Death benefit change panned

OTTAWA — A change to the Canada Pension Plan to provide a flat-rate death benefit to help low-income families cover funeral costs falls short of what funeral homes say is needed to cover the cost of a final farewell.

After meetings last week, federal and provincial finance ministers set the death benefit at a flat $2,500, regardless of how long or how much someone had paid into CPP.

Leading up to the meeting, the Funeral Services Association of Canada lobbied governments to raise the value to $3,580 — back to what it was in 1997 before finance ministers of the day imposed a sliding scale benefit, capped at $2,500, based on an individual’s contributions to the CPP.

The association also asked that the benefit be tied to inflation so its value would increase with the cost of living.

Finance ministers didn’t agree. And now there are concerns more people won’t be able to afford a funeral, which costs an average $6,000.

“It doesn’t make sense,” association president Yves Berthiaume said. “Government needs to look at it [the death benefit] a little more closely and how they want to deal respectfully with their citizens.”

A spokeswoman for federal Finance Minister Bill Morneau said the change would increase benefits to the estates of lowerincome contributors.

The death benefit would likely be worth $5,500 today had it not been capped two decades ago.

At the time, officials worried the benefit would become financially unsustainable if its value increased annually with the maximum income covered by CPP premiums.

The funeral services association estimates the benefit has lost 38 per cent of its buying power over the past two decades due to inflation.

Conservative social development critic Karen Vecchio said the finance ministers’ decision runs counter to what stakeholders wanted and would force Canadians to not only find ways to save more for retirement, but for death as well.

Hassan Yussuff, president of the Canadian Labour Congress, said the flat-rate payment would ensure no one is denied the benefit because they didn’t contribute enough money for a long enough period of time. But he said he was at a loss to understand why the finance ministers didn’t do more.

“The numbers need to come up and we’ll have to put some effort to try and address that,” Yussuff said.