Canada- USA Protocol

Protocol (1996) amending Social Security Agreement (1981)

Second Supplementary Agreement Amending the Agreement Between the Government of Canada and the Government of the United States of America with Respect to Social Security

THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA,

NOTING the Agreement between them with respect to Social Security, signed at Ottawa on March 11, 1981, and the Supplementary Agreement amending that Agreement, signed at Ottawa on May 10, 1983, and

HAVING determined the need to adjust certain provisions of the Agreement, HAVE decided to conclude a second Supplementary Agreement and, to this end, HAVE agreed as follows:

Article 1

For the purposes of this Supplementary Agreement:

a. “the Agreement” means the Agreement between the Government of Canada and the Government of the United States of America with respect to Social Security, signed at Ottawa on March 11, 1981, as amended by the Supplementary Agreement Amending the Agreement between the Government of Canada and the Government of the United States of America with respect to Social Security, signed at Ottawa on May 10, 1983;

b. any other term has the meaning assigned to it in the Agreement.

Article 2

Article I of the Agreement is amended as follows:

a. In paragraph (1), the word “and” between the words “Guam” and “American Samoa” is replaced by a comma (“,”), and the words “and the Northern Mariana Islands” are added immediately after “American Samoa”.

b. In paragraph (4), the words “Secretary of Health and Human Services” are deleted, and the words “Commissioner of Social Security” are substituted in their place.

c. In paragraph (5), the words “Department of National Health and Welfare” are deleted, and the words “Department of Employment and Immigration (designated by Human Resources Development)” are substituted in their place; and the hyphen (“-”) and the word “Taxation” are deleted.

d. In paragraph (9), the period (“.”) at the end thereof is deleted, and a semi-colon (“;”) is substituted in its place.

e. The following new paragraphs (10) and (11) are inserted immediately after paragraph (9):

“(10) “Government of Canada” means the Government in its capacity as representative of Her Majesty the Queen in right of Canada;

(11) Any term not defined in this Article has the meaning assigned to it in the applicable laws.”

Article 3

Article II of the Agreement is amended as follows:

a. In paragraph (1)(a)(ii), “1954” is deleted, and “1986” is substituted in its place.

b. Paragraph (3) is deleted, and the following new paragraphs (3) and (4) are substituted in its place:

“(3) Subject to paragraph (4), this Agreement shall also apply to laws which amend, supplement, consolidate or supersede the laws specified in paragraph (1).

(4) This Agreement shall apply to laws which extend the laws of a Contracting State to new categories of beneficiaries unless an objection on the part of that Contracting State has been communicated to the other Contracting State not later than three months following the entry into force of such laws.”

c. Paragraph (4) is renumbered as paragraph (5).

Article 4

Article V of the Agreement is amended as follows:

a. Paragraph 2(a) is revised to read as follows:

“Where a person who is normally employed in the territory of one Contracting State and who is covered under its laws in respect of work performed for an employer having a place of business in that territory is sent by that employer to work for the same employer in the territory of the other Contracting State, the person shall be subject to the laws of only the first Contracting State in respect of that work, as if it were performed in the territory of the first Contracting State. The preceding sentence shall apply provided that the period of work in the territory of the other Contracting State is not expected to exceed 60 months. For purposes of applying this sub-paragraph, an employer and an affiliated company of that employer (as defined under the laws of the Contracting State from which the person was sent) shall be considered one and the same, provided that the employment in the other Contracting State would have been subject to the laws on compulsory coverage of the Contracting State from which the person was sent in the absence of this Agreement.”

b. Paragraph (9) is deleted.

Article 5

Chapter 2 of Part III of the Agreement is deleted, and the following new Chapter 2 is substituted in its place:

Chapter 2 – Provisions Applicable to Canada

Article VIII

1.

a. If a person is not entitled to the payment of a benefit because he or she has not accumulated sufficient periods of residence under the Old Age Security Act, or periods of coverage under the Canada Pension Plan, the entitlement of that person to the payment of that benefit shall, subject to sub-paragraph (1)(b), be determined by totalizing these periods and those specified in paragraph (2), provided that the periods do not overlap.

b. In the application of sub-paragraph (l)(a) of this Article to the Old Age Security Act:

i. only periods of residence in Canada completed on or after January 1, 1952, including periods deemed as such under Article VI of this Agreement, shall be taken into account; and

ii. if the total duration of those periods of residence is less than one year and if, taking into account only those periods, no right to a benefit exists under that Act, the agency of Canada shall not be required to pay a benefit in respect of those periods by virtue of this Agreement.

2.

a. For purposes of determining entitlement to the payment of a benefit under the Old Age Security Act, a quarter of coverage credited under United States laws on or after January 1, 1952 and after the age at which periods of residence in Canada are credited for purposes of that Act shall be considered as three months of residence in the territory of Canada.

b. For purposes of determining entitlement to the payment of a benefit under the Canada Pension Plan, a calendar year including at least one quarter of coverage credited under United States laws shall be considered as a year of coverage credited under the Canada Pension Plan.

Article IX

1. If a person is entitled to the payment of an Old Age Security pension or a spouse’s allowance solely through the application of the totalizing provisions of Article VIII, the agency of Canada shall calculate the amount of the pension or spouse’s allowance payable to that person in conformity with the provisions of the Old Age Security Act governing the payment of a partial pension or a spouse’s allowance, exclusively on the basis of the periods of residence in Canada on or after January 1, 1952 which may be considered under that Act or are deemed as such under Article VI of this Agreement.

2. Paragraph (1) shall also apply to a person outside Canada who would be entitled to the payment of a full pension in Canada but who has not resided in Canada for the minimum period required by the Old Age Security Act for entitlement to the payment of a pension outside Canada.

3. Notwithstanding any other provision of this Agreement:

a. an Old Age Security pension shall be paid to a person who is outside Canada only if that person’s periods of residence, totalized as provided in Article VIII, are at least equal to the minimum period of residence in Canada required by the Old Age Security Act for entitlement to the payment of a pension outside Canada; and

b. a spouse’s allowance and a guaranteed income supplement shall be paid to a person who is outside of Canada only to the extent permitted by the Old Age Security Act.

Article X

If a person is entitled to the payment of a benefit under the Canada Pension Plan solely through the application of the totalizing provisions of Article VIII, the agency of Canada shall calculate the amount of benefit payable to that person in the following manner:

a. the earnings-related portion of the benefit shall be determined in conformity with the provisions of the Canada Pension Plan, exclusively on the basis of the pensionable earnings under that Plan; and

b. the flat-rate portion of the benefit shall be determined by multiplying:

a. the amount of the flat-rate portion of the benefit determined in conformity with the provisions of the Canada Pension Plan by

b. the fraction which represents the ratio of the periods of coverage under the Canada Pension Plan in relation to the minimum qualifying period required under that Plan to establish entitlement to that benefit, but in no case shall that fraction exceed the value of one”.

Article 6

Article XII of the Agreement is amended as follows:

a. The following new sub-paragraph (b) is inserted immediately after sub-paragraph (a):

“(b) To the extent permitted by the laws which they administer, and any other relevant national statutes, communicate to each other any information necessary for the application of this Agreement;”

b. The existing sub-paragraphs (b) and (c) are respectively redesignated as sub-paragraphs (c) and (d).

Article 7

Article XIII is amended by adding the following sentence at the end thereof:

“In accordance with arrangements to be agreed upon pursuant to Article XII (a), the Competent Authorities and agencies may also assist each other in administering the laws to which this Agreement applies.”

Article 8

1. The Contracting States shall notify each other in writing, through the diplomatic channel, of the completion of their respective legal procedures required for the entry into force of this Supplementary Agreement. This Supplementary Agreement shall enter into force on the first day of the fourth month after the date of the last notification.

2. On the entry into force of this Supplementary Agreement, any reference in the Agreement to “this Agreement” shall be taken to mean the Agreement as amended by this Supplementary Agreement.

3. The application of this Supplementary Agreement shall not result in any reduction in the amount of a benefit to which entitlement was established prior to its entry into force.

4. Subject to paragraph (5), this Supplementary Agreement shall remain in force without any limitation on its duration.

5. In the event of the termination of the Agreement through the application of paragraph (1) of Article XXI thereof, this Supplementary Agreement shall also be terminated, with effect on the same day as the termination of the Agreement.

IN WITNESS WHEREOF, the undersigned, being duly authorized thereto by their respective Governments, have signed this Supplementary Agreement.

DONE in two copies at Ottawa, this 28th day of May, 1996, in the English and French languages, both texts being equally authentic.

Douglas Young
FOR THE GOVERNMENT OF CANADA

James D. Walsh
FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA