This summer, we have witnessed a study in contrasts in how to tackle the looming issue of retirement security, one of the biggest social and economic issues of our time. One story happened here in Ontario; the other, at the White House.
The first story came in the form of a letter from Stephen Harper's finance minister to the province of Ontario. The federal government, said the finance minister, will not help Ontario in any way in implementing the Ontario Retirement Pension Plan (ORPP). It will not amend legislation. It will not allow access to the Canada Pension Plan's (CPP) efficient administration system. It will not even share data with the province.
"Take a hike," was the federal government's basic message. We will not help you improve pensions unless you do it our way. And our way is simple: Canadians should do it themselves. Just figure it out.
There is no retirement crisis, says the Harper government. Never mind that our mutual fund industry has among the highest fees in the world, while our best public pension funds have among the lowest costs despite excellent performance. Never mind that the capital markets are increasingly tilted against the interests of ordinary people. Never mind that employers have been abandoning defined-benefit plans for decades. Never mind that some of the most credible researchers in the country -- including Michael Wolfson, who built the federal government's most sophisticated tools for modeling the retirement security system -- have called for a significant enhancement to the Canada Pension Plan.
Meanwhile, south of the border, President Obama convened a once-in-a-decade event called the White House Conference on Aging. Thousands participated from across the country, including hundreds of members and the international leadership of my union, the Service Employees International Union (SEIU). Among the key themes of the conference was retirement security.
Unlike the Harper government, President Obama acknowledged the challenge: "In today's economy," he said, "saving for retirement has gotten tougher." Private pensions have disappeared and purely voluntary savings schemes tend to work mainly for the wealthy, not the lower or middle classes.
The outcomes from the President's conference included a range of federal measures to enhance retirement security.
Perhaps most importantly, President Obama praised a growing tide of state government efforts to improve retirement. He also offered the federal government's full support, calling on the federal labour department to issue rules to promote state-level pension innovations that will make it easier for workers to save for retirement in a secure and cost-effective manner. In other words, President Obama has taken a constructive and supportive position, in contrast to Stephen Harper's on this important issue.
More and more states have stepped up to help fill the pension gap left from private-sector employers abandoning the space. Referred to by some as the "Secure Choice" pension, such initiatives are based on the idea that public-sector pensions could be the basis for solutions to the retirement security crisis in the private sector.
According to the Georgetown Center for Retirement Initiatives, five states have enacted legislation enabling state-sponsored retirement savings plans and at least half of U.S. states have considered proposals to either study or establish such a plan. This includes states with both Democratic and Republican leadership, including traditionally GOP states such as Kentucky and Utah.
Obama and dozens of U.S. state governments have figured something out that Stephen Harper hasn't. Tackling the retirement security crisis requires collaboration and practical solutions, not partisanship and ideology. Ontario's government, which is showing bold leadership by moving forward with the ORPP, has figured this out, too.
Practical collaboration is at the heart of Canada's past successes in retirement security. Putting the Canada Pension Plan on a sustainable path in the 1990s required governments of three political stripes to work together. Building Canada's world-leading public pension plans -- including the Healthcare of Ontario Plan, which our union is proud to have helped found and continues to sponsor -- required collaboration among employers, unions, governments and some of the best investment minds in the country.
The sooner we have a federal government that can put aside its partisanship and start to work constructively with others, the sooner we'll have real pension solutions that will help workers, governments and the economy.
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