Finance ministers ponder pensions

Last week, finance ministers agreed changes must be made to the Canadian pension system. But it will be some time before Canadians find out what these changes will be.

Last week, finance ministers agreed changes must be made to the Canadian pension system.

But it will be some time before Canadians find out what these changes will be.

“We agreed that we would move forward to the next stage, which is to drill down on the options with respect to pension reform,” said Canadian Finance Minister Jim Flaherty in Whitehorse on Friday afternoon.

“The ministers agreed that our officials will work collaboratively over the next few months to assess these options.”

The ministers will consider specific recommendations at the next finance ministers meeting in May.

Consensus was reached on the point that whatever solution is finally considered, it should be a pan-Canadian plan.

“We know Canadians move around the country – as they should – to seek work and so on,” said Flaherty.

“And we want to make sure that pension coverages are uniform across the country and someone doesn’t jeopardize their pension coverage because they take a job somewhere else.”

The politicians also discussed the economic stimulus plan and financial literacy at the meeting.

The issue of financial literacy reflects on the need for pension reform, said Flaherty.

“We need to make sure that Canadians are aware of and educated with respect to the savings tools that are available to them, such as RRSPs, tax-free savings accounts, the registered educational savings plan, registered disability savings plans, and so on.”

More than 11 million Canadians don’t have an employer-sponsored pension plan, according to the Canadian Labour Congress.

And 1.6 million seniors live on less than $11,300 a year.

The labour group is lobbying for a doubling of Canadian Pension Plan benefits.

The finance ministers did not agree the Canadian pension system was in crisis.

“Research tells us that our retirement income systems are in good shape, said Flaherty.

“There may be room for improvement; we need to focus on that, drill down on it and make sure we get it right.”

Expanding the CPP would have the effect of a payroll tax, which would affect the recovering economy, Flaherty added.

In BC and Alberta, only 20 per cent of private-sector workers are covered by company pension plans.

The two provinces were threatening to create their own public supplement to the Canadian Pension Fund if there was no progress at the meeting.

“It was a dilemma for us,” said BC Finance Minister Colin Hansen.

“Do we push ahead, or work together with other Canadian provinces and build that national consensus?”

Both BC and Alberta agreed that it would be better to wait for a pan-Canadian plan.

Hansen previously promised BC residents that they’d have a supplemental plan sometime in 2010.

“That timeline would now be optimistic,” he said.

“But we have also expressed our point of view that if there is not a consensus that can be arrived at in a reasonable length of time then we are prepared to proceed with structuring a supplemental plan that involves a grouping of provinces.”

The two western provinces are not locked into the supplemental pension plan option, said Hansen.

“We have a whole series of options that the provinces and the federal government are going look at,” he said.

“We promised we would look at all the options; we’re not going to take any option off the table yet, until we have some definitive research done.”

“At the end of the day, it may be a combination of options,” he added.

Hansen echoed Flaherty and the other ministers, saying that we do not have a pension crisis in Canada.

“Canada is recognized globally as being one of the countries that has one of the lowest poverty rates among seniors of any of the OECD countries,” he said.

“We want to make sure we protect that.”

The Canadian Labour Congress believes the system is in crisis and supplementing the Canadian Pension Plan is the best way to deal with the issue.

What the country doesn’t need is more studies into pension reform, said Joel Harden, of the Canadian Labour Congress.

“Some shelves in Ottawa are breaking under the weight of all of the studies that have been conducted on this issue.”

The system is fine for those few Canadians with a defined benefit plan, said Harden.

“But even for those folks, if your employer finds itself in bankruptcy, things you could work decades for could be lost in an instant.”

The labour congress would like to see Ottawa insure these private pension plans in case of bankruptcy.

Harden also took issue with the comment made by many of the ministers that pension problems are mainly affecting middle-income Canadians.

“This is a Canadian issue that affects all Canadians,” said Harden.

“Much like Medicare, we all put in a little bit and we all benefit.”

Harden felt confident that once a national debate is started on pensions in this country, many more Canadians will come forward to ask for significant reform.

“I’ve talked to people that have had to budget food or had to eat peanut butter for days in a row,” Harden added.

“I’ve talked to people who are really suffering out there.”

Contact Chris Oke at

chriso@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Mayo-Tatchun MLA Don Hutton sits on the opposition side of the legislative assembly on March 8 after announcing his resignation from the Liberal party earlier that day. (Gabrielle Plonka/Yukon News)
Don Hutton resigns from Liberal caucus; endorses NDP leadership

Hutton said his concerns about alcohol abuse and addictions have gone unaddressed

Crystal Schick/Yukon News
Calvin Delwisch poses for a photo inside his DIY sauna at Marsh Lake on Feb. 18.
Yukoners turning up the heat with unique DIY sauna builds

Do-it-yourselfers say a sauna built with salvaged materials is a great winter project

d
Wyatt’s World

Wyatt’s World for March 5, 2021.

g
Yukonomist: School competition ramps up in the Yukon

It’s common to see an upstart automaker trying to grab share from… Continue reading

The Yukon government responded to a petition calling the SCAN Act “draconian” on Feb. 19. (Yukon News file)
Yukon government accuses SCAN petitioner of mischaracterizing her eviction

A response to the Jan. 7 petition was filed to court on Feb. 19

Chief Medical Officer of Health Dr. Brendan Hanley receives his first dose of the COVID-19 vaccine from Public Health Nurse Angie Bartelen at the Yukon Convention Centre Clinic in Whitehorse on March 3. (Crystal Schick/Yukon News)
State of emergency extended for another 90 days

“Now we’re in a situation where we see the finish line.”

The Yukon government says it is working towards finding a solution for Dawson area miners who may be impacted by City of Dawson plans and regulations. (Joel Krahn/Yukon News file)
Miner expresses frustration over town plan

Designation of claims changed to future planning

Team Yukon athletes wave flags at the 2012 Arctic Winter Games opening ceremony in Whitehorse. The 2022 event in Wood Buffalo, Alta., has been postponed indefinitely. (Justin Kennedy/Yukon News file)
2022 Arctic Winter Games postponed indefinitely

Wood Buffalo, Alta., Host Society committed to rescheduling at a later date

Housing construction continues in the Whistle Bend subdivision in Whitehorse on Oct. 29, 2020. (Crystal Schick/Yukon News file)
Yukon Bureau of Statistics reports rising rents for Yukoners, falling revenues for businesses

The bureau has published several reports on the rental market and businesses affected by COVID-19

Council of Yukon First Nations grand chief Peter Johnston at the Yukon Forum in Whitehorse on Feb. 14, 2019. Johnston and Highways and Public Works Minister Richard Mostyn announced changes to the implementation of the Yukon First Nations Procurement Policy on March 3. (Crystal Schick/Yukon News file)
Third phase added to procurement policy implementation

Additional time added to prep for two provisions

Crews work to clear the South Klondike Highway after an avalanche earlier this week. (Submitted)
South Klondike Highway remains closed due to avalanches

Yukon Avalanche Association recommending backcountry recreators remain vigilant

RCMP Online Crime Reporting website in Whitehorse on March 5. (Haley Ritchie/Yukon News)
Whitehorse RCMP launch online crime reporting

Both a website and Whitehorse RCMP app are now available

A man walks passed the polling place sign at city hall in Whitehorse on Oct. 18, 2018. The City of Whitehorse is preparing for a pandemic-era election this October with a number of measures proposed to address COVID-19 restrictions. (Crystal Schick/Yukon News file)
City gets set for Oct. 21 municipal election

Elections procedures bylaw comes forward

Most Read