Op-Ed; Ottawa Citizen; July 18, 2002


“Why is the Government stiffing seniors?”


“Human Resources Development shouldn’t try to save money on the backs of elderly Canadians.”


Critics who thought the problems at HRDC were confined to throwing truckloads of taxpayers' money at the government's friends were too generous. The department it seems is not only incapable of distinguishing between projects for which a compelling funding argument can be made and those designed to enrich charlatans it’s equally challenged when it comes to its core responsibilities in administering federal benefits.

The latest farrago – that taxpayers could be on the hook for $2.5 billion in retroactive payments to seniors – is just the latest twist in the ongoing problems with how the federal governments administers seniors’ benefits. It has its roots in HRDC's failure to alert hundreds of thousands of the poorest seniors to their entitlement to Guaranteed Income Supplement, available to low income seniors claiming Old Age Security (OAS).


The issue first made the headlines last year after social policy analyst Richard Shillington reported that an estimated one in five eligible seniors was not receiving benefit. Mr. Shillington argued, not unreasonably, that parliament had voted the benefit and it was the public service's job to ensure it was delivered to those people who qualified to receive it.


Many of those who were eligible but not claiming could be readily identified through income tax returns, rather than depending on HRDC’s cumbersome and frequently confusing application system. Yet HRDC's initial response was magnificent in its sheer hypocrisy. Privacy legislation, it claimed, precluded the sharing of information with the Canada Customs and Revenue Agency (CCRA) about a senior’s eligibility.


This view was not shared by the Privacy Commissioner and would have surprised anyone familiar with the legislation. Paragraph 8 of the Privacy Act explicitly allows government department's to share information where it is to an individual's benefit.


In an appearance before the House of Commons Human Resources Committee last October, CCRA assistant commissioner, David Miller, reported that his department had used its files to identify potential beneficiaries of the government's $5-billion pay equity settlement for current and former public servants.


Apparently, however, impoverished seniors did not merit the same assiduous concern. Furthermore, those seniors who are alerted to their GIS entitlement may only make a retroactive claim that extends back 11 months according to HRDC’s assistant deputy minister, Paul Migus appearing before the same parliamentary committee.


The government’s failure to ensure that beneficiaries were property notified of their entitlement would, if left unchallenged, lead to considerable savings to the treasury. Mr. Migus has acknowledged that HRDC had been aware of problems with GIS take-up at least as early as 1993. Yet the department failed to take effective measures to address the problem.


If the government is ultimately found to be negligent in administering the program, the cost of putting matters right could grow as the courts have the option of imposing additional punitive awards and much longer retroactive payments.


This view received surprising confirmation from the release of a letter from Paul Migus to an unnamed GIS claimant who had applied for additional retroactive payments in 1994, claiming the department had not informed her of her entitlements. Urged on by her son she took her case to a review tribunal but lost. She continued to seek legal recourse and in August 1999 received a hand-delivered cheque for $20,157– a sum equal to five years of retroactive payments - but with no accompanying explanation.


After several enquiries were made, and two years after the cheque was sent, a letter from HRDC advised that the department had concluded: "on a balance of probabilities, an administrative error has been made in not notifying your mother of her potential eligibility for the GIS". The letter was signed by ADM Paul Migus, delivered within days of Shillington's exposure of the problems of GIS take-up, and a mere two months before Paul Migus would assure the Human Resources Committee that retroactivity was limited to 11 months.

What should taxpayers conclude? Did the anonymous senior, spurred on by her son receive a generous cheque in return for her persistence alone? Or did HRDC fear the legal ramifications of a full court test of its administration of GIS? 


The $2.5-billion figure cited in recent media reports about the possible cost of retroactive GIS payments is a provisional estimate of the cost of a five year retroactivity settlement, based on the precedent HRDC have already established with their recently reported pay-off to this single senior. The final bill could be far higher if the courts decide on full retroactivity and impose additional punitive awards.


The federal government owes it to seniors – and taxpayers – to address the issue urgently.



Martin Loney is a Manotick writer specializing in social policy issues.