ACCESSIBILITY FOR ONTARIANS WITH DISABILITIES ACT ALLIANCE
Canada’s Parliament Finally Passes Bill C-22 – But Impoverished People with Disabilities Still Don’t Know Who Qualifies for the new Canada Disability Benefit, How Much the Benefit Will Be, or When the First Cheque Will Come
June 21, 2023 (Toronto): A major but interim milestone for people with disabilities languishing in chronic poverty in Canada was reached on June 20, 2023, when the Senate took a final vote to pass Bill C-22, the new Canada Disability Benefit Act. In a Throne speech three years ago, the Trudeau Government commendably promised to lift people with disabilities out of poverty by creating a new social benefit, an addition to Canada’s safety net.
Despite three years of relentless advocacy from all corners of Canada’s diverse disability community, Parliament’s passing Bill C-22 is only an interim and fragile milestone. We still don’t know how much the Canada Disability Benefit will be or whether it will be large enough to lift people out of poverty. We don’t know who will be eligible for it or what bureaucratic hoops they’ll have to jump through to apply for it. We don’t know when it will start to be paid. We only know from the Trudeau Government that in the best-case scenario, it is at least a full year away.
Even three years after promising this benefit, the Trudeau Government has not tried to get Parliament to approve a budget for it. As of this spring, the Government had not even costed it. This is shocking to us. Whenever we propose a new initiative to any level of government, the first question we understandably are asked is: “Well, what will it cost?”
We know some things about the Canada Disability Benefit that are a cause for serious concern, despite the great news that Parliament finally passed Bill C-22. The Canada Disability Benefit will only be available to working-age people with disabilities. Yet many seniors with disabilities live in poverty. Disability poverty does not magically vanish at age 65.
We know that the federal Cabinet will decide who is eligible for the benefit and the amount of the benefit. That means that a future Cabinet can unilaterally cut it at a closed Cabinet meeting, with no debate or votes in Parliament.
We also know that under Bill C-22, private insurance companies will be free to claw back the Canada Disability Benefit from people with disabilities living on private long-term disability benefits, where insurance contracts permit this. This is because the Trudeau Government successfully blocked an important amendment that the Senate had made to Bill C-22, which would have banned such private insurance LTD clawbacks.
The result is that federal money intended to lift people with disabilities out of poverty will, in some cases, end up instead in the bank accounts of undeserving rich insurance companies. On June 20, 2023, Senators Marilou McPhedran and Kim Pate made a powerful argument in the Senate, set out below, that shows why the Trudeau Government was wrong to reject that Senate amendment.
“Because the Trudeau Government blocked a federal ban on private insurance companies scooping the new Canada Disability Benefit from people with disabilities on long-term disability, we call on Prime Minister Trudeau’s Government to spearhead a public campaign, jointly with the broad disability community, to get all provincial and territorial governments to immediately legislatively ban those clawbacks,” said David Lepofsky, Chair of the volunteer non-partisan AODA Alliance, one of the many disability organizations that campaigned to strengthen Bill C-22. “We also call on the federal Cabinet to immediately proclaim Bill C-22 in force to speed up the process of getting this new benefit into the hands of people with disabilities who need it now!”
Both in the House of Commons last fall and in the Senate this spring, the Trudeau Government pulled out all the stops to resist any amendments that would strengthen this bill. Despite this, many disability organizations eventually extracted helpful amendments, first in the House of Commons, and later in the Senate. As but one example, AODA Alliance Chair David Lepofsky gave testimony on November 14, 2022 at a House of Commons Standing Committee and on April 27, 2023 at a Senate Standing Committee, calling for amendments to the bill.
Contact: David Lepofsky
For more background, check out:
- The May 30, 2023 letter to Prime Minister Justin Trudeau from Toronto lawyers Steven Muller and Hart Schwartz, which was endorsed by every provincial Trial Lawyers Association in Canada, regarding the need to ban private insurance clawbacks of the Canada Disability Benefit.
- The AODA Alliance’s June 19, 2023 letter to federal Disabilities Minister Carla Qualtrough, calling for immediate proclamation of Bill C-22 and for the Minister to spearhead a campaign to get all provinces and territories to ban private insurance clawbacks of the Canada Disability Benefit.
- The AODA Alliance website’s Bill C-22 page.
Excerpts of Statements by Senators Marilou McPhedran and Kim Pate on June 20, 2023 in the Senate of Canada
Hon. Marilou McPhedran:
…One amendment has been rejected. I doubt Senator Gold intended to ghost me, but it was proposed by me on behalf of disability rights experts and organizations. Proposed for clause 9(c) of the bill, this amendment would have protected recipients of the Canada disability benefit act by preventing private insurance companies from deducting the amount of the benefit paid out under the act from payments made under long-term disability policies.
These clawbacks by private insurance providers were not discussed in committee in the other place, but they were studied extensively when Bill C-22 was examined by the Senate’s Social Affairs Committee. The amendment to stop rich insurance companies from clawing back the benefit from poor people with disabilities was endorsed by over 40 legal aid clinics, community leaders, academics and disability advocacy groups. On the question of its constitutionality, every provincial trial lawyers’ association in Canada supported the amendment as viable in law.
Therefore, we have before us a bill that enables private insurance companies to claw back the new, publicly funded disability benefit regardless of whether Minister Qualtrough calls it a social benefit or not.
Many private insurance contracts are clear that they can set-off any government benefit, effectively subsidizing private insurers instead of providing additional financial support for members of the disability community as intended by the act.
Colleagues, concerns about industry clawbacks are not far-fetched or hypothetical. Clawbacks are happening now to available public benefits. Old Age Security benefits, for example, are already explicitly set-off from long-term disability payments by many private insurance companies while similar deductions have been made from insurance payouts to recipients of the dependent benefit under the Canada Pension Plan, or CPP.
Further, the courts have sided with private insurers. For example, in a 2008 class action, the court affirmed the legality of deductions from long-term disability payments of this nature absent any provision in either the policy or in the legislation prohibiting it, and private insurers leaped to enforce those deductions through litigation against disabled recipients.
For example, in a case involving the State Farm Mutual Automobile Insurance Company, the appellant’s insurance company sought to enforce the deductibility of the CPP dependent benefit on the basis of the 2008 class action ruling. And in Industrial Alliance Insurance and Financial Services Inc. v. Brine, the private insurer sought to enforce deductions from a long-term insurance policy in the amount of benefits received by the policyholder under both the Canada Pension Plan and the Public Service Pension Plan.
Time does not allow me to list the many other cases wherein private insurers went to court to claw back payouts under long-term disability policies premised on the policyholder’s receipt of public benefits. The rejected amendment prohibiting clawbacks of the new benefit by private insurers would have done what the courts have said needed to be done in order to protect recipients and ensure that benefits are received by those for whom they are intended rather than function to subsidize private insurers.
The time to respond to this concern is sooner rather than later. When the CPP dependent benefit offset was challenged in 2008, industry relied on the fact that its premiums were adjusted on the assumption that it could offset CPP benefits but held that without the availability of that offset, insurance premiums would undoubtedly rise. No such adjustment can presently be relied on by industry in relation to the Canada disability benefit, as premiums taking the new benefit into account have yet to be calculated.
Concerns were raised at the Social Affairs Committee and in this place as to the constitutionality of a provision that engages with the insurance industry by purporting to regulate insurance contracting as falling outside the jurisdiction of the federal parliament. The fact is that such a provision is not unprecedented in Canadian benefit regimes. For forty years, the Merchant Seaman Compensation Act, for example, has protected recipients with wording closely similar to that proposed in the rejected amendment. Forty years, honourable senators, with no court challenges, constitutional or otherwise.
Another relevant precedent can be found in the 2020 reference regarding the Genetic Non-Discrimination Act, which grappled with the constitutionality of a federal legislative scheme to regulate aspects of insurance contracting by preventing private insurers from requiring genetic test results as a precondition for health insurance eligibility. In reviewing the legislative scheme, the court determined that its overall goal was not regulation of the insurance industry per se, but rather the prevention of genetic discrimination in the provision of goods and services such that the insurance provisions at issue comprised only part of a broader regulatory scheme and were necessary in order to preserve the purpose of the federal legislation. Sound familiar?
Absent the act’s protective insurance-related measures, the scheme’s purpose would be seriously undermined, justifying the minor incursion into a matter traditionally falling within the ambit of provincial jurisdiction.
These real-life cases support the viability of a provision like the rejected amendment prohibiting set-offs by private insurers of payments under the Canada disability benefit act. It is clear in the act that the Canada disability benefit is designed to be supplementary for those who qualify under the act.
The legislative purpose of making a supplementary sum available to eligible recipients is undermined if private insurers are permitted to correspondingly claw back payments under their policies because, in practice, the recipient is left with substantially the same amount they were receiving before introduction of the benefit. Absent this simple operational protection, the bill before us today will effectively indemnify private insurers and deny the intended recipients the benefit.
Lifting disabled people out of poverty is the stated fundamental purpose of this bill. In this regard, it will become a mockery of Minister Qualtrough’s promise to disabled people, who desperately need and deserve the Canada disability benefit. The exclusion of this amendment to prohibit benefit clawbacks by private insurers is a choice the Trudeau government has made: to not ensure that certain eligible recipients under the act receive the full supplemental benefit promised to them.
Time will tell how many private insurers will exploit this loophole given to them, and perhaps some day Parliament will have a second chance to bring justice to those disabled recipients who are now exposed to the legal force of rich private insurers.
But let’s not pretend that the real cost will be borne by poor, disabled recipients who would be made to suffer because this government chose not to protect them. They will suffer, and the cost will be borne by them.
Last week, Senator Pate and I received a letter from Mr. Duncan Young, whose standard of living is determined largely by a private insurer. I share the following with his permission:
I am not one of the many selfless volunteers who advocate on behalf of the disabled. Neither am I an activist or lobbyist for any such person or group. I am simply an “average” 55 year-old working-class Canadian, who happens to love his job, and is looking forward to working at it for as long as he can. Or at least I was…
Three years ago, I received a diagnosis of spinocerebellar ataxia 3 (SCA3): an extremely rare, hereditary, neurological disorder that causes the cerebellum to atrophy, thus completely destroying a person’s motor skills; impairing walking, talking, swallowing, bladder control, etc.
It is progressive, has no known treatment(s) to abate its development-and there is no cure. Of note, an affected person typically does not present symptoms until somewhere between ages 40-55: Meaning I (and most like me) are enjoying a full life, still in its ascendency, when suddenly your brain will not allow your legs to form the motion necessary to let you run to catch the bus, or let your fingertips stay still long enough to do up the tiny buttons on your button-down collar.
Let me be clear: Without that amendment enshrined in statute, as worded, I will receive $0 from the creation of the benefit. It would be-in its entirety-an eligible clawback according to my LTD provider’s contract. In short, the only beneficiary of such a benefit would be the shareholders of a publicly-traded insurance company-while I continue to slip below the poverty line. Both points here are not conjecture: They are quantitative facts.
So now you know exactly, unquestionably and with detail, exactly what the passing of C-22 without this amendment will mean to myself and every disabled person in similar positions: Nothing.
I’m so sorry, Mr. Young, but at this stage we must hope that Minister Qualtrough and this government can somehow turn this around by actively convincing provinces and territories to ban private insurance clawbacks of the Canada disability benefit within their respective jurisdictional authority. Such advocacy should not be left, again, to the disability community to take on alone.
Honourable senators, we all know this disability benefit is long overdue and desperately needed. The disability community in Canada has advocated for stronger and more reliable income support for far longer than this bill has been in contemplation by Parliament.
I am grateful for the many insightful comments and valuable contributions to the development of this bill from community leaders and advocates, both in committee and various other capacities. Mindful of time, I can acknowledge only a few. I extend appreciation for the legal expertise provided to the Social Affairs Committee by witnesses who brought the clawback to our attention: David Lepofsky, Robert Lattanzio, Steven Muller and Hart Schwartz. For the sake of those eligible recipients who are unlikely to ever see a penny of the Canada disability benefit, I fervently hope that those experts will continue to be vital contributors to the minister’s promised consultations to fill in the framework legislation…
Hon. Kim Pate: Honourable senators, Minister Qualtrough rightly called Bill C-22 a once-in-a-lifetime opportunity to lift people with disabilities out of poverty. Despite this tremendous step forward, the message from the other place risks turning this bill into an empty promise for Canadians who rely upon long-term disability insurance.
Our Senate amendment prohibiting clawbacks of the Canada disability benefit by private insurers would have protected the collective investments of Canadians in the well-being of the most marginalized from being diverted into the coffers of insurance companies. Our amendment put Canadians on the side of persons with disabilities, not wealthy corporations. The rejection of this amendment should leave us questioning: In whose interests did the government act?
Would insurance companies actually dare take the money belonging to persons with disabilities that they rely upon for necessities like food and shelter? The answer is “yes,” as acknowledged by both Minister Qualtrough and our Senate sponsor.
Almost all group disability insurance policies and many individual policies allow insurers to deduct payments that the insured receives under any government-sponsored plan, as Senator McPhedran has just pointed out. Just one example that should be an affront to all of us is the clawback — again, about which Senator McPhedran spoke — by insurers of Canada Pension Plan, or CPP, payments from persons with disabilities, including the CPPD dependent portion earmarked for children of those with disabilities.
Disability advocates have worked diligently to expose this issue. Imagine the advances toward eradicating child poverty if this money actually reached persons with disabilities.
We have heard from some of the millions of Canadians to whom these types of policies apply. One working-class man wrote thanking us and urging us to persist. He has a hereditary degenerative condition that appeared later in life and incapacitated him. He was forced to leave his job. He needs the Canada disability benefit and should qualify for it, but he may not receive an extra cent because of clawbacks. Without the Senate amendment, every penny of this man’s Canada disability benefit might be stripped from him and pocketed by a wealthy corporation.
Yesterday, his daughter underwent tests to identify whether she has inherited his condition and the same fate.
People may be even worse off if the Canada disability benefit application process is inaccessible. Insurance companies can actually reduce insurance payments if people are eligible for a benefit, even if they don’t apply for it.
How on earth can we support these kinds of windfalls for insurance companies? Do we really want to increase the profit margin of companies while leaving some people with disabilities even worse off than they would have been before Bill C-22, potentially receiving less from their insurers? Surely, enriching wealthy insurance companies on the backs of people with disabilities and at the taxpayers’ expense is not what the government intended. Why then has it rejected our Senate amendment aimed at preventing that travesty?
The government says it is concerned about infringing upon provincial and territorial constitutional jurisdiction. They propose to negotiate with each province and territory to change their respective insurance statutes, wait for these legislative changes to happen and then negotiate individually with a large number of insurance companies not covered by these statutes. That is in addition to the already significant negotiations planned with each province and territory to prevent clawbacks relating to all provincial and territorial government benefits.
We should all be concerned that there is no realistic way to accomplish this within the tight timelines for the rollout of the benefit. Furthermore, countless practising experts have provided compelling evidence that the Senate amendment is indeed constitutional.
Rather than repeat the argument that Senator McPhedran has already ably outlined, I will add two points.
My first point is that, like Senator McPhedran, I have consulted with constitutional experts who have framed an arguable case in favour of constitutionality on the grounds of the “necessary incidental,” or “ancillary,” doctrine. This doctrine allows a provision situated within a larger legislative scheme to be pulled into validity if two conditions are met. The first condition is that the larger legislative scheme must be valid federal jurisdiction. I don’t believe anyone has questioned the validity of Bill C-22. It is an exercise of the federal spending power and perhaps federal powers relating to peace, order and good governance. The second condition is that even if the prohibition on private insurance clawbacks might be invalid if considered in isolation, it can still be valid if it has a necessary relationship to the larger scheme. Here, absent the Senate amendment, the benefit risks becoming a government subsidy for private insurance companies, with no impact or, worse yet, negative impacts, such as the loss of additional provincial benefits like drug coverage, et cetera, upon many disabled recipients.
If that is not necessary to the Bill C-22 scheme, I can’t imagine what is.
My second point is that, as you might remember, the Senate amended a government bill on solitary confinement based on testimony from legal experts that the legislation was unconstitutional. That vote passed four years ago today, in fact. The government rejected the Senate amendments, and the previous Government Representative in the Senate explained to this chamber:
… Neither I nor anyone else in this chamber can substitute our conclusions for that of the justices who may be called upon to evaluate … provision at some point in the future ….
If there’s one thing we know, it’s that constitutional law is arguable, particularly in the abstract….
… the appropriate forum to resolve the issues with finality is the judicial branch. This is uniquely an environment where each litigant has a guaranteed procedural right to make a full case with the benefit of an exhaustive evidentiary record before an impartial decision maker.
I question why the government is not following that advice this time around. I hope it is not simply that the constitutional question concerns a Senate amendment rather than government legislation.
There is a reasonable case in favour of the amendment’s constitutionality. Knowing that the bill without the amendment amounts to an empty promise to a significant number of persons with disabilities, why doesn’t the government accept the amendment and then see whether insurance companies have the gall to challenge its constitutionality in court?
Four years after the government stated that the courts were the appropriate forum for dealing with constitutional concerns about its solitary confinement legislation, the barriers that people with the least political, legal and economic capital face when trying to defend their rights have thus far precluded a meaningful court challenge. Imagine trying to find legal assistance and mount a complex court case from a jail cell, while on the streets, while in pain or while figuring out how to keep yourself and your family fed and sheltered.
On top of that, the federal government might throw additional barriers to litigation in the way. For the solitary confinement legislation, the government had cases pending before the Supreme Court of Canada that would have given the court an opportunity to rule on its constitutionality. Instead, the government discontinued the appeals. Those seeking to challenge the bill now have to start from square one, which means several costly, personally draining and time-consuming hearings and appeals before they can hope to once again put this matter before the Supreme Court of Canada.
With Bill C-22, the Government Representative has flipped the script, but the bill similarly favours those with the deepest pockets. This leaves marginalized and impoverished persons with disabilities with the unfair burden of going to court to seek the supports that the government has undertaken to provide. Why exactly is the government choosing to stand in the way — again — of the most disadvantaged?
To grasp what the government’s decision means very concretely, we need only look to a disability rights case litigated by Vince Calderhead, an internationally recognized human rights litigator. During his testimony on Bill C-22 at the Social Affairs Committee, he described a case that commenced 11 years ago. It took a decade of court challenges for judges to determine that the Nova Scotia government had discriminated against his disabled clients, two of whom suffered irreparably and died, so they will never benefit from the legal win. Without our Senate clawback amendment, how many years will persons with disabilities have to wait to bring a similar challenge? How long will they endure poverty? How many will die in the interim?
Here is the question: If someone must bear the burden of challenging government legislation, should it be a private insurance company with deep pockets and ample legal resources, or should it be an individual with a disability, who’s sufficiently impoverished to be eligible for the Canada disability benefit yet unable to benefit from it? This is an urgent issue affecting real people — people with disabilities living in poverty — and not merely an abstract legal conundrum.
Do we want to clear the way for insurance companies to profit off the Canada disability benefit, or do we want to throw a lifeline to those abandoned to poverty who are facing seemingly insurmountable odds in claiming their Charter-protected equality rights?
I do not say this lightly: I am painfully aware of how urgently persons with disabilities struggling in poverty need relief. The Canada disability benefit, if done right, should ensure that they have the necessities, including food, shelter, medical products and care, that breathe life into the human rights — in particular, section 15 of the Charter regarding equality rights, and section 7 of the Charter regarding the right to life, liberty and security of the person — that Canada guarantees to all of us.
Minister Qualtrough acknowledged that current inequalities exist because our systems, laws, policies and programs were not designed with or for people living with disabilities. When we were debating medical assistance in dying, or MAID, we saw that suffering is often not inherent to having a disability but, rather, created by systemic exclusion and poverty. When MAID was expanded, the government promised to be vigilant in ensuring that no one was forced to choose death because they had not been provided with the supports they needed to live without suffering. The government has not lived up to that promise yet. As recently underscored by Ontario MPP Sarah Jama, people with disabilities from her community are applying for MAID because they cannot afford food.
Having lived and worked with persons with disabilities, I know about the formidable burden that disability communities are prepared to take on in order to hold the government to account, as well as how wrong it is to off-load onto them yet another fight for the Charter rights and human rights that most of us take for granted. Many of us are now extremely worried that some of the most marginalized persons with disabilities in Canada will spend years trying to fix our mistake.
What do we want the legacy of the Senate’s work on Bill C-22 to be? Persons with disabilities are contacting us daily, urging us to be brave and do what is right. These words, incidentally, were echoed last week by the Chief Justice of the Supreme Court of Canada at a swearing-in for new lawyers, including several who previously worked in our office on this very issue. Chief Justice Wagner reminded us to be brave and courageous, and to stand up for what is right when others will not — words by which to live and legislate, dear colleagues.
Hon. Wanda Thomas Bernard: Senator Pate, in the other place the government has taken the position that if the Senate amendment prohibiting insurance clawbacks was included in Bill C-22, and challenged in court, this would:
… create significant uncertainty and could impact the regulatory process, which could in turn impact benefit delivery. This could very well delay benefit payments.
This type of court challenge might create some uncertainty about whether insurers can claw back the benefit, but it’s difficult to see how it would create uncertainty about the issues that the government would need to determine in order to proceed with regulations and with paying out the benefit, such as who is entitled to the benefit, the amount of the benefit and the application process.
Senator Pate, do you have any reason to believe that benefit payments would be delayed in the event of a court challenge to the Senate’s private insurance amendment?
Senator Pate: To my knowledge — and certainly according to our review of the testimony — no insurance company has indicated that they would plan to claw back the benefit. No province has indicated that they would not support protecting the benefit.