CARP submitted our annual budget recommendations to the House of Commons Standing Committee on Finance on August 8rd, 2013. CARP is recommending that the federal government help older Canadians achieve financial security through comprehensive pension reform, better investor protection, and by ensuring the rights of older workers. Below is a copy of the submission document and an executive summary of CARP’s recommendations.
Financial insecurity is a growing concern for older Canadians. Inadequate retirement savings, precarious employment, and poor investor protection combine to render too many older Canadians financially vulnerable to even minor economic shocks and unable to prepare for retirement. Nearly 6% of seniors still live in poverty, amounting to almost 300,000 people. One in six single seniors, most of whom are women, lives in poverty. Almost 12 million working Canadians do not have workplace pension plans and Canadians are increasingly unable to save sufficiently for their own retirement.
The federal government has made economic and employment issues a priority. Recent initiatives aimed at helping older and senior Canadians have been widely welcomed, including the 2011 Guaranteed Income Supplement (GIS) increase, the non-refundable Caregiver Tax Credit, the Targeted Initiative for Older Workers (TIOW), and the elimination of mandatory retirement. But more needs to be done to ensure Canada’s aging population will be financially secure and able to prepare for retirement. The decision to change the Old Age Security (OAS) age of eligibility from 65 to 67 and the ongoing reluctance to meaningfully address pension reform will place many older Canadians in tenuous financial circumstances. Precarious employment and a retail investment environment that sidelines investor protection add to the difficulty older Canadians experience in maintaining financial security, before and after retirement.
The 2014 budget is an opportunity for the federal government to help older Canadians achieve financial security and prepare for retirement.
CARP recommends that the federal government:
1. Lead the way on comprehensive pension reform and retirement security:
- Work with provinces to create a national supplementary Universal Pension Plan (UPP) and enact a modest CPP enhancement.
- Commit to funding the replacement of the OAS and GIS benefits that will be lost by the most financially vulnerable seniors because of the changes to OAS, as a first step to restoring the OAS eligibility age to 65.
- Support single seniors, with particular regard to older women, with an equivalent to spousal allowance for single seniors in financial need and by making the Caregiver Tax Credit refundable.
2. Work with employers and provinces to create job opportunities and stable employment for older workers:
- Remove barriers to continued employment: amend tax and pension systems to encourage continued employment, such as being able to work and receive benefits while still contributing to a pension plan; create employer incentives that encourage policies such as flexible time.
- Help unemployed older Canadians in job search: further minimize work disincentives associated with the GIS claw back provisions; amend Employment Insurance rules to give older workers more time to find suitable job opportunities.
- Create job opportunities and promote the value of older workers: incent employers to hire and retain older workers; incent and/or fund employer-based job fairs and placement agencies that match unemployed older workers with relevant opportunities in their fields; incent innovative management programs such as caregiver leave/support, “emeritus” work, and flexible time and salary plans.
3. Work with provinces to create a dedicated investor protection enforcement agency, within a single national regulator:
- Work with provinces to establish a dedicated national investor protection agency with specialist knowledge to receive complaints, investigate crimes, and support prosecutions; a tribunal with authority to order restitution, undo transactions, provide mediation, and order compliance, with access provided to retail investors; and a compensation fund to pay restitution.