Estimate for the entirety of Bill C-221: An act to amend certain Acts in relation to survivor pension benefits
This analysis provides the estimated gross expenditure for the entirety of Bill C-221, including the aspects pertaining to veterans. Currently, in certain situations, the spouse of a deceased pensioner is not eligible for a survivor pension. This occurs if the pensioner and the spouse married or began cohabiting in a conjugal relationship after the pensioner retired (in the case of the federal Public Service, Federally Appointed Judges, members of the House of Commons and Senators) or retired and was at least 60 years old (in the case of veterans and the RCMP). Under Bill C-221, all of these spouses would become eligible for survivor pensions.
The PBO estimates the expenditure from the Bill with an effective date of January 1, 2023. The PBO estimates Bill C-221 will result in a gross expenditure from pension plans of $68 million in 2022-23 for a total expenditure of $1.3 billion over the next 5 years.
This analysis provides the estimated gross expenditure for the entirety of Bill C-221, including the aspects pertaining to veterans.[^1],[^2] Currently, in certain situations, the spouse of a deceased pensioner is not eligible for a survivor pension. This occurs if the pensioner and the spouse married or began cohabiting in a conjugal relationship after the pensioner retired (in the case of the federal Public Service, Federally Appointed Judges, members of the House of Commons and Senators) or retired and was at least 60 years old (in the case of veterans and the RCMP). Under Bill C-221, all of these spouses would become eligible for survivor pensions.[^3] The PBO estimates the expenditure from the Bill with an effective date of January 1, 2023.
- Estimates are presented on an accrual basis as would appear in the budget and public accounts.
- A positive number implies a deterioration in the budgetary balance (lower revenues or higher spending). A negative number implies an improvement in the budgetary balance (higher revenues or lower spending).
- Totals may not add due to rounding.
To determine the number of veterans’ spouses that would become eligible for a survivor pension as a result of this Bill, the number of surviving spouses ineligible for survivor pensions due to having entered into a relationship with a veteran after the year in which the veteran turned 60 years old was provided by Statistics Canada for the year of 2018.[^4] This number of ineligible spouses was adjusted for non-veteran groups using data from relevant agencies about each group’s average retirement age and current population of survivor pension recipients.
To project to 2027, for each group, the growth rate of survivor pension recipients was used to estimate the growth in surviving spouses who would newly receive benefits under the Bill. These new recipients were assumed to receive the same average pension amount as current survivor pension recipients. The pension amounts were assumed to keep growing at their current rate. The PBO then multiplied the number of new recipients by the average annual pension amount.
The main sources of uncertainty stem from pensioners who are currently contributing to an Optional Survivor Benefit (OSB) and current survivors in receipt of an OSB.[^5] The effect of these pensioners switching to full pensions and survivors switching to full survivor pensions was not taken into account due to a lack of data. A behavioural response was not incorporated.