Institutional links

Wrestling With the Poor Cousin: Canada Pension Plan Disability Policy and Practice, 1964 - 2001

Executive Summary

This paper offers a policy and political history of the disability benefit component of the Canada Pension Plan (CPP), the "poor cousin" of this public contributory pension plan. Broad policy trends and program developments are the focus, highlighting the role of Ministers, Members of Parliament, public servants, policy advisors and other political actors. To do so, the paper examines the pension reform agendas and records of the Pearson, Trudeau, Mulroney and Chretien governments. The analysis covers the origins, early implementation, liberalization of benefits, and the more recent restraint and reorientation of the disability benefit program.

General findings of the study are that:

• The complexities of divided jurisdiction in Canadian federalism, rather than act as a barrier to social policy innovation, in fact produced a more extensive program initially than otherwise would have been introduced by a single level of government.
• A national disability income program would not have happened in Canada in the 1960s without the larger reform project of establishing a contributory retirement pension plan.
• The need for federal-provincial consensus on substantive amendments has not prevented the CPP and the disability component from being changed many times.
• The wish to ensure comparability between the CPP and the Quebec Pension Plan has meant that changes in one plan, often the QPP, has generated pressure to amend the other plan.
• Non-partisanship and cooperation among federal parliamentarians has been a frequent characteristic of the legislative process in dealing with CPP disability policy.
• The role of backbench MPs has, at times, been more significant in this policy field than is generally ascribed to legislators.
• Competing approaches to interpreting the meaning of disability under the CPP legislation play out through the application process, the administration of the program, and at all levels of the appeals system.
• A comprehensive national disability income program has been advocated by some groups as the ultimate policy reform, and periodically studied by officials over the years, but remains in the realm of long term visions. More immediate agendas of Canadian governments involve improving the integration and harmonization among public and private disability programs.
• The growing influence of the Finance Department over federal social policy, commonly noted in the literature, is clearly apparent in this program area in recent years.

The evolution of CPP disability policy has occurred in four periods: the policy design and formation phase from 1964 to 1970; the policy implementation, adaptation and pension debate phase spanning the 1970 to 1986 period; the years 1987 to 1993, which included major reforms to the CPP and the liberalization of disability benefits and eligibility; and the most recent phase, 1994 to 2001, a period characterized by critiques, retrenchment and the reorientation of disability benefits and goals. In the early years of the 21st century, the CPP disability program is a product of, and in many ways remains, an interplay of these periods of policy changes and continuities.

The study suggests that the CPP has four policy goals - providing a degree of income protection, promoting a return to work for at least some disability beneficiaries, ensuring the integrity and accountability of the plan, and addressing the financial sustainability and affordability of the CPP. A theme in the evolution of the CPP disability program has been an interaction among these four goals. In every period of the program's history, these goals and associated beliefs have had their champions and critics, and all have been influential in shaping the CPP. In recent years, the goals of returning to work, assuring program integrity and financial sustainability have received greater emphasis by governmental policy makers than in earlier periods. At the same time, income security as a public commitment has been subject to some restraints.

A pension debate of sorts did occur in the mid 1990s, but one more like a talk than a grand clash of contending visions and interests. The views of social policy groups were less prominent and even marginalized in the process, since they tended to argue for further enhancements to benefits and the liberalization of eligibility rules, positions regarded by government officials as out of touch with the fiscal imperatives facing governments. Human Resources Development Canada played a less significant role comparatively, while reports on the CPP by the Office of the Auditor General of Canada and the Chief Actuary to the Plan, and analyses and arguments about sustainability by Finance Canada were influential in setting the tone and parameters of the pension reform discourse, as were studies by various business groups and institutes that repeated the restraint theme.

The analysis therefore shows that the history of the CPP disability program has not been a simple linear progression in eligibility and benefits, but rather a more intricate process of both expansion and erosion as well as intended and unintended results. The future of the program is no less subject to the multiple policy goals, resources and interests of governments and other institutions in the Canadian political economy.