What to expect in 2016

As far as I can tell, 2015 was a hard year for many Canadians. Our population continues to age, and more of us (me included) are experiencing the deterioration of our parents’ health.

Too many younger people this year suffered tragedy as well. Our Federal government has changed, and that will lead next year to some significant policy changes.

From a legal perspective, here is what I anticipate will be in the news next year.

Canada Pension and Old Age Security
As Canadians by the thousands continue to apply for CPP benefits, it will become even more clear (if it isn’t already) that too many people depend heavily on their CPP and OAS benefits.

The CPP benefit, typically payable the last three days of the month before, will rise for 2016 to a maximum of about $1,092 per month. Taking the CPP before age 65 will reduce the benefit a lot, depending how early after age 60 you start.

Meanwhile, new rules allow a deferral of the OAS benefit in favour of an increased monthly benefit. After age 65, every month of deferral brings a 0.6% benefit increase, up to age 70 (where the benefit rises by 36%).

The current OAS benefit, which for the vast majority of Canadians starts at age 65 (it will not start before), is now around $570 per month.

So if a person starts both pensions today, at age 65, they will receive a maximum of about $1,660. If they earn more than about $67,000 of taxable income, their OAS will start getting “clawed back.”

Once they taxable income reaches the area of  $120,000, all their OAS is taken by the Federal government.

The issue that has been in debate the last few years is the amount of the CPP benefit. Since we pay into the CPP (we do not pay into the OAS; it is funded from government general revenue), and since so many people depend on their pensions for their income, there is concern that the benefit is insufficient for many Canadians.

The value of the Canada Pension Plan is in excess of $220 billion, an all-time high. Many groups across the country therefore felt an increase to the CPP benefit was appropriate.

The Conservative government did not agree, and felt an increase was only justified if a premium increase was imposed at the same time, which was also opposed on the basis that individual Canadians (and companies that match the premiums individuals pay) should not be asked again for a premium increase.

I don’t expect that the (Federal) Liberal government will follow. I expect there will be more discussion, leading to an increase of some sort, though how much and when are yet to be determined.

Another, major factor to consider is that, in the next three or four years, given the numbers of retiring Canadians, payouts from the CPP will exceed the amounts of contributions we are making.

Income from invested funds managed by the CPP Investment Board, already an important factor in the overall value of the CPP, will become even more so given that, for the long term, nobody wants to see the value of the CPP drop.

With so many Canadians becoming pensioners, and a new government seeming more receptive to the CPP issue, you can expect a change in the debate.

As for what it will translate to in terms of some increase in the CPP benefit, you will have to watch and read the news, and make your voice heard where the opportunity presents itself.

Right to ‘die’
Life expectancy in B.C. leads the Canadian rates. Men here can now expect to live roughly to age 82, while women can expect to live to age 85. But it doesn’t stop there.

Since the Terry Schiavo case in the United States, more than 10 years ago, the issue has become one of the quality of life. British Columbians have sought to make Representation Agreements (“RA”s) in larger numbers since the Schiavo case.

In an RA, a person appoints another person to make health care decisions for them. That may include a request that they not be kept alive by machinery (called a “Living Will” clause). Hospitals and care facilities are gradually becoming more familiar with RAs, which can be quite helpful, especially where not all family live locally.

I expect to see and hear more discussion relating to people wanting to right to control their own passing. In cases where the people are afflicted with a degenerative disease (such as cancer or ALS), it is hard to argue with a person’s desire to end their life, where they have full capacity to make that kind of difficult decision.

You can expect to see and hear more in the coming year with this debate, and I expect we will get closer to legislation that will allow the right to die. It likely won’t happen in the next year, but we are on the road, partly because of cost pressures in our health care system.

In B.C., spouses and children (who feel unfairly bequeathed, so to speak) of a deceased person are eligible to seek to vary their Will. In the last five years, it would seem that the volume of cases has increased.

It probably partly relates to the meteoric rise in real estate prices over the last decade. Estates have become more valuable, so there is “more to fight for” (so to speak).

Regardless of the reasons, you can expect many more cases in 2016, and further evolution in this relatively new and controversial area of law.