Strengthen Canada Pension Plan instead of creating Ontario version
TheStar.com – opinion/editorials – Canada needs reforms to the federal pension plan, not a duplicate system in Ontario.
Oct 18 2013. Editor
They may not like to hear it, but Ontario boomers are fast becoming the new seniors and these aren’t the best of times to be growing old. Many are in debt with limited savings and will be reliant on the meagre benefits from a Canada Pension Plan that hasn’t been reformed for years.
But the outlook isn’t all gloom. The fact that this demographic giant is awakening on the march toward old age means that delayed improvements to federal pensions will no doubt become passionate fodder for election campaigns. When it’s survival versus poverty, even the driest of policy becomes alluring.
Premier Kathleen Wynne is right, then, to push the issue of pension reform with federal Finance Minister Jim Flaherty, who so far has done nothing to address a clear and growing problem. In fact, Wynne should take a leadership role and urge all provinces to demand increased benefits under the $183-billion Canada Pension Plan. Its benefits are capped at $12,000 a year, far below the poverty line, which for many means a precarious old age.
But Wynne is mistaken to suggest the creation of a separate Ontario pension plan as an income supplement for retirees. Certainly, it could be interpreted as political manoeuvring, a way to put pressure on the federal government for better benefits. But for the good of all, pensions should stay under the domain of Ottawa, which already has the systems in place to do the job properly. However effective an Ontario program might be, there’s no need to pay for such duplication.
Equally important is the principle of national unity. Canada must retain a coherent pension plan that benefits all equally (aside from Quebecers, who for political reasons have their own tailor-made plan.) Do we really want a P.E.I. pension? Or an Alberta plan? A nation-wide pension plan is a fundamental part of Canada’s social safety net. It should be enhanced – not balkanized.
What Wynne should do is use her position as leader of the biggest province to rally other premiers — along with aging voters — to demand a Canada-wide solution.
At the same time, pressing for a supplemental provincial pension would be a substantial risk to the Liberal government’s political future. Ontarians are in no mood to contribute billions to a brand-new plan. Most barely have money left over to put into savings after paying taxes, mortgages and university fees for children whose job prospects are shaky at best. And after Ontario’s Auditor General estimated that the Liberals squandered some $1.1 billion on gas plant cancellations, the government lacks the political clout needed to pull off this scheme. It’s too much, way too soon.
So it has been curious to hear Wynne publicly muse about creating a homegrown pension fund, ostensibly created to help retirees with declining traditional private pensions — and the inadequate benefits of the CPP.
Now that Wynne is positioning herself as the “jobs premier,” it’s going to be a tough sell to force employers to pay more for each worker under an Ontario pension plan. As the Star’s Rob Ferguson reports, employers currently match the 4.95 per cent of pay that each worker contributes to the CPP, with a maximum of $2,356 a year. There’s no need to put at risk Ontario’s fragile economic growth.
Still, Wynne is right to raise serious concerns about dwindling pensions. She should encourage her provincial counterparts to work with her and push harder for federal pension reforms — benefits that will help all Canadians as they head into old age.
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