Harper’s pension reform: manufacturing crises

Treasury Board president Tony Clement told reporters on Tuesday that "all options are on the table" to solve Canada's looming pension crisis.

Treasury Board president Tony Clement told reporters on Tuesday that “all options are on the table” to solve Canada’s looming pension crisis. “All options” is a very broad term, but experienced Clement watchers know not to interpret his remarks too literally.

Take last year, for instance, when he told Parliament that he would turn himself over to the police if anyone could prove he chose the projects to be funded by the $50-million G8 slush fund in his Muskoka riding. Now that we’ve all seen the proof, it turns out Clement was speaking figuratively. “Turn myself in to the police” actually means “stonewall, deny, and keep pretending the evidence means nothing.”

So when he says, “all options,” it’s more than likely Clement means, “some options, which, we’ve already decided on.” Rest assured that certain options will not be considered. The option to build up the pension plan by paying back the G8 millions, which even if they had been distributed legally, were misappropriated in the first place, is not on the table. Neither is the option to roll back the Conservatives’ multi-billion-dollar tax giveaway to the filthy rich, or to quit rewarding Conservative bag-men with $132,000-a-year Senate seats.

Also missing from the table is the option to be honest with Canadians. If the government were to pursue that option, the pension crisis would be solved in a single stroke. Because, according to extensive research commissioned by the government, the crisis does not exist.

Edward Whitehouse, pension policy researcher for the OECD, studied Canada’s pension plan in 2009. The study, posted on the Department of Finance webpage, found that “Canada does not face major challenges of financial sustainability with its public pension schemes,” and “there is no pressing financial or fiscal need to increase pension ages in the foreseeable future.” In 2010, York University political science professor Thomas Klassen co-authored a study that found the same.

Harper and Clement and cheerleaders, like National Post columnist Andrew Coyne, are tossing around some scary numbers to support the notion that Canada needs to gouge a few million bucks out of the Old Age Security system. OAS cost $36.5 billion in 2010, they tell us, but that figure will skyrocket to $108-billion in 2030. In the meantime, demographic projections suggest that we will have far fewer taxpayers to support the system.

But oops, they forgot to factor in inflation and immigration. According to the Whitehouse study, pension spending is now 2.41 per cent of GDP, and will peak at 3.14 per cent in 2030, after which it will drop back to today’s levels by 2055. As to the size of the working population, the government sets immigration targets, and there is no shortage of willing workers who’d love to be paying into the Canadian pension plan.

Why are the Conservatives cooking the figures to create a phony pension crisis? Simple: they need the money. Harper’s tax cuts will cost $220 billion. He’s facing a $17-billion deficit. He plans to buy the most expensive fighter jets in the world. He’s about to pass a sweeping crime bill with no real notion of the cost. And let’s not forget the need to set a few million aside for Peter MacKay’s travel expenses.

Expect more phony crises and more attacks on social programs before this government burns itself out. Harper is going to need plenty of money over the next four years. On top of everything else, the country is still full of loyal Conservatives who don’t have Senate seats.

Al Pope won the Ma Murray Award for Best Columnist in BC/Yukon in 2010 and 2002. His novel, Bad Latitudes, is available in bookstores.

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