06/02/2015 07:32 EDT | Updated 06/02/2016 05:59 EDT

The Government Should Help Canadians Retire With Dignity

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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. The solution is simple: phase-in a modest expansion of the Canada Pension Plan (CPP).

The low management fees and high rates of return earned by the CPP management board would make this the lowest cost and safest new pension option for Canadian workers. And as the existing plan is actuarially sound for the next 75 years, Canadians can feel confident that the existing and expanded CPP will be there for them when they retire.

Unfortunately the average new retiree receives only about $600 a month from the current plan. That simply isn't enough.

That's why, during the 2015 election, Liberals will be going door-to-door, asking the people of Canada for a mandate to sit down with the provinces and develop a plan to fund a gradual enhancement of the CPP's defined benefit plan.

Ironically, it was the late Conservative Finance Minister Jim Flaherty who got the ball rolling on this idea. In early 2010, he began consulting widely with Canadians on the issue. He then wrote to provincial finance ministers saying, "In my consultations, I heard strong support for the Canada Pension Plan and the central role that it plays in our government-supported retirement income system. I believe that we should consider a modest, phased-in, and fully funded enhancement."

Since then, Prince Edward Island has put forward a proposal for an increase to the core CPP. Ontario is moving ahead with its own provincial pension plan. Most other provinces have expressed strong support for modest CPP expansion over the past five years as well.

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. In fact, he is rumoured to have put an end to Mr. Flaherty's efforts to expand the plan. At the time of the 1998 CPP reforms, Mr. Harper said the following to The Globe and Mail: "Take all the federal economic boondoggles that have ever happened and multiply them 100-fold, and you've got the CPP investment board." In his infamous Alberta Firewall letter he urged the province to pull out of the CPP.

CPP enhancement will simply never happen under Stephen Harper. The Conservatives' sudden about-face announcement that they will consult on voluntary CPP expansion is just a cynical ploy to make Canadians think that after almost a decade they are actually doing something on pension reform. The truth is that they had already consulted widely on a supplemental voluntary CPP just a few years ago and rejected it.

Instead, you'll hear the Conservatives say that enhancing the core CPP's defined benefits will require a job killing tax. But let's look at the facts: In the six years after the January 1st 1998 CPP reforms began, Canada saw the number of jobs grow by 14 per cent. Mr. Harper can only dream of job creation numbers that good. In the six years since the end of the recession, the number of jobs has only grown seven per cent. Evidently, their claims don't hold up.

Canadians can rightly question the sincerity of this government when it comes to basic retirement security for seniors. But they can rest assured that a Liberal government under Justin Trudeau is committed to working with all provinces and territories, with workers, and with employers to enhance the Canada Pension Plan for future generations.

Canadians should be able to retire with dignity, and that must be a guiding principle for governments at all levels.


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