All talk, no action on pension reform – Opinion/Editorial
Published On Sat Apr 10 2010

You may have missed it, but the painfully slow process of reforming Canada’s ailing pension system supposedly got underway in a Charlottetown town hall last Tuesday night. This little-noticed gathering of about 100 locals kicked off what the Conservative government is trumpeting as a major consultation exercise to ensure decent retirement incomes for Canadians.

All this is in the eyes – and, apparently, ears – of Finance Minister Jim Flaherty, who insisted he was there to listen, not talk. Nor lead, from the sound of it.

This was the first of three town halls for a cross-Canada consultation ordered by Flaherty, with the next stops in Quebec City and Richmond, B.C. – bypassing Toronto and most other major urban centres. In Charlottetown, some two dozen people got three minutes at the microphone to state their views on pension reform. There will also be special meetings for “stakeholders.”

Feeling overlooked? Flaherty announced “online consultations” with a special email address ( so you can drop him a line. But the bottom line is that this looks suspiciously like another ruse by a government that is buying time in tough times.

It took a near economic collapse to make Canadians realize they are sleepwalking to retirement shortfalls if nothing is done to shore up vulnerable pensions, volatile investments, outdated bankruptcy laws – and a gaping hole that leaves nearly two-thirds of Canadians without an employer pension plan.

Four provinces, including Ontario, have undertaken reviews and are calling for pan-Canadian action. For its part, the federal government undertook its own cross-country hearings last year led by Flaherty’s parliamentary secretary, Ted Menzies (not to be confused with the new town halls launched last week).

These consultations culminated with a federal-provincial meeting of finance ministers convened in the Yukon in the dead of winter. The centrepiece of this little-noticed meeting was an Ottawa-commissioned report by University of Calgary economist Jack Mintz claiming that Canada’s pension system is a remarkable success story. The ministers agreed on little but to meet again.

Against that backdrop, the pension system is fragmenting at warp speed. Fewer companies are offering traditional “defined benefit” pensions with guaranteed payouts; increasingly, new employees are only eligible for “defined contribution” plans, analogous to RRSPs because the final payout depends on how the investment performs.

The economic upheaval of the last two years has demonstrated to Canadians that RRSP investments can dip dramatically, leaving their retirement savings plans in disarray. As well, the decline and fall of many private firms reminds us that even traditional pensions can’t always be counted on.

That’s why so many Canadians are thirsting for reform. Among the options are a voluntary CPP top-up, or a mandatory increase in the CPP, which now delivers only one-quarter of the average industrial wage in pension payouts. Flaherty’s response last month was that he would not be rushed: “There will be no back-of-the-envelope quick changes to this.”

So instead we are getting seat-of-the-pants consultations in which the government sits on its hands. The federal Conservatives have been improvising every step of the way, with rudderless hearings last year and silence ever since. After the current round of quickie consultations – which will wrap up at the end of this month – Flaherty will meet his provincial counterparts again in May.

Ontario and the other provinces are frustrated by Ottawa’s foot-dragging and puzzled by Prime Minister Stephen Harper’s reluctance to convene a national pension summit. Harper should be bringing together the decision-makers from Ottawa and the provinces, as well as the major industry and union players. Rather than more delaying tactics, Canada needs serious engagement on retirement income reforms – an issue of mind-numbing complexity, but also with the potential for future heartbreak. Instead of more town halls and glorified focus groups, Flaherty needs to focus his own thinking.

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