Murray Rankin is the Member of Parliament for Victoria and the NDP national revenue critic.
Last week Minister of State for Finance Kevin Sorenson announced, with great fanfare, a new scheme that was quickly understood by most to be yet another Conservative pensions failure.
Instead of working to ensure that all Canadians will be able to retire in dignity, Conservatives continue to mismanage one of the most pressing economic issues facing Canada today, retirement security. While the NDP campaigns to grow the Canada/Quebec Pension Plans and phase in an increase to basic CPP/QPP benefits, last week’s Conservative proposal would potentially open the door for employers in the federally regulated sector and crown corporations to transform secure, defined benefit into much riskier and unpredictable target benefit plans.
Mr. Sorenson attempted to put a positive spin on this attack on workers’ pensions plans, but he couldn’t hide from the reality that this scheme would put previously secure pensions at risk, potentially even for those already in retirement. Under Mr. Sorenson’s plan, a company would not necessarily have to make up the shortfall if its pension plan ran into trouble, as is currently required under Canadian law. If implemented, the plan would leave workers’ pensions far less secure.
Of course, this is not the first time the Minister of State for Finance has tried to gloss over Conservative failures when it comes to retirement security.
In December, Conservatives were forced to explain why they were blocking the expansion of the Canada and Quebec pension plans, during House debates on an NDP motion and in the media.
Provinces were calling for an increase to the CPP/QPP. Expert opinions from across the political spectrum were reaching the same conclusion: boosting CPP/QPP benefits is by far the best way to tackle the looming retirement security crisis in Canada.
At the time, Mr. Sorenson falsely claimed that the Department of Finance had warned that the NDP plan to increase the CPP/QPP would kill jobs across Canada. However, recently released Access to Information documents reveal that the finance department actually concluded that expanding the CPP/QPP would bring long-term economic benefits and higher income for seniors.
It is staggering that the Conservatives continue defending their myopic and short-sighted decision to block CPP/QPP growth while a the chorus of voices calling for expansion grows steadily – yet here they are, fudging the numbers and attacking secure pension plans.
David Dodge, the former governor of the Bank of Canada and deputy finance minister, recently co-authored a report that concluded: “An increase in future CPP pensions financed by an increase in actuarially appropriate CPP premiums starting in the near future would be an efficient measure to increase household saving and to provide for higher retirement incomes.”
Meanwhile, our country stands on the brink of a retirement security crisis. According to CIBC, 5.8 million Canadians, nearly a third of our workforce, are facing a steep decline in their standard of living by retirement. For young people and women, the numbers are even worse.
There’s a remarkable consensus among financial and retirement security experts that CPP is now the best way for Canadians to save. One recent survey even found that over half of all employers would be willing to pay more into CPP if it means better retirement security for their employees.
Ontario is so frustrated with this Conservative government’s inaction on retirement security that it is developing its own public pensions plan. Instead of moving forward with a national approach to address the looming Canadian retirement security crisis, Conservatives are depriving Canadians in all provinces of the best solution.
The economic realities of our dramatically aging population cannot be ignored any longer.
Canadians are not saving enough for their retirement, and the broader economic implications of that reality demand that we act urgently. It is clear that if we do not act to secure pensions, the very stability of Canada’s economic future is at risk.
New Democrats will keep leading the fight to protect Canadians’ pensions, and to give Canadians a better way to save.
The time to act is now, for the sake of our shared economic future.