The Trudeau government's first budget offered hope but little change on increasing the CPP in our lifetime. After extolling the virtues of the Canada Pension Plan, we're told that the finance ministers talked about enhancing the CPP last December and set a goal of making a collective decision before the end of 2016.
"There are lies, damned lies and statistics" is the well-worn phrase, but nothing better sums up the recent Fraser Institute scare mongering about taxes being the single largest budget item of Canadian households -- as catchy as the headlines may be, it is alarmist spin. Such biased economic exercises raise a fundamental question: Just what indicators should we be using to keep score on Canada's economic performance?
Before we blindly adopt the Australian pension system as our own, we need to take several long moments in deep thought and contemplation -- and look at the evidence. Yes, you are able to invest as you wish. In fact, you are responsible for investing your dollars to achieve the highest rate of return available. Is this something for which you feel capable?
Pension reform continues to hold interest across the country, especially given the willingness of the federal Conservatives to at least talk about expanding the Canada Pension Plan (CPP). Pundits and politicos are weighing in now with blunt talk of "voluntary" or "mandatory" enhancements to CPP. Neither may be exactly what Canadians want. Here's why.
The pre-election debate on improving the Canada Pension Plan is important and overdue. Despite the Harper government's reluctance, there is a broad consensus that, as a national newspaper said recently, "raising mandatory CPP contribution rates and boosting future payouts are the most prudent, most effective and least costly fix." But that's not enough.
A new report came out this week that reiterates what we've heard from other sources a few times now: Canadians aren't saving nearly enough for retirement. The Deputy Chief Economist of the CIBC warns that without pension reform now, younger workers today will see a steep decline in living standards as they retire. The Conservative government has recently announced it would like to have a dialogue with Canadians about a potential expansion of the Canada Pension Plan (CPP). While this, in itself, is a purely political action -- since it commits the government to nothing -- it is worth looking at what the possible outcomes might be.
Canadians are worried about their retirement. Recent polls show that among working aged people there is a growing concern that they simply won't be financially secure in retirement. This concern is validated by statistical data showing that a significant segment of society is having trouble saving enough. Instead of turning a blind eye to a known problem, the Government of Canada should be trying to help Canadians retire with dignity. Clearly, the time is right. All that is missing is federal leadership. Unfortunately, Canadians just won't get it from Stephen Harper, who has always disliked the CPP.