Canada has signed an international Social Security Agreement with Japan. It is Canada’s 50th social security agreement concluded with other countries.

The agreement signed today is good news for Canadian companies operating in Japan who were previously paying significant pension contributions for Canadians workers sent to Japan. These workers will now be able to continue paying into the Canada Pension Plan while posted abroad. It will also help to protect the pension rights of citizens of both countries.

The agreement represents an important achievement under the Canada-Japan Economic Framework, an initiative developed jointly in 2005. The framework is designed to help strengthen bilateral trade and investment, as well as economic cooperation between the two countries.

“Canada is committed to entering into agreements with other countries that offer programs comparable to our Old Age Security program and Canada Pension Plan,” said Diane Finley, Minister of Human Resources and Social Development. “Agreements such as this one will help provide seniors with additional income in retirement. This agreement with Japan is also an important step toward strengthening the relationship and cooperation between our two countries.”

Social security agreements between Canada and other countries help people who have lived or worked in both Canada and another country to qualify for old age, retirement, disability, or survivor benefits from both countries.

The agreement applies to Canada’s Old Age Security (OAS) program and Canada Pension Plan (CPP) and the comparable Japanese pension program, which provides old age, disability, and survivor benefits.

Normally, to qualify for a benefit under the Japanese pension program, a person must have contributed to the program for a minimum number of years. Under the agreement, people can add together periods of social security coverage under the programs of both countries to qualify for Japanese social security benefits.

In the same way, to be eligible to receive disability or survivor benefits under CPP, a person must have contributed to the plan for a minimum period. Under the agreement, Canada will allow people to add periods of contribution to the Japanese pension program to qualify for CPP benefits.

Similarly, to qualify for an OAS pension, people must have resided in Canada for a minimum number of years. The agreement allows applicants to use their periods of contribution to the Japanese pension program to meet the residence requirements for an OAS pension.

The agreement ensures that Canadian workers can continue to contribute to the CPP if their employer sends them to Japan to work temporarily. Consequently, their CPP protection will not be interrupted. The agreement also ensures that Canadian companies and their workers are exempt from contributing to Japan’s pension program while they are working in Japan.

The agreement between Canada and Japan will enter into force after both countries complete approval procedures specified in their legislation or constitution. It is anticipated that the agreement will enter into force in late 2007.