Originally published in the Toronto Star on April 5th, 2011. To go to the Toronto Star website please click here
Old age security may not be as divisive an election issue as gun control or health care, but politicians are capitalizing on pension reform to capture voters’ attention as Canada struggles to support an aging population and improve a strained public pension system.
“The hammering that most families of all ages felt in the last couple of years has made them much more aware of their retirement and financial security,” said Susan Eng of seniors advocacy group CARP. “I think it’s great that (politicians) are talking about it.”
With the first wave of baby boomers turning 65 this year, and many Canadians still reeling from having much of their retirement savings wiped out during the global recession, pensions are top of mind for many voters.
Elana Sarson, 23, said she has already started contributing to her workplace pension and a private retirement plan.
“I’m throwing things into a TFSA (Tax-free Savings Account) as quick as I can,” she said, because she doesn’t count on the Canada Pension Plan still existing when she’s ready to retire.
Sarson said she sees the pension issue as a “play for votes” targeted at baby boomers and is not satisfied that parties have explained how they will finance new benefits and increased savings options.
Pension reforms have garnered so much attention lately that Liberal MP Bob Rae will speak to the issue at a Toronto conference on Wednesday. The 2011 Summit on the Future of Pensions will also feature the Conference Board of Canada’s long-term economic outlook and the results of Towers Watson’s annual pension risk survey.
Meanwhile, federal NDP leader Jack Layton announced Monday that his party would gradually double the Canada and Quebec Pension Plans and allow Canadians to top up their public pension with personal savings.
“In this election, with one third of our workforce without any retirement savings at all, I’m asking Canadians who they trust to fight for the pensions your family relies on,” Layton said in a statement.
He also promised to invest an additional $700 million annually in the Guaranteed Income Supplement.
The Liberals have echoed the promise to add $700 million to the GIS, and proposed gradually increasing defined CPP benefits and allowing for a new, voluntary supplement to the CPP, which the party is calling the Secure Retirement Option.
“Liberals are framing it somewhat differently … in that they’re focusing on elder care and sick care and that’s the appeal they’re making, potentially, to boomers,” said University of Toronto politics expert Nelson Wiseman.
The Tories have so far stayed quiet about the pension issue on the hustings, after Quebec and Alberta stymied CPP expansion plans in December 2010. Finance Minister Jim Flaherty’s pension reform would have seen mandatory premiums paid by employers and employees gradually increase over time in order to fund a more generous pension regime. That plan was rejected, however, in favour of a scheme that would allow small businesses, workers and the self-employed to buy into a privately run pension pool.