Ask a simple question

By Aaron Wherry - Tuesday, February 7, 2012 at 1:33 PM - 0 Comments

The NDP persisted yesterday in asking straightforward questions of the government.

Will the Conservatives change the eligibility age for old age security? Will the age increase from 65 to 67, yes or no?

Will the eligibility age for OAS benefits increase from 65 to 67? Yes or no? When will this measure go into effect?

Bob Rae then added one of his own.

I would like to ask the government today if it could at least make a commitment that none of these changes that it is talking about will take place until after 2015, so, at the very least, Canadians will have an opportunity to vote on the changes being imposed on them by the government.

In response, Diane Finley offered only that “anyone who is young enough, like myself, or people younger than I, will have time to adjust their plans for their own retirement.” Ms. Finley is presently 54 years old. She turns 55 in October.

‘It’s being considered’

By Aaron Wherry - Friday, February 3, 2012 at 6:28 PM - 0 Comments

The Prime Minister talks to Postmedia about OAS, China and Iran.

Postmedia: There are Canadians who are wondering, ‘What does it mean to me?’ So that’s why I asked the question. Are you in a position to tell us whether or not the OAS eligibility is being considered as an option?

Harper: Absolutely, it’s being considered. But what we have to be clear on is that we are not looking at changes that are going to affect people that are currently in retirement or approaching retirement. We’ve been very clear on that.

Postmedia: Should anybody over the age of 50 be concerned?

Harper: I’ve just said we’re examining these things. The government hasn’t taken final decisions, so I don’t want to speculate on particulars. But I think we have been very clear in our electoral mandate that we’re not going to make any changes to seniors or to pensions in any way that deals with the current deficit.

Nash on pensions

By Aaron Wherry - Friday, February 3, 2012 at 1:08 PM - 0 Comments

Peggy Nash has released her platform on pensions and retirement security. It includes the four promises outlined in the last NDP election platform, plus a fifth policy.

In addition to upholding the NDP’s 2011 platform commitments to improve retirement security, Nash’s plan proposes to work with the provinces/territories to permit a transfer of the value of private pensions to the CPP/QPP in the event that an individual terminates employment and his/her company continues in operation or in cases where the company ceases to operate.

Ask a simple question

By Aaron Wherry - Friday, February 3, 2012 at 8:38 AM - 0 Comments

Here are four of the first five questions asked by the NDP yesterday afternoon.

Will he rise in his seat and say to the country that the age of eligibility for OAS will not be raised to age 67, yes or no?

Will he raise OAS eligibility to 67 years, yes or no?

There is enough money for tax gifts for large corporations, but now seniors will have to wait until the age of 67 to get their $540 a month? Yes or no?

Is the eligibility age going to increase to 67, yes or no?

None of those questions received straight answers. The House did though spend the day discussing the pension system and Old Age Security—starting here, resuming here. For whatever it might foretell or explain, Diane Finley’s speech on behalf of the government is here.

The Finance Minister seems intent on doing something. A poll conducted by Ipsos Reid found 74% disapproved of raising the eligibility age to 67.

Never mind the major transformation?

By Aaron Wherry - Thursday, February 2, 2012 at 8:30 AM - 0 Comments

A week after the speech in Davos, CTV has the Prime Minister in “retreat.”

Sources have told CTV News that MPs told Harper during a Conservative caucus meeting Wednesday that reforming pensions “is not a vote winner” and complained they were taken by surprise by the plan.

The government has since toned down their language from the “transformative” changes that Harper spoke about in Davos. ”It’s a review . . . to make sure we have a sustainable, long-term fiscal plan for our country,” Finance Minister Jim Flaherty told CTV. He also said that the upcoming federal budget will have nothing to do with OAS.

Update 9:52am. A note from the Finance Minister’s office. Continue…

The Commons: The Russians are coming for our pensions

By Aaron Wherry - Wednesday, February 1, 2012 at 5:52 PM - 0 Comments

The Scene. “Oui ou non?” Nycole Turmel demanded. “Oui ou non?”

Will the Prime Minister be cutting Old Age Security benefits, she asked, yes or no? Will the age of eligibility be raised to 67, she wondered, yes or no?

“We want an answer,” she concluded.

In response, the Prime Minister had two answers. “Mr. Speaker, I was very clear. This government will not cut benefits for our seniors. I am very clear,” he declared. “At the same time, we will protect the system for generations to come.”

After jetting off to Switzerland and standing proudly before the global elite and bragging of his stewardship and boasting of “major transformations” to come, the Prime Minister seems suddenly shy. It is as if,  having scaled the rhetorical heights, he was suddenly reminded why he generally avoids high places. And so now he is attempting to stall, perhaps even soothe, with a sleight of hand. Continue…

The debate’s not over

By Aaron Wherry - Wednesday, February 1, 2012 at 8:30 AM - 0 Comments

The Conservatives have moved to limit the pension debate as it pertains to the government’s own legislation, but the House will now spend Thursday debating the following NDP motion.

That this House rejects calls by the Prime Minister to balance the Conservative deficit on the backs of Canada’s seniors by means such as raising the age of eligibility for Old Age Security and calls on the government to make the reduction and eventual elimination of seniors’ poverty a cornerstone of the next budget.

Separately, Liberal backbencher Sean Casey has tabled a private members’ motion that the Liberals figure will come up for debate in March. Continue…

The Commons: The case of actions v. words

By Aaron Wherry - Tuesday, January 31, 2012 at 6:33 PM - 0 Comments

The Scene. “Mr. Speaker, once again, I think the government has been repeatedly clear when it comes to retirement income, such as old age security,” the Prime Minister clarified.

And on that note, his second sentence. ”We have no intention,” he said, “of changing any benefits.”

Clearly. At least so far as those with no short term memory could be concerned. For the rest of those listening, there was what the government had sent up Wai Young to say no more than 90 seconds earlier. ”We will implement any changes fairly,” the dutiful backbencher reassured the House with the last intervention before Question Period, “allowing lots of time for notice and time to adjust.”

So the government has no intention of making changes. But if—for whatever reason—it should be struck with such intent sometime between now and the tabling of this spring’s budget, you are to be assured that those changes will be implemented fairly. Indeed, even with these changes existing only in the theoretical, the government presently lacking even the intent to make them, Ms. Young managed today to congratulate her side for having had the courage to change. “In fact,” she reported, “the National Post gets it with its front page headline today, ‘Tories on the right side of pension reform.’ ”

Continue…

What crisis?

By Aaron Wherry - Tuesday, January 31, 2012 at 8:30 AM - 0 Comments

Bill Curry notes that the government’s own expert analysis found no impending crisis.

Edward Whitehouse – who researches pension policy on behalf of the Organization for Economic Co-operation and Development and the World Bank – was asked by Ottawa to study and report on how Canada stacks up internationally when it comes to pensions.

His conclusion: “The analysis suggests that Canada does not face major challenges of financial sustainability with its public pension schemes,” and “there is no pressing financial or fiscal need to increase pension ages in the foreseeable future.”

Mr. Whitehouse’s full report is here. His testimony before the finance committee is here. That committee’s final report on the “retirement income security of Canadians” is here.

Not a matter of if, but when

By Aaron Wherry - Monday, January 30, 2012 at 12:50 PM - 0 Comments

Peter Van Loan says the government wants to make sure OAS is sustainable “10 years, 20 years and 30 years from now.” John Ivison’s sources tell him the government is looking at a 10-year timeframe. Don Drummond says the government would have to phase in changes over the next 20 to 25 years. Frances Woolley pinpoints 2023.

So the question is not if the pension age will be increased, but when. 1959 was the year with the highest number of births ever recorded in Canada 461,703 babies. After that, the number of births fell slightly, and then dropped precipitously with the advent of the birth control pill. (Immigration reduces the relative impact of, but does not eliminate, the baby boom bulge.)

For an increase in the entitlement age to achieve substantial cost savings, it will have to be in place when those 1959 babies hit 65 in 2024. So I’m predicting that the entitlement age will gradually be increased, in 6 month increments, with a new entitlement age of 67 in place by 2023.

The cost and savings of OAS

By Aaron Wherry - Friday, January 27, 2012 at 11:48 AM - 0 Comments

Kevin Milligan considers the ramifications of changes to Old Age Security.

By 2031 — at the peak of the baby-boom retirement wave — the share of GDP spent on Old Age Security will rise to 3.14 per cent, for an increase of 0.73 per cent over today’s level. Now, an increase of 0.73 per cent of GDP cannot be ignored, but neither is it disastrous. To provide some scale, David Dodge and Richard Dion project that spending on health will grow from 12 per cent to 18.7 per cent of GDP by 2031, for an increase of 6.7 percentage points. In the fight for government spending dollars in 2031, health is the elephant and the Old Age Security pension is the mouse…

In research in progress, I am finding that around three quarters of those not working in the years just before reaching age 65 have other sources of income sufficient to get them out of low-income range. Of course, the flipside is that one quarter of them do not. If the retirement age increases, these Canadians may suffer as they wait for their public pension cheques to begin flowing.

Mulcair on pensions

By Aaron Wherry - Wednesday, January 11, 2012 at 1:18 PM - 0 Comments

Thomas Mulcair pitches pension reform, including a pension exchange.

The proposed pension exchange would be operated by CPP and consist of a payroll deduction system, a selection of investment funds including a public plan offered by the CPP Investment Board and regulatory requirements to both guarantee and insure benefits.

“Canadians who choose to participate will be able have their pension contributions deducted directly from their pay cheque and invested through the exchange in one of several investment funds including a public plan offered by the CPP Investment Board. This will force large financial institutions to complete for our investment dollars and guarantee both lower management fees and higher rates of return.”

Paying the bills (II)

By Aaron Wherry - Tuesday, January 10, 2012 at 5:30 PM - 0 Comments

The CBC reports the government will cut deeper into departmental budgets than previously planned. The Finance Minister raises the possibility that some departments may have to cut more than 10% from their budgets.

The Post reports that the Conservatives may try to adjust MP pensions, but the Finance Minister seems to defer.

On the issue of whether changes are afoot for the pension plans of members of Parliament, Mr. Flaherty said that is a decision for the House of Commons Board of Internal Economy, not the government.

The Board of Internal Economy is presently composed of three Conservatives, two New Democrats and a Liberal. Its meetings are conducted in camera.

Policy alert

By Aaron Wherry - Wednesday, March 30, 2011 at 3:33 PM - 19 Comments

Michael Ignatieff promises pension reform.

Ignatieff says the Liberals will work with the provinces to gradually expand Canada Pension Plan benefits. He’s also promising a voluntary supplement to the CPP called the Secure Retirement Option that would let people save an extra five to 10 per cent of their pay in a CPP-backed fund. And the Liberals plan to boost the Guaranteed Income Supplement, or GIS, by $700 million a year — more than double what the Conservatives are offering.

Michael Ignatieff talks

By Aaron Wherry - Wednesday, March 30, 2011 at 2:53 PM - 57 Comments

In a set of new ads, the Liberal leader discusses Conservative attacks, pensions and family care.

The Liberals have also updated a previous ad about Mr. Harper.

What the boomers are leaving their children

By Jonathon Gatehouse - Wednesday, December 1, 2010 at 10:00 AM - 184 Comments

Ben Stansall/AFP/Getty Images; Andy Clark/Reuters

This January, the first baby boomers turn 65. The huge post-Second World War generation—which numbers 76 million in the United States, makes up almost a third of Canada’s population, and according to one estimate, controls 80 per cent of Britain’s wealth—will continue to enter their dotage at the rate of tens of thousands per day for the next 20 years. By 2050, there will be 30 million Americans aged 75 to 85, three in 10 Europeans will be 65-plus, and more than 40 per cent of Japan’s population will be elderly. In Canada, the ratio of workers to retirees—currently five to one—will have been halved by 2036. And despite the odd dissenter, the generation that still oddly finds Paul McCartney relevant has made clear its intention to take everything it feels it has coming. It will be up to all who trail in their wake to pay for their privilege.

Common sense, not to mention decency, wouldn’t call that just. But an outsized, over-entitled, and self-obsessed demographic is awfully hard for politicians to ignore. Take Britain’s example. In last spring’s general election, the most effective ad run by David Cameron’s Conservatives was also one of the simplest: a close-up of a newborn baby, wriggling in a bassinet as a music box tinkled in the background. “Born four weeks ago, eight pounds, three ounces. With his dad’s nose, mum’s eyes, and Gordon Brown’s debt,” intoned a female voice. “Thanks to Labour’s debt crisis, every child in Britain is born owing £17,000. They deserve better.” The point was impossible to miss: the time had come to stop mortgaging the country’s future.

Continue…

Viewer discretion advised

By Aaron Wherry - Thursday, November 25, 2010 at 9:35 AM - 10 Comments

A professor regrets advising his students to watch this week’s pension debate.

Given he is teaching a third-year course on retirement and pensions and had recently weighed in with a call for a higher retirement age, Prof. Hering asked his students to watch the exchanges live on CPAC, the Parliamentary channel. “Since the level of debate was so disappointing, I felt bad that I asked them to watch it,” said Prof. Hering…

A savings safety net

By Peter Shawn Taylor, Jullia Belluz - Thursday, November 18, 2010 at 12:40 PM - 11 Comments

Hernandez has put 15 years' worth of savings into his new Toronto restaurant. Most people aim for a retirement income of 60 per cent of their working-life income. | Jessica Darmanin / Pawel Dwulit/GetStock

Carlπos Hernandez understands the restaurant business. The retirement business, on the other hand, is a bit of a mystery.

After a career spent working in other people’s kitchens, Hernandez, a native of El Salvador, is on the verge of opening his own restaurant. Inigo, in downtown Toronto, will offer takeout Portuguese churrasqueira-inspired fare—oven-roasted chicken, salads and brown rice. At 48, Hernandez felt it was time he became his own boss. So he’s sunk 15 years of savings into his venture.

While most financial advisers would argue against putting a lifetime of savings into a single, risky asset, the chef figures he knows his way around a kitchen counter much better than a stock portfolio. If the restaurant flops, however, he’ll be left with nothing.

“This is a gamble,” Hernandez admits of his foray into the notoriously fickle restaurant industry. “But it’s all I know. I’m not thinking in terms of a retirement plan.”

Continue…

Europe loses its cool

By Charlie Gillis and Nancy MacDonald - Wednesday, November 3, 2010 at 12:20 PM - 0 Comments

Charles Platiau/Reuters

Hugo Christy doesn’t have to worry about his pension for 40 years. He hasn’t even started working yet. None of this has stopped the 21-year-old student from the Institut d’Études Politiques de Paris from joining thousands of striking workers in mass protests against the French government’s pension reforms.

Rolling strikes and nationwide demonstrations against the move all but brought the country to its knees, as people from all walks of life decried the hike in the French age of retirement from 60 to 62, and the age for full state pension from 65 to 67. Last week, President Nicolas Sarkozy was forced to call in riot police, who used tear gas and batons to clear key fuel depots and get gas flowing to service stations—more than a quarter had run dry. Strikes shut Marseille’s docks, and left many of the southern port city’s sidewalks filled with rotting garbage. More than 300 high schools were blockaded, and streets from Paris to Nice were flooded with youth and workers carrying drums and bullhorns, chanting slogans, staging sit-ins, and singing the Internationale, the socialist anthem. Children as young as 10 demanded their government withdraw its reforms, suggesting either remarkable awareness, or some early instruction by their parents in the art of dissent.

Continue…

Athens’ budget blues

By Jane Switzer - Wednesday, September 22, 2010 at 10:00 AM - 0 Comments

Aristidis Vafeiadakis/Zuma/Keystone Press

While struggling to reduce its massive national debt, Greece discovered long-dead pensioners have been continuing to receive retirement payments. Deputy Labour Minister George Koutroumanis announced last week that with the help of police, the government discovered that 321 of the people listed as being over 100 years old, to whom it pays pensions, had died.

Koutroumanis described the situation as a “Third World phenomenon” at a news conference, and outlined the inefficiency of the system that led to the “profligacy and theft” of fraudulent pension payments every year. “One pension, for example, was paid to someone who had died in 1999,” he said, adding that authorities are now compiling a pensioner registry and will prosecute fraudsters. The country’s unreliable account-keeping is also believed to have wasted funds on fake jobs, forged health prescriptions and fraudulent government spending.

Continue…

Director-recruitment drive

By Chris Sorensen - Thursday, July 1, 2010 at 10:20 AM - 0 Comments

Max Whittaker/Reuters

It’s the investing equivalent of going to the bullpen. The $200-billion pension fund of the California Public Employees’ Retirement System, or Calpers, is recruiting a long list of executives who can be called on to serve on the boards of corporations in which the fund holds stakes.

Continue…

Searching for the Liberal Party. Day 2.

By Aaron Wherry - Saturday, March 27, 2010 at 8:30 AM - 58 Comments

Greetings from Montreal, where, for the next three days, we’ll be hanging around the Liberal party’s Canada 150 conference. Herein a running diary of the proceedings. Day 1′s diary is here.

8:29am. Good morning. Montreal is chilly and quiet. In a few moments we will be roused by the dulcet tones of David “The Dodge” Dodge, former governor of the Bank of Canada.

8:36am. For those of you scoring at home, the colour of the lights today is orange. And the subject is Families.

8:45am. This conference was apparently the most tweeted subject in Canada yesterday. The Liberals are immensely proud of this. Continue…

Mind the gap

By Aaron Wherry - Thursday, February 18, 2010 at 11:26 AM - 29 Comments

Kevin Page has released his latest report. The Globe got an early look and summarizes as so.

In a report released today, Parliamentary budget watchdog Kevin Page warns it’s not good enough for Ottawa to simply balance the books – because of the increasing squeeze Canada’s greying ranks will place on coffers.

He predicts that even if Ottawa slays the deficit, it will still have to confront an expanding “fiscal gap” in revenue over the decades ahead that rises to $20-billion to $40-billion annually within seven decades. This will arise as Canada’s work force shrinks in proportion to its growing pool of retirees, a trend that should both slow the growth of government tax revenue and increase demands for health-care spending and old-age benefits.

'Dear Minister Flaherty'

By Aaron Wherry - Tuesday, February 16, 2010 at 3:06 PM - 22 Comments

The NDP files its suggestions with the Finance Minister, including pension reform, EI reform, municipal funding, an extension to the home renovation tax credit and a repeal of planned corporate tax cuts.

In addition to job creation measures, the Government must address the looming structural deficit, as identified by Parliamentary Budget Officer Kevin Page. The deficit was caused, in part, by previous reckless reductions in corporate income tax rates. Like most Canadians, New Democrats recognize that in the long term, we cannot spend more than we collect. Yet your government has not only attempted to deny the existence of the structural deficit, it has aggravated the imbalance by reducing revenues despite the absence of any evidence that those tax savings have led to investments in jobs for Canadians. Your unbalanced corporate tax policy is exacerbating our overreliance on oil extraction, and contributing to a high dollar, which in turn hampers job creation and exports in the value-added sectors of manufacturing, forestry, aerospace and others. We propose that you announce the government will not proceed with additional cuts to the corporate tax rate in 2011 and 2012.