It appears that a Canada-wide deal on CPP expansion is a bust, as Ottawa was the only objector and Ontario is now vowing to go it alone. It doesn’t appear that the Ontario government has a concrete proposal as of yet, but they will develop one in the coming months. It is truly unfortunate that a countrywide deal was not possible at this point. What does this mean for Canadians? It means that if they move around the country throughout their career they will receive varying amounts of post-retirement support, given the different provincial pension schemes. This will certainly make it much more difficult to plan for retirement. However, given Ottawa’s recalcitrance, expansions by the provinces is better than nothing for middle class Canadians.
Entries Tagged as 'Pensions'
December 18th, 2013 · David Macdonald · Economy & Economic Indicators, Ontario, Pensions, Poverty and Income Inequality
The recent report of the Intergovernmental Panel on Climate Change (IPCC) should be a wake-up call for Canada. With a development model based on ever more fossil fuel extraction, Canada’s economy and financial markets are on a collision course with the urgent need for global climate action.
The IPCC, for the first time, stated an upper limit on total greenhouse gas emissions – a global “carbon budget” to keep temperature increase below 2°C. This is considered to be the threshold for “dangerous” climate change, and also the target for international climate negotiations.
This is the text of remarks I made today to Vancouver city council on divestment. Earlier this year, Council requested that staff report back on how the city’s financial investments align with the city’s mission and values, and various ethical programs like the city’s purchasing policy and the greenest city initiative. So the meeting was essentially about the contents of the staff report.
The outcome of the meeting was a small victory for divestment. Council recommended:
Canada’s economic development model is on a collision course with the urgent need for global climate action. Worldwide, extreme weather events from drought to floods to powerful storms and record-breaking temperatures are making a powerful statement that climate change can no longer be denied.
Hurricane Sandy, which rudely interrupted a US election in which candidates ignored climate change, pushed climate action back onto the US policy agenda. Costs are piling up, with one recent estimate of $1.2 trillion per year in global damages already from climate change and related environmental costs from a carbon-intensive economy.
Divestment from fossil fuels is an idea whose time has come. Sparked by Bill McKibben’s Rolling Stone article last summer, “Global Warming’s Terrifying New Math”, divestment campaigns are now up and running on over 300 university campuses in the US, with 4 early victories already notched. Students in Canada have declared tomorrow (March 27) Fossil Fools Day, a national day of action, with many campuses launching divestment campaigns.
The C. D. Howe Institute have put out a study on later retirement by Peter Hicks, a former senior official with HRSDC and the OECD who has written a lot on the policy implications of ageing societies. I find this to be one of his less convincing efforts.
The argument – with parenthetical comments – is as follows.
1) Employment rates of older workers, including those over age 65 have been rising rapidly, and this trend can be expected to continue “without any policy action” (p.20). Indeed, employment rates can be expected to rise significantly higher and future retirees can be expected to work at least five years longer on average. (A convincing case is made that current base case scenarios under-state the degree to which older workers will retire later.)
April 3rd, 2012 · Erika Shaker · Economy & Economic Indicators, Employment and Labour, Federal Budget, Pensions, Poverty and Income Inequality, Satire
“It’s time for the public sector to have its 2008 recession,” proclaimed former RBC Chief Economist Patty Croft, impeccably dressed and looking admirably well-rested (early retirement seems to suit her), on CBC Newsworld’s The Bottom Line.
We know that governments make budgets, and budgets are about choices, but her wish list struck me as oddly personal—more grudge match than analysis. However, by 4:00 pm on March 29th, Patty’s Proclamation turned out to be prophetic.
Budget 2012 certainly spreads the pain around—paying special attention to some of the most vulnerable. But it’s a lot less generous when it comes to sharing the recovery.
March 30th, 2012 · Bruce Campbell · Economy & Economic Indicators, Employment and Labour, Federal Budget, Pensions, Poverty and Income Inequality
The 2012 federal budget, which purports to deliver “jobs, growth and long-term prosperity,” does nothing of the kind. Make no mistake, this is an austerity budget— spending cuts outpace new measures 7:1— that worsens income and inter-generational inequality, destroys jobs and locks in a slow growth, high unemployment future.
Let’s start with jobs. It mandates $5 billion in cuts to the public service phased in over three years. The government claims this budget only axes 19,000 jobs, but that’s truly just the tip of the iceberg. Combine this year with the previous two year’s spending cuts, they will have resulted in over 70,000 full-time job cuts over the next three years (35,000 in the public sector and 37,000 in the private sector), adding 0.3% to Canada’s unemployment rate.
Table 2.1 envisions a 7.5% unemployment rate this year, slightly above last year’s rate of 7.4%. That seems like an admission of failure from a budget ostensibly about job creation.
This table also projects real GDP growth rates of 2.3% in Canada versus 2.6% in the U.S. over the next five years. The higher American figure may well be realistic given that the U.S. economy is starting to bounce back from a more depressed level than Canada. However, these forecasts further deflate the Conservative talking point about outgrowing our American cousins and the rest of the world.
The Budget justifies raising the age of eligibility for OAS and GIS on the grounds that the long-term fiscal sustainability of the program is being undermined by rising life expectancy.
No estimates of savings are provided. They will be very modest.
Given that average life expectancy at age 65 is 20 years, raising the eligibility age by two years could only save a maximum of 10% of projected spending on future retirees if implemented immediately.
However, the government proposes to phase in the increased eligibility age between 2023 and 2029 which will hugely reduce any savings relative to current projections.