The Right Honourable Justin Trudeau M.P.,
After careful study of the Standing Senate Committee on Social Affairs, Science and Technology, the Senate in 3rd reading passed 5 important amendments to Bill C-22, the proposed Canada Disability Benefit Act.
As witnesses to the Committee studying this Bill, we asked the Senate to support Bill C-22, as amended, and in so doing ensure that no private insurance company can claw back the Canada Disability Benefit from impoverished people with disabilities.
The amendment that prevents insurance companies from being the de facto beneficiaries of the new benefit was adopted by the majority of the Senate Social Affairs Committee. We now urge all Ministers and all political parties in the House of Commons to adopt this Senate amendment to Bill C-22.
Long-term disability benefits in Canada are an important part of our social safety net: 8.8 billion was paid out in benefits in 2021 representing 20% of total spending of benefits in Canada. However, the contract wording in most long-term disability plans allow for a set-off or deduction of the amount received under “any” government plan or program. It matters not whether the benefit is characterized as a “social benefit” or an “income benefit”.
Bill C-22, as passed in the House of Commons, created a huge financial windfall for the Life and Health Insurance companies and other providers of disability benefits. This is because without a prohibition on deduction or set-off by a private insurance provider, the targeted beneficiaries of the Canada Disability Benefit will effectively receive no supplemental benefit at all. Rather than achieve its goal of reducing poverty for persons with disabilities, the practical impact of the un-amended Bill C-22 will be to increase the profits of private insurance companies. It will do so by reducing the amounts that they will be required to pay out. The taxpayers of Canada will be indirectly subsidizing private insurance providers.
The failure to prevent claw backs by private insurers may have been an unintended consequence of Bill C-22 when it was before the House of Commons in 3rd reading. The issue was never studied in HUMA. However, the Senate Social Affairs Committee, in fulfilling its mandate to carefully review and study proposed legislation, crafted this amendment when this significant gap in the House version of the Bill was identified. To now reject the amendment, and consciously provide this subsidy to insurance companies, would create an intended consequence. It is noteworthy that every Trial Lawyers Association in Canada, several legal aid clinics, community leaders and disability groups have now endorsed the amendment to address this problem.
Memorandums of Understanding with the Provinces will not solve the problem. The huge number of statutes and private contracts (including collective agreements) that each province would have to agree to change, by legislation, in order to insulate a federal program makes this task, practically, unworkable. The protection of the Canada Disability Benefit reaching their intended recipients must be in the federal statute. This is key to the amendment made to this Bill by the Senate.
As well, the amendment passed by the Senate is not unprecedented. The Merchant Seamen Compensation Act contains a comparable provision. Nor is it unconstitutional. As was studied in Senate Social Affairs Committee, under the spending power Parliament can attach conditions to benefit plans to ensure that the intended beneficiary receives the targeted funds. In this regard, federal laws can affect private contracts, where it is necessary for the federal scheme to achieve its goal. For example, the Supreme Court has upheld a federal prohibition on private insurance companies from asking insured persons to take a genetic test or disclose the results of genetic testing.
There should never be an intended consequence by this House of Commons of leaving these impoverished disabled recipients out of a Federal “big tent” social program. Disability poverty is a community tragedy and a Canadian tragedy. We urge all political parties to pass Bill C-22 with the Senate Amendments without delay!
Vice President of Litigation at Share Lawyers ,
Lexpert Ranked Lawyer 2023 in Long-Term Disability
Adjunct Professor, Osgoode Hall Law School