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.

Harper finally takes some risks

By John Geddes - Monday, February 6, 2012 at 10:50 AM - 0 Comments

Chris Wattie/Reuters

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.

Continue…

‘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…

‘You cannot trust these wolves’

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.

Harper and pensions: the choices you make

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…

Scary stories

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.

The upside of delayed retirement

By Angelina Chapin - Tuesday, January 31, 2012 at 10:40 AM - 0 Comments

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.

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.

The Commons: Having it both ways

By Aaron Wherry - Monday, January 30, 2012 at 6:28 PM - 0 Comments

The Scene. For the benefit of the House, Nycole Turmel relayed what she’d taken from what the Prime Minister said last week when he was some 6,264 kilometres from here.

“Mr. Speaker, Canadians are bracing themselves for the deepest round of cuts since Paul Martin, cuts to services Canadians need, like the OAS and EI,” she offered.

Members of the government side audibly whined at this reference to the previous prime minister.

“These cuts will hurt people, hurt seniors, hurt jobs and hurt our communities,” Ms. Turmel continued. “When will the Prime Minister tell Canadians the bad news, on his next trip to Switzerland or somewhere else in the world?”

Last week, so far away from this place, the Prime Minister had been full of dramatic phrasing. “Major transformations,” he said. Demographics posed a “threat” to that which we “cherished.” The deep holes of Europe and the United States threatened to grow deeper. The very future of our society hung in the proverbial balance. Continue…

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.

Back to business

By Aaron Wherry - Monday, January 30, 2012 at 9:30 AM - 0 Comments

The House of Commons reconvenes this morning at 11am. First to be debated is John Carmichael’s bill on displaying the Canadian flag and an hour later the House will move to the government’s legislation on pooled pension plans.

Third reading of the government’s bill to eliminate the long-gun registry was apparently scheduled to take place today, but the government has apparently opted to put that off.

Future old people take note

By Aaron Wherry - Friday, January 27, 2012 at 4:59 PM - 0 Comments

The Harper government explains how its supporters and spokespeople should be explaining potential changes to Old Age Security.

To be clear: there will be no changes to the benefits seniors currently receive. We will ensure any changes are done with substantial notice and adjustment period and in a way that does not affect current retirees or those close to retirement, and gives others plenty of time to adjust and plan for their retirement.

CBC has an interview with Ted Menzies. NDP finance critic Peter Julian says asking people to work until they are 67 years old before receiving OAS is “completely unacceptable.” The Liberals are promising a fight. And they’d like you to sign a petition.

‘To seize and to master our future’

By Aaron Wherry - Thursday, January 26, 2012 at 2:39 PM - 0 Comments

The prepared text of the Prime Minister’s remarks in Davos today.

“Thank you Professor Schwab for that kind introduction, I also want to thank you particularly for the invitation to speak here that you extended to me earlier this year.  But more than that, Professor, you have made the World Economic Forum an indispensable part of the global conversation among leaders in politics, business, and civil society.  And in the face of continuing global economic instability, the opportunity this gathering provides is now more valuable than ever.  So I know everyone here joins me in thanking you for, in service of the common good, your vision and your leadership.

“My Greetings to Ambassador Santi; to the Governor General of the Bank of Canada, known internationally as Chair of the Financial Stability Board, Mark Carney; to our hard-working Minister of International Trade, Ed Fast; and to the best finance minister on the planet, Jim Flaherty.  And let me just say that I’m especially proud to see so many outstanding Canadian business leaders making their presence felt here in Davos.

“Ladies and gentlemen, I will use my time today to highlight Canada’s economic strengths and to frame the choices we face as we work to secure long-term prosperity for our citizens in a difficult global environment that is likely to remain so.

Continue…

Topp on families, health care and pensions

By Aaron Wherry - Thursday, January 26, 2012 at 12:19 PM - 0 Comments

Brian Topp has released his sixth policy paper, this one on supporting families. He’s proposing a national child nutrition program, a renewed health accord, a national pharmacare plan, a reversal of the moratorium on family reunification, a doubled Canada Pension Plan and support for LGBTTQ families.

Mr. Topp has also picked up the endorsements of his wife and two sons.

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.

If demographics is destiny, the future looks relaxing

By From the editors - Thursday, July 28, 2011 at 2:00 PM - 6 Comments

David J. Green/Alamy/Getstock

There may be a silver lining to Canada’s looming grey wave.

An aging population, we’ve been warned repeatedly, threatens to put unprecedented pressure on our health care and pension systems. This tidal wave of baby boomers will inevitably swamp existing social programs, steal funding away from education and child care and dominate all levels of politics for decades to come, say the doomsters.

Now for the good news: whatever impact demographic destiny may have on public policy, it seems set to produce a country that’s as cool and calm as a cucumber, and with plenty of time for fun. Suddenly the future is looking…relaxed.

Last week Statistics Canada released an intriguing, if under-reported, study on how Canadians spend their time. The report is part of StatsCan’s General Social Survey, an ambitious undertaking that involves 15,000 Canadians filling out daily diaries. Evidence from last year was compared with similar answers from 1998; the results suggest a dramatic decline in the amount of tension in our lives.

Continue…

Policy alert

By Aaron Wherry - Monday, April 4, 2011 at 5:16 PM - 0 Comments

Jack Layton promises pension reform.

To remedy this issue, Layton said an elected NDP government would immediately work with the provinces to double CPP and QPP benefits. But he would allow Canadians to “prop up” their CPP savings with their personal income … The NDP believes that doubling CPP and QPP benefits could require a 2.5 per cent increase in payroll deductions. Layton also pledged to add $700 million to the Guaranteed Income Supplement (GIS) to help out seniors in the lowest income brackets.

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.