Originally published in the Toronto Star on December 21st, 2010. To go to the Toronto Star website please click here
OTTAWA—Millions of Canadians heading for retirement without adequate savings will have to keep waiting to see if Ottawa and the provinces will beef up the country’s main retirement income security program, the Canada Pension Plan.
Federal and provincial finance ministers meeting in Alberta on Monday put off a decision on whether to improve the CPP, as had been proposed by Ontario as the best way to address the pension crisis.
“We agreed that our officials should continue their work on the CPP,” said Finance Minister Jim Flaherty after the talks in Kananaskis, Alta. “We will come back at our June meeting to discuss options and concerns.”
Ontario Finance Minister Dwight Duncan, who wants to increase contributions and benefits under the CPP, said it was a step in the right direction in his campaign to improve the pension plan.
“Nobody’s preparing to do this overnight but we’ve kept it alive,” Duncan told the Toronto Star afterward.
He said the proposal to overhaul the CPP now has the support of most provinces — with Alberta being the most outspoken exception.
“I’ve heard a distinct change in tone from the federal government” over the weekend on the CPP, Duncan said. It was a reference to the letter that Ontario and five other provinces sent Flaherty demanding that Ottawa not abandon CPP expansion as an option for addressing pension problems.
That was prompted by Flaherty’s surprise move last week to put forward a privately administered, voluntary program called the Pooled Registered Pension Plan (PRPP), which is designed mainly to help the self-employed and workers at small businesses.
Flaherty and his provincial counterparts agreed to move ahead with the PRPP, which is seen as a supplement to other retirement savings programs.
With experts saying that 60 per cent of employees in Canada have no workplace pension plan and 1.6 million seniors trying to get by on less than $15,000 a year in government support, the decision Monday to keep talking about CPP reform was sharply criticized.
“The finance ministers missed the opportunity to usefully advance pension reform and instead wasted the time on interjurisdictional squabbling,” said Susan Eng, vice-president of CARP, an association of retirees.
“CARP members would have welcomed any action that improves on the status quo — which has left many of them with financial insecurity as they face retirement — for their children as well as themselves.
“Now they will be left wondering if all this was all a hollow promise in an election year,” she said of the Harper government’s commitment to pension improvements.
Liberal pension critic Judy Sgro said, “There’s nothing of any real significance here, and it’s a big disappointment.
“The minister of finance has clearly sidestepped a very, very important issue that’s facing thousands of Canadians — and that’s the lack of serious pension options for themselves.”
The proposed PRPP is a “baby step in the face of the fact that the country is facing a serious pension crisis,” Sgro said. “We’ve been waiting for 18 months. (Flaherty) has promised serious pension reform, and clearly he doesn’t understand the issue. He doesn’t recognize the importance of showing true federal leadership at the government of Canada level for all Canadians.”
Keywords: pension reform, CPP, PRPP