UK’s ‘bad faith’ overseas pension policy costs Canadian taxpayers
“It’s not a party issue,” said Ian Andexser of Nanaimo, British Columbia, who heads the Canadian Alliance of British Retirees. “It’s a snub for Canada.”
And across the pond in England, Tory MP Sir Roger Gale came to the same conclusion: the government he is a part of has acted “in very bad faith” towards Canada.
The issue that angers the two individuals is a UK government policy that excludes UK retirees who live primarily in Canada and Australia from receiving normal pension increases meant to help keep pace with inflation. These are the “frozen retirees” – and approximately 137,000 of them live in Canada.
Gale told CBC News that the freeze does not apply to British retirees who retire in the United States.
“You can literally have two people living on either side of Niagara Falls, one in the US getting an annual UK pension increase, the other living in Canada having their pension frozen. at the UK departure point, “Gale says.
“And of course over many years that means the value of this pension depreciates considerably. There are a lot of retirees, British citizens, living abroad in Canada, Australia and other countries of the world. Commonwealth in particular, who live in dire poverty. Or they have to be supported by the host nation, which I would consider utterly immoral. “
Anne Puckridge, born in British India in 1925, said she didn’t even like looking at her British retirement declarations. “It makes me angry,” she said.
‘We have paid our contributions’
The World War II veteran worked in the UK until she was 76 and retired to Canada 20 years ago to be close to her daughter. She made the same pension payments as any other UK worker – but her pension of £ 72.50 per week (around $ 125) is only about half of what it would be if she lived in the Kingdom United or the United States, rather than Calgary.
“We paid our contributions to our pensions. We felt like we were making adequate retirement arrangements, ”Puckridge told CBC News. “We had no idea that while our money was being accepted we would be one of the four per cent of UK retirees who did not receive full pension.
“Canada looks after us very well. I really appreciate all the help we get from Canada. The UK government, on the other hand, is saving a huge amount of money, several thousand pounds every year, on every person. absent.”
Gale, who chairs the UK all-party parliamentary group’s inquiry into UK non-indexed pensions, said the arrangement seemed to suit the UK government rather well.
“The government seems to have put its feet on the ground as previous administrations have done, and is content to allow our retirees to live off the goodwill of other countries,” he said.
The Cost of Canada’s “Goodwill”
Canada called on the UK to correct the imbalance, which would cost Canada hundreds of millions of dollars a year through lost tax revenue and economic activity – and through spending on welfare benefits for British immigrants elderly who fall into poverty.
“For over 40 years, the Government of Canada has raised this issue with the UK and tried to resolve it,” said Megan Fulton, spokesperson for Employment and Social Development Canada.
She said Canada had asked to negotiate a comprehensive social security agreement with the UK at the end of 2020, but that “the UK has declined Canada’s openings to this day and continues to maintain its position of longstanding that he cannot contemplate indexation of UK pensions paid. Canada. “
“The UK could unilaterally decide to pay indexed pensions to Canada,” she added – just as Canada indexes the pensions of its citizens living in Britain.
Fulton said Canada has not calculated the full cost of UK pension policy parsimony to the Canadian taxpayer, but agrees that many UK retirees need help. “A lot of people are getting by without having the same quality of pensioners in the UK because their pensions have eroded,” she said.
‘Lots of flannel’
The British government says it is only increasing pensions in countries with which it has reciprocal agreements. It does not have one with Canada.
“We understand that people move abroad for many reasons and that this can impact their finances. There is information on GOV.UK on the effects of going abroad on UK state pension entitlement, ”a spokesperson for the UK Department for Works and Pensions told CBC News.
“The government policy on increasing the UK state pension rating for beneficiaries living abroad has been a long standing policy for over 70 years and we continue to increase state pensions abroad where there is a legal obligation to do so.
Gale said the UK did not have a reciprocity agreement with Canada because it had flatly refused to grant one.
Gale said that when he demanded how his government was going to respond to Canada’s offer of a deal, “we got a lot of flannel. [and] a letter from a small Minister of Pensions saying that we have no desire to change.
“I believe we have let down Anne and many others like her who fought, sometimes injured, in the service of their country and withdrew all over the world. It is absolutely wrong. It is indefensible. “
Fairness for others, not for Canada
Andexser came to Canada at the age of 25 in 1976 and built a career in the hotel and pub industry. “I have been a Canadian citizen longer than I have been a British subject,” he said.
As he had previously made pension contributions in the UK, he chose to continue with voluntary contributions from Canada and eventually accumulated 29 years of contributions.
He said he was never warned that he would be denied full board at the end of the day. He said it was time for his adopted country to get tougher on his homeland.
Andexser said Canada should be particularly offended that the UK has recently signed dozens of reciprocity agreements with other countries in Europe.
“Britain has always said we don’t sign new deals anymore. Well, they just defied that by signing 27 deals with EU countries after Brexit.”
Britain has also signed agreements with non-EU Norway, Iceland and Liechtenstein and will send full pensions to all of these countries.
“They rejected Canada’s request,” Andexser said. “This is an absolute snub to the Canadian government.”
A chance to turn up the heat
Andexser said he wanted to see Canada harness the influence it has because of Britain’s need to sign post-Brexit free trade agreements.
“While I know that pensions cannot be part of any trade agreement, they can certainly be part of trade negotiations,” he said. “We have something they want. And this is the perfect opportunity to use it.”
Andexser said the cost to Canada will only rise if the situation is not addressed, as working-age British immigrants to Canada outnumber retirees and may soon find themselves in the same situation.
While the Government of Canada has insisted in the past that commerce and pensions are separate issues, Andexser said he was encouraged when invited. make a presentation to the Commons Standing Committee on International Trade at the end of February.
And last month, the House of Commons unanimously adopted a motion tabled by Green MP Paul Manly call on the federal government to put pressure on Britain to change its retirement policy.
Asked by CBC News about whether it would make pensions an issue in trade negotiations, the Canadian government has not ruled it out.
“Public consultations are currently underway in Canada to seek the views of Canadian stakeholders,” said Mr. Fulton.
Andexser said his group plans to vigorously lobby Canadian politicians to include pensions in the talks.
“We have to make enough noise for the British government to realize that it cannot treat Canada as if we are still a colony.”