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The budget contained no new initiatives around pensions reform and retirement security. Federal government ignores calls for National Pensions Summit, commits to only undertake consultations.
Ottawa (17 March 2010) – The Harper government’s 2010 federal budget offered nothing for low income Canadian seniors or the large percentage older workers about to retire without adequate pension income.
As expected, the budget contained no new initiatives around pensions reform and retirement security. The only commitment in the budget was that the federal government “will undertake consultations with the public on the government-supported retirement income system, including the main issues in saving for retirement and approaches to ensuring the ongoing strength of the system.”
This process is supposed to be launched later this month, however, as of yet, the Finance Department has yet to release any details regarding the consultations.
Along with the federal consultations, the provincial and territorial Finance Ministers have established a Steering Committee of Ministers on Pension Coverage and Retirement Income Adequacy. In January of this year, the Steering Committee released a 165-page paper entitled Options for Increasing Pension Coverage Among Private Sector Workers in Canada
B.C., Alberta and Nova Scotia are also in the process of undertaking their own public consultations on pensions reform.
All of this will lead up to the next meeting of federal, provincial and territorial Finance Ministers in May 2010, where they have committed to review and consider policy options on how best to ensure greater retirement income security of future generations.
There is a wide divergence amongst jurisdictions with respect to the genuine interest in proceeding with national pension reform and the various options under consideration to increase retirement income security.
Harper government’s ‘fend for yourself’ approach
At one extreme, is the ‘fend for yourself’ approach of the Harper government. They deny the fact the majority of Canadians will not have adequate income security in their retirement and feel the answer to providing retirement security for all is to have individual Canadians do a better job of accumulating private savings for their retirement. This option is supported by those who would most benefit from it, namely banks and the financial services sector.
Several provinces (most notably B.C. and Alberta) are promoting some type of national or regional supplementary pension plan in the form of a voluntary defined contribution plan.
Expand the public pension system
The most superior option, and the one being promoted by the labour movement, is an expansion of our public pension system. This option contains two elements: an increase in the GIS which is paid to low income seniors to bring their incomes up to a minimum level and a phased-in doubling of benefits under the CPP, from 25 to 50 percent of pensionable earnings, financed by a modest increase in premiums. The National Union also has a longstanding proposal to expand CPP benefits for workers who don’t have a private workplace pension.
Although none of the provincial/territorial jurisdictions have yet to endorse this option, it appears to have growing momentum and support amongst Canadians. This is in part due to the national retirement security campaign in support of an expanded public pension system which the labour movement has been running across the country over the past six months.
A flurry of activity across the country around pension reform is expected over the next couple of months leading up to the meeting of federal, provincial and territorial Finance Ministers in May 2010.
National Pensions Summit
The National Union, along with the CLC, continues to call on the federal government to host a National Pensions Summit this year in order to provide Canadians from all walks of life with an open forum to fairly explore and assess the viability of all options designed to improve retirement security for all Canadians. Such a Summit will provide an excellent opportunity for the labour movement to continue to build support for our proposals to expand public pensions.
NUPGE
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE