By Aaron Wherry - Tuesday, December 18, 2012 - 0 Comments
Recent reviews of the Canadian retirement income system by Jack Mintz and Bob Baldwinhave concluded that the public system already in place does well in ensuring sufficient retirement income for those in the bottom two-fifths of the population. Research by Statistics Canada indicates that more than two-thirds of lower-earning Canadians have more income in retirement than they did at age 50. The pension problem, such that it is, can be found among those in the top three-fifths of the population who do not receive benefits from an employer-sponsored pension plan.
The CPP affects almost everybody. The pension problem identified by these recent pension reviews is one that affects middle-to-high earners without a workplace pension. This presents a fairly obvious mismatch. Is a bigger CPP really the solution for high earners who aren’t saving enough? Should we invest a lot of public policy effort to ensure that high earners can spend their retirement days in Florence instead of Florida? I still need to be convinced that a more targeted solution wouldn’t be more appropriate.
Milligan reviews some of the proposals, including the last Liberal campaign proposal of a “secure retirement option” and Thomas Mulcair’s proposal of a pension exchange. Mr. Mulcair’s leadership website seems to have mostly disappeared, but his policy paper on retirement security is preserved for posterity here.
By Aaron Wherry - Friday, December 14, 2012 at 3:44 PM - 0 Comments
The Globe reports that CPP changes are being considered.
The Globe and Mail has learned that a policy paper on CPP reform prepared by federal and provincial public servants will be presented to the ministers during their yearly December gathering for two days of meetings, which will be held this year at Meech Lake. Not enough Canadians are taking advantage of existing voluntary options such as RRSPs, say supporters of CPP expansion, including the seniors’ lobby group CARP…
Mr. Flaherty had initially supported some form of CPP increase, but he surprised and upset some provinces in December, 2010, by reversing that support. He argued at the time that not enough provinces were on board and it was a bad time economically to increase premiums. A federal source said Ottawa’s position has not changed.
By Aaron Wherry - Friday, October 19, 2012 at 12:05 PM - 0 Comments
The Conservatives and the opposition parties unanimously agreed this morning to split MP pension reforms from the omnibus budget bill and pass the separate legislation.
Here is the text of the motion, moved by Conservative MP Lynne Yelich, that split C-45.
That the House recognize that the provisions of Bill C-45 dealing with Members’ pensions should be enacted as quickly as possible, and passed without further debate;
That Bill C-45, A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures, be divided into two bills: Bill C-45, A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures, and Bill C-46, An Act to amend the Members of Parliament Retiring Allowances Act; and
That Bill C-46 be composed of
(a) clauses 475 to 514 of Bill C-45, as it is presently composed,
(b) a clause, inserted before all of the other clauses, to provide that “This Act may be cited as the Pension Reform Act”, and
(c) a clause, inserted after all of the other clauses, to provide that “This Act comes into force, or is deemed to have come into force, on January 1, 2013.”;
That Bill C-46 be deemed to have been read the second time and deemed referred to a Committee of the Whole, deemed reported without amendment, deemed concurred in at report stage and deemed read the third time and passed;
That Bill C-45 be composed of its remaining clauses;
That Bill C-45 retain the status on the Order Paper that it had prior to the adoption of this Order;
That the Law Clerk and Parliamentary Counsel be authorized to make any technical changes or corrections as may be necessary; and
That Bills C-45 and C-46 be reprinted.
By Aaron Wherry - Thursday, September 20, 2012 at 4:25 PM - 0 Comments
Again this afternoon, the Liberals asked the Conservatives to table a separate bill to deal with MP pensions. The Conservatives don’t seem interested.
Marc Garneau: Mr. Speaker, yesterday I asked the government for a separate bill on MP pension reform so that Canadians could see how their MPs support this very important bill in a stand-alone fashion. I did not get an answer. Is the Prime Minister worried about a backlash from his own backbench members if he does not force this down their throats as part of a single budget bill? I have a proposition for him. How about a separate stand-alone bill, and the Liberals will co-operate in fast-tracking it? This is the kind of thing Canadians expect: transparency from their government.
Tony Clement: Mr. Speaker, we will not have a separate stand-alone bill when it comes to MP pensions or salaries. We will have a budget implementation bill that is focused on jobs, the economy and economic growth in this country, as we indicated previously. I am not surprised that the Liberals and the NDP on the other side have already voiced their opposition to this bill without even seeing it. That is how they operate. However, we are focused on jobs and economic growth for this country and we will continue to be so.
By The Canadian Press - Wednesday, August 22, 2012 at 10:39 AM - 0 Comments
TORONTO – A review of 451 defined-benefit pension plans in Canada and the United States by debt rating agency DBRS has found the gap between plan assets and obligations widened significantly last year.
DBRS says several factors have contributed to the revised outlook, including continuing low interest rates.
The review found the combined funding deficit at the 451 defined-benefit plans ballooned to an unprecedented $389 billion in 2011.
DBRS said that more than two-thirds of the defined benefit plans it reviewed this past year were underfunded by “a significant margin.”
Under defined benefit plans, employees generally make set contributions and are guaranteed a specific monthly retirement income. Any shortfall in the ability of the plan to make those payments is usually the employer’s responsibility, although there have been cases where the cost threatens the business.
By Aaron Wherry - Thursday, March 29, 2012 at 8:30 AM - 0 Comments
Yesterday, the Canadian Press pegged the cuts at $7 billion. Last night, the CBC reported the total will be closer to $4 billion. The Post says it’ll be around $5 billion, with the elimination of approximately 25,000 public service jobs. MP and public servant pensions will be changed. The House of Commons will trim its budget by 6.9%. And the hiring tax credit for small businesses will be extended for another year.
Bu the Senate is already in open revolt over the closing of a cafeteria in the Victoria Building.
So, members of the Red Chamber will have to take a slight detour, without having to put on their coats or boots, to get to the cafeteria. Moments later came this reply from Senator Don Plett, the Manitoban and former Conservative Party president appointed to the senate by Prime Minister Stephen Harper: “What a bad, bad idea. The Victoria cafeteria was for the Senators and staff.”
By Aaron Wherry - Wednesday, February 22, 2012 at 10:30 AM - 0 Comments
Here is the final third of the prepared text for her remarks, with all the usual caveats about checking against delivery (a full video of the speech hasn’t yet appeared online). Continue…
By Aaron Wherry - Friday, February 10, 2012 at 3:37 PM - 0 Comments
Jim Flaherty offers another clue in the OAS mystery.
“The timing of what we do will involve more than one budget and we will – we will announce some steps forward, but we certainly need to plan ahead,” he said. “And this is not for tomorrow morning. This is for 2020, 2025 so that people who are middle-age and younger today, like Colin – not me – can be assured that they will have these social programs properly funded, fiscally responsible, that they’ll be there for them in the future.”
By Aaron Wherry - Friday, February 10, 2012 at 11:13 AM - 0 Comments
A sampling of the questions the NDP piled up on Old Age Security over the last two days.
Is the government planning to raise the OAS eligibility to 67, yes or no? Can the minister tell us whether or not the government will increase the retirement age from 65 to 67? Yes or no? Will the government increase the retirement age from 65 to 67 or not? Yes or no? Does this government plan to raise the retirement age from 65 to 67? Yes or no? If the government is going to raise the OAS from 65 to 67, we want to know, yes or no? Rather than causing people anxiety, will the Conservatives finally answer our question? Will they or will they not increase the retirement age? Will the Conservatives stop trying to scare people by pretending OAS is unsustainable and agree to leave OAS alone, yes or no? Will the Conservatives give us a straight answer? Will the retirement age be increased from 65 to 67? Why not tell us clearly whether the Conservative government intends to increase the retirement age from 65 to 67?
The Liberals, meanwhile, have released audio of Stephen Harper promising in 2005 to “fully preserve the Old Age Security, the Guaranteed Income Supplement and the Canada Pension Plan, and all projected future increases to these programs.”
By Aaron Wherry - Friday, February 10, 2012 at 10:54 AM - 0 Comments
Protesters occupied the offices of Conservative MPs in Whitby, Orangeville, Nipissing, Cornwall, Brantford, Brampton, Cambridge and Thunder Bay. Conservative MP Jay Aspin took the opportunity to call for the dismissal of the Parliamentary Budget Officer.
Aspin also attacked the credibility of Parliamentary Budget Officer Kevin Page, who has said public pensions “are both sound and fiscally sustainable, even in light of the coming retirement of the Baby Boom generation.” Aspin said Page “has absolutely no credibility at all,” and he has “released study after study with no facts, no truth to them. “This guy has got to go,” Aspin said. “It’s too bad he’s in the position he’s in.”
By Aaron Wherry - Wednesday, February 8, 2012 at 12:22 PM - 0 Comments
The Parliamentary Budget Officer suggests Old Age Security is sustainable in the long term (full report here). Meanwhile, the NDP busts the Conservatives for being against raising the retirement age before they were considering being for it.
In the thick of the 2004 election campaign, Stephen Harper’s Conservative Party sent out a “REALITY CHECK” titled: Paul Martin’s hidden seniors agenda. Conservatives claimed that Liberals were hiding a plan to raise the retirement age to 67 for Old Age Security (OAS). They ridiculed the idea of raising the eligibility age for OAS because “Canadians would have to work two years longer only to receive less from their public pension.” …
In 2004, Conservative were ready to stand up for seniors. On Friday, Stephen Harper was asked about the possibility of raising the eligibility age by two years and replied “Absolutely, it’s being considered.” This government was elected on the promise that they would change Ottawa. They’ve become everything they used to oppose.
By Aaron Wherry - Tuesday, February 7, 2012 at 1:33 PM - 0 Comments
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.
By John Geddes - Monday, February 6, 2012 at 10:50 AM - 0 Comments
The PM could be looking for trouble—especially on pensions
Among Stephen Harper’s defining political traits, his standout skill has long been a knack for presenting himself as a pragmatist who would never overreach. In opposition, Harper succeeded in softening the image of his restored Conservative party to squelch fears he might be cooking up a sweeping right-wing overhaul of the federal government. He won the 2006 election with a platform of narrowly defined policies, like trimming the GST and paying parents a monthly $100-per-kid bonus. As a minority Prime Minister, he had to draft policies unthreatening enough to attract sufficient opposition votes to pass. But now, as he begins his first full calendar year with a House majority, Harper’s customary caution has evaporated. “In the months to come,” he declared in Davos, Switzerland, last week, “our government will undertake major transformations to position Canada for growth over the next generation.”
Major transformations? Plural? And this from a Prime Minister who, only days earlier, had sounded much his old self, pleading for a “practical, incremental” approach, rather than bold measures, for First Nations. It was a different Harper at the World Economic Forum, touting decisive fixes on daunting issues. He zeroed in on at least four big files, though offering frustratingly few details. On pensions, he vowed to make underfunded parts of the system sustainable “for the next generation.” On immigration, he promised “significant reform” to match newcomers to labour force needs. On exports, he pledged both to finalize new trade deals and to end regulatory delays on oil and mining ventures. On industry, he committed his government to finally tackling the perennial problem of lagging Canadian business innovation.
This ambitious agenda was scarcely hinted at in the Prime Minister’s re-election platform just last spring. Looking over his Davos list, it’s not hard to see why Conservative strategists might have deemed some of these ideas too risky for the campaign trail. Sure enough, soon after Harper’s speech, the formidable Canadian Association of Retired Persons served notice of its intention to fight any future curtailing of the Old Age Security or Guaranteed Income Supplement programs, even though the Tories stressed the coming cuts won’t affect seniors already collecting benefits. Harper’s plan to streamline environmental assessments for pipelines and other resource megaprojects is also bound to meet with angry opposition, and shifting the emphasis on immigration to workers with more in-demand skills also risks raising concerns among some of the Tories’ hard-won ethnic community supporters.
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.
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.
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.
By Aaron Wherry - Thursday, February 2, 2012 at 8:30 AM - 0 Comments
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…
By Aaron Wherry - Wednesday, February 1, 2012 at 5:52 PM - 0 Comments
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…
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…
By Aaron Wherry - Tuesday, January 31, 2012 at 6:33 PM - 0 Comments
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.’ ”
By Aaron Wherry - Tuesday, January 31, 2012 at 2:05 PM - 0 Comments
After deigning to tolerate a day of discussion yesterday on its pooled pension legislation, the government side voted this morning to put a limit on debate. They did not though move quite fast enough to deny Bob Rae the opportunity to do as he does.
By Paul Wells - Tuesday, January 31, 2012 at 1:36 PM - 0 Comments
“There are tough, important choices that must be made,” Stephen Harper wrote to his caucus 16 days ago. All righty then. Let’s talk about choices and Old Age Security. One thing I’m going to resist doing is handing out white hats and black hats. There are fewer heroes and villains in this story than, well, choices.
Here (.pdf) is the Ninth Actuarial Report on the Old Age Security Program As At 31 December 2009, tabled before Parliament three months ago. The government says it took a look at that report and had a fright. “Demographic changes will have a major impact on the ratio of workers to retirees,” it says, with the result that “Total annual expenditures are projected to increase… from $36.5 billion in 2010 to… $108 billion by 2030.”
Out went the talking points. The cost of the program will triple! Something must be done! They were more reticent about the next paragraph, which says cost of the program as a fraction of GDP is projected to rise from 2.3% in 2010 to 3.1% in 2030, before declining after that. So 2030 will indeed be a high-water mark in the entire history of the OAS program’s cost, but it’s not really a tripling because everything, including our ability to pay, will have increased in the meantime.
Still, big bump up. Point taken. But then there’s this. Here’s (.pdf) the Second Actuarial Report on the Old Age Security Program As At 31 December 1991, tabled in Parliament on Feb. 7, 1994 — about the time a 34-year-old rookie Reform MP named Stephen Harper would have been getting used to his new job. That report said the total annual cost of OAS would grow from $34 billion in 2010 (it’s in the chart on page 4) to $119 billion in 2030. An even bigger increase than the one projected by the most recent report, but pretty much the same scale. And indeed, on Page 3, that actuary 19 years ago picked 2030 as the peak date for the cost of the OAS program.
Demographics doesn’t change radically from year to year. So anyone reading the 2nd, 3rd, 4th, 5th, 6th, 7th or 8th Actuarial Reports on the Old Age Security Program would have seen the same trend lines that the government says spurred it to action now. Never mind last May’s election — this could have been an issue in any of the last six federal elections. (As we’ll see, and as many of you already know, it sort of was, once early on.) There quite literally could not possibly have been more warning.
So that’s one thing.
Then there’s this. Continue…
By Aaron Wherry - Tuesday, January 31, 2012 at 11:25 AM - 0 Comments
The government sent up Joyce Bateman during QP yesterday to lament that the NDP wanted to expand the Canada Pension Plan. Specifically, the NDP’s plan in the last election was to gradually double CPP over a period of seven years.
Finance Minister Jim Flaherty was not present to hear this, which is perhaps just as well, seeing as how Mr. Flaherty also used to support an expansion of CPP. And, as David Akin notes, Mr. Flaherty also just allowed an increase in those dreaded payroll taxes.
By Angelina Chapin - Tuesday, January 31, 2012 at 10:40 AM - 0 Comments
Freedom 85, anyone?
It was after a series of four 20-hour days that Barbara Bergen decided to switch careers. She was producing a TV commercial in Alberta’s Rocky Mountains that required early morning and late afternoon light, leaving a short window in the middle of the day for trying to nap at the hotel. Her cellphone buzzed incessantly with more to do. When it was over, she did a face plant into her bed and didn’t get up for two days. “At 52, I woke up and smelled the coffee,” says Bergen from her new home in Nelson, B.C. “At 53, I made the change.”
If that seems late in the game to be switching careers, consider this: according to Statistics Canada, 34 per cent of Canadians 55 and older were employed in 2010, compared to just 22 per cent in 1996. The road to retirement is paved with, well, more years, and making it toward the end often requires a mid-life job change. For Bergen, who had worked in the film business for 26 years, it meant something less physically demanding: she began an online business in 2007, selling urns that she designs and manufactures. “I needed something I could do well into my old age,” she says, “and thought this would be relatively bulletproof.” Then, in 2008, after already losing money in a divorce the previous year, her RRSPs were hammered by the stock market crash. She was left with a quarter of her savings.
Bergen, now 58, is an example of two key problems Canadians are facing when it comes to retirement: we are living longer and it’s harder to save. According to the Public Health Agency, by 2026 one in five Canadians will be 65 or older (in 2001, it was one in eight). Life expectancy has increased to 79 years for men and 84 for women. But with age comes responsibility, and two-thirds of pre-retirees responded to a 2011 MetLife Retirement Income IQ survey saying the odds of living longer is their number one financial risk. In a poll by the Canadian Payroll Association, 40 per cent said they were planning on late retirement due to a lack of savings. “Freedom 55 is a miss,” says Diane McCurdy of Vancouver-based McCurdy Financial Planning Inc., “and Freedom 60 is vanishing.” According to Bergen, “it’s Freedom 85” or bust. And if you’re part of Gen Y or younger, it’s not unimaginable living—maybe even working—until you’re 100.
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.”