House prices have propelled Canadians’ net worth gains for a decade

By Erica Alini - Wednesday, February 20, 2013 at 12:56 PM - 0 Comments

BHP Billiton CEO Marius Kloppers who headed failed Potash bid to retire

By The Associated Press - Tuesday, February 19, 2013 at 9:35 PM - 0 Comments

SYDNEY – BHP Billiton chief executive Marius Kloppers, who spearheaded the unsuccessful takeover bid for Potash Corp. of Saskatchewan (TSX:POT), is stepping down from the world’s biggest miner.

Kloppers, who was also director at the Australian company, will be replaced on May 10 after six years at the helm by the company’s chief executive of its non-ferrous metals division, Andrew Mackenzie, 56.

In 2010, Kloppers was the head of BHP Billiton when it proposed a US$40-billion deal for Canada’s largest producer of potash, a mineral used in fertilizers.

The bid failed to gain the support of the Saskatchewan government, and was eventually blocked by the federal government because it did not pass a net benefit test under the Investment Canada Act based on strategic, fiscal and economic criteria.

BHP Billiton chairman Jac Nasser said Kloppers had been appointed to the role before the global financial crisis.

“Despite an exceptionally difficult environment during his tenure, Marius and his team have delivered for shareholders, significantly outperforming our peers in terms of total shareholder returns,” Nasser said in a statement.

“He drove new investments into next generation opportunities including U.S. onshore gas and liquids and created one of the most valuable companies in the world,” he added.

Mackenzie brought deep industry knowledge and global management experience to the CEO role, he said.

Mackenzie held senior positions with rival miner Rio Tinto before joining BHP Billiton in 2008.

BHP’s retirement announcement came as the company posted a 58 per cent fall in first half profit to $4.24 billion due to lower commodity prices and a weak U.S. dollar.

The company’s net profit in the six months to Dec. 31 was down from $9.94 billion in the previous corresponding period.

The result included $1.4 billion in one-off costs from asset sales.

Profit excluding one-off items was $5.7 billion in the six months through December, down 43 per cent from $9.94 billion for the December 2011 half, due to falls in iron ore and other commodity prices in 2012.

Analysts had expected a net profit excluding one-offs of $5.69 billion.

Seniors can still contribute, argues author of handbook on ‘encore careers’

By Julia McKinnell - Tuesday, January 22, 2013 at 4:30 AM - 0 Comments

photo illustration by sarah mackinnon

Who wants to play 30 years of golf anyway?

For people who have retired or been laid off, their later years can be some of the most fulfilling, especially since it’s a time when the urge to make a contribution to the world is strong, and research shows older is better in many ways.

“We become more empathetic, we get better at synthesizing ideas, making connections, solving complex problems,” writes Marci Alboher, author of The Encore Career Handbook: How to Make a Living and a Difference in the Second Half of Life. In other words, older people can be less angry and better able to deal with disappointment than their younger peers.

Alboher, 46, who was a lawyer before she switched to writing, believes that retirees are capable of making their mark well past their physical prime. As one expert in later-life achievement told her: “You may forget where you put the keys, but you may be able to settle a major labour dispute.” Continue…

Attention boomers: Why demographics threatens your retirement

By Stephen Gordon - Monday, December 3, 2012 at 12:36 PM - 0 Comments

Getty Images

One of the more worrying aspects of population aging is its effect on the prices of assets that many people are counting on to support them in retirement. For example, many Canadians may be planning to sell their house when they retire, buy a less-expensive condo and deposit the difference. The problem is that if a large wave of people retire and execute this strategy at the same time, the flood of new supply on the housing market will depress prices, thus reducing the value of the housing assets that were supposed to finance their retirements.

The run-up in housing prices over the past decade has attracted a lot of attention in this regard and led to worries that Canadian households’ balance sheets might be over-weighted on housing. But it turns out that much of the surge in the 2000s can be seen as a recovery from what was a very dismal market in the 1990s (see also this WCI post). Housing’s share of household assets did increase sharply during the 2000s, but this ratio still hasn’t recovered pre-1990 levels and remains below what it was in the 1970s. (Data are taken from Cansim Table 378-0051.)

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Most 50-somethings are likely to work after retirement

By Scaachi Koul - Monday, August 20, 2012 at 10:12 AM - 0 Comments

More than half of Canadians in their 50s plan on working after retiring well into their 60s, according to an online survey conducted by Leger Marketing for CIBC. In many cases, their choice is dictated by a need to supplement their income, according to the research.

Quebec residents were least likely to say they would work after retirement, at 47 per cent. Manitoba and Saskatchewan were more likely at 59 per cent.

The national average is 53 per cent, while 29 per cent said they weren’t sure if they would work post-retirement. Only 14 per cent they absolutely wouldn’t.

The survey also showed that nearly half of Canada’s current 50 to 59-year olds have less than $100,000 saved for retirement. Many plan on using employment income in retirement to make up for a lack of savings.

This year, OAS cost $410 million less than the government thought

By Richard Warnica - Wednesday, February 29, 2012 at 10:14 AM - 0 Comments

The federal government overestimated old age security costs by hundreds of millions of dollars last year, the third time in four years the toll for the contentious program was lower than expected. From Postmedia:

A government report tabled in the House of Commons on Tuesday shows that while the government had anticipated paying out $29 billion in OAS during this fiscal year, the actual amount was $410 million less.

The report says the difference is because there were fewer beneficiaries than expected and the average payout per person was lower than projected. In addition, more beneficiaries paid back their benefits than anticipated.

The government also overestimated in 2010-11, doling out $356 million less than the initial projection of $28 billion, and in 2008-09, when it was off by $368 million.

With most of the commentariat consumed by the ongoing Robocon scandal, the National Post‘s Andrew Coyne took a break to opine on OAS on Tuesday. Exactly what he said is a bit hard to sum up. The gist, I think, is that OAS is a problem, but not a catastrophic one, and there are a number of ways in which the government could solve it.

Spending your life savings

By Chris Sorensen - Tuesday, February 14, 2012 at 10:20 AM - 0 Comments

Rebecca Drobis/Blend Images/Corbis

With its postcard-perfect main street and abundant antique shops, Port Hope, Ont., is a popular destination for new retirees trying to escape big-city life in nearby Toronto. But while the living appears easy in this idyllic town, it turns out that many of its new residents are having a difficult time enjoying the fruits of their working years. “People have sold their $2.3-million homes in Toronto and moved into a $230,000 bungalow and are more than comfortable financially,” says Christopher Jobb, a local financial planner with Edward Jones. And yet, Jobb says that, thanks to treacherous economic times and a baby boomer mindset geared toward wealth creation, many of his clients have opted to live more like paupers than princes, forgoing long-talked-about overseas vacations and pricey golf memberships. “In this town there’s a lot of wealth, but they’re not using it because they think they’re running out.”

It’s not just a Port Hope phenomenon. A poll conducted by Ipsos Reid last year for RBC found that 74 per cent of Canadian pre-retirees (age 50 and over) planned to spend their golden years jet-setting around the globe, while only 58 per cent of actual retirees said they were doing any travelling. The same poll also found that 23 per cent of retirees were spending their retirement years “improving my knowledge about finances,” while only 12 per cent of those heading toward retirement envisioned themselves having to do the same.

Jobb blames all this on the increasingly tricky calculations people need to perform once they stop working. Where once Canadians worked until 60 or 65, collected their gold watch and then started drawing on the company pension plan, these days many retirees are expected to manage their own money. “There’s all sorts of questions you have to grapple with,” says Mark Neill, head of PH&N Investment Services in Vancouver. “When you’ve got the million bucks, you’ve got to do more planning. The math becomes much more important.” Add that to the fact that Canadians are living longer and the lingering fears over the possibility of another 2008-style financial crash, which caused millions of carefully managed retirement portfolios to go up in smoke (at least on paper), and it’s easy to see why some retirees are, in Jobb’s words, “freaked out.”

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How the government wants to trick us into saving more

By Erica Alini - Thursday, February 9, 2012 at 2:48 PM - 0 Comments

eyewash/flickr

According to how economists have long imagined us, the way we plan for retirement works somewhat like this:

• Phase one: straight out of school, we calculate how much money we’re going to need after our working days are over, and lay down a carefully thought-out savings plan;
• Phase two: as we climb the corporate ladder, we’re happily shaving larger and larger slices off our paycheques, pouring the cash into carefully selected and closely monitored investments;
• Phase three: we bid good-bye to our fellow co-workers of a lifetime and joyfully retire to freedom sixty-…. whatever.

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Back to work, grandma

By the editors - Friday, February 3, 2012 at 7:00 AM - 0 Comments

The Star Tribune/Courtney Perry/AP

What explains the mystique of age 65?

There was no particular logic at work in 1966 when Canada settled on 65 as the normal age of retirement for the Canada Pension Plan (CPP). We were simply copying the “minimum retirement age” the United States chose for itself back in 1934. Since then, the notion of 65 as the proper age at which to stop working and start enjoying oneself has come to be seen as a sacred right. It’s not. And it needs to change.

At the World Economic Forum in Davos, Switzerland, last week, Prime Minister Stephen Harper hinted at looming changes to Canada’s public retirement system. This has been widely interpreted to mean a shift in the age of eligibility for Old Age Security (OAS) from 65 to 67. It’s an entirely reasonable idea, and has been predictably met with outrage and protest.

Continuous increases in life expectancy are fundamentally altering the mathematics of retirement in Canada. When we settled on 65 as the social norm for retirement almost half a century ago, life expectancy was around 72 years. Today it is almost 81 years. And there’s no reason to believe these gains—driven by better health care technology, drugs and education—will stop. Over the past 100 years Canadians have added, on average, an extra three months to their lifespans year after year. But retirement at age 65 remains fixed.

More years of leisure and comparatively fewer for work, partly paid for by government, sounds like a great deal. Yet such a scenario is unsustainable over the long run. According to a recent article in Canadian Public Policy by McMaster University economists Frank Denton and Byron Spencer, the ratio of Canadian workers per retiree will drop from 4:1 to 2:1 over the next two decades. If retirement programs are kept at current levels, this will inevitably require a doubling of the public cost of retirement—a massive burden to place upon future generations. The obvious solution is to adjust the age of retirement.

Canada is unique among developed nations in ignoring the issue until now. Countries that have already raised or are raising their retirement age include: the U.S., France, Germany, Italy, Britain, Denmark, Australia, Belgium, Japan, Finland, Czech Republic, Hungary, Turkey . . . and on and on. It’s worth noting that the U.S. began the process of hiking its retirement age to 67 as far back as 1983.

And yet opponents are now accusing Harper of unleashing a hidden agenda on retirees. “The government has taken off the sweater vest,” remarked NDP finance critic Peter Julian. Critics point out Canada is in much better financial shape than many European countries. That may be true. But whether or not we’ve avoided the excesses of other public pension systems has no bearing on the fact that our system faces a crisis of its own due to rising life expectancies and lengthening retirements.

If Harper deserves criticism for his recent trial balloon, it should be for excessive timidity. In his Davos remarks he sought to contain potential criticism by declaring the CPP off limits: “Fortunately, the Canada Pension Plan is fully funded, actuarially sound and does not need to be changed.” In truth, the plan is fully funded only for the next few years and will soon require a major re-evaluation. Relentless increases in longevity have just as big an impact on CPP as OAS. It makes little sense to adjust the retirement age upward for one program while protecting the notion of retirement at 65 elsewhere. The social norm needs to change.

Canada’s retirement system was never designed to cover several decades of freedom from work. While it may be politically expedient to argue that Canada’s retirement system should be protected from change of any kind, there are serious consequences to the status quo. If we allow retirement to grow longer and more lucrative, we rob the economy of productive workers, put a greater burden on the next generation and inevitably threaten the viability of every other social program in the country.

Of course, any changes to the retirement age must be gradual, transparent and fair. (Certainly nothing should disadvantage the elderly poor; the near elimination of seniors’ poverty is one of the great Canadian public policy success stories of the past few decades.) Denton and Spencer propose adding three months per year to the retirement age until it reaches 70. Alternatively, Sweden indexes its normal retirement age to life expectancy tables; as the Swedish lifespan lengthens, so too does time spent at work. Regardless of the process, however, something has to give. Retirement can’t last forever.

Amid the massive media attention paid to the recent Shafia murder trial in Kingston, Ont., Maclean’s coverage stands out from the pack for our detailed investigation into the inner workings of this fatally dysfunctional family. An exhaustive 22-page report by Maclean’s award-winning Senior Writer Michael Friscolanti offers readers an in-depth look at what really went on inside the Shafia home before and after the murders, as well as providing detailed coverage of the subsequent police investigation and trial. See “ ‘A sick notion of honour’ ” beginning on page 38.

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.

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.

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.”

And that’s the kind of life it’s been

By Jonathon Gatehouse - Monday, August 29, 2011 at 11:00 AM - 2 Comments

CTV; The Toronto Star; Photo Illustration by Taylor Shute

It was two decades ago that the media first started asking Lloyd Robertson when he was finally going to retire. We’re talking 1991, the year of Bush the elder’s Iraq war, and the dissolution of the Soviet Union. Brian Mulroney was prime minister and the GST came into effect. Anita Hill, Clarence Thomas and that Coke can were a hot topic. A time so distant that a Kevin Costner movie won the Best Picture Oscar. Nirvana, then the world’s hottest band, is now played on “oldie” stations.

Robertson, CTV’s éminence orange, was just 57, but had already been anchoring the network’s national news for 15 years, and before that had been a CBC fixture for another 22. “I always thought I’d be out of there by now, that someone would come along and tap me on the shoulder and say, ‘Hey, you’re getting long in the tooth—get out,’ ” he told the Montreal Gazette. Absent the push, the trick, said the anchor, was to “pick a time that’s obvious to you and your audience.” He mused about the big 6-0. It’s possible that some people even believed him.

Should all go according to plan, Robertson will actually step down this Sept. 1. Now 77, and with a combined 41 years behind the anchor’s desk at CBC and CTV, he is the longest-serving national anchor in North American TV history. Not exactly a retirement, since Robertson plans to continue on in his other job co-hosting the current affairs show W5, and will appear for some special event coverage. But it brings an end to his nightly television presence, and an era in Canadian broadcasting.

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Good news, bad news: May 5-12, 2011

By macleans.ca - Friday, May 13, 2011 at 11:10 AM - 0 Comments

Good news

Frederick Breedon/Getty Images

Some justice at last

It’s been over three years since Robert Dziekanski died at the Vancouver airport after RCMP used Tasers to subdue him. Now B.C.’s attorney general has laid perjury charges against the four officers involved for allegedly giving misleading testimony during the exhaustive Braidwood inquiry. While some, including Dziekanski’s mother, Zofia Cisowski, are disappointed the charges don’t relate to the tasering itself, Cisowski still applauded the move. The wheels of the law may be slow, but they do keep moving, and in this sad case the charges offer at least some measure of justice.

Harnessing hot air

Energy sources such as wind and solar could provide 80 per cent of the world’s power supply within four decades if governments provide the cash and policies to make it happen. That is the landmark conclusion of a UN panel that says it’s not too late to reduce greenhouse gas emissions to a “safe” level. In the meantime, farmers are enjoying the heat. According to separate research, Canadian crops have been largely spared from the scourge of climate change—and our historically hard-luck farmers are profiting from increased demand.

Prize catch

When the Norwegian Nobel Committee awarded this year’s Peace Prize to imprisoned Chinese dissident Liu Xiaobo, it was a blow to China’s human rights record. But the big winner may be Scottish fish farmers. In a fit of pique, China has stopped buying salmon from Norway—its biggest supplier—and signed a deal with Scotland. Perhaps that contributed to the unprecedented majority won by Alex Salmond’s Scottish National Party in the May 5 elections. Good news for nationalist politicians, not so much for fish.

It’s all relative

A NASA study has confirmed two of the “most profound predictions” about Albert Einstein’s general theory of relativity: that space and time are both warped and pulled by Earth’s gravity. Astrophysicists say the results, based on data measured by an orbiting space probe, will have implications “beyond our planet.” In other physics news: engineers have developed a golf ball that won’t slice. Now there’s a breakthrough we can relate to.

Bad news

Parivartan Sharma/Reuters

Revolution relapse

In the post-Mubarak era, Egypt is transitioning, but to what? Christians and Muslims clashed in Cairo, leaving 12 dead and two churches in smoldering ruins, amid signs Islamist hard-liners are asserting their power. At the same time, Syria continued its crackdown against anti-government protesters, killing scores of people and injuring hundreds, while in Libya, forces loyal to Moammar Gadhafi hammered rebels. Clearly the fight is far from over for the pro-democracy movement across the Middle East.

Retirement blues

Tens of thousands more baby boomers will face retirement without a company pension plan, Statistics Canada reported this week. Since the recession, membership in private sector plans has fallen below that of the public sector for the first time ever. Which is why Canadians should be cheering the Canada Pension Plan’s tripling of its 2009 investment in Internet-calling-company Skype, recently purchased by Microsoft for US$8.5 billion. Unless you work for the civil service or at a university, the CPP may be all the help you will get.

Red carded

Lord Triesman, the chair of England’s failed bid for the 2018 World Cup of soccer, is alleging at least four FIFA members demanded bribes for their votes, including a knighthood for Paraguay’s representative. Trinidad’s football head wanted $2.5 million cash for an “educational centre.” London’s Sunday Times reports two West African delegates were paid $1.5 million to support Qatar’s winning bid. And in France, the national team is embroiled in scandal after it emerged officials considered quotas to limit the number of African and Arab-born players on their development squads. The ugly side to the beautiful game.

Unholy bonds

A good marriage isn’t necessarily built on love or even physical attraction, suggests new research in the Journal of Politics. Among the strongest shared traits between U.S. spouses is their political attitudes, the study found. The political bond forms early in marriages, but it’s not always enough to keep them together. Just ask political power-couple Arnold Schwarzenegger and Maria Shriver, who separated this week.

Retirement 6/49

By Anne Kingston - Tuesday, March 8, 2011 at 10:00 AM - 8 Comments

Photograph by Jessica Darmanin

You don’t need to be a financial wizard to realize that expecting the lottery to finance your retirement is even more futile than expecting the Leafs to win the Stanley Cup. So why are Canadians doing it? According to a recent Harris/Decima poll for Scotiabank, five per cent of Canadians looked to a lottery windfall for their “Freedom 55″—one per cent more than those who said their children would help them out. A poll of Canadians aged 45 to 64 conducted by Environics Research for TD Waterhouse was even more mind-boggling: 32 per cent said they expected a lottery win to support them post-retirement—versus 34 per cent who said they had retirement savings plans with actual dollars in them.

Polls are an inexact science. But these two do reflect just how far lotteries have insinuated themselves into Canadians’ financial expectations since Quebec launched the country’s first provincial lottery in 1970. The 1982 roll-out of Lotto 6/49 with its “Just imagine” slogan made the lottery a national pipe dream; the 2009 arrival of the $50-million jackpot Lotto Max, which admonishes Canadians to “Live your dreams to the max!” serves to further stoke the frenzy.

Playing the lottery is the country’s most popular form of gambling, contributing some $8 billion in annual revenues to the five regional lottery associations. Not that lotteries are marketed as high-stakes gambling: they’re wholesome fun to be celebrated by a “happy dance,” an “instant thrill for a dollar,” the route to “freedom” on a sandy beach or sailboat, and an opportunity to realize “dreams” while helping to fund amateur athletics and other noble social programs.

More than half of Canadians play the lotto regularly, buying a ticket at least once every two months with plans to buy again. They’re so entrenched, financial institutions are referencing them in their marketing, even creating savings products with a lottery component.

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Flaherty unveils pooled pension plan

By macleans.ca - Thursday, December 16, 2010 at 2:38 PM - 7 Comments

Federal Finance Minister Jim Flaherty has pitched a private pension plan that he hopes will encourage more small-business people and self-employed Canadians to save. “This plan would say to an employer, ‘Listen, you can offer this plan but you don’t have to contribute to it.’ Employees would contribute to it, or can opt out,” explained Flaherty. “It would make a nice, easy and relatively painless way for people to contribute to their retirement.” The plan would be built on defined contributions and would be run by private financial institutions. The idea is to keep costs down by pooling money from the large number of small business people and self-employed workers who currently aren’t saving or are using smaller plans. Liberal critic Judy Sgro called the plan “a baby step,” adding “it’s not going to do much for [many] self-employed, for women that are in and out of the work force, for those in rural Canada.”

CBC News

Sarko's new globetrotter

By Josh Dehaas - Thursday, December 2, 2010 at 1:40 PM - 0 Comments

Lionel Bonaventure/AFP/Getty Images

With the masterpiece of Nicolas Sarkozy’s domestic policy (raising the retirement age from 60 to 62) safely hung on the wall, the French president has signalled that he will refocus his efforts on the global stage, an always popular move in a country that has seen its influence decline over the past century. While Sarkozy is busy selling the G20 nations on global currency plans or trying to impress Russia, he needs someone to manage the rest of the foreign file with the precision of a TGV conductor. That’s why he fired Bernard Kouchner, the left-wing foreign minister with whom he has often butted heads, and replaced him with former justice minister and one-time leadership rival Michèle Alliot-Marie.

The choice is a strong signal that Sarkozy’s Union for a Popular Movement (UMP) party is going back to its conservative roots, says Thomas Klau, the head analyst at the European Council on Foreign Relations in Paris. Alliot-Marie, known as “MAM” for her schoolmarm fashion sense, possesses the “safe hands” Sarkozy needs as he packs his suitcase and prepares to impress the world ahead of 2012’s national elections, says Klau.

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Hanging up the gloves

By Paul Wells - Thursday, December 2, 2010 at 9:00 AM - 48 Comments

Williams announced his retirement in St. John’s; Williams and Harper clashed regularly over the years | Paul Daly/Andrew Vaughan/CP

When his time came to bid the people of Newfoundland and Labrador farewell as their ninth premier, Danny Williams stood in the lobby of the Confederation Building in St. John’s and rattled off the very long list of things he has accomplished for “this bloody awesome province.”

It was a tale of renewed prosperity, fuelled by resource wealth and capped only a week earlier by a $6.2-billion hydro deal for the Lower Churchill River. “If you stand outside and breathe in the air you know you are breathing in the smell of success—the success of us being a ‘have’ province,” he said.

But somewhere in the middle of that river of thanks and congratulations for himself and his collaborators, the 60-year-old Progressive Conservative mentioned another speech, very different in tone, that he delivered three weeks earlier. That speech, at the annual Premier’s Dinner fundraiser, was designed to get some darker stuff off his chest before the upbeat farewell, he said. This suggests the two addresses were conceived, and should be considered, as a package. The yin and yang of the most successful provincial politician of his era.

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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.

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Early retirement is good for you, study shows

By macleans.ca - Thursday, November 25, 2010 at 2:17 PM - 5 Comments

In a study of over 14,000 employees who work for France’s national grid, researchers found that giving up work at 55 cuts stress and fatigue, boosting mental health, although the study found no benefit in terms of physical health. Other research, though, has suggested retirement can actually be detrimental to health, the BBC reports: a year ago, a study found that those who stop working completely once they hit retirement age are at higher risk of heart attacks, cancer and other major diseases than those who do part-time work. In the new study, researchers found that in the year before retirement, one-quarter of workers showed depressive symptoms, and around one in 10 had a known medical condition (like diabetes or heart disease). After retirement there was a drop in mental and physical fatigue, and a smaller drop in depressive symptoms.

BBC News

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.”

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France isn't the only country that needs to get real

By macleans.ca - Thursday, November 4, 2010 at 10:00 AM - 0 Comments

MAXPPP/HUGUES LEGLISE BATAILLE/KEYSTONE PRESS

France’s penchant for public displays of political discontent is frequently at odds with the basic tenets of economics and logic. Alexis de Tocqueville, the famous 19th-century French writer, noted as much during the Paris Commune unrest of 1848 when he observed that French rioters understood quite a bit about politics but very little about the economy. Over a century and a half later, not much has changed.

Energetic protests against plans by the government of President Nicolas Sarkozy to reform the French retirement system have cut national fuel supplies, stopped trains and roiled the nation. But despite all this furious protesting, the motivation behind it requires a deliberate blindness to economic reality.

The current minimum age for retirement in France is 60, and a full public pension is available at 65. Today, there are approximately four people of working age for every person in France receiving public benefits. Without changes, the ratio will drop to 2:1 by 2050. A falling birth rate and lengthening life expectancy are to blame for this demographic crunch, along with a lowering of the retirement age from 65 to 60 in 1983 by the socialist government of François Mitterrand. It’s one of the lowest retirement ages in the developed world. The pay-as-you-go public pension plan is forecast to run a $45-billion deficit this year.

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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.

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