Hey there, time traveller!
This article was published 28/5/2015 (2336 days ago), so information in it may no longer be current.
Canadians should not be fooled by Finance Minister Joe Oliver's announcement that the government will consult with Canadians about allowing voluntary contributions to the Canada Pension Plan. This is nothing more than an anxious government's cynical and desperate attempt to make this issue go away.
If there is one issue that has haunted the Conservative government through its mandate, it has been the CPP. Time and again, the government has twisted itself into knots in an effort to avoid what the vast majority of Canadians want: a better CPP.
The Conservative government has been running from the CPP throughout its tenure. When workplace pensions came under pressure and RRSP accounts cratered in the 2008 financial crisis, Ottawa agreed to explore a modest expansion of the CPP with the provinces. Then-finance minister Jim Flaherty -- a Conservative minister actually persuaded by facts -- saw the wisdom of growing the CPP, and indicated his support in June 2010 for an enlarged CPP. He was soon overruled by the prime minister and taken off the pension file.
The government then insisted the economic conditions weren't right to gradually phase in a bigger CPP benefit, refusing to specify when it would be a good time to expand the CPP. Economists argued economic conditions were actually more favourable than they were when the Liberal government committed to revamping the CPP in the mid-1990s.
So the federal government changed its tune again, saying it wasn't enough that two-thirds of the provinces representing two-thirds of the population wanted to explore CPP expansion -- there had to be consensus among all provinces. When all provinces indicated they were open to continuing the discussion, the federal government ran out of excuses, and simply refused to discuss it further. Provincial finance ministers were aghast.
Like Minister of State for Finance Kevin Sorenson before him, Oliver claims a gradual, phased-in expansion of CPP benefits would devastate the economy and destroy jobs. His own economists in the Finance Department proved him wrong, much to the government's embarrassment. But that hasn't stopped the Conservatives from continuing to fear-monger and reach for red herrings in an attempt to prevent any debate about the facts.
In the meantime, public backing for an improved CPP has only grown stronger. Support is higher now than it was in 2010, when the federal government committed to a modest expansion. Public opinion polls consistently show more than 75 per cent of Canadians -- 80 per cent in the most recent Nanos poll -- support enhancing the Canada Pension Plan. In all regions, in all age groups, in all income brackets, and among all party affiliations, Canadians want a better CPP.
The Conservatives tried to make this issue go away. But it won't, because 11 million working Canadians -- the vast majority of workers -- have no workplace pension plan or any prospect of having one.
Meanwhile, offering people a growing alphabet soup of options to save on their own -- pooled register pension plans, tax-free savings accounts, now voluntary contributions to the CPP -- has already proven ineffective at lifting the saving rate and ensuring secure, decent incomes in retirement. A shrinking minority of Canadians is putting money in RRSPs, and Canadians are taking money out of TFSAs almost as fast as they're putting money in. Meanwhile, the household saving rate continues to languish around record lows, and indebtedness stands near record highs. Seniors are already carrying more debt into retirement, and a recent Ontario study found a growing reliance of seniors on payday lenders and other high-risk credit sources. Leading pension experts have warned the government repeatedly about the inability of voluntary fend-for-yourself 'solutions' to averting the coming retirement crisis.
The Canada Pension Plan is the one part of our retirement income system that is working well. Virtually all workers and self-employed save through the Canada Pension Plan. Employers can't walk away from it -- they have to participate.
No matter where you work, or how many times you change jobs, you're always saving for retirement through the CPP. And it pays a real pension in retirement -- a predictable, secure monthly benefit, protected against inflation. It's there for you right until the end, even if you live past 100. The plan is securely funded, and an independent actuary checks the books every three years. The government doesn't control the CPP fund and can't get its hands on it. The only problem with the CPP is the benefit it pays is too low to live on with dignity in retirement. That's why Canadians want it expanded. Let's have a real debate about the facts, instead of putting the issue on the back burner.
Hassan Yussuff is president of the Canadian Labour Congress, which represents 3.3 million workers in Canada.