Retirement security is one of the most pressing economic issues facing Canadian families today.
As many as 5.8 million Canadians – nearly one third of our total work force – are facing a steep decline in their standard of living upon retirement.
For many young Canadians, the situation is even more dire. Without real action now to improve our pensions and savings, and to finally come to grips with the challenge of an aging population, a retirement security crisis is looming.
The simple truth is this: a great number of Canadians are not saving enough for retirement. Provincial governments, the Canadian Labour Congress, Canada’s largest retirement organization CARP, and various financial experts have all called on the federal government to move forward with plans to increase the Canada Pension Plan (CPP).
CIBC chief executive officer, Gerald McCaughey, has also spoke out about the need to improve our public pensions, and the former chief actuary of the Canada Pension Plan also supports increasing the CPP.
In January 2012, Prime Minister Harper announced that he would increase the eligibility age for Old Age Security (OAS), effectively raising the Canadian retirement age from 65 to 67. New Democrats have committed to reversing these changes, and expert bodies such as the Organization for Economic Co-operation and Development as well as the Parliamentary Budget Officer, agree that this dramatic change was not necessary, and that the OAS is entirely sustainable.
By 2030, Conservative cuts to Old Age Security will slash $11 billion in retirement income from seniors by raising the retirement age to 67 – that amounts to $13,000 in retirement savings out of the pocket of every Canadian senior.
Combined with cuts made by the previous Liberal administrations, cuts to both CPP/QPP and OAS will take $26 billion in retirement income away from Canadians.
Provincial finance ministers have indicated strong support for an increase to the CPP, yet in June, Finance Minister Jim Flaherty failed in his commitment to meet with finance ministers from across Canada to discuss increasing the CPP.
Now he says a meeting is planned for December. But the Conservatives have not given any indication that they will stop standing in the way of a pension benefit increase.
Along with Opposition finance critic Peggy Nash, I sent a letter to Minister Flaherty outlining the need to get on with such a meeting and to increase CPP benefits as soon as possible.
We will continue to fight for a more robust pension system and for retirement security for all Canadians.
The reality is this: Canada cannot afford not to invest in improving retirement security.
And as the Conservatives tell Canadians they will have to work two more years to collect Old Age Security, and the finance minister fails to live up to commitments to work with the provinces to increase the CPP, they are ignoring the very real challenges that Canada’s aging population faces.
The CPP Investment Board is one of Canada’s most successful investment funds that offers low risk and high return, and Canadians should be benefitting more from it. It is clear that if we do not act to secure pensions, the very stability of Canada’s economic future is at risk. The time to act is now.
Murray Rankin is NDP Member of Parliament for Victoria and Opposition critic for pensions and national revenue.