The maximum benefit varies according to province.

Partial disability: The pension is a percentage of the full benefit according to the assessed degree of loss of earning capacity; in some provinces, the pension is converted to a lump sum if the assessed degree of loss is 10% or less.

Workers' Medical Benefits

Benefits in all provinces include medical, surgical, nursing, and hospital services; medicine; and appliances.

Survivor Benefits

Survivor pension: The pension varies according to province. The pension is paid to a widow(er).

Orphan's pension: Either a monthly flat-rate pension set slightly higher than that for children residing with a parent or a percentage of the deceased's wages is paid, according to province.

Other dependents (in the absence of a spouse or orphan): A reasonable sum is paid in proportion to the loss of income.

Funeral grant: The grant paid varies according to province.

Administrative Organization

Workers' Compensation Board, or a Work Safety Commission, in each province and territory administers the program.

Unemployment

Regulatory Framework

First law: 1940.

Current law: 1996 (employment insurance), with amendments.

Type of program: Social insurance system.

Coverage

All salaried workers, including federal government employees; self-employed fishermen.

Exclusions: Self-employed persons other than fishermen.

Source of Funds

Insured person: 1.73% of covered earnings (also finances benefits under Sickness and Maternity, except for Quebec). In Quebec, 1.38% of covered earnings.

The maximum annual earnings for contribution calculation purposes are C$42,300.

Self-employed person: Not applicable.

Employer: 2.42% of covered payroll (also finances benefits under Sickness and Maternity, except for Quebec). In Quebec, 1.93% of covered payroll.

The maximum annual earnings for contribution calculation purposes are C$42,300.

Government: None.

Qualifying Conditions

Unemployment benefit: The qualifying conditions vary from 420 hours to 700 hours of covered employment in the last year, depending on the regional unemployment rate, or 910 hours for a new entrant or reentrant to the labor force.

The insured must be registered, able, willing, and available to work and unable to obtain suitable employment; unable to work because of sickness, maternity, or providing parental care or compassionate care to a gravely ill family member with a potentially fatal condition.

If unemployment is due either to voluntary leaving without just cause or to misconduct, the disqualification is indefinite and applies until the insured requalifies for the benefit.

Unemployment Benefits

The benefit is 55% of average covered earnings in the last 26 weeks, plus a family supplement for low-income and modest-income earners with dependent children. The supplement is awarded if annual net family income (after allowable deductions and expenses are applied under the Income Tax Act) is less than C$25,921. The benefit is paid after a 2-week waiting period for between 14 and 45 weeks, depending on the claimant's employment history and regional unemployment rates.

A pilot project in 25 regions, running from October 30, 2005, until October 25, 2008, calculates benefits based on the highest 14 weeks of covered earnings.

The maximum weekly benefit is C$447.

Administrative Organization

Human Resources and Skills Development Canada, through Service Canada (http://www.canadabenefits.gc.ca) regional and local offices, administers the program.

Canada Revenue Agency (http://www.cra-arc.gc.ca) collects contributions.

Family Allowances

Regulatory Framework

First law: 1944.

Current laws: 1998 and 2007.

Type of program: Refundable tax credit and universal system.

Coverage

All persons residing in Canada.

Source of Funds

Insured person: None.

Self-employed person: None.

Employer: None.

Government: The total cost.

Qualifying Conditions

Canada child tax benefit (income-tested): A child must be younger than age 18 and live with the primary caregiver who has Canadian citizenship or who has permanent resident, refugee, or visitor status, and who must file an annual income tax return to be eligible.

Universal child care benefit: A child must be younger than age 6 and live with the primary caregiver who has Canadian citizenship or who has permanent resident, refugee, or visitor status.

Family Allowance Benefits

Canada child tax benefit (income-tested): The benefit is delivered through the income tax system.

The maximum annual benefit is C$3,383 for the first child, C$3,144 for the second child, and C$3,087 for the third and subsequent children.

The benefit has two components: the base tax benefit, which is paid to low- and middle-income families with children, and the national child benefit supplement, which is paid to low-income families with children. For the period July 2009 to June 2010, families with net income up to C$110,000 receive the base tax benefit. Families with net income up to C$38,832 also receive the benefit supplement.

Benefits are paid monthly and are based on total family income during the previous year.

Universal child care benefit: The benefit provides families with direct financial support to help offset the cost of child care. Each child younger than age 6 receives C$100 a month (up to C$1,200 a year). The benefit is taxable and paid to the spouse with the lowest income.

Administrative Organization

Canada Revenue Agency (http://www.cra-arc.gc.ca) administers the Canada child tax benefit.

Human Resources and Skills Development Canada (http://www.hrsdc.gc.ca), through district and local offices, administers the universal child care benefit.