It’s hard to fathom why, but any time you see Alberta and Quebec standing alone, staunchly opposed to reforms to a national program, you know the average Canadian is about to get screwed.
Alberta Finance Minister Ted Morton says the Canada Pension Plan, as a payroll tax, is a job killer. In a time when CPP is the only pension plan for the majority of Canadians, and that its benefits will cover monthly heating bills and groceries and not much else for people expecting to live 20 years into retirement, killing jobs is probably not Morton’s worry.
Also opponent to raising the minimum wage, perhaps Morton seems more likely trying to keep seniors in the workforce as box-store greeters.
Way back in Canada’s history, when Paul Martin was everyone’s favourite finance minister, bringing in surplus budgets, he more or less unilaterally raised CPP and EI premiums — and nobody recalls the death of employment from that.
When Martin attended a conference in France later, he was asked how he could pull off such a miracle. Raising the premiums had kept both plans solvent, something the other major industrialized countries have never accomplished.
In France, he was told, if their pension premiums were raised to the same degree as in Canada, there would have been riots in the streets.
But Canadians, being Canadians, just paid their taxes, expecting their benefits to be there when needed.
Far from being job-killers, Canada’s fully-funded CPP and EI programs are a major international business and productivity advantage.
The years have passed, new numbers are rolling in and we are discovering that CPP benefits will not see anyone through 20 years of retirement.
For reasons that escape financial planners, Canadians don’t save for their retirement, even when doing so is fully tax deductible and all growth in savings plans is tax free.
So if one side of the coin says tax points in your favour won’t change behaviour, the other side — tax points not in your favour — won’t either.
But the fact remains that CPP benefits — and premiums — will have to rise. And it is far better we do this gradually and co-operatively.
Failure to keep CPP in tune with economic realities will be a job killer, especially for young people, for whom Morton claims to be concerned.
What’s the best way to make lead-pipe certain that young workers pay more into a system than they will ever hope to collect?
Keep CPP benefits low, so that not just poor seniors but the majority of all retirees will need to apply for supplemental benefits funded by young workers’ income taxes.
Make young people pay interest on deficit budget after deficit budget to support a generation that not only is not contributing to the system anymore, but is double-dipping (collecting CPP, and supplemental benefits, plus working part-time), and taking jobs away from young people so they can’t contribute.
That not only kills jobs, it kills the will to work at all. But it’s like fertilizer for the underground economy.
Morton is opposed to reforming the CPP.
He is opposed to making minimum wage a working wage. He is also opposed to federal regulation of the stock market, so future investors won’t be scammed as easily.
He is for pensioners collecting benefits in excess of their lifetime payments — at the expense of young workers.
He seems to be for keeping wages of young workers as low as possible. He seems to be for stock market punters hip-hopping through a web of conflicting provincial regulations looking for places they won’t get caught cheating.
And he is also in favour of Alberta creating its own pension plan, like Quebec has.
If you’re not already rich, or already collecting CPP, or have insider knowledge in the stock market, when you see Morton approach a podium with a Quebec ally, you should be wary.
Greg Neiman is an Advocate editor.