Finance minister gets feedback on pension proposals

Ontario Finance Minister Charles Sousa used a town hall meeting organized in Brantford by a retired citizens lobby group to advance the minority Liberal government’s plan for an enhanced pension plan.

In a meeting room in the Carnegie Building of Laurier Brantford on Monday afternoon, Sousa praised local organizers of CARP – formerly the Canadian Association of Retired Persons – for helping spread the word on the need for pension reform and ways of inducing citizens to save more.

“I’m really encouraged and thankful that CARP is showing leadership,” Sousa told more than a dozen people – many of them members of the Hamilton and Brantford chapter of CARPs – in the town hall discussion.

He said CARP’s public advocacy is paying off in educating the public about a looming problem of people not putting away enough savings for retirement that must be addressed.

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“They’re looking after the interests of their children and grandchildren. The situation is only going to get worse if we don’t address it.”

Sousa and the minority Kathleen Wynne government have been pushing for a supplementary pension vehicle to “improve” the effectiveness of the Canada Pension Plan.

Now the government wants to expand the concept into a new nationwide retirement savings system alongside CPP, but controlled jointly by the provinces and territories.

Sousa is using a series of town hall meetings as a public information vehicle.

“We need to take a second look at what we do in education about this question,” said Brant MPP Dave Levac.

“We have to do it holistically instead of saying it’s up to the government to do this.”

Sousa heard that his message fits well with CARP’s call for a “universal pension plan” and a “modest CPP enhancement.”

According to CARP’s literature, the pension reform targets middle-income earners who are especially unlikely to have workplace pension plans or to have saved enough for retirement on their own.

Studies show:

Two-thirds of the workforce – 12 million working Canadians – do not have workplace pension plans.
Private savings options, such as RRSPs have not been the answer to retirement security.
In 2001, Canadians contributed $34.4 billion to RRSPs, which was only 4.5% of the total room available to eligible tax-filers. There is still $738 billion of RRSP contribution room untouched.
Some in the meeting had concerns.

“What I’m afraid of is that this will lead to bigger contributions by employers and employees,” said Robert Anes.

Levac asked Sousa if there are studies showing whether extra premiums could create unemployment.

There are studies, Sousa responded, but the results “are all over the map.”

Eng noted that when former prime minister Paul Martin increased premiums to protect the sustainability of CPP, some groups “went berserk” and issued dire warnings that the move would cost jobs.

“In fact, jobs went up,” said Eng, clarifying that the government’s move took place while the economy was in recovery.

Eng also said that research shows that unless premiums are mandatory “people won’t save.”

Eng and Sousa labelled the warnings of opponents as “fearmongering.”

Jack Wilson noted that a provincial election is likely this year.

“What happens if the Liberals don’t get back in?” he wondered. “Will this end?”

Sousa responded that the advocacy is just the beginning of a discussion with much more to come.

He said he hopes that the quest for pension reform will be taken up by whichever party wins the election.

© The Brantford Expositor